Read an Excerpt
Unleashing the Power of a Personal Philosophy
One morning in the year 2001, I woke up and thought to myself, “I’ve built a nice company. There are fifty-seven people in my employ . . . I’ve got a full client roster . . . MSCO Inc. is profitable.
Then I meandered downstairs to have coffee with my wife and said, “Honey, I’m going to fire everybody.”
She said, “What are you talking about?”
(I get that a lot.)
So I explained.
“We’ve got a team of good people. And good people can build a nice company . . . but they can’t build a great one. So I’m going to fire everybody and start recruiting only the really top performers in every business discipline. When we built this business, we viewed it as a work in progress, always tinkering with all gears and levers to make it better. And better. But one day, for who knows what reason, we stopped. Or maybe I should stay I stopped. But no more.”
Looking back, I’m not sure my wife believed I was serious. More like first-thoughts-in-the-morning wishful thinking. But I knew from the moment that I announced my war plan over a bowl of Shredded Wheat, I was armed and dangerous and ready to go.
Not that it was a whim. For a year or so I’d been thinking about it, ruminating over it, assessing the risks, dreaming of the benefits, and exploring the implications. I founded MSCO on the principle that the marketplace was lacking a new kind of entity—a hybrid between a marketing firm and strategic consultancy—and I pulled it all together anddeveloped a methodology and created a brand and built a team and secured clients and went through the trial and error, the donnybrook, the roller-coaster wonder of making it all work.
The roots of the business trace back to a warm June day right around my twenty-second birthday. As a hard-core, antiestablishment, I’ll-do-it-my-way 1960s kid, I had taken a zigzag route to career and the workplace. High school held little interest for me. (Living in the New York City borough of Queens, I could always—any time of year—pick up a girlfriend and drive out to Jones Beach. So who the hell wanted to sit in a dreary cell of a room in the dreary prison of a building called Bayside High School? Not Mark Stevens.) Next I meandered through a third-rate college—took off a semester to care for my family upon the death of my father (who left us $84, no hard assets, and Himalayan bills), and later on I took off another semester student-partying in Paris.
Funny story there. I went to Paris with the $300 I inherited when my grandmother died (I lost my dad and my beloved maternal grandparents all in eighteen months). Naturally, I’m living in pathetic dumps, but the wine is cheap and the girls are amazing and I spend my summer days as the only guy lying in the sun on a French houseboat (the Piscine Deligny) with two hundred women in Band-Aid bikinis. Life was good, and then it got better.
One of the girls I was dating—the wealthy daughter of an even wealthier Parisian businessman—was moving to Algeria for some crazy social cause and asked me to house-sit her splendiferous pied-à-terre overlooking superposh Place de Victor Hugo. So there I was with a pauper’s wallet and I’m bringing dates back from discos to this smasheroo place and they’re thinking, “Yeeow, I’ve got me a rich American.”
Anyway, I got sick and wound up in the American Hospital of Paris. Economics dictated that I return home, so I went straight from the rues de Paris to the streets of New York once again, finished school, and wound up taking a job at Texaco, working on a magazine they publish to teach their service-station guys (who were much more interested in reading Jugs than the rag I was working on) how to sell more tires, batteries, and accessories. Fuuuuuuun!
For the first time in my life, I took a close-up look at the American workplace—Fortune 100 style—and yikes, I didn’t like what I saw. My reaction was more like “Get me the hell out of here now!” All of these middle-aged folks are basically sleeping at their desks and then lining up for lunches the size of Thanksgiving Day feasts at 12:00 sharp. After that a nice nap with the office door closed and then out the door at 4:59.
Needless to say, I had plenty of time on my hands at Texaco (I could do a month’s worth of assigned tasks in a day), but instead of joining the chorus of deep snoring, I started daydreaming. About possibilities. For new businesses, of all things. And it struck the former sixties idealist (me) that there was a void in the media for a syndicated newspaper column that would provide advice to small-business owners. And to make a long story short, I contacted the Long Island newspaper Newsday with the idea and they said yes (“If you show us what you can do by writing twelve columns for free”) and I was off and running. In no time, I was self-employed, the head of a fledgling media business that kept expanding over the years, increasing revenues and expanding in scope until it evolved into MSCO—a global marketing firm advising senior managers of small, midsize, and very large companies on how to grow their businesses.
