Microsoft’s Downfall: Inside the Cannibalistic Culture That Felled a Tech Giant

http://www.vanityfair.com/online/daily/2012/07/microsoft-downfall-emails-steve-ballmer

by 127001brewer • 14 years ago

347 355 14 years ago

mahrain• 14 years ago

Until now most of the Microsoft reporting I've read has been "they need to move" and "they're feeling the heat from (Apple, Google etc.)". This is the first time they're past-tense, over and done with.

I'm not sure, though. They're surfing a wave of Windows/Office and XBOX cash and still very relevant for business with a huge ecosystem of developers, schools and universities educating future Microsoft users and sysadmins.

wpietri3• 14 years ago

Educating them for what, though?

A lot of the MS technology stack makes sense in a world when you have a lot of individual servers scattered across companies. But speaking as a guy who still maintains a couple of physical servers of my own, I think that's dying. Ubiquitous good bandwidth means centrally managed services make much more sense.

I'd hate to discourage anybody from doing technical work, but about the last thing I'd recommend a student become today is an MS sysadmin. I think its career prospects are similar to COBOL developer: reasonable for people to keep going until they retire, but definitely not a growth industry with 40 years of solid prospects ahead.

mark_integerdsv3• 14 years ago

>Ubiquitous good bandwidth...

Hello from Cape Town, South Africa where one of the planets most innovative mobile service providers runs once of the biggest and most important organisations in the country and does it all on physical servers.

I'm talking about Vodacom and as a denizen of the third world it really gets up my nose when people make wild claims based on the ubiquity and quality of their broadband as to the future of technology in the world at large... emerging markets, much?

rogerbinns• 14 years ago

> They're surfing a wave of ... cash

That doesn't help. It is lagging indicator reflecting what you did in the past, not what you do today or will do tomorrow.

For example read the Innovator's Dilemma where the pattern is repeated. Companies would listen closely to their customers, getting improving cash, rinse and repeat. Everything looks great right up until it falls off a cliff because attention moves to something else that looked irrelevant, but was actually disruptive.

A good example is RIM. They kept sailing on their prior work and even a year ago operating margins were 20%. Now they are minus 25%. Historically no mobile company has ever got out the place RIM is now in. But their wave of cash looked good and was enough to fool them into being complacent.

http://www.asymco.com/2012/07/02/rims-tailspin/

Apocryphon2• 14 years ago

I don't think the tone is that MS is going to be gone. I think it's more like MS is going the way of IBM, Oracle, Cisco, etc.- companies that will stick around and make important things, but do so quietly and with much less excitement from the public.

cooldeal• 14 years ago

>This is the first time they're past-tense, over and done with.

The sentiment on HN has been that for a while.

Except when it comes to UEFI secure boot on ARM devices.

Then it is all about how Microsoft is going to get a monopoly on tablets and stop other OSes from booting on them and thus must be restricted by legal means right now.

flyinRyan21• 14 years ago

The long tail. A drop in revenue isn't a sign that your company is dying or dead, it's a sign you're in the final stages of decomposition.

mgkimsal• 14 years ago

“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.”

Probably the best line from the article.

The point about stack ranking - good observation. I've heard about it for years from MS people as well as mini-MS and such. It struck me as problematic even back then. In one way it's "just another internal policy", but it's pretty obvious it's going to create internal competition, which is the last thing a company needs.

I remember around 2000 or so - when the DOJ trial was going on - the stuff coming out of MS was "we're the underdog - we see everyone as competition or potential competition" (paraphrasing, obviously). I don't know where that mindset went, but the last decade, they've not really acted like it.

Gosh, I'm not saying this well. They have acted like it, but haven't chosen their battles well, perhaps. Trying to compete in dozens and dozens of competitive landscapes at the same time has led to little focus. Yes, "Office and Windows" are cash cows, but the respect (and fear) for MS is largely gone - they've squandered their image playing "me too" catchup in too many fields, and they've got a long way to go to be the leader in any field that they once were.

At least one tech generation, probably more, never experienced MS as the big leader to be feared - back in the mid 90's, any conceptual startup had to consider "what if MS gets in to this market?". You had to be able to answer that question. I doubt that's a question anyone has asked themselves in at least 10 years, if not more. Replace MS with "Google" or "Apple" and that would instantly make sense to today's crop of startups. But if you said MS, no one would even take you seriously.

vessenes2• 14 years ago

I think the DOJ results had a big impact on that aggressive competitive spirit -- Microsoft sort of seemed to go into a quieter sort of ecosystem mode, where they used combined marketing launches and strategy to achieve the lock-in they had been just out and out dumping on consumers with technology.

I would say the brio left after the DOJ trial, but it may be back with Surface. If Surface sells, I would expect a new CEO and an invigorated Microsoft.

wcdolphin3• 14 years ago

Well, given how the DOJ treated MS, it is pretty clear that there was very little it could do in terms of integrating experiences without getting sued. Bundle a browser in your OS, get sued. Bundle a media player in your OS? Get sued. But Microsoft is in the middle of a huge culture shift, and it is doing things that are new, bold and targeted, unlike any company in the industry. Google is shooting blanks in every direction, hoping something won't just be a flash in the pan. Apple is cold and consistent, but given their record and how they treat developers, I would be surprised if they don't overplay their hand again. Amazon, on the other hand, is pretty awesome. Besides being a horrible company to work for, from all reports I have heard, they execute hard, fast and generally pretty well.

chris_wot4• 14 years ago

Tightly coupling products does not necessarily lead to greater innovation.

Apocryphon2• 14 years ago

Trying to compete in dozens and dozens of competitive landscapes at the same time has led to little focus.

Isn't this what happened to Sony in the '90s?

vessenes2• 14 years ago

This article has got it wrong; Sinofsky is remaking Microsoft. He is, of course, remaking it into an even more competitive, Apple-ish kind of place. But the market will reward him for doing that, and we as consumers will, too.

I think I'd rather have two Apples in the world, (although MS has a long way to go to do that) than two IBMs.

silverbax884• 14 years ago

Surely he's not responsible for that feeble Metro initiative, is he? That could be the end of Microsoft for real.

MichaelGG• 14 years ago

Actually, it's the non-feebleness that's annoying about Metro. If they only pushed it where it made sense, it'd really work well. WP7 interface is really slick. But, instead, they seem to want to make the entire desktop take on the Metro UI there, and it just looks horrible. I'm starting to use VS2012 (need the F# improvements), but wow it just makes me cringe.

joenathan• 14 years ago

I think Metro is wonderful, I've been running the consumer preview since release and now the release preview on my desktop, and I use metro apps quite frequently(I'm currently in love with the game Flow).

I'm also looking forward to replacing my Android tablet(Touhpad on ICS) with a Windows 8 tablet. In my mind Windows 8 presents the best concept for a tablet, a touch friendly UI for content consumption and casual gaming but also a fully featured OS when needed.

I think Microsoft is on to something especially with things like Smart Glass.

r00fus• 14 years ago

As long as Ballmer stays, Microsoft isn't going to move fast enough to respond to their existential threats - Google, Apple, Linux - and Windows.

drivebyacct22• 14 years ago

And yet there are plenty of people willing to say in the same sentence that Windows 8 goes too far and Microsoft is boring.

joeblau• 14 years ago

It's Vanity Fair...

chadzawistowski• 14 years ago

> “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.”

I was under the impression that Bill really admired IBM, and wanted to emulate them.

bgilroy26• 14 years ago

I think they're making a more specific, snide point about how Microsoft employees would watch IBM become less and less relevant for general consumers and think on some level that they were less vulnerable to the same fate.

In general, I'm sure you're right. Even today, IBM and Bell Labs still represent the majority of the private side of innovation in computing history.

lawtguy• 14 years ago

It wouldn't surprise me that Bill Gates admired the IBM of the 50's through 70's. They dominated the computer industry and did lots of amazing things.

The IBM the earned such derision from Microsoft was the IBM of the mid-80s and 90s. IBM steadily lost it dominance in computers (mainframes) to smaller computers (minicomputers and microcomputers). It seemed to be so mired in bureaucracy and their successful past that they couldn't do anything about it.

Microsoft of 2012 looks similar to IBM of 1982: their monopoly in computers (PCs) is threatened by smaller computers (smart phones and tablets). They are desperately trying to stay relevant, but are still stuck in their successful past (Windows) and can't abandon it. So as Mr. Hill said, it looks like they've become the thing that they hated so much.

silverbax884• 14 years ago

This is the most important sentence in the article. Because many companies over the years - a lot of them start ups - would point to this practice by Microsoft and try to follow their lead. Microsoft has been stack ranking almost since conception. It was always a horrible way to run a company. But it took decades for it to actually bring the company down.

jgrahamc• 14 years ago

Novell did something similar. They used to fire IIRC the 'bottom' 10% every year. This HBS article talks about the system: http://hbr.org/2001/05/leading-through-rough-times-an-interv... Interestingly, Eric Schmidt seems to have modified it a bit and seen that it wasn't working well.

"Incidentally, not all systemic changes work. I’ve also learned that certain management techniques can actually make things worse when applied to a distressed culture. For example, I had always worked in companies with yearly and quarterly employee ranking systems, in which people were divided into three groups: overperforming, performing, and underperforming. So not long after I came here, we started a ranking program that graded on a curve: 45% into the overperforming group, 50% into the performing group, and 5% into the underperforming group. I didn’t know—and certainly didn’t intend it this way—that if you got the lowest grade, it was presumed that you were about to be fired. We started getting hate mail from people who argued that there was no way to rank people who worked as a team. The ranking system exacerbated the culture of fear and proved to be such a huge retention and motivation issue that we were forced to stop it after a year. In its place, we introduced a modified ranking program that better reflected overall employee performance."

thaumasiotes• 14 years ago

It seems like one factor in that scheme that would imply you're going to fire "underperformer"s is that 95% of people can't be classified that way. The names are symmetric; why not something more like 20% - 60% - 20%?

