Facebook Flurry, Aramco IPO-No, China Tariffs: CEO Daily for March 20, 2018
Good morning. Andrew Nusca here, filling in for Alan.
I heard it in Aetna CEO Mark Bertolini’s opening conversation with Fortune editor-in-chief Cliff Leaf. “People never describe themselves as a disease,” Bertolini said. “But they may have limitations because of their disease.” Approach a condition from the position of “Tell me what’s bothering you” rather than “Tell me what you have,” Bertolini said, and you might convince a patient to hand over personal data in pursuit of a solution to what ultimately irks them. Not a bad strategy for a $69 billion health insurer.
I heard it at a luncheon that was focused on the issues with the drug development pipeline. It’s not technology or regulation or any complex system that is blocking more aggressive drug development in the almost half a trillion-dollar U.S. pharmaceutical industry, health executives in the room seemed to agree. It is simply an ingrained culture of conservatism. “You need to fail fast,” said Lesley Stolz of Johnson & Johnson. “But a lot of researchers are not incentivized to fail fast.”
And I certainly heard it in business strategist Tony Robbins’ stellar conversation with Dr. David Agus that closed the evening. Robbins made clear that he is an avowed technologist, yet one of the many themes he discussed was decidedly analog: how important it is to carry yourself in a way that encourages positive behavior. Want to stay depressed? Keep your shoulders slumped and your voice quiet and your breathing shallow. “Most people try to change the mind,” Robbins said, by telling themselves to be happier. “But when you change the body radically, you change the biochemistry, the state changes, and you make a shift.” (Watch the entire session here.)
At a time when macro forces seem to dominate our interconnected world today—the shifting impact of trade between nations, the ripple effects of digital disinformation, the scourge of sexual harassment in the corporate world—I found the scale of the conversation to be refreshing, if not empowering. Amid great change, perhaps we all have a little more control than we give ourselves credit for.
Speaking of sexual harassment: If you haven’t yet read Kristen Bellstrom and Beth Kowitt’s extraordinary report for Fortune on Michael Ferro, the former chairman of the company that publishes the Chicago Tribune, Los Angeles Times, and New York Daily News, among many other American newspapers, set aside the time. It’s well worth your attention.
More news below.
Mark Zuckerberg, now $6 billion poorer after the Cambridge Analytica scandal caused Facebook's stock to tank, still hasn't come out and said anything about the affair. Meanwhile, things keep getting worse. Facebook hired auditors to check whether Cambridge Analytica really didn't delete millions of Facebook users' data as it claimed it did, only to see the U.K. authorities order those auditors to stand down. And now the New York Times reports that Chief Security Officer Alex Stamos, who has publicly stepped up to defend the company over the Cambridge Analytica affair, is heading for the exit due to disagreements with management over transparency regarding the Russian influence saga. Stamos sort-of-denied the report. NYT
The ongoing drama around Saudi Aramco's eventual stock-market listing has taken a new twist. Now Aramco is apparently going to list on Saudi Arabia's domestic exchange first, then list elsewhere at a later point—"if at all." London, New York and Hong Kong had been vying for that international IPO honor, which was expected to be the largest-ever listing. The two big problems with that, though, have been the Saudis' high expectations for an Aramco valuation at listing, and the regulatory scrutiny that such listings generally entail. CNBC
President Donald Trump is preparing to unveil a $60 billion-per-year package of tariffs against China by Friday, according to reports. As noted yesterday, U.S. industry groups have begged Trump not to follow through with this, but it looks like he might go ahead nonetheless. "There are real concerns about Chinese behavior on intellectual property, for example, but there are much more effective ways to address them," said Phil Levy, George W. Bush's former trade advisor. Washington Post
No Petro for You
President Trump has also banned Americans from buying the Venezuelan government's "Petro" cryptocurrency, which is supposedly backed by the South American country's oil reserves. The ban, issued by presidential order on Monday, may complicate the Petro scheme, as the virtual coin can only be bought in dollars or euros. Fortune
Around the Water Cooler
Is Uber responsible for the death of an Arizona pedestrian who walked in front of one of its self-driving cars? The police say probably not, as the deceased apparently "came from the shadows right into the roadway." So, although Uber has now paused all tests of its autonomous vehicles, there was likely nothing its car's systems or the safety driver who was in the vehicle at the time could have done to avoid the collision. Fortune
Former French president Nicolas Sarkozy has been taken into police custody for questioning over the financing of his successful 2007 campaign. It is alleged that he received millions of euros from the regime of Libyan strongman Muammar Gaddafi, which would have been highly illegal. The inquiry has been going on since 2013, but this is the first time that Sarkozy—who denies the allegations—has himself been taken in for questioning. Guardian
A parcel bomb, apparently bound for Austin, exploded last night at a FedEx facility in a nearby Texas town. Four bombs have been planted in Austin in recent weeks, leading to two deaths. Police say the city is probably facing a serial bomber, although the bomber's motivations remain unclear. BBC
One in seven European companies that had suppliers in the U.K. has moved their supply chain away from the country either fully or partially, according to a new report from the Chartered Institute of Procurement and Supply. It's the latest indication of fears over the effects of Brexit, although it did come shortly after the EU and U.K. agreed to keep their trading relationships pretty much unchanged until the end of 2020. Financial Times