Sunday, May 21, 2006

Commitment Zero and Reactions to the Big Microsoft Changes

There is lots of good discussion regarding the refreshing change in direction announced by LisaB on May 18th. Let's see... almost 280 comments since Thursday morning. I will touch on some of the comments that caught my eye below, but I believe it's worth any Microsoftie's time to read through the entire sequence of comments.

Some of the various blog entries and articles around the Microsoft changes:

While it showed up on techmeme the news didn't get too far from there, especially in light of the wrangling going on with Symantec. Frustrated folks who obsess over this just being about towels and how spoiled Microsofties are just need to take a moment to concentrate and see the deeper aspects of what's going on. Ask most Microsofties about the towels and you'll learn two things (1) They had no idea we had towel service when it was discontinued, and (2) They'll most likely rarely ever use the restored towel service. I will, and now I get to leave my Finding Nemo towel at home.

The negative reaction to the towel imbroglio is just how smart, good-looking people react to dumb decisions. Long ago, I gave my perspective about cost cutting here: Mini-Microsoft Performance Tuning MSFT.exe (or, How to Save Microsoft $1,000,000,000 Now).

Fire people.

Get your RIF on.

(RIF = Reduction in force - layoffs.)

And along that theme, one commenter has this to say:

I got wind today that a MASSIVE Windows RIF is in the works. It's real folks. Hundreds and hundreds of jobs. The good news is that other parts of MS will be able to absorb it. But if you want your pick of what's out there, beat the rush and don't wait for review time.

True? All I can add is a bit ago, I was hanging out with a small group of excellent Microsofties and one of the people there said that they had been involved in counseling executive leadership about dealing with a large layoff. Two things happened right then: (1) My eyes dilated big and black, just like as if I had an eye exam, (2) The person realized they had said something they shouldn't have (probably signaled by my big, happy, black eyes), and moved on.

Today: curve-fitted performance review gone? Tomorrow: layoffs? I'm not going to have a damn thing to blog about.

Okay Mini, this is the right time to go on a 2 month blog break. Let us all get to doing some work now that the towels are back for the masses.

Like others said, thanks for providing the vehicle for the message. The ball is in my and others court now, and we will continue to deliver.

It's tempting. I'm probably going to slip into clip-mode for a while... noting interesting articles and comments. Personally, I'm more thinking about Mini-Microsoft 2.0 right now and what kind of positive change we can focus on and what silos and fiefdoms need to be broken down... and how we can do it. In addition to deadwood needing to be fired, I think we have some bad systems and habits also needing the boot just as badly as any process-ridden dot-commer clinging to their job.

Sure, there is a lot more that LisaB and the leadership working with her has on their plate. You can't do everything all at once, and I'm damn surprised and elated they pulled off what they did for this review cycle. Damn surprised. There had to be a big bat swinging because I seriously doubt most VPs at the recent executive retreat were excited about these changes. Kudos to all the HR tool builders, too. That's a lot of mission-critical, high-scale global software to pull together. Their story is something I hope they take on the road internal to Microsoft. Well, after a successful review season is wrapped up come mid-September.

My immediate issue: we still have stack ranking and will continue to have stack ranking given our renewed commitment to differentiation. The managers will still get together and rank their reports and people are going to realize they are still compared to their peers and are competing for dollars and stock based on their individual success over their team success. And while we have decoupled the performance review from the stack rank, I picked up from both LisaB and my leadership that, hey, you need to ration out how many exceeds you give out. So there'll still be pushback and there will most likely be cases when someone is on the border and the feedback given to them is fitted to meet compensation needs in dispersing the budget.

But it's a lot less likely and you don't have to go and dork someone just to meet a 3.0 quota. Great! Still, the idealist in me would prefer everyone to have a clear idea through the year what their performance is looking like and what kind of commiserate compensation they can expect. We still have the three month mystery from when you submit your review until you get the results back.

As for people concerned that their reports or peers will turn in their review and expect a resounding, "Exceeds! Gimme!" because they nailed their easy set of fluffy commitments, well, all I can share is my perspective: everyone has by default Commitment Zero. What's that? It's that you are committed to getting full or exceptional results in your career stage profile, perhaps even getting full results in the next profile up if you're near promotion. When it comes time for me to be a reviewer, the first thing I'm going over for each report is their performance against their CSP, then moving on to their additional commitments for more specific items.

Plus, I expect to roll down some pretty strenuous commitments of my own. No, my only immediate angst is that I'm too much of a hard ass, and that manager next door to me is waving his wand-of-exceeds on all of his reports and I'm giving out the constructive tough-love. So it will be incumbent on my boss to do more work to ensure parity. And that seems right.

Oh, and as always, if you still feel jolted and disrespected and you just don't think Microsoft is the right place for you, well, Alyosha` says it well:

The HR changes are good for Microsoft. To those who bemoan the absence of an across-the-board pay raise ... put your money where your mouth is. If you don't think you're being fairly compensated at Microsoft, find another company who's willing to pay what you think you're worth.

When are you going to find a better time than now? Like, never!

Comment round-up: one of the Partner-level Microsofties posting here occasionally apologizes near the end of their post - it wasn't all sunshine, like:

Great disappointment with the senior team. Even a L68 like me feels a tremendous sense of foreboding. With the exception of perhaps Robbie Bach, that gang came across as a bunch of tone deaf people who are out of touch with reality with all their funny math. Steve is so financially unsavvy that it is embarassing - he actually seemed puzzled (and not in a pleasant grandfatherly kind of way) with the stock gyrations - his comments had me cringing. What an idiot! I can't believe I have to kiss up to these people.

One person does a good breakdown of their immediate reaction, including:

Compensation: Dismal. NO mention of raising a COLA bar or of increasing our 65th percentile. This has got to be hard on recruiting. We are just NOT competitive in base pay.

Some had their "leaving now" clocks reset:

[...] I love the work I do and am truly amazed by most of the people I work with on a daily basis. It is just a thrill to work with people who are smart and totally committed. I also love the fact that anything we do always has the potential of changing people's lives. I just wish that we could get more competitive in our compensation, our customer sat numbers and less competitive with our peers. I am willing to give the company my best efforts another year or two to see if we can truly change for the better.

A common theme of "what was missing?" was accountability, like:

While there were certainly problems with compensation, review curves, and employee services at Microsoft, and while it's certainly true that some of these problems were addressed yesterday, it still doesn't change the fundamental fact that the real problem continues to remain: A bloated, ineffective, self-serving rank of senior and executive managers who can't make good decisions quickly enough and who perpetuate a bureaucracy that makes it absolutely untenable for the next generation of leaders to thrive.

MSDecade put together a report card, including:

Incent collaboration, team-building, making each other great My grade: D-. Absolute performance vs. relative performance review is a great step, don't get me wrong. But the curve does still exist, which means that calibration still happens and performance envaluation is likely to stay as subjective as before. Team-based rewards will need to happen in the next round of changes.

Generally, people in their comments were exceptionally happy with Lisa Brummel. Kevin Johnson comes in a very distant second. Grumbles that BillG didn't show up. Exceptional dislike over Ballmer asking Google users to raise their hands (Mr. Ballmer, if you need to know that, ask Microsoft IT department to roll-up some statistics from our proxy servers based on unique login-names. You can even get a pretty chart to compare usage over time with MSN and such. We have the technology!). Wonder over whether the MSPoll will be disregarded given that it was before this change. General agreement, it seems, to start referring to me as "she." Agreement that the old ESPP would be much appreciated and would bind us back to the success of the company. Gold Star discussion more than usual... have you ever been awarded a Gold Star?

Oh, and off-topic, but keeping an interesting conspiracy theory alive:

I was researching MSFT’s SEC filings and I have come to the conclusion that the stock price is being intentionally manipulated to help MSFT’s bottom line. As long as the stock price remains below $28.73 by December 2006, the company will not have to book the $2.21 billion in stock option expense on the shares that were sold to JPMorgan.


Administrivia: comment moderation clarification time: okay, I've had it with the "whiner" comments. The kind with the core comment being just whining that everyone else is whining and throwing in the occasional wit-free "whaa!" Say something deeper than that... at least put some effort into a counter-point. But don't just fling prose poo around and expect your rhetoric to be posted.

PS: while I toy with the very unlikely idea of coming out from the realm of anonymity and scheme about how to turn Mini-Microsoft into an internal dialogue for honestly improving from within, maybe you've gone and figured out who Mini is. I can't imagine it's that hard. After you get over the quizzical bit of "Who?" why don't you drop on by my office location and we can talk over some espresso.


137 comments:

Anonymous said...

Don't stop being anonymous Mini... you'll be toasted immediately.

Anonymous said...

LisaB == MiniMicrosoft ?

I wouldn't be that surprised.

Louis Gray said...

It seems to me that much of Microsoft's recent struggles extend beyond the company's distracted focus and product quality. In fact, with a resurgent economy, and the job market becoming much stronger of late, Microsoft simply isn't the place where aspiring engineers, marketeers and salespeople want to be. Instead, those best and brightest are heading to Google, Yahoo!, and a slew of Web 2.0 companies. This site's comments on Microsoft's salary ranking look like that tide won't be turned any time soon.

On the flip side, I have to applaud you and your readers for bringing some very real human faces and voices to what at times has seemed an unthinking corporate monolith. Keep up the good work.

Anonymous said...

You asked if anyone had ever gotten a gold star? I did. Was never told what it was, showed up in my paycheck one pay period. Sort of got told after the fact what it was for (and yes, well deserved), but I was confused with the process on how all that was allocated. Not much money, something like $5K, but then that's up to the manager/VP discretion and I got mine at the end of the fiscal (figure it was leftover budget). I got a 4.0 that year too, so I was pleased overall...but disappointed with the process, the opaque-ness and the fact that I've done better work since then and gotten nothing.

Anonymous said...

I gotta tell ya. I love this company, but I hate what we've become. To me, the biggest problem we have is a lack of talent. Try recruiting talent when you pay at the 65th percentile, stock price is trending downward, and leadership spouts the same tired lines.

The company meeting was a propaganda piece. If executive leadership was really leaders they'd put their money where their mouth is. People are our most important assets. SteveB, why don't you spare a billion and put it towards your people's salary?

Every year I work here I get a little poorer with inflation at 4.5% , housing prices increasing 15% every year, and my 3.5-4.0 performace netting me 3% increase in wages. Deliver Windows Live? Work long hours for free on the weekend? Sorry, but it takes more than some goddamn towels and pizza.

This town hall meeting was a moment in time to change the course of this company. Sadly, it's more of the same BS. I am doing something about it, more time devoted to my side projects. MS your time with me is limited. Peace.

Anonymous said...

Yes, "Breaking fiefdoms" is a very good choice for the next topic.

Actually I believe it must be a top priority for HR if they really want to improve things.

The impenetrable social networks manifest themselves at multiple levels and scopes at MS, and we even have virtual fiefdoms going which span disciplines and multiple teams. No question it's a big blow to productivity, and if you ask me it's what turns the company's motto of "realizing your potential" into a big lie for a large group of mid level high performing employees like myself.

One usually requires much more energy to penetrate the walls of group-thinking ally-defending social circles if one wants to to make a positive change in the product, than one requires to actually identify problems or formulate solutions.

There is no question we have to move toward a more inclusive culture, and have HR policies/processes which protect the inclusiveness.

I don't really know what the solution is, though... I suspect any feedback based prevention measure wouldn't be reliable. Forced rotation of managers and IC roles, may be? But that sounds too de-stabilizing right from the start.

Has this been discussed here at any length before? Insights from Herbold's book perhaps?

Anonymous said...

I'm frankly a little tired of the whining by those in the field with a severe case of Redmond-envy. We may have free sodas, etc. but that is nothing compared to some of the perks I have seen in the field. EMEA, company cars...IRVINE office not only gets free drinks, but free Starbucks frappacinos, most all subs have flexible work arrangements, work at home, etc. I don't want to hear any more Redmond envy. Company-wide...ALL of this pales in comparison to the massive compensation issue facing employees...so can't we unite along those lines and get that fixed?

Anonymous said...

We had (have?) a stack ranking at our company. We were graded on something similar to a bell curve but mostly skewed to the higher performers. It seemed as if it was being instituted to get rid of poor performers while introducing some sort of churn.

This can be good in some cases I guess where you want to keep your employees on their toes. Anyway, after dealing with many people "voluntarily leaving" due to the distributions, we allegedly did away with them. This gave us a brief bit of respite but has slowly crept back into the annual manager discussions of who gets to stay and who gets to leave. After doing away with distributions, we are back where we started.

