5: [APPLAUSE] >> Stacia,

14: we are so excited to have you today as you can see. You've said that Microsoft's mission is not to be cool to make others cool?

22: But Bob Dylan is playing across campus today and you sold out faster than him. So, >> [LAUGH]

28: >> We certainly think Microsoft is cool. >> [APPLAUSE] >> Really though, we're so

35: grateful to you for making the time to be with us, and we have a lot to cover. But I thought we could start with your childhood in India.

42: You've said that your father never met a test he didn't ace, while your mother was the opposite of a tiger mom.

49: I love that contrast, and I'm curious how that different life philosophy's shaped you. >> First of all, thank you so much, Tara, for having me here.

57: It's great to be at the GSB and Bob Dylan was my idol.

62: >> [LAUGH] >> So times has been changing, it's interesting.

69: In fact, my father passed away just last month and I'm here reflecting quite a bit on what both my parents have meant to me.

81: My father was a Marxist economist and a civil servant.

86: And he had a definitive point of view on what, life was all about and the struggle in life.

96: And he's right, I mean the guy always used to look at my marks, I mean my score cards and used to be amazed that somebody could be done bad.

106: But luckily enough I think in some sense he gave me in spite of all

111: that a lot of confidence because to him he felt like look it's marathon,

117: you will catch up this is not that hard. And my mother was exactly the opposite of course the only question she would ever

124: ask me is are you happy? And I would say what the heck does that mean, when you are reading my score card I don't know if I should be happy or not.

131: But again the two of them I think when I look back growing up in Hyderabad in India in the late 70s, early 80s.

140: Interestingly enough, there are three or four of us, who now suddenly become CEOs from the same high school.

146: At that time was off the grid place. I think it was that ability to think.

155: That ability to pursue your own passions. And have enough confidence as well as some humility.

165: Sort of when I look back, I have been perhaps the biggest drivers

170: of what sort of turned out to be a reasonable several things. >> Absolutely, yeah.

176: It's really clear how much your parents influenced you. And another foundational influence for you was sports.

181: Now, my fellow international classmates and I were mystified daily by American sports references.

187: So we're very happy to talk about cricket. >> Yeah. >> You love cricket, and you dreamt of playing professionally.

194: >> [LAUGH] >> What lessons did you take from the pitch. Well, I mean, [LAUGH] all of us who are South Asian are obsessed with that sport.

202: And in fact, that's right, I mean, that was what I was pretty much all bound up in all

211: through my high school, into college. And, when I look back, I think all sport teaches you a lot.

219: And especially at least I feel team sport, I think has a huge impact and how you think about leadership.

229: I'll never forget this one particular incident that I think subsequently written about.

235: There's this guy who was my school captain, who went on to do pretty well in the context of Indian cricket.

242: I was bowling trash that day and he took over from me, got a wicket, which is a break though.

251: But then he gave me the ball back and then I went on to have perhaps the best bowling spell I've ever had in my life.

257: And I always reflected as to why did he do that? And then, in fact, much later on in life, I went back and ask to meet with him.

266: And so at least the way I surmise it as a leadership decision he made of saying,

272: look, he had recognized the importance of not breaking my confidence.

277: And I said like well that's a pretty enlightened decision for a high school leader, captain of a cricket team to make.

285: And a lot of leadership lessons is that, right. Which is you gotta make hard calls on, say, performance, but

291: also you got be able to sort of understand that you need your team and it's not like everybody is going to have a good day all the time.

298: And that saddled distinction and that judgement, right, which is one of the things that I feel which is the most understated part

308: of leadership is judgement, and it's so important. And that judgement comes by you exercising this muscle around passing judgement and

317: learning from it. And I thought that's one of the lessons I learned. >> He was building a confidence in a way, by making-

322: >> That's right, that's right. >> So you didn't end up playing professional cricket, oddly. [LAUGH] >> Here I am.

328: >> [LAUGH] >> But you did make you way to the US and soon after you started your own family.

334: And in reading your book, something that really moved me was how much you talk about your family and the role they've played bringing empathy into your life.

342: Could you share with us how being a parent has shaped you? >> Yeah, it's a very big part of what is

350: perhaps shaped my world view. And for both my wife and I grew up together.

357: We went to the same schools. And we were the only children of our parents.

363: So when we were both in our late 20s, when our first son was about to be born, we were very excited.

369: The household was all about. My wife is an architect and she was practicing at the time.

375: And so my only concern was when will I go back to school, or would I go back to work.

381: And how are going to think about the babies, a day care and what a view. And lo and behold one night there was some complications and

391: our son Zain was born because of some complications, he now has cerebral palsy.

399: He's got gas quadriplegic and is locked in. And I would say for the first maybe as many as five years, I struggled with it.

410: Primarily, because I felt that all these plans that I had for

415: what our life was going to be like, had taken a real turn. And I watch AnuGo up and down five trading, Seattle.

