Continuous Transformation - Culture

This is the fifth in a series of blog posts on the topic of Continuous Transformation. The first four can be found at:

• https://www.dhirubhai.net/pulse/continuous-transformation-introduction-steven-guggenheimer/
• https://www.dhirubhai.net/pulse/continuous-transformation-technology-steven-guggenheimer/
• https://www.dhirubhai.net/pulse/continuous-transformation-scale-part-operations-steven-guggenheimer/
• https://www.dhirubhai.net/pulse/continuous-transformation-scale-part-b-leadership-guggenheimer/

This is my final blog outlining the drivers of Continuous Transformation, which I’ll follow with two blogs covering the outcomes and learning around Continuous Transformation. This final driver I’d like to highlight is “Culture”. While more subtle than the first two topics (Technology and Scale), Culture deserves a capital C – it has real impact on the individuals within an organization as well as the organization as a whole. As with Technology, I will bucket culture into a few distinct "eras" within Microsoft. Using the “Simplifier” attribute from the Leadership at Scale discussion, I view the Microsoft culture in 3 distinct eras …What, How, and Why. These 3 eras align reasonably well with each of Microsoft’s CEOs, as well as the different phases we've gone through as a company.

 The “What” Era

During this period, Microsoft emphasized “What” we accomplished as a company, and in turn we measured individuals mostly on what they personally accomplished. While not the only measurement of success, it was a primary lens to measure individual effectiveness. As a company we were growing remarkably fast by all the “Scale” measurements: people, products, customers, partners, earnings, etc. We were also competing on many fronts with an array of other software/technology providers. During this high growth phase we had a tremendous opportunity to gain market share, and thus we valued productivity and efficiency more highly than some of the “softer” attributes required for success in the next phase. Our “What” culture drove for outcomes - conversations were direct, sometimes terse, with few filters around how things were communicated, and debate was the usual form of communication. During this time, I had a poster in my office which said, “You are either part of the steamroller or part of the pavement", which I firmly believed. While we grew quickly during this era and drove many positive results, as we began to listen more closely to the employee, customer, and partner feedback there were some underlying issues with the “What” approach that needed to change in order to help improve our overall reputation.

The “How” Era

The negative sentiment we were receiving both internally and externally around our “What” approach led us to our next era. We had to complement our “What” results with a focus on “How” - how outcomes were delivered, how targets were achieved, how we approached competition, etc. We started measuring customer and partner feedback with metrics called “CPE” (Customer and Partner Experience). We added new CPE roles in each country - I became the lead for CPE in the UK at that time, and there were other leads in all the countries and a lead at the global level, working closely with our CEO. CPE became a regular conversation at our business meetings, including our midyear review process where we shared very specific feedback and recommendations for improvement. We tracked progress on our CPE outcomes through regular surveys across all our major customer groups. This focus allowed us to work in new ways with customers, such as creating CoS (Conditions of Satisfaction) plans with our largest customers and adding product satisfaction measurements (PSAT) to complement the net satisfaction (NSAT) metric of CPE. At a broader level, we had also come through the DOJ/antitrust review period – so we ensured that the “How” included educating our employees on how to compete with integrity. Importantly, we added additional factors in our company performance review process to focus not only on “What” an individual accomplished, but also “How” it was accomplished - how well did you work with others, did you bring others along in the process, did you make others better when you worked with them, did you leverage the work of other teams versus re-creating things from scratch, etc. There was an increasingly strong focus on diversity and inclusion as well, so that “How” is done in an inclusive way to represent the diverse set of employees and customers we have. Changing our review process and how we evaluated individual performance was the point at which many of our employees knew we were serious about changing the way we operated as a company.

Living through the “How” era was an interesting transition for me, given the success I’d had in the “What” era. I had to learn some new habits and ‘unlearn’ some old habits. It took me some time to make the transition as I really had to internalize when I was not executing on “How”. In the “it takes a village” saying, I had some help including some great mentors, an outside coach, and I devoted a lot of energy to be self-aware and willing to change. I think this was the hardest part of my journey at Microsoft, but in hindsight it was critical to learning to “Lead at Scale” per my last blog post. Without developing the “How”, leading at scale feels like an impossibility.

The “Why” Era

With a firm grip on both What and How as a company and in our leadership ranks, our most recent era has begun to emphasize “Why”. This evolution provides a renewed sense of energy and purpose because employees gain a larger sense of mission and personal obligation. What can deliver great results to our customers, partners, employees, and shareholders. How can ensure we achieve these results with high integrity and collaboration. But there is more to offer as both a world leading company in our industry, and as leaders within this organization. Why do we do this work? Satya often asks how each of us will use the platform that Microsoft offers to help the world become a better place. 

In the “Why” era we place additional emphasis on taking clear positions on complex topics at the intersection between technology and society. Artificial Intelligence is a great example. One of the first initiatives was Ethics and AI, including the publication of a book on the topic “The Future Computed”, and the creation of an internal advisory board on the topic comprised of a diverse set of experts across disciplines. Over time, this has expanded to other difficult areas like the use of AI for facial recognition, where Microsoft has been vocal around the need for appropriate regulations at the government level since 2018.  In addition we’re investing in the use of AI to tackle key societal challenges including AI for Earth, AI for Health, AI for Accessibility , AI for Humanitarian Action, AI for Cultural Heritage.

AI is just one example. Data Sovereignty and Privacy is another focus area. Microsoft President and Chief Legal Officer Brad Smith & Carol Ann Browne have published a highly relevant book “Tools and Weapons” to explain where new technologies and societal issues intersect with increasing force and urgency. There are also many issues beyond technology which Microsoft chooses to take a leading position, for example paying hourly workers during the COVID crisis, immigration support around DACA, local investments in the Seattle community to reduce homelessness, a pledge to be carbon negative by 2030, and more.

For our employees the renewed energy and purpose from these initiatives has helped to transform our culture and open a new conversation on values. It has solidified a set of leadership principles for the leaders and managers in the company and it has enabled many other initiatives focused on helping diverse individuals and ideas flourish. Culture is the catalyst for the “Why” era.

I would be remiss not to highlight our collective moment of learning about the challenges of our colleagues in the Black and African American community, and our need to take appropriate action. Microsoft is trying hard to first understand the relevant issues and history (to develop real empathy) and then drive significant cultural change first inside and then outside the company to support a broad diversity agenda. The path forward on this topic isn’t clear, but I think the company's intentions are – and I am glad we’re applying a growth / learning mindset to this topic. This is a very important reflection of the “Why” culture we’re seeking to create.

So along with Technology and Scale, the ongoing evolution of Culture and the focus it drives both internally and externally provides the third key driver of “Continuous Transformation”.

Next time we’ll look at what it means to be Continuously Transforming…

Thanks

Guggs