Article

Qi Lu vs. Satya Nadella – How to Lead for Change

By

Alex (Chengming) Ren

on

August 8, 2019

Editor's Note

Alex Ren, who came to the Silicon Valley in 2012 with an extensive sales and marketing background, is constantly perplexed by the different ways in which people think. In order to discover the essence of leadership and the cultural differences between individual styles, he conducted thorough conversations with more than 300 engineers in the last three years.

Compared with Chinese leaders who emphasize more on inner cultivation, Indian leaders seem to pay more attention to the utilization of values, communication skills, and grasping an in-depth business understanding; this is much closer to the western definition of leadership. Thus, if engineers and researchers would like to cultivate their leadership skills, they should focus on soft skills first, as well as understanding the social impact generated by their occupation.

This article attempts to address the following questions:

  • What is the essence of leadership?
  • How do cultural differences affect Chinese and Indian leadership styles?
  • What kinds of leaders are corporations looking for during their transitions?
  • How can engineers cultivate their leadership skills?

2500 years ago, the ancient Chinese philosopher Lao-tzu walked out of the Hangu Pass and left us with the Tao Te Ching, a five-thousand word classic text. Among its enlightening messages, one passage in particular illustrates his profound wisdom:

The one who knows doesn’t speak, the one who speaks doesn’t know.”   -- Lao-tzu, Tao Te Ching

He thought that a wise man should gain people’s respect through self-discipline, consistency and generosity.

200 years later, another representative of Taoism and successor to Lao-tzu, Chuang Tzu, composed the phrase:

To be the saint inside and the king outside” -- Chuang Tzuin, Tian Xia

To be the saint inside” is to embed the Dao (the law) in your mind and naturally let things take their own course. “To be the king outside”, is to show the Dao to your society and carry out your duties as a leader. Essentially, it means one must carry their morals within and subsequently use them to influence the wider world.

But what does this have to do with Chinese leadership in Silicon Valley?

In Silicon Valley, people are used to seeing a multitude of Indian executives and CEOs, however, seeing Chinese executives is still a rarity (for example, in 2017 ten of the fortune 500 companies in the United States had CEOs originally from India, compared to zero from mainland China).

In an attempt to understand this, I have developed an in-depth study around two Chinese and Indian tech leaders: Qi Lu, former chief operating officer of Baidu, and Satya Nadella, now chief executive of Microsoft. Both are outstanding leaders of which I have no intention of derogating. I simply hope to compare their leadership styles and characteristics as in-depth and respectfully as possible with the intention of inspiring readers to think deeply about the unique qualities offered by both cultures!

Tech leader comparisons: Qi Lu vs. Satya Nadella

1.  Early Experience

Qi Lu (Source: Y Combinator Interview, Nov 5, 2017)

Lu, born in 1961 in Shanghai, experienced the Chinese Cultural Revolution from ages 5 to 15. Due to his parent’s persecution, he was sent to his grandfather's home in the small town of Jiangsu. There was no water, electricity, or even meat. He was malnourished, weak and had poor eyesight. Therefore, he failed to get a job at a shipyard. However, at the age of 19, he was admitted to Fudan University, majoring in Computer Science. From then on, he embarked on a long and brilliant career model: computer research and development.

Satya Nadella (Source: WikiMedia Commons)

Six years after Lu’s birth, Nadella was born in Hyderabad, a small city located in central India. Nadella’s father served as a senior government official during and after the British Raj. As a child, the only thing Nadella showed interest in was Cricket. This shaped his philosophy and leadership style in later life. It taught him how to motivate team members, coordinate teamwork, establish a corresponding company culture, and sense changes in the business horizon.

Hyderabad Public School, Nadella’s secondary school, produced many influential business people, such as Adobe CEO Shantanu Narayen and MasterCard CEO Ajay Sinh Bangal; though Nadella described it as a “small, out-of-the-way” school. HPS was honored as India’s best Standalone Senior Secondary school, though it wasn’t known to push academics, Nadella developed his interest in computers, and began to think about software, engineering and PC popularization at age of 15. Despite this, he never considered himself to be the smartest child. He graduated from the University of Wisconsin Milwaukee (UWM) with a graduate degree in Computer Science in 1990, however, he didn’t make it into the Indian Institute of Technology (IIT), the best engineering university in the country.

