bio
Eric Starkman is President and founder of New York-based Starkman & Associates.
He worked more than 15 years as a reporter and editor at major newspapers in the U.S. and Canada, including the Wall Street Journal, The Toronto Star, The Montreal Gazette, The Detroit News, as well as American Banker. Prior to launching S&A, he oversaw the corporate communications practices at established agencies in the New York area, including Morgen-Walke Associates. He had worked earlier as a copywriter at W.B. Doner & Co., a Michigan-based advertising agency.
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January 23, 2008 7:30 am : Comments 000
M E M O
To: Roger Ailes
From: Eric Starkman
Re: Boosting “Happy Hour” Ratings
Gotta give you credit, Roger, you’re still batting a thousand. “Happy Hour” is another of your strokes of genius. The ratings might be dismal so far, but great works of art sometimes take time to catch on. It took “The Rocky Horror Picture Show,” a movie that parodied horror flicks, years before it became a cult classic.
Still, as the pressures of working for Mr. Murdoch must be draining at times, I thought you might appreciate some ideas on how the boost the ratings for “Happy Hour” for your next staff meeting.
10 WAYS FOR A HAPPIER “HAPPY HOUR”
- The Scores Lap Dance Economic Index
Let’s be honest here, “Happy Hour” is not exactly a show for puritans. One of the most blatant examples was a recent segment on Rick’s Cabaret, the publicly traded adult nightclub company, featuring some of the company’s “performers”. Why not take it to the next level and introduce the “Scores Lap Dance Economic Index?” Each Friday, Candi, Brandi, and Randi talk about how much they earned on lap dances. Lots of money? The economy must be doing ok. A whole lot of money? Sound the alarm – people are clearly trying to lap dance their troubles away!
- Coffee, Tea, or Fox at 35,000 Feet
This weekly segment features a report from a FBN anchor interviewing a corporate executive on his company’s airborne private jet. Think of the exclusive access! Hey, if it worked for Bartiromo…
- Wealth Transfer Strategies with Paris Hilton
It’s tough being rich and vacuous, particularly if your mean ol’ billionaire grandfather decides to give away your inheritance. Poor little rich girl Paris Hilton could share her money management tips with the equally downtrodden among us and teach us how to live the good life. Eat your heart out, Erin Burnett!
- #@%$#@ with Ken Langone
FBN doesn’t allow technical jargon. So if the network really wants to feature an authoritative market expert who clearly speaks plain English, who better than billionaire investor and philanthropist Ken “they-got-the-wrong-f*cking-guy” Langone? Hearing Mr. Langone wax on about the markets, the economy, and Treasury Secretary Hank Paulson would be the greatest color commentary since Howard Cosell joined Monday Night Football. C’mon, the Nielsen numbers would be soooo worth the FCC obscenity fines!
- Around the Water Cooler With Froelich and Kelly
This segment would be co-hosted by New York Post gossip scribe Paula Froelich (who actually once covered business) and Kate Kelly, the intrepid Wall Street Journal reporter who broke the oh-so-hard-hitting story on Bear Stearns chairman Jimmy Cayne and his alleged taste for the “wacky tabacky”. If there’s an unsubstantiated rumor or innuendo around the water cooler, Froelich and Kelly will be first to report it. Mr. Murdoch will love the cross-branding idea!
- Enhancing Workplace Productivity with Roger Clemens
Given the recent spate of layoff reports, everyone is looking for an edge in the workplace. In this segment, exclusively sponsored by Cook-Waite Lidocaine, New York Yankees pitching ace talks with business and sports leaders on how best to boost workplace performance.
- Corporate Dining with Takeru Kobayashi
Greed is good, but poor table manners are not. With so much business being conducted over a meal, today’s up-and-coming leaders need to know the rules of the table to ensure they don’t blow a big deal or job offer by simply eating with the wrong fork. Culinary dining legend Takeru Kobayashi explains the nuances of combining greed and proper etiquette, and models appropriate bib wear when feasting on $400 crab claws.
- Career Counseling with Julie Roehm
In this segment, fired Wal-Mart advertising executive Julie Roehm gives career tips on client entertainment, demonstrating appropriate affection for subordinates, and the perils of trying to shake down a Fortune 500 corporation.
- “Do as I Say” with Michael Brown
Remember Michael Brown, the whiz bang FEMA guy with the rolled up sleeves who oversaw the Hurricane Katrina response? Well, apparently he’s hired a publicist to promote him as an expert on crisis management. No doubt he would do a heck of a job talking about how companies in trouble can clean up their messes. Or appear to do so anyway.
