The David Rubenstein Show: Satya Nadella

Summary

Satya Nadella discusses his journey to becoming Microsoft CEO after Bill Gates and Steve Ballmer. He emphasizes the importance of empathy, learned from raising a son with disabilities and a daughter with learning challenges. Nadella transformed Microsoft's culture to be more open and made cloud computing a priority. He acquired LinkedIn to connect professionals. Nadella aims to improve gender diversity at Microsoft but admits he misstepped by giving a poor answer about women's pay. He is energized by Microsoft's sense of purpose and thinks he will enjoy being CEO for many more years.

Takeaways

• 😃 Satya Nadella succeeded Bill Gates and Steve Ballmer as Microsoft CEO. They told him to be himself, not try to emulate them.
• 😊 Nadella's father wanted him to focus on studies, not just play cricket. He pushed Nadella to pursue engineering.
• 🤓 Nadella got his computer science degree in India then his MBA in the U.S. while working at Sun Microsystems.
• 😞 Nadella's son was born with cerebral palsy. It taught him empathy and to see life through his son's eyes.
• 😢 Nadella's younger daughter has learning disabilities. He and his wife built a community to support children with disabilities.
• 🤔 Nadella changed Microsoft's proprietary culture to be more open and cooperative with competitors.
• 😀 Nadella focused on mobile and the cloud, not just Windows and Office.
• 👍 LinkedIn acquisition integrates professional networking with Microsoft's Pro cloud and devices.
• 🙁 Nadella initially misspoke about women's pay, but learned from it. He ties exec pay to progress on gender equity.
• 😊 Nadella aims to increase women in tech roles from 27% to higher. He's optimistic about leading Microsoft.

Q & A

What advice did Bill Gates and Steve Ballmer give Satya about succeeding them as Microsoft CEO?

They told Satya not to try to be like them, but rather to be his own person and lead in his own way.

How has having a son with cerebral palsy and a daughter with learning disabilities impacted Satya's leadership approach?

It has made Satya more empathetic and focused on understanding people's needs. He believes empathy is key for innovation and meeting customer needs.

Why did Microsoft fall behind Amazon in cloud computing at first?

Microsoft was very successful with its profitable server business and didn't see the need to shift to the lower margin cloud computing business, while Amazon was able to see the long-term potential.

How did Satya change Microsoft's historically proprietary culture?

He approached competitors with a less zero-sum mentality, aiming for market expansion through strategic partnerships.

What is the vision behind the LinkedIn acquisition?

To combine LinkedIn's professional network with Microsoft's professional cloud and devices to increase productivity.

What happened after Satya made controversial comments about equal pay?

He listened and learned from backlash from successful women at Microsoft, gaining key insights on making tech companies welcoming for women.

What is Microsoft doing to improve gender diversity in tech roles?

Setting representation targets, tying executive compensation to diversity goals, and pushing continuous improvement.

How long does Satya plan to remain Microsoft CEO?

As long as he feels a sense of purpose and it remains fun and rewarding day-to-day.

How did Satya's father influence his ambitions growing up?

His father pushed him to expand his limited ambitions and pursue computer science engineering.

What first got Satya interested in joining the Bing team?

Seeing the parking lot full of people working late, signalling passion and drive.

Outlines

00:00

😊 Nadella's early life and education in India

This paragraph describes Nadella's early life in India. It talks about him being born in Hyderabad, his love for cricket, and how his father encouraged him to pursue engineering instead of economics or political science. Nadella switched from electrical engineering to computer science and went to the University of Wisconsin-Milwaukee for graduate school.

05:02

😷 Nadella's move to the US and early tech career

This paragraph discusses Nadella's move to the US for graduate school and his early tech career. It mentions how the Milwaukee winter cured his smoking habit. He got a job at Sun Microsystems as a software developer after graduating. He was then recruited to Microsoft in 1992, though he had also considered going to business school.

