I heard about this VanityFair article the other day. Some said it's all bs while others were saying it's deadon.
Analyzing one of American corporate history’s greatest mysteries—the lost decade of Microsoft—two-time George Polk Award winner (and V.F.’s newest contributing editor) Kurt Eichenwald traces the “astonishingly foolish management decisions” at the company that “could serve as a business-school case study on the pitfalls of success.” Relying on dozens of interviews and internal corporate records—including e-mails between executives at the company’s highest ranks—Eichenwald offers an unprecedented view of life inside Microsoft during the reign of its current chief executive, Steve Ballmer, in the August issue. Today, a single Apple product—the iPhone—generates more revenue than all of Microsoft’s wares combined.Eichenwald’s conversations reveal that a management system known as “stack ranking”—a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”
When Eichenwald asks Brian Cody, a former Microsoft engineer, whether a review of him was ever based on the quality of his work, Cody says, “It 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.” Ed McCahill, who worked at Microsoft as a marketing manager for 16 years, says, “You look at the Windows Phone and you can’t help but wonder, How did Microsoft squander the lead they had with the Windows CE devices? They had a great lead, they were years ahead. And they completely blew it. And they completely blew it because of the bureaucracy.”one reader comment:“I see Microsoft as technology’s answer to Sears,” said Kurt Massey, a former senior marketing manager. “In the 40s, 50s, and 60s, Sears had it nailed. It was top-notch, but now it’s just a barren wasteland. And that’s Microsoft. The company just isn’t cool anymore.”
“They used to point their finger at IBM and laugh,” said Bill Hill, a former Microsoft manager. “Now they’ve become the thing they despised.”
Read the entire article at VanityFair.InTheKnow23
5:27 PM on 7/3/2012
As someone who spent 7 years in Microsoft until recently, I cannot state strongly enough how dead on correct this article is. I see some defensive postings below such as "What about XP?!" when the fact is that Windows ME and Windows Vista were two of the worst OS' ever released. The stack rating system is one of the absolute worst management techniques I've ever encountered. As the article says, it pits team member against team member (e.g. one of us MUST die regardless of how we do as a team"). Innovation requires taking risks and stepping outside of the box. The stack ranking system pretty much ensures that neither take place - people do not take risks and instead focus each day on how to SURVIVE vs. how to make the Microsoft more Successful. If you try to push for new ideas and new processes, you are simply labeled a troublemaker and will soon be culled from the herd. The middle management layer is Microsoft's Achilles heel - a bunch of frightened rabbits not wanting to do anything to risk their career path at Microsoft. Some years back I saw a comment posted on a web blog - "Microsoft - Brilliant people doing mediocre things". This could not be more true across the vast majority of the company - and the employees feel this way themselves. They are very poorly led, and the management/review system will continue to be disingenuous and drag the company down. And it's such a shame because there are a lot of brilliant people there who could change the world in the way Apple and Google and Facebook have. All they need is a management system that facilitates such.
When you think about it, Windows 8 really seems to fit in with all this