As expected, Microsoft confirmed on Monday that Tami Reller and Tony Bates are leaving the company. But a publicly released memo to employees by new CEO Satya Nadella also provides some tantalizing clues about the real reasons for their exits. It seems a few people were not "all in" with the new strategy.
"We all need to do our best work, have broad impact, and find real meaning in the work we do," Mr. Nadella writes in the memo. "I have asked for the 'all in' commitment [of the Senior Leadership Team] as we embark on the next chapter for the company. We need to drive clarity, alignment, and intensity across all our work."
Related: "Microsoft Announces Sweeping Reorg"
Reading between the lines there, it's pretty clear that Reller and Bates were either not willing or not able to do their best work, nor were either "all in" on the strategy. So they're out.
As I noted yesterday in the article "In Latest Shakeup at Microsoft, Reller and Bates Reportedly Out," Mr. Bates was widely expected to leave Microsoft. He was a long-shot possibility for Microsoft's next CEO and has close ties to Silicon Valley, which isn't exactly a Microsoft enclave. And as the one-time CEO of Skype, he's been pining for another leading role. That will never happen at Microsoft.
Reller's departure—and Mark Penn's ascension to overall strategy chief—is in many ways the bigger story. Although Reller had emerged as a friendly and plain-spoken face for Windows in the wake of Steven Sinofsky's abrupt departure in late 2012, as chief marketing officer she has had to work with controversial former political wonk Mark Penn since Microsoft's reorganization. This has apparently been "uncomfortable and increasingly untenable," given their different styles.
Penn is an interesting case. He's infamous for his work on Hillary Rodham Clinton's 2008 presidential campaign, for which he masterminded the 3 a.m. television commercial that questioned Barack Obama's experience. And at Microsoft, he created the "Scroogled" ad campaign, which takes Google to task for its many privacy invasions.
That "Scroogled" is divisive is not open to debate: Some love the ads, seeing them as a public education about Google policies that are too often ignored. But some loathe them and believe Microsoft shouldn't stoop to attacking a competitor, no matter how valid the argument. What's interesting is that this tactic is also sharply debated within Microsoft, and it's possible—likely, perhaps—that Reller's departure is tied to Penn's promotion. Penn isn't exactly known as a warm guy to be around.
More to the point, Microsoft's new CEO believes in Penn and the data-backed results he gets.
"Mark [Penn] brings a blend of data analysis and creativity that has led to new ways of working and strong market outcomes such as the 'Honestly' campaign and the Super Bowl ad, both of which were widely cited as examples of high-impact advertising across the industry," he explains in the memo. "His focus on using data to quickly evaluate and evolve our campaigns has driven new insights and understanding ... I am looking forward to applying Mark's unique skill set across a broader set of challenges facing the company, from new product ideas to helping shape the overall areas of strategic investment. He will be a member of and an advisor to the [Senior Leadership Team] and will continue to report to me."
Translation: Penn is in, Reller is out. After assisting in the transition, Reller "will then take time off and pursue other interests outside the company," Nadella explains. "I look forward to seeing what she does next." It just won't be at Microsoft.