Executive Summary

At the heart of every successful business lies the ability to adapt and reinvent. This reflection is drawn from my experience in turning around the Microsoft 365 consumer subscription business. 

When I took over the reins of Microsoft 365’s consumer subscription business in 2018, the situation was perplexing. Despite each department achieving its own micro-goals, the consumer business was plateauing. The individual brilliance within the teams was palpable. Yet, the overall subscription business was in a precarious standstill. 

Imagine steering a ship where each crew member is rowing to the beat of their own drum. They’re all strong rowers, and they’re all rowing energetically, but the ship just isn’t moving as swiftly or as surely as it should be. Microsoft’s consumer subscription business was just that — a powerful vessel that had somehow found itself adrift.

My mission was to turn the tide and spark an unlikely renaissance for Microsoft’s consumer businesses.  Over the next 4 years, we did just that.  The Microsoft 365 consumer subscription turned from a flatline business to delivering double digit subscriber growth every single quarter thanks to a phenomenal cross-functional team of people.

Here’s how we went about this complex restructuring, divided into four foundational pillars. This case study encapsulates the lessons we learned and strategies we implemented, offering valuable insights for other organizations facing similar challenges.

Table of Contents

1. Goal Alignment: Resolving the Paradox of Individual Success and Collective Stagnation

2. Revamping Core Value Propositions: Shifting to a Human-Centered Approach

3. Culture Change: Cultivating Psychological Safety for Unbridled Innovation

4. Introducing Product-Led Growth: Making Users the Epicenter of Our Business

5. Conclusion & Key Take-Aways

1. Goal Alignment: Resolving the Paradox of Individual Success and Collective Stagnation

The Challenge

When I first immersed myself in the Microsoft 365 ecosystem, what struck me was a landscape dotted with individual successes. Each team, in their cocoon of operations, was registering achievements. In almost every review I joined, the dashboards showed green. But, as I zoomed out to a broader consumer portfolio perspective, the mosaic wasn’t as promising.  In fact, the all up consumer business P&L was red.  There was an intriguing paradox at play: How could a conglomerate of winning teams not translate to an overarching successful business?  

The problem was glaringly obvious—misaligned priorities were obstructing collective success.

Indicators of Goal Misalignment

Inconsistent Metrics: Different teams across the complex Microsoft matrix often set their own performance metrics, leading to a fractured understanding of success. For example, the marketing team might celebrate an uptick in leads, while the sales team grumbles about their low quality. The Word team might rejoice over high engagement for a new feature, overlooking that it didn’t move the needle on subscriber growth.

Isolated Celebrations: Departments like engineering, social, web, and marketing frequently celebrated their own wins, often without involving or even informing other teams. While these achievements might have been significant in isolation, they frequently failed to contribute to the broader objectives of the Microsoft 365 consumer business.

Lack of Inter-Departmental Communication and Redundancies: Teams operated in silos, rarely collaborating, or sharing insights. This resulted in redundant efforts and a palpable overlap in responsibilities across teams, functions, and divisions. This overlap can have multiple consequences:

• Defensiveness and Territoriality: Teams became protective of their domains, making meetings more competitive than collaborative.
• Constant Justification: Teams felt the need to continuously validate their worth, often presenting new features or projects with an underlying call for approval.
• Diminished Collaboration: A competitive atmosphere and lack of awareness about parallel projects stifled the spirit of collaboration and knowledge sharing, crucial for innovation.

Strategic Actions

• Shared OKRs – We adopted company-wide Objectives and Key Results (OKRs) aligned with core business goals like subscriber growth or retention goals. This pivot shifted focus from isolated wins to shared objectives, energizing teams towards common victories.
• Holistic Strategy – We initiated a company-wide overarching consumer strategy that connected the dots across individual products and apps. We integrated these sessions to unify teams under the “One Microsoft” vision, ensuring everyone grasped the collective mission.
• Regular Check-ins – Establish a routine rhythm of business for teams to report their progress on OKRs, enabling real-time course correction.
• Inter-departmental Collaboration – Implement cross-team brainstorming sessions. For instance, we established a weekly business check-in involving all stakeholders to foster collective insights.

The Result

We turned isolated ripples into synchronized waves of growth. Goal alignment wasn’t just a strategy; it became our ethos, directing collective energy towards larger, shared objectives.

2. Revamping the Core Value Proposition: Shifting to a Human-Centered Approach

The Challenge

Historically, the Microsoft 365 consumer suite resembled an archipelago – a group of distinct apps, each evolving on its own isolated trajectory. The Word team, fueled by its unique vision, rolled out features they believed would refine the Word experience. Similarly, the Excel team, in its silo, was forging ahead with functionalities aimed at elevating the Excel environment. This pattern was replicated across the suite, with each team engrossed in its microcosm, often with little regard for the larger Microsoft 365 consumer landscape.

