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Microsoft Overhauls, the Apple Way

July 11, 2013 by Leave a Comment

Its divisions will war no more, Microsoft said on Thursday.

The company said it would dissolve its eight product divisions in favor of four new ones arranged around broader functional themes, a change meant to encourage a tighter marriage among technologies as competitors like Apple and Google outflank it in the mobile and Internet markets.

“To execute, we’ve got to move from multiple Microsofts to one Microsoft,” Steven A. Ballmer, the longtime chief executive, said in an interview.

The notion of organizing the company around the trinity of modern technology products — software, hardware and services — is most famously used by Apple. It is yet another sign of how deeply Apple’s way of doing things has seeped into every pore of the technology industry.

And in the process, some of the biggest technology companies are starting to look much more alike organizationally. The goal is to get thousands of employees to collaborate more closely, to avoid some duplication and, as a result, to build their products to work more harmoniously together.

“The current model is obviously Apple, given how phenomenally successful they have been,” said Kevin Werbach, an associate professor of business at the Wharton School at the University of Pennsylvania. “What Apple has been great at is creating these experiences.”

The changes at Microsoft, a giant in the tech industry for decades that has stalled in the last few years, echo similar moves at its biggest rivals, including some tweaking at Apple. Craig Federighi, who led the development of Apple’s operating system for computers, was also given oversight of much of the operating system for iPhones and iPads. Jonathan Ive, the industrial designer behind the slick look of Apple hardware, took charge of the interface of Apple software. At Google, the development of operating systems for mobile devices and computers was put into the hands of a single executive, Sundar Pichai, rather than two.

Microsoft said on Thursday that it, too, would consolidate its major operating systems, including Windows, Windows Phone and the software that powers the Xbox, under Terry Myerson, who handled engineering only for Windows Phone before. The underlying goal is to create software with tighter linkages to power an array of devices, making it easier for people to use their smartphones, tablets and game consoles as adjuncts to one another.

But Microsoft’s charges are far more sweeping and involve many more people. “This is, in my mind, the biggest thing we’ve ever done,” said Lisa Brummel, a 24-year Microsoft veteran who leads its human resources department, noting that the company has nearly 100,000 employees.

It remains to be seen whether more cohesive teamwork, if that is what results from all the movement, will offer the spark that has been missing recently from so many of Microsoft’s products. The company remains one of the most lucrative enterprises on the planet, with nearly $17 billion in profit during its last fiscal year on $73.7 billion in revenue. But it has been widely faulted for being late with compelling products in two lucrative categories, smartphones and tablets. Its Bing search engine is a distant second to Google and loses billions of dollars a year for Microsoft.

Rivalries among the Microsoft divisions have built up over time, sometimes resulting in needless duplication of efforts. Microsoft managers often grumble privately that one of the most dreaded circumstances at the company is having to “take a dependency” on another group for a piece of software, placing them at the mercy of someone else’s development schedule.

Product development groups will sometimes go to great lengths to avoid this, creating software like e-mail programs that duplicate the functions of other products at Microsoft. While its old divisions all had their own finance and marketing organizations, Microsoft is now centralizing those functions.

Claire Cain Miller contributed reporting from San Francisco.

Article source: http://www.nytimes.com/2013/07/12/technology/microsoft-revamps-structure-and-management.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Building the Team: Introducing Building the Team: Flower Power

January 16, 2013 by Leave a Comment

H.Bloom's New York team, including co-founders Sonu Panda and Bryan Burkhart (back row, second and third from the left).Courtesy of H.Bloom. H.Bloom’s New York team, including co-founders Sonu Panda and Bryan Burkhart (back row, second and third from the left).

Three years ago, I knew nothing about flowers.

Today, I am chief executive of what I believe is the world’s fastest growing flower delivery service, operating in five cities, with $18 million in venture capital and more than 80 employees.

My background is in business, entrepreneurship and technology. I studied entrepreneurial management at the University of Pennsylvania’s Wharton School for my undergraduate degree. After college, I moved to San Francisco and joined a software start-up, Callidus Software, as one of its first business hires. Our task was to figure out whether we could sell the software to anyone. Thankfully, we did. We grew the business to more than $100 million in revenue, taking the company public in 2003. I was 28 at the time. I ultimately became senior vice president of global sales, responsible for 76 employees in offices around the world.

It was an amazing first ride, but I was feeling dissatisfied for two reasons. First, as the 800-pound gorilla in a very small market, we were as big as we were ever going to be. Plus, the product was boring. If I described it here, you would fall asleep.

I wanted more. I wanted the chance to build something great, something with a product that people loved and that had a chance to be a really big business. However, I’m not Mark Zuckerberg. I don’t know how to code, and I have no idea how to create a market that doesn’t already exist. But I am willing to work really hard. So, I took a year off to come up with the next great idea.

