Thursday, July 28, 2005

Microsoft Financial Analyst Meeting 2005

No commentary, just links (which greatly reduces my chance of writing pouching instead of poaching… not that it currently matters…). Below are postings relevant to today's Financial Analyst Meeting at Microsoft. If you have some spare minutes and are vested in Microsoft's future, I recommend reading below and considering the immediate pre-, during-, and post-reactions to today's presentations. If you find other links relevant to today worth reading, please by all means post the link in a comment.

Microsoft's Investor Relations:

Joe Wilcox at the Microsoft Monitor:

Todd Bishop at the Seattle-PI:

Random other links:



Tuesday, July 26, 2005

Great! Amazing! Innovate! Huge!

Wow, it's about twelve hours after I read Steve Ballmer's Going Beyond and Delivering Results employee email and my orifices are still puffing out the smoke that was so deeply loaded into them.

Talk about a 100% rah-rah content-free blah-blah-blah feel like I'm being sold a bunch of numbers disconnected from reality just what did we ship anyways rambling must stop email. It makes me want to fire up a Perl script just to count the superlatives that make up, it seems, half the content of the message. But as you all know, I'm too lazy to do that, so how about me typing interesting words as I scan through the text of the message:

Innovating! Amazing! Huge! Unbounded! Innovation! Rocking! Incredible! Impressive! Super critical! Huge! Amazing! Innovate! Innovative! Powerful! Huge! Innovation! Breakthrough! Phenomenal! Innovation! Strong! Great! Innovating! (then it takes a moment for reasonable writing.) Incredible! Amazing! Superior! Exceeding! Delighting! (Linux stories - yeah, those are fun.) Superior! Superior! Thanks! Incredible innovation! Drive! Passion! Innovation! Commitment!

I thinketh the CEO doth praise too much.

I want to be motivated. Like Mulder, I want to believe. Only this case instead of a UFO poster I have a picture of a happy smiley Ballmer with all these exclamations shooting out of his mouth. But I feel kind of down after reading this email. It's as if a good friend has just tried to manipulate me and my understanding of reality and they're standing in-front of me, smiling, waiting for my acquiescence.

I can only guess that this is laying the stage for the Financial Analysts Meeting coming up at Microsoft this Thursday. Oh, if I could only get there in time to put up all sorts of questions these analysts need to be drilling Microsoft about. But I'm hoping that crowd is bringing both hip waders and BS detectors and won't be shy to call BS.

We'll see when their write-ups start appearing later in the week.


Monday, July 25, 2005

Sun Breaks with a Chance of Showers

Another post where I just spew forth a lot of little random things that have been piling up vs. a bunch of little posts. Not exactly content free, but it's sort of like a colonic for my ragged, stained notepad that lets me move on.

Over at Proudly Serving, Mr. Barr provides the post 10 Slightly Unusual Ideas to Mildly Perturb Microsoft in response to the whole 10 Crazy Ideas thing. There are some good comments in there, too. I would love if this "ideas" caught on as a meme and everyone took a chance to reflect on Microsoft changes they think would best suit the company, its employees, and shareholders. Use this to channel feedback as we prepare for the Company Meeting.

And as for the paper itself: true, not crazy ideas. But it's like the first crack in the rock. From what I understand, Gates did read the paper and provided feedback. Hopefully something better than TTSFTIEH.

Thank goodness the Company Meeting is back to being a real company meeting at SafeCo field! Now, why is Mr. Fire-Them-All so happy to blow money on the Company Meeting? Well, like I said when I bemoaned its weird replacement last year, I just love going in for the morale building influence of it. True!

But it makes me wonder... if we were going to have a button for the disgruntled to wear this year, what would it say?

I'm not too good at this. I'll have to think, but please feel free to post your suggestions here or in your blog.

Next item: kudos to the IE / RSS team for getting such a nice bit of consensus together around their future feature set. When I learned of the team, I was really worried (especially given at least one person on the team I know being an untalented cool-hunter). But they pulled it off, along with grudging kudos from the crowd who doesn't think Microsoft can ever do anything right. Obviously, due to our past excessive sins, we have a long road from perdition to hike just to make it to purgatory and hang out for a while. It's interesting that at the same time, Apple updated iTunes and just crapped XML-ish goo all over the RSS for blogcastin'. And the Alpha-Geek reaction to that was more measured, "Gee, I weally wish that Apple wouldn't do that."

Next... for some odd reason, I'm feeling more and more MSFT-Patriotic as of late. One thorn I'm really beginning to get tired of, strangely enough, is O'Reilly media. Ever since I was a long-haired Unix geek I relied on O'Reilly. But I'm just getting tired of their begrudging support of Microsoft while at the same time snarking at us from their blogs and conventions. Annoyed with us? Then do us a favor and don't go publishing anymore Microsoft-centric titles and make money elsewhere. As soon as I can find a reliable publisher that does as good a job of editing and producing texts, I'm switching. I really regret ever dollar now I spend towards buying an O'Reilly book when there's not a quality alternative. Oh, Addison & Wesley, get off the Agile Scrum scam-train and start publishing good, strong technical books again!