And just when the company ascended to a level of success I hadn’t dreamed of when I formed the nucleus twenty-five years before during the Texaco days—and there was every reason to heed the axiom “If ain’t broken, don’t fix it”—I decided to reengineer it from the ground up. To face the fact that MSCO was, is, and always will be a work in progress. I had built a successful business, but I feared that unless I declared war on myself, the enterprise I managed would succumb to mediocrity, and I wasn’t going to be part of that. At the time, MSCO was good at identifying precisely why companies were failing to grow at a substantial pace or were poorly managing explosive growth in a way that would enable them to build on their success. We had insight and know- how and an uncanny way of developing unique marketing methodologies that were fresh and could help specific companies deal with their unique issues in a way that would deliver measurable results expeditiously.
But there were weak points, too, and I saw them. It was like staring into the sun in the midst of a solar eclipse. Painful as it was, I kept looking and thinking and seeing:
•Team members who were at the limits of their intellectual powers and incapable of achieving continuous growth
•Lapses in execution that diminished the power of our collective wisdom
I had to act. I wanted my business, as good and profitable as it was, to be the kind of elegant organism that can move through life with the capacity to grow and evolve and expand and to see through to other dimensions as it finds new sources of knowledge and leverages them. I wanted it to be the kind of company that challenges assumptions and finds the business truths that lie behind them. And then I wanted it to pivot and challenge its own assumptions. To forever dazzle everyone and everything it came in contact with.
Over the course of a challenging but insightful and highly exhilarating two-year period, I took the business apart and put it back together again. The process was painful because I was close to my employees. I liked them. But I instinctively knew that as a manager I had to divorce emotion and friendship from the challenging mission of growing a business.
There was nothing easy about it. Emotions don’t simply disappear simply because you wish them away. That magic wand hasn’t been invented yet. No such thing as presto-chango, new business. Throughout the process, there were sleepless nights. Cold sweats. I would wake up at 2:00 a.m. wondering if I shouldn’t have left well enough alone. Was I playing with fire? Was I jeopardizing what I had worked so hard to build?
There is a line in the film Wall Street that goes something like this: “When a man stares into the abyss, he discovers what he is really made of.” On these lonely nights, in the midst of the radical change I was imposing on my company and on myself, I knew I was facing my abyss—and that I had to have the managerial resolve to stay the course. I was determined to emerge from the period of pain as a wiser person and a far-better businessman.
My goal was to make MSCO the best company of its kind in the world, but I couldn’t do it with the employees I had. I was pushing my people uphill. They were perfectly content to be merely good. But I wanted great. And anyway, managers shouldn’t push . . . they should lead. That’s a world of difference. Pushers are exhausted trying to make people do what they prefer to avoid. Leaders are exhilarated because they help people dream and turn those dreams into reality.
There’s an underlying principle at work here. One that drives to the essence of superior management:
Any enterprise that is equal to the sum of its parts will fail. Only when the components of people, finance, structure, pro-cess, morale, strategy, and execution are aligned so that each reinforces the other to create synergy will the organization achieve great things. Because it will be greater than the sum of its parts.
That’s what I was determined to achieve at MSCO. And at my clients’ businesses. Because the definition of an extraordinary manager is the ability to create and sustain a business unit (of any size or industry) that is greater than the sum of the parts.
Now let’s talk about you.
Everyone Manages Something
You’re managing your career, your business, and your personal life. And they’re all Big Deals.
The question is, do you manage any or all of them well? If you are like most of the members of the human race, the answer is “Not as well as I could . . . or should.” And this means you may be failing to reap the full potential—measured in financial, spiritual, and intellectual rewards—of your career, your business, and your life.
Why do I believe that so many people fail to manage their Big Deals with skill and finesse and aplomb? Because I see it over and over again in the course of my work with a widely diverse range of businesspeople at all levels of the management hierarchy. When you are privileged to do what I do, the insights are staggering. I am in boardrooms, helping explain strategy to the board members. I am at their homes, advising on plans to tackle challenges to their leadership. I am at breakout sessions, fielding questions from men and woman stuck on issues that have them flummoxed.
