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Microsoft CEO Satya Nadella has generated a decent amount of buzz in the news lately for his revolutionary approach to leading the computer industry behemoth.

Before Nadella’s promotion was announced, Microsoft’s problem was not profitability but relevance. Microsoft was nowhere near Apple, Google or Amazon in terms of innovation.

Moreover, years of infighting had soured the public’s perception of Microsoft as an organization to work for. Its reputation was so infamous that, even as it publicized its search for a leader, Bloomberg published an article on why being the CEO for the tech giant was a bad idea. The promotion of Nadella, an insider who had been with the company since 1992, seemed to the outside world just further evidence that Microsoft’s toxic culture only propelled its own to the top.

So why then, three years later, has Microsoft’s stock price almost doubled? And why is its market share of cloud technology rapidly approaching that of Amazon, which established itself as the paragon of cloud computing when it had virtually no competition?

A recent profile of Nadella by Quartz focused on his constant scanning of the market to determine where Microsoft should dedicate its efforts. During Amazon’s boom, Nadella observed that Microsoft was ultimately existing to serve its own ends rather than seeking out opportunities to meet the needs of the average consumer. This was where Amazon was able to create such a large segment of the market, and it’s currently where Microsoft is trying to establish itself as a viable competitor.

The Economist dove deeper into Nadella’s personality and approach. According to its analysis, Microsoft’s internal and external transformations are directly tied not only to its strategic shift in emphasis from the Windows operating system to the Azure cloud platform, but also to a profound cultural shift. Nadella, the article notes, “strikes a different and gentler tone” from former Microsoft CEOs Bill Gates and Steve Ballmer, promoting “a less abrasive, more open culture.”

Nadella’s predecessor had a markedly boisterous personality, beginning conferences by shouting, “I love this company!” and promoting a generally competitive atmosphere. The shift in leadership style from Ballmer’s high-octane competitive spirit to Nadella’s more contemplative and open-minded approach was a critical part of the transformation. Nadella recognized the need for the shift in culture, and Microsoft has undergone radical and positive change as a result. Facilitating such shifts in culture can improve the health of any organization, regardless of its size.

 

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