Fast Talk: My Toughest Assignment

Jeffrey Sachs

Director
The Earth Institute at Columbia University
New York, New York

Poland, 1989. It was that country's first attempt to make the transition from communism to democratic capitalism, and I was the country's economic adviser. The biggest threat was chaos. Poland had a moribund economy, a foreign-debt crisis, and what I came to call socialist hyperinflation. Everything was so uncertain.

Vision was key. I took the slogan of the revolution -- The Return to Europe -- and used it as my compass for economic reform. I told the Solidarity leadership that there was a way out of the maelstrom: You can stop hyperinflation and make the transition to capitalism and a democratic government. They were worried about the foreign debt. Ignore it, I said. Send a postcard to the creditors and say, "Thanks very much, we're not repaying the debt." (They eventually did that, politely, and a substantial portion of the debt was canceled.)

I'll be honest: I improvised. In one very dramatic night, racing to meet an overnight deadline, a colleague and I came up with a 10-page plan of action for the transformation from communism to capitalism. When problems seemed insurmountable, my solution was to ignore them by assuming them away. I don't know where that sense of confidence came from. I walked into the situation truly knowing at a gut level that there was no reason life had to be as bad as it was. It wasn't a natural disaster. It was human made and therefore human correctable.

The experience spoiled me; it made me believe that clear mandates and ideas backed by good energy will overcome all problems. Now, it doesn't always work out so well; it didn't in Russia. But it gave me the confidence to take on my current assignment: tackling financing to fight AIDS and other disease epidemics in poor countries. That's a tough assignment too.

Alec Gores

Founder and chairman
Gores Technology Group
Los Angeles, California

Once you've figured out how to turn around something like the Learning Company, which we acquired from Mattel, you feel like you could fix any broken company in America.

We've been acquiring companies for nearly 20 years. Under one roof, the Learning Company had virtually every problem we've ever encountered. It was losing $1.5 million a day. Meanwhile, nobody was talking to anybody; everyone had forgotten about the customer; decisions were based on gross margins that weren't real; product channels were overstuffed, and excess inventory was being counted as revenue; there were too many facilities; the list goes on.

It was a colossal and complex mess. The company was a combination of 70 prior acquisitions. To come up with an effective plan, we needed accurate information. So we talked to people at every level. Second- and third-tier employees often know what's going on and how to fix it; they just don't know how to execute.

But most nerve-wracking of all was the attention surrounding our work. We'd never done such a high-profile deal before. The stakes were high, but I didn't realize how high until we signed the deal. The phone rang off the hook; the press was all over the story. And everyone was saying the same thing: Is this guy out of his mind? We were on the hot seat and had to get the job done.

We did. Within 70 days, the Learning Company was turning an operating profit. It was my biggest deal ever and by far the messiest. But I came to learn that really big problems at really big companies often present advantages. You have more at stake, but you also have a lot more room and money to make things happen. And the problems generally are the same, whether they're in a $50 million company or a $1.5 billion company. Somewhere along the way, companies lose sight of their core business. Our job is to reconnect the company with its customers and start building value again.