Good power: Driving meaningful change with Ginni Rometty
Willy Walker: Good afternoon, everyone. It is a real joy for me to have Ginni Rometty joining me today on the Walker webcast.
I feel like this is one of those classes that somebody who wants to really learn about leadership and as a leader of a company and privileged to run Walker & Dunlop, having read Ginni's book, there is so much for the two of us to get through in this hour. And I'm certain I'm not going to get to all of my material, but I will try. And as someone who is known for doing my own research on my guests, Ginni, I do feel, knowing how much research you did in your role as CEO of IBM and leading up to that. I felt like I had to do extra homework here to be prepared to have you on. Let me do a quick bio on you and then we'll dive into the questions that I put together.
Virginia Marie "Ginni" Rometty was Chairman, President, and CEO of IBM, becoming the company's ninth CEO and first female CEO. Rometty retired from IBM in 2020 after a near-40-year career at Big Blue. She joined IBM as a systems engineer in 1981 and went on to become global head of sales, marketing, and strategy.
As general manager of IBM's Global Services Division, Rometty helped negotiate and then integrate IBM's acquisition of PricewaterhouseCoopers’ IT consulting business in 2002. During her tenure as CEO, IBM acquired 30 companies for over $8.5 billion and divested around $7 billion of commoditized businesses such as chip manufacturing.
Her new book, “Good Power,” is filled with leadership lessons from Ginni's lifetime of learning, leading, and giving back. She sits on the board of JPMorgan Chase. Goes to Broadway shows when she can and likes to scuba dive.
So, the first thing Ginni is I feel like I need a title for you, because I did an interview with your friend Condoleezza Rice, in July in Sun Valley at our summer conference. And I toggled between “Madam Secretary" and “Dr. Rice.” And so, as I was doing research for you on this, I was sort of like, I need a title for Ginni here so that I'm actually not just calling you Ginni. I'm calling you something similar to one of those titles.
Ginni Rometty: No, no, it's so funny. Willy, thank you for having me. And please, it's Ginni. In fact, even after becoming CEO, my email was just Ginni. And because it's a little bit of an unusual name and certainly how I spell it G-I-N-N-I, it's all everyone has ever called me. There you go. That's good for us. It's such a pleasure to be here. And to all of your listeners, I cannot believe you have done 160 of these (episodes.) I mean when you talk about preparation - holy cow.
Willy Walker: So, I owe your predecessor, Sam Palmisano, as CEO of IBM a great thanks for introducing the two of us. Sam’s son-in-law Jack Balaban worked with me at Walker & Dunlop. When your new book came out, I saw it and I asked Jack whether you could reach out to Sam on my behalf, and Sam introduced the two of us. So, I'm deeply appreciative of the introduction. And one of the things you talk about in your book extensively is networks and the people who made your career successful. I'm extremely thankful that I have the relationship with both Jack and Sam to have been introduced to you. So, thanks to the two of them.
Your book, as I mentioned, is filled with all of these incredible, what I call life lessons, leadership lessons. I'm going to run through a couple here. We're going to dive into a number of these during it. Being in service of others, getting to the aha moment with clients. Arnie Sorenson at Marriott once said to you, “Be the best IBM you can be.” Your husband Mark, turning to you after he had built a putting green in your basement and you kind of pushing back on why Mark went and did that and he looked at you and he said, “Ginni, you've got to be present to vote.” In other words, if you're going to be in New York working, I get to do whatever I want in this home. “Make the complex simple and the simple scalable.” I stopped on that one, Ginni, for about 10 minutes and ran it through in my mind, making the complex simple and the simple scalable. And then the final one is a public company and something that you and I both have, both the pleasure and the burden at times of, of going to investors and analysts and talking to them about what we're up to in running publicly traded companies. The comment you said was once an investor said to you: “Always run the company for the long-term owner and not the short-term renter.” You and I both have met with plenty of hedge funds that were invested in IBM or Walker & Dunlop for as a renter and not a long-term owner.
But one of the other things that you say in the book that I kind of went back to throughout reading it was that people don't necessarily remember what you say or how you say it, but how you made them feel. And it made me think back on all the Walker webcasts I've done and the fact that I try to bring information and questions that get really good information out to the people who listen to the Walker Webcast. But I've never thought about it in the sense of how people should feel when they get done with listening to this hour. And so, my question to you, given we're going to talk about your book and your career, how should people feel after they listen to our discussion?
Ginni Rometty: Well, first, Willy, you obviously did your homework. So, I am really very humbled by that, that you would take all that time. And the points that you remembered make me feel good.
And how I would like anyone listening, because an hour of time is a lot of time. You know, back to one of those lessons. If people give you their time, you have to give them something in return. So, I would hope people feel inspired to keep working on something hard, even though it's really hard, that they can do it. If after they listen to this that they're like, yeah, you know, I can do anything I want to do and get it done. They have the power to do it.
And I will put a footnote: I hope that they feel because really one of the biggest things I wanted to get across in the book was that how you do what you do may be just as important as what you do. And I think that's something pretty much lost in the world of leadership right now.
Willy Walker: That touches on a point that you make throughout the book, which is that nobody can define who you are. You need to define who you are and live to who you are. I think a lot of that sort of comes out of the traumatic experience that you identify in the book of your father leaving your family when you were 16 years old. Talk for a moment about that trauma and then how you and your siblings and your mom kind of worked through that and worked out of that. But more of it is the enduring qualities that it gave to you from a leadership and from a personal sort of, I guess, ethos in the way you lived your life.
Ginni Rometty: Yeah, look, it was hard to write a book and talk personal. And so, you've done a lot of these interviews and you see a range of people who want to talk about personal things or don't. And I probably spent a lifetime not talking about them.
