microsoft change management case study

Microsoft Change Management Case Study

Microsoft is one of the most successful and influential technology companies in the world, having transformed the way people live, work and communicate with its innovative products and services. 

But behind this success story lies a series of significant transformations and changes, which have enabled the company to stay relevant and competitive in a rapidly evolving market. 

In this blog post, we will examine the change management strategies and techniques that Microsoft has employed over the years, and how these have helped the company to successfully navigate through various transformations and emerge as a global leader in the tech industry. 

We will also look at some key lessons that other organizations can learn from Microsoft’s approach to change management, and how they can apply these to their own transformation efforts.

Overview of transformations and changes implemented by Microsoft 

Microsoft has undergone numerous transformations and changes since its establishment in 1975. Here are five significant transformations or changes that have occurred:

• Transition to software development: Initially, Microsoft focused on hardware development and created BASIC language software for Altair 8800, a popular computer in the 1970s. However, after Bill Gates realized the potential of software development, the company shifted its focus to software, which led to the creation of MS-DOS, Windows operating system, and other popular software products.
• Move to the internet: With the emergence of the internet in the 1990s, Microsoft recognized the potential of this new technology and invested heavily in it. This led to the development of Internet Explorer, MSN (Microsoft Network), and various web-based applications.
• Diversification: Microsoft was initially known for its operating system and software products. However, in recent years, the company has diversified its offerings to include hardware such as Xbox gaming consoles, Surface tablets, and other products.
• Cloud computing: In the early 2000s, Microsoft recognized the potential of cloud computing and began investing in this area. The company launched its Azure cloud platform in 2010, which has become one of the leading cloud platforms in the world.
• Open source: In the past, Microsoft was known for its proprietary software and closed ecosystem. However, in recent years, the company has embraced open source technology and has made significant contributions to the open-source community. For example, Microsoft has made its .NET framework open source, and it has released various tools and platforms for open-source developers.

What are those factors that drove changes at Microsoft?

Here are some factors that led to the transformations in Microsoft:

• Market changes and competition: As the market for computer technology evolved, Microsoft needed to adapt to changing customer needs and preferences. In addition, competition from other technology companies also pushed Microsoft to make changes to stay relevant and competitive.
• Technological advancements: The emergence of new technologies such as the internet, cloud computing, and mobile devices created new opportunities for Microsoft to expand its offerings and reach new markets.
• Leadership changes: Over the years, Microsoft has had different leaders at the helm, and each leader brought their own vision and priorities for the company. For example, when Satya Nadella took over as CEO in 2014, he emphasized the importance of cloud computing and digital transformation, which led to significant changes in the company’s focus.
• Customer feedback : Microsoft has always had a strong focus on customer feedback, which has played a significant role in shaping the company’s products and services. Customer feedback can also drive innovation and change in the company’s offerings.
• Cultural changes: Microsoft has undergone cultural changes over the years, such as the adoption of open-source technology and a more collaborative and inclusive work environment. These cultural changes can help drive innovation and lead to new ideas and products.

How strong leadership caused transformation in Microsoft ?

Strong leadership has played a critical role in all of the transformations made by Microsoft over the years. Here are some ways in which strong leadership has contributed to these transformations:

• Clear vision and direction: Strong leaders at Microsoft have always had a clear vision and direction for the company, which has helped to guide its transformation efforts. For example, Bill Gates and Steve Ballmer led the company through its early years, and their vision of putting a computer on every desk and in every home helped to drive the company’s success in the 1980s and 1990s. Similarly, Satya Nadella’s vision of empowering people and organizations to achieve more has driven the company’s recent focus on cloud computing and digital transformation.
• Strategic decision-making: Strong leaders at Microsoft have made strategic decisions that have helped to position the company for success in a rapidly evolving market. For example, the decision to shift the company’s focus from hardware to software development in the 1980s was a strategic decision that helped to pave the way for the company’s success in the following decades.
• Agile approach: Strong leaders at Microsoft have embraced an agile approach to change management, which has enabled the company to quickly respond to changes in customer needs and market trends. For example, under Satya Nadella’s leadership, Microsoft has shifted its focus to cloud computing and digital transformation, which has helped the company to remain relevant and competitive in a rapidly evolving market.
• Employee engagement and empowerment: Strong leaders at Microsoft have recognized the importance of employee engagement and empowerment in driving change management. For example, under Satya Nadella’s leadership, the company has created a culture of innovation and collaboration, and has encouraged its employees to take risks and experiment with new ideas.

The biggest outcome of the successful changes at Microsoft 

The biggest outcome of the successful changes at Microsoft is the company’s continued growth and success in a rapidly evolving market. By successfully navigating through various transformations, such as the shift from hardware to software development, the move to cloud computing, and the focus on digital transformation, Microsoft has been able to remain relevant and competitive in the tech industry.

The company’s continued success has been reflected in its financial performance, with Microsoft consistently posting strong earnings and revenue growth in recent years. In addition, the company’s products and services, such as Windows, Office, and Azure, are widely used and trusted by customers around the world. Overall, the biggest outcome of the successful changes at Microsoft has been the company’s ability to stay ahead of the curve and remain a leader in the tech industry.

Final Words 

Microsoft’s successful implementation of changes provides valuable lessons for organizations looking to navigate through periods of transformation and change. By adopting a customer-focused approach, embracing an agile methodology, empowering employees, and having strong leadership with a clear vision and purpose, Microsoft has been able to successfully navigate through various transformations and remain a leader in the tech industry.

Additionally, the company’s willingness to experiment with new ideas and take risks has enabled it to stay ahead of the curve and remain relevant to its customers. As a result, Microsoft’s continued growth and success serve as a testament to the importance of effective change management in driving organizational success. Overall, Microsoft’s successful implementation of changes provides a valuable case study for other organizations to learn from and apply to their own transformation efforts.

About The Author

Tahir Abbas

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Transforming change management at Microsoft with Microsoft 365

Sep 20, 2023   |   Inside Track staff

“We were no exceptions,” says David Johnson, principal product manager architect, who leads the team that governs how Microsoft 365 is deployed across Microsoft. “Microsoft 365 started changing every day, and we needed to figure out how to keep up.”

The transition to living in this new Software as a Service (SaaS) world was further complicated by the global pandemic and ever evolving work style changes. The ongoing pandemic and its uncertain duration meant that organizations had to remain agile and responsive to the shifting needs of their workforce. IT teams had to continuously evaluate and implement new technologies and cloud-based solutions to facilitate remote collaboration, enable seamless communication, and maintain productivity. As a result of remote work, employees embraced asynchronous workflows, allowing for flexibility around when and where work could be completed.

Now with the help of generative AI, employees can utilize products like Copilot (coming to public preview soon) and Teams Meeting Recap to reduce meeting fatigue and prioritize workloads.

To learn more about generative AI improving the employee experience, check out our spotlight on the digital transformation series.

The pressure on IT administrators at Microsoft and everywhere increased tremendously.

It’s a hot topic for customers—how do I decide what I’m going to turn on for my company effectively? From an industry perspective, this is a fairly important conversation. —David Johnson, principal product manager architect, Microsoft Digital

“This was a lot to absorb for an industry that had previously thrived on consistency, reliability, and predictability,” says Johnson.

Change became the new constant, and dealing with that level of change is something everyone is still getting used to.

“It’s a hot topic for customers,” says Johnson, whose team has been at the forefront of both the industry shift to the cloud and the tech demands of a new mobile workforce. “How do I decide what I’m going to turn on for my company effectively? From an industry perspective, this is a fairly important conversation.”

Microsoft Teams alone has hundreds of new features and changes in development at any given time. The rest of the Microsoft 365 suite—which includes Microsoft Office apps, hosted email, and the Microsoft SharePoint glue connecting it all—has also seen rapid changes.

Johnson’s goal was to handle the change management for all Microsoft 365 products in the same way. His team’s approach falls along getting three things right: initial triage, putting guardrails in place to allow innovation, and staying current on the latest news.

Triage for an upcoming change

IT administrators largely control what changes become available to employees, who in the workforce can see those experiences, and how to configure for them. Sometimes updates are relatively easy to deploy, such as adding the ability to raise a virtual hand in a Microsoft Teams meeting. Other times, they might involve trickier issues such as artificial intelligence or data mining—and then the concept of triage becomes paramount.

Broadly speaking, Microsoft’s internal triage involves two basic concepts: developing a posture—a set of IT principles for your company—and ensuring that features or change management fit within that posture. A posture could define the levels of security and data privacy needed, for example Microsoft 365’s compliance capabilities, such as data loss prevention (DLP), information protection, and eDiscovery, allowed major financial institutions to align their IT environment with their defined compliance posture. They implemented robust data protection measures, including encryption and access management, to safeguard sensitive financial information. Additionally, they used advanced threat protection features to detect and respond to potential security incidents proactively.

When that posture is in place, triaging against it becomes easier. The first step is to evaluate what’s coming and determine how significant the change is, then run the change through a series of questions that reflect a company’s IT posture, such as these:

• Does this need a security review?
• Do you need to run this by your privacy experts?
• What are the legal implications of turning this feature on?
• Does your human resources team need to be involved?
• Will the workers council or union need to be involved?
• What is the IT manageability impact? Are there any IT resource impacts?
• Are there employee experience implications that you’ll need to communicate?

[ Transforming Data Governance at Microsoft with Purview and Fabric. Discover implementing a Zero Trust security model at Microsoft. Explore how Microsoft creates self-service sensitivity labels in Microsoft 365. Unpack upgrading Microsoft’s core Human Resources system with SAP SuccessFactors. ]

Guardrails to encourage innovation and collaboration

Microsoft spends a lot of time talking about privacy and security, but just as crucial to the company are the creativity, innovation, and collaboration that take place within its workforce.

