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Redefiners
The Art of the Superhero Turnaround with former Marvel Entertainment CEO Peter Cuneo
00:29:47
Marvel Studios and many of its numerous characters are household names around the world. Their superhero-powered movies earn hundreds of millions and sometimes billions of dollars at the box office, including the #2 top grossing movie of all time –...
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- [00:00]
A
Call them change makers.
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B
Call them rule breakers.
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A
We call them redefiners.
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B
Hi, everyone, and welcome back to another episode of Redefiners. I'm joined again today by my wonderful co host, Marla Oates.
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A
Hey, Simon, it's great to be here.
- [00:22]
B
Now, before we get started with today's amazing episode, a quick reminder for all of you who are joining us. If you're watching Redefiners on YouTube, you can get all of the episodes of both Redefiners and Leadership Lounge there. And don't forget to hit the subscribe button, and you won't miss a single episode. And if you're joining us by audio through whatever channel you choose, make sure to rate us. We really love to hear your feedback. It improves what we do for you. Well, Marla, on many of our podcasts on Redefiners, we hear about heroes. Heroes of their sectors, heroes of their countries sometimes. But today we're going to hear about superheroes, and we're going to learn some lessons, I think, that have applicability across a whole range of different business and broader contexts. But before we plunge into that and think about the superpowers of leadership that we might consider. What, Marla, if you had to choose a superpower, would yours be?
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A
I think for me, it would probably be time travel. Do you remember on Star Trek when it used to be, you know, beam me up, beam me up, Simon? No airplanes, no trains. I'd love to be able to time travel instantly. How about you? What do you think your superpower would be?
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B
Well, I would like to continue to bottle the preternatural patience that you have with me and my technical inability, Marla. But I also, and this is uncanny, I would also select time travel. I'm a spoiled historian, as listeners to the show will know. And I think it's a skill that our guest today. And we'll come on to this, is also a great fan of for sure.
- [02:15]
A
Well, you know, Simon, superheroes actually have some things in common with leaders. Like superheroes, leaders are often called upon to exhibit courage, prioritize the greater good, give people hope, and inspire others to action. But while superpowers have inherent powers they're born with or that they gain as a result of some freak accident, leaders often need to develop these abilities through experience, mentorship, and a continuing commitment to personal growth.
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B
That's right, Marla. And our guest today has shown all of that and developed that superhero leadership mentality in volumes because he is Peter Cuneo. Peter has completed seven turnarounds. He is famous for Several of them. But the one with which we might begin the show today is the Marvel Entertainment Inc. Story. Peter was in involved in the leadership team there, right at the head of it for 10 years from 1999 to 2009, first as chief executive and then as vice chairman of the board. And he took an organization, a business which as many of our listeners will know was coming back, it was a post bankruptcy company and took it through a period of extraordinary transformation leading to the point at which it was sold to Disney for 4.5 billion. It's not the only time he's done it. He's done it with Clairol, he's done it with Remington, he's done it with Black and Decker. And so impressed are his peers by this that he's been named as one of the leading turnaround CEOs in America. He's also got his own podcast, fittingly called Superhero Leadership. And I think we're going to hear a little bit more of that as we go on. But the other, other thing that endears him to me particularly is on his website where you can hear those podcasts and read about some of his lessons for leadership. He also encourages people who want to stand out as leaders to read history. The past is prologue. And so we might delve into that too. Peter, welcome to Redefiners.
- [04:26]
C
Well, thank you very much. I really appreciate it, Simon, thank you.
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B
We've touched a little bit already on what you're most famous for as a turnaround CEO. It's essentially a risk taking business that you were engaged in. And we're going to talk a bit with you about how you've done that and the recipe for success. But before we go there, can we talk a little bit about motivation, the why you have led in the way that you have?
