Tomorrow’s Capitalist and Searching for the Soul of Business
Michael Mendenhall: He began as a nine-year-old neighborhood reporter. Can you believe this. And now serves as the CEO of a Fortune Media company. As editor-in-chief of Fortune, he previously led the expansion of the Pew Research Center’s digital footprint and spent more than two decades at the Wall Street Journal where he eventually became deputy managing editor. I’m sure that’s going to be an interesting story as to how he went from nine years old to that.
He has authored a number of books, the most recent one being Tomorrow’s Capitalist on the Search for the Soul of a Business. Here to talk with us about the evolving role of a CEO, given today’s expectations for leadership and its importance to society, is Alan Murray in conversation with Kelly Tuminelli, our executive vice president and chief financial officer at TriNet. Please welcome Kelly.
Kelly Tuminelli: Wonderful. Oh, Alan, thank you so much for joining us today.
Alan Murray: Thank you for having me.
Kelly: Absolutely.
Alan: It’s an honor to be here.
Kelly: So, Michael brought up, I heard in the intro, a story about you as a nine-year-old. So, I’m sure people would love to get to know you better so tell us about that first job.
Alan: Let’s not spend too much time on this but…
Kelly: Yeah.
Alan: It used to make me angry because I thought, at nine years old, I wasn’t old enough to choose my living but I did. For some reason, I started walking up and down the street and I would take notes on people who had lost their cat or their grandmother was visiting or they had won the swim meet and I came back and I wrote it all out longhand and I made my poor mother type it out. This is before the days of Xerox machines. I’m aging myself here. She would type it out on a special piece of carbon paper and I had a jelly sheet mimeograph machine and I could make 30 copies and I sold them for a nickel a piece. So, I did start as a journalist at a very young age and a couple of times I thought I want to have the opportunity to choose something else but never did. I loved it too much. It was too much fun.
Kelly: So, I’ll age myself. The blue ink on the jelly sheet mimeograph…
Alan: Yeah, you know.
Kelly: Well, why don’t you just briefly walk us through your journey as a journalist and then we’ll pivot to Fortune.
Alan: Yeah, I did that at nine. I edited the high school newspaper. I edited my college newspaper. UNC, by the way, if there’s anyone out there. I know Coach K was here yesterday. I skipped that. I became a business editor at the Chattanooga Times at a very young age, helped them start their business section. Went to the Wall Street Journal, worked there for a couple of decades. Michael mentioned that I did a non-journalistic detour to the Pew Research Center for a couple of years and then joined Fortune first as editor-in-chief and then, in the last couple of years of Time Inc., I was chief content officer for all 24 magazines. And then, after Meredith bought Time Inc., sold off Fortune, the guy who bought Fortune asked me to come on as CEO. So, that’s the short version.
Kelly: Great. When I think about journalism and thinking you picked that career at nine or at least that was one thing you were thinking about, journalism has evolved tremendously. One of the themes of the conference today is perseverance. You’ve persevered in journalism. You’ve had to evolve as journalism has evolved. We’ve got the internet now. It’s a soundbite world.
Alan: Yeah, it’s been huge. It’s been 20 years of massive transformation. If you think about it, okay, I’m going to make another comment that’s going to age me, but I always think about “Leave it to Beaver.” We can just pretend I watched it on MTV or whatever. But if you watch “Leave it to Beaver,” Ward Cleaver, the father was always sitting at the breakfast table reading the newspaper. In fact, it wasn’t really clear he had a job. He didn’t seem to do anything else but sit at the breakfast table reading the newspaper. And you realized, in that day, if you wanted to get to that family, the newspaper was the only way you did it. That was your sole way of reaching them. And as soon as you take that newspaper away and replace it with a computer or a smartphone, it’s a totally different game changer.
