Is Microsoft Changing Its Stripes For Good?
New President Brad Smith on a Renewed Mission, a Major Culture Shift, and the Role of a Corporation in Society
This week’s column introduces the Shift Dialogs, NewCo’s new video series featuring in-depth conversations with the leaders driving significant change across business, culture, and society. Our first episode features Brad Smith, President and Chief Legal Officer of Microsoft. We’ve also released the second episode, featuring Max Ventilla, founder and CEO of AltSchool.
Back in 1993, when an early thirty-something lawyer named Brad Smith joined Microsoft, his new employer was a fearsome amalgam of every badass tech company on the planet today. It had the ubiquitous reach of Google, the scary omnipotence of Facebook, the arrogant presumption of Apple, and the heartless calculation of Amazon. Its ruthless business practices were the subject of intense debate — was Microsoft too powerful? What could be done about it?
There was plenty for the new Associate General Counsel to do. His company was a magnet for legal trouble, locking horns with regulators and competitors around the globe. As the dot-com boom swelled in the late 1990s, Microsoft dominated the Internet with its Explorer web browser, and Wall Street crowned it the undisputed king of tech — in 1997, Microsoft’s market capitalization stood at more than seventy times that of its struggling rival Apple Computer.
In 1997, Microsoft’s market capitalization stood at more than seventy times that of its struggling rival Apple Computer.
But Smith and his company would soon face an existential test. In 1998 the US Department of Justice sued Microsoft for monopolistic business practices, and the company’s many critics (myself among them) chortled at the company’s comeuppance. The case dragged on for years, sapping the company of resources, swagger, and public support.
Throughout the company-defining case, Smith was a key counsel for Microsoft, staying on even as founding CEO Bill Gates, whose handling of the crisis was widely criticized, handed the reins to his lieutenant Steve Ballmer in 2000. In 2002 — the same year the company settled the historic lawsuit — Ballmer named Smith as Microsoft’s general counsel. Since then, Smith’s been known as an intelligent and approachable voice in the tech industry — “the face of the kinder, gentler, post-monopoly Microsoft,” as Fortune put it in 2007.
Ballmer yielded the CEO baton to the widely respected Satya Nadella in 2014, and the new leader lost no time declaring that Microsoft must change, dramatically. One year later, Nadella laid out a new mission statement for the venerable tech stalwart: “To enable people and businesses throughout the world to realize their full potential.”
The new Microsoft would tend toward the open, working with all platforms and all devices, its products and services spanning all of its former competitors’ offerings. The new Microsoft would be a “multi-stakeholder” company — one that was deeply engaged in the world, employing its resources and power in a considered, conversational manner. And to prove how serious he was about this shift, Nadella named Smith to a new position of President, with responsibility not only for legal affairs, but also external relations, government affairs, corporate philanthropy, and environmental sustainability. The move was a clear signal that Nadella understood Microsoft must raise its game as a corporate citizen.
The new Microsoft would tend toward the open, working with all platforms and all devices, its products and services spanning all of its former competitors’ offerings
After 23 years at the company, Brad Smith has become Microsoft’s second public face (Nadella is certainly the first). During our conversation for the Shift Dialogs, filmed at our partner the Nasdaq Entrepreneurial Center, Smith was open, engaged, and self deprecating. “No one ever died of humility,” he joked when I asked him about the change of heart at Microsoft. “I’ve learned in 23 years at this company and in this industry, you should really only get annoyed with yourself.”
We open with a discussion of his new role and Microsoft’s new mission. Smith told me that the company is more mission-driven than its ever been, and that the company’s culture is undergoing its most dramatic shift in his more than two decades there. We also discussed several of the most important issues facing Microsoft and the technology industry broadly — Microsoft’s lawsuit against the DOJ (irony alert!) for its privacy practices, the Snowden revelations and their implication on trust in technology, the breakdown in “safe harbor” data practices in Europe and the need for new models of international law, and the “skills gap” in our global economy (Microsoft announced the acquisition of LinkedIn two weeks after our conversation.)
It’s a fascinating dialog, one I hope you’ll enjoy as much as I did.