Adapt or Extinct
Why do successful companies wait until a crisis to change?
In Episode 74 of UnNatural Selection, Nic Encina speaks with Hans Gieskes, former Elsevier/LexiNexis/Monster.com executive and veteran of corporate turnarounds, about the forces that make organizations vulnerable… and the decisions that determine whether they recover.
Drawing on decades of experience across industries and more than 30 acquisitions, Hans explores how to distinguish a broken strategy from poor execution, recognize disruption before it's too late, prioritize scarce resources, and combine the innovative strengths of startups with the scale of established companies.
The central lesson: success can create the very inertia that threatens survival. Adaptation requires leaders to challenge assumptions, listen to the organization, and make difficult decisions while there is still time to act.
Because in business, as in evolution, yesterday's advantages do not guarantee tomorrow's survival.
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Nic (00:00)
Hans, welcome to a natural selection.
Hans Gieskes (00:03)
Yeah. Good to be here.
Nic (00:06)
of course, yeah. I I'm I'm really looking forward to this because you and I go back two decades now. we've known each other for a
Hans Gieskes (00:13)
Is it is it that long?
Nic (00:14)
it's been that long. Yeah. It's been mid to late to early two thousands. And and so obviously we've known each other for almost two decades and and and in full transparency, the whole reason for this podcast could be credited or or blamed on you, whichever way you look at it.
we were having lunch about two years ago when you recommended I write a book. And that led me down a path thinking about sharing ideas, which ultimately manifested in in this podcast, really ironically, by seeing a a bunch of squiggly lines on toilet paper and realizing that there's a lot of innovation outside of healthcare and life sciences that we can learn from and and cross pollinate across industries.
Hans Gieskes (00:57)
Yeah. Yeah, you always struck me as somebody who has that cross-polinization impact. You talk to people and you bring ideas across and are able to translate it into what they want to hear. And and that's why I said at the time you should really spread it out somehow. And and being a former publisher, I probably said write a book, but writing a book
I still read books. Most people only read McNuggets information. I'll only read whole books. But but I think you've done the right thing. A podcast is a nice format.
Nic (01:29)
Yeah, yeah, and it's worked out well. I've met some incredible people and I I try to work out all my kinks before calling upon you to be be on the show. So hopefully this will go along smoothly.
Hans Gieskes (01:38)
Yeah.
This is podcast, what number? How many have you done?
Nic (01:44)
I think this is we're approaching a hundred.
Hans Gieskes (01:47)
Wow.
Nic (01:48)
Mm-hmm. Yeah. I I released fifty last year and then I'm already about twenty or so into this season with a number about a dozen or so more already
Hans Gieskes (01:57)
Yeah.
Nic (01:57)
recorded. And so so yeah, it's it's approaching probably eighties or something like that, approaching a hundred.
So I I always kick it off with the same thing and obviously there's a lot that we want to talk about. but just to level set and and give people a sense of why you do what you do, Hans, could you let us know what need or impact drives your work?
Hans Gieskes (02:21)
I guess I like asking that question of a four-year-old why all the time, and why, why, why until they drive you crazy. And I also like fixing things. It's a little OCD probably, but I like fixing things. And I somehow found out that I can do that with companies and processes, and people actually pay me for it. So what's better than get your OCD obsession?
And get paid for it. But I think asking questions is also what drives me because I've learned you cannot lead people by telling them what to do or how to do things. What to do may be, but how to do is the worst thing you can do in leading people. But asking the questions why they do what they do, and if there are not better ways of doing what they do is a much better way, more stimulating as a leader.
than simply seeing them roll their eyes when you tell them how to suck an egg.
Nic (03:21)
Mm-hmm. Yeah. And and you mentioned there you like fixing things. So one of the big and we're gonna cover a bunch of different topics, but one of the key things that comes to mind to me that you've done so much in your career is turning companies around. And that to me is like fixing things. So when you know the thing is though, and I've been a number a number of startups that have gone well and have not gone so well, and the point where you need to turn things around.
It doesn't happen overnight, right? It's something that you could have anticipated maybe a while back, especially if you're looking at it through the lens of someone who's seen it before. So when I
Hans Gieskes (04:01)
Yeah.
Nic (04:01)
think about you and in in the context of what we're doing here, first of all, I'd love for you to give a little bit of insight into the turnaround process and what that means, because the audience here is very broad and they may not even know what that means. But one of the key things that I I think is really interesting is the analogy that I think about is
If I'm if I am on the surgery table with a cardiac surgeon above me doing like bypass surgery, and I could have avoided that, that surgeon might have said a couple of things like, Hey, don't smoke, exercise, don't eat, blah, blah, blah. And and I almost see you as that cardiac surgeon because you've done this so many times, you've probably have seen patterns that, look at companies that are going through turnarounds, and you could have been like, Man, you could have avoided this like two years ago if you would have done XYZ.
And so we'll go down that path. But first of all, can you just let us know a little bit about what the turnaround corporate turnaround looks like that world?
Hans Gieskes (04:57)
Well, it it's not unlike that surgeon. Often people wait too long to realize we have a problem and we need to do something about it. Because people don't want to know or they hope it's not gonna happen on their watch, or they are a established company, they ignore the innovation of a startup and disrespect the startup, it's just a bunch of kids, they don't know what they're doing, and they don't realize they have become the dinosaur that people laugh at.
