Interview: Larry Ponemon

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Eleanor Dallaway meets Dr. Larry Ponemon, the King of Privacy
Eleanor Dallaway meets Dr. Larry Ponemon, the King of Privacy
Larry Ponemon
Larry Ponemon

If you ever have the pleasure of meeting Larry Ponemon, you’ll instantly be struck by three things. He’s very small; he has the most softly spoken New York accent you’ll have ever heard; and, lastly, he’s a true gentleman. That much becomes clear immediately.

What you’ll learn if you are treated to 90 minutes of his time, however, runs very much deeper. Larry Ponemon is simply one of the most intelligent and modest people I’ve interviewed, and it’s crystal clear that despite his colorful and prosperous career, kindness and integrity have not gotten lost along the way.

“The best way to describe my life is circuitous, with lots of right and left turns”, Ponemon reflects. “As I approach the senior portion of my life, I look back and see that the turns and changes were a good thing, because they sharpened my skills and made me stronger.”

Born and raised in Queens, New York, in the 1950s, Ponemon recalls learning to defend himself with his “intellect versus my brawn. I’m short and small, but avoided most fights”, he says with a smile. “I was a smart Alec kid, a know-it-all, and learned at a very young age that I didn’t have to work very hard to get straight As.” Quite the contrary, Ponemon admits to skipping classes. “I found high-school boring”, he tells me.

Despite this complacency, Ponemon graduated high-school at fifteen and a half, alongside his eighteen-year-old classmates. “I looked like I was about five. It kind of forced me to grow up”, he said.

Ponemon credits his “very intelligent” mother and “quiet intellectual” father for passing down their genes. His
parents divorced when he was young, so “there wasn’t a lot of structure. We didn’t have a lot of security, but our security was love. We always felt like we were at least middle-class, but we were probably at the lower end of that, in terms of resources”, he says.

Perhaps their socioeconomic situation was an influential factor in Ponemon’s decision, after graduating, to decline university options in favor of “getting a real job”.

Working 9 to 5

Ponemon’s first real role was working for research company, Louis Harris, as a computer operator. “In those days, a computer would fill this entire room”, he smiles, pointing to the grand lobby of the Westin St Francis hotel in San Francisco, where we sit for the interview.

The next chapter of Ponemon’s life was perhaps his most indulgent, as he and his brother decided to start a rock band. “I played lead guitar and he had this great idea that we should try our hand at being professional musicians”, he remembers. “We drove our crummy old car all the way to San Francisco from New York. We thought that we were going to be the next Rolling Stones or Beatles”, he recalls fondly. Needless to say, that didn’t quite work out, and instead the brothers became ‘roadies’ until they ran out of money. Ponemon, rightly so, remembers that time without regret. “It was really a lot of fun”, he grins.

In the Navy

Next came the Vietnam War. So intent on avoiding being drafted, Ponemon reconsidered university. “I knew the
Army was lousy, so I checked with recruiters and the Coast Guard, and they were full, so I checked the Navy.”

This, it would turn out, would be one of those twists and turns in Ponemon’s life that made him stronger.

After going through every Navy intelligence training program, Ponemon was posted to a Vietnam base as an operations researcher, trained to deal with cryptography. “I wasn’t in any action, though, there’s no hero here”, he says modestly. Toward the end of our interview, Ponemon provides additional detail about his duties in the Navy. “I was basically code-breaking the Soviet Union, and trying to figure out where their submarines [were] located”, he confesses, seemingly unaware just how fascinating this is.

Despite his initial reluctance, Ponemon remembers his time in the Navy fondly. “They shaved my head, I went to boot camp. I can’t believe I actually survived!”, he says proudly.

Back to School

After the Navy, Ponemon went back to school to earn his bachelor’s in accounting (with highest distinction), at the University of Arizona, while working two full-time jobs: as a research assistant, and for the Veteran’s Administration. He later took what he describes as “a detour” and achieved a master’s degree in educational psychology at Harvard University.

Next came what Ponemon calls his “dark years”, recruited by the intelligence community, before he went to Carnegie Mellon in Pittsburgh to get his PhD in systems science. All these years later, Ponemon now guest lectures at their CIO institute.

“I then got married, started a family, and decided to complete my PhD at Union College in Upstate New York. My PhD is technically in engineering”, more specifically, systems engineering, he tells me.

The Pupil Became the Master

PhD complete but not yet ready to return to the business world, Ponemon took a position teaching at the State University of New York (SUNY) Albany. He moved to a school in Massachusetts, Babson College, and joined the faculty at SUNY Binghamton, where he became the director of the first center for accounting ethics.

His next move propelled him back into the “real world”, as he was recruited to develop a business ethics consulting business by KPMG. “I stayed for a couple of years, became executive director of their business ethics center and was also the national director of the consulting business.” All the while, Ponemon was holding chaired (tenured) faculty positions.

While at KPMG, Ponemon’s focus shifted from business ethics to privacy, and he recalls the first business ethics audit, conducted by himself and a colleague named Tim Bell. “It was a brand-new concept and we developed a business based specifically on privacy risk management”, he remarks.

Facing various frustrations, Ponemon began to toy with the idea of returning to academia full-time. Cue another of life’s twists and turns. This time when the phone rang, it was the CEO of Price Waterhouse. “They wanted to talk to me about building a global practice for privacy, and I liked what they had to say”, Ponemon says. He accepted a job in their executive office in New York City.

