[Unedited Transcript]
Paul Ford: [00:00:00] Rich, do you have any go-to TV shows?
Rich Ziade: Yes.
Paul Ford: What are you watching these days?
Rich Ziade: Well, I’m watching what everyone else is watching. I watch succession.
Paul Ford: Oh, me too. It’s, frankly, it’s the only thing I watch that isn’t something I watch with the kids. Right. Like it’s, I, I’m just a little tuned out right now and I didn’t want to get into that show cuz it’s annoying and predictable to get into that show.
Rich Ziade: I know you don’t like to go where the masses are going. Even though like if you look at the viewership, it’s like 800,000. It’s actually small.
Paul Ford: It really is. They all live in this neighborhood
Rich Ziade: They all live in this neighborhood. We’re in Brooklyn. Um, yeah. So, uh, anti spoiler alert. Don’t worry about it.
There will be no spoilers here. We’re going meta
Paul Ford: meta. just to frame it for everyone, Paul, take 30 seconds and tell everyone who doesn’t watch succession.
Rich Ziade: What succession’s about. We’re gonna try to make this entertaining [00:01:00] for everybody.
Paul Ford: succession is about, um, essentially it’s about Rupert Murdoch. It’s about, uh, a, a man who founded and built a huge media and entertainment empire, uh, and owns a sort of proxy, Fox News and his, he’s worth billions and billions of dollars, which means his children are too.
And his children would like to take over the company, but they show a lot of signs of being spoiled, rich, self-indulgent, narcissistic, goon balls, and he himself is an absolutely nefarious, manipulative monster human.
Rich Ziade: yes.
Paul Ford: So it’s very, it’s very watchable and it gets a lot
Rich Ziade: classically
Paul Ford: Oh yeah. There’s good town on this show. And there’s also, um, it gets a lot right about the vibes of the media industry. They go to places that are, you know, they go to conferences that look like the weird Aspen type of conferences that media people like to
Rich Ziade: They’re on [00:02:00] plane, private planes and boats a lot.
Paul Ford: So it’s, it’s definitely you get to watch.
There’s a great, um, somebody, I, I won’t go too far into this, but somebody wants to ask the novelist Henry James, you know, like, why do you only write about rich people when he’s sort of like, what, what you, what do you want to see? Right?
Rich Ziade: yeah,
Paul Ford: that’s, and actually his point, which I think is a really good one, is,
Rich Ziade: I
Paul Ford: I wanted to understand in my novels the behavior of human beings unconstrained by their material circumstances.
Yes. What is the human when they have absolutely no barriers to living any life they want. Yes. And that is what succession shows you that like it’s a point of view on that like, These humans can and all, they all want father’s love. That’s the thesis of the show,
Rich Ziade: which is also very Shakespearean.
Paul Ford: Yes, that’s right.
Like, I can’t, they can’t let it go. So, but that’s not how, when Rich and I watch the show, what, what do you see when you watch the show, rich?
Rich Ziade: I may see, I mean, I’ve been in business
Paul Ford: over 500 [00:03:00] years.
Rich Ziade: I’ve also visited very big, like I’ve, I’ve lived inside of like, probably one of the most revered investment banks in the world.
I’ve lived inside of the largest transportation agency in the world. I’ve, so I’ve, I’ve been places. I don’t, I’m not gonna sit here and advertise that I, I, I, you know, have been. In the control room, but I see a lot of these worlds. I also, based on our past history, have dealt with a lot of lawyers and accountants.
Paul Ford: Yeah. And I mean, and we have spent time with what I would call, what are, you know, the banks referred to as, uh, NWS or ultra high net worth individuals and.
Rich Ziade: bunch of those have been our clients, so, So what does succession get wrong? It’s a bit of a caricature of a lot of that world.
Paul Ford: does. So we’re
Rich Ziade: but they’re entertaining us. I’m not, this isn’t, by the way, we’re gonna talk about what
Paul Ford: we love succession, we love it. But we’re gonna talk about three things that it gets completely
Rich Ziade: All right. Go Paul. I’m
Paul Ford: I’m gonna tell you number one. Number one is I watch this show and it gets a lot right about like the spaces, like [00:04:00] they, they shoot in Hudson Yards in New York City, which is like this very bleak like mall style apartments, where in just all the.
