The following is a conversation with Ginni Rometty who was a longtime CEO, president and chairman of IBM and for many years she was widely considered to be one of the most powerful women in the world. She's the author of a new book on power, leadership and her life story called Good Power coming out on March 7th. She is an incredible leader and human being both fearless and compassionate. It was a huge honor and pleasure for me to sit down and have this chat with her. And now a quick few second mention of each sponsor. Check them out in the description. It's the best way to support this podcast. We got Athletic Greens for health, ExpressVPN for privacy and security and InsideTracker for biological monitoring. Choose wisely, my friends. Also, if you want to work with our team, we're always hiring. Go to lexfridman.com/hiring. And now on to the full ad reads. As always, no ads in the middle. I try to make this interesting, but if you skip them, please still check our sponsors. I enjoy their stuff. Maybe you will, too.
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This is the Lex Fridman podcast. To support it, please check out our sponsors in the description. And now, dear friends, here's Ginni Rometty.
You worked at IBM for over 40 years starting as a systems engineer and you ran the company as chairman, president, CEO from 2011 to 2020. IBM is one of the largest tech companies in the world with maybe you can correct me on this with about 280,000 employees. What are the biggest challenges running the company of that size? Let's start with a sort of big overview question.
The biggest challenges I think are not in running them, it's in changing them and that idea to know what you should change and what you should not change. Actually people don't always ask that question what should endure even if it has to be modernized but what should endure and then I found the hardest part was changing how work got done at such a big company.
What was the parts that you thought should endure, the core of the company that was beautiful and powerful and could persist through time, that should persist through time?
I'd be interested, do you have a perception of what you think it would be?
Do I have a perception? Well, I'm a romantic for a history of long-running companies. So there's kind of a tradition as an AI person. To me, IBM has some epic sort of research accomplishments. Where you show off, you know, Deep Blue and Watson. Just impressive big moonshot challenges and accomplishing those. But that's I think that's probably a small part of what IBM is. It's that's mostly like the sexy public facing part, right?
Yeah. No. Well, certainly the research part itself, right, is over 3,000. So, it's not that small. That's a pretty big research group. But the part that should endure ends up being, you know, company that does things that are essential to the world, meaning the who we, you know, think back, you said you're romantic. It was the 30s the social security system. It was putting the man on the moon. It was, you know, to this day, banks don't run, you know, railroads don't run. That is at its core it's doing mission critical work. And so that part I think is at its core it's a business-to-business company and at its core it's about doing things that are really important to the world becoming running and being better. Running the infrastructure of the world so doing it at scale doing it reliably. Yes, secure in this world that's like everything and in fact when I started I almost felt people were looking for what that was and together we sort of in a word was to be essential. And the reason I loved that word was I can't call myself essential. You have to determine I am. Right. So it was to be essential even though some of what we did is exactly what you said. It's below the surface. So many people cuz people say to me, well what does IBM do now, right? And over the years it's changed so much and today it's really a software and consulting company. Consulting is a third of it and the software is all hybrid cloud and AI. That would not have been true as you well know back even two decades ago right so it changes but I think at its core it's that be essential. You said moonshot can't all be moonshots cuz moonshots don't always work but mission critical work.
So given the size though when you started running it did you feel the sort of thing that people usually associate with size which is bureaucracy and maybe the aspect of size that hinder progress or hinder pivoting. Did you feel that?
You would for lots of reasons. I think when you're a big company sometimes people think of process as the client themselves or the you know I always say to people your process is not your customer there is a real customer here that you exist for and that's really easy to fall into because there you know people are a master to this process and that's not right and when you're big the other thing and boy there's a premium on it is speed right that in our industry you got to fast and go back like when I took over and it was 2012, you know, we had a lot of catching up to do and a lot of things to do and it was moving so fast and as you well know all those trends were happening at once which made them go even faster and so pretty unprecedented actually for that many trends to be at one time and I used to say to people go faster go faster go faster and honestly I tired them out I mean it kind of dawned on me that when you're that big.
Yeah. That's a really valuable lesson.
And it taught me like the how's perhaps more important than the what because if I didn't do something to change how work was done like change those processes or you know give them new tools help them with skills they couldn't they'll just like do the same thing faster. If someone tells you, you know, you got hiking boots and they're like, 'No, go run a marathon.' You're like, 'I can't do it in those boots.' But so, you've got to do something. And at first, I think the ways for big companies, I would call them like blunt clubs. You do what everyone does. You reduce layers because if you reduce layers, decisions go faster. There's just it's math. If there's less decision points, things go faster. You do the blunt club thing. And then after that though, it did lead me down a, you know, a long journey of they sound like buzzwords, but if you really do them at scale, they're hard around things like agile. And because you've really got to change the way work gets done. And we ended up training god hundreds of thousands of people on that stuff.
On how to do it correctly. That's right. versus because everybody talks about it but the idea that you would really have small multi-disciplinary teams work from the outside in set those sort of interim steps you know take the feedback pivot and then do it on not just products do it on lots of things was it's a hard to do at scale people always say oh I got this agile group over here of 40 people but not when you're a couple hundred thousand people you got to get a lot of people to work that way.
The blunt club thing you're talking about so flatten the organization as much as possible.
