Microsoft CEO Satya Nadella on creating a culture that fosters ideas

Summary

In this interview, Microsoft CEO Satya Nadella discusses the importance of culture in innovation and growth, reflecting on his personal journey and the company's transformation. He emphasizes empathy as a key driver of innovation and the need for continuous cultural refresh to adapt to new challenges and opportunities.

Takeaways

• 📚 Satya Nadella is the third CEO of Microsoft and has been with the company for over 22 years before taking the position in 2014.
• 💰 Under Nadella's leadership, Microsoft has generated $250 billion in market value, showcasing his ability to transform the company.
• 🔄 The concept of 'hitting refresh' is central to Nadella's vision for Microsoft, emphasizing the need for continuous innovation and cultural adaptation.
• 🌟 Bill Gates acknowledges in the foreword of Nadella's book that Microsoft had fallen behind competitors like Google but praises Nadella's role in turning the company around.
• 🤝 Empathy is highlighted as a critical element of Nadella's leadership style, impacting both his personal and professional life.
• 👶 Nadella's personal journey with his son, who has cerebral palsy, has deeply influenced his perspective on empathy and leadership.
• 💡 Empathy is not just a personal trait but is essential for business innovation, as understanding unmet customer needs drives new ideas.
• 🚀 Microsoft's culture is seen as a tool for success, enabling the company to learn from mistakes and grow, which is vital in the tech industry.
• 📉 Nadella acknowledges Microsoft's challenges in the smartphone era but views them as part of the company's broader journey of innovation and adaptation.
• 🌐 Microsoft's identity as a 'tool maker' is central to its purpose, creating technology that enables others to innovate further.
• 🏆 The success of tech companies like Microsoft brings significant power and responsibility, which must be balanced with the positive impact on society.

Q & A

Who are the three CEOs of Microsoft mentioned in the script?

The three CEOs of Microsoft mentioned in the script are Bill Gates, Steve Ballmer, and Satya Nadella.

How long has Satya Nadella been the CEO of Microsoft?

Satya Nadella has been the CEO of Microsoft for more than three years at the time of the interview.

What is the title of Satya Nadella's book?

The title of Satya Nadella's book is 'Hit Refresh: A Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone'.

What does Bill Gates write in the foreword of Satya Nadella's book?

Bill Gates writes about how Microsoft had fallen behind Google and how the original search team had moved on, highlighting Satya Nadella's role in turning things around.

What is the significance of the culture in a company's success according to Satya Nadella?

According to Satya Nadella, the culture of a company is crucial for its long-term success as it needs to foster growth and enable the company to come up with new ideas and build new capabilities.

What is the role of empathy in business according to Satya Nadella?

Satya Nadella believes that empathy is essential in business as it helps in meeting the unmet and unarticulated needs of customers, which is the source of innovation.

What was the first significant lesson on empathy Satya Nadella learned?

The first significant lesson on empathy Satya Nadella learned was during his interview at Microsoft when he was asked what he would do if a child had fallen on the road. The interviewer emphasized the importance of immediate human response over an algorithmic approach.

How did the birth of Satya Nadella's son impact his perspective on empathy?

The birth of Satya Nadella's son, who has severe cerebral palsy, taught him that empathy is not an innate capability but something that life experiences can teach you if you listen and observe.

What was Microsoft's position in the smartphone era according to the script?

According to the script, Microsoft failed to lead in the smartphone era and barely managed to participate.

What is Microsoft's core purpose and identity according to Satya Nadella?

According to Satya Nadella, Microsoft's core purpose and identity is to create technology so that others can create more technology, essentially being a tool maker.

How does Satya Nadella view the impact of technology companies on society?

Satya Nadella believes that technology companies have a significant footprint and it's important for them to think about the surplus they create around them, ensuring that their innovation benefits society broadly.

Outlines

00:00

🚀 Transformation and Empathy at Microsoft

This paragraph introduces Satya Nadella, the CEO of Microsoft, who has been instrumental in the company's transformation since taking over the role more than three years ago. With a background of 22 years at Microsoft, Nadella has led the company to a $250 billion increase in market value. His new book, 'Hit Refresh,' discusses the personal and professional journey of reshaping the company's culture and vision. The conversation highlights the importance of empathy in business, innovation, and the company's ability to adapt and grow. Nadella shares personal anecdotes that have shaped his perspective on empathy, including a pivotal interview question and the birth of his son with cerebral palsy, which have deeply influenced his leadership approach.

05:02

🌐 Microsoft's Core Purpose and Social Impact

In this paragraph, the discussion shifts to Microsoft's core purpose and identity, emphasizing the company's role as a tool maker enabling others to create more technology. The conversation addresses the company's initial product, the basic interpreter for the Altair, and how this foundational tool-making mindset is more relevant today in a digitally transforming world. Nadella also touches on the broader social impact of Microsoft's technology, from enhancing small business productivity to improving public sector efficiency and educational outcomes. The importance of measuring success beyond financial metrics and considering the societal consequences of technological development is underscored, highlighting the company's commitment to balanced innovation and social contribution.

