From Microsoft to Olympia: Q&A With Rogers Weed, New Washington Commerce Chief

4/15/09Follow @xconomy

Olympia, in the view of many entrepreneurs I’ve talked to over the years, is practically a code word in this state for “bureaucrats out of touch with what it takes to run a business.” So when I heard Gov. Chris Gregoire turned to Rogers Weed, a former Microsoft vice president, to be in her cabinet as the new director of the state’s commerce department, I figured he might bring a fresh perspective on what can be done to patch up this notoriously tense relationship.

First, a little background on Weed. He’s a lanky guy, 45, who lives in Seattle with his wife and three sons. He was raised in South Carolina, and still has a slight Southern accent if you listen closely. He got his bachelor’s in computer science from Duke University, and when he decided he wasn’t cut out for hard-core computer programming, he poured his energy into business. He did a three-year stint at Bain & Company, the Boston private equity firm, and got an MBA from the Wharton School at the University of Pennsylvania.

It was still in the early days of the PC revolution when he came to Microsoft in 1990, during his mid-20s. Over his career at the Redmond software giant, Weed took on a variety of management challenges there that included stints in online media as publisher of Slate magazine, and in Windows. His proudest achievement there was in helping Microsoft catch up and grab market share from Palm, which had taken the early lead in the world of handheld organizers. He left the company two years ago, and since then has gotten interested in alternative energy, partly through work with Climate Solutions, a nonprofit organization.

Weed’s new full-time job is to run a state agency with a $2 billion budget, and 180 different programs to administer. The department, still called Community, Trade, and Economic Development (CTED) become “a catchall for programs from emergency food assistance to control of lead hazards,” according to this story from The Seattle Times. Weed took the job as director on St. Patrick’s Day, so he’s still awfully new and hard to put on the spot. But I spoke with him for about 25 minutes last week at the Washington Innovation Summit in Bellevue, and got a good feel for how he’s approaching this important job at the nexus of business and government.

Here are edited excerpts from our conversation:

Xconomy: How did you get this job? Did you have connections to the Governor or participate in the campaign, or just send in a resume?

Rogers Weed: I just sent in a resume. I heard nothing for several weeks, and thought it probably wouldn’t happen. But then I did get a call, saying they’d like to interview me. I got a panel interview with seven people. They told me after that, it may be a number of weeks because they had other people to see, and because of the Governor’s schedule. Two days later I get a call, asking me to come down and see the Governor. And I came. And she offered me the job. On the spot.

X: How do you like to think about solving problems? What is your gift?

RW: One of them is empathy. I’m pretty good at thinking about other people’s perspectives, and being able to meet them in the middle about what their needs are and what I’m trying to get done. That’s a strength. I also like to brainstorm problems. I’m a pretty good idea generator. That’s what I’ve been told in my performance reviews over my career at Microsoft. I’m pretty good at framing up problems that aren’t well-framed. Working in a complex organizational setting like state government or Microsoft, if you don’t have some empathy, you struggle.

X: Why did you take this job?

RW: We are in an unprecedented time in the economy in our lifetimes, and I saw an opportunity. As I talked to people about the job, what needed to happen was there needed to be a tighter connection between Olympia and the private sector. Over 80 percent of our economy is private-sector driven. Businesses contribute over half of the tax revenues to the state. We’re not going to get out of this recession without the private sector leading this. So how is government best going to help that? You need a tight connection on what the priorities are, and how the government can help. I see an opportunity to bring my background in and help tighten up that connection.

X: What do you mean by that? Do you mean educating lawmakers about real-world business concerns, or is it educating the business community about what they can and can’t do in Olympia?

RW: It is partly bringing to Olympia the private sector perspective on different policy things they are thinking about doing there. If they want to pass a law that does a certain thing around worker rights, well, how’s that going to be received in the business community and what are the impacts? It’s not my decision about whether our unemployment insurance is higher or lower. My job is to make sure the legislature and the Governor understand where we stack up, versus other states and countries that we compete against. Because we are competing against all of them, all the time.

X: CTED has a very broad mission. What has it really done historically, and what are you going to try to change about the agency?

RW: One of the things that struck me coming in, is that CTED administers 180 programs for the state government with a staff of about 370 people. So that to me is pretty impressive. They obviously have a reputation for being able to do some things fairly efficiently. The flip side of that is, ‘Wow, there are 180 programs in CTED, that’s kind of a kitchen sink.’ I’m new, so I don’t know all the reasons that’s ended up that way. I know the Governor would really like to have a focus on business and job creation from me. The plan I have is to engage with the agency and the stakeholders to think through what that means this summer.

There are some people that want to reorganize CTED right away. Most situations I’ve been in, you want to figure out your plan first, and then figure out the right organization you need to pursue the plan. I’m trying to say to people, ‘Let’s get a thoughtful plan together first and then think about how we organize to achieve that.’

X: What are two or three of your best, specific ideas for how you create jobs in this climate, or what your agency can do to help?

RW: It’s easy to say we need more money to do this or more money to do that. I’m not ready to say that’s true yet. I think there are things we can do in terms of policy we create, and how it affects the cost of doing business in the state. How much red tape is there in registering with the state, paying your taxes, getting permits to do things, and are there opportunities to streamline that? The easy thing to say is, ‘We need more money so we can invest in more things’. That may be true, especially with the budget cuts we have. The other thing is, ‘How can we be smarter with the money we have?’, and look at things that may not involve money but are still very important to business. How do we reduce the friction that comes with being innovative and doing business in the state?

