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[APPLAUSE] ELIZABETH GARRETT: Good afternoon. I'm Beth Garrett, the president of Cornell, and it is my pleasure to welcome everyone to Cornell University's premier event for the exchange of ideas between the academic and corporate communities, and to welcome Mark Weinberger, Global Chair and CEO of Ernst & Young, as Cornell's 33rd Robert S. Hatfield Fellow in Economic Education.
As many of you know, designation as the Hatfield Fellow is the highest honor that Cornell bestows upon outstanding individuals from the corporate sector. The Robert S. Hatfield Fund for Economic Education, established in 1980 by the Continental Group Foundation to honor its retiring chair, the late Bob Hatfield, who was part of our class of 1937, supports the enhancement of teaching of economics at Cornell University in addition to enabling us to interact with great business leaders like Mark Weinberger.
Mark Weinberger's already helped us fulfill the first charge in this great fund by helping us to dedicate the Ernst & Young Room in the third floor of Warren Hall. The hall's an important meeting place for those undergraduates in the Dyson School of Applied Economics and Management. He's also spent time with key faculty members and selected undergraduates from across the university who are interested in the broad field of economics.
The Office of the President at Cornell administers the Hatfield Program, and it is the tradition for the university president to introduce the Hatfield Fellow. It is a special privilege and honor for me today, not only because of the distinction of our 33rd Hatfield Fellow, but also because Mark Weinberger and I are very close friends.
We first met in Washington, DC about 25 years ago when we were each working on tax and budget issues for two US senators-- I for David Boren of Oklahoma, and Mark for Senator John Danforth from Missouri. Our bosses believed that all major legislation should be bipartisan and that Congress worked best when people from both parties and with diverse perspectives worked together productively and sought reasonable compromise.
Thus, we often worked together on tax legislation, both legislation that passed Congress and some that is still pending, such as business tax reform. But I'm sure it'll happen soon. And I've had the pleasure to watch Mark's career in government and the private sector, but even more importantly, I've had the pleasure of being part of his amazing family, led by his tireless wife and my dear friend Nancy, and populated by four energetic, intelligent, and kind children.
I'm honored to be the Aunt Beth of the Weinberger family, and we're very fortunate to have here tonight not only Nancy, Mark's wife, but also our close friend and fellow former Hill compatriot Nick Giordano, who was Max Baucus' tax counsel at the same time Mark and I worked there, and Nick's wife Lynn. Nick is now one of the top tax lobbyists in Washington, DC, working for EY's Washington counsel. So if Nancy, Lynn, and Nick would stand up and let us recognize you?
[APPLAUSE]
Many corporate leaders have moved into government careers, others have moved from public life into the corporate world, but few have moved back and forth between those two worlds as seamlessly as Mark Weinberger throughout his career. Mark came to Washington, DC for his first "real" job in 1987, which happened also to be Ernst & Young, and over the course of a stellar career, established himself as a gifted leader both inside and outside the organization.
His first job at EY gave him a deeper understanding of the tax law as it applied to business. That position led to tax counsel for Senator Boren-- I mean, Senator Danforth, I was to Senator Boren. After that, Mark was tapped to service Chief of Staff for President Bill Clinton's Bipartisan Commission on Entitlement and Tax Reform, which Senator Danforth had a key role in establishing. Also in the Clinton administration, Mark served on the US Social Security Administration Advisory Board, which advises the president and Congress on all aspects of social security.
Upon leaving government service, Mark co-founded a small lobbying and regulatory affairs forum, Washington Council, which he grew into one of the largest firms of its kind in the DC area. Mark and his colleagues eventually sold the firm to Ernst & Young and signed on again with EY to lead its national tax practice.
He returned to government service in 2001, this time as President George W. Bush's Assistant Secretary of Treasury for Tax Policy, where among his challenges in the year of the September 11 terrorist attacks were a big tax bill, the economic downturn, and recovery reacts.
Back at EY after this period, he assumed his current position as Global Chair and CEO in 2013, giving him responsibility for one of the world's largest professional services firms, with some 190,000 employees, including many Cornellians, in more than 150 countries. At Mark's initiative, EY has developed a new strategic plan, Vision 2020, which emphasizes the values of leadership, entrepreneurship, diversity, and inclusion in building a better working world.
You can see why Mark is a perfect speaker for Cornell. We share the same values. Mark exemplifies those values at EY and in leadership positions in professional organizations, including the World Economic Forum and Catalyst, which seeks to expand board opportunities for women. A few years ago, he received the Achievement Award from the Anti-Defamation League, and last February, he was honored by the Tax Council Policy Institute for his accomplishments in business and tax policy.
He's also a member of the board of trustees for two of his alma maters, Emory University, where he earned his undergraduate degree, and Case Western Reserve University, from which he holds both an MBA and a JD. He also has a Master's of Law in taxation from Georgetown.
