Leadership and Change at Microsoft - Case Study Example

Leadership and Change at Microsoft Introduction This workshop will focus on the success and challenges behind Microsoft Corporation, an organization whose principles anchor on the following tenets: vision, i.e. rallying its people to commit to change; helping, through constructing responsive attachments; and, leading the organization to eminence. These are environmental stimulants which positively impact on organizations. In a research of 3,871 executives by Hay/McBer (Goleman, 2011), effective leadership was critically studied and the research found various types of leadership, drawn from emotional intelligence context. It appeared that styles greatly affect the functioning of the company along with its units and entities, and subsequently its financial standing with other companies. According to this study, leadership development should not be based on one model only, or it might be stagnant for an organization. It was found that many successful executives and organizations find crumbling and falling after years in the business. One reason for this failure after success is when they depend on the same leadership approach that brought them success from the beginning. Today’s leadership models may not be effective in the future business environment. The world is always changing, the same with the business world (Shambaugh, 2013). The ultimate question troubling a successful business man seems to work this way: How do I know my organization will still hold on in the future? How do we know organizations will still be there standing along with the new ones? According to Rebecca Shambaugh (2013), successful organizations will be led by dedicated teams, composed of men and women who fully cooperate to create exceptional results. The Microsoft organization What makes Microsoft different from other organizations? Power and distinction are ingrained in the “people, processes, and products” that make Microsoft structure different. These three factors provide the organizational significance integrated into management practices. Microsoft develops leaders who produce exceptional outcomes. First, it has a unique culture, a primary concern of any organization. Even in organizations where culture is not the main focus, the employees’ behaviour is still guided by beliefs commonly shared within the organization. Organizational culture is always significant even if managers do not think that the organization has a unique kind of culture (Alvesson, 2002). Most of Microsoft’s customers are IT professionals and administrators who specialize in installations and maintenance of networks. Others are developers who make programs and software, and executives who decide for their companies on the viability of IT programs and systems (Flynn, 2009). Others are ordinary folks who have learned about it by word of mouth and who valued Microsoft when PCs were simply known by the simple name “computer”. The Microsoft Business Model is what makes it unique. Microsoft Corporation has some in-house organizations, formed and concerned with the development of the people and the organization as a whole. One of these is the “People and Organization Capability” (POC), which is tied up with the “Center of Excellence in Human Resources” (HR) within Microsoft. It stands with a vision and a culture that allow people to grow and develop and the organization to be capable of working in a unique environment (Trathen, 2007, p. 66). POC is formed to develop leaders, managers, employees, and organization competencies that trigger positive business change and provide sustainable business outcomes. Solutions from the various activities created are incorporated in the “Organization Capability and Change, Talent Management, and Leadership and Learning” (Trathen, 2007, p. 66). These solutions are based on strong, consistent, and tailored research with resources that developed the Microsoft Systems Model, serving as foundational basis for their many activities. Microsoft’s People Research group is a unit under the POC and is tasked for safeguarding Microsoft’s enterprise-wide HR ingenuities, which are based on solid research principles and good practice. In doing their job, researchers in the People Research work with other members of the POC organization, other MS centers of excellence, and business partners in the HR department, which itself seems like an independent organization. But it is not; the HR department works for the best of the people and the organization. This group consists of several industrial/organizational psychologists who conduct qualitative and quantitative studies to: enhance leadership and management competencies; research the core characteristics of successful individuals and teams; conduct and provide empirical surveys; check on measurement and assessment principles; and construct and maintain ownership over valuation activities. In December 2006, the company started a highly selective succession planning program with a goal of preparing 47 senior executives to become the next Corporate Vice Presidents within the organization. Microsoft has a population of approximately 79,000 employees with hundreds of middle- and high-level managers, along with staffs, teams and experts in various fields of business. What is remarkable in this high-profile program is the provision of executive coaching for each participant. The 47 executives were identified as part of convenience sampling in a study by Trathen (2007), who is himself a Microsoft executive. The program used and studied the viability and benefits of executive coaching. Executive coaching Microsoft develops leaders through executive coaching. There is an increasingly growing interest on the importance of executive coaching interventions. A few studies, however, have been published on this phenomenon, but actual results and calculations regarding return-on-investment measures are not clear (Anderson, 2002; Peterson & Hicks as cited in Trathen, 2007). The concept of executive coaching works this way. The executive hires an executive coach, purposely for performance enhancement, and the process takes place for about six to twelve months. The executive and the coach have to build trust and create rapport to make the partnership effective (Lyons as cited in Trathen, 2007). The