The David Rubenstein Show: Satya Nadella

[Music] you've now had to follow Bill Gates and Steve Ballmer to legendary figures hey clear message boards dude try to be like us Steve say if you do this well we'll be happy look if you do a good job maybe you'll have an another job if not you want the result of having empathy made you a better CEO my pursuit is is there growing sense of empathy for people around you get a standing ovation for what you've done you know I get a lot of people to ask you me hey look go come home and fix my computer would you fix your time please well people wouldn't recognize me if my tie was fixable just leave it this way all right I don't consider myself a journalist and nobody else would consider myself a journalist I began to take on the life of being an interviewer even though I have a day job of running a private equity firm how do you define leadership what is it that makes somebody tick you've now had to follow Bill Gates and Steve Ballmer to legendary figures did you feel at that time that you're really ready for the job following those legends or were you saying I can't do a better job than they did the best advice I got from both bill and Steve I think helped me a lot because that clear message was don't try to be like us don't even bother to sort of say oh I'm succeeding these people just be your own in fact I remember very distinctly even during the interview process this is true for the board was conducting they asked me hey do you want to be the CEO and I said only if you want me to be the CEO and the feedback I got was well but people who want to be CEOs are like I want to be CEO I said look that's not me and I remembered went on going and talking to Steve and he says yeah just be yourself it's too late to change since you've been the CEO three and a half years the stock is up about I guess it's about a hundred and twenty percent when you go to the your annual shareholder meetings I'd you get a standing ovation for what you've done there's no I get a lot of people to asking me hey look come home and fix my computer okay you are a native of India what part of India I was born in Hyderabad which is in the central part of India and so growing up your parents doted on you I assume yeah they did and they told you you were gonna be prime minister or something important in the country what did they want you to be they just wanted me to stop playing cricket and take my studies a little more seriously now you were an avid cricket player yes that is correct I was in love with it yeah and when did you realize you weren't going to be a professional cricket well it's pretty soon quickly I realized that at best I would pay you know you know what is considered perhaps first-class cricket in India but I was not going to go much further than that but you know then I that's where my dad in fact I remember one of the big decisions the changed my life was you know my entire outlook was so provincial when I look back at it Richard hey I want to stay in Hyderabad maybe study economics and political science and work for a bank that was about the extent of my ambition and he looks at me he says what are you doing you got to get out of this place and so he pushed me out to get to an engineering school and that pretty much of course you know defined the trajectory after his father was a member of the the senior civil service which was an important position I guess in D&D is that right yeah my dad was a very different guy than me in terms of let me say his academic promise so it is always humerus which is you look at my report cards and he says oh I couldn't I don't understand how anybody can have these kind of marks and but the nice thing about it was he would say it in such endearing ways that he never made me feel bad I mean the marks weren't high enough or weren't not high enough they weren't high enough yeah the guy had never met an exam he didn't ace as he would say and so he was a he father it was astounding to me that he would have a son who couldn't a is an exam now your father's still alive yes he must be very proud of what you've achieved not enough so you went to college in India and then you decided to get a graduate school in the United States yeah where did you go I went to university Wisconsin in Milwaukee for my computer that's when I switched from electrical engineering to computer science but when you're in India and University of wisconsin-milwaukee can't be that well not in India so how did you happen to wind up there I've never been to Western Bombay quite frankly and then I showed up in Milwaukee did you have a winter coat or what that was my first very valued possession in life I've been to code which is very important unfortunately I'd picked up this bad habit of smoking in India in college and the one nice thing about going to school in Milwaukee is you as you're a smoker you have to go out in the winter and smoke and that one winter in Milwaukee cured me of my smoking habit so you've got a job after you graduated at Sun Microsystems and what was your job there I was a software developer okay and then you got recruited to go to another company called Microsoft and that was in 1992 that's right so but you also had applied to go the University of Chicago School of Business so how did you decide to do one or the other you know frankly David I I was very committed to saying oh I want to go to the business school maybe who knows maybe even go to Wall Street aha that's what sort of my the highest calling of mankind says David Rubenstein and I thought wow maybe that's what I should do and then somewhere along the lines I started talking to people and I said hey why would you do that you were in tech and you should really come back it was it's an amazing time because Windows NT which eventually became a server business and what have you I was just starting out and and I subsequently went and did some combination of part-time and other courses and I actually finished my MBA which I find stunning in mother you were commuting in other words you were working and then on weekends you're commuting universe Chicago and that must have taken a lot of energy to do both it was crazy so you're beginning your ascent up but you're dealing with some personal issues your first child was born with cerebral palsy he is now 21 years old so how did you realize that was going to change her life and how have you dealt with that issue even I was I was 29 years old when Zane son was born and if you had even asked me maybe even an hour before he was born what was going through my head it was all about always the nurse are you going to be ready what's gonna happen to our weekends now we have a son and when will our new my wife get back to a job and so on but obviously everything changed that night he was born because of an undetected in utero distress as fixation with severe brain damage and that led to cerebral palsy in he's quadriplegic now the first I would say David maybe even two years or more even I was more about like why did this happen to me why what happened to us and all of these plans that I had are now all been thrown up in the air and changed whereas