Follow the Data Podcast: Mike Bloomberg Class Day Remarks at Harvard Business School
Mike Bloomberg spoke to the 2019 graduating class of Harvard Business School. As an alumnus, he spoke with special fondness about growing up in nearby Medford, MA, his early career, and what he’s learned since then.
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KATHERINE OLIVER: Welcome to Follow the Data, I’m your host, Katherine Oliver. We continue our special series featuring Mike Bloomberg’s commencement addresses this year. On May 29th, Mike delivered remarks at Harvard Business School’s 2019 Class Day.
He spoke about his career, learning never to compromise when it comes to ethics, and the urgent need for ethical leadership.
MIKE BLOOMBERG: “Well good afternoon. Thank you, Dan for the introduction – and you really don’t have to call me Mayor Bloomberg. Mr. Bloomberg would be just fine, thank you.
“Let me also thank Nitin for the honor of addressing you. I didn’t have much choice when he called – he didn’t ask me to come, he told me I was coming.
“Let me begin with the most important words I can say today: congratulations to the distinguished graduates of the great class of 2019.
“It was only 53 years ago that I was in your shoes, so I know you’ve had an amazing experience here. You have mastered the case method during your time on campus – and the art of asking tough questions, like why don’t the printers ever work here? Why on earth do they use the case method to teach accounting? Who thought of that?
“And the toughest question of all: how many people does it take to finish a Scorpion Bowl at Hong Kong? For the record, the correct answer there is more than one.
“HBS really does have a special place in my heart. Not only did I graduate from here, but so did my daughter, Emma.
“My foundation teamed up with the B-School and K-School to create a mayoral leadership program run by Professor Abdelal.
“And my father – who died a year before I was accepted to HBS – has his name on the building that stands behind Baker, an honor that would have thrilled him.
“He and my mother raised my sister and me just five miles from here in Medford, Massachusetts. That was convenient, because I never would have made it through the B-School without my mother nearby – she typed all my papers. Five decades later I still can’t type – or spell. But I do have the good sense to have someone proof my tweets.
“As you can imagine, I also had the good sense to keep my Boston connections to myself when I was Mayor of New York City, especially when the Red Sox, Celtics, Bruins or Patriots came to town. I will just note that during my time in City Hall, the Giants beat the Patriots in two Super Bowls. I did my job.
“We moved to Medford from Brookline a few miles from here when I was four-years-old. And I can still remember my first day in our new home. A boy from up the street clunked me over the head with a rock and I went in bleeding to my mother, which is to say I learned about Boston hospitality at a young age. I guess I had a hard head even back then.
“Even though I grew up just a trolley car ride away, when I first arrived on campus I felt like I’d entered a whole new world. Suddenly, I was in classes with friends whose families had built major companies and had famous last names. That was a pretty radical change from my childhood. My mother once told me: we never knew anybody whose name was in the newspaper, unless it was in the crime or the obit section.
“I can’t say I spent a lot of time across this lawn in Baker Library. My transcript is evidence of that. I was always one of those who made the top half of the class possible. I was more likely to be over the bridge at what is now the Russell House Tavern. Back then, it was a German beer hall called The Wursthaus. It’s where I first learned that it’s better not to watch sausage being made.
“Now, I’m sure many of you have already lined up a job. But for those who haven’t, don’t worry. I was a month away from graduating from the B-School and I still had no idea what I wanted to do. I asked a classmate for advice. He said, ‘Go to Wall Street.’ I said, ‘I don’t know anything about finance.’ He said, ‘Just apply for jobs at Salomon Brothers & Hutzler, and a firm named Goldman Sachs.’ And I said, ‘Who are they? What do they do?’
“Yes, I was a B-School kid who had never heard of Goldman Sachs. A lot has changed since then.
“Goldman, I remember, flew me down to New York and offered me a job starting at $14,000 a year – not bad pay for 1966. Salomon Brothers sent me a train ticket and offered me a job for only $9,000. After the interviews, I thought I would fit much better into Salomon. But I told the senior partner, John Gutfreund, I couldn’t afford to pay the rent on that salary. Rent in New York was really expensive back then – 120 bucks a month, as I remember.
“He said, ‘how much do you need?’ I didn’t want to be piggy about it, so I said on the spur of the moment $11,500. He said, ‘OK, $9,000 in salary and a $2,500 loan.’ And he walked out of the room. This is a true story, I didn’t know what to do.
“So I showed up two months later and I just started working. So much for my negotiating skills.
“For the record, my first year bonus was $500 loan forgiveness, and my second year bonus was forgiveness for the other two grand. Just remember that when you think you are getting stiffed on a bonus negotiation.
“But seriously, when you weigh a job offer my message to you is, even later in life when you’re considering a career change, leave salary out of the equation. Make decisions based on the quality of the opportunity, and where you’ll have the most fun and the most room for growth.
“What’s important for your career is not your starting salary. It’s your development and happiness. The cash will come later on.
“I learned a lot about finance at Salomon, but the most valuable lesson I learned had nothing to do with stocks and bonds. They were lessons on how to apply what I had learned – not only here at HBS, but also from my parents, and from my time as an Eagle Scout.
