Microsoft
UK was this year named the best company to work for in the UK. But its people,
profits and culture director believes
there is still room for improvement, Simon Kent reports
What
is it that has earned Microsoft the number one place in The Sunday Times’ list
of 100 Best Companies to Work for 2003? Walking around the purpose-built campus
at Thames Valley Park in Reading, it is easy to jump to conclusions. There are
extensive on-site facilities ranging from a well-being centre to personal
banking. The working environment has been carefully styled – from the main
atrium, scattered with easy chairs, sofas and tables, to the Anarchy Room, to
the numerous and infinitely flexible presentation areas. There are a choice of
caf‚s and employees can even adjourn to the lakeside gazebo in the company
grounds if they wish.
Work
anywhere policy
Throughout
the campus, flat-screen televisions constantly play news and music, keeping
workers in touch with the world outside work. X-Box games consoles are free for
staff to use, giving them the chance to unwind while experiencing a key company
product. Regularly updated message boards supporting Microsoft’s work
philosophy or echoing current external marketing campaigns adorn the walls.
Microsoft
employees have generous desk space, and their computers and phones link to a
wireless network enabling them to work anywhere in the grounds – even at the
gazebo. And if they’d prefer to work from home, occasionally or on a regular
basis, that’s fine too, because each home boasts a wireless network too,
enabling staff to log on without needing to construct a complete home office.
Perhaps
it comes down to the fact that Microsoft treats its workers as adults. It lets
its staff decide when and where they work best. They have free, constant access
to the resources they need during the working day – be it paper, photocopying
or refreshments – without needing to fill out any forms or seek permission.
Given
freedom and autonomy at this level, employees in Microsoft UK do not sit back
and count their blessings, but understand they are here to work hard. And they
are paying back their employer handsomely for good working conditions –
delivering higher revenue per head than operations in any other country.
Put
simply, Microsoft UK works hard to attract highly-skilled people who will love
working for Microsoft. In turn, those employees attract other highly-skilled
people who also love working for Microsoft. It is a virtuous circle – but like
everything else, it had to start somewhere.
That
starting point is Steve Harvey, director of people, profits and culture. His
master plan was hatched seven years ago, as a result of his perception of
Microsoft’s position within the sector at that time, and the pressures that it
would face in the future.
"My
philosophy is based on the view that there are not enough smart people to go
around, and that situation is only going to get worse," he says.
"Eventually we will reach the stage where the industry will be populated
with corporate freelancers who will work when and wherever they feel like it.
Therefore, you need to create a place where people want to work."
To
some extent, Harvey seems more proud of the company’s achievement in the 2002
list when the company came first in the IT sector: "We wanted to become
the IT employer of choice and five years ago – particularly with the dotcom
boom – we were probably one of the unexciting places to work."
Staff
turnover stands at 5 per cent
All
that has changed. Harvey is particularly pleased that 89 per cent of employees
love working at Microsoft while 93 per cent feel pride in the company and agree
that Microsoft ‘makes a positive difference to the world we live in’. That’s
almost 10 per cent above the second highest scorer in this category,
pharmaceuticals giant Eli Lilly & Co at 84.3 per cent.
"What
we are trying to do is get our current employees to say that they wouldn’t want
to work anywhere else," explains Harvey, "If they say that, they will
work as evangelists for the company and attract people with the same mentality."
Although
two-thirds of Microsoft’s 1,600 employees earn more than £40K, the company is
not the highest paying in its sector – indeed, some people take pay cuts to
join. An employee share ownership scheme covering 95 per cent of the workforce
provides an effective incentive, as well as added financial reward. Staff
turnover currently stands at 5 per cent and annual sales have grown
significantly, rising by more than £1bn this year to £17.62bn.
Harvey
gains satisfaction from the external adjudication afforded by The Sunday Times
and the opportunity to benchmark his employees’ attitudes against other
companies, but the overall picture is one he was already aware of through
Microsoft’s own measures and analysis – not least the annual employee survey,
which was voluntarily completed by 93 per cent of the workforce last year.
"There
are benchmarks used across the company," says Harvey. "Financial
benchmarks, revenue levels – the whole model is based around realising annual
growth."
There
appears to be no distinction between the measures used and studied by the HR
function and those used across the rest of the company.
One
of Harvey’s key measurements is revenue per head, a figure that directly links
the performance of each employee to the performance of the whole company. The
company constantly reviews the data it generates to assess areas for revenue
growth, market penetration and overall structure of the company and the
industry in which it operates. This data is as much the concern of HR as any
other manager in the company.
Harvey
consciously avoids the compartmentalisation of people management from the rest
of the business – a fact borne out by his own job title.
"The
whole philosophy is around creating a long-term people strategy," he says.
"It’s not just an HR strategy, it’s not purely about people, it’s about
the overall strategy of the company." Harvey doesn’t drive this strategy,
it is created by the board of directors and realised through the work of every
manager.
