Digital Leaders Series: Episode 1: Culture Change: The key to Digital Transformation

Digital Leaders Series: Episode 1: Culture Change: The key to Digital Transformation


Hi there, I was recently talking
with a colleague of mine, Brad Anderson. We had a really
great conversation, it was quite inspirational for
me. He’s focused on how
to change culture, to enable digital
transformation. In our Digital Leader Series,
we talk about culture change and innovation, and how important
it is to engender a culture that allows you to fail fast and
learn. We also discuss,
what does leadership look like? Take a look at this episode, and find out what is key
to culture change. [MUSIC] Today’s guest is Microsoft’s
Corporate Vice President, of Enterprise Client and
Mobility, Brad Anderson. Brad, welcome.>>It’s great to be here,
this looks fun.>>Good, so tell me a little
bit about your role, and your journey with
digital transformation.>>Okay, I was kind of the
management guy at Microsoft, and so I’ve always built the tools
that enterprises use to manage their PCs,
to manage the data centers. And right now, the focus is
all about enterprise mobility. And so, I get a chance to work
across the entire company, and how do we bring these integrated
solutions across Windows and Office 365 in our
management security? That really empowers IT to give
this environment to their users that the users love,
and IT trusts. It’s been awesome,
it’s been a lot of fun.>>That’s really good, and
what’s it been like to lead your product group through
this transformation?>>It has been massive, maybe
just even to help quantify it let’s just kinda talk about
where we started, and where we needed to get to. Microsoft was built upon, a
traditional on-premises product, we’ve put new versions out
once every two years, and once every three years. And from a business
model perspective, it was all based upon licensing
and software assurance. But with the Cloud fundamentally
how we build a Cloud service compared to a client server
product is much different. So the architecture changes and
the whole business model changes, because instead of that
traditional license and essay, it’s now subscription,
it’s usage. And so, the challenge that
we face as an organization to drive ourselves through
this transformation impacted the technology, it impacted
the processes, what we do and the business model, so
it’s been massive, okay?>>Yeah, really good, and
also from a team perspective, how they work.>>Yeah, and so
the first thing in order to make this transition, is we had to really become
much more customer obsessed. The second thing
we needed to do, is we needed to really infuse
this growth mindset in the organization. We wanted to get to a place,
where the team was rapidly experimenting, literally coming
up with hypothesis, either proving them or disproving them
and doing that within hours or days, and so
that was a big cultural change. And then, we had to
become much more data driven. And so, you got customer
obsession, a growth mindset, being data driven,
those are the three things, that we really pushed
into the culture. And it just so happens, that the architecture of these
Cloud services was fundamental in enabling all three of those.>>All right, and so that rapid, agile environment that
you kind of wanted to transform.>>Yeah, so
we can experiment and the way that I actually run the
team is every Thursday I have what I call the growth hacking
meeting and so I pull in, not only my direct reports, but
the extended leadership team. And we look at what the
experiments we ran in the last seven days? What did we learn? What are we gonna do in
the next seven days? But it gets the whole
organization into this mindset, of running experiments in
seven day intervals, and it’s amazing how fast we learn.>>That sounds like sprints.>>It is, but
it’s this growth mindset. And again, the cultural change, coming from where we were
before, the Microsoft culture of old, was one where you were
afraid to make a mistake. Much has been said about our
review model, and the way the review model worked is, it
was tough if you made a mistake. In the growth mindset,
you assume that 80% of your hypotheses, are gonna be wrong,
or not gonna be entirely right. And so, the cultural change of
getting people comfortable with understanding, hey, we’re
gonna have these hypothesis. A significant portion are not
gonna be proven to be right. That was a big change for
us to drive through, and we had to make the culture safe
for people to admit that hey, we didn’t have this right, or we needed to correct this, and
that was a big cultural change.>>That’s really good. So in talking to
the CIO community, they face many challenges,
the same challenges we do, and really want to know
how we solve problems. In talking, in speaking with
customers, what’s your guidance?>>Cultural change is hard, but
you have to have that leader. You have to be able to
articulate to the team why this change, or what the new culture
is gonna do for them, and for their customers. And then you just have to be
