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tv   Charlie Rose  PBS  November 4, 2015 12:00am-1:01am PST

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>> rose: welcome to the pam. tonight, tom wheeler, chairman of the federal communications commission. >> i ran the cable television association when it was an up and coming industry being -- and fighting for survival. i ran the cellular industry a dozen years ago when it was an entirely different business. i've started my own businesses. i have been a partner to venture capital firm helping start businesses. so i come to this job with an understanding of both business and policy and how it works with the people that we regulate. so i actually think i come with a leg up. >> rose: we conclude with meg whitman, formerly the c.e.o. of ebay, now the c.e.o. of hewlett packard. >> i found an incredible company with founder dna. it is likely hard to kill
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founder dna. for h.p., that was a very good thing because the core of this company through all the acquisitions and all the board drama was around innovation and focus on customers. so i made the decision, let's do more of what we do well, and then we'll work on the to-do list of things that need to be fixed, and there were a number of things that need to be fixed. >> rose: tom wheeler and meg whitman, when we continue. >> rose: funding for "charlie rose" has been provided by: american express. >> rose: additional funding provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose.
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>> rose: tom wheeler is here. he is chairman of the federal communications commission. the agency adopted net neutrality rules earlier this year, treating internet service as a public utility. the commissioner has been active in reviewing media and telecommunications mergers. the summit approved at&t's takeover of directv which created the largest television distributor in the united states. next year they will hold an auction to delegate sale of the air waves. good to have tom wheeler at the table. seems like i've known him 100 years. >> thank you. charlie, great to be here. >> rose: we had your favorite ohio state coach from -- >> the ohio state university. >> rose: my impression is they have no bigger fan than you. >> that's true. >> rose: you used to work withçó
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woody hayes. >> back in the day i rubbed shoulders with coach hayes. >> rose: talking about military history and all the things he taught there. >> coach said three things can happen, you can pass and two of them are bad. >> rose: whatñrs federal communications commission. >> the most important external force in our daily lives are the networks that connect us, and we at the f.c.c. get the privilege to be involved in the evolution of those networks into the digital era, whether it's broadcasting or cable or satellite or telephone networks or the internet. that's our jurisdiction. it's about a sixth of the economy that we get a chance to participate with as they're evolving from the old analog
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world to the new digital world. >> rose: what do you do? you obviously hear important arguments and make rulings on them. >> the really interesting thing about this job is that the statute was written in 1934. it was updated in 1996. even from 1996, a lot has changed. so the challenge that we have is to say, okay, let's look at the basic four corners that the congress has laid down and said this is what we think is in the public interest, and then make interpretations as to how that statutory responsibility works in the new digital world. so we're dealing with everything from mergers to competitive issues and how do you make sure that there is competition in these markets, how do you make sure that there is consumer
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protection, how do you make sure that national security is protected. so it's a very broad palette we have to work with. >> rose: this is what predecessor michael powell, president of the national cable communications soaks and chamberren of the f.c.c. in the bush administration said "the commission breathed new light into the decade regulatory model and applied it to the most dynamic free wheeling and innovative platform in history." >> i agree the internet is the most powerful and pervasive platform in history. i disagree entirely with him on the other part because, basically, what the cable and telephone industry and those who provide internet service, last-mile service have been saying is, oh, leave us alone, leave us alone. what we did is say, wait a
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minute -- there is a basic responsibility that people who are providing internet service have to make sure that consumers have unfettered access to the content they want to go to on the web and that those who are creating content have unfettered access to consumers, and that's some basic things. there should be no blocking. you should not be able to say you can get through when you can't. there should be no throttling. you shouldn't be able to say, well, your service, i'm not going to allow it to go as fast as another service. there should be no paid prioritization and say you're a fast link and you're a slow link, because you're paying more. and what they need to have in place is a referee on the field. we were talking about woody hayes and urban meyer a while ago. you need a set of rules that says is this just and reasonable and need someone to throw the
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flag if it isn't. we don't know what the internet will become five years from now. think back five years and where we are today. we had no idea it would end up where we are today. what we don't want to happen as a regulatory agency is to thwart innovation. >> rose: that's one to have the arguments they made. >> but the other part is we don't want people running the networks to have to be the ones who provide permission for innovators and entrepreneurs to provide new services. so it's the concept of permissionless innovation and making sure there is somebody to say does this make sense? >> rose: the argument is you inhibit innovation. >> that is easily refuted by the look at tremendous growth in investment that has taken place in entrepreneurial activities since we put the rules in place. you look at how the industry,