Yeah, yeah. I probably reduce the layers of management by half. And so it that does that has lots of benefits, right? Time to a decision. More autonomy to people cuz and then the idea of like faster clarity of where you're going because you're not just filtered through so many different layers. And I think it's the kind of thing a lot of companies if you're big have to just keep going through. It's kind of like grass grows, you know, it just comes back and you got to go back down and work on it. So, it's a natural thing. But I hear so many people talk about it, Lex. This idea of like, okay, well, who makes a decision? You've often heard nobody can say yes and everybody can say no. And that's actually what you're trying to get out of a system like that.
So, I mean, your book in general, the way you lead is very much about we and us, you know, the power of we, but is there times when a leader has to step in and be almost autocratic, take control, and make hard unpopular decisions? Oh, I am sure you know the answer to that. And it is of course fun to hear you say.
Fun to say it. Yeah. You know, because I actually a there's a leader for a time, but then there's a leader for a situation, right? And so I've had to do plenty of unpopular things. I think anytime you have to run a company that endures a century and has to endure another century, you will do unpopular things. You have no choice. And I often felt I had to sacrifice things for the long term. And whether that would have been, you know, really difficult things like, you know, job changes or reductions or whether it would be things like, hey, you know, we're going to change the way we do our semiconductors and a whole different philosophy. You have no choice. I mean, and in times of crisis as well, you got to be I always said it's not a popularity contest. So that's none of these jobs are popularity contest. I don't care if your company's got one person or a half a million. They're not popularity contests.
But psychologically is it difficult to sort of step in as a new CEO and to because you're fighting against tradition against all these people that act like experts of their thing and they are experts of their thing to step in and say we have to do differently.
When you got to change a company, it's really tempting to say throw everything else out back to that what must endure, right? But I know when I took over to start, I knew how much had to change. More I got into it, I could see, wow, a lot more had to change, right? Cuz we needed a platform. We'd always done our best when we had a platform, a technology platform. You will go back in time and you'll think of the mainframe systems, you'll think of the PC, you'll think of perhaps middleware, you know, you could even call services a platform. We needed a platform, the next platform here to be there. Skills. When I took over, if I we inventoried who had modern skills for the future, it was two out of 10 people for the future. Not that they didn't have relevant skills today, but for the future. Two out of 10. Yikes. That's a big problem, right? The speed at which things were getting done that has to so you got so much to do and you say, is that a scary thing? Yes. Do you have to sometimes dictate? Yes. But I did find and it is worth it. I know every big company I know my good friend that runs General Motors as she's had to change go back to what is them you know and when you do that that back to be essential we kind of started with hey it's be essential then the next thing I did with the team was say okay now this means new era of computing new buyers are out there and we better have new skills okay now the next thing how do you operationalize it and it just takes some time but you can engineer that and get people to build belief.
And for the skills that means hiring and it means training.
Yes. Yeah. Oh boy that's a long skills is a really long topic in and of itself. I try to put my view in it. I learned a lot and I changed my view on this a lot. I'll go back at my very beginning say 40 years ago. I would have said at that point okay I was always in a hurry. I was interviewing to hire people. I don't know how you hire people. 40 years ago, I'd be like, 'Okay, I got to fit in these interviews. I got to hire someone to get this done.' Okay. Then time would go on. I'm like, 'Oh, that's not very good.' In fact, someone once said to me, 'Hey, hire the best people to work for you and your job gets a lot easier.' Okay. I should spend more time on this topic and spend more time on it. Then it was like, 'Okay, hire experts.' Okay. Hired a lot of experts over my life. And then I was really like an epiphany, and it really happened over my tenure running the company, having to change skills. If someone's an expert at something and has just done that for 30 years, the odds of them really wanting to change a lot are pretty low. And when you're in a really dynamic industry, that's a problem. And so, okay, that was like kind of my first revelation on this. And then when I looked to hiring, I can remember when I started my job, we needed cyber people. And I go out there and I look, unemployment in the US was almost 10%. Can't find them. Okay, it's 10% and I can't find the people. Okay, what's the issue? Okay, they're not teaching the right things. That led me down a path and it was serendipity that I happened to do a review of social corporate social responsibility. We had this one little fledgling school in a low-income area and high school with a community college. We gave them internships, direction on curriculum. Lo and behold, we could hire these kids. I said, 'Hm, this is not CSR.' Like, I just found a new talent pool. Which takes me to now what I'm doing in my post, you know, post-retirement. I'm like this idea that don't hire just for a college degree. We had 99% of our hires were college and PhDs and I'm all for it.
So you're very don't don't I'm deeply offended.
No, you should not be. And I and I, you know, I'm vice chair at Northwestern, one of the vice chair, but I said I just really like aptitude does not equal access. These people didn't have access, but they had aptitude. It changed my whole view to skills first. And so now for hiring, that's kind of a long story to tell you. The number one thing I would hire for now is somebody's willingness to learn. You know, you can test, you can try different ways, but their curiosity and willingness to learn, hands down, I will take that trait over anything else they have.
So the interview process, the question, everything changed.
The kind of things you talk to them about is try to get at how curious they are about the world, testing. I mean there's we triangulated around it lots of ways and now look there at the heart of it what it would do is change you don't think of buying skills you think of building skills. And when you think that way with so many people and I think this country many developed countries being disenfranchised you got to bring them back into the workforce somehow and they got to get some kind of contemporary skills and if you took that approach you can bring them back into the workforce.
Yeah, I think some interesting combination of humility and passion because like you said experts sometimes lack humility if they call themselves an expert for a few too many years. So you have to have that beginner's mind and a passion to be able to aggressively constantly be a beginner at everything and learn and learn and learn.
