Why Intuit’s CEO believes inclusivity benefits the world and the company’s bottom line
On this week’s episode of Fortune’s Leadership Next podcast, cohosts Alan Murray and Ellen McGirt talk with Sasan Goodarzi, the CEO of Intuit, about the company’s push to "make a meaningful impact" in the lives of its small-business customers, inclusion and Intuit’s Trans Summit, and Goodarzi's quest to to reinvent himself as a leader.
Listen to the episode or read the full transcript below.
Transcript
Alan Murray: Leadership Next is powered by the folks at Deloitte, who, like me, are super focused on how CEOs can lead in the context of disruption and evolving societal expectations. Welcome to Leadership Next, the podcast about the changing rules of business leadership. I'm Alan Murray, and I'm here with my stupendous co-host, Ellen McGirt. How are you?
Ellen McGirt (00:03): Alan, I am so very happy to be here. I'm so happy to be here with you and I'm so very happy because my taxes were done early this year.
Murray (00:38): Funny you mention taxes because our guest today is the Sasan Goodarzi, who is the CEO of Intuit. Now, Ellen, I'm old enough to remember when that meant a Quicken CD-ROM that would come in the mail. I'd stick it in my computer and do all my finances. Intuit has since sold that business but it's responsible for TurboTax, which a lot of people use to do their taxes, which it sounds like you do, Ellen.
McGirt (01:03): I have been for many, many years. I've been a longtime customer. So thank you.
Sasan Goodarzi (01:06): Alan, thank you so much for having me. Ellen, thank you for being a customer. You ever have an issue? Let me know and by the way, I wish it was $8 million, but it was 8 billion.
Murray (01:06): And then QuickBooks which is used by thousands and thousands—we'll get Sasan to give us an exact number of small businesses. More recently, in a rapid expansion, it bought Credit Karma for I think around $8 million and Mailchimp for around $8 billion, excuse me, and MailChimp for $12 billion. So Intuit is on the move and the man who is driving all that move is the man who is with us right now, Sasan Goodarzi. Sasan, thanks for being with us.
Murray (01:45): $8 billion. Yeah, excuse me for misspeaking. So tell us where this is taking you. What is Intuit today? Describe it and what are you trying to build?
Goodarzi (01:55): You know, I'll do it sort of, if we were in an elevator, you know, what would you need to know. If you wind the clock back we've really focused on being a platform company that's focused on accounting and tax three years ago, and those are very important problems. That was sort of what the essence of what QuickBooks and TurboTax do—help you be compliant and keep your books up to date your accounting, and with TurboTax of course is to be able to do your own taxes. And of course, now we can have somebody do it for you.
If you forward the clock to where we are today, you know, we had a dream three years ago building on our foundation that we really wanted to make a meaningful impact in the lives of those that we serve. We wanted to help you really manage your financial life and your life as a small business. And so the from-to is we wanted to go from really helping you only with taxes and accounting, very important problem to a platform company that really plays a meaningful role in your everyday life as a consumer and as a small business. And you know, our backdrop is our purpose, it's our why, which is our mission around powering prosperity around the world.
And in order for us to power prosperity, we felt like we needed to go beyond taxes and accounting and so we've accelerated our innovation and of course joined with two family members in Credit Karma and MailChimp. And the essence of what they both do, is in the case of MailChimp, we now with QuickBooks can help you grow your business and run your business in one place, to really feel your success as a small business. And as a consumer, we can now help you really save money, get out of debt, and be able to get your largest paycheck of the year which is your refund all in one place. So that's the from-to. I want to be clear we have not arrived at a destination there is no destination. Powering prosperity takes a lot of work, but I love our progress and it's exciting to see what's possible as we look ahead.
Murray (03:53): Sasan, that sounds like you're saying more acquisitions to come.
Goodarzi (03:56): No, no, I'm just saying we've gotten much better at solving problems for our customers and, you know, speed to market matters for us and so we are always on the lookout for...are we doing that well enough internally? Do we need to accompany that with partners or acquisitions, but our compass is the customer?
McGirt 04:16): You know, speaking of that, our wonderful colleague Geoff Colvin wrote a piece about you and Intuit I think was around December, and talked about some of the ways that you thinking about that future. There have been some bumps, I know there had been some layoffs that were tough, but what he focused on was how you are thinking about disrupting yourself and the industry that you have helped established. A big part of that is going to be technology AI in particular. But can you talk a little bit about those changes and what that looks like to set yourself up for the future?
