February 15, 2019 • 26 mins
This is a Closer Look at John Hennessy. He is the chairman of Alphabet, the parent company of Google and he has a long career of achievements in computer science and engineering, and too many awards to list here. He is one of the longest-serving presidents in Stanford University history with a 16-year tenure, having first joined the faculty in 1977. He stepped down in 2016 to start the Knight-Hennessy Scholars program. John Hennessy joins former SEC chairman Arthur Levitt talk about his new book, “Leading Matters,” where he shares the core elements of leadership that helped him become a successful tech entrepreneur, and nonprofit administrator.
Host: Arthur Levitt
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Speaker 1 (00:00):
This is a closer look with Arthur Levitt. Arthur Levitt
is a former chairman of the u S Securities and
Exchange Commission, a Bloomberg LP board member, a senior advisor
to the Promontory Financial Group, and a policy adviser to
Goldman Sachs. This is a closer look at John Hennessy.
(00:21):
He's the chairman of Alphabet apparent company of Google, and
he has a long career of achievements in computer science
and engineering and too many awards to list here. He
is one of the longest serving presidents in Stanford University's history,
with a sixteen year tenure, having first joined the faculty
(00:43):
in nineteen seventy seven. He stepped down in two thousand
and sixteen to start the Night Hennessy Scholars Program. He's
here today to talk about his new book, Leading Matters,
where he shares the core elements of leadership that helped
him become a successful tech entrepreneur and nonprofit administrator. He
(01:09):
joins me now for a closer look. You chose a
job at Stanford when you were starting out. It wasn't
the offer with the best salary. What was your motivation? John,
It's a great question Arthur. My motivation was that the
quality of the faculty and the students who were coming
(01:31):
to Stanford were simply superb, and I felt like I
wanted to be with colleagues who were the very best
in the world. You write in your new book, when
you arrived at Silicon Valley in nine seventy seven, Apple
was a year old, and the Internet and personal computers
and cell phones hadn't yet been invented. What's it been
(01:56):
like to be at ground zero of this technology leap?
Could you even imagine the changes? I certainly couldn't imagine them.
I when I go to visit, go down to Google
and go to the Google Plex, and realized that that
used to be a family farm. Uh, they are. It's
(02:16):
just stunning. And the waves of innovation one after the other.
Along came the v L s I revolution in the
personal computer, Along came the Internet, Along came search in
the Worldwide Web, along came social media. It just seems
every five, six, seven years there's a new wave comes
that that creates lots of opportunities. If you had to
(02:39):
name the one occurrence that surprised you the most, what
would that be? Oh? I think, without a doubt It
was the way the Web brought the power of the
internet and online to everybody. I still remember going over
to visit Jerry Yang and Dave at Filo when they
(03:00):
were building Yahoo as a as a Stanford project before
the company started, and they showed me that their favorite
pizza place UM was now allowing you to look at
the menu and order online. And when I saw that,
I realized this isn't just about a tool for scientists
and techy's. This is about a technology that will change
(03:21):
the world. Early in your career at Stanford, you invented
something and you were encouraged to leave to start a
company to bring it to market because of Gordon Bell.
Who was he and what did he tell you and
why did you take this risk? That's a great question.
Gordon Gordon was one of the early engineers at Digital
(03:45):
Equipment Corporation at that time still the second largest computer
company in the world UM, and he was an entrepreneur himself,
and he came to me and said, you know, this
technology is terrific. It's really disruptive. Therefore, the existing players
are going to be reluctant to bring it to market
(04:06):
because it will obsolete their current product line. And he said,
if you really believe in this technology, you have to
start a company. You have to help bring it to market. UM.
And he convinced me, and I convinced two of my
co founders, and we were often running. You wrote about
what you learned from a mistake you made with this
first company. Mips tell us that story. I made several errors,
(04:30):
but I think the big the biggest error was we
found ourselves in a situation where we're looking for CEO
when we found somebody who we thought was really terrific,
but he had had bad problems with other with other
founders on his board and insisted that the founders give
up their one board seat, and unfortunately, UM we did.
(04:51):
We agreed to that, and in the end it turned
out to be a mistake that almost cost the company
it's life. I mean, we ran through a lot of money,
We had to do a layoff, had to do a
reset UM, and luckily we found a new CEO and who,
despite the fact that we were almost broke, was willing
to take a chance on the technology. UM. We rebuilt
(05:12):
the company. We kept the core technical team, which was
key and got the company regoing. But it was it
was a tough situation. When you lay off a third
of your workforce in a small company, it can be decimating.