10:03

😊 How having a disabled child changed Nadella's outlook

This paragraph covers how the birth of Nadella's disabled son Zane changed his perspective on life. Though initially questioning "why me", watching his wife's dedication to their son taught him empathy. Nadella says this empathy is key for a CEO to understand customer needs. Their daughter also has learning disabilities, but their experience with Zane prepared them to handle it.

15:05

😐 Gates and Ballmer's advice to Nadella as new CEO

This section details the advice Nadella received from previous Microsoft CEOs Gates and Ballmer when he assumed the role. Their message was not to try emulating them, but to be himself. Ballmer challenged Nadella to take on the troubled Bing division, which he accepted despite having just been promoted to lead the successful Business Solutions group.

20:06

👍 How Nadella changed Microsoft's 'proprietary' culture

As CEO, Nadella worked to change Microsoft's historically proprietary culture to be more open and collaborative. He focused on how partnerships could expand the market rather than being zero-sum competitions. This built on lessons from his early Microsoft days about bringing Windows and Office together with other platforms.

Keywords

💡leadership

The interviewer asks Nadella to define leadership and what makes someone a good leader. Nadella talks about the advice he got from Bill Gates and Steve Ballmer to not try to emulate them but to be himself as a leader. This shows that effective leadership requires authenticity and self-awareness.

💡empathy

Nadella emphasizes how the challenges in his personal life, especially raising a disabled child, taught him empathy. He argues empathy is key for a CEO to understand customer needs and drive innovation. He aims to cultivate more empathy in himself and his company.

💡cloud computing

The interviewer asks why Microsoft fell behind Amazon in cloud computing. Nadella explains how business success can make companies complacent and unable to adapt to market changes. Microsoft was too focused on its profitable server business to capitalize on the rise of cloud computing.

💡culture change

As a long-time Microsoft insider, Nadella aimed to change the company's insular, proprietary culture when he became CEO. He focused on more openness and willingness to partner with other companies to provide better products for heterogeneous customers.

💡mobile first

Nadella says he realized Microsoft needs to thrive in a mobile first, cloud first world. This represents the technological shift from desktop to mobile computing, as well as the rise of cloud-based services.

💡LinkedIn

Nadella led Microsoft's $26 billion acquisition of LinkedIn, the professional social network. He aims to integrate LinkedIn's professional connections and content with Microsoft's suite of productivity tools to drive greater business efficiencies.

💡gender diversity

After a public gaffe, Nadella learned more about the need to promote equal opportunity and pay for women. He admits Microsoft has much progress left to achieve gender diversity, but has tied executive pay to measurable improvements.

💡cricket

Nadella discusses his early passion for cricket and how his talent limitations made him realize he should focus more on his studies, leading his father to push him out of his provincial comfort zone.

💡smoking

In an amusing anecdote, Nadella credits the cold Milwaukee winter for curing his smoking habit developed in college in India, showing his adaptability.

💡sense of purpose

When asked how long he wants to remain Microsoft CEO, Nadella says he feels a sense of purpose that energizes him to lead the company into the future, not feeling it's fully up to him when he will step down.

Highlights

Don't try to be like the previous Microsoft CEOs, just be yourself

Got inspiration to lead the Bing team from seeing their commitment and hard work

Having an empathetic mindset is key for understanding customer needs and driving innovation

Life experiences with disabled children taught me empathy and made me a better leader

To meet unarticulated customer needs, you have to deeply listen and understand

The challenge in tech is seeing major trends early and having the courage to change

I wanted to make Microsoft thrive in a mobile-first, cloud-first world

Let's work together with competitors where it benefits customers

LinkedIn acquisition brings together professional network and content

Made mistakes answering question on pay equity without proper context

A CEO's job is ensuring everyone can do their best work and serve customers

Tying executive compensation to numerical gender diversity progress

Improved women's representation but still have a long way to go

Feel a tremendous sense of purpose which motivates me

It's a privilege to lead Microsoft every day

Transcripts

[Music]

