Hello Stanford! Thank you, Dean Levin, for your kind words. And, on behalf of us all, thank you for your great stewardship in your first year of leading Stanford GSB! Faculty, staff, family, friends, and most of all, the Class of 2017! It is wonderful to be back at The Farm!
Growing up nearby, I often spent weekends at Stanford football games. And when I decided to pursue a JD/MBA, I knew that I had to come to Stanford Graduate School of Business — the finest business school in the world! I loved being at Stanford GSB! I loved my classmates. I loved my classes — even that time I got an “LP.” I loved the spirit — the optimism and entrepreneurialism. We worked hard: problem sets and presentations were often prepared in the hot tub … but that’s another story. And we played hard: training for our first marathon … and, afterward, grabbing beers at the Dutch Goose afterward.
Last night, after 35 years, I had dinner with friends from my time at Stanford GSB. This morning, I ran the dish with another friend from Stanford GSB. We’ve raised our kids together. We’ve traveled the world together. We’ve done deals together. They are the friends I can call any time, any day, and they would be there. The friendships you made here will be for a lifetime.
Thirty-two years ago, I sat where you are sitting. So I know how you’re feeling. After all those classes — and case studies — you are ready to graduate! Maybe you’re a little tired from “celebrating” too much last night. Maybe you’re a little stressed. Now you have to do something with all this training and education! By the time I was sitting at graduation, I had learned an important lesson — no matter how hard we prepare, life does not go as planned.
In the 1950s, my father started what eventually became the Hyatt hotel chain. At first, it was just a few two-story motels here on the west coast. And it was a family affair. My mother was integral to the business, too — designing the décor and selecting staff uniforms. On weekends, starting when I was just five, my father would take me with him to work, and among our many routines, we would check out the cleanliness of the bathrooms. He’d inspect the men’s rooms, and I’d inspect the ladies’ rooms. Replacing the toilet paper was not glamorous. But I learned early on that when you run a business — no matter how large your enterprise — no task is ever too small for you, and that your example as a leader sends a powerful message across your entire organization.
Then, at the height of his career — at the age of just 39 — my father … my inspiration in so many ways and especially as an entrepreneur … had a sudden heart attack … and he died. I was thirteen years old. I was devastated … and our family was heartbroken. Having lost her best friend and soulmate, my mother struggled with depression. I often took on the role of a parent, looking after my younger brothers. Then — ten years after losing our father — we lost our mother in a terrible traffic accident.
So by the time I was sitting where you sit today, I had lost both my parents. My brothers and I were forced to rely on each other, as well as our extended family, friends, teachers, and classmates. And while I learned the hard way that life will not go as planned, I also learned another important lesson — life is a team sport, and no matter how self-reliant or resilient or talented we may think we are, none of us will get very far unless we surround ourselves with supportive teams — family, friends, and colleagues who we like, who we respect, and who we trust.
I share this with you because this tension — between trusting in yourself but also relying on a team, and knowing when to do which — has been central to my experience — to my successes and my failures — over the past three decades. This lesson has guided me as an entrepreneur, as a public servant, as a citizen, as a friend, and as a wife and parent.
At the same time, I’ve always tried to find the “white space” where there’s an opportunity to provide a new product or service that doesn’t yet exist, or to make a difference in the lives of others through original thought. With the time that I have left, I want to share with you what I’ve learned along this journey, with examples from three different rooms.
First, the boardroom. When I graduated from Stanford GSB, my dream was to join our family businesses. But for nearly half a century, the enterprise had been run by the men in our family. Now, as you may have noticed — I am a woman. Well, I felt I should be treated equally — just like the men. Moreover, the men in my family had already made their mark in hotels, in manufacturing and in investing. I decided that to make a difference, I had to find my own “white space.”
As it turns out, I was living a challenge in my own life that opened my eyes to an unmet need, requiring a new product. With my parents gone, I was caring for my elderly grandmother, and we had a hard time finding high-quality residential living options for her. It occurred to me that there must be families all over the country in need of the same thing. So I leveraged my Stanford GSB training. I put together a strategic plan. I hired a team. We lined up the seed capital. We devised the product — apartments for seniors in their 70s. We developed the sales and marketing approach. And at age 27, I launched my first start-up.
Then, I made every mistake in the book! I hired some of the wrong people … people who didn’t share our values or our vision … and to be honest, some were just incompetent! I wanted to fire them — but I didn’t know how to do that! Our marketing and product were not quite right. We were losing money fast — and I was terrified! I went to my uncle — who was the chairman of everything in our family — and said, “if I can’t turn this around within six months, you should fire me and liquidate the company.”
Fortunately, my uncle understood demographics — the baby boomers were aging in gigantic numbers — and he saw the long-term potential for senior living. So, he didn’t fire me. He coached me. We retooled our approach, our product and our marketing. I learned how to fire people … and how to hire new talent. In time, we turned the company around — and today that business has thousands of customers and employs thousands of people.