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the cable industry, the telephone industry, the wireless industry have unprecedented levels of investment since we put the rules in place. i mean, the network itself is growing and those who serve the network is growing. >> rose: you make a huge capital investment to provide the fastest internet service somewhere, you now simply have to make that available to everybody. >> correct. >> rose: when john oliver was on this program -- (laughter) -- he talked about the story of someone with your experience becoming the f.c.c. chairman. you have said that experience provided you with all that was necessary to do a good job. >> absolutely. >> rose: he said, why would we let someone who's been trying to lobby the f.c.c. become the person who chairs the f.c.c.? is that some inherent conflict? >> well, i think that, you know, if you go back and look -- and, charlie, i ran the cable television association when it was an up and coming industry
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being -- and fighting for its survival. i ran the cellular industry a dozen years ago when it was an entirely different business. i've started my own businesses. i have been a partner to venture capital firm helping to start businesses. so i come to this job with an understanding of both business and policy and how it works with the peopleñlthat we regulate. so i actually think i come with a leg up. >> rose: what do yohope you accomplish while you're chairman of the f.c.c.? you addressed net neutrality. you have some mergers you addressed. >> at the core, it is competition. the consumer's best friend is a competitive market, and our broadband market isn't as competitive as it could be. so one of the reasons you have an open internet rule is to increase competition. one of the reasons we turn down the comcast merger was to
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increase competition. one of the reasons we have encouraged -- we preempted states -- let me say, one of the things the big providers were doing were going to state legislatures and passing a law that prohibited cities and we said no. the joke is my mantra is competition, competition, competition. and that's the goal that we're working on. >> rose: so let me just jump ahead to some mergers. the comcast merger you said does not increase competition. >> right. >> rose: if those two giants get together, time warner and comcast. >> we turned that down. >> rose: but when at&t came along, buying directv, a satellite company, you said that's fine. >> because we put in the terms
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and conditions of that agreement specific pro competitive activities. for instance, at&t is required to bring fiber service -- high-speed fiber service to 12.5 million new american homes. that's a 40% increase in the number of homes reached by fiber. >> rose: they'll get faster service. >> guess who they're competing with? the cable companies! so that was a key part of that. we put in there some other rules to make sure that there was pro-competition coming out of it. here's the key statistic -- 83% of americans can access high-speed broadband service. >> rose: 83%? 83%. but two-thirds of those can get it from only one company. so the goal is how do you facilitate competition?
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because competition drives prices down, competition incentivizes better service, competition is a consumer's friend with innovation. >> rose: speaking of mergers, trying to understand how you approach these and make a judgment about competition, there was a merger between sprint and t-mobile. >> right, and we actively discouraged that, that four wirelessñi carriers is a good ad vibrant market, and if you were to take number three and four and allow them to merge to go to three, that would have hurt -- >> rose: would have made them stronger and thereforeçó be more competitive because there is a difference. but there is a difference between those four. and if 3 and 4 could combine and therefore be more competitive with 1 and 2, why isn't at the a good idea? >> look at what t-mobile has done since we didn't allow them to merge, and they have become
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the most innovative, the most price-competitive, and they're forcing the market to respondtv them, including sprint respond to them with good old american competition. that's what we were trying to stand for. >> rose: let me talk about something else you wrote. you said we need to continue looking to the future and act now to facilitate the fifth generation of mobile technology. >> right. >> rose: what is that? so we're right now going through fourth generation of mobile tech knoll that you've seen in the ads called lte. >> rose: right. we're now heading towards the fifth generation. the fifth generation is going to be a new level of service. it will be different from what you're used to right now. it will be the enabler of what they call the internet of things. you know, by 2020, there will be 50 billion connected things, everything from your washing
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machine to, you know, your trash can. >> rose: from your cell phone, from your smartphone, you can run everything? >> and they will talk to each other and you won't even know it. but you need to have an infrastructure which is what the technologists call very low latency which means they interact quickly and you need a new spectrum that works over. so i leave from here to go to geneva where we're engaged with international negotiations to make sure we have spectrum that is harmonized around the world for the next generation. >> rose: we've not had that? we've had that -- >> rose: we've not ha harmonizization with the rest of the world. >> we have had some. >> rose: you go to korea and japan, everybody says they're ahead of us in terms of
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broadband, possibilities and its speed and what it's doing, is that true? >> they have very innovative ideas but we're the world leader in 4g technology. 98% of the american population now has access to an lte wireless signal a and it's competitive. you look at europe and asia, nobody has those kinds of statistics like we do. >> rose: is it television business as we know it healthy? >> i think the television business is in the process of evolving. >> rose: to what is this. so it used to be there were special networks for special kinds of video. you had the movie networks, the theaters, okay, for movies. then you had the television networks, and really they never really measured with each other. now you have the digital world in which everything is the same in terms of being digitized and
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can be distributed over a common network. and that challenges everybody to evolve. and i think the television industry is evolving just like everybody else is evolving. >> rose: to what? to a broadband video business is one. but i also think there is going to be a fine future for traditional broadcast television. >> rose: what future? continuing to provide local service, continuing to be a way that in a local market you can reach all of the people at one time but that content continues to sector markets and slice them down and that ends up being over on the internet. >> rose: you've auld next year's auction of wireless air waves a "once in a lifetime