425: Taking him to every therapy possible, speech, occupational. And then I was just watching it and still moaning, my own sort of whatever issues.

436: But then it dawned on me that nothing actually happened to me.

441: Something had happened to my son and that I needed to as a father step up and do my duty.

448: In other words, it is the harsh but real lesson around being able to see the world through the eyes of my son, right?

456: That's what empathy's all about. And I think that's what it is, I mean, it's innate in us all as humans.

463: I think empathy is something that we're all very capable of,

469: life teaches us that and in small ways, and in tough ways.

474: Like I remember even by the last interview when I was interviewing

480: at Microsoft was also My life changing moment for me. So I went through this interview.

486: It was all caught on screen at that time. And so, this guy sort of says hey, here's a question for you.

493: You're at the crossroads, a baby falls, and is crying, what will you do?

499: And I say, wow, this is some search algorithm I didn't learn. It must be some variant of some traveling salesman problem or something.

507: And I sort of really thought about it for a few minutes. And then I said I'll go to the phone booth and call 911.

513: This is pre-smartphone. And so, he gets up.

518: He escorts me out, and he says you know what, you need to develop some empathy.

524: Because when a baby falls, you pick them up and hug them first before you call.

530: And I thought that's it, I'm definitely not going to get this job. >> [LAUGH] >> And lo and behold, I did get the job.

538: But nevertheless, I mean, I really think that that's so core. And some people say well, what what does that have to do with sort of business?

545: Or what does it have to do with work? And I believe it has everything to do with work.

550: I believe if you sort of say innovation is all about meeting unmet unarticulated needs customers, where is that source of your ability

560: to get in touch with that unmet unarticulated need going to come from? It's going to come from your ability to in some sense

566: be able to listen between the lines, to be able to extrapolate.

572: And that's, to me, deep sense of empathy, right? So people talk about design thinking. I think design thinking is empathy.

578: And so therefore, I do believe that life teaches you empathy.

583: Empathy is the source to success in any innovative agenda you have. >> It's inspiring to hear you say that you think empathy is innate.

592: We're living in a world where sometimes it feels like empathy is on the decline. So I think your point around empathy is really well taken.

599: >> It's a great question, because in fact, it is such a big word, and it is hard.

605: In fact, even recently at Microsoft, we realized that it's important for us to even understand what are the necessary conditions to even develop empathy.

615: So one of the words we have put into our sort of parlance is respect.

621: For example, if you don't start from a place so having some respect for the other person's views, where they come from,

628: their complete history, it's really hard to develop empathy. So therefore, I think you're absolutely right to say before

636: you think about some of these higher level things, you have to sort of even question what are the basics that we need to get right.

643: >> Certainly, and that's become so core to your leadership at Microsoft. So if we turn now to Microsoft, before you were CEO,

649: you took this job leading Microsoft's first real Cloud business. And Steve Ballmer apparently told you this might be your last job at Microsoft

658: because if you fail, there's no parachute. That feels like a lot of pressure.

663: Why did you make that jump? >> [LAUGH] Steve, who went to school here, had many-

670: >> [LAUGH] >> He just went for one year, from what I understand. >> [LAUGH] >> This is the funniest thing I should

678: tell I guess the other guy who were to school here was Mukesh Ambani. So I believe one day, Steve Ballmer is introducing Mukesh in Bombay,

686: and he joked that both of us dropped out of GSB except that Mukesh had never told anybody that he had dropped out of GSB.

694: So there was a real scandal. >> [LAUGH] >> So Steve wanted

701: us to really take this new business area, which is our online business.

710: In fact, Susan, who is here, and I worked on it for a long time as well.

715: And he felt that look, this is a place where we needed to make progress. And Steve had this very clear sense of what it means to succeed.

724: And his point was you're going to go learn a lot. And of course, I'll fire you if you don't do a good job with it.

732: And it is sort of a way for him to perhaps communicate both why he,

738: as the CEO, cared about this business. And at the same time, his expectations.

744: But I must say, that particular tour of duty has been the most influential

750: in how I've sort of thought about whether it's distributed computing at its core,

756: whether it's the economic models that are going to be emergent.

761: And that has been very, very helpful. Doing different things inside the company has helped me grow to run the company

767: eventually. So I actually appreciate Steve both giving me that opportunity,

773: and more importantly giving me the message that look, at the end of the day, it's performance that matters.

782: >> Did you know at the time that that decision was putting you on a path to one day becoming the CEO? >> No way. >> [LAUGH] >> Most people ask me this,

789: which is like hey, did you have a sense that you'll become CEO? No.

796: First of all, none of us grew up even, to us, especially having grown up at Microsoft, I don't think I even thought of a Microsoft where Bill and

804: Steve were not actively engaged. I mean, it was just not even in the realm of possibility.