- Hire Katie Couric
Cody and Rebecca are great, but they appeal to the under-35 crowd. “Happy Hour” could benefit from having an experienced, more “seasoned” journalist like Katie Couric inject some thought-provoking conversational pearls as “Dee-da-dee-da dee” to keep the older crowd’s attention. It’s just a hunch, but I’ll bet you can convince Mr. Moonves to let America’s sweetheart out of her contract.
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7:30 am : Comments 000
Just so we’re clear from the get-go, I admire and respect Roger Ailes. Regardless of what you think of his politics, when it comes to American media, he is an undisputed giant in an industry dominated by creative Lilliputians.
But I admit that I initially struggled to understand why Mr. Ailes gave the green light to “Happy Hour,” the late afternoon show on his newly launched Fox Business Network. In case you haven’t seen it – and given FBN’s paltry ratings it’s quite likely you haven’t – “Happy Hour” is a campy show hosted by Cody Willard and Rebecca Gomez, two individuals who, professional credentials aside, look like they belong on the set of an MTV reality show more than in the studio of a serious business news program. Perhaps that’s why “Happy Hour” is set in a bar — the “Bull and Bear” pub at the Waldorf-Astoria hotel to be exact.
With the hosts and guests perched on barstools as pints are pulled behind them, “Happy Hour” has the production values of a community access channel in Aurora, IL (”It’s Wayne’s World, Wayne’s World, party time, excellent!”). The banter is light and the guest lineup, umm, eclectic. You may get a CEO or an investment manager or two talking about taxes and assets, but you’re more likely to get models, actors, strippers, ice dancers, comedians, filmmakers, more models, actors and … oh, did I mention the strippers?
“Who on earth is going to watch this show?” I wondered aloud the first time I watched the show.
Well, for starters, my colleagues Jeff and Anthony. Every day at 5 p.m., they immediately tune out CNBC and flick on “Happy Hour.” These are two of the smartest people I’ve ever worked with, and they haven’t missed a segment since the show began. Another surprising viewer? An erudite editor friend of mine at a major business publication – we’re talking a true Renaissance man who studied ancient Greek just so he could read the original works of Plato and Homer – confessed over dinner last week that he’s a big fan of the show.
Ok, so “Happy Hour” seems to appeal to highly intelligent people. That answered the “who?”, now I just needed to understand the “why?” Jeff and Anthony helped me out on this one:
We can’t believe just how bad the show is,” said Jeff.
“It’s so bad, it’s actually brilliant,” added Anthony.
Now I get it.
Did you ever see Mel Brooks’ “The Producers?” It’s a story about a hapless producer and a nebbish accountant who concoct a scheme to make the worst Broadway play ever made. But their show, “Springtime for Hitler: A Gay Romp with Adolf and Eva at Berchtesgade,” is so outrageous it actually becomes a huge hit. “Happy Hour” is Mr. Ailes’ Springtime for Hitler.
Media pundits predicted that FBN would be a near-clone of Mr. Ailes’ well-established Fox News Network. In anticipation, CNBC jazzed up its sets and graphics, and billed itself “America’s Business Network,” mimicking the jingoistic tone of Fox News. But Mr. Ailes didn’t make his reputation by following conventional wisdom. He just quietly sat back and let CNBC zig while he cunningly was preparing to zag.
Instead of creating quality programming to go head-to-head with CNBC, he took a different approach to capture the loyalty of those stuck at their desks after the 5:00 whistle blows. He developed the least “business-y” business programming imaginable. “Happy Hour” is ESPN or E! for people who can’t get away with watching those channels in the office. Is it playing to more low-brow tastes? Maybe. But as H.L. Mencken once said, “no one has ever went broke underestimating the intelligence of the American public.”
And for the record, H.L. Mencken, like Roger Ailes, was a pretty smart guy.
Next: “Top Ten” ideas to boost “Happy Hour” ratings.
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January 10, 2008 12:12 pm : Comments 000
A story in today’s Wall Street Journal brought to mind a former client who appreciated the benefits of having me accompany him to appointments in Washington that his high-powered lobbyist had arranged for him. The meetings, typically with Congressional staffers and trade group leaders, never really accomplished a whole lot beyond the initial exchange of business cards. The client would give his spiel; the policy wonks would nod appreciatively, ask a few cursory questions, and then thank us for coming.
