Bought It! Read It! Love It!
Satya Nadella’s New Book, Hit Refresh
Just a day before the official release of the book, Bill Gates blogged about it and published the foreword he wrote for the book. Then came across this highly inspiring interview Satya did with Beth Comstock. It was more than a fascinating teaser, which made me hit Buy Now with1 Click on Amazon to get my copy of Hit Refresh. Amazon Prime took two more days and Wednesday this week — it was waiting in our mailbox to be picked up. During this time, Satya did another awesome interview on TimesTalks with Rebecca Blumenstein from New York Times. All in all the greed to read the book stacked up — but forced, till I find peace in my mind till this Friday night!
Empathy
If I am to take-away two things from the book about what Satya is, he is an awesome leader with great empathy and a hard-core cricket lover. The interview at Microsoft in 1992 to join as an employee — and the tough experience he had to face after their first kid; convinced him the value of empathy. After a full day of interviews with various engineering leaders who tested fortitude and intellectual chops, Satya’s final hurdle was with Richard Tait. Richard had only one question to ask— Imagine you see a baby laying in the street, and baby is crying, What do you do? Satya was puzzled, was in a dilemma and finally, ‘you call 911’ — was his answer. Richard gave a pat on his back as he walked him out of the office and told — ‘no, you pick the baby up and give him a big hug’. Satya got his job — but more than that he values the lesson Richard taught him, ‘man, you need some empathy’.
Satya and his wife, Anu — just like any other parents would do, had heaps of hopes, expecting their first child. But on 13th Aug, 1996, Zain was born after an emergency cesarean — and was a victim of utero asphyxiation. Zain requires a wheelchair through out his life and be reliant on his parents and others because of the cerebral palsy. Satya was devastated — and mostly he was worried for how things turned out for him and Anu. Anu was the inspiration! She helped Satya understood, it was not about what happened to him, but — it was about deeply understanding what had happened to Zain and developing empathy for his pain and his circumstances while accepting responsibilities as his parents.
Satya went on to become an awesome leader with great empathy. He believes it is impossible to be an empathetic leader sitting in an office behind a computer screen all day. An empathetic leader needs to be out in the real world, meeting people where they live and seeing how the technology affects their daily activities.
Buddhism
The above two incidents helped Satya to develop a deeper understanding of people of all abilities and of what love and human ingenuity can accomplish. As part of this journey he also discovered the teaching of India’s most famous son — Gautama Buddha (in his own words). He is not particularly religious — but questions in the book, why only few people in India have been followers of Buddha despite his origins. Someone who is religiously a Buddhist, will not use the words, Gautama Buddha — but rather Lord Buddha. Buddhism is not so popular in India — but the country next to it, more than 70% of the population of Sri Lanka, are the followers of Buddhism. Buddhism helped Satya to learn, only through living life’s ups and downs can one develop empathy; that in order not to suffer, or at least not to suffer so much, one must become comfortable with impermanence. If you could understand impermanence deeply, you would develop equanimity. You would not get too excited about either the ups or downs of life — and only then would you be able to develop that deeper sense of empathy and compassion for everything around you.
Cricket
Satya is a massive cricket fan. More than just a cricket fan, I felt many a times while reading the book, he is a fantastic global ambassador for cricket. Cricket is the most popular sport in South Asia — and in India — it’s (almost) a religion. Playing cricket has taught Satya many leadership lessons. There are two key principles he highlights in the book, attributed to his past cricketing experience, that he values even after becoming the CEO. The first principle is to compete vigorously and with passion in the face of uncertainty and intimidation. Irrespective of how strong your opponent is, you don’t need to be in awe. Respect your competitor but don’t be in awe! Go and compete! The second principle is — put the team ahead of one’s personal statistics and recognition. One brilliant character who does not put team first can destroy the entire team.
Building Bing
Steve Ballmer wanted Satya to lead the engineering for the online search and advertising business that was later relaunched as Bing, one of Microsoft’s first businesses born in the cloud. It was a time the company was struggling with low market share in search — and Steve Ballmer decided to invest in it because it would require the company to compete in a sector beyond Windows and Office and build great technology, which he saw as the future of the industry. Amazon was already leading the cloud business and Microsoft was under great pressure to catch up. It was quite challenging and Steve told Satya, “this might be your last job at Microsoft, because if you fail there is no parachute. You may just crash with it”.
Satya highlights in the book, four essential skills one would need to build an online, cloud-based business that would be accessed primarily from mobile phones rather than desktop computers. First, a deeper understanding about the distributed systems. Second, become great at consumer product design. Third, the need to understand and build two sided markets — the economics of a new online business. On one side are the consumers who go online for search results, and on the other side are the advertisers who want their businesses to be found. Fourth (and finally), be great at applied machine learning. Machine learning is a very rich form of data analytics that is foundational to artificial intelligence.
