Thank you. Good evening, everyone.
I’m honored to be here with you. So
much has changed since I accepted your invitation to speak.
Since then, we’ve become citizens of a
nation in mourning. A nation whose basic freedoms, including our freedom
of movement, are being weighed against other values like safety and
security. In so many ways, we are a nation more united than we were just
a fortnight ago–but we’re also a nation in search of new meaning and
context.
On the morning of September 11, I awoke
to the news that the World Trade Center had been struck. Like many of
you, I stood transfixed, staring at the images on television, horrified
by the events unfolding before our eyes. And like many Americans, I felt
a deep and extraordinary connection to the people in the World Trade
Center and the Pentagon and on those airplanes, to the companies
decimated, to the families forever altered, to the parents, and fathers,
and mothers, and children who are still hoping beyond hope that their
family members will return.
And as a business leader, I experienced a
whole other set of emotions - first and foremost concern for the safety
of our employees and their families. Concern for the security of our
employees who are of Middle Eastern descent or who practice the Muslim
religion here in the US and abroad. Concern for employees who are
traveling, and how to get them home to their families as fast as
possible. And then a concern for the safety of customers and partners
located in the World Trade Center complex, in the Pentagon, and in the
airline industry. Concern about the potential threat of cyber attacks
against IT infrastructure. Concern for the security across our
international operations.
These are not everyday concerns for a CEO
and for that reason they are sobering. They are grounding. Times like
these force you to think deeply about the role of leadership.
If the events of September 11 had never
happened, I would have covered many topics with you tonight.
I would have made the case that the next
economic upturn will be enabled by a whole new generation of information
technology.
I would have talked about how that new
wave of technology will empower customers - transforming how we do
business, transforming how we create value, and transforming entire
industries.
And I would have spent time talking about
the responsibility of leaders–in guiding a world in which technology
and its benefits are accessible by all.
I would have talked about the fact that
if we do not take responsibility for closing the gap between the haves
and have-nots, between the technology-enabled and the
technology-deprived - that we cannot, in fact, call ourselves leaders.
Increasingly, our success as leaders is
defined by our ability to see how our organizations fit into a much
larger ecosystem of causes and effects–how the push and tug of an
action on one side of the globe can positively (or negatively) affect
families, companies, nations, and entire peoples on the other side.
All of these topics are still worthy of a
full evening of discussion and while I still hold all of these things to
be true, I think for tonight, we should focus on the role of leadership,
particularly in business. In some ways, September 11 marks the start of
a new era of leadership–one in which corporations will have to take an
even greater responsibility on a world stage.
Business leaders in this country have a
daunting task ahead. It goes far beyond the physical rebuilding of New
York and Washington, D.C. It goes beyond resurrecting the towers that
symbolize economic strength and prosperity. It goes beyond refocusing
our companies and our teams on forging ahead with business, and it goes
beyond returning America to some kind of normalcy, in the face of
actions designed to corrupt and destroy our way of life.
But it’s quite simple: As leaders, now
more than ever before, we have a responsibility to redefine the role of
the corporation on a world stage - and to leverage our ability to impact
individuals, companies, communities, nations–for the better.
We must remake our businesses to be far
more active corporate citizens–creators not only of shareowner value,
but also of social value, in ways that are systemic, and sustainable.
It becomes our job to use a profit engine
to raise the capabilities, extend the hopes, and extinguish despair
across the globe.
We have a chance and an imperative to
improve the choices, and economic condition, and sphere of opportunity
for billions more people here at home–and around the globe. It’s a
greater mandate–one that our customers increasingly demand of us, one
that is deserved by every country in which we do business and one, I’d
argue must be undertaken because it can be undertaken.
This is a mandate that started as a quiet
whisper more than a decade ago and more recently could be heard more
loudly in Seattle and Prague and Genoa, in the voices of protestors who
declare that global companies have not lived up to their
responsibilities.
What is important here is not to take
sides in the globalization debate, but to look at the problem, and work
toward a real solution.
The Mandate
As the world moves toward a knowledge
economy the mandate for leadership changes.
Unlike a world dominated solely by
manufacturing prowess or distribution reach, one in which success is
often about wringing cost out of the system or maximizing a supply chain
- we’ve entered a different world.
