Microsoft's man from Matamata bows out

Chris Liddell - the highest flying executive this country has produced - shocked markets yesterday when he announced he is stepping step down as chief financial officer at Microsoft.

But down the phone from Seattle, Liddell sounds laid-back - every bit the unruffled Kiwi.

"This is all part of a reasonably well-planned transition," he says.

The fact that his successor Peter Klein comes from within his own team is a mark of the good shape the Microsoft finance unit is in, he says.

"That wasn't the case when I came here and Microsoft had to reach outside the internal candidates to find me.

"The finance team is the strongest it has been since I've been here and probably in the company's history. That's a big legacy that I can feel proud of," he says.

Liddell rattles off his achievements in a matter-of-fact way. He was born in Matamata after all.

No doubt it was a bit of that down-to-earth disposition Microsoft was seeking four-and-a-half years ago when they plucked Liddell from his position at the top of the decidedly less glamorous US pulp and paper industry.

Still giddy after 20 years of unprecedented growth, the software company needed to mature and find some stability in managing its balance sheet.

Liddell says he played a role in bringing "the disciplines you need" to a company that now has 90,000 employees in 150 countries.

He has certainly brought a stronger cost focus. This year, in response to the global financial crisis, the company has shed 5000 jobs and has cut US$3 billion ($4.1 billion) in costs.

Liddell was responsible for implementing those cuts and has earned himself a reputation in the US as a tough operator.

"That's true," he says. While he prefers to let the market analysts pass their own judgment, he accepts that they give him credit for helping the company focus on costs and cash and "doing some of the hard yards".

But there have been plenty of important but less dramatic changes under Liddell. For example, the company has raised debt for the first time.

"We're getting our capital structure in order," he says.

In many cases the lack of media attention is a sign of success.

"The basic finance processes are working well. It's like the referee in a rugby game. When you don't notice them, they're doing their job."

Liddell played a big role this year in Microsoft's US$44 billion bid to buy Yahoo. The merger didn't happen although the companies agreed to a partnership which Liddell says has worked out well for both.

He is quick to add that Microsoft has done 78 acquisitions during his time as CFO - totalling US$13 billion.

His division also looks after the company's US$30 billion investment portfolio.

"Again there is no noise associated with that because we've lost virtually no money on that in the past year."

So what next? Liddell says he can't talk about the future yet. He won't even take the bait on vague questions about the chances of a return to New Zealand or the desire for fresh challenges.

But in a memo to staff, Microsoft chief executive Steve Balmer wrote: "Chris has indicated that he is interested in pursuing opportunities outside of Microsoft that will expand his career beyond being a CFO."

"Liddell will probably take a CEO job at a technology company," Heather Bellini, an analyst at ISI Group in New York, told Bloomberg. Bellini said she expected an announcement may come in the next several weeks.

Liddell feels his time at Microsoft has reached a natural conclusion.

"It's flashed past," he says. "Five years is a reasonably long time in a senior post and from my point of view I achieved pretty much everything I wanted to achieve."

It seems unlikely he'll be heading back to New Zealand permanently but Liddell says he maintains close links and will always be "a proud Kiwi who just happens to live overseas".

Liddell leaves Microsoft formally at the end of year and doesn't sound like he is planning a long sabbatical.

"I might take a few days off for Christmas," he says.

CHRIS LIDDELL
* Age: 51.
* Born in Matamata.
* Lives in Seattle.
* Education: Engineering degree from University of Auckland, Master of Philosophy degree from Oxford University.
* Career: Chief financial officer at Microsoft (2005-present). Prior to that Liddell had roles at International Paper, Carter Holt Harvey and CS First Boston.