Satya believed that, in a successful company, it is as important to unlearn some old habits as it is to learn new skills. Ultimately Bing proved to be a great training ground for building the hyper-scale, cloud-first services that today permeate Microsoft. Satya and the team were not just building Bing, they were building the foundational technologies that fueled Microsoft’s future. Among the lessons learned from Bing are the, scale, experimentation-led design, applied machine learning, and auction-based pricing. Though Microsoft started in online search behind Google, over-time Yahoo integrated Bing as its search engine and together they powered a quarter of all U.S searches — today it is a profitable multi-billion-dollar business for Microsoft. Also, it helped jumpstarting Microsoft’s move to cloud.
Moving to the Cloud
It was around 2010, Microsoft had already invested $8.7 billion in research and development, much of it focused on cloud technologies. But even though engineers were working on cloud-related technologies, a clear vision of a Microsoft cloud platform had not yet surfaced — there was no real-world revenue stream.
Once again Satya was Steve Ballmer’s pick to lead Microsoft’s cloud strategy. He was asked to take over the server and tool business (STB), which today has evolved into Microsoft’s cloud and enterprise business. In January 2011 when Satya took over the cloud business, analysts estimated that cloud revenues were already multi-billions of dollars with Amazon in the lead and Microsoft nowhere to be seen. Microsoft’s cloud revenue was only in millions. Satya was determined — and he mentions in the book, they missed the mobile revolution, but were not ready to miss the cloud. Today Microsoft is on course to have its own $20 billion cloud business. Satya made the company to look beyond the packaged products that has made Microsoft one of the most valuable companies in the world to see greater opportunity in their cloud platform, Azure, and cloud services like Office 365, the online versions of Microsoft’s hugely popular Office productivity suite.
One key lesson Satya took away with his cloud experience is, a leader must see the external opportunities and the internal capability and culture — and all of the connections among them — and respond to them before they become obvious parts of the conventional wisdom. It’s an art form, not a science.
New Mission, New Momentum
Satya joined Microsoft as a twenty-five-year-old evangelist for Windows NT, the 32-bit operating system that was designed to extend the company’s popular consumer program into much more powerful business systems. On 4th February 2014, he was named as the 3rd CEO of Microsoft after Steve Ballmer decided to retire.
Microsoft had failed to lead and barely managed to participate in the smartphone market, while Apple and Android operating systems were surging. The PC market Microsoft was leading were shipping around 70 million units quarterly, while smartphone shipments were reaching over 350 million. This was bad news for Microsoft. Not only were the PC sales soft, but so was interest in Windows 8, launched eighteen months before Satya’s new appointment as the CEO. Steve Ballmer’s strategy to make a mark in the smartphone market they already lost, was to acquire Nokia for $7.2 billions. Satya had no say on it — but he is one guy who voted against it, when Steve checked with him unofficially. But it was up to him to execute the deal and close it off, when he became the CEO. Satya says it’s a bad move — and highlights the fact that buying a company with weak market share is always risky. This led to a massive employee layoff in 2015.
It wasn’t a perfect Microsoft, Satya had to take over as the CEO. That year the annual employee poll revealed that most employees didn’t think the company was headed in the right direction and questioned its ability to innovate. In Satya’s own words, the company was sick — employees were frustrated — they were fed up with loosing and falling behind despite the grand plans and great ideas. In his very speech to the company as the CEO, Satya wasted no time — it was a call for action: “Our industry does not respect tradition. What it respects is innovation. It’s our collective challenge to make Microsoft thrive in a mobile-first and a cloud-first world.”
Satya deeply believed in how Tracy Kidder defined technology in his book, The Soul of a New Machine: technology is nothing more than the collective souls of those who build it — the technology is fascinating, but even more fascinating is the profound obsession of its designers. Steve Jobs once said that, design is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers of the product or service. Satya agrees.
As the CEO, Satya believed he needed do to several things very well right away, during the first year:
- Communicate clearly and regularly the company’s sense of mission, world view, and business and innovation ambitions.
- Drive culture change from top to bottom, and get the right team in the right place.
- Build new and surprising partnerships in which the company grow the pie and delight customers.
- Be ready to catch the next wave of innovation and platform shifts. Reframe opportunity for a mobile and cloud-first world, and drive the execution in urgency.
- Stand for timeless values and restore productivity and economic growth for everyone.
Satya’s approach is to lead with a sense of purpose and pride in what Microsoft does — not envy or combativeness. In the book he takes Apple and Google as examples to explain this. Microsoft could envy what Apple had built with its iPhone and its iPad franchise, or what Google had created with its low-cost Android phones and tablets. But envy is negative and outer-directed, not driven from within. He believed in reinventing productivity and business processes based on four principles — collaboration, mobility, intelligence and trust.
