Satya Nadella - Microsoft CEO

 Nadella is arguably one of the best business leaders in technology industry. The main reason is a widely successful turnaround of Microsoft that he pulled off since becoming its CEO. While strategically the turnaround was driven by a successful bet on cloud business, which essentially put Microsoft back into the league of leading growth tech companies, a more subtle driver of the turnaround was cultural transformation.

From an investment perspective, Nadella’s Microsoft is a great example of a “CEO upgrade” situation when a good/great business that’s been mismanaged for some time gets a right CEO with the relevant skillset and mindset who subsequently unlocks the hidden potential of the business. Under Steve Ballmer Microsoft was struggling for more than a decade with poor capital allocation and a culture drifting towards arrogance and lack of innovation. Nadella’s strategy and execution at Microsoft were so rapid and effective that less than two years since his appointment a CNN journalist wrote an article “Is Microsoft CEO Satya Nadella better than Bill Gates?”. Since February 2014 when Nadella became Microsoft CEO, its stock delivered 740% or 31% CAGR, an extraordinary result by any standard.

Interesting detail: Nadella had high conviction in Microsoft’s financial success from early days – check how his stake in the company increased over time. Based on my observation this is not a typical behaviour of a CEO of a publicly traded company, most of whom prefer to sell stock as soon as their options are exercised.

As always, while studying a business leader, I’m looking for recurring themes across time and picking the most relevant quotes and anecdotes which should help us to understand this business leader better and to learn something new. 

Nadella’s background before he was appointed a Microsoft CEO:

Satya Nadella is the only Indian and youngest candidate in the running for the next CEO at Microsoft.  He has a reputation for driving people to work hard and demands excellence.  Outside of work, he is said to be a sweet and charming individual, which has earned him the nickname Satya “Nutella” due to his chocolate brown skin color.

Born: 1969

Youngest candidate for CEO

Place of Birth: Hyderabad, India

Education:

Hyderabad Public School

Manipal Institute of Technology – BS Electronic Engineering in Electronics and Communication

University of Chicago – MBA

University of Wisconsin–Milwaukee – Masters in Computer Science

Speaks Telugu and Hindi in addition to English

Career

Started off at Sun Microsystems

Joined Microsoft in 1992

Senior vice president of R&D for the Online Services Division

Vice president of the Microsoft Business Division

President of Server and Tools Business

Was picked by Ballmer after Bob Muglia was fired

Credited with leading transition to the cloud at a rapid pace

Currently Executive Vice President of Cloud and Enterprise

Reports directly to Ballmer [1]

On Satya Nadella

• Amid the rumors about external candidates, some Microsoft watchers have focused on Satya Nadella, the Indian-born head of Microsoft’s cloud and enterprise division who is known to staff as one of the most articulate and intelligent people in the company. (Dec 13) [4]
• As a 22-year veteran of the firm, Bloomberg reported, he is well-regarded as an energetic, forward-thinking upper-level executive. He also has an advantage as an insider in that he fully understands Microsoft’s complex culture and layout — and therefore likely knows its weak points as well.
  In a note to investors, Daniel Ives of FBR Capital said that while Nadella would excel as CEO, “we believe filling this position with a core Microsoft insider will disappoint those hoping for a fresh strategic approach… an outside executive could have brought to the table.” (Jan 14) [5]
• And in the words of one two-time Microsoftie, Nadella is “a complete 180” from Steve Ballmer, the outgoing CEO who led Microsoft for more than a decade with an often-booming style of leadership.
  “Satya is thoughtful, articulate and well-spoken but quite low-key,” said Scott Moore, president of Seattle startup Cheezburger, the former MSN executive producer whose tenure at Microsoft gave him a window into Nadella’s leadership of Microsoft’s Bing search engine and Online Services group. “He possesses vast technical knowledge and expertise and unlike many senior execs, he understands the products he oversees at a deep level.” Despite his outward demeanor, Nadella is an “aggressive business leader” who is willing to take on difficult challenges, Moore said. (Feb 14) [8]
• Nadella is not the type of leader who would pound the table with his fist, instead taking a more thoughtful approach to problem solving. In that regard, he’s more in the mold of Nike CEO Mark Parker, said John Connors, the former Microsoft CFO who now works as a venture capitalist at Ignition Partners.
  “He’s more cerebral and has great product depth, and is very, very good at getting the right people in the right jobs,” said Connors. “Very hard working guy. Very outward focus, and very product oriented. He will be a guy that people enjoy working for, but at the same time, if you don’t deliver or don’t have the right skill set, he won’t hesitate to make changes.” (Feb 14) [8]
• Tait wrote in a Facebook post this week, “I remember the interview, his thoughtfulness around every question, the brilliance in his response, and the struggle to come up with a follow on question that would challenge him. His youthful, angular and awkward presence still growing into his own skin, and his passion, absolute passion for the power and potential that technology could hold. Lastly my thoughts of ‘who really puts cricket on their resume?!?!’.”
  Vijay Vashee, a former Microsoft executive who attended the same school in India as Nadella, also recalled the story of Nadella studying to get his MBA while working at Microsoft. “This is incredibly tough to balance,” said Vashee. He described Nadella as a balanced and humble techie who is a “great listener” and possesses a “strong business sense.”(Feb 14) [8]
• Connors, the former Microsoft chief financial officer, said Nadella is the right choice for the job. That’s in part because he has not always taken the easy path, choosing instead tougher challenges within the company, such as trying to improve Microsoft’s search position or running the Microsoft bCentral small business online service. Some of the experiments he embarked upon worked, others did not. (Feb 14) [8]
• “He earned instant respect of everyone he worked with, because it was clear at all times that he would make hard decisions to do the right thing, and base those decisions on a deep understanding of reality,” Moss [Ken Moss, a former Microsoft web search executive] explained. “There’s no room for BS with Satya in the room.” (Feb 14) [8]
• “He’s a thoughtful, quiet leader who rallies people around him,” former Microsoft Chief Financial Officer John Connors said of Nadella. “He works harder than anybody. He’ll make the tough calls but he’s very urbane and civil.” (Feb 14) [10]
• "He has proven not only that he understands the Microsoft culture, but that he can change it in very big ways," says James Staten, a vice president and principal analyst with Forrester Research who has closely followed Nadella and his Cloud and Enterprise group through interviews with many people both inside Microsoft and out, including Nadella himself. (Apr 14) [13]
• "He is very inclusive. He brings people in and gets them excited to work on stuff, and that's what I think his magic is -- his authenticity and the way he is able to inspire people and not just push them," says Hilf. "He can inspire them to do great work and get them motivated and excited. That's really about him as a person: Whether he was running a technology company or a non-profit, he would have the same demeanor." (Apr 14) [13]
• Johnson says Nadella is poised "to unlock the human capital at Microsoft" by forging a collaborative culture that, perhaps now more than ever, will be supported by upper management keenly aware of the impact of diversity and fairness. (Oct 14) [20]
• "If you know the man, you know he cares and wants people to succeed," says Kevin Johnson, retired CEO of Juniper Networks who worked with Nadella at Microsoft for 16 years. "Does he think about karma as a system that recognizes and rewards people? Yes. But does he know that doesn't always work and the system has to be improved? Yes."
  During his keynote, he said: “There are three concentric circles that need to click into gear for any organization to thrive. You have to have new concepts, and these have to be complemented by new capabilities, and you’ve got to have a culture that constantly evolves to support the first two.
  This is what any organization needs to do in order to reinvent themselves. You can’t at any point stop, because that’s when you get into trouble. (Nov 14) [22]
• [Article titled “Is Microsoft CEO Satya Nadella better than Bill Gates?”]
  "We are pretty enthusiastic about the company's prospects," said Eric Schoenstein, co-portfolio manager of the Jensen Quality Growth fund, which owns the stock. "It may be an intangible. But it feels like the company is more transparent under Nadella. His style is different and less aggressive." (Dec 15) [37]
• In fact, if there’s one thing that makes Nadella the right person to stand watch over Microsoft’s middle age, it may actually be that he’s humbler and less ambitious than his predecessors. He’s more hip to nuance and compromise. He is not hell-bent on owning the world, because the world is too complex and fluid to be owned by anyone right now. (Dec 15) [39]
• "It certainly feels like a different Microsoft," says Ben Bajarin, Analyst at Creative Strategies. "The best way I can describe it is that this is a much more open Microsoft, and I say that across the board. Open to new ideas, fresh thinking, not being bound to one platform in Windows, open to embrace other operating systems like Android and iOS with their software and services, etc." (May 16) [41]
• DelBene says Nadella's "superpower" is in "envisioning where the industry's going, envisioning products, stitching together different patterns into new products". Nadella sees patterns in the way customers are using products and responds by directing software development resources to these areas. (Nov 19) [133]