The very, very wealthy communicate through furniture cuz they’re no longer able to use words or feelings. And so like, so there’s a lot of that, right? But as you’re looking, there’s all these empty spaces and they’re talking and they’re doing deals. And the thing that strikes me, especially as a former consultant, the rooms are empty of consultants and there would always be consultants nearby.
Rich Ziade: all ways. So let’s describe
Paul Ford: it. So, so here’s the thing. You are a giant. Media company,
Rich Ziade: You
Paul Ford: you can only make so many decisions with the people at hand. You’re the people who work there are supposed to run the company. Yes. But now you need new things. You need to know, should I buy Pierce the big, uh, publishing firm?
Should I, um, go into the internet? Should I do whatever? Yeah.
Rich Ziade: Yeah. And if you decide yes, then the process of buying causes a swarm of consultants, [00:05:00] lawyers, bankers.
Paul Ford: But even before we get there, somebody needs to create a PowerPoint to present to you why you should go into Industry X, or why you should sell off the cruise ship division.
Right. So we even even gotten to execution. Typically, there would be like a thousand humans swarming in suits. Yeah. From different consulting firms all trying to screw each other
Rich Ziade: Everywhere we’ve seen it, we’ve seen it with clients where we were one of the agencies, and there’d be like a dozen others.
Paul Ford: You’d be, you’d be walking in and then like Deloitte would be walking out. Right. And so there is a world of PowerPoint. And, and Excel documents that is just simply not represented on the show. Like all these things where they’re fighting and talking on, on a boat would actually be captured in PowerPoint and Excel meetings that ran for three and a half
Rich Ziade: Yeah. I just, you know, maybe that’s cutting room floor stuff like HBO’s, like, guys,
Paul Ford: do it. What they did is
Rich Ziade: can’t do 20 minutes of PowerPoint. What
Paul Ford: they did is they have filmed four seasons of offsites, essentially like, [00:06:00] you know, when, when everybody goes and talks and really gets it all out on the table.
Yeah. Yeah. The other 99% of the work happens in, in, in in bad decks. Yeah. That are just like, um, you know, 2025 vision cruise ships, you know,
Rich Ziade: they’re not gonna cut to a scene. It’s like, did you see the fees
Paul Ford: Exactly. Tom Wosk is like the perfect consulting client actually. Yeah. Because Tom can’t make a decision for himself in any way.
He’s just constantly terrified and vulnerable. There
Rich Ziade: are a lot of people in leadership who have consultants.
Paul Ford: Tom would have a team of 20 people creating decks for him that he, hundred percent that he can then run back to the family. Yeah.
And the family has to sit there and watch presentations and, and decks that have been created that are presented by senior leadership, but created by, by consultants.
So when you’re watching it, for me, there’s this enormous vacuum of the actual incredibly boring way. They want to make capitalism exciting,
Rich Ziade: experience and they want to make it [00:07:00] trivial and emotional.
Yes. Uh, and meanwhile, when a decision gets made, we’ve been there.
Paul Ford: It is. It can start trivial and emotional, but then what happens
Rich Ziade: trivial cuz people are like, I like you, I will buy you.
Paul Ford: Yeah.
Rich Ziade: And they’re like, he loves me. That’s great. And then the slog kicks in of like due diligence. So, so let me set you up here. Right. So the consultants have been swarming and swarming and they’re, they’re billing and they’re doing good. They have nice houses.
Paul Ford: They’re, you know, they have large apartments. Not as nice as the people on, on succession, but Nice. And then it’s time for a company to buy another company.
Rich Ziade: And it’s a whole, a whole world kicks
Paul Ford: in and now the real money gets made cuz there’s a transaction, a giant transaction’s gonna happen and a percentage of that transaction is gonna go to bankers, consultants, and lawyers.
And this is where the actual like sharks show up everybody else’s amateur
Rich Ziade: Absolutely.
Paul Ford: And so, yeah, so, [00:08:00] so
Rich Ziade: and it’s brutal. It is
Paul Ford: buying things on succession. What, when you look at that, what do you think is missing?
Rich Ziade: I mean, uh uh, we used to get called in to do technical due diligence on stuff that was being bought. Stuff that was being bought for hundreds of millions of
Paul Ford: So how long does that take?
