Thanks to Michael Covel for sending this our way. It is highly recommended reading:
Thank you, President Knapp, members of the faculty, administration, the class of 1989, its family and friends.
President Knapp has drawn attention to the fact that much of my life and career have been involved with taking risks. It’s the sort of introduction which usually arches a few eyebrows. A person who takes risks for a living calls up the image of a riverboat gambler, someone who lives on the edge — in the chips today, down on his luck tomorrow.
From an early age, we are all conditioned by our families, our schools, and virtually every other shaping force in our society to avoid risk. To take risks is inadvisable; to play it safe is the counsel we are accustomed both to receiving and to passing on. In the conventional wisdom, risk is asymmetrical: it has only one side, the bad side. In my experience — and all I presume to offer you today is observations drawn on my own experience, which is hardly the wisdom of the ages — in my experience, this conventional view of risk is shortsighted and often simply mistaken.
My first observation is that successful people understand that risk, properly conceived, is often highly productive rather than something to avoid. They appreciate that risk is an advantage to be used rather than a pitfall to be skirted. Such people understand that taking calculated risks is quite different from being rash.
This view of risk is not only unorthodox, it is paradoxical — the first of several paradoxes which I’m going to present to you today. This one might be encapsulated as follows: playing it safe is dangerous. Far more often than you would realize, the real risk in life turns out to be the refusal to take a risk. In other words, the truly most threatening dangers usually arise when you shrink from confronting what only appear to be the most threatening dangers. What is widely regarded as “playing it safe’ turns out not to be safe at all.
I’m suggesting that you take a positive view of risk. This is not a suggestion addressed only to those of you who may be planning a career in financial services, or for that matter even a career in business. It’s addressed to everyone, regardless of career plans, because my main interest is not your careers. My focus is — and yours should be — on what you do with your lives.
Whatever you may think at this point, choices about your career and choices about your life are not automatically the same choices. You have probably given a good deal more thought to your career than you have to your life. I’m suggesting that you take more time to think about your life, even though your thoughts won’t by any means be irrelevant to your career.
What I’m offering here is not a sure–fire, guaranteed formula for success. No such formula exists. It never will. If anyone ever tries to sell you one, keep your money in your pocket. For life, above all else, is a risk. I’m not trying to dispel that risk with a bottle of Charlie Sanford’s Magic Elixir. I can only arm you with a little food for thought. I do have a few suggestions. You may not wish to follow them. But if you’ll think about them, I’ll consider our time together most productively spent.
We all know that modern civilization owes much to the ancient Greeks. As the 20th century draws to a close, it’s difficult to single out a Greek thinker who speaks more directly to us than Heraclitus. “All is flux, nothing stays still,” said Heraclitus some twenty–five hundred years ago. “Nothing endures but change.”
Most of us have come to believe that “nothing endures but change,” but its consequences still deserve some reflection. Obviously, if change is the fundamental rule of life, then resistance to change is folly — doomed to defeat. Just as obviously, if change is our constant, then uncertainty is an inescapable part of our lives. Uncertainty is unavoidable. Life is unpredictable. The very essence of life is the unexpected and the unintended, the unanticipated turns which we may metaphorically ascribe to Fate or Destiny or Providence.
Therefore, unless we wish to be tossed about like so much flotsam on the waves of inescapable change, we must place ourselves squarely in the midst of change. We must learn to ride the current of change rather than to swim against it — although people who haven’t taken the trouble to learn how the world really works will think we’re doing exactly the opposite.
In other words, risk is commonly thought of as going against the current, taking the hard way against high odds. In a world of constant change, however, a world where Heracllitus said we can never step into the same river twice, taking risks is accepting the flow of change and aligning ourselves with it. Remember the first paradox: risk only looks like reckless endangerment. For those who understand reality, risk is actually the safest way to cope with a changing, uncertain world.
To take a risk is indeed to plunge into circumstances we cannot absolutely control. But the fact is that the only circumstances in this life that we can absolutely control are so relatively few and so utterly trivial as hardly to be worth the effort. Besides, the absence of absolute control — which is impossible in any case — does not entail the absence of any control, or even significant control.
There, again, is the paradox: in a world of constant change, risk is actually a form of safety, because it accepts that world for what it is. Conventional safety is where the danger really lies, because it denies and resists that world.
I trust you understand that when I say risk is actually safety, I’m talking about a certain sort of risk. I’m not advising that you leap off tall buildings in the hope that the operation of constant change will reverse the law of gravity in mid–flight. I’m speaking rather of a sort of risk which actually aligns you with the direction of change.
