Sunday, November 19, 2006

A Peanut Butter Manifesto for Microsoft to Chew On

The big news of this weekend in the blog echo-chamber is about thinly spread peanut-butter: Techmeme The 'Peanut Butter Manifesto' (Wall Street Journal). In case you don't know, it's an internal Yahoo! memo (the kind you hope gets leaked to build external support - and perhaps your own career) from Brad Garlinghouse, a senior VP at Yahoo!, that calls for radical cuts and restructuring within Yahoo!. As I read the memo, I switched the context a bit, imagining that this was written by the kind of butt-kicking maverick I don't think Microsoft has ever seen regarding Microsoft and what we need to do to fix it up. Have a read yourself.

What do you think?

It's interesting to read this in light of a couple of articles in today's Seattle Times about Microsoft and Vista:

First, I think of this time for Yahoo! versus how it was looking for Microsoft over a year ago: both responding to negative wake-up calls in the press - Business Week and Forbes articles for Microsoft in particular. In my opinion, Microsoft tried to Jedi Mind Trick its way out of the situation and eventually backed into a few mea-culpas and passively moved-on some people who may or may not have been part of the problem. Garlinghouse is take a far more brutal, open, honest assessment of the way things are. Snippet:

I believe we must embrace our problems and challenges and that we must take decisive action. We have the opportunity - in fact the invitation - to send a strong, clear and powerful message to our shareholders and Wall Street, to our advertisers and our partners, to our employees (both current and future), and to our users. They are all begging for a signal that we recognize and understand our problems, and that we are charting a course for fundamental change, Our current course and speed simply will not get us there. Short-term band-aids will not get us there.

Our response under similar challenges? The Pipeline of Plenty Dog and Pony Show with lots and lots of sunshine and smoke.

Garlinghouse puts special focus on bureaucracy:

We now operate in an organizational structure -- admittedly created with the best of intentions -- that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.

I never heard us admit we had bureaucracy problems. Sinofsky a while back put up a blog post about bureaucracy (wave of the hand, "This is not the problem you're looking for."). But now as parts of Microsoft reorganize, layers of management are going away to remove problem-making decision makers that paralyzed us more than enabled fast, decisive progress. So, now that something has been fixed, at least maybe we can admit we had a problem? The most we get is from the above Seattle Times article:

[Kevin Johnson] said Sinofsky and other new Windows leaders are changing the structure of the group to eliminate layers of management.

"Every time you have a layer of management, there's another opportunity for someone to layer in their strategy, or set their direction," Johnson said.

Which - I guess we're left to deduce on our own - is bad when you have awful leadership at those layers and their strategy and direction is myopic, restrictive, and destructive to the product. What happened to them? Where did they go?

Back to the Yahoo! memo. As for employees and passion and deadwood:

We have lost our passion to win. Far too many employees are "phoning" it in, lacking the passion and commitment to be a part of the solution. We sit idly by while -- at all levels -- employees are enabled to "hang around". Where is the accountability? Moreover, our compensation systems don't align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren't adequately recognized for their efforts.

While we might poke our low-performers with low compensation and mediocre reviews, we're just not fired up about getting them back on track or out of the company. As for accountability:

a) Existing business owners must be held accountable for where we find ourselves today -- heads must roll,

Rolling heads! Yes! The only rolling our problem makers ever had to deal with is rolling around in their wads of stock awards and SPSA payouts. Eventually, some of them managed to be rolled out the door. Quietly. But no one ever has been held directly accountable within the company. Perhaps Yahoo! can show us how this is done.

As for Yahoo!'s performance review system (which I know nothing about), it sounds like they want to move towards something more like Microsoft, where we endeavor for differentiated awards so that our top contributors get maximum rewards. I remember reading rumors that Yahoo! was moving to a stack-ranked based system. Let us know how that turns out for you.

And the big bit of news that resonates the most with me:

c) We must reduce our headcount by 15-20%.

Simplify. Refocus. Restructure. De-redundantification. Empower and reward passionate employees. Fire redundant non-performing deadwood and leaders to this current malaise. Sounds like a good recipe to me.


Administrivia: I'm giving a hard look at switching this blog over to the new Blogger infrastructure soon. Think good thoughts.

Updated: added a call-out to a context switch. Again: fixed strange word order that shot out of my finger tips.


71 comments:

Anonymous said...

"Fire redundant non-performing deadwood and leaders to this current malaise"


How are you defining "non-performing deadwood"?

Anonymous said...

Yahoo! has adopted Microsoft style stack ranking. Oh wait - this is prescribed by a consultant.

The new system at Microsoft is also done by a consultant. The same one that advises Yahoo!

Yahoo! doesnt have the partners yet, the consultant did pitch this though.

Anonymous said...

Eventually, some of them managed to be rolled out the door. Quietly

>
There are still a lot of dead wood left in partner ranks.

Anonymous said...

Any equivalent of minimsft blog for Google/Amazon/Apple?

MSFTextrememakeover said...

Interesting post - thx. The memo from the YHOO VP seems to be spot on, and there do seem to be many parallels for MSFT. It's interesting that this is the first year since 01 that YHOO has underperformed the S&P and had very visible execution problems, yet they've already fired two VPs for non-performance and here's a 3rd calling for even faster action and major headcount cuts. Meanwhile, MSFT has underperformed the S&P EVERY year since 02, yet hardly any VP has been fired for performance reasons (despite an order of magnitude more VPs to choose from and no shortage of proabable cause), hiring last year was the highest since the pre-00 runup, and as recently as last week, Ballmer says everything is on track, all investments are the right ones and the management team is "the strongest ever". Looks like for better or worse, YHOO employees and investors are guaranteed to see major changes asap, whereas MSFT emps and investors can look forward to more business as usual.

