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

This is a summary of a YouTube video "Ginni Rometty: IBM CEO on Leadership, Power, and Adversity | Lex Fridman Podcast #362" by Lex Fridman!

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The key idea of the video is that prioritizing learning, adapting to change, collaborating with diverse perspectives, and focusing on long-term implications of technology can lead to success and meaningful results for society.

• 💼
  00:00

  IBM's CEO had to make tough decisions for the company's long-term success, while preserving its core values, as they focus on being essential in running the world's infrastructure through software and consulting services.
• 🔑
  10:24

  Prioritize learning and curiosity over expertise or education when hiring, and constantly adapt to the changing technological landscape.
• 💡
  27:32

  Adversity and financial stress can lead to success, as it teaches important lessons and is in your control.
• 📈
  39:01

  Prioritizing collaboration, empathy, and responsibility for the long-term implications of technology leads to meaningful results for society, but requires a deliberate decision to empathize, accept responsibility, and surround oneself with diverse perspectives and honest feedback.
• 💼
  55:29

  IBM transformed by divesting $10B of businesses, acquiring Red Hat for $34B, and focusing on software, cloud, AI, and consulting.
• 💼
  1:06:05

  IBM's Lex business faced challenges but eventually became successful with a worth of $19.5 billion and $2.7 billion in profit, highlighting the importance of passion, perseverance, and finding the right way to work together.
• 🤖
  1:22:55

  Watson's victory in Jeopardy humanized AI, but the biggest challenges for AI adoption are people challenges, such as trust and change management.
• 💡
  1:38:19

  Women and diverse groups face unfair criticism, but representation and problem-solving skills lead to success in any field.

Key insights

Leadership and Management Strategies

• 🏆 Being a successful leader is not a popularity contest, especially in times of crisis.
• 🧐 When asked what parts of IBM should endure, Rometty challenges the interviewer to share his perception and highlights the importance of identifying what should endure even if it needs to be modernized.
• 🏢 Despite its size, IBM focuses on being essential and doing mission critical work, running the infrastructure of the world.
• 💼 IBM CEO Ginni Rometty suggests reducing layers of management by half to increase autonomy and faster decision-making in large companies.
• 💼 IBM CEO Ginni Rometty divested $10 billion of businesses during a big transformation, resulting in flat growth rate without divestitures and currency, which she is proud of.
• 🚀 IBM's focus in 2023 is 30% consulting and 70% software, cloud, and AI, including hybrid cloud and AI.

Personal and Professional Development

• 🤝 IBM CEO Ginni Rometty believes that willingness to learn is the most important trait to hire for, over expertise or a college degree.
• 💪 Adversity can teach an important lesson that there is always a way forward and it's in your control.
• 💡 "Growth and comfort never coexist, and you have to get used to that thought."
• 🤔 The self-critical engine inside our brains can lead to anxiety, but it can also lead to growth and discomfort, which is necessary for personal and professional development.
• 💼 Ginni Rometty's advice to young women: "Go into engineering, not 'cause you're gonna be an engineer, it teaches you to solve problems. And anything you job you do is gonna be solving problems."

Social Responsibility and Diversity

• 💪 "The irony is, you need power to do good."
• 🤝 Rometty believes that the ultimate definition of good power is doing something for society, emphasizing the importance of collaboration and empathy in achieving meaningful results.
• 💪 The decision to care about others is a deliberate action of empathy that requires a leap, but can also happen gradually as one becomes more confident and focused on achieving a common goal.
• 💡 Ginni Rometty believes that diversity and inclusion lead to better outcomes: "Diversity to me means, I'm gonna get a better product, a better answer."
• 💼 Ginni Rometty believes in stakeholder capitalism and balancing the needs of multiple stakeholders for long-term success of a company.

Detailed summary

• 💼
  00:00

  IBM's CEO had to make tough decisions for the company's long-term success, while preserving its core values, as they focus on being essential in running the world's infrastructure through software and consulting services.

