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SCARPINO: This one’s live as well. So, as I said when the recorder was off, I’m going to read a brief statement and then lead into the interview that we’re going to do today. So, today is Thursday, November 29, 2018. My name is Philip Scarpino, Professor of History at Indiana University/Purdue University, Indianapolis, IUPUI, and the Director of Oral History for the Tobias Leadership Center also at IUPUI. I am interviewing Randall L. Tobias at his home in Carmel, Indiana.
This is the fourth and final recording session with Ambassador Randall Tobias. The first one took place December 1, 2017 at his home, the next two on February 15 and 16 at the Tobias winter home on Captiva Island, near Fort Myers, Florida.
I’ll note that there’s a biographical sketch of Ambassador Tobias’ career at the start of the first recording session. We will also have additional biographical information with the transcript.
I want to ask your permission to do the following: to record this interview, to transcribe this interview, and to deposit the interview and the transcription with the IUPUI Special Collections and Archives and with the Tobias Center where they may be posted all or in part to their websites and where they will be used by their patrons.
TOBIAS: Permission granted.
SCARPINO: Thank you so much. Our first recording session dealt largely with leadership and with you growing up in Remington, Indiana. Our second and third recording sessions we talked about your education and military service as an artillery officer, and we focused largely on your years with the phone company, your tenure as Chairman, President and CEO of Eli Lilly Company, and your government service.
I want to ask you a few follow up questions on leadership because that’s what we’re about at the Tobias Center, and then a few wrap up questions on your government service, and then we’ll talk about public service.
Leadership – much of the recent professional literature on the topic of leadership makes the point that leaders exist in a symbiotic relationship with followers. So, followership has become an important part and variable in understanding leadership. So, the first question that I have for you is that in the range of experience that you had as a leader, to what degree did you think about followers?
TOBIAS: Well, I thought about that a lot. There are certainly different leadership styles and I can think of people, as we all can, who have more of a dictatorial approach and expect followers to follow them though fear or coercion or whatever. Based on my personality and my general approach to leadership, I would never have been comfortable with that. So, I’ve always started with the premise that just because some higher authority in an organization puts your name in a particular box on an organization chart doesn’t mean that that’s all there is to it. Because I’ve always felt that the people that you’re there to support and lead are ultimately the ones who are going to decide whether you’re going to be their leader. And it just, in my view, works best that way. Sometimes I think the way in which they ultimately, or the reason for which they ultimately determine that you’re going to lead them is because they are inspired or they see the benefits of that leadership, or a whole range of reasons I suppose, but I do think that’s a very important concept.
SCARPINO: As you were answering the question, and I’m going to follow up on that in a minute, you used words like support, inspire and benefit; is that part of the package that you, as a leader, brought to your relationship with followers?
TOBIAS: Well, I’d like to think so. In fact, during part of the time I was at AT&T and at the suggestion of a consultant that I admired, we went through a period of time -- AT&T had been a very hierarchical organization and really needed to adopt what we’re talking about here, given the “new workforce” that was coming into the company. So we literally had the organization charts redesigned and reprinted from upside down from what would have been a traditional view. So, the head of the organization – it was sort of an inverse pyramid. So, the head of the organization was at the very bottom of the organization chart. The “lowest level people” in the organization were the line across the top of the organization chart. We started using probably hokey terminology like so-and-so is supported by rather than so-and-so reports to. It was a bit of an overkill I suppose, but it was important during that period of time to get people to understand that the role of people in the organization was not to make the people at the top of the organization happy; rather, the role of the people who were the most senior in the organization was to do everything that needed to be done to make it possible for the people who were doing the work closest to the customer to make it possible to do that work as effectively as possible, to be sure they had the training, be sure they had the tools, to be sure they had various kind of support.
SCARPINO: As I’m listening to you talk, it occurs to me that, unless I missed something, you never had any formal training in leadership. You didn’t go to leadership school, I mean, you were in the Army, but…
TOBIAS: Well, yes, I was in the Army and that was, I think, an important source of leadership training. I’ve become more aware in the nearly 55 years since I was on active duty as an artillery officer, I’ve become increasingly aware of a number of things that have impacted my entire life from that experience and that period of time. But I would also have to say that AT&T put a very high premium on training and development of particularly people who had been identified as high potential young people in their pipeline of future leaders and all the way up. So, I was exposed to a lot of seminars and consultants and that kind of thing over the years, but beyond that, I never went to, as you say, a leadership school per se.
SCARPINO: I want to work with that idea of followers and to put some information in the record in case somebody doesn’t want to go back and look at the first interview when they’re looking at this one.
You began work with the telephone industry in 1966 and by 1981, you’d moved to AT&T’s global headquarters in New Jersey. You started out as a corporate vice president, then rose to the executive leadership ranks. In 1986, you were named Chairman and CEO of AT&T Communications, which was AT&T’s worldwide long distance and network business. You served concurrently as Vice Chairman of AT&T from 1986 to 1993, and as Chairman and CEO of AT&T International from 1991 to 1993.
With that background, here’s the question. As you rose through the leadership/executive ranks at AT&T, how did you define your followership?
TOBIAS: Well, probably in retrospect, in the sense that I didn’t sit down much, if at all, and think about it in formal terms. I do think that there is, in the perennial debate of nature and nurture, I do think that there is some mix there. I think there are people who are kind of born leaders who perhaps do well without any help and training, but do much better if they have help and training and mentors and so forth. I think there are people who are born with no leadership instincts and you could give them all the training and exposure in the world and they still wouldn’t be very good leaders, and, you know, everything in between. I think, as we’ve talked a bit in prior interviews, and I too can certainly understand why, because we have talked so long, I can imagine why people aren’t going to want to go back and listen to it all, but I’ve benefited from the earliest days of my life from very strong leaders, if you will, in my parents, teachers and other people around me. As I think back on it, I’m really very blessed by the people who were around me. So, I think that probably had as much as anything to do with what I was doing as I went through the ranks. I think I was, in other words, kind of unconsciously emulating a number of the experiences that I’d been exposed to coupled with the fact that I’ve reluctantly come to believe over the years, in part because a number of people I respect have suggested this to me in one way or another, that I was just born with a different set of instincts with respect to leadership than maybe other people have. We all have different strengths. My three-point shot is not great, but…
SCARPINO: (LAUGHS) Well, I was laughing because one of the people I talked to compared you in leadership terms to Michael Jordan but said you didn’t have a three-point shot. I apologize for interrupting.
TOBIAS: (LAUGHS) Half of that’s true for sure. I do think that that was a part of it. I also would like to think that I learned, or tried to learn, from my experiences in terms of figuring out what was working and trying to get better at that and figuring out what didn’t work, and also by observing other people in both ways.
SCARPINO: When you were with the phone company in senior executive positions and realizing that, I would imagine that in those days people didn’t actually explicitly use the term followership the way we do now…
TOBIAS: No, no, they did not.
SCARPINO: … but as you look back on it, who fell into the universe that you would call your followership? Was it other people in management? Was it people who worked for the company? Was it your consumers? Where did you draw the line when you said you thought of yourself as a leader?
TOBIAS: Yes, yes, and I think we’ve talked about this in another context, but I think, speaking broadly, I think any enterprise, any organization or institution needs to be simultaneously focused on all of the people with whom it has some kind of relationship. So, in the business sense, or corporate sense, that involves not only employees, and within employees for a particular leader, it involves the people that report to that leader, the people to whom that leader reports and the people laterally with whom that leader relates and is dependent. And then beyond that, in a corporate setting, a leader better also be paying attention to the interests of the owners of the business, the customers of the business, the communities in which that business works and operates, the suppliers of that business, in other words, anybody -- the customers, if I didn’t say that -- in other words, anybody that really touches or is touched by that organization. So, the simple answer to your question is I don’t think there’s anybody in the circle or the sphere around a leader who isn’t important for that leader to be dealing with followership.
SCARPINO: As a leader in the phone industry, how did you go about developing a workable professional relationship with those overlapping universes and followers?
TOBIAS: I think one important way is to try to initially put yourself in the shoes and the mindset of the other individual and figure out not just what am I trying to get that other individual to do, but figure out what is the interest of that other individual and what can I do to come closest to meeting the needs of that individual in the context of getting done what I want to get done. Sales, for example, I think is not as simple as getting the customer to understand why you need to sell them something. It’s why are they going to be better off if they buy something from you than not, and I think in what we’re talking about here about followership, it’s the same thing. Very few people in the end are going to do difficult things just because you want them to.
SCARPINO: Would it be fair to conclude, that at least it’s the way you look at it, that part of the formula for being an effective leader is developing a relationship of followers in which you are able to persuade them to move in a direction or work toward goals that you’ve articulated?
TOBIAS: Yes, yes, and I think in the ultimate to make them want to.