The other factor would be that there's an idea (which I can't speak to personally) that the only purpose of performance evaluations is to protect the company in case a fired employee sues to reinstate their job, which would mean that an "underperforming" grade was a necessary prereq to firing.

rcthompson• 14 years ago

Firing the bottom 10% company-wide is quite different from firing the bottom 10% from each department, regardless of the performance of that department relative to others, which is closer to what the article describes for Microsoft. As the original article noted, being in a 10-person "unit" meant that 1 out of those ten was guaranteed a bad review, even if that unit as a whole somehow generated 50% of Microsoft's profits for the quarter.

iterationx• 14 years ago

That was an idea they (probably) stole from Jack Welsh. http://en.wikipedia.org/wiki/Vitality_curve

keithpeter• 14 years ago

In education we call this 'norm referencing'. The highest scoring 10% get A, the next 15% down get a B and so on. In the UK, people have moved to 'criterion referencing' so certain performance criteria are set and if you reach those, then you get that grade.

Would the second practice, given sensible and negotiated targets work better?

jonhendry3• 14 years ago

Seems like it could appear to work in a growing, young company with rising stock value. If someone is genuinely good, but gets stack-ranked out of your group, it's probably not as hard to move to another, possibly new group, when the firm is growing.

But when the company is mature, and the stock is flat, and the headcount is under pressure...

fiatpandas• 14 years ago

Valve uses stack ranking as well. Does Valve do anything different which makes them immune to the same company-ruining internal competition?

nkohari4• 14 years ago

It's probably not competition that causes stack ranking to be a bad idea -- it's the measures that determine the ranking. Valve's flat hierarchy probably means that you only need to earn the respect of your peers, not of a group of managers that determine the rankings. I could see a situation in which a truly engineering-driven culture combined with stack ranking would become a meritocracy that rewarded the best engineers.

jsolson• 14 years ago

(a) Valve does it company wide

(b) As I understood it, it is only used to determine comp adjustments

If you go into it with the view "We're all excellent people, and these people are the best of an excellent bunch, so they're getting the biggest raises this year", it seems like a reasonable system.

swombat3• 14 years ago

Both Accenture and UBS do the same thing. I never liked it, myself, for the reasons cited in the article. This type of performance system means it's far more important to be good at schmoozing than to be good at working.

podperson2• 14 years ago

I worked at Andersen Consulting (which is now Accenture) for long enough to be inside the banding process as well as subject to it and actually thought that the ranking system worked pretty well -- in a consulting company.

To begin with, it didn't work the way described in the article (does Microsoft's system actually work that way? if so -- ugh). There were five bands, and the "you get fired" band didn't generally get anyone assigned to it. Furthermore, the percentages in each band were somewhat flexible and applied across the organization, not to any one group of people. It was quite possible for an effective team to all be band 1 and 2. (But then, AC didn't really have fixed teams.)

Of the four non "you're fired" bands, 1 was excellent, 2 good, 3 adequate, 4 was improve or leave. (I don't think we were even required to assign any band 4s.)

But a consulting company is very different from a product company. A consulting company actually WANTS a large proportion of its workforce to leave within a certain time because ultimately it's a pyramid scheme. Only 10% of people who join get to associate partner (or whatever) level and you need to advance at a certain rate or you'll be ticked off, so you need to shed 90% of people before they've lasted X years or you're screwed.

A product company needs people with deep technical skills to hang around. It's one thing to use "up or out" to drive your sales force (and the upper echelons of a consulting company are salesmen) and quite another to do this to your deep technical people.

So it's a misapplication of a management theory and not an intrinsically bad management theory.

loeschg• 14 years ago

Coming up on my first performance review at Accenture. I'll see how flawed the system is in a few weeks ;).

The problem is with what the viable alternative is for companies that are huge like this. It's just tough. Maybe we all just need to stop worrying about how other humans measure our performance/value.

thereallurch• 14 years ago

IBM does something similar as well.

shahidhussain• 14 years ago

I believe GE does also. If these kind of companies are employing the same system with better results, would this imply that the theory behind stack ranking is not the problem?

mcphilip• 14 years ago

I was employed in a company that used something like stack ranking. It was brutal having to evaluate the dev team I was leading. There were a couple veteran developers that consistently did excellent work, but there was a rookie that was learning incredibly fast and producing very high quality work.

On a scale of 1-5, I felt all three of them were 4.5, but I couldn't submit scores like that because of stack ranking. The question then became whether to piss off one of the veterans or to discourage the rookie by giving a < 4 score.

itsboring2• 14 years ago

Yup, stack ranking effectively punishes good teams. Why should a manager strive to consistently hire the best people possible when some of them are going to have to be unfairly ranked?

hef19898• 14 years ago

Equally worse is giving points to your team based on the budget you have to increase salaries. A system I currently live under. the result is stack ranking stuck at the 70% part... Death to motivation if you ask me.

rhizome2• 14 years ago

This seems like a good place to mention the original stack-ranking critic, Mini-Microsoft (still going!):

http://minimsft.blogspot.com/2004/07/microsoft-stack-rank-as...

doktrin• 14 years ago

This is a fairly common practice across many relatively successful organizations. In addition to the other companies mentioned in this thread,I believe McKinsey consulting also takes a similar approach.

Granted, successful does not necessarily imply they are innovative. This management strategy may be more effective in more sedate and established industries where adhering to best practices may be more important than charting new courses.

If anything, this would seem to be a cautionary tale to tech startups that may be tempted to hastily implement traditional MBA'esque management styles. One size certainly does not fit all.

gavinlynch2• 14 years ago

They used this as the point for why Microsoft has fallen behind. The former developer says, "I was too concerned with appeasing my manager's when I should have been concerned with being a better engineer."

But really? Is that why Microsoft has fallen by the wayside (realtively)? Because they don't have good enough engineers?

I disagree. I think they have a wealth of talented engineers.

What they need(ed) are people with vision, a deep understanding of the future of consumer electronics and computing, and a way to execute on that vision. They need to deliver short, medium and long-term products that feed their vision. They need to show people the future of the industry instead of lagging behind it.

Engineering is a crucial component in that, but it's only part of the story IMHO.

frossie• 14 years ago

I disagree. I think they have a wealth of talented engineers. What they need(ed) are people with vision

Vision doesn't happen in a vacuum. It happens within the wider cultural context of the organisation. A technical lead, a project lead, a manager - they are all affected by the environment they are in. If you spend all your time fighting politics and trying to shore up demoralised engineers, you are not going to waste your time dreaming about ponies and rainbows.

If you want an analogy, you can take the world's greatest general, but if you drop him in a WW-I trench, he is just cannon fodder.

binarycheese• 14 years ago

"I disagree. I think they have a wealth of talented engineers."

That statement is false in many ways. As a developer, you keep seeing substandard products from Microsoft. Have you looked at the architecture of SharePoint? compare SqlServer CE to SQLite, not to mention the horrible tutorials and source code which Microsoft keeps putting out.

C#/.NET is an excellent platform/language but Microsoft keeps putting out horrible sub standard code/tutorials

jere• 14 years ago

I have to agree.

The article started with stack ranking, but clearly there were much bigger issues looming.

>“He didn’t like the user interface, because it didn’t look like Windows,” a programmer involved in the project recalls... “Windows was the god—everything had to work with Windows,” Stone tells Eichenwald. “Ideas 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.”

They could have been years ahead on phones, tablets, and e-readers. But instead they had a culture that tried to shoehorn a standard Windows experience into every device (I imagine for marketing reasons). They are only now getting over it a decade later, though it's probably more accurate to say they have the same philosophy but in reverse: shoehorn a mobile experience into the desktop in Windows 8.

What difference does it make if you have the greatest engineers in the world but management is blocking them at every turn?

joshu• 14 years ago

So when I was at Google, hiring was not done by the groups with the headcount. Instead they were hired centrally and then later dispatched. The reasoning for this is that for a manager, someone who is just good enough will generate utility and thus should be hired. The central hiring is supposed to enforce companywide higher levels.

I wonder if stack ranking is the same but for getting bad people to leave? Even a weak employee can be better than no employee for a manager...

anologwintermut• 14 years ago

I think most of the comments here are missing a key ( and in my opinion the most detrimental) effect of stack ranking at microsoft: it prevents talent from clustering around good projects (unless they are so good as to be exempted from it).

Because someone always ends up on the bottom, a fair number of devs don't want to end up on who already has a top quality dev. Worse yet, in order to keep good people, managers don't want / will promise not to bring in more good people. Thus there is an active incentive to recruit( at least internally) mediocre talent since a team needs to hire people to keep headcount and needs to pad the middle of it's stack ranking.

Yeah, in theory this shouldn't happen because the rankings for each team are merge and those on the bottom of a good team should come in above the bottom of a bad team. In practice that seems not to work because both ICs and managers seem to have the above philosophy.

helmut_hed• 14 years ago

The problem all these companies face is how to determine raises fairly. To do that, you can allow each manager to determine his employees' raises independently, which typically means the manager will exaggerate their performance, or you can devise some sort of system based on numerical reviews. But how do you create such a system? Every one I've ever heard of has been unfair and political in some way - but still probably less unfair and political than each manager picking numbers for their own team.

I'm trying to say this is a hard problem, and picking on the downsides of "stack ranking" is easy if you don't consider alternatives.

StacyC• 14 years ago

Microsoft’s strategy has, for a long time now, seemed to me to be one of pure reactivity. Look for what others are being successful with, then try to emulate it just well enough to turn a buck. A vision for the future? Someone else will take on the big risks and figure that out.

nkohari4• 14 years ago

This is pretty much the norm in large, entrenched companies like Microsoft. It's the reason why so much innovation comes largely from startups and small businesses.

RandallBrown2• 14 years ago

I am really hopeful for the future of Microsoft. They have the potential to do something really awesome with Windows 8/Windows Phone 8/Xbox.

We've been promised ubiquitous computing for years and Microsoft has finally developed a common platform that might make that possible. It's all going to be about execution. The things they've announced so far seem promising, but we'll have to wait and see if it actually works.

VikingCoder• 14 years ago

Microsoft has never wanted ubiquitous computing; they've wanted ubiquitous licenses of Microsoft operating systems and applications.

Even when they've tried to behave well, people don't trust them, because of this.

I think the single best thing Microsoft ever did was bail out Apple, so they didn't have to go bankrupt.

http://www.wired.com/thisdayintech/2009/08/dayintech_0806/

joering2• 14 years ago

Wow, thanks, I didn't know that.

