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CARLYFIORINAMINNEAPOLIS,MINNESOTASEPTEMBER26,2001"TECHNOLOGY,BUSINESSANDOURWAYOFLIFE:WHAT'SNEXT"

Copyright2001HewlettPackardDevelopmentCompany,L.PAllrightsreserved.DonotusewithoutwrittenpermissionfromHP.

Thankyou.Goodevening,everyone.

Imhonoredtobeherewithyou.SomuchhaschangedsinceIacceptedyourinvitationtospeak.

Sincethen,wevebecomecitizensofanationinmourning.Anationwhosebasicfreedoms,includingourfreedomofmovement,arebeingweighedagainstothervalueslikesafetyandsecurity.Insomanyways,weareanationmoreunitedthanwewerejustafortnightagobutwerealsoanationinsearchofnewmeaningandcontext.

OnthemorningofSeptember11,IawoketothenewsthattheWorldTradeCenterhadbeenstruck.Likemanyofyou,Istoodtransfixed,staringattheimagesontelevision,horrifiedbytheeventsunfoldingbeforeoureyes.AndlikemanyAmericans,IfeltadeepandextraordinaryconnectiontothepeopleintheWorldTradeCenterandthePentagonandonthoseairplanes,tothecompaniesdecimated,tothefamiliesforeveraltered,totheparents,andfathers,andmothers,andchildrenwhoarestillhopingbeyondhopethattheirfamilymemberswillreturn.

Andasabusinessleader,Iexperiencedawholeothersetofemotionsfirstandforemostconcernforthesafetyofouremployeesandtheirfamilies.ConcernforthesecurityofouremployeeswhoareofMiddleEasterndescentorwhopracticetheMuslimreligionhereintheUSandabroad.Concernforemployeeswhoaretraveling,andhowtogetthemhometotheirfamiliesasfastaspossible.AndthenaconcernforthesafetyofcustomersandpartnerslocatedintheWorldTradeCentercomplex,inthePentagon,andintheairlineindustry.ConcernaboutthepotentialthreatofcyberattacksagainstITinfrastructure.Concernforthesecurityacrossourinternationaloperations.

ThesearenoteverydayconcernsforaCEOandforthatreasontheyaresobering.Theyaregrounding.Timesliketheseforceyoutothinkdeeplyabouttheroleofleadership.

IftheeventsofSeptember11hadneverhappened,Iwouldhavecoveredmanytopicswithyoutonight.

Iwouldhavemadethecasethatthenexteconomicupturnwillbeenabledbyawholenewgenerationofinformationtechnology.

Iwouldhavetalkedabouthowthatnewwaveoftechnologywillempowercustomerstransforminghowwedobusiness,transforminghowwecreatevalue,andtransformingentireindustries.

AndIwouldhavespenttimetalkingabouttheresponsibilityofleadersinguidingaworldinwhichtechnologyanditsbenefitsareaccessiblebyall.

Iwouldhavetalkedaboutthefactthatifwedonottakeresponsibilityforclosingthegapbetweenthehavesandhavenots,betweenthetechnologyenabledandthetechnologydeprivedthatwecannot,infact,callourselvesleaders.

Increasingly,oursuccessasleadersisdefinedbyourabilitytoseehowourorganizationsfitintoamuchlargerecosystemofcausesandeffectshowthepushandtugofanactionononesideoftheglobecanpositively(ornegatively)affectfamilies,companies,nations,andentirepeoplesontheotherside.

AllofthesetopicsarestillworthyofafulleveningofdiscussionandwhileIstillholdallofthesethingstobetrue,Ithinkfortonight,weshouldfocusontheroleofleadership,particularlyinbusiness.Insomeways,September11marksthestartofaneweraofleadershiponeinwhichcorporationswillhavetotakeanevengreaterresponsibilityonaworldstage.

Businessleadersinthiscountryhaveadauntingtaskahead.ItgoesfarbeyondthephysicalrebuildingofNewYorkandWashington,D.C.Itgoesbeyondresurrectingthetowersthatsymbolizeeconomicstrengthandprosperity.Itgoesbeyondrefocusingourcompaniesandourteamsonforgingaheadwithbusiness,anditgoesbeyondreturningAmericatosomekindofnormalcy,inthefaceofactionsdesignedtocorruptanddestroyourwayoflife.

Butitsquitesimple:Asleaders,nowmorethaneverbefore,wehavearesponsibilitytoredefinetheroleofthecorporationonaworldstageandtoleverageourabilitytoimpactindividuals,companies,communities,nationsforthebetter.

