[MUSIC] Ruth, I am so
glad to be here with you today. And as we learned from Laura's amazing
introduction, Ruth grew up close to Stanford where her father was
an engineer at the original SLAC, Stanford Linear Accelerator Center. And her mother was a psychologist. Ruth, thank you so
much for joining us today >> Thank you all for having me. >> We're all familiar with Google. Just a quick poll,
who here has used Google Search today? >> [LAUGH]
>> Thank you all. >> 100%.
How about, who here has worked or will work at Google? >> Wow, awesome. >> That's ten or so? >> Yeah. >> Excellent.
How about who-
>> Right. >> Yeah.
>> [LAUGH] >> Who here has been in a Waymo or in a Waymo self-driving car? Okay, so, four or five. Who here would like to try
out a Waymo self-driving car? >> [LAUGH]
>> We're back to 100%. >> So Ruth, it looks like we have
some beta testers for you here today, if you need them. >> Perfect. >> There's so much to cover, from your
early beginnings, to Morgan Stanley, to now Alphabet and Google. So let's jump in. Before your parents landed here in Silicon
Valley, they had a very difficult journey. And your father fled, escaped with his
life from Austria in World War II. How has your family history
shaped your values? >> Well, probably the most important thing
my father always said is that education is your passport for life. And the reason he said that
was very much to your point. He fled Austria having been
thrown out of high school. He was Jewish, and was fortunate
to be one of the few to get out. His family did not. He was young enough that he was on one
of the youth boats, went to Palestine. And as soon as he could,
he enlisted in the British army. And while he was actually fighting in the
British army, it occurred to him that if he ever wanted to live in a place where
there was freedom for him and hopefully a family that he would one day have,
he needed a skill that people would value. And he concluded that
that would be physics. And so somehow while fighting in
the British army he started to teach himself physics. He sold the cigarettes and somehow got
material to teach himself physics. And his fellow soldiers
would tease him and say, you're going to die before
you can ever use this. And his answer was always,
I would rather die an educated man. And he told us that story frequently. And it made it hard if we didn't do really
well in school, because I didn't even have the benefit of all this stuff,
so you should do really well. [LAUGH] But
it was a really important value. One, the importance of education, and two,
the gratitude to be in a country where you do have freedoms that so
many people don't have. So those were probably the most profound. My mother was amazing, a psychologist. And I remember as a very young girl,
I was born in England. And I'll never forget the day,
I was eight, my sister was six. I know that because it was shortly
before we moved back to California. And she said, it's very important
as a woman to have a career. She's telling an eight-year-old and
a six-year-old that, which she thought was a perfectly
normal time to give me career advice. >> [LAUGH]
>> But she made the point that every
cent she made went to our nanny. She worked, and I think there was
part of her that felt this guilt that many of us feel that
she was working a lot. But she was also talking about
the gratification she got and what it meant for
her to be able to work with others. And why it was important
to find one's passion. So I think they very much shaped who I am. And I'm eternally grateful to them. >> You took a commitment to education and
career, of course, seriously. You graduated with three degrees. In 1987, when you graduated
from Wharton with your MBA, you accepted an offer at
Morgan Stanley to join the mergers and acquisitions group,
the hottest role at the time. Within a few weeks of joining,
the stock market declined, the biggest decline in
Wall Street's history. How did that shape your experience? Or what did you learn
from that experience? >> Well, that's pretty terrifying. It started in August of 87 and
October of 87, on a percentage basis was
the biggest decline ever. I first thought my career was
over before it had even started. And when I joined Morgan Stanley, I was of
the view that I would only do mergers and acquisitions. I just knew that's what
I was interested in, and I would rather leave the firm
than do something else. But of course, markets change and
opportunities change. And probably one of the most important
things is somebody I really respected, who I had worked on a deal with, said,
hey, we're going to create this new thing, it's going to be covering
private equity firms. It hadn't been done on Wall Street before. And at the time I thought
it was a really bad idea. And why would I want to go do that? So I said I would hedge my bet and
do it half time. And within no time realized it was
a really exciting thing to do. And it was the first time I realized
that if you're working with people who are really smart and take a risk on you, they may open doors that you don't even
appreciate are doors to be opened. And I didn't use the word,
sponsor back then. It probably took me another decade or
two to appreciate, that's really what I was looking for. But it led me to another
place that I hadn't expected. And I think the willingness to be flexible
and adjust as the world adjusts or as you adjust or
as your life requirements adjust, was probably one of
the most important things. I didn't have an option, the world
changed, but fortunately I wasn't rigid. >> One of the statistics that comes to
mind is that, for us, many of us are about to graduate and half of us switch
jobs within five years of graduation. And you mention a sponsor or
the idea of sponsorship. And you, yourself, switched out of
Morgan Stanley to join Smith Barney, following a sponsor. And you've noted in the past that
you immediately regretted that move. So help us. How did you recognize and
fix your perceived mistake? So, I choose to say that, that period
of my life didn't actually exist, but you're taking me there, so. >> [LAUGH]
>> Thank you for indulging. >> So two of the people I worked really
closely with were leaving Morgan Stanley, and asked me to go and actually run
this private equity coverage group, which seemed like a wonderful step up and
it could be really exciting. But I really loved Morgan Stanley. In fact, my father said he was surprised
when I chose to leave because I loved the ethics of Morgan Stanley. That was the word that
he chose to focus on. At the time,
I was pregnant with our second child. And a managing director at Morgan Stanley
in front of me at one point had said to a client,
women may come back after their first. They never come back after their second. And I was terrified that what
had been a really great career, where people were looking out for
me, might get derailed quickly. Because maybe the people
