Thursday, April 28, 2011

Microsoft FY11Q3 Results

What's on your mind as the Microsoft FY11Q3 results get released? Some things I'm thinking of:

Win7 Business being eaten alive by iPads? Oh, those hungry hungry cannibals eating away the post-PCs for your PC dependent iPad slates. Probably no good news in the Win7 OS business could please people seeing Apple having to buy everyone working at Apple pants with ten pockets so that they can continue stuffing money into them.

Office 14 / SharePoint: continued strength? Leveled? Dip?

Kinect: what are the post-holiday sells like?

Xbox Live security: not that we want to be cocky, but if Xbox Live was broken into like Sony's Playstation Network Microsoft would have a big-black eye. Probably two. How confident is Microsoft in the network's security?

WP7 numbers: how has the trend been in activated phones? How is the Nokia deal shaping up? How will Microsoft not be the weepy little toy of the phone carriers crying over a release chart when the Mango update goes out?

Share price: talk about one dead share. It's a dead fish. That a bunch of hippy dock-workers played hacky-sack with and left to rot out in the sun. So dead that we're shifting budgets around to not award stock but give out crisp, sweet-smelling Benjamins instead to the employees we value most. Microsoft millionaire days? A long, long distant memory. I think of that book Microsoft In The Mirror where a number of interviewees were reluctant to share with outside folks that they work at Microsoft because folks would light up, assuming they were rich beyond words. Today's response? "You work at Microsoft? Well bless your heart."

Keeping employees: seems as though we'll need to justify the extra bucks and effort the company is putting into spreading cash to the section of employees most likely to be recruited (aka poached) or give up on Microsoft. I'm sure that the investors could care less about our performance review system, but it's sad we stuck with a 20th-centry industrial review system for a 21st century Gen.Next workforce. Like many opportunities: buh-lown.

The two pressure points I certainly continue to feel:

WP7: the NoDo update was just a Class-A Cluster-Fuck. And I don't use language like that very often. And the fact that the pre-update bricked phones was inexcusable. The WinMo team has to realize that everything they have to do must be perfect and ahead of schedule (wrt running in customer's hands). Any sort of focus other than that is a recipe for disaster. Mr. Ballmer is a fan of Coach John Wooden. WWJWD? Pound excellence into the team such that releasing an update was the easiest thing they had to do. If you're the kind of person looking for a challenge to fix Microsoft and prop-up its future, look for opportunities to join that team. Less Pink, more you.

iPad: it's pretty. It's slick. It comes from a company where design is realized. It doesn't do as much as a PC, but it does enough. And by now everyone has been able to put together the pieces (e.g., Windows 8 demonstrated running on ARM) to figure out when Microsoft might release something that has similar form factor. But will it have the elegance and cohesiveness of the iPad 2, let alone the iPad 3? Will it be too late?

Should Microsoft release an iPad competitor, it will be THE defining moment for Microsoft's future: back in the game or game over.

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Thursday, April 21, 2011

Microsoft's New Review and Compensation System - Now With More Cash!

"I am not a number, I am a free man!"

Well, at least we don't have a Six to give out.

Goodbye E/A/U + 20/70/10[I/II] and hello 1 to 5.

Kim, we just don't have a Limited to give to you anymore.

So we have a new review model. And a rework of our compensation. With cash, cash, cash. Forget that Microsoft stock because it's dead in the water and today's Microsoft employee is all about the paycheck. And if you actually work on creating products at Microsoft, you're getting an extra R&D bump.

And with the new 1 to 5 review score we have a new curve, too. 20% of you get a 1 (whoo-hoo!), 20% of you get a 2, 40% of you get a 3, 13% get a 4, and 7% get a 5. And probably fired.

Your review score is now a composite of: your results (where results, not effort, matters), what you did to get your results, and what your proven capability is. With an ideal that teamwork and feedback is now part of the review system, though it's not clear if feedback is mandatory via peer based reviews.

It's too bad that the internal InsideMS blog has been eradicated and wiped out of existence. It could have lived on a little bit longer so that the review system could be discussed there.

So what are your reactions?

Is the InfoPath-based review form dead? Please? Can we go back to a simple little Word form out of respect to our new simplified review score?

The next thing I think of, as a manager, is how is calibration now run. We used to do two stack ranks for the two review scores. Now we either do one or we do three (results, what was done for the results, and proven capability). Three seems crazy.

Next is whether this will indeed help retain employees. We've been losing a lot of good people and the Puget Sound area is ramping up in hiring. Google has always been draining people away. Facebook is now grabbing some great developers and Amazon is hiring like crazy.

So now you have some mystery amount of cash in your future to look forward to. And a simpler review score. But is that what you really want? Is that what you told LisaB during her Listening Tour? Given that Microsoft stock is in the toilet, does the future influx of cash coming in September make you feel better about working at Microsoft and will this make up for having reduced benefits (e.g., a new medical plan with more of that new cash out of your pocket)?

Will you be honestly told during the whole year how well you're doing so that you have frank feedback that helps you be fulfilled with your job? A problem with Stack Ranking is that leadership (once burnt by the review model) holds back praise due to the peer relative Stack Rank pushing a person down and then creating a "surprise" gap between the past praise feedback given and the review result earned. That's not fixed.

Anyway: let's celebrate saying goodbye to the 10% / Limited rating. Since the 10%-ers were not actually fired you ended up keeping people on staff who were designated as now plateaued and limited in there career at Microsoft. They had reached the end of of the ladder. These now demoralized individuals with no hope for future rewards or promotions should have at least been given a Peter Principle plaque or something.

Old school: with respect to the new Scarlet A, I assume that a 4 is the old 3.0 and that a 5 is a 2.5 and that having either a 4 or a 5 now limits other group's interest in your career, which kind of means that we've gone from making 10% of the employees unattractive to making 20% of the employees unattractive. We'll see if that's the case as this plays out of over time.

So, chair-rearranging or just what you were looking for?

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