Ginni Rometty on Her Role as CEO of IBM

WALTER ISAACSON: When you took over in 2012, it was mainly thought of as a big iron company, making big oldcomputers; and since you’ve taken over, that’s down about 10% of what IBM does. Tell me what you moved the company into and why.

GINNI ROMETTY, CEO, IBM: I always say, people, you don’t always see us, but you do rely on us because we operate almost 100% of the banks in the  world, the airlines, 70% of all the business data comes right through us. We have had to reinvent ourselves era to era and arguably, this has been the most extensive, but this era, it’s been about how do you refashion a company all around data.

ISAACSON: Are you worried about government regulation of data ownership?

ROMETTY: I think one of the most important words that jumps into my mind is responsibility, it’s funny, not regulation first. So why do I not – do

I not worry? Do I worry? The tech industry is quite capable of self- regulating itself if it puts its mind to it.

ISAACSON: Do you feel your competitors in Silicon Valley are doing as good of a job?

ROMETTY: I think every company has got to step up to this or there will be regulation we don’t want, right, and so – and that’s why I say the word responsibility comes to my mind.

ISAACSON: Do you think that some of the tech companies in Silicon Valley – – Facebook and Twitter and all — are causing a backlash on trust?

ROMETTY: Hey look, we’re the builders of this stuff. We believe the purpose of it is to help man do a better job, augment mankind. I don’t mean that as men or women. It’s to augment what man does. First is purpose because if you believe that, you will build certain things or you won’t build other things.

Ownership of data, so whether people have trust, is wait a second, do I have to give you my data? Do you want my data? And, even more important than a data is, when you train an artificial intelligence, it’s about training engines. Okay, wait, that engine got trained. Who did that engine belong to now? Did you take it to my retail competitor?

We say, we can guarantee you the way we built it, your personal data is used to train this, it will not go to the next guy, right? We also said, for trust, AI can’t be a black box. It has to be explainable and we learned that in our early days when we would work with doctors and it would say, “Well, here is our recommendation.” Any professional. If I give you a recommendation, what’s your first question to me?

ISAACSON: How did you figure that out?

ROMETTY: How did you figure that out? What data went into it? Why? And so, we had to build it that it can answer those kinds of questions and therefore it’s just helping me. So this explainability is a really big deal. So that when you said about trust, I think, you’ve got to believe and live those kinds of principles for people to trust.

ISAACSON; You just mentioned the difficulty sometimes of doing big data especially when it comes to medicine, cancer, doctors doing recommendations. I mean, “The Wall Street Journal” pushed back a bit on Watson, the division you have based on the computer that won “Jeopardy” saying it wasn’t doing quite as well in – what’s the difficulty there and how will you overcome that?

ROMETTY: I don’t agree with that article one bit for lots of reasons. I think we could have an impact on healthcare. We will not solve cancer and that’s what that article is about. We’re not going to solve cancer. We can do our little pieces here to really advance this. First off, medical data doubles every 70 days. How can anyone deal with that?

If you’ve ever dealt with anyone very sick, my mom had cancer,, your first questions are – well, are you sure that’s it? Are you sure that’s the only treatment? Are you sure it’s the right treatment? There’s nothing else? Are you sure of this?

Everyone goes through these things, right? Then you look how much is spent in almost every country in the world, particularly in the US and then what’s the – look at the percentage of our own GDP spent on healthcare and what the real effectiveness is of it. So there is a problem. I don’t think anybody would disagree with the problem part. But you could help with the diagnosis and the treatment.

And so working with Memorial Sloan Kettering, the Cancer Center here in New York City, we’ve now trained the AI with their doctors and specialists on 13 different cancers which make up 70% of the cancer types out there, and it is to help a doctor with diagnosis and possible treatment, degree of confidence, what other tests should I use, et cetera? That’s one area.

But drug discovery with Pfizer, different immune – I mean, you’ll see this AI play out with what are the different kinds of combinations of drugs that can be formulated and molecules, oncology is another. Mayo Clinic is now using it for clinical trial matching, so what took 30 minutes is eight minutes, so maybe now you can do all breast cancer through clinical trial matching and we’re shortly and soon going to be able to come out with predicting in advance hypoglycemia.

So these are all pieces that really do in the end make a very big difference, but healthcare does not change overnight.

ISAACSON: You talk about public/private partnership, but what is the role of government, both the Federal government and state government?

ROMETTY: I think two things. The role of government – so we have invested a lot of time in getting some of the right policy frame works out there for education and public/private partnerships. So I think the role of government is around where there is funding, set the right kind of policiesthat are going to incent skills to be built in the right areas.

