Power Sheet - November 6, 2015

Weighing in today from Paris, where, as throughout Europe, the refugee crisis is constantly in the news. Observers outside Europe may not realize how profoundly this crisis threatens the European Union. Former German finance minister Karl-Theodor zu Guttenberg, with whom I spoke earlier this week at the Fortune Global Forum, says this situation is “the most serious challenge to Europe since the fall of communism more than 20 years ago.” In at least one sense, it offers lessons to leaders everywhere.

The lesson centers on this question: Who’s in charge? The answer here: no one, exactly, which is a problem for the EU generally. We saw it earlier this year in the Greek financial crisis, worsened by the halfway nature of the European financial system. Many nations use the same currency, regulated by one central bank, yet each runs its own national economy. When Greece’s economy tanked, it couldn’t respond through currency devaluation, and 19 euro-zone governments had to negotiate a bailout with Greece and with one another. No clear leader carried responsibility, The result was a policy of muddling through that leaves Greece alive but struggling, with exit from the EU still a possibility.

The refugee crisis derives from the same conflict, that Europe aspires to be a unified whole yet has no clear leader. The refugee situation is graver because it threatens one of the foundational goals of the union, a Europe with free travel across borders. Overrun by a growing wave of refugees entering Europe mostly from the south and east – three million are forecast for next year – Hungary, Croatia, Austria, and others mull building border walls or fences, or otherwise restricting entry. Nationalist political parties opposing a united Europe are attracting followers almost everywhere. British voters will vote next year on whether to leave the union. As with financial policy in the Greek crisis, refugee policy is sort of happening un-deliberately, with no person or institution bearing responsibility.

Business leaders don’t deal in the fate of nations or of millions of lives, yet they face this same basic issue all the time. One of the commonest reasons for failure of strategies and projects is that no one is sure who’s in charge. For example, identify a customer of any business and ask who’s in charge of the company’s relationship with that customer. You’ll typically hear that several people are, or you’ll even be told proudly, “Everyone is!” Which means, of course, that no one is. Is it any wonder that companies are so often blindsided when a customer leaves?

Watch a successful leader at the end of a meeting. He or she will summarize what the group has decided to do and who, specifically, is responsible for doing it, and by when. Example: Apple, the world’s most valuable company, follows a longstanding policy of identifying a DRI – a directly responsible individual – for everything it wants to do.

I don’t know how Europe resolves its deep-rooted contradiction of needing union-wide policies without a union-wide leader. Business leaders have it easier. They at least can make sure they always know the answer to: Who’s in charge?

You can share Power Sheet with friends and followers here.

What We're Reading Today

New York to investigate Exxon over climate change claims

Attorney General Eric Schneiderman sent subpoenas to Exxon this week demanding financial records and emails as he investigates whether the oil giant provided false information to the public and shareholders concerning climate change. Exxon CEO Rex Tillerson hasn't decided how his company will respond. The inquiry could lead to subpoenas at other oil companies. Reuters

Square sets low IPO price

It's $11 to $13 a share, producing a market cap of just over $4 billion -- well below the valuation Jack Dorsey's company received in its last round of private funding. Square's private investors will not sell stock in the initial public offering, likely the week before Thanksgiving. Fortune

China lifts 4-month ban on IPOs

As its markets tumbled during the summer, President Xi Jinping put a moratorium on initial public offerings. China may also relieve other restrictions that IPOs had, a sign that the market hiccup in China may not turn into a prolonged downturn. Financial Times

41's words ding Jeb's campaign

In a new biography, former President George H.W. Bush speaks strongly against his son George W. Bush's v.p., Dick Cheney, and defense secretary Donald Rumsfeld. He described Cheney as too quick "to use force" and Rumsfeld as "arrogant." As Jeb Bush continues his campaign for the presidency, he's forced to answer more questions about his family. NYT

Building a Better Leader

Should you be an optimist or a pessimist?

Buddhist priest and chairman of Japan Airlines Kazuo Inamori says you should be both. Bloomberg

Young entrepreneurs really need to stop...

...hiring friends and being so impatient. Fortune

5 companies control 70% of online revenue

Amazon and Alphabet (parent company of Google) together command 57% of revenues. USA Today

Worth Considering

Walgreens may need to eliminate more stores

As Walgreens Boots Alliance looks to lock up its $17.2-billion merger with Rite-Aid, CEO Stefano Pessina has said the company could close up to 1,000 stores in order to comply with U.S. antitrust laws. But vice president of research at Cushman Garrick Brown says Walgreens will likely need to close another 2,000 stores because of location overlap in many states. Fortune

Goldman revamps analyst program

In an effort to attract and retain younger bankers, Goldman Sachs will relaunch its junior analyst program for investment banking, which it scrapped in 2013. It will now extend the program from two years to three in order to relieve some of the pressures and daily grind that had steered many previous participants away from Goldman. It's an effort by CEO Lloyd Blankfein and co-head of investment banking David Solomon to cater to millennials and stop quality employees from leaving early in their careers. WSJ

Overstock stockpiles gold and emergency rations for employees

In the corporate version of doomsday prepping, the Utah company keeps nearly $10 million in gold and silver in order to continue to pay employees in another financial crisis. Company chairman and gubernatorial candidate Jonathan Johnson also said the company keeps three months' food supply for each employee in case a greater catastrophe happens. Quartz

Up or Out

Oscar Munoz, the United Airlines CEO who suffered a heart attack weeks into his role, will return to the company sometime in the first quarter of 2016. NYT

IAG, the owner of British Airways, announced that Chairman Keith Williams will retire in April. Alex Cruz, CEO of Vueling, will replace Williams. The Telegraph