Women in the Business World is ruth porat. David she started as an investment banker at Morgan Stanley, rose to be the cfo, and was recruited away to be the cfo of google and now the cfo of alphabet. In that role, she has enormous influence at that company and has done a terrific job of making certain their Balance Sheet works well and that they are much better organized in the financial sense. I have no doubt she will be a power at alphabet for some time unless the next president of the United States says i would really like her to be secretary of treasury. She would be a terrific candidate for the position. David so during this period of time, google has done quite well and alphabet has done well. Your stock is a more than 20 this year and i should say, from the time you became cfo, the stock is up over 200 and market cap is up over 200 . They have done quite well under your leadership. But i am curious, are more people looking at doing searches now during this covid19 period of time more than ever before or are people not spending as much time searching . Ruth no, people are spending a lot of time searching. We have trillions of searches every year, precovid, postcovid. It is really the nature of searches that changed. Im so early and so, early in the crisis, people really migrated to shifting for information about the disease, what they needed to know, all information about covid. You then saw people shift to, ok, how am i going to live my life in the covid world . So more things, more how to searches. What do you do . How do i cook . Meditation wellness. , now youre seeing people move back into more commercial activities. And i think one of the big surges that we saw was, how can i help in my community . How can i help others . And it is always really quite inspiring to see through search, how people are feeling about the world. David so, most of your employees are still working remotely, is that correct . Ruth we moved everybody to remote from home, all 120,000 of us, but as countries are opening up, we are starting to move people back in. So for example, in taiwan, we are 70 . Areome places in europe, we bringing some people back. But fundamentally, we moved everyone to work from home. David has this ever worried you . You have all these people but you are technically very savvy. Ruth when we started the move to working from home, it did seem daunting. I am responsible for our Crisis Response and put together a really strong governance about how do we get people to move to work from home, a global team, a regional team, and we were in sync daily. That worked really well. What we were concerned about was, what would be the impact on productivity and wellness . Our chief medical officer very early in the crisis said more people would be affected by Mental Health issues than actually the physical disease itself, so we focused on those two. And i think that was important. The other thing is, google is really about our people and the ability to deliver for people in communities because of our compute capacity. One of the things we didnt have worry about was our ability to really deal with the surge in online activity, and that was because of all the investments over many years and all of the testing for what could happen in a crisis scenario. I think it is an important point, because you cant solve the riskmanagement issue in the middle of a crisis, you need to solve it ahead of time, and that worked. David Many Companies are saying, now that i have learned my people can work from home, maybe i do not need these people in the office, or i do not need all these people . Is that your view . You dont need all the people you have, or you may not need them in the office . Ruth we believe when people are together, that is a critical element of collaboration. Collaboration helps support innovation collaboration within teams and collaboration across teams. It is collaboration and is serendipity, so we do look forward to having people back in the office. What were looking at is the productivity lift you get if people have the opportunity to work from home some days, be in the office, particularly when the rest of the team or teams are in the office. And you can save people commute time. You have better access to talent because you are solving what people want in their personal life, it is actually going to result in a better outcome. What that means for real estate, we are still figuring out. David early on, google was wellknown for, among other things, you got free food. What about if you are working t at home . Do you give them free food by delivery somehow . How do they compensate for that . Ruth we are not doing that, but a lot of people focus on food when really, what were trying to create and have been trying to create is this fun quirky, fun, quirky, magical campus. It is about more than the free food, it is the experience on campus. When we moved everybody from home, we moved connecting the community to a virtual delivery. And so for food, as an example, you can do a oneonone session with a chef, a cooking class, we took our fitness classes and moved them to virtual fitness and even some sort of goofy, google style like yoga ones with your dog. David what have you learned about yourself during this time . Ruth one of the things that was actually gratifying, if i can broaden that question, is what i saw at google and what i saw in my colleagues. This has obviously been an extraordinarily stressful time. We feel this responsibility because so many people are counting on us for quality information, the ability to stay connected, and what i saw was people really step up in a meaningful way. People working 24 aroundtheclock. 