Every business owner has (or should have) a vision which acts as the cornerstone for the business’s practices. Creating a vision that permeates every aspect of a company allows for a stronger brand and a more cohesive employee/employer relationship. But what does allowing the vision to infiltrate the business actually mean? I stumbled upon a recent Microsoft article in the Economist about how Microsoft has fallen since the turn of the century. The article explored two major issues with the company’s structure that led to this downfall: the lack of a knowledgeable leader and poor management style. The management structure was of particular interest because all business owners and HR professionals can learn from Microsoft’s mistakes.
The computing giant employs a system called “stack ranking”, which means that employee’s performance reviews fall into a bell curve. For example, for every ten employees, two would be graded highly, seven would be average, and one would be terrible. This meant that instead of fostering growth and innovation, and allowing for open communication among employees, high-tiered workers would try to stay at the top, and everyone else felt inferior. The practice was in direct contrast to the Microsoft’s original image of open-source programming and collaboration. Management deviated from the company’s vision and culture, which led to its gradual downfall. Microsoft does not remain relevant because it is at the cutting edge; it simply continues being the status quo.
What can be learned from Microsoft’s mistake? In every business, it is important to stick to principles and vision and to employ institutions and practices that fit into these ideas. Microsoft tried to use a management system that may have worked for a retail company but stunted their innovation and communication. In the long run, matching management styles with vision not only creates a favorable corporate culture, but creates a framework to realize that vision.
