Sunday, April 24, 2005

We the Microsoft Shareholders

So, Scoble not only got permission to post Mr. Ballmer's Friday Memo on the HB 1515 broohaha but almost posted a fine bit of blistering commentary (Sco-Balls, indeed). Again, I'm trying not to step in the red/blue state splattered opinion on the anti-discrimination bill and affixed agendas. Rather, just at the associated screw-up.

The good:

  • Ballmer came out and said something within a reasonably quick amount of time of things blowing up in Microsoft's face. Quick damage control is smart and this will no doubt help quell what could have blown up even more (a divisive story like this, ignoring the players, is always great for filling up the spaces during slow news days).

The bad:

  • That this public controversy ever happened. This is just poor forward thinking and poor leadership that leads to d oubt and suspicion. We don't lavish rich compensation like this on the executive leadership decision makers just so that they can embarrass our company. It shows a total lack of savvy, a degree of clumsiness, and a growing doubt in their ability to make good decisions.
  • A demonstration that executive leadership doesn't think they are accountable to the key shareholders in Microsoft.

The second point above is where I'm going to have to momentarily dial the foul-language meter up to "R" (fair warning - I do usually endeavor to keep the language clean here to not obscure any vestiges of a meaningful message). A bit of the memo that was innocuous at first later had my teeth-grinding as I did yard-work all day Saturday:

It's appropriate to invoke the company's name on issues of public policy that directly affect our business and our shareholders, but it's much less clear when it's appropriate to invoke the company's name on broader issues that go far beyond the software industry -- and on which our employees and shareholders hold widely divergent opinions. We are a public corporation with a duty first and foremost to a broad group of shareholders.

Mr. Ballmer, who the fuck do you think is on the other side of this god-damn email? The most fucking important shareholders that the company has! Don't lecture me about doing what's best for shareholders when I and just about everyone in the company are just that. You're doing what's best for me. You're accountable to me.

So as I swept and snipped and scrubbed, my little brain started connecting the dots over the past realizing that executive leadership doesn't think that employees are engaged shareholders let alone shareholders interested in the direct impact of executive leadership's decision making. Last year, describing the changes in compensation, Mr. Ballmer said that most employee's just flip their stock as soon as possible vs. holding on to it. And Mr. Ballmer has said multiple times how important things are guided by our responsibility to the shareholders. And to Mr. Ballmer, it seems, the intersection between the set of shareholders and the set of Microsoft employees is the null set.

So I could watch The Corporation again and meditate on Microsoft doing what it thinks is best for the shareholders, but I could flip that around and wonder if the shareholders are actually speaking up and demanding Microsoft actually perform and be held accountable for doing the best job possible. I don't see that currently happening. And until the shareholders (especially the most important shareholders) start making their voice increasingly heard about what they expect, the less likely the leadership is going to feel accountable for more results than well-spoken lip-service.

25 comments:

Anonymous said...

The management/board is accountable to all shareholders, not just that minority that happen to be employees. Surely a phrase such as "key" or "most important shareholders" is just internal propaganda. (Or at least, it should be: a board that blatantly looks after its own employees at the cost of the (other) shareholders is likely to find itself on the wrong side of a lawsuit at some point.)

Anonymous said...

So, let's say that MS threw its weight behind this bill and got it thru the Legislature. How would we be better off? The fundie cretins would be ones howling and creating even more of a distraction for the company. They WANT to lose at the local and state level so they can get their troglodyte supporters out of the caves and into the voting booths to give them a "mandate" for amending the national constitution to restrict all sorts of people's rights.

In the current climate, with the gang in power working hard to appoint their blind loyalists to lifetime jobs in the Federal courts, the smart thing is to lie low, pretty much what Ballmer was doing befor this hit the fan. All those people flaming MS for NOT playing into the hands of the right wing culture warriors are misguided.

Anonymous said...