Abraham Lincoln once said, "Whatever you are, be a good one." Well, Mark Weinberger is one of the best ones. He's widely recognized as a leading authority on tax and regulatory policy, with tremendous expertise in tax policy and an intimate knowledge of how the government works, as well as the international perspective and commitment to diversity and inclusion that his far-ranging leadership responsibilities require.
With his presence here, Mark Weinberger brings a new level of distinction to the Hatfield Fellows Program. Please join me in welcoming our 33rd Hatfield Fellow, Mark Weinberger.
[APPLAUSE]
All right, do a good job.
MARK WEINBERGER: Thanks.
Well, with an introduction like that, I can't wait to hear what I have to say. That's really incredible. I want to thank you very much. I want to thank you all.
I am incredibly honored to be here and to be giving this lecture. It kind of reminds me actually of-- I don't often quote my mom, but I'm going to quote my mom here. When I was first elected chairman and CEO of Ernst & Young, my mom that lives in Scranton, Pennsylvania, the paper called her up and said, what do you think? Your son was just elected chairman and CEO of Ernst & Young.
And she said, and I quote, "No one is more surprised than me," end of quote. I asked my mom to stay away from the press.
It is especially great to be here with President Garrett, and I love saying that. That is so amazing. I am so proud of everything that President Garrett has accomplished thus far in her career. I am proud she's the first female president of this great institution. I am proud she has chosen to focus her immense talents on working with professors and administrators here at Cornell to shape our future leaders and innovators around the world. What could be more important than that?
But I am most proud, and I'll get to this at the end of my speech, what my father told me you live by, which is never forget who you are, where you came. And Beth, you've never done that, and I admire that immensely.
Today what I'm going to talk about in my 25 or so minutes before we open it up for Q&A is about how to lead in this global economy because right now, the economy we're dealing with is remarkable. We have geopolitical uncertainties, we have technological revolutions, we have business model disruption, and we have increased global connectivity like we've never seen.
At the same time, we're seeing social media transcend and change communities like we've never seen. Think Facebook or Twitter-- they now transcend the world and are bigger than individual countries-- big, big changes. All of this is going to have a profound effect on the world economy, on society, on business models, and on employment landscape over the coming years, so there's some important questions that we're going to have to ask ourselves.
What skills will we need to lead tomorrow's businesses and communities, and how do we chart our careers today for the students to become tomorrow's leaders? I'm going to hit those in a moment, but first I wanted to describe for you how I see the global economy.
I want to go back 37 days. On August 11, China out of the blue decided to devalue its currency. Almost immediately, this set off a chain of events around the world. Asian currencies hit their lowest levels in decades. Markets that rely on raw materials around the world froze up. Emerging markets went into a tailspin, and here in the United States, we had a 1,000-point or so drop in the marketplace.
All of this happened in 24 hours. The same day, oil prices dropped to their lowest price in a year, deepening the divide in competitiveness between those that produce oil and those that consume oil. For even the best global leaders and the best government leaders around the world, this is not easy to deal with.
I was in Davos over year ago at the World Economic Forum, and it's a group of people who are supposed to really have their arms around what's going on in the world. It's politicians, it's government leaders, business leaders, academics, NGOs, and they come together and they talk about the challenges over the next 12 months.
When we sat there a year and a half ago, all of us in two days talked about things, none of us predicted that Russia was going to invade the Ukraine and we'd be followed with sanctions that would disrupt all of our businesses. Nobody predicted that oil would drop from $100 a barrel to $40 a barrel almost overnight. Nobody predicted that the US dollar would rise so much just in January of this past year that it exceeded the fluctuations in 2008, the heart of the financial crisis.
This is a volatile environment that we face today, but these are short-term shocks. There's even bigger, more fundamental changes going on around the world. To start, globalization-- it is changing the makeup of our client base. It is shifting economic power from north to south and from west to east.
Across the world, vast majorities of the GDP growth is going to be coming from emerging markets. Already, the number of Fortune 500 companies in these regions has more than tripled in the last decade. Think about this-- 90% of the people alive on Earth today who are under 30 years old live in emerging markets, 90%.
How is this going to affect our global supply chains, our future workforce? Changing markets driven by new taste, new preferences, new demands, different types of opportunities.
At the same time, we're facing unprecedented demographic shifts-- a world that's more urban, middle class, and much older. China's middle class is now larger than the entire American population, and by 2025, it's predicted there'll be 220 cities in China that'll have more than a million people. Now for perspective, in all of Europe, there's only 35. That means a shift in consumer power for every business on Earth, along with massive opportunities and challenges.
What about infrastructure? How do you build it? What about energy, commodities, environmental issues? Big, big issues to deal with, and as we get older, it's putting strains on health care, on our social security and service systems.
In 2010, there were 810 million people over the age of 65. By 2050, there'll be two billion. It will be the first time in history there'll be more old people on the Earth than children. Stay off the roads.
[LAUGHTER]
This is going to attack government policy, all the safety nets we have, tax policy that funds these initiatives, and consumer behavior. Against all of this, we're seeing major shifts, as well, in the world becoming more interconnected.
