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Intuit: Brad Smith
Wisdom From The Top with Guy Raz
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This interview of Wisdom from the top was recorded in 2019.
From luminary built up productions and NPR,
it's wisdom from the top.
The stories of crisis, failure, turnaround, and triumph
from some of the greatest leaders in the world.
I'm Guy Ros and on the show today, the story of Brad Smith
and into it.
I've always had a signature at the end of every email,
which is work hard, be kind, take pride.
And I've always encouraged our team to never
mistake kindness for weakness.
So I may not be someone that has liked universally,
but I do hope I am someone that people would say
was always kind.
How Brad Smith reinvented into it into a high powered,
cloud based platform and reignited a startup culture
in the decades old software company.
So a few years ago, you might have seen an article on Fortune
Magazine with the headline, why isn't into it dead?
Good question, actually, because software companies
don't normally last that long.
Let alone four decades like into it has.
In fact, since 2008, the company's stock price alone
has gone up more than 1,000 percent.
And a big reason for that is Brad Smith.
He led into it from 2008 to 2018,
through one of the company's biggest transformations
into an open cloud based platform.
And he did it by changing into it into what he calls
a 36 year old startup, creating a startup culture in a company
with 9,000 employees and offices around the world.
And as you'll hear, Brad was partly inspired by reading about
and learning from other Silicon Valley greats, like Steve Jobs
and Sergei Bryn.
Brad actually grew up far away from Silicon Valley
in a small town in West Virginia.
It's called Canova.
And as a kid, it was a pretty idyllic place to be.
I felt like I didn't want for anything.
We had a great childhood.
We played outside.
We had lots of friends in the neighborhood.
We had a wonderful school.
We ended up with a great sports program that won 10 out of 20
state championships in a 20 year period.
And I felt like I had just a loving family.
When I looked back in hindsight,
I realized relative to other things I've been exposed to.
We may not have had as much as others.
But we certainly didn't know that,
and we didn't spend time thinking about it.
Tell me about your parents.
What did they do?
My mother and father are my greatest role models.
My dad worked for Nestle Foods for 26 years.
He went on to be the mayor of our hometown.
And in his second term, unfortunately,
passed away of a heart attack at the age of 58.
My mom still lives in Canova, West Virginia,
as do my two brothers.
My mom was a homemaker and a wonderful mother.
And she literally took care of all three boys
while my dad traveled Monday through Friday out of town.
And between the two of them, they said the example
that I hope the one day reached.
I'm during the time that your dad was mayor of Canova.
I imagine you saw him interact with the community a lot.
Give lots of speeches and stuff.
Did you, I mean, for you embarrassed,
did you, or did you feel like a sense of pride
when you would watch him speak?
I did, Phil, a sense of pride.
My father was an amazing man.
He was a self made man.
He didn't get the chance to finish high school.
He and my mother had the gift of my older brother
when they were seniors.
He did go ahead and get his GED.
And then he was able to rise from that opportunity
and have a stellar career at Nestle.
And then when he was elected mayor,
it was a significant event for our family.
And for our town, he helped pull the town out of a pretty
tough situation and turn it into a prosperous next chapter.
But I was home one time watching him present
and over a July 4th holiday.
He was making a speech and there were a lot of citizens there
and they were in their folding chairs.
And he used the word, ain't, probably a dozen times.
And so I went up to him afterwards and I said,
Dad, do you mind if I give you some feedback?
And he said certainly.
And I asked him why he would use that kind of grammar
when he would correct me and my brothers at the dinner table.
And he smiled at me and he said,
son, this is who I am.
And if you look at those citizens out there,
many of them were just like me.
And perhaps if they see the mayor able to be a mayor
and still use the word ain't,
one of them may dream of being the mayor as well.
And then he looked me in the eye and he said never forget,
people prefer their leaders to be authentic
and to be vulnerable.
Because that makes leadership more attainable for the rest of us.
And I took that lesson through the rest of my career.
So he was not an educated man,
but obviously an intelligent guy.
And his feeling was if you're going to be a leader,
you've got to meet people, you know,
you've got to meet people at a level where they can relate to you
and they can feel comfortable around you.
Yes, he used to always tell me to put a chink in your own armor
that people prefer vulnerability,
that we all look in the mirror and we see our own insecurities
and we dot ourselves.
But if we see someone else is able to do something
and they may have a chink in their armor
then perhaps we can do the same thing.
And so he believed you inspired others through humility
Now, what were you like as a student?
Were you a pretty good student?
Was it a school pretty easy for you?
Well, that's a two chapter story.
Up till the fourth grade, I think I enjoyed playing outside a lot
more than I did studying.
And then I was in a spelling bee with a young girl
that I had a crush on and the fourth grade.
And she beat me in the spelling bee.
The next day she passed me a note and said,
you can't be my boyfriend because you're stupid.
And I went home that, yes.
I went home that night and I can guarantee you a guy
that my IQ didn't go up but my work ethic did.
And from that moment on, I really decided to start studying
for the midterm the second day of the semester.