Anonymous said...

Any equivalent of minimsft blog for Google/Amazon/Apple?

I don't know about the others, but when you've got Steve Jobs, you don't need a mini to keep things tight at Apple.

Yahoo! has adopted Microsoft style stack ranking. Oh wait - this is prescribed by a consultant.

The new system at Microsoft is also done by a consultant. The same one that advises Yahoo!

Yahoo! doesnt have the partners yet, the consultant did pitch this though.


Is this true? I admit it's amusing to assume it is, but is it? Who's the mystery consultant(-idiot), anyway?

Anonymous said...

It appears that YHOO is downsizing itself to look attractive to a potential buyer like MSFT. As Mini and the earlier commenter mentioned, YHOO is looking to create a performance review system like MSFT. Yeah, I know that BillG said that he is not interested in YHOO and their CEO TerryS said that the cultures would not mix. However, if 15-20% of your workforce is going to get cut, the remaining employees could care less about cultures mixing as long as they have a job. BTW, 15-20% might be a way to cut the redundant areas before the merger is announced incase there are any antitrust concerns.

When MSFT decided to buy back 8% of its shares (800 million) few months ago, I became suspicious that the company was getting ready to make a major purchase sometime during the latter part of next year. MSFT stock should easily be up another $5-$7 by July 2007 and this would be an added bonus to do a deal without reissuing more stock. Rumor has it that YHOO rejected an earlier bid from MSFT for $80 billion saying that it was too low, but I bet they would go for it now.

Anonymous said...

I call total BS on this Yahoo "leak". This leak is purely orchestrated by a VP trying to save his neck, grease his career path or by a company leadership trying to appear that they are about to correct their ship.

I am not decieved. Too Bad Mini was.

We have seen such "leaks" even from MS. Wake me up when somebody leaks a seriously damning memo that has zero chance of benefitting the writer or the company.

And to the person talking about underperforming the S&P being the criteria for firing VPs, go hit the books some more. There's more to measuring the success/failure of a company than a comparison of stock chart to S&P. Maybe you'll learn something

MSFTextrememakeover said...

"And to the person talking about underperforming the S&P being the criteria for firing VPs, go hit the books some more. There's more to measuring the success/failure of a company than a comparison of stock chart to S&P. Maybe you'll learn something"

Actually, I mentioned S&P performance as well as "visible execution issues" as proxies for stock and business performance, and didn't state either as the criteria for firing VPs per se, but the backdrop of broader company performance against which that had/hadn't occurred. That said, the leadership team of a public company has a primary mandate to perform on both of these dimensions and to ultimately be judged by shareholders on their effectiveness in doing so. If you're confused about that, you might want to take your own advice and hit those books...

Anonymous said...

Announcing that you are going to cut 15-20% of your work force is a death knell. What talent you have starts looking elsewhere & new talent has no interest in joining. I hope we never go this route. Its the path of last resort and would signal that we've finally officially joined the ranks of IBM, DEC, etc.

Anonymous said...

"How are you defining "non-performing deadwood"?"

According to HR, find those Kims and nail'em.

According to Mini...umm... He likes Kims, so I guess he'd pick another subset. Maybe (here's a thought) the folks designated as underperformers multiple times in a row?

Although that wouldn't pick up all the deadwood that makes political hay and doesn't produce squat.

Anonymous said...

I read the memo and it describes us pretty well too, both MS in general and MSN in particular.

However, am I the only one who sees a contradiction in calling for a fix from the same leaders who caused Yahoo's problems in the first place?

Anonymous said...

*Sigh* Yet another person who thinks top performers aren't being rewarded enough. If we take this to its logical conclusion, we should find the ONE GUY at Microsoft who's doing the best work, give him a billion dollars, and shaft everybody else. Compensation problem solved!

It's obvious to me that we need to drop this "superstar" philosophy and start rewarding teams instead. That way everybody can stop sucking up (sorry, "managing up") and start working together to make something successful.

Anonymous said...

>commenter #7 wrote"
I call total BS on this Yahoo "leak". This leak is purely orchestrated by a VP trying to save his neck, grease his career path or by a company leadership trying to appear that they are about to correct their ship."

Agreed. The memo was quite unimpressive in that it listed the typical woes that face every big company yet didn't offer any real solutions. Fire 15% - 20% of the employees? Layoffs are the last resort of the incompetent.

Performance based incentives? Getting rid of turfs? Seriously, this is as cliched as they get. Let's see how this is executed over the next year before any praise is sent his way.

> comment #5 wrote:
"MSFT has underperformed the S&P EVERY year since 02, yet hardly any VP has been fired for performance reasons"

You're kidding right? Go look around Windows, Server & Tools or MSN of 2002/2003 then take the same look in 2006/2007.


-- Dare

Phil said...

"The new system at Microsoft is also done by a consultant. The same one that advises Yahoo!"

I'm calling BS on this post. How can you possibly know that? Are we to believe that you were important enough in Microsoft HR to be privy to these conversations, then quit, then got hired by Yahoo in the same job, and were privy to those coversations? If you were that important it seems to me you would have had the chance to influence the decision a bit more.

Go home flameboy.

Anonymous said...

Dare (?) said:

"Layoffs are the last resort of the incompetent."

Excellent point. Agreed. Sorry there, Mini.

"Performance based incentives? Getting rid of turfs? Seriously, this is as cliched as they get. Let's see how this is executed over the next year before any praise is sent his way."

