Good afternoon, everybody.
Welcome to Lehigh College
of Business and Economics
and the annual Gruhn
Distinguished Finance Speaker
Series.
I'm Georgette Chapman Philips.
I'm the Kevin and
Lisa Clayton Dean
of the College of
Business and Economics.
And it's my pleasure to
welcome you here today.
On behalf of President Simon,
all of the CBE faculty,
and staff, we are thrilled to
have you here for the lecture.
A special welcome, of course,
to our honored speaker, Ann
Lewnes, class of 19 hm hm.
[LAUGHTER]
I don't know.
I wouldn't want it to be
broadcast, because all of you
are Lehigh students.
You can do the math.
And to, especially, our guest
Don and Judy Gruhn, who have
made this event possible.
CBE is pleased to
bring nationally
and internationally
recognized thought leaders,
such as Miss Lewnes,
to our campus
to address important
business topics of the day.
We pride ourselves on preparing
our students for success.
And what better preparation
for our students
than to meet people who are
successful industry leaders.
A special place in my heart is
for the Gruhn speaker series.
It was established in 2008.
And is just one example of the
student educational experience
that we offer outside
of the classroom.
I consider it an absolute
honor to introduce Don Gruhn.
And I will give your
class, the class of 1949.
Sorry Don.
Let me tell you a
little bit about Don.
He graduated from
Lehigh with B.S.
in Business Administration.
While on campus, Don was
best friends with Asa Packer,
and also active across a wide
range of activities, glee club,
drama club, men's
soccer team, and writer
for the Brown and White.
After more than 40 years in the
financial services industry,
both as a member of the
New York Stock Exchange,
as well as a general
partner in two firms,
Don is now enjoying a very
well-deserved retirement.
Currently, we are so
thankful in the way
that Don supports Lehigh.
I am especially
honored to have him
as a member of the
Dean's Advisory
Council for the College
of Business and Economics.
But his support
doesn't end there.
He generally supports
the general functions
of the College of
Business and Economics,
the financial services lab, the
Martindale Society, Zoellner
Art Center, journalism,
and athletic departments.
And in 2004, he and Judy
endowed a scholarship fund
that annually
awards a scholarship
to a deserving finance student.
That is really the gift
that keeps on giving.
So all of you out there,
just again, you do the math.
And you figure out
when you're going
to endow your scholarship.
As a result of John and Judy's--
sorry, Don and Judy's--
just gave you a new name.
As a result of Judy and Don's
support of everything Lehigh,
they were deservedly
inducted on leadership plaza
an honor afforded to Lehigh's
most generous benefactors.
Please welcomed me in joining--
boy, I can't talk today.
I have no good excuse either.
I got a good night's sleep,
properly caffeinated--
please join me in
welcoming Don to the podium
to introduce our speaker.
[APPLAUSE]
Looking towards the
back of the room,
I think we've broken
in attendance record.
And Ann, you haven't
even spoken yet.
Thank you, Dean Phillips,
for those very kind words.
Have you considered
Comedy Central?
And good afternoon,
and a very welcome
to our distinguished
financial speaker series.
Financial is our middle
name, always has been.
Today, however,
financial will be
blended with marketing,
branding, advertising,
and media, key strategies used
by a chief marketing officer.
Today, we're very
fortunate to have
Ann Lewnes, Lehigh class
of '83 and Chief Marketing
Officer of Adobe, delivering
this afternoon's lecture.
Ann is considered one of
the most creative of today's
chief marketing officers.
In addition to
marketing chief, Ann
wears an important second hat.
She's Executive Vice
President of Adobe.
The two jobs make her one of
the most influential people
in Silicon Valley.
Born in New York City in
1961, after primary schooling,
Ann attended Bronx
High School of Science,
to this day, one of New York
City's finest public high
schools.
Ann showed an early flair
for math and science
and was drawn to Lehigh
for those reasons.
But she also wanted to
incorporate her passion
for career creativity.
She joined Alpha Pi
sorority and excelled
as a double major in journalism
and international relations.
She attributes her
excellent writing skills
to her experience and hard
work on the Brown and White.
One can look back
in the archives
and find her front page stories
on Lehigh's gift campaigns
and the 1980 Iranian hostage
crisis, among others.
Remember that?
Graduating in 1983, our
speaker didn't hang around
the east coast very long.
After a two year stint
nearby, at Rodale Publishing
and [INAUDIBLE] she
headed west to California.
Rumor has it that she drove
the entire 3,000 miles.
Ann was offered a marketing
job at Intel, the largest
US manufacturer of
computer memory chips,
arriving at just
the right time when
the PC industry was taking off.
Ann on her team that
played a key part in what
is considered one of televisions
most creative advertising
campaigns.
At this time, computer companies
were spending furiously,
major bucks on
television commercials
to sell their products.
Big names like Compaq,
HP, Dell, IBM--
now, they all used Intel chips.
And sitting in plain view, at
the bottom of the television
screen and every commercial
by these companies,
were two words, Intel Inside.
Those two little words--
an enormous, yet quiet impact.
That brilliant campaign
truly branded what I guess--
sorry, Ann, was not a
very exciting product,
microprocessors.
Timing and leadership,
that's everything
according to Ann Lewnes.
She joined Intel at the right
time, with the right boss,
learning on the job
through different roles.
Having stayed at
Intel for 20 years,
Ann decided, time to move on.
And she's been at Adobe
for over 10 years.
Our speaker has been
such an uber achiever,
that I am not planning to touch
on Ann's exciting initiatives
at Adobe, since I have
a feeling that she will
be recounting a number of them.
