Rebuilding Microsoft in Wired Magazine

Over nine years ago, Wired magazine ran a front-page cover article about Apple. Specifically, how Apple was on the verge of collapse, needed some hard praying, and perhaps needed to take a dose of the 101 ways to save Apple. It's quite the nostalgic read.

And the cover was precious:

Okay, I know it's asking too much for folks to get down and pray for Microsoft's resurgence, though I'm sure there are more than a few shareholders putting in a load of prayers for the stock price.

The most recent Wired, 14.10, has the article Rebuilding Microsoft by Fred Vogelstein. It's like the winds of change blowing over a turning tide. Mr. Vogelstein's article is looking past the reports of employee moral and issues with bureaucracy and review model curves and focuses on what path Microsoft is on to get out of the innovator's rut and back into the competitive game. And Live services and Mr. Ozzie are front-line-and-center.

Mr. Barr has a take on Ray Ozzie's Company Meeting talk, the future of Windows Live, and this Wired article, too (yeah, there are a couple of boo-boos in the article).

What's interesting to me about this article in Wired - which I put down as a tech-community influencer magazine - is that it's a public acknowledgement that Microsoft is perhaps turning it around (I can hear the bubbling sounds from Slashdotters frothing mouths about now). Now, we'll probably not admit we had a problem to be turned-around until we're smack-dab in the middle of the solution, but I find a take like this encouraging. I still believe there's a lot of work, and if Mr. Ozzie ends up equipping us with a 21st century super-duper sports-engine, I think it's still important to ensure our Microsoft Coupe doesn't have four-flat tires to go with it.

For instance: with all the organizational flattening going on, I'd like to see a return to the celebration of the individual contributor. You shouldn't have to decide you're going to leave a path of blood to reach Partner-level in order to be a success at Microsoft. Let's get back to empowering the front-line folks with decision making and when they make fantastic decisions shower them with rewards and kudos. I'd like to hear less about the no-doubt Partner-level employees joining Microsoft as strategic acquisitions and how Microsoft internally is aggressively developing talented, entrepreneurially groups and people. Super stars should come from within and be celebrated by the internal and external community. And that's a hot recruitment story.

The fact that is not happening is a flat, blown-out tire.

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Mini-Microsoft Microsoft

Beyond Redmond Product Groups

Time for a copy-and-paste job looking at one theme of comments: work life at Microsoft beyond the Redmond Product Groups. I'm interested in learning more about parts of Microsoft that I don't have much interaction with and what challenges exist in those parts. Maybe you are, too.

It's no surprise to folks out there: I don't work in the field. I was supe- er - especially excited when MSFT in the Field blog popped up because I was looking forward to learning about the trials and tribulations folks in the field have to go through, mainly because I wanted to know, as someone not in the field, what I can do to help them win. Because when they win, we win.

There's a disconnect, at least in my world, between the groups creating the software and the folks taking on Microsoft's competition (or working within the wonderful world of coopetition) one-on-one. If a deal falls through, why? How does the feedback get to me? The only time I see such feedback is usually a high-exclam email explaining how an entire deal is at risk unless some unimplemented feature can easily be worked around. Usually the response is, "Sorry, you're screwed."

Additionally, if certain shipping features are knock-outs and helping to blow away the competition, please let me know, because I might unknowingly deprecate them in the next version to do something else.

A request in a comment looking for more discussion of Microsoft beyond the Product Group:

Mini - how about spending a post or two getting feedback and exploring other problem areas of Microsoft outside of HQ?

I'm thinking specifically of MCS (Consulting Services) - over 1,200 U.S. and 2,000+ worldwide. I left the group because of extremely dysfunctional management, bullying, sleazy engagement managers, arrogant architects, brutal travel, and a law-firm mentality of billable utilization to the point of fraud.

To prevent a mass exodus former peers say there's an unwritten policy where there's a 3-6 month period when a consultant CAN'T leave for another internal position, effectively locking them into the MCS org.

I was lucky getting out but suffered an ass-whupping of a review. I'd never go back, and the only reason I stayed was the pride associated with working for Microsoft.

