Microsoft Management Secrets

1. Total World Domination: Go for 100% of every market you are in.

Market Share is everything 2. Top 5%: Hire the smartest people around. Smart employees are your best asset 3. Bet the Company: Put your heart and soul into every project as if the entire company relied upon your success to survive 4.

Require Failure: If you take a risk you might fail. If you don’t take risks you won’t succeed. Take bold risks, not reckless risks 5. Managers Are Qualified: Managers can only make good decisions if they are qualified to do the work their subordinates do because they understand it well. 6.

Perform, Perform, Perform: The only thing that matters is the result. Focus on doing the best, being the best and performing the best7. “Shrimp vs Weenies”: Don’t waste money on irrelevancies. By conserving resources you can actually increase productivity 8. Size Does Matter: Big is bad.

Small teams that “own” their project work better and achieve better results 9. Bill Is Watching: CEOs and top level management must have an excellent knowledge of what the major problems are so that there are no surprises10. Esprit de Corps: Excellent morale produces much better workers – a product can be superior merely because the people who made it enjoyed doing it 11. Stop the Insanity: Don’t waste employees time and company resources on irrelevant rules, processes etc. Believe that employees are smart enough to make reasonable decisions 12. Home Away From Home: Design the work environment to emulate a home environment – if the workers are comfortable they will perform better Summary of Each ChapterIntroduction: Feel the Energy • Microsoft’s management style is its core strength • Companies either evolve or die – if they are too slow to react, then they will be devoured by other companies • The company needs to be vibrant and alive in order to succeed1) Total World DominationMicrosoft is going after 100% of every market that it is in- Nike Maples when he was executive vice president • Every employee at Microsoft has the same aim: to give Microsoft 100% market share in every market that it is involved in – Total World Domination • You have to ask yourself and all employees, “What are you doing to increase market share?” • Don’t be satisfied with the safe option and the secure option.

Risking profits to increase market share can be well worth it: losing profits only threatens security, but gaining market share shows who won (ie: destroy the competition)• Recklessness can destroy a company just as quickly as caution. Encourage the bold, not the reckless. • Hire type A people who are driven by conquest, not by security • Go after a market with the view to dominate it because owning a strategic market gives you a cash cow. • Lead by example: make a learning situation out of an employee’s mistake if it was a genuine mistake. Ask for direct reports on a daily and then weekly basis2) The Top 5 Percent• The single most important contributor to productivity is the quality of the employees: Hire only the very best people. • No matter how good the manager is, if the employees do not have talent, the team will not win • The best managers are the ones that do the least damage to the teams they have working for them • It is irrelevant what your perception of the quality of your employees is, what matter is what the level of quality truly is • A company cannot thrive without excellent employees• Microsoft only hires those who are in the smartest 5%: how smart that is depends on the job.

• “Smarts” is the ability to turn the brain on and think. A worker with smarts will catch errors sooner, come up with more efficient ways of doing something and save time, effort and the company’s money • Rather than hire from the second top 5%, Microsoft chose to limit the expansion of R&D • Interviews at Microsoft are done by the group doing the hiring • The entire purpose of interviewing candidates is to push the candidate in every direction until he fails. By doing this it is possible to learn exactly what they are and are not able of contributing • A new employee should raise the mean of the team• Employers should be concerned about how the new employee will perform, rather than concerned about management • The employee needs to be committed to the common goal. Contractors do not have a meaningful relationship with the company that hired them and temps are not going to be in the top 5% or even top 10% of smart people.

• Hiring the right person is the most critical decision that a manager makes: No matter how desperate you are to fill a position, do not compromise.3) Bet the Company• Very few companies are willing to bet their future unless they have no choice. • After capturing an island, Vikings used to burn their boats to show that they have made a commitment and that defeat is not an option • Microsoft tries to kill their own products for two reasons: 1. If Microsoft doesn’t, someone else will;2. To force a paradigm shift and cause confusion which creates opportunity • You must be able to see that there is going to be a change, embrace it and restructure your plans around the change – don’t be afraid of the change or try to maintain the status quo because the losers are the ones who fight to maintain the old way of doing things • If you are not willing to make bets at good odds, then you can’t win • You must be able to react quickly: don’t wait until someone else makes your product obsolete, do that yourself • Not making the bet can cost you the market and is often not the safe option4) Require Failure• SNAFU stands for: Situation Normal All Fouled Up: a company that is capable of responding to rapidly changing market will aspire to do better and often will. • Failures, as long as they are not excessively stupid, should be expected and forgotten: you can’t expect people to be perfect and not ever make mistakes • Identify failure as quickly as possible• No failure is unacceptable – it means that people are not trying hard enough, they aren’t pushing the envelope • If you can predict failure, then do not proceed with the project – change path and try something new (logical but often ignored advice) • It is critical that you understand why failure occurred • If (reasonable) failure is seen to be a result of attempting to succeed, and employees are rewarded substantially for success, then it stands to reason that employees will risk failure in the pursuit of a successful outcome.

• In this environment, while you experience more failures, you will also experience more successes. • Have a post-mortem discussion about the project: discuss what went wrong and what could have been done better to figure out how to improve for next time. These sessions are not meant to be judgements on individuals and thus encourages the team members to dissect their efforts and critically review them • Report problems immediately: recognise that the problem may exist, determine what is being done to research it and when you will know how serious the problem is and suggest solutions to the problem. • Managers should not get upset when they are faced with bad news because then no bad news will be delivered to them and they will not have a true picture of how the project is developing (thank the messenger, don’t shoot him!)• Push decision making down. Put the power in the hands of the employees because they are the ones who deal with the project daily, not upper management. Decisions for upper management are reserved for “Big Picture” issues (i.

e.: how it will affect the rest of the company), not “Local” issues (i.e.: how it will affect the rest of the team/project etc). • Because employees at Microsoft believe in their product, they will fight for what they believe to be correct and have no compunction about disagreeing with management • Because employees have the power to make almost any decision relating to the work they are responsible for, decisions can and are made quickly (they never leave decisions pending until the next meeting) • There must be a free flow of information so that people can make good decisions.5) Managers are Qualified• Managers should understand the work that the people who report to them do eg: managers of programming teams are, themselves, excellent programmers and the people managing the marketing teams are marketers.

• Managers who do not understand what the people who they are responsible for are doing cannot be effective in their position for a number of reasons: - They will not earn respect from subordinates- How can they make decisions on issues that they don’t understand? - How can they understand the status of their group if they are susceptible to being blinded by smoke and mirrors? • The primary qualification for managers at Microsoft is their expertise in a particular field. Other management talents are taken into account but are not the focus of the decision to promote someone to a management position.• Don’t promote people to management just because “they look the part” • Management positions and promotions at Microsoft do not go to those who have been there the longest and who are next in line, but to the best available person for the job. This a “Darwinian” environment where the effective managers are promoted and ineffective ones are demoted or “sent on a permanent sabbatical”. This selection process encourages people to do the best job that they can (competition produces productive workers).