Sunday, November 19, 2006

A Peanut Butter Manifesto for Microsoft to Chew On

The big news of this weekend in the blog echo-chamber is about thinly spread peanut-butter: Techmeme The 'Peanut Butter Manifesto' (Wall Street Journal). In case you don't know, it's an internal Yahoo! memo (the kind you hope gets leaked to build external support - and perhaps your own career) from Brad Garlinghouse, a senior VP at Yahoo!, that calls for radical cuts and restructuring within Yahoo!. As I read the memo, I switched the context a bit, imagining that this was written by the kind of butt-kicking maverick I don't think Microsoft has ever seen regarding Microsoft and what we need to do to fix it up. Have a read yourself.

What do you think?

It's interesting to read this in light of a couple of articles in today's Seattle Times about Microsoft and Vista:

First, I think of this time for Yahoo! versus how it was looking for Microsoft over a year ago: both responding to negative wake-up calls in the press - Business Week and Forbes articles for Microsoft in particular. In my opinion, Microsoft tried to Jedi Mind Trick its way out of the situation and eventually backed into a few mea-culpas and passively moved-on some people who may or may not have been part of the problem. Garlinghouse is take a far more brutal, open, honest assessment of the way things are. Snippet:

I believe we must embrace our problems and challenges and that we must take decisive action. We have the opportunity - in fact the invitation - to send a strong, clear and powerful message to our shareholders and Wall Street, to our advertisers and our partners, to our employees (both current and future), and to our users. They are all begging for a signal that we recognize and understand our problems, and that we are charting a course for fundamental change, Our current course and speed simply will not get us there. Short-term band-aids will not get us there.

Our response under similar challenges? The Pipeline of Plenty Dog and Pony Show with lots and lots of sunshine and smoke.

Garlinghouse puts special focus on bureaucracy:

We now operate in an organizational structure -- admittedly created with the best of intentions -- that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.

I never heard us admit we had bureaucracy problems. Sinofsky a while back put up a blog post about bureaucracy (wave of the hand, "This is not the problem you're looking for."). But now as parts of Microsoft reorganize, layers of management are going away to remove problem-making decision makers that paralyzed us more than enabled fast, decisive progress. So, now that something has been fixed, at least maybe we can admit we had a problem? The most we get is from the above Seattle Times article:

[Kevin Johnson] said Sinofsky and other new Windows leaders are changing the structure of the group to eliminate layers of management.

"Every time you have a layer of management, there's another opportunity for someone to layer in their strategy, or set their direction," Johnson said.

Which - I guess we're left to deduce on our own - is bad when you have awful leadership at those layers and their strategy and direction is myopic, restrictive, and destructive to the product. What happened to them? Where did they go?

Back to the Yahoo! memo. As for employees and passion and deadwood:

We have lost our passion to win. Far too many employees are "phoning" it in, lacking the passion and commitment to be a part of the solution. We sit idly by while -- at all levels -- employees are enabled to "hang around". Where is the accountability? Moreover, our compensation systems don't align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren't adequately recognized for their efforts.

While we might poke our low-performers with low compensation and mediocre reviews, we're just not fired up about getting them back on track or out of the company. As for accountability:

a) Existing business owners must be held accountable for where we find ourselves today -- heads must roll,

Rolling heads! Yes! The only rolling our problem makers ever had to deal with is rolling around in their wads of stock awards and SPSA payouts. Eventually, some of them managed to be rolled out the door. Quietly. But no one ever has been held directly accountable within the company. Perhaps Yahoo! can show us how this is done.

As for Yahoo!'s performance review system (which I know nothing about), it sounds like they want to move towards something more like Microsoft, where we endeavor for differentiated awards so that our top contributors get maximum rewards. I remember reading rumors that Yahoo! was moving to a stack-ranked based system. Let us know how that turns out for you.

And the big bit of news that resonates the most with me:

c) We must reduce our headcount by 15-20%.

Simplify. Refocus. Restructure. De-redundantification. Empower and reward passionate employees. Fire redundant non-performing deadwood and leaders to this current malaise. Sounds like a good recipe to me.

Administrivia: I'm giving a hard look at switching this blog over to the new Blogger infrastructure soon. Think good thoughts.

Updated: added a call-out to a context switch. Again: fixed strange word order that shot out of my finger tips.

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