Its kind of hard to swallow (but Jobs-ish character type, of course) to see Microsoft rescuing them, and years later seeing both Jobs and Gates sitting next to each other and Jobs bashing Gates like he's a dirt.

philwelch2• 14 years ago

Microsoft didn't "bail out" Apple--Apple by 1997 was solvent and profitable. The immediate cash flow problem was solved by Gil Amelio and Fred Anderson a year before. The truce between Apple and Microsoft had more to do with Apple focusing on the future and abandoning several frankly promising legal claims against Microsoft, including Microsoft's outright theft of the QuickTime source code. Promising to sell Microsoft Office for Mac was more important than the $150 million.

tomelders2• 14 years ago

Post rationalised nonsense. Microsoft's problem has always been, and always will be, that's it never had an original idea, it's never understood why it's doing the things it does. It got lucky with Windows which has always been a shoddy product. Microsoft is no different now to what it was when Windows launched.

Put simply, Microsoft isn't a very good company. It's a blip on what is at present a very short timeline.

nkohari4• 14 years ago

This is just ridiculous. Microsoft is a powerful company that has simply foundered, like many before it. They've just never been able to understand (at a corporate level) the changing forces of the software industry. They remain entrenched (perhaps rightfully so) in Windows, which firmly anchors them in the PC era.

Comparatively, Apple has embraced the post-PC era, and has reinvented themselves as a consumer electronics company. Remember that in the late 90s, Apple was trying to make it as a PC manufacturer as well, and only at the brink of failure were they able to recognize that they had to pivot. Microsoft still makes too much money via the PC-oriented Windows-based business model, so they haven't been forced to reinvent themselves.

Also, for the installed hardware base, Windows is and has always been the most consumer-friendly operating system on the market. It's certainly not perfect, and it might not suit power users, but it more than serves its purpose.

pseudonym• 14 years ago

>Also, for the installed hardware base, Windows is and has always been the most consumer-friendly operating system on the market. It's certainly not perfect, and it might not suit power users, but it more than serves its purpose.

I'm going to disagree with this on the base that "A generation has primarily grown up using it" does not necessarily means "consumer-friendly". Not to say that Mac or Linux or Plan9 or iOS whatever is objectively better (although I think iOS would give it a run for it's money, from personal anecdotes regarding computer-unsavvy people), but if you had a generation that grew up running primarily Mac at home, at school, and so forth you'd be calling that the consumer-friendly OS.

kabdib• 14 years ago

> that's it never had an original idea

And now I can ignore you.

tomelders2• 14 years ago

I shall reciprocate.

jejones3141• 14 years ago

IMHO, you missed by a bit; MS got lucky with MS-DOS.

brudgers2• 14 years ago

>"Today, a single Apple product—the iPhone—generates more revenue than all of Microsoft’s wares combined."

revenue != profit

And thus the article follows the canonical narrative: a dividend paying company's stock price looks different from that of one which is focused on accumulating cash; a B2B company oriented company doesn't inspire the same loyalty among consumers as a consumer electronics company; and a CEO who is the second largest shareholder (first is Gates) doesn't knee jerk from quarter to quarter to the delight of Wall Street analysts like a typical hired gun.

Of course the biggest cliche is that Microsoft has failed to innovate. This despite creating two new UX paradigms - the ribbon and Metro - not just implementing a PARC based UI on a touch screen;* or developing the .NET framework and the development of its associated tool chain; or things which few people in the tech press ever think about like Windows Server HPC.

*If capacitive touch screen development is seen as a great leap forward by Microsoft's competitors, where does that put Kinect?

jonhendry3• 14 years ago

revenue != profit

There are estimates that the iPhone business does generate more profit than Microsoft as a whole.

beagle33• 14 years ago

> Of course the biggest cliche is that Microsoft has failed to innovate. This despite creating two new UX paradigms - the ribbon and Metro - not just implementing a PARC based UI on a touch screen

"Innovation" != "Different Idea".

I'm sure some people like Ribbon or Metro, but I haven't met any; I've been looking for WP7 "in the wild", and over the last 6 months found exactly one.

Intel innovated with the Itanium - but that wasn't useful innovation.

> where does that put Kinect?

In the PrimeSense / 3DV innovation camp. Yes, MS did bring it to the masses. But they didn't get the thing working themselves - they licensed from one innovator, and bought (and closed down) the other, shutting everyone else out of that market for a while.

Personally, I think Metro and Ribbon are both from the same design school: They look beautiful when you look at someone else using them, but they actually get in the way when you're trying to get things done. I've spent an hour playing with a Metro based WP7 to see what it's about; I feel that their "throw all other tiles, then replace the one you pressed" wastes time. I know what I pressed - let me get there.

Timmy_C• 14 years ago

If you live in Seattle you'll see WP7 phones in the wild. They're all owned by Microsoft employees however.

krschultz• 14 years ago

I for one, really like the ribbon version of Excel and Word. I'm not as happy with ribbon PowerPoint. I don't use Outlook.

I work at a company with a large contingent of non-Windows users. (several thousand people on CATIA workstations, most have done little to zero MS Office work, most are fairly internet/computer illiterate). Ribbon based Office works very well for them. They weren't proficient at the old office and the ribbon is a lot more approachable.

The same goes for my parents. They can get a lot more done in the new office vs the old office.

I think most of the negative opinions on ribbon come from people that were good with the old interface. The transition to the ribbon was all pain with no pay off. But for those that couldn't navigate the old office (many people), the ribbon makes finding functionality a lot easier.

Your point about licensing vs inventing a lot of the technology is fairly moot, Apple licensed a bunch of the multi-touch technology from various inventors (including the university I went to).

philwelch2• 14 years ago

Two points:

* The difference between Macintosh 1984 and the Alto is bigger than the difference between before and after Ribbon. The difference between Macintosh 1984 and Macintosh 2012 even more so, to say nothing of the gap between Macintosh and iOS. Microsoft almost always followed Apple's lead in UI design though.

* Kinect is a game controller. There's no Kinect UI paradigm yet, certainly not the way multitouch is a UI paradigm over capacitive touchscreens. Again, the gap between mouse and Macintosh is at least as big as the gap between capacitive touchscreen and iPhone.

brudgers2• 14 years ago

I had a Handspring Visor with Spring Board a decade ago. There's not as much difference in the UX between my wife's iPhone and it, as there is between Word 2003 and Word 2007.

That's not say that there aren't a lot of things that one can do much more quickly with the iPhone (e.g. maps and surfing the web), or that these don't tend to make it more useful...though I don't find the touch keyboards quite as fluid for writing as Graffiti under Palm OS (hardware phone keyboards being another matter).

bergie2• 14 years ago

We've done some attempts at connecting Kinect with more traditional UI paradigms, like drag-and-drop: http://bergie.iki.fi/blog/qt-air-cursor/

potatolicious2• 14 years ago

> "where does that put Kinect?"

The same place as Siri - interesting technology, bad execution, with lack of competent follow-through, becoming a mild laughingstock of their respective fields, and causing users to be mildly embarrassed that they believed all the hype.

jonhendry3• 14 years ago

I think Kinect is a bit better than Siri in that respect, because at least people made interesting hacks with Kinect.

runako2• 14 years ago

>> revenue != profit

The comparison you cited is between revenue, and is a fair direct comparison.

But it is likely also true that iOS devices generate more profit than Microsoft's total revenue (this is an unfair comparison, biased in Microsoft's favor).

>> a dividend paying company's stock price looks different from that of one which is focused on accumulating cash

Both AAPL and MSFT have announced dividends (http://investor.apple.com/faq.cfm).

flyinRyan21• 14 years ago

> the ribbon and Metro

When people talk about innovation I think they often mean disruption. The day the iPad came out everyone changed what they were doing (except MS). A light switched flipped and Tablets became something totally different than what they were before. Who has copied ribbon? Lots of people don't even think it's a good idea. Metro is too early to tell.

>or developing the .NET framework and the development of its associated tool chain

You mean a VM... like Java?

>If capacitive touch screen development is seen as a great leap forward by Microsoft's competitors, where does that put Kinect?

You mean that product that MS bought?

wmeredith• 14 years ago

"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.”

HOLY SHIT that sounds like a bad idea! Who in the world would think that's a good idea. That's crazy.

trimbo• 14 years ago

> Who in the world would think that's a good idea.

Jack Welch, AFAIK. http://en.wikipedia.org/wiki/Vitality_curve

tomjen34• 14 years ago

Given that it is a disaster in a tech company, but would work okay in the production floor of a paper mill, I guess some MBA.

I really wish somebody would teach MBAs for 21 century businesses. They would properly be useful.

gaius• 14 years ago

Business "education" hasn't really advanced beyond Taylorism.

127001brewer• 14 years ago

I think "MBAs" are used as a "strawman" far too often (probably because I'm biased as someone who has an MBA and since I've been developing for over ten (10) years). Bad "business decisions" can be made by anyone.

Overall, it really doesn't matter who implemented this policy.

potatolicious2• 14 years ago

> "Who in the world would think that's a good idea."

Someone who manages a bunch of lazy good-for-nothings who, if left to their own devices, will sit around and do nothing all day every day.

These environments actually exist - but in the R&D and creative arenas, if you are in possession of such a working environment, you've already lost, and no amount of management "science" will save you.

Steko2• 14 years ago

Ballmer's a sales guy and the system is probably outstanding in a sales environment where individual effort is both more important and easier to measure.

wcdolphin3• 14 years ago

The way they describe stack ranking is fundamentally wrong. Currently Windows is in calibration, where we stack rank and reward behaviors that are positive for the company. This is not done on a per team basis, but on a whole organization basis. Everyone at a given level is ranked against everyone at the same level, with the goal that those who do well will be rewarded-- not only monetarily but also in terms of their position within the company. This starts at the team level, where managers push for their reports and ICs to be recognized for their successes, and it follows all the way up the chain and across the company.

Stack ranking is not simply based on what you accomplished, but also how you did it. There are three main pillars: what you did, how you did it and how you showed growth during the timeframe/milestone.

There is no perfect system, but to be frank, the calibration and review system is pretty damn fair and consistent.

drivebyacct22• 14 years ago

It sure is interesting to watch armchair HN give commentary on things they only have second-hand knowledge of, especially when your team just went through calibration 4 days ago and you got an inside look on how not-big-a-deal it was.

sukuriant• 14 years ago

Is this your first calibration? How long have you been working at this company? The second year is much more stressful than the first. At least it was, to me.