“The head of Salomon Brothers, Billy Salomon, never went to college, no less business school. He never took a class in corporate responsibility – and he didn’t need to. Being ethical does not require a Masters degree. It requires having a conscience – and following it. It requires being honest and truthful, and never lying or cheating.
“Let me give you a quick example: there was a rule at Salomon against giving gifts to clients to win more business. When Billy caught someone sending a case of wine to a major client, he fired him on the spot. Period, end of story. It didn’t matter that he was perhaps the most productive salesman in the company.
“You can say Billy over-reacted – but I don’t think so. The rules he asked us to follow he followed himself – no exceptions. And when it came to ethics, there was no compromising.
“Billy treated everyone the same – from senior partners to the custodial staff. No one was better than anyone else. And Billy believed if you were lucky enough to make some money, you had an obligation to give a percentage of it away to help others. In fact, he didn’t ask you what the percentage should be, he told you and you did it.
“I’ve been very lucky in my career. But my luckiest break wasn’t getting fired – although that was pretty lucky it turned out. My luckiest break was taking a job where I got to see the ethics I learned growing up put into practice in the workplace. And I’d like to think the principles that I learned at Salomon have guided my life ever since.
“But when we look at today’s world, it’s not clear that everyone with a degree in business has those principles. And that’s one reason, I believe, that this great country of ours is suffering from an ethical crisis that is corroding our society.
“Today, Americans are questioning whether those in the private sector – and in Washington – can provide the moral leadership our country needs, both economically and politically. They see the rewards of the economy increasingly concentrated at the top. They see wealthy parents scamming the college admissions process. They see families unable to afford health care and housing in the world’s richest country. They see decades of discrimination based on race and ethnicity trapping another generation into poverty. And they wonder: is our economic system breaking down?
“At the same time, if they are not blinded by partisanship when they look at Washington, D.C., they see truth and science being trampled with reckless abandon. They see the rule of law being attacked and undermined. They see a chorus of enablers who defend every lie and abuse of power. And they wonder: is our political system breaking down, too?
“Now, as you may know, I’ve never been much for party politics. I’ve supported Democrats, Republicans, and independents. Hell, I’ve actually been a Democrat, Republican, and independent.
“No party has a monopoly on good ideas or good people. But I believe all of us have an obligation to reject those who traffic in dishonesty and deceit. That is not a partisan position. That is a patriotic position.
“For full disclosure, back in 2016 at the Democratic National Convention in Philadelphia when the Republican nominee was promising to run our country like he ran his business, I said, ‘God help us.’ And not just because he went to Wharton. Actually I wish I hadn’t been right.
“But unfortunately, when we elect people to public office who have no interest in ethics, that depravity trickles down and it seeps into our culture.
“Thirty years ago, New York Senator Daniel Patrick Moynihan – a Harvard professor I should note – described society’s growing tolerance for illicit behavior as ‘defining deviancy down.’
“Today, we face the same problem – only the bad behavior is not on city streets but in the halls of power in Washington. And as our political culture degenerates, so does our ability to address all the big challenges that we face.
“Now, the good news is there is a solution. In fact, I believe that the solution to our political problems is also the solution to our economic problems. And I can sum it up in one word: integrity.
“In Econ 101, you were probably taught that markets are based on supply and demand. But for capitalism to really function, people need to have faith that they will be entering into generally fair exchanges – that one side won’t cheat on the other.
“Of course, not every person can be trusted to act with integrity, so we do have laws and regulations that are intended to guarantee it. Those legal controls don’t always work – and periodically, we do need to update them.
“For example, a century ago, Teddy Roosevelt took on the largest corporations that were destroying competition. Twenty five years later, Franklin D. Roosevelt’s New Deal provided relief from a Great Depression that some thought would lead to the downfall of capitalism.
“For their leadership, T.R. and F.D.R. were reviled by many in the business world – and considered traitors to their class. But their actions preserved the integrity of markets – by restoring people’s faith in them.
“Now, I’m as much of a capitalist as you will ever find, but anyone who believes that unfettered capitalism works hasn’t read history.
“Today, we hear echoes of the challenges the Roosevelts faced. Industry consolidation has reached record levels, and is suppressing competition and choice. And more and more Americans – especially in your generation – are questioning whether capitalism is capable of creating a just society. Their faith in America – and all that we represent – is being shaken.
“If we do not act to restore it, the turmoil in our politics today will be only a prelude of what’s to come, and that could shake the very foundations of our society.
“Graduates, we cannot allow those issues to fester. We must address them now. We must find new ways to build a capitalist society that is more dynamic and more secure, more affluent and more equal.
“So think of this as your next case study. And it’s the ultimate case study for our country, because it’s based on the ultimate question: how do we restore faith in the promise of America and the future of the American dream?
“There are no silver bullets, but I believe all of you have a critical role to play. So let me offer you a few ideas on how you can help lead the way.
“First, start with yourself. Wherever your career leads you, be honest with your colleagues, clients and contractors. Don’t ever try to take advantage of them. Don’t hesitate to speak up when someone else does.
