Dear Ray Ozzie
(November 25, 2008) Ray Ozzie is the Chief Software Architect at Microsoft. It’s a role and title directly passed down from Bill Gates. Ozzie is a software wonder-child. The current Wired magazine features a really solid article on Ozzie’s desire to restore entrepreneurial attitudes in the mammoth company. The article is by the other Steven Levy.
When your business is successful, there are only two variables that really matter: growth and decay. Sustained growth creates pressures on the system that continuously energize decision making. Growth ensures that the average tenure (and often, the average age) of the workforce stays low. Lots of new people coming in lots of people going out.
In high growth environments, there is little room for precedent or planning. Recruiting and talent acquisition get optimized for speed. The long term consequences of decision making are nearly impossible to see when the growth requirements are relentless.
When the growth is over, the organization tends to be an aging workforce with lots of precedent and lots of “This is the way we do it around here.” The company ceases to be attractive as a source of professional oportunity because average tenure is high. New employees learn quickly that the way to the top involves waiting for your boss to die or get promoted.
The American metals industry is an interesting worst case example (the auto industry runs a close second).
In the Metals industry, the average employee age is in the mid fifties. Often, the youngest person in the company is in their late 30s. New employees who join through college recruiting programs quickly discover that the difference between their age (25) and their boss’ age (50) is a very long time to wait for increased responsibility and a real promotion.
So, what do you do when you have a stagnating company and want to restore it to vibrance?
You can get quick results with Skunk Works style operations and Ozzie is doing that. Building intraprenurial operations is a stopgap measure, however. There are no examples of companies that restored their early vibrance with Skunk Works. It’s a work around.
Over the long haul, it’s a question of whether you can manage the overall workforce into the right mindset. Admonitions about performance (no matter how persuasive or how loud) play to deaf ears when tenure is rewarded. Some of the necessary spirit is structural.
Population Distribution Diagrams can help identify workforce problems, diagnose productivity disorders and model the solutions. There are significant policy adjustments required when you want your battleship to be as nimble as a small speedboat.
For instance, retention is not a single attribute. To manage agility, one wants differing levels of retention and attrition in differing areas / age bands / geographies. A clear picture of the desired demographic shape of the operation is essential. You need a good theory about what the organizational shape of agility looks like.
To return to the metals industry example, there are only two ways to restore vitality in those companies: real organic growth (acquisitions won’t work) or creation of opportunity through the elimination of veterans. You either grow or eliminate real organizational assets to pave the way for opportunity. In the end, a lower average tenure is the key to vibrance.