The media business has lost their business model. Our business model started to fall apart. So, it has been a really dramatic couple of decades and it was hard at the Wall Street Journal where you were trying to convince reporters who were used to writing once a day for the morning newspaper that they were writing for an audience that was 24/7. In fact, at one point I made a chart that showed when the average story was filed and it tended to be right around 5:00 in the evening. And then, on top of that chart, I said, “When people are on our website,” and it started at 6:00 in the morning and peaked around mid-afternoon and, by 5:00 in the afternoon, they were all gone. And I’d say, “You see what’s happening here? You’re filing your stories after everybody has left. We have to change that.”
It was even tougher at Fortune because, at the time, it was a once every couple of weeks magazine and a lot of the journalists were used to writing once a month, 5,000-word stories and I’d say, “No, that’s not the way this works anymore. People are reading like this, they want 300 or 400-word stories and they want updates a couple times a day.” So, it’s been a big, tough transition but it’s also been fun and challenging. That’s why I enjoy the fact that I’m now on the business side trying to... Fortune magazine was created by Henry Luce in 1930, so it’s been around for over 90 years. My goal is to make sure that it’s in a position to be around for another hundred years and I like that challenge.
Kelly: Yeah, no, that’s great. So, when we think about that transformation of Fortune and you having to work with journalists, rethink the way that the business model is done, what other things did you see? Well, one, how did you lead them? Did you have to change your leadership style?
Alan: I don’t think I changed my leader leadership style but I was very conscious of the culture change that had to happen. You know that I write 300 words every day for the top of a daily newsletter, the CEO Daily. The main reason I did that was because I felt like, if I’m going to convince these people that they have to go from writing once a month to writing twice a day…
Kelly: You had to do it.
Alan: ...I need to lead by example. So, I said, “Look, I’m running this thing and I’m still writing 300 words every day.” And that was the main reason I did it. I’ve now gotten a little bit hooked on it. So, I think, example, communication, clarity of goals, but it’s still hard. I’m sure everyone in the audience knows what I’m about to say but culture is tough. And one of the things that surprised me was you would have whole new generations come in that had come out of a digital background but still started to absorb the old magazine culture. It’s sticky. It’s hard to change and I think we’re there now but it’s taken a while.
Kelly: Yeah. Well, and the pandemic changed a lot of things related to culture as well and knowing that, all of a sudden, all these people are stuck at home having to write at home and not being able to collaborate in the same and different way. Did Fortune do anything unique because of that?
Alan: We did, we did. And you know this but the thing that really saved Fortune relative to the other magazines that came out of Time Inc. was our executive convening business. We’re doing 20 to 30 conferences a year, high-level executives, lots of sponsors, very successful business. That’s what kept us afloat. And then the pandemic hit and that business was suddenly shut down. You couldn’t convene executives and we made a quick pivot to virtual. We had never done virtual events prior to March of 2020 and we’ve probably done three or 400 of them since.
And that also cracked the code to let us create a new platform called Fortune Connect that’s designed, not for current members of the executive team, but the next generation where we’re focusing a lot on purpose-driven leadership, stakeholder capitalism, what does it mean, how do you deal with the demands of all these stakeholders competing with your financial KPIs and also diversity, equity and inclusion. That’s been very successful. We have about a thousand executives on it now from 25 different companies and we feel like we’re playing a role in training the next generation of corporate leaders.
Kelly: Yeah, that’s amazing. Actually, believe it or not, I called in to a DE&I forum at noon today…
Alan: Oh, cool.
Kelly: ...that Fortune led. I think Johnson & Johnson and a number of other companies were on it and I could only be on for about 30 minutes. But what a great forum to have people sharing ideas and how they’re doing it and how they’re creating inclusive cultures in things like biotech and making sure that you’ve got a diverse population that’s part of your sample set.
Alan: Yeah, and we’ve been surprised how much, even the CEOs, how much they gravitate to this format. If you get 25 CEOs with a particular topic that they’re interested in, one hour, for the CEOs, it always has to end at the top of the hour, but they will come together and stay there for the hour and really engage with each other. So, it’s been a learning for us but a very successful one.
Kelly: Yeah, that’s great. Well, you have just written a book and I know... Actually, I’ll show the audience. I bought Alan’s book recognizing that I was going to be interviewing him here and, like any good CFO, this was my bookmark.