811: The thing, though, I would say, especially business school graduates that are an ambitious lot, and you're all sort of saying when am I going to be my CEO?

820: My only advice there would be it's like don't wait for your next job to do your best work.

827: That I think is the crux of it, which is if you think about every job you get, as the most important job and

835: as the thing that is perhaps your last job, but you gave it all. And of course, from there, a lot of things will happen.

843: And that's at least how I, it was not like the job that I had before becoming CEO I somehow thought well, it's just a stop on the way to something else.

851: I actually thought that was a fantastic job until I got the next job. >> And that next job was ultimately to become the CEO of Microsoft.

860: And when you took that job, you faced some high expectations. Microsoft is struggling.

866: You're following, as you mentioned, Bill Gates, Steve Ballmer, and many people thought that the CEO should come from outside.

873: So what did you draw on in that moment? >> Yeah, I mean, look, I'm a consummate insider.

881: I've grown up at Microsoft now, 28 years. And I also recognize, to your point,

889: that I was taking over from Steve and Bill. And Steve even though was not a founder, he had founder status in the company.

899: Bill and Steve built the company. Bill and Paul founded the company. And the one thing that perhaps I was more grounded having worked

909: with them is as a non-founder CEO, I needed to make explicit some

914: of the things that I think founder CEOs can take for granted. Because founder CEOs can carry just because of who they are and

923: what they mean to the organization, a lot. And telegraph that very broadly and have followership.

929: Whereas I describe myself as a mere mortal CEO. I felt I needed that sense of purpose to be deeply rekindled.

938: It's something that I re-enforced. And culture. Both sort of these two pillars of sense of purpose and

945: culture needed to become much more explicit. For example, when I joined Microsoft in '92,

951: we used to talk about our mission as putting a PC in every home and every desk.

956: It was pretty inspiring, right? I mean, you could even do an Excel spreadsheet. P times Q. It is easy to compute.

963: And And except by the late 90s, we had more or less achieved that at least in the developed world.

970: And since then, we had the struggle of what's next. And I felt like I needed to sort of go back, in fact,

977: to the very origin of the company, right? I mean, Microsoft got started when we built up,

983: Paul and Bill, built the BASIC interpreter for the Altair. And I believe that everything that needs to be known about Microsoft in

992: 2019 can be traced back to our origin, which is rebuild technology so that others can build more technology.

999: Right, I felt like we were doing things out of envy and others. We needed to get back to what our core identity is, right?

1007: Especially in 2019 where every company is a software company around the world. We can just basically be a software platform and tools provider and

1015: have a good business. And so I felt let's be proud of who we are. Of course, we got to express it differently, and

1023: then really reinforce that. That's why we talk about our mission around empowering people and organizations.

1029: The other piece, though, is we had to work on our culture. I distinctly remember, I guess it was 98 when we first

1038: became the largest market cap company in the world. And many of us were lucky enough to participate on that wave of growth.

1049: But I remember that day when you we walked around, you could see in campus, people thought wow, we must be God's gifts to mankind.

1056: >> [LAUGH] >> Right, we're so smart, we're so good, look at us, and except that was not the case.

1063: I mean, the case was it's a temporal thing. And what matters is your ability to learn, grow,

1072: be grounded in the realities and customers and what have you. And so that's why I wanted a culture that stood for that learning organization.

1082: And in fact, my wife had introduced me to a book by a Stanford professor

1087: Carol Dweck, which I'd read Mindset many years before I became CEO.

1093: It was a huge influence in our household as it relates to our own children's education.

1099: But quite frankly, it was a great education for me. Because when I read that book I realized that notion

1105: of growth mindset applies to individuals like me. It applies to companies like Microsoft. So we took that meme of growth mindset and said, look, let's not be know-it-alls,

1114: let's be learn-it-alls. And it's been a very helpful part of I would say our

1120: journey around this what is a cultural meme that we can even make first class that we can have a real dialogue on.

1128: >> Absolutely, and you talk a lot about this cultural shift. In looking back at that over the last five years,

1134: what was the most difficult part to change? Because you instilled growth mindset, you did all of these things.

1139: But what were the hardest roadblocks? >> I think it's always, it's a challenge.

1144: It's one thing to say growth mindset. Because sometimes people will come to me and say that Microsoft, Satya, we found the ten people who don't have a growth mindset.

1152: >> [LAUGH] >> The point about that it's not about going looking for ten people.

1157: It's about me being comfortable with confronting my own fixed mindset each day.

1163: And that's the hard part of it. When you say you're a learning organization and you say, yep, we've learnt the that.

1168: Here are the ten people who have not learnt. Then that's a problem. And I think that that's the reality of it, right?

1176: How do you bring about long-term change? And I'll say one other thing. One of the reasons why I feel at least we have some momentum.

1186: I'm very careful not to sort of paint this as some destination we will reach or

1191: have reached for sure. It's going to be something that every day we're going to have to confront our fixed mindset.

