Speaker 1: This is Bloomberg Business Week with Carol Messer from Bloomberg Radio. So,
Speaker 1: as I mentioned, we kicked off our broadcast today, uh
Speaker 1: saying we had a theme adversity. Adversity because of COVID, adversity,
Speaker 1: because of division politically, economically, because of the pandemic. We
Speaker 1: want to talk about that and how leaders have to
Speaker 1: manage through it, especially when their existence kind of depends
Speaker 1: on it. We're talking particularly about corporate leaders. So joining
Speaker 1: us once again is Michael Ainslee. He's former chairman of
Speaker 1: Lehman Brothers, former chairman presidency of Southby's. His memoir came
Speaker 1: out just about a year ago. It's called The Nose
Speaker 1: for Trouble and was written about the corporate crossroads and
Speaker 1: challenges that he faced. Michael with us, Back with us.
Speaker 1: He's on the phone in Florida. Also with us, Howard Anderson,
Speaker 1: who founded the Yankee Group, which was sold to Reuters.
Speaker 1: He's co founder of Battery Venture Capital. He's invested in
Speaker 1: hundreds of high tech companies. He's professor and senior lecturer
Speaker 1: at Brown University and teaches a class on managing through
Speaker 1: adversity really timely. He is on the phone for Vermont
Speaker 1: and the two of them, by the way, classmates at
Speaker 1: Harvard Business School, delighted to have you both. I've got
Speaker 1: to say, I already know I'm not gonna have enough
Speaker 1: time with the two of you, but UM, looking forward
Speaker 1: to it because, as I said, it very timely. So
Speaker 1: let's get to it. Professor Anderson, let me start with
Speaker 1: you your classes about managing through adversity, and safe to say,
Speaker 1: we've got a lot of that going on in our
Speaker 1: world right now. You look at it, though, is like
Speaker 1: when a company is facing something that really threatens its
Speaker 1: very existence. UM, tell us more about what you delve
Speaker 1: into in your course and how you think about it
Speaker 1: the context of today's world. Boy, do we have adversity now? Yeah,
Speaker 1: the way I think about it, it's not just missing
Speaker 1: a little quarterly numbers, or somebody cooking the books in
Speaker 1: Japan this week, or a product that has to be recalled.
Speaker 1: It's something so fundamental. Um. For example, nine eleven was
Speaker 1: a terrible thing for all of this. One of the
Speaker 1: companies that we had invested in was a company called Akamai,
Speaker 1: And not only did the world stop, but the founder
Speaker 1: was on one of the planes that augured in So
Speaker 1: not only do they lose their business for a while,
Speaker 1: and it was a startup that was worth several billion dollars.
Speaker 1: The customers stopped buying FBI and CI I needed them
Speaker 1: to continue what they're doing. At the same time, the
Speaker 1: whole company was an enormous morning. That's adversity, right, It's
Speaker 1: something on a whole other level. Well, Michael, come on
Speaker 1: in on it, because right like you understand, you know
Speaker 1: whether or not that company can go forward for so
Speaker 1: many different reasons. When you look at what's going on
Speaker 1: in kind of our environment right now politically, business wise,
Speaker 1: in terms of the threats that the pandemic has created
Speaker 1: for for some businesses, or the stresses and strained how
Speaker 1: do you see it and how do you see adversity
Speaker 1: kind of in today's environment. Thanks Carol, it's great to
Speaker 1: be back with you. It seems like since I first
Speaker 1: talked with you a year ago that we've been in
Speaker 1: adversity on steroids ever since. Uh. I hope I'm not
Speaker 1: due to that, but uh I think the uh the
Speaker 1: key early, the key decision maker has to be honest
Speaker 1: and direct and open very quickly, very early. A timely
Speaker 1: response to a crisis is critical, and you look at that.
