Business secrets of the Mafia-Part 1
“In 1986, I was the youngest Mafia leader in Fortune Magazine’s Top 50 Bosses list,” says Michael Franzese, 63, at his talk in Singapore last month.
Franzese, who was 35 at that time, was number 18, just five ranks below the infamous John Gotti.
“Out of the 50 in that list, I am one of the few still alive today,” he continues. His father, Sonny, was the underboss of the powerful Colombo mob family in New York. Sonny, now in his 90s, is serving yet another jail term.
A pre-med student, Franzese never thought of entering the family business until his father was imprisoned.
“All I wanted was to get my father out of jail, so I asked him to sponsor me into the Family,” says Franzese. “I took the oath and became a ‘made’ man.”
Franzese soon “had interests in labor unions, construction, entertainment, sports.” His illegal businesses included bookmaking, loan sharking, tax-evading gasoline operations.
He also had legitimate businesses like auto dealerships and repair shops, nightclubs, restaurants, catering halls. He played the stock market.
“I controlled bankers and accountants. I had vice presidents and CEOs of major corporations on my payroll.”
All his businesses, whether legitimate or otherwise, gave him and the family $6 million to $8 million weekly, “give or take a mil.” US news anchor Tom Brokaw called Franzese a “prince of the Mafia, as rich as royalty.”
Crime ultimately does not pay, Franzese says. He was indicted four times and beat the system, but on the fifth time, he decided to plead guilty. Spurred by his love for his wife, Camille, and a renewed faith in God, Franzese left his life of crime and chose to go to jail. He has never betrayed any of the family and has stayed silent up to now.
Now out of prison, Franzese has become a motivational speaker for churches, schools, communities, businesses.
As a mobster, Franzese did a lot of illegal businesses, and paid the price. But he also operated a number of legal ones.
“To operate any business successfully, one must possess certain qualities and adhere to a certain philosophy,” he says in his book “I’ll Make You an Offer You Can’t Refuse.”
“Without earning [any] degree, and in many cases without even graduating from high school, mobsters have managed to operate and dominate legitimate businesses having annual revenues in the hundreds of millions of dollars… Many of the mob executives … would have been equally successful in … corporate America.”
Franzese is in no way glamorizing organized crime, and today, he would not allow his daughters to date a mobster, or his son to enter the mob. But the mob is a family business after all, a hugely successful one at that. The boss is CEO; the underboss, COO; the consigliore, general counsel; the capos, vice-presidents; the soldiers, staff and other employees.
Caveat: The business strategies outlined by Franzese below are to be used for legitimate dealings. Crime does not pay.
Work Hard and Focus
“I never met a successful mobster who didn’t start his day at the crack of dawn,” says Franzese. “Mob guys love the night life … but regardless of what time I hit the sack, I was up when the rooster crowed and ready to work. 15- and 18-hour workdays were my routine.”
“People who succeed in business do not plan their day around what’s easy and convenient. They take what’s hard. I am not saying that hard work alone will guarantee success. There are no guarantees. I know lots of men and women who work very hard, yet don’t achieve any meaningful success. On the other hand, I don’t know of anyone who has experienced success without working hard to achieve it.”
Franzese’s father once told him that in business, “ya gotta watch everything that’s going on. Ya gotta have eyes in the back of your head.” That means that “the boss has to have his eyes focused more than anyone else. If he starts slacking, someone’s going to yank the slack out of his rope.”
Choose people wisely
Businesses flourish because of good employees. According to Franzese, they should be reliable, capable, honest. These include advisers and directors. In the recent global recession, boards of many financial institutions failed in governance, with disastrous consequences.
Good advisers know the ins and outs of your business, so they can give reasoned advice. They can give wise advice, even if you don’t want to hear it. They should never flatter, and can stand up to you if needed.
“A consigliere is a safeguard to your own shortsightedness, lack of information or perspective, even your own bad judgment.” He can be a friend or relative, a trusted employee or an outside adviser.
(To be continued next week)
Queena N. Lee-Chua is a board director of Ateneo de Manila University’s Family Business Development Center. E-mail the author at [email protected].
