MARK NELSON: Ladies and gentlemen, please take your seats. We're about to begin. Good afternoon, it's my pleasure to welcome you all to the Hatfield address. This is Cornell University's premiere event for the exchange of ideas between the academic and corporate communities.
My name is Mark Nelson, and I'm the Anne and Elmer Lindseth Dean of the Samuel Curtis Johnson Graduate School of Management, which resides within the Cornell SC Johnson College of Business. The Hatfield Fund for Economic Education was established in 1980 by the Continental Group Foundation to honor its retiring chair the late Bob Hatfield, Cornell class of 1937, who served as a university trustee. The fund supports not only the Hatfield address and associated events, but also the enhancement of the teaching of economics of Cornell undergraduates.
Designation as a Hatfield fellow is the highest honor that Cornell bestows an outstanding individual from the corporate sector. We're honored to welcome Sandra Peterson as Cornell's 36th Hatfield fellow in economics education. Ms. Peterson is a Cornell alumna and the former group worldwide chair of Johnson & Johnson, the world's largest health-care company. Before retiring from the company in October, she was responsible for the company's consumer and medical device businesses, which together generate approximately $40 billion in revenue. She oversaw a global supply chain, quality technological operating infrastructure, global design, and health and wellness solutions.
Additionally, she helped lead Johnson and Johnson's efforts to transform health care using technology and design thinking to create breakthrough solutions for patients, for consumers, and for providers. Ms. Peterson's portfolio included the Johnson & Johnson family of consumer companies, which generates nearly $14 billion in revenues and touches the lives of consumers worldwide through such iconic brands as-- and now visualize your medicine closet-- Johnson's Baby, Neutrogena, Listerine, Tylenol, Aveeno, and Band-Aid. Prior to joining Johnson & Johnson, Ms. Peterson was chairman and chief executive officer of Bayer CropScience AG in Germany. She had previously served as CEO of Bayer Medical Care and president of Bayer HealthCare AG's Diabetes Care Division.
Earlier she held leadership roles at Medco Health Solutions, previously known as Merck Medco, Nabisco, Whirlpool Corporation, and McKinsey and Company. Ms. Peterson is presently a member of the board of directors of Microsoft and a member of the Board of Trustees of the Institute for Advanced Study, one of the world's leading centers for theoretical research and intellectual inquiry. She is also a trustee of the American Academy in Berlin, a research and cultural institution focused on fostering a greater understanding and dialogue between citizens of the US and Germany.
Ms. Peterson has been featured multiple times in Fortune Magazine's list of the most powerful women in business. She was a founding member of Women Corporate Directors, and she is a member of Women's Forum and C200. Ms. Peterson earned her undergraduate degree from Cornell's College of Arts and Sciences, majoring in government. And she has an MPA from Princeton University. During the course of this very impressive business career, she raised two children, Jeffrey and Henry.
Jeffrey was part of one of the first cohorts to graduate from Cornell Tech. And her son Henry is a Wesleyan graduate currently pursuing an MFA in poetry. And he is with us here this evening. Please join me in welcoming the 2018 Hatfield Fellow, Sandra Peterson.
SANDRA PETERSON: Thank you. Thank you so much, Mark. And it really is a great pleasure to be here. As a proud Cornell alumnus, I actually am very aware of what this honor means and to be invited to give a Hatfield lecture. And I must say I have to thank Cornell for inviting me, but most importantly providing me with the education that made this possible.
When I was here, I recognize the extraordinary opportunity of going to Cornell. And I committed myself to a course of study that ultimately led to a successful career, studying political economy and science policy. My senior thesis was on 19th century industrialization with a focus on the German chemical industry.
I know what you're thinking. What about 18th century UK textile industrialization? Isn't that much sexier? Well, I have to tell you that's not where the money is at least that's what I realized when ironically I was named CEO of Bayer CropScience in Germany 30 years later. So that's how well Cornell prepares you to be intellectually curious and most importantly to learn from history.
