Old Values in a New Era

Address by Billy O. Wireman,
President of Queens College, Charlotte, North Carolina.
Delivered at the twentieth anniversary dinner of Norelli & Company at the Charlotte City Club, May 2, 2001

I want to congratulate Ron, his colleagues, and his family on a marvelous event that happened 20 years ago: the establishment of a small business. Small businesses are the source of most jobs in this country. It isn't generally known, but big corporations, as important as they are, are not the major providers of jobs. Businesses like Norelli, led by passionate people like Ron, are at the heart of our economy, and I can tell you that this consulting firm, which I am very familiar with as a member of its board, is first rate.

In the spirit of this occasion, I would like to look at why some institutions succeed and prosper and renew themselves, and others do not. The mission statement for Norelli & Company reads as follows: "Guiding clients toward a better future." Now, as a professor, you will understand if I want to unbundle that statement and pinpoint some characteristics that I think are extremely important in discussing why some companies succeed, and others do not.

Let me begin by asking three questions. The first is this: Are we "thinking in time"? In other words, are we really aware of the events happening in the world today that affect our businesses, our families, our colleges, our lives, and our country? When you guide people, as Norelli & Company does, you hope they possess some understanding of their own about world events. Yogi Berra was once asked, "What time is it?" And he answered, "You mean now?" On another occasion, Yogi was holding a press conference after he'd had a really bad day: The Yankees had just gotten slaughtered. The reporters were unrelenting in their questioning. "Mr. Berra, do you know this? Mr. Berra, do you know that?" And Yogi would reply, "No, sir, I don't." Finally a reporter said to Yogi, "Do you know anything?" And Yogi responded, "Sir, I don't even suspect anything." So, Yogi obviously wasn't in touch with very much that day.

Those who are "thinking in time" are aware that we are living through one of those transitional moments in human history, a period of major conceptual changes in weaponry, war, speed, time, distance, and human values. There is not one dimension of our lives that isn't being affected and influenced by these changes. Nothing is business as usual.

We know that the two driving forces in the 20th century, communism and colonialism, are expiring. When the Berlin Conference was held in 1885, the European powers drew straight lines on Africa and Asia, irrespective of tribal influences and language, and proceeded to divide up a large part of the world that way. That era of colonialism is over now. When Macao reverted to Chinese sovereignty on December 29, 1999, for the first time in 500 years, every inch of Asian soil was under Asian control.

We know that communism as a force has expired. Ninety percent of the people in the world today are living under some form of market economics. Since 1978, the Chinese leadership has been moving China's economy from a sluggish, Soviet-style, centrally planned economy to a more market-oriented system. As a result, the market in China, and indeed throughout the world, is replacing the government as the guarantor of human progress. This growth in market-oriented economic systems is happening more and more around the world. Additionally, 60 to 65 percent of the world's people live under some form of democracy, and the movement is growing.

In his book The Lexus and the Olive Tree, author Thomas Friedman contends that globalization is the most important phenomenon in the world today. He says it is like the tide coming in from the ocean. It cannot be turned back, and we had better learn to live with it. Friedman also contends that if you want to play ball in the global market, you and your company must understand two key realities: 1) You must understand what he calls the "electronic herd." These are the financial analysts who, as investors, are interested only in getting a return on their investment. These investors are going to seek out only those corporations and countries that have a high probability of making a good return. If your company doesn't show that characteristic, it probably is not going to receive the capital it needs. 2) Friedman also contends that companies and countries now must wear what he calls the "golden straightjacket," one size fits all. He means that in order to be successful, institutions must have certain predetermined characteristics such as transparency, openness, competence, and a product that touches an important part of the market. If you don't have these characteristics, you don't get the money. Investors go elsewhere.

Another question I want to ask in examining why some companies succeed and others do not, is this: What is so new about the new economy? Not very long ago some highly respected economists and investment professionals were saying that the old economy and its inevitable business cycles were dead. The rules of economics have changed, they told us, and new dot-com companies are the wave of the future.

There is no question we do have an improved way of communicating and calculating and thus increasing productivity. But, we had better be careful about making grandiose predictions about the new economy replacing the old. I suspect that shareholders are going to take a good hard look at Cisco for recently writing off $2.5 billion in inventory that had become obsolete. And I suspect that Microsoft stockholders who saw their stock decline 40+ percent from its high more than a year ago may not believe in the dot-coms and the new technology quite as much as they did before.

Is this to say that the new economy is not important? Of course not. But, information technology is simply a resource that supports sound judgment, good products, timely decisions, and human ingenuity: All the things that make an entrepreneur successful. Information technology does not replace those essential ingredients.

Yes, I would be very careful about making sweeping generalizations about the future. Only yesterday it seems the forests throughout the world were disappearing. We were destroying them at record rates. People predicted that in 20 years there would be no more forests, and my goodness, what a miserable place the world would be. Truth of the matter is there are more forestlands and more trees in the world today than there have ever been in history, and they are expanding significantly throughout the world. Who remembers when the Great Lakes were so polluted we would never be able to use them again? And how about when the Cold War was over and Japan had won? Our automobile industry was on the skids; steel was in trouble; soft authoritarianism was the "in" thing so work with the producer and the stockholder and don't worry about the customer.