And so timing is really important. And in most cases, when I've been called in to help companies turn around to transform, in some cases it was too late. And I have, unlike a surgeon, I can say, no, I won't operate because this patient's gonna die anyhow. With the company, I've said
Nic (05:43)
Yeah.
Hans Gieskes (05:46)
that I've turned down turnaround situations and say it's too late.
so you have to be brutally dispassionate about that, which is more difficult for a surgeon than for a turnaround guy. And I think the timing is so important because it's a fast-moving world. And if you realize or execution is bad, and I much rather fix execution than fix strategy, and I'll explain in a minute. Fixing execution is always against the moving target.
Somebody else is doing better execution and you have to do catch up and then overtake them. And so pace is really important and urgency is really important. but still, it's better than fixing a company that has the wrong strategy. Because if you think that the strategy of the company is wrong.
And somebody else has the right strategy, now you have to copy the strategy and then still execute faster and better. But fixable companies are companies that basically are doing the right thing, they have on the whole at least 80% of the right people in the right positions. And you can then fix execution in most cases. But I have turned down a number of situations where I said it's too late. You have put together a company by buying assets, they don't fit.
fixing them is going to take a lot of effort. You're better off basically selling the assets and closing it down. And I've I've done that. And sometimes my customers will say, No, we can't do that because it's on the balance sheet for millions of dollars. Well, it doesn't matter, it still sucks. And so that's it's important to be dispassionate in in that sense. And that's not easy because investors have bought something.
and told their call it their their limited partners. This is the greatest company. And then somebody comes and says, well you basically bought number four in the market and the execution sucks. It's gonna take time and money and probably a a balance sheet adjustment to fix all this.
Nic (08:06)
Yeah. What wha what got you into the turnaround business in the first place? Was there a key thing that got you? Because then you from there you went and did a lot of turnarounds. So clearly you developed a skill for it, but you don't just start
Hans Gieskes (08:17)
Yeah.
Nic (08:18)
by doing turnarounds.
Hans Gieskes (08:19)
Well b basically when you're young you you benefit from having good mentors in your life. And I was lucky when I was young to have a good mentor and he once told me early in my career, which he said, you are just like the bloody Japanese. You have no great original thoughts, but everything we give you you make better.
And I thought it was an insult to the Japanese and to myself, but in a way it wasn't, because this is like remember in the 70s when Sony and and Dutsan brought products to Europe and US, and you said, Well, this is dinky radio from Sony. They ended up owning the whole space. And the same with the car industry. And so I learned from that that they will go into the market and keep fixing it, keep improving it, and end up owning the market. And so
He made me realize it was not an insult and a kind of backhanded compliment. And I've never looked back. I also realized I would have been bored if they had said, we give you a really healthy, good company to run. So I always got divisions to run that needed big change, urgent change. And I've always enjoyed doing that. My first CEO position was of a $25 million business in the UK that was small.
and was only less than ten percent of the group's revenue. But I felt like a kid in a sandbox having so much fun and fixing it and having a good team and and outgrowing the rest of the group. So that's always fun to do.
Nic (10:00)
and it's not fair to say that it's no original thought, but just making things better because i I've never done a turnaround, but I I would imagine that quite a bit of creativity goes into going into a company that's like going like this and to go and figure out the fundamental business value that it creates and what the customer segments look like in markets and come up with a strategy to turn it around, as the saying goes.
and and make it into something that's actually operating at efficiency and delivering value back to its shareholders, right? So what in in those in those terms,
Hans Gieskes (10:35)
Mm-hmm.
Nic (10:35)
there's innovation that happens between the the lines there that maybe isn't as apparent, but what does innovation mean to you in the world of turnaround?
Hans Gieskes (10:46)
Well, in innovation i starts really before you look at the processes. It really says, do we are all the stakeholders part of making the analysis or is it just the shareholder and the CEO who decide where the company is, where it can go and how? And the minute you haven't really put in that process the customer's opinion
Regulators, management team, employees, not in a sort of democratic way, say you count the votes and that decides the direction. The CEO or the chairman was his CEO has to really be the one who gets all those opinions, weighs them, amalgamates them, and decides this is really a broad consensus enough to start moving. And the simple assessment: are we in great shape, in terrible shape?
are we what's the direction we should go in? There's so many variations, and if you turn out at the start of this process you don't have that consensus, people won't follow you because you're going to have to make hard decisions, we're going to stop certain activities, we're going to close down departments, we may have to lay off people. If you do that based on an assumption of where we are and where we're going, that's not agreed by most people.
You won't get support, it won't be executed well. So I think the innovation is really in having that very early, quick process to assess with the right impact from stakeholders where are we, how bad is the situation, how how sick is the patient, where we're going and how we're gonna get there. And then the rest is really a culture, in my view.
Of everybody, whether it's an accounts payable clerk or a product manager or a salesperson, to every day say, Can we do this a little bit better, a little bit faster, a little bit at lower cost? and that altogether will end up to pretty big improvement and will drive results. It's it's
Nic (12:53)
When
Hans Gieskes (12:53)
really in a turnaround you say, Well.
We could only develop one new product, then everything will be fine. It's always like
Nic (13:00)
Sure, yeah.
