According to CNBC, Goldman Sachs estimated that Azure growth slowed down but not as much as Goldman had predicted. . Nir Tenzer, who until July 2019 was CEO of cybersecurity firm, nsKnox Technologies, worked for Microsoft from 2006 to 2017. Microsoft just beat and raised. Because Microsoft doesn't have a viable mobile platform, consumers must go elsewhere, to Apple or Google, and once they do, they're more likely to stay there. All Rights Reserved, This is a BETA experience. But there's also another reason that this is important: Having a strong mobile arm is important for keeping consumers within a brand's ecosystem. Tap here to turn on desktop notifications to get the news sent straight to you. The way technology is evolving can not only create an environment that enables people to do their best work, but that also supports the cultural and behavioural changes needed to transform.”. As personal habits have shifted to a mobile-computing model, this is where the money is. Overall, Microsoft's manufacturer partnerships are a net positive for the company, but this lack of control over its products makes it harder to control the brand and innovate with new features and designs. Michel van der Bel, Corporate Vice President Microsoft EMEA Part of HuffPost Impact. MP: Another key point to the adoption of technology, are the differences in not only employees’ ages, but also people’s preferences and technological skills. of course, the fact that it hasn't yet figured out how to gain a foothold in the mobile market. I’ve worked with three CEOs over 20 years and have seen first-hand how they developed the culture around them. If not, organizations need to help employees understand and evolve, before holding people accountable to them. Azure won a high profile contract — the up to $10 billion, 10-year JEDI deal with the Defense Department — which Amazon is contesting. These resources empower people to use them when they need them. of course, the fact that it hasn't yet figured out how to gain a foothold in the mobile market. This is one area where there's not much that Microsoft can do. For instance, the company waited almost three and a half years after the first iPhone debuted before launching its own modern smartphone operating system, Windows Phone 7 (which failed miserably); it took two years to launch its first tablet after the iPad; it went all in with a new operating system for PCs as well as mobile, Windows 8, which uses a metro-tile interface that is best used with a touchscreen device, not a standard mouse and keyboard, as most consumers have; its latest iteration of the Xbox game console was positioned as an all-in-one entertainment unit for the living room instead of as a pure gaming device, was priced $100 higher than the PlayStation 4 and required a $60-per-year membership fee just to be able to use Netflix, Hulu and other apps; etc. Indeed Nadella cited the growth mindset — which in his book, "Hit Refresh," he defined as "take nothing for granted and always be willing to check your assumptions as new data comes in," — as a key to Microsoft's success. If you look at Microsoft from another perspective — its valuation relative to forecast earnings growth, its shares look expensive. The third component is the shared understanding of methods used to solve problems, such as allowing people to work remotely, or deciding how much research is needed before decisions are made. MvdB: Speaking of leaders, what does pressure do to leadership behaviour and cultural behaviour? The new culture answered for everyone in the company — of different ages and from different countries — 'Why are we here?'". Some cultures — those that attract and motivate the most talented people to create world-beating products and deliver excellent customer service — promote growth. Does that mean I stay true to my thoughts and opinions even if I disagree with leaders of the organization? MP: The study shows that having a strong culture which supports people being at their best, combined with technology use, can increase people’s productivity, engagement, and creativity. How do you create an environment where everybody will have the opportunity to feel that this is part of how they can do a better job and collaborate? Do organisations encourage that too? I spent some time discussing the importance of culture with Dr. Michael Parke from the London Business School, with a particular focus on the important role that organisational leaders have in getting the best out of their employees. Nadella's solution was a new culture dubbed the “growth mindset.”. The main challenge, given the new markets and new products and business model, was how to grow and to scale and how to transform while [continuing to] perform," he said. For instance, autonomy means employees have the freedom to determine where they complete their work as long as they meet the performance standards, but this cultural value of autonomy may cause coordination issues at times, so how can the organization protect against those side-effects? The third is that they have impact, meaning that they can influence aspect of their unit or group or organisation. From a research perspective, engagement consists of three things, starting with how much time and effort you’re putting in. Microsoft’s organizational culture supports business goals for continuing global success. With Satya Nadella now at the wheel, it's clear that Microsoft is looking for a new direction. We had to promote and to support learning. Transformation is hard. It could do so by paying app developers outright, offering higher margins on sales and offering consumers significant credit toward app purchases. Have you seen similar observations or examples? One of those layers is typically screening for the cultural fit, such as the right personality or growth mindset or learning attitude. That's a dismal number, especially compared with Apple's 14.8 percent and Google/Android's 80.2 percent. It’s from this growth mindset spirit, that the seed for this Outside Perspective series was planted. You may opt-out by. MvdB: How would you define culture? They remove their ceiling for knowledge and growth. Technology changes how we solve problems, which is why it has such a powerful effect on culture and cultural change, because people are doing work differently. The answer obviously depends on the team, but on the whole the culture is becoming more negative and toxic. We had to scale our employees to master new advanced products. Having a robust ecosystem is critical to retaining customers and growing device sales, and Microsoft clearly has a long way to go here. I became a Forbes contributor in April 2011. MvdB: Reflecting on our own transformation at Microsoft and that of the customers I talk to, I find that every company, given their context, their culture, and their history, is very different. MvdB: I would take Teams as an example. To be a leader in this company, your job is to find the rose petals in a pile of shit. After that, companies often present specific case studies to see how potential new employees would operate and react in these organizational situations, to see if their decisions or actions would align with the company’s principles. There is one potential bright spot here for Microsoft. That's a dismal number, especially compared with Apple's 14.8 percent and Google/Android's 80.2 percent. But if people are using technology without a strong culture supporting it, then you’re not going to see those benefits. Changes in behaviour can be a slow process, especially when you need to bring awareness to a new set of values that justify them. These are all critical starting points for technology introduction and change, and I’d love to see your perspective on this, given your unique position at Microsoft. If Microsoft could offer deep discounts on smartphones and tablets on a par with Google and Amazon, they will gain traction in the marketplace. Its product pricing continues to be out of step with consumers, as it's overpriced several key products -- Xbox One, Surface, Windows Phone and Office -- and then had to slash prices later. If you’re interviewing leaders for a position in a company, how do you assess their compatibility or ability to adopt the company culture? MvdB: We’re all living through transformation and culture changes on a daily basis, and that makes it such an interesting topic. It isn’t just strength and endurance, or how hard you can push, or how long you can run for.