Will anyone previously considered among the best and the brilliant come out of this global financial crisis with, if not fortune, at least their reputation intact? As each day goes by, it appears not. Today it's Kirk Kerkorian's turn to see his investing genius reputation take a "body blow."
There is an old saying when times are good, markets are purring, and everyone is looking smart and prosperous, "Don't confuse brains with a bull market." What is the charitably appropriate analogue for a deep down cycle? Maybe, "Don't confuse feeling like an dimwit with a depression."
Here is another recent case in point: Sir Anthony O'Reilly. The media mogul (pictured above), once Ireland's richest man, according to the Wall Street Journal, was a less-grand Tony O'Reilly when I first met him in the early 1980s. He was still a larger than life character back then. The marketing wunderkind was born in Dublin and worked in Ireland and Great Britain until 1971, when he was called to H.J. Heinz's world headquarters in Pittsburgh. There he rose to the top of the staid family owned ketchup company and was propelling it into a global brands powerhouse.
I flew out to Pittsburgh, where he and I enjoyed a cup of tea in his beautifully appointed office while we nailed down a few details of his bylined article that I was about to publish in Directors & Boards. I confess that he wowed me with the force of his personality and brilliance of his mind. Because of his unconventional (at that time) global background for a U.S. CEO, his article, "Corporate America's Next 20 Years," sparkled with nuggets of eloquence and insight that only an outsider to these shores would or could convey. Sample (and remember that 1983, which is when this article was published, was a dark time to be in business, not all that far removed in many measures from today):
"America encourages optimism. This is the first great nation of the world where the rules were written by victims and not the victors. If you go back through history, through the Greeks, the Romans, the Empire of Napoleon, the British, there is a recurring theme: the victor came and conquered and imposed his rules on the subject state. The people who came to this country were themselves victims, fleeing from famine, disease, economic deprivation, and religious oppression, and they concelebrated their recollection of all that was past in the Constitution of the United States — one of the mightiest and most generous documents ever penned by the hand of man. Nothing in the history of this country leads me to believe that it need be other then encouraged by the adversity it now finds itself in."
Inspiring even today, no? Well, that was vintage Tony O'Reilly, a titan with a firm grasp on history and strategy as drivers of destiny. Heinz under O'Reilly was a business success — the company had record sales in 1982 amidst the hard economy — but never was it a governance best practices case study. Hard to believe now, but the company back then had a board of 18 members — half of whom were insiders. That was very high for a Fortune company in the early '80s. The rules were looser, and he was a swashbuckler and an entrepreneur in a big corporate home. The term Imperial CEO has not yet come into vogue, but the crown would certainly fit snugly on this rugby star turned corporate chieftain.
Back then he had the sideline venture going in his homeland with ownership of a newspaper company. And that's what has humbled him today. Is there any business outside of creating exotic financial instruments and manufacturing cars that has such a "third rail" aspect to it as newspaper publishing? (Maybe Las Vegas casino ownership.)
So, the global financial crisis unceremoniously shreds another reputation — that of Sir Anthony O'Reilly as the far-sighted tycoon with the deft grasp on the rudder. It looks like Kerkorian is headed into the same shredder. There have been many others before. Who's next?