X: You mentioned at your talk that you subscribe to three principles in terms of how you think about innovation. Can you explain those?

RW: Since I just thought of them last night, I don’t know how much detail I can give you. But there are three. “Invest in the Inputs”—that’s education, workforce training, infrastructure, business attraction, and recruitment. Then there’s “Champion the Culture.” I don’t think it takes a lot of dollars to do that. You can shine spotlights on the kind of things we want to do more of in the state, and celebrate those things. Recognize them and reward them. That’s not a lot of dollars, but super-important. The third one is “Minimizing the Friction.”

I talked to a friend of mine right before I took the job, who had just wrapped up a small company he had started. He had not made it. He said, ‘If I could have just written a check to the state for the first 18 months of B&O [Business and Occupation] tax, and not had to do any more paperwork, I would have been happy to overpay, and just be able to say, ‘I’m good with the state government, now let me focus on getting my business off the ground.’ So I don’t know all the details of the challenge there, but it’s a good place to start. Then we can streamline as much as possible for business.

X: Can you explain a bit of this culture idea? You want to recognize people doing innovative things. Do you also want to make it more acceptable to take a risk and possibly fail?

RW: I think that’s part of an innovative culture, absolutely. I mentioned this earlier in the reference to the Andy Grove thing (the former Intel CEO who authored a book “Only the Paranoid Survive”). I’d rather come at it from an enthusiasm and opportunity standpoint instead of from a fear standpoint. I think we’re going to get better results that way. How do you develop an environment in which people are excited by change, not fearful of change. Well, I don’t want to pick on Andy Grove, but when your title is “Only the Paranoid Survive” I think that makes people want to crawl in a hole and just hope it doesn’t hit them before they get through life. Instead of framing it in terms of the opportunity and success you can have when you embrace change. I’d rather think about how we do that.

X: Which industries are you particularly focused on, in which you think Washington has a real opportunity to do well?

RW: One analogy I’ve used is that just like a big company like Microsoft has different lines of businesses within it, and ultimately has to have a portfolio strategy about how it manages those lines of business, our state is like a giant portfolio of industry sectors. I’m interested in how we think about that in a portfolio way. Where is the life sciences sector in its evolution, and what are its needs for investment and stewardship? How are those different than a mature sector like aerospace? It might have different priorities in terms of what it needs from the state. That’s one concept I want to explore, to implement a strategy and oversee a range of activities from the state’s perspective.

I have two priorities, very short-term, on the job in terms of things I have to figure out and get them going. One has been the stimulus opportunity around energy. I love the work Maria (Cantwell) is doing, and the focus that’s getting is appropriate. It’s one of the single biggest opportunities we have to invest in our state in the next year or two. So how do we organize to do the best possible job of getting some of the federal energy-related stimulus money? That’s one.

The second one has been Boeing. For me, that starts with a lot of education, because I don’t come from the aerospace industry. So getting educated, figuring out how I can plug into a situation that’s been going on a long time, to try to inject some new ideas, and some new enthusiasm for getting that relationship into a great place. And Boeing is symbolic for aerospace as a whole. It’s obviously the leader. How do we make sure we have a good relationship with that company, because as that goes, so the whole aerospace sector will go, to some extent.

X: Have you set any specific goals in terms of job creation and growth?

RW: Not yet. I’m focused on those two priorities I just mentioned. I’m also thinking about getting to the end of the legislative session. That’s been another part, meeting all these legislators, and getting their perspective, and getting in the mix on some legislation that’s pending. As that session wraps up, and we think of the implications of it, and the energy stimulus and Boeing issues get on track, the next thing will be to work through a plan for the agency, and work through a stakeholder process. We need to update the plan. That will go on this summer.

The rhythm of the year for state government is planning for the budget in the summer and early fall. We get those proposals in to the Governor in what ultimately results in the Governor’s proposed budget. Then the legislature comes in and brings their perspective. Ultimately we get a budget at the end of April, and we start executing. It’s perfect timing in a way.

At first, I thought I couldn’t have picked a worse time to start. Because I’m starting in the middle of legislative session where I don’t know anybody, and everything’s happening. I’ve actually become more sanguine about that lately. In a way, it’s been good to come in and right away see the endgame before I start at the beginning with the planning. I’m actually glad now that I came when I did. Planning will kick off in the middle of May.

X: So you’re getting to know people you need to know in the legislature. Who are some of your confidantes in the business community, people you lean on or stay in touch with?

RW: That’s developing very rapidly for me. I have a set of people I’ve known at Microsoft, and people I’ve met while thinking about energy. But I’m meeting lots of great new people that I know will offer important support and guidance. That network is forming rapidly. I certainly have lots of connections in IT and the venture capital area, because a lot of friends of mine at Microsoft became venture capitalists. In the energy area, to some extent, I’ve networked in that area the last year or two. But aerospace or broader economic development issues, there are people who have been thinking about this for decades. I’d be foolish not to tap into their wisdom.

X: What can the business community do to help you and your department?

RW: The biggest thing for me is engage with us. I heard somebody say once the opposite of love is indifference. If nobody cared, that would be a bad situation. I need the engagement of the private sector. The good news is that I’m getting it. People absolutely care, they want to be involved. That’s what I need, is their engagement. I can’t figure this out by myself, and neither can my agency.

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