Investiture 2004
The featured speaker at Tuck's 2004 Investiture ceremony was Donald K. Peterson T'73, chairman and CEO of Avaya, Inc., a leading provider of communications networks and services for businesses. Mr. Peterson is also a member of Tuck's board of overseers. Prior to his appointment at Avaya, he was executive vice president and chief financial officer of Lucent Technologies.
Investiture Ceremony
Tuck School of Business at Dartmouth
June 12, 2004
Remarks by Donald Peterson T'73
Chairman and CEO, Avaya, Inc
Thank you, Dean Danos.
Congratulations. You graduates have waited a long time for this day. Though not as long as it may feel to the people who've supported you.
You'll be earning now, getting your chance to show it's all been worthwhile. My first piece of advice-take your parents out to dinner. And if you've been supporting yourself...take your parents on vacation.
Thank you for a kind introduction. I come from a company just three and half years old. If you decided on an MBA, then took GMATs and came straight here, that decision is about as old as Avaya.
So let me make clear what Avaya is. Our company serves more than 90 percent of the Fortune 500 with voice and data communications.
Wayne Brady tells you this in commercials on CNN and CNBC and MSNBC. As serious Tuck students, you hardly watch anything else.
Certainly not The Daily Show. Or is that even carried in the Dartmouth area?
And if you're really zealous, you would also see our print ads in CIO magazine.
I feel modestly proud to be here and enjoy my chance to help complete your Tuck experience. To be less modest and more ambitious, my plan is to summarize much of the advice you'll ever need, foretell how you'll prosper, and share the secret of bouncing back from adversity-something most of you will someday experience.
In June, graduates have a career strategy...they're ready to take on the world. But in the military, they say no strategy survives contact with the enemy.
By July, the world may strike back.
These are my few minutes to help you get ready for the ups and downs.
Investiture speeches always include advice. I thought we'd save time and get extra value by recapping what predecessors at this podium said over the past four years.
Ready? (This is the part worth remembering.) Keep balance in life. But keep a strong focus. Be adaptable. But keep your career and personal needs in harmony.
Be humble. Ego is the root of failure. Be a leader. Meeting organizational needs will be your highest calling.
That's déjà vu for the dean and others who have sat here in past years.
For you, it's more proof that middle-aged business people all think alike.
Seriously, careers well managed include a common body of experience and lead to common wisdom.
It's not only true among business people. Bill Russell of the Boston Celtics wrote his own rules of success. He said:
... build trust and truthfulness
... put your ego in service of the team
... control the action
... delegate, but lead when it matters
... and define leadership as the extension of your standards when you aren't there.
However, good rules may still let you down. You have also heard that you should march to the beat of your own, unique inner drum.
Paradoxically, you have to do that, too. The most successful of you will manage the paradox. Put it this way: a lone, devoted amateur built the ark. A large team of professionals built the Titanic.
When my company was being spun off, my inner drum told me that a division of a large company had potential far exceeding what the wisdom of the time suggested.
In a fast changing telecommunications industry, some were confused about where value lies. With three and half years of turnaround, it is too soon to declare business victory. But the rewards for those who shared faith in that business already feel like success.
In a minute I'll talk a little about my business-about lessons it's taught and confirmed for me.
First let's talk about your business.
Investiture refers to putting on clothes, or robes The Latin root means, to clothe. As the word passed through Italian, it meant both to clothe and to invest. That's provocative, isn't it? To invest is to take an idea for value creation and dress it with resources to create customers and generate wealth.
Your investiture robes symbolize investment in yourselves. With your investment, you've bought an option on a strong future. The option value of a Tuck MBA is high.
Good. Because you paid a lot for it. Somebody did.
For most of you, it will pay off in directions yet to be defined. Derivatives hadn't been invented when I started my financial career. So what's defined and available today won't necessarily shape your major direction.
But let's look at your immediate directions.
A lot of you are going straight into careers as professional investors. In fact, nearly half of you have landed jobs already with banks, securities firms, and so on. You may immediately find yourselves in roles searching for new directions of investment.
Another ten percent of you are going with consultancies. More than a third of you are going into manufacturing or retail. Your jobs will be to sustain your companies' or your clients' success by freshening the value they deliver. In the clothing metaphor, re-tailoring their offers.
This brief analysis of the jobs you've taken frames a question: Where will Tuck graduates look to find ideas to dress with resources-business models worthy of investment, likely to generate fast-growing value?
