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CNN LIVE EVENT/SPECIAL
"Global Business Influentials"
Aired December 20, 2003 - 13:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUSAN LISOVICZ, HOST: They're in the money and on the move. The front-runners for the top jobs at some of the world's biggest corporations.
Welcome to this special presentation from CNN and Time. I'm Susan Lisovicz. Over the next 30 minutes we're going to introduce you to some of the men and women staking a claim to the corporate high ground. We call them the global business influentials.
Coming up, hitting hard and talking straight. It's been said that Mel Karmazin is as blunt as a punch in the nose. A rare interview with Viacom's president.
Plus, selling beauty with brain power. Aerin Lauder, shaping the cosmetics dynasty. Why Estee Lauder advertising ace won't settle for just skin deep.
And senior vice president with 84 million bosses, Jeff Jordan of eBay reports to the CEO, but he answers to millions of registered users. Find out how he turned an online auction job into a bid for power.
Viacom's Mel Karmazin keeps things in his office that most don't. A telescope and a whip. The telescope, keep one eyed trained on top rival, General Electric, right across town here in Manhattan. As for the whip, let's just hope it's only a decoration. Karmazin He's a tough, blunt manager and he's not afraid to go head-to-head with the only person who outranks him at Viacom. Its CEO, Sumner Redstone.
HOWARD STERN, RADIO TALK SHOW HOST: He said we could do it together.
LISOVICZ (voice-over): Howard Stern, Sponge Bob and Dan Rather all answer to him.
UNIDENTIFIED MALE: This man is a driver.
LISOVICZ: And Wall Street reveres him.
UNIDENTIFIED MALE: Talented, brilliant, what shall I say about him, Mel Karmazin.
LISOVICZ: At 60-years-old, Mel Karmazin, president and CEO of Viacom, is leading one of the most successful media companies in the world.
MEL KARMAZIN, PRESIDENT AND CEO VIACOM: The standard that I have is, I don't want to do something that's pretty good, because, in my opinion, when you're searching for excellence, pretty good is really pretty bad. So pretty good is just not enough.
LISOVICZ: While or conglomerates are dealing with the casualties of bad media merger, Viacom thrived since acquiring CBS and Kramazin three years ago.
JESSICA REIF COHEN, SENIOR ANALYST, MERRILL LYNCH: Having Karmazin come into the corporate office at Viacom was a powerful change for the company. And that's actually why they're very different than some of the other mergers, because it was very, very strong management with a vision.
LISOVICZ: A vision that's turned out hits like "Survivor," "Lara Croft: Tomb Raider" and MTV's "Punk'd." Viacom's properties are some the most well known in the country, Paramount, CBS, MTV, Simon and Schuster, Infinity Broadcasting, Nickelodeon and Blockbuster Video.
SIR MARTIN SORREL, EXECUTIVE DIRECTOR, WPP GROUP: He has an understanding of the business. Not just in the point networks but from the point of view of the industry as a whole.
LISOVICZ: But it hasn't been easy. His sometimes acrimonious relationship with chairman Sumner Redstone has made headlines. And with Karmazin contract up for renewal, investors and industry insiders alike were anxiously waiting to see if he'd stay with the company.
LISOVICZ (on camera): Was one of the tough decisions you made this year reupping your contract?
I can tell you that Wall Street, anybody who held Viacom shares, breathed a sigh of relief when you decided to stay.
KARMAZIN: The decision to stay at the end of the day became a very easy decision. And, you know, I've said this before, and it is true, I look to see what company -- I'm not suggesting I could have gotten a job in another company, but I took a list of the 500 largest companies in the United States, and I could not find a place that I would rather have been than Viacom.
LISOVICZ (voice-over): These days, Karmazin describes a relationship with the chairman as very good.
KARMAZIN: You shocked me with that (UNINTELLIGIBLE) introduction.
I think this is a huge company. I think that we have this -- there's plenty of room. Plenty of room for Sumner. There is plenty room for me. And there's plenty of room for the ambitious management team that we have.
