The CEO is making fundamental changes in the way Microsoft is managed. Here are some of his key goals:
CREATE NEW BUSINESS PROCESSES
"If we're successful, business isn't going to be any simpler to run five years from now than it is today. We better be thinking about the tools we need to run that business now"
THE PLAN: With 50,000 employees, Microsoft (MSFT ) needs more management processes, from coordinating product strategies to including customer feedback.
RISKS: Innovation might suffer. Microsoft has thrived, in part, because it was light on structure and often felt like a startup.
PUSH AUTHORITY DOWN
"At the end of the day, they have to think it through as opposed to my saying, `I'll think it through for them"'
THE PLAN: Ballmer and Gates made key decisions. Now, senior managers will be expected to do tasks such as allocating resources between product development and sales.
RISKS: Ballmer has been the prototypical hands-on manager. He needs to suppress that impulse and let execs run their businesses--or risk being overwhelmed.
ESTABLISH CROSS-COMPANY COLLABORATION
"The business strategy had become somewhat splintered from the technology
development in some ways that were very dangerous"
THE PLAN: Eight committees of top execs will regularly discuss strategy and leverage each other's businesses rather than counting on Gates and Ballmer to spot synergies.
RISKS: A Ballmer or Gates decision headed off turf wars. Now, it may be harder for execs with products to protect to see the big picture--and make compromises.
BUILD CUSTOMER LOYALTY
"If you want people to really depend on these systems, they have to be able to trust the company that makes them"
THE PLAN: Always customer-focused, Ballmer is on a campaign to make that central for every employee.
RISKS: Virus attacks on Microsoft's products--and corporate buyers irked by a shift in licensing fees--suggest that Microsoft has much progress to make.
BUILD INDUSTRY TRUST
"You really have to learn how to be respectful and open and honest"
THE PLAN: The lack of industry support during the antitrust trial led Ballmer to start communicating with critics and rivals--even meeting with Oracle boss Larry Ellison.
RISKS: As long as Microsoft is seen as a heavy-handed monopolist and a threat to startups, distrust will run deep.