On his leadership style

• “What is that quote? I forget now who said this,” he says. “You always overestimate what you can get done in a year and underestimate what you can get done in 10 years.” Later, I look up the quote. He got the gist of it right. And the person who said it was Bill Gates. (Jan 15) [23]
• Nadella says he’s reluctant to communicate with employees in financially oriented terms, and prefers to emphasize stories about the company’s software and devices making a difference in the real world, which also avoids echoing the Ballmer-era habit of tallying Microsoft’s billion-dollar businesses. His hope is that employees focus on making products better, not where those products sit within the maze of Microsoft or the broader technology industry. “I want everyone inside of Microsoft to take that responsibility,” Nadella said. “This is not about top-line growth. This is not about bottom-line growth. This is about us individually having a growth mindset.” (Jun 15) [30]
• "The notion of having work-life harmony in a highly competitive economy is a first-class topic," says Nadella. "I think the key is to make sure you're engaging in a dialog with your employees. There also needs to be flexibility in all the (workplace) policies that someone like me sets and propagates. You cannot have people burn out. It's bad for your company, and it's bad for society." (Sep 15) [32]
• “It’s so critical for leaders not to freak people out, but to give them air cover to solve the real problem,” Nadella says in an interview with USA TODAY. “If people are doing things out of fear, it’s hard or impossible to actually drive any innovation.” (Feb 17) [60]
• “Organizations should not be measured so much during a CEO’s tenure, but after,” says Nadella. “Because if it all falls apart after you’re gone, then you haven’t created an organization that is enduring.” (Feb 17) [60]
• “It’s fascinating how we [always] think that burning ambition early on is what drives you,” Nadella said. “I think what I had, though, was some curiosity, and that’s what sustained me in the long run.” He also modestly described his younger self as someone who liked to “tinker.” (Feb 18) [89]
• Mr Nadella’s use of language has been key, says Ms Heffernan. For people outside the tech industry, his use of jargon can seem stilted. But for those inside the company, simple messages, frequently repeated, have helped to cement the new behaviors.
  Peggy Johnson, an early hire to Mr Nadella’s top management group, credits him with an unusual “consistency of message”. That has turned what might have been merely lip-service in another company into an engine for real cultural change. After spending an entire senior management meeting discussing diversity and inclusion, she says, Mr Nadella went on to repeat the same themes exhaustively: “We never stopped talking about it. It wasn’t just a box-check.” (Jan 19) [117]
• Nadella believes that it’s terribly dangerous to fixate on financial measures such as market cap as an indicator of success. And he speaks from the experience of having lived through the first period when Microsoft became the world’s most valuable company, a few years after he joined in 1992. (Aug 19) [130]
•  “When I talk about what we espouse across the company,” Nadella says, “we have to ask how much of it is represented among the leadership team, starting with me. We have some amazing women on the team, for example. Are we making sure we really listen to them?” (Nov 19) [134]
• Nadella closed with advice offered to him by Ballmer as outgoing CEO: “Be bold and be right. If you’re not bold, you’re not going to do much of anything. If you’re not right, you’re not going to be here.” (Nov 19) [134]
• Nadella has a unique approach: He prefers to think of work-life “harmony” rather than “balance,” he told NowThis in May, because passion is what drives people to pursue work, he said.  “I think the key is to be able to not overdo the connection to the thing that’s burning you out, but to somehow keep that flame, which is the core passion you have persist,” Nadella told NowThis. “That’s the art form.” (Dec 19) [135]

