Rotary Club of Newport-Irvine Induction Speech by Sanjay Dalal, President and Managing Director, Innovation Index Group

I am indeed honored to become the newest member of Rotary Newport-Irvine Club today. Thank you President Jerry, Angelita, Rotarians, members and the executive team!! Our family has a deep appreciation for Rotary and Rotary foundation – my father, who is a very proud Rotarian, and proud of me becoming a Rotarian – came to U.S.A. in 1957 with a Rotary Foundation Scholarship, and obtained his MBA from Stanford Business School. If he had not come to the States, who knows? I may not be here in front of you today. Exactly 30 years hence, in 1987, I came to America. Thank you Dad and Mom for sending me here for education and our success.

A little about me... I am not right wing, nor left wing... nor affiliated with any political wings. I just became a U.S. Citizen. I have a question for the audience: What is the most important right of a U.S. citizen? (right to vote)

What I am though is a married family man, raising two wonderful kids, participating in many local activities including basketball coaching, art master, school site council and more. And yes, my business is all about determining the fundamentals of companies whose stocks we invest in.

I am proud of my heritage, my parent country India, the world’s largest democracy. It is a great privilege that my family and I live in America, our home, the world’s greatest democracy, a country of tremendous opportunity and pioneering spirit.

I want to thank my wife, for raising two wonderful children, and who has stood by me through thick and thin over so many years.

Today, in LA County alone, we have tens of thousands of kids who live in foster families. There are more than 600 children currently waiting for an adoptive family. I invite the Rotarians to contribute your time and money to help these children through the KidSave organization based in Los Angeles.

My wife and I have sponsored a child in India for the past many years through Christian Children’s Fund. He lives in Jharkhand state. He is a growing kid, and when we got a letter from him where he talks about, I quote, “the Save Environment program in Jharkhand where the main objective is inhibition on hunting because life is the right of animal” end quote, it really moved us.

Over the years, we have donated our time and money to many charities including USO, Big Brothers and Big Sisters, Salvation Army, Free Wheel Chair Mission, Fire Fighters, Police and Sheriff organizations, Hurricane Katrina, Tsunami Relief, China Earthquake, Myanmar Floods, BAPS and more.

Last week, at the local Jain Center, thousands of Jains celebrated the opening of new temple, and asked for forgiveness. My wife is a Jain, and we follow the principles of non-violence, peace, honesty and kindness.

I want to take this opportunity to thank America, our home, for helping us grow and flourish, and letting us enjoy the free spirit and democratic ideals.

We, all of us, are quite blessed by God. Let us take a moment to thank our parents, our family, our friends, our colleagues at work, our partners, our neighbors, our community and our country. We work hard, and most of us have a nice house to live, drive good cars, do not have to worry about food, are healthy (best wishes for Brady) and do well financially. So, let us make a promise to ourselves today: We must not complain.

God Bless Us All and God Bless America...

$1 Billion or the Future

A stalling business was given two options:

1. $1 billion dollar today

OR

2. The Future of the business (knowledge of what will happen in the future)

What will the business do? Which option will it take?

What would you do if you were given a choice of $10 Million today, or knowing your Future?

Would you take the money, and make a New Future?

OR

Would you find out everything about your Future and Relax?

What does this question have to do with Creativity and Innovation?

The Top 20 Innovators of The Innovation Index are always grappling with the question of what to do with the money they generate!!

Frequently though, the Innovators bow in to investor pressures and stock valuations, and use the money to buy back shares! This is clearly Not Innovation. Because the Future of the business is not secured by just buying back shares. The business needs money to invest and grow! Just buying back shares does not create the organic growth.

The other extreme is where Innovators use the cash too freely and go on a buying spree - "let's acquire a whole lot of companies, and integrate them into our core businesses." The efficiencies generated will pay for the costs over time, and if we get lucky, the acquisition will hit a home run! Too often, large acquisitions fail owing to overly optimistic projections about the Future, and lofty valuations produced by the M & A teams.

Then there are Innovators who generate too much cash from the existing business, and don't know what to do with it. They miss out on the changing landscape, the changing ecosystem of demand, the growth opportunities that they could have pursued, should have sought! These businesses pass on the cash through dividends to share holders, or often, sit on the cash, only to realize a few years down the road after knowing the Future that they should have used the cash to create new opportunities and innovations today, and used their creativity to create the Future with the available cash.

More often than not, the young companies (less than ten years old) maximize the use of cash to create new innovations and opportunities, and at times disruptive innovations. As the companies become old, they become conservative, and tend to minimize risks - even become risk averse. However, the top 20 Innovators of the Innovation Index strive to leverage the free cash flow, and use their potential to create new innovations and growth time and time again.

The bold companies who take risks and innovate make a new Future, every year.