It’s not that we had lost our soul, but we needed renewal, a renaissance. In the 1970s, Bill and Paul Allen started Microsoft with the goal of helping to put a computer on every desk and in every home. That was a bold, inspiring, and audacious ambition, one they accomplished. Democratizing and personalizing technology. How many organizations can say they achieved their founding mission? There is no way I would become CEO of a Fortune 500 company if it was not for the democratizing force of Microsoft all over the world. But the world had changed, and it was time for us to change our view of the world.
Worldview is an interesting term, rooted in cognitive philosophy. Simply put, it is how a person comprehensively sees the world—across political, social, and economic borders. What are the common experiences we all share? The question I had been asking before becoming CEO—why do we exist?—forced me to change my tech worldview, and, similarly, now every leader at Microsoft was changing theirs as well. We no longer lived in a PC-centric world. Computing was becoming more ubiquitous. Intelligence was becoming more ambient, meaning computers could observe, collect data, and turn that feedback into insights. We were seeing an ever-increasing wave of digitization of our life, business, and our world more broadly. This was made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning. I simplified all of this and encouraged Microsoft to become “mobile-first and cloud-first.” Not PC-first or even Phone-first. We needed to envision a world where the mobility of the human experience across all devices was what mattered, and the cloud made that mobility possible, enabling the new generation of intelligent experiences. The transformation we would undertake across all parts of our businesses would help Microsoft and our customers thrive in this new world.
It might be easy to be motivated to change through envy. We could envy what Apple had built with its iPhone and its iPad franchise, or what Google had created with its low-cost Android phones and tablets. But envy is negative and outer-directed, not driven from within, and so I knew that it wouldn’t carry us very far down the path to true renewal.
We could also motivate ourselves through competitive zeal. Microsoft is known for rallying the troops with competitive fire. The press loves that, but it’s not me. My approach is to lead with a sense of purpose and pride in what we do, not envy or combativeness.
Our senior leadership team recognized a gap in the competitive landscape that Microsoft was in the unique position to fill. You see, while our competitors defined their products as mobile, we could be about the mobility of human experiences, experiences made possible by our cloud technologies. These two trends together, mobile and cloud, were fundamental to our transformation. In fact, our marketing chief, Chris Capossela, would produce an ad for the Microsoft Cloud based on a speech I gave on this subject. In the ad, Spain’s Real Madrid soccer team is seen attacking, nimbly sprinting toward the goal as Grammy Award–winning hip hop artist Common tells the audience, “We live in a world of mobile technology, but it is not the device that is mobile. It is you.”
The ad, though made for our broader audiences, also helped remind us of our core, the soul that we almost lost. Microsoft had led the PC Revolution by enabling the highest-volume, most-affordable computing devices. But Google, with its free Android operating system, found a way to undercut Windows, something we did not react to quickly enough. In 2008, the Linux-based Android smartphone gobbled up market share and today it runs on more than one billion activated devices.
Looking back, the Nokia deal announced in September 2013, five months before I would become CEO, became another painful example of this loss. We were desperate to catch up after missing the rise of mobile technology. Nokia, which had overtaken Motorola in the 1990s as the largest mobile phone manufacturer, had lost ground to Apple’s iPhone and Google’s Android phones. Nokia fell from the market-share leader in mobile to number three. By 2012, in a risky move to regain ground, Nokia’s CEO Stephen Elop announced it would make Windows the primary operating system for Nokia smartphones. Nokia and Microsoft did make progress (achieving double-digit market share in some European countries), but we still remained a distant third. The hope behind the acquisition was that combining the engineering and design teams at Nokia with software development at Microsoft would accelerate our growth with Windows Phone and strengthen our overall device ecosystem. The merger could be the big, dramatic move Windows needed to catch up with iOS and Android in mobile.
The press criticized the idea and the Microsoft board was resistant. Over the summer, while still in negotiations to buy Nokia outright, Steve Ballmer asked the members of his leadership team, his direct reports, to vote thumbs-up or thumbs-down on the deal. He wanted a public vote to see where the team was on the matter. I voted no. While I respected Steve and understood the logic of growing our market share to build a credible third ecosystem, I did not get why the world needed the third ecosystem in phones, unless we changed the rules.
A few months after I became CEO, the Nokia deal closed, and our teams worked hard to relaunch Windows Phone with new devices and a new operating system that came with new experiences. But it was too late to regain the ground we had lost. We were chasing our competitors’ taillights. Months later, I would have to announce a total write-off of the acquisition as well as plans to eliminate nearly eighteen thousand jobs, the majority of them because of the Nokia devices and services acquisition. It was heartbreaking to know that so many talented people who gave so much of themselves to their work would lose their jobs.
There are many lessons a leader can take from the Nokia acquisition. Buying a company with weak market share is always risky. What we needed most was a fresh and distinctive approach to mobile computing. Where we went wrong initially was failing to recognize that our greatest strengths were already part of the soul of our company—inventing new hardware for Windows, making computing more personal, and making our cloud services work across any device and any platform. We should only be in the phone business when we have something that is really differentiated.
