The Steve Ballmer memo

From: Steve Ballmer

Sent: Thursday, June 06, 2002 1:47 PM

To: Microsoft and Subsidiaries: All FTE

Subject: Realizing Potential

The executive staff recently spent several days at a retreat where we had some breakthrough discussions about the company's mission and what we value. We developed a strong consensus about our mission going forward and the values that are its foundation. Simply put, our mission is to enable people and businesses throughout the world to realize their full potential. Today, we use software to help people get there. Over time, this will evolve to be a combination of software and software services. But our mission is not just about building great technology. It's also about who we are as a company and as individuals, how we manage our business internally and how we think about and work with partners and customers.

As an industry leader, we have a unique role in the world -- unique in the contribution we make and the responsibility that comes with that. Customers expect us to hit a very high bar in terms of product and support quality, delivering on our commitments and providing excellent customer-focused decision-making. Our industry wants us to be more actively engaged and open about who we are and about our road map for the future. Our pending settlement with the DOJ adds new responsibilities that we must deliver on. We are committed to working with the DOJ and other government agencies to ensure the settlement is a success and that our relationship is positive and constructive going forward.

The events of the last four years and the changes in our industry make this a good point to take stock of ourselves and our mission, to understand how others perceive us and to think about how we can do a better job explaining who we are and what matters to us. Many of us feel a disconnect in the way we see ourselves and our mission and motives and the way we are portrayed, and only we can change that. I hope this memo helps you to better understand and to communicate our mission, the shared values at the core of the Microsoft community and the things we need to focus on as a company to achieve our mission.

Our Mission

When I told my parents 22 years ago that I was dropping out of Stanford Business School to join a small company called Microsoft in the far northwest corner of the U.S., my father asked the first question: "What's software?" My mother asked me an even more interesting question: "Why would a person ever need a computer?" It seems funny now, but it's a reminder of how far our industry and Microsoft have come that no one ever thinks to ask such questions anymore.

Today, there are more than 500 million PCs in use around the world, and the reason is simple: the capability for information technology to help people and businesses realize their potential is very real and virtually limitless. The other day, I saw a computer simulation that a math teacher created where students could drag triangles around and see what happened to the intersection points of lines. I sure wish I'd had that when I studied geometry! In business, 50% of capital spending goes into information technology, and the percentage is growing. Increased efficiency and productivity aren't the only reasons why. More and more businesses have come to understand that people are the most valuable asset and knowledge the most important product, and that the key to really unlocking their value is information technology. Governments from Hamburg, Germany, to the state of Massachusetts are using technology to make services more accessible and allow citizens to give input on important issues. In homes, schools, libraries and community-based organizations around the world, PCs are enabling people to communicate and connect with others who share common interests, concerns and dreams.

Yet, there is still so much opportunity. Only 16% of households worldwide have a PC, and those that do only use their PC three or four hours a day at most. In most smaller businesses and many larger businesses, accounting, manufacturing, data collection, communication and collaboration are still done the old-fashioned way. As individuals, we participate in social communities, purchase goods and entertain ourselves watching TV and movies, listening to music, sending photos and pursuing hobbies. Just as the automobile enabled vast new opportunities and fundamentally transformed and improved the way people around the world work and live, we have a truly unique opportunity through our industry leadership to provide value at every level -- from core technologies to complete solutions -- to help people and businesses realize their potential. By advancing the frontiers of technology and breaking down the barriers holding back demand, we have an opportunity to help people through software almost every hour they are awake or their business is operating.

To achieve this, our mission must be enduring. Twenty-five years ago, we had a vision of "A PC on every desktop and in every home." Back then, people thought we had stars in our eyes, but we persisted and no one is laughing today. About three years ago, we came up with a new vision for the company -- "Empowering people through great software -- any time, any place and on any device" -- to better capture what we are doing now at Microsoft through the richness of software. The fact that our first vision statement was relevant for more than 20 years is a testament to how spot-on it was. Over the next century, we may have several different vision statements to best state what the company is trying to accomplish, but our mission of enabling people and businesses to realize their full potential need not change.

To meet the expectations people have of us as an industry leader, and to take advantage of the opportunities reflected in our mission, there are a number of things we must prioritize and value as a company:

1. Great People with Great Values

Helping change the world in the way we aspire to isn't easy. We need people who are creative, energetic and bright, absolutely passionate and committed to our mission. We need people who have their own strong personal values, as well as those necessary to be successful at Microsoft. These are the kind of people who, with their passion for helping others realize their potential, will push themselves to ask: What does the customer need? How do you build it? How do you make it successful? How do you support it?

At the exec retreat, we also agreed on the importance and value of people being open -- with their ideas, thoughts and in receiving input -- and demonstrating respect for others. These values must shine through in all our interactions -- in our workgroups, across teams, with partners, within our industry and, most of all, with customers. We added these to our core values summarized below.

