Moving Beyond Ordinary

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Phil Beuth admits he made a crucial mistake as Capital Cities Communications grew from a small start-up to a behemoth when it acquired the ABC TV network for $3.5 billion in 1985. He agreed to retire when he was 65.

“We made one bad one. In the late ’60s, we said, ‘Who’s going to run this after we’re all in our late 60s?’” he says. “Somebody said we should have retirement age at 65. It was the biggest mistake we ever made. We all regretted it.”

In 1995, Beuth, the first employee at Capital Cities, retired as president of ABC’s Good Morning America, after a 40-year broadcast career. In 1996, The Walt Disney Co. bought Capital Cities/ABC for $19 billion, the second largest corporate merger to date at that time.

“I only worked for one company in my whole career since graduate school, and I absolutely loved it,” Beuth says, over waves crashing outside his villa in the Caribbean. “It was an enjoyable, fulfilling, remarkable experience because it was not just an ordinary company.”

In 1986, he took on the role of vice president for early morning programming for the ABC network. The company started with one TV station and grew to eight TV stations capturing a quarter of U.S. viewership, along with newspapers, radio stations, ESPN, trade publications and interests in other cable networks.

Beuth says the New York-based chairman and president gave stations and newspapers autonomy.

“They said, ‘We have faith in you. You’re in charge,” he says. “We were encouraged to be entrepreneurs and to practice creativity.”

For example, Beuth took a chance in the late 1970s on a Burger King employee in Buffalo, New York, who told him that people said he was funny and should be on TV.

Beuth told the 21-year-old man, Don Polec, to arrive at his office the next morning. When Polec showed up, he gave him an assignment to come back the next day with five feature ideas. Polec returned the next morning with 55 ideas.

“I knew at that moment he had the confidence and creativity to do the job,” Beuth says.

Polec would become an awardwinning reporter renowned for his goofy and out-of-the-ordinary features, who worked for TV stations in Buffalo and Philadelphia and appeared on Good Morning America.

“That was just because I was able to sense with him a feeling that he cared about people and he was creative and imaginative, and that’s what I needed,” Beuth says.

Beuth, who also gave Jack Hanna his first appearance on national TV, shares anecdotes in his recent memoir, Limping on Water, about Cher, Frank Sinatra, Sir Paul McCartney, Jackie Robinson and Sammy Davis Jr., as well as Regis Philbin and Warren Buffett, who provided blurbs for the book. Buffett, whose investment helped Capital Cities acquire ABC, according to published reports, promoted the book this spring in a letter to his 40,000 shareholders.

Even as the company grew, Beuth says Capital Cities used this philosophy: Hire as few people as you can. Hire the best people you can. Pay them better than most. Involve them in the company, by offering stock ownership. Then leave them alone.

While the company set a high bar for success, its leaders set an example for integrity, he says. Capital Cities didn’t give second chances to dishonest employees, he says, and wanted its leaders and employees to operate by these rules:

• Don’t do anything to embarrass yourself.
• Develop trust by being honest and reliable.
• Respect your peers. • Leave something on the table, an idiom that he uses to talk about not taking advantage of people. In negotiations involving money, he sometimes didn’t get as much money as he could have gotten in the deal.
• Be persistent.

Beuth, who describes his job as a “love affair” with Capital Cities, offers this advice for leaders choosing a successor: Make sure that person will work within your current operational realm and can instill company philosophies in workers.

“You’ve got to have somebody who fits your [company’s] philosophy,” he says.


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