Steve McMillan Transcript
Clint Betts
Steve, thank you so much for coming on the show. It is an honor to have you. You are the CEO of Teradata. Tell us about it. Tell us about the company and how you got there.
Steve McMillan
Hey, it's great to be here, and good to talk to you today.
Yeah, I've been the CEO for Teradata for the last three years and it's been an exciting time. I joined in June of 2020, right in the middle of the pandemic, but the journey of how I got there spans a career of more years than I can mention. When I started out my career, I always had a passion for the intersection of technology and management, and I learned how to program computers when I was 10, I was a real true geek.
At university I sought out a course that reflected that and I actually did a combined honors in management and computer science. You can tell from my Connecticut accent that I haven't always lived in the US. I did that in the UK. Looking back, that was the early nineties, to date myself a little bit, and a logical choice then was to join IBM in the UK.
I actually joined, I was only one or two graduates that joined IBM in that year, and that was the year they made the largest corporate loss in history. I don't think it had anything directly to do with me, but I'm glad to see, I think GM overshadowed that IBM loss a couple of months later. So, that was super interesting.
I had a really long career with IBM, and I think this is really interesting for people and folks that want to develop into the CEO role. I was able to get experience across a number of different disciplines inside IBM, and I think that's important, for CEOs to have an awareness at the very least of some core disciplines like strategy and marketing and sales production, development, HR, finance.
I mean, you don't need to have a real in depth awareness of how all of these functions operate, because you've got leaders of those functions. But I think it's really important that you know and understand how they come together and operate. Through my career, I've had lots of interest and opportunities to work across those disciplines. One thing I had to say about IBM is they were super about developing general managers, and I think as CEOs that's an opportunity for us today, looking at how we develop the next generation of general managers. Not just developing people inside their disciplines.
IBM had a really interesting way of doing that, which was to move people between what they called line jobs, which is where you've got maybe a sales target, something directly customer facing, and staff jobs, where you might work on something a little bit more strategic, or you might work in one of the functions of the IBM company. That blend of moving folks around and giving them different experiences, I think that's incredibly powerful as we develop the next generation of general managers.
I was always motivated looking at what the next challenge was going to be. I never took a job without being slightly nervous, and I would encourage others to do that. I think that shows that you're stretching yourself. So lots of good experiences that built up to taking the role at Teradata and taking the public company CEO role.
Clint Betts
That's incredible. What about Teradata interested you in joining the company and being the CEO?
Steve McMillan
Yeah, I think it's a really interesting time in the IT industry. If you think about the 2000s as being the decade of cloud, where cloud computing started to accelerate from an IT perspective, and organizations were looking at the cloud in terms of, "How do we improve our agility? How do we improve the services that we provide to organizations?"
I was talking to one of the biggest banks in the world a month or so ago, and they basically said that their strategy to move towards becoming cloud-first was essentially based on the fact that, for them to be a bank of the future, they recognized that they had to take advantage of all of the native services that organizations like Amazon and Microsoft and Google are developing, because that enables them to maintain their competitive edge.
They can't compete with the level of investments that some of these super large technology companies are putting into the marketplace just now.
And from a Teradata perspective, I saw the company as having a real opportunity to pivot towards having that cloud focus and to enable the organization to deliver services inside those CSP organizations that enabled our customers to get to the next level of innovation. I thought Teradata is a really interesting amalgamation, and potential amalgamation, of cloud technology.
You could say that the 2010s were the decade of data, so amalgamating in a focus on data, and then amalgamating in what I think is manifesting for the decade of analytics and AI, which is going to be the 2020s.
Teradata was, for me, one of the most exciting intersections of different technologies and a company that really was on the verge of transformation, that had a real opportunity for transformation. And I think, as I think about myself and recognizing what really motivates me, it's working with people to solve really difficult problems. The challenge that we had in Teradata, in terms of transforming the entire company, was something that really motivated me, something that attracted me to taking on that position.
Clint Betts
How are you and Teradata thinking about the rise of artificial intelligence? And what do you think about the opportunities that exist there? You kind of touched on a little bit there, and maybe some of the downsides that exist with AI and that conversation that's been happening?
Steve McMillan
Yeah, it's a really exciting time, I think, for business and technology. And AI, again, plays to my passion, that intersection of business and technology and how you can make it manifest. If you think about... If you asked any CIO, chief information officer, what their investment priorities are, they tend to talk about three things.