But the book starts on a point which is not to make anyone feel sorry for me, and not that I'm a victim. Quite the contrary. I start the book talking about what I happened to witness. My father did not know I was standing there, and I witnessed everything he said to my mother. And that day, which is a culmination of obviously years of things that had happened. He stood there in the garage and said to my mom, “I really don't care what happens to you. I don't care what happens to any of you.” I had three siblings. He told my mother she could work in the street for all he cared, and that would be the last I would see. And he would turn and leave. And this is not about being sort of being a victim or making my father a horrible person. I really started there to celebrate my mom.
To your point, so what did I learn? Because what my mother had to do, she was 34. She has no money, no home. She's got four little children. She has not had an education past high school and no job. So, she had to find a way. We had to go on food stamps, welfare. We're going to lose our house. She had to find a way, keep us in school even. And so, you know, got a little bit of education, got a little hourly job at night, a little more, a little better job, finally a job in the daytime, etc. And sort of fast forward all of that.
I think something at the root of me and for people to take away is that only you get to define who you are. Like my dad, she wasn't going to let him define her as a loser, as a divorcee. Not that that was bad - in that day though (in the 70s) She wasn't going to let him define her as all these negative things. My mom never said it, but each one and I always say, like I'm the underachiever of the group. My other three brothers and sisters are very successful. Like my mother will go, “I really don't know how this happened.” And it is really her because she never said it, but we just witnessed this idea that, hey, hey, hey, don't let someone define you – you define yourself.
The other big learning, which will then it’s funny now that I'm old and I look back, it's that all this fits in place would really be a silver thread in my life. What I would take away from watching my mom was that access and aptitude are two different things. My mom was bright. It wasn't that she didn't have some sense, but she had no access to anything. And it made me see, you know, God kind of spreads talent evenly around the world, access not so much. This will be a thread that leads to what I do today. It led to how I worked, how I led, the things I did with talent and people. Be careful access and aptitude are not equal. A lot of people with aptitude, but not necessarily the access to education and other things.
Willy Walker: So, in that two-year period from age 16 when your dad left to 18 when you went to Northwestern, you basically took care of your siblings. And you talk in the book extensively about the fact that your siblings were sort of your daughters to some degree. What's the good and the bad of Ginni Rometty that came out of that period of time? There's clearly a strong fire that came from you of being independent of wanting financial security, having this kind of tenacious spirit to work really hard, to be independent. What's the other side of all that? You mentioned briefly in the book about trust in people, and when people break Ginni Rometty’s trust, probably not a great place to be.
Ginni Rometty: You answered your own question, right?
Willy Walker: (Laughs) I took what you wrote in the book. I want to go a step further and say, is there anything else in there?
Ginni Rometty: Yeah, I do. I think out of that time, and it is true because decades would go by and we can, if we have time, talk about that, about being a woman in a very senior leadership position, and there was much discussion. Can you have children? Should you have children? Can you take care of them? What you know, people, dual careers, etc. And I actually end up spending some time in the book talking about that because it's a topic people always ask about and they actually make some wrong conclusions about. Well, gee the only reason Mark and I've been married 45 years don't have children is because that's what she had to sacrifice to be able to do what she did. The truth of the matter is, it was a conscious decision that we didn't because I know plenty of women in my spot, men, great men, too, that all have happy families and children or have raised them themselves. And so, I don't feel this is a binary decision. But at that time, what I did feel my mother always says, I know one of the reasons you don't have children is you've raised yours already. You feel like you've raised your children.
So, I don't feel it's a bad thing that came out of it. I feel it is a feeling that I did have. But what also came out of it, and it can drive people crazy. I mean, is that a) hard work can be a plus and it can be a minus, right? You're very driven. And that's only because you've been driven to have to take care of yourself and realize that you always have to be independent. So that has both a silver lining in and underbelly to it, that idea.
And your comment about loyalty - to me, I have great empathy for people. But once someone it's really hard for me once they've broken that trust to earn it back. And that's probably a manifestation of that time. But I'm very aware of it. So, it has to be a big thing. Now I have to be carrying out little things, big things that I better bring that in.
Willy Walker: So, you talk about access and access to opportunity, access to education. You were a great student. Your homework, as you said, was your hobby. And you got into Northwestern, and you went to Northwestern on a 75% scholarship, and you had to work really hard to find the other 25%. You talk in great detail about how you went around. I mean, you almost did bake sales to send Ginni to Northwestern to try and pay you that extra 25%.
You were the first to go to college I believe, maybe the second in your broader family, but you were the first out of clearly your siblings and your parents. What was it that made you strive to go to Northwestern rather than if you will and I'm not trying to just go to the University of Illinois that wouldn't have been the financial burden that it was. What was it that said to you, I really need to strive to go to Northwestern?
Ginni Rometty: Yeah. So, this is interesting. And again, I think about when I do these podcasts, like, what can I say that's going to help not just people. Oh, this is an interesting story, but like, what can they take away from it?
At the time, it was very different from today. I applied to two schools, University of Illinois, and Northwestern. I couldn't afford to apply to anymore and I was sort of knew, I think I can get into a state school, University of Illinois, and then I'll do this stretch school. But to me, the lesson to learn on that and why only two: Northwestern admitted people on and purely on your academics and then they provided needs-based tuition assistance.
And so that is to me a really important point in today's world where all the debate is about affirmative action or the Supreme Court ruling and what do people make? Does that sort of strike all this down? You know, I come from a time when there were no women and underrepresented minorities in many positions or schools. Schools did something to try to level the playing field, because that's what I think of as affirmative action is trying to say, you and I don't have exactly the same starting point, and can I at least do something to give us the same starting point? And then we go from there.
To this day, I'm Vice Chair at Northwestern now, still based on if you can get in on your credentials, we will help you find a way. So, for me, part of that was scholarships, loans, etc., that you just say. But the bigger takeaway was I knew it was a better school, no offense to anybody who went to University of Illinois - it has done very well over the decades, too. But I knew that if I could get in, between me and them, we would find a way to be able to afford to be able to be there. But I think the broader point is around, what that does as all of the people listening, you running businesses to not give up on things about giving people a fair starting point. Another thing I learned is where you start, like in my case, shouldn't determine where you end. And so, what can we do to compensate different starting points?
