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Mindset, Success, and Serendipity

March 1st, 2022

Success in business – and to make it simple I’ll define that as achieving a significant improvement in profitability and business value – often comes bundled with a big serving of luck. Of course, you may say luck is where preparation and opportunity intersect, and one definition I particularly like is luck is putting yourself in the way of serendipity. But at the end of the day luck takes many different forms, for example a roulette win is pure luck because it’s a game of chance. On the other hand if you win at poker it’s due in large measure to your skill relative to that of your opponent(s). There is also luck in the game of business but it’s more complex and is the result of preparation, opportunity, and serendipity.

Here’s an example of what I’m talking about.

On January 13 2000, Steve Balmer became the CEO of Microsoft. At the time the company had a market cap of $400 billion.  It enjoyed a dominant share of the principal markets in which it competed and had a huge talent pool that would have had the technical skill to “create the Kindle, the iPod, iPhone, and iPad along with search-based advertising” as Anthony, Cobban, Painchaud, & Parker noted in their book Eat, Sleep, Innovate: How to Make Creativity an Everyday habit Inside Your Organization.

But on Balmer’s watch it didn’t do any of these things, in fact by 2010 the market capitalization had fallen to $233 billion (partly due to the GFC). Fast forward to February 4, 2014 Balmer is replaced by an unknown Satya Nadella and in the 8 years under Nadella’s watch the value of Microsoft had increased to $2.21 trillion.

There’s a lot of luck here. For example, Balmer (as well as Bill Gates) and others were lucky because the value of their considerable shareholding increased nearly 10 times after he exited. And Nadella was also lucky because he inherited an organization full of talent and an evolving technology space that was conducive to the core competencies that Microsoft had accumulated over the years not to mention its immense user base.

However, Nadella was also lucky because he was the right person (very smart – nature & nurture), in the right place (heading up a strong division at Microsoft) at the right time (2014-.) This reflects the choices he had made in the past in relation to career moves, together with the acquisition of skill and varied experience, and his development as a leader through observation, practice, mentors, and coaches would all have played a role in him being able to capitalize on his luck. It’s worth noting that people who are actively engaged in exploring and trying new experiences, and who see learning as a life-long activity seem to end up at the right place and the right time, all the time. His book, Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone is a great read by the way.

And here’s another little twist on the role serendipity can play.

Nadella and his wife have a son, Zain, who was born in 1996 with a severe disability caused by asphyxia in utero. This would be a challenge for anyone and in order to help them both cope, she gave Satya a copy of Carol Dweck’s book Mindset: The New Psychology of Success, How We Can Learn to Fulfill our Potential. Dweck introduced the idea that people tend to have either a fixed mindset or a growth mindset and demonstrable success tends to be associated with the growth version which, she argues, can be nurtured and developed – I did a webinar on this several years ago. If you’re interested you should read her book (it could change your life and it should certainly improve the way you lead – see in particular Chapters 1-3 & 5) or if you’re not a reader at least check out her TED talk https://bit.ly/3oLON8u

After reading Dweck’s book Nadella realized that to turn Microsoft around, the company as a whole needed to develop a growth mindset. Specifically, it needed to alter its self-perception from being a “know-it-all” company to a “learn-it-all” company. He believed a growth mindset was the key to developing a culture of success through learning and describes himself as the “curator of [Microsoft’s] culture.” At the end of the day, that’s a pretty good summary of the primary responsibility of a CEO.

So what’s the lucky twist in this?

It’s that Satya’s wife, Anu, gave him the book to help them both deal with a very difficult personal challenge. I assume (and hope) that it helped them in that respect. But it turns out it also played a very important part in the strategy he formulated and put in place that, amongst other decisions he made, has added $2 trillion to Microsoft’s value. Had he not heard about Dweck’s work this crucial element of his strategy may have been missing and Microsoft might be somewhere else today. And given success leaves clues (a famous Jim Rohn observation), let me add, if you choose to ignore this idea your own business might miss out of achieving its full potential.

Of course there’s more to it than luck but the purpose of strategy is to give an organization a better chance of succeeding than relying on hope alone. If you accept Peter Drucker’s view that “culture eats strategy for breakfast” and in my view that’s reflected by Nadella’s embrace of Dweck’s growth mindset thesis, then Anu’s gift was a stroke of luck for Satya and Microsoft shareholders.

Is this another example of serendipity?

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