Let me frame an answer: In May, The New York Times published a table of job categories growing fastest. This article reflected the work of Michael Cox, chief economist at the Federal Reserve Bank in Dallas.
He categorized emerging job segments in a new and interesting way.
The biggest, fastest growing category he termed "people skills and emotional intelligence." Face to face jobs, you might say. This category includes jobs in nursing-they grew 28 percent in a decade, adding a quarter million jobs. Recreation workers grew 37 percent and added 35,000 jobs.
Next strongest category were jobs of "imagination and creativity." Artists and directors-60,00 new jobs, 61 percent expansion. Designers, a quarter million new jobs.
And third-"analytic reasoning" jobs. Legal assistants grew by two-thirds-160,000 new jobs.
My point: Investment and career opportunity lurks here. Creative categories can guide you. For example: Which of you will define a business model that extracts higher value from an expanding demand for recreation workers?
Or, in our troubled medical sector, can you discover a business model for deploying registered nurses that yields higher value than models we know today?
Or, look at the media business. The television commercial is growing less effective as audiences for commercial messages now use the Internet and a wide range of channels. For you, the challenge might be to extract the highest value from those designers and directors in the morphing media industry.
They say 5,000 U.S. jobs are being outsourced abroad every week. Up to 18 percent of U.S. software engineering jobs will move abroad in the next ten years. That is unfortunate for individuals, as in any economic transition.
But from an economic perspective, that job market change is the flip side of the same guidance I mentioned. It is a resource for you to invent high value business frameworks for high-value human skills.
Maybe for those software engineers you'll find a business model that moves them into roles unknown today.
They say we can't all be geniuses, but we can all be less trivial. It doesn't take genius to discover new business models-just observation, conversation, and a taste for being surprised by the ways data sets intersect.
But if you do discover a new business model, they'll call you a genius.
So I've summarized good advice...and foretold how you'll prosper. The third thing I promised was, how to bounce back from adversity.
My company bounced back from adversity. The secret is not genius, or brute force, or charisma. The secret is perseverance. Save energy for big things, not wrong things.
The wrong things are events. You can't manage events. You can only manage people. Not that managing people is easy...it's just not impossible.
You can't change events. You can only regroup tomorrow, with the people you know and trust, who are focused on steps ahead, not the rubble left behind.
Here's an event my company had to survive. The event may surprise you: we had to survive the Internet. Over the past decade, the Internet gradually became capable of carrying satisfactory voice calls and telephone applications.
At first, however, the Internet beguiled everyone as a new basis for communications. Web-based business, email, instant messaging-the emergence of these good things was for us a challenging event.
Observing this event, it's fair to say, our business suffered from Internet envy. We briefly tried on new clothes to look like a data communications business. We dithered just long enough to confirm my point that it's wasteful to fight events.
Of course you cannot ignore events. Big events are discontinuities-they are waves. You measure them, then you ride them.
You'll surf farthest by remembering that human nature is not discontinuous. The ways people value things will resemble ways of the past.
We discovered that the Internet "event" was really part of a cycle. The automobile drove out the buggy, not personal transportation. The Internet did not make people stop calling each other.
It was up to us to re-tailor voice communications and drive our own recovery. We did that. We've started an upturn based on our sustainable differentiation, which includes communications software. Ahead of competitors, ahead of Internet suppliers, we retailored our value using Internet resources to make voice communications powerful and valuable in new ways.
This isn't the place for details, though I would love to share them. (If you come for an interview you'll hear more.) I can say that value has returned to our market. Avaya appreciated faster than any S&P company during 2003.
We did it by executing precisely in all the business disciplines you've learned at Tuck. We controlled the controllable. We managed our people-and their sense of service and commitment, which is ingrained in telecommunications people.
In other words, we tapped their commitment to high functioning and high value. They stayed focused on what they knew best-which is helping people work together without being together.
Our company bounced back from despair, if not disaster. You can, too. You will get your chances. And when you do, you'll share an exhilaration that many in our company feel today. Some say it's the highlight of their career.
Your Tuck MBA says a lot about your readiness for meeting the challenges of good times and bad. If I can add value to that degree, I would say:
On a journey with no finish line, don't waste energy. On a journey that is cyclical, the down is part of the up.
Such is the journey that starts for you on Monday. Believe in yourself. Good luck, and remember: Treating parents brings good luck!
For more information on Tuck's Investiture, contact the MBA Program Office at mba.program.office@dartmouth.edu.
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