Culture Transformation at

Microsoft:
From “Know it all” to “Learn it all”

Caslin Liu
Senior Facilitator, Global Leadership Program
Harvard Business Publishing Corporate Learning

November 28, 2023


Caslin Liu
Areas of Expertise:
Talent Management
Organizational Behavior
Relationship Management
Sales & Marketing Management
Business Strategy Development
Driving Digital Learning
Caslin is a Senior Facilitator of Harvard Business Publishing and the founder of
EVOL Consulting. In her career that spans over 27 years, first in sales and
business management, and later in Talent Management and Learning &
Development, Caslin has worked with some of the world’s top research/academic
institutions and Fortune 500 companies. Her work also includes business
relationship management across hierarchical, multicultural and international level.
With her rich experience in sales and business management, Caslin is able to
train and coach sales and leadership team with strong credibility. She is also
highly skilled in performance consulting work to identify performance gaps and
help individuals and organizations achieve their goals.
Since starting with Harvard Business Publishing in 2013, she has facilitated close
to 1000 virtual and face-to-face learning sessions. She regularly works with
clients such as AMEX, Apple, Coca-Cola, Capital Group, DBS, Hilton, MetLife,
Saudi Aramco and Thermo Fisher Scientific.
Caslin has a degree in Chemical Process Technology. She completed her Master
Degree in Management (MM) and Business Administration (MBA) with Macquarie
Graduate School of Management. She is also a certified trainer on SPIN selling
skills and a certified practitioner of Neuro-Linguistic Programming.
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Case Discussion

Agenda:
• Case debrief
• Making sense of the insights
• From concepts, to ideas, to action
CASE SUMMARY

 Satya Nadella takes over as Microsoft’s 3rd CEO

 Inherits an organization with a debilitating cultural
landscape
 Invites Kathleen Hogan as a partner in driving a
cultural transformation across 130,000+ employees
 Inculcates Growth mindset as the cultural lever
 Together, along with other small and large change
initiatives, moves from a Know It All to Learn it All
culture

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Case Discussion

Reflection

What were the challenges that

Nadella was confronted with?

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Case Discussion

"was regarded by Wallstreet and Silicon Valley as fading toward

irrelevance"
Exit Bill Gates
Enters Steve Ballmer

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Case Discussion

EMPLOYEE TESTIMONIALS
94% 99%
“I was told in almost every review that the political
game was always important for my career
development,” reflected one former Microsoft engineer.

Ultimately, “staffers were rewarded not just for doing

well but for making sure their colleagues failed.”

As one product manager remembered:

“If you don’t play the politics, it’s management by
character assassination.”

“Instead of a culture that said, ‘Let’s experiment and see

which ideas work,’ the culture is one of, ‘Let’s kiss
?
enough ass so maybe they’ll approve of our product’,”
said one Microsoft executive

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Case Discussion

EMPLOYEE TESTIMONIALS
94% 99%
“I was told in almost every review that the political
game was always important for my career
development,” reflected one former Microsoft engineer.

Ultimately, “staffers were rewarded not just for doing

well but for making sure their colleagues failed.”

As one product manager remembered:

“If you don’t play the politics, it’s management by
character assassination.”

“Instead of a culture that said, ‘Let’s experiment and see

which ideas work,’ the culture is one of, ‘Let’s kiss
29%
enough ass so maybe they’ll approve of our product’,”
said one Microsoft executive

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Case Discussion

CULTURE OF COMPETITION

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Case Discussion

A CEO WHO INHERITS A CULTURAL MESS

“As a twenty-four-year veteran of Microsoft, a

consummate insider, the caricature really
bothered me.

But what upset me more was that our own people

just accepted it.

Sure, I had experienced some of that disharmony

in my various roles. But I never saw it as
insolvable.”

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Case Discussion

A NON-HR BUSINESS LEADER AS CHRO

KATHELEEN HOGAN
• BA in applied mathematics and economics from Harvard
• MBA from Stanford University
• Oracle – Development Manager
• McKinsey - Partner
• Microsoft – Head of Worldwide Services

“How can we - as humans, as leaders, and as a company - best

respond in times of uncertainty and exhaustion?”