Speaker 1: I think some of the responses in the political environment
Speaker 1: right now of c e O s making decisions about
Speaker 1: political support. Uh, these are things that have to be
Speaker 1: made overnight, literally in an immediate time frame. Well that's
Speaker 1: a really good thing because we've seen companies really step
Speaker 1: up quickly. Although some would argue, you know, you know
Speaker 1: what changed, and obviously we know what changed. It's what
Speaker 1: happened that first week of January. But it is the timeframe, Um, Howard,
Speaker 1: let me bring you back into this, is that the
Speaker 1: time frame that people are making this decisions, especially when,
Speaker 1: as you say, they're facing adversity. There's just they don't
Speaker 1: have the time like they had before. Sometimes that's true, Carl,
Speaker 1: but not always. Let's take a look at Kodak for
Speaker 1: a moment. Kodak owned the film market, of the amateur
Speaker 1: film market was theirs, and they kept hiring chemical engineers
Speaker 1: because Kodak was at its essence, a chemical company until
Speaker 1: these crazy things called semiconductors came in and then you
Speaker 1: needed electrical and electronic engineers. It took five to eight years,
Speaker 1: but they went from a nifty fifty company, as Wall
Speaker 1: Street would describe them, to bankrupt. So that was five
Speaker 1: or six years, but they never really caught the change,
Speaker 1: and they kept doing the same thing again and again,
Speaker 1: and the world was a different place. So who won
Speaker 1: that game? Where you could make an argument? Apple? Did
Speaker 1: Kodak come soon? Afterthought? Michael, I want to ask you,
Speaker 1: or let me actually, Howard, let me start with you.
Speaker 1: If you were teaching a class, or you are teaching
Speaker 1: and you want to use what you do about managing
Speaker 1: through adversity and apply it to let's start with social media,
Speaker 1: what would you say? And I don't know whether their
Speaker 1: existence is at risk, but I do feel like there's
Speaker 1: some really big questions when it comes to social media
Speaker 1: and their influence and power right now. You know, one
Speaker 1: of the things is that every company hits advertity sooner
Speaker 1: or later. Uh. In terms of some of those companies,
Speaker 1: it's come a little bit later. But think about the
Speaker 1: relationship between the government adversity that we talked about in
Speaker 1: COVID one. We played with things that weren't true. We
Speaker 1: had a charismatic leader and he went too fast and
Speaker 1: not fast enough at the same time. So social media
Speaker 1: makes everything go faster. It used to be if you
Speaker 1: had a problem with the product, you told your neighbor
Speaker 1: and maybe your what's its Now? You can write a
Speaker 1: message on a social network and ten thousand people know
Speaker 1: it the next morning, right, It's pretty powerful. Well, so, Michael,
Speaker 1: how do you see in terms of social media and
Speaker 1: kind of how they managed through some of the adversity
Speaker 1: and special especially coming off of what happened that first
Speaker 1: week of January and you know, the breaching of the
Speaker 1: capital and the use of social media, whether it's used
Speaker 1: by the president or others to really kind of band together. Well, Carol,
Speaker 1: I think the heads of those companies made some very
Speaker 1: smart and quick decisions to eliminate access to their platforms. Uh.
Speaker 1: There was a real threat to the existence of our
Speaker 1: democracy and and uh it would I can't imagine what
Speaker 1: tomorrow would be like with this inauguration had they not
Speaker 1: taken down many of those of individuals, not just the president,
Speaker 1: but many others, many Q Andn's and others. Uh. So
Speaker 1: I think they made quick and wise decisions. Do I
Speaker 1: think they're in trouble with with terms of regulation or breakups? Yes,
Speaker 1: I think there is there is an excessive amount of
Speaker 1: power and control there and I think there's uh they
Speaker 1: need to be thinking about how they how they navigate
Speaker 1: that that process, because to me, it uh, it's it's
Speaker 1: not only likely, it's probably in the public interest from
Speaker 1: my point of view. Professor Anderson, how do you think
Speaker 1: that those social media companies have been able to kind
Speaker 1: of skirt adversity for so long? Because you know, they've
Speaker 1: been around for a while now, Um, I mean not
Speaker 1: as long as maybe a company like Kodak where they
Speaker 1: had established themselves. But I do wonder how they've been
Speaker 1: able to do it. Is it a case of regulators
Speaker 1: not being able to kind of keep up with what
Speaker 1: they're doing? Carol, It goes back to a T and T.
