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Ram Charan: Embrace Trump’s Cabinet

This morning, a pointed message from a business sage who has proven himself – yet again – worth listening to.

In this space on September 28 I quoted consultant Ram Charan as follows:

“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….”

Ram then presciently outlined specific issues that were central to Trump’s campaign and how business leaders should start preparing on each of them. He also emphasized the importance of Trump’s cabinet choices. With those nominees named, here’s Ram’s insight now:

“In this age of digital transform, the underlying principle is Bayes’ Theorem, the mid-18th-century equation at the foundation of every modern algorithm. The basic idea: You have a prior judgment about the future, and when you get new information, your ability to predict the future improves. With regard to policy in the Trump administration, that new information is the identity of the cabinet.

“This cabinet is different from all previous ones in at least this way: Every member is seasoned in getting things done. They are doers. Business leaders have access to them directly. They are peers. Go work with them. Help shape the agenda. They may have little experience working directly with Congress, but all of them have worked with legislators in one way or another. Most or all of them will be confirmed by the Senate in short order, so there’s no time to lose.

“Leaders go with the flow of reality. They also shape it. Now that Trump is president, suspend your previous beliefs. Go with the flow, and shape it.”

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What We’re Reading Today

Arrest warrant sought for Samsung heir
A special prosecutor will seek an arrest warrant for Samsung Electronics vice chairman Jay Y. Lee. Last week prosecutors questioned Lee for 22 hours, trying to determine whether a $25-million payment to foundations run by South Korean President Park Geun-hye‘s confidant was to ensure approval of a merger between two Samsung affiliates. The charges add uncertainty to Samsung’s leadership; Lee has acted as de facto chief since his father’s 2014 heart attack. Samsung opposes the decision to charge Lee. BBC

Snap IPO will offer zero votes to new investors
In a common arrangement for tech companies going public, Snap Inc. will issue multiple classes of stock, ensuring founders Evan Spiegel and Bobby Murphy retain control. They’ll hold about 45% of the shares but over 70% of the voting power. What’s unusual is that new investors will get no votes at all.  WSJ

Maker of Ray-Bans to merge with Essilor
Leonardo Del Vecchio‘s Luxottica, which owns the Ray-Ban and Oakley eyeglass brands, among others, will merge with the French lens maker Essilor in a $49-billion deal. Del Vecchio will be CEO of the combined firm, while Essilor Chairman and CEO Hubert Sagnieres will become executive vice-chairman and deputy CEO. Fortune

Building Better Leaders

Companies could unlock $12 trillion…
…of cost savings and revenue gains by 2030 if they create strategies to reach the United Nations’ Sustainable Development Goals of ending poverty and protecting the planet, according to a new report. About 90% of new jobs created would be in the developing world. Reuters

Before you sign the contract for a new job…
…look for red flags in the fine print. The length of time a non-compete restriction stays in effect, in particular, will ensure your future options aren’t limited.  Fortune

People’s mistrust in business, media, government, and NGOs…
…increased, according to the Edelman Trust Barometer. It’s the first time in the 17 years the global survey has been conducted that it found trust declining in all four categories.  Harvard Business Review

Trump latest

More Dems say they won’t attend the inauguration
At least 20 House members say they won’t attend President-elect Trump‘s inauguration, in some cases because of his remarks about Rep. John Lewis, a longtime civil rights leader. Lewis said Trump wasn’t a legitimate president because Russia influenced the election, prompting Trump to respond via Twitter that Lewis was all talk, “no action.” Lewis backers point out that he marched and was even beaten in protests for civil rights. WSJ

Trump threatens German automakers
In an interview with the German newspaper Bild, Trump admonished German carmakers for not making more vehicles in the U.S. and said if they continue to sell to the U.S. without building vehicles there, he would impose a 35% border tax. Germany’s automotive industry association said German automakers over the past seven years have quadrupled light vehicle production in the U.S. Reuters

Trump says Obamacare replacement…
…will provide health insurance for all. Without giving specifics, Trump said his plan would also force drug companies to negotiate directly with Medicare and Medicaid to reduce prices. He added that more specifics will come once his nominee to head Health and Human Services, Tom Price, is confirmed. CNN

Up or Out

Michael Lynton has resigned as CEO of Sony Entertainment to become chairman of Snap.  TechCrunch

Fortune Reads and Videos

Peter Thiel is considering a gubernatorial run…
…in California’s 2018 race. But those close to him doubt he’ll do it, given the state’s strong Democratic tilt. Fortune

Weapons of mass destruction are the world’s No. 1 risk
So say world leaders in a World Economic Forum survey conducted before Trump remarks encouraging development of more nuclear weapons. Fortune 

India expresses anger over Amazon selling sandals…
…bearing the image of Mahatma Gandhi. The company is halting their sale. It’s the second such incident in a week, after Amazon previously offered a doormat resembling India’s flag. Fortune

Quote of the Day

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” — Martin Luther King, Jr., whose birthday is January 15 but is observed today.  Heavy

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