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00:00This is my kitchen table and also my filing system over much of the past three decades. I've been an investor the highest quality of mankind I've often thought was private equity. And then I started interviewing. I watch her interviews because I know how to do. What I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said to 50. I said fine I didn't negotiate with him. I did no due diligence. I have something I'd like to say on how they stay there. How does it feel to get up in the morning and know that three hundred and thirty million Americans want to know the state of your health at that . One of the most powerful women in the business world today is Ruth Porat . She started as a investment banker at Morgan Stanley rose up to be the CFO of Morgan Stanley and then was recruited away to be the CFO of Google. Now the CFO of Alphabet in that role she has enormous influence at that company and has done a terrific job at making certain that their balance sheet works well and that they really are much better organized in the financial sense. I have no doubt that she's going to be a powered alpha for quite some time unless the next president in state says I really would like her to be secretary of Treasury. She'd be a terrific candidate for that position. So during this period of time Google has done quite well alphabets done quite well. Your stock is up more than 20 percent this year. And I should say from the time you became the CFO the stock goes up about over 200 percent and the market capsule over 200 percent. So done quite well under your leadership. But I'm curious are more people looking at doing searches now during this carbon 19 period of time than ever before. Or is people not spending as much time searching. I know people are spending a lot of time searching. We have trillions of searches every year pre and post cove. It's really the nature of searches the change. And so early in the crisis people really migrated to shifting for information about the disease. What they needed to know is all information about cove it. You then saw people shift to OK how am I going to live my life in a cove and world. And so more things like more how to searches. What do you do. How do I cook what I do. And meditation wellness. It was really moving there. Now you're seeing people moving back into more commercial activities . And I think one of the big surges that we saw was how can I how can I help in my community. How can I help others. And it's always really quite inspiring to see through search how people are feeling about the world. So most of your employees are still working remotely is that correct. So we moved everybody to remote work from home all hundred and twenty thousand of us . But as countries are opening up we're starting to move people back in. So for example in Taiwan we actually are about 70 percent in places in Europe. We print bringing some people back . But fundamentally we moved everybody to work from home. When you started working remotely did you ever worry it would be a problem. Because you have all these people but you're technically very savvy. So when we started the move to work from home it did seem daunting. I'm responsible for our crisis response and put together a really strong governance around how do we get people to move from home with a global team and then a regional team. And we were in sync daily that worked really well. What we were most concerned about was what would be the impact on productivity and wellness . Our chief medical officer very early in the crisis said that 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 really important . The other thing is Google is really about our people and the ability to deliver for users and communities because of our compute capacity . And one of the things we didn't have to worry about was our ability to to really deal with the surge in online activity . And that was because of all of the investments over many years and all of the testing for what could happen in its sort of crisis scenario. And I think it's an important point because you can't solve the risk management issue in the middle of a crisis. You obviously need to solve it ahead of time. And that worked. So many companies are saying well now that I've learned that my people can work from home maybe I don't need all these people either in the office or I don't need all these people . Is that your view. You don't need all the people you have or you may not need them all in the office. We believe that when people are together that's a critical element for innovation . Collaboration helps support innovation. It's collaboration within teams and it's collaboration across teams. It's collaboration and it's serendipity. So we do look forward to having people back in the office . What we're looking at is the productivity lift you get if people have the ability to work from home some days be in the office in particular when the rest of their team or more broadly teams are in the office. And if you can save people commute time you have better access to talent because you're solving what people want in their personal life. It's actually going to result in in a better outcome. What that means for real estate we're still figuring out early on Google was well known for among other things. You've got free food. What about if you're working at home. You give them free food showing up by delivery or somehow or how do they compensate for that. So we're not doing that . But you know a lot of people focus on food when really what we are trying to create have been trying to create. Is this fun quirky magical campus. And so it's about more than just the free food. It's the experience on campus. So what we did when we moved everybody to home is we moved a lot of these sort of connecting the community to a virtual delivery. And so for