Patricia Russo

Pat Russo:

My learning from every experience I've had that's been tough is you can do more than you think. Being transparent and authentic and honest about what has to be done is going to produce the result.

Sam Saperstein:

Welcome to the Women on the Move Podcast from JPMorgan Chase. I'm Sam Saperstein. Women on the Move is a global initiative designed to empower female employees, clients, and consumers to build their careers, grow their businesses, and improve their financial health. Each episode will feature successful and inspiring women who are breaking the mold. They're sharing their career journeys and leadership lessons, talking about their professional and personal goals, and making a difference in the lives of others. This season, I'm taking you to the World Economic Forum in Davos, Switzerland, where I caught up with many of the women who inspire me every day.

Sam Saperstein:

Today's guest is one of the most accomplished executives, having led companies and boards through times of crisis and growth. Pat Russo is the chairman of Hewlett Packard Enterprise Company and the former CEO of Lucent and its successor, Alcatel Lucent. Pat steered Lucent through the telecom crash of 2002 and shared her remarkable stories of leadership in difficult times. Today, she's on several boards, including General Motors, Merck, and Arconic. For more than two decades, Pat has redefined what corporate leadership can and should look like. She's a leading voice for greater diversity and transparency in the workforce. I learned so much from Pat and I hope you enjoy this conversation as much as I did.

Sam Saperstein:

Pat, thank you so much for joining us here on this podcast.

Pat Russo:

I'm happy to be here.

Sam Saperstein:

It's great to see you. You're such a visible executive at conferences like this around the world, which is fantastic. I think you come across as so accessible and so relatable. We are having listeners, men and women, listen to this podcast really because we'd love to showcase women like yourself who had been in CEO roles and on boards so that women can see what's possible for them. So thank you, and I think your presence at places like this really makes a difference.

Sam Saperstein:

I'd love to start out with your early career and your days at Lucent when you were taking on more and more responsibility there. How did you think about your career management at that point?

Pat Russo:

You know, the truth is I didn't think a lot about career management. If I look back on all the different roles I had, I really was focused on a couple things. One, I was interested in accumulating the broadest set of experiences and skills that I could. I was always interested in is there another kind of job that would help to broaden me, so experience gathering was one of the things I was focused on. The second, and these are not in any order of priority, as opposed to focusing on what was the next level, I was just focusing on doing the best job I could and producing visible results in the role that I was in, and I sought jobs that were measurable. I've often, in subsequent years, counseled women especially to seek jobs where you can be measured and that could be quantified.

Pat Russo:

Then the third thing I'd say I focus on as I was moving along was building my people leadership skills. When you go from not managing anyone and then managing a few and then managing a few who are managing a few, people leadership skills, people development skills, team building skills are important. So I tried to gain experience and learnings, and failures in some cases, but really tried in learnings in those three areas, is where I was focused. In my career, I kept progressing, I guess is what I would say, but it wasn't because I had a master plan.

Sam Saperstein:

Well, I love the thought of that though, collecting those experiences. How did mentors play a role in that, as you were looking to just gain different experiences, but were also demonstrating that you were doing great job, how did mentors come in and help you, or sponsors?

Pat Russo:

Well, there were people along the way that I worked for or I worked with who took an interest in me. They took an interest in my development and the expansion of my experiences. There wasn't just one person. I don't think for anyone there's one mentor or sponsor. I developed relationships with a number of people and then, depending upon the issue or the circumstance that I wanted counsel on or I was struggling with, I would figure out, gee, who would be the best person for me to talk to about this. I had a group of people that were very helpful to me and I stood on their shoulders. Frankly, mostly men. In fact, all men.

Sam Saperstein:

[crosstalk 00:04:59] understandable.

Pat Russo:

At that point in time.

Sam Saperstein:

Exactly. When you were at Lucent and steering them through their crisis, how did all these experiences come to play for you? The experience you had in all those roles, the people management especially, what did you tap there?

Pat Russo:

When I became CEO of Lucent, so I'm a first time CEO, I had no idea that I would be running into what became just an incredible buzzsaw. The industry in which we were competing literally crashed, and when I say crashed, I mean crashed. Our company, in fact I had three different firms basically tell me that the company had to file for Chapter 11, that we were not going to make it. It was a pretty dire set of circumstances.

