In the inaugural article of this series I shared what I has become the key success factor influencing how we must drive innovation, enable strategic relationships and ultimately manage our businesses to excel in the 21st century business environment: Collaboration, such as the increasing practice of cross-industry and cross-segment partnerships that provide a significant competitive advantage for companies open (enough) to accept the value of welcoming in partners for co-creating dynamic solutions that both thrill customers and create new market opportunities, otherwise left untapped.
One consistent theme reflecting successful collaboration practices is the often steely determination and vision of company leadership (and critically the CEO) to position outreach activities at or near the same high level as other strategic imperatives of the organization. In fact when both the actions and behaviors of management foster the spirit of Collaboration as part of the company’s mission, this is significantly more meaningful than mere statements or well versed strategies on a PowerPoint slide reflecting these intentions with words alone.
Moreover, the importance of how management sets priorities to back up its commitment and communications with its employees, customers, investors and other stakeholders cannot be overemphasized. The shift in mindset to a more open approach in many cases requires a transformation of culture that’s quite challenging for many companies to fully achieve. Specifically for companies still benefiting from successful legacy businesses the collaboration process can get bogged down or even fail. This is why a literal tidal wave of momentum from a core team of “evangelists” led by the CEO will help overcome the “not invented here” syndrome as well as other internal hurdles that can only be addressed by strong leadership, transparency and expanded vision….and those early wins that feed the proverbial flywheel definitely don’t hurt!
When the 100-year history of Microsoft is written, the year 2014 will be looked upon as a major inflection point. What happened that year of great significance? Satya Nadella was named CEO to succeed Steven Ballmer.
Although the company's annual revenue surged from $25 billion to $70 billion, while its net income increased 215% to $23 billion, Ballmer’s tenure leading Microsoft was in fact known less for its successes than for its major disappointments. While still relying heavily on its traditional PC-based software licensing business (ie.Office) Ballmer attracted criticism for failing to capitalize on several new consumer trends and technologies, forcing Microsoft to play catch-up in the areas of tablet computing, smartphones and music players with mixed results. Do you remember Zune? Me neither!!!
Fortunately for the vision of Satya Nadella and his team this trend reversed itself after 2104 and over the past five years, Microsoft’s recent successes has enabled a growth trajectory that has catapulted it to its current position as the most valuable public company in the world (worth $1.1 Trillion as of this writing).
Simply stated, Nadella changed Microsoft’s direction after becoming CEO. Based on his prior experience leading Microsoft’s nascent cloud business, Nadella had a clear sightline of the radical technology advancements that were transforming how both consumers and businesses were using (and receiving benefit from) the internet and recognized open collaboration with a broad range of partners was a necessity to generate true innovation in the post-PC, interconnected digital era. Nadella’ s tenure has also emphasized openness to working with companies and technologies with which Microsoft also competes, including Apple Inc., Salesforce, IBM, and Dropbox.
Nadella initiated a shift in Microsoft strategy from offering only proprietary software to the now well accepted open-source model which signaled to third party software developers Microsoft’s willingness to collaborate and develop relationships not previously supported by company management due to its inward approach; notably previous Microsoft campaigns against the open Linux operating system. The end result of enabling broad collaboration among industry developers was the acceleration of software innovation as well as the improved standing of Microsoft as an industry partner bringing with it important new added features to its products and services which contribute greatly to its current success. And quite ironically Microsoft acquired Github the preeminent open source developer community for $7.5B in 2018 soldifying Microsoft’s transformation as a truly collaborative organization.
Under Nadella, Microsoft revised its mission statement to "empower every person and every organization on the planet to achieve more" in comparison to founder Bill Gates's "a PC on every desk and in every home, running Microsoft software". Nadella’s main achievement has been transforming Microsoft's corporate culture led by this expanded vision to one that values “continual learning and growth” which can only be accomplished by collaborating with the employees, partners, investors and the communities in which Microsoft operates in.
This shift by Microsoft is an excellent example of not only the importance of a well-communicated and executed strategy but commitment by leadership to make changes even when it doesn’t seem adjustments are required due to current success or orthodoxy or both; the beauty of hindsight is how easy it looks in retrospect but in the early days I’m sure Nadella encountered great resistance from the organization that he and his team were forced to overcome.
In summary, there are a few important principles to take forward relating to the importance of leadership communication, commitment and behaviors in facilitating change to a more open and collaborative commercial approach:
● The Company CEO can have the original idea or insight but it’s critical that he/she support collaboration culture in both words and actions so employees can fully believe in the new direction and have an opportunity to get on-board. Nadella’s pivot to open source I’m sure was a rude awakening for those that still tied themselves to Office software as Microsoft's main identity. At times it takes dramatic shifts to make changes stick and “be real” for all those being impacted
● Expand the vision of the organization outward toward a much greater cause beyond the inward objectives of making a great product or by generating profits for the sake of earning money alone. Nadella’s change of the company mission to impact “everyone” in society positively broadened Microsoft to serve a much greater and rewarding purpose from which employees could seek further inspiration and permitted evolution from its earlier narrow focus under Gates
● The positioning of the customer as a main beneficiary of Collaboration is a powerful method to build support due to its direct impact on the business and it’s very clear rationale for all stakeholders. Nadella’s recent announcement that Azure cloud tools will become available on competing cloud services from Amazon and Google is such an example that would have been impossible if not for this link
● It’s said winning is contagious and Microsoft’s recent successes include its Azure cloud business, hardware devices like Halo and recent acquisitions such as Linked In have no doubt served as a tailwind for internal acceptance of the new open and collaborative culture Nadella has implemented
In the next article of the series a more detailed description how leaders can best evaluate, drive as well as articulate what a company’s focus will be (Who we are!) and how they determine which capabilities are truly core to the business so the focus of internal activity is clear toward the Grand Purpose.. At the same time Collaboration becomes a good option to consider addressing requirements that fall outside the core business. Main considerations include how fast the Collaboration can be accessed and by evaluating whether a partner can do it better or less expensively and most importantly whether they are the right fit.