4 ms·

I spent several years at MS, 3 as an FTE, and Microsoft is definitely in decline, partly due to stack ranking, partly due to general cultural shifts from being

I spent several years at MS, 3 as an FTE, and Microsoft is definitely in decline, partly due to stack ranking, partly due to general cultural shifts from being a big, lumbering company. One of the things you have to realize is that a lot of the dynamics of the company over the last decade have caused a mind boggling amount of talent to simply evaporate out of the company. Many of the "fuck you I'm fully vested" folks who were around in the earlier days of MS either checked out or peaced out whenever they hit their personal bullshit thresholds. More recent hires have generally found that other companies are often more exciting, more rewarding, and more lucrative to work at. MS today tends to punish caring about things (not always, but more often than not). If you try to make a difference and put forth the effort to make merely sensible changes then you'll spend years struggling against the system and if you're lucky you'll only have moderate success to show for it. And the stack ranking system tends to reward people who are good at gaming the system rather than those who are good at actually delivering anything of substantive value to end users. Naturally, all of this tends to be very discouraging to engineers, especially those with a bit of maturity and experience who see that with their talent and skills they could go elsewhere and not get shit on all the time, work for a company they wouldn't be embarrassed about, and actually get stock options that are worth something. And, since techies tend to value working alongside other techies that they admire and look up to this sort of process tends to be a positive feedback loop. It's simply unimaginable that this loss of talent hasn't had a huge impact on the company.