Thanks to GE, it seems as if we're never going to be rid of this. I am under the impression that using a bell curve is a great way to identify high and low performers and not the best way to force attrition. But what do I know, I am not an Evil HR Director (TM).

Anonymous said...

Unless you are Lisa Brummel - and set this site up as to gather feedback - I wouldn't go public. You will get 'disappeared'. Once you're on the outside looking in I don't think this blog will be quite as effective.

Anonymous said...

"Forced rotation of managers and IC roles, may be? But that sounds too de-stabilizing right from the start."

The one place I'd like to see forced rotation is between the dev and test roles. At a minimum this will provide solve the issues we have hiring people into sdet roles and improve appreciation of quality issues in the dev org.

Anonymous said...

Mini asks, "have you ever been awarded a Gold Star?"

Yes. And my roommate has two. And I believe one other person on my team received one for the same project I got mine for last year. As far as I know, each one came with a mediocre but not insignificant amount of cash.

I'm curious about the percentage of FTE's per year who get a gold star. Anyone know? I had guessed it was something like 5% or maybe 1%, but my teammate thinks it's a much lower number than that, and the comment in the prior blog entry by a poster who said that most of the people he asked hadn't heard of the gold star program bears that out. However, here's another data point. I was at some gathering for innovators at Microsoft (an open meeting, not one I was specifically invited to attend) and someone asked the room, "How many here have received a gold star?". About 50% of the hands went up. This is part of what caused me to think it was a much less exclusive club. Perhaps those interested in taking time out of their day to attend a discussion of innovation are not a representative sample of FTE's?

Anonymous said...

Mini, if you "out" yourself before the end of the calendar year, I will donate whatever bonus I get (& MSFT-match it, duh) to the charity of your choice. I'm not going to get a blogspot account for you to follow up on that, but use yours to ping me at chrisker-at-hotmail-dot-com if you want me to back that up.

You can even approve this and let other people see that I said this.

You have street cred. Time to use it.

Alyosha` said...

"Hundreds and hundreds" isn't that big of a RIF in Microsoft terms. It definitely wouldn't amount to an across-the-board layoff. If there really is a RIF planned, look for a few peripheral, perpetual do-nothing groups to disappear in their entirety.

Don't have too much faith that Microsoft's best medicine is an across-the-board RIF. It's not an established fact that "too much dead weight" is Microsoft's worst pathology. If it is, then keep in mind that a good number of that "dead weight" will be the ones choosing who gets the axe -- and a lot of good talent getting caught up in a frenzied purge.

No, Microsoft has always had a reputation of hiring bright people, and a lot of them are still around -- although sure some groups are lousy with incompetents, don't deduce that the whole company so suffers from such a small sample. What we have, I believe, is world-class talent that's being misused, mislead, and misdirected.

Even if we were so lucky as to have a fair layoff based entirely on merit and not politics, the loss of good will and morale of "the survivors" will quickly eat up any savings gained by removing the unproductive. Massive firings are traumatic to an organization -- and like an equally traumatic massive hiring spree, the destabilizion they cause rarely results in improvement.

I'm with Mini only as far as we should end our drunken hiring binge of the past few years and bring our headcount delta under control. But I part ways when it comes to advocating a large RIF. To get rid of the dead weight, nothing but a slow, calm, and steady campaign of 2.5ing the critters will do.

MSDecade said...

MSDecade put together a report card

... and can't even spell "evaluation"...

General agreement, it seems, to start referring to me as "she." ... maybe you've gone and figured out who Mini is. I can't imagine it's that hard

If the gender references are accurate, it does narrow it down by two-thirds, but that's still a lot of people. Too many. Oh...that's the whole point.

why don't you drop on by my office location and we can talk over some espresso

Can't. Too busy delighting customers. Just kidding.

Anonymous said...

I've gone through our *trax chart (about 110 people in the org) and for each person asked myself whether we could do without the guy/gal or not and what this person is doing.

Turns out we could fire 30% of people and that I think would improve our agility pretty drastically. There are about 15% of people in our org who do nothing but sit in meetings and "report status" to each other. About 5% of folks in our group have "Director" in their title and some directors report to other directors. We have leads with zero or one reports. We have more PMs than testers and way not enough devs.

We have a ton of marketing people that seem to multiply like rabbits. Towels are good, I guess, but who's going to clean up all the other stuff? We need a tight, flat management structure, like what they have at Apple or Google.

Anonymous said...

There has been quite a bit of talk recently about how the non elite performers are getting under-compensated. This is usually done with the implication that if these people keep getting "misteated" they will leave, and MS will be in trouble. But one thing no one has addressed yet is the idea that maybe this is done intentionally. Perhaps management has decided that projects the size of windows dont really need top performers. Perhaps it is best to have just warm bodies who can turn the crank.

I know I would much rather beleive that the people who make these descisions are doing it because they think they are optimizing how they spend thier money. It would be horrible if they were just so out of touch they didn't realize that many employees were feeling alienated.

Anonymous said...

I liked the changes. None of them was what I really wanted but they show that LisaB is listening and the execs are conceding that there are morale issues.

The only change I really want from Microsoft is that we deal with the lack of accountability that allows poorly performing middle managers and executives to stay in their positions clogging up the works. I don't want a witch hunt but I think many of us can admit that there are many instances of the "Peter Principle" in the company today where people have been promoted to their level of incompetence. These people cause serious damage to the company and the morale of the employees under them.

I'd like execs to be a 100% transparent in their commitments and be visibly dinged when they don't meet them. I'd like to see HR actively investigate orgs that visible evidence of morale issues such as high attrition, blanket bans on "permission to interview" and really low MSPoll scores. Problem areas should be identified and management be encouraged to address them, if the problem is the immediate management then HR should skip levels to address the issues.

Everything else is just icing on the cake. Well, except for higher base pay. That would be cool too. :)

I want a company that pushes itself to be the best it can be. Right now, we're just another big company with slightly better benefits than other Fortune 500s.

PS: Enough people have asked that I feel I need to comment about this somewhere, I'm not Mini.

-- Dare

Anonymous said...

I really don't understand why this performance review stuff has to be so difficult at MS. A lot of us are engineers, so let's look at it from an engineering point of view:

- There is a fixed amount of money to be awarded.
- There are X people whose performance need to be measured against what they are supposed to do
- The performance of people is in the form of some point on scale Y


Question: how to award the money in accordance with performance?

Answer:
- Measure performance of each individual by looking at achievement versus commitments (or objectives or goals or whatever; the distinction irrelevant for this process)

- Indicate said performance by rating it on an arbitrary scale (2.5 - 5.0, or under/at/over or a ten-point scale: again, the distinction is irrelevant for this process)

- Inform the indivudal about their performance and tell them their rating on the scale.

- Now (i.e. *after* the review), take the pot of money and divide it over the ratings of all individuals according to some distribution

- Inform the individual of what their rating has gotten them this year, given the money available in the overall pot.

Advantages:
- performance review is absolute and completely independent of available money
- costs (available money) can be set by management and made dependent on company performance (i.e. if company performans badly, money can be reduced and *everyone* gets less)
- management stil has a distribution/curve to use to manage how/where the money is allocated, i.e. they can control the differentiation between top and bottom performers
- every single aspect of this can be published; in fact, it would be good if everything was published

The trick is to do distribute the available money to the performance ratings given, not the other way round.

Systems like these have been used in previous companies I've worked for (I'm in Europe) and they work very well.

J.

sugr_smack said...

I recently left MS (2 months ago) and my reason for leaving were my own. I don't hate MS, I very much enjoyed my time there (just over 7 years) and I think that even though the stack is decoupled from the score, there are only so many dollars going around for bonus and merit and that's where the stack will reappear, even if not formally.

My new job...I am eligible for a 15% based on very objective MBOs and if I meet them, I get the money. Everyone is eligible for a 15% based on MBOs and the dollars are there for anyone that meets their objectives. I know there has been some discussion about how to not stack when there are only so many dollars, but the answer to that is easy, make sure there are enough dollars for everyone if they perform at the level you asked them to. Otherwise, there *will* be a stack, there's no way around it.

StS said...

everyone has by default Commitment Zero. What's that? It's that you are committed to getting full or exceptional results in your career stage profile, perhaps even getting full results in the next profile up if you're near promotion.

This is an excellent, painfully obvious observation that too often gets missed by managers and ICs.

Everyone here has (or should have) a job description they were hired under that defines the responsibilities and expectations of the position. These key deliverables really need to be discrete commitments that spec out what needs to be accomplished, and that can be measured against when the results are evaluated at review time.

Too often I see folks filling review commitments with stretch, non-crucial goals focused solely on getting that (now semi-obsolete) 4+ review score. Job #1 more often than not gets relegated to a single commitment -- assuming it doesn't get left off altogether.

Result: how do you ding someone for not doing their primary job role if its not a commitment? How do I focus on achieveing excellence in my primary role if I've got to do half a dozen other things just to "meet expectations"? How often have you seen someone get rewarded for a pet side project while they failed on thier primary job role (and you were left picking up the pieces)?

I think we need more focus on spelling out and measuring performance on getting the basic job done. If you get job #1 done adequately, then you can do -- and be rewarded for -- extracurricular efforts.

Anonymous said...

I recently received a gold star. It was a stock award, triple-digit shares, with a 5 year 20% vesting period. It was a complete surprise and it makes me very happy.

mo'zart said...

Mini == SteveB ?

That would be a story I would tell to my grandchildren, actually :)

Anonymous said...

In looking at any review system, there are some absolutes you have to deal with:

1. You have to evaluate someone's performance. This, by its very nature, is subjective. It is difficult to evaluate if the reviewer is indeed subjective.

2. You have to compare the performance of the reviewee to something. In a curve, you evaluate the reviewee to other peers. In a non-curve, you evaluate against established baselines. Curves are used, typically, to find the 'best amongst equals' as in University grading environments. They are also useful in protecting the reviewee against poor professors/managers. If the best score is a 65%, a 60% performer is looking pretty good and the professor/manager is suspect.

Non-curves are used, typically, where there is a desire to remove accountability or responsibility for an evaluation from the reviewer. Government, unions etc use this. This allows the reviewer to say 'you got a 94 on the scoring system'.

3. There is a finite amount of reward to be distributed. If this wasn't the case, a loaf of bread would cost $365.

Given these absolutes, how can we craft a review system that actually works? Let's look at the requirements:

1. We do not want the manager to have absolute control, but we do not want a non-curve either.

2. We want to find the real under-performers, not the ones that are cross-wise with their manager.

3. We want to distribure the rewards fairly, such that those that do not get rewarded still feel the system is fair and the problem is theirs.

Given these requirements, what will work? Let's address them one at a time:

1. The manager and the worker establish, in writing, what the 6-month measurables should be. It has to be done every 6 months, the world changes to quickly for 12 months to really work. These are not a secret, in fact let's publish them within the company. This allows anyone to see howe I am being measured by my manager, as per our agreement. This act of publishing will have a remarkable affect on the generation of the measurables and keep both parties very honest.

2. The review MUST include a 360 evaluation. The reviewee picks three, the manager picks two others. These five evals are added to the manager's and the reviewee's eval to create seven data points.

3. An aggregate score is created from these evals, with each eval being scored from 1 to 10. These scores are determined by the reviewee and the manager and MUST be agreed to. If they cannot agree, the next manager up gets involved and the scores are agreed to between the three.

4. These scores are published as an update to the published review. The fact that the scores will be published will definitely change the process and the thinking, and not allow a vindictive manager to punish the innocent.

5. If the review is still not acceptable to the reviewee, there is a committee it can be appealed to. This committee is of people from other groups, not the group the manager/reviewee is in. This group (kind of like jury duty) can hear the arguments regarding the specific score under appeal and render a final decision. THere are no further appeals.

6. Rewards are distributed based on the final aggregate scores and reviewed by HR to make sure the manager is sticking to the curve.

This system eliminates sandbagging, vindictive managers, playing favorites and closed-door rankings. It creates accountability and fairness.

Thoughts?

Anonymous said...

When a sports team is having a few terrible seasons in a row you fire the managers and coaches, not the players. Then, if there are players who don't perform under new leadership, you move them along.

I think "fixing" our problems needs to start with new blood at senior leadership level. Maybe start with a 360 review of all managers above a certain level including a people-management performance assessment, replace the bottom 50% with a mix of internal and external recruits chosen for proven leadership and management talent.