Rich Ziade: It could take months. Yes. It could take months. And it’s a grueling
Paul Ford: exhausting. You’re looking at code bases. Okay. How big is technical due diligence as part of the overall transaction?
Rich Ziade: actually small,
Paul Ford: So, so think like hundreds of people looking with a dental pick and,
Rich Ziade: And, and, and what, what is ironic about that, or counterintuitive maybe is the better word, is that both parties want to get to close, they want to finish the deal, right?
But you have this other set of parties, accountants, lawyers, not bankers. Bankers are incentive to close cause
Paul Ford: That’s right. Cuz they, they get the active percentage. They’re not billing hourly.
They actually, they want the biggest payday possible. That’s
Rich Ziade: right. That’s right. And so there’s consultants that [00:09:00] come in the mix that the thicker the deck, the thicker the binder for the deal, the more they get to bill you.
And so all of that, that sort of love letter that started the whole thing is way off in the rear view mirror at
Paul Ford: And the really big ones, you’ve also got government,
Rich Ziade: and you might have government and you might have to get
Paul Ford: I mean, if, if you told me that a thousand or 2000 people touch a major transaction like that, I would be like, yeah, of
Rich Ziade: A hundred percent. A hundred percent. And, and, and
Paul Ford: so I mean, let’s play it through like, you’ve got, you, what do you hire?
So you’ve, we’re back to consultants actually. Why? I’m about to buy a company. Mm-hmm. I’m gonna hire McKinzie. The, the bluest blooded of all the
Rich Ziade: blue. I need to validate.
I need to validate that the revenue they got is real. Mm-hmm. They’re not lying.
Paul Ford: Mm-hmm.
Rich Ziade: So I’m gonna have armies of lawyers look at every single contract they’ve ever signed. I’m gonna have armies of accountants look at accounts receivable. Check their, their bank accounts, the amount of money owed outstanding.
Paul Ford: Look, you and I [00:10:00] sold a company. We had things real buttoned up. We had HR and accounting in from day zero, and it was like, do you have receipts from that coffee you bought seven years ago?
Rich Ziade: You feel like a failure.
Paul Ford: Oh, it’s so bad.
Rich Ziade: What
Paul Ford: Versions of every contract is there. You know, they,
Rich Ziade: What made me feel good
Paul Ford: that never existed and then demand them.
Rich Ziade: absolutely. And, and what made me feel good was when the bankers would tell us, you guys are actually pretty
Paul Ford: Yeah,
Rich Ziade: we’ve seen way worse. Right. And that makes you feel
Paul Ford: So we were a little baby company in the little baby woods. Imagine a like 6 billion. I’m gonna buy a media firm. So, so when it’s like we’re gonna go buy whatever, yeah, that’s a complete, and we’re gonna go have like dinner with the families and Bubba, they
Rich Ziade: They are capturing, I think, the spirit of the handshake,
Paul Ford: The first, they’re getting that first 2%. Yeah. But then there’s a slog, 98% slog. That actually completely changes the nature of the organization cuz everybody’s aware of it. It leaks out.
Rich Ziade: It’s, it’s, it’s, [00:11:00] and it’s, it’s not romantic at all.
Paul Ford: No
Rich Ziade: Closing is
Paul Ford: you know what it is.
Rich Ziade: final day. You get like, oh, we’re done.
Paul Ford: If you’ve ever bought a house and you get, you fall in love with the house, you’re like, I can’t wait to move in there. Yeah. And now come, you know, the seller broker, the buyer broker closing. Yeah. And they’re like, you know, uh, you said, and then it’s did, you said that you were gonna install those lamps,
Rich Ziade: Yeah. All of it. Yeah. Okay, so one was no army of consultants. Two is m and a is seen as like a casual family process instead of an excruciating accounting nightmare with lawyers involved. What’s number
good that we’re not the producers of this show. It would’ve been really boring. Absolutely.
Paul Ford: the worst and least watchable program.
It would be, it’d be like watching spreadsheet it. It’s like
Rich Ziade: episode four accounting,
Paul Ford: It is. It’d be like watching Excel influencers.
Rich Ziade: Yeah, exactly.
Paul Ford: But this is excellent. Let me [00:12:00] just like as a metapoint. The absence of Microsoft Word, PowerPoint and Excel as stars of the show is, is actually really problematic to me.
Like, like Microsoft should have been in there.
