HBR On Strategy

Microsoft: A Case Study in Strategy Transformation

Jul 3, 2024

Harvard Business School professor Fritz Foley discusses Microsoft's strategic transformation in 2015, focusing on growth strategy, business models, and cultural evolution. Topics include shifting to subscription sales, aligning investors and employees, and overcoming risk-averse culture. Learn how Microsoft navigated challenges and drove growth.

20:22

Episode guests

Fritz Foley

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Highlights

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Episode notes

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Quick takeaways

Microsoft shifted towards subscription sales for higher growth, highlighting the need for strategic transformation.

Investors perceived Apple as growth-oriented while seeing Microsoft as less innovative, prompting Microsoft's shift towards growth strategy.

Deep dives

Microsoft's Strategic Crossroads

Microsoft faced a crucial decision in early 2015, with the senior leadership team contemplating a shift towards higher growth but lower margins, such as transitioning from perpetual licensing to subscription sales. This transformation was studied by Harvard Business School professor Fritz Foley, highlighting how Microsoft's leaders navigated the change, aligning investors and employees with a new vision of growth.

Margins vs Growth Orientation in Company Strategy

01:45

The Dreaded Cold Call in Corporate Finance

01:21

Intro

3min

Exploring Strategic Decisions at Microsoft with the CFO

2min

Microsoft's Growth Strategy and Cultural Transformation

10min

Navigating Strategic Challenges with a CFO

5min

Closing Segment and Sponsor Mention

2min

In early 2015, Microsoft’s senior leaders were facing a set of difficult decisions. The firm had been struggling to innovate and grow as fast as its competitors. Now they were considering new opportunities that would yield higher growth but lower margins — like shifting away from perpetual licensing to focus on subscription sales.

Harvard Business School professor Fritz Foley studied this period of transformative change at Microsoft for a business case study he wrote. In this episode, he shares how Microsoft’s leaders analyzed different options and worked to get both investors and employees on board with new ideas about growth. He also explains how the company’s risk-averse culture evolved in order to execute such a huge transformation.

Key episode topics include: strategy, growth strategy, business models, corporate governance.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

· Listen to the original Cold Call episode: The Transformation of Microsoft (2018)

· Find more episodes of Cold Call

· Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org

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HBR On Strategy

Microsoft: A Case Study in Strategy Transformation

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Microsoft's Strategic Crossroads

Tech Giants' Divergent Financial Strategies

Cultural Evolution and Organizational Restructuring

Margins vs Growth Orientation in Company Strategy

The Dreaded Cold Call in Corporate Finance

Remember Everything You Learn from Podcasts