Story posted August 18, 2010
Author: Doug Boxer-Cook
Photography: Karsten Moran ’05
Fortune magazine was founded in 1930, just four months after the Wall Street crash that marked the beginning of the Great Depression. Director of Media Relations Doug Boxer-Cook talked to Editor Andy Serwer '81 about the country's latest economic woes and his energy and optimism in the face of those challenges.
Andy Serwer '81 goes a mile a minute, which helps explain why it seems he’s everywhere at once.
As managing editor of Fortune magazine, Serwer is responsible for overseeing and directing the multimedia bi-weekly publication. He also hosts a weekly video that appears on CNNMoney.com, Fortune's online home, as part of his "Street Life" series, and contributes his Joe Everyman-style observations and analysis to a variety of programs produced by CNN, CNBC, MSNBC, and other broadcast outlets, including the Today show, Squawk Box, and Morning Joe.
Amid all of this constant activity, he has written a book, Starting Over: Why the Last Decade Was So Damn Rotten and Why the Next One Will Surely Be Better (Time Books, 2010).
Serwer sat down with us to discuss the book, the magazine, and how he keeps all those balls in the air.
Bowdoin: Why was the last decade so rotten and how did we get there?
Serwer: When you see a lot of these bad things that happen, you think, "Well, bad things happen every decade," and I decided to take a look at it and say, "were there underlying causes?" And the answer, after some investigation, pretty quickly became yes. It had a lot to do with deferral of responsibility and neglect. I think we were just sort of resting on our laurels, and there is a lot of belief that the system was self-healing, that our problems would sort of take care of themselves, that we didn't need to address things like regulation, like derivatives, like oversight, and this is strictly in the financial sector. So you start off with the great NASDAQ crash, the tech stock crash, and that was brought about by sort of fears from Y2K and that the Internet was going to change things forever, which, in fact, it did. We just got ahead of ourselves on that front. So that was difficult. Then that was sort of followed by the wave of scandals, Enron, WorldCom. That was very difficult. Then we seemed to recover and only to end the past decade with a real bad financial setback. "The Great Recession" is what we may end up calling it. We saw that, really a combination of greed and malfeasance and taking our eye off the ball, and boom! It all came together, and we’re slowly starting to recover.
Bowdoin: How can you be so optimistic that the next decade will "surely be better?"
Serwer: You hate to say there is fatalism, but it’s sort of like, we’ve been down so long, there’s nowhere else to go. Things do go in cycles, and what happened, I think, was in the beginning of the decade we were so optimistic. The Internet was going to change everything. We didn’t really need Washington. There was no need for any oversight or regulation. It was a market-driven economy. There was a new paradigm, a new economy, all these buzz words. So, if we were wildly overoptimistic then, I think we are unduly pessimistic now. When the last decade began, Alan Greenspan was reappointed as the Fed Chair. The stock market was hitting all-time highs. We were at the very end of the Clinton administration, and 9/11 hadn’t happened yet, and Y2K came and went with nary a wrinkle. So, things were looking great when we started that decade. Things look kind of rotten now still. That’s often the case. Then from a practical standpoint, I think we learned a lot from the last decade in terms of having to cope with these problems, dealing with oversight, dealing with regulations, knowing that we have to accept responsibility for things right now in the government and in the financial sector, the auto industry, and across the board.
Bowdoin: What would starting over look like? Are we going to return to some former benchmark, or will there be a new reality?
Serwer: Well, it’s going to look different. I think that the real positives of this decade we can’t even imagine, in the same way that we couldn’t imagine negatives of last decade. So, the positives are something that probably we can’t conceive of right now. Some people may be conceiving of them, and they may be related to some very obvious things, like new sources of energy. When we really solve our reliance on petroleum-based energy sources that could make the world look very, very different. You know, the new car. That could make things look very, very different. It could be a combination of different energy sources, that we come up with a sustainable, inexpensive form of energy, and there are a million companies out there doing that kind of stuff. There are other things, like we could have a real ratcheting down of tensions with these Islamic terrorists, that all of a sudden things just seem to dissipate, or again it could be something that I just don’t see at all. So, I think it will be different.
Bowdoin: It’s easy to blame some of the characters in this play—the politicians, the Bernie Madoffs. Does the news media—does Fortune—have some kind of role? People ask, “Where were the warning signs?”
Serwer: I have to say with the last and this latest financial crisis, that is a canard. We and The Wall Street Journal and the financial press were very much on top of this saying, housing purchases are unsustainable, derivatives, the risks that won’t go away. The housing market is overheated. We were all saying these things. No one understands derivatives, and those were the two approximate causes of the crash, which were derivatives of the housing market. So, I don’t really buy the fact that there weren’t warning signs. I think that we were less responsible in the tech crash of 2000. I remember we were all kind of giddy, high on that. But I don’t think people were as high on this point.
