Adi Ignatius, editor-in-chief of Harvard Business Review, spoke with Microsoft CEO Satya Nadella to have a conversation about the future. Nadella believes that technology could create a metaverse that helps connect the virtual world and the real world. He also talked about experiments at Microsoft and elsewhere that ensured that the relationship between the weak and the strong remained strong in mixed work, and discussed the overwhelming power of empathy as a leader and catalyst for innovation.
Adi Ignatius: Few people know more about working platforms and ways to work together efficiently than you do, the concept of work, the way we collaborate and innovate, all of which change with the growth of the business, the changes in technology, the attitudes and powers of employees. In your opinion, at what stage in this transformational journey are we in? How will the work scene change in the foreseeable future?
Satya Nadella: We're coming out of this outbreak or going through different phases of the pandemic. I think society is undergoing real structural change because I describe it as two big trends, one is the trend around mixed work, which is the result of a change in people's expectations of flexibility in the way and when and where they work.
The second trend is what LinkedIn CEO Ryan Roslansky calls the "grand reshuffle." It's not just about when and where people work, it's about why they work. In a sense, people really want to redefine what work really means, what company they want to work for, what job function or career they want to pursue.
So mixed work and the "big shuffle" are two major trends that fundamentally change everything we do.
Adi Ignatius: I'd like to know how you define flexibility. Because on the one hand, flexibility sounds great, leaving individuals and teams to decide how, when, and how they want to work together. But if a large company wants to maintain a certain corporate culture, it needs everyone to be able to get together, and this can weaken flexibility, how do you balance these two demands?
Satya Nadella: First of all, we should build on what we see as expectations. For example, when we see all the data show reality close to 70% of people say they want flexibility. At the same time, 70% also want to have an interpersonal connection so they can collaborate, which is, in a sense, a paradox facing hybrid offices.
Another set of data is more interesting: About 50 percent want to work in the office so that they can dedicate their time; nearly 50 percent want to work from home for the same reason.
So I would say that it's better not to be too dogmatic for now, because we haven't identified new norms yet. These norms must be established so that we can judge the causal relationship and general situation of productivity and flexibility. But in this case, we need to take a more organic approach, empowering every manager and every individual to try to come up with norms that fit the team based on what they're doing.
For example, if I manage a team of five, I need to know if anyone on my team has children who aren't vaccinated and how childcare is doing, what's going on today, etc. For the future, I think everyone is reluctant to go back to the 2019 model because telecommuting can also be efficient.
In a sense, this organic way empowers and builds new, effective norms that make companies productive and provide customers with products and services they love in this operating model, thereby improving company performance. But if structural changes in the way employees produce products and services are ignored, which increase productivity and people's expectations change, it is imperative to find patterns and guidelines to match.
Adi Ignatius: You mean, first, we're not going to go back to the pre-pandemic work model; second, work is more complex now, and we want to give management, HR, and every employee the flexibility and adaptability rather than a one-size-fits-all approach to talent management.
Satya Nadella: Yeah, first of all I think the economy is very diversified right now, and even at the height of the pandemic, all the health workers, the retail workers, the key manufacturing workers are coming to the workplace. So, to some extent, the world, economies and societies are more diverse in terms of expectations, habits and needs in the workplace. We need hospitals to have professional medical personnel, and we also need people in different positions to perform their duties.
That said, I do think the new tool brings real structural changes. Take space as an example: I've been described to the idea that physical space is probably the best productivity tool we've found since the industrial age, and there hasn't been any replacement for more than 200 years, and we've turned physical space into a wide variety of workplaces — production lines, retail stores, outlets, office parks, and so on — to drive productivity by bringing people together to build common goals, missions, and connections. I wouldn't trade it for it, but can we use the space to make it match the expectations of our employees and the task at hand.
For example, we are redesigning some of our campuses, we love these campuses and will still use them, but the way managers and teams use them will change. For example, if we have a design meeting or an emergency software product meeting, we can call people offline, but at the same time we can use the remote meeting tools built during the epidemic to include more participants. So I think we're going to use all kinds of digital technologies to turn the workplace into a more malleable resource.
Adi Ignatius: Now that these ideas have changed, employees are empowering more than ever, in part because employees feel that their choices will force all of us to respond as managers. Combined with the evolution of workplaces and concepts just talked about, how do you think talent is going to be attracted and retained today?
Satya Nadella: Someone once said to me: People usually quit not because of the company, they quit because of the manager. This phrase is one of the most important realizations I have gained after working at Microsoft for so many years, after all, it is the colleagues I work with who help me to keep moving forward, and when this driving factor is no longer there, I will change the environment or re-evaluate the status quo. So I think each of us must take a deep look at our own life experiences, our cultures, and the connection between our philosophies and the company's mission and philosophy.