UNIDENTIFIED MALE: Are there any other questions? LISOVICZ: He jokes that the Viacom deal was something he'd been waiting for since his Bar Mitzvah, and it seems working towards for almost as long. The son of a New York cab driver, he grew up in a housing project in Long Island city. It was the summer heat and his high school typing teacher that drove him to the job that launched his career.
KARMAZIN: She asked me whether or not I wanted a job after school. And I told her I had a job after school. I was working at a factory, which I was. I was working in a factory packing batteries. And she said it was an air conditioned office, and it paid the same amount of money that I was currently making, which was $1.25, the minimum wage, and I took the job in the air conditioned office, $1.25. And it turned out to be an advertising agency. I had no idea what an advertising agency was.
LISOVICZ: He worked his way up to vice president and a few years later was require hired to sell radio time for CBS. Where his legend as a master salesman was born.
KARMAZIN: The boss came to me and said we're you're making too much money, we're going to cut your commission. I didn't like it, didn't know enough about the business, so I took. And the second time they did, and they said well, you're making too much money.
I don't understand, what's too much money?
I just didn't understand to much money was.
And I told them the next time they tried to do that, I would quit.
LISOVICZ: That's exactly what he did, joining another media company and eventually taking over Infinity Broadcasting which he built into the country's second largest radio group.
KARMAZIN: Instead of playing ten songs in a row on the radio, I want the Don Imus and Howard Stern and oh, wow, programming. And what made Infinity successful early on was our commit to special programming, not just doing the same thing that somebody else was doing.
LISOVICZ: In 1996, Westinghouse, new parent company of CBS, made Infinity an offer. Karmazin had taken Infinity Public four years earlier at $17.50 a share, sold it to Westinghouse as a premium $170 a share. A few years later, he was running it's whole company.
COHEN: When he took over, the TV stations, there was very wide skepticism, that a radio guy could run a TV station group. And fast- forward five years, he's running one of the biggest media companies in the U.S., and what they regarded as one of the best operators in the entire business.
LISOVICZ: While other media chiefs rose up the ladder through the creative ranks, which Karmazin referred to as arts and crafts, he's all business. DAN RATHER, ANCHOR CBS NEWS: You can't understand Mel without understanding how deeply he leaves in stockholder value, and how little patience he has for anyone around him who isn't one way or the other also thinking about stockholder value.
LISOVICZ: And when he thinks that's not happening, he doesn't keep quiet.
(on camera): Two quotes about you and your management style. Dan Rather said, "Mel Karmazin is as blunt as a punch in the nose. He's direct. But he has the ability to listen." Another quote from someone who didn't care to go on record, but it was published was that, "Mel will never stab you in the back. He'll stab you in the chest."
KARMAZIN: Yes. I don't know if I ever stabbed anybody. Sounds very violent tome. I'm sort of a sweet guy that would never be violent, but what you see is what you get. You're not going to come out of a meeting with me and not understand the message that I was giving you.
LISOVICZ: His current message is clear. With ambitious goals for Viacom and a healthy balance sheet, Karmazin's on the lookout for more acquisitions, and he's got the competitive streak in him to make it happen.
LISOVICZ (on camera): But you've said you want to buy G.E.?
KARMAZIN: But, no I can't G.E., but I do have a telescope focused on the CEO of G.E.'s office.
LISOVICZ: Jack Welsh, or Jeffrey...
KARMAZIN: Jeff Immelt now. I do get to see what's going on in that office. So I can...
LISOVICZ: What can you tell us? What can you tell us?
KARMAZIN: I can't tell you now, but stay tuned.
LISOVICZ (voice-over): With Mel at the head of Viacom, Wall Street will be tuned in as well.
LISOVICZ: Up ahead a business education that started in the cradle. Aerin Lauder was born into a cosmetics empire. We'll tell you how she's transforming it today.
And Air Jordan, eBay whiz Jeff Jordan is flying high. Find out how he helped the online auctioneer put the hammer down.
LISOVICZ: Aerin Lauder was learning about makeup long before she was old enough to use it, and today she's in charge of advertising for her family's cosmetics empire. With her combination of smart moves and smart looks, she's helping Estee Lauder to put a new face on an old success story.