Over the course of 30 years in global corporate leadership roles, I have come to value the understanding I gained at Cornell of how global business is shaped, actually propelled by economic cycles and technology breakthroughs. That knowledge has been as important in my career as any of the more conventional management and financial acumen I have developed. My Cornell education imbued me with an appreciation of cyclical economic patterns that have massive implications on domestic and international business, on communications, on global stability, governments, and national alliances, and conflicts.
But I would say that outside of the circle of economists and some historians, there is a lack of appreciation of these historical trends even though they reveal insights into the nature of volatility and change that can provide guidance to business leaders at the times that they need them most. It taught me to be mindful of the impact of technology change on business, on capital formation on governments and societies, simply put, how to win in disruption. The ability to contextualize emerging trends and see patterns is critical to leading an organization through volatile times with sound judgment and vision while meeting short term financial demands.
Understanding the forces that shape business in the immediate moment while maintaining a long view is key to developing sound strategy. When you don't know where you're going, everything is a surprise and usually not a very pleasant one. Understanding patterns allows you to anticipate, prepare for, and respond to potential events rather than overreacting to the events in the world that is without questioning experiencing tremendous disruption today. The very nature of disruption makes it more difficult to spot and interpret patterns. It is a volatile and jarring experience.
And we see many talented seasoned business executives trying to lead through disruption without the perspective to see through disruption. When that happens, business strategy is reduced to a string of reactive tactics. So of all the things that disruption damages, it's the long-term strategic vision of business leaders. Yes, we all must meet our quarterly business performance metrics. But we need to do it in the context of a longer arc of where the world is going 5, 10, or 15 years from now.
But there's another side of this. It's so important and so often missed. Just because something is disruptive does not mean it's unprecedented. And just because something is reflective of historical cycles does not mean the same solutions apply. And while seeing everything is unprecedented can have negative consequences, there is even greater risk in the alternative that has become unfortunately somewhat common. That's leadership that has the ability to recognize cycles and patterns, but then tries to manage through them with the old business playbook of the prior cycle.
To lead effectively, I believe there are three things that you need to understand. The first is that these cycles of change take longer to fully take effect than most people believe. Even in our warped speed world today, it's usually about a 50-year cycle. How business operates and value is created is very different in each of these cycles. And lastly, but perhaps most importantly, the nature of leadership must be very different to be successful in the prevailing approach that worked in the last cycle.
Now I'm not trying to suggest that leading through volatility and disruption is easy. Clearly, it's not. For one thing, disruption creates political realities business leaders must contend with, but can't control. For example, when the White House is occupied by some wealthy New Yorker, who is considered unfit and unqualified for the presidency, whose very election shocked his own party and even himself, and whose lifelong love of wealth and power invites incredible corruption to the highest levels of government, that's very hard for business to contend to. But you know who I'm talking about? Chester Arthur--
--our 21st president, who was in office at the height of the Second Industrial Revolution. Who did you think I was talking about?
So can our understanding the events that surround that time of disruption help us better understand our own time of disruption? You tell me. Dubbed the Gilded Age by Mark Twain, the Second Industrial Revolution created incredible wealth, and concentrated money and power in the hands of a small group of elite. We all know their names-- the Vanderbilts, Rockefellers, Carnegies, Melons.
They all reached prominence during this time. The same phenomenon was occurring in Europe, especially across the British empire, as well as in Germany and the Netherlands. And yet despite this creation of wealth and the stunning innovations occurring, many lives were defined by grinding poverty, violent racial conflict, mass protest, and what one journalist, Henry Demarest Lloyd, called government by campaign contribution.
Did you know that during the Industrial Revolution workers experienced a decline in living standards for almost 60 years while the income of the top 5% more than doubled? Does this sound familiar to any of you? Much of that consolidated wealth and power was catalyzed by new vast complex systems of connectivity. The railroads and shipping routes expanded the reach of commerce and allowed newly industrialized businesses to operate on 24/7 production schedules.
Those that had the wealth and the power to match this speed and scale were able to offer their goods and services much more quickly and inexpensively and at a rate and a cost that drove smaller companies out of business, making greater connectivity a business threat to older offline cottage industries. Today, we're in the middle of the digital revolution. The first phase saw the rise of computing, the internet, and mobile phones.