Willy Walker: So, you were literally “quarter poor” at Northwestern. As I was putting together a script, they said, you know, that's kind of a cool term. She was “quarter poor.” You were down to your last quarter, and you talk in the book about the fact that you had one quarter left and all of a sudden someone mentioned you to apply for a GM scholarship and you got that GM scholarship, which obviously changed the next two years of your life at Northwestern as it relates to having a GM scholarship, having summer internships at GM.
And back to your loyalty point, Ginni, when you had offers to go work for Hewlett-Packard and a bunch of West Coast technology firms, which is as an engineer where you wanted to go, you decided to go to GM out of that loyalty for them giving you that scholarship?
Ginni Rometty: Yeah. And I think this is actually an important point still. It's not blind loyalty, right? They had obviously paid my tuition then for two years and salaried me in a job and gave me a job with tenure, no strings attached. Now you see very little scholarships like that today from anyone. But in that day, it's what they did. I mean, talk about sort of a guardian angel idea, that it was a professor who said to me, look, I know this is you've got a lot of loans. You have this aid here. Go, go. They're going to pick one kid from each school, go interview for this. But it taught me, obviously, there is a bit about loyalty. I feel when someone invests a lot in you, you want to do something in return for them. And they did. I at least owed them a chance.
But I think the more valuable lesson I then got when I went to work for GM, which I think is about where anybody listening at different points in their career. I said I was lucky at an early age; I really saw the difference between a job and a career and that a job people go to. There were a lot of people around me that loved cars and that's fine. I wasn't passionate about cars. I liked them. But I was actually working on trucks and buses too. I had a computer science degree and my husband, he's the one that said to me, “Why not IBM? Why don't you go apply what you love to lots of industries and do this problem solving?” And I felt like at a really early age, I realized that it was a job to me, it wasn't a career. And the difference is the passion you feel about something you do. I mean, it's naive to think you're going to be passionate every minute of the day there. All of us have to do things we don't like to do at the same time in our jobs. But in the realm of what your firm does, you've got to feel some passion around it.
Willy Walker: When you went to IBM, you really got to know laser printers really, really well. If we still had laser printers around, now I know who can fix my laser printer.
Ginni Rometty: I could. I could.
Willy Walker: But when you were asked to jump into the services business, IBM wasn't in the services business. And they asked you to take a new role in creating a services business, a consulting business inside of IBM. And that was a pretty risky move. You talk in quite some detail about the conversations you had with Mark about whether you ought to take the risk inherent of moving into that type of a role, given your background, and given having the career path that you had at IBM. It surprised me, to be honest, that you would take the risk of moving into that less defined role rather than staying on, if you will, the more traditional corporate path. What was it that gave you the, if you will, the chutzpah, the ability to jump into that new realm?
Ginni Rometty: This is a good segway and probably into something else you would like to ask me. But they're really connected, just a little disjointed in time. There are a lot of people, I know like me. So, every time you see something new to do, I can think of ten reasons why I can't do it, not the three reasons why I can do it. And so, as you just said, I'd always been on a pretty tried and true career path. And so, when this new thing came out, it was full of unknowns. Meaning if it didn't work out that one path would never still be there. Really. And I hemmed and hawed over moving into something new, and it was really, again, one of these cases, my husband talking to you. But this would carry on through not just this job, it would carry on in other ways as I would go on in my career. Every time it was a new job, it would be, Oh, I don't think I can do it yet. I need more preparation; I need more skill.
And it would be through one of these conversations with my husband, Mark, that it would be probably one of the most profound learnings I would have in my life in what I share with people. There were a couple jobs after that one, Willy and I was working for someone, and he said, "Hey, I'm getting promoted, and I think you should take my job." And I said, "Oh, I am not ready for your job. I can do about a third of it. It's very large in IBM. It's global. I don't know these three pieces, etc." And he said, "Well, go to the interview, Ginni." And I went to the interview. I got offered the job, and my reaction was not what most people would think. My reaction was, "I'd like to go home and talk to my husband." I can still see the gentleman's face looking at me saying, “Okay.”
I call Mark, he listens to me. I'm going on blah, blah, blah, blah, blah. And he says, "Ginni, Ginni, I have one question. Do you think a man would have answered the question that way when offered the job?" I said no.
Now, I tell that story not because it was a gender story, really. What Mark was saying to me was, I've seen this movie many times now with you and you're very nervous. But then in six months you're going to have it done, knocked down, ready to go to the next thing. He's like, “Why do you do this over and over?” It crystallized it, almost it was an alternate name of the book, which was growth and comfort will never coexist. Willy, really the reason I even tell any of these stories in the first part of the book, it's that essence that for all of us to grow, you gotta start to equate risk with growth, not risk with the downside. Like, you know, why would you do something? And it would grow over time to me. I would begin to do very risky things over time, because I would start to associate anything I felt uncomfortable with knowing I was learning something. And that's a very freeing feeling. When you like, No, no, I got to do something I don't know because, God, I'm actually going to actually be on the other side. Painful in the middle. But on the other side, I'm going to come out with some other skills I don't have today. That's really good.
So that idea of growth and comfort never coexist, I would find it to be true for a person, I would find it to be true for IBM, a company, I would find it to be true for a country. And it's kind of at my heart of who I am.
My sister was talking to me this weekend and she said, my brother said to her, “Do you not remember what your sister always says? Growth and comfort never coexist.” You know, it's one of those. And so, to me, if people forget anything else of our webcast, maybe that will help them reframe risk and reframe how they look at taking some chances.
Willy Walker: And the punchline to the story you just told this after Mark said…
Ginni Rometty: Oh, I took the job, yeah.
Willy Walker: The punch line was as you took the job, but you went back in the next day to the gentleman who offered you the job. And he looked at you and said, “Never do that again.”