Alan: Perfect.
Kelly: Yeah.
Alan: Perfect. Actually, if you buy the book, there’s one of those slipped inside every book. So, go to the bookstore and buy a bunch of them.
Kelly: But those books are about $20 more, that’s all. What inspired you to write a book?
Alan: Well, I didn’t come at this out of a... It wasn’t evangelism. It wasn’t crusading. This wasn’t a cause that I believed in. Since I was nine years old, I’ve always thought of my role as a journalist to explain the world, not change the world. But because of my position, both at the Wall Street Journal and at Fortune, I was in a unique position to interview CEOs, talk to CEOs. We did a lot of conferences, a lot of people would drop by my office. I do a podcast now that’s CEO interviews. So, I had pretty unique access and, over the course of the last 10 years, I just started to hear a very different tone in the way CEOs were talking about their responsibilities to society.
It surprised me at first, even shocked me sometimes and I, being an inquisitive journalist, an annoying journalist, some would say, I’d start asking questions. I’d say, “Why are you doing this? Why are you talking like this? What’s driving you to do it?” And the first thing they would usually say, by the way, is my employees. That was the number one answer. I think there are a bunch of other answers but number one answer was, “My employees want us to have a different relationship with society than we’ve had in the past” which I thought was fascinating. But I kept hearing it more and more and, actually, when the pandemic first hit and it became clear the economy was going to go into recession, my first reaction was, well, that’s all going to go away now because the bottom line is deteriorating and everybody’s going to have to focus on the bottom line and all this ESG, social impact stuff is going to get put on the back burner.
And in fact, I’m listening, the exact opposite happened. It increased instead of decreasing because it was a stakeholder crisis. The employees were in danger, the customers were in danger and that spilled over into the climate as well. There’s been a 300% increase in Fortune 500 companies that have made net zero commitments since the pandemic happened. So, all of these things started to pick up and I thought, “Wow, something is going on here that is not a fad. It’s not a passing phase, it’s serious,” and that’s why I wrote the book. I thought I wanted to try and understand why it was happening, what were the factors driving it, was it going to continue? The answer to that, I think, is clearly “yes” and put that into the book.
Kelly: So, what advice would you give a CEO on... we’re hearing it all the time. I think it started happening even prior to the pandemic but where CEOs are trying to decide around decision criteria on when to speak up.
Alan: Speak out.
Kelly: So, what advice do you give CEOs on what they should talk about, when?
Alan: It’s a great question and, look, there’s a distinction between what you do and what you say. So, I hope we’ll come back to what companies are actually doing but this question of when to speak out, to me, as a journalist who, for most of my career, was desperately trying to get CEOs to speak out and wouldn’t on these controversial issues, that’s the biggest change of the last decade. Ten years ago, any of these issues that we’re talking about now, the religious liberties law in Indiana, transgender access to public bathrooms in North Carolina, the riots in Charlottesville, any of those issues, every CEO that I knew would immediately hide under their desk and say, “Hey, it doesn’t directly affect my bottom line. It’s controversial. I don’t want to have anything to do with it.” Something really started to change.
In fact, one of the ways you can benchmark how big the change was is, if you look at the George Floyd event and the enormous outpouring of CEO statements that happened after that killing and compare that to Ferguson, Missouri, was it Michael Brown, which was 2015 maybe. I couldn’t remember and I went back and looked. I don’t think any CEO of any company said anything about Michael Brown’s killing.
Kelly: Five years later.
Alan: Not a word and every CEO came out. So, dramatic change in a pretty short period of time. I think it started with the Indiana religious liberties law in 2014, 2015. Marc Benioff said, “Hey, we’re going to take our people out of Indiana.” Then there was a similar event in North Carolina with the transgender access to public bathrooms and Bank of America, which was the biggest employer in the state, said, “You can’t do this or we’re going to have to consider moving our facilities.” Ed Bastian, the head of Delta Airlines, after the Parkland shootings, rescinded a discount program for the NRA even though he was in a state where a majority of the members of the state legislature were members of the NRA. And then, of course, you had the advisory councils that Donald Trump set up after the Charlottesville riots and the president’s ambivalent response to those riots pulling out on mass.
