Satya Nadella: Leading Microsoft Through Transformations

Satya Nadella is the third CEO of Microsoft, who took the position in 2014 after Bill Gates and Steve Ballmer. 

Born in India, Nadella moved to the US in his early twenties for further education. He earned a master’s degree in computer science from the University of Wisconsin–Milwaukee and a master’s degree in business administration from the University of Chicago. 

In 1992, 25-year-old Nadella began his career at Microsoft as an engineer. He quickly became known for his skills and changed positions every four or five years. Before becoming CEO, he served as the President of the Server and Tools Division. Talking about his career progress, Nadella said in an interview with LinkedIn CEO Ryan Roslansky that he never expected to land the job of Microsoft chief. Instead, working at different departments, he each time believed the work he was doing made a difference. 

I felt the job I was doing there was the most important thing, I genuinely felt it. And then of course it helped me get my next job,

Nadella shared.

How Satya Nadella Changed Microsoft’s Direction and Culture

2024 marked Satya Nadella’s 10-year anniversary as Microsoft CEO. When he started the role on February 4, 2014, Microsoft was in a totally different place. The company was losing its place in the tech competition becoming irrelevant. Microsoft’s strategy at the time was focused on enterprise connections, closed-up software, and pushing Windows on mobile devices. As part of this strategy, Microsoft announced the acquisition of Nokia’s mobile business in 2013.

However, the company had already fallen behind its rivals, including Apple and Samsung. Microsoft Phones failed to achieve success in the marketplace. The corporate culture wasn’t great either. There was forced internal competition, through performance reviews and rankings. Microsoft’s employee-ranking system requires managers to rank employees on a scale of 1 to 5 and compare them against each other. There were top performers, average performers, and low performers based on the reviews. Getting to the top secured benefits such as bonuses, stock units, and job security. As a result, people didn’t want to collaborate. They did everything to avoid the bottom, often at the expense of others. Microsoft employee reviews on different forums show they viewed the system as destructive.

Stepping into the role of CEO, Satya Nadella took a different approach to leading the company. One of the first things he did was drop the strategy of pushing Windows operating systems for smartphones, which resulted in the Nokia staff’s massive layoff. 

The new CEO reorganized the company strategy around the cloud computing platform, Azure, and support for open source technologies. 

Microsoft CEOs Bill Gates, Steve Ballmer, and Satya Nadella. Source: microsoft.com

Under Nadella’s leadership, Microsoft shifted from a Microsoft-centric approach to being open to collaborations. From the first days, Nadella announced the company’s willingness to run its applications on mobile platforms, including competitor Apple and Android products. He encouraged teamwork and the learn-it-all mindset instead of the know-it-all, motivating employees to share their ideas. 

In the first few years of Nadella’s guidance, Microsoft made significant moves, including the acquisitions of LinkedIn, GitHub, and Minecraft. Microsoft’s new approach proved to be effective, with the stock starting to move up. In 10 years, Microsoft’s share (MSFT) price increased by 1000%, reaching from around $37 to $404.

Satya Nadella’s Bet on AI 

Today, Microsoft is a top leader in the Artificial Intelligence field. It’s the biggest investor in OpenAI, the company behind the development of ChatGPT, today’s most popular AI app. From 2019 to date, Microsoft has invested $13 billion in OpenAI, making it a 49% shareholder. The Microsoft Azure cloud service provides technical support for OpenAI to build AI models. Commenting on the partnership, Satya Nadella said in one of his interviews: 

Microsoft is opening up access to new AI tools like ChatGPT. I see these technologies acting as a co-pilot, helping people do more with less.

Collaboration with OpenAI is not Satya Nadella’s only strategy in AI development. In March 2024, Microsoft announced the establishment of the Microsoft AI division to expand its consumer AI products and research, including Copilot AI (previously Bing Chatbot). To lead Microsoft AI, the company hired  co-founders of high-profile AI startup Inflection AI,  Mustafa Suleyman, and Karén Simonyan. 

Satya Nadella believes that AI tools will be a part of every personal computer. Microsoft plans to integrate AI with PCs by adding a Copilot button to computers to allow users to access the chatbot through the keyboard. 

Closing Thoughts 

Satya Nadella is among Time Magazine’s ‘100 most influential people' list in 2024, continuing to guide Microsoft through transformations. The CEO has a net worth of over $968 M. Outside of Microsoft, Satya Nadella’s interests include cricket and reading literature. He’s an author himself. Satya Nadella wrote several books, the most popular of which is ‘Hit Refresh.' In different interviews, he mentioned that solitude and spending time with his family is how he likes to relax and get back to work with renewed energy.

The tech leader has been married to his schoolmate Anupama since 1992. The couple had a son and two daughters. In 2022, the family saw a tragedy: Their first child, Zain, who suffered from asphyxia, died at the age of 26. In his book ‘Hit Refresh,' Nadella shared his experience of being a father of a special child and how he grew as a person with Zain’s birth.

It was about deeply understanding what had happened to Zain and developing empathy for his pain and his circumstances while accepting our responsibility as his parents,

he wrote.