LIFECHAT WITH MEG WHITMAN – KEY TAKEAWAYS:
On turning around a company and driving innovation:
- Be conscious of what needs to be changed.
- In almost any industry, it’s actually magical what you get if you give them some parameters, not a box this big, but enough to be really creative.
On mentorship as organizational continuity:
- It’s mentorship, and it is also training, and it’s also imparting the vision and values of the company.
On personal growth:
- Find something you love to do. Don’t take the job because it’s what all your friends are doing or your parents think you should do it.
- Don’t ever pretend that you know something that you don’t know.
LIFECHAT WITH MEG WHITMAN:
ON DRIVING INNOVATION:
When I came to HP, it was when HP was in a pretty difficult set of circumstances. I was the third CEO in as many years. What I did was I went right to the founder DNA.
I asked, ‘what does this company do really well? What is the core of this company?’
And despite all the acquisitions and all the drama, it was completely obvious that the core of this company was innovation and engineering. So I immediately celebrated that. That was going to be our most important thing, increased R&D spending, and set the engineers free. That was the first core.
The second core was partnering. We are an incredibly collaborative organization. I never met Bill Hewlett and Dave Packard, but I can imagine that they were remarkably collaborative. The company was built with value added re-sellers, what we call partners and distributors. We have always been an open standards company. We operate in a heterogeneous environment in our customer’s data centers. So I said ‘Let’s go right back to the partnering core.’ And I made it very clear to our sales executives if a partner can make that sale as opposed to us taking it direct, that is what we want to do. And so that was the second thing.
And the third core value of this company, which surprised me, is giving back to the community. Bill Hewlett and Dave Packard were environmentalist before being an environmentalist was cool. They had all kinds of giving back to the community before social responsibility was even a terminology in business. They were way ahead of the time.
So I just went to those three things. I said, ‘We’ll make the to-do list of the things we need to fix later. Let’s go do more of what we do really well.’
And that has a number of benefits:
First of all, it’s easy to get the organization to do what they do well. And it also actually gives you credibility with the company because no one wants to hear ‘The new CEO has this list of all these things that she wants us to do differently.’ They actually said, ‘She recognizes what we do well.’ So it was a way to win hearts and minds which was an important thing to do early on.”
There’s an authenticity to it. You’re connecting back to HP’s original story.
Figuring out what HP’s core DNA was took me about a week and a half. It was very easy to see what the company was made of.
It also took courage for you to stand up and say, in spite of everything, whatever drama is going on, let’s do this.
Well, it might have taken courage if I hadn’t done it before. There was benefit to not being a freshman CEO in this circumstance because I’d experimented with other ways of doing it, and I knew this worked and so I knew the complexities and the challenges and I know this will work.
Can you give us an example of the first time you’ve tried a turnaround and it didn’t work? What did you learn?
Yes, when I went to Stride Rite. Your instinct when you come into a new leadership position is you want to fix what is wrong. That’s how you’re going to add value. That is probably not the right thing to do out of the gates. You have to be conscious of what needs to be changed, but if you go in and you say, you know here’s the to-do list of the 10 things we’re horrible at and we have to go fix them and it’s a disaster, it’s not a good way to get off on the good foot with a new organization.
And it’s a little bit of what I did at Stride Rite. I kind of went in and said, “This is a mess and we have to do all these different things to fix it.” Ultimately I pivoted back, but it took me a little while to figure out that that’s probably not the best way to show up.
You’ve innovated in so many different domains and contexts. What are some of the different challenges as well as opportunities between innovating in say an establishment like Disney versus eBay which was just 30 members at that time?
I think part of this is culture. Disney had a culture of innovation. And Michael Eisner, who was the CEO when I was there, used to say, “Remember, this all started with a mouse,” meaning this all started with a creative idea of Mickey Mouse.”
Often innovation is in the DNA. In a tech company, that means you have to celebrate the engineers, in an animation company you have to celebrate the animators, in a fashion design company you have to celebrate the fashion designers.
By the way, they are all in many respects quite similar, they just happen to have a different domain of creativity. The creative’s at HP are the engineers and so you have to recognize that, celebrate that, and then you have to give the engineers, the fashion designers, the animators, you have to give them a bit of a sandbox. In other words, it’s not good to say go do whatever you want, you’ve got to say here is the market we are going after, here is the customer need, here is what we think is going to be happening in the environment and then you set them off.