Pat Russo:

I was a new public company CEO. Fortunately, I had a terrific board of seasoned people who were not what I would call hand ringers, that is important. But I quickly focused on what are the things we can control and what are the things I can't control. I could not control what was happening in the market, but we could control our costs, what we were spending money on, how we were driving enough cash to survive. So I set about on a path I would call ... There was the managing path and the leadership path, and I do think there's a distinction. From a management standpoint, we quickly had to put together a plan to get the cost structure in the business down. I mean, our revenue was literally halved. So we were very quick to make some very tough decisions with a mindset that perfect is the enemy of the good here, time is not on our side. Our mantra became we have to survive before we can think about thriving. There was a lot of planning that went into that.

Pat Russo:

On the leadership side, it was really a lot about communication and bringing people along, making sure the leadership team was aligned on making tough decisions, communicating, over-communicating, and communicating again with the employee base, with customers, with investors, with the board. We had to be very clear about who are all of our stakeholders who are worrying whether we are in fact going to survive. I did an extensive amount of communicating, and I was very honest. I mean, you have to find the right balance. You want to be honest with people because you know they're smart, but you don't want to scare them unnecessarily.

Sam Saperstein:

Very fine line.

Pat Russo:

Right. Anyway, I just called upon my people skills, my communication skills, and just put one foot in front of the other. It was a very, very difficult time.

Sam Saperstein:

It's really unbelievable to get through that, as you say, as a new CEO, to be handed that, which is remarkable in and of itself, right? The communication piece is critical. Did you find there was something, an event or piece of information about the company, that you felt over-communicating really served you well? Was there an example you can recall that was the right strategy?

Pat Russo:

Well, I would say everything that was being written in the media, I mean, everything that was being written about the industry, whether it was research analysts in the investment world, there was just a lot of negative sentiment about the industry and, at the time, the company, because we were quite vulnerable. I did quarterly broadcasts all around the world and was very clear to talk about how we were doing. I measured things in three ways, because I think when you are losing money in a tough turnaround you have to talk about are you making progress, even if you're still losing money, are you doing what you said, meaning are you being accountable for delivering the results that are important to support that progress, and then how far away are we from where we need to be. I wanted to celebrate progress where we could, because you have to keep people's heads in the game.

Sam Saperstein:

Right, right.

Pat Russo:

So I would communicate as openly and transparently as I could about what we were doing, why we were doing, because I wanted people in the business to know she gets it, she sees it, there's a plan, then nobody's got their head in the sand. Then the other thing I did was I made sure that in every session we had an open Q and A, and I always made sure we had the toughest questions asked. What people would be normally afraid to ask, if they didn't ask, I had a cue card that said, "And here's a question that I know is on your minds that I'm going to answer." It created a sense of openness and honesty that I think gave people some degree of comfort, because, I mean, this was a two-year navigation, getting back to break even.

Sam Saperstein:

It's really unbelievable when you hear about this, the way you were living it, it truly is. Now you're on the boards of several organizations, Hewlett Packard Enterprise of course, you're the chair.

Pat Russo:

Yes, yes.

Sam Saperstein:

General motors, Merck, Arconic, the biggest companies of our day. How do you approach them knowing that you've been through the worst of the worst, had to make those quick decisions, had to think about people, how has that enabled you as a board member to serve these companies?

Pat Russo:

First of all, I think it's important when you've been a CEO, which I have been in two different companies, Lucent and then Alcatel Lucent, and then you're on a board, you have to be very respectful of the line between governing and managing. The board's role is different than the CEO and the leadership team. What I try to bring to board deliberations is the benefit of what I have seen over many different times in my career of either a turn around or trying to grow a business. What board members do is take their instincts, and by the way, your instincts are a collection of your experiences, right, over time really, and share them. Many times there is some applicability, sometimes there's not, but I do that in a way that attempts to help the CEO think through tough issues. When tough decisions have to be made, I encourage that.