To be more specific, I believe firmly that the sort of risks which put one in a position to control ones lot in a world of incessant change are the risks which attempt to add something of value to that world. To create value, to focus ones efforts on increasing the fund of that which is worthwhile, involves (as we shall see) a sort of risk. And yet, paradoxically, it provides you with the greatest control over a changing world and maximizes your chances to achieve a truly meaningful personal satisfaction.
When I use words like “good” and “value” of course, I’m squarely in the arena of opinion. But what I’m talking about here is not really the margins of controversy, where reasonable people might be expected to disagree. By “good” I’m referring to those fairly broad ranges of behavior upon which we would all, I suspect, agree: whether it’s running a business which creates jobs, or working in a laboratory to discover a cure for cancer or AIDS, or trying to rationalize the distribution of the world’s food supply, or teaching young people, or any one of hundreds of other similar things.
I think we could agree not only on most things which are “good” and “valuable,” but that we could also agree on this: creating value is not the way that all, or even most, people choose to pursue their lives. The value which far too many people seek to create is the one from which they alone benefit. We could call these people selfish, I suppose, but I think there’s something larger at stake. People who are out only for themselves, who size up “the system” and then try to get the most they can out of it by whatever means, are making a fundamental error of observation. For they believe that “the system” is something destined to last forever, that the boss to whom they toady is irreplaceable. Such people believe they are riding the crest of something they call “public opinion,” which shifts so quickly and unpredictably, when in fact they are slaves to it — doomed to the shallowness of the conventional wisdom.
If pure self–seeking is so pervasive, it’s because those who seek only for themselves imagine that they are the whole world. If they are satisfied, then the world is by definition satisfied. But mere self–satisfaction is, in our paradoxical world, never satisfying. A famous financier understood this when he asked and answered his own rhetorical question: “When does a man have enough money? When he makes his next million.” Time and time again, we find that the people who are truly satisfied and enriched in this life, the ones who have achieved what is indisputably happiness, are the ones who have sought to create value for others. There is simply no arguing away the paradox of risk: if you fly in the face of conventional wisdom and take the risk of committing yourself to creating value for others, you are taking a large step toward insuring your own happiness and achieving a more meaningful safety.
It’s easy enough to deride this advice from a vantage point of false pragmatism. All I’m offering, runs this criticism, is a refurbished bleeding heart do–gooderism that urges people to go out and save the world. This address, some of you may say, is nothing more than a thinly disguised appeal to idealism, nobility, and self–sacrifice. And you would be right. In my personal view, our world could stand a little saving. And, as a native Georgian and a graduate of this university, I naturally believe deeply in idealism, nobility, and self–sacrifice.
But that does not exhaust my appeal. Here we encounter another paradox, the second one I want to bring to your attention. It runs like this: you serve yourself by serving others. Committing your life to creating value is in your own immediate and direct self–interest. There is nothing that you can do which will redound to your own personal benefit more than dedicating yourself to something larger than your own personal benefit.
Increasing the size of the pie — whether the pie is conceived of as wealth, or health, or knowledge increases the size of the individual slice. As the saying goes, “A rising tide lifts all boats.”
But even more important, the creation of value leads directly to personal satisfaction. It leads to the awareness that you’ve done something worthwhile with your life. It fosters the sort of inner peace which unfortunately appears to be alarmingly scarce in our world.
I told you that I’m not handing out magic elixir. I’m not handing out hair shirts, either. I’m not advising a life of utter self–denial. I’m not suggesting that there is anything tainted about seeking material rewards. Instead, I’m suggesting that those pursuits are perfectly consistent with a commitment to creating value. Or, rather, I’m suggesting that pursuing material rewards is likely to be more successful when it is wedded to a commitment to creating value. The reason for that is simple: in the process, it is wedded to something greater than one’s own self.
In the end, you’ll find there is more happiness in creating value for others and enjoying the benefits, both material and psychological, that flow to you, than there is in only adding to your own net worth. It’s that simple. When we create value for others, we do not personally take in all the value we have created — and that, the people who have done so say again and again, is a source of incomparable satisfaction. Actually, the implications are encouraging, for they suggest (amidst all the headlines about greed and ego–centrism) that there is a nugget of altruism in our natures — buried deeply, perhaps, but still accessible.
It should be clear by now that your success in creating value and achieving personal satisfaction does not really depend upon what career you choose. These things are possible in practically any career. What’s vital is the state of mind in which you proceed.
You will have to use your imagination. You’ll have to think, and think for yourself, as creatively as you can. Simply “doing what you’re told” will only achieve other people’s goals. As a result, you will find yourself having to do things differently from some of the people around you — occasionally, it will be different from most of the people around you. That won’t be as easy as it sounds: working your way against the conventional wisdom never is. It may be easier if you think of it as a kind of dare, and accept it.
