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Evaluating Gates via His Microsoft Failure

September 30, 2014

Billionaire Bill Gates has been buying his version of American public education for years now. His first major *reform* effort began in 2000 and involved chopping large urban high schools into smaller schools. It was his solution of choice for several years.  He began to reject the “small schools” idea as The Solution in 2006 after it had been found “less successful than hoped” according to the Seattle Times. (Documented in chapter 23 of A Chronicle of Echoes and also discussed in this post.)

For Gates, the small schools failure was an inconvenience and a disappointment. (He wanted to “scale” the results.) For the school districts left holding the bag, it was incredibly disruptive.

Gates actively advances a spectrum of so-called reforms that interest him, including grading teachers using student test scores (in order to dump the “ineffective” teachers), merit pay, increased class sizes, longer school day and year, data systems to “track progress,” charter school fondness, and, of course, “fewer, clearer, higher standards”–an idea Gates publicly advanced in November 2008, in the months following his decision to bankroll the Common Core State Standards (CCSS) because Council of Chief State School Officers (CCSSO) President Gene Wilhoit and CCSS “lead architect” David Coleman asked Gates to pay for it.

Interestingly, Gates notes the “need” for CCSS as a “standard” for grading teachers:

The first step in identifying effective teaching has to be setting fewer, clearer, higher standards that are aligned with the goal of graduating students from high school college-ready. You can’t compare teachers if they’re not pursuing a common standard.[Emphasis added.]

Must I write how stupid this idea is?

Teachers do pursue “common standards” in teaching students. It’s just that such “common standards” are often of a higher order that tends to defy quantification. Included among them are teaching and learning for the sheer joy of it and equipping students to make choices that might lead to a self-fulfillment that leads, in turn, to students becoming productive, engaged members of society.

Profit-grabbers like Pearson cannot test such lofty goals.

Nevertheless, billionaire boy Bill is only interested in that which might be quantified– but only as such lends support for his own preferences. Consider this statement from the same November 2008 speech linked above:

A good education means completing a postsecondary degree.

Gates did not complete a postsecondary degree. However, he has determined that this narrow view of “a good education” must apply to all others.

Gates continues in his speech by stating, “we are determined to follow the evidence.” On this point I agree. Let’s “follow the evidence.”

In fact, I would like to turn the reader’s attention to “following the evidence” on Gates himself.

You see, Gates does have a professional history, and it is about time for the American public to *evaluate* Gates’ purchased authority on All Matters Education based upon that history.

A fine text for such evaluation is this August 2012 Vanity Fair article by Kurt Eichenwald. The article is six pages long, and it details Gates’ deleterious decision making in regards to the technology company he founded (and from which his fortune was made), Microsoft.

Let us begin by considering that Microsoft’s heyday was between 1980 and 1999. It is not today. Microsoft reached its high point with the release of Windows 95 and rode that wave for a several years.

It was important for Microsoft to catch a new wave before the former wave subsided, and it was Bill Gates’ shortsightedness that missed the next wave.

Some of his developers came to him in 1998 with a prototype for the e-book.

Gates rejected the idea because it did not (dare I?) “plug in” to the “socket” of Windows.

Gates has tried to sell CCSS as “standardization leading to innovation” via his now-well-known (lame) analogy of CCSS as being the “socket” to which innovation might “plug in.”

He should know better. Instead of allowing Microsoft developers to be innovative and escape the “socket” of Windows and develop the e-book they wished, Gates forced their ingenuity into the smothering mold of Windows– and in a rush, at that. Gates destroyed their e-book idea by forcing the developers to rework it to “fit” Windows– which it could not do well at all.

The development team was also “refocused” to consider profits and losses ahead of innovative ideas.

Gates was no longer the innovator himself. He had become “profit driven,” and it turned out to be his company’s undoing.

No one remembers Microsoft for its e-book.

The Apple iPhone capitalized on the touch-screen technology Gates rejected in 1998; moreover, by 2012, the iPhone garnered more profits than all of Microsoft’s ventures combined.

