Satya Nadella’s change management strategies at Microsoft

Organizational change often necessary in nature but entails risks by undertaking challenges that organization can achieve (Hayes, 2014). Change might sometimes be deemed as successful while at other point in time might fail in totality. Change can be incorporated in strategy, tactics or operational outcome. Almost every change management follows some or the other processes with application of relevant models. Though change might be deemed by employees or other internal stakeholders of the organization as being radical, it might help create opportunities. It can allow the company sustain its momentum in the marketplace. Change can often be reorganizing requiring execution and vision that can represent possibilities. One of the most inspiring change in history of technological giants is CEO Satya Nadella’s reorganizing of Microsoft. Microsoft Corporation is an American multinational technology company that develops, licenses, manufactures, supports and sells computer electronics, computer software, personal computers and services. Its famous software product Microsoft Windows is one of the most well-known products. It caters to worldwide operational bases. The scope of this essay analyses the way change management was handled across the organisation. Then a possible evaluation of its success or failure is also analysed taking into consideration process of change adopted. Every change process is triggered and coordinated by a change management leader, in this case it was Satya Nadella, who created and applied the idea. 

Change is the only thing constant as has been rightly said by Heraclitus. There are multiple implications for the process of change management, sometimes it encompasses restructuring, sometimes downsizing often upsizing or accommodating any other perspective that might be deemed as necessary for the company (Easter, 2017). Microsoft had been a market leader in the domain of software, hardware technologies and various other services. It can be understood that its prolonged existence and continuous innovativeness had led to its stakeholder’s both internal and external in nature consider that it could continue doing so. Microsoft had been adopting smart technology and its employees within team of the organisation had been striving continually to deliver achievements. Satya Nadella joined Microsoft in the year 2014 and as Bill Gates comments that he was responsible for creating a market share of USD 250 billion for Microsoft. Primary reasons behind Microsoft’s restructuring was that the huge Company was experiencing stagnancy in its growth. The Company functioned with several small business units, which were individually responsible for generation of new product ideas or service innovations. Post Microsoft’s launch, there were barely any innovativeness within the Company that had been responsible for creation of market share growth. Business units within the Corporation that were responsible for achievement or coming up with new ideas barely struggled to do so, competing amongst themselves. Rather than acting as team members, they functioned as competitors envying each move that the other made. Business units concept within the Corporation was not successful in nature as they did not partner with one another in the development or innovative processes. They were rigid units which harbored toxic environment of innovativeness. Microsoft unlike other technology companies emerging during 2014 dependent on refresh cycles of Office and Windows rather than thinking something fresh or out of the box.

Applying Kubler-Ross‘s five-stage change model

With rise of globalisation and technological advent, such attitude of Microsoft made no positive contribution towards the organization rather it harmed it (Troyani, Retrieved on 8th January 2018). Competitors as Google, Facebook, Apple on the other hand were continually coming up with innovative ideas, which created their dominance in a short span of time, in spite of genuineness of Microsoft. Google emerged as a dominant player on the internet while Apple in the field of mobile products. In this period Microsoft had to struggle to implement its product Zune, which also could not retain interests of stakeholders, market or the Company itself. Therefore, it can easily be recognised that Microsoft faced diminishing returns on investment with declining profitability hence declining market share. There was some changes immediately required within the Company that could create its sustenance or re-establish it on the path of growth trajectory. There was a lack of idea as well as a leader who envisioned a change and could re-invent the Company in a new form. Thus, Satya Nadella was appointed as the new CEO for Microsoft Corporation in the year 2014.

Microsoft from being a market leader was experiencing stagnancy in its growth with emergence of several technological giant companies. Most technological companies that had established themselves were bent on innovation for providing something new to the market. They were realising opportunities that technology coupled with globalization could create for them. Satya Nadella took charge of Microsoft in 2014 February, post which he attempted major restructuring for reducing internal conflicts and competition. He realized that separation, compartmentalization of departmentalization for platforms and products hindered growth of the Company. Therefore, common set of goals which Microsoft employees would focus on had to be developed. Primary focus was on enhancing productivity or rather reinventing them by integrating divergent range of business processes. Diagnosing that challenges for the Corporation lied in having separate goals and objectives for employee sets created a hurdle for the organisation, he began restructuring to create a singularity of focus. Change management leader helped create a unified business process with single and individual goal that everyone had to concentrate one, this helped reduce complexity persistent within the systems of the organisation (Cameron, 2015). He realized that the key to innovativeness could come from teamwork na brainstorming of ideas together.          