You're right about how starting a private company gave you
a new view of what your university department could do
in the world. Tell us about that, well, I think
(05:36):
I discovered two things. First of all, um, there was
a gap between what we were teaching and sometimes the
experience that we needed to prepare our students for working
in the real world. So I'm a big believer that
if we if we graduate an engineer, they should be
able to go out and argue about why they are
(05:57):
new innovation, their new discovery, The new invention has real merit,
not only technically, but also say something about it financially
and what it might do for the company. So I
discovered that along the way and brought that back to
my students with a greater focus not only on building
faster computers, are building better computers, but also thinking about
(06:17):
what they cost. I think the other the other lesson
for me was that decision making UH in a university
is often very haphazard. It tends to go very slow. Boy.
When you're in a startup, time is money. You have
to learn how to make decisions under under the gray
circumstances that aren't black and white. H And when you're
(06:40):
running any large organization, including a university, you have to
be able to do that. And that's the skill I
learned starting a company in the valley. John, you were
the president of Stanford along with your provos, John w
ettum End for sixteen years. Why did this partnership work
so well? And how unusual is the length of your tenure? Well,
(07:03):
it's certainly unusual, Arthur right now Um that presidents in
in public and private university seemed to last somewhere between
seven and eight years, a provost even shorter. So I
had the enormous advantage of having not only a very
capable provost, but one that was dedicated to the university
and turned down many opportunities to be a president elsewhere.
(07:29):
And what worked for us is we had a partnership.
We always knew what the other person was doing or thinking.
We coordinated carefully, but we also divided things up so
I felt comfortable handing something over to the provost as
my chief operating officer, so to speak, and he felt
comfortable handing things to me, so that while we were
(07:51):
coordinated we could split our efforts apart and make and
make our our activities more effective that way. For Walter
Isaacson wrote the forward to your book, and he says
he found the chapter about the power of storytelling for
leaders to be unexpected but profound. Why is storytelling important
(08:14):
and what's an example of that? So for me, storytelling
is about crafting a vision, helping people go to some
place where there is great opportunity, but where they're not
sure about how the journey might work or what the
opportunity is. And I think possibly the one of the
best stories I ever wove was when we talked about
(08:36):
what became the Night Tennessee uh Scholarship Program, and I
first talked to a group of my trustees about it
at a retreat, and I wove a story talking about
the impact that the Rhodes Scholarship had had over the
years and some of the distinguished Americans that had benefited
from that, and pointed out that Stanford could do something
(08:58):
similar in our own coun trade rather than having students
go abroad on the West Coast at an institution known
for its entrepreneurial capabilities, and that um that was a
short speech. It was it was a story. It was
five or ten minutes imagine what we could do. But
at the end of that, every single person in the room,
(09:19):
every one of our trustees, was supportive. You're right about
the importance of empathy and leadership. So lately there's an
antipathy to this by government and business leaders. Why is
this so important and is it possible to develop that
quality and our leaders I think it is possible to
(09:40):
develop it. I think it's something that many of us
develop when we're young, but it's a It's a gene
that can be enhanced over time as you see and
experience a wider range of of the paths that people
travel on their lives. I think it's important because UM
(10:00):
understanding the challenges that others have. If you're leading an institution,
and it doesn't matter whether it's a country, a state,
a company, a nonprofit institution, understanding the struggles that the
members of that of that group are going through is
important to to getting their confidence to thinking about how
(10:22):
you want to go forward. UM. You know in the
university faculty leaders of universities often fail because their faculty
revolt and their faculty revolt. I think primarily because the
leadership doesn't listen to them enough and doesn't empathize with
the challenges they're facing. So for me, it was an
important skill to to be engaged with with with the
(10:46):
faculty students across the university. Now, security can't be taught,
and I think we have enough examples of leadership without
humility to question that characteristic. Yeah, I think it's it's
humility is crucial because it does several things for you.
I believe. First of all, it makes it okay to
(11:09):
admit that you don't know everything, that you're not an expert,
and then you sometimes make mistakes and denying again. If
you ever find yourself in a situation where you think
you're the smartest person in the room and you begin
acting like it, it's a recipe. It's a recipe for disaster. Um. So,
humility reminds you that it's okay to ask for help,
it's okay to expect your colleagues to provide expertise where
(11:33):
you don't have it um And I think people who
remember that build much better teams. And no one can
do any of these important leadership jobs alone. You simply
can't do it. You're right about the decisions you had
to make after the financial crash of two thousand and
eight decimated the university's budget. At the same time, you
(11:57):
would introduce the largest increase in it history for undergraduate
financial aid. Tell us about this please. When the provost
and I and several of the trustees who were really
intimately involved in the financial planning at the university looked
at what happened to the endowment, we realized we needed
to do a reset. So the first thing we had
(12:18):
to decide was what was going to be untouchable in
that reset, And we made the decision that, despite the
fact that we had made this, as you said, enormous
commitment to financial aid, we decided not to touch financial
aid nor nor do we decide to touch faculty. We
froze salaries, but we decided not to fire any faculty.
