Satya Nadella on AI, Sexual Harassment, and Microsoft’s Soul

The successor to Bill Gates and Steve Ballmer stresses empathy and has a strategy for populism. Plus, the best piece of advice he ever got from the company’s first leaders.
Businessweek Debrief: Satya Nadella

Microsoft Chief Executive Officer Satya Nadella is putting his own stamp on the tech giant once led by Bill Gates and Steve Ballmer. He spoke to Bloomberg Businessweek Editor Megan Murphy in New York on Dec. 13, 2017. Following are excerpts from their conversation.

Megan Murphy: You follow Bill Gates and Steve Ballmer as the third chief executive officer of Microsoft Corp. How do you put your own personal stamp on it? What do you want your living legacy to be as a leader at a company that has had just two, but both of whom were larger than life?

Satya Nadella: The best advice I got from both Steve and Bill was to not try and somehow get into this mold of trying to fill their shoes. It’s impossible. I’d grown up in the company they built admiring what they’d done, but at the same time they gave me enough confidence, quite frankly, to be my own person. I look at what is it that I want to achieve. I’ve been blessed to have this platform at Microsoft. But frankly, the first job I had at Microsoft I felt was the best job. The second job I had at Microsoft was the best job.

There was this one gentleman, who happens to be the governor of North Dakota now, who, when I worked for him at Microsoft, said, “You know, we all spend far too much time at work for it not to have deeper meaning.” I was probably in my early 30s when he said it, and I probably didn’t understand it. But over time I got it more. That’s what I want my legacy to be, that anyone who joins our company is able to connect their personal passion and use Microsoft as a platform to realize it.

I’d like to say, “Don’t think of working for Microsoft, but think of Microsoft working for you.” I get that it’s not going to be true every day. But even if it’s going to be partially possible for you to make that connection, then the way you think about your work, the way you derive your own meaning out of your work, is going to change.

Satya Nadella
Photographer: Laurel Golio for Bloomberg Businessweek

The message of your book, Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone, is connecting empathy with technology, empathy in the workplace, empathy in society. What does it mean when you say, “I’m an empathetic leader.” How is that at the core of what you want Microsoft to be?

Empathy is what it’s all about, super-important for us in our core business. The intuition is pretty straightforward: What does Microsoft have to do to stay relevant? We have to meet the unmet, unarticulated needs of the customers. That’s the source of innovation. So if there’s anything that we’ve got to make sure each day, each week, each year that we do is to be in touch. The challenge is you can’t just say, “Let me listen to customers.” You’ve got to be much more of an active listener. You can’t switch on this button called the empathy button and say, “Well, now I am going to listen to customers.”

So if the source of innovation is empathy, how does one lead with empathy? I think it comes from your life lessons. That’s where this notion—where I compartmentalize my life and my work—doesn’t work. In some sense you are who you are because of what you learn, because of what happens to you throughout your life. That’s at least what I’ve come around to realize. It’s not like I was born with some innate capability for empathy. It’s just what life’s lessons have taught me, and that’s what I believe has made me a better leader.

Part of your mission, you say, is to rediscover the soul of Microsoft. How would you describe the progress you’ve made reinventing the culture?

I start from the position that I’m a consummate insider. I’ve grown up with Microsoft now for 25 years, the company that Bill and Steve built, and I’m very proud of it. At the same time, I’m grounded on the things that we can do better. One is this entire notion of culture. What happens in any successful institution is you start off with a brilliant idea. Otherwise, you can’t get anything going. Then you build all this amazing capability that reinforces that idea. The culture implicitly grows around it.

The challenge is the culture needs to foster a new idea. Just because you have this beautiful lock between the original concept and culture doesn’t mean you can get to the next concept. When someone has had one hit, that’s when the real struggle begins.

How do you reinvent your culture?

I got inspiration from Carol Dweck and her work on mindset. You can’t say the transformation is “let me go from A to B”— then I’ll stay static at B. It has to be this continuous process of renewal. I don’t think we’ll ever be done. The day I claim any progress is when we haven’t made progress. So if you practice it by asking “What is my fixed mindset moment today?” and confront it, that’s what the culture has to be all about.

