Wednesday, February 27, 2013

How Microsoft Lost Its Mojo: Steve Ballmer and Corporate America’s Most Spectacular Decline | Business | Vanity Fair

How Microsoft Lost Its Mojo: Steve Ballmer and Corporate America’s Most Spectacular Decline | Business | Vanity Fair

Microsoft’s managers, intentionally or not, pumped up the volume on the viciousness. What emerged—when combined with the bitterness about financial disparities among employees, the slow pace of development, and the power of the Windows and Office divisions to kill innovation—was a toxic stew of internal antagonism and warfare.
“If you don’t play the politics, it’s management by character assassination,” said Turkel.
At the center of the cultural problems was a management system called “stack ranking.” Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system—also referred to as “the performance model,” “the bell curve,” or just “the employee review”—has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor.

The overuse of V-Bi systems in an Iv-B environment can cause stagnation as innovation is stifled, this illustrates the problem when distributions of people are not really random but are treated as such.
“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” said a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

Iv-B employees are highly innovative but also fragile and chaotic, they can easily collapse if the environment doesn't allow them to grow.  This competition can also be destructive and deceptive, people start to drag each other down in a negative sum game where the objective is to lose less than the others. For example half might be aiming to not be on the bottom with a poor grade, to do this they need to manipulate someone else to take the blame for problems.
Supposing Microsoft had managed to hire technology’s top players into a single unit before they made their names elsewhere—Steve Jobs of Apple, Mark Zuckerberg of Facebook, Larry Page of Google, Larry Ellison of Oracle, and Jeff Bezos of Amazon—regardless of performance, under one of the iterations of

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