Tuesday, June 10, 2008

Can Success Get In Your Way?

Promoting life sustaining work environments [LSE] is one of Art of the Future’s key commitments and organizing principles. We believe people should live and work in contexts that lead them to feel alive, creative, focused, energized, reflective, at ease, stimulated, loose, natural, engaged...sustained. To that end, we are constantly scanning information and talking with clients and colleagues about their strategies for attracting and holding the creative talent that differentiates organizations from one another. What follows is a distillation of ideas from our conversation with Warren Ashton, Group Marketing Manager/Staffing Marketing at Microsoft Corporation. Ashton is responsible for crafting Microsoft’s communications programs to recruit prospective tech hires, and he has made a study of branding the company's message in a way that will be attractive to this highly sought-after workforce. We have put Ashton’s precepts into a systemic framework and added other, sometimes contra-veiling, forces that are logically related to Ashton's thinking to present an intriguing picture of how a strategic initiative might be affected by unintended and unnoticed consequences. We use data from a conversation like this one or a published source to analyze driving forces suggested by the data to develop an awareness that opens up new possibilities for strategic thinking and action.

Ashton’s team identified the key factors that make Microsoft one of the best places to work in the United States and throughout the world (according to the Best Places to Work Institute):

“Compensation and salary are the primary drivers. But it isn't all about money. We look at our own strengths and weaknesses, where are we strong and weak. Three things pop out where we are very strong or it is very strategic:
  1. Working with high quality people - “I want to work with people who are on a par with me.”
  2. Career upside - “I can get promoted, make more money, grow my technical skills.”
  3. Big impact on team, company, and, sometimes, society - “I’m looking to work on big projects with volume impact - something that will affect millions of people; impacting the future by coming up with new ideas.”
Ashton also pointed to two “proof points” in the organization’s ability to hire and retain the people critical to their success, i.e., factors that may not be the most salient to a decision but reinforce an inclination and “close the deal.”
  • Reputation: “Everyone is aware of us. Now we're seen as sort of an old school company. We were missing the reputation of being a place with real people. People didn't know we had a personality. Where we did have a personality, it was a negative one. We needed to get the story out that we are a company of real people. When people meet us for the first time, so many of us have the experience that people tell us that they are pleasantly surprised.”
  • Workplace environment: “Most people in our business get personalized private offices for employees. We're mixing those things up. Some people would really like to work on open floors or environments with petitions that can be opened and closed. We're creating flexible environments. The Vice President running a facility can get the sort of space they want; kitchens, couches and chairs - customizing the environment for a particular team but being able to reconfigure it to something else after a period of time.” Microsoft’s Copenhagen facility is an experimental design organized around many small teams with a project incubation focus. “It is a vibrant, compelling, teaming environment. There is nothing there that looks like cubicle hell.”

Let’s take a look at how these factors interact with each other. [
The factors that Ashton focused on will be highlighted in dark yellow in the following diagrams.]

