Management the Microsoft Way

David Thielen

Contact Information

• David Thielen• www.thielen.com• dave@commerce.com• news.thielen.com/

thielen.books.management

• These slides• ftp.thielen.com/pub/seminars/

SD99_msft.ppt• Somewhere on the SD00 website

What We Are Here For

• To duplicate Microsoft’s success• This is not hard

– But it does require a cultural change

Fundamental Change

• Franco-Prussian War– Everyone (even most Germans)

thought France would win. But Germany had implemented a better system and destroyed France

• Change now or die– By the time you realize you’re in

trouble, it’s too late.

Why are we in Business

• To make $$$– To make a profit– To increase the stock (options) value

• Microsoft does not follow this model– Making money is tertiary

• So why are they in business???

Total World Domination

• To win– Conquest, not security

• To claim 100% of every strategic market

• This is the key– It’s easy to hear, difficult to truly

understand

• The Klingon Corporation

A More Successful System

• Market dominance is not the reason– The baby bells are scared of Microsoft

• Lack of ethics is not the reason– The mafia does not own the fortune 500

• Long term this method beats the old way

• Other companies use this system– It will overtake most industries in 10 years

Hire the Top 5%

• The real top 5%– Not what you pretend it is

• Pay what it takes– Salary, Options

• The alternative is you compete against the best - without the best yourself

• Do not use outsourcing/consultants for core work

Bet the Company

• Microsoft…– Went from no Internet to dominant in 9

months– Killed DOS and won Windows and Office

• Someone will take their market– Don’t lose your markets to another

company

• A toe in the water will not beat someone who commits everything

Require Failure

• You can forbid failure– And get few successes

• You can require success– And accept failure as part of the process

• Most companies forbid failure– And thereby have few successes

• Deliver bad news quickly– Hiding problems merely makes them worse

Qualified Managers

• Technically qualified– How else can they make intelligent

decisions– Yes this means many managers are not

qualified.

• Don’t bullshit the employees– They know when you are

• Imagine asking the CEO of a well-run company something.

Perform, Perform, Perform

• Based on performance today and tomorrow– Who cares what they did 1 or 10

years ago

• The keys to performance– Interesting work– Measured by performance & success– Peer pressure

Shrimp vs. Weenies

• When a job absolutely, positively requires 5 people - assign 4.– No bloated bureaucracy– Everyone must pull their own weight– Costs are minimized– Can get more accomplished

Bill is Watching

• Knows what is happening– Gets unsolicited e-mail from line

employees daily - and acts on it

• Has tight control of the company– Calls VPs s every Saturday– Numerous retreats– BillG meetings

• All managers do this

Culture

• Ownership• Only then do people emotionally commit

• Freedom• And with it, responsibility

• Focus• No one gives their life for two causes

• Teams• People you can depend on, people who

depend on you

More Culture

• Practical jokes– Builds up Esprit-de-core

• Stock Options– Keeps you going during the rough

times

• It comes down to one thing– Microsoft treats their employees as

grown-ups

Stop the Insanity

• Effective meetings– Only when necessary– Decisions are made by the end of the

meeting

• Information is not power• Eat your own dog food

Home Away From Home

• Individual offices• Same size, furniture, etc.• As many with windows as possible

• Small buildings• No dress code• Free soda pop• Open supplies• No set hours

Just Another Startup

• Each division operates as an autonomous unit in many ways

• Each group has a start-up mentality• So Microsoft is just another start-up

– With 16 Billion in reserves– With 25,000 people– A startup can continue to grow by

40%/year

There are others

• Other companies are following this model

• It will be standard procedure– For those companies that survive the

next 10 years...

The Future

• It’s all very simple. Each company will choose to evolve or die.

• Of those that choose to evolve, some will be successful enough that they will survive and some will even prosper

• For the remainder, it is very simply…• The End