Understanding Authentic Leadership Style: The Satya Nadella Microsoft Approach ()
1. Introduction
The scenario of corporate crises due to rising frauds and scams worldwide has created stress among stakeholders. Stress can immensely damage the trust, the culture can even refrain an employee from discovering its potential creativity. These circumstances enable stakeholders to prefer leaders with higher integrity. In this context, leadership plays an important role in encouraging creativity and innovation among followers (Oke, Munshi, & Walumbwa, 2009). In this context, authentic leadership has gained widespread attention in organizations. Thus, by developing the culture of authentic leadership an enhanced creative workforce can be expected in the organization (Chaudhary & Panda, 2018).
Leaders who present their true selves and lead others are known as authentic leaders. Authentic Leadership proposed by Walumbwa, Avolio, Gardner, Wernsing and Peterson (2008) is leadership behavior pattern that includes self-awareness, internalized moral perspective, relational transparency and balanced processing (Gardner & Carlson, 2015; Miao, Humphrey, & Qian, 2018). Millennials now make up the largest generation in the workforce. They are better educated, more tech-savvy, and have higher expectations than any other group prior. Millennial Employee Engagement Study conducted by Cone Communications found that three-fourth millennials are willing to accept a pay cut if they are working for a socially responsible company. Besides, Generation Z members, the newbie on the work front, values diversity when selecting a place to work. In a Forbes article, Karl Moore (Professor at McGill University) points out: The better you are at being an authentic leader, the more your millennial employees will appreciate you. He adds that millennials can detect a drop of inauthenticity in an Olympic-sized pool like our Caribbean reef shark friends. The actual driving force for Microsoft’s growth and enormous profits in recent time is by endeavoring a handful of courageous authentic decisions under the Leadership of Satya Nadella. Microsoft’s ranking is experiencing upside down for the last six years (Table 1). The magnifying glass on revenue and assets will help to identify the actual position more precisely (Table 1). Microsoft is experiencing stable growth after the change of leadership i.e., after 2014, when Nadella became the Chief Executive Officer (CEO).
Nadella took over from Steve Ballmer in 2014 and adopted a new vision and leadership style for Microsoft’s unique journey. This paper examines the relationship between the leadership style of Nadella and his vision which supports the importance of precise balance between supportive leadership and innovative organizational culture for achieving the goal of high organizational performance. This study discusses the managerial implication for highly competitive Information and Technology (IT) organizations worldwide. The study examines the role of a leader in transforming a stagnant organization such as Microsoft under Balmer before 2014 (Table 2) into a high technological innovator accelerating up the scoreboard in Fortune 500 ranking. Nadella has acquired the dominant position in both “Fortune’s Businessperson of the Year 2019” and “Best CEOs for Diversity 2020”.
![]()
(Source: https://fortune.com/company/microsoft/fortune500/)
Table 1. Microsoft’s Ranking in Fortune 500 (2019) under Nadella’s leadership.
![]()
(https://fortune.com/fortune500/2012/microsoft-corporation/)
Table 2. Microsoft’s ranking in fortune 500 under Balmer’s leadership.
Nadella took the challenging job as CEO of Microsoft in 2014 when Microsoft was not at its best position. In 2014, Nadella joined as Chief Executive Officer who helped Microsoft to extricate and faced three major challenges mentioned below:
· Crashed stock prices of Microsoft;
· Competitors (Apple and Google) making super-profits;
· Introducing new mobile technology.
Microsoft is the fourth, world’s highest valuable organization and has increased its value by $250 billion (Fox, 2019) under Nadella’s leadership, which makes it is the essence of this study. The paper endeavors to analyze authentic dimensions of Leadership with
Nadella’s visionary leadership and his aggressive strategy was leading to an increase in Microsoft’s profitability. It also discusses the latent dimensions for becoming a successful authentic leader that are highly recommended for leaders to boost their leadership skills and increase organization’s profitability in this competitive world.
2. Literature Review
According to Walumbwa, Avolio, Gardner, Wernsing and Peterson (2008), authentic leadership (AL) is defined as “a pattern of leader behavior that draws upon and promotes both positive psychological capacities and a positive ethical climate, to foster greater self-awareness, an internalized moral perspective, balanced processing of information, and relational transparency on the part of leaders working with followers, fostering positive self-development”. Self-awareness refers to the degree of awareness of one’s strengths and weaknesses and their impact on other people. Internalized moral perspective signifies the importance of how one’s values and moral standards regulate their behaviors and actions. Relational transparency relates to the degree to which how one shares information and display emotions openly. Balanced processing depicts the extent to which a leader uses the available information before arriving at a decision (Chaudhary & Panda, 2018). These dimensions increase the level of balanced information treatment, transparency and relational work between a leader and his followers, in the way that positive self-development of followers is promoted (Semedo, Coelho, & Ribeiro, 2017). The dimensions of being self-aware and relationally transparent and balanced processing of information help authentic leaders to encourage trust and positive interpersonal relationships among their followers (Avolio, Gardner, Walumbwa, Luthans, & May, 2004; Walumbwa, Luthans, Avey, & Oke, 2011).
