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Leadership During
Microsoft's Turnaround
Rick Miller Former Contributor
Entrepreneurs
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I’m a turnaround specialist who writes about the power in
people.

CEO Satya Nadellaand his team have achieved what many

believed to be impossible. In less than five years since he took
the helm, he and his employees at Microsoft have completely ADVERTISEMENT

reversed the company’s trajectory and built a company that

today is more valuable than Apple. Microsoft’s turnaround was
beautifully executed.

How did they do it and what could you learn from their
approach?

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In my view, by focusing on two critical constituencies—

customers and employees—Microsoft also took care of a third
critical constituency—their shareowners.

Customers

When Nadella took over, customers were unhappy primarily

with Microsoft’s products. Windows 8 was a disaster, the iPhone
and Android were beating Windows phones badly in the market,
and Bing was not viewed as a viable alternative to Google for
searches.

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Nadella and his team made several strategic product shifts to

right the ship and regain lost market share.

First, they improved the quality of their current product offers

(Windows).

Second, Microsoft committed to a partnering strategy to expand

the market for their current products, including offering
Microsoft Outlook on Apple (iPhone and iPad) and Android
devices.

Next, they built new products to compete in their markets,

introducing their first laptop ever (Microsoft Surface Book).

Finally, they entered entirely new strategic markets quickly via

acquisitions, including the $26 billion purchase of LinkedIn.

Employees

When Nadella took the reins, he inherited a dis-spirited

employee base that needed his attention.
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Nadella and his team made several strategic shifts with the
company’s human capital that others should look at as a play-
book for unlocking innovation.

Values

His specific leadership style set the tone from the top. It
emphasizes continuous learning and risk-taking. But he also
doubled down on reinforcing the company’s values:

Innovation– encourage new ideas from everyone

Diversity and inclusion – maximize every person’s

contribution with diversity in all areas

Corporate social responsibility –be transparent, and

respectful of human rights

Philanthropies – empower people by investing

technology, money, employee talent, and the company’s
voice in programs that promote digital inclusion

Environment – lead the way in sustainability and use our

technologies to minimize the impact of our operations
and products

Trustworthy computing – deliver secure, private, and

reliable computing experiences based on sound business
practices.

Leadership

Nadella also clearly communicated his expectation that every

employee played a leadership role at Microsoft. But there was a
problem. His early investigation showed the company had over
100 different attributes tied to the word “leadership” depending
on where you sat in the company. So he enlisted a diverse team
of leaders to simplify the definition. Here it is:

Create clarity:

Synthesize the complex

Define a course of action

Ensure shared understanding

Generate energy:

Inspire optimism, creativity, and growth

Create an environment where everyone does their best

work

Build organizations that are stronger tomorrow than

today

Deliver success:

Drive innovation that people love

Be boundary-less in seeking solutions

Tenaciously pursue the right outcomes

Engagement

Nadella is credited for having “made Microsoft cool again.” How

did he do this? Not by focusing employees on “being cool,” but
rather on “making others cool.” By shifting the focus outward,
he was able to create what I call viral engagement. It worked.

In addition, Nadella built a new culture at Microsoft by

encouraging a growth mindset, or the understanding that
abilities and intelligence can be developed. In other words, he
encouraged a learn-it-all mindset rather than a know-it-all
mindset. This made it much easier for Chiefs at every level to
emerge.

With intense focus on both customers and employees, another

beneficiary of the team’s work are its shareowners. Today, in
2018, Microsoft's stock price has almost tripled from when
Nadella first took over.

What could your company learn from the lessons at Microsoft?

Follow me on Twitter or LinkedIn. Check out my website.

Rick Miller Follow

I’m an unconventional turnaround specialist and a servant leader. During my 30+

year career I’ve led teams that consistently tripled the growth rates of million-
and… Read More

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