Thank you very much. I am privileged to be with you. My speech today will be directed to the students. Some of you got up this morning and said, "Oh, gee, I have to go to class." Some of you looked in the mirror and said, "It is a bad hair day." You ought to get up every morning and look in the mirror and say, "Boy, am I lucky," because you just, by the happy accident of good luck, live in the country that everybody else in the world dreams of coming to some day. And on top of that, you are in college.
We have 65 million people in our work force, working their hearts out and not making a very good living, with high school diplomas or less, and they would give anything to have the opportunity that you have to get a college education. Now I would like for all of you college students who are paying your way through college and are not on a scholarship to raise your hands. Okay, now I have got news for you: you are all here on a scholarship. You are paying part of your way, but the hard working taxpayers of Kansas are picking up a big part of the tab for your education, and I bring that up because I do not want you to ever forget that people who are out there working their hearts out, the policemen, the firemen, the electricians, the carpenters, the waitresses, and the janitors, are giving you this great opportunity. Please, when you see them, never feel special, never feel cocky, just feel lucky that you are getting off on the right foot in life. But I think it is so important when you go to a great state university like this, that you understand. Folks out there in the fields are paying your way through college. You are paying a little bit; they are paying a lot. Many of you come from homes where you are the first generation to be able to attend college. My sister and I were the first in our family's history to be able to go to college. That is the American dream: each generation having a better life. But when that happens, typically your parents really have to work and sacrifice, and in today's society, I am sure there are many of you where both parents are working so that you can have the dream that never materialized in their lives. But they can realize their dreams through you if you do a good job, and their dreams will be fulfilled through your achievements.
Let me tell you one story. There is a great young man in my company, Electronic Data Systems, who became the president after a number of years. His grandfather had to flee Russia because he was Jewish. He came to Ellis Island; he lived in an attic in Brooklyn for two years, working as a tailor. You say, "Wait a minute, Ross, wasn't there some welfare program for him?" No, he went out and got a job, and then he paid for his little room in an attic, and he worked as a tailor. He could not speak English; he had every reason in the world to say "Will you take care of me?" No, he was a proud man; he took care of himself.
It took him two years to earn enough money to buy a train ticket to Ft. Worth, where he had some family members. He came to Ft. Worth, worked all his life as a tailor. His son was a fine young man, went in the life insurance business as a salesman. That is Mort's father. When Mort Myerson was made president of Electronic Data Systems, we went to extraordinary efforts as a surprise to Mort to have his grandfather, who was 95 years old, present in the room when the announcement was made. And no matter how bad my memory gets as I get old, one thing I will never forget is after the meeting Mr. Myerson came up and hugged Mort, his grandson, and said these words, "Through you, Mort, I have realized the dreams I had as a young man when I came to America."
Now that process still goes on, and that is the magic of this great country. Young people are always asking me, "Ross, what is success?" And they get their heads all twisted, because they think you measure it by how much money you have in the bank. Success is being the best at what you do. You say, "The best in my town?" No. "The best in my country?" No. We live in a tiny world. Now you have to be the best in the world if you want to get in the game. Now you just came out of high school, where if you are like Texas, you go to the band contest, the state, and if you cannot even play an instrument they will give you a five-foot-tall statue for the band with the best personality. That is not the way it is when you get out there in the real world, folks. You either win or lose, and they do not even give you a red ribbon for second place. And that is what you have to get geared up for in college. You have to be the best.
You say, "Now are you just talking about business?" No, if you are going to be a minister, be the best. If you are going to be a doctor, or teacher, or social worker, be the best. I hope you cannot sleep at night unless you achieve your full potential, because that is the characteristic that causes people to have the ability to change the world. They have to be driven to make a difference and to be the best.
Let me give you an example that is really relevant here in Kansas, where you have done a lot of great aircraft work. Let us assume we do not know how to fly, that we are going to build an airplane. Well, obviously, this would be a big government program, and we would appropriate billions of dollars, and people would stand in line and fill out forms for eight years. If we had not forgotten what it was all about, we would eventually give someone the grant to build an airplane. That is not the way. Well, interestingly enough, a Dr. Langley had the federal grant to build the airplane, but two bicycle repairmen from Dayton, Ohio, with no education, were driven to fly, and they were the Wright Brothers. Can you imagine if they had gotten in line, got to the head of the line, they say, "You gentlemen want to apply for a federal grant?" "Yes, sir, we do." "Well where did you go to school?" "Did not go to school." "What do you do for a living?" "We repair bicycles." Say, "Do you sell new bicycles?" "No, we just fix old bicycles." "Next." Get on the bus and go back to Dayton, right? They had to fly. You have to read the book about the Wright brothers; they lived it, they crashed a hundred times. That is part of everything you are going to do that is great, you are going to crash a lot. But they taught the world to fly.