Authentic Leadership maximize the performance of followers and leads to positive work-related outcomes (Ribeiro, Gomes, & Kurian, 2018b; Azanza, Gorgievski, Moriano, & Molero 2018; Imam, Naqvi, Naqvi, & Chambel, 2020). Authentic leader transparency in his decisions develops follower’s commitment and builds strong attachments to the organization (Rukh, Shahrukh, & Iqbal, 2018; Hlongwane & Olivier, 2017). Empirical studies suggested that Authentic leadership is positively related to numerous necessary outcomes, for example, job satisfaction, Performance and creativity (Gardner, Cogliser, Davis, & Dickens, 2011; Ribeiro, Duarte, & Filipe, 2018a; Ribeiro, Duarte, Filipe, & Torres de Oliveira, 2020).
Authentic leaders help promote a work environment wherein creativity is fostered and encouraged by involving specific actions guided by beliefs, values, and words, thereby contributing to a truthful and open relationship with their followers (Ilies, Morgeson, & Nahrgang, 2005; Rego, Vitória, Magalhães, Ribeiro, & Cunha, 2013). It has been suggested that authentic leaders positively influence employees’ creativity (Avolio et al., 2004; Gardner, Avolio, Luthans, May, & Walumbwa, 2005; Rego, Sousa, Marques, & e Cunha, 2012, 2014; Rashid, Islam, Asif & Ahmer, 2019). When close relationships between authentic leaders and employees are established then employees feel free to try new ideas. Research also shows that increasing employees’ perceiving psychological safety and inherent motivation provides a fearless climate of working with new ideas (Cerne, Jaklic, & Škerlavaj, 2013; Rego et al., 2012, 2014).
Further, Cottrill, Lopez and Hoffman (2014) suggested that developing self-awareness, transparency, ethics, and processing multiple perspectives as authentic leadership skills, will benefit the organizations by enhancing employee inclusion, commitment, self-esteem and organizational functioning.
3. Research Methodology
3.1. Research Objectives
The objectives of the study are
Objective 1: To depict Nadella’s leadership journey at Microsoft through four dimensions of authentic leadership.
Objective 2: To examine the public sentiments of tweets regarding #SatyaNadella in NVivo.
3.2. Data Collection
The researcher searched in the Google Scholar, Microsoft Academia, Harvard Business Review (HBR), newspapers, and websites. The search words like “authentic leadership”, “Microsoft”, “creative leadership”, “innovation” and “Satya Nadella” were used to explore the literature. Initially 60 articles emerged which were further refined by following a trial search for each database by going through the abstract and full paper after that. A total of 29 research articles are obtained after removing duplicate and irrelevant articles. For Word Query analysis using Nvivo, only seven interviews of Nadella are obtained from https://www.businessinsider.in/ (2014), https://www.youtube.com (2015), https://www.theverge.com (2018), https://www.hbr.org (2017), https://www.wsj.com (2019), https://www.youtube.com (2019) and https://www.cncb.com (2020) to obtain word query analysis, treemap, cluster analysis. The interviews are available online either as audio or video which were transcribed into written form as a word document by researchers one by one. The researcher restricted searches for interviews for leadership of Nadella at Microsoft from 2014 until April 2020 for NVivo software analysis. The interviews are available online free of cost.
For sentiment analysis, #SatyaNadella tweets data is obtained using NCapture from Tweeter to analyze the public opinion towards Nadella on 3rd July 2020 in NVivo qualitative software. The tweets and retweets captured were 1531, but after removing irrelevant tweets from either unauthorized tweeter accounts or irrelevant tweets, the total count of tweets obtained was 1084. NVivo analytics aligned the characteristics and strategies of Nadella to the theory of authentic leadership to examine the relationship between the two using the 29 selected papers.
3.3. Data Analysis Procedure and Techniques
The interviews are available online either as audio or video which were transcribed into written form as a word document by researchers one by one. These seven interviews of Nadella from 2014-2020 were imported in QSR NVivo software. The nodes were classified as the four components of Authentic leadership theory mentioned above and references from each interview were taken into account to analyze the relationship between them. The word query tool was performed to analyzed using NVivo Qualitative analysis tool using the filter of a minimum of three words and stemmed approach (generalized) to obtain word cloud (Figure 1), treemap (Figure 2) and Cluster analysis (Figure 3).