you've now had to follow Bill Gates and

Steve Ballmer to legendary figures hey

clear message boards dude try to be like

us Steve say if you do this well we'll

be happy look if you do a good job maybe

you'll have an another job if not you

want the result of having empathy made

you a better CEO my pursuit is is there

growing sense of empathy for people

around you get a standing ovation for

what you've done you know I get a lot of

people to ask you me hey look go come

home and fix my computer would you fix

your time please well people wouldn't

recognize me if my tie was fixable just

leave it this way all right I don't

consider myself a journalist and nobody

else would consider myself a journalist

I began to take on the life of being an

interviewer even though I have a day job

of running a private equity firm

how do you define leadership what is it

that makes somebody tick you've now had

to follow Bill Gates and Steve Ballmer

to legendary figures did you feel at

that time that you're really ready for

the job following those legends or were

you saying I can't do a better job than

they did the best advice I got from both

bill and Steve I think helped me a lot

because that clear message was don't try

to be like us don't even bother to sort

of say oh I'm succeeding these people

just be your own in fact I remember very

distinctly even during the interview

process this is true for the board was

conducting they asked me hey do you want

to be the CEO and I said only if you

want me to be the CEO and the feedback I

got was well but people who want to be

CEOs are like I want to be CEO

I said look that's not me and I

remembered went on going and talking to

Steve and he says yeah just be yourself

it's too late to change since you've

been the CEO three and a half years the

stock is up about I guess it's about a

hundred and twenty percent when you go

to the your annual shareholder meetings

I'd you get a standing ovation for what

you've done there's no I get a lot of

people to asking me hey look come home

and fix my computer okay you are a

native of India

what part of India I was born in

Hyderabad which is in the central part

of India and so growing up your parents

doted on you I assume yeah they did and

they told you you were gonna be prime

minister or something important in the

country what did they want you to be

they just wanted me to stop playing

cricket and take my studies a little

more seriously now you were an avid

cricket player yes that is correct I was

in love with it yeah and when did you

realize you weren't going to be a

professional cricket well it's pretty

soon quickly I realized that at best I

would pay you know you know what is

considered perhaps first-class cricket

in India but I was not going to go much

further than that but you know then I

that's where my dad in fact I remember

one of the big decisions the

changed my life was you know my entire

outlook was so provincial when I look

back at it Richard hey I want to stay in

Hyderabad maybe study economics and

political science and work for a bank

that was about the extent of my ambition

and he looks at me he says what are you

doing you got to get out of this place

and so he pushed me out to get to an

engineering school and that pretty much

of course you know defined the

trajectory after his father was a member

of the the senior civil service which

was an important position I guess in D&D

is that right yeah my dad was a very

different guy than me in terms of let me

say his academic promise so it is always

humerus which is you look at my report

cards and he says oh I couldn't I don't

understand how anybody can have these

kind of marks and but the nice thing

about it was he would say it in such

endearing ways that he never made me

feel bad I mean the marks weren't high

enough or weren't not high enough they

weren't high enough yeah the guy had

never met an exam he didn't ace as he

would say and so he was a he father it

was astounding to me that he would have

a son who couldn't a is an exam now your

father's still alive yes he must be very

proud of what you've achieved not enough

so you went to college in India and then

you decided to get a graduate school in

the United States yeah where did you go

I went to university Wisconsin in

Milwaukee for my computer that's when I

switched from electrical engineering to

computer science but when you're in

India and University of

wisconsin-milwaukee can't be that well

not in India so how did you happen to

wind up there

I've never been to Western Bombay quite

frankly and then I showed up in

Milwaukee did you have a winter coat or

what that was my first very valued

possession in life I've been to code

which is very important unfortunately

I'd picked up this bad habit of smoking

in India in college and the one nice

thing about going to school in Milwaukee

is you as you're a smoker you have to go

out in the winter and smoke and that one

winter in Milwaukee cured me of my

smoking habit so you've got a job after

you graduated at Sun Microsystems and

what was your job there I was a software

developer okay and then you got

recruited to go to another company

called

Microsoft and that was in 1992 that's

right so but you also had applied to go

the University of Chicago School of

Business so how did you decide to do one

or the other you know frankly David I I

