Distinguished Lecture Luncheon - Keynote Speaker: Mr. Drayton McLane

(IACCGH Distinguished Lecture Keynote Drayton McLane )McLane Group Chairman & Former Houston Astros owner.)

April 3rd 2013 IACCGH Distinguished lecture

McLane Group Chairman and former Houston Astros owner Drayton McLane, Jr was the keynote speaker at the IACCGH Distinguished Lecture on April 3rd at the Hess Club.  Mr McLane’s spoke on the topic of “Leadership and Business Acumen”.  This lecture was sponsored by Shell.

Mr. McLane explained that great leaders have great visions.  They see way beyond what is needed today to solve a problem.

For instance, in 1896, the largest city in Texas was Galveston. It was a port city and all European immigrants would pass through the city. In contrast, Houston had about 3,000 inhabitants and it wasn’t growing.  Six of Houston’s largest landowners finally got together with the express purpose of growing their city, asking themselves, “What can we do to make Houston grow?”

One of the community leaders suggested building a ship channel leading to Houston. They approached Washington to fund the ship channel but the government only provided half of the needed funds—Houston leaders had to raise the remainder. The 47-mile channel was completed in nine years.

Today, the port of Houston is the second largest port in the United States and the fourth largest port in the world. When the Panama Canal is widened, even more shipments will pass through the channel and Houston will continue to grow. There was no reason to build the Houston ship channel in 1896. But were it not for the visionaries who were committed to growing their hometown, the city may never have reached the level of growth it has today.

Let’s fast forward to 1942, when, once again, a group of Houston businessmen convened to discuss ways of growing the city. The result was the Texas Medical Center, today’s premier destination for exceptional and unparalleled healthcare.

When conceiving the medical center, its builders determined that at the heart of every great medical center is a medical school. At the time, there were two medical schools in Texas—University of Texas Medical Branch (UTMB) in Galveston and the Baylor College of Medicine (BCM) in Dallas. At the time, the United States was nearing the end of the Great Depression and BCM-Dallas was nearly bankrupt. Thus, the Texas Medical Center developers approached Baylor University in Waco and proposed moving BCM-Dallas to Houston and promised to donate five million to the university and to build a new administrative building.

As a result of their vision and initiative, the Texas Medical Center is the largest single medical center in the world today. With nearly 12 hospitals and over 9,000 physicians, it is unparalleled in medical expertise and talent.

One of the most famous hospitals in the world is the M.D. Anderson Cancer Center, located in Houston because of a generous donation from the Anderson family to the University of Texas.  Houston’s Texas Medical Center also houses the largest children’s hospital. Here in Houston we have world-class educational institutions. Rice University is one of the greatest universities and its reputation has been steadily increasing.

Were it not for the imagination of these visionaries, we would have neither the Houston ship channel, nor the Texas Medical Center today.

Mr. McLane then discussed oil in Houston. The first big oil company in Houston was called Humble Oil—it’s now called Exxon and based in Texas. The next was started in Beaumont and was called Texaco—it has since been renamed Chevron. The people who started these companies were pioneers.

Another pioneer started the world’s largest single food distribution company: Sysco. Sysco is based here, in Houston, and has a turnover of 47 billion dollars in this year alone. John Baugh is the creator of Sysco.  He was a great entrepreneur and huge risk taker. As we know, one needs to take risks to make things happen.

Another example of visionary business leaders is Compaq, one of the early pioneers of the personal computer. Compaq was based in Houston and was merged with HP.

Do you know what slows down vision? Success! Our success may impede our growth and development of a vision to drive growth!

Vision comes from individuals who are somewhat disenchanted, angry, mad and driven by a desire to change things. They want to become risk takers!

What is a crucial responsibility of visionaries, entrepreneurs, and other successful people? Philanthropy. Jessie Jones, a philanthropist in the 1920s, created the largest endowment fund in the southwest—Houston Endowment. The fund manages and donates several billion dollars to charitable causes.

