Murphy’s Law Meets Burke’s Law
In keeping with our Dynamic Duos cover, I wanted to relate an anecdote that Cab Woodward, Hal Geneen and Rand Araskog’s right-hand man at the famed ITT, once told me: “The best CEO in business is ABC Broadcasting’s Tom Murphy and Dan Burke.” The singular verb was intentional. Murph, as his friends call him, would have added: “Although our form is corporate, our attitude is partnership,” if his close friend, Warren Buffett, had not said it first. Incidentally, Buffett was offered a seat on Tom’s board back in the Capital Cities days, but he declined. Today, Murphy is a Berkshire Hathaway director, which is Buffett-style poetic justice.
Murphy and his longtime partner, alter ego, sounding board, and co-CEO, Burke, singularly built Cap Cities into the dominant and most profitable broadcaster in America, prior to its merging with ABC and later with Michael Eisner’s Disney. Just to add to business lore, that deal was consummated at Allen & Co’s. Sun Valley media fest.
Tom’s philosophy was based on three well-defined and vigorously applied tenets: fiscal responsibility, lean decentralized management, and a corporate conscience. Burke, the president of Cap Cities/ABC, was also big on morale. He is known for saying: “I’ve never met anyone who tired of compliments.”
Free may not be the most profitable way to do business, but it may soon be the only way.
Free-for-All
Chris Anderson just ruined our day. If you are familiar with his recent book, Free: The Future of a Radical Price, you may think I am referring to anyone who owns, runs, or works for a media company. I don’t mean that. I mean all of us. Media is just the first to get whacked. And Google is just the first salvo. Free says what we already know: We like certain things, we like them more when they are cheap, and we like them most when they are free. We will even spend precious time finding free.
What does this mean for boards? If you are involved in the digital world, it means outright giving things away and looking for new ways to transact or get paid. The problem is that in many cases it is not clear that these new ways even exist yet. If you are selling something tangible, you may get paid for it, but the shipping, service, or global logistics will soon be free. Whither the margins in that scenario?
Fear and Loathing on the Shuttle (Our Fear, Their Loathing)
Recently, a woman dressed for casual success—crushed velour jacket, Louis Vuitton bag slung artfully over her shoulder—waltzed into the first-class line of the TSA checkpoint. All of the business mortals on the coach line were shuttling to New York or Washington. As I looked around, I saw a noticeable expression on the faces of the bystanders watching while she undid her handbag and removed three trays on which to place her baubles and valuables: Loathing. Zhou Enlai was supposed to have informed Henry Kissinger, when asked about the impact of the French Revolution, “It is too early too tell.” It is not too early to tell the impact of the Crisis of 2008.
Then…on a recent afternoon I returned home on a flight from New York and noticed a Massachusetts Congressman sitting in the next row. It was one of those unbearably humid August days. He was working his way through a sandwich he had bought at the airport concession and was steeped in paperwork. Congressmen spend their time on the TSA line just as we do. They suffer the outrages and the humblings of modern air travel. Their flights get cancelled. Only they have to fly to their home districts most weekends. So should we wonder what they felt when the automotive executives came hat in hand via Air-GM, Ford, and Chrysler to ask the Honorable Henry Waxman for a government bailout? They were probably thinking about the soggy sandwiches and irritable flight attendants in their own immediate future.