| Robert W. Lane ||Human Flourishing |
Tuck School of Business at Dartmouth
Remarks by Robert W. Lane
Chairman & Chief Executive Officer
Deere & Company
June 13, 2009
Thanks, Dean Danos. Good afternoon overseers, trustees, distinguished faculty, family members, partners, and friends. To the Tuck Class of 2009, congratulations on this impressive milestone in your life. You can and should be proud of the accomplishments of these past years — even as we all recognize this is not the easiest year to be graduating.
To start, please allow me to be somewhat presumptuous and speak on behalf of some people who have not authorized me to do so. Speaking on behalf of the 2 billion very poor, often hungry, people of the world, and on behalf of the middle class in India, China, Eastern Europe, Brazil, and Nigeria, and on behalf of the tiny 5% of the world's population that lives in the U.S. and is relatively well off ... on behalf of all of these people, I have a word for you graduates: Thank you!
Thank you for dedicating yourselves to becoming business leaders. Thank you for studying at a top notch school to help assure you can emerge as great business leaders. Thank you for the effort you have given at Tuck to advance group learning and teamwork skills, and for the focus you have put on ethics, on leadership development and on a broad global mindset.
Why do I presume these people express such gratitude? Because as a result of your growing competence and potential for exceptional and uncommon leadership, there is a higher probability that humans around the world will flourish, standards of living worldwide will go up, and the blessings of life and health can be shared more widely and deeply around the globe.
So, how wonderful that you have been rigorously training yourselves to help spread opportunity — and fight poverty. Now some may say, does that man know he is talking to MBA graduates? MBAs at the prestigious Tuck School? Does he think this is a social work school? Does he realize some think this is a school for greed?
Sadly, some representatives of earlier generations of MBAs, not necessarily from Tuck, have gotten off track from the great potential to serve humankind well; but because of your already impressive business experience, supplemented now with your Tuck training, you are very well positioned, even as you compete to win, to help make free open markets more healthy and rigorously competitive. And when they are, such markets are an extraordinarily effective too — in fact, the most effective way found by humans — to organize production and distribution so that prosperity can occur. You are trained to help them work, and work well. No wonder the hopeful world says thanks!
Now, most of you may not dedicate your primary energies into directly setting sound public policy which is a necessary condition to unleash the power of healthy competitive markets. Markets need rules. Markets require a transparent level playing field, where all have a chance to participate. But, although a necessary condition, sound public policy is not sufficient. Also necessary are practitioners: competent, energized, and ethical executives. That's you!
So, how do you fit in? You have the brains, health, skills, empathy, passion and ethics to emerge as great leaders — true practitioners of smart, enlightened, visionary business leadership. On average, you are about 30 years old. Just think about what has happened to the global economy since 1980, about the time you were born. Even taking into account the likely direct effect of the current "great recession" and assuming a dreadful contraction, say, through 2010, the growth in per capita income for the world will be about 40% over this period of time. That's terrific! Even under the weight of such a downturn, net growth in world GDP in this 30-year period would likely amount to 120%, or about 2.7% per year.
Markets are a means, not an end. Impressively, in your lifetime, markets have been unleashed, and the world has benefitted immensely. Not perfectly, not evenly, not widely enough, but it has been fabulous news for billions of people.
Now, looking ahead, this is your stage, your time: the next 40 years, say 2010-2050. This is your sweet-spot of executive leadership. This will be a unique time in the history of the world, likely never to be repeated. Your time on stage will likely be the final huge surge in global population growth before probably leveling off at around 9 billion. Probably another 2.5 billion people, born with the prospects of dramatically improving life, will be added to the planet. This is on top of 2 billion people alive today who can, and frequently do, aspire to lift themselves from poverty.
This is your time! This is your time of unique opportunity. I hope many of you will aspire to become productive and creative CEOs of large and small firms, of old and of emerging new firms.
May I be presumptuous again? May I offer three suggestions to you as you re-ignite your careers, as you look to the next 40 years of likely unprecedented opportunity?
Please consider doing these three things, every day, for 40 years:
.... Celebrate the high calling of business leadership;
.... Embrace the rich irony of business success;
.... Relish the priceless rewards of business integrity.
First, celebrate the high calling of business leadership. Why high calling? Because you can serve people exceptionally well. You have the potential to serve your future customers, and your future employees in remarkable, unforgettable ways — ways never before available or imagined.
