In a Q&A session following a keynote speech at LPL's annual conference in Chicago this week, former Disney CEO Michael Eisner sounded off on the subject of taxes and income redistribution. It came as he related a story from a dinner party he attended hosted by a woman bedazzled with just about more expensive jewelry than he had ever seen while she complained about the prospect of higher taxes. Since he is a Hollywood zillionaire, she was likely to be wearing a lot of bling.
Eisner told his hostess that if her taxes didn't go up, there would be looters climbing over the walls to her mansion to take all sorts of trinkets and other goodies. He then told the audience she probably was sorry she invited him.
I'm not as sure about the correlation, or lack thereof, between looting and marginal tax rates. Just look at England. That nation raised taxes on the wealthy and cut social spending for everyone, roughly along the lines of what the Simpson-Bowles commission recommended. And what did they get? Riots and looting, which I would guess are driven more by chronic unemployment among that nation's youth, currently above 20%, than by marginal tax rates.
Eisner was a surprising choice as a speaker but his subject, business partnerships, was highly relevant to an audience of independent financial advisors. It's a topic upon which he just wrote a book that examines ten successful business partnerships.
Two minds are better than one and he found numerous cases of partnerships characterized by extreme compatibility among very different people. When it comes to launching a new venture, participants should take a financial box and decide what they should spend on the project. "Creativity is essential, but it needs to have a symbiotic relationship with financial discipline," Eisner advised.
Spending a ton of money is no guarantee of success. Economic restraint doesn't always hamstring creative excellence. "Substituting creative capital for creativity rarely works," he said.
He was also an advocate of micromanagement, noting that many great business people are detail freaks. The alternative is management by committee, which almost always leads to the lowest common denominator.
A balanced yin-yang approach to problem solving combined with creative tension often produces good results. He cited the by-the-book managerial style of former New York Yankees manager Joe Torre and the go-with-your-gut style of his sidekick Don Zimmer as a classic example.
To be successful, you need to fail. That chestnut sounds like it came from another great philosopher, Yogi Berra, but it didn't. In fact, it was the legendary Tom Watson of IBM who once remarked that to succeed in business you need to double your failure rate. That's particularly true on the Internet, Eisner declared.
Finally, Eisner cited a study of happiness conducted by Harvard over decades that found there was one overriding cause of happiness. It was a sustained, valuable, enjoyable partnership over one's lifetime. It's as true in work as in one's personal life.