Sunday, May 14, 2006

Microsoft Investors, Partners, and Big Upcoming Changes

Some fine, good-looking person wrote:

Come on something new so we don't have to keep beating this dead horse :P

Okay, then, even on such a beautiful day as today I can take time for a post-break so that we can start refreshed. I'll do this by me, well, cribbing a whole lot of comments together into something delightfully repackaged. So the word "new" might be inappropriate for you dedicated comment hounds (you know, all thirty of you).

First of all, that Bloomberg article one of the commenters noted as pretty interesting was even carried in Saturday's Seattle P-I. The article: Microsoft Investors Urge Ballmer to Use Cash on $60 Bln Buyback. I agree with the commenter, it has some really choice moments in there. My picks:

Analysts worry that Ballmer is trying to build a Google within Microsoft. Investors are concerned that they may never see the payoff. The falling stock price is hurting Microsoft's ability to attract and retain employees, Rosenberg said.


Microsoft needs to show it is acting to boost the stock and appease shareholders, said Heather Bellini at UBS AG in New York, who is ranked the No. 2 software analyst by Institutional Investor magazine.

``Previously, the problem was apathy on the stock,'' she said. ``Now the apathy has been replaced with anger.''

All I can envision in the last part is a Yoda-voice reflecting, "Apathy leads to anger, angers leads to hate, and hate leads to mass sell-offs and firings..." It has amazed me to no end, though, how incredibly long it's taken for investors and shareholders to start saying "enough is enough" and start demanding reasonable leadership and reasonable results. It's as almost as if our executive leadership has, uh, wanted to keep the stock price down... Which leads to a comment that gets to the best conspiracy I've heard in a long time (even better than Mini-Microsoft actually doing Ballmer's will in prepping Microsofties for those mass firings):

But look, once the stock was sitting dangerously long close to $28 zone, this stupid mishap with forgetting to warn the Street about $2.4B investment lowering the planned profits happened. Every one company issues the warning up front in such situation, every single one, it's 101.

Does anyone really believe that the company head accountant along with CEO both didn't know what happens to the stock when the company issues unexpectedly low guidance for next quarter? Didn't they have any classes on about how stock market works while doing their MBA's? Didn't they at least, for Buddha's sake, nor any of their lieutenants at least watch Cramer's Mad Money on CNBC ever?

I just don't believe this stock price 'accident' was an accident, there are reasons for stock being stagnant for years now. There are ways of keeping profits low, spending $500M on marketing here, putting glass windows with Windows logo engraved into offices in entire building there, distributing the beatiful , colourful and expensive flyers on diversity subject to every single employee (yeah, at the same time we have very aggresive cost efficacy program going on). All this wasteful spending might well pay off - as long as the stock price is stagnant, the company earns huge savings on the expiring stock options.

(Assume a ponderous Arsenio Hall pose) "Hmmmmmm." Well, in a way, it's strangely comforting for me to think we're being led by a clutch of super-genius stock villains than a confederacy of fiscal dunces.

That whole SPSA program brought forth an interesting dialog. A Partner-esque poster provided details and justification of the program. That did not elicit gushes of hugs and rainbows from the front-line. Some snippets:

The SPSA goals set three years ago had NOTHING to do with Vista. The goals were focused on 3 things:

1) Increased Customer Satisfaction with Microsoft Products

2) Increased adoption of the Developer Platform

3) Increased adoption of Office 11

We absolutely met/exceeded all of our goals set in these areas. Our customer satisfaction goals have been met, and in fact, we have exceeded our expectations by a wide margin. The .NET developer platform, including the recent Whidbey updates have been well received by our customers. Office 11 has definitely met its targets.


The sad truth that you whining underachievers have to accept is that we were given a compensation package tied to aggressive and important goals. We worked very hard for three years to meet the performance goals tied to that package. We blew away the targets and now we DESERVE to be paid what was promised to us. I know it sucks to hear this, but you need to learn to deal with reality here. This was the deal that we accepted and it would be grossly unfair, and frankly would be illegal, for Microsoft or the Compensation comittee to all of a sudden just change the rules and shaft us.

Even MSDecade drove off the road momentarily:

Remember when I said I chose this nickname because I expected to be at MS for a decade? This post single-handedly changed my mind. I'm going to send out my resume.