Rich Ziade: Not even that. There’s nobody even turning to anyone saying, did you put the Dropbox link in or do you have the file?
Nobody, I’ve never seen a USB stick get handed over,
Paul Ford: No. They did pee on a, on a phone once cuz the app was bad.
Rich Ziade: Oh, right, right, right, right. That
Paul Ford: So that was at least, but but even there, that’s not accurate credit
Rich Ziade: to them. It’s all entertainment
Paul Ford: I’ve never seen anyone urinate on a device to, to demonstrate the quality of an app. May, maybe it happens. All right. What, what’s your third?
Rich Ziade: The third is a little more on the human side. We’re sitting here flexing our consulting backgrounds. Um, on the human side is, um, you’ve got, essentially the structure of the show is a bunch of kids are fighting for power and ownership of this conglomerate because
Paul Ford: Mm-hmm. He’s
Rich Ziade: the founder, the old man, Logan, is older and wants to step down, and he’s [00:13:00] watching these kids just sort of, Pull on his pant leg and say, Hey, I’m the smartest one.
And it’s so casual. And if you look at actual succession, um, founders love their thing more than their children.
Paul Ford: It’s true. They wouldn’t express it that way, but they’d be like, these are two separate worlds. And I would love to see it line up cuz I love my son or daughter,
Rich Ziade: But it is them.
It is an ex, it is a form. What people don’t realize is companies that are founded that reach a ton of success are literally a form of expression of the founder.
Companies succeed is because people become obsessive about them and it becomes the ultimate judgment of themselves, right? As leaders and as founders and whatnot. And so when you see, you know, there’s a lot of great lines in succession and a lot of them are really around his frustration, the founder’s frustration with how
Paul Ford: for,
Rich Ziade: how, how?
Short, everyone is [00:14:00] falling in terms of internalizing what the thing is. It’s always like, you’re not even serious. Like you’re not even legitimate here. And what he’s really saying is like, not that you’re dumb, it’s just that you’ll never get it. You’ll never
Paul Ford: there’s a lot of conversation about like, he’s just not a killer.
Rich Ziade: it’s not a killer.
And you just, you know, this is, you think this is a toy? Like, and it, and what that is, is that person A, not wanting to let go. People don’t want to
Paul Ford: Well, one thing they get right about the, the, the character I think is that it’s not just a he, he can’t let go because it all came outta him.
Rich Ziade: him. He can’t,
Paul Ford: and, and for him, they go back to his like, crappy Scottish childhood at one point. Yeah. It’s not really a spoiler. Right. And he’s just like, you know, looking at, at that part of his past and you can see like everything that he built comes out of that crappy little house.
And his kids have been born on helicopters. Yeah. And so the con, there are no consequences for him. Everything is a profound consequence. I think they get that part right.
Rich Ziade: right. I think they get that part right, I think.
But I think what they get wrong is, is, I mean, the kids are like [00:15:00] dodo birds. Like it’s a really comical, like they’re smart, they’re bright kids, but then nobody’s doing any of the work. Everybody’s looking for the big shortcut. And the truth is legit founders would never let
Paul Ford: Well, let’s
Rich Ziade: they’re not gonna let that happen.
Paul Ford: happen. You and I are co-founders. We have very little interest in raising our children into our companies. That’s not really our goal. I mean, if they want, if they’re interested in it.
But, but let’s be that for a minute. Let’s actually, so Rich, you and I, uh, we have this company aboard, it’s the sponsor of this podcast. Let’s say it, let’s say all of our dreams come true and it’s a giant internet platform that everybody loves. And now we’re planning a, a next. Generation. Yeah. First of all, it’s beautiful as co-founders, cuz now our, both of our children, like, like, like your kids and my kids would have to do kid out.
So let’s put that aside. But let’s say, uh, we’ll make up a name for your kid. We’ll call him, uh, Billy. Billy, Billy or Sally. Okay. Our, your two kids. And. Assume that I’m not worried about this. Let’s just like not have any weird dynamics in this. [00:16:00] You want them to take over the company. Now, what happens
Rich Ziade: 25 years of apprenticeship?
Paul Ford: of all, you gotta go get an mba. Or or equivalent or go be a lawyer or go like, you have all the resources in the world and so you better go get a fundamental professional grounding. Yeah. Right. So there’s that. Like you’re not, you know, like you can’t be COO of this company unless you are also a lawyer.
