Satya Nadella, Microsoft CEO: An Insight, An Idea | DAVOS 2020

At the same time no employee at Microsoft will feel good about working at Microsoft. They don't feel they're doing the right thing and I do in today's world have more of work to do to communicate clearly. The stakeholder capitalism is somehow not against shareholders. In fact, it is for the shareholders long-term benefit optically today. Where is Satya Nadella CEO of Microsoft? It's about Piccolo pleasure may be in particular challenge also because you are wanting to see most of my up the Business Leaders in the world. Did you um,

I have done something which so much fits into the philosophy which we are promoting. Do you insist on meeting to be environmentally to be carbon neutral and you do even more enjoy an ounce man. You do not only commit 2B be carbon neutral in a relatively short time. But you say we want to recuperate from the are all the bad stuff which Microsoft has sent into the air since its creation. I think 40 years ago. Now, let me ask you so first question you off today. So I'm most valuable company in the world and you always have to be to promote

office notion to create long-term shared value and we discuss here option of a comprehensive unified ideas Chima surround system, but you have being a Pioneer you have submitted your company to all kinds of kite area. Now. What what is your recipe put it in a very short question. What is your recipe to do good and to do well at the same time. What song is great to be back in to do this chat with you Cloud send it's it's fantastic to in particular. Is this year's Forum? I think has

even a particularly different nriva, and it's thanks to serve a lot of what you have set in motion. So what you know what I look at what's the social purpose corporation last year? Perhaps they were more books written on capitalism and how capitalism needs to be redefined than ever before and one such book store call Amer activate. There's a very good definition of the social purpose of a farm where he saves a corporation finds profitable solutions to the challenges of people that

write the key word is profitable because they know we do know that capitalism does have the ability to allocate resources in the most efficient way. But the other key word is the challenges of people in the planet is not about creating more challenges for people in the planet, but just have real solutions to the problems. I like that. In fact is a platform company at Microsoft. It's not about even doing ESG for yes, you save the core business model of the company is this business model if we succeed will there be economic growth that broad spread will

the economic growth be inclusive will we build mode trust in technology? And of course now, can we even ensure that to our engagement in the world? That is the most sustainable Planet? So I think it comes down to having that for business design incorporate when you do well the world around you does well and if you get that right then a lot of things fall in place, but if you're trying to just use these as Band-Aids and your core business model, your cooperation is not aligned with the world. Real real challenge. Could you could you

not to find any more solutions for your clients but to find solutions for society such Rafi the purpose of a company, of course by finding solutions for society. You find your client said yourself you all existing. I think that's kind of perhaps the most obvious thing. Sometimes we forget people and institutions are all part of our society and they owe a lot on our planet and you don't seem to think about the broader context the already system that we have come to depend on is not

stable such as preparing the following since many years Sands us Business Roundtable declarations, and I defenses notion of stakeholder ship inclusive capitalism. She could this is my eye always scared that relates to CEO Avenue Malaysian. Can you say I know it's a very sensitive question, but can you say something about it? How are you today? If I look at the inequities in the world renumeration of anybody whether it's a CEO or whether it's a return on Capital. All

those are now the question ultimately goes back to is what is the market say and what is the society thing as a fantastic book? I recently read where it's called is called a narrow corridors written by a team to Economist say it's the real constant tension between what does a society want and then in that case he talks about what does the government? These are the two centers of power and you have to find the narrow Corridor and similarly. I believe between markets democracies in Liberal values. We have to find the corridor

that works where there isn't anything that's out of kilter weather is the co-pay or let's talk about it. Like somebody described it to me Jesus. He owes us to labor. There's by the way, there's a bigger return his call the capital weather returns Alice return to get all of it. If I walk to Scurry doll by by saying cx650 for new baby new relationship would not be able to profit that should be tight or so to z e s t a treatments. Would you agree with sour cream?

I have to go make the case to our shareholders that it is in their long-term interest that we do what we're doing. So, for example, I give you even a very practical thing. We did a few years ago. We said we want to extend our parents leave and sick leave not just do our employees but even to the vendors who walk because they're working right in the same offices and having very disparate benefits makes no sense to which we would have to subsidize it. So

that's profit out of our bottom line at the same time. No employee at Microsoft will feel good about working at Microsoft. They don't feel the right thing and I should care about employees feeling good. Who in today's world have more of work to do to communicate clearly. The stakeholder capitalism is somehow not against shareholders. In fact, it is for the shareholders long-term benefit the small seed for clash between short-term and long-term that are not between let's play shallow. Capitalism and stakeholder capitalism is

the name of national security for something. You cannot sell your products in China anymore. I think from 23 Yuan to 2 to grab onto the units. Are you concerned? That's the world is developing Insurrection of two circles who is each with its own technology who's had actually be good. If we be creates his picture all the cheat codes of all Because you are very a really well implanted in China. What is your feeling of Your Action? And what would you suggest?

