WRITTEN CASE ANALYSIS SECTIONS At a minimum, the following sections are to be in
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Question
WRITTEN CASE ANALYSIS SECTIONS At a minimum, the following sections are to be included in each written case analysis. Full discussions, explanations, reasoning, and support are to be included as to demonstrate to the reader the student’s complete understanding, knowledge, and competencies of all areas of business.
Complete SWOT Analysis
Competitors –direct and indirect
CHRISTOPOHER A. BARTLETT
Microsoft: Competing on Talent (A)
In the summer of 1999, a front-page Wall Street Journal article was attracting attention on the
Redmond campus. Under the headline “As Microsoft Matures, Some Top Talent Chooses to Go Off
Line,” the article reported: “Tired of grueling deadlines, frustrated by the bureaucracy that has
accompanied Microsoft’s explosive growth, or lured away by the boom in high-tech start-ups, dozens
of the company’s most capable leaders, all around 40, have opted out—at least temporarily . . .”i (See
Exhibit 1 for the article’s list of senior level departures.)
Steve Ballmer, the company’s recently appointed president and COO, was quoted as saying that
some of the departures were voluntary and some were not, opening opportunities for fresher,
smarter replacements. “We have a bench that is very deep,” he said. “We have people who are fired
up—driven—to lead the next generation.”ii Yet despite the positive outlook, Ballmer clearly
recognized that Microsoft had to change or adapt some of the human resource practices that had
allowed it to assemble and retain what CEO Bill Gates proudly called “the best team of software
professionals the world has ever seen.” Just six weeks before the WSJ article was published, Ballmer
had announced a package of changes that sweetened salaries, allowed more frequent promotions,
and softened some of the pressures that had long been part of the” hard-core” Microsoft culture.
Still, there were some who wondered if the rumblings in the senior management ranks reported
by the WSJ were not the signs of larger looming problems for Microsoft. It was a question taken very
seriously by Gates and Ballmer who understood very well that the company’s enormous success was
largely due to its ability to recruit, motivate, and retain extraordinary talent.
the company’s growth led to changes in the way such policies were managed in the 1990s—and
sometimes to changes in the policies themselves. (See Exhibit 2 for Microsoft’s growth profile.)
Recruiting: Attracting the Best and Brightest
Gates had long recognized that it took exceptional people to write outstanding software. His
preference for hiring extremely intelligent, not necessarily experienced, new college graduates dated
from Microsoft’s start-up days, when he and co-founder Paul Allen recruited the brightest people
they knew from school—their “smart friends.” In subsequent years, the importance of recruiting well was constantly reinforced by Gates, who considered helping his managers hire the best of all possible
candidates as his greatest accomplishment. “We’re in the intellectual property business,” he told
them. “It’s the effectiveness of our developers that determines our success.” Underlining the
importance of hiring and retaining superior talent, in 1992 Gates acknowledged: “Take our 20 best
people away, and I will tell you that Microsoft will become an unimportant company.”iii
For Gates, acquired knowledge was less important than “smarts”—the ability to think creatively;
and experience was less important than ambition—the drive to get things done. Above all, however,
he wanted to use recruiting to continually raise the bar. “I’d have to say my best business decisions
have had to do with picking people,” he said. “Deciding to go into business with Paul Allen is
probably at the top of the list, and subsequently, hiring a friend—Steve Ballmer—who has been my
primary business partner ever since.” As Fortune magazine once observed, “Microsoft has been led
by a man widely recognized as a genius in his own right, who has had the foresight to recognize the
genius in others.”iv Almost from the day he was hired as assistant to the president in 1980, one of Steve Ballmer’s
primary responsibilities was to act as recruiting coordinator. It was an assignment he particularly
relished. According to one senior manager, “Steve’s mantra was, ‘We want people who are smart,
who work hard, and who get things done.’ That simple mantra is something that people still talk
about today.” And once the smartest, most driven were identified, Ballmer and his team were
relentless in getting them on board. “There’s a standing policy here,” said Ballmer, “whenever you
meet a kick-ass guy, get him. . . . There are some people you meet only once in a lifetime. So why
screw around?” In Fortune’s assessment, “The deliberate way in which [Gates] has fashioned an
organization that prizes smart people is the single most important, and the most consistently
overlooked aspect of Microsoft’s success.”v
Although the need for experienced managers led the company to recruit some key people from
other companies, in the early days Microsoft’s favorite recruiting grounds were elite educational
institutions, particularly Harvard, Yale, MIT, Carnegie-Melon, Stanford, and a few highly targeted
others. As growth increased recruiting needs, the net spread wider, eventually targeting 15
universities in the United States, four in Canada, and six in Japan. Microsoft recruiters made visits to
each of these schools in search of the most brilliant, driven students—“once-in-a-lifetime” people—
paying little attention to prior experience. Indeed the company preferred people who didn’t have to
unlearn different company values, work habits, or technological approaches.
Before being hired, however, every candidate had to survive an intense interview process that
many found quite harrowing. Each candidate was interviewed by at least 3, and sometimes up to 10,
Microsoft employees. During the interview, the candidates were tested more on their thought
processes, problem-solving abilities, and work habits than on specific knowledge or experience. And
because developers played such an important role in Microsoft—writing the lines of code that were
Microsoft products—their recruiting process was particularly rigorous.
