Without overtime, a company can still become the world's largest.

Article | Huashang Taolue

With such "lazy" employees, how come Microsoft is still so wealthy and able to lead innovation? This doesn't make sense!

【1】

In 2008, Zhang Yiming worked as a manager at KuXun, with 40 employees under him, making him feel a management bottleneck. So he crossed mountains and seas to become a Microsoft employee.

Zhang Yiming originally intended to learn from the management of a large company, but he chose to leave after only half a year. Describing his time at Microsoft, he used two words: boring.

"Half a day of work, half a day of reading, and the work wasn't very challenging," said Zhang Yiming.

Microsoft's work isn't just boring for people like Zhang Yiming, who aspire to achieve great things.

A friend once said, "The team I just joined at Microsoft was too idle. The team leader was hardly ever seen, and when he occasionally came, he was always talking about skiing and other entertainment."

Later, this friend transferred to another team, citing the idleness of the job as affecting personal career development. While another busier workgroup operates like this: working from 10 am to 5 pm, a seven-hour workday, and earning the highest hourly wage in the area.

▲Image source: Internet

In the IT industry, Microsoft, Intel, and EMC are known as the "three nursing homes" for their leisurely work and "lazy" employees.

In 2020, Microsoft Japan announced a four-day workweek with three days off, collectively initiating a "three-day rest system." This week, LinkedIn, a subsidiary of Microsoft, announced a week of paid leave for all employees, not a statutory holiday, and not to avoid labor regulations, but simply for the sake of a good mood.

Microsoft also allows some employees to work remotely at home regularly, not exceeding 50% of their weekly work hours. With manager approval, they can even work remotely permanently. Microsoft will pay for the home office expenses of permanently remote employees. If they want to return to the office after working from home for a long time, Microsoft has readily available temporary office space.

▲Microsoft's hardware lab in Redmond, Washington, USA, allows remote work

However, despite being "lazy," Microsoft has achieved amazing results.

Microsoft's current market capitalization is 1.93 trillion US dollars, equivalent to three Alibabas (661.8 billion US dollars) and five ByteDances (400 billion US dollars). With a 5% increase, this tech giant may join Apple in the 2 trillion US dollar market capitalization club.

In fact, on February 11, 2020, Microsoft briefly surpassed Apple to become the world's most valuable tech company.

Microsoft has the highest market share in traditional operating systems and office software, both above 97%; its innovative businesses in cloud computing, AR, and gaming are also continuously leading.

In cloud computing, 95% of Fortune 500 companies use Microsoft's Azure intelligent cloud services.

In AR, Microsoft recently secured a 22 billion US dollar order. According to an IDC report, global AR market-related spending is expected to reach a compound annual growth rate of 54% over the 5-year forecast period from 2020 to 2024, exceeding 70 billion US dollars.

In gaming, Microsoft is still one of the world's top three console gaming brands, with its Xbox console market share approaching one-third, reaching 26%; PC gaming is even more dominant.

In March 2020, Microsoft acquired Zenimax Media, the parent company of renowned game giant Bethesda Softworks. Bethesda owns several globally renowned 3A masterpieces such as "The Elder Scrolls," "Fallout," and "Dishonored," which have a significant impact on the gaming industry. This acquisition caused industry shock and even attracted joint scrutiny from the US Securities and Exchange Commission and the European Union.

▲Microsoft exclusive games

This begs the question: How can Microsoft, which is so "lazy," still be so successful and competitive? And even lead innovation?

【2】

Microsoft has not always been a "nice guy" in terms of corporate governance, with stories of scolding employees and recording license plates to prevent early departures.

In its early entrepreneurial stage, Microsoft was not friendly to employees. Employees not only had to work intensely but also faced the dilemma of being personally insulted anytime, anywhere; during its mid-growth stage, Microsoft encountered multiple antitrust investigations, failed to enter the internet market, and faced significant performance pressure, leading to even stricter demands on employees; in its later business transformation stage, Microsoft not only spread negative advertisements about competitors but also made headlines by throwing its own employees' phones.

In an interview on the BBC program "Desert Island Discs," Bill Gates admitted that in the early days of Microsoft's establishment, he was "very passionate about work," which was unfortunate for his colleagues.

In 1975, when Microsoft was just founded, the company was still in its infancy, with only a handful of employees.