Rather than a big RIF, how about a headcount freeze with attrition in back-office, non-essential roles (anyone not actually designing, coding, testing, marketing, selling or supporting software...like all those middle managers writing reports to each other) not being replaced. Take the headcount thus "freed" and hire folks in roles that actually create software or work directly with customers and partners to get it deployed.

And maybe instead of 65th percentile comp we should pay 90th and be much tougher on performance assessment. If we pay the best and expect and demand the best, I think two things happen: 1) the best candidates will want to be here and 2) those who have the potential but maybe have been beaten down by the system are given the chance to walk the walk, deliver the goods or take a hike.

Make all of this transparent and maybe, just maybe, we start to see the Microsoft we'd like to be part of...

Anonymous said...

Everybody talking about accountability vs. commitments has been asleep during all their reviews. When was the last time the commitments you wrote down even vaguely matched what you did all year? Microsoft is too dynamic to predict what you're going to be working on in a year. Why even try?

Asking managers and execs to write down some BS commitments and try to track them is just creating busywork.

What I'd like to see is an evaluation of the decisions they make throughout the year. Did they say something should be written in .NET and consequently it was delayed and had to be rewritten? Did they cut a feature in M1 without thinking things through and now it has to be done as a DCR after code complete? Did they decide that Office 11 needed to sim-ship with Longhorn? These kinds of things are what managers should be held accountable for.

Cheopys said...

I have one reason for not being on board Mini's passion for RIF: there are too many enclaves at Microsoft where many talented people cannot achieve.

When I was working on Vista with its Randroid approach to achievement I was doing 2.5 level work. All the soul searching and determination I could muster could not improve my productivity. Wrestling with a build system and checkin system that required to me keep track of steaming heaps ever-changing crap details outside my nominal work was simply overwhelming and frustating.

I quit, I came back as a CSG in a group where the build system is no more complex than it needs to be, and I am doing 4.0-level work again, as I have done most of my career.

I think anyone working in Vista should have a full point added to his review score.

The point is that while I was unable to do better than 2.5 level work I was still the same person who had done 4.0 work in the past; it wasn't any lack of dedication on my part that had me underperforming, it was a completely fucked work environment whose emotional toll was unreasonable.

Don't be so hasty to get people fired, Mini. Inside of a lot of 2.5s there lives a 4.0 performer who tolerates distractions less than others.

Anonymous said...

The impenetrable social networks manifest themselves at multiple levels and scopes at MS, and we even have virtual fiefdoms going which span disciplines and multiple teams. No question it's a big blow to productivity, and if you ask me it's what turns the company's motto of "realizing your potential" into a big lie for a large group of mid level high performing employees like myself.

These social networks exist, in part, as a response to the subjective performance management system at Microsoft.

I've seen groups of people travel from product group to product group with a manager because they know what will happen at review time.

I've seen people come running back to our product group after they ran into a nutty manager in another group.

Managers at work also have friends and treat them preferentially over others working for them (what "visibility" really means). There's no way around it. If you're not one of those friends and you're ambitious, you'll have to try again somewhere else to join a social network.

Michaeljon Miller said...

On the gold star thing. I hadn't heard of the program or the process until a dev mgr happened to drop the term once while complaining about other dev mgrs. At the time, in Feb '01, I don't think the program was well-known at all.

That said, I did receive one and I had the same experience as another commenter: I noticed it while dealing with expiring options and had no idea where the extra options came from. I still don't know why I got it, and the GM who delivered the message simply handed me a letter and said "congratulations, nice job". Unlike the other commenter, I didn't get the 4.0 in August; instead I was asked to find a new job. Some process...

On the "who is Mini" thing: who cares, Mini is giving us all a place where we can openly talk about the mess that Microsoft has become and maybe given us some way to make it better.

Anonymous said...

Regarding Gold Star awards...I'm confused. I received a Gold Star award a while back...like maybe 2002...and it was in the form of stock, not cash. I just checked and it was about 4500 shares which are still under water at about $27/share. C'est la vie. Maybe they changed the awards to cash when the stock started sucking...

Anonymous said...

Gold Star discussion more than usual... have you ever been awarded a Gold Star?

I was awarded a Gold Star a couple of years ago. The award consisted of:

1. A nice cheque;
2. A nice letter from my director;
3. A nice request to not mention the award to anyone.

Huh? If the purpose of this award is to motivate top level work, why on earth should it be kept a secret? And what other possible purpose could such an award have?

Ah well. The money has been spent. The letter is somewhere in a huge stack of paper. The secret remains, ummm, a secret. I continue to do what I consider top level work. Maybe one day I'll get another super-secret prize. Not that I'll tell anyone about it.

Anonymous said...

While I'm typically in favor of people "coming out (sic)," don't do it Mini! We need your anon rabbling and platform. Once you are known, you are in the crosshairs. (hence my anonymous post)

Anonymous said...

There are about 15% of people in our org who do nothing but sit in meetings and "report status" to each other.

This pretty much hits the nail on the head for me. The problem in Microsoft isn't so much the quality of management, it's the quantity.

There are very many people in "management" positions with a tiny number of direct reports. Of course, these managers need to fill the hours of each day, and what's more comfortable than arranging and attending one meeting after another with like minded people? Given that they aren't ICs and therefore can't actually code, or test, or sell, or support, or do something else truly useful, it's inevitable that they will get together and strategise, plan, review, pontificate and generally add less than no value.

Some years ago there were moves in HR to focus on management span of control and organisational depth. A simple next step from Lisab would be to FORCE Microsoft organisations to move to a minimum span of control (say an average of 10 reports per manager) at every level in the organisational hierarchy. At a stroke you would dramatically reduce the number of managers, give the remaining managers real work do to i.e. focus on supporting their teams, and release some really talented people to make contribution in IC roles (or move elsewhere if they can't).

From a formerly frustrated manager, now a much happier IC!!

Anonymous said...

Mini ,i'm jealous of what you've been able to achieve through your blog. My company is having the same kind of problems: too much cash, too much dead wood on top, and a disgruntled workforce... Even though we're somewhat smaller, in Europe, stack rank goes by another name, ... I can really connect to what your colleagues comment. I guess your analysis will prove correct for many large companies.

Anonymous said...

Rumors are swirling (including on Reuters) that Ballmer is on his way out. Let me emphasize one word: rumors.

Assume, just for fun, that it's true. The question is, then what? Or, then who?

It could be good or it could be bad, depending on the replacement. It could be just what MS needs. Or you could wind up looking back at the good old days when Ballmer was running the show...

Thoughts?

MSS

Anonymous said...

"Steve Ballmer has been everywhere lately, apparently doing some sort of public penance for recent Microsoft missteps over its $2-billion expense surprise. This interview is typical of its frustrating sort, with Ballmer clumsily spinning and generally trying to fruitlessly position Microsoft as an innovator rather than as cash pump that it is.

An aside: The editorial comment in the following snippet made me laugh:

Q: Sony's helping you out there, too.

A: (Loudly:) We're off to a great start! We're happy for the runway we've been given! (Voice returns to normal.)

Only an interview with Steve Ballmer would need to contain periodic editorial annotation about the interviewee's oscillating volume."

Hanging With Steve Ballmer -- loudly

Anonymous said...

"PS: while I toy with the very unlikely idea of coming out from the realm of anonymity and scheme about how to turn Mini-Microsoft into an internal dialogue for honestly improving from within...".

Not a good idea imo. W/O the public visibility, you'll lose some of your allies (analysts, media, shareholders, etc.). It would be nice to think that snr mgt would respond to just logic or doing the right thing, but in reality, I think it's obvious that they respond best to pressure. An exception would be if they were smart enough and sincere enough to put you into a senior role with some teeth aimed at improving the company by removing roadblocks and other impediments for employees. But that one is unlikely - in their mind you've made them look bad and that won't likely be rewarded (never mind that what you really did was hold up a mirror).

Anonymous said...

Mini - regarding shedding your mask of anonymity, be very careful. According to well placed sources in LCA, exec management considers you public enemy #1 and the day you are outed is the day you'll join the unemployment line followed by a massive lawsuit. Make no bones about it, there's a bounty on your head and no shortage of slimy company attorneys who want to be the one with your head mounted in their trophy case. The last thing management wants are more Minis running loose tell them how to run their business. That's why they're so keen on making a very ugly example of you.

So please, for the sake of all of us who actually believe you're doing some good, stay in the shadows. You're far more effective as Batman than as Bruce Wayne...

Anonymous said...

I've gone through our *trax chart (about 110 people in the org) and for each person asked myself whether we could do without the guy/gal or not and what this person is doing.

Turns out we could fire 30% of people and that I think would improve our agility pretty drastically. There are about 15% of people in our org who do nothing but sit in meetings and "report status" to each other. About 5% of folks in our group have "Director" in their title and some directors report to other directors.


I can bet my house that you did not put yourself in that list of 30%. Typical ain't it? Everybody thinks every one else should be fired. Don't forget what they say, 'While pointing a finger at others, 4 other fingers are pointing back at you'.

You may be too dumb to realize that the Director title is a generic 'catch-all' that musn't always be followed by an org.

And Mini, I know how you are dying to enjoy this feeling of success publicly. You bets to fight that feeling. In case you haven't realized it, being Mini is similar to being Deep Throat. You let us in on the secret when you are closer to the end of your time on earth.

But if you insist and unmask yourself, I'll be among the first to pay you an early morning visit and make sure that you will never blog again. Believe it or not, despite my happiness that your blog has brought changes to MS, there have been days when I have felt like strangling your character for giving those open source eunuchs an avenue to disparage my MS. Just lie low and enjoy the towels

And Lisa, I didn't know that your deal involved a switch from Farmers Bros to Starbucks until it was brought to my notice yesterday. This is way bigger than towels. The Farmers Bros stuff is shittier than shit, and for this change to Starbucks alone, Lisa you are my Shero.

ex-msft said...

If this is the way that Microsoft treats their customers, it won't matter if Vista is the best thing since sliced bread.

Apologies Apologies Apologies Apologies!!!

Anonymous said...

"I really don't understand why this performance review stuff has to be so difficult at MS. "

Because everyone is compared to one idealistic career path/performance vector.

Statistically, not everyone can be "stellar" - but in no way does this mean that they have no value.

Folks that are steadfast, methodical and dependable most certainly can be characterized as stellar, just not in a way that MS culture recognizes - they're just seen as "average". Unfortunately, "stellar" if frequently confused with "noisy and good at self-promotion".

But without this set of people no idea - however brilliant - will make it to fruition, as in many cases, the folks who come up with a brilliant idea which never makes it beyond prototypical form. Once the problem is solved, in many cases, they move onto the next thing. Our "steady" folks actually realize the idea.

Imagine a culture where all we have is half-formed, half-finished ideas running rampant, but o "products". That's what could happen by not engendering a "middle class" (if you want to look at it that way) of employees, and making this an acceptable career path.

In the (now defunct, haha) stack ranking meetings, it becomes clear that a plateau is acceptable... for developers at least. 8 years in level? No problem. Test and others - 3 years in level, and you're "flagged" for lack of progress.

Obviously, there are people with performance issues who do not provide value of any kind - I'm not suggesting that these folks be kept around. But there should be ways of classifying people who provide awesome, but unorthodox value:

- People who do work that no-one else cares to do
- People whose jobs have little chance of career progression, although the work is important
- People who, by there just being there, catalyze the team into higher performance, although their "measured" contribution may not be in the stellar category
- Great communicators, concensus builders

Anonymous said...

Wow what great comments here. Here are some thoughts on what I've read.

on mini's impact
I have no doubt that this blog has had a huge impact. This is a much better forum than the MS Poll. I didn't respond to the poll this year but I've posted here several times. Suggestion to those responsible - get rid of the poll, read mini instead. You'll probably save a few million $ by killing the poll. Admittedly some comments here are useless - it would be nice to have a reputation meter on the feedback.

on the announced changes
I honestly think about the review process for a few days a year. The rest of the time I spend enjoying my job. So for me this meeting didn’t amount to much. What I want to hear is accountability starting at the very top. This company is Windows (and no I don’t work in Windows I just appreciate where my paycheck comes from). It’s a travesty that this #1 priority business has gone 6 years without an update. I’m tired of steve and bill “betting the company” what I want to hear from steve is “i’m staking my job on this – we will ship a significant update of Windows every two years or I’ll step down”. That would really mean something to me. It’s easy to bet the shareholder’s stake I want to see some personal accountability!

on greedy employees
I call BS on that. Microsoft invented a better way to compensate talented employees. Google is now improving on the formula. As a developer that is good at what I do I want to believe that MS will compensate me appropriately. I’m a L65 dev and I know that I bring plenty of value to the company. However if I believe what I read here, there is a 20:1 ratio between partner compensation and mine. That is obscene. I’m not being greedy. I just want my fair share.

on increasing stock grants
Does anyone want to bring back options? I do. If I get a 1500 share grant what’s my delta if the stock grows by 25%? $8k spread over 4 years. Not enough to motivate me. If the growth was the reward that would motivate. Bring back options!