In a knowledge economy, an economy driven
by intellectual and human capital in addition to financial and physical
capital, the transfer of knowledge, and information, and know-how —
the exchange of services — will become an increasingly important
driver. In such an economy, partnership and trust and reliability and
respect become important. Which is why, in an economy where intellectual
capital is currency, corporate behavior becomes a scorecard by which you
are judged – by your customers, your employees, your shareowners.
That scorecard will of course include
your ability to be a cost-competitive player, but equally important on
the score-card will be:
- Your integrity and your character;
- Your ability to transfer value and
know-how into local economies in which you do business;
- Your track-record as a socially
responsible corporate citizen;
- Your ability to sustain and nurture
true partnerships and ecosystems, in which all parties gain both
social good and economic gain.
The winning companies of this century
will be those who prove with their actions that they can be profitable
and increase social values - companies that both do well and do good. So
much so in fact, that business leaders will no longer view doing well
and doing good as separate pursuits, but as one unified pursuit.
And, increasingly, shareowners and
customers and partners and employees are going to vote with their
feet–rewarding those companies that achieve social change through
business. The companies that will be worthy of their investment, money,
time and energy will be those with similar values and those that can
meet a much higher standard of performance.
I should note this has nothing to do with
politics or subscribing to a particular ideology or economic theory.
This is simply the new reality of business–one that we should and must
embrace.
The question, of course, is, how?
And so let me spend a moment to move this
discussion from the theoretical to the practical. Whether your business,
like HP’s, spans the entire globe, or just the eight blocks around
this building, the same principles apply.
There are four key leadership imperatives
that are at work, and must be mastered, for all of us as leaders to
operate and succeed going forward.
Imperative number one is the principle of
leadership and the mandate to build a winning culture.
This first leadership imperative starts
within the walls of your company - in the vision you set, and in the
culture you build.
Even as recently as two weeks ago, in the
business world we talked about culture as a lever for change and a means
of motivating employees–and, certainly, that’s still true. But
particularly since September 11, culture has also come to mean something
else: According to a recent Wall Street Journal article on the
redefinition of the workplace in light of recent events, "The
tragedy brought the need for safety, security, belonging, and
affiliation into sharp relief."
Clearly, it’s leadership’s
responsibility to give employees space and support to rethink their
priorities in the wake of recent events. But the article goes on to say
that if "managed correctly, recent events present an opportunity to
strengthen employees sense of affiliation through a common vision, a
common mission, a common sense of purpose."
In this context, as leaders, we must
answer the question for our employees: in a world where know-how and
insight and intelligence and inventive spirit are the keys to success,
what role will our company play in fostering it–and what role will we
play in harnessing it?
Once we answer this, we then have to
foster a culture that can deliver on that vision.
It’s important to remember that top
leaders can set a vision, set a strategy, set a system of rewards and
metrics that encourage people, reward people, train people - but the
rest is ultimately up to the individuals and teams in our companies. It
is very much acts of individuals, the every day acts of many, that make
the biggest difference in the overall performance of a company.
I think that’s something that Bill
Hewlett and Dave Packard understood when they started HP sixty-two years
ago. Bill and Dave didn’t create HP in 1939 to build an empire or a
fortune. These two young Stanford guys with $538 between them simply
wanted to invent what they called the useful and the significant -
useful in people’s lives, and contributing to the world in a
significant way.
And they wanted to create a meritocracy
— where personal, every day acts of leadership counted.
Which is why they were devoutly
egalitarian and progressive in the way they designed employee programs
such as employee stock ownership–all employees would become leaders,
in a sense. They rewarded people based on performance and contribution,
rather than on rank or title or size of organization or time in job.
Today, you can see the foundations of
that culture magnified in initiatives like HP’s World E-Inclusion
effort, designed to spread the benefits of the digital world into areas
that have been excluded until now–to nations across the globe, to
towns and villages and businesses everywhere, into the lives of billions
who have up to now not had the tools to share their invention with the
rest of the world, and who have every right to participate in a
knowledge economy. It’s not about recycling PCs or imposing Western
technology on developing nations. It’s inherently about creating, from
the ground up, locally sustainable solutions that are culturally
relevant. It’s about rethinking how technology can empower and sustain
and liberate, rather than exclude and erode and restrain.
It’s ultimately about technology as
means, not end itself.
So that’s imperative number one.
Imperative number two is about leadership
and the need for sustainability.