Goodness. A follow-up comment from a now Ex-Microsoftie:

I've been in services since my entry into MS, and I more or less agree with this comment, but not all of it. In my former org. at least, EM's are doing basically their jobs, which is selling services. They have quotas to fulfill, and they do what they need to get this done. I must say that my former position was NOT an EM, but you can’t blame salespeople for behaving like salespeople and trying to make their numbers.

I totally agree with sleazy management. In my case, they managed to grow the org by more that 100% in three years. What’s interesting about this is that we went from being around 50 consultants (the ones that actually bill stuff) and 10 managers/pseudo sales guys/admin staff, to being around 60 consultants and a whooping 45-50 non-consulting staff and 2 additional managerial levels. Not to mention filling most of these managerial boxes mostly with cronies from outside who didn’t know their arse from a consulting engagement, not to mention real consulting work. That and turning the workplace from a great place to work and a great team where could discuss any problem openly and respectfully, into a political arena where CYA and sucking up to the higher ups and HHRR is the norm.

After all that, I still think that MS is a great company (otherwise I wouldn’t be reading this blog right?), but I have to put my family and career first. That’s why I took a job elsewhere, and you know what? It wasn’t really hard to find something I liked (MS like company without the bullsh...)

Another proclaimed ex-Microsoftie:

4 years in services, 1 year in sales, now left the company. Services went from dynamic, innovation and customer focused to bureaucratic, utilization driven and internally focused after Mike Sinneck took over and remained so after he left. Thanks Mike for creating a little mini-IBM GS and populating it with your former colleagues.

The hallmarks of my MSO experience were weak management, self promoting behaviour and back-stabbing by "peers." It's such a great feeling to trust someone on your team only to find they have pre-empted all of your work and already claimed credit for it...before you even finished...and management had already rewarded them for it.

I also saw a lot of victories claimed when nothing of value had actually been delivered, pronouncements which were picked up by the sales/marketing management and praised, on at least one occasion, as "role model behaviour."

I'm in a smaller, more dynamic company now, making more money for far less stress.

Another broad follow-up comment from the field that is great to end with because it has some positive thumbs-up for soon-to-be-released (when?) products:

Notes from the field ...

:

General feedback I'm getting on reviews is not bad to good. I'm hearing way fewer "I got screwed" than I did under the old system.

Vista RC1 looks good, but I agree with one of the previous posters that called it a misnamed beta. The Sept EDW should release this week - I don't remember the exact numbers, but the fixed bug count is HUGE, with tons more planned for RTM. This isn't your daddy's RC ...

More less than positive news on the Vista front - the number of machines some of our customers have that can't run Vista is much higher than some people estimated. I'm not sure Vista is compelling enough to drive large upgrades on desktops. I can't imagine a public company not requiring Vista + bitlocker on laptops, particularly given the inability of high-paid consultants to order coffee and not lose their laptops ...

Kudos to the Office 2007 team. Not quite there yet, but Office has some killer new features. The new version of SharePoint and the addition of Excel Services and Forms Services rock the server side too! The new interface has a learning curve, but once you get used to it, it's hard to go back. Nicely done!

Exchange 12 or MSIT's implementation thereof has a ways to go. I'm one of the lucky ones that gets to dogfood E12 - I truly understand the meaning of dogfooding now. Just doing my part for the greater good.

Stock is moving up ... babies need a college education. Steve - if you're reading, please don't say anything to the street. Take a page from Bill's book and pay someone smarter than you to do it. It's not one of your core competencies.

SQL Server rocks! Lots of wins against Orifice. 64 bit, dual-core servers with loads of memory allow SQL Server to do some *amazing* things. With AMD's quad-core just around the corner and ram prices continuing to fall, it only gets better.

.NET 3.0 (aka WinFX, Indigo, Avalon, et al) is generating a lot of buzz. Windows Workflow is getting a lot of attention and I've seen some incredible WPF prototypes. Does anybody get Cardspace (or whatever we're calling it today)? Ruby on Rails is cool and can do some things really well, but it's not even in the same league as .NET 3.0, particularly from a versatility standpoint.

Q1 is almost over - if we meet or exceed our sales target, and Vista and Office don't slip again, we could see $30 for Christmas ... I guarantee morale will increase as the stock crosses $30.

