Ryan Storgaard, Kirsten Castillo, Cesar Del Castillo, Suresh Lakhanpal, Aaron Poynton, Jeff Wawrzyniak
Transformation at Microsoft: The Quest to Become Innovative Again
On February 4, 2014 Microsoft publicly announced that Satya Nadella would succeed Steve Ballmer as the CEO of the company. Nadella would be only the company's third CEO since its founding in 1975. A well publicized article by Kurt Eichenwald in Vanity Fair Magazine entitled "Microsoft's Lost Decade" documents the company's slip as a leader in the tech industry that may have precipitated the change. Under Nadella's leadership, the company is attempting to transform itself into the industry innovation leader it once was, however, there …show more content…
Changing employee motivation and overhauling the performance management system. In his interview of Microsoft employees, Vanity Fair's Kurt Eichenwald remarked: "Every current and former Microsoft employee I interviewed –every one– cited stack ranking as the most destructive process inside Microsoft, something that drove out untold numbers of employees." Thus, one of the most significant changes at Microsoft is the move to a performance management system that rewards employees one-third for meeting their own/team goals, one-third for leveraging innovation/technology from another division and one-third for sharing technology/innovations with another division. This evaluation/reward system sends a clear message that the majority of any employee's efforts should be spent collaborating with his/her co-workers rather than competing against them. It also reinforces the new CEO's message that the company is "One Microsoft" and is an identifiable extrinsic motivation to increase employee engagement and …show more content…
After a little more than a year, the changes to the organizational structure fostered a more collaborative and innovative company that has been able to quickly respond to the market. With new teams and no one having to pay homage to the company’s flagship products, employees work more on peer basis. A good explanation of this concept can be found in Ed Catmull’s Harvard Business Review analysis of Pixar’s methods to foster creativity. (CITE) Examples at Microsoft include: a move toward cloud computing on all platforms versus being Windows centric which shows up as Office 365; Office is now available for all devices now including iOS and Android; Microsoft has entered into partnerships with Oracle, Salesforce and Cryogen (Android); and by unifying engineering teams the development of Windows 10 on all devices was also recently brought to market. Wall Street has reacted positively to the changes at Microsoft as well. In what has been termed the “Nadella Effect”, shares of MSFT rose by 25% in about six