Power Sheet – January 21, 2015
There are moments when bad news piles up like a snowdrift and it becomes impossible to dispute that the world is doomed. This is one of those moments.
The earth is cooking: Last year was the hottest ever recorded, resulting in global weather weirdness such as devastating Mississippi River floods in December. Stock markets are plunging: The Dow has lost 1,700 points, almost 10%, in three weeks, reflecting deepening fears of multiple economic woes, such as… China is slowing: Its economy grew last year at its slowest pace in 25 years and, as my Fortune colleague Scott Cendrowski points out, the official growth numbers are almost certainly exaggerated. Oil is falling: The rout continues, with prices now around $26, and while that may be an eventual economic benefit for many countries, it’s an immediate problem for the world economy. It’s one reason why… Global growth is disappointing: The World Bank recently cut its forecast of 2016 global growth, and most other forecasters are doing the same. And as if all that weren’t bad enough… Bernie Sanders is surging: He leads Hillary Clinton in New Hampshire and maybe in Iowa, propelled in part by fantasyland economic proposals that would stop any growth the U.S. economy has left in it.
Depressed yet? I detail this catalog of misery because part of a leader’s job is to offer hope, which seems almost impossible at the moment. Yet it can be done. We just need to lift our gaze from today’s news and look at the slightly bigger picture. Among the things you may notice, chosen at random and in no particular order:
-The developed world—the U.S., the European Union, and Japan—stopped using more energy just before the last recession. Their economies have grown since then (if not terribly fast), but they haven’t used more energy. This is unprecedented in world history.
-The world’s people are better off than they used to be. In the developed countries we’re focused on stagnant wages, missing the larger reality that billions of people have risen from incredibly miserable poverty in the past 20 years. There’s a long way to go, but this is astounding progress.
-People are living longer. Yes, the trend brings problems. But on the whole I bet you’d agree that life is good and more of it is better.
-We live in the most peaceful world there has ever been. I realize that sounds crazy, but it’s a fact that Harvard’s Steven Pinker has documented in his brilliant book The Better Angels of Our Nature, which Bill Gates has called “the most important book of the decade.”
-Pretty soon we won’t have to drive. Maybe you can remember when it was fun, but now it’s just dangerous drudgery. Accidents are declining in the U.S. and will fall dramatically as autonomous vehicles take over. And by the way, the U.S. has now gone over five years without even one person dying in a passenger airline accident.
-There are no statistics on this, but the world is certainly more full of creativity, energy, and promise than ever, with more people who are better educated receiving more opportunities to use their abilities.
-And if you insist on something more immediate to cheer you up, consider that on Sunday afternoon we will get to see two of football’s all-time greatest quarterbacks, Peyton Manning and Tom Brady, face one another, almost certainly for the last time, in a high-stakes game.
Even at moments like this, the good news is out there if we look for it. And I would even say it outweighs the bad. Cheer up!
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What We're Reading Today
Viacom slashes Sumner Redstone's pay
As investors continue to express concerns over Redstone's health, Viacom pre-released compensation numbers showing that the executive chairman's pay dropped 85% to $2 million in 2015. CEO Philippe Dauman's pay dropped 16% to $36.9 million. The company faces a lawsuit over Redstone's pay when, the suit alleges, he was physically and mentally unable to carry out his duties. ABC News
News Corp. denies interest in Twitter
As rumors circulated yesterday that Rupert Murdoch's News Corp. was interested in buying Jack Dorsey's social network, Twitter's stock rose from record lows. News Corp. quickly squashed the rumors. Re/code
Walmart begins second phase of pay hikes
Walmart will raise its starting wage for new employees from $9 an hour to $10 at the beginning of February. It's the second of three steps to increase wages at the stores to an average hourly full-time rate of $13.38 by 2016. CEO Doug McMillon has championed the move, admitting that it will cut into short-term profits. The plan will cost $2.7 billion over the next two years, but Walmart says customer experience and employee engagement are already improving. Fortune
Tech companies debate surveillance demands at Davos
Large U.S. tech companies face growing pressure from European countries to turn over encrypted messaging from users of sites like Facebook and WhatsApp. Satya Nadella's Microsoft argues it's an impossible position because laws also require them to protect user privacy. Requests from European law enforcement stepped up after the Paris attacks, as suspected ISIS members recruited via social sites. WSJ
Building a Better Leader
Zappos responds to reports that 18% of its workforce...
...fled after CEO Tony Hsieh got rid of traditional managers. The company says a very strong severance offer contributed to the departures. Medium
Get $500,000 for your startup...
… if it's headed by women or minorities. All you have to do is move the company to Ohio. A nonprofit group called JumpStart has raised $10 million to attract such companies. Fortune
How many board seats are too many?
Companies increasingly see the benefits of limiting the number of boards their directors sit on. WSJ
Michigan governor's emails reveal skeptical Flint water response
After releasing his emails from 2014 and 2015 related to the water crisis in Flint, Gov. Rick Snyder and his administration face more questions about their skepticism of claims of lead poisoning in Flint's water and their slow response. Complaints of odd smells and rashes went unanswered, even after General Motors stopped using the water for fear it would corrode parts at one of its engine plants. NYT
Putin likely behind poisoning
A British inquiry into the death of a former KGB agent who had become a UK intelligence agent found that Russian President Vladimir Putin "probably" approved the poisoning of Alexander Litvinenko. The suspected assassins, Andrei Lugovoi and Dmitry Kovtun, remain under Russian protection despite Britain's attempts to extradite them. The report adds tension to relations between the countries as the West seeks Russian cooperation in fighting ISIS. Washington Post
Martin Shkreli called to Congress
The House Committee on Oversight and Government Reform has called Shkreli to testify on drug price hikes he approved while he was CEO of Turing Pharmaceuticals. The Senate's Special Committee on Aging says Shkreli has invoked his 5th amendment protection against self-incrimination in refusing to produce subpoenaed documents. Shkreli hasn't said whether he will testify to the House committee. Reuters
Up or Out
Citrix hired former Microsoft executive Kirill Tatarinov as CEO. Fortune
LifeLock has named Hilary Schneider CEO. She will succeed Todd Davis in March. WSJ
The Buffalo Bills hired Kathryn Smith as special teams quality control coach, making her the first female to serve as a full-time assistant coach in the National Football League. NBC Sports
Fortune Reads and Videos
Uber overtakes rental cars for business travel
It had already passed taxis for business travelers in the middle of 2015. Fortune
Foxconn offers $5 billion for smartphone screen maker
The acquisition of Sharp, if it happens, would create major synergies in the manufacturing of iPhones. Fortune
Gawker agrees to outside investment
It's the first time founder Nick Denton has sold a portion of Gawker to an outside firm. The media outlet is raising money to fight a defamation lawsuit by Hulk Hogan. Fortune
Disney pushes back the release of Star Wars: Episode VIII
It won't come to theaters until Dec. 15, 2017. Fortune
Two state agencies "feel that some in Flint are taking the very sensitive issue of children’s exposure to lead and trying to turn it into a political football claiming the departments are underestimating the impacts on the populations and particularly trying to shift responsibility to the state...I can’t figure out why the state is responsible except that [then-state treasurer Andy] Dillon did make the ultimate decision so we’re not able to avoid the subject.” —Dennis Muchmore, former chief of staff to Michigan Gov. Rick Snyder, in an email on Sept. 25, 2015 to the governor and lieutenant governor Vox
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|Produced by Ryan Derousseau|