 Hi everybody. So Ricardo and I are friends from Peter Drucker and I keep learning from him. I noticed in the mirror on a light note to start and hopefully most of this is serious but light that I had a butterfly. My wife gave me this tie last week and she always picks out my ties and I thought about my goodness that's part of the image of this whole conference transformation. So if what you think I say today sucks that's a Harvard term. I hope you'll give me some style points but before too quickly I just noticed 20 years ago when I first oh god I was longer than that it was the mid-80s I moved to New York City any time I would be asked to give a speech I had this fancy mark cross leather binder that I would put my speech in and I had before you hear a folder with duct tape on the bottom so things don't fall out when it's in my backpack so I guess there are things that matter to us about impressing others change as we go through life. I've got some slides I want to share with you as I as I go through this. I also let me make a comment about I was scanning earlier this morning when Jim Mcnerning was talking about the fabulous career particularly the last part Boeing I was going through different people's kind of bios who were speaking here and I went through and I said self-interest I said I wonder what they have about me I wonder what my public relations guys put together and I've got to admit to you I'm impressed I'm grateful for the good things that have happened but there were admission admissions in my bio and these admissions I've got to say I've got to share with you because when I look back over my life it was really it's been my failures my flops my face plants that have really really shaped me as a leader and made me stronger as I moved forward and you know the longer I was a CEO the more I found out that's the truth for most of us except we generally hide that stuff and that's generally stuff that really makes us I I say on that as I get into this today what I want to talk about about transformation I think the most important transformation people do is with themselves from the person they are to the person they could become and you know because we had I was leading Ted talks recommend you go on Carol Dweck wrote a great book and it's a might be a 11 minute Ted talk and it's on mindset and it has to do a lot with transformation and this journey we go through in our life I don't think there is a better time to talk about transformation because it's been two months since the business round table we made a decision in the West to change this incredible primacy of shareholder value which has been going on for years by the way I told the guys back there I'll forget about my slide so it's okay to come on and say Rick turn the slide okay to change from shareholder value to really stakeholder value I've been arguing with public company boards I served on for years on this subject and why I think it's so important is because 50 years ago the average share of stock was held for eight years now it's held for six months even Jeff Vinnick the guy who built Magellan this morning announced he's given up after eight months his new fund he said you know put some calls I can't handle it any anymore and Jeff's still a young guy stakeholder value I must say and I will take responsibility in parts for this a number of us Fortune CEO executives in 2016 we preempted this business round table meeting and we had a great host Pope Francis and I'm not even Catholic I'm Buddhist so we convened it in Rome and we met for three days talking about the real responsibility of companies going forward so what we decided is there's a new model that's coming forward and the words you start to hear coming out of other places as this whole conscious capitalism now within the concept of transformation I want to talk a little bit about that Gary Hamel who's a really bright guy about 15 years ago he wrote an article about transformation and in it he really talked about that there was one school of thought that basically said who needs the dumb old incumbents when you have all these cool startups well the truth be known most of the jobs are with these boring incumbents Apple has a hundred and twenty thousand jobs and is the most valuable company the most valuable company 50 years ago had eight hundred thousand jobs Walmart has more than two million but you can't support a family on what they pay with that and it's interesting more than 90% of the startups are really experiments and most don't make it some do now I don't want to get the point here that I'm not saying that they're not important the new startups but allowing big incumbents to become disposable I think is lacking and thinking about the collateral damage of what happens to not only stakeholders but societies let me show you some pictures this is what blight looks like this is November 2018 I had a driver take us for an hour through sections of Detroit I could not believe I couldn't believe the beauty of the initial design of many of those homes and where they were this is really heart-wrenching here before they left they wrote all I ever wanted was a white picket fence this is America's Chernobyl and it wasn't a question there in Detroit that Motor City and America fell out of love with each other it's Detroit's stop making cars that America wanted they fail to transform now the list goes on I can go through lots of other companies where you know one of the most recent Kodak 1913 I mean that was the blue chip company thought of as I was growing up in the Midwest they built an industrial campus I mean they even called it Kodak Heights it was the star section of Syracuse actually to people have said well wait a minute they got usurped by digital they were co- creators of digital and yet they kept their focus on film they failed to shift this is what it looks like today inside oh there's still now a you know rebirth of a Kodak you know with one you know 20th of the employees they had back then and there's really a niche player how about this one I