1 00:00:00,160 --> 00:00:05,360 Speaker 1: This is Bloomberg Business Week with Carol Messer from Bloomberg Radio. So, 2 00:00:05,400 --> 00:00:08,600 Speaker 1: as I mentioned, we kicked off our broadcast today, uh 3 00:00:08,680 --> 00:00:12,520 Speaker 1: saying we had a theme adversity. Adversity because of COVID, adversity, 4 00:00:12,520 --> 00:00:16,239 Speaker 1: because of division politically, economically, because of the pandemic. We 5 00:00:16,280 --> 00:00:20,000 Speaker 1: want to talk about that and how leaders have to 6 00:00:20,079 --> 00:00:23,320 Speaker 1: manage through it, especially when their existence kind of depends 7 00:00:23,320 --> 00:00:26,279 Speaker 1: on it. We're talking particularly about corporate leaders. So joining 8 00:00:26,360 --> 00:00:29,200 Speaker 1: us once again is Michael Ainslee. He's former chairman of 9 00:00:29,320 --> 00:00:33,479 Speaker 1: Lehman Brothers, former chairman presidency of Southby's. His memoir came 10 00:00:33,520 --> 00:00:35,320 Speaker 1: out just about a year ago. It's called The Nose 11 00:00:35,400 --> 00:00:38,600 Speaker 1: for Trouble and was written about the corporate crossroads and 12 00:00:38,680 --> 00:00:41,599 Speaker 1: challenges that he faced. Michael with us, Back with us. 13 00:00:41,600 --> 00:00:44,240 Speaker 1: He's on the phone in Florida. Also with us, Howard Anderson, 14 00:00:44,479 --> 00:00:46,879 Speaker 1: who founded the Yankee Group, which was sold to Reuters. 15 00:00:46,880 --> 00:00:49,920 Speaker 1: He's co founder of Battery Venture Capital. He's invested in 16 00:00:50,040 --> 00:00:53,400 Speaker 1: hundreds of high tech companies. He's professor and senior lecturer 17 00:00:53,479 --> 00:00:57,000 Speaker 1: at Brown University and teaches a class on managing through 18 00:00:57,040 --> 00:01:00,400 Speaker 1: adversity really timely. He is on the phone for Vermont 19 00:01:00,440 --> 00:01:02,480 Speaker 1: and the two of them, by the way, classmates at 20 00:01:02,520 --> 00:01:06,160 Speaker 1: Harvard Business School, delighted to have you both. I've got 21 00:01:06,160 --> 00:01:08,040 Speaker 1: to say, I already know I'm not gonna have enough 22 00:01:08,080 --> 00:01:10,959 Speaker 1: time with the two of you, but UM, looking forward 23 00:01:11,000 --> 00:01:12,440 Speaker 1: to it because, as I said, it very timely. So 24 00:01:12,520 --> 00:01:15,640 Speaker 1: let's get to it. Professor Anderson, let me start with 25 00:01:15,680 --> 00:01:18,679 Speaker 1: you your classes about managing through adversity, and safe to say, 26 00:01:18,720 --> 00:01:20,440 Speaker 1: we've got a lot of that going on in our 27 00:01:20,480 --> 00:01:23,280 Speaker 1: world right now. You look at it, though, is like 28 00:01:23,319 --> 00:01:26,759 Speaker 1: when a company is facing something that really threatens its 29 00:01:26,880 --> 00:01:29,800 Speaker 1: very existence. UM, tell us more about what you delve 30 00:01:29,840 --> 00:01:31,880 Speaker 1: into in your course and how you think about it 31 00:01:31,959 --> 00:01:37,680 Speaker 1: the context of today's world. Boy, do we have adversity now? Yeah, 32 00:01:38,120 --> 00:01:41,199 Speaker 1: the way I think about it, it's not just missing 33 00:01:41,200 --> 00:01:44,080 Speaker 1: a little quarterly numbers, or somebody cooking the books in 34 00:01:44,160 --> 00:01:46,960 Speaker 1: Japan this week, or a product that has to be recalled. 35 00:01:47,440 --> 00:01:53,440 Speaker 1: It's something so fundamental. Um. For example, nine eleven was 36 00:01:53,480 --> 00:01:55,560 Speaker 1: a terrible thing for all of this. One of the 37 00:01:55,600 --> 00:01:59,080 Speaker 1: companies that we had invested in was a company called Akamai, 38 00:02:00,240 --> 00:02:03,960 Speaker 1: And not only did the world stop, but the founder 39 00:02:04,120 --> 00:02:07,280 Speaker 1: was on one of the planes that augured in So 40 00:02:07,360 --> 00:02:09,880 Speaker 1: not only do they lose their business for a while, 41 00:02:09,919 --> 00:02:13,280 Speaker 1: and it was a startup that was worth several billion dollars. 