2018 Stanford GSB Excellence in Leadership Award Dinner
Good. Evening, I'd. Like to I'm, John Levin I'm the Dean of the Stanford, Graduate School of Business I'd. Like to welcome you to the, 2018. Excellence, in leadership award. Dinner. It's. Wonderful. To be here in San Francisco with all of you thank. You so much for for joining us tonight, I want. To give a very special welcome to this, evenings, honoree. Catherine, August to will bow I. Think. It's a great testament, to Catherine, that so many of, us have assembled here tonight. From different parts of of Catherine's, wife, I'd. Especially like, to welcome I, Catherine's. Family her, husband, David. Who, is also here tonight. And. We. Have five the, wielders here tonight. Who. Have Stanford, degrees. Actually. They have seven, Stanford, degrees between them but who's, counting. I'd. Also like to have a special thank you to tonight's, sponsors. And and to the many friends, and. Colleagues. And, classmates who, are here to celebrate, Katherine. The. Program, will start after dinner so for. The moment let me just ask you to enjoy, your your food and when dessert is served we will pick up with. The celebration. So thank you for being here. Good, evening once, again. And. Now, we're going to get to the main, reason that we're all here tonight. Which is to celebrate. And recognize, Kathryn. August - well Beth. I'd. Like to start just by talking for, a few minutes about this, this, dinner and how this award fits in with, the mission, of the, Graduate, School of Business, the. Excellence. In leadership award, was, established in 2003. To, highlight the achievements of a GSB, alumnus. Or alumna, who. Has made significant. Leadership contributions. To the corporate world and, to society, of. Course. A central mission of the, school is to educate leaders, leaders. Who will be purposeful. And principled. Both, in their professional, lives and, in their, contributions. To society and, today. Perhaps more than ever this, is the reason that students come. To Stanford to the Graduate School of Business from around the world from, more than 60 countries. They. Come so they can learn how to think strategically, and, analytically, from first principles, they come to develop the. Personal skills they, need to lead teams and organizations the ability to listen to. Communicate, to. Inspire, and, hopefully. They. Leave embodying, a set of values that we would like to see in all of our alumni. Integrity. A concern. For others an open, mind and, these. Are attributes that could not be more important, in today's. World. We're. Living in a time when business leaders are being called on not just to build successful. Businesses, but, to articulate. Clearly the, values, for which their companies stand, and the purpose and mission of their organizations, from, a social perspective. Over. The next decade, business, leaders in this country will have to grapple with rapid, changes and technology many. Of them such as changes, in the. Dances and artificial intelligence job, automation, will be coming from right here in the Bay Area with.
A Shift from a unipolar global. World to a multipolar, world, there, are other countries may. Be the drivers of innovation and entrepreneurship, and with. Fundamental, questions about economic. Opportunity, and equity. In in. Our organizations, and in our society, and, these are the issues that we're trying to prepare, our students. To address so they can be effective, leaders in, the years to come and. Katherine is, an example of someone who learned, those lessons well, and, embodies. All of the attributes, that we hope for and, I really could not be more proud that she is the recipient of tonight's award I. Would. Also like. To add that in the 15, years since this award, has been presented. Katherine. Is one of just a handful, of women to, be recognized, indeed. That was partly because until, the mid 1970s. Katherine. Graduated, in. 1975. The. GSB had almost no women graduates, and that. Brings me to a point that I'd like to emphasize one. Of. The most important, things that happens to students, at the business, school is that they stretch themselves and they expand, their sense of what is possible. The. Other day I was, asked. To give a talk to a group of students in the business school who are the Arbuckle leadership, fellows this is a group of about 70. Second-year. MBA students. Who coach and mentor the first year MBA students, as part of a first. Year required class called leadership labs and that class culminates. Each, December, in an event called the executive challenge that some of you may have participated in, and the. Arbuckle fellows, who are the second year students go through a year-long. Experiential. Intensive, process, of learning how to lead a small, team of near. Peers and. The. Story I told the I told the fellows a story I told the that was a story about a. Person who a man who just passed away recently, a man named Roger Bannister and. Roger. Bannister as, many of you will know was a runner he was also a physician and. In. 1954. When, he was a medical, student, in. England