Friday, July 19, 2013

Ballmer's Change Mandate - How Like-minded Are Microsoft Executives?


Steve Ballmer is working to create what he calls “One Microsoft.”  He wants to get rid of the “fiefdoms” that have produced internal friction and mediocre results.  The debates about the reorganization have been, and correctly so, focused on the difficulty of changing Microsoft’s culture.
Culture is about how people operate in the organization. Regardless of how an organization is structured, if people have thrived by being achievement driven ­­– that is, trying to do “more, better, faster” than everyone else – it will take a concerted and coordinated effort to demonstrate that this modus operandi is no longer what’s going to get people ahead, or get Microsoft ahead.
How well aligned are Microsoft executives with Ballmer’s vision for the future?
Coordinated effort is tricky in any organization.  In a culture like Microsoft’s that has encouraged internal competition, you can bet that the leaders were caught up in, if not driving, that behavior.  In the fiefdom landscape, where unit leaders have acted as mini CEOs in charge of an entire business, each of those leaders had their own ideas about what would make them, their group and the company successful.  Are those leaders really going to be collaborative now and “go along with” an idea that is a composite of multiple perspectives?  Or might they, instead, see collaboration as the end of the ability to be a superstar with a career path to the top job?
Each individual on the senior team likely has their own interpretation of what will create Ballmer’s “One Microsoft” and what the new culture should look like. The challenge here is to understand where they are “like-minded” and where they are “divergent” in their thinking.  Changing the culture requires that the senior team send out consistent messages, through their words and actions.  Without an understanding of their degree of like-mindedness, or lack thereof, they don’t have a chance of finding common ground and presenting a unified front that gets everyone rowing in the same direction.
To define and develop a culture that supports the business strategy, they must first agree on what makes the organization effect today, and what will make it effective in the future.  Once the leadership defines key organizational effectiveness factors, they can then, with the right tools, determine the kind of culture that will support that set of factors.
It isn’t simply about “improving” the culture or making the culture more collaborative and communicative.  Ballmer and his team also need to consider how those desired culture characteristics play together.  If a more collaborative culture is desired, how will that work in conjunction with a performance review and reward system for top performers that Ballmer says ensures that “people keep their competitive attitude at work.”  That’s not to say that “collaborative” and “competitive” cannot co-exist as characteristics of Microsoft’s unique culture profile, but it will take deliberate actions to strike the right balance. 

Monday, April 22, 2013

Anatomy of a Culture Clash

Without being on the inside, it's impossible to know for sure what went wrong for Ron Johnson at JC Penney, but let's make a few educated guesses.

First, he must have suffered culture shock.

Johnson apparently found at JCP a complacent corporate organization, with a strong culture of goofing off.  According to one report, "There were 4,800 employees at the Plano, TX headquarters in January 2012, and in one month they had watched five million YouTube videos during work hours."

The Apple corporate culture from which Johnson came was described by Ariel Maislos, former CEO of Israel’s Anobit.  Maislos worked for the company for about a year, after Apple acquired Anobit in December of 2011.  “At Apple,” said Maislos, “you have to run ahead just to stay in place, and there are very high expectations of everyone.”

Complacent vs. driven: Kaboom!

Second, there was a culture clash.

In the retail stores JCP’s Associates, according to company philosophy posted on the internet, were trained and empowered to make customers their #1 priority; “Customer FIRST,” the company called it.  But let’s face it, JCP customers were bargain hunters.  They came in with their newspaper sale ads and coupons and they knew exactly what they were looking for.  I can imagine that the key tasks of the store Associate were to help the customer find the sought-after merchandise and then to ring the cash register.

Ron Johnson seemed to think he could boost JCP sales and profits by recreating the Apple store “ultimate customer experience.”  Apple’s retail job postings describe a job very different from the one JCP’s store Associates are likely to have been performing.  “As Specialist, you’re the essence of a customer’s experience at the Apple Retail Store.  You enrich people’s lives through meaningful dialogue about the coolest products on earth.  You earn trust by recommending solutions that do more than meet people’s need – they inspire their hopes and dreams.”  A bit loftier role than simply making the cash register go cha-ching.

Catering to bargain hunters vs. creating the customer experience: Kaboom!

Finally, there was an operating style clash.

Part of the JCP credo was teamwork: “We win together through leadership, collaboration, open and honest communication, and respect.”  Associates described it as a good place to work with friendly coworkers and management.

Johnson brought with him the secrecy for which Apple’s culture is famous.  At JCP, upper management characterized him as “cagey and secretive.”  Under Johnson it's been reported there were no protocols or processes, no memos or written directives and oral communication without much detail, no insights into store operations and changes, no opportunity for anyone to ask questions.  This operating style is hardly conducive to the friendliness and trust on which the JCP culture seems to have been built.

Open and collaborative vs. secretive and cagey: Kaboom!

Let us hear from you!  What do you think doomed Ron Johnson?