Nadella’s Transformative Leadership at Microsoft


Nadella’s leadership at Microsoft saw the company go through a remarkable period of transformation. Microsoft initially was headed to a downfall under its previous CEO, as indicated by various metrics, including performance and stock. Nadella’s takeover saw the execution of impeccable leadership skills, which saw the company change for the better. Nadella restructured the company’s culture to focus on aspects that were most important towards the success of Microsoft while realigning the various staff to adopt a growth mindset. This essay affirms Nadella’s transformative leadership at Microsoft, agreeing that his leadership style saw the company overcome challenges to regain its glory, which was on the verge of being lost.

Diagnosis of the Problems at Microsoft

When Nadella became the CEO of Microsoft, the company was struggling with a lot of problems. Leading Microsoft through its traditional business to capitalize on technology’s following big things was not an easy task.

Major Challenges

Among the significant challenges that Nadella faced when he became CEO was the rigid culture of Microsoft. According to Ibarra et al (1) “Each employee had to prove to everyone that he or she was the smartest person in the room” Another challenge that the new CEO faced was the rivalry with competitors such as Apple, making it an uphill task to make the office available on iOS devices. Initiating meaningful change for the company required Nadella to select the right people. Therefore, bringing these people on board was another challenge since the senior leadership team he needed had to have unique qualities such as being able to lean on each other’s problems, promote dialogue, and generally be effective.

Areas of Dysfunction

The first area of dysfunction that was evident at Microsoft was the absence of trust. Trust is seen as the foundation of real teamwork (Lencioni, 2). Lack of confidence in their employees led Microsoft to create the “stack ranking” performance management system, which put unnecessary pressure on employees. Inattention to team objectives is another dysfunctional area that existed at Microsoft. Focusing on results and using them to define success makes it difficult for the ego to get out of hand (Lencioni, 2).Bill Gates, for instance, hindered the achievement of these objectives by waving away a group of executives who were passionate about bringing an e-book to the market, killing this potential market-bursting business. Another area of dysfunction that presented itself at Microsoft was a lack of commitment. People will not get on board when they feel that no one is listening to their opinions (Lencioni, 2). This absence of commitment led to a plummet in employee morale which dragged the company behind due to reduced employee performance.

Goals for Transformation

Among the goals that Nadella set up was the empowerment of every person so that they achieve more. This was to counter the rigid culture, which required employees to prove their smartness to the management. Another goal that Nadella set was to build new partnerships. With the broken relationship with key players in the tech industry, such as Apple, Nadella was committed to restoring these partnerships to spread the company’s products. Nadella, moreover, aimed at ensuring diversity and inclusion. This goal would enable the company to raise team members with impeccable skills to make bold and transformative decisions that would change Microsoft’s course of business.

Nadella as a Change Leader

Nadella’s takeover as the CEO of Microsoft, so the company undergo a positive transformation. His leadership style directly influenced such a change at the beginning of his tenure.

Leadership Style

As a change leader, Nadella can be seen as a democratic leader. Goleman (3) describes democratic leadership as when an empowered team takes part in the decision-making process. Nadella’s leadership highly valued the ideas that the employees proposed. He appreciated the participation and used the ideas as the basis upon which his strategies were implemented. Ibara et al. (1) iterate that “Satya models being curious, seeking to learn as people bring him new ideas and information,” evidently affirms Nadella as a democratic leader.

Rules of Leadership

The rule of leadership defined by Jack Welch (4), which Nadella demonstrates, is “leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach, and build self-confidence.” When Nadella gave the keynote speech at the Grace Hopper Celebration of Women in Computing, his comments to a question provoked outrage (Ibara et al., 1). This led to him being mocked publicly and raising questions on his commitment to diversity. Nadella took this encounter, however, as an opportunity to evaluate his biases, owned it, and did not blame anybody. Nadella encouraged his colleagues, saying that they were going to learn and get a lot smarter.

Improving Teamwork

In terms of company culture, Nadella changed systems at Microsoft by focusing on pillars of customer obsession, diversity, and inclusion and achieving a one Microsoft. Employees had to get involved in fieldwork activities like the Dorothee Ritz team (Ibara et al. 1). One account manager spent a week out on the street with police officers, trying to understand when and where remote data could help them” (Ibara et al. 1). Making Microsoft a safe and inclusive company was realized through behavior modeling activities and the abolition of the stack-ranking performance system. To enhance the “One Microsoft” culture, the company conducted Microsoft’s annual Hackathon, which took one week (Ibara et al. 1). People team up during such activity to plot a business, create a prototype then pitch it companywide.

Growth Mindset

“Growth mindset,” according to Nadella, refers to being flexible in accepting talent development through good strategies, hard work, and input from others (Ibara et al. 1). Nadella worked to foster a growth mindset at Microsoft by empowering the employees to achieve more. He encouraged the employees to learn new things through activities such as the annual Hackathon.

Assessment of Nadella’s Effectiveness

Evaluation of Nadella’s effectiveness is a simple task since various dimensions can be used to justify his easily identifiable success.

Metrics to Measure Success

The metrics that could be used to evaluate the success of Nadella’s change efforts include employee feedback and achievements. These metrics would be effective since the change was implemented through employees and the shift results are evident through the successes since taking over as the CEO of Microsoft.

Sustaining Wins

To sustain the wins achieved so far, Nadella and his team can embrace welcoming changes. With various factors in the market changing, specific strategies that led to Microsoft’s success might likely become irrelevant. Jack Welch (5) encourages openness or acceptance of change. Being open to change indicates how flexible the team is to handle uncertainties. Furthermore, Nadella and his team should embrace self-reflection to identify the areas of improvement.

Future Challenges

As Nadella continues with his term challenges may likely occur, such as conflict within the team, employee retainment in the competitive environment, and consistently and fairly administering policies. Microsoft has a very dynamic culture due to the diversity in the employees. Sailing through this diverse environment might encounter issues that should otherwise be resolved using the appropriate procedures.


Ideally, Nadella’s leadership has seen Microsoft realize immense success in various areas. This transformation orchestrated by the democratic leadership style of Nadella has returned the company to its rightful place as a leader in innovation. Transformative leadership requires impeccable skills and abilities, as demonstrated by Nadella, to sail through the various challenges that a company initially faces.


  1. Herminia Ibarra, Aneeta Rattan & Anna Johnston. June 2018. Satya Nadela at Microsoft: Instilling a growth mindset. London Business School
  2. Patrick Lencioni. 2002. The Five Dysfunctions of a Team: A Leadership Fable
  3. Daniel Goleman. 2000. Leadership That Gets Results. Harvard Business Review
  4. JWI510. Week 5. EOP Video. Jack Welch
  5. Jack Welch. 2005. Winning

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