Vanity Fair has an interesting look at the stagnation of Microsoft over the past decade. One of the primary culprits called out by author Kurt Eichenwald is the use of a system known as stack ranking.
When Jac Nasser became the CEO of +Ford Motor Company in 1999, he instituted the same policy their and it led to a huge brain drain that caused severe damage to the company for several years after his departure in 2001.
While modern business school practices are all about the numbers and trying to quantify everything, we've seen that numbers can be easily be manipulated to tell the story you want to tell. When dealing with people you need a more flexible approach that takes into account the way realy humans work.
While Nasser claimed to want to emulate tech companies like Dell to drive up the stock price of Ford, it happened at the expense of product. In the end he emulated the wrong company. While Nasser's reign at Ford came to early in the second rise of Apple to see the results he would have done better to emulate that company's commitment to product first.
Of course Apple is far from a perfect model. Steve Jobs' approach to dealing with other people also sucked and Apple's use of IP law to try to stop competition is deplorable. But it's having fundamentally good products that has made Apple succesful.
That's the approach that Alan Mulally and Derrick Kuzak took to reviving Ford. By eliminating all the premium brands that Ford acquired in the 1990s along with Mercury and then taking a global design approach to the core Ford brand vehicles, the automaker now has one of the strongest lineups in the business.
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Microsoft’s Downfall: Inside the Executive E-mails and Cannibalistic Culture That Felled a Tech Giant
“I see Microsoft as technology’s answer to Sears,” a former Microsoft marketing official tells Kurt Eichenwald in August V.F.’s story on the company’s backslide.
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Great perspective that often goes unnoticed in the march to MBA everything including your local garbage collection. With the conservative political media blitz it doesn't look to change much. Here's hoping there are more companies that recognize that managing for short term financial gain is secondary to Managing for success.
It's the product stupid! Or the service or whatever, if you can't keep your customers happy then business declines. Everyone forgets the customer is the primary stakeholder. You can have the happiest shareholders but you can't keep them happy if the customers go away and the employees are disenfranchised. You don't need an MBA to understand basic business relationships that lead to profitability.