3 Key Lessons from Microsoft’s Restructuring Plan

Amy Hood, Microsoft’s CFO

Recovering from a weak 4th quarter in 2012 that was a result of a $900 million write-off, Microsoft posted incredible quarter sales for the period ending June 30, 2013. With sales in excess of $19 billion, it appears that Microsoft’s restructuring strategy is paying dividends, as workflow processes among the company’s various teams are finally in sync.

These strategic organizational changes within Microsoft are largely the result of the leadership presented by Amy Hood, the computer giant’s chief financial officer. “We know we have to do better and this is one reason we made the strategic and organizational changes last week,” Hood says. With these new changes taking effect, Microsoft’s management appears to be confident that the company is now headed in the right direction.

Major organizational changes as well as employee shuffling are expected to help Microsoft counter its vulnerabilities, tackling gaps in the PC market. Overall, the company is focused on transitioning the company to the “modern era,” where Apple and Blackberry are dominating the smartphone market. One piece of good news is that Microsoft posted $222 million in deals with Android.

As Microsoft’s CFO and its executive leadership work together to determine a solution that helps put the company back on the right track, the company is also showcasing key lessons about the technological industry. These include:

  1. A bad quarter isn’t necessarily a negative one. Despite dismal numbers from an unexpected 4th quarter, it’s important to remember that Microsoft was still up 10% compared to the year prior. However, because numbers didn’t match expectations, negative news swirled around Microsoft despite the fact that the company remains extremely profitable. One key lesson here is the role that the CFO must play in defining situations before the narrative is painted negatively.
  2. The tech industry has its bumps too. While Microsoft’s quarter was undoubtedly disappointing, it wasn’t the only major tech corporation to struggle in the fast-paced evolution of today’s mobile market. Many organizations from Google to Apple are dealing with an over-saturated market.
  3. The CFO is the catalyst for change. Now that it’s apparent that Windows has never before been this vulnerable in the market, Microsoft is willing to make drastic changes. Amy Hood, the company’s current CFO, played a major role in orchestrating these significant restructuring strategies within the corporation.