Ginni Rometty: He was doing that to help me. He said, don't ever do it again. And I said I understood. I understood exactly what he meant. And I'm not going to necessarily say gender, but because this resonates with men and women. But there are so many women around the world I know that have the same and there are a lot of studies that say women, I'll tell you the five things they can't do. Men will tell you the five things they can. This an issue that is like once you're cognizant of it, I would see it over and over again in hiring men and women for jobs. I would see the discussions would be about what a woman hasn't done yet, yet the experience, the man hasn't done it yet either. I mean, so I would see this kind of unconsciousness come through in so many different ways in the years to come.
Willy Walker: I had Julia Boorstin from CNBC here on the webcast, I don't know, six months ago and she has a book “When Women Lead” and one of the most impactful data points out of that book that I read was that men are far more successful in getting series A venture funding than women, because not that men will be asked, but men tend to look at the future and dream about the future, whereas women are much more practical about what their existing skills are. So, when they go to pitch a business to a VC firm, the women will tell the VC firm this is what we do today and a man will show up and say, no, but this is what we're going to do tomorrow. And series A funding goes to the vision for tomorrow, not the here and now. When you get into later rounds of venture funding, women are equally as capable at raising Series B, C, D, and E because it's actually on the performance of the company, not necessarily on the vision. And I thought that back to your point about women and men in interviews, that's a really important point to keep in mind.
Ginni Rometty: Yeah, this is so interesting. I would have to say to the team all the time, why do we talk about a woman with the questions based on experience while the man is on his potential? Which is exactly the story you just said. And it's just good learning to take away that you just have to be conscious of it.
Willy Walker: Right. So, the day you were named CEO of IBM, Sam had told you a couple of days before there was some media work to do on the press release and you couldn't tell anyone but Mark. And then the day that it comes out, you sit there, you watch CNBC, you see where all the analysts are saying, you know, this is going to be her tenure, what can we expect from her, etc., then you went back to your office, and you picked up the phone. You called the 20 people who had made you getting to that job possible, which I find to be just an incredible anecdote about you and what makes you what you are, but then also stopping and thanking all of those 20 people.
One of those people that you called Ginni was Pat O'Brien, one of your early manager leaders at IBM who you worked with. In the book you tell an anecdote about a discussion you had with Pat about appearance. If you could give a synopsis of that discussion as it relates to appearance and the real question I have: you mentioned in the book that this anecdote or this conversation really can't happen in corporate America today. It could happen back in the 1980s when you and Pat had the conversation, but it can't really happen today.
My question to you is, is that a good thing? Or do we miss the candor and the coaching that Pat showed to you because we have to be, if you will, more politically correct about what we talk about in the corporate world?
Ginni Rometty: Yeah. Well, I'll tell the story. And the answer, of course, is going to be a little bit of both what you just asked me, Willy. Not as a copout, but a little bit of both. So, the conversation Willy is referring to, and why I chose to share it, was Pat talked to me about my weight. For most of my life, I have struggled with my weight up and down, up, and down. I come from a good, hearty family that associates food with comfort and easing things. And so, I've got good, good genes on all of this.
So, at one time, I was probably - my goodness gracious, maybe 75 pounds more than I am now. He said to me, “Ginni, I just want you to look around and look at all these other people running these companies. They don't look like that.” And he said, “I just really am afraid that that's going to be a problem.” He was very nervous about this conversation. At first, I'm like, what are you trying to say? Are you talking about my weight? What are you trying to say? And he said, look, he really was trying to say to me, “I can't help what other people think. And I'm just telling you I hate to see something in your way.”
So many people - it’s funny Willy, you bring it up - because when I've done media interviews, it's the story of the few handfuls that people always go to, it is one of the stories and they really want to make it a bad thing about Pat.
I say, wait, before you conclude a bad thing about this man, he was my greatest supporter. I said, everything has a context. And in this world, you want to turn everything into a soundbite that has no context around it. And in that context was a man who had already taught me how to lead with great values. It's the same man who, when I had someone working for me telling very off-color jokes, but the top performer and people were starting to kind of complain about it and Pat said to me, “Oh, this is clear what you should do.” I'm a new manager. He said, “This is clear. You tell him one time it stops immediately, or you fire him. I don't care how good he is.” It was those kinds of things he taught me, which was how to lead with values and the big arc, and these would be, to me, the most valuable lessons I would learn about if really hard decisions are made based on values, they become really easy. So that same person is who said that to me, right? I knew he meant it out of goodness. And he did it the best way. I talk about having like a velvet hammer on things, he did it his best way, as awkward as that was for him to do. He was trying to be helpful to me.
So that's why I say, is it good or bad in today's world? People would shudder to talk about that today. And it's a shame because he didn't believe it. But he's saying, I can't help what I see out there. And it is what people you know; I can't take responsibility for how they're going to act. But I see this. Now, I will eventually work on this issue, I didn't at first. I don't remember doing another thing about it. After that, I knew he meant well, so be it.
Those of us that struggle with weight. No, it's a very hard thing to deal with, and I would eventually do it for my health as time went on. But you know, that's another whole podcast on that topic. But I think good or bad today, I think it's a shame that you don't get some really valuable coaching because people are afraid, but you can only give it when there's been a safety sort of circle built around it for someone to talk to you like that.
Willy Walker: You mentioned “velvet hammer “and how can someone create a velvet hammer? It's a real skill. It's being able to give hard information, but in a coaching consultative way, it's being able to take hard decisions and not be sort of thrown out to the dogs. But after making the hard decision, as you think about your skill of having a velvet hammer, what are the key attributes to being successful at having a velvet hammer?
Ginni Rometty: Yeah, I wanted to go back a second on something because when I wrote this book, (they won't need to buy Willy after listening to us.)
Willy Walker: But they definitely should buy it. It's really good.
Ginni Rometty: No, I'm teasing. Don't worry. That isn't my purpose of this at all.