“How can I help the company meet these challenges with

compassion, inclusivity, and shared humanity?”

HBS Case Study Cultural Transformation at Microsoft: From “Know it All” to “Learn it All”

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Case Discussion

“…I am also defined by

my curiosity and thirst for
learning. I buy more books
than I can finish. I sign up
for more online courses
than I can complete. I
fundamentally believe that
if you are not learning new
things, you stop doing
great and useful things.”

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Satya Nadella on Growth Mindset

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Case Discussion

Reflection

What does a growth mindset mean to you?

How does it show up in you and your teams?

What gets in the way?

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Case Discussion

GROWTH MINDSET

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Case Discussion

INDIVIDUAL MINDSET: HOW DOES IT SHOW UP? WHAT GETS IN THE WAY?
Traps of Fixed Example Emotional Consequences
Mindset
“Should” “I should close this deal without help.” You feel paralyzed by never living up to your own
statements “I should go to all my child’s basketball games.” expectations—or the expectations you imagine
others have for you.
“All or Nothing “If we don’t get this budget increase, then we’ll never You base decisions on emotional extremes, not the
Thinking” make next year’s goals.” more likely scenario that you’ll experience a balance
“If I don’t get promoted this spring, then I’ll never go of gains and setbacks.
anywhere in this company.”
Over “This always happens.” You overlook nuances in situations and may fail to
generalizing “That never works.” consider new ideas.
Catastrophizing “Our department is being restructured. I know I'll be You become stressed and anxious in the face of
fired.“ change and uncertainty. This attitude can be
“My manager wants to talk to me. I must be in trouble.” contagious to others.
Personalizing “Our idea isn’t going to be implemented—I didn’t explain You easily become defensive or anxious.
it properly.”
“I wasn’t asked to join the committee because leadership
doesn’t like me.”

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Case Discussion

Reflection

What is the link between individual mindset and

organizational culture?

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INDIVIDUAL MINDSET TO
ORGANIZATIONAL CULTURE
“The phrase we use to describe our
emerging culture is ‘Growth Mindset’,
because it’s about every individual,
every one of us having that attitude –
that mindset – of being able to
overcome any constraint, stand up to
any challenge, making it possible for
us to grow and thereby for the
company to grow.”

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Case Discussion

Reflection

How could you operationalize a growth mindset

at your firm?

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Operationalizing a  Presenting key competencies as learnable.
growth minded  Conveying that the firm values learning and
perseverance.
organizational
Giving feedback in ways that promote learning
culture involves: 

and future success.

 Presenting senior leaders as resources for
learning.
 Reframing episodes from the firm’s history
and stories about historical leaders to
reinforce the growth message.

Source: Heslin et al

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Case Discussion

POWERFUL
STRATEGIC LEVER

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Case Discussion

CULTURAL ATTRIBUTES
“The culture change I wanted was … centered on exercising a growth mindset every day in three distinct
ways.” Satya Nadella

To unlock growth mindset

To drive better business outcomes

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Kathleen Hogan on Levers of Change

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Case Discussion

TALENT TO ADDRESS TODAY’S VUCA ENVIRONMENT

1.0

Into the Unknown

Probability
of Major Change New Concepts
While Underway New Capabilities
Hence, Culture Matters

Business as
Usual

Known Known Unknown

Knowns Unknowns Unknowns

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Case Discussion

GROWTH MINDSET TO ORGANIZATIONAL GROWTH

“I told my colleagues that I was not talking bottom-line growth. I was talking about our individual growth. We will grow
as a company if everyone, individually, grows in their roles and in their lives.” – Satya Nadella

97%

Exit Bill Gates Exits Steve Balmer

Enters Steve Ballmer Enters Satya Nadella

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Case Discussion

Reflections:
• One personal key takeaway
• One area to explore more

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