Running head: MICROSOFT LEADERSHIP 1

Pro600 Communication Problem Solving and Leading in Professional Fields

Project Six: Team Project

LEADERSHIP AND MICROSOFT

Tania Anderson, Joseph Gabin, Michael O'Neill, and Richard Smith

University of Maryland University College

MICROSOFT LEADERSHIP 2

Executive Summary

Microsoft has had great success over the last several decades through its innovative and

industry changing products. However, with Microsoft’s success has also brought many

challenges and has led to a change of leadership in recent years. The challenges include having

to constantly reach goals in terms of revenue, production and quality of the products. These

challenges have been counter acted through the development of their teamwork strategy by

focusing on a role excellence function, that creates a central contact point that meshes the

product and role deliverables. Microsoft has also placed an emphasis on providing leaders with

all the tools and training necessary to progress through the ranks of the company and

successfully lead their teams through five developmental components, including leadership

conferences, one on one coaching and small learning peer circles.

In 2010, Microsoft went through a change in leadership. The new leaders decided to

change their focus to creating products and features that were more collaborative and integrative

for the consumer. The problem that Microsoft is currently facing relates to the releases of the

new platforms for Microsoft office and Windows. With these two platforms, Microsoft found

issues in showing consumers that there are truly new and innovative features in these platforms

that separated it from the past versions. To solve this issue, Microsoft made these platforms

collaborative through making them easier to use and access on several of the consumers devices.

Since 2010 Microsoft’s stock price has close to tripled, going from $25.82 in June of 2010 to

$72.38 a share today. This shows that the leaders at Microsoft have made proper changes to deal

with the challenges that the company has faced in the present, and has set the company up for

more success in the future.

MICROSOFT LEADERSHIP 3

MICROSOFT LEADERSHIP

Principles of Teamwork Within an Organization

Microsoft Corporation uses many different tools to ensure that its teams work to perform

in positive ways. These tools help to increase revenue, produce state-of-the-art products that are

have minimal errors, high-level customer service across the board and retention of those hired by

the company. CEO of Microsoft Corporation, Satya Nadella, defines teamwork as not being

static. Changes occur such as seasoned employees leaving the organizations, new staff joining,

customers’ requirements of products may need to be modified to impacts affecting project goals

and budgets (Venkatesan, 2014). With Microsoft having over 110,000 employees around the

world, this has its challenges but does not stand in the way of Microsoft Corporation getting the

performance it needs by its team members.

One way that Microsoft Corporation does this by practice is with the utilization of a tool

that assist in optimization of its team’s talents called Role Excellence. This function supports key

operational groups. This unique way of team management allows the employees to obtain the

support they need to exceed consistently the expectations of their functions and this is done by

the duties and goals of the employees within the organization being aligned with Microsoft

Corporation’s structure, process enhancements, continued learning and more (Wilson, 2017).

Microsoft challenges include having to consistently reach their daily goals when it comes

to revenue, production, and the quality of their products. The effects of this challenge are as

follows. A small team can have a variety of talented staff tasked to develop new products. To

avoid points of failure, team leaders have to be aware of the issues when the new product task to

develop is huge and the deadline is very short (Cusumano, 1997).

MICROSOFT LEADERSHIP 4

Having organizational team dedicated to a Role Excellence function influences Microsoft

Corporation in getting past those challenges by way of its teamwork strategy. Having this,

creates a way to have a central contact point that meshes all the product and role deliverables, at

the same time, ensuring that they are meeting the expectation for the strategies of Microsoft

Corporation (Wilson 2017). Within this system, putting together feedback received through this

process helps leadership see what the issues are and by this, be able to outline the priorities to

help staff be better with their business operational functions (Wilson 2017).

The management of those who lead each team is called the role owner and this person is

responsible for creating role excellence profiles, which is a model of what the behaviors of the

best performing employees are. In addition, the role owner must create role taxonomy which

includes job descriptions, commitments, compensation and more across Microsoft Corporation

(Wilson, 2017).

