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

1. 0:00 – 1:19

   Introduction

   1. GRGinni Rometty0:00

      I've had to do plenty of unpopular things. I think any time you have to run a company that endures a century and has to endure another century, you will do unpopular things, you have no choice. And I often felt I had to sacrifice things for the long term. And whether that would have been, you know, really difficult things like, you know, job changes or reductions, or whether it would be things like, "Hey," you know, "we're gonna change the way we do our semiconductors-"

   2. LFLex Fridman0:25

      Mm-hmm.

   3. GRGinni Rometty0:26

      "... and a, a whole different philosophy." Y- you have no choice. I mean, and, and in times of crisis as well you gotta be, I always said, it's not a popularity contest.

   4. LFLex Fridman0:37

      The following is a conversation with Ginni Rometty, who was a longtime CEO, president, and chairman of IBM. And for many years, she was widely considered to be one 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. This is the Lex Fridman Podcast. To support it, please check out our sponsors in the description. And now, dear friends, here's Ginni Rometty.

2. 1:19 – 10:59

   IBM

   1. LFLex Fridman1:19

      You worked at IBM for over 40 years, starting as a systems engineer, and you ran the company as chairman, president, and CEO from 2011 to 2020. IBM is one of the largest tech companies in the world, with, maybe you can correct me on this, with, 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.

   2. GRGinni Rometty1:45

      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. It's such a big company.

   3. LFLex Fridman2:04

      What was the parts that you thought should endure? The core of the company that was beautiful and powerful and could persist through time-

   4. GRGinni Rometty2:12

      Yeah.

   5. LFLex Fridman2:12

      ... that should persist through time?

   6. GRGinni Rometty2:13

      I'd be interested, do you have a perception of what you think it would be?

   7. LFLex Fridman2:17

      Do I have a perception? Well, I'm a romantic for a history of long-running companies, so there is kind of, um, a tradition. As a AI person, to me, IBM has some epic sort of research accomplishments-

   8. GRGinni Rometty2:32

      Yes.

   9. LFLex Fridman2:32

      ... where you show off, you know,, uh, Deep Blue and Watson. Just impressive, big moonshot challenges in accomplishing those.

   10. GRGinni Rometty2:41

       Yes. Yeah.

   11. LFLex Fridman2:41

       But that's, I think, that's probably a small part of what IBM is. It's just, that's mostly, like, the, the sexy public-facing part, right?

   12. GRGinni Rometty2:48

       Yeah. Now, no, it, it, is, well, certainly the research part itself, right? Is over 3,000. So it's not that small.

   13. LFLex Fridman2:54

       (laughs)

   14. GRGinni Rometty2:54

       That's a pretty big research group.

   15. LFLex Fridman2:55

       Yes, big, yes, yes.

   16. GRGinni Rometty2:56

       But the part that should endure ends up being, you know, company that does things that are essential to the world. Meaning, um, the who, you know, think back. You said you're a romantic. It was the, uh, '30s, the Social Security system. It was putting the man on the moon. It was, you know, to this day, banks don't run, you know, railroads don't run. Uh, that is, at its core, it's doing mission critical work.

   17. LFLex Fridman3:22

       Mm-hmm.

   18. GRGinni Rometty3:22

       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.

   19. LFLex Fridman3:33

       Running the infrastructure of the world, so doing it at scale, doing it reliably.

   20. GRGinni Rometty3:37

       Yes, secure, in this world, that's like everything. In, 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. You have to determine I am, right? So it was to be essential. Even though some of what we did is exactly what you said, it's below the surface, so many people... 'Cause people say to me, "Well, what does IBM do now?" Right? And over the years, it's changed so much. And today, it's really a software and consulting company. Consulting is a third of it. And the software is all hybrid cloud and AI. That would not have been true, as you well know, back even two decades ago, right? So, um, it changes. But I think at its core, it's that be essential. You said moonshot, can't all be moonshots, 'cause moonshots don't always work. But mission critical work.

   21. LFLex Fridman4:27

       So, given the size though, uh, when you started running it, did you feel this sort of thing they, people usually associate with size, which is bureaucracy, and maybe the aspect of size that hinder progress or hinder pivoting. Did you feel that?

   22. GRGinni Rometty4:45

       You would, um, uh, y- for lots of reasons. I think when you're a big company, sometimes people think of process is the client themselves. Or the, you know-

   23. LFLex Fridman4:55

       (laughs)

   24. GRGinni Rometty4:55

       ... 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 they're, 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, um, in our industry, you gotta be fast. And go back, like, when I took over, and it was 2012, th- the, 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 one time. And I used to say to people, "Go faster, go faster, go faster." And honestly, I, I've tired them out. I mean, it kinda dawned on me-

   25. LFLex Fridman5:45

       (laughs)

   26. GRGinni Rometty5:45

       ... that when you're that big-

   27. LFLex Fridman5:46

       Yeah.

   28. GRGinni Rometty5:46

       ... it's a really valuable lesson. And it taught me, like, the hows perhaps more important than the what. Because if I didn't do something to change how work was done, like, change those processes or, you know, give them new tools, help them with skills, th-They couldn't. They'll just, like do the same thing faster. If someone tells you, you know, you got hiking boots and they're like, "No, go run a marathon." You're like, "I can't do it in those (laughs) boots."

   29. LFLex Fridman6:09

       Hm.