You’re candid about change in this fixed mindset, about where you felt Microsoft had fallen behind. One is the cloud. Tell us how fundamental that process has been to pushing the company forward as the cloud continues to evolve.

Dealing with technology shifts is much easier than dealing with business model shifts. We had a successful business with high margins doing data center software. We had in some sense framed what success looks like, what progress looks like, using a particular definition of what the category is, what the margin profile is. Except that the world was changing.

The market itself was going to be much bigger but was probably going to come with a different margin profile. In other words, the business model was going to be fairly disruptive. We needed to confront that. That’s what happened to us in the cloud. Quite frankly, we were perhaps a little late to get to it, but we were very fast once we did. If you look at the last multiple layers of Microsoft, the cloud has been the highest-growth business in the company, even in historical terms. That’s nice to see. Success is not actually built by moving from hit to hit to hit. It’s the batting average that counts. You’ll make some mistakes, you’ll catch some trends, you’ll miss some trends. But the overall capability comes from being able to confront your fixed mindset.

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Photographer: Laurel Golio for Bloomberg Businessweek

You refer to yourself as a technology optimist. I’ve talked with CEOs about people who feel they’ve been left out, dislocated, disenfranchised by technological innovation. Can you articulate that challenge of looking at technology as a force for good?

There’s no question that I’m a techno optimist. But to your point, all technology and technology-based revolutions have had harsh displacements. It’s up to us as companies that are benefiting from it, as well as societies that are going through this change, to confront it with clear eyes.

With each technological change, one of the great ben­efits that we can bring about is more inclusion. Take anyone who has disabilities today, or different abilities, and isn’t able to fully participate in our economy. To give you an anecdote, I work at Microsoft with a woman named Angela Mills. She’s using this new application we created called Seeing AI. It allows anyone with visual impairment to essentially imprint the world. You turn on the camera, and it will tell you what you’re looking at. In her case she’s able to order food in the cafeteria knowing exactly what she’s ordering. Walk into conference rooms at Microsoft knowing she’s in the right conference room. It enables her to fully participate in the company because of these AI-assisted tools.

Another example: There are 500,000 jobs today in the tech sector that are open. There needs to be a feedback cycle between where the jobs are, what the demand is like, and where the skills are—and how we bridge them all. This isn’t about Microsoft. This is about all of us.

When people talk about AI, they have an almost entrenched dystopian vision of its effects. How do you form a narrative of AI being a true force for good as well?

We have to keep both the challenge of AI, as well as the opportunities AI creates, front and center. Denying either one of them would be a mistake. One of the things that I think a lot about is what AI can mean for a topic that’s very near and dear to my heart, which is accessibility. I gave you one example, Seeing AI. Another one is learning. What we’ve done recently is taken AI tools and integrated them into the learning tools in Word and OneNote to help anyone with ­dyslexia. Once you help a child in school get past their reading challenge, a whole world opens up.

And what can we do for someone with ALS to be able to communicate? With the latest release of Windows, we took eye-gaze technology, and so, just with your eyes, you can start typing, communicating. That makes a world of difference for someone with ALS.

Even with something like radiology and the treatment of cancer. One of the most laborious processes is to identify the cancerous tumor and to make sure the radiotherapy is impacting only the tumor and not the good parts. That’s something that AI can actually help. These are examples where AI can help drive productivity, better health outcomes, better educational outcomes, provide more accessibility.

You have a son, Zain, who was born disabled, and you’ve been honest and open about how that’s taught you and informed you as a leader.

The birth of Zain was perhaps the biggest “hit refresh” moment for me and my wife. If you’d even asked me a couple hours before he was born what I was thinking about, it would have been more like, When will Anu, my wife, and I go back to work? Or what will our weekends be like? Everything changed that night. Zain was born with severe brain damage because of in vitro asphyxiation. Now he has cerebral palsy.

I struggled with it for multiple years. All my well-laid-out plans were out the window. I slowly came to terms with it only by watching my wife and her response. She came back home, recovered from the C-section, was driving Zain up and down Seattle trying to get him all the best therapies. I got schooled on what was expected of me as a parent and as a father. It wasn’t to wallow in my own sort of, you know, stuff, but to recognize my responsibility toward Zain, to be able to see through his eyes. Nothing had really happened to me. Something had happened to him. That’s one of the things that shaped me.