SCARPINO: You left AT&T in 1993 and joined Eli Lilly Company Chairman, President, CEO, and as we talked about last time, under your leadership, the company experienced one of the most successful periods in its history. You retired from Lilly January 1, 1999. So, the question is, in those positions at Lilly – Chairman, President, CEO – who was your followership?
TOBIAS: Well, it was all the constituencies we just talked about. For example, when I became the CEO of the company, the financial community, and by that I mean people on Wall Street who analyzed and opined about the company’s financial condition and financial future and provided a great deal of influence over who was going to buy the stock in the company and what they were willing to pay for it, from individuals to large pension funds and so forth, they were pretty skeptical about the company based in some part from a lack of knowledge because the company’s leadership had, prior to that time, a philosophy of we’ll just do what we do and if we do it well, the stock price will go up, and if we don’t do it well, it won’t. My view was it wasn’t quite that simple. So, we started pretty quickly having meetings in New York and, in fact, here in Indianapolis also because the stock ownership’s pretty heavy in the Indianapolis area, but Wall Street in particular, we started having meetings with the financial community. And I did things like actually, that hadn’t been done before, like actually take some key leaders from Lilly research laboratories who instantly had a lot of credibility with the financial community because they were actually the people behind the scenes who were doing the research work. We had some people who were very articulate; they’d just never been asked to do this kind of thing. So, I put them in front of the investment community to talk about specific drugs that were in the pipeline. So, anyway, something that simple had an impact on that particular constituency, and that contributed to the stock price going up. When the stock price goes up, that has an impact on the attitude of the employees, the willingness of the employees to follow because, in effect, employees may be saying, “I don’t know what you’re doing up there, but I’m going to follow you because it seems to be working,” and there’s an interrelated impact of all these things.
SCARPINO: You left Lilly in 1999, but I’m not even going to use the word retire because it doesn’t fit. So, 2003, George W. Bush nominated you and the U.S. Senate confirmed you to serve as the United States Global AIDS Coordinator with the rank of Ambassador. January 2006, President George W. Bush calls on you again, appointing you as the nation’s first Director of United States Foreign Service with the rank of Deputy Secretary of State, and nominated you to serve concurrently as the Ambassador of the United States Agency for International Development, USAID. So, now you’re in government, which is, there are certainly differences between government service and the private sector. How do you now define your followers as a rather senior government official?
TOBIAS: Well, as a senior government official, it’s pretty tough to identify anybody who wants to follow anybody.
SCARPINO: I guess that’s a fair enough answer.
TOBIAS: But that was one of the more challenging and frustrating periods in my life as a so-called leader, and at the same time, it was one of the most rewarding. It is honestly very difficult to get -- other than one particular constituency, and I’ll come back to that -- it’s very difficult to get the people where you have this interdependence to think about following. One of the reasons for that is that these various interest groups often have competing interests themselves. Four hundred thirty-five (435) members of the United States House of Representatives, if I may say so with some cynicism at this stage in my life, the primary public policy issue in the minds of, let me just say many of those 435 members, the primary public policy interest they have is what is the impact of the position I take on this issue on my ability to get reelected, and the behavior is pretty much like that. The examples of Profiles in Courage, as I frankly told a congressman within the last few weeks, the lack of examples of Profiles in Courage is pretty great and particularly now as we speak, in a very challenging time in the history of the country. But at the same time, in the role I was in, Congress controls particularly the House because of its constitutional role, Congress controls the purse strings. So, if you’re going to get done what you need to get done, you need to understand, which is difficult for most people coming into this role, including me, you need to understand you’re probably not going to get 100% of what you were trying to do done because in the course of doing that, you’re going to have to meet the needs of the people who are going to have a say about whether you get the money to do what you’re supposed to be doing. And sometimes their needs aren’t exactly on a straight line between here and the goal line, but you need to understand that. It’s very different from life in the corporate world where you come much, much closer to all the various constituencies having some amount of, but a great amount of alignment in where you’re trying to go.
SCARPINO: You coordinated President George W. Bush’s AIDS program. By the time he put you in that position, it was pretty clear to most people who could read that AIDS was a serious crisis and it wasn’t just a crisis that applied to gay men; it was if you get a blood transfusion, you’re at risk or whatever the case may be, but it was becoming a global crisis. Did the gravity of that crisis help when you went to Congress looking for money or was there still a hard time getting the ball across the goal?
TOBIAS: No, the gravity of the crisis was pretty well understood. Without going into great detail, what you just said is absolutely correct. In fact, in Africa, unlike in the United States at the time, AIDS was more of a disease of women than it was in men. It was spread either though heterosexual activity by men who had, by U.S. standards, behaved promiscuously and had become infected and, in turn, infected their wives and others, and in some places in the world, by intravenous drug use and needle sharing and that kind of thing. That was pretty well accepted by the Congress in a bipartisan way. What to do about it was not well accepted in a bipartisan way. Surprisingly, political interests seemed to line up on one side or another pretty consistently on what the best way to deal with it was. For example, …
SCARPINO: You’re talking about democrat or republican?
TOBIAS: … I’m taking about democrat, republican, or liberal conservative or social conservatives versus people pretty far on the left. As one example, I can recall, on actually more than one occasion, but one occasion in particular, I can recall testifying before the House Committee on Foreign Affairs and where the questioning alternates between a republican member and a democrat member in descending seniority order. And I remember being somewhat berated by a liberal democrat for the fact that we were not buying and distributing condoms in great enough quantities to satisfy this particular member. Now, the fact was that in my very first year as the Global AIDS Coordinator, I purchased, on behalf of the government, more condoms than the Clinton Administration had purchased in eight years, but that wasn’t good enough.
SCARPINO: I shouldn’t be chuckling because it’s serious, but I just wondered if you put that on your resume.
TOBIAS: I didn’t put that on my resume, but I’ll put it on the record…
SCARPINO: No, you certainly did, yeah.
TOBIAS: … and, but that wasn’t good enough. And this Congressman, actually a woman, was not really even talking to me, as often they are not, they were talking to some constituency, and berating the Bush Administration with me being the symbol for the fact that we were embracing, in their view, views of the social conservatives that abstinence was the right answer.
SCARPINO: Was that your point of view?
TOBIAS: Well, then it came time for the republican, the next republican, where I was berated for the fact that we were buying, in that member’s view, too many condoms and that the use of condoms, in that member’s view, simply promoted more sexual activity and that the true answer was abstinence. The fact of the matter was that our philosophy, which really came from work that had been done in Uganda and had been demonstrated as being reasonably successful, was something that we called A, B, and C. A meaning the very best way to control the spread of AIDS was abstinence, A. If that didn’t work, and in my own view and in most cases it doesn’t, then the next approach is B, which is be faithful to a partner, or in some African cultures, be faithful to partners because you might have four wives. If a man was faithful within that circle of four wives, that was better than going outside that circle. And if that didn’t work, then we came from A and B to C, which was condoms. So, that was essentially the approach and it was not one or the other, but there were single-minded people who just wanted us to do one or the other. I think I could go around to all the constituencies that had impact on this and make similar examples that people were really heavily focused on their own self-interest. I will say that, in my mind, the reason that PEPFAR was so successful, and there were many, many reasons, but began with the fact that there were hundreds and really thousands of very, very dedicated individuals, Americans and locals in the various countries in which we were working, of all political persuasions, who were so dedicated to trying to get something done and so frustrated by the lack of support and resources and help over the years, that what they were so hungry for was leadership, and for leadership that could say, “Okay, here’s the strategy, here’s where were going, I’ve got the resources to go there to help us do what we need to get done, but I, on the other hand, as your leader don’t really have a clue how best we’re going to get from where we are to the objective we have, and I need everybody’s help going in the same direction,” and people really signed up for that. So, it was, in some instances I’d have to say, a success in spite of, rather than success because of, a lot of the other constituencies, particularly in Washington.
SCARPINO: Anyone who listens to this interview now is likely to have a modern-day context on the ability to treat AIDS medically. At the time that you were the head of PEPFAR, were the drugs available to deal with the disease?
TOBIAS: The antiretroviral drugs were just beginning to become available. And, more particularly, so-called cocktails or mixtures of different drugs that were interacting in a very positive way together, that was just coming about, but the availability of those drugs was not great. Then the distribution mechanisms, that is to say the physical ability to round up the drugs, get the drugs to where they needed to be in the field, have the medical personnel trained who could provide the treatment, putting the mechanisms in place so that the patients were willing to take the treatment, because there was a lot of folklore particularly in rural Africa about all that, so getting all those piece parts together. And then, of course, there was a lot of controversy about what drugs and where they came from and so forth, and again, that was very politicized because there were people who just started with the premise that the pharmaceutical industry is bad…
SCARPINO: And you, of course, had come from the pharmaceutical industry.
