Satya Nadella: This Is How I'm Really Going To Change Microsoft's Culture

On Monday, Microsoft CEO Satya Nadella was asked to explain in better detail the massive manifesto memo that he sent to employees last week.

And he did.

"We have a lot of work to do. We have 90% of PC [market] share and 14% of total device share. We get that," he said on stage at the Fortune Brainstorm conference.

But before he can execute some kind of grand new strategy, he's got change Microsoft's culture. He even quoted the famous Peter Drucker saying, "culture eats strategy."

Nadella explained, "We need places where we innovate and we need renewal is in the core. When I think of our challenge today ... the core priority is renewal of mainstream work [processes]. Let's take what we are good at and rethink it. That's not a side project. That is the very company itself."

So what's he doing to renew the very core of Microsoft?

For one thing, he's making all the teams share their software code. That's a drastic change from Microsoft's usual way in which people "hold" and "protect" their own projects, as Nadella described it.

He calls that change making Microsoft go "open source internally" meaning anyone at the company (not outside of it) can see anyone else's project and use code as needed.

And he wants more employees to contribute to outside open source projects as well, such as the big-data project developed by Yahoo called Hadoop. Hadoop allows companies to manage loads of data and has become very popular with enterprises.

That's a really interesting shift for Microsoft which has had a long love/hate relationship with the very idea of open source, at times threatening to sue users and creators of open source projects over patents.

Nadella also wants Microsoft to "embrace things boldly" and change the the way we work, the nature of work itself." For example, he says at the company everyone knows what a developer does and what a product manager does. But those roles need an overhaul, and that's what he meant in his memo when he said "nothing is off the table."

Such change is a tall order because Microsoft is an extremely successful company, he says, and employees tend to cling to Employees have to learn how to "throw out all of that" and embrace change.

After he spoke, news broke that Microsoft is planning layoffs.