I'd been working for, men, because there were so few women back
in the day in leadership positions. Maybe they got it and they had ethics, but maybe this thing I had
heard was more pervasive. And I kept hinting that I was concerned my
career wouldn't stay on the pace it was. And nobody quite got the hint, nor
did they know I was pregnant, and that’s why I was really concerned. And so I left. And after a couple months, I said,
the culture is different, and I want to be back at Morgan Stanley. And I went back and
I actually spoke to the then CEO and said, here is the subtext I never shared openly. Which of course, his immediate
response was, that's ridiculous, of course, we want you back. And yet, because 40 people followed
after I did, the door was shut. And the lesson to me,
is if you're thinking about switching, put everything out there. The worst thing that can happen is
someone will tell you, sorry no. I'm not going to honor that which
you want and you should go. But you might actually find they do. And if you find that they do,
you end up having the choice you want. And if you find that they didn't, you don't have any regrets
because at least you tried. The reason I was able to go back is
another really important lesson. Of those 40 people, I was the only one
who got the opportunity to return. And I think it really goes to this mantra
I live by which is the world is small, and life is long. And so make sure everything you do,
you do in a high quality way. And so that enabled people to say,
I should come back at a certain point. And I got the call three years later. But there was so much in there. And any time someone's coming and
telling me they want to switch careers, I tell them this story and
say, put it all out there. Make sure you've left nothing unsaid. Because you might be surprised and people
might say, you know what, you're wrong and you should come here. Or here's a better opportunity here,
and you'll never regret it. >> Thank you, that would be helpful for
the 200 of us switching jobs. >> Yes. >> In a few years time [LAUGH]. So let's fast-forward a bit. It's September in 2008. By this time, you have proven yourself
at Morgan Stanley many times over, holding many of the titles
that Laura read. One of which was Vice Chair
of Investment Banking. But also the economy is tanking. Hank Paulson gives you a call, asks you to
please help him save the financial system. >> Wasn't quite said that way. >> [LAUGH]
>> Lead advisor to the US Treasury. Yeah, thank you. I need your color, so please. Could you please walk us through that
experience and what you learned? >> Well, it was actually July of '08,
he called and said, I need some help on Fanny Mae and Freddy Mack, understanding
what's going on with the housing crisis. And so, a team and
I went down to the Treasury Departmen. And of course, July of '08, shortly
before the election, our question to him was do you want to kick the can down
the road to the next administration? Or do you want to deal with this? And his comment was I
don't think we have time. I'm concerned, there's going to be
the proverbial run on the bank. Let me understand when Fannie Mae and Freddie Mac will not be able
to fund themselves anymore. And this was a $5 trillion
balance sheet in the aggregate. And his concern was were we at the brink. And he basically said analyze
every component of it. What's the funding? What's the capital? What can we do? What are the options? And that's what we did around
the clock until September. Looking at what were the alternatives,
how stressed was the housing market, what did it mean, what was the risk,
what were the options. And it was extra ordinary
seeing him in action. And there were so many lessons learnt. You can't learn while you're in that, but you have to have the team that actually
has instinct based on experience. And it really informs how I think about
the type of team I pulled together. I want to have a mix of people who
are extraordinary entrepreneurial, will walk through any wall because they
don't know you're not supposed to walk through any wall. With people who have
what I call battle scars. They've seen three, four, five chapters
ahead, and it's that mix that enables you, I think, to come up with creative but
implementable solutions. And so we literally went around
the clock till September, then announced the conservatorship, as it was called, the path forward for
Fannie Mae and Freddie Mac. And went around the globe because his
concern at that point was we need to make sure every central bank
that holds U.S. treasuries. Or these securities understands that we're
really protecting their holdings in U.S. treasuries and
what's going to happen with the economy. And came back from that, and that was kind of step one in what
continued to be a pretty painful fall. >> Why did you decide to join that team? It sounds,
you're not one to shy away from work, but it sounded particularly precarious. >> Well there was more to it than that, and it sort of goes back to your
first question about my parents. When we were asked if we
would advise the US Treasury, one of the questions I was asked by the
senior leadership team at Morgan Stein. At the time, is that if we were
not advising the government, what would we be doing for
Fannie Mae and Freddie Mac? And what would the fees be. To be quite blunt about it, you know
if we were advising Fannie Mae and Freddie Mac, and
the initial conclusion was, we probably shouldn't
take on this assignment. And I remember saying there
are certain times in history where there's only one right option,
and this is the wrong option. And fortunately, one of the people
who was still at the firm, who was extraordinary, completely agreed. The CEO had already gone out to
make a call to Hank Paulson to turn down the assignment, and
we had this second round of conversations. Fortunately, Hank did not pick up
the phone, so we came out and said, there's only one time. There are times in history there's only
one choice, and you must speak up and you must do the right thing. And my view was that
was one of those times. If we were being asked to help at
a time that was so precarious for not just the US economy,
but the global economy, and we had skills that would be relevant,
we should serve. Message there is use your voice. You're at the table because
people want your voice. And I think it's very easy
sometimes to forget that, or not be sure of your actions,
saying something the right way. The number of times I've said something,
and then I go home and I say, did I say that the right way? Maybe I could've said it better. And then you're like, you know what. Don't keep second guessing. Make sure, though,
that if you point of view, the reason you're being hired is
people want your point of view. It's a really important for me learning. >> Thank you. So moving a little bit ahead
to- there's so much to cover. >> Happier days. >> I think so. You tell me, let's see.