You know, I saw it firsthand when we were beginning this path, you know, down the cloud and AI and we said and people would say, 'Oh, IBM, you know, it's existential. They got to change and all these things.' And I did hire a lot of people from outside. Very willing to learn new things. Come on in. Come on in. And I sometimes say, 'Shiny objects, trained in shiny objects. Come on in.' But I saw something. It was another one of these. You're not a shiny object. I'm not saying that. But I learned something. Okay, some of them did fantastic and others they're like, 'Well, let me school you on everything,' but they didn't realize like we did really mission critical work and they'd break a bank. I mean, they would not understand the certain kind of security and the auditability and everything they had to go on. And then I watched IBM people say, 'Oh, I actually could learn something.' Some were like, 'Yeah, okay. I don't know how to do that's a really good thing. I could learn.' And in the end, there was not like one group was a winner and one was a loser. The winners were the people who were willing to learn from each other. I mean, it was to me it was very stark example of that point and I saw it firsthand. So that's why I'm so committed to this idea about skills first and that's how people should be hired, promoted, paid, you name it.
Yeah. The AI in general, it seems like nobody really understands now what the future will look like. We're all trying to figure it out. So like what you know IBM will look like in 50 years in relation to the software business to AI is unknown. What Google will look like what all these companies were trying to figure it out and that means constantly learning taking risks all of those things and nobody's really skilled in AI because you have right that's right couldn't agree more with you on that. You wrote in the book so speaking of hiring, quote, 'My drive for perfection often meant I only focused on what needed to change without acknowledging the positive. This could keep people from trusting themselves, it could take me a while to learn that just because I could point something out didn't mean I should. I still spotted errors, but I became more deliberate about what I mentioned and sent back to get fixed. I also tried to curtail my tendency to micromanage and let people execute. I had to stop assuming my way was the best or only way. I was learning that giving other people control builds their confidence and that constantly trying to control people destroys it.' So what's the right balance between showing the way and helping people find the way?
That is a good question because like a really flip answer would be as it gets bigger you have no choice but to just you know you can't do it you have to you have to tell or show I mean you've got to let people find their way cuz it's so big you can't right that's an obvious answer scope of work bigger it gets okay I've got to let more stuff go. But I have always believed that a leader's job is to do as well. And I think there's like a few areas that are really important that you always do. Now it doesn't meaning you're showing. So like when it has to do with values and value based decisions like I think it's really important to constantly show people that you walk your talk on that kind of thing is super important and I actually think it's a struggle young companies have because those values aren't deeply rooted and when a storm comes it's easy to uproot and so I always felt like when it was that time I showed it I got taught that so young as at IBM and in General Motors that in fact I write I do write about that in the book. First time I was a manager, I had a gentleman telling dirty jokes and not to me but to other people and it really offended people and some of the women and this is the very early '80s and they came said something I talked to my boss I'm a first-time manager and he was unequivocal with what I should do. He said and this was a top performer it stops immediately or you fire him. So there are a few areas like that that I actually think you have to always continue to role model and show, right? That to me isn't the kind that like when do you let go of stuff, right? So values and relationships with clients. Yeah. Whatever you're in service of and the other thing was I really felt it was really important to role model learning, right? So, you know, I can remember when we started down the journey and we went on to this thing called the Think Academy. IBM's longtime motto had been Think. And we said, 'Okay, I'm going to make the first Friday of every month compulsory education.' And okay, I mean everybody, like everybody, I don't care what your job is, okay? When the whole company has to transform, everybody's got to get kind of have some skin in this game and understand it. I taught the first hour of every month for four years now.
Nice. Okay. I had to learn something. So, but it made me learn, but I've like Okay, if I can teach this, you can do it, right? I mean, you know, kind of thing. So, it was a compulsory Thursday night education for you.
Oh, a little bit. I'm a little bit better prepared than that. But yes, you're so right. Yes. Yes.
So, like personality habit you like to prepare.
Yeah. But his roots in that go back deeply, deeply, deeply, deeply. I think it's an interesting reason. So, why do why are you you're a preparer, my friend? Yeah. Yes, you are. You prepare for your interviews?
But that's okay. I mean, you don't have to prepare everything. I don't prepare everything either.
No, but I unfortunately wing stuff. I save it till last minute. I push everything. I'm always almost late, and I don't know why that is. I mean, there's some deep psychological thing we should probably investigate, but it's probably the anxiety brings out the performance.
That can be that's very true with some people. I mean, so I'm a programmer engineer at heart and so programmers famously underestimate how long that something's going to take and so I just everything I always underestimate and it's almost as if I want to feel this chaos of anxiety of a deadline or something like this otherwise I'll be lazy sitting on a beach with a pina colada and relaxing.
I don't know. So that we have to know ourselves but for you you like to prepare.
