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We sat down with Microsoft's CEO to discuss the past, present and future of the company

Satya Nadella. Photo: Getty Images

Satya Nadella took over as CEO of Microsoft in February of 2014, and in the three years since he has succeeded in turning around what was then a stumbling, aimless company. He recently stopped by Business Insider’s Poland office and spoke with us about the past, present and future of Microsoft.

Krzysztof Majdan, Michał Wasowski, Business Insider Poland: You have redefined the original mission established by Bill Gates: a computer on every desk. So how does it refer to modern digital economy?

Satya Nadella, CEO of Microsoft: One of the major things I think about is: What is the sense of purpose and identity at Microsoft? In fact, I take inspiration from the very foundation and forming of the company when Bill and Paul created Microsoft and the very first product they built was BASIC interpreter for the Altair. Of course, a lot of technology has come and gone since the Altair, but what was true then and what is true now is that we create technology so others can create more technology.

What was true then and what is true now, is that we create technology so that others can create more technology

And that’s who we are: a toolmaker, and a platform provider. Our mission of empowering every person and every organisation on the planet to achieve more is really a look back to the very creation of Microsoft.

BI: Going back to the roots of Microsoft’s business, how is it relevant to the modern world? It’s been over 40 years — the world has changed a lot.

Nadella: When you ask why it is relevant today, I would say it is even more relevant now than 42 years ago, when Microsoft was formed, because then it was for a bunch of hobbyists working in technology. Today, take Poland for example, every industry, every walk of life, the entire society, is digital — whether you’re in retail, manufacturing, healthcare, education or even the public sector. So even more important for the business of creating technology is that every other organisation right here, locally in Poland can create technology.

BI: How did employees react to the mission shift and culture change you’ve made?

Nadella: One of the things I’ve come to realise, and I think all of us at Microsoft have come to realise, is that there are two most important things determining long-term success. The first is the sense of purpose and mission that is enduring. Technologies will come and go, so you need to be able to both ask and answer the question: What do you do as a company, why do you exist? That’s exactly what is captured in our mission.

Technologies will come and go, so you need to be able to both ask and answer the question: what do you do as a company, why do you exist?

The other one is culture. These are the two bookends to me. In fact, I went on a lookout for what’s the right metaphor for the cultural dialog. Putting up a poster in a conference room with some attributes of a new culture never works. You read it once and never remember it again. My inspiration came from the book I had read couple years before becoming a CEO — “Mindset” by Stanford professor Carol Dweck.

BI: One book affects your business approach so much?

Nadella: I was reading it not in the context of business or work culture, but in the context of my children’s education. The author describes the simple metaphor of kids at school. One of them is a “know-it-all” and other is a “learn-it-all”, and the “learn-it-all” always will do better than the other one even if the “know-it-all” kid starts with much more innate capability.

Going back to business: If that applies to boys and girls at school, I think it also applies to CEOs, like me, and entire organisations, like Microsoft. We want to be not a “know-it-all” but “learn-it-all” organisation.

BI: What, except recommending the books, can you do as a CEO to empower employees to be part of that culture?

Nadella: This is an interesting question and one of the fundamental issues: What can a leader do to empower people and at the same time what you can do to empower yourself? I think it is to ascribe more power to others than to ourselves. This is how I have approached my own work at Microsoft, from the day I joined in 1992. It’s not like since I joined Microsoft to the day I became CEO in 2014 I was sitting around and thinking that someday I have to become a CEO to change the culture.

Satya Nadella with Microsoft Surface logoBusiness Insider

I felt that every job I did was the most important job and that I was in control of my own destiny based on what I did. To me, that’s an answer to your question: Create an environment, where everyone in the company can feel that they can bring their A-game and be respected for who they are.

For example, diversity and inclusion is a major agenda for us, because first of all, we don’t want to be just successful, we want to really empower every person and organisation on the planet. And if that is the goal, you have to look like the planet: have genders represented, have ethnic minorities represented, so we can create products that are really built by people for themselves. That’s a lot of what I think is what is “driving culture”.

BI: Is it hard to shape that culture? There is this story about how you asked Skype and Microsoft Research teams to work together on implementing real-time translations to Skype — and they had to do it in 3 weeks because you wanted to show it to the world on the conference. Quite a deadline.

Nadella: Most people think that culture is something that happens to them, but what is important is that you take responsibility for culture — after all it’s just a reflection of all of us, our every behaviour and every action of ours. It’s shaping Microsoft, it’s an organic thing, not static. So it’s our own ability to recognise a fixed mindset that is most important. Honestly, that’s what really helped us as a company to have a richer dialog around culture, invoke the personal philosophy and passion of every Microsoft employee to do this change. Not for Microsoft’s sake, but for their own sake.

Nadella ballmer gatesMicrosoftNadella with his predecessors Bill Gates and Steve Ballmer

So when you ask me about the Skype translate project, it’s not about me coming and forcing teams to work together. It’s about being able to inspire the AI team, that is doing amazing work, to build a deep neural net that brings together speech synthesis, machine translation and speech recognition — which is magic. They have done a fantastic job of bringing these three branches of computer science together in one deep neural net.