TOBIAS: … and I came from the pharmaceutical industry. I naively, that didn’t occur to me until after I got there and figured out that in some people’s minds I was the enemy for that reason, because I thought perhaps I brought some knowledge that might actually be helpful in doing all this, but there was a presumption, either driven by sincere beliefs or driven by political motives or somewhere in between, that we shouldn’t be buying drugs from American pharmaceutical companies because the prices would be too high and it was going to serve the self-interests of big pharma and so forth, and a lot of pressure on me to buy what people described as generic antiretroviral drugs when, in fact, what they didn’t understand is that generic drugs, as we know them in the United States, are the bioequivalent of the original drug that comes from a research pharmaceutical company. And before a generic drug can come on the market, it goes through the same rigorous testing, or review of the testing, by the Food and Drug Administration before it’s permitted to come to the market. There were providers, manufacturers of so-called generic drugs around the world who wanted us to buy drugs, and there were pressure groups who didn’t understand who wanted us to buy those drugs because they were cheap, who didn’t understand those so-called generic drugs hadn’t been through this process. So, there were a lot of complexities and a lot of self-interest and a lot of biases and so forth in all this.
SCARPINO: What were the leadership challenges that you faced?
TOBIAS: Well, the leadership challenges were the same as leadership challenges in anything. My experience over time is that you can change the names and the faces and the products and the services and all that, but it all pretty much boils down to the same issues. And it starts often with a strategic focus of what is it we’re trying to get done here, where are we trying to go and how do we get from here to there, then how do we come as close as we can to getting all the people who are going to have an impact on all this to buy into that, or at least get out of the way, and help move it all in that direction. So, from 30,000 feet, those were kind of the same challenges.
SCARPINO: You talked, as we’ve been visiting here, about the successes of PEPFAR. If you could go back and have a re-do, is there anything that you feel didn’t quite measure up to what you hoped it would?
TOBIAS: Well, I think the biggest thing is that we did not make nearly as much progress in the prevention of HIV and AIDS as we had hoped. Our focus was on prevention, treatment and care; in other words, trying to stop the flow of new cases into the pipeline, trying to treat those people who were already infected, and then trying to provide care for those who were in a variety of ways impacted. One of the biggest categories of that were the tens of thousands of orphans who were, in many cases, on the streets because their parents had died of AIDS. So, it was those three things. We made huge progress in treatment by getting the drugs, getting the drugs available, developing techniques to get people to adhere to the protocols of taking the drugs, and so forth. We made huge strides in providing care in various ways for orphans and others who were impacted. We had much less impact on changing human behavior in ways that really impacted prevention. On the 15th anniversary, roughly, of the implementation of PEPFAR, I’d have to say that 15 years later, I don’t think there’s been great progress on that front either. There’s been more progress on the medical side of further developments and potential vaccines and other drugs for prevention that way and other drugs for treatment, and I’m not as up-to-speed on that because I don’t follow it as closely as I obviously once did, but it’s still kind of the Achilles heel of the whole subject.
SCARPINO: You served as Director of the United States Foreign Assistance, USAID, 2006 to 2007, and we’ve already discussed that, but while you were serving in those positions, you reported to the Secretary of State, who, at that point, was Condoleezza Rice. How do you assess her as a leader?
TOBIAS: Well, I think she, like all leaders, she had some great strengths and probably some not, but on balance, I saw her as a very strong leader. She was an incredibly smart individual, very personable individual, for the most part had very good people around her, particularly those people that she had a big hand in selecting. And, of course, that’s one of the big problems in Washington, even for Cabinet officers, is there are other people who choose the people who work for you, for political reasons and they’re not all of the same caliber. She was very strong and very supportive, but she was a very politically savvy person, which is one of the reasons she’s a life-long survivor in that kind of environment. But by political savvy, I mean that in the most positive way because she really understood the realities of what could and couldn’t be done and the realities of how best to get it done. She was very supportive of what she and I were trying to get done in really making major changes in the way in which U.S. foreign aid was delivered.
SCARPINO: As I mentioned to you the last time we spoke, I ran across a speech you gave titled “Transformational Diplomacy: Sharing the Vision.” It was given to the Society for International Development in which you talked about unveiling a new strategic framework for U.S. foreign assistance. Then you went on to say the following, and I’m just going to read it to get it in the record and then ask you about this.
You said, “Over the next few months, the field will focus on developing integrated, coherent tactical plans for the achievement of results, based on the strategic vision we’re providing from Washington. Called Operational Plans, these tactical plans are designed to link planned funding to planned activities, to planned results and will answer four key questions:
Who is our partner in putting foreign assistance funding to work?
How much money are they getting to implement programs?
What are they planning to do with the money?
What have we mutually agreed will be achieved?
As I read that over again before I came up to talk to you today, it seemed to me that in leadership terms, when you gave that speech, you were following a pattern that had worked for you at AT&T and at Lilly and PEPFAR, and that is understand the context with its strengths and challenges, develop a vision, create an operational plan for implementing the vision, and then use your leadership position to sell and implement the plan. Is that a fair assessment of what you were doing because you were, I assume you were sort of learning about foreign assistance and foreign aid on the job…
TOBIAS: I was.
SCARPINO: … so what you must have brought to that was leadership skills.
TOBIAS: I was. What the President had in mind and the reason he and the Secretary asked me to stay on after I told them, after two years in PEPFAR that I thought it was time for me to go back to my real life, what they had in mind was that I would bring the lessons learned and the experiences of PEPFAR to the rest of foreign aid/foreign assistance because PEPFAR was perhaps the most successful element of, or program in foreign assistance. But more broadly speaking, yes, it was learning about it. And it was a very, very difficult time, as we’ve talked about earlier, because in the case of PEPFAR, pretty much all of constituencies were aligned around the need to address the AIDS crisis in the world. Where they differed was on how best to do it. In foreign aid, broadly, people were much less aligned about what it was we were trying to do. Enough years have passed that I don’t mind being totally candid. On one occasion, when I was briefing a very small, very senior group including President Bush and Vice President Cheney, and I was describing what it was we were trying to do here, and I remember talking about using our foreign aid dollars strategically in order to be sure they had a more focused impact, and I recall Vice President Cheney saying to me, “Why would you want to do that?” because he really came more from a history of using foreign aid dollars as a way to persuade sometimes recalcitrant leaders in various countries around the world to change their behavior or to help assist things we were trying to get done around the world…
SCARPINO: So, it was a part of Cold War policy.
TOBIAS: … yes, very much. It was a part of Cold War policy and there wasn’t anything, I don’t mean to ascribe any evil intent to what the Vice President said. It represented a broad range of people who felt that way, that our foreign aid dollars were really there to use in ways to get foreign governments to do what we want them to do. That was not what I was trying to get done, it was not what Secretary Rice was trying to get done, and it was not what the President was trying to get done. So, my point is that one of the differences between PEPFAR and foreign aid at-large was that in broader foreign aid, one of the hurdles was to get people to even buy into what the fundamental objective was.
SCARPINO: I want to go back to those questions that you raised in that speech that you gave. You know, who is our partner in putting foreign assistance money to work, how much money are they getting to implement the programs, what are they planning to do with the money, and what have we mutually agreed will be achieved? I’m wondering, I mean, you obviously came out of a history of planning and rationalizing processes and so on, but how do those questions that you posed reflect what you were trying to get done in your new position?
TOBIAS: Well, I think listening to those questions this morning, you know, a decade later, I think they were the right questions. I think they remain the right questions today, and I think they apply to virtually any leadership challenge in one or another that you could think of. It’s who are the people involved that need to be engaged to get something done and, in this particular case, my bias then and now was that organizations, individuals who were as close to the action in the field as possible, were the most ideal partners. There’s a whole industry in the beltway in Washington of organizations who depend on government funding for whatever activities, humanitarian or otherwise, that carry on around the world. They’re the ones that would like to have the money and, in turn, use their programs, and for the most part, they’re very well-intended and many or most of them are pretty successful. But my view was that what we ought to do with foreign aid is to get local organizations trained and funded and skilled so that we could go home, that this was not something that ought to be a life-long occupation. That was not a view shared by a lot of these organizations in Washington. At any rate, so it was a matter of identifying who those organizations are and then on down the list of let’s be sure we’re all together on what it is we’re trying to get done together, let’s be sure we understand how that money is going to be spent in getting all of that done. And then, at the very end and not reflected in those questions, is when we figure out how we’re going to measure whether or not we got that done, that’s going to be the determinate on what we’re going to do going forward, which may be changing what we’re doing or it may be withdrawing funding and going someplace else and funding something else.
SCARPINO: And that’s actually where I was going to go with this. It sounds to me like those questions create a framework for generating and measuring deliverables and for accountability.
SCARPINO: And is that part of your leadership formula?
