ay 04 2009

W. Steve Albrecht

I'm honored to be with you this afternoon. Congratulations on the hard work that qualifies you to be here. You will never be sorry you attended the Marriott School, and you will always be grateful you persisted to graduation.

I am grateful to Gary Cornia, our dean, who asked me to speak today. He is and will be a great dean in the Marriott School. I am also grateful for the opportunity I had to serve in the Dean's Office during the past ten years with Ned Hill, Lee Perry, and Michael Thompson. I learned much from them. They are great academics and stalwart men of God.

In my few minutes today, I'd like to use a metaphor of angels and triangles to teach you six important lessons.

I am a professor at BYU because of four angels in my life.

I grew up in a small town in southern Utah. I had two older brothers and an older sister, none of whom attended college for more than a few months. My family wasn't active in the LDS Church. The first two angels were close friends who enrolled in BYU. Because they studied here, I came with them. Once at BYU, I was immersed in BYU wards and exposed to outstanding professors who modeled through their examples and labeled through their teaching what they believed. My life started to change.

After one year, my two friends and everyone else on my John Hall Dorm floor left to serve missions. While I didn't yet have a strong testimony, I decided to serve also. I was called to Japan--or the Northern Far East Mission, as it was called back then. On my mission, I learned the gospel and worked with smart young men and women, most of whom were BYU students. My life continued to change.

After my mission, I returned to BYU and graduated with a degree in accountancy. I can honestly say that BYU and my mission helped me gain a strong testimony, define who I was, realize what kind of wife I would marry, and commit that I would always have a gospel-active family. Today I pay tribute to those two close high school friends and to BYU and my mission for helping me define myself. The first lesson to be learned from my message today: always choose good friends and be found in positive places and good things will happen to you.

Upon graduation from BYU, I worked for an international CPA firm in Salt Lake City. One year later, my wife, LeAnn, who had joined the church as an eighteen year old in Milwaukee, Wisconsin, and I decided to visit her parents. It was August 1972.

While there, we decided to drive to Madison to visit LeAnn's former baton twirling teacher. Not interested in reminiscing about baton twirling (about which I knew nothing), I decided to explore the University of Wisconsin, a decision that introduced me to a third angel who totally changed my life.

Walking through the business school, I met Jim Bower, an accounting professor. He could tell I was new to campus and stopped to ask if he could help me. After learning that I was thinking about a future MBA, he invited me into his office. After a call to BYU verifying my grades, he admitted me to Wisconsin's MBA program and gave me a teaching assistantship for the school year that started in three weeks--all this happened before I left his office.

LeAnn and I returned to Utah, sold our mobile home, and took a leave of absence from my job; twenty days later, I was back in Madison working on an MBA.

The first day of school, Professor Bower again called me into his office. This time he asked if I was interested in pursuing a PhD in addition to the MBA. Since I had only attended college because my friends did, I had no idea what a PhD was. After he explained that it would take three to four years to earn a PhD, I said I wasn't interested. He said, "Let's just fill your MBA core requirements with PhD courses in case you change your mind." That day, he enrolled me in PhD statistics instead of MBA statistics, a PhD research seminar instead of another MBA class, and so forth. Three years later, I graduated from the University of Wisconsin with both my MBA and PhD. To this day, I have never applied to graduate school.

I am a business professor because of the interest a caring person showed me. Professor Bower was an angel, and I will forever be grateful to him. He taught me that by stopping to help we can be angels to others. To Jim Bower, I say thanks for opening doors and worlds that would never have been possible without your help. The second lesson: always stop to help others; you may change--or even save--their lives.

The fourth angel in my life is my wife, LeAnn, who I first met as a sister in my family home evening group at BYU. She has been a caring wife and great mother to our children. Without complete trust and confidence in her as a mother, I could never have been involved in the professional activities in which I have engaged. She is my best friend, and most of what I am today, I owe to her and her great support. The third lesson: always attend family home evening and marry above yourself. It's much easier to be pulled up rather than down.

While I accidently fell into my career as a professor, I have had marvelous opportunities. Not only have I been able to teach great students and conduct interesting research, I've also had opportunities to consult, be an expert witness, and serve in leadership positions and on boards of directors of major U.S. companies. In those roles, I have worked with very successful people. Watching them, I have observed a success model I'd like to share with you.

