“You have to want to be successful in a way that almost consumes you because it’s going to be tough to win.” with Michael Tennenbaum and Chaya Weiner
I think any profession is going to be demanding if you want to be very successful, and you shouldn’t enter it unless you can’t help yourself. You have to want to be successful in that undertaking in a way that almost consumes you because it’s going to be tough to win. You have to want it more than most anything else. This applies not only to written endeavors, but in business and any other parts of your life, as well. As Vince Lombardi said, “If winning isn’t everything, why do they keep score?”
I had the pleasure of interviewing Michael Tennenbaum. Michael is the founder of Caribbean Capital & Consultancy Corp., a co-founder of Tennenbaum Capital Partners, LLC, and a former general partner of Bear Stearns, who introduced innovations in investment banking, risk arbitrage, and options during his Wall Street career. His book, Risk: Living on the Edge, will be published in August 2019.
Thank you so much for joining us! Can you share a story about what brought you to this particular career path?
In 1961 I was still at Harvard Business School when one of my classmates, John Bloomberg, told me he was leaving his job as a research analyst at a small Boston brokerage firm. He said they were looking for his replacement and he wanted to recommend me. I had no experience whatsoever, and up until that point had been grappling with the idea of becoming a teacher. But the pay was good, so I took the job and quickly learned that writing research reports wasn’t for me. However, something positive did come from this experience. The opportunity led to the realization that I could work as a stockbroker — -nevermind that I had neither experience nor clients. All I knew was that I was excited by the prospect of what could happen and the thrill of the unknown in a way that I had never felt for teaching. Taking this risk and throwing myself into it with abandon kicked off a pattern that shaped the rest of my career and my life, and eventually led to my book, RISK: Living on the Edge. This was one of the first times I learned that sometimes it’s the biggest risks that pay off.
Can you share the most interesting story that occurred to you in the course of your career?
One of my proudest achievements in my investment banking career came in 1992, with my design of a method to properly convert non-profit health plans to for-profit health plans. Blue Cross had initially been conceived of as a nonprofit. In 1982, they merged with Blue Shield, becoming Blue Cross Blue Shield, the oldest, most experienced provider of health coverage in America. They expanded to nearly every zip code in the country, covering 96 percent of hospitals and 93 percent of physicians. Today the company has more than 106 million members. During the 1980s, the health industry in California was dominated by for-profit health insurers and medical conglomerates. To exploit this growth, the managers of some nonprofit health plans converted them to for-profit plans. State laws allowed these conversions, as long as the full fair market value of the business was given to charities focused on the same communities that were served by the nonprofit companies. But, it wasn’t working out that way. Managers were hiring accounting firms to report the net worth of the business and not their fair market value. This allowed managers to buy at a fraction of the true economic value. The conversion process was supervised by the Department of Corporations (DOC) commissioner, who reported to the California secretary of business, transportation, and housing, When Carl Covitz became secretary, he saw what was going on, and he immediately called a halt to this inequity.
Covitz instructed the DOC commissioner, Thomas Sayles, that he must provide a real valuation of the next plan that sought conversion. That plan was HealthNet. It proposed to pay $100 million cash (which equaled its net worth) to a new charity, the California Wellness Foundation. It was an outrageous bargain for HealthNet. Secretary Covitz quickly figured out what was going on. He knew my work, and he asked me to put a stop to the conversion, which I did. I looked over their conversion plan and believed that HealthNet could earn a lot of money in the new environment, so it was worth much more than $100 million. By comparing HealthNet to similar companies, I found it seemed to be worth several hundreds of millions of dollars, but I had to design a deal that didn’t bankrupt them. There were legal challenges to the deal, but ultimately a judge ruled that it was a good result and it became a new precedent!
I was really happy about the result. Not only did I manage to change the way these deals were done in California, but my prediction was accurate. After only two years, the California Wellness Foundation was worth $800 million. This health-care conversion was one of the most personally satisfying of my investment banking career. My plan was the original creation of restructures that made new California law, which ended the unfair pricing that had shortchanged charities.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Like everyone, I made mistakes when I was first starting out in my career on Wall Street. The one that stands out in my mind is when I jumped the gun on my first investment. The purchase seemed smart at the time一it was selling for a dollar a share, but eventually it went down to zero. I jokingly said after the fact that I wanted to use the certificate as wallpaper, but the experience taught me something about impulsivity and doing my research. I learned not to buy things simply because the price was low, and instead to apply the same rigorous analysis I used for my clients to my own investments.
What are some of the most interesting or exciting projects you are working on now?
My company Caribbean Capital & Consultancy Corp. is based in San Juan, Puerto Rico, and we’ve been doing years of research into the economics of the current fiscal situation in order to find ways to invest in the island. Especially in the last few years, there’s been a lot of opportunity for job growth and improvements to infrastructure, and my company has been examining where we can invest in order to do the most amount of good for the people of Puerto Rico. I think there’s growth potential in the agriculture, new technology, and tourism sectors, and we’re pursuing some of these.
