HITEC 2001 - John Sculley - Coaching New Businesses All Over The World
John Sculley will be giving the HITEC Keynote Address on Tuesday, June 26 at the Orange County Convention Center in Orlando, Fla. from 8:00 to 9:45 a.m. If you cannot attend, listen to Sculley's speech live on the HITEC Online Web site at
In 1995, John Sculley and his two brothers formed Sculley Brothers LLC, a private investment firm whose mission is to help build new companies for the new economy. The company's primary focus is centered around early stage companies with exciting growth opportunities.
"Our goal was to work with people we like and work on things that interested us, and to take our experience from having been in business for a long time in operating jobs, to help shape some of the success stories in the new economy," says Sculley.
The Sculley Brothers team is not shy of experience. Together the partners create an investment group with solid executive experience gained from some of the nation's largest companies. Arthur was formerly president of JP Morgan, and David was formerly president of H.J. Heinz USA. John, the oldest of the three, was Pepsi president and CEO from 1981 to 1986, and afterwards CEO of Apple Computers through to 1993.
In his professional shift from head of a large company, to an experienced mentor of numerous startups, Sculley is defining the new working model. Sculley Brothers LLC infuses companies all over the world with capital and business experience. These companies are based all over the country, and throughout the world, including India and Israel. Because of this, Sculley is constantly traveling and he depends on mobile technology to comprise of his office. He rarely remains in one place in a single month.
"We live a very virtual life," says Sculley. "While our headquarters are at 90 Park Avenue, in New York City, we are just as likely to be somewhere else in the world. I also live down in Florida, in Palm Beach. My brother Arthur is in London about every 10 days, my brother David is in Ireland about every three weeks. I am in California about three times a month. So we are constantly moving around, visiting with our various companies and working with the management of the various companies."
Although many of the companies the group works with are technology based, the companies they support are from a variety of industry segments. Among the list are financial services, high technology companies out of Israel and India, wireless technology, travel services, developing the famous Austrian chef, Wolfgang Puck, as a product, and the entertainment company that produces the TV show, ER. What all these businesses have in common is that they have potential to become successful by bringing big brand marketing into the whole strategy. To these businesses, Sculley offers his experiences from working with a variety of business models all over the world, and inputting this viewpoint to the management of the new companies.
John Sculley, has been a world traveler since he was five days old. He was born in New York City, but moved to Bermuda less than a week after he was born. He grew up in Bermuda, and has also lived in Brazil and Europe. He completed his undergraduate education at Brown University where he earned a bachelor's degree in architectural design. He later earned his master's of business administration from The Wharton Scool at the University of Pennsylvania.
Although Sculley does not have a static base, he does spend his weekends at his home in Palm Beach, Fla. where he enjoys running, biking and playing golf. In addition to advising startup companies with Sculley Brothers LLC, Sculley also relays his experiences in speeches that he gives three to four times a month.
He does not plan to retire, but will reformulate his day to day operations according to how his life develops in the coming years.
"I haven't even thought about retiring. I don't think that people have to retire any more, what you can do is readjust what you do to match how you want to live. In my case, I like giving speeches and traveling around the world, I like working with young management teams in the various businesses we're involved with all over the world. I like to split my time between New York and Florida. It's what you call a virtual life and it doesn't really require for one to retire any more. In the old days you could either work in a big company or go out and play golf and lay out on the beach. There weren't many choices in between. That's no longer true."
The Bottomline spoke with John Sculley in early April 2001. In the interview, John Sculley made a number of interesting points about the new economy, the relationship between hotels and business travelers, and lessons he's learned from working with Sculley Brothers LLC. The following are Sculley's responses to some of The Bottomline's interview questions.
Why do you think it is important for you to speak to an audience at HITEC?
I think that with our new economy, the Internet has become the most important and pervasive means for communications. It started with high tech companies, and it moved rapidly touching all industries. More and more business people are working on the road out of hotel rooms as much as they work out of offices. So the hospitality industry is going to increasingly find that one of its greatest appeals will be in offering the so called road warrior the kinds of communications and business services that they are accustomed to in their more traditional office.
Is this something that hotels should focus on in their marketing?
I think to the business people, the range of business related services at a hotel is becoming one of the most important services that they look at when choosing where they want to stay. For example: More and more hotels which cater to business people have business centers with a range of business services that they provide — from a Fed Ex service to fax service. Some of the hotels that have been the most successful with the traveling business executive, are offering high-speed broad band services right in the room. This is so that business people can conduct their business much the way they would if they were at their own office.