Best Practices for Leaders

The opportunity for ongoing learning and development is a commitment Microsoft makes

to all employees. Microsoft invests more than $375 million annually in formal education

programs directed at the employees, managers, and all leaders. In addition to the development

offered to all employees, Microsoft invests in a smaller group of employees who have the

potential for taking on more critical roles (Corporate Leadership Council, 2005). These

individuals are identified and considered for more focused career development, which may

include participation in one of several professional development experiences known as high -

potential development programs.

Five Development Components

MICROSOFT LEADERSHIP 5

Microsoft allows emerging and experienced leaders to learn from each other through five

developmental components. Each component is executed differently at each tier to provide a

unique development experience that builds leader capability over the duration of the experience.

This creates consistency and integrated development for emerging leaders as they move

vertically through the tiers.

Orientation provides the programmatic component and is designed to address learning

needs that high potential candidates have in common, such as understanding the business

strategy at Microsoft and understanding what it means to be a leader at Microsoft. Leadership

conferences are business conferences, roundtable discussions, and live meetings that bring

internal and external executives and high potential candidates together for mutual benefit and

learning. Building and promoting a common leadership culture as exemplified by the leadership

competencies; developing leaders for the future, while establishing a strategic link between

senior and rising leaders. Learning circles are small peer - based learning groups designed to

connect diverse groups of high potential candidates to mutually support each other in developing

themselves as leaders. In addition to learning circles, Microsoft offers one on one partnerships

through coaching and mentoring that inspires the individual to maximize his or her personal and

professional potential (Corporate Leadership Council, 2005). Microsoft has a strong commitment

to building leaders at all levels. The high potential candidates program is an integrated and

comprehensive development program encompassing multiple learning methodologies, tailored to

each leader’s level in the organization.

How the Composition Microsoft’s Leadership Influences Outcomes

Microsoft is a company in transition. For much of its existence Microsoft has been led

by strong personalities from the top down (Kawasaki, G. 2008. Para 2&3). Each business group
MICROSOFT LEADERSHIP 6

focused on its own part of the company ignoring the others (Chacos, B. 2013. Para 5). However,

in the early 2010s stagnant stock prices and loss of market share has pushed Microsoft to

embrace a more collaborative leadership style (Hawn, C. 2004. Para 7). While it is too early to

judge their new structure, studying their old leadership sheds light on what brought about this

change.

Leadership

Microsoft’s siloing of its business units help with leaders tightly controlling their groups.

This has been typified by Steven Sinofsky, the former head of the Windows business unit.

Sinofsky is a “Stalinesque” leader who wanted complete control of his silo (Vance, A., Bass, D.,

Burrows, P., & Ricadela, A. 2012. Para 4). He fostered a competitive culture that poached talent

from other business units, and shut down competing projects (Vance, A., Bass, D., Burrows, P.,

& Ricadela, A. 2012. Para 2&5). Sinofsky was one of the last old guard leaders to leave the

company, but he was removed in 2012 as part of the companies move to a more collaborative

leadership style (Vance, A., Bass, D., Burrows, P., & Ricadela, A. 2012. Para 3).

One of the reasons that Microsoft structured its existing business units in this way is the

leadership’s view of their market place. Bill Gates, one of Microsoft’s founders, describes their

products as never wearing out, so to keep their revenue stream they must devote resources to

existing business (Hawn, C. 2004. Para 19). The idea is consumers do not need to keep buying

their product, but they can entice customers to buy new features (Hawn, C. 2004. Para 19).

Microsoft spends 90% of its research and development budget (R&D) on developing these new

features for existing business, leaving little for new product creation (Hawn, C. 2004. Para 18).

The “new feature” of a more collaborative Microsoft is a unified system design that is easier to
MICROSOFT LEADERSHIP 7

develop for (Chacos, B. 2013. Para 11). This explains Windows 8 being designed and sold as

the same operating system for desktops, laptop, and tablets (Chacos, B. 2013. Para 4&16).