Bowdoin: As a company, Fortune has seen many changes itself. At the center of some high-profile mergers, it must have been bizarre to be the news you’re used to covering.
Serwer: Oh yeah, that’s been wild. This company, when I came here, was an independent, publicly traded magazine company called Time Incorporated founded by Henry Luce in the 1920s, and actually it’s ironic because we may end up going back to that. You know, aggregating all these properties I think you could argue did very, very little for anybody. First, I worked through the Time Incorporated-Warner merger. Then we bought Turner. The first merger was with the movie studio. The second merger was with Ted Turner, which was amazing. Then the third merger was with AOL. My feeling on these mergers is most of the time, if you want a glass of milk, there is no reason to buy the cow. I mean they really don’t make sense. Maybe if you’re a railroad and you’re buying another railroad, that kind of makes sense, but trying to put different media properties together has not been terribly successful, at this company, and that’s why we really have been sort of divesting ourselves — the record company, the book company, the cable company, AOL. And now some are suggesting that the magazine company might be next. So be it if it is.
Bowdoin: It is a difficult time of transition for magazines. Fortune’s frequency was recently cut.
Serwer: That was a tough one. We realized that to optimize our business model we would have to go down in the number of issues we’re putting out, and it obviously saves money to have less physical magazines, but we are going to be increasing the pages in each magazine. So, it is still the same sort of value proposition for our readers… And we can retain the same sense of relevance that we had before, and all I need to do is just point down the street here to Vanity Fair, which is a monthly, which is a magazine that people really look forward to reading and that is as urgent as any weekly.
Bowdoin: And as the Internet increasingly encroaches into what was a print world, what does the future hold for Fortune?
Serwer: That’s the 64-thousand dollar question. How people are going to read their news stories, and get their journalism, and get their information is just a huge, huge thing. The question is, is the magazine a generational thing? In other words, will there be no magazines 20 or 30 years from now? I don’t know. My 16- and 12-year-old daughters read magazines. They don’t read newspapers too much. I can say that. So, you know, there is something about magazines that seems to work still. It’s tactile. It’s glossy. It’s fun. It’s perfect for the pool. It’s perfect for the train. Let’s not forget, the Web is not static. The journalism is getting better. The visual presentation is getting better. The blurring between Web video and print is happening right now with Flip and all sorts of Adobe products.
Bowdoin: How do you feel about readers paying for content?
Serwer: I want to try to put up a pay wall this year, a subscriber pay wall at Fortune, so that you can get a paragraph. You want to read the whole thing? You’ve got to be a subscriber. I think that’s where it’s going. We’re talking to the other publishers in this city. It’s fascinating. It’s draining. It’s debilitating, but it’s an amazing time.
Bowdoin: Fortune is not new to the Internet game; in fact, you were one of the first bloggers.
Serwer: I started writing an online column in 1997, “Street Life.” That was before the word “blog” existed. So we saw this coming then, and our readers have been early adapters. So, what’s happened more recently though is that advertisers, obviously, have started to migrate from the magazine to the Web, and the challenge has been, of course, that the dollar they’ve paid us for their magazine advertising is now dimes online. You’ve got to sell a lot more online ads than you do in the magazine. There is a question of online ads, “will they work?” And then there is the question of journalism online. So, you can see with the conversation we are having, we want to do deep-dive narrative stories here, feature, and then online have the same news sense, the same real intelligent stories that show that we have real access that other news organizations don’t have, and do those online. So, you kind of have a bifurcated system in terms of what you are trying to produce, which is challenging.
Bowdoin: Speaking of producing, you’re constantly out there — and on virtually every platform: TV, radio, the Internet, and in print, with the magazine, of course, and now the book. People who know you say this career was custom-made for you.
Serwer: I think that there may be something to that, and I guess I kind of have a hyper personality or a hyper work ethic. I love multitasking, and I guess I have been pretty good at changing hats. Early on I kind of realized that what worked on TV didn’t work online, didn’t work for magazines. You can have the same story, but it has to be presented or told a different way in a different media. One is not better than the other; they are just different. So you have to be able to take the best newsgathering and news presentation ideas and really flesh them out. I have enjoyed doing all these different parts. It makes for a very exciting life, but it’s hard to catch your breath sometimes.
Bowdoin: And there are film roles. You had a cameo in the movie, Confessions of a Shopaholic, and you’re in the much-anticipated Wall Street sequel. Do you worry about your credibility as a journalist?
Serwer: I probably should worry about it a lot, because I look like an idiot! (laughs) In this movie [Wall Street II: Money Never Sleeps], I play myself. I don’t know if they name me. We have a CNBC-type television program scene, and it’s me and Ron Insana and Vince Farrell, who is a money manager who is often on CNBC. I don’t know if they decided to put “Andy Serwer, editor of Fortune,” on there or not. Anyway, it’s fun.