Pat Russo:

I mean, I have a view. I can remember people saying to me, "How did you get through the Lucent experience?" and I said, "I learned that the sun comes up tomorrow." The sun comes up tomorrow and no matter how difficult and how challenging and how painful something may seem at a point in time, the sun's going to come up tomorrow. It will get better as long as you are clear about what you're trying to do and you get it done.

Sam Saperstein:

The feeling that there's no obstacle that's insurmountable, which is what you're describing, is terrific for a leader to have. I mean, I think when you look at the great leaders out there, they're optimistic.

Pat Russo:

Right.

Sam Saperstein:

They know they're going to make it through, they always see progress on the horizon. So I think having you on teams is really helpful in bringing that perspective.

Pat Russo:

Yeah. Look, I always said when I had people that I wanted on my team, I always wanted energy givers, okay, as opposed to energy takers.

Sam Saperstein:

Right.

Pat Russo:

The reason you want energy givers is not because you're looking to operate in an unrealistic world. I always wanted people around me and when I try to be as realistic about what we're dealing with but optimistic about the possibilities, like let's find the possibilities. What can we do, not what can't we do or why didn't we. It's what's possible.

Pat Russo:

What I found in the tough experiences I've been through is more is possible than you think if you engage people's help and talent and optimism around you to achieve it. More is possible, and people will step up if you give them a context as opposed to saying, "We have to do this." If you paint a picture for people about what's happening, why are we doing what we're doing, why do I need your help, it's amazing. It's amazing what-

Sam Saperstein:

I love that lesson.

Pat Russo:

It's amazing what people will do.

Sam Saperstein:

When you see leaders say, "Well, I don't have the resources to do that," given what you have seen, what's your response? I mean, you've worked through a lot of things with not a lot of resources.

Pat Russo:

Yeah. Look, I think a great example is look at the Hewlett Packard Company. We went into a turnaround. We had four Fortune 50-sized businesses basically in HP when I first went on the board. We ended up being able to get those businesses turned around. We separated the companies, 300 and plus thousand people, separated the companies, 180 countries. We then in the Hewlett Packard Enterprise size spun out a quarter of the business, merged it with DXC. The people who did all this work just kept doing it. If you had said, "Okay, I'm going to lay out everything that everybody's going to do for the next two or three years," it's not possible.

Sam Saperstein:

They're exhausting.

Pat Russo:

And we did it.

Sam Saperstein:

Yeah.

Pat Russo:

We're standing, and we've had a couple of years of stability now. But my learning from every experience I've had that's been tough is you can do more than you think. People will step up more than you give them credit for, people understand more than you think they might, and being transparent and authentic and honest about what has to be done with the right people around you is going to produce the result.

Sam Saperstein:

Speaking about boards, how do you counsel women who aspire to public boards, particularly their first board seat, which can be very tough to get onto?

Pat Russo:

The first thing that I tell women at all stages is think about the skillsets that you're accumulating or where you're focusing and their relevance. If your goal is to be on a board, then I think you have to be doing something that has relevance to what that board needs. Okay? That's just a reality.

Sam Saperstein:

Yes.

Pat Russo:

I also encourage women, particularly that have achieved some level of experience and would be candidates for boards, to think about what are they passionate about. In other words, I tell everyone, not just women, if you want to be on boards, think about what sectors of the industry excite you, what companies excite you, because when you're passionate about what you're getting involved in, you will do more homework, you will learn more about it, you will dive more into the experience. So I tell them to think about that.

Pat Russo:

I encourage everyone, I said, "Make a list of what value you bring. What do you think your experience gives you that will be a value to the board and what are you looking to get from it?" Because being on a board is really a two-way engagement. You learn, but you also contribute. So be clear when you're interviewing about what you think you can contribute.

Pat Russo:

Then I support things, for example, at Hewlett Packard Enterprise, we have a program, we've identified the top women in executive positions and we've put together an 18-month bootcamp.

Sam Saperstein:

Wow.

Pat Russo:

And we are focused on helping them get ready for board service.

Sam Saperstein:

That's terrific.

Pat Russo:

We have seminars, we bring search firms in, we have our board, we have five board members who are women on the HPE board, and we actually engage with them. I mean, I try to touch it from a number of different dimensions.

