REV: JULY 25, 2001
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 i of the company’s most capable leaders, all around 40, have opted out—at least temporarily . . .” (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 ii Yet despite the positive outlook, Ballmer clearly up—driven—to lead the next generation.” 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. In the first part of this case, we will explore the foundations of Microsoft’s human resource philosophies, policies, and practices as developed primarily in the 1980s. We will then examine how 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 ________________________________________________________________________________________________________________ Professor Christopoher A. Bartlett and Research Associate Meg Wozny prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Some data are disguised. Copyright © 2001 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
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Microsoft: Competing on Talent (A)
was constantly reinforced by Gates, who considered helping his managers hire the best of all possible candidates as his greatest accomplishment....