On empathy

• "In the long run, EQ (emotional quotient) trumps IQ (intelligence quotient). Without being a source of energy for others very little can be accomplished." (Sep 14) [17]
• Regarding that Chicago-style thinking, is there a Booth class that was particularly memorable?
  It was a class that I took with [now-retired] professor Marvin Zonis on leadership. He stressed that EQ trumps IQ in the long run—the E is for empathy. (Oct 15) [36]
• "I think empathy is everything. If you think about even in the business context for us, our job is to meet the unmet, unarticulated needs of customers. That's where innovation comes from. There's no way we could innovate without having the deeper sense of empathy," he said. (Sep 17) [70]
• “I can’t just go to work and switch on this button called ‘the empathy button’ and then I’m going to be empathetic and all of my innovation is going to come because I switch this button on.…That’s where it led me to believe that the best way to innovate is to have empathy and the best way to develop this empathy is to essentially listen and learn from your own life experience.… If we integrate what we learn in our life and bring that to work, then your ability to meet the unmet, unarticulated needs of customers is going to be that much more tuned.” (Dec 17) [79]
• We’re in the business of meeting unmet, unarticulated needs of customers. That’s it. There’s no way we’re going to meet our unmet needs of customers if you don’t have a deep sense of empathy. (May 18) [98]

On learning

• I fundamentally believe that if you are not self-aware, you’re not learning. And if you’re not learning, you’re not going to do useful things in the future. (Feb 14) [12]
• Guthrie describes his boss in terms that crop up often in conversations about Nadella. He's a "lifelong learner" capable of "energizing the teams" and making "big bold bets" such as the recent partnership deals. (Oct 14) [20]
• Satya Nadella’s corner office, on the fifth floor of Building 34 at Microsoft’s Redmond, Washington, headquarters, features a can’t-miss 84-inch Surface touch-screen computer that dominates one wall. But what demands even more attention are the vast quantities of books in the room. They fill rows of shelves and are piled by the dozen on a long table next to Nadella’s desk.
  The place looks more like a neighborhood bookshop than the command center for the third-most-valuable company on the planet. “I read a few pages here or a few pages there,” Nadella says, in his typically understated manner. “There are a few books, of course, that you read end-to-end. But without books I can’t live.” (Sep 17) [65]

On culture

• I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work. (Apr 14) [13]
• Perhaps the most important driver of success is culture. Over the past year, we’ve challenged ourselves to think about our core mission, our soul — what would be lost if we disappeared. That work resulted in the mission, strategy and ambitions articulated above. However, we also asked ourselves, what culture do we want to foster that will enable us to achieve these goals?
  We fundamentally believe that we need a culture founded in a growth mindset. It starts with a belief that everyone can grow and develop; that potential is nurtured, not predetermined; and that anyone can change their mindset. Leadership is about bringing out the best in people, where everyone is bringing their A game and finding deep meaning in their work. We need to be always learning and insatiably curious. We need to be willing to lean in to uncertainty, take risks and move quickly when we make mistakes, recognizing failure happens along the way to mastery. And we need to be open to the ideas of others, where the success of others does not diminish our own. (Jun 15) [31]
• Nadella, who spoke with USA TODAY in anticipation of his keynote address Tuesday at Salesforce's annual Dreamforce customer event, says "ultimately what any company does when it is successful is merely a lagging indicator of its existing culture.
  "At Microsoft, we're aspiring to have a living, learning culture with a growth mindset that allows us to learn from ourselves and our customers," he says. "These are the key attributes of the new culture at Microsoft, and I feel great about how it seems to be resonating and how it's seen as empowering." (Sep 15) [32]
• "One of Satya Nadella's favourite quotes is 'culture eats strategy for breakfast'," says O'Brien. "[At Microsoft, under the new leadership there has been a change from a very fixed mindset, know-it-all culture to a more of a growth mindset, learn-it-all culture. Where there's an openness to learning, the pursuit of acquiring knowledge, rather than imparting your knowledge on others." (May 16) [41]
• We are a learn-it culture, not a know-it-all culture. (Oct 16) [48]
• "What I realize more than ever now is that my job is curation of our culture," says Nadella, who will explore this topic and others in a book due out this fall called Hit Refresh. "If you don't focus on creating a culture that allows people to do their best work, then you’ve created nothing.” (Feb 17) [60]
• Nadella: One of the things I’ve come to realize, and I think all of us at Microsoft have come to realize, is that there are two most important things determining long-term success. The first is the sense of purpose and mission that is enduring. Technologies will come and go, so you need to be able to both ask and answer the question: What do you do as a company, why do you exist? That’s exactly what is captured in our mission.
  The other one is culture. These are the two bookends to me. In fact, I went on a lookout for what’s the right metaphor for the cultural dialog. Putting up a poster in a conference room with some attributes of a new culture never works. You read it once and never remember it again. My inspiration came from the book I had read couple years before becoming a CEO — “Mindset” by Stanford professor Carol Dweck.
  I was reading it not in the context of business or work culture, but in the context of my children’s education. The author describes the simple metaphor of kids at school. One of them is a "know-it-all" and other is a "learn-it-all", and the "learn-it-all" always will do better than the other one even if the "know-it-all" kid starts with much more innate capability. (Apr 17) [62]
• BI: How do you approach failure in this context?
  Nadella: You embrace it. If you are going to have a risk-taking culture, you can’t really look at every failure as a failure, you’ve got to be able to look at the failure as a learning opportunity.
  Some people can call it rapid experimentation, but more importantly, we call it "hypothesis testing." Instead of saying "I have an idea," what if you said "I have a new hypothesis, let’s go test it, see if it’s valid, ask how quickly can we validate it." And if it’s not valid, move on to the next one.
  There’s no harm in claiming failure, if the hypothesis doesn’t work. To me being able to come up with the new ways of doing things, new ways of framing what is a failure and what is a success, how does one achieve success — it’s through a series of failures, a series of hypothesis testing. That’s in some sense the real pursuit. (Apr 17) [62]
• C in CEO stands for culture. (May 18) [96]
• I fundamentally believe, like any human being, companies have an identity, have a soul. (Oct 18) [109]

