Microsoft’s Nadella Reshapes Top Management as Turner Leaves

(Bloomberg) -- Microsoft Corp. Chief Executive Officer Satya Nadella announced a broad reorganization of the company's senior executive ranks as long-time Chief Operating Officer Kevin Turner prepares to leave for another job.

Instead of naming a new COO, Nadella appointed two executives to divvy up the sales responsibilities and report to him. Jean-Philippe Courtois will be in charge of global sales, marketing and operations spanning Microsoft's 13 business areas, Nadella said in a note to employees Thursday. Judson Althoff will lead the worldwide commercial business, including government and small and medium-sized businesses.

Courtois, a 32-year Microsoft veteran, is a long-time international sales executive at Microsoft, having run both Microsoft International and Microsoft EMEA previously. Althoff previously ran Microsoft North America and is a former Oracle Corp. executive.

Other executives already reporting to Nadella will take on parts of Turner's job, with Chris Capossela leading worldwide marketing, Kurt DelBene leading IT and Chief Financial Officer Amy Hood taking over the sales and marketing team's finance group, which had been separate.

Next Level

At Microsoft, Turner, 51, was known for instilling rigor and discipline in sales and operations organizations that had lacked it, and helping boost sales of enterprise software. But he also presided over declining sales growth in the final years of CEO Steve Ballmer's reign as the company's flagship businesses aged and it lost out on mobile and operating system sales to Google and Apple Inc.

"He built a pretty solid sales organization," said Sid Parakh, a fund manager for Becker Capital Management. "If you go back to the early 2000s there were reports that Windows would die, but Microsoft has done really well, they have been able to transition to the cloud, and they did it under Kevin."

Turner is leaving Microsoft after more than a decade at the company to become CEO of the securities unit at financial-services firm Citadel LLC. He will join Citadel after a short transition period, the Chicago-based firm said Thursday in a statement.

Turner was a candidate to replace Ballmer as CEO in 2014, but was passed over in favor of Nadella. He's been searching for a CEO job for several years, according to a person familiar with the matter.

Nadella said in the note that he and Turner had been discussing what needs to be done in sales and support to help Microsoft “continue to reach for the next level of customer centricity and obsession.” To do that, Nadella said he decided to more closely embed Turner's unit in the rest of the company. The reorganization dismantles what had become something of a parallel organization within Microsoft, where Turner had his own finance, marketing and communications staffs.

Microsoft Chairman John Thompson also noted in an interview in May that the board was considering whether there were changes to be made to the sales and partner organizations to more quickly increase cloud revenue.

The company declined to say Thursday whether Thompson's comments were in any way related to Turner's departure.

At Microsoft, Turner was known for red-meat speeches at partner and sales events that amped up the rivalry with competitors like Oracle, Alphabet Inc.'s Google and International Business Machines Corp. and for an equally fierce competitive streak that saw him personally intercede to woo back customers flirting with non-Microsoft products.

A habit of peppering his speech with folksy maxims delivered in an Oklahoma accent, such as ‘the biggest room in our house is the room for improvement,” belied a tough manner and a refusal to accept shortcomings, that along with some of the rigid processes he put in place had both fans and detractors among employees.

Turner came to Microsoft from Wal-Mart Stores Inc. with a brief to instill more process and discipline in the company's operations and salesforce, which at the time didn't even have quarterly notes.

Turner introduced procedures such as a “conditions of satisfaction” document that details what Microsoft will provide each client. A screw-up required a “correction of errors” in which employees autopsied the mistake and laid out steps to ensure it didn't happen again. He also created standard scorecards with 30 categories to measure each subsidiary's performance.

Parakh said he was not sure what impact Turner would have on Citadel, but said, "Kevin is a fairly influential person. They're bringing in somebody who is pretty high-profile."

Microsoft was down 0.3 percent to $51.23 at 2:37 p.m. in New York. The shares were down 7.4 percent this year through Wednesday.

--With assistance from Nicole Piper To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net. To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr