good morning everyone thank you for coming today we’re going to get started my name is Rachel Smith I’m a senior in the College of Business and president of our business ambassadors organization it is my honor today to introduce our Dean halim Alexa day denali arrived at Kansas State in June of 2011 and hit the ground running among his many accomplishments since coming to campus are the creation of the executive mentor program and the professional Advantage program he also led the college in the development and construction of our new 60 million dollar business building scheduled for completion in July of 2016 the Dean holds a bachelor’s degree in management and a masters of business administration from the University of Denver he earned his business administration doctorate and strategic management from the university of utah thank you denali for your leadership and encouragement you have truly made CBA a place for every student can succeed please join me in welcoming the edge holy family Dean of the College of Business denali well good morning everyone you guys are awake how many other way raise your hands yeah thank you and how many of you have cell phones please turn them off this is a good chance to do that okay Rachel mentioned that she’s graduating soon and with great students like Rachel we don’t want them to graduate okay so Rachel will put your graduation back maybe two years is that okay of course I’m kidding we like to people students like Rachel graduate get great jobs which you just have has and be incredibly successful and then just in a blink of an eye she’ll be back as a distinguished speaker just like our speaker today so that those are the expectations actually we have from all of you sitting in the audience that you will be back and be incredibly successful because of the education you’ve had at k-state and be out here and talking to the next class and the next class well my job today is to introduce the sponsors for this program and our good friend Tom Giller community bank president commerce bank of Manhattan tom is the community bank president of the 250 million asset size bank with 42 employees the bank is part of the commerce bancshares organization which totals 23 billion in assets with 46 country in 46 communities in five states tom has been with Commerce Bank most of his 34 years and has held several executive roles with Commerce including lending accounting corporate services and retail manager mr. Giller graduated from Kansas State University in 1984 with a Bachelor of Science degree and finance he continued his education with graduate degrees from the stonier graduate school of banking at the University of Delaware and a graduate school of retail banking at the University of Wisconsin mr. Giller is actively involved in manhattan community a board member of the Friends of mccain kansas state university foundation advisory trustee downtown manhattan economic development and chairs the k-state baseball season ticket drive so a great community banker please welcome mr. Tom Giller well I think of the Dean is Superman he does such a fantastic job and and I know he runs around the campus in the business school but I think he’s got a cape hidden somewhere because I’m not sure how he gets from point A to point B to Point C and the speed that he does so thank you Superman for the nice introduction I’m very pleased to introduce Mike Goss today as our speaker and what I really like about mike is his passion for life in in many different ways his passion for his family his passion for his friends his passion for his business interest for tennis and for Kansas State University and he is so involved in what we call time talent and

treasure e to the University and that passion shows and I think this is a great example the speech today Mike it says retired but i’m going to say semi-retired from bain capital in december of 13 following 13 years with the firm in various senior management capacities he joined bain capital in 2001 as managing director and chief financial officer in 2004 he assumed additional role of chief operating officer adding responsibility for bain Capital’s global human resources legal and investor relation activity during his tenure in these roles Mike oversaw the firm’s growth in assets under management from and this is amazing 10 billion 270 billion global offices from four to nine and worldwide employment from 200 to 940 today he serves a special advisor to the firm while pursuing independent business philanthropic and personal activities prior to joining bane he was executive vice president and CFO of digital before that he was executive vice president CFO and a member of the board of directors of playtex products inc Mike graduated from Kansas State University in 1981 with a bachelor’s in science magna kamata and economics and from the Harvard Business School in 1986 with a masters of business administration with distinction he is a member of the board of directors of platform specialty products tennis channel the international tennis hall of fame the Kansas State University Foundation in tenacity Inc he resides in Westport Connecticut is married to his wife Becky and they have two grown daughters Emma and Lucy let’s give a nice warm k-state welcome to my gosh well thank you Tom for for that wonderful introduction it was exactly as I wrote it which is always good and also thank you to all of you for attending this morning I know it’s purely optional that you’re here and so I feel like you’ve entrusted me with an hour of your life to make sure it’s meaningful and that you learn something from it so I appreciate the vote of confidence and just you being here so we’ll try to make it work as my wife will tell you in somewhat annoying fashion I see most issues in life through the prism of k-state football and the lecture that we’re going to talk about this morning is is no no different now if you’re a student here you’ve only known one way at Kansas State and that’s a winning tradition but for those of us who have been around for a while you know we know that other things can happen with k-state football and so we are particularly proud to have seen the rise of Kansas State football from what it was when I’ve sat in your chair to what you guys now enjoy but how was it that that the k state football got to be so good I think if you were to ask coach Snyder he would say it’s because each and every day they did things just a little bit better and when you do that over a 20-year span you do get better he is written down what he calls the 16 goals for success and it’s a way that he and his players can manage their daily lives and end up with a much better football program as a result not not surprisingly our athletic department under under the guidance of John Currie and the wonderful team he’s assembled also has a mission statement five points that guide their activities every day it’s only five compared to snyder 16 i know there’s a joke buried somewhere in there but i haven’t been able to figure out what it is but what I wanted to talk to you about this morning is what goals for success should you have it seems to work for Snyder in the football team it works for curry in the athletic department certainly it will work for us as students and people preparing for a career that we also have goals for success so the way I want to talk about that this morning under under the deans advice and counsel was to take a look at a project that I worked on early in my career as a representative sample or case study if you will about a real-life

