'Hit Refresh': How Satya Nadella helped Microsoft rediscover its soul

BOOK EXTRACT: 'Hit Refresh' by Satya Nadella
Harper Business

Finding the next CEO had been a long journey. Steve [Ballmer] had surprised everyone by announcing in August that he would retire, just after he had led a major reorganization of the company and on the eve of announcing the $7.2 billion deal with the Finnish smartphone manufacturer Nokia.

Throughout the fall, reporters routinely speculated about who would be named as his replacement. Would it be an outsider like Ford Motor Company’s CEO, Alan Mulally? Or the executive of a Microsoft acquisition like Tony Bates of Skype or Stephen Elop of Nokia? Several of us were asked to put our ideas on paper for the board of directors as a sort of audition for the job.


In my memo to the board, I’d drawn on more than twenty years of experience inside the company, but I’d also drawn on something Steve Ballmer, the departing CEO, told me. He encouraged me to be my own man. In other words, don’t try to please Bill Gates or anyone else. “Be bold, be right,” he told me. Bill and Paul Allen founded Microsoft. Bill and Steve built Microsoft. As founder, Bill had famously recruited Steve out of Stanford business school in 1980 to become his first business manager.

Steve, the passionate leader, salesman, and marketer, and Bill the technology visionary whose voracious reading and “think weeks” kept Microsoft ahead of envious competitors—together they formed one of the most iconic business partnerships in history, a pioneer in computing that would make Microsoft the most valuable company on the planet. Not only did they build great products, but they shaped hundreds of executives who today run global businesses everywhere, including me.

They had given me more and more responsibility over the years, and taught me that our software can impact not just the lives of computer hobbyists but entire societies and economies. Despite my devotion to what they had built, Steve didn’t want me to be confused. He was inviting me to throw dogma out the window.

He knew more than anyone that the company had to change, and he selflessly stepped out of his role as CEO to ensure the change happened in a deep way. As a consummate insider, I was being told to start anew, to refresh the browser and load a new page—the next page in Microsoft’s history. And so, my memo to the board called for a “renewal of Microsoft.” It would require embracing more ubiquitous computing and ambient intelligence.

This means humans will interact with experiences that span a multitude of devices and senses. All these experiences will be powered by intelligence in the cloud and also at the edge where data is being generated and interactions with people are taking place.

But this renewal would only happen, I wrote, if we prioritized the organization’s culture and built confidence both inside and outside the company. It would be only too easy to continue to live off our past successes. We had been like kings, albeit now in a threatened kingdom. There were ways to cash-cow this business and drive short-term return, but I believed we could build long-term value by being true to our identity and innovating….
In an intense prep session two days before the announcement Jill and I sparred on how to inspire this disheartened group of brilliant people. In some ways, I was annoyed by what felt like lack of accountability and finger pointing. She stopped me mid-riff with “You’re missing it, they are actually hungry to do more, but things keep getting in their way.”

Job one was to build hope. This was day one of our transformation—I knew it must start from within. A few minutes later, I stood onstage for a photo that would soon go viral. It captured the smiling faces of Bill Gates, Steve Ballmer, and me, the only CEOs in Microsoft’s forty-year history…. When the applause subsided, I wasted no time in calling my colleagues and teammates to action.

“Our industry does not respect tradition. What it respects is innovation. It’s our collective challenge to make Microsoft thrive in a mobile-first and a cloud-first world.” If there was any one theme I wanted to emphasize that day, it was that we must discover what would be lost in the world if Microsoft just disappeared. We had to answer for ourselves, what is the company about? Why do we exist? I told them it was time for us to rediscover our soul— what makes us unique.

(Chapter 3 New Mission, New Momentum: Rediscovering the Soul of Microsoft)