Ruth Porat

♪ Announcer: Support for the PBS presentation playing theme music] This is, uh, my kitchen table and also my filing system.

[Music continues] Over much of the past three decades, I've been an investor.

[Applause] The highest calling of mankind, I've often thought, was private equity... [George W. Bush laughs] David: And then I started interviewing.

I watch your interview.

Of course I know how to do... [Oprah Winfrey laughs] David: I've learned in doing my interviews how leaders make it to the top.

Jeff Bezos: I asked him how much he wanted.

He said 250, I said fine, I didn't negotiate with him, and I did no due diligence.

David: I have something I'd like to sell.

[Jeff laughs] David: And how they stay there.

You don't feel inadequate now because of being only the second-wealthiest man in the world, is that right?

[Audience laughter] One of the most powerful women in the business world today is Ruth Porat.

She started as an investment banker at Morgan Stanley, rose up to be the CFO of Morgan Stanley, and then was recruited away to be the CFO of Google, now the CFO of Alphabet.

In that role, she has enormous influence at that company and has done a terrific job at making certain that their balance sheet works well and that they really are much better-organized in the financial sense.

I have no doubt that she's going to be a power at Alphabet for quite some time.

♪ So, when Google was first created--in the late 1990s, I guess, is when Sergey and Larry came up with the idea-- there were plenty of search engines already in Silicon Valley, and many people said, "We don't need one more search engine," so what was it that was so distinctive about the Google search engine that wiped away all the other search engines, more or less, and basically has kept them at bay?

Because you're still the largest by far.

Ruth: Yeah, I have to say, I was one of those in the early days that-- "Another search engine?"

But it was the--it was the speed, simplicity of giving you what you want when you want and taking those simpleton blue links and delivering a response to you that was really what you needed in the moment.

And the mantra at Google is focus on the user, make this an incredible experience for the user and keep listening to the user and trying to ensure that you're being responsive to what are the users' needs.

And it was that maniacal focus-- you can see it on the homepage.

To this day, the homepage is a super-clean homepage.

It's just got your toolbar.

What is it you want to search for?

And that's been the spirit of it, is listen to the user, keep expanding the responsiveness to the user, and that's what differentiated it.

David: So some people say that the Googles of the world-- Google, Facebook, Microsoft, Apple, Amazon-- are too powerful.

They have so much power in our economy that it's not healthy, and there have been Congressional hearings recently where your CEO testified.

What is your response to the view that the technology companies are becoming so dominant in our economy that it's not healthy?

Ruth: We are very mindful of the fact that with the scale of these companies comes scrutiny and that it's incumbent on us to engage with regulators and help them understand what is it that we're doing that is of benefit, how are we providing better services at lower costs, which is really indicative of the competitive nature of the world in which we operate.

We've got intense competition within the U.S., intense competitors outside of the U.S. and, you know, I think this COVID experience-- many companies and individuals would not have been able to operate the way they did without the support and benefit from technology, but it's a fair question and we're engaged constructively here and around the globe with regulators on it.

David: So Alphabet is the parent company.

You're the CFO of that.

You're also the CFO of Google.

Google was the search engine, and that is still massively profitable by anybody's standard, I assume.

I don't know if you like the word "massive," but it's profitable, right?

Ruth: It's doing all right.

David: What about cloud computing?

You're number 3 in that business, but catching up to--I guess the number-one is Amazon, number-two is Microsoft, but is that an important growth engine as well, you think?

Ruth: It's a very important one.

It's a sizable market, we think, in very, very early innings.

The opportunity for businesses to migrate to the cloud provides them with extraordinary added capabilities, and they're looking to us, whether it's for security or data analytics, or A.I.

That's what we're able to do working with customers, and you've really seen the important migration to the cloud, so we're investing meaningfully in it.

We do see it as a sizable opportunity.

David: Now, one of your other major businesses is YouTube, which I think you bought for under $2 billion and now is worth a lot more than that, let's say.

Is that a growth engine as well?

Ruth: So YouTube is--is an extraordinary business, and it's the place people turn for so many different things.

It's the place they turn for education, any how-to, you can learn anything you want.

It's entertainment, it's got a vibrant creator community, and so the ongoing opportunity with YouTube to really deliver content how people want it, where they want it, is extraordinary.

David: Now, one of your areas of focus at Google and Alphabet is healthcare and health-related.