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opportunity." define what a once in a lifetime opportunity is. >> well, there is going to be one option -- (laughter) but let's talk about what that option is. so we were talking a minute ago about wireless. there is huge demand for the spectrum, the air waves that wireless rides on. and we have to look at the limited amount of spectrum that is available and say is it put to its best purpose? so what we're doing is we're going to run an auction next year, starts march of next year, that's a two-sided market. first time it's ever been tried, where we will turn to broadcasters and say, if you want to sell us your air waves, we will buy them, then we repackage them so that they are in a format that works for wireless, and we turn around to the mobile companies and say,
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okay, now you buy them. nobody has ever tried -- >> rose: you bid on them. you bid on them and pay the government. and nobody ever tried that. but that's really -- it is letting the market work to put spectrum to its highest and best use. and it's going to be ground-breaking, and i think it will be the future of -- n of -- >> rose: how will you mark success? >> by whether new spectrum gets opened. there will be multiples of tens of billions of dollars that will change hands here, but i think the key is is there new spectrum that is going to be able to be repurposed for 2 is century applications in the mobile world. >> rose: back to my question about south korea and japan and europe, you know, what can we
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learn by what's going on around the world? >> oh, that's a great question because the world is getting smaller and smaller and smaller and one of the things hat the internet has done is to make us all share common experiences. >> rose: it changed time and distance. >> totally. i mean, it's the death of distance. there is no such thing as distance. so i think that we have been the world leaders in innovation, in digital activity because we had the homefield advantage of the internet starting here. and we want to make sure that that continues, and that's both for wired and for wireless. there are some great things as you point out that are happening in japan and korea and china and elsewhere, but i think that we need to make sure that we are tending to our knitting, making sure that we have the environment. >> rose: i assume your argument is we have to create an
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environment for innovation so whatever the lead we got from being a f will continue. >> that's why open internet is so important, charlie, because we have to create an environment where this wonderful thing called the internet which just allows everybody to reach the world overnight, but there aren't gatekeepers there because if someone is saying, i'm not so sure or you pay me to get on oró things like this, then we'll inhibit innovation, and innovation is the driver of this economy. >> rose: can china innovate? i think that they are clearly making efforts to do that. i think they're what you might call fast followers at this point in time, but they're looking to see how can we take the fifth generation and make it work to our advantage? so one of the things we've done at the f.c.c. is we've said we
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want to be out front in allocating spectrum so that first in the world spectrum that can be used for fifth generation is here in the united states and that we want to be allowing flexible use of that spectrum so it's not some bureaucrat in washington like me making the decision as to howñi it gets us, it's the people who are innovating, it's the people who are going to try the new ideas who are making those decisions, and that is exactly the formula that made us the world leader in fourth generation, and i think it will work for fifth generation, too. >> rose: one risk people see is the possibilities of sabotage of undersea cables. that's an issue for you? >> it's the new style of wiretapping, isn't that right? >> rose: yeah. but i think we have to understand that networks have always been attack paths -- i don't care whether a road
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network, a sea network or whatever -- it's the way people have mounted attacks. we have a new network in the 2 e 21st century. it would be naive -- >> rose: to say someone would not figure out how to do that. >> that's right. >> rose: then we have the possibilities -- my friend ted koppel has a book out called "lights out" which is about the capacity to do huge damage to america and its economy by attacking the internet. >> right. we've taken that real seriously. i mean, if we have responsibility for public safety and the functioning of our networks, then we need to make sure that we are doing the right kind of cyber-hygiene, if you l. so what we did was we brought the experts, including the network companies, together and
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said, let's agree on a common set of standards for hygiene that you will have in your network. then let's have a regular visit to your network to find out what's the experience you're having -- a, what are you doing and, b, is it working? because the thing we can absolutely guarantee is that what works today is going to have to change to work tomorrow, okay? and, so, we want to put in place a structure that evolves so that, as technology and different ways of hacking things evolve, that our networks can evolve, too. but cybersecurity is an essential component of what we do and a very important thing, and it's also something you and i as citizens and everybody watching this needs to think about because the way in which
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it starts is it normally comes in through somebody doing something and that gives somebody access, so we need to have good hygiene ourselves. >> rose: and as you know the problem with that kind of attack, you don't know where it's coming from. it's not like a nation state. an attack through the internet, you can't necessarily, because they're so ingenious about where they go from a to b. >> good inferences, but, yes. >> rose: there is this debate that goes on between security and privacy. where are you on that and where is the balance? >> clearly, the two relate. clearly, we're existing in a world where the capital asset of the 21st century is information, and it ends up being information about you and me. and you and i -- >> rose: some people collect that as a matter of business. >> and you and i -- correct.
