MSFT Finance

The process of career development - at any stage

2008-06-23T18:45:00Z

I have written a few blogs on career development. This will be my last one on this topic for a while but wanted to one more around experiences and career planning. This is directed for people more in larger organizations. For me and for many others, your career is a journey that at times sometimes it is hard to figure out what you should do as a next step. For example for those of you that went and got your MBA, it is difficult to decide if you should get into investment banking, consulting, corp finance, etc. It is also difficult to figure out which variables are important in making the decision (family, money, work life balance, location, industry, development opportunities, large vs. small companies, etc.). In addition, if you pick corp finance for example (which is what I did after 2 years of consulting), you still have to make big career decisions along the way (international opportunities, management roles, different functional finance roles, etc.) Finally, even if you have some preferences on what you want to do, sometimes you are not able to do them as timing not right, not deemed ready for the increase in scope, etc. I have included my thoughts on two career stages below (new grad – undergrad or MBA) and more experienced employee.

For a new finance graduate, it is so difficult to make a decision on what to do. If you are graduating from undergrad and you know that you want to go back for your MBA in a few years time, then that helps. One thing that is an interesting trend that I have noticed is that you are expected to have a foundation in accounting and auditing to reach divisional or the functional CFO level. One approach to think about is to do this early in your career. That is, learn the finance basics, understand financial statements, accounting, etc. that will help you as you gain more responsibility in your career. In addition, it’s important to not job hop early on in your career. Hence, going to a small company from college sometimes is not the best option if you feel that there is some risk.

For MBA grads, as noted above hard to figure out what discipline. Money is a huge factor that motivates people towards I-banking, venture capital and small companies that you think have a chance of going public in the near future. However, enjoying the work that you do and having a work life balance are sometimes overlooked by MBAs caught up in the excitement of entering into a profession with the possibility of getting rich quickly. In addition, some larger companies can offer very good career development, training and diverse job opportunities that small companies sometimes cannot offer. Do not get me wrong, if you think you have found the next Facebook, etc. you should definitely think about it. However, for every Facebook there are 100s of other companies that do not do as well. Just something to think about.

Now for those of you that have been with the same company for 5, 10 or 20 years, you have major career decisions to make as you move up in the organization. Do you try and focus on developing functional expertise in one area and grow scope or go for breadth of experiences? This is really up to the individual and depends a bit on the organization. I have been at Microsoft for 10 years and am in process of moving to France to be the CFO for Microsoft France. I could have stayed at corp in several interesting roles but the experience of being in a subsidiary for myself and family made it clear that this was a great role and made sense for me and is consistent with next steps in my career plan.

No matter what level in an organization, it is important to spend time creating a career plan. This will allow you to have good discussions with your manager, determine what experiences and development you need to execute against your career plan. Yes, things change but having some idea on the direction you want to go helps your manager help you in your career development.

Just some thoughts on career planning. I have seen many Excel models as well as branch diagrams for career plans and think the most valuable part is not the output but going through the process itself.

Thanks,
Byron Rader
Senior Finance Director, Microsoft

What do I look for when recruiting for Finance roles at Microsoft?

2008-01-29T19:08:00Z

I interview approximately 15 candidates a month with various levels of experience and education for finance roles at Microsoft. I very much enjoy interviewing and nothing is better than talking with a great candidate. However, I have had my fair share of painful interviews. I have included below what I usually focus on in the interview. It is clear that with a bit of homework, many candidates can greatly increase their chances of receiving an offer from Microsoft. I focus on three pillars when I interview including People, Business and Finance. I have included some details about each of the pillars below.

People – So you may find it interesting that the first pillar I include is People. However, today, finance is not just about having great analytical skills. One needs to possess the ability to influence business decisions based on business analysis. This requires solid people skills. Hence, it is important how the candidate communicates during the interview. That is, keeps eye contact, listens to the question, gives short and concise responses to questions, shows passion around the topic being discussed (especially when the topic is the candidate) and even how the person sits in the chair.

Business – The second pillar that is critical is a passion for understanding the business. You may find it interesting that Business is the second pillar and Finance is the third. However, without a passion for the business, how will you be able to impact business decision making. From an interview standpoint, this is an area where everyone should do well and is the one that makes me probably the most frustrated. Nothing is worse than talking with a great candidate and when asked why Microsoft, they do not have a clue. I highly recommend before your interview that you research Microsoft, read the annual report, understand how Microsoft is organized, etc. Almost every candidate when interviewing for any job at Microsoft will be asked ‘Why Microsoft?’. Be ready! One of the stronger ways to answer this question, if interviewing for a MSFT Finance role, is to talk a bit about your interest in technology, your passion for finance and then reference a few people that you have spoken with before the interview that work at Microsoft. If you follow this up with a personal story, i.e. your interest in the outdoors if the role is in Seattle or talk about a specific Microsoft product that has had a significant impact in your life, then you have likely answered this question better than most.

