How NetApp CEO George Kurian Turns Disruption into Opportunity

The prevailing philosophy is companies are great for one era and then that era concludes and they essentially become the walking dead. The most important thing that you've got to get the organization through is that when the model of the world around you changes, it's an opportunity, not a threat.

Thank you so much for having me, Dave. It's good to meet you and good to speak with you.

My life's journey, of which my professional journey is a part, was shaped by my early mentors, of course my parents and my teachers, from whom I learned the importance of personal discipline and accountability and the values that I hold with regard to my professional career. It began when I was at college, where I worked to pay my way through college, both undergraduate school and business school, and I worked a lot. I worked about 35 to 40 hours a week, and it taught me the importance of time management, of teamwork, of team management, and the first steps into kind of leadership.

I learned at Oracle the importance of customer empathy. You could build a lot of technology solutions and products, but if you didn't build them with the soul of the customer and their challenge that you're trying to help them address, you would miss the mark. And then at McKinsey, I learned the importance of very quickly understanding what was most important in a particular situation and then aligning the organization to work together to address that. And all of those experiences have helped me in my journey to be here at NetApp.

It's a great question. I think in our industry, especially when things move fast, we look at three or four things. The first is you've got to decide what the strategic relevance is of a particular disruption or a trend or a request from a client to our business. And if it's not relevant, you need to be clear about why it's not relevant, right? And then if it is relevant, even if it's difficult for our business to absorb, if it's the right long-term thing for our clients, you've got to lean into it. I think with regard to uncertainty, what we look at is: is it truly uncertain what the outcome is, or is there a point in time where it becomes more clear? For example, if there is legislation or regulation, you wait for a degree of clarity on that. And sometimes the most important thing is not to do something. You just want to wait, right? And then there's also no-regrets moves that you can make regardless of what the outcome is to move the ball down the field. And so we have a portfolio of techniques we use to decide under uncertainty what's the right path forward. And then I think the two other steps are: one is that the hardest thing is when you have to say no. And I think for the CEO that is the most important responsibility, that you have to be able to say no to things that teams have worked on, or no to things that teams want to start to work on. And I think there the most important thing is not to spin it, right, to be authentic, to be able to connect with people. I've had those situations where I've worked on something for a long time and it hasn't come to fruition, and to be able to connect emotionally with what people feel like. And I think the more authentic you are and the more clear you can be in terms of explaining why you had to make that decision, the more people can understand it.

It's one of the hardest questions, and I think in the tech industry the prevailing philosophy is companies are great for one era and then that era concludes and they essentially become the walking dead, right? They can still be profitable, but they're not part of the future. When I joined NetApp, it was important to me that my children went to Quaker school, and one of the things I learned from the Quakers was the importance of stewardship and the importance of being able to curate what was once beautiful and renew it for the future. And so I thought I'd bring that to our organization. We were dominant and really great at one era, and then things had changed. And I think the two or three important things that we had to grapple with were: one, we knew cloud computing was really important to our clients and they wanted to use the cloud. The second was we had to really understand our role in the cloud. Many of our competitors decided that the cloud providers were their enemies or that they were going to build a complete cloud stack to compete with them. And we were very disciplined about how we thought about our relevance. We said, 'Hey, we are going to deliver our software on the cloud to serve our clients.' And so we decided to partner with the big cloud providers. And because we were really the best in the world at a specific set of things, they chose to partner with us. And then I think the most important thing that you've got to get the organization through is that when the model of the world around you changes, it's an opportunity, not a threat. Right? I think people in organizations that have been super successful in one era have their ego, their personal identities tied up with that era, and you've got to coax people through it. And I think there is a freedom and a sense of liberation and this youthfulness that the new era creates that you can embrace. And so those are all the things that we had to do.

Yeah, it's a discussion we have with our clients and also internally at NetApp every single day. I think the first and most important thing is that AI transformation of businesses and society is really about leadership and values, right? It really is a leadership challenge. And so when you start with thinking about it that way, the technology becomes an enabler, but you really got to think about your strategy as a fundamental part of it. You need to think about whether AI fundamentally transforms the industry value chain and disrupts your own business. And so that has implications for how you think about AI, or whether AI changes how work gets done in your organization, or both, and multiple other aspects of it. And so the first thing that you need to think about is you cannot really say AI changes everything in the business. That's an easy strategic position to take. But the reality is to accomplish transformation, you need to pick one or two big ideas, right? Maybe it is, 'I'm going to help build products and solutions that help our customers use AI effectively,' or 'I'm going to transform one or two big functions, the way the work gets done, so that I can learn and be empathetic to how customers apply AI in my ability to serve them.' Right? So those could be two pivots. I think the second is you need to be able to set up the operating model that allows you to experiment, learn, and move fast. And there you generally say you've got to have a functional stakeholder as the sponsor. You've got to have a center of excellence so that you can experiment with technologies, get compliance and governance to move fast. And then two other important elements, right? One is the reason data is really important is models hallucinate if they don't understand the context of your business, if you don't have them use curated data that your business provides. And if they don't have that special training on your data, they can make big mistakes in the recommendations they make or the actions they take. So that's really important. And then associated with that, you've got to be sure that you've got the right controls around your data. Right? These models are able to exploit vulnerabilities not because of their own sort of sense of agency, but really because the humans that have built those models have not put the right sandboxes and guardrails around them. And so we work with our clients on both: how do you get your data organized and curated so that the models don't hallucinate, and how do we help as part of a multi-layer framework to govern and control access to your data?

That's exactly right.