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you and i ought to have a voice in the collection of information about us. you know, nothing about me without me, is what the expression is. and, so, this is a very important thing and this is something that's on our agenda as well. >> rose: that's interesting because that's about the future. it's on your agenda meaning what? >> so you will see us -- i've told the congress and others that you will see us, within the next several months, addressing the question of privacy of those who provide the networks -- the privacy practices of those who provide the network services and how it affects you and me. in other words, do i know what information's being collected? do i have a voice in whether or
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not that's going to be used in uone way or another. and those are two very important baseline rights that individuals ought to have. >> rose: the other thing that's interesting to me is that these companies are all mostly out in silicon valley, many of them, particularly the founding ones there, microsoft, apple, amazon, from seattle to silicon valley, and for a long time they said to the government, leave us alone. almost libertarian, right? >> right. >> rose: now it is said they have as intent in washington as anybody. is that fair? >> there is nothing in the corporate culture that argues against eventually saying how does policy affect what i do in
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my business. and what we at the f.c.c. do is do we get lobbied by google? yep. do we get lobbied by at&t? yep. so what our challenge is how do you find the common good? the interesting thing is you said a minute ago, you talked about earlier in my career i had been an advocate for various businesses. >> rose: right. the way things tend to work in an advocacy world is you come in and say, unless you do this in my way, it's going to be the end of western civilization as we know it! and the other side comes in and says exactly the same thing. and the job of people like me and my colleagues at the commission is to say, okay, where is it -- i understand why this position is good for them, and this is good for them, where is the solution that has the common good in it? we tall public interest, but the
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public interest is vague. what's the common good? how can you structure things so that, again -- and you come back to basic principles like competition. how do you make sure that that which serves the common good survives? >> rose: but also the common good is to stimulate innovation and to push forward. >> absolutely. that's why we wanted permissionless innovation with the open internet. we didn't want the internet to get choked down when somebody was deciding what two guys a dog and a garage came up with and whether you and i were going to get to see it! >> rose: is this the best job of your life? >> yes, i'm having a great time. i'm a really fortunate person. >> rose: thanks, tom. thanks, charlie. >> rose: tom, chairman of the federal communications commission. back in a moment. stay with us. >> rose: meg whitman is here, she has been c.e.o. of hewlett packard since 2011. the technology icon was created
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more than 75 years ago in a palo alto garage. for decades it led in sell computers and printers. the growth of enterprise services forced h.p. to evolve. the company's reinvented itself with aspirations to capitalize in both the pc and metricking schiewngses arena. sunday h.p. split into two separate piece. hewlett packard enterprise will primarily sell computer service data storage and consulting servings, h.p.,, inc., will sell personal computers and printers. pleased to have meg whitman back. >> pleased to be here. >> rose: theñi company that started silicon valley is making history again, in the paper. i want to talk about how you're going to make history. but tell me what happened to hewlett packard. how did the company that was the admiration of the world and certainly the valley, the company that in terms of values,
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culture and success was looked on with huge admiration? >> yeah, the last decade was tough, and i would actually chalk it up to too much turnover at the c.e.o. level. c.e.o.s,çó when you have different c.e.o.s with different strategies, it's hard on a company particularly as large as h.p. as we turn the corner with people being in role three or four years, you're starting to see it gel again. so i think too many c.e.o. as in too short of a time. >> rose: did it miss other opportunities others saw? >> sure, mobile phones is an opportunity h.p. missed, and many others. but the technology business is incredibly cierchg, and it's hard to catch every wave. obviously the bigger you are, the more challenging it is. bigger companies don't move quite as fast as smaller companies.
