Commencement Address 2010
Berkeley-Haas Undergraduate Program
May 19, 2010
CFO, Gap Inc.
Good morning everyone. I am thrilled to be here today. This is a huge milestone in your life. I am so honored to share it with you, and your families, and the incredible faculty that have all supported you in getting here.
I love Berkeley. I love the city which is so rich in diversity and inclusion. I love the university and, of course, this amazing business school which embodies so much of what is special about this place.
Like you, I sat in this beautiful Greek Theatre 25 years ago, nearly to the day, filled with joy and some trepidation about graduating and moving forward to the next phase of life.
But I also felt a sense of quiet confidence in entering that next phase with an amazing education and a strong set of values, many of which were shaped at this very institution; an institution that has continued to change and improve over the years.
As evidence of his commitment and strong leadership, Dean Lyons has invested time and energy in creating a strategic plan to continue to evolve the Haas School in a manner that will maintain its prominent stature.
As part of that plan, four powerful principles have been set forth that differentiate Haas and define its distinctive culture. I'd like to address each of those principles and give a perspective on why I believe each one is so important to you as future leaders.
The first principle is Question the Status Quo: Take intelligent risks and accept sensible failures. Creativity and innovation are the life breath of progress in business as in almost everything. By definition innovation necessitates questioning the status quo. It takes courage to bring forth a new idea and it takes yet a different kind of courage and will to see an idea through to implementation. Not every idea turns into the next great innovation; truth is, most don't.
At Gap, in 2005 we launched a new store concept called Forth & Towne with much public fanfare. Unfortunately the concept failed. After investing tens of millions of dollars, we made the difficult decision to cut our losses and shut it down after two years. The silver lining is we learned many tough lessons. And this failure, though very public, didn't stop us from taking those lessons learned and investing in other good ideas. In 2006 we launched an online brand called Piperlime which is growing and thriving today.
So my point is, don't let failures discourage you. Tenacity and persistence are great traits. And don't be afraid to fail. It's a great way to learn. And that's because most failures are really painful, so you don't forget them which should mean you'll never make the same mistake twice. And that's what really counts.
The second principle that differentiates a Haas graduate is simple yet profound: Confidence Without Attitude. These three simple words for me actually capture the foundation and essence of strong leadership.
Leadership is made up of behaviors cultivated over time and therefore, it's largely an experiential journey. We typically begin our careers as individual contributors focused on technical competencies. As you move through milestones, like leading teams, then leading functions, and finally leading enterprises ... although that technical foundation is of critical importance, more and more of your time is spent on softer skills, like:
- Listening — one of the most underrated leadership qualities
- Influencing all sorts of stakeholders, the toughest of which are your peers
- Communicating — about where are we headed, why it's important, how we'll get there
- Developing talent and building effective teams
This last point about building teams is perhaps the most important of all. At some point in your career, you'll come to the realization that no matter how smart you are, you cannot accomplish what you need to by yourself. This realization is humbling, but it's critical. You need a team. And you need a smart team that debates and shares lessons and insights. What I'm describing is leadership through trust and collaboration and it's much more effective than the command and control model.
People in organizations are most effective when they're striving for a goal they believe in, not a goal they are told they have to achieve. That's why even through being directive and controlling can drive results in the short term, it's not sustainable.
At the end of the day, sustained performance is the hallmark of strong leadership and great organizations. And it's the continuous development of talent, talent that is encouraged and nurtured to become the next generation of leaders that enables sustainable performance.
I've lived this firsthand. Between 2005 and 2007 we lost a lot of talent at our company. Replacing the leaders that left were many individuals with remarkable resumes from top business schools around the country. However, in my view, some of those leaders were more focused on themselves and their personal ambition rather than the success of the company. In other words, they had confidence with attitude. As a result, during this period, our retention rate and earnings dropped significantly.
Since 2007, with a new CEO and an intense focus on people and building effective teams, our retention has increased about 40% and we've delivered double digit earnings growth for three consecutive years.