project that I worked on and we’re going to look at all the skills that it took along the way to be successful in that project and then perhaps from that be able to draw some conclusions about what you should be doing now while you’re a student at Kansas State University so that when your time comes to work on a project like this you’ll be prepared to succeed just like coach Snyder’s team is prepared because they’ve lived by these 16 rules okay that’s what we’re going to do so let’s get started back in nineteen ninety two I was 32 years old and I was in charge of mergers and acquisitions for a new york stock exchange company called oak industries it’s relatively small by New York Stock Exchange standards it only had revenue of a hundred and forty million dollars but what it had of great value was a 180 million dollar net operating loss carryforward and this is going to be the only technical part of my discussion what is a net operating loss carryforward well tax law in corporate tax law in the United States says that if you have earnings from this activity and you have losses from this activity the government is at least fair enough that they won’t just tax your earnings from the profitable activity and not pay attention to the losses you’ve incurred in the other activity so they allow you to net those gains and losses so if you earn 100 here and you lose a hundred there you actually owe no taxes they also allow if the timing is wrong so that if you make a bunch of money and then you lose a bunch of money and you’re not actually netting those in the same year you can carry that loss forward until you do make money and that’s what happened with the case of oak industry they were a very profitable company they were in the business of subscription television so this is before cable so if you can imagine back in the day we’re all TV signals were delivered over the air kind of the precursor to cable television was that oak industries owned a bunch of television stations that that broadcasted a encrypted signal and then you could pay for this box put it on your TV and unencrypted the signal and it was the early subscription television and that’s what oak industries did well it worked beautifully until cable television came along in which case it just obliterated that subscription television service who would put a box on their TV and pay 20 bucks a month for one station when cable comes along and you have all those other things to choose from so oak industries went from being a very profitable company to a very unprofitable company and as a result they had 180 million dollars of operating losses which they couldn’t yet offset with earnings from any other business why was part of a management team that was brought into ok industries to help turn it around to reposition the company by selling its bad businesses buying new businesses and hopefully using this net operating loss carryforward so that any business we bought wouldn’t be a taxpayer until it had earned more than 180 million dollars so may make sense so far so as an acquirer we were a very formidable acquire because we’re the people we were bidding against would probably be paying taxes we wouldn’t be so we could afford to pay just a little bit more than the next guy and and shield the next hundred eighty million dollars from from taxes so that was the mission so to be in charge of mergers and acquisitions for this business you know it was pretty pretty cool thing so just a little detour by the way I do want to make this point what I’m talking about today is is an acquisition and that was my job the lessons i’m going to draw from you as a student at the very end apply to any kind of business question not just this is if you’re here to learn about ma you will be disappointed that’s not what this is about this is about how to prepare yourself for any kind of question so if you’re a salesperson and you’ve been asked to figure out a sales plan for a new territory or your marketing person and you’re and you’re trying to figure out a launch plan for a new product or if your manufacturing person and you’re trying to decide whether or not to introduce a new product or to build a new plant what I’m going to advise you today on how you prepare for those questions are all going to be the same this just happened to be a merger and acquisition kind of question so this is the process you spend a lot of time creating deal flow which means just generating ideas for your company to acquire then you do due diligence which means you’re investigating the company and trying to decide whether it’s anything you want to own and if you want to own it what price you should pay kind of next door to that is financing how you’re going to pay for

it we happen to have a lot of cash on the balance sheet at Oak industries from assets that we had sold but we could also borrow money we could use our new york stock exchange stock there was all kinds of ways to finance the acquisitions we are going to do so that’s kind of part of the equation and then you have to own the darn thing after you buy it that’s a whole nother that’s a whole nother part of the merger and acquisition process you’re negotiating pretty much around those first two boxes so while you’re doing you do your due diligence you’re also negotiating with the seller on the price and any other terms that might exist and certainly if you’re borrowing money from the bank or giving the cell or any kind of stock or anything like that there’s certainly negotiations around that and then the often overlooked part of the M&A process is there is courtship along the whole way here you are trying to woo the sellers in the deal flow process you have to in doing due diligence you can’t be a bull in a china shop while you’re