persistent and deliberate and just reinforce, it takes a lot,
it takes a long time, it takes years in some cases.>>And that leads really
nicely into my next question. In this Satya world, of managing
engineering, what’s working? And why is it working?>>First of all,
when you go into talk to Satya, you start with the customer. What’s the customer problem? What are they trying to solve? How are we making
their life better? And so, this concept of customer
obsession, and being really close to customers, has been
just incredibly important. He focuses on usage.>>Yeah.>>And really usage becomes
the primary factor, that everything that
we do revolves around. In the past,
we used to compensate and reward the engineering teams,
based upon hey, did you ship on the date,
that you said you would ship? With the features that
you said you would ship? But we didn’t know if it
was being used or not, especially in
an non-premises world.>>I’ve heard him say, that
revenue is a lagging indicator and usage is a leading, is
that what you’re referring to?>>Absolutely, in fact,
we all know of organizations and companies who’s revenue
looks healthy, but they’re losing customers. And so, if customers really
love what you’re building, they’re using it. And so, when we go into talk
with Satya, for example, we actually pull open
the dashboards, and we show him all
the usage metrics. What’s the growth in
the last seven days? What’s the growth
in the last month? What are people using,
what are they not using? But it’s all grounded,
100% in the customer. And in fact, we went as far as,
we even changed how we compensate the engineering
teams, and this is a really important point
about reinforcing the culture. The engineering teams,
including myself, we are now rewarded on usage. So for example, you could go ask
anybody in my engineering team, what the revenue target is for
our products? No one would know.
But if you ask them, how many mobile devices need
to be under management on June 30th, 2017, in order to
receive our targeted awards. Everyone will tell you
what the number is, cuz it’s all focused on usage.>>That sounds
really interesting, because from my perspective,
what I’m hearing is that an engineer is not just
thinking about the development. But the end-to-end experience,
which means they have to shift, in terms of how they think. And based on that, what are some
successes that you’ve seen in terms of customer experiences?>>Yeah,
there are two examples I thought were really interesting. I had the meeting with two CIOs. These are global companies,
one is in consumer products, and one is in the banking industry. And leading up to the meeting, was all the conversation across
the teams about the security that we do with EMS,
and with Office 365. I walk into these two meetings,
and in both cases,
the CIO came in and sat down and said, my team has now convinced
me my data is more secure in your Cloud then I can even
protect it in my data center. Let’s go, and
that was the meeting. It was like five minutes. A lot of work leading up to it,
but it’s incredible when organizations really
can understand, and these leaders can understand,
what the Cloud can do for them. The Cloud enables us to do
things using machine learning, and data analytics. And we 100% believe,
that we can help protect and secure companies, in ways we
can only dream of in the past, when they start to use
our Cloud service. That’s one really
interesting example.>>What are some of the ways
that we’re actually transforming these companies?>>I was meeting with the CIO of
the company that is the largest pump producer in the world. They produce 16 million
pumps every year. An interesting data point on
that, pumps actually consume 10% of the world’s electricity,
which I had no idea, okay? So they wanna start building
intelligence into the pump where it can automatically, for
example, throttle up and down the amount of
power that it’s using. Well, they’re building these
Cloud services to do that. And it’s been intriguing how,
a lot of the balance of power, if you will, in the company,
has now shifted towards IT. Cuz IT is where a lot
of the value and a lot of the monetization is
gonna come in the future, and the dynamics of that has
introduced into the company.>>And that’s very interesting, because where every company
is now in some shape going to be a software company,
a technology company. IT plays a different role, and there’s a different
discussion at the table.>>Exactly, IT for so long was
a cost center, now you know, the well known saying of
software is eating the world, every company is going through
a digital transformation. IT, is going to be front and
center of that, there’s never been
a better time to be in IT. Cuz so much of where the value
is gonnna be created for the next decade or two decades,
is gonna be driven by software. It’s gonna be driven through
the intelligence that the Cloud brings, and IT has
a fundamental role in that. Just another customer example,
I was meeting with Jim Fowler, who’s the CIO of GE. GE is now, describes themselves