I do want to mention, besides
all her work at Adobe,
our speaker also serves on
the Board of the Advertising
Council, and serving as well
on the board of directors
of Mattel, America's
giant toy company.
I'd like to read two short,
but personal messages I
received about Ann.
I quote, "sadly I only
overlapped a short period
of time with Ann, but
I strongly believe
that she has taken
Adobe's marketing
to a whole new level."
These words, from Bruce Chizen,
former Chief Executive Officer
of Adobe.
And from Professor Jack Lule,
Iacocca Chair of our Journalism
and Communications
Department, I quote,
"Ann is an
exceptional role model
for the young women of
Lehigh, but especially
for the young women in the
business of journalism, media,
and communication.
In those fields still
dominated by men,
Ann has shown how to succeed
with hard work, perseverance,
grace, dignity, and humor."
Ann continues to generally
support Lehigh's journalism
department, not
just with resources,
but with time and energy.
Every summer, she makes sure
that a Lehigh journalism major
is selected for one of the very
prestigious Adobe internships
in Silicon Valley.
On a personal level, Ann met her
husband, Greg Welch, at Intel.
And they are the
parents of twin boys.
Now don't think for a
minute that this job
doesn't come with fun perks.
This past March--
ladies, listen to this.
This past March, Ann
appeared on stage
at the Adobe Summit
in Las Vegas,
in front of 10,000
guests, and conducted
a one-on-one interview
with a gentleman named,
George Clooney.
It is such a pleasure
for me to introduce
this multi-talented lady.
She's going to take you shortly
from Lehigh to Silicon Valley.
One of our very own,
Ann Lewnes, Lehigh '83.
[APPLAUSE]
A wonderful late news
flash that I would like
to share with our audience.
Came in yesterday, but as
of today, November 15th,
Ann has been named the eighth
most innovative chief marketing
officer in the country.
This through the very
popular financial site,
Business Insider.
Ann, this is great news.
And a fabulous and
well-deserved honor.
And I wanted to share
it with everybody.
Thank you.
[APPLAUSE]
Thank you.
Yes, I do have water.
Thank you.
OK.
So first of all,
I'd like to thank
Don for his incredible
generosity in inviting me here
today, and also president Simon.
It is, literally,
thrilling to be here.
And I hope I don't--
I'm all choked up.
So hopefully I won't
start crying on stage.
But this is an enormous
welcome, and I'm
so incredibly pleased
and grateful to be here.
So I met with, I don't
know, maybe 30 students
over the past few hours.
And I have to tell you
how incredibly impressed
I am with all of you.
I met some journalism students,
some marketing students,
some finance students.
And honestly, I can't say
enough about how well-spoken,
how determined, passionate--
I was telling
Pooja Prasad, who's
here with me, the
practicality, and the ambition,
and just the sheer determination
of the students I met with.
If any of you are here, I am
leaving very, very impressed,
so good for you all.
Give yourselves a hand.
Come on.
What a great group.
OK.
So I graduated 33 years ago.
I know I don't look that
old, but I'm that old.
And I have learned
a lot since then.
And there are four key things
that I think have really
shaped me and my career.
And over the course
of the next 30 minutes
or so, you'll see
these themes woven
into how I became who I am.
First is take risks,
second delivering results,
thinking creatively, and last,
and probably most important,
working well with people.
So just a little bit about me.
So I did grow up
in New York City.
And I did go to the Bronx
High School of Science.
I was always interested
in science and math,
but I was more of a
creative kind of arty kid.
I was in a band.
I was always on the school
newspaper, on yearbook.
I love drama.
So it was an interesting
choice for me
to potentially come to Lehigh.
And my clicker,
hopefully, will press.
There we go.
So I chose Lehigh because it
was very different than what
I was used to.
I had never been to a
high school football game
before I came to Lehigh,
because my school was
a very urban public
school in New York City.
And we didn't have
a football team.
I had never had any exposure
to the Greek system.
One of my favorite
movies is Animal House,
which came out shortly
before I came to Lehigh.
And that was my vision of
what fraternity life was like.
So I was very green.
But this ended up being an
incredibly good choice for me.
It was small enough that
I could be very involved
in a lot of different things.
And I could make an impact here.
I learned to ask
very good questions,
to be a very fast
writer, and very deadline
driven at the Brown and White.
I learned great
leadership skills
and how to work well
with others at Alpha Phi.
Yeah, are there Alpha
Phi's out there?
There are no Alpha Phi's?
Oh, there they are.
How you doing?
And I totally used all
my social skills there.
I was the rush
chairman of Alpha Phi.
I got the best class ever.
And then I had my first
great work experience
through an internship that
I did at Rodale Publishing,
just down the road.
I worked there about
10 or 20 hours per week
during my senior year.
I was a fact checker there.
That was, basically,
the lowest possible job.
And while I was there, the
magazine that I was working on,
which was called Spring, it
was a very advanced concept.
But women's health
magazine 30 years ago,
which had absolutely no
traction and unfortunately,
went under while I
was working there.
But they gave me
other wonderful things
to do during my internship.
And I worked hard.
And I was a good student.
And it just all around was
a great experience for me.
However, when I graduated in
1983 the economy was bad--
really, really bad.
Unemployment had hit an
all time high of 9 million,
which was the highest number
since the Great Depression.
And there I was, a new
college graduate looking
for a job in publishing.
So I had two roommates from
Lehigh, two fellow Alpha Phi's,
that moved out to
Silicon Valley.