To improve efficiency, Bill Gates not only worked day and night, lived and ate at the company, and didn't change his clothes for weeks, but also imposed his nearly疯狂 work habits on employees. For a period of time, Bill Gates even relied on recording employee license plates to control employees' work hours and prevent tardiness or early departures.

"I know everyone's license plate number, so just by looking at the parking lot, I can tell when employees arrive and leave," said Bill Gates.

▲In the documentary "Decoding Bill Gates," it is mentioned that despite being busy, he still found time for two hobbies: street racing and striptease

Bill Gates was not human when it came to work, but in his view, one of his clients was even more inhumane, unbearable even for a workaholic. That person was none other than the later famous Apple founder, Steve Jobs.

At that time, Apple 2 needed a set of office software, and Bill Gates worked day and night to write the earliest Word, Excel, and other office software for it, but often encountered Steve Jobs' frantic urging.

Gates' evaluation of Jobs was that he was "very passionate about work" and "demanding of me."

When a workaholic meets someone who doesn't care about their life for work, especially when both are founders of tech companies, their employees suffer.

According to "Silicon Valley Legends," Jobs treated his employees harshly in the early days and even cheated his co-founder Wozniak out of some stocks.

Bill Gates participated in product reviews, taking pleasure in scolding people, and employees even used the number of times he said "fxxk" as a basis for evaluating whether their product design would pass smoothly.

Microsoft engineer Polsky once wrote about Bill Gates in his blog:

"He didn't really want to review your design; he just wanted to make sure you had control over it. According to his consistent standards, he would ask increasingly difficult questions until you admitted you didn't know, and then he could scold you for being unprepared. What would happen if you could answer the most difficult question he asked? No one really knows. Because no one has ever done it."

Bill Gates' scolding was equal-opportunity, not only directed at employees but also at co-founder Steve Ballmer. In multiple work emails exposed by the media, the dialogue between Bill Gates and Ballmer can be described as "fierce."

Under the influence of the scolding culture, especially after Ballmer took over as Microsoft's CEO, he also became hysterical.

In September 2009 in Seattle, with dry weather and easily ignited fires, Microsoft was experiencing failure in the Windows Vista upgrade, pressure from Google and Apple's mobile operating systems on Windows Mobile, and even the music player Zune selling poorly compared to iPod. Even more troubling was that Microsoft, envious of Apple's iPhone, released two generations of multimedia phones, Kin1 and Kin2, within a year, selling a ridiculous total of...500 units.

On September 14th of that year, Ballmer threw an employee's phone during an internal meeting at Microsoft.

At the time, Ballmer just entered the venue, as lively as usual. But when he saw someone taking photos with an iPhone, Ballmer rushed over, grabbed the iPhone, started mocking it, then threw it on the ground and stomped on it.

Ballmer has also thrown chairs at employees and even yelled at a senior executive who jumped ship to Google: "I'm going to bury Google CEO Eric Schmidt alive! I'm going to eliminate Google!"

The aggressive culture also extended to Microsoft employees' professional habits, to the extent that in the Windows 10 Dev Build 21313 version upgrade, an engineer wrote on the update page: "Configuring updates, please don't TM turn off the computer."

Today, when Bill Gates has become a kindly old man, he has begun to reflect on his relationship with employees:

"I have to remind myself not to demand employees work hard with my standards anymore."

【3】

One generation plants trees, and the next generation enjoys the shade. Microsoft's 50-year history, from a corporate governance disaster to the current "professional nursing home," is more of a necessity rather than Microsoft's active choice to benefit employees.

According to historian Thomas McCraw's research, from 1897 to 1904, 4,227 American companies merged into 257. By 1904, about 318 trusts controlled 2/5 of the nation's manufacturing assets. Since then, the United States has experienced three antitrust waves, each of which has promoted the improvement of employee welfare and corporate governance levels, while also promoting new technological progress.

During the first antitrust wave in 1890, the United States enacted the Sherman Antitrust Act, leading to the dismantling of trusts such as Rockefeller and the Morgan family, allowing new companies such as Ford and Chevrolet to develop, and the implementation of systems such as the "eight-hour workday."

In the second antitrust wave in 1970, telecom giants such as IBM and AT&T were punished and almost dismantled. These two companies released their monopoly technologies to the market and corrected malicious competition and bundled sales practices. Technological open-source enabled the development of companies such as Microsoft, Intel, and HP, and improved phenomena such as overtime and overwork in the telecommunications industry. Systems such as flat management and flexible working hours flourished with the development of Silicon Valley.