Goodarzi (04:45): Yeah, Ellen, I actually love where you started, which is you know, we're almost 40-year-old startup. And, you know, we were born in the in the era of desktop where you had to, you know, stick a CD-ROM in your laptop and Alan talked about that. And many employees that work for us these days don't even know what that means and what that is. And you know, I start there, because we've had to, in the last 40 years, lead through multiple different shifts from, you know, desktop and the days of DOS to the internet to the cloud to you know, now being a platform company. And I give a lot of credit, you know, to our founder and the many that followed our founder to always fall in love with the customer and their problems and never fall in love with your solutions. And the essence of what you asked about which is we always want to find ourselves in a place where we're comfortable disrupting ourselves, reimagining ourselves because of what the customer needs and and that is really what what has allowed us in the last 40 years, you know, to be where we are today.
Goodarzi (05:46): And particularly to your question, I would say there are sort of three things that matter a lot to fuel innovation on behalf of our customers. For us, it's data, it's AI and now the capabilities that come with crypto. You know, we've spent the years making sure that we can use our customers data on their behalf to be able to innovate for them. And that's really accelerated because of AI. We use machine learning, knowledge engineering and natural language processing, to find ways to put more money in your pocket, to eliminate [hard to hear] drudgery and to ensure what you do is actually done with confidence.
And A.I., the way I described it to the company three years ago when I stepped into this role is you know, way back in the way-back machine when none of us probably remember this, electricity, when it was invented it changed the world in so many ways. And then the internet changed the world in so many ways in ways that we couldn't even imagine at the time that it was invented. And my belief is that when the essence of A.I. was invented, it is that third sort of platform that will, is causing explosive innovation and so A.I. is very important for us and the inventions because of it. And last but not least is crypto and particularly for us our interest is blockchain and democratizing access to markets and financial systems and removing friction for small businesses and consumers so they can get paid fast and move money fast without all the middleware and all the cost that comes with all the people that are involved in money movement. So those are three things that we are really focused on to, again, accelerate innovation on behalf of our customers.
Murray (07:46): Yeah, and we should be we should be clear on the crypto point what you're saying is it's not just, "Hey, we're going to make it possible for our customers to invest in cryptocurrencies." You're saying there's a fundamental technology here that can revolutionize finance and you want to be at the leading edge of that.
Goodarzi (07:52): Absolutely. You know, depending on which day it is crypto is popular or not popular based on how the currencies are trading and that is not...
Murray (07:56): It's a bad day, Sasan. It's a bad day on that front.
Goodarzi (08:00): Yes—and that is not what I'm talking about. You're exactly right, Alan. For us, what is of interest is blockchain because that allows us to actually really remove friction and to move money fast on behalf of our customers. Two: it has really decentralized technologies that are enabled by blockchain and other technologies because of crypto. And that means that from the time as a small business if you want to create an estimate to getting paid they can things can happen instantly because of the technology. That is what's most interesting now. Over time if you want to, you know pay in a certain currency like a Bitcoin or accept money, those are that's fine, but it's the underlying technology that is really of interest to us.
Murray (08:41): Sasan, you're clearly disrupting yourself, you're making waves. It's working out for your shareholders. Obviously, the stock price is down like every stock price over the last few weeks. But if you look at the last year or two solid, you know, double the stock price for your shareholders. You're also focusing on your social impact. I want to talk about what you're doing in climate. But before we do that, let's get this IRS issue off the table. I mean, as I understand it, you tried to do a good thing by making a tax service free in partnership with the IRS, but the IRS thought you were then using that free service to redirect people to paid services. You ended up settling with the IRS recently for I think it was $140 million or so. What happened there?
Goodarzi (09:29): Yeah, well, first of all, it's not the IRS. So maybe let me let me paint the picture. IRS is a very close partner of ours. In essence, the partnership that we had with the IRS is beyond what us and private industry do commercially. We also created what we call the Free File program ten plus years ago, and we were actually the founding founder of the Free File program, with industry, by the way and IRS and really 10-plus years ago. The intent was free software wasn't available, and nobody was e-filing. And so the goal was how do we make free software available to many and how do we motivate e-filing so that people weren't doing things manually? You forward the clock by the way, both of those missions accomplished and there's some very important governance that the IRS put in place around free file. We couldn't market to free file. We couldn't send and we being we and others couldn't send customers from free file to our commercial offerings even if there were other benefits that they could benefit from. So there was very good governance that that we all followed.
