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Good morning. It’s Friday, so time for feedback.
My post on Jack Welch proved its point: two decades after he stepped down as CEO of GE, he is still a hot topic of conversation. A sampling:
“I happened to be one of Jack’s early certified Six Sigma Master Black Belts…Jack’s commitment to implementing Six Sigma in GE was SO much more than just a return of money to GE’s shareholders… The more subtle, powerful benefits of Six Sigma were the following: 1) creation of one language, mindset and purpose across all functions and levels of GE as well as with customers and suppliers, 2) education and professional growth opportunity for employees, 3) built a strong foundation for the incorporation of other powerful business and process models and 4) instilled loyalty and pride in belonging to GE and established a model for integrity. All the benefits I noted were a perfect fit with the man Jack was.”
—B.L. (I note, because it is relevant, that B.L. is female.)
“I inherited 80 GE shares in the early 1970s. Dividends were reinvested in GE. By 2000 each of the original shares had become 96 via splits…The last sale in March 2000 made the final payment on a newly constructed, no-mortgage home which we called ‘the house that Jack built.’”
“I’d categorize him as the right person with the right approach for his time…Our world has changed. Our world’s societies have different needs. He might not be a great business leader today, and if we look at him only through today’s lens, he may not look like the business genius he proved to be in the 80s. Who knows, those who follow us may write similar commentary about Satya Nadella or Jamie Dimon 20 years after each ends his tenure.”
And then this message, which I sense was sent with some sarcasm:
“If only Jack had been as smart and successful as you.”
On my new obsession with Robotic Process Automation, I received these messages:
“My wife is a social roboticist and used her training to create an ed tech company that uses small inexpensive robots to augment primary education.”
“I am glad you have seen through the mirage of A.I.–it’s nowhere near being a reality. But please don’t fall for the RPA hype as well. It’s nothing more than continued automation of manual tasks, in other words programming.”
And finally, this on Fortune’s new paywall:
“I have been a subscriber to Fortune magazine since I left the U.S. Army in the mid-1990’s and I love your magazine. My dominant professional functional focus has always been pricing. I applaud the management team for moving to a paid model at Fortune. I hope the whole industry moves that way. Free things are treated like barbershop candy. They get lost under the seat of your car because we don’t value ‘free.’ Capitalism forces quality to improve once a dollar value is attached as customers demand more and suppliers deliver more. I appreciate that and believe it is good for Fortune, good for your industry, and good for the country.”
We agree, J.D.! News below.
Yesterday's coronavirus-fueled selloff in the U.S. (S&P 500 down 3.4%) continued in Asia and Europe today. Nikkei 225 down 2.7%; Shanghai Composite down 1.2%; Stoxx Europe 600 down (at the time of writing) 3.9%. U.S. futures look dim. Analysts say the markets are pricing in further interest-rate reductions this year. Wall Street Journal
Jamie Dimon had emergency heart surgery yesterday, and apparently he is now "recovering well". The 63-year-old JPMorgan Chase chief has placed co-presidents Daniel Pinto and Gordon Smith in charge while he recuperates. Fortune
Kunlun, the Chinese owner of the popular gay dating app Grindr, has agreed to sell it, in accordance with the wishes of the U.S. government, which has undisclosed concerns (possibly privacy-related) about the gaming company's ownership of the app. The company will make around $608.5 million from the sale to San Vicente Acquisition LLC, in which former Baidu exec James Lu is an investor. Reuters
Korean Air heiress Heather Cho (famed for her 2014 "nut rage" tantrum) is trying to engineer a shareholder revolt against her brother Walter, the chairman and CEO of parent conglomerate Hanjin Group. She backed an activist fund that is trying to depose Walter Cho, who is attempting to fend off the attack by suggesting he will agree to demands such as the sale of non-core assets. The family feud has actually led to a substantial surge in Hanjin's share price, though it fell 7.4% today. South China Morning Post
AROUND THE WATER COOLER
China has issued almost 5,000 force majeure certificates during the coronavirus crisis, giving companies exemptions from around $53.8 billion in contracts. However, while the certificates may carry weight in China, experts warn the companies will mostly find them useless when trying to get out of contracts with international parties. CNBC
Despite market volatility, Germany's Thyssenkrupp has managed to raise €17.2 billion ($19.4 billion) through the sale of its elevators-and-escalators business to private equity firms Advent International and Cinven. That healthily beats Thyssenkrupp's own expectations of €13-14 billion. As the Financial Times notes, the PE firms were "even more attracted" to the business because of the coronavirus outbreak—servicing contracts keep bringing in the cash, downturn or no downturn. FT
The U.K.'s National Audit Office has calculated that the country has spent at least $5.7 billion on preparations for Brexit. That's less than the money the Treasury had set aside, though it could be an undercount as the NAO said government departments had shared only limited information with it. The money went on staffing, advertising and consultants. Bloomberg
Fortune's Lucinda Shen has an in-depth piece on Robinhood's catastrophic outage a few days ago. She writes: "Stock-trading darling Robinhood, which was founded in 2013, had successfully sold itself to millions of users as a digital-native app for Internet-savvy young traders…As Robinhood may be learning, one problem with those Internet-savvy customers is that when things go wrong they know exactly how to vent their frustrations." Fortune
This edition of CEO Daily was edited by David Meyer.