CHAPTER TWENTY

LEADERS BUILDING LEADERS

High-Potential Development and Executive Coaching at Microsoft1*

By Shannon Wallis, Brian O. Underhill, and Carol Hedly

The opportunity for ongoing learning and development is a commitment Microsoft makes to all employees. Microsoft invests more than $300 million annually in formal education programs directed at the employee, manager, and leader offered by the Corporate Learning and Development groups and other profession-specific learning groups throughout the company.

In addition, Microsoft invests in a smaller group of employees who have the potential for, and strong interest in, taking on more senior, critical roles as individual contributors or managers. These individuals are identified and considered for more focused career development, which may include participation in one of several professional development experiences known as high-potential development programs.

In identifying employees as high-potential, it is important to appreciate that natural “gifts” are not sufficient. For an employee, reaching his or her full potential depends on a combination of natural gifts, what he or she does with that talent (hard work, perseverance, courage, and so on), the experiences he or she is given, the support of others along the way, and the context or culture within which he or she operates.2

At Microsoft, high-potential development goes beyond traditional management or leadership development. Instead, it focuses on accelerating the development of these individuals to advance to the next career stage. The remainder of this chapter will present Microsoft’s case for making a significant shift in high-potential development.

What Led Microsoft to Make the Change

In 2004, Microsoft had more than thirty separate high-potential programs operating around the world. The individual programs were not aligned to Microsoft’s Leadership Career Model and were not easily scalable. Furthermore, consistent criteria for identifying high-potentials did not exist, and areas and segments independently determined the number of “high-potentials” that they wanted to develop. This impacted the larger talent management system and made movement among programs difficult when employees changed geographies, businesses, or functions. Given the various objectives of the programs, the experience of high-potentials was inconsistent across the company.

To build the pipeline of future leaders, Microsoft decided to align high-potential development to create a consistent experience.

Microsoft Bench Leaders Building Leaders—The New High-Potential Development Experience

Microsoft began with questions. What is a high-potential? How is high-potential talent identified? How many Hi-Pos are needed to meet future demand? Finally, how is the development of high-potentials accelerated? The answers to these questions led to a new program: Microsoft Bench Leaders Building Leaders. MS Bench is a long-term leadership development experience for high-potentials. Leaders Building Leaders is a leadership development philosophy that sets up a cascading approach to the investment of time and resources by current leaders into emerging leaders at the next career stage level. Microsoft would apply this leadership development philosophy across less than 4 percent of the population or more than 3,600 high-potentials in 107 countries. To begin, they needed to identify the high-potentials.

High-Potential Identification

Microsoft heavily leveraged the Corporate Leadership Council’s 2005 empirical study, “Realizing the Full Potential of Rising Talent.” A high-potential at Microsoft is defined as someone with the ability, commitment, and aspiration to advance to and succeed in more senior, critical roles (see Figure 20.1).

FIGURE 20.1. HIGH-POTENTIAL CRITERIA

Source: Adapted from Corporate Leadership Council High-Potential Management Survey, 2005.

image

These roles include individual contributor, manager, technical and executive leadership. A high-potential differs from a high performer in that a high performer may demonstrate exceptional ability, but may not demonstrate commitment or aspiration to advance to more senior roles or to do so in an accelerated timeframe. High-potentials are a subset of high performers and are promotable into the next potential band. In other words, not all strong performers are high-potentials. A Hi-Po must have the ability (skills and competencies), commitment, and aspiration to grow and succeed and be a top performer as a people leader in an accelerated timeframe relative to high performers. The combination of the three is required, and only those employees determined to be highest on all three are selected. As they take on risky jobs, this might slow momentarily as they master new skills, which needs to be accounted for. It is expected that they will catch up and continue on a fast trajectory.

MS Bench Tiers

Once the high-potential talent is identified, Microsoft sorts them by peer level groups and career stages. Whereas in the former programs, high-potentials were grouped regardless of career stage and received similar development opportunities, MS Bench provides differentiated development. The tiers are the organizing function for offering the development experiences based on the needs of specific peer level groups and career stages. High-potentials are segmented into a four-tier system, as seen in Figure 20.2: junior individual contributors in Emerging Leader Bench; senior individual contributors and managers in Leader Bench; managers of managers, functional leaders, and business leaders in Senior Leader Bench; and general managers and vice-presidents in Executive Bench. Each tier has a different focus area based on the unique needs of the particular career stage.

