The Compassionate CEO

admin@91springboard.comCoworking, Culture, Management6 Comments

Satya Nadella, CEO of Microsoft from 2014 to present

In 2014, Satya Nadella took over as only the third CEO of Microsoft, after Bill Gates and Steve Ballmer. He was an unexpected choice; not many people outside tech circles had even heard of him. A soft-spoken man, when Microsoft’s Board of Directors asked if he would like to be CEO, Nadella is said to have responded, “only if you want me to”. After the likes of Uber’s Travis Kalanick, Facebook’s Mark Zuckerberg, and Nadella’s own predecessor at Microsoft, Steve Ballmer; Nadella’s demeanour and philosophy is diametrically opposed to the existing paradigm of the hyper-competitive, hyper-aggressive, and somewhat ethically flexible Silicon Valley CEO. The reason for this, according to Nadella himself, is his belief in being empathetic and compassionate to his employees, his peers, and perhaps most importantly, his customers.

Boardroom Bullies

A CEO is expected to display a wide range of skills, from being technically astute enough to understand their product to possessing enough business acumen to gauge the market and try and plot what direction is the industry moving towards. Empathy is not often discussed as one of the qualities necessary to make a successful CEO, and even if it is, the discussion is cursory and quickly wrapped up within the larger framework of people management. In some cases, people might have even interpreted empathy as a negative trait for a leader to possess. Former CEO of GE and author of best-selling books on management, Jack Welch, is famous, or possibly infamous, for his idea of ‘radical candor’; believing that managers in particular need to be aggressive and brutally honest, lest it breeds complacency and mediocrity. However, despite earning scorn for laying off thousands of employees in a drive to make GE more lean and efficient, Welch was nevertheless instrumental in ensuring they were treated well while being laid off, arguing with the board for increased severance pay. Yet, looking around at modern-day entrepreneurs, there is a distinct feeling that empathy and goodness are not values that most companies believe in anymore, or at the very least, are not values that most CEOs believe in anymore.

Over the last few years, twenty-first century industry giants like Facebook and Uber have been repeatedly called out for patterns of unethical behaviour with daily reports of sexual harassment, racism, gender discrimination, and classism somehow becoming the norm in some startup circles. As the idea of the insufferable genius slowly crystallized in Silicon Valley folklore; from Steve Jobs’ infamous outbursts at his team at Apple to Mark Zuckerberg’s ‘I’m CEO, bitch’ visiting cards, and ‘Pharma-bro’ Martin Shkreli’s unrepentant greed, the culture around startups has changed. The idea that entrepreneurs and Silicon Valley startups were places filled with sometimes socially awkward but extremely clever tinkerers has been replaced with the belief that leading executives in modern day businesses, particularly entrepreneurs, are unsympathetic, emotionally vacant monsters, to the extent that there was entire panel at SXSW 2017 dedicated to the problem of ‘Psychopaths in Silicon Valley’.

Bodhisattva Businessman

In his 2017 book, Hit Refresh, Microsoft CEO Satya Nadella talks extensively about the Buddha, with many passages sounding more like koans in the Zen philosophical tradition than the cold, hard strategy and business-oriented wisdom one usually finds in books authored by successful executives and management gurus. This is perhaps understandable, for in a strange way, Nadella’s life follows in the tradition of many Buddhist parables about great men being humbled and finding their salvation thence.

In 1996, Satya Nadella was another in a long line of Indian-born software engineers working for Microsoft. That year, the 29-year-old Nadella and his wife Anupama welcomed their first child, Zain Nadella. Due to complications in the pregnancy, however, Zain was born with cerebral palsy. In his book, Nadella describes how this supposed tragedy ended up becoming what he calls, ‘a watershed moment’ in his life. Nadella is brutally honest when describing how he felt when his son was diagnosed and he realized that Zain will be a special needs child. In an interview on the Freakonomics podcast, Nadella talked about how, “for multiple years I struggled with it: Why did this happen to me? Why were my plans thrown out the window?” Salvation came in the form of his wife, Anupama, who quit her career to care for their son. Nadella recounts how witnessing her patience and grace led to him re-evaluating what had really happened; “Nothing happened to me, something happened to Zain. And I had to step up and be the parent and the father.” Much like the Buddha leaving his palace to discover misery, suffering, and death; or like Emperor Ashoka witnessing the chaos and destruction of war, this transformation was the key to Nadella understanding a profound truth, that empathy is the key to not just being a good human being, but also to being a good CEO.