   30. GRGinni Rometty6:09

       But, so you've gotta do something. And at first I think the ways for big companies, I would
3. 10:59 – 16:16

   Hiring

   1. GRGinni Rometty10:59

      belief.

   2. LFLex Fridman10:59

      And for the skills, that, that means, uh, that means hiring and it means training?

   3. GRGinni Rometty11:04

      Yes. Y- yeah, oh boy, that's a long... Skills is a really long topic in and of itself. I try to put my view in it. I learned a lot and I changed my view on this a lot. Um, I'll go back at my very beginning, say 40 years ago. I- I would have said at that point, okay, I was always in a hurry of, 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."

   4. LFLex Fridman11:29

      Yeah.

   5. GRGinni Rometty11:30

      Okay. Then time would go on, I'm like, "Well, 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."

   6. LFLex Fridman11:36

      Mm-hmm.

   7. GRGinni Rometty11:37

      "Okay, I should spend more time on this topic," I spent more time on it. Then it was like, "Okay, hire experts." Okay?

   8. LFLex Fridman11:43

      Yeah.

   9. GRGinni Rometty11:43

      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-

   10. LFLex Fridman12:00

       Mm-hmm.

   11. GRGinni Rometty12:00

       ... 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%. Can't find them. Okay, it's 10% and I can't find the people. Okay, what's the issue? Okay, they're not teaching the right things. It- that led me down a path and it- it was serendipity that I happened to do a review of social- corporate social responsibility. We had this one little fledgling school in a low-income area, an high school with a community college. We gave them internships, direction on curriculum. Lo and behold, we could hire these kids. I said, "Hmm, this is not CSR. Like, I just found a new talent pool." Which takes me to now what I'm doing in my post, you know, 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 (laughs) don't-

   12. LFLex Fridman13:04

       I'm deeply offended.

   13. GRGinni Rometty13:05

       No, you should not be.

   14. LFLex Fridman13:06

       (laughs) .

   15. GRGinni Rometty13:06

       And I- and I, you know, I'm vice chair at Northwestern, one of the vice chairs.

   16. LFLex Fridman13:09

       Yeah.

   17. GRGinni Rometty13:09

       But- 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 one 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.

   18. LFLex Fridman13:35

       So the interview process, the questions you ask?

   19. GRGinni Rometty13:37

       Changed, everything changed.

   20. LFLex Fridman13:38

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

   21. GRGinni Rometty13:43

       And you can do testing and, I mean, there's- we triangulated around it lots of ways. And now look, there are, at the heart of it, what it would do is change, you don't think of buying skills, you see- you think of building skills.

   22. LFLex Fridman13:54

       Mm-hmm.

   23. GRGinni Rometty13:54

       And when you think that way, with so many people, and I think this country, many developed countries being disenfranchised, you got to 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.

   24. LFLex Fridman14:10

       Yeah, I think some interesting combination of humility and passion, 'cause like you said, uh, experts sometimes lack humility, uh, if they call themselves an expert for a few too many years. So you have to have that, uh, beginner's mind and a passion to be able to, uh-

   25. GRGinni Rometty14:26

       Yeah.

   26. LFLex Fridman14:26

       ... aggressively, constantly be a beginner at everything and learn and learn and learn.

   27. GRGinni Rometty14:30

       You know, I- I saw it firsthand when we were beginning this path, you know, down in the cloud and AI, and we said, and people would say, "Oh, IBM, you know, it's existential, they got to change," and all these things. And- and I did hire a lot of people from outside, very willing to learn new things. Come on in, come on in. And I- I sometimes say shiny objects, trained and shiny objects, come on in. But I saw something, it was another one of these...

   28. LFLex Fridman14:55

       Yeah.

   29. GRGinni Rometty14:55

       You're not a shiny object, I'm not saying that.

   30. LFLex Fridman14:56

       (laughs) .
4. 16:16 – 23:00

   Leadership

   1. GRGinni Rometty16:16

      you on that.

   2. LFLex Fridman16:17

      You, uh, you wrote in the book, uh, so speaking of hiring, quote, "My drive for perfection often meant (laughs) 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." Uh, so what's the right balance between showing the way and, uh, helping people find the way?

   3. GRGinni Rometty17:06

      That is a good question 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- you have to tell or show. I mean, you've got to let people find their way, 'cause it's so big you can't, right? That's an obvious answer. Scope of work. Bigger it gets, okay, I've got to let more stuff go. But I have always believed that a- 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. Now, it doesn't meaning you're showing. 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- you walk your talk on that kind of thing, is super important. And I actually think it's a struggle young companies have because those values aren't deeply rooted....and when the storm comes, it's easy to uproot. And, um, so I always felt like when it was that time, I showed it. I got taught that so young, a- as at IBM, and even General Motors, that, um... In fact, I write, I do write about that in the book. First time I was a manager, I had a gentleman telling dirty jokes.

   4. LFLex Fridman18:28

      Mm-hmm.

   5. GRGinni Rometty18:28

      And not to me, but to other people, and it really offended people and, uh, some of the women. This is, this is the very early 80s. 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? I- I, that to me isn't the kind that, like, when do you let go of stuff, right? So-

   6. LFLex Fridman19:03

      The values and, and relationships with, with clients.

   7. GRGinni Rometty19:06

      Yeah. Whatever you're in service of. And, and, 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, we called it Think Academy. IBM's long-time 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 get, kinda have some skin in this game and understand it. I taught the first hour of every month for four years. Now-

   8. LFLex Fridman19:42

      Nice.

