Friday, December 15th 2017

Microsoft’s Diversity in Leadership Will Lead to Innovation

February 23rd, 2014 in Diversity by

Nearly lost in the coverage of Microsoft’s Feb. 4 announcement of a new CEO was the simultaneous, though subordinated, announcement of a new company Chairman: John W. Thompson. In combination, these two appointments are extraordinary management moves—perhaps more visionary than any tech industry C-suite reorgs since the dot-com bust more than a decade ago.

How so? Well, the fact is, Microsoft has done something unprecedented among digital companies. Suddenly, it has the most diverse leadership tandem in big-time techdom, with the top two execs being people of color: Thompson, the African-American Chairman, and Satya Nadella, the Indian-American CEO.  Now, you might be thinking that their race ought to be irrelevant. What’s significant is these executives’ ability to perform, to do as promised and transform Microsoft from a fading tech star into a newly competitive light in the galaxy of cloud and mobile computing.

satyanadella_large_verge_medium_landscapeTrue. But if Microsoft is to be supremely competitive again, it will need to find growth in new markets, markets far from its traditional mainstream hunting grounds. Most of the growth in mobile computing, for example, is happening overseas in places like Nadella’s homeland of India. He studied Electrical Engineering at the Mangalore University before moving to the U.S. to study computer science at the University of Wisconsin. He’s been with Microsoft for over 20 years now, but just in his mid-40s, he’s young for a chief executive.

By picking Nadella the Microsoft board seems to recognize the company needs a fresh perspective with a closer connection to the current and next generation of technology users. And make no mistake, Nadella’s Indian upbringing and education allow him to innately see the world through the eyes of international consumers. As Nadella has rightly pointed out in interviews, success at Microsoft depends on the collective power of its various teams. But he has also said that he is very much a product of his experiences and background. Indeed, the worldly, India-influenced vision and instincts he brings to the corner office will likely bring a much needed spark to Microsoft’s innovation.

That Microsoft appears to understand the benefits of diversity in leadership sets the company apart from one of its most fierce rivals. The connection between diversity and innovation is something Microsoft competitor, Apple Computer, is learning begrudgingly. In January, Apple announced it added language to a board committee charter vowing to diversify its board. The move followed objections from shareholders Trillium Asset Management LLC and the Sustainability Group, who said they’re disappointed that the iPhone maker has only one woman on its eight-member board, and one incoming female member of the executive team that reports to CEO Tim Cook, who is white. Microsoft, on the other hand, has two women on its 10-member board and two men of color, Nadella and Thompson. Four women and two men of color report to Nadella.

The disgruntled shareholders met with Apple representatives several times in the past few months and warned they would bring the issue to a vote at a Feb. 28th shareholder meeting. But they backed off after Apple added language to the charter that promises to consider women and minorities as board candidates, without making any specific commitments.

“There is a general problem with diversity at the highest echelon of Apple,” Jonas Kron, director of shareholder advocacy at Boston-based Trillium, told Bloomberg News. “It’s all white men.”

Microsoft’s new Chairman, John Thompson, who led the board’s CEO search committee, won’t let this be a problem at his company. As the former CEO of Symantec Corp, he spent a decade from 1999 to 2009 creating the world leader in security software, storage and systems management solutions. He transformed Symantec by focusing on growth but also by not being afraid to think outside of the box. He turned what was a sputtering antivirus software company into an end-to-end security solutions giant by making acquisitions the previous leadership simply didn’t see.

Thompson understands that while performance is ultimately what counts, one’s background and experience often influence that performance. Once a young IBM salesman from south Florida, who sported an “eight pound Afro,” as he once described it, loud shirts and polyester suits, Thompson has not forgotten that consumers don’t all look or think alike. I know it’s not lost on him, for example, that African-Americans (despite the myth that we do not use technology) have become prolific tech adopters.  Nearly 60% of blacks use smartphones compared with 53% of whites, according to a recent Pew Research report.  And social networking usage is nearly ubiquitous among young blacks (96% usage by 18-29 year olds vs 92% for whites).

Founded in 1975, Microsoft will be 39 years old in April. Nadella and Thompson are looking well into the future. Their vision is for Microsoft to become one of the few companies in Corporate America’s to reach 100 years and beyond. With Thompson and Nadella at the con, hitting the 100-year mark might not be out of reach.