Interview with: 

Chris Capossela, CMO Microsoft

What's changed, how he’s changed.

To give people some sense of what they have to do to constantly reinvent themselves. lessons he’s learned of how to constantly reinvent yourself, change yourself. Keep up with this accelerating change.

  • Easier when whole company is changing.
    He’s been blessed that the company has been forced to change so that marketing has had to change with it. It's a lot easier for a chief marketing officer to change when everybody around them is also being forced to reinvent the way they do their jobs, and the company figures out why it's here on the planet.

    9 years ago, when Satya became the third CEO, he really instilled in the leadership team the fact that they had to reinvent the company, or they were going to go out of business. “I think a lot of CMO's struggle with their jobs because their peers don't see any need to change anything, but when the boss of the whole company said we've got to reinvent the entire firm, shift ahead or else it gave marketing the opportunity to ride that wave that which is really helpful.”
  • Wallow in our reality.
    Which means spending time as a leadership team seeing the world as it really is as opposed to how you want to see it from inside the four walls of your corporation. That helps put everyone in the same mental space that has urgency of change behind it. For this they:
    • spend 7 or 8 hours together every Friday as a leadership team with the CFO, the CMO, the chief sales officer, their five engineering leaders, head of HR, head of legal,
    • In the early days, Satya would bring in a photograph that he thought represented an issue and we'd spend an hour discussing that single photograph e.g., of a lecture hall full of. College students all using X and not using any Windows machines.
    • Or they bring in a customer of theirs who chose a competitor product and have them spend 45 minutes walking through where Microsoft fell short and why they chose Amazon or Google, or Zoom, whether it was the sales process, the product process, pricing or licensing which marketing owns at Microsoft.
    • “Wallowing through the reality of your competitive losses or market share dynamics or what have you and giving it time to breathe, right, I think is one of the most powerful things that we were able to do.”
  • Innovating beyond the product.
    Pushing every one of the discipline leaders of the company to innovate beyond the actual engineering and the products. Engineering is an alpha role in tech.  In cpg is might be brand managers. Those alpha roles are saddled with all the blame when things go badly, other roles are not pushed to be particularly innovative. Satya said, “what has marketing done that's actually interesting in the last eight years, if we went to a marketing conference, would anybody be talking about anything you do? And he did the same thing to the sales leader, and to the finance leader, and to the legal leader. what have you done that's innovative? What's your innovation strategy? Whet he cares about is innovating in your discipline to help the company grow and to help customers understand what they can do for them. Innovating beyond the product is critical because product differences become less, long term competitive advantage shrinks.  
  • focus less on competitors’ customers and more on fans.
    “Fans can teach us more about what's wrong with us than our competitors’ customers”. They have a long history of trying to switch competitors’ customers over to Microsoft, “Satya has taught us that the people who can teach us the most about ourselves are the people who use our stuff already. they can help you co invent the future.” So, Xbox gamers were the ones who taught them that love their console and to play on that big screen with that 20-foot experience. But they also love to play on their PC, and they also play games on their phone. “They're the ones who led us to realize that our console or device centric view of the gaming world was not the way the world worked. You needed to have a gaming centric view.” So they invented Game Pass, which is a subscription for gamers to get access to hundreds of games that they can play across all the devices that they like, even to the point that Microsoft streams these games from their data centers to Samsung Televisions or to an iPhone or to Android tablet The way to get to the PlayStation customer is more through Microsoft’s own fans than it is through their own marketing. The lesson that they’ve learned the hard way is focus on their fans. “Activate your fans, learn from your fans, co-innovate with your fans. They're very, very powerful.

Dealing with the complicated and rapidly changing world of marketing

  • A maniacal focus on what they call business model bravery.
    This is the notion of reinventing your company’s business model to embrace whatever your new world needs it to be. For example, in Microsoft’s world.,” we used to charge everything by device and today we've shifted the company to be 100% user-based subscription and 100% cloud consumption. So, when you buy a copy of office, it's not for a laptop, it's for you as the person, you’re subscribing to it, and you can put it on whatever devices you want.  You don’t buy a server just pay for what you use. “Customers move to these new business models far faster than companies are willing to.
  • earning, brand love
    When things get tough, if you don't have people who really believe you make their life better, they’ll switch quickly. generating brand love goes hand in hand with business model bravery.
  • A digital first go to market.
    In digital channels, the signal is daily, and I can move my money almost hourly.

How does he make sure they are not doing averagely?

  • Centralizing the marketing function
    They have a centralized marketing organization that serves the entire company. Chris thinks picking the things that you centralize and the things where you specialize in a particular customer solution area is important. He’s created a business planning team that is centralized for the entire company. They do all the pricing and licensing and yield management and business modeling for the entire company.  it means when they come to work every day, they are maximizing for Microsoft, not for Windows or Azure for Xbox. “We don't have a Windows goal; we have a company goal.” His media buying team looks at performance-based media buying and is empowered to move money from one business to another based on what's working for the company”. Because of the way Satya is running the company he has more and more people that have a global maxima mindset and fewer and fewer people that are. paid just on the results of aiming or just on the results of security, or gaming or whatever.
  • A team sports.
    • “it's a massive team sport here. It’s not like marketing runs the show, there's a single P&L and it's him and his 12 direct reports that manage the P& L. the partnership between marketing and finance is super Deep, as is the partnership between marketing and engineering and marketing and sales,
    • it forces the disciplines to be really good. he can’t centralize media if they're mediocre because the individual solution area owners won’t use them, won't rely on them, won't trust them. “Finance has a very high bar for our marketing people, Marketing has a very high bar for our finance people. we're in a world where the bar just keeps being raised on the quality of our teams”.

Comfort with change
Microsoft’s culture is pretty primed for it. “Maybe it's because we're in tech/ Maybe it's because Satya is such a forward-looking person. He doesn't like to look back”. They’ve also have got smarter about what metrics matter. “we're such a crazy data centric culture that if the data is not there, you just move on. “I'm not in the mining industry, right? I'm at the bleeding crazy cutting edge, AI is all anyone talks about every single day. So, it’s just pure reinvention.

Talent and recruiting

  • Culture
    “100% of my time is just interviewing on culture., it's whether or not somebody is going to move the culture forward at the company. I don't need them to be perfect”.
  • grit and resilience
    We discussed the pressures of working in a restaurant which both Alan and chis have done. “You have to have resiliency and people who are up for the crazy, up for the chaos and can lead through it, something that's more important now than, say, five years ago”. “For me, culture and empathy going hand in hand. It’s the big one that Satya's brought to the company” “. Of course, we look for people who've done great work in the past, but they have to be able to ride the roller coaster without flipping out.

great marketers know how to look end to end.
“They are systems level thinkers. They understand systems. They can connect our engineering systems to our finance systems, to our marketing systems, to our sales systems. And of course, they understand the systems of the world.

    • They're able to say, oh my gosh, security is going to be a much, much bigger deal than it is today in five years. food, the agriculture system of the planet is going to be the next thing that needs to be digitally reinvented. If we are moving to a more nationalistic world, that means our data center strategy has to be country by country. It can't be all the cloud and the data can live anywhere, not in a world where governments are becoming a more focused on domestic and scared of global.”

Chris Capossela, Allen Adamson and Joanna Seddon

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