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Published in May 2023

In the collection from the Harvard Business Review called ”HBR’s 10 Must Reads on Lifelong Learning” from 2021, I found this interesting article that highlights some changes at Microsoft. There’s a lot more in the article which starts with an overview of coaching styles and the GROW model (“Goal”, “Reality”, “Options”, “Will”).

I want to focus on the Microsoft case study, as I thought this is a great example of a tech company that is actually reinventing itself, and everyone can see how the company changes.

Many might remember Microsoft as the maker of Windows and Office. Of course, these two products are still important, but over the past ten or twenty years, the IT landscape has changed a lot. Today, Microsoft is in a very different situation with new challenges. Cloud computing has in some shape or form become a central building block of many IT solutions. Open Source software has been adopted more widely too.

“Nadella quickly realized that Microsoft needed a cultural transformation. To regain its momentum and assert itself as a force in this new landscape, the company had to move away from its entrenched managerial style and instead develop what the Stanford psychologist Carol Dweck has called a growth mindset, in which everybody in the organization was open to constant learning and risk-taking. As Nadella himself aptly put it, the leaders of the company had to shift from being know-it-alls to being ‘learn-it-alls’.”

It’s crucial, that the CEO led this process from the top and changed his own behaviour:

“He asked nondirective questions, demonstrating that his role was to support rather than judge. He encouraged people to be open about their mistakes and to learn from them.”

The new culture and mindset were essential to successfully move towards a “cloud-first strategy”.

“The fundamental economics of cloud computing are based on the premise that customers will pay only for the resources they use […]. With revenue growth now depending more heavily on consumption of Microsoft’s offerings, everyone at the company had to become adept at having conversations in which they could learn what they did not already know—how to serve the unmet needs of their customers. And with the availability of powerful digital tools that provided everyone with real-time data on key metrics, it no longer made sense for managers to spend their time monitoring and controlling employees.”

This change is also about trust. As a result of all the changes, some internal processes could become much more efficient.

Waste of valuable time and resources could be eliminated.

“to make a good impression, a raft of the company’s most valuable people were diverting more than a month of their time to preparing for an internal review”

It’s kind of shocking to realise how unproductive things can become at mostly large companies.

“Although the program was designed for internal use, it has made the organization’s senior leaders more comfortable in conducting unstructured conversations in other contexts, especially during high-stakes client negotiations — and that, in turn, has led to higher revenue and deeper client relationships.”

I like how this new approach has also led to completely unintended benefits.

(Prompt for Craiyon to generate the header image: “Microsoft, illustration of business transformation, continuous listening and learning.” / Style: Art.)