So, you had this big flood and George Floyd, in some ways, was the peak of it. And then, in the last couple of years, it’s like, wait a minute, this is a bit of a problem. We can’t speak out on everything and we don’t want to get caught in the political polarization that is tearing the nation apart. One of the reasons CEOs have stepped up on social issues is because they’re pragmatic problem solvers and they want to solve the problem and our political system has gotten so far away from solving problems. So, I now think, to your question, I’m sorry, that was a very long-winded way of answering your question, but I now think companies are saying, “Okay, wait a minute. Yes, we have to have values. We have to speak out on our values but we can’t speak out on everything and we have to be very deliberate about choosing the things that are really important to us and when we do speak out.”
And a number of the best companies have now created very deliberative processes to say, okay, what are our values? Which are the ones that we really have to defend? Do we have something to add to the debate? Do we know something here that is valuable that can contribute to the debate? Do we have any chance of influencing the debate? Very few people spoke out on the Dobbs decision on Roe v. Wade in part because it’s a Supreme Court decision. What are you going to do? So, I think there’s a rethinking going on now that’s not, hey, we’re never going to speak out or we’re going to go back to the old ways of hiding under the desk but it’s much more we got to pick our shots.
Kelly: Yeah. Well, it’s interesting you bring up the Dobbs decision because one of the things that TriNet did in response to that is we have 610,000 worksite employees and users between TriNet and TriNet benefits and we realized that, as we are providing our single employer plan to a lot of our clients, we want to make sure they have equal access to healthcare. So, we created a couple products one of which is a travel benefit. If you don’t have access to necessary healthcare in your area, whether it’s a cancer treatment that you’ve got to travel for, whether it’s preventative services…
Alan: Yeah, I’m aware of that. I’ve talked to Samantha some about it and this is why I made the point I did a few minutes ago about the distinction between what you do as a company and what you say as a company. Most of the big companies that I’ve talked to have done what you just mentioned which is check their benefit plans, make sure they’re providing choice to their employees that, if you need to go out of state to get a medical procedure, they’ll support you and give you the money to do that. And that goes for companies based in red states as well as blue states but most of them are also saying, “Yeah, we’re going to do this for our employees but I’m not going to say anything because I’ve got employees on both sides of this issue. I have customers on both sides of this issue. I don’t want to make a big thing about it because I don’t want to be caught up in the debate.” So, that’s the distinction between doing and talking.
Kelly: Yeah. No, and we have a very diverse workforce as well and want to make sure that we’re offering equality to our entire workforce and that was the bigger point with that. So, there is a polling question up there and, it’s interesting, it’s actually not quite as... It’s more evenly split than I expected. And the question is, has your organization spoken out about social issues and it’s slightly more than half saying, no, it has not. And that may come, Alan, to your point on do you have an opportunity to influence it.
Alan: That’s right, yeah.
Kelly: It’s great to reinforce your values but, if you’re not going to really have an opportunity to influence, what does that statement do?
Alan: And how critical is it to your future? I’ll give you an example. I already said most companies, with the exception of some technology companies, most companies didn’t want to say anything about the Dobbs decision on Roe v. Wade. But then Eli Lilly, which is hardly a woke corporation, very conservative leadership, conservative company based in Indiana. But the state of Indiana passed one of these very restrictive bans on abortion and Eli Lilly felt compelled to put out a statement saying, “If you do this, we won’t be able to attract the high quality research and development talent to Indiana that we have traditionally brought here to run our research facilities and we will have to consider moving our research facilities elsewhere.”
So, I think that was an example where you have to speak out. You have to make it clear what the consequences of the action are. So, those are the kinds of decisions I think people are getting much more careful about. This doesn’t surprise me, by the way, 50/50 is about what I would’ve guessed.
