Satya Nadella on why he has had to ‘refound’ Microsoft

Onboard­ing is not just for new staff at Microsoft. All 181,000 of its employ­ees are cur­rent­ly going through the onboard­ing process in order to get to grips with the company’s post-pan­dem­ic cul­ture and mis­sion, accord­ing to its CEO Satya Nadel­la.

Microsoft has hired 60,000 peo­ple over the past two years. Dur­ing an inter­view at the World Eco­nom­ic Forum in Davos, Nadel­la explained that the changes both inter­nal­ly and exter­nal­ly have meant that “it’s not just the 60,000 peo­ple, in fact the entire­ty of the com­pa­ny needs to be re-onboard­ed”.

This is part of a process which he described as “refound­ing the com­pa­ny for a changed world”. “None of us are com­ing out of this pan­dem­ic assum­ing we’re going to go back to 2019,” he added. “We have to find a new way going for­ward and, in that con­text, employ­ees and their expec­ta­tions are para­mount.” 

As part of Microsoft’s refound­ing, Nadel­la is explor­ing many ele­ments of the employ­ee expe­ri­ence, includ­ing com­pen­sa­tion, flex­i­bil­i­ty, man­age­ment expec­ta­tions and the com­pa­ny cul­ture. High­light­ing the impor­tance of this work he said: “They [employ­ees] are one of the most impor­tant stake­hold­ers. With­out employ­ees, there is no com­pa­ny.”

Last week, a com­pa­ny-wide memo informed Microsoft staff that the com­pa­ny is improv­ing its com­pen­sa­tion pack­ages in order to help staff cope with ris­ing infla­tion and to stave off com­pe­ti­tion in the jobs mar­ket.  

Nadel­la has also pre­vi­ous­ly described hybrid work­ing as “the biggest shift to how we work in a gen­er­a­tion”. Cur­rent­ly, Microsoft employ­ees have the option to work remote­ly up to 50% of the time and there is flex­i­bil­i­ty in the hours and geo­graph­ic loca­tion that they can oper­ate from too.

“It’s becom­ing an expec­ta­tion that the work­place will inte­grate with peo­ple’s need for flex­i­bil­i­ty, so that they can achieve har­mo­ny between work and life,” Nadel­la said. 

Nadella on the great resignation

This flex­i­bil­i­ty is also being reflect­ed in the labour mar­ket as peo­ple con­tin­ue to switch between jobs, in what has been dubbed the great res­ig­na­tion. 

A need for greater ful­fil­ment from work and bet­ter com­pen­sa­tion is help­ing to fuel this trend, which began dur­ing the pan­dem­ic. Accord­ing to a recent PwC study, one in five work­ers say they are like­ly to switch employ­ers with­in the next 12 months. 

How­ev­er, Nadel­la doesn’t regard this shift as a great res­ig­na­tion. “Real­ly it’s a great reshuf­fle because peo­ple are not actu­al­ly leav­ing the work­force or chang­ing their jobs,” he said. “Peo­ple either want a dif­fer­ent pro­fes­sion, a dif­fer­ent indus­try or a dif­fer­ent com­pa­ny.”

In order to retain staff, employ­ers need to make their work more mean­ing­ful, Nadel­la said. “If work is trans­ac­tion­al, that is when the com­pa­ny suf­fers.”

This feeds into the wider social pur­pose of a busi­ness, which Nadel­la defines as “cre­at­ing prof­itable solu­tions to the chal­lenges of peo­ple and the plan­et”. How­ev­er, he believes that there is an extra ele­ment to the def­i­n­i­tion for multi­na­tion­al com­pa­nies such as Microsoft. 

“Com­pa­nies like ours have to earn the licence to oper­ate in every coun­try and com­mu­ni­ty we are in,” he added. “You actu­al­ly have to prove that you belong every­where you oper­ate by cre­at­ing local sur­plus and local ben­e­fits to the com­mu­ni­ty.”  

This could mean assist­ing local gov­ern­ments in mak­ing pub­lic ser­vices more effi­cient or help­ing small busi­ness­es in the region become more pro­duc­tive. Nadel­la said: “The busi­ness mod­el of the com­pa­ny needs to have trust with the broad­er soci­ety because, after all, if you don’t have that, then pret­ty much any­thing you do is not going to be trust­wor­thy.”

But this is not sim­ply an altru­is­tic pur­pose; Nadel­la claims that oper­at­ing in a more suc­cess­ful glob­al envi­ron­ment will bring its own rewards for the busi­ness. “Our growth is sub­ject to the fol­low­ing lim­it, which is the world around us,” he said. “Microsoft will only do well when the world around us is doing much bet­ter.”

He there­fore judges the suc­cess of Microsoft by the amount of val­ue added out­put its dig­i­tal tech­nolo­gies pro­duce for eco­nom­ic growth across the world.  

He added: “We all have to strive for infla­tion-adjust­ed eco­nom­ic growth that is aligned with the plan­et and is more equi­table. That is going to be the most impor­tant thing that we will have to achieve in order to earn our right to con­tin­ue as a busi­ness.”