Anonymous said...

Anyone want to comment on the recent news that MSFT (we) asked 1000 CSGs to take a week off without pay? What is this all about? My thought is that we could cull the ranks of CSGs re-assign some work to FTE, then pay about half the savings back to employees. Overall get more work done, by happier employees. Thoughts? What's going on?

Anonymous said...

"The technical picture isn't extremely impressive. MSFT has underperformed the Dow Jones Industrial Average (DJIA) on a monthly basis since January 2001. I would venture to say that a stock with this poor technical offering would need to be treated like a red-hot iron . . . hands off. Common sense says that this stock is not one to have in your portfolio.

...The only thing blue about this blue chipper is the faces of its investors as they hold their breath waiting for short-covering support. Less than one percent of MSFT's available float is sold short, and it would take less than one day to cover these pessimistic positions. This configuration leaves me asking the question; what will act as a floor to MSFT's fall?"

Microsoft

Anonymous said...

"The only change I really want from Microsoft is that we deal with the lack of accountability that allows poorly performing middle managers and executives to stay in their positions clogging up the works."

LOL. Who hired all those middle-managers and who keep providing air cover for the system which protects them? Change your "middle" to "senior" and I'm with you. More importantly, only changes there will change the middle-mgt problem as well.

Anonymous said...

"When a sports team is having a few terrible seasons in a row you fire the managers and coaches, not the players. Then, if there are players who don't perform under new leadership, you move them along."

True, but then in this case, senior management are major owners and deny having had even one terrible season. So what to do?

Anonymous said...

Microsoft contractors to take 7 days off

I propose that every FTE at Microsoft is offered a physical briefcase full of 6 months salary -- in exchange for their badge and parking pass. I think the right people -- the triple 3.0's, not promoted in four years, etc. -- would take up on it. The difficult part would be preventing them from getting hired again...

Anonymous said...

"Some years ago there were moves in HR to focus on management span of control and organisational depth. A simple next step from Lisab would be to FORCE Microsoft organisations to move to a minimum span of control (say an average of 10 reports per manager) at every level in the organisational hierarchy."

Agree that low span of control is a major problem. Not sure about "forcing" 10:1 but agree that's a decent target rate and certainly any manager with less than that should have to do some seriously justification.

Gwen said...

Come out from behind the curtain? Have you lost it all, man! As that freaky No Doubt (minus the band) dittie goes... "Whachadoin? ... they gonna kill you!" (the last part in whispers). They will, you know.

Anonymous said...

Furious at Mini's impact, Bill and Steve have gone into the backyard and kicked the dog (Put 1000 contractors on a week's unpaid vacation.) Not what I'd expect from Harvard elite, but the frustration is understandable.

Now that the HR scales have balanced somewhat maybe we can return to work (without the fear of being mugged by coworkers for our stack scores.) There is lots to be done. Removing the fortifications from around yourselves is a good start. All that time you spend conjuring up new ways to justify your existence. You can stop doing that. You are going to be here this year, next year, and the year after. You may not like how your role is classified, or what you're paid, but you will have the option to remain onboard and contribute - or walk. There is plenty to do so let's climb up out of our bunkers and get going. Near-term, this is the best deal that we're going to get.

Anonymous said...

I am an FTE (not a CSG), but I found the story about asking CSGs to take off a week without pay disturbing.

Whether or not you think there should be more or less CSG’s at Microsoft, the fact remains that these people were asked to give up a week’s worth of pay unexpectedly as a cost savings measure.

“Injustice anywhere is a threat to justice everywhere.”
Martin Luther King Jr., Letter from Birmingham Jail, April 16, 1963

Anonymous said...

We have a ton of marketing people that seem to multiply like rabbits.

Sounds like they're good at fucking people. I guess that puts them on the management fast-track.

I'd like execs to be a 100% transparent in their commitments and be visibly dinged when they don't meet them.

You get part of your wish. Some of the commitments for the managers in your org will be visible via the online tool.

I'd also love to see them held accountable, but I doubt that will ever happen. How many execs have taken "extended leaves" and have never come back? That's the way management gets fired.

I'd like to see HR actively investigate orgs that visible evidence of morale issues such as high attrition, blanket bans on "permission to interview" and really low MSPoll scores. Problem areas should be identified and management be encouraged to address them, if the problem is the immediate management then HR should skip levels to address the issues.

I've worked in an org that had most of these same problems. Many folks (including other managers) were BEGGING HR to step in. All they did was listen to the complaints and agree with them. They knew a tyrant was in charge, but they did nothing to try to fix it. Which is just one of many reasons why I think we could purge the HR ranks and not really get hurt too much.

The point is that while I was unable to do better than 2.5 level work I was still the same person who had done 4.0 work in the past; it wasn't any lack of dedication on my part that had me underperforming, it was a completely fucked work environment whose emotional toll was unreasonable.

Sounds like you're really just a 2.5 performer at heart. EVERYONE deals with a fucked work environment. Work past your blocking issues. If you can't, escalate. Keep pushing it up the chain. Work cross group if you have to. If you don't have the drive, make your boss do it. But if you don't have the drive, then you probably should just be a CSG. And before you take that as an insult, remember that you're getting paid a lot more than FTE's doing the same job.

Mini - regarding shedding your mask of anonymity, be very careful. According to well placed sources in LCA, exec management considers you public enemy #1 and the day you are outed is the day you'll join the unemployment line followed by a massive lawsuit.

With all of the internal info published here, I'm surprised that lawyers haven't already contacted blogspot.

Anonymous said...

Mini - regarding shedding your mask of anonymity, be very careful. According to well placed sources in LCA, exec management considers you public enemy #1 and the day you are outed is the day you'll join the unemployment line followed by a massive lawsuit. Make no bones about it, there's a bounty on your head and no shortage of slimy company attorneys who want to be the one with your head mounted in their trophy case. The last thing management wants are more Minis running loose tell them how to run their business. That's why they're so keen on making a very ugly example of you.

So please, for the sake of all of us who actually believe you're doing some good, stay in the shadows. You're far more effective as Batman than as Bruce Wayne...


Mini - It's not just LCA, but also compliance and security folks who could be on the lookout. Obviously, you're smart enough on traceability -- using neo -- but definitely watch out. Hopefully you know to never ever use Mini's macbine for work stuff. Besides the trace problems, they could try to make a case of misusing MS info/infrastructure/etc -- that's an automatic head chop. We have internal folks who spend all day tracing mac and IP addresses -- mainly for porn and industrial espionage. These folks are not independant thinkers, either.

The relevant orgs are security, fraud/compliance, HR-LCA, and LCA. If you're a techie, you should have enough ability to cover your tracks. Also, always good to have a great attorney in your back pocket, and some dirt that makes your safety invaluable.

Anonymous said...

Microsoft: Take a week off--unpaid

http://news.com.com/Microsoft+Take+a+week+off--unpaid/2100-1022_3-6075405.html?tag=nefd.top

Anonymous said...

I am an FTE (not a CSG), but I found the story about asking CSGs to take off a week without pay disturbing.

Whether or not you think there should be more or less CSG’s at Microsoft, the fact remains that these people were asked to give up a week’s worth of pay unexpectedly as a cost savings measure.

“Injustice anywhere is a threat to justice everywhere.”
Martin Luther King Jr., Letter from Birmingham Jail, April 16, 1963


LAME. This is the tradeoff you make taking a contract position vs. FTE. The company you contract for owes you nothing but what's in the contract. That's the deal you sign on for. Want to be mad? Be mad at the contract labor company for putting all their eggs in the Microsoft basket. (If they are.)

Comparing (highly paid) contractors not working a week to the work of Dr. King cheapens his legacy.

Anonymous said...

I propose that every FTE at Microsoft is offered a physical briefcase full of 6 months salary -- in exchange for their badge and parking pass. I think the right people -- the triple 3.0's, not promoted in four years, etc. -- would take up on it.

You do realize you have it backwards, don't you? The good people -- the ones who can do well elsewhere -- will take the money and the poor performers (the ones who need the security) will stay. I know. I've seen it done elsewhere. It is a mistake that MS knows not to make.

Anonymous said...

Like a dog who hasn't yet found a bone that it doesn't like, our mission is making money whereever we can and however we can - this approach is disaster...

This rings very true. "Don't leave money on the table", you're told. I'm really not sure what to think anymore. I want to write software that provides value to customers.

Anonymous said...

As a former CSG (and recent FTE convert) I can honestly say that I don't feel like it's some great injustice to ask them to take a week off. I'm really sick of contractor's whning about the way they are treated. When I signed on I knew exactly what to expect, and those kinds of things are par for the course.

If you want to be angry, be angry at Volt et. al for treating its employees the way it does while milking MS. If Volt gave two shits about its employees, they would cover that week at 50% of the normal pay for its people, or more. When they're getting $45/hr from us and giving their employee $25 of it, they can cough up some extra cash once in a while.

Anonymous said...

A simple next step from Lisab would be to FORCE Microsoft organisations to move to a minimum span of control (say an average of 10 reports per manager) at every level in the organisational hierarchy.

Good idea, but how do you grow new management talent then? You don't want to give a new manager 10 people right away. As long as the team size is increasing and its a new lead, 10 sounds like a good number as a final goal.

ex-msft said...

On gold stars, when I was given one, my skip-level manager called me into his office. He asked me how the project was going, nodded in agreement, handed me a piece of paper signed by the VP and told me that I would be getting $1000 extra in my paycheck. This was in 2002.

Then, he told me that this had nothing to do with my performance review which just happened to be about ready to hand back to us, and that I shouldn't tell anyone about it, not even tell my lead or manager.

The whole thing seemed bizzare.

A few years later, I checked around and only a couple people in my group had ever gotten one.

Anonymous said...

"dislike over Ballmer asking Google users to raise their hands"

No dislike from me. Bring it on! The company has a great tradition of "dogfooding." And of course you should be helping to improve our search, not putting money into the pockets of our competition.

Sure, Ballmer could find out with some IT logs how many people use Google, but some public justified shame is fine with me too. If you answered wrong, then good for you for being honest--now just get right with your co-workers and switch to MSN or a comparison tool.

Search is one area everyone can help with. For the folks within Windows: are you selfhosting Vista yet, every day, on your primary system? I'd support any show of hands at the next release party or Windows meeting. Get on it and help it ship! Ditto for Office, too, but I think they get it the best of us all.

Anonymous said...

heard so many people getting gold star awards and i'm not even getting near one. this sucks big time!!! i'm a dev in a product group and avg review score is 4.1. what the heck is wrong with this company?? how come almost everyone i know in msn has got 1 or more gold stars. should everyone just go join msn because there are more perks there?? this is sooo unfair.

Anonymous said...

>>With all of the internal info published here, I'm surprised that lawyers haven't already contacted blogspot.

For all of you comments who keep wishing Microsoft were more like Apple - if SteveB was anything like SteveJ, Mini would have long been in a "John Doe" lawsuit.

Salary Facts said...

Please no more whining about salaries compared to Google. Just read through the comments to read about how Google salaries are below market (towards the bottom):

http://tinyurl.com/rmfz4

Pretty consistent with what I've heard as well for new employees. You get the same pay, or slightly less, but the honor of working for Google.

I think I've heard that one before.

Anonymous said...

Just some thoughts on forcing changes:
If you really want to see top management walk, get the top performers like the SQLServer team, to threaten a management buyout if the current top management stay, on account of being unable to work satisfactorily with them in charge.

You can't fault the SQLServer team - SQLServer is perhaps the most highly regarded product Microsoft has, and I can't see them being turned down by the VCs.

Given the choice between putting up with a CEO with a chair-throwing fetish, and retaining one of the most solid performers, I think your average investor will kick the CEO off.

Anyone got any comments on this?

Yours Eponymously
Epon

Redeemed said...


But if you insist and unmask yourself, I'll be among the first to pay you an early morning visit and make sure that you will never blog again. Believe it or not, despite my happiness that your blog has brought changes to MS, there have been days when I have felt like strangling your character for giving those open source eunuchs an avenue to disparage my MS.

It is comments such as these that strengthen the image of MS as a bully, and galvanize the opposition to bloody the bully's nose.

Anonymous said...

