Microsoft Competing on Talent

1) Bill Gates believes that Microsoft’s ability to attract, motivate, and retain superior people is its source of competitive advantage. Do you agree or disagree? Why? Yes. Gates had long recognized that it took exceptional people to write outstanding software Microsoft is all about software. Microsoft is a pioneer in this industry and hence attracted extremely intelligent, creative and ambitious college graduates since its start up days. Bill gates knack of recognizing genius in others set a precedent. Prime example is Steve Ballmer who helped Microsoft sustain leadership in competitive market. Bill Gates and Steve have deliberately fashioned an organization that prizes smart people. The intense interview process on thought process, problem solving skills and work habits ensured great match to Microsoft vision. Microsoft’s tight control on headcount to “n minus 1,” further reinforced the pressure to resist settling for the merely satisfactory candidate. Employees were retained by creating a comfortable work environment that provided privacy and morale boost. The work environment was also very competitive with anything less than 100% performance not good enough. Employee ownership has been the golden handcuffs with 10000 current employees options worth >1million in 1999. A well defined linkage between performance and brutally honest feedback has helped in retention. The rigorous selection process, challenging work environment and a organized review and reward process has made people Microsoft’s source of competitive advantage.

2) How effective are Microsoft’s human resource policies and practices? Have the informal processes of the 1980’s been appropriately adapted to the company’s growth during the 1990s? During the early 90’s, Microsoft needed all the drive and passion for its legendary Hard Core culture. That created individual excellence and a passion