Ginni Rometty: IBM CEO on Leadership, Power, and Adversity

Lex Fridman Podcast #362 – Ginni Rometty: IBM CEO on Leadership, Power, and Adversity Machine transcription by Qwen3-ASR 0.6B (MLX, local, Apache-2.0). May contain recognition errors. The following is a conversation with Genie Vermetti, who was a long-time 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. And now a quick few second mention of each sponsor. Check them out in the description. It's the best way to support this podcast. We got Athletic Greens for health, ExpressVPN for privacy and security and InsideTracker for biological monitoring. Choose wisely, my friends. Also, if you want to work with our team, we're always hiring. Go to lexfreeman dot com slash hiring. And now onto the full ad reads. As always, no ads in the middle. I try to make this interesting, but if you skip them, please still check our sponsors. I enjoy their stuff, maybe you will too. This show is brought to you by Athletic Greens and the AG One Drink, which is an all in one daily drink to support better health and peak performance. I've drank it twice already. It's delicious and it's a refreshing start. For usually the second work session of the day, I start the day with a cup of coffee and just deep deep deep focus on the hardest task of the day, and then I break the fast with Athletic Greens either with a workout before or if I'm not working out that day. Just with a kind of mental break. A friend of mine has recently been pushing me to meditate, and so I've been taking that midday, a point as a kind of another opportunity to return to what I usually do in the morning, which is repeat the mantra for the day. 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And there's all kinds of information you can get from blood data, DNA data, fitness tracker data, all that kind of stuff, and basically analyze. What can be optimized about your body? I think there's a lot of interesting approaches to the way you optimize your body. It's important to have that data and it's important to make the right decisions based on that data, but not over obsess about the data and that's a really nice balance. Now if you're just completely blind and just kind of hope everything is going to turn out okay until you end up in a hospital, that's not the way to go. So the balance there for me is you should be taking blood tests like with InsideTracker and getting information about your body that you can get from that data and then make decisions based on that and then that's it. Pick the low hanging fruit of that fruit tree that represents the problems of life. I guess what that horrible metaphor means is that you should fix the easy problems and that means the things that are obviously wrong based on the data you collect from your blood. Okay, get special savings for a limited time when you go to insidetracker dot com slash lex. This is the lexfreeman podcast. To support it, please check out our sponsors in the description. And now dear friends, here's Genie Vermetti. You worked at IBM for over 40 years, starting as a systems engineer and you ran the company as chairman president CEO from 2011 to 2020. IBM is one of the largest tech companies in the world with. Maybe you can correct me on this with about 280 thousand employees. What are the biggest challenges running the company of that size? Let's start with a sort of big overview question. The biggest challenges I think are not in running them, it's in changing them. And that idea to know what you should change and what you should not change. Actually, people don't always ask that question. What should endure, even if it has to be modernized. But what should endure, and then I found the hardest part was changing how work got done at such a big company. What was the parts that you thought should endure? The core of the company that was beautiful and powerful and could persist through time that it should persist through time. I'd be interested. Do you have a perception of what you think it would be? Do I have a perception? Well, I'm romantic for a history of long running companies, so there's kind of a tradition as a AI person to me. IBM has some epic sort of research accomplishments. Yes, where you show off you know Deep Blue and Watson, just impressive big moonshot challenges and accomplishing those. But that's I think that's probably a small part of what IBM is. That's mostly like the. The sexy public facing part. Yeah, no, well certainly the research part itself right is over three thousand so it's not that small. That's a pretty big research. But the part that should endure ends up being. You know, company that does things that are essential to the world, meaning the who you know. Think back, you said you're romantic. It was the 30s, the social security system. It was putting the man on the moon. It was you know to this day banks don't run, you know railroads don't run. That is at its core, it's doing mission critical work, and so that part I think is at its core it's a business to business company. And at its core, it's about doing things that are really important to the world becoming running and being better. Running the infrastructure of the world, so doing it at scale, doing reliably. Yes, secure in this world that's like everything. 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 loved 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 is below the surface. So many people because 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's 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 it changes. But I think at its core it's that be essential. You said moonshot can all be moonshots because moonshots don't always work, but mission critical work. So, given the size though, when you started running it, did you feel the sort of thing that people usually associate with size which is bureaucracy. And maybe the aspect of size that hinder progress or hinder pivoting, did you feel that? You would, if for lots of reasons. I think when you're a big company, sometimes people think of process as the client themselves, or the you know 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 in boy there's a premium on it is speed right that in our industry, you got to be fast and go back like when I took over and it was 2012. You know we had a lot of catching up to do and a lot of things to do and it was moving so fast and as you well know all those trends were happening at once which made them go even faster and so pretty unprecedented actually for that many trends to be at one time and I used to say to people go faster go faster go faster and honestly. I've tired them out. I mean, it kind of dawned on me that when you're that big, that's a really valuable lesson, and it taught me like the how's perhaps more important than the what because. If I didn't do something to change how work was done, like change those processes or you know give them new tools, help them with skills, they couldn't they'll just like do the same thing faster. If someone tells you you know you got hiking boots and they're like no go run a marathon, you're like I can't do it in those boots, but so you've got to do something and at first. I think the ways for big companies I would call them like blunt