In the same year, Lu met Professor Edmond Clard, a Turing award winner and professor at CMU. He then came to the U.S. and received his Ph.D. degree in Computer Science in 1996.

According to the statistics, mainland Chinese and Indian educational paths diverge to an extent that 28% of Indians choose an MBA while only 7.2% of Chinese make the same choice. While most people ended their academic journey with either an MBA or a Master’s degree, 28.6% of mainland Chinese (nearly three times the Indian Proportion) chose to pursue doctoral degrees. The results reveal that Indians pay more attention to business and management, while the Chinese focus on research and technology. In 1996, it just so happened that Lu received his Ph.D. while Nadella received his MBA.

Comparison of Highest Degree Received Between Chinese & Indian in Silicon Valley

Influenced by Marxism, Lu dreamed of becoming a philosopher during his childhood. He believed that only philosophers were capable of solving the most pressing problems in the world. However, he chose Computer Science instead due to financial reasons. The course of his life was shaped by the societal pressures and norms of his young adult years. But in terms of leadership traits, Lu combined traditional Chinese literati with those of Silicon Valley tech engineers: reserved, elegant, never flaunt, positive, low-profile and proven by action.

Unlike most Indians, Nadella is not particularly religious. He believes we shall all be free and we should be evaluated based on what we have accomplished, not what we have owned. Nadella generated three principles from his cricketing days that helped shape his business and leadership outlook. The first principle is to compete vigorously and with passion in the face of uncertainty and intimidation. The second is to put your team first, ahead of your personal goals. The third one is to use your leadership to bring out the best in everyone.

These early lessons shaped the styles of our two leaders: Lu emphasizes inner cultivation, while Nadella emphasizes competition, teamwork and leadership.

2. Professional Development

Qi Lu at Microsoft Build (Source: Microsoft)

Lu has had an impressive career. Two years after joining IBM, Yahoo invited him to lead the department of Search and Advertising. In 2006, Lu was promoted to Senior Vice President, in charge of Search engine development, and was finally named Executive Vice President after 2008.

Nadella went to work six years earlier than Lu. He joined Sun Microsystems right after his Master’s degree in Computer Science at the University of Wisconsin in Milwaukee in 1990. After 2 years, he joined Microsoft when he worked on the development of Windows NT. He then finished his part-time MBA program within two years. During the week he flew all over the country to meet with customers and clients. During weekends he took high-level finance classes to build a comprehensive understanding of business and management. Later he joined the department of a Video-on-demand service located at Xerox PARC, the famed Silicon Valley center for innovation.

Satya Nadella. (Source:  Heisenberg Media, Flickr)

In 2008 Nadella was nominated by Microsoft CEO Steve Ballmer as the director of the online search and advertising department, which is now known as Bing.

Since then, Lu and Nadella have collaborated on numerous projects. In 2008, Nadella, Steve Ballmer, and the head of Microsoft's artificial intelligence division Shen Xiangyang invited Lu to join their team; Nadella agreed to report to Lu on related matters. After Lu joined Microsoft, he changed their three-year product cycle, and elevated it to a three-month update. Since then, Bing's search engine market share has grown from less than 8% to more than 20% in the space of eight years. Moreover, several AI based technologies such as Xiaoice have been developed, which laid a solid technical foundation for Microsoft’s AI projects today.

When Nadella’s young, a book called “Young Men and Fire” left him a deep impression, especially the story that a forest fire killed thirteen parachuting firefighters. He learned the importance of building the shared context, trust, and credibility with the team. While Lu led the Bing search group, Nadella led the server units (where Windows Server was developed) which later led to the development of Azure.

3. Leading for Change: Peak

Qi Lu at Baidu World Event, Las Vegas, 2018 (Source: Tony Peng, Synced)

In 2016, Lu announced his departure from Microsoft after three years as Executive VP of its Applications and Services Group. He joined Baidu a few months later and served as Chief Operating Officer, focusing on Baidu's transition to an AI company.

