908: Back to School | John Rex, Former CFO, Microsoft Corp. NA

As John Rex tells it, when he first arrived inside the finance function at Microsoft Corp. in 2007, one executive greeted him with “Hey, welcome to Microsoft—if you’re still here a year from now, let’s reconnect.”

A senior finance hire with experience in manufacturing and consumer products at such companies as Novartis (3 years) and Kodak (14), Rex was to find the message behind the conditional invitation particularly prescient only 12 months later, when he “very nearly got the boot.”

Seated across from his boss, Rex was “read the riot act” for having absorbed what the boss deemed to be only “superficial knowledge” of the developer’s plus-size menu of products and services.

“I knew that he was right, and I realized that what had gotten me ‘here’ wasn’t going to be enough to take me ‘there’—and that basically I had to go back to college,” explains Rex, who adds that during the months that followed, he spent nights and weekends learning everything that he could about the nuances of the “go-to-market” model and the licensing approaches that governed the company’s flow of revenues.

Still, Rex tells us, he understood that in order to succeed as a finance leader at Microsoft, he needed to dramatically overhaul the management approaches and operating style that had served him well for the first 20 years of career.

He continues: “I was accustomed to having information flowing toward me as a key decision-maker, whereas at Microsoft, interestingly, there was a much more egalitarian type of culture. All of a sudden, I couldn’t depend on information flowing to me. Instead, I had to become a very proactive consumer of information.”

To increase the flow and absorption of information, Rex spent more time every day in reaching out to others in sales and product development, while at the same time allowing himself more “alone time” for consuming new information.

In fact, Rex found that “alone time” was an important tenet of the Microsoft culture that underscored its founder’s wish to have the company achieve the feel of a university, where every employee had dorm room—aka office—to which to return.

Today, Rex views the hypothetical 12-month tryout period that the Microsoft executive attached to his arrival welcome as being not malicious but simply honest, given that the retention rate of Microsoft senior hires at the time was less than 40 percent.

Says Rex: “In the end, I became not just a much more effective leader but also a more credible one because I understood the business much better than I had before.” –Jack Sweeney

CFOTL: As a former CFO and now ongoing C-suite leadership coach today, how do you feel that CFO leadership has changed over the years?

Rex: Well, I’m going to take the liberty of extrapolating what I’m observing about leadership and applying it to CFOs because I have a very hard time in separating CFOs from other senior leaders. There are some things that they all very much have in common, but let’s look at things from the perspective of the CFO.

Over time, particularly in American business, we reward people for knowing their stuff. Now, there’s nothing wrong with this. You need to know your stuff. I myself really needed to bone up and know my stuff at Microsoft. Doing so is just vital.

The evolution that I see happening in the business world—and this fully applies to CFOs—is that the best leaders are developing this combination of subject matter expertise and deep curiosity. This allows them to show up with what I call “humble confidence.” They are very, very confident in their subject matter expertise, as they should be and as they need to be, because this is required of them. But they are also extraordinarily curious about the vast universe of things that they don’t know. Maybe this is the marketplace; maybe it’s opportunities. They just have insatiable curiosity. As a result, in virtually every instance they show up not as arrogant—even though they know so much—but as humbly confident and curious.

So, whereas the CFO of years gone by would often show up as the know-it-all with a tell-people-what-to-do, tell-people-what-not-to-do kind of attitude, I would say that today’s CFO is hypercurious about what’s possible for their enterprise, for their market, for their customers, for their organization, and for their people. They’re bringing curiosity to every conversation. This leads them to take an approach that is much less interrogatory than it used to be.

When I was growing up in the corporate world, it seemed to me that the job of senior leaders was to interrogate everybody else. Every time I went to a strategy review or quarterly performance review, it felt like a dental visit. The best leaders today have a different approach. They’re just wildly curious about everything and bring this mind-set of curiosity to every conversation. This has a multiplying effect because it encourages people to think beyond their normal boundaries—including those involved with rank and privilege and propriety.

In other words, people used to think, “Oh, I can’t say this because the CFO is in the room” or “I can’t say this because it’s inappropriate for me because I’m too junior” or whatever. The effective CFO today is blowing past this to cultivate a group mind-set of “Let’s talk—let’s explore together.” I’m a huge advocate of this approach that they’re cultivating, which is called “mutual learning.” This doesn’t mean that they abdicate their responsibilities or don’t appropriately wield their authority. They have to continue to do these things, but they don’t do them in an arrogant, know-it-all kind of way. The result is that they just generate so much more out of the people whom they lead.