•In serving as a mentor, coach, confidante, and personal adviser, I’ve come to see that many managers exhibit similar weaknesses, finding it difficult to bring themselves to:
•Objectively assess their companies and their management processes. (Ask yourself: Do you really know if you are a good manager? A great one? Compared to whom? To what standard?)
•Conquer their self-doubt (in spite of bold exhibitions of bravado). Think of the times you hate to go into the office because you know quite well that what you have to tell your boss or your team members is weak and unconvincing, and yet you don’t know what else to say. So you put on a smile and you stride into the corner office and bam! The worst scenario occurs. Everyone can tell you that you lack the conviction of your words.
•Develop their own management personas (as opposed to choosing role models). I can’t tell you how many times I’ve heard GE managers invoke the name and mythology of Jack Welch. Great for Jack. But they’re not him. And you’re not the woman or man who started your company or the one who held your job before you.
•Make the rules (not follow them). You know how you often wish you could change a dozen dumb rules that have likely governed the company since day one. It’s time to put the worst culprits in your crosshairs. Like the Holy Grail at many companies that you can’t pay a twenty-four-year-old with one year at the company more than a similarly educated thirty-four-year-old with ten years of seniority. If the kid is a star, PAY her. Wall Street does it every day.
•Smash through the entrenched bureaucracies in their organizations. Everyone knows they are there. Donald Rumsfeld has flown fighter jets and run companies and served as secretary of defense twice. And each time he went to Washington, he had that Department of Defense bureaucracy to deal with. Some factions he left intact (because you rarely want to tear down the entire house), but other cliques of generals learned the hard way (for Rumsfeld and them, because these conflicts are always bloody) that the secretary was driving through their barricades.
•Risk being unpopular in order to become respected and inspirational. I remember when the senior management of Northwestern Mutual Life was under enormous pressure to create a universal-life product in the 1980s. The field force (read: the salespeople who bring in all of the money) was banging down the door for it. But the guys (and they were all guys) said no. Why? Because management knew the product was unsound at the time and, in fact, a time bomb that would implode financially by failing to meet projections somewhere down the road. As the best life-insurance company in the United States, NML could not afford that. So management took the heat from the field, and was about as unpopular as management can be and still remain in office. And then when universal life bloodied the competition, the same “unpopular” guys at NML were the most respected leaders in the industry.
At first blush, the managerial weaknesses cited above may look like a set of disparate issues. But do a flyby at forty thousand feet and you’ll see something that may not be visible from the ground: connect the dots, and all of these weaknesses lead to the absence of a managerial philosophy.
General Motors puts this in sharp perspective. Here is one of the largest corporations in the world with massive operations and dealerships in everyone’s backyard and cars in millions of garages—and what has GM stood for over the past three decades? Lousy cars, eroding market share, roller-coaster earnings, milquetoast management, a trillion rules, and a household name that has as much impact as a blank piece of paper. Through all of these miserable, pitiful, disgraceful years—made even worse by the fact that this company once owned the worldwide auto market—no one at the corporate headquarters has ever uttered the words “Our cars suck.” Why? Because all of the managerial weaknesses cited above were embedded in a single company: There were no cold-hard assessments of the company. No determination to tamper with the bureaucracy. No nerve to truly lead by striking out in new directions. No, it was just follow the bouncing ball or the trail of red ink until the neon sign would read game over. (There are countless GMs out there. They just don’t have [in]famous names.)
Which takes us back to this idea of a management philosophy. Don’t worry; I’m not going academic on you when I say that you must have one. By “philosophy,” I simply mean the framework for what you want to accomplish and how to achieve that. Without a philosophy, you are reactive, responding to each challenge and opportunity you face in random fashion. With a philosophy, you can be proactive, seeing what you face and how you should face it in the context of the strategy you’ve established.
All too often, managers believe the statement “I want to be highly successful” equates to a philosophy. Not even close. What do you stand for? How will you achieve success? Without a philosophy, there is no path to your goal. No way of dealing effectively with the myriad of issues that will rise up and challenge your intellect, integrity, courage, ambition, and vision.
Tom Watson Jr. needed a philosophy for two Big Deal issues: to prove to his father (founder of the modern IBM) that he was more than just the son of a great business builder, and to take IBM to an even higher level than Watson Sr. had elevated it to. His philosophy was to change the world through computerization and do it on such a grand scale that no competitor could challenge IBM for decades.