   9. GRGinni Rometty19:42

      ...okay, I had to learn something. (laughs)

   10. LFLex Fridman19:44

       (laughs)

   11. GRGinni Rometty19:44

       So, but it made me lear- but I was like, okay if I can teach this, you can do it, right? I mean, you know, kind of thing.

   12. LFLex Fridman19:50

       So, it was a compulsory, uh, Thursday night education for you. (laughs)

   13. GRGinni Rometty19:53

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

   14. LFLex Fridman19:55

       Okay, sure.

   15. GRGinni Rometty19:55

       But yes, you're so right. Yes. Yeah.

   16. LFLex Fridman19:57

       So, you, you prepare?

   17. GRGinni Rometty19:58

       Yeah.

   18. LFLex Fridman19:59

       So, like personality-wise-

   19. GRGinni Rometty19:59

       That's another habit. Yeah.

   20. LFLex Fridman20:00

       ...you like to prepare?

   21. GRGinni Rometty20:02

       Yeah, but there's roots in that go back deeply. Deeply, deeply, deeply. I, and I think it's an interesting reason. So why do, why... Are you... You're a preparer, my friend.

   22. LFLex Fridman20:10

       Yeah.

   23. GRGinni Rometty20:11

       Yes, you are. You prepare for your interviews.

   24. LFLex Fridman20:13

       Uh, sure.

   25. GRGinni Rometty20:15

       The rest you wing?

   26. LFLex Fridman20:16

       Yeah, I wing most of them.

   27. GRGinni Rometty20:16

       But that's okay. I mean, you don't have to prepare everything. I don't prepare everything either.

   28. LFLex Fridman20:20

       No, but I, I unfortunately wing stuff. I save it to the last minute. I, I push 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.

   29. GRGinni Rometty20:34

       That can be. That's very true with some people.

   30. LFLex Fridman20:36

       I mean, so I'm a programmer in- engineer at heart. And so, so programmers famously overestimate, or underestimate, sorry, how long that something's going to take. And so I just, everything, I always underestimate. And it's almost as if I want to feel this chaos of anxiety of a deadline or something like this. Otherwise, I would be lazy sitting on a beach with a piña colada and relaxing.
5. 23:00 – 28:40

   Hard work

   1. LFLex Fridman23:01

      So j- just to linger on the, uh, you mentioned your brother. And, uh, it seems like in the book that you really had to, uh, work hard when you studied to, to, to sort of, um... Given that you weren't good at memorization, you really, truly, deeply wanted to understand the stuff and you put in the hard work, and that seems to persist throughout your career. So, um, you know, hard work is often associated with, um, sort of has negative associations. Maybe with burnout, with dissatisfaction. Is there some aspect of hard work, uh, at the core of who you are that led to happiness for you? Did you enjoy it?

   2. GRGinni Rometty23:39

      I enjoyed it. So I will be the first. And, and I'm, I'm really careful to say that to people, because I don't think everyone should associate, gee, to do what you did, you have to... There's only one route there, right?

   3. LFLex Fridman23:49

      Yeah.

   4. GRGinni Rometty23:49

      And that's just not true. And I, I do it 'cause I like it. I, in fact, I'm careful-

   5. LFLex Fridman23:53

      (laughs)

   6. GRGinni Rometty23:53

      ...and as time goes on, you have to be careful. As more and more people watch you, whether you like it, you're a role model or not-

   7. LFLex Fridman23:59

      Yes.

   8. GRGinni Rometty23:59

      ...you are a role model for pe- whether you know it, like it, want it, does not matter.

   9. LFLex Fridman24:02

      Yeah.

   10. GRGinni Rometty24:02

       I learned that the hard way, and I would have to say to people, "Hey, just 'cause I do this does not mean... I do it for these reasons," right? And so be really explicit. And-... I'd come to believe, usually when people say the word power, I don't know, do you have a positive or negative notion when I say the word power? We'll just do a quick-

   11. LFLex Fridman24:17

       Probably negative one, yeah.

   12. GRGinni Rometty24:18

       ... For some stereotype or some view that, that it, somebody's abused it in some way.

   13. LFLex Fridman24:22

       Yeah.

   14. GRGinni Rometty24:22

       You can read the newspaper, somebody's doing something. Um, personal people, like I'll ask people, "Do you want power?" And they're like, "Oh, no, I'd rather do good."

   15. LFLex Fridman24:31

       Yeah.

   16. GRGinni Rometty24:31

       And I think the irony is, you need power to do good.

   17. LFLex Fridman24:35

       Mm-hmm.

   18. GRGinni Rometty24:35

       And so that sort of led me down to in... It was, as I thought about my own life, right? 'Cause it s- it starts in a, like many of us, you know, you don't have a lot, but you don't know that, 'cause you're like everybody else around you at that time. And on one end, tragedy, right? My father leaves my mother, uh, homeless. No money, no food, nothing. Four kids, she's never worked a day in her life outside of a home. And I, the irony that here I would end up as the ninth CEO of one of America's iconic companies, and now I co-chair this Group 110, and that journey, as to the biggest thing I learned was, you could do really hard meaningful things in a positive way. So now you ask me about why do I work so hard. I ended up writing the book in three pieces for this reason. When you really think of your life and power, I thought, it kind of felt like a pebble in water, like there's a ring about... You really care about yourself and like the power of yourself, power of me. There's a time it transcends to that you are working with and for others, and another moment when it becomes like about society. So my hard work, I'd ask you, one day sit really hard and think about when you close your eyes, who do you see from your early life, right, and what did you learn? And maybe it's not that hard for you. I mean, it was, it's funny the things then, if I really looked at it, it's no surprise what I do today. And that hard work part, my great-grandma-

   19. LFLex Fridman26:03

       Mm-hmm.

