T H E H U M A N R E S O U RC E A D VA N TA G E

Observations from the Microsoft Interviewing

Experience

Martin Cagan
Netscape Communications Corporation

November, 1996

OV E R V I E W

As a hiring manager for over 10 years, I’ve recruited, interviewed and hired
hundreds of people. As a CTO for a software company, I’ve visited literally
hundreds of other software companies and been exposed to their technical staff
and their company’s cultures. However, one company that I had never had
inside exposure to was Microsoft. While everyone knows of Microsoft’s
reputation for aggressive talent and technical prowess, few seem to know what
goes on inside the Redmond campus and, most importantly, how they are able
to maintain the very high quality of their staff in spite of sustained dramatic
growth. Literally every other high-tech company that I had been exposed to
that had experienced sustained growth has struggled to maintain high staff
quality (e.g. Apple, Novell, HP, IBM, DEC, Sun, SGI). Somehow Microsoft
seemed able to defy this trend and effectively establish staff quality as an
ongoing competitive differentiator.

When I decided I wanted to pursue the possibility of working for Netscape, I

also decided to interview with Microsoft. I had three reasons for this. First, I
had always considered Microsoft an excellent company and considered it
prudent to discuss the opportunities with them as well. Second, I realized that
with virtually any other company that I’d work for, they would in all probability
be a competitor to Microsoft, and in the spirit of “know your enemy”, I figured
the more I learned about Microsoft the better I would be prepared to compete
successfully against them. Third, I’ll admit to the desire to see if I could get an
offer from this company with the reputation as one of the most difficult to get
into.

So roughly in parallel I interviewed with both Netscape and Microsoft. I

won’t discuss much here about the Netscape experience, mainly because it was
very conventional. It was virtually identical to the process I was trained in at
HP and have used myself for years, and that I believe the vast majority of high-
tech companies use. In contrast, the Microsoft experience simply left me in
awe of the incredible recruiting engine that they have built, and even weeks
later I found myself reflecting on the experience and asking myself how I could
incorporate what I learned into my own recruiting practices.

The purpose of this note is to document my experiences.

Note: I have also reviewed my experiences with several other people that
have interviewed at Microsoft, including some that were rejected and also ex-
Microsoft employees. The consistency of the interview process across projects
and even divisions was remarkable. While I was interviewing for a mid-level
management position, others I talked to went through the process for entry-
level and for senior engineer and product manager positions.

THE RECRUITER

The heart of the Microsoft recruitment process is the recruiter. Forget

everything you know about high-tech recruiters. Microsoft’s are different. They
are highly trained, effective, and extremely competent, and deserve a large
degree of credit for Microsoft’s business success.

Microsoft has four main recruitment channels:

 University/Campus Recruiting
 Direct Resume Submission
 On-staff Headhunting
 Outsourced Headhunting
Microsoft only occasionally uses outsourced headhunting, typically for very
specialized positions.

By my very rough estimate, Microsoft has approximately 40-60 full-time, on-

staff, recruiters. These recruiters are supported by an admin staff that plays an
important role in handling logistics for the candidates. They have a separate
building on the campus dedicated to recruiting, with what I’d guess is
approximately 100 offices. Each recruiter is assigned to a functional unit of the
company. It is the recruiters job to get to know the management team of that
unit, the business and technical goals of the unit, and the precise requirements

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of the open positions. The recruiters are centralized so that communication
and sharing can occur across projects and divisions.

THE SCREENING CALL

Candidate’s resumes are routed to potential recruiters, and the screening

process begins. The purpose of the screen is to determine if the person is a) a
reasonable candidate for Microsoft in general; and b) to start the process of
finding the right project for the person.

As with everything about the recruitment process, the screening call is well-
scripted, efficient and all-important for the candidate. The recruiter first
collects considerable background information on the candidate, beyond what’s
on the resume. Then the recruiter tries to narrow down the appropriate job
category (e.g. developer, tester, program manager, etc.). Finally, the recruiter
asks a series of increasingly probing questions. My reading from the questions
was that the recruiter was interested in the actual (versus claimed) job
responsibilities, the degree of imagination and creativity displayed, and overall
personality and attitude. One of the questions I considered the most insightful
was “Tell me about a non-computer related product that you thought was an
outstanding product”, and the follow-up of course was to explain why you
thought it was such a great product. The screening calls lasted between 45
minutes and an hour.

After the first screening call, I was told by the recruiter that I was someone
that she wanted to move to the next stage (interviewing on site), but that she
would first be working to find the right project. I was told I might get additional
calls, which I did.

THE CANDIDATE AUCTION

If the recruiter likes the candidate, the recruiter will champion the
candidate’s cause throughout the company, even to recruiters from other
divisions. The recruiters meet periodically (I’m guessing weekly) to present
good candidates and to try and find potential matches.

