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Good morning.
Over the past six months, Fortune and McKinsey & Co. have convened a series of roundtables with leading CEOs who have worked to pursue a corporate purpose beyond profits. Our goal was to devise a playbook for others trying to follow this stakeholder-centered approach. We published the results in a report available this morning. There are seven major takeaways, but I will share the top two here:
—In the long run, there is no tradeoff between profit and purpose. To a person, the CEOs we convened insisted that over time, as IBM CEO Arvind Krishna put it, “Purpose and profit go together, reinforcing each other.” PayPal CEO Dan Schulman took it one step further: “I’d actually argue if you don’t have a purpose as a company, you will be less successful from a results perspective.”
—Purpose begins with your employees. In an economy where human capital increasingly drives business value, an employee-first approach has become essential. “Purpose starts with supporting your own teams and front lines. They in turn support our customers, which takes care of business,” said Best Buy CEO Corie Barry. You can find the full report here.
Separately, I met virtually yesterday with several dozen senior executives on our new leadership platform, Fortune CONNECT, for an interesting exercise led by Thomas Kolditz, founding director of the Doerr Institute for New Leaders at Rice University. Kolditz had the CONNECT fellows work together to identify their own gifts, their passions and their values, and then use those to define their personal purpose. (Gifts + Passion + Values = Purpose). The real magic happens when your personal purpose aligns with the purpose of the company you work for.
Sound like an interesting exercise? Maybe you should join Fortune CONNECT—more information here. Other news below. And in honor of Veterans Day, a look at how veterans may hold the key to curing what ails America here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
European crest?
There are signs that Europe's latest wave of COVID infections may have crested in countries such as the U.K., Germany, France, Belgium, the Netherlands and the Czech Republic. If the trend holds, that's a testament to the restrictions of varying strictness that countries imposed over recent weeks, in an attempt to slow down the pandemic. But sensible observers will wait for more data over the next week or two before making any calls. Bloomberg
Moderna update
Moderna expects to reveal the efficacy of its vaccine by the end of this month. The company is using the same "messenger RNA" approach as Pfizer/BioNTech, whose candidate vaccine appears to be over 90% effective. Moderna's large-scale clinical trial crossed the necessary threshold to allow its vaccine to be considered for FDA approval—now it just needs the trial's independent Data and Safety Monitoring Board to evaluate the data. The markets are optimistic; Moderna's share price rose 8.4% yesterday. Fortune
IPO block
It's not just Ant Group—another Chinese tech firm, software developer Jiangsu Netin, has also had its IPO denied. This time it was by the Shenzhen, rather than Shanghai, stock exchange. Shenzhen's ChiNext board said Jiangsu Netin didn't disclose enough information about tax payments, and stake transfers among shareholders. Fortune
Tencent profit
Tencent's quarterly profit is up 89% to $5.8 billion, thanks to strength in the firm's core gaming (see: Honor of Kings) and advertising businesses. Revenue was up 29%. The world's biggest gaming firm by revenue said Chinese ad activity seems to have recovered from COVID-19, but its cloud division is still suffering from project deployment delays and companies holding off on signing new contracts. Reuters
AROUND THE WATER COOLER
Kodak options
Eastman Kodak has made a rather startling admission: five of its former execs sold stock options they didn't own, allowing them to rake in millions of dollars. CFO David Bullwinkle said on an earnings call yesterday that the firm had discovered deficiencies in its controls "with regard to the timely input and verification of master data updates for equity grants." Wall Street Journal
Social bias
Boris Johnson's office has reportedly asked his culture department to consider imposing a "duty of impartiality" on social-media platforms, as part of the upcoming Online Harms Bill. A Financial Times source said: "There is a discussion paper circulating looking at content moderation and algorithmic bias which appears to take the position that online platforms are censoring conservative content." FT
Big Oil
Big Oil thinks it can get President-elect Joe Biden's administration on board with its approach to decarbonization. Former BP CEO Bob Dudley: "If you look at the campaign rhetoric around it, I think you have a spectrum in his party. I think he understands it, it can’t be as fast." Occidental CEO Vicki Hollub: "I’m not as worried as some people are. It is going to take some work to share that knowledge and to get his staff on board." CNBC
Big Crypto
Joe Biden's election is good news for the cryptocurrency sector, according to Kristin Smith, executive director of the Blockchain Association. "I think what we see with a Biden administration is an opportunity to get some fresh faces into the key regulatory agencies that might be more willing than some of the other regulators that we have today to move forward on policies that would be good for crypto," she said on the latest episode of Fortune's Balancing the Ledger. Fortune
This edition of CEO Daily was edited by David Meyer.
