Lead In 30 Podcast

Microsoft CEO Satya Nadella On Becoming a 3rd Leader

• Russ Hill

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He is the opposite of Elon Musk and "Founder Mode" being promoted by some of the loudest voices in business today. Microsoft CEO Satya Nadella talks about human-centered leadership. It's what Lone Rock Leadership Co-Founder Russ Hill says is the core of the 3rd Leader approach advocated in the Lead In 30 course. Staya Nadella transformed Microsoft from a competitive, siloed culture into a collaborative powerhouse that grew from $300 billion to $3 trillion in market value.

Link to full interview between Adam Grant and Satya Nadella: https://www.youtube.com/watch?v=G0E8eUQ5KXg


• Contrasting leadership styles: "founder mode" (directive, demanding) vs. "third leader" (participatory, human-centered)
• Microsoft's extraordinary growth under Nadella: 10x market cap, over 1,000% stock price increase
• The "Model, Coach, Care" management framework that develops great managers
• How psychological safety and vulnerability create better business outcomes
• Growth mindset as a core cultural principle: transitioning from "know-it-alls" to "learn-it-alls" 
• The power of continuous learning through daily human interactions
• Leadership that values both high performance and human dignity

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The Lead In 30 Podcast with Russ Hill is for leaders of teams who want to grow and accelerate their results. In each episode, Russ Hill shares what he's learned consulting executives. Subscribe to get two new episodes every week. To connect with Russ message him on LinkedIn!



Speaker 1:

The CEO of Microsoft reveals why great managers matter more than cutting-edge tech, how to refound a legacy company and why humility is the ultimate superpower I picked it up from my dad.

Speaker 2:

He had this diary. He would write every day where he would sort of put tasks done. People met, ideas generated.

Speaker 3:

This is the Lead in 30 podcast with Russ Hill.

Speaker 1:

You cannot be serious, strengthen your ability to lead in less than 30 minutes. I've been telling you over the last several months, maybe the last year or so, about this raging debate that's going on out there in the marketplace about the most effective way to lead. We capture it in Lead in 30 by talking about the first and second leader and then introducing this concept of the third leader, these leader patterns. If you think about contrast a few people. Okay. So on one end, kind of under second leader category and for those of you who haven't been through Lead in 30, the course you you can just understand that we call this the general. It's a standard salute leadership style in uh, in the all-in podcast, in different places they call it the founder mode. That's what the airbnb founder called it founder mode to give this famous speech I'm going to talk more about in upcoming episodes.

Speaker 1:

There's a lot of noise out there about founder mode and it's that you should be really directive as a leader of the organization. You should be very demanding. You shouldn't apologize for it. So if you think about, in modern business and today's business climate, who are really the second leaders that are advocating that position? Well, there are a bunch of them. I'll give you just a couple of names. Certainly in the past, steve Jobs leaned into that hardcore. Jeff Bezos was that way, certainly at Amazon. And then currently Elon Musk. I mean Elon Musk saying that nothing you know. You look at quotes from him. Nothing transformational comes out of a leader that only works 40 hours a week. He advocates a 100 hour a week work week. He talks about being on the grid all the time. There, in a podcast I was listening to just a few months ago, they're making fun of the Starbucks former CEO saying that you know you shouldn't really bother employees after six o'clock at night. You know those that are working the day shift. So that's really this, this argument for all in and for founder mode, whatever you want to call it like get results and do it, and if you don't want to be part of that team and it's demanding, then that's on you, right. And then you have contrast that with this other approach, which we call the third leader, which is more participatory leadership where, yeah, absolutely You're driven, the results matter a ton, and where you have to to. You want to grow and you want to transform, but you do it in a way that reflects or or acknowledges, respects the fact that you're leading humans, and so, on that side, one of the most powerful voices is the ceo of microsoft, sacha nadela. Right, just look at a few.

Speaker 1:

Well, I'm going to get into some of the stats in a minute and then I'm going to play a clip like an extended clip of an interview that Satya did that, I think, is just fascinating where he talks about several aspects of leadership that really they're foundational and core to what we teach and lead in 30 around being the third leader. How you lead matters. It matters so much. But let me get into some of the results that, uh, we'll just that you got to know that most of you aren't aware of. Most of us haven't been paying attention because microsoft doesn't get in the headlines much. I mean, it's all these other tech companies and yet what sacha and his team have been doing over the last decades unbelievable anyway. Welcome into the lead in 30 podcast. In less than 30 minutes, we give you an idea, a framework, an interview In this case that we're going to play for you, a best practices story, something for you to consider in your ongoing effort to improve strength and enhance, upgrade your ability to lead other people.