Why is that such an important focus of the founders and you in terms of healthcare?

Why is that so important to you?

Ruth: Well, healthcare--we have the opportunity with technology to make a fundamental difference in healthcare and in particular with A.I.

in a host of areas.

For me, personally, I'm a breast-cancer survivor.

I've had breast cancer twice, I've had-- gone through chemo twice, radiation, more surgery than one could imagine, and I view myself as one of the really lucky ones.

I was here in New York City when I was first diagnosed, I was treated at Memorial Sloan Kettering, I had the best care and here I am, healthy-- as healthy as I've ever been.

Not everybody gets that break, and about a year or two ago, I remember when our A.I.

engineers had a breakthrough in early-stage detection of metastatic breast cancer with A.I., which struck me as precisely... David: Mm-hmm.

Ruth: the kind of thing that is transformative.

And there is so much debate in the world about whether A.I.

is a positive or not, and I wanted to make sure I got an objective, non-tech view of this, so I called my oncologist to ask whether I was reading this the right way and it really had the impact I expected.

And his answer was, "You cannot democratize healthcare without A.I.," so we look at this as this opportunity to democratize healthcare, to provide service, to identify diseases earlier, to do things like Telehealth that enables everybody to get the kind of care that I was able to have.

That's why I'm passionate about it.

David: So let's talk about your background for a moment, how you came to be the CFO of Google, Alphabet, and before that, at Morgan Stanley.

So where did you grow up?

Ruth: So I was born in England, mostly grew up in Silicon Valley.

My father was a Holocaust survivor, a Holocaust refugee.

He escaped from Vienna right after Kristallnacht, when-- David: When he was a teenager?

Ruth: He was 16.

He had no high school education, he had no college education, obviously.

He escaped to Palestine, and as soon as he could, he enlisted in the British Army, fought under Montgomery.

He was in the two battles of El Alamein, and his view was that the only way to find peace and a peaceful place was to have a skill that people needed, so he decided to teach himself physics while in the Army, and he used to always tell us as kids that his fellow soldiers would tease him and say, "You will die before you can ever use those physics," and his answer was always, "If I die, I want to die an educated man."

And after the war, he was one of the lucky ones.

He was given a place at the University of Manchester, he got a master's degree, a Ph.D.-- that's where I was born-- and then was given a position at Harvard.

The only two places he ever worked was Harvard and Stanford, and so we moved eventually to Silicon Valley and that's where I grew up.

David: So you went to Stanford undergrad?

Ruth: I did.

David: And did you major in finance?

Ruth: I majored in economics and international relations and thought I would go off and be a lawyer, just like you.

David: OK, well, you were smart not to do that, but you did go to Wharton MBA school, right?

Ruth: Yes.

David: You got an MBA from Wharton, so when you get an MBA from Wharton, you have an undergrad from Stanford, the thing that many people did in those days was to go to Wall Street.

Ruth: Right.

David: And you went to Wall Street?

Ruth: Well, I--I actually went from Stanford to the London School of Economics to Wharton.

I assumed I would be a consultant.

When I started in business school, I was convinced that what I wanted to do was work with companies and help them understand their problems, but then I took a fascinating course and a great teacher, and he opened my eyes to this thing called Wall Street and mergers and acquisitions, and I got excited, so I went from completely convinced I was doing one thing to completely convinced the only thing I wanted to do was mergers.

David: When you were at Wharton, was that 50% women in the class then?

Ruth: 27%.

David: 27%.

OK. Ruth: And in finance, much smaller than that.

David: When you went to-- ultimately to Morgan Stanley, was it 50% women?

Ruth: Tsk.

Far from it.

When I started at Morgan Stanley, it was 1987, and so it was sort of the Stone Age for, uh, for any sort of sense of what was the role of women in banking.

In fact, I think the general attitude was that those of us who were there would get married, have kids, and leave; we didn't have the stamina, it was just a question of time, and I loved Morgan Stanley.

I think Morgan Stanley was the best of the best, but, um, that was sort of the ethos on Wall Street and, in fact, a couple years into my career, I was working on a deal, and I was out with a partner and a client.

I was pregnant with our first child, and the partner actually turned to the client, said, "Ruth may come back after the first child, but there's no way she'll come back after the second child."

And, fortunately, the client liked me a lot more than he liked this partner and basically told him he was an idiot, but that really made an impression on me.

