As chief learning officer at Microsoft, Joe Whittinghill was part of the team that led high- profile and successful corporate culture changes. During a recent visit to Australia, he discussed the critical steps for executing wholesale change and the benefits that ensue.
Eight years ago, Joe Whittinghill was completely focused on mergers and acquisitions at Microsoft head office in Washington. Shortly after the tech giant announced new CEO Satya Nadella in 2014 (who would also assume the chair role in 2021) and new CHRO Kathleen Hogan, Whittinghill joined them (as corporate VP of talent learning and insights) to overhaul company culture, partly due to his extensive skills in organisational development.
“Microsoft was still one of the most profitable organisations in the world, but we were no longer one of the top 10 places to work among university graduates,” he says. “We needed to rethink how we interacted with each other and with our customers.”
At the time, Microsoft had around 140,000 staff and a presence in 190 countries. Nadella was eager for the company to embark on a triple-focused overhaul of business, tech and people strategies.
“Generally, you don’t have to do three simultaneously,” says Whittinghill. “It was a daunting and exhilarating project to take on.”
Need for change
There was a clear shift in priorities at the company when Nadella held his first meeting with shareholders later that year. “When our CEO came out on stage, he didn’t talk about Windows or Azure,” says Whittinghill. “He talked about the imperative and existential need for Microsoft to change its culture. It was unexpected by everyone and signalled a new day for the company.”
The mandate for change was clear. By deploying its extensive sales force teams as focus groups, Microsoft asked customers and partners how it could improve its ease of doing business. The outcome was a goal to become customer- obsessed and increase cross-group collaboration to drive speed and innovation.
Microsoft also consulted its staff about how it could modernise as an employer. By becoming more flexible and inclusive, it would attract a more diverse group of individuals to join its teams. The culture change team was encouraged by Microsoft leadership to move quickly.
“People often asked me how we achieved the change at speed on such a large scale,” says Whittinghill. “We were clear about what needed to change. We didn’t spend a whole lot of time planning. We just got moving.”
However, at the end of the first 12 months of the culture change process, it was clear it needed to slow down. “We needed to close the gap between awareness and adoption, as many employees hadn’t necessarily had the chance to integrate the changes into their day-to-day work, even though they were aware of them,” says Whittinghill.
Nonetheless, he recommends moving at pace when it comes to culture change, as it is often slower to “bake in” than anticipated. He also advises utilising as much data as possible to make improvements in people-management policies — from external data to financial and employee sentiment data. “Boards should be mindful some of these changes will take a bit more time than they are generally comfortable with,” he says. “It can require... playing the long game. But the entire time, you can be measuring those changes.”
The change management plan didn’t focus on culture per se. “We actually didn’t work directly on culture,” says Whittinghill. “We worked on everything else, because we believe culture is a mirror of everything that is going on in the organisation. We looked at how we sell our products and services, what the employee experience was like and how we interacted with our people.”
Microsoft collaborated with the NeuroLeadership Institute to identify what worked and what needed to change to benefit staff and customers. “We had many different views of what leadership meant, instead of having a single, global understanding of what Microsoft expected of its leaders,” says Whittinghill. “Today, if you ask any employee, they will be able to identify three key expectations: to create clarity, generate energy and deliver success.”
The company also recognises that qualities such as self-awareness and empathy are key attributes of modern leadership. Adaptive leadership is preferred over the command-and- control styles popular in the past.
“A leader can admit to not having all the answers,” says Whittinghill. “There is strength in that. It is better than falling into the trap of coming up with something quick and fast. If we take a bit more time, we’re more likely to find the breakthrough idea that brings true innovation.”
A more compassionate organisation
Modernising company culture meant making it less hierarchical. Employees are deemed to be leaders in their own right, whether leading a sales team or an entire division. Microsoft managers were imbued with the expectation to “coach and care”, which represented another major shift.
“If you had told me seven years ago that Microsoft would have ‘care’ as one of its frameworks for our employees and managers, I might not have believed you,” says Whittinghill.
For the first time in Microsoft history, it held what it called “values conversations” (today known as “culture” conversations). Staff were asked to be frank in their assessments of what was working and what wasn’t. Rather than using consulting firms, Microsoft deployed its own managers to lead the four-hour sessions.
The company may have been ahead of the curve, as conversations once off the table around mental health, work-life balance and societal issues, became part of everyday vernacular. Whittinghill says the company entirely reimagined its relationship with its employees. This concept of care enabled Microsoft to navigate the difficulties staff and customers faced during the pandemic.
Another key reason for Microsoft’s appeal as an employer is the opportunity for upskilling that it provides. It has reorganised all its learning organisations to ensure they deliver skills that future-proof its staff. According to internal Microsoft data, training and development opportunities are commonly cited as being within the top five most important considerations in taking a new job for younger generations.
“Part of our employee promise now is to make sure that we provide all the skills training our people need to do their job today, as well as the skills they will need in the future,” says Whittinghill. “AI is an example. It isn’t just about learning how to apply AI — it is understanding the ethics of its use and to think about the guardrails that need to exist around privacy and other issues.”
Microsoft is once again one of the most desirable companies in the world at which to work. Among the Big Five tech companies, Microsoft was the second-highest ranked workplace in 2023 on independent employee review site Glassdoor. The 43,000 employee reviews typically cite Microsoft’s inclusive work culture and effective leadership by the CEO as reasons for giving it a rating of 4.4 out of five. Whittinghill notes that Microsoft also has an unusually high number of “boomerang employees” who leave the company, only to return. “We ask them why they came back. The number- one answer is culture.”
Bringing about successful culture change
Be clear on why change is needed: The first thing a board needs to ask themselves is why they need to change their culture. The second question is who are the people needed to get that work done? I’d always suggest that you begin by talking to your customers and partners. Ask them what they think — they might give you incredible insights about things you may not be seeing.
Don’t automatically change everything: Culture change isn’t about having to change everything. You want to harvest what is still working for you and honour the past, which is the core of what your organisation is and what has helped you to be successful. Focus on changing only the things that need to be changed.
Don’t confuse culture with comms: They’re a critical part of the work to create a new culture, but culture is about more than getting clear in what you’re saying. It’s about a firm belief what you’re saying to your employees is true. Culture lasts if you work to preserve it. Microsoft hasn’t changed leadership principles, manager expectations or cultural attributes since they were introduced. They’ve been durable because we took the time to get it right.
Seamless succession and talent growth requires taking certain bets: Boards and leadership teams globally are more focused on getting talent development and succession planning right, which often gives a company its competitive edge. When looking for candidates, it’s wise to consider those you normally wouldn’t as more junior employees can often outperform others. And forget the succession plan formula, assess all possibilities instead.
This article first appeared under the headline 'Culture Club’ in the February 2024 issue of Company Director magazine.
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