Could there be something else behind the contractor time off move? Maybe the beginning of the process to shed headcount starting with the contractors? Something like, "let's have these 1000 people take 7 days off and see if we can live without them".

When I first read the story, the "stay on budget" justification seemed to make sense at face value. Thinking about it however, this doesn't seem to make much difference financially in terms of making/missing budget numbers.

1000 contractors * 40 hours = 40,000 hours

Avg rate - maybe $85/hour (depends on the type & location of the contractors involved). Plug in your estimate.

40,000 * $85/hr = $3,400,000

This isn't a budget busting number corporate wide. Even if this is coming from a single division, this amounts to a rounding error as any division using that many contractors would have a huge budget to begin with.

Lets assume for a minute that this is all a single division and that the ratio of employees to contractors is 6 (again - I don't know what this number is - but even plugging in a wide range of numbers the case stands). Also, that the average cost including salary, benefits, taxes, etc of each employee is $100,000 (total guess). To simplify, assume that the total number of contractors in the division is 1000. If so, I come up with an annual ee & contractor budget of:

$170 M (1000 contractors * 2000 hours * $85/hr)
$600 M (6000 ee's * $100K)

$770 M Contractor & EE expense

$3.4 M / $770 M = 0.4% variance

Keep in mind that if you add in all the other non-ee expenses of the division(s), this variance percentage would be even lower.

As a former corporate financial analyst (not at MS), in my experience this isn't the type of variance that raises eyebrows. Saving 0.4% isn't going to make or break a budget.

It would be one thing to do this as a cost cutting move over an extended period, but 7 days just doesn't have a meaningful effect. There has got to be more behind this...

Anonymous said...

I propose that every FTE at Microsoft is offered a physical briefcase full of 6 months salary -- in exchange for their badge and parking pass. I think the right people -- the triple 3.0's, not promoted in four years, etc. -- would take up on it.

-

Great idea! I will take six month paid leave and then come back join the same group ;-).

Moe said...

How self-serving is Mini? Would Mini be one of the people to be fired in a massive lay-off? What of people who have been hired in the past few years who have all the good intentions of working and making MSFT be the company they dream it to be? Do we really think that the non-compus-mentus management will be in the first, second or even third wave of people that are pounding the pavement? I find it somewhat disingenuous that I should be working with people who would rejoice in the demise of fellow employees. Perhap the reason my OHI scores are in the crapper is that.

Anonymous said...

I vote to reduce HR by 30%.

Anonymous said...

the answer to that is easy, make sure there are enough dollars for everyone if they perform at the level you asked them to

Amen, brother. If you encourage employees to perform excellent work, you better be ready to reward them if they do.

Alternatively, if you set fixed budget ahead of time, don't get surprised when you get fixed performance (less effort spend on internal friction due to stack ranking).

Having never received a Gold Star handlout, but I'm noneless content with my $100/hour current working arrangement (FTE working 20 hours a week). If I wanted more work or money, I would look into moonlighting.

Microsoft obviously agrees that my work is worth this much on hourly basis. Those who work 50-60 hours on a fixed salary are setting the wrong expectations for MSFT, and undermining those of us who know the value of their time.

Anonymous said...

"It would be one thing to do this as a cost cutting move over an extended period, but 7 days just doesn't have a meaningful effect. There has got to be more behind this..."

Come on, you know how the meeting went:

[Ballmer sits down with his core savants - at a super expensive retreat because they know they won't be leaking the meeting to the media this time]:

"Men, there's been a strong reaction to our recent spending news and the market has shaved $40B off our stock. We need to act. I want ideas".

[partner who's savvy business-wise but not so savvy in MSFT's uber political culture - probably an outside hire]

Well Steve, couldn't we start taking a harder look at all those money-losing projects we're involved in and either can them or scale them back? We could also take a look at some of that management headcount since we have a average span of control of maybe 5:1, which is far below industry peers. Plus, some of those core divisions are looking pretty heavy from an overall staffing perspective.

[SteveB] Are you nuts? [sound of chair being thrown] Don't you realize we've told everyone those pigs are going fly one day? We're not cutting them back - that'd be like signing our own death warrant. And cut back management? Did you forget the management oath? We never cut back on ourselves. And we're not riffing employees in the core divisions. I just finished telling the media we had 64K talented employees. What am I going to do, go back and say we only have 60K now? No way [sound of another chair being thrown]. I want even more employees not less goddamnit - we're taking on everybody. Other ideas?

[brain-dead, overpaid, longtime - read super political - partner, having just gotten off the phone to his contractor in Tuscany and complained to hotel staff that the foie gras wasn't up to snuff and the Hermitage was an off-year]

Well Steve, couldn't we get away with just a token gesture? You know, something that "looks" like we're cutting back but in reality we aren't"

[Ballmer] Go on.

[brain-dead partner] Well, let's say we asked 1000 contractors to take a week off. It would only amount to about $3-4M, but think of the headlines: "MSFT asks 1000 contractors to take 7 days off in unprecedented move to reduce costs". Plus, Mini can't get pissed off and get our employees on the warpath because it doesn't affect them directly - so it won't detract from our "we love you, really we do" meeting last week.

[Ballmer] Gump, you're a goddamn genius! I want this plan implemented and ASAP. And give yourself $10M worth of shares as a bonus - that's the kind of innovation and creativity that built this great company.

Anonymous said...

http://www.gladwell.com/2002/2002_07_22_a_talent.htm

Anonymous said...

It would be one thing to do this as a cost cutting move over an extended period, but 7 days just doesn't have a meaningful effect.
We have 3.4 M saved by the 1,000 hours week off. With 20K contractors worldwide,
that would be 60 M dollars savings if all contractors would take a week off per year. Now how about 4 weeks off during the year= 240 M per year in savings. Now we're talking.
Four weeks off per year anytime sound great to me, even if unpaid. Just give me time in advance so I can plan ahead.

Anonymous said...

How self-serving is Mini? Would Mini be one of the people to be fired in a massive lay-off? What of people who have been hired in the past few years who have all the good intentions of working and making MSFT be the company they dream it
to be? Do we really think that the non-compus-mentus management will be in the first, second or even third wave of people that are pounding the pavement? I find it somewhat disingenuous that I should be working with people who would rejoice in the demise of fellow employees. Perhap the reason my OHI scores are in the crapper is that.


I have to agree with this sentiment as a former Microsoft employee and manager. In the event of a layoff the people who have created the culture at Microsoft will not be laid off and to avoid lawsuit of bias and discrimination the company
will have to devise a plan that will appear to be objective such as past review scores. Clearly as the review process is quite political, such subjective criteria will be used in the case of a RIF. One such plan that Mini as suggest such as spining off departments could be an effective way for Microsoft to reduce its size.

It was reported today that Microsoft has furloughed (although that not the press term they spun it as though Orange badges "volunteered" leave without pay) contractors. This lack of commitment to contract will put a damper on good contractors accepting assignment at Microsoft. I recently accepted an assignment at Microsoft that was to be for 11 months and was riffed after 6 months. Having the experience of working at Microsoft and having no trust in the management I started my search three weeks prior. The manager informed me about being releaved with only two days notice -- not even with the courtesy of a two weeks. When I was a manager I provided contractors at least two week notice out of fairness and courtesy. Fortunately because I took precautions, I found a new assignment three days after being riffed.

Having left Microsoft and having contract assignment for other firms, I can say without a doubt that Microsoft was my most worst contracting experience to date and it only comfirmed why I left the company. I am currently working now for a firm that respects my talents and skills with people who are FORMER MICROSOFT EMPLOYEES.

The point of this parable is to emphasize that the problem is not the people -- the so-called "individual contributors" -- it is the sociopathic nature of the company originally established up by BillG and SteveB. They were able to conceal its anti-social behavior becuase of their "faux" success. Now that the market for software has been irreversibly altered the company cannot change its fundemental ideology. Mini's expression of riffing people with no concern of the how their life plans have been structured by the promises the company made to them demonstrates the sociopathic mentality one must have to "succeed" at Microsoft. Notice that once Microsoft employees leave that environment that they often actually do great work and retain some semblance of their humanity.

Anonymous said...

wow, blue badges get their towels back and the orange badges get 7 days off without pay "to meet budgeting goals"....coincidence? I think not

way to be team players, temp employees - maybe at the next 'moral' event, you'll even be allowed to drive the bumper cars!!

Anonymous said...

"The research team at Goldman Sachs has out a useful report on the current option backdating brouhaha. Sherlund & Co. report that the GS software coverage universe includes a few high-profile companies that are apparently staffed by some veerrrrry skilled stock-pickers:

Companies that screen with 20% or more of their grants within 5% of their lows for the 20-day before-and-after period include Mercury Interactive, Quest Software, Microsoft, McAfee, Adobe, Business Objects, and CA."

But Steve doesn't know what makes stocks move? Sure.

Anonymous said...

With all of the internal info published here, I'm surprised that lawyers haven't already contacted blogspot.

You keep forgetting that blogspot is really Blogger, which is really Google.

Mini, Your identity is safe with us!

dead wood said...

Commitment Zero?
How about Commitment -1 or -2?

One of the things that irked me to no end was managers who couldn't mentor because they didn't know how to do the job even one level below them.

Just pointing to a result and saying "That is bad" isn't constructive. ...or perhaps that was his way of managing me to failure so that he could manage me out and protect the rest of his team.

Maybe every three years, it would be nice to see managers reviewed on a commitment -1 and -2 level.

Anonymous said...

it's amazing what a disaster MSFT has turned into. I worked at MS for several years and left a while ago to start my own start-up in silicon valley. Everyone here thinks they are the next IBM. No one even uses their technology anymore. I could not get the MS sales people to convince me to use their products. the free stuff was just as good!

Anonymous said...

It is comments such as these that strengthen the image of MS as a bully, and galvanize the opposition to bloody the bully's nose.

So what do you want us to do with the opposition? Hold hands around a camp fire and sing Kumbayah?

That is not how the west was won my friend. You should anticipate the blow that might bloody your nose, duck, and hit the opposition doubly hard in the nether area. Although for the aforementioned eunuchs, that might be titillating.

As for you, you can go join Karen Hughes in her quest for the answer to "Why do they hate us?"

Anonymous said...

Regarding CSG Week Off... This is the single reason why we use CSG to grow/shrink our work force as needed. I'm sorry if your kushy job with no real responsibilities, 3 months off every year, getting a better paycheck than some FTEs turns out to not be the perfect job. You are a CSG for a reason. Don't get me wrong, plenty of CSGs should be FTE and that's a different problem, but the CSG strategy is there to meet the whims of MS hiring. In this case, we don't need you for a week. You don't like it? Get an FTE job! Can't get hired as an FTE at MS? Then go somewhere you can get an FTE spot. Regarding Gold Stars, I’ve gotten one. It was about $5000 in cash. I didn’t get any letter or anything official and my skip level manager delivered the news.

Anonymous said...

I worked at MS for several years and left a while ago to start my own start-up in silicon valley. Everyone here thinks they are the next IBM.

Wait, are you trying to make us believe that there's someone in Silicon Valley that doesn't like Microsoft? Please, tell us more.

Drei said...

Random thoughts, after a lengthy comment break for me.

- Mini, don't ID yourself. I bet it's frustrating to hear people raving in cafeterias/at WIMs, "man, that Mini.. I'd buy him a boatload of beer if I knew him", but the frustration of being a mark is probably greater. That time is not here yet. Carry on with being an engineer for as long as you care, and when you're done, publish the book - that's the proper way. Make sure you hold a book signing session at the Store.

- the latest contractor issue: most unfortunate, I presume, but such is the dynamics of a large company. Without getting into revealing details, I find myself in a similar position - after months of interviewing, we finally found a decent CSG. However, the project that necessitated this hire was postponed, which makes the cost of the CSG appear more like a loss. I'm certain our case is not unique.