It's called “Good Power.” After you talk to a fellow today from Harvard, these studies say 90% of people who get power do something bad with it, meaning they become more aggressive. They become armed. They may lie. They're combative, defensive, 90% of people that get power. And in my view, we all have power. My mom had power when she had nothing else. It's about convincing you that you have power like sort of as an individual, which is why I kind of talk about the power of me, we, other people, us, kind of society, these three realms, it grows over time, and it can be done with respect, which is going to get to this point you're asking me about a velvet hammer can be done with respect. It can unite people, and it can be about making progress, not perfection.
This idea of a velvet hammer came when a client actually said it to me. And it crystallized something I did. It's the idea that you can give people bad news but in a way that they can actually not just hear it, but they'll want to take action on it.
So, you say, well, what do you have to do in order to be able to do it? I think there's something I came to learn that it's a fundamental first step before you can do it. And I think this is important for your firm, your clients. You got to be in service of something. And it's kind of one of these first principles I learned - being in service of something means I am actually here to help you achieve your goal, and then as a result, I'll achieve mine. If you believe that about me, you will probably accept what I'm going to tell you assuming I deliver with respect. You're going to actually listen and be willing to sort of act on it because you realize it's coming from a place that I want to be in service of you. And so, I talk about this a lot in the book and how I learned it. I must say, people have a hard time understanding that: Do I just serve my customers or be in service of my customers?
You know, I just recently had my knee replaced and I talked to different surgeons. One surgeon, you know, hey, I get these done. My surgery looks perfect. The fact that you still can't walk, well, that's not my problem. Okay, I would say he served me.
I had another surgeon, my knee puffed up and all this stuff. He's like, Oh, no, this is not, you know, he wasn't done till I was able to do everything I could do before surgery. Right? He isn't done. He is in service of me.
Or the waiter who just dropped your food off, that’s serving you. But the guy who says, “Have a nice evening,” whatever that meant. You can tell the difference. A waiter is doing it because he's hopeful he'll get a tip, but it's not transactional. He doesn't know for sure if he'll get one. So, he did it first, knowing in return he might get something.
And so, to deliver bad news in a respectful way and have it actually be actioned on, I think comes from having that idea of that you've been in service of this person or this thing. They know that. They understand that you work on their behalf, hoping eventually it's to your benefit, but it's not transactional in the moment. Then it came from just delivering bad news with empathy, with respect, basics that you know, which are there's good things here, too, right? And then there are non-combative ways, the couple things that would make it better. And so, the client I had to deliver this message, a horrible message, by the way, to deliver about work they'd done and all of it being a waste and why. When I was done and it was very critical of him, but he came up to me, he said, you know, I thought it was going to be really upset. He was the CEO of this company. And he said, “No, no, you have a velvet hammer. You told me that in a way that made me want to act on it.” And so, I would always remember that in how I delivered bad news to people. And the root of it is being in service of and having empathy with what you're about to do.
Willy Walker: Another characteristic that you have from your leadership was a) Doing more homework than anybody else. So, you knew all the issues that were on the table as it relates to both the good and the bad feedback. You were giving them some great idea that IBM had come up with, etc., etc. so you were always prepared, but you also did a lot of research on what you called tidbits. And outside the mandate research that made you know your clients potentially pieces of their background, their work, their family life, whatever, that added an additional context to it.
Give an example of one of those tidbits and why that was so effective as it relates to your leadership of the consulting practice at IBM and how it made you so effective not only a leader, but quite honestly, I would assume that was super effective on the sales side of winning engagements.
Ginni Rometty: Yeah. So, if I may, just again, back to people who are listening, you know, running businesses or running their career and what they're doing. I tried to give some practical advice on this topic, and I should say the whole book is revisionist history, right? So, this is now that I'm old and I can look back. There was no divine brilliance I had at all, and I give credit to lots of people that I learned these things from. So, this is just being willing to be a learner.
That idea of how to be in service of and to do something good for your client comes from those. Be really clear in your mind what you said when we started, you give me this hour and I'd better give you something in return. Okay. So, this would be very deep in my head. What are ways to give you something in return? So, I don't believe having a meeting with someone, if they've given you their time, is on one hand. You could just go and listen the whole time and let them talk. That's better than you are talking the whole time. That's good. The other is you listen to them and try to say, How can I extend what they know? And give them something else to solve their issue or whatever it is that they could either draw comparison to, are not aware of or is a new idea, an aha! for them.
So, to prepare for that I would have to really it would be the kind of thing you should do I think any of us do professionally, it's just this constant curiosity. And so, you know your clients, you know what's coming up, things I read, I'm like, that's an interesting idea for somebody. All right, jot that down for this client A, client B, you're like, yeah, you know what? I can see how those three examples I've seen one great client do could apply into another place.
It gets down to the root of are you constantly both listening and wanting to learn and asking questions? I know that is so basic, but people do not listen with an intent to learn very often. They listen with an intent to make their point. And that is so different than if you listen with an intent to learn. If you do that, you'll collect all these tidbits. Now, for me, I had to write them down a lot to prepare just because I'd forget them. It's my way of remembering things, but it gets back to this idea of the biggest way you build a network. You mentioned this when we started is by what you give, not what you get.
If you can really get that in your practice about you give me time, I get to give you something valuable. I've got to help you with things you might not already know. I've got to give you insights or ways to think about things, that aha! It all gets back to this: I respect your time, that preparation. I mean, I do write about it. It becomes a little bit legendary. It can drive people a little bit crazy as time goes on, I mean, I could be obsessive about this. I have to watch it, all that kind of stuff.
But in the end, I was smarter and better for it and I could help people more for it. I think you're a service business, and service isn't transactional. It shouldn't be in my mind. It is about: what do they need? If I help them do that, they're going to be your client for life. May not at this moment, but that does come around. The same is true with relationships, right? I called those 20 people. Through time, I'd given a lot to them, but I got a lot in return.