It was really entities on other parts of the government, not the IRS, that felt like some of our practices of how we talked about free needed to be changed and so really the sort of what happened was the FTC and the states did not agree with the IRS, although IRS is the one that governed the program, and in essence, what we settled was, first of all, we settled in context of no wrongdoing. We settled on making important changes to how we talk about free, most of which, by the way, was already in place. And it got to a place where we felt like settling for the $141 million and admitting no wrongdoing, but changing some of the practices that we've already changed, allows us to put this behind us so we can move on because as you know, litigation takes a lot of mindshare, and we just wanted to move on and focus on our customers.
Murray (11:30): Just quickly though, is there a bigger lesson there? I mean, do you wish you hadn't done this program with the IRS a decade ago or is it just missteps along the way?
Goodarzi (11:45): You know, listen, Alan, I feel like we did the right thing. I feel like what we did with the IRS opened up the door to many Americans having access to free and actually creating this wave of everybody doing their taxes digitally. You know, the challenge is sometimes different parties have different views of what's right and what's not right. And well, we ended up getting caught up and because by the way, we are the market share leader, is those that don't believe in voluntary taxes have different views and use this opportunity to in essence make something evident in terms of their belief system. I would do it, you know, all over again, we did the right thing, ultimately for our customers and I stand by what we did. But at the same time, it's very unfortunate and disappointing that you can get caught up in different government agencies disagreeing with one another, which then gets a private company like us caught up in the middle of it, but I wouldn't I wouldn't have not done it. It was the right thing for American citizens.
McGirt (11:38): Thank you for clearing that up. I do want to move on to both climate and inclusion. I do want to start with inclusion if that's okay, Alan. I just read an amazing piece by one of your employees in HBR. Lore Perkins, I believe their name is, who credits their ability to come out as nonbinary, which was a wrenching decision for them to integrate their personal life with their workplace identity, specifically because of the Trans+ Summit that Intuit hosted, which is the, I believe, it's the tech industry's first-ever summit on these issues. So congratulations. I'll flag it in our notes so our readers can read it too. It was really special and you must feel good about that. Can you talk a little bit about your overall inclusion goals and how you think about them, but particularly this summit, which I believe just wrapped?
Goodarzi (13:33): Yeah, absolutely. I love both of these topics, particularly because, you know, having come to the U.S. at the age of 9 from Iran, and in a time where Iran took hostages and you know, I personally thought what it was like to be bullied and picked on which is very different than your example, but it helps you understand what it means relative to inclusion. And so I'll start with two changes that we made almost two years ago. One, we actually evolved our values, which have only been changed a few times in our 40-year history. And one of the values that we added was around strong work together, which is just the importance of both diversity—and our view is diversity is a fact inclusion is a choice—but the importance of both diversity of talent with inclusion and inclusion for us is really creating an environment where everybody can bring themselves to work and who they are so we can do a better job innovating for our customers.
The other very important change that we made is what we call our True North goals. We set goals for the company that are employee, customer community and shareholder goals. And we changed a couple of our employee goals—one of them we actually added inclusion, which we actually measure on a yearly basis, and also diversity. We set diversity goals and measure ourselves against, you know, how we do. Changing our values and changing our goals was essential to the what actions does it inform what do we actually do? And our perspective is that we we respect your beliefs as a human being. And so this Trans Summit was a very, you know, important summit for us to actually talk about what are the experiences and what are the feelings that folks have and how can we ensure that we're creating an environment where, to our action, where folks feel supported?
And, you know, I've shared the story that, you know, my own daughter, you know, shared with us five, six years ago that she even came up to me one day and said "Dad, I like girls. Is that OK? And I said of course, it's OK. There's no difference between liking other girls or liking boys." And it just for me, it's personal in terms of ensuring that there's an environment you create in the world so that folks feel comfortable and I have to end with saying I learned a ton from my own daughter. You know, we live in an environment where because of our experiences, we're very open to being yourself. And I realize even in that environment, how hard it was for my own daughter, to actually have conversations about what she's feeling and what she's going through, which has made this extra special in terms of what we're trying to do at Intuit to ensure that we create an environment and two things like the trans summit that you mentioned, to ensure that people can talk about their stories and how tough it is and what we need to do about it.
McGirt (16:19): I appreciate that. Alan, I know you wanted to ask about climate. I just really quick follow up from my reporting on inclusion and race and just the people that I get to talk to as part of my life. The single biggest issue that they seem to be facing as practitioners is how to embed the ideas around inclusion and the importance of inclusion into the day-to-day tactics of their business. So if you answer this question, of course, you get you win a Nobel Prize. I realize how big that question is, but if you had any advice, at least, about how to begin to think about that, especially for the vast majority of the workforce, who aren't as far as long as you are, I'd love to hear your thoughts.