clubs. You do what everyone does. You reduce layers because if you reduce layers, decisions go faster. There's just it's math. If there's less decision points, things go faster. You do the blunt club thing and then after that though it did lead me down a you know a long journey. Of they sound like buzzwords, but if you really do them at scale, they're hard around things like agile. And because you really got to change the way work gets done, and we ended up training god hundreds of thousands of people on that stuff to really change it correctly on how to do it correctly. That's right versus because everybody talks about it, but the idea that you would really have small multidisciplinary teams work from the outside in set those sort of interim steps you know take the feedback pivot and then do it on not just products do it on lots of things. Was it's a hard to do at scale. People always say oh I got this agile group over here of 40 people, but not when you're a couple hundred thousand people you got to get a lot of people to work that way. The blunt club thing you're talking about so flatten the organization as much as possible. Yeah, yeah, I probably reduce the layers of management by half, and so that does that has lots of benefits right time to a decision, more autonomy to people because and then the idea of like faster clarity of of where you're going because you're not just filtered through so many different layers and I think it's the kind of thing a lot of companies if you're big have to just keep going through it's kind of like grass grows you know it just comes back and you got to go back down and and work on it so it's a natural thing. But I hear so many people talk about it lex this idea of like okay well who makes a decision you've often heard nobody can say yes and everybody can say no and that's actually what you're trying to get out of a system like that. So I mean your book in general the the way you lead is very much about we and us you know the the power of we, but is there times when a leader has to step in and be almost autocratic take control and make hard unpopular decisions. Oh I am sure you know the answer to that and and it is of course yes fun to hear you say fun to say it yeah you know because I actually a there's a leader for a time but then there's a leader for a situation right and so I've had to do plenty of unpopular things. I think anytime 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 going to change the way we do our semiconductors and a whole different philosophy. You have no choice. I mean and in times of crisis as well you got to be I would say it's not a popularity contest so that's none of these jobs are popularity contests. I don't care if your company's got one person or half a million they're not popularity contests. But psychologically it's difficult to to sort of step in as a new CEO and. To because you're fighting against tradition against all these people that act like experts of their thing and they are experts of their thing to step in and say we have to do differently. When you got to change a company, it's really tempting to say throw everything else out back to that what must endure right, but I know when I took over to start I knew how much had to change more I got into it I could see wow a lot more had to change right because we needed a platform we'd always done our best when we had a platform a technology platform you will go back in time and you'll think of the mainframe systems you'll think of the PC you'll think of perhaps middleware you know you could even call services a platform. We needed a platform, the next platform here to be there. Skills when I took over if I we inventoryed who had modern skills for the future it was two out of 10 people for the future not that they didn't have relevant skills today but for the future two out of 10 yikes that's a big problem right. The the speed at which things were getting done that has to so you got so much to do and you say is that is that a scary thing yes do you have to sometimes dictate yes but I did find and it is worth it I know every big company I know my good friend that runs General Motors as she's had to change. Go back to what is them them you know and when you do that that back to be essential we kind of started with hey it's be essential then the next thing I did with the team was say okay now this means new era of computing new buyers are out there and eh we better have new skills okay now the next thing how do you operationalize it and it just takes some time. But you can engineer that and get get people to build belief. And for the skills that that means that means hiring and that means training. Yes, 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. 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 got to fit in these interviews I got to hire someone to get this done okay then time would go on I'm like oh that's not very good in fact someone once said to me hey hire the best people to work for you and your job gets a lot easier okay I should spend more time on this topic spend more time on it then it was like okay hire experts okay okay hired a lot of experts over my life. And then I was really like an epiphany and it really happened over my tenure running the company and having to change skills. If someone's an expert at something and has just done that for 30 years, the odds of them really wanting to change a lot are pretty low, and when you're in a really dynamic industry that's a problem. And so okay that was like kind of my first revelation on this and then when I looked at hiring, I can remember when I started my job we needed cyber people and I go out there and I look unemployment in the U S 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. That led me down a path and 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 and high school with a community college. We gave them internships, direction on curriculum. 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 don't don't I'm deeply offended. No, you should not be and I you know I'm vice chair at Northwestern one of the vice chair 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. So the interview process the questions you ask everything changed the kind of things you talk to them about is try to get at how curious they are about what. Testing and I mean there's we triangulated around it lots of ways and now look they're 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 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 got to get some kind of contemporary skills and if you took that approach you can bring them back into the workforce. Yeah, I think some interesting combination of humility and passion because like you said, experts sometimes lack humility. If they call themselves an expert for a few too many years, so you have to have that beginner's mind and a passion to be able to aggressively constantly be a beginner at everything and learn and learn and learn. You know I I saw it firsthand when we were beginning this path you know down 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 sometimes say shiny objects trained in shiny objects come on in, but I saw something it was another one of these you're not a shiny object I'm not saying