Steve Forbes on how Forbes magazine has survived and thrived
Steve Forbes is chairman and editor-in-chief of Forbes Media.
His grandfather, Bertie Charles Forbes, started Forbes magazine in 1917.
His new book, “Reviving America: How Repealing Obamacare, Replacing the Tax Code and Reforming The Fed will Restore Hope and Prosperity” co-authored by Elizabeth Ames came out in December.
He writes editorials for each issue of Forbes under the heading “Fact and Comment.” A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award four times. The prize was formerly given by U.S. Steel Corp. to the financial journalist whose economic forecasts for the coming year proved most accurate.
In both 1996 and 2000, Steve campaigned for the Republican nomination for the presidency. Key to his platform were a flat tax, medical savings accounts, a new Social Security system for working Americans, parental choice of schools for their children, term limits and a strong national defense.
He graduated with a B.A. in history from Princeton in 1970.
At Princeton, he was the founding editor of Business Today, which became the country’s largest magazine published by students for students, with a circulation of 200,000. The magazine continues to be published today by Princeton undergraduates.
Forbes spoke Wednesday morning with Talking Biz News about the 100th anniversary of the magazine. What follows is an edited transcript.
What do you remember about your grandfather and how he kept the magazine going during tough times?
I was around 6 years old when he died. So I remember him as a man with gray hair, and long hair, which in the 1950s was not the style. Years later, I asked my father why grandpa had such long hair. And my father replied that if you live the Biblical span of three score and 10, you can do anything that you want. So he let his hair grow.
He was an immigrant to this country. He was No. 6 out of 10 children. He always wanted to be a business reporter and his own boss. When he came here he had a hard time getting a job. So one day he offered an editor to work for free to show him his worth and hopefully get hired. He knew that just doing everything the same old way was getting him nowhere.
And he got the job. But he was so full of energy and ambition he used a nom de plume to get a job for another business newspaper. And the editors then got into an argument about which reporter was better.
We heard stories about how well Forbes did in the 1920s. William Randolph Hearst, the subject of the movie Citizen Kane, offered tens of millions of dollars to buy his company in 1928. And four years later, the company was bankruptcy in everything but name only because of the Great Depression.
He relied on his syndicated column and freelance writing to keep the business afloat. Every fourth week at Forbes you didn’t get paid. In those desperate times, ’32 and ’33, people were just happy to have a job. And my grandfather just couldn’t cash his own check. He just put them in a safe. Years later, he took them out and cashed them.
We learned about good times, rough times, and then the changes the company has made over the years. The nubbin of it was that nothing stays the same. You have to make things happen, and events control you more than you control events.
What made your father Malcolm Forbes unique in the world of business journalism?
My father had been a machine gunner in World War II and recovered, thankfully. He started to make changes in editorial. Back in those days, it was mainly freelancers. He started to make the change to make it staff written. And we started to focus on statistics, rating mutual funds, which was way ahead of the crowd.
That was how we got to do the 400 richest and the lists we do today. He was the one that pushed for the Forbes 400 in the early ’80s. The editorial staff thought he was nuts. My father insisted.
Editorial said it was impossible. My father said if you’re not going to do it, I’m going to do it. Editorial capitulated and found out that by digging, talking to competitors and friends, you can unearth a lot of information. It became a huge success editorially and financially.
My father recognized that it was not good enough to have a good product. You have to market it. How it was shaped, the feel and the color, goes into how a customer would react. Steve Jobs recognized the same thing. My father recognized that. He went big on branding Forbes, with the Faberge eggs and the balloon and the motorcycle riding. Success and the good life.
That reputation lives to this day. Entrepreneurs see Forbes as understanding their purpose in life better than anyone else. We’re like the drama critic. We love it when it is done right, and hate it when it is botched. We see the essential goodness in free markets and capitalism.
We’ve been pushing that every since.
What did former editors Jim Michaels and Laury Minard mean to the magazine?
Laury Minard had a great mind. He also understood not just economics in the narrow mathematical sense, he understood the intellectual basis of economics. He saw it with a scope that many others didn’t, which made him a great editor.
Jim Michaels, more than anyone else, created the great editorial product of Forbes after the war. He became the full editor in 1961 and served in that role until 1999. Forbes became a junkyard dog in evaluating companies and digging out stores.
Michaels felt that if you could understand numbers and figure out a balance sheet, you could work for him. He could teach you how to write. He was a relentless editor. He grew up at a time in the 1930s and ’40s in the days of the telegram where you were paid by the word. The articles were sharp and focused. He always hammered home that you’re writing for the readers, not your peers. You have to put yourself in the mind of the reader. What are they going to get out of it, quickly?
What did Forbes magazine do that set it apart from other magazines?
The scope of what we do, whether it’s looking at trends, we always focus on people. My grandfather always said you learn more about the prospects of a company when you look at the head noggin, which is what he called the CEO, than the balance sheet.
For a long period of time, except World War II, it was thought that big organizations were the wave of the future. Small business had their place, but it was serving the food chain of the big companies. What Forbes does is provide the tools for people who want to get ahead, who want to do business, who want to invest.
Warren Buffett said that a great CEO must have the mind of a great investor, and a great investor must have the mind of a great CEO. They’re mixed together for maximum impact. Whether it’s success, achievement, what goes right, what goes wrong, there are always lessons to be learned. It’s not just doing a story. It’s what is the lesson, big or small?
What do you see as the future of Forbes?
It should be a good one. We take to heart what Peter Drucker, the management guru, once said. Businesses should always remind themselves what their mission is. If you remind yourself what you’re trying to do, you’re not likely to get hung up if the means to do that changes. We’ve seen the whole world change upside down in the print magazine business. While the tools may change, the purpose does not. As long as we adhere to the spirit of our founder, as long as we do it, Forbes will be around in 2117.
Why did the family decide to sell a controlling stake? (Forbes Media is now majority owned by Chinese investors.)
When you have families, you have members, and their interests diverge, not a surprise. You have to take recognize of that. Some of us are in the business, and some of us have gone their own ways. And that’s fine. We’re not cut from the same cloth.