at. The if Lee road track in Oxford at Oxford University he. Ran a mile race in 3 minutes and 59 seconds. He. Was the first person to break the four-minute mile. Now. I'm, a runner and I've lived in Oxford and, I've been many times to the if Li road track and I have to say it is still impressive to see his name there is tract is named after him to. Give you a sense of how impressive, that, achievement, was. Consider. The following in 1953. Which was one year before, he broke the record Sir, Edmund Hillary and Tenzing Norgay climb. Mount Everest they were the first people to climb Mount Everest. Over. The next 60, years, more. People went to Nepal and climb Mount Everest then, ran a sub, four-minute, mile. But. Here's a remarkable, fact after. A Roger Bannister. Written. A sub. Four-minute, mile the. Record lasted, less than two months. 46. Days later, someone. Else ran a 357. Mile and. Actually. Later that summer. At. The. Empire. Games, in Vancouver. Two. People in one race ran under four. Minutes in a mile. Actually. Misses slightly off-topic. Theme. There was a theme is a famous alum from the alumni from the Stanford, Business School who. Later went on to make the shoes that almost all runners wear. And. He. Was a child at the time in the audience, at the, Empire State Games his father took him to see that race in Vancouver, where, the first time two people went under four minutes in the mile the, in the year following roger, bannister four-minute, mile there, were five runs, under, four. Minutes. Somehow. Having, a sense of what was possible. Actually. Made, something possible, and. I tell you the story not just because I like it which. I do I. But. Because Kathryn has been a similar, sort of pioneer, as a bank. President and, a corporate board member and a, leader. In finance and she. Has been quite intentionally. A role model and a mentor and an example to many young women and men as, well and she's done that at the business school for many many years through, our Women's Initiative our, women and management program as a board member of the Clayman Institute for gender research and especially this year as a.
Lifelong, Learner who, has returned to Stanford with David, as a DCI, fellow and, she's also, been in abroad since an enormous, contributor, to the school as a member of the Advisory Council and I've benefited, greatly from her wisdom, and counsel, so thank you Katherine and congratulations. Okay. And now I have the honor of introducing Steve, Denning who will give the the, real introduction, to Katherine Steve, is is. An. Alum of the school and his wife Roberta, another. Stanford, alum. Is here as well Steve's the past winner of this award and and much could be said about Steve's. Leadership example, for, me personally and for many others I will keep this very brief and. Using. The George Schultz rule that the, distinguished. Ness of the person is inverse to the length of the introduction. Steve's. The chairman of General Atlantic. He's. I. Joined. In 1980, he built it into one of the leading global investment. Firms. He, worked at McKinsey, before then and after. A six. Years in the Navy he's, been an incredible contributor, to the business school and to Stanford he served with cast Catherine on the GSB Advisory Council and for. 14. Years on the, University's, Board of Trustees which he chaired for five. Years between 2012, and 2017, and he retired last year and last night I was attempting, to count, the number of advisory. In his retirement the number of advisory. Councils that he has joined at Stanford and it was at least five and then I just gave up because I was exhausted. So, I. Thank. You to Steve Denning for being here and please join me in welcoming to the podium. Thank. You John I'm, glad that was wrong. You. Know it's my distinct, pleasure this, evening to introduce Katherine. We. Have known each other for a long time, almost. 40 years since. Both of us worked in the San Francisco, office of McKinsey. In the, late 1970s. I, worked. Again with Katherine. In 1987. When. General Atlantic made. An initial, investment, in first Republic, a new. Bank in San Francisco, that, Jim Herbert, had founded, and Katherine and joined in 1985. As. It turns out it wasn't the last time GGA. Invested. In first Republic. We worked again with Jim and Katherine in. The. 2009-2010. Period. To. Acquire FRB, from. The Bank of America. Subsequent. To its acquisition, of Merrill. Lynch in. Both, cases, we. Were smart enough to invest, but. Not smart enough to hold. FRB. Is grown organically. From an initial, market, cap of, less. Than ten million in 1985. To. Today where it's the 16th, largest bank in the US with. A 15, billion, dollar market, cap. I. Was. Also privileged, to serve in the Stanford, Business School Advisory. Council, as John indicated with, Katherine for, a number of years. Through. These different experiences. As a colleague, and investor. A fellow. GSB, alum and a. Friend I have. Come to understand, and appreciate, that. Katherine, is not only a pioneering, business. Executive. But. Also an, individual, with an exceptional.