  • As a CEO, Ginni Rometty had to make unpopular decisions for the long-term success of the company, even if it meant sacrificing things like job changes or changing the way they do their semiconductors.
  • The biggest challenge in running a large company like IBM is not in running it, but in changing it while preserving the core values that should endure.
  • IBM is a business to business company that runs the infrastructure of the world, focusing on being essential and doing mission critical work through software and consulting services.
  • To keep up with the fast-paced industry, big companies need to change their processes and provide new tools and skills to their employees, rather than just telling them to work faster.
  • To implement agile at scale, organizations need to reduce layers of management, form small multi-disciplinary teams, and prioritize faster decision-making and autonomy.
  • Leaders sometimes have to make hard and unpopular decisions for the long-term success of the company, even if it means sacrificing things like job changes or changing the company's philosophy.
• 🔑
  10:24

  Prioritize learning and curiosity over expertise or education when hiring, and constantly adapt to the changing technological landscape.

  • The key to successful hiring is to prioritize a candidate's willingness to learn and curiosity over their expertise or education.
  • The key idea is to prioritize building skills over buying them, and to have a combination of humility and passion to constantly learn and adapt in an ever-changing technological landscape.
  • Leaders should find a balance between showing the way and letting people find their own way, but it's important to always role model and show values and value-based decisions.
  • The speaker emphasizes the importance of values and relationships with clients, and the role modeling of learning through compulsory education.
  • Preparation gives the freedom to be present in the moment, and hard work is at the core of who she is that led to happiness.
  • Hard work is deeply rooted in the speaker's background, taught by their strong female family members, and is necessary for taking care of oneself and achieving success.
• 💡
  27:32

  Adversity and financial stress can lead to success, as it teaches important lessons and is in your control.

  • Adversity and financial stress can teach important lessons and lead to success, as there is always a way forward and it's in your control.
  • The idea that growth and comfort never coexist has been a freeing thought for the speaker and helped her immensely in her mid-career, as exemplified by her hesitation to accept a big job offer until her husband encouraged her to take it.
  • Growth and comfort cannot coexist, and self-criticism can lead to anxiety but also to growth, requiring a balance between confidence and discomfort.
  • The speaker met her husband on a blind date while working in Detroit through a scholarship that helped her avoid graduating with a lot of debt.
  • Good power is about embracing tension, respecting others, celebrating progress, and being in service of something, which can lead to positive change in our lives, work, and world.
  • Doctors can differ in their level of care and concern for their patients, as seen in the speaker's experience with knee surgery.
• 📈
  39:01

  Prioritizing collaboration, empathy, and responsibility for the long-term implications of technology leads to meaningful results for society, but requires a deliberate decision to empathize, accept responsibility, and surround oneself with diverse perspectives and honest feedback.

  • Good tech involves being responsible for the long-term implications of technology and prioritizing collaboration and empathy in order to achieve meaningful results for society.
  • Transitioning from a self-centered mindset to caring about others is a gradual process that requires a deliberate decision to empathize and accept responsibility as a role model, while being cautious of the corrupting influence of power and surrounding oneself with people who hold a mirror up to them.
  • Diversity and inclusion lead to better results and a better life, and it's important to surround yourself with people who will give you honest feedback.
  • Balancing the needs of multiple stakeholders is essential for the long-term success of a company, and decisions are rarely black and white.
  • The company had to find a way to separate research and development from manufacturing to maintain important systems while still investing, and forming great relationships with clients involves honoring promises and being in service of their needs.
  • IBM's CEO emphasizes the importance of acting with values and honoring promises, especially during a time of reinvention and pressure to perform.
• 💼
  55:29

  IBM transformed by divesting $10B of businesses, acquiring Red Hat for $34B, and focusing on software, cloud, AI, and consulting.