Sam Saperstein:

Yeah, but there's real training then behind that.

Pat Russo:

Oh, absolutely.

Sam Saperstein:

And real visibility also.

Pat Russo:

Real training. Then we ask our other board members, we say, "Here are the bios. As you see opportunities, here are the women that we have that we think make great board members. They have enough experience, their experience is relevant to what boards are looking for today, so please help."

Sam Saperstein:

That networking and referral piece, what you're talking about is so critical.

Pat Russo:

Absolutely.

Sam Saperstein:

Yeah. How can everybody do a better job of that?

Pat Russo:

I have a lot of people come to me, as you might imagine, who are women who say, "Gee, I really am interested in boards. How should I think about it? What should I do?" I encourage everybody, think about your network and tap into it. Women executives are probably presenting to their board. How about talking to their board members? Executives have a whole network of people in their functional community. Figure out who's in a place where maybe you could establish a relationship and have some introductions made. Make sure you're on the lists of the search firms, because by the way, being on the radar is a big deal. There are some organizations who focus on diversity candidates for boards, make sure they get to know you. All of those things and you have to do it all.

Sam Saperstein:

Speaking of diversity and the companies that you do sit on the board for, let's say General Motors, how do you encourage them to think about diversity and how active a role do you play in helping them to think about that?

Pat Russo:

I've been a supporter of diversity, as you might imagine, for a long time and probably long before people were talking about it as much as they were.

Sam Saperstein:

Still are.

Pat Russo:

I remember Workforce 2000. I've had the good fortune to work with boards and CEOs who get it, who understand if you don't have representation around the table of women and men and people who come from different backgrounds and experiences, you're missing out. It's not an intellectual argument, it's an experiential argument. Sit around the table with people of different backgrounds and perspectives and have a debate, and then sit around the table with people who all have the same perspective and have that same debate. I guarantee you it will not be as rich a debate, you will not reach as good a business decision.

Pat Russo:

The boards that I'm on, I've chaired governance committees, I've been lead independent director, I obviously chair Hewlett Packard Enterprise, there's no convincing that's necessary.  So I mean, we have six women on the GM board, we have five women on the Hewlett Packard Enterprise board, we have three women on the Merck board. Interestingly, the CEOs of those companies will have all been diverse. I would not be on a board if there wasn't an appreciation for the value of diversity in business.

Sam Saperstein:

You've talked about the differences between managing and leading and how you actually applied that to your role at an important time. How do you look at people's potential for management or for leadership, and do you think people have the potential for both or they might have to develop a skill on one side?

Pat Russo:

I can recall many conversations, as we talk about candidates for jobs, not just CEO positions, and saying, "Wow, that person can really produce results and is a great operator, but doesn't necessarily create followership."

Sam Saperstein:

And that's how you would define being a leader?

Pat Russo:

Well, look, I think if you're going to run a company and you're going to have thousands of people that you're responsible for, I think the ability to create a following by creating a vision, articulating a vision, demonstrating compassion, creating a sense of loyalty, I think that's an aspect of the job that in today's environment is more important than ever. Yes, you have to be able to produce results, but if you can't get people engaged, if you can't have people feel confidence, if you can't have people feel like I am in this game to win with you, then you're not going to optimize the performance potential for the business.

Sam Saperstein:

Or get through those tough times.

Pat Russo:

Right. So leadership qualities are really important.

Sam Saperstein:

Can you teach that to someone? Let's say you have an executive who might not have that side, how do you help them develop that?

Pat Russo:

I think you can. I tend to like not to think negatively, like they're not a leader. I like to think in terms of what's missing.

Sam Saperstein:

Yes.

Pat Russo:

Right? What's missing? Let's talk about your communication style, let's talk about your accessibility, let's talk about your authenticity. What I find is smart, capable people - if you point out the things that they should pay more attention to, they generally pay more attention to it. Lots of times, there's a whole executive coaching profession, right?

Sam Saperstein:

Right, right.

Pat Russo:

That's focused on helping people be better at leading and managing, but certainly at leading. So yeah, I think you can learn. I also think there are some natural born leaders.

