Why Dilbert Exists

This spot-on address offers some very candid advice to future engineers. A must read!

 Hunter Hunt

 Hunter Hunt

Vice President, Hunt Oil Co.

I was honestly quite surprised when I received the invitation to speak to you all today, as I thought that the point of a commencement speech was to share wisdom and profound insight with the audience.  That leads to the question of “why am I up here talking?”

Let me address this head-on, and point out three major reasons why I should not be up here today.  First, I have probably come the least far of any speaker that the Engineering School has had in its history.  I was born into extreme privilege with a huge head start.  I do not recall taking and acing some test in the womb, after which I was designated white, male, American, healthy, rich, with loving parents.  It just happened – and as a consequence I am one of the least “self made” people you are ever going to meet.

Second, I am not even an engineer.  In fact, it is worse than that.  I proactively chose not to be an engineer.  While I majored in Political Science and Economics with a minor in Business, I also minored in Math.   Those math classes were filled almost exclusively with engineering students – but I did not like engineering, and as a result, I managed to complete 18 hours of the least practical math courses this fine institution had to offer.  Differential equations, linear algebra, discrete mathematics – no problem.  But if there was a spring or circuit involved, I ran from it.  Every one of you is infinitely better equipped to use your mathematical skills more practically than me.

Finally, I have not really done anything yet.  This is not false modesty, and my team is poised to do some great things.  But setting up pieces in a chess match in a clever way is a far cry from actually winning the game.  The truth is, I run the smallest electric utility in the Continental U.S. (I am not sure about Guam or some of the atolls).  99% of all utilities in the country are larger than us.  And to-date, we have spent far more money than we have made to get where we are.  There are yogurt shops that have better returns on capital over the past decade.  We still have a lot of work to do to be the company we aspire to be.

So, you have a silver-spooned, non-technical speaker who looks like a résumé jock standing in front of you.  Why shouldn’t you tune me out? 

Well, I actually think Dean Orsak asked me to speak today precisely because of these limitations, and because you can learn from them.  At age 41, I am still very much in the game.  In fact and God willing, I have not even hit half-time.  I am not a “Hall of Fame” speaker standing here today providing gems of wisdom about my long, successful career.  But I am in the game right now, and I can provide some real-time perspective about what is working for me and what is not, and give you some insight into what you are about to enter.  And as many of you sports fans know: while carrying a lead into half-time might not guarantee victory, it certainly increases the odds.

So let me give you the “marketing” version of my career in the utility industry – which I presume is why I was invited today – in order to frame this discussion.  In 1998 at age of 30, I assembled a team who ultimately created Sharyland Utilities, the first new electric public utility in the U.S. in over 30 years.   Sharyland was created to serve a master-planned development Hunt owned in McAllen, Texas, on the Rio Grande river.  Five years after energizing our system, we broke ground on a 150 MW direct current interconnection between Reynosa, Mexico and McAllen – allowing for power to pass back and forth between Mexico and the U.S., but providing a “firewall” against importing a problem from the other side.   This was the first and still the only commercial-sized DC interconnection anywhere between the two countries.  Last year, Sharyland were designated to build over 250 miles of transmission lines in the western Panhandle region of Texas to bring thousands of megawatts of wind power to the more populated areas of the state.  And last December, we announced that we are acquiring Cap Rock Energy, a Midland-based utility whose service territory spans 14 counties in Texas. 

By 2013, we will be a $1 billion utility.  And we will finance this by employing a unique and exciting capital markets tool, a Real Estate Investment Trust, or “REIT.” We created this financial vehicle for utilities through a private letter ruling from the IRS, which effectively means that this is not a law, but a special designation for Hunt.  The ruling makes us very tax-efficient, and it is attracting a lot of capital providers who want to invest money into the utility industry, so we are aiming to develop or buy another $5 billion of assets in the next 4-5 years.

Now that is the end of the “spin.”  If your definition of leadership is shaping success by making brilliant decisions or doing extraordinary things, let me share with you the five critical actions that I personally did to get us where we are today.  I leave it to you to judge how they qualify on your scale of leadership.

First, I copied something I saw in the state of Georgia.  Before creating Sharyland Utilities, I was an electricity trader at Morgan Stanley, specializing in complex transactions.  I did a deal in Georgia, where I learned the utilities co-owned the transmission system to joint-benefit of all.  I thought this was a wonderful idea for our development, which oddly had two separate existing utilities serving different parts of it.  My theory was that a single utility owned equally by the incumbents, plus Hunt, would be vastly superior and much more cost efficient than having two or three entities with different tariffs and different business approaches bumping into each other. 