But then I say when it comes back to the education itself, this is where I think the problem is so large, Walter, it won’t be solved with just the government doing this by itself. Even in our industry, in IT, there’s half a million jobs open in the US and we’re only producing 10% of that as coming out of universities.

So either you’ve got to get people prepared without a university degree or accelerate that, which is why it’s going to take both.

ISAACSON: But are you worried about sort of a public disinvestment in education and in career education by government?

ROMETTY: It’s important and imperative for the country that government continue to foster these kinds of programs, whether they be higher Ed, and then as well, elementary, secondary, et cetera. So, I’m not as worried as long as we all keep focused and put pressure on this. I know business roundtable is one of our big agenda items is on this, so worry is not my word. Constant focus and diligence on it is what I think is required.

ISAACSON: One of the other things at the business roundtable has been talking about, too, is a lack of Federal investment in research and development, that really flourished in the late 1940s and brought us the internet, the microchip, semiconductors and computers.

ROMETTY: Yes, look, it’s a critical part that there be and remain – if you think of what has led this country in this technology and innovation and part of that has come because the government has been sort of the pioneer and the different model in the US is, while the government invests in research, it does it with private sector. And so then the private sector can more readily commercialize it.

Other countries, India – they envy this system that we have like this. And so we’ve got to be careful not to pull that back in the wrong areas because this is still a race around skills in these technologies. And this to me is something the US does not want to fall behind on by any stretch.

ISAACSON: And do you think China may be going faster?

ROMETTY: Listen, it isn’t just China. Whether it’s China, whether it is the European Union, whether it is France and Germany, everyone sees this opportunity now that says, “Hey look, you’ve got to have technology innovation to lead,” and skills is a currency in every country.

ISAACSON: And one of the things that sort of helps innovation, too, is immigration.

ROMETTY: Yes.

ISAACSON: And that helps with the skills as well. You were one of the CEOs who met with President Donald Trump and some of the others met with you to say, “We’ve got to change some of these immigration policies. How successful were you at that and are you still pushing that?

ROMETTY: You know, I always say ideas have no passport and so skills, you have got to get people to move around and you’ve got to be able to bring the best skills to what the problems are, whether it’s dreamers, whether it is immigration, and if you go back in time to what has made this country successful, it is having the skills here, it’s the investment. And so, have we made some progress? I think we’ve made some progress. I think we’ve got to make more progress. Things like the dreamers, we’ve got 30 in IBM and …

ISAACSON: You’ve got 30 dreamers working …

ROMETTY: Thirty dreamers and have been a strong proponent about why we have to allow for these kinds of things and have taken all of our kids out

– I say kids, our young IBM-ers out to Washington to meet people. So there’s a name and a face and these are really productive citizens of this country about what they are doing for companies. And so, I think immigration is a really strong piece.

ISAACSON: Do you feel you had any impact on the White House on that?

ROMETTY: Well, clearly more is left to be done so our job is not done here, right. I feel we’ve had good impact on education and we are going to keep working on things like immigration here because they are really important.

ISAACSON: And what about trade? Aren’t you worried that we’re putting up too many trade barriers? I mean, that would really hurt IBM.

ROMETTY: Look, I’m a strong believer in free trade and a strong believer that when you have – yes, you should have fair trade. I don’t think anybody would disagree that there has to be fair trade. I strongly believe those should be negotiated. Strong negotiations at a table with allies, with parties to get that to happen. We have got global supply chains and are capable of doing that. I think there are other smaller companies that don’t have that flexibility.

ISAACSON: So you would have to (inaudible) with the US.

ROMETTY: Yes, it’s not a huge issue for us. Again ,back to remember, we are 10% physical hard goods and 90% software and services. Many done in their countries of where they are today. But in a broader picture for our economy, you want to have free trade across and you want to have that be fair trade, as I said. If you look at what our trade agreements look like before, Walter, they were not ready for this 21st Century.

ROMETTY: They were not digital. So they needed modernization. There is no doubt trade agreements needed modernization for this day and age to be able to thrive in an IT data innovation driven world.

ISAACSON: Yes, you’re one of only 24 women CEOs in the Fortune 500, and even more amazingly that number has en going down. Why do you think so and what should we do about it?

ROMETTY: What do the numbers tell you? It doesn’t matter. The point – should it be higher? Of course, it should be higher. And so, what we spend all of our time doing is not only getting women into the work force, Walter. The issue is keeping them in the work force, and that to me is one of the biggest things we’ve worked and I give you one – I think a great program.