TOBIAS: Yes, yes, accountability is a very important part of it to the degree I have a formula, and this was kind of new to government programs in general, and foreign aid programs specifically. When we started out at PEPFAR, and I applied the same approach, there were organizations that were totally befuddled about what I meant about accountability. There were many, many organizations then, and I’m sure now, that with total pride measure their success on how much money they raise and how much money they spend. That’s what they believe – you know, if they raise more money this year than last year and they spend more money this year than last year, that’s success. Their annual reports will tell you how much they spent in their programs. Many of them are a little light on meaningful measurements on not only outputs, but more importantly, the outcomes of what actually happened, let alone somebody who’s providing funding saying, “And if we don’t achieve what we’re trying to get done, we’re going to put the money someplace else.” For many people in organizations engaged in all this, that was a different way to think about it.
SCARPINO: One more question about the speech that you gave, just because it provided some interesting food for thought. “Transformational Diplomacy: Sharing the Vision,” you said in there “when change is afoot, it’s human nature to assume the worst – so in our staff meetings at USAID I started to include an agenda item called ‘rumor of the week,’” and we actually talked about that last time, the rumor of the week part. So, I want to step back a little bit and, if we look at leadership more generally, is being prepared with an understanding of how people are likely to respond to change and the ability to manage that response part of the mark of a good leader?
TOBIAS: Yes, yes, and I think, in my experience of a universal truth, is that one of the things in life that is inevitable is continuous change. At the same time, one of the things in life that seems inevitable is people resist change. And people resist change, I guess, because they fear that the impact of change is going to be negative on them. People who are successful in an environment of change are people who see change as an opportunity to prosper in a new environment. And I think we’ve discussed that, if you go back in business history, it’s relatively rare in corporate history to find circumstances where there were major changes that were totally altering of circumstances, where there have been large successful enterprises that were successful in the old environment that are able to make the transition and are successful in the new environment. Back when I worked for AT&T, and at its peak, AT&T was a million people, no one would have imagined that one day AT&T in its then form would essentially no longer exist. As we speak, General Electric, which has been going back to the days of Thomas Edison, General Electric, one of the great rocks of American business, would be approaching junk bond status. And if I were to predict the future that will be fact when a lot of people might be reading this transcript, I would not predict a terribly rosy outcome for General Electric when all this flows through. So, the ability of organizations to embrace change and turn it into something positive is really a very, very difficult leadership challenge.
SCARPINO: April 2007, you left government service; we talked about that last time. I want to transition to a few of the many things that you did in your career that generally fall into the category of public service, and I lumped a lot of things into that category. There isn’t any way in the time available we can talk about all your public service, so I tried to narrow it down to things that you did that were related to Indiana and to include some questions on leadership.
I want to begin by asking you about some public service that took place while you were serving as Chairman, President and CEO of Eli Lilly, which I’ll remind listeners was 1993 to January 1, 1999. While you were holding down what must have been more than a full-time position, you also agreed to serve as Chair of the Committee to bring the NCAA Headquarters to Indianapolis. So, on June 1, 1997, the Joint Policy Board of the NCAA met in Chicago and they voted to move the headquarters from Kansas City to Indianapolis when their current contract with Kansas City expired in 2000. I did a lot of background reading, but among those things, I read a newspaper article dated June 2, 1997, which said the following:
“NCAA leaders were welcomed to their future hometown Sunday, a day after announcing the college sports organizing body will move its headquarters and Hall of Champions to Indianapolis. They were greeted by Governor Frank O’Bannon, city officials, business leaders, the consortium that put together the $50 million incentive package that lured the NCAA from its long-time home in Overland Park, Kansas.”
So, I want to start by putting a little bit of context into the record and then kind of probe into your work on this topic. Why did you decide to get involved in the effort to lure the NCAA Headquarters to Indianapolis? It wasn’t like you didn’t have anything to do.
TOBIAS: Well, I don’t want to overstate my role in this because there were a number of leaders in the community who were deeply involved in this, starting with my lifelong friend, Jim Morris, who has had a long interest in the strategic importance of amateur sports in Indianapolis as a catalyst for economic growth. The late Bill Mays was involved in this, just to think of a couple of people. I suppose I should tie this back to a point we talked about a few minutes ago and that is that in leading Lilly, it was important to – if Lilly were to be successful – to address the needs of all its various constituencies, and one of those is the community in which the company works, the community in which the company’s employees work. So, the viability and success of Indianapolis is and should be very important to the leadership of Lilly. Bringing the NCAA Headquarters to Indianapolis, the prestige that brought to the community, the jobs that brought to the community, the enormous number of meetings that the NCAA has, you can’t get on a commercial flight going in or out of Indianapolis today without seeing somebody going up and down the aisles with the logo of some college or university on their briefcase or their jacket or something. They’ve either been here or are coming here for some kind of a meeting associated with the NCAA, and that means hotel rooms, it means restaurants, and you know all the rest. So, one of the really important responsibilities for the CEO of a company like Lilly is to do just that. My role was, I guess as I think back on it, probably two-fold. One was to help interface with the senior leadership of the NCAA, their governing body made up of a group of prominent university presidents, and with the professional leadership of the NCAA. At the time, the CEO of the NCAA was a man named Ced Dempsey, who had had a very successful career as a college athletic director and then had been at the NCAA for some time – very thoughtful man, very, in my view, a very good leader. So, it was a matter of interfacing with them, persuading them that it was in their best interest, not Indianapolis’s, it was in their best interest to move the headquarters to Indianapolis. Then the other maybe even more important part, was to help raise the $50 million from various interests in Indianapolis. One of the things that you have available to you as the CEO of a company like Lilly in Indianapolis, is the so-called bully pulpit of getting people to accept your calls, getting people to agree to meet with you, and getting people to say yes to requests like this, and people in the business community were very generous. I remember, in particular, going to see Herb Simon, the owner of the Pacers, and Herb, along with his brother Mel, the founders of the Simon Property Group, a huge successful real estate organization, shopping mall organization, I remember going to see Herb and in effect explain what we were doing and Herb’s response, in effect, was “how much do you want?”
SCARPINO: Did you say $50 million?
TOBIAS: No, I had a much more modest and realistic number in mind that I felt was appropriate for what they had done elsewhere and their relative size in the community. But Herb was an example of somebody who had been, and their organization was, and continued to be very generous in the community and it was a matter of taking the time and energy to go around and do a lot of that kind of thing.
SCARPINO: When you go out to make an ask like that, is the preceded by background research so you have some idea of the giving patterns and what they’ve given in the past and how much they give?
TOBIAS: Yes, and one would hope, and it’s usually the case, that the staff work that other people are doing to help you do that is what really makes that possible. So, the time you’re really spending individually is one of getting up-to-speed with a lot of work that other people have done. Tom King, a man for whom I have great admiration, who had been around the leadership of Indianapolis for a long time, had been the head of the Indianapolis Chamber of Commerce, had worked for Walker Information for some time, and I hired him at Lilly to run the Lilly Foundation, the company’s foundation and philanthropic arm. So, when I agreed to take on this role, I picked up the phone and called Tom and said, “Tom, you have a new assignment.” Tom, in effect, became my eyes and ears and brainpower and energy in much of the heavy lifting of really getting this kind of thing done. I think there’s an important lesson here in kind of thinking about what I’m telling you, and that is that people sometimes get fooled in looking at an individual in an enterprise and thinking leadership involves what that individual does and fails to do; and, in fact, leadership involves a whole bunch of people and the person who’s identified is often the tip of the spear, so to speak, but these things wouldn’t happen without a lot of people doing a lot of hard work.
SCARPINO: Although, if it doesn’t work, they may be the one who falls on the spear.
TOBIAS: Well, that’s true. It kind of cuts both ways. I’ve often felt in these kind of leadership positions that you get credit when things go well often to a greater extent than you individually deserve, and by the way, I think many leaders over time suffer from believing their own press and believing everything that people tell them. And conversely, it’s true that you probably get more blame than you deserve sometimes when things don’t go well.
SCARPINO: Well, and you correctly pointed out that nothing, like say bringing the NCAA to Indianapolis, happens because one person gets an idea and does it alone. But would one then conclude that one of the measures of an effective leader is to put together that team that allows it to happen?
TOBIAS: Yes, yes, it is.
SCARPINO: You hired Mr. King.
TOBIAS: Right, and yes it does, and that’s one of the important attributes of leadership, is to select the right people, select the right organizations. You go back to the speech I gave in Washington that you were talking about, the very first point was in determining what organizations you’re going to partner with to get something done. So, that’s a, you’re absolutely correct; that’s a very important part of it.
SCARPINO: So, just quickly, who were the other cities that were Indianapolis’ main competition?
