Elevate New Mexico Welcomes Meg Whitman

Well, first of all, thank you for having me. I'm delighted to be here. Thanks for being the interviewer and thanks to the team here for having me. So, we do live in, I think, very uncertain times and tumultuous times, at least certainly the most tumultuous in my adult life. And so, I think right now leaders need to have a couple of special characteristics. One is high degrees of integrity and transparency and the ability to communicate. Communication's gotten a lot more complicated in the last 10 or 15 years. It used to be we had networks and newspapers. Now, social media has changed everything about communication. So, I think that's super important. I think the other thing is clarity of purpose and clarity of strategic thinking. What are you all trying to accomplish in this very uncertain time? And then last but not least is the right people in the right job at the right time with the right attitude on your team. I am a big believer of the power of teams. What we can do together, none of us can do alone. And now more than ever, having the right people with different perspectives on the team, I think is critical. And then last but not least, I really feel like leaders need to be uniters, not dividers.

Yeah. So, I would echo someone said that New Mexico has a lot of potential. I think you've all said that for many years. By the way, I'm from out of town. I just arrived in January and so things I say are from the benefit of being here for just six to nine months. But I do think New Mexico has tremendous potential and I would argue a few things. First of all, you have tremendous strengths here. It is a beautiful state. Lower cost of living. You know, the highest number of PhDs per capita of any state in the country. The benefits of Los Alamos, Sandia National Labs, and Kirtland Air Force Base are not to be underestimated. More can be done, I think, in the tech transfer area, but those are real strengths. And you have sovereign wealth fund. You all know you have the second largest sovereign wealth fund in the United States of America. Soon we'll, I think, in the next five or six years, we'll surpass Alaska's. And so thinking about that as a huge opportunity and then anchor industries. Okay so some things are working right, oil and natural gas, you know, funds one-third of the budget here. And so I think those are real strengths to build on. I think there's some challenges and I'm going to come to answer your question in a moment but the challenges I think will inform what the recommendations are. You've got a very concentrated GDP, probably more than most states. Meaning government is 25% of the economy. Mining and oil and natural gas is 10%. Professional businesses and services is a minor piece and then real estate and everything else is quite small. So you're really concentrated GDP.

So I think there's a couple of things that are real opportunities. Now, okay, I'm always believing could we do more of what we do well and let's start there. So, energy is an obvious thing and whether it's quantum or fusion, quantum computing, whether it's fusion, what is the energy that you can use for this next generation of compute. Quantum is going to use a lot of energy. But as you know, artificial intelligence is going to suck energy like we have never seen before. I happen to sit on the board of CoreWeave which is one of the largest providers of AI data centers and the electricity we are going to run out of electricity on the grid and I think New Mexico can stake out we want to be the energy leader. Now you got a bit of an issue around water because water is what cools these data centers but I think that can be solved. The next thing that I would say is the opportunity for economic development in tech. You already have Intel here. Intel is a challenged company right now, but tech of all kinds and it doesn't have to be necessarily, you know, cutting edge tech. It can be all kinds of things that are tech focused. Now, I'm a big believer in tech. I grew up in tech. Tech can employ a lot of people, but you cannot forget the people who are high school educated who are not techies. And so, I think there's a huge opportunity in things like tourism. Tourism should be twice the size here that it is. This is an incredibly beautiful state, but tourism should be twice the size. But tourism won't be twice the size unless you solve the affordable housing problem. And affordable housing, I'm sure all of or most of you have read Abundance. If you could figure out how to do affordable housing here, you could be a leader in the country on what to do and how to solve that problem.

The other thing is, and this will be no surprise, is healthcare, right? You have the opportunity. I think Mike and I were talking earlier, UNM and UNM Health Sciences has incredible potential to be ginormous here and to be a real engine of economic growth. And I often like to tell the story of Alabama in Birmingham, Alabama. Birmingham was a steel town, you might remember. Then steel closed down and they had sort of a long walk through the desert and then the University of Alabama Birmingham became really the second most important medical center in the southeast next to those in Atlanta. And what was amazing about it and I think you all could do this, they basically said we're going to own two or three disciplines in health sciences. They started with cardiology as you might remember and they basically hired the best cardiac surgeons and the best cardiologists in the country. Paid whatever it took to get them to Birmingham, Alabama and then built from there. And I think a big opportunity now is with NIH funding being cut everywhere particularly to the elite northeastern universities. There's a lot of researchers, a lot of health care professionals who are losing their research funding and they will go to where that research funding is. And I think again trying to figure out two or three things that you all could own here and then go get them. They will come. They in New Mexico might not have been on their radar, but I'm telling you academic researchers if they lose two years of momentum and two years of funding, you know this Mike, it's a disaster. And so you have an opportunity I think to use some of that sovereign wealth fund money to bring incredible new disciplines that you all want to own here. And then I think UNM is a powerhouse for economic growth and development. I have two models for that. One is you all know Michael Crow at ASU. Okay. He's like practically the governor of the state. It's kind of amazing what he's done. And so I think that's really quite remarkable. And so thinking about what has ASU done that partly that you and I know that you've been to visit Michael Crow, but don't let that go. He's doing something very special. And then the other person who I think is really remarkable is Daniel Diermeier at Vanderbilt. He has taken that organization that university from kind of not also-ran but okay to great. I mean their admittance rate is 5.3% of the kids who apply. It's like Harvard or something. I mean it's quite remarkable. So those are a few of the things I think. Modernizing agriculture. Agriculture is still an important part of New Mexico. I think there could be more done with the modernization of agriculture. So those are some of my ideas. But I have to say one of the things I'm very focused on or was in my career is focus. Could we please focus on a small number of things and drive them home as opposed to literally solve world hunger? This was very relevant in Kenya because they are actually trying to solve world hunger. But focusing on a small number of things and nailing them and then moving on would be another thing that I think is important as New Mexicans think about what direction you all want to go.

