Why Microsoft is in Denial

“Denial ain’t just a river in egypt” – Mark Twain

I’ve been putting off a post about Microsoft. I mean, 4.5 years of my life, where to begin? Before I say anything else, I want to be clear that I enjoyed working at Microsoft – I think it’s as good as working at a large corporation can get. You’ll never meet so many passionate and brilliant people, and the salary and benefits can’t be beat. I would recommend it as a place to work, but not for everyone. And I would consider going back.

The problem is if you want to produce something you can be proud of, you might just lose your mind. At the very least, it’s going to take a while and be very aggravating. Here’s the problem: working at Microsoft is ideal if you just want a job. People that want a certain quality of life take advantage. People that want to produce – they either give up, or they leave. The culture is scaring away the passionate and creative individuals that it needs to succeed. My theory is that Microsoft’s innovation problem is driven by a culture of politics that causes individuals to focus on themselves more than the company, resulting in denial of the reality of the business.

An oped piece in the New York Times today inspired this post. It’s titled “Microsoft’s Creative Destruction” and it contains some constructive criticism. I was recently speaking with the CEO of a local startup about the great employees we both knew at Microsoft. “With so many great people, why does the company still seem to be so slow and reactive?” he asked. I often say that Microsoft is a company full of really great people working really hard producing very little. Pinpointing the problem is not a simple task, but politics is a good place to start.

The Culture of Politics

The article hints at internal politics as a factor preventing creativity in the company. I absolutely agree. Microsoft is proud of what they call the “culture of accountability”. It makes sense: you sign up to deliver certain things, and your performance is judged by your level of success. But over the years, I discovered that it’s really a culture of politics. When people didn’t deliver on their accountabilities, it too often felt like there were no consequences (ehem, windows vista?). At worst, leaders were pushed out of a position, but then put into another similar position as if nothing ever happened.

People nailing their accountabilities often didn’t excel in the company, either. The people that did excel had a strange tendency to be absent – the people that make you wonder ‘what is it they do all day?’. I finally figured out they were spending their time networking – they would be in meetings all day, would not respond to emails, and would not do anything outside of their accountabilities unless it made them look good. Instead of focusing on what was best for the company, they focused on what was best for their career. These individuals were actually pretty brilliant – they realized they had nothing to gain by always working hard and helping others. Instead, they chose their work wisely. It reminds me of a similar realization I had in college, when I realized I could kill myself for an A- average, or work half as much for a B+. I chose the B+.

This is not to say that some people don’t rise up in the ranks for doing outstanding work. Rather, the issue is that outstanding work is often overlooked, and often promotions come as a surprise. The average employee can’t determine the ideal behavior, and pretty soon the job is just a paycheck.

My final project at Microsoft involved building reporting tools. These tools allowed certain teams to provide better service to customers and grow revenue while also saving the company money by increasing efficiencies. The problem was the tools required data, which was owned elsewhere in the company. What should have been the easiest part of the project became the most difficult – we were repeatedly denied access to the data. Over time, it became apparent that this was because this other team saw our team as competition (they also built tools, and we were making them look bad). While the issue was slowly escalated through upper management, we found a backdoor to the data and released a high-priority tool. Soon after, the data source mysteriously stopped being updated. Pure politics – I could not do my job because of competition within the same company, and while we debated, the business – and many employees – suffered.

Even if the company can restore the culture of accountability, it has some negative side effects. First, it encourages employees to sign up for less, so that they can exceed what they sign up for. And second, it encourages people to refuse work that they didn’t sign up for, regardless of the value of that work. With accountabilities only updated annually, there was little flexibility.

The Self > The Company

The culture of accountability and the culture of politics both encourage employees to think about themselves over the company. In the example of gaining access to data above, if everyone was thinking about what was best for the company, there would have been no contest. But things didn’t work that way.