Speaker 1: If you want to know, when a T and T
Speaker 1: got started, people would sue them because someone said something
Speaker 1: be ad on the phone and they went to the
Speaker 1: regulators and they said, look, we're just a pipeline here.
Speaker 1: We don't have any specific thing to say. No, no,
Speaker 1: that's okay, we're live though. Go ahead, Um, Carol, I
Speaker 1: got to help my wife right now. And the car
Speaker 1: just went off the road. We have a lot of
Speaker 1: snow up here. Oh no, please, of course, please please
Speaker 1: please go take care of your wife. You're in good hands. No, no, no,
Speaker 1: I hope I hope everything's okay. No, Oh, my gosh, Um,
Speaker 1: I hope everything's okay. Real life adversity, you know, this
Speaker 1: is kind of what the last I feel like twelve
Speaker 1: months have been like. Unfortunately. So, Michael, Carol, something I've
Speaker 1: been thinking about is how does President Biden come in
Speaker 1: and and handle this COVID crisis. Uh. I have a
Speaker 1: lot of family and friends in the state of North
Speaker 1: Carolina and the governor, Governor Cooper there has been an
Speaker 1: exemplary leader in this crisis. He has been on the
Speaker 1: on the TV daily, He's had clear and very timely responses,
Speaker 1: scientifically based responses, and the government and the state of
Speaker 1: North Carolina has done a very good job of managing
Speaker 1: through this crisis. He's a role model that I hope
Speaker 1: Biden will look to well. And it's interesting too, because
Speaker 1: I was going to ask you listen, Michael, you and
Speaker 1: I have talked, and I know when Jason was here,
Speaker 1: we would talk around, you know a lot of different
Speaker 1: big macro issues, whether it was racism, division, you know,
Speaker 1: deep gaps in our society. And I do think I
Speaker 1: wonder how you know, we're talking about adversity, and I
Speaker 1: feel like there is so much adversity right now in
Speaker 1: our government, to the point where, you know, how many
Speaker 1: conversations have we all had over the last couple of
Speaker 1: weeks about, you know, is our democracy safe? Will it
Speaker 1: make it? So? You know, we talked about a company
Speaker 1: being at risk in terms of its existence, and I
Speaker 1: do feel like that's what the kind of conversations we've having.
Speaker 1: How do we manage through the adversity that we're seeing
Speaker 1: on the political front? Ear of view? Can we in
Speaker 1: your view? Because I feel like there's still an awful
Speaker 1: lot of division there. There's clearly a huge amount of division. Um,
Speaker 1: I'm really glad that Joe Biden is our new president.
Speaker 1: I think he's he brings a moderation, a sense of
Speaker 1: of uh of optimism, and a a willingness to talk
Speaker 1: and to listen. And that's what we've got to do.
Speaker 1: We've got to you know, we cannot let the the
Speaker 1: extremes of either party take control or else were we
Speaker 1: probably don't have a big bright future. So I hope
Speaker 1: that that President Biden will will listen to the moderates
Speaker 1: in his party, will not go extreme in terms of
Speaker 1: a lot of things that were talked about during the campaign. Uh,
Speaker 1: and will begin to to bring back. You know, one
Speaker 1: of the things I'm in urged about is that Mitch
Speaker 1: McConnell has has started talking about the mistakes that were
Speaker 1: made last week. He's been very critical of President Trump
Speaker 1: this week and as as recently as the last couple
Speaker 1: of hours. Uh. And and that is a form of
Speaker 1: honesty that I think is very positive. Yeah, honesty would
Speaker 1: be a good thing in transparency on all of this. Michael,
Speaker 1: thank you so much. And I'm sure you'll talk with
Speaker 1: Howard and and I do hope everything works out okay
Speaker 1: and that his wife's okay. Michael Ainslee, thank you so much.
Speaker 1: Former chairman of Lehman, former chairman presidency of Southby's. And
Speaker 1: he was joined by Howard Anderson over at Brown University