Thomas Edison's teachers thought he was dumb. Thomas Edison tried every way in the world to build an electric light, and when he finally got down to the last option, he got it. He literally did it trial and error, if you look at the story. But here, as Paul Harvey would say, is the rest of the story. He learned so much trying to build the electric light that inventions just spewed out of this mind for the rest of his life, and he changed the world in many, many ways.
That was a young man. You say, "Ross, that is history, that cannot happen any more in the modern world, you have to go get that federal grant, you have to stand in line, you have to fill out forms, you have to do all the right stuff." There was a young man a few years ago out in California so smart they let him attend engineering classes at Stanford while he was in high school, but so poor he could not afford to go to college. But he loved to play with integrated circuits or computer chips. And he had a little shop in his dad's garage, and one day his dad went in and said, "Son, either build something you can sell or go get a job." Sixty days later Steve Jobs put the first Apple computer into a store, and it was housed inside a wooden box made by his dad. And the rest is history. He changed the world. So that is just one example. There was a man named Bill Gates, he got into Harvard but he was bored because he was so smart, and he dropped out and he had to build a Microsoft, and the rest is history.
That is the way things happen. But they had to do it. That is the constant factor in all of these things. Well, can you measure success by how much money you make? No. The best way to assure that you will never be successful is to make money your God. And I have had the interesting experience of knowing most of the people who made a lot of money, that includes Howard Hughes—only over the phone, but he used to call me over the phone. But you take the rest from Howard Hughes to Mr. Getty, and on and on. A lot of them were frustrated; they were disappointed. As older people, they were bitter. Their personal lives and their children were a mess. So if making money is your goal, go back and think it through again. Financial success and happiness are absolutely unrelated.
I have had the interesting experience of living all the way across the economic spectrum. I have always contended I was born rich, because I had two wonderful parents. And if you have wonderful parents, you also were born rich. That is all I had, but that is the best thing you can have. This is incomprehensible to young people, but things were so tough in the Depression.
Once just before Christmas one year I walked in the kitchen, [and] my mother was crying. She never cried. These were strong people. I said, "Mother, what is wrong?" she said, "Your dad just sold his horse," which my dad and I rode every day after school. He just sold his horse so that my sister and I could have Christmas. Now he never said a word about it. It would not have been appropriate to talk about it. He never whined, never complained; that is just something he did. I waited till I was grown to thank him, because at that time it would not have been appropriate to thank him, but it is something, obviously, I will never forget. So that is the greatest wealth you will ever have.
Now thanks to the success of my company, I have been financially successful. But I am not one bit happier than I was as a boy in Texas in the Depression. I am not one bit happier than I was when Margo and I drove into Dallas when I got out of the Navy, with everything I owned in the trunk of our car. And the things that have brought me happiness over the years are Margo, five wonderful children, and eight, almost nine, wonderful grandchildren. Those are the precious things in your life.
I can sum up this by telling you the story of the poor lady who was walking down the street one night in front of the opera house, holding her two children in her arms. And the rich lady who was going to the opera, dressed in her jewelry and her pearls and her beautiful clothes, was walking toward her. And when she got to her, the rich lady looked at the poor lady and said, "And, Madam, where are your pearls?" God bless the poor lady, she drew herself up proudly, pointed to her children, and said, "These are my pearls." You will never have greater jewelry or greater wealth in your life than your children, and I tell you that from personal experience. You may be saying to yourself, "But I want all those things that money can buy." You know what happens to all those things when you buy them? They break. I had that driven home to me as a young man. We were going around the world on a destroyer, [and we ] finally got to the Mediterranean, and for the first time in my life I was going to get to see a yacht. Never seen one. So I went down to the yacht basin—I will never forget it—there were all these people sitting there in their fancy clothes and what have you, and not a one of them was smiling.
