Is unbridled financial growth any indication of a company’s employee satisfaction? Many of you might think this to be a stupid question. To be honest, I always believed that higher financial growth meant higher employee satisfaction. Recently, though, Microsoft opened my eyes to the financial growth versus employee satisfaction balance.
Microsoft is easily the most profitable player in the tech industry. And it's raking in more moolah than ever, with a net income of $12.3 billion on revenues of $39.8 billion for the past fiscal year. Its twin monopolies, the Windows PC operating system and the Office suite of desktop applications, give it crucial advantages when it plunges into adjacent markets, such as server software for corporations and instant messaging for both businesses and consumers.
All that said and done, are its employees happy and satisfied? Methinks the answer is "maybe not".
In 1998 Microsoft Corp. hired computer scientist Kai-Fu Lee away from hardware maker Silicon Graphics Inc. The move showcased the software giant’s thorough dominance of the computer industry. Lee's expertise was in speech recognition, considered one of the next big leaps in computing. With people like him flocking to Microsoft's labs, it seemed but obvious that the digital world's reigning champion had a secure lock on the future. Things, however, did not turn out that way. In July 2005, Lee bolted from Microsoft for Web search king Google Inc. When asked about his shift into Google, Lee smiled broadly and threw both arms in the air. "I feel great, I can't wait to start work tomorrow morning."
Contrast that with how Lee felt about Microsoft. He painted a distinctly unflattering picture of the company's inner fabric. Lee, who opened Microsoft's research lab in China in 1998 and moved to headquarters in Redmond, Washington, two years later, fretted over what he saw as repeated blunders. He detailed how the more than 20 product-development centers in China tripped over one another, duplicating efforts and even fighting over the same job candidate. Lee called the company "incompetent." He praised Google, noting, "the culture is very supportive, collaborative, innovative, and Internet-like -- and that's bottoms-up innovation rather than top-down direction."
Lee is not the only one giving Microsoft a caustic treatment. Much of the sharpest criticism comes not from the outside world but from within. Scores of current and former employees are criticizing the way the company operates internally. Recently two researchers sent Chairman Bill Gates a memo in which they wrote: "Everyone sees a crisis is imminent" and suggested "Ten Crazy Ideas to Shake Up Microsoft." Many workers, like Lee, are in effect saying: "I quit." More than 100 former Microsoft employees now work for Google, and dozens of others have scattered elsewhere. Employees' complaints are rooted in a number of factors. They resent cuts in compensation and benefits as profits soar. They're disappointed with the stock price, which has barely budged for three years, rendering many of their stock options out of the money. They're frustrated with what they see as swelling bureaucracy, including the many procedures and meetings Chief Executive Steven A. Ballmer has put in place to motivate them. And they're feeling trapped in an organization whose past successes seem to stifle current creativity. "There's a distinct lack of passion," says one engineer, who would talk only on condition of anonymity. "We're missing some spunk."
Ironically, these were the very same characteristics that made Microsoft a popular workplace years ago. The company rode high and its employees rode high with it. Everyone slogged so that the company, and they themselves in turn, could do well. The stock prices soared and growth was the flavour of their work. Creativity was encouraged and passion was a common characteristic of Microsoft employees.
So what happened along the years? Was it poor leadership? Probably not…that is an unlikely theory. The most probable reason for employee dissatisfaction might have stemmed from the sheer size, financial stake and non-maneuverability of the organization. Microsoft, in short, had grown beyond the dreams of a creative thinker that was once William H. Gates III.
I don’t intend to claim that high profit making organizations will absolutely have employee-work dissatisfaction...that would be silly. All I’m saying is that monetary growth is often not the correct gauge to measure an organization’s success. A successful organization will definitely need to make excellent money (heaven help them otherwise!) but it will also need to necessarily ensure the constancy of the passion that ensured its progress. As they say, "The happiness of a man in this life does not consist in the absence but in the mastery of his passions. "
Financial data and the case study for this piece were taken from The Business Week
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