I left the software company in 2009. My thesis was simple: try to apply technology to a really big, existing market that was bereft of technology, preferably a market with a product people love. I considered all sorts of industries before stumbling upon flowers.

It turns out that the flower industry is a $35 billion dollar market in the United States alone. That’s right, $35 billion. That was certainly enough to pique my interest. But I didn’t know anything about flowers, so I did the only thing I could think of to learn more. I put an ad on Craigslist, saying that I wanted to buy a flower shop. I got dozens of responses, and spent the next two weeks at Chelsea Market in Manhattan, sitting in front of one of the city’s best espresso stands, meeting with flower shop owners (and drinking inordinate amounts of coffee).

From these meetings, I learned that flower shop owners (there are approximately 22,000 of them in the United States) are extraordinary artists. They create living art every day that customers love. But they don’t have a background in technology, and they don’t necessarily enjoy the business side of things. Moreover, they deal with a huge economic challenge: spoilage. The average rate in the industry is anywhere from 30 to 50 percent. It’s a tough way to run a business. The only way that the shop owners can make money, as a result, is to mark up the price of flowers to five times what they pay for them. This was my moment of epiphany.

I knew that there was a type of customer – hotels, restaurants, retailers, offices, buildings, spas, and affluent households – that viewed flowers as living art, something to be enjoyed continuously. But their flowers died every week. These customers were perfect candidates for a subscription model: sign up once and receive this luxurious product, hand-delivered to your door every week. For H.Bloom, my new company, the subscription model was the silver bullet. It would allow us to buy only what someone had already subscribed for, thus reducing spoilage almost completely.

I emerged from my year off ready to start what I thought would become the Tiffany of flowers – a game-changing business that would eventually be a world-recognized brand. But I’m sure a lot of people thought I was crazy. I was leaving a successful career in enterprise software to start a flower company? Thankfully, a good friend told me to keep my own counsel. I had come up with the idea; the logic was sound; just make it happen.

And the idea worked. We launched H.Bloom in April of 2010 in New York City. We signed corporate customers, impressed them with our designs, provided them with 20- to 30-percent savings off the vendors they had used previously, and most importantly, we offered world-class service thanks to the software we built to make operations run efficiently. Soon after, we opened H.Bloom in other cities – Washington, then Chicago, San Francisco and most recently, Dallas – and they have done well.

As we thought about our growth plans, we realized that to grow quickly, we would have to expand to new cities fast. While we  believed that our software would enable these markets to deliver our luxury flowers in a sophisticated way, we knew that it would take great people to make everything work. If we hired the wrong people, or didn’t provide them with the right training, the operation would simply not function. So, we decided to build our own farm team – a formal talent-development program – to groom future leaders and team members to run new H.Bloom markets. We call the program H.Bloom University.

Today, many of our employees – managers, future managers, sales people, operations folks and floral designers — are participating in the program. Five people have graduated successfully from the future-leaders program (called SEED) and are now leading H.Bloom markets. We have focused on all aspects of building the team – from defining needed positions, to recruiting the right candidates, hiring them, training them, providing them with a road map for career growth and constantly communicating the strategy, successes and failures of our business. We’ve also had to let people go. We view all of this as integral to building the team. We’re not good at it yet, but we aspire to be great.

And that brings me to why I’m writing for this blog. I love business and want to build an extraordinary one. I believe that building a team and developing talent is the foundation of any business, no matter how big or small, but it is often overlooked amid all of the other things that happen day to day. I hope to use this blog as a way to share our experiences and to get your feedback on what you’ve seen work and fail in your businesses. In the coming weeks, I’ll be writing about the five main areas that we focus on as we try to build a team: recruiting, training, communications, career development, and leadership. I will also talk about team builders that I’ve met and that we try to emulate and some of the new technologies that we use to manage the process.

During new-hire training at H.Bloom, I always tell new employees that together, we have the opportunity to build a great company. With Building the Team, I am hopeful that together, we can discover how to build a great team.

Article source: http://boss.blogs.nytimes.com/2013/01/16/introducing-building-the-team-flower-power/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Common Sense: Salvation at Chrysler, in the Form of Fiat

July 30, 2011 by Leave a Comment

A little more than two years ago, the White House’s auto industry task force concluded flatly that Chrysler was “not viable as a stand-alone company.”

That may have been an understatement. America’s third-largest automaker was too dependent on gas-guzzling trucks and S.U.V.’s, too concentrated in recession-wracked North America, too small to compete globally and too cash-starved to invest in new technologies. Quality was abysmal. Every model in the company’s Chrysler, Dodge and Jeep brands ranked in the bottom 25 percent in the J. D. Power Associates survey of customer satisfaction. From 2006-8, Chrysler lost $30 billion.

