Gregory B. Fairchild, E. Thayer Bigelow Assistant Professor of Business Administration
Convocation Address - University of Virginia
October 23, 2015
Thank you, President Sullivan, Rector Goodwin, Distinguished Guests, Friends, Family and most importantly, those of you receiving intermediate honors today. Congratulations. It is a beautiful day outside, and a beautiful day inside.
Since I am from a business school, it may not be a complete surprise that I am going to speak about investing. I hope you will pay attention because the type of investing I will talk about might veer from what you might anticipate that we speak about in business school when we say we’re discussing investing.
You see, from a certain vantage point, today I am speaking today to the ultimate room of investors. Those of you receiving honors today are those who are most prepared, the most studied. The days, the hours, the moments you’ve spent getting yourself to this room today, were and are investments. Those investments were ones that have gotten you noticed, have gotten you your seats here today. But you may have been asking along the way -- as you spent those long hours in the library, after spending long working through a problem set: --What did you expect to gain from your time here at the University of Virginia? How would being on grounds change, alter and develop you?”
Let me tell you that years from now, if there were statisticians that looked at the result of this class, this class would be no different than any other intermediate honors class that has sat here before us in the past. Whether we to measure your incomes, the acceleration of your careers, the size and features of your homes, or the art you enjoy, you will again be top scorers. If there were a site to buy shares in you, if there were a fantasy sports league for you, you would be highly rated.
Let us not forget that there are some other investors who are here as well. Your parents, friends and family are smiling. You are the hope and dreams they made years ago. The faculty and leadership of this University are smiling. We have committed to education because we believed you were out there, and here you are.
So my thoughts about investments today are with a group who is well acquainted, even if you may not have thought of yourself as investors. If we consider the path that brought you here, us here, as investments, then we should ask:what are the profits that accrue from these investments?
Over time, your share prices may rise and fall, but where are we heading? Who is purchasing your shares?
Now, there are a few easy answers we could think about – the two most obvious are where you will work after school, and what salary you’ll receive for your work.
This notion of value through the income we generate or the prestige we gain in a job is a real thing, and I’ve experienced it myself.
When I was just out of college and living in New York, a broad, diverse and exciting city was opening for me. I was meeting young people like myself from around the country. Bright and competent all of them. I had landed an exciting job managing the couture dress department in Saks Fifth Avenue’s flagship store just across from Rockefeller Plaza. The Center of the fashion world.
When I would meet these other exciting, competent New Yorkers, within minutes the conversation would turn to where I worked. I would proudly say “Saks”, and then as the conversation progressed it would become clear that I meant S-A-K-S and not S-A-C-H-S. Those of us in this room know that those letters matter.
S-A-C-H-S places one among the global financial elite. S-A-K-S means you serve people that work at the other firm. When it would become clear that I didn’t have a CH on my business card, interest in continuing the conversation would sometimes wane. I never got to share stories about my favorite novel, my recent visit to the Museum of Modern Art, or what I thought of the Central Park Jogger case.
Years ago, I was invited to a dinner with many folks I’d admired from afar. This group had flown into New York City from across the planet. After we all sat down and ordered, the host made a toast – recognizing that all of us had Ivy League affiliations. I realized that because I’d happen to have studied in Upper Manhattan, and that others at the dinner had spent time in New Haven, Ithaca, Hanover and Cambridge we were invited and we were toasted. Now, the dinner was great. The food was great. The conversation great. And,yet I wondered about who didn’t get invited. Perhaps there were interesting folks who simply had studied in some other place – like Ann Arbor, or even Charlottesville?
I share those experiences because the investment mindset in higher education is becoming solidified, reified. This notion of investments has even been endorsed by our Federal Government that recently created a website this year that provides information for potential students on the tuition, expected scholarships and post-graduation salaries of various colleges. This is explicitly an investment mindset at play in comparing colleges.
The Darden School, where I work, was just ranked number 2 in the Economist’s worldwide ranking of schools, and number 12 in Bloomberg Business Week. This is wonderful. And, as happy as I might be about those rankings, its hard for me to believe that my teaching is suddenly better this week than last because a magazine said that it is so.
Now, even though I work in a business school, I have some concerns about the education to get a job and salary mindset. They are similar to my concerns with shares of political figures.
The first thing that bothers me is the investments that are left out – Let’s face it: You didn’t get here alone. Many hands brought you here today. There are elementary and secondary teachers who sent home notes, stayed after class, or simply encouraged you. There are study partners here at UVa who worked with you late into the evening. There are counselors who made you feel that your concerns were real and important.
My wife is here with me today. My father once told me the best investment I ever made was in my marriage, and that I had chosen quite well. Since he at one point was a banker, I think he had some wisdom on that one.