And they invited me
to come for a year.
And I said oh, I'm
from New York City.
No one ever leaves
New York City,
but maybe I'll try
Silicon Valley.
So I drove my Honda
Civic, and I did do that.
My mom and I drove
nearly 3,000 miles.
And it was a huge risk for me.
My mother dumped me off
in Sunnyvale, California.
And she left me.
And it was a huge risk to
leave my family, my friends,
and every single thing I knew.
And I thought I would
try it for a year.
And that was 31 years ago.
So I ended up on my
friend's couch with no job.
I was this really good student.
And here I was, I was literally
sleeping in Sunnyvale,
California on a couch.
I thought Silicon Valley was
near the beach, because it
was in California.
It was nowhere near the beach.
I was surrounded by
an orange orchard
on one side and a
semiconductor company
on the other side of my very
small apartment complex.
And it didn't rain,
literally, for the first six
months that I was there.
So I missed home.
So after two weeks in my
apartment complex, at the pool,
because it was 75 degrees every
single day, I went to a place
called the Palo Alto
Women's Resource Center.
And I paid a dollar, $1.00,
to look through a job search
finder.
Literally, it was like a hand--
there were little laminated
pieces of paper telling you
about jobs.
And there were two jobs that
sounded particularly good
for a journalism major.
One was at Sunset
Magazine, which
I don't know if you're
familiar with that,
it's kind of a western
living type magazine.
It was similar to what
I had done at Rodale.
And one was at Intel.
So I'd never heard of Intel.
I'd never heard
of semiconductors.
Intel was about a billion
dollars in revenue at the time.
And it was really struggling.
As John mentioned, it was a
memory semiconductor company.
And memory semiconductors
had, basically,
become completely commoditized.
And Intel was investing in
something brand new called,
microprocessors.
So yeah, I'm seriously that old.
So the first month I was
there I'm all excited.
And I get my little chair
in a long line of cubicles.
And I walk in and
half of the cubicles
are empty because there's
been a huge layoff,
because the semiconductor
business was doing terribly.
So I got a good
job, though, working
on the internal
employee publication.
I was a manager.
I had one employee.
He was great.
My boss was great.
He completely
encouraged me to do
whatever I wanted to do there.
And he had given me some
great advice, which I'm still
trying to listen
to, which is, Ann,
don't go to the
mat for everything,
because I was really
anxious to kind of move.
I was very unique at Intel.
I was a communications--
strong in communications
among kind of a sea of nerds.
And I could have used
that to complain,
but instead, I used
that to my advantage.
And that's been a huge advantage
being in Silicon Valley.
I was really excited by
what was happening at Intel.
The PC revolution was happening.
Young people were
changing the world.
If you watch the
sitcom, Silicon Valley,
you'll always hear Silicon
Valley people going,
we're changing the world.
We're making the
world a better place.
And we actually
believe that out there,
silly as it sometimes sounds.
So just one anecdote,
my peer, who
was running our
customer magazine,
I was running the
internal magazine,
decided to go take another job.
And he was a guy a couple
of years older than me.
And he said, I'm leaving, Ann.
And if you apply
for this job, I just
want you to know that
they're paying me $36,000.
I was like, $36,000.
They're paying me $27,000.
So he said, if you get this
job, make sure that you
ask them to pay you $36,000.
So they give me the job.
And of course, nobody
says that it's $36,000.
So I'm making my 27 and I walked
into my manager and I said,
John Rance said you
paid him $36,000.
And I want my $36,000.
And he said, of course,
we'll give you $36,000.
So early lesson, you need
to advocate for yourself.
And especially in
Silicon Valley,
that's how things get done.
So I got a big break
four years later.
I was thinking of
moving back east
and going to business school.
But at the time,
Andy Grove, who was
our CEO and a real visionary,
who unfortunately just passed
away, was looking
for someone to work
on a project with his assistant.
His assistant was a man
named Dennis Carter.
He was double-e, with a master's
in double-e and a Harvard MBA.
And he was an absolute genius.
And he had this crazy idea
that he had sold to Andy Grove.
His idea was to market
microprocessors to consumers.
Every consumer should
know microprocessors.
And rather than being
excited by buying an IBM PC,
they should be excited about
getting a PC with Intel
microprocessors in it.
I was like, that's the stupidest
idea I've ever heard of.
Nobody is ever going
to go for that.
And he said, give me six months.
I have $5 million
to invest in this.
And let's see if we
can make a go of it.
So I did it.
And he taught me
everything I know.
I never went back
to business school.
He was my on the job MBA.
He taught me.
I studied.
He made me read textbooks.
I worked tirelessly.
And I traveled the world.
And the company just
continued to grow.
So I was doing well there.
And I did every kind
of marketing job
from PR to advertising
to retail marketing.
And I did meet my husband there.
But to be truly
successful at Intel,
you needed to be
a general manager.
And in order to be
a general manager,
you needed to move around
into different disciplines.
If you're familiar
with what GE does,
they typically take
talented employees
and they forcibly move
them every two years.
You're in a management
training program.
And that's how Intel
operated as well.
So my boss told me I would
need to make a choice.
I could be a career
marketer, which he really
advised me against.
Or I could move into
another kind of role.
I could move into
product management.
I could move into sales.
I could go work in a region.
And I thought long
and hard about it.
And I said, what do
I really want to do?
What is my passion?
And I realized I was
a creative person.
And I really wanted
to be in marketing.
And so I made the choice then
that I would stay in marketing.