In essence, Microsoft 365 was not so much a cohesive suite but rather a collection of standalone apps, each marching to its own drummer. And while this approach did lead to innovations within individual apps, it inadvertently cultivated a fragmented user experience on the suite level.

Recognizing this, we confronted a pivotal question: were we merely adding to an ever-growing list of features across apps or were we genuinely enhancing the Microsoft 365 experience as a whole? It prompted introspection on what problems the modern productivity user faced that were unaddressed by this scattered approach.

Our response was a deliberate pivot towards a holistic, human-centered design philosophy. Instead of asking, “What can we add to PowerPoint?”, the question became, “What does the user need across Microsoft 365 to enhance their productivity?”

Symptoms of a Misaligned Value Proposition at Microsoft:

1. Feature Bloat: One of the initial indicators was the constant addition of new features that, while impressive on their own, did not necessarily resonate with the users. For instance, the Word team might introduce advanced formatting tools while the average user was struggling to navigate basic functionalities.
2. Dissatisfied Users: Despite regular feature rollouts, user satisfaction surveys indicated a disconnect. Users often felt overwhelmed by the myriad of features and yearned for simpler, more intuitive solutions.
3. Low Cross-Product Engagement: Even as individual applications like Excel or PowerPoint underwent upgrades, the holistic engagement with the Microsoft 365 suite didn’t see proportional growth. The standalone advancements weren’t culminating into an integrated, enhanced user experience.

Strategic Actions

• Start with End User Needs: We shifted the focus from adding isolated features to researching the deeper needs of today’s “Modern Achievers” across the productivity suite.   We quickly learned that our target audiences wanted more than new features in existing app silos.  From security and privacy to family safety and community, we launched & experimented with new experiences and products outside the traditional Office apps. As a result, we expanded the traditional definition of “productivity apps.”  We also introduced features that had cross-product applicability and enhanced user value.

The Result

This human-centered redesign led to a unified Microsoft 365 suite that was greater than the sum of its parts, leading to increased user satisfaction and engagement.

3. Culture Change: Cultivating Teams Who Felt They Could Challenge the Status Quo

The Challenge

It’s often said that culture eats strategy for breakfast.  When I joined, it was obvious that some teams at Microsoft operated within an environment where the metric of success was the absence of failure. A missed target or an unsuccessful feature launch was often met with apprehension, sometimes even with a veiled attempt to obscure or minimize the setback. In certain executive reviews, employees were hesitant to report any red metrics to leaders. As a result, I observed teams that feared to venture outside the box, lest they risked a misstep.   

The existing culture was risk-averse, stifling innovation and hindering growth. In our pursuit of innovation, we recognized the need for a cultural shift.

Strategic Actions

1. Celebrating Failures: We cultivated a landscape where endeavors, even those that didn’t hit the mark, were celebrated. A failed project was no longer a blot on a team’s record but a testament to their courage to innovate.
2. Open Forums and Brainstorming Sessions: These became commonplace in our weekly business reviews, encouraging teams to voice out-of-the-box ideas without the looming shadow of judgment. For instance, an idea from the OneNote team, even if radical, was given the floor, fostering cross-pollination of ideas with Teams or Excel.
3. Transparent Fail-Reviews: Instead of shoving failures to the background, we highlighted them. Not as points of criticism, but as learning moments. Why did a certain feature in PowerPoint not resonate? What can we learn from it for the SharePoint roadmap?
4. Encouraging the Rebel Talent: Teams were urged to challenge conventions, even if it meant overturning long-standing practices. This rebel mindset meant that no stone was left unturned in our pursuit of a better Microsoft 365.
5. Leadership Leading by Example: Our leadership didn’t just direct this change from the top; they were its flagbearers. Their open acknowledgment of challenges and vulnerabilities made it clear – it was okay to not have all the answers.

The Result

As teams began to embrace this new ethos, the horizon for Microsoft 365 expanded. What was once a suite bound by conventions began to resonate with the vibrancy of limitless possibilities.

The cultural shift unlocked a new horizon of possibilities, making innovation a driving force behind our growth.

4.Introducing Product-Led Growth: A Paradigm Shift from Enterprise-Centric to User-Centric Models

The Challenge: Overcoming an Enterprise-Led Legacy

For years, Microsoft’s focus had predominantly been on enterprise-led sales, a strategy that made sense given the significant revenue generated from the enterprise side of the subscription business. However, this focus had a downside: the Office suite of products had little to no room for Product-Led Growth (PLG). While our enterprise sales machinery was well-oiled and highly efficient, it often overshadowed the need for a more user-centric approach, particularly in the Microsoft 365 consumer business. This led us to a transformative crossroads—how could we pivot from an enterprise-centric model to one where the user is at the heart of every decision we make?

