Carly Fiorina

Tough Choices: Women, Leadership and Power - Nov. 17, 2008

Carly Fiorina
November 17, 2008— Ames, Iowa
Mary Louise Smith Chair in Women and Politics
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Mary Louise Smith Chair in Women and Politics lecture, Iowa State University

Well thank you so much Emily for that wonderful introduction. It is very good to be here at Iowa State, home of the Cyclones. I was actually supposed to be here earlier, but campaign business caused me to change my schedule, so I appreciate very much the patience of the university and having me back and it’s wonderful to see all of you. I also must begin by saying that I was not as together a young woman as Emily appears to be. And one of the things that always causes me some amusement when listen to introductions of myself is it sounds so--sort of smooth. Of course it wasn’t. It isn’t. That isn’t the way life is, but I learned my first, and maybe my most important, lesson about leadership in an unusual way.

I was a medieval history and philosophy student in college. That made me highly educated and virtually unemployable. And so when I graduated with my big fancy degree in medieval history and philosophy from Stanford University, I went off to law school. Not because I had a passion for the law, but because frankly, I was scared. Scared of what I was going to do with my future, and so I looked to my parents to give me some guidance, in particular my father, who was a professor of the law and ultimately became a federal judge, and it was his great dream that I become a lawyer. So I went off to law school. I hated law school. It left me completely cold, and so after just one semester I made what was the first adult decision of my life, probably the toughest choice of my young life at that time, and decided to disappoint my parents and quit law school. It was a tough choice because I wasn’t a quitter. And it was a tougher choice because my father declared that night, with great disappointment, that he was afraid I would never amount to anything. He denies that, but he did in fact say it. So here I am, now, truly unemployable, doubly unemployable, a history major and a law school dropout. So I did the only thing I knew how to do to make a living, I typed, and I filed, and I answered the phones. Because when I had been in college I made a living, which I needed to do to go to college, I made a living as a temporary secretary. I was a pretty good typer, and I went to a local commercial brokerage company and got a job as their receptionist. I sat in the front of their small building and answered the phones and greeted clients and typed and filed.

Now what does all this have to do with leadership? Well first, for those of you who are history or philosophy majors, or for those of you who really don’t know what you are going to do with your life, there is hope even when it appears that there is no guiding light in your career path, and when it’s not at all clear how you are going to even make a living, much less build a career. But I also start with that story because I learned about leadership in that job. First, I learned a lot of really important things in that job. I learned what it feels like to be at the bottom of the totem pole. I learned that even somebody at the bottom of the totem pole can make a difference for customers or for fellow employees. But one day after I had been there about six months, two men came to my office - my office ha, I didn’t have an office- my desk, and said, “We’ve been watching you and we think maybe you could do something besides type and answer the phones. Would you like to know what we do?” And they took me under their wing and that really was my first introduction to business. They were the people who first made me believe that maybe I could have a career in business, something I’d never contemplated. We had no experience with it when I was growing up. My mother was a stay-at-home mom. My dad was an academic. I didn’t know much about business. So they set me on a different path than I had imagined. But they also taught me that the fundamental of leadership is about seeing possibilities, in particular it is about seeing possibilities in other people. I think leadership, the highest calling of leadership at all levels, whether it is family leadership or business leadership or political leadership, I think the highest calling of leaders is to unlock potential. To see and seize possibilities.

Now in this way, those two gentlemen saw possibilities in me, and helped me see possibilities in myself that I had not contemplated before. Some people, I think, I thought actually when I was a receptionist all those many years ago, I thought leadership was about something else altogether. I thought leadership was about title or position. I thought if you sat in the big corner office, with the big brass nameplate, and had a lot of people reporting to you, that you must be the leader. But I have come to learn over the course of my life that leadership has nothing to do with position or title. There are lots of people with big positions. There are lots of people with big titles that do not lead. And there are also people with no position and no title at all who lead every day of their lives. They lead every day because they make a positive difference. They lead every day because they see possibilities and help others seize those possibilities. They lead every day because they make a positive difference in their families, in their communities, in their company, or in their nation. So for me leadership is all about choosing to make a positive difference. Most people can. Many people don’t, and that is why leadership is first and foremost a choice.