Along the lines of conversation comes in this comment that rings with a good dose of cold-water reality:

I'm a long time lurker but avid reader of this blog. I'm a L68 partner (GM) at Microsoft - I thought this was one of the better posts and I specially enjoyed the spirited comments (many insightful, some negative, few balanced) here.


Politics in organization - again a GROUND REALITY. Just as we go into the marketplace we do whatever we take to fight and win, we as individuals do the same to rise in organizations. Some of us are successful and some of us are not. This is human nature and again reality. Did I earn my GM position fair and square? - yes. Did I have to play some politics to get there? - yes. Did I have to bury a few bodies to get there? - yes. Seems to me you want somebody like me to lead the battle (whatever it may be) versus somebody who is not willing to play 'games'.


RE: do we have the right folks in place - here I say no! We have moribund and lethargic leadership at the partner level and above. Specially in the senior leadership. Most of the folks have tasted failure and are too schooled in the MS model. Over the past year or two, I have been observing the lack of accountability and true leadership in my group and it saddens me. There are few risk takers left and most partners are worried about territorial ambitions rather than breakout performance. Yes they earned their positions but these are the wrong people for the company's future as they are too grounded in the past. And I include myself in this sentiment. We have chased away leaders who bring the new thinking required to the company. Yes I can resign but I worry about the next level too - they are not seasoned enough and we haven't provide enough opportunities to season or grow these leaders.

Bottom line, we are at a turning point in this company.


And some people commented, "Hey, lay off the Partners, they are the ones responsible for where Microsoft is today based on all their past accomplishments." Oy and vey, what have you done for me lately? Or, more specifically:

Our partners are for the most part, out of touch with the reality of today's software landscape. Most have NEVER launched an online service, never pushed bits to servers around the world, never configured a load balancer, performed calculations for a denial of service monitor, never written log analyzers needed to diagnose problems on live services. And just in case some of you say you have done this, let me quickly call BS... What I mean by doing is actually doing, nat "watching over". In your day, you ran kernel debuggers, wrote code, debugged problems, coded new features, etc. Going through this experience first hand taught you many skills. One skill you learned is how to estimate complexity, how to break a project down into bite sized pieces, etc. You learned this on a disconnected and isolated pc centric environment.


I guess my fear is that we are waging the wrong war with the wrong enemy, and somehow we have this beleif that our esteemed partners, csa's, and cto's can lead the way. I think we are fighting a war with the wrong leaders in place, and are fighting in a space that we dont have the skills to succeed in. It will be a war over several years that will defocus us and cause us to ignore our current set of customers. Windows, Office, our Enterprise server business. The places where we actually make money will suffer as we focus on this new space and start building our skills there.

Shifting gears: is something big on-tap for May 18th? I've been delighted by some insider rumors so far, and I have great hopes:

Ballmer announced today at Silicon Valley Campus that the company will announce substantial changes to the employee review system on May 18.

...also, when asked to review himself, Ballmer gave himself a 3.5

Substantial sounds like a step in the right direction and opens up the system to major overhaul according to employee feedback and vision. Will we still have stack ranks? Still need to fit a curve? Still need to temper our feedback to one another so that people don't go over-reacting to positive-feedback and have the nerve to think that translates to a 4.0? People followed up saying have faith and that LisaB not only listened, she acted. So come the 18th I'm bringing in a bag of popcorn to pop and sit down and read whatever comes our way with great antici... ... ...pation.

Lastly: the Al Billings Vs. Dare spat overflowed into here for a bit. Well, first Al shared some of his going away from Microsoft thoughts:

Microsoft takes too long to respond to the current thoughtspace and I think that we are mired in levels and levels of requirements and dead wood. In my exit survey, I gave my feedback that I was personally disappointed that not a single person has apparently been fired for the screw-up with Windows Vista. Sure, a couple of VPs are quietly being put out to pasture (I guess...or are they?) but no one has been made accountable for it.

In amidst the commenting here and there in the Al / Dare spat, Joshua Allen had a nice perspective, including an interesting gem:

As my boss remarked at our team meeting this morning, "the people who are afraid of transparency are the people who have something to hide". Let people say what they're going to say, and let the readers judge for themselves.

Amen to that.

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