October 9, 2017 | Kathleen Hogan

Culture is a hot topic these days, and as someone who’s been deeply involved in helping shift our own culture at Microsoft, I’m excited by the level of interest from our customers and partners who want to learn more. And even though culture change can feel like growing pains, it’s an amazing time to be at Microsoft, which is in no small part due to the influence and leadership of our CEO, Satya Nadella. His new book, Hit Refresh, chronicles his personal and professional journey to become the third CEO in Microsoft’s 40-year history. It also tells the story of a leader helping a company and its employees rediscover its soul and transform its culture.

I was recently asked to share what I’d learned about our culture transformation over the last three years, and while in some ways we are just getting started, we’ve already learned quite a lot about what it takes to make culture change real. So, in the spirit of sharing and learning, here are:

#1 Honor your past; define your future

When we started this journey, a lot of people wanted to write a narrative that said, “what’s happening today is good and what happened in the past was bad.” But we didn’t see it that way because there was a lot to love about our first 40 years! We spent time talking with employees about what we wanted to build upon—things like our spirit of employee giving, creating technology for good, and setting big bold ambitions —our people were very proud of this heritage. But, we also knew we needed to leave some things behind. We were competing on the inside, yet our real competition was on the outside.

And there were other things to leave behind.

Satya put it best when he said we want to change from a "know-it-all" company to a "learn-it-all" company.

Once we knew how we wanted to evolve, we needed to think about our future. Through focus groups, surveys and a lot of dialogue up, down, and across the organization, we defined the way we wanted to work. At the same time, Satya was reading about the concept of a growth mindset, and we began to see how that approach could fit nicely with the culture we wanted to create.

#2 Net it out: Simple yet strategic

By this time, we had 50 different ways to describe our culture—learning, curious, brave—and the list went on. It was too much, and we needed to net it out.

That doesn’t mean we hurried. We took our time on this step—nine months, in fact.

We brought in experts like Dr. Michael Gervais, the mindset coach to the Seattle Seahawks football team. We met with Jeff Raikes, a former Microsoft leader and CEO of the Gates Foundation, and now on the board of trustees at Stanford. And, we consulted with Dr. Carol Dweck, the author of Mindset and leading authority on growth mindset.

We conducted more focus groups across a wide variety of diversity dimensions, hosted meetings with our corporate vice presidents, and then organized a “Culture Cabinet” to synthesize the ideas and serve as evangelists for the roll-out.

In the end we decided to embed our culture in the growth mindset focused on three attributes: Customer obsessed, Diverse and inclusive, and One Microsoft. All of these are in service to Making a difference in the world.

#3 You can’t fake it

Satya announced our aspire-to culture to the entire company and then at our shareholder meeting. It was a bold approach, and it meant that every action would be measured against it, and we couldn’t fake it. Satya’s ability to regularly exhibit the growth mindset through his words and actions has been a huge driver for our momentum. For culture change to stick, your CEO, leaders, and managers must embody the culture that you're talking about, and it must be real.

#4 Have a purpose-driven mission

The next big lesson is that it's not just about culture. It’s important for culture to be paired with a purpose-driven mission. I find that the majority of employees today want work that gives them meaning and purpose—they want to know they’re making a difference. While your strategy will evolve, your culture and sense of purpose should be eternal, or at least long-lasting. Culture paired with a purpose-driven mission allows your employees to use your company platform to realize their own aspirations and passions.

#5 Make symbolic changes big and small

Once you declare the culture, the next big lesson is to signal that things are changing.

We quickly took on some big changes, including revising our review system which was previously focused on a forced rating curve that tended to drive competitive behavior. The new system focuses on individual impact, contributing to others, and leveraging others. Our company meeting changed dramatically as well, from an experience where employees sat in the audience and listened to executives talk—very static—to a week-long event that includes a hackathon, product expo, and learning events—very interactive.

To raise diversity and inclusion awareness, we launched unconscious bias training and followed up with a course called Dialogue Across Differences to help employees understand how to support individuality and promote belonging.

We did small things as well, including sharing ten inclusive behaviors – things like not interrupting each other in meetings. These smaller actions can telegraph to employees that a change is underway and individual efforts can make a difference every day.

#6 Make it who you are

The next learning is about embedding the culture into your people processes. Much like symbolic changes, making concrete changes to the way you interview, reward, and promote will help you align your processes to your culture. We changed our approach to reviews, evolved recruiting practices to a more inclusive approach we call Screening In, and even changed the criteria for corporate vice president promotions to include a “culture index” and interview.

#7 Communicate, communicate, communicate

This one can’t be overstated. Communication needs to be consistent and constant. We engaged at every level of the company through traditional and non-traditional methods—short videos from our CEO, rich magazine-style SWAYs, and even coffee cups with culture messages. We also put significant emphasis on harnessing our manager community, arming them with a “Manager Meeting-in-a-Box” so they could easily carry messages directly to their teams. The point is to beat the drum frequently to keep your culture top of mind.

#8 Let technology accelerate the change

As a tech company, using technology is in our DNA, and we just took this for granted. After so many customers and colleagues asked how we changed so rapidly, I had that ‘aha’ moment. Here are a few examples of how we used (and continue to use) technology to help land the culture:

• Keeping score: We measure employee sentiment through a daily pulse survey to see if people understand the culture and are embracing it, and we give leaders access to robust HRBI (Human Resources Business Insights) with visibility to a number of culture areas, including building more diverse teams.
• Myths and insights: We use data to dispel myths that might hold us back in our recruiting approach, and machine learning to gain insights like predicting drivers of attrition.
• Collaborating and learning: To reinforce our learning culture, we centralized all learning systems, and now offer employees access to Lynda.com. Through Skype, Yammer, and Microsoft Teams, our employees have ready access to collaboration tools.
• Connecting at scale: Employees are able to join (in person or virtually) Satya’s monthly Q&A to hear from our CEO as well as ask direct questions. Through Yammer and Skype, they give real-time sentiment, and that information helps us understand what resonates and what doesn’t.

#9 All oars in the water

To get where you’re going with your culture, you need everyone on your leadership team committed and onboard. If you allow behaviors that are inconsistent with what you profess, it can breed cynicism because people are watching. To ensure authentic and lasting change, you need to be mindful of this and prepared to take action.

#10 Stay humble, stay the course

My final learning is a reminder that we’re still on this journey and we’re continuing to learn. It’s important to stay humble—don’t declare victory. Be consistent in your approach day in and day out, and celebrate the little milestones while staying the course.

I recently talked about these 10 Learnings with our CMO, Chris Capossela, at Microsoft’s Envision event, so if you want to learn more details about how we are driving culture change, check out our session.

I know this list will evolve as we continue down this path, and I’m looking forward to sharing more learnings along our journey. As your organization adapts to this time of digital transformation and changing employee expectations, let me know what you are doing to evolve and stay relevant.