In these challenging economic times, we
are all trying to ignite the growth engines inside our companies and to
help re-ignite the economy as a whole. Most of us have taken the
necessary steps to boost efficiency, eliminate redundancy and reduce
costs. But it’s not possible to cost-cut our way to growth. Growth is
dependent on new revenues. And so the next leadership imperative is
focused on creating sustainability through the simultaneous pursuit of
growth opportunities in existing businesses--as well as in wholly new
markets. Pursuing growth in existing businesses means avoiding
complacency and postponing short-term gains for medium term rewards.
But let me underscore the importance of
emerging markets–and the distinctively different approach that must be
taken in discovering them, nurturing them, and growing them.
Obviously, most of these markets are
located in the developing world. The potential for growth in the
emerging market economies has never been greater. As an example, recent
OECD statistics show that spending on information technologies in these
economies is growing at twice the rate of the industrialized world,
although off a lower base. It illustrates the importance of thinking
about developing markets as a central part of a company’s growth
strategy.
And in these developing markets,
sustainable systems are the only way you can derive long-term growth.
"Sustainable" in that the
solutions are economically viable, and can remain so for years without
outside interference. "Sustainable" in that the solutions do
not degrade the local environment. "Sustainable" in that the
solutions respect social and cultural mores–in fact, they optimize, celebrate,
and reward them.
In these markets, it’s especially true
that it’s not just what you do–but also the character with which you
do it.
We will lose customers, shareowners, and
ultimately employees if we do not demonstrate leadership and develop new
metrics for gauging our performance on a world stage:
- Are we making useful and significant
contributions that are economically and culturally sustainable?
- Are we doing everything we can to
unlock the doors to the information economy in a way that, again,
is not Western-imposed, US-centric, or homogenous?
The fact is we are in a single global
ecosystem, wired, connected, overlapping--benefiting from each other’s
successes, and suffering from each other’s losses. September 11th
made this all the more vivid — more than 60 countries lost citizens on
that day.
The collective moment of silence honored
around the world - here in America, in Mexico, in Canada, in England, in
Japan, across the continent of Africa. in the deepest parts of small
towns, on the streets of our biggest cities. This gesture made visible
to me, at least, how deeply connected we are.
Complexity theory tells us that imbalance
and asymmetry resolves itself in time, either through negative
resolutions like war, or disease, or economic breakdown, or through
positive resolutions like the removal of barriers, the opening up of
systems, or the movement of wealth and knowledge and personal
opportunity and fulfillment to a more balanced geographic distribution.
Leadership–both at the highest level
and at the personal level –is what causes the pendulum to swing in one
direction or the other. The system needs to find balance. Humankind is
the catalyst that forces the balance to swing one way or the other.
Which leads us to imperative number
three. This imperative is about leadership and diversity.
If we are truly going to continue to lead
our companies through periods of growth, and broaden our role as
stewards of a new global economy that nurtures (rather than destroys)
every culture in its path, we need to take an approach that embraces
ideas and approaches we have no model for. To be successful, we must
harness diversity of thought. Yes, diversity of people, diversity of
background, diversity of experience, diversity of skills. But most
important, diversity of ideas. Diversity of inventiveness.
If we are doing our job as corporate
leaders, we must think more than a quarter out — beyond the current
stock price. Where will new ideas come from? Where will new business
models come from? Where will talent come from? Where will our customers
come from?
We’re living in an era that's defined
by the power of ideas, the power of connections to knowledge, to
information. Smart people reside everywhere in the world - all kinds of
people and smart people brimming with ideas that have yet to be heard.
This is about a new definition of
diversity that has to do with more than national origin or race or creed
- it has to do with keeping the market in motion by feeding it new
models, new ideas, new approaches.
We see the power of diversity in the wake
of the events of September 11th - the diversity of those who
waited hours to give blood, the diversity of those who helped, the
diversity reflected in the cultures and religions that took part in the
memorial service at Yankee Stadium. Diversity in those who have donated
their time to courageously look for survivors. The diversity of
outpouring from virtually every nation on this planet. I bring all of
this up not to be dramatic, but to say if this is the strength we can
draw in time of collective crisis– what is the power we could harness
in an effort of collective aspiration and hope?
Which brings me to the fourth and final
imperative: leadership and courage.
