Hit Refresh

by Satya Nadella

  Our acquisition of Sweden-based Mojang and its video game Minecraft also represented a growth mindset because it created new energy and engagement for people on our mobile and cloud technologies, and it would open new opportunities in the education software space.

  The story of how the Minecraft acquisition happened illustrates some of the key qualities of a growth mindset, including the readiness to empower and learn from individuals who possess insights and passion that the rest of the organization needs to learn from. In this case, the individual was Phil Spencer, who heads Xbox. Phil understood that we needed to be the most attractive platform in the world for gamers, and he knew Minecraft had a dedicated and gigantic community of players who invented and built new worlds in this virtual Lego-like video game.

  It’s the rare video game that is invited into the classroom, and Minecraft is not just invited but desired. Teachers love the way it encourages building, collaboration, and exploration. It’s a 3D sandbox of sorts. If the classroom curriculum calls for building a river ecosystem with marshes, Minecraft can do that. If the river needs to flow, the Minecraft logic function can make that happen. It teaches digital citizenship because it’s multiplayer. Twelve students in a classroom can be told to go build a house and within minutes they form teams and get to work—a model of the workplace of the future.

  Phil and his team built a great relationship with the Swedish game studio and managed to expand the Minecraft franchise to multiple devices including mobile and console. Early in Microsoft’s relationship with Mojang, before I was CEO, Phil presented an opportunity to purchase Minecraft, but Phil’s boss at the time chose not to move forward. For some, such a visible, high-level rejection could have been withering, but Phil didn’t give up. He knew that this beloved game belonged in a place where it could continue to scale up and prosper. He also knew that for Microsoft, bringing Minecraft into our ecosystem could lead to deeper engagement with the next generation of gamers. He knew our cloud could help it scale to reach every corner of the globe.

  Phil maintained a great relationship with Mojang, continuing to build trust, and one day, Phil’s team got a text that the company was for sale again. They could have gone to any of our competitors to strike a deal, but they came back to us. Phil had recently become the head of Xbox, and I was new in my role as CEO. He brought the deal to me for reconsideration. I felt we could bring the inherent strengths of Microsoft to the product while preserving the integrity and creativity of the small indie group that invented it. We pulled the trigger on a $2.5 billion acquisition. Today Minecraft is one of the bestselling games of all time on the PC, Xbox, and mobile. It has tremendous and lasting gamer engagement. Bill Gates and Steve Ballmer, who were still on the board when the deal was presented, later laughed and said they had initially scratched their heads, failing to understand the wisdom of the move. Now we all get it.

  That’s a growth mindset, and it highlights individual empowerment—what one person or one team can do against the odds.

  Even though I am ambivalent about questions from outsiders about how the culture change is going, it’s easy to see there is a tangible shift happening inside Microsoft. 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 company.

  I remember a gathering in 2012 of top engineers from across Microsoft. It was one of a series of WHiPS, short for Windows High-Powered Summits, envisioned as opportunities to improve products and solve problems that rely on collaboration across code bases. There was a high degree of ownership and a lot of pride. But to my dismay, the meeting deteriorated into a gripe session. One developer argued that he had fixed something in the Windows code base that would help with a problem customers had discovered in an application that ran on Windows. Even though he had fixed it, the Windows developers were not accepting, or “checking-in,” his new code. The discussion quickly devolved into argument and then name-calling. This was not the culture we’re looking for.

  When I attended another WHiPS a few years later, I heard a very different conversation. A developer announced that he had found a means for capturing, or taking a screenshot of, a moving image—a big improvement over our existing “snipping” tool, which was capable only of capturing a static image. A small piece of code that makes a big difference to a designer or editor. As in 2012, though, his fix had not yet been integrated into the Windows code. With a growth mindset, yet is an important clarification.

  Terry Myerson, the head of Windows, jumped into the conversation before the arguing and finger-pointing could begin. “Send the fix again and we’ll take care of it.”

  Even back in 2012 the energy for culture change had been there, but we needed to create a conduit for change. We had to break down the dam and allow change to flow. Now that has begun to happen.

  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. We had to get out of the mode of thinking in which we assume that others have more power over us than we do. I became irritated once during an employee Q&A when someone asked me, “Why can’t I print a document from my mobile phone?” I politely told him, “Make it happen. You have full authority.”