I always say that if everyone who works at Microsoft switches their thinking: "It's not me working for Microsoft, it's Microsoft working for me" even if it's just as a thought experiment, what difference would that make? Will I be able to achieve my career ambitions and the ways in which I have made an impact on the world? If Microsoft were as a platform, it would be very different.
The two areas I focus on the most are helping managers recruit and retain talent, for which we have a dedicated framework, from the management side, it is essential to practice good management concepts on a daily basis; and the second is the level of employees, we try to make them feel as connected to the company's mission as much as possible, and strengthen the interconnection between colleagues. Because Microsoft has a campus in Redmond, Washington, a lot of wonderful things happen here. When you come to the park and work with your immediate team in the park, this situation forms a strong relationship.
In general, colleagues who work directly together have stronger connections and other connections are relatively weak, and we have found that the epidemic has made stronger connections stronger and weak connections weaker. But our job is to make weak relationships stronger through various software tools. Because it is these seemingly fragile relationships that make everyone choose to stay here. Without a direct connection between people, without a connection between employees and managers, without a connection with other employees, it will be difficult for the enterprise to function.
Adi Ignatius: Can you talk more about weak relationships? Because I think a lot of us believe that these weak connections are actually very important for sparking innovation, cultural awareness, collaboration, etc., please talk a little more about how you use technology to define and improve these relationships.
Satya Nadella: Yes, the data point I'm citing is from Microsoft 365, and the data shows that strong connections have increased by 26%, and these connections are mainly through email, meetings together, and other intra-team communication.
Weak relationships are formed between people I meet in front of the water dispenser, in the elevator room, on foot or on the bus to the park. These places are full of randomness, so we developed a tool called Microsoft Viva, a new employee experience platform.
It allows me to see employees send out group chats and opinions while attending meetings, and as a Microsoft CEO, I also attend many meetings and listen directly to people's opinions, but the people who speak in these meetings are a minority after all, but through Viva I can see the ideas of these people.
Now I can not only hear what employees think, but also click on the avatar to learn more. When I click on my profile picture, I'll be taken to the Microsoft 365 rich profile display page, which shows their profile on the LinkedIn platform, as well as the work, document, or presentation they're working on. Viva can also tell me about the projects they are responsible for and the expertise they have. It uses artificial intelligence to extract detailed internal information, which gives me more opportunities to make unexpected discoveries than to meet someone on the elevator, which is what I call software assistance to enhance weak connections and explore more possibilities.
Adi Ignatius: In addition to Viva, what other platform-based tools do you have for internal use, and will you launch these products or platforms in the future?
Satya Nadella: We have a lot of products in our experiments that are productivity-enhancing tools, so the tools we use internally are seen as products that can be provided externally. At least at Microsoft, that's good practice. We do do internal trials, and many of these products will eventually be released to the public.
I've always believed that a company's most important strategic database is the knowledge base for all the communications within the enterprise, and it's great to be able to search for those exchanges.
Another change I've personally experienced is that meetings are now much more than the meetings themselves, where I used to have to review meetings with memory or rough minutes, and now every Microsoft meeting is recorded with the permission of all attendees, and the recording is indexed and I can search by topic or speaker. From this perspective, every meeting is converted into a file, and the content and keywords in it are readily available. Digitize all the communication and work, and I think that's going to be a huge change.
Adi Ignatius: You mentioned AI, how will businesses outside of Microsoft use AI effectively in the workplace? How do you think AI will change the way we work?
Satya Nadella: Simply put, the power of AI lies in making more analytical and predictive use of the data we have. AI has the ability to acquire structured, unstructured information, especially with the advent of large, dense models, which are multimodal. The data here refers to all kinds of structured and non-structural information, including texts, speeches, pictures, and so on.
I can use AI to complete emails, I can have it help write code in GitHub, and I can even use it for machine translation. For example, a French conference can be translated directly by machine synchronization with real-time subtitles, and then I can search in various languages, really breaking the language barrier.
I think AI will show a higher level of automation, a higher level of intelligence and predictive power in the everyday experience. So from the perspective of enterprise users, the changes brought about by AI will be presented with new features in the product. In the future, we can let people who use Excel tables use AI models as a foundation and platform to build applications as simple as using various functions in Excel.
Adi Ignatius: Let's talk about the metacosm, which is mentioned frequently now, do you think we're going to move towards the metacosm? What will it look like?