Yeah, it came from a few different places. I mean one would have been as a kid I think I was not a memorizer and my brother is brilliant he can he read it once boom done and so I always wanted to understand like how something happened didn't matter what it was I was doing whether it was algebra theorems I always wanted don't give me the answer don't give me the answer you know I want to figure it out figure so I could reproduce it again and didn't have to memorize so it started with that and then over time okay so I was in university in the 70s when I was in engineering school. I was the only woman, you know, I meet people still to this day and they're like, 'Oh, I remember you.' I'm like, 'Yeah, sorry I don't remember you. There were 30 of you wanted me.' And I think you already get that feeling of, 'Okay, I better really study hard cuz whatever I say is going to be remembered in this class, good or bad.' And it started there. So, in some ways, I did it for two reasons. Early on, I think it was a shield for confidence. The more I studied, the more prepared I was, the more confident. That's probably still true to this day. The second reason I did it evolved over time and became different to prepare. If I was really prepared, then when we're in the moment, I can really listen to you. See, cuz I don't have to be doing all this stuff on the fly in my head. And I could actually take things I know and maybe help the situation. So, it really became a way that I could be present in the moment. And I think that's something a lot of people that in the moment I learned it from my husband. He doesn't prepare, by the way, at all. So, that's not it. But I watch the in the moment, the negative example. No, no, no. He and I'm not going to change that. As he says, he's a type C. I'm an A. Okay. That's how love works. Yeah. And I have been married 43 years and that seems to work. So, but that idea that you could be in the moment with people is a really important thing.
Yeah. So the preparation gives you the freedom to really be present. So just to linger on the you mentioned your brother and it seems like in the book that you really had to work hard when you studied to sort of given that you weren't good at memorization you really truly deeply wanted to understand the stuff and you put in the hard work and that seems to persist throughout your career. So you know hard work is often associated with sort of has negative associations maybe with burnout with dissatisfaction. Is there some aspect of hard work at the core of who you are that led to happiness for you? Did you enjoy it?
I enjoyed it. So I will be the first and I'm really careful to say that to people because I don't think everyone should associate gee to do what you did you have to there's only one route there, right? And that's just not true. And I do it because I like it. In fact, I'm careful. And as time goes on, you have to be careful as more and more people watch you. Whether you like it, you're a role model or not, you are a role model for people. Whether you know it, like it, want it, does not matter. I learned that the hard way. And I would have to say people, hey, just cuz I do this does not mean I do it for these reasons, right? And so be really explicit. And I'd come to believe usually when people say the word power, I don't know. Do you have a positive or negative notion when I say the word power? We just do it.
Probably negative one. Yeah. for some stereotype or some view that that it's somebody's abused it in some way. You can read the newspaper, somebody's doing something. Personal people like I'll ask people, 'Do you want power?' And they're like, 'Oh, no. I'd rather do good.' Yeah.
And I think the irony is you need power to do good. And so that sort of led me down to and it as I thought about my own life, right? cuz it starts in a like many of us, you know, you don't have a lot, but you don't know that cuz you're like everybody else around you at that time. And on one end, tragedy, right? My father leaves my mother homeless, no money, no food, nothing, four kids. She's never worked a day in her life outside of a home. And the irony of that here I would end up as the ninth CEO of one of America's iconic companies. And now I co-chair this group 110. And that journey I said the biggest thing I learned was you could do really hard meaningful things in a positive way. So now you ask me about why do I work so hard I ended up writing the book in three pieces for this reason. When you really think of your life and power I thought it kind of fell like a pebble in water like there's a ring about you really care about yourself and like the power of yourself power of me. There's a time it transcends to that you are working with and for others and another moment when it becomes like about society. So my hard work I'd ask you one day sit really hard and think about when you close your eyes who do you see from your early life right and what did you learn and maybe it's not that hard for you. I mean it was it's funny the things then if I really looked at it it's no surprise what I do today and that hard work part my great grandma as you and I were comparing notes on Russia right and never spoke English spoke Russian came here to this country was a cleaning person at the Wrigley building in Chicago yet if she hadn't saved every dime she made my mother wouldn't have a home and wouldn't have had car right what did I learn from that hard work. In fact, actually, she when I went to college, she's like, 'You know, you really should be on a farm. You're so big and strong.' You know, that was her view. And then my grandmother, another tragic life. What did she do though? And think how long that's in the 40s, the 50s. She made lampshades and she taught me how to sew, right? So I could sew clothes when we couldn't afford them. But my memory of my grandma is working seven days a week sewing lampshades. And then here comes my mom in her situation who climbs her way out of it. So I associate that with well strong women by the way all strong women. And I associate hard work with how you are sure you can always take care of yourself. And so I think that the roots go way back there. And they were always teaching something, right? My great-grandma was teaching me how to cook, how to work a farm even though I didn't need to be on a farm. My grandma taught me, you know, here's how to sew, here's how to run a business. And then my mother would teach us that look, with just a little bit of education, look at the difference it could make, right? So anyways, that's a long answer to I think that hard work thing is really deeply rooted from that background.
It gives you a way out from hard times.
Yeah. You know, I think I've seen you on other podcasts say, I thought I did. Do you want a plan B?
Didn't you say no? You would not like a plan B?
Yeah. I don't because you're like I would prefer my back up against am I remembering a story like that.
You seem to like at least certain moments in your life seem to do well in desperate times.
True enough. I True enough. That's true. I learned that very well. But I also think that maybe this isn't the same kind of plan B. I think of it as like I was taught like always be able to take care of yourself. Don't have to rely on someone else. Sure. And I think that to me, so that's my plan B. I can take care of myself. And it's even after what I lived through with my father, I thought, well, this set a bar for bad after this. Nothing's bad. And it's a very freeing thought.
The being able to take care of yourself is that you mean practically or do you mean just a self-belief that I'll figure it out?
