WEBVTT - Managing Through Adversity

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer from Bloomberg Radio. So,

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<v Speaker 1>as I mentioned, we kicked off our broadcast today, uh

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<v Speaker 1>saying we had a theme adversity. Adversity because of COVID, adversity,

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<v Speaker 1>because of division politically, economically, because of the pandemic. We

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<v Speaker 1>want to talk about that and how leaders have to

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<v Speaker 1>manage through it, especially when their existence kind of depends

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<v Speaker 1>on it. We're talking particularly about corporate leaders. So joining

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<v Speaker 1>us once again is Michael Ainslee. He's former chairman of

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<v Speaker 1>Lehman Brothers, former chairman presidency of Southby's. His memoir came

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<v Speaker 1>out just about a year ago. It's called The Nose

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<v Speaker 1>for Trouble and was written about the corporate crossroads and

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<v Speaker 1>challenges that he faced. Michael with us, Back with us.

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<v Speaker 1>He's on the phone in Florida. Also with us, Howard Anderson,

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<v Speaker 1>who founded the Yankee Group, which was sold to Reuters.

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<v Speaker 1>He's co founder of Battery Venture Capital. He's invested in

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<v Speaker 1>hundreds of high tech companies. He's professor and senior lecturer

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<v Speaker 1>at Brown University and teaches a class on managing through

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<v Speaker 1>adversity really timely. He is on the phone for Vermont

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<v Speaker 1>and the two of them, by the way, classmates at

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<v Speaker 1>Harvard Business School, delighted to have you both. I've got

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<v Speaker 1>to say, I already know I'm not gonna have enough

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<v Speaker 1>time with the two of you, but UM, looking forward

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<v Speaker 1>to it because, as I said, it very timely. So

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<v Speaker 1>let's get to it. Professor Anderson, let me start with

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<v Speaker 1>you your classes about managing through adversity, and safe to say,

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<v Speaker 1>we've got a lot of that going on in our

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<v Speaker 1>world right now. You look at it, though, is like

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<v Speaker 1>when a company is facing something that really threatens its

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<v Speaker 1>very existence. UM, tell us more about what you delve

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<v Speaker 1>into in your course and how you think about it

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<v Speaker 1>the context of today's world. Boy, do we have adversity now? Yeah,

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<v Speaker 1>the way I think about it, it's not just missing

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<v Speaker 1>a little quarterly numbers, or somebody cooking the books in

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<v Speaker 1>Japan this week, or a product that has to be recalled.

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<v Speaker 1>It's something so fundamental. Um. For example, nine eleven was

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<v Speaker 1>a terrible thing for all of this. One of the

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<v Speaker 1>companies that we had invested in was a company called Akamai,

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<v Speaker 1>And not only did the world stop, but the founder

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<v Speaker 1>was on one of the planes that augured in So

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<v Speaker 1>not only do they lose their business for a while,

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<v Speaker 1>and it was a startup that was worth several billion dollars.

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<v Speaker 1>The customers stopped buying FBI and CI I needed them

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<v Speaker 1>to continue what they're doing. At the same time, the

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<v Speaker 1>whole company was an enormous morning. That's adversity, right, It's

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<v Speaker 1>something on a whole other level. Well, Michael, come on

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<v Speaker 1>in on it, because right like you understand, you know

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<v Speaker 1>whether or not that company can go forward for so

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<v Speaker 1>many different reasons. When you look at what's going on

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<v Speaker 1>in kind of our environment right now politically, business wise,

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<v Speaker 1>in terms of the threats that the pandemic has created

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<v Speaker 1>for for some businesses, or the stresses and strained how

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<v Speaker 1>do you see it and how do you see adversity

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<v Speaker 1>kind of in today's environment. Thanks Carol, it's great to

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<v Speaker 1>be back with you. It seems like since I first

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<v Speaker 1>talked with you a year ago that we've been in

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<v Speaker 1>adversity on steroids ever since. Uh. I hope I'm not

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<v Speaker 1>due to that, but uh I think the uh the

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<v Speaker 1>key early, the key decision maker has to be honest

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<v Speaker 1>and direct and open very quickly, very early. A timely

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<v Speaker 1>response to a crisis is critical, and you look at that.