Well, the incumbent utilities hated this idea, and we basically went to all-out war in the regulatory process in Austin.  And when it looked like we were going to prevail, the other utilities actually quit our area, leaving it exclusively to us – which at age 31, I can assure you was not the intended outcome.  Nevertheless, it did put us in business.

Second, I read a report.  The Public Utility Commission of Texas put out a report in 2000 that said it would be beneficial to have direct current interconnections with Mexico in the cities of Brownsville, Laredo, and McAllen.  It was not a very exciting report, and not many people read it.  Perhaps it is a reflection of how exciting my private life is, but I did.

Third, I listened to our tax counsel.  Think of the most boring class you have taken, and double it.  Then imagine half of it is in a foreign language that sounds vaguely familiar.  That is pretty much what talking to a tax lawyer is like.  But in 2006, our counsel came up with a really wacky idea, which was to classify utility infrastructure as “real estate” for tax purposes.  I listened, and then fully backed this effort with whatever resources were required.  We have since received approvals from the IRS, our regulators, and our lenders.  This is a big deal for us.

Fourth, I went to a dinner.  In November 2006, I was invited on short notice to a dinner in Austin with four people I did not really know, dealing with the Texas Panhandle.  Remember, our utility is in the Lower Rio Grande Valley, about as far away from the Panhandle as you can possible be in Texas.  I went anyway.  We ended up putting together a diverse group that advocated expanding the transmission grid to the Panhandle, to bring the tremendous wind power capacity there to the rest of the state.  We are now slated to build a major portion of this grid around Amarillo.

Fifth, I cold-called a financial investor.  We were interested in Cap Rock, the utility based in Midland just south of our Panhandle activities, since 2007.  The owners were a financial group in New York, and when I first contacted them, they had no interest in selling.  Two years later on a slow August work day, I called again.  Again, they said they had no interest.  They called back the following day, and said, “Okay, let’s talk.”

These five actions are a major reason why I am standing in front of you today.  You may be asking, “Was that really leadership?  Is this a joke?”  Well, I have two messages that I think every engineer needs to follow to have any success in achieving what they are trying to do.

First, Communicate.  I cannot stress this enough.  I am not a stupid guy, but look at what defines my career…Copying an idea, reading a report, listening to a tax lawyer, going to dinner, and cold-calling. These aren’t exactly blinding acts of personal brilliance.  But they are basic, almost rudimentary forms of communication.  In fact, most major turning points – be they of historic proportion or personal – are almost always a function of communication – rather than individual achievement.

Let me give a specific example that most of you will know.  Steve Jobs of Apple is obviously a visionary.  The story about how he visited Xerox’s research facility in California and got the inspiration to create the “graphical user interface” that forever changed how people use computers, is industry lore.  But realize, he was invited to their facility.  That means that he actually had a relationship with someone to score the invite, and when it came, he actually went.  In other words, he chose to communicate.  Also, realize that if Xerox’s headquarters had better communications with their Palo Alto center, Job’s visit might have been moot, and we could very well be talking today about Xerox’s leadership in revolutionizing consumer technology – not Apple.

So Xerox’s managers were clearly a bunch of clowns who did not understand the genius of their engineers, right?  Well, they obviously did not understand what they had under their roof – but whose fault was that?   Who failed to communicate with whom?

Many of you are familiar with Dilbert, the comic strip centering on the noble engineer who must endure a clueless, pointy-haired boss, non-technical marketing colleagues who do not know engineering design and don’t care, and seemingly endless bureaucracy.  No one seems to understand the engineers who actually create the value in the organization.  Yet those that read the comic religiously also know that there are times when the engineers launch into techno-speak, which only they understand and enjoy.

Graduates of the Bobby B. Lyle School of Engineering, if you leave today remembering only one thing, it should be this:  Dilbert exists for a reason.  It is real, it is in every organization, and it is not quite as funny in real life.  And engineers are as guilty as everyone else in allowing it to be perpetuated.

I spent a short portion of my career in France, and I once lost an argument with my boss because I could not express myself in French effectively enough to win the point.  I was absolutely correct, but I could not articulate it.  I vowed then and there to never railroad someone in conversation or debate, because even though I could best them from an oratory perspective, they may still be right.  Engineers, let me be clear: you speak a foreign language.  I have seen it over and over again when an engineer cannot articulate his or her position well enough to carry the day.  You may revel in your native tongue, but you will go nowhere if you cannot figure out how to speak with others.