Part of Houston’s success is not only it’s growth, but also that its successful residents give back.

This past year, Forbes rated Houston as the coolest place to live and work, based on its business environment, available opportunities, education, and recreation. When we see limitations, we don’t take the time to see the good things that we have here at home.

There are 9 billion people living in the world, with 300 million right here in the US. That’s less than 5% of the world’s population. However, the United States has 37% of the wealth of the world.  Thus, we have the ability to engage in free enterprise and become what you want to become. We are big risk takers and work hard to make things work.

If we’re going to keep up this success, we can’t sit back and relax and wait for someone to take it away from us. We have to continue to move forward, as a city!

In 2007, under Mr. McLane’s Leadership the Greater Houston Partnership launched “Opportunity Houston.” The economy was booming and moving forward but the visionaries were once again looking ahead.  The goal was to raise $40 million for economic development that would help create 600,000 regional jobs and attract $60 billion in capital investment and expand foreign trade by $120 billion in the greater Houston area by the end of 2015.

For every $1.0 million invested in Opportunity Houston between 2008 and 2011, GHP has created or retained 3,906 jobs and secured $126.8 million in capital investments.  The overall impact to the Houston economy was $12.3 billion.

The Houston economy is reviving out of the recession of 2008-2009 and the rejuvenation of Houston is not complete.  This has led to the creation of “Opportunity Houston 2.0”.

“Opportunity Houston 2.0” is a six year program commencing in 2014. The program will continue to act as an aggressive marketing initiative that will generate leads for economic development organizations throughout the Houston 10-county region. Specifically, the initiative will focus on the following areas:

  • Proactive and targeted marketing and public relations’ campaigns
  • Identification and pursuit of foreign direct investment
  • Further refinement of marketing and industries
  • Focus on long-term Economic Development Objectives (Ports, NASA, Texas Medical Center, Universities, Energy Sector)
  • Staffing to handle increase in project leads
  • Improve broader business community’s perception of Houston Opportunity Houston 2.0 is a sound investment – used for the good of our people, our families and our great city.

In his talk Mr McLane touched on other areas including the importance of mentorship. Mr McLane had a mentor when he first started his business. If you’re going to have a mentor, it has to be someone who is going to talk to you and encourage you. It can’t be a family member, business associate, or friend. You need someone who has good views and thoughts and who has nothing to gain or lose, by telling you the truth.

The most dangerous time for a leader is during times of success because you’re taking in all the great things people are saying about you and you start to believe it. It’s crap! What has made you and others successful is that you are a risk taker—you take risks and don’t give credence to what people may say or think about you!

Once success hits, you quit taking risks. You sit back and say, “I’ve paid my dues and I don’t need to work hard anymore.” What you don’t know is that your competitors are right behind you, breathing down your neck. For instance, let’s consider the American corporation. It is one of the most perishable things in America! Look at lists of the Fortune 500 for the past five years. 20 – 25% of those companies are gone in five years. They go bankrupt, merge, get liquidated, etcetera.

The only way you’re going to persevere is to stay focused; don’t believe what people say and continue to be a risk taker.

Remember that there are constantly new ideas! I’ve been associated with Wal-Mart, the largest corporation in the history of the world, and they will generate 427 billion dollars this year. They have 1.7 million employees. They are going to add 84,000 jobs this year. What does Wal-Mart fear? Dollar stores! Because to build a Wal-Mart supercenter, one needs about 65 acres of land and may need to go outside of the city for larger plots of land…Dollar stores…they’re everywhere! And they can be opened anywhere. They can get cheap labor. And the public likes them because you can get all sorts of stuff there…Wal-Mart, in contrast, is programmed.

The Distinguished lecture is one of the IACCGH signature events. The next event is a small business outreach on April 24 at the Katy Campus of Houston Community College. Visit www.iaccgh.com or contact info@iaccgh.com to learn about IACCGH membership.