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Kurt Eichenwald  (Source:
Stack ranking and the inability to move up to new technologies were Microsoft's largest problems

Vanity Fair's contributing editor Kurt Eichenwald analyzed what he calls Microsoft's "lost decade," where a few bad management decisions led to the company's fall starting in the year 2000. Eichenwald used internal corporate records, interviews and emails between Microsoft executives to dictate his analysis.

From the information Eichenwald reviewed, he found that Microsoft made a couple of huge mistakes that led to its fall in the tech rankings: stack ranking and the inability to move up to new technologies.

After dozens of interviews with employees, Eichenwald discovered that Microsoft had been using a stack ranking management technique that put a lot of pressure on employees. Stack ranking means that each unit has a certain percentage of employees that are identified as top workers, good workers, average workers and poor workers. In other words, if there is a unit of 10 employees, it's understood that two people would be designated the top workers while seven employees would receive good or average reviews and the last one would get a poor review.


"It was always much less about how I could become a better engineer and much more about my need to improve my visibility among other managers," said Ed McCahill, a former Microsoft marketing manager for 16 years.

Microsoft also failed to take on new technological opportunities, such as the e-reader it developed back in 1998. A Microsoft team created the portable e-reader and presented it to Microsoft co-founder Bill Gates, but Gates was not impressed. He said the user interface didn't look enough like Windows. The idea was scrapped, and the team was removed from the reporting line to Gates.

Amazon later introduced the Kindle e-reader in 2007, which turned out to be a hit. Amazon now has an entire line of Kindle e-readers as well as the Kindle Fire tablet, and other companies like Barnes & Noble have released their own tablets as well (NOOK). It wasn't until April of this year that Microsoft embraced e-readers by teaming up with Barnes & Noble to create an e-book subsidiary called Newco.

While Microsoft has seen tremendous success with other releases during the supposed "lost decade" -- such as Windows XP, Windows 7, Xbox 360 and Kinect -- it doesn't seem to be enough to pass competitors like Apple. In fact, the iPhone alone brings in more revenue than all of Microsoft's products combined.

But Microsoft is looking ahead to its upcoming Windows 8 operating system and Windows Phone 8 for a boost. The new Metro user interface is unlike any Microsoft Windows release to date, and has been a topic of debate. Some feel it strays too far from the original Windows theme while others praise the change. The 10.6-inch Surface tablet, which Microsoft announced last month, is also an anticipated addition to the company's family of gadgets.

Source: Vanity Fair

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It's more than stack ratings
By GatoRat on 7/9/2012 7:50:55 PM , Rating: 5
Novell used stack rating when I worked there and it was as big a disaster. One thing it did was allow managers to protect their incompetence by shoving out experienced engineers in favor of fresh graduates. Microsoft has the same problem; I and many people I know who have interacted with Microsoft have been surprised at how many junior programmers they have--they assume that a college degree means knowledge.

My own take is that this is on purpose so a handful of bullies can push everyone else around, implementing the most idiotic ideas without any way to turn them off. (Windows 8 is but one example; why not allow Aero and let the user decide? IE also cut off customization as did Office. Visual Studio epitomizes this arrogance. Our way or the highway is exactly the opposite of what made Microsoft successful in the first place.

In short, Microsoft no longer respects, and in fact has complete contempt for, the customer and especially the development community which helped make it so successful.)

