Full transcript: Business management expert and author Tom Peters on Recode Decode
“This is my 17th book and I've written the same thing 17 times. Why in the hell aren't you listening?”
On this episode of Recode Decode, hosted by Kara Swisher, author and management expert tom Peters talks about his new book, “The Excellence Dividend: Meeting the Tech Tide with Work That Wows and Jobs That Last.” The conversation ranges from Silicon Valley and what it's doing wrong to whether it will be AI (artificial intelligence) or IA (intelligent automation) that will disrupt the workplace.
You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we've also provided a lightly edited complete transcript of their conversation.
If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
Kara Swisher: Hi. I'm Kara Swisher, editor at large at Recode. You may know me as the woman in charge around here, but in my spare time, I talk tech, and you're listening to Recode Decode from the Vox Media podcast network.
Today in the red chair is Tom Peters, who is such a famous thought leader in management history it's hard to not know who he is. He's the author of 17 books about business. His probably most famous one is “In Search of Excellence,” but his latest is called “The Excellence Dividend: Meeting the Tech Tide with Work That Wows and Jobs That Last.” It offers guidelines for both companies and individuals as AI encroaches on all our jobs and other technologies. Tom, welcome to Recode Decode.
Tom Peters: Thank you. A great pleasure to be here.
Thank you. I want to talk a little bit about your … I want to get to your book, where you're going now, but let's help people understand who you are. You had been one of the more important workplace management consultants. How would you characterize it?
I'd have to characterize it with a quick review of the story. “In Search of Excellence” was published in 1982. The research began in 1978 or so. The Americans, of course, came out of World War II kings of the hill with nobody even in second place, and then the Japanese had the audacity to do these things like build cars that work, and they got us in ship building and they got us in steel, but who the hell cares about that? The car is intimate to the American life fantasy. We were second in a way.
There were a couple of guys at Harvard, Bob Hayes and Bill Abernathy, and they wrote a single article in the Harvard Business Review that was called “Managing Our Way to Economic Decline,” and they said too much marketing, too much finance, not enough product quality. We dittoed that in a way, but there was another part of the story that was interesting as well.
I was at McKinsey at the time, and McKinsey was getting beaten up for the first time in its history by the Boston Consulting Group, and our managing director said, “We've got to have something to talk about.” He had all these famous projects on operations and strategy, and then he called me in. I was a junior person, which was bizarre. I just got my PhD from Stanford in organization effectiveness. I think that was the reason. He said, “Look,” he said, “We're the smartest people in the world and we design the smartest strategies in the world and then our clients get out-implemented. Whose problem is it? What the hell is going on?”
Our fundamental hypothesis was, yeah, the Americans are getting the crap beaten out of us, but there's got to be some places that work. We went to some obvious places like IBM that at that point was so far No. 1 it wasn't funny. We went to places — and this is weird to say in 2018 — I went to St. Paul on a cold day and talked to 3M. Nothing had been written about 3M. Also at the time, we went to a middle-sized company or a large middle-sized company. I myself as co-author. Bob Waterman at McKinsey office in San Francisco where the weirdos in theory were, according to McKinsey. We went 30 miles down the road and talked to this funny little company that nobody had ever heard of, and it's reasonably well-known today, and it's called Hewlett-Packard.
The lid comes off the whole thing. There are a million ways to describe that, but at any rate, so we wrote this book called “In Search of Excellence.”
To show practices that …
Yeah, to show some … Well, I have this strong belief, and that is if I get to sit across the table from you, it's because I had so many incredible strokes of luck that they could not be counted. The week that our book was published, President Reagan announced 10 percent unemployment for the first time since the Great Depression. The way that I describe it, which has at least a grain of truth, is within the space of a week, all the business books moved from the back of the bookstore to the front of the bookstore.
The front, right. “What do we do?”
Our timing was perfect. All these books that had come out, like “Theory Z,” “The Art of Japanese Management.” Fundamentally, they said there's only one answer: Study Japanese. We said, we suck but not everything about us sucks. Here are some case studies.
In order to give people a guidepost of what we …
That there's some places that work. There are these companies like Hewlett-Packard that can do cool things. 3M keeps inventing this string of products, and Johnson & Johnson and so on.
Talk a little bit about what was considered excellence then and what were the key factors of excellence, because I want to get what's now.
Well, that's a delicate question because we work for McKinsey. Everything was quant, and so we had to come up with a quantitative measure. We have, I think it was 43 companies in the book, and we started out with 60 or so and we put these financial hurdles on them. We had to play the money game. What happened to me and what happened to Bob is we saw another way of living. I remember when I was the junior person to Waterman and we were going down to Palo Alto to talk to Hewlett-Packard, and I was the junior guy so I was the one who had to call.
