Why Developer Stack Ranking Is an Innovation Killer
Every company talks about how important it is to foster innovation among developers, but what they fail to realize is how many practices they employ that actually kill innovation. One of the most damaging of these practices is stack ranking.
Made famous by GE’s Jack Welch, stack ranking is a method by which employees are ranked against each other to identify both the high and low performers. Many companies swear by this process, citing as two of the biggest benefits retention of high performers and the ability to track performance. Despite these claims, stack ranking has numerous unintentional side effects that work against a culture of innovation.
One company that has clearly suffered from a lack of technical innovation is Microsoft. Recently, a former Microsoft developer described the impact of stack ranking on the internal workings of the company. David Auerbach’s work at Microsoft as both a developer and development lead has given him a unique insight into the company’s internal corporate culture. His article on Slate details how leads were responsible for putting developers in different buckets, which would then determine promotions, raises, bonuses—and even the developer’s future in Redmond.
This entire process was supposed to be secret so as not to affect the behaviors of those being ranked. But the system was known throughout the company, and the results were predictable. The developers’ main concerns became positioning themselves for ranking and not driving to develop the best products.
Auerbach explains:
The stack rank was harmful. It served as an incentive not to join high-quality groups, because you’d be that much more likely to fall low in the stack rank. Better to join a weak group where you’d be the star, and then coast…it just encouraged people to backstab their co-workers, since their loss entailed your profit.
If this mentality weren't bad enough, the secrecy surrounding the process “destroyed trust between individual contributors and management, because the stack rank required that all lower-level managers systematically lie to their reports.”
Innovation requires complete trust throughout an organization. How can someone risk failure if it leads to a poor ranking with respect to fellow developers? Stack ranking, especially the way it is practiced at Microsoft, can be fatal to an organization.
Vanity Fair contributing editor Kurt Eichenwald recently discussed with Bloomberg News’ Betty Liu how Microsoft’s management style has affected its ability to compete:
If stack ranking is not the answer, what is? Unfortunately, there is no easy answer, but as a manager of developers, I recommend spending quality time around their teams when possible. This does not mean you have to micromanage, but be aware of how people interact, know which developers are considered your “go to people,” and understand as early as possible who is struggling.
Make sure people’s interests and skill sets align with the work they are doing because developers do their best work when they are engaged. Finally, take your time hiring the right people. A little extra time looking can make all the difference. These are the kinds of managerial practices that remove the fear of failure and create a culture of innovation.