In almost any industry, it’s actually magical what you get if you give them some parameters, not a box this big, but enough to be really creative.
A perfect example of this that I found at HP when I started was this next generation of compute that we call the Machine. It has basically been unchanged for 40 years. And we actually have a new prototype of the way compute will be done in the future, which is in-memory compute with memristor and photonics which is completely different; it’s changing the paradigm of compute, and that came right out of HP labs.
So whether it’s animators or engineers, you went back to the content, identifying who the creatives are.
Absolutely. And who are the creatives in an organization? Sometimes they’re the marketing executives, sometimes it’s sales executives, but usually it starts with the product. At eBay, the genius was the product. That was the brainchild of Pierre Omidyar, the founder of eBay, and it’s partly trial and error.
So he started eBay, but there were issues around people sending money and not receiving the product. So, Pierre basically surveyed the community and had you know online community feedback and that’s how he came up with the feedback system where sellers receive feedback as do buyers. And this created an incredible ecosystem that was self-regulating and that feedback had an economic impact on the sellers because they were able to get higher prices if they had a higher feedback rating and the buyers won more auctions because they weren’t blocked from bidding because the sellers knew they would pay. So that was just a pure creative idea that was imbedded in the fundamental product of eBay.
It all goes back to the fundamentals.
So, two companies may sell the same product, but the creative may actually be different people. Am I hearing that right?
In my experience, and I am certain that there are exceptions to this, usually the winner is the one that has the most creative product. And of course, the real game changer is when you create something where there was nothing before.
So eBay, there was no land-based analog. Quite different from Amazon, where there was a land-based analog. You could go buy on Amazon or you could go to Kmart. eBay was a marketplace, a virtual marketplace, and there was no such thing. So when you think about Google, about Linkedin, about PayPal, these companies created something from nothing. There was nothing there.
They created a whole new category, a whole new concept. And by the way, 3D printing is a category that I think is yet to be created. This could change everything, as so that’s the most valuable kind of innovation.
I call it actually disruptive innovation versus evolutionary innovation, and they’re actually quite different things in many respects.
However, it’s easy to innovate from something because you don’t have confines. But let’s take a company like Stride Rite or a company like Disney— with a strong culture, strong set ways— or the military. How do you innovate in the context of strong traditions?
You have to take advantage of the traditions. No one does innovation better than Disney. You know there was all kinds of competition that was swirling around the company when Michael Eisner and Frank Wells came to the company. But, they doubled down on animation. In fact, that’s how Jeffery Katzenberg, made his name – through movies such as Beauty and the Beast and The Lion King. They went back to the core of the company.
That’s exactly what I did at HP. I went back to the core of the company. I think that organizations imprint early. There is a core set of strengths that, regardless of what happens, if you can tap into it, it’s fantastic. Now, there are many companies out there that didn’t make that jump to the next technology even though it was core. For example, Kodak’s core was photography. Why they didn’t make the jump to digital photography? That is the core of who they were. And so you know it doesn’t always work. For me, in my career, it has mostly worked.
Well, counter intuitive ideas and insights seem intuitively obvious in hindsight! But it may not be so obvious. It takes a good CEO to get that feedback to be able to identify that.
Well, you’re kind. I think it takes a great group of people and then it takes a leader who lets those people go do what they do best within a confine.
So it’s empowering others.
Actually, that’s completely what it is.
So let’s talk about partners at HP. How do your partners fit into this culture of innovation? Especially when we are in such a partnership collaborative economy.
They’re part of it for sure. I’ll give you a perfect example. We have about 150,000 valued added resellers that sell our products throughout the world. And they are in touch with the consumers every single day. Every day, they’re living it and breathing it, and the feedback that we get from them about what our competitors are doing, what customers are asking for, becomes input into the creative group.
And so, while they are not co-developers per se, they are a big part of the information that’s coming back to that R&D group. And that is invaluable, and we couldn’t do it at scale within the company. Imagine having 150,000 people feeding back in an organized way. You could never have that many tentacles out into the marketplace.
Through that feedback loop, you’re creating a safe space for your people and your team to innovate within— I think that is a key part of the role of a leader. But we are also living in a short-term oriented world with expectations that demand a focus on everyday tasks. How do you get everyone to step back and look also long-term?