In recent years, the market has placed
more emphasis on short-term results or the promise of short-term results
more than the creation of enduring value.
A leader’s job can’t focus solely on
short-term results. A leader must focus on the long-term health of the
franchise and the creation of business value for shareowners, customers
and employees over years to come.
This means, as leaders, we must be bold
in our actions - ahead of the market, using the courage of our
convictions and our judgment, experience and instincts as our guide.
Since we announced our merger with Compaq
three weeks ago, much has been written about the combination, much of it
focused on PC market consolidation or creating scale to cut costs. But
those stories, frankly, miss the much bigger point.
Steps like the one Michael Capellas and I
took two weeks ago are based on a shared commitment to leading and
driving the industry through its next inflection point - the
accelerating shift toward market-unifying architectures and approaches.
A shift that serves customers better, a shift that will unleash the
inventive energies of this industry on a new generation of products,
applications and solutions, in the enterprise, in the small and medium
business, in the home.
And while perhaps some critics do not yet
see the full benefit of the merger, the role of leadership is sometimes
to take bold actions that defy conventional wisdom.
I don’t mean to paint top leaders as
solely chartered to make such moves. But I do believe that courage is
required of leaders.
I think in the last two weeks, we have
witnessed acts of courage on a grand scale and at a very human scale. As
46 year-old New Yorker Jim Pesomen said, "The toughest part was
watching firemen and the courageous go back into that building as it was
coming down. Those individuals, I tell you, have courage–knowing what
they know."
And it was acts of courage we saw over
and over again in the named heroes, like Mark Bingham and Tom Burnett on
flight 93, but also those who were heroes like a woman who guided
Eduardo Rivera down 70 flights of stairs. Omar’s blind, and will never
see the woman who saved his life, but will be forever thankful.
As business leaders, as we are faced with
questions of life and death rather than how much our stock is worth, the
significance of our business contribution to the world may be increased.
And that is a good thing.
I’ll end by telling a story.
There was once a civilization that was
the greatest in the world.
It was able to create a continental
super-state that stretched from ocean to ocean, and from northern climes
to tropics and deserts. Within its dominion lived hundreds of millions
of people, of different creeds and ethnic origins.
One of its languages became the universal
language of much of the world, the bridge between the peoples of a
hundred lands. Its armies were made up of people of many nationalities,
and its military protection allowed a degree of peace and prosperity
that had never been known. The reach of this civilization’s commerce
extended from Latin America to China, and everywhere in between.
And this civilization was driven more
than anything, by invention. Its architects designed buildings that
defied gravity. Its mathematicians created the algebra and algorithms
that would enable the building of computers, and the creation of
encryption. Its doctors examined the human body, and found new cures for
disease. Its astronomers looked into the heavens, named the stars, and
paved the way for space travel and exploration.
Its writers created thousands of stories.
Stories of courage, romance and magic. Its poets wrote of love, when
others before them were too steeped in fear to think of such things.
When other nations were afraid of ideas,
this civilization thrived on them, and kept them alive. When censors
threatened to wipe out knowledge from past civilizations, this
civilization kept the knowledge alive, and passed it on to others.
While modern Western civilization shares
many of these traits, the civilization I’m talking about was the
Islamic world from the year 800 to 1600, which included the Ottoman
Empire and the courts of Baghdad, Damascus and Cairo, and enlightened
rulers like Suleiman the Magnificent.
Although we are often unaware of our
indebtedness to this other civilization, its gifts are very much a part
of our heritage. The technology industry would not exist without the
contributions of Arab mathematicians. Sufi poet-philosophers like Rumi
challenged our notions of self and truth. Leaders like Suleiman
contributed to our notions of tolerance and civic leadership.
And perhaps we can learn a lesson from
his example: It was leadership based on meritocracy, not inheritance. It
was leadership that harnessed the full capabilities of a very diverse
population–that included Christianity, Islamic, and Jewish traditions.
This kind of enlightened leadership —
leadership that nurtured culture, sustainability, diversity and courage
— led to 800 years of invention and prosperity.
In dark and serious times like this, we
must affirm our commitment to building societies and institutions that
aspire to this kind of greatness. More than ever, we must focus on the
importance of leadership– bold acts of leadership and decidedly
personal acts of leadership.
With that, I’d like to open up the
conversation and see what we, collectively, believe about the role of
leadership.