Power Sheet – January 14, 2015

-General Electric chief Jeff Immelt is moving GE headquarters to Boston after 42 years in Fairfield, Connecticut. Why? Partly because he has felt disrespected by the state government, which has raised corporate taxes and otherwise been inhospitable to business, he has said. But the bigger reason is that the world has changed. Luxurious, verdant suburban campuses are no longer what the best employees want. And believe me, GE HQ is beautiful – unlikely proof that it was actually possible to create something tasteful in the mid-1970s. But who cares anymore? The best people, especially the best young people, want an energetic, stimulating urban environment, and such places are more available than they have been in decades. While GE is undoubtedly getting a great package of incentives in Boston, a major attraction must also be that it’s America’s education capital, practically throbbing with new ideas. The leaders who most have to adapt to changing circumstances now are those in government and commercial real estate.

-What’s going on with Bernie Sanders? A no-hope candidate whom political pros have considered symbolic rather than realistic is suddenly ahead of Hillary Clinton, the supposedly prohibitive favorite, in Iowa and New Hampshire. Clinton’s world has changed, and her challenge is to figure out the best response. It won’t be easy. Adopting Sanders’ far-left policy positions – he’s a self-described socialist – could damage her in the general election, assuming she’s the nominee. Much of his popularity comes from his obvious passion for the issues, and while Clinton may be equally passionate about them, to many voters she does not radiate authenticity; she can’t change who she is. It’s hard to see Sanders ever being elected. He’d be 75 at inauguration, and the country probably isn’t ready to elect a socialist. But if Clinton loses Iowa and New Hampshire, then what? She must do some clever adapting now or she’ll have to do a lot more radical adapting in a month.

-Chipotle’s comeback struggle took a turn for the better yesterday. The stock jumped 6% after co-CEO Steve Ells and other executives told analysts about their planned response to the food contamination scandals that have crushed the stock over the past six months. At an investor conference they made an impressive presentation describing, among other moves, a massive marketing effort scheduled for next month. They made the case that the chain can recover fully, and they may be right. But it will be a long road back, and heaven help them if there’s another problem.

The world never stops changing, and good leaders never stop adapting. It’s really hard. But whoever said leading was easy?

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