Satya Nadella is widely credited for turning around the fortune of Microsoft. From a behemoth that failed to remain the front runner in the big tech race, and was losing out to younger companies like Google, Amazon, and Facebook, he has turned it into number 1 again, in terms of innovation and growth.
The change has reflected clearly in the stock price of Microsoft. Since July of 2016, Microsoft stock price has more than doubled, reflecting the growth in prospects of the company’s various businesses. Since Nadella joined as CEO, the stock price has more than tripled.
Microsoft is too big a company, and it is hard to turn around or bring any meaningful change in a massive company like that with thousands of moving parts. Most human beings fail to even bring any meaningful change within their tiny nuclear family, imagine aiming for transformative change in a company that employs tens of thousands of people around the globe.
In that way, what Satya Nadella managed to do is considered incredible. A lot is being written these days about what led to this massive turnaround of Nadella and Microsoft under him. This is probably the greatest story of our time in terms of wealth creation and success, and nothing of this scale have been achieved before, except perhaps Apple under Steve Jobs.
Many have highlighted the difference between Nadella and his predecessor Steve Ballmer. Steve Ballmer was known for drama, show off, epic public appearances and meetings. He was charismatic, and he tried to inspire people with pomp and buzz. He would tell Microsoft employees that they work for the greatest company in the world so they must celebrate that.
Steve Ballmer was CEO of Microsoft for a long time, from 2000 to 2014. He was definitely successful, but Microsoft lost some crucial battles to competitors during this duration. Internet Explorer went from being the most used browser to a joke that everyone wanted to avoid, for instance. It’s Bing search engine never took off. It failed to compete with Android or Apple in the phone OS market. Windows phones never took off despite it making expensive acquisitions of companies like Nokia. Amazon built AWS and Microsoft missed the bus with Azure and was trying to catch up. There are many such examples.
Basically, despite having all the resources, money, talent in the world, Microsoft, the hot favorite, was losing match after match with relatively junior competitors.
It still did fine based on its legacy businesses, where it was entrenched and very profitable, but the future was being stolen by other newer, scrappy, more innovative companies from under the nose of Microsoft.
Satya Nadella is not just a manager, he is a techie. When he came on board, he set out to change the culture of the company. He changed the culture from competitive to collaborative. He put a premium on innovation. He got involved in tech development even himself, at the grassroots level. But the main change was in the way he saw Microsoft.
He did not bask in the glory that Microsoft was the biggest software company. He only said that there is so much possible with new technology, from AI, IoT to blockchain, how much has Microsoft done? Does it offer the best cloud software? Where is the technology industry headed? Is Microsoft leading the tech industry in innovation in these fields?
Let’s take an example. Slack is a cloud-based workplace collaboration app. It garnered million-plus users and billion-dollar valuation at rocket speed. In 2019, it went public. However, since then, it’s stock price has been going down. Why? Because Microsoft has a new cloud-based product called Team that it is selling with its Office suite, that has been hitting earning of Slack quite hard.
This was unthinkable earlier. Microsoft historically did not even consider such markets to be of significant interest. It bought Yammer, an office chat solution in 2012 but never put its full weight behind it. But not in the times of Nadella. Under him, Microsoft wants to create and sell the greatest cloud-based workplace software too. And many, many other such cloud-based solutions, taking the fight to newer companies that were so far having a free run despite Microsoft having a huge advantage thanks to Office.
Nadella sees the massive scope for growth and points out where Microsoft is not a market leader but could have been! The humility to see where you are lacking even when you are so big is the most critical turn around factor in Microsoft that Nadella has instilled.
Nadella also aggressively acquired younger and newer companies that were leading in their domain and gave them leadership within the Microsoft empire. Now, this is something that is not unusual, big companies are always acquiring startups.
What was unusual was how these companies were treated after joining Microsoft during Nadella’s tenure. Instead of destroying their previous identities and subverting their earlier vision to make them more like the old monolithic Microsoft, he let them be more like what they were before the acquisition. He perhaps wanted Microsoft to imbibe the startup-like growth mindset, that begins with humility, which was terribly missing up to that point.
What can we learn from this Microsoft-Satya Nadella revolution in our legal industry in India?
Now think of this in terms of big NLUs. What do they exactly do today that was not already done 10 years or even 20 years back? Where is the innovation? Where is the drive from next level of growth?