You will often find yourself in competitive positions, and there is really only one way to handle those situations: being completely honest. I’m not just talking about adhering to the dictates of the law or professional ethics, which must be done as a matter of course. I mean honestly facing and dealing with the facts that any competitive situation presents, no matter how painful those facts may be. No amount of blinking or embroidery or shortcuts or rationalizations will substitute.
You will have to work hard, of course, which means not only long hours but tough decisions. But at the same time, you must remember that hard work doesn’t qualify you to think you’re the only person around you working hard. In other words, if you lose your sense of humor and take yourself too seriously — if you squeeze all the fun right out of whatever you’re doing — you only defeat your larger purpose. Have confidence that what you’re doing is worthwhile and important. But don’t let it escalate into an arrogance which presumes it’s the only worthwhile thing to do.
I’m sure that every collegiate generation has two or three books which capture and help shape its imagination. In my own generation, during the late 1950s, one such book was The Lonely Crowd, by the sociologist David Reisman. Everything I’ve been saying about “state of mind” can be found in Reisman’s analysis.
Reisman was fascinated by the phenomenon of “conformity” in the 1950s, a concern that preoccupied many social commentators of that decade. For Reisman, “conformity” sprang from a mentality which took its lead from other people, a mentality which looked to one’s social environment for cues to appropriate behavior and values. In this view, people who are motivated primarily by a desire to conform to their surroundings lacked strong inner resources. They are basically hollow, unable or unwilling to set their own goals or establish their own standards. Instead, they seek to mimic the goals and standards of people around them in order to win those peoples approval. The approval of others, rather than any personal aim, becomes the highest satisfaction. Reisman called such people “other–directed” — that is, they direct their lives towards the values of other people.
The opposite sort of person, whom Reisman found to be as rare as the other–directed person was distressingly common, he called “inner–directed.” By that, he meant someone with a strong sense of self, an identity built from within, someone who established a personal agenda and direction. The inner–directed person was not so much an angry maverick, motivated by negative attitudes toward the world, as an individualist determined to find his or her own way for personal reasons and in search of personal satisfactions.
Today, I still believe the inner–directed persons have the best–and perhaps the only– opportunity for true personal fulfillment. For in my experience, at least, inner–directed persons–the ones who establish their own agenda and pursue their own happiness–find themselves dedicated to creating value, to working for the betterment of people other than themselves and passing much of that value on to those people.
My own definition of inner–directedness brings us to the third paradox: you gain personally by giving yourself up. I believe that if you search within yourself, you’ll find things far more important than yourself. I believe you’ll discover a vast expanse of spiritual values which dwarf the significance of the individual — values which I personally sum up in the word “God.” But whatever you may call these values, and however you may see them, I believe they prompt the individual to dedicate himself to M9″ 4~11 something much larger than himself. That dedication, I am certain, is a roundly stabilizing force in life. And, believe me, when times get tough, when you really have made a mistake, that stabilizing influence is a welcome and necessary one.
You will note that in all this talk of “state of mind” I have not mentioned “quality of mind” or intelligence. That is simply because I don’t believe that unusual intelligence, an off–the–graph I.Q., is necessary to create value and achieve personal satisfaction. There are a few people who are mentally gifted far beyond the norm, just as there are a few who are physically gifted in the same way. But that particular quality doesn’t mean that they will achieve any greater amount or level of personal fulfillment.
When you combine inner–directedness with the commitment to create value, you can achieve great worldly success, enormous career attainments. But it is the combining that is critical. I think this is what Leonardo da Vinci had in mind when he wrote: “The painter will produce pictures of little merit if he takes the works of others as his standard; but if he will apply himself to learn from the objects of nature, he will produce good results . . . he who has access to the fountain does not go to the water–pot.” I wish it were all as simple as saying: “I will dedicate myself to creating value. I will draw upon my inner resources and my own aspirations.” Unfortunately, but inescapably, all the while that you are saying this, there are forces emanating from the darker side of human nature pulling against you.
Some of those forces will express themselves through other people. There will be people who are envious of your success and, not knowing how to achieve it themselves, will try to ruin yours. There will be people whose own will to power will never be satisfied unless they exercise control over you and bend you into an other–directed person — directed, that is, toward them.
If such people pose a serious challenge, however, it is nothing like the challenges that will come from within yourself. For, as humans, you share in the darker side of human nature. In yourselves, it is bound to express itself from time to time as inertia, or just plain laziness, or a legitimate satisfaction with short–term achievements which makes you put aside your long–term goals. You may feel fine when things are going well, when the currents of change are playing into your hands. You may not feel so fine when change continues, perhaps frustrating your plans with unexpected developments and unintended consequences. If you ever forget that change is the way of the world, such frustrations may defeat you.
