Money Talks, Talent Walks

I’ve been gone from Microsoft for about 15 months, and over that time I’ve talked to various people who still work there. Some wonder how a particular executive can run so much talent out of the company, and yet continue to be empowered in “our culture” Others, that the company has become inefficient, confused and bureaucratic. And some, that they are on a treadmill and being burned out.

What I’m about to write was knowable to me while I worked there, but I didn’t want to know it. Indeed, if your goal is to go to work every day and try to be effective and make a difference, it’s critical that you do not know it. Being paid to not know it helps.

These things are not accidents. They are not the result of management asleep at the wheel. They are by design.

Part of Satya’s strategy is to not need to build anything substantive. And by substantive, I mean Windows, Office, Exchange, SQL, Visual Studio, .NET, Xbox, Hotmail, OneDrive, Bing etc. Anyone who worked on those things knows that the company now wouldn’t have a clue what leaders to empower and how staff and drive such projects forward now. It isn’t possible to build such things at Microsoft now.

Nor is required. Or desired. Microsoft sells Office, Windows, SQL, hosted Exchange and Sharepoint to the largest companies in the world, and talks a lot about the cloud. Looking at the headcount and where they are allocated, one might conclude that the long term product pipeline is, well, thin.

This is not necessarily a bad thing. A person critical of Balmer’s leadership might conclude that he wasted many 10s of billions of dollars on product pipelines, like Windows Phone, that were never successful. And that’s with the blessing that Jerry Yang gave us by making the worst business decision in the history of business.

It’s not like Microsoft’s customers expect, ask for, or want innovation from the company. They want the things they are required to buy and use to work correctly.

Satya’s Microsoft is selling, servicing, and supporting products that were built decades ago, have huge innate value, and are extremely difficult to replace. Also, talking about the cloud. And Xbox.

Satya is a brilliant leader and CEO. He observed, correctly, that people were bored with hating “Microsoft”, but it had become a habit. He figured out that both Balmer and the old Microsoft culture, while effective at building things that lasted 25 years and changed the world, was a lightening rod for this animosity. And he saw the Woke Supertrend coming. He rebranded Microsoft as  King of Woke Tech companies – no easy task. And he reformed the heavy handed sales org.

A side effect of this is that folks who built things that lasted 25 years and changed the world found themselves in mandatory as a condition of continued employment diversity training, where they learned that they were the root of all evil in the world. They did not learn much about software at these sessions.

The exodus of talent from the company has been going on for a long time. The local area (Bellevue), has for a decade tried to capture these folks in satellite offices, but this trend is accelerating at scale. Significant amounts of office space, and real development is moving to Bellevue by most of the important players. And the startup scene here is real. Just as Microsoft did with the cancellation of Live Mesh, they are once again seeding the industry with talent. This is yet another altruistic gesture from our culture. In my observation, many folks land and do pretty well post Microsoft.

Another supertrend driven by Satya and Amy is the change from a fiscally conservative company, to an ordinary, indebted company that makes shareholders rich by transferring retained earnings, current income and future income to current shareholders, just like every single other company in the world. The primary mechanism, once the balance sheet has been depleted, is long term debt that is used to buyback shares. The balance sheet of the company looks very different than it did 10 years ago.

There’s nothing wrong with this, of course. Indeed, the shareholders and happy.

Money talks.

The bad (old) culture had good and bad qualities. On the good side, we built things that lasted 25 years and changed the world. On the bad side, there was a scary, arbitrary ruthlessness to it all that if you found yourself on the wrong side of, was, not good.

Money talked then too.

My experience with the new culture was that it could be just as ruthless, but not in an American street-fighter way. It’s a superficially caring, sophisticated, almost British ruling class culture. It’s not so good at building things that last 25 years and change the world, and if you find yourself on the wrong side of it, well, that can be not good. And it’s surprisingly easy to do, just by trying to build things that work.

The company is a now a conveyor belt of sales, service, security, support, money and keeping the online stuff running. Much daily work consists of a seemingly endless series of important, difficult but boring tasks, with 3 people asking for status for every one trying to fix things.

Microsoft supplies the platforms that run the world. This stuff has to work. Many people go to work every day and keep this stuff working. It’s a good job, and it’s honest work.

But it’s different. The company that for long fearing becoming “IBM”, is now resembles Gerstner’s IBM and Welsh’s General Electric with a little Sun Microsystems and Oracle thrown in.

BobMu got the last laugh, it seems.

Mike.

Everything in this post is publicly available information or sheer conjecture.

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