A Culture Renaissance - Microsoft's Transformation

The Crisis Under the Iceberg

This year is my 15th year at Microsoft, and I was fortunate enough to take part in its transformation in recent years. Different people may have different views and I want to share my thought with you as a person who loves Microsoft and is fortunate enough to work here.

When it comes to Microsoft's transformation, it must first understand why Microsoft has to transform itself. Pull the time back to the ten years from 2004 to 2014. If we look at the financial report, Microsoft this decade performance was good, revenue growth 111%, better than S&P 500 of 78%. But under the iceberg, Microsoft was in fact experiencing an unprecedented crisis!

What products pop up in your mind when you think of Microsoft? Yes, as you might expect, Microsoft's most important products are Windows and Office. These two products are interdependent with PC, but PC was already a mature market, shipments were falling. When Microsoft was trying to copy the successful experience of the PC to the smart phone, the 2009 iPhone launch, Steve jobs revolutionized the mobile phone's ecology. This is a key watershed. At this point, Microsoft can only be in the back struggling to catch up, or even spend 7.1 billion dollars to acquire Nokia, but has been unable to change the situation, can only watch the rapid growth of the market divided by the iPhones and Android Phones.

If you were an investor or analyst, what did you think of Microsoft's future? And that directly reflected Microsoft's share price. Over the past decade, Microsoft's share price has barely stalled. As a result of these big challenges, Microsoft made a major change - the 14-year CEO Steve Ballmer stepped down, and Microsoft opened a new page of its history!

Return to Glory

Microsoft's third CEO, Satya Nadella, on board on February 4, 2014 to transform Microsoft's core business from Windows and Office into Cloud, AI, Customer Experience and Devices, focusing on Intelligent Cloud and Intelligent Edge, completely changed Microsoft. Over the past four years, Microsoft's share price rose from $30 to $97, and its market value rose from 300 billion to 750 billion (May 12th ,2018). Morgan Stanley is even foresee that Microsoft could be the first publicly traded company with a market capitalization of more than a trillion dollars. These results make Satya Nadella, one of the most influential 100 people of Time Magazine in 2018.

Change, First Start from the Understanding of Yourself

When many people wonder how Satya Nadella to reinvent Microsoft in just four years, and let the Elephant begin to dance, Satya Nadella's book "Hit Refresh", published in January this year, just provided the answer. Many CEOs wrote a book after retire to sum up their work and life, while Satya Nadella in the fourth year of the CEO. His main hope is that with this book, to ignite the enthusiasm of Microsoft's 100,000 employees, to rediscover the soul of Microsoft, to lead all employees to a better future forward!

The special thing about this book is that Satya Nadella is not only talking about Microsoft's transformation from a commercial point of view, but also sincerely sharing his journey along the way, and how these experiences shape his core values, and then use these core values to radically change Microsoft. He also candidly shared many of Microsoft's failed experiences and challenges both inside and outside of the transition process.

"After years of outdistancing all of our competitors, something was changing and not for the better. Innovation was being replaced by bureaucracy. Teamwork was being replaced by internal politic. We were falling behind." It seems simple, but how many CEOs dare to give a book in his tenure, acknowledging the real problem of the company? How many leaders in ancient and modern times really admitted mistakes? To change a person, you have to start with a clear understanding of yourself. Understand your strengths and weaknesses before you know how to change. Is this not the case with the enterprise?

If your company is wondering how to transform, this book is perfect for you and your company's senior managers to read. Satya Nadella offers many perspectives and practical examples. Recently, there is a chance to share the essence of this book with the senior managers of some enterprises in the form of book club. Half the time is Microsoft's sharing, and half the time is the senior managers after reading the book, share the key issues and two-way discussions. Here are some of the important points for your reference.

Clenched Fists, Nothing in Hand. Loose Ten Fingers, but You Can Have the Whole World.

In order to write this article, I went back to find out Satya Nadella's first email on February 4, 2014 to all the employees. There are four key points: Who am I? Why am I here? Why are we here? What do we do next? In one sentence, he said: "Our industry does not respect tradition, what it respect is innovation." That's the key point of his appointment. He decided to take Microsoft in a new direction, instead of clinging to Microsoft's legacy, the "old" Microsoft, which is centered on Window. Watch what they do not what they say. Everyone's watching Satya Nadella what's next? And he soon gave us a very clear answer.

The launch of iPad Pro on September 9, 2015, as usual, attracted the attention of the global media, and I watched the live broadcast at the other end of the globe. When Apple's senior VP Phillip Schiller on the stage, "Let's welcome the company who knows productivity most to introduce their software to us," I thought : "No?" Is that possible? " It's too late to react, Phillip has introduced Microsoft's VP Kirk Koenigsbauer. I am surprised! More is actually : "That's right!"

People may not understand the significance of this incident to Microsoft, but I am well aware that this was not possible in the past. Anything that threatens Windows will be blocked. It's not just that Microsoft is starting to support the iPad. The deeper implication is that Microsoft is no longer the past Microsoft, and has taken the old baggage and stepped forward!

This incident reminds me of Ann Lee's movie, Crouching Tiger, Hidden Dragon. Li Mubai said: "You clenched your fist, there is nothing in your hand. You loose ten fingers, but you can have the whole world." When Steve Ballmer was obsessed with the smart phone market for a place, exhausted all the resources, but no work to return, Satya Nadella, instead of clinging to the operating system, so that Microsoft Office 365 not only support the iPad, the iPhone, Also support Android, but let the overall revenue increase, the transformation of Microsoft set an important milestone!