Gates did not learn from his “status quo” choice of innovation-to-Windows-force-fit. He continued to employ management who (like him) became disconnected from the public’s emerging technology habits and who dismissed the observations of those close to the public– the ground-level developers. As a result, in “top-down-knows-best” fashion, management also rejected the idea of “continuous stream, brief messaging communications”– a precursor to Facebook.

Ouch. Big. Time.

So far we have the “socket” of standardization crippling Microsoft, and the “top-down” management mindset also crippling Microsoft, and Gates’ refocus from innovation to profits crippling Microsoft.

But there is another terrible issue looming: Gates, who knew he lacked the business sense to run a company, did not carefully evaluate the credentials and performance of the man he eventually put in charge of running the entire business of Microsoft: Steve Ballmer.

In short, Gates foolishly promoted Ballmer beyond his level of expertise.

Ballmer had been with Microsoft since 1980, and all seemed to go well for almost two decades.  Then, in late 1999, Microsoft profits began to drop, and instead of encouraging his developers to innovate, now-profit-distracted Gates placed his technology company in the hands of a man with a background not in technology but in finance.

In doing so, Gates soundly disproved the commonly-held corporate reformer idea that “talent” overrides expertise.

As it turns out, Ballmer has become known for openly displaying his ignorance regarding technological trends. He declared that Apple’s iPhone had “no chance” of getting “significant market share.”  He also called Google “a house of cards.”

Scores of “college and career ready” workers would not be sufficient to rescue Microsoft from the Ballmer leadership idiocy that Gates himself enabled.

No professed love for “free market forces” overcomes managerial stupidity.

When the going became tough, Gates did not lead. Not only that: Gates did not exercise sound judgment in choosing who would lead. And for well over a decade he has failed to (dare I?) hold Ballmer accountable.

Ballmer is not a developer.  He apparently does not appreciate the collaborative nature of the technology developers and instead imposes upon them a harsh evaluation system designed to force former collaborators into paralyzing competition.

Kill collaboration with out-of-touch, mandated competition.

Sound familiar?

Ballmer employed “stack ranking,” a so-called “evaluation” system that determined from the outset 10 percent of individuals would be rated “excellent” and 20 percent, rated “failing.”

Add to that the flaw of too many managers and a resulting bloated bureaucracy.  Corporate dysfunction a-la-mode.

Developers were not freely working together; they were watching out for Number One and preening for the managers who would rate them. Profits were sinking, and projects moved at such a bogged pace as to produce this farce:

Just as with e-books, opportunities for major product developments slipped away. Windows CE, an operating system distinct from Windows that was originally used for pocket devices like personal digital assistants, would ultimately be the foundation of the mobile operating system that would power Microsoft’s first smartphones. But despite the fact that Microsoft had the jump on its competitors with Windows CE, it still lost the race for the wildly successful smartphones.

“You look at the Windows Phone and you can’t help but wonder, How did Microsoft squander the lead they had with the Windows CE devices?” said [former Microsoft marketing manager] McCahill. “They had a great lead, they were years ahead. And they completely blew it. And they completely blew it because of the bureaucracy.”

The achingly slow processes at times bordered on the comical. Marc Turkel, a product manager, told me about an initiative he oversaw around 2010 that involved multiple groups. At the same time the new project began, workers were breaking ground for construction of a 12-story building that would occupy a square block; Turkel’s office window looked out on the construction site.

Turkel began negotiating with the different managers, then their supervisors, and then their supervisors as he tried to get the project finished. “It was amazing the amount of buyoff that was required,” he said. “It was something, without all that time we wasted, that should have taken six weeks at most.”

Finally, one day, Turkel was running another interminable meeting when he looked out the window. The building was finished. The project was not.

“I pointed to the building and said, ‘When we started this, that building didn’t exist,’ ” Turkel told me. “It was unbelievable.”

Where there is an oppressive, dysfunctional employee evaluation system, there is the inevitable  gaming of such a “system” by all involved. Here’s a bit about that “game”:

“The six-month reviews forced a lot of bad decision-making,” one software designer said. “People planned their days and their years around the review, rather than around products. You really had to focus on the six-month performance, rather than on doing what was right for the company.”