Goodarzi (17:00): Yeah, I think it's a really important question and I just want to be clear to your point. What I'm about to say is not going to win me the Nobel Prize, but it's a really important question. So I think the first starting point that I would say I share with my peers is you have to authentically understand diversity of talent and an inclusive environment is key to success to creating the culture that you want to deliver for customers, which ultimately is good for the world and good for business. Which then if you believe that and you have ways to set goals, if you have mechanisms to measure how you're doing and if you have mechanisms to be transparent about it, you know, we're so all companies are so transparent about their customer growth and the mix of customers and financial outcomes.
We have to be as transparent about inclusion and what's going right and what's not going right what you need to change, I think, just like you embed and we're not great, we're not perfect that this just to be clear, but we're working on this every day. But just as we embed what we do every day to drive customer growth, I think it's important to embed what we do every day to create the culture that we want and inclusion being a piece of it. So that's the methodology, you know, that we use. And, you know, I think we'll be able to look back five years from now and just assess and two years from now what's working and what's not, but your question is once we figure it out as a globe, and I'm confident we will, I think it's going to change the world for the better.
[Music.]
Murray (18:28): I'm here with Joe Ucuzoglu, who is the CEO of Deloitte U.S. and had the good sense to sponsor this podcast. Thanks for being with us and thanks for your support.
Joe Ucuzoglu (18:37): Thanks, Alan. Pleasure to be here.
Murray (18:38): So, Joe, this new wave of business technology, artificial intelligence, Internet of Things, the ability to make intelligence out of data is creating huge opportunities for companies but a lot of the CEOs I talked to feel daunted by it. It's like where do they get the imagination to rethink their entire corporation? How do they deal with that?
Ucuzoglu (19:01): The opportunities are immense, particularly when you look at not just any one of these technologies individually, but the convergence of all of them collectively creating the opportunity to truly transform business models. And I know it can seem daunting, but the reality is taking a first step in actually produces huge benefit. Because what we're finding is that many of the cutting-edge applications are not coming out of the corporate headquarters. They're coming out of putting the technology in the hands of our people on the front lines. They find new and innovative uses. We then funnel them back up and leverage them across the entire client base.
Murray (19:39): It really gets to the importance of a culture of innovation at the company.
Ucuzoglu (19:43): It is essential that our people feel empowered to take the latest and greatest and define new and innovative ways to use it for productive purposes.
Murray (19:52): Thank you, Joe.
Joe Ucuzoglu (19:53): Alan, it's a real pleasure.
[Music.]
Murray (19:59): So, Sasan, let's talk about climate you made clear to us at the beginning of this podcast where you're headed. You want to be able to provide a whole suite of cloud-based services to small businesses, which is impressive and important. And one of those you've announced is being able to measure their impact on the climate. You know, big companies now are putting hold teams of their employees on this question, hiring the consulting firms to do it. But for small business, it's really tough. So how are you going to do that?
Goodarzi (20:29): Yeah, very, very tough. I'll start with we set it as an expectation. So when you look at our True North goals, one of our pillars is community goals and there's three elements of those community goals. One is about creating jobs in distressed communities. Two it's actually about job readiness, where we go into distressed communities, and we educate folks and we have very specific goals so they're more ready for jobs, and by the way, the jobs may not necessarily be with Intuit, but it's their readiness to go out in the market. And then third, is actually our climate goals. And I'll start with where we are and where we're going and then I'll touch on small businesses right now. We are 2x Carbon Positive. And we set a goal I think almost two years ago, that by 2030 we want to be what we call 50 by 30. And what that means is we took our 2018 footprint and we want to be 50 times more positive from a carbon perspective. That, by the way, equates to like taking 450,000 cars off the street and we are, you know, we are 2x there and we have a long ways to go.
So how are we doing? And I'll just use the small business question that you asked as an example. You know, we have created a small business marketplace and this marketplace is actually starting to get filled up with those that small businesses can partner with. Like we have packaging, shipping companies in this marketplace that ultimately small businesses can use if they want to do packaging and shipping that are very, very climate friendly, because it's very hard if you are a two person or 30 person small businesses, very hard to focus on climate and many other things when you're actually just trying to survive and run your business. So we are, we've created this marketplace and we are inspiring and motivating our small businesses to actually sign up to be want to be part of the marketplace. And this marketplace is continuing to grow with companies that are actually very climate friendly. And we think you know, we serve 8 million small businesses. We're one of the largest small business providers in the world and we're growing. We view it as our opportunity to be able to get every small business to participate in one way shape or form in this marketplace. So we've signed up almost a million small businesses. We have more to go but but that is our ultimate how to get small businesses involved.