And I did it, I think,
very thoughtfully.
So after 20 years,
I thought, I've
done all I can do here from
a marketing perspective.
And Andy Grove had left.
My mentor had left.
Very important to me--
and, again, people
are so important
in your work life.
And you really want to work
with people that you enjoy
and who you can learn from.
They had left.
The company was now a
$40 billion company.
When I started it was
a $1 billion company.
And it kind of got
too big for me.
And to me, it lost a
little bit of the soul
that I thought that
we had first had.
And so I didn't think I could
make a big difference anymore.
And I needed a change.
So I decided to
take another risk.
And that was the Adobe.
So the CMO, the Chief Marketing
Officer, of Adobe was retiring.
And she called me.
I knew her vaguely.
And she said, Ann, there's
an opportunity to replace me.
Are you interested?
And I said, oh, you
know, I don't know.
I'm really happy here at Intel.
And Intel is one of those
places that's like a black hole.
Once they suck you in,
they rarely push you out.
My husband actually just
left there after 23 years.
So I wasn't inclined to move.
However, I had really
good feelings about Adobe.
And it was a creative
software company.
And I was this
creative person who
had been working at a
semiconductor company
and doing very creative things.
But I felt like the
right place for me
might be this new
creative software company.
I thought their brand was
severely under leveraged.
So I went for an
interview with the CEO.
I talked to a lot
of people there.
And I had a really good feeling,
but I would be leaving a place
that I knew very well.
So my CEO, who's my boss,
interviewed me three times.
And at the last
interview I said, listen,
I've been here three times.
Are you going to hire me or not?
Because I can't keep
leaving my job for an hour
if you're not going to hire me.
And he said, Ann, I want to make
sure that you really like us
and that we really like you.
And I thought this
was really remarkable.
For the CEO of a company
to care that much
about the fit of the employee.
And to really look inside
and see what kind of a person
was I, and how
would I contribute,
and how would he
enjoy working with me.
And I did get the job.
And that was 10 years ago.
So over the past 10 years, Adobe
has completely transformed.
We have always had a
mission to change the world
through digital experiences.
And most of you probably
know us through products
like Photoshop.
That commercial I showed you
earlier was for Photoshop.
But what many people
don't know is the big role
that Adobe products play in
every single digital experience
you have.
Whether you're streaming the
next Lehigh-Lafayette game
on your tablet--
I know the big game
is on Saturday.
So hopefully you'll all be
there live, but if you're not,
you'll be able to do
this thanks to Adobe.
Whether you're booking your
next flight home on your app,
or watching the latest
episode of Stranger Things,
Adobe products are
helping you do that
and making those
experiences happen.
So seven years ago,
Adobe took a risk.
And a bunch of us had come to
Adobe from larger companies.
And we were all
anxious to really see
the company take a new turn
and drive significant growth.
And so we decided to literally,
completely change our business.
Our creative business
revenue was plateauing.
And we needed to make a dramatic
shift to both drive revenue
up, but also get more
predictability in the revenue.
Because the way that the
business model worked is you
would buy a new package of
Adobe software, literally
a package, every
18 to 24 months,
whenever we had a new
version of software.
And so every 18 to 24 months
we'd see a spike in revenue.
And then after that, there'd
be a dip, and it would plateau.
So what this did--
two things.
One, it led to serious
unpredictability
in our revenue.
And so we were only
getting spikes and ebbs.
And second, we have all
these brilliant engineers
at our company who are
waiting for 18 to 24 months
in order to spit out new
technology, new features,
new services, new products.
The engineers were
holding onto those
for two years, which
really was not very
valuable to our customer base.
So at the same
time, we decided we
wanted to enter into a
completely new business,
Digital Marketing.
So web analytics,
and data analytics--
which a lot of people
looked at and said,
why would they go into that?
They're a software company.
But our CEO is very prescient.
And he said, if we're in the
content creation business,
and we're making web content,
and we're making videos,
aren't people going to want
to see how those are doing
and the impact of those?
So, literally, simultaneously
we did two things.
We said we're not going to
make package software anymore,
which was crazy.
Again, crazy idea because
a lot of our customers
liked having their
box of software.
And we said, we're going to
move to a subscription business.
And we're going to charge
monthly for our software.
Rather than making you pay
upfront $800 for Photoshop
or $3,000 to buy all of
our creative products,
we'll let you pay anywhere
between $10 and $50 a month
for our software.
And what ended up happening
was, the 3 million people
who had been buying
our products all along
turned into 8 million
people, because they were
able to afford our software.
And students, people
in other markets,
were finally able to
get access to software.
In addition, our digital
marketing business,
because of the whole web
revolution and the app
revolution, that really
started to take off.
And we acquired a
lot of companies.
And now we're the leader in
that category, in web analytics,
in media analysis, in
content management,
all these big categories.
And all this happened over a
very, very short time frame.
So the results are
pretty staggering.
We are now growing
20% year over year,
which for a traditional software
company is pretty unheard of.
Those are the kinds of rates
you see from small startups,
but rarely from
established companies
that are over 30 years old.
Our recurring
revenue, and that's
again, back to the
predictability--
so every month we're seeing a
much more stable and, actually,
high growth business.
We used to have 10%
recurring revenue.
And now we have 80%
recurring revenue,
which makes Wall
Street extremely happy.
And thus, our stock
price has only
gone in one direction
over the past five years.
We're also one of the fastest
growing brands in the world.