- [04:55]
C
Well, I think it all starts with the fact that I was born, I like to say I was born with an adventurer gene. Now I, I want to say I, I'd be remiss if I didn't say to Marla that she just mentioned, you know, born leaders and so on. There are no born leaders. In my opinion, no one is. He or she is never a born leader. You will hear that. People say that, but you become a leader through your life's experiences, starting when you're very young. And so part of the reason I became a risk taker was when I was young, the way my parents behaved, the way my grandparents behaved. My grandparents were immigrants. So basically they took a risk coming to the United States and making a life for themselves. And they were middle class and they survived the depression and they did okay. They worked hard and they did okay. And my mother was an EMT for 30 years. She worked the 4 to 12 shift, put me in the back of the ambulance and I went out on calls with her. I didn't do anything except watch, but I saw my mother in action. And so my. I grew up with a action oriented working woman who took risks with people, with their lives. And so that was my model growing up. I didn't really think about it consciously, but I think it's interesting because as you mentioned, I've done seven turnarounds. But actually my fir. The first turnaround I was in, I didn't choose to go into. I was thrown into it by my boss at the time. I had no idea I had any skills, if you will, in turnarounds. And I was actually pretty down emotionally for about six months. And then we started to get results and I began to see it was about leadership. And over a period of the first, say, two turnarounds I did, I became addicted to turnarounds. Using a diversity of, of people, working as a team. It gave me a tremendous high as far as human beings go. Most human beings don't want to take risks, which is natural, the more normal thing. But for me, the challenge just does something for me.
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A
Well, that's certainly an impressive track record, Peter. Incredibly differentiated. And look, you mentioned the seven turnarounds. We want to talk a little bit about Marvel. You went into a business that you didn't know. And we think of Marvel today as this hugely successful company with all of these entertaining characters. You think about all the movie titles and some of the top grossing films of all time. But this wasn't always the case. Tell us what it was like when you first joined Marvel, an industry you didn't know. And what were some of the first things that you did upon joining?
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C
Well, I would tell you first of all, most of my turnarounds were with industries that were new to me. And I would actually argue that in the case of where you're going into a situation that's very traumatic for the people who are still there working in the company. And I actually think it's an advantage to not know much or anything about the particular industry because you're coming into a situation where you can have an open mind to everything and it helps you as a, if you're going to do a turnaround, quickly start to understand where the problems are and, and what they are and start to form a vision for what you can do about them. I would tell you that people often say to me, well, Peter, you started the movie business, Peter, you're. You. You started your own studio. And I have to tell you, I can't take credit for any of that. That was actually initiated by other people, not myself, who knew the industry. You have to understand right away the culture of the organization. People would say, peter, you started the movies. I go, no, I didn't start the movies. Somebody else. But what I did was look at the value system of the organization going into it. Two pieces to culture. One, how you treat the people you work with and the people you depend on outside the company. How do you treat or view your customers, your suppliers, your auditors, your bankers, and so on? The other half is understanding what you have to be really good at to be successful. And you would be surprised because in many cases, I would go in and these organizations had no clue about really what mattered, what was most successful. And in every case, I like to say that the culture of the organization I was going into was bankrupt and needed to be changed. I think changing culture is a leader's toughest job.
- [09:53]
A
Peter, thank you. I mean, we think of you as the superhero, right, Running into the fire. But as you pointed out, right. It takes a village. Leadership doesn't exist in a vacuum, nor does success and failure. As you rightly pointed out, leadership really needs the right culture and the right team to get things done. And it sounds like you focused on that, but change is hard. Tell us about the culture that you inherited at Marvel and what did you do to make it more creative, more productive, more effective?
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C
Say that the culture of Marvel became. And I was very lucky. I had a lot of people already in the organization and on the board who believed in this. The culture became, we will change the rules of the game. We're not going to do anything the way other people in these industries do. We're not going to make movies the way the big studios do. We're not going to make comic books the way other people do. We're going to do it differently for various reasons, and we think we can do it differently. And as a new person not knowing anything about making movies or publishing comic books, this was great for me to look at and see, okay, yeah, why can't we do it this way? And so one example would be, we started Marvel Studios. Prior to Marvel Studios, we had been. We had been partnered with a lot of big studios. Part of our strategy was to spread the movies around. We didn't want to be dominated by One or two studios. So we had Spider man with Sony. We had the X Men with, with. With Fox. We had the Hulk with Universal, and on and on and on. But we really felt that we had been almost apprenticing for a number of years to these big studios. We were on the set every day. We had script approval. Okay, we had casting approval. And we thought after a while that we could make these films just as well for less money because we didn't have a lot of the overhead problems that these big established studios have and that we. Nobody understood our own characters better than us. And that's exactly what happened with, with Marvel Studios. We continued to have great success, made the films less expensive than it would have cost with a big studio. And the other big thing that most people forget is these movies had a lot of licensing revenue. And when we were with the studio, we had to share that licensing revenue. We. There was a split, typically. But when we started making them ourselves, we got to keep all of the licensing revenue and 90% of the licensing revenue. It was in cash and dropped right to the bottom line. So adopting a licensing model for the company was one of the big changes that we adapted.
