How the business world has changed in the last few decades

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Good morning.

I caught up last week with Jim Collins, whose book Good to Great ranks high on my list of the best business books of all time. Collins recently released an update of an earlier work, Beyond Entrepreneurship 2.0, originally published in 1992. I was eager to talk with him about how the business world had changed since then.

Collins work focuses on enduring rules of business leadership, and he resists those who trumpet change. In the new book, he tells of a conversation with a twenty-something who said his generation “requires a whole new way of leading to inspire and motivate us…We demand that our leaders not only provide direction, but that they also tell us why. And it needs to be a ‘why’ that’s much more than maximizing profits for shareholders.”

Collins’ response: “The greatest company builders have always done that. You are confusing what’s rare with what’s new.” His examples include companies like Johnson & Johnson, Merck, and Patagonia.

Readers of this newsletter know that I believe much has changed. Intellectual property and intangibles are a bigger part of the value of today’s companies today than they were three decades ago; that forces companies to focus more on their employees. The pace of change is faster and scaling is easier than it used to be; that makes it harder for top leaders to provide detailed direction, and more important that they empower employees and set a bright North Star. Social media has enhanced transparency; that makes leaders more accountable for the impact of their companies on society. And the younger generation is indeed different—perhaps not in their desire for meaning, but in how they fulfill it. Millennials are slower to marry, less likely to belong to organized religion, less inclined to join civic clubs, than previous generations—leaving the employer as their main formal connection to society. They want meaning in their work.

Collins didn’t dispute those changes. And he acknowledged more businesses today are pursuing purpose beyond profit—although he warned of the need to distinguish between true purpose and ‘purpose-washing.’ Nevertheless, in his view, the fundamental rules have not changed. In the 1992 book he wrote: “We ask you to reject the classic business school doctrine. ‘Maximize shareholders wealth’ is a simple theoretical way of looking at a business, but it’s not supported by the reality of many great companies…For them, profit is simply a strategic necessity rather than the supreme end point.”

More news below.

Alan Murray


Airbnb IPO

Airbnb will reportedly boost the proposed price range for its initial public offering, taking it from $44-$50 per share to $56-$60. Doordash is apparently also aiming high, suggesting the IPO market could end the year strongly. Fortune

Brexit crunch

After countless it's-crunch-time moments in the negotiations over the U.K. and EU's post-Brexit trading relationship, it's…crunch time! No, really. The EU's remaining member states are holding their last big meeting of the year later this week, and that will be the last, final, ultimate chance for them to approve any deal. So we should find out today or maybe tomorrow whether there's a deal or not. Chances are high that the talks will end in failure, and sterling is slipping accordingly. Bloomberg

Nord Stream 2

The much-delayed final few kilometers of the Nord Stream 2 Russia-to-Germany gas pipeline seem set for completion, despite the protests of the U.S. German shipping authorities have warned vessels to avoid the relevant area for the rest of the month, and Russia's pipe-laying ships are moving into the area. The Local

Taxing the rich

Argentina will institute a one-off "millionaire's tax" to pay for the country's pandemic response. The tax will affect around 12,000 Argentinians who are worth over $2.5 million, and who will pay a progressive rate of up to 3.5% on their wealth inside the country, and up to 5.25% on their assets outside its borders. BBC


WFH hopes

Nearly three in 10 workers would never or rarely want to return to the office after the pandemic, according to Fortune Analytics' parsing of raw data gathered by Future Forum by Slack. So expect a mixed approach by employers. Fortune

Australian wine

Fortune's Eamon Barrett takes a look at how Australian wine got caught in the middle of a wider trade dispute between the country and China, the biggest customer for Aussie wine growers. Treasury Wine Estates, owner of some big wine brands, "hopes it can stay in the market by sourcing grapes from different countries to skirt China’s tariffs and by potentially exporting more bulk wine, which is cheaper and stored in shipping containers, rather than a premium product packaged in bottles. Australian bulk wine isn't subject to the new tariffs." Fortune

Exxon pressure

Exxon has a new activist investor that wants it to reinvent itself as a greener business more quickly. Engine No. 1 LLC, which has the support of Calstrs and may find some sympathy among other investors, will tell the board to focus on clean-energy investments and cut costs elsewhere to preserve its dividend. Wall Street Journal

CEO priorities

Rubin Ritter, the co-CEO of Zalando—Europe's biggest online fashion retailer—will step down early to give greater priority to his wife's professional ambitions. Zalando chair Cristina Stenbeck: "While the Supervisory Board clearly regrets Rubin’s decision, we have the highest respect for the underlying personal motivation." The company, in accordance with Ritter's wishes, is not saying who his wife is or what her professional ambitions entail. CNBC

This edition of CEO Daily was edited by David Meyer.

This is the web version of CEO Daily, a newsletter of must-read insights from Fortune CEO Alan Murray. Sign up to get it delivered free to your inbox.

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