Now in this regard, I think leadership and management are very different things. Management is, of course very important, it is particularly important at a business, but management is all about the production of, hopefully, acceptable results within known constraints and conditions. Good managers know the rules and play by them. Leaders change the rules, when necessary. Leaders change the order of things. A good manager in a business will look out at the competitive field and say, “Okay, I understand what my competitors are doing, and my job is to produce as strong results as I can within that competitive landscape.” A leader looks to change the competitive landscape, to change the nature of the competition all together.

I think in many ways we have become cynical about leadership because sometimes we see too little of it, and in particular I have been speaking out recently about a lack of leadership in business. I, as you heard from Emily’s introduction, had the privilege of leading Hewlett Packard during the dot com boom and bust, and I see so much that we are repeating. We’ve now had three financial crises, all of which were brought on by many of the same things. We’ve had the dot com boom and bust, we’ve had the collapse of Enron, and now we’ve had the financial crisis that we’re currently going through. In all three of those cases, I believe, there was a lack of leadership. And I say that because I believe leadership is not only seeing and seizing possibilities, but leadership is also about common sense and good judgment and ethics and values. In the dot com boom and bust a whole bunch of people suspended common sense and good judgment and said that these tech company stocks had gone up for the last three years, so they must continue to go up forever. They suspended common sense and good judgment by saying it made sense to pay 800 times forward-looking earnings when there was no prospect of these companies making a profit in the next decade. Everybody was doing it, why shouldn’t we do it? They suspended common sense and good judgment by deciding that what goes up will always go up. And there was a little bit of greed thrown in, and as long as everybody was making money, it was okay. And then, of course, the bottom dropped out and a lot of people got hurt in the process.

And then we had Enron. And Enron was a situation where people didn’t really understand what Enron was doing. Nobody could really explain what Enron was doing. When people questioned what Enron was doing, people said well you just don’t get it. That went on for quite a while, and it was good as long as people were making money. And then one day people figured out that, if you can’t explain what’s going on, maybe it’s because it’s not real. And once again the bottom dropped out, and a lot of people got very hurt in the process. And now of course here we are experiencing, unfortunately, the impact of yet another financial crisis. This one brought on, unfortunately, by some of the same things. People decided that housing prices had always gone up, and so they would go up forever. People made a lot of bets on the assumption that they would go up forever. People bet more than they were able to pay back. People bundled all those bets in incredibly complex instruments that people could not explain, did not understand, and could not see. And suddenly we woke up one day and realized that we had a $55 trillion market for something called “credit default swaps”, a term no one had ever heard of 18 months ago, and that that market was totally opaque, had no regulation or visibility associated with it and people didn’t really understand what those instruments were. Just to put it in perspective, $55 trillion is greater than the sum of all of the nations in the world’s GDP. If you combined all the GDPs of every country on earth together, you would not have $55 trillion, and yet that was the size of this new market. And in the course of creating that market lots of people played the game, lots of people played the game. And as long as lots of people were making money, it all seemed to be okay. And so it’s understandable why people have become cynical, because not enough people in business, in that case, not enough people were leaders and said, “Wait a second. What about the common sense that says what goes up will come down eventually? What about the good judgment that says we shouldn’t bet more than we can afford to repay if our bet goes bad? What about the perspective that said just because everyone else is doing it doesn’t mean it’s the right thing to do, and what about the ethics and values that would cause people to step back and say maybe making money and keeping up with this other guy over here while his stock price rises, maybe that isn’t the single most important thing.”