To explore the personality of Nadella, tweets of #SatyaNadella were extracted using NCapture on July 3, 2020 to find the general popularity of his personality. These tweets were analyzed using “Autocode” approach in NVivo tool using the option “to identify sentiment” based on each and every sentence mentioned in the tweets and retweets. The sentiment analysis represented the positive, negative, neutral and mixed sentiments towards Nadella (Figure 4), the tweets captured across the globe (Figure 5) and the representation of tweets collected network as Sociogram.
4. Analysis and Discussion
4.1. Qualitative Analysis
4.1.1. Word Query of Nadella’s Interview Performed in NVivo Software
The seven interviews of Nadella from 2014-2020 were analyzed in NVivo using word frequency query tool with the filter of a minimum of three words and stemmed approach (generalized) to obtain word query analysis (Figure 1), tree map (Figure 2) and Cluster analysis (Figure 3). Figure 1 shows Nadella’s concern about technology bound Microsoft. The relevant words were found to be “Satya”, “Nadella”, “Microsoft”, “technology”, “leadership”, “innovation”, “employees” and “culture”. The greater the size of the word appears, the larger is the frequency of the word in word query analysis. It is interpreted from Figure 1 that Nadella focuses on the thinking part of how to inculcate change in his organization by innovating. To do so, he needed to change the leadership style and culture of Microsoft (Smale, 2019). This word query analysis displays Nadella’s personality and establishes the relevancy of the interviews selected depicting Nadella.
Figure 2 shows the TreeMap obtained from NVivo Analytical tool performed on interviews of Nadella depicting the three broad themes as “microsoft”, “think” and “thing”. It represents that Nadella mostly speaks about Microsoft and thinks about it. The other relevant words depicting his focus are “technology”, “create”, “product”, “people”, “learning”, “business”, “satya”, “nadella”, “ceo” and “microsoft”. The focus of Nadella is primarily on the need to create technology or products by developing a learning approach among people (employees in general) for a business. He motivates his employees to innovate and create new technology by continuous learning is depicted from treemap. His rank was 40 in the list of most powerful people 2018 by Forbes.
Figure 3 depicts the cluster analysis performed in NVivo Analytical tool using interviews of Nadella. The cluster analysis groups the words of one theme in one colour and other words of different themes into different colors. Here, the dark coloured theme is focusing on industry which is built on technology and culture. The change brought by Nadella in culture by focusing on building technology (Cloud-enabled AI) accelerated the revenues and transformed Microsoft (Table 1).
![]()
Figure 1. Word query analysis. (Exported from QRS NVivo Qualitative Software on January 2, 2021).
![]()
Figure 2. Tree map. (Exported from QRS NVivo Qualitative Software on January 2, 2021).
![]()
Figure 3. Cluster analysis. (Exported from QRS NVivo Qualitative Software on January 2, 2021).
4.1.2. The Sentiment Analysis of Tweets #SatyaNadella
In pandemic, Microsoft is the first organization to provide 3 months parental leave to their employees whose schools were shut down due to pandemic situation in the world in early 2020. Microsoft provided a free of cost interface for promoting team work by developing “Microsoft Teams”, which highlight its vision of embracing team work culture. Nadella is one of the leaders to help his employees in every possible circumstance observed from his initiatives. Moreover, over the past six years, Nadella has shown his leadership skills to embrace diverse culture and enhance Microsoft’s profitability after joining as CEO in 2014. Because of his constant efforts to encirclement diversity, he has topped the list of “Best CEOs for Diversity 2020” voted by employees of color and indigenous individuals, reported by Comparably.
During this pandemic where all the organizations face critic’s lens, the image of Nadella emerged to be positive by performing sentiment analysis using tweeter data (tweets obtained on June 3 2020 for #SatyaNadella). The majority of the tweets are neutral and positive out of total 1084 tweets and retweets (Appendix). Figure 6 shows that the neutral and positive tweets account for 78% of the tweets, and the mixed and negatives tweets account for a mere 11% and 12% respectively.
The tweets obtained were from across the globe but more than 90% were obtained from North America as shown in Map in Figure 4.
The Sociogram Twitter in Figure 5 depicts the network of tweets and retweets obtained using the NVivo analytical tool. The sociogram appears to be like a ball which specifies that the retweets on the tweets of #SatyaNadella were immensely spread like a web across the globe. Hence, the importance of examining Nadella’s leadership traits in one of the most successful IT giants “Microsoft” is of immense importance. The leaders can learn a lot from Nadella’s journey and personality as he is the first in the “Best CEOs for Diversity 2020” (Comparably, 2020).