People, I think, have a way misunderstood view of networks as an example, they think networks mean you're a networker, you just know people. I think networks come from what you give to people and over time it comes back to you. And it really, as time goes on, those people offer you perspectives that you sometimes can't see. Yeah, I branched off on a few things.
Willy Walker: The only other thing that I'll point out that I think is another piece to your personality and your leadership style was writing handwritten notes. In an age where it's all too easy to zap someone a text and say, “Thank you for the meeting,” or send them an email that was AI generated for all we know, the idea of sitting down with a piece of paper and a pen and actually writing someone a handwritten note that clearly was a marque of your leadership style.
Ginni Rometty: You know what? It may sound kooky. I don't know. Do you get handwritten notes? Do you remember them more than the other ones Willy, I'm curious.
Willy Walker: Of course.
Just as an aside, I went to a wedding two weeks ago, and I'd written a thank you note to the people who invited me to the wedding. They wrote me a thank you note for showing up at the wedding, which I thought I've never gotten a thank you note for going to a wedding. And I got home from vacation. I was like, Wow, that's quite something. But yeah, it makes a big difference.
Ginni Rometty: It's not like I'm on a crusade about handwritten notes. The point to me was it's a sign of respect to someone because you've obviously taken more time to do that, and you've personalized it. And when it comes to change management, I think one of the greatest ways to get people to do things they don't want to do is to personalize it for them. It's all really in that big point to why I bothered to do those personal notes.
Trust me, I'm on LinkedIn. If you ever get these messages and LinkedIn tells you what to respond back, it'll generate it for you. And I almost feel like oh that is so lazy of me. If I hit that button, that person's going to know. It's like a machine, hey, thanks for, you know, and I really worry about that, right. So, in the big arc what that means here.
Willy Walker: So let's take that as a segue into AI because that's kind of a perfect segue because you talk a lot in the book, Ginni, about trust and how the whole PRISM issue and the work that you did and had the general counsel at IBM write the letter, which to this day is one of the most straightforward, transparent statements by a U.S. technology company or a global technology company as it relates to what you will and won't do as it relates to people's data, as it relates to requests by the federal government for access to the data and what IBM would do in response to a federal government inquiry for people's individual data.
But I think AI scares a lot of people today, and the implications of it are both exciting from an R&D standpoint. At our summer conference, we talked extensively about the work that DeepMind has been doing on Alpha Go, Alpha Fold, Alpha Zero and what that's done on the Alpha Fold to allow us to get incredible insights into proteins that have been released to all medical research facilities as well as drug manufacturers. And now that we have the sequencing of all the proteins out there, just how that will accelerate the medical research and the development of drugs and things of that nature, that's an incredibly huge benefit to humanity and potentially for how long you and I live.
On the flip side of it all there to your point of 90% of people who get power, abuse that power in some way. We all feel that AI might get some power over us that's unleashed, and we'll never be able to reel it back in.
As having been there right at the beginning when you put Watson to it and had the Jeopardy game and watched Watson beat the two Best Jeopardy players. I also thought it was amazing that you actually brought in Alex Trebek to do that trial. I thought that was I mean, I was sitting there saying, leave it to a big company like IBM to actually put on the Jeopardy game and have Watson go and compete with them and do it in a kind of a studio. But they actually have Alex Trebek there. I was like, okay, that's pretty cool. But anyway, besides that, you've been there right from the beginning. You've seen this technology evolve. You know it better than almost anybody.
Does it scare the pants off of you or does it excite you or is it a combination of both?
Ginni Rometty: Yeah. I feel like all my answers have been a combination of both, which is an interesting point I make in this book, by the way. It really is about good power is how to manage tension. Because you and I don’t get to live in a black and white world. This is one of things I always say to the media that I hated, I would say, look, I got it. You want to write in black and white. It's not the world I get to live in. It's a gray world here of everything. And so, this is another one of those questions like that.
And I was just with a big health care group on Sunday night, I won't say, but you would all know them, world renowned and so talking about AI, you're right. I was there in the beginning.
So, what are my most important lessons that are true then and I told these guys it's true today. Look, I think AI will do some of the greatest in generative AI, which has brought it more to the masses. And just for the group listening, I'm going to really simplify, what general AI is – it’s ChatGPT. It is, but what Chat really does, and this will help you then put in perspective your question. It's really just predicting the next set of words. Oh, interesting. It's just predicting, it doesn't really understand it. It's predicting the next set of words. So that should tell you that if it's fueled with a lot of things that are not right, it's going to come out that way, too. But very professional and look very, very like it's extremely well authorized what it is.
So, knowing that that's what technology does, on one hand, I can still see great opportunities like I did before, to get certain types of health care to people who never could get it before. You're going to be able to take mundane things people have to do to synthesize information, get it done really fast, etc. So, all the positives you read, but the negatives will be bigger and faster. They come with it. And so, to me, this is what's different right now at this point in time. So, I would say to people, what's different now? I am even more excited. You know, McKinsey will say it's $16 trillion of productivity by 2030 is one of the study's most repeated. But this will not be about the technology. What we now face is going to be about people and trust in this technology, whether we ever see the good or we only see the bad side come out of it.
Like we have an election coming up. Do you not think the countries that I could name are not funneling tons of bad information in there now because it learns from what's out in the big Wild. Okay, about what's going to happen with elections. And this will be our first test, by the way, of bad things happening. I think one of the big ones will be on the election scale.
So, I would say to you, to anybody out there, think of it when you think about these technologies, think about people and trust. On the people's side, what I witnessed specifically, when you want to now use this in a really professional arena, is that if people don't understand the technology, they won't trust it and they won't use it. They'll fear it. In fact, Kissinger, in his AI book, says things we don't understand, we revolt or fear. And as you know, it is not explainable too well right now. And why does it come up with the answers it comes up with? To a normal person like you and I.