TOBIAS: I don’t recall exactly, but what the NCAA did was very skillful. They were located, and had been for a long time, in Overland Park, Kansas, a suburb of Kansas City. They did not believe they got any strategic benefit from being there. They had no meaningful synergistic relationship with the Kansas City community and they believed there were places around the country that they could. They put together a list of attributes of a city that might be a better place for their employees to work, easy to get in and out of, the nature of the community might be more conducive to consistency with their mission and activities and so forth. They made a list, with a consultant, of I believe 25 cities before they made any public announcement. They then said, “Our lease is about to expire; we’re going to consider moving to another city. We may stay right where we are, but we’re going to consider moving to another city. We’ve already gone through a screening process and here are 25 cities that we believe are potential places for us to go, and we’d be interested in accepting proposals from those cities and then we’ll go from there.” And they then, as I recall, fairly quickly cut it down to I think 10 and then began making site visits and all that kind of thing. One of the things that we had going for us in Indianapolis was that the leaders in the community many years before had developed this strategy of amateur sports. So, there was probably no city in the United States that had a focus on amateur sports in a way that was so consistent with the mission of the NCAA, including the fact that we had already become the most desirable city in the country to host major NCAA competitive events, most particularly the men’s Final Four basketball tournament, because of our facilities played games, as well as the proximity of walking distance of hotels and restaurants, which most cities just don’t have. So, we had a lot of things going for us, and my guess is that, in the back of the mind of Ced Dempsey and others, they probably had a hope that Indianapolis would put together the kind of a bid that would be compelling. And interestingly, one of their criteria was that they wanted to move with no cost. That is to say, they wanted somebody to provide them with a new building and they wanted somebody, a city that would provide covering all their expenses to get moved from where they were to where they were going. That was part of the $50 million that we raised. And my view, in retrospect, and I think this would be shared in the business community, my view, in retrospect, is that the investment that the public and private sector jointly made in that effort has paid the community back many times.
SCARPINO: I will say, just for the record, that that article I read described you a major player in putting together the incentive package, which you’ve indicated was one of the things that you did. I’d like to talk a little bit more about that incentive package, which the newspaper article mentioned, $50 million, $15 million in pledges from local businesses, $10 million from the Lilly Endowment, the State of Indiana approved $10 million, and $10 million in non-cash support. So, you have already indicated that one of the things that you did, with assistance from your staff and so on, was to help raise that $15 million in pledges from local businesses and you mentioned Simon Company – what are some of the other businesses that contributed to that fund?
TOBIAS: Well, I can only guess at the moment because they would have been whoever the leading companies were in the community at the time, but I’m sure the banks, One America, I’m just not…
SCARPINO: Well then, I mean I’ll just say it for anybody who wants to follow up on this, there are actually extensive archival records available where people could look this up.
TOBIAS: Yeah, I’m sure there are. By the way, for the record, Herb Simon gave me a million dollars, and if you put that in the context of $15 million from the private sector, that was a pretty generous contribution.
SCARPINO: But isn’t that sort of a standard fundraising tactic, that you go for a big gift and then that attracts the other gifts and…
TOBIAS: Sure, yeah. Herb’s been in my office. (LAUGHS)
SCARPINO: So, did you play a role in submitting the proposal to Lilly Endowment?
TOBIAS: I’m sure I did. I have and I’m sure I did in that case. I really don’t remember specifically. One of the things, and I don’t know if we’ve talked about this before, but one of the things that we did that’s illustrative of the work of the private sector and the public sector together that I thought was very creative, it was not my idea, but I thought it was very creative, and that is that at the same time this was going on and we had selected the site that we proposed in the White River State Park, where the NCAA is now located, next to the zoo and along with the Indiana State Museum and the Eiteljorg, the Indiana State Museum was being constructed at the same time. Part of that construction involved a pretty significant underground parking facility. We needed to provide a parking facility for the NCAA Headquarters. So, one of the things that the state government did is appropriate funds from the state legislature, and then approved by the governor, that oversized the parking facility for the State Museum and it is shared by the State Museum and the NCAA Headquarters. So, there’s a case where instead of having to raise separate money to build a parking facility for the NCAA, the state’s contribution or part of their contribution was to help in that regard, and I thought that was – in a lot of cities, I don’t think that would happen.
SCARPINO: That really makes it convenient for somebody to go to the State Museum, the NCAA, and the Eiteljorg.
TOBIAS: And the cost of doing that per car parked, let’s say, I’m sure was significantly less than it would have been had we built a separate parking facility.
SCARPINO: So, did you play a role in persuading the state to appropriate money?
TOBIAS: I’m sure I did, but I didn’t have the lead role in that.
SCARPINO: The article also mentions $10 million in non-cash support. What would that entail? I assume that’s kind of in-kind, but…
TOBIAS: Yeah, you know, I’m sorry to be a little foggy on that, but it’s been a long time and I haven’t really thought about it, but I’m sure there were various, I’m guessing here, but there were probably hotel rooms that were covered in the process and restaurant fees that were provided and automobiles that were provided, and all those kinds of things that various people in the community did.
SCARPINO: Now, as you obviously pointed out, you had a lot of help, but you did chair that committee. So, what were some of the leadership challenges involved in successfully bringing the NCAA here?
TOBIAS: Well, it begins with getting people to agree that it’s a good idea. Sometimes if people haven’t really thought about this and they’re focused on other things, people could probably make an argument that if the state is spending money that’s appropriated for this purpose when in fact we crumbling bridges or roads or other priorities, why don’t we do that? So, sometimes people try to put things into a context of either or, as opposed to we ought to be trying to do all these things. So, that’s certainly a challenge.
SCARPINO: Who was the governor while you were doing this?
TOBIAS: Frank O’Bannon was the governor and Frank’s wife, Judy, was the prime mover in wanting to get a new state museum built. I think had it not been for Judy O’Bannon, that probably would never have happened, and if the state museum had not been built, that would have been another obstacle, as we just discussed about parking for the NCAA. So, lots of fingers in the pie here.
SCARPINO: You experienced serving in government, you had served in public administration – for anyone who doesn’t know, Frank O’Bannon was a democrat – did that ever oppose any obstacles?
TOBIAS: Well, in those days…
SCARPINO: In other words, you were sort of working across party lines here.
TOBIAS: … yeah, well, but in those days, nobody much cared. In those days, people got elected on a partisan basis and people had issues related to their – what today we think of as their base – but one of the great attributes in Indianapolis in certainly the ‘60s, ‘70s, ‘80s, and ‘90s and today also is the ability of the public sector and private sector and not-for-profit sector to work together harmoniously in trying to get things done. We’ve had mostly republican mayors in Indianapolis, but in more recent times, we’ve had democrat mayors, and I consider every single one of them a friend. There’s just been a really been a great record in Indiana of people working together. And, you know, when you’re trying to get something like this done, for example, there were people involved in the private sector in our group who had more of a tradition of supporting and helping to fund democrats who played more of a lead in dealing with the Governor’s staff and the Governor’s Office, and so forth, whereas if there had been a republican in the Governor’s Office, it would have been somebody with a republican tradition, but I considered Frank O’Bannon a friend. Frank and Judy, in their time, have been to my home for dinner and Christmas parties and various things, and that was just not uncommon.
SCARPINO: Frank O’Bannon quoted in the same article I’ve been referencing, and talking about the NCAA Headquarters, “It’s a big investment, a good investment… a return will come back to the State of Indiana many, many times over.” Was he right?
TOBIAS: I think he was right, yes, I think he was right. Those are words you would expect someone to say when they were putting state money into a project.
SCARPINO: No, I understand, but now we’ve had some time elapse.
TOBIAS: Yeah, I think with retrospect, I’m proud of having been involved in that project. I think there was an enormously natural marriage between the NCAA and Indianapolis because of our historic focus on sports as a business here.
SCARPINO: Well, and that’s the last question I want to ask you about this, but luring the NCAA Headquarters to Indianapolis was sort of a culmination of a long revitalization campaign by the city to sort of come back from Indianoplace, which I believe we talked about in the past, part of which involved refashioning Indianapolis into a center for amateur sports activity. I think of the 1982 National Sports Festival, the 1987 Pan American Games, the construction of very good sports facilities for swimming and track and field on the IUPUI campus, which also helped to bring IUPUI into existence, did you play a role in any of those?
TOBIAS: I really did not, particularly not in the early days because I didn’t live here. Those were during the time that I worked for AT&T. The two names that come to my mind who were most instrumental in all of this are Dave Frick and Jim Morris. Both Dave and Jim are people that I went to IU with in the early ‘60s and have been lifelong friends. Both, at one time or another, served as Deputy Mayors, Jim for Dick Lugar when he was the Mayor, and Dave for Bill Hudnut. Dave was heavily, heavily responsible for getting, for example, doing the negotiations and getting what were then the Baltimore Colts moved to Indianapolis. I give Dave Frick, and I think most people would, the lion’s share of the credit for getting that done, but they and others were heavily involved in that effort. Indianapolis, in my view, would be a very, very different place today if people like Dave and Jim and others had not stepped up at that point in time and said, “We need to develop” – again, it’s the same leadership principles we’ve been talking about – “We need to develop a strategy for moving Indianapolis into the future. So how do we do that? And who should we partner with in getting that done? And how do we raise the money? And how do we get everybody moving in the same direction? And how do we get all the people who are going to say ‘why should it be sports, why shouldn’t it be this or that or something else.’” Well, same challenges that we talk about with everything else and they did an extraordinary job.