Keywords

💡CEO

CEO stands for Chief Executive Officer, the highest-ranking executive in a company responsible for making major corporate decisions, managing operations, and acting as the main point of communication between the board of directors and corporate operations. In the video, Satya Nadella is introduced as Microsoft's third CEO, emphasizing his role in the company's transformation.

💡Transformation

Transformation refers to a profound change in form, appearance, or character. In the context of the video, it is about the shift in Microsoft's corporate culture and strategy under Satya Nadella's leadership, aiming to innovate and adapt to the changing tech landscape.

💡Empathy

Empathy is the ability to understand and share the feelings of another. It is highlighted in the video as a core value that Satya Nadella believes is essential for innovation and customer service. His personal experiences, such as his son's condition, have deepened his understanding of empathy.

💡Cerebral Palsy

Cerebral Palsy is a group of neurological disorders that affect movement, coordination, and posture. In the script, it is mentioned that Nadella's son was born with cerebral palsy, which has had a profound impact on Nadella's personal and professional outlook on empathy and leadership.

💡Innovation

Innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay. The video discusses the importance of innovation for Microsoft's continued success, with empathy playing a key role in understanding unmet customer needs.

💡Culture

Corporate culture refers to the values, social interactions, and working environment within a company. The video emphasizes the need for a culture that fosters growth and the ability to refresh, which is essential for Microsoft's long-term success and adaptability.

💡Market Value

Market value is the estimated worth of a company's shares or assets. The video mentions that under Nadella's leadership, Microsoft has generated $250 billion in market value, indicating the financial success of the company's transformation.

💡Book Title: Hit Refresh

The title of Satya Nadella's book, 'Hit Refresh,' symbolizes the need for continuous renewal and adaptation in business. It reflects the theme of the video, which is about the importance of reinventing oneself and one's company to stay relevant.

💡Search Team

In the context of the video, the search team refers to the group within Microsoft that was responsible for developing their search engine technology. The script mentions that the team has moved on, indicating a shift in focus or strategy within the company.

💡Tool Maker

A tool maker is someone who creates tools for others to use. Microsoft is described as a 'tool maker' in the video, emphasizing its role in providing technology that enables others to create more technology, which is central to the company's identity and purpose.

💡Digital Technology

Digital technology refers to an electronic system that generates, stores, and processes data in binary form. The video discusses the pervasive influence of digital technology across various industries and the role of Microsoft in shaping this digital transformation.

Highlights

Satya Nadella became Microsoft's third CEO in 2014 after working there for 22 years.

Nadella has generated $250 billion in market value for Microsoft since becoming CEO.

His new book, 'Hit Refresh', discusses his personal and professional journey transforming Microsoft.

Bill Gates writes in the foreword that under Nadella's leadership, Microsoft has fallen behind Google in search.

Nadella believes culture is crucial for a company's long-term success and the ability to innovate.

He emphasizes the importance of empathy in business, especially for meeting unmet customer needs.

Nadella's first lesson in empathy came during a Microsoft interview question about a child who fell.

The birth of his son with cerebral palsy profoundly shaped Nadella's outlook on life and empathy.

Microsoft's original mission is to create technology that enables others to create more technology.

Nadella believes Microsoft's identity as a tool maker is more important than ever in the digital age.

He acknowledges Microsoft's hits and misses, emphasizing the importance of learning from mistakes.

Nadella sought to refocus employees on Microsoft's core purpose and identity, not just its 'cool factor'.

Microsoft's success is measured by the positive impact it has on businesses, the public sector, and education.

Nadella discusses the scrutiny and responsibility that comes with being a powerful tech company.

He stresses the importance of ensuring the benefits of technological development are broadly shared.

Nadella is the third CEO of Microsoft after Bill Gates and Steve Ballmer.