(12:39):
That meant that that the staff and the university had
to bear the brunt of the layoffs that that occurred.
But we did that because we realized that families were
going to be under even more stress given what was
happening to the economy at that time. And what was
surprising was people were nervous initially, but by and large
people supported and by taking quick action we were able
(13:03):
to realign the budget in in basically a one year
period and then get through that dark tunnel and emerge
on the other side and begin to move the university
forward again. Uh. And it worked well, but it was
it was nip and tuck for a while given the
scale of the We lost over a billion dollars in
cash for example, at that time. Stanford has always allowed
(13:26):
students and faculty to be entrepreneurs. How do you handle
the question of who takes the credit and profits from
innovations incubated by a university such as Stanford. Well, the
first thing I think is we try to we try
to be fair and equitable with everybody, and we try
to remember that our first obligation is to try to
(13:51):
ensure that whatever technologies we create end up benefiting society somehow,
whether it's through the creation of new companies that job opportunities,
technologies that improve the quality of life for people. So
we try not to be in a situation where we're
trying to extract something from a young startup that would
(14:13):
hinder their ability to be successful um, And instead we
try to think about how do we get on the
same side as the entrepreneur to make them successful while
still being fair and equitable to the to the university
in terms of sharing the proceeds of a successful startup.
Companies such as Amazon, Google, and Facebook are accused of
(14:37):
being monopolies. How would you regulate companies that are becoming
something more it can do an infrastructure. Well, that's a
good question. I think we we UM, we're now seeing
the limitations of our existing laws, whether you think of
antitrust or other legal mechanisms that that might be used. UM.
(14:59):
It's true that the platform companies have become extremely influential.
I think they continue to improve uh quality of opportunity
and service to their customers, and if they don't, their
customers will eventually leave them. UM. But we need to
think differently. I think we made a we made a
(15:22):
mistake when we built the Internet out. We didn't think
about really how to reimburse content provirus. There was this
gold rush content would be free, and the truth is
it cost money to create content. And had we developed
some of the ideas often called micro payments, for example,
(15:42):
I think we would have done a much better job
of preserving some of our content creators, publishers UM, and
we certainly would have made a less rocky road for
them as they went into this new error. That's an
incredibly farsided view. M Jack Dorsey, the CEO of Twitter,
just told a reporter that the company basically has no
(16:06):
real plans for dealing with the neo Nazis who have
proliferated on the site. How much accountability should companies like
Facebook and Twitter have to police hate speech threats and
misinformation campaigns by foreign actors? I think this is the
(16:27):
real challenge we face. UM. These these companies and these
platforms have now become so powerful and widespread that they
become pseudo news sources. And how we ensure that the
information on them is as accurate as possible. How we
balance First Amendment rights UM together with the our our
(16:50):
obligation to try to improve and make society better is
a real struggle, I think, UM, and we've certainly struggled
that with that that problem at YouTube for example, with
respective videos UM. Foreign agents are another complication, and perhaps
the most dangerous one, because I think it is the
(17:11):
case that they seek to interfere with our democratic processes,
and that is something we need to be much more
acutely aware of, and we need to be on top
of you've said that anybody who does business in China
compromises some of their core values. Yet it seems that
companies are willing to compromise on values. What's your opinion
(17:35):
on doing business with repressive regimes. I think it's extremely
difficult ground to walk on you UM, in China. If
you were to offer any information service, the benefit you
will offer to the to the citizens of China is
clearly potentially there. Their current access to information is extremely limited.
(18:00):
At the same time, if you're going to run such
a business, you were going to have to accept the
fact that the government will censor you periodically on certain
on certain topics. So you've you've got your It's almost
a catch twenty two UM. In order to provide better
(18:20):
information two people in in countries that have repressive regimes,
we need technology. On the other hand, that technology cannot
operate very long if it doesn't accept some compromises in
the breath and accuracity information. UM. So in the end,
I conclude that we've got to figure out a way
to make progress and probably got to decide balance balance
(18:45):
um a greater good against some evil and decide which
is better. John, an early investor, in Facebook. Roger McNamee
has written a book that's been called an anti Facebook Manifesto,
in which he's as large corporations typically create interrelated eddies
(19:05):
of economic activity, whereas Facebook's business model is founded upon
sucking the economic activity out of otherwise productive workers. A
company whose product is used by one third of the
planet has only thirty thousand employees. In every imaginable sense,
(19:28):
Facebook is a borg like drain on the world's economy.
