Within four weeks of becoming the new CEO of Microsoft, Satya Nadella lays out the major challenges that await him in the two letters he sends to everyone at Microsoft. He defines Microsoft's battlefield as the “mobile-first and cloud-first world”. That is where Microsoft needs to get its products and technology right, to build platforms and ecosystems and to integrate Nokia devices, services and the new mobile capabilities. In order to do so, Microsoft needs to zero in on “a mobile and cloud-first world and do new things.” In his view “…industry does not respect tradition – it only respects innovation”. And in order to innovate, he needs his 125,000 strong staff around the world to lead and help drive cultural change, to find Microsoft's swing so that the team is “…in such perfect unison that no single action by any one is out of synch with those of all the others”. Many challenges await Microsoft in its transformation journey. On platforms, it is not clear what the future will hold for Windows. On devices, Microsoft needs to find ways to woo application developers to build its mobile ecosystem. On integration, the Company has to find ways to transfer and to grow the mobile capability acquired from Nokia. And most importantly, Nadella must figure out how he can achieve cultural changes to focus everyone on innovation via collaboration.
he case provides context for students to apply management theory and know-how to:
• appreciate the pinch points in making successful organizational transformation
• examine the reasons that contribute to Microsoft’s inertia, and
• discuss key factors that will affect the successful integration of Nokia with Microsoft.