   20. GRGinni Rometty26:03

       ... as, uh, you and I were comparing notes on, on Russia, right? And never spoke English, spoke Russian, came here to this country, was a cleaning person at the Wrigley Building in Chicago. Yet, if she hadn't saved every dime she made, my mother wouldn't have a home and wouldn't have had a car, right? What did I learn from that? Hard work. In fact, actually, she, when I went to college, she's like, "You know, you really should be on a farm. You're so big and strong." (laughs) You know, that was her view. And then my grandmother, another tragic life. What did she do though? And, and think how long. That's in the '40s, the '50s. She made lampshades. And she taught me how to sew, right, so I could sell clothes when we couldn't afford them. But my, my, my memory of my grandma is working seven days a week sewing lampshades. And then here comes my mom in her situation, who, who climbs her way out of it. So I associate that with, well, strong women, by the way, all strong women, and I associate hard work with how you are sure you can always take care of yourself. And so I think that the roots go way back there, and they were always teaching something, right? My great-grandma was teaching me how to cook, how to work a farm, even though I didn't need to be on a farm. (laughs) My, my grandma taught me, you know, here's how to sew, here's how to run a business, and then my mother would teach us that, "Look, with just a little bit of education, look at the difference it could make," right? So anyways, that's a long answer to I think that hard work thing is really deeply rooted from that background.

   21. LFLex Fridman27:34

       It gives you a way out from hard times.

   22. GRGinni Rometty27:36

       Yeah. You know, I think I've seen you on other podcasts say, uh, I thought I did, "Do you want a plan B?"

   23. LFLex Fridman27:43

       Mm-hmm.

   24. GRGinni Rometty27:43

       Didn't you a- say no, you would not like a plan B?

   25. LFLex Fridman27:46

       Yeah, I don't...

   26. GRGinni Rometty27:47

       'Cause you're like, "I would prefer my back up against..."

   27. LFLex Fridman27:49

       Yeah.

   28. GRGinni Rometty27:49

       Am I remembering-

   29. LFLex Fridman27:50

       You have a story like that. (laughs)

   30. GRGinni Rometty27:52

       Y- yeah.
6. 28:40 – 35:38

   Adversity

   1. GRGinni Rometty28:40

   2. LFLex Fridman28:40

      So you wrote, quote, "I vividly remember the last two weeks of my freshman year when I only had 25 cents left. I put the quarter in a clear plastic box on my desk and just stared at it. This is it, I thought. No more money." (laughs) So do you, do you think there's some aspect of that financial stress, e- even desperation, just being hungry, did that play a role in that drive that led to your success to be the, the CEO-

   3. GRGinni Rometty29:09

      You know, I, I, I-

   4. LFLex Fridman29:10

      ... o- one of the great companies ever?

   5. GRGinni Rometty29:11

      ... it's a really interesting question because I was just talking to another colleague who's CEO of another great American company this weekend, and he mentioned to me about all this adversity and he said, or I said to him, I said, "Do you think part of your success is 'cause you had bad stuff happen?"

   6. LFLex Fridman29:29

      Yeah.

   7. GRGinni Rometty29:30

      And he said yes, you know. And so I, I guess I'd be lying if I didn't say I don't think you have to have tragedy, but it does teach you like one really important thing is that there is always a way forward. Always. And it's in your control.

   8. LFLex Fridman29:46

      And I think there's probably wisdom for mentorship there, or whe- whether you're a parent or a mentor, that, uh, easy times don't result in growth.

   9. GRGinni Rometty29:55

      Yeah. I've heard a lot of my friends and they, they worry. They say, "Gee, my kids have never had bad times."

   10. LFLex Fridman30:00

       Yeah.

   11. GRGinni Rometty30:00

       And so what, you know, what happens here? So I don't know. Is it, is it required, um, and why you end up...... mm, not required, but it sure doesn't hurt.

   12. LFLex Fridman30:09

       You had this good line about a advice you were given that growth and comfort never co-exist. Growth and comfort never co-exist, and you have to get used to that thought.

   13. GRGinni Rometty30:19

       If someone said that they think of me, like, one of the more profound-

   14. LFLex Fridman30:22

       (laughs)

   15. GRGinni Rometty30:22

       ... sort of lessons I had- (laughs)

   16. LFLex Fridman30:24

       Yeah.

   17. GRGinni Rometty30:24

       ... um, and the irony is-

   18. LFLex Fridman30:25

       That's pretty profound.

   19. GRGinni Rometty30:26

       ... it's from my husband.

   20. LFLex Fridman30:27

       (laughs)

   21. GRGinni Rometty30:27

       And, uh, which is even more, you know, funny actually.

   22. LFLex Fridman30:30

       Well, I'm glad you're able to... You could just steal it. I mean, you don't have to give him credit.

   23. GRGinni Rometty30:33

       Oh, I have, I have shamelessly. He'll, he'll-

   24. LFLex Fridman30:34

       Okay, great.