MSFT Employee

smackfu3• 14 years ago

Doesn't that seem like spending an awful lot of time and effort on something completely internal?

DaveMebs• 14 years ago

Yeah, it's probably not worth the time investment to make sure employees are rewarded for their work in an equitable manner. If they can't sell it, why bother?

RandallBrown2• 14 years ago

Why rank the employees at all though? What good does it do to tell someone that they're worse than everyone else?

It is to your advantage to make your coworkers look bad, and that sucks. Thankfully, people are generally pretty good and don't do this too much, but I can see it creating a very toxic work environment.

wcdolphin3• 14 years ago

Ranking employees and rewarding behavior allows a company to form a culture. What actions are rewarded? What actions are not? For example, if someone delivers well, but is an asshole in the process, do they get rewarded? If they do, then that is the behavior that will be emulated and replicated throughout the company, as that is the behavior that is encouraged. If someone does a good job, delivering for their team, working well with our organizations and providing insight and value to many different projects, and this is rewarded, then this is emulated. It is classic behavioral psychology.

It isn't in your advantage to make your coworkers look bad, it is in your favor to make them look great, because they review you! You can ask different people for feedback and reviews, provdiding a great opportunity for growth. I have to agree with you in that it could create a toxic work environment, but I don't see that happening, and there doesn't seem to be much stress or strain around the process. Sure, there are worries, receiving feedback both negative and positive is not comfortable by any means, but the fundamental purpose is for everyone to get better, do better, and to have people rewarded for doing well!

spaghetti7• 14 years ago

I'm assuming you're just naive and lack the experience to see through this BS. This type of system can be gamed 'til the cows come home! Here are some corrections to your description:

Currently Windows is in calibration, where we stack rank and reward behaviors that can easily be sold to one's boss. This is not done on a team basis, an organizational basis or really any rational basis at all. Everyone at a given level competes with everyone else at the same level for the next level of management's affection. Those who kiss ass up and trash talk their co-workers/competitors are rewarded in various ways. Usually with an ego boost but occasionally with a monetary reward.

Stack ranking is not based on what you accomplished at all rather how your managers perceive what you accomplished. There are three main pillars: how close you are to your manager, how effectively you can trash-talk any competing co-workers and how you helped your manager sell your accomplishments to his or her boss.

There is no perfect system, but to be frank, the calibration and review system rewards people more for their political skills than technological merits and therefore is pretty damn good practice for a career in playing corporate politics and approval seeking behavior in general.

saintgimp• 14 years ago

Really? You must be on a rare and exceptional org, then. I left Microsoft because the stack rank system most often worked exactly as described in the article and it was just as corrosive as they described. (I’m making more money and having way more fun now, too.)

In my extensive experience as both an IC and a lead at Microsoft the curve is enforced down to at least the dev manager level (i.e. teams of 20-30 people). A manager with 20+ people often ends up having to pick two sacrificial victims to receive a punitive review score (i.e. a 5 in the current system) even if everyone’s performing well. This causes all kinds of unintended side-effects and has absolutely rotted the company from the inside out.

I understand that the idea is to keep everyone on their toes and encourage them to keep pushing. It might even work ok if there were some fool-proof way to guarantee that everyone always got evaluated on their actual product work, but engineers are smart people and they usually figure out that it’s easier and faster to optimize for networking/schmoozing/backstabbing than it is to merely do brilliant engineering.

If a low review score was just a momentary, “better luck next time” sort of thing then it still might work ok but a low review score is a terribly punitive thing. You get no raise/bonus/stock, you’re not allowed to interview with other teams, and you’re in serious danger of being fired. It drastically affects your career prospects for the next several years. If that happens to you, it’s not worth sticking around. Because a low review score is so punitive, people are highly motivated to do anything possible to avoid it. The most efficient and effective means of avoid it is often not to spend time doing great engineering, but rather to spend time on non-engineering tasks that “increase your visibility”, or doing things that make everyone else look bad. Some people are quite good at doing that and they tend to be rewarded for it.

Sometimes low review scores are handed out to people who deserve them but often they go to people who just got caught at the wrong end of the political network. Being “the new guy” on a team as a result of a reorg is one of the most hazardous places to be at Microsoft. If a manager needs to dump a low review score on someone, he’s going to choose the most expendable (i.e. least well-known and well-connected) person. The point is that you can easily end up with a low review score through absolutely no fault of your own, then your career at Microsoft is screwed. That kind of chronic stress and fear shapes the company and has made it what it is today.

Granted, not every team at Microsoft is completely disfunctional, but enough of them are that the company tends to bleed great engineers and visionaries. The proof is in the stock price.

akkartik• 14 years ago

Google also stack-ranks.

tomjen34• 14 years ago

WTF. You would expect Google to create a better way to solve that problem.

jacobquick• 14 years ago

It doesn't have a standard implementation, each company kind of makes it up as it goes. Google's is different from Microsoft's, though it's prone to the same issues on a smaller basis.

kin• 14 years ago

Reminds me of the article a short while ago about the startup culture of the Bing team that lost its momentum because Microsoft tossed a bunch of managers and PM's at it. Or rather, Microsoft crippled Bing with bureaucracy.

rlu• 14 years ago

Plain and simple this article seems like it was written 3-5 years ago. With the recent things Microsoft has been coming out with (Kinect, WP7, WP8, Win8, Surface, New xbox, etc.) that has generated genuine interest...are we really saying that this company is dead?

Some good points are made in this article, but it gives off a strong vibe of bitter employees who got bad reviews.

Also:

>"Today, a single Apple product—the iPhone—generates more revenue than all of Microsoft’s wares combined."

uh, maybe but revenue != profit. I like the closing on this post: http://dcurt.is/steve-ballmers-microsoft

"we should not forget this very consistently true fact: Microsoft makes around $5.5 billion every three months. In pure profit."

mrdodge• 14 years ago

Last quarter Apple made $11.6 billion. In pure profit.

Apple's margins are actually better than Microsoft's.

This is an incredible change of events. For the first time in ages Microsoft's primary competitors are far richer or just as rich. The competition are also now more talented and arguably better run. Microsoft cannot afford to act as if nothing has changed.

grandalf5• 14 years ago

Stack ranking is equivalent to having a finite bonus pool, or having Gold, Silver and Bronze in the Olympics. Yeah the 4th place finisher is an amazing athlete, but there are only three medals.

Suppose you are a manager who manages 5 employees. If you have $100K to give out as bonuses, you could just divide it up equally. Over time employees would come to expect to get their bonus and it would cease to be a motivator.

While stack ranking imposes a bit of an assumption about the distribution of effort/merit on a team, it's also intended to foster spirited competition for the top spots, much like the medal system used in the olympics.

If you are managing a meritocracy and the rules of the game are known, nobody will begrudge someone else getting a bigger bonus. Many workers idealize working on a team where they are not the strongest, so that they can learn from others.

The point is that it's not just about rewarding people, its about rewarding people for the kind of significant contributions to the team that make a business difference. If managers are letting it get political and it turns into a BS metric, then that's evidence of a larger management problem than a problem with the particular distribution of bonuses entailed by the program.

One could argue that any bonus that is uncertain has the potential to alienate the employee if it is not earned. The converse would be to give all employees motivational bonuses, or, in other words, not to give bonuses but to rename some of the guaranteed compensation "bonus" when it's actually just salary.

If a corporate culture is so backward that the genius in the next cube getting a bonus is viewed as a bad thing, then it's probably time to think about how/why bonuses (or the equivalent) are given in a smaller business where the bonus comes in the form of options being worth something, etc.

tomjen34• 14 years ago

Are you a manager?

If so you need to keep these two points in mind:

1) The reason the oplympics works is that you can rank people accurately down to within miliseconds. And peoples success doesn't depend on others help.

2) If the bonus pool is fixed, you can give everybody the same one year if that makes sense given the input and one year you can give something to one guy and more to the rest. You can't do that with a fixed band system. That is its key flaw.

it• 14 years ago

Also, if you are working on a team then the incentives should be based on team performance, not individual performance. You get what you reward.

grandalf5• 14 years ago

Well if the manager can't define a system that everyone buys into for measuring results, there is a problem. Ultimately it's going to be a judgement call to some extent.

The bands are just there to force the manager to avoid adding noise to the signal. If she has to follow the rule and allocate bonuses w/in the bands, she doesn't have to be the bad guy.

huggyface• 14 years ago

1) The reason the Olympics works is that you can rank people accurately down to within miliseconds

Aside from things like diving, ice dancing and synchronized swimming, though supporting your statement those activities are absolutely loaded with controversy because the subjective nature -- as opposed to the objective reality of a stopwatch -- leads to endless differences of opinion.

Ranking makes sense if you have objective measures. In this industry there are staggeringly few, especially for large internal teams working on parts of a whole. Everyone has agendas and imperfect knowledge, everyone has bias and self-serving judgments.

shin_lao• 14 years ago

"The whole is greater than the sum of the parts"

The system you describe might improve individual performance to the detriment of the company's performance.

You don't need competition within a team, you need cooperation toward a common goal.

kamaal6• 14 years ago

>>Stack ranking is equivalent to having a finite bonus pool, or having Gold, Silver and Bronze in the Olympics. Yeah the 4th place finisher is an amazing athlete, but there are only three medals.

Aha! That explains why this at most works for individuals and not for teams.

And all the best doing big things without successful teams.

redcircle• 14 years ago

Balmer and the other managers aren't the only ones at fault for bad bureaucracy --- the employees that live with the system against their better judgement, rather than leave or fight, are also responsible.

marshray2• 14 years ago

A lot of people have left. But I imagine it would be hard to leave if you have a mortgage in a high-priced suburb that's flat or dropping in price.

gfodor• 14 years ago

The reason Microsoft has gone down the tubes, to paraphrase Steve Jobs, is they have no taste.

nirvana5• 14 years ago

As someone who has seen stack ranking in action at Amazon and Microsoft both, this is an excellent interview question at any company you consider, especially one founded by ex-Amazon or ex-Microsoft employees. Do you use stack ranking? If the answer is yes then you know they aren't performance based.

Microsoft and Amazon both seem to think it is "scientific". It isn't really scientific when, in advance, you decide that %10 should be on a firing track, %70 should be warned and %20 should be promoted-- without regard to actual performance.

