How to Change an Organizational Mindset

Transforming the Organizational Mindset: A Guide to Change

"Houston, we have had a problem." The rescue of the Apollo 13 mission is a well-known example of a mindset change in solving problems as a team or organization (Apollo Expeditions to the Moon: Chapter 13, 2023). Sustainable change in organizations is primarily a consequence of mindset and cultural change. This article is aimed at change and transformation managers and leaders who want to learn how an organization can be transformed. We will do this by looking closely at Satya Nadella, the CEO of Microsoft, who changed Microsoft's culture, vision, and, consequently, shareholder value. The analysis will reveal how he instilled a different mindset in the company.

When Satya Nadella took over the role as the third CEO of Microsoft in 2014, he was confronted with a company in crisis. Although the company was profitable, the stock price stalled over an extended period, and according to an analyst, Microsoft was in danger of running into a constant decline in business (Ibarra et al., 2018). Steve Ballmer, the predecessor of Nadella, introduced a toxic culture where everyone was fighting against everyone. In addition, managers killed innovation because of rivalries and talented people left the company.

Nadella had to change the company on many levels, like culture and mindset, vision, innovation and technology, existing paradigms and strategy, and external partnerships. This article will focus on a critical element of change: culture and mindset. A truism in business is the expression "culture eats strategy for breakfast." Culture and mindset are strongly interrelated and cannot be separated (Holden et al., 2021).

What did Nadella do to initiate a cultural mindset change within Microsoft?

• Please be sure to listen with empathy. Nadella introduced himself as an exemplary leader by stating that learning is more important than a "know-it-all" attitude.
• Formulate a new vision. People at Microsoft longed for an innovation roadmap and a clear vision for the future.
• Foster the innovation mindset by returning to Microsoft's root values and DNA.
• Introduce nonviolent communication to change the toxic culture of bossing and intimidation. He asked his managers to read Marshall Rosenberg's book about Nonviolent Communication (Rosenberg & Chopra, 2015).
• Focus more on customers by encouraging executives to spend several days with them and better understand their daily business life.
• Hire people with the right mindset and cultural change experience.
• Bring diversity into team and executive meetings.
• Encourage people to grow beyond their beliefs by fostering a growth mindset (Dweck, 2006).

From physics, we know the principle of force and counterforce. The state of an object changes when the driving force is larger than the counterforce. This principle can also be applied to change processes. Change is only successful if the driving forces initiated by the leader are more significant than the restraining forces existing in the organization. Driving and restraining forces can be visualized in a forcefield analysis (Johnson et al., 2020, p. 487). Figure 1 overviews the active forces in the cultural change process.

In summary, the following conclusions can be drawn regarding the challenges of a leader in a transformational process.

Figure 1

Force Field Analysis of Microsoft's Transformation

Note. Source: Alfons Riek. (2023). Transforming the Organizational Mindset: A Guide to Change

Communication is king, meaning leaders in a transformational process need extraordinary communication skills. As communication occurs in two directions, listening on many levels is an underrated skill (Daimler, 2016). I think listening is essential to finding out where pockets of resistance are located.

A clear shared vision is a prerequisite for any change because people need to know the direction of the journey. In the case of Microsoft, Nadella had to convince the employees and top managers to focus on a cloud strategy, even though the company was making its money by selling operating systems for computers.

The organizational culture can be changed by inspiring the employees to practice a growth mindset. Unlocking fixed mindsets releases new driving forces and is an ideal breeding ground for innovation. A fixed mindset focuses on the successes of the past, and it is part of human nature to be nostalgic.

Finally, to unleash the power of an organization, vision, strategy, and culture must be aligned. A company's vision represents a desired future, whereas the strategy is a way to make that future happen, but if the culture is not supporting them, a change process fails.

Conclusion

Leaders transforming a company or an organizational unit must have extraordinary communication skills to communicate the vision and influence a new culture and mindset. Any change process can only happen when the driving forces are more potent than the restraining ones. A key focus of a professional change management process is strengthening the driving forces, which a forcefield analysis can identify.

Essential tools in the toolbox that a leader must master are vision creation, growth mindset, strategy development, cultural competence, and innovation. Finally, the ultimate competence is wisely combining these tools through communication for the organization's successful transformation.

References

Apollo Expeditions to the Moon: Chapter 13. (2023). https://history.nasa.gov/SP-350/ch-13-1.html

Daimler, M. (2016). Listening is an Overlooked Leadership Tool. Harvard Business Review.

Dweck, C. S. (2006). Mindset: The New Psychology of Success. Random House Publishing Group. https://books.google.de/books?id=fdjqz0TPL2wC

Holden, L. R., LaMar, M., & Bauer, M. (2021). Evidence for a Cultural Mindset: Combining Process Data, Theory, and Simulation. Frontiers in Psychology, 12, 596246.

Ibarra, H., Rattan, A., & Johnston, A. (2018). Satya Nadella at Microsoft: Instilling a growth mindset. London Business School.

Johnson, J., Whittington, R., Regnér, P., Angwin, D., Johnson, G., & Scholes, K. (2020). Exploring Strategy. Pearson Education Limited. https://books.google.de/books?id=ieksEAAAQBAJ

Rosenberg, M. B., & Chopra, D. (2015). Nonviolent Communication: A Language of Life: Life-Changing Tools for Healthy Relationships. PuddleDancer Press. https://books.google.de/books?id=A3qACgAAQBAJ

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