In the developing world, technology means that the entire populations of new parts of the world have access to the global economy. 700 million people in Africa have cell phone subscriptions. In the next five years, 80% of adult-- and Lowell loves this-- he's very happy that they're going to have cellphones. They're going to have worldwide smartphones, and they're using these smartphones for banking, for purchasing, for interacting with global businesses.
I think about Middle East. We see what's going on, how terrible it is right now. Is this really different than it was, or is there now real-time opportunities for us to see what's always been going on over there? We can see around the world much more real-time than we ever have been able to before.
Think about many of you who are in the business world when in Japan in 2011, when the tsunami hit. Do you all remember when we had the horrible earthquake and tsunami? We looked at it, it was a humanitarian nightmare. But we looked and said, my gosh, I feel sorry for those people over there, never recognizing it may affect us.
We woke up the next morning and businesses around the world realized the cars that they're producing in the United States, the TVs that are going in Europe have component pieces that are made in Japan, and all of a sudden their supply chains didn't operate and they couldn't produce goods-- huge effect on the markets overnight. We are very, very interconnected.
Think of 3D printers is another example I love to think about the disruption. Before long, you'll be able to print an iPhone case in your home with a 3D printer. When I was at a CEO event recently, and Lowell was there, we met these innovators and they now make body parts on 3D printers. Now, that's science fiction turned fact, but that's what's happening.
The possibilities are endless. It's hard to know. I don't know all these implications and what the developments will be. There will be ripple effects. What happens to the shipping industry, to the trucking industry when you no longer have to transport goods because they're produced on printers? What happens to manufacturers? What happens to firms like mine?
You may have heard about Watson, the IBM computer. Is there going to be a time when computers will be able to distill advice and give advice, as well as professional service firms? Probably some day.
These are some of the most countless developments that are happening to businesses around the world in the years to come. They're coming faster, and they're unpredictable. They are creating huge potential for major opportunities for all of us.
So I'm going to pivot to what do we need to do with this backdrop in this world to be leaders? It's more important than ever to understand these issues and adapt to them. So what does it take to be a global business leader today?
I think there are four things. One, lead for tomorrow, not just for today. Two, lead with the power of purpose. Three, communicate, communicate, communicate to all stakeholders. And four, build a diverse team for a diverse world, and I'm going to hit those quickly one at a time.
An example, though, going back one more time-- in 1955, Fortune magazine released the first ever Fortune 500 list. It included the world's most powerful companies-- Armstrong Rubber, Arvin Industries, Pacific Vegetable Oil. You all heard of them, right?
Don't feel bad if you don't, they don't exist anymore. 60 years after the Fortune 500 was first released, there's only 57 left-- just over 10%. In fact, the average lifespan of a publicly traded company today in the S&P 500 is just 15 years. What does that tell us? That your performance this quarter, which we focus on so much, does not guarantee that you're going to be around for the long term, if you don't understand those big megatrends that I'm talking about.
So the first key to leadership is to lead for tomorrow and not just for today. Anticipate these megatrends and be prepared for them. President Bill Clinton used to call this "searching for the difference between the headlines and the trend lines." Others have said "separating the signal that can get lost in the noise."
Example would be emerging markets. If you open the paper today or if you looked at your business operations around the world today and you look at the emerging markets, they are volatile, they're risky, they're political upheaval, there's very low returns, currencies are going wrong directions, terrible investment. Stay away from them.
If you made that decision for the short term, you wouldn't be around for the long term for all the reasons I talked about. That is where the future middle class and emerging market opportunities are going to be. You have to separate the noise from the signal.
But even when we can see these long-term issues, it's not so easy for business leaders to think long term. Why is that? The pressure has grown more and more intense to do things this time, now, this quarter. Information is instant, and people judge us instantly.
On top of this is analysts who look at us every quarter and determine whether we're doing good or bad. Moving capital markets that are thinking about where to allocate their capital, business model disruption, activist shareholders, which we've heard about, which are pushing for real returns now through dividends and share buybacks, and maybe at the expense of other things.
Now, to be clear, none of these things by themselves are bad, but they are forcing us to think more short term and influencing business judgment, and it represents in some ways a dangerous dynamic. Why? Because to maximize the short-term return, you want to inflate your revenues and reduce your costs, but what if there were research costs? What if there were development opportunities or education for employees?
I recently had a great opportunity, I interviewed Howard Schultz, CEO of Starbucks, at an entrepreneur program we had in Monaco. And many of you may not know this, but Starbucks pays more for health care for its employees than it does for coffee beans, and Starbucks provides education for every one of their employees at Starbucks.
So on stage, I asked, I said, Howard, what do you mean? You provide education for all your employees, college education? Most of your employees are baristas. You're training them to leave you?
And he said, yeah, I am. He said, I get criticized all the time for having such high health care costs and I can increase my RAs if I reduce them, but I do better when I have healthier people. And if I have educated people, when they leave us, they're going to go get a job and they're going to be able to afford the high-priced coffee that we sell.