einhverfr 13y ago
That and the levels system ensures that a lot of people who do care and have the talent have no way to contribute.
dalek_cannes 13y ago
Stack ranking causes employees to compete with each other rather than the company's competitors. It's all downhill from there.
- InclinedPlane 13y ago
  It also encourages people to game the system through various ways. Such as ordinary office politics, of course. Also working on more visible and easily completed projects than tackling tough, more diffuse projects. And especially in spending time on new projects instead of fixing existing stuff. All of this has seriously hurt productivity within the company and the ability of big parts of the company to execute on projects that actually provide serious end-user benefits. The way to get ahead seems to be to work on the easiest and flashiest projects regardless of customer impact.
vladimirralev 13y ago
Microsoft are giving stock options instead of actual stock? That can't be true. Are they looking for stupid employees or what?
- biafra 13y ago
  What is the problem with stock options?
  - Patrick_Devine 13y ago
    Options are great for a company where there is a lot of growth (ie. a startup). Options are horrible for a company which has no growth (ie. a fortune 500). Options give you the ability to buy a share at the last strike price set by the board (FMV for a share). If FMV for your startup share is $0.01 and you exercise it for $20, you're walking away with $19.99 in your pocket having spent $0.01. Multiply that by 50,000 and you're almost a millionaire. If you get an option for a share of MSFT at $35, unless the stock price goes up, you're not getting a dime. IF it went up by $20 a share, you'd be doing just as well. That's unlikely, however, given how infrequently the stock moves. If they gave you 5,000 shares instead, you'd be sitting on a (more or less) guaranteed $175,000 _even if the stock price didn't move_ instead of absolutely nothing.
    - rmserror 13y ago
      The number of shares in an option grant is not necessarily the number of shares in a stock grant. You're assuming the choice is "5,000 options [for a single share]" or "5,000 shares." That's ridiculous. Clearly the shares are worth strictly more. But that's (typically) not the comparison.
    - biafra 13y ago
      Thank you for the explanation . I assumed options always have a symbolic price.
- marshray 13y ago
  The current practice which I have observed is for stock grants which vest over a multi-year schedule.
reeses 13y ago
I'm not sure when you were at MSFT, but my time there was in the mid-90s. "It's simply unimaginable that this loss of talent hasn't had a huge impact on the company." I think it would have done if the rank-and-yank/up-or-out happened when we were a 6,000-ish person company. They had just opened RedWest while I was there and were working on the new buildings across from the main campus. I think they were talking about the Issaquah campus right around the time I left as well. It was clear that the company was growing and things were changing. There was even talk about not granting stock to new hires anymore, which has obviously been reversed. However, this was heresy at the time. (Mind you, most of us were thinking we were past the guaranteed "millionaire" stage and thinking that a stock grant would cash out for a down payment on a nice house.) Now it's most definitely a "big" company, and you don't need that many people who would earn 1s in their reviews and get promoted every year. A company like that needs a lot of consistent contributors. If you let some good people fall through the cracks, even if it's 10%, the company can continue for years.
- InclinedPlane 13y ago
  > If you let some good people fall through the cracks, even if it's 10%, the company can continue for years. Continue, sure. Microsoft isn't going to go away for many years, no matter how much they fuck up. They have too many established customers that will find it hard to switch away from them and they have too much cash on hand. Nevertheless, the degree to which Microsoft will be relevant to the industry at large and their revenue levels in the time frame of a decade to two decades from now are currently open questions. And not by a small amount either, by orders of magnitude. And the difference between being able to execute on projects that will keep the company relevant and highly profitable and not being able to do so will largely come down to the collective capabilities, passions, experience, and talent of the folks who are still at the company. And that pool of skills and capabilities has been substantially decapitated bit by bit over the past several years.
walshemj 13y ago
Its all about gaming the system if you have these systems I had a college who was going for a promotion to senior software engineer in British telecom. Every 18 months or so there was a round of promotions there would be maybe 18 - 25 roles available for the whole of the Systems engineering division (around 50k FTE) But as my boss wryly remarked "he has not done any real work for 6 months) I also saw a college going for pm (first proper management role) expend a million pounds and 15 man years of developer resource pointlessly redeveloping a system in oracle as managing a >1 million pound project was a tick box for promotion)
T-hawk 13y ago
It's simply unimaginable that this loss of talent hasn't had a huge impact on the company. It has. Absolutely. Microsoft used to achieve domination in every area they entered. Console DOS, graphical Windows, word processing, spreadsheet, entry-level desktop programming with Basic then VB and VBA, internet browser, corporate email with Exchange. Nearly every product blew up into owning its market. In the 2000s, that dominance faded to merely being a strong competitor. Server OS, database, video games with Xbox, development with .NET, and all the enterprisey stuff like Active Directory and SharePoint. They all became viable and performing product lines, but hardly leaders, with market shares just about on par with the competition. And in the 2010s, every me-too product by Microsoft is a fringe marginal player. Bing, Zune, Surface, Azure, Windows Phone... using any of those pretty much gets you laughed at. What happened at Microsoft that they can't take over such industries at will any more? The massive loss of talent and adherence to bureaucracy over excellence has to be part of it.

einhverfr 13y ago

That and the levels system ensures that a lot of people who do care and have the talent have no way to contribute.

dalek_cannes 13y ago

Stack ranking causes employees to compete with each other rather than the company's competitors. It's all downhill from there.

InclinedPlane 13y ago
It also encourages people to game the system through various ways. Such as ordinary office politics, of course. Also working on more visible and easily completed projects than tackling tough, more diffuse projects. And especially in spending time on new projects instead of fixing existing stuff. All of this has seriously hurt productivity within the company and the ability of big parts of the company to execute on projects that actually provide serious end-user benefits. The way to get ahead seems to be to work on the easiest and flashiest projects regardless of customer impact.

vladimirralev 13y ago

Microsoft are giving stock options instead of actual stock? That can't be true. Are they looking for stupid employees or what?

