Business leaders around the world think consultant and bestselling author Ram Charan is worth listening to, and with good reason. Some 40 years of advising the world’s top CEOs has given him insights few can match. This morning he shares some of what he’s telling clients this week:
While Donald Trump seems not to have done well in the debate on Monday, polling results still show an extremely close race. CEOs must ditch the wishful notion that he will not win the election. He could. So be prepared for the potential fallout from a President Trump’s actions on these issues:
-International trade. Based on campaign promises, he’ll have to negotiate with the most chronic and persistent U.S. trade deficit countries to achieve balance, persuading them to take corrective actions. It won’t be easy, but success here could create domestic jobs and contribute to federal deficit reduction. Done poorly, it could result in trade war.
-A middle-class tax cut. He has promised a massive cut that will be hard to deliver. But even if he’s only partially successful, the effects on consumers and on your employees could be substantial.
-Investing in infrastructure. This makes good sense in theory. In practice it will be constrained by fiscal reality, and there’s always the question of whether projects would be value-creating investments or bridges to nowhere. But again, even partial success could produce significant effects.
These three initiatives done right will contribute to GDP growth.
In addition, pay close attention to the team Trump assembles to run the departments of State, Treasury, Commerce, and Defense. Secretary of State John Kerry is consumed by Syria, Russia, and the Middle East, with little else happening in the management of U.S. foreign policy. One hears little from Treasury Secretary Jack Lew or Commerce Secretary Penny Pritzker. Leadership in both those departments is needed for GDP growth.
Luck favors the prepared. Lose no time in exploring how various scenarios, particularly major changes in currency exchange rates, disruptions in the flows of materials and final goods, or the imposition of tariffs could affect your business. Selection of a President Trump’s team could be an important determinant of all those changes; let it be your early warning signal.
We’re switching to a new email provider soon. To make sure you keep getting Power Sheet, please whitelist or add email@example.com to your address book.
You can share Power Sheet with friends and followers here.
What We’re Reading Today
Redstone Family encourages Viacom and CBS to merge
National Amusements, the holding company that Sumner Redstone uses to control 80% of Viacom and CBS’s voting shares, will send a letter to the companies encouraging them to discuss a merger. One reason the idea may gain steam is the lack of leadership at Viacom, since its interim CEO Tom Dooley will soon step down. CBS CEO Les Moonves remains in the good graces of the Redstones, however he has yet to show support for the idea. Fortune
California suspends ties with Wells Fargo
As Wells Fargo CEO John Stumpf prepares to testify to a House committee today, California Treasurer John Chiang announced that the state would suspend business relationships with the company for one year. Over the next year, California won’t use the bank to underwrite bond offerings or to buy stocks and bonds. While it will have little impact on Wells’ profit, the symbolism is stark for the West Coast banking institution. Los Angeles Times
OPEC agrees to cut oil production
It’s the first time in eight years that the OPEC nations agreed to any cut in production. OPEC president Mohammed Bin Saleh Al-Sada announced the cuts from 33.2 million barrels a day to 32.5 million and 33 million barrels. While less than 1% in reduction, it sent oil prices rising; it signals an effort to end the glut of supply in the market and achieved a resolution internally as Iran continues to increase production in an effort to build up its oil industry. ABC News
Congress nixes Obama’s veto
In a first for his presidency, President Obama‘s veto of a 9/11 bill that would allow families of victims to sue Saudi Arabia was overridden by Congress. While both the House and Senate overwhelmingly chose to override the veto, Obama called it a “political vote.” Obama contends that by allowing this, it opens up the potential for other countries to sue the U.S. and its military. CNN
Building a Better Leader
Advertising online can have side effects…
…like accidentally promoting competitors instead. When looking at restaurants, researchers found that the ads improved competitors’ combined sales five times greater than the restaurant doing the advertising. Stanford Insights
Need support to nap at work?
A 20-minute power nap has been shown to improve memory, much like that seen from regular sleep. Fortune
To encourage introverts in the office…
…open many forms of communications, since they often will prefer to chat via email or Slack. Also, don’t punish them for not showing up to work happy hours. CIO
New Adidas CEO sets to take on Nike
Kasper Rorsted is set to officially take over the top spot on Saturday. But he takes over as outgoing CEO Herbert Hainer has steered the sporting good firm through a turnaround. North American sales surpass Under Armour while the share price has doubled over the past year. For Rorsted, known for turning around Germany’s Henkel, it’s a tough spot, but one where he will likely focus on sports partnerships and growing Adidas sales in the U.S. WSJ
BlackBerry scraps making its own phones
Instead the onetime gold standard in mobile phones will outsource the entire phone-making process. This move allows John Chen‘s company to focus on its software, which has more than doubled in sales over the past year. The Next Web
Yahoo security head details massive breach
Speaking at a tech event, Yahoo chief security officer Bob Lord said the hack of 500 million accounts announced last week was unrelated to a previous report of a hacker selling Yahoo accounts online. But searching for the culprit led to the discovery of the leak of 500 million accounts from 2014. The timing of when Yahoo knew about the hack is critical to Marissa Mayer‘s sale of Yahoo’s Internet business to Lowell McAdam‘s Verizon. If Yahoo knew about the hack prior to signing the sell, then Verizon could potentially back away from the agreement. Fortune
Up or Out
YouTube has hired Lyor Cohen as global head of its music division. Fortune
Eric Aboaf will join State Street in December, and will succeed Mike Bell as CFO in March. WSJ
Fortune Reads and Videos
We’re starting to see the impact of deep learning…
…where machines can teach themselves. It’s how your phone can recognize which of your photos have dogs in them, and companies are figuring out ways to utilize the technology. Fortune
700 department stores have closed since 2013
For companies like Macy’s, Kohl’s and J.C. Penney, it accounts for 20% of all the department names’ store counts. Fortune
Cybersecurity firm says same hackers that breached the DNC…
…also targeted journalists that investigated the MH17 crash. Malaysia Airlines flight 17 is believed to have been shot down by a Russian-manufactured missile from a part of the Ukraine controlled by pro-Russian rebels. Fortune
64% of drivers say they want to remain in full control…
…of the car, at all times. And according to a new survey, 80% want to be able to take control from an autonomous vehicle, in a signal to the car industry that drivers remain hesitant about full autonomous technology. Fortune
Quote of the Day
“What this legislation did is it said if a private citizen believes that having been victimized by terrorism — that another country didn’t do enough to stop one of its citizens, for example, in engaging in terrorism — that they can file a personal lawsuit, a private lawsuit in court…And the problem with that is that if we eliminate this notion of sovereign immunity, then our men and women in uniform around the world could potentially start seeing ourselves subject to reciprocal laws.“ — President Obama discussing the congressional override of his veto of a 9/11 bill that would allow victims’ families to sue Saudi Arabia. CNN