Sam Saperstein:

Let's talk about decision making, which you touched upon as you were describing at Lucent how you had to make those tough decisions, and you referred to making decisions based on gut and those collection of experiences. Was there a time where you did use more of that gut reaction to make a decision?

Pat Russo:

Gosh, there've been lots of times. I am clearly a person who likes to see the facts and the data, but I'm also a person who recognizes that you can almost put facts and data together in any way that's going to try to support what it is you might be trying to do and tell your story. Not dishonestly.

Sam Saperstein:

No.

Pat Russo:

But just, look, it's human nature to say, okay, what are the-

Sam Saperstein:

Find things that validate what you're trying to do.

Pat Russo:

Yeah, absolutely. I think decision making, usually, I mean, sometimes it's black and white clear, but usually requires judgment. So take as much input as you can and you say, "What's my tummy telling me?" My management and leadership style is always - I really reach out to talk to a lot of people. When I was a CEO, I walked around. I'd pick up the phone and call people three levels down in the organization and say, "What do you think about this," or, "What are you hearing about that or how does this sound to you?" I had my own way of collecting perspective, I guess is what I would call it, not so much facts and data, but opinions of others who counted. There were times when the facts might say something and I'd say, "Yeah, you know what, but I'm not doing that."

Sam Saperstein:

I love the fact that you would call people three levels down to discuss things.

Pat Russo:

Oh yeah, oh yeah.

Sam Saperstein:

Did people get surprised by that?

Pat Russo:

Well, when I first started it ... The first time I ran a business, I was inside the AT&T what I'd call bureaucracy, right? Which was a very level-conscious organization, very hierarchical. So you know.

Sam Saperstein:

They were not talking to people three levels down.

Pat Russo:

No. The same-level people were talking to the same-level people and that's the way it worked, and I wanted to break that. The other thing I was trying to create was an output-focused culture as opposed to an activity-focused culture, right? I want to know what's the output you're going to produce, because bureaucracies tend to become activity-focused. People meet and they meet and nothing happens. So I did two things. I would walk around the halls of headquarters and I would pop into conference rooms, and these were internal meetings, of course I wouldn't do that with ... But I would say to the people sitting around the table, "What are you doing?"

Sam Saperstein:

That must have been so interesting.

Pat Russo:

Shocked. They would describe to me, I'd say, "Well, what's the outcome of this meeting? What is your purpose here?" And ... and I'd say, "Folks, think about what you're going to leave here with, don't just talk to each other. The combination of the messaging and then just the visibility. Then there were a few examples. I remember I was the head of a division and I called the lowest level manager about a customer, so maybe they were four levels away. He couldn't talk.

Pat Russo:

I said, "This is Pat Russo." He said, "I'm sorry," he says, "I've never talked to a fifth-level before."

Sam Saperstein:

Oh my goodness.

Pat Russo:

Okay? You want to talk about culture?

Sam Saperstein:

Right.

Pat Russo:

I said, "Really?" I said, "Well, now you are."

Sam Saperstein:

Right.

Pat Russo:

You don't have to do many of those kinds of things before word spreads.

Sam Saperstein:

I bet.

Pat Russo:

Things are changing.

Sam Saperstein:

Right, right. That's unbelievable.

Pat Russo:

But you have to find those things to do and you have to be authentic about it, and I was. I mean, I needed information about this customer.

Sam Saperstein:

You wanted to learn.

Pat Russo:

I said, "I'm not going through three levels to get an answer. I've got a mad customer. I want to know the answer. Who's the guy?"

Sam Saperstein:

Right. That's unbelievable.

Pat Russo:

Yeah, it was fun.

Sam Saperstein:

You've talked about authenticity a lot and you've also demonstrated that, clearly. Is that hard to do, to be open with folks? Have you ever felt like you shouldn't be? Did you have to evolve that style?

Pat Russo:

I guess it first became visible to me, it wasn't something that was intentional. I was promoted to a vice-presidential level at AT&T, which is "an officer of the corporation". It was a big deal. I mean, in those days you got a bathroom. I said I didn't want one, but I mean, just to give you an example of historic culture.