Wemustremakeourbusinessestobefarmoreactivecorporatecitizenscreatorsnotonlyofshareownervalue,butalsoofsocialvalue,inwaysthataresystemic,andsustainable.

Itbecomesourjobtouseaprofitenginetoraisethecapabilities,extendthehopes,andextinguishdespairacrosstheglobe.

Wehaveachanceandanimperativetoimprovethechoices,andeconomiccondition,andsphereofopportunityforbillionsmorepeoplehereathomeandaroundtheglobe.Itsagreatermandateonethatourcustomersincreasinglydemandofus,onethatisdeservedbyeverycountryinwhichwedobusinessandone,Idarguemustbeundertakenbecauseitcanbeundertaken.

ThisisamandatethatstartedasaquietwhispermorethanadecadeagoandmorerecentlycouldbeheardmoreloudlyinSeattleandPragueandGenoa,inthevoicesofprotestorswhodeclarethatglobal

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companieshavenotliveduptotheirresponsibilities.

Whatisimportanthereisnottotakesidesintheglobalizationdebate,buttolookattheproblem,andworktowardarealsolution.

TheMandate

Astheworldmovestowardaknowledgeeconomythemandateforleadershipchanges.

Unlikeaworlddominatedsolelybymanufacturingprowessordistributionreach,oneinwhichsuccessisoftenaboutwringingcostoutofthesystemormaximizingasupplychainweveenteredadifferentworld.

Inaknowledgeeconomy,aneconomydrivenbyintellectualandhumancapitalinadditiontofinancialandphysicalcapital,thetransferofknowledge,andinformation,andknowhowtheexchangeofserviceswillbecomeanincreasinglyimportantdriver.Insuchaneconomy,partnershipandtrustandreliabilityandrespectbecomeimportant.Whichiswhy,inaneconomywhereintellectualcapitaliscurrency,corporatebehaviorbecomesascorecardbywhichyouarejudgedbyyourcustomers,youremployees,yourshareowners.

Thatscorecardwillofcourseincludeyourabilitytobeacostcompetitiveplayer,butequallyimportantonthescorecardwillbe:

YourintegrityandyourcharacterYourabilitytotransfervalueandknowhowintolocaleconomiesinwhichyoudobusinessYourtrackrecordasasociallyresponsiblecorporatecitizenYourabilitytosustainandnurturetruepartnershipsandecosystems,inwhichallpartiesgainbothsocialgoodandeconomicgain.

Thewinningcompaniesofthiscenturywillbethosewhoprovewiththeiractionsthattheycanbeprofitableandincreasesocialvaluescompaniesthatbothdowellanddogood.Somuchsoinfact,thatbusinessleaderswillnolongerviewdoingwellanddoinggoodasseparatepursuits,butasoneunifiedpursuit.

And,increasingly,shareownersandcustomersandpartnersandemployeesaregoingtovotewiththeirfeetrewardingthosecompaniesthatachievesocialchangethroughbusiness.Thecompaniesthatwillbeworthyoftheirinvestment,money,timeandenergywillbethosewithsimilarvaluesandthosethatcanmeetamuchhigherstandardofperformance.

Ishouldnotethishasnothingtodowithpoliticsorsubscribingtoaparticularideologyoreconomictheory.Thisissimplythenewrealityofbusinessonethatweshouldandmustembrace.

Thequestion,ofcourse,is,how?

Andsoletmespendamomenttomovethisdiscussionfromthetheoreticaltothepractical.Whetheryourbusiness,likeHPs,spanstheentireglobe,orjusttheeightblocksaroundthisbuilding,thesameprinciplesapply.

Therearefourkeyleadershipimperativesthatareatwork,andmustbemastered,forallofusasleaderstooperateandsucceedgoingforward.

Imperativenumberoneistheprincipleofleadershipandthemandatetobuildawinningculture.

Thisfirstleadershipimperativestartswithinthewallsofyourcompanyinthevisionyouset,andinthecultureyoubuild.

Evenasrecentlyastwoweeksago,inthebusinessworldwetalkedaboutcultureasaleverforchangeandameansofmotivatingemployeesand,certainly,thatsstilltrue.ButparticularlysinceSeptember11,culturehasalsocometomeansomethingelse:AccordingtoarecentWallStreetJournalarticleontheredefinitionoftheworkplaceinlightofrecentevents,"Thetragedybroughttheneedforsafety,security,belonging,andaffiliationintosharprelief."

Clearly,itsleadershipsresponsibilitytogiveemployeesspaceandsupporttorethinktheirprioritiesinthewakeofrecentevents.Butthearticlegoesontosaythatif"managedcorrectly,recenteventspresentanopportunitytostrengthenemployeessenseofaffiliationthroughacommonvision,acommonmission,acommonsenseofpurpose."

