- Business Insider/Michael Seto
- Peggy Johnson is the executive vice president for business development at Microsoft.
- Before Microsoft, she spent 25 years at Qualcomm, on the technical side as an engineer and on the business side.
As “deal-maker-in-chief,” Peggy Johnson gets paid millions to help make Microsoft billions.
Her actual title is executive vice president for business development, and she’s helped lead over 40 investments with Microsoft Ventures. One deal was the acquisition of LinkedIn – for $26 billion.
“It takes an army for sure,” Johnson said on Business Insider’s podcast, “Success! How I Did It,” about making those investments. “Clearly, one of that size needs to be assessed fully, and we have fantastic teams across the company who are so good at that assessment.”
She joined the company three years ago after spending 25 years at the telecommunications company Qualcomm. Microsoft CEO Satya Nadella personally called her on a Saturday to get her on board.
Business Insider US Editor-in-Chief Alyson Shontell recently caught up with Johnson at the World Economic Forum, in Davos, Switzerland. On this episode of “Success, How I Did It,” Johnson talks about making it to Microsoft and how her team decides which companies to invest in or acquire.
Listen to the full episode:
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- BBG Ventures President Susan Lyne
Following is a transcript, which has been edited for clarity.
- Business Insider
To understand Peggy Johnson and the qualities that have made her successful, you have to know about her family. She was the 14th of 15 kids. As a child she was a quiet listener who learned to read her siblings’ facial expressions from the kitchen countertop (with so many people, her chair wouldn’t fit around the family table). Eventually Johnson followed some of her brothers and sisters to San Diego State University, where she started studying business, even though she really loved math and science. It was there that a chance encounter changed her life’s trajectory.
Peggy Johnson: My parents had two rules: You had to go to college, and you had to pay for it yourself. So we all did. I was delivering mail and happened to deliver mail to the engineering department one day. Two ladies at the end of this long hallway with linoleum floors could hear me coming, and they were super excited to see me – like more excited than they should’ve been just because I was delivering mail.
It was because they thought I was there to ask about engineering. And they were disappointed. They said, “We thought you wanted to know something about the School of Engineering.” I said, “Nope – just delivering the mail.” They said, “Well, do you know anything about engineering?,” and I said, “You know, absolutely nothing.”
No one had ever really talked to me about engineering, and so they asked me the same question, “Do you like math and science?” I said, “I love it.” They just started to work on me, and after 15 to 20 minutes I felt, like, “You know, this might be something I want to do.”
The next day I changed my major to engineering – yeah, to electrical engineering.
Alyson Shontell: Wow.
Johnson: I credit those two ladies. They just, you know, worked on me and changed my mind.
Shontell: They changed your life.
Johnson: My life. The whole trajectory of my life really changed in that conversation.
Shontell: So you wound up getting a job at GE after this great electrical-engineering major. And you spent a couple years there.
Johnson: Yeah, I started as an intern while I was still at school, and again, San Diego State put me on a great course because they had a number of great internship opportunities, and this area of General Electric was in their military electronics division. I worked on anti-submarine warfare for surface ships. So it sounds very interesting, I’m sure. You want to know more about that, but I can’t say anything because I had a clearance.
But it was a job I might still be in today if not for it seemed like it was going to move to Syracuse, New York, and of course I was in San Diego, California, but I didn’t want to move, and well, “I’ve got to look for a job here in San Diego,” and ended up saying no to GE.
Johnson spent 25 years working her way up the ladder
- Thomson Reuters
Shontell: Is that when you went to Qualcomm?
Johnson: Yes, and I just answered an ad in the newspaper, which they don’t do anymore. You probably never even heard of that, but yes, that’s how you used to get jobs, look through the newspaper.
Shontell: In the classifieds.
Johnson: The classifieds, and there it was. It was this new company, and they were hiring, and my husband had had an internship at the predecessor to Qualcomm, called Linkabit. He said, “You know, Irwin Jacobs is an amazing man.” He had owned and been in Linkabit, and he said, “I don’t know what Qualcomm does, but I think you should – “
Shontell: He’s the founder of Qualcomm?
Johnson: Irwin Jacobs is, yeah. And so prodded by my husband, who was at that time pursuing his master’s degree, and we were married, and one of us needed to work, and that was me. So I went in, had an interview. Hardest interview of my life, and ended up getting the job, and stayed there for 25 years.
Shontell: Yeah, it’s incredible. But while you had a long career there, at first it seemed as if you were soft-spoken and it was hard to kind of get your point across in a loud room with those guys.
Johnson: It was.