We are in the middle of the second phase-- the rise of artificial intelligence, cloud computing, and the growing scale of the internet of things. There will undoubtedly be a third phase at least, percolating in the engineering labs and start-ups around the world. Again, it is underpinned by a vast complex system of connectivity. But there is one core difference between the 19th century world of technology innovation and the markets that drove consumption and adoption to these new technologies in the current era. In the former, the locus of innovation and consumption was almost exclusively in the west, the US and Europe.
Today, both innovation and consumption have a larger global footprint with the rise of global innovation labs and consumption from Japan and Korea to increasingly China and to some extent India, as well is in countries like Israel and Brazil. That has implications for corporate leadership as I'll talk about in a moment. But despite all of this, many business leaders are clinging to and struggling to still deploy the business management and leadership models that were forged and formed by the forces of the Second Industrial Revolution.
It is a style of leadership born out of the turbulence and innovation of mass industrialization, and it became especially dominant in the years during and following World War II. What does that leadership model look like? Alfred P. Sloan, the CEO of General Motors, whose name graces MIT Sloan School of Business and is one of the most respected business leaders of all times said this, it is the duty of the chief executive officer to be objective and impartial. Loneliness, distance, and formality may be contrary to his temperament-- notice his. They have always been contrary to mine, but they are his duty.
For all the parallels we see between now and the Gilded Age, do you think Alfred Sloan's quote resonates as particularly appropriate to business leadership today? As millennials increasingly assume important management and leadership roles in businesses, do you think that this quote sounds like an effective means of inspiring and motivating them? To a generation that's used to open, transparent, and constant communications and connectivity, do you think this style will resonate?
During the past decade, businesses have found that they must attract, retain, and manage a very, very different type of employee. Baby boomers, I must admit like myself, who came of age during the post-war era where the Sloan MBA leadership style was enjoying its greatest success have been superseded by globally diverse millennials as the primary workforce. We've already hit the tipping point. Millennials and Generation Z-ers are groups of employees that require fundamentally different leadership approaches and expect very different things from the companies they work for.
But the fact that millennials respond better to a different management style, I believe, has driven very positive changes. Today, employees at all levels of leadership are serious. They have clearly defined expectations of business leaders. They expect you to be authentic, empathetic, consistent, and engaged in and with the world, not silently and not even just internally. In a culture that is more intensely and instantly public, employees want public reflections of the principles you believe in.
The erosion of silos does not magically stop at the comfort zones of executives. Managers can't have it both ways. Digital's ability to blur boundaries has been used for over a decade to drive greater levels of productivity and eliminate delineations between our personal and work lives. The same forces now make it impossible to hide behind the fact that maybe you just make widgets and to allow traditional business metrics alone to determine success.
If we can just take a step back as we need to do to be able to see cycles and where we are in them, we can see the growing risks organizations face when they have leaders who are struggling to listen or accept different viewpoints and perspectives. It forms a tinderbox that intensifies the damages of crises, while importantly, impeding the changes that need to be made, which increases the likelihood of a crisis. It also means that they're not listening and learning from the world around them.
So how have I experienced this in my career, and what have I learned? I thought I'd share just a couple of stories. When I first got to Bayer, it had gone through a very difficult period of crisis. In 2001, they launched a statin to lower cholesterol called Lipobay.
Unfortunately, it caused the death of muscle fibers and release of their contents into the bloodstream, which actually led to kidney failure. In Germany, there were over 1,000 cases of serious harm and several reported deaths. There were just as many in the United States. And interestingly, long before transparency and corporate social responsibility were championed as business best practices, the way Bayer publicly communicated these risks sparked enormous public outrage.
Even though they were technically in compliance with European regulations, believe it or not, they actually notified shareholders before they notified doctors and patients. As a result, particularly from the collective legal action that resulted, the company was forced to go through a massive restructuring. Bayer ended up selling off many parts of the company to get through this.
And when I joined, they had reconfigured it into a holding company with three separate operating companies. One was a material science company. One was a diversified health-care company. And the third was a crop science company. I joined the health-care company.
