Profound Commencement Speech at Georgetown Univ

Well worth reading & sharing!

The Three Foundations of A Great Life,
Great Leadership, and A Great Organization
McDonough School of Business, Georgetown University Commencement Ceremonies
Washington, DC                                                                      May 21, 2011
Michael C. Jensen
Jesse Isidor Strauss Professor of Business, Emeritus
Harvard Business School
Chairman, Social Science Electronic Publishing, Inc. (SSRN)

My congratulations to all of you candidates here this morning. You have successfully completed a rigorous program at a great university. You can be proud of your accomplishments. As all of you know, this is not the end, this is the beginning of the real challenges of life. Some of you will go on to graduate school and some of you will be launching your careers directly. And there will be families. For most of you those concerns are paramount in your minds at this time.
I will devote my remarks this morning to three topics – none of which I have time to cover completely. What I will say comes from joint research with my co-author Werner Erhard over the last eight years (see our work on Ontology and leadershiphttp://ssrn.com/abstract=1588288 that we have co-authored with Kari Granger and Steve Zaffron).

I will focus today on the Three Foundations of:
1. A great personal life
2. Great leadership
3. A Great Organization

Those three foundations are:
1. Integrity
2. Authenticity
3. Committed to something bigger than oneself

I wish I had been exposed to these themes when I was at your stage in my own life. At 71 it is now clear that I could have avoided much personal drama and difficulty – most of which I created.
Electronic copy available at: http://ssrn.com/abstract=1850544

1–Integrity
By integrity I do not mean the normal concept of integrity, which makes integrity a virtue that is confounded with moral and ethical behavior.
By integrity I mean the purely positive state of being whole, complete, unbroken, sound, perfect condition. For a human being (or any human entity) this is a matter of one’s word – nothing more and nothing less. (For a much more extensive discussion of these matters see: http://ssrn.com/abstract=1511274 and http://ssrn.com/abstract=1542759 and http://ssrn.com/abstract=1559827 and http://ssrn.com/abstract=1640302 )
Our Law of Integrity states:
As integrity (whole and complete) declines, workability declines, and as workability declines, value (or more generally, the opportunity for performance) declines. Thus the maximization of whatever performance measure you choose requires integrity.

Violating the Law of Integrity generates painful consequences just as surely as violating the law of gravity. Put simply (and somewhat overstated): “Without integrity nothing works.”
Think of this as a heuristic (it is not literally true): But if you or your family, or your organization operate in life as though this heuristic is true, performance (however defined for any one of these) will increase dramatically – easily in the range of 100% to 500%.
And note that the impact of integrity extends to the quality of your life; your happiness.
The relation between integrity and oneself:
It is my word through which I define and express myself, both for myself, and for others.
It is not too much to say that who I am is my word. It follows that to be whole and
complete as a person, my word to myself and others must be whole and complete.
In this new model of integrity, being whole and complete is achieved by keeping your word, or, when you will not be keeping your word, then honoring your word.
By honoring your word I mean that when you will not be keeping your word you (1) immediately inform all those counting on you to keep your word that you will not be keeping it. And (2) you clean up the mess that you have caused in their lives by not keeping your word. This is the actionable pathway to being a person or organization of integrity.
Integrity maintains you as a whole and complete human being. It creates workability in one’s life, and finally it generates trust in you by others, and does so almost immediately.
What is it like to be whole and complete as a person? When you honor your word to yourself and others:

You are at peace with yourself, and therefore act from a place where you are at
peace with others and the world – even those who disagree with or might threaten you.

You live without fear for your selfhood – that is, who you are as a person.

You experience no fear of losing the admiration of others.

You do not have to be right; you act with humility.

Everything or anything that someone else might say is OK for consideration.
There is no need to defend, explain, or rationalize yourself. You are able to learn.

This state of affairs is often mistaken as mere self confidence rather than the
courage that comes from being whole and complete – that is, from being a man or woman of integrity.
Being whole and complete as a person is thus critically important to living a great life and to being a great leader. (Remember, leadership starts with being the leader of your own life.)
And, being whole and complete is one of the foundations for being a great organization.
2–Authenticity
Quoting my Harvard colleague, Professor Chris Argyris who (after 40 years of studying us human beings) says on the subject of our inauthenticity:

“Put simply, people consistently act inconsistently, unaware of the contradiction between their espoused theory and their theory-in-use, between the way they think they are acting, and the way they really act.” (Harvard Business Review, “Teaching Smart People How to Learn”
(1991, pp. 99-109))
And if you think this does not apply to you, you are fooling yourself about fooling
yourself.
Common examples of being inauthentic include pretending to be some way you are not actually being – that is, hiding what you actually think or feel, covering up what is actually going on with you, or covering up something that happened or didn’t happen in your life. This is thought of as a façade or a face you put on.
Because it is painful to be caught being inauthentic, everyone goes to great lengths to avoid revealing their inauthenticities.
This means we are inauthentic about being inauthentic.
Examples of our inauthenticities:
We all want to be admired, and almost none of us is willing to confront just how much we want to be admired, and how readily we will fudge on being straightforward and completely honest in a situation where we perceive doing so threatens us with a loss of admiration.
We also all want to be seen by our colleagues as being loyal, protesting that loyalty is a virtue even in situations where the truth is that we are acting “loyal” solely to avoid the loss of admiration. And, in such situations, how ready we are to sacrifice integrity to maintain the pretense of being loyal, only because we fear losing the admiration of our colleagues.
Also, most of us have a pathetic need for looking good, and almost none of us is willing to confront just how much we care about looking good – even to the extent of the silliness of pretending to have followed and understood something when we haven’t.