This has had profound and tragic consequences.  Dean Orsak makes the great observation that somewhere along the way, too many engineers allowed themselves to be defined as problem solvers, rather than solution providers.  This is a subtle but important distinction.  Solving a problem can be easy.  I can hire a consultant, Google it on the web, perhaps throw a few interns at it if it is not too complicated.  Solving problems is a tactical function.  You rarely need to see the big picture to solve problems.  I can have people in the back room do it.

Solution providers are totally different.  They are the folks that you need in the front room, around the table with the decision makers, forming strategies.  They tell you how to create something sustainable, repeatable, and valuable.  These folks create the big picture. 

Engineers used to be solution providers, at the forefront of creating the big picture for the U.S.  But over the past 40 years, two things slowly evolved.  First, as the problems facing our country became greater and more threatening, it was really helpful to have the engineers go off to a corner and solve them.  And second, once you guys were in the corner, you liked it.  You enjoyed spending time with other likeminded, intelligent engineers, speaking your own language.  You got comfortable – too comfortable, and communication with others ultimately broke down.  This was a terrible outcome for America, and we are only collectively now waking up to realize how destructive it was.

Graduates, your generation is different from mine and the baby boomers.  You are far more socially conscious, community-oriented, and driven to truly make a difference than those who preceded you.  And thank God, because the world really needs you fixing the problems that we have created.  But to do this, you need to get back into the front room.  And to do that, you are going to have to communicate.  First, to expose yourself to as many good ideas as possible – much like Steve Jobs did.  And second, to convince your organizations to implement those ideas.  Xerox’s engineers could not; Steve Jobs could.  The rest is history.

Do the simple math.   There are more of “me’s” – non-engineers – than you.  As I tell people who get frustrated when they pitch ideas to my father and do not get the response they wanted, “It is not his responsibility to figure out what you are saying; it is your responsibility to figure out how to ignite his imagination.”

Remember those courses that you took in Dedman College, Meadows, and the B-School…those “fillers” that helped keep your GPA up because they were not killer engineering classes?  In 5 or 10 years time, those ought to be the most important courses you took, because they exposed you to people who think, act, and communicate differently than you.  After today, you need to continue to seek this out.  Do things you are not comfortable with, with people who are different from you.  Do this, because the real world is not like an engineering school; the vast majority of people really are different from you.

So please do not allow yourselves to become Dilbert; the world cannot afford it.

My second message is equally simple: be passionate.  Whether it is your job, an extra-curricular activity or charitable activity, do it passionately.

You are already off to a great start in this area.  You are young, full of energy, and graduating from one of the most progressive and energetic engineering schools in the country.  But let’s face it – you are engineers.  You are not known for passion; that is usually reserved for the guys in the front room.  You are fighting a stereotype that is wide and entrenched.  And let’s be real; your first job is not going to be one where they hand you the palace keys and say, “have at it.” If you thought parts of SMU were monotonous or boring, just wait.

Being passionate can help you cut through these barriers.  Passion is easy to spot, and it is very difficult to fake.  Even clueless bosses can see passion.  Passion is what makes work fun.  It is a great differentiator, and differentiation is how you will step out and step up.

But there is another very important reason why passion is so critical, and it is something that will be very, very difficult for many of you.  You will experience failure.  Perhaps repeatedly, you will experience failure.  For many of you, this may be a first-time occurrence.   Not the sunniest of topics for a graduation ceremony, but if you want a real-time report from the playing field, it is the truth.

Now there are two ways to deal with this inevitable failure.   The first is to shrink your world to a size where you guarantee success.  You can always find a small enough pond so that you are the big fish.  There is a short-term comfort in being the big fish.  You look good.  I graduated summa cum laude from this university.  Although I obviously challenged myself at SMU, I can absolutely confess that there were times I could have taken a harder course, but I had a GPA in the back of my mind that I wanted to protect.  I could even argue that this was rationale behavior, because it played a critical role in getting to my next experience.

But there is a great song about this phenomenon, written by a band named the Eagles – who I realize peaked about the time that you were born.  It is called, “After the Thrill is Gone,” and I highly encourage you to download it, or at least Google the lyrics.  You can guess the theme, but one of the more poignant lines is, “You don’t care about winning but you don’t want to lose, after the thrill is gone.” Eventually, easy wins become a curse, because you get caught up in form, over substance.  You feel compelled to win, because you know you have stacked the deck in your favor.

Success achieved as a byproduct of “fear of failure” will feel hollow, and that will lead to unhappiness – and it is virtually impossible to be unhappy and passionate at the same time.