On humility and hubris

• He has spent time meeting with startup founders like Ryan Smith, who runs Utah-based survey software company Qualtrics and who presented to Nadella at the invitation of venture firm Accel. Nadella asked Smith a half-dozen questions, quickly picking up on where Smith placed his strongest engineering talent. Smith was impressed. It was his first time meeting with anyone in Redmond. “Historically, companies have struggled a little bit on how to work with Microsoft,” Smith says. “I mean, where do you start?” The meeting shifted his impression of the company. “This guy's different,” he says of Nadella. “He's humble.” (Jan 15) [23]
• "We clearly missed the mobile phone, there's no question," Nadella said. "Our goal now is to make sure we grow new categories." Nadella said he is always trying stay "in the hunt for the next high volume category," which is where he sees potential for virtual reality and augmented reality. Hololens, he said, could be the beginning of an "ultimate computer" based on mixed reality. (Oct 16) [49]
• The line between confidence and hubris is thin, so be careful not to cross it. (Feb 17) [58]
• “It was not like we were sitting around, thinking that Steve [Ballmer] is going to retire. So it was a shock. And the board did the right thing, which is they looked far and wide,” Nadella said. “When they came and talked to me and they said, ‘Do you wanna be CEO,’ I was honest. I said, ‘Only if you want me to be CEO.’” (Oct 17) [74]
• From ancient Greece to modern Silicon Valley, the one thing that has brought down empires is hubris. So I approach it as confidence, but understand confidence with humility. (Feb 18) [88]
• My biggest strength is my ability everyday to recognize my weaknesses. (May 18) [98]
• “One of the things I try to practice or build more muscle around is having the confidence that I’m capable of confronting my own demons while also avoiding hubris.” (May 18) [98]

Modern Leadership

1. Influence > Authority
2. Intent / Mindset > Current Talent
3. Context > Content
4. Inception > Orders
5. Why > Who > What
6. Ears > Eyes > Mouth
7. Questions > Answers
8. Prevention > Solution
9. Presence > Multitasking
10. Self-management > People-management 

Entrepreneurial Superpowers

Here are some leadership lessons I picked up working in pre-IPO startups and FAANG in Silicon Valley. 

1. Being able to work with and manage difficult people puts you at a huge advantage
2. Fear, pride, anger, excitement cloud your ability to make sound logical decisions. Making non-emotional decisions with impartial information is a super power. 
3. Crisp and clear communication is a super power.  You cannot be crisp if you are not precise. Do not hide uncertainty and do not bury nuance. 
4. Rigor and quality are essential to building and decision making. You cant build well and make good decisions without structured thinking and mental models. 
5. Likeability is key people like to do business with people they like. Leading by fear doesn't work.
6. Develop structured thinking, operate from clear first principles, create frameworks that make it easy for those principles to come to life across teams, products and people and communicate them effectively. 
7. Every leader's main job is sales : selling your idea, vision including hiring, managing, leading.
8. Being able to change your mind based on data, facts, new opinions. Surround yourself with people who will challenge your opinions. Build a culture around youself that is inclusive and invites that feedback. The biggest challenge as you go up the ladder is that the real feedback dries up. 
9. Saying NO. You sometimes have to step over the pennies to pick up the dollars. 

Mindset : The new psychology of success

 The Book in Three Sentences

1. Skills can be cultivated through effort.
2. People with a growth mindset thrive on challenges.
3. The fixed mindset: “I can’t do it”. The growth mindset: “I can’t do it yet”.

The Five Big Ideas

1. The view you adopt for yourself profoundly affects the way you lead your life.
2. “Believing that your qualities are carved in stone—the fixed mindset—creates an urgency to prove yourself over and over”.
3. “People in a growth mindset don’t just seek challenge, they thrive on it”.
4. “The growth mindset does allow people to love what they’re doing—and to continue to love it in the face of difficulties”.
5. “Those with the growth mindset found success in doing their best, in learning and improving. And this is exactly what we find in the champions”.