was very committed to saying oh I want

to go to the business school maybe who

knows maybe even go to Wall Street

aha that's what sort of my the highest

calling of mankind says David Rubenstein

and I thought wow maybe that's what I

should do and then somewhere along the

lines I started talking to people and I

said hey why would you do that you were

in tech and you should really come back

it was it's an amazing time because

Windows NT which eventually became a

server business and what have you I was

just starting out and and I subsequently

went and did some combination of

part-time and other courses and I

actually finished my MBA which I find

stunning in mother you were commuting in

other words you were working and then on

weekends you're commuting universe

Chicago and that must have taken a lot

of energy to do both it was crazy

so you're beginning your ascent up but

you're dealing with some personal issues

your first child was born with cerebral

palsy he is now 21 years old so how did

you realize that was going to change her

life and how have you dealt with that

issue even I was I was 29 years old when

Zane son was born and if you had even

asked me maybe even an hour before he

was born what was going through my head

it was all about always the nurse are

you going to be ready what's gonna

happen to our weekends now we have a son

and when will our new my wife get back

to a job and so on but obviously

everything changed that night he was

born because of an undetected in utero

distress as fixation with severe brain

damage and that led to cerebral palsy in

he's quadriplegic now the first I would

say David maybe even two years or more

even I was more about like why did this

happen to me why what happened to us and

all of these plans that I had are now

all been thrown up in the air and

changed whereas on who my wife what came

naturally to her as a mother was she

said okay I'm not going back to my job

I'm gonna really care for my son drive

him around for the you know therapy

after therapy and I watched that without

schooling me

I got schooled that nothing happened to

me what happened was to my son and that

it was time for me to understand that

realize that see life through his eyes

and then do my duty as a father that to

me perhaps you know didn't come in one

moment it's something that I think took

time but as I figured it out it changed

me both his obviously apparent but also

Who I am today and how I approach

everything now your wife was trained as

an architect that's right and she's

given up doing that for a while that's

right now you have two daughters one of

your daughters has severe learning

disabilities as well and how did that

affect you and your wife in fact one of

the things that happen because of our

son was we built up in a tremendous

community of people whether it was the

therapists or other parents which you

know of children with disabilities and

so we were involved in that community by

the time our youngest daughter came into

our lives I must say we had the the

richness of this community to support us

and it talked when we recognized very

early on an unknown eye and on who in

particular was very quick to realize

that she will need additional help and

so we found this school actually in

Vancouver BC which was all around

neuroplasticity the idea was to you can

train your brain to learn so instead of

compensating and so we decided that you

know what we're gonna move the family to

Vancouver Zayn was gonna stay with me in

Seattle my daughters and my wife would

want to live in Vancouver we were going

to

mute again no way weekends but the thing

that that all quite honestly that is

where it came all naturally to us

because in some sense Zayn had taught us

what it takes to give you know you know

people with disabilities the best shot

and so it you know it's something that

we took on and your son lives with you

now yes and one of the qualities that

you say you got from all this was

empathy and that the result of having

empathy made you a better CEO and a

better person is that fair yeah in fact

when I look at empathy and most people

think empathy is just something that you

reserved you know for your life and your

family and your friends or what have you

but the reality is I think it's an

existential priority for a business

because if you look at it like what is

our business our business is to meet

unmet unarticulated needs of customers

there is no way our innovation to meet

unmet unarticulated needs is gonna come

about if we don't listen not just listen

to the words but God go and go deep to

understand what the needs are behind it

so I think empathise quarter innovation

and life's experience if you listen and

you learn from teaches you I mean I

wouldn't claim as I've sort of even

talked about it with any innate

capability of empathy that I was born

with if anything its life that has

taught me and if anything my pursuit is

every year is there growing sense of

empathy for people around me

Steve say if you do this well we'll be

happy if you don't do it well you might

not get another job one of the things

that it's amazing a both bill and Steve

is their candor ha ha ha it's not like

this sugarcoat anything they're very

very honest about most things in life or

everything in life and there was a baby

look if you do a good job maybe you will

