“Make Others Cool”: Microsoft, Empowering Customers, and Better Pricing

October 15, 2018

When Satya Nadella became Microsoft’s CEO in 2014, the company was stagnating. Windows 8, a lynchpin of the company’s attempt to remain relevant in the smartphone and tablet revolution, had proved to be a major disappointment. The development community had had enough of the company’s arrogance. The company’s stock price had drifted sideways for years. Not long after Nadella’s predecessor, Steve Ballmer, announced his intention to retire, Bloomberg posted an article entitled “Why You Don’t Want to Be Microsoft CEO.”

With that toxic environment as a backdrop, Nadella inserted a different word into the company’s lexicon:  empathy. One of his first acts after becoming CEO in 2014 was to ask top Microsoft leadership to read Marshall Rosenberg’s Nonviolent Communication: A Language of Life, a treatise on empathetic and compassionate communication and relationships.

As quoted in a must-read profile of his Microsoft tenure, Nadella states his company’s purpose simply:  "You join here not to be cool, but to make others cool," he says. "You want to be cool by doing that empowerment . . . “  Every customer of Microsoft, he says, "should feel that association with Microsoft is empowering to them.”

Better pricing for your product or service doesn’t start with you. To use Peter Drucker’s terminology, it’s not about your product or service, it’s about the customer’s want.

Your reason to exist as a business must be to empower customers.

This mindset change has paid tremendous dividends for Microsoft. Annual revenues have grown to over $100 billion, the highest in their history. Microsoft’s lead over Amazon in cloud-based revenue has widened. The company’s share price has tripled since Nadella became CEO.

You don’t have the all the resources of a major global corporation to make this simple change in perspective. Size is not a natural advantage here.

You can empower your customers no matter how small your business. If you do that, you become essential to them. If you’re essential to your customers, your pricing becomes a whole lot easier.

(Photo credit:  Bhupinder Nayvar on Flicker)

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About me:  I’m enthusiastic about how changes in pricing strategy can significantly change profitability for a business and enhance life choices for business owners. I live this passion through Ray Business Advisors, my outside CFO and business advisory practice, in which my pricing is exclusively value-based, not hourly. I work with business owners on how they can change their pricing not just to increase their profits, but better serve the wants of their customers. Want to talk? Call me at 404-287-2627.

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