So February 2015, also correct my days. [LAUGH] Upon writing
the Morgan Stanley ship, you want to to serve as CFO for
five years. And you consulted
Silicon Valley executive and coach Bill Campbell,
about what you might do next. You reportedly told him that you
didn't want another CFO job. >> Correct. I was very clear minded about that. We'll get there. >> [LAUGH] What made the Google CFO
job different or compelling? >> So, you've got the chronology, right? It's sort of gone through coming out
of what was a really painful period for Morgan Stanley as well. And we worked over the Ensuing
number of years to really position Morgan Stanley I think quite well. I think the CEO James Gorman
is extraordinary and it was wonderful working with him. I sort of reached that point where I said, I don't want to look back in five years
and say why did I do that next five years? What's the next mountain that is out there
that 's going to be really exciting, that I can be proud of? And to leave Morgan Stanley and CFO there
and like, I don't want to just go do that. And so I thought I knew I didn't want to
just do that, I didn't want to be a CFO. And so I went to Bill Campbell,
an extraordinary person, book just came out about him,
the trillion dollar coach. That really gives his words of wisdom And
it was really just to get some guidance. How to think about what
that next chapter might be. And he did ask me, so
do you want to be CFO? And I'm like, no.
But the one thing I know is that
I don't want to be CFO. And he kept returning to that question. And after about two hours he
ended with that question. So the one thing you know is you don't
want to be a CFO, and I said correct. Then he said I have the perfect job,
CFO of Google. And within, literally within a second
I said well if you're serious, of course I'm interested in that. [LAUGH] And, as I told you,
when the facts change, I'm flexible. >> [LAUGH]
>> And it hadn't even occurred to me. Google was a company that I had loved for
a really long time. First invested fortunately
through an angel fund in 1998, was part of the ITO back in 2004. Thought and
think the founders are extraordinary. The mission is really inspiring and
so I left his home still not believing it was possible,
but it's just an amazing place to be. >> When you joined, Google was known for
it's slogan, "Don't be evil," less so its processes, arguably,
you led the way to financial rigor. Including by having managers
set business milestones and even factor in the cost of employee
stock options into their budgets. Something they hadn't been doing before. This was leadership in the truest form. It wasn't easy and it wasn't popular. Your focus on return adjusted innovation
earned you nicknames, like Ruthless. [LAUGH]
>> I was called Ruthful last week, it was not bad. I'm like, progress. >> [LAUGH]
>> It's very creative of them. And this was from people who were accustomed to a more
free wheeling culture. How did you balance the tradeoff
of instilling discipline with the appearance of curtailing
Google's innovative side? >> Well, first,
I think if I did not believe in my core, which I do, that investing for the
long-term is what every leader should do, I wouldn't survive there and
I wouldn't be accepted. But I think that, what I've seen
throughout my career, is that if you don't invest for the longterm, you're actually
sowing the seeds of your own destruction. And I actually learned that really
early on at Morgan Stanley. I had the opportunity to work on an MNA
deal, the hostile defense of Gillette. And that deal was subsequently written
up in the book From Good to Great. And the reason was Gillette was
the subject of this hostile takeover, we were asked to find
a way to defend them. But the CEO at the time Colman Mockler,
I'll never forget it, the most extraordinary man. Said you can do anything you want but
you can't touch my R&D budget. And I will not tell you what it's for
but I will tell you that I do not want to be independent
if I do not have those R&D dollars. And at the time it was frustrating,
we're like we need some of it. We've got to have some of it. And he was adamant. We were able to keep the company
independent and years later, only years later,
did we learn that was the censor raiser. And he was right when he said, without
that R&D budget, without planning for the future, it's just not worth it. So the most important point is,
I do believe it's imperative to invest for the long term. I think the other thing is
people need to make choices and that sort of goes to the financial crisis. I learned so
many things working with Hank Paulson. One of the things he said was that you
have to have the will and the means. And too often,
by the time you have the will, mainly the political will,
you no longer have the means. And when I moved down here from New York,
and I was often asked about the financial crisis, I thought that was a bit
odd because things are glorious and growing out here and that's very different
than the days in the financial crisis. But then I realized that some of those
lessons were as relevant here as they were during the financial crisis, which is
don't waste the really good time and spend without or invest without care
to whether it's a great idea or a mediocre idea just because you can. Put your effort behind
the things that matter. Make sure that you when you have
the means you also have the will and so all I was trying to do and have been
trying to do is create the visibility into the data so that our amazing
business partners can make the choice. It's not me making the choice. I think that would be grossly arrogant
to think that if you're not the product leader, you know how to stack-rank all of
the incredible things you're working on. But until people have the data,
it's hard to make the choices. There is a phrase also at an Alphabet
Google, anchor everything in data and the rest will follow. So my goal was actually to just
give them the data in a way that helped people better understand how
much they were putting behind each of the various options, so
they can then make choices in stack rank. Now, obviously, unless you squeeze
the envelope tight enough, nobody has to make choices. So, that's where probably the,
some of the nicknames come in. But-
>> [LAUGH] >> But for all of you, the tools that you have,
the skills that you learned here, the ability to lay things out
