I’ve worked at a couple of large companies – IBM & Microsoft. Dealing with poor performers has and always will be a challenge for new as well as experienced managers. Did you know that management expends more effort protecting and advocating for poor performers than it does trying to get a simple salary increase, bonus, or modest promotion for our most outstanding performers? Sad, but true – and if you think this is not true please ship me an ounce of whatever it is you’re smoking – I obviously need it more than you do.
Every manager and every company has a different way of dealing with performance issues. The most popular method is to simply pretend it’s not happening – you know, the denial thing. I mean after all this method is successfully employed in our daily lives with alcoholism, drug abuse, and a host of other behavioral problems, so why not apply this practice to poor performers in the workplace?
At IBM, in the early days, the method was promotion – yes – this is no typo – promotion. If someone was not doing a good job you simply promoted them to get them out of the way. This was a great system – and counter intuitively quite ingenious. Before long, some of the most inept individuals in the company quickly rose to the top, and ultimately it became quite a liability to your career if you held too high a title. In the late 80’s early 90’s an IBM VP wouldn’t have a chance in hell of getting a job outside the company.
Microsoft, during the Ballmer era, had a different method of dealing with performance issues that I observed. There was what I would call the “process” method and then there was the “Steve” method. By the way, this was just my observation and I don’t know if this was documented anywhere but I did observe it on enough occasions for it to make an impression on me.
The “process” method was based on former GE CEO Jack Welch’s book Straight from the Gut. I think Steve really liked this book and admired Jack. Jack was like the quintessential CEO. He was a really disciplined, process oriented guy, who laid out in tremendous detail how GE should be run, at every level, and executed flawlessly in my opinion (good thing he left prior to the big 2002/03 recession and 2008/09 great depression II). Jack imbued this mentality throughout the entire company and created a corporate culture around process-oriented thinking and execution. To me, Steve liked this concept, but unfortunately only one single property from Jack’s book was inherited and Steve applied it to the entire Microsoft culture. This property was – Get rid of the bottom 15%.
Damn right! This is the ticket to dealing with poor performers – you get rid of the bottom 15%. The problem is that this was the ONLY property Steve would carry over from Jack and GE. This is like saying, “I’m going to be a world famous physicist, and Einstein is going to be my model”. The problem is that I have never studied physics, am not good at math, and not very smart – so in lieu of these minor details, the property I choose to inherit from Einstein is simply his funny hair.
So the 15% thing is still commonly used in big business. But Steve has another practice that I’d like to point out – the “Steve” method for dealing with poor performers. I recall a meeting Steve invited me to when he first became CEO. He wanted to get people’s opinions, to listen. I guess it’s “new job” behavior – you put on your best behavior for the first month or so to impress everyone and then ultimately migrate to your natural point of equilibrium – that’s where Steve probably is now, but I think it only took him about two days to get there.
What I noticed at this meeting had nothing to do with what we talked about. In fact, I don’t remember a word of the conversation – I didn’t remember it when I left his office. I’m not sure he even asked my opinion about anything. I did however notice two other things: first, what the hell was he doing in this dinky little office? I mean he’s the CEO of this massive company and he had an office the size of a small utility closet. Second, why did he keep yelling to his admin about how late the VP in the office next to his was? After all, Steve was meeting with me and the fact that this VP was late was irrelevant.
I didn’t make a connection at the time, but a week later the VP was shot (spun as a retirement of course). Later, I noticed something else. Steve moved to another building and shortly thereafter the EVP of Worldwide Sales and Services was shot. He was moved into one of those nondescript fofo jobs that don’t allow you to do any damage and gives you enough time to plan your “retirement”. The sad thing is that if you’re at all astute (and I just mean breathing), you don’t understand the intent of this “opportunity” and everyone around you is just depressed to talk to you. This story played out again to an EVP-level development exec.
As a joke I started to think that if Ballmer wanted to shoot someone he’d just move into the office next to them and execute. I think this was his conscious plan, and I think it’s a good plan – it’s bold and direct, no pussy footing around. When Steve moves into the office next to you, put together your “retirement” plans immediately.
I mentioned this theory to a former high level Microsoft exec, whose name I’d prefer not to mention, (Paul Maritz), who also has a very small office, and he laughed, but then quickly turned to the person in the office next to his and shouted out a warning. This unnamed exec is very bright, but I don’t really know if he believed my theory or just wanted to give me the impression that he came up with the idea first and was demonstrating adroitness in the art.
So what about Steve? Check this out:
October 2009 – Newsweek “The Lost Decade: Why Steve Ballmer is no Bill Gates.”
May 2010 – The Economist “APPLE has overtaken Microsoft to become the world’s largest technology company by market capitalization.”
June 2010 – San Francisco Chronicle “Sorry, Steve. We think it’s getting to be time for you to move on.”
July 2010 – The Economist “Rumours persist that a coup is brewing to oust Steve Ballmer” “…Microsoft is behind… Should the firm fail to catch up fast, Mr. Ballmer will surely be tossed through a window.”
August 2010 – Seattle Post Intelligencer –”Is it time for Microsoft’s Steve Ballmer to go?”
The writing is not just on the wall – I think it’s dripped onto the floor. Steve has somehow gotten himself into the bottom 15%. What does a guy like this do? He can’t wait around for his board to give him the message. Can we really expect all eight board members to move into the office next to him?
I hope to blog again.
P.S. on Steve. I don’t know Steve well. My interactions with him were few, but significant enough that if he saw me today, he would know who I am. Steve’s a brilliant guy, and, as I point out frequently to many people I speak with, managing a company the size of Microsoft is a daunting undertaking that few in the world could handle for a month let alone 20+ years. It is a human impossibility to wrap your brain around a challenge of this magnitude, and I accordingly have a high degree of respect and admiration for anyone in this position regardless of what I may think of them. In my blog I allude to Steve having sat in many offices over the years that have resulted in someone going out the door. There’s a good lesson and moral here: bad things happen to the best and most capable of individuals – even a person like Steve can get munched – it’s like Pac Man.