What do you think of that observation, Well, I think
it's pretty harsh. It's a harsh criticism. I think the
question of how a company like Facebook is going to
ensure that its products benefit and improved society is one
(19:51):
that the company really needs to grapple with. And I
think it it has built a very successful business model,
whether or or not it's um fundamental premise, which is
um sharing between people is so good that we don't
need to worry about any of the negative consequences. I
(20:12):
think that's the question it now needs to ask itself.
There are clearly negative consequences, Um, how does the company
grapple with those and address those? And I think it's
up to all of us to hold them accountable. Well,
if you're going to hold them accountable. You've said that
the mantra of Silicon Valley leadership to quote, move fast
(20:35):
and break things was fine at the beginning, but now
there's a need for a new mantra. What would you suggest?
I think there is there is a need for new mantra.
That old mantra worked well when we were building products
for techys and maybe even business people, but it doesn't
work when we're building products that change the lots of
people every single day. I think we need a mantra
(20:55):
that says, do something constructive for society. Your product. It's fine,
your your corporation. Everybody understands that there will be a
profit motive involved. But your products should make people's lots
better in some clear way, and you should work hard
to mitigate the unintended consequences. Even if they're unintended, you
(21:18):
still have an obligation to pay attention to those secondary consequences.
Now you write that leaders need to develop a framework
for thinking through an ethical issue. What's your framework? My
framework is to start out by thinking about will this
technology improve the quality of life for people around the world,
(21:39):
and if so, how can I clearly articulate why it
will improve it, and then I work from there to
think about are their secondary consequences, how do we deal
with those? UM? But I start with I start with
that framework, and I think we're going to need this
as we deploy artificial intelligence technology. For example, UM there's great,
(22:00):
great opportunities to improve quality of human life UM, but
there's also opportunity to misuse that technology in ways that
can be destructive. Well, you've had an incredibly productive life
in almost every aspect of it. When you got involved
in in Google, one of the most fascinating companies in
(22:22):
the history of American entrepreneurship. What did you want to
accomplish with that? Well? I wanted to see if I
could help the company be the very best it could.
Early on UM, Larry and Sergey had this vision of
organizing the world's information and making useful for people, and
I I was enamored of that vision. I thought, there's
(22:45):
so much information in the world if we can really
harness it in ways that's accessible to people and that
they can use, so that an individual can go online
facing a healthcare personal healthcare crisis, can go online and
get the information that they need to try to deal
with their personal challenges. The last part of your book
is an extensive reading list you undertook to inform your
(23:09):
ideas of leadership when you became the president of Stanford.
You include fiction because of what one can learn about
human nature. What fiction book or books have stayed with
you well? I think A Tale of Two Cities was
one of the books that I read when I was
quite young, and I've read several times since then and
(23:30):
has always stayed with me. I think I admire dickens combination,
not only of the incredible characters he draws um in
his book, incredible writing, just a mastery of the English sentence,
but also his willingness to grapple with the societal challenges
(23:51):
that existed in that time in the United Kingdom, and
to bring them front and center and make it clear
to everybody that uh England of the time had to
improve things to become a more more just society. Martin
Chuzzlewit is my own personal yeah classic. I love Dickens.
(24:12):
Who were your mentors when you started out? I had
several faculty colleagues who acted as as mentors for me
early on, who were sort of senior faculty members and
helped inspire me think about developing my research career and
furthering it. And they made a big difference in and
(24:33):
how I thought about pursuing pursuing my research and teaching activities.
In the book, you write about being offered the position
as president of Stanford, and while you were deciding if
you were up to it, you heard it talk by
the outgoing provost, Condi Rice. Why did she say that
(24:53):
helped you make that decision? Condi told a wonderful story
about her and father, who was a black sharecropper in
Alabama and had an opportunity to go to college if
he was determined to have follow up career as a minister,
which he decided that that was the only way he
was going to be able to afford to go to college,
so he did, which is how the Rice family became Presbyterian.
(25:16):
But then her father and her mother both got their
college degrees, and of course, um she went on to
become the first African American woman to be Secretary of State.
And what she said at the end was education made
that possible for my family, and that's why I've dedicated
my life to education. And when I heard that talk,
I said that that's right, and I should dedicate myself
(25:37):
to the role of playing an important leadership role in
this university. He's the chairman of the Board of Alphabet
and for sixteen years was the president of Stanford University.
He's written a book that's a reflection on the lessons learned,
called Leading Matters. He's also the co founder and director
of the Knight Hennessey scholars the large is fully endowed
(26:01):
scholars program in the world, providing full scholarships for a
graduate education at Stanford with the goal of developing a
new generation of global leaders. John Hennessy, thanks for joining us.