There was some room for bending the numbers a bit. Each team would be within a larger Microsoft group. The supervisors of the teams could have slightly more of their employees in the higher ranks so long as the full group met the required percentages. So, every six months, all of the supervisors in a single group met for a few days of horse trading.

On the first day, the supervisors—as many as 30—gather in a single conference room. Blinds are drawn; doors are closed. A grid containing possible rankings is put up—sometimes on a whiteboard, sometimes on a poster board tacked to the wall—and everyone breaks out Post-it notes. Names of team members are scribbled on the notes, then each manager takes a turn placing the slips of paper into the grid boxes. Usually, though, the numbers don’t work on the first go-round. That’s when the haggling begins.

“There are some pretty impassioned debates and the Post-it notes end up being shuffled around for days so that we can meet the bell curve,” said one Microsoft manager who has participated in a number of the sessions. “It doesn’t always work out well. I myself have had to give rankings to people that they didn’t deserve because of this forced curve.”

The best way to guarantee a higher ranking, executives said, is to keep in mind the realities of those behind-the-scenes debates—every employee has to impress not only his or her boss but bosses from other teams as well. And that means schmoozing and brown-nosing as many supervisors as possible.

Gates is attempting to drive American education into such a dysfunctional “evaluation” corner by clearly purposing CCSS as a teacher evaluation vehicle. The man has learned no lesson from such nonsense at his own company.

The high-stakes, top-down “evaluation” leads to organizational self-consumption. Ironically, Gates has the “research” to support such a fact, yet he blindly promotes such a system in the public schools he has never attended.

Gates could have directed Ballmer to stop. Instead, Ballmer continued stack-ranking for 14 years.

It is not as though Ballmer (and Gates) did not know of the devastating effect this forced competition was having upon Microsoft employees.

If it doesn’t work, draw it out– like CCSS.

Despite his intent to continue an evaluation system that was killing the very creativity necessary to nourish a thriving company, Ballmer’s Microsoft insisted upon having employees complete regular surveys. As Eichenwald writes in 2012, the “top” never seemed to listen:

Current and former executives said that, each year, they tried to explain to Microsoft’s top executives why the company was struggling in the quality of its innovation compared with Apple, Google, and other competitors.

The information was conveyed through employee surveys conducted every six months. Time and again, the message from the responses was the same: groups at Microsoft that are supposed to be working together aren’t, a symptom of the stack-ranking program. And in response the company did … nothing in particular.

The “research” was there, coming from the workers, just as CCSS resistance is coming from parents and teachers. Instead of listening, Gates merely regurgitates his CCSS support.

CCSS and other “reforms” are burying the American classroom in bureaucracy. Gates and other corporate pushers assume that some set percentage of teachers *should* be found ineffective. Creativity is being crushed. Privatization of the classroom has made profiteering into a god.

All of this is being done in the name of “competing in the global economy.”

Speaking of a “global economy”:

From April to June 2014, Apple sold 44 million iPhones.

Android sold 250 million phones that same quarter.

And the Microsoft Windows phone?


In the second quarter of 2014, Microsoft phones accounted for 2.5 percent of market share, or approximately 7.4 million phones.

A Lesson for Bill:

Windows “socket”/stacked ranking–> “innovation” choked–> “global competition” shut out.

CCSS “socket”/ teachers graded using student test scores–> “innovation” choked–> ??

Is there perhaps hope for Bill?

After 14 years of stack ranking, in November 2013, Microsoft announced it is dropping it in favor of a qualitative evaluation system.

You know, qualitative– as in the kind of evaluation system K12 education had before it was told schools were failing as a result of some need to purge “ineffective” teachers that surely were behind it all.

Microsoft CEO Steve Ballmer is also on his way out. But not without some schmooze to sugar-coat his impending exit:

The revamped system shows how Mr. Ballmer continues to reshape the company’s strategy and culture in his waning months at the helm. …

Lisa Brummel, Microsoft’s executive vice president of human resources… said the review system was overhauled in part to reflect an emphasis on teamwork in Mr. Ballmer’s new strategy….

Ballmer’s new strategy.” Right….