“We live in a world of mobile technology, but it is not the device that is mobile, It is you” — Award winning hip hop artist Common.
One key characteristics in a leader Satya highlights in the book is to bring some certainty into the unpredictable, highly volatile future. Anyone who says they can accurately predict the future trajectory of tech is not to be trusted. However, a growth mindset enables one to better anticipate and react to uncertainties. Fear of the unknown can send one in a million directions, and sometimes it just dead-ends with inertia. A leader has to have an idea what to do — to innovate in the face of fear and inertia. A leader must to be willing to lean into uncertainty, to take risks and to move quickly when make mistakes, recognizing failure happens along the way to mastery. Satya highlights in the book, three design principles for anyone leading others at Microsoft. The first is to bring clarity to those you work with. Second, leaders generate energy, not only on their own teams but across the company. Leaders need to inspire optimism, creativity, shared commitment, and growth through times good and bad. Third, and finally leaders find a way to deliver success, to make things happen.
A Harvard Business Review survey found that senior leaders inside companies spend less than 10 percent of their time developing high-potential leaders.
To make things real and drive fidelity of the ideas through an organization of 100,000+ people operating across more than 190 countries, Satya believed the need in having a clear connection between the company’s mission and the culture. Also he believed in consistency over perfection.
Culture
For Satya, C in CEO is for culture. The CEO is the curator of an organization’s culture. He believed — and also wanted all the employees of Microsoft to believe that, anything is possible for a company when its culture is about listening, learning, and harnessing individual passions and talents to the company’s mission. Satya wanted to think of culture as a complex system made up of individual mindsets — the mindsets of the employees. Culture is how an organization thinks and acts, but individuals shape it. The last thing he wanted for employees to think of culture as Satya’s thing — but as Microsoft thing.
Satya talks high about the cultural changes he brought into Microsoft since he became the CEO. He believed that the culture change he wanted was in fact rooted in the Microsoft he originally joined. The key is the individual empowerment. Sometimes people do underestimate what they can do to make things happen, and overestimate what others need to do for us. It is essential to get out of this mode of thinking.
Leaders need to act and shape the culture to root out biases and create an environment where everyone can effectively advocate for themselves.
The culture change Satya brought in was centered on exercising a growth mind-set every day in three distinct ways. First, one needs to be obsessed about the customers. At the core of the business must be the curiosity and desire to meet a customer’s unarticulated and unmet needs with great technology. It’s about being able to predict things that customers will love. Second, to be at best as a company, it’s a must to seek diversity and inclusion. The diversity of the workforce must continue to improve, and need to include a wide range of opinions and perspectives in thinking and decision making. Satya’s advice is, in every meeting don’t just listen — make it possible for others to speak so that everyone’s ideas come through. Further, he highlights that the inclusiveness will help everyone to become open to learning about one’s own biases and changing own behaviors so that as a whole can tap into the collective power of everyone in the company. Third (and finally) it’s one company — one Microsoft — not a confederation of fiefdoms. Innovation and competition don’t respect organizational silos or boundaries — so everyone has to learn to transcend those barriers.
Culture change is hard. It can be painful. The fundamental source of resistance to change is fear of the unknown.
Friends or Frenemies ?
Satya believes in healthy partnerships. Healthy partnerships — often difficult but always mutually beneficial — are the natural and much-needed product of the culture he was proudly leading to, within the company. Satya is completely brought into the Steve Ballmer’s theory of three Cs. He believes that is what is needed in order to build and sustain innovation-producing and customer pleasing products — smart partnerships. The three c’s include, concepts, capabilities, and culture. In a target with three concentric rings, the outer ring is concept. The concept represents innovative product ideas, new approaches — and a conceptual vision. The second ring represents capabilities. A concept cannot be realized with no required capabilities. Finally the bull’s-eye is the culture. The culture embraces new concepts and new capabilities and doesn’t choke them out.
It’s a mistake to write off any relationship as a lost cause. Tomorrow always begins with a chance to create new opportunities.
Shortly after Satya became the CEO, he decided to get Office everywhere, including iOS and Android. Further he unambiguously declared, both internally and externally, that the strategy would be to center the innovation agenda around users’ needs and not simply their device. Irrespective of all the differences they had between Microsoft and Apple, Satya decided to reach out to Apple and cultivate the trust again. Partnering is too often seen as a zero-sum game, whatever is gained by one party is lost by another. This is not what Satya wanted to believe. When done right, partnering grows the pie for everyone — for customers, yes, but also for each of the partners. That was his philosophy.
Success can cause people to unlearn the habits that made them successful in the first place.
