Memo: Microsoft CEO Satya Nadella looks to find perfect ‘swing’ with leadership changes

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Tami Reller and Tony Bates.

Microsoft today confirmed earlier reports of leadership changes at the company.

Marketing chief Tami Reller and business development boss Tony Bates are indeed leaving the company. Longtime Microsoft executive Chris Caposella will replace Reller. Eric Rudder, executive vice president of advanced strategy, will be a temporary replacement for Bates’ position.

In addition, Mark Penn, the former aide to President Bill Clinton and previously an executive vice president overseeing advertising and strategy, will be named chief strategy officer.

Satya Nadella

Satya Nadella

The changes come less than a month after Microsoft named Satya Nadella as its new CEO. In a company-wide email sent Monday and posted to Microsoft’s website, Nadella explained the rationale behind the moves while alluding multiple times to the importance of working together.

“I have discussed this point in various forms with the Senior Leadership Team and have asked for their ‘all in’ commitment as we embark on the next chapter for the company,” Nadella wrote. “We need to drive clarity, alignment and intensity across all our work.”

Bates, the former Skype CEO, had been considered a candidate to succeed Steve Ballmer, so his decision not to stick around under Nadella isn’t a big surprise. Reller, meanwhile, had previously led marketing and finance in the Windows division before heading up Microsoft’s Marketing Group eight months ago.

“I have had the good fortune of working with Tami ever since she joined Microsoft and have valued her contributions and look forward to seeing what she does next,” Nadella wrote.

Today’s changes follow last week’s news that Julie Larson-Green, the former Windows executive who most recently led Microsoft hardware development as the top executive in the company’s Devices and Studios Group, is moving to a new role in the company’s Applications and Services Group. She will be replaced by Stephen Elop, the Nokia executive who is rejoining Microsoft as part of the Redmond company’s $7.2 billion acquisition of Nokia’s devices and services business.

Here’s the entire email from Nadella:

From: Satya Nadella
To: Microsoft – All Employees
Subject: Leadership Update

In the past month, I’ve had the opportunity to talk with many of you – in person, on Yammer, and in groups in Redmond as well as in our Boston and Northern California offices. (Thank you for all the questions and please keep the input coming!) I’ve also been able to get on the road meeting with customers and investors, which has been really helpful as well.

One of my consistent themes has been a point I made in my original mail – we all need to do our best work, have broad impact and find real meaning in the work we do. Coming together as teams fuels this on a day-to-day basis. And having the Senior Leadership Team (SLT) set both pace and example means a lot to me.

I have discussed this point in various forms with the SLT and have asked for their “all in” commitment as we embark on the next chapter for the company. We need to drive clarity, alignment and intensity across all our work. With that as a backdrop, I want to share a set of changes to the leadership team:

Tony Bates has decided this is the right time for him to look for his next opportunity. Tony came to the company via the Skype acquisition, where he was CEO of Skype, and did a great job of successfully landing that team and continuing to build the service in a high impact way. He also stepped up to the new opportunity of leading the Business Development and Evangelism team over the past eight months. I’ve appreciated Tony’s insights and perspective, and wish him well in his journey. I know he is just a Skype call or message away. Eric Rudder will serve as interim leader responsible for Business Development and Evangelism, while continuing in his current role.

I have decided we need a single leader running marketing for the company, and have asked Chris Capossela to take on this role as EVP and Chief Marketing Officer, reporting to me. I have talked about the premium we need to place on getting very, very focused on things that we can uniquely do. How we articulate our value, how we market our message, how we deliver that value to customers through our advertising and other channels, all have to tie into an overarching strategy. Chris brings a wealth of experience to this need, serving in senior leadership roles across the marketing function for many years. He is a strong organizational leader, and the work he has done with retailers, operators and OEMs on a global basis gives him real visibility and insight into how consumers are buying and using our products. He has been at the center of our devices and services transformation in SMSG as the worldwide leader of the Consumer Channels Group (CCG), starting with the formation and building of CCG, to overseeing the launch of numerous consumer products from Windows 8/8.1, Surface and Xbox One. Chris will be promoted to EVP and join the SLT as a part of his new role and will remain as acting lead for CCG until his replacement is named.

This change in marketing structure provides an opportunity for Mark Penn to play a new leadership role at the company as EVP, Chief Strategy Officer. Mark brings a blend of data analysis and creativity that has led to new ways of working and strong market outcomes such as the “Honestly” campaign and the Super Bowl ad, both of which were widely cited as examples of high impact advertising across the industry. His focus on using data to quickly evaluate and evolve our campaigns has driven new insights and understanding. Mark and his team also will continue to provide input in the area of competitive research and analysis. I am looking forward to applying Mark’s unique skill set across a broader set of challenges facing the company, from new product ideas to helping shape the overall areas of strategic investment. He will be a member of and an advisor to the SLT and will continue to report to me.

Tami Reller agrees with the go-forward approach of a single marketing leader and will support Chris through his transition into his new role. She will then take time off and pursue other interests outside the company. Tami’s contributions to Microsoft are significant; she’s held multiple CFO jobs across the company, for Microsoft Dynamics, the Product and Services Division and Windows. She led marketing, finance and business strategy for Windows including Surface and partner devices. Over the past eight months, she’s led the Marketing Group, bringing many distinct teams together to form a cohesive organization. I have had the good fortune of working with Tami ever since she joined Microsoft and have valued her contributions and look forward to seeing what she does next.

Lastly, I wanted to share a final thought from a book I recently finished about the University of Washington rowing team that won the Olympics in 1936 that was written by Daniel James Brown, who worked at Microsoft for over a decade. It’s a great story of how commitment, determination, and optimism among groups can create history. There is a very evocative description in the book about a team of rowers working together at the highest level – he calls it “the swing of the boat”:

“There is a thing that sometimes happens in rowing that is hard to achieve and hard to define. Many crews, even winning crews, never really find it. Others find it but can’t sustain it. It’s called ‘swing.’ It only happens when all eight oarsmen are rowing in such perfect unison that no single action by any one is out of synch with those of all the others….Poetry, that’s what a good swing looks like.”

As a company, as a leadership team, as individuals, that is our goal – to find our swing. As an SLT and across the company we are on our way.

Satya

  • anon

    Disappointed to see Penn out of the ad and marketing role. I thought that he was doing a good job changing it up vs. Microsoft’s checkered past in marketing. Capossela represents the checkered past.