I see what you say, but I differ here. The first step is to acknowledge you have a problem. To have someone in Yahoo leadership do this, versus, say, an anonymous employee or such, is big.

Yes, maybe his memo is a cut and paste job of several top business books. But it's out there now and Yahoo senior leadership, and all of its employees, have been forced into a radically different world this week compared to last week. One hopefully focused on solutions to their problems.

My two red cents: so what would happen if Microsoft released the same kind of self-critical analysis... like from Chris Jones or such? I think there would be a lot of relief and people could put honest effort into rallying around fixing what problems we have (nothing near so extreme as what this blog might lead you to believe) knowing that their efffort and contributions would be valued, not wasted.

MSFTextrememakeover said...

"Go look around Windows, Server & Tools or MSN of 2002/2003 then take the same look in 2006/2007."

Yes, given recent progress (esp within Windows), not to mention MSFT's legendary politics, that's likely true. Of course, the topic was VPs being visibly fired for performance reasons and in a timely manner. How many VPs, for example, got fired in Windows at the time of the LH reset? How many in BusSol despite years of underperforming the market growth rate? Even in chronically underperforming MSN, high-profile departures for performance reasons have historically been few and far between and in major cases, like Cole, couched as a "sabbatical" vs a failure to perform. Accountability, like rewards, is most effective when it's clear-cut, linked directly to results and delivered in a timely fashion - not vague and doled out years after the fact.

Anonymous said...

Uhm.. did we just break $30 or am I still having that same dream i've been having for the past 5 years...

Anonymous said...

One of the MSFT wagon-circling-spin-cyclers said this:

"Agreed. The memo was quite unimpressive in that it listed the typical woes that face every big company yet didn't offer any real solutions. Fire 15% - 20% of the employees? Layoffs are the last resort of the incompetent."

First, there were some valid solutions, unless you don't see boldly and definitively declaring what they are and what they are not, business-line accountability and selling non-core businesses... solutions?

Layoffs are the last resort of profitless ideas and/or out of control costs, one of which is, of course, labor. And so, you are correct: incompetent market analysis and over-hiring leads to the last of resorts...firing.

Anonymous said...

I never heard us admit we had bureaucracy problems. Sinofsky a while back put up a blog post about bureaucracy (wave of the hand, "This is not the problem you're looking for.").

>
Sinofsky is a loyal PM. He isnt going to cut the PM group that put him where he is.

Anonymous said...

I fail to see the parallels. Microsoft has made record profits each year. Yahoo can't say the same. Who cares about S&P (I'm not concerned about stock price over the short term)? Profits are the bottom line. Stock price is based on speculation. Comapanies can lose huge amounts of money and see their stock price go up; companies can make bundles and see the stock price go down. You can't control stock price because it's not based on performance.
So stop judging your company based on stock price.

Anonymous said...

>My two red cents: so what would happen if Microsoft released the same kind of self-critical analysis... like from Chris Jones or such?

Early retirement for Chris Jones or such?

Who da'Punk said...

Should the WSJ Peanut Butter Manifesto link go dark:

http://paul.kedrosky.com/archives/2006/11/18/yahoos_peanut_b.html

Anonymous said...

"Microsoft has made record profits each year."

Record profit?? Don't make me laugh. Exxon-Mobil made $10.5 billion of profit in the latest quarter, completely crushing MSFT's puny $3.46 billion profit for the same quarter. If the Exxon-Mobil CEO were making what you refer to as MSFT's "record" profits, he'd be fired in an instant.

As for your assertion that share price doesn't matter - guess what, in the long run it's the ONLY thing that matters to investors. If your shares aren't keeping up with the S&P 500, no rational investor is going to dump his or her money into your company, because s/he can get a better return by just putting in into an index fund that tracks the S&P.

Anonymous said...

Who cares about S&P (I'm not concerned about stock price over the short term)? Profits are the bottom line. Stock price is based on speculation. Comapanies can lose huge amounts of money and see their stock price go up; companies can make bundles and see the stock price go down. You can't control stock price because it's not based on performance.
So stop judging your company based on stock price.


We can't "stop judging (MS) based on stock price" when the company/HR brag about trying to only pay 60% of market wages and will "make up for the rest" in stock. This was a great strategy when the stock was doubling and splitting every 2-3 years, but the price now is the same as it was in '99 (before the bubble) and has been flat since '01 (after the bubble burst). If it weren't for the times when it takes a dive when SteveB opens his mouth to investors, we wouldn't have had the big dips over the last year, but we wouldn't be any higher.

So as long as 40% of my compensation is being attributed to Stock, I will continue to worry about its price. HOWEVER, under the review model (the past one, but now especially the new one), even that 40% isn't likely if you happen to be a great worker who is happy with your position and then given 0 stock and 0% bonus because you are a "Scenario-2 Limited".

Anonymous said...

"Who cares about S&P (I'm not concerned about stock price over the short term)? Profits are the bottom line."

Another poster already addressed the importance of the stock and why investors won't bother if you can't outperform the averages (far less underperform them badly this decade to date). Re profits, totally agree. But all "record profits" bs aside, the reality (not coincidentally) is that they've badly lagged revenue for this entire decade as well, under the weight of out-of-control headcount increases and massive investments in as yet still unprofitable new ventures:

Revenue vs Profits

Anonymous said...

Exxon-Mobil made $10.5 billion of profit in the latest quarter, completely crushing MSFT's puny $3.46 billion profit for the same quarter.

If you're going to pick examples, at least pick ones that make you look intelligent. Hint: Microsoft doesn't produce oil.

We can't "stop judging (MS) based on stock price" when the company/HR brag about trying to only pay 60% of market wages and will "make up for the rest" in stock.