food as an example you can do a one on one session with a chef. You can do a cooking class. We took our fitness classes and moved them to virtual. Classes and even some sort of goofy Google style ones like yoga with your dog. What have you learned about yourself during this period of time. One of the things that was actually gratifying if I can broaden that question is what I saw at Google and what I saw about my colleagues. And this has obviously been an extraordinary stressful time. We feel this responsibility because so many people are counting on us for quality information for the ability to stay connected. And what I saw was people really step up in a meaningful way. And that was inspiring. It's 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're now back with us for at least a limited period of time. And that's been remarkable in my head . I thoroughly enjoyed that. So some people say that the Googles of the world Google Facebook Microsoft Apple Amazon are too powerful. They have so much power in our economy that it's not healthy. And you're going to congressional hearings recently where your CEO testified. What is your response to the view that the technology companies are becoming so dominant in our economy that it's not healthy. We are very mindful of the fact that with the scale of these companies comes scrutiny and that it's incumbent on us to engage with regulators and help them understand what is it that we're doing that is of benefit. How how are we providing better services at lower costs which is really indicative of the competitive nature of the world in which we operate. We've got intense competition within the US intense competitors outside of the US. And I think this culvert experience many companies and individuals would not have been able to operate the way they did without the support and benefit from technology. But it's it's a fair question and we're engaged constructively here and around the globe with regulators on it. You have more than 100 billion dollars of cash on your balance sheet which 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. So then the second quarter we actually had a hundred twenty billion. But who's counting. So your ear right . When I got to Google there had been a longstanding view that it was helpful to have cash because of the optionality it provided . And I think the question I posed was how much is too much and how much is too little. And can we actually try and dimension that analytically and put together the the data that led to a conversation about beginning a share repurchase program. And it started small but we've now increased it five times in the last number of years. The last one we just did in the second quarter is twenty eight billion dollar authorization. And I'm you know so it's been a journey and we've we've been increasing the return of capital . I spent a big chunk of my career covering firms like Carlyle private equity firms. So I do appreciate what an efficient capital structure looks like. And this is really trying to get the balance. Was it harder to break into the technology world as a woman or is it harder to break into the financial world as a woman. I think that they're actually pretty similar. The difference is there's it's a more collaborative impermanence in tech. I would say Wall Street can be pretty pretty rough . Let's talk about your background for a moment how you came to be the CFO of Google Alphabet and before that at Morgan Stanley so where did you grow up. So I was born in England mostly grew up in Silicon Valley. My father was a Holocaust survivor a Holocaust refugee. He escaped from Vienna right after Kristallnacht when when he was a teenager. He was 16. He had no high school education. He had no college education obviously . He escaped to Palestine and as soon as he could. He enlisted in the British Army Fort under Montgomery. He was in the two battles of elderly man. And his view was that the only way to find peace and a peaceful place was to have a skill that people needed. So he decided to teach himself physics while in the army and used to always tell us as kids that his fellow soldiers Woods would tease him and say you will die before you can ever use this physics. And his answer was always if I die I want to die an educated man. And after the war he was one of the lucky ones. He was given a place at the University of Manchester. He got a master's degree HD. That's where I was born. And then I was given a position at Harvard. The only place they ever worked was Harvard and Stanford. And so we moved eventually to Silicon Valley and that's where I grew up. So you went to Stanford undergrad. I did. And did you major in finance. I majored in economics and international relations and thought I would go off and be a lawyer just like you. OK. Well you were smart not to do that but but you did go to Wharton MBA School right after you got MBA from working. Right. And you went to Wall Street. Well I went I actually went from Stanford to the London School of Economics to Wharton. I assumed I would be a consultant. When I started in business school I was convinced that what I wanted to do was work with companies and help them understand their problems. But then I took a fascinating course and a great teacher and he opened my eyes to this thing called the Wall Street Mergers and acquisitions. And I got excited . So I went from completely convinced I was doing one thing to completely convinced the only thing I wanted to do was mergers . When you went to to me Morgan Stanley was it 50 percent women . Far from it. When I started at Morgan Stanley was nineteen eighty seven. And so it was sort of the Stone Age for for any sort of sense of what was the role of women in banking. In fact I think that general attitude was that those of us who were there would get married have kids and leave. We didn't have the stamina. It