Another major restructuring undertaken by him was on 2016 September, when he merged Microsoft Research Group with that of Cortana, Bing and Information Platform Group teams for creation of a new Artificial Intelligence and Research Group. This new group consisted of 5,000 computer scientist and engineers for creating innovativeness around Microsoft products with artificial intelligence. This change envisioned by him was also greatly successful in nature creating opportunities product innovativeness to take place (Doppelt, 2017). Diagnosing challenges faced by the organization, Satya Nadella was able to apply successfully ADKAR model of change. This model of change management is goal focused and accommodates successful changes by way of phases of changes in business along with that of employees in a simultaneous manner. The model represents five distinct elements consisting of Awareness, Desire, Knowledge, Ability and Reinforcement.

Conclusion

In the first step of the process of change some key awareness areas needs to be analysed. In case of Microsoft it was necessary for the CEO to analyse whether the nature of change aligned with vision of the Corporation. Microsoft was focused on innovativeness in technology hence restructuring was also focused in similar areas (Merrell, 2012). He considered the risks of not changing. Satya Nadella soon after joining realized that Microsoft was lagging behind in competition from Google and Apple, which were taking away its market share. Therefore, the risks associated with not changing could have been paying of a heavy costs for Microsoft that could have questioned its viability and sustainability. Impacts from change had to realized for the organisation as well as for the entire community. With departmentalized structure of Microsoft, there were barely any new ideas emerging hence the possible impact of change was estimated to alter it. Lastly and most importantly, Satya Nadella realized that it could create an immense opportunity for him towards developing an innovative brand recognition for the Corporation.

Second aspect of the change processes requires motivation for participation and support towards change management processes. Satya Nadella was effective in creation of motivation towards change by overcoming critical resistance in the process from employees. He proved to be a great change management leader capable of guiding and providing valuable inputs to employees for the process of change. Thirdly, knowledge helps in the complexity of the change management processes. Satya Nadella himself has a rich work experience and knowledge of technological world. Further Microsoft employs some of the best brains in the world, forming teams with computer scientists and engineers was a mere task at Microsoft (Galliers, 2014).

Employees possessed complex skill along with technological knowhow regarding their job techniques for implementing the process of change. While the CEO came up with the idea to work together in a team, there was immense transfer of knowledge amongst the employees for implementing a process of change. Fourthly, ability is an integral parameter for change where achievement capabilities are reflected. Change is achievable and measurable only when employees possesses capability to do so. Microsoft as discussed before had the best of brains however there was a gap in the process of implementation of their research technique. With application in business processes, such abilities within the Corporation could easily be demonstrated and applied for betterment (Wildberger, 2017). Lastly, reinforcement allows sustainability of the change management procedure for the individual as well as for the entire organization. It ensures a continuous motivation procedure for ongoing success, it can include rewards, celebrations which form a part of Microsoft. The CEO has made sure that the applied change procedure is able to increase subsequent changes, hence the post-implementation allows better accomplishment of goals.                    

Kubler-Ross’s five stage change model was proposed in 1960 as a five staged business change model. It depicts a change curve with stages as denial, Anger, Depression, Bargaining and Acceptance. The model as applied by empathizing employees while implementing. The model states that while change is being implemented across an organization, employees initially deny the process, which is expressed as anger as they have to follow a different approach. As in case of Microsoft, employees firstly was depressed from the process of application of change then comes a stage of depression. Various employees within Microsoft decided to leave the organization with the process of application of new work culture. Then there was a bargaining with the  process of revising of work culture prior to its application. At the end acceptance process takes place.       

The five stage model of change, once applied can have a host of disadvantages and advantages. Deciding on a goal for the purpose will ensure a smoother process for transition. Allowing appropriate time with transparency in process will help improvise condition for change within employees.

The change procedure implanted across Microsoft was immensely large as it encompassed re-engineering of several procedure. The CEO was able to identify successfully business needs for the organization for creation of awareness amongst employees (Klaus, 2014). In the process of implementation of the change first comes identifying areas that needs to be changed. The concept and design framework has to be assessed prior initiating the process of change management. Microsoft lacked the sense of common goal which was brought about by Satya Nadella. He shared with the employees a new mission for the Corporation for achieving more for everyone. Most integral part of the implementation of the change process was building a sense of purpose within employees. He envisioned the core value embedded in achievement of the mission, which was the culture. With creation of positive sense of purpose, he was capable of heightening employee morale and engagement procedure. Procedure for change include bringing together employees under the same umbrella or Corporation that could provide them a sense of belongingness.