   25. GRGinni Rometty30:34

       ... as he'll tell you. Um, okay, so the story behind growth and comfort never co-exist, but honestly, I think it's been a really freeing thought for me and it's helped me immensely since. Mid-career, and, um, as I write about it in the book, I'm mid-career and I'd been running a pretty big business actually. And the fellow I work for is gonna get a new job. He's gonna get promoted. He calls me and he says, "Hey, you're gonna get my job. In fact, I really want you to have it." And I said to him, "No way." I said, "I'm not ready for that job. I got a lot more things I gotta learn. That is like a huge job. Around the world, every product line, development, you name it, every function. I can't do it." He looked at me. He says, "Well, I think you should go to the interview." For me. I went to the interview the next day, blah, blah, blah. The guy says to me, he looks at me and he says, "I wanna offer you that job." And I said, "I would like to think about it." I said, "I wanna go home and talk to my husband about it." Kinda looked at me. "Okay." I went home. My husband is sitting there and he says to me... I went on and on about the story, et cetera. And he says, "Do you think a man would have answered it that way?" And I said, "Mm-hmm." He says, "I know you." He's like, "Six months, you're gonna be bored. And you, all you can think of is what you don't know."

   26. LFLex Fridman31:55

       Yeah.

   27. GRGinni Rometty31:55

       And he said, "I know these other people. You have way more skill than them and they think they could do it." And he's like, "Wh- w- why?" And, and for me, it internalized this feeling that... A- and it, and it... I'm gonna s- I am gonna say something that's a bit stereotype that it resonates with many, many women, and I'll ask you if it does after, is that, uh, you know, they're the most harsh critic of themselves. And so this idea that I won't grow unless I can feel uncomfortable. Doesn't mean I always have to show it, by the way.

   28. LFLex Fridman32:23

       Mm-hmm.

   29. GRGinni Rometty32:24

       So that's why I meant growth and comfort can never co-exist. So I, I got... Uh, I was like, "He's exactly right." Now, the end of that story is I went in and I took the job.

   30. LFLex Fridman32:32

       Mm-hmm.
7. 35:38 – 49:05

   Power

   1. LFLex Fridman35:38

      to... Uh, you mentioned, uh, power and good power a few times. So if we can just even talk about it. Your, your book is called Good Power: Leading Positive Change in Our Lives, Work, and World. What is good power? What's the essence of good power?

   2. GRGinni Rometty35:50

      Yeah. So the essence of it would be doing something hard or meaningful, but in a positive way. Um, I would also tell you, I hope one day I'm remembered for how I did things, not just for what I did. I think that could almost be more important. And I think it's a choice we can all make. So the essence, to me, of good power, if I had to contrast good to bad, let's say, would be that, first off-You have to embrace and navigate tension. This is the world we live in. And by embracing tension, not running from it, you would bridge divides that unites people, not divides 'em. It's a hard thing to do, but you can do it. You do it with respect, which is the opposite of fear. A lot of people think the way to get things done is fear. And then the third thing would be, you gotta celebrate some progress versus perfection, because I also think that's what stops a lot of things from happening because, you know, if you go for whatever your definition of perfect is, it can e- it's either polarization or paralyzation. I mean, i- i- something happens in there. Versus, no, no, no, I can... I- i- don't worry about getting to that actual exact end point. If I keep taking a step forward of progress, really tough stuff can get done. And so my view of that is like, honestly, I hope it can then, you know... I said it's like a memoir with purpose. I'm only doing it, it was a really hard thing for me to do, 'cause I don't actually talk about all these things and I had to... Nobody cares about your, like, scientific description of this; they want the stories in your life to bring it alive. So it's a memoir with purpose, and in the writing of it, it became the power of me, the power of we, and the power of us. The idea that you build a foundation when you're young, mostly from my work life, the power of we, which says... I kind of, in retrospect, could see five principles on how to really drive change, um, that would be done in a good way. And then eventually you could scale that, the power, y- really of us, which is what I'm doing about finding better jobs for more people now that I co- this, co-chair an organization called OneTen. So that essence of navigate tensions, do it respectfully, celebrate progress, and give me, indulge me one more minute, these sort of, again, it's retrospect that I, eh, I didn't know this in the moment. I had to learn it. I learned it, I am blessed by a lot of people I worked with and around and... But some of the, the principles, like the first one is, says, if you're gonna do something, change something, do something, you gotta be in service of something. Being in service of is really different than serving. Super different. And like I, I just had my knee replaced. And I interviewed all these doctors. You can tell the difference if the guy who was going to do a surgery, "Hey, my surgery's fine. I really don't care whether you can walk and do the stuff you wanted to do again but, 'cause my surgery's fine. Your hardware is good."

   3. LFLex Fridman38:50

      Mm-hmm.

   4. GRGinni Rometty38:51

      I actually had some trouble. And I had a doctor who was like, "You know, this doesn't sound right. I'm coming to you." Yeah, the surgery was fine. It was me that was reacting wrong to it, and he didn't care until I could walk again, okay? There's a big difference in those two things. And i- and it's true in any business you have. Um, a waiter serves you food, okay? He served his food. He did his job. Or did he care you had a good time? So that thought to be in service of, it took me a while to get that, like to try to write it, to get that across, 'cause I think it's like so fundamental. If people were really in service of something, you gotta believe that if I fulfill your needs, at the end of the day, mine will be fulfilled.

   5. LFLex Fridman39:31

      Mm-hmm.