Everybody's interested in cybersecurity. That's number one. Cloud used to be number two, but now everybody's talking about analytics and AI investment as being the second priority for investment. And then the third area is investment in the cloud. And everybody's talking about the impact of AI, both socially, economically, but also for business impact. And the way that we look at it in Teradata, in terms of helping our customers, is you can think about it in a couple of horizons.
You can think about how you utilize AI internally inside your organization to improve how you operate, improve effectiveness or improve efficiency. The next horizon is how do you utilize AI to improve the products and the services that you offer to the market today? And it may be a customer experience example. It might be an example around embedding AI technologies into the services that you offer.
If you're a bank, utilizing AI to suggest the additional services that a customer might want to be interested in, or how to reduce fraud for your customer set. But I think the third and really interesting horizon, from an AI perspective, is actually how do you see AI transforming your industry?
We saw how technology can transform industries in the past, and I think there's a lot of lessons to be learned there. If you look at how Amazon has transformed a number of different industries, if you look at how Apple has transformed a number of different industries, I think all companies today, by embracing these technologies, this artificial intelligence capabilities that are in the marketplace, they have the opportunity to execute against all of those three horizons in terms of making their company better, making their products and services better, and really transforming their industry.
But as we look at it from Teradata, we want to make sure that we can do that and change the world for the better. To think about that, we think about how to make sure that we have ethical AI solutions, that we have sustainable AI solutions, that the solutions that we're putting forward are incredibly effective and efficient, because some of this AI technology can utilize a lot of computers. It's not that carbon friendly, if you like.
These are some of the things that, inside Teradata, we're helping our customers overcome. That is, really pivotal changes, embracing multi-cloud, embracing data and analytics with the best possible governance to ensure that organizations can trust the outcomes that these systems are putting forward. And that ethical AI and trusted AI, based on data that we call harmonized data, it's how you reign in all of the data inside an organization, reduce data sprawl to give the best possible outcomes, but do that in a way so that you can trace that data back so you know where that AI solution developed that answer from.
I think, as AI develops, it's going to be interesting from a regulatory perspective. I think it's going to become more and more regulated so that at a very minimum, organizations need to publish what the source was for a particular recommendation. But in highly regulated industries, they'll also need to be able to track back what's the logic that got to that point and what data was used to get to that point. That's something that my company, Teradata, specializes in today in terms of data management and data governance and helping companies today embrace these technologies to increase their innovation and agility.
One of my real passions is actually talking to some of the biggest companies in the world about how we can help them with that innovation path.
Clint Betts
Yeah, it sounds like you've been thinking about this for a while, where some companies may be scrambling to catch up with the whole AI revolution, if you will.
What had you thinking about this so early? And how have you reoriented your company, if at all, as this has really become such an important technology, an important topic of discussion in business?
It feels like everybody's saying, just like the internet, back in the day you had to have a website. Which is obvious now, but when in the beginning, now, it seems like you're going to have to have an AI strategy at the very least and some sort of AI capabilities moving forward. What did you think about that at Teradata?
Steve McMillan
Yeah, I think all the technology geeks in the world would point to artificial intelligence has been around for a long time. The first chatbot was invented in MIT in the sixties. And Alan Turing published the first academic paper in the 1950s around AI. So I think it's always been a quest for computer scientists, and it was a quest for me as a young programmer, to get your computers to be more responsive, to be more natural in terms of how you interact with that piece of technology.
But I think now we're seeing that real acceleration. If you look back and think, I think chatGPT was launched in November of last year, so we've had 12 months of rapid acceleration in the talk and excitement. And the buzz around this technology has really come to fruition now. From a Teradata perspective, I think we saw the benefits and the importance of getting the most out of your data with complex analytics and artificial intelligence capabilities, even back to 2010.
We made a purchase in 2010 of a company called Astor Technologies. Far before my tenure inside the company, but it was fairly prescient, but it was kind of ignored at the time. Over the last three years, we've actually taken those capabilities and embedded them into our platform in a truly integrated way so that our customers can utilize capabilities, and artificial intelligence capabilities, and advanced analytics that are really built into our platform.
And then we've extended our system out, our solution out now, so you can integrate in services like OpenAI, which powers chatGPT, into the solutions that our customers are utilizing. It's been a great intersection in terms of some of the core capabilities of Teradata.
And Teradata is a 40-year-old company. We're currently reinventing ourselves to enable our customers and reinventing our technology to enable our customers to use it in these modern environments with the most advanced services so that our customers can keep ahead of their competition and deliver new and exciting things into the marketplace.
