Source: theHRDIRECTOR
Date: January 2006

Vicky Millar, senior HR consultant, Microsoft, explains why good succession planning is central to the company’s vision and success.

"The only way for Microsoft to truly achieve this bold goal is to ensure that both its internal brand and employee experience match its external aspirations"

Microsoft’s mission – to enable people and businesses throughout the world to realise their full potential – grew out of its core values and still remains closely aligned with them. The only way for Microsoft to truly achieve this bold goal is to ensure that both its internal brand and employee experience match its external aspirations. Therefore, creating an environment where great people can do their best work and be on a path to realise their potential is critical to the company’s success. Realising employee potential is central to our people vision, and core to this is a strong focus on talent management and the different elements that this incorporates.

Microsoft recognises the importance of investing in the development of its people and strengthening the leadership pipeline to fill key roles for the business. We believe that its essential to focus on the identification and accelerated development of our future leaders, and our People Review process was designed to specifically address this need. People Review is a senior manager led process that encompasses succession planning, but also provides a deeper dive into our talent and people capability.

The People Review process, that runs from Steve Ballmer, our CEO, down to our senior managers in the UK, is conducted formally every year. This process provides an assessment of talent capability relative to our current and future business commitments. We engage senior management in a disciplined review of prospective leadership talent, and then ensure that we make qualified decisions on desired talent movement in order to build the capability and development of a pool of internal successors for our management and leadership roles. The process also allows us to guide development activities of key future senior managers and make better informed selection and promotion decisions.

Put into practice, senior managers across the business work with their management teams to define the overall organisational people strategy in the context of where both their specific business, and also Microsoft as a whole, is heading. They are asked to assess their current leadership team and their capability to execute against current and future commitments, in order to identify gaps in capability & development and to also build their succession plans. The in-depth capability review enables decisions on the mobility of talent across teams and the whole organisation, with a view to building breath and variety of experiences. It also facilitates discussion regarding graduates, diversity and up-coming high potentials. In identifying and assessing ‘talent’ our senior managers are asked to consider performance against objectives, competencies, behaviour against our core values and an individual’s long-term future potential.

"People are our intellectual capital and this is what not only drives the innovation behind Microsoft’s products and services, but also makes Microsoft a great place to work. Our success has been built on great people."

The objective of the People Review’s is not just an ‘assessment’ of talent capability, but also to drive decision making and concrete action planning to strengthen and build Microsoft’s capability. In particular, great consideration and forethought are given to succession planning & mobility. In-depth conversations are held regarding people, roles and the needs of the business as a whole. If it is decided to move someone into a new role, the vacancy that this creates will also be discussed. Ideally at least two candidates are identified for any role. Succession planning is also highly aligned to our broader workforce planning and talent acquisition strategies. Our succession plans are used strategically for planning and also referenced throughout the year when key openings become available.

We take a long term perspective to succession planning, and seek to match our talent against current and future roles looking forward over a five year period. We look to create a strong internal pipeline of successors, but to balance this with strong talent acquisition strategies so that we are also able to attract the best externally. Another key factor of our succession planning is that it helps us to understand where our gaps are and allows us to plan our future recruitment activity. It’s great to know we have a pipeline of talent, but it’s also critical to know where and when we need to hire externally. It is vital that we get a good blend of external and internal hires based on our evaluation of the roles since it’s strategic to the business to bring in strong external talent and also create opportunities for our internal talent. People come to Microsoft to work with other like-minded & passionate people. In fact our employees tell us that one of the reasons that they like working here is the opportunity to work with the most talented people in the industry, who innovate and challenge convention.

 "We encourage our senior managers to ensure they are mentoring the company’s talent and future successors"

The People Review process is also highly aligned to Microsoft’s development philosophy, which is that 70% of your development comes from on the job learning and experiences – from having stretch goals, assignments and work projects – 20% is coaching and mentoring and 10% is from formal training (online, book or classroom). As a result, we ensure that people on succession plans are exposed to a variety of experiences with sufficient stretch to learn new skills that will ensure they are ready for their next role. Having adopted new skills we encourage these individuals, through coaching and mentoring,
to continue to apply their learning throughout their future career. One aspect of this is ensuring that these employees have access to senior mentors within the organisation. We encourage our senior managers to ensure they are mentoring the company’s talent and future successors.
The annual ‘Mid Year Career Discussions’, where managers conduct focused coaching sessions with employees, further supports the development plans that
will stretch these individuals and prepare them for their future roles.

People are our intellectual capital and this is what not only drives the innovation behind Microsoft’s products and services, but also makes Microsoft a great place to work. Our success has been built on great people. To build on this success, a key benefit of the People Review is to ensure that all our leaders have a common process and language about talent identification, talent development and succession planning. It also enables a consistent benchmark against which leaders can calibrate leadership capability. It creates an environment where senior management are accountable for knowing their talent, developing talent and also talent movement across the company. We know who we need to be investing in, and those employees know they are on the succession plan and that we are accelerating their development.

As we come out of our third year of this process a key learning for us is to ensure that this is a leadership led process, from the top down, and that our leaders take full accountability for both the process and the outcomes. Too often our HR consultants can be drawn into the trap of owning the process instead of playing the role of business partner & devil’s advocate! Through the People Review process we have been on a journey to make our senior managers more accountable for both the process and the outcome. This is still one of our key challenges but we have found that increasing the focus on leadership and senior management readiness has supported this aim.