It's interesting to see Mr. Steven Sinofsky's Technical Career Forum blog. Now, I don't know much about Mr. Sinofsky. But earlier in the year I was over in the absolute worst and poorly designed building on campus - #36, the home to just about all things Office - and the discussion about the current and previous releases of Office came up. Mostly around how Windows had screwed Office really really well over constantly slipping and cutting features that Office was trying to synchronize a release with. One thing related to me, that I have great respect for Mr. Sinofsky if true, is that Sinofsky more or less told anyone hawking a .NET CLR integration demand on Office to take that CLR and JIT it up where the sun don't shine. I have great respect for that.

(flip, flip, flip) Oh, I should mention the comment from Microsophist saying all is cool with the former blogger and the transition to "Ex-Microsophist" was just a personal decision. In the meantime, I noticed that another blog has popped up worth mentioning: MSFT Bagholder. The feed is at .

Next to last: my goodness, how are you going to keep them down on the farm when they see the cool things that Google is doing? Why, you're going to sue their ass! EricR had to be involved in that decision. Lawsuits certainly make our Microsoft v. Google competition all haired-over and grown-up now. While this is pending though, you'd best not wander over to Google unless they are hiring you to do something pretty damn different than you're doing now. It reminds me of how eventually groups in Microsoft blow their lid when the new sexy group ramping up hiring is grabbing all the good people they can find. Eventually, "Pouching!" is cried out and the sexy group is told to keep their hands off. Too bad for those left who wanted to go but just where too slow.

Last: while Todd Bishop's article about the software market heating up notes the sad fact about Microsoft hiring a bunch of people over the past year, there is a silver lining. Lots of local software companies are hiring. So as you look around and decide, "This is not my passion!" about what you're doing day to day, know that local, energized companies are ramping up their hiring. You finished your review feedback recently, so use that momentum to update your resume and CV and fish that around. Maybe those who bite won't be too interesting. But you just might find yourself pleasantly surprised in snagging a great position outside of Microsoft.

And since July 1st has passed, your review bonus is all yours.

Thursday, July 21, 2005

Microsoft Financials: "And then?"

Another financial announcement. Once again, I imagine the financial analysts on the other side of the speakerphone channeling a scene from Dude, Where's My Car? and saying:

And then?

Liddell: "No and then!" No real break-out product announcements on the horizon, other than the ever-so-cool immediate money losing XBox 360. And just how many times can you talk about releasing Yukon and Whidbey? Maybe FY07 we'll have a new vista to stand from and show how the next Windows and next Office will save our stock. Or not.

Some interesting tidbits are in Joe Wilcox' rummaging through the data:

  • Information Worker: "While Microsoft attributes some of the income decline to spending on marketing and new hires, I remain concerned about the division."
  • Microsoft Business Solutions: "I see no signs this division will achieve profitability in the near future."
  • MSN: "whopping"

Another view over at CNN / Money regarding the stock price and investor's reaction:

As such, some analysts say investors probably shouldn't expect the stock, which has been mired in the mid-to-high $20 range for more than three years, to move significantly higher.

"The stock has probably bottomed out," said Alan Davis, an analyst with McAdams Wright Ragen. "But with no dramatic increases in earnings any time soon, the stock will probably increase in line with earnings growth."

As for MBS and it making a profit: "We expect double digit revenues growth … including double digit, 10 to 11 percent, growth for MBS for the [FY2006] year," Liddell said. "We want to see improved profitability [in MBS] but we're not likely to see that in the coming year." This is where I whack the MBS-Dead-Horse again and simply ask: come forth with a date for any segment to be profitable. Commit to it. Be accountable if you miss that date and either decide it's time to reorganize or shut-down that segment. Same for Mobile. Same for Home & Entertainment.

So in general, the reaction is "eh." No expectation for stock growth anytime soon. There's curiosity over why increased PC sales didn't result in higher client revenue. Lots of praise for "Halo 2" coming to save HED.

What do shareholders think? Are they just biting their tongue, waiting for the new Windows to be released?

And yes, Google announced today and is going down in after-hours trade. But before you get too cocky and talk about an over-valued over-inflated whacked out Google stock, do take a moment to consider the past year's stock performance:



(Sorry for the update spasm - my bad for trying to get fancy and include an image)

Monday, July 04, 2005

Microsoft Stack Ranking is not Good Management

There are some excellent follow-up comments in my post about how Microsoft's current review stack ranking system seems completely busted and unfair. While I truly believe there are solutions to it, the solutions will neither be easy nor readily agreed upon. But our system is busted and we have to walk away from trending great performances downward, demotivating our employees, and giving people a reason to keep around their poor performers to ensure the bottom of the curve is always easily occupied.