grew up before you know you'd go to school in the fall going through the Sears catalog my mom gave me a budget we figured this out Sears you want to talk about they shifted but they did the wrong shift remember when they shifted to the softer side of Sears Cheryl Teague's ask a millennial today who Cheryl Teague's is for a company like that to go bankrupt when you owned craftsmen when you own Kenmore I mean I can keep when you own diehard now it's easy now Monday morning to look back and say well why the hell didn't they buy Home Depot or start their own they had entrenched powerful positions so you've got to not only transform and shift but in the right direction and so what I want to do it would be helpful if I looked at my notes from time to time but what what this really gets onto I have two points I want to share with you and put for it just do this is the first one every successful business model works until it doesn't now I think it's interesting this is toward the end of the day and you have a CEO and you had the beginning with the CEO Boeing was the headline Jim did a great job Boeing was the headline on the Wall Street Journal today did you see it earnings down 50% when I turned over the helm at Tupperware we were $70 a share we were 16 yesterday what am I saying there transformation is not a one-and-done thing the naval warship I served on before I was a navigator before you walked out on the bridge there was a bake like plate sign and it said eternal vigilance the price of liberty but it's the same with the gird of transformation as well it's never ever done and the second point that I want to share with you is all any organization is at its core and simply it's a collection of people quickly my transformation or Odyssey went to school was in the Navy Navy was the most important time in my life because and people who see the car I drive every day it says big bumper stickers is Navy because it's the first time I was ever given a leadership position as a platoon leader and I found out hmm there are a lot of things I wasn't good at but this was growing at me and I loved it because I loved the stewardship of helping and working together with other people and investing in them so I get out of school Navy and I start a company did I think I was a star in my 20s it was called Dynamics I got news commentator Paul Harvey to be gave him 10% of the company and we were going to become the company that got people out of burning homes alive we created a device that really most people die in fires died between 10 at night and six in the morning and I went out there built it across the country recruited firemen college students they were a badge that said fire safety crusade it was wonderful and then the federal government mandated detectors in the home and Sears started selling what we were selling for one-fifth the price I didn't see that coming and boy it was difficult but ever you know tenacious I started a new company was always interested in staying fit trying to stay young as long as you could created fortunate life centers opened it after months of research in a December wonderful headquarters clients rushed in late December January February actually I decided way white go slow franchise this thing within six months two hundred we opened and that's when I found out about a year later weight loss is a first quarter business the typical use of a product like a Nordic track kind of product by April of each year it's to hang clothes on in the spare bedroom we closed 80% of those life centers it was shameful I left town most people didn't know it but I knew it kind of like a failure I was living in Charlottesville Virginia had the dean of the law school and business school on my board and people then said well would you do then I joined Avon I came to New York City 9 West 57th Street two blocks away from here and people asked me well why join Avon I said let's see I remember I needed a job now they wanted me because I had started two companies I was a general manager an entrepreneur and they were so functionally focused people spent their whole careers in these very narrow channels and they didn't generally see the whole thing it was an incredible time for me and for Avon every time I'm up here and see that red nine I remember how important that also was to my life firstly I had a senior strategy position into beginning learning their business and then within a year they made me an officer move me to Europe although I'm an Austrian heritage I could only say good and Todd back then their biggest business over there was Germany and what a wonderful time it was for me within a year we went from double-digit down to double-digit up and it was an important time living and working in Munich more than 100,000 women in that organization and then they moved me to Hong Kong they were running it out of 9 West 57th Street and they said let's run Asia Pacific out of Asia and so I built the management team and we went over there and I became a group president it was just wonderful lobbied for China for favored nation status for WTO membership those relationships have stayed today with senior officials in China and then I was pulled back to New York and that was also a wonderful time in 92 I was recruited to Tupperware and boy have you ever made a decision in your life that you didn't look really deep enough and then you look back when you got more information and then you said to yourself what the hell was I thinking week one had to do a hundred million dollar write-off found out the headquarters building was for sale the last thing that the guy who designed the Kennedy Center Edward Durrell Stone made the Country Music Association wanted to make it a old folks home this is the guy that did the Kennedy Center so I had to make some serious decisions started off by looking at what have I got to work with here what's our sources of competitive advantage became real clear to me the first one women we had 600,000 incredible women in many different countries to we had a brand name that people love