Array, Of leadership, talents. She. Is serious. Focused. And determined. Driving. Success through times of crisis, in, times, of opportunity. Much. Of first Republic's. Meteoric. Growth through. The years and, Jim. Will be the first person to confirm, this can. Be attributed to, Katherine's. Tenacity. And relentless. Drive to. Quote/unquote. Make. It happen which. Is the saying the rest prominently. On her desk, as Jim. Says her. Persistence. Was. Perfection. If, your objective was, to make it happen. She. Simply, refuses. To accept anything. But the best from herself and her, colleagues, and she, expects, that level of effort and. Executional. Excellence, at, all times. Bob. Thornton, one. Of her colleagues who's, in attendance here tonight where are you Bob are, you here. Thank. You. Likes, to tell a story about a call that his. Executive. Assistants, Julie received, early, in her tenure. Katherine. Was calling to talk to Bob but. Bob was on the phone at the time so. Julie asked is the. Call urgent, -. Which Katherine, calmly, responded. It's always. Urging. Catherine. Never sucked, she is intensely. Rational. And doggedly. Persistent, when. She sets her mind to something but. She also has the creativity and, the. Strategic vision, necessary. To nurture, and grow an, enterprise. Decade. After decade as, a, result, she has been an exceptional, partner. For Jim in their. Collective, quest, to. Build an enduring, institution. With. A very, strong service, ethic, I have. Really met, someone. As inquisitive. As Catherine. She. Will pepper you with questions I mean for, hours if necessary. To. The point that there was no use being oblique or ambiguous because. She's. Going to keep on asking. You questions. Until. She gets the information she, is seeking. Now. This can be intimidating. And. Yet anyone close to Catherine. Knows. That she doesn't ask questions to. Intimidate, she. Asks him to get to know people thoroughly. And honestly. She. Is candid. And direct in. Inquiry, so. That she can be insightful. And empathetic, and impact. Her. Incredible, warmth and caring, are reflective, of a deep, genuine. Concern, about the people around her be. They customers, or employees. Friends. Or colleagues. She. Is not only a strong team, player, but. The ultimate, team, builder, and leader, her. Ability, to learn to. Listen and to understand, people on their own terms, has. Also allowed, her to be an important, mentor and coach. The. Room tonight is. A testament. To that. It. Is filled with many outstanding, colleagues. Whom, Katherine has recruited. Motivated. Empowered. And coached. People are making First Republic the. Company, that it is today. She. Is excellent, in translating. Her observations. And insight, into wise, and, rational. Advice and counsel, she. Always encourages. People to. Strive. For excellence and, achieve. Goals that often exceed their own aspirations. And expectations. The. Net result is that Katherine is admired, and, respected and. Inspires. Intense. Gratitude, and loyalty. Katherine. For. The exceptional, leadership, you have exhibited, throughout your career, for. The inspirational. Role you, have played in, shaping and helping others, to excel, and, for. The extraordinary. Role model, you have been for all of us both. In your career and your, personal life it. Is clear why you're receiving this excellence, in leadership, award. It. Is very well earned and very, well deserved, Katherine. Please come up. Steve. Thank you that, was really, a generous. Introduction, and. Thank, you, all for being here tonight I really, appreciate, it. Last. Spring, I received, a snail mail letter from John telling. Me that I would be this year's honoree. Quite. Frankly I was astonished. John. I read the letter twice I. Showed. It to my husband I said David do, you think this is a mistake. Now. What could he say right, I. Went. Online to look at prior year or honorees, and I knew with absolute certainty and how to be a mistake. So. I actually waited a few days to reply to get Stanford, the chance to rescind in