Hans Gieskes (13:00)
we have a bunch of products, we have to decide which have the most potential and which are redhead stepchildren. We should basically close down or sell, even though they were the previous CEO's hobby host. So we can focus all resources on the products that have the right opportunity. Triage is a really important part.
of incremental innovation because you can't fix everything. You can only fix so much because of the resources you have.
Nic (13:29)
Yeah, yeah, there's if there were a silver vo bullet, presumably the previous year would have done that, right? If it was that simple. it's it's probably usually a systemic thing.
Hans Gieskes (13:38)
Yeah, that that's true. And and triage is always hard because to your medical analogy, in in a battlefield situation, there's doctors who will put stickers on soldiers saying this one can be saved, this one not. And they have to make that decision, which is hard breaking if you have to make those decisions, but if not, they may waste their time and
I think CEOs have to do the same thing looking at an urgent situation like what can we fix? And if we can't fix it, can we use some of those resources to fix what can be fixed? and and that's those are tough calls to make and you need to be quick, you need to carry responsibility because maybe the decision is wrong, but you're still responsible and and and and liable.
Nic (14:29)
Yeah, it's it it sounds so complicated, right? Because when you if you're airdropped into a company that you've never heard of before, and I'm sure you do a lot of research beforehand, and if you're being sent in there by a PE firm or something like that, they probably give you a whole bunch of documents and research, reports and so on. But ultimately you're still showing up out of the blue. And I don't if you show up with the team or by yourself and work with a team that's already there.
But you really have to very quickly come up to speed on the history of the company, its market, its operations, the whole thing in order to make these decisions, right? Because they're all connected and you're making systemic changes. And like you said, you can't make them all. So you've got to figure out where the biggest bang for our buck that are gonna start course correcting this ship, and and probably start making some of those decisions.
You can't do it overnight because then it would be premature, but you also can't take two years because a PE firm behind you is saying, All right, Hans, the clock is ticking, right?
Hans Gieskes (15:28)
Yeah. No, but I think the the I I maintain that really is the new CEO the source of all wisdom and all ideas and and I don't I don't believe in star CEOs. I think in many cases the knowledge is in there in the first layer, second layer management team who have decades of experience in the market and in the company and in talking to customers, is just can the new CEO
Extract that information, filter the noise from what is right, and help pull together where we can go and where we should go. What I sometimes do, and I never go in with the team, it's just little old me, is I will try and meet with the direct reports to a CEO, which is typically 10, 12 people, and all of their direct reports. So basically about a hundred people, and even if the company has
3,000, 10,000 employees. If you can talk to each of those hundred people and listen to them, get a feeling for who are they, are they committed or are they already have one leg outside the door? And I always ask three questions. I always say to people: if there's only three things we can do and do really well, which are those three things?
And it's funny when you talk to a hundred people inside the company and ask them which are those three things, and I just write them down. There's huge overlap.
Nic (17:03)
Mm-hmm.
Hans Gieskes (17:04)
There's some outliers, but they will say it's the product or it's this part of operations or it's and and already there as the as the incoming genius, you have a huge
lag up because you have all that information you can verify it and see how can we put that together and so I I get the answers almost always inside the company already. It's really brought in in my view by the genius outside executive. But you have to be able to get the answers from the company, pull
it together
Nic (17:40)
No, yeah.
Hans Gieskes (17:41)
and then create the right culture of focus and discipline to execute.
Nic (17:47)
yeah. Yeah, if we go back to that cardiac surgeon, you probably could have gotten your answers by talking to a pr patient's family. And I'm sure they would have said, put on the Marlborough's and don't eat that, third portion of cheeseburgers.
Hans Gieskes (18:03)
Yeah, and and I think some of the analogy goes wrong in in medical because it's it's many doctors don't live very healthy lives as well.
Nic (18:11)
Yeah. Mm-hmm.
Hans Gieskes (18:13)
And so, I my my dad was a dentist, he smoked, my father-in-law was a doctor, he smoked, and he drank a little bit too much. And so it it's it's it's besides it, but I think you you
The analogy there goes wrong because it's it's more like does this clinic do the right thing and are we
Nic (18:35)
Mm.
Hans Gieskes (18:37)
following the right procedures and do we have the right process? course to say to a patient, if only you had lived more healthily in the last 15 years, that doesn't translate to a company. You can say to a company, why the hell did you let the startup come out of nowhere and take away
Your best customers, but it's too late, it already has happened. So, what you're gonna do about it to stop the bleeding and get back those customers.
Nic (19:07)
speaking of which I guess, going back to what I said a little bit earlier, are there patterns, you you mentioned that usually people internally have the top three things that that company could have done. But you having done this so many times, are there
Hans Gieskes (19:20)
Mm-hmm.
Nic (19:20)
usually patterns that you find happen more often than not with these companies that they stopped doing or were doing the wrong way that are so consistently happening that you're just like
Will you people just get your act together? Because if you just did these three things, you could avoid half of the turnarounds. is there an organiz organizational physical that every CEO should go through to make sure they don't end up in that seat?