And the thing that was inspiring and helpful and critical in my career is there were so many extraordinary men who really bet on me, helped open doors.

You know, I didn't know at the time those were sponsors, but that's what they were.

You know, it was everyone from Parker Gilbert and Dick Fisher to John Mack and Bob Greenhill, Joe Perella, Eric-- like, amazing people who gave me opportunities, and that's what really kept me there.

And there was one time where I was moving from a role from banking, which is, you know, is the more genteel part of an investment bank, to run technology equity capital markets, which meant I was on the institutional equities floor, which is pretty bad.

David: Right.

Ruth: The only thing worse than that is the fixed income floors.

So I get this new role, and one of the partners called me into his office and said, "Look, I think you're gonna soar, "but I'm here.

I'm your senior air cover.

"I expect you to soar, and if you-- if you stumble, I'm here to backstop you."

And that is a line I have used ever since then because I think we all need senior air cover, and we all need to be senior air cover.

David: At one point early in your career, I guess it was, you were a rising star, but Bob Greenhill left to set up his own firm, and he said, "I'm gonna take this rising star with me" and you left, so you ultimately concluded you'd be better at Morgan Stanley.

Was it hard to go back to Morgan Stanley?

Ruth: I knew pretty quickly I'd made a mistake, and I think the world of Bob to this day, but I knew I'd made a mistake.

In fact, my father expressed surprise when I went 'cause he said, "You always so admired the integrity and ethics at Morgan Stanley.

Why would you leave?"

So I knew quickly, but I didn't have the opportunity to come back because quite a number of other people followed us to Smith Barney.

And two years later, John Mack did give me the opportunity to come back, and I think the reason was really the way I comported myself in that period of time, and it just kind of underscores the point that life is long and the world is small, and you better make sure you're always doing things the right way.

But the most important lesson for me from that move is when Bob was leaving and I was--heh!-- considering going, I actually did want to stay at Morgan Stanley, but I was pregnant with our second child, and so I kept replaying that story that my career would cap out.

You know, I had--Bob had been terrific for me in my career, and I was worried without that sponsor, what would happen.

I tried to hint at that as I was having conversations about staying, but I never actually put it on the table because in those days, you didn't talk about being pregnant.

And so I left, and I quickly realized, if I had actually been direct and honest about my concern, I would have been told I was wrong, and the advice I've given people since is if you're planning to leave, put everything on the table.

The worst thing you're gonna hear is "You're right, you should go," and you may actually learn something.

And so, when I came back and was talking to John, I of course told him, and of course, he told me I was completely wrong and--heh!--I knew that, but I was grateful to get a chance to go back.

David: But in those days, did Wall Street have maternity leave of 3 or 4 or 5 months for women?

Ruth: In theory.

David: Theory.

And how many women did you start with and, let's say, 7, 8, 9 years later, were there that many women still there?

Ruth: Um...not--no.

I think that--that, um... my take at the time was that women made a smart risk--you know, cost-benefit analysis, and if you're sort of constantly, uh, finding yourself in a position where you can't break through, you can't get ahead, you do this cost-benefit, and it just doesn't make sense.

So, far from it being that women didn't have the stamina, I think they were making a really smart risk decision.

I tend to be a quite stubborn person, so just kept plowing forward.

David: So you came back to Morgan Stanley, and your career soared again, you became the CFO, and at some point, you're one of the most important people at Morgan Stanley, and the U.S. government calls up and says, "Why don't you come and work at the Treasury Department, a very senior position?"

Did you seriously consider doing that?

Ruth: Well, one of the most meaningful parts of my career was in '08, when-- 2008 crisis, when Secretary Paulson asked me to lead a team to help him with the housing-- the booming housing crisis, and, um, spent the--you know, the entire period working on Fannie Mae and Freddie Mac, and then that evolved into work on AIG, and I thought it was extraordinary to be able to use skills I'd developed over decades at Morgan Stanley for something so important for the country, so that, to me, remains one of the most meaningful times.

David: And you were doing that as an employee of Morgan-- Ruth: I was.

I was doing those.

David: OK, but Morgan Stanley also went through a crisis during that period of time-- I'm sure you remember it-- where Morgan Stanley was close to maybe not being able to survive, and then a Japanese investor said, "We'll put in some money."

It turned out that money was at 3 times the stock price that you were trading at, and people weren't sure whether the Japanese company, Mitsubishi, would show up.