Common sense, good judgment, perspective, ethics, values, these are the essence of leadership, they have always been the essence of leadership. And when we see leadership fail in such a spectacular way, it makes people cynical. Now leadership is about all those things that I’ve just described, and I believe now just speaking about business, I believe that business needs to step forward and display leadership. And in this case, I believe it means business leaders need to proactively agree to greater transparency and greater accountability. What I think that means, for example, is that every board and every CEO should subject executive compensation to shareholder vote, before the fact not after the fact. I think it means that CEOs should acknowledge that serving shareholders is not the only goal, and in fact the CEO’s job is to balance the needs of, yes, shareholders, but also employees, communities, and customers. That it is the CEO’s job to balance the requirements of those constituencies, and that it is a CEOs job to help make a positive difference in the communities in which their employees live and work.

Now all these things I’ve talked about leadership, you know this chair that I have the honor of leading temporarily, along with 17 other great women, I think leadership is not actually different between men and women. I think leadership is a human quality, not a male quality or a female quality. But I do think we need more women leaders. I think we need more leaders of all kinds. I think we have so many challenges now, as well as opportunities, but so many challenges whether they are in our communities or in our companies or in our country, that we need as many leaders as we can get. People, who are willing to make the choice to step forward, take a risk, make a positive difference. People who are sometimes willing to stand out and say you know everybody might be doing it, but it doesn’t make good sense, and it isn’t good judgment. And, by the way, it may not be consistent with the values we say we believe in. We need more people who will chose to lead, and therefore we need people of all kinds, men and women of all kinds and all backgrounds to have the opportunity to lead and to choose to lead.

Now when you talk about power, you can talk about power at all kinds of levels. And perhaps when it’s time for me to take your questions, we can explore what power means at a person level. It means very fundamentally, first and foremost, being able to overcome fear. But I want to spend a moment or two talking about national power, because of course we have just come through an incredible election season. And I actually was told by several of you prior to the formal part of my remarks, that in Iowa here the 2012 presidential season may already have begun because there are several aspiring candidates who are showing up in Iowa over the next several weeks. Personally I need a rest, but maybe you all are ready to start all over again. So I want to talk about national power just for a moment. I believe throughout history, and recall that I was history major, throughout history it has always been true that political power is based on economic power. Our political power as a nation, our ability to continue to be the leader of the free world, and influence other nations, rests with our economic power. So I think how we choose to confront the challenges and the opportunities of the 21stcentury, in terms of how we build our economy, how we grow our jobs, has everything to do with our political power on the global stage going forward. So I want to talk a little bit about that.

But first let me say why I think this century, this 21stcentury, is unlike any other in human history, and I do not think it is hyperbole to say so. We all, of course, sense sometimes that it is, and much about this past election causes us to reflect with great pride and great celebration on the historic nature of what we have been through. But this century is unlike any other because of the twin forces of technology and globalization. It’s quite remarkable to think back and remember that in the 2004 election campaign there was no YouTube or Facebook. Think about that. Four years ago there was no YouTube, there was no Facebook, and yet these technological miracles changed the course of campaigning forever. This actually is an era, if you step back and think about it, where for the first time in human history any person, anywhere can get any piece of information at any time they choose. Any person, anywhere, can get any piece of information, at any time they choose. That is historic. If you remember the old saying “information is power,” well it means now that power is flowing more and more to the individual, wherever they happen to be. There is a story, I talk sometimes about the technology revolution being a situation where the whole world is becoming digital, mobile, virtual, and personal. Everything has become digital and mobile. It seems again like a very short time ago, but when I first arrive at Hewlett Packard, we were just getting into a new business called digital photography. And at that time 1999-2000 Kodak was sitting on a mountain of cash and they were the king of the hill on traditional photography, and people asked why would you ever go into digital photography? Kodak is the king of that market, and Kodak, in fact, thought that they would be in that position forever. The film business, remember film? We’re only talking eight years ago, but the film business generated all of their cash and profitability. And yet five short years later, Kodak was in a position where it had lost its lead, and I think it’s probably accurate to say that Kodak will never be the leader of the photography industry again.