Both comments are most likely fair but one thing is undeniable, this issue has been badly managed.
If the scope of legal/social issues was indeed decided to be narrowed, why this wasn't communicated before? If we, as a company, have no time to spend on this, what are top executives doing meeting that pathetic fanatic from Redmond twice on this exact same issue?
I wish i could buy Steve's mail, but up to now, i simply don't.

Anonymous said...

Regardless of where you are coming from (conservative, liberal, gay, straight) the bottom line is a law like this would have an adverse impact on the company by opening it up to yet another category of potential law suits. Consider the litigious nature of our society, that MS is generally a favorite target, and the drastic increase of bogus law suits filed (including against MS). Moreover sonsidering all the other hot issues MS faces (e.g. immigration, IP, image); and that not all employees agree on position - a neutral position on is the responsible thing to do. W/r/t MS, it has an incredibly progressive and healthy environment when it comes to these issues. So not sure what all the fuss is about...

Anonymous said...

I think Microsoft should really be focused on the work it should be doing, namely producing ironclad security in its products.

This type of activism is really more of a personal issue that could be addressed by individuals.

And I am not really convinced that legislation is needed for this issue. For one thing, how often does legislation actually fix anything?

There is an argument out there that gay rights is comparable to the civil rights struggle for black people in the 60's.

I can't see the logic to that comparison. Granted I don't know the first thing about living in this country as either an African-American or a gay person.

But I see the two as completely separate issues. The reason black people had to struggle for equality for so long is because they cannot escape the attributes that is the source of their equality.

Gay people do not have that problem. You cannot look at skin color and differentiate homsexuality and heterosexuality. A prejudicial person would have to use another persons mannerisms or admissions to decide, righly or wrongly, if that person is heterosexual. At that point, if the person suffers some form of discrimination, such as losing their job, etc., they become a victim of sexual discrimination. And our society has many ways to address that problem.

I am no lawyer but that is basically why I believe we don't need special legislation for gay rights. I believe our society already protects people in their choice of lifestyle. That is the essence of America to me.

Anonymous said...

CORRECTION to a typo in the post I just made, I used the word 'equality' when I meant to use 'inequality':

But I see the two as completely separate issues. The reason black people had to struggle for equality for so long is because they cannot escape the attributes that is the source of inequality.

Anonymous said...

"But I see the two as completely separate issues. The reason black people had to struggle for equality for so long is because they cannot escape the attributes that is the source of their inequality."

This is utter nonsense. The whole point is that homosexuals shouldn't feel forced to hide their true self in order to make a living.


"I think Microsoft should really be focused on the work it should be doing, namely producing ironclad security in its products."

And sending a single letter affirming support for this bill would have prevented working on security? I never knew Microsoft's ressources were *that* limited.


"The bottom line is a law like this would have an adverse impact on the company by opening it up to yet another category of potential law suits."

You survived supporting for the past many years. Even Nike could muster the courage/decency to support it. All the excuses about how "we're a company, we don't have any moral responsibilities!" gets old pretty quick.


"They WANT to lose at the local and state level so they can get their troglodyte supporters out of the caves and into the voting booths to give them a "mandate" for amending the national constitution to restrict all sorts of people's rights."

Yeah, capitulating straight away is usually a good way to achieve long-term success. While you may be happy to sell out the gays to protect your own rights, I hardly think the fundies are going to stop there.

Anonymous said...

>>This is utter nonsense. The whole point is that homosexuals shouldn't feel forced to hide their true self in order to make a living.<<

Do they have to hide their true self at Microsoft? No, they do not.

Also, you sound about as judgmental as any activist christian, so I don't see why you all can't just get along.

Anonymous said...

And while you all are judging Ballmer so harshly about this, I assume because people love to hate Microsoft, consider another point. Like most top-level executives, I assume, Ballmer basically lives in a bubble. Do you really think he is in touch with what life is like for the people that are most vulnerable to discrimination? I doubt it.

When he looks around at the culture of Microsoft do you really think he sees a need for a gay rights bill?

Anonymous said...

"Do they have to hide their true self at Microsoft? No, they do not."