24 7 aroundtheclock. That was inspiring. It has been an extraordinary time. What i learned about myself is, one of the positive elements of this has been sheltering in place and having my kids, who graduated from college they are now back with us for a limited period of time, and that has been remarkable. My husband and i thoroughly enjoyed that. David some people say that the googles of the world, google, facebook, microsoft, apple, amazon are too powerful. That they have so much power in our economy that it is not healthy. You have been at 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 is not healthy . Ruth we are very mindful of the fact that with the scale of this Company Comes scrutiny, and it is incumbent upon us to engage with regulators and help them understand what is it we are doing that is of benefit, how are we providing Better Services at lower cost, which is really indicative of the competitive nature of the world in which we operate. We have got intense competition within the u. S. , intense competitors outside the u. S. , and 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 its a fair question and we are engaged constructively here and around the globe with regulators on it. David you have more than 100 billion of cash on your Balance Sheet, which is a lot of cash. Why do you need all that cash . Why not just dividend it out or are you going to use it for investments . Ruth so, at the end of the Second Quarter we actually had 120 billion, but who is counting . So, you are right. When i got to google, there has had been a longstanding view that it was helpful to have cash because of the optionality it provided. I think the question i posed was, how much is too much, and how much is too little . Can we actually try and dimension that analytically and put together the data that led to a conversation about beginning a Share Repurchase program. And it started small, but we have now increased it five times in the last number of years. The last one we just did in the Second Quarter was a 28 billion authorization. So it has been a journey. We have been increasing the return of capital. I spent a big chunk of my career covering firms like carlisle, private equity firms, so i do appreciate what an efficient capital structure looks like, and this is just trying to get the balance. David is it hard to break into the Technology World as a woman, or is it harder to break into the financial world is a woman . Ruth i think theyre actually pretty similar. The difference is a more collaborative environment in tech, i would say. Wall street, it can be pretty tough. David lets talk about your background for a moment, how you came to be the cfo of google, alphabet, and before that, Morgan Stanley. So, where did you grow up . Ruth 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. 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, enlisted in the british army, fought under montgomery. His view was the only way to find peace in a Peaceful Place was to have a skill people needed. So he decided to teach himself physics while in the army. He used to always tell his kids that his fellow soldiers would tease him and say, you will die before you can ever use this physics. 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 masters degree, a phd, thats where i was born. And then he was given a position at harvard. The only two places he worked was harvard and stanford. So we moved eventually to Silicon Valley and that is where i grew up. David you went to stanford undergrad . Ruth i did. David did you major in finance . Ruth i majored in economics and international relations. I 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 . You got an mba from wharton. Ruth yes. David then you went to wall street . Ruth i went from stanford to the school of economics to wharton. I thought i would be a consultant. When i started in business school, what id i was convinced what i wanted to do helpork with companies and them with their problems. I took a fascinating course with a great teacher and he opened my eyes to this thing called wall street, mergers, and acquisitions. I went from being convinced that i was doing my thing to being completely convinced i wanted to do mergers. David when you went ultimately to Morgan Stanley, was a 50 women . Ruth far from it. When i started at Morgan Stanley, it was 1987, so it was sort of the stone age 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 didnt 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 that was sort of the ethos on wall street. And in fact, a couple of 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 and said, ruth may come back after the first child, but there is no way she will come back after the second child. Fortunately, the client liked me a lot more than he liked his partner and basically told him he was an idiot, but that 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. I didnt know at the time those were sponsors, but that is what they were. David you became the cfo and at some point, you are one of the most important people in Morgan Stanley. Then the u. S. Government calls up and says, why dont you work at the Treasury Department . A very senior position. Did you seriously consider doing that . Ruth well, one of my most meaningful parts of my career was in 2008, the 2008 crisis when secretary paulson asked me to lead a team to help him with the booming housing crisis and spent the entire period working on fannie mae and freddie mac and