BILL McGOWAN: TO THE EDGE AND BACK
William G. McGowan is angry. As he sits in his beige and blond-oak boardroom in Washington, D. C., his hands chop the air, and his ruddy complexion flushes. This time, his rage isn't directed at his nemesis, American Telephone & Telegraph Co. Nor is it aimed at vacillating federal regulators, habitual targets of his ire for the past 20 years. McGowan, chairman of MCI Communications, is off on a tirade about one of his greatest loathings: corporate bureaucracy. "The greatest handicap in running a company is that organizations hate to change," he says. "You're always at risk for getting chains of committees, manuals, procedures."
It's vintage McGowan--a reminder of how ferociously McGowan himself resists change. In December, 1986, a massive heart attack nearly killed him. Instead, he had a heart transplant and went back to work. Now, four years after his closest associates expected him to be only a memory, MCI's founder continues to pound away at the themes that are dearest to him.
As ever, McGowan is plenty busy as MCI grabs for niches and fends off countermoves by AT&T. His 1990 acquisition of long-distance carrier Telecom USA helped push MCI's 1990 revenues to $7.68 billion, a 19% gain. But a $550 million write-down for network improvements and slow growth in the fourth quarter pummeled MCI's stock, which suffered a 54% drop in 1990, including an 11% tumble in a single week in November. Since then, it has outperformed the surging Dow and has reached about 27--near its October level.
PHILANTHROPY. Fiercely private, McGowan has preferred to say little in public about his heart attack. But lately, he has become active in philanthropy and the fight against heart disease, and along with that effort has come a willingness to speak out about his experience. In a series of recent interviews, the MCI chairman and his family talked in great detail about the trauma of his heart attack, transplant, and how the experience has changed them.
McGowan, 62, doesn't pretend to be back at full speed. He has stepped back considerably from day-to-day operations, leaving that to President Bert Roberts Jr., his unofficial heir apparent. Instead, "I ask myself, what is the most critical thing I can do today? What if I don't have the strength to do everything?" The answer, he finds, lies in charting overall strategy, spotting trends, preaching the gospel of competition in telecommunications, and attacking lapses among legislators and regulators.
He has also begun to find time for activity that looks suspiciously like leisure. In November, McGowan took an eight-day trip to Europe to attend a telecommunications conference in Lausanne. Along the way, he spent three days on the French Riviera with his wife, Chicago entrepreneur Sue Ling Gin. That's leisure once unheard of--and scorned--by the combative, irreverent CEO.
Yet of the 9,000 people who have had heart transplants, McGowan has been among the most active--and he's the first chairman of a major corporation to go back to work after one. Once he knew he had the chance, McGowan had no doubt that's what he wanted to do. "It's not just a job," he says. "It's me."
BREAKTHROUGH. Setting benchmarks for cardiac recovery was not Bill McGowan's first brush with making history. In 1968, along with electronics expert John Goeken, the former management consultant launched MCI as a private microwave-radio service for truck drivers in the Midwest. McGowan's push to win access to the phone network unleashed forces that broke AT&T's 100% monopoly and provoked the restructuring of the nation's communications industry. In the early 1980s, McGowan harried the Bell System in federal court, before regulators, and in Congress, winning the right to provide long-distance service to millions of customers. In less than 15 years, MCI's revenues grew a thousandfold.
But in 1986, MCI was facing a crisis. Having recruited 2.9 million residential customers with lower long-distance tolls, it watched its access charges soar and its price advantage shrink alarmingly. By yearend, the company had laid off 2,400 of its 16,000 employees and recorded a staggering $444 million loss. As he had for 15 years, McGowan kept working 12- to 15-hour days, smoking at least three packs of Larks, and gulping perhaps two dozen cups of coffee a day. Stiff drinks were frequent, exercise was out of the question, and vacation was irrelevant.
But if McGowan was a whiz at sniffing mut nascent industry patterns, he was blind to his own high-risk profile. Nor was he shadowed by fears of mortality. McGowan had grown up in a robust family headed by Irish immigrant parents in Pennsylvania's coal country. His father, known as Big Andy, was a railroad engineer on the Jersey Central. He was "a big brute of a man" who lived into his 80s, and "there was no sign of heart disease in my family," says McGowan.