One of Microsoft’s most important postures is maintaining the sometimes tricky balance between protecting employees and allowing them to chat freely and to share files and collaborate across multiple platforms. To keep that balance, the company relies on the concept of guardrails that maintain security and privacy while giving people room to move.

One way to test the balance between security and innovation is by using an internal ring structure to deploy change management. There is a natural first ring of testers comprised of the engineering and supporting teams that worked closely with the solution. The internal ring structure allows the people who are most familiar with the solution to validate it before it’s shared with the second ring.

The second ring of initial users is where some of the most important testing takes place, and as a feature matures, it gradually sees broader distribution. At Microsoft, a group of employees who are enthusiastic about new features has signed up to see early deployments. That group, called Microsoft Elite, often comprises one of the earliest rings.

The ring structure can be used for any IT department that wants to slowly roll out changes and monitor the effects prior to impacting users on a broad scale.

“The team that manages the deployment of Microsoft Exchange internally at Microsoft uses rings to try out new features before they are broadly deployed across the company” says Nate Carson, a senior service manager who helps manage the company’s internal use of Microsoft Exchange.

“It lessens the impact to the broader company by doing it this way,” Carson says.

Using rings to try-it-before-you-deploy-it also gives security and data privacy teams more time to assess the impact of a new feature. That’s crucial for change management in the era of relentless hacking, ransomware, phishing, and other security attacks.

Companies need to be more aware of software features that are being released and understand how they might impact digital security. —Lee Peterson, principal manager, Microsoft emerging technology standards and assurance

“There is an explosion of data and really an explosion of hackers trying to get at your data,” says Faye Harold, principal program manager for information protection services on the Digital Security and Resilience (DSR) team in Microsoft Digital. She spends most of her time thinking about hackers and trying to outwit them. Because the end user is the last line of defense for information security, she also watches how those users respond to new features. “It’s mind-boggling how many attack vectors there are, and it’s all centered on people and their identities,” Harold says.

“Microsoft has a set of security principles it has shared with product groups”, says Lee Peterson, principal manager in DSR for emerging technology standards and assurance. There are expectations around data protection, and when a change or new feature is coming down the pipeline, he watches to see how it might impact the company’s security posture.

“Companies need to be more aware of software features that are being released and understand how they might impact digital security,” he says.

Staying on top of the news

The events of the pandemic show how quickly things can change for companies of all sizes. That’s why it’s important to be aware of the latest communications from software and service developers. Microsoft relies on a Microsoft 365 Message Center to keep customers aware of changes that impact the Microsoft Office 365 environment. It’s a link on the left side of the admin portal, and it provides important news, detailed information, and visual indications of items that require an administrator’s attention. It can describe the specific actions that administrators need to take for change management and the timeframes for those changes.

“Another way to stay current on products and features is by checking in with the docs.microsoft.com site” says Darren Moffatt, senior service engineer for Microsoft 365.

“It’s pretty much our encyclopedia of everything Microsoft,” Moffatt says. “It can be super technical, but it can also have good documentation on simply how a feature works from a visual perspective. So my advice is: if there are customers, especially admins that have not made reviewing docs.microsoft.com part of their cadence or made a habit of checking it out and going to it as their reference, do that.”

Microsoft has made it easier for organizations to handle their Message Center with the help of Planner. By bringing the Message Center and Planner together, companies can now evaluate if a message could potentially affect their operations. This integration allows them to quickly assess the importance of each message and assign it to the right person for further review if needed. With Planner’s assistance, the triage process becomes smoother, ensuring that all relevant messages are carefully examined and addressed promptly.

Learn more about staying on top of important announcements from the message center with Microsoft Planner.

The changing face of IT

As the modern workforce continues to shift productivity and resources to the cloud, IT is no longer just focused on tech support. It’s now deeply involved in business enablement and improving the bottom line.

IT historically was separated into silos. The Microsoft SharePoint people were in one, and the Microsoft Exchange people were in another, and everyone had their distinct roles. But those boundaries have come down as software has enabled more collaboration. Now, working in IT means having knowledge across disciplines, and Microsoft wants to immerse employees in different areas and give them experiences that help build broader skill sets and handle change management, Moffatt says. So, when change comes at you fast—as it often does—more of the team is ready to respond.

“Microsoft has also really pushed everybody so that every quarter you don’t just get to sit on your laurels,” he says. “You do have to be very clear about how you’re going to learn and grow as an employee.”

Employees don’t see the boundaries between the services, according to Johnson. They see the boundaries across scenarios, and those scenarios are now starting to blend.

“All of these services converged because our employee scenarios converged,” he says. “Collaboration doesn’t start or end at a meeting. Voice call is no longer just a voice call; it’s now a chat and files that you’re sharing. That’s why you converge a lot of these experiences to enable effectively a more complete package for your employees.”

In a broader context, continuous improvements in change management, security, and collaboration facilitated by Microsoft 365 can indirectly contribute to enhancing AI experiences. As organizations adopt efficient change management practices, stay updated with the latest features and updates, and strike a balance between security and innovation, they create an environment that is conducive to leveraging AI technologies effectively. This allows organizations to embrace AI-driven solutions, streamline processes, and deliver more personalized and efficient AI experiences to their users.

• Evaluate upcoming changes ahead of schedule. Consider factors like security, privacy, legal compliance, HR policies, and IT manageability to ensure a smooth transition.
• Stay informed about the latest news and updates that impact your service environment.
• Gradually deploy changes using a ring structure, starting with internal testing and expanding to a broader audience.

• Transforming Data Governance at Microsoft with Purview and Fabric.
• Discover implementing a Zero Trust security model at Microsoft.
• Explore how Microsoft creates self-service sensitivity labels in Microsoft 365.
• Unpack upgrading Microsoft’s core Human Resources system with SAP SuccessFactors.

Tags: cloud computing , digital transformation

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Change Management Lessons from Microsoft and Apple [Case Study]

It’s useful to examine how others have approached change and transition. In this post, an Apple change management case study, we’ll examine the  change management  lessons from Microsoft and Apple.

The reason to conduct a case study of these companies is both have undergone significant leadership changes in the last six years and the direction, scope, and culture of the companies have changed significantly.

The divergence of the fortunes of Apple and Microsoft highlights perfectly the growth potential achievable from a combined approach of  change and innovation.

Both Microsoft and Apple are great companies with huge customer loyalty and fantastic products.

In the 1990’s Apple was almost broke while Microsoft was in the market-dominant position.

Now, of course, Microsoft is still a great company with huge customer loyalty and some great products.

But this pales in comparison to its market dominant position of the 1990s.

Microsoft has bounced back in the last three years, joining Apple as a trillion-dollar company (by market cap). This is a significant turn around from the ten years previous where the stock and business was in the doldrums.

In the early 2000’s it could be argued that antitrust legislation has had some negative effect on Microsoft, but closer analysis shows that it has failed to give consumers what they really want; innovative products that constantly push boundaries.

During this time, Apple, on the other hand, had flown in completely the opposite direction. It has taken its customers from the iPod to iPhone to iPad. Microsoft has seen some success with its Xbox, but contrast and compare to Apple’s successes.

Let’s first take a look at Apple:

An analysis of Apple’s culture under Job’s

It’s common knowledge for many, particularly after the biography by Walter Isaacson on Jobs, that his leadership style was autocratic, perhaps even domineering.

According to Vroom-Yetton-Jago Decision-making Model of Leadership and decision making, the culture of Apple under Jobs could be classified as Autocratic.

Specifically, “Autocratic A2” where the leader will consult people for some information, but will then make the decision themselves. Everything had to go through Jobs and that slowed things down.

Jobs expected the best from people and demanded excellence at all times.

He was famous for firing people, seemingly on whims in the hallways.

This take charge may have been the kind that was needed when Jobs took over. In 1997 when he’d taken the help, Apple only had months of cash in the bank. He stripped the product line down to just four products.

Drastic action was needed as well as energy and creativity.

Art Levinson, Chairman of Genentech, on behalf of Apple’s Board said about Steve Jobs resignation , “Steve’s extraordinary vision and leadership saved Apple and guided it to its position as the world’s most innovative and valuable technology company.”

Under Jobs, Apple soon began to thrive. Redesigning the Mac, becoming perhaps the best personal computer in the world, with the new OSX to go with it.

Apple also led the digital music revolution with the iPod and iTunes. Reinvented the mobile phone with the iPhone and led mobile computing with the iPad.

But such a leadership style does have its negatives.

The challenge of an autocratic leadership style is that it underutilizes employee creativity and collaboration. No matter how much information is solicited in decision making.

Lesson one: don’t change what doesn’t need changing

“Apple is not going to change.” The transition to new world under Cook. Tim Cook wrote this in his first email as CEO when he took over from Steve Jobs in 2011 as Jobs had stepped down after diagnosed with cancer.

When Cook wrote “nothing will change”, he meant the strategy of Apple.

Cook had big shoes to fill.

Jobs had been the chairman and CEO of Apple for 14 years until Cook, a longtime Apple executive took over.

As Cook took over there was a great deal of skepticism on his ability to successfully lead the company and maintain the innovative output that had made it famous.

Cook knew the company well and presided over much of its success in the background.

Not involved in product design, for which Apple is famous, Cook was an operator: His last position was COO and responsible for the end-to-end supply chain sales and service that drive much of Apple’s success.

Given this, and the company’s general financial health, this was no time for drastic changes, hence the email to employees that nothing will be changing.

