In First Person: Satya Nadella

Satya Nadella is Chief Executive Officer of Microsoft. Before being named CEO in February 2014, Nadella held leadership roles in both enterprise and consumer businesses across the company. Nadella spoke with guest editor of People + Strategy Joe Whittinghill about organizational culture and digital transformation.

Nadella: First, I want to acknowledge that it’s a privilege to work in the tech industry—and to be able to work from home. I’m grateful to all those who work in essential roles, especially those on the frontlines of this crisis, who are enabling so many others of us to stay home and work remotely.

Nonetheless, there’s no doubt that the workflow of all our jobs has changed dramatically over the past six months. I myself started out sharing a home office with my two teenage daughters and juggling between their remote learning schedules and my Teams meetings. One of the things I’ve come to realize is that, in a time like this, there’s a lot of stress. If you think about all the different contexts—whether it’s working from home, children at home doing remote learning, parents in different places—all of us are living through a time where there is a lot of anxiety. There is no playbook for this and having deep empathy and understanding for each other’s situations is needed now more than ever.

There are two impacts I’ve noticed personally that I’ve been thinking about. The first is flexibility. Clearly, there are going to be some structural changes to how we work going forward, depending on the type of role, the function, the importance of place. Instead of becoming very dogmatic about some new paradigm, the key is to enable flexibility. That in turn helps build resilience for individuals, teams and entire organizations.

The second is how do we maintain the social capital that comes from being together in the workplace? While we are building some new forms of social capital, we’re also burning some of the social capital we’ve built over time, and we will need to replenish that. It’s one of the reasons I’m so enthusiastic about experiences like Together mode in Teams, which makes you feel like you’re sitting in the same room as your colleagues. I’ve been using it during our senior leadership team meetings each week, and it makes me feel like I’m in a shared space with my colleagues, allowing me to pick up on nonverbal cues. That’s something you would never be able to do with the standard grid view.

P+S: What’s next in terms of the pandemic and how you see this changing organizational culture, as well as transformation?

Nadella: Stepping back, the pandemic has accelerated long-term secular trends we have talked about at Microsoft for a long time, from cloud adoption and data and AI to multisense, multidevice collaboration. These secular trends are fundamentally reshaping every industry, across both the public and private sectors. Just take the surge in telehealth, as an example. More than half of primary care visits at some major health care systems are now being conducted virtually, and providers are increasingly relying on new capabilities, like AI-assisted bots, to ensure patients get the information they need, whenever and wherever they need it. Or take e-commerce, which has been pulled forward multiple years, as offline retailers embrace new models, like contactless shopping and curbside pickup. 

We’ve also learned that that although meetings are important, they take place in the context of broader collaboration and workflow. Meetings aren’t the only place where work happens. For example, hours spent messaging in Microsoft Teams grew 47 percent between February and April, compared with just a 6 percent increase in scheduled meetings (see Figure 2). This suggests you need a comprehensive collaboration approach to support the entire workflow of the organization, both for meetings and for ad hoc communication.

It’s one reason we’ve designed Teams for more than just meetings. With Teams, we are focused not only on what happens during a meeting but the entire workflow around a meeting—before, during and after. It’s the only solution with meetings, calls, chat, content collaboration with Office and business process workflows—in a secure, integrated user experience. 

Second, we’ve learned that every organization will need a system of learning for their employees. Acquiring new skills doesn’t stop when someone gets a job. Just as every company today has a system of engagement with customer relationship management (CRM), or a system of record with enterprise resource planning (ERP), they will require a system of learning—a continuous feedback loop between the work, skills and learning required to succeed at the task at hand. This is particularly important as we see massive shifts in not only how we work but what we work on. 

We’re also seeing differences in how different groups are adjusting to remote work (see Figure 4). For instance, 52 percent of those under 40 say they’re struggling to balance responsibilities working from home, compared with 36 percent over 40. Millennials and Gen Z now account for the majority of workers, so we will need to equip managers to anticipate and support their needs.

P+S: Where did you feel you had to make dramatic change when you became CEO (i.e., upend the status quo versus allowing change to occur over time)?
The other side of it is culture. At Microsoft, we had achieved great success in the ‘90s, and we developed some hubris. The reality is that we needed to continuously learn and be curious about our customers and the outside world. I was inspired by Stanford professor Carol Dweck’s book, Mindset: The New Psychology of Success. It starts with a belief that everyone can grow and develop; that potential is nurtured, not predetermined; and that anyone can change their mindset. 

We adopted a mentality of moving from “know-it-alls” to “learn-it-alls,” centered on exercising a growth mindset each day in three ways. First, we need to obsess about our customers—listening and then innovating to meet their unmet and unarticulated needs. Second, we are at our best when we actively seek diversity and inclusion. If we are going to serve the planet, we need to reflect the planet. Finally, we need to operate as one company, One Microsoft—not a confederation of fiefdoms—to deliver the best solutions for customers. Innovation and competition don’t respect our organizational silos. When we exercise a growth mindset by being customer-obsessed, diverse and inclusive, and act as One Microsoft, that’s when we can truly make a difference in the world. 

We are on a journey to close the gap between this espoused culture and the lived experience for every employee at Microsoft.

P+S: How did you know that a cultural transformation was as critical to Microsoft’s success as its technology and business strategy?

Nadella: I like to think that the “C” in CEO stands for culture, and it defines the success of every organization. Our culture is at the root of every decision we make at Microsoft, and creating this culture is my chief job as CEO. And it’s not just us. When I look at other companies I view as being among those most likely to be the winners in the future, culture is key. It’s not enough to have a hit product. You must have continuous capability to execute on the next hit product. And that ultimately comes down to culture, having the culture to sustain and foster this capability so you can see around the corners for the next big breakthrough.