Finance – When interviewing for a finance role, the candidate should be able to show some excitement around Corporate Finance. When interviewing, I often ask some basic quantitative questions to see how the candidate answers them. I am not trying to trick the candidate, but more see how strong they are from a quantitative and intellectual horsepower standpoint. The more finance experience you have, the less I will ask in this space. However, if you are, for example, a candidate attending business school and are trying to change industries and or functions, be prepared for a lot of questions on why corporate finance.

I have listed above the three pillars that are important and help me assess whether someone is a good candidate for a finance role at MSFT. You may have noticed that one thing that I do not spend a lot of time on is prior work experience. I will always hire someone that has potential and seems like a great fit with Microsoft with limited experience vs. someone that has great experience but is not strong in either the people, business or finance pillars. Approx 2 years ago I hired a medical researcher for a finance role at Microsoft who is now a top performer in her peer group. She had no previous finance experience but has very strong people skills, a passion for understanding and learning the business plus a strong interest in finance. A winning combination for sure!

I hope this helps if you are thinking about a role in Microsoft and or in Finance. If you are involved with recruiting finance talent at a different company, are there other skills that you look for when recruiting? Do you think that prior finance experience is more important? I am interested in your thoughts in this area.

Thanks,
Byron Rader
Senior Finance Director, Microsoft

Global rotations to develop your finance talent

2007-11-30T15:55:00Z

Microsoft has offices in over 100 countries and derives a significant amount of revenue from countries other than the United States. To ensure that the finance organization has a global view, there are several ways where finance employees can have a global experience.

First, we have recently launched a Finance Global Exchange Program. In this program, we have finance employees who swap roles with someone outside of the United States for six months and then return to their existing role. Clearly they have to be similar roles as we do not give much time for ramping up. However, we have found that if we extend the program for one year, the finance employees most often do not want to come back to their existing role. Instead, they want a new role. We are in pilot phase right now with the goal of extending the program in second half of 2008.

Second, for our high potentials, we often have them do a role outside of the United States for approximately 2 years. There is no process for this but is more on a case by case basis.

Finally, for early talent development we have a 2 year rotation program. One of their four, six-month rotations may include an international experience.

I am interested in what you do in your companies, what has been successful, and what has not.

Byron Rader, Finance Director
Microsoft Corporation

Driving Innovation in Finance

2007-07-31T20:39:00Z

How do you drive innovation in a finance organization? This is one area that we often do not spend enough time on but definitely should. One activity that Microsoft Finance did was what is what we called Finance Thinkweek. Chris Liddell (MSFT CFO) launched a process to seek ideas from all MSFT Finance employees. The process was modeled after Bill Gates' Thinkweek process where employees submits ideas for his review. For Finance, the purpose of Thinkweek was to drive idea generation to improve Finance as well as to drive overall shareholder value for MSFT. We asked for the papers to be submitted in one of three categories:

Personal Leadership
Ideas relating to people, including attracting the best talent, building individual and team skills, and improving the ability of people to contribute to the success of their team and Microsoft.

Business Insight
Ideas maximizing our ability to impact the business, including thinking strategically, developing strategic plans, or influencing key decisions.

Business Excellence
Ideas advancing how we plan and execute on our existing objectives and how we drive real productivity and operational improvement.

The participation and idea generation exceeded expectations as we received over 200 papers from finance employees. Ideas included topics such as widening the 520 bridge (congested freeway from Seattle to Microsoft), improving analytical techniques, changing MSFT capital structure, organization design among others. We are in the process of following up with each author to determine next steps. We have also launched several projects as a result of Finance Thinkweek such as job rotation, external leadership, etc. One result that we did not expect was the amount of energy and buzz that this initiative created in MSFT Finance.

We are very interested in what you are doing in your organizations to drive innovation in Finance.

Byron Rader, Finance Director
Microsoft Corporation

Role of Finance & External Leadership

2007-06-07T22:03:00Z

I have found that finance employees do not spend enough time focused on external leadership. I think of external leadership as engaging with external customers to showcase business processes and technology, actively participating in the external finance community as well as talking to Press (although you have to be careful with the Press one).

At Microsoft, finance employees spend a majority of their time on business insight as well as business excellence activities. Some business insight activities include strategy, deals, business analysis, resource allocation, influencing decisions to deliver business results, etc. Some business excellence activities include accounting, reporting, forecasting, close process, etc. One area that we do not spend enough time on is around showcasing our products to customers. For example, we are in process of leveraging Business Scorecard Manager 2005 which is a new full-featured scorecarding server that we recently launched. In addition, we are very heavy users of some of our more traditional desktop applications such as Excel. Who else is better to demo some of the improved features in Excel around pivot tables than finance employees?

Another area that I would like to see more finance employees engaging in is showcasing business and finance processes. For example, MSFT has some best practices around our rhythm of the business, how we plan and budget, forecasting, etc. We should be sharing some of these best practices with other companies as well as leveraging best practices from other companies. If there is interest, I am more than happy to share some of these best practices and hope that other community members will do this same. Finance should also be more frequently representing the company externally in the CFO community and in professional bodies. There is so much to learn from finance employees at different companies.

One side benefit of external leadership is around development. That is, as we focus on developing key finance leaders in our companies it is more and more important for employees to show external leadership qualities. Talking to customers, interacting with finance employees in other companies is a great way to develop a better understanding of the business as well as people skills.

