There is a lot to learn from this event, not just if you are responsible for your organization‘s operating model. It tells a story about the future of software based workflows and AI in corporate strategy execution.
“You can only be frenemies with Microsoft, Johannes,” the CPO of a customer based in Silicon Valley once told me. This was in 2022, after Microsoft had just announced the acquisition of one of our competitors (for about $250M) in the corporate goal setting software niche.
What followed was a great case study in B2B monopoly power—a very practical experience for our team that certainly was challenging, but also helped us improve Workpath‘s positioning, pricing, integrations and other key elements of our platform.
The acquired solution before was not seen as the best product in our segment. In fact, it had been built for SMBs and there were plenty of complaints about UX issues and bugs. But when Microsoft began to integrate the tool into their product and pricing bundle, as well as into its global go-to-market activities, everyone in our market began to feel it:
- The tool was regularly given away “for free” for the first year — which procurement teams and budget holders love
- It was integrated deeper with other relevant Microsoft solutions — which IT teams and users love
- Microsoft also paid their partner ecosystem to do the implementation — which partners, procurement, and program leads love
Less than 3 years later, though, Microsoft announced they would shut down the solution in 2025. What had happened?
This unexpected retreat offers insights into the challenges of enterprise software adoption, but also into the complexity of the space. There are at least four major learnings in this, for leaders responsible for their organization‘s operating models, for Enterprise Architects, and IT strategist - but also for software companies like Workpath (in and beyond our category).
Why Viva Goals failed - and what the ecosystem can learn from it
Various Microsoft representatives confirmed Viva Goals was closed down because they could not achieve the growth and adoption they had expected. Interestingly enough, Microsoft first tried to develop a new solution, initially telling customers they saw issues with the product and that they did not want to give up the category.
Out of more than 80 Viva Goals customers we spoke with in the first weeks after the announcement, less than 15 were still pursuing larger rollouts with the software and more than 40 of them considered themselves stuck with less than 500 users and poor adoption in the tool. So despite the much bigger ambitions on both sides, something had clearly gone wrong.
1. Go-to-Market: Underestimating the role of enablement and partnership
Microsoft probably has the most powerful ecosystem of partners and go-to-market teams in B2B. And yet, they seem to have underestimated the complexity of driving adoption and scale in the processes they wanted to enable with Viva Goals. Effective goal management with real impact is not just another feature to be bundled and sold — it's a fundamental change in how organizations operate.
Over almost a decade in that space, we have experienced how much it takes a deep integration and feedback loops between transformation efforts, processes, and technology - if you really want to establish an effective new operating mode. Organizations are required to continuously invest into stakeholder and change management, iterative process adjustments, and employee enablement if they want real change in how the business can be steered and strategies can be executed.
Talking to Viva Goals customers and partners, we were surprised there wasn’t any real collaboration or enablement established that would recognize these realities. Neither were customers empowered for such an integrated approach, nor consultancies supported to integrate the technology deeper into their transformation and operating model projects. Without that kind of orchestrated effort, Viva Goals remained “just a feature” - known almost exclusively by IT and HR teams, not integrated into any holistic operating model design.
2. Positioning: Not addressing and involving key stakeholders
Enabling enterprises to achieve their most important goals is an executive priority of high stakes and business value. Yet, there are many misconceptions and ambiguity in how this can be achieved and who exactly is responsible.
As Viva Goals was mostly offered to Microsoft’s primary stakeholders in IT, while embedding it into its Employee Engagement Suite Viva (signaling this was an HR solution), it sent mixed signals and did not reach the stakeholders required for meaningful impact, like strategy and operational excellence teams.
There is a general challenge behind this: corporate goal management—as a means to execute strategy, to focus and align teams, and to ensure that resources are invested for the best possible impact—remains a poorly developed capability, suffering from scattered processes and a lack of clear ownership.
- There is goal setting in HR performance management, in most cases evidently without any real steering impact and poorly connected to strategic goals
- Obviously, there is goal setting in Finance and in Controlling, usually tied to rather rigid annual budget cycles and historic data, not really enabling outcome-centered and adaptive steering
- There is the project management landscape that encourages goal setting, but regularly puts output over impact, optimizing locally and reliably ensuring that at least everyone stays busy
Despite all the costs of and shortcomings with their existing steering levers, few of these stakeholders are waiting for yet another new process or tool.
When we founded Workpath, we were convinced that one of the biggest problems for corporate strategy execution and excellence in steering was that all of these processes remained disconnected niches. As a result, they all create avoidable administration effort, redundancies, and unresolved goal conflicts. Only a few organizations and no software vendor had successfully brought them together at scale yet. Even though they all aim at achieving goals, the different steering processes that make an effective operating model have very different stakeholder requirements, resources, and local optimization priorities.
