Cultural Change - Microsoft in Australia

Monday, August 1, 2005 - 16:30

Managing the local division of a world brand is not always easy. Steve Vamos, Microsoft Australia 's Managing Director explains to Lauren Thomsen-Moore why the repositioning of the local culture was so important.

When Steve Vamos became Managing Director of Microsoft Australia in February 2003 his main brief was to improve the company's focus on customer and partner satisfaction.

But to achieve this Vamos quickly realised that the entire culture of the organisation had to change; he would have to modify Microsoft's US model and fashion a company more attuned to the needs of the home market.

Vamos is claiming success on both fronts, though he concedes there is much to be done yet in improving the positioning of a brand name which has the distinction of being a pioneer of the software industry.

While in the past, running Microsoft Australia was said to have had a 'paint by numbers' feel [following the example set by head office in the US], Vamos believes it's important that the company has a really strong stance of common purpose in the Australian business, "aimed at Australian customers in an Australian business environment, which is exactly what we have."

"We will obviously leverage the investments and strategies that the corporation is executing globally," he says. "But, we'll adapt them, we'll change them. We'll apply them in a way that is most relevant to achieving what we're trying to achieve for our Australian customers and we are conscious of doing that in a way that is Australian."

Because, Vamos says, you can tell quite a bit when you're hearing the local story versus a, perhaps, global story.

"I try to be very sensitive and conscious of that, even in the jargon that we use; to try to make sure that if we're going to be informal in our communication that we communicate using Australian informality rather than something that's US-centric.

"So when we look at our goals, around how people feel about us, about our customer satisfaction, staff morale, and our revenue growth, they're all set locally. And really the strategies we have to go after [the goals] are local," Vamos says.

Vamos replaced Paul Houghton as Managing Director of Microsoft Australia in 2003, after Houghton returned to the US to take up the position of the company's vice president, US South Region.

He was previously CEO of online portal ninemsn, a joint venture between Publishing and Broadcasting Limited's online investment arm, ecorp, and Microsoft.

Changing the culture of Microsoft Australia has been Vamos's greatest challenge to date.

Part of this has involved moving the company from being a sales organisation to being focused on customer industries.

"That was the most significant structural change, in that we moved away from a predominantly geography-based structure, which was state-based, to one that was national and focused on financial services, the telecommunications industry, the public sector and education, and the commercial group, which really includes retail, manufacturing, and services. So that there are the four industry vertical groups nationally," Vamos says.

And, rather than starting with products then working out how to go about communicating those products through partners to customers, Vamos says Microsoft Australia now starts by asking; 'Who are the customers?', 'What are their pressing business needs?', 'How do our products serve those needs?', and, 'Who are the partners that are best able to help us deliver technology, services and solutions to those customers?'.

"That's been a really big change in the way we do things and also culturally, in that we've had to hire more people, and develop management systems that mean we start with a view of 'What does the customer need?'."

Microsoft Australia conducts a staff survey every year, and Vamos believes the company has made good progress in terms of the way its staff feel about the extent to which it is customer focused.

"I think culturally we've made good progress and that progress was really built on defining the behaviours and the values of the organisation. We've done a lot of work to align the behaviours of our people with those aspirations we have as a corporation."

Vamos says he is also heavily involved in the company's external relations, including media relations, government relations, and customer relations.

"I like to spend a lot of my time talking to people outside of Microsoft. Because not only do I learn what they're thinking and what we should be doing, but it also gives me an opportunity to hopefully make them more aware of who we are and what we do."

Based at Microsoft Australia's headquarters in North Ryde, Vamos leads more than 500 staff nationally.

He is still linked to ninemsn through a board position. He also sits on the board of the peak body in Australia for the Information and Communications Technology (ICT) industry, the Australian Information Industry Association (AIIA), and is a member of the Business Council of Australia (BCA), an association of chief executives from leading Australian corporations who contribute directly to public policy debates.