Speaker 1:

The market is not static lead other people. The market is not static, it's not stagnant, it's not standing still. You have to be adjusting, improving, upgrading the way you lead people, otherwise you're going to be left behind in the current market, which is moving at breakneck speed. If you want to find out more about our firm, the work we do with the executive teams on the consulting side of our company, or if you want to find out more about our off the shelf training for mid-level managers, we've got four main courses around the areas that for 20 years, we've just seen organization after organization. It doesn't matter whether it's a restaurant chain or an automobile manufacturer or a healthcare company or whatever it is. It doesn't matter the industry. These are the four areas that mid-level managers have to be trained in in order to scale. You can find out all about that on our firm's website.

Speaker 1:

Lone rock leadership is the name of the company lone rockio. That website's expanding every week. We're super proud of what's there and what's on the way videos, articles for you to read, things to pds brochures. You can order all that kind of stuff or you could just purchase the courses. Okay, and, by the way, I'm Russ Hilt, this is your first podcast, welcome in. I make my living coaching, consulting senior executive teams and I'm just one of the co-founders, one member of the team at Lone Rock. Leadership and the people I get to work alongside are unbelievable. A lot of the ideas, a lot of the things that I get to talk about, I'm the mouthpiece for on this, on these episodes that come from the geniuses, the just incredible, seasoned, wise people that I that I get to work with.

Speaker 1:

Okay, satya at Microsoft. When he took over Microsoft, 300 billion in market capitalization, 300 billion and now 3 trillion, 10x the. The year he took over, revenue was 86 billion. Last couple of years, over 200 billion. He's grown at 86 to over 200 billion. The um the share price when he took over, when Satya took over Microsoft, the share was $37 a share on the stock market, $425 in this month. That's over 1,000% growth. If you bought a share of Microsoft when Satya took over and you've held on to it've gained a thousand percent like. That's unbelievable.

Speaker 1:

And he doesn't make a lot of headlines and yet the way he leads is in stark contrast to a lot of the people that grab the headlines of the business podcasts that you listen to, of the, the mainstream media, the broadcast media, they love to pay attention to these controversial characters. And yet here's sacha just leading like a third leader. What we teach about clarity, alignment, movement you're going to hear those totally think about those three core areas. We teach it in our course of clarity. A leader who scales knows how to create clarity. They know how to build alignment. They know how to generate movement. I'm going to play this clip. This is um.

Speaker 1:

This is an interview that um that sacha did with adam grant. I love adam grant. He's written some amazing books. A few of them are duds, but nobody bats a thousand. And uh, and adam is from the wharton school of business where I went and did an executive course, uh, which was super cool to be able to go out there and have a little bit of an experience there. I've got a lot of respect for Adam. He generates a ton of content. I appreciate that.

Speaker 1:

Again, none of us agree with everything everyone says, or lots of things that Adam advocates in the world of leadership that I just frankly don't agree with. I think they're a waste of time. I think that they're not backed up by real world application. They're more driven by kind of his worldview and not so much. There's not so much of a business case or his political views. So, but you know he'd say the same thing of anybody else. So, but, but, but he puts out a ton of great content and I appreciate the contribution he's trying to make out there.

Speaker 1:

So Adam Grant at the Wharton School interviewing Satya Nadella, and they start off by talking about this transition from the pandemic to the post-pandemic world. This interview is a couple of years old. I'm going to put a link in the show notes I'll have our team do that so you can click to the full interview if you want to watch it. It's about 30 minutes long. I'm only going to play like 10 minutes of it here.

Speaker 1:

And Sat as talking about this transformation of back to work and the value that he's seen. Listen to him, talk about this. This is a guy leading a tech company, right, his company sells technology solutions to enterprises. That's where they make most of their money getting you to buy teams, getting you to buy OneNote, getting you to buy Word and PowerPoint. They sell technology solutions. And yet he says, more valuable than tech solutions in your organization is the, is the quality of training, is the quality of training? Listen to this the quality of training and development you give to managers. So he'll start talking about that and then he'll get into some other concepts. I'll come back at the end and share a few thoughts.

Speaker 2:

Here's Satya Nadella with Adam Grant and so, therefore, managerial capability quite honestly, I think tech companies in general have had this thing about hey, it's all about technology and management is not the critical thing, except everybody's realizing and waking up and saying, look, leadership and management and technological excellence both go together and we actually have to put our money where our mouth is and focus on building that managerial capability. And so we have this framework Adam called model coach care, which is sort of the thing that we say every manager needs to sort of exhibit in terms of real skills, and I'm glad we got that started a few years before the pandemic and it's really helped us a lot during the pandemic. But I think that it's now become really clear to me that this is what the company's success depends on great everyday management, because otherwise, you know, it's very, very hard to tackle some of these things that we're talking about.

