CEO Daily: Tuesday, November 3
The Fortune Global Forum got underway yesterday in San Francisco, with business leaders from various industries sharing lessons about the challenges of dealing with rapid change. Dominic Barton of McKinsey said the average life span of a company has gone from 90 years a century ago to 18 years today. Cisco’s John Chambers made a similar point, telling assembled executives that 40% of their companies wouldn’t exist in a decade. IBM CEO Ginni Rometty and Wells Fargo CEO John Stumpf said survival meant being willing, in Rometty’s words, to “always disrupt yourself.”
But the highlight of the day was Larry Page, who spoke during dinner and impressed the CEOs with his remarkable mix of soaring ambition and personal humility. It was the first time he had talked publicly since creating Alphabet (a name, he said, that was chosen by Sergey Brin, without market testing.) The new company allows Google to build its successful search and software business while Alphabet makes big bets in far-flung fields like self-driving cars, radical life extension, global telecommunications, or pretty much anything Page gets excited about. Strategy as studied in business school means nothing to this CEO, who sees the world as a series of problems for him to solve.
“Companies have pretty bad reputations in the world,” Page explained. “It’s not like most people get up and say, ‘Oh, I wish I could go work for a company.’ They do it because they have to.”
So how do you change that?
“We’ve got to be more ambitious, we’ve got to do things that matter more to people, we’ve got to do less things that are zero sum gains, more things that really cause a lot of benefit.”
Is there any company out there that you look at that’s kind of what you want to be?
You can watch the full interview here. More to come today.
• Activision buys Candy Crush maker
King Digital Entertainment – the social gaming company best known for Candy Crush Saga – is set to be acquired for $5.9 billion by Activision Blizzard. Activision is paying $18 per share, a modest 16% premium to King Digital's closing price on Monday and 20% lower than what King's stock traded at when the company went public 18 months ago. Activision says the deal is driven by a desire to branch out from its focus on PC and console games to mobile and social games. Fortune
• EPA, Volkswagen in a dispute
The Environmental Protection Agency is alleging Volkswagen 2014-16 diesel models had devices installed in them to manipulate U.S. pollution tests for some Volkswagen, Audi and Porsche vehicles – claims that the German auto maker disputes. Buried in the Wall Street Journal story is probably the real issue here: the EPA is reportedly frustrated with what it feels is Volkswagen's lackluster communications since mid-September. The agency is ultimately trying to learn more about an emissions-control device on some 2016 vehicles that the auto maker disclosed last month. Wall Street Journal (subscription required)
• New HPs get a mixed welcome
Hewlett Packard has officially split into two separate companies and on the first day of trading, shares of HP, which makes personal computers and printers, easily outperformed Hewlett Packard Enterprise – the data center hardware and services company. Observers say that investors shouldn't jump to speedy conclusions based on the first day of trading. Fortune
• Theranos promises FDA approval
Theranos founder and CEO Elizabeth Holmes, who took the stage at Fortune Global Forum, promised her blood-testing startup's process would win FDA approval – seemingly unshaken by the events of the last few weeks as allegations swirled that Theranos wasn't upfront about outsourcing some of its work. Pushed by Fortune edit Alan Murray to admit mistakes, Holmes would only concede that Theranos should do "a better job of communicating" the science and data behind its offerings. Fortune
• Soros pulls millions from Gross fund
Billionaire investor George Soros has pulled his $500 million investment out of a Janus Capital fund managed by Bill Gross, sources told The Wall Street Journal. It is a new low point for Gross' Janus bond fund, which has seen a loss of 1.9% since Gross joined Janus Capital about a year ago from Pimco. Some observers say that investors that had faith in Gross, including Soros, have been disappointed. Fortune
• AIG to cut costs in restructuring
The insurance giant says it is planning to spend $500 million on an "organization simplification" that will include job cuts in 2016 as the company looks to reduce its management ranks. The reorganization plans were announced when AIG also released third-quarter results, posting a loss of $231 million for the period as results were stung by pre-tax restructuring costs. The plan to find savings comes as the company faces pressure from billionaire investor Carl Icahn to break itself into three parts. USA Today
Around the Water Cooler
• The last new BlackBerry phone?
A new Android phone from BlackBerry hits the market this week, a debut that Bloomberg says could be the Canadian company's last real attempt to stay relevant in the hardware smartphone business. BlackBerry has released several phones in the two years since CEO John Chen took over – but it still commands a slim global smartphone market share of less than 1%, after previously being a big contender before Apple and others took over the category. Chen recently warned that BlackBerry could stop producing phones within the next year if it doesn't begin turning a profit. Bloomberg
• Retailer gifts stock to employees
HEB, a regional grocery chain in Texas, is handing an estimated 15% of the company's shares to employees over 21 years old who have worked at least a year at the retailer and recorded at least 1,000 hours in a calendar year. The plan to award stock to the company's 55,000 employees is intended to recognize the workers' contributions and also encourage loyalty to the company. "We think there is great benefit in a more empowered, inspired, proud, trained work force," said Craig Boyan, HEB's president and chief operating officer. New York Times (subscription required)
5 things to know today
Activision's candy crush and Tesla 3Q -- 5 things to know today. Today's story can be found here.