And that really helped me academically
through the rest of my high school and then on to West Point
into Marshall University.
Now, you get into West Point which is really a hard school
to get into and you last, I guess, a semester at the US military academy.
Well, it was one of the greatest moments of my life
both being appointed to West Point and also the experience
when I was there.
But I also realized when I was there that I had a girlfriend back home.
I had a family back home.
I was pretty homesick.
I'd never left that small town before.
And I realized that I was probably more of a lover
than a fighter.
And so I resigned and went back home to Marshall
where my older brother graduated.
And I really didn't look back.
But at the end of the day, it was an 18 year old making decisions
based upon what his emotions felt at the time
as opposed to thinking about the future.
But I felt like it was a greatest experience.
I had the chance to go through and it's helped me
through the rest of my life.
But at that time, did you feel, I don't know,
like a, I hope it doesn't sound too harsh,
but like a little bit of a sense of failure.
I mean, there must have been a really big deal
that you got into West Point and representing your family,
your community, and then you're back after a semester.
I did feel like a failure.
When I left, it was a big deal to the town that I got
and appointed to West Point.
It was a big deal to my father and my grandfather.
Obviously, my mother and everyone else.
And when I did resign and come home, I had placed well academically.
I was in the top five percent.
So I had proven to myself that it wasn't an inability to compete.
It was more of what I felt like I needed to do with the rest of my life.
But to be frank with you, there was a period of time
where I looked back in those days.
And I really worried about whether I'd made the right decision.
And it wasn't till later in life that I realized
that the path I'd taken was the right one for me.
What did you think that you wanted to do with your life
when you got back to West Virginian
and enrolled at Marshall University?
I was still searching at that point.
I had grown up with two dreams.
One was to be a journalist and the other one was to be a Marine biologist.
And it wasn't until I graduated and I had two job offers coming out of Marshall
that I had to decide what my path would be.
And that's where my father's advice really helped me.
What were the offers?
Well, two offers, one was from the Harold Dispatch
to be working with the newspaper and the other one was joined Pepsi
and joined their management training program.
And I sat with my dad and I said, I really don't know what to do.
Obviously, I've always wanted to be a writer and a journalist.
And my dad said, well, I'll give you three points to consider.
The first choose the thing that makes your heart beat the fastest.
The second is working on an organization that will surround you with people smarter than you,
so you will constantly learn.
And the third is don't take the job based upon the payer of the title,
because those will change every time.
And you would think that I would have gone with the newspaper
because I wanted to be a journalist, but I sat back and I thought about it.
And what really hit me, Guy, was I reflected back on my time in Marshall Arts
when I had begun at the age of 14.
And by the age of 18, I had achieved a black belt.
But halfway up, the belt rank, you become a student instructor.
And I realized, as a student instructor, I got more joy out of watching my students advance.
Then I did focusing on my own skills.
And so ultimately, out of sighted, I wanted to be someone who helped inspire the greatness and others.
And I went with Pepsi and the rest was history.
So you get a job after college with Pepsi.
And was that in West Virginia?
It was not. They hired me off of the campus at Marshall.
And my first sight was Indianapolis, Indiana.
And then in three months, they moved me up to Kalamazoo, Michigan.
And what did you do for Pepsi?
I was hired to be a part of a management training program.
And my first job was to work with six teamster drivers who delivered soft drinks to the supermarkets
and the convenient stores every morning.
And I was to work with them to help them get the display set up to make sure we had
in store promotions.
And to basically as one of my bosses told me to do one better than my number one competitor, which was
So if Coke had one display and a 711 store, my job was to have two.
And that was the opportunity that I started with right out of college.
So you were like in your early 20s.
And presumably you're in charge of a group of teamsters, right?
And I'm just curious, like, what did they think about you?
Did they think you were like some, you know,
snooty college kid?
Or, I mean, did the haze you?
Was it, did you find it challenging to manage
probably guys who were older than you and tougher than you?
Yes, all the above.
But this is where my father's lessons, once again, came to Roost for me.
My dad did something as the mayor that was really unusual.
He rode the sanitation routes every Tuesday with those who picked up the trash in the neighborhoods.
And I asked him once why he did that.
And he said, son, you'll never get to know your people better than if you're
ride for eight hours in the cab of a truck with him.
And you'll never get to know the city better until you go down the alleys.
And you see actually what the city is made of.
And so when I got to Pepsi, the first thing I did is I decided I was going to ride the
routes with my six drivers.
And if it was snowing and they needed help unloading cases in the snow, I would do that.
And two things happened. I got to know my team better than most.
And the second is they never forgot that I was there to help them.
And so in every contest, they rose to the occasion.
And they helped me win and that helped my career go forward.
So yes, they were bigger than me, tougher than me,
older than me, certainly more experienced than me.
But they adopted me because I was willing to humble myself and to work with them
and try to help them do their job.
All right. So you're at Pepsi.
And did you sort of see Pepsi as kind of the place where you like your dad was
and Nestle for, I guess, his whole career.
Did you see Pepsi as your home?
