We caught Neil Cavuto on his show, Your World, and we saw Ken Langone interviewed, who is the co-founder of Home Depot and former director of the New York Stock Exchange. The exchange involved recent news that the Dow Jones wrapped up last week lower – which was the sixth such drop in a row. The news is somewhat significant because that hasn’t happened since 2002. As you can imagine, TV pundits are looking to those with proven track records to explain what might be going on. What caught our attention was a pointed question put to Langone by Neil following a statement he made on Obama’s remark that he’s not worried about a double-dip recession – something that Ken Langone is worried about, insofar as he seems to feel that doing nothing is akin to being aggressively against recovery.
Ken Langone Interviewed on Neil Cavuto
Neil Cavuto asked “Do you think President Obama doesn’t like business, doesn’t like business a lot? [if so] Why not?” – to which Langone replied:
Oh, absolutely doesn’t like business. Oh, I think… Ask him. I don’t know, but it’s clear to me by his actions he does not like — he doesn’t realize the value. The proof right now is, all that money that’s been spent, we’re still not creating the jobs we have to do. Private sector creates jobs. The Home Depot, three of us, Bernie, Arthur and myself, 325,000 people. I had a girl yesterday from Arkansas call me, talk to me on the phone. She started as a part-time cashier 14 years ago. She is, tonight, a district manager of eight stores.
I mean that’s what job creation should be all about.
So what was Ken Langone’s advice for the president? He went back to what makes a good CEO. That, while it’s easy to sit back and play politics, the best leaders, well… lead. They take risks. Here it is in his own words:
Look, I will make this concession to you. Too many people get to run major American corporations by not rocking the boat within the company itself. It’s called politics. Every once in a while, a business leader has to demonstrate courage. The businesses that don’t have leaders that do demonstrate courage don’t make it. They just don’t make it. Part of running a business — I have never been a CEO, so it is easy for me to say what some other guy should do — but the CEOs I have known and respected have always been willing to make the tough decisions. Bossidy, Welch, Bernie, Arthur, Frank Blake, Ross Perot, Mitch — I can go down the list. What was a thread that ran through all of them? It was the willingness to stand up and say, this may not be popular, but this is the right thing to do.
Business leadership takes courage. We’ve seen it in our own experience with tool manufacturers. When Lithium-ion came along, for example, business had to decide to adopt new technology that might leave many of their legacy customers in need of new tools. That’s a big risk. Some took that risk and gave their customers reasons to actually WANT to buy the new tools. Better ergonomics, longer lasting run-time, better tools with improved features and lighter power-to-weight ratios… Effective leadership takes risks.
So what does Ken give as an example of poor leadership? Eastman Kodak. When the world moved towards digital, Kodak sat on its haunches and literally let the world slip by. Once a top-50 company, Kodak is now all but irrelevant in the world of digital photography. If we don’t want the same thing to happen to our country, then we’re likely going to need some leadership that will set aside politics and do what’s right – take some risks, and bring this economy around.
Neil Cavuto addressed this specifically, asking Ken: “What does that say about our country now, where we stand now? Are you – you’re a big patriot, besides being a concerned guy… Are you worried that we’re going into a double-dip [recession]?” Ken responded:
Oh, I think we’re in a double-dip right now. I think right now, this economy – look, unemployment’s not 9 percent. It is 18 percent. We’re in trouble. We spent trillions of dollars in the last three – Keynesian economics; I learned it in college 50 years ago. The idea, they called it pump-priming. You start the pump, and then the pump, of its own force, works. We pump-primed here and it’s not taking hold.
So what do you think? Are we headed for a double-dip recession? If so, what’s it going to do to your trade or business? How are you preparing to hang on and set yourself up for success?