Cook’s style, intentionally, or inherently to him was the right one at the right time:  Inspirational, inclusive and collaborative.

During Jobs’s tenure, he insisted many decisions went through him, which slowed things down. Cook changed that, modifying the structure and culture to allow for more decentralized decision making, autonomy and collaboration.

Denise Young Smith, Apples HR executive  said , “Apple’s HR chief: Working with Tim Cook ‘actually helps you to be a better human being’”

This was evident when Cook announced Apple’s first corporate social responsibility program, something Jobs had resisted.

“We have stepped up our social responsibility. We have talked about things and been more transparent about what we’re doing,” Cook said in an  interview  with  The Washington Post  when asked how Apple’s culture has changed.

Strategy Apple is a product company with core competencies in product design and extending that user experience all the way through to the buying experience of sales and service.

Apple’s succeeds itself with superior and differentiated products, matched with a proprietary rather than an open-source approach to technology. This locks customers in for longer due to switching costs.

Where to from here?  Apple is a huge company with a humongous amount of cash on the balance sheet and no obvious places to invest it. There is scope to sell more iPhones in India and China, but the market for smartphones does appear to be maturing.

Apple is reportedly entering into car technology and self-driving cars, but it’s hard to know how much of this is core to the corporate DNA.

Warren Buffett invested, buying some 5% of stock. So he certainly thinks the future prospects, on balance, are looking positive.

Microsoft’s underperformance and transition to new CEO, Satya Nadella

Steve Ballmer, succeeded Bill Gates as CEO of Microsoft in 2000 and held the office 2014 when Satya Nadella took over the reins.

Microsoft’s results were less than stellar during Ballmer’s tenure.

Microsoft’s share price is 40% lower than it was in 2000, while Apple’s share price has risen from around $50 to over $500 during the same period.

Unlike Cook, Nadella had two jobs: reboot the organizational culture in addition to redefining the company strategy and focus.

Organizational reboot at Microsoft

Nadella’s first focus was on the organizational culture, as he  believes , like Peter Drucker, that “culture eats strategy for breakfast”.

Talking to The Economist, Nadella’s said: “We need a culture that allows you to constantly renew yourself”. Transforming the bombastic competitive style of Steve Ballmer (see the YouTube clips of Ballmer running across the stage and yelling “I love this company”) to one of openness and collaboration, yet delivering real-world results.

This was imperative. Consider the stats:  71% of the workforce is actively disengaged . Annually, this costs U.S. organizations $300 billion.

Companies with highly engaged employees have 5 times higher shareholder returns .

Microsoft wasn’t failing by any stretch of the imagination, but it did need a boost of authentic energy to avoid languishing along with the likes of IBM.

An  apt quote  from Bill Gates summarises the need for a transition to Nadella: “When your business is healthy, it is difficult to behave as if you are in a crisis. That is why one of the toughest parts of managing, especially in a high-tech business, is to recognise the need for change and make it while you have a chance.”

Nadella led by example, as he described the  Wall Street Journal , that while he’s not a fan of a lot of meetings, he does schedule long-form meetings with his leadership team each Friday. Sometimes lasting eight hours.

Nadella’s cultural operating rhythm is guided by the following:

• Openness and collaboration from secrecy and silos;
• Value for innovation; and

Nadella then turned his attention to strategy

Keeping the strategy easy to understand is important. As  Kotter highlights in his 8 Step Change Model , well-crafted mission and vision statements impact business results, as it guides the day-to-day behavior and decisions of everyone in the company.

The last strategy under Ballmer was unwieldy.  It was :  “ to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.”

Nadella redefined what Microsoft was about in a simple, uniting and clear statement. The current  stated strategy is : “ Build best-in-class platforms and productivity services for a mobile-first, cloud-first world.”

To carry this out he outlines three core tenants: (see 2015 annual report)

• Reinvent productivity and business processes.
• Build the intelligent cloud platform.
• Create more personal computing.

The results speak for themselves. Microsoft’s share price nearly doubled since he took over.

Following the reformed strategic direction, Microsoft has invested in Azure, it’s a cloud-based services platform. While not profitable yet, it does provide a scale for Microsoft’s other products, such as Office.

The hardware division has been a hit with the Surface Book, which is developing a loyal following. This division is also the virtual reality play of Hololens.

Microsoft also recognized where its core customers hang out and bought LinkedIn for an incredible $26 billion to exploit synergies with their Artificial Intelligence (AI) investments.

Change management lessons: The failure to innovate generally comes in two guises.

The first of these is the  failure to imagine the future.  This imagination relies on people.

Freethinkers, who accept the responsibility of innovation, perhaps even creating new markets in the process, are attracted by companies that will allow them to indulge their creative side.

The second failure to innovate is in the  execution of innovation , which is for the most part driven by collaboration.

In a report by Google in 2010,  The Decisive Decade: how the acceleration of ideas will transform the workplace by 2020 , showed  there is an 81% correlation between collaboration and innovation.

Both Apple and Microsoft are able to attract top talent. This top talent produces the creative ideas that go on to produce innovative products that customers love.

Apple had the balance right under Jobs, and while concentrating power at the top, it was able to exploit the collaboration required to turn out great products people loved. Cook is driving the collaboration still more.

Microsoft under Ballmer somehow went wayward and would seem to be better exploiting collaboration for innovation under Nadella.

Microsoft has seen tablet PCs and smartphones come from its creative pool of talent. Yet it is Apple that has emerged as the new dominant force in the new consumer markets.

The result is clear to see: while Microsoft’s share price is 40% lower than it was in 2000 when Nadella took over, while Apple’s share price has risen from around $50 to over $500 during the same period.

The brick wall to innovative progress

You can have all the creativity and free-thinking available to you, but unless you can transfer these ideas onto the shop floor and then through to customers in a meaningful way then innovation will stay on the drawing board.

Apple’s product evolution perfectly describes the innovative process. Innovation has its feet firmly in the shoes of small steps. They are experimental in nature and part of an innovative culture is the acceptance of failure.

The problem that organizations like Microsoft face is marrying up these small, experimental innovations – with their inevitable failures on route to big successes – with their need to generate revenue. And that is rarely, if ever, a fair fight.

Existing operations are large, established, and revenue and earnings generative. Managers of these operations have the clout to get their way: after all, without them, the company would have no profits.

On the other hand, innovation is by its very nature risky with no guarantee of profit generation. Experimentation distracts focus from existing businesses.

The most vociferous of enemies to innovation is to be found inside an organization.

Solving the internal conflict between innovation and the status quo

Clearly, Apple succeeded in doing what Microsoft has consistently failed to achieve: it has solved the riddle of partnering existing operations with an innovative culture.

Steve Jobs was able to instill his own innovative thinking into the entirety of Apple’s business model. He constantly pushed his creatives to move forward, giving them ‘official permission’ to do so when he said things like:

‘I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what’s next.’

Building internal partnerships toward innovation

Innovative leaders and the leaders of existing operations first have to realize they need each other to exist.

Both Nadella and Cook transformed the organizational culture with a focus on collaboration to aid innovation.

In the case of Apple, the strategic direction didn’t need changing, it was to recognize the company they had become required a new way of working if they were to keep up the cutting edge product innovation.

Microsoft needed to change both strategy and culture.

The lesson is that innovation does not just magically emerge. It is created by the structures and management approaches put in place by management.

The importance of leadership in managing change for innovation

With such internal conflicts and the resistance to innovation an unequal battleground, senior management must take a senior role in not only establishing but then promoting an environment where innovation is embedded in the culture of the organization.

It may be that leaders will have to get their hands dirty, becoming involved in resolving low-level conflicts.

While these conflicts may be concentrated between the self-interests of the existing business and the innovators. It is also likely that as the innovation culture grows the number of bright ideas will explode.

Trying to do too much at one time is as damaging as doing nothing.

Steve Jobs had the magic formula and Cook is extending it in a new way. Nadella also understands. There is a need to produce profit today and innovate for a profit tomorrow.

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Satya nadella at microsoft: instilling a growth mindset change management analysis & solution, hbr change management solutions, organizational development case study | herminia ibarra, aneeta rattan, anna johnston, case study description.

When Satya Nadella took over as CEO of Microsoft in 2014, he inherited a firm fading toward irrelevance, plagued by internal fights and inertia. Earlier that year his wife, Anu, had given him a best-selling book by Stanford psychologist Carol Dweck entitled Mindset: The New Psychology of Success, suspecting it might give Nadella some ideas for Microsoft. He adapted the idea to encourage employees to shift from Microsoft's historical "know-it-all" culture to embrace a "learn-it-all" curiosity. The case study provides background on Nadella's challenges and context, as well as how he and his leadership team executed their culture change effort.

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What is Change Management Definition & Process? Why transformation efforts fail? What are the Change Management Issues in Satya Nadella at Microsoft: Instilling a Growth Mindset case study?

According to John P. Kotter – Change Management efforts are the major initiatives an organization undertakes to either boost productivity, increase product quality, improve the organizational culture, or reverse the present downward spiral that the company is going through. Sooner or later every organization requires change management efforts because without reinventing itself organization tends to lose out in the competitive market environment. The competitors catch up with it in products and service delivery, disruptors take away the lucrative and niche market positioning, or management ends up sitting on its own laurels thus missing out on the new trends, opportunities and developments in the industry.

What are the John P. Kotter - 8 Steps of Change Management?