And I contrasted that to my childhood when we would look forward to going out into the woods for a picnic. My mother would fix food and we would go out there and we would laugh and we would tell stories and we would have fun and we would come home. And here these fools had the ultimate toy and nobody was smiling, because probably the generator broke, or the captain quit, or the cook decided not to cook breakfast. And they had this big complex toy, but it did not bring them the sheer joy that simple pleasures can bring you. Things will not bring you happiness. Money will not bring you happiness.
Now I have to talk for a minute to the most brilliant graduates here in the room, those students here in the room, those who have received the highest honors, and you have got a lot of options available to you. I worry about you, because life has been too easy for you, and you tend to be cocky and you should be humble. You have been given a genetic gift. You have a wonderful mind. It is like a perfectly wide stereo system that has no static. Most of us have a lot of static in our head. You cannot relate to that. You just scan a page of complex scientific literature, and it is in your brain. Most of us cannot do that. Your minds can go places and do things that our minds can never do.
But there is a minus to this. This tends to make you arrogant and complacent. Over the years I have worked with thousands of young people. Again and again I have seen the average students beat the best and brightest in business. Since you have this unique gift, my challenge to you is use it to its full extent to make the world a better place. Use it to make a difference. Here is your problem: success has been too easy for you. You do not have to sweat intellectually to make As or 4.0s, therefore you are not intellectually tough. You do not know what it is like not to finish first. You do not know what it is like to strive and fail to pick yourself up, dust yourself off and try again, and then just finish the race and not get the gold medal. The people who have to strive and sweat, persevere, have a big advantage over you. They are used to being disappointed; they are used to having to recover from defeat; they have learned to persevere.
Now I want to talk to the students who have to struggle to graduate. Those of you who do have to read it five times, underline it, then memorize it to make an average grade. I have got a lot of experience with you, too. I do not want you to think you are dumb. In fact, you are building a unique advantage, you are learning a priceless lesson. You have learned not to quit, not to give up. You expect life to be hard, and you expect to pay a price to succeed, and you will be amazed at the advantage this gives you over those who have never experienced that. You just keep on keeping on until you achieve victory. It is a big asset to have.
Now I have also had the opportunity to meet many, many people that you all would consider very successful.
Interesting comment about them. Most of them are just average when it comes to their intellects. You say, "Ross, they must be geniuses." No, they are just average folks. In nearly every case their roaring success is built squarely on the rubble of many, many failures and disappointments. They learned from their mistakes, they did not give up and they went on to victory. They knew they were not too smart, so guess what they did? They surrounded themselves with talented people. They got the multiplier effect that the genius never gets.
If I am a genius, I am the brightest guy in the room. I cannot let you do anything, because you cannot do it as well as I can. If I am just kind of half there and I have some bright people around me, I am going to tend to hand it out to all of them, and I have the multiplier effect, and then finally you start with two or three or five or ten, and in my case, I wound up with over 50,000. That is a heck of a multiplier. What if I had been trying to do it all myself? I would have still been in a corner by myself, right? This is really basic stuff, but for some reason, a lot of people miss it, and that is why I am covering it.
Let me give you an example. Never forget again how much luck plays in your life. I am going to tell you one story of a man I met who is a factory worker at General Motors. His name was Don Effland. He was so smart, he was accepted at M.I.T as a young man out of high school but could not afford to go. That tells you something about his mind. Then he was so talented he was accepted at West Point—and this will break your heart—he failed the eye exam. Let me give you a counterpoint, myself. I came out of nowhere, too, like Don. I never would have been accepted at M.I.T., and I am not being modest. By blind luck I got an appointment to the Naval Academy and I passed the eye exam. Now I do not have a lot to do with how good my eyes were at that time. Don did not have a lot to do with how good his eyes were. I got to go on and have every opportunity a person could hope to have in life, Don spent his life on the factory floor. So as things are going well for you in life never forget that luck plays a huge role. The ball bounced in the right way in your life; in Don's case he did not get the breaks. There is a good ending to this story. Don is retired now, and guess what he does. He lectures at M.I.T., the school that he could not attend as a young man.
The people who are going to make it in life are people who understand the strengths and weaknesses, reach out and surround themselves with talented people, and if you have any cockiness or arrogance in you, go to the doctor tonight and see if he cannot give you a pill for it because you need to get rid of it as soon as you can. Go through life being a giver, not a taker. We just came out of the "me generation," and I hope we are headed into the "we generation" that gets us back to the basics that made this country great.