- to those criticizing lots of money-losing projects "developed" in MS (a certain quite noisy shareholder, and a certain ex-MSFT outbred exec, to name a few): progress doesn't always stem from risk-free, profit-only enterprises. The chase for ever-increasing (or merely steady) profits degenerates in short-term greed. To expect that every invested penny should bring a profit, and do so sharpish, denotes, in my mind, incipient greed.
I'll take a few, random, examples from various fields of economic activity, and I hope it's understood that the parallel is to be taken loosely.
- laying fiber optic across the Atlantic was certainly an expensive endeavour, that consumed a large amount of "shareholder wealth" for no immediate profit. Yet the world was technologically flattened that way. Its benefit is probably incalculable, though profit there wasn't.
- researching and producing alternative/hybrid vehicles is certainly (still) a money-losing effort, for every car manufacturer engaged in this. The profit for investors (those tested but magnanimous shareholders again) is absent and will be so for the foreseeable future (investment-timing). Yet absolute progress will be achieved someday.
- add here other examples of tunnels dug deep in mountains/under the sea, bridges, highways and possibly the much maligned Mobile Devices division (no, I'm not with them).
The idea is not all must be centred on making a quick profit, or we'd all be selling crack (that, or printing money). It may not be clear to some (me included) how Project X is supposed to generate progress, much less profit, but I wouldn't shoot the management for not generating more wealth, quicker (I'm undecided about the "wasting wealth" aspect, though).(Oh, and I do have examples from the Project X class, I just want to avoid more internal battles.)

I believe (naively, before you say so) that Microsoft occupies too important of a position in the field of technology to be preoccupied only with profits. It started with a vision of bringing computing into ubiquity (and has conveniently generated a great deal of wealth in the process). Its continued mission should be a natural evolution of that vision. In a sense, it owes that to mankind*, shareholders be damned, precisely because it is one of the very few companies which can afford to work (and finance) a technology into feasibility.

* Can't believe I said that, thanks for holding your condescendent laughter until the end.

Anonymous said...

I don't think we need to complain about our salaries. I feel very well-compensated, especially with our no-premium no-deductible benefits plan. I realized how important that was when my daughter was in the hospital for a while last year. I had to pay $0 out of pocket. Companies like Google don't even come close.

Anonymous said...

>I vote to reduce HR by 30%.

You have no idea. HR just shipped "My Microsoft". Everyone in HR will get good review this time around.

Anonymous said...

It's funny to see people complain about the quantity of managers who's main purpose in life is to report status to other managers. In SQL, we have a whole seperate org just for that!

Anonymous said...

As though we didnt have enough to deal with already...and now we get this:

Microsoft Employees May Lose Admin Rights(http://news.com.com/Microsoft+may+restrict+its+workers+PC+rights/2100-7355_3-6075898.html?tag=nefd.top and http://it.slashdot.org/it/06/05/23/1244200.shtml)

Who the f*** is Estberg and why does he want to take away our admin rights? I hope this is just a rumour...arrrghh!!

Anonymous said...

...job with no real responsibilities, 3 months off every year, getting a better paycheck than some FTEs turns out to not be the perfect job.

obviously, the person who made this comment has never been a contractor - it's 3 month's without pay (maybe unemployment comp, but hardly a salary, and I don't know anyone who makes more than an FTE - MSFT might be paying more, but the freakin' contract companies who compete for microsoft's business don't actually pay their employee's good wages.

They also require contractors to pay for their own benefits - with less than steller providers. No sick time, no real retirement account (well, if you don't count the 'offer' after 9 mos., just 3 mos. short of your required unemployment), and yes, they actually require contractors to sign "I promise not to play on the sports fields or run with scissors" paperwork. 1 week of 'paid' vacation at the end of your 1 year assignment hardly counts as vacation pay.

cushy - yeah, that's pretty funny


"You are a CSG for a reason"

most people don't have a choice, now that MSFT is shipping people in to work for them from China and India. how about if MSFT stopped outsourcing jobs and hired people here in this country??

Get an FTE job! Can't get hired as an FTE at MS? Then go somewhere you can get an FTE spot.

oh and where would that be?? again, another naive comment - feel free to leave MSFT and start looking for that FTE job for yourself and see how your comments change.

Anonymous said...

The CSG time off thing was a real shocker to me. But please remember that YOU DO NOT WORK FOR MICROSOFT!!! You work for a contracting agency. THEY pay you. It's up to them to make sure you have work. They've been getting rich off of you for years. I think you get about 60-70% of what MS pays to your agency. What do you get for that 30-40%?? It wouldn't hurt them to eat a week's pay. Plus it makes MS look even worse.

We did get notice a long time ago that we were running over budget. I think it's smart to do this. I don't think it can really be used as a RIF preview though. Some contractors do shit work. Some are essential to various projects.

get the top performers like the SQLServer team
You can't fault the SQLServer team - SQLServer is perhaps the most highly regarded product Microsoft has

I wonder what group you work in. Because if you didn't work in SQL, you'd be laughing your ass off with the rest of us.

This isn't a budget busting number corporate wide. Even if this is coming from a single division, this amounts to a rounding error as any division using that many contractors would have a huge budget to begin with.

$3.4 million is a rounding error in most groups? I doubt it.

I propose that every FTE at Microsoft is offered a physical briefcase full of 6 months salary -- in exchange for their badge and parking pass. I think the right people -- the triple 3.0's, not promoted in four years, etc. -- would take up on it.

-

Great idea! I will take six month paid leave and then come back join the same group ;-).


Don't forget about the 1-2 level increase and 10+% salary bump too! Leave right after review time to really maximize the benefits.

(regarding the CSG timeout) This lack of commitment to contract will put a damper on good contractors accepting assignment at Microsoft.

Microsoft will meet the contract. The extra week will happen at the end of the contract instead of now. Uh, if they're still needed. Remember, they can be asked to stay home at any time.

I recently accepted an assignment at Microsoft that was to be for 11 months and was riffed after 6 months. Having the experience of working at Microsoft and having no trust in the management I started my search three weeks prior. The manager informed me about being releaved with only two days notice -- not even with the courtesy of a two weeks.

You're a contractor. You work for a CSG agency. You're lucky you got the two days. Not every decision allows for 2 weeks notice. Or maybe that manager had a bad experience with other contractors and that's why he/she decided to only give you the 2 days.

Regarding CSG Week Off... This is the single reason why we use CSG to grow/shrink our work force as needed. I'm sorry if your kushy job with no real responsibilities, 3 months off every year, getting a better paycheck than some FTEs turns out to not be the perfect job. You are a CSG for a reason. Don't get me wrong, plenty of CSGs should be FTE and that's a different problem, but the CSG strategy is there to meet the whims of MS hiring. In this case, we don't need you for a week. You don't like it? Get an FTE job! Can't get hired as an FTE at MS? Then go somewhere you can get an FTE spot.

VERY WELL SAID!!

Anonymous said...

Well, let's say we asked 1000 contractors to take a week off. It would only amount to about $3-4M, but think of the headlines: "MSFT asks 1000 contractors to take 7 days off in unprecedented move to reduce costs".

Buffett says that companies that engage in cost cutting really don't know what its about. Bill says that he's learned more from Warren Buffett than anyone else. Obviously, class wasn't in session on 'lame accounting tactics day'.

Anonymous said...

Just a few notes on items that have been described as confidential, but aren't.

SPSA criteria is described in Microsoft's proxy statement:

growth in customer satisfaction, unit volumes of our Windows products and usage of our development tools, and desktop application deployment over a multi-year performance period

http://www.microsoft.com/msft/SEC/FY05/proxy2005.mspx

External references to Headtrax:

http://www.gotdotnet.com/team/clr/HeadTraxReport.htm: "HeadTrax is a centralized, intranet-based application that Microsoft business units use to manage human resource (HR) information."

http://channel9.msdn.com/Showpost.aspx?postid=150155: "the challenges and lessons learned in taking HeadTrax from its origins as an ActiveX Control with a client server architecture to a Smart Client application deployed with ClickOnce"

http://www.microsoft.com/technet/itsolutions/msit/hr/headtraxtcs.mspx

Anonymous said...

to those criticizing lots of money-losing projects "developed" in MS ...: progress doesn't always stem from risk-free, profit-only enterprises.

Funny, everything you list has pretty clear paths to profit. The companies that laid the fiber optic cable in the Atlantic started charging for that bandwidth the day they were finished. The companies that developed hybrid cars got millions in gov't grants during development and a slam dunk advertising campaign. Companies that blow holes in mountains to put tunnels through them don't do so for fun--they do it to save fuel and time and often to increase a route's safety (i.e., fewer lost vehicles = cost savings). OTOH, the business models for, e.g., MSN and XBox are not nearly as clear.

Anonymous said...

Several theories and/or justifications were proposed w.r.t. the CSG affair. But no one, not a single one pointed out the real reason for asking 1000 contractors to stay home for a week.

The CSG affair, IMHO, is a subtle (to Microsofties or not so subtle to anyone with a real brain) message to all Microsofties that they should accept and thank what the big shots gave us last Thursday and fucking go back to work, harder and harder.

This message was conveyed without any meaningufl impact on ongoing work. It's quite clever. But the message evidently was lost on the softies, or at least on those who post here.


You techies never cease to amaze me. This is why I will never advise my children to take up technical disciplines. Those are for losers. People say Microsofties are bright and smart. I think that myth was created to make Microsofties think they are the greatest and work for free.

Yours truly is an IC but he chose not to study engineering in college.

Anonymous said...

The RIF has already started in our group. We were told the product is over. This is a team that sits in building 44. Now I have a good reason to leave this shitty team where we spend 45 minutes reporting 'what we did this week' to each other. That is the biggest waste of time I've ever seen within the company. Bring 7 PMs in a room and ask them to act like third graders and dish out a list of what each one did this week. The one with the longest list seems like the guy doing the most work. This is on top of everyone's statuses report that goes out to the boss and is copied to the team each Friday. For the past 4 months, I've only been concerned about keeping my list longer. Who cares about committments?

I've never gotten a Gold Star Award. Frankly, this whole place stinks of a big conspiracy and its time to leave and find another place to work at, inside or outside Microsoft.

Mini, the RIF is true. Starts with contractors and product teams that can't really prove their existence, read: don't have any friends in the partner community. The management, partners and VPs are not getting kicked out and the only folks affected are PMs, Devs and Testers. No partner will be harmed in the making of the myMicrosoft Service Pack 1.

Anonymous said...

Buffett says that companies that engage in cost cutting really don't know what its about. Bill says that he's learned more from Warren Buffett than anyone else. Obviously, class wasn't in session on 'lame accounting tactics day'.

Class was cancelled on account of a bridge game.

How many people were just thoroughly insulted that Bill couldn't be bothered to show up for the all hands.

And you know what? If he's not going to show, don't tell the entire world-wide staff that he blew them off to play bridge with a billionaire.

How many of us lost tens to hundreds of thousands of dollars with the recent stock debacle?

And you know what, when he can't make it, atleast send in his relief pitcher, Ray Ozzie.

Seriously, Bill, you're standing to come across more as billionaire philanthrapist and bridge player Bill, vs. man driving technological innovation Bill.

Both are good things to be, but if you're not going to be there for us and lead us through this arms race with Google, step aside and let Ray do it.

Giving us half-time during this area of fierce competition ain't gonna cut it if we're going to win.

Saving the world is a noble thing, and is entirely worthy your full attention. Make the commitment and go.

Anonymous said...

Everyone agrees Ballmer needs to go. What would it take to 'impeach' him?

As employee shareholders, a strong no-confidence vote would force him to turn the reigns over to Johnson.

Anonymous said...

One question:

Where in the world is Carmen Sandiego.. er.. Eric Rudder?

He was leading Server & Tools to do great things and then he disappeared.

I saw what it says in the GAL about his role, but what does that translate to?

Anonymous said...

You have no idea. HR just shipped "My Microsoft". Everyone in HR will get good review this time around.

-
HRIT should remain. They should invest in tools to reduce/eliminate other HR jobs. We need to reduce the HR generalists and the pyramid on top.

Anonymous said...

Buffett says that companies that engage in cost cutting really don't know what its about. Bill says that he's learned more from Warren Buffett than anyone else. Obviously, class wasn't in session on 'lame accounting tactics day'.
--
Buffett knows how to allocate capital. If one hires recklessly one has to fire recklessly.

Anonymous said...