Getting bonus and stock vesting in a two week period didn't suck. With 4 grants maturing next year, it becomes a non-trivial event. In general, morale in the field seems up. Either that or the happy pills really do work ...

Congrats to the Fun in the Sun winners. I hear Hawaii was excellent. Now get back to work and close some Q1 business!

re: some of the MCS comments. It seems that things are better in general, but there are still some practices (or subsets) that suck. MCS lost a *lot* of talent over the last 5 years. Some internal, but a lot left the company. Services is a big business - it's real money now - amatuer hour is over. The days of being a boutique consultancy are gone. Someone needs to step up and drive the business. Sadly, we probably need to go to IBM, EDS, or one of the Big 4 to find that person (that worked so well last time ... NOT).

As for the hiring binge, there aren't many open field positions outside of services and we're stretched really thin. Maybe we could get some of that headcount reallocated?

Mini - thanks for inspiring people to be positive. As bad as Microsoft can be at times, it sucks *WAY* less than most of the rest of the world (that's no reason not to continue to push for improvements, just a dose of reality for the grass is greener crowd).

Just a peek. Are there serious problems out there and are they being addressed? I'd love to know more. For my day job, I'd especially like advice on figuring out how to be in the loop with the field directly and hear from them how things are going and how we could do a better job based on competitive reality vs. our current persona-puppet theater.

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Mini-Microsoft Microsoft

Moderation Problems - Administrivia

Update: comments are coming through again. Regarding my angst in inappropriately sharing enthusiasm about one feature or any feature, a commenter shares:

I am in field sales and went to the company meeting. I can tell you with absolute certainty that everything that was demonstrated has been shown to numerous customers and partners, both large and small, numerous times. Those that claim otherwise must have an alternative agenda.

I felt really bad and personally horrified for a bit that I might have shared something that I thought was well worn public knowledge - bubbled up on TechMeme and such - regarding exciting and competitive features that we're delivering. I feel better now and don't believe I hit that third rail.

And regarding the negative comments and such (and I plan to make this the last bit I talk about that and myself and get back to what matters): first, at least dial up your language to civil. At least some notch above the frothing lunatics I get from Slashdot. If you're a Microsoftie, you can write G-rated text and get your point across just as well, if not better. Second, I acknowledge that if enough reasonable people saying you're quacking, including people whose voice you've heard before and respect, then eventually you've got to stop and consider if you're a duck. Only fair. Third, I've always written as if I had an audience of a few dozen and never let it go beyond that in my mind. Notice no web metrics have ever been here. And I plan to continue writing to those few dozen people. I write what I would talk about in a small group about issues and struggles I see hampering Microsoft where we should obviously be excelling. Just one voice.

I'm going to start going through the incoming comments from the recent past and repost some stellar parts of the conversation here. That seems useful at this point.

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Original bits of this post:

Sorry, I have comment moderation problems right now due to a service I use having some severe server symptoms. All that is working is the cutting room floor.

And that's okay, because I'm having some incoming comment problems. Somewhere along the way, my enthusiasm for what was shown at the Company Meeting has been twisted and misconstrued into (a) blathering criticism and (b) earth-stopping leaking of highly strategic and confidential information. Headline: "Microsoft Critic Enthused About Microsoft Products and Lambasted."

What the hell? There go the brakes on my evangelism engine and showing stuff off. My first reaction is that people are rather sensitive. My second reaction is that a new batch of people have shown up and are simply expressing themselves for the first time and have a very different reality calibration than I do. My third reaction is more chilling and I hope is wrong... because it foreshadows a coordinated effort to bring an end to public discourse about being a Microsoftie.

Anyway, if you'd like to comment on the topic feel free to do so. Link to it on your on blog if you have positive / critical insights to add. I hope that my service will be back in the green again soon so that I can pass comments through again. If you're really needing a comment fix, then at this point all I can suggest is reading last year's post on the Company Meeting and the comments there and think about how much has - and has not - changed.

Sorry about the comment problem. In multiple ways.

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Mini-Microsoft Microsoft

Microsoft Company Meeting 2006

Pre Company Meeting 2006

So, what were my wishes last year for the 2005 Microsoft Company Meeting?