We did ultimately follow up on this key insight. We focused our efforts more narrowly by building Windows Phone with organizations in mind. For example, these business customers now love Continuum, a feature that makes it possible for a phone to replace a PC. To further participate in mobile, we also made Office run across devices. In retrospect, what I regret most is the impact these layoffs had on very talented, passionate people in our phone division.
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Early in my new role, Bill Gates and I walked together from one building to the next to meet with a reporter from Vanity Fair. Bill had decided to remain on the board, but would step down as chairman. The foundation he’d cofounded with his wife, Melinda, would now be his primary focus, but he remained passionate about software and about Microsoft. On our walk, he enthusiastically talked about a new product that would blur the lines between a document and a website. We brainstormed how to develop an architecture that would enable rich capabilities for composing a report, but instead of a static page it would have all the richness of an interactive website. We quickly got into the weeds, volleying ideas back and forth about visualization data structures and storage systems. At one point Bill looked at me, smiled, and said it was good to be talking software engineering.
I knew that part of rediscovering the company’s soul was to bring Bill back, to engage him more deeply in the technical vision for our products and services. Reviewing a software product with Bill is the stuff of legend at Microsoft. In his comical 1994 novel, Microserfs, Douglas Coupland wrote a humorous sketch of Bill’s influence on a Microsoft programmer. A developer named Michael locks himself in his office at 11 a.m. after getting a flame mail from Bill who had reviewed some of his code. No one on his floor had ever been flamed by Bill personally. “The episode was tinged with glamour and we were somewhat jealous.” By 2:30 a.m., concerned about Michael, his team goes to the twenty-four-hour Safeway fo
r “flat” food that can be slipped underneath his door. While this exaggerated legend doesn’t exactly capture the culture I hoped to create, I knew that getting our founder back in the product-development loop would inspire our people and up our game.
Over the first several months of my tenure, I devoted a lot of time to listening, to anyone and everyone just as I had promised to do in that Thanksgiving memo to the board. I met with all of our leaders and made a point of going out as I always had to meet with partners and customers. As I listened, there were two questions I was still trying to answer. The first, why are we here? Answering this question would be central to defining the company for years to come. The second question was, what do we do next? There is that great closing scene in The Candidate when Robert Redford, having finally won the election, pulls his advisor into a room and asks, “What do we do now?” For starters, I decided to listen.
Straightaway I heard from hundreds of employees at every level and in every part of the company. We held focus groups to allow people to share their opinions anonymously as well. Listening was the most important thing I accomplished each day because it would build the foundation of my leadership for years to come. To my first question, why does Microsoft exist, the message was loud and clear. We exist to build products that empower others. That is the meaning we’re all looking to infuse into our work. I heard other things as well. Employees wanted a CEO who would make crucial changes, but one who also respected the original ideals of Microsoft, which had always been to change the world. They wanted a clear, tangible and inspiring vision. They wanted to hear more frequently about progress in transparent and simple ways. Engineers wanted to lead again, not follow. They wanted to up the coolness. We had technology the press would fawn over in Silicon Valley, such as leading-edge artificial intelligence, but we weren’t showing it off. What they really demanded was a road map to remove paralysis. For example, Google made headlines with glitzy demonstrations of their artificial intelligence experiments while we had world-class speech and vision recognition and advanced machine learning that we kept under wraps. The real challenge I was contemplating, though, was how do we take our technologies and do things that speak to our identity and add unique value for our customers?
On my second question, where do we go from here, I became convinced that the new CEO of Microsoft needed to do several things very well right away, during the first year.
Communicate clearly and regularly our sense of mission, worldview, and business and innovation ambitions.
Drive cultural change from top to bottom, and get the right team in the right place.
Build new and surprising partnerships in which we can grow the pie and delight customers.
Be ready to catch the next wave of innovation and platform shifts. Reframe our opportunity for a mobile- and cloud-first world, and drive our execution with urgency.
Stand for timeless values, and restore productivity and economic growth for everyone.
This list does not suggest a formula for success since even today Microsoft is still very much in the midst of change. We will not know the lasting impact of our approach for some time.
But between the summers of 2014 and 2015, we pushed for change with a steady drumbeat. Having listened with great intensity and curiosity during those first several months, it was time to act and to do so with confidence and conviction. My first title at Microsoft had been “evangelist,” a common term in technology for someone who drives a standard or product to achieve critical mass. Now here I was evangelizing the notion that we needed to rediscover our soul. The mission of a company is in many ways a statement about its soul, and that’s where I went first.
