Looking forward to a couple of high-stakes, high-visibility tests of leadership this week:
The world will be watching Janet Yellen and the Fed with much greater anticipation than usual on Thursday to see if they raise interest rates. For the past several years, especially after Ben Bernanke became chairman in 2006, the Fed has usually signaled its intentions pretty clearly, so the official announcements didn’t move markets dramatically. But not this time. The Fed hasn’t signaled its intentions because it apparently doesn’t know them. Hang on tight if the decision is to raise rates, which the markets seem to be betting against. The repercussions would be many and large, raising the value of the dollar, potentially slowing the U.S. economy, and putting pressure on heavily indebted developing economies, for starters.
The leadership issue is how Yellen will influence the process. She appears to be an interest rate hawk, though she hasn’t disclosed her views in the past few weeks of market volatility. Alan Greenspan always stressed that the Fed chairman doesn’t have as much power as most people think. With regard to the Federal Reserve Board, the chairman “has only the authority to set the agenda for the meeting, and four members can take away even that by making a motion at the beginning of the meeting,” he once explained to me. “So he has to persuade them, and it isn’t always easy.” As for the Federal Open Market Committee, which will be making the rate decision this week, “it has 17 members, and the great majority have Ph.D.s in economics. You can’t just tell them that something is so.”
We may get a clue this week to how Yellen is doing as a persuader and consensus builder.
The other big leadership event of the week will be the Republican presidential candidates’ debate Wednesday evening. Some of the main story lines are clear. How will each candidate deal with Donald Trump, whose lead keeps building? He’s favored by 32% of Republican voters nationally in the latest poll. Attack him? Ignore him? Ridicule him? Another story line will be Carly Fiorina’s first performance in the main arena after having been relegated to the J.V. debate last time. Can she maintain the sharpness and composure that have worked so well?
The most instructive story, I believe, will be Ben Carson. He’s running No. 2 behind Trump with 19% support and is the only other candidate in double digits. What’s so intriguing is how he’s doing it: by being the opposite of Trump. Unlike the others, he refuses to attack Trump. When he made a poorly expressed comment about Trump’s religious views (in response to an interviewer’s question), Trump unloaded on him in his trademark style. But instead of counter-blasting, Carson apologized.
Trump is hot. Carson is cool. This campaign has a long way to go. Who’s likelier to flame out?
What We’re Reading Today
Google names CEO for self-driving car project
John Krafcik, former president of online car-shopping site TruCar, will take the helm of the six-year-old group. Google CEO Sundar Pichai isn’t spinning off the car development into a free-standing unit within parent company Alphabet yet, although it’s a candidate for that down the line. Krafcik’s first job: build a team. Fortune
Beware of the power struggle
As Bank of America’s CEO Brian Moynihan looks to secure his chairmanship on the board, he’s come under attack from some investors that want the bank’s leadership to remain separate. Moynihan’s continued fight, though, has brought broader complaints of leadership changes to the board, including some asking the longest-tenured members to leave. WSJ
Germany tightens borders in migrant struggle
With more than 13,000 migrants arriving to the border between Germany and Austria on Sunday, German leadership has asked the European Union to do more to help. In the meantime, German Chancellor Angela Merkel has approved stronger measures to prevent new migrants into Germany, a breaking of a principle that allows free movement between EU countries. BBC
Australia ousts Prime Minister
Australia’s leading Liberal Party (the more conservative political group in the country) held a leadership vote on Monday night, approving the ouster of Tony Abbott as its head. Instead, Malcolm Turnbull will lead the party and, therefore, become Australia’s prime minister. It’s a sudden removal of Abbott, who won control in September 2013, but had fought with moderates over issues such as same-sex marriage. The Guardian
A sports rivalry budding off the field
Hollywood talent agents have set their sights on sports as a way to fight off the uncertainty in television and movies. It pins Ari Emanuel and Patrick Whitesell‘s William Morris Endeavor against TPG Capital-owned Creative Artists. It’s an old rivalry for acting talent that has bled into the business of sports. NYT
Building a Better Leader
Why do we feel so overworked?
It could be because of the management tactic of “do more with less,” even when it’s only implicitly stated. CNNMoney
A cybersecurity company’s strategy to differentiate…
…involves analysts who are fluent in nearly 25 languages and a culture focused on looking out for what’s “left of boom.” NYT
In order to move away from micromanaging…
…internalize the big picture and develop your powers of observation. SmartBrief
A gin company that hires musicians as salespeople
Martin Miller Gin’s CEO Jacob Ehrenkrona wasn’t looking for their creativity, necessarily, but musicians were already frequenting the bars where he wanted his gin sold. Harvard Business Review
Where risk management ranks in board discussions
Not very high, according to Wharton accounting professor Christopher Ittner, who says there are often only “informal” discussions between the board and top management. But they’re not asking what’s the right risk appetite for the company. Knowledge@Wharton
The early pitch decks of AirBnB, LinkedIn…
…describe the companies a lot differently than how we view and use the services today. FastCompany
Up or Out
Nintendo has named Tatsumi Kimishima as its new CEO, replacing Satoru Iwata who passed away from cancer in July. Reuters
Scott Spradley will become CIO of Hewlett-Packard Enterprise, when HP splits into two companies. WSJ
Kathy Savitt, chief marketer at Yahoo and a longtime ally to CEO Marissa Mayer, will become president of digital content at STX Entertainment. Fortune
Fortune Reads and Videos
Donald Trump calls high CEO pay a “complete joke”
But Trump doesn’t think there’s anything he can do about it. Fortune
Burning Man may burn Quiznos in court
The sandwich chain mocked Burning Man in a recent advertisement, but festival officials believe Quiznos infringed on intellectual property to do so. Fortune
Even great business ideas get ripped apart early
You just have to be brave enough to move forward with them. Fortune
Facebook wants VR on your phone
Mark Zuckerberg‘s company sees 360 degree videos on our handhelds in the near-future. Fortune
“I get asked every day. It’s a fun idea to toss around. If I ran as a Dem, I know I could beat Hillary Clinton. And if it was me vs. Trump, I would crush him. No doubt about it,” – Mark Cuban, billionaire entrepreneur and owner of the NBA team Dallas Mavericks, discussing whether he could run for president. CNBC
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|Produced by Ryan Derousseau|