was just a question of time. And I loved Morgan Stanley. I think Morgan Stanley was the best of the best. But 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 said Ruth may come back after the first child but there's no way she'll come back after the second child. Unfortunately the client liked me a lot more than he liked this partner and basically told him he was an idiot. But that really made an impression on me. And the thing that was inspiring and helpful and critical in my career is there were so many extraordinary men who really bet on me helped open doors. You know I didn't know at the time those were sponsors but that's what they were. You became the CFO and at some point you're one of the most important people Morgan Stanley and the U.S. government calls up and says why don't you come and work at the Treasury Department. A very senior position. Did you seriously consider doing that . Well one of the most meaningful parts of my career was in 0 8 when 2008 crisis when Secretary Paulson asked me to lead a team to help him with the housing the booming health housing crisis . And I spent the entire period working on Fannie Mae and Freddie Mac . And then that evolved into work on AIG. And I thought it was extraordinary to be able to use skills I developed over decades at Morgan Stanley for something so important for the country . So that to me remains one of the most meaningful during that as an employee of my watch as doing that. Morgan Stanley also went through a crisis during that period of time I'm sure you remember it where Morgan Stanley was close to maybe not being able to survive. And then a Japanese investor said we'll put in some money. It turned out that money was at three times the stock price that you were trading at and people weren't sure whether the Japanese company Mitsubishi would show up. Were you ever in doubt that Mitsubishi would show up with that money . That was a terrifying period of time that this series of events was. There was the Lehman Brothers famous weekend followed by a call I got from the Federal Reserve saying we had worked on we collectively had worked on the wrong thing. We needed to focus on AIG and asked me to get back down to the Federal Reserve . That Sunday evening . They said AIG would be out of money by Wednesday in fact it was Tuesday when they were out of money. And that's the point at which Morgan Stanley was running into its own very severe liquidity crisis. Morgan Stanley obviously prospered through the period of time they survived. And you did quite well. And then someday somebody called you up. I don't know who it was . Was that a headhunter. Was it somebody from Google saying we'd like you to reconsider to be the CFO. Were you surprised at that offer because you were a Wall Street person you weren't a technology person. So actually it was a very different path to the question. I was on the Stanford board and had the opportunity to spend some time with Bill Campbell who was an iconic coach to so many people to Larry to Sergei to Eric Schmidt to Steve Jobs. And I left the board meeting and went to his home and sat down with him to talk about life generally . And he started probing kind of what next. What would I want to do. And my comment to him was I didn't know at some point I would want another chapter. But one thing I knew for certain is I would not leave Morgan Stanley as CFO to be a CFO anywhere else. And for two hours he kept kind of coming back to that strong assertion. And at the end of two hours he said OK. So you wouldn't leave to be a CFO anywhere else. Correct. And I'm adamant. Correct. You said that I have the perfect job. You should be the CFO of Google. And of course the two of us burst into laughter. And I said well that what I would do. And. And I didn't believe it. I left his home and didn't actually believe it was real or that it would happen. And within a couple hours he called and said go over to Larry Page's house and spend some time with him see if this works. Right. She went over to see Larry Page and he said guess what. I just heard about you and I want you to be the CFO. So I had known him. I worked on the Google IPO and had had different interactions through the Stanford board. We spent two hours . It was this broad conversation fascinating as Larry Page always is. I left again not actually believing that it would happen . And quickly everything came together. So you took the position but now you're gonna be breaking into a another world where women are not that prominent. Was it harder to break into the technology world as a woman or is it harder to break into the financial world as a woman. Well when I broke into the financial world I was a junior. And I think it's harder when you're junior than when you're coming in as somebody who's credentialed. But if the question more broadly is which world is tougher Wall Street or tech you know both have evolved meaningfully since those days of the boys club on Wall Street that were so painful. And I think there is a much greater awareness that it's not just the right thing to do to have diversity in senior ranks throughout an organization but it leads to better outcomes. And so I think that they're actually pretty similar. The difference is there's it's a more collaborative empowerment in tech. I would say Wall Street can be pretty pretty rough but the more testosterone filled place is Wall Street or Silicon Valley . There's a lot of testosterone. There's enough to go around. So when you get there you're a fairly button down CFO. Morgan Stanley you're very precise and so forth. Google is probably a less precise place when you get there. Right. That's they're making so much money off the worry about every little dollar I guess. So did you say we got to change things in that people say we don't want to change we're doing well or that people say yes we want to change. So