Bezos likes to run around claiming he only hires "A players", but what it ended up being was C & D[1] players who didn't know how to program or understand technology, ranking their teams, almost completely based on office politics[2] and ones ability to hype their work, rather than the actual technical quality of the work. Of course generalizations like this will have exceptions and I knew some groups who were lead by software developers who got promoted, and the AWS group seemed to be insulated from the amazon culture. But HR and Management at Amazon.com were absolutely atrocious. And that's in comparison to Microsoft (where I also worked) where this "metrics" religion was completely accepted as well.

If you're a talented engineer, work for a startup, but if you need a big company and you're in the northwest, pick Microsoft before you pick Amazon. (Maybe google is better than both, but I've not worked there.)

Edit to add:

In fairness I can compare myself to gates. I saw the Kindle at Amazon about a year(?) before it was announced and wanted to kill it on the spot. (not that I had any say in the matter) I thought it looked like it was designed in the USSR. Still do, but bad design can still make for a good product financially (and it has gotten better.)

[1] I'm being generous here. My boss and my bosses's boss and all the HR people I'd give an F. Absolutely the most incompetent people I've worked with in 20 years of mostly working with startups where even really competent people have to struggle with immense difficulties and uncertainty, neither of which was present at Amazon, except to the extent created by incompetence, though this incompetence went all the way to the top. I saw other people leading other teams who were C & D players, so I presume my team was just particularly bad.

[2] (Talking about amazon here, saw much less of this at MSFT. MSFT was more misguided than... evil.) In order of decreasing effectiveness: Kissing Bezos's ass, Kissing your manager's bosses ass, kissing your manager's ass, kissing your manager's peers ass, making up initiatives that sounded really effective, even if they had no actual effect and then propagandizing them around the company, sabotaging your co-workers products, knifing your co-workers in the back verbally, deliberately mistranslating instructions from your boss to others in the team, hyping yourself with other teams, conspiring with others at other teams, and just generally lying. I saw all of this occur. If I'm bitter it is because I was not smart enough to accept that this was the companies culture, and I gave them way too much benefit of the doubt. I should have left immediately after they broke a hiring promise to me (in the first month.)

spaghetti7• 14 years ago

Ouch! Your list in [2] is sad but true from my experiences at big co. Any thoughts on how to prevent company culture from degrading to this extent?

nirvana5• 14 years ago

Oh, do I have thoughts, let me tell you! Seriously, though, I am a firm believer[1] that company culture comes from the top. This seems consistent with the personalities for both Gates and Bezos in that they are competitive people. They know it is difficult to compare people across disciplines, so they punt on the problem and just make it a contest. I think they probably figure that if everyone is fighting to get the best kudos because there is a financial incentive, that some productivity that actually goes to the bottom line will result as well... and that the highly political and conflict oriented culture that results is less a detriment than having unmotivated people. Plus I think they believe that a highly political and conflict oriented culture is the best for finding the right, best answers because "obviously" the best choices will be taken, rather than the compromise that reaches the most popularity- or that compromise is possibly the definition of "best" in their view.

The thing is, they may well be right. I believe that Apple (whom I've never worked for) does things differently. For instance, individual departments don't have profit and loss statements, the whole company does. The product focus "religion" seems to have started with Wozniak and Jobs - both of whom helped form the company culture- and was hugely re-enforced by the traumatic experience of the 1990s and the lesson taught by their comeback. (But for all I know at the individual level they may also be stack ranking.) At Apple there's a third party to the table- designers- and they seem to be the ones with the upper hand in calling shots. Since everyone recognizes and respects the need for design at apple-- this being part of their culture- this may ultimately make Apple employees more focused on the product. But I'm going here on what I've read about the company, I don't have inside info.

Microsoft wants to protect their windows and office business, above all else. All competition is seen in light of "is this threatening windows?" But at the same time you have that drive "to increase visibility outside your team."

Amazon wants to just throw things at the wall and see what sticks. One of the ways to get visibility in Amazon (and thus a high stack rank) is to come up with something to throw at the wall... during it's flight and while it is still in contact with the wall, you do well and get promoted, and by the time it starts to slide down the wall and crash and burn (e.g.: A9, amazon catalogs, amazon menus, etc.) you've parachuted out to a nice well funded startup where you are a "big name". (EG OCP Corp from Robocop but with parachutes.) If you get lucky it actually sticks (e.g.: AWS) and then you have a license to throw things at the wall at will.

Apple on the other hand focuses on only a few things, and focuses on the customer experience and focuses on being super capital efficient, to the detriment of employees in the sense that they seem to have very high burnout (a lot is accomplished by a few, but the stress is immense.) But I think the inclusion or deference to design is the key advantage for them.

It would be interesting to know the dirt on what it is like to work for Google, as they seem to have at least tried to take a completely different approach, but everyone I know who has worked there hasn't remained there more than a couple years. So, I don't know what's going on there.

[1] though I can't empirically prove

dr423• 14 years ago

The USSR doesn't exist anymore, and this slur on Russians is a little disingenuous, they did, for example manage to get the first man and first woman into space before anyone else.

Talented engineers don't only work at startups, most of the really interesting work isn't done by little companies, they just don't have the budgets to do much more than mashups of existing technology, it's big corps with deep pockets that do the really hard core CS.

DavidAdams• 14 years ago

Saying that something has a "Soviet" design aesthetic isn't a slur against Russia or Russians. Maybe it's an unfair characterization, but goods from the USSR era have a reputation for being utilitarian, and even "severe" in their design. In contrast with many contemporary consumer products, for example, which often stress form over function.

minimax• 14 years ago

> most of the really interesting work isn't done by little companies

What a ridiculous thing to say. Remember Google when it was small? Two guys came up with better web search algorithms than all their deep-pocketed competition. Look at what Arista and Gnodal are doing in the LAN switching space. Hell, look at basically all of Cisco's new technology offerings for the past 10 years. They're all based on technology Cisco acquired via acquisitions of small companies. In aerospace look at Scaled Composites and SpaceX.

New technology comes from small companies, not big ones.

rdtsc2• 14 years ago

A Soviet design aesthetic, in my opinion (and I lived in and used products from that time), is a pathological design aesthetic in a planned economy where there is no functioning feedback loop from the consumer to the designer.

It leads to un-appealing design, that consumers don't like. Products are bought simply because there is not alternative (say as a consumer, you really hate the spoons and forks they have at the store, but they only make one model, so you buy what they have or you don't have anything to eat with).

Designers sort of work and train a vacuum. Products (and thus design decisions) never compete and never pass consumer acceptance and feedback. For example, I remember really funky looking cassette tape players, they were ugly and broke a lot. I remember TVs that looked crappy compared to the Western models. It isn't that they didn't work, they did, but their looks and the overall aesthetic was ugly. Cars (all 5 types of them) were ugly compared to Western cars.

I suppose a designer got a job at one of the state owned factories. That factory was told to produce x number of widgets. The designer got to work, showed the prototype to some people in the bureaucratic chain of command, and then x widgets were made and put on the shelves. That designer probably never got to hear how much their work sucked. They just got another order and so it went on and on.

InclinedPlane4• 14 years ago

This was my experience as well. Working at MS, I wanted to leave after a few years because it was becoming obvious that the company was getting worse and worse over time. Working at Amazon, I wanted to leave after a few weeks, it felt like I had to gnaw my leg off to get out of that trap. I ended up leaving mid 5 figures in bonuses and non-vested stock on the table when I left after only a year.

I really like amazon from the outside, but their internal business culture in the development teams is just poison.

AndyKelley• 14 years ago

I had a similar experience at Amazon.

I saw D players give B players scathing interview comments. It almost sounded more like they were scared of being replaced than actually evaluating the candidate.

I watched a teammate get promoted while I was putting out fires for and barely managing to keep running their horribly designed, over-complicated Java service, which really just needed to do CRUD.

I lasted 2 months before I started interviewing elsewhere, but I made it out in 8 months. I happily paid back the signing bonus and gave up the non-vested stock.

Florin_Andrei• 14 years ago

Now, as an outsider, I'd say AWS and the Amazon web store actually work pretty darn well. I've had some issues with orders (not Amazon's fault), the whole thing was handled pretty well. I could also see the infrastructure behind it all chugging along, it seemed well thought out.

nirvana5• 14 years ago

Have you noticed that AWS has regular, significant outages? The web store does as well. The thing is, most of them don't affect the whole store or all customers. Amazon covers for a lot of this with superb customer service (provided you're willing to do it online.)

TL;DR: At the end of writing this I realized I was burying my lead. Since the only way to advance at amazon is to create new stuff, and teams are constantly reformed in the chaos, there are often nobody left to keep past efforts running and things just break down. So at best someone is avoiding the pain of getting yelled at in the weekly site outages, while also being yelled at because they have to constantly churn out new features, all the time.

AWS has some really good solid engineering work in it, no question.

But Amazon is compromised operationally by their completely chaotic engineering practices, which are a result of the political culture and C people in management. (Another person said they knew good team managers, and I am sure this is true in other teams, I just had a bad batch.... but I think as you go up the chain the quality goes down.)

Thus you have people who are between the Sr. Manager and VP level who don't understand technology and are not making decisions based on uptime. Uptime is "important" and thus teams who get blamed for downtime (not always accurately) get pressure on them... but there is a significant lack of anyone empowered to architecturally build a stable system.

They're still using code from the 1990s, and I periodically go to the site and test a couple regression cases I'm aware of that were bugs that were fixed. They've become unfixed in the intervening years, in fact, it appears that the team I left (which had lost %60 of its members at that point, for the same reason I left) was probably disbanded and there simply is nobody in the company who is charged with making sure that this stuff works... or its a responsibility of a team that is forced to spend almost all of its time putting in new features.

msg2• 14 years ago

I've been an engineer at Amazon for some years.

I started in a worse-off team, but I moved to one since that succeeds and is insulated from politics. We're on the margin of the dependency graph and own our whole stack from pageview to database. We also have end-user customers, which gives us a North Star that seems to help.

Without denying any of your experience, there are many Amazons inside this big umbrella. Probably hundreds of autonomous (more or less) teams. The good and bad about working at a place like this are not evenly distributed. From what I've seen, when it's bad, it's really bad. But it can be good too.