So I would simply say to each of you … when you find yourself in the boardroom, rest assured — business will not go as planned. Have the courage to adapt and go in a new direction — even if one of your employees comes to you in a panic and tells you to fire her and liquidate the company!
Many years later, I found myself in a second, very different, room — the White House Situation Room. In 2013, President Obama nominated me to be Secretary of Commerce. I had 27 years of business experience, but I had never served in government — and the learning curve was … steep. It was exciting … humbling … and terrifying. Commerce has 12 different agencies, 46,000 employees, and it seems, even more acronyms! I routinely found myself in the Situation Room alongside the likes of Vice President Joe Biden, Secretary of State John Kerry and National Security Advisor Susan Rice — leaders with decades of government experience. Well, I was never going to match their experience in government. But even in the Situation Room, there was “white space” to be filled. In fact, one of the reasons that President Obama asked me to serve was to bring a different perspective to the table — to be the voice of business. So that’s what I did. For example, I saw that one of our largest economic relationships — with Mexico — wasn’t getting the attention it deserved. So my team at Commerce and I stepped into the “white space.” It wasn’t always easy.
Early in my tenure as Secretary, on a flight to Mexico, Vice President Biden turned to me and said, “I want to talk about that memo you wrote to me.” I think my face went white — I hadn’t written a memo to him! Or so I thought. It turns out a memo had been sent to the Vice President from our Department … under my name … without anyone ever telling me or even showing it to me! I was horrified! But I made sure that never happened again, because — whether you’re in business or government — when your name is at the top of the page, it’s your reputation on the line, and you will be held accountable.
Despite that bumpy start — our team rocked it. And over the course of three years, we strengthened our economic ties with Mexico and made a real difference in the lives of people on both sides of the border. We even opened the first new commercial railroad crossing between our two countries in more than 100 years. Which is a reminder … in whatever room you find yourself in life — even the Situation Room — at a time when others want to build walls, you are more likely to accomplish your goals by building bridges.
Which brings me to a third and final room — the classroom. Specifically, the classrooms of Chicago. Even though I lost my mother far too soon, I have always remembered what she taught us … “to whom much is given, much is expected.” Today, my husband and I look for opportunities to give back to our hometown of Chicago and its people. We found “white space” here as well.
Across the United States, there are hundreds of thousands of young people who were born abroad and brought here illegally by their parents when they were babies or little children. They are recognized by our government as DREAMers. They speak English. They go to school and pledge allegiance to the flag. They play football and baseball and soccer and play in the band. They’re Boy Scouts and Girl Scouts. They are as American as you and me in every way — except on paper. And they are recognized by our government as DREAMers.
But then there comes a moment when they learn the truth. For some, it comes in high school when they start applying to college. They learn — to their shock — that they are not American citizens. As a result, they are not eligible for state or federal aid. Their dreams of a college education — their plans and hopes for the future — suddenly disappear.
This — my husband and I thought — is fundamentally wrong and unfair, and it’s a “white space” we could help fill. So a few years ago, we started offering DREAMers in Chicago scholarships to help them go to college. Before these scholarships, fewer than 30 percent of DREAMers in one group of Chicago schools went on to a four-year college. This year, 94 percent of these graduating DREAMers are going on to four-year college. Recently, we received a beautiful message from one of these DREAMers who is now at university. The scholarship, she said, shows that “dreams can come true.” And she added, quoting Cesar Chavez, “with a humble heart, I’d like to say si se puede!” The courage and perseverance of these young people is an inspiration. By this fall, with these scholarships — nearly 200 of these hard-working, talented DREAMers from Chicago will be pursuing their dream of higher education.
Let me just add, the news yesterday that the Administration will allow, for now, these DREAMers to continue living, studying and working in the United States — without fear of deportation — is a good thing! And if we truly want to be a nation that leads “with compassion and with heart,” then we should remove the threat of deportation once and for all and allow these striving young people to finally become on paper what they are in their hearts — full American citizens!
Class of 2017 … today too many business leaders feel pressured to take a narrow view of responsibility — that their one and only obligation is to their shareholders and to increase their profits. But here at Stanford GSB, you have committed yourself to becoming “innovative, principled, and insightful leaders” determined not only to change organizations, but to “change lives” and “change the world.” That is my hope — and my wish — for you. That you will apply the incredible skills you have gained here — not simply to generate profits and wealth, but to be good stewards beyond your business — to your communities, to your country, to humanity. You have the opportunity to live your values — whether it’s tutoring a child, retraining rather than firing a worker at your company, welcoming a refugee to your city, helping an immigrant realize their American Dream or perhaps even committing to public service.
And I promise you — more than any quarterly report or earnings statement — giving back in any of these ways will give you the most satisfaction in life. “To whom much is given, much is expected.” Your career, your life, will not go as planned. But trust in yourself; Have the courage to find your “white space” — even if it terrifies you; Surround yourself with great teams — family, friends and colleagues who you like, respect and trust; Remember that no matter how high you soar you’re never too important to check the toilet paper in the restroom!
And I have no doubt that each of you will truly “change the world!” Congratulations Class of 2017!