that it's a but I learned something okay some of them did fantastic and others they're like well let me school you on everything but they didn't realize like we did really mission critical work and they break a bank I mean they would not understand the certain kind of security and the auditability and everything they had to go on and then I watched IBM people say. Oh, I actually could learn some. Some are like yeah okay I don't know how to do that's a really good thing I could learn and in the end there was not like one group was a winner and one was a loser. The winners were the people who were willing to learn from each other. I mean it was to me it was very stark example of that point and I and I saw it firsthand. So that's why I'm so committed to this idea about skills first and that's how people should be hired promoted paid you name it. Yeah, the AI in general it seems like nobody really understands now what the future will look like we're all trying to figure it out so like what you know IBM will look like in 50 years. In relation to the the software business to AI is unknown what Google will look like what all these companies are trying to figure it out out and that means constantly learning taking risks all of those things and nobody is really skilled in AI because you're absolutely right that's right I couldn't agree more with you on that you you wrote in the book speaking of hiring quote my drive for perfection often meant I only focused on what needed to change without acknowledging the positive this could keep people from trusting themselves it could take me a while to learn that just because I could point something out didn't mean I should I still spotted errors but I became more deliberate about what I mentioned and sent back to get fixed I also tried to curtail my tendency to micromanage and let people execute I had to stop assuming my way was the best or only way I was learning that giving other people control builds their confidence and that constantly trying to control people destroys it so what's the right balance between showing the way and helping people find the way 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 because 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 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 doesn't mean 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 the values aren't deeply rooted and when a storm comes it's easy to uproot and so I always felt like when it was that time I showed it I got taught that so young is it at IBM and even General Motors that 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 and not to me but to other people and it really offended people and 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 that to me isn't the kind that like when do you let go of stuff right so the values and relationships with with clients yeah whatever you're in service of and and and the other thing was I really felt is really important to role model learning right so you know I can remember when we started down the journey and we went on to this thing called it think Academy IBM's longtime motto had been think and we said okay I'm going to 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 got to get kind of have some skin in this game and understand it I taught the first hour of every month for four years now nice okay I had to learn something so but it made me but I've like okay if I can teach the shoe can do it right I mean you know kind of thing so it was a compulsory Thursday night education for you a little I'm a little bit better prepared than that yes you're so right yes so you you prepare yeah so like personality habits you like to prepare yeah but there's roots in that go back deeply deeply deeply deeply and I think it's an interesting reason so why do why are you you're prepared my friend yes you are you prepare for your interviews ah sure the rest you wing yeah I wing but that's okay I mean you don't have to prepare everything I don't prepare everything either no but I I unfortunately wing stuff I save it to last minute 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 that can be that's very true with some people I mean so I'm a programmer engineer at heart and so so programmers famously overestimate or underestimate sorry how long that something is going to take and so I just everything 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'll be lazy sitting on a beach with a pina colada and relaxing yeah I don't know so that we have to know ourselves but for you for me you like to prepare yeah it came from a few different places I mean one would have been as a as a kid I think I was not a memorizer and my brother is brilliant he can he read it once boom done and so I always wanted to understand like how something happened didn't matter what it was I was doing whether it was algebra theorems I always wanted don't give me the answer don't give me the answer you know I want to figure it out figure so I could reproduce it again and didn't have to memorize so it started with that and then over time okay so I was in university in the 70s when I was in engineering school I was the only woman yeah I meet people still to this day and they're like oh I remember you I'm like yeah sorry I don't remember you there were three of you one of me and I think you already get that feeling of okay I better really study hard because whatever I say is going to be remembered in this class good or bad and it started there so in some ways I did it for two reasons early on I think it was a shield for confidence the more I studied the more prepared I was the more confident that's probably still true to this day the the second reason I did it evolved over time and became different to prepare um if I was really prepared then when we're in the moment I can really listen to you see because I don't have to be doing all this stuff on the fly in my head and I could actually take things I know and maybe help the situation so it really became a way that I could be present in in the moment and I think it's something a lot of people that in the moment I I learned it from my husband he doesn't prepare by the way at all so that's not it but I but I watch the in the moment the negative example no no no and I'm not going to change that as he says he's a type Z I'm an A okay how love works yeah and I have been married 43 years that seems to work so but that idea that you could be in the moment with people is a really important thing yeah so the preparation gives you the freedom to really be present so just a linger on the you mentioned your brother and it seems like in the book that you really had to work hard when you studied to to sort of given that you weren't good at memorization you really truly deeply want to understand the stuff and you put in the hard work and that seems to persist throughout your career so you know hard work is often associated with sort of has negative associations with maybe with burnout with dissatisfaction is there some aspect of hard work at the core of who you are that led to happiness for you did you enjoy it 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 G to do what you did you have to there's only one route there right and that's just not true and I I do