Mindset Summary

• “[Children with a growth mindset] knew that human qualities, such as intellectual skills, could be cultivated through effort”.
• “Not only were [the children with a growth mindset]not discouraged by failure, they didn’t even think they were failing. They thought they were learning”.
• “What are the consequences of thinking that your intelligence or personality is something you can develop, as opposed to something that is a fixed, deep-seated trait?”
• “Robert Sternberg, the present-day guru of intelligence, writes that the major factor in whether people achieve expertise ‘is not some fixed prior ability, but purposeful engagement’.”
• “For twenty years, my research has shown that the view you adopt for yourself profoundly affects the way you lead your life”.
• “Believing that your qualities are carved in stone—the fixed mindset—creates an urgency to prove yourself over and over”.
• “This growth mindset is based on the belief that your basic qualities are things you can cultivate through your efforts. Although people may differ in every which way—in their initial talents and aptitudes, interests, or temperaments—everyone can change and grow through application and experience”.
• “Why waste time proving over and over how great you are, when you could be getting better? Why hide deficiencies instead of overcoming them?”
• “The passion for stretching yourself and sticking to it, even (or especially) when it’s not going well, is the hallmark of the growth mindset”.
• “The fixed mindset makes you concerned with how you’ll be judged; the growth mindset makes you concerned with improving”.
• “When you enter a mindset, you enter a new world. In one world—the world of fixed traits—success is about proving you’re smart or talented. Validating yourself. In the other—the world of changing qualities—it’s about stretching yourself to learn something new. Developing yourself”.
• “Benjamin Barber, an eminent sociologist, once said, ‘I don’t divide the world into the weak and the strong, or the successes and the failures…. I divide the world into the learners and non-learners’.”
• “People in a growth mindset don’t just seek challenge, they thrive on it”.
• “We gave fifth graders intriguing puzzles, which they all loved. But when we made them harder, children with the fixed mindset showed a big plunge in enjoyment”.
• “For [people with a growth mindset] it’s not about immediate perfection. It’s about learning something over time: confronting a challenge and making progress”.
• “‘Becoming is better than being’. The fixed mindset does not allow people the luxury of becoming. They have to already be”.
• “People with the growth mindset know that it takes time for potential to flower”.
• “College students, after doing poorly on a test, were given a chance to look at tests of other students. Those in the growth mindset looked at the tests of people who had done far better than they had. As usual, they wanted to correct their deficiency. But students in the fixed mindset chose to look at the tests of people who had done really poorly. That was their way of feeling better about themselves”.
• “John Wooden, the legendary basketball coach, says you aren’t a failure until you start to blame. What he means is that you can still be in the process of learning from your mistakes until you deny them”.
• “French executive Pierre Chevalier says, ‘We are not a nation of effort. After all, if you have savoir-faire [a mixture of know-how and cool], you do things effortlessly’.”
• “People with the growth mindset, however, believe something very different. For them, even geniuses have to work hard for their achievements”.
• “They may appreciate endowment, but they admire effort, for no matter what your ability is, effort is what ignites that ability and turns it into accomplishment”.
• “The growth mindset does allow people to love what they’re doing—and to continue to love it in the face of difficulties”.
• “Those with the growth mindset found success in doing their best, in learning and improving. And this is exactly what we find in the champions”.
• “Those with the growth mindset found setbacks motivating. They’re informative. They’re a wake-up call”.
• “People with the growth mindset in sports (as in pre-med chemistry) took charge of the processes that bring success—and that maintain it”.

Management Phases of Growth

These stages arent necessarily going to be sequential. Same manager may show signs from multiple different stages with varying proportions. They may regress between stages unknowingly during war times or under stress or pressure. The stages overall correspond to many manager's stage and growth.

Stage 1

New Manager : A new manager who is unwittingly trying to prove why he deserves the management job

Common Signs

1. General insecurity
2. Hero mentality : dives in wherever needed, wears all the hats, fills all the gaps, prone to burnout
3. Rarely says No or I Don't Know
4. Nitpicks a lot when providing feedback
5. Sometimes ends up competing with direct reports
6. Still honing delegation skills
7. Generally have mastery over a certain area or domain which leads from IC -> Manager transition

Stage 2 

A manager who is all business and primarily treats people as resources. May care about people. But cares more about short term results and targets. When the two are in conflict, unabashedly prioritizes short term results. 

Common Signs

1. Graduating from phase 1
2. Gets distracted in 1:1s
3. Often uses processes, policies, senior management, company culture for their stance, don't own the message
4. Tends not to make an effort to maintain a relationship once someone leaves the team
5. Doesn't optimize for long term health and wellbeing, optimizes for people and product metrics
6. People don't follow this manager
7. May sometimes feel the need to perform in 1:1
8. May burn out the team or members of the team
9. Doesn't have a strong executive presence at the top

Stage 3

A manager with only one management style that he uses on everyone on the team. In most cases, it is the style that "he prefers" to be managed.

Common Signs

1. Even though he doesn't spell out loudly, there is a preferred style and playbook which is "the right way to do things". Deviations are a headache. 
2. Hires people who fit a certain stereotype and lacks diversity. 
3. Great rapport with a few team members, but leaves all other team members very frustrated. 
4. May be directive or assistive depending on junior or senior people, has a set of questions as playbook. The playbook is evolving and doesn't have many new tricks.
5. May have good personalization in their style, but works for some types of folks.
6. These managers may be able to run certain kinds of teams sustainably and in a healthy manner for a reasonable lengths of time
7. Starting to develop executive presence
8. May sometimes model a stage 4 implementation and not the abstraction. May do it unknowingly, so will swing from doing well to being terrible depending on team and context change. 

Stage 4

Great Managers

1. Great Managers have multiple leadership styles. They are able to adapt their style to needs and the challenges depending on the lifecycle of the team and personalize that to the different kinds of needs and styles of the people. The adapt their approach to the learning and working styles of everyone, they don't have an ideal employee. 
2. They address context first and then content.
3. They don't apply band-aid on the wounds or address symptoms. They understand most of the problems are inter-personal. They diagnose and address the root cause. 
4. They use their charm, eloquence and writing skills as tools, not as weapons. 
5. The put their team members above their own self when they are in conflict. 
6. They are proactive about the career growth of their team members, they don't dread those conversations, they invite them. 
7. They are confident and secure in their role.
8. They model high agency. 
9. The have a mature attitude.
10. They know its fine to express vulnerability. They create a safe environment for learning. 
11. They exude presence. 
12. Good managers consistently get good results
13. They don't necessarily squeeze the last drop out for short term optimization for their team, but get long term optimal results for the company. 
14. Key difference between phase 3 and phase 4 is that mastery over a certain area is not needed for a stage 4 manager to succeed in that area. 
15. Executives rely on stage 4 manager's inputs to chart the trajectory of the organization. 