Rich Ziade: yeah.
I mean, look, succession is, is painting this as like a quasi monarchy, right? Like that’s the whole point. Which is like, wait, I was born into this. Obviously
Paul Ford: but there’s no way. There’s no way that Logan, as a character would risk the foundation of his company by putting Roman in his c o o if this was real life.
Because unless the kids that succeed in these worlds are the ones who essentially get over credentialed, they think they’re gonna earn their parents love. It’s still pathological. Yeah,
Rich Ziade: Yeah, yeah, yeah.
Paul Ford: but like they get over credentialed so that they are, they don’t have to prove themselves every day in the role because otherwise [00:17:00] everyone is just like, you’re a joke.
I’m gonna, and everybody,
Rich Ziade: that too. That’s a terrible thing. Right.
Paul Ford: Well, there’s a fun, there’s a fantasy of imperial power inside of organizations. And yes, if you’re the founder and you created all the money and you are just an absolute monster, you can have imperial power. But the kids coming in, what they don’t show, those kids get dropped in.
They kind of get air dropped into these rolls throughout the seasons. No one would take them seriously at all. It wouldn’t just be like they’d undermine them. They would just ignore them completely.
Rich Ziade: Yeah. Or or, yeah. En route around them
Paul Ford: and they would be, and that doesn’t happen actually. They get into these roles and then suddenly the CEO is like, all right, I’m gonna partner with you.
And so it wouldn’t even happen. She’d be like, all right, I’m gonna create a basically a play pen for
Rich Ziade: it’s not that exciting.
It’s not a soap opera at all. It’s actually pretty boring. And,
Paul Ford: this is the thing, like Roman is a character his entire life would be looking at spreadsheets.
Rich Ziade: you’d have to pay those dues,
Paul Ford: right?
Yeah.
Rich Ziade: And, and, and you do, you pay those dues because for two reasons. One, you want to get it right, and two, you also don’t like, it’s a horrible feeling to feel like you [00:18:00] just took a shortcut and like cut the line and nobody respects you, right?
Like for, you know, here it’s ruthless,
Paul Ford: Well, but let’s also be clear like, Those roles are important and they result in billions of dollars of transactions happening around them.
And so there’s no, and if you put incompetent people into those roles who don’t execute, you do material damage to the company and the shareholders get upset. So they, there’s this whole fiction where, You can move the the children around like chess pieces and get certain outcomes, but the reality is you’re like one mistake away from a New York Times business profile that causes your share price to implode like Roman alone, who is like the smartest of the kids in my opinion. Maybe
Rich Ziade: maybe
Paul Ford: Roman alone would’ve resulted in like a horrible Andrew Sorkin profile in which the whole of the company loses about 20 billion in shareholder value. At which point he’s not on the chessboard anymore, right. He goes home, he goes back to like [00:19:00] some big apartment. So, so there’s like a fundamental mismatch between.
The awful, excruciating boredom and professionalization that these children would have to perform in order to get daddy’s love and where they are to be interesting characters in the story.
Rich Ziade: It’s funny, and I want to close it with this observation about how organizations strangely optimize for the best leadership automatically. Almost. Um, you know, there’s the classic mail room store. I started in the mail room and I became ceo, right? And what that is, is, is very anti-political in nature. And that is because the organization. You would think would have mechanisms that measure success and performance, right? Like I’m, I’m, I’m a great sales leader regionally. Then I became a great sales leader in North America and I became head of global sales.
Paul Ford: a little politics, but mostly merit.
Rich Ziade: Mostly merit because people all are on the same ship and want to see it do well.
Paul Ford: that’s the theoretical narrative
Rich Ziade: That’s the [00:20:00] theoretical. No, no. There’s some that don’t do that. Yeah. And they suffer. Right. Um, there’s the really slick interview of the new leader who’s supposed to come in and turn it around and they, and they fail within six months. Right. But a lot of times, organizations as sort of these like
Paul Ford: com
Rich Ziade: compositional organisms of that are.
That have a, an immune system that sort of rejects people that like, okay, you get three strikes and then you’re not gonna have that much responsibility. You’re hurting the whole thing. Right.