Speaker phones with a mute button is an essential tool for more and more business people because of conference calls and telephonic board meetings, which often last over an hour, sometimes two hours. So a speaker phone is an increasingly valuable tool.
The ability to bring your laptop with your presentation and have hotel services with all the related audiovisual equipment is increasingly important.
I think that hotels need to begin to think of themselves as really an extension of the office for the traveling executive. The traditional office is one that is becoming increasingly mobile, and companies more and more are working beyond the boundaries of their own walls.
What do you mean by the new economy?
The old economy was highly structured. Business executives command and control decisions from the top through a hierarchical, usually self-sufficient, organization. In the old economy, jobs were precisely defined, there was management by objectives, there was usually a five year planning horizon and information was available on a need to know basis only. So you only told people what you thought they had to know. Employees were very loyal and those assumptions were predictable.
Now, everything that we do and trusted has changed with the new economy. The so called middle man functions are being disintermediated, meaning they are being replaced, by more efficient, cheaper, faster, better ways to do things. Companies are focusing on their core competencies, and they're outsourcing everything else. The planning horizon has gone, lets say from five years, to less than one year. There is very little that is predictable for very long and the strategic resources in the new economy are information and time, and they're the competitive advantage.
The new economy is really built around knowledge productivity. Knowledge productivity, meaning the efficient use of information, and the ability to share information using centralized project teams all over the world, bringing the company closer and closer to the customer. Again, a company needs to be closer to the customer, disseminating the information because the ability to have the most up-to-date information on their markets, their customers and their competition, means that communication is becoming fundamental to the way people do business. A lot of that has to be accessible to people while they are on the road. That's a huge opportunity for hotels.
I believe that hotels that see this, and that package the business services — everything from conference rooms to broadband to related types of support service — should use it as a way to differentiate themselves. They are going to find not only that they are going to extract loyalty to the hotel, but it is probably going to be a high margin business. At this point these services are much less price sensitive than the fact that guests have the assurance that they are going to have high quality services available.
As a continuous business traveler yourself, what do you expect from the hotels that you stay in?
I choose my hotels based on two things: One is my experience with them, you know, the reputation that they have, and the other is the range of business services that they offer. If one offers better business services than the other, then that is a big part of my decision.
What talents do you offer the companies that you help start and work with?
I think a couple of things. One is I've been a key of both traditional large corporations, as well as an active industrious cofounder of many of the new economy start up companies. So I have the ability to traverse between the old economy and the new economy with actual hands on experience. The second one is that I am involved with enough businesses across enough different areas of the world, that I get to see things from several different vantage points.
The role I principally play in the start up companies, besides bring investment capital to them, is to open doors for business partnerships. This helps in recruiting senior management for the companies, and to help look for merger and acquisitions partners, as well as helping sell the larger companies on a different company's products or services. But I am not involved with the day to day running of the business anymore. I did that when I was CEO of Apple and CEO of Pepsi. I am much more in a coaching role for the different companies.
Do you find that difficult? It seems like you are dipping your hand in a lot of different industries?
I don't have all the answers, possibly, and it is an incredibly challenging time for anyone in business. Because I am not actually running the companies, I don't have to focus on the challenges that executives in the companies do.
On the other hand, because I am working with a number of different companies, I am able to focus mostly on those areas where I think I can bring the most value to the management team. This is opening doors for business partnerships, bringing in money, looking for emanating partners, helping recruits and key executives, and working on marketing strategies.
How do you find the companies that you assist?
Almost everything that my brothers and I are involved with, we get involved at the founding stage of the company. Since we get involved at the early stage, sometimes we have the ideas, sometimes someone else does. We help them turn them into a business model. It is not terribly important who comes up with the idea. It is how successful you are in packaging the idea and turning it into a business that can be competitive and scale to a very large size.
What shifts are you seeing right now in your business goals from when you started?
There is a much greater focus on getting profitability as soon as possible. Getting the cash flow to break even as soon as possible. Be careful on how money is being spent, not spending too much too quickly until the company gets traction in the marketplace.
Is there a lesson that you have learned from when you first started?
I think the lesson is that you have to have a sound business model, and you can't just race to get big fast. You have to have a business model that can be sustainable over time and can generate real profits.
How will technology affect the way we work in the future?
There is a lot of ways in which people will have more choices, and more flexibility in the way that they work and the way they spend their free time. In fact it will be harder to tell where work ends and where your free time begins. People will be able to work where they want to live, and they will be able to work where they want to spend their leisure time, and they will be able to get leisure time in where they work. So all of these things will become very, very different. That's all part of the reinvention of work.
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