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<v Speaker 1>I think some of the responses in the political environment

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<v Speaker 1>right now of c e O s making decisions about

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<v Speaker 1>political support. Uh, these are things that have to be

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<v Speaker 1>made overnight, literally in an immediate time frame. Well that's

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<v Speaker 1>a really good thing because we've seen companies really step

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<v Speaker 1>up quickly. Although some would argue, you know, you know

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<v Speaker 1>what changed, and obviously we know what changed. It's what

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<v Speaker 1>happened that first week of January. But it is the timeframe, Um, Howard,

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<v Speaker 1>let me bring you back into this, is that the

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<v Speaker 1>time frame that people are making this decisions, especially when,

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<v Speaker 1>as you say, they're facing adversity. There's just they don't

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<v Speaker 1>have the time like they had before. Sometimes that's true, Carl,

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<v Speaker 1>but not always. Let's take a look at Kodak for

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<v Speaker 1>a moment. Kodak owned the film market, of the amateur

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<v Speaker 1>film market was theirs, and they kept hiring chemical engineers

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<v Speaker 1>because Kodak was at its essence, a chemical company until

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<v Speaker 1>these crazy things called semiconductors came in and then you

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<v Speaker 1>needed electrical and electronic engineers. It took five to eight years,

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<v Speaker 1>but they went from a nifty fifty company, as Wall

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<v Speaker 1>Street would describe them, to bankrupt. So that was five

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<v Speaker 1>or six years, but they never really caught the change,

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<v Speaker 1>and they kept doing the same thing again and again,

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<v Speaker 1>and the world was a different place. So who won

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<v Speaker 1>that game? Where you could make an argument? Apple? Did

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<v Speaker 1>Kodak come soon? Afterthought? Michael, I want to ask you,

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<v Speaker 1>or let me actually, Howard, let me start with you.

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<v Speaker 1>If you were teaching a class, or you are teaching

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<v Speaker 1>and you want to use what you do about managing

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<v Speaker 1>through adversity and apply it to let's start with social media,

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<v Speaker 1>what would you say? And I don't know whether their

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<v Speaker 1>existence is at risk, but I do feel like there's

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<v Speaker 1>some really big questions when it comes to social media

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<v Speaker 1>and their influence and power right now. You know, one

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<v Speaker 1>of the things is that every company hits advertity sooner

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<v Speaker 1>or later. Uh. In terms of some of those companies,

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<v Speaker 1>it's come a little bit later. But think about the

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<v Speaker 1>relationship between the government adversity that we talked about in

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<v Speaker 1>COVID one. We played with things that weren't true. We

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<v Speaker 1>had a charismatic leader and he went too fast and

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<v Speaker 1>not fast enough at the same time. So social media

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<v Speaker 1>makes everything go faster. It used to be if you

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<v Speaker 1>had a problem with the product, you told your neighbor

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<v Speaker 1>and maybe your what's its Now? You can write a

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<v Speaker 1>message on a social network and ten thousand people know

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<v Speaker 1>it the next morning, right, It's pretty powerful. Well, so, Michael,

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<v Speaker 1>how do you see in terms of social media and

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<v Speaker 1>kind of how they managed through some of the adversity

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<v Speaker 1>and special especially coming off of what happened that first

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<v Speaker 1>week of January and you know, the breaching of the

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<v Speaker 1>capital and the use of social media, whether it's used

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<v Speaker 1>by the president or others to really kind of band together. Well, Carol,

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<v Speaker 1>I think the heads of those companies made some very

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<v Speaker 1>smart and quick decisions to eliminate access to their platforms. Uh.

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<v Speaker 1>There was a real threat to the existence of our

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<v Speaker 1>democracy and and uh it would I can't imagine what

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<v Speaker 1>tomorrow would be like with this inauguration had they not

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<v Speaker 1>taken down many of those of individuals, not just the president,

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<v Speaker 1>but many others, many Q Andn's and others. Uh. So

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<v Speaker 1>I think they made quick and wise decisions. Do I

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<v Speaker 1>think they're in trouble with with terms of regulation or breakups? Yes,

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<v Speaker 1>I think there is there is an excessive amount of

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<v Speaker 1>power and control there and I think there's uh they

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<v Speaker 1>need to be thinking about how they how they navigate

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<v Speaker 1>that that process, because to me, it uh, it's it's

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<v Speaker 1>not only likely, it's probably in the public interest from

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<v Speaker 1>my point of view. Professor Anderson, how do you think

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<v Speaker 1>that those social media companies have been able to kind

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<v Speaker 1>of skirt adversity for so long? Because you know, they've

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<v Speaker 1>been around for a while now, Um, I mean not

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<v Speaker 1>as long as maybe a company like Kodak where they

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<v Speaker 1>had established themselves. But I do wonder how they've been

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<v Speaker 1>able to do it. Is it a case of regulators

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<v Speaker 1>not being able to kind of keep up with what

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<v Speaker 1>they're doing? Carol, It goes back to a T and T.