SCARPINO: I actually have interviewed Senator Lugar and talked to him about some of these same subjects in his office in Washington. I’m going to stay on this subject of public service, but switch topics.
You were appointed to the Indianapolis Airport Authority by then newly-elected republican mayor, Greg Ballard, in January of 2008. So, just for the benefit of anybody who uses this interview, Greg Ballard was elected mayor in November 2007 by defeating incumbent democrat Bart Peterson in an election in which Ballard was vastly outspent. He appointed you and then you were elected President of the Indianapolis Airport Authority by the members of the Authority in January 2008. You stepped down from that position in mid-April of 2009. So, do you have any idea how your name came to the attention of Mayor Ballard to the Airport Authority?
TOBIAS: Well, Mayor Ballard’s election, as you’ve eluded to in a way in talking about how he was dramatically outspent, was a bit of a fluke; and Mayor Ballard, in my view, turned out to be an outstanding mayor, but Bart Peterson was the incumbent mayor, was a democrat, but a very centrist democrat. I was asked to chair a fundraiser during the campaign for Mayor Ballard and declined because I was totally happy with Bart Peterson.
SCARPINO: Well, I’m actually going to say, Bart Peterson’s campaign spent $4.2 million; Greg Ballard’s campaign spent $375,000. So, I’ll hand it off back to you.
TOBIAS: Well, and Greg Ballard was essentially nominated by Greg Ballard. He was a retired Marine officer. There really weren’t other republicans who were interested in taking on Mayor Peterson, and there we were. Mayor Peterson took some action relative to local taxes that was very, very unpopular with the voters. So, I think you pretty could much argue that instead of Greg Ballard being elected mayor, the voters voted to oust Bart Peterson and Greg Ballard happened to be the other person on the ballot. So, now suddenly, we’ve got a new mayor and I think what you’ve just said about the campaign contribution would probably be a pretty good predictor of the degree to which the Mayor was prepared with a support system to take office.
SCARPINO: Basically, he didn’t have one.
TOBIAS: Well, he didn’t have one at all. I think two or three people involved in the law firms in town who are kind of in and out of administrations over the years came to his assistance. I’m sure somebody, I think I know who, but I’m sure somebody put a list together of people in the community. I was retired, I’d just come back from Washington. I had a record of being willing to help in the community. So, I’m sure somebody said, “You need to call Randy and see what he’d like to do, if he’d like to do anything.” I’d never met Bart Peterson (SIC – should be Greg Ballard). So, he called my office personally, which was also unusual, he called my office to set up an appointment. I think I was in Florida at the time, and so a time was set, he called, I had no idea what he wanted, if anything. So, he explained what his circumstance was and he said, “I’m looking for somebody to run the Airport Authority, would you be willing?” I had, at that point, had no knowledge of what does that mean, how much time does that take, what are the rules and responsibilities of the Airport Authority – and by the way, as you correctly said, I was elected the President or Chairman or whatever the title was of the Airport Authority Board by the Board members, but by tradition, the Mayor of Indianapolis lets it be known who he’d like the President of the Board to be and that…
SCARPINO: So, you were acquainted with the idea that you would be elected President.
TOBIAS: Yes, yes.
SCARPINO: Alright. For the benefit of anyone who’s going to use this interview, could you briefly explain what the purpose of the Airport Authority is? What is it supposed to do?
TOBIAS: The Airport Authority owns the Indianapolis International Airport as well as I think four other what are called reliever airports that are around the perimeter of the city. Reliever in the sense that to the degree that smaller aircraft, private jet aircraft and down to single-engine private planes, can be kept away from the traffic of the major airport, then these reliever airports are important. And at the time -- and the Airport Authority Board oversees everything related in the airport. I’ve forgotten the exact number, but I think, and during my time, I think there were about 10,000 people plus or minus that got up every morning and went to work at the airport. Now, that’s a number that astounded me and I suspect it would astound anybody else. A big percentage of that number worked for Federal Express, they worked for the airlines, and a significant number worked for the airport. The airport is essentially a pretty good-sized city. If it was compared to cities in Indianapolis, it’d be right up there in the rank of cities. It has a pretty large fire department, pretty large police department, and all the other infrastructure that goes along with that. So, it’s the role of the Airport Authority Board to oversee all that. What was further going on at the time was that we were completing the construction of the new airport terminal, which we just recently, as we speak, celebrated the tenth anniversary of the completion of that airport. So, all those things were going on at the time I was asked to take on the position.
SCARPINO: So, and that’s one of the things I wanted to talk to you about. As you took over -- became a member and then quickly President, the Airport Authority was in the process of constructing and opening the new Colonel Harvey Weir Cook Terminal, which opened on November 11, 2008. It cost about $1.1 billion and, as I understand it, there was a long planning horizon. In doing some background work on this, you’re quoted in a newspaper article that I read that said, “The challenge is to ensure that the new terminal comes in on time and on budget.” Did that happen?
TOBIAS: Yes, it did. It came in on time and under budget and that again, as we’ve talked about with other issues, that was largely because a lot of people for a long period of time had been involved in the vision and then all the things that were necessary through several -- the administrations of several mayors to get all this done. My specific focus was on getting people’s mindset to shift from building this world-class facility to what was really important, which was how are we going to enhance the experience of travelers coming in and out of Indianapolis once we have this facility? Building the facility was not the endgame. What we did with it once we had it was really the endgame. At that point in time, in many airports around the country, including ours, one of the typical scenes you would see walking down a corridor would be people sitting on the floor, leaning against the wall with their cellphone charger plugged into an electrical outlet that had been installed a foot above the carpet for the purpose primarily of janitorial people plugging in their carpet cleaners.
SCARPINO: I was probably one of those people you saw.
TOBIAS: Well, me too. So, one of the objectives that I articulated is it ought to be our objective when we get this facility opened is to never see that again. So, we need to understand that travelers need to charge their computers and – actually iPhones were brand new in those days, hard to believe – but cellphones, so what are we going to do to put in charging stations, which we did. We shifted the objective to try to think more about those kinds of things. But the credit for planning and designing and constructing that airport goes to a lot of other people who really did an extraordinary job. That role for me was a lot of fun. It was -- an airport is a very, very complicated life and death kind of an enterprise. There are a lot of dedicated professionals who make all that happen in the day-to-day operations, going behind the scenes in the airport and looking at everything from the way in which baggage is screened and handled to the way in which ice and snow are kept from accumulating on runways and all those things, very, very complicated and it was a lot of fun to be a part of that.
SCARPINO: I think that the new Indianapolis Airport was one of the first post-911 airports.
TOBIAS: It was the first airport post-911 that was designed and implemented with the newly required security considerations in mind. For example, in our airport, you can go through security screening and go to any -- there are crossovers behind security, so that you can go to any gate anywhere in the airport without having to come out and go back through security again. Older airports generally were designed without that requirement in mind and it’s a huge hassle for travelers.
SCARPINO: You performed, as I mentioned, a great deal of public service-type activity. You’re a member of the Board of Governors of the Indianapolis Museum of Art, a member of the Indianapolis Corporate Community Council, a director of the Indianapolis Convention and Visitors Association, director of Economic Club of Indianapolis, and that’s not a complete list. Unless there’s something that you want to say about one of those things, I’m going to move on to one more service commitment that you made. Before I do that, I’m going to touch on kind of a sensitive subject, and that is that on January 26, 2012, your son Todd Tobias died. He was your son, he was a successful writer, he was the founder and president of the Editorial Director of Indy Men’s Magazine that published from 2002 to 2007, and of course, he co-authored with you Put the Moose on the Table that I read in preparation for these interviews. So, I just have two questions, and one is, is there anything that you want to say about your son for purposes of this interview?
TOBIAS: Well, I think God did not intend for parents to bury children, and that’s one of the most difficult periods in my life. He was a very personable, funny, beloved by anybody who met him, individual with a lot of talent. The Indianapolis Business Journal annually selects a group of 40 young leaders throughout the community called their 40 Under 40 list. I’m very proud of the fact that Todd was selected as one of the 40 Under 40 during the period of time when founded and was running and was, as you said, the Editorial Director of his magazine. During that period of time, I was -- having been the very visible Chairman and CEO of Eli Lilly and I was used to being recognized in a lot of places, and it was an enormous thrill to me to go into a restaurant and have dinner and put my credit card on the table and have a young waiter take the card away and process the bill and come back and smile and say, “Are you any relation to Todd Tobias?” A father takes a lot of pride in that. Todd dealt with some inherited, I believe, issues related to depression and that manifested itself, as it often does, in self-medication with alcohol and that over time did a lot to damage his health. And eventually, when he died, it was the result of complications of having consumed too much alcohol over a period of time. There’s not a day that goes by that I don’t think about him.