Earlier employees functioned merely as units catering to their individual work related goals. There was absence of a leader, who could engage them in organization’s processes towards achievement of something greater. Work culture was transformed by building a positive organizational culture. Employee’s started to find greater motivation and engaged in work more. There was low absenteeism rates with lower rates of turnover, they started feeling a part of the organization. With limited scopes to work on and no areas to contribute beyond self-responsibilities, employees experienced lowers levels of work satisfaction (Van der Voet, 2014). The CEO created scope for employees to work on varied fields by opening up new dimensions to work upon, employees felt more attachment towards the organization. Majority of technological employees at the organization had best of graduating degrees with interests to research. With new dimension of work culture, change implementation was highly successful. Satya Nadella functioned as a transformational leader handling the process of change effectively that led to successful implementation of the change procedure. He was able to successfully instill a new work culture, a vision, mission and goal for the entire company and a sense of positive purpose. His transformation within the organisation by restructuring of departments or products and platforms into singular units was effective. Microsoft was able to gain more innovative ideas and technological products through such restructuring. Success of the implementation was visible through re-gaining of stakeholder’s confidence, increasing investments within the Corporation, increasing of return on investment, increase in profitability, most importantly increase in line of products and services. Posts implementation process Microsoft was capable to compete within the industry with prominent players as Google, Apple, Facebook and Amazon whose solo motive was bent on innovativeness. Each of these technological giants were focused on creation of a product or a service that could help it emerge as an industry leader.

The technological industry is governed by first movers advantages and capability to continuously innovate. Implementation of the change management procedure might have appeared risky but have helped the Corporation regain its investors’ confidence and its brand identity. Multiple technological companies getting established everyday makes it integral for Microsoft to create a unique statement  regarding itself for maintaining its position (Hechanova, 2013). Through realignment of its work culture and employee management, the Corporation was transformed significantly. The CEO was able to bring about a CODE of change for Microsoft that changed their lives. He believed that the CEO is the curator for any organisational culture. If that culture is instilled with listening, harnessing and learning regarding individual passion then the Corporation cannot find difficulty in acquisition of talent. Hierarchy and formality within Microsoft’s work culture made it rigid, the CEO was able to transform it into growth mind-set. He was successful in implementing curiosity within employees by listening to customer needs and then creating motivation for meeting those needs. He also accommodated inclusion and diversity for catering to mission statement. Microsoft applied diversity as well as inclusion for their workforce for improving their overall work culture and to reflect regarding the planet. Most difficult part of the change management procedure is to convince individual stakeholders regarding the importance of change, with appropriate application of knowledge the EO was able to apply such as well. Impacts from a change might be positive or negative in nature but the believe in the transformation process with its coordination with proper change management leader helps attain success. Satya Nadella has written down his factors for success in the change management process by transforming existing work cultures at Microsoft and he reflects the process to be very Easter in nature.

Conclusion

Changes made by Satya Nadella was praised by Microsoft founder Bill Gates. Critics and stakeholders of the Company accepted that Satya Nadella helped chart a whole new course for Microsoft, by focusing on technological development. He has been regarded one of the most successful leaders with Bill Gates and Steve Ballamer. Computing industry has become more and more complex with companies as  Google, Apple, Amazon, Facebook and other undertaking several innovative endeavors. Consumer demands are also emerging from around the world with latest and innovative techniques being adopted. Restructuring of Microsoft allowed teams to work in a coordinated manner and develop something unique or innovative in nature. Partnering of various departments with the organisation that previously worked in compartmentalized bureaucratic manner allowed them freedom. Employees being able to discuss several ideas freely was able to bring up more innovative trends in the business. The restructuring change was an essential which made the Corporation immensely successful. It was able to come up with new and innovative products ideas, which further helped it increase its market share. Entire scope of business processes were reinvented by removing unnecessary business competition within the Company. The market was able to have the intelligent cloud platform for various processes. The cloud computing was applicable across organizations and was later deemed to be an essential type of innovative endeavor. Apart from cloud computing there were multiple personal computing platforms created. This proved to be a sharp contrast to prevailing scenario within the Corporation where barely any innovations took place. External and internal stakeholders of the Corporation including its founder were satisfied to have gained back their share in the market, which they had lost out upon. Though changes might be risky but with possibilities of creation of opportunities there needs to be such risk taken. However, a change alone cannot be termed as successful or unsuccessful in nature, it is the leader who can be attributed the share of success. From the models of change, it can be understood that change was a difficult process to be adopted within the organization but progressed. With application of ADKAR and Kubler-Ross five stage model, the change curve was easier to understand.  The models especially Kubler-Ross model was integral as it helped reflect point of view of employees. Employee’s reaction to change is critical for success or failure of any organization.      

Satya Nadella is a change leader with immense innovativeness and vision for the future. He envisioned a change and could successfully implement, which led to the immense success for the change. Not only was he able to envision a gap or need for a change, he could identify area that needed to transformation. The success of change is attributable to him for his boldness in undertaking business process transformation for the purpose of reinventing productivity. His success and pursuance led to him achieving heights for the Corporation, which at that point of time could be deemed as impossible. The founder himself was surprised at the results of the change administered by Satya Nadella. Therefore, reorganizing within Microsoft can be regarded as a highly competitive and successful change that proved to be the turning point for the Company.

Reference Lists

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