Paul Ford: Here’s the thing, you could never have that much objectively, that much drama at the top of an organization and have, and not pay a tremendous material price.
It filters down
Rich Ziade: and, and, and when people start to feel the ground shaking, it sort of rejects. The host rejects the, the, the virus like it, it’ll get rid of it. It’ll, it’ll marginalize it. If it’s the kid, they’ll get like some island roll, like just overseeing some fringe thing that [00:21:00] can’t do more damage if it’s the kid of the o of the founder or whatever.
But the organism. The organism, and I say organism cuz it is kind of like one, right? It’s sort of like an immune system.
Paul Ford: I always think of the body rejecting the transplant, right? Like if, if you get a new kidney or a new liver, the body might go like, I don’t want it.
Rich Ziade: yeah, that’s right. That’s right. And, and you know, can you have bold innovation and whatnot coming from the descendants?
I, I, I don’t know. I don’t know if Hershey Park was the idea of the founder or the idea of the kid or the founder. I think the founder had no kids, if I’m not
Paul Ford: Um, well, you know, that’s an interesting thing that you bring up. I’m about to. We’re just gonna have a digression right now cuz you can’t bring that up and I don’t have this digression.
Rich Ziade: well kick. Tee up the next podcast.
Paul Ford: So, um, Hershey, the Hersh
Rich Ziade: loves chocolate.
Paul Ford: I know the Hershey Chocolate Company really well because I went to the boarding school created by the founder of Hershey Chocolate. Her, um, Milton Hurt Milton Snavely Hershey,
Rich Ziade: Mm-hmm.
Paul Ford: uh, could not conceive with his wife Fanny.
Rich Ziade: or
Paul Ford: Or [00:22:00] Franny, I can’t remember.
But, uh, they instead founded a school for children of limited means.
Rich Ziade: And you went to that school at
Paul Ford: point, orphaned and then it was later expanded.
Rich Ziade: This is, I know, I know this. I’m aware of this, and I think this is a wonderful topic about what you learned in that experience.
Paul Ford: know, we could talk about that.
That’d be interesting.
Rich Ziade: See now look, we, we, we took, we went from succession, which is kind of gross, all the way to wholesome chocolate bars.
Paul Ford: Yeah, well that part’s a little tricky, but yes, we could talk about that. Anyway, so succession, we’re gonna continue watching it. This is the last season.
Rich Ziade: Last
Paul Ford: It’s the on
Rich Ziade: are sad. It’s
Paul Ford: the only, uh, TV show I’m kind of committed to, frankly. Yeah. And, uh, I’m curious to see how they wind it up. It’s been a hell of a hell of a ride so far. I haven’t seen the last couple
Rich Ziade: look, this sounds like criticism, but it’s a very entertaining
Paul Ford: Oh no, it’s
Rich Ziade: just delicious umami in your face.
Paul Ford: I, I have a high tolerance for boredom. Everything we just described, I don’t think I need to see it in a TV show.[00:23:00]
Rich Ziade: Exactly.
Exactly. Um, who is this podcast sponsored by?
Paul Ford: Rich. I’m so glad you asked. If you go to a board.com, you’ll see a, uh, a little website. We’re now in, um, late, oh no, it’s May, it’s May. We’re in May, uh, 2023.
When you listen to this, Go sign up and give us your email. A board is a tool for managing all kinds of things in your life, but especially the things that you see on the web, the products you wanna buy, the articles you want to read, um, it puts them in, it makes it really easy to import them and put them into a beautiful format.
That’s really fun to look at with your friends with a small community. So I cannot wait. I’ve been using it all day every day. I can’t wait to share this thing with the world, frankly, and that, that sounds like marketing. I can’t wait
Rich Ziade: It is marketing.
That’s okay. Marketing’s
Paul Ford: Yeah. Is it, it’s okay.
Rich Ziade: aboard.com. Sign up and, uh, spread the word about the podcast. I’m Rich Ziti.
Paul Ford: I’m Paul Ford.
Rich Ziade: This is Ziti and Ford Advisors. Uh, [00:24:00] follow us at Zzi Ford on Twitter and ziti ford.com. Thanks everybody. Have a lovely week.
Paul Ford: hello. At the audi ford.com.
Rich Ziade: Yeah, send us mail bag mail.
Paul Ford: Can’t forget that. Bye everybody.
Bye.