FIGURE 20.2. MICROSOFT BENCH TIERS

Source: Microsoft Leadership Development Group.

image

Executive Bench’s development focus is building enterprise level leadership and corporate stewardship, leading at increased scale, scope and complexity. Senior Leader Bench’s focuses on building capacity to lead broad teams and functions and developing a cross-company network. Leader Bench focuses on increasing influence in all directions, increasing ability to achieve excellence in strategy execution, and expanding network across peer group Emerging Leader Bench focuses on building greater self-awareness, understanding the Microsoft business, and increasing ability to deliver results.

Five Drivers of Accelerated Development for High-Potentials

Once sorted into the appropriate tiers, the high-potentials’ development experience begins. Underlying all development are five drivers of accelerated development for high-potentials at Microsoft. The Five Drivers are development activities that significantly impact the development of high-potential leaders and are derived from two primary sources, the Corporate Leadership Council (2005) and Morgan McCall.3

Research indicates that five key areas, if executed effectively, have the most significant impact on high-potential development (Corporate Leadership Council, 2005):

1. Senior leadership commitment to developing leaders;

2. Manager capability and engagement in the development high-potentials;

3. A professional network that allows for contacts throughout the business;

4. A high-quality, customized stretch development plan with clear objectives; and

5. On-the-job experiences.

These five areas were used as design principles in the design of MS Bench.

Five Development Components

MS Bench allows emerging and experienced leaders to learn from each other through five developmental components that are tied to the five drivers. Each component is executed differently at each tier to provide a unique development experience that builds leader capability over the duration of the MS Bench experience. This creates consistency and integrated development for emerging leaders as they move vertically through the MS Bench tiers.

EXHIBIT 20.1 MICROSOFT LEADERSHIP COMPETENCIES (SUBSET)

Microsoft Leadership Competencies

Executive Maturity

OneMicrosoft

Impact and Influence

Deep Insight

Creative Business Value

Customer Commitment and Foresight

The five developmental components, highlighted in Figure 20.3, provide a leading-edge development experience that builds leadership capability over time.

FIGURE 20.3. FIVE DEVELOPMENTAL COMPONENTS

Source: Microsoft Leadership Development Group.

image

Coaching

As a part of the overall development experience, Microsoft offers one-to-one partnerships through coaching and mentoring that involve a thought-provoking process that inspires the individual to maximize his or her personal and professional potential. Through individualized follow-up, coaching, and mentoring, they integrate learning from a variety of sources such as assessment feedback, current role experiences, and development priorities to provide a more impactful learning experience.

Coaching and mentoring enable high-potentials to:

In order to deliver MS Bench on the global scale required, partnership with external organizations was critical. As the design and implementation plans were finalized, Microsoft began a search for partners who could lend additional subject-matter expertise to a couple of key components, executive coaching and learning circles.

Coaching as a Primary Development Component for Hi-Po Development at Microsoft

Executive coaching is offered to all Senior Leader Bench high-potential participants in the first year of their MS Bench experience. Microsoft initially met with CoachSource as the potential executive coaching partner because of numerous references to the firm noted in their study of best practices.

They selected CoachSource for the availability and quality of their global coaching pool, use of technology to support the coaching process, and the flexibility they demonstrated in meeting Microsoft’s needs. In the first year, approximately 214 of 250 leaders took advantage of the executive coaching program via CoachSource. The program has grown over the years to eventually serve over 700 leaders.

Why executive coaching? Microsoft believes that executive coaching provides the most effective ongoing behavioral development for leaders. Participants receive regular, individualized follow-up to help drive behavioral change over time. A coach offers a third-party, objective support for the leader’s improvement efforts.

The definition of executive coaching adopted is the “one-to-one development of an organizational leader.”4 Although there are different approaches to coaching, MS Bench’s focus was around the development of leaders in the organizational context. Coaching is focused on changing leadership behavior in the workplace.