I'll figure it out and practically both. Right. So, you wrote, quote, I vividly remember the last two weeks of my freshman year when I only had 25 cents left. I put the quarter in a clear plastic box on my desk and just stared at it. This is it, I thought. No more money. So, do you think there's some aspect of that financial stress, even desperation, just being hungry? Did that play a role in that drive that led to your success to be the CEO of one of the great companies ever?
It's a really interesting question because I was just talking to another colleague who was CEO of another great American company this weekend and he mentioned to me about all this adversity and he said or I said to him I said do you think part of your success is cuz you had bad stuff happen? Yeah. And he said yes. you know, and so I guess I'd be lying if I didn't say I don't think you have to have tragedy, but it does teach you like one really important thing is that there is always a way forward always and it's in your control.
And I think there's probably wisdom for mentorship there or whether you're a parent or a mentor that easy times don't result in growth.
Yeah. I've heard a lot of my friends and they worry they said, 'Gee, my kids have never had bad times.' Yeah. And so what you know what happens here. So I don't know is it required and why you end up not required but it sure doesn't hurt.
You had this good line about advice you were given that growth and comfort never coexist. Growth and comfort never coexist. And you have to get used to that thought. If someone said it, they think of me like one of the more profound sort of lessons I had. And the irony it's from my husband and which is even more you know funny actually.
You could just steal it. I mean you don't have to have shamelessly. He'll as he'll tell you. Okay. So, the story behind growth and comfort never coexist, but honestly, I think it's been a really freeing thought for me and it's helped me immensely since mid-career. And as I write about it in the book, I'm mid-career and I've been running a pretty big business actually. And the fellow I work for is going to get a new job. He's going to get promoted. He calls me and he says, 'Hey, you're going to get my job. I really want you to have it.' And I said to him, 'No way.' I said, 'I'm not ready for that job. I got a lot more things I got to learn. That is like a huge job around the world, every product line, development, you name it, every function. I can't do it.' He looked at me, he says, 'Well, I think you should go to the interview.' I went to the interview the next day, blah blah blah. Guy says to me, looks at me and he says, 'I want to offer you that job.' And I said, 'I would like to think about it.' I said, 'I want to go home and talk to my husband about it.' kind of looked at me. Okay. I went home. My husband is sitting there and he says to me, I went on and on about the story, etc. And he says, 'Do you think a man would have answered it that way?' And I said, he says, 'I know you.' He's like, '6 months you're going to be bored.' And you all you can think of is what you don't know. And he said, 'And I know these other people. You have way more skill than them and they think they could do it.' And he's like, 'Why? Why?' And for me, it internalized this feeling that and it I'm going to say something that's a bit stereotype that it resonates with many, many women and I'll ask you if it does after is that they're the most harsh critic of themselves. And so this idea that I won't grow unless I can feel uncomfortable. Doesn't mean I always have to show it by the way. So that's why I meant growth and comfort can never coexist. So I got I was like he's exactly right. Now the end of that story is I went in and I took the job when I went back to the man who was really my mentor looking out for me and he looked at me and he said don't ever do that again and I said I understand because it was okay to be uncomfortable I didn't have to use I mean now I would take stock of the things I can do right and really think or I look for times to be uncomfortable because I know if I am nervous like I don't know if you're nervous to meet me we never met in real life.
No, you're not. But then you're means you're learning something, right?
So, well, I also that to me matters. I think it's interesting the maybe you could speak to that the sort of the self-critical thing inside your brain cuz I think sometimes it's talked about that women have that. But I have that definitely and I think that's not just solely property of women in the workplace. But I also want to sort of push back on the idea that that's a bad thing that you should silence cuz I think that anxiety that leads to growth also that's like this discomfort. So there's this weird balance you have to have between that self-critical engine and confidence.
Yeah, I think that's a good point.
You have to kind of dance cuz if you're super confident, people will value you higher. That's important. But if you're way too confident, maybe in the short term you'll gain, but in the long term you won't grow.
Very good point. I So I can't really disagree with that. And to me even when I took on jobs I always felt people say well is it you know at what point are you confident enough and I came to sort of believe again a theme of my beliefs that if I was willing to ask lots of questions and understood enough that's all I needed to know.
Let me ask you about your husband a little bit. So you write in the book. It's just jumping around. Like I said I'm a bit of a romantic. So how did you meet your husband?
So, I met my husband when I was 19 years old. So, I was a young kid. And I met him when I had a General Motors scholarship. So, I was at Northwestern University through my first two years. Had a lot of loans, financial aid, and a professor said, 'Hey, you should sign up for this interview. They're looking to bring forward diverse candidates through their management track.' Now, these programs don't exist anymore like that. They will pay your tuition, your room and board, your expenses. Northwestern, other Ivy League school, these very expensive schools, and I think you'd be a good fit. I am eternally thankful for that advice. I went in, I interviewed, I actually got the scholarship. I mean, without it, I'd have graduated with hundreds of thousands of dollars of debt. So part of that was in the summer I had to work in Detroit. I lived in a little room by a cement plant. Not theirs, but I
I mean that's all I could afford.
Very, very romantic. And the person who owned the house said, you know, 'Hey, I'm having a party. You're not invited. I'm going to fix you up with someone tonight.' [laughter] And that turned out to be my husband. And so it was a blind date is how we very first met.
And then it was over. It was the story was written.
Let's, if it's okay, just zoom out to you mentioned power and good power a few times. So if we can just even talk about it. Your book is called Good Power: Leading Positive Change in Our Lives, Work, and World. What is good power? What's the essence of good power?