Hans Gieskes (19:47)
Well I I think for starters no CEO should be longer in the seat than five years at the most. just like with NFL coaches, because I think COs have their own blind spot and their own hobby horses and they hire people that gel well with them.
and maybe sometimes they may keep people too long because they like them and they've and so I think it's good for CEOs every five years to get a new person that not every two years, every year who asks all the new questions. I think in most cases where companies have gone wrong,
It it may be a number of reasons. Maybe it was they lost focus, maybe they fritted away resources over too many things. In many cases, certainly nowadays, in the last 20 years, it's because a startup came out of nowhere, actually built what customers really like. Even though they don't make any profits and the product isn't all that good, they have the they look sexy.
And many companies I've known disrespect startups and ignore them at their peril. Just like many startups will ridicule big companies and say, those guys are dinosaurs, until the dinosaur basically steals their idea and executes better or crushes them. So I think both startups and established companies have to be much more dispassionate.
In looking at each other and deciding what can I do about you and what can I do with with what you've done, but I could do better.
Nic (21:33)
Yeah. Yeah. It's it it it sounds like one of the key things that companies stop doing is adapting. And that that's one of the core premises of this podcast, at least, is that one of the best things that a company can do, especially in this day and age with like we're in this hyper innovation stage and it's only becoming faster, it now compute is accessible to anybody.
software, you don't even have to write it anymore, it just writes itself and AI can do all kinds of translation and transduction and
Hans Gieskes (22:03)
Uh-huh.
Nic (22:04)
conversion and so on. That you a couple kids in college now can disrupt the biggest organizations. And so when I advise really big organizations, what I tell them is I'm not gonna come here and tell you what products to build and I'm not gonna tell you how to write code better, but I'm gonna try to structure you to become more adaptable. And that's I honestly I think it's the best thing that any company can do right now, especially the big ones, the incumbents.
is to be as adaptable as possible, to take ideas early, to experiment, to try to operate more like a startup. Obviously still with the operations and the processes and the scale that they do, but they can't just rest on their laurels and think, well, because we're printing money right now, it's always going to be this way, because then you put yourself in a situation where a massive disruption happens and now you're trying to
Hans Gieskes (22:48)
Yeah, but
Nic (22:49)
catch up.
Hans Gieskes (22:50)
it it's also horses for causes because it's easy to criticize a public company for being maybe too slow or not having gone there where the startup goes, but then you don't understand the role of a CO in a public company. You often as CO in a public company end up doing the wrong thing for the right reasons. you are under investing in product.
Not because you don't know it, but because the analysts are expecting X percent growth in earnings per share. And if you go to them and say, We need to invest way more in this product and we're gonna have lower profits for three quarters, the shareholders are running out the door, share price comes down, you lose your job. And so in in some cases
They're handicapped, or if you're a CEO of a private equity-owned company, you have pushing a ton of debt up, you cannot that easily make certain moves. So you have to work within the means that you have and then decide: okay, I can't compete with this.
Startup who has a fantastic idea because I have to invest it away in the PL. So
Nic (24:00)
Mm-hmm.
Hans Gieskes (24:00)
then you say, Well, can we buy it? If we can't build it, can we buy it? That goes to the balance sheet. So you have different ways of getting there. andor you need to get the urgency of the problems you see on the horizon into your shareholders' mind and say, if we do not go and do this.
Then in three or four quarters from now, you'll be asking me why didn't you go and do that? But it's not easy. I I don't know, I've from being private equity CEO or public company CEO or CEO of a division of a public company, they're all different positions from which you have to still answer the same questions to avoid getting on that operating table.
Nic (24:47)
yeah. And I I I I believe it. I I've seen how big organizations work and you're beholden to those quarterly returns and the dividends and the companies that invest in your company, they expect that return every single quarter. That also starts setting up obviously the PL structure that defines value. That value then dictates behavior. And so a lot of times I've seen departments that are so well defined in what their PL says is valuable, they don't see outside of those blinders.
And they miss completely big opportunities or don't see that bull charging from the side because they're so focused on that PL structure. And and it's almost like for big companies, one of the success can be a dangerous teacher because you're you're stuck in the success problem, which is now your investors and your shareholders expect you to keep to delivering on that. And it's so it's such a pervasive and heavy driver and and heavy responsibility that it leaves almost no room.
For experimentation on things that are maybe risky and and might risk returning those reserves the the quarterly returns. Yeah.
Hans Gieskes (25:51)
Yeah, but you still have to get the job done. You can
explain why it's so difficult, but you still have to get it done. And so I think CEOs have to be creative in those situations and have to also be somewhat
courageous if you like. But it's not easy. I I used to like and still like the whole corporate venture programs that are out there because that means the company itself cannot invest a startup because of the P<unk>L and the expectations of shareholders and analysts.
But it can through its own VC arm take stakes in startups, which is a different balance sheet, a whole different process. And
Nic (26:33)
Mm-hmm.
Hans Gieskes (26:34)
then the combination, what the startup doesn't have is a customer base to
launch new products for. They have a product idea but they don't have a customer, they don't have a sales organization. And I've seen examples of being involved in examples that have really benefited from that. From the innovation being driven by a startup without corporate purchasing and corporate HR, just
five really smart guys or girls in a in an office who build something new. And then as it grows bigger and bigger and you you get to exit, either the company that funded it and is part of the venture capital firm can buy them or somebody else buys them and you still get a good return on it. So I I like those kind of venture firms that have a relationship to a corporate where they can get knowledge
and all that stuff and maybe ultimately do the acquisition too.