Although the desired policy impact our client wanted never materialized, his enthusiasm for them never waned. As an aside, I can’t help but note that his patience for a measurable result was not as abundant when it came to media relations. Any meeting with a reporter that failed to result in immediate favorable editorial coverage was a source of disappointment. Hmm… maybe we should go into the lobbying business. We could have set up those meetings – or even better, productive ones – at half the cost. But, alas, our collective pedigree sports no “unparalleled connections” or “enviable roster” of contacts on the Hill. And so it goes, and I digress…
Although we never trespassed or trampled on the turf of our client’s lobbyist, he never failed to do so on ours. He was always quick to suggest media ideas and the names of reporters we should contact. Most of the ideas and recommendations were pretty lame, but we respectfully kept our thoughts and snide comments to ourselves.
That lobbyist popped into my head as I read the Page One piece in today’s Wall Street Journal about foreign governments investing in Wall Street firms. A few paragraphs in, an unidentified lobbyist is quoted saying, “Our goal is to get a [page] B6 story in The Wall Street Journal and have no one mention it.”
I’m astounded that a Washington lobbyist could naively think that a significant investment by a foreign government in a major Wall Street firm would be covered on page B6 of The Wall Street Journal (and not just because the newspaper’s money and investing coverage is in the C-section).
Companies that rely on their lobbyists for media counsel clearly do so at their own peril.
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January 7, 2008 3:00 pm : Comments 005
The Kitty Genovese story has long represented one of the most tragic examples of social apathy. In 1964, Ms. Genovese was repeatedly stabbed on her way home late one night while some 38 neighbors who heard her screams failed to call the police. “Her case came to symbolize the corruption of modern city life, a life in which everyone is too frightened or too selfish to help another person, a life in which the value of humanitarianism has been forgotten,” Professor Helen Benedict of Columbia University once said.
Ms. Genovese’s avoidable tragedy came to mind last Saturday as I read the New York Post. The paper’s cover prominently featured a picture of a distraught woman being forcibly restrained by paramedics. The photo was extremely unsettling, as the woman – wholly unrecognizable to me – was clearly terrified, her raw emotional pain clearly captured.
I was stunned to read that the woman in question was Britney Spears. I may not be a fan of her music or some of her lifestyle choices, but that had no relevance Saturday morning. Staring at that haunting image, I was overwhelmed with compassion for the person caught in the photographer’s lens. It was not a picture of an award-winning performer who has sold millions of albums worldwide. It was simply that of a person… a daughter, a sister, a friend… a mother of two… and she was clearly in need of help.
It didn’t take long for the opportunistic vultures to feast on what they deemed the latest offering to a culture gone mad in its obsession with celebrity. The fact that the paparazzi had gotten that shot of her on the gurney makes that point abundantly clear. Dr. Phil’s reported press release, website postings (”DR. PHIL COMMENTS ON BRITNEY SPEARS – CLICK HERE!”), and morning talk show participation about his involvement with the Spears family and planned family intervention on his own show were an embarrassment to mental health professionals everywhere. The Times of London had a thoughtful piece earlier today on this repugnant but probably inevitable chain of events titled “Cashing in on the Britney Spears Breakdown.”
While celebrities may have to “pay” for their fame with their privacy, there is no moral justification for such intrusion when the person in question is clearly in the midst of some medical emergency, physical or mental. While I didn’t plan to return to blogging perched atop my high and mighty soapbox, I am simply aghast at the total dehumanization of Britney Spears in this weekend’s coverage. Speculation ran rampant on the cause of her crisis, her song titles were parodied and punned, timelines of her descent from her days at the top of the music world charted and published, unflattering photos of her endlessly produced and posted…
Enough already.
Like the vast majority of what’s been published since Thursday’s incident at Ms. Spears’ home, The Post’s coverage underscores the media’s failure to appreciate that mental illness is a serious disease afflicting tens of millions of Americans. All reporters and editors saw was the celebrity, the icon, the persona, the brand. Dismissive characterizations like “trainwreck” and “fallen pop princess” abounded. Even The New York Times took a cavalier attitude, as evidenced in a staffer’s blog title – “Gee. A Bizarre Britney Incident. Imagine That.” The fact that she is a person with all the emotions and imperfections that are part and parcel of our kind never seemed to enter the equation.
Admittedly, the Post is not known for its decorum and restraint, particularly in its coverage of celebrities, but even they must have the proverbial line in the sand that they will not cross. If some sleazy paparazzo came to them with an ill-gotten photo of a celebrity vomiting after completing a round of chemotherapy treatment, would they run it? Probably not. Or how about a cell phone image surreptitiously snapped in the gym changing room of the scarred, post-surgical breast of a famous breast-cancer survivor? I doubt it…
One of the enduring myths of the Kitty Genovese tragedy is that none of the witnesses who heard her screams did anything. In fact, one of her neighbors shouted, “Let that girl alone,” which prompted the attacker to temporarily leave the scene. Perhaps if more people had opened their windows and shouted, Ms. Genovese’s tale would have had a very different ending.