While I was personally recruited from an in-house recruiter, there were three
different divisions that all called in order to gauge my interest in their projects,
and to further screen me as to my qualifications for their open positions. I
received a total of four screening calls, one of which was from a recruiting
manager that had been asked to help narrow me down from two divisions to
one (he was asked to determine which of the two I was the best fit for).

CANDIDATE OWNERSHIP

An extremely important point is that throughout the screening process

(indeed, throughout the entire recruitment process), I was given the name and

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phone number of the recruiter that “owned” my resume. Even when another
recruiter would call about a position, “my” recruiter would follow-up to make
sure the call happened and to make sure I was still on board and interested.
Taking ownership and responsibility for candidates was something that was
demonstrated to me by two different recruiters as I made my way through the
process. Follow-up to my questions was virtually instant, and the recruiters
always knew instantly about me and where I was in the process.

RECRUITER TRAINING

The quality of the Microsoft recruiters truly amazed me. I was exposed to
four of them in total, and they were all very bright, very knowledgeable about
the positions they were recruiting for -- and not just at a superficial level, very
dedicated (several talked to me late into the evening), and as you’ll see later,
professionally trained in negotiation.

THE INTERVIEW

THE INTERVIEW PACKAGE

Once a position had been identified for me, I was asked to come up to
Redmond for an on-site interview. Again, everything was very smoothly
orchestrated. I received a call from a recruitment admin person proposing
travel times, and the next morning, by overnight FedEx, I received a several
pound “Interview Package”. This glossy package was produced specifically for
the recruitment organization, and contained the following:

 Cover letter containing full itinerary

 Several brochures on why Microsoft is the coolest place in the
world you could possibly want to work
 Several brochures on why Seattle is the coolest place in the
world you could possibly want to live
 A full brochure on Microsoft benefits (which are actually very
comprehensive)
 Several area maps
 Current press articles about Microsoft
 Job Application (to be fully completed before arriving)
 A limited non-disclosure form (to cover anything competitive I
might learn)
The package arrived at my home during the day, and was promptly read by
my wife, who all of the sudden became Microsoft’s biggest champion. She was

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so impressed by the benefits, the company, and the area that it seemed to turn
her around from initially being very wary of anything to do with Seattle to very
open to the possibility of moving there. I’ve little doubt that the interview
package is aimed as much at the spouse as the candidate.

THE LOGISTICS

The goal of the recruiter and the recruiter admin was to make my visit very
comfortable, smooth and leave a great impression all the way around. After
picking up my car, I was put up in a well above average, luxury class hotel (the
Bellevue Club), and told to eat or drink or play as much as I wanted (at the full
health and sports club) and that everything was already taken care of.

In the morning, I followed my special map and drove to the Microsoft

campus where I entered the Recruitment building. There, along with probably
20 other candidates, I waited while my recruiter was called out to come get
me.

THE INTERVIEW PREP

My recruiter brought me to her office and we talked for about a half hour
about the position and the team. She made a strong effort to position herself
as “my ally” and she gave me lots of advice about what the team was looking
for (I believe this was intentional and in fact instructed, as this becomes
important later during negotiation).

THE MICROSOFT CAMPUS

Microsoft has a large wooded campus on several thousand acres, composed

of approximately 20 2-3 story high buildings. In order to transport the
candidates between the various locations, Microsoft maintains a fleet of vans
for this sole purpose. The vans are only for interview candidates, and the
drivers have also obviously been trained to help the candidates in any way they
can. (I couldn’t help but be reminded of Disneyland, where every employee is
trained that they affect the overall experience, no matter what the job).

I later learned that while Microsoft runs a fairly large employee shuttle
service, for security reasons they don’t want non-employees riding on them.

THE INTERVIEW SESSIONS

The average interview was for one hour, and I met with six people during
the day, including one over lunch in a Microsoft cafeteria.

All of the people I met with were fairly senior, and when I asked if I would be
meeting some more of the people that would be working for me, I was told

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later by the recruiter that only people that have completed the “Interviewing at
Microsoft” class were allowed to interview. It was quickly clear to me that
every person I interviewed with had certainly been through a detailed training
program, and that it was a very specific and explicit program, and that
everything that was asked was asked for a specific reason.

My reading from the interview sessions was that there were two overriding
things that all interviewers were searching for:

1) My technical depth and breadth

2) My general problem solving skills

Each person came at me from a different angle, and I’m fairly sure that for
each that angle was assigned in advance, but each person was looking for the
same sorts of things. I met with people from several levels in the organization,
and with people with different technical specialties. For example, the database
expert quizzed me on the database issues, and the user interface expert on
user interface. The senior managers quizzed me on my knowledge of the
industry and the competitive landscape.