![]()
Figure 4. World Map of tweets #SatyaNadella. (Exported from QRS NVivo Qualitative Software on January 2, 2021).
![]()
Figure 5. Sociogram Twitter of tweets #SatyaNadella. (Exported from QRS NVivo Qualitative Software on January 2 2021).
![]()
Figure 6. Sentiment analysis of Tweets #SatyaNadella. (Exported from QRS NVivo Qualitative Software on January 2, 2021).
4.2. Nadella’s Journey and Leadership
Nadella began his journey in Microsoft in 1992 as an engineer. He has evolved into a more productive and farsighted individual at Microsoft which is one reason behind his successful leadership style, he mentioned during his interview with BBC. He explores the organization by examining its existing culture, then introducing new values, norms, shared assumptions and vision for smooth adopting a new culture he wants to incorporate. The roles performed by Nadella are, 1) to recognize the need to revitalization, 2) creating new vision, 3) institutionalizing change. Studies provide evidence for the importance of the positive effect of authentic leadership style on creativity (Rego et al., 2012, Rego et al., 2014). Walumbwa et al. (2008) classified authentic leadership into four components, “1) Self-awareness, 2) Relational transparency, 3) Internalized moral perspective and 4) Balanced processing.” Comparing these characteristics with those of Nadella’s, it is evident that the leadership style adopted by him involved many hurdles and vilipend comments from critics. Nadella joined and announced himself as an ordinary individual who focuses more on collaboration, learning, stimulate intellectuality and creativity. His approach for expected culture was results-driven instead of aggressiveness and competitive culture during Ballmer’s days. Hence, Microsoft was on acceleration after Nadella joined as CEO. He had fulfilled the four characteristics of authentic leadership explained in Table 3.
After joining Microsoft in 2014, Nadella changed the leadership and culture by emphasizing embracing individual empowerment, positivity, empathy and growth of employees, according to article on Nadella’s Leadership style in Berrett Koehler Publishers (2019). Let’s bridge the gap between Nadella’s initiative as CEOs and authentic leadership traits (Table 3). Firstly, he is an empathetic
![]()
Table 3. Relationship between nadella’s leadership style and authentic leadership.
and inclusive leader who gives importance to diversity to generate new innovative ideas and motivate employees to develop new ideas by organizing brainstorming sessions. His influence on others and his high level of self-awareness undoubtedly makes him the “Best CEOs for Diversity 2020” (reported by Comparably) depicting his strength. Secondly, he was considered the most happening person and rated highest in his interpersonal skills by his fellow mates in Microsoft over the last five years showing his strong interpersonal skills. Also, he provided an opportunity to be heard with the help of strong communication channel conducting “ask me anything sessions” depicting his relational transparency characteristics. Thirdly, his verge of building a culture of trust around the concept of equitable growth with “inclusivity, trust and sustainability” shows his strong internalized moral perspective. Lastly, the balanced approach of Nadella is depicted by his supportive style and clear vision of being a partner led company, collaborating with rival firms to generate innovative ideas and positively communicating a sense of new hybrid system of work for transforming world. He empowered his employees to examine the market critically and develop innovative ideas and hence increase creativity. Therefore, Nadella is an authentic leader who has changed the Microsoft’s phase from status quo to accelerated rate and fulfils the four component of Authentic Leadership theory (Walumbwa et al., 2008).
The word query tool (word query, treemap and cluster analysis) depicts Nadella’s personality as Microsoft’s CEO and sentiment analysis of #SatyaNadella reports a majorly positive opinion of the tweets. The traits of Nadella are found to be linked with four components of authentic leadership. The challenges and approaches adopted by Nadella in Microsoft lays down benchmarks for other potential leaders present and to come in the future.
5. Implications
As a leader, Nadella promoted employee innovation and creativity that enhanced Microsoft’s performance. It has been suggested that creativity increases when fair decision making and analysing the character of leader increases (Oke et al., 2009). Nadella’s approach of “Never Say NO” and supportive style for empowerment has increased Microsoft’s ranking in terms of Revenue and Total Assets (Table 1). This style incidents that an integrated culture should be provided that can help followers to explain their own ideas and decisions that may develop creativity. This study suggests that authentic leadership style is very conducive to the creation of a good team atmosphere of psychological safety and trust which in turn facilitates employee willingness and creativity. It is also suggested that a leader promote an atmosphere of respect, admiration, participation, support, and involvement for his/her employees from diverse backgrounds to enhance the commitment and creativity. Nadella embraces diversity culture by putting the hands up for the campaign “Black Lives Matter” that has acknowledged him as the “Best CEOs for Diversity 2020” reported by Comparably (2020). So, the above-mentioned dimensions provide a base to Nadella’s visionary leadership, making it possible for Microsoft to become the world’s fourth most valuable company globally (Fox, 2019). The unique vision and farsightedness of Nadella, being an authentic leader and the journey of transformation of Microsoft has provided crucial lessons that can be learned by fellow IT giants such as Facebook, Google and Apple.