Bowdoin: Alison Bennie, editor of Bowdoin magazine, saw a recent Fortune headline, “Free Dennis Koslowski? Are You Serious?”, and commented, “That’s a very Andy headline.” Was it indeed yours?
Serwer: Yes. I don’t write all the headlines, but that definitely was me. I use a lot of sports in my mind, and that’s me like I was thinking like Dick Vitale: “North Carolina is not going to lose. Are you serious?” It was sort of ringing in my head. The guy who wrote that story was like, “Dennis Koslowski really should be free,” and there were other people on the staff who were like, “No way. He’s a crook.” So I wanted to do the story, and we were raising the question, and then I wanted to make it like men and women in a bar saying, “Are you serious? That’s crazy.”
Bowdoin: Is that a cultivated approach or is it just who Andy Serwer is?
Serwer: I think it’s a little of both. I mean, first of all that’s who I am. Early on in my reporting days, I would see that in an interview people were very stiff. And then because I knew a lot of these people, afterwards, I would go out and have a drink with them at the bar, and they’d say, “Man, Cisco rocked my world, baby. I tell you what, we are cooking with those routers.” I was like, “How come you couldn’t say that during the interview?” So I started to take business news, and I wasn’t the only one, but to be able to present business news in a way that people really talked. It made it refreshing. It made it more interesting, less boring, and it made it accessible.
Bowdoin: What lessons learned at Bowdoin have stayed with you through the years?
Serwer: Real thinking. What we do here is tell stories; to do that involves real thinking. There is a difference between just typing and storytelling. What was this person really doing? That kind of understanding human behavior is something that I really learned at the college, and understanding the social dynamic in terms of socializing — there’s that too.
Bowdoin: What is the role of Bowdoin, or of higher education in general, in terms of ethics and principled leadership? Do colleges teach that? Do parents? Is college too late?
Serwer: No. I think it is something that needs to be reinforced constantly, and we’re all reinforcing that. It’s something that happens when you are growing up. It happens in college, and it happens in the workplace. Businesses are constantly facing ethical questions. Every interaction, almost, has an ethical question. When people come into my office and ask me, “I have a question about this, this ethical question,” and I say to them 99 percent of the time, “If you’re even in my office my office asking me, what do you think the answer is?” You are making decisions, and it’s between you and your conscience ultimately, because that’s going to help you. That’s the only thing that’s going to inform you.
Bowdoin: Your book portends better days in the decade ahead; how will the next ten years be different for you?
Bowdoin: Your book portends better days in the decade ahead; how will the next ten years be different for you?
Serwer: I could use a little more peace, I guess, a little less frenetic. You know, I keep saying to myself at some point things are going to get a little less crazy. I always think like, this life, it can’t get any crazier than it is right now, and then six months later — it’s crazier. I can’t believe it. Like last night I was at a school thing, and then I had to rush back down to the city to have a meeting with Prince Al-Waleed, the Saudi prince, who wanted to talk to me at 9 p.m. about doing various things. like, I’m exhausted, and it’s like, yeah, I guess I wouldn’t trade that though.
Bowdoin: Even people who don’t regularly read Fortune know “The Fortune 500;” it’s become part of the lexicon.
Serwer: “Fortune 500” is in the dictionary, which is great. It is always great to have a part of your brand, if you will, be a word. It’s also an adjective that we love. “We’re a Fortune 500 company.” “We serve 20 of the Fortune 500 companies.” It’s in advertising copy, which is great. I think when you say the word Fortune you mean big American business. We also cover all manner of business locally, but when you think about IBM and Exxon and Wal-Mart, Dupont, Citibank, this is it.
Also: Free Association
Bowdoin: I’ll give you the name of a Bowdoin alum who is also an accomplished business person, and you tell me what comes to mind. First up, Stan Druckenmiller ’75.
Serwer: Really smart, tenacious.
Ken Chenault ’73.
He’s a class act and widely respected.
John Studzinski ’78.
Just met John. A man about town and a man of the world. He is quite the character.
Reed Hastings ’83.
Reed is phenomenal. I think this is his second company. Sometimes people don’t realize it, a second successful company. He is increasingly respected.
Larry Lindsey ’76.
Larry Lindsey is very cool. He called it when it came to the Iraq war, didn’t he? I don’t think he gets enough credit for that. I think he is also really, really bright and maybe doesn’t get enough credit. It’s quite a group.
Bowdoin: What’s the common thread, besides the obvious Bowdoin connection?
Serwer: Independent thinking. It’s like, think different. You’ve got to be smart and right, and you also have to think different.
"That's the 64-thousand dollar question. How people are going to read their news stories, and get their journalism, and get their information is just a huge, huge thing."