By the way, if you have comments about the program
or suggestions for topics, please email me at a Closer
(26:24):
Look at Bloomberg dot net. That's a closer Look one
word at Bloomberg dot net and follow me on Twitter
at Arthur Levin. This is a Closer Look with Arthur Levitt.
This is a closer look with Arthur Levitt. Arthur Levitt
is a former chairman of the u S Securities and
Exchange Commission, a Bloomberg LP board member, a senior advisor
to the Promontory Financial Group, and a policy adviser to
Goldman Sachs. This is a closer look at John Hennessy.
(00:21):
He's the chairman of Alphabet apparent company of Google, and
he has a long career of achievements in computer science
and engineering and too many awards to list here. He
is one of the longest serving presidents in Stanford University's history,
with a sixteen year tenure, having first joined the faculty
(00:43):
in nineteen seventy seven. He stepped down in two thousand
and sixteen to start the Night Hennessy Scholars Program. He's
here today to talk about his new book, Leading Matters,
where he shares the core elements of leadership that helped
him become a successful tech entrepreneur and nonprofit administrator. He
(01:09):
joins me now for a closer look. You chose a
job at Stanford when you were starting out. It wasn't
the offer with the best salary. What was your motivation? John,
It's a great question Arthur. My motivation was that the
quality of the faculty and the students who were coming
(01:31):
to Stanford were simply superb, and I felt like I
wanted to be with colleagues who were the very best
in the world. You write in your new book, when
you arrived at Silicon Valley in nine seventy seven, Apple
was a year old, and the Internet and personal computers
and cell phones hadn't yet been invented. What's it been
(01:56):
like to be at ground zero of this technology leap?
Could you even imagine the changes? I certainly couldn't imagine them.
I when I go to visit, go down to Google
and go to the Google Plex, and realized that that
used to be a family farm. Uh, they are. It's
(02:16):
just stunning. And the waves of innovation one after the other.
Along came the v L s I revolution in the
personal computer, Along came the Internet, Along came search in
the Worldwide Web, along came social media. It just seems
every five, six, seven years there's a new wave comes
that that creates lots of opportunities. If you had to
(02:39):
name the one occurrence that surprised you the most, what
would that be? Oh? I think, without a doubt It
was the way the Web brought the power of the
internet and online to everybody. I still remember going over
to visit Jerry Yang and Dave at Filo when they
(03:00):
were building Yahoo as a as a Stanford project before
the company started, and they showed me that their favorite
pizza place UM was now allowing you to look at
the menu and order online. And when I saw that,
I realized this isn't just about a tool for scientists
and techy's. This is about a technology that will change
(03:21):
the world. Early in your career at Stanford, you invented
something and you were encouraged to leave to start a
company to bring it to market because of Gordon Bell.
Who was he and what did he tell you and
why did you take this risk? That's a great question.
Gordon Gordon was one of the early engineers at Digital
(03:45):
Equipment Corporation at that time still the second largest computer
company in the world UM, and he was an entrepreneur himself,
and he came to me and said, you know, this
technology is terrific. It's really disruptive. Therefore, the existing players
are going to be reluctant to bring it to market
(04:06):
because it will obsolete their current product line. And he said,
if you really believe in this technology, you have to
start a company. You have to help bring it to market. UM.
And he convinced me, and I convinced two of my
co founders, and we were often running. You wrote about
what you learned from a mistake you made with this
first company. Mips tell us that story. I made several errors,
(04:30):
but I think the big the biggest error was we
found ourselves in a situation where we're looking for CEO
when we found somebody who we thought was really terrific,
but he had had bad problems with other with other
founders on his board and insisted that the founders give
up their one board seat, and unfortunately, UM we did.
(04:51):
We agreed to that, and in the end it turned
out to be a mistake that almost cost the company
it's life. I mean, we ran through a lot of money,
We had to do a layoff, had to do a
reset UM, and luckily we found a new CEO and who,
despite the fact that we were almost broke, was willing
to take a chance on the technology. UM. We rebuilt
(05:12):
the company. We kept the core technical team, which was
key and got the company regoing. But it was it
was a tough situation. When you lay off a third
of your workforce in a small company, it can be decimating.
You're right about how starting a private company gave you
a new view of what your university department could do
in the world. Tell us about that, well, I think
(05:36):
I discovered two things. First of all, um, there was
a gap between what we were teaching and sometimes the
experience that we needed to prepare our students for working
in the real world. So I'm a big believer that
if we if we graduate an engineer, they should be
able to go out and argue about why they are
(05:57):
new innovation, their new discovery, The new invention has real merit,
not only technically, but also say something about it financially
and what it might do for the company. So I
discovered that along the way and brought that back to
my students with a greater focus not only on building
faster computers, are building better computers, but also thinking about
(06:17):
what they cost. I think the other the other lesson
for me was that decision making UH in a university
is often very haphazard. It tends to go very slow. Boy.
