What lumbering giants like GE & Microsoft do to adapt and change their corporate cultures
It would be safe to assume that watching global corporations like Microsoft & GE with hundreds of thousands of employees try to adapt or change their cultures would be a little bit like watching ex-heavy weight boxing champion Mike Tyson step into the octagon with Stipe Miocic the 2017 UFC heavy weight champ.
Mike Tyson, although an absolute animal and almost invincible during the eighties (58 fights, 50 wins, 44 by knock out) would be way beyond his prime and he would have to adapt and learn pretty damn fast if he wanted to simply be able to compete in a sport where punching is only one of the forms of aggression. The game has changed: the shape of the ring has changed, the rules have changed, the weapons and means of delivery have changed and the ways of winning have changed. Everything has changed! Yet Jeff Imelt and Satya Nadella have proven that these elephants can dance and have cultures that can be adapted and redesigned for our rapidly changing world.
Adapting to digital, how to turn a supertanker
So how is a lumbering beast like GE, a company founded 126 years ago in1892 with revenues in 2016 of $123.7 billion, manage to deal with the radicalchanges of the digital revolution? Jeff Immelt, GE’s CEO since 2001, recently communicated one of the company’s cultureinitiatives, which gives a pretty clear idea of where the company is focusedand how they plan to deal with the digital revolution, "If you are joiningthe company in your twenties, unlike when I joined, you're going to learn tocode. It doesn't matter whether you are in sales, finance or operations. Youmay not end up being a programmer, but you will know how to code." Thebehemoth, which employs about 300,000 workers, is trying to evolve its culturetowards a decentralised decision-making organisation with a startup-likementality, and is looking to transform into the world’s largest digital industrial company and it’s starting at the bottom, building future generations of digitalleaders.
In an interview discussing culture Jeff says, “We may be a century-old company, but we need tomove quickly, take risks, fail fast and behave like a startup to keep winning.I joined GE 34 years ago, and until recently our management could make everydecision in the headquarters. Those days are over. We have to embrace decentralisation and usetechnology to help our people to stay connected and allow more automateddecision-making so you can look at an app and see what’s going on inside the company.”
Removing the toxicity and getting Microsoft’s mojo back
Satya Nadella was an unexpected choicefor the role of CEO at Microsoft. He was in retrospect the right candidate tochange the culture and the fortunes of the organisation – in the past almost 4years he has added over $250 billion in market value to the business. I readthat during his time leading the Bing search business, Satya had the privilegeof shadowing Reed Hastings during Netflix meetings and I can only think thatthis, combined with his reading of books like Carol Dweck’s Mindset positionedthe Microsoft lifer as one of the only insiders who could lead and change theculture of the company. He certainly had his hands full when he took over atMicrosoft. A focus area for Satya has been on culture change, saying thecompany needed a culture that “allowed us to constantly refresh and renew”. Onethe first steps he took when he became CEO of Microsoft in early 2014 was toask his top executives to read Nonviolent Communication by Marshall Rosenberg. Microsoft’saggressive infighting culture was going to change, and this was the first clearsignal that things would be done differently under Satya’s watch.
Microsoft historically has beenrecognised for having a know-it-all culture and Satya has brought what he callsa curiosity driven “learn-it-all” growth mind-set approach to the 124,000strong business. To drive this home at the senior level Satya created the “Researcherof the Amazing” session, which happens every Friday morning at the seniorleadership team meeting, highlighting amazing research that is being conductedin the company. The meetings themselves have also changed - from arrivingprepared with all the answers in order to show how smart you were, to beingmore relaxed affair where Satya will ask for opinions and offer feedback. Hisapproach is more collaborative, empathetic, curious and open than hispredecessors. He has done the small things well too, reinforcing the “learn-it-all”approach, at his first public press conference by using T.S. Eliot to describethe new Microsoft: “You should never cease from exploration, and at the end ofall exploration, you arrive where you started and know the place for the veryfirst time.”
Satya has made many other deliberate changesthat have impacted the culture. He has scrapped Steve Ballmer’s church like annualmeeting where the company filled a stadium with cheering employees, and instead,created an annual hackathon which has had 18,000 employees from around theglobe take part. He hired Peggy Johnson as VP for Business Development awayfrom Qualcomm further demonstrating his more open and collaborative style.Peggy’s role requires her to build relationships and close deals with SiliconValley companies, something the company does not have a great track record of doing.
Both Jeff and Satya clearly understandthe importance of company culture. Not just the lip service, but the wellthought through initiatives that will drive a company of hundreds of thousandsof employees forward. In Jeff’s case, he is changing a culture through adaptation,demonstrating how serious the company is about digital and ensuring that thenext generation have digital running through their veins. In Satya’s case he ismaking fundamental design changes to a culture that worked well in the past buthad become toxic and needed shaking up.
Just as with Mike Tyson and the MMA, everythinghas changed, and the GE & Microsoft cultures are being deliberately designedfor the businesses to thrive. Neither of these guys wants their company tobecome the RIM or Kodak of the 21st century and they are using their company culture, the one competitive advantage they as CEOs can control, to makesure they don’t.