When Satya Nadella took over as CEO of Microsoft in 2014, he drove change throughout the giant software company. Using a customer-centric focus, Nadella transformed Microsoft’s corporate culture. Travis Lowdermilk and Monty Hammontree, two Microsoft user-experience (UX) experts, walk you through Microsoft’s culture-change program. The authors explain how your firm can use similar programs to revolutionize your corporate culture to benefit your customers, your employees and your bottom line.
Take-Aways
- Microsoft’s third CEO, Satya Nadella, transformed the company by obsessing about customer needs.
- The company generated customer empathy worldwide, scaling it up to 100,000+ employees.
- Transforming a corporate culture requires “awareness, curiosity and courage.”
- Corporate cultures are like software products: companies can hack them. To manage change, perform six hacks.
- 1. Establish a language that all employees understand easily.
- 2. Create bridges that connect employees, not walls that separate them.
- 3. Promote a learning attitude.
- 4. Develop quality leaders who will nurture a quality corporate culture.
- 5. Be a pragmatist, not an absolutist. Meet people halfway.
- 6. Your data should be meaningful to your employees.
- Transforming your culture to become more customer-centric benefits your company, your clients and your employees.
Summary
Microsoft’s reputation had suffered grave damage. Customers and commentators in and out of the tech world regarded the giant software company as an evil, grasping monolith that despised its customers and did little to provide for them. Those on the inside felt that Microsoft had devolved into separate warring “siloed” kingdoms constantly battling one another. Software engineers – and especially open-source developers – viewed Microsoft as an out-of-touch dinosaur and avoided its developer services.
Then, in 2014, Satya Nadella, became Microsoft’s third CEO. He was determined to transform the cantankerous corporation.
“Change is a hero’s journey in which we leave the status quo, are confronted with trials and tribulations and return forever changed by our experiences.”
Nadella’s plan was simple: In the future, the company would obsess over customer satisfaction. Its new mission statement ambitiously said: “Empower every person and every organization on the planet to achieve more.” Under Nadella’s leadership, “customer empathy” became Microsoft’s guiding light. The corporate giant began to emphasize customer outcomes and experiences.
The company generated customer empathy worldwide, scaling it up to 100,000+ employees.
Nadella faced the enormous challenge of generating customer empathy throughout a giant worldwide corporation. Getting more than 100,000 far-flung workers to focus on customers began with changing Microsoft’s corporate culture, which Nadella described as “rigid.” He asked a pivotal question: “What culture do we want to foster?”
“Perhaps the most important driver of success is culture.” ” (Nadella)
Microsoft’s influential 2,000-employee Developer Division (DevDiv) bears responsibility for “developer tooling.” DevDiv played a major role in Microsoft’s extraordinary transformation. It began its “customer-driven cultural journey” in 2013, the year before Nadella became CEO. With the new boss’s emphasis on learning, DevDiv professionals adopted the idea of letting customers teach the company what they wanted as Microsoft’s new guiding principle. With DevDiv leading the way, Microsoft began to learn all it could about its customers. While continuing to follow classic Lean principles, the company focused on innovation, nonstop acquisition of knowledge and “constant collaboration.”
Three behaviors are crucial in changing a corporate culture:
- Awareness – Double-check your theories about your products and services. Define, clarify and codify your assumptions. Restate them as hypotheses you can test.
- Curiosity – To develop products or services customers want, embrace curiosity to fuel an ongoing effort to gather comprehensive information about all of them.
- Courage – Despite your best efforts, the products and services you plan to offer may not prove to be what customers want. Show sufficient courage and tough-mindedness to drop failed ideas, shift course and move ahead.
To illustrate, imagine a company that bases its product strategy on the gut feelings of senior executives who lack the curiosity to fund research to learn what their customers truly need or want. It badly needs to invest in product research. Or consider another company that delves into the necessary research, but doesn’t act on its findings because they run counter to its entrenched business model. It needs to face the future and put its data to use.
“The company’s stock had soared to an all-time high…Microsoft was doing something radically different, and people were wondering what that was.”
Over time, Nadella’s push inside Microsoft succeeded in transforming its culture, as its bottom line proved beyond a doubt. DevDiv UX research manager Kelly Krout noted that Nadella’s first priority was to develop the iterations within Microsoft and its products that generated widespread positive customer responses. This drove renewed profits and increased share price. Now, no other company has greater value than Microsoft.
Software translates inputs into outputs to instruct computers. Similarly, cultural norms and corporate policies instruct organizations. Employees “download” the organization’s instructions – its culture – to learn how it expects them to act and to understand the outputs it wants them to produce.
“If your customers are unhappy, chances are your employees aren’t happy either. Creating a lasting culture that is deeply empathetic toward customer needs and experiences requires an organization that is deeply empathetic toward its employees’ needs and experiences.”
Hacking your culture relies on step-by-step efforts, innovations and iterations, some of which will work and some of which won’t. Even those that work must be adjusted, purged of internal problems and made to run at their best. Six effective “culture hacks” can serve as vital way-stations on your organization’s culture-change path. They are:
1. Establish a language that employees understand easily.
Linguist Benjamin Whorf explains, “Language shapes the way we think and determines what we think about.” To ensure that everyone in your organization uses the same terms and language, compile and disseminate a common glossary. A common language enables your people to connect and collaborate with each other and with your customers.