I didnt come this far to only come this far

I didn’t come this far to only come this far. I hear some people saying things like: “When I make it”… “When I get to the top”… “I’ll keep working hard until I get to the top”… “Until I reach my goal”… Let me tell you something: There is no “END”! WINNERS NEVER STOP!
If you reach your GOAL: SET A BIGGER GOAL. If you get to the top of the mountain: Find a bigger mountain!
It’s the journey.
The journey last’s a lifetime
From the start to the finish it’s a real grind
Spent so many days…. working on my mind
Keep a strong mind, live a strong life!
My goals are higher than the skylines
So I ain’t sitting on the sidelines
You think I care about hard times?
I didn’t come this far to let my life fly by
This ain’t about the money
This ain’t about the fame
It ain’t about the status
or material things
It’s about the growth
It’s about the challenge
setting goals, achieving then setting bigger goals
I always hear people say “when I make it, or when I reach the top then I’ll stop”
But the winners never quit
The winners never stop
the journey never ends even
Even at the top!
I didn’t come this far, to only come this far.
I knew the road would be tough from the start
I never complained about my cards
I know the journey is long
Whatever comes my way I’ll stick to the path
Nothing can stop me
just look at my scars
I didn’t come this far
To only come this far
NO! NO! NO!
I’m only getting started. This is just the beginning.
I AM proud of my achievements, but that doesn’t mean I’ll settle for them!
PROUD but NEVER SATISFIED.
PROUD but FOREVER HUNGRY.
PROUD and ALWAYS READY!
PROUD but PUSHING.
PUSHING FOR MORE!
PUSHING FOR GREAT!
I didn’t come this far just to only come this far
I came this far to go further!
Get stronger and push myself harder
I wanna let you know I’m just getting started
I’ve been knocked down
Kicked on and picked on
Stabbed in the back
Heckled and laughed at
Can’t tell you how many times I’ve been let down
But a thousand failures never ever kept me down
I know what it takes
I ain’t scared of mistakes
Sometimes you go through hell before the pearly gates
Everyday’s a new day, a chance to be great, a chance to elevate
There’s no way I am stopping at the third base
If ain’t going all the way, then I ain’t starting in the first place
I didn’t sacrifice everything and come all this way
To give up when I’m only 3 feet away
I didn’t come this far, to only come this far.
I knew the road would be tough from the start
I never complained about my cards
I know the journey is long
Whatever comes my way I’ll stick to the path
Nothing can stop me just look at my scars
I didn’t come this far
To only come this far
NO! NO! NO!
If the journey wasn’t challenging, the destination wouldn’t be rewarding. It’s the challenge that makes the greatness. If you reach your GOAL: SET A BIGGER GOAL If you get to the top of the mountain: Find a bigger mountain!

How to manage your skip - playbook

You relationship with you skip is key to your long term success in the organization. Your skip has wider visibility of the organization, they know what is brewing in the 6 month, 1 year horizon and can fast track your career when you might start feeling to get stalled. 

Here are the top few things that your skip cares about

1. What is your brand, who you are as a person, where are you at and where do you want to go and how can you help your skip.
2. Ask them what their top 5 priorities are, what gets them up from bed every morning - aspiration and what keeps them awake at night - headaches. See how you can position your team in those top priorities. 
3. Understand their people plans, who are the key people who they are investing on and how can you be one of those who they invest on. 
4. It is always important to talk about your medium/long term ambitions with your skip so that he is aware. You need to always let them know that you can take on more. Key to doing that is delegating and setting current things up well and taking on more by doing additional org impact. From your skips perspective, they are always thinking that how can I take on more and who are the people who can help me deliver. A lot of the higher level decisions will happen when you wont even know and these conversations will set you up for being considered for those roles. 
5. You should talk to your skip about organization health, if you notice group dynamics, conflicts arising in the organization, it is your responsibility to let your skip know and help them build the organization.
6. If you have a plan on managing up beyond your chain, that is something that you can share and get buyin with your skip. These are all examples of good agenda items. This is where your skip can help you gain broader organizational visibility. 

Things your skip doesn't care about

1. Dont waste time talking to your skip about projects, that is your managers job and your skip expects your manager to take care of it

Super Thinking : The Big Book of Mental Models

MENTAL MODELS

What is a mental model and why should we care?

Mental models are recurring concepts that you can use to quickly create a mental picture of a situation, which becomes a model that you can later apply in similar situations.

Every discipline, like physics, has its own set of mental models that people in the field learn through coursework, mentorship, and firsthand experience.

However, there is a smaller set of mental models that are useful for people like you and me in general day-to-day decision-making, problem-solving, and truth-seeking.

In short, mental models are shortcuts to higher-level thinking.

If you can understand the relevant mental models for a situation, then you can bypass lower-level thinking and immediately jump to higher-level thinking. For this to happen, though, you must apply them at the right time and in the right context.

Super Thinking is a toolbox that systematically lists, classifies, and explains all the important mental models across the major disciplines.

Reading this summary (and maybe later the full book) is just the first step. Learning to successfully apply mental models doesn’t happen overnight. You must develop your powers through repeated practice.

In the next 9 chapters, let’s explore the 130+ major mental models out of the 300 included in this book.

(The name of the mental model in bold, followed by a short explanation. For more mental models and examples, please read the full book.)

1. BEING WRONG LESS

To avoid mental traps, you must think more objectively.

Try arguing from first principles (a group of self-evident assumptions that make up the foundation on which your conclusions rest), getting to the root causes (the real reason something happened), and seeking out the third story (the story that a third, impartial observer would recount).

