How Tech Giants Think: A Cultural Analysis of Microsoft & IBM

Thanks to my Organizational Communication class this semester, I've learned a lot about the complexity and importance of organizational culture. 

For one of our final projects, we were tasked with writing a cultural analysis of an organization. Our teacher asked us to interview two people from within one single company and apply class concepts to feedback we received about  its organizational culture.   

However, I decided to create my own topic. Instead of interviewing two people from one single company, I thought it would be even more interesting to interview two people, each whom work at a different company, but within a similar industry.

I was lucky enough to have Mary and Josh allow me to interview them about their career experiences working at tech companies. Per their valuable stories and insight, I've learned a lot more about what they do for a living, why they do it, and that people and organizational culture are just as important as technology.


Introduction

Microsoft and IBM are two tech giants that dominate and innovate within the business intelligence market. With a growing world of data and an increasingly competitive market space for cloud businesses, one of the most exciting parts of the modern digital era is observing how tech companies have raced to remain innovative and relevant. While Microsoft and IBM bear differences in perspectives on the tech industry, articulating their organizational cultures will further our understanding of their business productivity over time.

I have explored the effects of Microsoft and IBM’s organizational cultures on their business productivity by collecting insight from two professionals: Mary, a Global Program Manager at Microsoft, and Joe, an Offering Evangelist at IBM. With 20-30 years of experiences in the tech realm, Mary and Josh have shared their respective insight about their Microsoft and IBM experiences. Per Microsoft and IBM’s current and past business performances, along with Mary and Josh's feedback, I will: 1) identify and analyze cultural elements that have led to increased or decreased productivity over time, and 2) project how these elements will influence the companies’ ability to adapt to the future of the tech industry.

Through Their Lens  

Microsoft is a multinational, technology company that develops and implements integrated software and hardware solutions worldwide. With around 120,000 employees in over 100 countries, Microsoft has proved its resilience in responding to changing technologies, market demands, and business opportunities over time; recently, it has shifted towards investing more in cloud productivity services (Ullman).

Elaborating on experiences that led her to Microsoft’s door, Mary outlined a personal narrative that pushed her to pursue work within customer support and privacy programs. As a child of immigrant parents, she noticed they were mistreated on a daily basis, often met with impatience or rudeness. As she grew older, she saw her role to be her parents’ advocate and speak on their behalf. “I took on this ‘justice girl’ complex - my goal: help the underdogs - those who are underrepresented.”

From working in customer support, to managing and developing privacy, online safety, and regulatory compliance policy programs for worldwide services, Mary’s innate values of diversity and supporting the underrepresented have only strengthened over time.

Today, she continues to elaborate on being an advocate for others through her current role: implementing Microsoft’s General Data Privacy Regulation (GDPR) through consulting with sales, marketing, and engineering teams. Whether it be speaking on behalf of her parents or a Microsoft user, Mary has dedicated her work to protecting and lending a voice to others - “...to empower people around the world to do more of what is meaningful to them - whatever that may be - personal and/or business-related.” Based on Schein’s Model, Mary’s narrative about being an advocate for others is a cultural indicator of Microsoft’s espoused values of diversity, innovation, and making the customer come first. Having been awarded for building the fully comprehensive privacy program at Microsoft, it is evident that her ethical values align with Microsoft’s online privacy initiatives, resulting in recognition of her contribution to the company’s productivity.

IBM, short for International Business Machines, is the biggest computer company in the world. Over the past century, with 370,000 employees operating in 170 countries, IBM has provided integrated solutions that leverage information technology and knowledge of business processes – one in particular being Watson, an evolving business Artificial Intelligence (AI) platform. In light of IBM’s multifaceted technology services, it is no surprise that Josh’s interdisciplinary background - a blend of business, engineering, and design - led him to pursue a career at IBM. Although he was originally more interested in product design and engineering than he was in computers, Josh stuck with IBM; he found the company’s multifaceted work to be rewarding and desired to take part in its global impact – a “force for positive change for the world.” Over the past 30 years, Josh has worn many hats in many different places. From China, to Germany, to Silicon Valley, to Florida, he has honed his talents in technical support, systems engineering, sales, and product management all over the world – a testament to IBM actualizing his dream of driving positive global change through his career.