Did you think, all right, this is where I'm going to be?
I did. I love Pepsi.
It was an incredible company, very, very proud of the products, very proud of the culture
and they invested in the people.
And they paid for my master's degree at night at Aquinas College.
And I thought I would be there the rest of my career.
So what happened?
I was recruited by a competitor who offered me an opportunity to be the general manager
of the seven up company of Aquinas at the age of 27.
And that was something that would not have happened until my mid 30s at best at Pepsi.
And they were offering me much higher pay.
And so despite what my father had told me about never take a job for the title or the money,
I decided to say goodbye to Pepsi and to join that next opportunity.
And what was that opportunity?
It was to be the general manager of the seven up company of Aquinas Ohio
and represent those soft drinks that were not bottled by Pepsi or Coke.
So when you left Pepsi to go to seven up, were they like,
you betrayed us?
What are you doing?
They had invested a lot in me.
And obviously, they were disappointed in my decision.
And they tried to encourage me to think more strategically about my career.
But at that moment, I saw an opportunity to take on a broader responsibility.
And quite frankly, it was one of the worst career decisions I've made.
Because I violated the principal, my father said,
don't take a job for the money or for the title and at the end of the day.
I stayed in the company just about two years.
And what I recognized was most of what I was asked to do
is to implement the things that Pepsi had implemented three years earlier.
And we were always in ketchup mode.
And when I looked around, there were really good harbourking people.
But they weren't on the leading edge of the next chapter.
They were constantly trying to play ketchup.
And so I felt like that I was not in a place where I was learning and growing.
And I certainly wasn't in a place where I was helping advance their company.
And so I needed to step away.
So you spent two years of seven up kind of regretting the decision to go there.
Well, I spent two years seven up, trying my best to figure out how to catch us up
so that we could play offense and not defense.
And then at the end of those two years, I realized
that I wouldn't be the right person for that company.
And I think they probably would look at me and say, hey,
we're probably going to need to get somebody else in here as well.
So what did you do?
So a Pepsi mentor had left the soft drink industry and had gone into the direct
mall marketing business. And this was before the internet when you used big data to
basically target messages through solo mail through the US Mail.
Sure. And so I followed my mentor and went to a company called Advow.
And first started out as the regional sales manager in the Midwest in Cleveland.
And then from there, it was asked to come to Connecticut and be the director of marketing
for the flagship product. And then ultimately ended up as the senior vice president of field marketing.
Wow. So you are a young man.
You're like writing like this pretty impressive corporate track.
You're at this direct marketing company.
And what was the next step for you?
The next step for me was this was in the dot com era.
I was excited by big data and using it to target through solo mail.
But I got a phone call from a recruiter asked me if I wanted to speak to ADP,
the payroll processing company. Sure.
That used technology and use data to basically help people be more effective in their
day to day jobs. So I was recruited by ADP and I joined them to become the head of marketing
of their small business division. And where was that?
That was in New Jersey, basking Ridge, New Jersey.
So you moved to New Jersey. At this point, were you, did you, were you married?
Did you have a family?
Yes. I had gotten married when I was in Cleveland, Ohio. I had a blind date.
And the general counsel, the seven up company of acronym Gondolol School with who is now my wife.
I met her on a blind date. I was blown away, fell in love with her at the very first time I saw her.
And we ended up getting married and she went with me to Connecticut.
And when we were in Connecticut for the direct moment of marketing business, we had our first
daughter, Peyton. And then when we moved to ADP in New Jersey, we had our second daughter, Devon.
See, this is the incident to me. I'm really interested in this idea of luck and chance.
And you had mentioned that going to seven up was a mistake.
But had you not done that? You would never have met your wife.
That's correct. And you know, when you look at it with a review mirror, you realize that your life
is only where you are today because of the choices you made then.
But when I step back and I try to teach the lessons I've learned in terms of decisions I've made,
I try to go back to the principles that I use. And when I see a decision that didn't play out
the way I thought it would, I try to see whether or not I'd hear to this principles.
And that particular case, the mistake I made,
was I chose a job based upon the title and the money, not based upon whether it made my heart
beat fast or I was surrounded in a franchise with people that were much more further along the path
than me. But to your point, if I hadn't made that choice, I wouldn't be where I am.
Right. I mean, you could make the argument that you had to make that mistake.
Like, you couldn't learn that lesson without having made that mistake.
So true. And I've made so many more sense and thank goodness that you learn from your
scar tissues and you can get up and dust yourself off because that really does make you who you are.
I'm just curious. Do you believe in this idea that things happen for a reason that they're meant
to happen? You know, I'm a little light forest gum. I think some things are meant to happen.
And I think in other situations, we're kind of blowing along like that feather.
And life kind of takes us where we're going to go. And at the end of the day, we learn from
those experiences. So I think it's a mix of both. Stay with us. We're going to take a quick break.
I'm Guy Ros and you're listening to wisdom from the top. This message comes from NPR
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Welcome back to wisdom from the top. I'm Guy Ros.
