Operational Scalability: Microsoft’s Marcus Fontoura On How To Set Up Systems, Procedures, And People To Prepare A Business To Scale
An Interview with Yitzi Weiner
Cultivate a high-performance team. Throughout my career, I’ve witnessed the focus that big techs place on recruiting the best talent for each area and experienced in real life how this strategy boosts the business. In companies like IBM, Yahoo, Google, and Microsoft, executives in the highest positions are personally involved in attracting and hiring the best people.
In today’s fast-paced business environment, scalability is not just a buzzword; it’s a necessity. Entrepreneurs often get trapped in the daily grind of running their businesses, neglecting to put in place the systems, procedures, and people needed for sustainable growth. Without this foundation, companies hit bottlenecks, suffer inefficiencies, and face the risk of stalling or failing. This series aims to delve deep into the intricacies of operational scalability. How do you set up a framework that can adapt to growing customer demands? What are the crucial procedures that can streamline business operations? How do you build a team that can take on increasing responsibilities while maintaining a high standard of performance?
In this interview series, we are talking to CEOs, Founders, Operations Managers Consultants, Academics, Tech leaders & HR professionals, who share lessons from their experience about “How To Set Up Systems, Procedures, And People To Prepare A Business To Scale”. As part of this series, we had the pleasure of interviewing Marcus Fontoura.
Marcus Fontoura has spent more than 20 years in big tech companies and has been at the forefront of industry-shaping technology innovations, from computational advertising to cloud computing to fintech. He is a Technical Fellow at Microsoft, where he works on cloud computing infrastructure. His new book, A Platform Mindset: Building a Culture of Collaboration (8080 Books, Feb. 2025), shares how companies can expand and scale processes to bring about competitive advantages. Learn more at fontoura.org.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your backstory and how you got started?
I was born in Rio de Janeiro, Brazil. I moved to the US for grad school with the intention of moving back, but I never did. After grad school I worked for more than 20 years in several big tech companies in the Bay Area and Seattle, including, IBM, Google, Yahoo, and Microsoft. After many years in the US, I finally realized my dream of working for a Brazilian company. I worked as CTO for StoneCo, one of the leading payment providers in Brazil. I’m now back at Microsoft, working on Azure.
It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When I started I thought I was a great developer and I could do everything on my own. I didn’t understand the value of collaboration. I was super arrogant. One of my managers once told me, “You think you’re such a great dev that you can fix everything in a single weekend.” I quickly realized that to do anything at scale you need to collaborate. All relevant work we need to do to impact the world demands teamwork. That became so important to me that even the title of my book has the word collaboration in it.
What do you think makes your company stand out? Can you share a story?
Microsoft has always been a great company with fantastic people. Since Satya Nadella became CEO, he focused quite a bit on the cultural transformation of the company. By adopting Carol Dwek’s concept of growth mindset as one of its main pillars, the company became a lot more collaborative. This impacted not only the work environment but also enabled a lot of important innovations. Microsoft has a lot of impact on the world and is on the forefront of the AI revolution because of the cultural transformation Satya started 10 years ago.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
The first one is that I’m technical. I spent most of my career as an individual contributor, remaining close to technology — writing and reviewing code, evaluating technical directions, and studying how the field is evolving. Satya Nadella often says that he wants his technologists to be able to “see around the corner.” It’s only possible to do that if you have a very good understanding of your domain of expertise. A lot of times, early-in-career folks switch to management too soon. I feel that’s a mistake. The first few years of your career are the formative ones. You should learn as much as you can and strive to work on challenging projects that will stretch your technical abilities.
The second one is being willing to take risks. The single most important contributing factor for anyone’s careers is their ability to select impactful projects to work on. There are a lot of very talented professionals I’ve worked with over the years that are perfectly happy to work on bread-and-butter projects, making incremental contributions. While this may be a good formula for a stress-free life and may be enough to allow you to have a nice life with a stable paycheck, it won’t move your career forward. Only by working on projects that make a difference to your organization, and to the world, can you achieve the success you want and deserve.