So I think, as a culmination of different factors, we were, I think, very well-placed to take advantage of all of the interest and the catalyst that the discussion around AI is having in the marketplace today.
Clint Betts
What are you reading these days? As you think about AI, or just in general, what are you reading? What reading recommendations would you have for the ceo.com community?
Steve McMillan
I actually just read the book on Elon Musk. I didn't know that Musk had actually created and put the first investment into OpenAI, I think back in 2014. That was news for me. He's a super interesting character, I say very dispassionately, and I think the way that he drives organizations forward with almost impossible timescales and objectives and targets is super interesting. But it's also super interesting to see how people that work for him respond to that, and where it works and where it doesn't work. I thought there were some really great interesting lessons inside that book.
I'm also a big student of Jim Collins and his series of books in terms of what makes companies great. His series of books were excellent. And I grew up in a traditional management school, so some of the Porter books on management frameworks, management philosophies and economic frameworks are super interesting, too. Grounded a lot of my management ethos and how I think about things and how I try and structure information to make decisions to move forward.
Clint Betts
Yeah. What is your leadership style? Speaking of Elon, his leadership style seems different than most, and —
Steve McMillan
How very politely said.
Clint Betts
Yeah, seems different than most. And that was true also when Walter Isaacson did that biography of Steve Jobs, right? Steve Jobs's management style sounded wild, and it was. He'd be screaming at people for a second and then he'd be praising them the next second. There is something about these legendary CEOs and founders that maybe they manage differently than the rest of us or lead differently than the rest of us. What do you think about leadership? What is your style? What have you found that's worked over the years?
Steve McMillan
Yeah, I was educated in a framework around different leadership styles as a younger manager, and I think three styles for me come to the fore. One is called pace setting, and that is the style you deploy when you need to make changes very quickly. It's more a, you jump out of the trench, follow me, and you charge forwards and you drag other people with you. I think that's a good description of Musk's leadership style and Jobs' is leadership style.
And that's not my predominant management style, the last one I'll talk about I think is my predominant one. I hope my teams would agree with me. The second management style I think, which is very positive for an organization, is authoritative. That is, you set out a strategy for the organization and you help communicate, gain clarity and alignment around that strategy, and your leadership is evolved around moving the organization forward, executing on that strategy in a very consistent way.
Then the third style, that I hopefully bring to the table all the time with my team, is a coaching style. I think coaching has the most positive impact on the culture of a team, the culture of an organization, as you're looking to develop others. And again, my passion is to solve difficult problems working with people. And if that's your passion, a coaching approach is a really good way to do that.
I think great leaders actually combine all of those different styles together for the situation that they're in and for the outcome that they want to get to. So I think hopefully I bring a blended leadership style, that's my objective. If I think back through my career, I've always been involved in transformation projects, turnarounds, new startups, and so those three styles seem to come to the fore in terms of executing inside an organization or leading an organization forward.
Clint Betts
How do you as the CEO and leader of the company decide to spend your time?
Steve McMillan
I think that prioritization is really important. If I think about leadership in general, most leadership lessons are all about people. So, I spent a lot of time interacting with my teams to make sure that there is that clarity and alignment, that they're focused and motivated to work with their organizations. Teradata has 7,000 people globally.
For us as an organization to get the very best, and deliver the best for our shareholders, we have to make sure that those 7,000 people are focused on a strategy. And we actually developed what we call a "company on a page" where we set out what we see is the purpose for the company, and then we'd say, "We're gated by our purpose, we're led by our strategy, we're enabled by agile processes, and we're driven by our culture."
When I think about execution, I think about it in terms of making sure that we've got the right strategy, making sure that we're executing consistently across all of the organizations to that strategy, that we're focusing on how we operate so that we're being efficient and effective. But I think also making sure that we've got the right culture inside the organization is super important. So we set out some principles so that we could focus our activities, and those three principles were to be customer and market driven, to have agility and execution and to be accountable to one another. That includes a focus on diversity, equity, inclusion.
So we use that framework to make sure that everybody inside the organization is prioritizing their time and executing inside the right way, executing in the right way. And our strategic objective guides each of the functions to ensure that they are transforming and driving their organization in the correct way. So it's their intent, and hope that that cascades down, that we create the right culture inside the company.
A good example of that is our focus on flexible working.
I started in the middle of the pandemic, and that was enforced flexible working, if you like, or inflexible working as you're sitting behind a desk at home. But what we saw, that Teradata, as a technology company that competes against some of the biggest technology companies in the world, had a real benefit if we took that approach to flexible working and made a commitment to our workforce.
