Commencement 2013: Read The Keynote Speech by George R. Roberts ’66 P’93
Keynote speaker George R. Roberts’ words blended intimacy with candor as he compared his experiences as a CMC graduate in the 1960s with the changes that have taken place in the world over the past five decades.
“When I look at you all and try to imagine what your lives will be like 47 years from now, it’s hard to imagine,” he said. “What I can tell you is that the world is going to continue to globalize. It’s going to get ‘flatter,’ as the New York Times’ Thomas Friedman calls globalization. Technology is going to accelerate and there’s going to be more competition…. But there are opportunities out there for you [and] you all have the benefit of graduating from one of the best schools in the world. You are ready to compete with the rest, but you must be willing to embrace change and have an entrepreneurial spirit.”
Roberts exhorted the graduates to put their best effort into everything they do, whether it’s a big project or a small, simple one because, he said, “if you can’t do the simple jobs right, you’ll never be trusted with the harder ones.”
He drew a laugh from the crowd as he recalled his early days, working at Bear Stearns in Manhattan. He said he gave the impression of being extremely dedicated and industrious because he’d arrive very early every morning and always leave late in the evening. The reason? He said he wanted to avoid the unpleasant heat in the New York subways.
Those long days, however, were decisive in his own career: As a result, he became acquainted with another early riser at Bear Stearns, Jerry Kohlberg, and they struck up a friendship that led Kohlberg to join with Roberts and Roberts’ cousin Henry Kravis ’67 to create KKR.
“I don’t expect you to remember me or anything I’ve really said,” Roberts said later, near the end of his speech, “but I would ask you to remember words uttered by Winston Churchill. He said that we make a living by what we get, but we make a life by what we give.”
Thank you, Pam. And before I begin, thank you very much for the 14 years that you’ve put in in leading Claremont to where it is today. You’ve always had a vision, and most importantly you’ve had the moral courage to get things done. Thank you. And thank you trustees and Harry, for inviting me to speak to you today, the class of 2013. It’s indeed an honor.
When I was trying to get my remarks together about what I was going to say today, I spent a lot of time thinking about the four years that I spent at Claremont. And I remember quite well, trips I took to Los Angeles, Las Vegas, Santa Anita Racetracks, the weekly bridge and poker games that we had, all of which helped with my disposable income while I was at college. In other words, I had a good time. I remember the professors I had, Professors Kim and Eldridge, and Proctor Thompson, and men like Dr. Diamond and Doyle. And they helped me, and they led me to different ways of thinking and looking at problems, whether it be Keynesian economics, price theory, I still have nightmares about some of the formulas in price theory. And more importantly, with the liberal arts, I learned about Socrates and Plato and Aristotle, and took art and music classes at some of the sister colleges here. The education I received at Claremont, for me, has been priceless in my life in so many different ways. And I remember the time I was able to spend with my cousin, best friend and business partner Henry Kravis while we were here at Claremont together. We also had our share of fun together, and believe it or not, began to think about what life would be like if we ever started a business that we could run and do together. We weren’t sure what that was going to be, but it sounded like a neat idea at the time. Most importantly, I remember the day and place that I met Leanne Bovee, who I married a year after I graduated, and who was my wife for 35 years and mother of our three children.
Now, what I don’t remember is who gave my graduation speech 47 years ago, or what they said. But what I do remember is the pride I felt in graduating from here, the sense of achievement and accomplishment that I felt as well, and when I looked out at the audience, I saw my mother, and my father, and my grandfather, and sister, and aunt and uncle and of course Leanne, and the sense of pride that I felt that they had for me and what I’d been able to accomplish while I was here.
Now, 1966, 47 years ago, was quite different than the times that you’re graduating into. In 1966, a gallon of gasoline was 32 cents. A movie ticket was a dollar. The median price of a home was $23,000, a tenth of what it is today. An IBM mainframe computer cost $2 million. Today’s iPad is 2,000 times faster. We didn’t have Twitter, we didn’t have emails, we didn’t have texts, we didn’t have the Internet, we didn’t have Google. Our newest invention was a color television set. But we did have the Beatles, we did have the Beach Boys, and we did have the Rolling Stones. I guess we all still have the Rolling Stones. We worried about the Cold War. We worried about the Cuban Missile Crisis. I remember exactly where I was, on my way to a physical science class, when I learned that John Kennedy had been assassinated. The mid ’60s was a period of political and social turmoil. The first Civil Rights Act wasn’t passed until 1965. We worried about getting a job, when the US was 40 percent of the world GDP. Today it’s 20 percent. We worried about overpopulation in the world when the world had three billion people. Today, it has over seven billion people. And sitting in your seats in 1966, no one in my class would ever have believed that the Soviet Union would collapse 26 years later, and that a communist country like China would embrace market reforms to grow their economy and bring their people out of poverty. In fact, I wrote a paper in an international politics class basically arguing that that could never happen. I wish I’d have kept it.