42 00:02:13,680 --> 00:02:18,680 Speaker 1: The customers stopped buying FBI and CI I needed them 43 00:02:18,720 --> 00:02:21,560 Speaker 1: to continue what they're doing. At the same time, the 44 00:02:21,560 --> 00:02:28,000 Speaker 1: whole company was an enormous morning. That's adversity, right, It's 45 00:02:28,040 --> 00:02:31,120 Speaker 1: something on a whole other level. Well, Michael, come on 46 00:02:31,200 --> 00:02:34,799 Speaker 1: in on it, because right like you understand, you know 47 00:02:35,200 --> 00:02:37,320 Speaker 1: whether or not that company can go forward for so 48 00:02:37,360 --> 00:02:39,799 Speaker 1: many different reasons. When you look at what's going on 49 00:02:39,880 --> 00:02:44,000 Speaker 1: in kind of our environment right now politically, business wise, 50 00:02:44,040 --> 00:02:46,800 Speaker 1: in terms of the threats that the pandemic has created 51 00:02:46,840 --> 00:02:50,160 Speaker 1: for for some businesses, or the stresses and strained how 52 00:02:50,160 --> 00:02:51,880 Speaker 1: do you see it and how do you see adversity 53 00:02:52,000 --> 00:02:56,640 Speaker 1: kind of in today's environment. Thanks Carol, it's great to 54 00:02:56,680 --> 00:03:00,480 Speaker 1: be back with you. It seems like since I first 55 00:03:00,520 --> 00:03:02,680 Speaker 1: talked with you a year ago that we've been in 56 00:03:02,760 --> 00:03:08,359 Speaker 1: adversity on steroids ever since. Uh. I hope I'm not 57 00:03:08,440 --> 00:03:11,600 Speaker 1: due to that, but uh I think the uh the 58 00:03:12,120 --> 00:03:17,519 Speaker 1: key early, the key decision maker has to be honest 59 00:03:17,639 --> 00:03:21,519 Speaker 1: and direct and open very quickly, very early. A timely 60 00:03:21,560 --> 00:03:26,600 Speaker 1: response to a crisis is critical, and you look at that. 61 00:03:27,080 --> 00:03:29,959 Speaker 1: I think some of the responses in the political environment 62 00:03:30,080 --> 00:03:33,120 Speaker 1: right now of c e O s making decisions about 63 00:03:33,160 --> 00:03:36,520 Speaker 1: political support. Uh, these are things that have to be 64 00:03:36,600 --> 00:03:42,360 Speaker 1: made overnight, literally in an immediate time frame. Well that's 65 00:03:42,400 --> 00:03:44,760 Speaker 1: a really good thing because we've seen companies really step 66 00:03:44,840 --> 00:03:47,960 Speaker 1: up quickly. Although some would argue, you know, you know 67 00:03:48,440 --> 00:03:51,280 Speaker 1: what changed, and obviously we know what changed. It's what 68 00:03:51,320 --> 00:03:55,680 Speaker 1: happened that first week of January. But it is the timeframe, Um, Howard, 69 00:03:55,760 --> 00:03:57,840 Speaker 1: let me bring you back into this, is that the 70 00:03:58,320 --> 00:04:01,720 Speaker 1: time frame that people are making this decisions, especially when, 71 00:04:01,760 --> 00:04:04,120 Speaker 1: as you say, they're facing adversity. There's just they don't 72 00:04:04,160 --> 00:04:07,640 Speaker 1: have the time like they had before. Sometimes that's true, Carl, 73 00:04:07,680 --> 00:04:10,360 Speaker 1: but not always. Let's take a look at Kodak for 74 00:04:10,400 --> 00:04:15,840 Speaker 1: a moment. Kodak owned the film market, of the amateur 75 00:04:15,840 --> 00:04:20,080 Speaker 1: film market was theirs, and they kept hiring chemical engineers 76 00:04:20,160 --> 00:04:25,039 Speaker 1: because Kodak was at its essence, a chemical company until 77 00:04:25,120 --> 00:04:29,719 Speaker 1: these crazy things called semiconductors came in and then you 78 00:04:29,800 --> 00:04:35,120 Speaker 1: needed electrical and electronic engineers. It took five to eight years, 79 00:04:35,560 --> 00:04:39,120 Speaker 1: but they went from a nifty fifty company, as Wall 80 00:04:39,160 --> 00:04:43,520 Speaker 1: Street would describe them, to bankrupt. So that was five 81 00:04:43,600 --> 00:04:47,560 Speaker 1: or six years, but they never really caught the change, 82 00:04:47,960 --> 00:04:50,719 Speaker 1: and they kept doing the same thing again and again, 83 00:04:51,320 --> 00:04:55,640 Speaker 1: and the world was a different place. So who won 84 00:04:55,720 --> 00:04:58,440 Speaker 1: that game? Where you could make an argument? Apple? Did 85 00:04:59,279 --> 00:05:02,200 Speaker 1: Kodak come soon? Afterthought? Michael, I want to ask you, 86 00:05:02,560 --> 00:05:04,240 Speaker 1: or let me actually, Howard, let me start with you. 87 00:05:04,320 --> 00:05:06,599 Speaker 1: If you were teaching a class, or you are teaching 88 00:05:07,160 --> 00:05:09,880 Speaker 1: and you want to use what you do about managing 89 00:05:09,920 --> 00:05:14,800 Speaker 1: through adversity and apply it to let's start with social media, 90 00:05:15,200 --> 00:05:16,800 Speaker 1: what would you say? And I don't know whether their 91 00:05:16,800 --> 00:05:19,680 Speaker 1: existence is at risk, but I do feel like there's 92 00:05:19,680 --> 00:05:22,679 Speaker 1: some really big questions when it comes to social media 93 00:05:22,800 --> 00:05:25,800 Speaker 1: and their influence and power right now. You know, one 94 00:05:25,800 --> 00:05:29,000 Speaker 1: of the things is that every company hits advertity sooner 95 00:05:29,080 --> 00:05:33,200 Speaker 1: or later. Uh. In terms of some of those companies, 96 00:05:33,240 --> 00:05:35,760 Speaker 1: it's come a little bit later. But think about the 97 00:05:35,760 --> 00:05:39,760 Speaker 1: relationship between the government adversity that we talked about in 98 00:05:39,880 --> 00:05:45,000 Speaker 1: COVID one. We played with things that weren't true. We 99 00:05:45,040 --> 00:05:49,920 Speaker 1: had a charismatic leader and he went too fast and 100 00:05:50,080 --> 00:05:53,360 Speaker 1: not fast enough at the same time. So social media 101 00:05:53,520 --> 00:05:56,719 Speaker 1: makes everything go faster. It used to be if you 102 00:05:56,800 --> 00:05:59,160 Speaker 1: had a problem with the product, you told your neighbor 103 00:05:59,240 --> 00:06:03,479 Speaker 1: and maybe your what's its Now? You can write a 104 00:06:03,520 --> 00:06:07,359 Speaker 1: message on a social network and ten thousand people know 105 00:06:07,400 --> 00:06:11,040 Speaker 1: it the next morning, right, It's pretty powerful. Well, so, Michael, 106 00:06:11,040 --> 00:06:13,120 Speaker 1: how do you see in terms of social media and 107 00:06:13,720 --> 00:06:16,680 Speaker 1: kind of how they managed through some of the adversity 108 00:06:16,720 --> 00:06:19,880 Speaker 1: and special especially coming off of what happened that first 109 00:06:19,920 --> 00:06:23,680 Speaker 1: week of January and you know, the breaching of the 110 00:06:23,720 --> 00:06:27,400 Speaker 1: capital and the use of social media, whether it's used 111 00:06:27,400 --> 00:06:33,400 Speaker 1: by the president or others to really kind of band together. Well, Carol, 112 00:06:33,480 --> 00:06:36,839 Speaker 1: I think the heads of those companies made some very 113 00:06:36,880 --> 00:06:43,440 Speaker 1: smart and quick decisions to eliminate access to their platforms. Uh. 114 00:06:43,480 --> 00:06:46,320 Speaker 1: There was a real threat to the existence of our 115 00:06:46,440 --> 00:06:51,040 Speaker 1: democracy and and uh it would I can't imagine what 116 00:06:51,080 --> 00:06:54,520 Speaker 1: tomorrow would be like with this inauguration had they not 117 00:06:54,760 --> 00:07:00,640 Speaker 1: taken down many of those of individuals, not just the president, 118 00:07:00,720 --> 00:07:05,080 Speaker 1: but many others, many Q Andn's and