Over time these changes meant that some executives left. They were all talented people, but the senior leadership team needed to become a cohesive team that shared a common worldview. For anything monumental to happen—great software, innovative hardware, or even a sustainable institution—there needs to be one great mind or a set of agreeing minds. I don’t mean yes-men and yes-women. Debate and argument are essential. Improving upon each other’s ideas is crucial. I wanted people to speak up. “Oh, here’s a customer segmentation study I’ve done.” “Here’s a pricing approach that contradicts this idea.” It’s great to have a good old-fashioned college debate. But there also has to be high quality agreement. We needed a senior leadership team (SLT) that would lean into each other’s problems, promote dialogue, and be effective. We needed everyone to view the SLT as his or her first team, not just another meeting they attended. We needed to be aligned on mission, strategy, and culture.
I like to think of the SLT as a sort of Legion of Superheroes, with each leader coming to the table with a unique superpower to contribute for the common good. Amy is our conscience, keeping us intellectually honest and accountable for doing what we committed to do. Kurt pushes us on being rigorous about our strategy and operations. Product leaders like Terry, Scott, Harry, and more recently Rajesh Jha and Kevin Scott push for alignment on product plans, knowing that when we are an inch apart on strategy at the leadership level, our product teams end up miles apart in execution. Brad helps us navigate the ever-evolving legal and policy landscape, always finding just the right position on important global and domestic issues. Kathleen constantly channels the voice of our employees. Peggy does the same for partners, and Chris, Jean-Philippe Courtois, and Judson Althoff for our customers. They are the true heroes of our continuing transformation.
One thing we were all clear on is that beyond the SLT, we needed a broader set of leaders who could be brought into modeling the mission and building the culture we needed. For as long as I could remember, each year the top 150 or so executives would gather for an annual retreat. We left our offices to drive to a remote, mountainous area about two hours from our headquarters. There, we would take up residence at a quiet, comfortable hotel where we would work to get on the same page strategically. This retreat has always been a good idea. Each team shares product plans and performs demos of their latest technology breakthroughs long before the world will experience them. And everyone appreciates having time to reconnect and see their colleagues over meals by the fire. But one aspect of the offsite really bugged me. Here we were with all this talent, all this bandwidth, and all this IQ in one place just talking at each other in the deep woods. And frankly, it seemed like most of the talking was about poking holes in each other’s ideas. Enough. I figured it was time to hit refresh and experiment. That year, we did several things to symbolize change and to get the top leaders fully on board. I needed them to buy into where we were going, and I needed them to help get us there.
The first change to the retreat was inviting founders of companies we had acquired in the year prior. These new Microsoft leaders were mission-oriented, innovative, born in the mobile-first and cloud-first world. I knew we could learn from their fresh, outside perspective. The only problem was that most of these leaders did not officially “qualify” to go to executive retreats given the person’s level in the organization. To make matters worse, neither did the manager, or even their manager’s manager. Remember, the retreat had been only for the most senior leaders. Inviting them was not one of my more popular decisions. But they showed up bright eyed, completely ignorant of the history they were breaking. They asked questions. They shared their own journeys. They pushed us to be better.
Another decision, not universally loved, was scheduling customer visits during the retreat. There was more than a little eyerolling and groaning. Why do we have to meet with customers during a retreat? We already meet with them in the normal course of business. Do you think we don’t know what our customers really need? But we pushed through the cynicism and met in a conference room the first morning of the retreat. We split up into a dozen or so teams and boarded vans. Each van had a nervous account manager hosting the trip along with a cross section of the company’s most senior researchers, engineers, sales, marketing, finance, HR, and operations people, all new to working with one another. The vans headed off in different directions across the Puget Sound region to meet with our customers—schools, universities, large enterprises, nonprofits, startups, hospitals, small businesses, and the like. The executives listened. They learned together. They made new connections with one another. They put down those proverbial guns and discovered new ways Microsoft could fulfill its mission in the world. They experienced the power of having a diverse, cross-company team solving customer’s problems together.
Perhaps the most important thing we did during the experimental retreat was engage the leaders in more open and honest dialogue about our cultural evolution. Kathleen Hogan, our Chief People Officer and my partner in this endeavor, knew we needed to get this group’s feedback and buy-in. So after a long day of visiting customers in the Seattle area and driving back into the mountains, people were again divided into seventeen random groups of about ten each. They were then pointed to dinner tables with the assignment to share their own account of where the company’s culture stood and their ideas on how to evolve it. Some of us guessed this exercise would be futile—a cute nod to leader engagement. We figured these leaders would be tired. They’d be persnickety. They’d want to congregate back with their own friends. They’d say culture was my job or HR’s job.
