How Microsoft, Lendlease and Virgin changed their culture
Here are key takeaways from The Australian Financial Review Workforce Summit.
Amy Coleman admits that like many others, she was pretty sceptical when former engineer Satya Nadella was appointed as only the third chief executive to lead Microsoft.
“I had known Satya when he was an engineering leader. So when he became CEO, I was somewhat sceptical as well,” the human resources executive, who has worked with all three CEOs at the technology behemoth, agreed at this week’s The Australian Financial Review Workforce Summit.
Nadella marked his 10th year as CEO this month and is now being heralded as a Steve Jobs-like tech industry giant.
Microsoft corporate vice president, human resources & corporate functions, Amy Coleman. Oscar Colman
The former engineer has pivoted the slow-moving software company to cloud computing and artificial intelligence and reformed its corporate culture, recently becoming only the second company after Apple to reach a $US3 trillion ($4.65 trillion) stock market valuation.
“Talk about a human rising to the occasion,” she says. “It was interesting to just see ... someone in the role they were maybe meant to have their whole life. He’s certainly lived up to that”.
Insights
Coleman gave summit delegates an exclusive insight into how Nadella pulled it off. It was one of the key revelations from an event packed with insights from CEOs, senior executives and people leaders.
Here are some of the key takeaways we learnt about how to transform your company, its culture and make your business hum.
Coleman says Microsoft thinks about culture as “what is happening in the hallways”, with Nadella bringing a “sort of empathy along with intensity and the growth mindset”.
She adds: “It was pretty dramatic at the company for an engineering leader to put so much focus on culture.”
She points to the famed Stanford psychologist Carol Dweck and her book Mindset, which Nadella has nominated as the inspiration for his company’s cultural change.
Dweck extols the virtues of cultivating a growth mindset. “The hand you’re dealt is just the starting point for development,” she says in Mindset. “Everyone can change and grow through application and experience.”
Under CEO Satya Nadella, Microsoft has become the biggest listed US company.
Nadella has used the example of two kids in school. “Ultimately, the learn-it-all will do better than the know-it-all. And that, I think, is true for CEOs. It’s true for companies.”
Coleman also says that Nadella has “brought us personal leadership at scale”.
“It’s so interesting in a company of 220,000 people, people feel like they know him. It is just how approachable he is. He has made himself accessible to all of our employees,” she says.
“He’s very humble about his beginnings, about being an engineer, where he came from, the opportunity in front of him.
“He tells a story about the hardest job he ever had was going from an individual contributor to a manager, and so he’s very relatable.”
Coleman says Nadella has also embraced a two-way dialogue between employees and leaders.
“He is a great storyteller. He’s very private, but he’s been a great storyteller talking about his kids, his son who unfortunately passed away but had cerebral palsy, and how that really taught him empathy that he brought to the office.
“So I think he’s drawn people in, in a very personal way.
“I think with that personal leadership, you lead with him because you think of him and yourself doing it together. So there’s something super powerful to that.”
Coleman says Nadella also brought customer obsession back to the conversation.
“I think in the early days of Microsoft, there was a lot of ego and hubris [that] we know what our customers need, and we will build it, and you will buy it. We were going to fail if we continued on that path.
“So he brought us a lot of what we were learning from our competitors like Amazon across the lake.
“How do you have customer empathy? How do you go solve a problem rather than build a product? He brought all those things to us.”
‘People wanted to cut Virgin down’
Virgin chief people officer Lisa Burquest says the airline posted its first profit in 10 years late last year, just three years after it fell into administration during the pandemic.
Burquest says one of the mantras was to never let the stone throwers distract the company.
“You could have looked at the story of Virgin and thought, what doom and gloom. This is a company that hasn’t made money for more than 10 years. It’s fighting against a very large competitor,” she says.
Virgin Australia chief people officer Lisa Burquest. Oscar Colman
“When we look at the turnaround of Virgin, if I look back three or four years ago, just post administration, it’s been a pretty dramatic time.
“During the COVID-19 period, we had 98 per cent of our business that was affected for a good one to two years. We tried to stop and start the airline five to six times.