Martin Shkreli, who gained infamy for increasing the price of an anti-malaria and AIDS drug by 5,500%

Nice Guys Finish First

Prior to Nadella’s appointment as CEO, Microsoft was rapidly losing its hitherto dominant position in the industry to ascendant competitors such as Apple and Google. Following the Dot Com bubble of the late 90s, Microsoft’s stock had fallen massively, from a high of $58 in December 1999 to $24 just a year later. Throughout the 2000s, as Apple underwent its resurgence as a consumer electronics giant, as Google revolutionized search and email to basically shape the internet in their own image, and as the power of mobile and social media began to truly dominate; Microsoft appeared to be more busy fighting themselves rather than the competition. This dysfunction in Microsoft’s ranks was represented in their stock price, which hovered in the same price bracket for over a decade. Between 2000 and 2013, Microsoft stock peaked at only $37 in November 2007, with an abysmal low of $15 in March 2009, on the back of the Great Recession. The tech media was abuzz with stories of how the culture at Microsoft had turned resentful and combative, and that the company was circling the drain. When Steve Ballmer announced his decision to step down as CEO, Bloomberg responded with a piece titled, “Why You Don’t Want to Be Microsoft’s CEO.”

After his appointment in February 2014, one of the first things Nadella did was ask Microsoft’s top management to read Marshall Rosenberg’s book on empathy and collaboration, Nonviolent Communication. A few months later, Nadella was in San Francisco, where he took the stage at Dreamforce ‘14, a tech conference organized by Salesforce, which had been billed as the biggest tech event ever up to that point. In front of tens of thousands of attendees and every major media outlet in the world, Nadella walked up to the stage with the latest iPhone, to showcase how Microsoft’s apps have been integrated seamlessly with iOS. “It’s a pretty unique iPhone. In fact, I’d like to call it the ‘iPhone Pro,’ because it’s got all of the Microsoft software and applications on it,” Nadella joked, before showing how the Outlook app was, “the best email client on iOS for Gmail and Exchange.” In a single move, Nadella had shown Microsoft’s willingness to cooperate, rather than compete with their biggest rivals.

Empathy, according to Nadella, also involves listening to their customers. As President of Microsoft’s Server and Tools Division, he listened to what his customers had to say and restructured the business from client services to providing cloud infrastructure. Realizing that clients using Microsoft’s Azure product lacked the same level of developer tools as offered by Amazon Web Services, Nadella not only brought in the tools, he also added Microsoft’s database and Windows server to the Azure cloud. After realizing that the Windows Phone had entered the market too late and did not offer the same tools and functionalities as iOS or Android, he shut the division down. It cost the company between 18,000 to 20,000 jobs, but saved 100,000 in the rest of Microsoft, according to Nadella. Instead, they now create over a hundred apps for iOS. Perhaps most surprisingly, in 2016, Microsoft joined the Linux Foundation, something that in 2001, Nadella’s predecessor Steve Ballmer had described as “a cancer that attaches itself (…) to everything it touches.”

Chief Empathetic Officer

Nadella’s clarion call for empathy among managers and executives within modern-day business is not just a way to breed better leaders or a way of garnering positive PR. In his own words, “[hubris] has brought down empires, companies, and people from ancient Greece to modern Silicon Valley.” Empathy, Nadella notes, is not just soft skill, but an essential ingredient to breed innovation. Since taking over as Microsoft CEO, he has seen the culture within Microsoft change from what Nadella called a “know-it-all” culture to a “learn-it-all” one. His success has been unprecedented, with Microsoft’s stock price growing from $36 in February 2014 to $96 in March 2018. Accolades have poured forth from all quarters, with media outlets like TechCrunch praising Nadella for “reversing Microsoft’s fortunes and returning it to being a growth stock after stagnating for nearly a decade”, while their (now ex-) board member, ValueAct CIO Mason Morfit stating, “[Nadella] has exceeded all my expectations. I wish I could say we saw it all happening. That wouldn’t be honest.”

An empathetic leader, whether it’s a departmental manager, an entrepreneur, or a CEO; has the potential to create an environment of positivity, fraternity, and goodness within their workplace, which is often the spur that drives progress and innovation within an organization. Empathy does not necessarily translate to being too nice and not taking tough decisions, rather it indicates an ability for a leader to gauge the perspective of the team working for them or their client or investor and understand the perspective they’re coming from, and taking that point of view into cognizance while not hurting the other person’s feelings; not out of a false sense of kindness, but rather to ensure that they are not hesitant to speak up in the future or to contribute with their ideas or their work. Satya Nadella’s book, which might as well be called Zen and the Art of Microsoft Maintenance; gives us a piece of modern management wisdom that might at first appear to be from a Buddhist sutra from over two thousand years ago, but remains relevant to us even today:
If you could understand impermanence deeply, you would develop more equanimity. You would not get too excited about either the ups or downs of life. And only then would you be ready to develop that deeper sense of empathy and compassion for everything around you.

6 Comments on “The Compassionate CEO”

  1. I truly loved this piece.
    Satya Nadella is poised to be an all time great, if not already considered one.

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