David Kelleher, 44, president of David Dodge Chrysler Jeep in Glen Mills, Pa., thought Chrysler — and his dealership — were “close to death.” After graduating from the University of Pennsylvania and forgoing law school to sell cars, Mr. Kelleher had worked his way through the ranks at a Chrysler Plymouth dealership in the Philadelphia area before buying his own franchise and opening David’s in 2005. Chrysler was already in steep decline under its German owner, Daimler-Benz, which in turn sold the company to the private equity concern Cerberus Capital Management in 2007.

“We were lucky to survive those barracudas,” Mr. Kelleher recalled. “They were systematically devaluing the company. They just wanted to squeeze money out of it.”

As for quality, he mentioned the midsize Sebring. “That was a flagship piece of junk. I buried it on the back lot. I sold maybe one a month, if that.” When Chrysler’s owners on Wall Street demanded higher sales numbers, Mr. Kelleher and his fellow dealers responded with steep discounts and lower credit standards. “We were just trying to get the numbers up and we built a bubble,” he said. When gas prices soared above $4 a gallon in 2008, he pleaded with Cerberus officials for models with better gas mileage, long a sore spot for Chrysler. “They looked at me like I was speaking French.”

After President Bush bailed out General Motors and Chrysler in his administration’s waning days, there was sentiment inside the Obama White House and among some in Congress to sell off Jeep and a few other valuable Chrysler assets, possibly to G.M., and cut the government’s losses by liquidating the rest. Dealers like Mr. Kelleher would be reduced to selling used cars and surviving on repairs to defunct models.

He recalled meeting at the Capitol with Arlen Specter, then the Republican senator from Pennsylvania. “David, why would I save this company?” he recalled Senator Specter asking. “It makes bad cars. It’s destined to fail.” Mr. Kelleher said he replied: “I’m going to be bankrupt in a matter of weeks. I can’t support my debt service selling used cars. Millions of jobs are going to be lost.” By the end of the meeting, Mr. Specter seemed to be reconsidering. “If I vote for this, my party is going to turn against me,” he said to Mr. Kelleher. “I hope you remember this.” (Mr. Specter said he didn’t remember the conversation, but “it sounds like one of many that I had with constituents where I voted on what was good public policy even though it was politically risky because the Republican Party didn’t like it.”) Mr. Specter was one of only two Republican senators to support the auto bailout. He subsequently switched parties and was defeated in the Democratic primary.

Not even Mr. Kelleher could be sure the proposed rescue plan — a government-backed partnership with Fiat of Italy in which Fiat would pay no money for a controlling stake and an option to buy more — would work. If a vaunted carmaker like Mercedes-Benz couldn’t save Chrysler, who could?

In what surely ranks as one of the most remarkable turnarounds in the annals of American business history, this week Chrysler reported adjusted net income of $181 million and a 30 percent rise in revenue, to $13.7 billion, even in a still-soft global car market. Its June sales jumped 30 percent from the previous year, its 15th consecutive month of increases. Its market share has grown to 10.6 percent, from under 6 percent. Chrysler repaid its outstanding government loans in May, six years ahead of schedule, and last week Fiat paid $500 million for the Treasury’s remaining 6 percent stake in the company. The American government has recouped $11.2 billion of its $12.5 billion investment in Chrysler, and would probably have made a profit had it held the debt to maturity. Meanwhile, Chrysler employs 56,000 people and has added 9,000 jobs since the bailout.

“This is an amazing success story,” the assistant secretary of the Treasury, Timothy Massad, told me this week. “We’ve fully exited Chrysler at a very small loss. When you look at the options we had, they were very stark: provide assistance or face the immediate liquidation of the company. That would have been disastrous in the context of the worst financial crisis since the Great Depression.”

How did Fiat do it after so many had failed? Mr. Kelleher said the first months were frightening. Fiat and Chrysler’s chief executive, Sergio Marchionne, “stopped the rebates, stopped the bad loans. We felt the change immediately.” Chrysler’s market share plunged. But Mr. Kelleher said he felt better after he met the new chief executive at Mr. Marchionne’s first dealer meeting in Orlando, Fla., in early 2010. A native of Abruzzo, Italy, whose family moved to Canada when he was 14, Mr. Marchionne speaks fluent English and Italian. “He has a presence. He looks like a kindly grandfather, but he has a grip that will take your hand off,” Mr. Kelleher said.

