Microsoft Reveals the Secrets to Superior Succession Planning
Succession planning and talent-review systems in large corporations can be beasts to handle—something Kathleen Hogan, CHRO of Microsoft, knows all too well. In a recent interview with Gallup, Hogan discusses how Microsoft revamped its People Review process from anxiety-inducing “numbers analyses” to Talent Talks, a meeting with the CEO that focuses on developing talent and planning for the future.
Hogan said that Microsoft is committed to lifelong learning and a growth mindset, and now, under CEO Satya Nadella’s leadership, the company also looks inward to examine why it does things and not just how they’re done.
“One of our adjustments in the HR space was how we look at talent for both today’s and tomorrow’s needs on an individual level, as well as how we look at our talent bench at a higher, organizational level,” said Hogan. “In the past, we had a process called ‘People Review’ that ended up creating significant nervous energy for a lot of people. While the initial approach was sound, it … wasn’t yielding results. Our former CEO, Steve Ballmer, decided it wasn’t adding any value, and it was shuttered in 2014.”
Hogan said that she examined Microsoft’s culture and realized that learning from past mistakes is key to reinventing its future, which is why she decided to revamp the People Review into Talent Talks.
“We needed some way for our leaders to be accountable to building organizational capability, to ensure that our processes were rigorous and our CEO could get an end-to-end view of the depth of our talent,” she said.
Hogan decided to pilot the program for the first year and tackled specific topics of diversity and succession planning. After its success, the company added more topics the second year and now takes a thorough approach to discussing talent at Microsoft.
“We think talent should be something that you think about all the time, so our approach is that Talent Talks are just a moment in time to check in with the CEO versus cramming for a review once a year,” she said.
The framework of Talent Talks, Hogan said, centers around the following objectives: to identify the strength of the bench, how external talent is being cultivated, work through succession planning and review talent inflow and outflow.
Present at each Talent Talk is Nadella, Hogan, the talent leader (Joe Whittinghill), the senior leader and an HR partner. During the discussion, “We talk about the leaders’ directs, how they’re thinking about their succession planning, their talent, the strength of the bench and any external talent they’ve brought in and are cultivating,” she said.
The small group also reviews hiring by level, examines the “net talent inflow,” assesses competitor influence and talks about how the leader and the team may be impacted if someone leaves compared to how they’d fare with robust bench strength, Hogan added.
As potential successors are identified, their leader asks whether they’re interested in becoming a successor, rather than assuming so and putting them on a list. Hogan mentioned a time when she put successors on a list without speaking to them first—a mistake she didn’t make twice.
“I brought this perspective to the Talent Talks process, making sure that leaders create plans that are real, and the potential successors are viable and ready for their roles,” she said. “This forward-looking approach helps us avoid being blindsided and also helps cultivate talent in a way that encourages career growth.”