conducting your investigation when you’re negotiating the financing again there’s people skills involved with that and certainly when you own the business afterwards you certainly are instantly working with the new management team of the business you required so don’t forget the courtship part of this whole process so as I said I was in charge of mergers and acquisitions for oak industries and we looked at hundreds of companies before we found 101 at one last point because i only have essentially 35 minutes to speak i could speak for days on on this particular project that we worked on i am only going to focus on what we did during the due diligence phase because you’ll see that’s all you need to know to form our goals for success at the end so after looking at hundreds of companies we found a company in phoenix arizona called gilbert engineering they make connectors that go into the infrastructure of a cable TV system the stuff that’s up on the poles which you probably have no appreciation for I know I didn’t until I worked on this company all the way back to where it plugs into the back of your TV set those little connectors that you see with coaxial cable that connected the backyard TV that’s what Gilbert in engineering made they were the price and quality leader which means that that they were the highest priced connector in the business but they generally commanded that high price because they were known to have the highest quality product it was 60 million in revenue so compared to okie industries 140 million in revenue this was going to be a significant addition to our company and it was highly profitable generating 20 million dollars so it’s perfect if you have a net operating loss carryforward and you have 180 million dollars to burn if Gilbert didn’t grow you know for the next nine years we were we would be paying no taxes where most other potential buyers for Gilbert engineering would be paying taxes so it was perfect this deal was actually brought to our attention by bain capital which I later went to work for I like to think because of my performance on this deal but you know who knows might have been some other things but bein brought this idea to us they had identified Gilbert engineering and quite frankly it was so awful it was so profitable you know that they couldn’t hardly afford to buy it but they knew that we were sitting there with our net operating loss carryforward so they thought that we’d be perfect I partners of course tax law required that we own eighty percent of the business and Bane could only own twenty percent of the business because you you know remember we’re trying to match whoever lost the money with who’s making the new money to be fair so it’s a good public policy requirement that we end up owning eighty percent in bein own 20 but we decided to be partners with pain in in pursuing Gilbert engineering so this is what they make I’d never seen him before you know they’re about like this long they cost eighteen to twenty dollars if you are walking home tonight I’m go look up on the go look up on the the wires that hang above the ground and you’ll see these things any time a cable coaxial cable is cut these things are put into the boxes or into the feeder that then goes into your house but they’re all over the place up there Gilbert did make the cheap stuff that goes in the back of your TV this is the stuff that’s inside your house but they’re very inexpensive these these things cost like 35 cents not a whole lot of money not terribly complicated a lot of product from the Far East to compete with but that big stuff the expensive stuff the stuff that really mattered to the cable operators is why Gilbert engineering was so was so profitable so this is what a cable

system looks like there is this is this parts called the head in and from so it receives the signal from ESPN and all the all the various cable networks tennis channel broadcast into broadcast into into the head end and then the signal is distributed over over coaxial cable all the way to your house this these big fat things are called the trunks and generally the way cable systems are laid out is kind of a hub-and-spoke system where a whole bunch of trunk lines go out to the neighborhood this is called a node and then from the node it splits off into a hundred different streets and then ultimately to your house so it shoots off and this kind of these are big fat cables that have lots of capacity and as it gets closer and closer to your house there are amplifiers to boost the signal along the way every time that every time that they need to cut into to go to your house there’s a box up there you have to have a connector there you have to have a connector there you have to have one there you have one there and they’re all over the place if you just know what to look for in fact in any mile of cable system there are six hundred and thirty dollars worth of these connectors you can see here most of it most of them are of the type that are up on the lines the aluminum type the expensive type the type we were really good but there is so that’s four hundred and fifty dollars of any mile but there is one hundred eighty dollars of the of the little brass stuff well this was Gilbert’s performance a pretty strong performance they had grown on average eight point seven percent per year between the period 1981 in 1992 as you can see profit was also growing along those lines profit had grown faster than sales which means of course that their operating margins were expanding this that’s just the math of it all this little pattern kind of bothered people you know what happened in 1991 and you know certainly this was a period of time when cable television was rapidly expanding in America what would the business look like in the ongoing course that was a big question but people were certainly bothered by this little thing what was going on there this is their operating margins in percentage terms this was also a little bit troubling after years of growth it was starting to decline so the questions that we were needing to address to decide whether or not we wanted to buy this company and if yes what price should we pay really hinged on on three questions at the end of the day this is supposed to be a stoplight by the way it’s best I could do the big question the big question was fiber optics this is 1992 fiber optic cable was just coming two for the price of fiber optics was falling dramatically and and the widely-held prediction for anyone looking at this business was that fiber optics was going to obliterate coaxial cable and therefore the need for Gilbert’s connectors because you don’t use connectors in fiber optics you know we made we made connectors that only went to coaxial cable that was a huge red flag boat to us but their bidders who in many cases chose not to even pursue Gilbert engineering because they thought they were so smart about fiber optics then there’s the question about march and sustainability this is a very profitable business but that’s because the market was growing with this would they still be able to maintain their pricing and maintain their operating margins in the face of a contracting market I mean generally once markets start to contract margins will also contract because people have to start fighting for the business and one way you fight is by price so that was a big concern but then there was also we knew there was a green light in in terms of international opportunity at that point in time 1992 cable television was largely an American phenomenon and cable was just starting to come to come into being in Europe so we kind of felt and we were strictly a US company at the time was there an opportunity to expand this business into Europe we felt like that was nothing but green so this is what we embarked upon let’s answer these three questions this was the project this is this was what we had to do in the due diligence phase of this business so as I mentioned everyone was running from fiber oh my gosh is going to kill this business we happen to find out you know kind of from the management team and a little bit from the body language of the seller there weren’t a whole lot of people planning to bid for this business they thought fiber optics was going to was going to really obliterate

this business maybe not obliterated but certainly was going to be a shadow of what it once was well that was when we decided you know there’s enough positive here we should probably explore that question so what we did excuse me I’m going to grab some water is we decided to interview everybody we could find who would be willing to talk to us in the cable television business and really learn the economics of what it is to lay out a cable system and and really test this hypothesis about was fiber going to destroy the business of Gilbert engineering so we and the bane guys talked to over 20 customers Gilbert engineering and these are the people who actually you know design these systems and build these systems we went to to trade shows one in Las Vegas one in New Orleans and just walk the halls and talk to anyone we could find in the cable equipment business or cable service business there are businesses who who lay out these cable systems for people we talked to engineers to get to the bottom of this and what we found was pretty interesting and no one else found this remember this drawing where I showed you the the truncus but one thing that became quite clear was that fiber optics was really only going to be economic way out here in the trunk lines once you start getting into the neighborhoods you get to these nodes and you start splitting off into the neighborhoods there’s very little fiber optic there that fiber optics is too darn expensive way more expensive than coax and it’s not necessary and you know that the coax creates a ton of capacity which is needed up here up here and then in the trunk lines but once you get into the neighborhoods and you start splitting it fiber optics is overkill and its way on economics so what we found was that if you look at at the economics of the cable system if you will this is total that head and that’s the satellite accounted for about ten percent of the cost of cable television the trunks were another you know fifteen percent and then seventy-five percent of the money spent by cable systems was actually in the neighborhoods where fiber optics was not going to be a big threat you look at it on mileage so you basically taken out the headend most of the miles in a cable system are there if you look at the then you translate that into into where the connectors are most of the connector dollars are never ever going to be affected by cable tell or by by fiber optics and when you look at Gilbert sales how much of their stuff went into into the trunk network a very small part would actually be affected by fiber I reduced it to one slide I’m telling you that was weeks worth of work and talking to a lot of people to figure to figure that out but that was our conclusion well this is kind of good this kind of says that Gilbert’s not going to be obliterated you know it’ll kind of maybe go down what by fifteen percent if all of that area does go to fiber and certainly not all of it would go to fiber so at least we concluded that there’s a baseline under which Gilbert would would never fall below but there was actually more upside to the story than that that we discovered so remember we’re largely a US company and the u.s at this time in 1992 was largely fully penetrated you know every neighborhood that was ever going to have cable TV head cable TV going to be a whole lot of new build going on so if this is what all the story was you’d probably never buy this business that’d be a waste of your nol well there’s also some maintenance and the cable plant we discovered the national cable plant was about time to be upgraded anyway so there would be you know some some general maintenance a lot of times we found that cable systems they were in such a rush to grow that they didn’t lay out very well and didn’t lay out economical economically or if this was Manhattan you know and you have all that growth out to the to the north and west you know the cable system and have to follow where the growth was and so forth so we did conclude that hey you know what there’s a good baseline of business if this was all Gilbert did but this was what we discovered that we really loved and that was that wind cable operators did upgrade that trunk line with fiber optics all the downstream stuff had to be replaced when the choice had to

