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Stuart Lauchlan

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Talent and innovation the key to Microsoft success

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People are crucial to Microsoft’s ability to innovate, argues the firm’s CEO Steve Ballmer after the technology giant was named as the best place to work in Europe for the third year in a row.

Microsoft won the Best Large Workplace in Europe 2010 award at a gala ceremony at the Great Place to Work Institute’s European conference in Madrid following significant investment in office environments, flexible benefits and technology to empower and enable its staff.

On winning the award, Jean-Philippe Courtois, president of Microsoft International, said: “Investing in people and creating a work environment that utilises the latest technology has enabled staff to transform the way they work and interact with colleagues, delivering a strong work-life balance and a highly motivated and empowered team.”

In the US, flamboyant Microsoft CEO Steve Ballmer enthuses about the quality of the Microsoft gene pool, arguing that getting the best people in place is a number one priority.  He says: “Are we getting the best talent? How is the talent pool? How are we doing? Do people want to come work here?”

“Every year now in our sales meeting, the No. 1 market share statistic I go through is our win/loss rate for college recruits against what you might consider the obvious cast of characters who would be competing with us on college campuses. How are we doing? The answer, by the way, is we have a disproportionately high market share. All fair, all right.

“We win 70, 75, 80 percent of the time when we go up against even the best technology companies in terms of college recruiting, particularly as you deal with some of the issues which a number of the companies in the room deal with in terms of the law of large numbers. You’re also trying to recruit new senior talent that can really help you drive and push into new areas. Sometimes it comes through acquisition, but in our business, a lot of what you need to do to acquire talent is really to go out and acquire it.”

So what does it take to be a Microsoft person? “You’ve got to have inspiration,” says Ballmer. “You can’t just take a bunch of people who don’t know an area and say, ‘oh, ho, ho, good luck! We haven’t been in the videogame business, [so] we’re going to take a bunch of sort of engineers with no passion, with no vision, with no inspiration, and say go build videogames!’.”

That example, he admits, is rather a sore point and one that’s horribly close to home following the initial botched entry by Microsoft into the games console business at the end of the last decade. “In our own case, that was a major investment that we would have made starting about ’99-2000,” he admits. “We dug a fantastically large hole by investors’ standards of about $6-7 billion, and ever since then we’ve been marching forward. But it took people with inspiration.”

Success is also about getting good people with vision who can see what needs to be done tomorrow as well as today, he argues. “We’ve also been out getting the talent who have a point of view,” he explains. “How do we reform? How do we change? What is going to really be different about tomorrow that’s different than today?

“People ask how do you innovate consistently? It turns out one of the things I think I have most come to appreciate over the last two or three years is that, in fact, there is an aspect of R&D and innovation that’s just an execution game. If you have smart people they will do something innovative .As long as you hold them to task of executing in some kind of reliable way, it won’t provide the vision for something that is entirely new, but it will provide beauty and improvement in a lot of ways.”

But there’s a need for long term thinking, he advises, not just the pursuit of short term gains. “Patience is a virtue here,” concedes Ballmer. “You keep investing, you just invest, you get it right. If you don’t get it right, dust yourself off, you get kind of a new cast of characters if you need to, new talent, and you keep coming to find the unique inspiration. And yet, at the same time, if you stop and think about it, you don’t want patience ever to be an excuse for lack of performance. There are things you’ll actually do that are just flat out bad. We’ve done some of those. And at some point you’ve got to be willing to adjust also accordingly. This is one that we’ve spent a long time on.

“Somebody I was talking to, said, what are the worst mistakes you’ve made? It’s the bets you don’t make. It turns out that by far, at least in our business, by far the most important thing that we have to decide is what to do. Every three years, we have to rebirth ourselves."

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