A few questions considering the comments and the current review season joy:

  • What do employees want and need in order for them to provide fantastic customer-pleasing results?
  • We have a bunch of stinker leads still. How do we identify them? What do we do with them?
  • What can the stack ranking system be replaced with?

The Washington Post recent had an article called "The Mark of a Good Manager." What makes a good manager? One that empowers and trusts their employees with meaningful work and a manager that is available for engaged conversation and is respectful of questions (a challenge for Microsoft). I have a great lead now, but I've had some leads who perfected the, "Huh? What the hell do you want?" gaze when I dropped by their office to clarify an implementation detail.

What the hell do I want? To get you to do your job.

Folks know that managers get a separate people review rating in addition to their individual rating. I haven't seen this given a whole lot of attention. A problem with the review rating is that it's still something negotiated by the lead and their management. Shouldn't the reports (from the very bottom of the hierarchy) have some kind of say? Folks might actually fill out the manager feedback if they knew there was a spot to rate their boss and have it stick. Sure, there might be some sycophantic and burning revenge bits in there but out of this noise would be the stars and the clunkers. Love your stars, get rid of your clunkers.

First, I'd want to fire the bad managers. But as a compromise, I'd look back at their individual contributions and if they were happy and productive good employees, I'd give them that chance to side-step back into an individual contributor world. Make this part of an effort to flatten management all-around and get more talented contributors back spec'ing, developing, testing, and all that other work. Decide that managers are going to plain just manage, and manage super-well.

Back to the stack ranking system. I was in Borders at Redmond Town Center and I stumbled across Joel Spolsky's new book The Best Software Writing I (which was sheer luck - I had seen it before but mistaken the current cover for the previous book's cover). I flipped through it and by sheer luck compounded hit the article by Mary Poppendieck put in the section called "Team Compensation." (it can be found off of Ms. Poppendieck's site as well: ). I read the article a little and decide to plunk down some cash for the book (I'm quite glad I did) and sat down in Starbucks and continued reading.

The article deals with the classical story of a team that did a fantastic job all around but now the manager is faced with stack ranking her employees. She says they all are the best (4.0) and has to deal with the consequences. I certainly recognized the listing of dysfunctional consequences that result from the competitive stack rank system:

  1. Competition.
  2. The perception of unfairness.
  3. The perception of impossibility.
  4. Suboptimization.
  5. Destroying intrinsic motivation.

Something I didn't realize is that good ole Deming himself decried ranking review systems and I thank the article for bringing that up. Back when I was a Deming-nerd I didn't work for a stank-ranking organization so that particular key point was lost of me. The Deming article Gone But Not Forgotten has the following succinct gem:

  • Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict.

I'd like to hear from the Microsoft executive who thinks they have greater insights into team leadership than Deming.

Our current review system lacks honesty and integrity when you have to fit people to a curve and then tailor your feedback according to where they ended up. You're lying to them about their accomplishments so that they can be fitted into a compensation model. You can't give them truly honest feedback during the rest of the year because the end-result-curve may not match your kudos.

The only feedback I see mandated to give people during the year? Give them feedback and "message" them if they are at risk of getting a 3.0 so that it's not a surprise. We spend more time preparing the soft-landing for bad-news that folks who are doing great don't get to hear it.

We have to grow up and come up with a review system that encourages truth, encourages recognition, and encourages people to be their best without having to kick their peer in the shin ("I don't have to run fast - I just have to run faster than you!"). And don't get trapped in the mindthink that truthful feedback is tightly coupled with compensation.

Don't Look Cross-eyed at the Turkish i

Boy, I sah-crewed da pooch with that offhand Turkish "i" comment. A'ight. I know how to back-pedal and regroup and try to come up with a lucid, compelling defense of what I was thinking...

Nope, can't do it. I typed and I typed and I typed and it just sounded like myopic drivel that I only half-believed in myself. Maybe even I'm succumbing to fatigue.

The issue is that I'm frustrated by the loss of mainstream features that have to be cut in order to code and test against hard international features that will have a marginal return-on-investment at the expense of cutting something that Fortune 500 companies would be delighted to see and deploy. Our competitors don't sim-ship in all those languages and it is an opening for them to establish competitive ground.

Return-on-investment. Balancing features vs. international markets is sort of a knap-sack problem, except when done right, you empty the sack and get increased deployment and adoption, which translates into cool, crisp cash. That problem is not best represented by a vector of "i"s but something much more complex that I doubt any of us will agree upon. Personally, I'm fighting right today for the decisions that will have Microsoft actually shipping product NOW and putting down a foundation to grow into for the next decade.