We were the latest company to find ourselves in the crosshairs of the Feds, the media, and our customers. The details of what happened don’t matter. All that counts is it was a “perfect storm” of bad news. Almost overnight, we’d become the company everyone loves to hate.
It was bad enough I was supposed to appear before a Congressional committee the day after tomorrow. But some comments I made earlier today were being played over and over on the internet and on every news program.
Here’s what happened. As I walked out the door of my gym in my sweats, some reporter ran up and stood right in front of me. Someone had tipped her off I was there, and she was trying to get a scoop.
She shoved a microphone in my face. “Being hauled in front of a Congressional committee must be a new low point for you as one of the country’s most prominent CEOs. How do you plan to respond to these charges? What’s your defense going to be?”
OK, I was caught off guard and didn’t stop to think.… I also didn’t take the time to notice she’d brought a cameraman, who was shooting our exchange.
“Defense? What do you mean?” I virtually spat out my words. “Look smart ass,” I continued, in my most arrogant voice, “everybody knows that business is about making money. We didn’t break any laws! We didn’t lie, cheat, or steal! We didn’t do anything wrong!” Then I turned my back to her, got into the back seat of my Mercedes limo, slammed the door, and told my driver to take off.
It wasn’t my proudest moment. I lost my cool. And 5 minutes later, the video was on CNN, MSNBC, you name it. The video went viral immediately. There I am in sweaty workout gear insulting a young, professionally attired reporter. We’re toe to toe, and I’m 6 inches taller than she is, yelling down at her. I look like a jerk—over and over again for millions of people to see.
But she did have it all wrong. I’m not being “hauled in front” of the committee; I’m testifying voluntarily. There are no “charges”; I’m going to answer questions. And I don’t need a “defense” because I haven’t done anything wrong.
At least I recognized immediately I’d messed up and that it was going to be a public relations disaster. As soon as I got into my limo, I called Phyllis, our head of PR; explained the situation; and told her she needed to find me a spin doctor.… Fast! … I needed to talk to someone who could keep me from saying something stupid in Washington.
So you can’t blame me for thinking that the guy in the charcoal Armani suit waiting for me in front of company headquarters was the consultant Phyllis had contacted.… OK, I should have been amazed that even she could have someone there only 10 minutes after we talked. But I’ve gotten used to her doing the impossible.… As I got out of the car, he stuck out his hand and said, “I gather you could use my help.” Who else would he be?
I returned a couple of calls as we made our way through security and up to the top floor. As we headed toward my office, I turned toward my executive assistant. “Marie, I’m going to be in conference and don’t want to be disturbed.”
“There’s coffee, tea, and bottled water over there.” I pointed to the antique mahogany sideboard on the other side of the room. “Let’s get down to business.”
I sat down behind my desk, rearranging some files to clear some space. “I have to say how impressed I am you got here so quickly. I assume you saw that disastrous interview. But my real concern is the Congressional hearing. As you know, we’re getting hammered in the press, and now there’s talk of investigations. I want to find a way to get the heat turned down. We’re having trouble getting our message heard. That’s why I need your help.”
I leaned back in my chair and looked straight at him. “I really screwed up in that interview. I was completely wrong. I should have noticed the camera. And I admit it was stupid to call the reporter ‘smart ass.’ I’m not going to bullshit you with some silly excuse. And you don’t need to think I have a precious ego that needs protecting.
“I know it’s no excuse, but I felt bushwhacked. I didn’t expect to be interviewed right after a workout. But I honestly meant what I told her. Business is about making money. We didn’t break any laws, lie, cheat, or steal. We didn’t do anything wrong.
“Because our problems have been the lead story on every network recently, I assume you’re familiar with the main facts. I can have someone fill you in on the details tomorrow if you want. But right now, I need your advice about how to spin this—especially in Washington. I told Phyllis to get me the top person. I’m sure you’ve had experience with this sort of thing.”
While I spoke, my companion sat and listened carefully. But the longer I went on, the stranger his expression became. First, he looked puzzled. Then, he looked amused.