To make things real and drive fidelity of the ideas through an organization of 100,000-plus people operating across more than 190 countries we developed a clear connection between our mission and our culture. We defined our mission, worldview, ambitions, and culture in one page—no small feat for a company that loves massive PowerPoint decks. That was the relatively easy part. The harder part was to not tweak it—to let it stand. I’d want to edit a word here or there, add a row, just tinker with it before each speech. Then, I’d be reminded again “consistency is better than perfection.”
In the years prior to taking on my new role, the executive team spent far too much time trying to explain the massive company and our strategy. We needed a shared understanding. The simple framework we came up with catalyzed people to bring these ideas to life.
The work in these first few years of my tenure was all about getting the flywheel of change spinning. Sure, it took regular communications, but it also took discipline and consistency on my part and that of the senior leadership team. We needed to inspire and drive change. We challenged ourselves, “At the end of the next year if we were tried in a court of law and the charge was that we failed to pursue our mission, would there be enough evidence to convict us?” Just saying interesting things wasn’t enough. I, all of us, had to do them. And our employees had to see how everything we did reinforced our mission, ambitions, and culture. And then they needed to start doing the same.
Our three ambitions defined how we organized teams and reported results. Our mission guided where I visited and who I met while I was there. My travel itinerary frequently started with a visit to a school or hospital in the community. I particularly enjoyed ceremonies with the indigenous peoples in Colombia and New Zealand, learning about how they used Microsoft technology to preserve their history and traditions for generations and how they think about growth. Beyond this, we were greenlighting mothballed products and projects, inviting new partnerships with competitors, showing up in surprising places, making accessibility a first-class citizen in our product design efforts, and constantly traveling the world to engage our people, partners, and customers.
On Thursday, July 10, 2014, only a few days into the start of Microsoft’s new fiscal year, I sent an all-company email, a sort of manifesto, at 6:02 a.m. so that it landed in in-boxes at the beginning of the day in all U.S. time zones and before the weekend for employees around the world. We are a global company and we needed to think like one. “In order to accelerate our innovation, we must rediscover our soul—our unique core. We must all understand and embrace what only Microsoft can contribute to the world and how we can once again change the world. I consider the job before us to be bolder and more ambitious than anything we have ever done. Microsoft is the productivity and platform company for the mobile-first, cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.”
I wrote that productivity for us goes well beyond documents, spreadsheets, and slides. We will obsess over helping people who are swimming in a growing sea of devices, apps, data, and social networks. We will build software to be more predictive, personal, and helpful. We will think about customers as “dual users,” people who use technology for their work, their school, and their personal digital life. In the email I inserted the image of a target and in its center appeared the words, “digital work and life experiences,” surrounded by our cloud platform and computer devices. Soon there will be 3 billion people connected to the Internet, sensors, and the Internet of Things (IoT). Yes, PC sales were slowing, and so we needed to convert Nietzsche’s “courage in the face of reality” into “courage in the face of opportunity.” We needed to win the billions of connected devices, not fret about a shrinking market.
Employees responded immediately. In just the first twenty-four hours I heard from hundreds of employees in every part of the company and in every part of the world. They said the language of empowering everyone on the planet to achieve more inspired them personally, and they saw how it applied to their daily work, whether they were a coder, designer, marketer, or customer-support technician. Many offered helpful suggestions and ideas. One of my favorites was to challenge conventional thinking more. Why is Xbox a box since traditional television and cable boxes are fading? What if Kinect, our motion-
sensing technology used for video games and robotics, came with wings or wheels so it could go fetch lost keys or wallets? Many wrote to me to say that after years of frustration they felt a new energy. I was determined not to squander that.
The press covering Microsoft were given copies of the email, and immediately offered their takes on Microsoft’s future under my leadership. The New York Times focused on the cultural change under way. The Washington Post delighted in “my knack for squeezing literary references into the spaces between his required lines.” Bloomberg warned that if Microsoft was going to succeed in both the corporate and consumer world with productivity as its focus, “it will need to deliver some products that live up to the rhetoric.” They were right. We wanted customers not just to use our products, but to love them.
Articulating our core raison d’être and business ambitions was a good first step. But I also needed to get the right people on the bus to join me in leading these changes. A few weeks later I announced that Peggy Johnson, a longtime Qualcomm executive, would join as head of business development, striking deals to acquire and partner with exciting new products and services. Within a few weeks we bought Minecraft, the popular online game, which we knew would boost engagement with our cloud and our devices. A few weeks after that I announced that Kathleen Hogan, who was leading our global consulting and support business, with experience at McKinsey, a worldwide management consulting firm, and Oracle, would become our Chief People Officer and my partner in the cultural transformation to come. I persuaded Kurt Delbene, who had once led our Office division, to return as Chief Strategy Officer after he was handpicked by President Obama to fix Healthcare.org, the nation’s health insurance website. We had two people overseeing marketing, and I chose to give the entire role to Chris Capossela. Scott Guthrie, who had been my engineering partner in building the cloud business, was chosen to lead Cloud and Enterprise, our fastest growing business.
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