Kelly: Yeah. So, on that line, I know during the pandemic, in your book, you mentioned that Fortune teamed up with McKinsey. You explored the source of value and how CEOs are thinking about purpose. So, would you mind just sharing the results of that and what you’re seeing companies do?
Alan: Yeah, yeah. Let me take a couple of steps back because...
Kelly: Sure.
Alan: I assume you have a lot of people here in the audience who are in the human resources business, right?
Kelly: Or an employee that definitely is impacted by human resources.
Alan: Right and everyone is impacted. But what’s really changed, and this is part of my exploration, I’m trying to figure out why is this happening. This is a big, big change but what’s really driving it? And the most interesting statistic I came across was from a study where some professors looked at the balance sheets of the Fortune 500 companies in 1970 and did it again today. And in 1970, what you found was more than 80% of the value in those Fortune 500 companies was coming from physical stuff, was coming from plant, equipment, oil in the ground, inventory on the shelves, all the things you needed financial capital to build and, once you build them and once you had them, once you had those assets, you could create value.
If you do the exact same exercise today, more than 85% of the value comes from intangibles. It’s intellectual property. It’s brand value, the emotional connection that you’ve created with your consumers, your customers. It’s all things that are much more closely tied to people. And I think that’s really what’s going on here. That’s why I gave the book the subtitle about my search for the soul of business. Businesses are becoming much more human because they have to, because that’s where the value comes from. I have a colleague at Fortune, Geoff Colvin, who wrote a book a couple of years ago called Humans Are Underrated. And one of the things he says in the book is that business spent most of the 20th century trying to make people into better machines. That’s what scientific management was all about. You were a cog in the production line and how did we get you to be an efficient cog in that production line.
And in the 21st century, the machines are going to take care of themselves, thank you very much. What we need are people who can be better people and that requires a completely transformed approach to leadership. This gets to your purpose point. The companies that will do well at creating value are the ones that can do well at engaging the best people in their enterprise and purpose becomes an incredibly important part of that.
Kelly: Yeah. We have become a services industry or services country in one way or another, for sure.
Alan: That’s right, that’s right. And even manufacturers. Take Apple, Apple creates a product, right? But the value at Apple, if the value came from the product, it would be TSMC in Taiwan that was making all the money. The value comes from the design, the emotional connection that it has with its consumers and all of that is what it has to protect. So, having a clear purpose, managing your reputation, creating trust with your employees, with your customers, with the communities you operate in, all of those have just become much more important than they were 50 years ago.
Kelly: Even though you mentioned you didn’t get to see Coach K because you’re a UNC guy, he spoke a lot about trust and how important that was to get your entire team aligned and what you’re going to tell them right then, right there.
Alan: Well, Dean Smith could have done it better.
Kelly: Let’s pivot to ESG. You started talking out about that a little bit and concern for the environment. It’s a hot topic. You see with the change in administration that the SEC’s getting in the game. They’re looking at attestation related to ESG, putting it in different parts of our financial filings, close to my heart as a CFO. And I know, actually, Fortune is launching an ESG summit. I think it’s called the Impact Initiative.
Alan: Yes. It’s not called the ESG Initiative. We’ll get to that but go ahead.
Kelly: Got it. So, what is your current thinking about ESG and how should... knowing that TriNet services a lot of small and medium-size businesses, it’s not only a large enterprise thing that we all need to worry about. So, what’s your position on that?
Alan: I’m really glad you asked that question because it gets to the core of the book. What my book is about is this rising compulsion the companies feel to focus on social outcomes in addition to returns to shareholders but they’re doing it for fundamental reasons and that’s what I try and describe in the book. Well, first of all, ESG is a very, just from a communication standpoint, it’s a clumsy acronym. It’s created by the UN. It lumps apples and oranges together. There’s no very clear definition. When S&P came out a couple of months ago and said that Tesla had failed its ESG screen, I thought, “Well, that’s nuts.” You can imagine why Tesla would fail the ESG screen but I don’t think there is a company existing that has played a more important role in transforming the corporate debate around energy than Tesla. Why did GM, in January of last year, say, “We’re only going to make electric vehicles starting in 2035.” Would they have done that if Tesla didn’t exist? I don’t think so.
