When Henry R. Kravis took the stage to give the 2025 Lewis H. Durland Memorial Lecture, he opened with a confession: “I didn’t have a clue what I was doing in 1976.” It was a humble start from an investor who, that year, had cofounded KKR & Co., a global private equity startup that is now a powerhouse with over $650 billion in assets under management.

Kravis spoke about entrepreneurial grit and culture-centric leadership at Statler Auditorium on April 22 during a wide-ranging discussion with Andrew Karolyi, Charles Field Knight Dean of the Cornell SC Johnson College of Business. They reflected on nearly five decades of business transformation, investment philosophy and personal values. 

This year’s Durland Lecture, hosted by the SC Johnson College and now in its 36th year, brought together more than 1,300 students, alumni, faculty and staff, both in-person and online.

In 1976, Kravis, his cousin George Roberts, and their mentor Jerry Kohlberg quit their positions at the former investment bank Bear Stearns to start their own firm. They had no clients, no capital and no certainty of success. “Each of us had three kids and no income,” Kravis said. “It was a high-risk move. But if you're an entrepreneur, you get through the wall or over it.”

Kohlberg contributed $100,000, while Kravis and Roberts each invested $10,000. They raised the rest of their first fund piecemeal, with eight individual investors contributing $50,000 each. It was a structure born more out of necessity than strategy, Kravis said. Their 20% carried interest model is now the industry standard. But at the time, that too was improvised, inspired by oil and gas deals they’d seen growing up. “We had no money, and we were just trying to get started,” Kravis said. “That’s what capital constraints look like.”

But what set KKR apart wasn’t just innovation in financing. It was a fundamental shift in business philosophy.

The most defining moment of KKR’s origin story, Kravis said, was the culture. “On May 1, 1976, our first day as KKR, we spent more time discussing our values than our economics,” he said. They deliberately rejected the “eat what you kill” ethos of Wall Street and instead built a collaborative, team-based environment where everyone shared in the firm’s success.

“We evaluate every employee on four things,” Kravis explained: commercial success, leadership, diversity and inclusion, and – most critically – culture and values. “If you don’t live the values, you won’t get promoted, no matter how much money you’ve made.”

It’s a principle KKR has protected, even letting go of top performers who couldn’t support others, he said. “We’re a team,” Kravis said. “You can’t build a business by yourself. That’s not sustainable.”

That philosophy of shared success eventually expanded beyond KKR’s offices. Kravis described the firm’s “Ownership Works” initiative – an effort to make frontline employees in KKR portfolio companies shareholders in their businesses.

At one of their companies, a garage door manufacturer in Illinois, long-time employees walked away with equity checks as high as $800,000 when the company was sold. “When people are owners, not renters, they think differently,” Kravis said. “They care more. They contribute more. The best ideas don’t come from the boardroom; they come from the shop floor.”

Private equity, including KKR, has played a significant role in an industry trend: the “listing gap,” which has seen the number of public companies in the U.S. shrink by half over the past few decades, Karolyi said.

Kravis defended the evolution. “In the 1970s and ’80s, so many public companies were poorly run,” he said. “Boards weren’t holding anyone accountable. We saw an opportunity to do better – to improve operations, not just finances.”

He pointed to Safeway as an example. KRR acquired the troubled supermarket chain and helped transform it by dramatically improving margins through operational excellence.

Today, Kravis questions the logic of having companies stay public: “If you're not using your equity to raise capital and you’re trading poorly, why take on the cost and pressure of being public?” He criticized the obsession with quarterly earnings, which he believes incentivizes short-term thinking and stifles innovation.

“We’re long-term investors,” he said. “And that’s how real value is created.”

Kravis emphasized the importance of giving back. He spoke passionately about his role with Sponsors for Educational Opportunity (SEO), a nonprofit supporting students from underserved communities from high school through college.

“90% of SEO students graduate college, compared to 20% for similar demographics,” Kravis said. “It’s not just about access – it’s about support. And that’s what we provide.”

At Cornell, KKR is the founding sponsor of the Accelerator Scholars Program at the SC Johnson College, which provides mentoring and networking to first-generation undergraduate students in the Charles H. Dyson School of Applied Economics and Management and the Cornell Peter and Stephanie Nolan School of Hotel Administration. The program supports 50 students from the classes of 2026 and 2027, plus 17 upperclassmen mentors, for activities including virtual career sessions and mentoring with KKR Cornell alumni. Accelerator Scholars had an opportunity to meet and speak with Kravis before the lecture.

The Lewis H. Durland Memorial Lecture was established in 1983 in memory of Lewis H. Durland, Class of 1930, who served as the university’s chief financial officer for more than 25 years.

Maria Minsker ’13 is a freelance writer for the Cornell SC Johnson College of Business.