The Ultimate Bug Fix for Microsoft's Marketing Machine

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Golden Master
To sustain its dominance in the digital era, Microsoft needed to work out the kinks in its marketing machine. Its approach might surprise you.

Inside many of the 56 buildings that cut across Microsoft's sprawling campus outside Seattle, teams of developers toil daily on an endless stream of projects—from short-term product upgrades to long-range, game-changing efforts. Pretty much what you'd expect from the world's largest software company.

But in the meeting rooms of Building 34, a different pilot project is under way. The focus of this effort is less on code and more on human capital—specifically, a collaboration between engineering and marketing.

For much of the past year, a small team of developers and marketers has met weekly to hash out the next release of Microsoft's Exchange e-mail server software. Team members have literally written the book on their efforts. The manual—dubbed the "Book of E12"—defines the framework of the next Exchange release. It encompasses everything from the market outlook to the perceived value of possible features to potential customers. At its essence, the book serves as a contract between marketing and engineering, describing what goes in and what stays out of the software.

That marketing would be involved so early in the product development cycle (the version 12 release is not scheduled to ship until the second half of 2006) is a significant change for a company historically dominated by engineers. The Exchange pilot, along with two similar projects, is perhaps the most tangible evidence yet of the far-reaching marketing transformation in the works at Microsoft.

The reinvention of the company's massive marketing organization, however, is no quick bug fix; executives estimate they're less than halfway through what may ultimately be a 10-year journey. "I know that sounds like an incredible amount of time, but when you're a company of 57,000 people and still very much an engineering culture, you can't have some corporate mandate and expect everyone to dance to it," says Mich Mathews, senior vice president of the corporate marketing group (CMG), who is overseeing the transformation.

The remaking of the Microsoft marketing machine centers on two main elements: an extensive investment in customer research methodologies and practices, and a comprehensive training program for the company's marketers—veterans and new hires alike. The goal, executives say, is to institute a consistent "customer value proposition" across the company.

From the top, Microsoft's executives acknowledge the importance of upgrading the company's relationship marketing capabilities to improve customer loyalty and extend Microsoft's already considerable reach into new customer markets. They also admit that they have a long way to go. "We have to be excellent in marketing execution," CEO Steve Ballmer told a group of marketing recruits in March. "Today, we are not. But we are committed to being excellent."
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