Well, in that case you should definitely go to a place that will give you 100% of market wages. Bon voyage! Hint: MS pays at the 66th percentile of market wages.

I swear that the hiring bar gets lower here every year.

Anonymous said...

isn't Yusuf Medhi still a VP?

Anonymous said...

Two B Arc postings back to back...

Record profit?? Don't make me laugh. Exxon-Mobil made $10.5 billion of profit in the latest quarter

Of course, so the implied meaning is that it's record profit for Microsoft.

We can't "stop judging (MS) based on stock price" when the company/HR brag about trying to only pay 60% of market wages

The company pays 60th PERCENTILE, meaning it pays 100% of above average salaries. The phrase "make up for the rest" doesn't make any sense. The rest of what?

Anonymous said...

> > "How are you defining "non-performing
> > deadwood"?"

> According to HR, find those Kims and
> nail'em.

> According to Mini...umm... He likes
> Kims, so I guess he'd pick another
> subset. Maybe (here's a thought) the
> folks designated as underperformers
> multiple times in a row?

> Although that wouldn't pick up all the
> deadwood that makes political hay and
> doesn't produce squat.

The problem is, in _all_ large companies I've seen so far, the lack of clearly defined expectations of what it takes to get to the next level.

I recently asked a MSFT dev - "so how do you get ahead at MSFT?" The dev's answer was: "When you are performing at the next level, you will be promoted".

My next question was: "So how do you know you are performing at the 'next' level?", to which the dev said "You don't. They don't tell you, you're supposed to figure it out."

So now this begs the question - assume I'm umarried, single, have no social life, and want to get ahead at MSFT as, e.g. a dev - how can I do that if that is not clearly communicated to me?

Or more importantly, the question one should be asking is - "WHY" isn't that communicated to me?

Why? Here's why:

1) if you don't like the way we work here, get the fuck out.
2) if you like it here, then it's up to you to figure out why we work the way we do here, and play along.
3) even if you do figure out how we work here, there's still no guarantee regardless of what it is you do or how much of your life you burn for MSFT, that you will ever get a promotion/raise/bonus/upper management tenure, etc.
4) when you finally do figure out how we work here, and actually meet those expectations, AND we do give you a promotion/raise/bonus/upper management tenure, this still means you are back to rule #1, when you start thinking of getting ahead again

Why the above rules exist to keep you in the dark?:

1) corporations are pyramids as far as the hierarchy goes (whether it's financially-based or merit-based)
2) people are greedy/egotistic/bitchy
3) no one thinks he/she is worse than the person next to him/her in terms of performance, inteliigence, dick size, physical stamina, beauty, wit, etc.
4) legal liability

I'm probably missing a few other important notes here, but having said that, here's some guaranteed ways for you to get ahead at MSFT, if you have the balls to swing it:

1) do something that you think will directly impact sales at MSFT, in a positive manner. This is guaranteed to get you noticed.
2) do something that will create a perception of value in the eyes of your, most importantly, manager(s), and secondly, peers.
3) if you can't do any of the above, go get a fucking Ph.D. and become a tenured professor. Then only acts of congress can remove you from your position, that is, lazy ass. Oh yeah, at least you'll benefit from showing off to the world how smart you are as a bookworm.

To swing either 1) or 2) - you can't be an engineer. Sorry. Engineers are mill workers. As software engineering matures, the uber-geeks with their pony-tails and perverted sense of justice will get more and more relegated to steel factory workers (kind of like they are at AMZN or MSFT, possibly GOOG, I haven't spoken to anyone at depth there yet). Here's your input, produce output - see you. You did something, you got paid - buh-bye now! Promotion? Well, that depends if I got up on the right foot today (after a lot of verbal onanism among managers, that's what it basically comes down to)!

So what's it take to swing 1 or 2 you ask, if not superb programming skills? Well, you have got to become a superb bullshitter! I won't name who those are at MSFT, but there's a few outstanding ones who can convey an image of diligence, value, hard work, and basically an aura of happiness about them. Not that they're actually smarter or better than you in any way - they're just better at creating this perception with the words they say, the actions they do, the way they communicate to others about what it is they do, the way they ask their questions from others, etc. Does this come easy? Fuck no. This is why you don't see major bullshitters straight out of college - what you see straight out of college are a bunch of wannabe idealists..... never mature folks. Unfortunately, some never grow out of this phase (and I guess that's for the better, for we can't all have management types in companies, someone needs to do the real work).

Management (or better yet, upward career movement) is a choice, and requires learning a lot of skills, way past your C++/.NET algorithmic skills. So unless you are prepared to pack this knowledge about human psychology, business, technical knowledge, all rolled into one and served up with whipped cream and a cherry on top - don't bitch about anything at MSFT, AMZN, or anywhere else. Because believe me, you can't do better than them if the roles were reversed. You just _THINK_ you can do better, but you really can't (not unless you are Dr. Charles Xavier from x-men).

And lay off HR - they're there to stonewall you. You ought to have NOTHING to say to them, and they ought to have nothing to say to you past communicating benefits packages and/or policies designed around what I just said above (except in a much more polished, PC package).

Wake up people!!! MSFT doesn't owe you anything. Neither do you owe them anything. AT-WILL employment! Don't expect SOCIAL/FINANCIAL/ANYTYPE of justice ANYWHERE in ANY corporation. They _NEED_ you, and make sure you _take advantage_ to the max, of that fact, in any imaginable way you can. You would be doing yourself a disservice if you did not try to milk Microsoft or any other corporation for all they're worth, within the legal confines of the business, of course. This means doing exactly as much work as you're paid, and not a fucking ounce more, for as long as you are salaried, and if you ever decide to do _MORE_ than what you're salaried for, make sure you get some corroborated verbal guarantees from upper management that you would be remunerated for your efforts or better yet, signed statements promising cash-on-delivery for anything above and beyond your 8 hr per day efforts.