The third one is being collaborative. Having a growth mindset and working well with your colleagues is crucial for your success in any organization. As I mentioned before, the only way forward is impact. And impact is only possible with teamwork.
Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.
The late Google engineer Luiz Andre Barroso, one of the pioneers of cloud computing and datacenter architecture, used to say that there are two types of decisions. The 45–55% type and the 10–90% type. In the 45–55% case, one direction is slightly better than the other, but both solutions are roughly equivalents. In the 10–90% case, on the other hand, one solution is drastically better. Luiz claimed that, as leaders, we shouldn’t stress too much about the first type, and we should focus our energy on the 10–90% to avoid possible catastrophes. Spending too much time debating a 45–55% solution decreases agility without too many benefits.
One of the first projects I worked on was a novel database algorithm. I was at IBM at the time. A colleague, Vanja Josifovski, who is now the CEO and founder of Kumo.AI, had an idea of how to use streaming to process queries more efficiently. It was a novel technique at the time and our managers were skeptical of the approach. We believed in the idea and built the prototype without management support. We were successful and the project got funded. In retrospect we were very bold. It was a 10–90% decision. The idea was very far-fetched. My early success in this project gave me the confidence to be bold and deeply impacted my career.
Thank you for all that. Let’s now turn to the main focus of our discussion about Operational Scalability. In order to make sure that we’re all on the same page, let’s begin with a simple definition. What does Operational Scalability mean to you?
It means to solve a problem in a repeatable and systematic way. It’s more than automation. It’s about finding the right abstractions so that the solution that used to be cumbersome becomes simple. Before the invention of search engines, it used to be hard to be able to survey a field of research. Search engines solved this in a scalable way, introducing new abstractions, such as the search box and the search results page.
Which types of business can most benefit from investing in Operational Scalability?
I’m a big believer that, especially now with the popularity of AI, every business is a technology business, and every business leader must think about scalability as a first principle. Human resources processes scale with the number of employees; sales processes scale with the number of clients; operations processes scale with the number of suppliers; legal processes scale with the number of employees, clients, and offices. And logistics problems scale with the number of headquarters, clients, and employees. Many aspects take on a large scale as a company grows, and to meet this inexorable demand the people in leadership roles must turn their minds to building an integrated technology area. It shouldn’t be news to anyone that, in today’s world, technology is a way of creating efficiencies in almost every process in manufacturing, industry, commerce, or services.
Why is it so important for a business to invest time, energy, and resources into Operational Scalability?
Think of what usually happens when there is a lot of simultaneous access to a free product distribution website or mandatory registration on the last day of the deadline (or if you are a Swiftie and want concert tickets). If the system isn’t built with this kind of scale in mind, it will inevitably crash.
A poorly designed system can mean anything — from lost purchases in a jewelry store because the cards didn’t go through to a patient’s data not being accessible to hospital staff or millions in losses if the breakdown is widespread in a banking or retail platform. The proper coordination of technology in a public or private institution, be it tiny or huge, is vital in our world.
In contrast, what happens to a business that does not invest time, energy, and resources into Operational Scalability?
It’s all too common for organizations to perpetuate a disorganized process of managing technology, which tends to generate major losses over time — economic, technical, and human resources. This is even more common in companies that have grown too fast by using technical improvisation, also known as hacks, or unsustainable solutions built in-house or acquired from other companies.
Growing companies behave as if they were in a race against their competitors to get up to speed, meet deadlines, and launch products and services. This doesn’t allow them to plan for the long term, and this lack of strategic thinking often puts their survival at stake.
In a technology environment without specific and well-thought-out management, there’s no room for optimizing existing procedures and little chance of creative and innovative ideas that could represent a real competitive leap for the company. Larry Page, founder and former CEO of Google, used to say that we often need radical changes rather than incremental ones. That’s only possible if we intentionally think about innovation.
To avoid cycles that risk the very existence of the business, it would be ideal for the company to understand its momentum and expansion potential and invest in technology management at early stages — in the same way, for example, that it may decide to bring in a human resources management professional when the number of employees exceeds a certain threshold.