Fast forward to the present and you see that Japan has been in stagnation for 10 years. I follow that situation closely, and you can't show me one single thing they've done to deal with the issue of $500 billion in bad bank loans. Again, be careful about making these sweeping generalizations about what is going to happen. Life is a living organism, a moving stream. Every day is an opportunity to make it better, to renew, to prune what is not going well. Remember Harvey Cox's book The Secular City? He said God is dead, and we are racing toward international secularization. "Religion is as dead as yesterday's news." I invite you to come on the campus of Queens College or Davidson College or Chapel Hill or Johnson C. Smith or UNC-Charlotte, and you will be astonished at the degree to which these youngsters are searching for spiritual values.

My third major question: What is important to preserve about the "old" economy, if that's how we want to describe it? As a freshmen in college, I learned early on an important lesson in my economics class: In a market economy, nothing happens until a sale is made. Ford Motor Company, I promise you, can produce an unlimited number of cars, but until those cars move off the showroom floor to private ownership, nothing happens. In terms of the old values in the new era, someone better be presenting our companies, our colleges, and our country in ways that get people to buy into and feel a sense of fulfillment about what we are doing. Nothing good is going to happen to any of us until that occurs because nothing happens until a sale is made.

Another imperative in being a successful business is having a strategic advantage and being able to describe it. We talk about that a lot at Queens. We say to students in the McColl School of Business, Hayworth College, or the College of Arts & Sciences that at our college you can get unduplicated value-added. We must know the source of our strategic advantage, be able to articulate it, and then present it to our potential customers, students, and clients. Only to the degree that the new technology can support this effort does it become a part of the fabric and the solution to a better future.

There are a number of other things we should do as well. Peter Drucker says that until "somebody decides to decide, nothing is going to happen." How many times have we been in meetings where people keep talking about the same thing, and we say, "What are we going to do about it?" "Well, gee. I don't know. Let's get a task force working on it." If Thomas Jefferson had a task force or a committee to write the Declaration of Independence, we'd still be trying to write it, wouldn't we? Someone has to decide to decide. Someone has to say, "It's time to move. We need to act. There's a sense of urgency to this, and let's go!" Have a bias for action. Then, we must do what Ron and his colleagues have done here, which is to develop a core ideology. We must be able to articulate how our product is going to bring the consumer unduplicated value-added.

I want to mention one more characteristic of successful companies. They must have the capacity for renewal. Countries such as Russia, China, and some of their neighbors have had economic difficulty for generations because they don't have the capacity to renew themselves. Their authoritarian and Confucian influences leave them without the means and institutions to look at a problem and solve it. Friedrich Hayek, the Austrian-born economist, said these kinds of nations lack the capacity to deal successfully with "workable messiness." In the face of complexity and competing forces, they lack a set of institutions people trust.

In our recent presidential election - a classic case of "workable messiness" - there were no killings, no bombs, and no tanks in Florida streets. You may not agree with what happened there, but it was handled in the Hayekian way of dealing with workable messiness. In the Middle East during this same period, dozens of people lost their lives trying to deal with irreconcilable forces.

The civil rights movement in this country, the women's movement, and the environmental movement were all handled in the Hayekian way, but we must not forget the ugliness of the 60s and 70s. Our streets were in revolt; the cities were aflame. I was in India speaking to a group one night, and a man came up to me and said, "What authority do you have to speak? Your whole country is on fire." You know, the gentleman was probably right, but the point is there were political institutions - legislatures, the President, the Senate - that dealt with these issues. While you may not agree with the outcome these problems were resolved in a parliamentary, democratic way.

Contrast that with China's Tiananmen Square incident of June 4, 1989. A group of students occupied the Square to the embarrassment of the Chinese government during Soviet President Mikhail Gorbachev's visit to China for the first Soviet-China talks in 25 years. The Chinese government couldn't handle the chaos and fired on the students. This incident is a raw pockmark on Chinese relations around the world and still a major issue.

I want all of us to leave here tonight understanding that we need to think in time about those forces coming to bear on us, and we need to sort out what is new and not new. Be careful about making sweeping generalizations because chances are things will turn out differently than we think. Remember that nothing happens until a sale is made. With that in mind, we should know the source of our strategic advantage. And, we should have it pretty clear in our heads so we can tell others about the unduplicated value-added we bring to our clients.

I close with a statement from a great historian, Will Durant, about growth and decay: "Ask what determines whether a challenge will or will not be met. The answer to this depends upon the presence of initiative and of creative individuals with clarity of mind and energy of will, capable of effective responses to a new situation without losing the values of the old." And here again, on one point we all agree: Civilizations, individuals, companies, colleges, and communities begin, flourish, decline, and disappear or linger on as stagnant pools left by once life-giving streams. What are the causes of development and what are the causes of decay? Creative leadership and energy of will.

Creative leadership and energy of will. That about says it all.

Orchids & Steam Shovels Part II

Orchids & Steam Shovels Part I


At the Speed of Light

On Einstein, Newton and Satchel Paige

New Centuries, Mighty Dreams

Exceptions and Expectations

The Morning After

New Paths...
Worn Paths

Old Values in a
New Era

Procrastination and Consequences
Part I

Procrastination and Consequences
Part II

All in the Family
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