“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.”

Kurt Eichenwald, Vanity Fair

The quote above is from an article in the August issue of Vanity Fair (subscription required to read the entire article).  In it Mr. Eichenwald quotes interviews with current and former Microsoft employees who describe a culture that is focused on maintaining the status quo and incapable of innovation.

Apparently the revelations in the article have had a ripple effect across the tech world but I am not surprised.  You don’t have to be a tech junkie or business genius to notice the relative invisibility of Microsoft in recent years.  The only publicity Microsoft has generated has been negative (Vista) or presented in the context of missed opportunities (Surface tablet).

So what’s my point?  Culture matters.  Instead of going on the offensive by creating new markets through innovation Microsoft assumed a defensive posture to protect the ground they had already taken.  According to the employees interviewed by Mr. Eichenwald this led to a nearly cannibalistic culture.  This kind of behavior is not attractive to talented prospects.  Even if an organization can maintain its market share in the short term this kind of culture will eventually impact sales.

This should serve as a warning to leaders.  Be aware of the culture in your organization.  Don’t ignore the warning signs.  Ann Bares makes good points in her assessment of Microsoft’s troubles.  Her recommendation is to develop and adhere to quantifiable performance standards that are consistent with the organization’s goals (my words, not hers).  She also cites and article in Fast Company on motivational synchronicity.  The quotes in her post are interesting so I’ll probably read and post my own thoughts on that article too.

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