And if you ever short yourself on time for a project because you want to look like a Superman, well, you deserve everything that's coming to you when and if you fuck it up.

So wise the fuck up, play the game they play BETTER than them, chill out, put away 20% of your income for rainy days each month, don't worry and be happy.

Anonymous said...

Google's share price just topped $500 with a P/E of 37 as opposed to Microflop's 21...spread that peanut butter wide!

Collision Domain said...

So stop judging your company based on stock price.

We'd love to, but leadership keeps talking about how important shareholder value is and how the stock price is the metric for it.

Of course, it's pretty much been talk for the past five years.

Anonymous said...

> So stop judging your company based on stock price.

This link from MSN shows MSFT score. F on valuation and C in fundamentals. A on technicals.

http://moneycentral.msn.com/investor/StockRating/srsmain.asp?Symbol=MSFT

Anonymous said...

>The company pays 60th PERCENTILE, meaning it pays 100% of above average salaries. The phrase "make up for the rest" doesn't make any sense. The rest of what?

Now, now, gentlemen, settle down. If the fellow wants his pay reduced to a level commensurate with his skills, who are we to dissuade him?

Anonymous said...

Whew, Mr/Ms Anonymous Tuesday, November 21, 2006 4:08:31 PM, that was quite a manifesto. With some nuggets therein, I think. Maybe even pearls.

Not that we have to like it (that was the point, right?). But this blog is an at-will relationship too. We don't have to read stuff unless we want to.

Anonymous said...

"So stop judging your company based on stock price."

LOL. All due deference to insider holders, MSFT is overwhelmingly owned by external shareholders. So in fact it's primarily "their" company. They didn't get given those shares, they bought them. They did that with the expectation of getting a reasonable return over a reasonable timeframe. That return has not been there this decade. It's that simple. Keep ignoring it and eventually one of two things happens: the stock tanks even worse than it already has these past 6 years, or the management team gets replaced and the new team cleans house. In all likelihood, the first followed by second.

Anonymous said...

[snip]

So wise the fuck up, play the game they play BETTER than them, chill out, put away 20% of your income for rainy days each month, don't worry and be happy.


I would like to nominate this post as the best one in the history of mini-microsoft.

Mini, is there any way you can take this post and perhaps turn it into a sticky or the equivalent? We cannot afford for this post to get lost as yet another comment.

There's too much good stuff here, I cannot believe how everything this person says is about 100% spot on. No truer words have been spoken.

Anonymous said...

"We'd love to, but leadership keeps talking about how important shareholder value is and how the stock price is the metric for it."

That's funny. Ballmer told us, at last year's shareholder meeting no less, that "MSFT has never really used the stock market itself as a barometer of our success". Of course, that's total self-serving bs, but maybe the leadership team is just playing both ends down the middle while they suckle contentedly on their billions in SPSA's and congratulate themselves on how effective they are? Or rather would be, if only they weren't so preoccupied readying their villas in Tuscany...

Anonymous said...

Looks like the poster with: "So wise the fuck up, play the game they play BETTER than them" closed the discussion on all issues. Bravo.

Anonymous said...

Accountability....

MSN?

Yusuf? Blake?

You're joking, right?

let's see, MSN Search is now in the single digits in terms of market share... Blake has poured lots of money into that, but of course, he and the same poker playing cronies are running the show... and it's downward, onward down. For this, they got very healthy special stock awards?

during this time, Microsoft has again managed to shrink it's board by one seat. Accountability? Nah, only kidding.

Gates did not do his succession planning here. Not at all.

backatcha!

Toby said...

If we take this to its logical conclusion, we should find the ONE GUY at Microsoft who's doing the best work, give him a billion dollars, and shaft everybody else. Compensation problem solved!

That is roughly how it works today, and the CEO gets to pick the guy:

Last year, Barry Diller took home a pay package worth $469 million, making him the highest-paid chief executive in America.

His shareholders didn’t do so well. Stock in the main company he runs, IAC/Interactive, declined 7.7 percent last year. ...


lawprofessors blog



Becoming a millionaire will probably only ever be a distant dream for the average American. But for these two CEOs, it was a dream that came true every single day last year, when each of them pulled in more than $1.1 million a day, before taxes. ... the average American household would have to work more than 51 centuries just to make what either of these two top execs earned last year alone.

MSN MoneyCentral

Anonymous said...

Wake up people!!! MSFT doesn't owe you anything. Neither do you owe them anything. AT-WILL employment! Don't expect SOCIAL/FINANCIAL/ANYTYPE of justice ANYWHERE in ANY corporation. They _NEED_ you, and make sure you _take advantage_ to the max, of that fact, in any imaginable way you can. You would be doing yourself a disservice if you did not try to milk Microsoft or any other corporation for all they're worth, within the legal confines of the business, of course. This means doing exactly as much work as you're paid, and not a fucking ounce more, for as long as you are salaried, and if you ever decide to do _MORE_ than what you're salaried for, make sure you get some corroborated verbal guarantees from upper management that you would be remunerated for your efforts or better yet, signed statements promising cash-on-delivery for anything above and beyond your 8 hr per day efforts.

So wise the fuck up, play the game they play BETTER than them, chill out, put away 20% of your income for rainy days each month, don't worry and be happy.