Can you please share a story from your experience about how a business grew dramatically when they worked on their Operational Scalability?
Cloud computing is a great example. I originally joined the Microsoft Azure team about 10 years ago. Since then we’ve grown multiple times in every dimension. It’s a business of scale. Gains come from being able to efficiently design datacenters, hardware, and software. With the right abstractions we can provide a service that’s both cheaper and better for our customers when compared to maintaining servers on their own.
Here is the primary question of our discussion. Based on your experience and success, what are the “Five Most Important Things a Business Leader Should Do to Set Up Systems, Procedures, and People to Prepare a Business to Scale”? If you can, please share a story or an example for each.
1. Cultivate a high-performance team
Throughout my career, I’ve witnessed the focus that big techs place on recruiting the best talent for each area and experienced in real life how this strategy boosts the business. In companies like IBM, Yahoo, Google, and Microsoft, executives in the highest positions are personally involved in attracting and hiring the best people.
In addition to hiring, and to developing people’s abilities and managing their careers in a structured way, it’s essential to enable the engineering team to function as a high-performance team. Having the right people assigned to projects that motivate them and align with their skills creates tremendous value for the company. I often joke that a team of exceptional people, whether hired from outside or developed in-house, makes the engineering leader’s job very easy. The problem is that a team of exceptional people is difficult to build and maintain.
2. Invest in innovation
When I joined Yahoo, I was one of the first employees of the research department built and led by Prabhakar Raghavan, currently senior vice president of engineering at Google. Prabhakar said that our job as a research team was to transform Yahoo’s culture into one in which scientific thinking prevailed. In practice, this involved not only growing our team from the ground up to encompass hundreds of researchers in a few years, but also the way we interacted with the rest of the company.
One of the earliest projects that helped us establish the importance of thinking scientifically about projects happened a few weeks after I joined the company. The search team faced the issue of “index size” — at that time, search engines advertised how many web pages they had in their index, and the competition was fierce amongst Yahoo, Google, and everyone else. The outside world didn’t necessarily believe in the numbers advertised by the search engines and wanted to estimate their index size independently. We worked on the problem and developed a rigorous method that enabled outside teams to do this evaluation and later published the algorithms and the method in a scientific paper.
With this success story and others that followed, after a while the leaders of the other areas wanted to involve our department in their projects, so we gained ground and became crucial for the company. There was a clear value being created. The company became a place where scientific thinking prevailed, not because of a decree by the CEO but because of the quality of the systems we’d built and how they integrated with the rest of the company’s systems. In other words, their bet on people working more exploratory and with freedom to create ended up paying off in several areas, including products and services that we didn’t even know would become very successful later.
3. Invest in engineering systems
Many senior managers don’t understand the importance engineering tools have in facilitating collaboration between developers and between teams. They consider the day-to-day processes — the programming languages used, the testing environments, the validation system — just minor issues that need neither investment nor planning due to the huge range of tools available on the market and to the variety of internal processes that each team creates to execute their own projects.
One of the aspects that shaped Google’s work culture almost from the start was its investment in engineering tools. These tools were built to make life easier for developers who had at their fingertips everything they needed to write, test, and deploy new code into production. There was no need for so many processes between people because the tools themselves simplified actions and no one wasted time thinking about how to perform tasks in the engineering lifecycle.
The engineering tools were so standardized that there was only one way to put the code into production, and this approach dictated the collaboration strategy. One of the main elements of this system was the existence of a common repository that brought together all the company’s code. What’s more: it was indexed. Every time someone wrote code it became searchable by keywords. Afterall, it would be very strange if Google didn’t have a good search system for its code. Programming languages were also standardized and, while I worked there, basically only two programming languages were used by the whole company.
A very senior engineer friend of mine once said to me: “Marcus, when you told me how easy it was to work collaboratively at Google, I thought I understood. But it wasn’t until I went there and tried their tools that I realized what a huge difference they make.” People don’t understand how much productivity improvement these tools give developers and how they enable collaboration.