• Dates
• Review System Overhaul
• Management Flattening
• Mea-Frickin-Culpa
• Dissent

How did those wishes pan out during the meeting: "zip."

But, over the year? Well, the dates for Vista and Office are still presented somewhat fuzzy to the external world: now's the time to commit. The review system did indeed get a well deserved overhaul, though the glow of myMicrosoft is fading a bit and a few folks are looking around and saying, "Hey! There's still a curve, dude!" Management flattening? Appears to be happening in SteveSi's Windows org along with Office. Yah! Mea-Frickin-Culpa? The best we have is saying that we'll never take five years again to ship our operating system. Eh... hoo-raa?

As for dissent? Ha. Come on. SteveB is going to get on stage and run around and you're gonna to clap and cheer. And if any exec on stage asks internal Google users to raise their hand most of you Microsoftie-Google users are going to sit on your hands.

My topic wishes going into the meeting this year include:

Dates: yes, Dear Leadership, now things should be so sure you can actually commit to a street date for Vista and Office. It's neither brave nor brash at this point but come on, it's almost October already.

myMicrosoft:

• Talent within: time to unleash the talent within the company. Look, we're not going to be hiring too many super technical people for US jobs. It's time to focus on building people within for the challenges facing us. It's time to let job transfers inside Microsoft be simplified and let people quickly interview without getting permission first.
• Talent nearby: some people whisper that Microsoft might be opening up to flexible work-at-home / work-remotely options. Hmm. Interesting, though I don't know how well that works in our corporate culture.
• ESPP: bring back the old ESPP. Consider it Towels II.

Profit, not Revenue: everytime you see revenue on a financial slide, ask yourself, "But, ah, what's the profit today?"

Inspirational Roadmap: we've got clouds of unfocused chaotic ideas, but how does it come together as a game winning strategy that gets us from a stumbling cool chaser to innovative deliverer with huge profits and exceptionally happy customers and shareholders? Is this the year that we both get our act together and establish a profitable strategy?

Company Employee Size: I can't imagine anyone who wants to clap for hiring more people... but that's just me rocking back and forth in my own little bubble world. I especially can't see those crammed together with coworkers in buildings with zero parking spots clapping: yes, please, hire more rats to put in my box. Please, don't make Microsoft go through what Intel is going through now. Hell, yes, I want to downsize, but not through a crisis brought on by extreme mismanagement. Cool things down, efficiently rebalance the company from its internal employee base first (again, allow easy interviews so that people can take charge of their career), clear out the dead wood, and then see where we are.

Post Company Meeting

Well, I wasn't as pumped after this year's Company Meeting as I was last year. But I think that's because of two things:

1. 2005: end of a dry-spell. It had been a long time, last year, since we'd really heard from our leadership and what they were thinking and how things were going. Plus, it was a slump time after the Forbes and BusinessWeek articles.
2. 2006: we're in the loop. The ongoing Town Hall meetings have kept us connected over the past year. And that's a good thing.

I guess according to LisaB, in the portion of her presentation about blogging - and, uh, especially (uncomfortably tugging at my necktie) responsible blogging - I've become Microsoft's Voldemort. He who must not be named. Except by alluding pauses. Cute. Anyway, I do hope that InsideMS becomes a successful forum where people can freely exchange constructive ideas for improving Microsoft and feel as though their voice is being heard, versus just being explained to why it is the way it is. I look forward to seeing how it goes. I'm surprised it's taken this long but perhaps there's some convincing that needed to be done. LCA is bought into this? Anyway, inside voices can make good changes. But sometimes that constructive criticism has to be public in order for the change to be forced from the outside.

I appreciate LisaB laying down the foundation for myMicrosoft 2.0. I hope that the local listening tour mixes it up with Live Meeting and face-to-face because I recognized the power in the room of people seeing each other's reaction to what was being shared and exchanged during those meetings. That shared, connected experience was part of the reason respect, enthusiasm, and hope arose, meeting by meeting.

Two incoming comments:

(1) Mini - this is it. Either you start your constructive comments WITHIN microsoft, or please just leave the company.