  Another time, members of a chat group on Yammer, our corporate social media service for internal conversations, were complaining that people were leaving half-used milk cartons in the office refrigerator. Apparently people would open a fresh eight-ounce container of milk, pour some in their coffee or tea, and then leave it out on the counter thinking others would finish it. But no one wants to use a personal milk container opened by somebody else that is beginning to sour. It blew up on Yammer, and I used one of my video messages to employees to have a good laugh at it, showcasing it as a humorous example of a fixed mindset.

  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.

  Consider one of the questions we ask ourselves continually: What is the computing platform of the future? Windows has been the PC platform of choice for decades, but now we’re imagining a new era. The cloud and its edge with multisensory and multi-device experiences will enable new computers and new computing that is sensitive to human presence and responsive to individual preferences. We’re hard at work building the ultimate computing experience, blending mixed reality, artificial intelligence, and quantum computing. Which of these will dominate the computing world of 2050—or will some new breakthrough emerge that is currently unimagined?

  Anyone who says they can accurately predict the future trajectory of tech is not to be trusted. However, a growth mindset enables you to better anticipate and react to uncertainties. Fear of the unknown can send you in a million directions, and sometimes it just dead-ends with inertia. A leader has to have an idea what to do—to innovate in the face of fear and inertia. We need to be willing to lean into uncertainty, to take risks, and to move quickly when we make mistakes, recognizing failure happens along the way to mastery. Sometimes it feels like a bird learning to fly. You flap around for a while, and then you run around. Learning to fly is not pretty but flying is.

  If you want to see what flapping around looks like, do a search for me and karma. It’s a fall day in Phoenix, Arizona, and I am attending the Grace Hopper celebration of women in computing, the world’s largest gathering of women technologists. Diversity and inclusion is a bedrock strategy in building the culture we need and want, but as a comp
any and as an industry we’ve come up far too short. According to one report, women in the United States held 57 percent of professional occupations in the 2015 workforce, but only 25 percent of professional computing occupations. That’s a real problem, and one that will only get worse with inaction since the number of computer-related jobs is only increasing. As the leader of a company, a husband and the father of two young women, I see this failure to attract and retain women in computing as bad business, and it’s wrong. Which makes what I said that day in Phoenix all the more perplexing, not to mention embarrassing. Early in my appearance there were loud cheers when I said we cannot settle for supply-side excuses. The real issue is how to get more women inside the organization. But near the end of my interview onstage, Dr. Maria Klawe, a computer scientist, president of Harvey Mudd College and a former Microsoft board member, asked me what advice I had for women seeking a pay raise who are not comfortable asking. It’s a great question because we know women leave the industry when they are not properly recognized and rewarded. I only wish my answer had been great. It was not. I paused for a moment and remembered an early president at Microsoft who had told me once that human resource systems are long-term efficient but short-term inefficient. In other words, over time you are rewarded and recognized for stellar work but not always in real time. “It’s not really about asking for the raise but knowing and having faith that the system will actually give you the right raises as you go along,” I responded. “And that might be one of the additional superpowers that women who don’t ask for the raise have, because that’s good karma. It’ll come back. Long-term efficiency solves it.” Dr. Klawe, whom I respect enormously, kindly pushed back. “This is one of the few things I disagree with you on,” eliciting scattered applause from the audience. She used it as a teaching moment, directing her comments to the women in the audience but clearly giving me a lesson I won’t forget. She told the story of a time when she was asked how much pay would be sufficient, and she just said whatever is fair. By not advocating for herself, she didn’t get what was fair. Having learned that lesson the hard way, she encouraged the audience to do their homework and to know what the proper salary is. Afterward, we hugged and left the stage to warm applause. But the damage was done. The criticism, deserved and biting, came swiftly through waves of social media and international radio, TV, and newspaper coverage. My chief of staff smugly read me a tweet capturing the moment, “I hope Satya’s comms person is a woman and is asking for a raise right now.”

