12 O'Clock High

Richard Lummis and I are back. Today, we take a look at leadership lessons from a trifecta of failed leaders, including Adam Neumann, the founder and former CEO of WeWork, Elizabeth Holmes, founder and former CEO of Theranos and Travis Kalanick, founder and former CEO of Uber.

 Highlights of this podcast include:

Resources

Is Your CEO Brilliant, a Jerk or Both?

When to fire the boss?

CEOs are not here to save us

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Richard Lummis and I are back and today for our initial podcast of 2020 and the second decade of the 21stCentury. Today, we take a look at leadership lessons from the rise and fall of Adam Neumann, the former CEO of WeWork.

 Highlights of this podcast include:

Resources

Curse of the Cult of the Founder

The Rise and Fall of Adam Neumann

Adam Neumann’s Over the Top Style

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Richard Lummis and I are back and today for our final podcast of 2019 and the second decade of the 21stCentury. Today, we provide a wrap up of 2019 podcasts, giving some of our favorites and new issues we learned about or perhaps reacquainted ourselves with from history. We then consider some of the topics we will explore in 2020.

 Highlights of this podcast include:

Resources

Metropolis by Phillip Kerr

Leaders: Myths and Reality by General Stanley McCrystal, Jeff Eggers and Jason Magone

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I turn the tables on Richard Lummis this week as I interview him on the recent bestseller Super Pumped-the Battle for Uber by Mike Issac. Highlights of this podcast include:

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Richard Lummis is on assignment this week so I take this week’s episode solo to discuss how you can begin to evaluate a leader’s conduct around not simply compliance and ethics but also how a leader can improve culture. Highlights of this podcast include:

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Richard Lummis is on assignment this week so I am pleased to host Alyson Van Hooser. Alyson is passionate about leadership. She has her own consulting practice on leadership as well as her own podcast on leadership. She recently wrote an article on leadership lessons from Grey’s Anatomy and I asked to come on 12 O’Clock High to expound on some of her thoughts. Highlights of this podcast include:

Resources

Read Alyson’s article Grey’s Anatomy Leadership Lessons

If you are looking for tangible action steps and refreshing insights to help ignite the power of your own leadership journey, sign up for Alyson’s weekly leadership blog HERE.

If your business would benefit from higher-performing leaders, check out more information about the comprehensive leadership development training Alyson provides HERE.

If you want to reach out to Alyson directly, email her at [email protected]

Check out Alyson’s podcast on leadership, STAKE: a Podcast on Leadership, on the Compliance Podcast Network. 

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I recently listened to the Great Courses series of lectures entitled, Crashes and Crisis: Lessons form a History of Financial Disasters, hosted by Professor Connel Fullenkamp. Although the lecture series focused on economic disasters, I found many leadership lessons embedded in the lecture. In prior podcasts, host Richard Lummis and myself have considered the Dutch Tulip Bubble from the 1630s, the South Sea Bubble of 1720 and the Mississippi Bubble of 1720.   Today we conclude with the Panic of 1907 and see how one person’s integrity and leadership can actually work to stop a panic and save a national economy.

While there were obviously many moving parts to stopping the Panic of 1907, with the personal integrity of JP Morgan and his knowledge of the domestic and international financial markets, it is very doubtful the Panic could have been stopped. If the Panic had been allowed to spread unchecked it likely could have brought down the entire US economy. This example shows that the right person, at the right place, at the right time can make all the difference.

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I recently listened to the Great Courses series of lectures, entitled Crashes and Crisis: Lessons form a History of Financial Disasters, hosted by Professor Connel Fullenkamp. Although the lecture series focused on economic disasters, I found many leadership lessons embedded in the lecture. In prior podcasts, host Richard Lummis and myself have considered the Dutch Tulip Bubble from the 1630s and the South Sea Bubble of 1720. Today we consider the leadership lessons and failures which led to the Mississippi Bubble of 1720.  The Mississippi Bubble has nothing to do with the state of Mississippi or the great river but rather a French trading company which had been granted an exclusive charter by the King of France to develop France’s territory in the Mississippi territory in the New World.

