How a book inspired Satya Nadella to transform Microsoft's culture, its bottom line

It’s a story he has shared before: A young Satya Nadella’s father had hung a poster of Karl Marx, while his mother put up one of goddess Lakshmi. Nadella, on the other hand, hung a cricket poster. “There was some strange mix of intellectual curiosity in the house [growing up] — a push to make up your own mind and do your own thing,” the Microsoft CEO said recently at The Economic Club of Washington event in the US. And it was this ability to forge his own path that worked for Nadella, who is credited with turning around Microsoft’s fortunes.

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Since Nadella took the helm, the market capitalisation of Microsoft has increased exponentially. Reflecting on the turnaround, he said, “When you are pushing yourself through this uncomfortable process of transformation, you need to have that browser logic, that smartness to sort of say, ‘OK, so what is the stuff that needs changing and what should remain?’ Because if you change everything all the time, you’re not going to make much progress.”



A learn-it-all
According to Nadella, when a company is successful, the product that makes it successful, the capability around that product and the culture get locked together. This makes it difficult to adopt new products or concepts. “It’s one of the classic issues with all of us in business,” he said. “When you have a business that’s growing super well, it’s got great gross margins, you don’t look around and say, ‘Oh, here is another business that’s got crummy growth margins and that’s what we should do next’. [But] That’s when culture will matter, because the culture cannot fight the creation of that new concept.”

Nadella said he worked to transform Microsoft’s culture. He was inspired by a book he had read – Mindset : The New Psychology of Success by Carol Dweck — a few years prior to becoming the CEO. “The simple concept in that book was it’s better to be a learn-it-all even if the know-it-all has more innate capability, because the learn-it-all ultimately will do better. And I said: ‘What if we introduce that as the meme to have the cultural dialogue at Microsoft?’”