Mus­ings From Martinez

WWD Digital Daily - - Wwd -

On be­ing a se­rial board mem­ber: “I have been on 12 pub­lic com­pany boards and chair­man and lead di­rec­tor in half of them. Peo­ple say it's “a check and chair.' But the thing about board work is it gives you per­spec­tive on dif­fer­ent prob­lems and sit­u­a­tions. I find it in­tel­lec­tu­ally stim­u­lat­ing. I sub­scribe to the the­ory that ev­ery com­pany is in trou­ble and some of them know it and are do­ing some­thing about it. Oth­ers don't know it and should be do­ing some­thing about it. There is al­ways room for change and im­prove­ment and that is the role of the board.”

On his men­tors: “Arnold Aron­son was a fab­u­lous teacher. He con­veyed the ur­gency that is needed in this busi­ness. That it's rein­vented ev­ery sin­gle day. That you need to pay at­ten­tion to the small­est de­tails to drive the busi­ness ev­ery sin­gle day. That it's about iden­ti­fy­ing your com­pe­ti­tion, their strengths and weak­nesses and go­ing af­ter them. David Thomas at Exxon in­stilled in me a tremen­dous sense of cu­rios­ity about any­thing and ev­ery­thing. Go down a path, ex­plore it, use an­a­lyt­ics to un­der­stand, use data to un­der­stand, but be cu­ri­ous.”

On break­ing a com­mit­ment to be ceo of Bergner’s when Sears jumped in with the mer­chan­dis­ing group job:

“That was a very hard one. I hadn't signed any­thing. I wasn't legally bound but there was a moral is­sue there. Bergner's was bank­rupt. They had sched­uled a hear­ing in front of a judge in Mil­wau­kee to ap­prove my contract in a week or two and Sears came along. It was too big to ig­nore. I re­mem­ber call­ing Ber­trand Maus, who was the leader of the fam­ily that owned and con­trolled Bergner's. He called back from a pay phone at the air­port in Bos­ton. Poor guy. I had to tell him I wasn't com­ing. He sued me and Sears. Sears in­dem­ni­fied me and it was set­tled out of court. It was very un­pleas­ant. He never wanted to talk to me again.” Months later, they ran into each other at a con­fer­ence. “He couldn't have been more gra­cious. He kind of shook his head and said, ‘ Yeah that was an un­pleas­ant mo­ment. It hap­pens.'”

On his worst ca­reer mo­ment, when Sears il­le­gally hounded cus­tomers for un­paid bills de­spite their fil­ing bank­ruptcy and ex­tin­guish­ing debts.

“We were un­der crim­i­nal in­ves­ti­ga­tion by the Depart­ment of Jus­tice. That was ter­ri­ble be­cause it was a real breach of trust with our cus­tomers. We were the ‘sat­is­fac­tion guar­an­teed' peo­ple. You could al­ways count on Sears to do the right thing. But we were not do­ing the right thing. We were do­ing some­thing il­le­gal. We were mail­ing bills to peo­ple who didn't owe money. That is mail fraud...The worst mo­ment was sit­ting in Bos­ton with the U.S. At­tor­ney for that district and his deputy, four or five FBI guys and me and my at­tor­ney ar­gu­ing why we should not be in­dicted or con­victed on these charges be­cause of the col­lat­eral dam­age. I felt like I was fight­ing for the com­pany's life. They didn't say much. Their si­lence was in­tim­i­dat­ing. The de­fense was, ‘we made a mis­take and the minute it was brought to my at­ten­tion and the board's we took im­me­di­ate ac­tion to halt the prac­tice.' We of­fered to re­pay any con­sumer we had taken money from im­prop­erly, with in­ter­est. We were go­ing to make amends. We ar­gued the crim­i­nal ac­tion was an un­nec­es­sary pun­ish­ment be­cause it would af­fect the lives of peo­ple who worked for the com­pany who had no con­nec­tion what­so­ever to this prob­lem. We paid $550 mil­lion in fines, penal­ties and re­im­burse­ments to peo­ple. Twenty years ago that was a lot of money. We had been on a roll as a com­pany, but this re­ally knocked us side-wise. It took a cou­ple of years to get back on track.”

On Martha Ste­wart, af­ter her in­dict­ment for se­cu­ri­ties fraud and ob­struc­tion of jus­tice, and get­ting stripped of her ceo and chair­man roles at Martha Ste­wart Liv­ing Om­n­i­me­dia: “I was lead di­rec­tor. She took it very per­son­ally. The com­pany was hers. She was no longer a con­trol­ling share­holder, but it was her name and her brand. It was an­other founder sit­u­a­tion where her DNA was all over the com­pany, as it should have been and needed to be. It was very dif­fi­cult for her. As a board we said, ‘ This is a per­sonal mat­ter for you. Not a com­pany mat­ter.' We walled off what goes on in the com­pany from how­ever she wanted to han­dle her per­sonal prob­lem. We couldn't have the com­pany caught up in it. I don't think her le­gal trou­ble had any im­pact on the ma­tu­rity of the con­cepts she was ex­press­ing through her me­dia prop­er­ties. It's that same story. You get the idea, launch it, grow it. It moves into ma­tu­rity then it moves into de­cline, and she would prob­a­bly ar­gue [against] all this very provoca­tively, but the con­sumer moved on.”

“It's a peo­ple-in­ten­sive busi­ness. I rel­ish that, the dayto-day in­ti­mate con­tact with interesting sometimes chal­leng­ing but also fas­ci­nat­ing peo­ple. There's also the short cy­cle na­ture of the busi­ness. You know very quickly whether you are right or wrong. The feed­back loop is very short. I re­mem­ber that in the oil busi­ness, de­ci­sions were made and they didn't know if they were right or wrong for seven or eight years.” — DAVID MOIN

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