Article source: http://feeds.nytimes.com/click.phdo?i=4443407736f1973b55c313bc328b3330

Filed Under: Business News Tagged With: , ,

The Psychology of Cheating

April 17, 2011 by Leave a Comment

But for those who feel most strongly about cheating, the verdict was more like a kick in the stomach. Flouting the rules is, for them, not only morally wrong but a lasting offense to good citizens everywhere: If guilty, offenders should pay, whether they’re rich or poor, malingerers or masters of the universe — like the financial figures central to the economic collapse of 2008.

The sentiment runs particularly high now at tax time, when almost everyone thinks that he’s paying too much while others cheat.

Yet paradoxically, it’s often an obsession with fairness that leads people to begin cutting corners in the first place.

“Cheating is especially easy to justify when you frame situations to cast yourself as a victim of some kind of unfairness,” said Dr. Anjan Chatterjee, a neurologist at the University of Pennsylvania who has studied the use of prescription drugs to improve intellectual performance. “Then it becomes a matter of evening the score; you’re not cheating, you’re restoring fairness.”

The boilerplate tale of a good soul gone wrong is well known. It begins with small infractions — illegally downloading a few songs, skimming small amounts from the register, lies of omission on taxes — and grows by increments. The experiment becomes a hobby that becomes a way of life. In a recent interview with New York magazine, Bernard Madoff said his Ponzi scheme grew slowly from an investment advisory business that he began as a sideline for certain clients.

This slippery-slope story obscures the process of moving to the dark side; namely, that people subconsciously seek shortcuts more than they realize — and make a deliberate decision when they begin to cheat in earnest.

In a series of recent studies, Dan Ariely of Duke University and his colleagues gave college students opportunities to cheat on a general knowledge test. In one, students were instructed to transfer their answers onto a form with color-in bubbles, to register their official score. Some received bubble sheets with the correct answers seemingly inadvertently shaded in gray, and changed about 20 percent of their answers. A follow-up study demonstrated that they were unaware of the magnitude of their dishonesty. They were cheating without being fully aware of it.

Yet the behavior changes once a clear rule is in place. “If you specifically tell people in these studies not to use the answer key and just sign their name,” said Zoe Chance, a doctoral student at Harvard who worked on some of the experiments, “they won’t look at it.”

David DeSteno, a psychologist at Northeastern University in Boston and co-author of the coming book “Out of Character,” about deception and other misbehavior, said: “With all of these kinds of decisions there’s a battle between short- and long-term gains, a tension between the more virtuous choice and the less virtuous one. And of course there are outside factors that can sway that arrow to one side or another.”

That is, low-level cheating may be natural and even productive in some situations; the brain naturally seeks useful shortcuts. But most people tend to follow rules they accept as fair, even when they have the opportunity and a strong incentive to break them.

In short, the move from small infractions to a deliberate pattern of deception or fraud is less an incremental slide than a deliberate strategy. And in most people it takes shape for personal, and often very emotional, reasons, psychologists say.

One of the most obvious of these is resentment of an authority or a specific rule. The evidence of this is easy enough to see in everyday life, with people flouting laws about cellphone use, smoking, the wearing of helmets. In studies of workplace behavior, psychologists have found that in situations where bosses are abusive, many employees withhold the unpaid extras that help an organization, like being courteous to customers or helping co-workers with problems.

Yet perhaps the most powerful urge to cheat stems from a deep sense of unfairness, psychologists say. As people first begin to compete and compare themselves with others, as early as middle school, they also begin to learn of others’ hidden advantages. Private tutors. Family money. Alumni connections. A regular golf game with the boss. Against a competitor with such advantages, taking credit for other people’s work at the office is not only easier, it can seem only fair.

Once the cheating starts, it’s natural to impute it to others. “When it comes to negative characteristics, we tend to overestimate how much others have in common with us,” said David Dunning, a psychologist at Cornell University.

That is to say: A corner cutter often begins to think everyone else is cheating after he has started cheating, not before.

“And if they are subsequently rewarded for the extra productivity, they tend to internalize the feeling of pride and view their success as due to inherent ability and not something else they were using,” said Dr. DeSteno.

Finally, in the winner-take-all environment that characterizes many competitive fields, cheating feels like a hedge against that most degrading sensation: being a chump. The fear of finishing out of the money and hearing someone say, “Wait, you mean to tell me you could have and you didn’t?” Psychologists argue that the sensation of being duped — anger, self-blame, bitterness — is such a singular cocktail that it forces an uncomfortable kind of self-awareness.

How much of a fool am I? How did I not see this?

It happens every day to people who resist cheating. Nothing fair about it.

Article source: http://feeds.nytimes.com/click.phdo?i=cfd84c2ec259ef23749a5bab4dd512a8

Filed Under: Business News Tagged With: , ,