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How Microsoft Vanquished Bureaucracy With Agile by Steve Denning

Microsoft has rapidly rising revenues and today is the most valuable firm on the planet—worth more than a trillion dollars.
In 2004, I would never have predicted this. At the time, I was visiting Microsoft for a short consultancy. I was shocked to find how bureaucratic it was. After working for several decades in another notorious bureaucracy, I knew the problems bureaucracy caused. But Microsoft was worse: it was impossible to get decisions from within a labyrinth of silos and layers that called to mind Kafka’s The Castle.
What can other big old firms learn from Microsoft’s escape from bureaucratic strangulation?
According to The Economist, the reason for Microsoft’s turnaround is that Satya Nadella, the CEO since 2014, took the bold decisions of a heroic leader. He opted not to rely on the existing business (Windows) and chose not to be “rapacious.”
The more important lesson for most big old corporations, though, is not so much the individual decisions of a heroic leader, but rather how Microsoft as an organization overcame the disease of bureaucracy. By the time Nadella became CEO, Microsoft had already embraced Agile and was ready to implement his bold decisions.
Microsoft Agile Journey

The Decisions Of The Heroic Leader
According to The Economist, Microsoft’s triumph lies in decisions taken by Satya Nadella:
Microsoft missed social networks and smartphones because of its obsession with Windows, the operating system that was its main money-spinner. One of Mr Nadella’s most important acts after taking the helm was to de-prioritize Windows. More important, he also bet big on the “cloud”—just as firms started getting comfortable with renting computing power.”
Second, Nadella shifted away from “rapaciousness.”
Mr Nadella has changed Microsoft’s culture as well as its technological focus. The cult of Windows ordained that customers and partners be squeezed and rivals dispatched, often by questionable means, which led to the antitrust showdown… [Instead] work with regulators rather than try to outwit or overwhelm them.”
Breaking From Bureaucracy: Microsoft’s Agile Journey
The bold decisions that Nadella took were good decisions, but they would have had little effect if Microsoft had not been ready to implement them. An Agile transformation process had been underway for some years.


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