Ginni Rometty is a former long-time CEO, president, and chairman of IBM. Please support this podcast by checking out our sponsors:
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OUTLINE:
0:00 - Introduction
1:19 - IBM
10:59 - Hiring
16:16 - Leadership
23:00 - Hard work
28:40 - Adversity
35:38 - Power
49:05 - Sacrifice
54:10 - Taking over as CEO
1:12:24 - Negotiating
1:17:31 - Deep Blue vs Garry Kasparov
1:22:49 - IBM Watson
1:42:42 - Work-life balance
1:49:46 - Advice for young people

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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.

And I often felt I had to sacrifice things for the long term.

And whether that would have been really difficult things like job changes or reductions, or whether it would be things like, hey, we're gonna change the way we do our semiconductors and a whole different philosophy.

I mean, and in times of crisis as well, you gotta be, I would say it's not a popularity contest.

The following is a conversation with Jeannie Vermetti, who was a long time CEO, president and chairman of IBM.

And for many years, She was widely considered to be 1 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.

To support it, please check out our sponsors in the description.

And now, dear friends, here's Jeannie 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

IBM is 1 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.

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.

Do you have a perception of what you think it would be?

Well, I'm a romantic for history of long running companies.

So there's kind of a tradition as a 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.

That's mostly like the sexy public facing part.

Yeah, no, well, certainly the research part itself, right, is over 3, 000.

But the part that should endure ends up being, you know, a company that does things that are essential to the world, meaning, the who, you know, think back, you said you're romantic.

It was the 30s, the social security system.

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 love that word was I can't call myself essential.

So it was to be essential, even though some of what we did is exactly what you said.

So many people, because people say to me, well, what does IBM do now?

And today it's really a software and consulting company.

And the software is all hybrid cloud and AI.

That would not have been true, as you well know, back even 2 decades ago, right?

I think at its core, it's that be essential.

You said moonshot, can't all be moonshots because 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 hindered progress or hindered pivoting, did you feel that?

I think when you're a big company, sometimes people think of process as the client themselves.

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 or 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 be 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 1 time.

And I used to say to people, go faster, go faster, go faster.

I mean, it kind of dawned on me that when you're that big, 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 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've got hiking boots and they're like, no, go run a marathon.

You're like, I can't do it in those boots.

And at first, I think the ways for big companies, I would call them like blunt clubs.

Because if you reduce layers, decisions go faster.

If there's less decision points, things go faster.

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.

Versus, because everybody talks about it.

But the idea that you would really have small, multidisciplinary 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.

People always say, oh, I got this agile group over here, 40 people, but not when you're a couple hundred thousand people, you gotta get a lot of people to work that way.

The blonde club thing you're talking about, So flatten the organization as much

Yeah, yeah, I probably reduced the layers of management by half.

And so, that has lots of benefits, right?

Time to a decision, more autonomy to people, 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 town and work on it.

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.

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.

And I often felt I had to sacrifice things for the long term And whether that would have been really difficult things like job changes or reductions, or whether it would be things like, hey, we're gonna 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 gotta be, I always said it's not a popularity contest.

So that's, none of these jobs are popularity contests.

I don't care if your company's got 1 person or half a million, they're not popularity contests.

But psychologically, is it difficult to just 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 need to do it 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.

The more I got into it, I could see, wow, a lot more had to change, right?

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 2 out of 10 people for the future.

Not that they didn't have relevant skills today, but for the future, 2 out of 10, yikes.

The speed at which things were getting done.

So you got so much to do and you say, is that a scary thing?

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, them.

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, oh boy, that's a long, skills is a really long topic in and of itself.

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 gotta fit in these interviews, I gotta 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, spend more time on it.

Then it was like, okay, hire experts, okay?

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 and 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%.

Okay, it's 10% and I can't find the people.

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 corporate social responsibility.

We had this 1 little fledgling school in a low-income area and high school with a community college, we gave them internships, direction on curriculum.

Like I just found a new talent pool, which takes me to now what I'm doing in my 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.

No, you should not be, and I, you know, I'm vice chair at Northwestern, 1 of the vice chairs, 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 1 thing I would hire for now is somebody's willingness to learn.

You know, and 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 questions you ask.

The kind of things you talk to them about is try to get at how curious they are about the world.

I mean, we triangulated around it lots of ways.

And now look, at the heart of it, what it would do is change, you don't think of buying skills, you think of building skills.

when you think that way, with so many people, and I think this country, many developed countries being disenfranchised, you gotta bring them back into the workforce somehow, and they gotta 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 down the cloud and AI, and people would say, oh, IBM, it's existential.

They've got to change and all these things.

And I did hire a lot of people from outside, very willing to learn new things.

And I sometimes say shiny objects, trained in shiny objects, come on in.

But I saw something, it was another 1 of these, and you're not a shiny object, I'm not saying that.

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 1 group was a winner and 1 was a loser, the winners were the people who were willing to learn from each other.

I mean, 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.

So like what 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.

You wrote in the book, 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?

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 tell or show.

I mean, you've got to let people find their way because it's so big, you can't, right?

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.

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.

It's super important And I actually think it's a struggle young companies have because the 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 at IBM and even General Motors.

In fact, 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 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?

The values and relationships with clients.

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 gonna 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 gotta have some skin in this game and understand it.

I taught the first hour of every month for 4 years.

But it made me learn, but I was like, okay, if I

So it was a compulsory Thursday night education for you.

Oh, I'm a little bit better prepared than that.

Yeah, but there's roots in that go back deeply, deeply, deeply, deeply.

So why do, why are you, you're prepared, my friend.

Yes, you are, you prepare for your interviews.

But that's okay, I mean, you don't have to prepare 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 and engineer at heart, and so programmers famously overestimate, or underestimate, sorry, how long that something's going to take.

And so I just, everything, I always underestimate.

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.

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Ginni Rometty: IBM CEO on Leadership, Power, and Adversity | Lex Fridman Podcast #362