A Sleeping Giant Awakened

Context

Microsoft nearly disappeared into oblivion in the mid-2010s.

Having missed critical turning points in recent history – such as the rise of mobile technology and the proliferation of search and social media – the behemoth of personal computing was falling behind and dismissed as a has-been from the 90s.

That was until Satya Nadella stepped in to awaken a sleeping giant.

Real-Life Story

Satya Nadella took the reins as CEO of Microsoft in January 2014. In the decade prior, however, the company failed to capitalise on game-changing trends and was losing its footing with the decline in the popularity of Windows. Meanwhile, its highly competitive culture created rifts within.

Divisions such as Windows, Office, and Xbox operated with a fragmented and disjointed approach resulting in redundancy, inconsistent communication, unnecessary rivalry and low employee morale. Because of this, Microsoft struggled to keep pace in key consumer markets.

One of Nadella’s first initiatives was to overhaul Microsoft’s performance review system away from stack ranking – which pitted employees against each other – to one of open and constant feedback from managers and peers. The move encouraged collaboration.

At the helm, Nadella followed through with his predecessor Steve Ballmer’s vision of One Microsoft, which championed a more agile yet more cohesive organisational structure.

Nadella repositioned Microsoft to play the long game. He led the company’s expansion into cloud, mobile and gaming, as well as its acquisition of professional networking site LinkedIn to carve out its niche in the social media sphere.

But while these strategic moves made Microsoft relevant again, Nadella’s most important decision as CEO came in the form of massive investments into the burgeoning AI developer, OpenAI.

To date, OpenAI has revolutionised Microsoft’s suite of consumer and enterprise products – not the least of which are Azure and Copilot.

Microsoft also breathed new life into its Windows PCs. Now branded as Copilot+ PC, the devices will now have the power of AI.

From 2003 to 2013, Microsoft’s stock price grew 32%. A decade since, the price has skyrocketed 1,342%.

PostScript: Valued at more than US$3tn, Microsoft is one of the world’s most valuable companies. With investments into foundational tech, such as cloud and AI, it looks poised to lead the race.

Key Lessons

• Move fast when embracing change and innovation. Even large, established companies can fall behind if they miss out on major trends. Microsoft's resurgence was heavily tied to embracing areas they had previously missed. WarTime CEOs should stay agile and open to pivoting towards emerging technologies and trends.

• Foster a collaborative culture. Moving away from a competitive, stack-ranking performance system to one valuing collaboration and continuous feedback helped Microsoft enhance productivity and morale. Start-ups should cultivate an environment where teamwork and mutual support are prioritised over internal competition.

• Adopt a unified vision. Nadella’s integration of a One Microsoft strategy broke down silos within the company, aligning diverse departments towards common goals. WarTime CEOs should ensure all parts of the business work cohesively rather than at cross-purposes.

• Invest strategically for long-term growth. Nadella's investments in OpenAI were crucial in repositioning Microsoft as a leader in AI. WarTime CEOs must be strategic about their investments, aligning them with long-term growth rather than short-term gains.

• Revitalise core offerings with new technology. Microsoft rejuvenated its core offerings and stayed relevant in a rapidly changing market by integrating AI into its existing products, such as the new Copilot+ PCs. WarTime CEOs should consider how new tech can enhance existing products or services to meet evolving customer needs and stay competitive.

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Until next week, may the force be with you.

Kevin

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