Satya Nadella's Secret
How he used growth mindset to 6x Microsoft's market cap
Satya Nadella has added $1.65T to Microsoft’s market cap.
His secret? Growth mindset.
Every PM needs one:
When Satya took the reins at Microsoft, he was a veteran having spent 12 years at the company. He observed that there was a static, fixed mindset limiting the company. So, he resolved to transform the company to a growth mindset.
The results speak for themselves. Microsoft’s market cap has 6x’d. It has become a late-moving leader in the cloud with Azure. It has become a major acquirer, with the blockbuster purchases of LinkedIn for $22B and Activision Blizzard for $69B.
Growth and Fixed mindsets are well-studied concepts. Satya took a lot from Carol Dweck. In her book, “Mindset: The Psychology of Success,” she breaks it down. Here’s what you need to know as a PM:
1. Intelligence is not fixed:
This is the fundamental insight. Many go through life grasping at stories from our past demonstrating our intelligence. “I got this PM job, so I am smart.” But growth is always possible. And if you stop growing, you are no longer intelligent.
2. The Power of Yet:
Not being able to do something is not fixed. Although you cannot convince every stakeholder yet, you can get better at the skill. Although you cannot make Satya level product strategy decisions now, it’s just “not yet.”
3. Embrace Challenge:
Effort and difficulty are an opportunity to get smarter. People with a fixed mindset run from difficulty. Go for that harder feature that is outside your wheelhouse. Take on that stretch product surface. The challenges are how we grow as PMs.
4. Dream Big:
Take opportunities for failure as learnings for your bigger picture. A failure now is something we can learn from to grow. Reconceptualize challenge as hardening for your big dreams as a product leader. You want the reps to have the wisdom as a more senior PM.
5. Praise Wisely:
Learnings should be celebrated. A launch that does not move the metrics is an opportunity to learn. Especially if it was built as an MVP. Teams that only reward outcomes incentivize fixed mindset behaviors.
6. It’s not about effort:
The growth mindset is about learning, not effort. Many make the mistake of praising effort to grow over the growth itself. To foster growth mindset, focus on the improvements - not the baseline or the effort required to improve.
7. It’s not all or nothing:
No one has a fully fixed or growth mindset. There may be skills where you are more fixed. Or perspectives on features. Everything lies on a spectrum. Aim to maximize you & your team’s growth mindset across all areas.
In summary, Satya used the growth mindset concept to transform Microsoft and 6x its market cap. These 7 concepts can help you transform and 6x yourself:
1. Intelligence is fluid
2. The power of yet
3. Take on challenges
4. Dream big
5. Praise growth
6. It’s about learning
7. It’s a spectrum
Doing What it Takes
The most important PM skill?
Doing what it takes:
A PM can have any number of responsibilities, depending on the company and team:
Setting the vision
Defining the strategy
Writing PRDs to define features
Driving execution & overcoming blockers
These are all core things most PMs are expected to do - and well.
The difference is PMs who do whatever it takes. These PMs will:
Take extra 1:1s
Define test & edge cases
Step in to do user research
Help reinterpret data with more context
These are the PMs who succeed.
“The PM is the CEO of the product” is rightfully a derided phrase. But two elements of the PM job do stick out as similar to the CEO:
1. Not stooping below any task
2. Being fully accountable for results
The buck stops with the PM, like the CEO. Whether it’s cleaning up the office, asking for status updates, or taking notes, no task is below great PMs. Sure, they tend to ultimately have the teams in charge pursue these tasks. But, when necessary, great PMs get their hands dirty.
When I was on Fortnite, we were seeing really large dropoff from download to play. The problem was we didn’t have clean data. I first coordinated the daily analytics. When that didn’t work, I dove in to do the analytics myself. I did whatever it took.
Eventually, we figured out the steps in the funnel that were a problem. We didn’t automate enough and had too many screens for new accounts. Because I rolled up my sleeves to do something outside my purview, we were able to tackle the problem.
In the world of idealistic PM coaching and books, PMs have become too glued to their role definition. The behaviors of grunt work to do what it takes with a lean startup mentality have all but disappeared in PMs at mid and large size companies. It requires low ego.
This makes being willing to do anything a huge differentiator. It’s one of the most important skills a PM can have because it’s so rare. Almost every company has a resource gap somewhere. As accountable owners, many times PMs should step up to fill that gap.
Doing whatever it takes is about:
Having low ego
Identifying what’s most important
And rolling your sleeves up
It may be the single most important PM skill in today’s market.
Don’t neglect it.