With the capabilities and positioning of Viva Goals, the tool primarily added another layer to the operative project management for its customers in IT, without better connecting their work to aspired outcomes and strategy. For its customers in HR, it lacked most of the capabilities they would find in traditional Performance Management solutions like SAP Successfactors or Workday, and neither did it complement and integrate with them.
3. Integrations and contextual data: locked in and disconnected from the wider process landscape
Among all our current Viva Goals migration projects, almost every customer tells us how much they appreciated Viva’s integrations into Microsoft’s other products and that they chose Workpath because we emphasize these integrations as well.
At the same time, very few of them have used integrations into tools outside the Microsoft suite. In parts, this is due to the lack of integration with outside vendors and data sources, but also to the limited capabilities of the existing ones. That has been a major problem for the quality of the steering processes and their impact, as well as for the general adoption within the wider organization.
Effective business steering and strategy execution requires the alignment, monitoring, and optimization of four dimensions:
- resources input (e.g. budget, time)
- work output (e.g. products and initiatives)
- customer or stakeholders outcomes (measurable value)
- business impact (mostly financial metrics)
The relevant data on decisions and developments in these four dimensions is spread across the entire organization, in multiple tools, processes and entities. Only if you can connect that impact chain (from input to impact) across all levels, you can manage it and its feedback loops effectively, getting the results you aim for.
There is a common pattern when big tech companies acquire solutions, and Viva Goals is just one example: they usually do not integrate well beyond their own ecosystem, neglecting other tools and data sources. The consequences were similar when Atlassian acquired AgileDraft and made it an add-on to Jira (today called Jira Align): the steering solution became a heavy and expensive plug-in for Jira’s core users in IT, but mostly remained in that niche, not connecting well to other project management tools or financial planning solutions. Interestingly enough, the founders of AgileDraft recently started a new company in that space - to solve a challenge that yet has to be solved.
For corporate steering and goal setting capabilities, a vendor-agnostic, comprehensive integration of all relevant processes and data is essential. Particularly when it comes to AI, the most powerful capabilities will remain toothless without the context of structured data from all the four mentioned dimensions and their interdependencies.
How the future of technology enabled operating models will look like
Few companies in tech have made better bets than Microsoft in the last decade. So I think that also their retreat from the goal management space can be considered a signal of a general strategic pivot. According to different sources inside the company, several Microsoft teams share the destiny of the Viva Goals unit: they have all been redirected to work on MS Copilot.
The most common sentiment I currently pick up from CIOs and others is that they feel they have massively overspent on Copilot and that they are growing sick of continuously increasing SaaS prices with no direct relation to the actual outcomes. But this might be misleading.
We are still in the very early days of the AI era in enterprise. If Copilots can get access to more external structured data, they will become notably more powerful. The development of our own capabilities at Workpath has already shown us how Artificial intelligence can finally connect the different niches of corporate goal setting and enable better operating models that deliver superior results.
Employees interacting with AI Agents will drive the adoption of planning and collaboration processes as part of corporate goal setting and strategy execution. Many workflows will be completely automated by AI Agents, others will be replaced by new forms of user interaction and (data) input. This will significantly improve the quality of structured, timely data, bringing together much more transparent and complete impact chains that let leaders and strategy owners understand how input leads to outputs, as well as how to enhance outcomes and overall business impact.
Based on that new quality of structured data, AI can help teams in enterprises to monitor these impact chains and significantly accelerate the feedback loops between their elements. For example, AI Agents can prepare better business reviews, identify problems on other levels of the impact chain, and predict developments in real time.
The era of AI in enterprise is less about new workflow software, but more about connecting and streamlining processes and data for better outcomes. Owning major enterprise channels like MS Teams and data sources like PowerBI, Microsoft obviously is in a prime position to play at the forefront of these developments. In fact, every major enterprise vendor, be it SAP, ServiceNow, Atlassian, or Salesforce, will have to provide AI-powered capabilities that
- make sure they maintain control of the user interface
- better connect data across both their own product suite as well as the entire process landscape
The more dynamic and decomposed enterprises become - a trend that will accelerate through AI - the more important it will be to enable manageable impact chains as the backbone for enterprise steering.
At Workpath, we continue focusing on what our customers value the most: an experienced customer facing (go-to-market) team that integrates technology with services and expertise, a platform and integration strategy that connects data from all vendors and data sources, and a growing team of AI agents that can thrive on this foundation.
