Right after millions of people around the world finished Googling (sorry, Binging) “Who is Satya Nadella?” they turned their attention to the more pressing question: how on earth could a long-time company insider reinvigorate a stumbling behemoth of more than 120,000 employees and get it sprinting in the right direction?
Three years on he sat down with BOSS to share his thoughts on his leadership style, which could have come straight from a textbook. Thoughtful, inclusive, seemingly ego-less and openly working towards a higher agenda, he has quietly achieved a remarkable renaissance.
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Cracks in the Foundation
Despite remaining a profitable operation and despite Steve Ballmer being a long way from the buffoonish caricature that many portray, Microsoft had seriously lost its mojo.
In the fastest moving of all industry sectors, it appeared frozen in time; left standing by the iPhone and heavily reliant on its Office desktop software and Windows operating system, in a world where consumers and businesses had long since gone mobile and were using the cloud for much of their software.
At a time when Apple could do no wrong, Facebook was changing the world of communication and Amazon was blowing everyone away in cloud computing, Microsoft was the uncoolest 40-year-old imaginable.
To make matters worse, a self-destructive, cutthroat internal culture of competition between colleagues was still simmering just below the surface.
- Cloud: It has invested eye-watering amounts in infrastructure to make its Azure cloud computing infrastructure the main rival to Amazon Web Services in a hugely lucrative and fast-growing part of the market.
- Software: It is also making major strides with its cloud-based Office 365 productivity software and Dynamics 365 enterprise offering.
- Hardware: The company, which was once dragged through the courts in anti-trust trials, is openly working with big-name rivals and – perhaps most surprisingly of all – it is making genuinely cool tech products again.
Its Surface computers have received rave reviews and have been positively compared to those from Apple. It has got the market intrigued by its mixed reality headset HoloLens and also sold its Xbox One entertainment console in huge numbers.
The Nadella Coefficient
in his first email sent to staff upon becoming CEO, Nadella warned his employees that they were operating in an industry that does not respect tradition and only respects innovation. He wrote that their job was to ensure Microsoft thrived in a mobile and cloud-first world.
This threw down the gauntlet for the organisation to step away from its comfort zone and measure itself by its achievements in areas it was losing to the likes of Apple and Amazon.
Where once the company was the very definition of a walled garden, jealously guarding its technology, it is now forming partnerships with major tech firms like Adobe, falling over itself to offer its services on Apple devices and is – staggeringly to the historically minded – embracing open source in a big way.
The Linux operating system, once described as a cancer by Ballmer, is now supported in its Azure cloud and last year Microsoft surpassed the likes of Facebook and Google to become the largest contributor to open-source code online exchange GitHub.
Central to the competitive culture within Microsoft had been the performance management system, by which all staff members were judged. It worked like a high school grading curve and was applied to teams across the company.
Nadella and his leadership team needed to demonstrate through their actions that the kind of behaviour that had gone before was no longer what was required within the company. Subsequently, he says, the perceived impossible task of redirecting a super tanker had been possible in a relatively smooth fashion.
Under Nadella’s One Microsoft philosophy: “I started to see it disappear, a dissipation of the dysfunction, the fighting, the pettiness and some of the craziness you see in a lot of corporate environments,” O’Brien says.
“Then there was collaboration, co-operation and trust that people could share their new ideas with other teams without it being bad for their performance review and bonus.”
My 2 cents:
“An industry that does not respect tradition, only innovation.” In this simple statement, Nadella revealed the entireity of Microsoft’s master plan: invest in the new frontier from both a product and service standpoint and a corporate culture standpoint.
From the product/service standpoint, the Microsoft Miracle was equally manifest in its choices of what to develop (Azure and HoloLens), what to double down on (Office 365, Office for iOS, Linux and Xbox) and what to pull the plug on (Nokia). By simultaneously diving into the our generation’s tech frontier and while prioritizing an open-source, cross-platform approach to development, Microsoft has become cool past curvy hardware or omnipotent software, Microsoft has become a partner in democratizing the abstract frontier for both the developer and the daily user.
From a corporate culture standpoint, Nadella’s high competence, low ego approach has become synonymous of Microsoft’s modus operandi. What Nadella so correctly identified was a GSIGSO (good stuff in, good stuff out) situation where product and service success in the external market needed to stem from a motivated and engaged Microsoft team in order to organically draw interest and advocacy. By lowering Microsoft’s ego, Nadella transformed the manner/tone Microsoft adopts when empowering its clients. The result has transcended advocacy: open source initiatives and participating customers now provide Microsoft with a powerful stream of insights to build off of.
Gone is the overbearing empire and the tyrannical product launch-adopt cycle. Under Nadella, the Microsoft user is the beneficiary of a Microsoft that is committed to absorbing the complexity and costs of harnessing new tech horizons and simplifying and distributing access for high-complexity and average-joe users alike.