It
is difficult to discuss specific HR initiatives or policies because the
organisation is constantly responding to the demands of its own customers and
sector, rather than addressing general employment practice.
The
focus is on creating an environment "where great people can do their best
work", and that means being pro-active, ensuring terms and conditions,
benefits and rewards that attract and retain the people they need. These
features are usually far ahead of any legislative minimum.
Dedicated
HR managers exist in Microsoft at a ratio of roughly 1 to every 100 workers.
However, with all admin and support functions outsourced to specialist
suppliers, these people rarely discuss pure HR issues. According to Harvey,
listening to an HR manager speak is indistinguishable from listening to any
other manager.
"I
can get quite emotional sometimes when I hear the HR people discussing business
problems. They are out there supporting workers at the front end, where they
are needed," he says. "They’re constantly asking what the business
strategy is, where the business is going and what we need to do to help people
get there."
Satisfied
customers
It
falls to Harvey and his team to ensure that strategy is implemented – the idea
being that if great people are put in great jobs, led by great managers and
leaders, then satisfied customers, growth, results and rewards will naturally
follow.
Crucial
to achieving this base has been the company’s use of the Strength Profiling
System, created in consultation with Gallop. This approach was inspired by
Buckingham and Coffman’s book, First, Break All the Rules. The system is based
on the idea that people do not change. You can apply as many development
resources as you wish to create well-rounded individuals, but ultimately, they
will never excel in areas where they are not naturally gifted.
"No-one
enjoys doing something they’re not good at," says Harvey. "Whenever
you receive 360-degree feedback it doesn’t focus on what you’re good at, it
suggests areas you might try and improve."
Playing
to their strengths
Strength-profiling
states that everyone has a few areas in which they excel and these strengths,
already manifested in a child of 10, do not alter in adulthood. Therefore,
ensuring workers play to their strengths results in happier staff and
significant productivity gains for the company.
"It
is recognised that on average, only 20 per cent of employees say that when they
are at work they do what they are best at," says Harvey, "If you
could move that percentage to 30 or 40 per cent within your company, imagine
how much overall performance would improve."
While
the approach appears to make perfect sense, getting staff to buy into the
mindset has not been all plain sailing
"More
than one manager asked me to stop this initiative because they had got
individuals who wanted to change their job," he says. "These people
were no longer happy because their jobs didn’t match their strengths. But
that’s the whole point – if they aren’t happy with what they are doing, they
will leave the company."
In
some cases, individuals simply haven’t liked their identified strengths.
Aspirational salespeople, for example, have sometimes found their actual
strength lies in backroom disciplines. While initially dispiriting, Harvey
maintains that in the long run these employees found more satisfaction in
playing to their strengths rather than attempting to follow a perceived
structure of progress.
Moreover,
the process of identifying these strengths – a discussion around 12 critical
questions – has given the company a new vocabulary with which to tackle
projects and assemble effective teams. "You need to have that discussion,
because you need to get the base of the organisational pyramid right,"
says Harvey. "People need to understand what’s expected of them, and have
the tools and equipment to achieve that aim. Strength-profiling helps us to do
that."
Naturally,
Microsoft is still subject to the same pressures and challenges which all
employers face, and it seeks to tackle these issues in the usual ways. There is
a great awareness of the difficulty of finding effective people managers. When
they are identified, there are both internal and external training and
development resources available – structured courses, coaching, mentoring – to
get them skilled up and to monitor their performance within the company.
Diversity
is a priority
"We
spend a huge amount of effort managing our stars – the top five per cent of the
company," says Harvey. "If we didn’t do that, then poor performers
would survive at the top, and our employees are bright enough to see that and
decide to go somewhere else. "We do some work at the bottom, to make sure
we have the right managers, but the focus on star performers is a big part of
the business."
That
said, Harvey believes the company can do a better job at developing and
supporting the company’s managers in the future. "We don’t have a way of
measuring who is an effective manager and why," he says, "I’d like to
do more on that."
Diversity
in recruitment is also a big priority for the firm. With 40 per cent of hires
coming through referrals, Harvey likes the fact that current employees bring in
like-minded staff, but he is aware it means those individuals replicate the
majority of Microsoft employees – white men in their mid-thirties.
Tackling
this is not just a matter of ensuring good practice exists in recruitment, and
that flexible working is available to fit in with any lifestyle, but the
company also recognises the need to promote diversity at the level of higher
education.
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According
to Harvey, Microsoft’s people philosophy has meant creating the optimum working
environment for high- performing individuals on an intellectual, emotional and
physical level. While this sounds daunting, he believes any organisation can
achieve similar results.
"People
have said we can only do this because we’re Microsoft, but I believe in this
approach passionately. There have been risks along the way," he adds, not
least the creation of a new HR team dedicated to realising Harvey’s vision.
"You can’t spend your whole career waiting for corporate approval to act
on something you believe in."
