East Coast Study TripPosted: 13/04/2013 | Author: sten | Filed under: In English | Tags: book, economics, economy, gsb, leadership, management, sloan, stanford | Leave a comment »
After a quick 2-day trial hop to visit a few firms like Boeing and Starbucks in Seattle in November, the Sloan Class of 2013 spent a full week of our spring break on East Coast. This time it was less about the particular companies and public organisations we saw, but more about the people, the leaders we met and their learnings and ideas.
All of our hosts had a little theme tip on “resilience” included in their brief (inspired by the Resilience: Why Things Bounce Back book by Andrew Zolli), which some of them chose to focus on and others less so. But most importantly, everyone seemed to just be themselves – which, mind you, can mean something quite different in bluntly direct New York compared to politically polished Washington, D.C.
I certainly appreciated the trust of the open conversations and I am holding back on too detailed notes from the meetings. Yet, just listing the names would be boring too – so let me include just one or two ideas from each. Which, as I am doing this weeks after the actual trip and by heart, are implicitly the concepts or questions that stuck with me – even if the wordings are my interpretation, not direct quotes.
Quite amazing how the US social system has grown to a different direction than Europe as far as the state vs private responsibilities differ. AARP is an “interest group” (aka a non-profit association, what the un-initiated might just call a lobby interest) to represent 40 million members among the American retired people. And to make things more confusing, they have a billion-dollar profit making arm in this non-profit structure. Strategic ballet of the day: how do you play the “old VS young” tension in a way that today’s elderly feel connected & happy, but tomorrow’s elderly don’t grow up shrugging the brand away as something not for them?
Due to a whole set of macro trends (social, technological, etc), power dynamics in the world are shifting from large, dominant, “ruling” players (countries, parties, corporations, etc) to small and seemingly weaker players. This has a ton of interesting side effects like changing criteria for what “winning” means (“denying others from winning” as opposed to “making others lose”), what that changing meaning does to progress and innovation (if the seemingly weak and small can veto everything, how will bold decisions get made?) and the tension between vetoism and democracy (for example, just 2 countries could decide real fixes for global warming, but 198 would feel overridden and left out in the process).
What makes US Post special is just the sheer scale: How do you manage 500,000 employees? If congress is pointing at your “billions of dollars of free cash on bank accounts”, do they realise that it is enough to pay the bills for… 2 days? Is a decision to not deliver snail mail on Saturdays an economic or cultural, if not religious one? Does e-commerce package delivery really make up to the fact that people don’t write and companies don’t bill each other on paper any more? Due to the complexity of last mile, the UPS-s and Fedex-s are still top5 customers for national postal service…
There has been a lot of talk about Obama bringing home the Hispanic votes, but the seismic shift in US politics that is driven by demographic change runs much deeper than just “Republicans are anti-immigrants, thus Democrats will win”. There are signs of a growing demand for an economically liberal, socially moderate power regardless of ethnicity (free market loving government that respects gay rights, anyone? Mr Bloomberg?), but a quick birth of a 3rd party in US tradition is very unlikely. At the same time, there has been a massive polarisation towards bipartisan extremes in voter preferences (questions like “do you elect those from your party who stand firm or are able to compromise for results?”) in last few decades.
Kaiser is a culture and arts turnaround guru, who besides running the impressive Kennedy Center (own symphony, opera, etc + few thousand various events per year, with a planned pipeline outlook for 5+ years) as both the business executive & artistic leader is preaching a arts management model that puts the quality content front & center. Since 2008 he has travelled the world to help suffering arts organisations (Holland cut 40% of their state funding for culture in 1 year!) to break out of the vicious loop that in tough times you do less performances, which in turn leads to less public interest, which in turn worsens the funding further.
