Is Donald Trump campaigning his way into business trouble?
NBC, apparently not content with having cut all ties to Trump in June after his comments about Mexican immigrants, fired him again yesterday when NBC Entertainment chairman Bob Greenblatt said Trump would “absolutely not” return as host of Celebrity Apprentice. This morning’s WSJ features an unflattering front-page investigation of Trump’s involvement with a marketing firm – scrutiny he wouldn’t be getting if he weren’t running for president.
Those developments by themselves aren’t the problem; neither, alone, is particularly damaging to Trump. To see the real danger, remember that Trump made his fortune with an innovative business model based on personal fame. For 40 years, he has courted the media. A New York Times real estate reporter from the 1970s recalled recently that Trump “was one of those who always returned a phone call.” In 1976, an adoring Times profile observed that “He is tall, lean and blond, with dazzling white teeth, and he looks ever so much like Robert Redford. He rides around town in a chauffeured silver Cadillac with his initials, DJT, on the plates. He dates slinky fashion models, belongs to the most elegant clubs and, at only 30 years of age, estimates that he is worth ‘more than $200 million.’” All that’s changed is that his net worth has increased, and he isn’t quite so lean.
As a self-created celebrity, Trump started putting his name on buildings, launching a new concept: branded high-end real estate. It worked. Trump buildings mostly did well. He even began licensing his name to other developers for buildings he didn’t own. So long as he kept himself in the public eye, the machine kept spinning.
That’s why many people assumed Trump is running for president simply as another way to keep people hearing and saying his name. And maybe that’s correct. In my few chats with him over the years, I’ve found him to be thoroughly self-aware, knowing just what he’s doing, understanding that many people find him obnoxious. He’s fine with that. It all keeps the machine going.
What’s new is that, as a presidential candidate egged on by thousands of cheering supporters, he’s saying things that damage the brand. Slandering immigrants, demeaning John McCain, insulting women – such statements can’t be brushed aside, and they live forever on YouTube. NBC isn’t the only organization to have severed relationships with Trump; so have Macy’s, ESPN, and Nascar. Two high-profile chefs have backed out of deals to open restaurants in new Trump properties.
It’s easy to imagine that, after all these years, living in a Trump building could suddenly flip from being prestigious to being totally uncool. Trump is now at the apogee of his fame, but the process of getting there could damage his vaunted wealth. He may be doing something no leader should ever do: letting adulation wreck his judgment.
What We’re Reading Today
GE dumps the formal annual review
Instead, it will use more continual feedback via an app. It’s a titanic shift for a company that popularized the annual review under former CEO Jack Welch. But it’s in line with the cultural changes that GE has undergone in order to better react to the millennial workforce’s needs. Quartz
Sesame Street’s residents now includes HBO
The children’s show cut a deal with HBO to air episodes over the next five seasons. It’s a strategic partnership by Sesame Workshop and its chief executive, Jeffrey D. Dunn, as viewership has dropped in recent years due to streaming options. NYT
Tesla boosts $500 million stock offering
A day after the announcement, the carmaker added another $140 million to the offering. Co-founder and CEO Elon Musk will purchase $20 million of those shares. The funds will go towards a new factory and vehicle launch. WSJ
Apple hires 11,000 female employees in one year
It’s an impressive stride in an effort to boost female and minority hiring, who have accounted for nearly 50% of Apple hires in 2015. Still, CEO Tim Cook acknowledged that the company had a long way to go. Fortune
GOP candidate Ben Carson goes on the defensive
The famed neurosurgeon, who has called for the defunding of Planned Parenthood over discussions using aborted fetal tissue for research purposes, used such tissue in his own research. He’s now fighting off claims of hypocrisy. CNN
Greek parliament passes deal to remain in the Eurozone
The 85-billion euro bailout could lead to a change in leadership, though. To get the votes to pass the deal, Prime Minister Alexis Tsipras relied primarily on leaders outside of his party. He may have to consider a confidence vote over his position; in the meantime, eurozone countries will now vote on the deal. BBC News
In other GE news, GE Capital unloads more assets
Goldman Sachs has purchased $16 billion of online deposits, which further shrinks GE Capital in an effort by GE CEO Jeffrey Immelt to reduce the company’s exposure to its financial arm. Reuters
Building a Better Leader
The difference between an average manager and a great one
In cartoon form. Medium
Virtual CFO fights back in Zirtual’s undoing
It’s a startup he-said-she-said. After Zirtual founder Maren Kate Donovan blamed a virtual CFO for its sudden downfall, the CFO, Ryan Keating, fights back, blaming the business model. Fortune
Maybe your company needs therapy
That’s what startup inDinero’s founders Jessica Mah and Andy Su used to shift the direction of their struggling company. Inc
The number of people lying on their resume will astound you
In a new survey of managers, 56% say they’ve caught candidates lying on their application. Most of the time, the candidates embellish their skills. Time
United Nations caught in intern controversy
One of the organization’s unpaid interns quit because he was living in a tent, unable to afford housing. The intern, David Hyde, has called for others to fight against unpaid work. NYT
Bank of America’s shareholders to vote on CEO’s role
A week from this Saturday, shareholders will decide if CEO Brian Moynihan can also hold the chairman title within the bank. The board had given Moynihan the title by changing internal rules passed in 2009, but large investors did not approve of the move. WSJ
Up or Out
Billionaire James Packer will step down as chairman of Crown Resorts, the casino and hotel company he started. He will continue on as a director. Robert Rankin, chief executive of Packer’s Consolidated Press Holdings will replace him. Financial Times
Martha Nelson, former editor-in-chief of Time Inc. (owner of Fortune), will head Yahoo Media’s global digital magazine efforts in the same role. Fortune
With coal shipments plunging, Union Pacific will cut hundreds of management-level jobs. NBC News
In celebrity or presidential news (take your pick), NBC has fired Donald Trump from Celebrity Apprentice over his statements regarding Mexican immigrants. People
Fortune Reads and Videos
Audi sets sights on Tesla
It will team up with LG Chen and Samsung SDI to build an all electric car with a range of more than 310 miles. Fortune
Know this before traveling to Cuba
After Secretary of State John Kerry raises the American flag at the embassy in Cuba today, the number of U.S. travelers to the country is expected to jump from 700,000 a year to ten million. Fortune
Facebook intern loses job after exposing security hole
Aran Khanna developed an app that exposed a flaw in the Messenger service, which was downloaded over 85,000 times. Fortune
Disney shows off how it uses virtual reality…
…to design new attractions and theme parks. It’s a wild simulation of a ride. Fortune
Magic Johnson, former NBA MVP turned entrepreneur, owning a number of Starbucks franchises and movie theaters, turns 56. Biography
General Stanley McChrystal, who led U.S. troops in Afghanistan, turns 61 today. Biography
|Produced by Ryan Derousseau|