Transforming the culture at Microsoft- How Satya Nadella turned around the culture of a 120,000 strong organisation?
By Shivangi Walke
Published on March 22, 2019
All culture change is rooted in influencing human behaviour. Any successful change strategy is centred around “high leverage” behaviours, which means the behaviours that have a disproportionate effect on change, on people, on teams and in organisations. There’s been a lot of study on why culture change fails. Let’s spin it and take a look at why culture change works.
“He has allowed ideas to bloom and be considered,” says Terry Myerson, the executive in charge of Windows, who has been with the company since 1997. “That’s hard to do with big groups of people.” He says this about Satya Nadella, who had already been at Microsoft for more than two decades in 2014, when he was named CEO of Microsoft. He was brought in to restore the company’s long-dormant reputation for innovation and creativity.
Microsoft tried to lock users into its products by refusing to collaborate with competitors. They launched a series of me-too products, thinking loyalists would embrace them. The Zune MP3 player that followed the iPod, the Surface tablet that replicated the iPad, and the Kin, a much-hyped 2010 phone designed for social networking that was on sale for just 48 days before Microsoft and Verizon killed it. Consumers turned to better-designed devices that were plugged into other software ecosystems where Microsoft had no stake, rendering the company irrelevant and outdated.
That was the state of affairs when Nadella took over. He scrapped that, casting Microsoft instead as a company capable of working across any platform—even those controlled by competitors. He has made Office software available on Apple- and Google-powered tablets and phones and made Windows free to manufacturers of devices smaller than 9 inches. He has forged new partnerships with companies Microsoft once considered enemies.
But what did Nadella do that fashioned this turnaround?
He has this model of Concepts, Capabilities and Culture. And on culture, he says “You need a culture that is fundamentally not opposed to new concepts and new capabilities”. Over the past two decades, its culture had grown competitive and insular, consumed with protecting rather than exploring. People were motivated to produce things they knew their managers would like, rather than take risks on new ideas that could fail. Managers were encouraged to assign a certain number of fours and fives (the worst numbers) to their team members, in a sort of implicit quota system. “The number became a permanent scar on record that would impact things like their ability to change teams.” Even if you had an all star team, you still had to assign 4s or 5s.
But before Nadella could do anything about internal reviews or siloed teams, he re- designed Microsoft’s vision. Microsoft now existed to “empower every person and every organization on the planet to achieve more.”
In a radical change from the past, it would become a people company instead of a product company.
That was where the ball started rolling.
Nadella identified a few vital behaviours that would have the most overall impact. To begin with, he invoked a growth mindset; which was earlier seen as a fixed personality trait and not a behaviour. Today it’s the latter. This also cascaded to providing air cover for people when they get something wrong due to that growth mindset.
To facilitate the adoption of new behaviours, he had to understand what influenced the behaviour? What were the sources of influence? He set examples himself, often providing structural motivation when required.
He had this “We make mistakes, but we can learn to do better” theme. Following an incident at the Q&A at the Grace Hopper Celebration of Women in Computing, where he told the largely female audience that women in the tech industry should forgo asking for raises and instead trust in the system, he was forced to explore his own biases. Nadella realised his mistake, and the next day issued an apology. Microsoft stepped up internal messaging on making people aware of the diversities in their teams and to combat their unconscious biases. They were finally leaving behind their rank and file system.
Another class act was ensuring the Bill Gates continued as technical advisor to Microsoft giving at least 30% of his time there. Social motivation was a huge factor. When people had to present to Bill, they understood it was no mean feat and that built huge accountability.
The idea was not to re-educate people on how they should be, but only of invoking what they already know and are capable of. Empathy, inclusivity and accessibility were the hallmarks of the new Microsoft and everything from the signages on doors (LISTEN) to the coffee cups (be the change you want to be) were just constantly reinforcing it. All behaviours were justified if they passed those three filters and you and only you were the judge of it. He trusted the intelligence of his workforce to see where that would take them, and he gave them air cover when it didn’t seem to work out.
You don’t have to be a hopeless cynic or romantic to start wondering what changes could these possibly make to a culture of 120,000 (2014) people, but it did. It was confident but raw effort that led to this culture change.
Nadella says “Our company’s identity is fundamentally about creating technology so that others can create more technology. And it’s essential that it is being used for empowering more people.” And so he began by empowering employees to judge their own behaviour while fixing the internal review system.
There. Culture change works out too, you know.
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