So, there’s a lot of confused rhetoric and metrics around all of this and now you have politicians trying to... Governor DeSantis in Georgia, Governor Abbott in Texas, they’re trying to make ESG a dirty word. They’re saying it’s all about “woke” corporation playing footsie with the democratic politicians. So, I’ve had some fun this week because I was in Florida asking CEOs, “Are you a woke CEO?” Julie Sweet of Accenture I thought said it best. She said, “I’m a CEO who knows how to create value at my company. And if I hadn’t done what I did, if our company hadn’t done what we did on diversity, on committing to 50/50 gender split by 2025, on putting sustainability in place, we wouldn’t have attracted the talent we’ve attracted. We wouldn’t have attracted the customers we’ve attracted and we wouldn’t have created all the value we’ve created over the last seven or eight years. So, I don’t care what the politicians call it, this isn’t about politics. This is about, in the modern world, given the sources of value, how do you create value as a company?”
That’s why I don’t think it’s going to go away. It’s not going to go away because the best people know that’s what creates value. By the way, when I leave here today, I’m going to Bentonville, Arkansas to visit the executive team of Walmart. That is not a woke corporation, Doug McMillon is not a woke CEO by any stretch of the imagination but they’ve declared publicly, he’s declared publicly that he wants to create a regenerative company. This isn’t a California tech CEO. He says, “We’re going to be a regenerative company.” If you ask him why he said, “Because it’s good for our employees. It’s good for our customers. It’s good for the communities they operate in.” So, this really is about a changed economy and how do you create value in that economy.
Kelly: Yeah. Well, on that same line, and I actually see an audience question there, but let me hit on one thing and then we can get to the audience question. So, you were just talking about being in Florida…
Alan: We’re going to get back to this because I realized I didn’t answer your question, but I’ll get back to it.
Kelly: Go ahead.
Alan: Because the question you asked me and I got completely detoured…
Kelly: Was about ESG, yeah.
Alan: What do folks do? 67% of the people answering the question say they don’t have an ESG program. If you’re not a giant company that says, “Oh, we’ll create an ESG bureaucracy,” and they can go out there and produce a hundred-page sustainability report with 47 different metrics, what do you do? I think what you do is, and this is what I’ve heard from some of the best people I’ve talked to this about, is figure out what’s important to your company and pick one or two things where you think you can make a difference. It’s important to your employees. It’s important to your customers. Google, for instance, made the decision that immigration—I’m not saying Google is a perfect company—this is not about good or bad, but they made a decision that immigration is critical to their business model and so they’ve been very out there on the immigration issue.
I saw Jane Goodall was wearing a Patagonia coat. You saw the news yesterday, Patagonia is basically given the company to a trust to make it 100% clear that the company exists to help address sustainability in the environment. So, I think what every company can do is say, well, let’s make sure we have a very clearly defined purpose and then figure out what the social issues are that can help contribute to that purpose. And it doesn’t have to be a hundred-checkpoint ESG scorecard. It could be two things or three things where you have the ability to make a positive difference in the world and people will rally around that.
Kelly: And I think that leads into the question I was going to ask anyway. One of the things you hit on in your book is purpose and profits go hand in hand. They aren’t two different things for the reasons I think I just heard you say.
Alan: I think it’s a timeframe question. So, I mentioned that I was chief content officer for Time Inc. in the final unpleasant days of that company. We had an activist shareholder in the stock pushing for quarterly returns and I saw a lot of stuff happen. That was the only time in my career. I’ve been on the outside looking in most of the time. That was the only time in my career when I was on the inside. I saw a lot of decisions being made that were clearly bad for multiple stakeholders to generate cash for the next quarter. Decisions that were bad for employees, decisions that were bad for society but generated some cash for the next quarter. But those trade-offs tend to disappear as your timeframe gets longer and, in the long run, you can’t be a successful company if the planet is on fire. You can’t be a successful company if society has exploded because of inequality. All of those things tend to merge over the long run.