And in my first five years, we implemented a series of changes that transformed that business into an engine of growth and helped transform Bayer overall. Unfortunately, when you're able to achieve something like that, what ends up happening is they decide to take you from the frying pan and throw you into the fire. And that's exactly what happened to me. I was asked to head the company's crop science company. The company had a very long history of over 100 years of firsts in the agricultural field, revolutionizing crop yields all over the world.
But now when I joined that company, it was a business that had essentially missed many of the most critical technology and market shifts of the time, which was one of the reasons that it had spent the last decade underperforming. So think about that. I'm an American. I am a woman. I am not a chemist or an expert in agriculture, but I was asked to move to Germany and take over a global business of over $12 billion in revenue that had missed its numbers consistently for a decade.
I must have been crazy. I did say yes. So thankfully, I had already had experience in driving change, and I'd been able to employ approach that had worked for me both at the other parts of Bayer and in other organizations. I spent the first six months listening and learning because I was an outsider. And I had the humility to recognize that I had a lot to learn.
But what I would say is it was not an awe shucks moment. Aw, gee whiz, what do you think? Because empathy and engagement if done well are really not touchy-feely. They are active ways to determine and execute necessary changes. So for me, I actively listened and learned to ask many serious questions.
Where are the markets going? What matters? How are breakthroughs in the biological sciences going to affect this business and global agriculture, never mind, the impact of climate change? And how do you make this business less complex and make some bolder well-informed bets?
The organization was stuck. It had always done it this way. We know our customers better than they know themselves, and they'll want what we have to sell. I had to get the culture and the organization unstuck, to believe they could win again, but more importantly, reframe the business model, redefine who our customers were and what they needed and what was possible.
So my mantra became when was the last time you've been on a farm, meaning our decisions couldn't hinge on what I think is right or what you think is right but have to be informed by the most critical stakeholders we have. So I suggested we do something very crazy, experience it, put the farmer in the middle while searching in research labs and in the tech world for new solutions to age old problems of crop yield soil erosion, volatile commodity prices, and extreme weather events. While we were doing all of that, we had to get much better at the basics, focus on a few priorities that will make a difference and quite honestly stop the endless parade of PowerPoints and meetings, which are the most energy draining thing I know of.
Within a year, we had significantly improved our top line, bottom line, and working capital. And we had redefined a strategy to grow going forward. Now, I have to say if that turnaround and others like it were the extent of my experience, I don't think I'd be particularly qualified to talk about the need for a different approach to leadership. And I must say, I learned this the hard way.
Long before I got to Bayer, I was your classic super-hyper achiever. I used to wake up, put on my armor, and show up to work underneath it, hiding who I was behind my idea of what I was supposed to be, very much in the model of a CEO advocated by Alfred P. Sloan. I considered myself a good leader. I was smart. I was hard working, but my true self was never in the office.
And yes, one of the reasons was because I worked in many places where I was the only woman in the room. So to be taken seriously, I made sure that I was always very serious even though I love to laugh, I love to goof around, and I love to have fun with people. Nothing is more important to me than my family. But most people I worked with didn't know I had a family. There were no pictures of my children in my office.
I have a deep love for music, for dance, for film but nothing about me at work revealed that. I am a voracious reader, but there was never a novel in my office. I suited myself up as a stranger, very much in keeping with Alfred Sloan's philosophy, and left all traces of my personality at home. That's how I spent the first half of my professional career. And then my husband was diagnosed with stage four cancer.
It was an experience that was so overwhelming and so awful I literally didn't have the strength to conceal it. The people I worked with saw what was underneath that armor, and it was so raw and so real that even just being seen like that changed me as a person and as a leader. But what happened next changed me even more. The people I worked with responded with tremendous empathy. And I realized that they actually appreciated knowing who I really am.
When I had no choice but to drag my real self into work, I became a much better leader. When my husband got sick, and I wasn't able to work behind a front of who I was, I realized on a lot of different levels that command and control is a fallacy. Not only is it not effective, it is not really either commanding or controlling.