My advice to job seekers would be: get some inside scoop on the right/wrong teams to join. Failing a person you can talk to, ask about the level of pager activity and how independent your team is. With high visibility and high rewards come high pressure. It was wrong for me and it could be wrong for you too.

nirvana5• 14 years ago

I'm suer you're right. I can only speak from my team[1] up the chain to Bezos, all of whom at that time I personally witnessed making really stupid decisions. (EG Bezos deciding not to fix a bug 2 months before Thanksgiving then the day before thanksgiving he decides it needs to be fixed right then, at 3am.)

I did find a better team within Amazon. I had an offer from one of the groups in AWS to do something right up my alley. It was basically a dream job. My manager blocked it. I appealed to HR and they simply ignored the "rules" (as they are in the handbook) and wouldn't let me leave.

So, one of the things-- the claim that you can go to another team if your manager doesn't perform-- turned out not to be true.

Rather than stay with a company that wasn't keeping its promises, I left. So, I can't speak to other teams. [2]

[1] Though 3 of the sibling teams at the same level, who reported to my bosses boss, were also run by bad guys, which cut off most of the obvious lateral transfers.

[2] It is possible things have improved, as it has been more than 3 years.

InclinedPlane4• 14 years ago

I have a friend who worked at Amazon Fresh and enjoyed it, and I hear AWS is good. Amazon has some really neat technology and an awesome business, it's a shame that so much of the company is broken.

edster2• 14 years ago

The stack ranking system is really known as the "GE Way" and is one of the reasons Jack Welsh is famous and made a ton of money selling management books.

IBM also employed the 20/70/10% concept to employee reviews in the 90s.

whyleyc• 14 years ago

From personal experience they still do to this day.

jasomill4• 14 years ago

Sure, but there seems to be a difference between divesting of a conglomerate's lowest performing business units, lavishing on the highest-performing ones, and putting the rest on notice, and applying a similar system to a small team. The latter reminds me less of Welch than of Glengarry Glen Ross: "First prize is a Cadillac Eldorado. Second prize is a set of steak knives. Third prize is you're fired."

For anyone who hasn't seen the movie: it doesn't end well.

With respect to employees, the point of a "forcing function" has less to do with motivation than with finding some way to make change possible in a crumbling organization of fiefdoms whose managers insist that, nevertheless, "all my children are above average." If I recall correctly, Welch even points out that "C" players often go on to be "B" or even "A" players in other organizations, which doesn't change the fact that everyone can't be doing everything right when the overall organization is underperforming, so there are either weak spots, or no alternatives to immediate liquidation.

Finally, I'm quite confident Welch would agree that "blindly applying a vague principle you read in some book, then sticking with it for years because 'it worked for $MEGACORP'" is a stupid idea, regardless of who wrote the damn book!

mrvir• 14 years ago

Remember reading that Enron was also one sad example of stack ranking system.

specialist• 14 years ago

Thanks for the cite.

I couldn't imagine anything worse that the Stalinistic "360 degree" reviews I've experienced. I was wrong.

flyinRyan21• 14 years ago

Both of these places sound like Walmart. Kevin Turner used to be CIO of Walmart and I think he introduced stack ranking there.

danielpal• 14 years ago

This is absurd. I worked at Microsoft and blaming everything on Stack Ranking is very shortsighted.

This is the kind of things reporters do. There are many bigger issues with Microsoft than stack ranking.

How about the company focused on Desktop computing for far too long and missed the web, cloud and mobile? This has nothing to do with reviews or HR, and everything to do with lack of vision and innovation. They thought Windows would remain relevant forever.

powertower• 14 years ago

> and Cannibalistic Culture That Felled a Tech Giant

Someone forgot to show him Microsoft revenue numbers for the last decade.

flyinRyan21• 14 years ago

You mean the long tail? Someone should show you RIM's revenue numbers for the last decade.

balloot2• 14 years ago

The problem I have with stack ranking, and one that I would think engineering companies like MSFT and AMZN would share, is that it is just bad science.

I can get on board with the idea that it is good to drop the bottom 10% of the company on a regular basis. But they're essentially taking very small sample sizes (individual teams), and assuming their distribution matches that of the entire company.

Or to put it another way, let's say you ranked every employee in the company 1-40,000 or whatever. You are trying to drop employees 36,001-40,000. An absolutely awful way to make that happen would be to create 4000 small groups of 10 people and then drop the bottom person from each group. Anybody who's even somewhat proficient in stats can tell you that this setup will yield results WAY off the mark. You could even quantify it with some simple analysis, and though I don't have time to do so, I'm sure the results would be horrifying.

And that's assuming a totally random distribution of people, which isn't true, and totally ignoring psychological effects of such a system. But at the very least, stack ranking is just bad science, and that should matter to these companies.

grandalf5• 14 years ago

The idea is to create specific psychological effects.

Suppose that of the three attributes motivation, initiative, and talent two of them are very much within the control of the employee and the other less so.

The goal of the incentive is to make the employee want to maximize all three rather than doing other things (such as wasting time, etc.).

Imagine the slow, cynical organizations that give everyone a 5% bonus year in and year out no matter what. Just show up, put in your 9 to 5, and collect your bonus.

Bonus/incentive programs are intended to create more of a dynamic. Yes it's more stressful but the idea is that it's worth it.

balloot2• 14 years ago

But the motivation given is to beat the people around you. Which in many cases does not help the company as a whole. It also puts a damper on team coordination.

Nobody here is suggesting a total lack of merit pay. We're just saying that it is awful to assume that in any small group in an organization there is always someone who deserves to be fired, and someone who deserves a big bump, etc.

yuhong4• 14 years ago

An alternative to stack ranking: http://news.ycombinator.com/item?id=4043188

jusben1369• 14 years ago

Microsoft's downfall? Downfall?

They initially missed the "Internet" and watched Netscape become huge and threatening. They initially missed gaming. Enter Xbox (which now actually also seems like the best VendorTV offering on the market vs lightweight and talk by the other guys)

They initially missed mobile and tablets. Hmmmmm. Now Windows 8 is right around the corner and CIO's are going to be enticed to have support just one OS across all devices.

The Miami Heat were down a couple of games in each series during the playoffs and had their end predicted more than once. I guess if you reject the premise what do you do with the details of the article?

posteditdelete• 14 years ago

Well, if HP wasn't going to use their MovingBrands rebrand, Microsoft might as well steal it.

cletus• 14 years ago

I suspect many of the people reading HN these days aren't old enough to remember the "golden age" of Microsoft (or simply of "of age" at the time). Back in the 80s and 90s Microsoft was an unstoppable behemoth that people would describe as a battleship that could turn on a dime (IIRC this referred to Microsoft reinventing itself in the mid-90s so that everything was about the Internet).

Three things happened to Microsoft (IMHO):

1. The DoJ suit in 1997 was a serious blow to Microsoft inertia. Speaking as nothing more than an observer, it seemed that Gates lost his way. He simply didn't know what to do. From this I get the distinct impression he really believed Microsoft wasn't doing anything wrong and things like bundling a browser with the OS were just "innovations";

2. Microsoft became too hierarchical combined with more B and C managers. Once you don't have A managers in a software (or any tech) business it seems like it's all over. Nothing rots from within so deeply and completely as poor management; and

3. Ballmer had and has no business being CEO of a software business. This isn't simply due to him being a manager rather than an engineer but that certainly doesn't help. Gates was a programmer and actively participated in tech reviews in his heyday. Ballmer is the Carol Bartz of Microsoft. It's simply taking longer to kill Microsoft from within than it took Yahoo.

As far as stack ranking and these other things go: on the face of it I consider them symptoms rather than the root problem. The root problems are:

1. Microsoft, as an organization, is deathly afraid something will kill the Windows/Office golden goose;

2. Everything Microsoft does is done from the perspective of furthering the Windows/Office cash cow. It's why you hear Ballmer describe tablets as "just another PC form factor". He sees them as simply a means to an end and that end is selling licenses;

3. Microsoft is at the mercy of hardware OEMs that are shortsighted enough to run themselves into the ground taking Microsoft with them;

4. There doesn't seem to be any central strategy (beyond sell more Windows/Office licenses) or innovation; and

5. The "backwards compatibility" crowd lost out to the "breaking changes" crowd, which hastened the switch to Web-based applications.

wallflower• 14 years ago

> Gates was a programmer and actively participated in tech reviews in his heyday.

If you need proof of Gates' technical genius, I recommend Joel Spolsky's "My First BillG Review"

> Then I sat down to write the Excel Basic spec, a huge document that grew to hundreds of pages. I think it was 500 pages by the time it was done...

In those days we used to have these things called BillG reviews. Basically every major important feature got reviewed by Bill Gates...

Considering that we only got him the spec about 24 hours earlier, he must have read it the night before...

He was flipping through the spec! [Calm down, what are you a little girl?]

... and THERE WERE NOTES IN ALL THE MARGINS. ON EVERY PAGE OF THE SPEC. HE HAD READ THE WHOLE GODDAMNED THING AND WRITTEN NOTES IN THE MARGINS.

http://www.joelonsoftware.com/items/2006/06/16.html

Luc• 14 years ago

Here he is making a comment on an article about 8-bit BASIC: http://www.pagetable.com/?p=43&cpage=2#comment-103039

"This history is SURPRISINGLY accurate. Rick Weiland and I (Bill Gates) wrote the 6502 BASIC."

(that whole blog is awesome if you're into 8-bit CPU's, by the way, and who isn't?).

kalid• 14 years ago

A telling quote from that article:

"Is Ballmer going to be another John Sculley, who nearly drove Apple into extinction because the board of directors thought that selling Pepsi was good preparation for running a computer company? The cult of the MBA likes to believe that you can run organizations that do things that you don't understand."

bcantrill2• 14 years ago

Spot on. If I had to identify a root-cause of Microsoft's failure, it would be its voracious business practices in the 1990s. If you are in your mid-30s or older today, you grew up under this totalitarian regime -- and you hated it. And when you had the opportunity a decade or so ago, you were on the vanguard that led x86 server build-out with Linux, not Windows. To the degree that you had to care at all about Windows on the server, virtualization assured that it was in its own little box, never again to escape. And of course, you sure as hell don't trust Microsoft now: the last thing you'd ever do is buy a Windows phone or deploy on Azure -- you are of an entire generation that won't be fooled again.