We were used to working with people like Chase, and McKinsey was in the 49th floor of the Bank of America tower. If you were the CEO and I wanted to talk to you, I would have talked to the personal assistant's personal assistant and three weeks later, you would have said no, effectively.
I use this thing that most people who are listening to us don't understand called a phone book. I looked up your Hewlett-Packard and I called Palo Alto, and I got to somebody at the front desk and I said, “Hi. My name is Tom Peters. I'd like to speak to John Young,” who was the president. I was preparing for the three-week wait and this gruff voice, “This is John Young. Who the hell is this?” It was like, huh? You can be this way in a big company?
The really magical moment was when he introduced u —, and I write about this as intensely today as I did 30-odd years ago — to this thing called managing by wandering around, MBWA. MBWA is a great term and a great idea, but to me it became a metaphor for being in touch, for not losing touch with the people who do the work and the products that you're making.
In fact, the funniest thing that happened is after the book came out and sold a few copies, we got our three and a half minutes on the “Today” show and we're interviewed by Bryant Gumbel. We're sitting in the green room and Bob turns to me and he said, “Well, who gets to say it?” I said, “What the hell are you talking about?” He said, “Who gets to say MBWA on national television?” He was senior. He said it. I'm still pissed off 35 years later, but that was the feel of it.
That was one thing, one, managing by walking around. It's a mindset.
It goes back to all the stuff that we will undoubtedly talk about with artificial intelligence. It was the human workplace. These were human workplaces. The guy I talked to at 3M ran a big division, and he was sitting in a cubicle with three-feet-high walls, and he was a guy you could talk to waiting in line at Safeway for groceries. We were stunned by that because it was completely antithetical to our experience.
To what had happened? What you're talking about is a Silicon Valley innovation kind of workplace. Is it a unique thing? Because Silicon Valley talks about itself a lot.
Oh, boy. That is so difficult. To some extent, you hit the nail on the head. Silicon Valley talks about it. These people did it, and they didn't even really know they were doing it. We ended up with a list of eight traits, it amuses me now, and the No. 1 on the list was something we called a bias for action. Now that's the first commandment, the second commandment and so on from Silicon Valley. These were places that tried stuff and built prototypes, which now has become conventional wisdom, though that's a much longer conversation because they talk a lot about it, but I'm not sure they really do it other than under the heading of agile and some other terms that I'm not in love with.
Bias in action.
Bias for action was number … It's a trivial list, and I just gave a speech at Fidelity and I said, “I hope you buy my book, but the reality is this is my 17th book and I've written the same thing 17 times. Why in the hell aren't you listening?” I talked to people. Find out what's on their mind. This guy at Twitter said the four most important words in any organization are, “What do you think?” It's treating people with respect. I've got a whole chapter on listening and so on.
It's the same thing.
It's the same thing for 35 years, and it's not being practiced, and I don't know why. I know why at some level. You and I are talking as all this media merger stuff is going on. Honest to God, if we talked about that for two minutes, I would barf on the microphone.
No, I won't. I promise, but absolutely no mention, no matter how peripheral, of delivering value to the customer. CVS and Aetna announced that thing. I'm actually, as a health care user, going to get screwed out of that. Prices are going to go up. I put everything that I've done, I've done 3,000 speeches, and I put it all together at a website that I had called excellencenow.com. It ended up being a 4,096 slide presentation with 200,000 words of annotation, but something has to come first, and I chose this quote from Richard Branson. The quote said, “Business has to give people enriching, rewarding lives or you should not do it.” To me, it is as simple as that.
Way back when — and there are still devotees of it now and I'm a devotee just to the idea — there was this guy named, I think it was Robert Greenleaf, and he wrote this book called “Servant Leadership.” I start speeches now, and I've been doing this book tour and I'm 75 years old, and I get more and more and more pissed off as I run around. I said, “What in the hell is an organization? People serving people. What is a leader? People serving people who serve people. This is not rocket science.”
Right. The things you were talking about “In Search of Excellence” really still apply today.
Absolutely. One thing that we can go to or not go to, there's this class of people called management gurus — and, actually, the Economist invented it, it's a sickening term — but as I said, I can't totally say that because it pays the bills. Again, the whole issue is I bet, and I was listening to this discussion with Adam Grant and he mentioned a really cool company, 98 percent of what we people write is about the Fortune 500. I am not interested in the Fortune 500. The Fortune 500 exists to make money, cut jobs, buy shares back. What I'm in love with are the SMEs, the small- and medium-size enterprises.