I never sad they had to. I was responding to the claim about laws not being needed to prevent discrimination based on sexual orientation. That might be the case at Microsoft, which would be all the more reason to expend the minimal effort required to make sure the same applied everywhere else.

That apart, I actually agree that it would have been better for Microsoft never to have gotten involved in the first place - if profit is all that matters. In a broader sense, less discrimination will lead to a more efficient labour market, which should benefit everyone (incl. Microsoft).

Anonymous said...

me me me...

You're a whiner mini. The employees are not the key shareholders and the CEO's duty is not to you.

That's what this whole blog is about. You feel entitled to a rising shareprice so you can become a multi-millionaire. Ain't true...despite a twisted belief that arose in the 90s, that is not what a corporation is for.

Stop grinding you teeth and go get a job at Google. When your $190 options are at $10 for a year, you'll start to wake up.

vince said...

"That's what this whole blog is about. You feel entitled to a rising shareprice so you can become a multi-millionaire. Ain't true...despite a twisted belief that arose in the 90s, that is not what a corporation is for."

Hmm, I thought corporations were about increasing shareholder value? If it's not, then as an investor why the heck would I be inclined to buy MSFT at all?

Does anyone have real numbers on employee ownership of MSFT? I realize it'd probably be hard to get a meaningful number, because people like Ballmer and Gates are still considered employees, right? I'm just curious.

Anonymous said...

I agree this issue was poorly handled but you lost me on this "key" shareholder bit. Indeed, I'm a little surprised - you're normally much smarter than this. Employees are no more "key" than any other shareholder and indeed last time I checked, the vast majority of the company was owned by non-employees. Mgt's responsibility is to ALL shareholders and frankly a pretty good case could be made that to date, they've bent over backwards to protect employees to the detriment of general shareholders. That's not a situation that can continue indefinitely - unless you want a $10 stock price. Net net, they could/should have handled this better but I agree with Ballmer (for once) that it is not MSFT's role to be an advocate for broader social/political/religious positions.

Anonymous said...

"Yeah, capitulating straight away is usually a good way to achieve long-term success. "

Fighting on the enemy's ground, on the enemy's timetable, is almost never a good way to achieve success. The right wing has gotten immense mileage out of the push for "gay marriage" before public opinion was ready for it. That certainly contributed, and possibly was decisive to re-electing Dubya.

The Civil Rights Movement in the '60s had 100 years of law and a constitutional amendment on its side. The Republican Party was far less loathesome back then and didn't back the reactionary bigots. Neither is true now -- gay rights require changes to the law and interpretations of the Constitution that would have been considered absurd 10-20 years ago, and the Repugs are falling all over themselves to get political mileage by appealing to the stupidest and ugliest emotions.

Both MS and the progressive political forces in the state and country are better off with MS lying low for now. That means building grassroots support, not squandering it prematurely, and it does not mean "capitulation."

Anonymous said...

I could write some long and try to hit all the points ... the short and simple of it is ....

SteveB's resposne, by waiting until Friday evening to send, it did not carry any weight or meaning it's only just "a response".

Sad - the damage has been done.

Anonymous said...

Microsoft paying Religious Right leader Ralph Reed $20,000 a month retainer

AMERICAblog.com has learned that Microsoft is currently paying a $20,000 a month retainer to former Christian Coalition head Ralph Reed's consulting firm Century Strategies. Which now begs the question of whether Reed was in any way involved with Microsoft's recent decision to abandon its decades long support for gay civil rights in order to curry favor with anti-gay bigots of the radical right.

Anonymous said...

Hey, can't we all be happy? Ken Dipietro is gone. A black van came and took him in the middle of the night w/o hardly a word . . .

Anonymous said...

Who da'Punk:
How many employees who would consider leaving Microsoft because we pulled support for the bill? Now how many would have considered leaving if we had supported it and the bill had passed? Which number do you think is greater? I'm just guessing, but I'd wager that pulling support for the bill tipped more employees toward leaving. If not convincing them to quit on its own, maybe coupled with whatever other reasons they might have (oooh - the towels!) they'll leave. I thought that was what you wanted.

