Enhancing Innovation Through Organisational Learning and a Culture of Empathy: Microsoft under CEO Satya Nadella

This case looks at the business and cultural transformation at Microsoft under CEO Satya Nadella, who took over in 2014 when the company had fallen prey to political infighting and the dominance of Windows over all else. The Microsoft veteran drove change from the top, inspiring others with the rallying cry “mobile-first and cloud-first”, and inviting a mindfulness teacher to facilitate meetings of the senior leadership team. Open, honest and humble, he toured the company and its customers’ offices worldwide, listening and gathering insights. Insisting that new products and services could only be developed if the offering was unique, he unleashed a culture change where staff began to embrace innovation. The case ends in October 2017, amidst glowing reports of progress under Nadella, who personally achieved 145% on the company’s ‘Culture and Organisational Leadership’goals. Yet there was still work to do – issues such as developing talent, reducing US-centricity, and shrinking the bureaucracy. Could the transformation be capsized by hidden icebergs? Would Microsoft stay on course with organisational learning and innovation once he was no longer at the helm?

- Organisational learning: what it is and how it affects strategy implementation and firm performance. - Inhibitors of organisational learning: in this case weaknesses in leadership, lack of coordination between functions, poor verbal communication. - Facilitators of organisational learning: aspects of Nadella’s leadership style that enabled institutional learning to develop. Students then apply these lessons to their own context using the frameworks provided.