Vamos first began working in the IT industry as a Marketing Support Assistant at IBM Australia, ending his 14 years with the company as the General Manager of its PC division. The stint at IBM was followed by four years at Apple Australia , during which he took on the role of the company's Australian Managing Director.

Vamos says he feels really lucky to be working in a general manager or CEO role.

"I love doing it. I love working with people. My passion for IT was really about the business of IT more than IT, all the way up until I joined ninemsn.

"The Internet was the first thing I really looked at and said 'Wow, this is exciting'," Vamos says.

He loves the challenge of the ICT industry, as well as the dangers and the way the industry is constantly moving.

"I also love the competitive nature of our industry, I love to compete. I love building a great team, going after ambitious goals, and competing effectively," he says.

According to Vamos, building a great management team can be a hard job.

While finding people with a sufficient IQ, intelligence, and capability is no problem, he says, the big challenge is finding people who have a similar EQ; a similar level of emotional intelligence and a similar view on what makes for a great workplace and behaviours.

A good example, he says, would be if you had a really smart team member who is insecure or defensive or puts their functional silo ahead of the broader business.

"People like that are generally smart enough and good enough to make a contribution, but it's that invisible challenge or obstacle of getting the best out of the whole organisation that you have to deal with," Vamos says.


Vamos believes management and leadership are being redefined. He believes this will continue in a more visible and obvious way over the next 10 years: "As some of the great things that have been written and experienced in this area become more mainstream."

Vamos doesn't see the role of the leader as being the person that knows all the answers, makes the decisions, and is the 'rockstar', but someone who is more involved in encouraging others and creating an environment where other people can lead. He believes that having leadership evidence at all levels in an organisation is important so that all employees are encouraged, engaged, and have a spirit where they can, and want to, contribute everything possible.

"It's about letting people get on with the job, involving them in important decisions, and communicating openly, honestly, and frequently. That's what I think leadership is about. I think that I want that in all of my managers in some shape or form," Vamos says.

Vamos says he views management as a subset of leadership. And he believes it's important for managers to also lead.

As an example, he describes a story in a book he recently read - The 8th Habit by Stephen Covey - that talked about a group of factory cleaners who had poor morale and poor quality of work.

"A new manager for the supervisor comes in and says to these cleaners: "Guys, I want to change cleaning products. I'm going to give you three or four to choose from; can you please test them and make a recommendation on which one we should choose'. Then he said to the cleaners: "I've had a look at the rosters... What do you think a roster should be? Could you go away, come back to me, and recommend a new roster'," Vamos says.

What the boss did, Vamos says, was still managing and supervising, but because the cleaners' contribution changed, their motivation increased and the quality of work improved. "Because their mind mattered, their opinion mattered, their bodies, beyond arms and legs, mattered to this supervisor.

"Now that's a pretty basic element of work, which just shows you that it doesn't matter what you call management, there's got to be an element of what I call leadership in that, which is encouraging and supporting, and getting the best out of people," Vamos says.

Vamos believes that leadership can be developed and it is best developed through experience.

"When I look at what I do today, there's no way on this planet that I could have done it the way that I do it now, 20 or 25 years ago. So I've obviously learnt things. I actually think that developing as a leader is about experiencing. And you experience by watching others; you experience by making mistakes; you experience by doing courses and reading books. You get all sorts of feeds into the things that make you the style of person and leader that you might be," he says.

Vamos says the toughest times he has experienced as a manager involved having to reduce resources. "Without a doubt, if I could go back through the last 15 years to one of my worst days, that's easily it.

"I experienced that in the early '90s when the IT industry had a downturn and IBM was particularly hard hit. And at IBM [when Vamos was State Manager of IBM in Western Australia], we let 1000 people go out of 4000 in one redundancy wave," he says.

But, on the positive side, Vamos says he feels good about the fact that every time he's been through a similar incident, the affected people were understanding: "[They] felt sorry for us having to do it, and they respected the fact that we looked after them and did it respectfully." Though he says it's easily the worst thing that ever happens in his job.

