Episode 53: The World's Best Negotiator joins The Contrarians, Google a Monopolist, and Alan Joyce gets Stripped
Adam and Adir are joined LIVE by the world's best negotiation expert, Vicki Medvec. Plus, Google is officially a monopoly, and the guys chat about the Qantas board stripping Alan Joyce of a $9M bonus.
The Contrarians catchup
Adir’s viewpoint on the shot put: “If you're going to get someone to throw a seven-kilo ball, let them throw it however they want.”
Another Adir Olympics hot take: “Why are there weight classes for boxing and not height classes for high jump?”
Adir picked up a new book, “Castles in the Sand: The Life and Times of Carl Graham Fisher” (it’s not confirmed if he only reads books about sand). This is the definitive biography of a famous developer who helped build the Indianapolis Motor Speedway, the Indy 500, as well as Miami Beach.
Did you know there was only one billionnaire in the US 100 years ago? John D. Rockefeller is often cited as the world's first billionaire, achieving that status in 1916 through his ownership of Standard Oil.
Spirit of stripping bonuses
Qantas said it will reduce the $9.3M bonus paid to ex-CEO Alan Joyce, citing poor performance and a series of damaging public scandals. The company made the decision taking into account the "challenges" facing the airline and "in recognition of the customer and brand impact of cumulative events".
Alan Joyce was paid $11M in 2023 “for essentially trashing the brand” and was paid nearly $150M during his tenure at Qantas.
Adir: “But I still do think if you say, how well did he perform? Should he get a bonus? And if the answer is he executed on exactly what he told the board was his strategy, which we may not agree with. I think that he's eligible for his bonus if he does that.
“Fights about how much of a bonus staff should get for doing the wrong thing - whether it's mistakes or incompetence or hiding stuff - I feel like that is one of the perpetual unresolved challenges of being involved in a business. And the thing is, if you don't pay it, the way people think about it is that they've been punished for not getting it. Whereas what you're actually saying is the thing that we paid you to do your job, you did that really well, we're not firing you for that. You just didn't do better than we were hoping for, for that pay.”
“Hey Google, what’s a monopoly?”
Last week, a federal US judge found that Google was engaging in illegal practices to preserve its search engine monopoly, and is a monopolist that has acted to maintain its monopoly. The report has drawn comparisons to the Justice Department's landmark case against Microsoft in 1998, the last similar monopolisation.
Google accounts for 91.54% of the global search engine market, which has been boosted by paying companies like Apple and Samsung to be the default search engine for mobile products.
Adam: “It’s not illegal to be a monopoly. There are lots of industries with a monopoly because you just can’t have multiple players. But abusing power and being a monopoly are two separate things.”
Adir on LLMs replacing search engines: “Often in society when we speak with regulation, but in general we often fight the last war. And so this is the last war. And when they're trying to pull back Google and search, but actually the heyday of search is now behind us and the world may have moved on.”
Probably the world's best negotiator: Vicki Medvec
Vicki Medvec is a leading global expert on negotiation strategy, corporate governance, and decision-making. She is CEO of Medvec & Associates, a boutique advisory firm with a client list that includes Google, GE, McKinsey, BlackRock, and Goldman Sachs. She is the Adeline Barry Davee Professor of Management and Organizations at the Kellogg School of Management at Northwestern University.
And she was live with Adam and Adir.
[Don’t even bother reading this section of the newsletter - just go listen to what she has to say.]
Vicki: “Prospect theory is, in my mind, the most powerful tool in shaping people's choices. So it is the most powerful influence tool in your influence toolbox and the most powerful negotiation tool in a negotiation toolbox. What it says is that people are risk averse in the domain of gains, and risk seeking in the domain of losses. So what's that mean? Well, I like gains. I like to hold on to my gains. I like the certainty of my gains. In the domain of gain, I'm risk averse. I'll take a certain win over the chance of a bigger win all the time. In the domain of losses, I feel really different. I don't like losses. I don't want to have a loss, in the domain of losses I'm risk seeking. I would choose to take a risk of losing more rather than having a certain loss.”
Vicki: “I think that power is very flexible, and I think that people don't work hard enough on building their power. So I would say I don't pick a side based on whether I think that they are the stronger or weaker position. I do do a lot more work on the selling side than the buying side, but I do a lot on the buying side too. But I love focusing on the selling side because I think on the selling side, it's very easy to differentiate yourself, and when I differentiate myself and how I am uniquely positioned to address your problem or overcome your need, I can actually look at the weakness of your alternatives and set more ambitious goals in those negotiations.”
Five other stories worth following:
One for Adir: “Borderlands” is a wildly popular video game series, with 77M+ copies sold, but its film adaptation rode its “D+” CinemaScore rating to a disastrous $8.8m opening weekend. The movie’s budget was ~$145m.
Last week, the S&P 500 posted both its best and worst days of 2024, and this week offers critical US economic reports, including data on inflation and jobless claims, any of which could shake markets all over again.
Adam called the 1996 Atlanta Olympics the “Coca-Cola Olympics”, but did you know Coca-Cola is the Games’ longest-running sponsor (dating back to 1928!) and pays $20M per year for the honour? However, health experts want that partnership nixed due to the negative health impacts of consuming sugary drinks.
Americans may be avoiding theme parks this summer, but Disney is betting billions that it’s a short-term blip. At its D23 Expo, the company unwrapped the details for a massive expansion of its parks, including a land at Magic Kingdom focused on its villains and new attractions centered around Avatar, Coco, Cars, and Monsters, Inc.
Susan Wojcicki, a longtime Google exec who ran YouTube, died at 56 after living with lung cancer for two years.