it because I like it in fact I'm careful 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 you are a role model for whether you know it like it want it does not matter I learned that the hard way and I would have to say people hate just because I do this does not mean I do it for these reasons right it should 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 just do probably negative one yeah for some stereotype or some view that that somebody's abused it in some way you can read the newspaper somebody's doing something personal people like I ask people do you want power and they're like oh no I'd rather do good yeah and I think the irony is you need power to do good and so that sort of led me down to in it was I thought about my own life right because it's it starts in a like many of us you know you don't have a lot but you don't know that because you're like everybody else around you at that time and on one end tragedy right my father leaves my mother 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 I hear 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 I said 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 in power I thought it kind of fell 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 within four others in 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 as 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 a head 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 you know that was her view and then my grandmother another tragic life what did she do though 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 sew 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 my grandmother 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 too I think that hard work thing is really deeply rooted from that background it gives you a way out from hard times yeah you know I think I've seen you on other podcasts say I thought I did do you want a plan B didn't you say no you would not like a plan B yeah I don't because you're like I would prefer my back up against in my remembering story like that you seem to like at least certain moments in your life seem to do well in desperate times true enough true enough that's true I I learned that very well but I also think that maybe this isn't the same kind of plan B I think of it as like I was taught like always be able to take care of yourself don't have to rely on someone else and I think that to me so so that's my plan B I can take care of myself and it's it's even after what I lived through with my father I thought well this set a bar for bad after this nothing's bad and and that it's a very freeing thought the being able to take care of yourself is that you mean practically do you mean just a self belief that I'll figure it out I'll figure it out and practically both right 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 so do you think there's some aspect of that financial stress even desperation just being hungry did that play a role in that drive that led to your success to be the the CEO you know one of the great companies ever 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 I said to him I said do you think part of your successes because you had bad stuff happen 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 I think there's probably wisdom for mentorship there or whether your parent or a mentor that easy times don't result in growth yeah I've heard a lot of my friends and they they worry this I'm gee my kids have never had bad times and so what you know what happens here so I don't know is it is it required and why you end up not required but it sure doesn't hurt you had this good line about a advice you were given that growth and comfort never coexist growth and comfort never coexist and you have to get used to that thought if someone said that they think of me like one of the more profound sort of lessons I had in the irony is it's from my husband and which is even more you know funny actually you could just steal it I mean you don't oh I have I have shamelessly he'll he'll as he'll tell you okay so the story behind growth and comfort never coexist but honestly I think it's been a really freeing thought for me and it's helped me immensely since mid career and as I write about it in the book I'm mid career and I've been running a pretty big business actually in the fella I work for is going to get a new job he's going to get promoted he calls me and he says hey you're going to get my job 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 got to 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 I went to the interview the next day blah blah blah guy says to me looks at me and he says I want to offer you that job and I said I would like to think about it I said I want to go home and talk to my husband about it kind of 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 he says I know you he's like six months you're going to be bored and you all you can think of is what you don't know 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 why why and and for me it internalizes feeling that and it it I'm going to I am going to say something as a stereotype that it resonates with many many women and I'll ask you if it does after is that either 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 so that's why meant growth and comfort can never coexist so I got I was like he's exactly right now the end of that story is I went in I took the job when I went back to the man who was really my mentor looking out for me and he he looked at me he said don't ever do that again and I said I understand because it was okay to be uncomfortable I didn't have to use I mean now I would take stock of the things I can do right and really think or I look for times to be uncomfortable because I know if I am nervous like I don't know if you were nervous to meet me we never met in real person no I'm still terrified no you're not but then you're means you're learning something right holding it together so well I also that to me matters I think it's interesting the maybe you could speak to that the sort of the self critical thing inside your inside your brain because I think sometimes it's talked about that women have that but I have that definitely and I think that's not just solely a property of women in the workplace but I also want to sort of push back on the idea that that's a bad thing that you should silence because I think that anxiety that leads to growth also that's like this discomfort so there's this weird balance you have to have between that self critical engine and confidence yeah I think that's a good point you have to kind of dance because if you're super confident people will value you higher that's important but if you're way too confident maybe in the short term you'll gain but in the long term you won't grow very good point so I can't really disagree with that and and to me even when I took on jobs I always felt people say well is it you know what point are you confident enough and I came to sort of believe again a theme of my beliefs that if I was willing to ask lots of questions and understood enough that's all I needed to know let me ask you about your husband a little bit so you write in the book you're writing the book he's just jumping