Uncovering a Leadership Style: Satya Nadella

Leadership is critical for a successful business operation because of its direct impact on organizational health, employee performance, and shareholder value. Abundant literature exists with stories of leaders who succeeded or failed to achieve intended objectives because of a particular leadership style. This is an attempt to define leadership, briefly analyze different leadership styles, and identify an approach that best describes a leadership style practiced by Satya Nadella, Chief Executive Officer Microsoft, Inc.

Leadership is a complicated interactive process between a leader and followers. A leadership definition that has garnered consensus among scholars describes leadership as a “process where by an individual influences a group of individuals to achieve a common goal.” Achieving a common goal in an increasingly dynamic, global, and diverse business operating environment intensifies leadership complexity and heightens the need for an effective leadership. Research and debate on effective leadership style continues, and several studies have proposed a skill-based, trait-based, and behavior based leadership approaches to influence followers successfully.

Identifying and practicing an effective leadership style is critical for defining a clear vision and strategy, responding timely to changing market and customer needs, and returning financial value to shareholders. Leadership style also influences commitment and performance of individuals who play a critical role. The three most common leadership styles include skill based, trait based, and behavior based approaches.

Skill based approach emphasizes the leader’s technical, human, and conceptual capabilities. A trait-based approach stresses innate characteristics of the leader such as integrity, determination, and self-confidence. Unlike the first two, the behavior approach considers a leadership style focusing on task accomplishment or nurturing a relationship, or a combination of both. Behavioral based relationship-oriented leadership style involves developing, supporting, empowering, and recognizing followers. This approach increases individual performance and motivation, positively affects organizational health, and foster open and trusting relationship at all organization levels. An authentic and transformational leaderships are a form of behavioral based leadership styles.

Authentic and transformational leaders practice a behavioral style and relationship oriented leadership approach. Authentic leaders are transparent, morally grounded, and responsive to followers needs. Transformational leaders are change agents, are in-tune with the needs and motives of followers, and inspire and empowers followers to achieve higher goals. Satya Nadella, Chief Executive Officer (CEO) of Microsoft, Inc., embodies both authentic and transformational leadership style.

When Nadella became a CEO a little over four years ago, he sent a genuine and emotional email to employees that gained him trust and aroused commitment from employees. Then Nadella started holding a monthly "ask me anything" session (recently few other EVPs at Microsoft have started to do likewise) with employees where he transparently discusses issues, answers their questions, and eases their concerns. During these session, attendants feel his authenticity and honesty when he talks about his own shortcoming, his dedication to a lifelong learning, and his priority to maximize authenticity in others. He also demonstrates a drive to transform Microsoft through clarity of purpose, alignment of resources, innovation, and appropriate intervention to build confidence and to improve capabilities.

Nadella implemented changes and transformed the company starting immediately after taking the helm of the enterprise. He created a new mission, defined a new strategy, and shifted the company’s primary focus towards building a cloud platform. Under Satya, the Microsoft Azure cloud computing platform has changed to support Linux operating system, a Microsoft Office version that works on Apple iPad has been released, and Microsoft Outlook now works on iPhone and Android platforms.

As the result, Nadella has won the love and admiration of employees and investors alike. A survey of close to 13,000 employees showed a 3.9 out of five overall employee satisfaction rate, 92% CEO approval, and 83% willingness to recommend Microsoft to a friend. Financial markets have also recognized Nadella’s laser focus on the cloud platform. Microsoft stock share price has appreciated and has reached an all time high primarily as the result of Nadella’s quick and decisive leadership in embracing and shifting to the cloud service offering.

Leadership is about motivating others to work to achieve a common goal. Specific leadership styles are more likely to result in a more effective leadership than other styles. Authentic and transformational leadership style, a form of the behavioral based relationship oriented leadership, appears to be the most effective approach. Satya Nadella, Chief Executive Officer Microsoft, Inc., through his authentic and transformational leadership style, has made the company responsive to market needs, increased employee commitment, and delivered high financial return to shareholder. Mr. Nadella's leadership style has turned Microsoft around, instilled a collaborative culture, and Microsoft is now on the verge of becoming the first trillion dollar company, a remarkable achievement in such a short time.