How Did Microsoft Change Its Culture So Quickly?

corporate culture at Microsoft

Microsoft has fully transformed as a company since 2014, when Satya Nadella became the CEO. The most noticeable change is its new culture. An essential concept to keep in mind is individuals shape the culture of an organization, how the company thinks, and how it acts. Nadella believed that changing old Microsoft's culture was paramount as it was holding people back from fulfilling their true potential and serving the customers in the right way.

Nadella was heavily influenced by Carol Dweck's book, Mindset: The New Psychology of Success, and the dichotomy of a fixed mindset and a growth mindset. People and organizations with a fixed mindset limit their growth, and those with a growth mindset typically move forward. Nadella believes that "the hand you are dealt is just the starting point." With the right mindset, passion, and training, people can grow. This inspired Nadella to foster a culture of dynamic learning at Microsoft.

Diversity and inclusion also became integral parts of the new culture. Everyone's ideas were welcomed, and everyone was encouraged to speak up in the meetings. Through inclusiveness, individuals became aware of their own biases and could change their behaviors. Teams started to value and seek out different views and opinions. All of this led to better ideas, better products, and customers who were better served.

Nadella gave people the space to share their voices and experiences. More importantly, he suggested that everyone ask themselves regularly the following two questions:

  • When during the day did I have a fixed mindset?
  • Where did I experience a growth mindset?

The danger of a fixed mindset is it reinforces the tendency to do what the person or the organization has always done.

Individual empowerment is a critical element of culture change.  People often underestimate what they can do to make change happen, and they overestimate what others need to do for them. With a growth mindset, we can realize that we have a lot more power over our lives than we thought.

With all that said, changing the culture at any organization, especially a behemoth like Microsoft, is hard and even painful at times. People are afraid of the unknown, and when someone embarks on a major change, nobody can provide any certainty of the outcome of the change. That can be very frightening.

Once again, a growth mindset can help here. When people approach change with a growth mindset, they are better equipped to anticipate and react to uncertainties. Leaders who navigate the organization through a significant change have to innovate in the face of fear. They must be willing to accept uncertainty, take risks, and move on quickly if mistakes happen. Nadella outlined three leadership principles for leading at Microsoft.

  1. Create clarity for your team, synthesize complex topics, and develop a shared understanding of the future course of action.
  2. Generate positive energy and inspire optimism, shared commitment, creativity, and growth when times are good or bad.
  3. Find a way to make things happen by driving innovation and "finding balance between long-term success and short-term wins."

Other characteristics that Nadella embedded into Microsoft's culture were trust, empathy, shared values, and respect for employees and external parties. Nadella took those elements and developed a formula for what trust equates to over time. The formula is:

Empathy + Shared Values + Safety and Reliability = Trust over time

Nadella found that "Trust in today's digital world means everything."

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