Richard Fuld | May 12, 2006


Chancellor DiStefano – thank you for your warm introduction.  To all of you here – Chancellor DiStefano, graduates, members of the board of regents, members of the faculty and staff, parents and distinguished guests – it is an honor for me to be here today at this school, in this stadium and on this special day.  It is also a thrill because I was a 1969 February graduate and never had my own graduation ceremony.

My college experience was a great period in my life. I met terrific people.  I got a broad arts and sciences education that opened my eyes to the world.  I had lots of fun at this school. But let’s be clear, although it was a great period for me, it was also a tough growing up period.

I started out as a freshman in 1964 and wanted to be a test pilot. Aeronautical Engineering seemed right, except I couldn’t do graphics. I was one of those kids with no spatial relationship capabilities.  I joined the air force ROTC program, which also felt right until I went against my commanding officer, stuck up for another underclassman and was politely asked to leave the program.  All of that didn’t work, and then I stumbled into international business which got me going on a life-long career with Lehman Brothers.

My college years were during the late 1960’s.  At that time, there were a lot of challenges.  Nixon was in office; we put a man on the moon; there were riots in Europe; the U.S. was in the middle of the Vietnam War; there was Students for a Democratic Society and college unrest.  It was a dangerous time in our country.

Today, it is still a dangerous world, but today there are many more of what I call wildcards: terrorism; bird flu; global dependency on oil; heightened geopolitical risk; China as the new global powerhouse; and global shifts of both capital and liquidity effecting both businesses and governments.  There are also domestic questions: the economy — rates and inflation; deficits –both budget and trade; and legislative gridlock.

I could go on. But with challenges come opportunities.

Today is a real milestone and tomorrow a new beginning for each of you.  Of the 5,000 in this graduating class, you all will go in very different directions for your jobs and careers, in your families, in your pursuits and interests.

So let me share some of what I learned along the way – actually, some of it the hard way – that might have helped me at the start and will hopefully help some of you in whatever you choose to do.

First and most important is that you must have a positive attitude.  This will help you not fall apart during and after your first inevitable failure and will ensure that you make the most of each opportunity.  Whatever you do, have a “lean forward” mindset.  Don’t be afraid to compete.  Don’t be afraid to make a decision. And whatever you do, don’t be a bystander.  Whatever it is – try.  If you lose, pick yourself up, try again and move on.

When a reporter asked Thomas Edison “how did it feel to fail 10,000 times”, Edison replied “I didn’t fail 10,000 times. The light bulb was an invention with 10,000 steps.”

Whatever you do believe in yourself and don’t give up.

Second is find a place where you can and want to create value, and whatever you do, know your field. Alexander Graham Bell said: “Before anything else, preparation is the key to success.” All of you have heard that knowledge is power.  My longer version is: “Information is knowledge. Knowledge is confidence. And confidence is power.” I would add that many times that you have to be lucky, but luck, when combined with preparation, only increases your chances for success.

That means: read, network, anticipate, connect the dots, try to limit surprises, be curious and do your homework. You thought that after completing school, studying and homework were over. It’s never over.

Third, teamwork is critical for many endeavors. It is not just about you. To quote Andrew Carnegie: “Teamwork is the ability to work together toward a common vision.  It is the fuel that allows the common people to attain uncommon results.”

Each organization has its own culture.  Successful organizations rely not on stars but on a team and how the team comes together. So, support your family and colleagues.  They are your team.

I learned the importance of that early on. I don’t know if anyone has read Greed & Glory on Wall Street: The Fall of the House of Lehman, but it was a book about how our firm was forced to sell because of a lack of teamwork. I take that back: we didn’t sell.  We lost the Firm. We lost because the bankers and traders could not come together and act as partners.  It was at a time when I was head of capital markets, so I can’t say it was the other guys and wasn’t my fault. I was in it. I was just as guilty.

The result was: we lost the Firm. This taught me an important lesson, and when it was my turn to run the Firm, the first thing I did was build a culture of teamwork – what I called One Firm, one P&L.  Today, there are no silos, no turf – only shared goals.  We are a team, and we are all in it together.

My formula is very simple.

#1    Hire great people who will work together.
#2    Give those people all the tools and training they need to be successful.
#3    Hold them accountable.
#4    With good solid work, pay fairly and pay them in stock, so everyone shares in the upside together.
#5    Expect them to think, act and behave like owners because owners protect the culture.

For me, the culture was all about teamwork.

When you know what you are talking about, others will follow you, because it’s safe to follow you.  Leaders earn the right to lead. They earn that right because they have worked hard to get that credibility.  I often speak about hiring the best people.  I believe that leaders must always surround themselves with the best people.  Leaders can’t be afraid that when others look good, they look bad. When leaders want an “A” job done, “B” people are not good enough.  Leaders set the pace for themselves and others.  By their example, they teach others.  That’s what teamwork is all about.

The fourth is integrity.  The good guys do, in fact, win.

You grew up in an environment with Worldcom, Tyco and Enron. The world today is desperate for people with integrity. Integrity and quality people carry the day.  The key is to always fall back on what’s right.  When in doubt, do the right thing.  This always pays off in the end.

These four things – have a positive attitude, take the time to know what you are doing, understand the value of teamwork, and believe in and do what’s right – these four helped me along the way, and again, I hope they will help you in some way also.

As I said, graduating from this great school is a wonderful milestone. Again, it’s a new beginning. It’s a beginning full of opportunity.  You now have the tools to navigate what’s ahead. Have fun with those tools, and be comfortable with yourself.  You have earned that right.

So before I leave you today, let me again express my congratulations and wish each and every one of you the very best for the future. Starting tomorrow, this is your journey.  And, if there is one thing I wish for you on this trip – it’s that you have no regrets.