Good morning.
A couple of business books out this morning worthy of your attention.
The first is Net Positive, by former Unilever CEO Paul Polman. Polman is the godfather of the stakeholder capitalism movement. He launched his company’s “Sustainable Living Plan” back in 2010 and faced an existential moment in 2017 when threatened with a takeover from 3G-backed Kraft Heinz, known for relentless cost-cutting to boost short term profits. Polman won the showdown, which I portrayed at the time; Kraft Heinz has struggled since. The introduction of the book is titled: “When Mayo Beat Ketchup.”
But Polman’s book is more a how to than a tell all. He is on a mission to create a new model of capitalism. He writes: “All businesses now face a profound choice: continue pursuing the shareholder-first model that forces shortsighted decisions, hurts business, and endangers our collective well being ….or build businesses that grow and prosper over the long haul by serving the world—that is, by giving more than they take.”
Polman is under no illusion that the era of shareholder capitalism has suddenly arrived, fully formed. He says that “almost no business embraces the ambition we propose here.” But he nods at a short but growing list of true believers, that in his estimation includes: Allianz, Danone, DSM, Fifco, Levi’s, L’Oreal, Marks & Spencer, Mastercard, Microsoft, Natura, Nestle, Orsted, Olam, Salesforce and Trian. The book is designed to get others on the train.
The second is a very different book—Michael Dell’s Play Nice But Win—a candid memoir from one of the most irrepressible entrepreneurs of the computer age. (I loved his telling of the story of his first entrepreneurial effort: selling newspaper subscriptions.) Dell not only built a great business, but then had the wisdom to radically transform it from hardware and sales to software and services. In the process, he built a $50 billion fortune.
Fortune plays a pivotal role in Dell’s road to fortune. It was at our Brainstorm Tech conference in Aspen in 2012 that Dell met Silver Lake’s Egon Durban, who convinced him to take his company private, so he could do his transformation without the pressures of public company scrutiny. He came back to Brainstorm Tech in 2017 and sat down with me to describe how the company had changed. Dell was Ellen McGirt and my guest on our podcast Leadership Next this week, and we asked him why he felt he had to leave the public markets to pull off his transformation. You can hear his answer on this and more on Apple or Spotify.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Facebook outage
Facebook and all its properties—from WhatsApp and Instagram to many of the company's internal systems, door locks included—yesterday fell victim to what seems to have been the mother of all IT errors. The outage lasted nearly six hours, partly because Facebook techies had trouble gaining physical access to infrastructure they could no longer control remotely. A lot of people joined Signal and Telegram during the downtime. Fortune
Fantasia default
It's not just Evergrande anymore: Fantasia Holdings, a mid-sized Chinese developer, has just defaulted on its bonds despite recently assuring investors that it had "no liquidity issue." S&P had already downgraded Fantasia last week, noting "heightened execution risk on repayment" of the bond due Monday. Financial Times
U.S. and China
The Biden administration has urged China to live up to the terms of its trade agreement with President Trump. U.S. Trade Representative Katherine Tai on China's purchase pledges: "While commitments in certain areas have been met, and certain business interests have seen benefits, there have been shortfalls in others." She also said Beijing pours "billions of dollars into targeted industries and continues to shape its economy to the will of the state, hurting the interests of workers here in the U.S. and around the world." Financial Times
Tesla racism
A federal jury awarded Owen Diaz, a Black former Tesla worker, more than $130 million in damages over the company's failure to prevent racial harassment. The elevator operator was regularly subjected to racial epithets and exposed to racist imagery at Tesla's Fremont, Calif. factory several years ago. Fortune
AROUND THE WATER COOLER
Fuel crisis
The U.K. government's appeal for EU tanker drivers to come and help alleviate the country's fuel crisis has largely fallen on deaf ears. A mere 27 (or 127, if you believe Prime Minister Johnson) drivers have applied for the temporary work visas that were on offer. The government was hoping for 300, and that's before it tries to attract another 4,700 truck drivers to make Christmas all Christmassy. Fortune
Japanese markets
The Nikkei 225 Stock Average fell into correction territory today, as investors showed a lack of enthusiasm for new Japanese Prime Minister Fumio Kishida, and amid a general global tech sell-off—plus the Evergrande debacle over in China. European stocks have been fairly steady so far today, though. Fortune
Lumber support
Lumber prices are up for the fifth week in a row, though they're "still far below the levels reached this spring," writes Fortune's Lance Lambert. "Rebounding demand isn't coming from homebuilders alone: When lumber prices hit their bottom in August, many DIYers rushed back to lumber yards." Fortune
Ladies who launch
Fortune's Michal Lev-Ram has a great piece on women in the space industry, and how the "headline-grabbing prominence of Bezos et al. means the private space sector is at risk of repeating some of the missteps of our earlier, public sector efforts, in which the essential contributions of women were minimized or overlooked." Fortune
This edition of CEO Daily was edited by David Meyer.
This is the web version of CEO Daily, a daily newsletter of must-read insights from Fortune CEO Alan Murray. Sign up to get it delivered free to your inbox.