Eight Steps of Kotter's Change Management Execution are -

• 1. Establish a Sense of Urgency
• 2. Form a Powerful Guiding Coalition
• 3. Create a Vision
• 4. Communicate the Vision
• 5. Empower Others to Act on the Vision
• 6. Plan for and Create Short Term Wins
• 7. Consolidate Improvements and Produce More Change
• 8. Institutionalize New Approaches

Are Change Management efforts easy to implement? What are the challenges in implementing change management processes?

According to authorlist Change management efforts are absolutely essential for the surviving and thriving of the organization but they are also extremely difficult to implement. Some of the biggest obstacles in implementing change efforts are –

• Change management efforts are made when the organization is in dire need and have fewer resources. This creates silos protection mentality within the organization.
• Change efforts are often targeted at making fundamental aspects in the business – operations and culture. Change management disrupts are status quo thus face opposition from both within and outside the organization.
• Change efforts create an environment of uncertainty in the organization that impacts not only the productivity in the organization but also the level of trust in the organization.
• Change management is often a lengthy, time consuming, and resource consuming process. Managements try to avoid them because they reflect negatively on the short term financial balance sheet of the organization.
• Change efforts are often made by new leaders because they are chosen by board to do so. These leaders often have less trust among the workforce compare to the people with whom they were already working with over the years.

Satya Nadella at Microsoft: Instilling a Growth Mindset SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

How you can apply Change Management Principles to Satya Nadella at Microsoft: Instilling a Growth Mindset case study?

Leaders can implement Change Management efforts in the organization by following the “Eight Steps Method of Change Management” by John P. Kotter.

Step 1 - Establish a sense of urgency

What are areas that require urgent change management efforts in the “ Satya Nadella at Microsoft: Instilling a Growth Mindset “ case study. Some of the areas that require urgent changes are – organizing sales force to meet competitive realities, building new organizational structure to enter new markets or explore new opportunities. The leader needs to convince the managers that the status quo is far more dangerous than the change efforts.

Step 2 - Form a powerful guiding coalition

As mentioned earlier in the paper, most change efforts are undertaken by new management which has far less trust in the bank compare to the people with whom the organization staff has worked for long period of time. New leaders need to tap in the talent of the existing managers and integrate them in the change management efforts . This will for a powerful guiding coalition that not only understands the urgency of the situation but also has the trust of the employees in the organization. If the team able to explain at the grass roots level what went wrong, why organization need change, and what will be the outcomes of the change efforts then there will be a far more positive sentiment about change efforts among the rank and file.

Step 3 - Create a vision

The most critical role of the leader who is leading the change efforts is – creating and communicating a vision that can have a broader buy-in among employees throughout the organization. The vision should not only talk about broader objectives but also about how every little change can add up to the improvement in the overall organization.

Step 4 - Communicating the vision

Leaders need to use every vehicle to communicate the desired outcomes of the change efforts and how each employee impacted by it can contribute to achieve the desired change. Secondly the communication efforts need to answer a simple question for employees – “What it is in for the them”. If the vision doesn’t provide answer to this question then the change efforts are bound to fail because it won’t have buy-in from the required stakeholders of the organization.

Step 5 -Empower other to act on the vision

Once the vision is set and communicated, change management leadership should empower people at every level to take decisions regarding the change efforts. The empowerment should follow two key principles – it shouldn’t be too structured that it takes away improvisation capabilities of the managers who are working on the fronts. Secondly it shouldn’t be too loosely defined that people at the execution level can take it away from the desired vision and objectives.

Satya Nadella at Microsoft: Instilling a Growth Mindset PESTEL / PEST / STEP & Porter Five Forces Analysis

Step 6 - Plan for and create short term wins

Initially the change efforts will bring more disruption then positive change because it is transforming the status quo. For example new training to increase productivity initially will lead to decrease in level of current productivity because workers are learning new skills and way of doing things. It can demotivate the employees regarding change efforts. To overcome such scenarios the change management leadership should focus on short term wins within the long term transformation. They should carefully craft short term goals, reward employees for achieving short term wins, and provide a comprehensive understanding of how these short term wins fit into the overall vision and objectives of the change management efforts.

Step 7 - Consolidate improvements and produce more change

Short term wins lead to renewed enthusiasm among the employees to implement change efforts. Management should go ahead to put a framework where the improvements made so far are consolidated and more change efforts can be built on the top of the present change efforts.

Step 8 - Institutionalize new approaches

Once the improvements are consolidated, leadership needs to take steps to institutionalize the processes and changes that are made. It needs to stress how the change efforts have delivered success in the desired manner. It should highlight the connection between corporate success and new behaviour. Finally organization management needs to create organizational structure, leadership, and performance plans consistent with the new approach.

Is change management a process or event?

What many leaders and managers at the Nadella Satya fails to recognize is that – Change Management is a deliberate and detail oriented process rather than an event where the management declares that the changes it needs to make in the organization to thrive. Change management not only impact the operational processes of the organization but also the cultural and integral values of the organization.

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Satya Nadella employed a 'growth mindset' to overhaul Microsoft's cutthroat culture and turn it into a trillion-dollar company — here's how he did it

• Microsoft is a case study in how a growth-mindset culture can help companies succeed in the future economy.
• Microsoft is a trillion-dollar company thanks largely to a culture shift led by Satya Nadella.
• Since Nadella became CEO in 2014, he's encouraged the entire company to adopt a growth mindset, or the belief that skills are developed through hard work and challenges are opportunities to learn.
• Before Nadella took over, Microsoft was characterized by competition between teams and between individual employees.
• Now, in keeping with a growth mindset, Microsoft evaluates employees' performance based partly on how much they helped their colleagues succeed. The company also looks to learn from its former rivals in the tech industry.
• Business Insider spoke with a range of company insiders and organizational researchers to get the inside story on how to change the culture of a 150,000+ employee software giant.
• Visit Business Insider's homepage for more stories .

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A cartoonist once drew an illustration depicting Microsoft's organizational chart as warring factions. 

Take a look and you'll see three separate gangs: one blue, one green, one yellow. The gangs are assembled in pyramid-shaped hierarchies, with one leader at the top, two or three deputies at the next level, and so on.

A hand sticks out from each pyramid, pointing a gun directly at one of the others. It's clear. This is war.

And then Satya Nadella became CEO.

Nadella described the era of warring gangs in his 2017 memoir-manifesto, " Hit Refresh :" "Innovation was being replaced by bureaucracy. Teamwork was being replaced by internal politics. We were falling behind."

That particular cartoon – drawn in 2011 by a Google employee named Manu Cornet , no less – made changing Microsoft's culture Nadella's No. 1 goal as CEO.

"As a 24-year veteran of Microsoft, a consummate insider, the caricature really bothered me. But what upset me more was that our own people just accepted it," Nadella wrote. "When I was named Microsoft's third CEO in February 2014, I told employees that renewing our company's culture would be my highest priority."

Since becoming CEO, Nadella has been credited with a grand reinvention of Microsoft, exemplified by its market value exceeding $1 trillion, one of just a handful in history to hit that mark. When Nadella first took over, its market value was around $300 billion.

One of the keys to this transformation is a psychological concept that's become a mantra at Nadella's Microsoft: growth mindset . The concept has helped Microsoft made the shift to remote work with aplomb, reaching a market cap of more than $1.6 trillion, showing that Nadella's strategy has survived the pandemic intact.

Microsoft has traded a fixed mindset for a growth mindset

Growth mindset describes the belief that skills are developed through hard work and that challenges are opportunities to learn. Fixed mindset, on the other hand, refers to the belief that talent is innate and that struggling is a sign of failure. Research on the difference between growth and fixed mindset — and how they predict success — was pioneered by Stanford's Carol Dweck.

Early on in her career as a developmental psychologist, Dweck visited children at school and presented them with a series of increasingly difficult puzzles. Her goal was to better understand how people cope with failure. Some students, she found, weren't fazed by it.

In her 2006 book, " Mindset ," she recalls one 10-year-old boy who "pulled up his chair, rubbed his hands together, smacked his lips, and cried out, 'I love a challenge!'"

Dweck would spend the next five decades trying to figure out the difference between people who relish a good challenge and those who fear failure. Scores of studies published under her name suggest that people who see intelligence and abilities as learnable are more successful, personally and professionally, than people who think they're static.

Recently, Dweck coauthored a study that drew a link between growth mindset and organizational success . Employees who think their companies have a fixed mindset, the study found, interpret the company's culture as less collaborative, less ethical, and less willing to take risks than employees who think their companies have a growth mindset.

Given the rapid pace of technological change , these research findings are hyper-relevant. Across industries, adopting a growth mindset may be the only way to survive, and certainly the only way to thrive. When neither executives nor rank-and-file employees can predict what their jobs will look like next week, they need to embrace the resulting vulnerability, and get excited about learning.

Plenty of companies, in industries from telecommunications to early education, talk about cultivating a growth mindset , and about looking for job candidates who have it . But Microsoft is perhaps the most powerful example of an organization that has used growth mindset, and the psychology behind it, to rebuild its culture. 

In many ways, fixed mindset and growth mindset can describe Microsoft before and after Nadella. 

Nadella has encouraged Microsoft employees to be 'learn-it-alls' instead of 'know-it-alls'

Since the era of Bill Gates, Microsoft's founder and first CEO, its leadership had generally rewarded the smartest person in the room. And Microsoft performed well under Gates, but that performance came at a cost.

Gates was famous for meltdowns and browbeating – so much so that Microsoft cofounder Paul Allen once described working with Gates as "being in hell." Gates would only back down if you could convince him you knew what you were talking about, Allen said.

Gates' successor, Steve Ballmer, also known for an explosive temper, later presided over the atmosphere depicted in that cartoon Nadella was determined to address. Ballmer was known for cultivating a culture in which Microsoft teams warred with each other, as previously reported by Business Insider .