Thirty years ago, with some other BYU faculty members, I helped introduce into the business and accounting research literature something known as the fraud triangle. That triangle is now embedded in accounting standards and used by businesses, researchers, professionals, and others. Because of its success, I am quite fond of triangles.

Picture in your mind a triangle--on one side is the word "education," on the second side are the words "personal character," and on the third side are the words "gospel-centered living." Let's talk about these words.

First, education. The degree you are getting today is important but mostly just for your first job. I congratulate you on receiving the best business degree you can by studying at BYU. The Marriott School has top faculty, great students, wonderful alumni and recruiter support, and outstanding curricula. Not having a good education is a barrier to entry for most great opportunities, but it is only a commencement--or beginning--and is not sufficient.

In addition to your degree, there are three education-related tasks I would encourage you to accomplish. First, you must continue to develop better and better technology and communication skills. We live in a knowledge-based world. I'm amazed at the abilities of the people with whom I work in the companies where I serve as a board member. They are excellent communicators with great technology skills. They are constantly writing convincing emails, making outstanding presentations, preparing complicated spreadsheets, writing position papers, and interacting with investors, creditors, and bankers.

Second, you must always be learning--you must stay current. When I graduated from BYU, there were fifteen standards that comprised the accounting literature of the day. Most of those have now been superseded, and we now have more than 160 FASB standards as well as numerous SEC releases and other standards. If I were to practice accounting today based on what I learned as a student, I would quickly be sued for malpractice. Your formal education is only the beginning.

Third, I would encourage you to develop a professional expertise. You will be more successful if you do--you can become the best technologically, the most creative, have the best technical or industry knowledge, or develop some other expertise. But you must distinguish yourself some way. Personally, I am known as a fraud expert. In reality, I probably don't know any more than others about fraud, but people think I do and that's all that is important. Because people think I am a fraud expert, I have received numerous professional opportunities. I was recently asked to be an expert witness in the Bernard Madoff fraud case in New York, the largest fraud case in history.

The fourth lesson comes from this first side of the triangle: consider your degree a commencement of your education, not the end, and do everything possible to develop good communication and technology skills; stay current and build a professional expertise.

The second side of the triangle represents personal character. While your degree is critical in helping you land your first job, after that, it is your personal characteristics and your ability to stay current and distinguish yourself that will most determine how successful you are. Let's talk frankly about six personal characteristics that define successful people. (There are many other characteristics that are important, but I only have time to mention six.)

First, you must be ambitious--if you aren't, you can kiss success goodbye. I'm constantly amazed at how hard people work in the business world. You should always do more than your share on any assignment and not worry about who gets the credit. I received this advice early from a mentor, and it has made a huge difference in my life. After a while, people will want you on their team, your ambition and contributions will become known, and you will be the most valued employee and team member. While your family and the church should be most important in your life, don't use them as excuses not to work hard.

Second, you must be able to work well with others, both as a leader and follower. Four years ago, the CEO of a company and I, the audit committee chair, terminated a very talented CFO. He was extremely bright, communicated well with Wall Street, but he had two critical personality faults: he always thought he was the smartest guy in the room and, therefore, had a difficult time listening to and valuing others' opinions. The second fault was he wanted to do everything himself and didn't know how to delegate. In the end, although he was very valuable to the company, those two personal flaws cost him his job at a very successful company.

Third, you must be honest all the time. People must know you will always do the right thing no matter how high the personal cost. I have been an expert witness in several major fraud cases that you would recognize if I told you their names. The CEO of one company committed massive fraud. After getting his master's degree in business, he began his career as an internal auditor, rose quickly through the company, but he had a fatal personal characteristic: the more he earned, the more he wanted. He became greedy. Like other fraudsters, he never started out intending to commit fraud. Rather, he fell victim to what I refer to as "seemingly unimportant decisions," or "SUDS." He began compromising little by little. Soon he was on a slippery slope of no return and eventually stole more than $400 million and went to prison. In another major case, twenty-nine individuals, all with business degrees, participated in a $3 billion fraud. When approached to participate, not one of them said, "I can't do this--it isn't right." One accountant was asked by the conspiring CFO on a Friday afternoon to generate $100 million in fictitious revenue over the weekend. Not questioning the CFO, Monday morning he produced seven pages of journal entries, spread throughout various subsidiaries of the company, increasing revenue by $107 million.

