Why are Microsoft and similar large organisations really doomed to fail?
Bad CEO? Don't think so!
- It's the system! - Because of the systemic handicap inherent in large collectives!
Because it is more advantageous for middle ranking management to compete internally underming their colleagues' departments and project developments, rather than make their company compete on the market!
Undermining a corporate colleague is more career-rewarding, for a "monkey", and brings rewards faster than a successful project management! It is a culture of hierarchical collectivism where a stronger must fight a weaker and must suck up to the higher in ranks. It is a culture of punishing the one who tries to work for a slightest mistake while rewarding her boss for all successes. It is a culture akin of a herd of primates where everybody is a follower, nobody is capable or willing to show any creativity, and everyone spends all energy on social interaction and power games.
Eventually, normal humans are treated as misfits and leave or are pushed out, and those who embrace that culture, or are of this culture - stay in.
“Microsoft’s Lost Decade” by Kurt Eichenwald
The story of Microsoft’s lost decade could serve as a business-school case study on the pitfalls of success. For what began as a lean competition machine led by young visionaries of unparalleled talent has mutated into something bloated and bureaucracy-laden, with an internal culture that unintentionally rewards managers who strangle innovative ideas that might threaten the established order of things.
Fiefdoms had taken root, and a mastery of internal politics emerged as key to career success. In those years Microsoft had stepped up its efforts to cripple competitors, but—because of a series of astonishingly foolish management decisions—the competitors being crippled were often co-workers at Microsoft, instead of other companies. Staffers were rewarded not just for doing well but for making sure that their colleagues failed. As a result, the company was consumed by an endless series of internal knife fights. Potential market-busting businesses—such as e-book and smartphone technology—were killed, derailed, or delayed amid bickering and power plays. That is the portrait of Microsoft depicted in interviews with dozens of current and former executives, as well as in thousands of pages of internal documents and legal records.
More employees seeking management slots led to more managers, more managers led to more meetings, more meetings led to more memos, and more red tape led to less innovation. Everything, one executive said, advanced at a snail’s pace. “There was this institutionalized system, and it was like designing software by committee,” said Prasanna Sankaranarayanan, a former Microsoft engineer. “Things moved too slowly. There were too many meetings.” Just as with e-books, opportunities for major product developments slipped away. …
By 2002 the by-product of bureaucracy—brutal corporate politics—had reared its head at Microsoft. And, current and former executives said, each year the intensity and destructiveness of the game playing grew worse as employees struggled to beat out their co-workers for promotions, bonuses, or just survival.
Death by "stack ranking" peer-review system.
Microsoft’s managers, intentionally or not, pumped up the volume on the viciousness. What emerged—when combined with the bitterness about financial disparities among employees, the slow pace of development, and the power of the Windows and Office divisions to kill innovation—was a toxic stew of internal antagonism and warfare.
“If you don’t play the politics, it’s management by character assassination,” said Turkel.
At the center of the cultural problems was a management system called “stack ranking.” Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system—also referred to as “the performance model,” “the bell curve,” or just “the employee review”—has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor.
“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” said a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”
“I was told in almost every review that the political game was always important for my career development,” said Brian Cody, a former Microsoft engineer. “It was always much more on ‘Let’s work on the political game’ than on improving my actual performance.”
Creating wealth versus selling someone's product.
In Walter Isaacson’s authorized biography Steve Jobs, Jobs acknowledged Ballmer’s role in Microsoft’s problems: “The company starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company.… [Then] the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when [John] Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft. Apple was lucky and it rebounded, but I don’t think anything will change at Microsoft as long as Ballmer is running it.”
Most interesting, however, is that Jobs put the ultimate blame on Bill Gates: “They were never as ambitious product-wise as they should have been. Bill likes to portray himself as a man of the product, but he’s really not. He’s a businessperson. Winning business was more important than making great products. Microsoft never had the humanities and liberal arts in its DNA.”