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Microsoft COO: Painful transition vital for long-term survival

Jon Tullett
By Jon Tullett, Editor: News analysis
Johannesburg, 17 Nov 2015
Although disruption is a threat, your destiny is not predetermined, says Microsoft COO, Kevin Turner.
Although disruption is a threat, your destiny is not predetermined, says Microsoft COO, Kevin Turner.

In the modern cloud era, businesses must embrace disruption, even though it may be painful, if they are to survive in the long-term. Kevin Turner, COO of Microsoft, sat down with ITWeb during his recent visit to South Africa, and described how he has helped guide Microsoft through one of its most challenging periods.

Turner has run the software giant's operations since 2005, through the transition from Ballmer to Nadella, through the struggles of Windows Mobile and the scramble to catch up with the cloud generation, and through several staff realignments. And while that work is bearing fruit, it's really just the beginning. Microsoft is changing, and recognises that its customer base is experiencing no less painful a transition.

Microsoft has had a tough few years: Vanity Fair described the period as "Microsoft's lost decade", pointing to key strategic missteps.

Facing a world where market dominance was slipping away in key areas - notably cloud, mobile and search - Microsoft's executive needed to find a way to define a new identity for the firm. "At Apple, the product there is the hero. At Google, their search algorithm is the hero. At Microsoft, we want to make the customer the hero. Creating a unique identity around that allows us to be ourselves. Not try to be either one of those others, or one of many others who do a great job with what they have. We had to figure out what our unique cause was, what kind of world there'd be without Microsoft, and that's a humbling thing to ask yourself."

But that was only part of the picture, Turner adds - the company has had some successes too, and those formed support for the company to drive in new directions. "You can look at Windows Mobile and call that one out, and there have been others which haven't been successful. We sometimes get defined by the challenges, but the reality is the company has innovated [through that period]."

Fixating on failures takes your eye off the future, Turner says. "When you look at Microsoft, you have to look at the breadth of our business. Because in some ways the last ten years have been a giant success - look at our server and tools area, and what's happened in the data centre. In ten years, that's really changed the company. Windows has had its strengths and weaknesses, and we're rebounding. Bing's come out of nowhere - we made profit in Bing last quarter but it's taken ten years of super hard work to drive that. Office has been super-resilient and continues to innovate and be creative - that's been a real success."

End of the beginning

"We're not at the end of the journey. We're not at the beginning any more - we're somewhere in the middle. None of us can claim any victory, or that we have this completely figured out. We're having some success, and we have to do more. We've probably got a good three or four years left in this transformation phase before the majority of our business is in the cloud, in this new modern phase."

Part of that transition is learning to let go of the comfortable status quo, Turner says. "We've been in the productivity business a long time, but now we want to reinvent it. We want Windows to be more than just a client operating system. There were deep discussions among the senior leadership team - how do we keep the customer's needs at the centre and then catalyse what we need to be around it?"

As part of that reinvention, Microsoft's business practices have also fundamentally changed, Turner says. From a company which used to compete ferociously on all fronts, the organisation now welcomes "co-opetition", he says, pointing to cloud partnerships with rivals like Oracle and Red Hat. "Today, 25% of the VMs in Azure are Linux or other non-Microsoft operating systems, and that number is growing."

Core product development also had to change, Turner says, pointing to the unique beta cycle of Windows 10. "Four million people used Windows 10 before we released it, and gave us feedback which we used to make the product better in real time. I'm proud of that. It's not an easy thing to orchestrate and manage but that was a great signal not just externally but also internally, that we're serious about this. And when I do that it allows our folks in the field to feel more empowered: they can push back on corporate when they need to."

And those folks in the field have changed too: Turner describes how his sales teams are now measured not only on licences sold, but also on active customer deployment, taking aim at the "shelfware" complaint all too common in enterprise applications.

Master of your fate

"As a senior leadership team, we spent a lot of time asking what kind of Microsoft we envision for the future," Turner says. "We envision a company that empowers every person and every organisation on the planet to achieve more. How do we individually get our personal philosophies to achieve that mission statement? We're 110 000 people across 190 countries."

A company's resilience is defined by its people, Turner stresses. "How do you stay on the front foot? We have to hire, train and develop people who are more ambidextrous. It used to be OK to be really good at one thing. In today's world you have to be good at multiple things, and that also requires a different mindset. We have something we call the growth mindset - it's something we espouse, teach, train and develop people around. It's the idea that your destiny is not predetermined. You as an individual, you as a team, you as a company: it's not a predetermined destiny, it's a product of how well you listen, grow, learn, and experiment. We try to teach people to look around corners, to anticipate - that's a key part of the growth mindset. We've done some very deliberate things to help people adopt that growth mindset in ways they hadn't thought of before. If you don't have people able to do that, you're going to get lapped."

At an organisational level, that means protecting the core business while seeking innovation and opportunity - the concept Gartner dubbed "bimodal IT". Turner agrees, with a word of warning: "I call it 'performing while transforming'. You need austerity measures, and the ability to innovate. But very few companies in the history of the world can say they were able to simultaneously do both. We happen to be one of them, and it starts with acknowledging just how hard it is. When I talk to my team, I start with 'look, I know it's tough, but let's focus.' There are disruptions happening everywhere - that's helping us have these dialogs. You need to accelerate. The disruptors are real, but they're also helping us have these conversations."

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