“Inventing possibilities for change”
Fortune Magazine's Fourth Annual Brainstorm Conference
July 14, 2004
© Copyright 2004 Hewlett-Packard Development Company, L.P
All rights reserved. Do not use without written permission from HP.
Good afternoon. I for one feel like I'm hyperventilating and dehydrating in front of you, so you won't mind if I drink a lot. It reminds me, I think it was Jane Fonda who said on one of her exercise tapes, "Keep breathing." That became very famous, so I guess that's what we're all supposed to do.
I noticed in the program that this is billed as a keynote. That's probably much too grand and formal a description of what I'd like to do here. What I'd really like to do, and it is indeed a great privilege for me to be here, I'd like to share some perspectives for about 15 minutes, and then David and I are going to sit down and have a chat, and then hopefully, we can have a chat.
It's a privilege to be here because I think the subject of this conference and the people who come to this conference are very much needed in the world. And I was reflecting on my own personal experience and thinking about why I believe this conference matters, and why I believe the subjects that we're here to talk about matter, and so if you'll forgive me, I want to start with a sort of personal story that starts more years ago than I intend to tell you.
I don't know how many of you know this, but I didn't start out as a technologist, and I certainly didn't start out with an ambition to go into business. I started out as a history and philosophy student, and I had actually no contact with big business. I grew up in an academic family - my mother was an artist, my father was a professor, and to me, it was all about the power of ideas, which is why I gravitated toward philosophy, and it was all about how ideas changed the course of human events, which is why I gravitated toward history.
So, how did somebody like me end up in big business and technology? And I think there are really two reasons. I ended up in technology because of what I believe technology makes possible: how technology can enable, empower, unleash and change things - sometimes for the worst, but frequently for the better. And I'd like to talk a little bit about that, and I think in large part that is what this conference is about.
And the reason I gravitated to big companies, and frankly, I've worked in big companies all of my career, is because of what I think big companies are capable of. There has been a lot of scandal and abuse and appropriate distress over the power of big companies to do ill, but I think there is a huge opportunity for big companies to do good, and [there are] lots of examples of where that's happening, and I'd like to talk about that as well.
So, let me start with what technology makes possible. Why do I think technology is the ultimate tool of empowerment and democratization? Let me begin first by saying I think the last 25 years of technology are the warm up act. And I think as well that the dot-com boom and bust are the end of the beginning, and now we enter the main event. And by main event, I mean a world in which all physical content, all physical processes, everything analog and physical can be and will be transformed into digital, mobile, virtual and personal.
Digital. Photography used to be a physical, analog process and a whole industry grew up around that physical, analog process. And today, that process and that experience has become digital. And in the course of that experience becoming digital, industries have become transformed, middlemen are being squeezed and people are being empowered in a way they never were before. All physical content will become digital.
Mobile. The camera phone will soon become the most ubiquitous digital photography device in the world, outselling even the digital camera, which basically means that digital content can go anywhere and be taken anywhere. The world is becoming mobile.
Virtual. There will be an opportunity for digital experiences to be as lifelike and in some cases even more satisfying that the real thing. That's a problem we need to think about, but it is happening.
And finally, personal in the sense that the individual is in control. Every process will become digital, mobile, virtual and personal. And without going into a big long thing about HP, that is in fact the world that we have built this company for; it is why we have a unique portfolio of capabilities.
The thing that I think is going on, in addition to every process becoming digital, mobile, virtual and personal, is now the big opportunities and the big problems require collaboration horizontally, not vertically. In business, we have grown up, frankly - in technology, in academia, in philanthropy, in medicine, in education, in government - we have grown up in a vertical world. We have thought about creating value vertically through chains of command by department. We have thought about collaborating within a vertical team. We've even built technology vertically to satisfy that way of delivering value.
And now, if you think about the big opportunities that companies have, how do I consolidate and rationalize my supply chain to be more efficient? That's all about horizontal value creation. I can tell you when I came to HP five years ago, we had 87 separate divisions and 87 separate supply chains. We couldn't leverage much value. Today we have five, and as a result, we now can leverage the power of a $50 billion supply chain - the largest supply chain in the technology industry, but we can only leverage that power because we found a way to create value horizontally.
If you think about the education crisis, the education crisis will be solved in large part through technology, but it will also only be solved if there is a level of collaboration and value creation that happens horizontally.
I talk to academics all the time. Academics now understand that the big discoveries, the big revelations and the big value that they can create come from the white spaces between departments and between disciplines. And this conference is all about horizontal collaboration between groups of people who may not have collaborated in the past because they were in different disciplines, different silos.