SCARPINO: I mean, the reason I brought it up was because part your story, as a human being, is that you had to figure out how to deal with personal tragedy – your wife, your son – and I wanted to get that in the record and point out that element of the story of your life.
Public service, in 2013, then Governor Mike Pence, appointed you to the Board of Trustees of Indiana University, which you later led as Chair. I’ll also note that you had served as a trustee at Duke University, which included a three-year term as Chair of the Board, and just to round it out, you were 12 years a trustee of Colonial Williamsburg, both of which, Duke and Colonial Williamsburg, I would characterize as non-profit educational institutions. Obviously, serving as a trustee was not the only time that you ever contributed to IU and we talked about that last time. Could you just briefly, for the purpose of somebody who uses this and doesn’t know, explain what a Board of Trustees does?
TOBIAS: Well, the technical language relative to the Board of Trustees of Indiana University says at the beginning that the Board of Trustees is the owner of the university and in a legal…
SCARPINO: Like you were the owner of the airport.
TOBIAS: … yes, and in a legal fiduciary sense, with certain constraints imposed by state law, the Board of Trustees acts as the owner of anything would act, and is the governing body and ultimate decision-making body of the university. So, that’s really what the Board of Trustees does. It hires and fires the President, it approves faculty appointments, it approves recommendations for tenure for faculty. It determines what buildings ought to be built and where they ought to be built and how the fundraising is going to take place. It deals with fundamental policy issues of the university, and does the same kinds of things that the Airport Authority Board would do, does the same kinds of things that the Board of Directors would do in a corporation, and does the same kinds of things that the owner of a small store would do relative to taking care of that store, just there are more zeros behind the commas. In the case of a university, it’s a little more complicated because there’s a history in higher education of kind of joint governance between the faculty and the trustees. Without the faculty, there would be no university. And so in some instances, in some universities, that can be a contentious relationship. There are times in the extreme when faculties get together and have a vote of no confidence of a president of a university; and, in many cases, when that happens, it doesn’t have a happy ending for anybody. During my experience both as a trustee and as Chairman of the Board of Trustees at Duke and again as a trustee and Chairman of the Board of Trustees at Indiana, we enjoyed, in both places, very positive relationships between the faculty and the Board of Trustees. I cite that one because it’s a complexity with respect to the way in which the Board carries out its activities, and it’s another illustration of the consistency of issues we’ve been talking about throughout this interview that the Board of Trustees isn’t going to be successful unless it pays attention to developing its relationships with all the other constituencies that have an interest in what it’s trying to get done.
SCARPINO: And did you actively endeavor to do that as Chair?
TOBIAS: Yes, I did, and one of the traditions that has existed at Indiana University which I continued and supported fully as Chair, was that the faculty, through the Faculty Council, which is the elected leadership of the faculty, the faculty was given an opportunity at every single Board of Trustees meeting to speak, and they were given freedom to set their own agenda. I did not say, the Board of Trustees did not say, the President did not say to the head of the Faculty Council “here’s what we’d like you to talk about.” So, this was an opportunity, if the faculty had something that they thought, as sometimes they did, that the Board of Trustees ought to be aware of as either a potential problem or an opportunity or whatever, I’m very close to someone, that would be my wife, who was and is a trustee of another university that some years ago, under a president who did not believe in that kind of openness, got into some difficulty because of problems in the relationship between the faculty and the administration that the Board was total unaware of. Indiana has a very positive tradition in that regard and I think that was an example of something that’s important.
SCARPINO: What were the key issues that came before the Board while you were Chair, or the Trustee, I’m sorry?
TOBIAS: Well, I think, Michael McRobbie, who was President during my time as the…
SCARPINO: So, you didn’t have to hire a president?
TOBIAS: No, not during the time I was on the Board. I did at Duke, but at IU, Michael McRobbie was the President, and was a very visionary president and did a number of things to effect change, which is difficult to happen in any organization, it’s particularly difficult in higher education. It’s just the culture. So, Michael did a number of things to address the academic mission of the University. For example, it’s just one example, but created a School of Global and International Studies that on day one became one of the preeminent schools in the United States of global international studies by simply bringing together the resources that, in many cases, had existed on the Bloomington campus for decades and decades. Many people don’t know this, but as we speak, Indiana University teaches more separate foreign languages than any university in the United States. Who would have thought, here in the Midwest, that that would be the case? Those languages were scattered across the campus. The Center for Russian Studies has been highly regarded for decades, and on and on. There are a lot of political issues and who’s in control of what and I like my office in this building better than where you’re going to what me to move, and all those kinds of things that would exist in any organization, but all that took place in a magnificent new building, was built for the School of Global International Studies. And I might add, because I’m very proud of this, half of the funding for that building was paid for by television revenue from the Big Ten Network that televises all of the major sports at Indiana University and throughout the Big Ten. In many universities, there are fees charged to students that are used to help fund intercollegiate athletics. Not only does that not happen at IU, but this is a case where intercollegiate athletics is helping to fund the academic mission of the University. At any rate, that’s one example. Another example was taking what had been historically a very fine journalism school focused solely on producing people who have become journalists, fundamentally print journalists in newspapers and magazines, particularly newspapers around the country, taking journalism and combining that with other assets on the University and creating a new Media School because kids don’t graduate today and go to work for newspapers. They go into all kinds of media. So, that’s another example. Those are things that come to mind as challenges. Also during my time on the Board and preceding my time on the Board, the Trustees and the Administration identified an enormous amount, several hundred million dollars, of deferred maintenance that really needed to take place and funds that needed to be identified to bring up to standards all the buildings owned by the University. By the University’s Bicentennial in 2020 as we speak today, it is the expectation that that project will be 100% completed and all maintenance on all University buildings will be current. There’s always going to be a pipeline of maintenance that needs to be done, but it’s going to be what you would normally expect. So, that’s an example of the range of things that the Trustees are focused on, from the physical facilities of the University and the academic mission of the University.
SCARPINO: I’m going to point out, and I told you this before, I talked to Curt Simic, as one of the people who gave me information on you, he’s now retired as the head of the IU Foundation effective July 2008, and one of the things he said to me is that, and I’m quoting from him, he said “Randy doesn’t major in minor things.” So, I’ve talked to you enough to believe that that’s probably a true statement. So, why, in your mind, was being a Trustee of Indiana University a major thing?
TOBIAS: Well, as we discussed before in this interview, Indiana University’s been very important in my life. It began when I graduated from a very small high school with 42 or 43, whatever it was, members in my high school class and found myself potentially swallowed up by this enormous institution, and I came out the other side with a greater understanding of what might be possible in life and went on to do other things in life that we’ve spent all these interviews talking about, but much of it began with my experiences at Indiana University. And so, throughout the course of my life, I’ve not only felt some sense of obligation to pay back to the University, but it’s been a privilege and a joy to be associated with the University and continue to be associated with the University. And I expect to be associated with the University until the day I die and, in fact, beyond because I expect that my estate will do some further things to hopefully benefit the University. So, when the Governor asked me if I’d be willing to go on the Board of Trustees, that was a pretty easy answer. It also came at a time in my life when I was increasingly disengaging from a lot of other things, so I had more time and particularly after I became Chair of the Board of Trustees – it’s a fairly time-consuming role.
SCARPINO: You kind of outlined the question I was going to frame for you beginning with going to high school in Remington and college at IU, and in some ways it seems to me that attending college at IU was a little bit like a beginning leadership laboratory for you. You got to try things out.
TOBIAS: I did, but I also wouldn’t underestimate my growing up experiences prior to IU because having gone to a small high school, in a very different way, you get the opportunity to try more things out. Two of my grandchildren go, or have gone, to a very large high school of over 4,000 people. There are more opportunities there, but it’s a little tougher to be involved in everything. When I was in high school, you pretty much had to be involved in everything from sports to athletics to student council or whatever.
SCARPINO: And you were, by the way.
TOBIAS: And I was, and that was important. But having said that, yes, you’re right, Indiana University was my first leadership laboratory, a very important shaping time in my life. I have often said that I probably learned more that has been useful to me in life outside the classroom than I learned inside the classroom. Now, part of that is because I should have learned more inside the classroom than I did, but those opportunities, leadership opportunities, were incredibly important as life went on.
SCARPINO: And for anybody who uses this, I’ll say that in one of our earlier interviews, we talked in some detail about the things you did at IU. So, Curt Simic wanted me to ask you a question, and so I’m going to do it, and then I’m going to do some wrap up questions and we’ll close up. The question he suggested is: How do you understand the relationship between leadership and philanthropy?
TOBIAS: Well, Curt would, of course, ask that question because…
SCARPINO: Well, I mean, that’s why I gave him credit for it.
