
How can you tell when a company is starting to fall apart? I suppose there is no really easy way, but watching how irate the staff have become could be a key indication. Add to that the comments of vocal shareholders, and it starts to paint a picture that management need to take notice of.
This week I read several articles that paint a very depressing picture of the state that Microsoft is in. The most important one is from MSFTextrememakeover, an employee who for many reasons believe that the leadership within the company has lead Microsoft down eight years of wrongness.
Unfortunately even one well written and profound ”raging against the establishment” is not going to change the Borg’s direction. Some will be hostile in defence, suggesting that it is just an opinion of a disgruntled employee. And for those who fear embracing failure as a measure for course correction in a corporate environment, the criticism would be all but ignored. However the reality is Microsoft is not only being critiqued by employees, but also by shareholders and the media.
I’ve been reading the blog of the infamous fake Steve Jobs, while along with recently taking the persona of Jerry Yang (the CEO of Yahoo) has also weighed in on the failing Microsoft. His take on it is that the company is in a bad way when the media and shareholders start talking about it in public. With such contempt being shown for the company as a whole, then the end is near. And it’s obvious. When was the last time we really heard media bashing a major tech company on television? I can’t honestly remember. But it is happening now with Microsoft. And how does Apple manage to attack Microsoft without even such a whimper from the beast? It just doesn’t make sense.
The ironic thing about all of this is that I totally understand their frustration. Working in an IT company that has a corporate directive to model itself after Microsoft, enabling the lack of direction and misguidance within a company has been something that has surprisingly been simple to achieve. It doesn’t take much of a change to take a company that was once a pioneer of an industry and turn it into a sitting duck. Even more surprisingly is how the similarities in the process occur.
Rebranding
The concept of rebranding to the point of destroying the existing brands you own whenever you come up of with new product name can occur with little question, especially if the people responsible for developing the marketing the product are put in the driving seat. Also, if the team responsible for product direction ignore the suggestions of employees working directly with the customers have the end result can head for a crash.
At microsoft, previously .NET, and even more recently the Live brand were used to rebrand a large goup of unrelated products with an overarching category. This was completed even though the products affected were only increments upon their previous versions. It’s a costly change, marketing collateral and websites must be revised, and customers need to be re-educated. As has happened with the company I work, most customers associate us with the product name, not our company name, so it has the potential for doing untold damage within our existing customer base. For the Borg, its a screw up, for a small IT company, it’s a business threatning change.
Product and Resource Misdirection
Another major misdirection that Microsoft tends to do is spend large amounts of money to introduce new products that are defensive products aimed to block other companies in the software industry. The overall process causes a weakening of the R&D allocated to existing products and leads to a large number of sub par products, rather than a select few great products. The end result is the burning of cash moving in directions that are not financially viable in the long term. Once again, the parallel between Microsoft and us is astounding. Chasing incremental improvements in our stock price is done by making counter intuitive deals, which burn both developers and cash, and move the company into an ever unviable direction.
Foresight Management
Finally, one more major fault that Microsoft has employed most often, is the lack of foresight in their product development. When Apple was making moves in the music industry, Micrsoft sat still. When iPods had been sold by the millions, they started to address the issue with the Zune. But R&D takes time, so at that point it was too late. More recently, we saw the OLPC and eePC head into development. Did Microsoft make a move? not at all. It wasn’t until both units were being sold that they decided to make a move to get their OS on to the PCs. Why didn’t the talk to the manufacturers during the conception? Are they that stupid as to think it wasn’t worth the discussion? The stupidity amazes me.
In conclusion, I feel sorry for Microsoft. They have over the years done more things that are good than bad. They’ll take a hit over their misdirection, but their coffers contain enough capital to make mistakes, learn from them, and get their company moving on the right track. For the company I work for, which doesn’t have the same capacity to take a hot, I am not so confident we could survive the same fate.