How not to set goals: Steve Ballmer, a case study
Recently Steve Ballmer’s FY ’09 Strategy email was leaked. Out of curiosity I read the thing – and it makes an excellent case study in goal setting (covered in Chp4 of Making things happen).
Is it any wonder things are slowing at Microsoft with goals like these?
Therefore, my priorities are consistent with last year. In FY09 we must continue to:
1. Invest in the right opportunities;
2. Expand our presence with Windows, Office, and developers;
3. Drive end user excitement for our products;
4. Embrace software plus services; and
5. Focus on employee excellence.
These are the same goals Microsoft has had FOR A DECADE. It’d be impossible to know this was written in 2008 if the lead in sentence were removed. Consistency of leadership can be great, but be consistent in vision, not at the goal level.
Worse, #1 and #5 are wastes of goal space. A good goal makes decisions easier to make. How does it help any of Microsoft’s 80,000 employees for the CEO to say “Invest in the right opportunities”? As if there are hordes of managers running around trying to invest in the wrong ones? The #1 slot is the big gun, the first shot, the lead idea, and in this list it’s fired into the ground.
Here’s my take on the other 4 goals:
2. Expand our presence with Windows, Office, and developers;
Windows and Office have been market leaders for years. The big goal for ’09 is to expand presence? That’s the secret to the future of Microsoft? Getting the last .005 of market share left? First off, I don’t believe Microsoft executives truly believe this is the future, but they really don’t know what else to say. It is still a two horse company unwilling to confess, even inside the company, that all its attempts for a third horse have been qualified failures (MSN, Interactive TV, Mobile, XBOX, etc.) If they’d do a postmortem on these efforts and educate the company and what executives have learned from these efforts, the company would get 20% smarter (yes it’s a made up number), instantly. Microsoft has a ridiculous amount of untapped experience since they hide their failures internally and never share their big, expensive lessons (Bob, MSN, Search, etc.). If every VP and middle manager were forced to write a postmortem and publish it internally, Microsoft would instantly become a dramatically smarter company.
3. Drive end user excitement for our products
This is weird. It doesn’t say make great products. Nor does it say have amazing levels of customer satisfaction. It says drive excitement. If ever there were grounds for calling Microsoft products over-marketed and under-designed on purpose, this is it. Excitement for a thing can be generated in different ways, and only some of those are beneficial in the long term. How about “Make great products that drive end use excitement” or “Earn customer love through making people’s lives better” or some statement that connects a good cause with a good effect? That would clarify the valuable kinds of excitement from the fluffy kinds.
4. Embrace software plus services
Microsoft started talking about software as a service back in 2005, and years earlier internally. It was a big campaign back then and it led to the launch of Windows Update and similar services across the company. So what does it mean in 2008 to embrace software plus services? I don’t know. Haven’t they mostly been embraced already? And besides, an embrace isn’t the best verb to use in a goal. What effect do we want the embracing to have? That’d be a better goal. Any idiot can embrace something (a light post, a stuffed animal, etc.) but that’s not as impressive as doing something meaningful with it.
5. Focus on employee excellence.
Like Goal #1, this is a waste of goal space. Is there anyone actively focusing on employee incompetence? This goal, as written, suggests there is. And the verb, to focus, is not progressive. What if I’m already focused, should I be focusing more? A goal should be a horizon to chase. Words like improve, increase, grow, and develop are all stronger verbs.
If I were Ballmer’s editor, here’s the revision I’d offer of what I think is his message:
- Make smart investments and evangelize the lessons we learn
- Create great products that naturally generate end user excitement
- Combine software and services to provide great customer experiences
Three goals. No fluff. Strong verbs. Clearer direction.
- I’m not sure the above would be my leadership message if I were CEO. But it is an improved version of what i think he was trying to communicate in the goals.
- $60 billion in revenue in FY08 is a ridiculous level of success by any metric. Hard to say how long this will last since it’s largely driven by the two horses (Office, Windows), but while it does you can’t pick too hard on Microsoft as a business.
- Writing goals as a CEO for 80,000 company is quite different than writing goals for a 50 person software development project.
First and foremost: Congrats on your Excellent Books and Great Blog :)
About this post:
What I think might have been misunderstood here was that these were priorities set for the forthcoming year and not necessarily goals.
OK, strategy vectors DO tie into goals. Goals “operationalize” strategy. They make your strategy “real”.
I think that it helps if we read those priorities thinking about “what message does it send?”:
I read it like this:
– It’s about making sure that “if we are to invest in something… it needs to be objectively the right thing to do”. Investment isn’t key… the right investment is.
Sends the message: “If you find that there’s a right opportunity for investment out there, you should take ownership on that and fight your way off to make it happen, we welcome that”.
Please note that investment is priority #1.
– Microsoft is going to continue to use Windows, Office and Developers
This is a strategy vector that embodies Microsoft for some time now. Nothing wrong with that.
It reinforces commitment to what made Microsoft strong in the first place.
Sends the message: “Windows, Office and Developers are still key for us. We’re not done here.”