"In a sense, it owes that to mankind*, shareholders be damned, precisely because it is one of the very few companies which can afford to work (and finance) a technology into feasibility. "

MSFT owes it to mankind, shareholders be damned? Are you kidding me? MSFT is a public company owned by shareholders. It exists, like any public corporation, with a principal mandate to increase shareholder value. Should that be its only goal? Of course not. Should it ignore it completely as it has for some 8 years now? Absolutely not. If the management and folks like you want to turn the company into some charitable foundation for the betterment of mankind, then fork up the money to pay out long suffering shareholders and take it private (of course, you may not find too many baankers willing to lend you $230B under that new charter). Otherwise, MSFT has a fudiciary obligation to do the right thing by shareholders and that means investing wisely to grow earnings. You might also want to ask customers whether waiting 5 years for Vista or 5 years for the last version of SQL, or dealing with IE's numerous security problems for years is helping them self-actualize. Re your "to expect that every invested penny should bring a profit, and do so sharpish, denotes, in my mind, incipient greed.", again, are you kidding? MSFT has invested some $10B in MSN over the past 10 years and created a distant also-ran that lost money last Q; $4-5B has been invested in MBS which also lost money last Q; $10B was invested in cable companies only to later be written off completely; $5-6B has been lost so far on Xbox with at least another $1B to go and yet the best case scenario is profitability of perhaps $.5B/yr and that's a huge stretch. In fact, ALL of the massive investments MSFT has made in emerging businesses since 00, have resulted in exactly ZERO profitability collectively at the current moment. Not every investment is going to succeed, everyone can appreciate that. But 5+ years into most and 10 years into one, should all of them still be failures as measured by - gasp - profitability? Sorry for being a "noisy" shareholder, but then again, I paid for my seat at the table and when I read comments like yours, I increasingly think that the only way MSFT is going to be restored to a company where accountability, fiscal common sense, wise investments, ship timelines that are competitive and productive/happy employees reign, is if shareholders remind management who they work for.

Drei said...

Someone indulged me in explaining the economics behind my examples:

Funny, everything you list has pretty clear paths to profit. The companies that laid the fiber optic cable in the Atlantic started charging for that bandwidth the day they were finished. The companies that developed hybrid cars got millions in gov't grants during development and a slam dunk advertising campaign. Companies that blow holes in mountains to put tunnels through them don't do so for fun--they do it to save fuel and time and often to increase a route's safety (i.e., fewer lost vehicles = cost savings). OTOH, the business models for, e.g., MSN and XBox are not nearly as clear.

I think (no, I _know_) millions are pitiful change in the scheme of developing an auto model, much less one based on alternative (unproven) technologies. Yes, there is profit to be made from transport/communication infrastructure, but the path is long and the initial investment is massive. Eventually, these enterprises will recover their cost and then some. I doubt, though, the amortisation plan was based on a 5-year schedule. (And as for hybrids, until recently every single hybrid was sold at a loss. Ad campaigns in that context are money lost to lose more money.)

Can you say for certain that MSN/Xbox will _never_ recoup the investment?

Again, I'm not advocating bleeding funds into every idea, in hopes it might make it big 10 years from now. But the "profit now, dammit" approach doesn't sound optimal, either.

Apologies for straying so far off the topic.

Anonymous said...

"Everyone agrees Ballmer needs to go. What would it take to 'impeach' him?

As employee shareholders, a strong no-confidence vote would force him to turn the reigns over to Johnson."

It would take one or more very large holders to spearhead a call for his resignation and even if they succeeded - which is highly unlikely - would anything really have been accomplished if Gates and others are still in place? If there's going to be change at the top, imo it should be a complete sweep of the old guard (i.e. Ballmer/Gates/Raikes/etc). Best replacement in that scenario would be a total outsider with fresh eyes and no vested interest in past decisions/strategies/people. Then you'd see real change, driven top down.

Anonymous said...

Classic MSFT "who's on first?". Yesterday, everyone up to Allchin is saying they're "confident" in the dates for Vista. Today, Ballmer is quoted as saying that consumer (at least) could slip out of January into February or maybe just the early part of the year. This is why there's no confidence in MSFT anymore.

Anonymous said...

So much for Vista not being delayed anymore.

http://www.physorg.com/news67676495.html

Anonymous said...

I did get a Gold Star bonus, quite unexpectedly. While I won't be retiring on the bonus, it was large enough to get my attention. I, too, was told, "shhh. don't tell anyone. good job!"

Anonymous said...

My friend just quit his full time job as a lead at Microsoft and got hired back as a contractor at Microsoft for 40% increase in take home pay.

I don't know anyone who makes more than an FTE - MSFT might be paying more, but the freakin' contract companies who compete for microsoft's business don't actually pay their employee's good wages.

Anonymous said...

You're a contractor. You work for a CSG agency. You're lucky you got the two days. Not every decision allows for 2 weeks notice. Or maybe that manager had a bad experience with other contractors and that's why he/she decided to only give you the 2 days.

To the person who wrote this. First off let me tell you that I was a former Microsoft manager who hired contractors and I gave all of them two weeks notice becuase I did something called PLANNING.

What you are doing is denial and mindless RAH-RAH for the hometeam rather than critical analysis of the problem inherent at Microsoft. What the furlough has done is demostrate the reactionary behavior of a leaderless company.

You are right I am a contractor that was honor bound to a contract for 11 months. What save me was that when I was a Microsoft employee I had no trust whatsoever of Microsoft management.

What you are saying and attempting to justify is that it is perfectly OK for Microsoft's management to engage in untrustworthy behavior because they are imcompetent at forecasting budgets and failing at anticipate marketplace changes. So the solution to their 2.5 worthy management style is to break contracts.

Yes we contractors are risk takers but we are also committed to performance and doing good work so that we can carry positive recommendations to the next gig. When I take a contract I am honored bound to be off the market in order to fulfill contract terms. I start the process of interviewing for a new contract at least 2-4 weeks prior to the end of the contract.

The terms of my contract was for 11 months and it ended in six months but I took precautions that save me from the unexpected. Also as manager I knew when contract were about to expire and I conversed with my staff and upper management so that I could plan effectively as to the retention or termination of a particular contractor.

Your sentiments of arrogance and sociopathy once again reflects a major theme in this blog of the many complaints about Microsoft. Unfortunately those characteristics were encouraged during Microsoft's hayday but are now the impetus of the uncertainty that is befalling the company.

Anonymous said...

Everyone agrees Ballmer needs to go. What would it take to 'impeach' him?

Dumbass, speak for yourself. In a country where an illiterate, D average, dim-witted dunce can be president, who the *&^% are you to demand SteveB's removal?

Mistakes aside, Steve is better than 95% of all the CEO's in the nation.

mo'zart said...

You do realize you have it backwards, don't you? The good people -- the ones who can do well elsewhere -- will take the money and the poor performers (the ones who need the security) will stay. I know. I've seen it done elsewhere. It is a mistake that MS knows not to make.

I second that! I've seen it elsewhere: The best would leave first. The ones that will 'stick' are the ones that can't risk heading out.

Anonymous said...

Time to deliver. Management has thrown you a bone now throw one back. Feifdoms (Office, Office Live) products need to work together.
There is a great line from Shawshank Redemption that is relevant; "Not after breakfast, NOW" As a customer and beta tester I WANT these products to freaking communicate NOW not next year, or v3.9999.2.4321.
Surely with all the great people that work there someone somewhere can invent this TODAY?
Or is this some fiefdom thing???

Customer

Anonymous said...

I read this with interest if for nothing else to keep up to date on the doings at my Alma Mater.

Yup, CSG/FTE/CSG here. I'll respond to the back handed comments about CSGs by noting that in my last contract with MSFT I asked my manager to do me a favor and informally rank me as if I were an FTE if only to have some gauge as to the team's satisfaction with my work. I wont reveal the exact result other than to note that it would have meant a nice chunk of the available compensation would have been awarded my way.

Dont misunderstand me, I signed up for the CSG lot back then and accepted the good and the bad. That means that any day could start with a nonfunctioning cardkey and an escort to retrieve my coffee cup. (it should be noted that this isnt solely the lot of CSGs. Google "Employment-At-Will")

Thems the shakes and breaks and I have little patience for folks claiming "rights" they simply dont have.

But what I particularly wanted to address was the complaint that the quality of CSG personnel is so low. I noticed that as well when helping my manager find my replacement as I hit the 12 month limit. I think I may have encountered one of the reasons for that.

WIth the tech biz ramping up and my skill level climbing as well, I find I dont really care to deal with various agencies newest no-competes. Currently they demand 180 days. much longer than the mandatory break. And it doesnt matter if the NC is not very enforceable in courts if those companies are honoring each other's NCs. If I felt that MSFT was the only place I wanted to do contract work that would mean that whichever company I choose can effectively compress my wages. Am I saying it is unfair? Not really. Uncool, yes. But legal as far as I can tell. So I do what I can do. I offer my services elsewhere.

This makes me wonder if any or how many other highly qualified and experienced workers are no longer considering MSFT contracts. Or even just thinking a lot more carefully before accepting one.

I can only speak for myself, but I have found that as a CSG I can offer *more* value than I did as an FTE. I simply work better in that status as I feel all the extraneous stuff has been removed and I can just get my work done.

Now I know MSFT could care less about the doings of the agencies. But it seems to me that so long as MSFT continues to use CSG resources, it would be in the company's best interest to ensure that the agencies are behaving in ways that ensure the highest quality CSG resources *want* to work there.

Anonymous said...

>> I can bet my house that you did not
>> put yourself in that list of 30%

Yeah, I did not. I wrote about 20% of the code for the product, after all.

Anonymous said...

Dumbass, speak for yourself. In a country where an illiterate, D average, dim-witted dunce can be president, who the *&^% are you to demand SteveB's removal?

Mistakes aside, Steve is better than 95% of all the CEO's in the nation.

I had to comment on this. You call this person a dumbass, but your comment is ridiculous.

The two statements you make are orthogonal. What does George Bush (regardless of his mental capabilities) being able to be elected to office have to do with Steve Ballmer running Microsoft.

Those in glass houses, dumb ass, those in glass houses.

To answer the persons question, you'd need to organize shareholders to request that he be removed. Look at what Roy Disney was doing over at the mouse house before Eisner split.

Anonymous said...

Buffett says that companies that engage in cost cutting really don't know what its about. Bill says that he's learned more from Warren Buffett than anyone else. Obviously, class wasn't in session on 'lame accounting tactics day'.
--
Buffett knows how to allocate capital. If one hires recklessly one has to fire recklessly.


To put the riffing in perspective, think about this: MSN target was to hire 1,500 additional employees in this fiscal year. they about reached that goal. they had a good name for it, too: "Hire to WIN!" Putting aside the suggestion that any company would hire for reasons other then winning, how come david and blake (who architected this friggin mess) haven't been dinged for this?

1,500 people = $200MM in additional annual cost. That, folks, is the source of a big chunk of the current problem.

Hire to win? really more like orgy in RedW cafetertia.

Sigh.

Anonymous said...

--You're a contractor. You work for a CSG agency. You're lucky you got the two days. Not every decision allows for 2 weeks notice. Or maybe that manager had a bad experience with other contractors and that's why he/she decided to only give you the 2 days.--

To the person who wrote this. First off let me tell you that I was a former Microsoft manager who hired contractors and I gave all of them two weeks notice becuase I did something called PLANNING.


I'm a current manager (though no CSG's at this time). But I work in a large org. Decisions take a long time to trickle down. By the time I hear about them, I don't have much time to pass them along.

So I have choices:
Do I let the contractor continue their great work on the product, work that I can't do without?
Or do I let the contractor know that they're out of a gig in 2 weeks, which means they'll no longer be motivated to complete this task and will need a lot of time off to interview?

The answer is clear. I don't care for it, but I have a job to do.

What you are saying and attempting to justify is that it is perfectly OK for Microsoft's management to engage in untrustworthy behavior because they are imcompetent at forecasting budgets and failing at anticipate marketplace changes. So the solution to their 2.5 worthy management style is to break contracts.

No this is not what I said. All of the contracts could've been terminated with no notice. There is nothing untrustworthy about it. CSG's are making an assumption that they will still have a job to go to at Microsoft. As far as I know, Microsoft has the right to do this under all of the CSG agreements they have. I have NEVER had a problem shutting down a contract early. You should look at the contract you signed with your CSG agency and see whether or not they have committed to providing you work for a certain period of time.

Anonymous said...

Who said this recently?

"Speaking as an American company chief executive, when the management team starts focusing on the stock price rather than focusing on its business and customers you get a really bad outcome. We are focused on doing the right thing for the long-term"

SteveB, right? Boo hiss! Big disconnect from employees! Destroyer of shareholder value!

Wrong. It was Eric Schmidt. You know... of... Google.

http://technology.guardian.co.uk/news/story/0,,1781121,00.html

Anonymous said...

Buffett knows how to allocate capital. If one hires recklessly one has to fire recklessly.

To put the riffing in perspective, think about this: MSN target was to hire 1,500 additional employees in this fiscal year. they about reached that goal. they had a good name for it, too: "Hire to WIN!" Putting aside the suggestion that any company would hire for reasons other then winning, how come david and blake (who architected this friggin mess) haven't been dinged for this?

1,500 people = $200MM in additional annual cost. That, folks, is the source of a big chunk of the current problem.

Hire to win? really more like orgy in RedW cafetertia.