All right. So you're at ADP in New Jersey. You're married. You have a second kid.
As sounds like a great gig. And then I guess you run into some hurdles. What happened?
Well, so my wife and my two daughters and I did enjoy a wonderful time in New Jersey. And then
the company decided to launch the first internet payroll product. And they tapped me to go down
to Atlanta Georgia to help start this team. They asked me to get away from the mother ship and
basically adopt all the Silicon Valley techniques. So we hung a pirate flag. I'd read Steve Jobs book.
It was better to be a pirate than to serve in the Navy. And our team worked really hard and we
created this internet payroll product the first of its kind. And then I also went up and convinced
the board to give us $2,20 million investments, $40 million in total. To allow us to basically
cut exclusive deals with the two leading internet portals at the time. And my hypothesis was we could
sell more internet payroll through the internet than through a direct sales force. When you're
later we had sold 15 units at an average selling price of $1,800. And when you do the math,
that is much less than $40 million. And I had to go present to the board. And basically say to the
board, look, we made a mistake and I was wrong. And so I called on the way to that board presentation
and asked my dad, why do I do? I'm pretty sure I'm going to be fired. And my dad said, well,
I want you to stand up in front of that room and I want you to basically say three things.
Here's what I thought. Here's where I was wrong. And this is what I learned and I would do
differently if I had the chance to do it again. And I made that presentation at the board meeting
and then I heard one single director clap his hand. And I looked up and thought this is for sure
my career ending as I stand here. And he looked me in the eye and he said congratulations.
You have now disproven the hypothesis that all these investors are saying that will be disrupted
by the internet. You've proven we will not. The second your team built a world class internet
payroll product and even though we can't sell it through the internet we can sell it through our
2000 sells people. So we're now first to market. And the third is you are now more valuable to us.
You made a $40 million mistake and I know you won't make that mistake again but I want you to
leave here and make a bunch of new mistakes because that is how we learn and they promoted me.
So so you make this mistake. ADP sends you to go build this product. You spend $40 million. You
lose it. I mean it's a disaster. This is a total disaster. Yes. And you go to the board and you tell
them, I've just lost $40 million of your dollars and you're thinking like you're done,
you're going to be fired. Yes. And instead what they say is you've your team's built an
internet payroll product that we can sell through our sells force and be first to market.
You've just proven the pendants who say that we will be disrupted with these internet
mediums as opposed to having a direct sales force and last but not least you've learned an
important lesson but we love the fact that you've leaned into something that we didn't know
and you taught us along the way. So they promoted me and I became the senior vice president of
marketing and business development for the payroll division. So what point did you start working
for into it? So I went back to headquarters and I was at headquarters. We were doing roll up of the
payroll industry. We were buying small payroll providers and we started to run into a company from
the Silicon Valley who was bidding more than we were on every one of these target companies.
And eventually I got a phone call that said, would you like to come out and meet with the team
from into it? And I thought, hey, this is professional courtesy. I'll drive out there or fly out there
and speak with him and see what I can learn. But when I got out there, I had a meeting with the CEO
and the founder. I fell in love with the culture and at the end of the day I went back and resigned
from ADP. Wow. They offered you a job. They said, we want you to work for us. They did. Yes,
they asked me to join the company to help build their accountants relations business, which were
the accountant referrals that helped get small businesses into the accounting products and the
payroll products that into it built. And this was around 2003. It was 2003. They asked me to move
to Plano, Texas, just north of Dallas. And I started there leading the accountant relations
and our third party software development network, so building our ecosystem of third party
developers and influencers. And after 14 months in that job, I got a phone call from the CEO
who asked me if I would move to San Diego and lead the Turbo Tax Business as a senior boss
president for Turbo Tax. And so I moved my family from Plano, Texas to San Diego to lead Turbo
Tax. And that was when we faced our first real disruptor in the tax business. It was a competitor
who decided to give the tax software away for free and look for other ways to monetize.
The industry was sure that that would be the end of Turbo Tax, but we made a decision to go
free as well. And everyone thought that would chase the industry to the bottom, but ultimately at
the end of the day, we not only advanced our market share, but our average revenue per return
in our profit margins went up because our team had a lot more opportunities to monetize beyond
that small startup. And it was one of the biggest opportunities to advance our business.
All right, so you've got a competitor that's introducing tax software that's free
and into it decides to make its software free as well. More or less, right? That's correct.
When I was in Turbo Tax in 2004, we had a disruptive competitor who decided to come in and make
the tax software free. And we had a choice. We could either continue to monetize our software
and slowly give away share, or we could meet them head on, which we chose to do.
So just explain to me, how do you make money when you give away the software for free?
There are additional services that customers can purchase from you, and at the end of the day,
the federal tax return is only one of those products. There's also state tax returns.
There's the ability to pay for your tax return out of your refund,
called a refund transfer. There's security and audit fees and other things that you can do to
work with customers to give them confidence and filing their taxes. And so what we ended up doing
was giving the federal return away for free. And then monetizing through state and other products.
