“When Jennie Locati heard that Microsoft is looking to restructure the company, she decided to offer CEO Steve Ballmer some advice: Don’t restructure: renew,” Emily Parkhurst reports for The Puget Sound Business Journal. “In a blog post this week, Locati suggested Microsoft implement voluntary layoffs with generous severance packages for as many as 20,000 to 30,000 people, including high level corporate vice presidents. That, she said, would cost a small fortune, but it would release all the brilliant innovators to start companies of their own that Microsoft could potentially acquire several years down the road.”

“Locati isn’t just an armchair quarterback. She recently left her job as a director of strategy and business management in the Xbox studios division and has spent eight years working in various divisions within Microsoft,” Parkhurst reports. “One of the biggest problems Locati sees for Microsoft is the man at the wheel: Ballmer. ‘He’s truly out of touch with the market,’ she said. ‘He’s never been a product guy. He’s a money guy. He thrives on the competition between companies, not products.'”

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Parkhurst reports, “But the market has changed, she said, and Microsoft has maintained its technology xenophobia. ‘People are pushed to not recognize innovation if it’s not on the Microsoft platform,’ Locati said. She got to know this first hand while working in Mac Business Unit for several years. ‘If you acknowledge the value of another platform or product, you get called out for it,’ she said. ‘It’s a very bizarre environment.'”

“For example, when the iPhone hit the market, Ballmer was quoted saying there was no chance the iPhone would ever get any significant market share. Locati said he told Microsoft employees the iPhone sucked,” Parkhurst reports.

Parkhurst reports, “‘What he should have done was get up on stage and say, ‘I’ve been using this thing for a month and I think it’s great. And I think we can do better” … ‘The company is just so broken,’ Locati said. ‘It is truly a case of too many fish in too small a pond. There’s not enough air.'”

Read more in the full article here.

MacDailyNews Take: For as long as it takes.

Excerpts from a BusinessWeek interview with Steve Jobs, October 12, 2004:

Steve Jobs: Apple had a monopoly on the graphical user interface for almost 10 years. That’s a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly. But after that, the product people aren’t the ones that drive the company forward anymore. It’s the marketing guys or the ones who expand the business into Latin America or whatever. Because what’s the point of focusing on making the product even better when the only company you can take business from is yourself? So a different group of people start to move up. And who usually ends up running the show? The sales guy… Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they’re no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn’t.

BusinessWeek: Is this common in the industry?
Steve Jobs: Look at Microsoft — who’s running Microsoft?

BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed.

[Thanks to MacDailyNews Reader “RobM” for the heads up.]