Let me share a final personal example. In 2003 I was elected by the shareholders to be the audit committee chair of a successful NYSE company. After one month in the position, I decided our revenue recognition method was an approximation method that must be changed. I was warned by several Wall Street lawyers and others that if we changed our revenue recognition method, we'd have to restate the financial statements and we'd be sued, including personal director derivatives suits against me and other directors. In the end, it was my call as audit committee chair. I remember the Sunday afternoon emergency telephone call where I said, "We must take the high road regardless of the consequences." We did, and we were sued in seventeen class action and three derivatives cases. There was even a Department of Justice investigation. Later the SEC told us they had been looking at our company's accounting and were nearly ready to file a complaint against us. They commended us for proactively making the change. The suits have all now been dismissed on summary judgment motions, and the integrity of this company is very high. No matter the consequences, never ever compromise your personal integrity. Life is too short and the price is always too high.

Fourth, you must always be punctual. In the business world, there is little tolerance for anyone who is late or misses meetings without a good reason. Just two months ago, we removed a trustee--a CFO of a major New York financial firm--from an important fiduciary responsibility because he joined telephone calls late and missed too many meetings.

Fifth, you must be a managed risk taker--business is full of risks. While you shouldn't be reckless, you must take managed and calculated risks. I serve as a director of one of the world's major solar companies. For the past five years, there has been a worldwide shortage of silicon, the critical ingredient for making solar cells. In this environment, we entered into hundreds of millions of dollars of take-or-pay contracts, very risky transactions. Because we took those risks, the company has emerged as one of the most profitable and successful solar companies in the world.

Sixth, you must be willing to help others. As President Thomas S. Monson said, "...when you help another up a mountain, you are nearer the top yourself." Giving service and helping others will always make you a better person.

The fifth lesson today, which comes from the second side of the triangle: who you are and how you act matters as much or more in the business world as what you know.

The third side of the triangle is to make sure your life is anchored on gospel-centered principles. You will be far more successful if you stay true to your values. Remember, nothing is more important than your family and the gospel. Don't use the need to work hard as an excuse not to accept demanding church assignments. Your service, based on personal sacrifice, will be a great example for your children and family. They will see the sacrifices you make and be motivated to be better. I have flown all night to get home in time for church meetings so I could serve. I have also left my family at our cabin in southern Utah, driven three hours at 3 a.m. on Sunday mornings and then returned late Sunday night so I could perform my role as bishop or stake president and still be with my family at night.

In the future, you will be busier than you ever were in school; figure out how to leverage your activities to involve your family. If you have a business trip, find a way to take your spouse or a child with you. When your son or daughter is sitting next to you on an airplane at 39,000 feet, you have a captive audience where you can teach and build relationships. My children and wife have been all over the world on business trips with me. Those memories are now precious as our children are grown and have families of their own.

Finally, maintain personal righteousness and a clear conscience. You can never be happy with a guilty conscience. Be involved in activities that strengthen your personal righteousness. Study, prayer, and service will soften your heart and make you better fathers or mothers, kinder people, and better employees and leaders.

The sixth and final lesson today is from the third side of the triangle: while you will do many important things in your life, nothing will be more critical than what you do with your family and how you live the gospel.

The results of implementing this triangle and learning these six lessons are numerous. First, you will have a happier life and family. Second, you will have a more successful career. Third, you will have many more options and choices in your life. Fourth, you will be a great mentor and example to your children and others. Fifth, you will be a person who adds value every day and is, therefore, at less risk of losing your job. Finally, you will have many leadership opportunities where you can make meaningful differences in others' lives.

May God bless you as you depart from BYU; be proud of your education. As professors, we have loved working with you and watching you succeed. We are better because of you. Be grateful for the sacrifices of those who made your studies possible, including your spouse, children, parents, and grandparents. As alumni, you become our greatest asset. You represent us all.


Contact: Joseph Ogden (801) 422-8938
Writer: W. Steve Albrecht



明治大学政治経済学部卒業。帝人グループを経て、現在ブリガムヤング大学経営大学院マリオットスクールMBAプログラムに在籍。上司であるCEO(超・偉い・奥さん)と、新入社員(子供)二人の4人家族。 このブログは、まだ小さな2人の子供たちに、将来本にして贈るために書いています。

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