“I think there’s been a misunderstanding,” he chuckled. “I’m sorry about laughing. I don’t mean to minimize how serious your situation is. But I’m not who you think I am.”
“OK, so maybe you’re not the absolutely top guy. I know this was a last minute thing. But Phyllis wouldn’t have called you if she wasn’t sure you know what you’re doing.… So, what do you think? How do we play this?” I grabbed a pencil and yellow legal pad to take notes.
“Really. I’m not who you think I am,” he repeated. “I’m not a spin doctor. I haven’t a clue who Phyllis is. I’m not here because of any phone call.”
It’s an understatement to say I wasn’t thrilled to hear this. I’d just escorted a total stranger I met on the sidewalk through security and all the way into my office. The press—not to mention, my board—would have a field day with this.
Putting down the pencil, I looked at him seriously. “So, if you aren’t who you’re supposed to be, who are you? And what are you doing in my office?”
“Well, I may not be a spin doctor, but I am someone who can help you. That’s why I’m here. I’ve been reading about your problems and thought you could use a hand. I didn’t see that latest interview. But it sounds like you need my help even more than you did before.”
While I admired his initiative, this isn’t how I do business. “Look, I give you a lot of credit for getting your foot in the door, but this isn’t how I hire consultants—not for such an important issue. But I like your style, so give me your card. I’ll have my people check you out, and maybe we’ll give you a call for something in the future.… And I don’t want to be rude, but you’ve got to leave. I need help, but not yours.”
He rose up from his chair and headed for the door. “As you wish. Maybe our paths will cross some other time. Good luck with the hit your stock’s going to take after your quarterly loss is reported.”
I couldn’t believe what he’d just said. Only three people were supposed to know about that.
I got up and walked over to him. “Wait a minute. How do you know that?” If nothing else, I wanted to learn how I could have such a serious leak from my inner circle.
He turned back toward me. “How about this? I’ll tell you in exchange for your listening to me about how you need my help more than you realize.”
I honestly didn’t care about why some stranger thought I needed his help. But I couldn’t let him leave before finding out how he got such confidential information.
I went back to my desk and sat back down. “OK. I’ll listen to you for a few minutes. But first tell me who you are and how you got inside information about my company?”
He settled into the chair opposite me. “Who am I? Well, I’m the guy who, in the last few days, has gotten control of 30% of your company’s stock. As far as the quarterly loss goes, in my world, getting inside information is easy. It’s what I do.”
“Wait a minute!” I sputtered. “Nobody owns 30% of our stock. Who are you?”
He pulled out a small, black leather notebook from his pocket and jotted something down with his gold fountain pen. “Doesn’t listen carefully,” he mumbled as he scribbled. “Another one of your problems—but we can’t work on that today.”
He looked up and put the notebook down in front of him on my desk. “I didn’t say I owned 30% of the stock. I said I controlled it. I prefer to keep the details of how I do things confidential. But I decided to call in some favors. And there’s no point in telling you my name because you wouldn’t recognize it. I’ve worked very hard to remain anonymous. However, I’m a venture capitalist who likes to help promising companies and individuals—people like you. When I see a company that can use my help, I ‘arrange things,’ shall we say, so I can make things happen—like this conversation. I decided I wanted to talk to you. I thought controlling a sizable chunk of your company’s stock would get your attention.”
I didn’t know whether I felt impressed, mystified, or afraid. If what this guy said was true, he had the power to fire me on the spot. He also had a no-nonsense way about him that made me think he wouldn’t hesitate to do so if he wanted to. Of course, he could also be some con artist who knew how to talk his way into situations like this. But I was intrigued. I could grill my staff later to see if one of them actually gave this guy company information. I decided to play along for now.
“OK. You’re a combination of invisible man, Gordon Gekko, and puppet master. You’re not a spin doctor. And you claim to control enough stock to make me and the company do whatever you want.… For the sake of argument, let’s say I believe you. Why do I need your help?”
