Q&A with Tom Mendoza, Vice-Chairman (emeritus) NetApp – Marketing Day CEO Speaker Series

Building a High-Performance Customer-Oriented Culture

Prof. S.P. Raj:

It’s my distinct pleasure to introduce Mr. Tom Mendoza It’s my distinct pleasure Tom Mendoza is the former President and Vice Chairman of NetApp. NetApp competes in the computer data storage hardware industry and in 2019, Gartner named NetApp as number 1 in primary storage. Mr. Mendoza established a culture that led to NetApp being ranked number 1 in Fortune Magazine’s 100 best companies to work for as early as 2009. He was also a recipient of the Morgan Stanley Leadership Award for global commerce. Mr. Mendoza retired from NetApp in 2019 and currently serves on the boards of Vast Data, UiPath, Varonis, ServiceSource, and Arxan. He has also been significantly involved with the Pat Tillman Foundation, St. Baldrick’s Foundation, The Navy Seal Foundation, and serves on the Justin Tuck’s Rush Foundation for children’s literacy. Mr. Mendoza frequently speaks on corporate culture and leadership to a wide variety of audiences, which have included major universities such as Stanford University, Notre Dame, Harvard, the United States Military Academy, as well as to diverse groups such as the US Marine Corps, and has given keynotes at Oracle World and numerous other industry events.

Mr. Mendoza holds a BA from Notre Dame and is an alumnus of the Stanford executive program. In September 2000, Notre Dame named their business school after him and it is now called the Mendoza College of Business.

Please join me in welcoming Mr. Mendoza to share his insights on building a high-performance, customer-oriented culture. Thank you very much Tom for being so gracious and generous in giving us your time this afternoon and I can see you’re also enjoying the Florida weather behind you.

Q&A after his talk:

Mr. Tom Mendoza:

So Raj, let’s open it up.

S.P. Raj:

Thank you, Tom. Very inspiring. Thank you. Very inspiring and informative. I’m going to ask, turn it over to Professor Athaide to ask some of the questions he’s received.

Prof. Gerard Athaide:

Great. Tom, Tom, I echo what Dr. Raj said. Very inspiring. Thanks a lot. I’m going to transition to a couple of questions related to this marketing class. The one question I had for you as we start up is how did this internal culture, with all of the tremendous attributes you, you both inspired and sort of nurtured, translate into taking care of your customers? And, and how did you, how did you see, sort of the, the customer metrics play out as customers got back to you with kind of the remarkable things that this culture enabled you as a company to do that I’m sure your competitors could not match?

Tom Mendoza:

That is an awesome question. Truly. Because that is actually why we were so successful. You just hit it right on the head so I was asked, I guess, I was talking to Stanford Wednesday night. Their Stanford Executive Program which are you know people who go into an for an MBA types. And somebody said to me, “If you had to rank these things as your primary focus, how would you rank them?” Your own employees, your, your shareholders, your own employees, and your customers. And I had a difference of opinion with our CEO in that Dan always said, number one thing is our shareholders, our own people. But and I said I don’t agree with that. Our number one thing is are our own people and customers in that order. And the reason I put it, and the reason is if our own people are happy and they’re very, very excited about what they do, the customers are going to feel that. They’re going to see it. And if, by the way, one of the things we’re excited about is making our customers successful, that was our mantra. We have to make our customers successful. We’re selling, we’re holding their data. If they have a problem, even if it’s not our problem, solve it, then tell them how you solved it. Don’t get them in the middle. But their businesses are going to stop. So you can imagine that tension if anything was wrong. And it’s always been my belief that if your own people are excited and committed, your customers will benefit from that, and your partners will benefit from that. And if all three of those are true, your shareholders will benefit from that.

I think if you focus on shareholders first you make a lot of bad decisions. Cut expense, do this. All you looking at is bottom line stuff let’s buy-back shares. Doesn’t create any customer value. So the reason to have a culture like this is that customers benefitted from it. I had, when we were voted the number one company to work, a guy named Guy Chiarello was a legend on Wall Street. He was at the time the Chief Information Officer at JP Morgan Chase. Which was this probably the largest technology buyer, definitely in the financial sector in the world. And he said, he sent me a message that day and he said, “Not at all surprised that you were voted the number 1 company in the United States”. We were number 1 in ten other countries, by the way, in the top ten in over 40 countries. So we don’t want to just be a great place to work in America, or Silicon Valley, we want to be a great place every single place we did business. So by having that focus. And so when we get our, our executive staff meetings were always about, always looking at customer satisfaction always.

And let me tell you a quick story about what I knew we’d really, really got what are we supposed to go. And our competitor actually did a good job with the customers. Not so good with their own people. Their own people. I thought they bullied them a lot. We had an account that we’ve just cracked, Thompson Reuters, the largest account for our competitor in the Midwest. Gigantic account, 200 million a year. And I went there and they felt like they were in trouble little bit buying that equipment because it’s very complex to use, cost, that’s why they were spending so much and their competitors are much more agile than them. They were able to, Thompson Reuters has the number one search firm for legal stuff. So if you’re a lawyer and you gotta look up something, you go to Thomson Reuters. And the way they knew if they were having technology problems is that competitors’ business skyrocketed because they just go search that.