Inthiscontext,asleaders,wemustanswerthequestionforouremployees:inaworldwhereknowhowandinsightandintelligenceandinventivespiritarethekeystosuccess,whatrolewillourcompanyplayinfosteringitandwhatrolewillweplayinharnessingit?

Onceweanswerthis,wethenhavetofosteraculturethatcandeliveronthatvision.

Itsimportanttorememberthattopleaderscansetavision,setastrategy,setasystemofrewardsandmetricsthatencouragepeople,rewardpeople,trainpeoplebuttherestisultimatelyuptotheindividualsandteamsinourcompanies.Itisverymuchactsofindividuals,theeverydayactsofmany,thatmakethebiggestdifferenceintheoverallperformanceofacompany.

IthinkthatssomethingthatBillHewlettandDavePackardunderstoodwhentheystartedHPsixtytwoyearsago.BillandDavedidntcreateHPin1939tobuildanempireorafortune.ThesetwoyoungStanfordguyswith$538betweenthemsimplywantedtoinventwhattheycalledtheusefulandthesignificantusefulinpeopleslives,andcontributingtotheworldinasignificantway.

Andtheywantedtocreateameritocracywherepersonal,everydayactsofleadershipcounted.

Whichiswhytheyweredevoutlyegalitarianandprogressiveinthewaytheydesignedemployeeprogramssuchasemployeestockownershipallemployeeswouldbecomeleaders,inasense.Theyrewardedpeoplebasedonperformanceandcontribution,ratherthanonrankortitleorsizeoforganizationortimeinjob.

Today,youcanseethefoundationsofthatculturemagnifiedininitiativeslikeHPsWorldEInclusioneffort,designedtospreadthebenefitsofthedigitalworldintoareasthathavebeenexcludeduntilnowtonationsacrosstheglobe,totownsandvillagesandbusinesseseverywhere,intothelivesofbillionswhohaveuptonownothadthetoolstosharetheirinventionwiththerestoftheworld,andwhohaveeveryrighttoparticipateinaknowledgeeconomy.ItsnotaboutrecyclingPCsorimposingWesterntechnologyondevelopingnations.Itsinherentlyaboutcreating,fromthegroundup,locallysustainablesolutionsthatareculturallyrelevant.Itsaboutrethinkinghowtechnologycanempowerandsustainandliberate,ratherthanexcludeanderodeandrestrain.

Itsultimatelyabouttechnologyasmeans,notenditself.

Sothatsimperativenumberone.

Imperativenumbertwoisaboutleadershipandtheneedforsustainability.

Inthesechallengingeconomictimes,wearealltryingtoignitethegrowthenginesinsideourcompaniesandtohelpreignitetheeconomyasawhole.Mostofushavetakenthenecessarystepsto

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boostefficiency,eliminateredundancyandreducecosts.Butitsnotpossibletocostcutourwaytogrowth.Growthisdependentonnewrevenues.Andsothenextleadershipimperativeisfocusedoncreatingsustainabilitythroughthesimultaneouspursuitofgrowthopportunitiesinexistingbusinessesaswellasinwhollynewmarkets.Pursuinggrowthinexistingbusinessesmeansavoidingcomplacencyandpostponingshorttermgainsformediumtermrewards.

Butletmeunderscoretheimportanceofemergingmarketsandthedistinctivelydifferentapproachthatmustbetakenindiscoveringthem,nurturingthem,andgrowingthem.

Obviously,mostofthesemarketsarelocatedinthedevelopingworld.Thepotentialforgrowthintheemergingmarketeconomieshasneverbeengreater.Asanexample,recentOECDstatisticsshowthatspendingoninformationtechnologiesintheseeconomiesisgrowingattwicetherateoftheindustrializedworld,althoughoffalowerbase.Itillustratestheimportanceofthinkingaboutdevelopingmarketsasacentralpartofacompanysgrowthstrategy.

Andinthesedevelopingmarkets,sustainablesystemsaretheonlywayyoucanderivelongtermgrowth.

"Sustainable"inthatthesolutionsareeconomicallyviable,andcanremainsoforyearswithoutoutsideinterference."Sustainable"inthatthesolutionsdonotdegradethelocalenvironment."Sustainable"inthatthesolutionsrespectsocialandculturalmoresinfact,theyoptimize,celebrate,andrewardthem.

Inthesemarkets,itsespeciallytruethatitsnotjustwhatyoudobutalsothecharacterwithwhichyoudoit.