Nadella, who joined Microsoft as an engineer in 1992, came up in this culture, before becoming CEO in early 2014. 

By that point, the company's bid to compete in the smartphone market through the purchase of Nokia was proving to be a burden and would lead it to write off nearly the entire $7.6 billion acquisition price. The personal computer market was shrinking, leading to declines in Microsoft's flagship Windows operating system business, and the Xbox One console's poorly received launch made it a punchline.

Microsoft's history as a tech-industry pioneer wouldn't help the company compete, Nadella wrote in an email to employees on his first day as CEO. The company needed a change in mindset.

"Our industry does not respect tradition — it only respects innovation," Nadella wrote on Feb. 4, 2014,  in a memo to employees days after taking on the CEO role. "Every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this."

Nadella's leadership philosophy evolved into the adoption of a growth mindset. He asked employees to be "learn-it-alls," not "know-it-alls," and promoted collaboration inside and outside the organization. Employees are now evaluated partly on how much they've helped others on their team.

Microsoft introduced a new performance-management framework based on growth mindset

With any company culture shift, executives run the risk of promoting jargon more than action, and of HR representatives being the only ones who know there's a culture change underway.

Microsoft has tried to avoid that fate, not only by training its employees on the psychology of growth mindset, but also by embedding the concept into its daily work flow. 

Prompts to adopt a growth mindset appear on posters throughout Microsoft's campuses ( something at which employees sometimes poke fun ). At the start of a meeting, a manager might remind colleagues to approach an issue with a growth mindset.

And in one of the most significant manifestations of growth mindset, Microsoft has eliminated stack ranking .

Stack ranking was famously used by Jack Welch when he was CEO of General Electric. Ballmer used the system at Microsoft to evaluate employees, although he did start phasing it out prior to his departure. Microsoft managers had to rank their employees from one to five in equal measure. Which meant that, no matter how good the employees were, some of them had to get the lowest ranking of a five.

Performance was defined in stack ranking as the quality of individual work, and that emphasis on individual performance was linked to fierce competition among Microsoft employees. It was also a barrier to Microsoft's innovation, since it facilitated a culture that rewarded a few standout team members and even gave employees incentive to hope their colleagues failed. 

"We had a little bit of a 'not-invented-here' syndrome," Microsoft Chief People Officer Kathleen Hogan previously told Business Insider , referring to the tendency for developers and even organizations to reject acceptable solutions to problems if they hadn't developed those solutions themselves.

Dweck's research helps explain this trend, too. Her studies suggest that stack ranking's emphasis on "star" employees can leave everyone else afraid to try anything new, for fear of failing. In turn, that means companies are less innovative.

Microsoft leadership says its new system for evaluating employees instead rewards collaboration. Managers and employees meet often to discuss performance , in keeping with the general trend of companies nixing annual reviews and having managers regularly speak with employees about their work.

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"What we really value is three dimensions," said Hogan , Microsoft's chief people officer. "One is your own individual impact, the second is how you contributed to others and others' success, and the third is how you leveraged the work of others." 

To use Hogan's examples, maybe a more seasoned employee helped someone new to the team, or a software engineer built on another engineer's work instead of reinventing it. 

Microsoft recently applied growth mindset to a new framework for managers : model, coach, care. That's a combination of setting a positive example for employees, helping the team adapt and learn, and investing in people's professional growth.

To measure the impact of these initiatives in real time, Microsoft emails employees with a different question every day asking how they're feeling about the company and its culture.

The shift from competition to collaboration might seem like it would be a breath of fresh air. And on the whole, it has been. But employees say it's presented its own challenges, too.

Nadella pushes Microsoft executives to take on stretch assignments

Nadella asked Peter Lee , one of the company's top researchers, to make a big change.

It was 2017 and Lee – now corporate vice president of Microsoft healthcare – had long worked on broader technology problems as a key leader in Microsoft Research, the company's research division. 

Nadella wanted him to take on a new challenge and lead the company's emerging health care business, using his background in artificial intelligence and cloud computing to find new ways to tune the products to the needs of healthcare companies.

"Taking on healthcare was something that really perplexed me at first," he said. "I joked Satya sent me out into the Pacific Ocean and said, 'Go find land.'"

Adopting a growth mindset can be uncomfortable, he said. 

"Growth mindset is a euphemism because it can feel pretty painful, like a jump into the abyss," he said. "You need to be able and willing to confront your own fixed mindset – the things that make you believe something can't work. It's painful to go through personally, but when you get past it, it's tremendously rewarding."

The transition has been edifying, both in terms of his personal growth – Lee was recently named to the National Academy of Medicine – and Microsoft's growth in the industry, as it establishes itself as a meaningful player in healthcare tech. 

Microsoft now sees the business case for letting go of its rivalries with other tech giants

Under Ballmer, Microsoft was notorious for prioritizing its Windows operating system and Office productivity applications businesses over the rest of the company – at one point, it even canceled the Courier tablet, which would have been an early, future-looking competitor to Apple's iPad, because it may have undermined Windows.

Likewise, Microsoft once shunned Linux, a free open-source operating system once considered the biggest threat to Windows. Ballmer once called it a "cancer." But early on in Nadella's time as CEO, Microsoft changed tack and proclaimed, " Microsoft loves Linux ."

It wasn't just Microsoft being friendly. There was a strong business case for blurring boundaries. At the time, Microsoft said it realized its customers used both Windows and Linux, and saw providing support to both as a business opportunity on-premise and in the cloud. That would have been unthinkable in the Ballmer years, but it's proven to be a savvy business move: Microsoft recently hinted that Linux is more popular on its Azure cloud platform than Windows itself.

Microsoft's relationship with Salesforce has followed a similar trajectory. Whereas Ballmer had frequent and public bouts with Salesforce CEO Marc Benioff , Microsoft under Nadella put aside its rivalry with Salesforce – which competes directly with Microsoft's customer-relationship-management Dynamics 365 product – in order to ink a big cloud deal that was good for the company overall. 

Nadella even invites leaders from companies across industries to Microsoft's CEO Summit so the executives can learn from each other. Ballmer, meanwhile, famously snatched an employee's iPhone at a company meeting and pretended to stomp on it.

Which is not to say Microsoft always plays nice in the Nadella era. The company last summer changed licensing agreements to raise prices — often significantly — when customers choose to run certain Microsoft software on rival clouds including Amazon Web Services or Google Cloud. And it's been trading public barbs with AWS over the still contested $10 billion Pentagon cloud contract.

The Trump administration awarded the contract to Microsoft over AWS, but Amazon is challenging the decision in court, alleging political interference. The Pentagon in September upheld its decision to award the contract to Microsoft but AWS is expected to file a new complaint as part of the lawsuit next week.

The culture shift at Microsoft is an ongoing process

The beginning of Microsoft's culture shift was rocky.

In "Hit Refresh," Nadella recalls a Microsoft manager who announced in the early days, "Hey, Satya, I know these five people who don't have a growth mindset." Nadella writes, "The guy was just using growth mindset to find a new way to complain about others. That is not what we had in mind."

Even today, Microsoft leaders acknowledge that the culture change isn't over . Things have improved under Nadella, but the company culture is still far from perfect.

Diversity is an opportunity for improvement at Microsoft. Much like the larger technology industry , Microsoft still employs relatively few women and people of color in leadership and technical roles.

One of Nadella's biggest gaffes as CEO happened early on in his tenure, when he suggested women should not ask for raises, but rely on "faith" and "karma." After these comments, Nadella sent out an internal memo admitting to his mistake, explaining how he planned to learn from it, and stating his belief in "equal pay for equal work." 

Nadella writes in "Hit Refresh" that in some ways he's glad to have belly-flopped in public. "It helped me confront an unconscious bias I didn't know I had," Nadella writes, "and it helped me find a new sense of empathy for the great women in my life and at my company." 

Kevin Oakes, who runs a human-resources research company that helped Microsoft with its shift toward growth mindset, sees Nadella as an exemplar of a leader during a transition. That's largely because Nadella practices the growth mindset he preaches. In a presentation at Talent Connect, an annual conference organized by LinkedIn (which is owned by Microsoft), Oakes said Nadella has been Microsoft's "culture champion." Nadella understands that organizational culture is critical to the company's performance, Oakes said.

But today's Microsoft is still far from perfect. The positive contributions of growth mindset have not yet matched up with diversity and equity for Microsoft's workforce, according to some employees. Microsoft is the subject of a gender discrimination lawsuit still pending , which was denied class-action status by a federal judge. Employees have also openly alleged sexual harassment and discrimination.

The company released its first diversity and inclusion report in 2019 to track its progress in hiring — and retaining — a more diverse workforce. Results from that report showed that minorities in Microsoft's US offices earned $1.006 for every $1 white employees earned. A closer look reveals that white men still held more high-paying leadership positions than women or underrepresented minorities.

Microsoft has since announced plans to double the number of Black leaders and employees within the company, and the number of Black suppliers with which it works.

Meanwhile, Microsoft leadership still has some philosophical differences with employees as it relates to employee activism. Employee groups have protested Microsoft and Microsoft-owned GitHub's relationship with Immigration and Customs Enforcement, and some employees have said Microsoft's relationship with oil and gas companies is at odds with the company's goal to become "carbon negative" by 2030. 

Some Microsoft employees say the company is making progress. Rich Neal, a senior director who's been with the company since 2003, recalled a recent meeting in which a male colleague all but repeated the same comment a female colleague had shared 15 minutes earlier.