1196: We're always going to be imperfect. There is going to be a gap between what is our espoused sort of culture

1205: and what is the lived experience. The question is are we working to bridge that gap?

1211: And it's very uncomfortable especially in business where everything is graded by how close to perfection are you?

1218: To say let's be imperfect and celebrate imperfection, it's just a hard thing. And that's why leadership at the top,

1225: setting the tone, walking the walk, I think is the hard part. But anyway, that's the the real,

1232: I would say challenge of being able to implement change at scale. >> Absolutely, and you want to set this culture of a growth mindset where people

1240: can take risks and make mistakes and learn from them. And you want to walk the walk.

1247: When have you had to lead by example on this front? >> Well, I mean, every day I would say but in some sense,

1254: the decision one makes in, for me,

1262: the ability to sort of, take even diversity and inclusion.

1270: Saying the words, saying we're going to make progress is one thing.

1276: And then to recognize that progress has to be something that really

1281: has to come from one's own first change in behavior, right?

1286: And take the everyday experience of the senior leadership team meeting itself.

1293: It's an interesting thing. Every time I question myself on everything that we talk about,

1299: as what we espouse that is more broadly applicable across the company. How much of it is represented in the behaviors,

1307: starting with me of our own senior leadership team? We have some very, very amazing women who are part of our leadership team.

1316: Are they participating like anybody else? And in fact, am I allowing for

1323: them to be able to really make sure that we are listening to them? They are able to feel like they're driving the company.

1331: And starting with that type of sensibility, which by the way, is not constant.

1336: But at least I'll be pushing. It's sort of the way I think I remind myself of how important to your boy.

1341: But it's sort of putting it in everyday practice. We have three things that are the cultural I would say pillars for us, right,

1350: one is diversity and inclusion. The other one is customer obsession. And then the other one is to bring the company together as one company as opposed

1359: to fragmented setup PnLs. All three of these are just super hard, easy to say, but

1366: require everyday practice starting with me. >> Certainly, and I think diversity and inclusion is an interesting one because

1373: it's a topic that can invoke a lot of defensiveness. So to apply a growth mindset to that area is particularly powerful.

1380: >> Yeah, for example, the thing that we have recognized is

1385: you have to put, I mean you have to do a lot of things here. For example, we even changed the compensation of our senior leaders

1391: starting, or even mine, to ensure that we take this as a huge priority.

1396: You could say, well, is the compensation change the real thing? I'm not saying it's the only thing that needs to change, but

1403: it's an important thing. I myself had probably perhaps not recognized that measuring things,

1410: having a real metric around it, and then compensating is a good sort of start on a lot of fronts.

1418: But the thing that we've come to realize is every intern class that joins Microsoft every year is more diverse than the previous one.

1427: But then they look around and say, well, where's that diversity in the company?

1433: And so that means, the real currency of a culture is inclusiveness.

1439: And that, I think is The core job of what leaders do,

1446: and what is the everyday experience of what happens at Microsoft.

1451: Interestingly enough, I've also come to recognize that first level manager,

1458: has probably the most influence on what happens. And so, I distinctly remember as a lead at Microsoft with five people working for

1468: me, who all were thinking, why is this guy leading us, right? I mean, it's always the case, because the first level job is the hardest job because

1476: there are five people who are also just recent graduates who are sort of looking at you and saying, I can do what you do.

1483: And then you have a boss who's asking you to do many things. And so it's sort of real pressure cooker, in the sense you sort of really have to

1491: do a lot, but that's when your attitude your nurturing of that five people who are working for you around inclusiveness, will matter a lot.

1500: So one of the things that we are doubling down is, are we truly supporting managers at all levels,

1508: to be able to sort of in fact support their team so that they can bring the best out of them, and then have them feel included as part of the company.

1518: >> So we've talked a lot about culture. Let's shift and talk a bit about strategy, and particularly the Cloud.

1524: Because today, we sort of take the Cloud for granted. But when you took over, it was still far from a short thing.

1529: And you made this bold bet, cementing Microsoft strategy in the Cloud.

1534: How did you rally all those around that vision, when many were convinced it wouldn't work? >> I mean, our challenge with the Cloud was very, very,

1544: very successful business in what was the client server error.

1550: And sort of you look at ADP&L that says, here's a new business. By the way, it's got gross margins that are sort of 1/4

1558: of this gross margins of the current business, and it will be good. It's hard to sort of look at those kind of transitions,

1567: because all rationality says that you should avoid it as much as possible.

1574: And except in tech in particular,in many other businesses, these transitions are secular, they're inevitable.

1581: And so the question is, how do you make that transition?

1586: And that's where I must say, Steve, when he was a CEO was the one who gave me permission.

1591: And the decision he made was, look, we want to go after this.

1597: And one of the things that I've realized as leaders, and many of you in your career are going to make this kinds of decisions.

