Power Sheet – September 30, 2015
Two of my favorite CEOs are in the news this morning, and while they could scarcely be more different, they share a leadership trait that’s worth a closer look: vision.
Last night at an elaborate party in California, Elon Musk delivered the first Tesla Model X SUV, a vehicle that was clearly impossible to conventional thinkers. The auto industry is so crushingly capital intensive that obviously no new entrant other than a government could afford to get in. Musk disproved that view when he founded Tesla and produced the Model S, which then, in its latest version, again achieved the impossible by winning the first perfect score that the Consumer Reports auto rating system had ever delivered. And he says “the Model X is a better SUV than the Model S is a sedan.”
Another impossible Musk venture, SpaceX, delivers supplies to the International Space Station at a fraction of what government rockets incur, but that business is just R&D for Musk’s real vision, colonizing Mars. SpaceX designers are already creating the 100-passenger Mars Colonial Transport. Musk also wants to revolutionize the electric utility business and has proposed a Hyperloop transport system running through tubes between Los Angeles and San Francisco – but enough. He’s obviously nuts, except that he obviously isn’t. He’s visionary. And if he weren’t, he’d never attract the workers, customers, and investors who make his visions real.
Today’s other visionary leader in the news is Ralph Lauren, who announced yesterday that he’s stepping down as CEO of his company. You may say that his vision wasn’t remotely as grand and breathtaking as Musk’s, and in some ways that’s clearly right. But in some ways his vision was also unimaginable until he saw it. A multi-billion-dollar global fashion empire built on one person’s unique conception of style – a few of them exist today, but in the 1960s there were none.
Not that Lauren saw his future fully at first. He started by designing some wide ties when skinny ties were the norm and persuading Bloomingdale’s to carry them. In time he came to realize he was selling not clothing but a vision of a world that existed nowhere except in his mind, and it was a world that millions of consumers would want to inhabit. It took its design cues from old-money America and then went far beyond, to clothing, accessories, and furniture that no Rockefeller or DuPont ever possessed. Eventually his vision even took the form of a private club in Milan and a restaurant in Manhattan in the quarters of the old La Côte Basque, one-time haunt of the rich and elegant.
Gerstner was right, of course. Sometimes a vision is a distraction from what needs doing. And it will fail miserably if it isn’t genuine; people can tell instantly when there’s no true gleam in the visionary’s eye. But Musk and Lauren remind us how sometimes, when a leader’s vision is real, it’s power is beyond imagining.
What We're Reading Today
Putin launches strikes in Syria
Russia's parliament voted to let President Vladimir Putin use air strikes in Syria to fight ISIS. Strikes began this morning. The move puts President Barack Obama in a bind, since he wants to fight ISIS but doesn't want to strengthen Syrian President Bashar al-Assad. Meanwhile, U.S. planes fired on Taliban-held territory in Afghanistan last night. CNN
Ralph Lauren steps down after 48 years
The founder of Ralph Lauren Corp. will remain executive chairman and chief creative officer while handing over the CEO job to Old Navy President Stefan Larsson. Lauren says the change doesn't have to do with him stepping away, but instead allows new blood to run day-to-day operations. WSJ
Tim Cook talks up Apple's enterprise business
Apple took in $25 billion from organizations last year. That's still a small part of the company's $200 billion of revenue, but by any measure it's a big operation. Cook acknowledged that Apple lacks the relationships that competitors have with enterprises, which is why he has partnered with other companies, including Microsoft. Fortune
Ford given 5-day strike notice at a key plant
Workers at a large F-150 pickup truck manufacturing plant in Kansas City, Mo., sent the notice as negotiations for a local union contract stall. United Auto Workers national president Dennis Williams has approved the move. Ford CEO Mark Fields is confident the two sides will come to an agreement. Union contracts are expiring at all three Detroit carmakers. Reuters
Building a Better Leader
GitHub CEO talks about bouncing back...
...after a sexual harassment claim essentially ousted one of its co-founders. Chris Wanstrath says other parts of the company demand attention, but "you also need to put time and effort into your people." Fortune
Fewer women want to grab the brass ring
In a new survey of almost 30,000 employees, only 43% of women say they want to become a top executive, vs. 53% of men; 25% of women say their gender has slowed their progress. WSJ
Chipotle survives the lunch-time rush...
...by putting its store managers through a quarterly, 39-point checklist. Developed by co-CEO Monty Moran, the detailed review determines which managers reach a select level called "restaurateur," earning higher pay. Quartz
Republicans, Obama reopen budget talks...
...in an effort to avoid a government shutdown. The House and Senate are expected to pass a stopgap resolution today, which will prevent a shutdown when funding authority ends at midnight. The two sides will then have until Dec. 11 to reach a longer-term agreement. Conservatives are battling internally; some want to cut the size of the government while others want to increase military spending. WSJ
Kevin McCarthy improves chances as next House Speaker
Some members elected in the wave of Tea Party fervor a few years ago tried to push Rep. Trey Gowdy (S.C.) as Speaker but didn't get far, strengthening California Rep. McCarthy's apparent hold on the position as Republicans maneuver to decide John Boehner's successor. Washington Post
Kim Davis secretly met with the Pope
The Kentucky county clerk, known for her unwillingness to issue same-sex marriage licenses, sat with Pope Francis for 15 minutes during his stay in the U.S. last week, according to Davis's lawyer. The Vatican has not confirmed or denied that the meeting took place. USA Today
Up or Out
Cumulus Media announced CEO Lewis W. Dickey Jr., one of its founders, will step down to become vice-chairman; the stock has fallen 80% this year. Mary G. Berner, who formerly headed the Association of Magazine Media, will succeed Dickey. NYT
Renee Wynn has become NASA's CIO, succeeding Larry Sweet. Nextgov
Fortune Reads and Videos
VW lawsuits start flowing in
A suit filed by Harris County, Texas, which includes Houston, seeks $100 million for damage to public health caused by the diesel engine emissions fraud. It's one of many expected to be filed against Volkswagen. Fortune
This CEO won't judge you for being fired
Kabam CEO Kevin Chou considers it a rite of passage. Fortune
Take a look at the new Model X SUV from Tesla
Elon Musk's new vehicle, delivered to its first six customers yesterday, has falcon winged doors. Fortune
The Best Workplaces for Women
In the inaugural list, wealth management firm TrueWealth ranks first. Fortune
"My father was an artist. When life was harder and he couldn't get jobs, he painted houses, but he was artistic. When I went to see his work, it was special. Somewhere along the line, I felt I was special. I didn't know why." - Ralph Lauren, founder of Ralph Lauren Corp.
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