On the covered wagon trains, if a family did not have food they shared it. And I could go back and give you a thousand examples like that, and I can give you a thousand examples of people who still do that, but now we have kind of gotten into a selfish mode. Society does not work if people are selfish. I hope you will be a giver and not a taker all your life. I hope you will help other people at all times. You were taught a lot of interesting things at your home, in your place of worship, in children's programs like scouting, that are really the difference between a successful and an unsuccessful society. You say, "Well, Ross, what are you talking about?" Here is one right out of the Boy Scouts. Do a good turn daily. Think what a great country we would be if you did that. If we practice that then society will work a whole lot better. If you are just going to spend all your time looking after No. 1, society will wither. If you spend a lot of time helping to create opportunities for other people, because you were fortunate enough to have a college education, society can bloom.
Now sometimes it is tough to find a job after you get out of college, and people are always saying, "Ross, how do I find the right career?" And I say, "It is not pretty, just go out and interview, interview, interview until you find something you have got to do." You say, "Well, how do you know?" "Your instincts will tell you." They say, "Well, that seems odd." Your instincts are the sum of what you are. That is everything that has happened to you in your life. Sooner or later you will say, "That is what I have got to do." But you have got to go out and knock on doors today. But our best and brightest say, "Companies should come to me. I should sit here on the campus till the recruiters show up." Fine, you are going to be at a disadvantage, because the companies who come here may not offer you the right position. If you go out and look you may find it.
"You mean, I should call people, a college graduate?" Absolutely. "I should travel on my own ticket?" Absolutely. Just get out there, see it, feel it, taste it, and then you will find the job you have to do. Now that is where you ought to start. You say, "Well, what if I am wrong?" Then back off and try again. You may be wrong, but you will find that right job if you will look hard enough for it, and not just sit around and say, "Who is going to come talk to me?" Probably nobody. In the process do not get discouraged if you have to try two or three times—maybe the first two are misfires— and then finally you find just the right job.
Always play to your strengths. Decide whether you should be a professional or go into management. Everybody says, "Oh, I have got to be a manager." Well, only if that is where you will do the best job. What if Dr. DeBakey, the famous heart surgeon, had said, "I have got to be a manager." What if Mother Theresa had said, "I have got to be an executive?" What if the Wright Brothers had said we would like to run a big bicycle company?" "What if Thomas Edison said, "I would like to just go manage a bank somewhere?" Always pick the shoe that fits. Play to your strengths and make a big difference. Then you say, "But everybody else is doing this, they want to go into management." I say, "Do not follow the herd. Always listen to your own drummer. You do not have to be an executive or person in management unless that plays to your skills. Now if you do go into management you have got to develop the skills to lead others, to motivate others and to tap their full potential.
You say, "You mean I have to learn to manage?" No. You manage inventories, you lead people, and there is all the difference in the world. Unfortunately leadership is not taught in many of our colleges. I can sum up leadership in one sentence: you have to earn the trust and respect of other people every single day by treating them the way you would like to be treated. You say, "Ross, treating them the way you would like to be treated sounds like the golden rule: do unto others as you would like them to do unto you." You got it, right there.
Then they say, "All right, now I have a job; Ross, I would like to start a company like you did." Here is what you have to do. You have to find that right job, you have to serve an apprenticeship in that industry. While you are in that apprenticeship you look for unmet needs, and then you will find something that is not done, and you will have an opportunity there to create a company of your own. I say, "Well, step one, I advise you to have a goal, and your only goal should be to build a great company." You say, "No, Ross, my goal will be to make a lot of money."That guarantees you will not build a great company, that guarantees you will not make a lot of money. Forget money, and whatever it is you are going to do, just be driven to do it better than anybody else, and your theme song should be nobody does it better than you will.
Once you start your own company, you have to be available to your customers 24 hours a day, seven days a week, and nobody serves customers better than you do. As you build your company you have got to learn to make decisions. You say, "Well, I would rather think about it six months." That is what I love, a competitor that wants to think about it for six months. Go make a decision, just kill the snake when you see it and move on, and you will have an incredible advantage. Be action oriented, not talk oriented.