In 1998, Microsoft, the dragon slayer, grew into a dragon itself, using its operating system monopoly to meddle in the browser market. It wasn't until the release of Google's Chrome browser in 2008 that IE's decade-long monopoly came to an end. During these ten years, the early internet advantages of the United States were exhausted, and internet companies in China, India, South Korea, and other countries flourished, with the rise of Facebook, Amazon, and others.

Microsoft, which lost its monopoly advantage, found that the method of squeezing employees to increase scale and gain monopoly profits no longer worked. Meanwhile, relatively lenient internet companies like Facebook were aggressively poaching its talent. The method was straightforward: higher salaries, lower working hours, and more flexible employment systems.

Silicon Valley has entered a virtuous cycle in terms of employee benefits: talent is limited, but business expansion is unlimited. To attract talent, companies began to spare no effort in improving employee welfare.

For example, Google built dedicated bike lanes for employees; Facebook expanded maternity leave, with male employees also receiving four months of leave; and Apple provided up to $20,000 in egg freezing fees for female employees.

Microsoft has nothing more than money, so in the face of competition from internet companies for employee welfare, Microsoft defeated Silicon Valley tech companies' market capitalization with its "money power."

In the final analysis, Microsoft's improvement in employee welfare and corporate governance levels is the result of both internal and external factors.

On the one hand, Microsoft's traditional business has been shackled by antitrust measures, making it difficult to make further breakthroughs, and continuing to squeeze employees has lost its meaning. At the same time, Microsoft's new growth points are in innovative areas such as cloud computing, AR, and gaming, where improving efficiency and developing creativity are more effective than人海战术 and overtime madness in enhancing productivity.

On the other hand, over the past decade, traditional tech companies have been impacted by new internet companies. Microsoft needs to attract talent through employee welfare; developed markets like Europe, the United States, and Japan have severe issues with declining birth rates, lacking demographic and engineering dividends, which objectively increases the bargaining power of employees and companies due to a lack of available talent.

In addition, due to stringent US labor laws such as the Labor Law and Employment Act, large companies like Microsoft face huge labor litigation compensation. Countless labor rights lawyers seek astronomical labor compensation through labor disputes; the union system is deeply rooted in the United States, and unions will even provide legal aid to workers for free, using it to demand mediation fees from companies.

【4】

Both Silicon Valley companies and domestic companies are inevitably falling into the disease of large companies:

Endless meetings and PPT summaries that don't have much meaning, layers of approvals that seem strict but actually reduce efficiency, employees seem to be working overtime but are actually slacking off under pressure.

This disease is incurable, making companies bloated and difficult to adapt to market changes. Silicon Valley has invented various management tools such as KPI (Key Performance Indicators), OKR (Objectives and Key Results), agile development, and garage programs, but with little effect.

Microsoft and IBM are no exception. When their scale reaches a certain level, they develop the disease of large companies, with departments operating independently, company politics drowning out customer voices, and losing agility. Compared to emerging companies, the gap is easily visible.

IBM's solution was to lay off employees, dismantle businesses, and control the company's size within a certain range, reducing hierarchies and making business more flexible. Microsoft chose to face it directly. Around 2011, the current CEO, Satya Nadella, started reforms from the technical layer with the least resistance, eventually carrying out comprehensive reforms in corporate culture and governance.

The most successful part of Microsoft under Nadella's governance is breaking down departmental barriers and cliques without negating the original departmental system.

According to Coase's theory, when an organization is large enough, there is essentially a "boundary of the firm" between each department. This is a sociological phenomenon that exists in reality and cannot be changed by human will.

Microsoft actually condones departmental barriers and factions because they cannot be eliminated. Even Bill Gates said, "As the company grows to a certain size, I have to relax those standards."

Microsoft's strategy is "the company serves employee growth": if engineers want to be cool, create conditions for them to be cool; if finding people by department is too cumbersome, find people by specific functions, with each person responsible for their own business rather than the department head.

Microsoft has not actually changed the traditional departmental hierarchy system but has empowered bottom-level employees, making it easier to achieve goals and improving efficiency at the company level.

For startup companies, employees are like tightly wound springs, and the company needs them to go all out to win the market; but for large companies, treating employees like springs like startup companies and pulling them too tightly will eventually prevent them from bouncing back.