Microsoft's 'Lost Decade' sensationalizes common issues among large corporations

An article to be published in Vanity Fair's August print issue highlights Microsoft's (somewhat common) missteps in the past 10 years. But what about its successes?

The tech community is abuzz in anticipation of an article set to be published in the August issue of Vanity Fair titled, “Microsoft’s Lost Decade.” The magazine has published a preview of the piece on its website with the much more pointed title “Microsoft’s Downfall: Inside the Executive E-mails and Cannibalistic Culture That Felled a Tech Giant,” if you’d like to check it out. A number of prominent journalists have been given a chance to read and comment on the full article before it hits newsstands, and as you may suspect, the blogosphere is already full of opinions.

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First off, I must be clear that I have not had the opportunity to read the piece in its entirety yet; as such, it would be unfair to draw any solid conclusions at this point. Please keep that in mind. I will say, however, that what I have seen of the piece thus far paints an incomplete picture of Microsoft and sensationalizes some issues common to highly-successful corporations.

The title of the preview alone should serve as a warning of impending exaggeration. Microsoft is a “Felled a Tech Giant”? Can someone explain when that happened? Only the most ardent haters would call Microsoft a felled giant. I’m certain Sony and Nintendo have different opinions of Microsoft. Operating system market share numbers also tell a somewhat different story—last I checked Windows owned a measly 92% of the market. I’m sure the number of students and corporations using Microsoft Office is somewhat high too, but I digress.

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A section of the article that details Microsoft’s idiotic use of a so-called “stack ranking” system to rate employees is perhaps the most interesting and personal. I have multiple friends and contacts—all of whom are talented, smart, and loyal people—who have left Microsoft over stack ranking. To quote the Vanity Fair preview, stack ranking “forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—[and] effectively crippled Microsoft’s ability to innovate.” This is absolutely true, but it’s also not news. People have been talking about stack ranking’s effects at Microsoft for years.

This piece also goes on to say, “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. It leads to employees focusing on competing with each other rather than competing with other companies.” On top of that, stack ranking also makes it very difficult, even for above-average employees at Microsoft, to advance or join groups they may be more passionate about. One of my close friends spent almost a decade trying to move into a more fast-paced groups at MS, but couldn’t because higher-ranked employees always got preferential treatment, whether they were the best candidate for the position or not.

It seems the underlying theme of the piece, at least the underlying theme that can be gleaned from the portions of the article currently available, is that Microsoft’s Lost Decade was filled with major management blunders that have severely diminished the company’s importance. While that may be partially true, let’s not be hasty. Microsoft had some major successes last decade—Windows XP, 7, and the Xbox 360 come to mind. It’s in the area of mobility where Microsoft fumbled. And if the last few weeks are any indicator, Microsoft knows this and is leveraging all of its might to correct its course.

Make no mistake: Microsoft destroyed the early foundation laid by Windows Mobile years ago in the smartphone (and now tablet) space and completely missed the boat on the ultra-mobile revolution started by Apple with the iPhone and later the iPad. But no company is immune to mistakes; it happens. It’s how you recover from those mistakes that ultimately matters, and it appears Microsoft has a solid plan moving forward, as evidenced by Surface, Windows 8, and Windows Phone 8.

Whether or not it’s too little or too late remains to be seen.

Copyright © 2012 IDG Communications, Inc.

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