I dedicated this book to about 10 or 12 people. My favorite people were this guy, Vernon Hill, who started Commerce Bank in the U.S., Metro Bank in the U.K. Larry Janesky, who is in Connecticut and has a company called Basement Systems Inc., Jungle Jim Bonaminio in Fairfield, Ohio, has this incredible retail shop. People come from all over the world. It's these incredibly exciting places that …
New things are happening.
Yeah, where new things are happening and where people really do pay attention to the customer and they really do pay attention to the people. Fortune has a list every year of the top 100 companies to work for. A couple of years ago, I think it was the 20th anniversary of the list, and they found 12 companies that had been on the list for the entire 20 years. The cool thing to me relative to what I do for a living is seven of them were from industries where, in theory, you can't pay people good wages from hospitality, from groceries.
They went through these seven companies and said, “Is there anything that these companies have in common?” They found one variable. You're the smartest kid in the room, but I bet you wouldn't get it in 20 guesses. The variable was extensive employee benefits, comma, for part-timers. It's fabulous, and you can afford to do this. Publix is growing and they're making money, and it was just this whole list with Nordstrom and Publix and Ritz-Carlton, 19 … This ain't small change.
I get it. I'm going to stop you.
Publix has 100,000 employees, so it's a big deal, anyway.
What you're basically saying is that things haven't changed. What I do want to get to in our next section is to talk about what are the key characteristics now of excellence and where is the workplace going? Because I think many people right now, maybe you don't agree with me or I have a feeling that something's going to change really drastically where the companies are not run in ways that you're talking about, which is as a service to workers, because there's a lot of … It seems like there's a lot of disconnect. Would you agree with that or not?
Oh, totally. The whole process, there's this famous Oxford Deloitte study that said 50 percent of American white-collar jobs are going to disappear in the next 20 years. Brilliant people wildly disagree about this stuff. There was a counterstudy that came out that analyzed the Deloitte study and said it's more like 10 to 15, but whatever it is, and this is my bias in the book, if you're a worker, you got to get ready, and you've got to prepare, and you've got to grow. How much yogurt hits the fan, how fast, but this fear factor, and the fear factor, I think — I am the 87 zillionth person to say it — was clearly a part of the 2016 election. There's no issue about that if you dug deep enough. People are terrified.
The statistic that blew me away in one of the books that came out is it said that for the 25- to 64-year-old white male, inflation-adjusted wages haven't gone up since 1970. My response was the only thing about Trump is it's a miracle we didn't have a Trump 25 years earlier. We had a George Wallace if he hadn't gotten shot. It was funny. One of the books called it, I think, deer hunting with Jesus, and George Wallace had exactly, down to the semicolons, the same message fundamentally. He was selling it in Michigan. This weird guy from Alabama won the Michigan Democratic Primary.
We'll get into that when we get back. We're here with Tom Peters, the famous, I'm not going to call you a management guru now because you don't like that.
He seems to write about companies sometimes in some books. His newest book is called “The Excellence Dividend,” and we're going to take a quick break now for a word from our sponsors.
We're here with Tom Peters, whose new book is called “The Excellence Dividend.” Before we get into talking about this, I sort of want to set it up. Actually, let's talk about the book. What were you thinking when you wanted to write this book? What was your goal? Was it to find these small- and medium-sized businesses that were doing new things?
Or not new things? Or old things well?
Well, let's get to the bottom line and then come back. I do believe, and I make it clear to say offensive strategies not defensive strategies, I do believe there is a way to survive this. I do believe that it has to do with the humanization of services.
I was flying from the Albany airport to the Baltimore/Washington International Airport three or four years ago. Plane that was coming in with the pilots came in late, and on time is everything. I'm watching … this is Southwest Airlines which is no great surprise, at least to me. I'm watching the pilots coming toward the aircraft. There's the standard garden variety line of six wheelchairs. The pilot turns to the woman in the first wheelchair and says — I've said this 150 times and the hair, or 250, and the hair on the back of my neck goes up — turns to the woman on the first wheelchair and said, “Would you mind if I took you down the jetway?” I have got roughly 7,500 flight legs to my credit, I've never seen any … Those are the things that you remember for 25 or 30 years.
But then the key is, how the hell do you build a culture where that happens? Colleen Barrett, who was the president of Southwest for a long time, said, “We look in our hiring for listening, caring, smiling, saying thank you and being warm, and we want it as much from our pilots and our mechanics as we do from the desk people or the flight attendants.”
But that's the kinda thing that builds incredible loyalty.
Right, even in this day and age.