stakeholders must have close collaboration, and this involves the Human Resources department (representing the organization) and the executive coach. The partnership results in a triangular relationship, which may affect some relationships and cause conflict. Richard (2003) indicates that executive coaches help by focusing on stress management, time management, career development, interpersonal relationship enhancement and good leadership practice. Kilburg (1996) has his own analysis of executive coaching, arguing that executive coaches concentrate on increasing the executive’s behaviour range, versatility, and efficiency; improving the client’s social and psychological awareness and competencies; developing the executive’s tolerance and scope of emotional intelligence; and strengthening the executive’s toughness and stress management skills. Executive coaching emphasizes tapping the client’s tremendous potential with a goal-focused perspective in order to create more self-awareness that may come out in future situations necessitating immediate actions. Theoretical foundations One of the theorists on executive coaching is Ducharme (2004) who expounded the use of cognitive-behavioral approaches in the context of executive coaching, and made reference on the importance of different approaches to executive coaching. She emphasized the various theoretical approaches based on psychology, such as her support for influencing cognitive behavioural approaches because of its simplicity and proven effectiveness with high-performing sample of executives. This method focuses on individual change that dribbles through the organization in modelling the executive. Another theory, the Rational Emotive Behavior Therapy (REBT), was developed by Albert Ellis (Sherin & Caiger, 2004; Anderson, 2002 all cited in Trathen, 2007). Sherin and Caiger identified six more theoretical approaches used in executive coaching in addition to Ducharme’s theories. Traditionally, REBT was applied to help individuals examine their belief systems, which are based on irrational beliefs and unhealthy emotional reactions. Another theory, the Rational Emotional Behavioral Coaching, which is almost the same with REBT, relies on the idea of unconditional self-acceptance. These two approaches are basically similar, with slight changes in semantics when applied to different situations. REBT focuses on “irrational beliefs,” whereas REBC suggests changes in unrealistic situations. Organizational Strategy and Strategy Formulation Michael Porter (as cited in Trathen, 2007) has formulated several theories and definitions of strategy. He defined strategy as providing “trade-offs” for business competitors. Grant (as cited in Trathen) added that strategy is the reaction instituted by an organization to use its “resources and skill” and the other actions, including risks, produced by its external environment. Grant also added that organizational assets, including knowledge, are considered fundamentals for consideration in the trade-off situation aimed at accomplishing environmental fit. Strategy is related with leadership. Organizations view leadership as a way to attain competitive advantage. Traditional theories on leadership behaviour focused on various phenomena, some of which touched on team members’ relationships, the delivery of supervision and assistance, and providing behaviors (Shamir et al. as cited in Trathen, 2007). Leadership theory New theories have focused on leaders that are able to convincingly and reliably change focus of those who rely on being led to behaviour of independence, i.e. free to lead and be a part of the group that focus on creativity and improvement of the team and the organization as a whole. This needs charismatic leadership, described as the ability to unleash the organizational power and potential by appealing to morality and shared values through the use of self-confidence, self-sacrifice and inspirational communication (Trathen, 2007, p. 49). Charismatic leadership was first introduced to church leaders, but now it has been applied to a group of leaders who are able to convince followers to observe and follow certain guidelines and principles for the good of the organization. Leaders with charismatic traits show confidence, ascendancy, a sense of mission, and the skill to eloquently explain the vision for employees to grasp (House; Conger as cited in Flynn & Staw, 2004). Coaching Leaders Executive coaches can work to provide capability for the leader to raise the organization’s effectiveness and competence (Morgan et al., 2004, p. 30). With leadership development as the emphasis, the organization should have deeper understanding of the concepts of leadership, including its theories, various forms and styles that should be taken into practice by the team and other employees involved. Charismatic Leadership Shamir et al. (as cited in Trathen, 2007) identified three types of change advocated by charismatic leaders, i.e. nurturing their follower-companions to a higher need as demonstrated in Maslow’s need pyramid, developing followers’ morality consciousness, and encouraging followers’ capacity to place the needs of the organization over and above their needs and interest. Charismatic leadership’s main elements include having a vision, understanding, and enablement (Choi, 2006, p. 24). The changes can be perceived in the organizational culture, to include the flexibility and adaptability of the employees. Charismatic leadership can enhance organizational performance (Flynn & Staw, 2004). Other researchers have supported the relationship between charismatic leadership and organizational performance, while still others suggest that leaders of this type can exert substantial convincing power over followers and co-workers at the different levels within the firm. Most studies on charismatic have focused only on the “internal” operation of management, but little attention is given on the external aspect of management. This involves work focused on driving an organization through difficult times, looking for inadequate resources, or acquiring help from external sources but considered stakeholders (Trice & Beyer as cited in Flynn & Staw, 2004). Another external relationship that needs charismatic leadership is relationship with suppliers, customers, and other stakeholders. Researchers have