Sam Saperstein:

That's a nice perk, right.

Pat Russo:

Anyway. So I did a town hall meeting. It was my first time at that position and somebody asked me a question and I didn't know the answer, and I said, "I don't know. What do you think?" After that session, I can't tell you how many people came up to me and said, "We've never heard anybody at your level say they didn't know something."

Sam Saperstein:

Acknowledge that.

Pat Russo:

I said, "Are you kidding me? I mean, I don't know. I don't know everything. If I knew everything, I wouldn't be here." That was when I became present to, wow, what you say and how you show your vulnerabilities. I felt there's a human dimension to that, that people would relate to. So for me it was a valuable learning about a lever that I had that was just sort of who I am. I mean, I am who I am, if I don't know, I don't know. I would then say to people, "Look, I reserve the right to learn in public, okay? I reserve the right to learn in public, so if you think I'm going to stand up here and be a talking head giving you all the answers, that's just not the way it is," and that actually turned out to be pretty effective.

Sam Saperstein:

When you think about the diversity of the workplace and women's representation, are you encouraged by any progress or changes that you see?

Pat Russo:

Look, if you look at the numbers, there's clearly been some progress. I just think it's just too slow. Half of the workers coming into the workplace now are women, at least, maybe even more.

Sam Saperstein:

They're coming out of colleges with greater degrees.

Pat Russo:

Coming out of colleges, coming out of graduate schools. So the pipeline, we've been talking about the pipeline forever and this has been happening for some time now. The rate at which women are advancing, I just think needs to accelerate. I think in order to do that, the whole paradigm around readiness, ready now, ready in one year, one to five, we've got to throw that stuff out. We have to think about can this person step up? Am I willing to take a risk and provide the kind of support, even if this person doesn't necessarily have the years of experience? We've got to compress the timeframe for women, for people of color, and really help move along the actual results. And I think you can do that, you just have to decide you're going to do it.

Pat Russo:

It's like putting women on boards. I can't tell you how many times I've heard, "Well, it's really hard to find qualified women," to which I say that is just a bunch of baloney.

Sam Saperstein:

Right, right.

Pat Russo:

It's just not the case. You decide you're going to do it, you figure out how to do it, where to go, and you commit to doing it.

Sam Saperstein:

I love that. You've just got to get it done.

Pat Russo:

Look, I remember when I was running a company, I would say to people, "I am not promoting anybody to this level without seeing the slate of candidates you looked at." I mean, we were talking a couple hundred people, so I was able to just force I want to see the diverse slate of candidates. And I'll tell you, it changed behavior.

Sam Saperstein:

Did you ever use compensation as a tool also?

Pat Russo:

Oh, absolutely. Oh absolutely.

Sam Saperstein:

You would tie their diversity goals or whatever to their compensation?

Pat Russo:

Absolutely. In fact, on one of the boards that I'm on, I'm not going to talk publicly about it, one of the boards I'm on, we use diversity measures. In fact, we use it at HPE. When we evaluate people's performance on their individual bonus, the senior-most people, we look at their targets and whether they achieved them. If they didn't achieve them, they get dinged.

Sam Saperstein:

Are they getting that message?

Pat Russo:

Oh, absolutely.

Sam Saperstein:

Well, Pat, thank you so much for speaking with us.

Pat Russo:

Well, thank you.

Sam Saperstein:

It is so amazing to hear about your lessons over your career and your ongoing support.

Pat Russo:

Oh, thank you. It's kind of fun. It's like a journey down memory lane.

Sam Saperstein:

Thanks to Pat Russo for sharing valuable career lessons and advice for women seeking to sit on public boards. She's inspired us all to keep asking questions and trust our gut. Thank you for joining us today. The mission of Women on the Move is to help women in their professional and personal lives. Our goal is to introduce you to people with great ideas, inspiring stories, and a passion to make a difference. If you enjoyed this episode, please rate, review, and subscribe so you won't miss any others. Thank you to our partners at the Female Quotient and Magnet Media for helping us tell these stories. For JPMorgan Chase's Women on the Move, I'm Sam Saperstein.