Listen the guy who, first I was gonna dedicate the whole book to him. He's the lead story. It is this commerce bank, Metro Bank. All the big banks are cutting branches, getting rid of people.
Yeah. He has added 17,000 jobs in the so-called stuffy United Kingdom. Two to three thousand people show up for his branch openings. He trains his people incredibly well. The place is overstaffed, the branches are beautifully, excitingly designed.
I had the funniest thing, I sat in on an interview with somebody like you with him and this person who had come in from the outside, a Brit, and so he said, “How do I get …” You know, he's supposed to be a hard-nosed member of the fourth estate, first thing he does is he asks Hill how he can open up an account at the bank. It's crazy, they …
That's not hard-nosed.
Everybody needs a bank account.
Yeah, and you know, they thrive on dog friendliness. You cannot get out of the place without … In their annual report a couple of years ago, we gave away … But, it's totally human.
Okay, so being totally human. What else?
Well I mean, I singled some things out for separate chapters that I pulled out. One of them at the top of the list, and I don't give a damn whether if it's the age of AI or not, is training. Training, training, training, training, training, and more training. To me, the odds of performing things that customers care about go up dramatically. The way I put it is three-star generals and four-star generals talk about training 24 hours a day in the Army and the Navy and the Air Force. In the typical company, it is a mid-level ho-hum job. Why?
And so, training is a huge part of it. When I have a section on leadership in the book, it starts out with a chapter on listening. Again, it is really basic stuff, and it will work, damn it. How do you have a bloody grocery store called Jungle Jim's — and you're not allowed to call the guy Jim Bonaminio. You have to call him Jungle — and people come from all over the world because he puts on a show.
People love the Malcolm Baldridge National Quality Award. My favorite award on earth is the one that Jungle Jim won, and the award is called Best-Dressed Room in America.
All right, so training. What else?
Humanity. It's just a place that values human beings for being human beings.
So, I'm gonna push on this because I think most people feel that that's not where workplaces are going in that way.
Right. There's absolutely no reason why they can't.
But here's what we have. We have the forces of automation, robotics, AI, even self-driving. I'm gonna use that as a broad term, all these different technology forces gathering, and your book has a sub-head about tech, like that tech is part of it. You have all these, talk about these forces right now and how you look at them, because they all spell a very different workplace.
They spell a very different workplace, but you've gotta make it until tomorrow morning, I've gotta make it until tomorrow morning, and the dire ones say 15 to 20 years. One of my responses is for Christ's sakes, we've gotta meet the customer's needs in 2018 and 2019.
I get that.
My bias is, and I'm not alone in this. Self-driving is incredible, but the number of state, local and national regulations that have got to change to make it happen are staggering.
But that's kicking it down the road. I want you to talk about these trends. What do you imagine they will do to the workplace? Because when you talk about these things, many of these jobs will be replaced, like you said no matter what.
Or they will be changed.
I'm a great fan of the two MIT guys, McAfee and Brynjolfsson, who wrote a book, “The Race Against the Machine.” They argue — and I was not particularly in favor of this at the beginning — that every time we've had a technology change, I can identify every single job by name, number and serial number that we're gonna lose, and I can't identify any of the new jobs that are gonna be created because they haven't been created.
It's this AI versus IA. Is it artificial intelligence? Or is it intelligence augmented? Will it be a tool? Or will it wipe us out? I hope that we'll end up more on the intelligence augmented, and I think … I'm not terrified. I mean, I'm 75, what the hell do I care?
I'll be dead.
I believe that the 40-year-old who is totally dedicated to reeducation every single day of the year is gonna make it and is gonna flourish. I think that they are going to flourish by being a value to some customer set, for God's sakes.
Right. Customer set.
It's not new. It is not new. My wife and I have a sub-zero refrigerator and the compressor went out. The guy came to fix it. I chat with everybody. Here's a guy who I would guess is 40, 45 years old. He has a little utility company that helps do appliances, six people. He had just gotten back from a two-week training course that he had paid for out of his own pocket on the Internet of Things. You know, when refrigerators start ordering your stuff for you.
I think he's gonna survive, and I think he's gonna thrive. I think there's a good chance that his six-person company will be a 16-person company. I am incredibly optimistic about people like that.
Where do we fall short? What is happening? And who's responsible for that? Because one of the things I talk about a lot is that these technology companies, Uber or whoever you wanna point to, are creating these technologies that obviously may create more jobs, but it's gonna displace a number, and there's nobody there thinking about it or caring. Neither one. I'm not so sure it's their responsibility to do that. How do we think about that when we don't know where these reports are coming out, where jobs are going and what happens? How do you figure out who should be the one to take the lead in this?
