Microsoft’s transformation was the same. When Nadella became Microsoft’s third CEO, he had to prop up a crumbling building. Nadella realized that what Microsoft really needed was a cultural change, from a bureaucratic culture of a large company to the innovative culture that Microsoft had in its early days. He was smart and chose to change, but he didn’t choose to radically transform Microsoft with a radical plan. Instead, he chose this transformation under the same genes. He called it “refreshing.”
Nadella knew that change could not be accomplished all at once, but had to be leveraged with leverage. He shared the “empathy” he had learned from his family’s misfortune with his colleagues. Faced with internal and external changes, Microsoft employees were inevitably anxious and uneasy. Nadella introduced the concept of growth mindset and told these colleagues that growth mindset could help them grow. This is exactly what they need right now. Using this method can help them through this “difficult time.” The growth mindset is a transformation plan based on “empathy” for Microsoft employees.
In a speech to his team, Nadella said: “For me, culture is not static, but a dynamic learning culture. In fact, we can describe our new culture as ‘growth mindset’ because our culture is about each and every one of us; anyone with this attitude and mindset can break free from constraints, overcome challenges, and thus drive our own growth and thereby drive the company’s growth.” He told his colleagues: “I’m not talking about growth in net profit, but about our personal growth. If each of us can grow in our work and life, then we as a company will also grow.” Many Microsoft employees in the audience quietly wiped away tears.
The growth mindset changed the way Microsoft employees did things. They even joined hands with old rivals. At the Apple iPad Pro launch event, Kirk Koenigsbauer, head of Office marketing at Microsoft, took the stage to introduce the Office suite they had developed specifically for their competitor’s platform. This would have been unimaginable in the old Microsoft.
For most traditional organizations, change does not require starting from scratch. Christensen’s theory tells companies that overall we need to separate “sustaining innovation” and “disruptive innovation” businesses and let them develop separately. That is to say, for large companies, the structure of mature businesses can be retained and should be retained; it only needs fine-tuning and appropriate improvement. But for most companies’ “disruptive innovation” businesses, the organizational structure needs to be redesigned. Specifically, each company can have its own approach; you can use internal entrepreneurship or external incubation or use investment management instead of product management or even adopt an open platform approach to encourage “concurrent innovation.” Which method is better is currently inconclusive. But from current practice, when the original “sustaining innovation” business is market-oriented and the “disruptive innovation” business is user-oriented, an external innovation model should be adopted. And if both are oriented towards the same user group, an internal innovation model can be used.
Why is “disruptive innovation” business generally not based on market but designed around user groups? For “disruptive innovation,” its essence is “business model” innovation. The “business model” is a composite concept that involves many factors such as how to use internal and external resources of an enterprise. It is generally believed that the most core part of the “business model” is the “value proposition.” However, the “value proposition” is actually looking at the problem from the perspective of the enterprise itself. If we look at this issue from the other side of the problem, that is, from the user’s perspective, this process is “value identification.” And we now know that the real difficulty and key in the process of “value identification” is the user’s “mental models.” That is to say that the key issue corresponding to innovative organizational structure is precisely the user’s “mental models.” Obviously, we need to design organizational structure around “user-centric.”