June 12, 2010

Kindness is free and turns a profit, business guru Tom Peters '64 says in Olin Lecture

The business of America is business, and such research universities as Cornell would not exist without private-sector funding -- but good business is the result of kindness, courtesy and sweating the details, said Tom Peters '64 in the Olin Lecture June 11 at Bailey Hall during Reunion Weekend.

In 1982, Peters co-authored "In Search of Excellence," the best-seller that immediately launched him as a foremost business management guru. The lecture was preceded by a book-signing of Peters' most recent book, "The Little Big Things: 163 Ways to Pursue Excellence" (2010).

Interlacing passion and humor, Peters commented on the recent "black eyes" business has given itself, most notably the BP oil spill in the Gulf of Mexico. Yet he asserted that "business can be done right; it can be done with integrity; it can be done with transparency; and in fact, business is at its best that way."

He posed the essence of his new book as an equation: K=R=P, or "kindness equals repeat business equals profit." "You never make money on the first transaction," he said. "You make it on the seventh and the eighth and the ninth. ... Decency, kindness and thoughtfulness are what bring people back."

Drawing on anecdotes, research findings and other authors to illustrate the "little big things" that lead to business success, Peters highlighted Howard Schultz, founder of Starbucks, who visits at least 25 Starbucks shops each week to make sure that customers are treated well; hotelier Conrad Hilton, who stressed the importance of details by once saying to a large audience, "Don't forget to tuck the shower curtain into the bathtub"; and Herb Kelleher, founder of Southwest Airlines, who advocated treating employees as customers.

"If you want to treat the customer first, you must treat the employee who treats the customer even more first," Peters said.

He used a quote from author and columnist Peggy Noonan to illustrate his 163rd "little big thing": "In a way, the world is a great liar. It shows you it worships and admires money, but at the end of the day it doesn't. ... We don't say, 'The thing about Joe was that he was rich.' We say, if we can, 'The thing about Joe was that he took care of people.'"

"It was a great speech -- Peters was right on," said Judy Davidson '65, during the standing ovation that followed Peters' remarks.

Earlier in the day, Peters said that he would advise Cornell's recently graduated seniors to excel at the basics, regardless of the nature of their first job. "Nobody cares much about what the substance is of what you do for the first two to three years," he said. "Do you come to work on time? Do you work hard? Do you get along with your peers?"

Peters is a civil engineering graduate of Cornell (B.C.E., M.C.E.) and earned an MBA and Ph.D. at Stanford University. He served in the U.S. Navy, deployed to Vietnam as a combat engineer in the Navy Seabees and worked in the Pentagon, as a White House drug-abuse adviser, and at McKinsey & Co. In the past three decades, since his best-selling 1982 book, Peters has given more than 3,000 seminars across the world, reaching an estimated 3 million people.

The Olin Lecture was established at Cornell in 1986 through a gift from the Spencer T. and Ann W. Olin Foundation, annually bringing to campus an internationally prominent speaker to address a topic relevant to higher education and the current world situation.