Satya Nadella’s Microsoft Just Became the Most Valued Company in the World. And It’s Thanks to Psychology, Not Tech

Growth mindset and empathy are the reason why Microsoft is back on top.

On a not so ordinary Friday, Microsoft reclaimed its throne as the most valuable publicly traded company. This seismic shift in the tech landscape isn’t rooted in advanced algorithms or cutting-edge hardware; it’s a tale of psychological transformation, spearheaded by CEO Satya Nadella over the past decade.

In 2014, Nadella took the helm of a company mired in a ‘know-it-all’ culture. He swiftly pivoted towards a ‘learn-it-all’ mentality, embedding the principles of a growth mindset into the very fabric of Microsoft’s ethos. This was more than a corporate strategy; it was a psychological revolution within the workplace.

Growing with the right mindset

The concept of a growth mindset, popularized by psychologist Carol Dweck, posits that abilities and intelligence can be developed. It’s a stark contrast to the fixed mindset, where abilities are viewed as static. Nadella’s embrace of this philosophy transformed Microsoft from an organization resting on its laurels to one fervently pursuing learning and growth.

Under Nadella’s leadership, Microsoft employees were encouraged to view challenges as opportunities for growth, failures as lessons, and feedback as a pathway to improvement. This culture shift had profound implications for individuals, teams, and the organizational culture at large. Team collaboration soared, innovation became a daily norm, and employees were empowered to take calculated risks without the fear of failure.

Connecting with empathy

Alongside fostering a growth mindset, Nadella emphasized empathy, recognizing it as a key driver of innovation and customer connection. He often cited the influence of the book Nonviolent Communication by Marshall Rosenberg, which underscores empathy’s role in effective communication and relationship-building. This push for empathy wasn’t just about better understanding customers’ needs; it was about creating a more inclusive and understanding workplace where diverse ideas could flourish and people felt safe to take risks.

Rory Sutherland, behavioral scientist and author, said recently, “The next revolution is not technological, it’s psychological.” Microsoft’s resurgence is a testament to this. By leveraging psychological insights, Nadella steered the company towards understanding and meeting the evolving needs of its customers and employees.

This psychological approach has broad implications for business success. Technology alone is not a panacea. Understanding human behavior, motivations, and the power of mindset can lead to more sustainable and profound success. It’s the humans behind the tech that matter most. Microsoft’s story under Nadella’s leadership is a clarion call for integrating psychology into business strategies. As Microsoft continues to evolve under this psychological paradigm, it sets a new benchmark for what companies can achieve when they focus on the human element.

Original Source

Leadership Book List

Leadership Book list

We suggest the following books to be used for exploring in more depth topics that we touched upon in the culture shaping process. The title of the book links to an on-line store for purchasing. 

On the Brain: 

How the Brain Works 

Penguin Random House, New York, 2021 

Beautifully illustrated account of the brain and all its complexities simplified to a few hundred pages. This is where I cite that 95% of our decisions are made unconsciously. This book is a work of art. 

Whole Brain Living 

Hay House, Inc., New York, 2021  

Jill Bolte Taylor’s follow-up book to My Stroke of Insight; this neuroanatomist shares her journey and experience highlighting the left and right side of the brain function. This book also reinforces the notion of “voices” in our heads and that is normal. Her voices and our thinking styles exercise have some connection. 

Unleash the Power of the Feminine Brain 

Daniel G. Amen, M.D. Harmony Books, New York, 2013. 

Did you know that all human beings start out as female? Why is it that most male leaders are trying to improve their leadership through better practice of listening, empathy, and relationship building? Some would consider these feminine leadership strengths. The Chinese say Yin and Yang, the French give a masculine and feminine prefix to everything, might there be something to embracing the leadership whole in place of a part? 

Change Your Brain, Change Your Life
Daniel G. Amen, M.D., Three Rivers Press, New York, 1998.
How is your ANT population? (Automatic Negative Thoughts)
“Your thoughts really matter. They can either help or hurt your deep limbic system.” Daniel Amen, M.D.
This is only one of the gems from this book written for those trying to understand anxiety and depression… but, what about your healthy high performing leadership mind? Control the ANTS!
For some exercises on optimizing brain function, check out pages 301-305 for Do’s and Don’ts… 

On Intelligence
Jeff Hawkins, Times Books, New York, 2004.
Hawkins, the creator of the Palm Pilot, is after Artificial Intelligence and focuses on the cortex of the brain as the center of intelligence. This sheathing (about the thickness of 4 or 5 playing cards) surrounds the brain. It creates the mind, a notion that Francis Crick espoused in his work, The Incredible Hypothesis. 

First, Break All The Rules
Marcus Buckingham and Curt Coffman, Simon and Schuster, New York, 1999.
Lots of data and conclusions on what effective managers do… the brain research starts on page 79 and includes the world’s great managers mantra: “People don’t change that much. Do not waste time trying to put in what was left out. Try to draw out what was left in. That is hard enough.”
Not sure if I totally agree with their conclusions, but a fascinating read. 