4. Be prepared to handle incidents
If the CEO of any company announces publicly that they’re going to bring in a new CTO to finally put an end to incidents, I must warn you right away that they’ll be spending money on hiring for nothing because that’s an unrealistic expectation that even the best CTO in Silicon Valley wouldn’t be able to live up to it. And I’ll go further: not only are incidents bound to happen, but they’re also welcome to a certain extent. Those who never had to face incidents won’t be prepared to deal with them when they inevitably arise. That doesn’t mean, however, that you should sit back and wait for them to happen. You must work actively to prevent them and contain their consequences.
It’s imperative to have teams well equipped to deal with incidents, as well as automated tools and processes to minimize them and clear leadership guidelines so that they are, in the end, learning opportunities in the present and drivers of structuring actions in the short-, medium-, and long-term. It’s also important to create a work environment in which everyone can feel safe to make mistakes (and admit to them), and can be comfortable to carry out their tasks with the responsibility and boldness needed to innovate. I like to call this “fearless execution.”
No one should be reprimanded just for having been involved in an incident. A good CTO, then, is the one who establishes a culture that values collaborative work and plans a system of technical checks and balances to deal with incidents — not the one who promises to put an end to them.
5. Create a great work environment
I’ll never forget the poster that hung on the wall of our search infrastructure team’s work area at Google when I was there. It said: “Searching the web for fun and profit.” It conveyed exactly what was happening there and the joy I felt from working in an environment with well-rewarded employees, using the best platforms available at the time, and working on very exciting new technologies. Most importantly, people enjoyed their work while at the same time making a huge positive impact on the company. And it wasn’t just at Google where I experienced this. Throughout my career I always have had the feeling that there was no better job for me at that time.
When I became a manager at Microsoft and was able to work to influence the working environment of the teams, my goal was for people to feel the same way. I can’t force people to think they’re working in the best place. I can actively work to make it happen. While I have no direct control over the mood of the shareholders or a lever to the number of clients the company attracts monthly, what I do control is hiring the right people, organizing the team, innovating, reducing “technical debt,” building scalable platforms, and dealing with incidents — all of which contribute to better products.
I’ve succeeded in my goals when I see that employees feel well rewarded, work with good tools, develop innovative technology, and have fun doing it. It may seem intangible, but you can feel the pulse of people daily. The leader needs to notice these signals and know where to act to correct the course of action. The environment may be excellent but the development tools are terrible; the platforms may be great but the people aren’t well rewarded, resulting in high turnover rates. If the culture isn’t collaborative, that’s what the leader needs to focus on. Or, it may be that the platforms aren’t scalable and this should be the main point of attention.
What are some common misconceptions businesses have about scaling? Can you please explain?
Scaling is not automation. No one changes the game by building a faster wagon when they could be concentrating on building a car. Think about e-books. They solve the book supply-chain problem not by automation or optimization. E-books completely change the game. You can download the book instantly. Moreover, you have added functionality, as for example, users can see comments and highlights from other readers. It’s a completely novel approach to the problem.
How do you keep your team motivated during periods of rapid growth or change?
Motivation comes from the feeling that we’re solving relevant problems that are impacting the world. I invest a lot of my time thinking about this — is my team solving the most important problem? How can we push the boundaries even more?
Can you please give us your favorite “Life Lesson Quote?” Can you share how it’s relevant to you in your life?
My parents always believed my sister and I could do anything. They were always very supportive. Knowing that they always had my back was very important to me. So I guess my mantra is “Believe in yourself and do great things.”
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I’m investing a lot of my time developing the new generation of tech leaders. That’s why I wrote A Platform Mindset, and why I invest so much time speaking to students and early-in-career employees. I think technology can be used to solve the world’s most important and complex problems, but we need good leaders and good engineers. That’s my movement.
How can our readers further follow your work online?
I’m very active on LinkedIn. I publish articles frequently on the site and share my conferences or speaking engagements.
Thank you so much for sharing these important insights. We wish you continued success and good health!
Operational Scalability: Microsoft’s Marcus Fontoura On How To Set Up Systems, Procedures, And… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.