Josh's background not only indicates the breadth and depth of IBM’s interdisciplinary services, but also serves as an artifact of IBM’s espoused values of innovating on a global scale. Thus, the cultural consistency between IBM’s espoused values and artifacts increased Josh’s job satisfaction and commitment; his motivation to invest in diverse work and expand IBM’s global reach has contributed to its productivity through bringing products to market worldwide.

Consistency & Change

Microsoft and IBM have constantly had to change to remain relevant and competitive in the market. The remerging questions have always been - “How?” and “When?” In order to summarize their respective companies’ evolving work cultures, Mary and Josh provided vignettes of challenging work dynamics: Mary reflected on the 23 managers she has had in her 18-year career, and Josh discussed the challenge of navigating IBM’s vast resources.

Mary says the best managers “took the time to get to know me, asked me questions, pushed me to do things that may be uncomfortable, but…[expanded] my skill set.” In contrast, her worst managers “didn’t know how to lead… [were] too self-absorbed with their own career...” or were “unwilling to protect the team.” Apart from being rewarded for building the first fully comprehensive privacy program, Mary also recalls seeing others who “left ‘dead bodies’ along the way to get where they are” receive rewards as well. In other words, Mary’s best managers enacted team management, eliciting a high concern for both people and production, whereas her worst managers employed authority-compliance management, expressing low concern for both people and production. Moreover, instances where employees received undeserved recognition seem to be by-products of overly product-focused leadership, a dynamic that has cost Microsoft’s productivity in the tech industry.

For example, Mary’s recollection of how two managers have dealt with change differently reveals that management styles not only permeate throughout work culture, but also affect organizational productivity. Former CEO Steve Ballmer “led with an old school style,” maintaining a “product-focused...arrogant” outlook that assumed “if we build it, they will come.” In this case, by resisting change and prioritizing his own interests over organizational needs, Ballmer’s Theory X management style left Microsoft behind in the mobile phone and tablet industry.

On the other hand, with current CEO Nadella abandoning a “Windows or nothing” philosophy and finding new ways to compete in markets, Microsoft’s shift in management style has deeply impacted its presence within the cloud platform and productivity ecosystems through its: increased implementation of MS Office on iOS, Android, and Chromebook devices; and growth of the Azure cloud platform (Ullman). Having monetized relationships with competitors by creating “collaborative connections, both internally and externally,” Nadella has demonstrated negative entropy - maintaining openness with other organizations in Microsoft’s environment by creating strategic partnerships. Furthermore, Nadella’s story of being an immigrant rising to the top has made Mary feel proud to be a part of Microsoft - “a progressive company, with staying power and willingness to adapt and change for the greater good.” Thus, this shift in management style from Ballmer to Nadella is an artifact showcasing Microsoft’s espoused values of diversity and innovation, heightening Mona’s feelings of job satisfaction, commitment, and increased productivity.

 Satya Nadella, CEO of Microsoft, at the Microsoft Developers Build Conference in May 2017.

Satya Nadella, CEO of Microsoft, at the Microsoft Developers Build Conference in May 2017.

Josh describes IBM’s culture as “high-performance,” where “excellence is the standard.” With CEO Ginni Rometty repackaging century-old expertise through modern AI platforms (i.e. Watson), IBM’s persistence to keep incubating new products has allowed it to lead transformation in cloud-based services. With IBM’s immense size, the effect of “cost cutting and relentless drive for more efficiency and productivity” has pushed employees to wear multiple hats. As a current Offering Evangelist (Sales Enablement), Josh carries various responsibilities through developing marketing, sales, and technical collateral to “enable and educate IBMers and IBM Business Partners” on new products every 3-6 months. However, in spite of shouldering a daunting workload, John appreciates IBM’s mix of experimental and structured processes, such as: “Grand Challenges” to develop innovative practices; and an annual exhibition of Business Conduct Guidelines – a “mandatory certification process to assure the IBM ethical values, business ethics,” and proper business behavior is conducted.

Therefore, although IBM copes with its vastness through bureaucratic rules to achieve consistency in work performance, Josh’s views underline that IBM’s formalized rules upholding “…fairness, healthy internal debate…[and] respect for the individual” enable it to maintain innovative productivity. In a similar vein, Mary’s development of privacy policies and programs shows that Microsoft employs scientific management to implement procedural specificity, improve work performance and efficiency, and boost productivity.