The Philosophy: PLG as an Unveiling of the User Journey

Switching to a PLG approach wasn’t merely a change in tactics; it was a ground-breaking shift in our entire business philosophy. PLG doesn’t just put the user in the spotlight; it makes them the scriptwriter, the director, and the critic. It’s a philosophy that goes beyond user-centric design to map out the entire user journey meticulously, analyzing every touchpoint where the user interacts with our product.

The Deep Analytics of User Journey Mapping

Historically, the user journey within Microsoft 365 was not something we lost sleep over. Sure, we had analytics and KPIs, but we had never really “sweated the funnel.” But with PLG, we began to dissect the user journey, stage by stage, to understand exactly where we were losing customers and where we had the most potential for growth. This was a significant shift because, for the first time, we were not just looking at numbers; we were interpreting stories—stories that told us why a user abandoned a sign-up halfway or why they never used a feature they had activated.

Strategic Actions

• Micro-Mapping the Funnel: We started by breaking down the entire customer journey into micro-interactions. These were the critical touchpoints where a user could either become more engaged or completely drop off. Understanding these nuances was crucial for optimizing each stage of the funnel. We tore down and rebuilt the entire customer journey. From the moment someone contemplates using a Microsoft product to their daily interactions with our software, we endeavored to minimize friction and maximize value. We streamlined the sign-up process, simplified navigation, and made discovering new features intuitive.
• One Microsoft Vision: The “One Microsoft” initiative was about breaking down the silos between different products to offer a cohesive, unified experience. For instance, seamless integrations between Microsoft Word, Teams, and Outlook were developed to foster a holistic ecosystem that caters to all the user’s needs in one place.
• Redefining Freemium: We revisited our freemium model to better showcase the value of our premium offerings. For example, users could experience advanced features for a limited time, offering a taste of the added benefits, thereby encouraging conversions.
• Perpetual Experimentation: We instituted a culture of ongoing A/B testing, user interviews, and feedback loops. Teams were encouraged to innovate, measure, learn, and iterate, thus continually improving the user experience.
• Viral Loops and Network Effects: Part of our PLG strategy included implementing viral loops through referral programs, influencer collaborations, and spotlighting user-generated content. This wasn’t just about customer acquisition but creating self-reinforcing cycles that turned existing users into advocates, thereby driving sustained growth.

The Result

The implications of this deep dive into the user journey were profound. Not only did we start to see an uptick in user engagement and conversions, but we also began to understand our users on a much more granular level. This insight allowed us to continuously iterate our product in a way that was profoundly aligned with our users’ needs and expectations. PLG is not a static strategy but an evolving paradigm, one that we are committed to refining as we continue to grow. With PLG, we are not just evolving our product; we are revolutionizing the way we understand our users, thereby setting the stage for Microsoft’s next epoch of growth.

Conclusion

The revival of Microsoft 365’s consumer subscription business was not just about working harder; it was about working smarter and together. It required a holistic realignment of goals, a human-centered approach to product development, a culture that fosters innovation, and a relentless focus on user-centric growth. We pivoted from a disparate collection of strong individual units to a synchronized, holistic entity that is greater than the sum of its parts.

The pillars we implemented were neither random initiatives nor isolated interventions. They were a set of carefully orchestrated strategies that, together, acted as a catalyst for change. We moved from a traditionally enterprise-led sales model to embrace a more user-centric approach, breaking free from the inertia that had held us back. We realigned not just our products but also our people, culminating in a culture that is conducive to ongoing innovation and growth.

This case study serves as a blueprint for how other organizations can navigate their complexities to achieve collective success.

Key Takeaways

1. Unified Objectives: Goal alignment is pivotal for channeling the collective energies of various departments towards a singular vision. The implementation of shared OKRs helped transform isolated successes into unified achievements.
2. User-Centric Value Proposition: A shift to a human-centered design philosophy enabled us to create a product suite that truly resonates with the user, moving away from a disconnected array of individual apps to a more cohesive and integrated experience.
3. Culture of Innovation: Changing the corporate culture to encourage risk-taking and celebrate failures as learning opportunities unlocked new avenues of creativity and innovation, making us more resilient and adaptable.
4. Product-Led Growth: The transition from an enterprise-centric to a user-centric model through Product-Led Growth (PLG) has not only diversified our revenue streams but also deepened our engagement with the consumer base. This approach allows us to be more responsive to user needs, driving sustained growth.
5. Continual Adaptation: The strategies implemented are not static but dynamic, allowing for ongoing refinement and iteration. This mindset ensures that we are not just reacting to change but proactively driving it.

Through these strategies, we transformed Microsoft 365 from a stagnating product suite into a dynamic, growth-oriented business. I hope that the insights and actions detailed here can serve as a guide for other organizations facing similar challenges.