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<v Speaker 1>If you want to know, when a T and T

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<v Speaker 1>got started, people would sue them because someone said something

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<v Speaker 1>be ad on the phone and they went to the

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<v Speaker 1>regulators and they said, look, we're just a pipeline here.

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<v Speaker 1>We don't have any specific thing to say. No, no,

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<v Speaker 1>that's okay, we're live though. Go ahead, Um, Carol, I

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<v Speaker 1>got to help my wife right now. And the car

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<v Speaker 1>just went off the road. We have a lot of

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<v Speaker 1>snow up here. Oh no, please, of course, please please

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<v Speaker 1>please go take care of your wife. You're in good hands. No, no, no,

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<v Speaker 1>I hope I hope everything's okay. No, Oh, my gosh, Um,

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<v Speaker 1>I hope everything's okay. Real life adversity, you know, this

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<v Speaker 1>is kind of what the last I feel like twelve

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<v Speaker 1>months have been like. Unfortunately. So, Michael, Carol, something I've

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<v Speaker 1>been thinking about is how does President Biden come in

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<v Speaker 1>and and handle this COVID crisis. Uh. I have a

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<v Speaker 1>lot of family and friends in the state of North

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<v Speaker 1>Carolina and the governor, Governor Cooper there has been an

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<v Speaker 1>exemplary leader in this crisis. He has been on the

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<v Speaker 1>on the TV daily, He's had clear and very timely responses,

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<v Speaker 1>scientifically based responses, and the government and the state of

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<v Speaker 1>North Carolina has done a very good job of managing

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<v Speaker 1>through this crisis. He's a role model that I hope

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<v Speaker 1>Biden will look to well. And it's interesting too, because

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<v Speaker 1>I was going to ask you listen, Michael, you and

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<v Speaker 1>I have talked, and I know when Jason was here,

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<v Speaker 1>we would talk around, you know a lot of different

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<v Speaker 1>big macro issues, whether it was racism, division, you know,

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<v Speaker 1>deep gaps in our society. And I do think I

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<v Speaker 1>wonder how you know, we're talking about adversity, and I

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<v Speaker 1>feel like there is so much adversity right now in

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<v Speaker 1>our government, to the point where, you know, how many

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<v Speaker 1>conversations have we all had over the last couple of

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<v Speaker 1>weeks about, you know, is our democracy safe? Will it

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<v Speaker 1>make it? So? You know, we talked about a company

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<v Speaker 1>being at risk in terms of its existence, and I

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<v Speaker 1>do feel like that's what the kind of conversations we've having.

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<v Speaker 1>How do we manage through the adversity that we're seeing

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<v Speaker 1>on the political front? Ear of view? Can we in

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<v Speaker 1>your view? Because I feel like there's still an awful

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<v Speaker 1>lot of division there. There's clearly a huge amount of division. Um,

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<v Speaker 1>I'm really glad that Joe Biden is our new president.

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<v Speaker 1>I think he's he brings a moderation, a sense of

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<v Speaker 1>of uh of optimism, and a a willingness to talk

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<v Speaker 1>and to listen. And that's what we've got to do.

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<v Speaker 1>We've got to you know, we cannot let the the

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<v Speaker 1>extremes of either party take control or else were we

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<v Speaker 1>probably don't have a big bright future. So I hope

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<v Speaker 1>that that President Biden will will listen to the moderates

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<v Speaker 1>in his party, will not go extreme in terms of

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<v Speaker 1>a lot of things that were talked about during the campaign. Uh,

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<v Speaker 1>and will begin to to bring back. You know, one

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<v Speaker 1>of the things I'm in urged about is that Mitch

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<v Speaker 1>McConnell has has started talking about the mistakes that were

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<v Speaker 1>made last week. He's been very critical of President Trump

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<v Speaker 1>this week and as as recently as the last couple

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<v Speaker 1>of hours. Uh. And and that is a form of

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<v Speaker 1>honesty that I think is very positive. Yeah, honesty would

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<v Speaker 1>be a good thing in transparency on all of this. Michael,

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<v Speaker 1>thank you so much. And I'm sure you'll talk with

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<v Speaker 1>Howard and and I do hope everything works out okay

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<v Speaker 1>and that his wife's okay. Michael Ainslee, thank you so much.

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<v Speaker 1>Former chairman of Lehman, former chairman presidency of Southby's. And

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<v Speaker 1>he was joined by Howard Anderson over at Brown University