because suddenly that pipeline at the trunk that was being now you know where the fiber optics was was going to deliver so many more channels and and internet and gaming and video on demand that everything downstream also had to be replaced and that was going to be the bonanza for Gilbert engineering that no one else saw so we were projecting seven and a half percent growth where everyone else was kind of projecting oops everyone else was projecting you know down here we were projecting up here when we looked at at what that meant from a from a connector point of view remember this slide we’ve already seen that all those little brass things that you don’t make much money on we weren’t very good they can all stay in place they didn’t need to be replaced the other thing they need to be replaced was our stuff so that was good news and it and it was again validated by all of those interviews we did that actually we found out that 93% weighted by subscribers so you know weighted by size ninety-three percent of the 20 people we talked to were planning to increase their capital spending budget not decrease their capital spending budget so as far as we were concerned fiber optics was no longer a red light issue it was a green light issue and I think we were the only ones to have figured that out the next the next question was margin sustainability well now that we’ve taken away the prospect of a declining market and price pressure from that was there anything else going on there we looked at a lot about the costs and the price of aluminum and the price of brass and we did all that but this was really heart of the matter which is when we talk to the people who work on these cable systems you know whether you pay eighteen dollars for that connector or nineteen dollars for that connector was really no big deal they are very very important you are you’re sending a technician out there that makes a hundred dollars an hour and you’re going to try to save a buck on the connector yet that that that when you sell that one dollar when you sell you know five million connectors that one dollar adds up to five million dollars of X or operating profitability for you and so we found that there are a lot of issues that were more important than price in selecting these connectors and that’s where Gilbert was a leader so we felt like the margins in this business could also be sustained and then there was this international question the u.s. at that time sixty-five percent of all homes were were covered by cable television and the others were in rural areas and stuff like that and you know I think even today but so this in 1992 I think even today the u.s. is kind of seventy two percent covered so you know this kind of covered most most of the most of the country but these other countries were just in the early part of their development but I do want to caution and we spent a lot of time on this it hits a mistake for Americans to think that the natural order of things is to become America that might not happen in some of these other countries so for example in a lot of these countries satellite television came along and they kind of skipped right over that the cable TV business and went straight to satellite you know same is true of telephone a lot of lot of these third world countries never went through the landline business the way we did in the United States so if you went and projected a lot of landline telephone growth in the third world you would have been sadly mistake and they went straight to wireless and the same thing happened here but still there was a lot of growth in foreign markets in 1992 that we thought we could capitalize and we pretty much confirmed that in the course of the interviews and the due diligence process so at the end of our diligence phase we thought we had three green lights this is a good company it’s going to experienced growth that no one else saw it’s going to be continued to be highly profitable so perfect for a nol kind of acquirer and had the whole international story as as nothing but upside so how did it how did it pan out well this is what Gilbert looked like at the time that we bought it it was 60 million revenue 20 million dollars in profits so a 33-percent operating margin it had no international business we ended up buying it for a hundred and ten million dollars we borrowed 90 and we put in 20 million of our own money which means that we bought this business for five and a half times operating profit that number five and a half was a very low number today you know even for a low growth business you’re probably paying

seven times operating profit for for a very low business we feel like we bought this business for such a low price because we were the only ones who figured out this fiber optic question everyone else just took fiber optics at face value skip the auction no one showed up came time for Merrill Lynch you go on this business Merrill Lynch private equity on this business we were the only ones there with any money and so we bought the business for five and a half times in 1996 we were approached by Corning fiberglass to buy this business and we sold it in 1996 and at the time we sold it Gilbert had doubled its sales to 122 million it had more than doubled its operating profit which means our operating margin was thirty-eight percent in the four years that we owned it we bought two businesses in Europe one in Denmark and one in France I got to work on those great fun great fun and when you’re selling a vibrant business you’re not selling it for five and a half times operating profit you’re selling it for nine point three times operating profit which leads to a perfect storm we had paid off all the debt so what this means is we turned our 20 million dollars into four hundred and twenty six million dollars in four years they know all work out this way I had to go all the way back to nineteen ninety-two to find a good example so they don’t they don’t all work out this way this is what you want this is what you want to have happen but this was particularly rewarding because it’s like making a trick shot in pool or course you know playing basketball when you call the bank shot and you hit the bank shot it feels really good it feels really good so that being the case now I want to get to the punch line of the story really which is I had the good fortune to be in position to work on this on this project early in my career and I felt like I was pretty well prepared to do it in large part because of my education here at Kansas State University and it provided a foundation for me to lever my experience here into a really rewarding kind of experience so what could you guys learn from this you’re not going to ever do a deal in the cable television business you might not even be in mergers and acquisitions all fine that’s all good what is it that you can learn that you can do today while you’re a student and put together your own goals for success the way Snyder has for the football team what should you be working on if this is the kind of project you want to be prepared for when you hit those streets in your career so I’m going to recommend five points another reason why I didn’t make fun of John Currie for only having five because that’s all I could come up with as well the first is to think holistically you know in this case at gilbert engineering it was it was not an accounting question it was not