Coaching Process

The coaching design allows for approximately two sessions per month, mostly via telephone (or all via telephone if participant and coach are not co-located). The coaching time line is provided in Figure 20.4. Coaching sessions are focused on feedback from the Microsoft 360-degree assessment, associated Microsoft leadership competencies, other relevant data points, and the Coaching Action Plan (CAP) crafted from the results of this assessment. (A sample is provided in Exhibit 20.2.)

FIGURE 20.4. SAMPLE COACHING TIME LINE

image

EXHIBIT 20.2 SENIOR LEADER BENCH PROGRAM: COACHING ACTION PLAN

image

The purpose of this document is to provide high-potential employees a coaching action plan, agreed upon with their manager; which can complement the Bench development experience. Please work on it with your coach.

It must be completed before the fourth coaching session in order for coaching to continue.

1. Complete the Action Plan

Identify 1–3 Leadership Competencies you will work on (from your 360-degree results or other feedback items).

image image

2. Schedule the Coaching Action Plan contracting conversation with your manager

image Contracting Conversation: Set up some time to review this document with your manager and coach, ensuring a meaningful conversation and agreement regarding your development plan. Contracting is another form of commitment—commitment to working in a partnership as manager and ExPo member. Think of it as a commitment to maximize your potential; which was identified during nomination; and ensure continued strengthening of the criteria on which a high-potential employee is identified: aspiration, ability, and commitment.

3. Prepare questions which will be used to verify coaching effectiveness

At the end of coaching, a “Mini-Survey” will be conducted with your stakeholders. Here are the general questions asked:

In addition, there are customized questions based on your particular coaching goals.

List 2–3 questions that reflect the leadership behaviors you are working on with your coach.

image

4. Senior Leader Bench Learning Commitment:

Signoff:

image Member:

_____________________________________________________

image Manager:

_____________________________________________________

Please take appropriate steps to update and then periodically review your commitments in the Performance @ Microsoft tool and track resulting development activities in your Development Plan in Career Compass.

This coaching process requires clearly defined goals to be created, which are outlined in the Coaching Action Plan. After the plan is created, it is shared with the program managers, allowing an additional audit that tangible goals are the central thrust to the coaching work. Goals have to be clearly identifiable and behavioral in nature to allow for the use of metrics to measure improvement at the conclusion of the assignment (see “Measuring Results”).

Following the feedforward process (coined by Marshall Goldsmith; see Chapter 29), participants are encouraged to share their development objectives with their key stakeholders. Thus these stakeholders become involved in the participant’s growth by being made aware of the development objectives and are able to offer future-focused suggestions related to these areas for development. Stakeholders are then surveyed at the conclusion to measure progress over time.

Coaching is seven to ten hours spread over a maximum eight-month period. After this time, unused coaching hours are lost. This is done purposefully to encourage participants to stay active with their coaches and keep momentum alive. Leaders at Microsoft are often pulled toward multiple priorities simultaneously. Enforcing a coaching deadline, as well as cancellation and no-show policies, actually helps drive greater (and more efficient) use of the service.

All coaching activity is tracked via an online web-based database. Coaches log dates of sessions, time elapsed, and any general notes to the database. Program administrators can then easily monitor progress of the pool and provide monthly reporting.

Participant-Coach Matching

Although matching is accomplished through a “full choice” process, it is also designed to operate quite efficiently. Leaders need the element of choice, which research shows increases participant satisfaction and reduces the possibility of mismatches. Prior to program start, all MS Bench coaches indicate which of the MS leadership expectations are their “sweet spots” (coaches are allowed to select up to four of the eleven leadership competencies). Simultaneously, the development needs of the MS Bench participants are gathered. Each leader is then matched with two potential coaches based on regional location, development needs, and language requirements (in that order). An automated e-mail is sent to the participant with coach biographies attached.

Participants are encouraged to review biographies and telephone interview the first coach of interest. If this seems like a match, the participant commences with that coach. If not, he or she interviews the second coach. (And if that doesn’t work, additional choices are provided, along with a website of all coach bios authorized for MS Bench.)

