Newsmaker: The face of a kinder, gentler Seagate

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Before you took over, Seagate always had a reputation of the "school of hard knocks," the kind of place where people would get burned out or fired. What was it like when you first arrived, and how did you change it?
Watkins: It really changed when Steve (Luczo) took over as CEO. He took over as CEO, and I took over as COO, and we had both lived under the old culture, and we both really wanted to change it.

I will tell you about my first meeting at Seagate. I was on executive staff, and the meeting lasted about four or five hours, and I have never been around so many people who just screamed and yelled at each other. Everyone was, "F--- you, f--- you." The sales guy would say, "I need this" and the operations guy would say, "Well, f--- you. I'm not doing that." And the design guy would say. "F---, I hate doing that." It was six hours of "f--- you."

If you can create an environment where you respect each other, you trust each other and you get to this point where people think "I am not just going to let you down."

It was my first meeting coming in, and we had real issues to take care of, and I mean not one issue got resolved. It was like you didn't have to. You could just say "f--- you." There were seven of us, and everything was just screaming. I was stunned that I just had a meeting for six hours, and not one decision got agreed upon.

It sounds like an episode of "The Sopranos."
Watkins: And when it was over, they brought out the dog head. It was a head of a stuffed dog. They cut it off and sewed up the bottom. Then they all took a vote on who is the biggest ---hole in the meeting and they gave him the dog head award. That was the only agreement, and the person who got the dog head was sort of happy.

So Steve and I started talking about things offline a little bit, about communication and culture and values, and so when we got our opportunity, we just started changing things.

What do you think motivates people? There has been a big turnaround at Seagate.
Watkins: I will tell you what I think, and we strive to apply it. I kind of learned it in the Army. People don't die for their country, they don't die for their God, and they surely don't die for money. But they will die and put their life on the line for their platoon mates, because they don't want to let them down.

Now, you don't want people to die. Business and war aren't the same thing, and I'm not a big fan of that analogy. But if you can create an environment where you respect each other, you trust each other and you get to this point where people think "I am not just going to let you down." That is more powerful than money or anything else. So everything we do at Seagate is to create a teamwork culture. If employees learn we don't motivate by fear or firing, then you can create that environment. It's not just putting up posters.

I mean, you spend your whole life at work. You want to feel like you belong. I love corporate--corporations can do great things. These are places where people spend an amazing amount of time in their life. Why can't it be a positive thing? I think you focus on your customer, and focus on your people, and you focus on any community you're in--and if you do those, the stockholders do fine.

Do you think most companies miss that point?
Watkins: I think they used to understand it. One of the weird things that happened in the late '70s and in the '80s and '90s is this sort of little pact that stockholders made with the CEOs. They said "Forget about long term, we will give you bunch of stock. Focus on short, and you will make a lot of money." And that's what happened. Stockholders did not care about the long term. It was all about short-term deals.

CEOs used to make decisions that would impact the companies six years down the road. That was the real responsibility, and that stopped happening. And you will hear a CEO complain, "Well, the Street holds me accountable." But you know what my argument is? If you don't have the nerve to stand up and tell the Street (Wall Street analysts) what you are going to do and why you are doing it, you shouldn't have that job.  

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