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so part of the separation is about being more nimble and focused on two entirely different markets so h.p. cannot miss the trends and, in fact, can invent the trends. >> rose: so now you come along. >> mm-hmm. >> rose: how did they get you to do this? because you had had a remarkable career. >> yep. >> rose: you'd even made a venture into politics which you said was a great learning experience even though you lost. >> mm-hmm. >> rose: you learned how to communicate, the demands to have the modern world in terms of what we expect in the public eye whether c.e.o. or a becoming governor of california. you became c.e.o. >> i lost the governor's race in the fall of 2010. i was trying to decide what i was going to do. i was working on our family foundation and sort of searching for the next thing. it's very difficult when you lose these elections. answer aside, we should be
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grateful for people who run because it's really tough when you lose. because it's like a personal referendum in some ways. >> rose: was it depress frg you? >> very hard. when you're part of the company, it's you and the company. when you run for public office, it's on you. >> rose: you felt rejected. i did. it's very challenging. >> rose: did you question your own abilities? >> sure you think could have, would have, should have, that whole thing. >> rose: yeah. so it's february and i'm at home one afternoon watching an afternoon daytime talk show at 4:00, and my husband who is a neurosurgeon comes home early from work. he walks in, sees me in the family room at 4:00 in the afternoon watching an afternoon talk show and says, this is really not good. you've got to pull your socks up and figure out what you're going to do. just as if on cue that afternoon i got a call from an h.p. board member who said we're looking for new board members for h.p., you would be perfect. you will sit on the tech
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committee. it's in the neighborhood. a chance to rep reinvent a silicon valley icon. i said, this is great, what could go wrong? 12 minutes from my house, it will be fun. >> rose: right. it became quite apparent soon that the company had a lot of challenges and we, of course, as a board had the do the most difficult thing that a board does which is remove the c.e.o. that was in some ways the easy thing. the next was who's going to rund h.p. and the board sort of looked at me and i said, oh, no, we are definitely not doing this. >> rose: been there, done that. >> yes. but over time, i began to feel -- you know, it matters what happens to h.p. h.p. is important to california. it's important, i would argue, to the tech industry and the united states and globally. we are often the largest private employer in many countries in which we do business. so ultimately, i decide, okay, we'll do the best we can. >> rose: you were on a plane ride from somewhere.
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>> we had a board meeting and on the way back a number ofxd them were persuasive, said we need you to do this, it's an opportunity to make a change to a big company that's important and struggling. the scale was interesting to me. >> rose: the scale in which they existed was interesting. >> exactly. you know me well enough to know i love a challenge. so they hooked me on the challenge. >> rose: tell me, when you got there, you had seen it up close as a member of the board. >> yeah. >> rose: but then you had to get into the weeds of this company. >> yeah. >> rose: what did you find? i found a very proud company with incredible founder dna. the aha here is it is really hard to kill founder dna. for h.p., thatçó was a very good thing because the core of this company through all the acquisitions and board drama was around innovation and focus on customers. i made the decision let's do more of what we do well and then we'll work on the to-do list of the things that need to be fixed. i went right to innovation and
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the customer. >> rose: was it making a decision about what product lines you should have. >> the first decision, myxd predecessor said maybe shared spin off the pc business. i put together a 60-day study and said we can't do this now. we can't afford to build another brand. because printing was going to stay with the big company, we would have to build a new brand for the p.c. company. the company wasn't in shape to split. as it turns out, when you separate a company of this size and scale, everything from i.t. to legal entities to tax i.d. codes to all kinds of things, you have to be strong to do it, and i don't think we would have been able to pull it off back then. so i made the decision, let's stay together, let's rebuild the company, let's strengthen the company, let's reconnect with partners and customers let's, you know, focus on making this company as great as we can with the businesses that we are in, and it's been quite a turnaround journey. we went from almost $12 billion of debt on the operating company to a positive net cash on the
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operating company. we really changed that much of the leadership team. we reignited the innovation engine to capitalize on the trends and the market like all flash array, a modern storage. we revamped in many ways the whole company. then we said how do we accelerate into this turnaround? and we decided, the board and i, to separate into two fortune 50 companies. can you imagine? it's amazing. >> rose: it is amazing. so you make the distinction between h.p., inc. and -- >> hewlett packard enterprise. >> rose: i mean, there are a lot of people getting in the enterprise business, from i.b.m. to amazon to hewlett packard at different levels. >> yes. >> rose: why did you think you could win at that business? >> well, first of all, h.p., inc. and hewlett packard enterprise are really quite different businesses. >> rose: i know. in the classic case, different customers, competitors, cost --
