"Stack Management"
Eichenwald’s conversations reveal that a management system known as “stack ranking”—a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “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 writes. “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,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”
"Fumbling the Future" *
According to Eichenwald, Microsoft had a prototype e-reader ready to go in 1998, but when the technology group presented it to Bill Gates he promptly gave it a thumbs-down, saying it wasn’t right for Microsoft. “He didn’t like the user interface, because it didn’t look like Windows,” a programmer involved in the project recalls.
“Windows was the god—everything had to work with Windows,” Stone tells Eichenwald. “Ideas about mobile computing with a user experience that was cleaner than with a P.C. were deemed unimportant by a few powerful people in that division, and they managed to kill the effort.”
* For a refresher on the above etymology, I've pulled a few excerpts from the book Fumbling the Future: How Xerox Invented, Then Ignored, the First Personal Computer (1988):
There might have been a third competitor [to IBM and Apple, in 1984]. In 1973, more than three years before Steve Wozniak of Apple soldered together a circuit board that qualified as a computer in name only, researchers at Xerox's Palo Alto Research Center (PARC) flipped the switch on the Alto, the first personal computer ever designed and built for the dedicated use of a single person. [p.14]
...
Xerox's 1979 commercial demonstrates how the Alto functioned in an office setting. ...
The commercial highlights many parts of the Xerox system including the graphics-rich Alto screen, the mouse, the word processing program, the laser printer, and, most prominently, the system's communications [LAN] capabilities. ... But in 1979, despite airing the spot several times, Xerox decided against marketing the Alto system. [p.19]
...
Predictably, a technology as untested as PARC's personal distributed computing system scared away executives whose careers depended on managing certainty and who, after the abysmal failure of SDS [Scientific Data Systems, acquired by Xerox in 1969], were afraid to gamble their Xerox futures on a computer business. [pp.181-182]
"We became burdened with organizational weight.... We got too many people working on projects, and that led to reviews and reviews and reviews, and foils and foils and foils. ... The organizational layering began to get serious in the late 1960s. It began to be more important to get approval than to get something accomplished." [p.183]
... in late 1979 one of the company's investment arms contacted Steven Jobs of Apple Corporation about a possible deal. Jobs...asked for and received a tour of [PARC]. According to Larry Tesler, who conducted a demonstration of the Alto for Jobs, the young entrepreneur immediately grasped what had eluded Xerox executives for more than half a decade.
" 'Why isn't Xerox marketing this?' " Tesler recalls Jobs demanding. " 'You could blow everybody away!' "
Ensuing discussions between Xerox and Apple fizzled. But within months of Job's [sic] visit, Tesler left Xerox for Apple, and Jobs ordered an Apple team to design the "Lisa," a computer introduced in 1983. [p.241]
Returning to the VF article:
“They used to point their finger at IBM and laugh,” said Bill Hill, a former Microsoft manager. “Now they’ve become the thing they despised.”
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