throughout my career my view has been if you actually anchor your points in data it becomes very easy to engage people in what is the issue. And what's the proper path forward. And one of the extraordinary things that Google is we have very smart and very inquisitive people. So as I laid out whatever issue it is anchored in data it engaged the conversation. And so I actually didn't find it to be discordant . In fact I was really impressed with the view of. Yes throw in the new idea. Well let us understand what and why. And it's you know it's been a journey. You've seemed to have it also . What's the secret to having it all. To me the most important thing is to find a mix in life that works for you . So Alphabet is the parent company You're the CFO of that . You're also the CFO of Google. Google was the search engine and that is still massively profitable by anybody's standard. I assume General if you like the word massive but. But it's profitable right. It's done. All right. What about cloud computing. You're number three in that business. But catching up to I guess the number one is Amazon. Number two is Microsoft is an important growth engine as well. You think it's a very important one. It's a sizable market. We think in very very early innings the opportunity for businesses to migrate to the cloud provides them with extraordinary added capabilities. And they're looking to us whether it's for security or data analytics or A.I. that's what we're able to do working with with customers. And you've really seen the important migration to to the cloud. So we're investing meaningfully in that. We do see it as a sizable opportunity. And one of your areas of focus at Google and Alphabet is health care and health related. Why is that such an important focus of the founders and you in terms of healthcare. Why is that so important to you. Well 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've had breast cancer twice. I've had gone through chemo twice radiation more surgery than than one could imagine. And I view myself as one of the really lucky ones. I was here in New York City when I was first diagnosed. I was treated at Memorial Sloan Kettering. I had the best care. And here I am healthy as healthy as I've ever been . Not everybody gets that that break and that a year or two ago I remember when our A.I. engineers had a breakthrough in early stage detection of metastatic breast cancer with a which struck me as precisely the kind of thing that is transformative. And there was so much debate in the world about whether a ISE a positive or not. And I wanted to make sure I got an objective non tech view of this. So I called my oncologist to ask whether I was reading this the right way. And it really had the impact I expected. And his answer was you cannot democratize healthcare without A.I. . So we look at this as this opportunity to democratize healthcare to provide service to identify diseases early or to do things like telehealth that enables everybody to get the kind of care that I was able to have. That's why I'm passionate about it . Now somebody is watching this man or woman says sorry. She's a leader. She must have some qualities that I would like to know about more . What are the qualities that you think are important to be a leader. So I think one of them is it's very important to be able to make clear decisions anchored in data . It's the way you can build support for the ideas. It's the way you can know where to double down on great opportunities for the long term where you should be pulling back. 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 that the other is making it really clear that you want diverse views. You build a diverse team and that you're open to not only open really expect diverse views and debate. You know to me it's often been asked how do I think about rising stars. And my answer is I want someone who's in my face. I want somebody who challenges me . And I think creating an environment where there's that open discussion is really is really important. So some people say it's very difficult for women to have it all but you seem to have it also. What's the secret to having it all. And is it is harder than people would think or is it easier than people think . I think it depends on how you define having it all. I've often been asked about work life balance. I think that is a horrible term and everybody should banish it from their vocabulary because getting balance just the physics of it are hard. To me the most important thing is to find a mix in life that works for you. And so for me it's been an incredible career. I get a lot of joy and energy out of what I'm doing . And then I have an amazing family. I've been married to an extraordinary man for ever. We have three wonderful kids. And for some people it may not be kids but it's got to be something other than work. And it's finding a mix. So sometimes you may be more heavily focused on work. Other times more heavily focused on family. And that mix changes throughout your life . To me that's been the most important element of it. And I would say I get very concerned when I hear women have a plan a plan on when you're going to sequence each step along the way. I would say. Particular when I had cancer and didn't actually know what what's going to come I was able to look back on my life and say I have no regrets .

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The David Rubenstein Show: Alphabet CFO Ruth Porat

Ruth Porat, Alphabet Inc. chief financial officer, talks about having most employees working at home, breaking through the glass ceiling on Wall Street, surviving cancer twice, and the importance of finding the right work-life balance. She appears on the latest episode of "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded on Aug. 31. (Source: Bloomberg)

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