Well, of course, you don’t get everyone to do that, right? You have to divide and conquer. So there are the front line sales executives who are delivering the quarter. They know what product they have. They know what they need to achieve in that quarter and they are out doing it, and all the sales enablement, you know the sales plays and how we train our sales executives. So those are the near-term folks who are focused on the quarter of the year.
And then our R&D, that takes place within our operating divisions, is focused on years 2-4, and then it’s HP Labs that’s focused on years 5-10. So, the most freedom from the day-to-day lives in HP Labs.
The near-term R &D and our operating divisions have got to have the next generation of server, the next generation, the all-flash array storage product, the next generation of cloud services. They know they have to have that, so they work under a little bit more time pressure.
In my experience, you have to divide and conquer because otherwise people can’t carry that many thoughts in their heads at the same time, particularly at a big company.
I always feel that one of the heartaches of today’s world is we are in a world where everything is so open that we don’t give our leaders the latitude to fail the way we used to. So how do you protect you people when there’s that pressure, so that they can be fearless.
So in some ways, you know it is the leader’s job to take the wrath. The With the CEO, in the end, the buck stops here. When I first arrived at HP, I said, “ We’re going to take down Street Guidance, and we’re telling you that this is a 5 year turn around. I’m not going say to say it’s 3 years. I’m saying 5 years because that’s what I think it’s going to take.”
That gave investors a choice whether to stay in the stock or get out. And by the way, a lot of them got out. And the stock whet to roughly about $11 or $12 a share. So you just have to know that … You have to know what the right thing to do is. You have to have a little bit of courage.
This is where it comes back to not being a freshman CEO. Because I’d been a CEO, I actually knew how some of this worked and I had the courage to basically say, “Listen. We have to gather ourselves. We have to reset here.” But it takes experience to do that.
It’s frightening to do that as a first time CEO. But it was totally the right thing for HP because we could not have gotten out of the situation in which we were in, I don’t think, if we hadn’t reset Street Guidance. And so the stock went from around 25 to 11 to close to 40 and now it’s back down to 33 or 34 because we’ve got currency headwinds and other things. But you know you have to be able to withstand the criticism on the way down.
Mentors are key factors for one’s successes. Who are two mentors in your life who have made a difference in your career? What makes them effective?”
I do think mentors are important. One of my best mentors was Frank Wells, who was the President and Chief Operating Officer at the Disney Company. I had arrived there as a VP of Strategic Planning and was assigned to the consumer products group. And Disney is a fabulous company! But it’s also quite a rough and tumble environment.
I would be in all of these high level meetings. He pulled me aside and he said, ‘Meg, you are just as smart as the guys. Speak up! Speak up!’
And I said, ‘But, you know they sound like they’ve thought of everything…’
He goes, ‘Trust me. They haven’t. They’re just talking. So you should, say what you think.’
So that’s the kind of thing he did for me. And it was really very very powerful.
Another one of my mentors was Pete Wilson, who had been Governor of California. When I ran for Governor, he was right there trying to educate me about the political landscape of which I knew very little— how it worked, who we ought to meet, and how the whole process worked.
So Frank gave you that jolt of confidence. And Peter was about the context?
Yes, he gave me domain knowledge.
So how do you apply that to mentoring others? How do you mentor others?
In many ways, just by modeling behavior. Obviously my Bain training is you start with the facts, and you know there are many problems that yield to analysis. There are some that don’t. So I try to teach that to young up-and-coming executives – try to model customer focused behavior.
One of the things I’ve tried to do at HP is turn the company from being rather inward looking to being customer focused and that starts with me. I was in India on a trip and I was supposed to go to London, but we’d had a big challenge at one of our customers in Australia and so I diverted to Australia instead. That rippled through the organization in really quite an amazing way because people watch what leaders do.
My biggest mentorship opportunity is every two years I take one of our up-and-coming executives and then they hang with me for two years. The first woman, the first mentee was Jackie Ferguson, who had worked in our Enterprise Service business in the UK. And she now runs our Enterprise Services in the UK and Ireland.
Now, I have a fellow by the name of Paul Hunter who ran the Printing and Personal systems business in the UK and he is now watching and helping manage this gigantic company. They get to see everything—every board meeting, every challenge, every acquisition, every-everything. So it is actually quite fun for them.
This is interesting. You are talking about the individual as a mentor and then also the leader, the CEO, as a mentor exemplar, a mentor for the entire organization.
Yes, I think that is true, actually.