[LAUGHTER]
Now, that's long-term thinking, I will grant him, but that is exactly how he's thinking. If we think about it, EY is the same thing. During the downturn, we had two choices. We spent $535 million a year to develop our people, 200,000-some people around the world. It's lot of money, a lot of money to onboard people.
We could have, and many people said, stop hiring, slow down, cut back. However, as we all know, if we did that, now that we're coming out of the economy, we would have had unprepared employees, we would have had holes in our service offerings, we would've been a very difficult place. So we didn't do that, and so now we're very well-positioned for the future.
But they aren't always easy, as I said. Leadership requires courage to think long term when you're being pressured for short term. While you're leading for the long term, it's incredibly important to be able to take people along with you, and that's why my second lead with the power of purpose is so important. It's crucial.
When you lead with the power of purpose, it gives you a North Star. Now, I'll tell you this, especially important to the millennials out there. We hire a lot. So we have 200,000-some people. We hired 55,000 full-time employees last year and 15,000 interns, and our median age at EY is 28 years old. Most, 65% of our people are Generation Y and almost all the people we hire are millennials, and they absolutely want to do good as well as doing well.
They want to know, if I'm going to work this hard, towards what purpose? The smart ones can work in a lot of different places and they know that, so we focus a lot at EY on our purpose, and it's been transformational. Our purpose, as a result-- Beth talked about it-- building a better working world. That means a lot of things to lots of different people, and we bring it down to the very basics to each of our individuals.
We aren't just a bunch of accounts, a bunch of M&A specialists, a bunch of tax experts, a bunch of strategy people. We are digital pioneers helping to fight data privacy. We are guiding governments through cash flow crises. We're unlocking medical treatments with data analytics. We're helping entrepreneurs bring their ideas to life.
If our people don't think about it like that, they're not going to be excited to work those long hours. It cannot be about what you do, it's got to be about the value you add to the world.
As we've been explicit about our purpose, we've seen dramatic, positive results. In Universum, which is an independent organization, looks at business students from around the world, for the last three years in a row, we're on the top three most preferred employers. And I'm very happy to say at Cornell, we're number one, so I thank Cornell students for that. I attribute it to people understanding our purpose and really being excited about things.
And it's not just EY, lots of other people do this. We did a study with Harvard Business on business leaders, and they believe-- and all these, 87% of the people who responded said that if you have a purpose beyond profit, that you will be more successful.
DuPont's purpose? Make people live better, safer, and healthier. Unilever's? Make sustainable living commonplace. I think you're going to hear more and more about the power of purpose in businesses around the world.
Third key to leadership-- communicate, communicate, communicate to all your stakeholders. You cannot just have a purpose within the organization. A shared purpose will help all of your stakeholders.
If you want to succeed today, you can no longer just talk to your shareholders. You can't talk to your business owners. You need to convince everybody of your strategy, your operations, and how you want to get there.
It's no longer an imperial CEO with an idea that says, do it, and somehow everything gets done. It's about building a global team. It is different today. The expanse is all around the world, gaining their trust and support, and bringing all your stakeholders along.
Mark Benioff, who's the CEO of salesforce.com, put it really well. He said, "The reason my company is so successful is because I am focused on my stakeholders, not my shareholders. To really think and be successful as a CEO today, you need to think at a multi-stakeholder framework."
What he's recognizing is that the shareholder return is not necessarily as important as how happy your employees are. It's about the commitment and sustainability you have in your communities. It's about the role you play in the world, and I really admire that.
If you want your stakeholders to come along with you, you really have to explain to them what you're doing. You have to listen as well as talk, and we know trust in government and business is strained today. There's not a lot of trust out there at all. But when you build that trust, and Steve Covey wrote a book on this. It's called Speed of Trust. When you build that trust, it is amazing how you can accelerate your strategy, and you get the benefit of the doubt and people buy into what you're doing, so don't underestimate trust in everything we do.
So the last key is to build a diverse team for a diverse world. Your most important stakeholders I believe are your employees, especially for us. We're a professional service firm. We don't bring technology forward by itself. We don't manufacture things. Our value is our ideas, our people, our energy, and our ability to consult with our clients.
When you're looking at this world, if you don't have the right people around the table asking the right questions, you will get the wrong answers, there's no doubt. Think of this-- when voice recognition software was created, it was a huge success until they realized the software had one enormous flaw-- it couldn't register women's voices or people with accents. And why do you think that was? Because it was created by all-Western males sitting around a table.
Now, if that was a more diverse group, do you they would've had a different answer? Same story with airbags. They were a huge breakthrough, an automotive safety bonanza. There's just one problem-- when they were created, the first model didn't work for children or women. The male design team modeled them after their own body type, which was too large for the general population.
Simple mistakes resulted in huge problems. The product had to go back to the drawing board, could've been avoided if there was a diverse perspective on the team. And especially in today's business world, you're going to have to be diverse.
