Overcoming Business Challenges and Leadership: Dr John Malone's
story
Overcoming Business Challenges and Leadership: Dr John Malone's
story, Chairman and CEO, Liberty Media, Inc.
By Howard Edward Haller, Ph. D.
This groundbreaking leadership research by has received
extensive endorsements and enthusiastic reviews from well-known
prominent business, political, and academic leaders who either
participated in the study or reviewed the research findings. You
will discover the proven success habits and secrets of people
who, in spite of difficult or life threatening challenges shaped
their own destiny to become successful, effective leaders. The
full results of this research will be presented in the upcoming
book by Dr. Howard Edward Haller titled "Leadership: View from
the Shoulders of Giants."
The nine initial prominent successful leaders who overcame
adversity that were interviewed included: Dr. Tony Bonanzino,
U.S. Senator Orrin Hatch, Monzer Hourani, U.S. Senator Daniel
Inouye, Dr. John Malone, Larry Pino, U.S. Army Major General Sid
Shachnow, Dr. Blenda Wilson, and Zig Ziglar.
The data from the above nine research participants was
materially augmented by seven other successful leaders who
overcame adversity including: Jack Canfield, William Draper III,
Mark Victor Hansen, J. Terrence Lanni, Angelo Mozilo, Dr. Nido
Qubein, and Dr. John Sperling.
Additionally, five internationally known and respected
leadership scholars offered their reviews of the leadership
research findings including: Dr. Ken Blanchard, Jim Kouzes, Dr.
John Kotter, Dr. Paul Stoltz, and Dr. Meg Wheatley.
This is a short biography of one of the principal participants
who generously contributed their time and insight for this
important research into the phenomenon of how prominent
successful leaders overcome adversity and obstacles.
This John Malone's story: John Malone was born in 1941 into a
modest middle-class family in Connecticut. His father was, as
John described him, "a junior scientist and inventor," and was
the sole breadwinner in the house. His "mother was a supportive
wife and mother." John's father was gone nearly all the time and
"John rarely saw his father" (Robichaux, 2002, p. 22).
John qualified for a work-scholarship to a nearby,
well-respected preparatory school. John met the love of his
life, Leslie Ann Evans, when he was 17 and she was 15. After
completing high school, John attended Yale University in New
Haven, Connecticut on a work-scholarship.
For Malone three important milestones in his life happened in
1963: (a) He graduated Phi Beta Kappa from Yale with a
Bachelor's degree in Electrical Engineering; (b) he married his
steady girlfriend, Leslie Ann Evans; and (c) he accepted a job
as a systems engineer at Bell Labs (Robichaux, 2002, p. 26).
During our two-hour initial interview at his office in
Englewood, Colorado, John shared that he "took the job at Bell
because they would pay completely for my education all the way
through my doctorate in operations management [at John Hopkins
University] and pay me [a salary] to boot."
After completing his doctorate in Operation Research, John
continued to work for AT&T's Bell Labs. He presented to the AT&T
Board of Directors a massive and complicated mathematic model of
his own design, "proving that AT&T should make a radical change
in its balance sheet and shift its debt-to-equity ratio into
more debt." After the presentation to the Board the chairman
told him in essence that the AT&T Board would never accept his
radical idea. John was disillusioned, so he decided to quit
working for AT&T.
John soon accepted a position with the consulting firm of
McKinsey & Co., where he worked for two years, until one of his
clients, General Instruments, hired him to run their troubled
acquisition of Jerrold Electronics. Malone became President of
Jerrold when he was 29 years old. A disgruntled competitor who
was losing sales to Jerrold petitioned the Federal Trade
Commission, "alleging that Jerrold was trying to build a
monopoly by selling below their cost." John promptly compiled
all the information and proved to the FTC that the charges were
untrue.
John came to realize that even his hard-won respect "would never
be enough to overcome the ongoing internal political battles."
He began to know that he "would never be in line for promotion
to Chief Executive Officer of General Instruments."
Then, at age 30, John received and accepted an offer from one of
his clients, Bob Magness, who was the founder and chairman of
TeleCommunications, Inc. (TCI).
John took a "significant cut in pay" when he joined TCI, but was
eager to embrace the challenges of the new job and run "the
entire business as the new President and CEO." Malone's "first
crisis at TCI was a dangerous cash flow problem." Over the next
thirty years Malone fought many battles with other operators,
suppliers, local politicians, state and federal cable
regulators, and the U.S. Congress. Malone and his mentor,
Magness, battled their foes together.
The death of Robert Magness, the majority shareholder, created a
number of major obstacles for Malone, both personally and
professionally. Magness's widow and two surviving sons struggled
and battled with Bob's hand-picked trustees, who were trusted
TCI employees. Malone, knowing that Magness's shares were the
controlling interest in TCI, sought financial support from Bill
Gates of Microsoft and Brian Roberts of Comcast Corporation.
Magness's trustees sold Bob Magness's TCI stock, but the stock
sale was overturned in the Colorado courts. This court action
put the TCI stock and the controlling interest in TCI "back into
play." In 1997, "Bill Gates stunned the cable industry by
investing $1 billion in cash in Comcast." John recognized he
would not have Gates and Roberts as allies. Malone acted
promptly to protect TCI, his personal interests, and his control
of the firm.
In early 1998, John negotiated with Magness's heirs, "agreeing
to pay them $200 million for the right to vote Magness's stock
which they still owned." This creative move gave Malone the
control he needed to thwart the takeover bid of Roberts and
Gates. With the control of TCI secured, John then moved to spin
off as a separate affiliated company everything except the cable
business. This separate TCI affiliate was Liberty Media, which
controlled most of the programming and all the non-cable
interests. John was preparing to sell TCI's cable operations in
the very near future.
John finally sold the cable interest of TCI to AT&T for $58
billion, increasing his personal worth to over $3 billion. John
now sat on AT&T's Board of Directors. This brought Malone little
joy, for now he "had to watch as the AT&T Board made a series of
painfully poor and costly decisions." In spite of his
suggestions and many objections, "AT&T repeatedly made decisions
which materially devalued my AT&T stock." As a result, nearly
half of John's personal $3 billion net worth was gone.
Ultimately, Malone resigned from AT&T's Board of Directors,
selling most of his now significantly devalued AT&T stock. As
part of his resignation from the AT&T Board, Malone
"successfully negotiated to be able to resume the full-time
management of Liberty Media, as Chairman and CEO," a position he
still maintains.
I met with Dr. Malone, Liberty Media Headquarters, for just over
two hours in Englewood, Colorado. Dr. John Malone will continue
to make history in the cable and programming arena with his ever
expanding and successful firm, Liberty Media Corporation.
Copyright 2006