What is the one habit you believe contributed the most to you becoming a great writer? (i.e. perseverance, discipline, play, craft study) Can you share a story or example?
The habit that I believe contributed to my becoming a writer and to achieving success in business stems from my early interest in theater. I got involved in theater during my time at Georgia Tech, and participated for all four years of college. The DramaTech stage was theater in the round, a specific style where there is a central stage and the audience is on every side, so it’s more complicated to present than traditional theater. The actors line up in the aisles and you have to block out very precisely everyone’s position on the stage. As an actor, you’re very connected with the audience this way. It forces you to retain your composure when things don’t go as planned. For example, I always tell the story about one of our dress rehearsals when another actor spoke his lines with an elaborate flourish of his cape, which caught on the hilt of a large steel sword lying on the table that started spinning erratically toward me. I had to react in real time and recoiled in horror一everyone burst out laughing but I made it out unscathed.
Experiences like this helped in life when I had to make presentations and to persuade people to do something I wanted them to do. I think learning how to do that and do it effectively was very important. This helped my career because it taught me how to address a group of people and to remain composed, a skill that was beneficial in many endeavors throughout my life. I’ve met a lot of incredibly intelligent people who don’t have the ability to explain a complicated idea in a concise and persuasive way.
What is the main empowering lesson you want your readers to take away after finishing your book?
The lesson I want my readers to walk away with is how important it is to develop a deeper understanding of themselves. For people whose brain is wired for risk (like me), they can find that it influences their behavior in every direction and it may be overwhelming at times. Some people may feel that they’re addicted to risk and that pervades their life and concerns them. From this, I hope they can find assurance in my book, and in the ways I learned to manage and optimize it. One such way I learned to do this was through mindfulness, a practice that became crucial to me. I studied with a Buddhist monk from Tibet who had worked as the Dalai Lama’s secretary, and learned that by utilizing ancient techniques you can help control your brain function in most actions. Cultivating mindfulness can work to reduce impulsive behavior and to help you take carefully evaluated risks.
What was the biggest challenge you faced in your journey to becoming a bestselling author? How did you overcome it? Can you share a story about that that other aspiring writers can learn from?
The biggest challenge I faced in my journey to becoming an author was trying to overcome my hatred for rewriting. Eventually my desire for the book outweighed this aversion. Something I would like aspiring writers to know is that writing a book is a brutal process but ultimately is a labor of love. I have seen women who were pregnant and so uncomfortable for months and months, but when they finally had the baby, they loved it unconditionally and the discomfort and pain were worth it. I think it’s similar with writing and the rewriting process in general. You spend so much time and energy on this project and you may feel like quitting at times, but when you finally get the finished book it’s good and exciting and really is your baby.
Which literature do you draw inspiration from? Why?
I read mostly history, biographies, and public policy books, and particularly enjoy reading stories of people who were outstanding in many respects. These are the stories that inspire me to do good.
How do you think your writing makes an impact in the world?
I think people who are risk takers may not understand how pervasive that predisposition is and how addictive it can be. If my book encourages them to reflect on their life choices and to dispassionately evaluate their important decisions in real time, then they might be able to filter out the negative effects of being a risk taker and to benefit more from the positives.
What advice would you give to someone considering becoming an author like you?
I think any profession is going to be demanding if you want to be very successful, and you shouldn’t enter it unless you can’t help yourself. You have to want to be successful in that undertaking in a way that almost consumes you because it’s going to be tough to win. You have to want it more than most anything else. This applies not only to written endeavors, but in business and any other parts of your life, as well. As Vince Lombardi said, “If winning isn’t everything, why do they keep score?”
What are your “5 things I wish someone told me when I first started” and why. Please share a story or example for each.
When I was starting out I was told many things that were true, but discouraging. If I had been told five more discouraging things, I might not have stuck with this work and wouldn’t be where I am today. Here are five lessons from my book that I wish someone had told me.
- When you’re starting from scratch, you need boldness to win.
- Listen to the conventional wisdom, then follow your own analysis.
- If everybody else is doing it, there’s bound to be a better way.
- The sweetest rewards are those you win for betting on your own creations.
- Not every deal works out as anticipated.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I’ve recently been studying war. It’s been going on for thousands of years in one form or another but in recent years there have not been any winners. The “winners” end up trying to rebuild the country they destroyed to change the politics, and most of the war initiatives in the last hundred years or so have been losers for everybody. I’ve been trying to find some way to help illuminate the causes of war and to publicize the failures, and maybe to suggest some mechanism as an alternative to the system in place. It seems to me that anybody who can figure out a way to avert wars would have a hell of an impact. This is just an early work in the beginning stages.
How can our readers follow you on social media?
You can follow my work and learn more about the book at https://riskthebook.com/
Thank you so much for this. This was very inspiring!
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About the author:
Chaya Weiner is the Director of branding and photography at Authority Magazine’s Thought Leader Incubator. TLI is a thought leadership program that helps leaders establish a brand as a trusted authority in their field. Please click HERE to learn more about Thought Leader Incubator.
