Transformation, Trust: U.S. business leader tells grads they have ‘Purdue Equation’ the world needs
Keith Krach, businessman, Purdue alumnus, former U.S. undersecretary of state and former chairman of the Purdue Board of Trustees, made these comments during winter commencement ceremonies.
Thank you for that kind introduction, Mitch. It is a tremendous honor to be here, back in Boilermaker heaven. This truly is my happy place.
To the Class of 2021, your parents, families, and friends, I just have one question: Is this the greatest university or what? I love that part.
Plus, I had to do it. I’m recruiting my 10-year-old twins, Emma and JD, to be Boilermakers. They are here with my amazing wife, Metta, whom I now affectionately just call Facebook.
Although I’ve had a long career since I left Purdue, it feels like I was just sitting exactly where you are now, wondering what my future would be like.
I also remember how excited and blessed I felt. My family, like so many of yours, had sacrificed a great deal for me to come here.
However, since then, that blessed feeling has grown tenfold. I can tell you after four decades of being an alum: Purdue is your forever friend.
Kahlil Gibran sums up that Purdue friendship best: “When you part from your friend, you grieve not; for that which you love most in him may be clearer in his absence, as the mountain to the climber is clearer from the plain.”
As an undergrad, this mountain climber learned a lot of lessons here at Purdue. Let me share the most significant one. I didn’t realize it at the time, but I now see it with tremendous clarity from the plain.
It’s about two words: Transformation, and Trust. And of course, being an engineer, I turned it into a single equation: Transformation to the power of Trust, or simply T2. Today, I just affectionately call it “the Purdue Equation.”
At Purdue, we learned any mathematical equation can be shown to be true by using a thing called a proof. Let me share my personal proof for the T2 equation.
It starts off in small-town Ohio, where my father ran a machine shop, and my mother was a teacher. At age 12, I became a welder in my dad’s shop. In good times, he employed five workers —in tough times, I was his only employee.
My father encouraged me to get some “college knowledge,” and come back as an engineer to help him grow the business into a big company of 10 employees.
While I did become an engineer, I never went back to work with my dad. But he was proud I was a Boilermaker and loved the fact that was also the name of his after-work adult beverage.
However, my dad never knew how terrified I was about not making it as an engineer. Especially on that first day of school when good old Professor Barany meandered in and uttered, “This is Engineering 100. Now, look to your left, look to your right: One of you three won’t be here in a year.”
He seemed to be looking right at me. Anybody who doesn’t think fear is a motivator has not taken Engineering 100 from Barany.
I was undeniably outgunned because I never got into those high school honors classes. I knew my competition on my right and left had … because they told me.
I was thinking, Oh boy, I’ve just jumped in water over my head, and I better learn how to swim. FAST.
It took all the courage I could muster to challenge my status quo, but it was a great lesson in transformation and trusting in myself.
Purdue continued to provide me with plenty of opportunities to expand my comfort zone and take risks. I have Purdue to thank for that little voice in my head that tells me to go for it. I’ve been doing it nonstop my whole life. My transformational journey has been at high velocity with diverse adventures every few years. By living on the edge, I’ve experienced plenty of adversity, and lots of opportunities to learn from my failures. If there’s anything I’ve discovered, that’s when you learn the most.
Each new chapter builds on the last one and involves taking the risk of jumping in water over your head. After a while, that adrenaline rush becomes so addicting that I can’t imagine living without it. I call it scary fun.
To quote one of the great transformational leaders of our time, “the biggest risk of all is that we stop taking risks at all.” And that’s why The Wall Street Journal calls Mitch Daniels the most innovative university president in America.
It’s true in business, too. At DocuSign, we prided ourselves on being a major catalyst in a company’s digital transformation. I would always say on stage at our customer user conferences, “Transformation is the most powerful word in any language, because without it we don’t develop, prosper, or grow. If your company isn’t transforming, it’s dying — and the best way to control the future is to invent it.”
My life’s work has been focused on creating innovative companies by building high-performance teams that challenge the status quo — and empowering them to pursue opportunities and accomplish things they never imagined possible. I believe the team with the best people wins, and that diversity of thought is the catalyst for genius. The results can be magical.
I’m sometimes asked, “Krach, where did you learn your transformational leadership skills? Was it at HBS? Was it when you were a VP at GM?” I just smile and say: “I learned it at Purdue.” I love to see their reaction.
Purdue has always had an extraordinary track record of graduating the transformational leaders of tomorrow.
My fellow Boilermakers, the world needs more trusted transformational leaders than ever before.
That brings me to the second component in our T2 equation — TRUST. If “Transformation” is the most powerful word in any language, then TRUST is the most important word. And when you take Transformation to the power of Trust, that’s when the T2 magic happens.
Continuing with the proof of the equation: A few years ago, the press wrote, “All four of Krach’s companies are considered disruptors that transformed industries and became the clear market leaders through category creation.”
Change is rarely easy. So, when you set out to achieve transformational change, I have found Trust is always the essential element.