Forty years later, we see another 20-something woman in clear crisis who desperately needs perfect strangers to shun instinctual apathy and loudly shout out “Let that girl alone.” The strangers in question are, of course, all of us and the attacker in question is the media. After all, we are the ultimate consumer of the media’s cold, merciless trespasses into her privacy. It is done for our entertainment and folly, and in exchange for our dollars, both directly and indirectly.
Statistics show that depression is rampant in this country, leading to a dramatic rise in suicides. It is also generally believed to be a key contributor to other life threatening illnesses such as heart disease. Yet the disease retains a social stigma (reinforced by headlines referring to psychiatric wards as “loony bins”), so the majority of people who are inflicted with it understandably forgo any kind of treatment.
Regardless of the specifics behind Ms. Spears’ troubles, the fact that she is undergoing a very real personal crisis seems apparent to even the most-distant and otherwise disengaged observer such as myself. She is deserving of a modicum of compassion simply because she is a human being. At the risk of inadvertently coming off as an apologist (or worse, Chris Crocker!), enough already.
Let that girl alone.
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November 12, 2007 2:52 pm : Comments 004
I’ve just returned from Toronto, the city where I was born and raised. Although I haven’t lived there for more than 25 years, I go back often to visit my family. While TO still feels like home to me, this trip I noticed just how much things have changed in recent years.
Daily Newspaper Dropping F Bombs
Crazy as it may seem, Toronto has four daily newspapers – not bad for a city of only 2.48 million residents (five million if you include people living in the ‘burbs). As far as city dailies go, they are considerably better than most local U.S. newspapers when it comes to depth and breadth of reporting. Then again, I may not be the most impartial judge; I was once a reporter with The Toronto Star.
In my day, The Globe and Mail, which fashions itself as “Canada’s National Newspaper,” had a decidedly conservative bent. Picture an uptight, pipe-smoking, cardigan-attired, scotch-sipping WASP male sitting in a leather armchair in a wood-paneled study bedecked with a prominent photo of Her Majesty Queen Elizabeth II and you pretty much have an idea of the typical Globe reader, at least in my mind.
Well, either my mental image was way off base or The Globe certainly has dramatically expanded its readership. In a story I admit I don’t quite understand, the newspaper unabashedly drops the F bomb multiple times without the usual ellipsis that most mainstream newspapers use to denote curse words. Granted the word in question is part of the formal name of the organization being profiled (the, ahem, “Fuck Death Foundation”), but I’m pretty sure that the old geezer in the armchair who suffered a major cardiac event after seeing such common crudeness in his beloved paper would argue that’s just splitting hairs.
U.S. Currency No Longer Welcome
For at least the past two decades, stores throughout Toronto gladly accepted – and gave a significant premium – on U.S. currency. The Canadian dollar, or Loonie as it is called because of the bird engraved on the dollar coin, at one point was worth some 35 percent less than the greenback, making Toronto a comparatively inexpensive place for Americans to visit.
But the Loonie has soared like an eagle against the U.S. dollar in recent months, closing the gap that most Canadians and professional currency-watchers had long taken for granted. Last week during my trip, the Canadian currency reached a record $1.10 against its American counterpart. Canadian consumers are understandably euphoric about the shift in currency buying power, and are flocking in droves to take advantage of it. Border crossing waits are reportedly as long as five hours, an added bonus for Canadian travelers. You see, Canadians seemingly derive great pleasure from waiting in line; most do it with great regularity and equally great patience. You could say that after hockey, it’s the national pastime. (Yes, even more so than curling).
Anyway, back to my trip. Obviously, I read newspapers and knew before I went north that the dollar-to-dollar exchange rate was no longer what it used to be and that I would have to take a hit if I stuck with American currency. What I wasn’t prepared for, however, was just how many places would simply no longer accept the greenback. The Loonie has been fluctuating to such a degree that stores don’t know how to calculate prices for people who want to pay with American money.
Perhaps I’m mistaken, but I thought the cashier at the sandwich shop said “thanks, but no thanks” to my U.S. dollars with a particularly defiant and gleeful tone. After years of having their Loonie punishably discounted, I guess it’s understandable if Canadians want to strut a little, but as The Globe and Mail might say, just watch that f*@%ing karma.
Banks No Longer Keeping Banking Hours
Canada is a country not known for the diversity of its financial institutions. There are just five banks holding more than 90% of the country’s financial assets. Growing up, there was no real differentiation among them when it came to pricing, products, and services. Think of it this way: They were about as consumer-centric as your local cable company. Regardless of the name on the door, bank branches were uniformly open Monday through Thursday from 10 a.m. to 3 p.m. and open until 4:00 on Fridays. In hindsight, the only customer-friendly effort they made was to make sure there were never enough tellers to service the long queue of people looking to conduct transactions. Remember, Canadians like lining up.