Bison, look every country does deeply care about their National Security aide and they having fat radio. They care about their National Security and I think that you'll always be the case, but that's it. I think I would at least get us to think about what should happen. If you consciously couldn't Cody couple or the trading Spears. What have you all we will do is increase the overall transactional cost of our economy and everybody would be worse off. I think that's just going to be what will

happen. I always go back, you know, I immigrated to the United States in 88 then I went and studied the Berlin Wall fell in 89 and then I went to join the software industry. 90 in the sky like winning three lotteries in continuing sequence and Market access ability to expand into all corners of the world and I do feel in the tech industry. We do need to grow up because the world is a little more complicated than that and our responsibilities are more but I think any decoupling without some thought into how we can come up with mechanisms.

For example, I believe trust in technology is something that the world will need more no moms around right takes take cybersecurity. Do you call for the Geneva Convention around cybersecurity we have call forwarding you were very active on the AI ethics. I can take him on the topic of Ethics. I think China cares as deeply about AI ethics as the United States the Chinese people. The Chinese government are also not going to worry about the implications of a I run wild would be a problem then. So therefore

I think both United States and each and China and the European Union having a set of principles that govern what this technology can meaning of societies and the World At Large is probably more today than it was in the last 30 years. I want to see key issues today is how we handle data and I think it was you who at least you spoke out for they tactic nitty and how do we protect privacy? How much do we use some potential of so stay there for good now locations.

Could you repeat? What is What is your opinion about this whole issue of privacy? Which really so many people and how can we guarantee privacy and on the other hand still used today. For example for medical purposes and siwa I would save data and privacy around data at an individual level needs to be start off as a human right ending in some sense. You are a fat steak in the lead with gdpr and he's even if actively regulated regulation and we are in fact, I'm hoping to see you more of a federal standard in the United States and in the world over. In fact, we've taken some of the subjects rights

of gdpr and made it available worldwide is a human right and that's to be protected. You have to be transparent. I like which we use for data dignity goes one step further than Pride. Did you contribute to the world is God utility utility for you utility for the business that may be giving you a service in return and the World At Large. How do we account for that Surplus being created around data and who is in control around giving those right? That's the next level of I think work we all need to do where it's not just oh I have privacy

and I just give away my day that I should be able to infect control in a much more find a grain weigh how my data is being used to create both utility for me and the world and the causes I care about the serous Republic would you would you agree with the statement? Yeah, I think that's a different word for you and carriage prices reaction of sea, but could you go one step further by our trust in Wednesday expression? I don't know what side does for used a date that will buy that for everybody. So

I need a what what wallet wallet. She can't decide whether he actually says so they dilated fundus business model getting a free service, but that's the only data driven business model purely where there is value exchange even say that Value exchange is not fair because the middle of the ad broker makes all the profit. What is this thing was split a lot more evenly humor benefited a lot more than just a free sub The Advertiser whose prices by the way, you keep going up because it's second price auction in fact

goes down. So I can't believe some of the best Economics work should have happened around 8 at dignity and new business models in the 2020s. Will hopefully allow us to get there. You spoke your mind should already artificial intelligence. You have written the book guy hit the request. I have Witnesses book about supposed to distribution and coins in Ocean. But I still have difficulties to understand the whole ethical concept around artificial intelligence.

What what means actually what what do we want to do to capture when we talked about as close? Couple things to put for why do we think AI does Mark a real departure from let's say the previous generation of software in software development because for the first time we have the ability for software to be written. So to speak by data as opposed to software generating data are the foundational level that that's the Paradigm Shift machine learning, you know, you essentially have data generated your software or the learning generating. I've been generated by

data, but at the same time, I think we should not be too or should I say fasting abdicating our responsibility in what is happening here? For example, you set aside in a set of principles of fairness around robustness around privacy security transparency. Intelligibility of the models that are created an accountability practice. So for example, if there is a language model that gets created you need to put in the hands of people who are developing the language model tools to Dubai as the

language model because I've learned from the Corpus of data tools maker software developer platform creators are very focused on building the best tool chainsaw than anybody involved in the process of creating a Lie by Design have the ethical principle enforced I'll say that one of the other thing is, you know, what's the best way to ensure all the days? No bias in a I have a diverse team to the best way for us. In fact change the ethical Frontier the way I used to have the diversity of the team. Cleaning gear I