How to Think Like Leonardo da Vinci
Michael Gelb, Bantam Dell, New York, 1998.
Seven steps to genius every day. This book builds on the work of Howard Gardner’s Frames of Mind and his challenge that intelligence is more than just math and language ability. Inspiring read. 

Mind Gym
Gary Mack, Contemporary Books, McGraw Hill, New York, 2001.
A sport’s psychologist’s look at the “inner game” of the athlete and the need to exercise your mind as well as your body to achieve optimum performance. 

On Leadership and Culture by Design©: 

The Winning Mindset for Leadership:
Unlocking Your Potential in Business, Sports, and Life
Dennis Alimena, iUniverse, 2008.
What makes people successful in life? Contrary to widespread belief, it is not having the right connections or the right amount of money in the bank account. Instead, it depends upon a winning mindset. 

Good to Great
Jim Collins, Harper Collins Publishers, New York, 2001.
The best business book written in decades. New and fresh insights on effectively leading large complex organizations. Among them – the Hedgehog Principle, Stockdale Paradox, Humility and Iron Will… do not only read this but digest it and connect it to your own leadership journey… see jimcollins.com for free resources and feel free to call us if you need some help! 

Blink
Malcolm Gladwell, Little, Brown, and Company, New York, 2005.
The power of thinking without thinking is a great subtitle to this book that relates to the power of our “gut reactions” to our world. This is a great barometer for leaders and do not forget to read to the end of the book where we are reminded of how wrong our “gut reaction” can be as well. Wisdom is knowing when to trust the gut and when not to… 

The Power of Full Engagement
Jim Loehr and Tony Schwartz, Free Press, New York, 2003.
Managing energy, not time, is the key to healthy high performance. This is the message of this book on treating the business executive as a world-class athlete and training to take on the tasks of the busy executive. Some people feel stressed, but this book has you break down your world into chunks where you may see that you are under-stressed in some areas and over-stressed in others. Helpful reminders and good research and anecdotes. 

On Self-Leadership: 

The Four Agreements
Don Miguel Ruiz, Amber-Allen Publishing, San Rafael, CA. 1997.
Toltec wisdom for everyday success. A trained Western physician gets an insight into what his true calling is… sharing the wisdom of his ancestors:
1. Be Impeccable with your word
2. Do not take anything personally, people project…
3. Do not make assumptions, ask questions…
4. Always do your best, in sickness and in health… 

Fierce Conversations
Susan Scott, Viking Penguin, 2002
Much needed work around having honest and passionate conversations in the workplace. Success, one conversation at a time, is a wonderful place to start for healthy high performance. Also, these conversations need to take place during times of change to better align effort and resources. 

Egonomics 

Ego can be our greatest asset or liability; early warning signs and the role of humility are researched; curiosity plays a significant role in off-setting ego damage.re
By Graced Store offered through Amazon. 

 https://www.amazon.com/dp/1416533230/ref=cm_sw_em_r_mt_dp_3SDGAYKBQ8QD8CZ46RP0 

Presence: bringing Your Boldest Self to your Biggest Challenges 

Amy Cuddy, Little, Brown and Co., New York 2015 

https://www.amazon.com/Presence-Amy-Cuddy-audiobook/dp/B01944W6L8/ref=sr_1_1?keywords=Presence+by+Amy+Cuddy&qid=1639076129&sr=8-115 

On Energy:

The Energy Bus
Jon Gordon 

The Way We Are Working Isn’t Working
Tony Schwartz 

On Philosophy, Leadership Thinking:  

The Art of Leadership Second Edition
Dr. George Manning and Kent Curtis, McGraw-Hill Irwin, 2007
A good literature search on the broad topics and history of leadership. 

The Five Dysfunctions of a Team
Patrick Lencioni, Josey-Bass, 2002
A fable of a new leader and a high-tech team that needs to progress through all dysfunctions to find high performance. 

The 21 Indispensable Qualities of a Leader
John C. Maxwell, Thomas Nelson Publishers, 1999 

The Power of Full Engagement
Jim Loehr and Tony Schwartz, Free Press, New York, 2003. 

Presence: Human Purpose and the Field of the Future
Peter Senge, Joseph Jaworski, C. Otto Scharmer, and Betty Sue Flowers, The Society for Organizational Learning, 2004. 

The Power of Focus
Jack Canfield, Mark Victor Hansen, and Les Hewitt, Health Communications, Inc. Deerfield Beach, Florida, 2000. 

On Becoming a Leader
Warren Bennis, Addison-Wesley Publishing Co. 1989. 

The Forgotten Half of Change
Luc de Brabandere, Dearborn Trade Publishing, 2005. 

Management of the Absurd
Richard Farson, Simon and Schuster, New York, 1998. 

The Empowered Manager
Peter Block, Jossey-Bass Publishers, San Francisco, 1987. 

Freakonomics
Steven D. Levitt and Stephen J. Dubner, Harper Collins, 2005. 

Resources > Links 

Harvard Business Review 

The Energy Project
TED 

Contact

The Winning Mindset by Dennis Alimena 

Available for purchase at iUniverse
Click here download the table of contents and introduction to the book