You and your wife have known each other almost all your lives. You grew up in India together, essentially.

Our life is all about partnerships. When I look at where we are as a family, or where I am with what I’ve been able to achieve, I can’t even conceive of it without Anu, what she’s sacrificed. One of the things I think a lot about in the context of Microsoft is how we’re trying to create an environment of diversity and inclusion. A lot of that stems from the choices that we had to make as a family. It helps me come to work realizing that the support system exists. Then what I do at work is meaningful. It’s the satisfaction I can take back to my own personal life. It’s been a real blessing.

On the issue of women in technology—harassment, the lack of progress—is this something specific to the industry? What’s being done to incentivize women to stay in the field?

At Microsoft, our mission is empowering every person and every organization on the planet to achieve more. You can’t start that journey if you don’t represent the world, whether it’s women or it’s the minorities in your own workforce. One of my responsibilities is to create a culture that allows you to achieve more. What am I doing to create that inclusive culture—to make women feel included in the company, take maternity leave, and come back to make progress in their careers? What have I done to ensure equal pay for equal work? The tone at the top matters. People in power is where the change has to happen.

When you look at the rise of populism and nativism, and when you talk to other leaders in the tech community, do you feel that it’s a lasting moment that we’re in right now? Or is it temporary, given how hopeful you are in general?

The reality we all have to confront is that globalization, using that term very broadly, has yielded a lot of advantages to the world—except it’s not been evenly spread. It’s not been evenly spread even within a country that largely has done very well because of globalization, like the U.S. Unless and until we can deal with the inequities in our societies—in every country—it’s America First in the U.S. It’s going to be Britain First in the United Kingdom. It’s going to be China First in China. That’s what the world will expect. No one is going to get elected to any country’s presidency or prime ministership by not talking about their country first.

Business leaders in particular have to deal with this challenge. We can’t say, “Well, this nationalist movement of populism is a passing phase.” We’ve got to deal with it as a phase that we’ve entered because the dividend of globalization hasn’t yielded more equitable growth for the world.

Photographer: Laurel Golio for Bloomberg Businessweek

One example illustrates this challenge: I’d gone to Kenya in 2014 for the launch of Windows 10 to a place called Nanyuki, which was around a couple of hundred kilometers north of Nairobi. We were using TV white space—the spectrum between TV channels—to create broadband connectivity for this rural community. Then, that meant there were internet cafes. At one of them I met this one gentleman who was working on Microsoft technology. He was a college graduate who had come back to the community to earn a living. And I said, “What are you doing?” He said, “Oh, I’m solving some math problems.” And I said, “What are you solving math problems here for?” He says, “For kids in Spain.” Wow.

Then a year and a half goes by. I’m visiting one of our data centers in the middle of the country in the U.S. This is a place where we’re putting a lot of capital to power a lot of businesses around the country and around the world. And just 10 miles outside of that there’s no broadband connectivity. So that’s when it hit home that you don’t have to necessarily go to Kenya or India or elsewhere. There are inequities in our own backyard, and we have to do something about it.

We’re now working to create what we call the Rural Broadband Initiative, or Airband, working with the telecommunications companies here to create more connectivity solutions for the rural U.S. so it can fully participate. We know a lot of the veterans, for example, go back to where they come from in rural areas. Even the Veterans Administration’s telemedicine services require broadband connectivity, but they don’t have it. Solving some of our pressing challenges right here at home is going to be very important if we’re going to talk about a globalized world and all the surplus it can create.

You say in your book: “Microsoft is a company born in America. ... We believe in the American dream, both living it out as employees and helping others do the same. Our allegiance is to a set of enduring values: privacy, security, free speech, opportunity, diversity, and inclusion. ... We will stand for them when challenged.” Is that a mission statement shared at the company?

I am a product of two amazing American things. One is American technology reaching me where I was growing up and making it possible for me to even dream the dream, and then America’s immigration policy, which let me live the dream. Standing for a set of principles comes from that.