This correlation between retention and performance is not coincidental, and it validates an important observation: The best leaders I've observed have healthy egos, no doubt, but they also exhibit great humility. And it is the latter that allows them to effectively listen and learn from others and build strong teams. Their ego you see is channeled into a larger goal, a goal that is beyond their own personal wealth or renown.
As Harry Truman once said, "You can accomplish anything in life, provided that you do not mind who gets the credit."
Now, let me move on to the third principle: Students Always. Well, I just talked about how people who have confidence without attitude listen and learn more from those around them. Having graduated from Haas, you can exercise that quality as a real advantage.
I encourage you not only to listen and observe but also to actively ask questions and volunteer to help solve issues outside of your area. Most importantly, take yourself out of your comfort zone. Even after working all these years, there really isn't a week that goes by where I don't find myself in a terribly uncomfortable position. We grow by putting ourselves in uncomfortable positions and creating successful outcomes from it.
None of what I just described is terribly difficult if you have a job you're passionate about. If you love your job I truly believe it's hard not to be successful. The hours will surely be long, but they'll go by fast and they'll be rewarding. It's rewarding because you keep learning and growing both professionally and personally. And here's another thing about doing what you love: your passion can't help but come through. And the thing about passion is it's contagious. Others will want to join and support you in the drive for results creating a virtuous cycle.
That said, finding the job you love may not be so easy. And that's because first you have to figure out what's important to you.
Through a long process of elimination, really, I finally figured out what environment fulfilled me and it was a combination of a couple of factors:
- The right cultural fit
- In a fast paced and dynamic environment
- And for a company whose product I'm passionate about
But here's the thing — I didn't land a job I loved until I was 30. And that's not unusual. Don Fisher, the founder of the Gap, didn't open the first Gap store until after he turned 40, so don't despair if you don't find your life's passion in your first job! Just stay open to learning. And don't settle. Keep going until you find what you love, and when you do, you'll know its right.
And now the fourth and final principle that distinguishes a Haas graduate: Beyond Yourself. Leading ethically and responsibly.
You're entering a new milestone in your life at a unique time. The country is slowly emerging from a deep recession ... we hope.
We've learned many lessons since the fall of 2008 about how to conduct ourselves in business and how to manage risk. You are fortunate to have studied those lessons and now have a responsibility to incorporate those leanings as you take on the challenges of the future.
I've had the good fortune of spending most of my career at two local companies, Levi Strauss & Co. and Gap, Inc., whose founders, the Haas and the Fisher families, are great role models for "thinking beyond yourself."
These families and the globally recognized brands they've built have shown me at a very personal level that there need not be a conflict between good business and good values.
Don and Doris Fisher's philosophy of making a positive difference in our communities is an important part of our company's culture. And what I can tell you is there is an earnest desire and consciousness to do the right thing.
With every new recruit that enters our organization, the movement grows stronger — whether it's as big and complex an issue as how we support progress in the working conditions where our clothes are manufactured, or issues like how we make our buildings and stores more energy efficient and green.
Don Fisher passed away last September, a few weeks after Gap Inc.'s 40th anniversary celebration.
Like the great leaders I've observed and described earlier, humility was part of Don's legacy. In his last days, when he spoke to us about his greatest achievement, he spoke not about financial success, but about the many lives he and Doris touched around the world thanks to the success of the company.
As our best and brightest next generation of leaders I implore you to think beyond what is owed to you for your work. Given the privilege of your education, think about how you can contribute not only to your company, but also to your families and your communities.
Carry the school's distinguishing principles as filters in all you do:
- Question the status quo
- Confidence without attitude
- Students always
- And beyond yourself
Let me end by saying that I hope you share my sense of pride in being now, alumni, of this great institution!
Now please go out and thank your family whose support has undoubtedly been a big contributor to your success. It certainly has been of mine.
Celebrate this amazing moment and rest assured the best is yet to come!