And at the time we did that, we were making $29 a return. And if you fast forward to today,
we make about $58 a return, and the average margin is 65%. So our team has innovated on business
model ways to basically monetize customers over time. So what happened to that competitor? Is
it still around? It is. It fell back to a distant third. It had climbed up from probably 13th
or 14th in the market, and they had moved up into second place, and they were trying to threaten
turbo tax, which was number one at the time, and they've now slipped back to a distant third.
So really, you had to, you had to make that decision if you were going to stay relevant.
We did. And we made the choice. We stayed relevant, and we were able to advance our market shares
a result. So let's just type by this in context, because you start into it, I think, in 2003,
and the CEO of the time was Steve Bennett. And he taps you to join the company and then run
turbo tax. But the founder of the company, Scott Cook, I assume he was still very much in the
picture and involved in the company, right? Oh, yes. Yeah, Scott is still actively involved to this
day. He comes into the office. Ever since he took his self out of the CEO role, he has worked with
the existing CEO in the company and has also sat on the board, and he ultimately plays the most
humble role of all. He asks every CEO and everyone on one, how can I best help you in the company?
And he will work with our product teams to help get new innovations out the door.
So Scott Cook was still there. Steve Bennett was a CEO. And I guess within like four or five
years of joining into it, they ask you to become a CEO, right? And I mean, this is just right around
the time of the global financial crisis. That's correct. Yes, I joined into it in 2003. I had the
chance to work in Texas and the accountant relations and third party developer network. I've been
asked to go to San Diego and lead Turbo Tax and then I had subsequently moved up to Mountain View
California to lead the Small Business Division in QuickBooks. And then in August 2007, we announced
that my predecessor would be stepping down in January of 2008 and I would be stepping in at the CEO
role. And that's what I did. And it was just before the great recession hit. All right. So 2008,
you take over into it. It's the start of the financial crisis. Many, many companies in
the Silicon Valley and of course all across the country start to deal with the looming and
impending crisis. What was going on with into it? I mean, were you guys facing headwins as well
or was your business kind of recession proof? When you looked back over the period of time that we
had been in existence, our company was very resilient to downturns because our products are needed
most when times were tough. But in 2008, it was the first time it was a consumer driven setback.
So credit cards were maxed out. Home loans were no longer affordable. Home equity was no longer
what it had been in terms of its value. And so it really hit every single sector of our customer
base. And so the first thing we had to do is say, what do we do to navigate through this?
And our decision was to be there for the customers. So we lowered our price, we extended our
discounts. And we basically increased our levels of service. And we said, if we help customers through
this period of time, then we think when they get through the other side, they'll remember us. And
that was with the choices we made. And it paid off. Did you have to implement lafs? We did. In fact,
in August 2007, when I had been announced, I had the chance to go out and take a look at all the
parts of the business that I hadn't had the chance to be in at the time. And we looked at where
we felt like we were overresourced and underresourced. And we felt we had gotten a little bit
overweight in areas like our central SGNA. So our center functions. And we were underweight in our
engineers. So we had begun doing reductions in force right when I started in January of 2008.
We were moving people out of legal, out of finance, out of human resources, and starting to
hire more in engineering and product management. And so because, as I had shared at the time,
we repaired the roof on the summer shining. By the time the recession hit, we were really in a
pretty good place from an expense perspective and we were able to play offense. So let me ask you
this question, Brad, as a, not just as a CEO, but as a, you know, as a guy from Canova, right,
who had the experiences you had and had a family and all those things. I mean, of course, as a CEO,
you have a responsibility to the board, to shareholders, investors, and you have to think and
manage strategically. But it doesn't mean that that is easy, especially when it comes to
laying people off, right? And because you are essentially making decisions that could potentially have
a catastrophic impact on people's livelihoods. How did you kind of process that mentally?
It's the hardest thing I've ever done, and it has been hard every time I've ever been faced with
that decision. In fact, when we made the decision, one of the things that we did was we wanted
to treat every one with compassion, with dignity. And once we were able to get stable footing
again, and the company was in a strong position, we would open the door. And I am proud to say that
to this day, the number one source of new employees are prior into it employees who come back home.
And guy, we refer to into it as family. And I know there are many people out there that say,
hey, you shouldn't talk about it being a family. It should be a high performing team and you replace
the athlete if they're no longer able to do the job. But we feel like you can invest in people,
you can give them a chance to learn and grow. And if they aren't performing, you treat them with
compassion, you help them find another place, but they can still be family. And it was hard for me,
I'll say that when I had to do a company, why did announcement? Her chief communications officer
was sitting with me and I said, how do I deliver this message? Am I the optimistic? I can see the
light in the end of the tunnel, Brad, around the eye, the remorseful. I'm really sorry I had to do this,
Brad. And he looked at me and said, I want you to imagine your two daughters standing just below
that camera. And I want you to explain to them why dad had to do this. And that was the message I
delivered. Let me ask you about company culture when you became the CEO. Was there a lot of work
that you had to do? Was morale mixed? Was it pretty seamless? Was the culture already strong?