So, even though people think of mentoring as one-on-one relationships, we can step back and think about it also as about organizational continuity. So why is creating a culture of mentorship so important for creating sustainably excellent organizations?
It’s mentorship, and it is also training, and it’s also imparting the vision and values of the company.
I’m a big believer that you have to have a shared mission, a shared vision and a shared set of values. That was true at eBay and it’s true at Hewlett-Packard.
That has to start from the top and has to cascade through the organization. Most organizations are leader focused. Everyone is trying to figure out what do the leaders want. People want to do well, so they want to see what does success look like and how do I deliver success that looks like that.
And so I think, particularly at eBay, (there were 30 people when I got there. I was employee number 30.) but even at a company like HP, where there were over 300,000 when I got there, it’s pretty amazing how fast employees adapt to a leader’s view of the world.
ON PERSONAL GROWTH:
What advice would you give the 20 year old Meg?
Gosh, it would be so fun at 20 to know what I know now. But I often say that when I was at eBay, the company was just a couple years old, and I said – you can’t make a 2 year old be a 10 year old. And so I’m quite conscious of giving advice. There is something you know when you raise children, and I have a 30 year old and a 27 year old, you can’t make the 14 year old be a 20 year old. They have to learn it themselves. You can’t tell them everything. So I’m sort of quite parsimonious with advice. But I’d tell you a couple of things.
One is find something you love to do. Don’t take the job because it’s what all your friends are doing or your parents think you should do it. Find out what you love to do because you are going to spend a lot of time at work and usually we are better at doing things that we like than things that we are forcing ourselves to do.
So I think that’s a really important thing— know what you love to do and then go try to find a job that has a nice mirroring of those skills.
Now, in every first job, out of business school or an undergraduate, there are going to be things that you don’t love about that job. You kind of have to make yourself power through that. But if you love the fundamentals and you like and respect the people that you’re doing it with, the people and the culture of the organization that you join or that you start is really important. I was lucky enough to land in a couple of early jobs that I loved and I loved the people and I respected the organization. I think it’s super important.
I’m just going to pivot really quickly. You are so fiercely confident. I cannot imagine you ever having self-doubt. Inspire us by sharing with us a time when you’ve faced that self-doubt.
I think that everyone no matter how they look on the outside, is always thinking, ‘Am I doing the right thing? Is this the right thing to do? Am I adequate for this job?’
When I came to HP, this was for me, an enormous company. It’s a $114 billion company. Ok, I’ve never run a $114 billion dollar company before. The largest company I’ve ever run was $8 billion. And by the way, I was much more of a consumer-oriented technologist than an enterprise one, and HP is largely an enterprise company. I didn’t know much about enterprise selling. So you just have to kind of figure it out.
And you don’t ever pretend that you know something that you don’t know. Just last week, we were going through sales coverage and how we wanted to change the sales coverage selling motion in the US, and there were 3 slides in a row that had at least 7 acronyms on them that I did not know. And I’ve now been at HP for 3 years.
So I just said, ‘Excuse me can you please tell me what this is?’ And by the way, I discovered that half the room didn’t know what they were either. So when you think you don’t know something, there’s probably a few other people who don’t know it either, and by you asking the question people go, ‘oh yeah, I knew that.’
ON SOCIETAL STEWARDSHIP:
Let’s talk about education as you are very engaged with the Summit Schools. As the CEO of many companies, you’ve seen how volatile, how uncertain and complex today’s world is and so how do we better prepare this next generation of kids to flourish and contribute and add value in such a world?
Diane Tavener the CEO of Summit Public Schools is very articulate on this situation. Our K-12 education system was built for a different time and a different place. It was built for the industrial revolution, where you went to high school and then went to work at Ford Motor Company on the line. That’s why you have all the rows, the desks in a row, there’s workbook pages, there’s here’s what you have to learn.
For the next generation, this has to be about problem solving. It has to be creative thought; it has to be different. And so Summit does blended learning, which is sort of the old fashioned way of learning, but also letting student’s go at their own pace, explore different areas, and we do that through technology.
What she’s trying to do (with actually, I think, quite a degree of success) is create a learning style, a learning set of opportunities that’s going to groom the next set of great American citizens. And it is not easy because, you know, we’ve been doing it this way for about 100 years and maybe longer. And this worked pretty well, by the way, through probably the 80’s in America. But now there’s a whole different set of needs from the workforce whether its science, technology, engineering, and math, or creative thought.