Well, again, I'm from out of town, but my opinion on this is if New Mexico is going to fulfill its full potential as a southwestern powerhouse, which is what I think you can be, you're going to have to have a full-time legislator that's paid well. And you get really good people to come and be a full-time legislator because the amount of work that needs to be done is actually 12 months worth of work, not 60 days, not 30 days. And I think as long as that is a part-time non-paid legislature, I think you're going to have one hand tied behind your back. But let's assume for a moment that that could change and you had the right people with different points of view and different agendas. Then how do you actually get a common relatively shared point of view on what's good for New Mexico? And I used to say, and this sounds a little jaded, but it's not. I used to say you have to focus on the illusion of inclusion. Like you just have to make people feel like they were included. You may have a point of view about what you want to get done, but you've got to make sure that everyone feels like they had input. And input is really important. You know, people at least sometimes if you decide to go another way, at least they feel like you heard them. And so I don't mean to be jaded about it, but sometimes it is a little bit about the illusion of inclusion without losing your true north and what you think is the right thing to do or your leadership team or your organization. So I think I don't know exactly what to do with a part-time legislature that isn't paid. I mean the other problem here is if I can say this is they are paid. They're just paid in a different way. And there is a sort of a corruption aspect here. That might be too strong a word. In Kenya, I was taught to say it's a governance issue. There's a governance issue here because the special interests are actually paying for their campaigns. And who else, who knows what else is actually going on here? And so that's the other reason why I think you've got to have a full-time legislature that is paid well. So that that is their job. And they are doing this for New Mexico, not for their individual interests.

It can be a part-time state if you're happy with the status quo. If you want to do something else and really say, you know, we're going to change this state dramatically in the next 10 to 15 years, then it's not a part-time, it's not a half-time job, it's a full-time job that will take, you know, the power of many to get it done.

I think it's essential. I don't know that you can do it without an anchor institution like University of New Mexico. And the other thing that you're I think really, I mean to be clear about what it is that the state's trying to do. I think in the end this has to be about economic development, growth and jobs, right? You want to be a growth state. Right now it's a pretty flat population growth. Ultimately you want to be growing this GDP at probably somewhere between 6 to 8%. You want to be creating jobs not only jobs at the high end of technology and scientists but as I said before for the high school educated folks who are not necessarily technically oriented. And so I think that the University of New Mexico and frankly I mean in some ways you have an opportunity here. You're going to have a new governor in the fall of next year and you're going to have a new head of the university. And by the way, 1 plus 1, if those two work together really tightly, 1 plus 1 can equal like six because those are two gigantic anchor institutions that can make things happen. The government is a big anchor institution and so is the University of New Mexico. And so if you think of okay, what we want to do here is jobs. I mean, I'm big in metrics. Could we please like have a small number of metrics? I think jobs would be one. And so how do you do that? And I think that one of the things that can be done here and can be done, by the way, I'm on the board of what's called Partnership San Francisco, which is like Bloomberg's Partnership for New York, which is how do you bring back San Francisco that has taken a really five-year walk through the desert with, you know, basically what are the rules, regulations, tax regimes that can make this state the best state to start a new business, to bring business to? How do you make yourself the most competitive state for job creation in the southwest? And that has got to be a combination of the governor's office and the tax regime and regulations as well as University of New Mexico who can weigh in on this and then frankly the mayors of the big cities because the mayors know what is keeping jobs from being grown here and whether that is, you know, in San Francisco it's a tax regime that makes no sense and they're going to fix that. What they do in San Francisco is they have a gross receipts tax. So do you have a gross receipts tax? Okay, like news flash, that's actually a problem because, okay, OpenAI. San Francisco cannot lose OpenAI. The whole reason San Francisco's on an upswing is we have a new mayor who's fantastic, but also better to be lucky than smart, AI. Do you know that 462 AI companies have been founded in the last 18 months in San Francisco? $70 billion dollars of venture capital into the city of San Francisco, not Oakland, not Marin, not South Bay, the city of San Francisco. And so OpenAI is 13 billion of revenue. They make no money. In fact, they lose money. But the gross receipts tax means they get taxed on 13 billion of revenue. You can go to Brisbane, which is about 20 minutes south of the city of San Francisco, and not pay gross receipts tax. I mean, you don't need to be, my husband's a brain surgeon here at UNM. You don't need to be a brain surgeon to know that you've got to have a tax regime that furthers your economic growth and development objectives. So there's lots of things whether it's the cost of building, whether it's how you get land for housing. There's a whole host of things that are truly the provenance of the government to partner with organizations like UNM and the private sector here to make this the best possible place to invest.

