How is Microsoft Transforming its Organisational Culture?
"And if you think about culture, it is all about your people and frankly, I think also we know that from a business perspective, it is all about your ability to attract and retain exceptional talent." Kathleen Hogan, CHRO, Microsoft
Company culture is a strategic priority with significant impact on the bottom line. According to the Society of Human Resources Managers (SHRM), nearly a quarter of a trillion dollars has been lost in the past five years due to regretful turnover caused by unfit workplace culture. Research from i4cp shows that, despite a clear financial imperative to do so, only 15% of companies successfully transform culture.
In this article, we will explore:
The opportunity for HR to be viewed as a strategic partner during culture change
Defining and evolving culture at Microsoft
How culture changes: symbolic versus incremental change
The opportunity for HR to be viewed as a strategic partner during culture change
Effective leaders understand the significance of getting culture right. One such leader is Satya Nadella, CEO of Microsoft. “Satya was very clear that culture was going to be a first-class opportunity for us to work on. He was very clear that he wanted to really be clear on the culture and the mission for the company and that those two things hopefully if we could get those right would be long lasting even if the strategy and our worldview would evolve over time,” said Kathleen Hogan, CHRO of Microsoft, in a recent episode of the Digital HR Leaders podcast.
The HR department has several roles to play when it comes to developing and sustaining company culture. These include:
Partnering with leadership. HR has a responsibility and opportunity to act as a culture consultant with the leadership team.
Learning and development. Integrating company values and norms into employee training across the employee lifecycle.
Internal communication. Effectively and transparently communicate culture and culture change initiatives across the workforce and foster a two-way dialogue.
People analytics. Measure organisational culture to understand ‘as is’ culture and progress towards ‘to be’ culture, through activities such as employee listening and Organisational Network Analysis (ONA).
As the pressure to get culture right continues to build, HR has an opportunity to impact business strategy and deliver business value. Far from a ‘tick box’ exercise or one-off project, developing and sustaining culture is a never-ending strategic programme that inextricably ties the work of the CHRO to the CEO.
Kathleen Hogan shares Satya Nadella’s belief from the very beginning of their work on culture that “HR and the HR function was something strategic and something important.” While this kind of buy-in from the CEO might not be a given at your organisation, working on culture change and demonstrating the business value that can be delivered from culture change will aide HR in being perceived as a strategic partner to the CEO.
Defining and evolving culture at Microsoft
“There is no single lever - you have to pull many levers to drive the culture change and you have to stay at it.” Kathleen Hogan, CHRO, Microsoft
Microsoft’s culture in based on three core pillars, all three of which are grounded in the concept of a growth mindset:
Being customer obsessed
Fostering Diversity & Inclusion
Showing up as “One Microsoft”
As discussed above, culture change unquestionably impacts the bottom line. Research from i4cp demonstrates the difference in culture between high performing and low performing organisations. Here we pull out the cultural elements that are relevant to Microsoft:
Source: i4cp
Hear from Kathleen Hogan in this clip taken from her conversation with David Green on the Digital HR Leaders podcast, where she discusses:
The research that informed culture change at Microsoft and the development of the three pillars
The activities conducted in the first nine months of defining Microsoft’s culture
Examples of symbolic changes that clearly demonstrated culture change
How culture changes: symbolic versus incremental change
As mentioned in the clip above, there are different approaches to culture change ranging from larger symbolic gestures to smaller daily changes. An example of a symbolic gesture shared from Microsoft was replacing a closed-door four-hour meeting on company direction, to a one week hackathon where teams from around the world were invited to contribute. Another example was the introduction of a monthly town hall led by the CEO.
While big changes like these send a clear message, the finer details and daily habits adopted by the workforce play a pivotal role in changing culture. It is crucial that leadership, guided by HR, espouse these habits to set an example for the change underway. As Kathleen Hogan pointed out on the podcast, “If your CEO is saying one thing and then five levels down, your managers are not saying the same thing, it breeds cynicism.”
It’s also important for HR to ensure that the workforce have the resources they need to adopt new habits. For example, if you are trying to develop a more data-driven culture amongst HRBPs, it is important to ensure they have the right tools, which are accessible and user-friendly, to quickly and easily access data to support decision-making.
Final thoughts
Having the right culture will have a significant impact on your organisation’s success. A culture change programme therefore becomes a golden opportunity for HR to demonstrate its influence on organisational strategic imperatives, establishing the function as a pivotal strategic partner to the business.
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ABOUT THE AUTHOR
Caroline Styr is the Research Director at Insight222. She is a thought-leader, researcher and writer on people analytics and the future of HR. Prior to joining Insight222, she worked at the Center for the Future of Work where she was an advisor and in-demand speaker on topics related to the future of work. She has also held roles in digital services and transformation consulting at Cognizant. Contact Caroline at caroline.styr@insight222.com