At that point, Neal recalled, a third meeting participant addressed the male colleague to ask whether perhaps he hadn't understood the female colleague's point. And Neal said it wasn't a passive-aggressive attack. Senior leaders are encouraged to "be curious and ask questions, versus making statements," as a way of modeling growth mindset, he added.

Microsoft has been equally vocal about diversity and inclusion within its customer base, building products that are accessible to as many users as possible. Ben Tamblyn, a 15-year company veteran and Microsoft's director of inclusive design, mentioned Xbox as a prime example. In 2018, Microsoft released the Xbox Adaptive Controller , which makes it easier for gamers who have limited mobility or physical impairments to play. (Interviews with Neal and Tamblyn were arranged by Microsoft's public-relations firm.)

Microsoft is a case study in growth mindset

Microsoft's culture shift, and its accompanying business turnaround, is already a case study in business schools and in reports from management consultancies and research centers . That makes sense to Mary Murphy, a professor of psychological and brain sciences at Indiana University and Dweck's co-author on the paper about growth mindsets within organizations. 

Growth mindset is essential for innovation in the technology industry, Murphy said, where change rarely happens incrementally. Instead, there are big inflection points from which there's no return. Microsoft, Murphy added, needs to be on the "cutting edge" of growth mindset in order to stay relevant.

Nadella, for his part, has modeled a growth mindset from the top of the organization, not least in his response to his tone-deaf comments about gender and compensation. "I learned, and we will together use this learning to galvanize the company for positive change," Nadella wrote in the memo he sent apologizing for the comments. "We will make Microsoft an even better place to work and do great things."

Got a tip? Contact reporters Shana Lebowitz via email at [email protected] and Ashley Stewart via email at [email protected] , message her on Twitter @ashannstew, or send her a secure message through Signal at 425-344-8242 .

Watch: Microsoft News' corporate vice president explains how his team avoids fake news sorting through 170,000 stories a day

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How Microsoft Became Innovative Again

• Behnam Tabrizi

Inside the cultural turnaround that helped the tech giant think like a startup.

How did Microsoft revive its culture of innovation? For years, the company has been written off for playing defense on its position in the tech world. But, as signaled by its partnership with OpenAI and its challenge to Google’s search supremacy, it has gone back on the offense. The about face was, at its core, a cultural shift, driven by CEO Satya Nadella. He drove this by inviting an existential moment when he stepped into the job, reconsidering the company’s purpose. Then, he laid out strategic changes that would enable the company to think more like a startup, and made business decisions that committed the company to this new direction.

For years now, observers of tech have written off Microsoft as a 20th-century phenomenon, fat and happy from its Windows monopoly. The tech giant hadn’t had a breakthrough innovation in decades. It was rich enough to be a fast follower, but too big and bureaucratic to lead in any market. Jeff Bezos was known to gesture east and admonish his Amazon colleagues not to become complacent like their Seattle neighbor.

• BT Behnam Tabrizi has been teaching “Leading Organizational Transformation” at Stanford University’s Department of Management Science and Engineering and executive programs for more than 25 years. An expert in organizational and leadership transformation, he has helped thousands of CEOs and leaders plan, mobilize, and implement innovative transformational initiatives. He has written ten books, most recently  Going on Offense : A Leader’s Playbook for Perpetual Innovation  (IdeaPress Publishing, August 2023). TabriziBehnam

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Suncorp NZ transforms its way of working with effective change management

Apr 27, 2022  |   Microsoft New Zealand News Centre

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Change can be scary. As humans we love familiarity and comfort, and that often includes the technology we use. However, when ways of working and business innovations are shifting the landscape faster than ever, outdated systems can’t provide the kind of experience customers and workers deserve. Leading insurance provider Suncorp New Zealand knew using Skype as a system for communication was no longer suitable and it needed to transition to a new communications system in a way its people would welcome and embrace the change. Tech change experts Kambium came on board to support tech partner Spark with a change management programme for Microsoft Teams that was so successful, it’s now helping transform Suncorp New Zealand’s way of working.

As one of New Zealand’s leading general and life insurance providers (Vero and Asteron Life brands), great communication and seamless information-sharing are essential to Suncorp New Zealand’s success. The purpose-led organisation is ‘customer-obsessed’ and aims to ensure its employees have access to the best tools possible so that every effort can be concentrated on assisting and responding to customers. That takes superb co-ordination in the back end, with all of Suncorp New Zealand’s team members across the country having access to the right information wherever and whenever they need it.

These days, that means equipping people with the tools they need to work – and collaborate – remotely. However, Suncorp New Zealand was experiencing challenges with its outdated Skype communications platform. Skype had limited functionality, being more of a videoconferencing tool rather than enabling real collaboration or easy integration with other business platforms, as today’s workers need. It also wasn’t particularly secure or reliable, no longer being supported with regular security updates and prone to dropping out on calls.

Despite this, it was familiar and comfortable for people who’d been using it a long time, like a pair of old shoes. This created its own challenges when Suncorp New Zealand decided to replace Skype with the cloud-based Microsoft Teams.

“The beauty of Microsoft Teams is that it is more than just a videoconferencing platform. It’s a collaboration hub and information management platform that provides your team with so many more ways of working. Teams has been proven to increase productivity, collaboration and create more meaningful engagements between colleagues,” says Hayley Thow, Chapter Lead – Client Leads, Spark Business Group Sales.

“However, while Skype was restrictive in what it could deliver for employees, there was an underlying sense of resistance to change. Employees were comfortable with what they knew. Some people didn’t want to learn a new platform, but most didn’t want their day-to-day job to be disrupted by the shifting technology,” adds Haider Khan, Head of Professional Services at digital transformation and change management consultancy Kambium.

“This is where we recognised that the job at hand wasn’t just a tech transformation, it was so much more than that. Before we could start the tech implementation process, a whole change management process needed to happen first.”

Making people part of the solution

It was lead tech partner Spark who recommended Kambium for the job of supporting Suncorp New Zealand’s people through the revamp. Having collaborated on many projects before, the Spark team recognised the power of Kambium’s specialist experience in understanding the psychology of change and bringing people along on the tech transformation journey.

For Microsoft Teams to provide the best results for Suncorp New Zealand, it was essential to ensure employees were part of the solution, rather than just being told how things were going to be done. To do this, Kambium was directly involved with the Change Champion Network, a group of 40 Suncorp New Zealand employees across each business area who became early adopters of the Teams platform.

The Change Champion members were an integral part of the change management programme. The members were chosen for being people who had cultural influence in the business. While they weren’t necessarily the most technologically savvy, they were directly involved with the operations of their business area day-to-day and were therefore able to provide key insights and feedback into how best to train the wider team and how to present information to get the best engagement possible.

Over six months, the Change Champions were part of the Teams pilot group for first-hand experience of the solution. This provided the Champions with the opportunity to trial the Teams solution to understand how the platform worked, ask questions, and understand how their BAU and project teams could use Teams most effectively. The Change Champion network met on a weekly basis throughout the project, attended training pilots, participated at go-live, and were instrumental in helping Kambium design a communications plan and the full training programme.

An organisation-wide first

Thanks to such a thorough change management process, employees started to adapt to the ins and outs of Teams easily. They were eager to learn as much as they could, they showed enthusiasm for the tools, and used Teams break-out rooms within the first week, something that often takes months to see.

Feedback received was incredible, with employees feeling supported and reassured throughout the process from initial training to implementation. People noted this was the first-time technological changes had been implemented in such a seamless way.

“The change programme took a people-first approach. By engaging with individuals across the business, understanding their ways of working and how Teams could best support them, we were able to bring Suncorp New Zealand employees on the transformation journey. Key measures of success were high training participation, communications readership, and commitment of the change champions throughout the project. It has been rewarding to experience the immediate uptake and positive response to Teams as well as the team’s eagerness to utilise the breadth of Microsoft applications,” says Caitlin Boorman, Practice Lead Adoption and Change Management at Kambium.

Suncorp Executive Manager Infrastructure and Operations, Mark Atherton, is equally enthusiastic about the transformation Kambium and Spark have created at the organisation.

“When you’re investing in a new platform or technology, firstly it’s essential that it’s fit for purpose and delivers a more effective way of working for employees, then it’s about ensuring employees are transitioned across in a positive way so they can understand the need for change and can see the value and benefits. Ultimately, if it’s the right platform and introduced with minimal disruption, this has positive flow-on effects to the business and customers,” he says.

“Understanding the capability of the new platform and the options available is key so employees can get the most from their Teams experience, and this is what has made the implementation of this project such an outstanding success. Many of our employees were hybrid working long before the Covid-19 pandemic, however, most have been working full-time from home since the August lockdown. Microsoft Teams has enhanced this vital virtual experience for all of us and has been more reliable, keeping us better connected at a time when it’s needed most.

“Teams has also made it easy for our employees to find and access shared team documents, and enabled breakout rooms and the sharing of a video while on Teams meeting calls. I know employees have also enjoyed personalising their backdrops for some light entertainment too.”

This approach will be key to helping upskill New Zealand’s workers in technology across every sector to address skills shortages and build innovation, according to Matt Bostwick, Partner Director at Microsoft New Zealand.

“Businesses are increasingly realising that investments in tech are an investment in their people, and that just as technology has become more human-centric, tech implementation processes must do the same. I’m delighted to see Kambium and Spark partnering in this way to support more Kiwi businesses to get more out of their IT services and solutions,” he says.

“If we’re fast becoming a world where everyone needs tech skills, understanding what motivates people to adopt skills and technologies has never been more important.”

An ongoing transformation partnership

After the success of the Teams deployment, which builds on previous successful tech implementations, Spark’s relationship with Suncorp New Zealand is gathering even further momentum, with a raft of additional projects in the pipeline over the coming months.