The findings of the analysis indicate some practical contributiosn from integrated Nadella-authentic leadership style that has developed a culture of innovation and creativity. First, leaders should give followers the choice of thinking and behaviour. Second, they should motivate and encourage trust for building positive interpersonal relationship that can promote creativity. Third, freedom and opportunity should be provided to followers to express their opinion and ideas. Fourth, a leader should promote integrity, honesty and discourage unethical behaviours that lead to positive climate and trust and therefore creativity. Fifth, develop an emotional attachment among followers towards their organisation. Sixth, he should focus on collaboration, learning, empowerment, positivity, empathy and growth of employees. Lastly, develop opportunity of voice to be heard and a good communication channel should be integrated to develop a culture of trust that can promote creativity. Hence, these suggestions can help leaders to polish and develop their leadership skills and organisation performance. These suggestions are applicable not only to IT giants but also to any other business in 21st century.
6. Conclusion
This study makes significant contributions by displaying how Nadella skills contribute to employee innovation through creativity. This study highlights relationship between Nadella’s skills and Authentic Leadership dimensions of self-awareness, relational transparency, balanced processing and an internalized moral perspective. These dimensions are quite important as they encourage employees’ positive attitudes and behaviours (i.e., affective commitment and creativity). In this study we have tried to analyze these dimensions with Nadella’s visionary leadership of authenticity. Identification of sentiments associated with #SatyaNadella is obtained using NCapture from Twiter. The tweets mainly were neutral and positive. The study also signifies that the traits of Nadella are linked with authentic leadership style with the help of his interviews and decisions taken by Nadella since 2014 (Table 3). The study further discusses the implications for the fellow competitor’s IT giants such as Apple, Facebook and Google to learn lessons from the “Transformation of Microsoft” for smooth cultural change and accelerating profits over the years (Sharma, 2020).
Websites
https://blogs.microsoft.com/blog/2020/06/23/addressing-racial-injustice/
https://news.microsoft.com/2020/06/30/microsoft-to-help-25-million-people-worldwide-acquire-new-digital-skills-needed-for-the-covid-19-economy/
https://www.businessinsider.in/tech/enterprise/news/presenting-satya-nadella-employed-a-growth-mindset-to-overhaul-microsofts-cutthroat-culture-and-turn-it-into-a-trillion-dollar-company-heres-how-he-did-it/articleshow/74528714.cms
https://www.cloudwars.co/microsoft/microsoft-hypergrowth-beyond-azure-q4-2020-earnings-call/
https://www.cnbc.com/2018/07/17/how-microsoft-has-evolved-under-satya-nadella.html
https://www.comparably.com/news/best-companies-for-diversity-2020/
https://www.crn.com/news/channel-programs/satya-nadella-s-5-biggest-statements-at-microsoft-inspire-2020
https://www.edition.cnn.com/2020/04/09/tech/microsoft-12-weeks-parental-leave/index.html
https://www.forbes.com/powerful-people/list/#tab:overall
https://www.forbes.com/powerful-people/list/#tab:youngest
https://www.fortune.com/fortune500/2019/microsoft/
https://www.fortuneindia.com/opinion/the-transformation-of-microsoft/104658
https://www.inc.com/jessica-stillman/the-3-characteristics-all-great-leaders-share-according-to-microsoft-ceo-satya-nadella.html
https://www.london.edu/lbsr/changemakers-satya-nadella
https://www.microsoft.com
https://www.microsoft.com/en-us/microsoft-365/blog/2016/11/02/introducing-microsoft-teams-the-chat-based-workspace-in-office-365/
https://news.microsoft.com/2018/03/29/satya-nadella-email-to-employees-embracing-our-future-intelligent-cloud-and-intelligent-edge
https://news.microsoft.com/en-in/microsoft-forecasts-hybrid-new-normal-of-work-in-india/
https://news.microsoft.com/skills/
https://www.qz.com/work/1539071/how-microsoft-ceo-satya-nadella-rebuilt-the-company-culture/
https://www.reuters.com
https://www.technologyrecord.com/magazine/the-record/summer-2020