Think of this-- in 2005, just 10 years ago, if you looked at the 500 biggest companies in the world, there were 57 headquartered in emerging markets. Fast forward to today, just 10 years later, there's 157 of the largest companies in the world, companies you never heard of five years ago, in emerging markets. 10 years from now, maybe over half the companies, the biggest ones in the world, could be from other parts of the world we never heard of.
If you want to serve them, work with them, understand them, you better have people that come from them, as well, and so it's incredibly important to have that diversity. Diversity is no longer nice and just moral, it is a business imperative. Study after study of global companies will show you that businesses with greater diversity enjoy tremendous advantages-- higher employment retention, better teamwork, stronger growth and earnings.
But the hard part is it's not simple. You can't just send a memo out and say, be diverse. You can't put quotas in and say, fill them. You have to develop a culture of diversity, not an initiative, and it takes time and energy and effort because there's a lot of unconscious bias out there. So you have to build that culture day in and day out, and you have to have leadership, but you have to do it on your account teams every day.
I'm going to slip to my last section here and just talk about for those of you who are not global CEOs and don't think about all these issues, I hope you find them fascinating and interesting, but I also want to address you because you're probably wondering, well, I'm not a CEO, but what skills-- I want to be a CEO, or I want to be a government leader. I want to be somebody else someday who has this opportunity. What skills do I need?
Three quick suggestions-- first is if you're a student today, you need to realize you're already a CEO. You're a CEO of your own life, and you need to take responsibility and control for it. When you walk out of here, you're going to have more opportunities than you could possibly imagine.
Some of you might have an idea where you want to go, and that's fine, but keep searching and refining the plan. This school, Cornell in particular, has prepared you to do more than you can possibly imagine. Your degree enables you, it doesn't define you.
I think about me-- I'm running a big accounting firm today. I'm not an accountant. I started my own law firm. I never practiced law before. I worked in the government. I never had an advanced degree in political science. If I said I could only do what my degree says, I wouldn't have done any of these things.
What you get from a university like this is the ability to learn how you learn, how to have integrity, how to team, things that are life skills that are incredibly important well beyond what you learn in your classrooms, in our summation of your grades or your courses. And you have to think about it that way because the jobs you're looking for today won't be here 10 years from now. There'll be different ones, and you have to be equipped for that.
So remember, the world will-- it's good at this-- it will find your limitations, but only you could find those opportunities. More than any previous generation, I think there are tremendous opportunities out there. But again, you need to take responsibility for it.
Second, when you focus on the seat at the conference table, do not substitute your seat at the dinner table. Balance is absolutely key to sustainable success. Eventually you're going to have families and lives that matters a lot more than your job does, and that's a good thing, and you're going to have to make some hard choices.
But I promise, you will be able to achieve balance. It's up to you. Again, you have to be the CEO. No matter how fast you're moving, though, you have to take stock of that.
In my own life, I have it all the time. You've got to learn to live with guilt, that's reality. Whatever you're doing, you're not doing something somewhere else. There's many times I had to, and my wife is sitting here and she knows, make many compromises.
I had to leave a big speech I was giving in China to all of our brand new partners to come home and take my daughter to her first driving test because I committed to do that for her. I missed a World Economic Forum meeting because I wanted to go with her to school, her first day in college with my wife, and bring her there.
At the time, they seemed like really tough decisions, but if you really think about it, they weren't hard at all because over the long term, what's more important-- your resume or your obituary? And I want to make sure--
[LAUGHTER]
That my obituary and my daughter doesn't say anything bad about me.
[LAUGHTER]
And the last bit of advice is my favorite because it's from my dad, and I mentioned about this starting out. My father said to me-- he's my best friend and he was my best man at my wedding, and he said, Mark, it's really important to never forget where you are or where you came from.
Every time I got a new job, and I think Beth went through almost all of them, I'd call my father and I'd say, dad, this is great because here's my new thing. And he's like, that's unbelievable, son. He said, it's unbelievable, but he said, remember, I'd love you no matter what your title is, and those were the best nine words I ever had because it gave me the confidence to fail, confidence to recognize that I need to do the right thing and good things would happen. If they didn't happen, it's OK.
So the last advice is don't ever forget who you are, where you came from. Don't forget the people who helped you get there. You could change the world without it changing you. It could happen, and lots of people do that.
So to conclude, if trends hold, the vast majority of today's most iconic companies and the global Fortune 500 won't be around when I finish my career or you finish your careers in the future. I don't know.
Who will be around? Who will be the leaders? I don't know, but I bet they'll be business leaders that see the long term and have the courage to lead that way, men and women who lead with the power of purpose, who'll be able to communicate with all their stakeholders, and they'll have diverse teams in a diverse world to give them advice. And above all, they'll be the ones who recognize that they have the ability to do all this, change the world, without changing who they are.
The next generation has great challenges and great opportunities, and after meeting so many of the young people as I go around the world, including those today here at Cornell, I am confident our future is in great hands. Thank you very much.