(2) Lisa's internal blog is a brilliant shot to take the wind out of mini's sails. "If anyone's going to go online and talk shit about our company and what we're doing, it's going to be internal so we can make sure its legit." Brilliant. Lets hope it works out as well in reality as it sounds like it should in theory.

I will certainly participate on the internal site as one voice sharing my insights and suggestions. And, hey, when the time comes that no one is participating here because they are engaged in InsideMS or whatever is happening internally, then I'll gladly fade into blogging history as I turn back into that lone voice. Trust me, there are many fun things I've put aside that I will happily resume when that time comes.

And it will come.

As for the rest of the meeting: I'd say the biggest cheer went to the paper airplane that made it to the stage. And the Microsoft PC-man / Apple-boy parody ads were fun. Not as good as the parody shorts we've seen the past, though. I would have love to have been near the vocally enthusiastic Zune team to see their presumably horrified faces as the Zune tune transfer ad-hoc demo fizzled. I still want a Zune but... you guys are still writing the software? What the-? Hmm. Maybe this is the new agility and I should chill. We'll soon see. Given that the Company Store will be carrying the Zune for a discount, you're going to have lots of internal adopters ready to share their constructive feedback.

My biggest disappointment: Ballmer affirming that if we're not succeeding at something then the only option is to keep coming, coming, coming and driving it until we are a success. Oy. I disagree. There are times you know when to fold them and realize withdrawal is better than fist-slamming stubbornness. Second biggest disappoint: when you think Live, think ads.

PhotoSynth bah-lew my mind, along with the 3-D tourist composition (it would be interesting to integrate video of a scene for more 3D there, frame by frame). Let's ship it! And the [[wow, holy crap, guess I shouldn't have mentioned that!]] nifty little desktop feature for Vista was news to me. That's going to make for some interesting laptop moments. When does the Playtable ship? Or is it a perpetual demo? Cool, but it's time to grow up from demo to furniture. A lot of the rest of the demos I had already seen so I was busy watching the various airplanes sputtering about. One day - one day, I tell you - our wonderful and overworked admins will realize that no paper should be given out what-so-ever during the Company Meeting.

And Ballmer presenting with a 101 degree fever? Geez. He once again affirmed, post Vista, there would be no more gaps. "Yes," closing the door to the empty barn, "them horses aren't going to get out a second time." Fine. And I appreciate that we are focusing on the end user. Really? I've been dying for that. The consumer is back? Excellent.

Your Wishes and Reactions?

What do you hope happens at the Company Meeting? What are your post Company Meeting thoughts?

Updated: added some reflections under the Post Company Meeting section.

Updated #4: corrected grammar / terminology. Thanks. I think this post wins so far for most # of edits within 24 hours.

Updated #5: (I'll do my best never to revise so much ever again): As mentioned in the next post, I was worried I had revealed a bit more than I should have, but then I've been reassured nothing was shown that I touched on that hasn't been shown over and over again. Read the next post for more discussions on that topic. I will be going through later and cleaning up off-the-mark comments regarding this because it's just not so. I wouldn't have updated this post yet again if not for the Seattle Times making a reference to it.

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Mini-Microsoft Microsoft

Blame it on the Coconut Cream Pie!

Left alone for a short time, I locked my fingers together over a strong cup of coffee and kind-of stared off into the various lamps strung about the dark, stylish Seattle restaurant I was in, quite happy for having had the absolute best coconut cream pie I'd ever tasted. It was like I was living a moment from one of those Life is Good t-shirts.

Inspired by this, I think it's time to share the goodness going on as we approach the 2006 Company Meeting and think about what's going right, or has the potential to go right.

Yah! Ding dong, the fixed curve is dead. Yes, Virginia, there's still a curve-like-thing, but it's more fuzzy and allows some wiggle room to accommodate for merit. While I celebrate the break from 3.0/3.5/4.0, I certainly hope that it's absolutely false that groups were mandating a certain amount of "Underperformed" ratings. That's just wrong and leads back to groups padding themselves with underperformers to protect their valued contributors vs. moving those underperformers out proactively. I think for most Microsofties, the rewards ended up being very similar to last year. A few folks on each team might still be trying to pop their eyes back into their sockets. I'm pleased. I hope this year's experience is leveraged to smooth out next year. Please.