Under Satya’s leadership, Microsoft also built a strong partnership with RedHat. When Satya stood onstage with a slide which says, Microsoft ❤ Linux, one analyst concluded that hell must have frozen over. He believes in today’s era of digital transformation, every organization and every industry are potential partners. Companies are focused on ensuring that they stay relevant and competitive by embracing this transformation — and the book highlights the need of Microsoft to be their partner in progress. Satya proposes four initiatives every company must make a priority. The first is engaging their customer base by leveraging data to improve the customer experience. Second, they must empower their own employees by enabling greater and more mobile productivity and collaboration in the new digital world or work. Third, they must optimize operations, automating and simplifying business processes across sales, operations and finance. Fourth, they must transform their products, services, and business models.
Openness begins with respect — respect for the people at the table and the experiences they bring, respect for the other company and its mission.
A company that once was seen as crushing the competition is now, under Satya, is focused in achieving business growth by empowering everyone on the planet. During the bitter experience at Microsoft during the antitrust case, Satya highlights in the book a lesson he learned, compete hard and then equally celebrate the opportunities created for everyone — it is not a zero-sum game.
Being straightforward with one another is the best way to achieve a mutually agreeable outcome in the fastest time possible.
Beyond the Cloud
Forecasting technology trends can be perilous. It’s been said people tend to overestimate what they can achieve in the short run, but underestimate what can be achieved in long run. As highlighted in the book, Microsoft is investing to lead in three key technologies: mixed reality, artificial intelligence and quantum computing. Satya believes that these technologies will inevitably lead to massive shifts in the global economy and society.
Engelbart’s Law states that the rate of human performance is exponential; that while technology will augment our capabilities, our ability to improve upon improvements is a uniquely human behavior.
Satya’s vision for the future is quite optimistic. He believes that mixed reality will become an essential tool in medicine, education ,and manufacturing. Artificial intelligence will help forecast crises like the Zika epidemic and help everyone focus on things what matters most, while quantum computing will give the computational power to cure cancer and effectively address global warming.
It’s dangerous to chase untested future technologies while neglecting the core of the current business. That’s the classic innovator’s dilemma — to risk existing success while pursuing new opportunities.
To avoid being trapped by the innovator’s dilemma, and to move from always focusing on the urgency of today to considering the important things for tomorrow, Microsoft decided to look at its investment strategy across three growth horizons: first, grow today’s core businesses and technologies, second, incubate new ideas and products for the future and third, invest in long-term breakthroughs.
Artificial Intelligence
Satya believes that in ten years AI speech and visual recognition will be better than a human’s. But just because a machine can see and hear does not mean it can truly learn and understand. Natural language understanding, the interaction between computers and humans is the next frontier. He builds up a lengthy discussion in the book on how would AI ever live up to its hype. It starts with a bespoke model — where the tech companies with privileged access to data, computing power and algorithms, handcraft an AI product and make it to the world. The next level is the the democratization — the tools to build AI will be available to everyone on a platform. Finally the learn-to-learn model, where computers generate their own programs.
The book suggests that the most critical next step in the pursuit of AI is to agree on an ethical and empathetic framework for its design — that is an approach for developing systems that specifies not just technical requirements, but the ethical and empathetic ones too. Along these lines, Satya suggests following principles.
- AI must be designed to assist humanity. Even as we build more autonomous machines, we need to respect human autonomy.
- AI must be transparent. Everyone should be aware how technology works and what its rules are.
- AI must maximize efficiencies without destroying the dignity of people. It should preserve cultural commitments, empowering diversity.
- AI must be designed for intelligent privacy, embodying sophisticated protection that secure personal and group information in ways that earn trust.
- AI must have algorithmic accountability so that humans can undo unintended harm.
Satya’s vision for AI is clear — ultimately humans and machines will work together — not against one another. For example, today we don’t think of aviation as artificial intelligence — but rather just a flight. In the same way, Satya suggests that, we shouldn’t think of technological intelligence as artificial, but rather as intelligence that serves to augment human capabilities and capacities.
After taking the reader through a fascinating journey of Satya’s experiences and the thought process, the last three chapters of the book is dedicated to explore the values, ethics, policies and economics we need to consider in preparation to the next wave of computing which will be lead by mixed reality, AI, and quantum computing.
Summary
Satya’s book, Hit Refresh, is a fascinating, inspirational story. It talks about how Satya as a young boy immigrated to U.S in pursue of better education, found a job at Microsoft, got married, got obsessed with the technology, became the CEO of Microsoft, changed the company culture in a positive direction while being an inspirational leader and drove the company to success. It’s a book with an all-five rating. I have no hesitation in recommending it to anyone who worries about a better tomorrow — the future.