[APPLAUSE]
ELIZABETH GARRETT: That was great. Thank you, Mark, that was terrific. It's inspiring and gives us great hope for the future, and we're now going to have question and answers. We've got some microphones, so if you have a question, please come up to the microphone to ask Mark, and I will begin.
You've mentioned what sort of attributes students should be creating in themselves, which was great. As you know, we also want to help form the leaders of tomorrow and we want to help our students know how to deal in such an ever-changing and unexpected world, have that resilience.
We are so fortunate to have EY as a partner in that. This year, you've hired 92 of our students, and you say you're still going, so we like that. We like to hear that. What should we do as an institution of higher education to help train our students and help prepare them for the world that you just described?
MARK WEINBERGER: Well, other than having you as the next president, which is the most important thing, I met with a lot of your faculty today, and how impressive. And I met with a bunch of your students, and incredibly impressive.
We're hiring this year alone, 92 so far-- we're going to be over 100, I hope, of your students here. We have nearly 350 already. We have some 45, close to 50 leaders-- partners, principals, directors. So whatever you're doing, it's working. Keep it up.
In our discussions, I would say there are two things. One is we have to work together to make sure the skills that you're asking your students to learn are conducive to where the world is going, and we could see that. And so the dialogue that we've had working with your faculty is really, really-- got to keep that going.
But what I told your students today is almost what I said here, is that you could study really hard on your technical skills, and that's great, but remember, those courses might change and the things you need might change pretty quickly. Learn how you learn, learn how to team.
What I told them was you might be great, you may have the highest grades, you might be the most technical, smart person in the world. But you go and serve a client or you go work on a big issue in a telecommunications summit, you don't do it alone. You either operate well as a team, you are able to empower other people, get them excited, motivate them, work with them, or you're not.
That's what we're going to need more and more going forward, so I think multi-disciplinary learning across your colleges, understand your sector and your business as well as your functional expertise. And dialogue and do interns with us and the other employers is really going to be the key.
ELIZABETH GARRETT: I see a student.
SPEAKER 1: Thank you. I greatly enjoyed the talk and I think your advice is very sage and prudent.
MARK WEINBERGER: Thank you.
SPEAKER 1: I'm just curious, though, earlier on you mentioned the speed and the incredible interconnectedness of the world representing China and their devaluation about a month ago. I'm curious how you see being able to continue to communicate, continue to almost ensure that you have the diversity, you're able to lead and be confident through the volatility and through the split-second decision-making that's inevitable in a world that's only going to continue getting faster?
MARK WEINBERGER: Now you scared me. That's a great question. I wish I had a great answer. It sounds trite almost, but it's about team. If I tried to do all that myself, I'd be a failure, right?
So the key to me is to have the best leaders in China, the best leaders in your line of business, best leaders in our advisory business who really understand what's going on-- pulling them together, making sure they work together, sharing information, and then you're going to be more nimble. You've really got to be nimble. You've got to be able to react quickly, as you're suggesting, but you've also got-- really important-- if you react to every [INAUDIBLE] jiggle, if you go in one direction than another, if you react to the markets here, your people will be confused.
So you need a long-term plan. You got to explain it, you got to get them bought into it, you got to get them motivated. And then as you make changes, as things go on, you have to-- to your point-- communicate, communicate, communicate.
So when I was talking to some of the students this afternoon that were saying, how often do you go out and talk with your people around the world? My wife knows this-- four or five days a week, I'm on a plane going out and meeting with our people or our clients or our regulators. There's no substitute to going out and having those communications and really being on message and explaining things.
So that's really key. When I say we talk about leadership skills, we talk about how smart people have to be, you got to have a vision, you've got to build a team. Frankly, one of the most important skills I think for leaders of tomorrow is being able to communicate and motivate and persuade people about your vision.
Again, all stakeholders-- your employees, your investors, your lenders, and your communities are increasingly attacking the institution of business. Explain to them why are we not evil. Why are we helping communities? So that level of communication is huge, but no one person can do it alone. You've got to build the right team to do it.
ELIZABETH GARRETT: While we're waiting-- yes, come up to the microphone. They know if they don't ask questions, I'll just continue to ask a question.
SPEAKER 2: Actually, can I be cheeky and ask two questions? You've not mentioned any language skills for your employees, or do we now have Google Translate, so does it mean anything? And secondly, as CEO, do you have any people that disagree with you and tell you so?
MARK WEINBERGER: No one will disagree me ever.
[LAUGHTER]
And I barely speak English, so what's my language? If any of you watched the debate last night, you got a good discussion on language skills. Did any of you see that? There's leadership.
[LAUGHTER]
Great question. So we're 212,000 people now. We have 15,000 people in China, they've got to know Chinese. We have 14,000 people in India, certainly they know a lot of different dialects of the language there.
In a global organization, frankly you have to understand different languages. Frankly, it is a real plus still to this day, English is the universal business language around the world. And so if you're working in some of those countries and you're working on big global accounts, the big Verizon, which is a huge organization, and you're serving them, you better be able to translate across all those dialects to get the work done.