Wewilllosecustomers,shareowners,andultimatelyemployeesifwedonotdemonstrateleadershipanddevelopnewmetricsforgaugingourperformanceonaworldstage:

Arewemakingusefulandsignificantcontributionsthatareeconomicallyandculturallysustainable?Arewedoingeverythingwecantounlockthedoorstotheinformationeconomyinawaythat,again,isnotWesternimposed,UScentric,orhomogenous?

Thefactisweareinasingleglobalecosystem,wired,connected,overlappingbenefitingfromeachotherssuccesses,andsufferingfromeachotherslosses.September11thmadethisallthemorevividmorethan60countrieslostcitizensonthatday.

ThecollectivemomentofsilencehonoredaroundtheworldhereinAmerica,inMexico,inCanada,inEngland,inJapan,acrossthecontinentofAfrica.inthedeepestpartsofsmalltowns,onthestreetsofourbiggestcities.Thisgesturemadevisibletome,atleast,howdeeplyconnectedweare.

Complexitytheorytellsusthatimbalanceandasymmetryresolvesitselfintime,eitherthroughnegativeresolutionslikewar,ordisease,oreconomicbreakdown,orthroughpositiveresolutionsliketheremovalofbarriers,theopeningupofsystems,orthemovementofwealthandknowledgeandpersonalopportunityandfulfillmenttoamorebalancedgeographicdistribution.

Leadershipbothatthehighestlevelandatthepersonalleveliswhatcausesthependulumtoswinginonedirectionortheother.Thesystemneedstofindbalance.Humankindisthecatalystthatforcesthebalancetoswingonewayortheother.

Whichleadsustoimperativenumberthree.Thisimperativeisaboutleadershipanddiversity.

Ifwearetrulygoingtocontinuetoleadourcompaniesthroughperiodsofgrowth,andbroadenourroleasstewardsofanewglobaleconomythatnurtures(ratherthandestroys)everycultureinitspath,weneedtotakeanapproachthatembracesideasandapproacheswehavenomodelfor.Tobesuccessful,wemustharnessdiversityofthought.Yes,diversityofpeople,diversityofbackground,diversityofexperience,diversityofskills.Butmostimportant,diversityofideas.Diversityofinventiveness.

Ifwearedoingourjobascorporateleaders,wemustthinkmorethanaquarteroutbeyondthecurrentstockprice.Wherewillnewideascomefrom?Wherewillnewbusinessmodelscomefrom?Wherewilltalentcomefrom?Wherewillourcustomerscomefrom?

Werelivinginanerathat'sdefinedbythepowerofideas,thepowerofconnectionstoknowledge,toinformation.Smartpeopleresideeverywhereintheworldallkindsofpeopleandsmartpeoplebrimmingwithideasthathaveyettobeheard.

Thisisaboutanewdefinitionofdiversitythathastodowithmorethannationaloriginorraceorcreedithastodowithkeepingthemarketinmotionbyfeedingitnewmodels,newideas,newapproaches.

WeseethepowerofdiversityinthewakeoftheeventsofSeptember11ththediversityofthosewhowaitedhourstogiveblood,thediversityofthosewhohelped,thediversityreflectedintheculturesandreligionsthattookpartinthememorialserviceatYankeeStadium.Diversityinthosewhohavedonatedtheirtimetocourageouslylookforsurvivors.Thediversityofoutpouringfromvirtuallyeverynationonthisplanet.Ibringallofthisupnottobedramatic,buttosayifthisisthestrengthwecandrawintimeofcollectivecrisiswhatisthepowerwecouldharnessinaneffortofcollectiveaspirationandhope?

Whichbringsmetothefourthandfinalimperative:leadershipandcourage.

Inrecentyears,themarkethasplacedmoreemphasisonshorttermresultsorthepromiseofshorttermresultsmorethanthecreationofenduringvalue.

Aleadersjobcantfocussolelyonshorttermresults.Aleadermustfocusonthelongtermhealthofthefranchiseandthecreationofbusinessvalueforshareowners,customersandemployeesoveryearstocome.

Thismeans,asleaders,wemustbeboldinouractionsaheadofthemarket,usingthecourageofourconvictionsandourjudgment,experienceandinstinctsasourguide.

SinceweannouncedourmergerwithCompaqthreeweeksago,muchhasbeenwrittenaboutthecombination,muchofitfocusedonPCmarketconsolidationorcreatingscaletocutcosts.Butthosestories,frankly,missthemuchbiggerpoint.