Sigh.

-
HR and finance have been on a hiring orgy. For every one dev, we hire two test and two PM and one HR and one finance. This model can not be sustained and something has to give sometime.

Anonymous said...

"Can you say for certain that MSN/Xbox will _never_ recoup the investment?"

Can you say for certain that MSFT can continue to survive despite ignoring typical industry 3-5 yr payback periods and instead spending $10B/10 yrs (MSN) or $6B/5 yrs (Xbox) with the net result being one also-ran and one #2 player, both of which are unprofitable and therefore haven't even begun to payback the initial investment far less generate a net profit? The question you should be asking is "what's MSFT clearly doing wrong and how can we fix it?" vs "can you really say it will never succeed?".

Anonymous said...

"SteveB, right? Boo hiss! Big disconnect from employees! Destroyer of shareholder value!

Wrong. It was Eric Schmidt. You know... of... Google."

I really don't know why people insist on comparing MSFT to GOOG. The two companies at very different and at a totally different stage in their development. It's easy for Schmidt to say he's focusing on his business and customers (the ones who aren't suing him for click fraud I guess) and not concerned about the stock (well except for making sure there's two levels of voting rights) when his business is hitting on all cylinders and the stock's been on a tear. Ballmer doesn't have that luxury - on either front. Kinda like most CEOs in North America. The difference seems to be that those other CEO's realize it.

Anonymous said...

Mistakes aside, Steve is better than 95% of all the CEO's in the nation.

What??? Better? Better as measured by what?

Who does a CEO report to? The shareholders. So what is the measure of how the CEO is doing? How the stock performs.

So how exactly is Ballmer better than 95% of the CEOs in the nation?

To whoever posted this: I don't know what your problem is, but it certainly isn't an overdose of objectivity...

MSS

Anonymous said...

"Mistakes aside, Steve is better than 95% of all the CEO's in the nation."

Yeah, here's his track record to prove it:

"In the recent aftermath of Microsoft's (Nasdaq: MSFT) last quarter report and the stock's largest price drop in more than six years, it became clear that investors were disheartened with the software giant. I don't blame them. The litany of issues with the company over the past few years is long and painful. The delays with Vista, now pushed to a 2007 shipping date, on top of rewriting the entire system from scratch, has been embarrassing. Xbox 360, while a success in the marketplace, is still not at the point in the console cycle at which it can deliver profits.

The fact that companies Google (Nasdaq: GOOG) and Yahoo! (Nasdaq: YHOO) have clearly outmaneuvered Microsoft in terms of Internet advertising has to hurt as well. Dealing with other issues like the growth in Linux and other open-source systems, and various pesky departments of justice, both in the U.S and abroad, has to be draining. And it was, as the company paid out billions in settlements to U.S consumers, Sun, Apple (Nasdaq: AAPL), Time Warner (NYSE: TWX), RealNetworks (Nasdaq: RNWK), and IBM (NYSE: IBM), among others. The icing on the cake has to be the stock price pretty much flatlining since 2002."

Anonymous said...

"Mistakes aside, Steve is better than 95% of all the CEO's in the nation."

Hmmm...I guess that's why he missed out on the deal today with Ebay? What's that now 0:2 (AOL/Ebay)? Maybe we'd be better off with the a CEO who was in the bottom 5% but actually got shit accomplished.

Anonymous said...

Regarding Gold Star's - I've never received one, but back when Services was still part of the EPG and I attended the district meetings with any sort of frequency, the recipients of these were called out in front of the group. No secrecy. I seem to remember $1500 being attached as well.

I guess we do have something better in the field. And contrary to popular beleif we don't have frapiccios in our soda cooler, never did - it is actually quite bare now since its Q4 and the budget is blown. All we have is a shitty network connection back to corporate. I have a faster connection on my home cable modem over VPN.

Anonymous said...

SteveB, right? Boo hiss! Big disconnect from employees! Destroyer of shareholder value!

Umm... So, the oposition is saying that it's OK to hose shareholder's money, too...

I guess that's OK...?

And, what I'm looking, at all around me, must not be a "bad outcome"? After all, Eric Schmidt says it isn't (and boy! - there was me, thinking that it'd be kinda cool, to just have to settle for one of that guy's "bad outcomes": shows how dumb I am. I obviously need to take the really really longterm view of the market!)

And the management are quoting the oposition at us, now...

So... I guess that's OK...

(You know, I'm still not convinced that changing my perception of the problem is the same as solving the problem - but, then, I never worked in advertising.)

Anonymous said...

"Who the f*** is Estberg and why does he want to take away our admin rights? I hope this is just a rumour...arrrghh!!"

Why shouldn't you have your admin rights taken away? Microsoft talks about dogfooding, well then, step up to the bowl and have some that every other user at a corporation will have to choke down.

If Vista is built right, there won't be any problem with you not running it without admin rights.

If it's currently wrong, trying to run it without admin rights will get it fixed a lot faster and keep the end user a lot happier, and in the end, increase the acceptance, usage and security of Vista.

That is the goal, isn't it?

Anonymous said...

Potential topic for a new post Mini?

Does Microsoft Have An Attention To Detail?

[Nathan Weinberg discussing that topic generally while citing Chris Pirillo's excellent if exhaustive list of issues in Vista beta 2]

Allchin apparently asked for the Pirillo feedback. Having received it, is it actually going to get actioned on this MS's most important product? Should such basic things not have been caught internally after all this time and endless delays? Is there something organizationally that just doesn't place a high value on these things as Nathan asserts? Seems like it would be a worthwhile discussion generally not to mention keeping the heat on to ensure stupid details like this get fixed before Vista gets released.

Anonymous said...

Somebody asked whatever happened to Eric Rudder? He was exiled back to a ceremonial position in BillG's organization last fall when Allchin announced his "retirement" (forced punishment for Vista clusterf*ck). Not sure why, but probably something to do with personality conflict more than any specific lack of performance (finances, deadlines, whatever) in Server & Tools.

And somebody mistakenly said that David (Cole) was not dinged. He was indeed, what do you think the "one year sabbatical" means? I'm not sure he was dinged for hiring at MSN, though. His task was to make MSN profitable, which he (briefly) accomplished, but at the cost of no updates to core services, stagnant or declining traffic, and (worst) stagnant and declining revenue, including weaker-than-industry-average growth in advertising revenue. And he also had a reputation as being difficult to get along with, like Mr. Rudder.

You're correct about Blake Irving, though. He managed to escape the latest reorg unscathed and is now helping to lead the Windows Live drive. I think this is because services under his purview (Mail, Messenger) continued to get good traffic while other MSN services didn't. And wasn't he behind Spaces, which has come from nowhere to become one of MSN's only successes?

Anonymous said...

Since there isn't a single person who has a bigger share in MSFT than BillG or SteveB, the chances of kicking out Bill & Steve are very slim(unless they kick themselves out). Even the board can't probably do that. It would take numerous mutual fund managers who's funds own MSFT to gather up to make a vote.

Anonymous said...

Vista will slip again. It'll take time to fix any pri 1 & 2 bugs and showstoppers reported by beta users. After that, we'll need at least a couple months of stabilization. It doesn't take a genius to figure out that Vista can't RTM in Nov.

Anonymous said...

I'm a current manager (though no CSG's at this time). But I work in a large org. Decisions take a long time to trickle down. By the time I hear about them, I don't have much time to pass them along.

So I have choices:
Do I let the contractor continue their great work on the product, work that I can't do without?
Or do I let the contractor know that they're out of a gig in 2 weeks, which means they'll no longer be motivated to complete this task and will need a lot of time off to interview?

The answer is clear. I don't care for it, but I have a job to do.


Your comments illustrates the shortsighted and sociopathic thinking that seem to be prevalent at Microsoft.

[1] The issue is not contracts that are terminated before the expected end date. That is a commonplace occurance especially if you are ahead of schedule as I was on one particular assignment. The problem has to do with the lack of planning leading to sudden termination with very little notice.

Now with that said you seem to think that a contractor with two weeks notice will lose all motivation and stop working to conduct his/her job search.

What is sociopathic here is that you don't care about the relation of the company (Microsoft) to the contractor nor the impact to the contractor because of woefully inadequate planning by you or your superiors. Especially since you fully cognizant that you intend to release the contractor but choose to deliberately withhold that information solely for your own aggrandizement.

Let me tell you what really occurs. In two weeks you'd be lucky to have one and extremely lucky to have two interviews that lead to offers. If you are in contact with enough recruiters they may be able to get a phone screen lined up in a few days. If you pass the phone screen it will take the hiring company about a week after the phone screen to schedule the face-to-face in order to line up the interviewers (typically three individuals plus the hiring manager).

Therefore the typical best case it will take a contractor 7 working days (~11 actual days) to land a new assignment. You're mileage will vary. The best I did was three days the worst was 20 days but those were the extremes. The typical case that I've seen is 4 weeks.

Contractors familar with this dynamic when given sufficient notice can calmly look for a new assignment while responsibly complete their current assignment without being demoralized and demotivated.

Therefore two weeks notice is just plain courtesy, establishes and maintain good business relationships. But this notion is foreign to Microsoft because of its arrogance never really thought about developing and now that it is facing real competition is having a very difficult time embracing as exemplified by your sentiments regarding just notification.

Anonymous said...


It's easy for Schmidt to say he's focusing on his business and customers ... when his business is hitting on all cylinders and the stock's been on a tear. Ballmer doesn't have that luxury - on either front. Kinda like most CEOs in North America. The difference seems to be that those other CEO's realize it.

Ballmer does have a luxury that Schmidt (or any other CEO) does not enjoy: sitting on two monopolies which bring cash in huge quantities, regardless of what he (or his subordinates) accomplish. His performance (or rather lack thereof) would have in any other company resulted in a massive management shakeup, because without those monopolies to shore up the incomptence, MSFT would be trading in single-digits today.

Anonymous said...

Now with that said you seem to think that a contractor with two weeks notice will lose all motivation and stop working to conduct his/her job search.

Since I've seen it dozens of times, yes, this is what I expect.

Not EVERY CSG does this of course. There are a bunch of good ones that always care about what they're working on.

What is sociopathic here is that you don't care about the relation of the company (Microsoft) to the contractor nor the impact to the contractor because of woefully inadequate planning by you or your superiors.

I care about the impact to the contractor. I care even more about the bad planning. But I can't fix the bad planning (I do keep trying). So that leaves me with a choice: do I take a chance at getting screwed over by the CSG, or do I possibly screw over the CSG by letting them know of a decision at the last minute? In other words, I get screwed or the CSG gets screwed. Don't act all high and mighty and claim that you'd always put the contractor's needs before your own. That would make you a bad manager. And an idiot.

Therefore two weeks notice is just plain courtesy, establishes and maintain good business relationships. But this notion is foreign to Microsoft because of its arrogance never really thought about developing and now that it is facing real competition is having a very difficult time embracing as exemplified by your sentiments regarding just notification.

Finally, one thing I can agree with: 2 weeks notice is JUST a courtesy. It is NOT required. The contracting agencies understand that our needs change rapidly. This does not damage our relationship with them. If they do not communicate this to their employees (you CSG's), then that's not Microsoft's fault. Sorry you hate me, but I'm doing right by most folks involved, so I'll keep doing things my way.

Anonymous said...

I don't understand this whole CSG thing. If they are asked to take some time off, then doesn't it mean they won't be working during this time?

So we're not paying CSGs for one week, but also not getting their work for one week. Where are the savings here??

Anonymous said...

Don't ever reveal your identity until it's time to leave MS and write your tell-all book.

Anonymous said...

Regarding Gold Stars: I had been stuck in level 63 for a few years but was in a new group, on a new project, kicking butt. I had been promised a level increase and promotion to lead, but I was pretty skeptical after being jerked around in the previous group. So when the news came back as: "We didn't get the headcount, so we can't make you a lead, and it's our policy not to promote to L64 as IC" I just figured that it was one more example of me being screwed over again. When they told me, "we'll find some other way to compensate you" I thought they were joking - I had never heard of any other reward program. When the money showed up in my pay check under the line item "Gold Star" I was incredibly pleased. Now that I am a manager I always try to give out my PUM's full budget of Gold Stars. At least 10% of the team get them each year, and they show up in the permanent record on http://manager. I never tell people to keep it secret, either.

Anonymous said...

Is anyone interested to know the truth about Microsoft's illegal practices and abuse in international subs?

It is coming soon to a media near you!

Anonymous said...

I got Gold Star award this week. It was very nice, and very unexpected. I am quite happy that my working long hours at work was actually recognized.