When you're in a startup, time is money. You have
to learn how to make decisions under under the gray
circumstances that aren't black and white. H And when you're
(06:40):
running any large organization, including a university, you have to
be able to do that. And that's the skill I
learned starting a company in the valley. John, you were
the president of Stanford along with your provos, John w
ettum End for sixteen years. Why did this partnership work
so well? And how unusual is the length of your tenure? Well,
(07:03):
it's certainly unusual, Arthur right now Um that presidents in
in public and private university seemed to last somewhere between
seven and eight years, a provost even shorter. So I
had the enormous advantage of having not only a very
capable provost, but one that was dedicated to the university
and turned down many opportunities to be a president elsewhere.
(07:29):
And what worked for us is we had a partnership.
We always knew what the other person was doing or thinking.
We coordinated carefully, but we also divided things up so
I felt comfortable handing something over to the provost as
my chief operating officer, so to speak, and he felt
comfortable handing things to me, so that while we were
(07:51):
coordinated we could split our efforts apart and make and
make our our activities more effective that way. For Walter
Isaacson wrote the forward to your book, and he says
he found the chapter about the power of storytelling for
leaders to be unexpected but profound. Why is storytelling important
(08:14):
and what's an example of that? So for me, storytelling
is about crafting a vision, helping people go to some
place where there is great opportunity, but where they're not
sure about how the journey might work or what the
opportunity is. And I think possibly the one of the
best stories I ever wove was when we talked about
(08:36):
what became the Night Tennessee uh Scholarship Program, and I
first talked to a group of my trustees about it
at a retreat, and I wove a story talking about
the impact that the Rhodes Scholarship had had over the
years and some of the distinguished Americans that had benefited
from that, and pointed out that Stanford could do something
(08:58):
similar in our own coun trade rather than having students
go abroad on the West Coast at an institution known
for its entrepreneurial capabilities, and that um that was a
short speech. It was it was a story. It was
five or ten minutes imagine what we could do. But
at the end of that, every single person in the room,
(09:19):
every one of our trustees, was supportive. You're right about
the importance of empathy and leadership. So lately there's an
antipathy to this by government and business leaders. Why is
this so important and is it possible to develop that
quality and our leaders I think it is possible to
(09:40):
develop it. I think it's something that many of us
develop when we're young, but it's a It's a gene
that can be enhanced over time as you see and
experience a wider range of of the paths that people
travel on their lives. I think it's important because UM
(10:00):
understanding the challenges that others have. If you're leading an institution,
and it doesn't matter whether it's a country, a state,
a company, a nonprofit institution, understanding the struggles that the
members of that of that group are going through is
important to to getting their confidence to thinking about how
(10:22):
you want to go forward. UM. You know in the
university faculty leaders of universities often fail because their faculty
revolt and their faculty revolt. I think primarily because the
leadership doesn't listen to them enough and doesn't empathize with
the challenges they're facing. So for me, it was an
important skill to to be engaged with with with the
(10:46):
faculty students across the university. Now, security can't be taught,
and I think we have enough examples of leadership without
humility to question that characteristic. Yeah, I think it's it's
humility is crucial because it does several things for you.
I believe. First of all, it makes it okay to
(11:09):
admit that you don't know everything, that you're not an expert,
and then you sometimes make mistakes and denying again. If
you ever find yourself in a situation where you think
you're the smartest person in the room and you begin
acting like it, it's a recipe. It's a recipe for disaster. Um. So,
humility reminds you that it's okay to ask for help,
it's okay to expect your colleagues to provide expertise where
(11:33):
you don't have it um And I think people who
remember that build much better teams. And no one can
do any of these important leadership jobs alone. You simply
can't do it. You're right about the decisions you had
to make after the financial crash of two thousand and
eight decimated the university's budget. At the same time, you
(11:57):
would introduce the largest increase in it history for undergraduate
financial aid. Tell us about this please. When the provost
and I and several of the trustees who were really
intimately involved in the financial planning at the university looked
at what happened to the endowment, we realized we needed
to do a reset. So the first thing we had
(12:18):
to decide was what was going to be untouchable in
that reset, And we made the decision that, despite the
fact that we had made this, as you said, enormous
commitment to financial aid, we decided not to touch financial
aid nor nor do we decide to touch faculty. We
froze salaries, but we decided not to fire any faculty.
(12:39):
That meant that that the staff and the university had
to bear the brunt of the layoffs that that occurred.
