10 Ways CEO Satya Nadella Should Change Microsoft, Business, Culture

By Don Reisinger

Nadella’s decision to ask Bill Gates to have a broader role in his “cabinet” is concerning. Gates might have been successful in his career, but he represents the old days of Microsoft that relied solely on software. Gates wasn’t convinced that Steve Jobs could be successful in mobile, he’s been wrong on Windows Vista and Windows 8, and now he’s acting as the tech adviser to Nadella. That sounds like a recipe for trouble unless Nadella limits his influence.

Windows 8 has single-digit market share worldwide, PC vendors are turning back to Windows 7, and Microsoft has been backtracking on its features since its launch. Nadella needs to stop pretending that Windows 8 is a desirable platform and move on to bigger and better things. That doesn’t mean Microsoft should ditch Windows 8; the company should just acknowledge (and prove) that it can do better.

Nadella must focus on becoming more hardware-centric as CEO. In his note to employees, he acknowledged that hardware is important in today’s industry and that he believes Microsoft can provide solid devices that are coupled with high-value software. It’s a good idea, and something that he needs to focus heavily on during his tenure. The stronger Microsoft can be on hardware, the better.

The Xbox One was overrun with issues before its launch. It seemed as if everything Microsoft wanted to do with the console, including forcing customers to “check in” on Xbox Live each day, was met with criticism. While that forced Microsoft to make changes, the company also overlooked certain issues with its console. Nadella needs to get the Xbox team to fix the broken party system on the console and improve the Resume feature that brings people back to where they left off in-game. Nadella must also be willing to spend his company’s billions on acquiring more software developers to get high-quality content exclusively to the Xbox One. Absent all that, the Xbox One might have a difficult fight against PlayStation.

One of the reasons Nadella is now CEO at Microsoft is because he’s the man who architected the company’s growth in the cloud. But his work is far from done. Nadella must work with his team to improve Office 365, bring better features to OneDrive and convert Microsoft into a cloud-focused company. Appealing to the enterprise will mean offering high-quality cloud solutions. And Nadella must be willing to do that.

At this point, there’s little that Nadella can do to ax the Nokia acquisition that’s expected to close this quarter, but he should question how smart it is to have an entire mobile devices division inside his company. Nokia might be delivering the finest Windows Phone handsets on the market, but will owning it make for a better Microsoft? Nadella will need to dig deeply into Nokia to pluck out those things that work and ax all those that don’t. Microsoft can’t get dragged down by a middling mobile handset maker.

This one might be controversial, but it’s time for Microsoft to get away from Bing and from trying to beat Google on search. Granted, the chances of such a thing happening anytime soon are slim, but Nadella should question the value of search to Microsoft’s future plans. As Nadella himself noted in an email to employees, “The opportunity ahead will require us to re-imagine a lot of what we have done in the past for a mobile and cloud-first world, and do new things.” It’s a good idea to question whether Bing is the right platform for Microsoft to invest in over the next several years.

Recent rumors have suggested that Microsoft will announce Windows 9 in the next few months. The operating system will reportedly feature many improvements over Windows 8. The challenge for Nadella will be to decide when to announce Windows 9. Here’s a hint: sooner rather than later. Windows 8 is flagging, and consumers are checking out other operating systems. Nadella needs to get customers excited about Microsoft’s next operating system and push its development cycle into overdrive. The sooner he can get Windows 9 announced and on store shelves, the better.

Recent rumors have suggested that Microsoft will announce Windows 9 in the next few months. The operating system will reportedly feature many improvements over Windows 8. The challenge for Nadella will be to decide when to announce Windows 9. Here’s a hint: sooner rather than later. Windows 8 is flagging, and consumers are checking out other operating systems. Nadella needs to get customers excited about Microsoft’s next operating system and push its development cycle into overdrive. The sooner he can get Windows 9 announced and on store shelves, the better.

An hour after Nadella was named CEO, Microsoft’s shares were up just 6 cents in a broader market that has been getting pounded by economic growth worries. That the company’s shares are hardly moving might suggest shareholders aren’t sure whether Nadella will bring something new to the company. Nadella needs to prove to shareholders that he can change the software giant for the good. If he can’t do that, shareholders—at least judging by their lack of interest in his appointment thus far—won’t be pleased.