So the essence of it would be doing something hard or meaningful but in a positive way. I would also tell you I hope one day I'm remembered for how I did things, not just for what I did. I think that could almost be more important and I think it's a choice we can all make. So the essence to me of good power, if I had a contrast, good to bad let's say, would be that first off you have to embrace and navigate tension. This is the world we live in. And by embracing tension, not running from it, you would bridge divides that unites people, not divides them. It's a hard thing to do but you can do it. You do it with respect, which is the opposite of fear. A lot of people think the way to get things done is fear. And then the third thing would be you got to celebrate some progress versus perfection because I also think that's what stops a lot of things from happening because you know if you go for whatever your definition of perfect is, it can, it's either polarization or paralyzation. I mean something happens in there versus no, no, I can, if I don't worry about getting to that actual exact end point. If I keep taking a step forward of progress, really tough stuff can get done. And so my view of that is like honestly I hope it can, you know, I said it's like a memoir with purpose. I'm only doing it. It was a really hard thing for me to do because I don't actually talk about all these things and I had to, nobody cares about your like scientific description of this. They want the stories and your life to bring it alive. So it's a memoir with purpose and in the writing of it became the power of me, the power of we, and the power of us. The idea that you build a foundation when you're young, mostly from my work life, the power of we, which says I kind of in retrospect could see five principles on how to really drive change that were to be done in a good way and then eventually you could scale that, the power really of us, which is what I'm doing about finding better jobs for more people now that I co-chair an organization called 110. So that essence of navigate tensions, do it respectfully, celebrate progress, and give me, indulge me one more minute. These sort of, again, it's retrospect that I didn't know this in the moment. I had to learn it. I learned it. I am blessed by a lot of people I worked with and around and but some of the principles like the first one is says if you're going to do something, change something, do something, you got to be in service of something. Being in service of is really different than serving. Super different. And like I just had my knee replaced and I interviewed all these doctors. You can tell the difference of the guy who's going to do a surgery. Hey, my surgery's fine. I really don't care whether you can walk and do the stuff you wanted to do again, but because my surgery's fine. Your hardware is good.
I actually had some trouble. And I had a doctor who was like, you know, this doesn't sound right. I'm coming to you. Like, the surgery was fine. It was me that was reacting wrong to it. And he didn't care until I could walk again. Okay, there's a big difference in those two things. And it's true in any business you have. A waiter serves you food. Okay, he served his food. He did his job. Or did he care? He had a good time. So that thought to be in service of, it took me a while to get that, like to try to write it to get that across because I think it's like so fundamental. If people were really in service of something, you got to believe that if I fulfill your needs at the end of the day, mine will be fulfilled. And that is that essence that makes it so different. And then the second part, second principle is about building belief, which is I got to hope you'll voluntarily believe in a new future or some alternate reality. And you will use your discretionary energy versus me ordering you. You'll get so much more done. Then the third, change and endure. We kind of talked about that earlier. Focus more on the how and the skills. And then the part on good tech and being resilient. So anyways, I just felt that like good tech, everybody's a tech company. I don't care what you do today. And there's some fundamental things you got to do. In fact, pick up today's any newspaper, right? ChatGPT. You're an AI guy.
All right. I believe one of the tenets of good tech is it's like responsibility for the long term. It says so if you're gonna invent something, you better look at its upside and its downside. Like we did quantum computing. Great. A lot of great stuff, right? Materials development, risk management, calculations, endless lists one day. On the other side, it can break encryption. That's a bad thing. So we worked equally hard on all the algorithms that would sustain quantum. I think with chat, okay great, there's equal in there are people working on it but like okay the things that say hey I can tell this was written with that, right? Because the implications on how people learn, right? If this is not a great thing if all it does is do your homework, that is not the idea of homework [laughter] as someone who liked to study so hard but anyways you get my point it's just the upside and the downside.
And that there could be a much larger applications that are much more difficult to predict and it's our responsibility absolutely to really work hard to figure that. I was talking AI ethics a decade ago and I'm like why won't anybody listen to us, you know? And it's that's another one of those values things that you realize hey if I'm going to bring technology in the world I better bring it safely, right? And that to me comes with when you're an older company that's been around you realize that society gave you a license to operate and it can take it away and we see that happen to companies and therefore you're like okay like why I feel so strong about skills, hey if I'm going to bring in, it's going to create all these new jobs, job dislocation, then I should help on trying to help people get new skills. Anyways, that's a long answer to what good tech, but the idea that there's kind of in retrospect a set of principles you could look at and maybe learn something from my sort of rocky road through there.
But it started with the power of we and there's that big leap I think that propagates through the things you're saying, which is the leap from focusing on yourself to the focusing on others. So that having that empathy, you've said at some point in our lives and careers our attention turns from ourselves to others. We still have our own goals but we recognize that our actions affect many, that it is impossible to achieve anything truly meaningful alone. So it's to you, I think maybe you can correct me, but ultimate good power is about collaboration and maybe in a large conference like delegation on great teams.
The ultimate good power is actually doing something for society. That would be my ultimate definition of good results of the thing.
Yeah. But how it's done, right? The how it's done. And so, you know, when you said a leap, do you think people make a leap when they go from thinking about themselves to others? Do you think it's a leap or do you think it kind of just is a sort of slow point?
I think the leap is in deciding that this is a, it's like deciding that you will care about others, that this is, it's like a leap of going to the gym for the first time. It takes a long time to develop that and to actually care. But the decision that I'm going to actually care about other human beings.