case. Thank. You John I'm honored, to be this year's honoree it. Means so much to me because Stanford. Business School has. Been the, source of so much of my own growth. Tonight. I'd like to share my thoughts with, you on why growth is so important, for all of us for. Individuals, for, businesses, and for, the economy. Stanford's. Motto, change. Lives change, organizations. Change. The. World is, in, fact all, about, growth. Personally. We grow when. We open ourselves to new opportunities. Professionally. We grow when. We take on business, risks in. Finance. People. Who invest in growth are said to be long, people. Who invest in declines, are said to be short I am. Long on our ability to make the world a better place. And tonight. I'm going to tell you some long stories, and I promise, to keep them very short. Like. Many women of my generation I. Was, told going up that I should limit my career aspirations.
My. Parents, advice was. That I should marry well and my husband would support me. My. Father suggested. Repeatedly. That I get teaching credentials, to fall back on just. In case my, husband, died I. Adored. My father but that was not my plan. So. I set my own course, and over the next four years I, had a series, of jobs that. Were either underpaid. Uninspiring. And, unfortunately. More often than not both I. Remember. Picking up a magazine the. Headline caught my attention, it read, are. You stuck with a salary and the low-teens I. Thought. If. I had a salary in the low-teens I would be really rich I. Needed. More option. Graduate. School seemed like a great idea, not. Knowing exactly what, to do I took the GRE I took the LSAT I took the GMAT I scored. Highest on the GMAT so I applied to business schools. Very. Planful. My. Father a lifelong, New Englander, was certain, that there were no serious, schools, west, of the Hudson River. He. Said people only go to California. To surf. He. Was as you might imagine, salivating. Over my acceptance, to Harvard Business School and, I. Wanted Stanford, can you see a pattern here. There. Was one not, insignificant, stumbling. Block I was in my office in Washington DC when, I got a call from Gary Williams, then. The Dean of Admissions of the Business School here. He. Said I. Wait-listed. You pending this call I wanted. To understand, more about your math background. He, scored very high on the math part of the GMAT but, I couldn't, find even, one, math course on, your college transcript. Uh-oh. I was. Busted, I. Fell. Back on my verbal skills to explain away the lack of math I. Changed. The subject I told, him I really, wanted to come to Stanford. Dean. Williams bless, him took a chance on me he. Mailed me an acceptance, that day I. Arrived. At Stanford, and I learned that change lives isn't just a slogan it, begins in the classroom, I, expect. Some of you who've had an experience, like I had, early, on a, professor. Would ask the question I actually. Thought I knew the answer but, I knew that everyone in that class was. Smarter, than I was and they certainly had taken math in college. The. First student answered the question and the professor said not quite another. Student answer the question the professor said. Closer. But, finally. With a bit of trepidation I, raised my hand I answer the question and the, professor said exactly, right it. Happened. A few more times and after, that I knew, I would never again be afraid, to, speak up. Stanford. Changed, the trajectory of, my entire life I, could. Imagine unlimited. Possibilities. And the. Salary in the low-teens was no longer my goal. Fast. Forward, to 1985. I'm in, the City Club in San Francisco, and I'm. Having lunch with. A world-class leader. Earner. And someone. Who would go on to change, not, only my future, but the future of banking. He. Invited, me to join him to start first republic', he. Offered me a role, that. Did not exist, with. A leap of faith that I would create enough value to, justify, his decision. And. He. Paid me more than the low-teens. That. Man is jim herbert i am, delighted he's here tonight we.
