Hey everybody, it's Mark Thompson and this is the Chief Executive Summit. I'm so delighted to share with you the story of Enrique Lores, CEO of Hewlett Packard, a company he transformed. I was with him every step of the way as he was trying to think about how to transform Hewlett Packard over his 30 years and then be on the short list to become chief executive officer. He was a long shot. He was selected because he was able to bring together the organization in a collaborative way like no other technologist that I know. And today he's become chairman and CEO of PayPal, transforming that incredible fintech company. And I wanted to reintroduce Enrique to you in the context of him becoming CEO of PayPal because he is the everlasting leader who can help you think about the steps that it takes to engage an organization in continuous reinvention to reinvent yourself no matter how much success you've had to continue to lead your organization in new and fresh ways. He started way back before computer science was popular. He was recruited by a set of engineers who came to his school to try to sell him on the idea of being a technologist. So listen to Enrique share that story.
I had the opportunity of joining the company more than 30 years ago now and I joined because a group of HP engineers came to my school and when they were talking about what they were doing, how they saw technology could have an impact in the world, how they were totally passionate about what they were doing, I felt, wow, this is something that I want to feel. This is something that I want to do as well. I joined the company and I can say that 30 years later I feel the same passion for the opportunities that we have for the impact we're going to have in the world that these engineers had when they came to my office. And I have to say that having been the CEO now for a year and a half, close to two years, I am really convinced that the best years for HP are ahead of us. That the opportunities we have with technology to have an impact on how people live, how people work, how people entertain and really make a better world is something very motivating both personally and also as a business. And that really this is the feeling that the whole team in the company has.
One of the many reasons I admire you so much, Enrique, is because I feel through the undercurrent of things that you say there is a mission. You're driven by a purpose that is based on a belief that you really can have impact on people's lives. I've had the privilege of working with people like Charles Schwab down the street when we were starting that fintech company and he was mission driven. He thought that if we could help people get their financial independence, if they could have access to the tools of Wall Street as individuals, it'd be very democratizing and opening up a set of possibilities. You've from the very beginning at HP through your leadership, you've been very much wanting to help empower and help the customer find their power. If you were to coach a younger version of yourself on the journey that you were, what do you wish you knew when you were starting this trajectory of leadership around the world in the global positions you had? What would be a few of those leadership lessons that you may have wished you knew earlier? Or perhaps you were just gifted from the start, but I imagine most of us stumble around a lot.
Yes, I think you learn about these things as you grow up and as you experience different things around your career. But if I had to summarize, I think there are four things that in my mind are critical. And then when I go to a university or when I talk to my sons that are starting their careers now, I always tell them: first of all, you always need to believe that imagination is your only limit and that through innovation you can really have an impact in the world. You can make a better place for people to live. And that really this needs to inspire everything you do every day. To get there, you need to be able and be willing to always challenge the status quo because there are always opportunities to do things better. And this is probably one of the best things of technology. It's always improving. It's always evolving. And if you understand what problem you're trying to solve for your customers, if you understand what they really want, even when they don't know, in many cases, you can really have an impact. And I learned this from the very beginning. The first product I did in HP was made obsolete by the second product I built. And by learning this early in your career, you really see the power of technology and you really see how important it is to really constantly focus on innovation and challenging the status quo. At the same time, you also realize having run a company and having run these big businesses that strategy or vision needs to be supported by strong execution and that what you do every day, delivering results, making a contribution every day is critical. It's not only about dreaming, it's about making the dreams real through hard work. And then finally, also very important and becoming more important every day is the need to know what your values are and to stand behind them every time. And not accepting compromises on what you think are the right things to do is really fundamental for you to make progress, for you to build trust. Because if you want organizations to follow you, they need to trust you. And they trust you when they see that you really have strong values that you stand behind them, you support them, you drive them and you make them real in everything you do. And if you do all these things, I really think you can really have a very strong impact as a leader, get teams behind you and really have a chance to change the world.
I can feel the value set that you have and you know what the heck, you really feel that you counsel others and counsel an earlier version of yourself to feel confident in your imagination. I mean that feels like it springs right out of the virtual garage that's sitting behind you right now. That is for everyone who's watching today. I was so moved and delighted when Enrique invited us and a group of CEOs to have a picnic in the backyard of the garage, the garage that's iconic for Silicon Valley, Hewlett Packard, making instruments in that garage. Could you talk, Enrique, about creating that product as an engineer that later you had to make obsolete by the next generation of it? Was that how you thought about it at the time or what were you thinking when you created the one that replaced the old guy? Tell me a little bit about that particular product and process because a lot of people don't have the confidence to continue to apply that imagination once having succeeded at something. Sometimes that makes you risk averse or complacent or you kind of brace for change rather than driving the change that you want to see.
Yes. Entrepreneurial. Let me explain the story. So the very first product I worked on when I came to HP, it was a pen plotter. So it was a printer that printed taking a pen and then moving the pen around it. And as a young engineer, it was a fantastic product to work on because just to give you an idea, when the pen starts moving the acceleration is 4G. So four times the acceleration of the earth which is similar to what you see in a space rocket. So it was super complex, super interesting. I was developing the servos, so the code that was controlling how the paper and the pen move and it was a fascinating project. But then HP invented inkjet technology and we saw that with inkjet we could do what was possible to do with a pen much faster. And when I say much faster I mean between 10 and 20 times faster. We could do it at lower cost and also we were able to do it quietly because one of the bad things of pen plotters was they were very noisy because they were moving pen and paper really fast. So when we saw the opportunity of it, we said this is our chance, we need to use this. This is going to change the industry. HP was leading the pen plotter business. But we only had 30, 40% share. When we introduced the first inkjet plotter, we got 100% share, which is an unbelievable number. And you really saw how with technology if you understand what are the key problems your customers have, really what are they looking for, you can really have a tremendous impact. And that change from we were doing something great to doing something unique and fantastic that nobody can do really inspired all of us and I think is what every technology company, every engineer working in a technology company needs to be driven by. We can do unique things, special things that will help our customers and once we do it, magic happens and the business does well, the company does well and we have a great contribution.