“Moving to a common language takes practice. It’s like a new pair of shoes: they feel a bit awkward at first, but as soon as you break them in, they feel like an extension of your feet.”
People who share a common culture use its language to state their values and preferences. When you provide a different language, your company’s internal thinking, actions and values will change – and that will shift the culture. A customer-driven culture requires its own “language of learning.” In Microsoft’s DevDiv, various learning concepts – “assumptions, hypotheses, experiments and sense-making” – are intrinsic to its day-to-day common vocabulary.
2. Create bridges that connect employees, not walls that separate them.
Some companies become – either by design or happenstance – siloed hotbeds of competitiveness, as Microsoft once was. This is not an uncommon problem. Things were so bad at Microsoft that a comical, insulting organizational chart made frequent rounds on the web showing different Microsoft divisions aiming pistols at each other. Customers don’t care about corporate boundaries and employee rivalries. They care only about having a great experience.
“Brilliant innovators deserve their rightful place in history. But we seem to always forget that their contributions to society were often nurtured within potent learning networks.”
The team approach breaks down silos and subdues internal competition. Promote “cross-functional-knowledge sharing” across all divisions. Eliminate superfluous internal barriers. Make sure those who plan and develop your products – including product managers and user researchers – are in direct touch with customers and know their preferences, observations and concerns. Your employees must communicate consistently to facilitate knowledge sharing.
Learning is essential to developing a customer-centric corporate culture. Learn all you can about your customers. Being customer oriented means “being learning driven.” Value the knowledge your company acquires through its mistakes. Avoid a know-it-all attitude. Encourage and pay attention to a broad selection of opinions and viewpoints. Just like people, companies aren’t perfect. Organizations and their employees can learn from both success and failure.
4. Develop quality leaders who will nurture a quality corporate culture.
Compliment and thank your leaders. Your gratitude will encourage them to model a culture that prioritizes customers. Spotlight quality work and customer-oriented behavior by setting up “face time” so promising employees can get to know leaders who serve as role models.
“The metrics we use to enforce accountability are where our cultural platitudes are tested. How we define and measure success is the final test that reveals what we truly value as an organization.”
Change makes people uncomfortable. It’s not easy for employees to accept a new corporate culture. To enlist support, spotlight selected employees who embody the behavior you want to encourage. So people have reference points, script the employee behaviors you prefer. Make sure your “systems and tools” work well within the new culture. “Embed belonging cues” in employee milestones – like job interviews, onboarding, anniversaries, groundbreaking projects, performance evaluations, raises and promotions, and retirement – to promote internal cultural ties.
5. Be a pragmatist, not an absolutist. Meet people halfway.
The more difficult you make cultural change, the less likely it is to succeed. This means you must be willing to meet employees halfway and not insist on “dogmatic adherence” to any suggestions or policies.
“No one owns the voice of the customer except for the customer[s] themselves. In a customer-driven organization, everyone must be responsible for connecting with customers and learning from them.”
A rigid approach may backfire and deliver negative results. Instead, be “passionately pragmatic.” Most employees want autonomy. Therefore, adopt a flexible approach that permits your teams and employees to establish and implement their own customer-centric processes. To establish trust, don’t automatically dismiss your detractors. Listen to them with respect.
6. Your data should be meaningful to your employees.
Numbers, extrapolations and spreadsheets can include significant information, but raw data inspires no one. To seize and hold listeners’ interest and attention, you need to share stories that resonate with their emotions. For commercial organizations, this means compelling customer service and success narratives.
“When building a customer focused organization, it’s important that the stories of your customers permeate your everyday conversations.”
Customer-usage data and customer analytics detail how your customers utilize your products or services, but this information has little or nothing to do with why your customers embrace your offerings. The only way to learn more is to ask customers and to listen to their stories. The best stories have five traits:
- Simplicity –The stories are immediately comprehensible.
- Unexpectedness – They feature intriguing details that surprise listeners.
- “Concreteness” – The stories are tangible, definitive and succinct.
- Credibility – They stories are believable.
- Emotions – The stories convey powerful feelings and spark strong responses.
To know if your change strategies are working, measure the results. Ask these questions about your current culture:
- What is your current positive-culture growth metric? Does it demonstrate the employee behavior you are encouraging? If not, how can you make sure that it does?
- Are your employee feedback measurements quantitative and qualitative?
- Is your corporate culture heading the right way? Brainstorm with your team to determine whether the firm and its workforce value “awareness, curiosity and courage.”
- Each month, use “small-sample pulse surveys” to monitor your culture’s progress. Survey your employees using a likeability scale about their access to customer data, their and their managers’ use of customer feedback in making decisions, and how they perceive customers’ enthusiasm, requirements, irritations and wishes.
As a result of your work on cultural change, your employees should engage more deeply with your clientele, your organization and each other. Your culture-transformation efforts will motivate your employees, give them a sense of mission, make them happier at work and help them connect with customers in more meaningful ways.
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