Calling for Microsoft to embark on a new mission, to "enable people and businesses throughout the world to realize their full potential," Microsoft Chief Executive Officer Steve Ballmer has told employees to think beyond software, to maintain "strong personal values," and to be open and respectful to others. The memo is also intended to help employees deal with negative public perceptions of Microsoft and focus on positive goals that can reinvigorate its workforce.

Ballmer's "Realizing Potential" memo, sent to all employees, calls for a new mission but does not change Microsoft’s vision statement, which remains "Empowering people through great software—any time, any place and on any device."

Delivering on the Mission

Ballmer's memo says Microsoft’s core values are integrity and honesty; passion for customers, partners, and technology; openness and respect for others, and dedication to making them better; a willingness to accept and pursue big challenges; self-criticism and commitment to self-improvement; and accountability to customers, shareholders, partners, and employees.

Concrete actions to support the company’s new mission include reviewing these values at employee personnel reviews, looking for new business opportunities, and adding a board member from outside the United States to broaden the diversity of the board.

Ballmer also highlighted the company's effort to deliver significant innovations in its "big platform" releases, such as the Windows Longhorn release scheduled for 2004.

A Difficult Context

The context for the memo is as interesting as its details. Ballmer notes early in the 2,600-word memo that "many of us feel a disconnect in the way we see ourselves and our mission and motives, and the way we are portrayed." Qualities that Microsoft encourages in employees—extraordinary passion, commitment, and leadership—are sometimes seen by outsiders as aggression and domination.

The company faces new challenges in managing public reaction to an imminent and critical decision on the antitrust case, to frequent questioning from the European Union over its products and tactics, and customer unhappiness about changes to volume licensing programs. An "anyone but Microsoft" sentiment is crystallizing around movements such as Linux and the Liberty Alliance (an alternative to Microsoft’s Passport).

These and other challenges require some reinvention of Microsoft and its culture. As the company and its products grow more complex, important products (such as an update to Windows 2000 Server, and refreshes of enterprise stalwarts such as SQL Server and Exchange) take longer to get out the door. Microsoft wants to simultaneously empower creative freedom and invention in the small groups that provide the bulk of the company’s innovation, while simultaneously focusing them on a common business vision.

Finally, Ballmer needs to find new ways to motivate employees in a company that shared its enormous success in the past through its liberal and profitable stock options: options granted to thousands of new employees in the last three years are languishing at 1998 levels and may expire as worthless.

Microsoft’s mission and values are outlined at www.microsoft.com/mscorp/.

Changes to Microsoft’s licensing programs are described in the June 2002 Research Report, "Understanding Microsoft Licensing."