Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone

by Satya Nadella

our tools to empower teams. We would aspire to help everyone be productive no matter where they are, regardless of the device they use. Data, apps, and settings—all content—needed to roam across computing experiences. Intelligence is an amazing force multiplier. To be successful amid the explosion of data, people need analytics, services, and agents that use intelligence to help them manage their scarcest resource—time. Finally, trust is the foundation upon which ever...

In his perceptive book, Culture, the literary theorist Terry Eagleton wrote that the idea of culture is multifaceted, “a kind of social

unconscious.”

the most relevant for an organization is the values, customs, beliefs, and symbolic practices that men and w...

I think of culture as a complex system made up of individual mindsets—the mindsets of those in front of me. Culture is how an organization thinks and acts, but individuals

shape it.

Earlier in the year, Anu had handed me a copy of Dr. Carol Dweck’s book, Mindset: The New Psychology of Success. Dr. Dweck’s research is about overcoming failures by believing you can. “The view you adopt for yourself profoundly affects the way you lead your life.” She divides the world between learners and non-learners, demonstrating that a fixed mindset will limit you and a growth mindset can move you forward. The hand you are dealt is just the starting point. Passion, toil, and training can help you to soar. (She even writes persuasively

about what she calls the “CEO disease,” an affliction of business leaders who fail to have a growth mindset.)

CEO is the curator of an organization’s culture. As I had told employees in Orlando, 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.

Of course, exhortations from the CEO are only a fraction of what it takes to create real culture change, especially in a huge, very successful organization like Microsoft. An organizational culture is not something that can simply unfreeze, change, and then refreeze in an ideal way. It takes deliberate work, and it takes some specific ideas about what the culture should become. It also requires dramatic, concrete actions that seize the attention of team members and push them out of their familiar comfort zones.

Our culture had been rigid. Each employee had to prove to everyone that he or she knew it all and was the smartest person in the room. Accountability—delivering on time and

hitting numbers—trumped everything. Meetings were formal. Everything had to be planned in perfect detail before the meeting. And it was hard to do a skip-level meeting. 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...

core of our business must be the curiosity and desire to meet a customer’s unarticulated and unmet needs with great technology. There is no way to do that unless we absorb with deeper insight and empathy what they need. To me this was not something abstract, but rather something we all get to practice each day. When we talk to customers, we need to listen. It’s not an idle exercise. It is about being able to predict things that customers will love. That’s growth mindset. We learn about our customers and their businesses with a beginner’s mind and then bring them solutions that meet their needs. We need to be insatiable in our desire to learn from the outside and bring that learning into Microsoft, while still innovating to surprise and delight our users.

Second, we are at our best when we actively seek diversity and inclusion. If we are going to serve the planet as our mission states, we need to reflect the planet. The diversity of our workforce must continue to improve, and we need to include a wide range of opinions and perspectives in our thinking and decision making. In every meeting, don’t just listen—make it possible for others to speak so that everyone’s ideas come through. Inclusiveness will help us become open to learning about our own biases and changing our behaviors so we can tap into the collective power of everyone in the company. We need not just value differences but also actively seek them out, invite them in. And as a result, our ideas will be better, our products will be better, and our customers will be better served.

Finally, we are one company, one Microsoft—not a confederation of fiefdoms. Innovation and competition don’t respect our silos, our org boundaries, so we have to learn to transcend those barriers. We are a family of individuals united by a single, shared mission. It is not about doing what’s comfortable within our own organization, it’s about getting outside that comfort zone, reaching out to do things that are most important for customers. For some companies this comes more naturally. For example, those tech companies born with an open-source mentality get it. One group may create code and intellectual property but it’s open and available for inspection and improvement from other groups inside and outside the company. I tell my colleagues they...

makes our dreams believable and, ultimately, achievable. We must learn to build on the ideas of others and collaborate across boundaries to bring the best of Mic...

If you want to understand the culture inside a software company, show up at a meeting that includes engineers from different parts of the company. These are very smart people who are passionate about building great products. But are they plugged into what customers need and want? Do they include diverse opinions and capabilities when writing code? And do they act like they’re on the same team, even if they work in different groups? Answers to questions like these serve as a great barometer for the culture we need. Demonstrating a growth mindset. Customer-centric. Diverse and inclusive. One

The key to the culture change was individual empowerment. We sometimes underestimate what we each can do to make things happen, and overestimate what others need to do for us.

Culture change is hard. It can be painful. The fundamental source of resistance to change is fear of the unknown. Really big questions for which there are no certain answers can be scary.

When I joined Microsoft, there was an undercurrent among the Indian engineers and programmers. We were aware that despite our contributions, there had yet to be one of us promoted to vice president, a rank that recognizes a leader as an officer of the company. We could get to a certain level but not beyond. In fact, a senior executive, long since gone

from the company, once told another Indian colleague that it was because of our accents—an idea as derogatory as it is outdated. It was the 1990s and I was surprised to hear such bias within such a leading-edge company, especially one led by and founded by such open-minded leaders. Yet, when I looked around, sure enough, there were no Indian VPs despite the well-known top performance of so many Indian engineers and managers. It was not until 2000 that myself and a few other Indians were promoted to the executive ranks.

A manager can be demanding, but must also have the empathy to figure out what will motivate employees. Likewise, an employee is right to put his or her head down and work hard, but they also have the right to expect a pathway to greater responsibility and recognition when they do. There must be balance.

