Good morning.
Box CEO Aaron Levie was on stage at Fortune Brainstorm Reinvent yesterday, talking about the course he’s been teaching at Stanford called The Industrialist’s Dilemma, which looks at the disruption of legacy industries. When he started the course four years ago, he “thought startups would take over every industry”—just as Uber disrupted taxis and Airbnb hotels. “But the biggest trend we are seeing now is incumbents who are better using digital to better serve their customers.” Turns out, if incumbent companies get smart about technology quickly enough, they can fend off the digital natives.
That, of course, is the point of Brainstorm Reinvent—helping traditional companies win the battle for the future. But it’s no easy task. I interviewed United Technologies CEO Greg Hayes about his efforts to reinvent the industrial conglomerate he runs. “Companies don’t innovate; people do,” he told me. “And to get them to innovate, you have to allow them to take risks.” But that’s a hard thing to do at a company that engineers industrial products. You don’t want your elevator to fail fast, or your jet engine to be a minimum viable product. Still, Hayes feels he has made progress. “The only way to succeed is to innovate every day. Push the curve. It’s ok to fail, to take a chance, as long as it is thoughtfully.”
By the way, it sounds like United Technologies won’t be a conglomerate for long. It plans to complete its $30 billion purchase of Rockwell Collins this month, doubling down on aviation. And Hayes strongly hinted the company will divest the elevator and HVAC businesses soon after that. “This is the question the board has had and many investors have had: Will these businesses be better as a part of United Technologies as a conglomerate, or better as standalone, focused business?…My view is: Focus ultimately leads to success.”
More on Brainstorm Reinvent here. Also out this morning—Fortune’s Most Powerful Women International list, with GlaxoSmithKline CEO Emma Walmsley taking top honors. Erika Fry and Claire Zillman capture the CEO in their story here, as she works to temper her company’s do-good image with a new sense of discipline and rigor.
Other news below. And take time today to read Beth Kowitt’s piece about how Walmart International CEO Judith McKenna is placing big bets on the future of retail.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
Trump's U.N. Speech
President Donald Trump urged the world to abandon globalism in his speech before the United Nations yesterday. Patriotism was his big theme, alongside swipes at Iran and China. Trump told delegates that "in less than two years, my administration has accomplished more than almost any administration in the history of our country"—when the chamber then erupted in spontaneous laughter, Trump said: "I didn't expect that reaction, but O.K." Guardian
Nuns On Guns
Investors have forced American Outdoor Brands, makers of Smith & Wesson firearms, to consider how to reduce the risks associated with gun violence. The Interfaith Center on Corporate Responsibility led the proposal, which was presented by Sister Judy Byron, and which mirrors another successful resolution at Sturm Ruger. American Outdoor Brands CEO James Debney claimed the vote was "politically motivated." But proxies ISS and Glass Lewis, as well as the giant fund BlackRock, sided with the religious groups. CNBC
Daimler CEO
Daimler has named its first non-German CEO, tapping Ola Kallenius, a Swede, to replace Dieter Zetsche two years ahead of schedule. Zetsche will step down next year, and will return in 2021 as chairman after a cooling-off period. Kallenius is currently development chief at Daimler; before that, he served as sales chief for Mercedes-Benz and headed up the AMG performance cars division. Fortune
CBS Chair
The new interim chairman of the CBS board is Richard Parsons, the former chair of Time Warner and Citigroup. Parsons was one of the six new board members introduced after the ouster of Les Moonves, the erstwhile chair and CEO who was brought down by multiple claims of serious sexual misconduct. New York Times
Around the Water Cooler
Lenovo Stock
Lenovo, which was very recently regarded as the world's worst tech stock, has spectacularly rebounded, by 42% in the last five months. A boost in the PC maker's shipments is behind the reversal of fortune—even Lenovo's smartphones aren't losing as much money as before. It's good timing for China, which needs domestic champions in the context of its trade war with the U.S. Bloomberg
Delta Glitch
Delta Air Lines suffered a computer outage yesterday that grounded planes across the U.S. and left some passengers unable to access their boarding passes. The "ground stop" was lifted around 9.30pm ET, a couple hours after reports of problems came through. Delta said there was no impact on flights that were already in the air. NBC
Recyclable Packaging
Environmental campaigners in the U.K. have been mailing their Walkers potato chip bags back to the PepsiCo-owned manufacturer, in protest of what they see as an overly-slow plan for phasing out non-recyclable packaging. The campaign has led the Royal Mail postal service to beg people to mail the packets in envelopes, as doing so without envelopes causes a great deal of hassle for postal workers. Fortune
Just Dunkin'
Dunkin' Donuts is now just Dunkin'. CEO David Hoffmann: "Our new branding is one of many things we are doing as part of our blueprint for growth to modernize the Dunkin’ experience for our customers. We believe our efforts to transform Dunkin’, while still embracing our incredible heritage, will keep our brand relevant for generations to come." Expect to see the new branding at the start of 2019. Fox Business
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
