Convene 300 CEOs and other leaders from around the world, listen to them talking for three days about what’s on their minds – as we just did at the Fortune Global Forum in San Francisco – and here are five key words that echo in your mind:
-Volatility. Yes, we know change is getting faster and sharper, but it’s easy to miss how pervasive the phenomenon is. Cybercrime and cyberwar could do more damage than non-experts realize, and the threat is growing. FireEye chief Kevin Mandia says that “last year the rules of engagement between the U.S. and Russia in cyberspace changed.” Used to be that when we caught them in a breach, they would back off. Now they won’t. They just keep coming back, day after day. Former German defense minister Karl-Theodor zu Guttenberg says “it’s only a question of time” before “the first truly damaging attack” – originating who knows where – occurs. More broadly, Allianz chief economic adviser Mohamed el-Erian says there’s “a massive disconnect” between the placidity of the markets and global volatility.
-Disruption. It was the Forum’s theme, but I was still struck by the scope of the ambitions of the digital giants, mainly Google, Facebook, and Apple, and by the energy of the startups. Facebook is disrupting entertainment, journalism, advertising, quite possibly commerce, and potentially almost anything else. Google would like to disrupt autos, payments, healthcare, energy, maybe insurance, and doubtless much more. Angel investor Ron Conway, known as the godfather of Silicon Valley, says he’s astounded by the disruptive ingenuity of the hundreds of startup founders who clamor for his attention, funding, and connections.
-Imagination. It’s a huge challenge for most business people – opening their minds to the possibilities of the digital age. Airbnb co-founder and CEO Brian Chesky recalled how virtually nobody understood his vision, how “everyone told us that no one would stay with a stranger; 60 million people later, I beg to differ.” The key, he said, is that you aren’t staying with a stranger; you get to meet your host online first. Every successful digital startup sounded impossible when an entrepreneur thought of it. Most people are hard-wired for negativity rather than possibility.
-Humanity. A session on automation, jobs, and the future of work sparked blunt disagreement between those who predict technology will eliminate far more jobs than it creates and those who believe that view is nonsense. Yet when I asked which skills will be most valuable as technology advances, everyone agreed: creativity, interpersonal skills, relationship building. When I asked Ron Conway how he decides which startups to back, he said he pays little attention to the business idea; that always changes. Instead he just focuses on the founders. Are they leaders? Will great people want to work for them? Can they build enthusiasm and recruit allies? Salesforce founder and CEO Marc Benioff spoke for many when he summed up his business thus: “It’s not about the technology, the cloud, the service – that’s all hard for me to say – it’s about the customer relationship.”
-Surprisingly – to those who watch too much TV news – one other theme emerged: optimism. Venture capitalist Marc Andreessen reminded us how tech has lifted billions of people out of poverty, and how, despite hand-wringing in developed economies, it has powerfully reduced income inequality worldwide. More generally, spend three days with successful business people of every age from around the world, and you realize that energy, idealism, goodwill, capability, and opportunity have never been more abundant.
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What We’re Reading Today
Janet Yellen: December rate hike a possibility
Speaking to lawmakers about the Federal Reserve’s view of the economy and its plans, Yellen said it’s a “live possibility” that the Fed could raise interest rates in December. Yellen has stated that she still expects an increase before year end, despite tepid economic data, but this statement was the strongest indication yet of the Fed chair’s thinking for next month’s meeting. The Hill
Old Marco Rubio controversy returns
Presidential candidate Rubio will release records that detail his use of a Republican Party credit card, which he used for personal purposes – like to repave his driveway and attend a family reunion – when he served as a state representative in Florida. The controversy came to light when he ran for the Senate, but critics are now using the incident to criticize Rubio’s financial management abilities. NYT
Adidas finds new life in the U.S.
The sports rival to Nike has long struggled in the U.S., but that might be changing. CEO Herbert Hainer said that North American sales rose 6% in the third quarter. He’s negotiating high profile partnerships and signing celebrity deals, including one with Kanye West. Even the struggling TaylorMade golf business improved, though the company still plans to a 14% cut to the brand’s staff. Fortune
Bill Ackman’s big bet on Valeant backfires
Activist investor Ackman has already lost $2 billion on paper from his investment in Valeant, run by J. Michael Pearson, after questions about the pharmaceutical company’s relationship with the Philidor pharmacy arose. As his funds tumble this year because of the bad bet, Ackman has had to defend his decision. He admits he’s finding the role reversal “humbling,” since he’s usually the one questioning management. WSJ
Building a Better Leader
If you want to keep senior managers…
…talk to them about their career goals and future progression. Human Resources Executive
It’s easier to gain power today than ever before
But it’s also easier to lose it and more difficult to make an impact. Fortune
Intuit CEO Brad Smith’s advice to entrepreneurs
Hire an accountant. Inc.
Empowering the Masses
UAW deal with GM on path to ratification
The fate of the labor contract negotiated between the United Auto Workers union and Mary Barra‘s General Motors was in question late Wednesday, as many skilled trade workers rejected the deal. UAW President Dennis Williams warned workers there will be a strike if they turn down the contract. As more results flow in this morning, production workers seem to be supplying enough votes to ratify the agreement. Detroit Free Press
Airbnb, Uber rally users to sway policies
As cities try to update laws on how sharing companies like Uber and Airbnb operate, the startups have turned to their customers and fans to ensure the rules remain friendly to their business. This week, Brian Chesky and Airbnb mobilized its base of users to defeat a proposed law that would have limited short-term rentals in San Francisco. Uber CEO Travis Kalanick has hired political activist Chris Lehane and added David Plouffe to the board in an effort to fend off damaging legislation and position the company’s users as a strong voting force. NYT
Fast food workers plan another strike
It’s scheduled for next week at 270 restaurant locations. The Fight for $15, funded by the Service Employees International Union, is organizing the demonstration in an effort to highlight the cause and to position the workers as a potent political bloc for the 2016 elections. Organizing director for Fight for $15 Kendall Fells says the fast food workers are “putting politicians on notice.” USA Today
Up or Out
FleishmanHillard CEO Dave Senay has stepped down and will be succeeded by the communication firm’s president of the Europe, Middle East, and Africa regions, John Saunders. St. Louis Business Journal
Fortune Reads and Videos
Videos on Facebook hit 8 billion views a day
That’s double what Mark Zuckerberg‘s company recorded in April. Fortune
Jesse Jackson mails Twitter chief Jack Dorsey a demand…
…to provide the racial breakdown of the employees recently laid off by Twitter. Fortune
Uber may soon offer perks for drivers to stay
Travis Kalanick‘s company is considering same-day payments and international money transfers. Fortune
Kraft Heinz to close 7 factories
It will also lay off 2,600 employees and move its Oscar Mayer business from Madison, Wisc. to Chicago. Fortune
“Don’t be so damned depressed. We have all become risk experts and are afraid of our own shadow at this point. Move on. The world is going to be fine.” – Jamie Dimon, JPMorgan Chase CEO, speaking about the world economy and risk aversion of leaders at the Fortune Global Forum. Fortune
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