Every physical, analog process will become digital, mobile, virtual, personal, and that changes the nature of everything. It doesn't all happen right way - that's why I say we have only come to the end of the beginning, and now we are entering the main event, which I believe will last for decades. It certainly changes how technology companies think about delivering value, but it changes as well, the nature of industries. EBay - I always pick on Meg because she's such a great example - but here we have a hugely successful company that is about the digitization, mobilization, virtualization and personalization of the old physical flea market. That's what it is.
And in the course of that value creation, which is all about connecting people up horizontally that never used to be connected before, life has changed. Not to mention the industry.
The nature of authority changes; the nature of who has to work together to solve problems changes; the nature of the dialog changes, and that is why digital, mobile, virtual, personal and value now is all about horizontal collaboration, not vertical specialization. It doesn't mean we don't need experts, but it means that expertise has to be applied to create a new value by collaborating with others who know something about something else. In the course of that, I think we have the opportunity to democratize opportunity through the use of technology and to solve some problems that have vexed humanity for generations.
So, I came to technology because of what I think it makes possible. And I think technology makes more things more possible for more people in more places than at any time in human history. I happen to have studied, believe it or not, medieval history. How did I get there? I got there because I was really interested in how a world goes from darkness and despair to optimism and progress. And I think we are also at a historic transformation point. What I know from my study of history is that progress is not inevitable and it is not accidental. It is a question of people making choices and deciding to collaborate in certain ways, to apply the power of new technology, to believe that progress is possible.
I also said I came to a big company because of what I think big companies are capable of. And let me just give you a couple examples. Much of this data you probably know, but 52 of the world's largest economies are companies. Fifty-two of the world's largest economies are companies, so we have the power to do great ill and we also have the power to do great good.
Let me talk a little bit about HP's power very briefly - this is not an HP ad - and then give you three stories that I think illustrate what I'm talking about. HP is today a Fortune 11 company; we are an $80 billion company; we operate in 178 countries; we have 145,000 employees. We are the largest consumer technology company in the world, the largest small and medium business technology company in the world and a huge enterprise and public sector company.
Just to give you a sense of reach in those 178 countries, setting aside those wonderful inkjet cartridges, all that ink that you're going to buy when you print you photos, setting aside that, a customer somewhere - a consumer customer, an individual, not a big company like Disney or eBay - a consumer buys an HP-branded product more than once a second. That's a lot of impact. And the question is, what do you choose to do with that?
Now at HP, we talk about being defined by our capability, being defined by our character and being defined by our collaboration, and every one of those things is important. Capability is about what we are able to do. That's why we focus so much on innovation and invention. That's why we're proud we're generating 11 patents a day. But capability without character isn't enough. Character is all about what do we choose to do with that capability, and collaboration is all about how do we choose to do it. And we are fortunate to partner with so many of you across many different disciplines and across many regions of the world. Let me give you three stories about what I call "the power to do well by doing good."
One is a story about a supply chain. I mentioned that we have in that $80 billion company a $50 billion supply chain - the largest supply chain in the industry. Of that $50 billion, $10 billion comes out of China. We spend a lot of time interacting with our supply chain partners on their labor standards, their own social responsibility, their environmental record, and we have codes of conduct that we put in place for all of our suppliers that literally have changed how they do business. Is it perfect yet? No. Is there room for improvement? Of course. But the reality is we have changed how people do business. And in fact, Debra Dunn, who is here with us today and does a lot of work in communities around the world working with HP people and others, Debra Dunn just returned from China where she was meeting with a newly formed group of Chinese companies that are focused on corporate responsibility.
Fundamentally, what those government officials and companies said was: we struggle with how to have an impact on the issue of corporate social responsibility. We look to you - big global companies who impact huge swaths of our economy and touch lots of people and lots of companies - we look to you to help us get better by what you require of us as partners to you. $50 billion is a lot of leverage to do good.
Another story that I'll tell you is one where I had another opportunity to collaborate with many of you, and that was during the extraordinary World Economic Forum in Jordan about a year ago. And you may remember - for those of you who were there - a set of people came together and it was a rather extraordinary set of dialogs about what did it take to move forward in the Middle East, and you can imagine all the things that were said. I was on the panel, and I noticed while I was sitting on this panel, that there was a security guard sitting over by the exit, and he was listening very intently. And so, as I went out, I stopped and I said, "What did you think about all that? Tell me a little bit about yourself, what did you think about that?"