Once technical competence was established, the interview session would

move to the problem solving skills. For this, the interviewer would pose some
hypothetical or actual situation, and ask me how I’d solve it. Then, after I gave
an answer that he liked, he’d change the rules slightly, for example, by
introducing another constraint, and asking how I’d handle that. We’d continue
down this path through several iterations. They were clearly looking to see if
I’d get frustrated or run out of ideas or be dogmatic about one of my earlier
proposed solutions. Note that, for the interviewer, this is much easier said than
done. They have to know the domain enough to have realistic yet difficult
scenarios. They must have thought through the scenarios in advance so that
they could keep the candidate thinking and at the edge of solvability.

INTERVIEWER TRAINING

A friend who is an ex-Microsoft employee that had been through the

Interviewer training later informed me that they are encouraged to make the
interviews challenging for the candidate. They teach that making it too easy
leaves a negative impression. They’re taught to start with easier questions,
but then progress to difficult ones.

The interview team is designed to be composed of mainly peers, with the

hiring manager at the end of the day. While the recruiters are supposed to
focus on personality and whether or not the person is a fit for the culture, the
peers focus on technical knowledge and general problem solving skills.

The formal training covers the normal legal issues of what to ask and what
not to ask, but the main emphasis is on describing the “ideal Microsoft

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employee”. Based on the training, the main factor to look for is “smarts”.
More general guidelines are:

 Hire for Microsoft, not just your division

 If the person is “just ok”, they’re probably not
 Make the interview challenging
 Look for smart, energetic, creative people with strong problem
solving skills
 How the candidate approaches a problem is as important as
the solution

INTERVIEWER COMMUNICATION

Between each interview, I was told to sit tight while the previous interviewer
communicated with the next interviewer. I later learned that there are two
reasons for this. First, any interviewer can choose to end the interview at any
time. In fact, they generally don’t give the candidate any indication of the
length of the interview day. I did have a small sheet with the names, and all of
the interviewers remarked that that was highly irregular, and my recruiter later
said it was because I had been extensively prescreened and the hiring manager
knew I would have a full day. The second reason is that the two interviewers
are instructed to pass along info on any areas where there are open issues
remaining in the mind of the previous interviewer.

Directly after each interview, the interviewer is also instructed to send an e-

mail to the hiring manager and the recruiter, describing their evaluation of the
person, and their assessment of the candidate’s job classification (see below).

By the time I made it back to the recruiter at the end of the day, the
recruiter already knew that the hiring manager wanted to make me an offer.
She told me that I would be receiving a call the following Monday, after they’d
had a chance to put together the specifics of the offer. She finished the day
with a half hour in heavy sell mode, describing the wonderful benefits of
working for Microsoft in the beautiful Pacific Northwest, working with the top
talent in the industry, and how Microsoft would make the entire transition
smooth and painless (they do have outstanding relocation benefits).

She also began to lay the groundwork for an offer by explaining that I
probably already knew (I did) that Microsoft does not pay the very top dollar in
salary, but rather they put together an entire package of salary, bonus, stock
and intangibles that they believe is the best around.

As I left, my recruiter made sure I had the self-addressed, stamped envelope

to put any receipts for anything I might have needed to purchase during my
interview visit, and she encouraged me to take out to dinner that night a friend
of mine that worked for Microsoft.

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 I left with images of John Grisham’s “The Firm” in my mind.

THE OFFER

The purpose of the Microsoft interview process is to decide:

1) Is the candidate a “Microsoft Hire” quality person, for any job?

2) If the answer to #1 is positive, then is the candidate a match for the

specific position he’s interviewing for? If no, the recruiter works hard to
find a better match in another project.

3) If the answer to #1 and #2 is positive, then what job classification does

the candidate fall into?

Basically, for each type of position at Microsoft, there are job classifications
that define the parameters for salary and stock. This provides a ladder for all
jobs. Each interviewer gives his opinion about where the candidate is rated
and this is used to determine starting salary and stock options.

THE MICROSOFT COMPENSATION PHILOSOPHY

In order to understand a Microsoft offer, you need to first understand the

Microsoft philosophy on compensation. Microsoft is a very performance-driven
culture. High levels of commitment and effort are encouraged in every way
possible. Peer pressure seems to be the most effective means, but the
compensation package is also very effective. The philosophy is to give a very
low base salary (generally 25-40% below market), and then supplement the
salary with stock and cash bonuses which are a function of performance. While
many companies do this to a limited degree, this is the central theme in the
Microsoft compensation package.

The problem with this philosophy, of course, is that the base salary may be
far out of sync with the candidate’s current salary package. So the challenge
becomes finding a way to get people to take what appears to be a significant
reduction in compensation. That’s why the negotiation training is so important
for the recruiters. The recruiters spend literally hours explaining the
intangibles of working for Microsoft, and how the long-term value of even a
small number of options can have dramatic upside potential. However, for
most experienced candidates, the delta is simply too big, and in order to
address this, Microsoft offers a starting bonus, which is calculated to fill most of
the difference between your current salary and your first year Microsoft salary.