on who my wife what came naturally to her as a mother was she said okay I'm not going back to my job I'm gonna really care for my son drive him around for the you know therapy after therapy and I watched that without schooling me I got schooled that nothing happened to me what happened was to my son and that it was time for me to understand that realize that see life through his eyes and then do my duty as a father that to me perhaps you know didn't come in one moment it's something that I think took time but as I figured it out it changed me both his obviously apparent but also Who I am today and how I approach everything now your wife was trained as an architect that's right and she's given up doing that for a while that's right now you have two daughters one of your daughters has severe learning disabilities as well and how did that affect you and your wife in fact one of the things that happen because of our son was we built up in a tremendous community of people whether it was the therapists or other parents which you know of children with disabilities and so we were involved in that community by the time our youngest daughter came into our lives I must say we had the the richness of this community to support us and it talked when we recognized very early on an unknown eye and on who in particular was very quick to realize that she will need additional help and so we found this school actually in Vancouver BC which was all around neuroplasticity the idea was to you can train your brain to learn so instead of compensating and so we decided that you know what we're gonna move the family to Vancouver Zayn was gonna stay with me in Seattle my daughters and my wife would want to live in Vancouver we were going to mute again no way weekends but the thing that that all quite honestly that is where it came all naturally to us because in some sense Zayn had taught us what it takes to give you know you know people with disabilities the best shot and so it you know it's something that we took on and your son lives with you now yes and one of the qualities that you say you got from all this was empathy and that the result of having empathy made you a better CEO and a better person is that fair yeah in fact when I look at empathy and most people think empathy is just something that you reserved you know for your life and your family and your friends or what have you but the reality is I think it's an existential priority for a business because if you look at it like what is our business our business is to meet unmet unarticulated needs of customers there is no way our innovation to meet unmet unarticulated needs is gonna come about if we don't listen not just listen to the words but God go and go deep to understand what the needs are behind it so I think empathise quarter innovation and life's experience if you listen and you learn from teaches you I mean I wouldn't claim as I've sort of even talked about it with any innate capability of empathy that I was born with if anything its life that has taught me and if anything my pursuit is every year is there growing sense of empathy for people around me Steve say if you do this well we'll be happy if you don't do it well you might not get another job one of the things that it's amazing a both bill and Steve is their candor ha ha ha it's not like this sugarcoat anything they're very very honest about most things in life or everything in life and there was a baby look if you do a good job maybe you will have an another job if not you want you're rising up in Microsoft you're running the Business Solutions division one point but then they say to you we'd like you to run the search business called Bing and did you say you can't compete against Google I don't want to do that or did you say no I'll happy to do that you know it is I had just been promoted to lead our business solutions team and I mean I was I was loving that job and something that I'd aspired to do and and Steve comes around and he says hey you know what I have an idea for you I think you should go run this group that's got high attrition and we have a very tough task I had and I don't know whether it's a good career move but I need help and you know think wisely and choose and I was like wow this is an interesting choice in front of me and I remember very distinctly you know going that night to the building in which the Bing team in our search team was housed and it was what maybe nine o'clock or so and the parking lot was for people who are in I said wow what's what's the deal here I mean these people are like working ah and inspired and her and so I said well I gotta join this team I got it like the fight that they showed cause me did not take the easy path and get in okay well the Steve's say if you do this well we'll be happy if you don't do it well you might not get another job that's correct you know Steve was one of the things that it's amazing a both bill and Steve is their candor ah ha ha it's not like they sugarcoat anything they're very very honest about most things in life or everything in life and there was a really look if you do a good job maybe you will have an another job if not you won't so you did a pretty good job and then they came along and asked you to run another business which was not that competitive at the time and that was your cloud computing business how did it happen that Amazon which was not a computer company more or less became a giant in cloud and Microsoft right nearby wasn't a giant there the interesting thing is what happens when a company becomes successful is this beautiful were Chua cycle that gets created between your concept or product your capability and your culture right you really have all these three things fall into gear and they're working super well but then what happens is the concept that made you successful runs are a gas it's not growing anymore you now need new capability and in order to have that new capability you need a culture that allows you to grow that new capability right we our server business was growing strong double digits it was a high margin business and you look around you know on the other side of the lake here is a very low margin business called the cloud and people were looking at and say why would we do that when we have such an amazing fast-growing high margin business and that I think is the challenge and so to be able to see these secular trends long before they become conventional wisdom change your business model change your technology and change the product is the challenge of business you know in tech it's unforgiving but quite frankly now that tech is part of every business I think all of us have to deal with it so you get to be the CEO of this company you're following two legendary figures how do you go to them and say by the way a lot of things you did I don't want to do anymore I'm gonna change things I was a consummate insider right I spent 25 years 22 years or so and became CEO growing up in the company that bill and Steve built I understood like the back of my palm all the things we got right and all the things we got wrong and I had a point of view on what I wanted to do if