First of all, I would … Somebody who's spent 30 years of his life working in Palo Alto, and I know the term is strong. With all the stuff with Cambridge Analytica and so on, I think it's become a moral cesspool. I will not go back …
Tell me about that. I agree with you in large part.
Yeah, it's a strong word.
No, it's not.
It is a strong word to say moral cesspool.
All right. Explain.
I go to New Zealand in the winter. We had a friend whose kid who works in Silicon Valley, and said, “My son calls Palo Alto now Shallow Alto.” I'm sure it was the same damn thing with the cotton gin. Nobody could have predicted the implications, but what annoys with the Zuckerberg testimony and so on is still this game of naivete.
For God's sakes, I live in the United States. Until recently, I was proud to tell people that. Somebody screwed with my country's elections, and they screwed with them because of the way these extraordinary tools were used. I don't think Zuckerberg could've predicted it or should have predicted it, but I think he could damn well jump into the middle of the fray. I don't give a shit what his net worth is. I'm just rabid on this topic.
He should have jumped in, right into the middle of the fray. I'm not suggesting that he immediately should have gone to a fee model or what have you, but he could have stood up in front of his fellow Americans and said mea culpa, and we're really gonna work on this stuff. For God sakes, you look at the things that are said still today, to this day, they're dodging it. They're completely dodging it, even some of … I don't know about Miss Sandberg, but for God sakes, Eric Schmidt, who's supposed to be the adult supervision, he's …
You are exasperated, Tom.
I am completely … it was my home. I only get to be here with you because in Silicon Valley, I lived with it. I know it can just, it's maybe just the ravings of an old man.
I like the ravings, Tom. Keep going.
It's my bloody valley.
I had my office on 555 Hamilton Avenue. I'm not trying to recapture …
Because the yogurt shop.
Bill and Dave going to Diana's or whatever the hell it was where we all went to.
Go back. You were there for 30 years. What was it like then? I agree with you. Maybe it's a moral puddle, not a cesspool.
It was different, because until Mr. Jobs incarnation No. 2, when he came back, there were zero consumer goods coming out of Silicon Valley. Route 101, which has so many of the big gangs today, was Lockheed Martin, Philco-Ford. They were defense contractors. The average engineer was 43 years old and wore a pen protector. The pace was a lot slower. It's an evil world and we have to have weapons, so I'm not against weapons manufacture, but it felt purposeful. I don't think David Packard would have given … That's the way I can describe it to you.
Mark Zuckerberg's testimony and David Packard's testimony on the same issue: You would not have had one coincidental word, sentence or paragraph. Packard felt that he was part of the United States of America. He felt that he had an obligation, and I'm not suggesting he would have blown his company up, for God sakes, but he wouldn't have been evasive.
He would have spoken plain English.
I think one of the things I've talked about for two years now is this evasion of responsibility, or abrogation of responsibility. I think that's how I'd put it, because it's sort of like, “Bad things happened, we don't know how.” It's a group of people that, before that, were saying how smart they were, and so you're sort of like, which one is it? I think the term that Mark used on the testimony which I found rather irritating was, “We now see we take a broader responsibility.”
That is the ultimate bullshit sentence. Honest to God.
Well, I thought the one where they said, “We don't make money from … We don't sell your data, Senator.”
That was my … You kinda do. Not technically.
I'm not pro … What we said a minute ago. I'm not asking them to have anticipated it, but once it smashes you, particularly stuff like Cambridge Analytica, don't dodge. Be an adult.
That was an interesting …
Somebody's screwing with my country. When my wife and I go to New Zealand, which we're lucky enough to do for two months, people laugh at us.
Oh, they do?
I think they're laughing at us from another country, Tom.
From every country.
But that's a different thing. I want to get back to this idea, is that the abrogation of responsibility is a mindset that to me doesn't breed innovation. You know what I mean? It doesn't … What was interesting is I did an interview with Tim Cook not longer after this. I said, “What would you do if you were Mark Zuckerberg?” He said, “I wouldn't be in this situation in the first place.”
Which I think is true.
Which was great. Then, he had a very cogent analysis of what happened and what should happen, which was adult, which I felt was an adult, a great response and super smart, like, “Here's the problem. Here's what I'd do. Here's what …” You know what I mean? Obviously, he has a different business model, so he has the luxury of saying that.
What was really interesting to me was instead of people going, “Okay, that's a really smart thing to say, you're right,” he was attacked by Mark and others because Apple is expensive, whatever excuse they used. To me that was a really … The response was more interesting than anything else because it said, “We don't take responsibility. We're not listening to someone who's making a cogent remark, and instead our first impulse is to attack the messenger.”
