Culture and The Leaked Memo You'll Never See

[Warning - could be viewed as a Rick 36,000ft Rant]

I'm sure you've read about the Microsoft screw up with respect to severance payments to former employees. Some got overpaid, some under. There was a firestorm of bad press over Microsoft asking for some repayments and then, duh, in the end Microsoft relents and let's them keep the rounding errors. All this is no surprise to anyone with a pulse who has worked in a company with a headcount over 2.  No surprise they would goof it up, send out letters, take PR hits and then give it up. 

In fact there were only two things that actually surprised me.  First, that any former employee lost a second of sleep of a possible repayment. They had to know the resulting PR shit storm was going to them pocket the cash. And I'm in no way trivializing the impact of this insensitivity dumped on them by Microsoft.  Secondly, that one of the more mainstream blogs didn't start a public pool on letting people buy the exact time Microsoft would issue the press release letting people keep the money.

This was a text book, pay phreaking attention, case of how a company's culture starts at the top and will kill a company if the culture goes bad. Arrogance, smug insular multi-millionaires fiddling while Rome burns, political MBA animals, etc, etc, all builds up into a culture that creates these disasters.

HR software systems don't create people disasters, people do.

Up close and personal: There is a company down the street who had to lay off some people. They made the *EXACT* same mistake resulting in an overpayment to several people.  The accounting person caught it and went to the CEO.  The CEO said let it go, these people have enough problems in this environment.  Culture.

You can believe (I guarantee it) somebody in a cubicle up there in Redmond suggested to "let it go" because it was "a rounding error" and "we shouldn't throw salt in an open wound."  There is a reason for those quote marks. My guess is somebody is likely to post a comment on Mini-Microsoft's blog about this. Hmmmmm....

Culture.

Here's the "leaked" memo you're not likely to see anytime soon:

---------------------

From: SteveB

To: LisaB  [Lisa Brummel, MSFT HR Chief]

Subject: are you kidding me!

ok, so let me see if i have this straight. we have a run of the mil accounting error probably because somebody innocently messed up some dates and it cascades into an unnecessary pr nightmare over less money than the travel budget to the ces show.  are you kidding me?  are you telling me we have a culture in your hr department that is so bureaucratic, uncaring, dripping in legal nonsense, and simply insensitive that nobody on your staff or your staff's staff could say let it go?  not one of your people had this synaptic activity? or is more likely that an employee did figure it out, did make the let it go suggestion, and your group of so-called hr management experts acted like a bunch of drones listening to some idiot lawyer about some 1 in a billion chance we might end up having some random other claims for some additional miniscule amount of cash instead of acting like humans.

how about we, via mini-microsoft, get a copy of the email that was no doubt created by one of your more caring people. you know, the one where they make the simple yet ultimately brilliant suggestion that we let it go.  let's find that person and promote them.  to your job.  i promise when you get overpaid on your severance, they will let you keep it.

this disaster was the result of a bunch of people who worried more about bureaucratic crap versus the human beings and the lives we disrupted. if you can't reset the culture inside the hr department, it really might be time for a change. 

and if you think you are getting these let's not care messages from me lisa, you are wrong and we are severely disconnected.  we need to speak immediately.

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Obviously, I'm being melodramatic and somewhat bombastic to make a really important point.  It's about Culture and Tone when times get tough.  I believe somebody should be severely reprimanded over this issue and let THAT memo leak. Should they fire Lisa Brummel?  Somebody needs to take a hit. I'd settle for an offer of resignation and some people re-assignments. There was an HR lawyer involved and, for sure, this got attention inside HR management.  No "clerk" just pressed the button. 

I doubt the chief legal officer and for sure the CEO had a clue what was about to happen which is the precise reason why having the right tone/culture inside a company is so important.

Some lessons out of this for your start-up:

You set tone. I repeat, you set tone.

If you are a jerk, it will catch with you and, over time, you will be hiring and cause to be hired jerks.  Jerks is the placeholder for all of those political animals, etc, etc, that infest companies as they grow. You must be vigilant about this.  My best advice: Management by walking around.  Talk to the rank and file. If they appear skittish, don't want to talk, stutter a lot, you've got a problem.  In the companies that I manage for my our fund, if I can't walk into the company and plop down with anyone for a chat without management phreaking out, there's a problem.  Oversimplified, yes, yes, don't flame me.  My point is YOU have to be able to do that. If you drop in on some coder in the back working on some piece of something and chat it up, does the manage coming running over or ignore you?  Yeah, it does matter and it will set tone.

