Microsoft Executive Death Watch

During the list's compilation process, several influencers were removed because they either left or announced plans to leave Microsoft. Now another one is out: Peter Knook, the senior vice president of Microsoft's Mobile Communications Business group. Timing sucks for Microsoft: It's Mobile World Congress week.

Knook is an executive departing in good standing. He's a loss, but not somebody being forced out. Knook was No. 18 on the top influencer list.

Other top influencers in the outs: Michael Sievert, corporate vice president of Windows Marketing (No. 24), and Steve Berkowitz, senior vice president with the Online Services Group (No. 21).

Berkowitz's departure isn't surprising. The former Ask CEO had foot-in-mouth problems right from the start. His public statements about MSN only increased the branding confusion with Windows Live. He was an outsider that didn't fit—and that's too bad. Berkowitz brought good ideas and executional experience. From the November 2005 Windows Live rebranding announcement, his days were numbered. What he brought wouldn't sync with the Live strategy.

Sievert, who as of this posting was only on the way out, is an unfortunate casualty of the Windows Vista launch. Microsoft hired Sievert in March 2005 from AT&T Wireless. Here's what I wrote about him at the time:

"Michael has some heavy lifting ahead. By promoting Longhorn too soon, instead of Windows XP, and then having to pull back features, Microsoft has made quite the mess ... I see Michael's role as twofold: Helping to reinvigorate enthusiasm for Longhorn and properly promoting the product at launch. The task is daunting in part because Microsoft's consumer usage message is so complex ... I wish Michael good luck in his new role; he'll need it."

Sievert wasn't lucky enough. He also got crushed between the management change that occurred around the time of Vista's launch. New management set different priorities and sought distance from any decisions made about Windows Vista. I disagree with Microsoft insiders that believe Sievert's team botched the Vista launch. Vista marketing was excellent. It's the operating system and not the marketing that failed to meet expectations.

The "Wow" marketing campaign is one of the best Microsoft has ever done. Problem wasn't the campaign, it's that Vista didn't deliver the "Wow" promised by the advertising. Also, the development process, terrible Longhorn messaging and dumped operating system features created huge Vista perception problems, even before Microsoft hired Sievert.

Microsoft is bleeding executives right now. Berkowitz and Sievert are casualties, but not other recent departures. Knook is a blow; he held a key position in one of Microsoft's most important groups. Last month, Charles Fitzgerald, Microsoft's general manager of platform strategies, suddenly left. Days earlier, Jeff Raikes, president of Microsoft's business division, announced his departure for later this year. Both men would have been on the Top 25 list.

I've closely watched Microsoft for more than a decade. I have never seen so many executives on the outs at the same time. Several factors account for all the executive shuffling underway:

• Timing. Chairman Bill Gates is leaving (technically, on June 30) and Microsoft midyear reviews are completed—or nearly so. Gates' departure means the real changing of leadership, which won't sit well with some old-timers; so they go, too. Midyear reviews are a typical time of executive shuffling at Microsoft.
• Accountability. Microsoft's management is now less forgiving of tactical mistakes. Days gone by, someone could screw up and stay employed but in a demoted role. Microsoft's corporate culture isn't as forgiving as it once was.
• Transition. There is a power struggle underway within Microsoft, for many reasons: Gates' departure, the Vista fiasco, Google competition and future direction (software versus services), among others. CEO Steve Ballmer created the power struggle problem, at least in part, by consolidating the organization under three executive presidents. There are too many competing agendas and shifting alliances among executive ranks.

More shuffling is coming, today. After the stock market closes, Microsoft plans to announce executive changes as part of yet another reorganization. Many of the changes have already been made but now are being formally announced.

Some of the changes are in anticipation of a Yahoo acquisition, but others will reflect an organization undergoing the aforementioned major transition and post-midyear evaluations. Microsoft is in the process of reinvention, particularly as advertising and Web services take on more prominent organizational roles. As I've repeatedly said, Microsoft is rapidly coalescing into three distinct, vertical organizational silos:

• Platforms (including Office, Windows and server software)
• Advertising and Search
• Consumer Electronics (including Xbox and Zune)

Two major organizational groups—platform services (including Live) and sales and marketing—cut across the vertical silos.

Today's changes will focus on areas with the weakest operational performance—and that means the Online Services group, even without a possible Yahoo merger. There's a new era of accountability at Microsoft. Working for Microsoft is no longer like working for the federal government. Job security isn't assured.