biafra 13y ago
What is the problem with stock options?
- Patrick_Devine 13y ago
  Options are great for a company where there is a lot of growth (ie. a startup). Options are horrible for a company which has no growth (ie. a fortune 500). Options give you the ability to buy a share at the last strike price set by the board (FMV for a share). If FMV for your startup share is $0.01 and you exercise it for $20, you're walking away with $19.99 in your pocket having spent $0.01. Multiply that by 50,000 and you're almost a millionaire. If you get an option for a share of MSFT at $35, unless the stock price goes up, you're not getting a dime. IF it went up by $20 a share, you'd be doing just as well. That's unlikely, however, given how infrequently the stock moves. If they gave you 5,000 shares instead, you'd be sitting on a (more or less) guaranteed $175,000 _even if the stock price didn't move_ instead of absolutely nothing.
  - rmserror 13y ago
    The number of shares in an option grant is not necessarily the number of shares in a stock grant. You're assuming the choice is "5,000 options [for a single share]" or "5,000 shares." That's ridiculous. Clearly the shares are worth strictly more. But that's (typically) not the comparison.
  - biafra 13y ago
    Thank you for the explanation . I assumed options always have a symbolic price.
marshray 13y ago
The current practice which I have observed is for stock grants which vest over a multi-year schedule.

reeses 13y ago

I'm not sure when you were at MSFT, but my time there was in the mid-90s. "It's simply unimaginable that this loss of talent hasn't had a huge impact on the company." I think it would have done if the rank-and-yank/up-or-out happened when we were a 6,000-ish person company. They had just opened RedWest while I was there and were working on the new buildings across from the main campus. I think they were talking about the Issaquah campus right around the time I left as well. It was clear that the company was growing and things were changing. There was even talk about not granting stock to new hires anymore, which has obviously been reversed. However, this was heresy at the time. (Mind you, most of us were thinking we were past the guaranteed "millionaire" stage and thinking that a stock grant would cash out for a down payment on a nice house.) Now it's most definitely a "big" company, and you don't need that many people who would earn 1s in their reviews and get promoted every year. A company like that needs a lot of consistent contributors. If you let some good people fall through the cracks, even if it's 10%, the company can continue for years.

InclinedPlane 13y ago
> If you let some good people fall through the cracks, even if it's 10%, the company can continue for years. Continue, sure. Microsoft isn't going to go away for many years, no matter how much they fuck up. They have too many established customers that will find it hard to switch away from them and they have too much cash on hand. Nevertheless, the degree to which Microsoft will be relevant to the industry at large and their revenue levels in the time frame of a decade to two decades from now are currently open questions. And not by a small amount either, by orders of magnitude. And the difference between being able to execute on projects that will keep the company relevant and highly profitable and not being able to do so will largely come down to the collective capabilities, passions, experience, and talent of the folks who are still at the company. And that pool of skills and capabilities has been substantially decapitated bit by bit over the past several years.

walshemj 13y ago

Its all about gaming the system if you have these systems I had a college who was going for a promotion to senior software engineer in British telecom. Every 18 months or so there was a round of promotions there would be maybe 18 - 25 roles available for the whole of the Systems engineering division (around 50k FTE) But as my boss wryly remarked "he has not done any real work for 6 months) I also saw a college going for pm (first proper management role) expend a million pounds and 15 man years of developer resource pointlessly redeveloping a system in oracle as managing a >1 million pound project was a tick box for promotion)

T-hawk 13y ago

It's simply unimaginable that this loss of talent hasn't had a huge impact on the company. It has. Absolutely. Microsoft used to achieve domination in every area they entered. Console DOS, graphical Windows, word processing, spreadsheet, entry-level desktop programming with Basic then VB and VBA, internet browser, corporate email with Exchange. Nearly every product blew up into owning its market. In the 2000s, that dominance faded to merely being a strong competitor. Server OS, database, video games with Xbox, development with .NET, and all the enterprisey stuff like Active Directory and SharePoint. They all became viable and performing product lines, but hardly leaders, with market shares just about on par with the competition. And in the 2010s, every me-too product by Microsoft is a fringe marginal player. Bing, Zune, Surface, Azure, Windows Phone... using any of those pretty much gets you laughed at. What happened at Microsoft that they can't take over such industries at will any more? The massive loss of talent and adherence to bureaucracy over excellence has to be part of it.