But apparently that’s all changed. In a story that jolted me more than my Tim Hortons java, I read that banks are extending their lobby hours, with two banks announcing that select branches will even have Sunday hours. Talk about a paradigm shift!
I will bet you ten Loonies to one Greenback that the rest of the Canadian banks quickly follow suit. While other things about the business of banking may have evolved, I’m fairly certain the herd mentality they share is not one of them.
And Finally… Anne Murray is Not a Lesbian
I’ve never cared much for the music of Anne Murray, but I’ve long admired the singer for not getting caught up in her own press, as the saying goes. Stories about her always left the reader with the impression of a decent, down-to-earth, proud Canadian who never let the fame and fortune swell her head. No doubt it is because of this benign image and reputation that landed her a line in that South Park song “Blame Canada” a few years back. She is deservedly a national icon.
But apparently even Ms. Murray has some skeletons in her closet. She recently confided to a Globe and Mail reporter that, 40-something years ago, she had a two-and-a-half-year affair with a much older married man who also happened to have two kids. She later married – and subsequently divorced – the guy. In the story, she also denied rumors that she is a lesbian. Supposedly these rumors have been circulating for a while, not that I ever heard them. Admittedly, this is hardly scandalous stuff given the current antics of Paris Hilton, Britney Spears, and their ilk, but keep in mind that Anne Murray’s image is deeply, deeply entrenched as that of someone far more squeaky clean and, well, dull. I guess Canada’s songbird wasn’t so innocently sweet after all.
Still, as much as things appear to have changed in Toronto, it was comforting to see some things remain the same. Despite Toronto’s emergence as a world-class cosmopolitan center, liquor and wine can still only be bought at a government-controlled store. Early Saturday night I went to one to pick up a bottle of wine. Estimating a 20-minute wait at the checkout, I decided my sister would get her house warming gift on my next visit. Canadians in general may like waiting in lines, but I do not.
Hmmm… maybe Canada’s not the only thing that’s changed over the years.
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November 7, 2007 10:58 am : Comments 007
Enough already!
In the last two weeks or so, reporters at all the major business publications have prattled at various lengths about their Facebook experiences, including Matthew Rose at The Wall Street Journal, Daniel Lyons at Forbes, and Brent Schlender at Fortune. Even BusinessWeek’s Michelle Conlin, who is typically among the first to identify and write about emerging trends, has blogged about joining Facebook.
I hate to break it to you folks, but you are soooo very late to the party. Facebook has been around since 2004. Three years. That’s a pretty long time when it comes to cultural trends and online innovations. So why the heck are mainstream journalists just discovering it now?
Maybe, like me, they initially dismissed it as a thing for teens and the twenty-something crowd, as it was originally intended. Apparently times have changed; everyone seems to be on Facebook, including political candidates and investment advisors. Curious to see if I was the lone holdout, on Monday I googled “Why I haven’t joined Facebook” to see if there was a kindred spirit out there. The search engine actually tried to correct me, asking “Did you mean: why I have joined Facebook.” Interestingly, I didn’t get the same snarky response when I tried it this morning. (You would think the folks at Google would program their algorithms to say “Did you mean: why I should join Orkut, but I digress).
Frankly, I don’t “get” Facebook’s appeal, but I admit that that could just be me. I’m not exactly a cyberspace kind of guy. I’m quite adept at keeping in touch with my friends – I’ve been doing it offline for years. And I have worked out a pretty good system for meeting new people with similar interests. Ready? I chat to people I find at the places I like to go. I recently met this fascinating photographer named Koren on a hiking trip who, in turn, introduced me to a tech wizard named Brian whose company S&A has since hired. As for hearing from former high school classmates? Whoa – no thanks. I didn’t much like them in the first place.
There are other reasons I resist joining the growing throng of Facebookers. Call me old-fashioned, but I like the idea that my entire life is not completely google-able. It’s unsettling enough when employment candidates rattle off the most obscure minutia from our company’s history to show us that they did their homework. I can’t imagine it will be any more comfortable to have them chat casually about photos they saw of my best-forgotten New Year’s Eve party exploits! And I really don’t need the whole world to know that I once innocently went up to a familiar-looking woman at my local Starbucks and actually said to her “You know, I think I know you from somewhere.” (BTW, Brooke Shields is a very gracious woman).