NEGOTIATING WITH MICROSOFT

When Microsoft presented the offer to me, I was prepared for the low offer,
but I wanted to see how high Microsoft would go, partly in order to figure out

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how serious they are about their compensation strategy. Given that I already
had a Netscape job offer that I preferred, and I knew that the position they
were offering me was a difficult one to fill, I was obviously in a good negotiating
position.

The recruiter presented the offer and I expressed disappointment in the

numbers and said it was not likely I could afford to accept something so low
(which wasn’t just posturing, it was true!). The first tactic that Microsoft used
was to once again go over the various intangibles. The next tactic was to have
the senior hiring manager call me to do the same thing. Having failed on both
calls to get an acceptance, a couple days later I received a call from the
recruiter with a counteroffer. It was explained to me that while the base salary
and initial stock amounts were firm and needed to be firm, it turns out that
they did have some flexibility in the starting bonus and in follow-on stock. I
was offered something called a “multi-year starting bonus”, which means that
the signing bonus money could be added to my base salary for at least two
years, probably three if I pushed she said. And, after three months I would be
granted additional stock options in order to bring the stock total more in line
with the market.

So, the strategy Microsoft uses does allow them to acknowledge the market
to some degree when necessary, yet for the majority of the employees have a
set of relatively fixed pay scales.

L E SS O N S L E A R N E D

The interviewing process confirmed in my mind that Microsoft does indeed

have the highest quality personnel of any large company in the industry, and
that the recruitment process is one of the major advantages behind Microsoft’s
success. I also believe that attracting and retaining the best people is
absolutely essential for any company that wants to successfully transition into
a successful large company. After reflecting on the Microsoft interview
experience, I listed the following “lessons learned”, which I intend to
incorporate into my own existing recruitment practices:

1) Never underestimate the importance and value of the recruiter. Make

sure these people are properly trained, and that they understand their
dramatic and direct importance to the company. Make sure that they
take ownership for the candidate, and that they are aware of their
impact on the overall impression the candidate gets of the company.
Make sure that they are treated as the critical member of the product
team that they are.

2) Train each interviewer carefully on how to probe and assess the talent,
problem solving skills and attitude of the candidate. Several firms offer
live or video-based training on this topic.

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 3) Orchestrate the interview with care, and make sure each interviewer has
an assigned area to focus on. Emphasize the critical nature of
recruitment to the entire interviewing team.

4) Incorporate more performance-based components into the compensation

package. Pay for performance, not for simply showing up to work.

5) Make sure that every hire raises the average talent level in the group.

RANDOM NOTES ON MICROSOFT

LOCATING A MAJOR SOFTWARE COMPANY IN REDMOND

The Microsoft campus does not feel like the Apple campus or Netscape or
other Silicon Valley companies. It truly feels isolated. The Microsoft employees
live in a very sheltered and insulated world. It looks and feels like an ivory
tower. There is remarkably little competitive awareness or direct customer
exposure among the ranks.

Microsoft employees do not think of themselves the same way those outside
the company think of them. Rather than the “Evil Empire”, they view
themselves as crusaders for “doing the right thing”, and “doing it right”, and
that the rest of the industry is just jealous. I couldn’t help but wonder what
would happen if the equivalent of “Radio Free America” was broadcast to
Microsoft employees. I believe that this closed culture would be nearly
impossible to achieve if the company wasn’t located in a relatively isolated part
of the country.

MAXIMIZING EMPLOYEE PRODUCTIVITY

The Microsoft employees I interviewed with emphasized that anything they

needed to do their job was immediately made available to them. They
consistently gave two examples. First, any time anyone has the slightest
problem with their computer hardware or with any systems or applications
software, they have a very large and extremely capable staff of systems
administration people that will respond in literally minutes to correct the
problem. They emphasize studies of many companies that find every
employee spending disproportionate amounts of time fiddling with their
systems, and that this is a very substantial hidden cost. Second, Microsoft
maintains a library available to all employees that can retrieve almost anything
related to the industry within minutes and rush it to the requesting employee.

Also discussed were the benefits of private offices for everyone, free drinks,
free dinners during crunch times, and virtually all-you-can-eat access to the
latest hardware and software.

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A NOTE ON THE MICROSOFT PROJECT STRUCTURE

No discussion related to Microsoft’s success is complete without at least

mentioning the relatively unconventional way that they organize product
teams. As with the recruitment process, Microsoft has refined the product team
structure to a science. There are several excellent published books that
describe the Microsoft product team organizational structure, so I won’t go into
it here, other than to say that the recruiting process is integrally related to the
organizational structure. Having consistency of structure makes it much easier
for the recruiters to search for specific types of people. The actual project
means less than your role on the project.

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