Round Table Session

Text: Jeppe Kleyngeld

Photos: Eric Fecken

Round table session about the ‘New Way Of Work’

“A revolutionary experiment”

Microsoft Nederland is applying technology to enable its employees to do things in their own way. The company expects a lot from this “new way of work” but just how capable are CFOs of integrating it in their own organization? Do they even want to? This was the discussion topic at the round table session that Chief Financial Officer magazine organized at Microsoft’s brand new Schiphol headquarters.

A recent CFO Survey conducted by CFO Europe, the University of Tilburg and Duke University revealed that the recruitment and retention of qualified staff is one of the greatest concerns among European CFOs, alongside low consumer demand and the rising costs of raw materials. How to hold on to qualified staff is an issue close to the heart of many a CFO. The “new way of work” will not only enhance employee satisfaction, it will improve corporate efficiency as well. The reduction of email traffic is a classic example. New ways of communicating, such as the Office Communicator enterprise chat program, mean that no time is wasted on endless email conversations. The new way of work concept will also help to ease the traffic jam problem in the Netherlands. People can check their mail at home just as easily as at the office. Technology enables employees to make this transition.

Inevitably, the radical way in which the concept was introduced at Microsoft Nederland created a culture shock that everyone will have to work through. At the moment, the process appears to be shaping up well. Recently, CFOs from various companies visited the new Microsoft headquarters to talk about this issue and to gain inspiration for their own organizations. Bemused, the finance chiefs strolled around the new building with its designer furniture, bean bags, computer game corner and even a “relaxation cockpit.” “We no longer have fixed workplaces, not even for the directors,” says Microsoft CFO Franklin Hagel. “The 660 people who are employed here are free to decide whether to work at home or at the office. The company provides them with a laptop and a broadband connection, as well as a budget to set up a home workplace that meets the applicable health and safety standards.”

The new way of work concept

After a short video designed to give a general idea of the new way of work at Microsoft, the discussion takes off when Bas van Werven, anchorman at BNR News Radio, asks what the CFOs understand by the term “new way of work.” “Detaching people from their workplace,” suggests Bèr Sweering, CFO at Royal Ahrend. Martin de la Rambelje, Director of F&A, ICT and Operations at AD News Media, agrees: “Creating the right balance between life and work. The new way of work can prevent stress.” Michel Elsenga, CFO at Mercurius Group, sees it primarily as an opportunity. Bernhard van Holst, Financial Director at Econcern, nods: “If you don’t go along with the new way of work concept, some labor potential will remain untapped.” The concept also raises certain questions. Michel Elsenga wonders whether it will cost or generate money and to what extent this is sector-dependent. The CFOs also wonder how their corporate culture can survive in a more or less virtual world. “You can give people the tools, but how do you get them to use them?” asks Peter Schrijnemaekers, Finance Director of PCM Publishers. “How do you rally all of your employees behind one goal?”

Hans van der Meer, Marketing Manager at Microsoft, has been studying new work concepts. “It’s a journey you take together. A journey that continues in the new building. Some people take to it like a duck to water, others need more time. The new way of work lets people do things in their own way. Of course, that is something they have to want in the first place. Eventually, you are all pursuing the same goals. That needs to be clearly communicated as well.”

Efficiency

Various parts of the new Microsoft premises have been fitted with state-of-the-art videoconferencing facilities. “It helps us to have meetings more efficiently,” explains Hans van der Meer. “No need to fly to Shanghai for a meeting lasting an hour and a half.” The new building is also a paper-free zone. Everything is done electronically.

Matthieu van Tellingen (Financial Director, ALD Automotive) wonders whether people wouldn’t miss paper: “Sometimes, you like to have something in your hand instead of reading everything from a laptop screen.” Peter Schrijnemaekers believes that is a question of corporate culture. “If all the information is presented digitally, people get used to working without paper. We are using less and less paper in our company, but we haven’t reached zero point yet, like Microsoft.” An added benefit of the new work concept is that it creates more transparency. Hans van der Meer: “All calendars are open, including the CEO’s. And we don’t have a switchboard in this office; it’s in the web mail.”

“And everyone can check out the financial situation,” adds Franklin Hagel. “But how do you deal with sensitive (stock-exchange) information?” asks Philip Limvers (Regional Finance Director, G4S). “Discipline is the answer and technology is its facilitator,” says Hagel. “For example, email is not a good medium for some information. Payroll data and personnel files are locked.” Microsoft hopes that the new way of work concept will make the professional and private lives of its employees run more smoothly. The aim is to tempt people into taking the next step and thus deliver a better performance. “Specific goals are agreed with employees in advance,” explains Hagel. “It’s up to them how they achieve them.”

“Isn’t the performance obligation something that should be hammered home?” asks Bas van Werven, followed by peals of laughter. “We have highly motivated people here,” says Hagel. “We need to put our foot on the brake rather than the accelerator.” Hans van der Meer explains how it works: “The first month of our financial year is pretty intensive, because there are a lot of meetings about targets. That way, everybody knows where they stand.” Martin de la Rambelje points out that unexpected events can still happen during the other eleven months. How do you deal with them? Communicating with people, is the general response. “Problems can be nipped in the bud by organizing plenty of sessions with the people,” adds Hans van der Meer.

Key role for Finance

“The best part of the Finance function is that you can intervene in everything,” says Franklin Hagel. “You really are a spider in the web. One of the challenges of the new work concept is to find out what it means to me as a business partner. I don’t believe that Finance must play a key role in this process, but I do believe that it can.” Matthieu van Tellingen: “The new way of work must not be an end in itself. The link to Finance lies mainly in cost savings and improved efficiency.”

