Vanity Fair’s August 2012 issue will feature the devastating management practices at Microsoft called Stack Ranking, which is a practice of labeling individual’s performance by declaring a certain percentage of employees as top, good, average, and poor performers no matter how stellar the team is. According to Vanity Fair, this management practice has been a major impediment to Microsoft’s ability to innovate. Had Microsoft chose a different path like Lean Six Sigma, they would have been able to spur innovation as opposed to hindering it. Here are the differences Lean Six Sigma could have made:
Better Cultivate a Learning Organization
The stack ranking concept is self defeating in many ways. First, employees are ranked (e.g. over- or under- performers) within a business unit even if all of them demonstrate superior or inferior performance and contributions. Particularly for the superior team, this could really dampen moral of the stellar employees and lead to competitions within the team, as opposed to competing with other companies, which is contrary to what a company would want.
Secondly, rank stacking appears to promote more on individual performance as opposed to team performance as well as performance that contributes to Microsoft’s strategic objectives. This can result in individuals placing greater emphasis on their own performance as opposed to the contribution his or her team makes to the organization.
Lean Six Sigma, or more specifically Lean, promotes the concept of continuous improvement and learning. Organizations use various Lean Six Sigma problem solving tools to continuously improve the performance of their processes. Employee across the process collaborate to improve the process on a continuous basis. Through this practice, employees learn about what innovation work and which that do not.
Alignment of Performance to Strategic Objectives
One of the success factors of a Lean Six Sigma deployment is strategic alignment, meaning that the activities and processes that employees use are aligned with the overall strategy of the organization. Had Microsoft implemented Lean Six Sigma and hence ensuring strategic alignment, then employees’ focus would shift from individual performance rating to company-wide objectives, e.g. innovation and market dominance.
I only provided a couple of ways in which Microsoft could have used lean Six Sigma to innovate new and transcending products as opposed to implementing things that hinder creativity and innovation.
I challenge you Microsoft to drop stack ranking and put in place Lean Six Sigma to increase innovation within its organization. Better yet go to our web site and register for our Lean Six Sigma Challenge.