Yeah. Well, I think it is a bit of

What I said, which is it is the job of government, both state, federal, and local—not so much federal here, but state and local. What are the policies that need to be in place that encourage job creation? We've talked about taxes, but there's also things like uncapped malpractice insurance. Okay, you all are losing doctors like crazy because they get to a certain point and they're like, 'I'm off to Arizona.' And so, I know that that's under consideration by the legislature. I think that's a really important thing.

I think the other thing is that—and I'm sure there's maybe some attorneys in the audience, I'm not sure—being the capital of personal injury lawsuits is actually what you want to be. I mean, you drive through town, every single billboard is personal injury. Like, 'We won 500 million here.' If you're a CEO, you're looking at those billboards going, 'I don't know about that.' And so I think a diversification of what you stand for and what you communicate is going to be important. But I think it's very much the—and remember, it doesn't have to be every change in regulation or every law or every tax regime. It's the 80/20. What is 20% of what you can do that will get you 80% of the way home? In San Francisco, it's three things. It is getting rid of the gross receipts tax, which will—I mean, they've lost McKesson, they've lost Bank of America, they've lost all these companies. Gross receipts tax will help enormously. And then the second is building costs in San Francisco are 20% higher than they are in the peninsula. Why is that? Well, it's because there's been tons and tons of little incremental things that have been put on to the building of buildings that make them unaffordable. Okay. So, how do you go back to basics and say, 'What do we actually need? Do we have to legislate bike rooms?' Okay. If you're building a new building for residents in San Francisco, you have to have a bike room that will hold two bikes for every single resident of the apartment building, which adds about $250,000 to the cost of an apartment building with 100 units. And it's not that that was a bad idea in and of itself. It's just one of a hundred that have been piled on and piled on and piled on. So those are the kinds of things that I think need to be looked at. And obviously, the business people in this town could tell you what the 80/20 is in about three seconds, I'm sure.

Yeah, we're good. We want to be great. So, I would say a couple things. First of all, I think it depends on the size of your organization. Can I tell you, running eBay when it was 30 people and $4 million in revenue was a lot easier than it was when it was $15 billion in revenue, 8,000 people. So, you know, small is easier. The bigger you get, the more bureaucratic it gets. And so the question is how do you rally a big organization behind a change or behind something that needs to be done? I don't know that I have all the answers to this. What I will tell you, and Nella will appreciate this, I learned how to communicate to large groups of people when I ran for governor of California. And what I didn't understand as a CEO, we're trained in facts and figures, left brain. And actually, when you're trying to move an organization, it is not about the facts. And I knew more about the budget of the state of California than Jerry Brown ever knew. No one cared. And it is about the stories that you tell and how do you illustrate what you want to become. And I learned storytelling late in the game. I might have won if I'd learned that a little bit earlier. I doubt it. But anyway, running as a Republican in a Democrat state might not have been the smartest thing that I ever did. But anyway, and so this idea of how do you paint a vision of what this organization can be that people can buy into? And again, you'll never get everybody, but you'll get most of the people. And especially if you get, as I said, that input, that ability to contribute to what that vision can be. And then my also my view is simple vision is better than complicated. One of my really—I think one of the most remarkable stories is Microsoft. When I was at HP in 2011, we wrote off Microsoft for dead. They'd missed the smartphone. They'd missed the tablets. They'd missed every major trend going on. And I remember when Satya Nadella was asked to be the CEO. He'd been a longtime Microsofty and we're all like, 'Well, that was a dumb idea. Geez, I can't believe he took that job.' And look what happened. Microsoft is remarkable. But you know what their strategy was? And every single person in Microsoft can say it: 'Cloud first, mobile first.' And so when he conducted reviews of the office group or the gaming group, he wanted to know what are you doing to be mobile first and cloud first. That's all I want to know. And that rallied an entire organization. I mean, you saw it happen. It's quite—it's kind of amazing. Now it's actually AI first, right? And so he's moved with the technology environment. He's moved. But you know, businesses are littered with long, wordy visions and if you can say it in like, 'Cloud first, mobile first, love you, that's what we're doing.' And so I think that communication, that simplicity of communication and everyone can figure out what they're supposed to do in that context, I think that makes a big difference. It's easier in a private company than it is in a government organization. Because you know, in the end the CEO decides, which is not always the case in a place like UNM or the government. But I think clarity of focus, simplicity and involving people and then driving towards it. And people always say, 'Well, incentives drive behavior.' I think that's sort of true, but we spend a lot of time on—I'm on the comp committee now of CoreWeave. We spend a lot of time trying to figure out how to incentivize these guys. Okay? Nothing we do is going to change what they do. They want to do it. I mean, by having a little bit more and long-term incentive is not going to change what they do. You've got a group of people who are fired up and all over it. And so I don't think that compensation is the only thing at all that motivates people. It's helpful. Maybe it's a necessary but not sufficient condition, but it's not the only thing.