LISOVICZ (voice-over): They've turned molds into icons. But now cosmetics giant Estee Lauder has a new face on the front lines of fashion. She's not just beautiful...
AERIN LAUDER, VP, GLOBAL ADVERTISING, ESTEE LAUDER: And this is the shot I've been telling you about today.
LISOVICZ: She's the brains behind the company's advertising.
A. LAUDER: And this is all the pure color line, which is very visual, very beautiful.
LISOVICZ: She's Aerin Lauder, granddaughter of the company's founder.
A. LAUDER: Well, it's interesting, because ever since I was little, I've always heard about, you know, retailers, department stores, buyers. There are certain words that most 7-year-olds don't even hear, but it's always been a part of my life.
LISOVICZ: Aerin insisted on joining the company right after graduating from Penn in 1992. She became part of the family team, joining her aunt Evelyn, uncle Leonard, cousin William and sister Jane.
A. LAUDER: Do we get like another 20 in today or more?
LISOVICZ: Today she's vice president of global advertising for the company's master brand, overseeing a multimillion dollar budget.
EVELYN LAUDER, SENIOR CORPORATE VP, ESTEE LAUDER: Aerin's role in the advertising for the Estee Lauder brand is a very crucial one, and it's a very pivotal one, because it's the perception of the consumer who reads the ads and who sees the television advertisements, that is what gives the Estee Lauder brand its image.
LISOVICZ: And to create image, Aerin had one of the best teachers around, her legendary grandmother, Estee.
A. LAUDER: My grandmother taught me many, many things at a very young age, and I didn't even realize she was teaching me. You know, she always really talked about the importance of taking care of your skin. She would say, you only have one face, take care of it. She...
LISOVICZ (on camera): That was kind of very European, right?
A. LAUDER: Very European.
LISOVICZ: American women really didn't care.
A. LAUDER: I mean, she really, you know, always take like the moisturizer, put it on your hands, really take care of your skin, and she really taught me about beauty as well as about style. I mean, I loved the way she dressed, and she always had like a great one piece of jewelry on. Whether it was a necklace, earring or bracelet or ring. She really understood the importance of accessories.
LISOVICZ (voice-over): Estee was the embodiment of the American dream. She started a makeup line out of her garage in 1946 and turned it into a $5 billion cosmetics giant that today sells 19 brands in more than 130 countries.
ESTEE LAUDER: I believe in it. And I believe everybody is lovely and they all want to see something of my new products.
LISOVICZ (on camera): Tell me more about your grandmother.
A. LAUDER: Well, she really is interesting, because she really kind of was a great mentor in the sense that you can do it all. You know, she worked really hard. She always looked exquisite. She went out a lot. She was a great mother, a great wife. She really, really represents the modern woman, I think.
LISOVICZ: At heart a great saleswoman, though, too? She wouldn't take no for an answer.
A. LAUDER: Completely. I mean, a very famous story of hers is when she had -- I don't remember what store it was that wouldn't take her seriously. Oh, you don't know what you're talking about. So she took the product and spilled it all over the floor and everyone walked in, they said, what is this amazing smell? And then everyone was saying it was (UNINTELLIGIBLE), and it was her natural kind of inexpensive way of sampling the product. And you know, there was so many stories like that. She was -- she's a genius.
LISOVICZ: I had heard that story from a reporter and I couldn't...
A. LAUDER: You can't believe it's true?
LISOVICZ: ... I couldn't find it in any of the research. Such a great story. She really had the smarts. You are your grandmother's granddaughter. I mean, you are selling. That's what your mission is, to sell product.
A. LAUDER: It's true. I mean, it makes me very proud.
Are they going to actually sit down or stand?
LISOVICZ (voice-over): Aerin is following in her grandmother's footsteps. Not only is she a wife and working mother of two, she's become a living symbol of the brand, modern and elegant. She's frequently seen in the society pages and fashion magazines. And like her grandmother, Aerin is determined to leave her mark.
ANNA WINTOUR, EDITOR IN CHIEF, VOGUE: She's always pushing. She's always trying to bring the new and the different. She does have to bring fashion and newness to Lauder. LISOVICZ: That newness is stamped all over the new spring ad campaign Aerin designed.