Now, when I look at you all today, and I try to think about what’s your life going to be like 47 years from now, it’s impossible to really come to any real conclusions about that. But there are certain things that I can tell you for certain, because I see it in everything that I do every day, which is make investments, basically, around the world. The world is going to continue to globalize. In Thomas Friedman’s words, the world’s going to become a lot flatter than it is today. Technology will accelerate at a far greater motion than it ever, ever has done before. The world will become much more competitive. And one thing you can bet on, that as long as governments around the world, regardless of their forum, believe that in order to stay in power, they have to improve the economic life of the people that live in those countries, then they’re going to have to turn to market-based reforms to do it. And if they do, the world will have growth, and billions of people will be uplifted from poverty, and we will have consumptive economies develop around the world. Those are opportunities for all of you, growth as opportunities. But along the way, you’re going to have a lot more competition than I did. My job was to get a job and to compete really in America, when America was 40 percent of the world GNP. That’s not the case today. Whoever thought that China would be the second-largest economy in the world? I certainly didn’t. And who would’ve thought that a firm like KKR would be investing in Vietnam, in a food company run by a former North Vietnamese colonel in their army?
The world changes fast, and competition comes at you fast. And let me give you an example. David Lu is a colleague of mine. Now, David’s parents were well-educated, they were living in Beijing when the Cultural Revolution hit. When that happened, their whole life changed. They lost their job, they lost their savings, they lost everything that they had. David grew up in a 100 square foot room with his mother and his father and his grandparents. They had no kitchen. They cooked on a balcony outside. An uncle of David’s in Singapore said the way to get ahead is to go to America and become an exchange student. So at 15 years old, David left for America. He spoke no English, knew nothing about the customs here, had a one-way plane ticket, and he didn’t see his family for four years. Now, David was a quick learner, and when he was about to graduate, he applied to 20 colleges. He was rejected by 19. You see, David’s math scores were quite good, but he scored below 300 on his verbal SATs. Finally, his math teacher called someone he knew at Columbia and said, “You need to take this kid.” So David went to Columbia, and David graduated in the top three of his class in engineering at Columbia. And he went from that to Morgan Stanley where he basically worked in the IT department, and someone said, yeah, he’s a smart kid, he speaks Chinese, let’s send him back to China and get him into the investment business. And that’s where we met David seven years ago. Today, David is a major contributor to our firm, he’s a partner in our firm, and he’s responsible for the greater China investments that we make. Now, for David, this wasn’t about what school he was going to go to. This was about any school that would take him. For David, this wasn’t about what his career choices in life was, for David, this was about getting any job. And for David, this was about changing the trajectory of his life, his parents’ life, and the future generations of his to come. That’s what it was about.
There are over 300 million people just like that out there in the world, just like you, graduating from colleges around the world, that want that very same thing. Now, you all have had the benefit of graduating from one of the best college and universities in the world. I have a chance to meet many young people from the best schools around the world, and I will tell you that you can compete with the best of them. But in order to do that, you’ve got to embrace change. You’ve got to savor change. You’ve got to run after it. You cannot be afraid of change. Changes are opportunities, and you have to look at it that way. And you have to embrace an entrepreneurial spirit. The very college you’re graduating from today did that many years ago in its founding. The presidents after George Benson have done that just as well. Claremont as a school gets a lot from a little. They’re scrappy, just like you have to be. Now, the good news is, many of you have accomplished that while you’re here. I mean, just think about the time you entered as a freshman and where you are today. You’ve had to learn to plan your own schedules, what courses to take. You’ve had to work independently, and many of you have done independent study. And you’ve had to write a thesis. So you’ve been able to get a sense of freedom, and doing things on your own, and thinking creatively about what you need to do. You’ve had to do that.
You know, that very same feeling of creativity and freedom, I wanted to keep when I left Claremont. I was 21 years old when I got a job as an intern at Bear Sterns in New York. I grew up in Texas, and I didn’t spend much time in New York, so I was pretty unfamiliar with how hot and crowded the subways could be in New York in the summertime. I quickly learned that the way around that was to go to work earlier every day and go home later every day, so I began arriving at the office at 7:00 AM. And the only other person around was Jerry Kohlberg. And I guess he didn’t know that I was trying to avoid the rush of the subways. He must’ve thought I was a very industrious young person, and he began giving me things to do. And they were pretty simple at first, but I was able to do them. And the more I did, the more he gave me, and we struck up a friendship. Jerry became not only a good friend, but my mentor while I was at Bear Sterns. And then in 1976, Jerry Kohlberg, Henry Kravis and I left Bear Sterns to start KKR. Now, we wanted to do that for two simple reasons. One, we wanted to work for ourselves, and secondly, we thought we had a really good idea, which probably sounds pretty simple to you now, but believe me, 37 years ago it wasn’t so simple. And that idea was, we were going to use the capital markets to borrow a prudent amount of money, and we were going to buy companies, and we were going to give management ownership in those companies. Now, that seems pretty simple, and it’s done a lot today, but that wasn’t the case back then. And it certainly wasn’t apparent to my father, who thought I was crazy because I was giving up a good job and a good future to go off and do this crazy other thing. Now, we made our share of mistakes, we had our share of successes, and we’ve continued to build KKR today into a worldwide firm, where we can do business now in every country, on every continent, with the exception of Antarctica, in the world.