I was going to become CEO we now need to make Microsoft thrive in a mobile first in a cloud first world it was not about trying to criticize our past or praise the past it was about what do we do in the future one of the things you try to do and change the culture was to change what was known as a very proprietary culture at Microsoft Microsoft said this is the way we do things we don't want to cooperate with other firms necessarily competitors or other kinds of firms how did you change that culture I said look let me not view things as zero-sum if anything let me approach even who are our traditional competitors and say well customers are heterogeneous they use some of what we do and some of what you do let's figure out a way to combine forces where its market expansive and it satisfies customers so at least that's how I've approached it and it's a lesson I learned in my early days of Microsoft historically Windows and Office were your two cash cows they are still the biggest source of profit absolutely so after those two and you suspect there will be major source of profit for a long time absolutely but after that you have other things you spent 26 billion dollars biggest acquisition ever from Microsoft to buy LinkedIn what does LinkedIn have to do with Microsoft if you look at it we have a billion users of Windows and Office or Microsoft 365 and what is the common thread they're they're all professionals they're all people who are trying to get things done so we have the professional cloud and the professional devices in the world and the vision was to combine that with the professional network of LinkedIn in fact if you look at some of the integrations that we have since launched you can be an Outlook you can get an email I can get an email from David Rubenstein I can go look up your LinkedIn profile which I hope you have okay one today but yes and and then sort of look up all of the commutable connections we may have so than idea that the professional network and the professional content can be brought together I think ultimately it can be a big driver of productivity so that is one but what are the other pieces which has been a real game-changer for us as LinkedIn is the way people do business to business sales and if you want to be able to reach customers and sell this integration is going to be Game Change same thing with talent management so I think we have lots of synergies between the products that are now coming true you gave a statement about women's pay I just gave such a absolute nonsensical answer when I talk to women who are very close to me facing your very successful women that are key to Microsoft and heard even their own personal experiences that's what struck me did you hear from your wife about that absolutely my mom and my wife almost everything you've done since you've been CEO and last three and a half years has worked perfectly yeah the stock goes up the market values up everybody likes you the only thing that I could find that anybody criticized you for was you gave a statement about women's pay at one point and you Crick correctly I think changed your position the next day but can you explain what happened absolutely I was asked about you know pay equity in fact I you know I just gave such a absolute nonsensical answer which Maria Khloe who was interviewing me was kind enough to correct me while I was on stage itself because I was answering a question literally using some past I mean my own personal experience without understanding the broader context the depth of that question which is what is a person like me who is a CEO of a company doing to make sure that one women can fully participate in our companies and in our economies there is equal pay for equal work and more importantly there is equal opportunity for equal work that was the real question there is not about like okay what worked for you and what career advice do you have for me it was a great learning moment for me it's something that I've obviously taken back in fact when I talk to women who are very close to me work you know very senior very successful women that are key to Microsoft and heard even their own personal experiences that's when it struck me how you know the job of a CEO in particular is to make sure that everyone however it's gender diversity or ethnic diversity can first come into the company do their best work so that we can then serve our customers so that's a realization which I thought I had quite frankly but I was I'm glad I messed up so publicly because I think I internalized the lessons from it did you hear from your wife about that absolutely from at that time my mom was alive for my mom and my wife my wife had to give up our carrier of a Sun but in Mike even in my mom's case she struggled she in fact now I realized it a lot more than I even did obviously growing up was the trade-off she had to make where the the system that she was working in did not support her re-entry into the workforce after you know she had both my myself and into my system so you have about 125,000 employees something like that so what percentage are male what percentage are female and how many senior women do you have technology's not a place where a lot of women have risen to the top yet relatively speaking in fact one of the things that we have made some good progress on is on the women's representation which we have a long way to go I mean you got remember that in tech we have a particularly tougher issue because of Technology disparity in terms of gender diversity but let's start with the progress which is in the last year we made and we've gone from around you know you improved to twenty seven point seven percent of women coming into the organization which is around two points more than historical and in the technology side where we've improved by four points so that's I would say movement in the right direction but not enough obviously one of the other things our board also did was to change the compensation system for me as well as my direct reports to say look numeric progress besides all the work that we may do programs we may have and the talk let's even tie compensation of the senior-most people including the CEO to real numerical progress and so we're doing everything but quite frankly it's going to take continuous vigilance continuous push and it's a top-of-mind issue for all of us you've only been doing this three and a half years which is relatively short tenure for Microsoft CEOs how many more years would you like to do this uh-huh you know I have been at Microsoft now for 25 years and I think the thing that I feel that gives me that source of energy is really that sense of purpose of the company because they're quite honestly it's not I don't know how I'll market it's probably not even up to me as to how many years I will be there and I think it's gonna be fun for me to do it each day and it's a real privilege to do it each day

Channel: David Rubenstein

Views: 1,119,903

Rating: 4.8836713 out of 5

Keywords: Bloomberg, david rubenstein show, Satya Nadella, Microsoft, CEO, Bill Gates

Id: NUl-a3GZznQ

Length: 24min 4sec (1444 seconds)

Published: Wed Oct 25 2017