Lu is deeply self-disciplined and has a reputation as an extraordinarily hard worker. He always valued his ability to understand the product code, meaning that nothing faulty could slip past him. After joining Baidu, he began to pay more attention to both the products and markets.

Lu's management style focused on “Pacesetting”. He would set an example and then encourage his team to follow and assess it. His charisma and diligence was greatly admired by the engineers who worked alongside him.

Bill Gates (left),  Satya Nadella (center), and Steve Ballmer (right). Source: Microsoft

During Nadella’s 25-year career at Microsoft, his leadership in the cloud services business was well recognized by the company’s board of directors. In 2014, Nadella was appointed as the CEO a 30-year-old technology company, while Microsoft was facing various challenges in the mobile, cloud and AI industry.

At that moment, Nadella realized that Microsoft reached a bottleneck and its employees suffered from burnout - Microsoft must find its soul and reshape its culture. He advocated a “growth mindset" as opposed to a “fixed mindset.” He believes that independent thinking and innovation is the key to a successful a cultural change. He always looks for three leadership traits: the ability to create clarity, spark energy, and forge a passage to success.

Nadella wants Microsoft to create more value for society. He even broke a decades-old rivalry between Apple and Microsoft by boldly announcing that Office would support Apple's platform, and worked with Apple to make Microsoft Office and enterprise service products more widely available to their users.

Unlike Lu's departure from Baidu in 2018, Nadella's transformation of Microsoft in the past 5 years is undoubtedly successful. Under Nadella's leadership, Microsoft's market value leapfrogged from over 270 billion dollars to more than 800 billion dollars - a stunning increase for such a short time frame - making it the most valuable public company.

Microsoft's market capitalization

4. Lu vs. Nadella: Differences in Leadership Styles

Lu stated four of his personal beliefs during a conversation with Y-Combinator:

1. Learn every day. View yourself as a piece of software that doesn’t live the same day twice

2. Speak truthfully. Keep your word and acknowledge mistakes

3. Be frugal. There’s always a better way to use your resources.

4. Work Ethics. Commit fully to your work.

No wonder he’s the best representation of a successful and highly sought-after CEO.  

The question is: compared to Nadella, a leader that’s known for instigating change, how did Lu differentiate himself?

8 steps to lead to change (Source: John Kooter, kotterinc.com)

John P. Kotter, a Professor of Leadership at Harvard Business School suggests an 8 step model for carrying out change: Create a sense of urgency, build a guiding coalition, form a strategic vision, enlist a volunteer team, enable action by removing barriers, generate short-term wins, sustain acceleration, and institute change.

As Lu emphasizes more on technical management and execution, Nadella has more advantages in cultural remodeling, establishing values, discovering consensus and strategically building a team for change. Lu believed in self-improvement and became the so-called "internal saint and external king". He used his strong understanding and execution power to push for change. However, without the allies around to stand up for him, it is hard to promote and execute change.

The Definition of Leadership

1. Four Levels of Leadership

Four Levels of Leadership

From my perspective, there are four levels of leadership:

  • Lead yourself: Intelligence and self-discipline will generally cultivate stronger abilities, however it takes a long time to learn and master.
  • Lead others: This stage requires specific communication skills in order to convey your opinions effectively and efficiently.
  • Lead for change: For a company in crisis, change is vital. It is difficult to change your team, so a powerful leader is of great significance! Revolutionary leaders need strong charisma, crisis management skills, political skills, and high quality decision-making.
  • Lead for results: The best company leader is someone who can achieve operating results in a wide range and on a high level. The ideal leader is required to be determined and strong willed with a team full of trust.

Although a target-oriented leader is the highest goal of leadership, the process to achieve it is full of changes that require powerful political ability. From the Chinese engineers' point of view, the word ‘politics’ is often regarded as a negative term.  However, politics is inevitable. On We need to make use of politics to achieve positive goals, to integrate members with the same target, and to promote values. Politics requires you to take everyone's needs into consideration, which is a skill every leader needs to acquire!