- [12:48]
A
When I came in, the shareholders must have been thrilled. I mean, here you come, new ideas, fresh perspective. But how did you get people on board with the changes so quickly?
- [12:59]
C
Well, first let me say that the investors were not happy. Investors could not understand, despite the fact that I was in charge of investor relations and explaining why we made movies better than the big studios. They just weren't buying it. They. They couldn't understand how little Marvel could have, the guts, the insanity, if you will, to start its own studio. And so. But of course, once the film started coming out, they were convinced also, you have to remember turnarounds. The minute you walk through the door, things don't get better. It takes time. It could take a year. In fact, when I came to Marvel, Marvel was a public company on New York Stock Exchange. The day I walked through the door, the stock was $7. A year later, it was $2 because we were building, making changes, but we hadn't seen any real financial results yet. And the investor investing public thought, you know, we're going back in bankruptcy. But X Men was a huge hit. And all of a sudden, things started to change. I believe very much in featuring our. A list of characters. You know, most of them, they're still the same today. Basically, a lot of changes over time. You can't simply say to people, this is. Give a big speech in front of all the employees, here's our new. Here's our new strategy and here's our new culture. And suddenly everybody behaves differently and no, no. Change the culture. In an, in an international multinational company, they could take years, literally to do it completely. So it's more about being a cheerleader, celebrating success, even when you, even the little ones, because you want to show the organization that you can be successful. But it's also behaving as the leader in line with the culture that you're talking about. Because if you don't behave and support that culture with your own actions, okay, then no one's going to believe you. The One thing that CEOs, leaders, in any situation, you know, business, non business, whatever, is you must build trust. And the only way you can build trust in the organization is to behave in a way that backs up what you're talking about.
- [15:31]
B
Peter, thinking of the governance counterpart to that, how did you convince the board to take a risk like that? In retrospect, it was a fantastic success. But at the time, given investor pressure, given what you'd inherited, it must have seemed like an enormous gamble to the board.
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C
Actually, no. And as I said, I inherited an outstanding board. And many of the people on the board were turnaround people, as it turned out, or we brought in more that were turnaround people that understood that it had success and understood what it takes to move a big company and largely a completely different direction. And so, and we found some people who are actually in the movie business, in the comic business, who also had that mentality. They were rare, but they had that mentality as well. So I really didn't. And, and the. A guy named I, Ike Perlmutter, who was up until recently the largest shareholder in Disney, because we sold to Disney, was the guy who took Marvel out of bankruptcy. Actually. He was also a risk taker. And an example is at one point, I guess about that one year period, he took a $200 million loan on his own signature from a bank to put into the company to allow us to do a number of things that were important to us. One of the things we used that money for was to completely redo the financial stack, I'll call it, of the company, which most people think when you come out of bankruptcy, you're cured, meaning the financial situation is cured and it's right for the business. In fact, it isn't. It's what the creditors would agree to. It's not necessarily what's right for the business. And Marvel had that situation, and we were able to use those funds to completely redo and take a huge amount of pressure off us. I often say as a leader I don't have much vision, but I'm great at grabbing other people's good ideas. But I would sell my ideas to the organization. Sometimes you don't walk in and here's what we're going to do. It takes a month or two talking it through. And one of the things I discovered that even if people don't agree with the direction you want to take, if you are willing as a leader to listen to them and take what they say seriously, even if in the end you don't go in the direction they're recommending, okay, they will appreciate that you took them seriously and wanted to hear their point of view. And so when you do make the change, they're willing to give you a shot.