StepsliketheoneMichaelCapellasandItooktwoweeksagoarebasedonasharedcommitmenttoleadinganddrivingtheindustrythroughitsnextinflectionpointtheacceleratingshifttowardmarketunifyingarchitecturesandapproaches.Ashiftthatservescustomersbetter,ashiftthatwillunleashtheinventiveenergiesofthisindustryonanewgenerationofproducts,applicationsandsolutions,intheenterprise,inthesmallandmediumbusiness,inthehome.

Andwhileperhapssomecriticsdonotyetseethefullbenefitofthemerger,theroleofleadershipissometimestotakeboldactionsthatdefyconventionalwisdom.

Idontmeantopainttopleadersassolelycharteredtomakesuchmoves.ButIdobelievethatcourageisrequiredofleaders.

Ithinkinthelasttwoweeks,wehavewitnessedactsofcourageonagrandscaleandataveryhumanscale.As46yearoldNewYorkerJimPesomensaid,"Thetoughestpartwaswatchingfiremenandthe

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courageousgobackintothatbuildingasitwascomingdown.Thoseindividuals,Itellyou,havecourageknowingwhattheyknow."

Anditwasactsofcouragewesawoverandoveragaininthenamedheroes,likeMarkBinghamandTomBurnettonflight93,butalsothosewhowereheroeslikeawomanwhoguidedEduardoRiveradown70flightsofstairs.Omarsblind,andwillneverseethewomanwhosavedhislife,butwillbeforeverthankful.

Asbusinessleaders,aswearefacedwithquestionsoflifeanddeathratherthanhowmuchourstockisworth,thesignificanceofourbusinesscontributiontotheworldmaybeincreased.Andthatisagoodthing.

Illendbytellingastory.

Therewasonceacivilizationthatwasthegreatestintheworld.

Itwasabletocreateacontinentalsuperstatethatstretchedfromoceantoocean,andfromnorthernclimestotropicsanddeserts.Withinitsdominionlivedhundredsofmillionsofpeople,ofdifferentcreedsandethnicorigins.

Oneofitslanguagesbecametheuniversallanguageofmuchoftheworld,thebridgebetweenthepeoplesofahundredlands.Itsarmiesweremadeupofpeopleofmanynationalities,anditsmilitaryprotectionallowedadegreeofpeaceandprosperitythathadneverbeenknown.ThereachofthiscivilizationscommerceextendedfromLatinAmericatoChina,andeverywhereinbetween.

Andthiscivilizationwasdrivenmorethananything,byinvention.Itsarchitectsdesignedbuildingsthatdefiedgravity.Itsmathematicianscreatedthealgebraandalgorithmsthatwouldenablethebuildingofcomputers,andthecreationofencryption.Itsdoctorsexaminedthehumanbody,andfoundnewcuresfordisease.Itsastronomerslookedintotheheavens,namedthestars,andpavedthewayforspacetravelandexploration.

Itswriterscreatedthousandsofstories.Storiesofcourage,romanceandmagic.Itspoetswroteoflove,whenothersbeforethemweretoosteepedinfeartothinkofsuchthings.

Whenothernationswereafraidofideas,thiscivilizationthrivedonthem,andkeptthemalive.Whencensorsthreatenedtowipeoutknowledgefrompastcivilizations,thiscivilizationkepttheknowledgealive,andpasseditontoothers.

WhilemodernWesterncivilizationsharesmanyofthesetraits,thecivilizationImtalkingaboutwastheIslamicworldfromtheyear800to1600,whichincludedtheOttomanEmpireandthecourtsofBaghdad,DamascusandCairo,andenlightenedrulerslikeSuleimantheMagnificent.

Althoughweareoftenunawareofourindebtednesstothisothercivilization,itsgiftsareverymuchapartofourheritage.ThetechnologyindustrywouldnotexistwithoutthecontributionsofArabmathematicians.SufipoetphilosopherslikeRumichallengedournotionsofselfandtruth.LeaderslikeSuleimancontributedtoournotionsoftoleranceandcivicleadership.

Andperhapswecanlearnalessonfromhisexample:Itwasleadershipbasedonmeritocracy,notinheritance.ItwasleadershipthatharnessedthefullcapabilitiesofaverydiversepopulationthatincludedChristianity,Islamic,andJewishtraditions.

Thiskindofenlightenedleadershipleadershipthatnurturedculture,sustainability,diversityandcourageledto800yearsofinventionandprosperity.

Indarkandserioustimeslikethis,wemustaffirmourcommitmenttobuildingsocietiesandinstitutionsthataspiretothiskindofgreatness.Morethanever,wemustfocusontheimportanceofleadershipboldactsofleadershipanddecidedlypersonalactsofleadership.

Withthat,Idliketoopenuptheconversationandseewhatwe,collectively,believeabouttheroleofleadership.

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