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How to Lead with Empathy

Written by: Rotman
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Empathy should be a requirement for business leaders, according to Microsoft’s CEO Satya Nadella.

When some people hear the word empathy being used in a business context, they think What does that have to do with business? How do you respond to that mindset?

I would argue that empathy has everything to do with business. If you accept that innovation is about meeting the unmet (and often unarticulated) needs of your customers, you have to ask, “How can we get in touch with those unarticulated needs?” Only through our ability to listen to people, observe them, read between the lines and extrapolate. That requires a deep sense of empathy — making it a necessary ingredient for succeeding with any innovation agenda.

At Microsoft, we are rising to this challenge by putting the necessary conditions in place for our people to develop empathy. One word we use a lot is respect. If you don’t start from a place of respect for the other person’s viewpoint — their history and their mindset — it will be very difficult to develop empathy for them. Way before you think of any of the high-level things, like the new products or services you will eventually introduce, you have to address these basic elements.

Before you became the CEO of Microsoft, you headed up its Cloud business. Did you realize that role was putting you on a path to become CEO?

Not at all! I don’t think I had even thought about a Microsoft where Bill [Gates] and Steve [Ballmer] were not actively engaged. Business school graduates are an ambitious lot, and many of them ask, When can I become a CEO? My advice is as follows: Don’t wait for your next job to do your best work. If you think about every job you have as the most important job you will ever have, good things will happen.

The true currency of a great culture is inclusiveness. Achieving that is the core job for today’s leaders.

Satya Nadella

When you took on the role of CEO, you faced very high expectations. You were following two legendary leaders in the role, and many people felt the next CEO should come from outside. How did you handle all of that?

I was a consummate insider. I have literally grown up at Microsoft over the past 28 years. Even though Steve was not a founder, he had founder status. Together, he and Bill built this company. As a non-founder CEO, I recognized that I needed to make explicit some of the things that founder CEOs take for granted, just by virtue of what they mean to the organization. I had to rekindle and reinforce our original purpose. Two pillars — our sense of purpose and the corporate culture — had to be made explicit.

When I joined Microsoft in 1992, our mission was bold but simple: To put a PC in every home and on every desk. That was pretty inspiring. Except by the late 1990s, we had more or less achieved that in the developed world. Since then, we struggled for some time with, What’s next for us? I believe everything that needs to be known about Microsoft today can be traced back to our origin, which was based on the idea that we are building technology so that others can build more technology. We needed to get back to that core identify. Of course, we had to express it differently, and that led to us describing our mission going forward as empowering people and organizations.

We also had to work on our culture. I think it was 1998 when we found out we had become the largest market cap company in the world. I clearly remember that day: When you walked around the campus, you could see that people thought, Wow, we must be God’s gift to mankind! We are all so smart! Look at us! Except that was not the case. The market cap victory was only a temporal thing. What actually matters is your ability to learn, to grow and to be grounded in the realities of your customers. As CEO, that is what I wanted: A culture that stood for being a learning organization above all else.

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