CULTURE & DIGITAL TRANSFORMATION: HOW A GROWTH MINDSET IS POWERING THE CULTURE EVOLUTION AT MICROSOFT

On the 4th of February 2014 Satya Nadella became the 3rd CEO of Microsoft, one of the first global technology titans. Many questioned the wisdom of

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Hilton Barbour

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On the 4th of February 2014 Satya Nadella became the 3rd CEO of Microsoft, one of the first global technology titans. Many questioned the wisdom of promoting a Microsoft insider, particularly when the organization appeared to have lost its way in terms of innovation. And its stock performance had been sluggish. Four years later those naysayers have been proved spectacularly wrong. Microsoft stock has rebounded, customer feedback never more positive and, for an organization once renowned for its hyper-competitiveness, Microsoft’s culture – not just its technology – is being touted as the game-changer. I had the opportunity to sit down with Microsoft Canada’s Head of HR Cherise Mendoza to talk about Microsoft’s Culture resurgence and how a new perspective and approach to teamwork and leadership is powering Microsoft today.

CM: It’s true. Digital Transformation certainly is one of the top priorities for any executive today. For us, we see it as the enabler of the 4th Industrial Revolution society is experiencing today. It is how businesses create new business models, create unique competitive advantage and, as we’re seeing in numerous categories, disrupt or evolve markets. More specifically we look at Digital Transformation as resting on 4 pillars – How can Digital enhance the experience for our customers and for the customers they’re trying to attract? How does Digital empower employees to contribute and engage inside their organizations in new ways? How can Digital deliver more operational optimization? And, not surprisingly in a “disruptive” era, how does Digital unlock or unleash new products or business models?

Those pillars sit at the very heart of what, we believe, organizations are seeking from Digital Transformation. And those objectives are one’s that Microsoft is actively seeking too.

CM: Absolutely. You’re right that we, like many other technology organizations, did previously look at features and functions as the tip of the spear. That view is too narrow for today’s business environment. Today it is about taking a people centric approach that looks at the entire system to business rather than a technology-first one. How does technology fit into an organization? How do people relate to technology – like Millennials versus Boomers – and how will they use the technology? What are the organizational behaviours that we need to consider?

These are richer and more rewarding conversations to have with customers because they’re about solving for the business and for the use case, not just pushing a particular solution.

CM: Yes, historically we would’ve looked for those able to write elegant code but we’re looking for different skills today. Our CEO Satya Nadella has been very explicit that Microsoft needs to be an organization that can democratize technology for everyone. That requires the technology to be simple and easy to use, to be open and accessible to everyone and to be applied to help businesses connect dots faster or inform new and different decisions. We’ll always need the best and the brightest technical skills here but now we’ve got a broader talent requirement to build these solutions. Equally important to skillset is attitude and mindset. We are looking for “everyday learners” who have a curiosity and an openness to think about things in new and different ways.

CM: Diversity has certainly become a popular phrase in the culture discussion. We believe that it is more than just a cultural tenet, it drives everything we do. We can’t build products and solutions if we don’t have teams and people who reflect our customers and their customers too. Look at how multi-cultural Toronto and Canada are for example. If our teams don’t understand how those richly diverse groups think, make decisions, interact with each other etc, how can we ever build solutions that help them?

But, as you talk about how work is evolving, I’m equally delighted that conversations like where you work and how you work is moving towards what impact are you having at work and how the organization can help you make the most impact.

That is certainly a more mature or enlightened perspective. But that doesn’t just happen organically. That requires a reorientation of leadership and the system-wide thinking you referenced earlier. Talk to me about how Satya Nadella’s leadership has helped this happen. CM: Satya is certainly a different type of leader than the two CEO’s that preceded him here at Microsoft. And, while he may have a distinctly different style to Steve Ballmer, who I respect immensely, all of our Microsoft leaders have been authentic to themselves and authentic to how they saw the organization growing. In Satya’s case that authenticity comes from a profound belief in having a growth mindset and a belief that a growth mindset across the organization is the path to Microsoft’s success.

At its heart having a growth mindset is a profoundly different orientation to problems and problem solving. It looks at failure as learning, not as something to punish or to shy away from. That feedback is never personal but should be given, and received, as an opportunity to grow and get better. It’s a very powerful way to drive development and growth but it does require the ability to have, and embrace, different conversations and attitudes within the organization.

Embedding that growth mindset hasn’t meant ignoring some of the brilliant legacy that Microsoft has too. We’ve always been an organization with bold ambitions. Bill Gate’s famous “computer on every desktop” was astounding for the time in which he said it. When Satya took over he saw the opportunity to set his own bold mission which is ” to empower every person and every organization on the planet to achieve more” That’s an amazing mission for us because it is as bold as any other in our history but it is also one that our people can readily say “yes, I want to be part of that”

CM: Deliberately and purposefully and with patience is my simple answer but it’s obviously more than that. As you know, culture change or culture evolution as we prefer to think of it, is a journey. A journey that requires constant and relentless commitment. Not surprising that requires Satya, and our other leaders, to keep reinforcing it again and again in their actions and in their communications. Being a technology company gives us certain advantages in sharing knowledge and content and having more tools at our disposal but that relentless commitment is critical. And, over time, we’ve started to see this starting to breathe and take off inside the organization.