He got up from his chair, walked to the sideboard, got a cup of tea, and stared intently into the china cup for a few seconds. Then he turned to me.
“Here’s the situation. I think you can do a lot of good running this company. I think this can be a great example for other businesses about how to operate. Up until recently, you showed real potential. That’s why you caught my attention in the first place. But—to be blunt about things—lately, you’ve been making terrible decisions. And you know it. If you’re honest with yourself, you’ll admit that your decisions haven’t felt the way they should. You haven’t been trusting your instincts.… I bet you’ve felt like you’ve been swimming upstream.
“And that bad news about your losses is only the tip of the iceberg. Your company is weaker than you’ve been telling the analysts and the business press. And you know that too.”
I hated to admit it, but he was right. Things were worse than we were telling everyone. And I’d been scrambling. Everything had been going along great. We were making money hand over fist. Then, all of a sudden, we had one problem after another. On paper, every decision I’d made looked good. Everyone on my team agreed what we should do. But it always ended up like throwing gasoline on a fire. We were all mystified that things kept getting worse. But we couldn’t seem to turn things around.
“The root of your problem,” he continued, “is that you’ve based your decisions on ideas you don’t really believe. You’ve been making critical decisions based on what you said to that reporter about what business is about and on your claim that there was nothing wrong with what you’ve done. But despite what you think, you actually don’t believe these things. That’s why—despite what you’ve been saying to the analysts and the business press—your company is sliding so badly.”
Now I really didn’t know what to think. He was on target that things were worse than most people knew. But now he sounded crazy. He’s telling me I don’t believe what I say? I stared at him for a few seconds while I ran this idea through my brain a couple of times. Then I shook my head. We had problems, but his was the stupidest analysis I could imagine. That was it for me. I was done. I decided I didn’t believe he controlled that much stock. At best, he was a really good con artist.
And just as I was about to tell him to leave, he said something that really got my attention.
“Of course,” he laughed knowingly, “you think I’m crazy.… What, you don’t think I’ve seen that look before? … You don’t believe I control so much of your stock.… You think it’s ridiculous for me to claim that you don’t believe what you just said.… So I’m going to give you some incentive to continue this conversation for a while. I understand you enjoy betting.…” He paused to let me take in what he just said.
His comment did more than catch my attention. It troubled me because hardly anyone on the face of the earth knew about this. For years, I’d bet on foreign currency rates for fun. And the way I approached this wasn’t “investing”; it was “gambling.” But because you can’t have a successful marriage and keep secrets about something like this, Bobbi and I agreed on a set amount of money I could play with. If this guy was able to find out something so private, he was someone I couldn’t afford to underestimate.
“Your compensation from the company last year was $20 million,” he continued. “If I’m who I say I am, you can imagine what I’m worth. We each contribute 2% of our last year’s compensation to the pot. Winner takes all. To show that I’m good for it, you can hold this as collateral.”
He took something out of his vest pocket and handed it to me.
“A pocket watch?” I said, almost laughing. “This is supposed to make it worth my while to talk to you? … You’re going to have to do a lot better than that.”
He sat back down, picked up his notebook, and jotted something down. He read out loud as he wrote, “Makes snap judgments and doesn’t pay attention to detail.” He looked up and said, “Take your time. I want to check my e-mail anyway.” He put the notebook away, pulled out his phone, and started reading.
I looked more closely at the watch. There was something familiar about it. It was a double-open-faced watch with what looked like a display of the Milky Way on the back. “I’ve seen this before,” I said quietly to myself.
“Yes, you have,” he said, never looking up from his e-mail, “in Switzerland.”
I turned to my computer and did a quick search. The watch was a dead ringer for the world’s most expensive pocket watch. It sold at Sotheby’s in 1999 for $11 million—to “an anonymous Middle Eastern collector.” It was now on display in the Patek Philippe Museum in Geneva. I’d just visited that city, and, because I collect watches, I went to the museum.
“Very clever,” I said. “It’s an impressive copy. So, not enough for the bet you propose.” I put the watch down on the desk in front of him.