   6. GRGinni Rometty39:31

      And, and that is that essence that makes it so different. And then the second part, second principle is about building belief, which is, I gotta hope you will voluntarily believe in a new future or in some alternate reality, and you will use your discretionary energy, versus me ordering you. You'll get so much more done. Then the third, change and endure. We kind of talked about that earlier. Focus more on the how and the skills. And then the part on Good Tech and being resilient. So anyways, I, I just felt that, like Good Tech, everybody's a tech company. I don't care what you do today. E- and there's some fundamental things you gotta do. I- in fact, pick up today's, any newspaper, right? ChatGPT. You're an AI guy.

   7. LFLex Fridman40:15

      Mm-hmm.

   8. GRGinni Rometty40:16

      All right? I, I believe one of the tenets of Good Tech is, it's like responsibility for the long term, and it says, so if you're going to invent something, you better look at its upside and its downside, like we did quantum computing. Great, a lot of great stuff, right? Materials development, uh, risk management calculations, e- endless lists one day. On the other side, it can break encryption. That's a bad thing. So we worked equally hard on all the algorithms that would sustain quantum. I, I think with chat, okay, great. There's equal in, and there are people working on it, but like, okay, there're things that say, "Hey, I can tell this was written with that," right? Because the implications on how people learn, right? If... This is not a great thing if all it does is do your homework. That is not the idea of homework, (laughs) as, as someone who liked to study so hard. But anyways, you get my point, th- it's just the upside and the downside.

   9. LFLex Fridman41:07

      And that there could be much larger implications that are much more difficult to predict and it's our responsibility-

   10. GRGinni Rometty41:11

       Absolutely.

   11. LFLex Fridman41:12

       ... to, to really work hard to, to, to, to figure that out.

   12. GRGinni Rometty41:14

       Yeah, I was talking AI ethics a decade ago and I'm like, "Why won't anybody listen to us?"

   13. LFLex Fridman41:18

       Yeah.

   14. GRGinni Rometty41:18

       You know? I'm... It, it's... That's another one of those values things that you realize, hey, if I'm gonna bring technology in the world, I better bring it safely, right?

   15. LFLex Fridman41:26

       Yeah.

   16. GRGinni Rometty41:27

       And that to me comes with, when you're an older company that's been around, you realize that society gave you a license to operate, and it can take it away.

   17. LFLex Fridman41:35

       Mm-hmm.

   18. GRGinni Rometty41:35

       A- and we see that happen to companies. And therefore you're like, okay, like why I feel so strong about skills. Hey, if I'm gonna bring in, it's gonna create all these new jobs, job dislocation, then I should help on trying to help people get new skills. Anyways, that's a long answer to well, Good Tech, but the idea that there's kind of, in retrospect, a set of principles you could look at and maybe learn something from my sort of rocky road through there.

   19. LFLex Fridman42:01

       But it started with the power of we, and there's that big leap, I think, that propagates to the things you're saying, which is the leap from focusing on yourself to the focusing on others, so the having that empathy. You've said, uh, "At some point in our lives and careers, our attention turns from ourselves to others. We still have our own goals, but we recognize that our actions affect many, that it is impossible to achieve anything truly meaningful alone." So it's... To you, I think, maybe you can correct me, but ultimate good power is about......collaboration, uh, and maybe in, you know, in- in a large conference, like delegation on- on great teams.

   20. GRGinni Rometty42:42

       The ultimate good power is actually doing something for society. That would be my ultimate definition of good power, by the way.

   21. LFLex Fridman42:46

       So it's about the results of the thing.

   22. GRGinni Rometty42:48

       Yeah. It- it- it... But how it's done, right? The how it's done. And so, um, you know, when you said a leap, do you think you- people make a leap when they go from thinking about themselves to others? Do you think it's a leap or do you think-

   23. LFLex Fridman43:01

       Yeah.

   24. GRGinni Rometty43:01

       ...it kind of just is a sort of slow point?

   25. LFLex Fridman43:04

       I think the leap is in deciding that this is a... Oh, it- it's like deciding that you will care about others. That this is... It's like- it's like a leap of going to the gym for the first time. It's, yes, it takes a long time to develop that and to actually care, but that decision that I'm going to actually care about other human beings, yeah.

   26. GRGinni Rometty43:23

       Yeah.

   27. LFLex Fridman43:23

       I think, or at least like, yeah, it- it just feels like a deliberate action you take of empathy.

   28. GRGinni Rometty43:29

       Yeah, 'cause sometimes I think it happens a little, i- i- it's maybe not-

   29. LFLex Fridman43:32

       Gradual?

   30. GRGinni Rometty43:32

       ...as deliberate. Yeah, it- it's a little bit more gradual because it might happen because you realized that, "Geez, I can't get this done alone, so I gotta have other people with me. Well, how do I get them to help-"
8. 49:05 – 54:10

   Sacrifice

   1. LFLex Fridman49:05

      like, for good power, you are a CEO of, uh, you were a CEO for a long time of a public company. Were there times when there was pressure to sacrifice what is good for the world, um, for the bottom line, in order to do what's good for the company?

   2. GRGinni Rometty49:20

      Yeah. There were probably, there were a lot of times for that. I mean, I, I, uh, I think every company faces that today, in that, um, I always felt like there's so much discussion about stakeholder capitalism, right? Do you just serve a shareholder? Or do you have multiple? I have always found, and I've been very vocal about that topic, that, um, when I participated in the business roundtable, wrote up a new purpose statement that had multiple stakeholders, I think it's common sense. Like if you're gonna be 100 years old, you only get there because you actually do at some time balance all these different stakeholders in what it is that you do, and short-term, long-term, all these trade-offs. And I always say people who write about it, they write about it black and white, but I have to live in a gray world. It, nothing I've ever done has been in a black and white world, hardly. Maybe things of values that I had to answer.

