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When Satya Nadella, ’97, interviewed for his first job at Microsoft Corp. in the 1990s, he stood at a whiteboard, working through streams of algorithms, one after the other, going through quick sorts and bubble sorts, using minimum data structures and minimum memory, showing off his computer science acuity.

It was an arduous interview.

“I was thinking, God, I’m done. Isn’t it time to get hired finally?” said Nadella.

Not quite. Nadella had one more question to answer before his job interview wrapped up. It was a question that caught him off guard: What if you are standing on a crossroad and you see a baby fall, what will you do?

“Now this was 1992. It was before the cell phone era,” said Nadella. “I thought about it for a while. This was a computer science question I had not prepped for. So, I said I’d run to the closest phone booth and call 911.”

The interviewer got up, told Nadella the interview was over, and walked him to the door. Nadella was stunned.

“I asked him, ‘What happened?’ And he said, ‘You need to develop empathy, because when a child is crying you pick them up and hug them.’ And that’s always stuck with me, that it is an important attribute.”

In the end, Nadella did get hired, and today he is CEO of the Redmond, Washington-based software maker. He became CEO in February 2014, the third CEO in Microsoft’s 43-year history, succeeding Steve Ballmer and Bill Gates.

“The most important attribute that any leader needs to have—and it is often underestimated—is the need to  create clarity  when none exists.”

— Satya Nadella

Originally from Hyderabad, India, Nadella earned a bachelor’s degree in electrical engineering from Mangalore University in India and a master’s degree in computer science from the University of Wisconsin-Milwaukee. He graduated from the Weekend MBA Program and is a member of the University of Chicago Board of Trustees.

Last October, Nadella joined Madhav Rajan, dean and George Pratt Shultz Professor of Accounting, at a gathering of Booth students at Harper Center. During their fireside chat, Nadella discussed the leadership traits he looks for in a job candidate, and why empathy is key. An edited version of their conversation follows.

Rajan: You’ve grown a lot as a leader at Microsoft. Could you talk a bit about that? What lessons would you give to our students in terms of planning their own careers?

Nadella: A lot of people who come to business school, especially nowadays, have had a significant amount of work experience. They already have a good sense for what it takes to grow a business or create an entrepreneurial venture or succeed at a large company. So there are three leadership attributes that we look for in the candidates we are interviewing.

The most important attribute that any leader needs to have—and it is often underestimated—is the need to create clarity when none exists. You don’t need a leader when everything is well-defined, and it’s easy, and all you have got to do is follow a well-written plan. But in an ambiguous situation, where there cannot be complete information, that is when leadership will matter. Your ability to come into an uncertain time and an uncertain future and bring about clarity is key. The people who are capable of getting into a situation where there is, in some sense, panic and who can bring first clarity on what to do next—that is invaluable.

The second attribute, which goes with bringing clarity, is people who can create energy. One of the classic things you face as a leader is you will have someone walk into your office and say, “Hey you know what, I’m very good, and my team is very good, but everything around me is terrible.” That’s not creating energy. You need to work. I mean, you may say, “I only work in small companies,” but the reality is you have to deal with lots of investors, lots of customers. There is no simple thing that is always under your control, so the idea that you have got to create energy all around you is another element—you have got to really pick up the skills to do it. You have got to be at your evangelical best. You have got to have followership all around you.

The third attribute—which I think Booth really does advocate well to develop this—is to create success in what is an overconstrained space. Life is an overconstraint problem. So you can’t say, “You know what? I’m just waiting for you to remove all the constraints and I’ll be perfect.” When leaders come in and say, “I’m not able to do this or I’m not able to drive success or achieve success because of all these exogenous factors,” guess what? Everything is exogenous.

And so those three things: bringing clarity, bringing energy, and ultimately figuring out how to drive success in what is an overconstrained world, to me, are the attributes of leadership.

Rajan: One of the themes that comes up in your book, Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone, is the notion of empathy. Why do you think it is an important characteristic? Where do you see that as key for a leader?

Nadella: As you know, we have a special-needs son who was born to us in 1996. That changed my perspective significantly. For a long time it was all about, “Hey, why did it happen to me? Why did it happen to us?” And then eventually I realized that nothing happened to me; it was my son who needed the help. And I needed to show up as a father and in some sense do my job and do my duty—but more importantly, see the world through his eyes.

You may say, well, these are all things that happen in personal life, but I’ve come to realize that if you think about creating anything new, any new product, any new business, as a leader, the one skill that you need more than any other skill is that deep sense of empathy.

Our job is to build things that somehow are in tune with these unmet, unarticulated needs of customers. It is not written down. It is not like I can interview five customers and figure it out. We say everything is automated, but you can’t A/B test your way. What is the next hypothesis you are going to test? That, to me, is a form of empathy.

I actually think that empathy is not something that you reserve just for your personal life, even though it helps a lot. Obviously you need it to exist as a human in the world. But it is also core to product development. It is core to creation of any value.

Rajan: What do you do to relax? How do you achieve balance in your life?

Nadella: Reading the Russian authors and watching cricket are the two things that I find most relaxing because they are so against the grain of what I do every day. But the other thing, quite honestly, is to actually take the few moments that I have, the few hours that I am doing something with my daughters, and be actually present. It’s probably my biggest struggle because we as a tech industry have done a fantastic job of creating the ability to be always on, always connected to everything in the world. For me, solitude and being present give me a tremendous amount of renewed energy, so when I come back to being connected and to doing my work, I have a renewed sense of purpose.

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