And we're consistently
recognized
for all of our
innovation, leadership,
and very progressive
business practices,
like we were the first
company to really offer
a very, very generous
parental leave policies.
So the company, literally,
in the past seven to 10 years
is a completely
different company.
And it's because
people were focused
on taking calculated risk,
driving strong results,
thinking creatively, and
getting along with each other.
So what do I do?
I'm the Chief Marketing Officer.
And thankfully, marketing has
played a pretty major role
in the transformation
of the business.
My primary responsibility
is-- how many
marketing majors are out there?
I met some earlier.
OK.
There they are.
Their the shy-- you guys
got to put your hands up.
It's something to be proud of.
So my primary
responsibilities are
driving brand strengths,
growing demand
for our different
products, and then
on a much newer
function that's probably
one of the most
important functions,
is understanding customers.
So customer insights
and measurement
of the interactions
that our customers
have with our company.
My other, I would
say, great asset
is we use all of
our own technology
to create all of our
content, but also
to measure the impact
of all of our content.
So were probably
the best evangelists
for our own software at Adobe.
My organization has grown
from 200 to 800 people
in the last seven years.
That's mostly because
we've chosen to in-source
a lot of the things that we do.
We create almost all
of our own content.
We have one of the
world's largest websites.
We have a billion
unique visitors
per month coming into Adobe.com.
They come for all
different kinds of reasons,
but it's one of the
largest corporate websites
in the world.
And I would say, I have the
most creative, analytical, hard
working team in technology.
One of them who is
here with me today.
So somebody asked
me earlier today,
what does your
typical day look like?
And it's a pretty crazy day.
These are just some
photos from a typical day.
So it's a wide
spectrum of activities.
There are a lot of meetings.
And there are a lot
of decisions to make.
We normally have
a staff meeting.
So the executive team-- there
10 of us including my boss.
So we meet on Monday's,
pretty much the whole day,
but also throughout the week.
We look at our financials.
We look at new product concepts.
We look at how the
business is doing.
So a lot of reviews.
I might go then into
the next meeting, which
is reviewing an ad campaign
and a press release
for one of our
upcoming launches.
I do a lot of reviewing.
Yes, no, yes, no-- that stinks.
Try it again.
Love it.
I do press interviews
all the time,
telling the story
about our company,
and the transformation,
and new products,
and what our
marketing group does.
Promoting our story
and our company's story
is a huge part of my job.
I write financial
earnings scripts.
So I know the finance
majors are like,
how do communications
skills help?
Well, when you're in
finance, hopefully, you'll
have the joy of being able
to write a financial earning
script some day.
It is hard work.
And I really have
to know my stuff.
I have to understand the
financials really, really well.
And I write the script
along with our CEO.
And obviously, every
single word matters when
you are doing your earnings.
I spend a lot of time
with my CFO, who's
a very good friend of mine.
And we're looking
at the numbers,
reviewing the impact of
marketing performance
on the bottom line.
This is a topic my CFO
loves, a little too much.
And so now that
marketing is actually
able to be measured in
the way that it is--
I mean, for a long
time, marketers
were like the plankton
of an organization.
They were low, very
low, because you
couldn't measure the impact
of what you were doing.
Marketing were
the people who are
making all these pretty ads,
but nobody really understood
if it was having an impact.
And finally, thanks to
companies like Adobe,
now you have data to help you
understand, did that ad work?
Do those people like
that product feature?
What are they saying
about me on social media?
Data enables you to
have all these insights.
And then, hopefully,
act upon those insights
to make your products better.
To make your service better.
To make your
company more beloved
and your customers
much more loyal to you.
The way the world
is moving today,
and this is something
I've just really picked up
on while I've been
here today, disciplines
are really blurring.
And I think marketers need to
know as much about finance.
Finance people know a
lot about marketing.
Everybody should
know how to write.
IT people need to
understand marketing.
All these disciplines
are blending together.
And the focus here on
interdisciplinary learning
is just magnificent.
And it will serve
you very, very well.
So the only way, I think,
you can be successful today
is through this
interdisciplinary focus.
So I encourage those of you
who aren't taking classes
outside of your
discipline to do so.
But I have to tell you
how impressed I was.
I was talking to people
who have two majors,
plus another minor in a
completely different category.
And I think that's fantastic.
So in addition to all
that, I spent a lot of time
with our customers.
And that's probably the
most valuable time of all
because you never really know
how your products are doing
until you talk to real people.
The data can tell you
one thing, but you
get in a room with a
customer, an unhappy customer
in particular, and you
hear what their problem is.
That's eye opening.
We, at Adobe now, have
actually, very disciplined ways
beyond all the data
that we collect
to have face to face time
with customers or phone time.
And we now mandate that
our employees listen in
on customer service calls.
We also have massive
hackathons, so people
get to participate in trying
to break our products before we
launch a news service.
And that mentality, that
pushing to make sure
that your customers are really
happy with your products,
that's become, I
think, very important.
In this age when
people are posting
on social media
every negative thing
that they think
about you, you better
make sure that you understand
what your customers are
saying about you.
And you may not always be
able to improve upon it,
but at least hear it.
Respond to it.
That's what
customers want today.
In addition to that, I
serve on a number of boards.
So I serve on the board of
the Advertising Council.
You may not have heard of
the Advertising Council,
but they're responsible
for all the public service
announcements in
the United States.
They started 80 years
ago with Smokey the Bear.
And now they have campaigns
on everything from not texting
while you're driving, sexual
harassment, anti-bullying--
a particular campaign
that we have invested in.
They do really good work.