a finance question it was not a math question was not an economics question was not a psychology question it was none of those things yet it was all of those things so I would urge you that when you are putting together your own curriculum and you’re putting together what classes you’re going to take and what you’re going to work on why you’re here be able to think holistically at the end of the day it’s a it’s a multiple tool tool kit that you need to have and make sure that your curriculum that you put together for yourself enables you to think holistically and don’t just emphasize now I’ll take a little bit of a diversion here I see and talk to a lot of kids who think that that means multiple majors or double major this double minor that that I can tell you as a recruiter at being capital I’ve never paid any attention to that double major to minors whatever what matters is that you have one good major one good GPA you graduate in four years and that you have built yourself a curriculum that enables you to think for the job I’m hiring you for a little little the version there the next thing is people skills you know it wasn’t easy in the case of Gilbert engineering due diligence to get 20 cable guys to talk to you for free they’re busy people they had other things to do besides educate a couple of punks on on how cable television works I’m sure we asked lots of stupid questions along the way before we got to the final answer and it takes a certain amount of people skills to be able to conduct that part of the job it’s not just about the technicals you really need to have people skills so here at k-state I’d suggest that you get involved in extracurricular activities

and again kind of like the advice that I gave you on on majors it’s not the number of activities that count you know not impressed by 11 activities on your resume where you don’t do anything of any value in any of the 11 you are far better off having two or three activities where you play leadership roles and you actually develop the kind of people skills that it takes to be able to talk to 20 cable operators work experience this is another place where you can you can find jobs where you can really develop your people skills when i was in college i sold men’s clothing in retail during the summers and i learned so much in just selling men’s clothing it was a it was a fabulous experience I also taught tennis lessons so as a teacher and a coach you learn you learn how to persuade people and communicate to people don’t get hung up on on on needing a high-powered internship or anything like that I have two two daughters a little bit older than you guys and of course they and all their friends hyperventilate over the need to have an internship and all that kind of stuff again I can tell you as a recruiter I am equally as impressed if not more impressed when I see someone who’s waited tables or mowed lawns or painted houses because I know that person’s really worked and that person has really gone out and mixed it up with people and I’ll bet you that person has some people skills that are fairly unique that you don’t get an internship so don’t internships are great I’m not disparaging that just don’t hyperventilate go get it go go get a real job or you can actually develop these people skills and you’ll be equally as successful if not more successful once you ate the workplace the third is to work on your communication skills in the course of this in the course of this project one of the funnest things I did was have to convince my very risk-averse boss about this fiber optic question was one thing to be convinced yourself then you have to go out and convince your boss that yes it’s worth spending 110 million dollars on this bet based on my analysis it takes a real communication skill to do that once I got the boss on board we had to get the board of directors VOC industries on board we have three meetings with with board of directors that involved me writing a three to five page memo to the board in advance of each meeting so you know paragraphs prose sentences structure three to five pages in advance of each meeting outlining the case then we’d show up at the meeting in which case I’d have to prepare a powerpoint presentation and then orally present and then defend in QA each step along the way I was really glad I done a the communication courses i had done here at Kansas State University to prepare me for that so again it’s a matter of course course selection go seek out classes they might be in the College of Arts and Sciences where I found them that require writing and oral communication skills and when you’re in those extracurricular activities seek out leadership roles I tend to believe that the leaders of these campus organizations and clubs have to communicate to the membership they have to communicate to the campus they have to both written and oral so that’s a while you’re doing the extracurricular activities to develop your people skills take a leadership role and seek out ways to improve your communication skills while you’re at it the next one’s think globally you know back in 1992 you were either a domestic business or you are an international business and frankly more times than not you were just a domestic business so back in 1992 we knew this whole Europe thing was going to be a positive for Gilbert but it wasn’t really mission-critical people don’t have that luxury today nearly any business you will look at will be somehow impacted internationally so how do you prepare yourself for that while you’re here at k-state well I’m a big fan of study abroad it was nowhere nowhere on the know we’re on the radar screen back when i was here in 1981 but today it’s a viable option and the organization here that manages international studies has scholarships available so if it’s a financial issue that can be addressed i would argue if it can’t be addressed that way that it’s a worthwhile investment anyway and if that’s still not a possibility i urge you to at least read what you can about international affairs and international business and international economics two publications i recommend specifically as The Economist magazine and the Financial Times you can get them both online they’re very very interesting very well done very well read and I have one more pointer you don’t need to tackle the whole world go find a country or