clearly if you anchor everything in analytical rigor, the data should
help guide the best decision making. >> Was that something that you had
also done when you took on the CFO role at Morgan Stanley. Is that is not something that you had
to implement and place or was it there? >> I think that on every assignment
that I worked on as a banker. My view is, let's start with
a question to whoever the client is. Here's my understanding of
your hierarchy of objective. Do I have it right? Like, I want to hear what
people are solving for and it can be intellectual,
it can be emotional, whatever it is. What's your hierarchy of objectives? Once you know what you're solving for,
you can come up with the solution. And then the answer has to be able to be,
in my view, presented with analytical rigor. Because numbers are a way of framing
what's the opportunities set, what are the tradeoffs,
what's the downside potential. But the numbers actually force the clarity
of thought like one of my dad's lines. Again when I was a little kid he he
came home from slack and he said, if a physicist in his lab
could not define a quark in less than 60 seconds, they did not
know what they were talking about. And I've used that quark test for
years with colleagues. Like if you can't tell
me what you're doing and why in less than 60 seconds,
it's because you're not thinking clearly. And if you can't express it in numbers,
you're probably not thinking clearly. So that quark test at Morgan Stanley and
amongst my Google colleagues, they know what the quark test is. And it think it's a really helpful
way to try and get a pithy answer. Although this is not a pithy answer so you
may think that I've passed the quark test. [LAUGH]
>> You passed. Okay, so turning to six months ago, thousands of employees walked out
of your offices around the world. After the New York Times reported
that Google paid over $90 million in exit packages to executive
accused of sexual misconduct. Your team walked out to and
you went with the them. Why? >> So I firmly believe that diversity and inclusion and
the highest of ethics is the way. We looked to comport ourselves and
we put so many programs and policies in place to ensure that we are continuing
to do things in the highest quality way. And we were all in this together. And to me that was
the most important method. We may not always get things right. But I think compared to every place
I've seen either its clients or wherever I think we try at
least as hard as anyone. And we are as a leadership team are really
committed to getting It right, and I just thought it was really important to be with
a team to say we're all in this together. We'll address issues, we'll solve issues,
we're all in this together. Thank you, it's an ongoing discussion, and that was very interesting to be able
to hear about it, so thank you. You did mention a comparison between
Wall Street and the financial industry. You were on Wall Street when it was being
skewered by occupiers, politicians, Main Street. And arguably now you're in Silicon Valley, when the canon is turning towards tech
giants, amid calls for data privacy. What learnings from a Wall Street context,
do you apply to Silicon Valley today? >> I think probably the most importance,
well, there are many important lessons. But one of the very important ones,
is to constantly try and raise the bar on yourself. And for us one of the really important
guiding kind of mantras internally. Is the importance to respect the user and
respect the opportunity. And we do keep trying to raise the bar
on ourselves on anything that will address both, either, of those
very important guiding principles. And you bring up privacy,
privacy is a great example. From the earliest days at Google,
there was a deeply felt feeling, deep recognition that
privacy is sacrosanct. That the data are your data, and that we need to make that really
clear in everything we do. So Google was the first to make sure
that you could take your data with you. All of the controls around privacy,
we do constantly research to try and make them as simple and
streamlined as possible. And just announced changes
to that again recently, and you know Cinder has been outspoken. Talking about the imperative to
support Federal legislation around privacy as well. We did 18 months of work leading up to
the European Privacy legislation, GDPR. So there are places where it's about
upping the bar on yourself, and speaking up where it makes sense for
legislation. In some places it is important to have
legislation that's a great example. In other places there are things
that companies should and could be doing individually. But I think I saw that
on Wall Street as well, some companies just kind of head in
the sand, I wish it were yesterday. And didn't recognize, no, there was a lot that needed to change,
some of which should be self-imposed. And could be more rapidly implemented
if you were doing it on your own. And somewhere actually
legislation did make sense. Okay, so legislation is interesting to me,
I have a question for you that is unique to you. You're one of the few here in
Silicon Valley who has also worked at the Department of Justice. >> And Treasury. >> And Treasury, yeah, well,
you were seconded to Treasury [LAUGH] >> Yes, Justice was right after Stanford. >> Yes, thank you. >> Wow, you did a lot of research. >> [LAUGH]
>> You're my hero, Ruth, I've gotta research you. I may have known some of this organically. They, the Department of Justice, and
other policy makers around the world, are debating today. Whether technology companies like Google,
Amazon, and Facebook, are monopolies. As someone who's seen both sides,
do you think there's a point at which these big tech companies
might become too big? >> So a quick aside, I was a first year out of Stanford
intern in the Civil Division, so my answer has nothing to do with-
>> [LAUGH] >> [INAUDIBLE] Justice Department was a great experience after Stanford. >> [LAUGH]
>> That being said, to your question, I think that there's
a lot in the question. The reality is when you look at
the experience for consumers. We're all benefitting from ever-lower
prices, more access to more products. We're seeing innovation at a pace
that is extraordinary, and the funding around that last year,
was at the highest level ever. So there continues to be a really