And as I have said to the people who work with me, it does not take forever to do great things. Never forget God created the heavens and earth in six days and took the seventh day off. And believe it or not, my little company got its foot in the door and got started because we would do in 90 days what every established company in the computer industry took 18 months to do. And the best part was, when you put your head down and do something quickly, you do it better than people who do it in 18 months, because they spend the first year planning to do it and thinking about doing it. When you have 90 days you just go do it. And the quality of the product was great.
And again, let me say, make your goal building a great company; do not make your goal making a lot of money. Making the money comes as a byproduct of a great company. As you do this never forget how insignificant you are in the big scheme of things, and surround yourself with talented people. Create—this is so important. Say, "Okay, I started the company, I have got the stock, we are going now," but will the hopes and dreams of everybody in your company materialize, or just yours? You see, in our company we had a stock program for everybody. I have computer operators that are multimillionaires. I have guys that worked in the loading dock in the early days; they are millionaires. You do not want to know how many millionaires we created; you do want to know what kind of steam and enthusiasm that created because this was their company. It was not my company; it was our company. And any time we ever decided to do anything, we would have a meeting of all the folks in the company and say, "What should we do?" And that was the decision. And I could make several hours of speeches on that.
Bring strong people into all of those areas where you are weak. That is so important. Your product has got to be the finest in the world, and [even if] you are in first place with your product, just get up and run harder every morning. If you ran the four-minute mile yesterday in track, you know that is just a record to be broken, [and it is the] same with the product. You say "Well, Ross, we just got started, we do not have much money" That is wonderful, because brains and wits will beat money ten times out of ten. And when you have got a lot of money it is kind of like a narcotic: let us make a big capital investment in this new idea. If all you have is brains and wits you make a big intellectual investment in this new idea, and you just zap your competitor while he is out there building facilities and making a five-year plan. Probably in a year and a half you did it. There is the difference.
If you are going to have a great company you have to make sure everybody in that company knows who you are and what you stand for. Have a simple, clear, and very short statement. This is what we are, and this is what we are going to be, and this is what we stand for. Make sure everybody has a copy. Spend enough time in personal conversations with them so they understand this is the code of our company. Teach leadership. They did not learn it in high school; they did not learn it in college in many cases. If they were in the armed services they probably got their only dose, but in today's world most of them were not.
One of the smartest things I did in retrospect is [to teach] a one-week course on leadership before we ever let anybody be responsible for other people, and these were the fundamentals. Now you all know that before you play tennis you get someone to coach you on how to stand, how to hold a racket; that is a big advantage over just going out there and swinging around and getting bad habits. Same for golf, same for leadership. Very important. If you want a great company and if you want your people to be positive and inspired, conduct your business in the center of the field of ethical behavior, not along the sidelines, and do not ever get into discussions. "Is this legal or illegal?" The only question is, is it right or wrong? That keeps you in the center of the field of ethical behavior. Treat every person in your company as an equal, as a partner, and as a team member. And the worst thing that you can do folks, is start categorizing people as an E-3. There is something in every person, no matter how humble their background might be that just screams out, "I am unique, I am special. There is only one person in the world like me. Treat me like a human being and do not treat me as a commodity." And that will make all of the difference in the world.
You say, "How do you do that?" Just have one health care program for everybody, just have one pension program for everybody. When I got on the Board of General Motors as the largest stockholder, at the first board meeting I said, "Are our pension funds fully funded?" Ours was overfunded in my company. They said, "Ross, we have three." 1 said, "Why do we have three?" "Well, we have one for the executives, we have one for the white collar workers, and one for the union workers." And I said, "Well, okay, are our three pension funds fully funded?" And they said, "One is." And I said, "Need I ask which two are not?" Pretty basic stuff. If you just had one pension fund at General Motors they would all be funded, right?
Okay. Pretty simple. That is not the kind of stuff you learn at Harvard, but out here in Mule Shoe University it will help you to know that. Do not ever have any kind of perks that separate people.
I will never forget the first time General Motors came to see me, the chairman was there, everybody was there, and they were down and we were meeting in our offices, and I said, "Well let us go to lunch." They said, "Terrific." I walked downstairs to the cafeteria, and they all just went pale. They said, "We are going to eat in the cafeteria?" And I say, "There is no place else to eat." And then we got in line, and the guys looked at me and said, "Ross, I am amazed that you stand in line." I said, "Most of these guys are bigger than I am; I do not have an option." And then the last part is the part I love the best. They said, "Ross, the food is really great in this cafeteria. What do you do?" I said, "I eat here." And they said, "Haven't you ever. ..." I said, "I have never said a word to the cook, never said a word to the people that run the cafeteria, but life is too short to serve bad food where the boss is eating, right?"
