More on Microsoft’s organizational clusterfuck and their struggle to innovate

Wed, Feb 10, 2010


Last week, former Microsoft VP Dick Brass penned a fascinating op-ed for the New York Times where he described why a company like Microsoft, despite having a plethora of extremely smart engineers, has been unable to innovate in proportion to its talent level.

Brass described an organizational structure within Microsoft that actually worked against innovation, with various product groups within the company competing against one another, and sometimes even sabotaging the efforts of rival teams.

Building on that, Joe Wilcox of betanews talked to a number of former Microsoft employees who shed even more light on a corporate infrastructure that has seemingly gotten too big for its own good.

I don’t have figures on how many middle managers Microsoft now employs. But various former, and even some current, employees say that their number of “reports” — meaning people they report to — has increased by five to seven managers above them during 2000. Typically that works out to double or more the layers of middle management over the decade.

“When I started at MSFT in 1996, there were six people between me and [Microsoft cofounder] Bill Gates,” Boris said. “In 2009, there were 13 people between me and [Microsoft CEO] Steve Ballmer.” Fred said, “the number of managers between me and the CEO went from six to 10,” during the last decade. Another long-time Microsoftie, whom I’ll call Barry, saw his reports go from six to 12.

One of the more fascinating tidbits from Wilcox’s post is that Microsoft’s system of employee evaluations actually works to stifle innovation in the name of career advancement.

In fact, oftentimes the incentive structure encouraged individual contributors not to do the right thing, but just to do what they committed to in their review the year prior. In other words, if you committed to include Feature A in Windows, and halfway through the year you realized that was a bad thing for Windows and Microsoft customers, the incentive structure actively discouraged you from trying to kill the feature, because then you wouldn’t have achieved your commitments.


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