"I don't express an opinion unless I'm pretty confident of it."Chris Liddell deals in numbers usually reserved for countries, not companies. The New Zealander is chief financial officer of Microsoft, the world's largest software company — worth more than $250 billion dollars. Liddell was in Australia this week — though much of his attention, no doubt, was on a massive share buy-back program in the US. On Friday, Microsoft almost doubled its buyback plan to 36 billion US dollars — after investors were not keen to let their shares go in an original $20 billion plan. That came after the company posted its biggest quarterly growth in two years. Helen McCombie caught up with Chris Liddell for this exclusive television interview.
CHRIS LIDDELL, chief financial officer, Microsoft: You definitely have some sort of surreal opportunities. When Bill announced his retirement, or his pending retirement, a couple of months ago we had dinner at Steve's house, just the senior team of ten people the night before and he talked about his career and his life and what he wanted to do. It was just a moment in history.
HELEN MCCOMBIE: Chris Liddell could never have imagined he'd be flying so high. As chief financial officer of Microsoft, he's working with Bill Gates and Steve Ballmer, who are legends in the IT industry.
LIDDELL: They're actually incredibly receptive, they're challenging, so neither of them listens to people that just express opinions, if you haven't got your facts straight, if you haven't got your opinion very well thought through, then they can roll right over the top of you, so they're very demanding in that sense, but I've seen both of them in the year that I've been there, listen to people, push aggressively back and then go OK, I agree, and move on, so they are surprisingly receptive, given how successful they've been.
MCCOMBIE: Have you had any experiences where they've rolled right over the top of you?
LIDDELL: No, I don't express an opinion unless I'm pretty confident of it, so I research things and things like the capital restructuring that I did that I pushed quite hard for that we're in the middle of the moment but before I even proposed it I had my arguments pretty well sorted out.
MCCOMBIE: One of New Zealand's most successful exports, Liddell took the job at Microsoft in May last year.
LIDDELL: Bill and Steve have been there virtually all of their working life, so it's not something that you immediately join the family on day one. It takes a while, but certainly, after about six months, I think, I really felt like I was part of it.
MCCOMBIE: In Sydney this week to see customers and staff, he's happy with the performance of Microsoft's Australian operations.
LIDDELL: The June 06 year was a very good one for Australia so we grew in double digits here which, for a relatively large and mature country is very good for us, so, that was a good year, and it's in the top 10 in the world.
MCCOMBIE: It's a difficult time for the company though, with analysts sceptical about it's ability to grow revenue and profits
LIDDELL: It's a challenging environment, it's a very tough environment but in fact I like that so I didn't have any problems at all adapting.
MCCOMBIE: Was being the CFO of Microsoft part of your career plan?
LIDDELL: No I don't think I could say that I had some grand plan from the age of five and that I was going to end up at Microsoft. I've always wanted to be the best in the world at something, so I've always aspired to do something significant, and I guess I'm in the fortunate position now, with the role that I've got, that I could potentially do that.
MCCOMBIE: Microsoft has handed Liddell a big challenge, his job to drive innovation, investment and growth, and he thinks he's making headway.
LIDDELL: Certainly succeeding, it's early days yet. I'm only a year into the job so I'm really trying to elevate the role of finance, and really push finance as a partner, and part of the reason I get out and see subsidiaries is to not be seen as someone who sits in Redmond and just counts the numbers, but someone who actually gets out and tries to understand the business and add value, but finance is taking a progressively stronger role. We completed 23 acquisitions last year which is a record for the company, which means we're doing almost two a month, and again finance is driving all the processes behind that, so we are taking a, what I consider to be a much more leading role in the shareholder value creation and I'm not happy where we need to be yet but we are getting there.
MCCOMBIE: What else are you doing to do then, in this different role for the CFO?
LIDDELL: The big area from my point of view is strategic planning and historically, to be honest, that's been where Bill and Steve have really been the strategic thinkers in the company, now with Bill transitioning to do something else over the next couple of years, other business leaders coming up to really take the mantle of strategic thinking, we at finance and myself as CFO, really need to start to step up and add some value there. So the whole strategic planning process and also the thinking that goes behind it, is something that I'd like to see us be a lot more involved in.
MCCOMBIE: So you'd be coming in a lot earlier?
LIDDELL: Correct. Yes, so at the moment I mentioned the acquisitions before, so we obviously facilitate and carry out the acquisitions but the thinking that goes on, a year or two before those happen, has traditionally been in the business area and I'd like to see finance play much more of a role there.
MCCOMBIE: Investor sentiment towards Microsoft has been negative for some time — moving the share price one of his challenges.
LIDDELL: I think we've got a fascinating couple of years coming up from our point of view. I certainly don't, I am not silly enough to make predictions about where the share price is going to go, not the least of which with the way the world's capital markets are, but in terms of the product cycle that we're going through, I think if I sat down with you in a year by which time the capital restructuring's over, Vista and Office 2007 will have been launched, all of our other products will have been launched, people will be thinking about fiscal year 08, I think the environment could be quite different.
MCCOMBIE: One of the big changes at Microsoft is the diminishing role Bill Gates will play, He's stepping away from day to day responsibilities to concentrate on philanthropic work with his Foundation.
LIDDELL: In terms of planning and in terms of getting people to really lift their game and transition from him, we've got a two year process, so I think it's going to evolve over that two years, none of us internally can really say exactly how that's going to happen, and I think people — the reaction was incredibly positive in a lot of ways, obviously not positive in the sense that he wasn't going to be there, but positive in the sense of what he was going to do with his life.
MCCOMBIE: It marks a new era for the company, how will Microsoft be different?
LIDDELL: I don't think it will be drastically different, because to some extent it's been happening already over the last five years. I mean Bill handed over the role of CEO to Steve Ballmer, five years ago and took on a much more long term focus, rather than a short term focus so he's concentrating already on the technologies that are going to be important five to ten years out, so he was already moving in this direction anyway. We've brought in new people Ray Ozzie, Craig Mundie, not necessarily household names in this part of the world but people who are incredibly good in the technology world on a global stage and they've been progressively taking over some of the responsibilities of Bill over the last year or two if you like, behind the scenes.
MCCOMBIE: How long a tenure does the CFO of Microsoft have?
LIDDELL: Well you never make any predictions like that. Generally speaking if I go back, the ones that have been there, they've probably been there five to six years, so it's not a company that turns people over quickly, it's a tough environment, so people either succeed or not, but generally speaking the people who've got positions of seniority have made a long term commitment, now I'm relatively unusual that I'm an outsider coming into the company, most of the other senior team have been there fifteen to twenty years.
MCCOMBIE: Is there any potential for you to be the CEO eventually?
LIDDELL: That's so far off in the horizon I don't even really think about it, I genuinely don't, I mean, I've got what I consider to be one of the best jobs in the world and if I can do this for the next five plus years, that will be fabulous from my perspective.