Satya Nadella: First of all, I think the whole concept of the metaverse is: as we more and more embed computing technology into the real world, we can even embed the real world in reverse into computation, and that's my general idea. One metaphor I often use is both outside-in and inside-out, like you can digitize a space with a lot of cameras and microphones, and you don't even need to wear any digital devices to do that.
In the case of a meeting, for example, participants enter a room, are placed in their respective areas, and then digitally placed in the meeting as if everyone is participating remotely, and the people who are really remote participants can see them, and at the same time directly access their personal information, and so on. Someone is in the physical space, someone is participating remotely, and then everyone is connected. You can even put on a device like a holographic lens to an immersive meeting, represent yourself with a hologram or avatar, and communicate with others with the aid of spatial audio.
In fact, we have a similar meta-universe product called Alt Space before, Accenture's Nth Floor is a great example of this product use case, Nth floor allows Accenture employees around the world to join this virtual space in the form of avatars through virtual reality devices, and interact with others.
I think that the concept of using a virtual image, eventually entering a virtual space in the form of a hologram, interacting with others, and establishing a spatial relationship with others through tools such as spatial audio is another form of video conferencing. So the process of upgrading from traditional video conferencing to 2D avatars and 3D immersive meetings may lead us to think more realistically about how the metaverse will emerge.
Adi Ignatius: It sounds like this is going to change everything, and it makes me wonder, when there's hologram interaction or something else, do we rethink the value of meeting in person? Most people may find it far-fetched, but it's actually a very rewarding interaction.
Satya Nadella: Yeah, for example in an immersive meeting, you might be writing on a whiteboard in an avatar or through HoloLens, and other people are also wrapped around the whiteboard in an avatar, which is a completely different experience than you're writing on a whiteboard in a video conference.
There is no doubt that this is a step towards physical existence. But I think we also have to be down-to-earth, because there is no substitute for this co-occurrence with the physical world. What I'm seeing is a kind of coherence, from email to audio calls, video conferencing, immersive meetings, to real-world meetings. Going back to your previous questions, these will provide more choice and flexibility in maintaining interpersonal and connectivity.
Adi Ignatius: Given all these changes that are happening in the workplace, with our experimentation and regression work, what should good leadership look like in this complex transition period?
Satya Nadella: That's a good question, and I've been thinking a lot about what good leadership, or good management, is. That's why we started emphasizing a year before the pandemic that at Microsoft, we can only shape and reinvent the life experience for our employees by having good managers. One of the things that my career has taught me is that great managers must keep learning every day and update their understanding of leadership.
So we came up with a leadership framework called Model Coach Care, and it worked so well that you needed to model the results you wanted and then play the role of coach in the team; what does Care mean? In the case of long-term contact between people, care means that you have empathy for your employees and think from their point of view. It is not only the small probability event of the epidemic that affects everyone, but everyone will be affected by some very different tail events. And managers who are aware and concerned can make timely judgments to help us get through the storm.
I feel like it's the most important thing I've learned, and great managers are irreplaceable, and of course data can assist them, like Viva I just mentioned, that can provide managers with personalized information about their employees and help us become better managers.
Adi Ignatius: You're a very thoughtful business leader, and I think great leaders in general aren't born, they must be growing, which grim moment in your life and work really changed your trajectory, or was it important to the development of your role as a leader?
Satya Nadella: There were two most important moments, the first was when I first became a manager, and there were 5 people who reported to me, and these people thought, "Why is he leading us, and my boss has high expectations of me, I want to be able to manage the team while being productive."
After going through the difficult process of being expected in both directions, I really understood what it takes to be a leader and manager. I can't just do my job well, I have to be a manager. Then as I moved up, I faced more diverse expectations and needs, so this first shift in identity was very important to me.
Another thing, around the middle of my career, was that I had a conversation with my boss at the time. He said, Satya, you might go to work at Microsoft. He turned out to be right. And I've been at Microsoft for almost 30 years. He said that you must use this time to establish connections with the company and colleagues, and not let it become a transitional period, I did not fully understand what he meant at the time, but I now understand more and more that instead of making a job a transitional period in your career, it is better to play a greater value and do more meaningful things.
Adi Ignatius: Finally, a question from a reader, what do you think is the most important source of innovation? Diversity, skill level, humanity, employee fairness or something else? Why?
Satya Nadella: Empathy. I think the ability that most of us have with life is the ability to think in empathy, to see things from the perspective of others, and that's empathy. Innovation is about meeting unmet, unspecified market needs, which ultimately refers to the unmet needs of those people or organizations made up of people. So you need to have deep empathy. So I think the core source of innovation is precisely the most humane quality - empathy.