Transcripts

this company's had three seat hosts

they're all right here this is one two

three there they are Bill Gates

introduced a new CEO Microsoft more than

three years ago his name is Satya

Nadella he's become the company's third

CEO in 2014 after working at Microsoft

for 22 years since then he has generated

250 billion dollars with ABI and market

value from Microsoft he discusses his

personal and professional journey of

transforming the company in his new book

it's called hit refresh a quest to

rediscover of Microsoft soul and imagine

a better future for everyone Bill Gates

writes in the foreword we have fallen

behind Google and I have a fly in our

own studio our original search team has

moved on Satya was part of the group

that came in to turn things around

he was humble forward-looking and

pragmatic we welcome microphone CEO

Satya Nadella to the table welcome and

good morning thank you so much and to

change a culture is not easy how do you

do it and what are you looking to create

you know when a company is successful

one of the things that happens is the

concept that got you started in the

first place the capability that you have

and the culture all get into this

beautiful virtuous Locke and things are

going well then lo and behold you need

to come up with a new concept a new idea

for which you need new capability that's

when the culture has to be at its

premium in other words the culture needs

to enable you to come up with new ideas

build new capability so that's why I

think for companies to be successful

over a long period of time you need more

than a good idea and a good strategy you

need a culture that fosters that growth

and the capacity to refresh all the time

that's correct I mean that the fact that

everything that starts off and because

into a hyper growth ultimately does

taper off the real question is what do

you do when that happens how do you hit

refresh is sort of I think the real

challenge for us as individuals as

companies or us as societies and so you

said one of the things that starts with

you and for you it meant empathy which i

think is such a great concept Jeff

Weiner who you all are together I loved

it I think it's a great bromance between

the two of you both talk about empathy

a lot and I think that that's so

important and you cite in your book two

really strong examples of how your life

was changed by empathy and how it

carries with you today yeah I mean first

of all I think empathy is everything if

you think about even in the business

context for us our job is to meet the

unmet unarticulated needs of customers

that's where innovation comes from

there's no way we could innovate without

having the deeper sense of empathy so

what happened to you the FIR which I

write in the book is the interview my

foot interview at Microsoft the last the

very last question the last interviewer

asked me is what would you do if there

was a child who had fallen on the road I

saw I thought about it for a few seconds

I thought there was some algorithm there

and then I said I'll call 911 so the

interviewer just walks up and leaves and

I thought I'd blown the interview

because he then tells me look when a

child is on the ground and crying you

pick them up and hug them yes that is my

first big lesson on empathy and it

changed your life

absolutely I mean I reflected on it

quite a bit I mean and that's the other

point which is it's not some innate

capability I believe that your lives

experiences will teach you if you listen

and at least in my case that's what

rather it is that interview question the

birth of my son and every day at

Microsoft I learn about building Abdi /

insight to be able to see through others

I write that your son has severe

cerebral palsy that's right yeah he was

born here 21 years ago with you in

neutral as fixation which led to

cerebral palsy and his birth in the

initial phase for us at least for me was

more about like why did this happen to

me but it was only through watching my

wife for whom much it came much more

naturally to care for him that I realize

nothing happened to me something

happened to him and what my job was as a

father and that realization perhaps more

than anything else shaped my outlook in

the years to come you know it's

interesting because Microsoft you think

about Microsoft being a leader in

innovation and you write in the book

that in the smartphone era that

Microsoft had failed to lead and barely

managed to participate and then you say

see the sea and CEO is for culture how

does culture change innovation every

to me for a company that is successful

and to be continued to be successful in

something like high-tech for a long time

you're gonna have your hits and misses

if I look back you know 43 years ago

when the company got started - here we

are

competing with a whole set of new

competitors at every given point in time

the question is have you caught enough

waves even if your missed one or two

that's the real question and that's

where the culture I think helps if you

have a culture that allows you to learn

from your mistakes and still grow then

you are then we find right classes I

know it's very you talk about when you

wanted to get to your employees you said

that if the morale was low that the

people felt they had lost their cool

factor you have a Pacific call at 6:02

so you can talk to everybody and you

want them to know what this is what

we're gonna do to me it is not as much

about how we'd lost a cool factor or Rou

any of the myths misses we had it was

more about being in touch with our core

sense of purpose and identity if you

look at it right Microsoft's different

from a lot of other companies in the

Suns

our first product was the basic

interpreter for the Altair that's what

Paul and Bill created and that what it

Telegraph's for me is that we create

technology so that others can create

more technology that's who we are we're

a tool maker and in a world right today

where every walk of life and every

industry is being shaped by digital

technology our original thesis is even

more important and I wanted to be in

touch with it technology is so powerful

but also the success of tech companies

has made them very powerful and there is

much conversation today about putting

them on a very very strict scrutiny are

you worried about that I think that any

company that has done well has a

significant footprint especially

multinational II I think it's super

important for us to think about the

surplus we create around us I think when

I think about Microsoft one of the

things that gives me the greatest pride

whether I'm in New York area or I'm in

any part of the world

is the small businesses that are more

productive the large businesses that

have become more competitive the

public sector that's more efficient the

educational outcomes that are better

because of the work we do unless and

until we measure ourselves with the

outcomes outside of our own balance

sheet I think there's no long-term

success in business so it's incumbent on

you to take a look at what the

consequences are to technological

development absolutely and especially

how broad spread is the success around

you because of your innovation without

that I think the equation is not

balanced well third CEO Bill Gates Steve

Ballmer and now you congratulations

thank you so much bill patty Nadella

thank you so much and hit refresh is on

sale today