Oof! Flattening re-orgs: Windows Experience is re-orging flat, Office is re-orging flat, MBS got re-orged - anyone I'm missing? A commenter makes a note about Office:

Anyone read Antoine's mail about manager span in Office? Basically he said that a lot of our line level manager suck, and that we're getting rid of a bunch of them to get the average span of a manager up to at least 5 (from about 3 where it is today).

And several people have noted that Steven Sinofsky's internal blog gives an interesting glimpse into what he's driving. Sucks to be, or had been, a PUM in Sinofsky's org! Well, you had a good run, I guess. For you. Now we're really going to see if a flattened organization is all that and if decisions and progress are made efficiently and effectively. This is your chance to show it is indeed the right path and to ensure the best managers are in place.

Yah! Both Vista RC1 and a refresh to Office Beta 2 are out. Raise the confidence level to green that these cash cows are going out on time with no further delays. Come on MSFT! Poppa needs a new retaining wall! The Vista EU drama is a bit disturbing and I hope just as much back-room negotiations are happening as compared to the court of public opinion, job studies and all.

Play! Zune has been announced so set aside the random speculation and get on with the groovification. Yes, I'll get a Zune. No, I must be too old to appreciate the brown color - sorry, that reminds of 70s era corduroy pants, flared collars, and shaggy hair. Anyway, it's a nice start and has a sweet screen. Too bad the Windows DRM has pressed the reset button.

You'd think with the dismissive hatred being thrown at Zune that one day all iPods in the world are going to wake up as WMA-lovin' Zunes. Zune not right for you? Great, rock-on with your iPod. Let the rest of us enjoy it in peace.

Oh, and perhaps we finally found out who made the great internal video for "If Microsoft Designed the iPod Packaging" looking at the minimalist Zune box. Nice.

Sweet! IronPython 1.0 is out and has received lots of good buzz and appreciative chops, for both its performance and for how it was iteratively developed. Even I'm stumbling along and learning Python, though it doesn't help to be learning the IronPython environment at the same time I'm learning PowerShell (Monad). Also, Microsoft Max continues to get some good buzz, too. Congrats! Additionally, lots of live.com services are being updated, though I'm personally frustrated with the level of Aunt Jamie's JavaScript Molasses clogging up my Spaces experience.

Pay! It's September 15th: pay-day. Your new raise (ahem) and merit increase and bonus have been deposited. One commenter notes this, too:

Today was the day that the checks cleared on bonuses and merit increases. And today was the day that my team lost two of the most senior ICs in the group to outside the company.

Fold them cards and gather your chips if you're ready for a new challenge. Also, now's an ideal time to update your resume and, what the heck, float it about or see what other groups are doing. Hiring managers are fairly smart: they know people start looking around right about now. Ping your network and do a few informationals. It's a great way to meet quality people and perhaps even establish some new work relationships.

Yah? Mr. Barr, I don't know if this is a good idea or not. We'll see. I have a strong aching desire to break the rules of conduct and add my own edits. If I were to do so, I would add something about the history of comments and the conversation and how the small spec of Mini-Microsoft's popularity brought in an undesirable element and resulted in comment moderation (even turning comments off for a while). Plus I'd make a note of Mini-like sites. But that would be sheer, indulgent vanity.

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My wishes for the Company Meeting this Thursday? Well, (1) that it's the last idol competition that we have and that (2) Eye of the Tiger and any other sort of related song has been rejected as a SteveB high-fiving soundtrack. "I've got the eye of the tiger, baby!" Whaaaat? No. Not to be mean, but I also (3) wish that someone steps on Steve's foot while shooting some hoops before the show because foot pain, like what Mr. Ballmer was suffering during the EE keynote, seems to bring out this one-on-one clarity and frankness that I deeply appreciate.

In fact, I (4) hope the whoop-whoop is toned down a bit for the sake of content. It's too bad that the open nature of the meeting, let alone the press being present, results in the content being rather shallow (and remember: it's profit, not revenue... profit). Anyway, I'm looking forward to chugging some of the Kool-Aid again and then crowding in with the rest of Microsoft to see what kind of cool demos we might have. What can I say? I'm a Company Meeting fan.