1603: We're all about solving this over constrain problem, right? I mean, classic over constrain problem as we have a huge profit margin.

1611: And now you gotta go build a new business, that sort of replaces this business.

1617: And by the way, you should have the same gross profit margin. And guess what? It's not possible.

1623: So someone somewhere has to remove some constraint. Who does it? Leaders do it.

1629: So you remove the constraint ,called gross margin. He said go in this market.

1635: And that's what was then made it possible, for us to do all those things that have now gotten us to the other side.

1643: But to me, I've learned a lot from that. So in fact, if anything, I feel like as a leader, sometimes you

1648: get to speak from both sides of the mouth, which is I need growth and I need profit. In many cases, your job as leaders is to in fact unconstrained, take on the risk.

1658: In fact in the first multiple years, Amy Hood who's my CFO and

1664: myself we said look, let us take on the risk. And then actually metric a lot of our leaders,

1671: more on customer satisfaction usage versus profit, revenue even.

1678: And I think that that's sort of the type of decision making one needs, in order to make these harsh transitions.

1685: >> And when you look back and you look at all you've done on culture, and strategy, and making this ball bud, are you able to tell which one moved the needle more for Microsoft's renew.

1696: >> I fundamentally believe that strategies or markets will always be coming and going, there will be lots of changes.

1708: I'm a fundamental believer in that sense of purpose and culture as the two pillars that are necessary in order to

1718: get a lot of other things right. Of course, if you don't get your strategy right, or

1724: your ability to sort of right a particular wave of innovation. And especially in tech, it's pretty harsh, right?

1732: I mean, it's very hard to recover. But that said though, the question is what is it that will give you the best

1739: probability of even catching those. And to me that sends a purpose, which I think is reflection of what you're

1746: innately good at as an organization, right? It's competitive advantage, except it's codified in that identity.

1754: And culture is what allows you to express that identity with new opportunity.

1762: >> I think many of us in this room want to use our careers to create impact at scale, and you have committed almost 30 years to Microsoft,

1769: which seems unfathomable to many of us. How do you think about- >> Flies by.

1775: [LAUGH] >> How do you think about entrepreneurship, and this idea for those among us who maybe want to work in large

1784: organizations to create change in the world, what advice would you have? >> Yeah, I mean look, I mean I think that all organizations,

1792: small or large, all have amazing opportunities. But I'll make the case for a large organization,

1800: and especially an organization like Microsoft. I mean think about it, if you want to have an impact at scale, in fact one of the reasons, there are two things.

1809: When I'm going to recruit at a college, I'm always telling people, like hey look, if you want to be cool, go join somebody else, but

1814: if you want to make others cool join Microsoft. And I say that because I believe that

1820: which other organization will be able to have in 190 plus countries, the impact on small business productivity, public sector efficiency,

1829: multinationals in any part of the world and their competitiveness globally. Health outcomes, education outcomes.

1834: This is scale at enormous rate. And so therefore if you want, join a company like this, but

1843: then you have to have the following, I'd say sensibility.

1848: Guess what, you've gotta work with others. [LAUGH] In other words, that's I think a key important skill.

1853: Like, what does it mean? I mean, you do a lot of that, many of you have got a lot of work experience even before coming to business school.

1859: But fundamentally, to do anything useful, and big, and upscale, it's all about teams.

1866: Teams inside or teams outside. That's what it takes. And the second thing that you also need, is to realize

1875: that a lot of people talk about the matrix and the complexity of large organizations.

1880: That's again the case. I mean even for small companies, you just have a different type of matrix. You'll have a VC.

1885: You'll have a board. You'll have a customers. So it's you're never going to escape working with people.

1892: You're never going to escape bringing multiple constituents together.

1897: And I think that you should pick whether whatever size of organization recognize that scale only comes, because you bring able to bring many constituents together.

1908: >> You say that we can never escape working with people, which brings me to my next section on AI.

1913: >> [LAUGH] >> You are a big component of AI, and you.

1920: Believe that AI will be good for humankind and you argue that in an AI future, human traits like empathy and creativity will be more important than ever.

1929: And yet in some ways, technology has made us less connected. So how do you see AI augmenting humanity rather than detracting from it?

1938: >> Look, first of all I'm excited I'm going to spend sometime with your own work around this. Human centered AI and the work you're doing there, I think it's so important.

1948: Here is how I come at it. First, before we get into some of the unintended consequences of AI.

1956: One of the areas that I am deeply involved in, is accessibility, right?

1962: Think about what AI has done to people who need the most help, right? Say if you have,ALS now with Eyegaze, you can type and communicate.