Outcomes

Microsoft was the king of the personal computer market through the end of the twentieth

century, but has lost a lot of prominence in the two-thousands. The markets have noticed

Microsoft has been jogging in place for much of the early twenty first century, and its stock

prices barely changed from 2000 to 2004 (Hawn, C. 2004. Para 7). Much of the reason for this is

Microsoft’s failure to expand into new products, a direct result of focusing so much of its R&D

into new features for existing businesses (Hawn, C. 2004. Para 14). Even the money Microsoft

does put into new product lines is famously inefficient, spending way more than other companies

for less of a result (Hawn, C. 2004. Para 11&22). This has led to Microsoft getting 60% of its

revenue from two products Windows and Office (Hawn, C. 2004. Para 23).

Another outcome from Microsoft’s old leadership style is its move to the “One Microsoft,

all the time” organizational change (Chacos, B. 2013. Para 1&2). This is the breaking apart of

the silo structure and focusing on collaboration and integration (Chacos, B. 2013. Para 4&7).

Even before Sinofsky, a 23-year veteran, left the company in 2012 the system had started to

move in this direction (Vance, A., Bass, D., Burrows, P., & Ricadela, A. 2012. Para 3). Many

new division heads have been put in place, with a focus on collaboration instead of isolation

(Vance, A., Bass, D., Burrows, P., & Ricadela, A. 2012. Para 7). Microsoft hopes that its newly

combined teams will be able to create a unified design sensibility that will carry it into the future

(Chacos, B. 2013. Para 16). This is not a shift in Microsoft’s R&D thinking, merely looking to

integration as the next feature to sell its existing products.

Judging the Success of Project Teams, Immediate and Long Term

MICROSOFT LEADERSHIP 8

Microsoft is a company that has publicly faced problems and change in leadership over

the last few decades. These problems have risen from issues that have developed within the

company and the constant need to keep up with the challenges of their industry. Microsoft has

faced many of these challenges due to the uniqueness of the industry and competition that it

currently is dealing with. As spoken of earlier, the company has decided to place a higher

importance on collaboration and integration in order to keep up with a competitive and fast

paced industry (Hawn, C. 2004. Para 7). It is important to analyze this decision as a company to

determine the effect it has had on the company’s well-being, both in the present and in the future.

Evaluating Successes

A unique issue to Microsoft is that much of their success is based on the ability to sell

features and upgraded programs to customers. This is mainly involving the Microsoft Office and

Windows Platform. It has become difficult to add enough new features to these platforms in

order to attract interest from the consumer. “New releases bring some user interface tweaks and a

handful of new features, but on the whole there's little that Windows 8 can do that people can't

do with Windows 7, or for that matter Windows XP.” (Kingsley-Hughes, 2014). To solve this

problem, Microsoft’s platforms have recently placed a higher emphasis on integration amongst

devices and the ability for Microsoft Office to be used on Macs as well. “with this latest roll out

Microsoft is now starting to focus on heterogeneous platform support by releasing Office 2016

for Mac at the same time as its Windows version, aligning focus on supporting collaboration and

productivity whilst encouraging enterprises and workforces to adopt the new software more

widely.” (Seddon, 2015 Para 6). Making integration easier for enterprises is important because

there are a great amount of companies across the world that rely on these types of platforms and

need the software to be collaborative to maximize their efficiency at the workplace. This has
MICROSOFT LEADERSHIP 9

proven to be a successful strategy because the company’s stock price has close to tripled since

2010, increasing from $25.82 a share on 06/07/2010 to $72.38 a share today (NASDAQ, 2017).

The stock price of Microsoft is the truest way to evaluate the success of the leadership change

because it shows the company’s value drastically increasing. It is apparent that the change in

leadership and philosophy has been a success in the present, and looks to be trending upward in

the future with the improvements of their platforms.

Conclusion

In conclusion, Microsoft has had to deal with many unique challenges within the

company and throughout their industry over the past several decades. They have also had to

make many changes in order to stay competitive and ahead of the industry including a change in

leadership and philosophy. The unique industry that Microsoft has been a part of has required

innovation and consistency to keep the consumer happy and staying ahead of the competition.

