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These are excerpts from Carly Fiorina’s presentation at the 2005, 75th MIT Sloan Convocation. A Sloan Fellow, who graduated from MIT Sloan School of Management in 1989, Fiorina enjoyed a distinguished career at AT&T and then at Lucent, before moving to Hewlett-Packard as chairman, and CEO. In 2004, she was appointed to the US Space Commission to advise it on the nation’s space -science agenda. She is a member of the MIT Corporation, the University’s board of trustees.

In the words of your new president, Susan Hockfield, MIT is an institution that raises the bar for itself and for everyone in the institution all the time. It has received more Nobel prizes in the last 15 years than any other institution: nine since 1990, four since the year 2000, and one just yesterday in chemistry. It is a tribute to the environment here as well as the brilliance of the faculty and its students. One of the things I remember most about Sloan is that interaction with truly brilliant people on an everyday basis was both inspiring and intimidating, creating an exhilarating environment where you strove to do your very best.

MIT is also and most famously the premier institution for science and engineering education and research in the world. As science and engineering are what will drive innovation and prosperity and competitiveness going forward, this is an institution of huge value to this nation.

This school highly values exposure to all of the disciplines. This grounds people. It gives them perspective. It gives them judgment.

It is very different to take classes in economics or finance when you are just starting out and taking those classes when you are mid-career. It's one thing to learn about supply, and-demand, curves or the beta of a stock when you’re 25 and- haven’t been out in the real world. It's another thing to study those things when you actually have experienced what happens when supply exceeds demand or when the beta of your favorite stock suddenly does something it hasn't in the past.

So I appreciate my Applied Economics course…in particular the discussion about gaming theory: learning that people could do some very irrational things simply because they thought someone else might behave irrationally, and that it happened so often in a business setting that there are whole theories devised around it.

My operations research course, Management Decision Support Models, offered a real insight into the increasing complexity of modern business problems. Exploring different tools, whether quantitative mechanisms or how to organize people to approach complex problems, was fascinating.

Organizational Psychology was an eye opener, where we role-played through difficult negotiation sessions, watching how rational, well-meaning people could devolve incredibly quickly into an “I win, you lose” negotiating pattern that was extremely difficult to break and destructive to boot.

Strategic Management presented a business case where a CEO had to navigate through a lot of change. We concluded that he had moved too slowly and was overwhelmed by the momentum of the organization. And yet, how interesting to contemplate that had the CEO moved faster, he would most likely have been rebuffed and criticized as too radical and trying to do too much too soon.

I read a very old book, written in the ’20s by Chandler, in which he said that strategy should be ennobling—which struck me because I believe that business is clearly about more than stock price. People want to be associated with a goal that is larger than themselves. Business can make a positive impact in the world. And in the end, business is about people and the goal around which they rally.

As valuable as the classes, as valuable as the wonderful professors, what was most meaningful at Sloan was collaboration with fellow students.

We are all very driven, overachiever, type A people. And one way we move forward is to focus on the destination and the goal, although something always intervenes to remind us that our sense of knowing the destination is only an illusion.

We Sloan Fellows realized that we had been given the gift of an intermission in life, to think differently about things, to experience different things—a year where we didn’t know our destination, and it was okay. None of us really knew if we would have work. All of us came into the program having to give up our jobs, and so what came next was very unclear. And yet we learned to live with uncertainty. It wasn’t the best year of our lives. There were times that were extremely hard, both professionally and personally. But it was a pivotal year.

On graduation eve we discussed the journey we had taken…and wondered whether we had sufficiently savored each moment—whether we had squeezed every drop out of every experience—because success and life are not a destination, they are a journey, and every step, especially the hard ones, make us who we are.

Which leads me to HP in which I believed deeply.

Certain members of the board had certain ideas about organizational moves and personnel moves that they thought should be made. Now, on the one hand, I don’t think managing a company is a board’s job. I think it is the CEO and the management team’s job. And I think for a CEO and a management team to be held accountable for performance, they need to be able to make the moves that they think are right to deliver that performance.

On the other hand, I will say at a very pragmatic level that I’ll take good ideas from anyone. And so had I believed that those suggested moves would work, I would have made them. But I didn’t think they would work—which created a fundamental disagreement.

When confidential board conversations become public and what should stay inside the boardroom goes outside the boardroom, then a very important bond of trust is broken that compromises the effective execution of a firm’s mission. Nevertheless, I loved my mission and the people of the company and wish the people of HP nothing but the very best going forward.

I know now that when the worst thing you can imagine happens—you’re ousted suddenly without warning, and it is played out across every newspaper and television in the world —the sun comes up the next day and you go on and life goes on. You don’t lose your passion for the game. And that’s a good thing because passion is essential. Any great endeavor requires commitment of not just mind but heart, because it’s going to take all you have. If people aren’t committed in that way, the result will be less than it could be. A leader’s job is to challenge the mind but also to capture the heart. Leadership requires the ability to communicate a vision, a goal, a purpose, a direction. Whether leading a Girl Scout troop or leading a research team, leading a brand-new startup or leading an $80 billion-dollar company or an institution like MIT, you must be able to communicate a vision and a direction that people can rally around, because they believe it’s possible, and because they believe it’s worthy of their effort.

Leaders must be authentic. They have to be able to communicate direction in a credible way that people can comprehend.

There is a notion about distributed leadership, that in a well-functioning organization you really need people at all levels to take initiative, to take responsibility.

Leadership is not about title. It is not about position. It is not about how many people report to you. It is not about the size of your budget. Leadership is first and foremost a choice to make a positive impact and to change the course of something in some way. It could be a very small way, could be a very important way. And everyone is capable of leadership. I’ve seen that play out over and over and over in my business life.

So the first thing is to recognize that, to articulate that, and to create an environment where people know they are capable of leadership, that leadership and accountability is expected, that it’s rewarded to celebrate and reward that leadership.

I believe that women can achieve, are achieving and will achieve every position of important responsibility. And we clearly see that happening here at the Sloan School, at MIT, and in other places around the world. But it’s also true that the experience is different for women and different for minorities and people of color in this country. We must recognize that the obstacles that some people face are different than the obstacles others face.

One of the lessons I learned early on is that you can’t let other people’s view diminish you. Only you can diminish yourself. So being willing to plow through an obstacle, as opposed to getting intimidated by it or deflected by it, is important. And let’s face it, sometimes you screw up. Sometimes you make a mistake. Sometimes you fail. But if you’ve never failed in your life, you’ve never taken a chance.

An internal compass is incredibly important, particularly for people who are experimenting, striving, taking risks. It’s that inner voice that allows you to say, “this is what I believe,” even if everyone is saying something else.

Three things—3 billion new people entering the global economy who want to play, to have an opportunity to make a better life; the fact that everything is becoming digital, mobile, virtual and personal over time; and the fact that ours is becoming a horizontally-networked world rather than a vertical command-and-control world—are responsible for fundamental transformations that make the 21st century vastly different than the 20th.

The issue is how to respond and lead in this new age, when many of the models that we have relied on are changing before our eyes.

We will surely take risks, because most of this is a journey of discovery. And we should savor every step, because there’s something to be learned in every one of those steps.