1973: If you have visual impairment of any sorts,

1979: you can interpret the world by using the latest in computer vision. If you have dyslexia be using some machine reading and

1986: comprehension techniques you can start teaching a middle school kid how to read,

1992: because reading then leads to their participation in our economy. So I would first say, so AI and say AI capabilities are helping more of us

2001: participate fully in our societies and in our economies. That doesn't mean we shouldn't be clear-eyed about the consequences of

2009: AI, right? If the first one is what are the ethics of AI. We as in fact, creators of these platforms and

2017: tools have to even before we even get to sort of the big topic of ethics, improve the state of the art of the software engineering around AI.

2026: So that things like bias and so on are being dealt with.

2031: There's this fantastic line I love of Real Case, which is he talks about how

2037: the future enters in you and transforms itself in you before it becomes real.

2043: So we are creating AI, it's humans who are creating AI, so we get to shape,

2050: what the craft of creation of AI looks like, how we design systems where the human is in we get to decide that as a society.

2060: What we are comfortable with and what we are not comfortable with. So I don't want to abdicate all of that and

2067: feel like this is just going to happen outside of our control. So that's at least how I think about it and also in the employment side,

2076: I do believe that for example, this. Is it zero sum?

2083: I don't think that is the case. I think that there will be more jobs. The question is, how do we really use, in fact, all of the sort of levers we have,

2093: economic and social, to skill people for the jobs that are going to be there? And many of those skills might be different types of skills than

2100: the ones that are valued today. For example, there's no reason why our society can't have wage support for

2106: teachers. And in a different way, in a world where there's a lot of abundance of

2112: AI doing a lot of other things for us, or artists, or what have you. So therefore, I think we will come up with mechanisms.

2120: And I hope that we have, and in fact, more than hope. I feel that we shouldn't abdicate our responsibility to control our own

2130: future that I think we all want to live in. >> And given Microsoft's vision to democratize AI,

2136: there are concerns about what might happen if those tools get into the wrong hands. And you've just mentioned not to abdicate that sort of responsibilities.

2145: So how do you think about who to partner with in light of those concerns? >> Right, there's multiple things.

2150: So, one is what is it that we ourselves will do to, in some sense,

2156: have some core principles that define what we do and then who we work with.

2163: Take facial recognition that's quickly becoming the topic which I think is going to even have regulatory frameworks around it.

2169: In the State of Washington, we participated even in creation of that regulation.

2175: So I think that first before even the regulation is in place, we have

2180: guidelines on what we think is the right use because the maturity of the models really make it only sensible to use it in certain use cases and not in others.

2190: And being clear about it and then ensuring that that's what we do, and then working

2195: knowing that there will be like there's food safety there should be AI safety. There will be regulation and we should be okay with it.

2204: In fact even if anything our practices, in our data of what's good, what's not. What's the state of technology should inform that regulation.

2212: >> So you bring up the topic of regulation. And today it seems that relationships between regulators and

2218: many large tech companies are fraught. In its early days, Microsoft may have fought its own battles but

2224: today Microsoft is leading with openness. And so what's your advice for aspiring tech leader here on balancing

2231: that pressure to grow as a company with your responsibility to society? >> That's an interesting question.

2239: Here's what I have at least learned. In fact, Brad Smith who is another colleague of mine who recently wrote

2246: a book called Tools And Weapons. He reflects because he was very much part, he worked for Bill.

2252: He worked with Steve and now he works with me, very much part of our own struggle.

2258: I would say the one thing that we, at least I took away from that time is,

2263: when there is, I'd say a lot of criticism of whatever it is that you're doing,

2269: I think that it's appropriate for us to look in the mirror and perhaps learn about what it is that we're being criticized about.

2280: And perhaps there are changes that we need to actually bring about. So I would say scrutiny of large organizations is absolutely something that

2288: is going to only happen, and I think large organizations should welcome it.

2293: And we all can learn from it. And the core though, especially in technology business, we

2304: collectively as an industry have to just mature and mature at a very fast rate.

2309: Because the impact of digital technology in our lives and in our society is so

2314: deep now, that for us to assume that we're just going to have unfettered

2319: access to all parts without

2325: thinking about the unintended consequences of this technology are long gone.

2330: And so therefore, for us as an industry, for us as a company, to both recognize the opportunity of these technologies and

2338: the responsibilities, whether it's in security, whether it's in privacy, whether it's in AI and ethics, I think is going to be central.

2345: And these are not going to be terms of competition, even. I think this is where the industriate at scale, has to get a lot better.

2355: And I think that that moment is upon us, and I do see positive change.

2360: But it is definitely a time for self-reflection and change.

2368: >> So I want to circle back to your own leadership style and values. And what strikes me is that you seem to combine this sense of self and

2377: ability to stay true to your leadership style. You even have a story of Steve Ballmer telling you it's too late to be different.

2384: With, on the other hand, this real belief in a growth mindset. And I think for

2389: many of us that the GSB there's this question of how do you stay true to your own style while still knowing when and how to grow in the right direction.