  • Despite facing criticism, the speaker's team successfully transformed a large company by changing 50% of the portfolio and divesting $10 billion of businesses.
  • IBM's acquisition of Red Hat for $34 billion was a short-term hit but the foundation of their successful hybrid cloud play today, and IBM's current focus is on software, cloud, AI, and consulting.
  • IBM modernized the mainframe and found that mission-critical work was better suited for hybrid cloud, leading them to acquire Red Hat.
  • IBM's decision to exit the consumer-facing PC business was due to the highly competitive and low-cost nature of the market, and their focus on enterprise technology.
  • Consulting involves providing recommendations and implementing them with technology to improve business operations and create value for clients.
  • In 2002, the speaker led the negotiation of the $3.5 billion acquisition of Monday, the consulting arm of PricewaterhouseCoopers, facing challenges of balancing between IPO and acquisition and the differences between being a private and public firm.
• 💼
  1:06:05

  IBM's Lex business faced challenges but eventually became successful with a worth of $19.5 billion and $2.7 billion in profit, highlighting the importance of passion, perseverance, and finding the right way to work together.

  • The speaker discusses the challenges of acquiring and retaining valuable employees, and how they had to create a unique business model that focused on delivering value to clients while incorporating technology.
  • IBM's Lex business faced challenges in meeting goals and maintaining margins, but with leadership changes and belief in the team, it eventually became successful with a worth of $19.5 billion and $2.7 billion in profit.
  • Success requires passion and perseverance, and the key to building a successful team is to keep changing until you find the right way to work together.
  • Successful negotiations involve both parties being in service of a common goal, pushing too far can lead to negative outcomes, and collaboration and empathy are key to long-term success.
  • The speaker loved the problem-solving and logic aspects of engineering and computing, which stemmed from a desire to understand how things work, and transitioned from a technical role to a leadership role without losing their doer mentality.
  • Experiential learning is important and even CEOs should get their hands dirty, and the IBM Deep Blue versus Kasparov chess match was a powerful moment in AI history that reinvigorated the dream of accomplishing something that we think of as intelligence.
• 🤖
  1:22:55

  Watson's victory in Jeopardy humanized AI, but the biggest challenges for AI adoption are people challenges, such as trust and change management.

  • Watson's victory in the Jeopardy challenge humanized AI and demonstrated its ability to understand natural language and reason over lots of data, but the biggest challenges for AI adoption are people challenges, such as trust and change management.
  • Watson brought AI back into the winner's circle and became a platform and ingredient for AI in various industries, opening up job opportunities and helping humanity.
  • The discussion revolves around the ethical question of the role of AI in carrying out successful missions and the need for considerable attention to AI ethics to prevent it from mirroring everything we love and don't love.
  • Transparency is crucial in AI development and implementation, including open sourcing aspects of the work, knowing the people involved, and understanding the data and training that went into it.
  • The speaker discusses imposter syndrome and the importance of self-awareness and confidence in leadership, while also mentioning the societal expectations and values surrounding gender in the workplace.
  • Being a role model as a woman in a male-dominated industry can be challenging, but it is important to understand that everything you do will be magnified due to the scarcity of women in leadership positions.
• 💡
  1:38:19

  Women and diverse groups face unfair criticism, but representation and problem-solving skills lead to success in any field.

  • Women and other diverse groups often face unfair criticism and scrutiny, but it is important to ask questions and seek representation, and pursuing problem-solving skills can lead to success in any field.
  • Being a role model for others is important, and it's valuable to show that accomplished people are just human beings trying their best.
  • Setting boundaries is crucial for achieving work-life balance, and while it is possible to be a successful CEO and a parent, it requires a lot of hard work and dedication.
  • The speaker implemented a program of returnships to help men and women who left for parental or family reasons and didn't feel confident to come back to work due to technology advancements.
  • Relationships and love are key to success and a fulfilling life, and leaving something a little bit better is what makes a life well lived.
  • Keep asking questions and maintain a childlike curiosity, while having patience and letting life unfold, according to Ginni Rometty.