Speaker 3:

That approach of model coach care, I think has been central to one of the major culture changes that you've spearheaded. Of the major culture changes that you've spearheaded, there was a time and I'm not going to locate it, but you can when Microsoft was externally known for a lot of internal competition. Forced rankings that pitted people against each other were pretty popular and you came in and challenged that dynamic and said look, we want to collaborate, we want to be one Microsoft. Can you help us understand how you made that change real?

Speaker 2:

Yeah, I mean there were two things that I tried to focus on. Quite frankly, the way I came at it, Adam was starting even with the very basics of being essentially the first non-founder CEO. I felt the real need to in some sense re-found the company, borrowing the phrase that Reid Hoffman uses, which I like a lot, because from time to time companies need that moment where you need to reground yourself, you know, and starting with both the sense of purpose and mission, like why do we exist? And if we sort of disappeared, would anybody miss us To remind? Because I think every one of us who work in any company need that anchoring in order to then go on to make all the decisions and work we do. So I focused a lot on that purpose and mission.

Speaker 2:

And then the other one was to really put forth the culture that we aspire to, and that's where I borrowed from Carol Dweck's work on growth mindset, which has been a godsend to us, because it's really helped us go from being these know-it-alls to learn-it-alls, at least as an aspirational state, and the good news is the day you say we have the growth mindset is when you become a know-it-all, and so, therefore, it has helped us continuously think of this as, hey, a process of constant renewal, and that mission and culture has given us perhaps Adam, more of that permission to look inwards, look to what systems, processes, behaviors make us successful in the first place, and reinforce them. And then, the same thing what systems, processes and behaviors make us sort of not successful, and then get rid of them, or at least try to not have them reappear as often as they do, because there are regressions always.

Speaker 3:

One of the things that I would love to hear your reaction to is I've found in some of my latest research that it's not enough just to admit that you have things to learn as a leader. It's helpful to ask for feedback and open the door, but what's much more powerful is to actually criticize yourself out loud, because that way, you're not just claiming that you're receptive, you are proving that you can take it, and one of the things I've admired about your leadership for a long time is the humility and vulnerability that you show, that you're not afraid to admit when you don't have all the answers or when you made a mistake or got something wrong. Can you talk to us a little bit about how you built the confidence to share your mistakes and what that looks like doing it effectively?

Speaker 2:

That's a great question, you know. I think a little bit of that comes from, I think, feeling very secure, right, I mean one of the things that I was talking to one of my members of our senior leadership team, and you know he's really doing a fantastic job of what he calls the safe space, right, I mean the psychological safety that one creates around you, especially the most senior you are, becomes, I think, super important, becomes, I think, super important, and to your point, one technique of that is to share your own fallibility, because that gives confidence to others. And so I think that that's, you know. Again, I go at it two ways. One is that personal trait of sort of having feeling secure leads you to be more vulnerable. But then the real issue is, systemically, how do you help people feel secure? And so that is where the cultural element of having psychological safety as being a first-class thing that's talked about, where people are not jumping down people's throats the first time they admit a mistake which, by the way, I do sometimes. And then I have to check myself right, because someone even asked in my last staff meeting somewhere, asked me this question hey, when somebody sort of sends a mail where you know something's wrong, what do you do? And I thought about it for a while and I said you know, the first thing that comes to mind, of course I want to send back a flame mail too, like in the next person. But then at good times I check myself and say, god you know, all that will do is cause that person to be more stressed. But I got to really look at the systemic issues here and then help them recognize to fix it. So the more introspective we are in creating these safe zones and psychological safety as a cultural thing, as opposed to any one individual being vulnerable from time to time, I think is probably the most important thing that everyday practice of figuring out what is the lived experience of the people in your team.

Speaker 2:

So when you think about when in the model coach care, that last element of care, it's that extra level of thought that you put into. Who are all the people on my team and, if anything, the pandemic has really grounded us on. Look, we all went collectively through this one big tail event. The reality is, all of us have different histories, different backgrounds, different tail events impacting us and so being able to deeply have empathy for that and then making sure that their voice is heard in a meeting. That flexibility we talk about is being exercised to help people do their very best at work while they can take care of everything that's needed in their life. That is what I think is the big thing, that I think we're all I would say we're much more capable today just because of what the trauma of the pandemic has taught us that Now the question is how do we exercise it? Even when quote unquote, things get back to normal, because the reality is all of us, as you said, come from different places, we have different histories and our everyday experiences are different.