Technical interviews typically focused on programming problems that candidates were expected
to answer by writing code. Some managers posed scenarios with key information missing to see if
the candidate would ask for data or just move straight to a solution. Then they might throw in an
oddball question like, “How many times does the average person use the word ‘the’ in a day?” meant
to test the candidate’s deductive reasoning, creative problem solving, and composure. If a candidate
gave such questions 30 seconds of thought and said they didn’t know, the interview was effectively
over. If they were incapable of creative problem solving, they were not an appropriate candidate.
Next, an unfamiliar but practical problem—for example, describe the perfect TV remote control—
might be thrown in to see how the candidates broke down the problem, how simple or complex they
made the solution, and if that solution solved customer needs.
As soon as the interview was over, each interviewer would send e-mail to all other interviewers,
starting with the words “Hire” or “No Hire,” followed by specific feedback and suggestions for
follow-up. There was no “gray area”—a good candidate who just cleared the bar was a “No Hire.”
Based on earlier e-mails, people interviewing later in the afternoon would refine their questions to
drill down in areas where the earlier interviewers thought the candidate was weak. The purpose of
the interviews was to push the candidates until they failed, to get a full understanding of both their
strengths and their limitations. (See Exhibit 3 for an interview feedback email.)
After all the input was in, the hiring decision had to pass two screens. If the reviews were
favorable overall, a final, end-of-the-day interview with the candidate’s prospective manager was
scheduled. Based on his or her own impressions and the comments from other people in the group,
the prospective manager then made the hire/no hire recommendation. But to assure that only top
candidates were hired, a so-called “as appropriate” interviewer was also involved in the interviewing
process. A senior manager explained:
Very often, the “as appropriate” interviewer is a person who is outside the hiring group, a
person really solidly grounded in Microsoft culture and committed to making sure that we hire
only those who are going to be good Microsoft people, not just good people for specific jobs.
That person has veto power, which puts a system of checks and balances in, because the hiring
manager may feel a lot of pressure to fill a job, while the “as appropriate” interviewer doesn’t.
Microsoft’s tight control on headcount further reinforced the pressure to resist settling for the
merely satisfactory candidate. Even in the early days, when the company was growing extremely
rapidly, Gates and Ballmer insisted on hiring fewer employees than were actually required to carry
out the work. The internal code for this philosophy was “n minus 1,” where n was the number of
people really needed. Said one senior HR manager:
[Beyond hiring smart, driven people] the second principle Steve Ballmer was preaching was
that the default decision on a candidate is “no-hire.” In other words, unless you can identify a
clear reason why we should hire this person, we should not hire him or her. . . . That principle
has been really important in keeping the bar high and our selection ratio very low.
The company’s credo was that an adequate but not outstanding new employee was worse than a
disastrous appointment. “If you have somebody who’s mediocre, who just sort of gets by on the
job,” Gates explained to Microsoft managers, “then we’re in big trouble.” The “big trouble” Gates
saw was that, while poor performers were quickly weeded out, a mediocre employee might continue
to occupy a place that could be filled by someone brilliant.
Explanation / Answer
Case Analysis:
The case depicts a clear idea about the human resource practices adopted by Microsoft to hire new talents and retaining its existing talent pool in the organization.The complete SWOT analysis is provided below
Strength: As a technical giant of earlier days Microsoft acts as a dream company for all tech enthusiasts. It hires the best talent from the candidate pool from the best universities in the world like MIT, Harvard, Yale etc. The highly motivated and talented people have developed the best software over the years which made Microsoft a leading player in the technical market.Candidates are the great accomplishment for Microsoft and the greatest strength in software development business.
Weakness: The work burden and the creativity which Microsoft demand from its talents sometimes create a problem for the organization as some of the best talents are moving out to other companies.Microsoft's human resource culture is not motivating the employees as higher management members also starting to take off voluntarily.The pool of talent which Microsoft hired is sometimes the weakness as every person in the group has the equal creativity to develop something new and is hesitant to accept some decisions easily.So Microsoft has to revisit the organization chart to see if any changes are possible to retain its experienced senior people.
Opportunity:
Microsoft's strength lies in its talented employee and to do so the company has to change the human resource policy to attract experienced talents from different companies and at the same time, it can retain the existing employees too.As every new tech startups are going to hire talent from all bigger institutes in the USA it's a great opportunity for Microsoft to hire talent from outside US universities like Japan, UK, Asia etc.
Threat:
The new startups which are growing in a bunch these days are hiring talents who are failing to clear the rigorous interview process. The senior employees are voluntarily resigning from their respective positions at Microsoft and going towards new startup which is a much bigger threat to the company.
The Strategy of Microsoft.
Microsoft adopted the no-hire strategy from its inception which identifies the reason for hiring the best talent.According to Steve Ballmer, the current CEO Microsoft hires the smartest people and who can devote the best of them to the company.The company does not give much value to experience as compared to talent. Though higher position employees are leaving company Microsoft thinks that it will create an opportunity for fresh talents.
Hiring Strategy
Microsoft recruitment process is tougher as compared to other companies which recruit from same universities.Sometimes the candidate has to go through 3 to 10 rounds of interview and every round is conducted by different mentors who give their hire or no-hire view for every aspect of the interview process.The questions are usually are to test until the candidate fails in a subject and also to test the tinking capabilities of the candidate.Interviewer sometimes comes from outside the interview team and is well known to company culture.Microsoft retains its (n-1) policy of headcount where n signifies the number actually needed by the company.So Microsoft prefers quality to quantity.
Please comment if anything more required or any doubt
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