I was struck, because I had been thinking about this and writing about this, when the Business Roundtable made a decision. Business Roundtable is the biggest companies in the country, I assume you all know that. But when they made the decision to change their purpose of a corporation in the summer of 2019, they called me and said, “Would you like to write about this because we think it’s pretty significant.” And I talked to four CEOs who were driving that at the Business Roundtable. Mary Barra, the CEO of GM, Ginni Rometty, the CEO of IBM, Jamie Dimon, the CEO of J.P. Morgan and Alex Gorsky, the CEO of Johnson & Johnson, all very committed and passionate about what they were doing. What I realized, they didn’t say it to me, what I realized was all four of those companies have been around for more than a hundred years. Each of them has been around for more than a hundred years.
So, I think if you’re thinking about, not how much cash can I bring in the next quarter, but how do I create a company that will be around a hundred years from now, most of the time, these issues will coincide.
Kelly: Yeah. You have to have the North Star—be looking at that purpose all the time. Well, there is an audience question and so one of the audience members is asking what is the best leadership lesson you’ve learned during the course of your career. And I guess I’ll pivot it because we’re almost out of time to also say what’s the lesson and then what advice would you give CEOs out there.
Alan: Well, it’s interesting. I think my answer to that question has changed. I did a book when I was at the Wall Street Journal, The Wall Street Journal Guide to Management, and I cited two things in that book that I found from the best leaders. One was a commitment to transparency. Don’t try and give different messages to different audiences because, if everything’s transparent, then the problems are more likely…
Kelly: It’s going to resonate.
Alan: …to get dealt with.
Kelly: Yep.
Alan: So, candor, transparency was one and two was a bias for action. Not everyone agrees with me on this, but I think inertia is the greatest force in the world. It’s just hard to get people off the dime sometimes. And as a leader, you just have to be committed to moving forward even if you’re not 100% certain you’re moving in the right direction. Just get the ball rolling is better than… because, I’m sure everyone here has seen it; the ability for inertia to set in and keep anything from happening is huge. So, traditionally, I would’ve said those two. The thing that’s changed, really, just in the last three years, and it’s tied to the stakeholder movement, is the importance of empathy. I don’t think, in the first 35 years of my career, I heard anybody in a leadership position talk about empathy.
Kelly: Talk about empathy.
Alan: Jack Welch did not talk about empathy on a regular basis. Thank you. But when you’re talking about a diverse group of stakeholders that you have to take care of, empathy becomes very different. You got to understand... Do I have time to give one example?
Kelly: Sure. I bet they’ll let us have time.
Alan: I’ll be very quick with this. Talking about speaking out, the great story is what happened to Disney in Florida where Bob Chapek, the CEO of Disney, when Florida passed the so-called don’t say gay bill that restricted conversations in schools about sexual identity, Bob Chapek made the decision that, 10 years ago, every CEO would’ve made which is I’m not going to say anything. I don’t want to talk about this. I don’t want to get involved. I have a lot at stake in Florida. I don’t want to be in a fight with the state legislature. And so, for two weeks, he said nothing and, by the end of the two weeks, he had a revolt on his hands because Disney is a company that depends on its creatives to make the magic.
Many of them in California, both the creatives that run the movie business and the theme park business, and the depth of passion that many of those people felt about what had happened in Florida was really moving. And many of them subsequently told him stories about their own school experiences where they were closeted and couldn’t talk to anybody or were hazed because of who they were. And it took him two weeks, but he finally realized I can’t not say anything.
It’s fine. The only problem with that is why didn’t he know that going into the crisis? Why did he only find that out after the crisis? And that’s where empathy comes in. You have to understand early on who your important stakeholders are, make sure you understand them, be talking to them, listening to them and that’s different. That’s different than it was. So, that would be my third for today’s leaders.
Kelly: That’s great.
Alan: Sorry to go on so long on that.
Kelly: No, great way to end it. And thank you so much for joining us today. For everyone…
Alan: Thank you.
Kelly: It’s a great book.
Alan: Great to be here. Thank you.