not as the industrial company, but as the digital company, and
they’re digitizing everything. So here, you have one
of the most well known, longest tenure company in the
world, digitizing everything, and the role of IT is at the
table driving the conversation.>>A great example
of transformation. In your experience, what
motivates some organizations to embrace change, and
others to just frankly resist?>>Yeah, well I think you can
take just two approaches. You can drive change, or
you can be driven by change. And we know from all
the research that’s been done, when there’s these secular
shifts that happen. The move to the Cloud,
mobility, the companies and the individuals that lean in,
and really are leaders in
driving that change. The organizations come out more
profitable at the end, and the individuals come out
with stronger careers.>>And that staying relevant, being at the forefront or
frankly, becoming obsolete is really what
you have to pay attention to.>>That’s right,
I’m a big believer in very few organizations just are staying
in the same place. You’re either accruing value,
and building value, or you’re losing value, right? And so, I would much rather
be in that position, where it’s all about driving
more value for customers, driving more value for
shareholders. That’s fun.>>Yeah, absolutely and driving value is where
the focus needs to be.>>That’s right.>>Everyone watching this
has a business to run. So what is the impact
of culture? You’ve kinda described it,
what it’s meant to Microsoft. What do you believe the impact of culture
is on the bottom line?>>You can be an expert at
building technology, but if you don’t have
a culture that’s grounded in the things
that matter, value, innovation,
growth mindset, customer obsession, then
you’re always gonna be behind. You’re never gonna be delivering
those leading innovations, those things that really
delight customers.>>Yes, that’s really powerful. You talk about one person. What does a customer do, when
they don’t have a Satya Nadella, to help in the transformation,
to lead?>>So if you take that concept
of what one person can do and what your sphere of
influence is, my takeaway, and what I would encourage
everyone to think about who’s watching this is, what’s
your sphere of influence and what can you go drive
change in that sphere? You can make a difference
>>Yeah.>>And so one person can
do a tremendous amount. You go back several years ago, there was this old kind of
iconic comic, where they had like the different business
units at Microsoft, and there were guns and
swords pointed at each other. There was a little
truth to that, it was exaggerated of course. But I’ll tell you right now, as we think about these
end to end scenarios, around things like mobile manage
productivity, enabling users to be productive on any device,
anywhere in the world, that involves work that’s
occurring across the company.>>And I think that’s
an important point, because when you think about
CIOs, and the role that they play, and what they can see
across the entire company. They can bring that end-to-end
experience discussion, bringing those organizations
together is a critical part of enabling what
you’ve just described.>>Yeah and it is, and one of the things that I hear
from CIOs around the world is, they struggle with complexity. Many organizations have deployed
different components, and then they struggle get
them all working together. And then they’re fragile,
any time they need to upgrade, everyone’s afraid about,
is something gonna break? Well, as we bring these
end-to-end solutions together from Microsoft, first of all,
they’re built in the Cloud. The architecture of these Cloud
services, makes them much easier as an engineering team to build
them, but we can deliver these in a way that’s much more
simple, much more agile. And that simplicity, it’s
just not our simplicity, but it goes all the way
through the organization, all the way through
to the end users.>>You’re absolutely right. From the customer experience all
the way down to the environment.>>Yeah.>>Brad, it’s been really
great speaking with you. Your insights, your examples,
your pump example, the example of how your organization is
transformed, from this drop shipping of product to
end-to-end experiences. Everything from the customer and
the sprints, the journey, and that cultural change
that you describe, it’s really fascinating. And as CIOs think about this I
hope we’re able to have another part two with you,
because there’s just so much that you could
share with us.>>I gotta tell you,
we’re just having fun too. The pace at which we’re able
to innovate now and learn. It just makes it fun.>>Yeah,
I’d like to have some of that.>>[LAUGH]
>>Thank you.>>Thanks for joining us. I am keen to hear from you,
our audience. Please let us know
what you enjoyed, or what you’d like to hear
in the future episodes. I’m Jacky Wright, looking
forward to seeing you next time. [MUSIC]

Author: Kennedi Daugherty

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