We were dead wrong. Discussions went long into the evening as the broader executive team gained a common understanding of what others experienced in leading their own teams, and brainstormed ways to create the culture we all aspired to have.
The next morning, Kathleen and each table leader joined me for breakfast to report about what they learned and to share big ideas, ideas born from the previous night’s brainstorms. They were passionate, eager to help, and the energy was infectious. In the end, I left the retreat inspired by those ideas, but more importantly I left inspired by the deep engagement and commitment I saw from these leaders. We knew we needed to build on this momentum so we enrolled each of the table discussion leaders in a sort of culture cabinet—a group of trusted advisors and senior leaders who were committed to helping shape and lead the culture change in every part of our company. The change was coming from within.
By the summer of 2015 our leadership team was really coming together and the company was beginning to see momentum. Windows 10, which would be our most ambitious version ever, was nearing launch. The launch of Surface Pro 3 would prove that consumers and businesses alike wanted a tablet that could replace their laptop. We delivered Office for all devices, including the iPhone, and our cloud-based O365 added nearly 10 million subscribers. Azure, Microsoft’s cloud platform that competes with Amazon, was growing rapidly. In the months that followed my email to all employees, our leadership team had refined the thinking in that memo and had decided we would affirmatively change the company’s mission statement. Our transformation was under way, though we still had a long way to go.
Shortly after the retreat I was scheduled to head for a weeklong tour across Asia starting with an important conference in China. Every weekend I would call my mom and talk to her. Since I was traveling that Saturday, I decided to call her before getting on the plane. It was Ugadi, New Year’s Day for our region of India. I had not realized that, so my mom reminded me and wished me a happy New Year. It was a brief call since I was late to get to the airport, and we talked briefly about the week and all that was going on. We ended the call as usual with her asking me if I was happy with what I was doing and me assuring her that I was. What a blessing because two hours before landing I received a worrisome email from Anu back home asking if I had landed. I sensed something was wrong and after some back-and-forth learned that my mother had unexpectedly passed away. Deeply
shaken, I canceled my trip and hurried on to Hyderabad. Over time I would realize that while the death of a parent is painful, my mom is always there in my consciousness. She will always be there. Her calm and mindfulness continue to shape my relationships with people and the world around me to this day.
During that season, I reflected on her role in my life and her constant push to find a sense of contentment and meaning in all I did. This idea was sitting with me through the spring as I prepared to share our new mission and culture with employees globally. That July, I boarded another plane for Orlando, Florida, with a renewed sense of optimism. Every year in July some fifteen thousand customer-facing Microsoft employees gather for a global summit to hear the latest strategies and initiatives and to see demos of new tech products in development. The gathering would be my opportunity to update employees on our progress and enroll them in the changes under way.
With the energy of thousands of colleagues pulsing through the auditorium, I stood backstage rehearsing how I would present our new mission and the imperative to transform our culture. Microsoft people are infamous for presenting a ton of PowerPoint slides when they speak, but I don’t like to rely very much on slides or notes. So I was free to just channel what I was thinking and feeling, to let it flow. A computer on every desk and in every home, which Bill and Paul had introduced forty years earlier as the company’s mission, was actually more of a goal—an inspiring one for its era. The more I thought about it, the more I questioned what it was that had motivated us to create personal computers in the first place. What was the spirit behind the first line of code ever written for the BASIC interpreter on that primitive computer, the Altair? It was to empower people. And that was still what motivated all of our efforts: to empower every person and every organization on the planet to achieve more. We are in the empowerment business, I said as I took the stage, and not just to empower startups and tech-savvy users on the American West Coast, but everyone on the planet. Helping people and their organizations achieve more is our sweet spot. That’s what informs our decisions and inspires our passion; it’s also what makes us different from other companies. We make things that help other people make things and make things happen.
That’s the essence of our mission, but our employees and our business partners, ranging from Accenture to Best Buy, Hewlett Packard to Dell, wanted to hear more. They wanted to know our business priorities. To deliver on this promise of empowerment, I said that we must galvanize all of our resources around three interconnected ambitions.
First, we must reinvent productivity and business processes. We needed to evolve beyond simply building individual productivity tools and start designing an intelligent fabric for computing based on four principles—collaboration, mobility, intelligence, and trust. People still do important work as individuals, but collaboration is the new norm, so we build 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 everything we do is built. That’s why we’ve invested heavily in security and compliance that set the standard for enterprises.