also focused on external management functions, such as “boundary spanning,” network making, and reputation management (Flynn & Staw, p. 310). Elements of Charismatic Leadership The term “charisma” seems to be a magic word, but actually it has been used in religion and politics. It means “gift” in Greek, but the Weber dictionary refers to it as a personality characteristic. House (as cited in Choi, 2006) conducted an extensive study on charismatic leadership. There are two remarkable types of charismatic leaders: personalized or socialized. Personalized refers to “exploitative, non-egalitarian, and self-aggrandizing,” which, according to Choi, has negative consequences for followers and the organization. Socialized charismatic leadership is the non-exploitative type. It is used to motivate followers to produce gains for the organization but without regard for the leader’s needs or interest. This also refers to the leaders’ determination to help followers by expressing “higher-order goals” that demand the followers’ basic needs. It instills in the followers a kind of power to pursue those goals. It is more of a developmental type but not the one that creates blind obedience (Dvir et al. as cited in Choi, 2006). Many previous studies suggest that socialized charismatic leadership is composed of the elements of “envisioning, empathy, and empowerment” (Bass; Burke; Conger & Kanungo, all cited in Choi, 2006). Envisioning encompasses making an entire picture of a wished for future where stakeholders can identify and which can create excitement. The making and communication of a vision is the most popular traits of a charismatic leadership. Charismatic leaders make a vision that elucidates perfect goals for the firm, and articulates values appealing to the members (Conger & Kanungo as cited in Choi, 2006). Empathy is understanding the followers’ motives, values, and feelings, and it includes touching on the perspectives of other persons. Empathy may define relationship-oriented leadership behaviors, for example consideration, which can refer to shared expectation, “respect for and support for another person’s ideas, and appreciation of their feelings” (Choice, 2006, p. 27). Empowerment refers to a process that can lead to developed “perceptions of self-efficacy,” or belief in one’s self to do tasks with skill and talent (Choice, 2006, p. 28). Organizations that empower employees and other stakeholders to adapt to change, from the lower- to middle- and upper ranks, in a value emergent strategy, need leaders who can eloquently provide the strategic aims and goals of the organization, at the same time able to guide cultural integration due to some smaller strategic changes. Going back to the concept of executive coaches, coaches who provide strategy coaching to charismatic leaders might discover opportunity to also practice behavioural coaching. Professional executive coaches get to know of these evolutions in the leadership knowledge, and incorporate such educational process into their interventions (Grant & Canaugh as cited in Trathen, 2007). On another view of leadership, there is the transactional leadership which is related with management through the construct of role and task specific guidance along with management. Transformation leadership leads to intellectual imagination, concern for the individual about their development, and charismatic motivation. Changes in strategy are often enforced using change management methods, acknowledgement of one’s capabilities, and positioning through the various domains in order to be greatly successful. An executive coach can help in giving an external viewpoint on the positioning of these domains to develop the chances of success, and requires a complete interdisciplinary basis to make it effective. The common conception of leadership is that this concerns traits of a person. However, charismatic and transformative leadership looks at the context of systems theory and the interrelatedness due to feedback provided in the field. This developed in 1975, in which theorists saw a relationship between leadership and social systems (Salancik et al. as cited in Trathen, 2007). Shared leadership is added to this new concept. Using this method, leadership becomes a collaborative process demonstrated by everyone in the organization. Executives are constantly pressured to provide results. As leaders have to know how to respond to immense pressures, they have to also determine their weaknesses and insufficiencies, take suitable learning-based programs to improve their capability in order to become better leaders and managers. Leaders that grow and reach this stage of maturity often experience a change in themselves, from a selfish, autocratic and defensive, and directive leadership style towards a more rounded, thoughtful, and innovative make-up (Anderson & Anderson, 2001). Transformational organizational change can lead to a distinct type of organizational experience that is philosophical in essence, and a leader who wants to improve his style and personality as leader and manager can also experience the same philosophical journey and enlightenment which is fostered by critically self-reflective thoughts and behaviors. Executive coaching is a creative method to help leaders along these areas of development. In a study by the Harvard Business Review, the researchers found that senior executives show “Alpha Male” traits; meaning they are unemotional but logically investigative, show less concern for people and emotions, with a propensity of changing into stimulating, implying or abusive leadership methods under pressure (Lundeman & Erlandson as cited in Trathen, 2007). This type of leaders can be categorized as “Driver,” as described by Bolton and Bolton (cited in Trathen, p. 50), and are likely to seek control and overtly show their assertiveness through memos and directives. Executive coaching can “heal” and provide individualized leadership development in “just-in-time” methodology. This intervention can also emphasize on change at an interpersonal type, driven towards promoting greater emotional intelligence and awareness (Goleman, 2011). We can focus on more desired leadership in the context of self-awareness, i.e. having increased levels of feedback within the organization, which increases communication and performance (Levy & Cober as cited in Trathen, 2007). Executive coaching has been found to have exhibited perceptible and quantifiable positive outcomes, particularly on organizational performance, and thus gives us benefits in the form of good leaders and followers (Trathen, 2007). Moreover, leaders who are enthusiastic to exert the energy and become transformational leaders have to know the challenges, pain and benefits of the experience and become more equipped to lead their organizations on journeys of transformational change in a similar fashion. This type of leaders who exhibits transformational traits tend to concentrate on the long-range organizational challenges, and strategically support change initiatives with a strong focus. But before going on an organizational journey of change, transformational leaders have to discern the context and background of the organization’s journey, in other words, its readiness for change. Plan should be appropriately instituted along with internal and external stakeholders. Whether the organizational change needed is to be developmental, transitional or transformational, leaders of this category should have the required social capital to institute the most suitable approach, according to the cultural maturity of the organization and the stimulus for change (Trathen, 2007). The Needed Competent Leaders Organizations and executive coaches are mandated to know and understand the concept of leadership and its development, and shorten these complicated constructs into handy, usable and actionable contributing elements. Leadership is a complicated construct that is describe and understood by means of competency models (Boyatzis; Lobel; McCall & Hollenbeck as cited in Trathen, 2007). There have been several paradigms of this sort of elements but they have evolved when many attempted to categorize traits that tended to refer to leadership success. Learning Responsiveness Much research has focused on understanding leadership, knowing the most appropriate methods to attain the best of leaders, and exploring ways to identify leadership traits before such prospective leaders practice their skill. This is one of the activities of the Center for Creative Leadership (as cited in Trathen, 2007), whose past research focused on the effects of intelligence and personality on leadership efficacy. But IQ has shown to be a rather poor indicator of leadership quality and success in different areas (Gladwell as cited in Trathen, p. 57). CCL’s study showed that learning through experience can connect to future capability and successes. Microsoft’s growth is attributed to effective leadership implemented by a team of experts and professionals: experts, meaning they know their field and their knowledge was drawn from experience and professional executive coaching; and professionals, which means they have practiced it for a long time and they know how to do it professionally. Microsoft grew from a relatively small company into a leader in IT software. In determining the whole culture of the company, researchers conducted an extensive data collection with emphasis on quantitative and qualitative methodology. The results provided an understanding of Microsoft’s value proposition. The registered Microsoft Leadership Competency Model was developed by expert researchers, directing their attention on outstanding leaders in the various areas of international business. The extensive research pointed to competencies instrumental to effectiveness and success for leaders that were differentiated by their holistic performance from typical leaders throughout the organization. The outcome was competencies that are behavioural constructs consistent with broad leadership attributes (Trathen, 2007, p. 70). The leadership and competency study on Microsoft provided empirical analysis on the known knowledge gap related to leadership styles and the executive’s willingness and skill to attend executive coaching. Investigating the executive’s readiness was conducted by probing relationships between capability procedures and knowledge of agility from a sample composed of Microsoft senior managers who were provided executive coaching. Critical Analysis There is one negative view (or positive) that we can draw from the Microsoft study, particularly with their organizational view and implementation of executive coaching and learning agility. We have to state here that executive coaching and leadership enhancement, including learning agility, is conducted on a one-on-one interaction between the executive coach and the executive with the aim of improving the latter’s performance, considering the many responsibilities and challenges he/she faces in the course of the many activities. Leadership is a multifaceted concept that can be clearly understood through the various competency models. Leadership competency is the result of the various thought-provoking experiences, exposure to the different circumstances and different kinds of people and experts, in which leaders encounter mistakes, impediments, and negative feedbacks. Executive coaching can be seen as a tailored leadership practice, aimed at enhancing the managers’ performance. Participants in the study reported an increase of self-confidence, among the other characteristics mentioned in the questionnaire. Results of the findings of the software CHOICES® used in the study revealed that the Microsoft senior executives had known and learned agile, and have the larger chances of improving their skill and competencies. The higher learning agility scores provided the conclusion that the executives had the capability to learn along the way and re-introduce what they had learned to other workplace environment. This basis provides their level of readiness to implement their knowledge earned through executive coaching. The data gathered from the sample revealed rather clearly that changes in this “leadership competency demonstrate a solid meaningful positive correlation with learning agility” (Trathen, 2007, p. 134). References Alvesson, M. (2002). Understanding organizational culture. UK: Sage Publications Ltd. Anderson, D. & Anderson, L. (2001). Beyond change management. San Francisco: Josesy-Bass/Pfeffer. Anderson, J. (2002). Executive coaching and REBT: Some comments from the field. 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