then that evolved into work on aig. I thought it was extraordinary to be able to use skills are skills i developed over decades at Morgan Stanley to be able to help the country. That remains to me one of the most meaningful times. David you were doing that as an employee . Ruth i was. David Morgan Stanley also went through a crisis during that period of time. I am sure you remember, where Morgan Stanley was close to not being able to survive, and then a japanese investor said, we will put in some money. Turns out that money was at three times the stock price that you were trading at and people werent sure if the japanese company, mitsubishi would show up. Where 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 that famous Lehman Brothers weekend followed by a call from the Federal Reserve, saying 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 thats the point at which Morgan Stanley was running into its own very severe liquidity crisis. David Morgan Stanley prospered through the period of time, they survived, and you did quite well. Then someday, somebody called you up i dont know who it was was it a headhunter . Somebody from google saying we would like you to consider the being the cfo . Were you surprised at that offer because you were a wall street person, not a Technology Person . Ruth that was actually a very different path to the question. I was on the stanford board and had the opportunity to spend some time with bill cambell, who was an iconic coach to so many eople, to larry, to sergei, to eric schmidt, to steve jobs. I left the Board Meeting and went to his home to sit down and talk about life generally. And he started probing on what next, what would i want to do . My comment was, i didnt know. At some point i would want another chapter, but one thing i knew for certain was that i would not leave Morgan Stanley as cfo to be chief Financial Officer anywhere else. And for two hours he kept coming back to that strong assertion, and at the end of two hours he said, ok, so you wouldnt leave to be a chief Financial Officer anywhere else, correct . I was adamant, correct. He said, i have the perfect job for you. You should be the cfo of google. Of course, the two of us burst into laughter and i said, that one i would do. [laughs] i didnt believe it. I left his home and i didnt actually believe it, if it was real or if it would happen. Within a couple of hours he called and said, go over to larry pages house and spend some time with him. See if this works. David all right. So you went to see larry page and he said, guess what . I just heard about you and what want you to be the cfo . Ruth i had worked on the google ipo and had different interactions through the stanford board. We spent two hours. It was this broad conversation staff fascinating, as larry page always is. I left, again not believing it would happen, but luckily, things came together. David so you took the position, but now you are going to be breaking into another world where women are not that prominent. Was it harder to break into the Technology World is a woman or break into the financial world as a woman . Ruth when i broke into the financial world, i was a junior. I think it is harder when you are a junior than someone who is credentialed. But if it is a question more broadly of which world is tougher, wall street or tech, both of them have evolved ully since those days of the boys club on wall street that were so painful. I think there is a much greater awareness that it is not just the right thing to do to have diversity in senior ranks throughout an organization, but it leads to better outcomes. So, i think that they are actually pretty similar. The difference is that it is a more collaborative environment in tech, i would say. At wall street, it can be pretty rough. David the more testosteronefilled place is wall street or Silicon Valley . Ruth there is a lot of testosterone, enough to go around. David so, when you get there, you are a fairly buttoneddown cfo of Morgan Stanley, precise and so forth. Google probably is a less precise place when you get there, right . They are making so much money, you do not have to worry about every little dollar i guess. So did you say, weve got to change things and people said we dont want to change, we are doing well, or did people say, yes, we want to change . Ruth 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 is 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. So i actually didnt 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. It has been a journey. David you seem to have it all. So what is the secret to having it all . Ruth the most important thing to me is to find a mix in life that works for you. David so i assume youre coming to us from your bedroom because you are like many people working from home because of covid . Is that a Fair Assessment . Yes, my sons old bedroom rather than my current bedroom. Yes, we are locked down and working out of the home. David how have you found that to be . Youre a Technology Company so people would presume youre good at adapting. Did it turn out to be harder than you thought or easier . The hardest thing for us has been producing our films and series, because that is very in a physical realm. What i would say it is a hallmark of the culture to be very adaptive. No one waits for me to tell them what to do. And when you built a culture, as we have, everybody pitches in and figures out what to do. An example would be our animation group. I had nothing to do with it, cant take the credit, but they moved hundreds of workstations out of the office