Nearly every element of MicroStrategy's business model has been subjected to scrutiny and forced to change. But amidst these deep-seated strategic reforms, one element of the organization has remained intact so far: its equally deep-seated culture and values.
Saylor did make some brutal organizational moves after the share-price collapse. First, the company rescinded 236 job offers and laid off 234 employees, or 10% of its staff. Several months later, in April of this year, when first-quarter losses were higher than expected, he announced a second round of layoffs, trimming one third of the MicroStrategy staff.
Throughout the course of the SEC's investigation, MicroStrategy executives issued a steady stream of staff emails and conducted company-wide conference calls. Saylor and the other leaders explained what had happened and what they were doing about it, and they dispelled the latest rumors. (According to one rumor, Saylor was planning to sell the company. He wasn't.) Remarkably, the remainder of the organization hung together reasonably well. The attrition rate doubled from 10% to 20%, but it was not nearly as high as outside doomsayers might have predicted it would be, and not nearly as high as Vince Gabriele, 38, director of global staffing, had feared. "It was so demoralizing to pick up the newspaper in the morning," he says.
In general, the employees who quit were more recent hires who weren't as invested in the company. Those who remained were firm believers in MicroStrategy, its products, and Saylor himself. It helped that, last June, despite all of its problems, the company released a complete rewrite of its software (four years in the making) that is easier to use, more scalable, and more precise. "Nobody can touch them," says Tholemeier.
The recent and much larger round of layoffs is the latest test for MicroStrategy. While it's still too early to say what effect the cuts will have, if the past year is any indication, the organization will persevere. The fact that most employees were able to keep their heads, even as some heads were rolling, confirmed for Saylor that for all of his mistakes, he and his senior colleagues had done one important thing right. Their obsession with building a sense of shared purpose, their commitment to schooling all of their people in the big-picture vision behind the company's business, and their willingness to spend millions of dollars and hundreds of hours of CEO time to create a sense of shared responsibility, had become the glue that held things together.
"The past 12 months have really shown that culture is by far the most important thing in a company," Saylor says. "If we had constructed a culture that was based solely on stock price or on prestige, there wouldn't be a reason to be here now. At the end of the day, the thing that drives people through all of this pain and turmoil is the belief that the world is a better place because of what they do."
Chuck Salter (csalter@fastcompany.com) is a Fast Company senior writer based in Baltimore. Contact Michael Saylor by email (saylor@microstrategy.com) .
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