I'm feeling the sense that you take such great pride as do great technologists in the fact that you can do it better and by orders of magnitude better each time. In other words, you're never done. It's a process of solving a problem and providing a solution set or a service and it can only get better from here. It's a growth mindset and I think about taking that metaphor to being a leader in terms of, you know, when I get my degree I'll have arrived. When I get my title I will have arrived. I consolidate my power. I have my turf. I don't hear any of that here. This is about for you collaboration. This is about always working towards this external goal. Is this something that you must have faced as you were working your way up through the organization because not everybody is always as collaborative as perhaps the next person. How did you navigate and negotiate the working of the developing of teams as you were navigating your way up through the organization?
I think the key thing is to always focus on the external value we are creating, on why this is important and why this will really create a great contribution. And if you're able to create that vision of value for customers which eventually translates in value for the company, you can mobilize the team, you can mobilize the organization and you can put politics aside and really have the team concentrated on what really is going to be creating value. And this is something that I constantly tell to the teams every day. Every person in the company needs to ask himself or herself, what have I done today that has created value? And if you build that discipline, you really stop thinking about those things that are not relevant and you really concentrate on those that are really helping to move the needle, helping in creating progress and the whole company behaves and moves at a very different speed.
One of the things that I've been so impressed by leaders like yourself is that the value set that flows through your veins is something that is often developed early and then reinforced with experiences and with struggles and then that helps you get back on track because it's something to hang on to when things get difficult. Could you talk about your early life where you grew up? And what made you think about being an engineer and also thinking about that in an imaginative way as opposed to just a mathematical way in terms of like getting the best test scores is very different than building great stuff. Where did that itch come from? Could you talk a little bit about home?
I think what I have been always is a very curious person and I have been always driven by the need and the opportunity of constantly learning new things. And if I think about what I was doing when I was a young kid, I was always driven by what is technology going to do and how the world is changing. But I was also driven by reading a lot of novels about adventurous people that they changed the world either because they were explorers or pirates or people really living in very exotic places. And when you combine curiosity with technology knowledge and with really the willingness to be adventurous and change and drive and explore new opportunities and then you translate this to your professional career, I think you look for the opportunities that I have been able to experience and I have been able to have. And I also have to say that I have been very lucky in my career of having the opportunity of doing a lot of new and different things. I joined HP when HP was going through a lot of growth, when a lot of new businesses were being created and I did a big effort to really explore new businesses, new functions to constantly learn to become a more complete person but always with this idea of growing, exploring and experiencing and creating new things.
Creating new things. And if you think back to the beginning there, did you find yourself experimenting as a kid in ways where you were, I mean some young people were makers. You were a big reader and an adventurer. Could you give me a picture of where you were at that time as a child? I'm asking for a specific reason because we find that there's, you know, sometimes a glimmer of the future of a person's life creatively in terms of the things they were doing as a pre-teen or as a teenager.
I would say I was more a combination of a dreamer and a maker. I had always these big ideas of things that could be done and places I could go or new experiences I could have. But I also liked to build things and see how they worked and how they behaved. And for example, I probably was very influenced by some of my family. For example, my grandfather, he was a lawyer, but he was also a big dreamer and he was also an inventor and he tried to invent a lot of things. But unfortunately because of his education, he was a lawyer. So he didn't have any sort of engineering experience, engineering knowledge. So all his inventions failed. But just by seeing him trying and learning the stories of all the things he had tried to do, because he tried to invent things like a windsurf before the windsurf was invented, which of course didn't work. He also tried to create a boat that the first time they tried it, it sank because it was too heavy. He invented an advertising system that they installed in one of the most important streets in Madrid and almost every day one of the letters they were using was falling. And the concepts were great but he didn't have the technical depth or the engineering knowledge to make it happen. So this probably inspired me both in this dream inside but at the same time I realized that you needed to have some strong technical foundation to be able to make these things work.
I'm loving to hear how that inspires. Those stories often frighten people who are not committed to that kind of future away and it ends up being a differentiator. You are so impressed at saying yes, I really feel this, I see how I can have impact and let me get the tools and skills. That takes a level of humility too. I think when Jim Collins at Stanford when we were working on Built to Last the first time talked about this idea of level five leadership being this kind of odd combination of hubris and humility, that the audacity to think that you could do something great and at the same time the humility to know that nobody does it alone and nobody does it without being humbled to the process of learning to become an engineer or develop the skills or learn from someone else who has a very diverse and different set of values. This is one of the things that feels to me knowing you after all these years that has helped with you building a diverse board and a more diverse team because it's about those new ideas, those new impetuses that the objective is really to provide a better service to the world and the more voices we have in that choir, the more complicated, more difficult sometimes but so much better we can produce things as a choir. Could you talk about the most diverse board in the industry and how that happened and how you think about the many voices at the table?