TOBIAS: … he spent his life very successfully in philanthropy. I think it’s very important. I think most leaders that I’ve known and been around have had a part of them that caused them to want to give back for whatever reason. They wanted to give back because they felt a sense of gratitude to various not-for-profit organizations that have played an important role in their lives and, to go back to something else I’ve talked about, leaders have understood the importance of the broader community in which whatever they’re leading is operating. One of the strengths of the American experience, which I’ve learned is pretty unique around the world, is the role that private philanthropy plays in the way in which we get things done in the United States. There’s an expectation in a number of most other western countries that the government is going to take care of it, and that’s why taxes are higher and the government plays a bigger role in determining winners and losers. I happen to like our system a lot better for a variety of reason including the engagement of the public at large and the business community and others in what we think of in this country as not-for-profit organizations. So, I think philanthropy is very important.
SCARPINO: So, I’m going to ask you some wrap-up questions and then we’ll wrap up. We’ve talked a lot about your life and your career. And just a minute or two ago, you mentioned growing up in Remington, Indiana, which is – I’ve been up there; it’s a pretty small town in northwestern Indiana, met some of your childhood friends and so on. If you had a time machine and you could go back to Remington and talk to your 16-year old self or 17-year old self as he’s about to head off to IU, what would you tell him?
TOBIAS: Well, that’s difficult…
SCARPINO: Keeping in mind that talking to teenage boys is a difficult one.
TOBIAS: That’s difficult to ponder because there are certainly individual decisions that I would make along the way. I think I would work harder than I did on the academic side of my years at IU, particularly if I could’ve figured out a way to do that, and I think I probably could have, if I could figure out a way to do that without undercutting my ability to do the things I did that I think gave me the leadership lessons, but, and I’m sure there are other things like that I can think about along the way. But as a 16-year old in Remington, as I think back at it, if I were to have had the opportunity with your time machine to look forward to being 76, I could not in my wildest imagination thought about the things that I have experienced up to this point in my life. So, I think, based on that, I’d have to say I don’t think I’d change much. I’ve had some amount of pain, I’ve had some amount of failure, I’d like to think that I’ve learned from the failures of my experience, I’ve made some bad decisions, some decisions I’d like to have over, I’ve made some good decisions, but I think all that was based on a pretty solid foundation starting in Remington and my experiences growing up and extending through my time at Indiana University and then beyond.
SCARPINO: So, you’ve been a leader in the private for-profit sector, and we talked about that. You’ve been a leader in government, and we talked about that. And you’ve led in the nonprofit world, which we talked about, including something that I didn’t mention by the way, you’re on the Board of Governors of the American Red Cross. If you could just think for a minute about two or three important leadership lessons that you’ve learned from moving from one sector to another as a leader, what do you take away? What would you like to share with anyone who uses this interview about what you’ve learned about being a leader across those three sectors?
TOBIAS: I think one thing I’ve learned is that the principles of leadership and the experiences of leadership are pretty universal across all those kinds of things. Therefore, the degree to which people have the opportunity and can take the opportunity to learn about what challenges people are facing and what they’re doing about it in areas of life different from their own, that’s a very good thing. That’s one of the things I’m proud of in the Tobias Leadership Center is that what we used to call the Hoosier Fellows, now the Tobias Fellows, which is an opportunity for people in the world in real life leadership positions, to meet in a somewhat structured program and study leadership challenges going on in various parts of life and learning from those and then sharing their own experiences because they all come from different walks of life. I’ve come to think that the Tobias Leadership Center probably represents the fundamental lesson I’ve learned in life, and that is whether you’re running a shoe store or a major global corporation, the challenges are not much different and we can all learn from each other.
SCARPINO: Generally, do you think of yourself as somebody who’s made a difference in the world?
TOBIAS: Well, I think that’s for others to judge. Let me just say, I’ve had some extraordinary opportunities to participate in roles and organizations that have had the potential to make a difference in the world – in the corporate sector, in government, in not-for-profits. I’d like to think yes, I’d like to think that I played a small role in helping the world to be successfully better interconnected during my time in the telecommunications industry, and I’d like to think that I’ve played some small role in advancing the cause of better health for people, and I’d like to think that I’ve played some role in advancing the cause in higher education and other things I’ve done. But I’d be misleading if I didn’t say that I’ve gotten every bit as much from all the opportunities that I’ve had to participate in than I’ve given. And, again, at this stage in my life, as I think back on some of the experiences I’ve had over time, it’s kind of an out-of-body experience that I almost can’t believe that I have had all the opportunities that I’ve had, and I’m very grateful.
SCARPINO: What are you most proud of?
TOBIAS: I think I’m most proud of my daughter and my son, and I’m now proud of my six grandchildren, each of whom, without exception, is a unique individual. I’m proud of the values that they are representing and living because I think at the end of the day, and I’m certainly in the autumn of my life, at the end of the day, the humans that you leave behind and hopefully have had an imprint on are probably among the significant contributions that you can make to society, and I’m just extraordinarily proud of them.
SCARPINO: If you could have a do-over, or we had that time machine we talked about, is there anything you’d change?
TOBIAS: Sure, sure. There are some little things I’d change, there’s probably some more major things that I’d change, but I think realistically, on balance, the answer has to be that I’ve had extraordinary unexpected opportunities over life and I think that anybody who would expect on balance to have had a better life than I’ve had would be kidding themselves.
SCARPINO: But do you think that maybe one of the measures of an effective leader is both recognizing and taking advantage of those opportunities when they come along?
TOBIAS: Well, sure. I think that’s one of the fundamentals of leadership. Back when I used to more frequently be asked to speak to university business schools, and in one way or another when you got to the Q&A, people would try to ask a question that translated would always mean: How can I have a life like it looks to me you’ve had professionally? And my answer to that has been pretty consistent over decades, and that is, “If it’s Tuesday, you need to live Tuesday as if it’s the single most important day in your life, and then you need to do it again on Wednesday and Thursday. And sure, you need to do some planning, and I think most people would say I’ve been a pretty big planner, but at the end of the day, it’s all execution. And the opportunities in life come at unexpected times and in unexpected places and unexpected ways, and if you’re constantly trying to do the very best you can possibly do, you will recognize those opportunities. It may be after the fact because those opportunities may present themselves because other people recognize what you might be able to do.” And now I’m at a stage in life where I try to live every day in a way so that when I go to sleep at night, if it’s the last time I go to sleep, I’m going to think I had a pretty good day that I was glad I lived. And I’m at a stage in life now where I have more flexibility in choosing what I do and don’t do and how I spend my time, but I think, in the context of being a strategic thinker and planning and understanding where you’re trying to go and all that, I do think in the end it’s pretty important to live in the moment.
SCARPINO: Do you consider yourself to be a work in progress?
TOBIAS: Sure, yeah. One of the joys of being retired is the opportunity to learn. Deborah and I are focused on some opportunities this winter to sign up some place where we’re going to spend part of the winter in some educational, I guess what I could call adult education programs, where there are maybe three or four sessions on some subject with some expert for an hour and a half every Tuesday morning, or something like that. I have way more time to read than I historically had. So, that’s certainly a part of being a work in progress. I think in every aspect of my life, if you’re a life-long learner, it doesn’t stop.
SCARPINO: What do you think your legacy will be?
TOBIAS: That’s for other people to…
SCARPINO: I’ll ask it a different way. What would you like your grandchildren to know about you?
TOBIAS: I guess I’d like for my grandchildren to know that I was an honorable person who worked hard, tried his best, tried to represent appropriate values and tried to leave the world and all the things he touched during his time in the world a better place.
SCARPINO: Two more questions – is there anything I should have asked you that I didn’t?
TOBIAS: I can’t imagine there is.
SCARPINO: Is there anything that you would like to have said that I didn’t give you a chance to say?
TOBIAS: I don’t think so. This has been an extraordinary opportunity and I appreciate this. I can’t imagine, in the years going forward, that there are going to be very many people, if anybody, who are going to have an interest in starting at the beginning of the text of these interviews and going all the way to the end, but I do hope that there are some nuggets along the way. I’ve never believed that, and I said this in the book that my son and I wrote, I’ve never been, hopefully, pretentious enough to believe that anybody, starting with me, ought to say to other people “here’s what you should do,” but I do believe that there is benefit for all of us from knowing about other people’s experiences and kind of understanding what that person believes were lessons learned from those experiences. So, I hope our investment in doing these interviews may be useful to somebody in that regard, of simply understanding what my experiences have been and then reflecting on that if there’s anything useful to be learned for others.
SCARPINO: So, with that said, I’m going to, while the recorder still on, I want to thank you really very much on behalf of myself and the staff at the Tobias Center for being kind enough to share all this time and your memories with us.
TOBIAS: Thank you, Phil.
SCARPINO: You’re welcome. Let me get these things turned off.
(END OF RECORDING)Go back to beginning of the interview transcripts