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>> rose: same with amazon and their retail business and internet business. >> right. we had a company that needed to reinvent itself. we said let's separate into two different companies so poke we can focus. one-third of business is consumers. you can buy a printer or a pc someplace. wie thought, let's focus on the enterprise and what we can cofor the i.t. professionals in small to medium to big companies and help them do a number of things that are top of the mind. every c.i.o. now is thinking, i have a legacy i.t. infrastructure, i've got to get to the new world order, i've got to get to the any style of i.t., the cloud, i've got to be more agile, and we are uniquely seated to help companies on that transformation journey because those big companies, they've got to keep running their legacy i.t. systems. >> rose: who are you going to
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serve? >> largely c.i.o.s and vp of operations for anywhere from small to large companies. we have a robust channel that helps serve customers, call them value-added resellers. they sell to the small customers and we sell direct to the biggest customers. >> rose: why did you decide to be c.e.o. of the enterprise? >> because in some ways it would be more natural for me to go to the consumer because i'm a consumer technologist really. i had a great executive dion wexler. he'd ron computers and printers in asia-pacific and brought him back and he was great at corporate. i said, i'll take the enterprise side, more work to do. i've become inammerred with the enterprise side. i had to learn about the
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enterprise side. >> rose: why have you become inammerred? >> i love disruption and the opportunity it creates. think about what our business has been through, the industry, from mainframe to client servers, pcs, from client server to web 1.0 where i had a front seat at the revolution at ebay. the first generation of the internet to web services. now we're on the cusp of another huge change of what's football for i.t. at a large company. >> rose: because of the cloud? because to have the cloud, because to have the way applications are written. >> rose: when you were at princeton did you imagine you would be a corporate manager? >> no. >> rose: what did you think? i went to princeton as pre-med. >> rose: is that where you met your husband? >> no, he was at harvard medical school and i was at hazard harvd business school. i decide there was a better fit
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for me in business and i sold advertising for a magazine at princeton and thought selling advertising, business, that's sort of alike, you know, then i applied to harvard business school. >> rose: you walked into the office of the c.e.o. and said let me tell you what's wrong with the way you're running your business, you have no idea how the employees think about you. >> i don't know what i was thinking. i was young, naive and enthusiastic. tom tierney was the manager. >> rose: he thanked you. he did and was an incredible mentor. he came on the board of ebay and he might be one of the best strategists in america today, and he was a huge help to me at bane and actually made an enormous difference to us. >> rose: what's the philosophy that someone comes in the door and say this is what you're not doing and don't perceive and this is an intervention moment?
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>> i think all of us are guilty of this at one time or another, you begin to drink your own kool-aid and you don't see yourself and your leadership style as it really is and sometimes you need a friend or someone who works for you or a colleague to say do you see what you're doing here? do you see what you are doing? >> rose: was it the right idea to run for governor? was that a mistake? did somebody not come in to you and say this is a different game? >> yeah. >> rose: this is a political game? >> they did say that. >> rose: why did you ignore that? >> i think for a couple of reasons, one i saw the state that i loved, the state that had been my home for nearly 30 years was in real trouble. you might recall we had huge budget deficit, we had a massive unfunded pension liability which by the way the state still has. our education system had gone from number one in the country in the '50s to number 48 or 49
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49. >> rose: at the the university level. >> and you had all kinds of challenges. i said maybe i can apply some of what i learned at my career both in ebay and other places to help solve some these problems. so i dove in with 100% of my effort, and i worked at it very had for almost two and a half years. >> rose: but were you prepared to spend your own money and donald trump is spending his own money? >> i was prepared to do that. >> rose: you spent a lot of your money. >> i did. and i also raised a lot of money. so i had a lot of support from people around the state, but i did spend some of my own money because it was important. i had to learn a lot, right. you know, i had to learn water policy, education policy and it was an experience of a lifetime, charlie. >> rose: how's governor brown doing? >> he raised taxes, obviously, on the number of folks. the budget deficit is more in line than it was, much smaller than it was, silicon valley has been a big help to that.