And I’m soft-spoken probably going back to the family experience. Number 14 out of 15 wasn’t an enviable position to be in. You were just one of so many voices at the table, and I was one who had to sit at the side table. So I was at the kids’ table until I was, like, 24 years old.
So I was more of a listener, and I was quiet largely because I couldn’t ever really break in to that chaos at the big table. But I was a listener and I would watch people, and I would try to understand their mood. Those skills were what I brought into my job at Qualcomm, and maybe not great skills, because when I got to Qualcomm the expectation really at that time was, “You need to speak up more. You need to be more assertive in meetings. We want to hear from you more.” Whenever I did that, whenever I tried to be what I wasn’t, it didn’t really turn out very well, and I didn’t feel very authentic, and in fact people would kind of look at me – “Why is she being so assertive and aggressive here? That’s not like her.” And it wasn’t. It wasn’t my authentic self.
So pretty much I had decided, “I think I have to leave the industry, the company. I’m just not suited for this.” My manager at the time said, “No, we are going to figure this out. You’re going to stay right where you are,” and really I credit him for making a lot of changes in the HR department at the time because we were ranked by certain attributes that I didn’t have. So I remember being marked off for not being aggressive and assertive in meetings, and he said, “We are going to change this, and we are going to make sure we have a broader set of qualities that we’re looking for.” Things like teamwork and being collaborative, and he really pushed. It was early, early days, and things changed from that point on. Once I was able to be my more authentic self I felt like that’s when my career really took off. I was just my own voice.
Shontell: Yes, so he sort of gave you permission to be yourself and helped you find your own leadership style.
Johnson: He did, yes. I always credit him for that because I might have just left like, I think, a lot of women did at the time. They just didn’t feel comfortable and it didn’t feel like a very inclusive environment, and he helped change that.
Shontell: So you go on to stay for many, many more years at Qualcomm – 25 years.
Shontell: What made you so dedicated to that one company?
Johnson: Right, yes. So first of all, Qualcomm’s a great company, and they gave me the opportunity to really thrive in a number of roles. So I was an engineer to start with, and I was in the engineering department for several years. Then I had been going out on business trips because we needed to explain the product to the industry we were selling into, and on one of the flights home the general manager happens to be sitting next to me and he said, “I don’t understand. Why don’t you just come over to the business side? You really seem to love doing that, and I like the way you translate the technical world into the business world. I think you could be well suited for that.”
And I thought, “Well, thank you very much but no, thank you. I’m an engineer.” I identified with being an engineer, and I remember thinking engineering at that time at Qualcomm was in one building, and all the business people were in the other building, and we made fun of them all the time because they dressed up, and we got to wear our Qualcomm shirts and jeans. We thought we didn’t want to have anything to do with that world, but it started to weigh on me, and probably four or five weeks went by, and I remember sitting at our holiday party, and all of sudden I had one of those aha moments, and it was:” “You need to do this. You need to make that leap.” Because while I liked what I did, I loved being in front of the customer. So I did, and I moved over into program management, which is sort of a technical and business role, and that was really the start of my business career at Qualcomm.
Shontell: So you switched from engineering to the business-development side, and that’s when things really took off.
Johnson: Yeah, and I think part of it was the time. It was early days of the mobile phones. We were making the digital standard that was eventually embedded into mobile phones in the US, and so everything was exciting and new. We were forging new paths, and it was such a great time to be at the start of a business. None of us had any idea what it would turn into. I don’t think any of us at that time envisioned that everybody would be carrying cellphones. I mean, we thought, “That’ll be a good business. Maybe a few million of those will sell.” So it was fun to be there at the start of that, but I had great managers along the way, and any time I wanted to do something different they really supported me.
Shontell: And switching careers isn’t easy. I mean, it’s a big risk.
Johnson: Exactly. It is, and you’re not quite sure, and if it doesn’t work out, can I go back? Once I switched over I had to learn a lot. Clearly I didn’t have a business degree, and a lot of it was on-the-job learning, but I had some great mentors and folks who leaned in and helped me. And I just loved every hat I wore after that point, until I moved on to Microsoft from Qualcomm.
How Johnson decided to make the leap and start a new career at Microsoft
Shontell: It sounds like you had a great setup. You established yourself through the ranks, had great mentorship. So Microsoft calls. You’d been rejecting other calls before, kind of just hanging up the phone on recruiters. What was it about Microsoft?
Johnson: Well, I wouldn’t call them back. I wouldn’t hang up on them.
Shontell: OK: You were polite about it.