Yeah. I think or at least like, yeah. It just feels like a deliberate action you take of empathy.
Yeah. Because sometimes I think it happens a little, it's maybe not as deliberate. Yeah. It is a little bit more gradual because it might happen because you realize that geez I can't get this done alone. So I got to have other people with me. Well, how do I get them to help me do something? So I think it does happen a little bit more gradually. And as you get more confident, you start to not think so much that it's about you and you start to think about this other thing you're trying to accomplish. And so that's why I felt it was a little more gradual. I also felt like I can remember so well, you know, this idea that again now we're in the 80s, 90s, I'm a woman. I'm in technology and I was down in Australia at a conference and I gave this great speech, again me, power of me, you know, I'm thinking I give this great speech, financial services, this guy walks up to me after, I think he's going to like ask me some great question and he said to me I wish my daughter could have been here. And in that moment, and at that point up to then I'd always been about look please don't notice I'm a woman, do not notice that I am, I just want to be recognized for my work, but crossing over from me to we, like it or not, I was a role model for some number of people and maybe I didn't want to be, but that didn't really matter. So, I could either accept that and embrace it or not. I think it's a good example of that transition. I did have a little epiphany with that happening and then I'm like, okay, because I would always be like, no, I won't go on to a women's conference. I won't talk here. I won't, you know, no, no, no. But then I sort of realized wait a second, you know that old saying you cannot be what you cannot see and I said to myself oh wait a second okay I am in these positions I have a responsibility to and it's to others and that's what I meant I felt like it can be somewhat gradual that you come and you may have these like pivotal moments that you see it but then you feel it and you sort of move over that transom into the power of we.
You're one of the most powerful tech leaders ever. And as you mentioned the word power, you know, the old saying goes, power corrupts and absolute power corrupts absolutely. Was there an aspect of power that was that you had to resist its ability to corrupt your mind to sort of delude you into thinking you're smarter than you are, that kind of all the ways?
That's very dangerous. I agree with, I mean I think you got to be careful who you surround yourself with, that's how I would answer that question, right? And people who will hold the mirror up to you can be done in a very positive way by the way, doesn't mean, you know, but that we're sycophants, you cannot have that, right? I mean it's like I always say to someone like, hey listen to me, tell me what would make me better or do something, or I have a husband that will do that for me quite easily by the way, he'll always tell me. He's the one that kind of criticism I have. I have been surrounded myself with a number of people that will do that and I think you have to have that. I had a woman that worked with me for a very long time and at one time we were competitors and then at some point she started to work for me and stayed with me for quite a way and she was one of the few people that would tell me the truth and you know sometimes I'm like enough already and she'd be like do not roll your eyes at this and you absolutely have got to have that. And I think it also comes, it'll go back to my complete commitment to inclusion and diversity because you got to have that variety around you. You'll get a better product and a better answer at the end of the day. And so that to resist that allure I think it's around about who you surround yourself with. I current politics would say that too.
So you write about and in general you value diversity a lot. So if can you speak to almost like philosophically what does diversity mean to you?
Diversity to me means I'm going to get a better product, a better answer. I value different views and so it's inclusion. So I always say inclusion, diversity is a number. Inclusion is a choice and you can make that choice every single day.
I really believe and I've witnessed it that I've had when my teams are diverse, I get a better answer. My friends are diverse, I have a better life. I mean all these kinds of things. And so I also believe it's like no silver thread. There's no easy way. You have to authentically believe it. I mean, do you authentically believe that diversity is a good thing?
Yeah. But I believe that diversity like broadly, I thought I very broadly define it.
Yeah. So like there's, you know, sometimes the way diversity is looked at with the way diversity is used today is like surface level characteristics which are also important but they're usually reflective of something else which is a diversity of background, a diversity of thought, a diversity of struggle. Some people that grow up middle class versus poor, different countries, different motivations, all of that.
Yeah, it's beautiful when different people from very different walks of life get together. Yeah, it's beautiful to see, but like sometimes it's very difficult to get at that on a sheet of paper of the characteristics that defines the diversity.
I know. So it is, it's like oh I can't hire exactly for or if I'm trying to and but I do know one thing that when people say well I can't find these kind of people I'm looking for I'm like you're just not looking in the right places.
Right, you have to open up like just, you got to really open up new pools, right? You have to think like everybody, you don't have to have a PhD just like you said, yeah.
Sorry to say it, you know, I know, I know it's very valuable but you have, trust me, but well it could just like you said it could even be a negative. So you mentioned like for good power, you were a CEO for a long time of a public company. Were there times when there was pressure to sacrifice what is good for the world for the bottom line in order to do?