It had to do with once women leave for various reasons, it could be a man, too, by the way, but to take care of children, elder parents et cetera, et cetera. What we found was, it’s difficult to get them back in. They are like, no, no, no, I am sure time has passed me by. Three years, four years of technology, I can’t be – so we had this idea, we said, let’s put together kind of a returnship. You can stay for one day, you can stay for three months, four months, and a refresher on all of this.

And honestly, we’ve had people go, “Okay, one day. This is right. This was crazy. I’m fine.” Back to work. Others, more months, catch up and so that is actually the biggest reason why you don’t see more women moving up and up and up. It’s this ability to stay in the workforce through these life event that, to me, is one of the important things you can do that creates a pipeline for the future CEOs.

ISACCSON: Why wouldn’t we have more policies like that if we had more women CEOs? I think those are chicken and an egg game.

ROMETTY: I don’t think it is – no, I know many of my male colleagues as committed to this topic as I am. People look for a big bang answer to this topic. It is the accumulation of a thousand decisions you make.

And so, when jobs are made available, do you insist that the slate has women and men on it? Or diversity, not just men and women, right? So this is race. This is many different things. It is a thousand of these decisions that you have to stay with day in and day out that then make the difference.

ISAACSON: Well, as a historian, I’ll give you some credit at IBM because when it was the mark one – the computer one, the first computers being built at Harvard, it was Grace Harper, the legendary programmer, who was putting it together. And nowadays, some of the world’s fastest supercomputer it seems that is being run by two engineers both of whom are women.

ROMETTY: Yes, so you get a better work product on the other end with a diverse workforce. There’s a reason to do this. The reason is you get better, better ideas, better productivity, better work. You mirror the population and in fact, it’s especially true when you’re building all of these tools — AI and the like — that they mirror the workforce doing that, mirrors the population it’s going to serve.

ISAACSON: Tell me about your mother.

ROMETTY: Well, my mother – a single mother, raised all four of us. I was 16 at the time when my father left and left her – kind of left all of us – and she hadn’t had a college degree, didn’t have the skills to go back to work, no money, at times no food. And really, it was by watching my mom that I learned probably one of the most valuable lessons I take to work today, which is “Never let someone else define who you are, never.” And what my mom showed all of us by her actions after this had happened, she was no way going to be defined as single mom, someone on welfare, whatever it was. She went back to school. I had to help. I was the oldest. But she went back to school. She got a degree. She got a great job. All four of us, I mean, I would say I am the underachiever of the group, all four went to college, have advanced degrees. Did fantastic, and it was just by watching my mom. She never complained. She never cried. She just said this isn’t how this story is going to end, and don’t let someone else ever do this to you, and I think it’s true for companies, it’s true for people, it’s true for countries. And the rest is history.

ISAACSON: How did that affect your view of diversity in the work place, encouraging a workforce that was more diverse?

ROMETTY: Yes, it actually had a really big impact on my view about skills and education, but it also have a lot to do about women and engineering. And I ended up going into engineering and what it taught me about skills was, look, you just have to be able to problem solve and one of the best, in my view, degrees out there to learn how to do that is engineering.

ISAACSON: Your patron saint, I hope is Ada Lovelace and the 1830s comes up with the concept of the algorithm …

ROMETTY: Yes, and then Grace Harper, yes.

ISAACSON: The all-purpose computer. Ada Lovelace had at the end of her paper when she said machines will be able to do everything except think. It was a hundred years later that Turing took on – Alan Turing took on Lady Lovelace’s objections and said, no, machines will be able to think. Someday, they will replace us. Whose side are you on? Ada Lovelace or Alan Turing?

ROMETTY: I’m so on Ada Lovelace. As much as we invest in these technologies. That idea, the replacement that we are, if at all, decades away, decades and decades. This idea, we’re at a stage where there are still so many things you and I are able to do with this marvelous thing in our heads with only 25 watts of energy or whatever it is, right, that we are able to do. And so don’t lose sight of that. I mean, that’s why I think today, the job is around making things – letting you and I do the kind of thinking and judgment that we should be doing, and then putting these technologies to work on what are some really hard problems whether it’s systemic risk, logistics, whether it’s drug discovery, solving cancer, so that’s why I believe this is an era, it’s not just a few years, right? It’s not just data because actually, that’s not what makes you win. What makes you win is that whoever can learn the fastest and that’s what these technologies are going to help you do is learn.

ISAACSON: Ginni Rometty, thank you for joining us.

ROMETTY: Thank you, Walter.