Johnson: That’s it. But it was one of those interesting times. I hadn’t ever called any back because everything was great at Qualcomm. I loved it, and also I was living in San Diego, my family was there. Everything was fantastic, but at the time of the industry Satya had just taken over, Satya Nadella, as CEO of Microsoft. We did business with Microsoft. We sold them chips, and so we know, of course, of Microsoft. We didn’t really know Satya, and one of the first things he did is he decided to put Office on IOS and Android phones, and that blew us away. I mean, probably not just us in Qualcomm, but the industry.
That was quite a bold move, and so when I got the call from Microsoft they said, “Well, it’s a job reporting to Satya. You’d be running business development.” I thought, “I just want to call back to understand what it’s about. The company seems to be in this big transition, and I just want to learn a little bit basically.” But of course was never going to go anywhere. I lived in San Diego there wasn’t any question that I was going anywhere. When I called back I was just drawn in, and eventually I had a conversation with Satya.
Shontell: He called you on a Saturday.
Johnson: He did, yeah. He did, and so I was chatting with him, and again it was kind of like another aha moment. He was talking about his world view of a mobile-first, cloud-first world, and all of a sudden it just connected with me because obviously I’d been living in a mobile-first world, a wireless world. That was what I knew inside and out. I felt very comfortable in that world. Then when data left the phone it went off to that thing called the cloud and Qualcomm didn’t have much to do with that. As he was talking about this idea of ambient computing and having intelligence everywhere it just clicked with me that this is something I need to know more about, and I wanted to understand more about Satya’s vision, and eventually took a trip to Seattle.
I remember getting on the plane in San Diego feeling like, “I hope nobody sees me because I’ve never done this before. I’m gonna go visit another company for a job possibly.” And had a chance to meet the rest of the management team, and then to sit down with Satya. His vision to empower every person and organization on the planet, to achieve more, it just struck me, and it resonated with me, and I ended up saying yes, making the move with my family. We had only one child at home at that time, and so we moved up to Seattle, where I live today.
Shontell: He’s done incredible things with Microsoft.
Johnson: He has, absolutely.
Shontell: What’s he like to work with?
Johnson: Very empathetic. He’s a listener. He’s a learner. Curious. We’re allowed to fail, learn from it, but it’s super important. He’s really changed the company at its core, and we are following a growth mindset, which he introduced to the company, and I feel like whenever we sort of get off path a little bit, we come back to the growth mindset. We’ll say, “Are we exhibiting a growth mindset here?” You know? It’s easy to say no. Any idea you can have 10 nos. It’s a lot harder to say yes. So the growth mindset allows us to push boarders a little bit, and to say yes more, try things out, fail fast. I believe it’s changed the core of the company, and I hear that from others outside, which is very gratifying. But what’s so exciting is that the campus is energized, and it’s just been a wild, crazy, fun ride for the last three years.
What it takes to be Microsoft’s deal-maker-in-chief
- REUTERS/Robert Galbraith
Shontell: So it’s been three years. You’ve done a lot. One thing that stands out: You worked with a big team on the LinkedIn deal. Microsoft bought LinkedIn for $26 billion-plus.
Johnson: Yeah: $26 billion.
Shontell: So how does a $26 billion deal happen? How long did it take? What happens behind the scenes? Because most of us don’t get to that level.
Johnson: It takes an army, for sure. I mean, I would say the evolution of an acquisition that big has to go through many, many gates, and it starts with sort of conversations. It starts with a strategy. “Are we the better owners?” Looking at it from all different angles.
Clearly, one of that size needs to be assessed fully, and we have fantastic teams across the company who are so good at that assessment. Also, the engagement, once we decided to make the decision to go forward, the engagement with the company, the integration part, which is super important. You can make all of the great strategic assessments ahead of time, but if you can’t integrate well after, you’ve lost a lot of money. The teams at Microsoft are just first class at that.
Shontell: So is it a 10-month process? Faster?
Johnson: I can’t remember. There were conversations for a long period of time, but then once we sort of pulled the trigger, I want to say – I don’t know – maybe it was somewhere between six and 12 months. I can’t quite remember from the time of the first conversations until we announced that we were going to proceed with an acquisition.
Shontell: When I saw the headline, and we were writing it on Business Insider, it was like, “Oh, whoa. This is a huge deal.” It went totally under the radar. You didn’t get scooped.
Johnson: Another thing that I think we did a very good job on … because obviously a team that size inside the company did a very good job of keeping things quiet on both sides. Including the transactional folks in between. So all of that had rolled out very, very well. It was sort of the example of how you’d like to do an acquisition.
