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Reading Between The Lines At Microsoft


Having worked at Digital Equipment Corp. for 20-plus years before its acquisition by Compaq and eventually by Hewlett-Packard (HPQ), I find the parallels between Digital and Microsoft Corp. (MSFT) frightening ("Troubling exits at Microsoft," Cover Story, Sept. 26). Both companies were founded and run by singular individuals: Ken Olsen for Digital and William H. Gates III for Microsoft. Both companies relied on one or two products for much of their revenue: Digital on its VAX systems and Microsoft on Windows and Office. Both companies had extremely strong balance sheets. Digital for a while was one of the very few companies with an AAA bond rating.

At their zeniths, both companies had employee benefits that were the envy of the industry: Digital with family days at the local parks, turkeys for employees during the holiday, and exercise facilities at its main plants; and Microsoft as detailed in your article. Both companies began losing their top employees. When the competition got tough and the stock market demanded better results, both companies reduced employee benefits that had little impact on the bottom line but a lot of negative impact on employee morale: bottled water at Digital and towels at Microsoft.

Both companies viewed their stock as undervalued and spent billions buying back shares. Both companies had many reorganizations. I hope the parallels end here -- Digital no longer exists.

Gim P. Hom

Cambridge, Mass.

With 25 years of experience as a human resources and organization consultant, I found the hollow phrases of Ballmer and his evasive response to the pointed questions of your journalists very recognizable. I've heard and seen them before in numerous companies where, soon afterward, the chief executive and the organization were in deep trouble and totally "surprised." The obsessive need for good news and confirmation of one's wishes completely cuts some top executives from the reality of their company. The gap between the described reality within Microsoft and the CEO's response is such that a crisis is unavoidable.

If 15% of Microsoft's employees are dissatisfied with the way things are run, chances are that a large number of those are among the top new talent of the company. When (not if) they walk, the downward spiral will be impossible to stop. Let Steve Ballmer stop worrying about the short-term "needs" of his shareholders and concentrate on the long-term survival of the company they entrusted to him.

Herman J. Hoolants

Antwerp, Belgium

Reading this was like reading about IBM (IBM) 20 years ago.

Cliff Chapman

Hayling Island, Hampshire, England

Steve Ballmer is not creative or sensitive enough to nurture a culture of America's best and brightest techies. Your account of Ballmer's vicious tirade against an employee who had jumped to a competitor was truly frightening to read. It should have been reason enough for Bill Gates and Microsoft's board to fire him. Taking that action would, indeed, have met some high expectations -- those of Microsoft employees, stockholders, and suppliers.

Mike Van Winkle

Ridgefield, Conn.

Steve Ballmer's failure to answer Kathy Rebello and Jay Greene's questions with any honest and straightforward response is the sign of someone either completely clueless, in total denial, or both.

Paul Thomas

San Mateo, Calif.

The mileage gains attributed to the various design changes you reported were indeed impressive ("Getting more miles to the gallon -- fast," News: Analysis & Commentary, Sept. 26). However, you -- and auto designers, apparently -- seem to have overlooked a simple and potentially effective design measure which could also bring savings of as much as 10% to 20%: Why don't all of our cars now have miles-per-gallon indicators in prominent view of the driver? This instantaneous feedback of driving efficiency could quickly train drivers to operate their vehicles in a fuel-sparing manner. An alarm light or sound, activated by wasteful acceleration, could provide behavior-shaping feedback.

Most modern cars get maximum fuel efficiency at speeds between 35 and 55 mph, so an incentive to drive less than 55 would save huge amounts of fuel nationally and would likely reduce the death rate by 5,000 to 10,000 fatalities a year (as the 55-mph national limit did several decades ago). Such a device could potentially repay its costs within a few months.

Karl Albrecht

San Diego

James Ellis' explanation of the dysfunctional airline industry strengthened my conviction that it's time for Congress to reconsider its 1978 deregulation of virtually every aspect of the industry except safety ("The law of gravity doesn't apply," News: Analysis & Commentary, Sept. 26). Reregulation of capacity would be a first step, and perhaps the only required step, toward bringing sanity to the industry. A combination of entry regulation and route regulation could force capacity out of the system and, long term, buoy prices.

The airlines' knee-jerk opposition to any form of economic reregulation, even though it would be a good tonic for them, has contributed to the long industry slide of the past 27 years.

Tom Woodall

Rockville, Md.

The most important feature of any hotel is rarely mentioned: peace and quiet ("Marriott hip? Well, it's trying," Marketing, Sept. 26). I will pay a hefty premium for soundproofing.

Paula Berinstein

Thousand Oaks, Calif.


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