Saturday, July 19, 2008

My Kingdom for a Fish

What is the story behind the story of the Inbev takeover of Anheuser-Busch? According to the Wall Street Journal, it was really all about the fish that got away. And also a function of the hubris of August Busch III.

In a story it offers as a
footnote the Journal begins by explaining that if Anheuser Busch had had a controlling stake in its Mexican partner, Grupo Modelo-- brewer of Corona Extra-- it would have been too large to be taken over.

AB has had a stake in Modelo for more than a decade but the Mexican firm has refused to allow AB to control it.

When the question first arose in the early 1990s the two principals, AB CEO August Busch III suggested that he and Valentin Diez, major shareholder and executive in Modelo, go on a three day fishing trip to Cabo San Lucas, the better to build trust.

On their first day out Busch hooked a marlin, no small accomplishment itself. While he was reeling it in he received a phone call. He passed the rod and reed to Diez, a man who had little experience with this level of sports fishing.

After finishing the call Busch announced that he had urgent business in the states and had to leave immediately. He order the Modelo representatives to reel in the marlin immediately. This is easier said than done. It takes hours, not minutes, to accomplish such a feat.

Busch could not wait. He told them to let the fish go, cut short the fishing trip, and dumped his presumptive colleagues off at the marina.

Modelo concluded that it would not allow itself to be controlled by such a man.

It was willing to raise money by selling him a stake in the company, but it was never willing to give him control. Would you want to be taking orders from such a man or be subject to his whims?

You might ask yourself this: what if Busch III really had urgent business to attend to? Any executive would understand that.

True enough. A good executive would not, however, barked orders. He would not have assumed that his business was the only business that mattered. He would have presented his problem to his guests and would have tried to negotiate an amicable solution.

Busch III was acting more like a Drill Sergeant than a General. Who wants to work for someone who does not know who he is?

The moral of the story, in three parts:
1. Be careful what you fish for...
2. Respect is not a one way street...
3. It is more blessed to give than to receive respect, but if
you fail to give it you are far less likely to receive it.

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