But we did that because we realized that families were
going to be under even more stress given what was
happening to the economy at that time. And what was
surprising was people were nervous initially, but by and large
people supported and by taking quick action we were able
(13:03):
to realign the budget in in basically a one year
period and then get through that dark tunnel and emerge
on the other side and begin to move the university
forward again. Uh. And it worked well, but it was
it was nip and tuck for a while given the
scale of the We lost over a billion dollars in
cash for example, at that time. Stanford has always allowed
(13:26):
students and faculty to be entrepreneurs. How do you handle
the question of who takes the credit and profits from
innovations incubated by a university such as Stanford. Well, the
first thing I think is we try to we try
to be fair and equitable with everybody, and we try
to remember that our first obligation is to try to
(13:51):
ensure that whatever technologies we create end up benefiting society somehow,
whether it's through the creation of new companies that job opportunities,
technologies that improve the quality of life for people. So
we try not to be in a situation where we're
trying to extract something from a young startup that would
(14:13):
hinder their ability to be successful um, And instead we
try to think about how do we get on the
same side as the entrepreneur to make them successful while
still being fair and equitable to the to the university
in terms of sharing the proceeds of a successful startup.
Companies such as Amazon, Google, and Facebook are accused of
(14:37):
being monopolies. How would you regulate companies that are becoming
something more it can do an infrastructure. Well, that's a
good question. I think we we UM, we're now seeing
the limitations of our existing laws, whether you think of
antitrust or other legal mechanisms that that might be used. UM.
(14:59):
It's true that the platform companies have become extremely influential.
I think they continue to improve uh quality of opportunity
and service to their customers, and if they don't, their
customers will eventually leave them. UM. But we need to
think differently. I think we made a we made a
(15:22):
mistake when we built the Internet out. We didn't think
about really how to reimburse content provirus. There was this
gold rush content would be free, and the truth is
it cost money to create content. And had we developed
some of the ideas often called micro payments, for example,
(15:42):
I think we would have done a much better job
of preserving some of our content creators, publishers UM, and
we certainly would have made a less rocky road for
them as they went into this new error. That's an
incredibly farsided view. M Jack Dorsey, the CEO of Twitter,
just told a reporter that the company basically has no
(16:06):
real plans for dealing with the neo Nazis who have
proliferated on the site. How much accountability should companies like
Facebook and Twitter have to police hate speech threats and
misinformation campaigns by foreign actors? I think this is the
(16:27):
real challenge we face. UM. These these companies and these
platforms have now become so powerful and widespread that they
become pseudo news sources. And how we ensure that the
information on them is as accurate as possible. How we
balance First Amendment rights UM together with the our our
(16:50):
obligation to try to improve and make society better is
a real struggle, I think, UM, and we've certainly struggled
that with that that problem at YouTube for example, with
respective videos UM. Foreign agents are another complication, and perhaps
the most dangerous one, because I think it is the
(17:11):
case that they seek to interfere with our democratic processes,
and that is something we need to be much more
acutely aware of, and we need to be on top
of you've said that anybody who does business in China
compromises some of their core values. Yet it seems that
companies are willing to compromise on values. What's your opinion
(17:35):
on doing business with repressive regimes. I think it's extremely
difficult ground to walk on you UM, in China. If
you were to offer any information service, the benefit you
will offer to the to the citizens of China is
clearly potentially there. Their current access to information is extremely limited.
(18:00):
At the same time, if you're going to run such
a business, you were going to have to accept the
fact that the government will censor you periodically on certain
on certain topics. So you've you've got your It's almost
a catch twenty two UM. In order to provide better
(18:20):
information two people in in countries that have repressive regimes,
we need technology. On the other hand, that technology cannot
operate very long if it doesn't accept some compromises in
the breath and accuracity information. UM. So in the end,
I conclude that we've got to figure out a way
to make progress and probably got to decide balance balance
(18:45):
um a greater good against some evil and decide which
is better. John, an early investor, in Facebook. Roger McNamee
has written a book that's been called an anti Facebook Manifesto,
in which he's as large corporations typically create interrelated eddies
(19:05):
of economic activity, whereas Facebook's business model is founded upon
sucking the economic activity out of otherwise productive workers. A
company whose product is used by one third of the
planet has only thirty thousand employees. In every imaginable sense,
(19:28):
Facebook is a borg like drain on the world's economy.
What do you think of that observation, Well, I think
it's pretty harsh. It's a harsh criticism. I think the
question of how a company like Facebook is going to
ensure that its products benefit and improved society is one
(19:51):
that the company really needs to grapple with. And I
think it it has built a very successful business model,
whether or or not it's um fundamental premise, which is
um sharing between people is so good that we don't
need to worry about any of the negative consequences. I
(20:12):
think that's the question it now needs to ask itself.