Interestingly, in July 2013, Ballmer “restructured” departments in order to foster “collaboration” and “communication,” but he had no plans to cut the stack ranking, In fact, he stated that Brummel (cited above) was the one to “take up” changes in the eval system. Yet she gives Ballmer credit in the above drippy ego fest.

android microsoft

Go ahead and write that Dear John letter on pastel paper. The message is the same.

Looks like Bill might have learned the inklings of a lesson, after all. In the Eichenwald article, Ballmer expected to stay at Microsoft until 2018. Bill might have had enough.

It only took 14 years.

Not the substance of an “effective” rating.

Far too many years of both qualitatively and quantitatively documented “ineffectiveness.”

Indeed, it is hard to know to what degree the Billster will apply his lesson, what with CCSS still serving as his current pet project and many K12 teachers still getting away with being employed.


Like my writing? Read my ed “reform” whistle blower, A Chronicle of Echoes: Who’s Who in the Implosion of American Public Education



  1. Laura H. Chapman permalink

    Remarkable account, again, and the parallels are terrific. The stack ranking and management by objectives system of Peter Drucker, 1954 lasted for about 20 years before the most innovative companies dropped it .The story is told in West, G. E. (1977). Bureaupathology and the failure of MBO. Human Resource Management, 16(2), 33-40. Why anyone buy into Gates’ opinions about education are beyond me, but he has certainly bought out a lot of people who ought to know better, among them everyone at USDE, the National Urban League, the people you have chronicled in your book.

  2. Socket 2.0 Me — Not❢

  3. Reblogged this on Lloyd Lofthouse and commented:
    Discover Mr. Destructo, Bill Gates, in all his failing glory and incompetence that’s now aimed at our democratically run public schools.

  4. The greatest irony is the one Mercedes has put forth here. The key phrase is “managerial stupidity.” All these struggles and failures with getting projects to work, the emotions, the attitudes, the LACK OF PROPER VALUES, are the product of a poor education – the wrong education.

    There is another dimension, and it still pertains to education – the creation of a corporate culture. IBM had to learn the hard way, but I think they have a better grip on their corporate culture than Microsoft does – imho.

  5. This kind of thinking is like the Ebola virus – easily spread by close contact and fatal.

    In Massachusetts, the state MCAS exams lead to the stack ranking of school and their categorization by Levels 1 (high) to 5. Naturally, more Level 4 and 5 schools are found in poor urban centers. Level 4 schools enter the death throes of turnaround status and Level 5 schools are declared “failed”. For the small number of schools which are able to escape from turnaround and survive to move to Level 3, there are always others to take their place. By formula, the state’s metric places the lowest scoring 20% of schools at Level 3, and there is always going to be a bottom 20%.

    Perhaps there’s hope because this ranking has now begun to hit the affluent suburbs outside Boston, according to the Boston Globe:

    “The number of Massachusetts public schools securing the top spot under the state’s rating system has dropped significantly, as schools in well-to-do suburbs such as Andover, Newton, and Winchester see their coveted top rankings disappear.

    This year, 424 schools received the ‘Level 1’ rating, representing just more than a quarter of all schools rated statewide, according to this year’s MCAS data. That is down notably from 510 schools two years ago, when the state introduced the five-tier rating system for school performance…”

    …In the super-competitive suburbs, the rating drops are raising wide-ranging questions, from what the declines say about educational quality to whether the state is relying too heavily on test scores – and splicing it too many ways – to accurately judge school performance….”

    When the value of real estate drops in places where people of means pay high taxes for expensive schools, what happened to Steve Ballmer could happen to Mitchell Chester (Ed Commish and president of PAARC).

  6. If anyone has a Twitter account, here’s a Tweet to copy, paste and RT:

    Bill Gates is funding the Common Core agenda to judge teachers
    So let’s judge Gates based on his Microsoft Failures

    The link leads back to this post.

  7. Comments include “managerial stupidity” , “stack ranking” and references to things spreading like ebola. Here’s a link. I don’t know what to think of it because so much is similar to what is being put upon teachers and students –mainly commercially produced assessments. Even some of the names are familiar. Has anything changed or are these “reformers” simply reinventing themselves and the same old, same old? Are they hoping that if teachers grade things themselves it will all be OK? Someone please enlighten me!

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