Microsoft has become everything it 'despised,' insiders tell Vanity Fair

Interviews with former 'Softies draws a picture of a company that has become everything it was once against.

A new article in Vanity Fair says Microsoft has lost its leader role in technology to Google and Apple because it's become an inefficient, bloated and bureaucratic corporate monster.

In other words, it's become everything it once mocked.

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"They used to point their finger at IBM and laugh," Bill Hill, a former Microsoft manager, told Kurt Eichenwald, author of the Vanity Fair article. "Now they’ve become the thing they despised."

The full article is not online, only a synopsis is, and the new issue isn’t out yet, but Todd Bishop, a former Seattle Post-Intelligencer writer who set up GeekWire after being cut loose from the paper, obtained a copy of the article before publication. He says the article is accurate, albeit one-sided:

"The piece is not a complete assessment of the company. It feels more like a caricature, highlighting Microsoft's worst qualities and overlooking the stuff that actually has gone well over the past decade."

He has a point. First off, ex-employees are always dubious sources. You don't know why and under what circumstances they left. They could have an ax to grind with someone and achieve it by badmouthing the company to Vanity Fair. Countering that argument is the fact that many firms have non-disparagment clauses for ex-staff, and it also wouldn't reflect well on you to go badmouthing a former employer so publicly.

Plus, Microsoft has executed very well in certain areas, like Windows Server, developer tools and MSDN, and Xbox. I hope Eichenwald delves into why Bob Muglia, who had the server and tools business running so incredibly well, was suddenly terminated, because it was a shock to a lot of people. Ditto for the dismissal of Robbie Bach and J Allard, who took the company from zero to the top of the videogame console business. (Is anyone noticing a trend here?)

One of the biggest problems is the company's "stack ranking" employee review system, which sounds like someone took Jack Welch's 20/70/10 vitality model rule and perverted the daylights out of it.

Welch said 20% of a workforce is composed of the stars who really get things done, 70% are those who do their work adequately, and about 10% are dead wood who should be sent on to a new endeavor.

Stack ranking, though, is toxic, judging by the description of it. "If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review," a former software developer told Eichenwald.

The end result was employees fighting amongst themselves to avoid being the fatal one person rather than focusing on making a good product.

This is not the first time I've heard about problems with staff management at Microsoft. "Who da'Punk" at the Mini Microsoft blog has been arguing this for years. He claims to be a Microsoft employee and has repeatedly said Microsoft is too big, too bloated, and too bureaucratic, and that the employee assessment method is draconian and counterproductive.

There's a lot more to the article, even the preview. I'll hold off on any more comment until I get to read the whole thing. I do want to know how in the world Microsoft can turn this around when it's still being led by the same people who got it into this mess in the first place, while driving out the people with some of the best success stories in the company.

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Copyright © 2012 IDG Communications, Inc.