McGirt (22:47): Right. Very cool. I guess it's time for our lightning round. Isn't that right, Alan?
Murray (22:51): That's right.
Goodarzi (22:52): Uh-oh, lightning round.
McGirt (22:53): I know. I know. We could talk to you all day. But this season, we're doing something a little different. We're asking all of our guests to just real top of mind quick responses on three key questions facing all of us. First one is what's top of mind for you when you think about the global economy?
Goodarzi (23:09): That's a great question. You know, it's, it's crazy world out there. So be careful where you are. No, I think I think the two things I'll say that is on my mind is the combination of all the money that we had to pump into the global economy and in some places like the U.S. the inflation that it's caused. You couple that with the supply chain issues and the worker shortages, that has to be solved, because it's creating havoc in the marketplace. It's a huge strain on small businesses, as an example, and it's causing havoc in the stock market. As you know, inflation significantly impacts how investors think about, you know, ultimately, the returns they get on the market and that impacts consumer sentiment, which can actually impact the economy. So that is probably the biggest thing on my mind that we have to solve very thoughtfully because if we overcorrect, we can send ourselves into a global recession which we have to be careful of.
McGirt (24:07): Right. For those of you listening along, Alan is nodding so that was clearly the right answer. The second one: top of mind for you, when you think about COVID.
Goodarzi (24:16): About COVID. Well, I'll connect COVID to the work place and just life. I think COVID has caused everyone to step back and think about their life. And I think life is up for grabs and the workplace is up for grabs. You know when you think about what you hear in context of the great resignation, the great reshuffling, you know, however you want to brand it. It's actually all caused, in my view, based on the opportunity people have had to step back and rethink their life. And I think life is up for grabs and what choices you make is up for grabs and it significantly impacts companies, culture and that that's a big thing that's on my mind. We will get through COVID It'll be a bit of the new norm. But the implications on the structural and behavioral changes that it's causing, it will be interesting to observe and watch what happens and how everyone in the world reacts to it.
Murray (25:08): I nodded to that one too, Ellen.
McGirt (25:09): And he did. That leads us beautifully to our third and final one, Sasan. What is top of mind for you, when you think about what's next for you as a leader?
Goodarzi (25:17): Yeah, you know, I would say that I'm focused on how do I reinvent myself. I think leading in these times is very different than leading a year ago or two years ago with thinking about life and workplace being up for grabs. Some of the sort of structural and behavioral changes with consumers and small businesses and how they think about what's important to them in life and, and I think when you're leading in that environment with all the social and political topics that you're having to deal with, I think it's it's important for me personally, to be curious to examine the knowns to examine the unknowns and figure out how I need to reinvent myself because leading in this environment is very different than what it was even a year ago. So for me personally as an individual and as a leader, that's the most top of mind and I will end with this quote. I won't quote the leader but I just did a listening tour, where I went out and talked to a number of leaders externally, all of what you would know if I mentioned their name. And this one leader of a very large known company that both of you would know well said, "I've been a CEO for 24 years, several different companies. And he said, I simply don't know how to lead as a CEO anymore, and I have to reinvent myself." I thought he encapsulated how I feel and what's important looking at.
Murray (26:41): Wow, that's really powerful. Can we guess who it is? We think that person has been on Leadership Next.
Goodarzi (26:47): I won't confirm or deny but take a guess who would it be?
Murray (26:53): Twenty-four years? We had a great conversation with John Donahoe and I think it's him. You don't have to confirm or deny.
Goodarzi (27:02): I'll just end with have a great day.
Murray (27:05): Such a great conversation. Really enjoyed it. really amazed at what you've been doing. We're going to keep watching and thank you for taking time to be with us on Leadership Next.
Goodarzi (27:17): Thank you. Take care.
Alan Murray: Leadership Next is edited by Nicole Vergalla, written by me, Alan Murray, along with my amazing colleagues, Ellen McGirt and Megan Arnold. Our theme is by Jason Snell. Executive producers are Mason Cohn and Megan Arnold. Leadership Next is a production of Fortune Media. Leadership Next episodes are produced by Fortune's editorial team.
The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.
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