that you might be interested in or that you have a fighting chance to go go work in some day or something that interests you UK Germany China Brazil whatever and just read everything you can about that one country next thing you know you’ll become expert in the continent and in the region and the next thing you know is at least you’ll have a framework for figuring out other countries so it’s not as daunting as it might sound and then the last one I think is the hardest it’s what I call intellectual energy and this is about the closest I come too many of Bill Snyder’s 16 goals for success and that is be an active thinker it was not easy figuring out this fiber optic question and I have to say this is what I learned from the bain capital guys who are our partners those guys are tenacious they do not take estimates for an answer they don’t take no for an answer they don’t trade on hearsay you think fiber optics is going to be a threat prove it let’s go find out and you think you can learn the answer from talking to three people no let’s talk to six no let’s talk to 12 no let’s talk to 20 until we absolutely nail it that is the hardest thing I think of all five of these is to make sure that you have intellectual energy to just attack issues with tenacity and it’s and it’s just what you do every day you wake up and you say I know I’m going to class today what can I do to be prepared what can I do after the fact what can I do after class to review what I learned you know he said something that didn’t make sense to me I need to go figure out what that was and it’s just a tenacity intellectually it’s hard work but it’s probably in my view one of the most important things you can do and you can start developing those habits today while you’re at Kansas State so those are my those are my goals for success it’s strictly recommendation you know if you haven’t read Bill Snyder’s I’d go read his he’s got 16 good ones if you if you disagree with any of these or you don’t think that that they’re quite applicable to your own situation I think the most important thing is that you form your roan go go steal some from Schneider steal some from Goss make your own I think the most important thing is that you have in mind what you’re trying to accomplish here at Kansas State University that you commit it to writing to yourself and the most important thing isn’t really what each one of them is it’s that you’ve done it and then you have a framework for all the decisions you have to make what classes to take what activities to participate in what jobs to take what to do in the summer once you do this I think you all have every bit as a chance to be a successful as Snyder so this is my recommendation I think we now have like 10 minutes for some Q&A I’d be happy to take those take those questions yes sir okay when you do these acquisitions in your partying with these like with bain capital for example did you have any like head-butting or problems working with these other companies and these acquisitions oh yeah so that’s you know another need for the people skills and again if I had more than 35 minutes to talk about this it’s rich with those kind of issues in this particular case remember for the nol to apply we had to own eighty percent of the business and bank could only on 20 well since they kind of brought us this idea that was a little irritating to them they did as much work you know as as they could and they were they were only going to mainly made twenty percent of the 420 million we made eighty percent of the 420 million so yes there was some annoyance to that I would argue they got a pretty good deal too because they didn’t have to pay taxes on their share either they used our nol which was our contribution to the effort and so yes there was there was lots of head-butting before corning came along we had to decide you know could we buy each other out and at what price could we buy the others interest if it ever came to that so that’s that’s definitely a zero-sum game if I had to buy bein at a high price and I would argue for the value we created one of the big issues was well I’m not going to buy I’m not going to I’m not going to pay a pre-tax number for this business because that’s might accidentally die brought to the to the table that was a big a big debate and so in fact one of the one of the one of the one of the key negotiation points there I was I was up against Mitt Romney himself so that was kind of cool I didn’t know it at the time it was so cool but now I know it to be cool and I would say actually to be to be totally honest I think Bain Capital got the better end of the deal in just about every respect but still we would never found this opportunity if it weren’t weren’t for bain capital so I

sleep well at night thinking about strengths and your role as a leader what would you say is one of your best or some of your best strengths that help you become a leader and managing people and those high stress situations yeah yeah well I I hate answering that question because you can’t have to put humility aside a little bit to answer question like that I really do believe that I have been successful because I’m from Kansas Kansas doesn’t threaten anyone no one you know no one expects much there are times but you know when I’m walking around when I’m walking around the floor of a manufacturing plant in at Gilbert engineering you know I was from Kansas State you know I was I was from Kansas you know when I was negotiating with the bankers in New York City over the financing of this I was from Harvard and it is it’s it’s always served me well to never kind of lose track of my roots of being in Kansas and just follow my instincts as a cans and how you treat people you lead by example you you are humble you check your ego at the door one-one phrase I use a lot in guiding the people who work for me is but you check your ego at the door once once you check your ego at the door and it’s and the issue is not about you that’s just about the business issue it’s amazing what can be accomplished same way with giving credit to the other members of your team so if you lead by example you check your ego at the door you’re not full yourself you give credit to your team your team will follow you in a lot of very very difficult situations there are times when the other product would have worked and I didn’t do that very well and there are times you know when I wish I would have bet on balance you know i like i like what ended up doing hunter yeah um I was wanting to know what’s the best advice that you received throughout her career yeah so again this is going to sound this is going to sound political so let me get all the way through this explanation but at at the Harvard Business School we actually read a case called managing your boss and it and the advice that was given in this case was make your boss look good and I don’t mean and again I don’t mean that politically it just means that if