Microsoft’s CEO Just Taught a Master Class in Leadership. Here Are 4 Takeaways

You’re CEO of one of the largest companies in the world. You need to make big changes. Whom do you turn to for advice? 

You ring up Microsoft CEO Satya Nadella, of course. And you hope he takes the call.

That was the recent situation of Volkswagen CEO Herbert Diess, whose company is in the middle of major change. Volkswagen is reckoning with a transformation of its entire industry–from hardware (manufacturing) and a focus on car owners, to a software-led, mobility-first center of attention. All of this while trying to rebuild an organizational culture still reeling from the company’s global “Dieselgate” scandal from just five years ago.

So, Diess called up Nadella, well known for leading a major turnaround at Microsoft in recent years. Speaking from his own experience, Nadella explained how his company was able to repair a broken organizational culture, while simultaneously skyrocketing the company’s share price.

Although the remote interview lasts just over 15 minutes, Nadella teaches a master class in emotionally intelligent leadership.

Here are four highlights:

Nadella begins by recounting the very day in the late ‘90s that Microsoft actually achieved the status of being the world’s most valuable company by measure of market capitalization. But that led to major problems.

“People would walk around our campus thinking we are God’s gift to mankind,” relates Nadella. “And unfortunately, whether it’s in ancient Greece or modern Silicon Valley, there’s only one thing that has brought companies, societies, civilizations down, which is hubris.”

Nadella then highlights a lesson he learned from Stanford child psychologist Carol Dweck:

“We needed to become what I describe as ‘learn-it-alls,’ versus ‘know-it-alls.’”

Basically, you can have two types of people, one with more innate capability, who sees themselves as the “expert” and ends up as the “know-it-all.” Or, you can have another with less innate capability…but through learning, practice, and hard work, continues to improve.

“We needed to go from being the ‘know-it-alls’ to ‘learn-it-alls,’” says Nadella. “So, we’re making that case for every day, how do we listen to customers? How do we come together as a company?”

Of course, this is great advice for Volkswagen, whose own hubris led to a major fall from grace back in 2015. But it’s also a great leadership lesson for anyone leading a company, or a team.

So many today want to call themselves experts, authorities, gurus. But when you view yourself through that lens, a funny thing happens: you stop learning. As a friend once put it, you assume you’ve reached your fullest potential, and your thirst for knowledge becomes quenched.

In contrast, when you pursue a mindset of growth, you continue seeking to learn. You’re not afraid to try new things or even to make mistakes–because these are all learning opportunities.

And that gives you a huge competitive advantage.

Have you ever met someone who was so proud of their work leading a team, but the team itself lacked purpose and cohesion?

“Even if [leaders] are very smart, if they come in and create confusion, that’s not leadership,” says Nadella. “If you are a leader who can come into a situation that is ambiguous and uncertain and bring clarity, that’s leadership.”

If you’re leading a team, ask yourself:

When my team comes in for a meeting, do they all know the purpose of that meeting? Or do they leave still wondering why we met in the first place?

When I assign roles on a project, do my team members understand the scope of their individual role? Or are they surprised or even fail to deliver on expectations?

When running into obstacles, can the team come to agreement on which problems need to be solved, and in which order? Or do the same problems continue to hinder progress, again and again?

If some of these problems sound familiar, focus on bringing clarity to your team. This will allow you to work together, instead of across each other.

Nadella also emphasizes the need for leaders to truly energize their teams.

Of course, energy is more than just surface enthusiasm. Simply saying “Oh my team is great … I’m managing my team very well … We’re very, very energetic,” is not energy, says Nadella. 

Also, “everyone else sucking is not energy.”

Instead, explains Nadella, true energy is about “bringing all the people together across functions.” This is leadership at its best, the type that unites a team and creates chemistry.

You can have a team of A-players, but if they don’t work well together they will underachieve. They will struggle to reach milestones on time, or their products will be uninspiring.

In contrast, a team with less talent that has chemistry can achieve great things. In the words of Aristotle, they become a whole that is greater than the sum of its parts.

Finally, Nadella emphasizes the need for leaders to find a way to manage constraints in a way to achieve their goals.

True leaders don’t wait for perfect weather to perform, says Nadella. “The world is constrained…and leaders figure out how to unconstrain ourselves to drive success.”

1. Don’t be a know-it-all. Be a learn-it-all.

2. Bring clarity. Not confusion.

True leaders, explains Nadella, measure the success of their team first by looking in the mirror as to how well they are doing these things, instead of placing blame on their teams.