Absolutely. I think it's … I'm not surprised that Tim looked at it in an antithetic, and I'm afraid I'm not surprised that their comeback was …
So, what happens? Because here's these companies that are supposed to be the most innovative, and you wrote about the most innovative companies early on. Is tech really the leaders anymore of the thought leadership, or what do you imagine has to happen? Because they have created this enormous wealth.
These enormous innovations, and they have practices that led to that. Where do you imagine it going?
The one thing that has happened, which is a fabulous thing, is nobody's dewy-eyed anymore. We don't, every night, get down on our knees in Greater Boston and worship Silicon Valley. That's huge. It's an attitude shift. I certainly agree that everything in the world is over-regulated, but there's got to be regulation for this, the same way there was for AT&T years ago. Incidentally, maybe I didn't hear you. I don't think there's anything antithetical about measured conversation and accepting responsibility and wild-ass innovation. The two are not antithetical.
Innovation is about trying stuff. I call it WTTMSW, whoever tries the most stuff wins. Then I've got a longer one, and I can't remember all the letters. Whoever tries the most stuff and screws the most stuff up the fastest win. I've got a chapter on that. It's my only chapter on innovation. I said to people, it's the only thing I believe after 30 years, but I see that … So, I've got that chapter, and then I've got the people section. They're not antithetical. If you feel an ownership and if you feel a responsibility, the odds go up higher.
Toward the world, toward the rest of the world.
Toward the world, and there's more willingness to innovate.
All right. This is really great conversations. When we get back, we're with Tom Peters. He's the author of “The Excellence Dividend.” We're talking about the moral cesspool of Silicon Valley, which is always my favorite topic. When we get back, we'll talk more.
We're here with Tom Peters. His new book is called “The Excellence Dividend.” He obviously is most famous for “In Search of Excellence.” We've been talking about where Silicon Valley has gone awry, I guess.
I want to get into this thing, about one of the issues around Silicon Valley, another one, which I think is, the issue around the country is diversity, and the MeToo movement, and everything else.
It seems new numbers just came out today for every tech company and it's still the same. Do you consider this a problem? Obviously, they haven't fixed it, or they haven't made any strides whatsoever, and they talk about fixing it, but they never do. Should this be something they should focus on, or any company should focus on, or not?
I'm smiling at you.
Because it is a topic that I have been working on since 1996.
Right. Yup. Yes, you have, yup.
And that is gross understatement. I've been working on women's issues since 1996. I've got a chapter on that in the new book, and chapters in the old book.
So tell us about it. Tell me about it.
Well, first of all, fundamentally, as I read the research, the research says women are more effective leaders. Women are more effective negotiators. Women are more effective salespeople, women are better investors.
One of my favorite books, I don't know whether you've ever had on. She's a Motley Fool person, LouAnn Lofton, and her book, my favorite title of all books in history, “Warren Buffett invests Like a Girl: And Why You Should Too.” The wonderful thing was, Buffet had never heard of it, and he wrote the first review on Amazon.
Yeah. Yeah, okay.
And so, I believe that, particularly, and it gets back to some of your earlier questions. Particularly in today's world, where the old power structures don't work, that the sensibility that women, in general, bring to this stuff. And the evidence? For God's sake, you cannot dodge it anymore.
I worked at McKinsey. If they are one thing, they're analytically brutal. One study they had said, and this was worldwide, companies with truly mixed-gender boards wildly outperformed others financially, including a 56 percent higher profit margin. I get into this in Twitter all the time, and I said, “Well, if you really wanna know who I am, I believe in tokenism, and tokenism is, every board should probably have one or two men.” Ruth Bader Ginsburg said, which I love …
Oh, I love her.
Ah, I know. If you're not in love with Ruth Bader Ginsburg, yeah.
I'm going to clone, I need to clone her.
Yeah, well, we both can. It would be a little tougher for me, but we can both do it.
Somebody said, “What would you feel is the right gender balance for the Supreme Court?” She said, “Nine to nothing.” Women! Makes sense. First 225 years, we had nine-zip, men.
Yeah. You're right. Right.
I mean, first of all, it goes back to economics, number one, when I started talking about this 22 years ago, I said, “Listen. Social justice is incredibly important to me, I marched on Washington for choice, but that's not what I do for a living.”
Right. Show your numbers.
I said, “I am here because the simple fact of the matter is that women buy everything.” Eighty percent of consumer goods, women are now well over 50 percent of professional purchasing officers. So they're as likely to sign the 10-year, $5 billion dollar RSIT outsourcing contract as to choose the family vacation.