What an advocate may call command limits employees productivity, originality, and engagement to what you already know and want. Not a great formula for innovation, learning, and collaboration. And the employees are not achieving their full potential. They accept their limitations and become very risk averse. They don't seek out new ideas, new solutions, and new ways of looking at the business, and the needs of the customers, and the markets.
It is almost impossible for people to give their best in these circumstances. Giving your best is very personal. It means taking chances, going out on a limb, and putting in a lot of extra effort. Command and control not only disincentivizes that kind of effort, it often punishes it.
What happened? Ideas got a lot bolder and more creative. When people know that they are encouraged to think creatively, they are more likely to collaborate with others. They are able to give and receive the credit and feedback that make teams stronger because they know they're not competing in some zero sum reality game where there is always a winner and a loser. And when they connect and collaborate with each other like that, it radiates out from the team.
They speak to other teams with the same respect and openness. They engage with customers differently, and they represent your company with genuine passion and positivity everywhere they go. This is not theoretical. I have seen it time and again with remarkable consistency at Bayer, at Johnson & Johnson, and at Microsoft.
When I joined Johnson & Johnson in 2012, it had had over a decade of lackluster results. This from a company that had consistently been listed as one of the most admired in the world. This from the company that showed how to be socially responsible, who provided the business model for doing the right thing during the Tylenol crisis in the 1980s, a course that is taught I am sure still at this business school and many others around the world today.
What I found at J & J was an extraordinary company that also was stuck. Internally focused, troubled by many quality and compliance actions, and not prepared for the digital revolution.
The digital revolution was fundamentally changing how consumers engage with brands. And the retail landscape was experiencing mass disruption. But equally importantly, the digital and biological sciences revolutions were changing how human health could be understood and improved around the globe.
But J & J was struggling to harness that potential. Of course, the first order of business was to tackle many of the basic business fundamentals and reorient the culture. We had to fix the basics while engaging employees and external partners and customers. Getting people to be willing to take risks, embrace technology and new business models.
Just fixing our quality problems and improving short-term margins and profitability would have helped us for a year or two. But it was not going to sustain performance or empower J & J to be a highly successful and admired company. So once again, I started actively listening.
I talked to employees all over the world at all levels of the organization and engaged with outside companies and partners. I asked lots and lots of questions and listened intently for patterns, opportunities, and ways to inspire the employees to see a future where they would run to work because they were so excited to be impacting human health in all its aspect.
This type of engagement, collaboration, and partnership is the exact opposite of command and control, or as Alfred Sloan's distance and loneliness. One of the most powerful leadership tools is to say-- I don't know. What do you think? People usually know what needs to be done. They just need to be heard with empathy and assured that you trust them to do the right thing.
And boy, did they take doing the right thing to a level that none of us could have anticipated. We created program after program that completely changed the way in which we engage with patients, physicians, hospitals. And saved multiple lives around the world of people in ghettos in Mumbai, to people in large medical centers around the world.
These are the types of ideas and efforts that flow freely from a management style defined by active listening and empathy. And quite remarkably, today, J & J's employee engagement scores are over 90% for a population of over 125,000 people. That's an incredibly high benchmark. And it leads to these kinds of results. And just as we can't function in today's economies of speed and scale with old production systems, I really believe that we cannot succeed with old management ideologies.
So in closing, I have had the good fortune of studying the last major economic cycle that was driven by breakthroughs in science and technology, beginning in the mid to late 1800s here at Cornell. I have literally lived through the first 30 years of the current digital revolution as a leader in a number of different large and successful companies that needed to change their business models, their cultures, and how they make money to survive and thrive in a new age.
All of this has taught me a few things and made me what I think is a better leader. Hopefully those I lead feel the same way. It's critical to recognize what is part of a major economic cycle, to recognize the patterns that are constant from cycle to cycle, and learn from them. And equally importantly, what is different. These cycles are longer than most people think.
So lean forward into the future. And don't wish you can just get through it. It's like a phase, and hopefully it'll stop, and I won't have to keep changing. How businesses operate and how value is created in this new world is very different. You could not succeed if you are using rear view mirror approaches, metrics, and leadership styles.
