A Match­less Man: Mal­colm Forbes.

Forbes Middle East - - CONTENTS - STEVE FORBES

My fa­ther, born 100 years ago last month, would have been right at home in this era of so­cial me­dia, a time when what we call “brand­ing” is more im­por­tant than ever.

The in­ter­net re­lent­lessly com­modi­tizes every­thing, and un­less you have a dis­tinct prod­uct or ser­vice, your com­pany will wither. MSF would have thrived!

Pop’s bal­loon­ing, mo­tor­cy­cling, boat­ing, col­lect­ing and en­ter­tain­ing, as well as his cre­at­ing and or­ches­trat­ing mem­o­rable events, all had the goal of mak­ing Forbes syn­ony­mous with en­tre­pre­neur­ial suc­cess and the good life. It worked. When he took over the com­pany af­ter his older brother Bruce’s un­timely death from cancer, Forbes was barely known out­side the U.S. busi­ness world. By the time Pop died in 1990, the Forbes name had achieved a pow­er­fully pos­i­tive im­age world­wide that com­pa­nies many times our size could only envy. De­spite all the up­heaval and deep anx­i­ety the in­ter­net has wrought on legacy print com­pa­nies like ours, the Forbes brand glob­ally is stronger than ever.

My fa­ther knew that the first task of suc­cess­ful brand­ing is to pro­duce a dis­tinct, first-rate prod­uct. That’s why in 1945, when he joined the com­pany his fa­ther had started in 1917, af­ter be­ing badly wounded while serv­ing as a ma­chine gun­ner dur­ing WWII, he im­me­di­ately fo­cused on up­grad­ing the mag­a­zine’s ed­i­to­rial con­tent. Barely sur­viv­ing the Depression, Forbes had limped along dur­ing the 1930s and the war years over­shad­owed by its com­peti­tors. Con­tent was mostly made up of free­lance ma­te­rial of un­even qual­ity. MSF be­gan the process of hir­ing a full-time, first-rate ed­i­to­rial staff, rightly be­liev­ing that this would dra­mat­i­cally im­prove the mag­a­zine.

One of MSF’s in­no­va­tions came in Jan­uary 1949, when Forbes in­tro­duced what would be­come its an­nual re­port card on in­dus­tries and com­pa­nies, thereby start­ing the buildup of its sta­tis­ti­cal mus­cle. Jan­uary had tra­di­tion­ally been the dead­est month of the year for ad­ver­tis­ing, but with this is­sue’s ad­vent it be­came one of the best.

Pop’s best hire was James Michaels, who be­came the pub­li­ca­tion’s long­time ed­i­tor and did more than any­one else to bring about Forbes’ ed­i­to­rial dom­i­nance and promi­nence. We de­vel­oped a well-earned rep­u­ta­tion for hard-hit­ting sto­ries that eval­u­ated com­pa­nies the way per­cep­tive crit­ics re­viewed stage plays. What made these pieces ring true was our grow­ing so­phis­ti­ca­tion in dig­ging into cor­po­rate bal­ance sheets in a way no other pub­li­ca­tion could. My fa­ther, who mi­cro­man­aged this com­pany, told me more than once that Michaels was a ge­nius, and that was why—un­like with other key peo­ple—Pop gave him a wide berth.

One of my fa­ther’s most suc­cess­ful in­no­va­tions af­ter the war was launch­ing “The Forbes In­vestor,” a weekly news­let­ter that rec­om­mended stocks and an­a­lyzed the pre­vi­ous week’s mar­ket news. His bold­est move here: pric­ing the news­let­ter at an out­landish $35 a

year, a huge amount in an econ­omy whose nom­i­nal GDP was about one eight­i­eth of to­day’s (Forbes sub­scrip­tions went for $4 a year or less), and with pro­duc­tion costs a small frac­tion of the mag­a­zine’s. The news­let­ter was an in­stant suc­cess and pro­vided the cap­i­tal to re­or­ga­nize the com­pany.

With a strength­en­ing prod­uct and com­pany bal­ance sheet, Mal­colm set out to make Forbes a com­pany in a class by it­self.

MSF did things no tra­di­tional CEO would do. He put to­gether an awe­some col­lec­tion of Fabergé eggs and used them in ads to ham­mer home the point that Forbes was to busi­ness what Peter Carl Fabergé was to ex­quis­ite jew­elry of un­par­al­leled beauty. The eggs were put on dis­play in the lobby of our old head­quar­ters, an awe-in­spir­ing re­minder that Forbes was dif­fer­ent from the usual com­mer­cial en­ter­prise. The eggs and other Fabergé pieces were also a great in­vest­ment. as Pop bought most of them be­fore oth­ers re­al­ized what true trea­sures they were. Ad­di­tion­ally, Pop col­lected Amer­i­can pres­i­den­tial and his­tor­i­cal let­ters, manuscript­s and mem­o­ra­bilia, toy boats and toy sol­diers, and ex­hib­ited them along with the Fabergé eggs and pieces in a mu­seum open to the pub­lic, which he built and con­nected to the lobby of the com­pany head­quar­ters. The dis­plays were done in a most un-mu­seum-like way that en­chanted hun­dreds of thou­sands of vis­i­tors, es­pe­cially chil­dren. Pop also ac­quired ex­otic prop­er­ties in the U.S. and around the world that added yet more glam­our to the Forbes brand.

