How did Satya Nadella Instill a Growth Mindset at Microsoft?
In our MBA class, we went through the LBS Satya Nadella Growth Mindset case study, and here are some key insights that I derived:
Challenges Nadella faced in taking charge as a CEO of Microsoft:
Before Nadella took charge, Microsoft stock prices were falling. The company was stagnant and failed to compete with other tech firms like Apple and Google. Customer satisfaction was lowering. Stack ranking performance created a toxic environment within the organization. Where employees were playing political games, and it hence killed collaboration and Innovation.
Define Growth Mindset:
Nadel brought a growth mindset into Microsoft. It encouraged team members to shift their ‘Fixed Mindset’ to a ‘Growth Mindset’ to support the Company’s core- Innovation & Creativity.
Growth Mindset = Empathy + Listen & Learn + Live the culture + Sense of belonging + Curiosity + Collaboration.
Why did Nadella seize on the idea of a Growth Mindset?
The biggest lesson he learned from his personal life was empathy due to his child’s illness. He knew that the current Microsoft culture does not offer psychological safety to people, causing Unhealthy competition in the group and lack of collaboration. He was deeply inspired by Dr. Amy Edmondson, who advocated Growth Mindset. He knew that a growth mindset would foster a culture where people will be Empathic, eager to listen and learn. He wanted people to shift from “Know-it-all” to “Learn-it-all.”
The link between mindset and organizational culture:
Organizational mindset set the tone for the company’s culture. Culture helps in building capabilities to create new concepts & implement great ideas. Culture has to be explicit. Microsoft was a PC SW company, but to be a pioneer in AI, Cloud Computing, and Machine Learning, they need to have a culture that can significantly respond to disruption / ever-changing business models.
Steps leadership team took to embed the concept of Growth Mindset:
One thing can never change a Company. It would need a lot of things, big and small, to reinforce the change. They started by removing the performance rating system and implementing the timely reward system. Created a psychologically safe environment where people could learn from their past failures and turn that into learnings. Ensured product managers do field visits to understand customer needs and build strong partnerships, Hosted Hackathons, and asked leaders to find rose petals in a field of shit.
Nadella as a leader:
Nadella became a role model to walk the talk on all these things about growth mindset. A leader who was focused not on the profits but the cultural transformation of the Company.
Ongoing challenges in the cultural transformation:
It’s not easy to incorporate a growth mindset in everyone. Because we humans don’t like change. Cultural transformation is challenging and demands a lot of work, but under Nadela’s leadership, Microsoft is on the right track. They lead in the AI and cloud computing space, and people are happier working in this transformed mindset.
Key Takeaways:
- Build a psychologically safe workplace for people to get creative and Innovate
- Encourage people to have a growth mindset
- Demonstrate real collaboration within teams.
- Organizational Culture is an ever-changing process.