If Mr. Sinofsky is on stage then I (5) hope we can talk about the flattening we're doing and the focusing on agility and nimbleness and effectiveness and how all the crap that Mini-Microsoft used to complain about is just not relevant and that a focused, resurgent, accountability-driven Microsoft has taken the stage and promises never to encumber itself with layers of bureaucratic decision makers and complicated, cross-connected features.

And, you know, (6) fire everyone in Redmond who decided not to come to the meeting. Just kidding. But I've got to protect the little spark of hope that remains that Microsoft might one day reverse its drunken hiring binge and, as it streamlines and flattens layers, move on folks not contributing to success anymore and that could be more successful and more happy elsewhere.

What's gone well from your point of view? And please, feel free to indulge in a hopeful, positive outlook or at least conjure up some constructive approaches for problems you'd like to discuss.

Might I suggest a slice of coconut cream pie?

Updated: fixed my wording around the cash-cows' time table. Added more pie.

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Mini-Microsoft Microsoft

Kicking the SPSA Can Again, Raises, and the 66th Percentile

"Hey! Who do I have to <<fill in the blank>> around here to become a Partner?"

That's one bit of fallout landing on Microsoft employees from this past week's SPSA payout to Microsoft employees at level 68+ in the company ("Partner" pay scale level - I'm not talking about the third party folks who Microsoft partners with in technology deployment). Tut-tut, don't bedevil me with my underwater options and paltry stock awards, I want to be where the real compensation is: Level 68!

(Hmm... Level68... local band name maybe, or perhaps my alter-alter-persona nerd hip-hop name.)

I'm sure if Windows and Office had shipped by now that the SPSA would have been a begrudgingly accepted payout to all the Partner leaders in the company, even those who don't have a damn thing to do with Windows and Office. Instead, the chosen weak metrics still point solidly to resounding success using a financial ruler that no jester in any court could stop laughing about long enough to make witty comments.

Hey, I recognize that running a big organization is truly a lot of work... and those folks already get well compensated for that. This redistribution of shareholder wealth to those that the shareholders rely on for exceptional performance - you know, shipping on time, increasing adoption rates, avoiding part supply problems, not surprising Wall Street, and not letting process and hiring binges saddle down Microsoft - just seems wrong and out of whack.

The big disappointment is that it's not a one time payoff but designed to keep the old guard around for two more payoffs. Damn.

And Microsoft is now officially a two-tiered company. There is Level 67 and below and then the Partners lording above us, throwing us the occasional coin. I certainly hate writing that. The SPSA, however, doesn't follow any rules related to the awards we receive. Does it take a year until some of the stock is available? Nope. Does it take five years to vest. Nope. Is it tied to personal performance and contributions? Nope.

The Partners are different from you and me.

One comment reflecting on this:

3 points I want to make:

1. Why execs have 1/3 vested right away?
2. Why are execs selling them if they believe in the company?
3. Why other employees have to wait for 12 months and span across 5 years?

Following in that, and the ongoing discussion if any Microsoftie consciously cares about providing shareholder value or if doing so is even in alignment with their career, we have this comment:

So many people have attacked the person who questioned whether his first priority should be shareholder value. I've read this with curious amusement, especially in the wake of our top 900 or so executive leaders effectively ordering that they all receive buckets of money. There is no plausible justification for this action, and it has clearly been done at the expense of the shareholders. The next email from an Exec that I read that stresses how we all hold great responsibility to the shareholders will leave me laughing.

'Do as I say, not as I do.'

And so it is.

In reflection of all of this SPSA pocket-stuffing, a big tip of our collective hat to Jay Greene at BusinessWeek for the original article long ago last year that brought up this pending compensation program (hey, that's a great article to re-read). Some things have changed for the better. Some deck chairs have just been re-arranged. And some bad ideas have hit the fan. A snippet from Mr. Greene's article regarding that:

Microsoft's compensation moves have created a haves-vs.-have-nots culture. Newbies work for comfortable but not overly generous wages, while veterans have a lucrative treasure chest of stock options. Now a new pay scheme, scheduled to go into effect this fall, threatens to make the gulf even wider. If they meet incentive goals, the 120 or so vice-presidents will receive an eye-popping $1 million in salary a year, and general managers, the next level down, will get $350,000 to $550,000, according to a high-ranking source. But the rest of the staff is paid at market rates.

