New CEO Nadella Reshuffles Microsoft’s Exec Deck
Microsoft's new chief Satya Nadella finished up his first month as the head of the software giant with some internal restructuring.
Two of the company's top executives, Tony Bates and Tami Reller, will be leaving the company while former political operative Mark Penn and longtime marketing executive Chris Capossela will be stepping into new roles. The move is a sign of changing priorities as Microsoft shifts its focus from packaged software to services and devices.
In a letter to employees, which was also posted on the company's website, Nadella acknowledged the departures and associated restructuring, confirming the rumors that had been circulating online.
That the new Microsoft CEO would chose to shape his own team is not that surprising. One of Nadella's first acts of business since becoming the company's third CEO on February 4 was to appoint Microsoft corporate vice president Scott Guthrie to be interim head of the company's cloud and enterprise group, the unit that Nadella had previously led. Guthrie had managed engineering teams for many important projects, including Windows Azure, the company's cloud-computing platform that competes with Amazon Web Services, Google Compute Platform, and Rackspace Cloud.
In their current positions, Tony Bates is the executive vice president in charge of business development and evangelism, and Tami Reller leads all of Microsoft marketing and until last July co-led the Windows division as chief marketing officer and chief financial officer. Bates, who was the CEO of Skype when Microsoft bought the company in 2011 and was also being considered as a potential replacement for former Microsoft CEO Steve Ballmer, will reportedly step down immediately, while Reller will stay on to help during the transitional phase.
Eric Rudder will take over Bates' role on a temporary basis, while continuing on in his current capacity as leader of the Advanced Strategy group. Reller will be replaced by Chris Capossela, a 22-year Microsoft veteran, who oversees the consumer channels group. Capossela's official title going forward is EVP and chief marketing officer; he will remain the acting lead for the consumer channels group until his replacement is named.
The most interesting part of the shakeup may be Nadella's decision to put former political wonk Mark Penn in the newly minted position of chief strategy officer, where he will be "responsible for working on core strategic issues across Microsoft's products, value propositions, and investments and leading the company's competitive research and analysis."
Penn, a former political advisor to both Bill and Hillary Clinton, is famous for his work on the latter Clinton's 2008 presidential campaign and the 3 a.m. television commercial that questioned Barack Obama's experience. Since joining Microsoft in mid-2012, Penn is best known for the controversial "Scroogled" ad campaign, which attacked Google's privacy practices.
"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," Nadella explains in the memo. "His focus on using data to quickly evaluate and evolve our campaigns has driven new insights and understanding.... 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 [Senior Leadership Team] and will continue to report to me."
Approbation notwithstanding, it's unclear whether Penn's move should be considered a promotion or demotion or a lateral transition. With Penn now EVP of strategy, and Capossela becoming EVP of marketing, control over Microsoft's advertising budget shifts to Capossela.
Yet in terms of importance, it is not a reach to say that Microsoft's most pressing need is a winning strategy as it navigates further into the mobile and cloud waters. While Penn does not have the traditional skill set for a tech strategist, perhaps he brings a unique perspective that Nadella values as being complementary to his own.
Nadella closes his letter with a reference to a book a book about the University of Washington rowing team that won the Olympics in 1936 that was written by Microsoft veteran Daniel James Brown. When a team of rowers are working together at the highest level, Brown calls it "the swing of the boat."
"As a company, as a leadership team, as individuals, that is our goal," writes Nadella, "to find our swing."