Have Had a remarkable. Partnership for, 30 years, Jim. Thank. You I hope. I, hope. You're as pleased with the outcome as I have been. We. Started in San Francisco with, a single office with eight and a half million dollars in capital and ten people just. Like today's startups, - the. Foosball tables, the yoga mats and the hoodies. People. Often ask how did we grow more, than 20%, a year for, more than 30 years, what. Was the secret sauce. Well. We, built a client, centric culture, we. Set very high standards and, we. Brought in truly outstanding people. Many. Of you are here tonight you. Are the secret sauce and it, could not have happened without you. As. A. Result, over. Half, of our business comes, from clients, who do more with us as they grow and, another. Quarter comes from, their direct referrals. For. Example, we. Made a loan to a young couple moving, to San Francisco, and buying their first home. Years. Later that, young attorney was. The managing partner of one of the city's leading law firms a, firm. We had tried in vain, to Bank for years. One. Morning as we, watched my. Son Luke, and his son play soccer. He. Told me how pleased he was to be a client of first Republic, I told. Him we could provide the, same level of service to his entire firm if they'd. Moved their banking to us. Within. A week we, landed the business, Thank. You Luke. Excellent. Client service, has been the key to our success and, it, may help if you kids play soccer. One. Sunday morning with, my six-year-old in tow I delivered, a loan commitment, to a family, so, that they could buy their, dream home. My. Son said mom why are we doing this on a Sunday morning when we could be building Legos I. Said. Every. Bank can, do this on Monday. Only. We would, do this on Sunday, that. Thinking. Permeates, our entire organization. First. Clients, then. Legos. Our. Successful, relationship, with Steve and General Atlantic began, with a chance encounter on an airplane I found. Myself seated, next to another Mackenzie colleague ed Cohen who was the van head of General Atlantic, he. Was disappointed, that GA had not invested, in our IPO and he, asked for another chance, so. A week later Jim, and I met, Ed and Steve, topped. The rotating, restaurant at LAX. Where. We negotiated. G a stin. Vestment, as the. Lights of LA spun, by an. St. Said this, was a good investment.
20. Years later we, sold first Republic, to Merrill Lynch. For. 3.7. Times Book value and, to, those of you who may not be as familiar with financial services this. Is a really. Big number. It. Was clearly a homerun, for our shareholders, and. Then. The, financial, crisis, hit. Merrill. Lynch had to sell out to Bank of America, we. Were about to be gobbled up by one of the largest banks, in the world. Bank. Of America's, assets, two. Trillion, dollars. First. Republic's assets, 16. Billion, dollars. This. Was a real, David. And Goliath story. Let. Me tell you a bit about David's, side. The. First challenge, was to get Goliath's, attention, they. Were obviously, distracted. We. Finally had the chance to tell them we. Want to buy our bank back, our. Pitch was eloquent, and our case was compelling, and they. Agreed, to sell the bank but. Not to. Us. That. Was the wrong response. So. We refused to accept it, finally. They agreed we, could participate in the bid process, but. The odds were clearly, stacked, against. Us. It. Was at Stanford, at a GSD advisory council meeting in 2008. Steve. Was now the chairman, of GA, during. The break he took me aside and said obviously. You're, gonna buy first Republic back from the Bank of America we. Were one of your early investors, we. Want in the deal. He. Introduced, us to Bill Ford the CEO of GA, who. Together with Tom Barrett the CEO of Colony, Capital would. Ultimately, co-lead. Our management buy back. Things. Looked great we, made our bid and, then. Once, again disaster. Struck. Bank. Of America chose. Another group. For. The purpose of this story I'll call, them the black hats. These. Were truly bleak, days, and nights, but. There was an occasional, piece of optimism. The. Due diligence questions. The black hats asked, us, made. Us think that, there was a glimmer of hope that maybe, this was not quite a done deal and, suddenly. We. Heard that the sales of the black hats. Might. Be stalled. This. Was our opportunity. Jim. Went to New York to meet with the Merrill executive, who. Confirmed, that the sale was off. Bank. Of America would, now swallow, us whole. Integration. Would begin in two weeks. This. Was another response, that. We could not accept so. We asked for one more, chance. Bank. Of America delivered. An ultimatum. With. Deadlines, I am sure they. Never expected. That we could meet, we. Had three, days to, negotiate. A letter of intent. We. Had 14, days after, that, execute, a signed purchase. And sale agreement. 