Alumni and teachers complain that even the good standards already created a decade back is now being compromised due to rent-seeking behavior of the new generation of students and some faculty members.
It is understandable. As a world champion boxer once said, it is hard to wake up at 4 am in the morning to run 10 km when you are sleeping in silk pajamas.
If you know that you are going to get a nice cushy job when you graduate, no matter whether you work hard or not, just based on some optics, why work so hard? Unfortunately, getting a job from campus placement of a top NLU is way easier than actually succeeding in a job. Or succeeding as a lawyer for that matter.
Sure, the NLUs can survive this way for a long time, just as Microsoft did for a long time and would have continued even if Satya Nadella was just another Steve Ballmer, and it did not seem it was under any immediate survival threat. Or it may have disappeared one sudden day under attack from new startups and global competitors just as Nokia did.
Sometimes you just survive not because you deserve to thrive but because the rest is even worse. The TINA factor – there is no alternative. That is the situation with the NLUs today.
Still, the NLU brand name has taken a beating already, and the industry is increasingly asking why it should continue to fork out top salaries for law graduates who are unable to cope with the job and leave their first job within a few months in large numbers. They already prefer to hire from their own internship programs rather than from campus placements, though doing campus placement is an important part of the big law firm optics that big law firms find hard to opt-out of.
The top few NLUs may not be under any immediate threat of losing recruiters yet, especially because there are no better alternatives, but what if such alternatives were to present themselves?
Can NLUs evolve and adapt to such threats?
Jindal Global Law School has emerged to threaten the hegemony of NLUs and has already shown how easy it is to beat the NLUs in many of their own games. JGLS has the drawback of much higher fees than even NLUs, but the gap is fast disappearing.
My guess would be that new challengers will emerge form of tech-driven education solutions that would disrupt the NLUs eventually, and that would be very easy because NLUs are not moving forward. They are either standing still or moving backward.
At LawSikho, within a couple of years, we are able to deliver an advanced level of legal education with very little resources that top NLUs fail to deliver! Please take a premium course offered by LawSikho (say M&A, contract drafting, or media law), go through the syllabus, and then ask an NLU graduate if they were taught some of that in their class, and you will find out how it is.
Imagine how things will look like 5 years or 10 years down the line. And we are certainly not going to be the only one, I expect a bunch of new edtech companies would provide the next level of legal education. A massive missed opportunity for NLUs.
What about law firms and litigation practice?
The biggest law firms have realized that the traditional areas of work that make a lot of money today are slowly losing the margins they once used to command. Premium work does not remain premium as more and more law firms and partners begin to do a certain well-paying niche work and begin to undercut to get clients.
The incumbents then have only two choices to retain their primacy – either by providing a superior quality of work or by discovering and acquiring new premium niches that replace the less profitable niches that they are leaving behind.
Sometimes they use their superior spending abilities to train their lawyers better or get better software or IT systems or captive BPOs that make their fee earners more productive and efficient.
The idea is that one must move forward. There has to be innovation and growth even if a big organization is to stay relevant. What is highly profitable today, will probably not remain so profitable tomorrow, and that is the nature of the game. However, if you keep innovating, if you stay humble and focus on growth opportunities, you can stay miles ahead of everyone else!
Is it all that different in litigation? I think not. If you want to build a successful litigation today, you cannot follow the footsteps of Jethmalani or Salve. You need to find new markets with unsolved problems, and find new business models and service delivery systems to success big. Vakilsearch is a great example, with hundreds of lawyers, it is not a law firm but a very big legal services delivery organization that has leveraged technology and the internet to disrupt hundreds of law firms and CAs. The business model and the use of technology has been critical in its success.
Unfortunately, too few lawyers think like Hrishikesh Datar, the founder of Vakilsearch. More people want to replicate what Salve did! Seeking status rather than opportunity is ruining the future of many young lawyers.
We need to reinvent the legal profession.
And it all starts with humility. We may be the best in business, but that does not matter. We have done nothing compared to what is possible ahead. We may be at the hilltop, but we could reach for the stars. We need to focus on the headroom that we have for growth, and that is the lesson we must take from Satya Nadella.
What do you guys think? How are you investing in growth and new trends that would become the waves of tomorrow?
Here are some courses we offer that can help you to capitalize on upcoming trends in the legal industry, find and execute high margin work, and discover niches that have the maximum potential to grow:
EXECUTIVE CERTIFICATE COURSES
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.