The fallibility and the flaws of human nature — the things that make life really tough — may sneak up on you in another way, by pushing you to extremes of behavior. Everyone, I regret to say, is abundantly familiar with some of those extremes, the ones to which we are driven by self–interest. They are sometimes familiar by personal experience, and certainly by well–known example.
Self–interest is an authentic human impulse, but (like most things) when taken to extremes it is almost uniformly destructive. Self–interest, properly conceived and controlled, is not only a natural motive. It is the very motor of capitalism. But a runaway self–interest, which erects greed into a totem to be worshipped, is — as many authors have noted — the potentially self–destructive seed buried within capitalism. In my judgment, few people start out devoting their lives exclusively to pure self–interest. But it’s a seductive siren, one whose song may sound especially sweet in tough times and amidst personal frustration in the quest to create value.
Self–interest run rampant has destroyed careers, from financiers trading on inside information to athletes using illegal drugs. But it has also destroyed nations, which mindlessly seek to extend their power or build protectionist walls around themselves in the illusion that those walls will shelter them, rather than suffocate and isolate them.
It’s time for the fourth and final paradox: true boldness lies in moderation. As pleasant as it would be to claim credit for this insight, I have to admit that another Greek, Aristotle, beat me to it by twenty–five hundred years. In any case, there is a role for self–interest, but it must be tempered by a respect for the needs of the community. And it is equally possible to veer too far in that direction as well. Countless utopian experiments have run aground on these shoals, from Brook Farm and its heirs among the communal experiments of the 1960s to certain contemporary communities of religious fanaticism.
There is a balance to be achieved here, and it’s not easy. If it were, everyone would have done it. There are times when you must go to the edge, follow your own vision regardless of the conventional wisdom and take positions that may, to other people, appear extreme. By the same token, you must also understand that the lure of extremism per se can sabotage your goals of satisfaction, fulfillment, and personal rewards. There is no advance prescription which anyone will write you that says when you must do one or the other. You must take the responsibility of setting your own course and live with the uncertainties of that responsibility in a world of constant change. Your only consolation is that letting someone else set your course and prescribe your decisions will surely deprive you of satisfaction and success.
Life is characterized by change, but that doesn’t mean it’s chaotic. In fact, it is a system, and we are all a part of it. Adding value to that system will also add to its changes. But at the same time, even as you add socially productive value to the system, you need to preserve its essential stability, in order to have some identifiable framework within which you can operate.
The boat we are all in is being driven by currents which flow from forces larger than ourselves. We must both ride the currents and preserve the boat. Nobody can stem those currents, just as nobody benefits if the boat goes under. The life of grace, that is to say, is the life that is lived for the future. The beginning of wisdom is the understanding that human history was not designed to culminate in, and for, you. The second step is the appreciation that life is often ambiguous, indeed — as I’ve argued here — paradoxical. You’ll know you’ve taken that second step when you believe — not because I said so, but because your own experience tells you — that playing it safe is dangerous, that you serve yourself by serving others, that you gain yourself when you give up your personal significance, and that boldness lies in moderation.
This occasion today is special for everyone here, and for no one more than myself. It represents not only a return to the university from which I graduated, and with which I have retained close ties. It provides me an opportunity to speak to you while standing on what I, at least, think of as hallowed ground. I trust you’ll forgive me for being a little sentimental under the circumstances. But the fact that the structure in which we are holding this ceremony is named for my grandfather has significance for me beyond the pull of family feeling.
The observations I have passed along today are rooted in a life that, I am very grateful to say, has been rich with a variety of experiences and opportunities. But one important source of inspiration behind the way that I look at the world is in fact my grandfather. Steadman Vincent Sanford was more than President of this campus and later Chancellor of the University system during the 1930s and `40s. He was, for me, an early and powerful embodiment of what I regard as the most important rules of life.
My grandfather took risks, constantly, and he dedicated his life to the creation of values for others. Most of the value he created he passed on to others. The satisfaction he gained from this life was enormous, beyond quantifying, although I could see how much it gave him. If I have understood anything of life, if I have had the advantage of living with some principles which gave me the opportunity for personal happiness and satisfaction, I owe it in the first instance to him. Passing on to you today what he taught me, by the example of his life, is the best homage to him that I could offer.
Charles S. Sanford, Jr., a 1958 graduate of the University of Georgia, is the retired chairman and chief executive officer of Bankers Trust Corporation. In 1997, the Terry College of Business dedicated Sanford Hall in recognition of the significant contributions made to the Terry College and the University of Georgia by Charles and Mary Sanford. He has served as a trustee of the University of Georgia Foundation since 1986, and his family’s association with the University spans many generations, dating as far back as 1835.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.