1. Working with high quality people
Ashton’s analysis begins with a simple set of reinforcing elements: the stronger the reputation of the company, the easier it is to hire and retain top-notch creative talent. That creative talent bolsters the organization's reputation which, in turn, enhances the organization’s ability to hire the best talent.
This is a virtuous cycle or reinforcing loop. 2. Career upside
The ability to hire & retain leads to a larger workforce. The quality of those people will improve the product and process quality, innovation and speed to market. This will have an impact on business results and grow revenues. As the company expands, it will find it necessary to introduce more levels of specialization, with differentiated functions and roles. As the number of levels in the organization increases, the likelihood of being at the top of the hierarchy decreases; even star performers are apt to experience the number of levels between themselves and the CEO increasing. This can be seen as improving opportunities for promotion, which adds to the attractiveness of the job; and, thus, positively impacting the organization’s ability to hire and retain talent. You can follow this logic in the diagram below. The result is another reinforcing loop. However, there are at least two other dynamics occurring [shown in blue in the diagram] that would make a job offer to a complex organization like Microsoft less attractive and leave current employee open to competitive propositions:
  • While it is true that a large, prosperous organization is able to offer training to its employees, increased specialization diminishes the diversity of tasks and, thus, reducing learning opportunities on the job. In a smaller company, there is a lot more ambiguity about the specifics of the job and all hands are encouraged to “pitch-in” as needed, increasing learning opportunities on the job.
  • As specialization increases, we’ve seen that positional level in the organization is likely to decrease, negatively affecting salary, stock options and other compensation. In a smaller, fast-growing company, the recruit has an opportunity to get in on the ground floor. So bright, young recruits will see real trade-offs -- both in terms of learning and compensation upside -- between joining the large firm vs a smaller one. [Of course, as the reader may now be thinking, “What about risk?” While a hot, young company might not be around in twelve months, there is no assurance, in today’s business environment, that your job won’t be eliminated in the next corporate reorganization. This is another one of the trade-offs entailed in the employment choice.]

3. Big Impact
- Larger company, larger projects, more opportunity to have an impact; that's a natural sequence of consequences. But, if specialization and functional differentiation make you a relatively small part of a large team with relatively limited responsibilities, your individual contribution and the recognition it receives may well be limited. [Note the blue causal link in the diagram.] The individual’s position in the hierarchy mitigates his/her potential impact. The organization may even blame the individual for not meeting expectations without seeing how the system drivers affect personal results.

Reputation and Workplace Environment:
At any size or stage in its life-cycle, positive business results enable an organization to invest in its people - both in terms of a terrific work environment and the best tools for the job. These enhance productivity as well as the organization’s reputation as a desirable place to work.
Other factor’s impacting a organization’s reputation include the quality of its people [as we’ve shown], and its products and processes. These things are also independent of organizational size or maturity.

Macro/environmental forces:

Ashton also pointed toward one more
factor that will impact all organizations competing for technical talent - "Fewer and fewer students are studying computer science in college. The U.S. is facing a perfect storm." Add to this the increased number of retiring baby boomers in the years ahead and the number of companies vying for the best and the brightest. Large companies like Microsoft do have the advantage of being able to locate in multiple countries around the world to take advantage of low cost, high skilled labor markets; countries like China, India, Russia and Israel where technical degrees make up a relatively high percentage of recent college graduates.

Above we have linked all of the factors we've been discussing. Of course, this doesn't present a full picture of the structural ingredients contributing to Microsoft's ability to hire and retain key talent. We couldn't define that on the basis of one conversation. But, we do believe that this type of systemic thinking has a sort of holographic quality, in that any one data point like our interaction with Warren contains elements of the whole, if you know how to look at the overall situation holistically.

Skillful designers of recruitment strategy like Ashton understand the importance of whole systems thinking: “During our period of hyper growth we didn't have problem hiring the best and the brightest. Microsoft never had an employment story that defined the core anchor of our message to the market place. It was very ad hoc. But as we became more mature, we … had to come up with the marketing plan and a value proposition [that would appeal to those] in the technical field...that distinguishes us and would lead people to join us, especially since a lot of people think of us as 'The Evil Empire!' [laughs].”

To sum up, Microsoft is obviously pursuing a powerful and well-considered strategy to hire and retain skilled technologists. However, a systemic analysis reveals ways that its competitors can turn the company’s own branding approach against this dominant player, perhaps in a manner that is not being anticipated. Rivals may be able to make the case that Microsoft is a Goliath that is less able to utilize creative talent to its full potential and less apt to recognize and reward them for outstanding performance than a smaller, more nimble David. If so, smaller firms win the battle for the star performers and the next Bill Gates won't be working in Redmond. On the other hand, if Microsoft can produce example-after-example of employees who have made a big difference -- in terms that are truly meaningful to the high talent prospect -- it will demonstrate that they have a better story to tell to key players who can keep it performing at the top of its game.

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