I admit that I started to fall into this trap as well. When I finally realized my hard work was not paying off, the quality of my work decreased, I ‘pushed back’ on requests, delegated, etc. In an experience similar to office space, I surprisingly found myself getting more and more rewards and praise when I did less. I remember the first time I tested this – my boss pulled me into his office. I was glad somebody noticed, but then he said “We’ve really noticed a change in your attitude. And we think it’s great. You are showing real leadership and maturity”. When I started at Microsoft I was surprised by how some people were unwilling to help and work together, even with a strong business case. I knew I had to leave when I saw myself becoming like those people after 5 years at the company.

The Result: Denial

Because employees focus on their careers over the company, they are quick to celebrate wins, but hide and deny losses. As a business analyst, I saw positive data presented, while negative data may not see the light of day. In an effect similar to wall street, employees focus on themselves and the short-term instead of the long-term health of the business.

I was disappointed that they shunned things like the iPhone on campus. Instead, employees would use windows mobile, and then leaders would send out enthusiastic messaging about how a better version was on the way. Guess what? There’s a reason people want to use the iPhone, Google and Firefox – they’re better. The iPhone should be all over campus as motivation. Otherwise, you’re just in denial. Within a week of leaving Microsoft, I was using Firefox, I changed my default search engine to Google, and I bought a Nexus One. All of these products are better, yet while I was at Microsoft I had no idea how far behind we were.

It’s wrong to celebrate ‘wins’ when the rest of the industry is moving forward without you. And any intelligent employee can see right through internal propaganda, or what we called the kool aid. Too many Microsoft employees do not believe in their own company, but they continue to work there for the paycheck, benefits, and security. So they focus on the good, and ignore the bad. Ironically, Microsoft specifically hires employees who are self-critical, but then turns a blind eye to its own weaknesses and failures.


Closing Thoughts

I do think the article’s author was overly negative. For example, I disagree with these statements:

“Its image has never recovered from the antitrust prosecution of the 1990s.”
“Despite billions in investment, its Xbox line is still at best an equal contender in the game console business.”

Microsoft’s image has absolutely improved. In fact, I think the success of the Xbox has improved the image the most. When I started at Microsoft in 2005, I was actually a little embarrassed – Microsoft was not a “cool” place for someone my age to work. But as the Xbox gained in popularity, I felt more and more proud to work there. Windows 7 is also outstanding. The company has moved forward.

What’s clear is that there is a cultural issue at Microsoft that needs to be fixed. The culture of accountability needs to be repaired, failures need to be out in the open, and great work needs to be rewarded more than anything else. Most important, employees need to think about what’s best for the company again. At the very least, it’s time to start talking about a problem that impacts every employee every day. I hope I’m not burning any bridges with this post, but I feel the need to speak up for the friends and colleagues I left behind, and for a company that I still believe in. I hope the leadership of Microsoft takes this feedback very seriously, but I have a feeling they will deny it.

Update: Microsoft has posted a response to the NYTimes article, completely denying the points of criticism.

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4 Responses to Why Microsoft is in Denial

  1. Some Guy says:

    ” Windows 7 is also outstanding.”

    Heh. Talk about denial.

  2. Code Monkey says:

    Eh?

    People who only work for their own benefit are just doing to Microsoft what Microsoft does to society.

    That goes for all the giant ruthless companies and governments.

  3. Rob says:

    This is spot on and what’s really telling is the two other comments that deny what you are saying.

    Yes people you need to be self critical. MSFT isn’t. I worked there for 8.5 years and the number of lost opportunities were staggering. Sitting in one stupid meeting after another, endless data gathering, moronic responses, no action, etc are all part of why the company has lost its way.

    No one can legitimately deny this. Yes Win 7 is great. Thanks to an annomoly named Steve Sinofsky.

    But besides Win 7 and maybe Server 2008 there’s really nothing to brag about. MSN still loses tons of money after 15 years. Search is lost. Mobile, gone, public facing programs are losers and don’t connect with the public. Remember Soapbox? Right no one else does either.

  4. Tejas says:

    Hey Aaron,

    Very well written. I completely agree with all the points made, especially the one about data and denial. You are 100% spot on. It is great company to work for without doubt but still has lot of “opportunities” 🙂

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