As another interesting US vs Europe tidbit, Paris Opera receives 120M EUR from state. Kennedy Center gets 120k USD of artistic support (+ some 30M USD of real estate maintenance support) from the government out of its 200M annual budget. The rest is 50/50 in a constant mode of fundraising + ticket sales. 80M USD from private sources. Every year. No wonder every orchestra performance has some presenting family name attached to it in this country…
More memorable than the discussions of different use cases between fiscal and monetary policy levers was just meeting a man whose job has been probably under more public scrutiny since 2008, but has been re-appointed by Presidents of both parties nevertheless. Imagine that when you make a statement, the media & markets don’t just analyse what you said, but also spend hours on the nuances of your word choice and pauses. And now imagine, that you are as stereotypic of a gentle professor type (also with Stanford GSB years behind you), intelligent, humble, human and introvert in the middle of this frenzy. Somewhat surreal, but the more awe-inspiring combination to witness.
Apparently a basketball-loving kid born into a first generation immigrant family in the outskirts of New York can still think and speak as one even after years as a Goldman Sachs partner & now running a 200+ year old company. This uncensored authenticity made me realise that compared to NYC, people on the West coast say “f*** this s***” far less than they actually mean it, which might not always be a good thing. On other news, apparently the memories of a flash crash can be quite different between the CEO of the exchange and an in-flesh market maker on the floor whose brains we got to pick too.
Steve Miller, Chairman, AIG
After graduating GSB with Class of 1968 (note: the only class that has a building named after them in our Knight Management Center campus), and since the Chrysler turnaround in the 80s, Steve has been living a life where extremely broken companies call him up and ask for help. Every time the call comes, he knows that things are much worse than he is told, and he has 24-48 hours to take a job if he wants and appear in the office. It was a quiet day, the most recent call had only been 4pm the day before and Steve was still in the Chairman seat of AIG where he was asked to come in in 2010 to fix a certain ~$180 billion hole left by the mortgage crisis. He was just beaming love for this lifestyle it in a way that no man could ever fake when speaking with a student group – my new model of how to (not!) retire happy one day.
His book is definitely high on the reading list: The Turnaround Kid: What I Learned Rescuing America’s Most Troubled Companies
Walking into an ad agency office, let alone in Manhattan brought back some great personal memories from the days of when DDB bought my first venture. After the “halls where Churchill & Roosevelt sat for the Arcadia conference” and nondescript board rooms of largest insurance companies of the world, it was refreshing just to walk into a place where the mellow lightning and plastic designer chairs follow the Pantone red precisely from the brand book. John’s talk revolved around two complex cases of brand reinvention for their clients: chaining BP into “beyond petroleum”, before — and through — the Gulf spill chaos, and creating “smarter planet” frameworks for IBM. In an era where ad agencies fight for talent with tech startups rather than their own kind, the intrigue and appeal of these old & huge company turnarounds could be counterintuitive, but I think I get it.
Susan Lyne, CEO, AOL Brand Group; Vice Chairman, Gilt Groupe
Again, the NYC authenticity school – I can list about 150 countries in the world where someone who has done stuff like exec roles at Disney or launching Lost in their career would never talk about their experiences, including getting fired so openly, and even with a sense of pride in learning.
I’ve shared notes about Andy’s adventures in building a kick-ass vertical e-commerce retail brand before, after his BBL at his alma mater (which soon will be also mine). Not much to add, besides that I added a pair of pink Bonobos to my wardrobe, to accompany an already perfectly fitting pair purple ones. And when I wore them first a week later, got a 2X priced offer to buy them off me in San Francisco, on the street. I would never have thought I could ever get more than indifferent about a clothing brand, but people who solve clothing shopping for men who hate shopping… will go far.
Herbert Allison, CEO of Fannie Mae; former Assistant Secretary of US Treasury for Financial Stability
Another fellow GSB alumni, who has another killer job of fixing a business recently that the world learned to hate seemingly beyond repair. His book of how to fix the global financial system (and not hope that anyone else will do it for you) is still in editing, so no link yet – but will keep an eye open. Nevertheless, he concluded our week with a perfectly simple though: as long as you are measuring your own success by something other people control (income, titles, praise…), you are screwed. You can never be satisfied, and that will be miserable.
Celebrate things that are solely under your own control to make happen: like helping someone else to be successful & look good. Every day.