“Public faith in private markets rests on individual actions. Billy Salomon understood that. And I hope you will seek out organizations that are led by people who understand it, as well.
“Second, when applying for a job, align yourself with companies that are engaged in philanthropy. I tell job applicants all the time, if you want the fruits of your labor – the company’s profits – spent on education, public health, the arts, government innovation, and the environment, come to work at Bloomberg. If that’s not what you want, you’re not the right person for us.
“Philanthropy gives us a competitive advantage, we think, in recruiting and retaining talent. And I can tell you from personal experience it is also good for the bottom line, as good a thing a company can do.
“Third, give back on your own and don’t wait. I’ll never forget watching my father write a check for 50 bucks to the NAACP – which was a lot of money for us when I was a kid. I asked him, ‘Daddy, why?’ And he said, ‘Because discrimination against anyone is a threat to everyone.’
“And I can just tell you after 50-plus years in business and government, people have a hell of a lot more respect for those who make a difference in society than they do for people who just make money. And the networks that you will make through philanthropy will open up lots of new opportunities for your career.
“Gordon Gekko was wrong: greed ain’t good.
“All of you have spent two years studying how to run and manage organizations. There are so many groups that could benefit from your expertise. So volunteer, serve, go into government. Just remember the difference between business and government: business is a dog-eat-dog world. And government is exactly the reverse. So you can do it.
“Fourth, if and when you end up in an executive position, don’t make one of the fundamental mistakes that I see businesses and boards make all the time: under-valuing their labor force, and over-compensating their CEOs.
“Management often treats workers like widgets – which they’re not. And boards treat CEOs like irreplaceable geniuses, which they rarely are.
“At Bloomberg, we pay employees very well, we invest in their training and education, and we offer industry-leading benefits. In return, our employees pay us back ten-fold with their dedication and loyalty.
“Doing right by your employees pays. It really does. And there is no better way to strengthen capitalism than to give people a greater stake in its success.
“Fifth and finally, never self-deal. Ever. And avoid even the slightest perception of a conflict of interest.
“After I was elected mayor, I decided to refuse a $15 million city tax break that Bloomberg had already qualified for. And I waived the fees for the Bloomberg Terminals that the city agencies had under contract. And I certainly never charged taxpayers $300,000 in golf cart fees for my security team. I would’ve thought Wharton would teach its students not to do that, but who knew?
“But really, your reputation is everything. Don’t sell it or trade it for anything.
“Finally, after following all of these principles, insist on no less from the people who ask for the most precious commodity you will ever own, and that is your vote.
“Elect people who understand that it’s their obligation to make capitalism work for everyone, and not be so naive to think other systems will be better. That means picking up where Teddy Roosevelt and Franklin Roosevelt left off, and modernizing capitalism for our time.
“America must always be a place where it’s possible to get rich through perspiration and innovation. But it must never be a place where the middle class steadily loses ground – and where many of those feel trapped at the bottom.
“Unfortunately, that is the path we are on. And the further we go down that path, the more likely that the most extreme voices on both the left and right will attract large followings, win power, and do real harm to our country.
“Now, I’m an optimist, and we will change direction I think, partly because of how business leaders are already taking on one of the biggest challenges that we face: climate change.
“Today, I’m glad to announce that HBS will hold an alumni conference next year, on investing in the age of climate change – with Bloomberg Philanthropies’ support. It’s another example of where doing right and doing good are aligned.
“Investors are demanding that businesses disclose the climate risks they face – because it affects their bottom line. I’ve helped spearhead a push for more transparency, through the Task Force on Climate-related Financial Disclosures. And next year here at HBS, we will bring government and business leaders together to discuss how we can harness the power of the market to protect the environment.
“Market forces are among the most powerful tools in the world. But whether it’s climate change, or income inequality, or gun violence, or any other issue, those forces must be guided by ethical leaders, or else the market’s invisible hand can turn into a clenched fist.
“And when society’s most defenseless take it on the chin, I can promise you they will fight back with unpredictable consequences – and demand a better deal, as they should.
“Graduates, restoring the faith that Americans have been losing in our economic and political systems is a big job. If you won’t lead it, who will?
“You’ve been fortunate to spend two years on this pristine campus – where even the squirrels seem to have come from the spa. But as you know, the real world can be dirty, unfair, and unjust, unless you insist otherwise. And capitalism can run amok, unless you steer it back on course.
“As graduates of the Harvard Business School you have the ability to help our nation do all of that and much more – and I sincerely hope that you will.
“So tonight, have one last Scorpion Bowl, and tomorrow start helping to restore and renew our national sense of integrity.
“Our country needs you, and you can do it.
“Congratulations and best of luck.”
KATHERINE OLIVER: We hope you enjoyed this episode of Follow the Data. For more episodes featuring Mike Bloomberg and the work of Bloomberg Philanthropies, be sure to subscribe to Follow the Data podcast. This episode was produced by Electra Colevas, Ivy Li, music by Mark Piro. Special thanks to Eric Sheppard. I’m Katherine Oliver, thanks for listening.