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microsoftlogoHow can a company of more than 90,000 employees become more nimble and competitive? Microsoft CEO Steve Ballmer laid out the plan today — blowing up the company’s individual divisions and replacing them with broad-based engineering groups and centralized business functions in a bid to make Microsoft more cohesive.

It’s one of the biggest organizational changes in the history of the company. It took months to come to fruition and it will be even more complicated to actually implement. Its success or failure will go a long way toward determining Ballmer’s ultimate legacy as Microsoft’s chief executive.

One big risk is the potential to instead confuse matters as people adjust to the new structure and try to collaborate in across product groups, teams and former divisions. In one section of his memo to employees, Ballmer explains how Microsoft will try to avoid this fate using “champions” for major cross-company initiatives.

Here’s an excerpt from the memo that outlines the approach.

Process wise, each major initiative of the company (product or high-value scenario) will have a team that spans groups to ensure we succeed against our goals. Our strategy will drive what initiatives we agree and commit to at my staff meetings. Most disciplines and product groups will have a core that delivers key technology or services and then a piece that lines up with the initiatives. Each major initiative will have a champion who will be a direct report to me or one of my direct reports. The champion will organize to drive a cross-company team for success, but my whole staff will have commitment to the initiative’s success. We will also have outgrowths on those major initiatives that may involve only a single product group. Certainly, succeeding with mobile devices, Windows, Office 365 and Azure will be foundational. Xbox and Bing will also be key future contributors to financial success.

Ballmer didn’t publicly identify any of the “champions” or the primary initiatives they will focus on, but the plan reflects the overall attempt to make Microsoft executives and managers, in particular, think and work across the company as a whole.

As of late morning, Microsoft shares are up 2 percent on the news of the reorg plans.

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