Power Sheet – August 17, 2015

Which raises a long-standing question about Bezos: How can he keep spending staggering sums – thus reporting little if any profit, quarter after quarter – while the value of Amazon stock just keeps rocketing? It’s up 60% over the past year. The answer that best fits the evidence is one that many leaders don’t want to hear: The prevailing view that Wall Street is insistently, irrationally short-term oriented, is wrong.

It’s clear that investors are willing to look way past this quarter’s profit in valuing Amazon, and there’s no reason to believe they harbor some peculiar fascination with that one company. On the contrary, a paper by researchers at the Harvard Business School finds “much less evidence consistent with the [short-termism] narrative than one might expect, given its prominence in the public conversation.” The researchers don’t deny that some CEOs do manage for the short term, but they argue that blaming Wall Street for their behavior isn’t valid.

The issue may gain prominence as the presidential campaigns proceed. Hillary Clinton railed last month against “quarterly capitalism,” invoking the conventional narrative blaming Wall Street, and proposed raising capital gains taxes on investments held less than four years. But if the research (which goes far beyond the recent HBS paper) is correct, then such policy responses wouldn’t work.

The other big Bezos-related news is a long front-page article in the New York Times on how Amazon is managed. The piece is not flattering, portraying a workplace where employees are exhausted, driven mercilessly, often in tears, frequently unable to bear the strain. Some social media commenters are calling the article a hit job, while others are defending it. Is a relentlessly demanding culture the only way to build a hugely successful company?

Either way, business leaders should read the piece – and also should at least question the pervasive view of Wall Street short-termism. Bezos has a way of raising very, very, very large issues.

What We're Reading Today

Amazon pushing its managers to tears

From expectations to answer texts and emails throughout the night, working on weekends, approved backstabbing, and "purposeful Darwinism," it's an unflattering look at the way Amazon treats it managers. Some have denied it. Jeff Bezos says he would quit the company described in the story. NYT

Apple's self-driving electric car a reality

Its code name is Project Titan, and Apple is searching for secure San Francisco areas in which to test it.   The Guardian

Number of emails containing classified info climbs

According to a State Department source, the number of emails in Hillary Clinton's personal account that contained classified information while she served as secretary of state has climbed to over 60.  Washington Times

NSA finds a partner with AT&T

The National Security Agency's efforts to spy on a Internet traffic passing through the country got a huge lift from AT&T over the past ten years. According to released documents, the NSA said AT&T had an "extreme willingness to help."  NYT

Carlos Slim in a turf war with AT&T

In an effort to fight off AT&T's efforts to claim market share in Mexico, Slim's America Movil has removed roaming charges in the United States for its Mexican prepay clients, which reach 40 million customers.  Reuters

Brazilian President faces protest, ouster

With cries of corruption, including bribery at the state run oil company Petróleo Brasileiro SA, hundreds of thousands of protestors in all of Brazil's 26 states called for the removal of President Dilma Rousseff on Sunday. WSJ

Building a Better Leader

The apology formula

If a public apology is needed, then do it this way. But first make sure you will change. Harvard Business Review

Americans shun vacation for work

A new survey shows that 56% of us have not taken a vacation in the past year, which is up from 52% in 2014.  Business Insider

Many future leaders lose out on promotions

Don't let it hurt you long-term. Instead relax, reflect, and reengage if you get passed over for the better job.  Fortune

Entertainment's Tales

Universal racking up the hits

With 'Straight Outta Compton' reaching No. 1 at the box office this weekend, Universal has surpassed the record in box office worldwide sales for the year with $5.76 billion, and it's only August.  WSJ

Network television reacts to streaming's success...

...by adding more commercials. It's one of the strategies networks weigh to fight off plunges in ratings. Giving some money back to customers has also been bandied about, according to the report.  MarketWatch

Disneyland will feel the force

Disney CEO Bob Iger announced that the company plans to add Star Wars-themed attractions at Disneyland and Walt Disney World Resorts. Wired

Up or Out

Judge blocks Kohl's effort to prevent its former CIO Janet Schalk from joining retailer Hudson Bay in the same role. Milwaukee Business Journal

Fortune Reads and Videos

Trump's Wharton days remain a mystery 

He talks about it on the campaign trail, but it's difficult to find anyone who remembers the young Donald. Fortune

But you will find Trump at jury duty

He's reporting today. Earlier this year, he was fined $250 for missing five summonses since 2006.  Fortune

GE expected to secure EU approval for Alstom deal

The stamp from regulators would cement the acquisition as GE's largest purchase ever, with a price of $13.8 billion. Fortune

Could the iPad go the way of the pager?

The tablet's future may not be a long one.  Fortune

Today's Quote

"Part of company culture is path-dependent—it's the lessons you learn along the way." - Jeff Bezos, Amazon CEO  GeekWire