It's difficult to disagree with anything you've said, yet the Office Space-esque nature of it makes me a tad uneasy. Words fail me in this, but it reeks of giving in to despair, of surrendering your soul to the system, basically of becoming one of the them that you mention so frequently.

What I do is not just for the paycheck. I'm in this field because it's what I do best and I'm at Microsoft because it's where what I do best makes the most difference. When I go the extra mile, I do it first and foremost for me, because who I am requires that I do my best for the people using the products I am responsible for and because of my belief that the state of the art in software and hardware can be pushed forward here and now by the actions of a few motivated individuals showing the way.

Moreover, it's unconscionable to me to play this sordid game against the others like me who don't want any part of it and just try to survive as best they can. I hold on to the forlorn hope that if we few huddle together, we can last a little longer against them.

The day these things die within me, believe you me I'll be headed out for a cushy, strictly 9 to 5 job in some dingy cube farm that pays a hell of a lot better than here and I'll be doing exactly what you've said to the hilt.

But that day isn't here yet.

Love,

Kim

Anonymous said...

You can all lament about the stock price and rattle off about how the share holders own the company and how everyone and their dog wants its to go up; the rate of 'return', ad naseum.

However, none of this matters one bit. Sure, everyone wants to believe if they work harder, make better products and drive up sales and profits that the stock price has to match, right?

No, wrong. That's not how the stock market works. It does not respond to mathematical formula (as much as the stock market analysts would have you believe.) The stock market is the product of human emotion, a summation of belief, fear and gut reaction. It is self defining.

The market on whole or the price of a single stock goes up or down because people believe it will (and act on those beliefs.) External forces like profits only affect it if the buyers and sellers in general believe it should.

This is not a secret. And it does not matter if you believe it or not. What does matter is what the big-fund managers believe. They move most of the stock. Convince them that steady growth in profits (albeit not huge) matters, or better convince them that their peers are convinced and you'll see the price go up.

Anonymous said...

"Sure, everyone wants to believe if they work harder, make better products and drive up sales and profits that the stock price has to match, right?"

In the short-term, as you correctly point out, not neccesarily. In the long-term, on average, yes. As Warren Buffet stated:

"In the short term the market is a popularity contest; in the long term it is a weighing machine"

Unfortunately for MSFT, its stock problems over the past 4 years can't just be blamed on a fickle short-term market. First, it hasn't been short-term by most definitions. Second, it has at least in part been predicated on very real concerns including rising and more aggressive competition (OSS, GOOG, etc.), anemic growth (including the worst growth year in MSFT's history as a public company), major execution problems (self-evident) and the glaring inability to have majorly expensive new ventures pay off such that earnings tracked revenue growth (noted in the linked post above). Those are material concerns even in a more fickle short-term environment, and more importantly components of that long-term weighing referenced by Buffet.

Anonymous said...

There's a lot of complaining about not being treated fairly on this blog.

What the earlier post tried to make clear is that your single option when you feel treated unfairly is to move jobs.

Posting here or on the internal blog about how you feel you should be treated instead will help you vent, but will not accomplish anything - the people in charge of the decisions to handle you didn't make these decisions arbitrarily, they made them because they felt they are giving you what you deserve.

Like you, they perceive themselves as passionate and considerate individuals fighting the good fight against odds and higher-than average contributors to Microsofts success. Whining will only make you appear ungrateful.

It should be obvious to anyone reading the internal blog and observing the changes over the last year that there is unfairness in our compensation system but nobody is going to do anything about it - if only because there is no fair system to correct the status quo.

If you have issues, don't whine, go jobhunting and post your success stories instead.

Anonymous said...

What I do is not just for the paycheck. I'm in this field because it's what I do best and I'm at Microsoft because it's where what I do best makes the most difference


I tell myself that if it was about a paycheck I could do other things, but I know that is not true. I can only do things I have become good at over the years. I could work at other companies, but most likely I would have to move to another geography to get a choice of jobs in my expertise. With a family it is not easy to move. I should have stayed in the silcon valley 5 years ago instead of moving up here. I am sure there are a lot of Kims in Microsoft who feel trapped. That is not good for the Kims and it is not good for Microsoft.

My advice is that Microsoft needs to loosen up the internal transfer process some more: I should be able to get a job offer within Microsoft like I am able to get from outside, without my manager knowing about it.

Kim

Anonymous said...

Happy Thanksgiving everyone.

In salaried job arrangements, employees are empowered to set their hourly compensation. For most Dev/Test/PM IC jobs, $100/hr represents a good work/life balance.

Anonymous said...

Someone wrote

>"MSN?

>Yusuf? Blake?

>You're joking, right?

>let's see, MSN Search is now in the single digits in terms of market share... Blake has poured lots of money into that, but of course, he and the same poker playing cronies are running the show..."

--

Everyone at MSN knows that Blake NEVER ran Search. Before the recent set of reorgs Blake ran properties like Messenger, Spaces and Hotmail. Also everyone should know that after the reorg Search now falls under SteveSi's dominion.

This is all public knowledge that you can obtain at http://www.microsoft.com/presspass

This is another instance that makes me suspect that a lot of the folks trolling on here don't even work at Microsoft.

-- Dare

Anonymous said...

So is it true that only college hires are L59/L60? I was hired as a 59 and had years of experience coming in. Another co-worker was hired recently as a L60 and she had years of experience coming in as well

Anonymous said...

So is it true that only college hires are L59/L60? I was hired as a 59 and had years of experience coming in. Another co-worker was hired recently as a L60 and she had years of experience coming in as well

They got you cheap or they believe you're limited.

Anonymous said...

If you come from a good college (Waterloo) with excellent grades, you can get hired at 62. Go me!

Anonymous said...

