Scott Berkun

How not to set goals: Steve Ballmer, a case study

Recently Steve Ballmer’s FY ‘09 Strategy email was leaked. Out of curiosity I read the thing – and it makes an excellent case study in goal setting (covered in Chp4 of Making things happen).

Is it any wonder things are slowing at Microsoft with goals like these?

Ballmer writes:

Therefore, my priorities are consistent with last year. In FY09 we must continue to:

1. Invest in the right opportunities;
2. Expand our presence with Windows, Office, and developers;
3. Drive end user excitement for our products;
4. Embrace software plus services; and
5. Focus on employee excellence.

These are the same goals Microsoft has had FOR A DECADE. It’d be impossible to know this was written in 2008 if the lead in sentence were removed. Consistency of leadership can be great, but be consistent in vision, not at the goal level.

Worse, #1 and #5 are wastes of goal space. A good goal makes decisions easier to make. How does it help any of Microsoft’s 80,000 employees for the CEO to say “Invest in the right opportunities”? As if there are hordes of managers running around trying to invest in the wrong ones? The #1 slot is the big gun, the first shot, the lead idea, and in this list it’s fired into the ground.

Here’s my take on the other 4 goals:

2. Expand our presence with Windows, Office, and developers;

Windows and Office have been market leaders for years. The big goal for ‘09 is to expand presence? That’s the secret to the future of Microsoft? Getting the last .005 of market share left? First off, I don’t believe Microsoft executives truly believe this is the future, but they really don’t know what else to say. It is still a two horse company unwilling to confess, even inside the company, that all its attempts for a third horse have been qualified failures (MSN, Interactive TV, Mobile, XBOX, etc.) If they’d do a postmortem on these efforts and educate the company and what executives have learned from these efforts, the company would get 20% smarter (yes it’s a made up number), instantly. Microsoft has a ridiculous amount of untapped experience since they hide their failures internally and never share their big, expensive lessons (Bob, MSN, Search, etc.). If every VP and middle manager were forced to write a postmortem and publish it internally, Microsoft would instantly become a dramatically smarter company.

3. Drive end user excitement for our products

This is weird. It doesn’t say make great products. Nor does it say have amazing levels of customer satisfaction. It says drive excitement. If ever there were grounds for calling Microsoft products over-marketed and under-designed on purpose, this is it. Excitement for a thing can be generated in different ways, and only some of those are beneficial in the long term. How about “Make great products that drive end use excitement” or “Earn customer love through making people’s lives better” or some statement that connects a good cause with a good effect? That would clarify the valuable kinds of excitement from the fluffy kinds.

4. Embrace software plus services

Microsoft started talking about software as a service back in 2005, and years earlier internally. It was a big campaign back then and it led to the launch of Windows Update and similar services across the company. So what does it mean in 2008 to embrace software plus services? I don’t know. Haven’t they mostly been embraced already? And besides, an embrace isn’t the best verb to use in a goal. What effect do we want the embracing to have? That’d be a better goal. Any idiot can embrace something (a light post, a stuffed animal, etc.) but that’s not as impressive as doing something meaningful with it.

5. Focus on employee excellence.

Like Goal #1, this is a waste of goal space. Is there anyone actively focusing on employee incompetence? This goal, as written, suggests there is. And the verb, to focus, is not progressive. What if I’m already focused, should I be focusing more? A goal should be a horizon to chase. Words like improve, increase, grow, and develop are all stronger verbs.

If I were Ballmer’s editor, here’s the revision I’d offer of what I think is his message:

1. Make smart investments and evangelize the lessons we learn
2. Create great products that naturally generate end user excitement
3. Combine software and services to provide great customer experiences

Three goals. No fluff. Strong verbs. Clearer direction.

Caveats

• I’m not sure the above would be my leadership message if I were CEO. But it is an improved version of what i think he was trying to communicate in the goals.
• $60 billion in revenue in FY08 is a ridiculous level of success by any metric. Hard to say how long this will last since it’s largely driven by the two horses (Office, Windows), but while it does you can’t pick too hard on Microsoft as a business.
• Writing goals as a CEO for 80,000 company is quite different than writing goals for a 50 person software development project.