A few days ago, Microsoft announced its new CEO, Satya Nadella. The changes don’t just stop there, though. Bill Gates will be stepping down as chairman of the board and taking on a new role as “technology adviser”.
In the past, there has been no shortage of criticism of Microsoft’s outgoing CEO, Steve Ballmer. He famously dismissed the Internet, thought smart phones were a passing fad launched mobile devices that no one seemed to buy.
But these are all symptoms of a greater issue, and they are faced by many companies large and small.
This is the real underlying issue that Microsoft faces, and Nadella’s job isn’t so much to establish a whiz bang strategy, but to rally the troops around a few core cultural changes necessary for the company to return to growth.
The lessons learned by Microsoft are applicable to many businesses, and so are the challenges that its new CEO must now face; these include changing a culture built around the following:
No matter how complex the details are, most agree that Nadella is going to pursue a strategy oriented around software, hardware and services. Historically, software has been the cash cow, and sales people and product engineers haven’t been rewarded for working on things that might take revenue away from those income streams.
At the same time, Nadella needs to create a set of processes where people feel safe for competing with one another and are rewarded for doing so—all while maintaining a unified sends of community, lest Microsoft turn into the wild west where everyone is out for him or herself.
In the coming weeks and months, there is no doubt that Nadella will be making announcements on this product or that service, referring to a longer-term strategy in which those moves make sense. For those interested in the future of this tech giant—or how lessons learned might be applicable to their own businesses—it might be more interesting to look behind the scenes and try to discern how those announcements will be supported by the cultural, organizational and motivational systems necessary to make them successful.
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