Internet Interview with Business Tycoon and Magnate Mouli Cohen
SAN FRANCISCO, July 13, 2006 — Mouli Cohen was recently interviewed about how companies that appear to have the best leadership team in the world (the dream team) still fail miserably. What follows is a transcript of that broadcast, Internet interview.
Mouli, the idea of forming what you call a "dream team" usually means in most people's minds the formula for guaranteed success. And yet you claim that most dream teams fail and end in dysfunction. Can you explain?
Mouli: How can a Fortune 500 company run by a brilliant former McKinsey consultant paying ridiculous salaries to the top business school graduates go bankrupt? We're talking about Enron. How can the 2004 U.S. Olympic basketball team – which consisted entirely of NBA stars – lose miserably to Lithuania? The answer is simple … these are not teams. They are groups of people, perhaps superstars in their own rights. The bottom line is they don't work together.
If you take the smartest people and form a team of amazing talent they won't succeed?
Mouli: The basic theory of the dream team is all wrong. You cannot take – as you say – a group of stars and then sit back and watch them take over the world. It doesn't work that way. Take the Brazil World Cup team. They're all superstars and everyone thought that Brazil would take the cup. And yet what happened? The Italians prevailed, despite many setbacks in the past year including the broken leg of their strongest player. Why did Italy win? They had the right chemistry going for them. You should not try and choose only the best players. You have to choose the right players.
What's the best way then to recruit the right talent?
Mouli: You have to hire at the right levels and also build a culture of trust. You cannot just hire all-stars. If you have a bunch of senior managers in your company that could potentially all be CEOs you have a problem. Take for example the philosophy of the Detroit Pistons and the New England Patriots. When a new player joins one of these teams he is on probation for the first three months, after which the team votes to determine whether he can stay. The system works because much of the team's pay is based on winning.
You mentioned the importance of trust. Once you have the right people in place how do you go about building a culture of trust?
Mouli: Trust is the most fundamental element of a winning team. If people think their teammates are lying or being deceitful nothing good will come of it. Trust takes time and commitment to grow. Many companies try to speed the trust-building process. In the '80s there was a tendency to conduct team-building sessions, often in woodsy corporate off-sites, where people would fall backward off tables into the arms of co-workers as a way of learning trust.
The trust process cannot be rushed.
Trust is so fragile and so laboriously created that it may never extend very far in a top-level team. Building a really high-performing, trusting executive team at the highest level is unlikely given that everyone is considered a star. When trust does exist at the senior level it usually exists between two, sometimes three, people at the very top of the organization. The best leaders historically have worked in teams of two. They form a lasting bond and disseminate this trust over time from the top down.
Take Roberto Goizueta and Donald Keough at Coca-Cola in the '80s and '90s, or Tom Murphy and Dan Burke at Capital Cities/ABC from the '60s to the '90s, or Reuben Mark and Bill Shanahan at Colgate-Palmolive for two decades, or Warren Buffett and Charlie Munger at Berkshire Hathaway from the '60s to today. No one would have called those pairs dream teams back when they got together; at the time, most people had never heard of them. They all made it happen.
What are some examples of bad teams?
Mouli: There are so many. However, they typically do not involve the same person who was on a successful team. I'm talking about Michael Eisner, CEO of Disney and his partner COO Frank Wells. They were a super successful team until Frank died tragically in a helicopter crash. Eisner then pulled in Michael Ovitz and disaster set in. Ovitz barely lasted a year. In addition to making poor business decisions Ovitz spent lavishly on his Disney office. He spent nearly $2mm just to remodel his office.
Another example is Adelphia, the cable company founded by John Rigas. Even after it went public, Rigas and his sons operated it as if were still a family business – for example, paying for private expenses from corporate funds. They made poor decisions, and Adelphia went bankrupt in 2002.
What else can you share with us for building the right team and making that team successful?
Mouli: In any team you need to be able to put aside political politeness and get at the real issues. Every company has problems and troubling issues and you need to put them on the table immediately. If you let them fester it's a lost cause. Jack Welch, for example, was one of the great champions of putting the fish on the table as he liked to call it. When Welch took over as CEO of GE he moved the Corporate Executive Council meetings away from headquarters, forbade prepared presentations and formal attire, and lengthened the coffee breaks to encourage honest and casual conversation. People are imperfect and therefore any team is going to have its challenges. Start with trust, honest communication and then devote all your waking energy to helping your team members to synchronize.
Remember, there was only one dream team – formed by Larry Bird and Magic Johnson. It was a one-time event. Also remember that Bird and Magic had reputations as team players. For us in business we just need to put together a group of talented people with the right chemistry. If they work hard and are honest and are all focused on the same end-goal then that's more dream team than anyone can ask for.
About Mouli Cohen
In his career as an entrepreneur, Mouli has been one of the few to have success in biotechnology and high technology. His start-ups have generated well over $1B in shareholder value. In recognition of his ability to generate mega-investment in the U.S. economy and the creation of thousands of U.S. jobs, Mouli was awarded the first-ever "Millionaire Residency" with full citizenship status by President George H. Bush. For press inquiries and more information please visit http://www.moulicohen.com or contact the Press Agent at 415-902-2802.