vibrant ecosystem which I believe we're all
benefiting from as users. >> Great, you talked about
greatest source of vulnerability. What do you think is Google's
greatest source of vulnerability? >> So where that comes from, is one of the many lessons coming
out of the financial crisis. Was that it's imperative to identify your
greatest source of vulnerability, and protect against it in the good days. And for banks, it was liquidity,
but without liquidity you choke. And that's what happened
to individual banks and that's what happened to
the financial system. And so then I asked myself that question
when I got out here, I was kind of. If I'm going to talk about
that was one of the lessons, how do you apply it to technology? I think the greatest source
of vulnerability for technology is not continuing to invest for
the long-term and focus on innovation. So if you look at the companies in
technology that were the leaders 20 years, ago most of them are not
still the leaders. And so it really is this imperative
around investing for the long-term. And one of the many things I love
about the approach at Alphabet, from the earliest days. Was really trying to think through and
seed innovative new technologies. So in the earliest days,
they came up with an idea of 20% time. If you had a great idea, let's give
you 20% time to go pursue it, and out of that, for example, came Gmail,. Then it was the idea of X, what is now affectionately
known as our Moonshot Factory. Maybe you go do it 100% of the time,
and you try and come up with, what is that moonshot? That's where Waymo, which all of you
hopefully will be in soon enough. But that's where Waymo and our life
sciences business, Verily, came from. And Alphabet in many respects
was the third iteration, we tried to come up with a structure. We came up with a structure that said,
Google, focus over here. And let us really continue to go deeper
into what might be those next things that are out on the horizon. But I really think it is about the
imperative of focusing on the long-term and not getting pulled into short-termism. >> How does Alphabet, when you restructured it in 2014-
>> 15. >> 15, thank you, how does Alphabet
when you restructured in 2015. The vision you had for alphabet then,
how does that compare to what it is today? >> So time doesn't stop, but
I think that the main, the core of it, and Larry said it well in his letter. Announcing what are the goals for
Alphabet, was really to be able
to have Google focus. On the many extraordinary challenges and
opportunities that it faces. And not focus on kind of the next set of
things that are being done in other bets. And enable Larry and
Sergey to go really deep there, and so that's what we've been living. >> I have another
intersectional question for you because you have this old hat
of being a star investment banker. And now you have this recent hat of
leading this amazing company as the CFO. What do you think of the Uber IPO? >> [LAUGH]
>> Uber is an extraordinary product,
I think it's changed all of our lives, and it's still very early,
it's early days post-pricing. >> [LAUGH]
>> Okay, now turning to you as a leader, thank you, Ruth has seen 750 tech IPOs,
is that right? >> I haven't counted them all,
but it's been a lot. >> I've been counting, so-
>> [LAUGH] [LAUGH] So you personally spent almost 30 years on Wall Street, where you grew businesses and
stabilized ones on the brink of crisis. And you're now here in
Silicon Valley where, as you said, you're positioning Alphabet for
long term success. What traits do you have that enable
you to be successful in two very different worlds? >> Let me sort of reframe that question, because I feel like 30
sounds like a long time, but I still feel like I've got a long way to
go, so the book fully hasn't been written. But what do I think is important if I
were turning back the clock to when I was exiting Wharton? I think one of the most important
things is clarity of thought, and really being able to analyze crisply and
articulate what you think is important. And I've already said it, but it's important to use your
voice at the right time. Don't be in a room and not use your voice. I think for the underrepresented
groups here that can be hard. And I think it's much better today
than it was when I got out, but the number of people who would speak
over me or sort of try and diminish you. And I even say today, this may seem
like a really odd place to go, but I think it's a really important
message for everyone. Which is when people speak over you, even though that may feel like it's
a small thing, it is not a small thing. Because every time you're in a meeting, if somebody is saying I don't really need
your voice, I'm going to speak over you. After a while, you sort of internalize and
say if you don't need my voice, why do you need me? And so it is really important
to stake out your place and make sure your voice is heard. And today it's easier to do that. If someone tries to speak over me,
I'll literally put my hand out. I'll say let me finish. Do that for others if you see it happen. And make sure you're working for
somebody who gives you that space. So finding your voice is really important,
and then getting a sponsor, finding someone who will take a risk
on you and open doors for you. Throughout my career, I could talk
about people who did that for me, but maybe one of the most important, other
than Bill Campbell, was the conversation I had when I was asked to take over
running the financial institutions group. And I'd had a career where I
covered technology companies, and media companies, and private equity
companies, really fun stuff, in my view. And then I was asked to cover banks, and
asset managers, and insurance companies. And so probably not surprising to
some of you my reaction was wow, that sounds really boring,
why would I do that? And the person who went on to become
the president of Morgan Stanley said, you gotta trust me on this. And he literally said it's going to open
doors that you're not even aware of, I can't even tell you what they are. This was in 2006. My instinct yet again was just wrong. It was no, that sounds boring,
I don't want to do it. But when he said trust me on this, I said
okay, and then August of 2007, when you were actually at a bank is when you first
saw the cracks in the financial system. And so I had not quite a year