Staying Relevant

With companies as large as Microsoft and IBM, it is difficult to find unique experiences that holistically reflect each company’s culture and strategic imperatives. However, from the broad perspective of Peter & Waterman’s “Excellent Cultures” model, a cultural element that has enabled Microsoft and IBM to innovate productively is: autonomy and entrepreneurship. At Microsoft, Mary mentioned how she decided to take the initiative and step down from a project role that did not suit her for the greater benefit of the organization’s needs. At IBM, Josh described how one must be able to mine and find the right things within the company’s “vast treasure trove of people, resources, technology, and possibilities” in order to succeed. Both companies encourage employees to take risks and develop new ideas; however, it is clear that in order to succeed, one must drive one’s own success.

Due to IBM’s large size, it manifests productivity through allocating employees with multifaceted responsibilities and a crushing workload. Based on Mary’s variety of team-oriented experiences, it seems that many internal cultures persist at Microsoft within small groups that are tasked with narrow scopes. Although IBM and Microsoft both struggle with streamlining their process-driven nature, IBMers wearing many hats and Microsoft’s role specialization successfully demonstrates requisite variety - that is, these tech companies are able to maintain productivity and create solutions at a competitive scale of complexity due to their internal, complex processes.

Mary and Josh voice similar outlooks on what differentiates Microsoft and IBM from the crowd: their longevity, massive global imprint, ability to take risks, and constant pursuit to help customers succeed and make the world a better place. On the topic of leveraging digital platforms for businesses, IBM’s current CEO Rometty states that this is the “era of man plus machine.” (Think 2018 Chairman’s Address: Putting Smart to Work). Considering the fact that we are moving into a new technological era of exponential learning, I asked Mary and Josh what they would do as CEO for a day.

 Ginni Rometty, CEO of IBM, speaking at Think 2018 technology conference.

Ginni Rometty, CEO of IBM, speaking at Think 2018 technology conference.

Josh’s biggest hope for IBM, in terms of culture, is to internalize Rometty’s directives about IBM - to act upon embedding digital intelligence in daily processes in order to empower people, society, and businesses (Think 2018 Chairman’s Address: Putting Smart to Work). Mary proposed two solutions: a “Mind Swap” program to deepen empathy with others and “truly change the culture to become inclusive and embrace diversity”; and “Job Swap,” where employees swap roles with their customers and learn about potential issues that accompany Microsoft’s products, services, and solutions from a customer’s standpoint.

Josh’s desire to see IBM’s espoused values of continued technological innovation come to fruition indicates that productivity at IBM tends to see outcomes in the long-term; he comments that if one’s idea of productivity means being “in the driver’s seat from the very beginning,” he would best be served by working in start-up atmospheres, like Silicon Valley. In turn, Mary’s personal CEO agenda addresses emergent and development processes within Microsoft’s culture, revealing that creating more transparency between both internal and external processes could help reinforce consistency in Microsoft’s internal culture and ultimately drive overall productivity.

Conclusion

Whether it be Microsoft or IBM, it is apparent that people and organizational culture are almost just as important as code and technology. Likewise, Microsoft and IBM each house cultures that are more than qualified to break through the clutter of massive disruption in today’s business world in different ways. On one hand, IBM’s byzantine complexity can prevent project outcomes from coming to immediate fruition, resulting in employee perceptions of decreased productivity; on the other hand, complex role specialization at Microsoft, in combination with Nadella’s newfound emphasis on teamwork and collaboration, has led to increased productivity and strategic partnerships in the cloud space. Moreover, whereas over-the-top bureaucratic personalities and product-focused management at Microsoft has previously left them behind during the onset of mobile devices and tablets, IBM’s bureaucratic elements have arguably enabled it to consistently adhere to ethical values and behaviors, strengthening employee satisfaction, commitment, and product innovation. In both cases, as big tech companies that operate on a global scale, Microsoft and IBM leverage a balance of both structured and freeform elements to solidify products, continuously think with a customer-first mentality, and create a cultural climate for productivity. Thus, although varying organizational cultures and business strategies persist at Microsoft and IBM, their individual voices will continue to shape the cloud marketplace together in the years to come.


References

IBM Cloud Video. 20 March 2018. “Think 2018 Chairman’s Address: Putting Smart to Work.” Retrieved from https://www.ibm.com/events/think/watch/playlist/249819/replay/113734399/

Ullman, Daryl. “Why is Microsoft so successful?” Computerworld, Retrieved from Accessed 24 https://www.computerworld.com/article/3247650/microsoft-windows/why-is-microsoft-so-successful.html. Accessed 24 April 2018.