Of course, those graduating from Dartmouth with a medical degree, for example, will serve people in a different but vitally important way; others will enter the equally crucial role of teaching. But you have a unique service to deliver: great business performance. Your service will be "embedded service," the delivering of great products or services in the right way, and in a way highly rewarding to shareholders, over many years. As a by-product, with it will also come, potentially, substantial financial reward. But your service will not be primarily giving your money away, as important as this might be, or giving your time — valuable time — to worthy organization ... also important. Your "embedded service," the high calling, will be innovating, creating, and distributing valuable products, services and new business models to humankind.
Perform to such high standards that, in spite of intense competition, your customers will take the initiative to eagerly recommend your products and services. Satisfied and delighted, these discerning customers will be convinced they are paying for great value, value that endures. The same should be said about your future employees, who, under your leadership, will surely blossom — excited by an engaging productive job of which they can be proud, and in which they can grow. This is evidence of "embedded service."
For centuries, for millennia, many people in Africa, Asia, South America, and indeed throughout the world, have not had the full blessings of jobs, health and life. In the next 40 years, you will serve by helping discover new commercial and technical ways to offer products and services that improve and enrich the lives of billions. This is a high calling! Celebrate it! Celebrate it every day.
Secondly, embrace the rich irony of business success. If we insist on measuring success over many years, evidenced by decades of persistent performance (a good yardstick) then we will have real evidence to testify to your accomplishments. Apparent success, premature claims, appearances that later collapse; this is not success. Don't seek it, or claim it.
What is the irony? The irony is you cannot, as a company or individual, directly serve yourself if you are to create such lasting success. It is impossible. You cannot generate enduring success for a great company or for yourself by acting as if it's "all about me." Only in the short run, can you directly serve yourself. Only when others — customers, employees, shareholders, including the environment, have been well served on a sustained basis — only then can you deem yourself to be a successful executive.
Truly competitive markets, healthy markets, require you to win, to do the heavy lifting of strategy and execution, competing to out-perform and prevail. In business, to win convincingly, to win the gold medal or green jacket requires derivative success, a by product of serving others, serving others at the highest level. This is, by the way, a "good" derivative!
This irony is not a new idea, of course. Great thinkers and religious leaders over millennia have noted the irony. From Confucius, Jesus, Mohammed, Gandhi, the irony has been recognized: Jesus said, for example, "Seek the kingdom of God first, and everything else will be added."
Some, as business leaders, have forgotten the irony, attempting to directly serve themselves, making it "all about me" even as the thrill of enduring performance has eluded them. Sadly, their actions have hurt many. Don't fail here! Embrace the rich irony of business success.
Thirdly, and finally, relish the priceless rewards of business integrity. The rewards are indeed priceless. Be 100% transparent, aiming never to do anything that you will not be 100% proud of its full discussion on the front page of the New York Times, The Frankfurter Allgemeine Zeitung, Asahi Shimbun, The Times of India, China Daily News, and your local home newspapers, whether on line or in print. Everything out front for all to see.
At John Deere we aim for "no tricks, no smoke, no mirrors" ... right down the middle of transparency. Within Deere, executives compete with other executives by out-cooperating each other. This approach is evident to outsiders when we can proudly repeat often complex interactions with customers, suppliers, and employees year after year, because we and they both know these activities reflect the highest standards under the full light of day.
Jeff Immelt, the Chairman and CEO of GE, and a graduate and board member of the college here at Dartmouth has wisely told his employees "There is nothing worth losing your integrity over." Nothing!
Relish the rich rewards — not only to your business itself but also to your own great personal satisfaction — of knowing that, without a doubt, you have aspired to deliver the highest in integrity both in spirit and in letter.
Give attribution to your colleagues, as there are few original ideas and few great projects done by one person. For example, some of the ideas here in this talk are distilled from the book by Zingales & Rajan, Saving Capitalism from the Capitalists, and from Nobel Prize winner Gary Becker, among others. Furthermore, I am privileged, without a doubt, to stand on the shoulders of thousands who preceded me and work with me at John Deere.
* * * * *
Times are tough now! Yet over the next 40 years few people will have had your preparation and experience, allowing you to emerge as uncommonly proficient and ethical practitioners of the business disciplines you have studied. No one can take this strong preparation from you. You have earned it.
So, as you commence the next phase of your journey, seeking to compete and prevail, nurture demanding, healthy and open markets that will make your work even more challenging and certainly not easy. But, please do go forth celebrating the high calling, embracing the rich irony, and relishing the priceless rewards of business leadership, success, and integrity.
I will end "not" being presumptuous, but instead convinced that you have the potential to help bring great good to the world and, with your shareholders, to be rewarded for it in many ways. As a result, as a consequence ... yes, as an inevitable derivative of sustainable great business performance over many years, humans around the world will flourish. And so will you.
How wonderful! Thank you for listening.