Its not just college hires that come in as 59/60. Plenty of people with 2 or maybe even more years of experience come in at that level. It's not about experience, its about the amount of experience that 'shows' during the interview. Of course, its also about who interviews you. Most product teams don't know how to interview or even identity people with skill sets beyond level 63. So they'll end up evaluating you on your skills that are most relavent for these lower levels. Half the time we do hire someone in at level 65 or above, its a mistake. (I'm talking about product development here, not upper management, though maybe they have this problem too.) Most likely you would get hired in at these higher levels if you were a well known somebody at a company with a well known product, or a well known researcher or student with well known work.

Anonymous said...

Your level coming in depends a lot on the group you interview with. Anecdotal evidence is that the legacy groups are likely to level at 59/60 while the emerging groups are a lot looser with levels.

Anonymous said...

If you come from a good college (Waterloo) with excellent grades, you can get hired at 62. Go me!

How many Canadians work at this company, anyways? Every time I turn around, another Canadian... (not that there's anything wrong with that)

Anonymous said...

Peanut butter.

I am a consultant for a European company, working with them on a MS IPTV project.

The MS TV people exhibit the worst of the new Microsoft.

Understaffed.
Underpaid.
Unable to hire new people because of crappy salaries. (Some of the job postings are more than a year old)
People bailing to Google, leaving yet more endless 70 hour weeks for the survivors.
Farther and farther behind schedule.
Death Spiral?

Locked into the classic MS development model that worked 10 years ago but seems to fail in recent times.

Combined with that MS arrogance that they understand the needs of their customers better than their customers do.

Any wonder that the Telcos can't make IPTV work?

Anonymous said...

I think this is relevant:

http://joelonsoftware.com/items/2006/11/24.html

Azazelo said...

Happy Thanksgiving everyone.

Yahoo! has adopted Microsoft style stack ranking. Oh wait - this is prescribed by a consultant.

The new system at Microsoft is also done by a consultant. The same one that advises Yahoo!


this truth? Interesting...
Azazelo Blog

Anonymous said...

RE: "Your level coming in depends a lot on the group you interview with"

For six years I've contributed to projects that generate more than 3 billion per quarter.

So this means that MSFT values a kid working on a toy project that will never ship higher than me?

No wonder its the ICs which move and not the stock.

BizDog said...

Great post Mini and very timely as well. It's late November and that means bring out the hip boots to wade into that fun time of year known as Mid-Year Review or Strategy Review depending on what org you're in. The peanut butter post and a few other things in my day job made me think... Do we have a strategy?? I asked some people for their opinion and got one of a few answers:

- Sell more NOW.
- Just f'in ship it.
- Some goal related to their organization's commitments.

So no, we don't have a cohesive strategy. I believe this is one reason we hired Ray Ozzie - to sort out the technical melange of things we could do as a compoany to the shorter list of things we should do and then to the focused list of things we must do. Ray's background makes him a reasonable choice and I'd rather have him at MSFT than at one of our competitors.

But that's just the technical side of the equation. What about the business models? How will we take this great stuff we're developing and make it widely profitable as a business? That's the strategy we're lacking and why we're falling behind in the market as a result. I've yet to meet a true business person at MSFT (in my opinion that is) who would be worth their weight in salt on the business model topic. It's a shame because we could really set the pace there, but we choose not to.

A different kind of geek develops business models - geeks with statistical, finance and marketing backgrounds who unfortunately are in short supply at MSFT and the few that are around don't get the kudos in the review system. We are great at tactical, one-off stuff in these functions which garners kudos galore in review models because of our cultural fascination with the "hero syndrome". But this isn't a short term tacktical game any more and we're truly awful at the long term game.

Frankly I'm at a loss at the moment for how to fix this. It starts at the top and if our most senior folks don't get this then perhaps this is pointless. The problem is many of them have done the ride and reaped the benefit of huge payouts - good for them, personally I think that's great - but don't confuse success in the past with the ability to generate success in the future. MSFT needs a new breed of leadership that can balance technical and business advancement equally well and THAT is what can give us a long term competitive edge.

Diego Calleja said...

Enjoy:

http://www.drizzle.com/~lettvin/2006/11/windows-shutdown-crapfest.html

:)

c said...

Business Week's "The Soul of a New Microsoft" suggests that J "how many billion in the red?" Allard will save the company. http://www.businessweek.com/magazine/content/06_49/b4012001.htm

This quote really jumped out and bit me, though: "Allard is one of more than 100 Microsoft vice-presidents"

We have more than 100 vice presidents?

Anonymous said...

See Moishe Lettvin's blog "The Windows Shutdown crapfest".

Here's what Joel Spolsky had to say:

"How many Microsofties does it take to implement the Off menu?
This item ran on the Joel on Software homepage on Friday, November 24, 2006
Moishe Lettvin, who spent a year working on the menu I criticized yesterday: “So that nets us a conservative estimate of 24 people involved in this feature.”

Every piece of evidence I've heard from developers inside Microsoft supports my theory that the company has become completely tangled up in bureaucracy, layers of management, meetings ad infinitum, and overstaffing. The only way Microsoft has managed to hire so many people has been by lowering their hiring standards significantly. In the early nineties Microsoft looked at IBM, especially the bloated OS/2 team, as a case study of what not to do; somehow in the fifteen year period from 1991 - 2006 they became the bloated monster that takes five years to ship an incoherent upgrade to their flagship product."

Anonymous said...

I think this is relevant:

http://joelonsoftware.com/items/2006/11/24.html


It might be relevant if Vista didn't in fact implement the very solution that Joel is whining about (plus an advanced flyout which normal users need never click on). But when it comes to UI everyone thinks he's a master chef.