Were you ever in doubt that Mitsubishi would show up with that money?

Ruth: That was a terrifying period of time.

The series of events was there was the Lehman Brothers famous weekend, followed by a call I got from the Federal Reserve, saying--we had worked on-- we collectively had worked on the wrong thing; we needed to focus on AIG and asked me to get back down to the Federal Reserve that Sunday evening.

They said AIG would be out of money by Wednesday.

In fact, it was Tuesday when they were out of money, and that's the point at which Morgan Stanley was running into its own very severe liquidity crisis.

John Mack had us run multiple teams.

We had the Mitsubishi team, we had a liquidity team, we had a couple of other strategic ideas, and, frankly, we weren't confident that we would get across the finish line with Mitsubishi.

There were plenty of times along the way where it was unclear whether we would make it through the weekend.

I remember one, in particular, where I was on the phone with the Treasury and did not think we would make it through the weekend, and fortunately, we were able to become a bank holding company.

David: Well, Morgan Stanley obviously prospered through the period of time, they survived, and you did quite well, and then someday somebody called you up.

I don't know who it was.

Was it a headhunter, was it somebody from Google saying, "We'd like you to be considered to be the CFO?"

Were you surprised at that offer because you were a Wall Street person, you weren't a technology person?

Ruth: So, actually, it was a very different path to the question.

I was on the Stanford board and had the opportunity to spend some time with Bill Campbell, who was an iconic coach to so many people; to Larry, to Sergey, to Eric Schmidt, to Steve Jobs.

And I left the board meeting and went to his home and sat down with him to talk about life generally, and he started probing kind of what next, what would I want to do?

And my comment to him was I didn't know; at some point, I would want another chapter, but one thing I knew for certain is I would not leave Morgan Stanley as CFO to be a CFO anywhere else.

And for two hours, he kept kind of coming back to that strong assertion, and at the end of two hours, he said, "OK, so you wouldn't leave to be a CFO anywhere else, correct?"

And I'm adamant-- "Correct"--and he said, "Then I have the perfect job for you.

You should be the CFO of Google."

And, of course, the two of us burst into laughter and I said, "Well, that one I would do."

And, um, and I didn't believe it.

I left his home and didn't actually believe it was real or that it would happen.

And within a couple hours, he called and said, "Go over to Larry Page's house and spend some time with him, see if this works."

David: All right, so you went over to see Larry Page, and he said, "Guess what, I just heard about you and I want you to be the CFO"?

Ruth: So I had known him.

I worked on the Google IPO and had had different interactions through the Stanford board.

We spent two hours.

It was this broad conversation.

Fascinating, as Larry Page always is.

I left, again not actually believing that it would happen, and quickly, everything came together.

David: So they made you an offer, and you had to then go tell the CEO of Morgan Stanley that you were leaving, and what was the CEO's reaction?

Ruth: So I think James Gorman is an extraordinary CEO.

One of the reasons I couldn't imagine leaving my position as CFO is we had a great partnership.

I think what he's done at Morgan Stanley demonstrates that.

He's an extraordinary person, and when I described it to him, he said, "I understand," so we tried to figure out what would be a logical transition, pulled it together quickly.

David: So you took the position, but now you're gonna be breaking into another world where women are not that prominent.

Was it harder to break into the technology world as a woman, or was it harder to break into the financial world as a woman?

Ruth: Well, when I broke into the financial world, I was junior, and I think it's harder when you're junior than when you're coming in as somebody who's credentialed.

But if the question were-- broadly is--which world is tougher, Wall Street or tech, you know, both have evolved meaningfully since those days of the boys' club on Wall Street that were so painful.

And I think there's a much greater awareness that it's not just the right thing to do to have diversity in senior ranks throughout an organization, but it leads to better outcomes, and so I think that they're actually pretty similar.

The difference... David: Right.

Ruth: is there's--it's a more collaborative environment, um, in tech, I would say.

Wall Street can be pretty--pretty rough.

David: But the more testosterone-filled place is Wall Street or Silicon Valley?

Ruth: There's a lot of testosterone.

There's enough to go around.

David: So, when you get there, you're a fairly buttoned-down CFO of Morgan Stanley.

You're very precise and so forth.

Google is probably a less precise place when you get there, right?

