{"id":4471,"date":"2012-08-20T09:56:22","date_gmt":"2012-08-20T09:56:22","guid":{"rendered":"http:\/\/meeseeks:5080\/blog\/?p=4471"},"modified":"2012-08-20T09:56:22","modified_gmt":"2012-08-20T09:56:22","slug":"the-corporate-culture-of-microsoft","status":"publish","type":"post","link":"https:\/\/vukutu.com\/blog\/2012\/08\/the-corporate-culture-of-microsoft\/","title":{"rendered":"The corporate culture of Microsoft"},"content":{"rendered":"

Anyone with friends or associates working for Microsoft these last few years has heard stories of its bizarre internal employee appraisal system, called stack ranking: \u00a0 Every group, no matter how wonderful or effective, must include some poor performers – by decree, not for any other reason.\u00a0\u00a0 One is reminded of Stalin’s imposition of quotas on the intelligence agencies for finding spies in the USSR in the 1930s.\u00a0\u00a0\u00a0 With this system, it is not sufficient that people achieve their objectives or perform well: to be also rated<\/strong> as performing well, others in the same team must be rated as performing poorly. \u00a0 There are three extremely negative outcomes of this system:\u00a0 first, good and even very good performers get rated as performing poorly; second, immense effort is spent by almost everyone in ensuring\u00a0 that others do badly in the ratings; and third, team spirit dissolves.
\nThe August issue of Vanity Fair<\/em> has a long profile of Microsoft and its current ills, Microsoft’s Lost Decade<\/em>, by Kurt Eichenwald, here<\/a>, which discusses this system in detail. \u00a0 \u00a0 Here is a description of\u00a0 the system and its consequences:<\/p>\n

At the center of the cultural problems was a management system called \u201cstack ranking.\u201d Every current and former Microsoft employee I interviewed\u2014every one<\/em>\u2014cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system\u2014also referred to as \u201cthe performance model,\u201d \u201cthe bell curve,\u201d or just \u201cthe employee review\u201d\u2014has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor.
\n\u201cIf you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,\u201d said a former software developer. \u201cIt leads to employees focusing on competing with each other rather than competing with other companies.\u201d
\nSupposing Microsoft had managed to hire technology\u2019s top players into a single unit before they made their names elsewhere\u2014Steve Jobs of Apple, Mark Zuckerberg of Facebook, Larry Page of Google, Larry Ellison of Oracle, and Jeff Bezos of Amazon\u2014regardless of performance, under one of the iterations of stack ranking, two of them would have to be rated as below average, with one deemed disastrous.
\nFor that reason, executives said, a lot of Microsoft superstars did everything they could to avoid working alongside other top-notch developers, out of fear that they would be hurt in the rankings. And the reviews had real-world consequences: those at the top received bonuses and promotions; those at the bottom usually received no cash or were shown the door.
\nOutcomes from the process were never predictable. Employees in certain divisions were given what were known as M.B.O.\u2019s\u2014management business objectives\u2014which were essentially the expectations for what they would accomplish in a particular year. But even achieving every M.B.O. was no guarantee of receiving a high ranking, since some other employee could exceed the assigned performance. As a result, Microsoft employees not only tried to do a good job but also worked hard to make sure their colleagues did not.
\n\u201cThe behavior this engenders, people do everything they can to stay out of the bottom bucket,\u201d one Microsoft engineer said. \u201cPeople responsible for features will openly sabotage other people\u2019s efforts. One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn\u2019t get ahead of me on the rankings.\u201d
\nWorse, because the reviews came every six months, employees and their supervisors\u2014who were also ranked\u2014focused on their short-term performance, rather than on longer efforts to innovate.
\n\u201cThe six-month reviews forced a lot of bad decision-making,\u201d one software designer said. \u201cPeople planned their days and their years around the review, rather than around products. You really had to focus on the six-month performance, rather than on doing what was right for the company.\u201d
\nThere was some room for bending the numbers a bit. Each team would be within a larger Microsoft group. The supervisors of the teams could have slightly more of their employees in the higher ranks so long as the full group met the required percentages. So, every six months, all of the supervisors in a single group met for a few days of horse trading.
\nOn the first day, the supervisors\u2014as many as 30\u2014gather in a single conference room. Blinds are drawn; doors are closed. A grid containing possible rankings is put up\u2014sometimes on a whiteboard, sometimes on a poster board tacked to the wall\u2014and everyone breaks out Post-it notes. Names of team members are scribbled on the notes, then each manager takes a turn placing the slips of paper into the grid boxes. Usually, though, the numbers don\u2019t work on the first go-round. That\u2019s when the haggling begins.
\n\u201cThere are some pretty impassioned debates and the Post-it notes end up being shuffled around for days so that we can meet the bell curve,\u201d said one Microsoft manager who has participated in a number of the sessions. \u201cIt doesn\u2019t always work out well. I myself have had to give rankings to people that they didn\u2019t deserve because of this forced curve.\u201d
\nThe best way to guarantee a higher ranking, executives said, is to keep in mind the realities of those behind-the-scenes debates\u2014every employee has to impress not only his or her boss but bosses from other teams as well. And that means schmoozing and brown-nosing as many supervisors as possible.
\n\u201cI was told in almost every review that the political game was always important for my career development,\u201d said Brian Cody, a former Microsoft engineer. \u201cIt was always much more on \u2018Let\u2019s work on the political game\u2019 than on improving my actual performance.\u201d
\nLike other employees I interviewed, Cody said that the reality of the corporate culture slowed everything down. \u201cIt got to the point where I was second-guessing everything I was doing,\u201d he said. \u201cWhenever I had a question for some other team, instead of going to the developer who had the answer, I would first touch base with that developer\u2019s manager, so that he knew what I was working on. That was the only way to be visible to other managers, which you needed for the review.\u201d
\nI asked Cody whether his review was ever based on the quality of his work. He paused for a very long time. \u201cIt was always much less about how I could become a better engineer and much more about my need to improve my visibility among other managers.\u201d
\nIn the end, the stack-ranking system crippled the ability to innovate at Microsoft, executives said. \u201cI wanted to build a team of people who would work together and whose only focus would be on making great software,\u201d said Bill Hill, the former manager. \u201cBut you can\u2019t do that at Microsoft.\u201d<\/p><\/blockquote>\n

