Microsoft CEO Satya Nadella warns of ‘tough choices’ for software giant

26 Jun 2015

Microsoft has to be reborn culturally if it is to achieve its mission of empowering everyone on earth, CEO Satya Nadella has warned

In a mission statement for Microsoft to “empower every person and every organisation on the planet to achieve more” CEO Satya Nadella has warned of tough choices for the company.

“Our mission is to empower every person and every organisation on the planet to achieve more,” Nadella said.

Nadella said that the reality is that we live in a mobile-first, cloud-first world and Microsoft is being positioned to thrive in this reality.

“It’s important to note that our worldview for mobile-first is not just about the mobility of devices; it’s centred on the mobility of experiences that, in turn, are orchestrated by the cloud. That is why we think of these two trends together. What we do with our products and business models has to account for this fundamental transformation.”

In terms of products, Microsoft’s main mission will be to reinvent productivity and business processes. This is an urgent priority for Microsoft as it faces a new wave of competitors who reflect productivity in the 21st century, including players like Slack, Dropbox, Wrike, Tableau and many others that are changing how businesses and professionals communicate.

In recent weeks, Microsoft acquired Berlin-based start-up Wunderlist, building on previous next-generation productivity acquisitions like Yammer and Sunrise.

“We will drive scale and usage by appealing to ‘dual-use’ customers, providing productivity services that enable them to accomplish more at work and in the rest of their life activities with other people,” Nadella said.

The technology giant also intends to build a more intelligent cloud platform. “We’ll further provide a powerful extensibility model that is attractive to third-party developers and enterprises. This in turn enables us to attract applications to our cloud platform and attach our differentiated capabilities such as identity management, rich data management, machine learning and advanced analytics.”

Nadella said that Microsoft aims to create even more personal computing with Windows 10. Earlier this year Microsoft said that it intends Windows 10 – which operates across PC, mobile, tablet and other platforms like games consoles – to be deployed on more than 1bn devices worldwide.

“We will build the best instantiation of this vision through our Windows device platform and our devices, which will serve to delight our customers, increase distribution of our services, drive gross margin, enable fundamentally new product categories and generate opportunity for the Windows ecosystem more broadly.

“We will pursue our gaming ambition as part of this broader vision for Windows and increase its appeal to consumers. We will bring together Xbox Live and our first-party gaming efforts across PC, console, mobile and new categories like HoloLens into one integrated play.”

The soul of Microsoft

To achieve these goals, Nadella said that the culture of Microsoft needs to change from protectionism to one founded in a growth mindset.

“It starts with a belief that everyone can grow and develop; that potential is nurtured, not predetermined, and that anyone can change their mindset.

“Leadership is about bringing out the best in people, where everyone is bringing their A-game and finding deep meaning in their work. We need to be always learning and insatiably curious.

“We need to be willing to lean into uncertainty, take risks and move quickly when we make mistakes, recognising failure happens along the way to mastery. And we need to be open to the ideas of others, where the success of others does not diminish our own.”

A good example of the new culture in action will be the launch of Windows 10 on 29 July, where employees will volunteer time to upgrade their communities as part of the broader movement.

Tough choices

Effectively Nadella is trying to overhaul a juggernaut. This won’t be an easy task.

He is dealing with an organisation that has played and still plays a pivotal role in computing as we know it.

He is trying to transform an ingrained culture where it could be very easy to rest on well-earned laurels. However, a different mindset and attitude is required if Microsoft is going to stay relevant in a computing landscape that has transformed vastly in the 10 years since Microsoft could do no wrong.

While Microsoft was master of the cloud, it ignored the implications of the arrival of the iPhone and tablet computing. Brave efforts to catch up with Windows 8 and innovative but underrated Surface devices may be rewarded when Windows 10 arrives, but that requires a Microsoft that won’t stand aloof, but is determined to pitch-in at every level of the technology food chain.

He described a Microsoft in awe of what humans dare to achieve, and therefore diversity and unconscious bias need to be tackled. “We’ve already started this evolution with things like OneWeek and Hackathon, customer feedback loops, our focus on usage in the engineering teams, our performance review model, as well as our diversity and inclusion efforts, including the new unconscious bias training. We will do more and more to support the culture we have and recognise impact when we see it.”

A telling remark was the reality that Microsoft’s leadership team had to imagine if Microsoft wasn’t there – “what would be lost if we disappeared”.

That’s brave stuff. Like many industries in the 21st century, Microsoft has had to face up to the threats and the dangers, weigh up its demise in order to be born again.

“I believe that culture is not static. It evolves every day based on the behaviours of everyone in the organisation. We are in an incredible position to seize new growth this year,” Nadella said.

“We will need to innovate in new areas, execute against our plans, make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value. I really do believe that we can achieve magical things when we come together as one team and focus.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years