The selection deadline date is enforced, and participants are reminded that coach availability fills up (which it often does). This seems to encourage leaders to make their selections quickly. For example, in year one, all the matching for 214 leaders was complete within only six weeks.

Measuring Results

Two key metrics are employed during the MS Bench coaching engagement. First, a coach satisfaction survey measures participant satisfaction with their coach. Secondly—and much more importantly—a “mini-survey” measures impact. This coach satisfaction survey is automatically run after four and a half hours of coaching is logged (see Figure 20.4).

The five questions asked are: How satisfied are you with your coach in the following areas:

Q1: Identifies clear priorities for my growth and development

Q2: Genuinely listens to me

Q3: Provides specific, actionable suggestions/advice

Q4: Communicates in a direct and concise manner

Q5: Overall satisfaction with your coaching experience

This graph shows high satisfaction ratings among the five questions surveyed. These data are shared with the individual coaches and adjustments or reassignments are made for any poor feedback.

The mini-survey measures improvement over time in the eyes of key stakeholders working with the executive. This is the best “impact back on the job” metric currently available. Results can be aggregated over a set of participants to show leadership impact over time. The mini uses a 7-point “less effective” (−3) to “more effective” (+3) scale (see Figure 20.5).

FIGURE 20.5. COACHING SATISFACTION SURVEY RESULTS

image

In the first year of MS Bench, 22 percent of raters felt the participants had improved at a +3 level; 59 percent noted improvement at a +2 or +3 level; and an impressive 89 percent of raters observed improvement to some degree with the participants (+1, +2, +3 levels). (see Figure 20.6).

FIGURE 20.6. LEADERSHIP EFFECTIVENESS IMPROVEMENT

image

Roles and Responsibilities

The participant’s boss is an important part of the process. In fact, one of the coaching hours is a three-way session with the participant, his or her manager, and the coach. Managers participate in follow-up metrics to measure improvement over time. Exhibit 20.1 defines the role of the boss (as well as the other key stakeholders).

Roles are clearly delineated for each of the key stakeholders in the coaching process (Exhibit 20.1). Clear responsibilities are defined for not just the participant, coach, and program manager but also for the participant’s boss, skip-level boss, and human resources.

EXHIBIT 20.3 KEY STAKEHOLDER ROLES FOR HI-PO COACHING PROGRAM AT MICROSOFT

Human Resources

Coaching Program Manager (Program Office)

Participant’s Manager

Participant’s Manager’s Manager

Participant (“The Coaching Client”)

External Coach

Coach Selection and Orientation

After a fair amount of research into coach qualifications, the general criteria for MS Bench coaches include the following:

Using the number of MS Bench participants and their regions, a forecast is made on how many coaches are needed in each region (based on a 4:1 or 5:1 ratio). In the Americas, a group of Microsoft coaches already met these criteria, and a majority of those were invited to return to MS Bench. Outside of the Americas, the worldwide resources of CoachSource were brought to bear to screen and bring this talent on board. CoachSource screened the coaches according to Microsoft’s criteria and brought the international coaches into the pool. Local Microsoft human resources professionals reviewed these biographies and selected coaches for the pool.

Approved coaches then indicated their maximum capacity for MS Bench leaders, so Microsoft wouldn’t overload them. Currently, the MS Bench pool includes fifty eight coaches located in fifteen countries, speaking ten languages.

Coaches then attended two virtual teleconference orientations of two hours length, the first focusing on the Microsoft business, the second specifically highlighting the details of the MS Bench program (coach expectations, the process and time line, coach-participant matching, manager engagement, coaching success measures, and invoicing process). Coaches already working with Microsoft were exempt from the first orientation, but all coaches were required to join the second session. Microsoft’s own LiveMeeting technology was used for these sessions.

International Coaching Forum

One of the most rewarding endeavors was the Coaching Forum, held in Microsoft’s headquarters in Redmond, Washington. All coaches were invited for the two-day forum. It began the night before the two days with a welcome reception. Day one included presentations by Microsoft executives and coach round-table discussions. The day wrapped up with a special dinner at the Seattle Space Needle. Day two began with joint time between coaches and Microsoft HR, presentations from several executive coaching thought leaders, a tour of the exclusive Home/Office of the Future demo, followed by a visit (and discounts) to the company store.

