Microsoft is expected to announce its long-awaited internal reorganization as early as tomorrow, shaking up its executive ranks and divisional structure in a bid to make itself more nimble in its new world of “devices and services.”
One of the most interesting tidbits in advance is the word that Microsoft CEO Steve Ballmer has been looking to Ford CEO Alan Mulally for inspiration. Here’s how Mulally explained it in an email to AllThingsD’s Kara Swisher.
While we clearly are not part of any Microsoft reorganization or its business operations, we have shared with Steve — as we have with many others who have asked — the elements of the Ford business transformation, including the importance of having a compelling vision and the relentless implementation of a plan that delivers the vision. A key part of the Ford transformation, as you know, has been everyone working together, with an organizational structure and operations absolutely focused on delivering the plan.
The Ford CEO and former Boeing Commercial Airplanes president has many fans around the Seattle region, and Ballmer is clearly one. The Microsoft CEO grew up in the Detroit area, and his dad worked at Ford, which is now a Microsoft partner.
But what did Ford’s reorg actually do, and what might Ballmer learn from it? A 2010 Forbes piece by three Bain & Co. consultants explains the basics of the automaker’s transformation.
Along the way they decided to reorganize the company, moving from a structure based on regional business units to a global matrix of functions and geographies. This new structure enabled Ford’s leadership team to make some of those critical decisions better and faster–creating global car platforms, for instance, which had been painfully difficult under the old structure.
Replace Ford’s “regional business units” with Microsoft’s corporate divisions, and that’s a pretty good summary of what the Redmond company seems to be attempting.
But Ford actually went further than that, significantly streamlining its business. As the Forbes article explains, “They divested non-core brands such as Aston Martin, Jaguar, Land Rover and Volvo, reduced the number of production platforms, began consolidating both suppliers and dealers and so on.”
Applied to Microsoft, that approach would be music to the ears of some investors and employees who have called for the company to sell off divisions and focus more on its core strengths. In May, longtime analyst Rick Sherlund said Microsoft should consider selling its Xbox and Bing businesses.
However, that still seems unlikely. This is where the parallels between Microsoft and Ford will probably end. But it will be fascinating to see just how far Ballmer goes in his attempt to shake things up. Stay tuned, the next day or so should be worth watching.