Microsoft CEO Satya Nadella explains the 'not universally loved' changes he made to a luxury executive retreat (MSFT)

In his new book "Hit Refresh," Microsoft CEO Satya Nadella invokes this famous cartoon as a reasonable representation of the situation he inherited when he took the job in January 2014: 

Manu Cornet

"Sure, I had experienced some of that disharmony in my various roles," writes Nadella. "But I never saw it as insolvable." 

And so, Nadella set out to do two things: Maintain what Microsoft is good at, which is build new technology, but also get the company's teams to work together rather than hold each other hostage.

That's why the book is called "Hit Refresh": When you reload a web page, some things change, but others stay the same. 

For the most part, the cultural change has gone pretty well. Since Nadella took the reins, Microsoft has added $250 million to its market cap, even as it's added and expanded support for rival platforms at Apple, Google, and Linux. And even long-time Microsoft veterans praise Nadella's leadership style. 

Not everything Nadella has done has sat well with Microsoft's rank-and-file, however. In "Hit Refresh," Nadella tells the story of his first time presiding over Microsoft's executive retreat. Spoiler alert: Not everybody loved his fresh new ideas, at least not at first. 

The fateful retreat

"For as long as I can remember," Microsoft would shuttle 150 of its top executives up to a mountain retreat about two hours out from its Redmond headquarters, writes 25-year-company veteran Nadella. 

Getting all the executives in one place to talk strategy and get on the same page was a fine idea, Nadella writes. In practice, however, it turned into just another chance for the company's executives to put each other down. 

"[F]rankly, it seemed like most of the talking was about poking holes in each other's ideas," writes Nadella. 

And so, Nadella decided to shake things up: For the first time ever, the founders of the startups that Microsoft had acquired in the year prior were invited to this exclusive retreat.

Nadella writes that bringing them "was not one of my more popular decisions" — they may have been CEOs and CTOs in their former roles, but these founders were relatively junior by Microsoft standards, and well below the threshold for earning an invitation to the summit.

Stephen Brashear/Getty Images

"To make matters worse," Nadella writes, their managers and their managers' managers weren't invited, either, deepening the internal political intrigue of his decision. "Remember, the retreat had been only for the most senior leaders," he says. 

Still, it paid off: "They asked questions. They shared their own journeys. They pushed us to be better."

Nadella made another move, also "not universally loved." He interrupted this luxe retreat by forcing Microsoft executives to board shuttles to visit customers, all together. This was met by pushback, as Microsoft executives thought Nadella was insulting them with the implication that these execs didn't know what customers wanted.

Ultimately, it worked out, Nadella writes. Executives from different business units were assigned to the same customer. In the ensuing conversations, they worked out how better to work together. Similarly, cross-business teams were tasked with coming up for suggestions for Microsoft's culture, and ended up talking late into the night.

"Our transformation was under way, though we still had a long way to go," writes Nadella.

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