Nor can you succeed by using leadership techniques that belong to the prior era. Leadership today in our current cycle requires intellectual curiosity, continual learning, empathy, and the willingness to be bold and experiment. Humility-- you aren't always right, and you don't know all the answers. That is the true sign of a strong leader.
To ask questions and to learn from others. If understanding economics, the impact and reach of technology and science breakthroughs, and social cycles proves anything-- especially in a world that is more connected than ever before-- it's this. The need and desire for people to collaborate, do great work, and make a difference in their own communities and in the world is not cyclical. It is a constant.
That truth is one of the most powerful and efficient drivers of success that any business can harness. But that will become increasingly difficult, if not impossible, to do with a leadership style developed for a completely different time and reality. The industrial processes today are far more global, efficient, effective, and sophisticated than the ones from 100 years ago.
And so are the expectations of people and their expectations of how we lead. So thank you very much. It's been a true honor to be here with you today. And I look forward to your questions.
MARK NELSON: Sandra, thank you so much. That was wonderful. We have some folks with microphones that are about. And I know that they are happy to help people ask questions. And I have been-- right back there.
AUDIENCE: Can you hear me?
SANDRA PETERSON: Yes.
AUDIENCE: Your comment about the cycles being on the order of 50 years kind of caught me by surprise. Because I guess in my industry, the energy industry, we think of them more as like 10 years or 5 years. I guess what occurred to me is, maybe you're referring to cycles that aren't really specific to any industry. But they're just specific to all industries and transcend all this. Maybe that's-- maybe you can elaborate.
SANDRA PETERSON: Yeah. It's a great question. So in many industries, I mean, technology is similar. They do have a shorter cycle. I mean, the agricultural industry has a shorter cycle than that. They're very cyclical businesses.
But inside those, there is a longer arc of a cycle that will be shorter cycles in it. And I think the problem, in my view, is many people think-- phew, I just got through that 10-year cycle. I'm fine. Well, the reality is, if you don't understand that this thing is going to continue and it's going to permeate other parts of industry and society in a way that you didn't anticipate if you're just looking at this shorter cycle, then you don't necessarily make the right choices.
And that's why I think that it is a longer arc. But you're right. There are shorter business cycles inside that longer arc.
MARK NELSON: OK. Other questions?
AUDIENCE: Hi. Cynthia [? Kubis, ?] Cal '78. Thank you so much for being here. I've been in pharma my entire career. And so I guess my question to you is, what changes do we in pharma need to make that we're not making to really succeed and flourish and help those patients moving forward?
SANDRA PETERSON: Oh boy, that's a big question. So the thing that I think is really interesting-- and I am not an expert. It's sort of one of these things. I've just retired. People are asking what I want to do. Maybe I'll go back and get a biology degree. I don't know.
But I think we're just at the early stages of really having breakthroughs in the biological sciences and actually understanding the human being and all of its mechanisms. When the gene was sequenced, everybody thought-- we're done, we got it, we're good. Like, we figured this thing out. Well, the reality is, that is the most simple, basic scaffolding of the human body. And we're now learning more and more.
And I think there's also this recognition that the mind-body connection is real. And I think Western medicine for years and years didn't believe it was real. So I do think that we're in the early days of understanding these things.
And I think accepting that, that it's early days-- CAR T is, everybody's all excited about it. But it's one thing. And there's probably 40 more things that we're going to learn over the next 5 to 10 years. And to me, what's interesting about this, this has all been enabled by technology.
Yes, biologists are biologists. But without the knowledge that we've learned through all these technology changes, we would not be able to be doing the kind of work that we're doing. I was recently at an event with Freeman Dyson, who's the most amazing man. He's in his 90s. He's a physicist.
And somebody asked him in the audience-- if you were starting out today, what would you do? And his comment was, well, physics and astronomy and astrophysics-- there's still some interesting problems there. But we've solved many of them. This is like the dawn of the biology age.
I would be a biologist today because there's so many interesting things. And it feels like the 1920s in physics. So I'm not sure if I answered your question, but--
MARK NELSON: We can work on that biology--
SANDRA PETERSON: The biology degree?