So, they were looking for a faster, cleaner, simpler way of getting that data done. That was, and we had that solution. But it was a big risk in their mind to switch vendors from someone they had trusted that it was, so they weren’t really unhappy with them, but they felt like their businesses are being restricted and potentially threatened because of the complexity they were buying into. So they bought into us and we shipped them a bunch of equipment. They said we have to have it by December 31st. Critical. And I got a phone call on about the 23rd of December, I remember right at Christmas, that the truck had turned over and all the equipment was destroyed. And this is going to be extremely hard for us to make more equipment for them and get it there on time. And I’m trying and I’m starting to who should I call, who should I call. And I got a phone call from the rep on the account. He said that was the most incredible thing I’ve ever seen. I said “what was?” He said, “I know you approved it.” You know, I actually wanted to act like I was doing something, but anyway, he said Mark Bluth who ran manufacturing, heard about this, he got the equipment and he, he took a 747, 250 thousand dollars, and he put the equipment on there and we made it.

And the thing I was so thrilled about, there was no need for me to get in the middle of that conversation, but almost any other company, A, wouldn’t have done it and B, it would have been all kinds of people worried about who’s gonna get blame and I don’t know if I can make it. This is the manufacturing guy knew that the only way, because we were very public about how important this account was, and that guy took care of it himself. So when I would meet with customers, I’d always say you can get to me anytime you want and I meant it. But, I’m going to bet that you don’t have to unless you want to, because our team’s empowered to make sure you get what you need. And he said, and that was true. The same Guy Chiarello when he was, he used to invite me to his, at once a quarter, to would talk over technologies, these are tough guys on Wall Street. And he told me about another firm that was, it was a very popular firm in another part of software, So would you talk to their CEO? He said, the reason I have you here is you listen and you guys and you guys have actually done things unique to help us and you’ve actually helped us create business. And they used to and now they kinda fallen off. I think if you talk to him would help and I did and it actually did help; but he, that’s how he felt about, that’s how customers would say it to me. You have such an interest in my business. So we’ve always told people it’s not about what we’re selling, it’s about what problem are we solving and make sure it’s solving a significant problem for them and then solve it. Don’t, we will not let him down. And your employee knows that if they commit and we have issues, we’re not letting them down. If we have to turn it upside down.

Prof. Athaide:

Fantastic. Thanks, Tom. And again, congratulations on your number 1. Given what you just told us, it’s no surprise. We do have a couple of questions from the students that I want to make sure we get to before, we before we run out of time. The first question is, So what was your most rewarding moment as Chairman of NetApp, as Vice Chairman of NetApp?

Tom Mendoza:

I think my most rewarding movement was the one I just said when we were voted the number 1 company. It was so sweet. I just got back from Japan, my phone blew up and it was like, Wow, number 1 company in America to work for. And that’s of all, all companies. You know enterprises, significant companies. And it was just such a, you know it wasn’t like we did it, someone else, it was, a lot of it was blind surveys and included your customer feedback. So I’ve always felt that if people feel like you have their interest at heart, we’re going to do a lot of business forever about. So that, that definitely was the most. And then there are other big wins we had that, you know, monster wins that we’re able to bring in along the way that were critical at the time. The proudest I am of what we accomplished at NetApp, that was coming out of the disaster of the dot com bubble and recreating. And by the way, many of the people who had to leave at the beginning came back because we grew very fast and then they many of them came back. I always feel like that was something I’ll be proud of for the rest of my life.

Gerard Athaide:

So the next question, Tom, is more a question about career discernment and, and basically what kind of advice would you give in terms of career discernment to someone who’s kind of not sure?

Tom Mendoza:

First of all, I love, you want to do something you love. If you love it, you’re probably very good at it. Marketing is a very good career. Marketing is and, you know, it’s different in different industries, right? Marketing means different things in different industries. In tech infrastructure, it’s one thing now it’s social, it’s a completely different thing where marketing is a big part of the game. You see what’s happening now in crypto and marketing. I think marketing is a skill that if you’re very, very good at it, like anything else, you can build a great career. And when you’re thinking of a career, I just suggest when you started off with “I love marketing”, that’s a great start. I would also say, while you’re in business school or while, you’re in a school, I would just try to round out to other parts of it. If you’re really good at marketing, get a little financial, make sure you understand accounting. Accounting, you don’t have to be an accountant, but you’d like to understand that part of the business. It just helps you be a little more rounded as you go forward and especially if you want to get into some kind of leadership. But, if you really love, if you love marketing, if you love finance, follow it. You know, there’s so many people that have gone to law school and don’t become lawyers, but that training they’ve got has helped them throughout their life. I think it’s a great major.