We are all guilty of being small in these ways, including me – it comes with being
human.
Great leaders are noteworthy in having come to grips with these foibles of being human – not eliminating them, but being the master of these weaknesses when they are leading.
If you watch carefully in life, you will have the opportunity to catch yourself being small in these ways. While you won’t like seeing this, by distinguishing these weaknesses in yourself, you will give yourself a powerful opportunity to master these weaknesses.
One cannot pretend to be authentic. That, by definition, is inauthentic.
The actionable pathway to authenticity is to be authentic about your inauthenticities.
Being authentic is being willing to discover, confront, and tell the truth about your
inauthenticities – when and where you are not being genuine, real, or authentic.
Specifically, where in your life are you not being or acting consistent with who you hold yourself out to be for others, and where are you not being or acting consistent with who you hold yourself to be for yourself.
If you cannot find the courage to be authentic about your inauthenticities, you can forget about being at peace with yourself, and you can forget about being a great leader.
And, similarly, an organization that cannot be authentic about it’s inauthenticities will experience great conflicts, costs, and loss of reputation.
The attempt to be authentic on top of our inauthenticities is like putting cake frosting on cow dung, thinking that that will make the cow dung go down well.
Quoting Bill George, former Medtronics CEO and now Harvard Business School
Professor of Leadership:

“After years of studying leaders and their traits, I believe that leadership begins and ends with authenticity.” (George, Bill, Authentic Leadership: Rediscovering the Secrets to Creating
Lasting Value. San Francisco: Jossey-Bass. 2003, p. 11)
To be a leader you must be big enough to be authentic about your inauthenticities. This kind of bigness is a sign of power, and is so interpreted by others.
The Actionable Pathway to Authenticity
To be authentic about your inauthenticities, you must find in yourself that “self” that leaves you free to be authentic about your inauthenticities.
That “self”, the one that gives you the freedom to be authentic about your
inauthenticities, is who you authentically are.
And you will know when this process is complete when you are free to be publicly
authentic about your inauthenticities, and have experienced the freedom, courage, and peace of mind that comes from doing so.
And this is especially so when you are authentic with those around you for whom those inauthenticities matter (and who are likely to be aware of them in any case).
In conclusion, authenticity is one of the conditions for a great personal life, great
leadership, and a great organization.

3–Being Committed To Something Bigger than Oneself
What I mean by “being committed to something bigger than oneself” is being committed in a way that shapes one’s being and actions so that those actions are in the service of realizing something beyond one’s personal concerns for oneself – beyond a direct personal payoff.
As they are acted on, such commitments create something to which others can also be committed and have the sense that their lives are about something bigger than themselves – an important aspect of great leadership.
The Source of Passion
Without the passion that comes from being committed to something bigger than yourself, you are unlikely to persevere in the valley of tears that is an inevitable experience in the lives of all human beings and certainly in the lives of all great leaders: Times when nothing goes right, there is no way, no help is available, nothing there except what you can do to find something in yourself – the strength to persevere in the face of impossible, insurmountable hurdles and barriers.
When you are committed to something bigger than yourself and you reach down inside you will find the strength to continue (joy in the labor of).
And finally, being committed to something bigger than yourself leaves you with the passion required to empower the brain’s executive function to “not eat themarshmallow”.
A Valley of Tears that Almost Everyone Experiences: The Mid-Life Crisis
At some point in life we all stop measuring time from the beginning and start measuring time from the end. It shifts from thinking about “How far have I come?” to “How much time and opportunity do I have left?” – the difference between, “I’m 30 years old” and “I have about 30 years left.”
No matter how good you look, no matter how good you’ve gotten your family to look, and no matter how much wealth, fame, position or power you have amassed, you will experience a profound lack of fulfillment – the incompleteness, emptiness and pain expressed by the commonly occurring question:

Is This All There Is?
Let’s be clear: There is nothing inherently wrong with wealth, good looks, fame, positionor power, but contrary to almost universal belief “wealth, good looks, fame, position and power will never be enough”.
And facing up to that fact leaves people disoriented, disturbed and lost, and in search of meaning. At this point in life many men start buying red convertibles (or their equivalent) and women have their own ways of dealing.
No matter how good you look or how much you have personally amassed, it will never be enough to avoid this crisis.
Dealing with the crisis of “Is this all there is?” lies in having a commitment to the
realization of a future (a cause) that leaves you with a passion for living.
This principle applies to corporate entities as well as to human beings. Value creation for both is the scorecard for success.
Value creation is not the source of corporate or personal passion and energy.
Being committed to something bigger than oneself is the source of that passion andenergy.
And every individual and every organization has the power to choose that commitment — there is no “right answer”. We all have the opportunity to create what lights us up.
This is the actionable pathway to Committed To Something Bigger than Oneself.
Committed to Something Bigger than Oneself: Summary
The following quote from George Bernard Shaw’s play “Man and Superman” (the epistle dedicatory to the play) captures this idea of being committed to something bigger than oneself:
“This is the true joy in life, the being used for a purpose recognized by yourself as
a mighty one; the being a force of nature instead of a feverish selfish little clod of
ailments and grievances complaining that the world will not devote itself to
making you happy.
“I am of the opinion that my life belongs to the whole community and as long as I
live it is my privilege to do for it whatever I can.
“I want to be thoroughly used up when I die, for the harder I work the more I live.
I rejoice in life for its own sake. Life is no “brief candle” to me. It is a sort of
splendid torch which I have got hold of for the moment, and I want to make it
burn as brightly as possible before handing it on to future generations.”