Kambium and Spark will support Suncorp New Zealand with an ongoing change management service in the coming year as the company’s way of working becomes more agile. This will mean driving further adoption of new Microsoft tools and services as Suncorp New Zealand continues to refine and enhance its ways of working for employees, which will be supported by the rollout of Surface devices to enable improved flexible working.

“The future is really looking bright, and we’re absolutely thrilled to be continuing our relationship with Suncorp New Zealand. We’re really becoming an extension of their team, and I think that’s what a true relationship is,” says Haider.

“Watch this space!”

Tags: case studies , change management , Kambium , Spark , Suncorp

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Microsoft 365 change management

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Microsoft 365 enforces change management procedures when both code and non-code changes to its systems are made to maintain its security posture. Any configuration drift from the initial posture can introduce vulnerabilities, break functionality, or disrupt availability. Once an information system within Microsoft 365 has been deployed with a robust security posture, detailed change management processes are enforced to maintain system integrity.

There are many drivers of change in Microsoft 365, including new functional or security requirements, feedback from customers, identified vulnerabilities, and audit findings. Regardless of the driver for change, service teams use ticketing or source control tools to document evidence of approval and track all changes.

Source code changes

Changes are deployed through Microsoft's Secure Development Lifecycle (SDL), which is followed by all engineering and development projects in Microsoft 365. This is a software development model that includes specific security considerations related to code reviews, tests, and approvals before they're systematically released into the Microsoft 365 environment.

The SDL acts as a framework and includes the identification of possible risks to the finished development project and mitigation strategies that can be implemented and tested during the development phases. Critical security review and approval checkpoints are included as well.

Change identification and planning

Service teams meet regularly to discuss proposed changes, including justification, scope, security impact, priority, dependencies, deployment plans, roles, and responsibilities. This information is documented in the change management tracking system. If the change is rejected, the justification is explicitly documented in the ticket for future reference.

Personnel code reviews

Developers tasked with implementing a code change submit a pull request that replicates the main branch's code, allowing them to make necessary modifications. Before any new code can be included in a new build and deployed, it must pass personnel code review. Enforcement of these reviews is handled through an automated code pipeline attached to each code repository and can't be circumvented. Once the required approval is received, the code can move on to the next phase.

Code reviewers check for coding errors, verify that the changes meet the requirements, and perform a security impact analysis. Reviews must be conducted by someone other than the people who developed the code, enforcing the principle of separation of duties. Preventing the same people from submitting and approving their own code is a critical control that Microsoft strictly enforces. This greatly reduces the possibility of people single-handedly releasing, either intentionally or unintentionally, harmful, or buggy code. If reviewers find problems during the code review, they halt the change, and have developers resubmit the code with suggested changes and additional testing. Code reviewers may also decide to reject check-in entirely for code that doesn't meet the identified requirements. Once the code is deemed satisfactory by the reviewer, approval is provided, and the code is checked into the main branch as a commit.

Automated build pipeline and security checks

Once all changes for the sprint are committed to the main branch, the automated build process begins. This is where the code is subjected to various automated security checks. These checks include static code analysis, binary analysis, and encryption scanning. Microsoft 365 defines a set of essential tests that each build must pass prior to deployment to pre-production environments. Builds that don't pass are rejected and sent back to the development team where the necessary adjustments are made until they can reach the threshold pass rate. Successful builds proceed to the pre-production environment via an automated deployment pipeline.

Build release

Builds are initially released to only the service team that developed the feature. It must function without issue before being released to progressively larger test groups in logically isolated cloud environments called rings. After the service team, the build is released to all internal Microsoft 365 groups, followed by release of the build to all internal Microsoft groups. This testing, often referred to internally as dogfooding , allows Microsoft to identify bugs in the true production environment prior to the build being released to external customers. These testing methods ensure Microsoft's code is secure and functioning as expected before it reaches customers and worldwide deployment. Previous builds are always retained for rollback purposes.

The engineering teams determine the amount of time a build spends in each ring during high load periods before proceeding to the next ring. If all testing is successful in each internal ring, the build is released to customers worldwide, first as a Targeted Release to customer tenants who have opted into that ring, followed by a Worldwide Standard Release.

Non-code changes

Non-code changes are defined as any modifications to Microsoft 365 systems that don't involve creating or editing service source code. This can include the opening of ports, changing of Access Control Lists (ACLs), or other changes to the underlying system. In comparison, non-code changes occur less frequently than code changes but still require a high level of scrutiny.

A description of the change is documented along with implementation steps, validation steps, and a rollback plan. Before the change is implemented, the plans are peer reviewed for accuracy and security impact by at least one person. Once approved, the documented plans are implemented. If all validation steps successfully pass, the results are documented in the ticket, and it's marked as resolved.

If the implementation of the change is unsuccessful, the rollback plans are triggered, and the team returns to the planning phase and repeats the process until successful.

• Microsoft 365 change guide - Deploy Office

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CASE STUDY: How Satya Nadella overhauled Microsoft's cutthroat culture and turned it into a trillion-dollar 'growth mindset' company

Lehtikuva, Markku Ulander/AP Photo; Yuri Gripas/Reuters; Fabrizio Bensch/Reuters; Ruobing Su/Business Insider

Satya Nadella is the CEO of Microsoft. Steve Ballmer and Bill Gates are the former CEOs.

• Microsoft is a trillion-dollar company thanks largely to a culture shift led by Satya Nadella.
• Since Nadella became CEO in 2014, he's encouraged the entire company to adopt a growth mindset, or the belief that skills are developed through hard work and challenges are opportunities to learn.
• Before Nadella took over, Microsoft was characterized by competition between teams and between individual employees.
• Now, in keeping with a growth mindset, Microsoft evaluates employees' performance based partly on how much they helped their colleagues succeed. The company also looks to learn from its former rivals in the tech industry.
• Business Insider spoke with a range of company insiders and organizational researchers to get the inside story on how to change the culture of a 150,000+ employee software giant.
• Microsoft is a case study in how a growth-mindset culture can help companies succeed in the future economy.
• Click here for more BI Prime content.

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A cartoonist once drew an illustration depicting Microsoft's organizational chart as warring factions.

Take a look and you'll see three separate gangs: one blue, one green, one yellow. The gangs are assembled in pyramid-shaped hierarchies, with one leader at the top, two or three deputies at the next level, and so on.

A hand sticks out from each pyramid, pointing a gun directly at one of the others. It's clear. This is war.

And then Satya Nadella became CEO.

Nadella described the era of warring gangs in his 2017 memoir-manifesto, " Hit Refresh :" "Innovation was being replaced by bureaucracy. Teamwork was being replaced by internal politics. We were falling behind."

That particular cartoon - drawn in 2011 by a Google employee named Manu Cornet , no less - made changing Microsoft's culture Nadella's No. 1 goal as CEO.

"As a 24-year veteran of Microsoft, a consummate insider, the caricature really bothered me. But what upset me more was that our own people just accepted it," Nadella wrote. "When I was named Microsoft's third CEO in February 2014, I told employees that renewing our company's culture would be my highest priority."

Since becoming CEO, Nadella has been credited with a grand reinvention of Microsoft, exemplified by its market value exceeding $1 trillion, one of just a handful in history to hit that mark. When Nadella first took over, its market value was around $300 billion. The company has shifted from a has-been to a cloud powerhouse.

One of the keys to this transformation is a psychological concept that's become a mantra at Nadella's Microsoft: growth mindset .

Microsoft has traded a fixed mindset for a growth mindset

Growth mindset describes the belief that skills are developed through hard work and that challenges are opportunities to learn. Fixed mindset, on the other hand, refers to the belief that talent is innate and that struggling is a sign of failure. Research on the difference between growth and fixed mindset - and how they predict success - was pioneered by Stanford's Carol Dweck.

Early on in her career as a developmental psychologist, Dweck visited children at school and presented them with a series of increasingly difficult puzzles. Her goal was to better understand how people cope with failure. Some students, she found, weren't fazed by it.

In her 2006 book, " Mindset ," she recalls one 10-year-old boy who "pulled up his chair, rubbed his hands together, smacked his lips, and cried out, 'I love a challenge!'"

Dweck would spend the next five decades trying to figure out the difference between people who relish a good challenge and those who fear failure. Scores of studies published under her name suggest that people who see intelligence and abilities as learnable are more successful, personally and professionally, than people who think they're static.

Recently, Dweck coauthored a study that drew a link between growth mindset and organizational success . Employees who think their companies have a fixed mindset, the study found, interpret the company's culture as less collaborative, less ethical, and less willing to take risks than employees who think their companies have a growth mindset.

Given the rapid pace of technological change , these research findings are hyper-relevant. Across industries, adopting a growth mindset may be the only way to survive, and certainly the only way to thrive. When neither executives nor rank-and-file employees can predict what their jobs will look like next week, they need to embrace the resulting vulnerability, and get excited about learning.

Plenty of companies, in industries from telecommunications to early education, talk about cultivating a growth mindset , and about looking for job candidates who have it . But Microsoft is perhaps the most powerful example of an organization that has used growth mindset, and the psychology behind it, to rebuild its culture.

In many ways, fixed mindset and growth mindset can describe Microsoft before and after Nadella.

Nadella has encouraged Microsoft employees to be 'learn-it-alls' instead of 'know-it-alls'

Gates' successor, Steve Ballmer, also known for an explosive temper, later presided over the atmosphere depicted in that cartoon Nadella was determined to address. Ballmer was known for cultivating a culture in which Microsoft teams warred with each other, as previously reported by Business Insider .