From this perspective, Nadella is not only a good revolutionary leader for change but also for results. As for Lu, leading for results is his strength, but he is not so good at reforming a complex organization, or forming a forceful and united team.

2. Mindset of A Leader: Handling Things vs Handling People

Most Chinese people who come to America start from an academic background. They are typically science oriented, paying more attention to theory, process, data, and logic.

However, when we enter the workplace, we realize that we need to communicate with others. Apart from communications between engineers with a similar academic background, we found that dealing with different personalities is more like an art. We need to understand each other's personality, preferred style of communication and even value.

When handling people you need to understand how to inspire them. Your ability and creativity will achieve the best results only when your motivation is highly aligned with the goal of your organization. If your team is formed with such talent, no one can stop you!

Leadership Development: Three Steps

1. Start with more frequent and positive communication

The Chinese believe in Lao Zi’s philosophy: “The one who knows doesn’t speak, the one speaks doesn’t know”, however, this proverb can be problematic. Chinese are often cautious in raising opinions and questions at meetings; at a party they won’t greet a stranger easily, during a crisis we do not dare to take initiative. As it is well known by Chen Sheng and Wu Guang “Nobody was born as a prince, baron, general or minister”. They became leaders not because they were nominated, but because they helped and influenced others on a daily basis. So, when they culminated, thousands of people responded.

I have talked to many engineers here who’d like to be a leader or entrepreneur. I often ask them how great their charisma is and how well they are at influencing others. These are at the root of a startup’s success. Without a team who trust and follow you, your chances of success are greatly reduced. Asian Indians in Silicon Valley are a group who communicate most frequently in a most positive way, such as Vinod Khosla‎, who founded the well-known VC Kholsa Ventures after he sold Sun Microsystem. They invest actively, train and cultivate more Indian entrepreneurs, becoming the backbone of Silicon Valley in a short period of time.

Instead of complaining, we are supposed to speak out actively, to reach out courageously and to act as well as to take responsibility. The spirit: “People with wisdom also dare to be the first” is shaped by our 5000-year history and culture; it is the essence of leadership.

2. From Technical Leader To Business Leader

In addition to courage, what we need next is wisdom and abilities. The most difficult breakthrough for Chinese and other foreign entrepreneurs who work in the US is to a gain promotion from a technical leader to a business leader. If you can’t pull yourself out of the practical issues and gain a voice at the strategic level, it’s hard to become a C-suite level leader. From my perspective, efforts should be made in the following three aspects to achieve such an ultimate transformation:

  • Understand Business: Know the business context behind your job. No matter how detailed your work is, you should try to understand the business from the highest level of the company and find out just how important it is. If you were the CEO, how would you define and implement the strategy for your product? This helps to understand the organization’s DNA.
  • Know your customer: try working closely with your customers. The only reason an enterprise should exist is to solve problems for its customers/users. Sorely focusing on technology deployment might result in mis-targeting the market and mis-defining the product. Working with the client will train your business acumen and market sensitivity, helping you to become a qualified business leader.
  • Consistent goals: try to understand the company’s strategic goals and align your personal goals with it. What your leader and CEO believes is important. Nadella’s success depends largely on his success in leading cloud services, which is the foundation and future of Microsoft as we know it. Therefore, he’s always ready to be the CEO.

3. Focus on developing communication skills and impact

While making a good transition from technical leader to business leader, communication skills and influence need to be elevated too. David Rubenstein, the co-founder of the Carlyle Group said, laid out several specific abilities which he sees as paramount.

Chinese engineers in the U.S. usually perform well on the first ability– doing things right. Fewer people can attain the other abilities. That’s the ultimate reason why we see so few Chinese leaders today. While you are getting things done, try to transfer your idea to colleagues, partners, and clients using clear language, allowing you to form close allies. This skill is highly sought after among aspiring leaders.

With 5000 years of culture and history, Laozi, Confucius, Zhuang Zi and so on, the ideas of those sages are deeply branded in our minds. When we are in a completely different western culture, we should learn and socialize more actively with an inclusive mindset. That’s the only way to improve. The lessons from Chineses history should never be ignored, instead they should be integrated with the mindsets prevalent in other areas.  

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