Microsoft is on it!

On April 15th CNBC published an article detailing how Microsoft responded quickly and efficiently after an email was shared throughout the company about workers complaining about harassment and mistreatment in the workplace.

Microsoft CEO, Satya Nadella addressed the concerns and enacted changes at every level of the organization. Some of the major changes include hiring more people to investigate misconduct claims, having diversity and inclusion as part of the performance review for a broader group of executives and introducing new training materials that center on what is appropriate workplace conduct and behavior.

Nadella addressing the concerns openly with the entire company through an email sets the right tone from the C-Suite for the rest of the organization to learn from. Microsoft’s responsiveness is a great example for other major corporations to follow.

One of the best practices I’m seeing companies do is to actually measure diversity and inclusion as part of the performance review of the company’s leaders and executives.

Another new measurement I’m seeing included as part of the overall performance review of the exec leadership team is the assessment of the progress made through digital transformation with quantitative measurements and a system of dashboards to see how the corporations is doing both with the external customer journey and the internal tech enablement of the work force and adding of IOT enablement and digitizing the back office with technologies like RPA.

The third new metric companies are looking at including in performance review is Environmental, Social and Governance (ESG) effectiveness.

Companies need to be ready to respond to a new set of constituencies: millennial workers who care deeply about a corporation’s mission statement and social impact and investment firms where one in four dollars are now going into ESG related funds. It is worth considering bringing ESG to the forefront of a performance review to incentivize management to reach and surpass the new standards that are being set.

As part of annual performance review including some or all of these metrics will help keep the company contemporary, aligned with its employees, customer base and in step with their large shareholders.

Certainly the key financial metrics investors focus on need to be the foundation of any annual performance review; these metrics include EBITDA, profit growth, market share, etc. Adding one new metric from the three topics I suggest (diversity/inclusion, digital transformation, and ESG) to the traditional performance review system can be a positive and motivational way to be sure the company culture is up to par and well-aligned with the company’s overall mission and values and in line with institutional investors.

It is well known that the previous CEO at Microsoft did not uphold a high behavioral standard and that Nadella has done a fantastic job at reinvigorating the company culture since he took over as CEO in 2014.

It is refreshing to see a corporation handle a behavioral misstep so effectively and efficiently.

Kudos to Microsoft for setting a great example!

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