When I entered kindergarten, my mother told me to sit at the front of the room, to raise my hand and ask lots of questions. She told me to talk to my teachers about what I was learning in their classes. Every day after school, she would quiz me. She purchased phonics books that I was forced to complete at home. I found all of this irritating. The year was 1968, and I was the first black kid in my school. My mother was laying a foundation that led me here and to this stage. If we’re serious about investments, we need to take into account the many hands that got us here; the parents, the counselors, the teachers, the mentors and the friends. Thanks to my mother for her investment. My second concern about what I am calling a careerist, investment mindset is how we measure the “profits” or “returns”. When we measure the value of education solely based on salary and job prestige we leave a bunch of things out. You chose UVa for the experiences you would have here -- every university, every school within a university offers community – a connection, a shared purpose, a shared identity. When we focus on salary after graduation, we don’t account for the Lawn, or the beauty of the view from O-Hill. We forget about the importance of Honor, or the professor who spent 45 minutes with you outside of class. We miss the pains we’ve experienced collectively here at UVA over recent years – I don’t have to remind us about those. Those were pains we shared, and yet we sit here today -- resilient and strengthened. We’ve learned from these, and though we wish such things didn’t happen, we are better having traveled them together.
Perhaps you’re thinking that I’ve missed the point – I am ignoring the importance of early investing so that you can enjoy the options that come over time. I am ignoring if you work hard for many years, even unhappily, you will make it up later. When you have the means, then you can do things that give you personal meaning. Then, you can share your talents through philanthropy. Then, you can donate and help create a new program, a new building, a new laboratory. I recognize that thinking, for sure. And I appreciate the support we get from philanthropy – I just don’t know that you have to wait.
The final caution I have with the investment mindset in education is that we’ve become focused on the “Me” and have forgotten the “We.” You see, educational investments are not private goods, but public goods. For the economists in the room, the distinction will be familiar. Let me do a quick and dirty explanation.
Private goods are those that must be purchased to be consumed, and this is important, private goods can only be consumed by one person. In fact, the very consumption of private goods prevents someone else from enjoying those goods.
Public goods, by comparison, are funded by many and enjoyed by many. As we sit here, I’ve suggested that many hands brought you here, and I remind you that many can benefit from your talents. In Old Cabell Hall hangs an inscription: “You are here to enrich the world and you impoverish yourself if you forget the errand.” Do any of you know who authored this line?
Woodrow Wilson, in 1913. Wilson knew something about UVA, since he studied law here, and was a member of the Jefferson Society.
Wilson’s full quote goes as follows: “You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the
errand.” Four years later, Wilson would lead the US into World War I.
Despite the benefits private investments accrue, allow me to suggest that we question the private investment model, the feeling that we cannot give to others because we cannot slow down, that we might be overtaken. We should publicly invest now, even before we achieve great personal wealth. And, we can show a way forward for others to consider.
Let me share an investment that my colleagues and students at Darden have been sharing with each other. It’s an investment tip.
A few years ago, our Dean passed me a letter from an inmate at Virginia’s Pocahontas Correctional Center. The letter, which was written on a typewriter, asked if the Darden School could help this ex-offender make an affirmative change in his life. He had taken a substantial set of vocational educational courses – welding, construction trades, heating and cooling systems. Yet, he knew that his challenge would be in understanding how businesses operate. This soon to be released ex-offender knew that he would have a difficult time getting a job because many potential employers would see only the Scarlet Letter on his chest, his felony. He wondered whether we at Darden had an educational program that could help him.
This was probably the most unusual application ever received at Darden. No elite college degree, no GMAT scores, no impressive executive positions, and no check.
Yet, now five years later, I can tell you that his letter led to acceptances for many. We began teaching entrepreneurship, financial literacy and negotiations the following year. Since then, 117 ex-offenders have graduated from our programs in local men’s and women’s prisons. And as importantly, 74 Darden students have taught these programs. Our Darden students teach more than 300 hours of instructional time each year. And get this fact: this year 43 Darden students applied to teach in prison for 28 available slots. We had to make the difficult step of saying “No, you cannot go to prison this year.”
Now, why would they spend time in prisons? Couldn't Darden students be the ultimate careerist educational investors? If you asked them, they would give you a number of reasons. Weldon Diana, who pursued an MBA and a Medical Degree at the same time – talk about being
prepared – taught in prison because he felt he needed to experience a broader sweep of our population. Weldon now works in an emergency room in Baltimore where he is doing his residency at Johns Hopkins. His work in prisons helps him in his current job.
Another student, Soumya Challa, had two reasons: She wanted to improve her ability to explain difficult concepts to those who didn’t have MBAs, and she had personal questions about the size and scope of the US Corrections system. Soumya now works for a global manufacturing firm in California.
A number of military veterans have chosen to teach because they either served with exoffenders, or know folks who are now incarcerated after returning from our recent wars. One of those, Marcus Thomas, is now in a leading logistics position with the US Navy. Jake Womble, a veteran, now works for a leading bank.
