Dear New Microsoft Chief Executive:
Recently, I spoke with 300 smart and passionate Microsoft (MSFT) employees. Are you as open to change as they are? If yes, read on. I was invited to your company because of my book, The Year Without Pants, which tells my story as a former Microsoft manager who worked for a year at the eighth most popular website in the U.S.: WordPress.com, which is more popular than any Microsoft website, including Bing. These two companies are very different, yet one is on the rise and one is not. As a unique traveler between both cultures, here’s my advice:
My most shocking suggestion is to treat your employees like adults. At WordPress.com, all employees choose their own hours, have high autonomy, and work from anywhere in the world they wish. This is in stark contrast to Microsoft’s comparatively parental policies, where permissions are required to do anything interesting at all. If Microsoft is a meritocracy, why aren’t employees granted more freedoms and judged purely on their results? The company’s gauntlet of committees, bureaucracies, and hierarchies infantilize your brightest minds and make great work, or even good work, impossible. The number of approvals required even to try a new idea tells everything about how conservative, and scared, a floundering organization Microsoft has become. At WordPress.com, my team chose to use Skype, a Microsoft product, far more than e-mail. Would this even be attempted anywhere at your company, even on the Skype team?
It’s true few corporations of Microsoft’s size and age treat their brightest employees as adults, but that shows in their declining market share and relevance. If you want a different fate, a different approach is required. Your management ranks suffer from the common hubris of middle-aged companies: the blind faith that executive and middle management is where the most valuable work is done. But your brightest employees know this isn’t true. They see the endless meetings and political deadlocks as a prison guarding only one thing: the status quo. Your best staff knows the culture of management at your organization is a minefield in their way, and the companies that have decimated Microsoft’s market share know it, too. Hopefully the board of directors was wise enough to choose you for your insight into how Microsoft’s management culture needs to change, or at least the cultures of your most important product teams.
An approach you should borrow from WordPress.com is to hire leaders who are masters at running experiments and eliminate ones who fear them. For too long, Microsoft has promoted managers whose strength is optimization and maintenance. The fantastic revenues from the 1990s era product lines of Office and Windows continue but only lead the company deeper into an innovator’s dilemma. Too many of the most powerful people at Microsoft have both feet in the past, taking false pride in the machinations of extracting its sizable, but declining, value. In 1999, Microsoft’s leaders had the entire Web open to them but abandoned it all, preferring the certainty of its legacy businesses. Despite all its rhetoric, Microsoft has always been a smart but conservative company, awakening only as a last resort. Does it still know how to wake up?
While WordPress itself is no youngster at the age of 10, the leaders at WordPress.com push experimentation, rewarding bravery more than complacency. Every week my team launched new ideas, attacked old and new problems, and even rethought how our organization itself was designed. I did this without executive review meetings or strategic briefing PowerPoint decks. It was simply assumed my primary job as a manager was to lead and protect these experiments, knowing that even if they failed, our thinking would stay current and we’d continue to learn.
When I was at Microsoft in the 1990s, executives commonly said, “make our current success obsolete with new ideas before our competitors do,” and they sometimes embodied that in bold decisions. The phrase is still uttered today in the hallways of your Redmond offices. But look around your company. Where is this not just a platitude?
One critical function to study is Microsoft’s flawed, cutthroat performance review system that many employees despise. Why has it never changed? When was the last time a division was empowered to run substantial experiments in its design? I can guess at the answer: never. Too many people defend it for the sole reason that it’s the only system they’ve ever known. Or they’re not trusted to manage, much less design, an experiment for an alternative.
The same sad logic is true for other pivotal questions: Is there a better way to plan new products? Organize product teams? Run meetings? Or hire employees? There are dozens of these fundamental questions that no one has been allowed to explore seriously in years. “That’s the way we’ve always done it” is a motto heard only on ships adrift at sea or sinking to the bottom.
My boldest and best recommendation is this: Pick one product team and give its leader carte blanche in every decision for a year. See what answers they come up with to these questions, and let the rest of the company learn from their experiments. Many of Microsoft’s leaders will write long e-mails explaining why this is a mistake and can’t work. Ignore them. Staff this team with your most ambitious, talented, and collaborative employees, who will flock to the project, thrilled finally to have the opportunity to achieve the great things many don’t believe the company is capable of anymore.
The greatest leadership act executives can perform is to put their reputation on the line behind an unproven idea. To force change when needed, paving safe runways for their staff to let bold ideas fly. The word innovation is in most speeches your executives give, but bold speeches require no risk at all; it’s action that matters.
As my last advice, consider these questions of everyone who works for and with you:
What was the last big idea you bet your reputation on?
What was the last experiment each person who reports to you ran?
What have you learned from these successes and failures and how have you taught this to the rest of the company?
If you don’t hear great answers, find new leaders. They are serving your past, not your future.
Scott Berkun (@berkun)