So we do have translation software and the like, but most everyone will be able to communicate ultimately in English. But increasingly, we're building talent hubs around the world, so we used to have-- we have 14,000 people, as I said, in India. That's not a call center, they're component pieces of our supply chain of delivering products.
Like manufacturing was thought about years ago, like I talked about, your supply chains. You put pieces all over, you compile them somewhere, and you then have an end product. Services were never done that way, now they are.
So we have to have people who can plug in things all over the world. We have one in India, we have one in Philippines, we have one in China, we have one in Poland, and they have to have different language skills to be able to do it. I think it's a very plus if you can talk about different languages.
Do people disagree with me? Yeah, way too much. But I will tell you, I wouldn't have it any other way. I'm looking out at Nick. We've worked together forever, not that Nick disagrees with me, but if you didn't have people that can disagree with you, then why have them?
If I want people to agree with me on everything, then I don't need anybody else. You talk about the examples that I gave you about not having a diverse team. If you have an environment where people cannot bring them whole selves to work and really contribute regardless of their sexual preference, how they look, what size they are, then you don't have a workforce that's going to work for you.
So you have to have people who are willing to disagree with you, but you have to create that environment. Certainly if I yelled at them every time they did, they wouldn't, so you've got to create that. And it's not the speediest way to get an answer, but it's the best way to get the right answer.
ELIZABETH GARRETT: If I could just to underscore-- and come up to the microphone, feel free to kind of do that-- not only language skills, I would imagine, Mark, but cultural skills as you think about because it's negotiating different cultures, empathizing with different perspectives.
So if students who've traveled globally, I would imagine, would be people that you'd be interested in talking to you?
MARK WEINBERGER: Yeah, actually one of your professors, and I had this conversation on the walk over here. You look at, walk around Cornell, it's an incredibly diverse school. 20 years ago, you didn't have schools that were as diverse across the United States, so it's getting better to get that diversity in the institutions.
Mobility-- we're having more and more mobility assignments. And more and more universities like Cornell are having global programs where people go for a semester, even, overseas. Just a little bit of cultural difference and understanding of it-- people think differently, act differently, but they're not really that different. That's huge.
ELIZABETH GARRETT: So we'll start with you and then we'll move across. Go ahead.
MANFRED LINDAU: Hi. I'm Manfred Lindau from Applied Engineering & Physics. You mentioned the impact of kind of local events, like Ukraine or so on, the global economy, and I think one nervously anticipated event is the referendum in Britain about the possible Brexit. Do you have any comments on the risks or potential opportunities associated with that?
MARK WEINBERGER: Yeah, sure. So what's being referred to, you might recall lately in the news, there was an issue of whether Greece would be kicked out of the European Union because it wasn't able to pay its debts. That was market turmoil, uncertainty what would that do to the union.
Then one of the next big issues is the UK passing a referendum or talking about a referendum that they would voluntarily move out of the EU because they're tired of dealing with all these regulations and rules that are in the EU, and the populist movement within the UK is saying, we don't want to be part of it any more. So huge issue.
It would be really bad for business if that were to happen. Bringing the world closer together, not more further apart is good for trade, good for business. Obviously, they're a sovereignty, they're going to decide on their own. You almost had Ireland come outside of the UK, and they didn't pass that.
I am hopeful, and maybe I'm being optimistic but I'm hopeful that that will get its day in court, everyone will breathe a bit all right, I said I'll pound their chests. They said it all, and then they'll go back and realize they're better off staying in the EU and connected with it. So that's what I'm hearing from our people on the ground in the UK, that this will probably get a lot of attention.
But there's this thing called the UKIP Party. These are the people who want to separate. It's getting more votes, kind of like the Tea Party is here, the anti-establishment, kind of like the National Front Party in France, which is anti-immigration and building a wall around France, and kind of like the Spain government, who's talked about trying to end immigration there.
This nationalism, which is really talking-- and after eight years of frustration, where people are suffering and they're trying to protect their own countries and their own borders and their own industries, is not good for the global economy, but that's the environment we're in because everyone's struggling with this slow growth and they're trying to create the opportunity.
This, in my view, would retard growth, and so I would hope that, and I'm expecting that that will not happen. There will be a referendum, of course. There has to be, but I'm hopeful it won't pass.
SPEAKER 3: Just to start off, I want to say thank you for coming to Cornell. I was really inspired by your talk and I really enjoyed it. So my question--
MARK WEINBERGER: You can stop there if you want.
[LAUGHTER]
SPEAKER 3: My question is basically what's your favorite part about running a company as large and as global as EY?
MARK WEINBERGER: I'm not sure I have a favorite part. It's a great question. I would say-- I'll be honest, when I think about our purpose, building a better working world, and I go around the world and I see this sign in India and I go to Dalian and I see it in China and I see it here and people share stories with me, you either get really excited about creating this community of 210,000 people and families that really feel like they're making a difference, or you don't be a CEO because we get a lot of headaches, a lot of bad things that go on, a lot of lawsuits, a lot of complaints, and you've got to just feel passionate about your people and what you're doing.
