Bill Lane prepared and delivered the following address on the occasion of the Penn State Smeal EMBA Class of 2019’s Pre- Commencement Ceremony at the Smeal College of Business on June 8, 2019.

He is currently President Emeritus of the U.S. Global Leadership Coalition and the former Senior Director of Global Government and Corporate Affairs for Caterpillar Inc.

Thank you, Bill, for addressing the Students, Family, Friends, Faculty, and Staff as the Class of 2019’s Pre-Commencement speaker.

Thank you Dean Whiteman for that kind and … exaggerated introduction.

Allow me to return the favor. As some of you know, I have been involved with Penn State for nearly 50 years. During that time I can report that whether it is academics, research, athletics, alumni relations or the success of our students … this is the best of times at Smeal.

Much of the credit for this is attributed to the leadership of Dean Whiteman and those who came before him. They recruited top flight faculty, invested in technology, recognized the importance of public and corporate partnerships, and not only stressed values, but ensured those Penn State values became imbedded in the Smeal Honor Code.

At a time when so many of our institutions are turning inward, Penn State continues to be one of the truly great global universities with 300 study abroad programs and international students from 140 countries. Given today’s high academic standards, I can say with certainty that I would never of been accepted to Penn State today … but you were … and you have graduated. Congratulations.

I’m reminded that you all have studied a plethora of cutting-edge, disruptive technologies that may soon engulf us all. While others may be petrified by the notion of Artificial Intelligence, Driverless Vehicles, 3D Printing, Robotics, Block Chain, even Drones you all not only have a line of sight on the future, but now have the skills to embrace change and succeed.

I wish I could say the same about me. While preparing for today’s ceremony I almost said “Smeal is hitting on all cylinders.” But then one of my grand daughters who likes electric cars asked, “what’s a cylinder and why would you want to hit it?” Time to phase out that analogy.

I’ve been told the biggest mistakes commencement speakers make are presentations that are too long … too preachy … and that are neither timely nor insightful.

So if you would allow me, I would like to talk to you not about disruptive technologies, but about disruptive policies and your role as business leaders to participate in public policy debates. Your initial reaction to this topic might be to faint modesty by saying, “don’t you think that’s premature as I’m just launching the next phase of my career.”

While that may be true, don’t be modest. I have read all of your CVs. You are certainly prepared, if not destined to lead important commercial and public enterprises. By earning an MBA while working full-time you have already demonstrated your potential. With that in mind, allow me to invoke a quote from one of your childhood hero’s, “with great power comes great responsibility.” Of course I’m referring to Spider-Man.

For much of my 40 year career at Caterpillar, I was responsible for the company’s global advocacy in support of competitiveness, economic growth, but especially trade liberalization. From supporting free trade agreements to opposing unilateral sanctions and protectionist schemes, Caterpillar was often center stage. That included agreements still in the news like the so-called worse trade agreement of all time NAFTA, the GATT Zero-For-Zero Tariff Accord, China PNTR, Steel Tariffs & VRAs, the Trans Pacific Partnership, heck we even led the charge to end of Cuba Trade Embargo.

While we didn’t always prevail, we knew success required civility, a search for face-saving solutions, a recognition that our word was our bond, but above all a willingness to embrace change and not retreat from the public arena.

For international corporations, the debate hasn’t really changed that much and tends to be the same around the world. Free trade versus protectionism, growth versus equity, and engagement versus isolation. More recently the focus is on the environment and climate change. Make no mistake. These are legitimate issues. While reasonable people can disagree and even compromise, the goal is to reach a consensus and get things done. Over time, my views have become less rigid and more moderate … so much so some now say plaid is my favorite color. It’s not … my favorite colors are still blue and white. And occasionally black and pink … PSU’s original colors.

Today globalization is being challenged in many places, especially in the United States and United Kingdom. I can’t speak for the U.K., but the US has adopted a troubling negotiating approach premised on the proposition that when confronted with America’s sheer economic might trading partners and allies will cower and agree to new deals favorable to the US. So far that strategy is not working, in fact it is proving counterproductive. Even though we were assured to the contrary nearly every major trading partner retaliated against us. Perhaps the reason is the US overreached by targeting friend and foe alike, as well as fairly and unfairly traded goods.