The inspiration came on a tour of Metropolitan Life’s New York headquarters. The proud prewar building at One Madison Avenue was home to thousands of Met paper shufflers and two massive floors of punch cards—by-products of the state of IBM data management in the 1960s. The new era of mainframe computers was starting to emerge at IBM, university labs, and defense installations—but they were crude, costly, and unreliable. It was at this virtual showdown that Met senior management advised IBM that the company needed to get to the vanguard of computerization: The American business community needed it, and if IBM didn’t do it, a competitor would. Floors crammed with stacks and stacks of punch cards wouldn’t cut it in an increasingly complex world. At that moment in time, Watson Jr. saw the current market realities (Met was IBM’s largest customer) and the future in sharp focus.
When Watson Jr. returned to the office, he had to convince his skeptical father (and his dad’s supportive board) that IBM had to pivot away from its astronomically profitable punch-card business and invest unprecedented sums for any company in the history of business to transition to the age of modern, electronic-driven computerization. Big companies don’t make radical changes in direction easily, especially when precisely what they are doing and how they are doing it is generating torrents of profit. In spite of all of the resistance he faced, in spite of the fact that he was locking horns with his own father (who happened to be a legend), Watson Jr. stuck to his philosophy and won approval to proceed with the most ambitious growth and investment plan in business history, remaking IBM in front of the world’s eyes and creating the first truly great company of the information age. The big bang would come with IBM’s introduction, on April 7, 1964, of the System 360: the first major family of computers using a common architecture and interchangeable parts. What Fortune magazine referred to as a $5 billion gamble would be one of the most remarkable successes in business history.
In the process, Tom Watson Jr.:
•Objectively assessed his company and its management style
•Conquered his self-doubt as he emerged from his father’s shadow
•Developed his own management persona
•Created a new set of rules
•Smashed through entrenched bureaucracies
•Risked being unpopular to be true to his vision/ philosophy
Result: He created the greatest company in the world.
Your managerial philosophy should not be complex. Consider mine.
•I will always have a business strategy. For example, I don’t wake up in the morning wondering what my company will be today or how I will face the issues and opportunities that come before me. They will all be factored into my strategic plan: to keep growing MSCO’s ability to see new dimensions and cultivate them for our clients and our business. This impacts my decisions on finance, recruitment, organization, compensation, process, and methodology. My thoughts and actions occur within a strategic/philosophical framework.
•I will not accept what I am told at face value. When an employee brags to me, “We are the best at search-engine optimization,” I ask who is second best. When he proffers a name, I say, “Bring him in to visit us. I want to see if he thinks we are better than him.”
•I will always seek the truth and base my advice on it. All of my advisers—including my wife and sons and employees and lawyers and investment bankers—know that I do not want surprises. If the news sucks, tell me as soon as you know it sucks, or, better yet, when you first see it coming. I prefer to deal with problems out on the horizon as opposed to facing them in my conference room.
•I will not accept second best. When I know something in my business life falls into that category, I leave the office, put on my L.L. Bean boots, head for the Ward Pound Ridge Reservation near my home in Bedford, New York, and hike alone. And think. And come to grips with the issues. And then I won’t sleep until I do my best to move up from the second-best slot.
II will not tolerate passive employees. People who fail to grow are told they are failing to grow; and if they don’t get the message, they are fired. If passive people fill the ranks at MSCO, how can I be true to my philosophy, with its emphasis on continuous intellectual growth and the ever-higher levels of performance that go with that?
•I will not be stopped from achieving my goals. When I decided to extend my business into China, I was told that the Chinese would not pay for services. Don’t waste your time, I was advised. My response: There is always a first time for everything, and people who are too lazy to challenge them propagate half the rules you hear in business. So I found the best China hand in the world to guide me, went into the belly of the beast, and opened a joint-venture business in Beijing.
•When I am thrown off course by unusual or unexpected circumstances, I will fight to regain my momentum. It is part of my philosophy that life changes, curveballs are thrown at you, and now and then your world goes topsy-turvy. You lose a big client, a senior employee leaves, a competitor tells the world you suck (as Madison Avenue does to me regularly because they are threatened by my message that big-budget/aesthetics-driven/Clio Award–seeking advertising enriches the agencies and leaves the advertisers wondering, “What the hell happened to our money?”). Unfortunate, sure. But I expect it—and my philosophy says to remember the course of action I have embarked upon and stay the course until that is no longer justified. Madison Avenue hates me because I speak out against traditional advertising. So what. I’m not going to try to make them my friends. My philosophy says I don’t need everyone to like me.
