Recognizing fundamental changes in the nature of capitalism

Good morning.

The three great business trends of our time—1) technology-driven transformation, 2) reinvention of office work, and 3) increased attention to social and environmental goals—are all closely related. Those who criticize the third as some sort of misguided political appeasement (read this piece in Saturday’s Wall Street Journal for the latest example) miss the connection between the three.

So let’s clarify. The source of business value in the 20th century was access to capital, access to natural resources, investment in infrastructure—plants, stores, trains, telephone poles, etc. It was a physical world and controlling financial and physical capital gave you the edge.

The source of business value in the 21st century, as a result of the transformational effects of technology, is people. Capital is plentiful, physical resources have lost value, and intellectual property rules. The way to win the game today is to attract the best and the brightest talent. And in the post-pandemic world, the best and brightest are demanding flexibility around when and where they work. And they want to work for companies that they believe are doing good in the world and good for the planet. Human capital is now the scarce resource and is setting the tempo for the dance.

That’s why these trends aren’t going away. They aren’t momentary fads, driven by post-pandemic restlessness or a wave of “woke” CEOs.  They are fundamental changes in the nature of capitalism. Expect more ahead.

And by the way, while many CEOs are wrestling with how to get their knowledge workers back to the office, that’s not the big issue for Vivek Sankaran, CEO of grocery giant Albertsons, which also owns Safeway, Vons, Acme, and more. Most of Sankaran’s workers never went home during the pandemic and had to adjust to meet the needs of a locked-down public. “The Albertsons coming out of the pandemic,” says Sankaran, “is significantly stronger than the Albertsons going into the pandemic. No question about it.” Sankaran joined Ellen McGirt and me for this week’s episode of Leadership Next, which you can listen to on Apple or Spotify.

More news below.

Alan Murray


Delta trouble

The Delta variant is stymying reopening plans around the world: Australia is on high alert, with outbreaks showing the limits of its "COVID zero" closed-borders strategy (not a substitute for vaccinations, as it turns out) and South Africa has also reinstated stronger lockdown measures for the next couple weeks. Israel is also reintroducing mask mandates. Fortune

Binance ban

The U.K.'s financial regulator has blocked Binance Markets, a London-based affiliate of the main operation, from the country. This is a separate legal entity from, but the Financial Conduct Authority said the crypto exchange needs to put a notice of the ban on its main website and apps. Fortune

Tesla time 1

Tesla's Chinese aspirations just took a major blow, after the government there ordered a safety recall of almost all Tesla cars sold in China. The State Administration for Market Regulation said an autopilot issue, which may cause crashes due to sudden acceleration, needed fixing. It's a software fix, and Tesla will do it for free. Fortune

Tesla time 2

Tesla CEO Elon Musk claimed the company's Model S Plaid flagship sedan has the fastest sprint time of any series-production car on record. Not so fast, say the Germans: the Porsche Taycan still holds the official speed record on Nürburgring's Nordschleife circuit. Fortune


Biden U-turn

President Joe Biden now says he would sign the $1 trillion-ish bipartisan infrastructure bill even if it doesn't arrive on his desk alongside a separate bill that includes Democratic spending priorities (in this case, non-physical infrastructure such as education). Biden appeared threatened to veto the bipartisan bill last week, if Republicans sink his Families Plan, but now says he "created the impression that I was issuing a veto threat on the very plan I had just agreed to, which was certainly not my intent." Washington Post

Brexit reflection

A survey by the U.K.'s Institute of Directors suggests Brexit really did hit British industry hard. Nearly a third of companies that trade with the EU have less business now, and 17% of those that traded with the EU have now stopped doing so. Small businesses, which are less equipped to deal with Brexit's red tape, have been particularly badly affected. Financial Times

Luxury jump

Marco Gobbetti has quit as Burberry chief, and is off to become CEO of luxury goods brand Ferragamo. Gobbetti pushed the British fashion firm more upmarket; now he wants to return to Italy. The hunt for a new Burberry boss is on. Reuters

Africrypt mystery

South African brothers Raees and Ameer Cajee have (via their lawyer) denied any involvement in a "heist", despite complaints that their Bitcoin investment firm, Africrypt, "absconded" with customers' cryptocurrency worth around $3.6 billion. Ameer Cajee told customers in April that the company had stopped operations because "our system, client accounts, client wallets and nodes were all compromised", and advised them that pursuing the "legal route" may "delay the recovery process." Lawyer John Oosthuizen: "They maintain that it was a hack, and they were fleeced of these assets." BBC

This edition of CEO Daily was edited by David Meyer.

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