Microsoft has a long and storied history of leadership in the tech industry, and the company has driven innovation for decades. In recent years, however, Microsoft has fallen behind the times in several key industries; the company’s mobile position has deteriorated and left it with a low single-digit market share, and Microsoft won’t launch Windows RT, its response to Apple’s three-year-old iPad, until later this year. In a recent piece titled “Microsoft’s Lost Decade,” Vanity Fair contributor Kurt Eichenwald analyzes the company’s “astonishingly foolish management decisions” and picks apart moves made during the Steve Ballmer era.
Eichenwald uses details learned from dozens of interviews with current and former Microsoft executives as well as confidential corporate records to piece together the long string of decisions that has lost Microsoft its leadership position in several key markets. As Vanity Fair points out, “a single Apple product—the iPhone—generates more revenue than all of Microsoft’s wares combined.”
“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,” Eichenwald wrote. Stack ranking refers to Microsoft’s process of requiring managers to identify a certain number of top, average and poor performers among their subordinates.
“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” a former software developer told Eichenwald. “It leads to employees focusing on competing with each other rather than competing with other companies.”
The piece goes on to detail the pitfalls of the corporate culture at Microsoft, the decisions that led to a number of failed products, and the bureaucracy that cost Microsoft the mobile market as well as its lead in several other spaces.
“They used to point their finger at IBM and laugh,” former Microsoft manager Bill Hill said to Eichenwald. “Now they’ve become the thing they despised.”