- [18:18]
A
We'll be right back with Peter Cuneo, but first let's hear from Hetty Pye, a leadership advisor in our London office. Hedy will discuss why transformation efforts fail and what senior leaders can do about it.
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D
Nearly three out of four business executive leaders believe their companies are on a path to failure without fundamental transformation. Yet less than one in three leaders report that their transformation efforts have been successful. What separates leadership teams that effectively navigate transformation from those that don't? Through extensive research with over 1000 C suite leaders and extensive interviews with CEOs who've led successful transformations, we found it's often not poor strategy or lack of vision that prevents transformation. It's organizational inertia, the invisible force that kills change before it can take hold. To overcome inertia and build transformational leadership teams, organizations need to focus on four key areas. Build the right executive team for transformation, develop leaders through the transformation, orchestrate the team for maximum impact, and tap into the capacity of next generation leaders. The stakes couldn't be higher. In today's environment of AI acceleration, the ability to transform isn't just a competitive advantage, it's an organizational survival skill. To learn more about overcoming organizational inertia and building transformational leadership capability in in your organization, view the links in our show notes or visit russellreynolds.com.
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A
Now back to our conversation with Peter.
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B
Peter, you've developed a list of 32 leadership essentials, we might call them, which make up what you describe as superhero leadership. And for us at Russell Reynolds, the component parts of leadership are obviously very interesting indeed. If you were to pick perhaps three of your superhero qualities, what would they be and which are the ones that are hardest in practice for leaders to display do you think?
- [20:32]
C
Well, first I might talk a little bit about how I created these 32. By the way, they're now 28 essentials. Because in writing this, writing a book, It'll be out February 4th. It's called Superhero Leadership with Peter Cuneo. It's in the 28 Essentials of Leadership. You're right, it has been 32 for about 20 years, because I started it 20 years ago. But in doing the book, we consolidated a few together. These essentials for superhero leadership are principles, behaviors, opinions, instincts that I think I've learned through my time as a leader. And the history is very simple about when I was second year, I think in Marvel, we were really starting to do well. I was asked to give a talk about leadership to a large group. Interestingly, you would think I taught a lot about leadership consciously before that, but I really hadn't. It's my personal list. It is not meant to be the list for everyone. I encourage people to look at the list and grade themselves. No one else is going to know your grade except you. Okay, but be honest with yourself. People often say, well, Peter, after, you know, 20 years of when you must give yourself an A on every. On every one. And actually, I don't. There's still ones because I. I'm human. Human. And I have my flaws, and I'm. I'm happy to get a C on some of these.
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B
And which are the toughest ones?
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C
Well, there's no question that the toughest one, I think, is what is number 18 and is having the emotional maturity to understand it. As a leader, you're going to make people unhappy and they're not going to like you. You going to be unpopular. Even good change will upset human beings, and you have to be comfortable with that. Otherwise, you cannot be an effective leader, at least not in turnarounds. You know, leadership. The key one of you mentioned in talking about leadership earlier mentioned the word courage, and that's the one. If I had to pick one word to go with courage with leadership, it would be, you need to have courage, because change requires courage. And many people are poor leaders because they just can't bring themselves to be unpopular, to upset other people and make the changes that are needed. So I think that is the hardest one of all.
- [23:11]
A
Well, Peter, you have certainly demonstrated a huge amount of courage over the course of your career. Your 40 years operating on boards, the seven turnarounds, um, you could have easily retired. You could have easily retired, hung it up, spend time with family and friends. Why did you start your leadership podcast?
- [23:31]
C
Thank you for asking that question, Marla. I really appreciate it because I have become, over the last, I guess, 10 years, very concerned about the status of leadership in the world in general today. I think we have less good leadership in the world than maybe ever in human history. And I know that's a big statement. My message is, how can we have better leadership in the world, and in particular with young people? Young people are not learning leadership. Why? And what can they do to change that if they aspire to leadership? Or what can a current leader do to get better? And so there's a lot of things on my. On my website as well, Peter Cunier.com that talk to that the best way to teach leadership in a way besides people getting their own experiences, which is number one, I think number two is listening to other people who have been successful and the lessons they've learned. One of the other things I'm very proud of is we talk about our failures on the podcast. This is not a bunch of people, you know, who have. Who have done a lot of good things touting themselves for an hour. Hardly. It's the opposite. We're all human beings. We all make mistakes. We often say that you have to.
