Sudden, unexpected new dynamics are changing the business environment substantially. Now just one crisis, such as the credit debacle, can wipe out a company, and cripple entire industries. No company is immune, no matter how established they are. So we truly live in a time of extraordinary and unprecedented change. As leaders, there is no rulebook we can follow. And no safe harbor. No one, regardless of his or her industry, can become complacent. Companies must learn to constantly reinvent themselves by the day to stay competitive and leaders must continually reinvent themselves as well, never accepting the status quo, but always striving to be better.

Continual reinvention has certainly been the hallmark of my career at Avon. This year marks my tenth as CEO of Avon, and the last decade has been an exciting roller coaster ride. The adventure has opened my eyes to many things: …the increasingly complex demands of running a business today, my own skills and competencies, and about the need to constantly challenge and renew my own commitment to being a better leader during transformational times.

During my tenure as CEO over the last decade, the company has undergone a significant transformation in every aspect of the business. We have built and continue to grow a wonderfully diverse team. And it’s through the strength of this team, that we have reinvented and transformed the company from top to bottom, building on the considerable power of our core equities but modernizing them for a new generation.

We’ve taken a brand that was always well respected and made it modern, hip, and relevant to today’s consumer – this includes investing in world-class innovation for our products and forging alliances with global celebrities and leading fashion designers. As a result, Avon has been named one of Business Week’s top 100 global consumer brands for eight straight years.

We’ve also transformed our channel. Yesterday’s Avon Ladies have evolved into today’s modern entrepreneurs. These smart, savvy professional women are a far cry from the famous “ding dong” Avon Ladies of years past. The high-touch is still there, but now they also sell high tech, running modern, web-based businesses. They have emerged as business leaders in their own communities in every corner of the world.

In addition, we have transformed our operating model and coststructure. In the last decade, our business has expanded across the globe and more than doubled in size. In response to this exponential growth, we have had to transform the way we go to market, including leveraging our assets more strategically to gain cost benefits from our global scale.

I’ll never forget the day I was doing The New York Times crossword puzzle and came across the clue, “The company for women.” And the answer, of course, was Avon. In years past, the clue would most certainly have been “Ding Dong.”

Throughout my career, I have tried to embrace every challenge as openly and honestly as possible. Along the way, I’ve come to believe that there are really eight qualities that define outstanding leadership in today’s complex environment. I’d like to talk about each of these leadership qualities, and what I have learned during the course of my career – my tales from the front lines of leadership, if you will.

First, and for me most important, is to have Passion. To love what you do. For me, Passion as been at the foundation of all my most critical career decisions.

Sometimes leaders have to make tough decisions. But even as we make these decisions, compassion and the protection of the human spirit and dignity must always be the first concern. A business is nothing more and nothing less than its people. And caring about your people is the hallmark of great leadership. And it’s ok to cry – even in business settings – and to express your feelings for the people you care about.

This was brought home to me in a very personal way in late 2005, when we made the very difficult decision to cut the number of layers of management in half. Our goal was to eliminate bureaucracy and streamline decision making. It was the absolute right thing to do, but it meant that over the course of four months, we actually eliminated 30% of the senior management ranks. Many of these people were my close friends. I had walking pneumonia at the time, but I got on a plane and traveled around the world and spoke personally to our thousand top leaders. I looked them in the eye and explained why we had to eliminate 1/3 of all positions. I assured them that no matter what, we were going to be fair, honest and open throughout the entire process.

Following these meetings people sent me emails of encouragement, telling me that my message was really difficult to hear but that they were glad I had taken the time to come and explain it to them in person. They told me I was doing the right thing for the company. Their feedback and support was incredibly energizing.

The quality of Compassion enabled all of us to get through a difficult time and emerge even stronger.

With apologies to Eleanor Roosevelt, the third defining leadership quality for me is Courage. I think I was a little lucky in that I was born without the fear gene. No matter what field of endeavor, the challenges are complex, and the ability to transcend fear and take calculated risks distinguishes those who succeed.

For me, leading a multinational corporation in today’s increasingly globalized business world has been a true adventure in fearlessness. The change is constant and the scrutiny is intense. And every time I think I’ve reached the summit, it turns out to be only the bottom of the next hill.

I talked to you about the difficult management cuts we made in 2005. Until that time, the company had been flying high, delivering five years of record-breaking growth. But as 2005 progressed, it became clear we were headed for some challenges. Courageous moves were required. In addition to reducing management layers, we embarked on the most comprehensive restructuring in Avon’s history. This meant radically transforming the company from top to bottom so that we could effectively operate as the global giant we had become. We took bold actions, and put the company back on a strong growth track.

And now, again, as we navigate through this newest period of challenge, having courage —and not letting fear trump the fundamentals—remains key to staying the course.

