Will An Efficient Culture Destroy Microsoft?

I just read an interview of Microsoft’s CEO Steve Ballmer in the New York Times that really caught my eye. Ballmer was asked the following question: “Fill in the blank. You want the culture of your company to be more __________?”

Here was his response:

Efficient. The right word is efficient. That’s the direction that every business leader is steering their corporate culture. Given the current economic climate and the uncertainty about how long the recession will last, this is a time when organizations need to do more with less, Microsoft is no exception…

My take: For Microsoft’s sake, I hope that Ballmer misspoke. For all of our sakes, I hope that he’s wrong.

I can’t imagine how awful it would be to work in a company if its culture was built around efficiency. Don’t get me wrong, I aim to be hyper-efficient. But that’s quite different from defining efficiency as the cornerstone of your corporate culture.

What type of an environment would it be if the most important thing that employees cared about, were measured on, and got promoted for was efficiency? The answer: Horrible.

There’s no doubt that Microsoft, like other companies, needs to do more with less in this economic downturn. But creating a culture focused around efficiency would be one of the worst responses to this environment.

So, as I said, hopefully Ballmer misspoke. If not, I anticipate a very difficult time for Microsoft as it struggles to retain employees (who get burned out) and customers (who want more than efficiency). And we can say goodbye to any innovation in Redmond. That’s just not efficient.

My suggestion to Ballmer: Redirect towards a customer-centric culture.

The bottom line: Efficiency may be a good goal, but it’s a terrible culture.

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I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey.

Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum.

My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers.

I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

7 thoughts on “Will An Efficient Culture Destroy Microsoft?”

  1. Hmmmm. I guess it depends on how you define efficiency.

    While I did not read the full article it sounds like you’re focusing on a tighter definition of efficiency than Mr. Ballmer may have intended. My read of your posting has you interpreting his response at more of an “individual” level vs a “corporation wide” level.

    Innovation is a great example. If MSFT is spending $10B in R&D and not getting a decent financial return then it has to be more efficient in how it invests in R&D. To improve the monetization of R&D could require improving customer insight since a lack of it is causing them to be inefficient. Thus his focus on efficiency (it does not mean they do/don’t lack customer focus).

    Also – if you have an organization where customer focus is deeply ingrained in their product development processes it may NOT require improvment. For example If I take a survey and find that most people at an audit firm are NOT focused on ethics some would argue it may be cause for concern – I would argue that they probably screen so tightly for this (since any mistake could take down the company) that it’s already deeply embedded in their culture and thus does not require ADDITIONAL focus.

    Similarly, employee “burnout” as you mention it is most often not a function of efficiency (I think you’re confusing efficiency with effort here) but more often frustration.

    I do like your blog though so keep the posts coming!

  2. The correct word is effective, not efficient. You can be very efficient at building concrete life jackets but they wouldnt sell well (the Mob could be a target market though). An effective company on the other hand produces items that please all the stake holders.

  3. Hi Andy and Douglas: Thanks for commenting.

    I think that Ballmer was talking about efficiency (getting things done with the least amount of resources) as opposed to effectiveness (getting the right things done). While efficiency, to some extent, should be an objective of most organizations, it is quite different to raise it to the level of the primary thing you want to embed in your culture.

    Culture remains a critically under-managed asset within companies. That’s why in my eBook “The 6 New Management Imperatives: Leadership Skills For A Radically Changed Business Environment,” the first item on the list is: “Invest in culture as a corporate asset.”

    I wasn’t saying that efficiency was the sole or primary reason for employee burnout in large organizations. The point that I was trying to make was that if you try to make efficiency a cultural norm, then you will definitely cause a great deal of angst across Microsoft; enough to create an excessive amount of employee defections.

    And, if Microsoft believes itself to be customer-centric enough, then that would be great fodder for many more posts on my blog.

  4. Very observant, Bruce.
    Indeed, efficiency may be a current management priority, but hard-wiring it as the anchor of a culture would have far-reaching implications.
    However, efficiency (doing things with less) come in several flavors.

    In my change management work, I have seen culture assessments of many companies. Interestingly, a Fixation on Financial Results tends to correlate negatively with Customer Centricity (and with actually achieving financial results)! A higher degree of Nimbleness, on the other hand, correlates significantly with Customer Centricity. So does a stronger focus on systems and processes.

    If Ballmer wants to break the tanker into nimbler sub-organisms with well defined interfaces, Microsoft may end up more customer-centric. If it’s about squeezing cost out of the system, we all have seen Circuit City try that – and their customers respond.

  5. Hi Bruce and Arno,
    I think you are spot on here efficiency is absolutely about doing the same things with less resources (I am sure it cannot be interpreted any other way?). Unfortunately for Microsoft they need to do things differently (ie effectiveness), making their software more efficiently will not help them if their software is not what customers want. If Microsoft wants to be more efficient it will need to be careful it does not do it in a way that accelerates the shift to Google’s (and others) online cloud style software. Last time I checked Google is not so concerned about efficiency (with its 20% time) but with driving increased value to users….

    I think the key question Mr Ballmer should be asking is what cultural traits will lead to competitive advantage? In our research efficiency certainly does not come up on the list….

  6. Actually, Microsoft will be destoryed if it continues the way it functions imitating and forcing out competition by its sheer size. Steve Ballmer, is intent on destroying the company anyway. I have always believed that when a player stops trying to win and trying to make his opponent lose, there’s no hope for him. That’s exactly what microsoft has been doing. In the old days, when it copied netscape, made IE and then destroyed netscape by inundating pc’s with IE it got away with it. But today, with the net giving people for freedom and less monopolistic comtrol, such tactics are starting to fail. Its a well documented fact that Steve Ballmer shouted that Eric Shmidz was a wuss and that he would destroy Google, when one of his employeed decided to leave the company for Google. He’s been rolling out tons of money just to destory Google and Apple. Of course, MS is finished!

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