Nic (27:32)
Yeah. i I've I've been involved in starting innovation labs at public companies and obviously starting companies and and it is a different mentality, it's a different culture that fosters that innovation, which is actually almost completely opposite from a big company, right? Big companies are really good at taking something that's valuable and standardizing it, doing it at scale, minimizing risk and variability and just doing it all the time and just trying to it pump out as much value out of it as possible. Whereas startups
don't have that. So they have to try to really be clever about finding the the gaps where they can create value and then iterate a thousand times and pivot until they find that thing. These two worlds are totally different. They require different skills, different mentality, different cultures. So creating an environment that allows for that to happen, whether it be an innovation lab, whether it be a venture arm, whether it be taking a stake in a company or anything like that, it it really is, you have to foster an environment where that could happen because you can't
always do it within a corporate structure. I think they're just distractions are too big, let alone all of the other things that go into innovation.
Hans Gieskes (28:39)
Yeah. Yeah, well, you the the grass always looks green on the other side of the fence. And
Nic (28:44)
Mm-hmm.
Hans Gieskes (28:44)
many startups are envious of the big corporations' customer base and logistics and everything else. And the big corporate company is the people are jealous of the product management, the startup, they don't have all these rules, and they can have an Apple Mac and not a Windows PC and God knows what. so you have to try and combine the best of both worlds sometimes.
Nic (29:06)
Yeah. Yeah. And one of the recurrent things of this podcast is that evolution rarely happens through a single dramatic event. It's actually usually countless small adaptations. But one of the things that you suggested that we talk about was the competitive advantage that comes from big bang innovation. And
Hans Gieskes (29:25)
Mm-hmm.
Nic (29:25)
and you have a lot of experience working with that and and and talking about it, which is making one bold transformational leap.
and when does it come from relentless increment incremental innovation where hundreds of small improvements compound into something extraordinary? Or is it like one big idea that just manifests and you just happen to hit it in the bullseye right off the start? Can you tell us a little bit more about what you mean by big bang innovation?
Hans Gieskes (29:51)
I I think big benefici me is more what a startup does. They come up with a completely new concept. We don't invent a telephone, but we invent a telephone that's also a camera and also can play music. So you combine three three things. Those typically come from used to come from startups. Totally new idea, new concept. I think in in in existing companies, the big bang innovation can often be.
To take a risk on a business model, to say we've always been selling our content or data on a transactional model, you have to pay and buy the whole subscriptions for 12 issues. We can't sell you one article because the economics don't work for us. And yet, if you find out that ultimately the customers want to buy just one article rather than 12 issues in the whole magazine.
If that's persistent, that desire, and there are way more people that want to buy just one article or one song from a music point of view, then who is bold enough to say we are going to create a new business model, big risk, that will make it possible to produce and sell single articles, single songs?
single views rather than a subscription that's the very high price and can't be cancelled. That's big bank business model innovation that companies can do and they have to really think it through it's not without risk. But in most cases they have large markets segmented they can say we try this in one market and not somewhere else. But that's often there's resistance against that.
Nic (31:43)
Yeah. Yeah. And and you're touching upon is obviously there there are different models for innovation. people talk about disruption all the time, disrupting this, disrupting that. And from at least some of the science behind it, disruption means something very specific, right? It means using currently available technology, but changing the business model, right? And so it's like
Uber, for example, was disruptive because they didn't really create new technology. Phones were around, the apps were around. But what they did was they changed the eco economics of ride sharing. So they changed the business model entirely. and you you could think about incremental innovation, radical innovation, architectural innovation, for example, biologics, and that changes the pricing and the science behind it as well.
Hans Gieskes (32:32)
Mm.
Nic (32:33)
so there are different models that go into this, but one of the
ones you're talking about specifically is the disruptive innovation, which is really around like you you could do incremental technology innovation. Uber created an app, but fundamentally technology was all there. But what they did was they radically changed the market. And and that's what, like you said, it's it's affected everything for publication. I spoke with a leading executive director. He was actually the executive director of the show Seinfeld and Veeep and Curb Your Enthusiasm. And
He was telling you about how Hollywood and those sitcoms have been radically disrupted by the likes of the streaming companies like Netflix, where before one of the things that they controlled was scarcity and demand because you had to wait every single week for that Thursday night at seven PM Seinfeld episode, and you just couldn't wait to see the next one. Then all of a sudden Netflix comes around, it's like you get the whole season in one shot. It's hard to compete with that, right?
Hans Gieskes (33:31)
Yeah, although I think a whole generation of people was never in the old world, so they can't understand why you would wait a week for the next episode. They want to binge watch. And
Nic (33:42)
Mm-hmm.
Hans Gieskes (33:42)
so I I think some of that disruption i is sometimes also only possible because whoever does it, and it's often a startup like Netflix was or like Uber was, that somehow is put so much money together
That they can afford the huge startup losses it takes to really create an upheaval. There was no one big taxi company. There were mainly individual operators owning a taxi or licensing a taxi. And so by changing the model and ignoring some regulations about insurance and all this stuff, some of it's unfair competition, I think. They were able to run many years of losses.
Until the old guy was basically that and now two companies own the rightshare business. And Airbnb is a is another example. in some way they still compete unfairly with hotels and that that need to have, all kinds of regulations and about the so I I think it's but if it's happening, the disruption.