into the home over the weekend, and they have been able to continue to produce great animated films and series from the house in a way that was remarkable and not centrally directed. David many ceos with whom i have talked say offcamera that they will not be hiring back everybody they once had, they realized they can get by with fewer people and dont need as much office space because more people are happy to work from home. Will that be true in your case . Look, the virus has been so tragic for people, for the economy, for unemployment, and certainly hotels and other businesses like that are down. Fortunately, as an internet business, we are actually up, so we have continued to hire all the way through this crisis. Were adding New Buildings still. So, you know, we are incredibly fortunate. David alphabet is the parent so company. You are the cfo of that and also cfo of google. Google was the Search Engine and that is still massively profitable by anybodys standard, i assume. I dont know if you like the word massive, but it is profitable, right . Ruth correct. David what about Cloud Computing . You are number three in that business but catching up to the number one, amazon, and number two, microsoft. Is that an important Growth Engine as well, you think . Ruth it is an important one. It is a sizable market we think, in the early innings, the opportunity for businesses to migrate to the cloud provides them with extraordinary added capabilities. They are looking to us whether it is for security or Data Analytics or a. I. , and that is what we are able to do, working with customers. You have really seen the important migration to the cloud. So we are investing meaningfully in it. We do see it as a sizable opportunity. David one of your areas of focus at google and alphabet is health care and healthrelated. Why is that such an important focus of the founders and you in terms of health care . Why is that so important to you . Ruth health care, we have the opportunity with technology to make a fundamental difference in health care. In particular with a. I. In a host of areas. For me personally, i am a Breast Cancer survivor, i have had Breast Cancer twice, i have gone through chemo twice, radiation, more surgery than could imagine, one 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 sloankettering, i had the best care and here i am, healthy, as healthy as i have our being. Have ever been. Not everybody gets that break. About a year or two ago, i remember when our a. I. Engineers had a breakthrough in earlystage detection of metastatic Breast Cancer with a. I. , which struck me as precisely the kind of thing that is transformative. 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, nontech view of this. So i called my uncle is just to my oncologist to ask whether i was reading this the right had the impactly that i expected. His answer was, you cannot democratize Health Care Without a. I. So we look at this as this opportunity to democratize health care, to provide services, identify diseases earlier, use things like telehealth, that enables everybody to get the kind of care i was able to have. That is why i am passionate about it. David so, somebody watching this, a man or woman and says, she is 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 i think one of them is that it is very important to make clear decisions anchored in data. It is the way you can build support for the ideas, the way you can know where to double down on great opportunities for the longterm, where you should be pulling back. 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. I would say that the other is making it really clear that you want diverse views. You build a diverse team and that, you are open to not only open, but really expect diverse views and debate. To me, i have often been asked, how do i think about rising stars . And the answer is, i want someone who is in my face. I want somebody who challenges me. And i think creating an environment where there is that open discussion is really important. David some people say it is very difficult for women to have it all. But you seem to have it all. What is your secret to having it all and is it harder than people would think or easier . Ruth depends on how you find having it all. How you define having it all. I have often been asked about worklife balance. I think that is a horrible term and everybody should banish it from their vocabulary. Because getting balance the physics of it are hard. To me, the most important thing is to find a mix in life that works for you. For me, it has been an incredible career. I get a lot of joy and energy out of what i am doing and i have an amazing family. I have been married to an extraordinary man forever, we have three wonderful kids. For some people, it may not be kids, but its got to be something other than work. And it is 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. For me, that has been the most important element. I would say i get very concerned when i hear women have a plan. A plan on when you are going to sequence each step along the way. I would say, in particular when i had cancer and didnt actually know what was going to come, i was able to look back on my life and say, i have no regrets. Carol from the Harvard David from the harvard law review and the columbia law review, you are flooded by invectives. Major did you think you had a chance to be on the Supreme Court . Ginsburg no, no one thinks in life, my goal is to be is a prima court justice. David where the other justices saying, we are happy to see you, lets go have dinner