Probably there were a lot of times for that. I mean I think every company faces that today in that I always felt like there's so much discussion about stakeholder capitalism, right? Do you just serve a shareholder, do you have multiple? I have always found and I've been very vocal about that topic that and I participated, the business round table wrote up a new purpose statement that had multiple stakeholders. I think it's common sense like if you're going to be 100 years old you only get there because you actually do at some time balance all these different stakeholders in what it is that you and short-term, long-term, all these trade-offs. And I always say people who write about it, they write about it black and white, but I have to live in a gray world. Nothing I have ever done has been in a black and white world. Hardly. Maybe things of values that I had to answer, but most of it is gray. And so, I think back lots of different decisions. I think back, as you would well remember, you're a student of history. IBM was one of the really the originators of the semiconductor industry and certainly of commercializing the semiconductor industry. Great R&D and manufacturing, but it is a game of volume. And so when I came on, we were still manufacturing R&D and manufacturing our own chips. We were losing a lot of money. Yet here we had to fight a war on cloud and AI. And so okay, now shareholders would say fine, shut it down. Okay, those chips also power some of the most important systems that power these the banks of today. If I just shut it down, well, what would that do? And so, okay, the answer wasn't just stop it. The answer wasn't just keep putting money into it. The answer was, and we had to kind of sit in an uncomfortable spot till we found a way. I mean, it's going to sound so basic, but you as an engineer understand it. We had to separate. It was a very integrated process of research, development, and manufacturing. And you'd also, you'd be perfecting things in manufacturing. And these were very high performance chips. We had to be able to separate those. We eventually found a way to do that so that we could take the manufacturing elsewhere and we would maintain the R&D. It's a, I think it's a great example of the question you just asked because there would, people would have applauded, others would have been this was horrible, or we had a financial road map that had been put in place that said I'll make this amount EPS by this date, there came a time we couldn't honor it because we had to invest and so there's a million of these decisions. I think most people that run firms, any size firm, they're just one right after another like that and you're always making that short and long tension of what am I giving up?
What is that partnership like with the clients? Because you work with gigantic businesses and what's it like sort of really forming a great relationship with them, understanding what their needs are, being in service of their service?
Yeah. Very simple. Honor your promises. And that happens over time. I mean in service of, you know, which is often why you could work with competitors because if you are really in service of you and you need something it takes two of us to do it, that becomes easier to do because I really, we both care, you get what you needed. And so I can remember during one of the times I was on a European trip and at the time a lot of, and this is still true about views about technology and national technology giants and global ones and the pros and the, and countries want their own national champions. Quite obvious. I mean, if I'm France or Germany and there was a lot of discussion about security and data and who was getting access to what and I can remember being in one of the, I was with Chancellor Merkel, had met her many times. She's very well prepared, very well prepared every time you would know. And I started to explain all these things about why, how, you know, how we don't share data, how who it belongs to, our systems never had back doors. And she sort of stopped me like you're one of the good guys like stop. Now that wasn't about me personally. She's talking about a company that's acted consistent with values for decades. Right? So to me how you work with those big kind of clients is you honor your promises. You say what you do and you do what you say and you act with values over a long period of time. And that to me, people say we're value, it is not a fluffy thing. It is not a fluffy thing. It is a, I mean if I was starting a company now I'd spend a lot of time on that on, you know, why we do what we do and why some things are tolerable and something, you know, what your fundamental beliefs are and many people sort of zoom past that stage, right? It's okay for a while.
And never sacrifice that.
You would never sacrifice that. I don't think you can.
So there was a lot of pressure when you took over as CEO and there was 22 consecutive quarters of revenue decline between 2012 and the summer of 2017. So it was a stressful time. Maybe not. Maybe you can correct me on that. So as a CEO, what was it like going through that time with the decisions, the tensions in terms of investing versus making a profit?
I always felt that that sense of urgency was so high and even if I was calm on the outside because you have one of the world's largest pensions. So so many people depend on you. You have a huge workforce they're depending on you. You have clients whose businesses don't run if you don't perform etc. And shareholders of course, right? And so but I also am really clear this was perhaps the largest reinvention IBM ever had to undertake. Yes. At a board that understood that. In fact, some people, some of the headlines were like, 'This is existential, right?' I mean, nobody gives you a right to exist forever and there aren't many techs. You're the student of it. They are gone. They are all gone. And so, if we didn't reinvent ourselves, we were going to be extinct. And so now, but you're big and it's like changing, what's that old saying? Can I change the wheels while the train's running or something like that or the engines while the plane's flying? And that's what you have to do. And that took time. And so, you know, Lex, do I wish it would have been faster? Absolutely. But the team worked so hard. And in my, in that time frame, 50% of the portfolio was changed. It's a very large company. And if you would, I also divested 10 billion dollars of businesses. So if you would look at that growth rate without divestitures and currency, which now today everyone talks about currency. Back then we were the only international guy. Net of divestitures and currency the growth was flat. Is flat great? No. But flat for a big transformation, I was really proud of the team for what they did. That is actually pretty miraculous to have made it through that. I have my little nephew one day and he would see on TV occasionally when there would be criticism and he'd say, 'Uh, you know, auntie, doesn't, does that make you mad when they talk mean?'
And I just looked at him and I said, you know, he's like, 'How do you feel?' I realized look I'm doing what has to be done and I happened to be the one there and if you have great conviction and I did, I had great conviction, I knew it was the right thing, I knew it would be needed for IBM to live its second century and so and my successor, they have picked up, gone forward. I mean you go back, we did the acquisition of Red Hat. I mean we had to find our way on cloud, right? We were late to it so we had to find our way and eventually that led us to hybrid cloud. We had did a lot of work with Red Hat back in 2017. Oh, we'd always done a lot of work with them. Actually, were one of the first investors when they were first formed. But that was 2018, you know, it took quite a hit for even, you know, oh, it was the largest to then software acquisition ever, but it is the foundation, right, of what is our hybrid cloud play today and doing very, very well. So, but I had to take short-term hit for that, right? Short-term hit for a very large $34 billion acquisition. But it was for all of us it was the right thing to do. So I think when you get really centered on, you know, it's the right thing to do, you just keep going, right?