I have what I call the squint test. And my squint test is, “Show me a photograph of your executive team. I ain't counting, we're not talking quotas. When I squint, the composition of the team oughta look kinda sorta like the market that you're serving.”
I think that any board that is not … And gender balance, I wrote this in the book. I said, “Gender balance. I'm trained as an engineer, I'm shockingly sophisticated, mathematically. If you have a board of directors of 10 people, gender balance is, take 10, divide by two. Five women, minimum, and frankly, I think it ought to be six or seven.” The McKinsey study …
And, again, McKinsey is not into overstatement. They said, “If you want to succeed in today's world, start by promoting women.” And I believe it is a different set …
So what happens in these industries? Because what is considered our most innovative industry, which is Silicon Valley, in tech, really is mired in, not just not women, people of color, diversity of thought, diversity of age, diversity of everything. Where they do not seem to be moving the needle.
Where does that go, in the current environment?
Well, I don't have a clue.
Because I completely agree with you, and I don't know how this, maybe there'll be … Did you interview the woman, I can't remember her name, who wrote “Brotopia”?
Yeah. We ended up with a great conversation. I mean, “Brotopia,” I read it, in a book with hard covers, and if you went through the book, you would see barf stains on half of the pages. It was 10 times worse than I thought it would be.
But how do you — to throw the question back to you — if you … How do you fix something that bad? That's not one that can be fixed by regulation. You know the most fascinating thing I thought? I think it was “Brotopia,” it might have been in the other book that came out. The most fascinating thing, and I think she was the one who said it, relative to what we're looking at with it, she said, “One of the problems of having all your code written by boys, who, in general, don't have the social skills they might have, women would have brought a different sensibility to the writing of that code.” I think that is absolutely true!
But how do we make it happen in Silicon Valley? God alone knows.
So, is it happening other places? Give me some examples.
[laughing] Well, one of the tragic answers, which I happened to read when I was on the train coming down from Providence this morning, is — and I tweeted it, and I said, “Melinda Gates gets the quote of the year.” She said, “We have a lower number of women Fortune 500 CEOs than we have CEOs whose first name is Jim.”
Jim, right, yeah, yeah.
I love that!
Yeah, we did that on Facebook.
You know, I was sitting on the train, laughing hysterically, spitting all over the guy next to me. But it's not funny.
Right. No. We did that on the new Facebook reorg.
I mean, one thing that's going to happen, and this doesn't speak to the much more difficult issue of white men, etc., is men have become superstars at dropping out. I think the undergraduate, women graduates at the baccalaureate level, is something like 55 percent. Women graduates at the graduate level is up in the 60s. I mean, my laugh line is, “Ten years from now, I know there's going to be a woman CEO, because if all five candidates are women …”
It is happening, but the numbers are still awful. I mean, again, relative to what I do, when I throw books at people and so on, is start with the market. I'm not asking you to believe that women are better leaders. I'm asking you, respond to your market.
Market, right, of whose …
Yeah, and it's the same people … incidentally, I've got two topics on that, in the book. The other one is me. We can talk about all this stuff, but who has the money? It ain't the millennials, it is the over-50s.
And nobody understands that in Silicon Valley, frankly, or anywhere else, and that's insane.
Yeah. So it is interesting, because a lot of the inventions are … I have a joke where I say, “San Francisco has become assisted living for millennials, because all the inventions are about pizza delivery.”
Oh, yeah, absolutely.
I like pizza delivery, but it was a really interesting, and everybody laughed, and I'm like, “No, but think about it.”
No, it's not funny.
What's being designed, what's actually being designed, is for their benefit, and so where are the creative things that are financed?
Which, in general, has always been true in marketing: Why don't we focus on older people? It's the same thing. Every ad agency, you're not allowed to be hired if you're over 32, 32-year-olds don't understand 55-year-olds, and yet, you can throw numbers around, but the little …
Just one quote that just nailed me, relative to this, is a guy who used to be the head of AARP, and he said, “At the age of 50, you have only gone through half of your adult life.” We're going to be live to be 75, we're going to be relatively healthy at 75, the tuition is paid off, the mortgage is paid off.
We have this joy on Earth called discretionary income and time to spend it. And my old friend, she's a co-author on one of my books, Marty Barletta, wrote a fabulous entire book, and it was called “PrimeTime Women,” and she said … The boomer woman market, there was one number that came out of Fidelity that was stunning: Women in the United States, over the next three to four years, there will be a $22 trillion wealth transfer.
My people, the men, we do you guys the favor of dying seven and a half years earlier. That helps.
Thanks so much.