Closely related to Courage is Humility, and that’s the fourth quality that I believe distinguishes leaders today. No one person, no matter how capable, has all the answers. Having the humility to be able to continue to learn and to be able to change your own decision based on new information is the key to continual renewal and growth.

As I was deciding back in 2005 to undertake the boldest-ever restructuring of the company, I had a frank conversation with a friend to whom I turn for advice from time to time. He reminded me that most people who successfully orchestrate significant corporate turnarounds come from outside, because they have no vested interest in the company or its people. It was 8 P.M. on a Friday night, and he challenged me. Could I, he asked, go home over the weekend and fire myself as the CEO who had presided over five years of explosive growth, and then rehire myself Monday morning as the turnaround specialist who would lead the company into the next era?

It meant totally reinventing myself from the leader I had been to an entirely new type of leader who would be right for the next chapter in the company’s history. It was a very humbling experience, but ultimately very liberating.

The fifth leadership quality I want to talk about is Pride. I firmly believe that no matter where we were born or how we were raised, it is important to have pride in your heritage. Our personal heritage gives us a unique toolbox of strengths we can draw on throughout our life and career.

For me, my Chinese heritage has been a wonderful compass, a fortuitous gift, and an enormous source of strength.

I was raised in a traditional Chinese family where achievement was not demanded, but expected. My father, born in Hong Kong, was a successful architect. My mother, born in Shanghai, was the first female chemical engineer in her graduating class. They arrived in America not speaking a word of English but through hard work, both were able to reach their full potential, and their success has set a wonderful example for me.

My brother and I were given all the opportunities as our American friends— the same schools, the same tennis lessons, the same piano teachers. But we had a wonderful advantage—we had a cultural heritage that we were always taught to beproud of.

My brother and I smile today when we reminisce about growing up in our house. Because in our house, everything important in life came from China, was invented in China and owed all to the Chinese.

When I first became Avon’s CEO, Dan Rather interviewed my dad and asked him if he always knew I would be successful in business. No, he said, quite to the contrary: he worried for years that raising me to be a respectful Chinese daughter would hinder my ability to compete in a world with what he considered aggressive, cutthroat traits of typical American CEO’s. In fact, he passed on a letter to me that I keep, translated from Chinese to English, in my desk drawer. The letter reads:

“Remember, there are distinctive qualities that set apart the successful Chinese: strive to excel in all you do; be a superb parent willing to curtail your own pleasure for the sake of better nurturing your children; be generous, fair, tolerant, eager to learn from other cultures while sharing your own. But beyond these attributes, remember to have an absence of arrogance and boastfulness; have unfailing courtesy, forbearance, sensitivity to others’ feelings, and above all, the ability to diffuse your anger and grievance not by suppressing them but by transforming them into helpful, positive emotions. In an age and environment of
pretension, you have a precious Chinese cultural heritage which we are proud to pass down to you…”

I have my Chinese heritage to thank for teaching me the next important quality of leadership I want to talk about. Perseverance.

When I graduated from Princeton, my very first job was as an executive trainee at Federated Department Stores. The trainees’ responsibility was simple — we had to put clothes on hangers in a stock room store. As you can imagine, this was not exactly what I envisioned I’d be doing with my college diploma. So one day I decided to quit, and I called my parents to tell them so. I assumed that, naturally, my parents would understand my predicament. Instead, mother’s response was: “Quit? You can’t quit. Jungs don’t quit.”

So I didn’t. I persevered. And as a result, I ended up falling in love with the consumer business and the course of my future career was set.

And this brings me to the final leadership quality I want to talk about today. It’s the most important leadership quality of all – Make a difference.

At the end of the day, each and every one of us is held accountable to a higher purpose. And as a leader, I strongly believe that contributing to a greater social good will become a key barometer for success, and the hallmark of distinguished leadership in this next century.

And that’s a very good thing, because making a difference in the communities we serve has never been more important than it is today. While the annual numbers for charitable giving haven’t come in yet, nonprofit organizations are bracing themselves for less donations in light of today’s economic crisis — and this is during a time when needs have never been greater.

In closing, I want to thank you for inviting me to be with you to share this wonderful program. And I want to leave you with a quote which inspires me every day. It’s written by Jim Collins, a renowned business consultant and author of the best-selling book, Good to Great. I have read this book, cover to cover, many times. Jim’s business perspective is certainly invaluable. But the part of his message that always speaks to me the most is the very last paragraph of the book:

“It is very difficult to have a meaningful life without meaningful work. Perhaps then, you might gain that rare tranquility that comes from knowing that you’ve had a hand in creating something of intrinsic excellence that makes a contribution. Indeed, you might even gain that deepest of all satisfactions: knowing that your short time here on this earth has been well spent, and that it mattered.