Coaches were paid a small stipend, and their expenses were covered once they arrived in Seattle. They were not compensated for airfare or professional fees for the two days. Despite this limitation, 70 percent of the pool attended, including coaches from as far away as China, Ireland, England, Peru, and Australia. Feedback from the two days was overwhelmingly positive: the wealth of best-practice sharing, networking, and overall goodwill generated by the event made it worthwhile for all.

Conclusion

Microsoft has a strong commitment to building leaders at all levels. The MS Bench Leaders Building Leaders program is an integrated and comprehensive high-potential development program encompassing multiple learning methodologies, tailored to each leader’s level in the organization. The research-based design includes elements of assessment, coaching, mentoring, learning circles, action learning, and business conferences.

Designed into the program was an expectation that participants will give back to the program over time. As the program progresses into its fourth year, initial MS Bench participants are now participating as conference instructors and mentors for new participants. In this way, participants are learning that they are part of a community that continues to grow and develop itself beyond the initial experience.

Shannon Wallis is the former global director of global high-potential leadership programs and was responsible for the development of top-tier talent at Microsoft. She is an executive coach, consultant, and teacher with more than twenty years of international work experience in leadership development and organizational change. Prior to her current role, she consulted to and held management positions in Fortune 100 businesses as diverse as Coca-Cola and Universal Studios. Her degrees include an MBA from Duke University and a BS in human development and social policy from Northwestern University in the United States. As a speaker, she has addressed Linkage, the Society of Industrial and Organizational Psychology, OD Network, and regional ASTD and industry events, as well as multiple women’s conferences throughout the United States. She resides in Fairfax, Virginia, with her family.

Brian O. Underhill, PhD, is an industry-recognized expert in the design and management of worldwide executive coaching implementations. Dr. Underhill is the author of Executive Coaching for Results: The Definitive Guide to Developing Organizational Leaders (Berrett-Koehler, 2007). He is the founder of CoachSource and the Alexcel Group and previously spent ten years managing executive coaching operations for Marshall Goldsmith. Dr. Underhill is an internationally sought-after speaker, addressing The Conference Board, Linkage, and regional ASTD, SHRM HRPS, and PCMA events. He has a PhD and an MS degree in organizational psychology from the California School of Professional Psychology (CSPP) and a BA in psychology from the University of Southern California. He holds advanced certification in the Goldsmith Coaching Process. Dr. Underhill resides in Silicon Valley.

Carol Hedly is a Leadership Development Consultant for Microsoft Corporation. She is globally responsible for managing a Senior Leader Bench segment of Microsoft Bench. Carol manages Executive Coaching for Microsoft Bench, and is additionally responsible for Microsoft’s global High Potential Identification Process. Carol was a key leader in the development and implementation of Microsoft’s talent management platform, Career Models. Prior to Microsoft, Carol held a myriad of management positions for a world leader in workforce management services and human resources solutions. She resides in Kirkland, Washington, with her family.

* A version of this chapter appeared in Best Practices in Talent Management, 2009. Used with permission from John Wiley & Sons. All rights reserved.

Notes

1. Adapted from Shannon Wallis, Brian O. Underhill, and Carter McNamara, “Microsoft Corporation” in Best Practices in Talent Management: How the World’s Leading Corporations Manage, Develop and Retain Talent, eds. M. Goldsmith and L. Carter (San Francisco: Pfeiffer, 2010).

2. Corporate Leadership Council, “Realizing the Full Potential of Rising Talent” (volume 1). HR Intelligence Quarterly (2005).

3. M. W. McCall and G. P. Hollenbeck, Developing Global Executives (Cambridge, MA: Harvard Business School Press, 2002).

M. W. McCall, M. M. Lombardo, and A. M. Morrison, Lessons of Experience: How Successful Executives Develop on the Job (New York: The Free Press, 1998).

4. B. Underhill, K. McAnally, and J. Koriath, Executive Coaching for Results: The Definitive Guide to Developing Organizational Leaders (San Francisco: Jossey-Bass, 2007).