Fuld’s Competitive Musings

I’d like to meet Harry Markopolos. Not because The Boston Globe called him a whistleblower for attempting to alert authorities of Bernard Madoff’s Ponzi scheme as far back as 2000 (He’s not a whistleblower, by the way. A whistleblower is someone who often risks his job and career by disclosing company wrongdoing while working inside that organization). Markopolos is an outsider but a very bright and insightful one.

Why would I like to meet him? Because he is very good at searching for the unvarnished truth about a corporation.  I would like to hear from him how it felt to be ignored when he knew Madoff’s investment operation was built upon lie after lie.  I have had many such conversations over the years, conversations that start out, “But I knew something was wrong, when I figured out…” 

I make my living learning about other companies and teaching others how do so, legally and ethically.  Markopolos’ job is similar.

Here’s the rub.  Knowing the answer doesn’t mean people will believe you.  Life’s not that simple.  Human nature being what it is often is suspicious at the wrong times and in blissful denial when alarm bells sound.

Prior to the Enron meltdown I heard from at least a half-dozen analysts from around the United States, questioning the energy company’s abilities.  Basically, they could not reconcile the balance sheet as reported in SEC filings.  Fortune Magazine was among those dazzled by Enron’s rapid rise. In its October 2, 2000 issue Fortune Magazine listed Enron among its most admired companies. 

 The real lesson lies not with the intelligence brilliance of Harry Markopolos but with the need for all of us to take a second look at the contrarians who are always among us.   Nearly 10 years ago I sat with the Chairman of Motorola, Chris Galvin, who told me he always wants to see the minority report.  No matter how certain, how comfortable you may be with an answer, a popular answer, an answer that comforts or confirms, you need to pay attention to other perspectives. That is what intelligence is all about.  It’s about listening to the minority and taking them seriously.

 That is why I’d like to meet Harry Markopolos.