have an another job if not you want

you're rising up in Microsoft you're

running the Business Solutions division

one point but then they say to you we'd

like you to run the search business

called Bing and did you say you can't

compete against Google I don't want to

do that or did you say no I'll happy to

do that you know it is I had just been

promoted to lead our business solutions

team and I mean I was I was loving that

job and something that I'd aspired to do

and and Steve comes around and he says

hey you know what I have an idea for you

I think you should go run this group

that's got high attrition and we have a

very tough task I had and I don't know

whether it's a good career move but I

need help and you know think wisely and

choose and I was like wow this is an

interesting choice in front of me and I

remember very distinctly you know going

that night to the building in which the

Bing team in our search team was housed

and it was what maybe nine o'clock or so

and the parking lot was for people who

are in I said wow what's what's the deal

here I mean these people are like

working ah and inspired and her and so I

said well I gotta join this team I got

it like the fight that they showed cause

me did not take the easy path and get in

okay well the Steve's say if you do this

well we'll be happy if you don't do it

well you might not get another job

that's correct

you know Steve was one of the things

that it's amazing a both bill and Steve

is their candor ah ha ha it's not like

they sugarcoat anything they're very

very honest about most things in life or

everything in life and there was a

really look if you do a good job maybe

you will have an another job if not you

won't so you did a pretty good job and

then they came along and asked you to

run another business which was not that

competitive at the time and that was

your cloud computing business how did it

happen that Amazon which was not a

computer company more or less

became a giant in cloud and Microsoft

right nearby wasn't a giant there the

interesting thing is what happens when a

company becomes successful is this

beautiful were Chua cycle that gets

created between your concept or product

your capability and your culture right

you really have all these three things

fall into gear and they're working super

well but then what happens is the

concept that made you successful runs

are a gas it's not growing anymore you

now need new capability and in order to

have that new capability you need a

culture that allows you to grow that new

capability right we our server business

was growing strong double digits it was

a high margin business and you look

around you know on the other side of the

lake here is a very low margin business

called the cloud and people were looking

at and say why would we do that

when we have such an amazing

fast-growing high margin business and

that I think is the challenge and so to

be able to see these secular trends long

before they become conventional wisdom

change your business model change your

technology and change the product is the

challenge of business you know in tech

it's unforgiving but quite frankly now

that tech is part of every business I

think all of us have to deal with it so

you get to be the CEO of this company

you're following two legendary figures

how do you go to them and say by the way

a lot of things you did I don't want to

do anymore I'm gonna change things I was

a consummate insider right I spent 25

years 22 years or so and became CEO

growing up in the company that bill and

Steve built I understood like the back

of my palm all the things we got right

and all the things we got wrong and I

had a point of view on what I wanted to

do if I was going to become CEO we now

need to make Microsoft thrive in a

mobile first in a cloud first world it

was not about trying to criticize our

past or praise the past it was about

what do we do in the future

one of the things you

try to do and change the culture was to

change what was known as a very

proprietary culture at Microsoft

Microsoft said this is the way we do

things we don't want to cooperate with

other firms necessarily competitors or

other kinds of firms how did you change

that culture I said look let me not view

things as zero-sum if anything let me

approach even who are our traditional

competitors and say well customers are

heterogeneous they use some of what we

do and some of what you do let's figure

out a way to combine forces where its

market expansive and it satisfies

customers so at least that's how I've

approached it and it's a lesson I

learned in my early days of Microsoft

historically Windows and Office were

your two cash cows they are still the

biggest source of profit absolutely so

after those two and you suspect there

will be major source of profit for a

long time absolutely but after that you

have other things you spent 26 billion

dollars biggest acquisition ever from

Microsoft to buy LinkedIn what does

LinkedIn have to do with Microsoft if

you look at it we have a billion users

of Windows and Office or Microsoft 365

and what is the common thread they're

they're all professionals they're all

people who are trying to get things done

so we have the professional cloud and

the professional devices in the world

and the vision was to combine that with

the professional network of LinkedIn in