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B
Fail to succeed, that learning from failure, that learning from adversity as well as success. We often ask our guests on Redefiners whether there was a moment as they look back on their careers that redefined them, whether because it was a success or because it was a failure or because it was something else that was formative. You've given us some clues, but what would you say your redefiner moment was?
- [25:20]
C
I am a Vietnam veteran. I was a Navy officer on a guided missile destroyer off of North Vietnam. I did two tours. One of the jobs that we had in Vietnam is what's called plane guarding. If the planes go in the water, landing or taking off, you're there, hopefully, to pick up pilots. Our mission that particular day, and I was officer of the deck, but my ship's call sign is Fleet Fox. So we get a message. Fleet Fox, take station, which means behind the carrier, except the carrier is turning right at us because we are downwind. I have to get around them because I've just been given the task of being in trail, okay, not in front, as it turns out. So as I'm passing the. The carrier, I have to give orders to bring the rudder over so that we start a very tight turn, but I'm too close to the carrier and I'm going to end up on the far side of the Carrier, not behind the carrier. But I have a trick on my sleeve which is we have two engines on my ship and if I back, literally back full, the engine on the side of where I'm turning and go full forward on the other engine, it tightens the turn of the ship dramatically. As it turns out, we hit the mark perfectly. And then I noticed that the carrier is flashing signs. And after they're done, I said to the captain, what did they say, Captain? And he said to me, it was for you, Cuneo. I said, what was it? He said, bravo Zulu. So in the Navy, Bravo Zula means well done. The captain of this giant ship is sending a 24 year old a personal message. Great job. That was the point at which I knew I had to have a life of leadership in some way. I didn't know what way, I didn't know how serious, but I had to be there.
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A
I love that. And in your leadership principles, I mean, you talk about being a cheerleader and allowing others to dream and celebrating success publicly. Well, look, we've come to the part of our conversation called rapid fire questions. And this is really an opportunity for our listeners and Simon and myself to get to know you even better. All you have to do is respond as quickly as possible. Are you ready, Peter?
- [27:43]
C
I'm nervous, but yes.
- [27:45]
A
Don't be nervous. All right, well, we have to start with the obvious question. If you could wake up tomorrow with one one superpower, what would that be?
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C
Oh, boy, I'd like to be able to read my wife's mind.
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B
Peter, since you were in the movie business, if and indeed when someone makes a film of your life, who would you like to play you?
- [28:07]
C
Unfortunately, he couldn't be cast, but I always loved John Wayne.
- [28:10]
A
We've talked a lot about turnarounds. Tell us, outside of work, do you have a favorite hobby?
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C
I used to play golf, but I've had my spine redone so I can't play golf anymore. But I definitely loved golf. I love the idea that you have a mental prospect process and then a physical process and you get immediate feedback on how it came out. You're in the water with your tee shot or you're not.
- [28:34]
A
What is your one piece of advice that you would give any person who's aspiring to be a next gen leader?
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C
The reason that people don't learn leadership or don't become good leaders in today's world is a lack of face to face interpersonal relations experiences with a diversity of other people. Because in the end, diversity forms the best strongest teams. And I know, I've always had diverse teams, and I think it's been a big part of my successes.
- [29:09]
A
I love that. Peter. I will come up to Connecticut for a face to face and indulge in a wonderful glass of wine with you. Look, thank you so much on behalf of Simon, Russell Reynolds, myself, thank you for joining us on Redefiners today.
- [29:24]
C
All right. Well, thank you very much. I enjoyed it. Great questions, which is always very stimulating for someone like me.
- [29:30]
B
Thank you, Peter.
- [29:31]
A
Thank you to all of our wonderful listeners for joining today. I hope you enjoyed the episode and time with Peter as much as Simon and I did. We hope you have a great week ahead and look forward to seeing you on the next episode of Redefiners.