The thing I shared with your students earlier-- there's one story, I'll be quick, but I work with some of the largest companies in the world and it's great, but I had a meeting in Palm Springs for the entrepreneurs a year ago, last year. And this young woman came up to me-- she wasn't that young.
A woman came up to me and she said to me, are you Mark Weinberger? And you learn pretty quickly, you just don't say yes immediately to some of these questions. So I was like, well, why?
And she said, and finally I thought it was OK, so I said, yes, I am. And she started hysterically crying. And I'm like, oh my gosh, what'd we do? And she stops, she goes, you need to know two years ago I was going through incredibly personal problems, real crisis in my life, and I had this small business. And I knew it was a good business model, I knew we had a good idea.
And EY made me an Entrepreneur of the Year winner-- not globally, not in the Americas, in this packed Northwest it was, and it was in the consumer product. It was a toy company. It wasn't going to save the world.
She goes, you made me an Entrepreneur of the Year winner, and as a result of that brand, I got a loan. Then you invited me to a meeting where I met other people who mentored me and I built a network. And fast forward to tonight, when I'm sitting in front of you, I have 200 employees and families who rely on me.
And she goes, if EY didn't have the confidence in me, I wouldn't have made it. Well, you hear a story like that, it gets you going for the next many months. And it's not a huge revenue raiser, but it really makes you feel like you're making a difference, and so that's what I'm passionate about. I really am, and if you don't have that, it's really hard to be a CEO.
ELIZABETH GARRETT: That's great, and our final question.
SPEAKER 4: Thanks so much for coming. So there's a big, big mistrust between Wall Street and Main Street, so how do companies, Fortune 500 companies, your biggest clients, how do you gain back the trust of Main Street? And there's a lot of income disparity, as well. You have City of Detroit going bankrupt. Then you have executive compensation at record levels, so is it mutually exclusive, a company's success and giving back to society, or can be done together?
MARK WEINBERGER: It's a really fair question, and it's not good, as I said, if trust is an accelerator, lack of trust does what? Grounds you to a halt. Lack of trust between Democrats and Republicans, lack of trust between Main Street and Wall Street, lack of trust between the Chinese and the Americans and the Russians.
That's not a recipe for success so we've got to find a way to build back the trust. Part of what I mentioned in my speech I think is key, and I will-- it's this balance between the pressures of short-term financing and meeting your objectives and recognizing businesses do employ lots and lots of people, pay lots of taxes. Yeah, they want to minimize it so the return can go back out to the individuals who can then buy products and goods.
They do help communities in measurable ways. We spent over $60 million this past year alone in charitable contributions. We have 150,000 people doing different work. A lot of good stuff goes on, and it gets lost in the Wall Street talk about all these things.
What we need to do a better job of, as I said, is communicate, communicate, communicate to all of our stakeholders about how we're on the same side and about sustainable long-term growth, and talk to our employees and our communities as much as our shareholders. Now, I could say that easily. Lowell has a harder time because he's got to go up in front of the analysts every quarter and explain why he's spending so much money on these things. Howard Schultz has to explain that.
More and more people do that and succeed, we'll be better off, so it takes courage to lead. And I think you're starting to see a term where leaders are really tired of being attacked by activists and other people and saying, no, you've got to think more short term. So I'm hopeful, we got to work together with business, with government, but you've got to keep talking. You got to keep talking. I cross country, too-- really, really important to communicate.
ELIZABETH GARRETT: So I think you see why Mark Weinberger is the perfect Hatfield Fellow. Please join me in thanking him again.
[APPLAUSE]
So Mark, we want you to remember us forever, and I know you will, but we also have some keepsake to take home. It's a beautiful glass.
MARK WEINBERGER: Oh, wow.
ELIZABETH GARRETT: Remembrance of this. It says your name, that you're the Robert Hatfield Fellow, Cornell University September 17, 2015, and it has our tower on it.
MARK WEINBERGER: Thank you, dear.
[APPLAUSE]
ELIZABETH GARRETT: So thank you all, and I hope to see you at many of the events this weekend. Thank you.
Mark Weinberger, global chairman and CEO of EY (formerly Ernst & Young), delivered the 33rd Robert S. Hatfield Fellow in Economic Education Lecture on Thursday, Sept. 17 in Alice Statler Auditorium.
Weinberger offered his perspective on the global economy and what current trends mean for business leaders and young professionals. He also will share insights on how to build an organization nimble enough to navigate short-term volatility while achieving long-term success, how to infuse purpose into overall strategy and daily operations, and what skills are required for all people entering the workforce today. The lecture was followed by a question-and-answer session moderated by Cornell President Elizabeth Garrett.
The Robert S. Hatfield Fellowship in Economic Education is one of the highest honors Cornell bestows on individuals from the corporate sector and serves as a platform for exchange of ideas between the academic and corporate communities.
