CEO Daily: Wednesday, November 4
If “disruption” and “change” were the most used words of day one at the Fortune Global Forum in San Francisco, “culture” carried day two. Conversations kept returning to the challenge of creating company cultures that can endure and embrace the hurricane winds of change.
“Fifty percent of our business has changed in the last ten years. The key to surviving is having an ownership culture. You have to get to people’s hearts. You have to get to people’s pride” – Joe Kaeser, CEO, Siemens
“Only a baby with a wet diaper likes change. Everyone else resists change. The job of a CEO is to resist the temptation to look at last year, and to persuade everyone that where we are going is worth fighting for.” —Mike Ullman, Executive Chairman, JCPenney
“The culture, people wanting to work for Comcast-NBC Universal, is the one thing I’ve got to get right.” – Brian Roberts, CEO, Comcast
“As companies get bigger, they get slower and more risk averse, especially in fast-moving industries. That’s good for entrepreneurs.” – Geoff Yang, Redpoint Ventures
“It isn’t that entrepreneurs are smarter than companies, it’s that they are trying more crazy ideas, taking more shots on goal.” – Peter Diamandis, Founder, X Prize
“Culture does trump strategy, every day.” – Mark Bertolini, CEO, Aetna
The takeaway: Technology may be driving the rapid change in business today. But it is human attitudes and behaviors that are gating it, and determining the difference between failure and success.
You can see full coverage of the Forum – including investor Marc Andreesen’s claim that we are in a tech “bust,” not a “bubble – here.
More news below. Share the CEO Daily with others.
• New problems for Volkswagen
Volkswagen will be forced to incur an additional $2.2 billion in costs after disclosing the German auto maker understated the output of carbon dioxide in about 800,000 of its vehicles sold in Europe. Volkswagen claims the problems were not related to the deceptive software it had admitted installing on 11 million diesel cars to make them meet air-quality standards. The auto company did admit that it discovered the new problem while probing the software deception. New York Times (subscription required)
• Telsa hires CFO from Google
Electric-car maker Telsa has hired a new CFO, naming Google's former vice president of finance, Jason Wheeler, to the role during a conference call with analysts. Earlier on Monday, Tesla also reported it delivered more vehicles during the third quarter than previously estimated. Results were helped by the rollout of Tesla's Model X SUV. The news sent shares higher. Fortune
• Glencore says rebound is on track
Shares of Glencore recovered a bit on Wednesday after the company said it was on track to meet its’ previously announced profit targets for the year and will have almost reached its debt reduction target by the end of 2016. The mining giant has been on the defense for the past two months, ever since an investment bank warned low commodity prices and huge debts would consumer all of Glencore’s cash flow. Fortune
• Takata to pay record $200M fine
Takata will pay a record U.S. civil penalty of up to $200 million, a settlement tied to deaths and injuries of dozens of motorists that were linked to the Japanese company's air bags. The decree also orders Takata to fire some employees and phase out a chemical propellant suspected of degrading over time. The penalties, Bloomberg notes, cap a period of increasingly harsh, record-breaking enforcement actions by auto regulators. GM, Honda and Fiat Chrysler have all paid steep penalties in separate, unrelated cases. Bloomberg
• AIG rejects breakup proposal
Insurance giant AIG finally weighed in on Carl Icahn's proposal to split the company into three pieces, with AIG CEO Peter Hancock saying the idea does "not make financial sense." Hancock's statement came a day after AIG reported a 60% drop in third-quarter income and warned of millions in costs associated with planned layoffs. While Icahn hasn't responded, hedge fund billionaire John Paulson – who backs a breakup of AIG – continued to push for smaller, focused insurance businesses. USA Today
Around the Water Cooler
• Is virtual reality a business?
At Fortune’s Global Forum, a panel of leading virtual reality pioneers from companies like Nokia, GoPro and startup Jaunt, discussed the current state of the technology and possible business models. One panelist said devices are still too bulky and too costly, while another said the technology can become more mainstream after further developments. Fortune
• Campbell CEO touts leadership courage
Campbell Soup CEO Denise Morrison says she has had to push her 146-year-old food company to get more comfortable with risk, citing the example of a $1.55 billion acquisition of Bolthouse Farms – a deal Morrison pushed for as the board was skeptical about buying a premium juice and packaged foods company. "It’s okay to fail if you learn from it," Morrison said, a story she told at Fortune's Global Forum conference. Fortune
• How Sandberg would improve education
Facebook Chief Operating Officer Sheryl Sandberg, speaking at Fortune's Global Forum, says technology could play a big role to help address the socioeconomic gaps created by inadequate education. “We definitely have an inequality of opportunity in our country,” Sandberg said. Sandberg's interest in education isn't a surprise, as the social media company's top executive is also deeply invested in the future of education. Facebook co-founder and CEO Mark Zuckerberg has generated headlines in the past for his financial contributions to help improve education in low-income districts. Fortune
• Jon Stewart signs deal with HBO
Comedian and former Daily Show host Jon Stewart has signed a four-year production deal with HBO, though the agreement does not call for him to host a new television show – at least not yet. He previously spent nearly two decades working with Viacom's Comedy Central, so the deal with HBO means he'll be working with rival Time Warner. Fortune
5 things to know today
VW's New Horror And Facebook 3Q--5 Things To Know Today. Today's story can be found here.