MARK NELSON: Yeah. We can help, yeah.
SANDRA PETERSON: Biology and math-- those are the two things I wish had studied in college.
MARK NELSON: You do both of them.
SANDRA PETERSON: I know you do.
MARK NELSON: It's great. Who else? There's one over here.
AUDIENCE: You've been managing large global teams. Can you talk about some of the tools that you're using to really effectively create cross-cultural collaboration?
SANDRA PETERSON: It's a really terrific question. I mean, it starts with mindset. And I think it's-- I've spent most of my career working in large global organizations. And people do dumb things that disincentivize collaboration.
If you schedule every meeting at 9:00 AM in the east coast, your colleagues in Asia are up all night long. And so you have to become very sensitive to different cultures and how people work and live. And one of the ways that I've done it-- we try very often in many of these organizations that I've worked in. Let's put people from different cultures on teams together.
One of things-- I mentioned this thing about innovation. It does not reside just in the Western world anymore. I've moved global headquarters of R&D in businesses to other parts of the world where the markets were going to become the biggest, most important.
And it did two things. It was a massively symbolic thing to the organization. And then it also allowed the people who lived in that part of the world to end up in the bigger leadership jobs. Because we didn't expat people into those parts of the organization.
But I think it's really-- I mean, I'm a huge proponent of diversity in all of its form because you get better problem solving. But you have to be vigilant about it all the time and make sure you're mixing teams up. You're sending people, if they're able to, around the world.
But if you're not able to send them around the world, you can put them on teams that are global teams so they get that kind of exposure. And again, technology makes it a lot easier. You can Skype with people.
You can do collaborative teaming tools. It makes it a lot easier to get these teams to work together than-- you used to have to get on an airplane for hours and hours and hours and always be jet lagged. That was pretty hard.
AUDIENCE: Hi, I'm Renee Miller-Mizia, class of '81 and parent of two millennials from Cornell, class of '09 and '12. I also lead a team, a large team of millennials, who sit on five continents. So your comments about how you manage and connect with them really, really struck home.
But I wanted to go back to something you said in the beginning about patterns and looking at patterns in different economies in different places around the world. And I'm curious as to the patterns that you're seeing right now. The most encouraging ones, some of the most challenging ones, may be here and in Europe-- or elsewhere.
SANDRA PETERSON: Well, first of all, I do think we are continuing to make progress, despite what it feels like at the moment to many of us both socially and governmentally. Because there are some things that-- it's one of these classic things. Three steps forward, and there's a reaction to it, which is a negative reaction.
But I actually do think, if you go around the world, the people getting out of poverty and having access-- and women in particular, quite honestly. I mean, despite the problems and #MeToo and everything else, there has been massive progress in the last 30 years. And I don't believe that that is really going to go backwards. Because I just don't believe that, based on everything I've seen, that that's going to go backwards in any way, shape, or form.
But one of the other patterns that is a common pattern is, new technologies come up. And everybody gets all excited and says-- oh, well, this is only going to be used for good. And isn't this wonderful? And it's going to revolutionize the world.
Well, that was what was going on in the '20s and '30s until some of those technologies got into the wrong hands, right? And no offense to my technology colleagues, but there was a lot of naivete about technology will only be used for good. And I actually think this argument and debate that's going on right now about social media-- AI, putting regulatory frameworks around these things, getting clarity about what should and should not be done-- is actually a very healthy thing that's happening.
And that is a pattern. Technology does this all the time. So I actually think that is a very healthy thing that we do those sorts of things.
And I don't know. Maybe I'm the ultimate optimist. If you're a student of history also, we've been here before in this current environment many, many times, particularly in this country. And we've gotten out of it every time, so--
MARK NELSON: There's one over here.
AUDIENCE: Hi, my name is [INAUDIBLE], Arts and Sciences, class of 2013. So I work in management consulting, particularly on topics of AI, how to help my clients go through the second wave of the digital revolution.