This lack of seeming awareness of enhanced risks, is a confounding aspect of this Bubble. If your own company policies, procedures, controls and personnel cannot determine how business is transacted in your organization, you run the risk of a legal violation or something similar to the fall of the Mississippi Company and John Law, who was forced to flee France disguised as a woman.

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In Part 2 of this special four-part podcast series, Richard Lummis and myself consider business leadership from a different angle, that of great economic disaster. This podcast series was inspired by the Great Courses series of lectures entitled, Crashes and Crisis: Lessons form a History of Financial Disasters, hosted by Professor Connel Fullenkamp. In this podcast series, we will consider the Dutch Tulip Bubble from the 1630s, the South Sea Bubble of 1720, the Mississippi Bubble of 1720 and the 1907 Panic. Today we continue with the South Sea Company Bubble of 1720.

Fullenkamp said of the scandal, “The South Sea Company went from an obscure British trading organization in the early 18th century, with a share price of £128, to England’s most important company, with its shares trading at more than £1000—over the course of just 6 months. The company was at the center of one of history’s most interesting stock bubbles, one largely built on stock price manipulation and corruption. The South Sea bubble is a complex, fascinating story about the early days of the stock market in England and a cautionary tale about the dangers of mixing private enterprise and government finance.”

What does the South Sea bubble teach us about the nature of bubbles and crashes? Fullenkamp identified three general points. First, “When governments get too involved in any asset market, there’s bound to be danger. People interpret the government presence as a sign that the asset can’t lose, so they’re willing to overpay for it .” Second, the South Sea bubble, similar to the  tulip bubble that preceded it, “was made possible by easy credit. The ability to buy stocks on credit, with absurdly low down payments, made people all too willing to buy the company’s shares.” The third and final point is that “Market manipulation can, and does, play a role in bubbles. And manipulation can be difficult to detect until after a bubble bursts.”

Focusing on the fraud and market manipulations of the South Sea Bubble, James Narron and Richard Skeie, in their article “Crisis Chronicles: The South Sea Bubble of 1720—Repackaging Debt and the Current Reach for Yield”, found four factors. (1) Start with insider trading, here by picking up the British National Debt; (2) Pay bribes to those who have to approve the deal, here Members of Parliament; (3) Ban rivals, here the South Sea Company persuaded Parliament to pass the ‘Bubble Act’ which banned corporations in competition with the South Sea Company; and (4) Repackage worthless old debt for new investors, here think “Asset-backed securitization and collateralized debt obligations” in 1720 and you begin to see the problem.

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In this special four-part podcast series, Richard Lummis and myself consider business leadership from a different angle, that of great economic disaster. This podcast series was inspired by the Great Courses series of lectures entitled, Crashes and Crisis: Lessons form a History of Financial Disasters, hosted by Professor Connel Fullenkamp. In this podcast series, we will consider the Dutch Tulip Bubble from the 1630s, the South Sea Bubble of 1720, the Mississippi Bubble of 1720 and the 1907 Panic. Today we begin with the Dutch Tulip Bubble.

Tulips had been imported into what became the United Provinces of Holland in the late 1500s from Turkey. They became quite fashionable with the smart set at the time (i.e. royalty and the aristocracy) and by the early 1630s prices in Holland were already quite high. Then two things happened to create the bubble of 1634-1637. First the small group of tightly knit Dutch traders who bought and sold tulips were overrun by speculators.

Second and perhaps more significantly, a type of formal futures market was created where contracts to buy bulbs at the end of the season were bought and sold, beginning in mid-1636. But this market was sanctioned or regulated as their trades were not made on formal Dutch exchanges. Different groups of traders began to meet together in taverns where they did not have to put much money down and the contracts were not legally enforceable. This significantly lessened any downside in not getting carried away in bidding.

Traders were required only to pay a 2.5% “wine money” fee, up to a maximum of three guilders per trade. Neither party paid an initial margin, nor a mark-to-market margin, and all contracts were with the individual counterparties rather than with the Exchange. The entire business was accomplished on the margins of Dutch economic life, not in the Exchange itself.

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