To help garner ed­i­to­rial in­for­ma­tion and ad­ver­tis­ing dol­lars, Mal­colm rou­tinely gave elab­o­rate off-the-record lun­cheons for CEOs in the brown­stone house con­nected to our head­quar­ters. A Tiffany-made sil­ver cup, in­scribed with the in­di­vid­ual’s name and the lun­cheon’s date and em­bossed on the bot­tom with a Forbes stag’s head, would sub­se­quently be sent to each guest, along with the in­for­ma­tion that an­other such cup with the same in­scrip­tion would hang in the brown­stone’s wine cel­lar, en­ti­tling the guest to come by any­time to try the wine. It was a good Scot­tish of­fer: No one ever dropped by, be­cause, as my fa­ther liked to say, no one wanted to ap­pear to “be a lush.”

One of the most pow­er­ful weapons to woo ad­ver­tis­ers was to en­ter­tain in­flu­encers and ad­ver­tis­ing de­ci­sion mak­ers aboard The High­lander. Just about every week­day even­ing a group of 80 or so guests, hosted by our sales­peo­ple, would cruise around Man­hat­tan. Af­ter the event each guest would soon re­ceive a diploma-like cer­tifi­cate des­ig­nat­ing him or her as an Hon­orary Cap­tain of The High­lander. No com­peti­tor could match that. Every few years a new, big­ger and more eye-pop­ping ver­sion of the ves­sel was built. Pop pored over the de­signs and fur­nish­ings with the kind of in­tense care that Steve Jobs gave his Ap­ple de­vices. Amaz­ingly, the busi­ness gained by this use of The High­lander vastly ex­ceeded the ex­pense un­til the eco­nomic cri­sis of 2008, and then we even­tu­ally sold her.

Pop was al­ways look­ing to do mar­ket­ing in imag­i­na­tive ways. For in­stance, in the 1960s China’s mur­der­ous dic­ta­tor, Mao Ze­dong, is­sued count­less copies of a lit­tle red book called Say­ings of Chair­man Mao, which the Chi­nese peo­ple were ex­pected to pos­sess and wave at pub­lic ral­lies. In re­sponse my fa­ther is­sued The Say­ings of Chair­man Mal­colm, its cover col­ored in money green and gold and its pages filled with many of his pithy apho­risms. To give it a good-sell­ing send-off, he ded­i­cated it not to a per­son or two but to some 5,000 friends, fam­ily mem­bers, rel­a­tives, busi­ness as­so­ci­ates and in­flu­en­tial ad­ver­tis­ing de­ci­sion mak­ers. That’s right—a big chunk of the book was taken up in list­ing all of those names. Now, who wouldn’t keep—or, bet­ter yet, buy and dis­trib­ute—a book ded­i­cated to him- or her­self? Need­less to say, while his vol­ume never matched Mao’s forced dis­tri­bu­tion lev­els, it did rather well in the free mar­ket­place.

This play­ful cre­ativ­ity and mar­ket­ing was also dis­played in sev­eral land-de­vel­op­ment projects Forbes had at a mas­sive Colorado ranch we had pur­chased. These ven­tures re­quired putting in nu­mer­ous roads. What to call them? Again, the names of im­por­tant busi­ness­peo­ple, chil­dren, grand­chil­dren, in-laws, friends and com­pany col­leagues were cho­sen. Lucky de­signees re­ceived via the mail a sturdy and nicely de­signed street sign with their name on it, along with a let­ter an­nounc­ing this honor and a map of where "their" road was lo­cated.

Forbes’ spe­cial events also ac­quired a rep­u­ta­tion for spec­tac­u­lar ex­cite­ment and imag­i­na­tion. For ex­am­ple, Forbes cel­e­brated its 70th an­niver­sary at MSF’s New Jersey home. Guests still re­mem­ber the 70 bag­pipers march­ing down a hill, seem­ingly com­ing out of the mists of the nearby woods. Scores of he­li­copters had fer­ried in the cor­po­rate moguls. It’s no sur­prise that the largest chop­per be­longed to Don­ald Trump.

Such events didn’t meet with uni­ver­sal ap­pro­ba­tion. To some out­siders these af­fairs looked like waste­ful ex­trav­a­gance. But, in fact, they were the op­po­site: They helped cre­ate Forbes’ pow­er­ful global im­age. Even to­day many busi­ness­peo­ple and en­ter­tain­ers re­gard land­ing on the cover of Forbes as the ul­ti­mate proof of their achieve­ments. Talk about brand­ing!

I men­tioned at the be­gin­ning how my fa­ther would have taken to to­day’s new me­dia world like a duck to wa­ter. He would also be a per­fect fit in other ways. He was a very gen­er­ous and com­pas­sion­ate man, giv­ing away con­sid­er­able sums of money to many causes—in­clud­ing then-un­fash­ion­able ones, such as pris­oner-re­ha­bil­i­ta­tion ef­forts—and in­di­vid­u­als (in a great num­ber of cases, the re­cip­i­ent never knew who their bene­fac­tor was). But he would have no truck with bad busi­ness prac­tices. He be­lieved, as did his fa­ther, that the ul­ti­mate pur­pose of busi­ness is, in­deed, to pro­duce hap­pi­ness, not to pile up money.

MSF in front of the old Forbes build­ing

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