“Alongside of that, we had to run a very significant transformation program, a program which we’re only really halfway through, and we still have quite a bit to do. But I am pleased to say that it’s been hugely successful.”
Burquest says it wasn’t about changing the culture as much as picking it back up and evolving it to put their people front and centre.
“We call it Virgin flair. It’s about having a good product and service but hiring people and allowing people to bring their authentic self to work every day,” she says.
“So rather than training our people within an inch of their life that in particular circumstance, [and instruct] ‘you will say this, or you will do that’, we give them the product and service, and we say, ‘be you’.
“What we find is that by them being them, and creating a very inclusive and open culture, what bubbles to the service is quite an exceptional experience.
Employees at the core
Burquest says that on culture, Virgin has driven a disciplined focus and a ruthless prioritisation.
“But our people have sat at the core. When people from the outside looking in have wanted to throw stones and throw bricks and try to cut us down when we were fighting some of the hardest days, we didn’t allow ourselves to get distracted.”
Lendlease is about midway through a five-year turnaround, although investors are keen to see the turnaround accelerate.
“In addition to turning the company around, we’ve faced challenges with the capital markets, high-interest rates,” Lendlease’s chief people officer Deb Yates told Summit delegates.
“Everything’s just a little bit slower than we thought it would be. And so our focus has been on the skills.
“Starting with the strategy, [there was] absolute clarity on the strategy and what we were going after and what we weren’t going after, and then [we determined] the skills that we would need to deliver that strategy.
“[People can get] confused a little bit between activity and productivity. At Lendlease we’re really focused on productivity.”
Yates says the property and construction company also focused on what most people call the softer skills, but it calls the harder skills around leadership and culture.
“The shifts we’ve been focused on is a shift from a nice to a kind culture. So it’s about a shift from rules to principles,” she says.
It’s a similar approach to that taken by Virgin.
“So not about having a rule or a process to do everything, but understanding why we do what we do, and the freedom to operate within a principle. Shifting from the corporate nod to relearning how to disagree with each other.”
Lendlease’s chief people officer Deb Yates says learning how to disagree with colleagues respectfully enhances productivity. Oscar Colman
Learning how to disagree with colleagues respectfully is key.
“I think we have to get a little bit more comfortable that people have different views to ourselves, and [learn] that I can still like you and disagree with you.
“We can still find something that we have in common. Life is not so binary.
“Understanding and building that capability to disagree I actually think is a productivity enabler.”
Apart from overhauling their corporate culture, companies are also looking for ways to use artificial intelligence to save time and enhance services, the Summit heard.
At Microsoft, a human resources chatbot has helped the company eliminate more than 21,000 hours of work since its introduction about a year ago. Schneider Electric is trialling a similar bot to streamline it’s HR processes.
Inside private hospital operator Healthscope, artificial intelligence is being used to improve rostering by predicting attendance out to a timeframe of 10 weeks.
“We can get an idea of what that demand looks like, so that we can optimise our rostering to get the right person, at the right time, the right care, right the way through to the 72-hour window,” chief executive Greg Horan told the Summit.
Expediting and streamlining claims
Insurance giant IAG is using generative AI to streamline and expedite its claims-handling processes across all categories of assets.
The company has been able to cut down the assessment time on total write-offs from 15 days to five days, while drastically reducing the number of times a claims officer has to contact the customer, from six times to one.
During mass flooding in New Zealand in 2023, which generated more than 48,000 claims, the company devised a robotic process to glean the data needed to make an assessment, which freed up claims handlers to spend more time offering support to traumatised customers on the phone.
The result was a more than 700 per cent increase in IAG’s ability to process large claims, jumping from 500 a day to 150 an hour, IAG group executive Christine Stasi says.
Back on the culture front, Medibank told Summit delegates that the health insurer’s four-day work week trial had so far resulted in reduced stress for workers while maintaining productivity levels.
“It’s early days and there’s lots for us to learn, but there’s some good early indicators that we’re seeing. Productivity has held,” senior HR executive Kylie Bishop says.
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