Speaker 3:

One of the things that I love most getting to sit down with leaders that I look up to is not just hearing them talk about how they think, but actually observing them in action and getting them to see them do what they do best.

Speaker 3:

And speaking with your team and also, having seen you a few times over the years as we've interacted, I know one of the things that you excel at is just motivating people to do things they think are impossible, and I wondered if we could do a quick role play to get a taste of how you do that. So the scene is we've got a bunch of faculty at Wharton who like to do their own independent work. They're very much kind of living in their own silos. They don't collaborate as much as we might like. We don't even necessarily have a school mission that they rally around, and I kind of like my independence. That's why I chose this field, and tenure is something that gives me lots of freedom. Can you motivate me to collaborate more and to show up at the office occasionally? And full disclosure. I don't want to do it.

Speaker 2:

No, it's a great look, first of all, I think it all the motivation has to come from what it is that you as a researcher are trying to do and how teaming can help you do that better. Right, this notion of what you do or what your team does versus the leverage you get from teaming is what needs to, you know, really intellectually and emotionally sort of make sense to you. So one of the things, even at Microsoft, quite frankly, is we're trying to emphasize, hey, great teams are important, but great teaming is the currency. And in fact one of the phrases I use, getting to yes on unmet, unarticulated needs of customers is what requires great teaming. So you know, in your context it will be like, hey, that research paper, that research output will be better and you will do.

Speaker 3:

you know you, you'll have more fame and fortune if you team better with your colleagues, and if I'm not motivated by fame or fortune but really just enjoying my freedom and my intellectual exploration.

Speaker 2:

Even, even intellectual exploration. Think about, like, what is the source of intellectual exploration, even intellectual exploration. Think about, like, what is the source of intellectual exploration? It's sort of your own ability to learn from others, and so therefore, your colleagues I mean think about, like I always think about the daily routine, the number of people I meet and how I was able to go explore new things because of the people and what I learned from them.

Speaker 3:

And that I mean stepping out of this for a second. That is what strikes me so much when I think about what it means to be a learn-it-all or a lifelong learner. Is you genuinely believe that you can learn something from every single person you interact with A hundred?

Speaker 2:

percent. I mean like. To me, that is the like. In fact, you know, there's a thing that I look at as my learning system, if there is one. I picked it up from my dad. He had this diary. He would write every day where he would sort of put tasks done. People met, ideas generated to act on, and I love that, which is, and the source of basically the ideas generated to act on are people and also the work you did, and so that to me, is a continuous system so the work you did, and so that to me is a continuous system.

Speaker 3:

That is such a simple way to take the to-do list that everybody gets stuck on and say, wait a minute, I should also have a to meet and to learn list.

Speaker 2:

Absolutely and in fact turn every meeting like. That, to me, has been one of the greatest blessings is, when I look at any meeting, what did I like? It's sort of like there's always signal and noise. People get caught up on the noise but the bottom line is just trigger. I mean, just focus on filtering for signal signal and noise.

Speaker 1:

That's an interesting concept to think about as he wraps up. I've been, if you go back, 10, 15 episodes. I'm talking about reducing the noise in your organization. There's so much inefficiency. Anyway, I'm not going to add a lot to what Satya said. How good was that? This can you just hear and feel and sense?

Speaker 1:

The third leader in them, this is somebody who demands performance. I mean he's increased the stock price of Microsoft a thousand percent during his decade of leadership. He's driven revenue growth an enormous amount. I mean all the stats that I started with unbelievable. He does not tolerate a lack of performance and yet you can just hear, you can sense his humility, his ability to or his understanding of how important human capital is, even as the CEO, the chairman of a technology company. This is one side In one of the upcoming episodes I'm going to play for you.

Speaker 1:

The other debate, the founder mode, the, the, the second leader, those that are advocating that this is what we are. This is this. This is the punch line. I'm not saying satchin, adela or any leader or executive is perfect out there now that we've all got flaws but the. But being able to be driven, demanding results, running an efficient organization producing an impressive track record while leading in a way that mobilizes humans and realizes that these are humans, not machines, is enormously valuable. I hope you got a lot out of that clip from Satya Nadella, the CEO of Microsoft, talking with Adam Grant. The link to the full interview, which I highly recommend, is in the show notes, and that's what's on my mind, what I want you thinking about in this episode of the Lead in 30 podcast.

Speaker 3:

Share this episode with a colleague, your team or a friend. Tap on the share button and text the link. Thanks for listening to the Lead in 30 podcast with Russ Hill.