Photography became digital and mobile, and it became personal as well in that suddenly any individual could develop and share pictures at any time. The fact that people asked way back in 2000 why we would ever go into digital photography also illustrates another thing about leadership. Sometimes leaders, companies, people, sometimes leaders have to go up against the status quo. Sometimes leaders have to see things that other people don’t see, and the status quo always has huge power. Kodak depended so much on what had always sustained them in the past, that they could not make the move in time to the future. We all worry about that today with General Motors and Ford and Chrysler. Are they making the move to the future too late? And virtual, my favorite story about virtual, is how many of you have heard of Second Life? See you guys are forward looking in Iowa. A lot of times I say that about two people raise their hands. Well Second Life is, as it suggests, a cybersite where you can create a second life. Now you’re all going to wonder in a minute why these people who raised their hands, raised their hands, because in Second Life you have an opportunity to do it over again. You know, and create the life that you want and you can buy, and so you can create a whole life on Second Life. You can make money on Second Life, and you can translate it into real money. There was a woman in Northern California who’s a millionaire, having traded her business in Second Life. But I was reading an article the other day in the New York Times about a gentleman who had decided, after some time, that he preferred his wife in Second Life to his real wife. And so he was causing this strain in the family because he spent so much time locked up in the study communicating with his virtual wife in Second Life. In other words, we really have come to a time when virtual reality can be as compelling, perhaps even more compelling, than real reality because we can make it what we want.

In this era of digital, mobile, virtual, personal possibilities; in an era where anyone can get any piece of information at any time, at any place, it’s also an era of virtually limitless possibility. If you think about what we can do today, what can we do? Well we can send a space probe to Saturn and take pictures of the rings around Saturn and bring them back to earth and wonder at the marvel of it. We can send technology to the bottom of the ocean floor and discover thousands of new forms of life. We can destroy the planet. We can save the planet. We can literally in this 21stcentury do virtually anything we choose. And in an era of limitless possibility, never are commonsense and good judgment and ethics and values more important, because if we are not constrained by possibilities we will only be constrained by what we choose to do, and what we, importantly, choose not to do. We are now in a century of limitless possibilities.

Globalization, of course, creates many opportunities and many hardships. I will tell you my favorite story about globalization. I was recently, a couple of years ago, at a university not so unlike this one. And I was talking to a group of students, and when I was finished with my remarks I took questions and one student raised their hand and said, “Have you ever thought about being an entrepreneur, and if so how would you advise me to start my own business?” Next student raised their hand and said, “Would give me some advice on work-life balance?” The third student raised his hand and said, “You know I really don’t like my major very much. I understand you dropped out of law school. I wonder if you could give me some words that I could say to my parents.” So I said well do you want to be able to go home and tell your mom and dad that Carly Fiorina said it was okay to change your major? He said yes, I’d like to say that. Everybody laughed as you are. Now there’s nothing particularly remarkable about that story except that it happened at Tsinghua University in Beijing, China. Tsinghua University is where the entire communist leadership, or most of it, has been educated for the last 60 years. Every question was asked in perfect English. And when I returned home to California, I had many thank you letters from these Chinese students.

I have traveled all over the world, and people all over the world want to play. They want a shot at what they think we have, which is an opportunity to build a better life for themselves and their family. And in that possibility is hardship and change, but there is also great opportunity for us as a nation, if, if we are to recognize what will give us economic power in the 21st century. In this century of digital, mobile, virtual, and personal and global opportunity and people all over the world who want a chance to play. The 21stcentury for the first time, I believe, is all about brain power, innovation, entrepreneurship, and that should give us comfort because these are things that we have always excelled at. This is a nation that has always won. That has always led. That has always prospered. That has always excelled, because we were the most innovative in the world, because we were the most entrepreneurially in the world, because the best and brightest always came here to start their families or to start their businesses. And yet if this is the century of brainpower and innovation and entrepreneurship, then we have to invest in those things that insure economic leadership going forward, and I think that means a couple things.