A. LAUDER: This is our new icon shot, and you'll be seeing it in all of our cosmetic counters as of January. And it's interesting. It's really 20s, 30s, 40s. It's a generational...
LISOVICZ (on camera): But they are also not airbrushed to death. These look like this is their actual skin.
A. LAUDER: It's real. It's real.
LISOVICZ (voice-over): Aerin put together that trio of beauty. It's the new global trademark of Estee Lauder. Multigenerational, and multinational.
In 2001 she lobbied to bring Carolyn Murphy (ph) on board with longtime model Elizabeth Hurley, and this year she made her boldest move yet, hiring the Ethiopian model Lia Kbete (ph).
WINTOUR: She's just a very serious, extremely attractive, pleasant, bright young woman. And to me that was a real moment for Aerin. I mean, it really showed me that Aerin has came into her own at Lauder, that she was able to introduce the first African-American girl to Lauder. Fantastic.
LISOVICZ: But Aerin's greatest coup may have been in choosing the person behind the camera.
A. LAUDER: When we were deciding to pick a new photographer, you know, only one person had been coming to mind. And it was Mario Testino.
LISOVICZ: Testino, Britain's royal photographer, is known for capturing the natural and simple beauty of his subjects, and Aerin is banking his skills will bring a new approachability to Estee Lauder's ads.
Testino shot the spring 2004 ad campaign in the south of France last summer. And the results so far have received rave reviews.
OSCAR DE LA RENTE, FASHION DESIGNER: Aerin certainly has all the right choices. You know, she knows -- she has an extraordinary feeling for fashion ad, and she has created that very strong image. Perhaps the strongest than Estee Lauder has ever had, in many, many years.
LISOVICZ: Aerin is hoping her new ads will tap the next wave of consumers.
(on camera): Where is the growth? Is it fragrance, is it international sales? I know hair products, for instance, has been a really good, solid performer for you, very quick. What's going on there?
A. LAUDER: Well, it's interesting. The growth is very kind of split between fragrance treatment and makeup. In the sense of business, you know, for example, in the U.S., we are having a lot of problems businesswise, international is very strong. Asia's a huge, huge growing market for us. And China's going to be very exciting.
LISOVICZ (voice-over): And analysts agree that Estee Lauder has room to grow.
LINDA BOLTON WEISER, VP RESEARCH, OPPENHEIMER: Globally, Estee Lauder, in the prestige segment, has about a 30 to 40 percent market share in both makeup and skin care. They have lower shares, only about 20 percent or so, in fragrance. So that's a good growth opportunity for them. And in hair care, their global market share is only about 5 percent. So that's also a good growth opportunity for them around the world.
LISOVICZ: And that's a job that will keep Aerin Lauder busy for years to come.
LISOVICZ: There is more ahead on global business influentials. Coming up, gaining power by giving it up. Find out how Jeff Jordan learned to back off a little and helped eBay to grow as a result.
LISOVICZ: When the dotcom dream went bust, the online auctioner eBay was one of the few start ups that managed not only to survive but to thrive. And an Internet veteran named Jeff Jordan helped it happen, building the world's biggest virtual garage sale into a healthy, growing business. But first, he had to get out of his own way.
JEFF JORDAN, SENIOR VICE PRESIDENT, eBAY: Hi. I'm Jeff Jordan.
LISOVIC (voice-over): When Jeff Jordan joined eBay, everything he learned about business was turned upside down.
JORDAN: When you're in business, you're starkly rewarded for making things happen and driving things, and in eBay, you can only drive things so far.
It has one bid.
LISOVICZ: A senior vice president, a head of U.S. operations for the company, he's been a driving force for one of corporate America's best growth stories of the decade. But he quickly learned that despite his title, he's not the one in charge. EBay's 84 million users are.
JORDAN: We are enablers, not doers. It's hard to, for an MBA to make that transition. You're used to doing and now your enabling. And your giving up control and power.
Our goals are really simple. We want to share ideas.
