Case 4a: Microsoft
Q1: A company’s ability to attract, motivate, and retain superior people is a key determinant for success in any organization, and Microsoft was at one point unmatched in their ability to do just this. Subsequently, their recruiting and retention strategy was indeed likely their core source of competitive advantage when the company was an engine of exponential growth. As Microsoft entered the 90s however, with the company’s growth slowing, and the organization moving towards the behemoth we know today, the strength of this competency, and its importance to the organization began to shift as well.

Inevitably, as a company grows, the ability for an individual to make an outsized impact declines dramatically. This is best expressed in the change in Microsoft’s vision statement from “a computer on every desk and in every home running on Microsoft software” to “to empower people to do anything they want, any place they want, on any device.” The first statement is concrete, concise, and measurable, while the second statement is considerably less so. Developers working to achieve the first vision statement were excited to be a part of something bigger than themselves. This was evidenced by statements like: “we were literally changing the world. You felt you were at the center of the universe,” and that Gates and his top managers had “created a culture where everyone felt like their excellence was material to the bottom line.” It’s difficult to feel that way about their second vision statement.

As a result of these changes in the organizations goals, the reduced ability for any individual to make a difference, the inevitable increase in hierarchy and process, and the proliferation of start-ups that offered the opportunity to meaningfully contribute from day one, Microsoft’s ability to attract, motivate and retain superior people was