Trusting Employees to Make Decisions: The Case of Microsoft

Microsoft is a large, multinational technology company headquartered in Redmond, Washington. It develops and sells computer software, consumer electronics, and personal computers. Microsoft was founded by Bill Gates and Paul Allen in 1975, and since then has grown to become the world's largest software maker by revenue. Satya Nadella was appointed CEO of Microsoft in 2014, after serving various senior management roles with the company for over two decades. According to Nadella's book, Hit Refresh, the culture he inherited as Microsoft's CEO was in need of an overhaul, writing "Hierarchy and pecking order had taken control, and spontaneity and creativity had suffered." With this in mind, Nadella rolled out a new company mission statement: "Our mission is to empower every person and every organization on the planet to achieve more." Nadella embodied this mission by striving for a company culture that would enable Microsoft employees to make decisions for themselves. According to Nadella, "The key to culture change was individual empowerment. We sometimes underestimate what we each can do to make things happen, and overestimate what others need to do for us." He illustrates this concept with a story about a companywide Q&A session in which an employee asked him why Microsoft offices weren't equipped to enable printing from mobile phones. Nadella responded, "Make it happen. You have full authority." Nadella asserts that leaders do not dwell on constraints. Instead, leaders are the "champions of overcoming constraints." By trusting employees to take initiative and make their own decisions, Nadella seeks to have a growth culture where employees learn through experience. He believes this sense of individual agency and responsibility will contribute to the company's continued growth. Nadella believes in the potential for everyone at Microsoft to grow and develop, and that individual potential is nurtured, not predetermined. He claims a company's ability to grow depends on its employees' ability to learn from their mistakes. Such mistakes, when transformed into learning opportunities, enable the organization's culture to evolve in tandem with the behavior of its employees. This mindset has permeated Microsoft's culture and policies in the time since Nadella took over. According to the company, "At Microsoft, we strive to have a respectful, rewarding, diverse, and inclusive work environment that enables our employees to create products and services that help others to achieve more." In stepping back and empowering employees to do more themselves, Microsoft is taking important steps toward fulfilling its broader mission.

Please read Case Study (Trusting Employees to Make Decisions: The Case of Microsoft)and also watch the associatedvideo. https://www.youtube.com/watch?v=bpNWwzNNWNM

1. Do you think individual empowerment is a good strategy for overcoming organizational hierarchy? Why or why not?
2. If you were a Microsoft employee, would Nadella's leadership style inspire you to take initiative and make your own decisions?
3. What risks are associated with trusting employees to make their own decisions? Do you think the benefits outweigh these risks?