Margaret Heffernan
Margaret Heffernan was born in Texas, raised in Holland, and educated at Cambridge University. She worked in BBC Radio and TV for 13 years, where she wrote, directed, and produced documentaries and dramas. She also produced music videos with the London Chamber Orchestra to raise money for Unicef’s Lebanese fund.
In 1994, she returned to the US, where she served as CEO for InfoMation Corporation, ZineZone Corporation, and iCAST Corporation. She was named one of the Top 25 by Streaming Media magazine and one of the Top 100 Media Executives by The Hollywood Reporter.
Margaret has published five books: The Naked Truth: A Working Woman’s Manifesto (Wiley, 2004) and Women on Top: How Female Entrepreneurs Are Changing the Rules for Business Success (Penguin, 2007). Her third book Willful Blindness (Simon & Schuster, 2011) was described by the Financial Times as one of the most important books of the decade. A Bigger Prize (Simon & Schuster, 2014) looks at what it takes for individuals and organizations to be truly creative and collaborative. In 2015, TED published Beyond Measure: The Big Impact of Small Changes, which looks at the defining characteristics of sustainably innovative organizations. Margaret’s TED talks have been seen by over 8 million people.
Margaret mentors global businesses leaders and writes for the Huffington Post and the Financial Times.
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The Internet bubble burst. We had always known it would. But when it finally happened, between 2000 and 2002,1 everyone looked shocked and confused. Well, almost everyone. I knew exactly what would happen next. Businesses like mine, well-funded by a publicly traded company, would come under huge pressure to cut costs. Salami cutting, we called it. Thin slices. More thin slices. I’d seen how this played out in recessions. It was impossible to protest against small cuts – after all, every company has some fat it can afford to lose. But that’s just the start. It goes on. And on. And on. Demoralizing. Debilitating. All the while, credibility and trust decline; the only growth areas are cynicism and black humor. Finally, these companies become what venture capitalists call the walking dead: productive enough to stay alive, but never robust enough to be valuable.
I’d seen it often and I dreaded it. So, with my CFO, I tried to reconfigure our business in such a way that it could grow and thrive in the new environment. We didn’t lack the nerve to imagine a radically different company. My partner and I even modeled a company with neither of us in it. Why? Because I believed then and I still believe now that the job of a leader is to serve the business. Not oneself, not friends or families or shareholders – but to serve the idea and the people on which the business depends.
We couldn’t do it. With all the mathematical, financial, technological imagination, nerve, and finesse we mustered, we could not construct a business model in which the company honored the investment of funders, employees, and customers. We spent months on planes, in ugly corporate meeting rooms, trying to find corporate parents who might find enough value in what we did to stomach the losses. We failed.
So, I went to my chairman and investor with an unusual request: shut us down. Now. He was stunned. No entrepreneur, he told me, had ever asked him to do that. Entrepreneurs typically will fight for the life of their company to their last dying breath. Was I a quitter?
No, I said. I’m not a quitter. If I thought we could succeed, I would fight until my last breath. But I could see only death by a thousand cuts that would destroy my credibility, wreck the pride and passion of my workforce, and inevitably breed disappointment, frustration, and anger. That wasn’t the business I was in or wanted to be in. And as CEO of a publicly traded company, I didn’t think he could, with integrity, continue to invest in a company whose own CEO could not see a way forward. So, he was perfectly at liberty to fire me. He didn’t want to do that, either.
My CFO and I went back on the road searching for a strategic investor; it was our only hope. All the time we were doing this, business as usual had to continue. Employees had to stay focused and keep building the value we were trying to rescue. I had a super-smart bunch of colleagues. Some had built one of the first-ever Internet browsers. Another had sent one of the first emails in history. Their genius had made our product remarkable and brilliant. I loved them for it and they loved the company because it had given them opportunities to discover and demonstrate their immense creative capacity. I owed them respect and honesty.
As I left my chairman wrestling with his admiration for what the company had achieved and the remorseless logic of my argument, another question arose: What should I be saying to my employees? I was urged to keep mum, to say nothing. It was temptingly simple. If I’d had an office to hide in, I could have stayed there, or on planes, and hidden the truth of where we were. But I’d always worked in the center of the office and hiding had never really been my style. So, I told them the truth: where we were, what we were trying, what might happen next.
I was strongly urged not to do this. I was warned against being too honest. Some of my investor’s bureaucrats adopted a patronizing tone, telling me that, having worked outside of the US, I was probably ignorant or naïve about levels of violence in America. I didn’t understand the risks I was running of backlash from disgruntled employees.
I didn’t care. I’ve always been honest with people I’ve worked with and this struck me as the wrong moment to change tack. I also have always believed that if you treat people as adults, they are more likely to behave that way. Many men told me I was naïve.
In the end, we couldn’t find a strategic investor. I went back to my chairman: You should close us down – or fire me. His board urged him to cut his losses and close the business. Reluctantly, he concurred. The day we had that discussion was sad for both of us. I’d won the argument. We’d both lost a business we loved.
Then I had to break the news to all the phenomenal people I’d hired over the years. The one concession I made to those who had been so worried about my truthfulness was that I allowed them to install a single security guard in our company meeting. I explained where we were, what we’d tried, and where we now were. There followed questions all US companies expect: about healthcare, pay, time frames, and what would happen to our customers, partners, and suppliers. This was a grown-up, professional discussion, after which most people went home, often together, some via a bar. No one was violent, but everyone was sad.
Then, in the weeks that followed, something remarkable happened. Using the office to conduct job searches and stick together with their colleagues, employees would come in after interviews and be glowing: talking about their work in the company made them see just how much they’d learned working there and how exceptional their achievements were. Talking about the past made them proud of themselves and their teams. Instead of feeling like failures, they all carried with them an aura of victory. Sure, the company was closing, but the experiences they had gained would remain with them forever.
Meanwhile, we unwound all the contracts and deals with partners, customers, and suppliers. Closing before we had to, we had the luxury of time and the money to do so honorably. Nobody who had done business with us woke up to find themselves shortchanged or let down. One business partner said he’d never had so much respect for a deal that failed. We became, and remain, fast friends. Reputations weren’t only preserved; they were enhanced.
Many of the brilliant people I worked with have gone on to create their own businesses. More than a few have continued to work together. Many stay closely connected, recommending each other for prime projects and choice assignments. And most still have and wear their company T-shirts with pride.
Intellectually and emotionally, this was the toughest time of my professional life. I found it harder to quit than it would have been to persevere. Like most entrepreneurs, I’m instantly inspired when told a goal is impossible. And I have a lot of stamina. But I came to realize that heroic actions, in this context, would be (as they often are) just a form of narcissism. True leadership required not doing the hard thing, but the right thing. Not to die trying, but to get everyone home safely. I felt then as I feel now: that the job of a leader is to do what is best for the business, for its people, and for the wider society it serves.
Today, I spend a lot of time with young people. They frequently ask me how they should think about their working lives and careers; these questions unnerve me. It is harder than it should be to recommend companies where I feel they will be treated with respect. I am challenged to identify responsible leaders.
But we need our young people to be optimistic and demanding, ambitious in the best sense of the word. So, I tell them that they always have choices. Whatever the work is, you can decide whether to do it well or badly. What you do does not define you – but how you do it does. Leaders are the people who dare to think for themselves. And they are everywhere.