to figure out which way was up when it was clear there were
problems on the horizon. That led to the role with Treasury and Fed, that led to the CFO role at Morgan
Stanley, that led to being out here. So I think sponsors and having that
honest conversation are really important. So I'd sort of put all of that together. >> I understand from a conversation
I had with Jeff Immelt last week, a former partner of yours,
that you not only have a strong voice, but he said that you're the only person
he likes to get bad news from. [LAUGH]
>> I gave him a lot of bad news. >> [LAUGH] And to that end he
said that you have incredible serene sense of calm that was incredibly
rare during the financial crisis, and you were the only one he saw
through the whole storm that had it. >> That's just a comment. >> [LAUGH]
>> No, I wanted to toot your horn for you, because I know you may not. >> Actually during that period, what was
fascinating to me about him is he kept wanting to get the bad news, and
not that he wanted to get bad news. He wanted to get what I thought was truth,
let me put it that way. I think he was hoping some
of it would not be bad. But I also think that it's really
important on your team to make sure that you are hearing those voices that are
telling you something you don't want to hear, and creating a space where you're
drawing all of that information out. And in the book, Trillion Dollar Coach,
one of the comments Bill Campbell makes is always make sure,
before you opine as the leader, that you've made sure you've heard
every voice that has not yet spoken. Because often times some of the ones who
are most quiet might actually have the new idea, the most profound idea. And Jeff always wanted to hear
whatever I was concerned about, whatever the thought was. It was the challenge to him to the way
he was trying to think about it. And I think that's an important lesson for
us. >> Thank you. You may know that role playing is a time
honored tradition here at the GSB. >> Uh-oh. >> [LAUGH]
>> We love to do it. Might you indulge me? >> Yes, please, go, get some water. >> [LAUGH]
>> So Donald Trump calls. He needs a leader who knows markets and
technology, no one better than you. He says, Ruth, I need you to come
on as my Treasury Secretary. What do you say? >> Well, that call hasn't come, and-
>> [LAUGH] >> I am really focused on what I am doing right now, so,
>> [LAUGH] >> Thank you for humoring me. Let me now turn it over to my friends
in the audience to ask you their own questions. Right there? [BLANK AUDIO]
>> Hi, Ruth, thank you for being here today. You spoke a lot about
having a good sponsor. What were the things that you looked for
in a sponsor that you identified? >> Someone who is smart and
extremely ethical, so when they were solving a problem they
were thinking about what I also needed. It wasn't just being expedient in
solving one of their problems, somebody I could learn from. Early in my career at Morgan Stanley I
worked on a deal with somebody who never took me even to internal meetings,
and after a pretty long period of time
he took me to an internal meeting. And this senior person on the deal team,
the partner, turned to him and pointed at me and
said is this the I I keep hearing about? And made it really clear that he had,
for months, been taking credit for all of my work. And I said, you know what,
that's got to stop right now. And so I thought of one of
the smartest people in the department. He had a reputation for
being really difficult, but I knew I could learn from him. And I went to him and said,
I want to work on anything you have, whatever it might be,
I just want to learn from you. I've heard you're amazing. People like complements,
and so he said okay. [LAUGH] So
he ended up putting me on a deal, and the first deal was a pretty curl me deal. But I learned a ton from him, he actually is the person who
got me on that Gillette deal. He then opened the door and working on something that was
mark key opened another door. That was the first time I had
somebody who I think actually said, let me give it a go. So you have to prove
yourself to the person. Oftentimes, people will come up to me and
say, will you be my sponsor? And to me that's almost akin to saying,
can we have a child, on the first date. No, you can't. >> [LAUGH]
>> First, let's have a date, let's prove I want to have a second date, then maybe further down the line
we can talk about that. So you do have to earn the right. To have that kind of a relationship. It's a two-way relationship. The other thing I learned
early in my career, I was so grateful to somebody who was a sponsor,
so grateful for all the doors he was opening, and
then I realized, you know what? He's getting at least as much
out of this as I am, because I'm great operating leverage for him,
because he's getting these stretch goals. So I'm super excited. I'm learning. It's amazing to be in a position where
you're feeling like you're growing. So it's really a two-way street and
recognizing that as well, but to your question, you earn it and
make sure the person's really smart, respected, and super ethical. >> Hi, Ruth,
you have a lot of very unique experiences, not the least of which having been worked
both in the private sector, the Treasury. And during the financial crisis,
presumably you also interacted a lot with academics, who were also advising
the government at the time. How would you compare and contrast the
different ways in which the government, the private sector, and the academic
institutions lead and shape our world? >> It's a great question. For me one of the most important
things is to to find a place where you care about the mission of
the organization you're part of. Whether it's in a public sector or
the private sector, being mission driven is
a critical element of it. What was intriguing when you're
working with the public sector is that often times it's tough, you have different constituents who
are judging what are the outcomes. And you need to balance sort of perception elements as much as
the content elements of it. How's it going to land because you have so many public constituents that
are looking at what you're doing? But I think in each instance,
if I go back to the work at Treasury, what were the key elements? It goes back to exactly what I was
doing with private sector clients. It's what are the analytics