So, what I witnessed in health care a decade ago was still true, why did doctors push it away? Because their first question was, well, why? Why did you come up with this? Or even if it was more right than a doctor, if it's not 100%, people would say, whoa, I can't trust this now. It's a very interesting behavioral difference.
So, what my view on to see good things, we should apply it in lots of what I would call low risk areas. In higher risk areas when it comes to your health, the election, financial fraud. I think now we gotta fix what we did last time and put things like liability responsibility on everyone who puts the stuff out there. We don't have that on the Internet right now. We knew social media could have some downsides to it, but they kind of have a get out of free jail card on how the laws are currently written. So going forward, we would do it differently.
So, I think great things, but I think we can clearly go faster on the bad things as well, which is why I write all about, hey, look, good stewardship is just managing the positive and the negative at the same time. Don't just go work on the positives and forget these negatives and don't just dwell on the negatives, which is why to me, this is not about rhetoric and people saying, Oh, stop that. You can't stop the technology. So now what can you do?
As a company, everybody listening, people using it focus on how to get people to trust it, focus on how to train it with data you trust. You can take these models and don't just use the big one everyone uses. You can take one in a large language model, and you can train it with your data. You can audit yourself; you can be sure it's free of bias, you can keep checking it and in which case it's going to do great things. It's going to make customer service people perform better and it can help H.R. all these things.
But I would do everything through the lens of trust and changing how people work. The other big thing I learned is if you just try to drop this stuff into how you currently run your business, I think it's going to be a mess. I watched it be a complete mess. People go, Hey, I work hard already. You're going to just dump this on top of what I do? Instead, you have to rethink how they do their work, train them to do new things. I could go on forever on this. So, the takeaway, though, is people and trust are what we should focus on. The technology is going to continue to evolve, and it will be very useful. But where we end with having people reimagine their work and then trust these outcomes will determine where we end with this technology.
Willy Walker: I think it's really interesting your comment there as it relates to sort of auditing the use of it. In the book, you talk about your efforts at IBM as it relates to diversity, inclusion, and equal pay. One of the things that I thought was so interesting was just the way that you tasked your managers with going in and auditing their own group. I mean, it's like you can do things that are corporate, let alone a company like IBM, which I can't even imagine what it's like to try and manage an organization that's that big and that complex. But when you get to a certain scale, there's sort of like, we're just going to do this on a corporate level, but you don't drop it down. And it was very evident and you're talking about what you said to managers and groups go through and do an audit and look at all the women and look at all the men in your group. And if there is pay disparity, fix it. But this isn't like, you know, we're for promoting women. It's like going down to the actual numbers in your P&L on an annual basis. Look at what you pay women. Look at what you pay men. And if they aren't getting equal pay, you need to make the adjustment. And I thought it was just exactly like people talk platitudes, but you actually brought it down to the action item that actually got you there at IBM.
Ginni Rometty: Yeah, that is just a general point that I learned from a lot of great people, meaning, if you really have values and you believe them, you take action. You don't just talk. Your actions speak for your words more than your words do.
Willy Walker: Yeah. On Cloud, Ginni, you talked extensively about the head start that Amazon and Microsoft had on IBM and getting into Cloud. You got into Cloud, you invested in Cloud, and then you created what you deemed the hybrid cloud strategy, and you bought Red Hat, the largest acquisition that IBM had done. I think it was $36 billion you paid for Red Hat.
The hybrid cloud strategy, given that Amazon and Microsoft had. I guess my question is this: why they had such a head start is because they had the consumer business, they had a consumer facing business versus you being more B2B. Explain for a moment why they got such a head start. Is it that Amazon had those, you know, Joe's surf shop, it was on Amazon and therefore Joe's surf shop wanted to use their cloud, whereas Marriott, a relationship that you talk about extensively in the book where Arnie Sorenson and Marriott had their big mainframe computers and their own computing, therefore they weren't looking to IBM for cloud services. And that's what allowed Amazon and Microsoft to jump ahead?
Ginni Rometty: I'm going to try to do it in a way that I hope everyone will take away a thought on this is that the point I'm making is they had started long before us, so they had time on their side.
So, what does it mean to have had a consumer business? We're in a world where you can start by building something really complex or start with the easy thing. By nature of what IBM does, it's mission critical work. It's always in this complex arena. These businesses started with the most simple, and I think you see this with lots of companies now.
Where do they start? They start from the simple and they move up. It is easier to be simple and up than complex and come down. So, when what they had when I say consumer is, you know, what did it do? Starting with shopping, things like that are very “consumable” as a way because it's interfacing with millions of just individual users. So, it's got to be easy to use, frictionless, fast. Right. So, they live in a world that puts a premium on simplicity and in speed. And those are not when you live in a complex world, you put a premium on security, being able to take care of every situation possible. But when you start down that path, you become complex to people, right? Because, yes, you may be the most secure and you can handle every single case that could possibly happen. They're two different worlds, and I think there's something to be said now - what did we have to learn? We had to make ourself consumable. We had to work, be able to work faster in addition to having the products.
So that to me, for anybody out there in your own business, boy, if you can't make things consumable and be able to move fast, that is the characteristic that they really put a premium on in business everywhere and we're able to do so we had to teach ourselves those things. Right. So how do we render as you say, the complex simple and what we did to be able to compete.
Again, I want to try to make it in a way that's useful given the kind of business you're in and many of your clients are in. What we used to do is everybody got built their own individual homestead here in their own mansion and walls and everything. You move into a world where there are multi-family homes and buildings everywhere.
Willy Walker: Perfectly done analogy, Ginni, that's great.
Ginni Rometty: You share the plumbing, you have the same elevator, you know, a bad guy can go from one floor to the next. It's really quite similar. You know, you get your two choices, where we finally ended instead of trying to be the apartment condo guy, instead of the residential single-family dwelling, we said to ourselves, look, the reality is all of our clients, they'll never get to live in if they were born brand new, they're going to build the condo building, but they're not. So, they're going to end up living in this village made up of all of these things in the world of a hybrid cloud to connect all those things together and be able to have families move from one place to another seamlessly.