Well it turns out that this security guard was Egyptian, and he said, "You know, we talk a lot in the Middle East about politics. In the end it's going to be about economics," - this from a security guard who understood that the requirement to provide opportunity for people was as vital to the peace and security of that region as any political solution. And in fact, if you look at the Middle East today, as you well know, here is a potential trading block of 280 million people. And while there are a lot of issues between those individual companies and the rest of the world, the power of that potential trading block is huge, if they can create a level of horizontal collaboration between those economies that creates a powerful system. It is possible; it has been done in history - it happened in the period that I studied.
And the last example I'll give you, and this one hits very close to home, I think, is a story of what we're doing in a very poor rural community called Kuppam, India. We have a set of programs that we've been working on for almost four years now. Some of them we call Digital Villages, some of them we call i-communities, but this is where HP people go into a community, an underprivileged, under-accessed, underserved community and we pick the toughest one and we get deeply engaged with that community, with their objectives and their goals over a three-year period.
Our job is not to go in and digitize the community. Our job is to go in and help the community understand their goals and objectives, and then apply the talents of our people, our managerial expertise and technology to help them realize their objectives. We have one in India, and a reservation in San Diego; we have them in the poorest sections of East Baltimore; we have them in South Africa and China. And this one happens to be in a rural community in India.
Our HP people who were engaged in that village noticed that there wasn't a reliable source of electricity, so they came up with the idea of a solar-powered digital camera and a solar-powered photo printer. Maybe that sounds kind of interesting, but what's interesting is what happened. We hired about 10 young women - by the way, Kuppam is a place where a third of the adults are HIV-positive; the two women I'm about to tell you about dropped out of school in fifth and seventh grades. We hired these young women to take photos of a visit by the minister to this project. These two young women are named Saraswati and Gowri, and they became official photographers, using this solar-powered camera and a solar-powered photo printer.
What they discovered is while people couldn't afford in that village to buy all that, they could afford to buy one photo opportunity. To make a long story short, what's happened now is these two young women have gone into business. They have become official photographers. They travel throughout villages in India with this solar-powered equipment and they sell photo opportunities. They have become so successful that their month's income has certainly more than doubled what it used to be. They have set up a fund to help other young women go into business. They are so successful, their husbands have joined in to help them grow the business. And now, interestingly, what we find happening is these young women are taking pictures of what's going on in their communities in India in a way that opens up their own eyes and our eyes to what's going on.
Some of you may be familiar with Dorothea Lange's work during the Depression, and there is much about the images that these two young women are taking that is reminiscent of Dorothea Lange's work. It is a window on the world, not to mention that it has created an opportunity for these two young women that never existed before. And the similarity is so clear, that we actually have the great privilege in a few, I guess it is weeks, of taking to India Dorothea Lange's 78-year old son, who has never been to India and who wants very much to connect the work of these women to the work of his mother in a way that shows a window to the world.
Now, those are just three short stories of I believe not only digital, mobile, virtual, personal and horizontal value creation, but the power of a company to make a difference in the world.
Why do we do this? David asked me, I know, at one of our first meetings: "You know, Carly, you talk a lot about doing well, doing good. Why bother? I mean, short-term quarters and stock rates … of course it's the right thing to do." But it's the smart thing to do in my judgment. It is enlightened self-interest on our part. Why? Because for example, if we look out more than a quarter or two, we know that only 10 percent of the world can afford to buy our products today. Ninety percent of the rest of the world represents a huge opportunity. We have to go at it differently, we have to create value differently, but it is a huge opportunity. So it's smart in the sense of long-term growth opportunity, but it's also smart for the security and prosperity of this nation.
I know that outsourcing is a controversial subject, and every time a person loses a job in this country it's painful. But every time a person in the global economy gets a stake in the global economy; every time a person is enabled, empowered by a new opportunity; every time an individual says I can change my life, I can make a difference, and I can make a difference in other people's lives - that increases our total security and our total prosperity. So I think there's a lot of upside to the globalization that we need to think about as well.
I'm going to close by saying one thing. You got a letter from me, and in that letter, I talked about the fact that I believe everything is possible. And I think sometimes people hear that and they have perhaps an understandably cynical reaction. I actually do believe that. Not everything is easy and we have to be realistic, but I do believe that we are entering an era in which more things are more possible for more people and how people choose to collaborate and take advantage of the opportunities and the technology will make all the difference in the world.
I also believe one other thing, and that is I think it's proven every day and I think it's proven throughout the course of history: progress is not made by pessimists, progress is made by people who actually do believe that everything is possible. Progress is made by optimists, and that in many ways is perhaps the most personal reason of all that I'm attracted to technology, because inventors think they can change the world. Inventors think everything is possible and they strive to make it so every day.