Tomorrow is our big benefit
where my boss is actually
being honored as the
humanitarian of the year,
because at Adobe we care really
deeply about our communities
and about young
people, in particular,
and helping them
express themselves.
That's the mission
of our whole company.
I'm also on a public board.
The difference between
a nonprofit board
and a public board,
public board--
the company makes money.
And so it's a very different
kind of an experience.
You have to really
have financial acumen.
You are responsible to the
shareholders of your company.
And you essentially
run the company.
The CEO of the
company works for you.
This was all very new to me.
And it's also very
different to be on a board
than it is to actually
operate your own business,
because there's a certain
kind of arm's length distance
when you're on a board.
You're not managing that company
day to day, you're advising.
And this is a natural
progression, I think,
when you've been in business
a long time to then become
more of an advisor.
So this is a role
I really enjoy.
And I love Mattel
because it's toys.
What could be more
fun than toys?
I was asked to be on a
bunch of tech boards.
And I'm like, I've been
in tech for 30 years.
I want to work on something
that I feel is a lot more fun
and actually can have a huge
impact, and that's toys.
So it's been wonderful for me.
And I also run our foundation.
And at Adobe, 1% of our net
profits go into our foundation.
And we use that money to help
causes in our communities,
but mostly for our flagship
charity, which is Project 1324.
It's a new platform that,
hopefully, someday all of you
will use, where you
can share media.
You create media.
You share media, mostly
on social causes.
And we're just looking
to launch it probably
over the next few months.
We just did a pilot, if
you will, with Sundance,
where we had a student film
competition for kids 18 to 24.
We received over
400 submissions.
And we just had the
five top winners
come to our big
creativity conference
last week with
Quentin Tarantino.
And they are, hopefully, going
to become great filmmakers.
So these are the things that I
basically spend my time doing.
So that's my story.
Maybe I'll end with
where I started.
That there are these
four key themes
that, hopefully, you saw
recurring throughout my life.
And I still rely on these
lessons every single day.
And I'm choking up.
Lehigh played a huge role
in teaching them to me
and shaping the leader
that I am today.
I can't believe I'm crying.
What a baby.
So it's been an amazing journey.
And again, I'm so
grateful to all
of you for coming, and to
Donna, and John for inviting me.
Thank you.
[APPLAUSE]
Can you do some Q&A?
Sure.
Sure.
Great.
Well--
If I don't have a
complete nervous breakdown
after [INAUDIBLE].
No.
It was wonderful.
It was wonderful.
Thank you.
You can stand here or
you're welcome just to sit.
Whatever you like.
You're certainly our guest.
OK.
So we want to open up the
microphones now for some Q&A.
There's a microphone here.
And there's a microphone there.
So please don't be shy.
Come down to the microphones.
While people are coming down,
I'll start off with a question
that I'm struck me--
Do you want me to
come a little closer?
I don't have a mic.
I'm stuck over here.
How about if I just stand?
Whatever you like.
Yeah.
It's a little lonely over there.
Here, you and I will stand here.
We'll stand together.
OK.
Or I'll stand.
So when Adobe made the
decision to switch from a--
We call it a perpetual.
--perpetual service to
a subscription service,
what were some of the pushbacks
that people within the company
were voicing?
And how did you, as a group,
overcome that resistance?
Such a good question.
So there was pushback
internally and externally.
So one of the biggest
problems that we foresaw
is that our revenue was going to
take a steep decline because we
were not going to be collecting
all the revenue upfront.
And so we had to
go to Wall Street
and explain what we were going
to do, very, very carefully,
with a lot of detail.
And essentially,
project for them
when we thought that
revenue would come back in.
And so there was some
resistance about that.
But there was resistance
across the entire organization
because we were going
to, for instance, have
to start marketing
24 hours a day,
rather than every
18 to 24 months.
We were going to have to
change all of our product SKUs
because we would
be shipping boxes.
Our channel, who we were
distributing through--
they were very upset
with us because that
was their livelihood.
Now we were going, in many
cases, direct to the customer.
But our customers were
also very resistant.
There were huge portions
of our customer base
that liked receiving
that tangible box.
And they felt that this decision
was being forced upon them.
And so we also
had to anticipate,
what are our customers
is going to feel?
And I think we
probably underestimated
some of the negative
reactions that customers
would have to this.
And in some markets
it was tremendous.
Like in Germany, they were
like, this is terrible.
We hate the Cloud.
We don't want to do this.
And still, the
business is, I would
say, growing, but not as
dramatically in some markets
as it is in others.
So when you transform a company,
it it runs across the spectrum.
Everything changes
internally, externally.
And we're still
iterating, essentially,
because the change
is so profound.
But we've done it.
We're on the other end.
Yes.
Hi.
Sorry.
My name's [INAUDIBLE].
First of all, the
first question--
I'd like to thank you for
coming to speak to us today.
It was really nice.
My question is about the stock
valuation, interestingly.
All of the things that
you mentioned today
is what's driving
the stock price.
The last five years
they beat expectations.
And now it's reached
quite a high level.
And you mentioned just now that
it's about going to Wall Street
and explaining the transparency.
But we see that some
people are beginning
to doubt whether earnings
will fall given--
I think right now it's
basically expectations
from the Cloud service,
which is supposed
to drive the earnings up.
And that's beginning to take
a bit of a [INAUDIBLE] look
from Wall Street.
I was wondering how you
justify the valuations today?
Wow.
Well, obviously I can't
discuss anything confidential.
But we think our valuation
is completely legitimate.