And you kind of just had to take control of the ship and keep moving forward or was going on?
Well, I had the benefit of following an amazing leader who followed amazing leaders before
him. And the company was in a very strong position. But we had to transform the company from a
North American desktop software company, which was the strong company that I inherited to a
mobile driven cloud product and platform company that would do business around the globe.
So we basically had to become a 36 year old startup and reinvent ourselves from scratch.
And that was the task that I had before me. So what did you do? Well, the first thing we did is we
realized that the companies around us in the valley and elsewhere that had transformed themselves
and we wanted to learn what was it that they had done to basically make that transition seamlessly.
And once we studied them and we came back and we laid a gameplay out, we basically stepped back
and the first thing we did is we communicated the employees. We've questioned everything.
And the good news is these are the things that will not change. These are the things you'll
still recognize here tomorrow. And then once we confirmed what wouldn't change, then we outlined
the things that would change and we explained why. Because we had learned this from this company
or because we heard this from our customers or because we saw this in our technology,
these are the things we're going to do differently. And we enlisted everyone in the company
in that process and that helped us transition the company to the next chapter.
So into it has like like 9,000 employees, something like that? We do, yes.
So when you have such a huge company, it's challenging to be disruptive. The disruptors are like,
you know, some a bunch of guys in a garage or a women in a garage, you come up with an idea
and then all of a sudden they take on, you know, a tied bleach or a chloroxopor, whatever it is,
you know, they come out with a method, you know, or Airbnb, all of a sudden becomes the biggest hotel
chain in the world. How are you able to make sure that you weren't going to be disrupted by a
bunch of people in a garage? The first thing we did is we stepped back and realized that all
9,000 of our employees needed to be owners, operators, and entrepreneurs. So we retrained the
entire company on our two innovation techniques, customer driven innovation and design for the
light. It's basically lean startup, agile thinking. And then we gave all of our employees 10% of
their time as unstructured time. And we explained to them that you can run experiments on anything that
you think will improve the customer's life, improve your productivity or your peer's productivity
or make the company stronger. And we stepped away from the PowerPoint, the persuasion and the
politics, and we leaned in to prove and experiments as a way to help us innovate and grow. And immediately
from that 2008 to 2010 timeframe, we had over 1800 experiments going on at any point in time in the
company. And then the ones that rose to the top of the evidence, we invested in those as the next
chapter. And basically all 9,000 employees helped us innovate and transform the company. And it's
all based upon the old cliche that it's not the big that eat the small. It's the fast that eat the
slow. And we wanted to be a fast moving 36 year old startup. And that's the company I'm proud to say
we transformed into. Well, how do you do that with 9,000 people? And it explained how that works
because there's still meetings and bureaucracy and different departments and internal competition.
I mean, how do you make sure that people like specifically, how did you create a structure where
9,000 people could take part in this? Well, you still always struggle with those things. Are there
too many meetings as your bureaucracy? And I loved one of my peers once said, if you want to scale
and have an impact on the world, you have to have process. But when process becomes slow,
methodical, then it becomes bureaucracy. See, a neat process, you need to fight bureaucracy.
So all 9,000 employees had an opportunity to basically create the next chapter. And we give out
innovation awards. The Scott Cook Innovation Awards to those top winners who have had a
fundamental impact on our customer and changed the trajectory of the company. And when they win,
their faces are put up and all of our offices around the globe. And they get six months off of
their day job to work on anything inside the company that gives them passion. So it really inspired
all 9,000 employees to want to become innovators and entrepreneurs that helped to transform the
company. What is a product that came out of that? That unstructured time. We had mobile payments,
come out of unstructured time. We had turbo tax on the mobile phone, come out of unstructured
time, which is now a big way that most tax returns get done is by beginning on the mobile
device, if not completing the return on the mobile device. We had time and attendance products.
We've had lots of products come out of this. And what's amazing is it wasn't a lesson that we
alone learned. We had spoken to people at Hewlett Packard. We had spoken to Team Over at Google.
And we had asked him, how did you come up with your winning companies and your winning businesses?
And they said it's amazing. It very seldom comes from the corner office. As Peter Drucker said,
the bottleneck is almost always at the top of the bottle. Instead, what we did is we gave
our teams the ability to innovate and then put their ideas up on a lab and then watch for customers
to see which one of those customers download what products and then we picked the winners from
there. And so that really became the model that we adopted. I'm Guy Ross and you're listening
to wisdom from the top. We'll be right back. This message comes from an PR sponsor,
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This is wisdom from the top. I'm Guy Ros. So here's the mission, Brad, which is
human beings. We are motivated by incentive. Anybody taking Econ 101 will learn that.
The we humans are motivated by incentive. What kinds of incentives were you able to give
those teams to go out and innovate? I mean, was it, hey, you get a piece of this, hey,
we'll give you money. We'll give you bonus. How did you get people to become motivated to
innovate within the company? Well, those were the questions we wanted to know as well. So we asked
the 9,000 employees what would matter most to them. And one of the things that surprised us was
we thought it would have to be monetary. And that was not the top thing that the employees wanted.