Whether it was in the 1980s growing GMF into the largest manufacturer of industrial robots today; or in the 1990s when at Rasna our breakthrough mechanical design software forever changed the way engineers work; or 20 years ago, when Ariba invented B2B commerce to move business at lightning speed, and whose network now transacts $3.7T/year — more than Amazon, eBay, and Alibaba combined.
I certainly have lerned that whenever you are starting companies from scratch, people have to trust you, your company, your product, and your process and your company.
Another proof is changing the way people sign. For 10 years, I would tell our DocuSign employees, “We’re not in the software business, we’re in the trust business. We deal with people’s most important documents. Those are the ones that you sign.
TRUST is the basis of every relationship — business, personal, or otherwise. You do business with people you TRUST. You partner with people you TRUST. You buy from people you TRUST. You love people you TRUST.”
Today the DocuSign Global Trust Network has 1 billion users and 1 million companies, and the name of the company is a verb. Why? BECAUSE OF TRUST.
This is true on the global stage as well. Believe me when I say the world has some authoritarian leaders who are diametrically opposed to trust on a massive global scale.
The reality we face as a nation is one of ever-increasing, even weaponized, economic competition. In this high-stakes competition between freedom and authoritarianism, other nations want America to lead because we remain a beacon of light and hope around the world.
This Ohio boy began his journey welding parts, and later had the good fortune of welding together billion-dollar companies. But even this dreamer could have never imagined that someday he would be called upon to run U.S. economic diplomacy and have the opportunity to give back to this great nation which has given so much to him and his family.
After experiencing the rare distinction of being unanimously confirmed by the Senate as undersecretary of state, my charge was to develop and execute a Global Economic Security Strategy that drives economic growth, maximizes national security, and combats economic aggression.
As a lifelong businessman, it was no small risk on my part to leave my world in Silicon Valley to serve in government—It was jumping in some deep water. But it turned out to be the most rewarding risk I’ve ever taken … so far.
I was given the advice that if I wanted a friend in Washington, I should get a dog. We already had one. So instead, I did something better. I brought in a trusted team of battle tested high-tech transformational leaders, which included a bevy of Boilermakers like Marc Carlson, my lifelong business partner, of course the amazing Dean Mung and Zara Larsen, that young lady who sat right next to me in Barany’s Engineering 100 class.
One of our most urgent missions was to defeat the attempt by authoritarian regimes to control global 5G communications. Their momentum seemed unstoppable and it seemed inevitable. If such regimes controlled 5G, they would not only access your cellphone’s personal data, but could manipulate everything from utility grids to autonomous vehicles to Snapchat to TicTok dancing.
All previous U.S. efforts to stop them had failed. Both sides of the aisle were hitting the panic button.
Our “aha!” moment came when we asked our foreign counterparts how their relationship was going with that authoritarian country. They seemed to always say the same thing: “They’re an important trading partner.” But then they’d look both ways and almost whisper, “But we don’t trust them!”
That’s when we made Trust the core of our strategy, and succeeded by building an alliance of countries and companies, representing two-thirds of the world’s GDP, which operate by set trust principles like integrity, transparency, reciprocity, and respect for human rights, rule of law, property, national sovereignty, and the environment.
All those things together equaled TRUST. These are things we honor in the free world, and authoritarian regimes do not. They actually use them against us for their strategic advantage. In one jui-jitsui move, we turned the tables and used those principles we call freedom and used it against them.
In the process, we created a new form of transformational diplomacy based on trust that integrates Silicon Valley strategies with traditional foreign policy tools which is now known as Tech-Statecraft.
Perhaps most importantly, this NONPARTISAN model provided the unity and continuity of policy between Republican and Democratic administrations, which is so vital to our allies.
That’s why I’m so excited to continue the journeyby launching with Dean Mung the Center for Tech Diplomacy at Purdue, which is fast becoming the world’s preeminent institution for advancing freedom through trusted technology.
In closing, listen to what one of our country’s greatest transformational leaders, Secretary George Shultz, wrote just months before he died last year:
“December 13th marks my turning 100 years young. I’ve learned much over that time, but looking back, I’m struck that there is one lesson I learned early and then relearned over and over: Trust is the coin of the realm. When trust was in the room, whatever room that was — the family room, the schoolroom, the locker room, the office room, the government room, or the military room — good things happened. When trust was not in the room, good things did not happen. Everything else is details.”
I feel a lot of trust in the room.
So, as this climber looks back from the plain at our beloved mountain we call Purdue, where he learned to have the courage to jump in water over his head, he now sees with great clarity that he was never going to drown after all, because trust was the coin of the realm.
He now understands that the simple equation he unknowingly learned at Purdue is really a magic formula for making a difference in this world. A big difference, a little difference, but most of all a meaningful difference.
So, what does Transformation to the power of Trust, or T2, equal? It equals all things are possible, or Infinity to the power of Infinity — which good old professor Barany once said is the biggest number in the world.
It’s now up to you to jump in water over your head, and make the transformational magic happen, by trusting in yourself, and building Trust wherever you go.
Come on in, the water is just fine. And you can trust there are a lot of us Boilermakers in there for you.
May God Bless you and your families on this great day. And may God always Bless the United States of America.