Yeah, it's our pleasure. Women may not be at the CEO level, but over 50 percent of American managers are women now, and so, at the first three or four levels, the amount of wealth coming in, in terms of income, and so on is enormously high. You put women and age together and you have got the most dynamite market known to humankind.
One little number, take a classic example. The average American buys 13 automobiles in the course of his or her life, all right? Seven of them after the age of 50. How much do the automobile makers focus on that?
Not at all.
But I don't think you're going to be buying cars. That's a different thing.
Well, that's a different, that's a different story.
So, say, yeah, yeah.
But, I mean, it's a number that deals with multi $100 billion market opportunity.
Right. That is missed.
And ain't nobody looking.
All right, I want to finish up by talking about what you think the top trends in the workplace are going to be, and the things that people have to … like, give me three of what you think people have to pay attention to, in management. You can focus on this book that talks about tech, but what do you imagine the most important ones … I think your title is, your subtitle is, “How Tech Can Wow.”
Yup. Well, again, it's what we've been talking about, all the way through. Henry Mintzberg, who is the real No. 1 management guru from Canada, has a wonderful study that he revealed, and it says, when you get out of university, if you have a professional degree, law, engineering, business and so on, you get twice as many job offers, 50 percent as much income. In year 20, the liberal arts people have knocked them off the rails.
There was a wonderful study, I'm sure you've dealt on it. I saw it reported in the Washington Post, and it came out that Google, their best employees, seven key traits, STEM is last. Just staggering to read that stuff. So my belief is, in my perfect world, my company with 200 employees is going to focus on creating an environment where the pilot stops and helps somebody down the jetway, and you will remember that for the rest of your life, and thanks to social media, you will tell 83 gajillion people.
So, creating that kind of an environment … I don't know if you know the book, “The Business Romantic,” by Tim Leberecht. It's a fabulous book, but he and I were talking about this, and I was talking about stuff like … I went out, and I'm always amazed at the domain names you can find. And so I've got two new domain names, as of from last week, Radical Humanization and Extreme Humanization, and I really think you can figure out how to use them. I don't know how to properly use them.
I like those.
They aren't bad.
No, they're good.
But it's, Extreme Humanization, to me, it's an offensive strategy, it is not a defensive strategy.
I'm carrying around in my pocket something that came from this Metro Bank. It's a blue plastic bone.
You're walking your dogs, yeah.
Well, yeah, but what's inside it?
A pooper scooper bag.
Right, exactly, right.
That's how you create 17,000 jobs in an industry that is laying off tens of thousands.
I believe humanization can work anywhere. I believe it can work with my six-person appliance repair guy, and that, to me, is the answer. But I don't go to church very much, and so on, but I wrote a lot in the book, as well, of what I called moral responsibility.
Right. Which you know.
That's my real answer to what you're saying.
If I am a leader of anything, I have a moral responsibility to have the people who work for me for four months on a temp project, or four years, leave the organization better prepared for the future. There's a wonderful quote. Robert Altman won the Lifetime Achievement Award as a movie director, and he said, “The role of” — I just love this, and I've gotten fantastic response to it: “The role of the director is to create a space where actors and actresses can become more than they have ever been before, more than they have ever dreamed of being.”
That, to me, is what every business leader, whether you're working in a six-person training unit, at an $80 jillion company, or have a six-person company, that's what it is all about. Human beings serving human beings.
So do you …
And it's a great way to make money in 2018.
Absolutely. So, do you think the tech leaders are going to get that, since they're on the hot seat now?
No, I don't. And, given the nature of government, I don't expect anything to come out of Washington.
I don't, either.
I don't think they're going to become irrelevant. I think the process of using AI is going to be much uglier. I mean, for God's sake, we talk about the Industrial Revolution. Yes, it took longer, but what did it include? A couple trivial things, like World War I, World War II, and so on.
It's going to be an incredible transition, number one.
I don't think that, maybe, and you have to tell me, because you're the one who sits on the other side of the microphone. Maybe it's going to be better, coming out of Austin, Greater Boston, Seattle and so on. Maybe.
I happen to live in Greater Boston now, but that's irrelevant. I'm still a Palo Alto boy, that's who the hell I am. The mentality, I think, around entrepreneurship in Boston, Greater Boston, is a little bit less coarse.
And a little bit less rude, and …
So that's our hope, yeah.
And maybe that is a significant saving grace over a longer period of time. But I'm not counting on Santa Clara County.
Right. All right.
I weep for Santa Clara County.
On that note, Tom, preach! I like it. Thank you so much for coming on. I really appreciate it, I really do, 100 percent. It was great talking to you.