Hey Steve,

Heard you’re doing some major clean up this summer and thought I’d share my 2cents. There are plenty of things that comes to mind, but I will lay down 5 key things that you may want to consider (listed in no particular order of priority).

1. Lose the hierarchy.

Empire building is a well understood concept internally at Microsoft, leadership strength is often displayed and determined by the number of folks reporting upto you. Next time you see an exec under you with > 4 levels of reports under them, fire him/her.

2. Want to beat Apple, Google or whoever else? – Get them to adopt your Employee Review system.

Employee Reviews are supposed to be healthy and the most constructive part of the career building and retention plan for employees. Instead the MS review system has effectively created a bunch of unhealthy practices that promotes the politically savvy, backstabbers and kills any incentives to collaborate within and across teams. Change the review system to promote collaboration and reduce the heavy focus on the monetary benefits. And please make a sign that threatens to fire anyone who says the words “it is not part of my commitment” and post it everywhere on campus.

3. Be Lean.

Program management is just the glue that ensures a coherent engineering process. You don’t need to hire Program Managers at a 1:1 ratio to developers. Put an end to these senseless hiring practices. The same applies to Product Management and Test roles as well. One simple rule that could help – Never let any manager hire for “a project”, invest in hiring great talent for Microsoft and staff them appropriately.

4. Product Management.

Product management is not a dormant advisory role, but a thought process that needs to be an integral part of the engineering and product innovation process. Have the Product Managers report to Engineering leadership and make them key stake-owners in defining the product vision – no 2 ways about that.

5. You have done well – Now Retire.

Unlike popular notion, I do think you did well in terms of making sure the house of cards didn’t come tumbling down after the departure of someone as charismatic as Bill Gates. But you also didn’t fare well when it came to riding the new wave of mobile and tablet innovation. It’s past time you handed over the reins to someone new and fresh who is technically savvy and loves to be a CEO. My recommendation- Tony Bates, he is new and unadulterated by the Microsoft culture and understands how to operate like a startup. Oh and if you need some motivation or a plan for retirement, check out the career page on Gates foundation.

All that said and regardless of what you choose to do, this re-org has the potential to redefine your legacy – Don’t screw it up!

Good Luck,