Nadella, who joined Microsoft as an engineer in 1992, came up in this culture, before becoming CEO in early 2014.

By that point, the company's bid to compete in the smartphone market through the purchase of Nokia was proving to be a burden and would lead it to write off nearly the entire $7.6 billion acquisition price. The personal computer market was shrinking, leading to declines in Microsoft's flagship Windows operating system business, and the Xbox One console's poorly received launch made it a punchline.

Microsoft's history as a tech-industry pioneer wouldn't help the company compete, Nadella wrote in an email to employees on his first day as CEO. The company needed a change in mindset.

"Our industry does not respect tradition - it only respects innovation," Nadella wrote on Feb. 4, 2014, in a memo to employees days after taking on the CEO role. "Every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this."

Nadella's leadership philosophy evolved into the adoption of a growth mindset. He asked employees to be "learn-it-alls," not "know-it-alls," and promoted collaboration inside and outside the organization. Employees are now evaluated partly on how much they've helped others on their team.

Microsoft introduced a new performance-management framework based on growth mindset

With any company culture shift, executives run the risk of promoting jargon more than action, and of HR representatives being the only ones who know there's a culture change underway.

Microsoft has tried to avoid that fate, not only by training its employees on the psychology of growth mindset, but also by embedding the concept into its daily work flow.

Prompts to adopt a growth mindset appear on posters throughout Microsoft's campuses ( something at which employees sometimes poke fun ). At the start of a meeting, a manager might remind colleagues to approach an issue with a growth mindset.

And in one of the most significant manifestations of growth mindset, Microsoft has eliminated stack ranking .

Stack ranking was famously used by Jack Welch when he was CEO of General Electric. Ballmer used the system at Microsoft to evaluate employees, although he did start phasing it out prior to his departure. Microsoft managers had to rank their employees from one to five in equal measure. Which meant that, no matter how good the employees were, some of them had to get the lowest ranking of a five.

Performance was defined in stack ranking as the quality of individual work, and that emphasis on individual performance was linked to fierce competition among Microsoft employees. It was also a barrier to Microsoft's innovation, since it facilitated a culture that rewarded a few standout team members and even gave employees incentive to hope their colleagues failed.

Microsoft leadership says its new system for evaluating employees instead rewards collaboration. Managers and employees meet often to discuss performance , in keeping with the general trend of companies nixing annual reviews and having managers regularly speak with employees about their work.

"What we really value is three dimensions," said Hogan , Microsoft's chief people officer. "One is your own individual impact, the second is how you contributed to others and others' success, and the third is how you leveraged the work of others."

To use Hogan's examples, maybe a more seasoned employee helped someone new to the team, or a software engineer built on another engineer's work instead of reinventing it.

Microsoft recently applied growth mindset to a new framework for managers : model, coach, care. That's a combination of setting a positive example for employees, helping the team adapt and learn, and investing in people's professional growth.

To measure the impact of these initiatives in real time, Microsoft emails employees with a different question every day asking how they're feeling about the company and its culture.

The shift from competition to collaboration might seem like it would be a breath of fresh air. And on the whole, it has been. But employees say it's presented its own challenges, too.

Nadella pushes Microsoft executives to take on stretch assignments

Adopting a growth mindset can be uncomfortable, he said.

"Growth mindset is a euphemism because it can feel pretty painful, like a jump into the abyss," he said. "You need to be able and willing to confront your own fixed mindset - the things that make you believe something can't work. It's painful to go through personally, but when you get past it, it's tremendously rewarding."

The transition has been edifying, both in terms of his personal growth - Lee was recently named to the National Academy of Medicine - and Microsoft's growth in the industry, as it establishes itself as a meaningful player in healthcare tech.

Microsoft now sees the business case for letting go of its rivalries with other tech giants

Under Ballmer, Microsoft was notorious for prioritizing its Windows operating system and Office productivity applications businesses over the rest of the company - at one point, it even canceled the Courier tablet, which would have been an early, future-looking competitor to Apple's iPad, because it may have undermined Windows.

Likewise, Microsoft once shunned Linux, a free open-source operating system once considered the biggest threat to Windows. Ballmer once called it a "cancer." But early on in Nadella's time as CEO, Microsoft changed tack and proclaimed, " Microsoft loves Linux ."

It wasn't just Microsoft being friendly. There was a strong business case for blurring boundaries. At the time, Microsoft said it realized its customers used both Windows and Linux, and saw providing support to both as a business opportunity on-premise and in the cloud. That would have been unthinkable in the Ballmer years, but it's proven to be a savvy business move: Microsoft recently hinted that Linux is more popular on its Azure cloud platform than Windows itself.

Microsoft's relationship with Salesforce has followed a similar trajectory. Whereas Ballmer had frequent and public bouts with Salesforce CEO Marc Benioff , Microsoft under Nadella put aside its rivalry with Salesforce - which competes directly with Microsoft's customer-relationship-management Dynamics 365 product - in order to ink a big cloud deal that was good for the company overall.

Nadella even invites leaders from companies across industries to Microsoft's CEO Summit so the executives can learn from each other. Ballmer, meanwhile, famously snatched an employee's iPhone at a company meeting and pretended to stomp on it.

Which is not to say Microsoft always plays nice in the Nadella era. The company last summer changed licensing agreements to raise prices - often significantly - when customers choose to run certain Microsoft software on rival clouds including Amazon Web Services or Google Cloud. And it's been trading public barbs with AWS over the still contested $10 billion Pentagon cloud contract.

The Trump administration awarded the contract to Microsoft over AWS, but Amazon is challenging the decision in court, alleging political interference. In February, a judge ruled that Microsoft must stop working on the contract.

The culture shift at Microsoft is an ongoing process

The beginning of Microsoft's culture shift was rocky.

In "Hit Refresh," Nadella recalls a Microsoft manager who announced in the early days, "Hey, Satya, I know these five people who don't have a growth mindset." Nadella writes, "The guy was just using growth mindset to find a new way to complain about others. That is not what we had in mind."

Even today, Microsoft leaders acknowledge that the culture change isn't over . Things have improved under Nadella, but the company culture is still far from perfect.

Diversity is an opportunity for improvement at Microsoft. Much like the larger technology industry , Microsoft still employs relatively few women and people of color in leadership and technical roles.

One of Nadella's biggest gaffes as CEO happened early on in his tenure, when he suggested women should not ask for raises, but rely on "faith" and "karma." After these comments, Nadella sent out an internal memo admitting to his mistake, explaining how he planned to learn from it, and stating his belief in "equal pay for equal work."

Nadella writes in "Hit Refresh" that in some ways he's glad to have belly-flopped in public. "It helped me confront an unconscious bias I didn't know I had," Nadella writes, "and it helped me find a new sense of empathy for the great women in my life and at my company."

Kevin Oakes, who runs a human-resources research company that helped Microsoft with its shift toward growth mindset, sees Nadella as an exemplar of a leader during a transition. That's largely because Nadella practices the growth mindset he preaches. In a presentation at Talent Connect, an annual conference organized by LinkedIn (which is owned by Microsoft), Oakes said Nadella has been Microsoft's "culture champion." Nadella understands that organizational culture is critical to the company's performance, Oakes said.

But today's Microsoft is still far from perfect. The positive contributions of growth mindset have not yet matched up with diversity and equity for Microsoft's workforce, according to some employees. Microsoft is the subject of a gender discrimination lawsuit still pending , which was denied class-action status by a federal judge. Employees have also openly alleged sexual harassment and discrimination.

The company released its first diversity and inclusion report in 2019 to track its progress in hiring - and retaining - a more diverse workforce. Results from that report showed that minorities in Microsoft's US offices earned $1.006 for every $1 white employees earned. A closer look reveals that white men still held more high-paying leadership positions than women or underrepresented minorities.

Meanwhile, Microsoft leadership still has some philosophical differences with employees as it relates to employee activism. Employee groups have protested Microsoft and Microsoft-owned GitHub's relationship with Immigration and Customs Enforcement, and more recently, some employees have said Microsoft's relationship with oil and gas companies is at odds with the company's goal to become "carbon negative" by 2030.

Microsoft has been equally vocal about diversity and inclusion within its customer base, building products that are accessible to as many users as possible. Ben Tamblyn, a 15-year company veteran and Microsoft's director of inclusive design, mentioned Xbox as a prime example. In 2018, Tamblyn helped oversee the release of the Xbox Adaptive Controller , which makes it easier for gamers who have limited mobility or physical impairments to play. (Interviews with Neal and Tamblyn were arranged by Microsoft's public-relations firm.)

Microsoft is a case study in growth mindset

Microsoft's culture shift, and its accompanying business turnaround, is already a case study in business schools and in reports from management consultancies and research centers . That makes sense to Mary Murphy, a professor of psychological and brain sciences at Indiana University and Dweck's co-author on the paper about growth mindsets within organizations.

Growth mindset is essential for innovation in the technology industry, Murphy said, where change rarely happens incrementally. Instead, there are big inflection points from which there's no return. Microsoft, Murphy added, needs to be on the "cutting edge" of growth mindset in order to stay relevant.

Nadella, for his part, has modeled a growth mindset from the top of the organization, not least in his response to his tone-deaf comments about gender and compensation. "I learned, and we will together use this learning to galvanize the company for positive change," Nadella wrote in the memo he sent apologizing for the comments. "We will make Microsoft an even better place to work and do great things."

Got a tip? Contact reporters Shana Lebowitz via email at [email protected] and Ashley Stewart via email at [email protected] , message her on Twitter @ashannstew, or send her a secure message through Signal at 425-344-8242 .

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