LISOVICZ: Giving it up to the millions of users who pawn everything from pez dispensers to used cars. And that's the secret Wall Street says has made eBay the darling of the Internet. In 2001, as Silicon Valley was turning into a dotcom graveyard, eBay was fast becoming a household name.
UNIDENTIFIED FEMALE: One of the current items on eBay...
LISOVICZ: Quite a difference from jordan the first job in the dotcom world. In 1999, he left his position as ceo of struggling real.com.
JORDAN: It was a model where we were spending $40 million in marketing to sell $40 million of revenue at a loss.
LISOVICZ: A familiar tale at the time. That's when he got a call from his old boss, Meg Whitman.
MEG WHITMAN, PRESIDENT AND CEO, eBAY: I called him up and said, you know, we have a fabulous company here. We have a ton of opportunity, and we need people like you.
LISOVICZ: But this was the booming '90s. As the Internet bubble continued to inflate, Jordan was fielding multiple offers.
JORDAN: Most friends were (UNINTELLIGIBLE), You'd turn down president of x.com or whatever it was in order to join a post-IPO company that selled collectible Beanie Babies.
LISOVICZ: Nobody's increbulous now. Since he's join the company it's grown from 400 to 5,600 employees and transactions are up over 700 percent to $23 billion a year. It's moving at a frantic pace, only matched by its head of U.S. operations. Around the office, Jordan is referred to as the Tasmanian Devil.
JORDAN: I had been accused of being high energy.
LISOVICZ: He's well known for being a weekend warrior on his mountain bike. E-mailing colleagues from the gym and his constant need to refuel.
UNIDENTIFIED FEMALE: He's got beef jerky. He's got raisins. He's got trail mix.
UNIDENTIFIED MALE: Zip lock bags of nuts.
WHITMAN: Kind of like the Tasmanian Devil, Jeff needs to eat a lot. He needs food to keep his energy level up.
LISOVICZ: Like Jordan, eBay embodies the energy of the dotcom era. Long hour, cubicles for everyone including senior staff, and funny antics around the office. But the grease behind the wheels is all corporate. Trained at Stanford Business School, Boston Consulting Group and the Walt Disney company, Jordan's management style is fortune 500 all the way. JORDAN: We have a monthly reporting book. We have daily reports, and if the days look funny, we can go into the, by the minute reports that let us analyze hats going on.
We love a better model. You know better than we do.
LISOVICZ: They find out most of what's going on form eBays users who are vocal, demanding and highly opinionated. In 2001, Jordan spearheaded one of eBays biggest mistake, introducing a checkout system that the sellers didn't buy.
JORDAN: Meg got an e-mail, what blankety-blank thought up with blankety-blank program, blankety-blank fire him! She sends it to me, with no cover. That would be Jeff. Here you deal with it. So, you get community back here.
LISOVICZ: They've had other problems too, hackers, fraud, site crashes and failed acquistions.
JORDAN: We tried different things. A lot of them we said over time they didn't work out like we wanted to.
LISOVICZ: Some have. Two of ebays most successful acquisitions were led by Jordan. Online e-comerse site half.com and PayPal, the payment service that now accounts for 20 percent of revenue.
JORDAN: Now the price tag was high, but it was a -- the strategy behind it was very compelling.
How much does this one cost?
LISOVICZ: A strategy jordan not only developed but also reaps the benefits of, because he's not just the senior vice president, eBay.
JORDAN: All right do you want Shaq cards. You want Shaq as a Laker?
LISOVICZ: Together with his family, he's also a seller.
KAREN JORDAN, JEFF'S WIFE: We have all of these boxes that are full of things that I'd like to give away to Goodwill or some another organization. He keeps saying no, I'm going to sell them on eBay.
LISOVICZ: And like most eBay sellers, he's proud about his feedback.
JORDAN: Great customer, would love to deal with again. A plus. Awesome seller was really helpful.
LISOVICZ: A description that also applys to his work ethic, helping keep him at the top of the auction block.
JORDAN: Thank you very much for coming.
(END VIDEOTAPE) LISOVICZ: That wraps up this special edition of "Global Business Influentials." Our look at some key people shaping tomorrow's corporate world. Thanks for joining us. I'm Susan Lisovicz.
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