Lessons from the C-Suite: What we are Learning from the new CEO of Microsoft

We are in the midst of exciting changes in the c-suite. New CEOs have been named at Microsoft, GM, Lululemon, and the relatively new CEO of IBM who is implementing her vision of the company. This is a four-part series on what can we learn from these new CEOs.

Satya Nadella—the new CEO of Microsoft

Satya Nadella was viewed as a safe choice when he was named CEO of Microsoft after the company reviewed 100 candidates during a comprehensive 5-month search. The stock responded positively to the announcement but some Wall Street analysts were not thrilled with the choice as they wanted a “superstar” CEO. I disagree. As I recently said on Bloomberg Television, I think Nadella could be a superstar in the making.

Nadella is the epitome of “Nerd Chic” or “Geek Chic”. In his 22 years at Microsoft, he knows the intricacies of the company and will not have to spend critical time getting up to speed on the enterprise’s operations. He worked in the consumer and business divisions and was responsible for 25% of Microsoft revenues when he led the cloud technology division.

While Nadella is not tied to the Microsoft’s Windows and Office foundational products, he understands the need to preserve and tie those products to the cloud technology future. With his leadership, Nadella may be able to pave the way to integrate Microsoft’s key products into Apple technologies, including iPhones and iPads. Coming off record revenues in Q4 2013, the company is in a great position for someone with a vision. So what is Nadella’s vision, what are his challenges, and what is he doing to make it happen?

Nadella Will Need a 90-Day Plan

As he takes over, Nadella will need a 90-day plan, which sets the foundation. The plan must define the key strategies to implement his long-term vision of integrating the company’s core products with the cloud technology. He will have to continue to deliver on the One Microsoft reorganization started last summer under Steve Ballmer while making necessary changes, which will inevitably arise as he redirects the company’s vision.

Need for a Strong Team

Nadella will benefit from the wisdom of Bill Gates as Gates steps away from his Chairmanship and returns to the important role of providing input on product decisions. At its core Microsoft is an engineering company and Nadella believes Gate’s analytical rigor needs to permeate the company.

No Time for Political Games

Nadella will have to play it straight and make some tough decisions. He does not have time for political games. In the Server and Tools Division, Nadella eliminated three layers of management. He does not see the benefits of unnecessary layers of corporate structure. He will change Microsoft from Steve Ballmer’s sales-driven culture to a focused products and services company.

His approach is pretty clear:

• He expects people to deliver on expectations
• He wants people to know their products
• He wants people to be engaged and responsible for those products in development and ready for future roll-out
• He wants those products to be key profit centers or else they will be eliminated.
• He wants his people to be prepared to kill those developmental products which don’t fit the company’s vision

He Will Need to Drive Change and Enable Change Agents

Nadella is viewed within Microsoft as “one of them.” Can an insider lead Microsoft out of its lethargy? I believe one of the reasons Nadella was pegged as CEO is he demonstrated he could not afford to play it safe. During a developers’ conference, Nadella demonstrated Microsoft tools using Mac technology, iPhone and iPad technology, and Google’s Chrome browser. Microsoft was not just focusing on Microsoft products. It was a huge breakthrough which was recognized throughout the IT industry.

Nadella demonstrated how Microsoft was changing and would play nice with developers and other platforms. Nadella was leading change.

No One Should Be Afraid to Fail

Finally, and this is critical, Nadella must create an environment where people are not afraid of failure. Products will be developed, tested and killed. Those responsible should be honored to have the courage to kill them. Other products will succeed beyond expectations. Those responsible should be cheered for the products’ success. Both successes and failures need to have their day. Both are crucial for the long-term success of Microsoft.

Nadella, his C-Suite team, and the entire organization will undergo fundamental change. As I have stated repeatedly, change is difficult yet no one is going to die when things change. People will live. With the backing of Gates, who is the revered founder of Microsoft, Nadella will be expected to deliver. And I believe Nadella will deliver. He will be a superstar.

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Jeffrey Hayzlett is a global business celebrity and speaker, bestselling author, Contributing Editor and Host of C-Suite with Jeffrey Hayzlett on Bloomberg Television. He is the CEO of The Hayzlett Group, an international strategic business consulting company focused on leading change and developing high growth companies. Connect with Hayzlett on Twitter, Facebook, LinkedIn or email.