others. Uh. So 119 00:07:05,240 --> 00:07:08,960 Speaker 1: I think they made quick and wise decisions. Do I 120 00:07:09,000 --> 00:07:14,000 Speaker 1: think they're in trouble with with terms of regulation or breakups? Yes, 121 00:07:14,240 --> 00:07:17,160 Speaker 1: I think there is there is an excessive amount of 122 00:07:17,880 --> 00:07:21,120 Speaker 1: power and control there and I think there's uh they 123 00:07:21,160 --> 00:07:23,840 Speaker 1: need to be thinking about how they how they navigate 124 00:07:23,960 --> 00:07:28,280 Speaker 1: that that process, because to me, it uh, it's it's 125 00:07:28,280 --> 00:07:31,400 Speaker 1: not only likely, it's probably in the public interest from 126 00:07:31,400 --> 00:07:33,560 Speaker 1: my point of view. Professor Anderson, how do you think 127 00:07:33,600 --> 00:07:35,520 Speaker 1: that those social media companies have been able to kind 128 00:07:35,560 --> 00:07:38,760 Speaker 1: of skirt adversity for so long? Because you know, they've 129 00:07:38,800 --> 00:07:41,840 Speaker 1: been around for a while now, Um, I mean not 130 00:07:41,960 --> 00:07:44,120 Speaker 1: as long as maybe a company like Kodak where they 131 00:07:44,120 --> 00:07:47,080 Speaker 1: had established themselves. But I do wonder how they've been 132 00:07:47,120 --> 00:07:49,360 Speaker 1: able to do it. Is it a case of regulators 133 00:07:49,800 --> 00:07:51,600 Speaker 1: not being able to kind of keep up with what 134 00:07:51,640 --> 00:07:54,720 Speaker 1: they're doing? Carol, It goes back to a T and T. 135 00:07:55,000 --> 00:07:56,800 Speaker 1: If you want to know, when a T and T 136 00:07:56,960 --> 00:07:59,920 Speaker 1: got started, people would sue them because someone said something 137 00:08:00,000 --> 00:08:02,160 Speaker 1: be ad on the phone and they went to the 138 00:08:02,200 --> 00:08:05,600 Speaker 1: regulators and they said, look, we're just a pipeline here. 139 00:08:05,720 --> 00:08:13,600 Speaker 1: We don't have any specific thing to say. No, no, 140 00:08:17,200 --> 00:08:22,520 Speaker 1: that's okay, we're live though. Go ahead, Um, Carol, I 141 00:08:22,560 --> 00:08:24,200 Speaker 1: got to help my wife right now. And the car 142 00:08:24,360 --> 00:08:25,640 Speaker 1: just went off the road. We have a lot of 143 00:08:25,640 --> 00:08:28,400 Speaker 1: snow up here. Oh no, please, of course, please please 144 00:08:28,400 --> 00:08:30,840 Speaker 1: please go take care of your wife. You're in good hands. No, no, no, 145 00:08:31,160 --> 00:08:35,480 Speaker 1: I hope I hope everything's okay. No, Oh, my gosh, Um, 146 00:08:35,720 --> 00:08:39,679 Speaker 1: I hope everything's okay. Real life adversity, you know, this 147 00:08:39,720 --> 00:08:41,560 Speaker 1: is kind of what the last I feel like twelve 148 00:08:41,600 --> 00:08:46,040 Speaker 1: months have been like. Unfortunately. So, Michael, Carol, something I've 149 00:08:46,040 --> 00:08:50,440 Speaker 1: been thinking about is how does President Biden come in 150 00:08:50,600 --> 00:08:54,360 Speaker 1: and and handle this COVID crisis. Uh. I have a 151 00:08:54,440 --> 00:08:56,679 Speaker 1: lot of family and friends in the state of North 152 00:08:56,720 --> 00:09:01,200 Speaker 1: Carolina and the governor, Governor Cooper there has been an 153 00:09:01,280 --> 00:09:05,440 Speaker 1: exemplary leader in this crisis. He has been on the 154 00:09:05,600 --> 00:09:11,160 Speaker 1: on the TV daily, He's had clear and very timely responses, 155 00:09:11,559 --> 00:09:16,080 Speaker 1: scientifically based responses, and the government and the state of 156 00:09:16,080 --> 00:09:19,440 Speaker 1: North Carolina has done a very good job of managing 157 00:09:19,480 --> 00:09:22,120 Speaker 1: through this crisis. He's a role model that I hope 158 00:09:22,120 --> 00:09:24,560 Speaker 1: Biden will look to well. And it's interesting