•I will not be driven by fear. This doesn’t mean that I don’t experience fear. I surely do. Fear of failure. Fear of financial risk. But I think about and plan how to protect my downside—to the extent that is possible—and then proceed with my strategy. I know things will go wrong. And I also know that the really successful people, the great managers, lick their wounds and get back on the horse the next day.
•I will keep learning and growing and connecting to the wiser and smarter me that I can and will become. Some people say they read three newspapers a day. I made a conscious decision to stop reading any. I recognized that I would learn more by talking to my team members and my clients, hiking with them, holding brainstorming sessions, challenging them, and asking them to challenge me. I ask them all—and I ask it all the time—“I know what we are seeing; the question is, what are we missing?”
•I will keep passion in my life. There is only one way to do that: jump in with both feet into everything you love. Forget the need to achieve so-called balance. What the hell is that? I love to sit in the sun and dream with my eyes closed. People tell me to beware of the damaging rays. No. It’s my passion, so I do it for eight hours or more on a lovely summer day. And I love to drink a bottle of wine every night and two on weekends. Wrong? Unhealthy? No, it’s my passion, and it feeds the lifeblood of my life.
I am focused on unleashing the power of a personal philosophy because it is the only way to create and sustain an exceptional enterprise. Note the word “sustain.” Creating an exceptional business unit is one thing—and no doubt a very important “one thing”—but the world is full of one-hit wonders that create something special and then watch it deteriorate before their eyes. People who never regain the momentum, the magic, the success of what they achieved at the outset. At a particular moment in time, they had the right product or the right pricing strategy or the right technology to soar from 0 to 100, but they didn’t have the philosophy for how to maintain their success and build on it when the inevitable challenges came careening at them from every direction.
Sometimes I meet them at this stage in their evolution. It’s then that I set out to discover what went wrong and why—and then work with them to put their business or careers (or both) back on track.
It was that way with Ashley. The daughter of a wealthy Chicago family, she was a classic Midwestern beauty with all-American charm, a winning personality, and a verve for life. A born salesperson, she sold Internet advertising during her summers at the University of Chicago and parlayed her smarts and contacts into a new business that soon thereafter completed an explosive IPO. She had figured out a way to generate high-direct-response rates from advertising dollars, and a long list of companies—frustrated with traditional means of promotion—lined up at her door.
Ashley was giddy with her near-instant success. Perfectly fine: that euphoria is one of the rewards of achievement. But then something happened on the way to a happy ending. The fairy tale turned into a near tragedy. After reaching its high point, her company gradually deteriorated (slowly at first and then, in classic fashion, with increasing velocity) to the point that it was in the red, barely breathing and a candidate for triage. My analysis revealed what went wrong—and why—and now I had to confront Ashley with the facts.
We met on a Sunday in her company’s conference room overlooking Lake Michigan. A soft morning sun streamed through a wall of glass. Ashley looked beautiful, her fiery red hair lying gracefully on a winter-white cashmere sweater, but she also had the look of a woman who was not sleeping well.
ms:When you look in the mirror, can you say you have a philosophy?
ashley:I’m not sure what you mean. Am I philosophical?
ms:Do you have a philosophy about how you run your business?
ashley:Of course I do. Why do you ask?
ms:Because you built this place out of nothing but sheer will and pluck and a great gift as a salesperson, but your once and former cash cow is now a broken business veering toward a premature death.
ashley:Oh I know, I know. Times change, Mark. When I started, there was hardly any competition. Today, I’ve got Google and Microsoft and Ogilvy in my face. What the hell does that have to do with “my philosophy”?
ms:Everything. Times change for every manager, every business. Competition always rises up to show its ugly face. Interest rates rise and fall. Oil prices skyrocket. The stock market tanks. New technologies come out of nowhere. Your best team members decide to move to Maine to write poetry.