Anonymous said...

100 VPs? Ha! You haven't been out to PressPass recently. For reference:

Alain Crozier
Alain Peracca
Alexander Gounares
Allison Watson
Amir Majidimehr
Amitabh Srivastava
Andrew Lees
Anoop Gupta
Antoine Leblond
Ben Fathi
Bernard Vergnes
Bill Gates
Bill Mitchell
Bill Veghte
Blair Westlake
Blake Irving
Bob Muglia
Brad Smith
Brent Callinicos
Brian Arbogast
Bruce Jaffe
Bryan Lee
Chris Capossela
Chris Jones
Christopher Liddell
Christopher Payne
Craig Mundie
Daniel T. Ling
Dan'l Lewin
Darren Huston
David Cole
David Thompson
David Treadwell
David Vaskevitch
Debra Chrapaty
Doug Burgum
Eduardo Rosini
Enrique Rodriguez
Eric Rudder
Frank H. Brod
G. Michael Sievert
George Zinn
Gerri Elliott
Grant George
Gurdeep Singh Pall
Henry P. Vigil
J Allard
Jane Boulware
Jawad Khaki
Jeanne Sheldon
Jean-Philippe Courtois
Jeff Bell
Jeff Raikes
Jeff Teper
Jens Winther Moberg
Jim Allchin
Jim Minervino
Joanne K. Bradford
Joe Belfiore
Joe Peterson
Jon DeVaan
Julie Larson-Green
Kathleen Hogan
Kevin Johnson
Kevin Turner
Kirill Tatarinov
Kurt DelBene
Lewis Levin
Lindsay Sparks
Lisa Brummel
Maria Martinez
Marshall Phelps
Mary E. Snapp
Mich Mathews
Michael Delman
Michael Park
Mike Nash
Mindy Mount
Mitchell L. Koch
Moshe Lichtman
Neil Holloway
Orlando Ayala
Paul Flessner
Peter Klein
Peter Moore
Peter Neupert
Peter Pathe
Pieter Knook
Rajesh Jha
Ray Ozzie
Richard McAniff
Rick Devenuti
Rick Rashid
Rick Thompson
Robert J. Bach
Robert Short
Ron Markezich
S. Somasegar
Sanjay Parthasarathy
Satya Nadella
Scott Di Valerio
Shane Kim
Simon Witts
Steve Ballmer
Steve Berkowitz
Steve Liffick
Steve Schiro
Steven Sinofsky
Stuart L. Scott
Suzan DelBene
Tami Reller
Tanya Clemons
Ted Kummert
Timothy Chen
Todd Holmdahl
Todd Warren
Tom Burt
Tom Button
Tom Gibbons
Tony Hey
Umberto Paolucci
Will Poole
Ya-Qin Zhang
Yusuf Mehdi
Total execs: 124
This is down a couple over the last few months...

Anonymous said...

> "Total execs: 124"

This list doesn't contain technical fellows, who are individual contributors on VP level and their compensation and responsibilities are on level with other VPs (for example, Dave Cutler, Mark Russinovich...)

Anonymous said...

>> It might be relevant if Vista didn't in
>> fact implement the very solution that Joel is whining about

I'm sorry, but you're talking out of your ass. Vista's "power" button contrary to the icon on it activates _sleep_ mode. And it's not Mac's "safe sleep" which is sleep+hibernate. It's regular Windowss "dumb" sleep without dumping memory to the hard drive. Which means that if there's a power outage or your laptop battery goes out, you're SOL.

So smart users will have to always use flyout, or re-assign the power button in the Start menu to do a proper shutdown or painfully slow hibernate. To do this you need to wade through several levels of dialogs, though, so most users will either suffer the flyout or suffer data loss due to unsafe sleep.

That's design by a committee for you, pal.

Anonymous said...

I am a consultant for a European company, working with them on a MS IPTV project.


Is MSTV still alive? Are they still split up between Redmond and Mountain View? There were a few smart folks there and a lot of not so smart folks. Another group that could use some real technical guidance, more careful hiring, and less political BS. I couldn't believe how many ship-its I got for products that were never seen by customers (and the one they did see to their regret).

Anonymous said...

FWIW - Lisa Brummel exercised options worth just over $5.25 million in the last month. From what I've seen of her I like her and can really begrudge her good fortune but I imagine that there are more than few Microsoft employees who were hired post options days or who have older options that are under water who would see that news as disheartening. This information is publicly available.

Anonymous said...

100 VPs? Ha! You haven't been out to PressPass recently.

Total execs: 124


As someone pointed out, this list doesn't include the Technical Fellows (14). It also doesn't include the DEs, who are partner level if not VP level (32). It also doesn't include 25-50 "plain VPs" as the list on Press Pass is only Corporate VP and above.

So, we likely have 175-200 VP level employees at a minimum.

It would be interesting to see the count of employees by level. You think LisaB would post that here for us? :-)

Anonymous said...

FWIW - Lisa Brummel exercised options worth just over $5.25 million in the last month. From what I've seen of her I like her and can really begrudge her good fortune but I imagine that there are more than few Microsoft employees who were hired post options days or who have older options that are under water who would see that news as disheartening. This information is publicly available.

Update, 10 Million. 5 mil on 11/13 and another 5 mill on 11/16. Guess someone needed a little xmass spending cash.

http://finance.yahoo.com/q/it?s=MSFT

Anonymous said...

Thanks for a great post. I was hired as an L63 and am working towards L64. The path spelled out for me is difficult but achievable. It would be really useful to have a follow-up on the L65 "knife fight".