And there's still a lot
of growth that Adobe has.
I mean, we forecast, again,
20% year on year growth
overall from a
revenue perspective.
Our EPS-- we're
always on target.
Our digital marketing business,
which is the newer business,
is growing 25% to 30% annually.
We're still bringing a lot more
Creative Cloud customers in.
We went, as I said, from
3 million to 8 million.
And there are a lot
of other markets--
India and China.
We just launched Creative
Cloud last week in China
for the first time.
And we actually think
a low price point
may be the best,
finally, ammunition
we have against piracy in
some of these big markets.
So we think there's a
lot of growth ahead.
Thank you.
You're welcome.
That's a good question.
Well, I want you to go back to--
oh, let's say, 1980.
I wish I could go back to 1980.
What do you wish--
if you were sitting
in the audience,
what do you wish you knew
then that you know now
about your career?
Or anything else
you wish to divulge.
A lot of things.
As I said, I had this mentor,
a man named Jim Jared, who
was my first boss at Intel.
This is very sad, but
says a lot about him.
He died three years ago on
the peak of Mount Kilimanjaro
because he was the kind
of man who was always
doing incredible things.
And he was a very
adventurous soul.
But I was very annoying.
And I was always saying,
I want to do this project.
And if somebody did something
I didn't like I was saying,
why are they doing that?
And I was just animated.
And he told me early on,
Ann, you cannot go to the mat
for everything.
You really need to
determine those things that
are going to make the
biggest difference for you.
And let some of this go.
And I work on this every
single day, literally.
It's still hard for me.
But I think it's a very
important lesson in business
because you will occupy all of
your time fussing and fighting
if you don't focus on
the critical things that
need to get done.
That's great advice.
Let's go over here,
and then over here.
Hi, my name's Kyle.
I'd like to also thank
you for coming here today.
The question I have for
you is you mentioned
that within the past seven to
10 years, you guys at Adobe
were able to execute a lot
of vertical and horizontal
integration with
other companies.
But you also said that you
guys produce almost all
of your own content.
So I'm wondering
how you transition
between your acquisitions
into in-house production?
Yeah.
So I would say, pretty
much every acquisition
we have a very, very high
employee integration rate.
There are a lot of
companies in technology
that acquire companies and then
they carve out the employees.
And they basically pay them out.
We have, I would say, 80%
to 90% employee integration.
And we buy companies--
back to that idea
of having a good cultural
fit and working well
with people, we pick companies
where we like the people.
And we turn away companies
that might actually,
from a business perspective,
make sense if we can't-- we
have actually done that if
cultural fit doesn't work out.
So integration is
super important to us.
In terms of in-sourcing
content development,
I don't know that it works
for every single company.
At Adobe it works
really well because
of the products that we have.
So we can get really
fabulous designers and really
fabulous content people.
And then we have the digital
marketing tools as well.
So we hire analysts,
econometricians, data
scientists.
And we can get those people
because they're working
where this stuff is invented.
And so, I think, it's a little,
maybe, unique situation.
But back to the
employee integration,
we keep all the
marketing people.
We just make sure
they're the right people.
Thank you.
Don, you're going
to ask a question?
Oh, I'm sorry.
The light hit me.
I didn't see that it was Don.
Ann, I don't want to encroach on
privacy, but I'm just curious.
Being a finance
guy and listening
to you touch on, momentarily,
on earnings reporting,
can you possibly
summarize Ann Lewnes' day
on earnings reporting?
So it's actually--
Is that OK?
Sure.
It's actually a lot longer
than one day, sadly.
So we are a very
disciplined company.
And I think that's why we
get rewarded by Wall Street.
So the earnings process begins,
in earnest, probably one
to two weeks before the
actual earnings announcement.
And we have a head of investor
relations who's responsible.
He's the guy who talks
to the Street every day.
We have our CFO, myself,
our Chief Counsel,
and then our CEO.
That's really the core team.
And then I have a
writer who, basically,
does a first draft of
how the business is doing
without any numbers, because
we're very, I would say,
rigorous about not letting a
lot of people on the numbers
until right at the end.
And so the process is to have a
recording of the earnings read.
I don't think, always typical of
this, but we write the script.
And Shantanu and I do
his part of the script.
And then the CFO and the
investor relations guy
do the financials, but
we view them as a team.
So I'm involved in
the entire process,
word smithing, positioning.
How will this play?
Let's say this.
I don't know.
So probably five days of that--
it's quite a long process.
And then it's prerecorded.
The day before and then--
oh, excuse me,
the morning before
because we release at 1:10 p.m.
on a Tuesday or
Thursday, typically.
So we prerecord it so that the
focus can be really on the Q&A,
because that's the
most important part.
The script is already
predetermined.
We put it on a website.
We fact check it.
We have FAQs, frequently
asked questions.
And then the call is probably
the most important part.
That's an hour after the release
of the financial earnings.
This might be too
much information,
but I'll tell you
since you asked.
And then we do press.
And then we do call downs
with the financial analyst
to explain more information
if they want it.
But the call, that one hour--
an hour after the
press release drops
is the critical time
because the CEO and the CFO
get on the phone.
And they answer questions
from a group of analysts.
And that's how it works.
Now interestingly, because
the press release drops right
at 1:10, after
market close, there's
often like a little
blip in the stock,
or a little dip in the stock,
because the press release
goes out.
And people sell or buy
based on that press release.
And then over the course
of that next hour,
when the call actually
occurs, the stock
moves a ton because all the
questions are being answered
by the CEO and the CFO.
