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When ‘Learn-It-All’ Beats ‘Know-It-All’ — CEO Daily, Monday, 9th October

October 9, 2017, 11:08 AM UTC

Good morning.

If you aren’t normally inclined to peruse periodicals featuring feathered models, you may have missed WSJ. magazine’s interview with Microsoft CEO Satya Nadella (accompanied by his predecessor, Bill Gates) this weekend. Nadella is one of the most successful, and most thoughtful, CEOs on the scene today, so it’s worth some attention. A few excerpts:

On writing a book mid-career: I ran into Steve Ballmer maybe a couple of months after he had finished as CEO, and I asked him, “Hey, are you writing a book?” And he turned to me and said, “No, that’s in the past.” And that’s when it struck me that maybe while I’m going through it all I should actually reflect on what this process is.

On the importance of empathy: Being hard-core and driven is as essential today as it ever was. But there needs to be humility. The reason why I use the word ‘empathy’ is because the business we are in is to meet the unmet, unarticulated needs of customers. That’s what innovation is all about. And there is no way you’re going to do that without having empathy and curiosity.

On the book Mindset: The New Psychology of Success, by Carol Dweck: My wife was reading it probably two or three years before I became CEO, and she forced me to read it, too. It changed my life. The book is about fixed mind-sets versus growth mind-sets. When you have a growth mind-set, you’re always willing to learn…Ultimately the “learn-it-all” will always do better than the “know-it-all”

On the speed of innovation: There’s never been a period, I guess, when there were three of us spending north of $10 billion in tech on research and development. Like $12 billion. Amazon is spending that, Google is spending that, we are spending that.

On the danger automation will kill jobs: Technological displacement is a real issue. But it’s not going to be a binary transition. There will be new kinds of jobs. We’ll need education and re-skilling…continuous learning. Without the technological breakthroughs, we’re not going to have enough growth, and that’s not going to be good for anybody. So let’s optimize for growth and at the same time solve for the displacement and bring meaningful cohesion to society so that people feel they’re able to participate and contribute.

On Karl Marx: The only part of Marxism that makes sense to me now is the notion of creating surplus so that it can create more surplus for others…I believe that even in a capitalist society, having a long-term distribution of surplus that is more equitable is going to be helpful to keep the system stable.

You can read the full interview here. Nadella’s book, Hit Refresh, was published last month. News below.

Top News

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Trump Spars With Corker on Korea, Democrats on DACA

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Catalans on a Hot Tin Roof 

Spain’s Prime Minister Mariano Rajoy said he won’t let the country be divided and refused to rule out imposing direct rule over Catalonia if it declares independence unilaterally. Regional government head Carles Puigdemont has stalled for time since declaring victory in an illegal referendum eight days ago, but some still expect him to make the declaration in a speech tomorrow. Financial markets have regained their nerve over the weekend, and Spain’s bond and stock markets both opened higher Monday. Fortune

Boeing Gets Into Vendor Finance

Boeing reportedly tried its hand at vendor finance last year. According to the FT, Boeing pumped more than $130 million into an offshore unit of British charter airline Monarch, enabling buyout specialists Greybull to go ahead with their acquisition of the company. Boeing wanted to ensure that Monarch honored a (heavily discounted) deal to take 30 of its new 737 MAX aircraft. Monarch was placed in administration last week having failed to turn itself around. Curiously, Monarch had exercised an option for a further 15 Boeing jets at the list price of $1.7 billion this summer, despite apparently being on the verge of collapse. The news will doubtless provoke wry smiles at Bombardier after all the hoo-hah over unethical dumping of its planes in the U.S. market. FT, metered access

Around the Water Cooler

The Saudi Arabia of Scrap

Scrap is piling up across the U.S. after China, the biggest buyer and processor of it, tightened its rules for accepting foreign waste. The U.S. exports nearly 100 million tons of scrap a year in a trade worth $16.5 billion, but much of that now falls foul of Chinese requirements on “carried waste” like staples and glue that are difficult to separate from the material that has value. WSJ, subscription required

All This (Money) Will Be Lost Like Tears in Rain. Maybe.

After 35 years of waiting and overwhelmingly positive reviews, Blade Runner 2049 fell flat on its opening weekend, taking in only $31 million in North America (after costing $150 million to make). Apparently, millennials were put off by its length (and 163 minutes of running time allows fewer showings). But given the fate of the slow-burning original, Warner Bros may not be too upset. If personal experience is any indication, the film’s core audience of middle-aged parents thirsting for more just needs a little more time to get the baby-sitter booked. Fortune

OneMain Is Back in the News

OneMain, which gained notoriety as Citigroup’s subprime lender, is in talks to sell itself, according to The Wall Street Journal. Citigroup had sold the unit in 2015 to Springleaf, a lender backed by Fortress Investment Group. Its shares have lost nearly half their value in the last year as its borrower pool has been skimmed by new entrants such as LendingClub and Social Finance. WSJ, subscription required

Racism Soap Opera, Act II

Dove, the flagship soap and deodorant brand of Unilever, sleepwalked into another avoidable PR disaster on race relations with a video ad that appeared to equate skin tone with dirt. Unilever, which had already made a similar stumble in May, took down the ad in a hurry after the social media outrage machine got into gear.  Fortune

Summaries by Geoffrey Smith;