around any judgement? How much capital is needed in something? Well, you need to put data around it. We ended up, as an example, running
mortgage analytics to figure out how big the hole could be 24 hours a day
in three locations around the globe, because we didn't have enough
time to just do it normal way. And yet it was the analytics
that were important, so I really feel like in any setting,
what are you solving for? What's the data that's going to
help you make the best decision? And who can you pull in for
the best advice and this instinct based on experience, whether it's academics, public
market, private market, is what's needed. Hank Paulson on these weekends we were
down there, he literally would pop in and out of our conference room with ideas and
those ideas, it was because he had
instinct based on experience. And we were just looking for
whatever the least worst solution was. And so it was this mix of public-private
that actually helped inform how do we move forward? So I'm not sure if I've fully answered it,
but I don't view them as distinct, because it's problem solving for
something that's important. >> Hi, Ruth, I had a question around the
large bets that Google continues to make. So Google consistently has obviously
played a role buying large companies, YouTube, Android. And over the past few years
maybe has invested less so in some of these transformational bets. I would be curious to know,
as Google continues to grow and the core business continues to
be something to think about, do you think transformational bets
are important whether acquisitions, strategic investments or another strategy? >> I absolutely think as I said
a couple of times now investing for the long term is imperative and
it needs to be. It needs it to be at a scale that matters,
that can make a difference, that can really improve lives and
so, you framed the question well, which is that's both organic and
acquisition and I think both are fruitful. We're investing quite aggressively in
a number of areas that we do view as important long term opportunities for so one of the most exciting areas is what's
going on with the cloud right now. And we may have started later
than we should have, but we have the core engineering
pillars that are critical. It's the technical infrastructure,
the data analytics, it's security, it's collaborative tools,
it's the machine learning opportunity. We needed to bring it together, and we're
investing meaningfully because our view Is that we're very early globally
in this move to the cloud and it's an absolutely transformative one. It opens up new opportunities for
every business as they think about what are the efficiencies and
tools that they can benefit from and so that as an example is
a really important area. You look at the way we're
all using devices today and how do you think about what
are these home devices? It's desktop, it's mobile, it's also
what are the home devices that one has that enable you to get whatever you
want from, for us, the Google Home. And hopefully you all have it, listen to music, get recipes,
do whatever you want to do, phone calls. And so these are,
our hardware effort is important. What we're doing with YouTube and
subscriptions in YouTube TV is important. What we're doing with Weimo's important. We're doing a lot in health, which is
probably one of the most exciting areas when you think about
applying machine learning. So absolutely, when we look at it, we've got an extraordinary business
in what we're doing with search. We're continuing to build on that
through investments in machine learning. And then we're layering on some newer
areas and if you're going to continue to invest for the long term,
you need to keep seeding those. They don't need to all be acquisition. We do a lot of acquisitions, but you need to keep thinking about where the
world can go or where you want to take it. Okay. >> One last question please. >> Ruth, I used to work one of
those long bets at sidewalk labs. >> Can people hear you though? The oak hole at sidewalk labs, yes. The mic's coming. [LAUGH]
>> Could you talk about being a sponsor
now that you're senior, and how you decide to allocate that time and
what that looks like for you? >> I'm sorry, can you go back to. >> Can you talk about how you're a sponsor
now that you are in a senior position, and how you allocate your time and
what that looks like for you? >> So I thought you were
going to ask a Sidewalk question. For those of you who don't know, Sidewalk is looking at reimagining what
is a city and how do we think about every element of it, from mobility
to building to affordable housing. And this question about where does this
go I think is a really exciting one for us because it ties into some of
the things we're doing with Weimo. What if you don't need to spend
the kind of money Stanford spends and others do on parking garages? And you can put that into schools and
education and playgrounds. I'm going to come to your question,
I promise. But when you said Sidewalk I'm like,
there's a lot going on in the world of reimagining what can life be, let alone
the number of lives that can be saved when you go to self-driving cars, but
you asked a different question, sponsors. >> [LAUGH]
>> Look, I think that, to me, it's exciting when you look at people who
are trying to figure out where to next. As I've said many times,
I am so grateful and can name so many sponsors who've really been key to
my career, so my view is that I try and spend time every week and
in structured settings on in that individually or with groups because I
think there are a couple of ways that you can go about Actually helping people
as they're thinking about what next? And it's really about investing
in someone's career and helping them understand what
are their options to me. We owe it to our teams to understand
what the kind of the career can be. I'm literally going through with
my team now, so, and my question is on the scale of one to ten, where ten
is high, one is low, how happy are you? How long do you want to be here? What do you want next? What's important to you? And those conversations are really
valuable conversations. I like to set the tone and
drive those, and that to me is about sponsoring my team. But then, I'm also setting out
a note to all my team is, okay, I just finished that. If I have the time to do it, I want my