   3. LFLex Fridman50:05

      Sure.

   4. GRGinni Rometty50:05

      But most of it is gray. And so, um, I think back lots of different decisions. Um, I think back, uh, as you would well remember, you're a student of history, IBM was one of the really the originators of the semiconductor industry, and certainly of commercializing the semiconductor industry. Great R&D and manufacturing, but it is a game of volume. And so when I came on, we were still manufacturing R&D and manufacturing our own chips. We were losing a lot of money, yet here we had to fight a war on cloud and AI.

   5. LFLex Fridman50:38

      Right.

   6. GRGinni Rometty50:38

      And so, okay, now shareholders would say, "Fine, shut it down." Okay, those chips also power some of the most important systems that power the, these, the banks of today.

   7. LFLex Fridman50:48

      Mm-hmm.

   8. GRGinni Rometty50:48

      If I just shut it down, well, what would that do? And so, okay, the answer wasn't just, "Stop it." The answer wasn't just, "Keep putting money into it." The answer was, and we had to kinda sit in an uncomfortable spot 'til we found a way. I mean, this is gonna sound so basic, but you as an engineer understand it. We had to separate i- it was a very integrated process of research, development, and manufacturing. And you'd also, you'd, you'd be perfecting things in manufacturing, uh, and it's, these were very high performance chips. We had to be able to separate those. We eventually found a way to do that, so that we could, um, take the manufacturing elsewhere and we would maintain the R&D. It's, it's a s- I think it's a great example of the question you just asked, because, uh, there was, people would've applauded, others would've been, "This was horrible." Or, or we'd had a financial roadmap that had been put in place that said, "I'll make this amount of EPS by this date." There came a time we couldn't honor it, because we had to invest. And so there's a million of these decisions. I, I think most people that run firms, any size firm, they're just one right after another like that.

   9. LFLex Fridman51:53

      Mm-hmm.

   10. GRGinni Rometty51:53

       And you're always making that short and long tension of, "What am I giving up?"

   11. LFLex Fridman51:58

       Well, what is that partnership like with the, with the clients? 'Cause you work with gigantic businesses. And wha- wha- what's it like sort of, um, really forming a great relationship with them, understanding what their needs are, being in service of their, of their needs?

   12. GRGinni Rometty52:13

       In, in service of, yeah. Very simple. Honor your promises. And that happens over time. I mean, in service of, you know, which is often why you can work with competitors, because if you are really in service of you and you need something and it takes two of us to do it-

   13. LFLex Fridman52:29

       Mm-hmm.

   14. GRGinni Rometty52:30

       ... that becomes easier to do, because I really, we both care you get what you needed. And so I can remember, um, during one of the times I was on a European trip, and at the time, a lot of, and, and this is still true about views about technology and national technology giants and global ones and the pros and the cons, and countries want their own national champions, quite obvious. I mean, if I'm France or Germany, and, um, there was a lot of discussion about security and data and who was getting access to what. And I can remember being in one of the, uh, I was with Chancellor Merkel. I had met her many times. She's very well-prepared, very well-prepared every time.

   15. LFLex Fridman53:08

       Yeah.

   16. GRGinni Rometty53:08

       She would know. And I started to explain all these things about why, how, you know, how we don't share data, how, who it belongs to. Our system's never had backdoors, and she sort of stopped me. Like, "You're one of the good guys." Like, "Stop." Now, that wasn't about me personally. She's, she's talking about a company that's asked to con- acted consistent with values for decades, right? So to me, how you work with those big kind of clients is, you honor your promises. You, you, you say what you do and you do what you say, and you act with values over a long period of time. I, I, and, and that to me, people say, "Well, value, it is not a fluffy thing." It is not a fluffy thing. It is a, I, I mean, if I was starting a company now, I'd spend a lot of time on that. On, you know, why we do what we do and why some things are tolerable and something, you know, what your fundamental beliefs are. And, uh, and many people sort of zoom past that stage, right? It's okay for a while, until-

   17. LFLex Fridman54:05

       And ne- and never sacrifice that throughout.

   18. GRGinni Rometty54:08

       Uh, you would never sacrifice that. I don't

9. 54:10 – 1:12:24

   Taking over as CEO

   1. GRGinni Rometty54:10

      think you can.

   2. LFLex Fridman54:10

      So there was a lot of pressure when you, uh, took over as CEO and there was 22 consecutive quarters of revenue decline between 2012 and the summer of 2017. So it was a stressful time, maybe not, maybe you can, uh, correct me on that. So, uh, as a CEO, what was it like going through that time-

   3. GRGinni Rometty54:28

      Yeah.

   4. LFLex Fridman54:28

      ... with the decisions, the tensions, in terms of investing versus, uh, making a profit?

   5. GRGinni Rometty54:35

      I always felt that that sense of urgency was so high. And even if I was calm on the outside, because you, you have-... one of the world's largest pensions. So, so many people depend on you. You have a huge workforce, they're depending on you. You have clients whose businesses don't run if you don't perform, et cetera. And shareholders, of course, right? And so... But, I also am really clear, this was perhaps the largest reinvention IBM ever had to undertake.

   6. LFLex Fridman55:03

      Yes.