The other part is to keep it authentic which is something Satya has been phenomenal at.

He’s remained consistent to his belief that this growth mindset is critical for Microsoft and that it is very powerful. Particularly because he’s been equally prepared to say that if you’re not of a growth mindset orientation then perhaps Microsoft isn’t the place for you. Being that explicit about what’s required at Microsoft today is equal parts bold and authentic.

Ultimately that has driven tremendous clarity throughout the organization.

For one thing it has reduced the type of internal competitiveness that used to be our hallmark. That is no longer seen as the way we’ll progress the company. Its brought clarity to our strategy which, as Satya so eloquently states it, is about finding out how we make things magical for our customers and our people.

CM:. Perhaps the biggest evolution is in the way we’re looking at the behaviours of our people and adjusting how we define what’s important. Where reviewing people on a curve was how we may have done it historically, we now assess impact based on the following criteria:

Their individual accomplishments relative to their team, their business and for their customers

Contribution to other’s success – willingness and ability to share their learnings for others to benefit from

Ability to learn from others – essentially how they internalize learnings from others to drive better and more collaborative results

Additionally, we redefined our definition of leadership across three what we call “Leadership Principles and have invited not just leaders by title to participate but everyone to essentially “lead” in their own capacity. One, not surprising is around clarity. That means having clarity of objectives and clarity of expectations and importantly, ensuring clarity on the outcomes we’re looking for. Then it’s about creating energy. How do you create energy for yourself and energy within the teams and projects you are working on. We understand that everyone brings different types of energy based on their own individual style, but we wanted to make sure our employees knew that creating energy was important to Microsoft. Lastly, it’s about delivering success. That means clarity of expected outcomes we are looking for from every person here at Microsoft. Back to our mission it’s about making those objectives and outcomes bold and ambitious so our people can grow.

Having that clarity on what’s important also means I can have a more rewarding conversation within my own team but also with other leaders in the organization.

How are you bringing clarity?

How are you creating energy?

How are you delivering success?

That’s very powerful.

CM: It certainly is all about a holistic system-like approach. On a tactical level we’ve got diversity and inclusion decals on our elevators which may seem small but it is a nudge to say we’re open to chat about this topic openly. We have growth mindset memes on the coffee mugs and each week Satya has a “Mindset Moment” that he broadcasts to the entire organization. Sometimes its about something going on with a major initiative, sometimes just an observation or anecdote he wants to share. All of these efforts act as a subtle reinforcement.

But he’s been equally consistent about this being the “new normal” at Microsoft and asking employees to look deep inside themselves and decide if they’re in the boat. And, if they’re not, that’s okay but perhaps they should find a new boat. That’s not a conversation that many CEO’s are comfortable stating and standing behind, but Satya certainly is.

For me one of the interesting outcomes of this focus has actually come from a rather unusual source – our new hires. When I sit in our new hire orientation, it is not unusual to hear that Satya and the cultural evolution we’re on here at Microsoft is one of the top 3 reasons they applied to join us. That’s a fantastic recognition that our culture is becoming a magnet for talent too.

CM: I’m glad you asked that. We’re a very data driven company and we always will be. It’s in our DNA. But we’ve got remarkable tools like our Workplace Analytics tools or our Power BI that allow us to use data to see how we’re actually performing and where we need to reconsider how we’re doing things.

Case in point, we had an annual business review process that was a watershed moment for our people. Over the years it had evolved into this monster where it took teams of 30 to 40 people several days to prepare for this important meeting at our Redmond headquarters. We ran our analytics tools over that process and quickly realized we were stacking up thousands of hours of opportunity cost doing these reviews in the way we were. We quickly started implementing changes and we’re better for it. That data and analysis – essentially us eating our own dog food – is where technology can be a remarkable tool in tackling culture.

CM: That’s tough because every culture is unique, and my challenges might differ significantly from others. Here’s what I’ve seen from my vantage point here at Microsoft.

Firstly, you need to understand your culture intimately. Understand what serves you as you’re moving forward and what you can let go. That’s critical.

Secondly, take a system-wide view to understand what and why you’re changing. Ensure you have that context before making any change.

Lastly, and I credit Satya for this one, be authentic and genuine to yourself and your culture. All cultures are unique, so you can never lose sight of that.

I’ve just released my 2nd eBook on the Intersection of Culture and Digital Transformation. It includes a variety of interviews with business leaders in Telecommunications, Beverages, Packaged Goods, Healthcare and Professional Services. Download it for free from http://www.hiltonbarbour.com/culture-ebook-2/

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