Then there is Facebook’s Bill Gates connection. Even though Microsoft only owns a smidgen of the company, you know it’s just a matter of time before the site is plagued with all sorts of technology problems and outages. As far as I’m concerned the value of Facebook actually should have gone down simply because Microsoft bought into the company. I know that sounds a bit melodramatic, but Microsoft’s products speak for themselves. A more even-keeled Facebook-blogger cites other reasons why its future may not be so bright.
Still, I realize I’m in the minority here. Facebook reportedly is signing up more than four million “friends” a month, so it’s only a matter of time that holdouts like me will be forever banished as online pariahs or social outcasts. Given that even lepers were given their own colonies, perhaps Facebook CEO Mark Zuckerberg might consider creating a companion site for the unfortunate few who are lacking an online community of “friends.” I’ve even given it a name and created a beta site: Lonerbook.com. (back off Facebook lawyers – it’s just a parody!!)
The rules would be wonderfully simple. You can post your name, but nothing else. No photos, no lists of likes/dislikes, no lists of affiliations, no “poke” buttons to enable complete strangers to give you a cyber pinch on the butt. It’s just an opportunity to announce one’s overall social resistance or rejection.
I think the idea has promise. If nothing else, it at least would give some mainstream journalists some “news” to write about.
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November 6, 2007 8:41 am : Comments 001
Unlike most people who prefer to sleep in on the weekends, I’m an early riser – especially on Sundays. Rain or shine, my Sunday mornings have fallen into a comfortable, predictable routine. I wake up, turn on the coffee pot, open the front door, grab The New York Times, and then settle down on my favorite couch with a few pounds of newspaper and a freshly brewed cup of joe. But as they say, all good things must come to an end.
Over the last few months, I’ve opened my front door at the usual time to see nothing lying there but carpet. I called customer service to complain, but was told that the newspaper wasn’t technically late yet as Sunday delivery has a later delivery time guarantee to “…give our delivery people some extra time because of the size of the newspaper.”
Fair enough, but reading the newspaper is rarely the only thing on my Sunday “To Do” list. Even if I was so inclined, it would be impractical to expect that I could always rearrange my day to accommodate the Times’ delivery schedule. With no other choice, I cancelled my Sunday delivery. The Starbucks one block away sells the Times, so I’ll just go there now and buy it (and save some change in the process as there is an extra charge to have the newspaper delivered in New York).
Still, I suspect there are people who aren’t quite so loyal and simply don’t read the Times if they can’t get it when they want it. The Audit Bureau of Circulation yesterday reported that the Sunday circulation of The New York Times plummeted nearly eight percent in the past six months. Though a price hike was cited as partially to blame, I can’t help but wonder if late deliveries might be a contributing factor. After all, not everyone is going to get dressed and head down to Starbucks to buy it when they can read it in their pajamas online for free.
The Times has never been known for its city coverage, so maybe the folks in circulation don’t fully appreciate that New York really is a city that never sleeps. If the newspaper is looking to staunch its circulation erosion, perhaps it should consider delivering it a tad earlier than 8:30.
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November 5, 2007 12:00 pm : Comments 001
Bear Stearns CEO James Cayne has become yet another textbook example of why executives at the top of their game should never regard journalists as their friends. Just 18 months ago, The Wall Street Journal characterized Mr. Cayne as being “renowned at Bear for his hands-on approach.” Bear’s fortunes have changed since then, and so has the Journal’s reporting of Mr. Cayne’s leadership.
It turns out Mr. Cayne might not have been quite as “hands-on” as the Journal’s readers were initially led to believe. The paper reported last week that Mr. Cayne was hitting the links or playing bridge during much of the summer while two of the firm’s hedge funds were badly imploding. Regardless, Bear president Alan Schwartz insists that Mr. Cayne remains fully engaged.
There are some top business strategists who would argue that good leadership is all about delegating authority, even at times of crisis. Indeed, one of the savviest PR executives I know once chose to remain on vacation when his company became embroiled in a crisis. When I later asked him why he didn’t feel compelled to return to the office, he matter-of-factly replied, “I surround myself with good people and I knew they could handle it.”
For me, the Journal’s most startling disclosure in that story about Jimmy Cayne was not that he is a master at delegating or that he allegedly likes to smoke a little marijuana from time to time. Rather, it’s that talk-show host Maury Povich is one of Mr. Cayne’s golf partners. For those who are not particularly familiar with the underbelly of American culture, Mr. Povich is host of the daytime chat show called “Maury.” The show isn’t quite as exploitive as “The Jerry Springer Show,” but it’s pretty close. One of their favorite shticks is to have women drag current or former husbands, boyfriends, and one-night-stands on to the show to take paternity tests. In manners as dignified and sympathetic as the show itself, more than a few guys have pranced around the stage to hear Mr. Povich deliver his signature lines: “The results of the paternity test are in. With 99.7% accuracy, you are …NOT the father!”