And, according to Eichenwald, Microsoft had an early lead in e-reader technology that was lost due to the company’s cultural bias in favour of the Windows look-and-feel:<\/p>\n

The spark of inspiration for the device had come from a 1979 work of science fiction, The Hitchhiker\u2019s Guide to the Galaxy,<\/em> by Douglas Adams. The novel put forth the idea that a single book could hold all knowledge in the galaxy. An e-book, the Microsoft developers believed, would bring Adams\u2019s vision to life. By 1998 a prototype of the revolutionary tool was ready to go. Thrilled with its success and anticipating accolades, the technology group sent the device to Bill Gates\u2014who promptly gave it a thumbs-down. The e-book wasn\u2019t right for Microsoft, he declared.
\n\u201cHe didn\u2019t like the user interface, because it didn\u2019t look like Windows,\u201d one programmer involved in the project recalled. But Windows would have been completely wrong for an e-book, team members agreed. The point was to have a book, and a book alone, appear on the full screen. Real books didn\u2019t have images from Microsoft Windows floating around; putting them into an electronic version would do nothing but undermine the consumer experience.
\nThe group working on the initiative was removed from a reporting line to Gates and folded into the major-product group dedicated to software for Office, the other mammoth Microsoft moneymaker besides Windows. Immediately, the technology unit was reclassified from one charged with dreaming up and producing new ideas to one required to report profits and losses right away.
\n\u201cOur entire plan had to be moved forward three to four years from 2003\u201304, and we had to ship a product in 1999,\u201d said Steve Stone, a founder of the technology group. \u201cWe couldn\u2019t be focused anymore on developing technology that was effective for consumers. Instead, all of a sudden we had to look at this and say, \u2018How are we going to use this to make money?\u2019 And it was impossible.\u201d
\nRushing the product to market cost Microsoft dearly. The software had been designed to run on a pad with touch-screen technology, a feature later popularized with the iPhone. Instead, the company pushed out Microsoft Reader, to run on the Microsoft Pocket PC, a small, phone-size device, and, soon after, on Windows. The plan to give consumers something light and simple that would allow them to read on a book-size screen was terminated.
\nThe death of the e-book effort was not simply the consequence of a desire for immediate profits, according to a former official in the Office division. The real problem for his colleagues was that a simple touch-screen device was seen as a laughable distraction from the tried-and-true ways of dealing with data. \u201cOffice is designed to inputting with a keyboard, not a stylus or a finger,\u201d the official said. \u201cThere were all kinds of personal prejudices at work.\u201d
\nIndeed, executives said, Microsoft failed repeatedly to jump on emerging technologies because of the company\u2019s fealty to Windows and Office. \u201cWindows was the god\u2014everything had to work with Windows,\u201d said Stone. \u201cIdeas about mobile computing with a user experience that was cleaner than with a P.C. were deemed unimportant by a few powerful people in that division, and they managed to kill the effort.\u201d
\nThis prejudice permeated the company, leaving it unable to move quickly when faced with challenges from new competitors. \u201cEvery little thing you want to write has to build off of Windows or other existing products,\u201d one software engineer said. \u201cIt can be very confusing, because a lot of the time the problems you\u2019re trying to solve aren\u2019t the ones that you have with your product, but because you have to go through the mental exercise of how this framework works. It just slows you down.\u201d<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Anyone with friends or associates working for Microsoft these last few years has heard stories of its bizarre internal employee appraisal system, called stack ranking: \u00a0 Every group, no matter how wonderful or effective, must include some poor performers – by decree, not for any other reason.\u00a0\u00a0 One is reminded of Stalin’s imposition of quotas […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,19],"tags":[],"class_list":["post-4471","post","type-post","status-publish","format-standard","hentry","category-computer-technology","category-corporate-culture","p1","y2012","m08","d20","h09"],"_links":{"self":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/posts\/4471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/comments?post=4471"}],"version-history":[{"count":0,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/posts\/4471\/revisions"}],"wp:attachment":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/media?parent=4471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/categories?post=4471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/tags?post=4471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}