And what if you're younger than that? If you're in your 20s or younger, you probably just don't care about Microsoft -- though you might not get why the older folks get so frothy about them. But know that your luxurious apathy is because an older generation considered Microsoft's offenses to be capital crimes -- and meted out punishment accordingly.

Microsoft proves that in technology you can get away with being predatory for a while -- maybe even a long while -- but not forever (at least not in a free society). And once the world moves against you, those that you so aggressively bullied will cheer your demise: you will never recover until you accept that you have failed your customers and violated their trust. Very, very few technology companies have gotten to a point of such vilification and recovered (indeed, the only example I can think of is IBM). And while I may be too early in calling it, I dare say that Oracle is (at long last) at that point or approaching it rapidly -- and I fully expect the same conversation to be had about their (coming) lost decade...

keithnoizu3• 14 years ago

While this is true it seems ironic that we've replaced one predatory behemoth with another in the form of apple.

yuhong4• 14 years ago

My favorite is the MS OS/2 2.0 fiasco, particularly how it relates to DR-DOS (clue: OS/2 did not depend on DOS):

http://www.os2museum.com/wp/?p=516&cpage=1#comment-9086

mattmanser• 14 years ago

I think you're being a bit lax with history here and looking with rose-tinted glasses, Apache had made far too many inroads in the server way before MS really tackled servers properly. That C# is as popular as it is kinda debunks your entire argument, it's a firmly entrenched behemoth in the corporate world.

The MS hate that was in the 90s/early 00s just doesn't exist any more. What should worry MS far more is that these days so many programming articles and guides just assume you are working on a Unix system. Windows is becoming irrelevant to the elite. It's a bizarre phenomenon given that MS is still dominant in the OS field that has been gaining serious traction for the last 3 or 4 years.

Also SQL Server is good. Very good. And cheap, very cheap compared to the other good DBs. While MySQL and Postgre are alright, in reality they really are quite bad compared to SQL server in terms of overall polish and quality. I got reminded of this the other day tracking down an excessively poorly performing query, fixed in MySQL by an index that MS SQL would have effectively just done for you.

And don't even get me started on how many business run exchange. Ugh.

einhverfr5• 14 years ago

What failure? I don't know what you mean by failure here. If you mean "fails to be the rockstar of the tech industry" that isn't much of a failure.

Microsoft is only a failure if we expect them to build an ever more powerful monopoly with no possibility of escape. They may be trying to do that. Instead they have a large and solid business which is still very cash flow.

Tell me of Microsoft's failure when the profits of Google or Facebook surpass the profits of Google.

bluedanieru• 14 years ago

>I dare say that Oracle is (at long last) at that point or approaching it rapidly

You say that as though it's a contentious thing?

They were past that point even before the Sun acquisition. Hell, when were they ever innovative like MS was in their heyday?

Nelson692• 14 years ago

You misunderstand the MS hate to compare it to Oracle and IBM.

Oracle and IBM want to make money, period. They'll run their products on a competitor's platform if they can get a bite of the pie, they don't care. Further, I'd guess 7/10 geeks that "hate" oracle have never used their products and might not even understand what they do, it's just part of the hatred of really really successful companies. (That's part of it too, whenever a powerful and successful company actually competes, people tend to hate it.) I'm not going to defend them but when Oracle sued Google, I don't think there was ever an intention to make Google go away, they just wanted a cut of the action, it was all about money. Read up on what MS did to Digital Research and Lotus, MS wanted to "cut off the air supply," they refused to see a world where those companies could co-exist. It's just different, MS has wanted to kill the competition.

How come they don't port most apps to other platforms? Office on Mac is the only serious one I can think of.

nirvana5• 14 years ago

Every one of the problems you mention, except for #5, existed at Microsoft in 1993! It didn't really turn on a dime at all, in fact, I think probably Balmer has improved this aspect[1], when you account for the fact that Microsoft is much bigger in the last decade than it was in the 1990s.

Of the causes, of course the DoJ suit was in 1997, but the massive bureaucracy and its problems and C quality managers existed in 1993. Just nobody cared because of the boom times. I think a lot of the perception of Gates come from PR control and marketing.

[1] Say in a "degrees of turn per month per employee in total head count" metric of some sort.

georgemcbay2• 14 years ago

'From this I get the distinct impression he really believed Microsoft wasn't doing anything wrong and things like bundling a browser with the OS were just "innovations";'

I can't tell from the quote what your stance on this is, but I think history vindicates the viewpoint you ascribed to Gates.

Can you imagine a serious general purpose OS shipping without an OS today? The idea is ridiculous. Doesn't that then make Gates/MS' decision in this area innovative and forward-looking?

edster2• 14 years ago

For some reason there is always common confusion between legally having a monopoly/monopoly power and abusing a monopoly/monopoly power.

The problem wasn't that MS was bundling a free browser. The problem was when Microsoft forced PC builders to not only include Internet Explorer but explicitly forbid them from including another browser as part of their offering.

Additionally, Microsoft artificially integrated IE into Windows and then tried to claim that the two were designed to work together. It was easily demonstrated that Windows continued to work fine after un-bundling IE.

protomyth2• 14 years ago

I'm with you on this. I really think the DOJ went after Microsoft for wrong thing. It would have been better if they had gone after the bundling agreements where Microsoft got paid for every machine shipped regardless if a Microsoft os was on it. Or the buy Office and get a discount on Windows. Netscape had better lobbyists not a better case.

georgemcbay2• 14 years ago

Edit (past the editing deadline, whoops):

"Can you imagine a serious general purpose OS shipping without an OS today" should read "Can you imagine a serious general purpose OS shipping without a browser today".

fpp• 14 years ago

and of course then the famous 14 days in the life of a microserf (now called 7 days in the life ...) might also be unknown.

one of the first pre-prints of a book that made Wired famous (by Douglas Coupland).

http://www.wired.com/wired/archive/2.01/microserfs_pr.html

MattRogish• 14 years ago

I think it has something to do with what Steve Jobs identified - monopolistic companies don't value product folks, thus they end up getting run by sales and marketing people, and the company rots from within.

http://www.forbes.com/sites/stevedenning/2011/11/19/peggy-no...

“The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesman, because they’re the ones who can move the needle on revenues.”

antidoh• 14 years ago

Stack ranking where you fire the bottom 10% (even though they were supposedly A players when you fired them; what did you do to ruin them?), is just a manifestation of managers that have a hard-on for a brain.

corford2• 14 years ago

Downfall is a bit strong. Call me when Windows 8 is out of the door and it turns out to be an enormous flop. Until then, Windows 7 is a very solid os (the best iteration of windows MS has ever released imho); xbox rules the console gaming roost; exchange, active directory and c# dominate in the enterprise space; Office is still the best at what it does. The only parts they really suck at are web and phones.

To me that means they have some serious weaknesses (given the ever increasing importance of phone and web) but it doesn't mean they're in a death spiral. RIM... that's what real downfall looks like!

flyinRyan21• 14 years ago

You can't count on xbox for stability. The gaming industry is a drunken battle royal. Just when someone is getting dominant, Nintendo (wasn't he out already?) comes in from behind and clubs them with a chair.

AD "dominates" only because Windows OS "dominates" and surely Java is still more used than C#?

>The only parts they really suck at are web and phones.

You mean the biggest areas of future growth? That doesn't sound too bad.

corford2• 14 years ago

I'm not a gamer so I don't know much about the console world but I think you're right. I remember when the first PS came out and wiped the floor with everything. Fast forward a few years and the xbox started taking over and then the Wii came along and mopped up what was left (although it seems the Wii has waned a bit since).

Yes, AD dominates because Win server and Win desktop dominate in enterprise land. However, part of the reason Win server dominates is because of things like AD, Exchange, Sharepoint, SQL Server etc.

Re: biggest areas of future growth. Yep, that's why I said it was a serious weakness. However, just like with the xbox, MS has the money and patience to battle its way in to a new sector (i.e. modern smart phones). This doesn't of course explain why they've been fucking up the web side of things for so long. To be honest, I don't think they are ever going to re-establish themselves in the web sphere (from a developer perspective at least). *nix, open source in general (python, ruby, php, javascript), FF, Chrome, etc. just make sense in that space.

Basically, if Windows 8 is a flop and their Nokia merger smart phone plan doesn't work out, then I think words like "downfall" will suddenly become a lot more appropriate.

Also, to set the record straight, I'm not an MS fan boy. I run Windows 7 as my desktop but apart from that I spend my life inside putty terminals talking to, programming on and administrating Linux systems (specifically Debian). I even have an sdf.org email address FFS :D

at-fates-hands• 14 years ago

I find it fascinating that most people forget Enron famously adopted the stack ranking principles. Look how that worked out for them.

InclinedPlane4• 14 years ago

This is pretty spot on. The process of reviews is one of the most corrosive elements of working at Microsoft. However, there's more to the story. MS fumbled a huge opportunity in the way they reacted to the financial crisis and recession. They put the vast majority of promotions and bonuses on hold. Keep in mind that this is a company that has tens of billions of dollars in cash on hand. More so, this is a company with an "up or out" philosophy baked into it (and that's a big reason for the review system). Due to fear and lack of leadership the company saved spending who knows how many millions of dollars and in the process drove away a lot of their best talent and lost out on hiring a lot of new talent as well. The way they went about layoffs didn't help either, with lots of little layoffs instead of one big purge and done (so that the remaining folks didn't have to question their job security every day). Instead of projecting strength they projected weakness, and they paid dearly for it.

But beyond all that it's the increasing culture of bureaucracy that's eaten away at MS. All the reorgs treating developers as nothing more than assembly line workers. All the incompetent middle managers and PMs that are 10x harder to get rid of than incompetent devs. All the silly out of order budget and management priorities. There's only so many times that an individual can pour their heart into a job and see nothing of substance come of it before they decide to move on to greener pastures.

