It is said that working with friends can be very enjoyable as long as things are hunky dory, but even the best of friendships can be strained if a business starts to go south. Peter Grauer, a close friend of Michael Bloomberg, the founder of the media giant that bears his name, decided to take the risk and so far he says he is happy.
“He (Michael Bloomberg) said at the time, ‘The only way you would screw up our relationship would be if you screwed up the company’, and he was a little bit more blunt than that,” the chairman of Bloomberg L.P. said during a recent visit to Thailand.
Mr Grauer, who was celebrating his 67th birthday the day he was being interviewed in Bangkok, says that so far he has managed to take the company forward from where his friend “Mike”, still the 85% owner of Bloomberg, had left off.
“The good news is that since I’ve been in this position the company’s revenues have gone from just about $3 billion to about $8 billion this year and we’ve enhanced the profitability, free cash flow and reinvestment capabilities of the firm. So I have been able to keep my job, and every time we get a paycheque we’re all happy for you never take anything for granted,” he says.
It may not sound like the best operating philosophy but it’s the one on which Michael Bloomberg built his business and it’s the way Bloomberg operates.
“We all are perfectly replaceable,” says Mr Grauer, citing the example of Mr Bloomberg himself, who after winning election as New York mayor walked out of the firm and never looked back.
Mr Grauer, who first met Mr Bloomberg at a horse-jumping competition in which their daughters were taking part, was wooed by the billionaire to head the company soon after he became mayor. With Mr Bloomberg, set to complete his second term in office on January 2014, Mr Grauer says that there is no question of the billionaire returning to run the business.
“He has a personal view that it is always about looking forward and not looking back.”
But gaining the confidence of an entrepreneur is not an easy task, especially an entrepreneur such as Mr Bloomberg who has managed to build global business information and media service that rivals long-dominant companies such as Thomson Reuters.
“I have never ever thought about stepping into his shoes, but only of succeeding him and taking what he had built to greater heights and greater success,” he says in a down-to-earth manner, adding that all decisions in the company have been for the benefit of the company and for its founder.
“My aim is to make him the richest man in the world,” he adds, something that is not too far away given the speed with which Mr Bloomberg is increasing his wealth. Forbes magazine ranked him as the world’s 20th richest man with a net worth of more than $25 billion.
Mr Grauer says that he has the greatest job in the world for he’s working for a man whose friendship he values second only to that of his wife, while expecting little if anything in return. However, when asked if he would be interested in having a stake in the privately held Bloomberg L.P. in the future, he said, “I don’t have a stake in the firm but of course I do want one.”
Management style: Being humble and intimate with the people you work with is the key to success, Mr Grauer says, adding that a lot of his time is spent building relationships among the thousands of employees working for the group.
“I spend half of the time travelling around the world and I never go somewhere and not talk to the people in the local office there. I have a very simple rule that you can ask any question you want and I will do my best to answer as openly and candidly as possible,” he said.
This is something he takes to the heart. Even his office in New York, he says, is an open office where every employee who walks in can see him and, if he’s free and someone wants to talk to him, they can drop by.
“The location of my office is not to ensure that I have a view of the people to see whether they’ve come to work or not,” he says with a laugh, “but instead if people have something on their minds they can simply come in and talk.”
As for what he feels is the best way to move forward in the company, his view is that being a consensual rather than a dictatorial leader is better.
“All data supports that the more inspirational you are and the more humble you are, it is a much more compelling way to get things done,” he adds.
He is also a person who has been practising the “replaceable” theory of Mr Bloomberg, having appointed Daniel L. Doctoroff as Bloomberg’s president and CEO last year, handing the day-to-day duties of the company to him.
He also keeps a distance with Mr Bloomberg when it comes to matters relating to the company although any he will be consulted before any major decision is made.
Being number 2: Bloomberg as a firm has been the second largest provider of financial analytics in the market and this is something that Mr Grauer says has helped it get where it is today, but he is worried about the future as the company goes full throttle ahead against its archrival Thomson Reuters.
“It is a very important part of the psyche of Bloomberg, and I am worried that when we grow and our growth exceeds our competitor’s, what will happen,” he says adding that this is why he travels so much, to preach about how great companies could fall if they become complacent.
Mr Grauer’s own road to success was not strewn with rose petals and he at times has had to swallow his pride and jeopardise his friendships.
He started his career in Citibank in 1969 before heading to Donaldson, Lufkin & Jenrette where he rose through the ranks and founded DLJ Merchant Banking Partners and DLJ Investment Partners. Then in 1989 he quit to start his own firm, which after three years went belly-up.
“I failed, and most of the reason for the failure was out of our control,” he said. Even more humiliating was the fact that DLJ invited him to return to the firm but would not take any of his five partners.
“This meant that I had to acknowledge that I failed and also put our relationship with my partners (who still are very close personal friends) in jeopardy as I would have to go and tell them that I could go back to DLJ but not them.”
Apart from this, the detour he had taken to venture out in his own firm also meant that he had to sacrifice his position as head of private equity, as his boss said there were three other senior staff who has stuck around while he was away.
But Mr Grauer’s personal relationship skills meant that he made sure that he kept his personal relationship with the partners and eventually, he says, “we got over that phase”.
About the author
Writer: Umesh Pandey