Why are we here?

CEO Satya Nadella has opened up on Microsoft's existential crisis as he chronicles his mission to 'rediscover Microsoft's soul' in his book Hit Refresh. Tom Wright reports

Why do we exist? It's perhaps not a strange question for a struggling tech company to ask itself, if it has found itself in a position where it needs to adapt to survive. It is a strange question, however, to be asked by a company that is so successful it made its founder Bill Gates the richest person in the world.

But, if you go back to 2014, it was a question that newly appointed Microsoft CEO Satya Nadella was having to ask of the existentially challenged vendor he had just been given the responsibility of reviving.

By Gates' own admission, Nadella's challenge was to lead Microsoft away from its "Windows-centric approach".

"That was what I thought was important to start asking in 2014 - it's quite an existential question - why does Microsoft exist?"

Since taking on the top job, Nadella has received widespread praise for repositioning the Microsoft business, taking its primary focus away from PC software and placing it firmly on the cloud. After seeing success with Azure, Nadella is now increasing Microsoft's focus on emerging technologies such as artificial intelligence, mixed reality and quantum computing.

Three years into his tenure, the CEO has paused to look back on his 15-year journey at Microsoft in his book, titled Hit Refresh.

Nadella joined Microsoft in 1992 and held a number of roles before his work as executive VP of the cloud and enterprise group earned him the top job, at which point Microsoft's sense of purpose had become unclear.

Looking back at his early days at the helm, he says Microsoft was struggling with an identity crisis. Its quest to make PCs truly mainstream was largely complete, and the company had struggled to find another mission to maintain its relevance.

"When I joined Microsoft in 1992 we used to talk about getting a PC in every home and on every desk as our mission," Nadella said at a launch event in London. "It was tangible, clear, succinct and in some sense very empowering because it was clear what the company was for and what we were trying to get done.

"Even by the late nineties, at least in the developed world, we had more or less achieved that, and after that it was a bit unclear. What is our purpose?

"So that was what I thought was important to start asking in 2014 - it's quite an existential question - why does Microsoft exist?"

To answer the dreaded question, Nadella went back to the company's roots. The first Microsoft products, created by Gates and co-founder Paul Allen, were interpreters for the Altair 8800 microcomputer.

Nadella explained that Microsoft needed to return to its original ethos: to make technology that helps people use technology. In doing this, Microsoft has ironically taken the limelight of its technology.

Under Nadella, Microsoft's mission statement has become "to empower every person and every organisation on the planet to achieve more", putting the emphasis not on the technology itself but on what can be achieved with it.

At the launch event, Nadella highlighted Microsoft's work in areas such as healthcare as an example of the company using technology to solve problems, rather than just manufacturing technology.

"[There] are the two things I've focused most on," he said. "The sense of purpose and mission, and the culture. Those are the two bookends.

"Of course you have to get a lot of things in the middle right - your products, your technology, your business strategy… but what is ignored is what are the necessary conditions for you to get those things right? I believe it's that sense of purpose and culture."

Rediscovering the sense of purpose was put right at the top of Nadella's to-do list when he took on the chief executive role.

In the opening pages of the book he recalls the first senior leadership meeting he presided over, where the top executives were flustered when asked to name some of their personal goals at Microsoft - having become used to merely toeing the line.

At the event, Nadella said that Microsoft is breeding a culture within its organisation that encourages employees to be creative and drive towards their own goals, as well as Microsoft's.

He is however cautious that his written account of Microsoft's journey over the last three years could be viewed cynically.

"Cindy [Rose, UK CEO] can pour her own personal passion into it, he said. "It's not like some dogma that is proprietary to Microsoft. It's something you embrace.

"That's what I feel we stumbled on and I've seen it scale because of the organic adoption versus the corporate push. That said, we are trying to get systematic in supporting it, but I do worry sometimes.

"One of my biggest worries about this book and talking about it is, will it be viewed cynically as just corporate propaganda?"

Living the talk

Having a methodology alone, however, is not enough. Nadella said a fundamental difficulty in reshaping the culture of any organisation is that human nature instinctively encourages people to try to force change in the people and situations around them, rather than turn their own judgement on themselves.

"The most important thing that I can do as CEO is not talk the talk, but live it. I must say, it's not easy. It's so easy to say ‘let's all have growth'. As humans we would rather have other people change than us"

These businesses, he claimed, will struggle if they aren't willing to move out of their comfort zone.

"The most important thing that I can do as CEO is not talk the talk, but live it," he said. "I must say, it's not easy.

"It's so easy to say ‘let's all have growth'. As humans we would rather have other people change than us. That's how we are wired and so I think it's through that struggle, and as people perhaps watch me struggle through it, it inspires, even in my own leadership team.'

Looking ahead, Microsoft is pinning its future hopes on three key technologies: AI, mixed reality and quantum computing. Again, the driving force is not creating the products themselves, but creating them in such a way that they can be used to solve real-life problems.

"My main thing about these three technologies is not to claim that Microsoft is going to be the only company," Nadella said.

"What is going to be key for us as a company is to take these three technologies and apply them with our sense of purpose. How do we go and solve some of the more pressing problems in the world?"

By his own admission, Microsoft itself has not perfected the new-found model.

"Sometimes people come to me and say ‘Satya, we've found the five people at Microsoft who don't have a growth mind set," he said, to laughs in the audience.

"I say ‘this is the exact opposite'. The challenge is for me to confront my fixed mind set every day. That vulnerability is what will make you a better individual and if you do that, the company will be fine.

"That's the journey we are on and we have not reached any destination."