Anonymous said...

I didn't "get" the Ken DiPietro comments until I found http://seattlepi.nwsource.com/business/221204_msftexec22.html: "Last year, DiPietro became a focus of attention after Microsoft executives decided to reduce some employee benefits, part of a broader effort to cut costs and improve profit margins. Some employees were openly critical of the moves, which were announced internally in a companywide memo from DiPietro. In an interview at the time, DiPietro said he felt badly about the reaction from employees and acknowledged that the company "could have done a much better job internally of messaging and communicating the changes and giving a little bit better context.""

Anonymous said...

Microsoft defends ties to Ralph Reed

Microsoft defends ties to Ralph Reed
Critics want conservative consultant fired

By CHARLES POPE
SEATTLE POST-INTELLIGENCER WASHINGTON CORRESPONDENT
April 27, 2005

WASHINGTON -- Microsoft Corp. is paying social conservative Ralph Reed $20,000 a month as a consultant, triggering complaints that the well-connected Republican with close ties to the White House and to evangelist Pat Robertson may have persuaded the company to oppose gay rights legislation.

Reed, who got his start in politics by running the Christian Coalition for Robertson and who had a senior role in President Bush's 2004 campaign, is a leading figure in the social conservative movement that spearheaded opposition to gay marriage, stem cell research, abortion, gambling and other issues.

Microsoft spokesman Mark Murray said the company has hired Reed on several occasions to provide advice on "trade and competition issues." He said Reed's relationship as a consultant with the software company extends back "several years."

Reed's history with Microsoft, coupled with Microsoft's reversal on a gay rights bill for the state, unleashed a vocal backlash against the company yesterday. The bill, which would have made it illegal to discriminate against gays and lesbians in housing, employment and insurance, failed in the state Senate last week by a single vote. Supporters said that Microsoft's shift tipped the scales.

"Mr. Reed's policies are not the policies of Washingtonians, nor should they be the policies of a world-class leader like Microsoft," said George Cheung, executive director of Equal Rights Washington, a Seattle group whose stated mission is "ending discrimination of gay, lesbian, bisexual and trans-gendered persons in every corner of the state."

He added, "Microsoft's reputation as a fair-minded company is rapidly slipping away from them, and if Bill Gates and Steve Ballmer are really interested in running a fair-minded company, they would fire Ralph Reed today."

(more)

Anonymous said...

Microsoft needs to focus its resources on issues that affect its business and increase shareholder value.

Whether or not Washington state has this particular law has no effect on shareholder value. Microsoft's policies are not going to change with or without the law, so there will be no net effect on Microsoft shareholders.

In fact, if you are in support of this law, one could argue that Microsoft's "progressive" policy is a "competitive advantage", and that forcing everyone to take the same policy reduces that advantage.

As a shareholder, I think there are much more pressing isuses for our legal team to be addressing such as our relationship with the EU. This is a distraction for our executives and legal team to speak out on such social issues in any official MS capacity.

Let political and religious organizations debate issues of law & morality -- and feel free to support whichever ones you want, with the money from your MS dividends or paycheck.

But business should be about business, and my shareholder dollars shouldn't be used to promote causes orthogonal to MSFT's core business mission.

M. Simon said...

MS should support ending affirmative action. Too many lawsuits.

If you believe in affirmative action it is hard to discriminate who is deserving. Because isn't every one deserving?

You know Jews used to be discriminated against heavily in America. I wonder why they never got an affirmative action program.

M. Simon said...

What ever happened to the hippies who started the company?

Anonymous said...

"What ever happened to the hippies who started the company?"

They got rich and thought it meant they were brilliant.

Anonymous said...

White people benefited from affirmative actions and free slave labor for 300 years. Now a bunch of tightwads white racists are whinning about AA? Give me a break.

If it wasn't affirmative action, Harvard would be 100% Asians today as opposed to only 45% Asians. The fact is that whites have benefited more from affirmative action.

Now affirmative action is needed, more than ever, to equal the playing fields.