fact if you look at some of the

integrations that we have since launched

you can be an Outlook you can get an

email I can get an email from David

Rubenstein I can go look up your

LinkedIn profile which I hope you have

okay one today but yes and and then sort

of look up all of the commutable

connections we may have so than idea

that the professional network and the

professional content can be brought

together I think ultimately it can be a

big driver of productivity so that is

one but what are the other pieces which

has been a real game-changer for us as

LinkedIn is the way people do business

to business sales and if you want to be

able to reach customers and sell this

integration is going to be Game Change

same thing with talent management so I

think we have lots of synergies between

the products that are now coming true

you gave a statement about women's pay I

just gave such a absolute nonsensical

answer when I talk to women who are very

close to me facing your very successful

women that are key to Microsoft and

heard even their own personal

experiences that's what struck me did

you hear from your wife about that

absolutely my mom and my wife

almost everything you've done since

you've been CEO and last three and a

half years has worked perfectly

yeah the stock goes up the market values

up everybody likes you the only thing

that I could find that anybody

criticized you for was you gave a

statement about women's pay at one point

and you Crick correctly I think changed

your position the next day but can you

explain what happened absolutely

I was asked about you know pay equity in

fact I you know I just gave such a

absolute nonsensical answer which Maria

Khloe who was interviewing me was kind

enough to correct me while I was on

stage itself because I was answering a

question literally using some past I

mean my own personal experience without

understanding the broader context the

depth of that question which is what is

a person like me who is a CEO of a

company doing to make sure that one

women can fully participate in our

companies and in our economies there is

equal pay for equal work and more

importantly there is equal opportunity

for equal work that was the real

question there is not about like okay

what worked for you and what career

advice do you have for me it was a great

learning moment for me it's something

that I've obviously taken back in fact

when I talk to women who are very close

to me work you know very senior very

successful women that are key to

Microsoft and heard even their own

personal experiences that's when it

struck me how you know the job of a CEO

in particular is to make sure that

everyone however it's gender diversity

or ethnic diversity can first come into

the company do their best work so that

we can then serve our customers so

that's a realization which I thought I

had quite frankly but I was I'm glad I

messed up so publicly because I think I

internalized the lessons from it did you

hear from your wife about that

absolutely from at that time my mom was

alive for my mom and my wife my wife had

to give up our carrier

of a Sun but in Mike even in my mom's

case she struggled she in fact now I

realized it a lot more than I even did

obviously growing up was the trade-off

she had to make where the the system

that she was working in did not support

her re-entry into the workforce after

you know she had both my myself and into

my system so you have about 125,000

employees something like that so what

percentage are male what percentage are

female and how many senior women do you

have technology's not a place where a

lot of women have risen to the top yet

relatively speaking in fact one of the

things that we have made some good

progress on is on the women's

representation which we have a long way

to go I mean you got remember that in

tech we have a particularly tougher

issue because of Technology disparity in

terms of gender diversity but let's

start with the progress which is in the

last year we made and we've gone from

around you know you improved to twenty

seven point seven percent of women

coming into the organization which is

around two points more than historical

and in the technology side where we've

improved by four points so that's I

would say movement in the right

direction but not enough obviously one

of the other things our board also did

was to change the compensation system

for me as well as my direct reports to

say look numeric progress besides all

the work that we may do programs we may

have and the talk let's even tie

compensation of the senior-most people

including the CEO to real numerical

progress and so we're doing everything

but quite frankly it's going to take

continuous vigilance continuous push and

it's a top-of-mind issue for all of us

you've only been doing this three and a

half years which is relatively short

tenure for Microsoft CEOs how many more

years would you like to do this uh-huh

you know I have been at Microsoft now

for 25 years and I think the thing that

I feel

that gives me that source of energy is

really that sense of purpose of the

company because they're quite honestly

it's not I don't know how I'll market

it's probably not even up to me as to

how many years I will be there and I

think it's gonna be fun

for me to do it each day and it's a real

privilege to do it each day