This past Sunday, “CBS Sunday Morning” aired my profile of Satya Nadella, who’d worked at Microsoft for 25 years before being chosen to become the third CEO in Microsoft’s history. (You can watch the CBS story here.)
Nadella’s thoughtful, gentle personal style could not be more different from the brash, aggressive approaches of Bill Gates and Steve Ballmer. So far, his style seems to be working: Microsoft’s (MSFT) stock has more than doubled in the three years he’s been at the helm.
I spent an entire day with Nadella, including some time in his home with his wife Anu and son Zain. As always, we had time for only pieces of the interview on TV — so here’s a more complete edited transcript.
Pogue: In your book, “Hit Refresh,” you talk a lot about empathy and compassion. Bill Gates and Steve Ballmer, during their tenures here, had terrific strengths, but I’m not sure compassion would be the word that jumps out.
Nadella: In their own way, I feel that they have a lot of that, very deep. But when I think about empathy or compassion, pick your word, I just don’t think that this is a soft skill that’s nice. I think it’s a business essential.
And I’ll tell you why. We are in the business of meeting unmet, unarticulated needs of customers all over the world, long before even they can articulate it. If we can do that, then we will be successful. If we can’t, we won’t. It’s an essential skill, an essential attribute, for product creation.
Pogue: And yet at this time in America, compassion seems harder to come by than in other times.
Nadella: I’m a product of two amazingly unique American things. One is American technology reaching me where I was growing up, and making it possible for me to dream; the other is the enlightened American immigration policy, allowing me to come and live that dream.
When I sit here, as unlikely CEO of Microsoft, both of those come to mind. So I’m long-term optimistic. I always will say that in the U.S., the real currency is that ability to take differences and bring people together to make our society a stronger society.
Pogue: What is your relationship with the president?
Nadella: I’ve had a chance to meet him a couple times. Once before he was inaugurated, in Trump Tower, and once after, when he called all the tech leaders to meetings in the White House. Good conversations.
I mean, one of the core goals that the administration has is to modernize the government, the technology. And we obviously have longstanding relationships with all the government agencies, and it’s much needed.
Pogue: But what about this initiative, the DACA repeal? Sending home children of undocumented immigrants in this country? A number of them work here at Microsoft. You’ve publicly disagreed with that.
Nadella: Absolutely. Wherever there is any public policy that is not sympathetic to diversity and inclusion, foundational human values that we care deeply about, our employees care deeply about, we’re gonna be very principled in our opposition to it.
Pogue: And you have offered to do something for the employees of Microsoft who will be affected by this DACA repeal…
Nadella: We’ll fight on their behalf, in the courts. We will intervene wherever and however possible. Like we are in other areas, like privacy.
Pogue: Having read the book, you strike me as a kinder, gentler CEO. It seems you want people to get along. For example, you express frustration at the fiefdoms and bickering you inherited among Microsoft employees. You inherited lawsuits that had been dragging on in court, with Samsung and others, and you said, “Guys, guys, guys. Can’t we work it out?” And you raised a lot of eyebrows when you started writing Microsoft Office products for your direct competitors, like iPhones.
Is that a good characterization of your style?
Nadella: Yeah. It is. It’s not about viewing this as zero sum. It’s being able to face up to the realities. I like to describe this as courage in the face of reality.
But at the same time, looking back at our history has been helpful. The number of billion-dollar franchises that were built on Windows is far greater than any other platform. So I said, “Okay. Let’s start viewing today’s world with what made us good in the first place.” So when it comes down to, “hey, there are a billion smartphones!”, it only makes business sense for us to make sure our customers can use our applications and our cloud services on them.
Pogue: Your new strategy is “Cloud first, mobile first.”
Nadella: Actually, we’ve updated that.
There is more technology in our life, not less, with each passing day. We started with mainframes, and then to PCs, which we had on our desks. Now we have smartphones in our pockets. Now we have sensors that go beyond the pocket — on your wrist, or holographic or mixed reality computing, where what you see is a mix of the analog and the digital world.
So we are in the secular march to more and more computing in our lives. So what technological paradigm makes all this possible? That’s what we describe as the intelligent cloud and the intelligent edge. We’re evolving to more of an intelligent cloud and an intelligent edge, which means that you’re going to have many, many devices.
Pogue: So the cloud is, in super simple terms, the control center that’s on the internet; what’s the “edge”?
Nadella: All the devices, and the application experiences that span all the devices.
Pogue: That’s where the edge of the cloud meets the real world?