There are clearly negative consequences, Um, how does the company
grapple with those and address those? And I think it's
up to all of us to hold them accountable. Well,
if you're going to hold them accountable. You've said that
the mantra of Silicon Valley leadership to quote, move fast
(20:35):
and break things was fine at the beginning, but now
there's a need for a new mantra. What would you suggest?
I think there is there is a need for new mantra.
That old mantra worked well when we were building products
for techys and maybe even business people, but it doesn't
work when we're building products that change the lots of
people every single day. I think we need a mantra
(20:55):
that says, do something constructive for society. Your product. It's fine,
your your corporation. Everybody understands that there will be a
profit motive involved. But your products should make people's lots
better in some clear way, and you should work hard
to mitigate the unintended consequences. Even if they're unintended, you
(21:18):
still have an obligation to pay attention to those secondary consequences.
Now you write that leaders need to develop a framework
for thinking through an ethical issue. What's your framework? My
framework is to start out by thinking about will this
technology improve the quality of life for people around the world,
(21:39):
and if so, how can I clearly articulate why it
will improve it, and then I work from there to
think about are their secondary consequences, how do we deal
with those? UM? But I start with I start with
that framework, and I think we're going to need this
as we deploy artificial intelligence technology. For example, UM there's great,
(22:00):
great opportunities to improve quality of human life UM, but
there's also opportunity to misuse that technology in ways that
can be destructive. Well, you've had an incredibly productive life
in almost every aspect of it. When you got involved
in in Google, one of the most fascinating companies in
(22:22):
the history of American entrepreneurship. What did you want to
accomplish with that? Well? I wanted to see if I
could help the company be the very best it could.
Early on UM, Larry and Sergey had this vision of
organizing the world's information and making useful for people, and
I I was enamored of that vision. I thought, there's
(22:45):
so much information in the world if we can really
harness it in ways that's accessible to people and that
they can use, so that an individual can go online
facing a healthcare personal healthcare crisis, can go online and
get the information that they need to try to deal
with their personal challenges. The last part of your book
is an extensive reading list you undertook to inform your
(23:09):
ideas of leadership when you became the president of Stanford.
You include fiction because of what one can learn about
human nature. What fiction book or books have stayed with
you well? I think A Tale of Two Cities was
one of the books that I read when I was
quite young, and I've read several times since then and
(23:30):
has always stayed with me. I think I admire dickens combination,
not only of the incredible characters he draws um in
his book, incredible writing, just a mastery of the English sentence,
but also his willingness to grapple with the societal challenges
(23:51):
that existed in that time in the United Kingdom, and
to bring them front and center and make it clear
to everybody that uh England of the time had to
improve things to become a more more just society. Martin
Chuzzlewit is my own personal yeah classic. I love Dickens.
(24:12):
Who were your mentors when you started out? I had
several faculty colleagues who acted as as mentors for me
early on, who were sort of senior faculty members and
helped inspire me think about developing my research career and
furthering it. And they made a big difference in and
(24:33):
how I thought about pursuing pursuing my research and teaching activities.
In the book, you write about being offered the position
as president of Stanford, and while you were deciding if
you were up to it, you heard it talk by
the outgoing provost, Condi Rice. Why did she say that
(24:53):
helped you make that decision? Condi told a wonderful story
about her and father, who was a black sharecropper in
Alabama and had an opportunity to go to college if
he was determined to have follow up career as a minister,
which he decided that that was the only way he
was going to be able to afford to go to college,
so he did, which is how the Rice family became Presbyterian.
(25:16):
But then her father and her mother both got their
college degrees, and of course, um she went on to
become the first African American woman to be Secretary of State.
And what she said at the end was education made
that possible for my family, and that's why I've dedicated
my life to education. And when I heard that talk,
I said that that's right, and I should dedicate myself
(25:37):
to the role of playing an important leadership role in
this university. He's the chairman of the Board of Alphabet
and for sixteen years was the president of Stanford University.
He's written a book that's a reflection on the lessons learned,
called Leading Matters. He's also the co founder and director
of the Knight Hennessey scholars the large is fully endowed
(26:01):
scholars program in the world, providing full scholarships for a
graduate education at Stanford with the goal of developing a
new generation of global leaders. John Hennessy, thanks for joining us.
By the way, if you have comments about the program
or suggestions for topics, please email me at a Closer
(26:24):
Look at Bloomberg dot net. That's a closer Look one
word at Bloomberg dot net and follow me on Twitter
at Arthur Levin. This is a Closer Look with Arthur Levitt.
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