Originally published in Nikkei Asia's “Henry Kravis: My Personal History"
Chapter 11
Right or wrong, they are sticky and quotable
Much has been said and written about the RJR Nabisco deal (1988), so I won't dwell much more on that one deal in these vignettes other than to say that there was an unpleasant by-product of that story. We were labeled "barbarians." The stigma mostly came from the title of the 1989 book "Barbarians at the Gate," which depicted the inside story of the buyout of RJR Nabisco and became a worldwide bestseller.
After that, every time we visited a company, we had to start by explaining to the board of directors that we actually had ideas, resources and were there to help them achieve their vision and potential. Reputation and trust are crucial in business -- whether you are raising capital or trying to invest in a business -- and while most corporate executives quickly realized our true intentions of partnership, the "barbarian" label persisted. Even today, that perception lingers more than it should.
This label also affected our interactions with the media. At the time of the RJR deal, George Roberts and I were not particularly eager to engage with the press. We were a private company, focused on our work, and thought we could remain under the radar. However, our silence often led to distorted portrayals of our business. In 1988, the Financial Times named George and me as their "Person of the Year," and despite our reluctance, we agreed to an interview. I remember joking with the reporter, "What did you think I was -- someone with two heads and horns?" The reporter replied, "Close."
Right or wrong, labels are sticky and quotable. In a lighter moment, a German politician once called our industry "locusts" during a dinner. I responded humorously, asking if a locust or a barbarian was better. He responded that I shouldn't take it seriously, he was just trying to get elected, but it underscored the persistence of misconceptions. Today the word barbarian has become accepted shorthand in journalism when discussing acquisitions. It has become a trite cliche.
Years ago, I told The Nikkei that "one should know the facts" before putting a label on something. My thinking hasn't changed. Labels can distort reality, but our focus has always been on integrity, partnership and helping businesses grow. Despite the noise, that's what truly matters.