First, I think it means we have to focus a lot of attention, not on big business, although big business is very important and the headlines are filled with discussions about what we should do with big business, I think we should focus a lot on small business because it is small businesses that create most of the jobs in this country. It is small businesses that are at the heart of innovation or entrepreneurship. And while we are talking about bailing out big businesses like General Motors, it is small businesses right now that are starving for credit. I think any economic agenda for the 21st Century has to focus on how do we make it easier for small businesses to form, to hire, to prosper, to grow? We should think always about what impact a policy will have on small business. I mentioned Enron before, when Enron happened, of course, one of the outcomes of that was whole complex set of accounting rules called Sarbanes-Oxley. Sarbanes-Oxley was good in some ways for big businesses, it caused us to focus a lot of attention on things that needed attention. But Sarbanes-Oxley became a problem for smaller businesses who couldn’t afford to spend 25 million dollars a year on accountants and lawyers. We have to worry about small businesses because job creation is an economic priority, always. Secondly, we have to think about how to lead in the area of brainpower. And that to me means not only making sure that we have the best education system in the world, and best at all levels, but I think it also means that we cannot choose to simply leave workers behind. When a worker loses his or her job, as will unfortunately happen now in this economic downturn, we should just be paying people while they are out of work, although we must do that, we should also prepare them to go back to work, and that means prepare them with new skills, new training. We need to embrace the concept of lifelong learning, that you are always learning new skills, because the world is always changing and moving on. Lifelong learning, worker training, I believe, have to be part of any economic agenda. So one of the things I said on television the other night was while we are thinking about bailing out a company like General Motors, for example, why don’t we think about putting some of that money towards making sure that workers have an opportunity to be retrained so that they can go back to work in some of the more innovative industries of the 21st century?

Third, we have to choose to lead in the industries that define this century. We have to choose to lead in the industries that will define the century. What are those industries? Energy. Health care. Space Technology. Information Technology. We have to choose to lead as a nation there, and that means more publically funded R&D, and there’s more privately funded R&D, but if we seed leadership in the energy industry we will not be the leading economy at the end of the century. If we seed leadership in healthcare science, we will not be the leading economy at the end of this century. I served on the President’s Space Commission and I recall being asked frequently as a commissioner why do we care about travel to Mars when we don’t have jobs here on earth? And I said we care about travel to Mars because it will create jobs on earth. It is an industry that requires innovation and entrepreneurship, and lest you doubt me, the Chinese have figured that out. The Indians have figured that out. Most of the nations that we think about as becoming the next generation economic powerhouses are investing deeply in space technology, and information technology is an industry that we now as a nation lead in, and we need to maintain that lead.

Focus on job creation, which means focus on small business. Focus on education and lifelong learning and in particular in this economic downturn on worker retraining. A decision to lead in the innovation industries of this century, and finally, I think we must tackle comprehensive immigration reform. I know it is an emotional topic, but this country has always led because people from all over the world wanted to come here. They wanted to come here to build their life. To build their business. People ask me if I’m worried when students from foreign countries come and study here. I say no not at all. I am worried when they leave. I want them to come here and decide to stay here because they think it is the best country in the world to build a business or start a business or build a family. I think those four things are at the center of an agenda for continued economic leadership for the 21st century because I think this century is all about brainpower and innovation and entrepreneurship, and when I left Tsinghua University that day thinking was the nation with the best brainpower wins in this century.

Emily in her introduction, I’m going close up her in about five minutes so you can be thinking about your questions, but Emily in her introduction referenced Fortune Magazine and the number one most powerful woman. When Fortune Magazine first decided to roll out that list, it was way back in 1998, and they came up with a new way to sell magazines called, because that’s what it was, called the “50 Most Powerful Women in Business.” And for six years I had the great honor of being number one on that list, but from that first year through all of them, and still to this day, I say to the editors of Fortune Magazine, don’t put a list together that numbers women 1 to 50. Because when you number women 1 to 50, you imply that business or maybe politics as well, is kind of like golf or tennis: there’s the women’s ladder and there’s the men’s ladder, and we have to have our own ladders because we can’t all play in the same game. The truth is that women and men can lead, do lead. The truth is that we need more of both, because this is a century of great challenge, as well as great opportunity. And we need people of all kinds who will choose to make the tough decision to lead, to stand out, to stand up, to take a risk, to sometimes go this direction when everyone else is going that direction. So every game, whether it’s business or politics or academia, every game is better when everybody gets to play. So don’t number us 1 to 50 and imply that we can only play against each other. Let’s all play the same game at the same time. And the game will be better.

