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Power Sheet – May 9, 2016

Sometimes a leader’s most important job is leading people where they don’t want to go. That was the theme of John F. Kennedy’s Profiles in Courage, and many historians have made the same point. For a reminder of how following the populace rather than leading it can be disastrous, turn your attention to the Philippines, where the polls in the presidential election closed not long ago. As I write, Rodrigo Duterte is reported to be well ahead with two-thirds of the votes counted, and if you haven’t been following this race, you won’t believe how he has become the likely victor.

Remember that the Philippines have been a democracy since 1986, when Corazon Aquino, mother of current President Benigno Aquino III, was elected president. By law he can’t run for re-election, and he urged the other candidates to unite against Duterte, but they refused; Duterte needs only a plurality to win. At his campaign rallies, which in some cases attracted hundreds of thousands of supporters, he essentially promised to end democracy – to declare “a revolutionary government” – if congress thwarts his will. He bragged about overseeing the killing of hundreds of alleged criminals, without trials, as mayor of the the city of Davao, and he promised to kill thousands more – to “fill Manila Bay with their bodies” – to impose order if elected president.

In his heavily Catholic country he called Pope Francis “the son of a whore,” and he routinely dismisses critics in language you will not read in Power Sheet. He made a joke about an Australian nun who was raped and killed in the Philippines; when the ambassadors of Australia and the U.S. objected, he told them to “shut up.” He angrily denied media reports that he had a secret bank account filled with wealth from payoffs until a journalist proved its existence by making a deposit. He then admitted it, shrugged, and made a joke.

His followers love all of it. The more he insults everyone in power and promises to blow up the system, the more popular he becomes. The Philippine economy has been growing smartly, but millions of Filipinos remain grindingly poor, and rampant crime makes their lives miserable. They’re desperate for a candidate who talks like them and promises the magic of a sudden solution to their problems, and never mind the niceties of how he’d do it. His supporters are not a majority of Filipinos; polls show that they’re only about 30% of the voting public. But under the rules, that may be enough.

Duterte gave them exactly what they wanted, and he is probably the Philippines’ next president. But his tough-talking campaign strategy was the opposite of courage. It’s often said that bullies are the biggest cowards, and he’s a stellar example.

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What We’re Reading Today

Donald Trump targets Paul Ryan  

In a standoff between the presumptive GOP nominee and the highest ranking elected Republican, Trump threatened to block Ryan as the Republican National Convention chairman. The move follows Ryan’s statement last week that he’s not yet ready to support Trump. But Trump has also signaled he wants to court some GOP leaders.  NYT

Judge weighs dismissing case challenging Redstone’s competency 

In a closed-door session on Friday, Judge David Cowan said he would have to weigh throwing out the case after seeing video of Sumner Redstone‘s deposition. The former Viacom and CBS chairman struggled to answer some questions but reiterated multiple times his dislike of former companion Manuela Herzer, who brought the case. Cowan said it was “strong evidence” and will announce today his decision on whether to dismiss.   Fortune

The costly search for Iger’s replacement at Disney

With Bob Iger‘s heir apparent, Tom Staggs, stepping down as COO on Friday, Iger’s successor search begins anew. Disney can go one of two ways: Hire a young prospect to groom or promise the spot to a star CEO. The second path could cost Disney millions because strong CEO prospects may demand a promised start date, with major payouts if the company doesn’t deliver. Iger’s contract expires in two years. WSJ

Twitter restricts data available to intelligence agencies 

In another example of growing tensions between tech firms and the federal government, Twitter has stopped intelligence agencies from receiving alerts provided by a company that Twitter authorizes to access its entire real-time stream of public tweets. The service told intelligence agencies Twitter didn’t want it to provide the information to agencies any longer. Jack Dorsey‘s company says it has a policy of not allowing third parties to sell data to governments for surveillance purposes. ZDNet

Building a Better Leader

Over 40% of employee turnover happens in the first month…

…of a new job. Employers’ on-boarding efforts should begin before new hires step into the office, to ensure they stick around. Fast Company

Your perfect employees aren’t all that perfect 

But embrace their mistakes. Discovering a person’s shortcomings could signal they would fit better in another part of the company.  Fortune

The more LinkedIn connections one has…

…the less valuable the tool becomes. When it comes to social networks, a close-knit circle is better than a large, vacuous one. Harvard Business Review

Government Interventions

Deadline in North Carolina hits

Last week, the U.S. Justice Department notified North Carolina Governor Pat McCrory that the state’s recent transgender bathroom law violates the Civil Rights Act. McCrory has until today to respond with a solution. If he doesn’t, Justice could pursue efforts to strip North Carolina of millions of dollars in federal funding. CNN

Uber and Lyft will exit Austin

The ride-hailing services wanted a city ordinance that would let them conduct their own background checks on drivers; the city wanted fingerprints of drivers. Travis Kalanick‘s Uber and Logan Green‘s Lyft spent $8 million trying to win a city-wide vote on the issue Saturday but lost. In response, the two companies say they will leave Austin. Mayor Steve Adler has invited the companies to negotiate. Fortune

China’s support of unprofitable factories leads to overproduction

Despite President Xi Jinping‘s promises to stop subsidizing excess capacity, the country continues to prop up steelmakers and aluminum producers, among other industrial goods companies. The resulting overproduction is hurting U.S. companies, leading to tense trade disputes between China and the U.S. WSJ

Up or Out

CEO Renaud Laplanche announced he will immediately resign from Lending Club after an internal review showed he violated the company’s business practices. President Scott Sanborn will step in as acting CEO.  Business Insider

Fortune Reads and Videos

PayPal to drop purchase protection… 

…for those backing crowdfunded projects. That may be a good thing for crowdfunding. Fortune

A Swiss tax haven wants to become… 

…”Crypto Valley” with its embrace of bitcoin. Fortune

50% of teens say they’re addicted to their phones

And 70% of parents and teens say they’ve fought over using them.  Fortune

Quote of the Day

“Disappointment does not begin to describe how we feel about shutting down operations in Austin…We hope the City Council will reconsider their ordinance so we can work together to make the streets of Austin a safer place for everyone.” — A statement by Uber after Austin voters rebuffed their wish to conduct their own background checks on drivers. 

“The people have spoken clearly tonight. Uber and Lyft are welcome to stay and I invite them to the table regardless.” — Austin Mayor Steve Adler.  Fortune

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Produced by Ryan Derousseau
@ryanderous
powersheet@newsletters.fortune.com