  Honestly, I left the conference inspired and energized, but I was mad at myself for blundering such an important chance to communicate my own commitment and Microsoft’s to increasing the number of women we hire at every level of our industry. I was frustrated, but I also was determined to use the incident to demonstrate what a growth mindset looks like under pressure. A few hours later I shot off an email to everyone in the company. I encouraged them to watch the video, and I was quick to point out that I had answered the question completely wrong. “Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it’s deserved, Maria’s advice was the right advice. If you think you deserve a raise, you should just ask.” A few days later, in my regular all-employee Q&A, I apologized, and explained that I had received this advice from my mentors and had followed it. But this advice underestimated exclusion and bias—conscious and unconscious. Any advice that advocates passivity in the face of bias is wrong. Leaders need to act and shape the culture to root out biases and create an environment where everyone can effectively advocate for themselves. I had gone to Phoenix to learn, and I certainly did. But perhaps what taught me more was hearing stories from women I deeply respect about the bias they experienced earlier in their careers: being told to smile more often, being blocked from joining the good old boys’ club, or facing the difficult trade-off between taking time off after having a baby or relentlessly climbing the career ladder—these powerful women who shared the hurt of their past experiences with me. During this time, I also found myself reflecting on the sacrifices my mother made for me and the challenging decision Anu had made to leave her promising career as an architect to care for Zain and our two girls full-time for more than two decades. She made it possible for my career to advance at Microsoft.

  Since my remarks at Grace Hopper, Microsoft has made the commitment to drive real change in this area—linking executive compensation to diversity progress, investing in diversity programs, and sharing data publicly about pay equity for gender, racial, and ethnic minorities. In some ways, I’m glad I messed up in such a public forum because it helped me confront an unconscious bias I didn’t know I had, and it helped me find a new sense of empathy for the great women in my life and at my company.

  This episode led me to reflect on my own experience as an immigrant. Hearing racial slurs toward Indians after moving to America never stung me, I just blew them off—an easy thing to do for a man raised in the majority and with privilege in India. Even when some people in positions of power have remarked that there are too many Asian CEOs in technology, I’ve ignored their ignorance. But as I grow older, and watch a second generation of Indians—my kids and their friends—grow up as minorities in the United States, I cannot help but think about how our experiences differ. It infuriates me to think they will hear and grapple with racial slurs and ignorance.

  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.

  Whether cultural or attained wisdom, we felt that if we worked hard and kept our heads down, eventually good things would happen. One of my colleagues at the time, Sanjay Parthasarathy, became a big influence in my life and career. Although we had not known each other in India, Sanjay did play cricket under my own school captain for South Zone in U-19s. At Microsoft, we hit it off immediately. The combination of cricket and technology meant we never ran out of things to talk about. He told me that I must internalize for myself the belief that the sky is the limit. I must work hard—not to climb the ladder, but to do important work. With benefit of hindsight, I know now that anyone who feels like an outsider can be successful, but it requires both an enlightened management and a dedicated employee. 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.

  Because of my own experience, and by learning from my colleagues, I get now how hard it is to join a company that doesn’t look like you and to live in a community where most of your neighbors don’t look like you. How do you identify role models you can fully relate to? How do you find mentors, coaches, and sponsors who can help you succeed without hiding your true self? At work, the tech industry, including Microsoft, is simply not as diverse as we must become. And outside work, minorities can also feel isolated. King County in Washington state, for example, which encompasses Redmond, Bellevue, and Seattle, is 70 percent white. African Americans comprise under 7 percent and Latinos and Hispanics are nearly 10 percent. To help conne
ct communities of people with like backgrounds and interests, there has been a long tradition inside the company of underrepresented groups organizing themselves into employee resource groups such as Blacks @ Microsoft (BAM) and Women @ Microsoft. In all there are seven major ERGs and forty more specific networks. They host online discussions, networking meetings, provide mentoring and professional development, community outreach, and connect people with a community inside and outside of work. Most importantly, they offer support. During 2016, as our African American colleagues struggled to come to terms with the tragic episodes of violence and innocent lives lost here in the United States, the BAM community was a source of connection and support. Following the Orlando nightclub massacre, the email discussion group for GLEAM, the employee resource group for the LGBTQ community at Microsoft, provided a much-needed safe space for members to air fears and concerns. 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.

  After three years of intensive focus on culture-building we 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.

  But we also saw some trends that were not as encouraging. When asked whether their vice president, or group leader, was prioritizing talent movement and development, the results were worse than they’d been before our culture-building project began. Even the most optimistic workers will become discouraged if they are not being developed. I had set a clear mission and envisioned an empowering culture. Employees and senior leaders were on board, but we had a missing link—middle management.