Microsoft’s New CEO:  Asking the Right Questions

By Shlomo  Maital       

         Nadella

Satya Nadella

  Microsoft has a new CEO, to replace veteran CEO Steve Ballmer.  He is Satya Nadella, 47 years of age, born in India, and he has been on the job for 17 days. He’s been with Microsoft for 22 years; previously he worked for Sun Microsystems. He’s a computer engineer. 

   Nadella was interviewed by the New York Times’ Adam Bryant (Feb. 21).  In the past, Microsoft has never missed an opportunity to miss an opportunity.  MS, Gates and Ballmer missed the Internet, smartphones, you name it, they missed it.  Only flexibility and alacrity, the ability to recover, kept Microsoft alive.  Gates was able to mobilize his forces, tell them up front we missed this one, then engage them in catching up. Microsoft is great at catching its foes from behind…usually.

    Nadella’s interview shows he understands what the key questions facing Microsoft are.   And by the way, any large organization, competing in global markets.  Here are some his observations. They are right on the mark. 

      “We (MS) have operated as if we had the formula figured out, and it was all about optimizing. ..Now it is about discovering the new formula.   [What he means here is, MS was great at operational discipline, ‘optimizing’, but now it needs some radical innovation, ‘the new formula’.]  So the question is, how do we take the intellectual capital of the 130,000 people and innovate, where none of the category definitions of the past will matter?   Any organizational structure you have today is irrelevant because no competition or innovation is going to respect those boundaries.”

      Take note, organizational experts.  Don’t waste your time on your company’s organizational structure.  It is irrelevant.  You are being attacked by innovative startups that don’t even have one.

       “Everything now is going to be much more compressed in terms of both cycle times and response times.”    MS is a huge elephant. It has to learn to dance, in Lou Gerstner’s phrase, because its competitors salsa, rather than waltz.

      “You have to be able to sense those early indicators of success, and the leadership has to really lean in and not let things die on the vine.  When you have a $70 b. business something that’s $1 million can feel irrelevant. But that $1 m. business might be the most relevant thing we are doing.”

      He gets it!  MS has ignored important innovations in the past, because they were too tiny to merit attention or managerial time.  But they were the disruptive innovations that changed the world. 

     “What people have to own is an innovation agenda, and everything is shared in terms of the implementation.”

      “One of the things that drives me crazy is …”this is how we used to do it.”  Or….this is how we do it”.   Both are dangerous traps.  The question is: how do you take all of that valuable experience and apply it to the current context and raise standards.”

        Those indeed are the issues, Satya.  Good luck to you.  Now let’s see if you can deliver.   You don’t have a whole lot of time.