Culture is a powerful thing. It can make your company smart or stupid. Microsoft yesterday announced the layoff of 5000 people because it can’t find anything productive for them to do. It should be remembered Microsoft is not fighting for its life. It actually reported a profit of $4.17 billion. I am of the firm belief that the foundation of Corporate Social Responsibility is that competent, committed employees should not be fired while a company is profitable. It’s even more outrageous when Microsoft has tens of billions in cash languishing uninvested because they can’t think up new ways to grow. This is an immense failure of leadership.
At Microsoft, such failure is routine. Maybe it’s just me, but it seems like Microsoft had one major business innovation. It was creating a software monopoly with P.C. chipmakers and pre-loading their software on most P.C.s. It was brilliant bar-fisted marketing, but what technology have they created that we love? Early on they bought MS-DOS, a clumsy, clunky operating system that the P.C, would start on. Then Windows was a lousy rip-off of Apple’s graphical interface (inspired by Xerox—that’s another story). And that’s about it. Their attempts to be a cool portal with MSN can’t compete with Yahoo. Their search can’t compete with Google. And their Zune MP3 player hardly exists against the ipod.
And speaking of ipods, Apple made record profits in the 4th quarter of 2008 because consumers love their products. IBM is still growing profitably with their professional service business. Google keeps figuring out ways to make searching better and more profitable. Smart mobile devices are growing worldwide and all Steve Ballmer, CEO of Microsoft, can do is blame his shrinking profits on a collapse in P.C. demand because the global economy is shrinking. It’s like GM blaming their going-out-of-business sale on gas prices while Toyota becomes the number one carmaker in the world. It’s about product, baby. Always has been. Cool, in-demand products come from a culture of value innovation. But Microsoft’s culture seems to make their people stupid.
Microsoft is famous for recruiting really, really smart people. They also give generously to charities and are well-behaved corporate citizens. But their first Corporate Social Responsibility is to hold leaders accountable for their persistent inability to use their resources to create products and services that people value. Laying off 5000 people is reprehensible. This is a failure of leadership that cannot be blamed on a shrinking economy. In the world we currently live in we need leaders with moral imagination and cultures of enthusiastic innovation. We need to all pray for Steve Jobs recovery.