O.K., so you created a new business unit, entered a new market segment, and dominated it. So what? That was yesterday. At many companies, a big success can carry you for the next one to ten years. At Microsoft, it is an indicator of how successful you may be on your next job, but little more. Microsoft gives you virtually nothing for what you have already done. You never get to coast on previous work. And, in fact, if you burn out doing an awesome job, you are cast aside once the work is done because you are no longer of use to the company.

This is a very scary concept for most employees -- and most companies. It means that you can never stop and rest. If you do, someone else who is not resting will pass you by, and you may become expendable. It also means the corporation is totally heartless. Ten years of dedicated service means nothing. Every day you have to continue proving your worth. (On the flip side, Microsoft's success has made it unnecessary for it to lay off divisions, including people who are doing a good job for the company -- a common occurrence in all too many companies today.)

The result is that all the employees are constantly challenged to do the best job they can for the company because the company is constantly looking at what the employees are doing -- now.

NO EXCUSES. No one at Microsoft is much into excuses. When success is the only measure, then excuses become irrelevant. Everyone realizes that some problems are harder than others, and everyone realizes that bad luck occurs. But it is also irrelevant. The only critical question is: What is going to be done to fix the problem?

Some people will claim that this is unfair. But Microsoft has never been concerned with fairness. It is concerned solely with success. Microsoft does not need to be fair to attract highly motivated employees. Let's take a look at a sports team. Everyone understands the rules; you win or lose. Maybe for a death in the family the player will be cut some slack for a game or two, but that seems to be about it. All that matters is winning.

Microsoft attracts employees because it is success-oriented. Both morale and performance are stellar, due in part to this focus. People want to work with successful groups, and they are willing to accept that they are judged on their success alone as long as everyone else is too. In fact, the people who do not find this environment acceptable are generally people who are not terribly successful.

RATING EMPLOYEES. So how are employees rated? For something major that was out of the control of the employee, some weight may be given to a reason for failure. But this is rare. By and large, it's performance that matters. If no one will pay any attention to excuses, then no one will put much effort into formulating them.

This can have a nasty side effect. I have seen several cases where it was "common knowledge" that someone had screwed up real bad. Yet in these cases, "common knowledge" was dead wrong. The individuals in question had done it right. However, because there is no mechanism for discussing excuses, those people were unfairly left with the failure on their reputations.

Failure is expected, and yet it may count against an employee in his or her performance rating. How can this be? The road to success in Microsoft's core business, software development, marketing, etc., is littered with failures. On average, about 50 percent of an employee's time is spent on things that the employee later discovers won't work. While the failures along the road to completion are by and large both expected and ignored, the rating of the employee is based on what was accomplished.

However, a failure is not a permanent black mark on the employee's record, and therefore does not have any long-term effect unless the employee continues to fail and fail and fail.

No system is perfect. Microsoft's system generally treats everyone pretty (consistently). Further, people are not fired because the project they were on failed. Rather, they are looked at for their individual work and judged on how successful they were within the scope of the project. While the system will at times treat individuals unfairly, it works very well for the company. It keeps everyone focused on performance, not excuses.

This is one of the major reasons that appearance is so unimportant at Microsoft. This is not to say that other factors are completely irrelevant. People are people and even at Microsoft looks, personality, gender and skin color affect individuals' perceptions of others. (It's worth noting that Microsoft's top management team is, and has always been, made up primarily of white men.) The difference is that performance is given significant priority over these other factors, whereas at most companies performance and success seem to be secondary at best.

I felt like a moron when I first started at Microsoft. I had come from an environment where I was one of the best, and suddenly I was surrounded by people who were as smart as me. And some who were a lot smarter. For the first six months, I scrambled like crazy to catch up. I was personally determined to become as good as I could, and because of this competition, I became a much better programmer than I ever would have become without it.

SHIP IT! When Windows 3.0 was nearing completion, signs sprung up on doors everywhere in the Win 3.0 group saying "Ship It!" What everyone meant was that the product was good enough, so get it out the door and into customers' hands. Now granted, Win 3.0 was (very) far from perfect, but perfection takes forever, especially for software.
Everyone understood that the job was not finished until the product was shipped. So virtually everyone, except those few scrambling to finish their parts, wanted it shipped because that was the measure of success.

This permeates every project I have ever seen at Microsoft. No one has ever said that their part was done, so they've been successful. No one has ever considered their performance excellent if the project is in trouble. People take ownership in the entire project. Because people take ownership, they will step in and voluntarily help where needed. Since their job isn't done until the project is shipped, people with less work feel compelled to assist others with too much. And people pay a lot more attention to the entire project. If another part is in trouble, the sooner it is addressed, the sooner the project is back on track.

Managers have to keep everyone on the project informed of direction and status. And for major changes in direction, they have to get "buy-off" from the employees. This is a critical component. Employees are not stupid, at least not the ones at Microsoft. They won't push to do something that won't sell.

The team also has to buy off on the proposed schedule for a project. The schedules are aggressive. In the case of programmers, this is essential since you can improve a program forever. However, the same holds for almost any job. Figure out the fastest way it can be reasonably done, and shoot for that.

In this environment, employees are very wrapped up in their jobs, the success of their group, and the success of the company -- not just in terms of salary and stock, but core emotional happiness.

So what happens when they see the company doing something stupid? They let management know -- and managers must respond positively. Employee concerns must be directly addressed. When there is a major change of direction, Microsoft holds meeting after meeting to present the logic behind the change and to answer questions. (I've thought at times that Microsoft intentionally holds so many meetings because it wants to get people bored with the issue so they'll stop objecting.)

Communicating the reasons for change often addresses many employee concerns that were already discussed by management before making the decision. This demonstrates that management is thinking, thereby increasing the credibility of the management team. And sometimes an employee will ask a question that brings up issues that weren't considered -- possibly something critical to the success of the company.

David Thielen worked at Microsoft for more than three years as a senior developer, programmer, and product manager.

Reprinted and excerpted with permission from
The 12 Simple Secrets of Microsoft Management
By David Thielen,
Copyright 1999, David Thielen
Published by The McGraw-Hill Companies.
Reprinted with permission of The McGraw-Hill Companies, Inc.
All rights reserved.
Available where books are sold.