They're making so much money, they don't have to worry about every little dollar, I guess, so did you say, "We got to change things," and did people say, "We don't want to change, we're doing well," or did people say, "Yes, we want to change"?

Ruth: So, throughout my career, my view has been if you actually anchor your points in data, it becomes very easy to engage people in what is the issue and what's the proper path forward.

And one of the extraordinary things at Google is we have very smart and very inquisitive people.

So, as I laid out whatever issue it is, anchored in data, it engaged the conversation, and so I actually didn't find it to be discordant.

In fact, I was really impressed with the view of "Yes, throw in the new idea, let us understand what and why."

David: OK. Ruth: And it's--you know, it's been a journey.

David: So when you get there, and you're making some changes and proving some of the things there, did you feel that by not being an engineer, it made a difference, or you didn't need to be an engineer to deal with all the engineers out there?

Ruth: I think we each need to know where we're strong and we're we aren't, and it's about the composition of a team that makes a difference.

My father was a physicist, and I remember, as a young child, he told me that if someone in his lab, physics lab-- he was at the Stanford Linear Accelerator Center--if someone could not define a quark within 60 seconds, they didn't know what they were talking about, and so I've always had the quark test.

If you can't explain what you're trying to do, you probably don't know.

And I've challenged myself the same way, and one of the most effective ways to do that is start with data, and so that was the way to actually have impact without being an engineer.

David: So you had men who were your mentors 'cause there weren't women-- you call them not mentors, but sponsors-- and now, today, are you a sponsor for younger women?

Do you try to do that role that men played for you, and do you think it's important for women to do that today?

Ruth: I absolutely do.

I am a sponsor for women and for men.

I think that, um, that it is--it's a privilege, actually, and it's a responsibility, and so, you know, for me, what that means, and the way I look at how it affected my career, it's when somebody takes a risk on you, they give you the opportunity to actually be more visible, take on a bigger role-- you're stepping aside, you could probably do it better than they do, but this is the way you grow.

You grow by making mistakes.

David: Right.

Ruth: And so that's the role.

I think the question I'm most often asked is, "Will you be my sponsor?"

and I always tell people, "That is something you have to earn."

It's sort of like when you go on a date, and the first date, you wouldn't ask somebody, "Do you want to have kids?"

You have to, like, earn the-- earn the privilege, earn the trust, earn the relationship.

And so when someone does, when they really deliver, that's when you want to say, "That's somebody, that's a star I'll take a bet on, and let me help them get ahead."

David: Now, somebody's watching this, a man or a woman, says, "All right, she's a leader.

She must have some qualities that I would like to know about more."

What are the qualities that you think are important to be a leader?

Ruth: So I think one of them is it's very important to be able to make clear decisions anchored in data.

It's the way you can build support for the ideas, it's the way you can know where to double down on great opportunities for the long-term, where you should be pulling back, so it starts with data analytics.

I think the other is integrity and building a culture that makes it really clear that you expect the highest-quality performance and integrity at all times from your people.

Um, I would say that-- that the other is making it really clear that you want diverse views, that you built a diverse team, and that you're open to-- not only open, really expect diverse views and debate.

You know, to me, I've often been asked how do I think about rising stars, and my answer is I want someone who's in my face.

I want somebody who challenges me, and I think creating an environment where there's that open discussion is really-- is really important.

David: So some people say it's very difficult for women to have it all--to have a great career, great personal life, children--but you seem to have it all, so what's the secret to having it all, and is it as--harder than people would think, or is it easier than people would think?

Ruth: I think it depends on how you define "having it all."

I've often been asked about work-life balance.

I think that is a horrible term, and everybody should banish it from their vocabulary because getting balance, just the physics of it are hard.

To me, the most important thing is to find a mix in life that works for you, and so, for me, it's been an incredible career.

I get a lot of joy and energy out of what I'm doing, and then I have an amazing family.

I've been married to an extraordinary man for ever-- heh!--we have 3 wonderful kids, and for some people, it may not be kids, but it's got to be something other than work.

And it's finding a mix, so sometimes, you may be more heavily focused on work, other times more heavily focused on family, and that mix changes throughout your life.

To me, that's been the most important element of it, and I would say I get very concerned when I hear women have a plan, a plan on when you're gonna sequence each step along the way, and I would say-- in particular, when I had cancer and didn't actually know what was gonna come, I was able to look back on my life and say I have no regrets.

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