you woke up every day and said what am I going to do at work today and you figured out what was on your boss’s agenda and you figured out what your boss needed to get accomplished and you just worked on that you’d have a you know you’d know what to do that day if you know what to do that day you knew what to do that week that month that year and if that was your only rule that you followed you’d be in great shape that doesn’t mean be a butt kiss and you know all that kind of stuff it just means figure out what’s important and work on that and that was probably the best advice I ever got incidentally yep many of you probably know Paul edgerly he’s another distinguished alum of Kansas State and he’s been my mentor all my life he’s four years older than me and he was addy you like I was and you know Paul Paul has been my mentor over the years well there was a time when I was at Bain Capital I was chief operating officer and Paul was head of the Compensation Committee so we had to work very closely together in managing the compensation of the team at bain capital it’s very complicated that really really complicated there and and Paul who does deals for a living unlike me who was supposed to make the place work put his arm around me one day after meeting said Mike I need you to think for me I’ve got other things I’m like I need you to tell me what’s important in the compensation world and I need you watching out for my backside I need you to think for me that was the easiest piece of instruction it was just like the you know do what makes your boss you know look and and that that little piece of ice everything became clear oh great all I need to do is keep Paul out of trouble and and sure enough that’s what dictated what I worked on and it worked

beautifully yes sir just speak we can hear you so the question was what did I do following case date in order to get the Harvard Business School I was an economics major in the College of Arts and Sciences and the reason I did that was because Maya it was my intention to go to law school and so and it was my belief at the time that at that time I could craft better curriculum for myself if I was in arts and sciences major and then filled all of my electives with relevant business courses that would prepare me for law school so I took a lot of accounting a lot of tax some finance well somewhere along the way a finance professor got a call from a bank in Dallas and said we don’t recruit a Kansas State but if you have someone you’d recommend that we fly to Dallas to interview will do that and he gave them my name and so I decided to go try this for a little time before law school and once I got into the banking business i decided i liked business more than the law and never never did the law school thing never applied never went went from there to the Harvard first off thank you for coming they’re taking the time to speak with us and then on your fifth point out their intellectual energy there’s some days you wake up and it’s tougher to get going than others is it just as simple as keeping your goals and objectives in mind or how do you stay motivated yeah that’s a good question and I I do i do hate to say it’s it’s simple because it’s hard those are two different those those are two different questions it must not be easy to wake up and prepare yourself for a big 12 football lineup either i would guess and so it really is in my view what distinguishes the good from the great is that the great get up and you know do it i have a few tricks to myself i’m a big to-do list guy and what if i have a hard time getting the engines revved I work on the easy stuff first just to build momentum kind of trick myself into thinking I’ve accomplished something I’ll dissect my I’ll dissect my to-do list into the smallest things so that I’m crossing things off to generate to generate energy for myself and so once you get it started it’s a lot easier so I would not advocate that you turn the engines on and off but I do advocate that you know once once you get going just get yourself going and that rest of the intellectual energy will follow because it’s habit for me so what is the biggest challenge you’ve ever faced and what advice do you have on dealing with your challenges wow so there have been listen I’ve had a charmed life so it is like my challenges or you know tough business questions you know whenever I was in a place that was that was uncomfortable or I was behind the eight ball or the challenge seems too big and how am I ever going to do this right I made a wrong decision my advice and I’ve given this to my daughters and to my daughters friends so I really do believe it is to just trust yourself take a deep breath trust yourself if you I think by the very fact that you’ve chosen to volunteer to be here for an hour you guys are already in the you know in the cream of the crop at kansas state that the group here who’s chosen to be here this morning so my bed is that you can all afford to trust yourself and there’s very few issues in business that are that are grave you know that you can’t get out of by just taking deep breath you know kind of okay let’s just calm down let’s think this through let me figure out what I can do but trust your instincts trust your capabilities trust yourself you’ll be all right I promise you when you notice as Mike spoke the word

negotiation came over that deal and the part that he didn’t have time to emphasize is how much on your daily life you are negotiating every single day you’re negotiating whereas with your boss with your team members and others and the skills you need to do well in your negotiations or laid out right there our listening analysis people skills communication skills think globally beyond the curtain the certain issues that had and also intellectual energy to carry it through and you’ll be surprised how well that works you know Tom in introducing Mike mention how much she does for k-state any of you have been to the football stadium okay you probably saw the gods family what is the courtyard Terrance terrorists thank you out there and enjoyed your hot dogs up there how many of you play tennis all right you went to Mike and Becky’s tennis courts and saw his generosity there some of you will be coming to our new CBA building and be in God’s family classroom and be beneficiary of that and study abroad programs that he emphasizes again Mike and Becky of incredibly generous with scholarships for study abroad program so I want to take this moment to really thank Mike for everything he does for k-state day in and day out for being here thank thank you all for being here and now go take those classes and do well