And I tell everybody that works in the firm, in every meeting that we have, we can never, ever give up the entrepreneurial culture that we have here. The world owes us nothing. We have to go to work every day, we have to be scrappy, we have to be creative, and we have to help people solve problems that we want to invest with. And I hope that never, ever changes.
Now, I’m often asked by younger people, you know, what are the keys to success? Frankly, I don’t know. But if I did, I wouldn’t tell you. And I wouldn’t tell you for one simple reason. Because that would rob you of the wonderful journey you’re about to take when you leave here. And that’s finding what, for you, is your own success. But I will talk about three things that at least helped me in my life, and I hope in some small way, it helps you as well.
Number one, whatever you do, go all in. Show up early. Always be prepared. If you can’t do the easy things, people won’t trust you with the hard things. Be prepared to challenge and question others and what’s going on. Speak up. Every meeting we have at KKR to discuss an idea, I always ask the youngest person in the group what they think, mainly ’cause they’re probably a lot smarter than the rest of us anyway, but I want to know what others think, and I want people to speak up and give me their views, and be able to dissent. You all need to be those kind of people as well. Never sit there and rest on your laurels. You know, Will Rogers had a wonderful quote, which was, “Even if you’re on the right track, and you’re just sitting there, you’re going to get run over.” And try to anticipate where things are going. To use a hockey analogy, you know, skate to where you think the puck is going to be, not to where it is or where it’s been. Always be looking out in the future about where are things going to go, and what can I do to improve them? Work in teams. Become a team leader. I’ve got a quote on my desk that Ronald Reagan often used, and it basically says, “There’s no limit to what can be achieved if you don’t care who gets the credit.”
Secondly, take risks and be prepared to make some mistakes. Now, many of you, to this point in your life, have followed a certain path. Go to high school, do well, go to college, do well, graduate, move on and get a job. Your path has been pretty clear to you, but once you leave here, that’s not always going to be the case. Because when things are obvious, everybody else has figured it out. What you need to do is figure out what’s not so obvious, and then take a risk about going about your business to do it. You will learn far more from your mistakes than you ever, ever will from your successes. And you will make those. Now, Winston Churchill defined success as going from failure to failure without the loss of enthusiasm. I think that defines my life pretty succinctly. And when you fail, which you will, we’re bound to, we’re not always going to be right. Regardless of what you do, fail honorably, truthfully. Never, ever, ever lose your integrity. The world will give you many chances if you stay within your basic fundamental of what makes you the person you are. And remember, your ability might get you to the top, but it’s character that’s going to keep you there.
Thirdly, build relationships. There’s nothing more important in your life, and especially as you get older, as the relationships that you build, relationship with your mate, relationship with your parents, your brothers and your sisters, your grandparents, your aunts and uncles, your cousins, your closest friends, your associates, your business associates, and the people you, you know, don’t always see all the time. Work on those relationships and build them. Relationships are built on like and trust. Work on those. Write thank you notes to people that have done something kind for you. You all remember what thank you notes are, right? The things your parents wanted you to write when you were younger? Not Twitter, or tweet, or texts, or emails, just thank you, on a piece of paper and send it to someone that’s done something nice for you. This will go a long, long way for you as well. One of the things, many things that I admire most about your generation, that quite frankly, mine did not think the same way, and that is the community service, and the way you give back. I know many of you have done community service in high school, and many of you are doing this in college. A lot of you are going to work for Teach For America and doing other things outside of getting busy with your business career. My generation was not so charitable, quite frankly, as yours. I admire you for this. Keep doing this. It will take you many, many places and give you a lot of pleasure. Be kind to other people, whether it’s a waiter having a bad day, an unruly kid on an airplane, help the mother out a little bit. And when we hire someone at KKR to work, either in the firm or in a senior position at one of the investments we have, we have the taxicab/waiter test. And that is, we go out, take them out to dinner, and we see how the person acts to the taxicab driver, a waiter, the busboys. People that he or she will never see again in their life, people that can do nothing for them. Are they kind? Are they respectful? Little things add up to the big things, and you can tell a lot about individuals by the way they treat people that they will never see again in their life.
Now, since I left here, I’ve been truly blessed. Despite the circumstances, there hasn’t been a day I didn’t want to go to work, or an evening I didn’t want to go home. And I wish that for all of you as well. Now, about 20 minutes ago, I said I didn’t remember who my commencement speaker was, and I don’t expect you to remember me 47 years from now, when by the way, I hope one of you is giving the commencement speech to the class of 2060. And I don’t expect you to remember anything I really said. But I would ask you to remember these words, uttered by Winston Churchill, who after a lifetime of leadership, courage, both in saving his own country and helping saving the world. He basically said, “We make a living by what we get, we make a life by what we give.” So go from here with the full understanding, appreciation, you have the tools to build your own success. Give graciously and greatly to others less fortunate to you. It will come back to you tenfold. My heartfelt congratulations to you and your family. For you, the best is yet to be. Thank you.