Shontell: I’m sure you say no, of course, much more than you say yes. One that stands out is Slack, I think, was an opportunity to buy, and I think Microsoft ultimately passed, along with some others. On a deal like that, how do you weigh it?
Johnson: Well, without commenting specifically on Slack, I would say for any acquisition we ask that question, “Are we the better owners? Does it fulfill a strategic gap that we have?” Because many times a partnership is even better oftentimes because to be an owner you have to be all in, but if a partnership can work to fill a gap, we’ll go that route. Sometimes we’ll make an investment in a company because they’re on a quicker path to filling a gap, but they may need a little help in the form of resources to get there. Then finally if the right answer is, “Yes, we are the better owners,” we’ll go the full way and go forward with an acquisition.
So we do sort of an assessment that way, and we try to be very, very disciplined, and stick to our core ambitions, and not go too far off of that, because that’s where you get into trouble. So we talk ourselves in and out of things often.
Johnson explains how to be a good leader
Shontell: You’ve said that prioritization is a skill that you learned really early on. Do you have tips? How do you figure out, in a job as huge as yours – I’m sure you have a million different things that you could be doing – how do you focus, and how do you zero in on the right things?
Johnson: Well, I think I learned it from my mom, who is probably the program-manager-in-chief to run a house like that. Because one of the things she used to say is, “We may have 15 kids, but we’re not gonna be a messy house. When people come in the house we don’t want them to say, ‘Oh yeah, this is what I thought a house with 15 kids would look like.'” So she was very disciplined. She made lists – and I love lists – and checking things off the list always feels good.
So I learned sort of that prioritization from my mom, and that it’s not important to get everything on the list done but really to make sure that you set out in the morning to get the top ones done. That’s what your focus should be. You shouldn’t be stressed that you didn’t get to the bottom of the list. She was very good at that.
Shontell: Another skill of yours is you’re great, from what I’ve heard your coworkers say, you’re great at building these relationships that last a long time. Especially in that business – it’s so critical to have that. How do you do that? What are your tips for building long-lasting work and general life relationships?
Johnson: I think it goes back to that family table when I was the listener in the room, and that is something that is probably a little bit underrated, but for me has been, I feel like, the core of my leadership abilities is the ability to listen, and to deeply listen, and to understand and put myself in the other person’s shoes. Once you do that you can solve whatever problem there is on the table whether it’s a business problem or a technical problem, I think, more quickly having that ability to put yourself on the other side.
Shontell: Then I have a kind of more general landscape question. I think someone asked you once what you thought the biggest issue women face in the workforce is, and you said harassment. Certainly we’ve seen a lot of stories about that this year, Harvey Weinstein on up. What do you think we can do better? How do you think we can fix it? What have you seen that makes you say that?
Johnson: Well, I just feel like you should be able to have a respectful work environment, because if you do you’ll be your best self. You’ll bring your best self to work, and over the years there was always that whispering at work when there was people you avoided because you didn’t want a comment about your dress or something, and I think about all of the cycles that my friends and I would share, you know, “Don’t go by that person’s office. Go the long way around.” Those cycles could have been put to a lot better use. So there’s kind of a business reason to stop this, and there’s obviously all of the other reasons that we’ve been talking about since the #MeToo movement started, but there’s also a basic business reason. We could be so much more productive if we didn’t have to spend all those cycles sort of fending off that sometimes subtle harassment, but it sort of exists there, and if we can together say, “Let’s just have an inclusive, respectful environment at work,” and teach our boys and our girls, I think we’ll be far more productive. We’ll be our best selves. We’ll bring our best selves to work because we’ll know we’ll be in a comfortable environment.
Shontell: You’ve had an incredible career, many years ahead of it still, but the point that you’ve gotten to is just really inspiring. If you’re looking back or you’re giving someone advice who’s just starting their career, what do you wish you had known then, and what would you advise someone who wants to rise to the top like you have?
Johnson: Well, I think the best advice I ever got was just to be myself, and I think once I settled into who I am, I’m quiet, I’m somewhat introverted, and decided that’s OK, it’s OK to be who I am. Then my career took off. So for someone starting I would say, “Be who you are. If you are aggressive and assertive that’s fine, too. Just embrace who you are because we really need that diversity of thought at work. We don’t need a bunch of Peggy Johnsons of any one type. We really need the sort of the mix and the blend of all the different opinions and voices.” That I think would be good advice for someone just stepping into their career.
Shontell: Thank you so much, Peggy. It’s really been fun.
Johnson: Thank you, Alyson. Thanks for having me. I appreciate it.