Todd Buchholz “lights up economics with a wickedly sparkling wit,” says the Associated Press. He recently jousted with James Carville and Ben Stein, and Successful Meetings Magazine named him one of the “21 Top Speakers for the 21st Century.” His editorials in the Wall Street Journal and commentaries on PBS correctly forecast the 2001 slowdown in the U.S., and the 2008 pop in commodity prices. The New York Times has turned to him to decipher terrorist threats and the job market. BusinessWeek raved about his book Market Shock, which warned of the quicksand facing the stock market. Buchholz entertains his audiences and shows them how to thrive in a challenging economy, while gearing up for future prosperity.
A former director of economic policy at the White House, a managing director of the $15 billion Tiger hedge fund, and an award-winning economics teacher at Harvard, Buchholz targets his entertaining remarks to the cutting edge of economics, finance, and business strategy. He has advised President Bush, and is a frequent commentator on ABC News, PBS, and CBS, and recently hosted his own special on CNBC. Buchholz has debated such luminaries as Lester Thurow and Nobel Laureate Joseph Stiglitz. He is Co-Founder and Managing Director of Two Oceans Management, LLC and has been a fellow at Cambridge University.
He has authored numerous books that have been translated into a dozen languages and are used in universities nationwide, the likes of which include Harvard, Brigham Young and Princeton. Market Shock: 9 Economic and Social Upheavals that Will Shake Our Financial Future, was released to rave reviews and dubbed “outstanding” by the Wall Street Journal. Buchholz is also author of the best- selling New Ideas from Dead Economists and From Here To Economy, which were lavishly praised by The New York Times and Financial Times. His newest books are New Ideas From Dead CEOs, and a novel, The Castro Gene.
Buchholz is a contributing editor at Worth magazine, where he writes the “Global Markets” column, and he has penned articles for the New York Times, Wall Street Journal, Forbes, and Reader’s Digest. He delivered a lecture at the White House entitled “Clarity, Honesty and Modesty in Economics,” and has been a keynote speaker before such groups as Microsoft, IBM, Goldman Sachs and the US Chamber of Commerce.
Before joining Tiger in 1996, Buchholz was President of the G7 Group, Inc., an international consulting firm, whose clientele included many of the top securities firms, investment banks and money managers in New York, London, and Tokyo. From 1989 to 1992 he served at the White House as a Director for Economic Policy. Buchholz won the Allyn Young Teaching Prize at Harvard and holds advanced degrees in economics and law from Cambridge and Harvard. He also holds several engineering and design patents and is a co-producer of the Broadway smash "Jersey Boys."
4 Ways to Conquer a Business Crisis
The coronavirus death rate is unknown, but the corporate death rate is clear. About 90 percent of the companies that made up the Fortune 500 list in 1955 are gone—bankrupt, merged, or too shrunken to show up on the list. Your grandparents may have driven home from work in a Studebaker, watched television on a Zenith, and taken off their Brown shoes to rest their feet on a Sears sofa. Corporate failures are not all bad news, of course. They make room for new stars like Tesla, Nike, and Netflix. Every company eventually faces a do-or-die moment. If companies want to survive the current crisis, they must remember key lessons from survivors.
Four threats tend to undermine good companies:
· First, an unpredictable external disaster may strike, whether a plague like the coronavirus, a hurricane, or even a terrorist attack.
· Second, a company’s flagship product may become obsolete and leapfrogged by a more innovative competitor. Sony seemed blithely content with its ubiquitous Walkman, until Steve Jobs unveiled the category-killing iPod.
· Third, tastes may change. Florida orange growers struggle with a consumer who does not reach for a glass of OJ upon waking each morning, alongside cereal makers like Kellogg, who wonder how to compete with avocado toast.
· Fourth, companies find themselves targeted by legislative or public agency policy. Cigarette makers like Phillip Morris thought they had finally found a safe passage to longevity by selling smokeless cigarettes, only to find the FDA trying to snuff them out 2019.
History shows that companies that survive an onslaught enact at least one the following four strategies. The coronavirus may demand all four.
When the public suddenly doubts the safety of a product and a company’s forthrightness about risks, the C-suite must take out a broom and sweep aside distrust, despite enormous sunk costs. Nearly every management textbook includes a tribute to Johnson & Johnson, which recalled millions of Tylenol tablets in 1982, after a few bottles had been tampered with by a man intent on murder.
Trust your Loyalists and Superfans
In 1986, CBS’s 60 Minutes broadcast a segment accusing Audi cars of “sudden acceleration.” The program showed an Audi sedan speeding out of control without the driver tapping the accelerator. It was a devastating report that neglected to mention that60 Minutes had rigged the car in the video. Despite ultimate exoneration by the NHTSA, Audi sales collapsed by over 80 percent. Rather than battle a media war in the U.S., Audi retreated and instead built up an even stronger following among trusted fans in Europe, while introducing award-winning innovations like all-wheel drive. By the mid-1990s, Audi roared back to the U.S., stealing market share from American luxury automakers like Cadillac and Lincoln.
Deliver Innovation and Make Big Bets
A company facing an existential crisis can’t take baby steps. Disney parks may be closed today as the result of the pandemic, but few remember that in the early 1980s, Disney’s fortunes looked sleepier than any princess locked in a castle. Profits were meager, two parks made up 70 percent of revenues, and corporate raiders circled like vultures. In 1984, new CEO Michael Eisner broke precedent by blasting open Disney’s vault for home video. Parents around the world rushed to buy. He then green-lit new parks, a cruise line, and Broadway shows based on The Lion King and Beauty and the Beast. Today’s Disney+ streaming would not exist had Eisner not bought ABC/ESPN/Cap Cities. These big bets paid off, giving investors a 9,900 percent increase in the share price.
Make Sure Your C-Team is Your A-Team—Align Executive Interests with New Metrics
Once a CEO has identified the foe, he or she faces a tough choice: figure out which members of the executive team are best-suited to fight for the firm’s survival. If a company like Sony is facing a crisis of obsolescence, its brightest engineers should be escorted to the corner office. If a company like Sears can’t figure out how to ship goods as cheaply as Walmart, then the supply-chain chief should sit next to the CEO. At that point, the CEO has to decide whether to give the executive more resources to battle the crisis—or hand him a pink slip and poach competitors for a more talented teammate.
A fresh challenge also requires fresher incentives. Rather than more typical financial incentives based on sales growth and cost containment, incentives should be geared to drive the new strategy. For example, some hospitals are now compensating executives based on their success in pushing down the number of medication errors and in-hospital infection rates.
Only reckless people hope for a crisis. But when a crisis hits, it is even more reckless to do nothing, as the deceased companies found in old Fortune 500 lists can attest. The companies that survive 2020 are likely to be the ones that take some time to study the past.
Consumers, Cash, and Your Coronavirus Comeback
Todd Buchholz is advising some of the hardest-hit companies – from major cruise lines to Broadway theaters – on their coronavirus comeback. Tap into his frontline economic experience to help your business grow now.
• Find out whether the economy will bounce back with a V-shaped, U-shaped, or W-shaped recovery, and how to adjust for contingencies
• Position your company to be, not just a survivor but a beneficiary of the economic rebound ahead
• Target the customers and entities that can spend the most—soon
Associate Professor of Management (Economics) Associate Professor of Law Executive Director of Health Affairs
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