team to be doing it with their team. And so ensuring you're in a place where
those types of practices cascade is really important. >> Ruth, half of us here will
have graduated next month. >> Congratulations all of you, why don't we see the hands
from the about to graduate? Wow! Awesome, awesome! Very exciting. A lot of exciting things ahead of you. I will assure you that I had no idea
I would be in this role when I was the equivalent of your seat,
and life is really wonderful. >> [LAUGH]
>> Case in point. You are our last hope for our final
view from the top wisdom [LAUGH]. I thought I'd ask you some questions that
I know are keeping us all up at night. Are you ready for a lightning round? >> Sure, go for it. >> Okay, watch Game of Thrones or
eat ice cream at Salt and Straw? Man. >> [LAUGH]
>> What if I don't do either? My husband likes Game of Thrones,
my kids like Game of Thrones, it gives me a couple-hour
break to go do what I want. >> [LAUGH]
>> Iceland is a fun trip if you want to go there,
so yeah, that's the truth. >> How about going to tech or finance? >> Well, I found my cake and
eat it too because I'm doing both. But look, I think that go,
I view this is a maybe a little old fashioned but I tell my kids
these stills I hope it's a good advice. I feel like the experiences
you're about to have are a paid post-graduate education. Don't view it as, well, as you said,
on average, it's five years and then you go do something else. Be at the place where you can learn a ton,
you're proud to be there, it has the ethics and culture you want, and
you're working with someone extraordinary. Who knows where that's going to take you? And if that is tech first or
finance first and it resonates with you, you are not
shutting doors, you are opening doors. And just like being here at
GSB opens more doors for you, just make sure that
that's what you're doing. because you're on a journey and
you're very, very early. And so I am firmly of
the view I wouldn't have had this opportunity had I
not done my prior one. And one thing led to another. So I'm not trying to skirt your answer but I really think it is more about the people
and quality of what you're doing rather than should it be tech or
health care or something else. Unless you have this unbelievable
commitment and dying passion for that. >> Should we pay off student debt or
invest in retirement savings. >> [LAUGH]
>> Wow! I'd get rid of that student debt. All right. >> You can do the rest later. >> Should we have kids now or later? >> [LAUGH]
>> Yes. >> [LAUGH] [APPLAUSE]
>> Should we join a company or found a company? >> Man, I would have been
a horrible founder of a company and I'm not so bad at a company but there
are others who are just the opposite. Again, don't regret anything. I remember early on reading Jeff Bases'
no regrets point, which is When he was looking to leave DE Shaw hedge fund
to create this crazy idealist book seller, I think his parents said to him,
what are you doing? I don't know if he paid off his student
loans at that point, but he said, I don't want to have regrets. I'd rather try and
fail than never try at all, so I think the regrets analysis is actually
really good, don't ever regret something. You've got plenty of time
>> Big Data or bit-sized data? >> [LAUGH]
>> [LAUGH] >> [LAUGH] >> I think there's a lot that's phenomenal that we're living in and we haven't talked
that much about AI machine learning. But we are living in an extraordinary,
am I supposed to have one word answers? >> [LAUGH]
>> Please No, It's okay. >> [LAUGH]
>> We're living in an extraordinary time. When I look at what AI machine learning
on building data can do it's not only the fun stuff, like if you were
using one of our Pixel phones and our photos, Google Photos, You can take pictures and sort by
person by hug by whatever you want. You can go to any country and
translated any language but, you also to me what's super
exciting is what's going on. I've already mentioned
it with health care. As an example, one of the most amazing
areas it's what's going on with scans and pathology reports, reading reports. In the area of breast cancer,
we just recently had this extraordinary breakthrough, where the accuracy
of diagnosing stages of breast cancer is meaningfully better with
the tools of machine learning. And as an example,
I think it's In one of four instances when doctors are reading pathology reports
over different periods of time. They change their
diagnosis of the staging. Staging is critical because it tells you
what kind of intervention is needed how far along you are, and what's also
extraordinary is the percentage of time they missed early stages of metastatic
cancer is actually quite remarkable. From our early research,
what we're seeing is in almost all cases, when you're looking at pathology reports,
biopsies, the machine learning is able to come up with what are
signs of early stage metastatic cancer. Why is this so exciting? Because it's building on data in
ways that is a tool for doctors. And what they're saying is this enables
them to focus on the tough stuff. It enables them to go deeper. It enables them to know when to
intervene in an early space, as a cancer survivor
myself I look at this and I say, it's sort of akin to letting
doctors have the tools they need to be as effective as possible and spend
time with patients the way they want. So I get excited about these things
because I look at the ability to transform care. And I look at what we have being at
Stanford or what I had being in New York. It's amazing, not everyone around the world lives
in places as extraordinary as this. And so, really, to provide that kind of
access to quality diagnosis, amazing. One more story, I was with a doctor
recently and I asked him about this. And he said, It's amazing, the ability to
see what's going on in my patient's body on a continuous basis rather than just the
15 minutes or 30 minutes they're with me. I am not much better, and so
I look at that and I say, we're living in an amazing time. And to be able to leverage
this the right way. To address whether it's health care or deaths on the roads from cars, one thing
after another, it's pretty extraordinary what we're able to do, and I think we're
going to look back on this and say wow. How much more can we apply? >> Rao, thank you so much. >> Thank you. >> [APPLAUSE] [MUSIC]