too, because 159 00:09:24,600 --> 00:09:26,480 Speaker 1: I was going to ask you listen, Michael, you and 160 00:09:26,520 --> 00:09:29,199 Speaker 1: I have talked, and I know when Jason was here, 161 00:09:29,280 --> 00:09:31,280 Speaker 1: we would talk around, you know a lot of different 162 00:09:31,280 --> 00:09:35,240 Speaker 1: big macro issues, whether it was racism, division, you know, 163 00:09:35,320 --> 00:09:38,480 Speaker 1: deep gaps in our society. And I do think I 164 00:09:38,520 --> 00:09:41,000 Speaker 1: wonder how you know, we're talking about adversity, and I 165 00:09:41,040 --> 00:09:44,160 Speaker 1: feel like there is so much adversity right now in 166 00:09:44,280 --> 00:09:47,480 Speaker 1: our government, to the point where, you know, how many 167 00:09:47,480 --> 00:09:49,960 Speaker 1: conversations have we all had over the last couple of 168 00:09:50,000 --> 00:09:52,679 Speaker 1: weeks about, you know, is our democracy safe? Will it 169 00:09:52,800 --> 00:09:55,840 Speaker 1: make it? So? You know, we talked about a company 170 00:09:55,880 --> 00:09:57,800 Speaker 1: being at risk in terms of its existence, and I 171 00:09:57,840 --> 00:10:00,400 Speaker 1: do feel like that's what the kind of conversations we've having. 172 00:10:00,960 --> 00:10:03,840 Speaker 1: How do we manage through the adversity that we're seeing 173 00:10:03,960 --> 00:10:06,679 Speaker 1: on the political front? Ear of view? Can we in 174 00:10:06,720 --> 00:10:09,400 Speaker 1: your view? Because I feel like there's still an awful 175 00:10:09,440 --> 00:10:13,959 Speaker 1: lot of division there. There's clearly a huge amount of division. Um, 176 00:10:14,559 --> 00:10:17,440 Speaker 1: I'm really glad that Joe Biden is our new president. 177 00:10:17,520 --> 00:10:21,520 Speaker 1: I think he's he brings a moderation, a sense of 178 00:10:21,520 --> 00:10:27,400 Speaker 1: of uh of optimism, and a a willingness to talk 179 00:10:27,559 --> 00:10:30,280 Speaker 1: and to listen. And that's what we've got to do. 180 00:10:30,400 --> 00:10:34,040 Speaker 1: We've got to you know, we cannot let the the 181 00:10:34,080 --> 00:10:38,719 Speaker 1: extremes of either party take control or else were we 182 00:10:38,800 --> 00:10:42,439 Speaker 1: probably don't have a big bright future. So I hope 183 00:10:42,480 --> 00:10:47,480 Speaker 1: that that President Biden will will listen to the moderates 184 00:10:47,520 --> 00:10:51,040 Speaker 1: in his party, will not go extreme in terms of 185 00:10:51,120 --> 00:10:55,400 Speaker 1: a lot of things that were talked about during the campaign. Uh, 186 00:10:55,440 --> 00:10:59,200 Speaker 1: and will begin to to bring back. You know, one 187 00:10:59,200 --> 00:11:01,720 Speaker 1: of the things I'm in urged about is that Mitch 188 00:11:01,800 --> 00:11:06,160 Speaker 1: McConnell has has started talking about the mistakes that were 189 00:11:06,160 --> 00:11:09,040 Speaker 1: made last week. He's been very critical of President Trump 190 00:11:09,120 --> 00:11:11,840 Speaker 1: this week and as as recently as the last couple 191 00:11:11,920 --> 00:11:15,440 Speaker 1: of hours. Uh. And and that is a form of 192 00:11:15,480 --> 00:11:18,520 Speaker 1: honesty that I think is very positive. Yeah, honesty would 193 00:11:18,520 --> 00:11:21,200 Speaker 1: be a good thing in transparency on all of this. Michael, 194 00:11:21,240 --> 00:11:22,840 Speaker 1: thank you so much. And I'm sure you'll talk with 195 00:11:22,880 --> 00:11:25,760 Speaker 1: Howard and and I do hope everything works out okay 196 00:11:25,800 --> 00:11:28,760 Speaker 1: and that his wife's okay. Michael Ainslee, thank you so much. 197 00:11:28,840 --> 00:11:31,839 Speaker 1: Former chairman of Lehman, former chairman presidency of Southby's. And 198 00:11:32,120 --> 00:11:34,640 Speaker 1: he was joined by Howard Anderson over at Brown University