   7. GRGinni Rometty55:04

      Had a board that understood that. In fact, some people, some of the headlines were like, "This is existential," right? I mean, nobody gives you a right to exist forever. And there aren't many techs, you're the student of it. They are gone, they are all gone. And so if we didn't reinvent ourselves, we were gonna be extinct. And so... Now, but you're big, and it's like changing... What's that old saying? "Can I change, um, the wheels while the train's running?" Or something like that.

   8. LFLex Fridman55:30

      Yeah, yeah.

   9. GRGinni Rometty55:30

      Or the engines while the plane's flying?

   10. LFLex Fridman55:32

       Yeah, exactly.

   11. GRGinni Rometty55:33

       And that's what you have to do, and that took time. And so, you know, Lex, do I wish it would have been faster? Absolutely. But the team worked so hard, and in my, in that timeframe, 50% of the portfolio was changed. It's a very large company. And, um, if you would... I also divested $10 billion of businesses. So if you would look at that growth rate without divestitures and currency, which now, today, everyone talks about currency. Back then, we were the only international guy. Um, net of divestitures and currency, the growth was flat. Is flat great? No. But flat for a big transformation? I was really proud of the team for what they did. That is actually pretty miraculous to have made it through that. I had my little nephew one day and he would see on TV occasionally when there'd be criticism, and he'd say, uh, you know, "Auntie, doesn't, doesn't that make you mad when they talk mean?"

   12. LFLex Fridman56:25

       Yeah.

   13. GRGinni Rometty56:26

       And I just looked at him and I said... And he says, "How do you feel?" I said, "Look, I'm doing what has to be done." And I happened to be the one there. A- and if you have great conviction, and I did, a great conviction. I knew it was the right thing. I knew it would be needed for IBM to live its second century. And so, and my successor, they have picked up, gone forward. I mean, you go back, we did the acquisition of Red Hat. I mean, we had to find our way on cloud, right? We were late to it, so we had to find our way, and eventually that led us to hybrid cloud. We did a lot of work with Red Hat back in 2017. Oh, we'd always done a lot of work with them. Actually, we were one of the first investors when they were first formed. Um, but that was 2018, you know? We took quite a hit for even, you know, oh, it was the largest to then software acquisition ever. But it is the foundation, right, of what is our hybrid cloud play today and doing very, very well. So, but it had to take a short term hit for that, right? A short term hit for a very large $34 billion acquisition. Uh, but it was, for all of us, it was the right thing to do. So I think when you get really centered on, you know it's the right thing to do, you just keep going, right?

   14. LFLex Fridman57:35

       So the team had the vision, they had the belief and everything else, the criticism doesn't matter.

   15. GRGinni Rometty57:39

       And we had to pivot, so don't, we didn't always have exactly the right, uh, you know, this wasn't a straight arrow. But stay down, you know you're right. Keep going. Okay, made a mistake. You know, there's no bad mistake as long as you learn from it, right? And, and keep moving. So yes, did it take longer? But we are the largest that was there.

   16. LFLex Fridman57:54

       Could you maybe just, on a small tangent, educate me a little bit? So, Red Hat originally is Linux, open source distribution of Linux, but it's also a consulting, well, it's- it's-

   17. GRGinni Rometty58:04

       A little bit of consulting, but it's mostly software distri- it's, it's mostly Linux.

   18. LFLex Fridman58:07

       So it's mostly software?

   19. GRGinni Rometty58:07

       It was mostly software, yeah.

   20. LFLex Fridman58:09

       Oh, wow, okay.

   21. GRGinni Rometty58:09

       Absolutely. Absolutely.

   22. LFLex Fridman58:11

       So, but today, uh, IBM is very much this, you know-

   23. GRGinni Rometty58:14

       Services?

   24. LFLex Fridman58:14

       Most IT services in the world is done by I- IBM. There's so many, so many varied, uh, so basically if you have issues, problems to solve in, in business, uh, in the software space, IBM can help.

   25. GRGinni Rometty58:29

       Yes. And so in, in that, my last year, uh, our services business, we broke it into two pieces. And one piece was spun off into a company called Kyndryl, which is managed outsourcing.

   26. LFLex Fridman58:39

       Mm-hmm.

   27. GRGinni Rometty58:40

       Um, keeping things running, and they're off creating their own company. What IBM then retained is really the part I built with PWCC, the big consulting arm. And so today, the IBM of today in 2023 is, you know, at least ending 2022, was 30% consulting and the other 70% would be, uh, what would you consider software cloud AI. So hybrid cloud and AI is the other, and, and some hardware, obviously. Still the mainframe is modernized, alive and kicking, and still running some of the most important things of every bank you can think of, practically-

   28. LFLex Fridman59:13

       Mm-hmm.

   29. GRGinni Rometty59:14

       ... uh, in the world. And so that is the IBM of today, um, versus perhaps... You know, and Red Hat is a big piece and an important part of that software portfolio. And they had some services with them for implementation, but it wasn't a very, a very large part. And it's, it's grown by leaps and bounds. You know, because originally, the belief was everything was gonna go to the public cloud. And at least many people thought that way. We didn't, uh, and in fact, we, I mean, we tried. We procured a public cloud company. We really tried to work it. But what we found was a lot of the mission critical work, it, it was tuned for consumer world, it wasn't tuned for the enterprise. So then time is elapsing here though, and you gotta be up scale.

   30. LFLex Fridman59:59

       Mm-hmm.

Episode duration: 1:52:15