Everyone or every enterprise will inevitably encounter different challenges. Sometimes you break the head, exhausted all the strength, all in vain, may change an angle to think, perhaps can find a new way, breakthrough blind spot?

Build a Small Fire to Escape the Bigger Fire 

If you ask me: What is the key to Satya Nadella's transition to Microsoft? I would say it is changing the culture of Microsoft. "Culture eat strategy for breakfast" managing master Peter Drucker once said. The culture of the enterprise will influence its operation strategy. But is it easier to change culture? How did Satya Nadella do it? I sum it up to the following three points:

1. Rediscover the soul of Microsoft : Every company had a mission at the beginning of its establishment. Microsoft is no exception. Bill Gates, who founded Microsoft in 1975, said: "A computer on every desktop and in every home" After many years, the mission has already been completed, but how many employees still know what's Microsoft mission now? Every day to the company in the end is for whom and for what? If you ask your employees, but everyone's answers is different, then you should consider whether the company's mission is not clear enough or can not really build consensus.

Satya Nadella told the senior leadership team, we spend too much time on the job, so the work should have more profound significance. If we can combine the value we believe in with the strengths of our company, there is nothing we can't do. Satya Nadella thus redefined Microsoft's mission: "Empower every individual and every organization on the planet to achieve more."

2. The motivation for change comes from empathy: If I say empathy is the most important part of this book, I don't think there will be too many objections. One of the most touching stories from this book is Satya Nadella's first child Zain's birth. He was born at 11:29 on August 13, 1996 at the local Hospital in Bellevue, who was 1360 grams, and he didn't cry. Zain with severe cerebral palsy caused by asphyxia in utero, and Satya Nadella, while shouldering parental responsibility, must also try to understand Zain's situation and empathy for his pain and special condition.

Satya Nadella also implanted such empathy into the DNA of Microsoft culture, saying: "We needed to build deeper empathy for our customers and their unarticulated and unmet needs. I want to put empathy at the center of everything we pursue, whether it's the products we launch, the new markets we enter, or the people, customers, and partners we work with. "

I think it is because of this empathy, so that Satya Nadella always focus on the customer, if you go back to the Office 365 support iPad, there will be such a change, is not Satya Nadella in the interests of customers as a result of the priority?

3. Change must be initiated from the inside out: The last point I want to talk about is that change must be initiated from the inside out. The choice of leading through consensus versus fiat doesn't matter, the key is the change must be from the heart, from the core to spread out. Such a transformation will be possible to succeed, will be long-term, and to establish a consensus from the inside out. The most important job is the urgent need to build shared context, trust and credibility with your team.

One of the most impressive stories in this book is about a tragic forest fire of 1949, which killed 13 "smokejumpers" (parachuting firefighters), and only the lead firefighter survived, knew that he had to build a small fire in order to escape the bigger fire, but no one would follow him. He had the ability to get the team out, but he hadn't build the shared context needed to make his leadership effective, and couldn't be able to lead the team to escape, and ultimately pay a painful price.

The courage to refresh, facing the future

Alibaba co-founder Jack Ma said : "Today is very cruel, tomorrow is even more cruel, the day after tomorrow will be great, but most people won't survived over tomorrow night." This is, of course, just an analogy, but it also shows the serious challenges facing companies today. Everyone or every company will face the need to refresh the moment, must rethink the purpose of the existence of individuals and businesses, for whom the fight? Why fight? Unique place? Enthusiasm? What new areas to challenge? What new skills are needed? Is there enough talent and digital technology? What is the resistance now? How to implement culture?

The hero of the corporate transformation, will not be one leader or one group, the road of corporate transformation needs to rely on the strength of all, bring together everyone, together with the courage to refresh, facing to the future! 

References:

[1] Microsoft shares surge after Morgan Stanley predicts it will reach $1 trillion market cap in a year

[2] Time magazine lists Satya Nadella as one of the top 100 most influential people

[3] Nadella: Our industry respects innovation, not tradition — CNET

[4] Microsoft Office Demo on iPad Pro

Other blogs:

• Microsoft 365 - Where to Start a Conversation?
• Why Microsoft revealed Microsoft 365?
• What's the ROI of Microsoft 365 E5? (36 pages)
• Office 365 - When to Use What by Whom (27 pages)
• Office 365 - When to Use What by Whom (Part.2)
• Office 365 - Everything You Wanted to Know (112 pages)
• Office 365 Adoption Guide (63 pages)
• Microsoft Teams Role-Specific Guide (23 Pages)
• The Microsoft Teams Practical Guide and Planning Workshop Kit (total 145 pages)
• Why IT leaders are true agents of Change?
• Does IT Really Matter to Business Owner? (50 pages)
• Your Roadmap for a Digital-First Business Guide (27 pages)
• The Ultimate Meeting Guide (21 pages)
• A Great "Team" Make a Great "Teams" Launch
• An Event You Don't Want to Miss (Microsoft Teams Launch at Taipei on April 18th)
• 【趨勢?轉型?大驅力─金融CEO早餐會】10/18@Taipei W Hotel
• 數位轉型如何能夠幫助台灣製造業於快速變化的市場提升競爭力?
• Office 365 - 誰? 什麼時候? 該用什麼?
• Office 365 採用指南 (63頁)