Windows To The World

What does Bill Gates know that the rest of us don't? Find out from one entrepreneur in this exclusive excerpt from All I Really Need to Know in Business I Learned at Microsoft.
Magazine Contributor
10 min read

This story appears in the June 1998 issue of Entrepreneur. Subscribe »

Say what you will about Microsoft, but it's the best training ground for anyone interested in business--any business. Experience that might take years to gain elsewhere comes in bursts of just a few weeks at Microsoft. The place is intense, the market changes constantly, and the growth is phenomenal. The things I learned about doing my job--being a manager, running a business and keeping my career on track--can be applied by anyone in any field. So no matter what industry you're in, try these lessons out. See what happens.

Eat Your Own Dog Good, But Don't Believe Your Own Press Releases.

My summer job at age 16 was selling Godiva chocolates in the local mall. My manager there told me, "Don't just read the descriptions on the brochure; eat every kind of candy we're selling so you can describe and recommend them to customers." I happily complied. A variation of that principle is used at Microsoft. It's not quite as delightful as taste-testing truffles but serves a similar purpose.

In what is called "Eating your own dog food," Microsoft employees use test versions of all the products on a daily basis long before they come out. Windows 95 marketers used the new operating system every day for months before it was finally ready for market. Teams working on everything from Word, the word processor, to the Encarta CD-ROM encyclopedia do the same thing.

Eating your own dog food is not always pleasant. When Microsoft rolled out its new e-mail system to tens of thousands of employees, there were delays, computer crashes, lost mail and lost productivity. In one glitch, the computer e-mail screen would freeze up for 45 seconds and then go back to normal.

"Eat your own dog food, but don't believe your own press releases" means use the product for yourself, rather than read all about its great features in a press release. See what it's like to be a customer, and you can empathize with them, understand their needs and frustrations. Microsofties use this experience to know the product they're developing, testing or selling inside and out.

Examine Your Mistakes

Microsofties relentlessly study their underdog products, failed marketing programs and missed forecasts. This is not to assign blame or prove why it was someone else's fault. Many of the company's best lessons have come from failures. Microsofties figure as long as they lost all that money, mind share or market share, they may as well learn something from it.

A Microsoft manager returned from a trade show and joyously sent out a piece of e-mail to his team, announcing their product had won nine out of 10 possible awards. Within a day, he received 40 e-mails back asking which award they had not won, and why. Such is the intensity of Microsoft's focus.

After each new software product ships, a "postmortem" is held. From the Latin words meaning "after death," a postmortem analyzes what went wrong and what went well during the life of a project. People are interviewed, reports written, actions and decisions analyzed, and the results are published so any lessons learned can be disseminated throughout the company. The same is done informally with marketing programs as results and measurements are available. And although these reports show the warts of the team, the product and the process, they are shared.

Let People Fail

Personal mistakes are also more likely to be examined than punished. Microsoft vice president Jon DeVaan's words are echoed throughout the company: "If you fire the person who failed, you're throwing away the value of the experience."

When the product manager of Microsoft's spreadsheet software went to Bill Gates in 1984 and told him there was a major bug in the product and it would have to be recalled from retailers, Bill told him, "Well, you came in to work today and lost $250,000. Tomorrow you'll hope to do better." Today, that product manager, Jeff Raikes, is a member of Microsoft Office of the President.

There's a companywide commitment to accepting mistakes as part of the process because so many new areas are being explored. Allowing people to fail with impunity (on the right occasions) paves the way for those people to take risks again in the future. And the rest of the company, watching from the sidelines, will feel emboldened as well. They'll be more free with their ideas. They won't shy away from a project that has a chance of going under. The freedom to fail helps move the company forward.

The saying "Whenever you screw up, you get promoted" has been known to come up laughingly at Microsoft meetings.

Let Your Employees Hear Your Customers

You can imagine or guess what your customers think of this or that product or service. But there's no replacement for asking them directly.

Here are a handful of the ways Microsofties listen to customers:

  • Most marketing managers are required to spend time on the Product Support phone lines, listening to technicians trying to solve customers' software problems.
  • Letters mailed to Bill Gates concerning a particular product make their way from Bill's office to the employee responsible for that product, and a response to the customer is usually expected.
  • As he built Microsoft's new online service, the vice president in charge would sift through the thousands of e-mails he received from users and forward a variety of kudos and complaints on to his team.
  • Most new products go through a test where volunteers using the software are watched through a one-way mirror by everyone from programmers to marketers to psychologists who ask "How does that make you feel?"