They wanted to have an impact. They wanted it to be recognized for that impact. And then they wanted
time to work on something else. And so ultimately, the impact was clearly getting funded and
having the ability to get their idea to market. The recognition was having their faces around
all the campuses around the globe. And then the ability to take Tom off from their day job to
work on the next thing. Now, what we did do is we put a sweetener in there that we never announced.
We had one individual that created a business that was so significant. It became hundreds of
millions of dollars for the company. And so on announced, we granted him the founders award.
And it was a million dollars in stock. And his picture hangs in the campus around the globe as
well. And now all the employees know that there is an opportunity that if they have an outsized
impact on the business, they may also have a life changing grant as well. Do you think, though,
that there's an argument to be made that if big companies like into it or, you know, or Cisco,
or whoever we're talking about want to make sure that they continue to be leaders and innovators,
that the model down the road should possibly change. You know, in other words,
creating a model where those internal entrepreneurs get a real piece of what they're building.
I do think the model has to remain evergreen. The real question is, what is it that motivates
those innovators? And many times we began with the hypothesis and when we speak with them,
we find out that's not the thing that they're solving for. So as I mentioned to you earlier,
we truly thought that financial incentives would be the way to get participation in this program.
But instead, we step back and we learned from them that was about having an impact on the customer,
having the ability to be recognized by their peers and have the ability to spend time on things
that they wanted to do that made their heartbeat fast. And we have had no problem with getting people
running experiments and basically helping transform the company. So I do think those questions and
the answers to those questions may change every time. So we should constantly be pulsing. And I think
we should adapt and evolve as companies to make sure that we're doing the right things for these
internal innovators. In 2015, you guys announced that you were selling quicken, which is a little bit like,
I don't know, you know, McDonald's saying we're selling the big Mac. We're going to,
we're not going to sell it anymore. Another company is going to own that product. Like,
quicken was the heart and soul of into it. Why, why did you make that decision?
Yeah, we're very proud of quicken. It was the seed corn that gave birth to the mission that
became a company called into it. And we're so proud to see them continuing to thrive in the market.
But in 2015, we had taken a look at the next 10 years. And we had realized that the next chapter
would be a platform, not a set of products. And that platform would be based in the cloud.
It would be using mobile devices. And it would be powered by artificial intelligence and machine learning.
And as we began to look at our portfolio of assets, we had worked for years with the customers
using quicken to try to move them to the cloud and a mobile devices. And they did not want to make
that move. They were happy with the product as is. So we faced a tough decision. We either kept the
product inside the company for nostalgia reasons. But we didn't resource it because we knew it
had to put our resources into the future or we found it a better home. And so I really wrestled with this
and the management team and ultimately went to Scott and I sat down with Scott and I said,
Scott, this is the lemma we face. And without batting an eye, Scott said,
quicken is our yesterday. We're here for tomorrow. And I support the decision wholeheartedly.
But guy, that wasn't the only conversation that needed to happen. Scott once explained to me
when I asked him, how does it feel to be a founder of a company where another CEO was running the company?
Yeah. And he said, Brad, it's like being a biological father
who's watching a stepfather raise your child. And as long as you know that stepfather loves your child
as much as you do, you're happy. And so I realized that that moment that Scott and his wife,
Sydney, had both brought quick into life. They had made the sacrifices together. They had
helped bring this product to market. So after the conversation with Scott, I sat down and wrote a
handwritten note to his wife, Sydney. And I wanted her to understand that this was not an easy decision.
And that I wanted to explain why we had made the decision. And I wanted to empathize and tell her,
I imagined it was emotional. And I sent her that note and a handwritten letter. And then I saw her
a couple weeks later to company function with tears in her eyes. She said, that meant the world to me.
And I'm proud to tell you quicken is doing very well now. The companies do him great. But it was
because Scott and Sydney saw the future. Brad, as a leader, how important is it to you that you are
liked by the people who work with you and around you? I think at the end of the day, as everyone
says, it's most important to be respected. But I will tell you that growing up as I did, my mother
and father used to tell me you attract more bees with honey than vinegar. And so I've always had
a signature at the end of every email, which is work hard, be kind, take pride. And I've always
encouraged our team to never mistake kindness for weakness. So I may not be someone that is
liked universally. But I do hope I am someone that people would say was always kind.
Why would you think that somebody wouldn't like you? I mean, of course you got to make tough decisions.
You got to fire people. You got to shuffle the deck now and again. But would those be reasons
why somebody wouldn't have liked you? I mean, no one is universally like. It's almost impossible.
Well, I think human nature is what it is. Sometimes decisions that people don't agree with
make them personalized. The person who made the decision is the reason why. And so that could be a
reason why someone may not like me. It could be because at the end of the day, I chose to not take
a stand on something that they were passionate about. Or I maybe had to shut down a product that
they were working on. There's all kinds of reasons that I truly understand someone could get up
set. I hope that doesn't lead them to personalize it and make them feel like they don't like me.