I cannot tell you what— I would eat every day typically by myself, and there would be three empty seats at the table, and everybody knew they were welcome to sit down, and everybody would sit down and tell me what was on their mind. This is another thing that drove General Motors nuts. Every single employee could come see me any time they wanted to. Now that sent a message to everybody in a management role up and down the chain of command that they better have their door open, they better be talking to the troops that did the work, because they could all come see me. And General Motors says, "How do you find time to listen to all these people?" Listen to this, young people: every great idea that made that company successful came from a young person too young, too inexperienced, and typically since he or she was an engineer, too inarticulate. Because engineers mumble a lot. They would come in, and down in the center of that was a deep flawless diamond. There was no better use of my time.
General Motors said, "Ross, how can you do this9" I said, "Well, I do not have a schedule." They said, "What do you mean?" I said, "Guys, you guys are scheduled every 15 minutes. If I wanted to do that I would have been a dentist." But I keep my schedule open, and I am listening for ideas, and I have all these great people running the company, and I want to talk about where we go. And believe me, the young people always came up with the wild, weird; see, they do not understand that water runs downhill. They do not understand that this is a square and this is a circle. They think outside the box, and outside the box is where the opportunities are.
You have to have an environment where there is no penalty for honest mistakes. Now honest mistakes to great people are very painful. And my big challenge always after one of my tigers made an honest mistake was to pep him up or pep her up, and the way I would do it, I had a standing policy that if you made an honest mistake, then we were going to put you in charge of the next project, because you were not going to make two in a row. And that served me well.
The biggest problem was the impact on the person. So we never beat up on them for making an honest mistake, and I have said a thousand times to them, "These are like skinned knees on little children, they are painful, they are superficial, they are learning experiences, and they heal quickly." And your best people are covered up with scars. If you stay on the front lines long enough you are going to get hit. Then you can create a culture in your company where I will keep my nose clean, I will never go on the front lines, I will find some naive character to go out on the point, and if he or she makes a big hit and does something great, I will sit here in the background and take credit for it. And if they do not, I will step forward and explain to the boss how dumb they were. And literally you can get to be the chairman of some companies doing that, and when you get there you do not have any idea what to do.
Show me a guy all covered up with scars from being out there doing the job: he is the guy you want as chairman. And finally, recognize and award performance. If someone does something great, recognize them that day. Then they figure out the old guy at the top, or the person at the top, if it is a woman, knows what is going on down there on the firing lines. Listen to the people who do the work. You do not need staff. I never had any staff. I showed up here today by myself. It used to drive them crazy in the presidential campaign; I never had any security, and [that] just drove everybody crazy. Finally, a Secret Service man said, "Ross, why don't you have security?" I love the fact that he felt he could call me Ross. This was at one of the debates. I said, "It is simple: those other two guys are controversial, but everybody loves me." Of course, that is not the reason I did not have one.
Now back to business here. If you ever have a corporate politician, a person who wants to get ahead at the expense of other people, fire him personally. Standing rule in my company, I do not care where in the world they are, they won a free trip to Dallas, they get fired by me. That sends a message. You do not get ahead at the expense of other people; you get ahead by going out and driving the nails and delivering the goods. Anybody who lies, steals, cheats, or takes advantage of others in the company got a free trip to Dallas to see me, and they were personally terminated by me. Talk is cheap. You say, "We are going to all be straight, we are going to all work as a team, we are going to throw out all the buzz words." And then [if you] do not practice it, you have a cynical work force. If you ever say it you better live it.
It is so important to have fun while you are working. Let us assume you are on a project that takes seven days a week, 18 hours a day; they may be tired, but they ought to be grinning. If they are not grinning, you have a problem. And my favorite thing to do around the big car factories was to follow the executives, the plant manager. I have been in some plants where the workers would not look up. I have been in other plants where they look up at the manager and look down. I have been in others where they would look up and nod, and they would look up and say, "Mr. Jones." Then I have been in plants where they look up and grin and say, "Hey, Charlie, how are you?" Those were the best plants always. They had a leader.