they were out of touch with it but they really loved it third we had a selling system that in fact we could demonstrate high-tech products and it so I said how do we build off this so we really started to get to work with that I went out there and all over the world we started opening countries we started teaching personal development at those and the whole concept that each of us are two people the person we are today the person we could become and I will tell you when we did the Global Fairness Initiative did studies of Mexico in our business and Indonesia they found out startling results after three years she went from thinking I'm not good enough to I am good enough and a third thinking gosh I'm a leader to from lower class to middle class third she became connected to other women and fourth in a world where one out of three women is abused he went from disrespect to mostly working for her she started running things that was our great power we started to go it was contact competition recognition we moved away from food storage to high-tech products were today you could grill a mistake in a microwave and one of our devices that converts microwave energy into thermal energy it was a fabulous fabulous time those 25 years of running that company and I was pleased and proud of all the accolades that Richard commented on I've got to say though at the very core of it it was this it was people that's why I just loved this I didn't see it before what you guys Rick Ricardo what you guys have put together here you get it at the core of any organization it's people all any organization is a collection of people and I would say this is where many are starting to understand that times have changed used to be autocratic work this is like the video you just saw okay then it went to rules based now it's human this is the top behavior that I see leaders want today of their people notice none of this is what you would have called in former times at business school hard stuff it's soft stuff that's really the hard stuff we started deciding in any company I served on the board of there is one major objective in a company to create an operating landscape where people can become the best versions of themselves interesting this is what you want empowerment engagement excitement you want to unleash this in an organization interesting I'm gonna share you four ideas here Rosa both Rosa Beth Moss Cantor years ago she was head of HBR and I read an article in the 80s and it's interesting two or three years ago I saw a Davos and I said Rosa Beth I really want to comment that that was career changing for me and she said did I write that I said I'm gonna quit giving you credit for it but I still do and she talked about the kind of operating environments that you need to create and she said number one they had to be fast and let me tell you what I found at Tupperware we're bleeding when I first went there and I said I need this and this and this we need this information and then people would come to me and they said well wait a minute you want it fast or do you want it right I said let's see I wanted fast and right and that became a slogan for my 25 years all over the headquarters fast and right Marines used to say once you had 85% of the information lock and load lock and load and go forward fast focused I had a guy who worked for me God he was so smart but their scarce resources and I used to say Mike have you noticed that for 20 years you've always worked for me and I've changed his name to protect him and I've never worked for you and I said Mike do you know why that is and he said no why and I said because you're smarter than I am he's what and I said Mike we'd go into a country in crisis and you'd see 10 things I generally would only see three but they generally were often the three that mattered scarce resources focus required flexible God that's what we've always talked about you've got to sit there and design it and it won't be perfect you've got to launch it you've got to refine it and then you re launch it out there flexibility and I got to tell you one of the most important is this one fun fun is what causes people to become renewed and it leads me to another thing there's a look I've named a Tony Schwartz you don't know Tony but Tony used to write for the New York Times and Tony really wrote a book called art of the deal that Trump put his name on it was Tony's book and then after that he created a thing called the energy project and I've worked with Tony some on this and here's how he would talk about it and that's why fun matters on this he said we have different zones notice somewhere negative positive and then up and down high and low energy there's what you want performance zone but you can't do that all the time because the energy we are not as the video said we are not machines so you need a renewal zone because if you don't go to the renewal zone you go up into the Pacific Northwest quarter of this which is called survival and then if you keep running on high energy negativity you face burnout in an organization that's where this operating landscape really comes together so that's why I look at CEOs really what they ought to be chief culture officers working with another group of people all of these people it's a we so that what you get is units of leadership when Eisenhower would talk about who won the second world war you know what he used to talk about the corpus and sergeants it was the units of leadership and he said my job is to make sure we have a direction a strategy and make sure they have the resources so it is about people and I think the bright line people have got this right we've worked also at at this whole Peter Drucker who really was the dean of the idea of management but I think the real guru on the subject of humans and human potentiality is Charles Hanley and he wrote a beautiful thing that I'll close with he said things and resources should be managed people can only be encouraged inspired and led and he said you and I are not human resources thank you for your time