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silicon valley is the economic engine of california. >> rose: the place that every foreign head of state wants the go because they want to create their own silicon valley. >> exactly. >> rose: in seattle before washington, d.c. >> right, because everyone has the notion of how could you create silicon valley in china and -- >> rose: is that something you could do with america's culture? >> it's alchemy, almost. you have to have a great founder, a fantastic university -- stanford being the anchor, berkeley, u.c. santa cruz are all part of the ecosystem -- and then you have to have the venture capital where risk is rewarded. the more entrepreneurs you have, the more venture capital attracted and the more great companies that start. you start an almost ecosystem
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and very hard to create. >> rose: do you worry somehow there is the seed within the tech world today for overheating and a bubble that would burst? >> sure, i do. when i was at ebay, we lived through the 2001 bubble that burst. frankly, ebay was fine because we had real revenues and real profits and our market cap went down a bit and we just kept on n going, but you see a lot of very high multiples, young companies today. so i worry about it, and you've seen a pullback in the last six to eight weeks. you've seen a pullback in the valuation of some of these younger companies. so the multiples have gone down. you know, we'll see. i think the business is there is enough people who lived through 2001 who know what can happen. >> rose: who raised the questions. >> but there is a whole generation that didn't live through 2001 and sometimes you have to be a product of your
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experiences. by the way, i think i'm a better c.e.o. because i ran. >> rose: because you understand the public dimension. >> i understand the public dimension but also i learned about communicating with large groups of people. when i came to h.p., it happened to be about the same size as the government of california. and what i learned about communicating in politics is -- and i bet you know this -- it is not always about the left brain, the facts and the figures and all of this. it is about the emotion, the stories you tell and how you connect. >> rose: absolutely. eth the emotional level. if you connect on the emotional level, then they're open to your arguments. >> exactly. and i don't think i completely understood that because when you grow açór be very analytical. can you imagine being the c.e.o. of a public company, going in front of your investors and telling them stories? i mean, you would be thrown out on your ear. they want to know the numbers, the return on investment capital. >> rose: let me tell you my narrative, let's say.
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what's your bottom line. >> so i was a very left-brained, trained individual, we all are. and, so, i had to learn a hot about -- learn a lot about communication. when i came to h.p. i learned about that and did quite a different style of communication trying to rally the whole company. the importance of symbolic value. jerry brown, i admire him, when the state was in financial difficulty, he said we'll take cell phones away from all the civil servants in the state of california. i thought that's interesting but it is. was .01% of the budget. it was about the symbolism was he's going to be tough ton budget. >> rose: asked to sacrifice. if you had asked the man on the street, he would have said he's doing great, taking away
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cell phones from the civil servants. >> rose: sacrifice. ight. when i came to h.p., i said what's a symbolic act i can communicate to the company about why this is different? we tore town the executive parking lot and the barbed wire that surrounded the executive parking lot and moved the entire leadership team to cubicles out of their wooden offices. >> no longer behind closed doors? >> we were out in the open like everybody else. we didn't write about that, we didn't make a publicity statement. 250,000, 300,000 h.p. people knew that within 20 24 * hours and it made a statement. >> rose: breaking down the barriers. >> i learned that. >> rose: you are supporting governor christie. >> i am. >> rose: why? i know governor christie quite well and have admired what he has been able to do as a republican governor in a blue state with a democratically controlled legislature. my view is we have to have people who learn to reach across
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the aisle and get things done. >> rose: that's what's needed in washington? >> i think that's what's needed in washington because i think it's likely the president will be a one party and the congress will be of another. o so he didn't get everything he wanted in new jersey but sometimes in politics perfect is the enemy of really pretty good. >> rose: how do you ascertain how he's doing? >> well, he's working very hard, and i think he is a fantastic retail politician. you know when we were talking about how you reach in and connect? no one's better than chris christie at reaching in and connecting with people. when people interact with him, they feel they know him and understand his heart. he's been putting a lot of shoe leather into iowa, nevada and new hampshire and i think he's making progress. you can see him beginning to inch up at the polls. his favebles are turning. so i'm optimistic, it's tough but i think he's doing everything he knows how to do and i admire him a lot for doing
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it. >> rose: look at where we are in terms of technology. what's next? >> we're still at the beginning of the mobile revolution. that sounds crazy because we've all had mobile phones for a long time but pretty soon almost everyone may have a mobile phone and it's changing every element of life and i think we're at the beginning of the impact not the end. you think about how people use their phone-in developing countries to trade commodities, to sell their goods on the internet to countries around the world. >> rose: gives people in far away places access to information. >> and it's a political current as well. i think we're at the beginning of the revolution. >> rose: which includes social media. >> social media, it's first home in many ways is on the mobile. there is more people who access facebook on their mobile than on their desktop now. i think you're at the beginning