Realise that your intuitive interpretations of the world can often be wrong due to availability bias (when information recently made available to you distort your objective view of reality), fundamental attribution error (e.g. when you think someone is mean, rather than thinking they were just having a bad day), and optimistic probability bias (being too optimistic about the probability of success).

Use Ockham’s razor (the simplest explanation is most likely to be true) and Hanlon’s razor (never attribute to malice that which is adequately explained by carelessness) to begin investigating the simplest objective explanations. Then test your theories by de-risking (to be wrong less, you need to be testing your assumptions in the real world), avoiding premature optimisation (tweaking or perfecting something too early).

Attempt to think gray (the truth is not black or white, but somewhere in between, a shade of gray) in an effort to consistently avoid confirmation bias (interpreting new information in a biased way to confirm pre-existing beliefs).

Actively seek out other perspectives by including the Devil’s advocate position (taking up an opposing side of an argument, even if it is one you don’t agree with) and bypassing the filter bubble (online companies showing you more of what they think you already know and like).

Consider the adage “You are what you eat.” You need to take in a variety of foods to be a healthy person. Likewise, taking in a variety of perspectives will help you become a super thinker.

2. ANYTHING THAT CAN GO WRONG, WILL

In any situation where you can spot spillover effects (the effect of an activity spills over outside the core interactions of the activity, like a polluting factory), look for an externality (like bad health effects) lurking nearby.

Public goods (like education) are particularly susceptible to the tragedy of the commons (like poor schools) via the free rider problem (like not paying taxes).

Beware of situations with asymmetric information (one side of a transaction has different information than the other side), as they can lead to principal-agent problems (the self-interest of the agent may lead to suboptimal results for the principal).

Be careful when basing rewards on measurable incentives, because you are likely to cause unintended and undesirable behaviour (Goodhart’s law).

Short-termism (when you focus on short-term results over long-term results, not investing enough in the future) can easily create disadvantageous path dependence (your available set of decisions now is dependent on your past decisions); to counteract it, think about preserving optionality (make choices that preserve future options) and keep in mind the precautionary principle (when an action could possibly create harm, proceed with extreme caution).

Internalise the distinction between irreversible (hard, if not impossible to unwind) and reversible decisions (more fluid), and don’t let yourself succumb to analysis paralysis (poor decision-making because of over-analysing the large amount of information available) for the latter.

Oh, and heed Murphy’s law (anything that can go wrong, will go wrong)!

3. SPEND YOUR TIME WISELY

Choose activities to work on based on their relevance to your north star (the guiding vision of a company or person).

Focus your time on just one of these truly important activities at a time (no multitasking!), making it the top idea on your mind (where your thoughts drift toward when your mind drifts freely).

Select between options based on opportunity cost models (every choice has a hidden cost: the value of the best alternative opportunity you didn’t choose).

Use the Pareto principle to find the 80/20 in any activity and increase your leverage (like getting financed to achieve your business goals faster) at every turn.

Recognise when you’ve hit diminishing returns (the tendency for continued effort to diminish in effectiveness after a certain level) and avoid negative returns.

Use commitment and the default effect (scheduling default commitments toward your long-term goals) to avoid present bias (overvaluing near-term rewards over incremental progress on long-term goals), and periodic evaluations to avoid loss aversion (getting more displeasure from losing than pleasure from gaining) and the sunk-cost fallacy (previous losses influencing you to make a bad decision now).

Look for shortcuts via existing design patterns (reusable solutions to a problem), tools, or clever algorithms. Consider whether you can reframe the problem.

4. BECOMING ONE WITH NATURE

Adopt an experimental mindset, looking for opportunities to run experiments and apply the scientific method wherever possible.

Respect inertia (any resistance to a change in direction): create or join healthy flywheels (once something is spinning, it takes little effort to keep it spinning); avoid strategy taxes (a long-term commitment with inertia to an organisational strategy, leading to suboptimal decisions) and trying to enact change in high-inertia situations unless you have a tactical advantage such as discovery of a catalyst and a lot of potential energy (stored energy waiting to be released).

When enacting change, think deeply about how to reach critical mass and how you will navigate the technology adoption life cycle (innovators, early adopters, early/late majority, laggards).

Use forcing functions (a pre-scheduled event that helps you to take a desired action) to grease the wheels for change.

Actively cultivate your luck surface area (make your luck by meeting more people and finding more opportunities) and put in work needed to not be subsumed by entropy (too rigid life with few opportunities).

When faced with what appears to be a zero-sum or black-and-white situation, look for additional options and ultimately for a win-win (where both parties end up better off).

5. LIES, DAMNED LIES, AND STATISTICS

Avoid succumbing to the gambler’s fallacy (believing that a streak of events is more likely to continue, while the underlying probability hasn’t changed).

Anecdotal evidence (informally collected evidence from personal stories) and correlations you see in data are good hypothesis generators, but correlation does not imply causation – you still need to rely on well-designed experiments to draw strong conclusions.

Look for tried-and-true experimental designs, such as randomised controlled experiments (participants randomly assigned to two groups) or A/B testing, that show statistical significance.

Any isolated experiment can result in a false positive (falsely giving a positive result when it really wasn’t true) or a false negative (the opposite) and can also be biased by myriad factors, most commonly selection bias (when the selected sample is not representative of the broader population of interest), response bias (when an important subset of people fail to respond to an experiment, the results will end up biased), and survivorship bias (e.g. not accounting for the opinions of former employees).

Replication increases confidence in results, so start by looking for a systematic review and/or meta-analysis (combining data from several studies into one analysis) when researching an area.

Always keep in mind that when dealing with uncertainty, the values you see reported or calculate yourself are uncertain themselves, and that you should seek out and report values with error bars (a visual way to display a measure of uncertainty for an estimate)!

