Phil Spencer tells Xbox home truths at DICE: “The product we’d built wasn’t meeting the expectations of our customers”

In an unusual act of corporate reflection and honesty, Phil Spencer gave a long and heartfelt speech at the DICE 2018 Summit in Las vegas. About just how bad things were when he first came in to head up Xbox and the progress they’ve made over the last four years, Eurogamer reported.

"Morale had hit a low, we were all massively frustrated we kept missing big trends. In some ways, it felt like real innovation was impossible. And the in-fighting and fiefdoms were so famous, people made fun of it. Which would have been funny, if it hadn’t been so true."

"It was obvious Microsoft needed a reboot," Spencer declared.

Thinking back to the early days in the job, Spencer said: "The team was in a world of pain, we hadn’t done our best work with the announcement of the Xbox One, the product we’d built wasn’t meeting the expectations of our customers, market share [was] taking a nosedive and it was painful to read all the headlines." Which is nothing we didn’t know but still intriguing to hear from Xbox’s leader.

He went on: "Most importantly, the [Xbox] team thought that the leadership team had gone totally tone deaf about what our customers were demanding from us. I knew I had to do more than just communicate our strategy to our customers, I had to win back our team’s trust."

Spencer then explains how they disclosed confidential information to thousands of the team, and was rewarded with their trust: "the amazing thing is word didn’t leak. Not one tweet, not one forum post. That was a significant milestone in our journey to rebuild trust between the leaders and the team. It was about empathy, and addressing their worries and trusting them first."

And when it came to talk to customers as well, it completely revamped its approach, and doubled-down on its inclusivity policies – also noting the infamous GDC 2016 party at which scantily-clad dancers appeared:

"Everything is changing – the way we relate to each other, to our partners and even to our competitors. The way we build teams, the way we build projects, the way we commit – every single day – to making Microsoft a safe and inclusive place for all."

"This was and is a deliberate, 100,000 person strong undertaking to craft the most innovative, the most representative and the most effective culture we possibly can so we can do the best work we can. This isn’t culture for culture’s sake, it’s culture for collective impact.

"Cultural transformation is hard and demanding work. Four years into it, it’s still sometimes incredibly slow and incredibly painful to get everyone on board, much less to admit your own biases. Four years into it, it still requires a growth mindset – a commitment to keep listening, keep learning, since cultural change is always ongoing."

"I think the biggest tension comes down to this: do we solve this the best we can right now, or work forever for the best solution? Did we figure this out? I think we’re learning how to figure this out. I believe cultural success is an ongoing journey, because every success, every failure help discern the best of who we are. We keep at this cultural transformation because we know it enables our best work, that work is needed now, because we’re here to here to empower all people and all organisations around the world to achieve more.

"It’s our personal and corporate commitment to people of all genders, all abilities, all ethnicities and all geographies. It’s our belief in what human ingenuity can build and accomplish – it’s our quest.

"When we make mistakes and bump and collide into each other, the easy thing is to retreat – even deny there’s a problem. Instead, we have to be humble. We have to be active learners, read, educate ourselves and learn about other people’s journeys, and read some more. and then, better informed, we commit to leading with deliberate purpose. It’s something I know I have to work on every single day."

Original reporting from Eurogamer and video from IGN.

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