The US is now doubling down by threatening to impose new tariffs related to immigration and declaring that foreign cars represent a national security threat. Time will tell whether this will have the desired result, but one thing that’s certain, when the next tranche of US Tariffs on China go into effect later this summer … average US duties will be higher than those in India, Brazil and other developing countries. Just 18 months ago the US was a low tariff country.

What has been particularly troubling is while this goes on, there has been nary a word from corporate CEOs. Although that may be changing as the cost of tariffs and inefficient supply chains are increasingly becoming a major topic during analysts calls.

It has been my experience that the best trade strategy for the US is to treat our allies like allies and then work together with them to encourage reform in China. Besides, a multilateral approach not only provides more leverage, but more importantly it offers opportunities for face-saving compromises. It is also good to recognize what China has done well. In recent decades, no country has invested more in education and infrastructure (tell 3G Dam story) than China. Plus their people are extremely hard working.

Does the outcome of the current public policy debate have an impact on what you all have just learned? Sure it does. Think about the risks and costs associated with having too much inventory … and the various Just In Time (JIT) methods you have learned to control inventory. During the past year, with all the concern about tariffs, border closures, and trade retaliation, JIT has become pass’e. The new business strategy is JIC not JIT … that’s Just In Case Inventory and it foretells that higher costs and prices are in our future.

As Smeal MBAs you have thoughtful and unique insights. I realize influencing the external environment may not be your full-time job, but there will be times where it will dictate whether you are successful or not. Sometimes engagement requires that one merely needs to set the record straight. Just for the record the worse trade agreement was the Articles of Confederation signed in York PA and the best was the US Constitution signed in Philadelphia. (Explain). Also US exports to Mexico and Canada soared after NAFTA. USMCA will build on that positive record and should be passed.

So pick your interventions carefully, be civil and constructive, don’t shy away from compromise, but above all don’t allow others to bully you into inaction.

Lastly, a personal note. Like you, I too earned a Penn State masters degree at night school, while working full time. Maybe you are different, but during that time I wasn’t exactly the most pleasant person to be around. If I was studying at night or during the weekend I tended to act like a martyr, and if I wasn’t studying I was consumed with sense of guilt. Fortunately, I was already married because I can assure you no one else other than my wife would of tolerated me. And even that was put to the test when I would, at times, ask her to type my case studies. Thank goodness “white out” cartridges were just invented. To us that was a major innovation.

And then, when I was about to graduate, there were lingering questions about whether it was all worth it. Some at work suggested all that effort should of been redirected to my “day job”. Fortunately I ignored them. Part of the reason was unlike my undergraduate days, I saw the real life implications of almost everything I learned. And those lessons stuck.

Plus, armed with a masters degree, I was more confident … more knowledgeable … and more enlightened about networking and seeking information from a variety of sources. One of Caterpillar’s most successful CEOs, Jim Owens, told me “at times you need to take an intellectual vacation and think new thoughts.” He would encourage me to spend a day or two at the Council on Foreign Relations or PIIE. And would remind me that doing so was part of my day job.

One more thing, I also learned to “help the ins when they are out.” Put another way, help people on their worst day and you have a friend for life. Congratulate them on their best day and you are just one in the crowd. The day after an election everyone calls the winners … the great lobbyists call the losers. The same is true in business.

So was it all worth it? You bet it was! But I do have a warning for you. For a period of time after commencement, you may find yourself reading People Magazine instead of the Harvard Business Review. You may actually watch an entire Phillies game … instead of CNBC. And you will definitely find that an extra beer at Cafe’ 210 tastes particularly refreshing.

So don’t feel guilty about decompressing. After all life is a marathon, not a sprint. But use some of that extra time to thank your friends and relatives who you may have ignored during the past 18 months.

Also please join the Penn State Alumni Association – Just trust me on that one.

And again, congratulations.