There is a much better way to deal with failure:  embrace it – with passion.  Virtually all great achievements were preceded by failure.  Thomas Edison’s rebuttal about the failures in his attempt to create the first light bulb – “I haven’t failed; I found 10,000 ways that didn’t work” is one of the more famous quips, but his situation is not unique.  If you are passionately pursuing something difficult – something worth doing – you will experience failure. But properly channeled, failure can provide creative inspiration, strengthen resolve, and instill a sense of humility that nature demands for tough challenges.  And being passionate about your efforts can make the trials and tribulations down-right fun.

Go back to Sharyland Utilities.  Our original business model of a three-party, co-owned utility failed – miserably.  And thank God it did.  If we had achieved our objective, we never could have gotten the other two utilities to sign off on a DC interconnection with Mexico, and the slower economic growth that McAllen, like the rest of county, endured during the last decade probably would have cratered the whole experiment.  Sometimes you must fail in order to succeed.

Many of you know that my wife Stephanie and I recently set up an Institute here to focus on the challenges facing the global poor.  Let me point out the obvious.  We are not engineers.  We are not exactly seasoned philanthropists.  And we have partnered with an academic institution, which is typically associated with “thinking” as opposed to “doing.”  There are so many ways this can fall short of its goal, I cannot possibly count them.  But I do know this:  Geoffrey Orsak is absolutely passionate about broadening the focus of engineering beyond traditional disciplines to include meeting the greatest challenges facing humanity.  We are passionate about helping in this endeavor.  And there is no replacement for the energy and vitality that students like you can provide to any challenging feat.  If we were afraid of failing, Stephanie and I would not be investing our time, effort, and energies to this relatively high risk strategy.  But we are willing to bet that a few passionate people of diverse backgrounds and a willingness to challenge conventional wisdom may be able to do a thing or two that can materially impact the world for the better.  And we welcome you to join us.

I am not saying failing is enjoyable, or that repeatedly failing at the same thing is necessarily a good course for success.  But let me also tell you something that your parents may or may not agree with.  For the most part, nothing in your 20s really matters.  Without kids and a mortgage, you really cannot screw up.  Not on my resume is a short stint I did with Exxon in France, which I referenced earlier.  I was fed up with the politics and bureaucracy at Morgan Stanley, and I wanted to work for a real company that made a real product, and not simply manipulate spreadsheets for financial gain.  Well after four months, I realized I had made a huge mistake.  Fortunately, I had been offered a job as a crude oil trader with the commodities group at Morgan Stanley before I left, and though when I called them back, they had already filled that position, they were just starting to look at electricity trading.  They offered me that role and I accepted, which was hard for me because I had to admit I had failed in my decision-making to leave Morgan Stanley in the first place, and failed to find happiness at Exxon.  That said, I learned a lot from the experience, both in terms of what I did not want to do in business, as well as the need to be flexible.  But I would not be involved in electricity today had I not made this mistake.

In fact, nothing in my 20s went according to plan.  Going into my senior year, I wanted to study at the London School of Economics, work at the Federal Reserve for a bit, and then return to the oil and gas sector.  And I thought I would leave Dallas for maybe 3-4 years before returning.  Instead, I lived in 4 cities, worked for 3 companies and moved 8 times in 10 years.  I deferred my admittance to LSE twice, and then blew it off.  I ultimately chose not to get an advanced degree, in part because my work experience was so educational itself.  Nothing went to plan.  And I would not have traded it for the world.  This is not a unique story.  Many of my friends have similar tales.  So for the next decade, go experiment, try, fail, and change direction when need be.  And whatever you do, do it passionately, and have fun.  You won’t be sorry.

So in summary, even though I am only half way through the game, from what I have seen so far, if you want to maximize your chances of being happy and achieving the goals that are important to you, you must do two things: communicate, and be passionate, as these are the only things that will get you past failure – and the only things that ensure you enjoy the ride.  Also, remember, Dilbert is real.  He exists because of poor communication and lack of passion.  And while it is okay to occasionally commiserate with him and laugh at the clueless people who do not understand you, never forget this: Dilbert lives alone, he talks to a dog, and he can’t get a date. 

Let me conclude with a saying that my father is fond of, that hopefully you will find as useful as I did.  Your reputation is like your shadow; it is always bigger or smaller than the real thing.  There will be times when people think you are the greatest thing they have ever seen, and times when people will think you are in way over your head.  Both perspectives will be wrong.  Those people are like the sunlight – easily distorted, enhanced, or blocked out.  It is best to ignore them.  If you are constantly communicating, staying passionate, and not afraid to challenge yourself, the real image of you will always be much more attractive than any shadow could ever be.

Thank you, and may God truly bless you in your endeavors.