You better deal with it and you either join it or try and kill it, but you can't ignore it. And in the
Nic (35:00)
No I I
Hans Gieskes (35:00)
case of Uber, the taxi drivers couldn't kill it. So, in the end, the people were driving cabs who maybe had paid hundred thousand dollars to buy a license to drive a cab in New York City ended up losing their shirt and maybe then driving for Uber.
Nic (35:17)
Yeah, yeah, yeah. One of the first episodes I released this season was actually the longest running commissioner of the New York Taxi and Limo commission during the time of Uber extent expansion. So he was there overseeing that when Uber was expanding and he had amazing stories to tell from the regulatory side. And the reason why I sought him out was because everybody's heard it from the, the Uber side. There are all kinds of documentaries there. And I thought like,
I'd love to hear from the regulatory side, what was that world like when you were trying to prevent this from happening? Because like you said, it was very unfair competition, right? They were like they were bypassing laws and regulations left and right to just try to disrupt and and then you have the regulators and the cabbies that are beholden to certain laws and policies and cost pricing and all kinds of different things that made it into yeah, it made it into this
David versus Goliath situation where Goliath just had no chance.
Hans Gieskes (36:18)
Yeah, but also I think it it the the window was there because none of the consumers were huge taxi lovers or lovers of the taxi mechanism. I I remember I think Uber was maybe a year old and and we were having dinner with our son and daughter in law in in the village in New York and it was raining Saturday night and we had to go back to a hotel. And I remember saying, my god, it's gonna be murder trying to get a cab to go back into the hotel and
My daughter-in-law said, Have you heard of Uber? I said, No. And so downloaded the app in the restaurant, the table, clicked on it, and indeed within 20 minutes there was a nice BMW 7 series, clean, with a driver wearing a tie, who took us back to the hotel, and maybe the cost was twice that a cab fair, but it was like, wow, this is fantastic innovation because we would have waited out on the street trying to hail a cab.
So if if if there hadn't been an open-minded consumers who said the taxi model is not perfect, not all cabs were clean, not all drivers were courteous, it might not have worked. But it's it's a real innovation. Although now I've been in Ubers that I thought, my god, play music I don't like, the car isn't clean. But many others are really good and I use it and I can use it in different cities. So yeah, that's real innovation.
Nic (37:46)
Yeah, no, I g I agree. Yeah, I I think to your point, the taxi industry left the door wide open for disruption because I remember those days and I never looked back. I I was never a big fan of taxis. it's like they they they owned you in a way before you even got in that car. they owned how much you how much they charge. It was never very transparent, you just had to pay whatever they said at the end.
Hans Gieskes (38:11)
Yeah.
Nic (38:11)
the the service was rarely courteous.
And and in some cases, yeah, it was just a nightmare trying to get one because you're out there standing in the rain or the snow trying to hell them down with fifty other people that came out of the same movie theater.
Hans Gieskes (38:24)
Yeah.
Nic (38:25)
So
Hans Gieskes (38:26)
But and it maybe it's not the topic, but if you look at London, where they have probably the most perfect taxi system in the world, clean cabs, drivers who are very knowledgeable and very selective, who had a much more difficult time to get off the ground there,
Nic (38:41)
Mm-hmm.
Hans Gieskes (38:42)
because there wasn't a virtual market for them, if you like.
Nic (38:47)
So when you're looking to change the course of a company, you mentioned acquisition before. how do you decide whether an organization should build, buy, partner, acquire new capability and so on? What are the strategic frameworks that guided you in making those decisions throughout the year? And you've been a part of, over thirty acquisitions. So you have quite a bit of experience
Hans Gieskes (39:07)
Yeah,
Nic (39:08)
there.
Hans Gieskes (39:08)
I I think it should be completely dispassionate whether you build it, buy it or partner with it. And many companies and many CEOs have a culture hang up. They love building stuff. They don't want to buy stuff. It shouldn't be about what you love, it's like what is gonna give us the best result and the most likely chance of success.
And so, even if you can buy a company, which I think it helps because you also, if you like, avoid one competitor out there versus building it yourself, you should still spend some good time working out what would it take to build this rather than buy it. And I think partnering is a great way for companies to pick up the pace to get new skills, although many partnerships end up in either.
a fight or in an acquisition of or something like that. Ownership as well, which is fine. It's a great way to get to know somebody.
Nic (40:10)
Mm-hmm.
Hans Gieskes (40:10)
But it has to be dispassionate. And I see too many people being either too gung-ho about we only build stuff.
Because then it fits our software and everything else, which is true. And it's also true that many acquisitions end up in tears because people underestimate the integration effort, the cultural issues. But you have to evaluate all three options in a dispassionate way. The flip side of that is that and that that's a hobby horse, that every company I've gotten involved with.
You look at the whole product portfolio and you say, Well, what about that product? It doesn't really seem to be our core mission. no, but it's very cool and it contributes to overheads. And the last CEO, I said, Well, but it to me it looks like a redhead stepchild, it'll never get the resources. What
Nic (41:00)
Mm-hmm. Mm-hmm.
Hans Gieskes (41:03)
if we sell it?
and then we're more focused on the core mission. And in many cases, people always have some of those lying around that distract, that slow down, that still eat up resources that are probably not as contributed as much as people say they are. Then you have to say, I don't care if this was launched by the current CEO's grandfather, it's got to go. It doesn't fit in our future.