The worst part of the whole thing is that few people realize the significant amount of lag between when a company starts falling down before it hits bottom. Losing a ton of talented devs probably won't stop you from shipping the current version of whatever is in the pipeline, or even the next version. It'll just mean a lot of projects that would have been conceived won't be, and it'll be harder to execute on a lot of projects that should have been a slam dunk. More so, being able to work with more talented devs is a big perk for other devs, which will tend to accelerate the exodus at all levels. And typically people will make up their mind to leave months or even years before they actually do. By the time it's actually supremely obvious that all the good talent has left it's far too late to do anything about it.

jacques_chester2• 14 years ago

> The worst part of the whole thing is that few people realize the significant amount of lag between when a company starts falling down before it hits bottom.

To borrow a phrase from Adam Smith, there is a lot of ruin in a great company.

runako2• 14 years ago

Quote from Steve Stone, founder of the tech group at Microsoft:

"“We couldn’t be focused anymore on developing technology that was effective for consumers. Instead, all of a sudden we had to look at this and say, ‘How are we going to use this to make money?’”

The duality here strikes me because the winners in consumer technology are able to do both at the same time. They make money by shipping technology that is effective for consumers.

sseveran2• 14 years ago

While I can agree that stack ranking is corrosive in many respects removing under performers is essential. I was at a company (rather large internet company) that did not get rid of under performers. When I arrived what had collected was mostly senior engineers that in all frankness should not be let near a source control system much less be allowed to commit changes. There was so little engineering talent but thousands of engineers. And this is an impossible problem to fix without wholesale firing entire orgs since competent engineers don't want to work in a team of people with equal or higher level than them who don't know the difference between a compiler and an interpreter.

While there we did do stack ranking. Its just another game to play inside a company, just like all the other games that go on. It was easy to play that system as opposed to doing something like aligning with other teams retarded ideas. We did real awesome stuff and made sure we got recognized for that. I think the hard part for many people is the recognition that 80% of people (including maybe you) don't deserve a big bonus and promotion.

There will always be politics and politics will always drive these decisions, even in small companies. I don't have an effective way of objectively measuring a software engineer. The most important thing you can do is to pick a great manager (or startup CEO) and align yourself with him. While they will do different things to help you in big companies vs little companies, a good manager will hire good people and ensure that his team is working on big, company impacting problems. Startup CEOs will be doing the same thing.

Now a couple of notes to make sure your stack rank goes awesome:

1. If senior leadership does not see your team as directly impacting profit move to a new team. 2. Make sure that now that you are working on something with great business value make sure everyone knows about it. 3. Send out reports to everyone who is interested every week telling them what your team accomplished that week (especially for you budding managers out there). 4. Compile all the congratulatory emails from executives as well as other teams (Directors and managers). Your manager will use these at the stack rank meeting since all the other terrible managers who you no longer work for will not be this prepared. 5. Remember to deliver. When you deliver real value you will be recognized.

I know this is hard but I used this strategy very successfully. I can not emphasize enough that you must be working on big, impacting features. Adding a widget to a form, or making some little feature is a butts in seats problem. If you are just a butt in a seat expect to be treated like one.

kamaal6• 14 years ago

Stack ranking doesn't always ensure bottom performers go(If there is lot of politics in the org and managers like their pet employees).

But almost always ensures erosion of team work, and attrition of some good people.

Its great when executed well, horrible if you even get it slightly wrong.

sseveran2• 14 years ago

Agree that it doesn't always work. I am yet to see a viable alternative that works in large organizations. If you know of something different I am all ears.

woodholly• 14 years ago

While he's not right about everything he writes, and if you can separate fact from opinion, younger readers should acquaint themsleves with Cringley's book Accidental [MB]illionaires. It will tell you all you need to know about Gate and Ballmer's management style.

Anyone who thinks Gates is both a genius (as in programming genius) and that this genius was responsible for the success of the company is wrong. One of those is not a true statement.

Gates and Ballmer were very aggressive and sociopathic, like Steve Jobs. This helped the company succeed. But success is really the result of the young talented programmers who signed on with them, and worshipped these characters.

In MS's case it was Simonyi, the man who gave us Excel. And before him, it was Allen who helped Gates get into business. Gates could not write the compiler tools himself. He needed Allen.

Some people might not appreciate the way these guys treat employees. Many simply would not tolerate being belittled by a guy who is not as smart as they are. (Gates' famous line "I don't know how technical your are." was supposedly his way of dealing with the many, many others who knew more than he did.) But... many programmers are happy to be treated this way. And this is management formula that works very well. Belittling the young and easily influenced, especially software programmers, works. Perhaps that is Gates' and Jobs' genius.

Read Cringley. I think you will come away realizing guys like Simonyi were the true geniuses.

Hollywood ending to this comment i.e., the moral question leaft to the viewer/reader: Not all geniuses are good leaders, but is it necessary to be an a-hole to be an effective leader (of geniuses)?

zohebv• 14 years ago

Gates was indeed a programming genius. He wrote the BASIC interpreter and most of the software in Microsoft's early days. He also managed to publish an algorithm with Papadimitriou as an undergrad, while running Microsoft in parallel. http://www.sciencedirect.com/science/article/pii/0012365X799...

> Gates could not write the compiler tools himself

You are both underestimating Gates and overestimating how hard building a compiler/tool is.

adharmad• 14 years ago

This book gives a good perspective of some of the internal feuds at Microsoft (from the dotcom times): http://www.amazon.com/Breaking-Windows-Fumbled-Future-Micros...

tonetheman• 14 years ago

Anyone who thinks stack ranking is good, seriously quit your job you are complete dumb cunt.

hexagonal• 14 years ago

What's the point of a paywall if you put all the relevant information in the "teaser"?

bootload• 14 years ago

'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.'

Microsoft once was cool. It might be difficult to imagine, but from the time PC's came out with DOS through to MS Windows, you really could do interesting things on commodity hardware with their great tools and large user market.

It was obvious to me that MS lost it's cool as the Internet gathered steam at the time the Web was born. Doing Post-grad I couldn't help but laugh, to connect to the Internet using Microsoft operating systems you needed a vital component [0] from a lone programmer from Tasmania. How did that happen? How did MS miss the tidal wave we now call the Web?

   "Open access to the World Wide Web was 
   not originally included in the classic 
   MSN service at the time of its initial 
   launch"

Toys like the Internet simply didn't register to the like of Microsoft. Gates even tried to tame it - remember 'The Microsoft Network?' [1] MS missed the Internet and the Web because of this need for control. Lesson learned: No matter how hard you try, networks can't be fully controlled or contained. You can't tame the beast.

[0] Winsock built by Peter Tattam owner of Tattam Software a small Tasmanian software company. Used Trumpet & didn't pay? You can here ~ http://trumpet.com.au/index.php/news/3-latest-news/17-mar-20...

[1] https://en.wikipedia.org/wiki/Microsoft_Network#MSN_Classic

anuraj• 14 years ago

This is the story of every large company out there including Google. With size, comes structure, and with structure bureaucracy. Metrics take the place of intelligence and straight jacketing becomes the norm. Some companies (like some people) live to a ripe old age; some die a premature death. A 100ton truck cannot take a hairpin at 100mph.

Decline and death is the norm in industry as in life. The next microsoft would come out of the thousands of startups that are being hatched today or tomorrow.

jroseattle• 14 years ago

It's a bit voyeuristic, so not a lot new in this article for those familiar with the culture.

If the article has value, it will serve as a warning to others (cough Google cough Facebook cough) that hubris and bureaucracy and koolaid and everything negatively associated with group-think can happen to you.

It's like exercise -- muscle confusion is your friend. Keep it fresh, mix things up. Try to avoid becoming exactly what Microsoft first attacked, then became.

6ren• 14 years ago

Christensen (The Innovator's Dilemma) has an anecdote that prompted his PhD research:

Digital used to be extremely successful with their minicomputers. Highly profitable, their management was lauded by the press. Then, the PC arrived, and quickly undermined minicomputer sales and profits - and Digital. The press ran a series of articles about how Digital management had lost their way, and kept making terrible decisions. But, according to Christensen, management hadn't changed. They were the same people, making the same kinds of decisions, on the same basis, with the same values.

http://www.strategy-business.com/article/14501?gko=ca7ad

medinismo• 14 years ago

even though I like the thought of the article, the author botched it by turning into an unsubstantiated complain fest. We are all curious to figure out how MSFT screwed up so badly, however blaming stack ranking is just amateur. Stack ranking is used by many great companies that are doing v well, thank you very much, such as Johnson and Johnson, Bain, McKinsey, Coke.

wluu• 14 years ago

I think this blog post by a former Microsoftee (Hal Berenson) is also worth reading - http://hal2020.com/2012/07/03/acknowledging-the-aquantive-mi...

Zenst• 14 years ago

First IBM who helped to create Microsoft who then helped to create Apple. Guess Apple helped to create ARM.

IBM helping to create Microsoft is well known so lets not dupe that one.

Microsoft helping to create Apple, well Apple went thru a bad phase and Microsoft chucked them enough life-lines to keep going and without those they would of gone under.

Apple, when they started the Newton project helped put ARM were it is today so we shall see were that goes.

Whoever is out infront always gets there head shot at. IBM took major flack for there monoply of the market, then Microsoft and now Apple. ARM just seem to be playing in that nice phase. But early days and not like Apple couldn't indirectly spawn a new leader be it directlly or indirectly. Usualy the pattern is that they will help another company to remove some heat from there ass and that company will outgrown them.

Still IBM still around, Microsoft still around etc etc etc.

Just a case of everybody loves to hate a winner it seems :(.

krishnakv3• 14 years ago

The major point the came out for me from the article is how destructing ranking people "against a curve" is.

"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"

This was originally popularized by GE and borrowed by dozens of companies as a HR best practice. Now every major corporation tries to rank their employees along a bell curve as 1's, 2's, 3's and 4's and inevitably, they lose the 1's who quit in disgust rather than put up with this.

My hope is at least a few HR decision makers read this article, look at what is happening in their own companies and come up with a better way to motivate and get the best of employees. Quickly before this cancerous policy eats up the best talent in in the organization.

goggles99• 14 years ago

Saying something like stack ranking is partly responsible for ruining Microsoft completely discredits this article. It makes every word suspect in the whole thing.

1. Microsoft has almost always stack ranked. 2. Companies like Google who has done nothing but grow in the past decade also has almost always stack ranked.

Try not to put things in your article that seem so baseless. It makes you look like a hater.

Microsoft’s Downfall: Inside the Cannibalistic Culture That Felled a Tech Giant

Related Stories