Ask yourself when you are on this subject. If you have people working for you, are you wiser to have them enjoy their work or hate their work? Simple answer. Do you think your people will be more effective if you treat them as a human being, as an equal, or if you treat them as a commodity, "I am the boss, you are dirt. Dirt, do this." You think they will be more effective if you really care about them? Every single person in your company, if they have a significant problem in their family, you should make sure that that family member gets the same attention that one of your family members would get; then they would know you care. Do not ever have to say you care, just do it.
Would I be smarter to have you working for me or working with me? The answer is obvious. Should I listen to your ideas or should I ignore them? And if you come in with an idea, say, "Hey, get back down there on the line, I am a busy man, I am the boss, why are you bothering me?" The answer is obvious, particularly when you realize that all of those are the ideas that made the company successful.
Make sure your customers understand and agree on the terms. My contracts typically ran for 10 years, and we never went back to the contract again. That is my test of a good contract and good customer relations. You ought not to ever have to go back and go through the pages of that. You have to have A-plus performers at every level, and you cannot get those just through personnel. You have to have recruiters. We went out to college campuses across the country with a recruiting team, looking for needles in a haystack with a red dot. And I used to lecture those recruiters; I said, "Bring me people with a history of success since childhood. Bring me people who love to win. Bring me people who love to compete and love to finish first." And all of our guys were sort of halfway wise guys. One of them raised his hand, "Ross, what if we run out of people who love to finish first and love to win?' I said, "Just bring me people who hate to lose at that point, but I would rather have people who love to win.
Now we found them in odd places. We did not even go to the elite schools; we went to schools like this school, because we found the best students at these schools were just as good as the best students at the elite schools, but there was a big difference. You expect to go to work; the students at the big schools expect to be somebody's administrative assistant and never get their fingers dirty. If you do not get your fingernails dirty you do not know what is going on. Basic difference right there.
You say, "My company may be growing so fast that I am running out of people." Then you just stop your sales, and if you cannot deliver, do not sell anything, and you will be far wiser than outgrowing your ability to deliver. You say, "Ross what is the best thing you ever found to recognize the right people?" We tried tests, we tried bungee jumping, we tried everything in the world in terms of evaluating people. Somebody had a pyramid idea, we would have a fit over it. But there is only one thing: I could bring in a young person and if he or she could convince five of my great engineers that they were going to do a good job, that is the filter. The team interview is the only thing that ever worked for us and it worked great. And we learned a long time ago not to just hire computer science people, not to hire mathematicians, not to stay inside the box. We had an incredible success rate with people who were music majors, and it is obvious why. They learned to deal with abstract symbols typically when they were six years old, and on and on and on. So interesting people come from all kinds of odd places. We did not have a standard that you had to be a college graduate to be an engineer. We would find geniuses who did not have an opportunity to go to college. The Don Efflands of the world, we would put them under the program and they would soar like eagles. As you build your company— now particularly if you are in a high tech company, you can go out to Silicon Valley, all these geniuses out there do everything right, come up with something which would change the world, but they forgot to keep books.
To the smartest people here today, if you are going to build a business keep books. Otherwise one day you say, "Oops, I am out of money." You were so buried back there on your integrated circuit, what it was you forgot [is that] money is the fuel that feeds this thing. You have to keep books, keep tight control over cash, avoid debt. Our company never went into debt, and all we ever had was $1,000 Margo gave us.
We bootstrapped it, and that thing turned into a cash machine once we got the pump going. Do not try to go too fast. Be surefooted. You have to reorganize. Nobody ever told me that, but as you get bigger and bigger what used to work does not work, so you do have to reorganize.
Let us talk about competition. Everybody says, "Oh, I hate competition." You have to love competition, the more brutal the better, the bigger the better. Your competitor is like a hammer beating on a piece of steel, and if your company is that piece of steel, the harder they beat on it, the stronger you get. So just get up there and say, "Oh, boy, let us go get them today."
As you do this, keep your priorities straight. Put your families first. We never missed a children's event as we were building the company. Margo was there, I was there. Years ago I was asked, "Ross, when will you first feel successful?" My children were small, and I said, "I will not feel successful until my children are grown, and unless they are wonderful young people with a deep concern for other people and a willingness to do something about it, I will not feel successful." The good news is they are all grown, and thanks to Margo they are all too good to be true, and at this point I take a great deal of pleasure of living in their shadows. I have a son who is Big Ross, I am Old Ross, and I can assure you there is no better place to live than in your children's shadows. And I can talk for an hour.