Even so, McGowan took what seemed like prudent action. He had never been hospitalized, but in late October, 1986, he checked into the Mayo Clinic for a two-day physical. He underwent heart exams, including a resting electrocardiogram and a treadmill test. Although he brushed off the clinic's advice on how to stop smoking and manage his diet, he recalls getting a clean bill of health. (A spokeswoman for Mayo said the clinic cannot comment on any patient's case.)
COLD AND CLAMMY. McGowan's crisis began eight weeks later, right after his 58th birthday. Five days before Christmas, he was digging sand fences along the dunes at his Virginia Beach vacation home. He felt something vaguely "funny" come over him and sat down, but then resumed digging. The next day, after lunch, a cold, clammy feeling spread through his chest. This time, he knew he was having a heart attack. After two days in the hospital there, nurses asked if McGowan would be going home for Christmas so they could close the ward. Sue Gin responded by chartering a helicopter to fly McGowan to Washington's Georgetown University Hospital.
"I was told I'd had `the businessman's heart attack,' " he says. "I thought I'd be in the hospital four weeks, at home four weeks, and then back at work an hour or two a day." That may be one reason he insisted on no public announcement. Not until 16 days later did word of his illness reach the press--a delay that Wall Street criticized and that later contributed to doubts about McGowan's recovery.
What McGowan had suffered was no eight-week interlude, however. It turned out to be far closer to one of the half-million fatal heart attacks that fell Americans each year. McGowan went home after a month in the hospital, tried keeping in touch with his office via electronic MCI Mail, and gamely joined an exercise group of recovering heart-attack survivors. "The problem was, I didn't improve with exercise," says McGowan. Family members watched as he weakened on brief neighborhood walks. In February, he returned for the first of a series of new hospitalizations.
SCARY SIGHT. McGowan realized only gradually the severity of what he faced, but he knew what to do for the company: He asked V. Orville Wright, MCI's 66-year-old retired president, to serve as acting CEO. Earlier, Wright had agreed to step in if McGowan were ever incapacitated. Wright saw McGowan's worsening condition with a starkness that both McGowan's wife and his brother and confidant, Monsignor Andrew Joseph McGowan of Scranton, Pa., might have resisted. "It did not look like he would pull through," says Wright. "He got in very bad shape, though not quite a living vegetable. But from late January to May 1, he was not in this world."
No one agrees on whether McGowan or his doctors first broached the subject of a heart transplant, but the idea initially stunned his retinue when it came up in early April. "It's not something that's real acceptable when you're first introduced to it," says Gin. What McGowan did reflected the pragmatism his executives know well: "He began to manage his heart like he managed the business," says MCI President Roberts.
McGowan's wife and his brother, known to the family as Father Joe, conducted encyclopedic sweeps of medical literature by computer. Gin's research revealed that in the previous few years, heart transplants had gone from a high-risk gamble to a largely predictable procedure with a one-year survival rate of 70%. And most of those patients resumed an active life.
Within a week, McGowan and Gin had decided to go for it. Father Joe was the holdout. "I was kind of resistant, and they both gave me that look--as if I were being ridiculous," he says. "Transplant was something so far above what I was familiar with that I began calling Bill one of the astronauts."
Feeble but spirited, McGowan began lobbying for a spot on the transplant list at Pittsburgh's highly regarded Presbyterian University Hospital. Because of the chronic shortage of donor organs, this became a crucial step. More than one in four patients accepted for a transplant dies before a suitable heart can be found, and thousands more never even make the list. "They don't tell you how to fit the profile," says McGowan, but he knew in part what he was up against. He was slightly older than most candidates and beyond the 50 or 55 years that many centers (though not Pitt) were using as an age cutoff. His recent test results from the Mayo Clinic became a godsend: "You have to prove there's nothing else wrong with you, and I could use those tests," he says.
On one central criterion--having a life expectancy measured in months or less--he had no problem passing muster. His weight had plummeted from 185 pounds to 120 since the heart attack, and his heart was unmistakably failing. On Good Friday, McGowan was flown in a private jet to Pittsburgh. Dr. Bartley Griffith, the surgeon who performed the transplant, promptly put him on intravenous drugs to stimulate his heart, and within days, inserted a balloon pump in McGowan's aorta to assist circulation.
