July 20, 2005

Microsoft Departures

Kai-Fu Lee: Another high-profile Microsoft departure. Certainly not the first, and it will not be the last. This time Microsoft sues. Sound familiar? Happened to a bunch of us at Crossgain in 2001. Despite all the fire and brimstone, we later did well at Crossgain, and I'm personally doing just fine now, thank you, and very happy to have "graduated" from Microsoft.

So then why the lawsuits? They are an attempt to stop a wave. They are designed to be a spectacle.

My friend Dave Maymudes (another fellow ex-Microsoftee) has a theory about how these sorts of departures continue to shape Microsoft culture. His theory seems to have a grain of truth, and to me it seems to explain Microsoft's need to resort to lawsuits, so I will relate the observations as best I can.

Dave points out that in the over the years, as Microsoft employees got rich from stock options, people left the company in waves. These waves of departures have defined the culture company they left behind....

The First Wave

The first wave of people to leave were those who did not fit well at Microsoft. Maybe these were the folks who were more cut out to be a musician or a law student rather than being a programmer. So as soon as the stock rose enough for them to afford a car, a down payment on a house, or to pay for law school, they went off to follow a different path.

As these people filtered out the door, the company changed. They left behind a more focused, technology-savvy, motivated group, albeit a less diverse group. The company grew more hard-core.

Joining Microsoft after this time was very exciting. The "old-timers" who remained in charge of the company were highly driven, competent leaders who had big dreams. And they had in their hands the tools to achieve them.

This was the company that powered through the early pre-Windows years, with visionary bets on everything from Windows 1.0 to Excel on the Mac all the way through the massive winner-takes-all company-wide bet on the Windows 95 and Office 95 simultaneous launch. There may never have been any other company in history with such a string of remarkable successes.

The Second Wave

But somewhere around the tail end of this massive series of successes, there was a second wave of departures. A different kind of person picked up and left Microsoft.

This time, it was ambitious people who left the company - the leaders, movers, and shakers. Why? Because after accumulating enough financial security, they could now really afford to chase their biggest dreams. They had done as much as could be done inside Microsoft.

No leader in their heart of hearts really dreams of ending up working for Bill Gates. Some people dream of being the "next Bill Gates", but no kid says "mommy I want to grow up to be the next senior vice president of operations under Bill." Part of this is the obvious thing about wanting to be in charge of your own destiny. But part of this probably also has to do with the fact that leaders do not always find Bill the easiest guy in the world to work for. So a big wave of people with a big dream left.

They left to start companies from RealNetworks and Ignition and InfoSpace to Fog Creek and Crossgain and TellMe and Sucker Punch - and dozens more. The leaders who left created their own "Little Microsofts without Bill". If you look at the spectrum of innovation, you realize the creative power of this wave of people who left Microsoft. Many of the best had walked out the door.

They had executed the Judge Jackson breakup that never happened.

The Well-Managed Company They Left Behind

This second exodus drained a lot of the color out of the company. It left Microsoft a far less interesting place, a place less about new dreams and more about the ghost of dreams past. Even now, you can see huge company initiatives continue to drift forward based on the combined momentum of some ideas of long-since-departed visionaries.

Many people at the company are running hard, but in a sense running blind. Why hasn't "new blood" come in to replace the drive of departed old timers? Surely there is new talent being hired at the company! And certainly Microsoft encourages pockets of excellence to this day.

But the innovators have been sidelined. Inevitably the "big important projects" have a line of succession. When a team of "leaders" depart, they pass the reins to a team of senior managers who, on average, have a very different personality.

Successful managers manage toward an end-goal, and they are good at fighting any urge to move the goal. Leaders are the opposite in some ways - they are the ones who move the goalposts; they thrive in the insanity of change. The problem with the theory of relying on new talent to drive change is that once the projects are big enough, and once there are enough old managers in charge, the movers and shakers among the newbies can never be trusted enough to ever have a hope of moving the goalposts. And rightly so. Handing the reins to a newbie would be pure insanity.

It was in the wake of this loss in leaders that Microsoft changed their tagline from "A computer on every desk and in every home" to "Where do you want to go today?" A fitting change, I think. It was a change that reflected the loss of clear direction and vision, and a change to a more cautious and conservative management style.

Yet many of the best programmers stayed on. Not everybody wants to be the founder of drugstore.com, and Microsoft remained a fine place to be a software engineer for many more years.

The Third Wave

But then a strange thing happened. There was a third exodus. This exodus continues today and is probably the most damaging to the company's daily operations. The people who left in this third wave - and who continue to leave now - are the line-of-business engineers and staff who are doing very well at Microsoft but who are somehow finding that the company is just not making them happy.

What happened? In this third wave, employees - highly competent, excellent people - complain that the company has become a huge bureaucracy; that it take forever for anything to get done; and that the place is just too slow. In short, they are people who thrive on "doing something great" or even just "feeling useful", and their work is just not giving them what they need. They tell me that the company is no longer the exciting, vibrant, visionary place that it used to be.

This is probably partly because much of the the visionary leadership of the past is gone, while much of the possible future generation of leadership is leaving before they can rise through the ranks. The third wave of departures spiked dramatically at the peak of the stock bubble around 2000 when Microsoft stock rose enough to give the majority of ordinary employees the financial freedom to find something else to do without risk. This hemmorage threatened disaster for the company. (I was part of this exodus.)

But even as the stock has come back down and remained steady around 26, this third wave of departures continues. People leave to work for more interesting companies, or even just to just do something non-Microsoft to get away from the place. It may depend on which group you work in, but the general feeling seems to be that it's just not so fun there anymore. The most interesting people tend to pack up and move on over time.

That's Dave's theory, at least as I understand it.

More on the meaning of the lawsuits in the next article.

Posted by David at July 20, 2005 07:58 AM

Hi David, This isn't about your writing which I will read.
Last night I dreamed I was listening to a CD of a guy talking about dreaming. The name of the guy was David Bau. I had never heard of this name and thought I'd type it in a search engine and see what happened. Your work came up. I am writing a book about dreams and psychic experiences and wondered if you really have anything to with the subject. I honestly didn't expect David Bau to exist!!


Posted by: Lynda Nash at October 29, 2005 12:03 PM
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