“Well, there is a copy,” he remarked, still staring at his phone. “That’s what you saw in Geneva. But I’m wagering the genuine article.”
“So you’re a jewel thief as well?” I laughed. I couldn’t help but be curious at what kind of story he was now going to tell me.
“People like me don’t have to steal. No, as much fun as it would be to have the skills of a cat burglar, this was a gift from a friend. He had a copy made so the museum would still have something to display.”
I picked up the watch and examined it carefully. It was either genuine or a remarkable forgery.
“You’re still skeptical. I understand. Here’s my friend’s personal number, if you want to call and verify my story. He won’t be entirely surprised because you won’t be the first person to call to check me out. However, because of the 7-hour time difference, you’ll likely get one of his bodyguards.”
“So this is real?”
“And it was gift?”
“As I said,” he smiled.
“A favor.… Obviously, a big favor.… And my friend is a very generous individual.… Seriously, if you call him, he’ll confirm my story.… So, do we have a bet?”
I leaned back in my chair and stared at the ceiling. Two percent of my $20 million was $400,000. $400,000 for one conversation? Not bad. If the watch was real, his collateral was OK. And his clothes were very expensive. This guy was either who he said he was, or he’d done a superb job of dressing the part.
“It’s an interesting proposition—if you’re who you say you are. But how do we have a bet connected with a conversation? Who decides who wins?”
“It’s simple. I bet I can show you that you don’t really believe what you said to that reporter. You may think you believe it now, but after we talk about it, I bet—literally—that you’ll see you don’t.… You may have said those things to the reporter. But you said them without thinking. I wager that if we really dig into what you were talking about, you’ll come to the conclusion that you don’t believe what you said, after all.… And you’ll be the judge. At the end of our conversation, you decide whether you still believe what you just said.”
I’ve always thought that if something looked too good to be true, it usually was. And this felt like one of those times. There must be a catch. I studied my opponent to see what I could learn. The saying in poker is you play the man, not the cards. Realizing I was trying to size him up, my companion just grinned. He was revealing nothing that would give me an edge.… Still, no matter what I actually thought at the end of the conversation, if I simply lied, I could win the bet.
As if reading my mind, he added, “Of course, it goes without saying that you’ll tell the truth about what you think.”
“Right—goes without saying,” I agreed, embarrassed that the prospect of so much easy money had me consider lying.
“So, do we have a bet?” he asked.
I still wasn’t sure. “You know everything about me, but I know nothing about you. For all I know, the most I stand to win is a watch that might be a copy.”
“I can appreciate your doubts. So let’s do this in two parts—the equivalent of two hands in poker. The first hand deals with your statement about what business is all about; the second, your claim you’ve done nothing wrong. If you’re unhappy after the first hand, we stop. And to add some enticement, if I win the hand and you think I’ve cheated or that this wasn’t in some way completely above board, I’ll let you off the hook. You owe me nothing. We shake hands. You never hear from me again. I step away from your company.… But that also means you’re on your own.”
I still had misgivings. But I was also worried about the company. And part of me was curious about what would happen if I let this play itself out. What was this guy suggesting when he said I didn’t really believe what I said? Of course I believed it, or I wouldn’t have said it in the first place. What does a conversation around that idea even look like?
“OK, I’m in,” I said, sticking out my hand.
“Great.” Getting out of his chair, he took my hand and gave it a firm shake. He nodded approvingly. “Shaking on a deal like you mean it. Very old school. That’s a good sign. Let’s get to work.”
“One more preliminary before we start,” I said. “I take it you aren’t going to tell me your real name. But I need to call you something. What’s it going to be?”
“Well, my closest friends have a nickname for me when I pull stunts like this. How about that?”
“Seems appropriate. What is it?”
“Socrates,” he answered with a wink.
I had to laugh. Despite the expensive clothes, he had a white mane and beard and piercing eyes. Swap out the hand-tailored suit for a toga, and he’d fit the classic image of the Greek philosopher. “Socrates,” I said. “That’s rich.”