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Why Satya Nadella will make a good CEO for Microsoft?

Wires are abuzz with the talk about Satya Nadella – who seems to be the front runner for the job of Microsoft CEO. Many profiles have emerged online – e.g. see the article Satya Nadella: The man who may soon become Microsoft CEO. Google’s Sunder Pichai was also in the race. Microsoft is at a stage of lifecycle where it is transitioning from a traditional corporation into a 5-STAR Business Network in order to compete better with the likes of Google and Apple. Smaller, nimbler competitors such as Contactually, Asana, MailChimp – and countless others – are creating easy to use web-based applications and deriving far higher per user revenues than Microsoft manages to achieve. In a few more years both its cash cows will be fully milked, and no new ones are in sight! So what kind of person is needed at the helm at Microsoft at this very moment? What does it take to transform a business from a losing traditional business to a winning 5-STAR Business Network. Ability to integrate internal fiefdoms and build closely linked external networks ranks topmost. Most people in a company climb up the departmental ladder with a tunnel vision – to reach right up to the top of the pyramid. For example see a typical climb for a CFO in a company who might start in budgeting or auditing arm of the finance department and slowly rise up to the rank of a CFO. Similar ladders exist for Chiefs of marketing, sales, IT, Operations, HR or even product departments.

Figure 1: Activities carried out in a typical Finance Department

Figure 1: Activities carried out in a typical Finance Department

However, the role of the CEO is very different. Instead of the tunnel vision acuity, you need a peripheral vision acuity.

Why?

In order to weave all these fiefdoms together into a cohesive organisation. For example, my experience from shipboard command shows that most captains have to rely a lot on the chief engineer and hence seemed to favour chief engineers over chief officers. After all they had been chief officers themselves and could do the role themselves, if they ever had to. But, despite all their engineering knowledge, most captains could never replicate the knowledge base of a chief engineer. That is why those captains who get the best co-operation from the chief engineers, are generally the most successful. A modern organisation is far more complex than the shipboard company. Reporting to a CEO is a complement of 5-10 people and each of them is a potential candidate for the role. Boards prefer executive for the CEO role who can integrate the gaps between the various points of views and get the best performance out of the entire team. ceo-operation-chartWhile each contender with a real chance is really good at the functional area they come from – whether it is sales, or marketing, or finance or operations – the one that can integrate the entire team and engender a unique shared vision of future that the board can buy into generally get the nod. Inevitably there are gaps between the functional areas. There are also parts of the functional areas that outsourced to third parties – whether in logistics, or IT or marketing. Integrating these external parties into the organisation’s fabric in such a way that they start sharing organisation’s vision as functioning as responsible part of the team is even more difficult. Chief Executives of future will distinguish themselves on this capability – to integrate useful outsiders into the organisation’s fabric, to outsource strategically, to build a business network of mutually dependent entities and to get this network working in unison towards the shared vision.

So, how does all this apply to Microsoft?

Besides Google, no other company is as dispersed as Microsoft is today. Ranging from its traditional core offerings to cloud based offering and hardware business – Microsoft needs a person who can integrate the key strengths of each internal group with needed outside expertise in order to come up with offerrings that customers want in significant volume. Microsoft has to stop playing catch up all the time, and start leading from the front. It has to once again create innovative products that customers really want, and will pay gladly for. It has to make its products easy to use – as easy as other cloud-based and mobile applications being sold by its competitors mentioned earlier. All rounder, shy, humble, super nice, collaborative, very technical, deeply engaged, a visionary leader and strong willed – are the words used again and again to describe Satya Nadella, e.g. in the article Satya Nadella: ‘Mr Nice guy’ could finish first as Microsoft’s next CEO“. The article goes on to state :

That’s how colleagues, friends and a cross section of industry leaders and technology industry watchers describe 45-year-old Nadella. Calling Nadella “among the brightest brains at Microsoft”, Ravi Venkatesan, former chairman of Microsoft India, said “Nadella’s strength lies in building relationships.” …

Nadella fought the hard battles within Microsoft and brought in collaboration within teams,” says Staten James, vice president & principal analyst Forrester research. On what makes Nadella a frontrunner for the CEO job, James adds, “Microsoft’s culture is unique and would take an outsider quite a while to understand and affect change upon. Nadella has already shown that he can drive the kind of change needed for Microsoft.”

That is exactly what is required at Microsoft at the moment. This is the reason why Why Satya Nadella will make a good CEO for Microsoft.

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