Listening means including business partners, too. When an executive at CompUSA, a major seller of Microsoft software, commented in a meeting, "I don't know who would make that decision at Microsoft, but I know it would take a long time," the head of the Microsoft sales force reorganized his 1,000 people into specialized units, each with a clear focus and decision-making power.

Every Process Can Be Improved

Whether you're streamlining decision-making, gathering customer feedback, developing new products, or just going about the things you do on a daily basis, look for ways to make things easier and automatic.

At Microsoft, one of the dull low-level tasks involved in creating software is to do "the daily build." The person doing the daily build takes all the different "code" (written programs) from the programmers and puts it on one computer, making sure it all works together. For years, this was performed by an entry-level person and regarded as grunt work. One manager changed that and, in doing so, made the process more efficient.

This manager gave the daily-build responsibilities to the people writing the code. Each day all the programmers would give their code to one "buildmeister," who put it all together. If the code didn't work together, the person whose code was found to be the culprit then became the buildmeister as a punishment, until someone else's code screwed up the system. The benefits of this were:

  • No one wanted to be the buildmeister, so there was extra incentive to hand in quality code that didn't break the system.
  • The unpleasant task was shared by everyone in the group.
  • Higher-level people were doing the task. They wanted to spend as little time on it as possible, so when their turn came, they tried to think of ways to automate the task of buildmeister and did so successfully.

Stay Small

At their best, Microsoft's business units are run to think like small entrepreneurial shops but spend big marketing and research-and-development budgets. Employees who feel they have ownership and decision-making capabilities are more likely to do their best than those who feel like cogs in the bureaucracy.

Despite the fact that Microsoft has grown tremendously, most Microsoft teams aren't any larger than they ever were. They just keep getting broken up into smaller and smaller specialties. Instead of a single team focused on the new Excel software, there are a number of "feature teams" that each focus on a certain area of the product. Together they all still strive for the same thing--the best software possible. However, the small teams' size lets their members feel as if they own a problem and can strive to solve it. They can see and feel their impact on the larger project.

Act Like A Leader

A saying you'll hear a lot at Microsoft is "Take the high road." It means act like a leader. Don't bash the competition. Stay humble. Avoid being cocky. You can still get your message across, but customers, press people and even the competition will respect you more if you take the high road.

An example of taking the high road is the ad run for Microsoft's Excel spreadsheet in 1990. It stated, "Nine out of 10 Excel users are very satisfied. What are we doing wrong?" The ad included a form to fill out and send to Microsoft with product suggestions. Excel got their point across, that users were extremely happy with the product, but it did it in a way that focused on customers and making even more improvements, rather than bragging.

When Windows 95 shipped, Apple ran expensive ads in The Wall Street Journal and on the sides of city buses that read, "C:ongratultns.win95." Folks well-versed in the software industry knew Apple was trying to make fun of the fact that Windows still used complicated commands and file names. However, most of America did not understand the subtle slam by rival Apple. They just saw one more group congratulating Microsoft on a new product, and Microsoft saw some free advertising.

Taking the high road also includes your personal actions. If you're at an industry conference or on a panel of speakers, be gracious when asked about the competition. It's also important to "go meet your competitors," group vice president Jeff Raikes advises. "Stop by their booth at the trade show. Get to know them, and let them see you're a regular person." They'll be less likely to make deprecating comments if they've got a friendly face associated with your company. And you may even discover areas where you can cooperate.

Make Big Bets

Put your top minds, money and efforts behind the projects critical to the business. Focus on doing those few things well. Scattering your efforts on a bunch of smaller efforts may not leave any one of them with enough resources and momentum to really succeed.

In the early 1990s, Microsoft focused millions of dollars and some of its most talented programmers on the creation of Word and Excel for the Windows platform . . . before Windows was at all popular. Taking money and top programmers away from the current Word and Excel products was a major risk. At that time, WordPerfect and Lotus dominated their respective huge markets. Betting on a new operating system would leave Microsoft even further behind in those critical businesses if the new system did poorly. "If Windows had failed, there'd be no Microsoft today," one manager posits. "That was a pretty big bet."

From All I Really Need to Know in Business I Learned at Microsoft by Julie Bick. Copyright© 1997 Julie Bick. Reprinted by permission of Pocket Books, a division of Simon & Schuster Inc.

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