It is a reasonable bet that somebody in HR who thought this was wrong, insensitive, and a probable PR disaster did not send an email to the HR leader, the CEO, etc, with an are you nuts? For $125k? email.  That's a shame but that's what happens when the culture goes south.

Make a mistake: own it.

Here's an excerpt of the MSFT announcement when the light finally came on:

"Last week, 25 former Microsoft employees were informed that they were overpaid as a part of their severance payments from the company. This was a mistake on our part. We should have handled this situation in a more thoughtful manner. We are reaching out to those impacted to relay that we will not seek any payment from those individuals."

My view? B+.  Once the world was effectively watching this soap opera, it's time to crank up the humans, not the PR machine.  Lisa Brummel, personally calling each person, nice move, but let's take some responsibility for letting the situation develop in the first place.  How about Microsoft's general management group ignoring office politics to have a collective hissy fit resulting in the CEO stepping up to the microphone and eating a mea culpa sandwich. Reminding the HR department to always "err on the side of our team mates" or some such sends a much more important message that a press releases.  The traditional, just make it go away, reaction is understandable but when these things happen, you can use them to try an make a point to the company about values, culture, etc.

Remember, this is not about a group of people making math errors. This is about the environment that reacts to the resulting mistakes.

What kind of environment (aka culture) do you want for your start-up?

[Note: A rant like this calls for a reminder disclaimer that I used to work for Microsoft so I'm either an unpaid shill or disgruntled ex-employee, your mileage may vary.]

Comments

[Iain]

The problem is that this cop-out of blaming the system and not taking personal responsibility is endemic.

We're seeing it in the credit crunch down south, where the bankers are still walking away with multi-million dollar 'bonuses'.

We're seeing it daily in the Dzienkanski inquiry, where everyone did their jobs and followed orders, but the man still died.

Just about the only person I can remember actually admitting he made a mistake and taking responsibility for it lately has been Barack Obama, but no one seems to be following his example.

I really don't know what the answer is. It's become too easy to wipe your hands, and blame "the system".

[Varun Mathur]

Hey Rick

I wonder what your take is on Steve Jobs in regard to your post. I think he has been widely reported in the media to be an egomaniac, someone who would shake his employees to the core, be insulting, etc etc. I saw the movie 'Pirates of Silicon Valley' and he was depicted similarly in that as well. At his headquarters in Cupertino, CA, there have been several pics taken of his convertible merc parked in the handicap parking spot. He just doesn't care.

Yet, a lot of folks love and admire him. He built great companies, ushered in various revolutions and has been a role model to many; but on personal characteristics as reported in the press, one can say he has been a 'jerk'. The tone in Apple has been pretty clear - its all about Steve.

It seems that being a jerk has no effect on the success of a startup, as Steve and Apple are good examples. Infact the lessons are opposite - a more congenial geek like Woz gets sidelined while a more aggressive Jobs takes the limelight.

Is there really any lesson for startups here then, and isn't it all about winning at the end of the day ? A lot of these folks who were widely regarded as 'bad' / 'jerks' while building their companies, like Bill Gates, have gone on to donate their wealth to great causes, while the folks being 'good/nice' in building Linux etc can only offer their wishes, and not concrete support. Isn't the bottomline the real metric then to judge someone/some company ?

[Daisy]

Love the rant, and agree wholeheartedly that culture is very important. Sometimes its very difficult to find those organizations more like the start-ups you invest in vs the Microsoft. It seems as organizations grow, the tendency to treat employees less like humans and more like things. Obviously, even in larger organizations, if you get a leader with the qualities/values, then it's less of an issue.

Daisy

[Kirsty]

Just about the only person I can remember actually admitting he made a mistake and taking responsibility for it lately has been Barack Obama, but no one seems to be following his example.

I really don't know what the answer is. It's become too easy to wipe your hands, and blame "the system".

[Martin Edic]

I'd pull the rant up to 50,000 feet and lay this directly on Ballmer's take no prisoners management style. The operative word is arrogance that leads to believing what you want to believe rather than acknowledging reality. This happens when management doesn't think through the human effects of any business decision.
As for Jobs, there is a fundamental difference: he is obsessed with the user experience. He may not be a role model vis a vis attitude but he is a champion of getting things right. At MS they are more concerned with proving they are right even when it is obvious they are not. Zune, Vista, disparaging early comments about iPhone, etc, etc,etc.

[Martin Edic]

By the way that Internet marketing comment is comment spam.