6. DECISIONS, DECISIONS

When tempted to use a pro-con list (listing all the pros and cons of a decision and weighing them against each other), consider upgrading to a cost-benefit analysis (more systematically and quantitatively analysing the benefits and costs across an array of options) or decision tree (a diagram that looks like a tree, with different decisions & outcomes as branches) as appropriate.

When making any quantitative assessment, run a sensitivity analysis (analysing how sensitive a model is to its input parameters) across inputs to uncover key drivers and appreciate where you may need to seek greater accuracy in your assumptions.

Beware of black swan events (extreme events which have significantly higher probabilities than you might initially expect) and unknown unknowns. Use systems thinking (when you attempt to think about the entire system at once) and scenario analysis (analysing different future scenarios that might unfold) to more systematically uncover them and assess their impact.

For really complex systems or decision spaces, consider simulations to help you better assess what may happen under different scenarios.

Watch out for blind spots that arise from groupthink (a bias that emerges because groups tend to think in harmony). Consider divergent (trying to get thinking to diverge in order to discover multiple possible solutions) and lateral thinking (trying to get thinking to converge on one solution) techniques when working with groups, including seeking more diverse points of view.

Strive to understand the global optimum (the best solution amongst all local optimums: good, but not great solutions) in any system and look for decisions that move you closer to it.

7. DEALING WITH CONFLICT

• Analyse conflict situations through a game-theory lens. Look to see if your situation is analogous to common situations like the prisoner’s dilemma (probably the most famous game theory example), ultimatum game (a game that helps you keep fairness in mind when you make decisions that impact people important to you), or war of attrition (long series of battles depletes both sides’ resources, eventually leaving vulnerable the side that starts to run out of resources first).
• Consider how you can convince others to join your side by being more persuasive through the use of influence models like reciprocity, commitment, liking, social proof, scarcity, and authority. And watch out for how they are being used on you, especially through dark patterns (models used to manipulate you for someone else’s benefit).
• Think about how a situation is being framed and whether there is a way to frame it that better communicates your point of view, such as social norms (the right thing to do, such as a favour) versus market norms (considering your own financial situation first), distributive justice (fairness around how things are being distributed) versus procedural justice (fairness around adherence to procedures), or an appeal to emotion (influence by manipulation of emotions).
• Try to avoid direct conflict because it can have uncertain consequences. Remember there are often alternatives that can lead to more productive outcomes. If diplomacy fails, consider deterrence (using a threat to prevent an action by an adversary) and containment (an attempt to contain the enemy, to prevent its further expansion) strategies.
• If a conflict situation is not in your favor, try to change the game, possibly using guerrilla warfare (nimbler tactics of a smaller force that larger forces have trouble reacting to effectively) and punching-above-your-weight (purposefully performing at a higher level than is expected of you) tactics.
• Be aware of how generals always fight the last war (using strategies, tactics, and technology that worked for them in the past), and know your best exit strategy (coming up with a well-defined exit plan that will keep you from doing things you might later regret).

8. UNLOCK PEOPLE’S POTENTIAL

People are not interchangeable. They come from a variety of backgrounds and with a varied set of personalities, strengths, and goals. To be the best manager, you must manage to the person, accounting for each individual’s unique set of characteristics and current challenges.

Craft unique roles that amplify each individual’s strengths and motivations. Avoid the Peter principle by promoting people only to roles in which they can succeed.

Properly delineate roles and responsibilities using the model of DRI (directly responsible individual, accountable for the success of each action item).

People need coaching to reach their full potential, especially at new roles. Deliberate practice is the most effective way to help people scale new learning curves. Use the consequence-conviction matrix (a conviction, consequence quadrant (high/low) to sort your decisions) to look for learning opportunities, and use radical candor within one-on-ones to deliver constructive feedback.

When trying new things, watch out for common psychological failure modes like impostor syndrome (fearing being exposed as a fraud, even though in reality they are not) and the Dunning-Kruger effect (describing the confidence people experience as they move from being a novice to being an expert).

Actively define group culture and consistently engage in winning hearts and minds (communicating directly to people’s hearts and minds to win them over) toward your desired culture and associated vision.

If you can set people up for success in the right roles and well-defined culture, then you can create the environment for 10x teams (collectively achieving outsized impact) to emerge.

9. FLEX YOUR MARKET POWER

Find a secret (knowing something that is important yet mostly unknown or not yet widely believed) and build your career or organisation around it, searching via customer development for product/market fit (or another “fit” relevant to the situation).

Strive to be like a heat-seeking missile (collecting data and constantly looking for bigger and better targets) in your search for product/market fit, deftly navigating the idea maze (the process of turning your secret into a product that achieves product/market fit). Look for signs of hitting a resonant frequency (actions/strategies that bring dramatically better results) for validation.

If you can’t find any bright spots (positive signs in a sea of negative ones) in what you’re doing after some time, critically evaluate your position and consider a pivot (a change in course of strategic direction).

Build a moat (shielding yourself from the competition) around yourself and your organisation to create sustainable competitive advantage.

Don’t get complacent; remember only the paranoid survive (you will not keep winning in perpetuity), and keep on the lookout for disruptive innovations, particularly those with a high probability of crossing the chasm (many ideas, companies, and technologies fail to make it from one side of the technology adoption life cycle to the other).

CONCLUSION

Key takeaways

• Mental models unlock the ability to think at higher levels.
• To avoid mental traps, you must think more objectively.
• Choose activities to work on based on your guiding vision.
• Look for shortcuts via existing design patterns, tools, or algorithms.
• Apply the scientific method and experimental mindset when possible.
• Analyse conflict situations through a game-theory lens.
• Manage to the person, accounting for each individual’s uniqueness.
• Find a secret and build your career or organisation around it,