When I do diversity panels around the world, the consistent message and theme is that flexible working has enabled people to change their lives. And I think it is changing their lives for the positive. So, instead of people traveling into London for an hour every day and then traveling back out of London for an hour, or New York, or pick the metropolitan area that you're interested in, they can prioritize that time a lot better to make sure there's a great balance in all aspects of their life. And I think that, for us at Teradata, means that people are more loyal, they're more hardworking, they're focused on the outcomes, they trust us as an organization, and we trust them.
Clint Betts
We think a lot about, and talk a lot, about self-leadership at CEO.com. When you hear that, what does that mean to you? And I wonder what a typical day looks like for you? Are there any routines or habits you've developed that maybe you could share with us and some people could take and think about? What does self-leadership mean to you?
Steve McMillan
Look, I think it's, at its core, about discipline. And you're probably getting to know me a little bit now. I'm a framework-driven individual, right? I think about things in terms of what makes a good company great. It was a Harvard study on organized good companies and what's the difference between a good company and a great company, and at the time, they said, "Great companies have a balanced scorecard."
And as a CEO, I look at that as a balanced focus across a number of different areas. And, those areas are a focus on your people, a focus on your customers, a focus on your stakeholders. And they've recently refreshed that study. I say recently. About 10 years ago, they refreshed it, and said also, "A focus on your community or environment."
So when I think about my time, I think about it in terms of am I spending enough time with our people? Because if you've got great, motivated people, that make a difference for your customers. Am I spending enough time talking to our customers and engaging in conversations with customers, either many to one or one-to-one? Am I thinking about our stakeholders, our shareholders, our investors, our board? Am I thinking about how we are representing value in creating value for that community?
And then more importantly, recently, has become that focus on ESG, so how are we focusing on environmental issues, sustainability, governance of the organization? That focus on diversity, equity, and inclusion, making sure that our people can bring the best version of themselves to work every single day. Creating that culture, where people are motivated to succeed, I think is incredibly important.
When I think about my time and I think about how I spend my time, I think about it in that context and those lenses, to say, "Have I been spending enough time on that balanced scorecard of parties such that Teradata can be a great company?"
Clint Betts
How do you define culture inside your company? I mean, you've spoken about that a little bit in a lot of these answers, but I wonder, when you think of the word culture, what does that mean to Teradata? What does that mean to you? What does it mean to your employees?
Steve McMillan
Yeah. I think it is super interesting, because when I joined the company, as I said, it's a 40-year-old company. People were super proud of the culture. It was one of the reasons I joined, actually, because the people of Teradata, how our customers talk about us, refer to us as partners, as collaborators. And all of the employees in Teradata were super proud of the culture that they had developed and that had developed over time. There were lots of great aspects of the culture.
I look at culture and culture development a bit like going to the gym, right? It's like a workout that you do every day. When you're in the gym and you're thinking about running a marathon or you think about you're entering a swim competition, you focus on certain muscle groups to ensure that you perform well in the task that you have ahead.
You don't throw away muscles that you've had. You just build up and continue to build your tone, your muscle ability. And I look at culture as the same thing. You don't throw away the great parts of your culture, but what you do is you focus on elements of that culture where you can improve.
A great example of that is being market and customer driven. A lot of our employees said, "Steve, we are one of the best. If you look through all of our satisfaction surveys, our customers think that we are absolutely customer focused, focused on delivering the best possible service.
Why do we need to add that market dimension into that cultural principle of how we think about things?" And the answer to that is pretty simple. If you only focus on your customers of today, you're only going to get the outcome of your customers of today. When you think about it in terms of the entire market, you make sure that you don't get left behind by things like this evolution in our artificial intelligence.
Our engineering organization has recently launched a capability inside our product so that you can use a chatGPT-based solution to enhance how you utilize the Teradata product. You can actually ask questions rather than developing code. It changes your interaction with our technology set completely. If we hadn't had a market-driven mindset, we would never have thought of that.
And then our second principle of agility and execution, we developed that. Our engineering team developed the first pass of that solution in 30 days. It was amazing. If we hadn't had that focus on the market, focus on agility and execution, we wouldn't get to the kind of outcomes that we're executing today, and some of the things that make our transformation super exciting in the industry.
And so, I think that's how you focus on culture. You develop a set of behaviors which you reinforce inside your organization. And we do things like recognize individuals that are demonstrating those behaviors, we call them change makers inside Teradata.