One could look out at the current economic climate and the current economic difficulties, one could look out at the global challenges we face and be quite pessimistic or perhaps alarmed. And yet of course many people in this country, and I include myself in among them, many people in this country are incredibly optimistic. I have been very optimistic for some time, and it has nothing to do with my political persuasion. It has to do with my belief that when more people are empowered to do more things, the world is a better place. And this truly is a time, not just in this nation but in this world, this truly is a time when more things are more possible for more people in more places than ever before in human history, and that means we have the opportunity to grow more leaders who will make a positive difference in your communities and in your countries and in the world.

And I will close with one last story before I take your questions. Several years ago I was in South Africa. I am a founding partner of something called the African Leadership Academy, which is all about training, finding and training young, African leaders. I chair a fund called the One Woman Initiative, which is all about empowering women in areas of justice or leadership or entrepreneurship in very challenged areas of the world. And so I have seen firsthand the leadership that people with no position, no title, no traditional power at all, I have seen the leadership that extraordinary people under extraordinary circumstances can display. I happened to be in South Africa some years ago, and I was visiting a community that Hewlett Packard had invested in, and I was there to assess the progress of this community. And I was told about a young man whose name was Sauli George Masinga and he had come a year earlier from a nearby village. He had come from a village with all the terribly depressing statistics that we know so well about Africa. There was lots of disease and poverty and Aids and no electricity and no running water and this young man didn’t have a very bright future, but he wandered into the community center where we were investing because he had heard there was work, and indeed there was. We were installing a lot of equipment, and he was hired to move boxes. So he moved boxes around the community center. But this young man, Sauli George Masinga, had a curious mind, and after several months he started asking what was inside those boxes. And some of the engineers began to teach Sauli George about what was inside those boxes. There was computers inside those boxes, and after several months it turned out that Sauli George Masinga really figured out how to work these things called computers, and after a year he had become something of a technical expert. We were using Lenox programming, which is very good in the developing world, and the Hewlett Packard engineers began to send him out to the local community college to do troubleshooting on their computer system. I thought this young man’s story was so remarkable that I asked to meet him, and when I did I said, “Sauli George I wanted to meet you because I have heard about your story, and I’m so impressed with what you’ve learned and what’ you’ve done. And your President, President Mbeki, was going to be visiting later that day, your President of your country will be coming here later and I’d like to introduce you to him.” And this young man looked me dead in the eye and said “Good. I think you should. I think I deserve it.” This young man had not only discovered a whole new world, but he had a whole new sense of confidence about himself and his possibilities because somebody had seen some in him, and he had had the courage to step out and see some of those possibilities. So later that day I was addressing a group, about this size, it was my honor to introduce President Mbeki, but before I did so I pointed out Sauli George to the crowd, and I briefly told his story. And President Mbeki came to the lectern and talked for a minute or two and then he said, “Young man I’d like you to come finish my speech for me.” And the young man came to lectern, spoke eloquently for 20 minutes. Born politician, we didn’t think we would get him off the stage, but nonetheless he spoke eloquently about technology and the possibilities it had opened up for him and how he felt differently about himself and his future. And when he was finished President Mbeki said, “Young man, I’m going to see that you go to college.”

I have been all over the world, and I have seen remarkable things by remarkable people, people you’ve never heard of. This is a nation of extraordinary opportunity. Yes we have challenges. This is a nation of extraordinary opportunity and potential in an extraordinary time. This is a century where more things are more possible for more people in more places than ever before in history, and we as a nation, if we remember what got us here, what got us here: innovation, entrepreneurship, brainpower, always looking at the future. If we remember what got us here, we will always be the leaders in this century. I am as optimistic as I have ever been, and one of the reasons I am so optimistic is because I see so many leaders all over this country and all over this world. And more leaders is always a good thing. Thank you so very much. I’ll look forward to taking your questions.