A practical implication of this surely is the importance of these 3 areas on the overall Microsoft resource and budget allocation.
– We’re making a conscious effort to drive end-user excitement on our products
You can’t read this “priority” without reading the whole e-mail.
Ballmer clearly says that apple does a narrower but more polished product.
He also states that there are a lot of misconceptions about the current offering (windows vista) and they’re working on that.
Sends, amongst others, the message: “initiatives about making end-user excitement grow, no matter if simple or complicated, are welcome here”.
As an example, think if someone from windows marketing were to propose something like channel9 but for end-users… showcasing products and gathering communities.
In the light of this priority for the company that makes for a great suggestion that stood some chance of actually seeing the light of day.
– Embracing S+S is key. Not just in Windows, Office or other developer products… but EVERYWHERE.
This restates that now more than ever, the focus is on S+S.
Everybody is doing it wrong (look at apple with mobileme, and amazon that has recent service downtimes) and there’s a real chance we can make our stand.
Sends the message: “Look for ways to incorporate S+S in what you’re doing… We welcome that! We have a real chance to win, and we definitely want to!”
– We’re continuing to focus on getting the best people working for us and in giving them the best work experience possible
This, to me, is key to success.
With pressure from other work-places such as google taking off key employees from Microsoft, this reinforcement needs to be stated everywhere, every time, all the time.
It sends the message, amongst others:
“We care that we have the right people. We care that we have you here. We’re going to make sure you know that. If you have something to say about it, that will improve the way we handle people around here so that they don’t leave, you’re welcome to suggest that”.
So, bottom-line, I guess it’s about making sure that the right direction gets set.
What’s important is that mid-level managers (for a lack of better name) are going to be responsible to make this strategy real.
This involves communicating those messages loudly and frequently, making sure that they set their goals accordingly and encouraging their teams to come up with ideas on how they can help drive that direction forward.
The way I see it: strategy points the way so that someone defines real goals aligned with that.
So, by definition, strategy should be broader, and the goals are the ones that should encourage action.
Just my 2 cents…
Again, thank you for your excellent books!
RClerigo: Good point on priorities vs goals. I grant that they are not the same thing.
However, you wrote:
> It’s about making sure that “if we are to
> invest in something… it needs to be objectively
> the right thing to do”. Investment isn’t key…
> the right investment is.
There are some things that should never appear in a list of priorities for an organization. They include breathing, bathing, eating, sleeping, and not committing felonies.
The only exception of course is if there has been a rampant lack of bathing, or rash of crimes (e.g. Enron), in which case reminding everyone of basic assumptions would be a good thing.
But to say “invest in the right opportunities” without redefining what’s right, informing me of what the right opportunities were last year so I can learn something, is a wasted bullet.
At least say “Continue investing in the right opportunities” or something that reinforces what was done in ’08 was good and should be repeated.
But hey, you work there (I’m guessing) – if this memo worked for you, maybe i should just keep my mouth shut :)
I don’t work there :)
I agree with your point that implicit priorities should not be present in all strategy statements, year after year.
Although a reminder never hurts anyone, because you and I know that “common knowledge isn’t so common anymore”.
On the other hand, I still think that that priority item still should be there for 2 reasons:
– stating that investment is #1
– reinforce that it’s about making the right investments not any investment.
I grant that not stating what “right” means might be an “wasted bullet”, but let me throw in a provocative question:
“Don’t you think that clearly stating what right means (either in financial or market growth) would be imposing a virtual limit that you might not want to have?”
As a practical example, say you state that the right investment means to break-even in 2 years.
Wouldn’t that limit your ability to make investments that broke-even in 3 or more years?
The way I see it:
– Sometimes it’s a decision based on data clearly stating that the ROI is going to be this much after this long.
– Sometimes it’s about the people that work in the company that you’re going to buy (take Ray Ozzie for example).
– Sometimes it’s about the technology you buy, the market you get or the presence opportunities you seize.
So in a way, I guess not defining what right means could be intentional. “You know more about your own businesses than the CEO does… you define what’s right and convince me about it!”.
Thanks for the response!
The best materials I have every encountered for goal achievement – which is different than goal setting comes from Douglas Vermeeren. He is the author of Guerrilla Achiever with Jay Levinson. Doug is considered the modern day version of Napoleon Hill, although many feel his work surpasses Hill’s in every way. Vermeeren has worked with more than 400 of the world’s top achievers. Not many success teachers can say that and many are just simply teaching everyone else’s stuff. You should do a little research to see where a lot of what is being taught today comes form it’s pretty interesting. In Guerrilla Achiever Doug Vermeeren points out how most of it came from the industrial era and specifically manufacturing for an assembly line. Much of what is taught in goal achievement today is a lie and counter productive.
You bring up some great points as these goals. Your idea of sharing lessons learned seesm imperitive. If you don’t look at what is working and what isn’t, how will you innovate? Goals start broad and trickle down to align with the individual contributor. So if they are too broad you may not get the synergy necessary to innovate either. Has Ballmer seen your goals ; )