By changing to a leadership that has placed the focus on collaboration and integration amongst

their software platforms, the value of the company has risen, along with the efficiency of their

platforms. Through evaluating the current practices of the leadership and the way challenges

have been overcome, it is apparent that the leaders have successfully dealt with issues plaguing

the company and seem to have the steps in place to overcome any issues in the future.
MICROSOFT LEADERSHIP 10

References

Chacos, B. (2013). What Microsoft's unified vision means to you. Pcworld, 31(9), 6. Retrieved

from http://eds.a.ebscohost.com.ezproxy.umuc.edu/eds/detail/detail?sid=facb5d5d-b10f-

482c-b8b4-

7da516aa4157%40sessionmgr4008&vid=1&hid=4210&bdata=JnNpdGU9ZWRzLWxpd

mUmc2NvcGU9c2l0ZQ%3d%3d#AN=90510436&db=f5h

Corporate Leadership Council. (2005). Realizing the full potential of rising talent (volume 1).

HR Intelligence Quarterly .

Cusumano, M. A. (1997). How Microsoft Makes Large Teams Work Like Small Teams. Sloan

Management Review, 39(1), 9.

Hawn, C. (2004). WHAT MONEY CAN'T BUY. Fast Company, (89), 68-73. Retrieved from

http://eds.b.ebscohost.com.ezproxy.umuc.edu/eds/detail/detail?sid=9f5566e1-57a1-4961-

879c-

e8da8ef687d0%40sessionmgr120&vid=1&hid=108&bdata=JnNpdGU9ZWRzLWxpdm

Umc2NvcGU9c2l0ZQ%3d%3d#AN=14982385&db=bth

Kawasaki, G. (2008). Steve Ballmer. (Cover story). Time, 171(19), 122. Retrieved from

http://eds.a.ebscohost.com.ezproxy.umuc.edu/eds/detail/detail?sid=dab30ba7-6716-40ac-

a9bd-

a4b84f29e8b2%40sessionmgr4007&vid=1&hid=4210&bdata=JnNpdGU9ZWRzLWxpd

mUmc2NvcGU9c2l0ZQ%3d%3d#AN=31895116&db=a9h
MICROSOFT LEADERSHIP 11

Kingsley-Hughes, A. (2014, December 15). Five challenges facing Microsoft in 2015. Retrieved

June 06, 2017, from http://www.zdnet.com/pictures/five-challenges-facing-microsoft-in-

2015/

McCall, M.W., & Hollenbeck, G.P. (2002). Developing global executives. Cambridge, MA:

Harvard Business School Press.

McCall, M.W., Lombardo, M.M., & Morrison, A.M. (1998). Lessons of experience: How

successful executives develop on the job. New York: The Free Press. McNamara, C.M.

(2007). Microsoft learning circles guide. Minneapolis: Authenticity Consulting.

Microsoft Corporation. (2016). Funk & Wagnalls New World Encyclopedia, 1p. 1.

Nasdaq Stock Market | Stock Quotes & Stock Exchange News. Microsoft Corporation Common

Stock (MSFT) Historical Prices & Data - NASDAQ.com. Retrieved November 7, 2017,

from http://www.nasdaq.com/g00/g00/g00/g00/g00/symbol/msft/historical

Seddon, N. (2015, November 15). ITProPortal | News & Guides For Business & Enterprise

IT. Microsoft Office 2016: Why integration is key to enterprise migration success |

ITProPortal.Retrieved June 7, 2017, from

http://www.itproportal.com/2015/11/15/microsoft-office-2016-why-integration-key-

enterprise-migration-success/

Vance, A., Bass, D., Burrows, P., & Ricadela, A. (2012). Microsoft: No Company For Solo

Artists. Bloomberg Businessweek, (4305), 37-38. Retrieved from

http://eds.b.ebscohost.com.ezproxy.umuc.edu/eds/detail/detail?sid=79f0148b-697e-4b88-

bc97-

97e87de190b9%40sessionmgr104&vid=0&hid=108&bdata=JnNpdGU9ZWRzLWxpdm

Umc2NvcGU9c2l0ZQ%3d%3d#AN=83521933&db=heh
MICROSOFT LEADERSHIP 12

Venkatesan Iyengar, R. (2014). Team Building: Corporate Lessons from the Indian Premier

League. IUP Journal Of Soft Skills, 8(1), 7.

WILSON, C., & ELLIOTT, P. H. (2017). Helping Every Team Exceed Expectations. TD: Talent

Development, 71(5), 18-21.