Would Microsoft be better off with the new CEO?

Nadella is the now the new CEO of Microsoft. He replaces Ballmer who would be on the board of Microsoft with around 4% of its shares. Gates would now play a more active role in Microsoft by giving one third of his time. From 2008 Gates wasn’t involved in the day to day operation of the company. But now he would be involved. So Microsoft has one new CEO and two former CEOs on the board. This effectively means that the new CEO Nadella, would not only manage the company but also manage two of his former bosses.

The question is whether Microsoft would be better off with this structure?

What might be the Nemetic point of view?

To understand this let us assume for the moment that five top executives would now report to Nadella. Few weeks back the same executives were reporting to Ballmer.

Let us assume Ballmer and his subordinates were connected by strings/springs having equal stiffness of say, k (spring constant).

Now with the new CEO coming in, the same executives would be connected to both the new CEO and the previous CEO.

Let us further assume that the loyalty of the executives to both Nadella and Ballmer would be divided equally.

This means that the springs that connected Ballmer to the executives would have to be cut into two halves to form two springs. One half would be connected to Ballmer while the other half would be connected to Nadella.

So, the new spring constant for each half would now be equal to 2K.

This means the stiffness of the organization would quadruple .

This also means that the resonant frequency of the organization would increase by a factor of 2 times. So it would be now be more difficult for the organization to come into resonance or vibrate with the least effort.

With the new structural arrangements it also means that the force required to move the organization to resonance would simply increase by two times. It simply means that more effort would be needed to move things around the organization. Seen another way it informs us that the organization would lose its agility to stay relevant in a fast changing market place.

On the whole, Microsoft would tend to become more rigid. It would take more effort to make things happen within the organization. Effectively the organization would compromise on agility and resilience.

Therefore, from the Nemetic analysis, the new management structural design is not a good one and might not help Microsoft to be better off, both in the short and long term.

However, only time would tell whether the analysis is correct or not. Possibly in the next six months trends would be clear.

Advertisements