The story of Satya Nadella is an incredible one, a cricket-loving engineer from India turned arguably the CEO of the century. It’s been five years since Nadella took over as CEO at Microsoft and, amazingly with no previous CEO experience, there is no denying that he has been wildly successful. His success can be measured by the exponential rise in the stock price of Microsoft under his reign, but what has earned him the title of CEO of the century is the way he has transformed the entire mindset and culture of such a giant organization.
The Beginnings of a Leader
Born in India, from a young age Nadella dreamed of becoming a professional cricket player but, fortunately for Microsoft, he came to realize that his natural enthusiasm for science and technology was his real talent. Nadella earned a bachelor’s degree in electrical engineering from the reputed Manipal Institute of Technology and then relocated to the US in search of the leading computer-science program. In 1990 he graduated from the University of Wisconsin-Milwaukee and started on the path towards his future as Microsoft’s CEO:
In 1990, Nadella began his career working for Sun Microsystems, the legendary Silicon Valley computer-server company. Then, in 1992, with Bill Gates at the helm and Windows starting its journey to world domination, he landed a job at Microsoft. Over the course of the next 25 years, Nadella rose through the ranks, proving that hard work and a constant thirst for learning can really pay off:
- Nadella’s initial projects included Microsoft’s ill-fated interactive-TV product and the Windows NT operating system.
- He was amongst the few employees who suggested the concept of cloud computing, which eventually resulted in Microsoft Azure.
- In 1999, he landed his first executive role as vice president of Microsoft bCentral, a set of web services for small businesses.
- In 2007, he was given the responsibility to control the Research and Development department and was appointed the senior vice president of the Online Service Division.
- In 2011, Nadella moved to the Systems and Tools division, becoming president.
Nadella saw continued success at Microsoft, the annual turnover of Microsoft by the Systems and Tools division alone is reported to be around $20 Billion today. Even before becoming CEO, he guided Microsoft to move many of its projects and tools to Azure, paving the way for the company’s future in the cloud.
Why Microsoft Needed a New CEO
In 2013, Microsoft began running into trouble. Windows 8 was a disaster, Windows phones couldn’t make a dent in the market compared to iPhone and Android, and Bing was nowhere near competing with Google’s search dominance. CEO at the time, Steve Ballmer, took the heat for the company’s failings. The company was falling behind its competitors and was entirely out of touch with its consumers; things needed to change and quickly.
The change that was needed was much more than the company’s actual services and products, however. Under the reign of Ballmer, developers worked in hostility rather than cooperation and performance reviews were competitively based. The sense of competitiveness ran further than internally too, the ethos was to value its bottom line over everything else; Microsoft didn’t play well with others and certainly didn’t embrace collaboration with its peers.
In 2013 it was time for Ballmer to stand down from his spot at the top. In true form, famous for making epic public performances, Ballmer bid farewell by blaring ‘(I’ve had) The Time of My Life’ through speakers at the KeyArena in Seattle, shouting ‘you work for the greatest company in the world’. Only one problem remained, making it the greatest company in the world – and in stepped Nadella, appointed by Ballmer and Gates to turn things around.
The Reign of Nadella
Nadella began his time at the top as he intended to go on, by not projecting his position at the top as the focus. Instead of shining the spotlight at the pulpit and talking down to the crowds, he is amongst them, joining them as a respectful and collaborative member of their team.
When Nadella took over as CEO in 2014, he highlighted a three-point plan of what Microsoft needed to achieve:
- Change the mindset of Microsoft’s employees and company culture to get Windows to run with everything instead of to get everything to run on Windows.
- Prioritise becoming a cloud-first and mobile-first company.
- Become future-thinking, investing in innovative areas such as AI and quantum computing.
Even though Nadella had no previous CEO experience, he took to the role like a natural. He saw how the industry was changing, with technology moving to the cloud and power shifting from large departments to users and teams. He also recognized that significant cultural changes were needed if the company was to change its image and reclaim its share of the marketplace.
The Shift from Products to People
Nadella aimed to change the top-down structure of Microsoft by inspiring bottom-up innovation. Under his control, the company’s mantra became ‘to empower every person and every organization on the planet to achieve more’, and that mantra began within the company itself. To inspire bottom-up innovation, in 2014 he sponsored the first Hackathon which created innovations such as learning tools for Microsoft OneNote. Last year over 18,000 computer experts and coders turned up to Hackathon week. It is traditions, like this one, that are attracting new talent to the company and giving the power back to the people holding the talent.
While, since Nadella has taken over, Microsoft has continually posted record year-end earnings, made billion-dollar acquisitions and entirely repositioned itself from focusing on devices and services to mastering mobile and cloud, this is not the key to how he repositioned the company. The culture shift has been the driving force behind the change, embracing employees’ enthusiasm and thirst for learning, much like the man himself. Everything the company now does is based on the growth mindset, and the result is a company that is indeed seeing substantial growth.
The decision of Nadella’s appointment as CEO came as a surprise to many. He was, first and foremost an engineer, was fully ingrained in Microsoft tradition and had no CEO experience. However, those who doubted his position can no longer dispute it. Microsoft’s’ market value has increased a quarter of a trillion dollars and Azure now seriously competes with Amazon’s cloud business. The key was that Nadella knew that for Microsoft to change, it had to start from within. He has positioned himself as a formidable CEO with a talent for technology and leadership and a constant desire to learn, even at the top.