But at the end of the day, if they do, I respect that. But my hope is that when they look back, they'll say,
I always try to make the decisions with clear principles and I always try to treat everyone with
dignity and with kindness. You used to release your performance reviews to into its employees.
You would just share the unedited performance review. Now, on the one hand, that sounds pretty
amazing. Wow, you know, you're going to, all the words are going to be out there. But I have to
imagine those performance reviews were pretty good. Otherwise, you wouldn't just share them unedited.
Well, every performance review has opportunities to work on and I did share those unedited. And by the
way, what's amazing was once I published them for the first time, I'm employees laughed and said,
we already knew that. And so we may think that we are able to only show our strengths and our
opportunities to grow and develop or not obvious to others. But what I found is by making it
transparent, I was able to ask people to help me, to help me course correct when I was going
down the wrong path to reinforce the behavior when I did it right. But it also set the tone for
others that were all a work in process and let's be willing to give each other feedback as a gift,
and let's all grow and develop together. And so that's really been the biggest upside from
this whole process. If you were writing your performance review and you were trying to give
yourself critical feedback about something you really needed to improve on, what would you say?
I have three clear areas that I know I have to continue to work on. The first is I like structure
and harmony and sometimes the best creativity and the best decisions come from debate and
disagreement. And so I've had to learn to allow that debate to unfold and for me to sit back and
speak last so that everyone could get their points of view on the table. So that's the first area
that I have to work on. The second area that I have to work on is I recognize that my past
performance was I would praise in public and coach in private. But I realized after getting feedback
that I was robbing people of where my bar was, where my standard for quality was. So now I coach
business performance in public and I coach personal performance in private. And that was the second.
And then the third area is I have a tendency to say yes to too many things. So I needed to step back
and be really clear about where I'm going to spend my time and what I'm going to say no to. And
those are the three things that are posted on my office store. Those are the three things any
employee in the company could tell you, Brad has to continue to get better at.
All right. You have you decided to step down as CEO. You are no longer CEO of into it. We should say,
you're a young guy. You're in your mid 50s. This is like a moment when people become CEOs.
Why? Why did you step down? Well, as I said to the team guy, the end date is inevitable. The
goal is to make sure you're a part of the decision. And so when I said out I had three objectives
that I knew I wanted to have in the back of my mind of it helped me know when it would be the
right time. The first is when the company was ready. When we had transformed from that North American
desktop software company to that global cloud driven product and platform company that I mentioned earlier.
The second was when the board had several really good options as successor candidates. And our next
leader had clearly emerged from that process. And then the third one is when I was ready. And I never
wanted to be that athlete that was a half a step slower and wasn't able to complete the pass.
And some may argue that I got into that point, but I really wanted to make sure that I was able
to step out when we were still moving up into the right. So that's what informed my decision.
And I wasn't worried about how old I was. I was worried about whether the company was ready.
The next leader was ready. And I felt I was ready. When you look back on your career into it,
what is there anything that you maybe regret or that you look back on you think I would have
done that differently now? Yes, I saw early on in 2012 with the benefit of the leaders working with
me and the learning that we had gotten from the best wheel makers that we studied. That the next
chapter was a platform that unleashed magic for every individual who participated. To do that,
you have to begin to become much more operational in terms of the services that you provide.
The identity that you have customers log in using a single identity. And you have to get on this
data algorithm a lot faster. And I felt like we were too slow to make that transition. And if I
had the chance I would go back and I would have declared we were a platform company in 2012.
And I would have put the organizational resources into making sure that our data and our
algorithms were ready to capitalize on that next chapter. Bread, how much do you attribute your
leadership to a natural instinct? Something you were born with? And how much of your leadership do you
think is a product of learned behavior, experiences? I believe leadership has learned behavior and
experiences unequivocally. I wasn't born with any special gifts. I was surrounded by an environment
nurturing parents. I was surrounded by people who inspired me and I was able to learn from their
best practices. And I was surrounded by people who were always willing to grade me on a curve and
basically give me feedback and help me improve. I think at the end of the day for me leadership
is not the desire to put greatness in other people. But to recognize greatness exists in everyone
and your job is to create the environment for that greatness to emerge. And that's what the
world's done for me. They put me in a situation where I was able to play to some strengths that I had
and to learn from others and ultimately I've had a pretty good run and I've been very happy
with the fact that people are willing to support me along the way. That's Brad Smith, former CEO
of Intuit. By the way, these days Brad is focusing a lot of his attention on his home state of West
Virginia. He recently gave over $35 million to his alma mater, Marshall University.
Thanks for listening to the show this week. The music for this episode was composed and performed
by Drop Electric. I'm Guy Ros and you've been listening to wisdom from the top
from Luminary, Built at Productions, and in PR.
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Gold. Jesus Christ. How do you do it?·7 likes·
I find these weekly podcasts to be super inspirational, they seem to always motivate me to look at my purpose. Matt not only brings in his personal life experiences but he delivers them in such a way that they are relatable.2 months ago·4 likes·
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