Far from his modest upbringing in Queens, Ponemon’s return to New York landed him on the Upper West Side in Manhattan, “living in the posh part, the Trump building. I was making the big bucks in those days, it was great”, he recalls with a grin.

His tenure at Price Waterhouse involved building the first privacy consulting practice, which he would implement in companies around the world. “I developed the first privacy audit at my kitchen table”, he laughs. The IRSG (Individual Reference Services Group), which Ponemon describes as the “forerunner to Google” – made up of a group of companies, data brokers, and the Federal Trade Commission – were tasked with ensuring that personal data was protected and privacy audits were carried out by competent auditors.

“I don’t want to take too much credit”, Ponemon says in reference to the privacy audit. “I wrote out the principles on a napkin, but my team of folks took those crummy principles and put a lot of substance behind it.”

Achilles’ Heel

The mention of his team catches me off guard as, until this point, Ponemon has not talked about co-workers or colleagues. “I’m not a manager of people”, he tells me, without hesitation. “I’m more of an individual contributor. I don’t like managing people, I’m terrible.” He puts this down to his inability to delegate. “It’s definitely a control freak thing”, he admits.

When Price Waterhouse merged with Coopers & Lybrand, Ponemon’s role became global. “I was travelling a lot, having a reasonably good time”, he tells me. “I started a group called compliance risk management and became very involved in information security around privacy and security-related issues.”

Soon, Ponemon admits that he “burned out”, having grown tired of working in a big company and having endured too much travel. Despite being tempted to once again seek comfort in the world of academia, Ponemon was persuaded by a head-hunter to take on the role of company president in an organization that was looking for structure. “I lasted four months, hated every minute, and decided I really don’t like working for other people.”

An Idea Was Born

Having had this realization, there was really only one option – combining all of the work he did enjoy: being an intellectual, thinking about problems, doing research, and being his own boss. Thus, the Ponemon Institute was born.

“I wanted to keep it small and elite and focused. I’m a control freak and as I said, I hate managing people, so it couldn’t go large”. His objective was simple: to have fun, retain control, and to do the work he enjoyed. After four months talking to venture capitalists, Ponemon knew that he would not accept any venture money. “The good news is, even as a poor guy from Queens, I was able to amass my own funding”, he tells me with pride. 

"We’ve been hacked a few times…We’re a small company, but we’re a great target"

Ponemon describes the early days of the Ponemon Institute as “kind of weird” as he quickly learned that not only was he able to do the research studies that he was interested in, but that “people actually wanted to pay for them”, he remembers in disbelief.

I believe Larry Ponemon whole-heartedly when he says that the Ponemon Institute is not about profitability. “We don’t do things that will maximize our revenue. We do things that are interesting”, he tells me with conviction. To prove this, he mentions the three (known) acquisition attempts that he has turned down. “It doesn’t make sense, if you enjoy what you’re doing, to stop doing it. I suppose at some point it could be a ‘yes’, but for now, it just keeps me going.”

Making it Count

On the day of our interview, Ponemon had set his alarm for 4 AM in order to do a first audit of new research findings. “I was so excited and wanted to see all the data. Sometimes people think I’m crazy – the reality is I am.”

When I ask him when he finds time to sleep, Ponemon tells me he doesn’t, much. “I work all the time. I used to sleep less than three hours a night and was proud of it. It’s why I now look so lousy”, he jokes. Ponemon admits that he now needs more sleep. “But I enjoy my work, serving on boards, teaching people”, he weighs up.

In between all of the work, Ponemon also finds time to embrace his passion: flying. “I got my pilot’s license about ten years ago.” For the last five years, Ponemon has flown himself – in his own airplane – all over the US and Canada on business.

Ponemon’s next objective is to get a jet rating before he’s 70. Of course, the jet rating is not enough of a goal for Ponemon, who also intends to get a second PhD in physics and astrophysics, and study classical guitar.

"We don’t do things that will maximize our revenue. We do things that are interesting"

His busy work schedule and ambitions somewhat contradict his secluded and peaceful lifestyle, with his primary residence on a beautiful lake in Michigan. Ponemon Institute has a headquarters in Traverse City, but Ponemon prefers to work from home, “away from administrative trivia”, and with his three big dogs.

As my time with Ponemon draws to an end, I ask him to share his proudest moments with me. He has three and each is worthy of inclusion in this article. “Four years ago, I was listening to the chairman of the Federal Trade Commission give a keynote at RSA. She cited my research as the basis for her presentation, referring to us as the Pokemon Institute throughout. Still, I was proud. At the end, I stood up to ask a question and introduced myself as ‘Larry Pokemon’. The audience went crazy”, he remembers, as we both laugh.

His other two proudest moments are both family-orientated. “One of my sons was in college studying privacy, and my work was cited in his lecture. He was really proud”, he tells me, smiling. “Lastly, my mom is in her eighties and rarely gives compliments. But she saw my research in USA Today and said ‘my goodness, I’m so proud of you’. That was a nice moment”.

When Ponemon told me at the beginning of our interview that his life was circuitous, he was absolutely right. Each and every turn has led him along the colorful path to get to where he is today: in a small boat on a peaceful lake in Michigan, doing the job he loves. Larry Ponemon, it has been an absolute pleasure.

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