On first impressions, Steve Dunn, the finance director of Microsoft in the UK, does not strike one as the global business tycoon type.
A family man with three children, Dunn is gently spoken and has a calm demeanour. He comes across as a person who would be more comfortable kicking a football in the back garden with the kids than battling it out across the boardroom table.
But don't be fooled. For the past ten years, Dunn has established himself at the biggest software company in the world. He has held senior finance and financial analysis roles in the US, New Zealand and now in the UK. Beneath the placid exterior, Steve Dunn is one tough businessman.
Indeed, there is no other way to be at the biggest software company in the world. Microsoft has a market capitalisation of $320bn (£154.5bn). In the UK alone, where Dunn holds sway over the finances, earnings are close to £0.5bn.
Microsoft is one big animal, and it has reached this scale in just 32 years. Formed in 1975, the company was turning over $1m by 1978. It celebrated its tenth anniversary in 1985 with revenues of $140m.
Today Microsoft supplies software to 90% of the world's desktop computers and for the financial year 2006/07 the software giant delivered revenues of $51.1bn and net income of $14.1bn.
As the finance director of Microsoft UK, Dunn's role and responsibilities differ from those of the conventional FD.
The UK business is a Microsoft subsidiary, and although it is the third largest division of Microsoft, after the US and Japan, Dunn does not carry overall corporate responsibility for finance. His role is focused on finance and administration and running the UK division as smoothly and leanly as possible.
Microsoft UK is essentially a sales and marketing hub. It is responsible for promoting Microsoft technology and products that are purchased by customers through massive network of resellers.
The resellers channel, however, does not make its purchases from the UK. Instead, goods are purchased in Ireland, to take advantage of the lower corporation tax rate. Microsoft in the UK generates revenues by receiving payments for costs commissions of up to 10%.
'As the finance director of a subsidiary, I do not have all the responsibility that corporate level has. My focus is on the finance and administrative functions. This involves setting up service level agreements with our vendors and managing the resources that we have internally,' Dunn explains.
Bur Dunn does play a far more strategic role in the Microsoft business than his initial comments suggest. He plays a crucial part in marketing, for instance, a core function of Microsoft UK.
'When we are putting together a marketing campaign, it is up to me to assess what we can afford to spend on it. You have to analyse how the campaign is aligned to the resources you have, and whether you are targeting the right area. You also have to look at what the other subsidiaries are doing and how they are aligned. There is a lot to consider,' Dunn explains.
Deal breaker
The FD of Microsoft UK also plays a key part in recommending and bedding down
European acquisitions. Deals have become an increasingly important part of
Microsoft's global strategy. Last year Microsoft bought 24 companies with values
ranging from $10m to $6bn. It all means more work for Dunn.
'Acquisitions are generally a US-led decision but from the initial stages of an acquisition we are involved. We work on the corporate development of the deal and driving the acquisition through,' Dunn says.
'The work does not stop there. The acquisition has to be integrated and that can be tricky. There is no magic solution. The resource has to be worked into the Microsoft structure and management teams have to be fitted in. It takes time and you have to be patient.'
Whether growth comes through acquisition or organically, Dunn is bullish on the prospects for the business. The last set of Microsoft UK accounts filed at Companies House show that, for the year ended June 30 2006, revenues had grown by 18% from £413m to £489.6m on the previous year. Profits climbed by a massive 59% to £57.5m from £36.2m.
Dunn sees further growth. 'The business is healthy and there are some very big launches that have come out or are about to come out. The Vista and Office 2007 rollouts will build on the strong foundations that we already have and the X-box business is very exciting. MSN holds lots of opportunities,' he says.
'This business is profitable and growing and with a further $7bn going into research and development we can expect great things.'
But with fast growth comes greater responsibility. Dunn is as focused on generating top-line growth as he is on keeping a tight control on the business to deliver bottom line efficiencies.
Celebrating Sarbox
This perhaps explains why, unlike most of his fellow finance directors, Dunn
sees great benefits in the Sarbanes-Oxley requirements that most of his
compatriots complain about.
'Yes, it is painful and it is costly, but I believe it is useful. It should be core to what a business does because without strong compliance you can't achieve your goals.
'You need controls to give you an insight into a business. You can be comfortable knowing that you are on a firm financial foundation,' says Dunn.
The US influence stretches beyond Sarbanes-Oxley. Consolidating UK accounts with a totally different reporting regime into the US parent company's numbers is a vital task that falls to Dunn.
'The statutory accounts filings required in the UK differ from those faced by US companies. You have to be able to speak both languages. I am there to align the UK accounts with the US filings as much as possible.
That involves leveraging the expertise available here to make the process as efficient as possible,' he says.
Dunn's background as a CPA in the US has helped him to cope with these demands. After completing his CPA, he worked for Ernst & Young in Chicago in the financial audit group.
He didn't rely on his accountancy to open the door into business, and also has an MBA from the Kellogg Business School at Northwestern University in Illinois.
'The most important thing when hiring someone is not what qualification they have but if they have the skills for the job. I think an MBA does help you get a foot in the door though,' he says.
Equipped with his MBA and CPA, and the years of experience at the top of Microsoft, Dunn is well placed to keep knocking down doors for many years to come.
Family guy
Managing the demands of top-flight career and family is tough. As a husband and
father of three, nobody knows this better than Microsoft UK finance director
Steve Dunn.
Statistics released by the Office for National Statistics show that the average breadwinner spends at least an eighth of a family's time at work. For top executives this can even more demanding, especially if work takes them to different locations around the world.
Dunn has worked in Chicago and Seattle in the US, New Zealand and in the UK. In every country he has held a senior finance role.
But rather than view the constant travelling and need to relocate as a pressure to managed, Dunn views it as an opportunity to be grasped.
'The opportunity to work has been outstanding on a personal and professional level. I have had the opportunity meet and work with colleagues and clients from across the world,' Dunn says.
From a personal point of view the travel has also been beneficial. 'My three children are enrolled in an international school and it has been fantastic for them to be exposed to a different culture. We have really loved our time here,' he says.


Comments