So, in the end I think we ended up being right. That is the world everyone's living in is that some two things go in a cloud, something stays in your building, some share between the two. Some go there for a while, some because, okay, China shut you down. You had to move it. That's what a hybrid cloud is connecting all those single-family dwellings and the condos together.
Willy Walker: One of the hottest spaces in the housing market is build for rent so you're living in a detached single-family home, but you're actually renting it. So exactly what you're telling exactly straight to where we are today, which is that BFR is a really hot space in the real estate industry.
A couple other things before we wrap this up. When you became CEO of IBM, you were the 19th female CEO of a Fortune 500 company. Today there are over 50. So, in the last 12 years, we've made great progress as it relates to women in leadership positions of Fortune 500 companies. Do you think there is momentum that keeps moving Ginni, And in the proper direction, if it sort of stayed static for quite some time in that sort of low teens and it seems like right now, we've had a real surge. Do you think that has to do with something that has materially changed in the way that corporate ranks are being populated by women and women being given the opportunity? Or do you think this might be just an anomaly now where we kind of spike up and then revert back to a lower number?
Ginni Rometty: Look, even when you say the numbers you said it's hardly a spike after all that. No, it's a tiny number. And so, yes, it's progress. So, I'm a big fan of celebrating some progress, it is not perfection.
I do worry with just the sentiment out there today, that anything to kind of take any underrepresented group and try to give them the same starting line is frowned upon or looked at as being, you know, that's not fair to do. And that is my bigger worry. Whether that's women or whether that is blacks in different positions or Hispanics or other underrepresented groups, I feel the same about the answer overall and Willy, if I can, in our last minute. It's why this big arc again the book talks a lot about the power you have as an individual when you transition to running and caring about other people, but then realize you do have the power to make sort of institutional change on a broad basis. You may not feel it, but you do.
And to me, one of the biggest things right now in the world is that more people need a better opportunity. And it's a little bit whether it's women to be CEOs or just generally speaking, in the population. I think one of the biggest sorts of things I fear for democracy is not enough people feel they have a better future, whether it's women or other groups. And this is why I do a lot of work right now. If I can end on this point, that the work I do today is from something I learned through all my 40 years and back to my mom about access, access and aptitude are not equal. Meaning a lot of smart people out there, but they may not all have access to these great things. And if you don't think you have a better future or your kids aren't going to have a better job, then you start to say, Hey, let's vote on something else, or let's have a riot, let's storm this, let's do that. You look for a different system.
And so, the answer to that question and others to me lies in the work all of us can do to give more people good opportunities right now. How I've manifested that is something I have learned about hiring people for skills, not just their degrees. If you do that, you will end up working with many underrepresented groups. Because a fact I learned, which I had no idea until I stumbled into it, 65% of Americans do not have a college degree. 80% of black Americans do not have a college degree. And I could quote the same numbers in every developed country in the world. Yet all of our companies, maybe your company, I don't know, mine. 100% of our good jobs require a college degree.
My experience taught me that wasn't true. To get started, I'll bet 50% of my jobs that's what it turned out to be. We went through a decade-long piece of work re-credentialing jobs and getting people to understand that this wasn't lowering the bar. This was just recognizing people had different starting points. When we started hiring people with just an associate degree, from a high school in a community college in an underrepresented area, they turned out to be as productive. Same results. They were more loyal, more retentive. 75% did go on to get degrees, just didn't have the money to do it to start. And I got a more inclusive workforce out of it.
So, if anything I could also leave people with, back to your question. Yes, women, but all underrepresented groups. Is this idea that one of the biggest structural barriers is that we all require college degrees for our good jobs? And I bet if you rewrote the job based on a skill, not just a degree, you would be surprised how many people qualify to get started.
And so that's what I do now. It's called Skills First, it’s a movement. Some friends and I have created a group called OneTen, a million black employees without four-year degrees into middle class jobs, upwardly mobile, whether it's Delta and Ed Bastian taking off the requirement for pilots to have a four-year degree, get a thousand applicants the next day, They get it through other training in other ways. Cleveland Clinic in Cleveland, almost all jobs other than a doctor now don't require a college degree to start. And we need caregivers. You know, it's amazing to see the people in this country that have skill if given a chance. Then it changes your whole culture for everybody to be around promoting them and advancing them on skills, not just these sometimes-false indicators.
Again, I'm vice chair of a university. People are: you think college isn't worth it? No, no. Well, the money on some colleges is not worth it. Okay. And with the world of AI, we’re moving into, you and me and everybody are going to have to retrain ourselves every three years. So, we better kind of get used to this idea of a skills first world, because to me, one of the greatest implications of AI is that it is that education will no longer be once and done. So, I had to get that in.
Willy Walker: It's great. My final question to you is this: you've spoken in front of huge audiences. You've been on national television more times than you could possibly remember. What makes you most nervous – presenting in front of a group of several thousand people, going on live national television or teeing off at the first green at Augusta National?
Ginni Rometty: Golfing for sure.
Willy Walker: (Laughs) I asked Condoleezza the exact same question because she's had the exact same types of experiences and she said no doubt teeing off at Augusta National.
Ginni Rometty: Isn’t that the truth? The other two preparations can make you better. The third preparation has not made me better. No matter how hard I've tried.
Willy Walker: She said the first time she ever teed off; it was the most nerve-wracking moment she's ever had. And she literally said, I don't even remember where the ball landed. What I do know is it got in the air, and I was very thankful that it did.
Ginni Rometty: No doubt about that. No doubt.
Willy Walker: It's great. I thank you so much for your time and your book is absolutely fantastic and it's been a real pleasure and an honor to have you on.
Ginni Rometty: My pleasure. Thank you for doing this. And I hope your listeners got something of value for the hour they gave us.
Willy Walker: I'm sure they did. Thanks again, Ginni. Thanks, everyone. Have a great day.