That said, Mr. Cayne could teach Mr. Povich a thing or two about exploiting – err, I mean leveraging – a situation. According to “King of the Club“, a book by Charlie Gasparino about former NYSE head Dick Grasso, Mr. Cayne spotted an opportunity in the immediate aftermath of 9/11 that would be to his company’s competitive advantage and took it. Mr. Gasparino reports that when the operations of the NYSE and several brokerage firms were impaired after the collapse of the Twin Towers, Mr. Grasso wanted to hold a meeting of Wall Street’s top executives at the Exchange. Mr. Cayne, however, convinced Mr. Grasso to hold the meeting at Bear’s midtown headquarters.
As reported on page 157 of Mr. Gasparino’s book:
“It wasn’t long before it became clear why Cayne was being so accommodating. Bear Stearns’s competitors, all representatives of the top securities firms, began filing into the large conference room, many with stern looks on their faces as they realized they would have to hold a meeting not on neutral ground at the NYSE but on Cayne’s turf. They knew that Bear would get publicity as being one of the few Wall Street firms open for business following the attacks.”
Mr. Gasparino said that Mr. Cayne wanted to hold a follow-up meeting at Bear’s headquarters, but then SEC chairman Harvey Pitt nixed the idea.
“The official reason given for the change in venue was a series of bomb scares near Bear’s offices. But the real reason was much different. Pitt was blown away by all the Bear Stearns signs that appeared in the media room where the press conference was televised.”
They say things happen in threes. With two prominent Wall Street CEOs already shown the door in recent days, I can’t help but wonder if Bear’s board is pondering a similar fate for Mr. Cayne. If that turns out to be the case, maybe they should do it live on “Maury.” I can hear it now… “Mr. Cayne, the results of the Board are in. With 100% accuracy, you are … NOT the CEO!”
In the interest of full disclosure: S&A represented Mr. Grasso and I’m mentioned in the body of Mr. Gasparino’s book and in his acknowledgments.
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November 1, 2007 8:59 am : Comments 003
I recently attended a private business briefing where a management consultant from one of the major firms gave an extremely impressive and insightful presentation on global business trends. During the cocktail reception that followed, the speaker was asked by the co-head of a buyout firm if he did a lot of work with private equity firms. “I try not to,” the consultant said. “With due respect, most of the people in your business are real @#$holes.”
While it may be unfair to tar and feather the individuals of an entire industry in one broad stroke – trust me, I know about that first-hand being in the PR business – there’s more than a little truth to the old adage “nice guys finish last” when it comes to the leadership of companies owned by some private equity firms. Fortunately, there are exceptions. Indeed, the executive who questioned the management consultant is a former very senior executive at a Fortune 100 company whose résumé boasts an impressive litany of career accomplishments. He also happens to be one of the fairest and most decent business leaders I’ve ever met.
The cover story in last week’s issue of BusinessWeek touches on this topic. Emily Thornton’s compelling “Perform or Perish” article reports on the increased pressure LBO firms are placing on the executive management of acquired companies to generate better returns on faster timetables. To quote Ms. Thornton, “The toughest CEO jobs in America just got tougher.”
She cites work done by Steven Kaplan, a professor of finance and entrepreneurship at the University of Chicago’s Graduate School of Business, and Geoffrey H. Smart, head of a management assessment/recruiting firm, on common proficiencies and character traits found among 150 private equity CEOs:
Only the most tenacious executives can survive private equity’s rigors… Kaplan found that CEOs who bring “hard” qualities such as aggressiveness, persistence, insistence on high standards, and the ability to hold people accountable are significantly more likely to succeed. Those who offer primarily “soft” skills that are often effective at public companies – like listening, developing talent, being open to criticism, and treating people with respect – are unlikely to work out. Says Smart: “Successful private equity CEOs are cheetahs.”
Ms. Thornton laces her story with examples of the seeming callousness and unmitigated ruthlessness it takes to be a CEO these days of a portfolio company of some buyout firms. Jeff Clarke, CEO of Travelport, a travel services company owned by Blackstone Group and Technology Crossover Ventures, is one of them.
Let’s just say Mr. Clarke clearly isn’t vying to make anyone’s list of “Best Bosses to Work For.” In response to rumors that Travelport was thinking of taking its Orbitz unit public, Mr. Clarke told his staff that “private equity ownership generally is not a long-term proposition. The day will come when our [owners] will decide to take Travelport public, sell off individual businesses, spin off groups of businesses, or pursue some other exit strategy.”