If you go public, before you ever go public, make sure you have fairly distributed that stock to the people who built that company so far. And do not start with a few guys at the top; just make sure that everybody has got his share right. Do not go public unless you can keep growing, otherwise you have played a trick on the stockholders. Once you go public cast your faith with your stockholders. I said publicly the day we went public, "I will never raise my salary again." I was making $65,000 a year. When I sold the company to General Motors, I was making $65,000 a year. That kept my head straight. I had to focus on the growth and profitability of the company, and I would urge you to do the same thing. As your company grows, continue to live on the front lines; eat, live, and fight alongside the troops who work with the customer. That means you need what they call in Harvard Business School a flat organization. In plain talk, do not get a lot of fat between you and the folks that work with the customer. You have got to know what is going on. Do not just have someone telling you what is going on: know what is going on.
I never had any briefers, I never had any administrative assistants, and my theory was this: anybody that I would want as an administrative assistant would not want to be one; they would rather be out doing honest work somewhere. And I just got it straight from the people who were doing it. Do not have a big personal staff.
I will never forget old Sam Walton, one of the richest men in the world, who was standing out in the aisles of his store almost until he died, listening to his customers. I can tell you stories about Sam for a long time. I will tell you Sam is ten years older—was ten years older than I am. My son is in his mid-30s. Anytime we were together I was too old for Sam because Sam was forever young. He would go straight to my son Ross and say, "We are both pilots," and, you know, pretty soon they were refighting their wars or something with their hands, but I just love the fact that here is this very elderly man who had the spirit of a 35-year-old. He was too old to fly. Only his dog would fly with him. Sam could have bought a 747; he had a Cessna and he and his dog would go flying. That is a wonderful spirit to have. No matter how great your company is, always be restless, never be satisfied.
And I am going to close now with one story that sums everything I have said today. When our company had grown to substantial size, suddenly the biggest procurement in the history of the computer industry appeared, and we just had to go try, even though we were far too small to participate. When the dust cleared there were two finalists. The Bad News Bears, my company, and the New York Giants, IBM. Not even fair, right? IBM assigned 350 people and a five-acre computer center to this project; it was going to be a two-year war. We assigned 15 people and no computer center. Thirty days after we started our great president I told you about earlier, Mort Myerson, walked in the room where 15 people were working, and they said "You know we cannot win, but this will be a good experience." Now here is leadership, folks.
Mort did not chew them out, Mort did not say sissies. Mort walked up to the front of the room, said, "Fellows, you are missing the point." And he wrote down out of his head— and not many presidents of companies could do that—the seven criteria by which we would be judged in this competition. He says, "We are going to beat them seven to zero," and he walked out of the room.
That group was on fire. They organized themselves into seven two-man teams, one person in charge, and that is the day we won. Two years later I was with the team when the war was over and they had won. They had gotten their raises, they had gotten their bonuses, they had gotten their stock options, they had created thousands of new jobs in the company. We had a big party that night to celebrate. This is the day it happened. Now recognize and reward people while they are still sweating from the effort. General Motors said, "Ross, how could you get it through all your committees?" I said, "I did not have any committees; that is the way I got it through all the committees." We got in a room and figured out what to do and did it that day. That night we got together to celebrate. They will always remember the day they won, they will always remember the raises, the bonuses and the stock, but the only thing that will really matter when they are old and sitting on the porch and telling stories, is that they beat the biggest and best in the world seven-zero.
Guess what? Our competitor had a four-three philosophy. That is not fair, right? If you have a seven-zero philosophy, your competitors have a four-three? See, our people were intentionally competitive. Bring me people who love to win. Nobody was going to make it six-one, and the rest was history.
Finally, you get a lot of satisfaction. Thousands of people who work for you will be able to buy nice houses. Their children will be able to go to colleges. They will be terrific taxpayers. Now these are the things that should motivate you as a person to build a business. But the main thing to remember is you will have good days and bad days, and there will be days when it looks like it just ain't going to work. Just remember, the most successful people I have ever known were too dumb to recognize when they failed, and their big successes rest squarely on the earlier failures.
Now I hope that some of this will be of use to you in your careers, and we will spend the rest of the time talking about anything you would like to talk about. It is a privilege to be with you. Thank you.