You Think Amazon is Bad…?

In 1990, I started working for one of the largest companies in Silicon Valley at the time, Sun Microsystems. Sun was founded in 1982 and was a billion dollar entity at the time (only a few SV companies could state that claim 25 years ago).

At the time, Sun was hiring 100–200 new employees PER WEEK. They were growing at an annualized rate of 30% PER YEAR. Sound like a company under control? No, I don’t think so. But no one really noticed for many years after that. I will get to that part later in my story.

In 1990, I was already 17 years into my career, so I was not some wide-eyed neophyte. However, my career previously had been with “heavy” or traditional manufacturing, and I had worked with unions and other heavy-handed types on the east coast, if you catch my drift. Starting my “second career” in the Valley as I was approaching 40 was a big change in the way I saw myself and others in my chosen field of manufacturing and supply chain management.

For one thing, it was the first time I had ever worked for someone younger than I was; I don’t care what anyone says — that is a blow to the ego especially when you think you’ve planned your career out to a fare-thee-well. And the kids working for me were all in their twenties, all had excitingly-named, albeit narrowly-focused undergrad and graduate degrees, like BS in C++ or a MBS in Algorithmic Probability or some such shit as that. Smart people, yes…but leaders of people? Not so much.

And therein lies the rub. As early as 1990, or perhaps even sooner, many of our companies were turning out narrowly-trained, non-people centric individuals who were primarily project- and program-oriented. Although Sun had something euphemistically called “Sun University” whereby people could learn Sun’s way of doing things — from the most arcane traits of Sun administration and what passed for Human Resources, all the way to taking in-house continuing education courses to “train up” employees for their next leg up on the corporate ladder, the biggest problem I saw was that most Sun employees (from VP’s on down) were not held accountable for employee development or growth. Hell, by 1997, we were hiring as many as 400 employees a week worldwide!

But the big secret was we were letting good employees slip through our fingers and quit to go to our competition. Easy come, easy go. During the go-go time of the late 1990’s in tech, everybody it seemed was focused on their own stock options and rising stock prices. As a corporate Director, I had employees who were purchasing agents and material handlers WHO WERE PAPER MILLIONAIRES! Many of them bought real estate worth millions even though their base salaries were mid-five figures.

But the coup de grace came in 1999, when Sun top management decided to implement a “10–80–10” system of employee evaluation. These plans are called by many different names, but the results are the same: they are personality events. Ours worked like this: Every 90 days (four times a year) we had to evaluate every employee in our organization and rank him or her from 1–100 in different categories. The employees who were in the top 10% tier were eligible for promotions and raises. The middle 80% got to keep their jobs on a sliding scale from 11–90%, and the bottom tier were automatically put on a PIP program (Personnel Improvement Program) which they had to fulfill within the pursuant 90 days if they wanted to keep their jobs.

Long story short — you want to get rid of someone you don’t like? Never mind they’ve been with you 10 years and have done a great job, but they eat their free donuts they got every day like a longshoreman — get rid of them! No need to counsel or retrain anyone — hell, 90 day reviews are coming up fast enough!

I don’t have to tell you that our 10–80–10 program, coupled with the stock option scandal that plagued the Valley during that time, followed by the March 2000 tech market crash (which effectively bankrupted a goodly percentage of all Silicon Valley employees who had extended themselves financially — see a few paragraphs above) all but made Sun Microsystems and many of its peers impotent going forward. Sure, product was sold and money was made, but the genesis which had made Silicon Valley unique and different had the inception of its downfall in the way they treated its employees starting in the mid-1990’s.

And now we have stories like Amazon’s. Folks, this is not new.

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