How Satya Nadella Brought a Growth Mindset to Microsoft.

It all started in January 2020, Satya Nadella celebrated his sixth anniversary as CEO of a company he had transformed into a hotbed of innovation, a talent magnet where people want to come and grow, a world-class technology player and a valued digital technology partner. But ask him how it’s going, and he will say they are making great progress, but they should never be done.

Nadella knew that Microsoft’s culture was inflexible and rigid. Each employee had to prove to everyone that he or she was the smartest person in the room. Accountability—delivering on time and hitting numbers—trumped everything.

The meetings were formal. If a senior leader wanted to tap the energy and creativity of someone lower down in the organization, she or he needed to invite that person’s boss, and so on. Hierarchy and pecking order had taken control, and spontaneity and creativity had suffered.

Their infamous performance management system pitted employees against one another, and playing politics was deemed essential to survival. The C in CEO for Nadella stood for culture. He liked to believe the CEO is the curator of an organization’s culture.

He says, “Anything is possible for a company when its culture is about listening, learning and harnessing individual passions and talents to the company’s mission. Creating that kind of culture is my chief job as CEO. The culture change I wanted was centred on delivering a growth mindset, to be customer-obsessed, diverse, and inclusive, and working as One Microsoft to get us there."

He devoted much of his first year listening to employees at every level in the organization anonymously, individually, or in focus groups.

With Nadella at the helm, the primary shift has included embracing a growth mindset and moving from a place where employees felt a need to be the single source of knowledge, to a culture of collaboration that best leverages diverse knowledge.

This other significant shift was the evolution of Microsoft’s performance system, which focused on collaboration and contributing to the success of others—a departure from the forced ranking stack ranking one.

“One of the big things that we have done at the leadership level is to focus on shared metrics. We make a distinction between what we call ‘performance metrics’ and ‘power metrics’," said Nadella, in an interview with consultants McKinsey & Co.

Nadella was also disheartened to discover how little time each manager spent coaching his people and made this one of his biggest priorities as part of Microsoft’s cultural renaissance. Speak with Wael El Kabbany, Microsoft’s managing director for Enterprise Middle East and Africa, or read the interviews by Kathleen Hogan, his chief people officer, and you hear the same message. “At Microsoft, we are committed to building leaders by unlocking their potential and by empowering them."

Wael explained how the primary focus for all Microsoft managers today is to Model, Coach and Care to best support their teams and create an environment where employees are empowered to do their best work.

Leaders all across the company must now show they personally practise the growth mindset with three skills in particular: active role modelling, coaching their employees to be active role models, and showing they care about their employees and their personal growth. They have a well-designed coaching programme that places the onus on each leader to coach his teams and ensure the same is cascaded down the line. This new leadership philosophy begins with revising the role of a manager at Microsoft.

After thousands of internal surveys and focus groups, the newly defined role became clear: a manager enables success through the empowerment and accountability of their team. Teaching coaching skills to each of its leaders is a priority for Microsoft. Coaching and building the next line of leaders also gets reflected in how they promote and reward future leaders. Today, Microsoft has Glassdoor (one of the world’s largest job and recruiting sites that also offers a database of company reviews from current and ex-employees) approvals of 95 per cent and is rated one of the best places to work for, a far cry from the Microsoft Nadella inherited in 2014.