represent the ethics. We want Siri speak. And so therefore I think of several mechanisms that we can create that are governors in how a I get created for good not for the unintended consequence. I just want to make one of the point because regulation does have a real place here and especially regulation at the time of use there two types of regulations. You can have you can have regulation of the time of design and the regulation that time of use and so I think we should be thinking a lot harder around regulation of the time of you is because facial recognition

or object recognition by itself is not good or bad. It is just a technology we use case that is good or bad and so we have to be able to sort of even think about regulation more of the runtime not at the design time. But sometimes more difficult because your consumers and you though you have a moral split. You always have see strong opposition, which we have seen on iPhone cases. Let me let me ask you when I come to something else talk to you when you wrote an open letter recently

and I think to you all employees Housing Services attention to achieve more in to communicate. What does it mean because you could say to achieve more just means to put more pressure on some people. Is empowering every person and every organization on the planet to itch more than I ever felt that in the at the start of a new decade. We needed to put more texture more definition. MO mean in Duarte more looks like that for us as a company in OBC. And what does it mean for that

Society in the planet different levels to at the first thing by the way, I care deeply about as a platform company and in the fourth Industrial Revolution where we now have the most malleable of resources, which is digital technology to help fuel economic growth because for all the talk, right the economic growth around the world is not actually that good because we had we have a problem that we don't have the economic growth. We enjoy perhaps in the 3rd at least in the beginning part to the third Industrial Revolution to get back to real

I'll call it broad sectoral economic. Lightweight needs to happen and it has to happen in a very inclusive with that means you can't just be in the west coast of the United States in the east coast of China. It can be just in the tech sector text is 5% of GDP. It may even become 10% what happens to the other 90% of the GDP is what matters are in terms of real economic growth. It needs to happen Urban and Rule so I can get a many many of these divergences which we now need to converge back. I would say and that needs to be front-and-center priority. Now by the

way. Economic growth will only happen if two other things are also in place for achieving more one is trust in technology. The one way we can in fact not only have economic growth lack of economic growth. We can go back chords easy. If you don't have trust in the very factor of production that supposed to feel the fourth Industrial Revolution. Weather is cyber whether it's privacy we talked about gif Internet safety, these are all big topics where we will meet Global Norms to ensure that there is trust in technology. And as the flat from creators will have to do our part

in it and lastly out date sustainability, which is achieving more means whatever economic growth we achieve is going to also make a planet most sustainable. So whether it's water whether it's waste whether it's carbon all biodiversity have to be front-and-center. And so that's the framework we have for achieving more. I was just impressed by spice by Sophie call 5% of the tech industry today, but if you look now, that's the transformation of the automobile industry. The automobile industry is becoming

addiction ended up staying late. And if you look at your future of Industries, would you for me? I feel sore 2 Revolution Which will take place using digitalization data. I'll probably still in I mean many industry sectors but practically All Saints location on the back of the couch where we are still very well. Let's say breakfast oriented Factory. He's going to be defined by this Fulton Industrial Revolution which for which I wrote the foreword background

check the fundamental thing that you are seeing is the increasing digitization of people places and things you have cable resource digital you can start doing things you can do without them. So you can do with bits. In fact, you can make your Adam's more efficient where they are. Remove how they're made because you can stimulate You can predict you can automate all in soffit and I think that's the broad phenomena same thing with Precision agriculture the fact that you can pick the seeds the time to put them

how to maximize or minimize the water usage all can effectively be designed like how you design a semiconductor until that. Ability to take even what is physical today in converted into digital and then make the physical better is I think what's going to happen everywhere. She just starts shifting. Let's a digital Evolution now octopus intelligence, but now we have Quantum Computing and sis, maybe even a game-changer to your old company. Can you share some are you don't have to share your

plans? But you are your genital that it's a appreciation of importance of Computing. Future a real good way to think about what's the motivation in spite of all of the abundance of computing weed today have any problems that today or not OnStar not solvable by classical computers taking back if you want a caplet that is going to capture carbon Wii with that's a computational problem that is not solvable by Costco computer. So in some things we need a quantum

computer. If you need a real quantum computer, which is you need new physics you in terms of you need to discover a new physical property that exhibit Quantum behavior that are stable then to be able to have a complete you suck. Write everything that you let anyone is learned in computer science today is null and void you have to relearn it and that's kind of approach we're taking which is rebuilding out like always Software stock of even have a new language called Q sharp. You can go learn it today. You can program in it and stimulating Quantum