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of a tremendous revolution. when you think about a pc, per se, think about it, what you have in your hand is more powerful than a pc ten years ago, maybe more powerful than five years ago. think about what you can do on your mobile and your tablet. when you've got a lot of work to do, you really want a full-pledged pc, but i think we're at the beginning -- >> rose: is there something to be learned of what lou gerson did at i.b.m.? >> yes. his book "who said elephants can't dance," he said, "when i came to i.b.m., i thought culture was important. when i left i.b.m., i thought culture was the only thing that's important." >> rose: why does it take so long to learn that? >> you think other things can make a difference, but when you trunk the large-scale operations, the people only, the person in new york for the
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server business that is to know what to do, has to know what the ethics and the value and the ethos of the company is. and people have to -- it cannot be a command and control environment. people have to know what the do on the front lines. ho dow they know what to do? it's not through policy and procedures and handbooks, it's from the culture. >> rose: what did you learn from steve jobs at apple? >> steve jobs may well be the genius in business of my generation. i mean, this guy was amazingly creative, and the ability to invent category. >> rose: come back from bankruptcy, the largest company in the world. >> kudos to tim cook for him to continue that legsy. >> rose: why was it a mistake for dale to buy e.m.c.? you said your employees gave you guys an opportunity. figuring out how to put cultures
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together and you guys would go out and start innovating. >> two companies quite similar in many ways, h.p. was a larger company than dell, but we were in the same businesses. we took opposed strategies with the same set of facts. >> rose: what were the facts? the industry and incredible tectonic plate shifts from thexé generation, one of these inflection points for our industry where a lot off the old proud companies were under pressure. our strategy was delever at the balance sheet so you have no debt on the operating company, in fact cash on the operating company. lean in to new technology like three par, like our networking business, like cloud. make sure we pivoted to solution selling with our enterprise services business and really focus observe revenue growth. and their strategy was lever up the balance sheet,çó put old technology together. take out the costs and then try
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to make your way that way. i mean, two die metrically opposed strategies. listen, i'm going to vote for hewlett packard enterprise all day long because i think fast is important, speed is important where we live. they have a year to close the deal and another clear to integrate. we have an opportunity i think to explain to customers our solutions and why we are, you know, a stable, great company to do business with. and it is pretty funny, charlie, because you think back in 2011 we looked pretty unstable, right? >> rose: of course. now we're looking like the paragrone gone of stability. >> rose: when did fiorinañr leave? >> i think carly left in 2005, 2006. >> rose: has she taken an unfair hit or is it simply a product she had to be not the
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right person at the right time for hewlett packard? >> politics is tough. we covered this. you've got to have a rhinoceros skin, and people will try to take you on. i would like to say no good deed goes unpunished. i said before in public, i think the compaq acquisition was the right thing. we have the position in pcs and servers thanks to the compaq acquisition. >> rose: sheñi drove that. she did. >> rose: right thing? i think it was. 20/20 hindsight looking back, i'm glad we have the position we have in those two businesses because fundamentally they are the bedrock of h.p., inc. and hewlett packard enterprises. >> rose: when you buy a company sometimes you buy it just to get the executive talent. >> they're acquires. people would say for the most part the big tech ac zigs are very hard to pull off and
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usually there is a challenge before the sun rises again. so i think we're super well prepared in these two companies to go own vat, deliver for customers in a changing world, while we're not trying to innovate another company or fundamentally remake the sales force and take out hundreds of millions >> rose: thank you for coming. great to see you again, thank you, charlie. >> rose: meg whitman, thank you for joining us. see you next time. >> rose: for more about this and earlierñi episodes, visit us online at and captioning sponsored by rose communications captioned by media access group at wgbh this is "nightly business
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report" with tyler mathisen and sue herara. >> all revved up and everywhere to go but up. auto sales take off in october with the economy growing so tepidly, why is the industry on track for its best year ever? >> cutting cash. the federal reserve temporarily stops billions of dollars of u.s. money from going to iraq's central bank. and the reasons might surprise you. tough medicine and we'll introduce you to a publicly traded company under investigation in at least six states and shrouded in controversy. all that and more tonight on "nightly business report" for tuesday, november 3rd. good evening, everyone. welcome. talk about motoring along, america's auto industry is now on pace to


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