Nic (41:32)
it is business at the end, right? So, like you said, you have to be
dispassionate. which is it's not always easy to do, and I guess it all depends on where you sit in the organization. But yeah, at the end of the day, you've got to make hard decisions, and that's why you're CEO or an executive in these companies. It's not it it's not a family and it's not a kumbaya, everybody ends up happy.
Hans Gieskes (41:52)
No, and and I I once was CEO of a of a magazine company, and we had business magazines and tax magazines, but also had consumer magazines, and they were the leading magazines, the leading car magazine and fashion magazine. I love the car magazine, I like cars. But I looked at the future of advertising industry and I said we are now at an absolute peak.
In future, more advertising will go towards TV rather than print. I didn't even realize it was going to go to the internet, it was that long ago. And we should get out now. While they're at the top. And so my shareholders agreed, and we sold five consumer magazines, all top brand names.
And I remember and it was was a great deal for the shareholders, for the employees involved that went to come to even paid them higher salaries, everybody was happy. And the staff gave me this award at the Christmas dinner saying, for he who sold what he loved most, and I said, Yeah, that's what you have to do. You you you can like this product, but you really think it doesn't fit our future strategy, then it's got to go.
Nic (43:08)
Yeah, you actually you mentioned magazine companies and and we th your your bio was read in the beginning of the episode when we put this out, but you've been in companies from Lexus Nexus to Monster, in and publication companies. I think you started right with publication company, El Saviour. And
Hans Gieskes (43:29)
Yeah, yeah, yeah, yeah.
Nic (43:32)
in
I'm actually curious to know what you think about that world now. They they're struggling big time, right? when it comes to the internet obviously disrupted so much and originally it was Google and and making making a lot of that content available for free on the internet. So it was really difficult to monetize. Now my understanding is one of the biggest threats there is that these AI companies have consumed all that content. And so now you can actually get your answer without even looking at the reference anymore because now it's just g it comes in line.
Hans Gieskes (44:02)
Yeah, no,
Nic (44:03)
How do you see the shaking out?
Hans Gieskes (44:03)
I I I
I think and I actually recently Ariel X, which is the the the old parent company of Lexus Nexus still owns them, have again confirmed AI is helping them and is actually making LexisNexis and companies like that grow. The reason is AI is a tool and it works best with comprehensive, complete, structured content and data sets. If I use Google Gemini a lot as a consumer.
And it brings back stuff largely from the internet, which is unverified in many cases. So if you post a load of nonsense on the internet yourself, AI may give it back to me as as knowledge and nicely structured table, but it's not verified, it's not comprehensive, it's not complete. So I think.
Big owners of structured data and content sets like RELX, Thompson Reuters, they will do well with using AI tools for their customers and for their own processes. So I'm not too worried about that. Ultimately, they have moved on from
selling content to selling solutions that help people make better decisions and run their organizations and it's by the convergence of content and data and services into a software solution. And so I I think for them AI is is is you can never underestimate it is a tool that will help them or help their customers. But
Up to point, we will see where that goes. Many i companies have been ripping off content owners by just downloading their content in huge amounts. And there have been lawsuits with publishers of content. and I I, as a former publisher, I'm a fier fierce believer in copyright. I think it's wrong to do that. And but no, I think they will those companies will evolve.
will use those tools. they, Aria Lexlex actually is big shareholder in Harvey, one of the big players in that area. So it keeps them on their toes. But I don't think it's a huge threat.
Nic (46:21)
Yeah, and you've seen disruption in multiple waves throughout your career from digital transformation, platform businesses, artificial intelligence. I guess when you and I know you you advise a lot of people, when you think about how organizations are competing today, let's say for example, publications, w what kind of advice do you give them about where they are today and how you think competition is gonna sh change over the next
it's hard to say ten years from now, but let's say over the next five years, how how do
Hans Gieskes (46:52)
Yeah.
Nic (46:55)
you see these big companies staying viable in this rapidly evolving technological landscape?
Hans Gieskes (47:03)
When I was at Elsevier in the 80s, we were experimenting and building products on the precursors of the internet, BitNet and SurfNet. And so we were always heavily involved in all those developments. And I used to have a mantra that I still have and that I would now say to companies that if you worry, in those days I said if you worry about the internet fucking up your business model, it will, because it becomes a self-fulfilling prophecy.
You have to embrace
Nic (47:33)
It's almost like
what is it like when you ski, you're not supposed to look at the trees, right?
Hans Gieskes (47:37)
Yeah.
So I always said if we just hide and say, my god, this is going to it's gonna happen. And
Nic (47:45)
Mm-hmm.
Hans Gieskes (47:45)
so, but if we embrace it, those technologies and the internet, then it can bring us many good things. And I think AI I see in the same way. If you worry about how AI is going to disintermediate your business, it probably will.
But if you fight for what you own and you have all the right content aggregation, coding, indexing, and other skills, and product solution building skills, I think you you'll do fine. but you can't rest on your laurels. I I I
Nic (48:16)
You know what? Mm-hmm.
Hans Gieskes (48:19)
remember in the in the late 70s, Elsevier hired Arthur D. Little, who was then a very famous consultant firm in Boston.