Vamos believes that work should be fun and that one's work environment should feel like home. "In the sense that you can say what you think, you can be who you are; you don't have to fake it and you don't have to pretend.

"So I try to be someone who helps the people that work with me, rather than be a stress on the people who work with me. So I'm happy if my people are stressed by competitors, by lofty goals and ambitions. But I'm not happy if my people are stressed by internal rubbish: by politics and by silos wanting to go off and do their own thing. So I really think that my contribution here is to make it a great place to work and to take unnecessary stress off my people. I'd like to think that I get almost there, but, you know, you never do."

Vamos believes a work/life balance is important and says Microsoft Australia believes family is important.

"Quite honestly, I've seen what my wife has gone through as a mum, and I have enormous respect for women that work and are mothers.

"The fact I understand what family is about; that I know things happen at home that aren't predictable, means that I'm not fussed for a second if one of those executives or managers wants to come to work late, or has to work from home one day, or wants to bring their baby in here," he laughs, while recalling a meeting with his head of marketing, where they conducted a review meeting while out walking her baby in a stroller.

"I think [work/life balance] is really important and, at the end of the day, the more senior you are in an organisation, the less excuse you have for not having a decent work/life balance," he says.

Microsoft Australia was recognised at The Australian HR Awards 2004 for its strong employee-centric culture, offering a wide range of career opportunities and development for its staff. It took out The Davidson Trahaire Corpsych Award for Employer of Choice (more than 500 employees).

"I think that it's nice to get those awards, but what I really get a buzz out of is [the annual] employee staff survey results. It's an index that defines how our staff feel about their working environment. That's something you really hang out for and if you get good results then you feel great. So that's probably what drives and motivates me more than external recognition.

"We had those surveys recently and our results were up slightly in a year where we underwent a lot of change and people were under a lot of pressure; so I was really happy with that," Vamos says.


Vamos is in regular contact with Microsoft CEO Steve Ballmer and says Ballmer is accessible and knows a lot about Microsoft's business all around the world, including Australia.

When considering the people who have influenced him over the years, Vamos says: "I look at Steve Ballmer and I've never ever seen a CEO that demonstrates how powerful passion can be. So that's had an influence on me.

"If I look at my time at Apple [and the way that Apple Co-founder Steve Jobs] operated when he came back; I've never seen anyone be as focused as he is, and willing to take tough decisions.

"I look at my early days at IBM with Brian Finn, who was the Managing Director of IBM [Australia], and I never saw anyone who demonstrated such respect for people regardless of their level in the organisation; whether it was the janitor or the most senior customer executive, he would treat those people with the same level of respect."

Vamos credits the "fantastic" HR directors he has worked alongside with being of great influence.

Looking ahead, Vamos says the key challenges Microsoft Australia faces in the future include the challenge faced by the IT industry to better articulate and position the value of technology with customers. "So, less talk about products and features, more talk about how this helps you in your business."

Vamos says security is another important area in terms of helping customers deal with the challenges of providing secure and safe communications, infrastructure, and technology.

"That requires a change in the way we develop products, the way that we communicate with customers, the way that we work with government, and with other industry organisations," he says.

As for the future, Vamos would love to continue in a CEO role for the next 10 years.

"And during that time, I would love to be able to make a broader contribution to how the workplace environment evolves, so that people can contribute more than perhaps they've been allowed to in the past. That's my hope."

Community initiatives

Steve Vamos has been very active with the IT Fund for Kids.

The IT Fund for Kids is a national fundraising initiative supported by Australia's ICT community. Proceeds from individuals and their organisations support the Starlight Children's Foundation, which is dedicated to brightening the lives of all seriously ill and hospitalised children and their families across Australia, as well as Giant Steps, a New South Wales school for children with autism.

"I'm what they call an industry ambassador for the IT Fund for Kids which is an IT industry fundraiser where we basically get all of the IT companies involved to contribute to putting some pretty exciting fun centres into the children's hospitals. They are little entertainment units that have computers, computer games, and videos. So that's one of my personal focuses in terms of helping the community," Vamos says.