Yes, there are some advantages to providing such a blunt assessment of the company’s future from a “communicating organizational change” perspective. But there is also something to be said for not destroying employee morale in the process. And what about Travelport’s customers? I’d welcome hearing the inside story as to why WestJet Airlines opted to take a $30 million writedown rather than continue developing a computer reservation system in partnership with Travelport.
Ms. Thornton also shares tales of Gerald Storch, who runs Toys ‘R’ Us for Kohlberg Kravis Roberts, Bain Capital, and Vornado Realty Trust. Seeking “to administer shock treatment” and eradicate “victim thinking” among employees who seemed to have lost their drive, Mr. Storch fired virtually all the senior managers he inherited, intentionally replacing them with outsiders. Whether out of fear or forced corporate rah-rahism, rank-and-file employees are said to now walk around with badges pledging that they’re “Playing to Win”.
While there’s no debating Mr. Storch’s quoted comment that poor performers will become store managers’ biggest problems if they don’t cut them loose, the badge-wearing idea brings to mind that “Seinfeld” episode where Kramer was hunted down for not wearing an AIDS ribbon while participating in an AIDS awareness walk. Will otherwise enthusiastic, productive employees get demerits if they refuse to wear the badge? Scott Adams, please take note!
Another CEO cited is Mary Petrovich of AxleTech, who demonstrates that gender plays no part when it comes to a list of America’s most demanding and punishing CEO taskmasters. Once in office, her first move was to slash union wages and benefits by 33% in their new contract. Managers in a quarterly review of projects in the works were expected to report that they are exceeding expectations, not just meeting them. Those who reported less than 100% success were given one minute to explain their challenge and one additional minute to say how they would overcome it. Ms. Petrovich later told Ms. Thornton they would be given just one quarter to get the project back on track.
To be fair, Messrs. Clarke and Storch and Ms. Petrovich are fighting for their own survival. An Ernst & Young study cited by BusinessWeek found that buyout firms replaced CEOs or CFOs at 17 of the 23 companies they sold or took public last year. The danger, however, is not learning from the misguided “profit-at-any-price” philosophy of executives that came before them. Remember “Chainsaw Al” Dunlap? Enron’s Jeffrey Skilling? They had similar damn-the-torpedoes approaches that came back to sink their own battleships in the end. The ever-escalating pressure to do things faster, cheaper, and with better returns all too often becomes unbearable and corners start getting cut. It’s little wonder that many CEOs are secretly grappling with suicidal depression, as Philip Burguieres has warned.
One of the major benefits of taking once-public companies private was supposedly to free top managers to focus on long-term performance rather than quarterly earnings. There are private equity firms that are adhering to that principle and creating value for their shareholders and their workers as well. But these firms typically are smaller than the Blackstones of the world and generally prefer to keep a lower profile. Instead, the public perception of private equity is driven by those who embody the values and ideals of Gordon Gecko and delight in flaunting their stratospheric wealth.
Sadly, I suspect Messrs. Clarke and Storch and Ms. Petrovich are quite proud of their BusinessWeek portrayals. I know what at least one management consultant will think of them if he reads the story.
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October 29, 2007 1:59 pm : Comments 000
Cable cars (and Rice-a-Roni) aside, two of the first things that come to mind when most people think about San Francisco are the stunning vistas and, of course, the Golden Gate Bridge. I was delighted to read yesterday that the board controlling the engineering landmark has unanimously rejected proposals to sell corporate sponsorships to help finance the bridge’s operating budget, which is pretty cash-starved these days. While corporate dollars may have brought some financial relief, the posting of sponsors’ ads and logos surely would have blighted the “International Orange” bridge, even if they were limited to the property adjacent to the span. I applaud the board for getting their priorities straight.
According to what I’ve read, a non-profit called “San Francisco Beautiful” was instrumental in getting the proposals defeated. While I commend them for their efforts to preserve the San Francisco landscape that I know and love, I cannot help but note the irony of San Francisco Beautiful having sold corporate sponsorships for its “2007 Beautification Awards Dinner” earlier in the month. Indeed, the logos of Citigroup and Parkmerced, a huge residential apartment complex that was once part of Leona Helmsley’s empire, grace San Francisco Beautiful’s home page.
While it is tempting to say something off-the-cuff and snarky about them pooh-poohing corporate sponsorships in one corner while gladly taking them in another, I’m more inclined to admire them for not kowtowing to the presumed preferences of their benefactors on the Bridge sponsorship issue. San Francisco Beautiful clearly put their constituents’ preferences first, and has earned my respect and admiration for it.
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