Great people are bright, creative and energetic, and share the following values:

  • Integrity and honesty
  • Passion for customers, partners and technology
  • Open and respectful with others and dedicated to making them better
  • Willingness to take on big challenges and see them through
  • Self-critical, questioning and committed to personal excellence and self-improvement
  • Accountable for commitments, results and quality to customers, shareholders, partners and employees

2. Excellence

Excellence must be at the core of everything we do and is central to everything we value. There are several pillars of excellence to which we must all aspire:

  • Excellence in people
  • Excellence in every part of our relationship with customers and partners
  • Excellence in product quality
  • Excellence in how we make decisions and orchestrate our work internally to be efficient and predictable
  • Excellence in shareholder value
  • 3. Trustworthy Computing

    The more the world realizes the possibilities enabled by information technology, the more Microsoft needs to deepen our customers' trust at every level. Core to this is being predictable in everything we do. Our products and solutions must be available when customers need them, the integrity of their information must be secure and their privacy must be assured and protected. We must also provide tools so that other software developers can build applications that are trustworthy. As a company and as individuals, we will earn trust every day not only through our products, but also through our responsiveness and accountability to customers and the degree to which we make high-quality decisions with customer issues in mind. In this regard, we must be excellent in doing what we say we will do. If there are real and good reasons to change plans (e.g., to close a product line, to change licensing terms, to change a delivery schedule or spec, or even to do an upgrade), we must take responsibility for these changes and their impact on customers. Customers must see that we take our commitments seriously, that we have clear, established business practices, that we are predictable and that we genuinely understand and respect the issues they face when there is change. Even if these are not contractual commitments, they represent the "deal" we must have with customers if they are to depend on Microsoft and place their full trust in our products.

    4. Broad Customer Connection

    At the end of the day, we will make progress on our mission by helping millions of people and businesses -- from the [bottom up]\. It was a massive groundswell that launched the PC revolution and the Internet revolution. It was huge communities of developers, technical people and consumers who were passionate and created the wellspring of demand. We must understand the needs and uses of technology by these millions of people today, have great ways to show them new and interesting means of realizing their potential and support them well when they have questions. We need to be able to see beyond general trends to the interests of smaller communities that have the potential to become very large and influential. We must use the Internet in new ways to have a special connection on all fronts with these customers. As an example, when we talk about software becoming a service, we are really talking about the deepening connection and value we must bring to customers all the time and as part of the basic offer we make to the customer.

    5. Innovative and Responsible Platform Leadership

    A clear technology vision and the platform and road map for it are the heart and soul of our focus on creating new opportunities for customers, partners and the industry. We have an enormous opportunity to harness innovation in a manner that enables our platform -- Windows and .Net -- to better help customers realize their potential. We recognize that our mission requires us to lead the industry responsibly -- by expanding platform innovation, benefits and opportunities, by being open in discussing our future directions, getting feedback and working with others to ensure that their products and our platforms work well together.

    6. Enabling People to Do New Things

    Microsoft can no longer focus narrowly on the PC or desktop software. Our mission requires that we do excellent work in a broader set of areas to help customers and to enable the company to grow. This does not mean we will be in every part of the software business. However, we can't ever feel that we failed to make a substantive contribution to some area of our mission simply because we thought it was outside our business. We must systematically identify and brainstorm new areas. Some of that work may lead to incubation of new products, some to new scenarios that we will integrate into existing businesses, some may lead to acquisitions of key talent or experience, and some may lead to integrating more deeply with new or existing partners. The key is clear focus on important customer scenarios that drive our offerings.

    Most of our new product efforts will start with a small team of very talented people inside Microsoft who have end-to-end customer scenarios in mind like Tablet PC. In terms of acquisitions, FrontPage, Hotmail and Great Plains are examples of where we established a footprint in a significant new space and have added a lot of value.

    7. A Global, Inclusive Approach

    There is a lot of responsibility -- to our customers, partners, shareholders, employees and the communities in which we live and serve -- that comes with our success and the mission we have undertaken. The mission we undertake is global -- for all people and businesses of the world irrespective of where they are geographically or what their economic means. We cannot solve the problems of the digital divide alone, but we can innovate in ways to continue to lower costs of these technologies and we can show leadership in giving time, money and software to promote broad use of information technology. We must fully pursue this mission in all corners of the globe and in keeping with what we value and what the citizens in each country value. To achieve these goals, we need to be a company with a diverse workforce. This diversity must take account of race, gender, nationality and every other aspect if we are really going to enable all peoples to realize their potential.

    Next Steps

    I cannot be exhaustive in listing all the things we will do concretely to follow these principles. I will list some, though, so it is clear this is not just a fluffy statement of principles but really a guide to action. Here are a few things:

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