Gerard Athaide:

Thank you, Tom, and, perhaps as we get to the end here, so Tom, you’ve talked about your 5 characteristics from embracing change to candor to leadership, to of course attitude, but can you maybe leave the students with some advice regarding the habits they should focus on as they spend the next two and a half years here in Syracuse? Maybe some of the good habits to cultivate that will allow them to get to where they need to be in terms of embracing change, candor, and leadership and attitude.

Tom Mendoza:

Yeah, I would say two things. One is choose your friends wisely. Try to, use this time in college to network. Meet people who are interesting, they are maybe different than you. But you know, you get to, who you choose as your friends and the network you build in life has an awful lot to do with how your life ends up. So use this time wisely. You have, you have tremendous access to a lot of smart people. And you have both professors, alumni, students. I would, I would make sure you take advantage of it while you are there. People who don’t, look back and wish they had. So I did a video and a article for Forbes.com. You can look up my name in Forbes.com and look up 90 day goals. Changed my life.

I did it in 1989 and I came up with the system. I’d take you through it very quickly here. But the answer to that question is, I think you should have goals that you are setting for yourself that you continually monitor and raise your expectations of what you can accomplish. So I, I came from very modest background. Me and my family had no money, my parents didn’t get to go to college, my dad went into war at 16. Neither of them could go to college. And so there was no expectation and I had nobody around me that went to college. There was no expectation I would do anything great with my life. So I had to come to that myself. I had to create that expectation in myself. And there was a point where I was like, man, I’ve already gone fast, further than I thought and I was at Stanford for their six week program back in 1989. And then I saw a Yale study of people who have time-bound measurable written goals. High-performance people, something like 90 percent have it, and less than 10 percent of (all) people have that. Time-bound measurable written goals. So I set a system up for myself which has changed my life and many other people that work for me are 90 day goals. And I’d kid but this is not really kidding, I started with six months goals and nothing for 90 days, so okay, 90 day goals. And personal and professional, three personal, three professional. So three academic, three personal I set and so on. The personal, it’s a simple question I would ask myself, “If I do, what do I feel good about me?” I put three things that you can measure, It’s gotta be measurable, 90 days is the time down and I wrote it down. And by definition, if I accomplish those things in the next 90 days, I am going to feel good about me.

Quick aside, my dad got very sick, he had a thing called Lewy body disease, which covers Alzheimer’s, Parkinson’s that Robin Williams died of. And we started not to communicate. And I made it a goal that I would talk to him three times a week for 45 minutes or an hour or whatever regardless of the fact he couldn’t communicate back. That was the most painful goal I’ve ever given myself, but when he passed, it made me feel extraordinarily good about myself, that I was doing it. So it’s just meaningful to you. Doesn’t have to be meaningful to anybody else but it made me feel good about me. So three personal that you’re going to do in 90 days and then three, could be school oriented or in my case it’s professional. On the first ones, I never shared with other people because I wasn’t trying to convince people I could make goals. I wanted to raise my expectations of myself to myself. And then the second piece was, what am I going to do to make an impact in the next 90 days? That’s in business. You can think about what you might do in your school. What am I going to do in the next 90 days? I’m going to make an impact, I’m going to push myself further. And then I would take a step back and I’d read it, one, usually a day later, and as I read it, I asked myself one question after I read every line, “If I do that will I be proud of myself?”

The biggest breakthrough in my life was realizing I need to make myself proud of me, not my wife, your boyfriend, your girlfriend, your family. Yeah, they’re important but long-term? If you say everybody is proud of me but me, that’s not going to be a good outcome. So I started to say, “What am I proud of myself for doing that?” And I’ll give you one simple example. I wasn’t working out, I was flying so much, I said, I don’t have the time, which is ridiculous. That just means I didn’t make it a priority. So I wrote it down, you know I’ll get on a treadmill 30 minutes a day, three times a week just to get going. And when I re-read that, I said, No and I made it 40 minutes. And I’m like, a lot of people said why don’t you make it two hours, seven days, well you’ll quit. You’re gonna pull muscles, screw this. When I got past 30 minutes, my life changed. It’s like… And then I started to raise the things. After the first 90 days, I made four out of six. Sounds terrible but I felt so energized because I was driving my own behavior.

You know, you always going to be busy, but the question is Are you busy on something that matters, that makes a difference? And what matters to whom? Matters to you. Are you moving ahead? So I did two things. Number 1, I made all those things into appointments with myself I wouldn’t break. So that you know if somebody says I need to meet you at 7:30. I’ll be like okay, but you had I’m going to work out. Where I went to is you know if I have an appointment, I’ll break it if you really need me to. Almost never. They said no that’s alright, let’s do it at nine. Okay. And then the second thing so make an appointment, I wouldn’t break. And then the second thing was when I would review it, I would always commit to myself that no matter what, I would put everything in it. You’re gonna do other things, but these are going to get done. This is an important thing to me. And I started never missing. And my expectations of myself skyrocketed. And I kept doing more and more and more. I believe that’s a part of why I was eventually successful.

Thank you everybody for your time. Have a great weekend.

Tom Mendoza, Vice-Chairman (emeritus), NetApp
Marketing Day 2021
Supported by the Gail and Mark Andreae Marketing Program Fund