We all want a culture in which we’re heard and supported.

I said earlier that culture can be a vague, amorphous term. That’s why we worked so carefully to define the culture we wanted. And it’s why we measure everything. When it comes to humans, data is not perfect, but we can’t monitor what we can’t measure. So, we routinely survey employees to take their pulse.

began to see some encouraging results. Employees told us they felt the company was heading in the right direction. They felt we were making the right choices for long-term success, and they saw different groups across the company working together more. This was exactly what we were hoping for.

I told these high-potential leaders that once you become a vice president, a partner in this endeavor, the whining is over. You can’t say the coffee around here is bad, or there aren’t enough good people, or I didn’t get the bonus.

“To be a leader in this company, your job is to find the rose petals in a field of shit.”

Perhaps not my best line of poetry, but I wanted these people to stop seeing all the thin...

seeing things that are great and helping others see them too. Constraints are real and will always be with us, but leaders are the champions of overcoming constraints. They make things happen. Every organization will say it differently, but for me there are three expectat...

The first is to bring clarity to those you work with. This is one of the foundational things leaders do every day, every minute. In order to bring clarity, you’ve got to synthesize the complex. Leaders take internal and external noise and synthes...

noise. I don’t want to hear that someone is the smartest person in the room. I want to hear them take their intelligence and use it to develop deep shared understandi...

Second, leaders generate energy, not only on their own teams but across the company. It’s insufficient to focus exclusively on your own unit. Leaders need to inspire optimism, creativity, shared commitment, and growth through times good and bad. They create an environment where everyone can do his or her best w...

Third, and finally, they find a way to deliver success, to make things happen. This means driving innovations that people love and are inspired to work on; finding balance between long-term success and short-term wins; and being boundary-less and globally minded in seeking solutions.

I love these three leadership principles. The heart of my message: Changing the culture at Microsoft doesn’t depend on me, or even on the handful of top leaders I work most closely with. It depends on everyone in the company—including our vast cadre of middle managers who must dedicate themselves to making everyone they work with better, every day.

I totally empathize with other leaders, an...

helping them become even better. Leadership can be a lonely business. It can also be a noisy place. When a leader steps into the arena, especially in today’s loud echo chamber of social media, he or she can be tempted to make decisions that will result in instant gratification. But we have to look beyond the temporal, discounting what someone will write in this moment’s tweet or tomorrow’s news. Reasoned judgment and inner con...

Steve Ballmer helped me deeply understand this with his three Cs. Imagine a target with three concentric rings. The outer ring is concepts. Microsoft, Apple, or Amazon may have an exciting product idea, but is that enough? An organization may have a conceptual vision—a dream or imagination filled with new ideas and new approaches, but do they have what’s in the second ring: capabilities? Do they have the engineering and

design skills required to actually build that concept alone? And finally, the bull’s-eye, is a culture that embraces new concepts and new capabilities and doesn’t choke them out. That’s what’s needed in order to build and sustain innovation-producing and customer-pleasing products—smart partnerships. Concepts are better and capabilities more comprehensive when the culture invites partners to the table. Two or more heads really are better than one.

One way to explain the logic is by turning to game theory, which uses mathematical models to explain cooperation and conflict.

Companies are focused on ensuring that they stay relevant and competitive by embracing this transformation. And we want Microsoft to be their partner. To do so, there are four initiatives every company must make a priority. The first is engaging their customer base by leveraging data to improve the customer experience. Second, they must empower

their own employees by enabling greater and more mobile productivity and collaboration in the new digital world of work. Third, they must optimize operations, automating and simplifying business processes across sales, operations, and finance. Fourth, they must transform their products, services, and business models.

Trust has many other components as well—respect, listening, transparency, staying focused, and being willing to hit reset when necessary.

Partnerships are journeys of mutual exploration, and so we need to be open to unexpected synergies and fresh ways to collaborate. Openness begins with respect—respect for the people at the table and the experiences they bring, respect for the other company and its mission. Do we always agree? Of course not. But we always seek to listen intelligently, seeking to understand not just the words we are hearing but the underlying intentions. I try hard not to bring needless history

into the room, and I don’t let the limitations of the past dictate the c...

Over the years, I’ve found that openness is the best way to get things done and to ensure all parties feel terrific about the outcome. In a world where innovation is continuous and rapid, no one has time to waste on unnecessary cycles of work and effort. Being straightforward with one another is the...

I am often asked, “When is a partnership appropriate as opposed to an acquisition?” The answer is best framed as

another question, “Can we create more value for customers by coming together as one entity or as two?”

Going back to my days as an engineer, I’ve used the following mental model to capture how I manage time:

Employees. Customers. Products. Partners. Each element needs time, attention, and focus if I’m going to create the value for which I am ultimately accountable. All four are important, and without discipline even the best managers can overlook one or more. Employees and products command attention every day, as they are closest to us; customers provide the resources we need to do anything, so they also command energy. But partners provide the lift we need to soar. They help us see around corners, help us locate new opportunities we might not see alone. Since becoming a CEO I now recognize there are many more constituents in this constellation.

There has to be a disciplined approach in which all of these players see the value of a company, of its products and services. Maximizing value comes from maximizing the well-being and vibrancy of all these constituents.