Only now we know it is 900-some recipients and close to $1,000,000,000 in payout. I think from now on we no longer brag about "growing our business one Yahoo!" or "...one eBay" but rather "...one SPSA." It's interesting thinking back to some of the comment conversations in the past about our huge thirty-something billion dollar war chest. People would often ask: "Hey, why can't we dip in and give out bigger bonuses or salaries to everyone from this?" and the back-of-the-hand retort was "That's the shareholder's money, not ours. We can't just do what we want with it."

Various stories on this from the past week:

• Microsoft awards executives millions
• Microsoft execs get stock windfall and Microsoft executive stock bonuses, by the numbers.
• The Seattle Times Business & Technology Millions for top Microsoft execs
• Microsoft Execs Get Millions in Awards. Huh - Blogging Stocks
• EETimes.com - Microsoft awards $951 million in bonuses
• MSFTextrememakeover Update Transparency and SPSA
• MSFTextrememakeover Transparency Well, it ain't AERO Glass, that's for sure.
• only this, and nothing more Microsoft Exec Rewards

Right before all this, Mr. Todd Bishop at the Seattle P-I took a side-trip to the recent 10-K filing: http://www.sec.gov/Archives/edgar/data/789019/000119312506180008/d10k.htm to revisit the recent hiring binge by Microsoft and how it breaks out for our 10-K hiring. MSN +44%? And while we're putting on the pounds, Intel might very well be looking at some severe cuts after an efficiency report (how do we get one of those?). Part of this is to make up for past sins of (dramatic pause) over-hiring.

• Intel reportedly may announce job cuts of up to 20,000 - MarketWatch
• Intel expected to cut thousands of jobs CNET News.com

I'm all for right-sizing Microsoft to be smaller by cleaning out the ineffective and the dead-wood. But it sucks beyond measure to have to reduce by 10,000 or 20,000 people all at once. That's the result of exceptionally bad leadership and I hope our Partners pause long enough over their new brochures of Italian villas to consider leading an exceptionally top-heavy Microsoft efficiently so that a few years from now we're not giving out tens-of-thousands Ooopsie! pink-slips.

If you're not a comment reader, then allow me to suggest dropping by the last post (Mini-Microsoft Looking Forward - Reviews, The Company Meeting, and Then Some...) and reading through what people have shared about their review numbers so far, along with their impression of the MyMicrosoft changes so far and the usual harsh real-world how it works way of getting by and getting the hell out of your current group if they've flipped the bit on you. One comment that folks liked in particular starts as such:

Hey! Welcome to the club. Pull up a chair and let me explain how this all works to you.

Random things around compensation so far as always includes discussion of the raise and whether it should at least match the local cost of living increases. Well? Within the mechanics of the HR-compensation beast, have to beat your compa-ratio first. Unless salaries are adjusted upwards and your ratio allows you more growth you're not going to be beating cost of living. And once you start talking about salaries, you start talking about the 66th percentile that Microsoft pegs compensation at.

Ah, the 66th percentile. Now, first of all, Microsoft does not intend to pay 2/3s the salary you could get anywhere else under this system. If you lined up thirty people who did exactly what you did from 30 different companies, you would be paid more than 20 of those individuals. Ten of them would make more than you. Maybe one or two of them a hell of a lot more. But in general you're earning more... at the moment in time that you got hired.

Where you're getting screwed is salary compression. The folks hired this year are coming in making a lot more than last year's folks, and getting a better taste of the stock sugar. Your recent raises certainly haven't let you, or the folks from the previous year and so on, catch up. And won't. So, if you've been at Microsoft (or any corporation) and want a fat raise then your best course of action is to switch companies and decompress yourself. And then work to get acquired by Microsoft so that you can come in as a Partner. Sorry, Lisa ain't gonna do that for you.

Your only way to win at the salary game staying at Microsoft is to get promoted as often as possible. On your march to Level 68.

Do let us know how you filled in your blank along the way.

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Mini-Microsoft Microsoft