17. Days, when. Dealing with a giant Bank it, can be impossible to get a mortgage loan in 17, days. Our. Team work 24/7. We put together a broader group of buyers they. Had less than one week to, commit. Against. All odds we, met Bank of America's, deadline. We. Announced, our buyback, at, Book, value. This. Was quite a trade. Three-point-seven. Is a big number less than book net value is a very good number. This. Was a happily, ever after, story that. May be why the New York Times referred to us as the. Fairy tale Bank as. Growth. Is important. To First Republic it's. Critical, to America. When. The economy. Doesn't grow. Everyone. Suffers I lived. In London at a time of deep recession. Everyone. Was concerned about, how big a slice of the pie they, would get I, knew. That, if I was here in America. We. Would be more concerned about how to grow the pie bigger. In. Some. Quarters, obviously. Not here, business. Has a bad reputation. That's. Because everyone, doesn't succeed equally, we. All know much. More needs to be done, at. The same time. Business. Growth provides. Jobs. Lowers. Costs, and, invents. The future, nowhere. More than here in San Francisco. I've. Been, part of an organization. With, many extraordinary, people. Without. Whom our story, would not have, been. Without. Stanford. My. Story would have been quite, different and. Critical. To my story. Has. Been the support of my family. My. Husband, David has always wanted, me to be the very best version, of myself. His sage advice has. Been invaluable, as, has. Been his critique as he listened to the speech 100 times. He. Is my rock and my cheerleader, and has, this been the source of so much joy and thankfully. Despite. My parents, dire. Warning. He didn't die. I'd. Like to recognize my children, who are the source of so, much happiness, and joy Nick. Luke. Cruz. Holland. They. Have put up with absences. Crazy. Schedules. And would, certainly have preferred more Lego building. Their. Support, never wavered, and, they. Found the bright side. Nick. Once said to a friend, thank. Goodness my mother is running First Republic it would, have been an absolute, disaster, if she had put all that energy into managing, us. Thank. You new, personal. Growth should never end I'm back, at Stanford as, a fellow in the distinguished, careers Institute.
Exploring. The next chapters. Recently. I walked by the cornerstone. Which. Read. Dedicated. To the things that haven't happened yet and the, people who will dream them up. That. Is the spirit, of the GSB that has always inspired, me. Over. The years I've, been fortunate to mentor young people advise, company, founders, and. Help. Young women navigate. Successful. Careers and happy, families, I share. My life lessons, with them. Lessons. That work for men and women among them are. Pick. The right partner I certainly. Would did, if you don't. If. You don't it will never work. Staff. Your home like your business if, you don't there are hundreds, of small details. That will derail you at every turn. Find. Peers, and mentors. Success. Is much better as a team sport and much, more likely. Aim. High. Never. Be afraid to let people know what you expect, and. Raise. Your hand. Finally. Attend soccer games and build Legos I. Will. Close with a quote often, attributed, to Maya Angelou, I. Have. Learned that people will forget what, you said people. Will. Forget what you did but people, will never forget, how. You made them feel. Tonight. You, have made me feel very special I. Will. Never forget, it thank. You very very, much for this honor thank. You for being here with me tonight.