To look in the future of print publishing versus digital publishing. And they said, you guys are gonna die. And it's gonna be the world will be taken off by IBM and digital, they will kill you, and this and that. And of course, nothing of the like happened. They also said that technology will not go that fast, people will not have enough data, bandwidth.
Do all it, which of course is also bullshit. so I
Nic (49:00)
Mm-hmm.
Hans Gieskes (49:00)
I think many good companies that service their customers to the best of their abilities today, but also look in the future and say, what are the dreams of our customers? and I once made a very bad faux pas. I said to a room full of salespeople, I said we need to help our customers fulfill their web dreams.
WE B. And of course the whole room went like, my God, what is he saying? And legal did I said, no, I said, guys, W E B.
We
Nic (49:33)
Ha ha.
Hans Gieskes (49:34)
need to and now it's the same with AI. I would say you have to as a company say how can we help our customers fulfill their AI dreams, what they're expecting of AI. Can we do that for them?
rather than say it's bullshit, rather than ignore it. so I think it's it's important you embrace all of that.
Nic (49:56)
Yeah. I think at the core of everything we've been talking about here, where we're talking whether we're talking about innovation or your experience leading companies or leading turnarounds, at the core of this is like you you you bring a tremendous amount of leadership expertise to companies and and people that you advise and so on. As you've experienced different companies and dozens and dozens of different leaders and CEOs.
What are the key things that you look for in people that tell you this person's a good leader? because a turnaround is more than being a good manager. You have to go in there, you have to talk to people, you have to learn, you have to listen, you have to make hard decisions and so on. So, w what are the key things when you think about w what are the kind of people that make extraordinary leaders? What are the things that pop out in your mind?
Hans Gieskes (50:47)
I think they need to be able to listen well, even if they listen by talking a lot. when you talk, it's like using sonar. You send out signals, and then the way they come back, that's what you have to listen for, whether
Nic (51:01)
Mm-hmm.
Hans Gieskes (51:02)
that's body language or non-answers. You need to be able to listen well. You need to be able to lead by asking the right questions. You need to hold people accountable.
But in a respectful way. Because ultimately, if if you have a square pack in a round hole, then you have to deal with it, or if you have agreed what needs to be done and the person has said, I can do it, then you expect them to do it. So you need a culture of discipline. you need, are they able to get people to focus and not distract from that?
So yeah, it's I look for people like that. I I always look to hire managers who have what I call a consider it done culture. They don't want
Nic (51:54)
Mm.
Hans Gieskes (51:54)
to be micromanaged. they're willing to argue with you about what needs doing, but once you've agreed what needs to be done, they say almost non-verbal, consider it done. I
Nic (52:08)
Mm-hmm.
Hans Gieskes (52:09)
hate managers that send memos.
saying we agreed this last week, have you done it? That's a waste of time. And so yeah, I I like I like those kind of people, people that will get on with it and do it and work with their teams and and not spend endless time on internal communication, people that send emails and then copy and a dozen other people or just everybody's aware what's happening if you're just distracting those people, just get the job done.
Nic (52:40)
Yeah. people that execute. Yeah,
Hans Gieskes (52:42)
Yeah.
Nic (52:43)
no, I believe it. So so Hans, this has been extraordinary. I always enjoy my conversations with you and and and in this case, we we got to unpack so much of your career. And and I know that, at this point you consider yourself semi mostly retired. you're you're spending the good life up in up in
Hans Gieskes (53:01)
Quantite.
Nic (53:02)
the, upstate New York and and enjoying life. But, you've done so much and you've been a part of so many extraordinary companies.
When you zoom out and you can reflect on your body of work and the things that you've done and where you've driven the most impact, what what is, what are the kind of things that you look back, your achievements that give you the biggest and the f most fulfillment? The the what impact did you drive and what accomplishments do you have, what transformations did you drive that had the la most lasting changes?
And give you the the biggest sense of pride and fulfillment when you look back on this entire body of work that you have.
Hans Gieskes (53:42)
Well, it it's sometimes the companies itself, the products. if if if I was at the cradle of new developments or or a new division in a company and twenty years later it's become a very big big business, it feels great, even though my only involvement was to approve a product manager's request to invest forty million dollars in a small acquisition. If that acquisition has led to a business that's now
Three billion dollar business that feels good, but probably I get the most satisfaction from the people along the way. I said early on, I was very lucky when I was in my twenties to have a really good mentor.
I have tried to be a good mentor along the way myself. So I get a huge kick out of seeing people who were young, high potential people in my organization 20 years ago who now are CEO of companies who are doing well and who I still stay in touch with. So probably the the biggest joy is that, is seeing the people you've worked with continue to do well. that's because that's lasting from my point of view.
Nic (54:53)
Yeah. Well, I can say from personal experience that I have personally benefited from knowing you for these two decades. we work together in companies, we've stayed in touch. I considered you a a dear friend and and somebody wise that every time I have a conversation with you, I I walk away a better person. And for that,
Hans Gieskes (55:11)
Well, likewise.
Nic (55:14)
I can all all I can say is, thank you obviously for for being on this podcast. but more than that, just thank you for being a friend and
I look forward to having these conversations over and over again over the years.
Hans Gieskes (55:25)
Yeah, and maybe over lunch or a glass of beer.
