Knowledge@Wharton: Do all defining moments lead to successful outcomes? Or do some of them involve failure?
Steinbaum: There’s an example in my book of a company called Falcon, run by Frank Jacobs, who’s an honest, honourable man. His business [of making furniture for restaurants] was doing well, but he had an opportunity to make an acquisition, a competitor called Shelby Williams. Unfortunately, just as he made the acquisition, the economy went into a recession.
Jacobs also – and he readily talks about this – didn’t do the amount of due diligence he should have. As a result, he didn’t have the infrastructure in place [to handle the merger well] and a number of other factors came into play. Jacobs ended up losing the company as well as his personal wealth. But what an incredible learning lesson for him! Today he has started another company. It’s based in China and he’s doing fine. He got up off the floor, he never complained, and he took full responsibility for all his decisions. Quite a man.
Knowledge@Wharton: Of all the stories you heard from different CEOs, which one surprised you the most and why?
Steinbaum: I heard an interesting story from a man by the name of Joseph Plumeri. Plumeri today is chairman and CEO of Willis Group Holdings, the third-largest insurance brokerage firm in the world. He was born on the east side of New York and went to New York Law School. He went to school in the morning to learn the academic side of law, but he needed a job in the afternoon to learn the practical side and also to support himself. The first day of class, he went looking for a job with a law firm.
Plumeri had heard that the really good law firms had three names. So he walked into a building, looked up at the directory and saw three names: Carter, Berlind and Weill. He went upstairs and said to the receptionist, “I’d like to apply for a job.” So she sent him down the hall to see a Mr. Weill.
Plumeri walked into Weill’s office and Weill said, “What can I do for you? Please sit down.” Plumeri said, “Well, I’d like to apply for a job. I go to New York Law School in the morning. I want a job in the afternoon in a law firm to learn the practical side of law.” Weill said, “Well, what makes you think you can learn the law here?” Plumeri said, “Well, this is a law firm, isn’t it? You have three names.” Weill chuckled, and Plumeri was very embarrassed. He sat down on a couch, sort of sank down. As he stood up to leave, Weill said, “No, sit down. You interest me.” They spoke, and Weill offered him a part-time job.
Plumeri’s first office was a closet, literally a closet. His first job was going to get people’s lunch, to get their laundry, to get their cleaning. And Weill turned out to be the legendary Sanford (Sandy) Weill, the person who built Citigroup and Travelers Primerica.
Plumeri’s defining moment came when he walked into a brokerage company looking for a job in a law firm. It’s the most important decision he ever made, because here’s what happened. Eventually Plumeri went on to become CEO and chairman of Travelers Primerica Financial, with responsibility for 150,000 brokers. He also became president of Smith Barney Shearson, and then Shearson Lehman Brothers. He then became chairman and CEO of Citigroup North America, with 450 retail branches. And now he is chairman and CEO of Willis Group Holdings. Plumeri’s advice to people is, “Just get up off your duff, go out and do something. Go play in traffic. You never know what’ll happen. Look at what happened to me.”
Knowledge@Wharton: What advice would you give to a business executive who has to make a career-defining decision? What is the best way to get it right?
Steinbaum: The best way to make a defining-moment decision is to study all the facts, learn everything you can about the circumstances you’re in, the pros and cons, the cost-benefit analysis, and then make your decision. It’s really got to be thought out.
