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    What almost killed Microsoft — and what dentists should learn from it

    One of the biggest companies on the planet almost destroyed itself, but there's a lesson in its failure.

    If you study business at all, you’ve heard Microsoft stories. It’s one of the most successful companies on the planet. The founder is legendary, the product ubiquitous. Yet, five years ago, the company was in deep trouble. Not because of its product, but because of bad management and bad organizational design.

    Microsoft, like many companies, organizes its employees into teams. These team were evaluated with a method known as “Stack Ranking.” This rancid form of employee evaluation was popularized by Jack Welch, former CEO of GE.

    The basic premise of Stack Ranking is simple. You rank your employees based on a variety of factors until you’ve created a bell curve. There are a couple of people at the top, a couple people at the bottom and most of the people somewhere in the middle. No matter what, in every division, there were people walking around who’d been told that they were the worst employees at Microsoft.

    The rating system created a hyper-competitive environment where the employees were forced to compete against each other, rather than against their competitor. Steve Ballmer, the CEO at the time, boasted a 51 percent approval rating. Obviously, we know which side of the bell curve was voting for him.

    Related article: Is a bonus system right for your practice?

    It wasn’t just the rating system. Even the mission statement betrayed a loss of direction and a lack of focus. The original mission statement for the company was “A computer on every desk and in every home, running Microsoft software.” Short, to the point and goal focused.

    Microsoft buildingUnder Ballmer, it had become “Creating a family of devices and services for individuals and businesses that empower people around the globe, at home, at work and on the go for the activities they value most." Word salad, with no meaningful goals. What does it mean to empower people? Which devices and services? The new statement could work as well for Toys R Us as for Microsoft.

    The market sensed the problem. The company had been trading flat for 8 years and it was no secret they needed a change. At this time, Microsoft (MSFT) was trading for roughly $26.00 dollars a share.

    So, what did they do? And how can you apply it to your practice?

    Click on page 2 to find out...

    Chris Moriarity, MA, FA, MBA
    Seen on HGTV and with Shark Tank's Damon John, Mr. Moriarity, MA, FA, MBA (2020) spent years working with attorneys and physicians ...

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