One thing I'm worried about though in my heart of hearts is what the promise of AI has. Sort of it's a double edged sword, right? Efficiency, but also might eliminate huge swaths of the market.
What does the future look like when transportation is fully automated, when a lot of our jobs are fully automated? So I guess, what advice would you give? Or how would you help leaders think about the future when that is coming to fruition? And how should they manage through that?
SANDRA PETERSON: Well, that's happened before, right? And so I think the trick is, is how do we retrain people? I think as leaders-- both business leaders, government leaders-- how do we sort of, say, how do we prepare people for a new future?
I mean, there are jobs that will be created that we don't even know what they are today. We do know today-- and maybe this will change-- that AI tools, robotics, machine learning has no ability to understand empathy, has no ability to know consciousness. And there are a lot of jobs where people still need to interact with a human being who can respond to them in different ways.
So I do believe that, yes, there will be large swaths of jobs that will go away. But I think it's up to us as a society to figure out how we don't just leave them. Which is, quite honestly, what happened in the second Industrial Revolution. Most people just got left to fend for themselves.
And that's why economic destruction happened and people's standards of living declined. But ultimately, we got out of it. It would be good if we managed this in a slightly different way this time around and help people through those transitions.
So but I think part of the challenge you have with that is, what are we training them for? They don't exist. What will that look like in the future? But those things will exist in the future.
MARK NELSON: OK. Yeah. One more?
AUDIENCE: Thank you. Hi. Sarah Kennedy, class of 2010. You mentioned that millennials have some very different expectations in the workplace. And I would agree. What are some specific or concrete ways that you have brought early career millennials, who typically have low rank or low authoritative power, how have you brought them into your inner sphere of influence?
SANDRA PETERSON: So one of the things I always do-- and sometimes it kind of annoys my direct reports-- is I usually drop five levels down in an organization and get people who are way down in the organization on teams. Because they look at things differently. And they're willing to ask the questions that the other people aren't willing to ask.
And so it does two things. First of all, it gets us to have a better conversation. They're the future customer anyway. So they can engage and talk about what they care about because they're the target audience, so to speak.
But I also think it helps them to see what is doable and not doable. Because the other problem is, if you are a very-- you know, one time I was one of these. I was 28 years old. I was like, why aren't they doing this? This is the right answer. What the hell is wrong with these people?
And I think it helps both sides sort of see why it's harder to make certain choices or how decision making gets done in a context. So I am a big believer not just in cultural diversity, gender diversity, but level and age and experience diversity. Because I think it really makes the dialogue better.
And it's amazing when you take somebody who's very junior in the organization. You pluck them out and say, OK, I want you to run with this thing. And you're in charge. I mean, that boundless energy and enthusiasm to prove to everybody that they're up to the task is just so much fun to see.
MARK NELSON: Thank you so much.
SANDRA PETERSON: Thank you, Mark. Thank you. Thank you all. Thank you for the honor.
MARK NELSON: We have a little something.
SANDRA PETERSON: Ah.
MARK NELSON: This is for you.
SANDRA PETERSON: Thank you.
MARK NELSON: So you have something to remember Cornell by. So thank you very much.
SANDRA PETERSON: How could you forget this tower? Thank you, Mark.
MARK NELSON: Thank you.
SANDRA PETERSON: Thank you.
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Sandra E. Peterson ’80, the 36th Robert S. Hatfield Fellow in Economic Education, emphasized the importance of noticing economic trends and disruptions as part of an overarching historical cycle – and being prepared to meet these changes – in her Nov. 1 lecture.
"When you don’t know where you are going, everything is a surprise, and usually not a very pleasant one," she said, noting that when leaders are unable to acknowledge and strategize for disruption, they are reduced to reacting to unanticipated events.
Until her retirement this fall, Peterson was group worldwide chair for Johnson & Johnson, the world’s largest health care company. She has previously served as CEO of Bayer CropScience AG in Germany, CEO of Bayer Medical Care and president of Bayer HealthCare AG’s Diabetes Care Division. She is a member of the board of directors of Microsoft and of the Institute for Advanced Study and has appeared on Fortune magazine’s list of most powerful women.