2397: And so how do you think about those two things? Yeah, I mean,

2406: I think the ability,

2414: To understand yourself is actually, it's a lifetime's journey, right?

2422: It's a journey of your lifetime to really unpack who you are, and what you are good at, what makes you tick, what are your passions.

2431: It's something that, what makes you happy, the question that my mother asked me all the time and in fact,

2439: the older I get, the clearer I am in understanding even what she was asking.

2445: And then to be able to understand others, that's also another journey of a lifetime, right?

2453: Which is you sort of feel like you understand what others are saying. You understand where they're coming from.

2460: I think that's really what is going to perhaps help you.

2465: With both be true to yourself, your identity, what makes you tick,

2470: what makes you happy, while knowing that ultimately I think a lot of

2475: that satisfaction you get is because of your ability to empathize.

2480: The ability, it could be your family, it could be your work place. That's the other thing that I have come

2486: to realize is we can be transactional at work. I'll tell you there was this gentleman, another GSB grad whom I work for,

2493: Doug Bergam, who i s actually the governor of North Dakota nowadays.

2498: But there was this time in my mid 30s, he said something to me which just had a profound impact.

2506: He said, look, you're going to work at Microsoft more time than you are going to even going to spend with your kids.

2516: And I said wow, that sounds pretty harsh. [LAUGH] And yet it is true.

2523: And his main point was you better think about work having deeper meaning than being transactional.

2531: And as I've thought about that, the only way it's not going to be transactional is when you relate to people you work with.

2539: And that's what you'll remember, the projects you worked on. The technologies will all be passe in time but

2546: the people what you did, how you behave, what was your, I take great pride in these people whom I've mentored or go on to do great things.

2556: That's the relationship that I think you seek out a while being true to yourself and what makes you happy.

2564: >> And you mentioned humility earlier and how important it is to you. And you have this quote that says,

2569: when everyone is celebrating you is when you should be most sacred. And I think it's safe to say that, people are celebrating Microsoft's renewal.

2577: So how do you keep yourself and your teams grounded among the success? >> That's a great question.

2584: There's this book I recently read by David Brooks called The Second Mountain.

2591: It was an interesting book because he talks about it mostly in the context of us.

2596: There's that first mountain which is what perhaps many of you as graduates of GSB are going to be on and you're going to seek excellence and

2606: success in the professional career. And then you're eventually going to get to that second mountain and then you're

2615: going to sort of, in his words, relate to the world and community and what have you.

2620: And I feel that that's really what's there for Microsoft. The way having gotten to whatever high market cap in 98,

2630: now for us it's more not our market cap but what is our market cap leading to?

2638: To your point, if you celebrate our success but fundamentally

2643: realize if you sort of go back to our mission and our business model, right?

2649: It's not even a sense of mission and purpose that somehow abstracted away from what's core driving our business model.

2657: We need to see success all around us, that's it. And so, if we celebrate that small business in Kenya or

2666: that large multinational in Sweden or that public sector company in Indonesia or Vietnam.

2674: That's what's going to help us be grounded and be successful.

2681: And so that invoking of that everyday sense of purpose is what I think is going to help us the most.

2688: >> Thank you Satya and I think on that note we will turn it over to some questions from the audience.

2694: >> Okay. >> Is this thing on? Hi, my name is Tara Carrad Pear and I am a first year MBA student.

2701: And I'm asking this question in conjuction with my classmate Jeff Krueger who unfortunately couldn't be here but we're both interested.

2708: You've mentioned that at Microsoft you've made a principal decision that you're not going to withhold technologies from institutions that have been elected

2716: in democracies to protect the freedoms we enjoy. This position, as you probably know stands in contrast to a number of your peer tech

2722: companies here in the valley. Can you elaborate on your decision framework as CEO to have

2728: Microsoft Pursue US Department of Defense contracts like the Jedi Cloud Project at DOD?

2733: >> Yeah, I mean, first of all, one of the things that we're engaged in is with deep respect for

2742: all opinions that people may have on things that we should be concerned about.

2750: But on this one, we've been very clear from day one on the statement you read out which is I feel that I have great belief in democratic institutions and

2760: our democratic process. And one of my big fears is that, somehow CEOs or corporations try and

2767: substitute for what I think in the long run is the most important thing for

2774: us, which is our democracy to work as designed.

2779: And in this case, if we don't like what our government does, we have this one great opportunity which is we get to change, we get to vote.

2788: We get to even take principle stands against our government if we do think that that is something that we want to fight for.

2796: In fact, Microsoft, whether it's in the previous administration or in this administration, we've had cases.

2802: It was the Warren case around privacy is something that we were able to go fight.

2809: And then ultimately, through the Cloud Act bring about change. Which was a bipartisan legislation, which I feel is a good step in the direction

2820: of having privacy enshrined in a legislative sort of set of processes.

2826: So that's how I look at it. I don't see how withholding technology from I said the institutions

2832: that we have elected that are subject to civilian control ultimately to protect the freedom we enjoy is going to help.