Nadella: That’s correct. That’s a great way to describe it.
You will go from device to device, whether it’s in a conference room, your work, or in your home. You’re gonna have thermostats, TVs, speakers, PCs, phones, and your app is going to be spread across all of it. The experience is going to be spread across all of it. It’s enabling you to be mobile, as opposed to the device being mobile — that’s the architecture that we’re moving towards.
Pogue: Microsoft famously missed the boat on smartphones. I actually liked Windows 10 on the phone a lot — why did it fail?
Nadella: Sometimes these digital ecosystems have real “network effects.” The first one to the market shapes it, and then there’s always room for the second one. But whenever it comes down to third or fourth ecosystems, they’re hard.
The lesson I learned from our own obsession of PC being “the hub for all things, for all time to come,” is that there’s no such thing as one device that’s going to be the hub for all things for all time to come! Everybody thinks that the current devices is the last device you’ll ever need — until it’s not.
And so the question is then, what is the constant here? The constant is the person. And so if you start building useful services to them, that span all their devices… Whether it’s a phone, a PC, a large screen in my office, a speaker — all of them are Office 365 devices.
Pogue: Cloud services has been a big push of yours, right? Where you provide other companies with these gigantic data farms that are too expensive and technical to run themselves?
Nadella: Absolutely. This is a push that actually Steve got started, and while working for Steve, I started some of our infrastructure side.
These are fast-growth businesses. We now have in excess of $20 billion run rate — and growing at a very, very fast clip. And so it requires both a significant amount of capital investment, and great innovation in software. And we’re excited about the future. For example, one of the big, new things that we are doing is, how do we infuse into all of our cloud services artificial intelligence?
You can now use PowerPoint, and while you’re presenting, automatically translate what you are saying into 60-plus languages simultaneously. That’s AI in action. But every app developer on Azure [Microsoft’s suite of cloud services] has access to that same capability, and that’s really what’s on our agenda.
Pogue: You’re really doubling down on Microsoft’s investments in AI. But some experts, Elon Musk and Stephen Hawking, are deeply concerned about our rush into artificial intelligence. They’re saying, “Slam on the brakes,” not slam on the accelerator.
Nadella: The way I come at it is perhaps a little more pragmatic.
The rate of progress in AI is stunning, there’s no question. But anything like AGI, or Artificial General Intelligence, we are some ways away. That’s where the machine is as good as a human being in everything.
Think about humans. We can be put in a new environment. We’ll learn. We’ll adapt. But the roadmap to achieving something like that in AI is a long ways away. We are very, very early on.
But to your point, we as creators of AI have a real responsibility to make some design decisions. We should build AI that we can be accountable. I don’t want us to abdicate. “Oh, we created some program that learns. We don’t know how it learns.” That’s just not a way for us to proceed.
Pogue: In your book, you write movingly about the birth of your son, Zain, who’s quadriplegic; there’s an implication that that event changed you.
Nadella: Yeah. There have been a few moments where, in my personal life, there were really these “hit refresh” moments, and Zain’s birth clearly was one such. A few hours before Zain was born, if somebody had asked me, “What are the things that you are thinking about?”, I would have been mostly thinking about, “How will our weekends change?” And childcare, and what have you.
Obviously, after he was born, our life drastically changed. My wife Anu had to drop out of the workforce to take care of him fulltime. To be able to see the world through his eyes, and then recognize my responsibility towards him, has shaped a lot of who I am today, and shaped even how I show up in other places, whether it’s at work or with my other children.
Pogue: So that empathy has even changed how you lead?
Nadella: When you lead, there’s no way you can motivate anyone if you can’t see the world through their eyes.
There’s no way you can get people to bring their A game if you can’t create an environment in which they can contribute. But creating that environment requires you to be in touch with, what are they seeking? What motivates them? What drives them? What are their needs?
And, of course, the fact that you practice empathy at work will only make you a better parent, a better partner, and a better person all around.
Pogue: Well, I know one thing you probably miss, having moved to America. You have no one to talk to about cricket.
Nadella: Well, I mean, it’s no longer true! Because in this connected world of ours — one of my subscriptions is for a TV channel. And so I’m watching cricket all the time.
Pogue: All right, we have about 10 seconds left. Explain to me the rules of cricket.
Nadella: No. (laughs)
David Pogue, tech columnist for Yahoo Finance, welcomes non-toxic comments in the Comments below. On the Web, he’s davidpogue.com. On Twitter, he’s @pogue. On email, he’s firstname.lastname@example.org. You can sign up to get his stuff by email, here.