The battle of nerves continued. McGowan had to hope for a donor organ, since his own heart had all but given out. Griffith started thinking he might have to remove the heart and place McGowan on the Jarvik artificial heart until a donor could be found. But eight hours later, a heart matching McGowan's blood type, tissue type, and size became available. "That day, we had all gone to mass with Father Joe. Then we got the call," says Gin. A transplant team chartered a jet to "harvest" the donor heart, plunged it into an ice-cold saline solution, and flew back to Presbyterian within the four hours the heart could survive. "They hold air traffic for the hearts," McGowan says with awe.
As the flight touched down, he was readied for surgery. McGowan remembers waving to his family as he was wheeled toward the operating room. No less than 17 relatives waved back--his wife had learned that hospital officials encourage family support. Six hours and 10 minutes later, Griffith closed McGowan's chest over a heart that had belonged to a 20-year-old car-crash victim. "I call it a cardiac transplant," McGowan says. "I don't use the word `heart.' That would be dragging a lot of baggage with you."
VIVID DREAMS. After surgery, McGowan drifted in and out of consciousness for days, subject to vivid dreams and hallucinations. At one point, he imagined that the entire critical care unit was flying in an airplane. "Forget the first 10 days. It's a world you can't even describe," he says. But the day after surgery, McGowan roused himself to demand a pad and pencil. Once again evoking his dubbing as an astronaut, he scribbled: "How many hours since launch?" A nurse misread his unsteady scrawl and thought he was asking about lunch, but Father Joe caught the allusion and answered: "Thirty-one."
Within two more days, McGowan--in a gauze mask to protect him against microbes that could have been especially dangerous to his immune-suppressed system--took his brother's arm for a brief walk down the hall. "He called it `the lurch,' " says Father Joe. McGowan's new, healthy heart had begun to do its work, at some 100,000 beats per day. "All of a sudden, I felt my strength returning," says McGowan.
He remained in the hospital for five weeks. But as soon as it became clear that the transplant was taking and that no dangerous bleeding would occur, McGowan again took control of his future. Now, he was planning to return to work, and none of his intimates disputed his intention. Scarcely anyone could imagine Bill McGowan not exerting himself in corporate battle. Certainly not his wife, a workaholic who was then running a $10 million-a-year airline-catering company. "I don't think you can restrain Bill, and it's not something I've ever tried," she says.
NO HOOPLA. In late May, a month after surgery, McGowan returned to his Georgetown townhouse. Of that time, he says: "You're pleased and thrilled about everything." Six weeks later, he showed up unannounced at his office for two hours, a practice he continued with increasing frequency during the summer. He wanted no hoopla about his return. "Nobody knew when I'd be coming in. I was back full-time by Labor Day. By then, it was old hat when I came to work," says McGowan, who assumed the office of co-CEO with Wright.
Of course, his days aren't the same relentless grind as before. Many of McGowan's workweeks are the 40-hour kind, though he has put in as many as 60. "He's working at about 25% of his normal capacity," says Wright. As before, McGowan reads voraciously--some six newspapers and a dozen magazines. Blizzards of clips fall on his colleagues' desks. In 1988, for example, he noticed a surge in ads for fax machines in The New York Times and decided MCI should create the first customized fax network.
Despite his wish for privacy and a personal investment in appearing hardboiled, McGowan has emerged since his transplant as a leading backer of at least three philanthropies. In November, 1989, he gave $3 million to his alma mater, King's College in Wilkes-Barre, Pa., for construction of a new business school. He heads a $40 million fund-raising campaign for Georgetown's Vincent T. Lombardi Cancer Center, and he has become deeply involved in promoting transplants. In September, McGowan pledged $1 million to the University of Pittsburgh Medical Center for clinical study of Novacor, an implantable heart-assist device that could obviate the need for donor hearts.
Wright, 70, retired as co-CEO last year and is pushing the advantages of retirement to McGowan. But McGowan scorns the typical retirement scenario. "You have a date, everybody knows what it is," he says, "and then that's it--the world is all of a sudden gone. That's crazy." As he demonstrated in his stare-down with death, Bill McGowan is going to leave on his own terms.Daniel Cohen in Washington