2841: That doesn't mean we shouldn't have ethical principles, we shouldn't advocate for ethical principles.

2846: And in fact these institutions that we're talking about have perhaps more of a history around these ethical principles as well.

2853: And so for us to rely on that and reinforce that I think would be important. >> Hi am Kashaan,

2860: I'm from. I'm a second year MBA student.

2865: >> Good city. >> [LAUGH] >> It's a great city. So my question is today if you were a 22 year old engineering graduate from India,

2873: would you stay back in India and work in the tech and startup ecosystem or would you come to the US and why?

2878: And if you come to the US how can We all think of contributing back to our home country.

2883: >> Yeah, no, yeah. It's an interesting one. I really literally growing up, never thought I'll ever go outside of Hydro but

2892: I had very, I would say very self satisfying sort of goals in life. I wanted to play cricket and work for a bank.

2900: And. [LAUGHTER] and things changed. Look, I feel that the opportunity,

2910: whether it is in India or rest of Asia or Africa. We just created two development centers in Africa, both on the west and

2921: east side coasts of Africa, there is great opportunity.

2926: There's great talent. I think digital technology in particular is a real democratizing force.

2933: We were talking even back stage about how even when the rest of the infrastructures challenged, there's very novel ways for

2943: digital technology to overcome some of those things, because of the most malleable nature of software in some sense.

2951: So, therefore, I think there's opportunity everywhere in the world. But, at the same time, for you to come here,

2959: learn from, ;earning a place like the GSB and being inspired and

2964: go back is an opportunity, I would take if that came about, but

2970: at the same time, it doesn't mean that's the only opportunity I had to have impact.

2976: It's interesting you bring up because globalization, let's face it is going through a little bit of a challenging phase.

2984: And I think that its deserved in some sense because the globalization

2990: was celebrated to a point where the inequities that were getting you know founded I guess.

2998: inequities that developed in local communities were not addressed. Whatever happens in this next phase of globalization will not only, in fact help,

3008: that grand convergence of opportunity all over the world, which was, by the way, a very good thing in that first phase of globalization, but also address the local

3018: inequities, whether it's in India or in in Palo Alto. I think that that's what I think is needed whereas there is real innovation that

3028: brings equitable growth everywhere is perhaps the opportunity for GSB grads in 2019.

3037: Hello. Hi, I'm Casey MBA too. I also worked at Microsoft before I came here.

3043: I think I might be the only one .NET team. Let's go. >> It's great. >> [LAUGH] >> I was just wondering in your rise to

3052: the top, what was the biggest adjustment you made to your leadership style? As you move up in the company.

3060: >> You know, It's interesting, I must say there's many, many dimensions.

3067: Perhaps the biggest adjustment was that ability to grapple with what is it that uniquely only you can do, versus what

3076: others in the team can do getting much better at it was the most helpful.

3082: But the CEO job when I look back at it and many of you, who may,

3088: start out in, and become even CEOs much earlier on in your career,

3094: I had not understood perhaps even growing up at Microsoft how multi constituent

3099: the job is right I mean that's perhaps the biggest adjustment i've had to make.

3104: Is recognizing, it's about customers, it's about partners, it's about all your employees, it's about your investors, it's about governments,

3112: it's about many, many, many of these constituents. And by the way, it's not about, it's not like office hours for each one of them.

3120: >> [LAUGH] >> It is about all of them, all. All the time. And how to think about that multi-constituent world I think

3130: is perhaps the biggest adjustment that one makes as you grow in any organization.

3136: And the faster you grapple with it, the better off you will be, and your organization will be.

3144: So we'll now turn it back to our traditional lightning round and, [LAUGH] Don't be scared.

3149: [LAUGH] We're changing it up a little bit, this time I'm going to

3155: ask you to complete afew sentences for me so, I feel most energized when?

3160: >> I see someone very excited about the impact of what they're doing.

3170: >> What keeps me up at night is? >> What wakes up in the morning. >> [LAUGH] >> Good dodge there.

3180: I am most grateful for?

3191: >> The sense of the love, the affection of people that

3196: I've had the good fortune, whether it's my family,

3202: whether it's the people I've come across at work,

3207: the organizations that I'm involved in.

3213: It's it's just such a blessing when I look back, that's the thing that sort of really, I'm most thankful for the people in my life in all spheres of it.

3223: >> The most important piece of advice I could leave this audience with is? >> Is the piece of advice that Steve Ballmer gave me when I became CEO,

3231: be bold and be right. >> [LAUGH] >> Which is if you're not bold you're

3237: not going to do much of anything. And if you're not right you won't be there. [LAUGH] >> [LAUGH] Sacha thank you so

3245: much it's been a real pleasure.

3251: >> Thank you so much. Thank you. >> [APPLAUSE] [MUSIC]