algorithms on classical computers and the Cleveland Clinic is done something very clever or in an MRI machine one of the ways you can be much better how higher have a higher position in discovering too much for example is a such problem that can be solved in classical computer. So damn use the quantum inspired. I'll deliver them all ready to start excited about that next level of compute computation the funeral. Economic growth. We talked about it take for 10 years from now that we have any stops along the way. Is there

any question we have a time for one or two questions if you accept from the audience and happy to do it. Let's take the first one from Beyond. Thank you. Ask Global shaper from Toronto. My question is what might be some arguments to perhaps help convince businesses that greater data dignity for individual might be better for them. You don't have to convince me because in substance it comes down to a new business models petition in a second price auction. So

who gets what for data and so I think what needs to happen is real business model Innovation around the ad funded business model today today. I think they'd and I don't want to say that any one business model is problematic the world needs all business. That's the point which is you can't have just one business model be the only business model and that's I think what's not great for the work. So I do believe that they will be the Enterprise Market that what that's why we're there is

data dignity. No Enterprise once the day they're just to be an issue creates a place for themselves. Why is that not true in the consumer space? Today the value exchange of the week value exchange because you're giving away valuable data for what is considered a free service or is the free service you're getting really all of the value. You should be getting for your data and that is what I think is the question that needs to be off. Everyone great to be here. I have a question on culture at The Forum a Microsoft employee myself. I left Microsoft in 2005 to focus on building

used for technology Foundation, which is an International Education technology. Nonprofit them part of web as a result of Hill this Robin Bush Rob Community, but thank you for your efforts to really change things at Microsoft and we meet when you talk about empowering everyone to achieve more my question is specifically, how are you doing that to do good and do well especially with employee culture to prevent what men like myself suffered from in the early 2000s that Microsoft which is burnout

to come back now. Is the lived experience of the people inside the company is everything as a CEO? I always say that my biggest job is curation of culture. Right? I mean you sometimes forget that in order to get your strategies ride and products ride. You need two things that really anchor you that sense of purpose and Mission which gives you directions, right and then culture which makes it even possible for you to pursue that mission and that's where

I think the tone of the top the focused on it. What are the ways we go about not just saying we have a culture actually going to change it to why and it's a one-time change and then we'll forget about it. That's just not what it is. I mean, it's everyday all of a hundred forty thousand people who work at Microsoft are going to come and look and say is my lived experience close to what is the espouse culture and that's the difficult framing of it. I would say whatever change we've been able to achieve is because the cultural mean we pick Was inspired by Carol dweck and her

walk around Road mindset, right. The concept is simple, which is you go to school and you take two kids. One of them has more than its capability and the other has but one of them is the person with monat capability to know it all and the other is a lot at all. You know how the story ends that applies to see yours that applies to companies that applies to all the hundred forty thousand people in the company interview of taking that and said, how do we confront? Each of us are fixed mindset each day when it comes to diversity and inclusion when it comes to customer Obsession are when it

comes to even how we is a company come together. None of our customers can care less about sort of our divisional boundaries. So we need to come together. That's where you have to confront you fixed mindset even today. Sometimes people that Microsoft will come to me and say sorry we found the 15 people in Microsoft who don't have a growth mindset. That's not the point. The point is not to go look for the 15 people. It's to be a For me to be warm enough to say I'm not perfect. I'll never be perfect but I can learn that's a good posture to have to have a living culture

that is constantly keeping up with our own aspirations because I think we as human beings and never going to be satisfied with sort of what is the culture around us because our standards I want to keep going to be expired to do and we definitely are on a journey and it's a continuous Johnny and I think it's time for you to come back at the end of this fascinating discussion, but I think what I take wish me a real living in such destructive time, we don't have the answer to all searches.

And I mean managing a company like Microsoft to such a complex challenge, but what I am I on what we have seen, those are in succession. You will have to remain human and you have even if you are to talk in certain position, and you used to see the world you have to confess set you available. I'm done as long as you know you I wouldn't know where your work or so to make sure I sent you an email in human before I end and thank you. I appreciate Microsoft strong

Partnerships reform. We spoke about Lucy needs to develop ethical Frameworks announce a new technology what we are doing now in our Network off lucian's room. Microsoft is very much engaged and also to thank you. Remind me sings for the optical engagement for a drink, which is a joint project with you when I really want to create the tree platform behind each of see if the Chiefs are sustainable development goal is to allow everybody to have people engagement to make sure sir. People

try not just some businesses ngos, but everybody should engage behind CCSD cheats on GF. Thank you very much because it's possible. Thanks to Sequoia aberration. We have so bad coming back to severe purpose of secession. It was to show do it to give an answer to some difficult questions, and I we we we we got very satisfying also. Thank you. Thank you so much.