Unless you have a philosophy, you cannot manage against all this change. You will fall victim to it. And that is what is happening to you. This business was built on salesmanship. You are an extraordinary salesperson. Everyone loves you. Loves your mind. Loves your passion. Loves the concept you brought to market. And that you quickly built on that by bringing hundreds of Ashleys in the fold, creating a company of salespeople. Of selling machines. Of young men and women clients loved to do business with and who could find opportunity and open doors and close deals. This company showed a broad cross section of American business how to get more bang for their advertising dollars, and they ate it up.
But when the inevitable challenges hit home, you got caught up in dealing with them as one-offs. You mistook salesmanship for philosophy, and no one can consistently sell themselves out of the myriad of challenges every manager faces. For that, you need a philosophy, and respectfully, Ashley, you don’t have one.
I could see that Ashley’s initial instinct to debate me had passed. Although irritated, she was ready to hear more.
ashley:I see your point. You’re right, I have become so caught up in dodging bullets that I don’t take time to think where the bullets are coming from and how—in a concerted manner—I can repel them and take the company forward again. That’s what you mean, Mark, right?
ashley:If you were in my shoes, what would you do?
Having studied the company’s evolution, I was ready.
ms:I would announce my philosophy in the form of a seven-point program designed to turn the business around:
1.The company will reestablish its preeminence in the industry through its founding focus on superior salesmanship.
2.It will regain its high-water mark in sales and revenues—and exceed it.
3.The CEO (you) will lead the drive.
4.You will create a killer offer to romance and reconnect with the customers you have lost and to attract those who have never done business with your company.
5.You will treat the company as a work in progress, getting better every day at sales and strategy and execution and productivity.
6.You will launch an R&D unit to identify the next great innovation in interactive advertising.
7.Nothing will stop you.
Look closely, and you will see that it is more than an action plan: It is a way of thinking and acting that propels business units toward perpetual growth. From that day on, Ashley thought about philosophy in a different way. It was no longer limited to Plato and Socrates. And she no longer viewed her role as CEO primarily in terms of what actions she would take today, tomorrow, and the next day and trust that somehow it would all converge into a plan that would grow the business. For the first time, she created a strategic road map based on what she wanted to achieve over the short and long terms and how she would react and respond to the world whenever the inevitable twists appeared along her road to her goals. She didn’t adopt my philosophy: She did something better—she created her own. And within months, the company began to respond to the fact that the leader was (1) reconnecting with its sales culture by holding monthly workshops and training sessions, (2) enhancing the commission system to provide enriched incentives for landing clients valued at over $1 million, (3) recruiting a senior executive to launch a take-no-prisoners R&D unit, and (4) requiring that her top managers develop and implement their own philosophies for managing their business units under the company’s strategic umbrella.
Ashley had come to see the true power of philosophy as a compass for everyone who manages anything. And wants to do it exceptionally well.
How do you know if you have a philosophy for managing? Well, let’s think about this together.
Let’s start with a question: Do you accept prevailing schools of thought in search of better ways of doing things? Case in point: Years ago, someone advised you that it is not a good idea to “rock the boat,” and you may have accepted that as gospel when, in fact, the exact opposite is true. Sometimes you may have to capsize the boat by:
•Tossing out the strategy you inherited
•Replacing members of your team even if (and it usually does) this causes all kinds of political reverberations
•Reengineering the way your business unit manufactures products or delivers services
No doubt, your level in the hierarchy determines the speed at which you can effect change. But the issue is whether you will accept the current state of things as inevitable and thus steer clear of rocking the boat or take on every case of dumb/stale/stupid/illogical thinking (when the time is right) and impose your own philosophy on the way the business is run, rather than allowing yourself and your people be a victim of it.
The annals of business history are cluttered with truths that strong and philosophical leaders challenged and defeated (and, in the process, rocked or capsized the boat):
•Women cannot hold managerial positions.
•Senior people must be more highly compensated than junior people.
•Employees must be guaranteed jobs for life.
•Retail stores need not be open on Sundays.
•It is always better to manufacture your products than to outsource them.
And on and on and on. Think about the way you manage your business unit: Do you challenge tradition in pursuit of greater truths?
Another question: Do you serve as a caretaker or as a leader? I am continuously surprised by how many people with leadership titles serve more as caretakers of their business units than drivers of its strategy/direction/growth.
From the Hardcover edition.