Alex Black, also a veteran knew that 2/3 of women who are incarcerated are past victims of domestic violence. Alex felt that teaching business and finance might help these women escape the knowledge and financial constraints that can sometimes hold families in dangerous situations. Alex believed in a crazy idea that teaching domestic violence victims’ finance could help keep them safe.
Some of these volunteer instructors, like Jennifer Feigert or Kim Corum are past teachers with organizations like Teach for America. They’ve seen first-hand what teaching can do to transform lives, and they're now attempting to see if they can bring their talents to adults some have written off.
And I would be wrong not to recognize the effort of the ex-offenders we teach. Not only do they prepare and complete business school case studies, but they do so without laptops or excel spreadsheets. It is something to see an elaborate breakeven or cash flow model written out on paper. Or someone presenting a business plan they’ve been thinking about since they were children. And just in case you thought MBAs are the only UVA students spending time in prison, you wouldn't know about Andy Kauffman's Books Behind Bars program, where Russian Literature is taught at a Virginia Juvenile Facility.
You see, these students and colleagues are making investments of their time, but the returns aren’t necessarily going to show up in their salaries. They may show up in changes in lives that typically don't cross grounds.
Those we’ve taught live all over the country, and some even here in Charlottesville. They are gainfully employed. They are in college. Some have begun their own businesses. They have returned to their families. We call them part of our UVa and Darden family, and we mean it.
At Darden, we teach a concept called cost-benefit analysis. How much you gain versus how much it costs to get those benefits.
How many of you know about the Red Queen? Well, she is a character in Lewis Carroll’s Through the Looking Glass. Many of you will know that work as the sequel to Alice in Wonderland. For those of you who know about the Red Queen, you know that she is frantically running just to keep up, to hold her place. She’s running and running, and she is moving forward, but so is everyone around her. So, Alice’s problem is that she isn’t gaining ground on the others.
Sound familiar? Have you felt like the Red Queen? Running just to keep up. I would tell you to relax, but you all should know that while you are here, others are preparing for graduate school. I am kidding, of course.
Those of you who’ve read the story know that the Red Queen was in the race to win, and you know that she was not happy. Her subjects feared her, she was jealous and paranoid. Lewis Carroll’s children’s tale was telling us something – what are the costs to our souls of running a constant race?
Well, I also have a Red Queen story.
Three summers ago I received a phone call from a Darden alum. He had read about our effort to educate prisoners, and wanted to help out. After years of running his own Hedge Fund, he wanted to transition to something meaningful and wanted to write for our program. I had been getting calls from other alums like this one, so that wasn’t a surprise.
Then, the alum said to me, ‘there’s something else I need to tell you – I am cooperating with Federal authorities on a securities fraud case. You see, things got ahead of me in my firm, and I’ve done things that make me feel ashamed -- I want to help you.’
Now, at this moment, I’d come across something I hadn’t anticipated – someone educated, wealthy – someone who had succeeded who was also a felon. Here was someone telling me a Red Queen story, and someone wearing the Scarlet Letter. I heard true remorse in his voice, and he was asking how he could help us. I wasn’t sure what to do. It was a real test for me.
A couple of lines from one of my favorite poems comes to mind that captures this situation:
What would you think if I sang out of tune, would you stand up and walk out on me?
Lend me your ears and I’ll sing you a song, and I’ll try not to sing out of key.
Two young men from Liverpool, England wrote that one. And so, Steve Maiden began writing for our program, and over time he wrote pieces for other Darden colleagues. You see, his mistake didn’t mean he wasn’t extremely knowledgeable about finance. Or that he couldn’t help someone else. You see, those two poets had some more to say on this issue:
I get by with a little help from my friends,
Mmm, I get high with a little help from my friends,
Mmm, gonna try with a little help from my friends.
Do you need anybody?
I need somebody to love.
Could it be anybody?
Give me some body to love.
This afternoon, I’ve argued that thinking about education, as a purely financial investment should be questioned. I’ve suggested it’s narcissistic. I’ve called it individualistic. I’ve called it painful. Taken to its end, we will end up unhappy, paranoid and I suspect, a bit more like a Red Queen.
Cynic. Skeptic. Doubter. Some have said that the wise, cool person of today is all of those things– that sincere belief in something larger is outdated. It is for those who cannot hang, who cannot compete. Belief in something larger, investment in someone else isn’t for us Red Queens.
And so, I close not only asking us to question, but to show another path. I urge you to seek your profits in unusual places, and in more than your paycheck. I encourage you to make those investments now. I call on all of us here in this small Virginia town, not to simply keep up, but to show a new and better way. These public investments made by our students and faculty are investments in our whole community – on grounds and beyond.
Thanks for the opportunity to be with you today. Remember the advice of those two Liverpool poets, John Lennon and Paul McCartney: I get by with a little help from my friends. Find somebody to love.