The days that you could graduate from high school and get a great job are waning. And here the students have the gift of incredible educational opportunities. That’s not necessarily the norm. So we’ve got to train the elementary school kids, the middle school kids, and the high school kids to, you know, come work at a company like HP, that requires problem solving skills as opposed to repetitive skills.
Along with problem solving, what are some of those other key traits and behaviors that we need to build into our next generation?
I think that the key traits and behaviors for the next generation has got to be about, how do you absorb lots of data and draw conclusions from that data as opposed to memorize that data? When I went to high school, I basically memorized American history. I didn’t spend much time actually thinking about what was going on. I knew that I was going to have to pass a test where they were going to ask me, ‘Tell me what the cause of the Civil War was and what years did it occur in?’
That’s actually kind of a different set of skills than what, as you interpolate all this data, what conclusions do you draw from it and what does that mean you do next? And it’s quite different and this is the skill-set that the next generation of kids need. How we transform the US education system as rapidly as we need to is one of the big issues of our time.
And you know when you talk about the access to data, we all have smart phones. We don’t have to memorize anymore. It’s about the context, right?
That’s exactly right.
So you said something interesting there where you said, ‘create the next citizens,’ right? There hasn’t really been a large conversation around what the role of education as citizens for informed democracy, informed decisions for democracy of workers, but this ‘citizenship’ hints at service. So where does service play into this?
I think that we are trying to raise up a generation of citizens. Now, citizens are also workers. Citizens give back to their community. Citizens understand how democracy works. And so what you are trying to do is create a blend of those things. Obviously, we want people to pursue their passions and be great employees or artists or whatever that happens to be their passion, but we also need people to understand how the country works.
And I think the citizenship perhaps in the old rote memorization— you remember, you had to memorize how many members there were in the Senate and, you know, there were 3 branches of government. That stuff you need to know. So it’s not all problem solving. There are some basic facts that you need to know about how this company works and the history, or about how this country works and the history. So it’s a blend of what you are trying to produce.
And you are trying to produce citizens who, you know, have empathy and understand how the world works.
At the Fuqua/Coach K Leadership & Ethics Center (COLE), we believe very much also in societal stewardship as part of the leadership mantel. Can you talk a little about societal stewardship?
I think people come to service in different ways. So some kids come right out of college and they go to the Red Cross or they go to the Peace Corp or they end up being teachers or nurses or they work for nonprofits. And then there are some who work in a more traditional environment and then sort of in their 40’s say, ‘Ok how can I give back?’
And I think that it is all of our responsibilities, at some point, to figure out how we can be, I like your words, societal stewards. Whether it’s the environment, or whether it’s education, or whatever, you know everyone can find a niche where they can make a difference.
We do big things in business and focus on solving one big problem such as – we are going to make a difference to the college ready corridor in Silicon Valley. But, you’ve got to be able to pull bite-sized things out because these problems can be overwhelming.
So how can you make a difference you know on a piecemeal basis? I’m reminded always of the starfish story. A little boy is walking along the beach and the tide has gone out and all of the starfish are stranded on the beach. And he’s walking with his dad and he starts to throw the starfish back in. And his father says, ‘Son, you know you’re not really going to be able to help the starfish. I mean, they’ve been stranded on the beach.’ And he picks up a starfish and throws it and goes, ‘I don’t know, I made a difference to that starfish.’
I couldn’t agree more because we are looking at scale, but there is the power of the individual that has value.
Yes, because you will get overwhelmed. If you look at the beach stranded with starfish, it’s overwhelming, it’s paralyzing. We have to think about stewardship in a way that you can make incremental changes, but make things better. And then you leave it to people like Fred Krupp at EDF (Environmental Defense Fund) and Mark Tercek at TNC (The Nature Conservancy), who spend their life thinking about how to pick up all of the starfish.
FULL BIOGRAPHY OF MEG WHITMAN:
Meg Whitman has served as Chairman of the Board since July 2014, as President and Chief Executive Officer since September 2011 and as a member of the Board since January 2011. Previously, Meg served as President and Chief Executive Officer of eBay Inc., from 1998 to March 2008. Prior to joining eBay, Meg held executive-level positions at Hasbro Inc., a toy company, FTD, Inc., a floral products company, The Stride Rite Corporation, a footwear company, The Walt Disney Company, an entertainment company, and Bain & Company, a consulting company. Meg also serves as a director of The Procter & Gamble Company.