How this improved efficiency is to be measured is another burning question. Providing employees with the necessary technology and organizing a suitable office costs more – out-of-pocket – than deciding not to implement the new way of work. So, logically speaking, it should be linked to a return-on-investment period. “Given that Finance plays a key role in measuring performance, it should do so here as well,” says Philip Limvers. “It’s easy enough to measure sales, but it will be a lot more difficult to measure the new way of work concept.” Peter van Dongen (CFO at Audax) does not think that the financial director should play a pioneering role in the new work concept: “It is the organization that defines the culture. The younger generation operates in a completely different way and changes jobs much more frequently. They have to blaze the trail, together with the top executives.” Richard Borsboom (CFO, Force India Formula One Team) raises the question of risk management: “What if you don’t join in? Are you still in the market as an employer?” Hans van der Meer shakes his head: “You won’t attract the right people with an uninspiring working environment.”

But is the concept viable only in certain sectors? “Obviously, the technology sector will take the lead,” says Franklin Hagel. “But the new work concept is broader. It will become established in other sectors as well.” Philip Limvers elaborates: “Microsoft took a radical approach, but all other businesses will phase it in, perhaps in a more evolutionary process.” According to CFO Siebe van Elsloo of Royal Swets & Zeitlinger, the new way of work lies more in empowerment than technology: “It stems from people and their needs. I think it can play a role in all layers of the company and not just in the upper echelons.”

With the new way of work, the company can respond to the needs of more groups within the organization. Daniel van Dongen, Group Controller at Wereldhave, mentions that it might help more women to become top executives: “The new work concept can lead to less part-time work. People work part-time because they have other obligations besides their job. If more people can work full-time, more women will get a chance to rise to the top.”

The conclusion is that businesses need to address the “new way of work” or they will cease to be attractive employers. Microsoft Nederland is an early adopter and is setting the trend by launching a revolutionary experiment. Who is next? And what role will financial aspects play in staff recruitment and retention? One thing is certain; we haven’t heard the last of the new way of work.

Interview

Text: Wim Groeneveld

Photos: Eric Fecken

“Microsoft embraces the new way of work”

Franklin Hagel, CFO Microsoft NL

Microsoft Nederland expects a lot from the “new way of work”, an alternative way of working, designed to raise the productivity of knowledge workers and companies. Microsoft sees this as a market where it can achieve fast growth. Franklin Hagel, the new financial top man, is destined to play a leading role.

Not everything at Microsoft Nederland revolves around Vista and Office, though these are, of course, the most important trade names. In the coming years the software maker aims to carve out a strong position for itself in the market for tools supporting new ways of working.

The new work concept is a vision in which new developments in information technology serve as drivers for improving the organization of knowledge work. Basically, it involves a fresh look at the physical workplace, the corporate structure and culture, the management style and the mindset of knowledge workers and their managers.

“By enabling the new way of work, Microsoft is responding to certain socio-economic problems that are in urgent need of a solution, such as the traffic jams that are clogging access to the Randstad, where the majority of Dutch businesses are located. Work is becoming less and less bound to physical locations,” says Franklin Hagel, who joined Microsoft Nederland as Finance Director three months ago. Hagel began his career ten years ago at Coopers & Lybrand, during the period when it merged with Price Waterhouse to become PricewaterhouseCoopers.

Hagel: “I worked there for about six years. I enjoyed my job but there came a time when I started thinking about what else I wanted to do in life. I could choose between the manager/partner program and switching to another company. Eventually, I decided to leave PricewaterhouseCoopers. I went in search of a company where I could feel at home. A company that operated in a vibrant and exciting sector. A place where I could make a difference. I started talking with Microsoft toward the end of 2004.” As a result, Hagel joined the ranks of Microsoft Nederland and started as financial controller in December of that year: “That role meshed fairly well with my accountancy background. So, it fitted in with my practical knowledge. I was given the chance to manage a team for a long period of time, a team with whom you work out a specific vision, do business, and where you realize that people aren’t always singing to the same tune. That was good for my management skills.” Eighteen months after joining the company, Hagel left his job as financial controller and started focusing on business control. It suited him perfectly because it allowed him to get closer to Microsoft’s business and focus more on strategic questions and the direction in which the company was heading. Over the course of last year Hagel was fast-tracked to a job at the top: “Since July 2007 I have been participating in the business management team. I am in touch with the decision-makers in the company and have been working more closely with them.” At the start of this year he got a chance to show that he take the lead himself, when then Finance Director Toby Willson left the job to deputize for Microsoft’s financial top man in Western Europe. When Willson became Head of Finance in the UK a few months later, Hagel was officially appointed Finance Director of Microsoft Nederland, starting from the new fiscal year.

DIRECTION

The first six months proved hectic for Hagel as they covered the two busiest periods of the year. Hagel: “I was wearing two hats till July, Toby’s and my own. We have a broken fiscal year, so there are actually two peaks. One is in January, the ‘midyear or review process’ where we more or less take a mental picture of the first six months and make a projection for the next year and a half. The other is from March to May, when the budget rounds are held. From July, I could spend more time with the financial staff, working out the goals for Finance in the coming fiscal year and how to achieve them. There was more space for working strategically.”

Hagel bases his management style on that of his predecessor, Toby Willson: “There are two things that Toby really excels in. First, he is an outstanding people manager, so he sees and understands what makes people tick. He combines this with a razor-sharp analytical mind. He interprets figures quickly, weighs up situations well and maneuvers himself expertly. That’s what has made him so successful. That’s the way I want to do it too.”