So you see a real difference
in those first five minutes.
And I'm always telling them,
don't look for five minutes.
Do not look.
Let's wait till 2:00
to make an assessment
because it's during that one
hour period and the call downs
after market that the
stock goes up or down.
Hi, my name's Roger.
I just wanted to thank you
again for coming today.
My question is, what
advice would you
give to a small
business company that's
looking to pivot in a completely
new direction with regards
to its marketing and
advertising strategy?
Is it your small
business company?
It's a project that I'm working
on with Professor [INAUDIBLE]
over here.
It's a friend.
I'm talking for a friend.
Well, we love small
businesses in Silicon Valley.
Obviously, it's a
startup culture.
And what I would say
is it's a great time
to be an entrepreneur because
from a marketing perspective,
you can market yourself.
This used to be something
that was very difficult to do.
There are countless
stories of companies
that have gone big
just from social media.
And I think the number
one thing you can do
is promote the heck
out of yourself.
The second thing I would do is
find people who can advise you,
because there are
a lot of people
who love to advise students
and young small businesses.
That's something both that
recent grads love to do,
people like myself--
I do it all the time.
And I think advice from
seasoned business folks
is very important to what
your business plan ultimately
becomes.
And you need a
great business plan.
The folklore in Silicon Valley
is you come in and you say,
I don't know how I'm
going to make money,
but I have a great idea.
No.
I think those days are over.
You need a solid business plan.
And that means advice.
And you need a little seed
money if you have a good idea.
Thank you.
You're welcome.
Hi, I'm Jennifer Cunningham.
I've been tweeting
you the last few days.
So I'm so glad you're here.
That's very nice.
Thank you.
So I'm the alumni director here.
And I think a lot about
the great education
that students are
getting now, but I also
worry about the education
that they'll get
after they come out of Lehigh.
And being that Adobe is
so progressive in terms
of your policies
and all of that,
can you talk a little bit about
what Adobe does for leadership
training, ongoing, and how
important that is, and also
if there's anything
special that you
do for female leaders
in the tech business.
These are like set up.
These are softball questions.
So people resources,
human resources, and Adobe
is crazy good.
I was at a
semiconductor company,
and basically, the
only time you ever
saw HR was when they
were firing you.
And so when I got to
Adobe and I was surrounded
by all these people resources.
It was kind of scary to me.
The first thing they did was
they focused on integration.
And it's back to that
word of integration.
The first thing my HR person
told me is when you're here,
we don't want you to assimilate
because that means we
would make you into who we are.
We want to integrate
you, so that you
bring the best of yourself.
And you take the best of us.
And I was like, who
are these people?
But that's, literally,
how the company runs.
And it's all about integration.
From a leadership standpoint,
we have all different levels
of leadership training.
So we pick some of our prized,
budding senior managers.
We have a course that's
developed with UC
Berkeley from the Haas School.
And we do an intact,
one week with them.
And they are each
assigned projects,
which they work on there and
then follow up on as well.
And they present them
to executive staff.
We have middle management
training programs.
We have online training
that's mandatory.
Across a lot of different--
from sexual harassment
to social governance.
And depending on what
your area of discipline is
there's a ton of
online training.
In terms of diversity, we
have some great programs.
We had our first ever
women's leadership forum
a couple of months ago.
We had 500 women come from
around the world to San
Jose where our headquarters is.
It was the first time
we ever had these women.
And I didn't mention, diversity
is a huge issue in technology
in Silicon Valley.
In our company, as in most, we
have about 30% to 40% women.
And in engineering,
we have 20% or less.
So it's really bad.
And in some regions
it's even worse.
And so this was the first time
we ever brought all these women
together.
It was just fantastic.
We had Samantha Bee.
We had Brene Brown, who's this
incredibly inspiring leader.
I don't know if you know her.
And she talked all
about her journey.
And then we had some of our
senior leader women talk
about what they do.
Pooja, who's here
with me today, is
part of a program
called Women Unlimited.
And that is, again,
hand-selected program
where these female leaders
from different companies
in the Valley meet
with executives.
Whether it's me or other--
and not just females.
But they learn leadership
skills by studying others
and by also doing coursework.
So we're doing a lot, but
we have not done enough.
And diversity is still an issue
in tech in Silicon Valley.
And we're trying to work on it.
So females, come
to Silicon Valley.
That's the message.
Well, I've learned
so, so very much.
And thank you so much.
Thank you so much for having me.
What an outstanding
presentation.
You're not done yet.
Oh, I'm not done yet.
OK.
No.
You're not done yet.
Don and Judy, thank you
for making this possible.
And I would like to
welcome Don back up.
We have party gifts.
Oh, party gifts.
OK.
I got the loveliest pillow today
from the marketing and finance
group.
Thank you.
They're sending it back
a nicely high pillow.
Thank you.
Don, would you like
to do the honors?
Ann, on behalf of the
college, of Judy and myself,
this is for you.
Thank you.
And you did an
absolutely fabulous job.
Thank you, Don.
And that's a little
on the heavy side.
My goodness, what is this?
[INAUDIBLE]
Is it 33 years worth?
Oh, by the way, we're supposed
to look at the cameras.
Oh, we're supposed to look
at the camera and smile.
Oh my goodness.
Look at this beautiful thing.
That's gorgeous.
Thank you.
Thank you for having me.
Thank you very much.
Good luck to all of you.
Thank you all for coming.
I know that I learned a lot.
I hope you did too.
And happy end of semester.