We have introduced a commitment around external leadership to many people in the finance organization. I am interested in what other companies have done in this space?

Do you reward finance employees for external leadership?

From a Microsoft perspective, we do not reward finance employees directly from an external leadership standpoint. Although, we do find that the employees who are more external do better on average than those who do not when it comes to their annual performance appraisal

Are your high potential finance employees exposed to more external leadership opportunities?

From a Microsoft perspective, we are starting to get some of our high potential finance employees more involved but definitely just starting from a programmatic standpoint.

How do you effectively train your finance employees to be able to effectively communicate externally?

From a Microsoft perspective, this is an area of opportunity for us as think we have a ways to go.

Thanks and look forward to your responses.

Byron Rader, Finance Director
Microsoft Corporation

Welcome to MSFT Finance Blog

2007-04-03T17:02:00Z

Welcome to MSFT Finance Blog. On this blog, you will find details about MSFT Finance such as information about our organization, our rhythm, our challenges, how we leverage technology, etc. Given this is a social networking site, this is an informal MSFT Finance blog that will offer an inside view of finance and MSFT and hope it will start some good discussions and learnings from each other.

For the first blog, I would like to focus on an overview of MSFT Finance. We have approx 2,500 Finance employees located Worldwide (roughly 3% of total headcount) in a variety of roles. Some functions that are included in MSFT Finance include Business Analysis and Reporting, Tax, Audit, Treasury, Corporate Development, Corporate Planning and Analysis, Accounting, Investor Relations, Procurement and Real Estate and Facilities. We have finance professionals located in over 85 countries worldwide.

Our business model is quite complex. There are not many other companies in the world that spend roughly $7B annually in R&D, targeting both consumers and businesses, sell direct and through partners, sell software, host solutions, offer services and sell some hardware as well as have such a diversified product portfolio as we do. We have three business divisions which include Entertainment and Devices (ie Mobility Communications, Xbox, Hardware, Games, Zune), Business Division (Office, MS Dynamics) and Platform & Services (Server, Client, Online Services Group). MSFT Finance plays a critical role to ensure we make the right decisions to help drive the business forward and drive shareholder value.

Let me now go a little deeper into the finance organization. There are four things that I think are important for a successful finance organization which include great people, the ability to provide business insight that drives shareholder value, solid finance and business excellence and finally use of technology. I think MSFT Finance has made some great strides over the past few years in many of these areas. However, as with any company it is a journey and there are a few areas I think we can do a lot more to drive more shareholder value.

First, it is about the people. We are able to attract very bright industry hires, MBAs and college hires. Some drivers include job responsibilities, career opportunities inside and outside of finance, development programs such as what we launched last year called Finance Academy to help train and develop our finance organization and so on. From a career opportunity standpoint, many of our finance employees have done rotations internationally. With that said, we are on a journey and in my opinion we have some work to do on systematic on-boarding and training and a few other areas.

Second, it is around the ability to drive business insight and shareholder value. Finance is involved in developing the overall MSFT strategy, business development, ROI decisions and redeployments, P&L management and so on. We have a strong investor relations team which is essential in a company the size of MSFT. In addition, you will not be successful in the business insight space if you do not have a solid partnership with the business. That is, finance has to be at the table and heard when it comes to making significant business decisions. To ensure solid business partnership, the finance support for the COO and the Business Divisions (which represent approx 50% of the finance organization) reports directly into the business with a strong dotted line into the CFO.

Third, it is about finance and business excellence. This includes not only controls and compliance, SOX, accounting and reporting, but also ensuring we have a solid business rhythm and a common finance framework. Regarding business rhythm, finance plays a key role with driving our annual business strategy reviews; our mid-year review process for the Sales, Marketing and Services Organization; our Planning, Budgeting and Forecasting Processes and so on. Regarding a common finance framework, Chris Liddell (MSFT CFO) launched what is called Finance 3,0 which is a common framework for finance with the focus to get all 2,500 finance employees working around the same goals and ultimately driving shareholder value.

Finally, leveraging technology is essential to drive efficiency and productivity as well as retain your strong finance employees. It is super important that we in finance continue the right investments to move the finance organization forward and focus more time on analysis and making key decisions vs. reporting and data integrity. Given we are MSFT, we leverage our technology for reporting, scorecarding, forecasting and planning, tracking revenue, expenses and headcount and so on. Today we leverage SQL for our reporting engine on top of SAP, we also heavily use SharePoint and Office. In addition, we will be using Performance Point (one of our products in our business intelligence suite offering) to support MSFT forecasting process as well as scorecards for the business. In addition, we are working with the Microsoft Dynamics team on developing a commercially viable product that we will use for our procurement activities.

My goal of this blog was to give you an overview of the Finance organization at MSFT from my point of view. For the next blog, I will pick an area such as Treasury or Planning, discuss our approach, our rhythm, role of finance and how we leverage technology in the particular area. Please let me know if you have any questions and look forward to further discussions and learning from others in the Finance Profession.

Byron Rader, Finance Director
Microsoft Corporation