A Hard Choice for SiriusXM's Mel Karmazin

When we completed the merger of Sirius (SIRI) and XM in 2008, there was a lot of redundancy: two CFOs, two general counsels, two heads of programming, and other roles where there were two people when we only needed one. For every position, I had to pick between two qualified people.

It was very hard: About 500 people had to lose their jobs. Not because they weren't good, but because we didn't need them. I decided that we weren't going to try to find the single best person for each job. The choice was between the Sirius person and the XM person. We didn't look at anyone outside. We didn't want more people losing their jobs than was necessary.

The first thing I did was get to know the people who were going to report to me: I interviewed them and had to decide who was better. Knowing someone well can cut both ways. You know their strengths, but you also know their faults. It's not a perfect science—and I probably made mistakes—but I don't look for qualities I might have. I'm more impressed with someone who's not like me. It's because of my own insecurity: My father was a cabdriver, my mother worked in a factory, and I was a C student.

There's no best way to do something. When I first became a manager, my inclination was to think my style was right because I was the one who had been promoted. I learned it's not about style. Some people get out of a huddle and walk to the line of scrimmage while others run. I don't think that matters. What matters is what happens when the ball is snapped.

I try not to be as hands-on as I would like. People need to feel they're running their own business. I'll offer up opinions, but I try not to tell them what to do. When I make a decision, I tend to consider the facts and make it quickly. You just have to focus on the endgame. I think about what's right for our shareholders and subscribers. If I can make these decisions, anyone can.

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