Recognize those individuals, how they're operating, how they're operating to our principles, how they're being accountable to one another, so that our culture steadily gets better and better, improves, improves our agility, and improves the outcomes from a company perspective.
Clint Betts
What are your thoughts on the current macro environment of the economy and that outlook and really just the state of the world?
Now, I'm not asking you to comment on any events or anything like that. I just wonder, as a CEO, it seems like now, maybe more than 20 years ago, you have to think about these things a lot, like what's happening in the world, the macroeconomic environment. You have to be socially aware. All these types of things. As you think of the current state of the world, current macroeconomic environment, what comes to mind and what are you thinking about as the CEO of Teradata?
Steve McMillan
An understatement would be this is an exciting and challenging time for leaders. Companies aren't political organizations, but I think what we should always strive for as a leader is to do what's right. When you think about it in terms of those market, I mean, who would've thought we'd be coping with ongoing pandemics, war situations around the world, conflict, unrest, inflation, recessions in some areas of the world, that uncertainty, and I think some of these patterns we haven't seen for 40 plus years.
If I had to use one word, I think agility is the most important word. CEOs have to embrace one thing for their organization. It's got to be agility. And that's how I think we think about transforming Teradata. Do we have the agility to be able to sense and respond to the environment and take the most appropriate actions to ensure that we place our people, our customers, our organizations in the best possible place for future execution?
Just looking at the inflationary environment that we have around the world, it changes how you look at your supply chain, how you look at your pricing strategy, how you look at the consumption patterns of your organizations. And Teradata, we believe that data helps empower people to make better decisions. So we utilize that data to really inform how we operate and how we work.
One of the things that I think all of the team inside Teradata like doing is working with customers around the world to help them to respond to these challenging environments very, very quickly, but doing that based on real data, real analytics, real insight. And I think that's the challenge that we help organizations address all around the world.
Clint Betts
Is there a moment where you failed or didn't live up to your own expectations that became a catalyst for you to become a better leader?
Steve McMillan
I had the pleasure of, at the time in the early nineties, being the youngest manager in IBM's history. I was 23, 24 at the time, and it set out. It was a trial by fire experience for me. I took over a team where their morale survey score, that we would call a pulse score now, I would guess, was zero. And to get a zero on the morale survey score, the team actually had to collaborate with one another to answer the questions in a certain way so that score came out at zero.
It was pretty innovative for that team at the time. And I was given that team to manage, and I think it set out some great leadership lessons for me that kind of resonated through my career. One thing I had, in doing that job, which I absolutely valued, was a set of peers that were all motivated to help me succeed, and succeed in some of the most challenging environments.
Just to put it into context, I was in my early twenties. I gave out two 25 year awards, so people had been working for IBM at that time longer than I'd been alive, and it set out some really interesting leadership lessons that I've taken forward to the rest of my career as we were looking to turn around that team.
It also gave me a viewpoint on, you are going to feel a little bit nervous coming into a new area or a new challenge, but that can be a great thing. It shows that you're stretching yourself, it sharpens your execution so that you drive forward for a great outcome. And it really taught me that no challenge is really insurmountable, right? You can overcome almost any challenge if you have the right support, the right capabilities, and you're willing to execute with conviction against a great strategy.
Clint Betts
Steve, I can't thank you enough for coming on the show and sharing your wisdom here. This has been phenomenal. I could talk to you forever.
We end every interview the same way with this question. At CEO.com, we believe the chances one takes are just as big and important as the chances one gives. With that in mind, who gave you a chance that led to where you are today?
Steve McMillan
Yeah, I've been thinking about this, and people take chances on me every single day. I'd be really disingenuous if I singled out one person.
I didn't want to be a CEO. Growing up inside IBM and Oracle, I always thought the divisional heads, the folks that ran the divisions, had a much more interesting job, a really good intersection of strategy and operational execution. There were a number of individuals, and hopefully they'll listen to this, because I thank them dearly, who pushed me and encouraged me to take the leap into being a public company CEO. I'm going to be forever grateful to them.
I've had great sponsors, some of whom are actually on the board of Teradata, and I think that's super important, for a CEO to have a board that's super supportive and asks great questions to help you see around corners.
I'm grateful to all of my friends who teach me something new every single day and have fun doing it. Thank you for the question.
Clint Betts
Yeah, of course. Steve, again, thank you so much for your time. Really appreciate it. Best of luck with everything, and I'm sure we'll talk to you again soon.
Steve McMillan
Thank you. It's been great talking. Look forward to doing it again.