But this magic could be realised only if you brought it together with Skype data. It’s really their organic understanding of the opportunity to have impact, to solve one of human challenges present since the beginning of time: How do I transcend language boundaries?

BI: When we’re talking about the company culture, what’s your most important principle when it comes to managing business with huge ambitions?

Nadella: One of the key things in the tech business in particular is that you need to be able to push boundaries. In other words, for example, when you’re a successful company, you have this amazing lock between the idea, concept, your capability and culture. If you are successful, that means you’ve gotten the idea right, you’ve built right capability to go after that idea and your culture reinforces it.

One of the key things in the tech business in particular is that you need to be able to push boundaries

Now, the challenge is that at some point, the concept needs to be replaced by a new idea. Otherwise, how do you renew yourself? And in order to build a new concept, you need to build a new capability and that’s where your culture can get in the way. So one of the key challenges of leadership is to be able to recognise: When is the time to push for new ideas, and how do you build new capability long before you even have a new idea?

BI: How can you build such capability with no idea of how you’re going to use it?

Nadella: Taking our own example, we have amazing silicon capability. Take the FPGA (Field-Programmable Gate Array) work or the holographic processing unit in HoloLens. We hired silicon engineers many, many years ago, in order to now dream the dream that we can even create the assets able to do the holographic computing.

That is capability building: having that foresight, forcing yourself to do things that are not the easy to do. It’s not about the next day, the next quarter, next year. It’s one of the fundamental challenges of leadership and you got to get it right: you can’t be too far ahead, you can’t be too far behind. To be able to yet see those corners is all it is about.

BI: How do you approach failure in this context?

Nadella: You embrace it. If you are going to have a risk-taking culture, you can’t really look at every failure as a failure, you’ve got to be able to look at the failure as a learning opportunity.

If you are going to have a risk-taking culture, you can’t really look at every failure as a failure, you’ve got to be able to look at the failure as a learning opportunity

Some people can call it rapid experimentation, but more importantly, we call it “hypothesis testing.” Instead of saying “I have an idea,” what if you said “I have a new hypothesis, let’s go test it, see if it’s valid, ask how quickly can we validate it.” And if it’s not valid, move on to the next one.

There’s no harm in claiming failure, if the hypothesis doesn’t work. To me being able to come up with the new ways of doing things, new ways of framing what is a failure and what is a success, how does one achieve success — it’s through a series of failures, a series of hypothesis testing. That’s in some sense the real pursuit.

BI: What hypothesis then are you testing for individual consumers right now? What’s the next big thing?

Nadella: What we are excited about is this new category of personal computing. Today we think that the form factor used by us most is the mobile device. It’s the case today, so was the PC for a long time. The question is: What happens next? What are the new categories?

We were excited to create the 2-in-1 category, which is the fastest-growing amongst PCs. We are very excited about Surface Studio and what it means to reimagine what the desktop computer is. We are also very excited about Surface Hub as a computer for meeting rooms, of course also about HoloLens and the whole mixed-reality world. So for me the new forms of computing is what we want to build for consumers. But it is important that, instead of thinking that each one of these works as an independent computer, we think they have to form a fabric of devices for you.

It’s about your mobility, your ability to get work done as an individual or as a team, when you have lots and lots of screens and computers around you. So when we talk about Windows 10, it’s not about a device operating system anymore, it’s an operating system for all of your devices. That’s how we’re trying to not only tackle the innovative challenge of bringing new things to life, but also deal with the social complexity of a lot of devices in your life.

BI: During your keynote, you were talking about “world’s fastest AI supercomputer” at Microsoft. What is that exactly?

Nadella: One of the most fascinating technological breakthroughs in Azure was that we cubed pretty much every node of Azure, which is a million-plus machines, with FPGA (Field-Programmable Gate Array).

Microsoft AzureMicrosoftMicrosoft’s Azure

The characteristics of FPGA is that now it’s possible for us to take essentially any AI algorithm and run it at silicon speed versus the speed of software. Of course, we already had CPUs, GPUs, and now we even have FPGA as a way for you to be able to create intelligence.

Sometimes people make kind of a mainframe error, when it comes to AI, saying “here are companies with AI.” It’s not about celebrating others with AI, it is about democratizing it, providing tools so every developer and every organisation can create its own AI solutions.

BI: As this democratization of AI evolves and organisations are empowered through technology, is there a place for next big innovation and tech player?

Nadella: Every time you think all the technology that had been created already, all you have to do is look around and then there’s someone new who’s born with a new idea.

Every time you think all the technology that had been created already, all you have to do is look around and then there’s someone new who’s born with a new idea

I can say one thing for sure: that there’s going to be more innovation in our lives than what has happened in the past. And to try to hazard a guess as to who that is and where that is… maybe it’s the next Polish startup?

BI: We hope so. And if it happens, will Cortana congratulate this startup in Polish language?

Nadella: She doesn’t know Polish yet, but I’m sure she will in time. If she could translate in the real time, it wouldn’t be a challenge to teach her Polish. Which, by the way, is an idea you just gave me — maybe that’s what we should do next?

Get the latest Microsoft stock price here.

This article originally appeared at Business Insider Polska. Copyright 2017. Follow Business Insider Polska on Twitter.

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