Second, we will build the intelligent cloud platform, an ambition closely linked with the first ambition. Every organization today needs new cloud-based infrastructure and applications that can convert vast amounts of data into predictive and analytical power through the use of advanced analytics, machine learning, and AI. From an infrastructure perspective, we would come to deliver on the promise of a global, hyper-scale cloud platform with dozens of unique data centers around the world. We would, over the years, invest billions of dollars each year to build out more and more infrastructure so that our customers could scale their solutions without worrying about their cloud platform’s capacity or the complex demands of transparency, reliability, security, privacy, and compliance. Our cloud would be open and offer choice so that we could support a wide range of application platforms and developer tools. We would build our server products to become the edge of our cloud, supporting true hybrid computing. And it would not be just infrastructure driving this growth, but also the intelligence we would infuse into applications. We would offer cognitive services for vision, speech, text, recommendations, and face and emotion detection. Developers would simply use APIs within their applications to augment users’ experiences by enabling solutions to see, hear, speak, and interpret the world around them. Our intelligent cloud would democratize these capabilities for startups, small businesses, and enterprises alike.
Third, we needed to move people from needing Windows to choosing Windows to loving Windows by creating more personal computing. Just as we would transform business and society through cloud computing, we also needed to revolutionize the workplace to help organizations and people be more productive. We launched Windows 10 with a new concept—to enable Windows as a service, continuously delivering value across all of our products. We engineered Windows 10 to enable innovative and more natural ways to interact and engage with devices—ask a question with your voice, draw with the flick of a pen, and secure your most important things with a smile or a touch. These experiences place users at the center so they can move seamlessly across all devices—from the PC, Xbox, phones, and Surface Hub, to Microsoft HoloLens, and Windows Mixed Reality.
We needed employees and partners on board for the transformation ahead, and we needed Wall Street to be with us as well. Amy Hood, our CFO, understood the culture change we needed to navigate. She also became the crucial partner I needed for precise attention to quantitative detail across the business. Her job is where the rubber meets the road. Ahead of my first financial analyst meeting, Amy helped to translate the mission and ambitions into language and goals investors needed to hear. She helped, for example, shape the goal to build a $20 billion cloud business, something investors grabbed on to and tracked quarter after quarter. It took us from a defensive frame amid falling PC and phone share to an offensive mindset. We went from deflection to ownership of our future.
Rediscovering the soul of Microsoft, redefining our mission, and outlining the business ambitions that would help investors and customers grow our company—these had been my priorities with the first inkling that I would become CEO. Getting our strategy right had preoccupied me from the beginning. But as management guru Peter Drucker once said, “Culture eats strategy for breakfast.” As I concluded my talk that morning in Orlando, I focused on what would be our grandest endeavor, the highest hurdle—transforming the Microsoft culture.
* * *
It’s surprising when an arena jammed to the rafters with fifteen thousand people falls silent. It’s also unsettling when nothing can be seen because of the blinding stage lights. That’s how I felt as I stood onstage in Orlando. I could feel a small lump grow in my throat. I was about to launch into a topic that was at once crucial for Microsoft to get right, but also deeply personal for me.
“I’m going to close out by talking about our culture. To me it is everything,” I said.
Bill and Steve had made this annual address many times to employees over the years. Bill often looked off into the future, predicting tech trends and how Microsoft would lead. Steve rallied the troops, whipping everyone into a frenzy of excitement. I had used the first part of my speech to proclaim a new mission, one rooted in rediscovering the soul of our company. I had outlined a series of new business ambitions. But as I had foreshadowed in that Thanksgiving memo to the board of directors, real change depended on culture change.
Culture can be a vague and amorphous term. In his perceptive book, Culture, the literary theorist Terry Eagleton wrote that the idea of culture is multifaceted, “a kind of social unconscious.” With razor precision, he separates culture into four differ
ent meanings, but the most relevant for an organization is the values, customs, beliefs, and symbolic practices that men and women live and breathe each day. Culture is made up of acts that become habitual and accrue to something coherent and meaningful. Eagleton, who lives in Ireland, notes that a mailbox in his country is evidence of civilization, but the fact they are all painted green is evidence of culture. 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.
In my own life, it’s the language, routines, and mindset of my parents back in India and my immediate family in Seattle that helped form me and still guide me to this day. It’s that diverse collection of classmates back in Hyderabad who shared a learning mindset that would propel them on to leadership in government, business, sports, and entertainment. In all of these experiences, I’d been encouraged to follow my curiosity and to push the limits of my own capabilities, and now I was beginning to see how this approach would be critical to Microsoft as it confronted the burden of its past success.
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.)
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