The Fortune Global 500 Summit got underway in Hangzhou, China, this morning. I’m not there, for reasons of sanity—travelling to China these days involves not only a long flight, but a prison-like quarantine in a place, and with food, that’s not of your choosing. But I did conduct several virtual interviews as part of the event. The theme is building companies that last, and the three CEOs I spoke with—Cisco’s Chuck Robbins, Johnson & Johnson’s Alex Gorsky, and Accenture’s Julie Sweet—all shared their views on what that requires in today’s post-pandemic, tech-fueled business world. A sampling:
“By far the most important is creating a sense of purpose in what we’re doing at work. You know, when people feel that they are part of something bigger than themselves as individuals, that again, they’re making a difference for customers, for their colleagues, for the communities where they work and for their shareholders, I think that’s what truly builds that long-term pathway, and really enables a company to be successful over decades.”
“I predicted in March of 2020 that those who, pre-pandemic, had really invested at scale into technology and enabled digital transformation really had their competitive gap widened, literally overnight. And 18 months in, that’s exactly what we’ve seen. In fact, the gap between those who really are leaders in technology and its adoption and the culture around it [and those who aren’t] has gotten even bigger. The top 10% are performing at five times the rate of the bottom 25%. It’s a huge gap.”
“During the pandemic…every CEO, CFO around the world, every government leader got up close and personal to the technology, and they realize how powerful it is and what it can do for their organizations. So they are giving their teams the go-ahead to just keep moving…You have to fundamentally innovate faster, and you have to probably move with less information and less facts than you would normally, and you have to make decisions and adjust on the fly much more than you would have in the past…based on the speed at which things are moving.”
Also for the event, my colleague Clay Chandler—who traveled from Hong Kong and endured the quarantine—conducted a virtual interview with economist and long-time China watcher Stephen Roach, now a fellow at Yale, who tamped down fears that China Evergrande would be a problem for the Chinese economy. “The government has ample liquidity to ring-fence and backstop this failure,” he said. But he did raise concerns about the Chinese government’s recent regulatory moves, which he said risked “really putting a crimp in the dynamism that has driven the private sector as a major engine of growth.” And he raised the specter that the U.S. and China “are in the early stages of a second cold war.”
You can read more from the Hangzhou summit here. And check out this morning’s installment of our podcast Leadership Next, on Apple or Spotify, featuring map-maker Esri’s founder and CEO Jack Dangermond. “Our customers run the world,” Dangermond told us, “and they do it through maps.”
Other news below.
The Wall Street Journal reports that, around 14 years ago, then-Microsoft chairman Bill Gates was caught propositioning an employee via email—an incident that led the company's general counsel and HR chief to tell him "the behavior was inappropriate and needed to stop." The board allegedly knew about this and decided not to take action. Gates denies the claims. Wall Street Journal
In a teutonic #MeToo moment, Axel Springer—the German owner of Politico and Insider—has sacked Julian Reichelt, the editor-in-chief of Springer's influential Bild tabloid. A New York Times piece had revealed Reichelt's affair with a trainee; further allegations about abuse of his position ensued. The company said he had "failed to maintain a clear boundary between private and professional matters and was also untruthful to the Executive Board in this regard." New York Times
Japan needs a long-term chip strategy to match those of the U.S. and China if its semiconductor sector is to survive, the country's new economic security minister has warned. Takayuki Kobayashi: "The question is how we can establish areas where we excel so that the international community cannot survive without Japan." Financial Times
The EU will probably extend the relaxation of its state-aid rules "hopefully" one last time, according to Competition Commissioner Margrethe Vestager. A lot of companies still need that state aid to survive, but Vestager said that in future the EU needs to use "a little bit of taxpayers' money to incentivize private investment" in stricken sectors such as hospitality and air travel, rather than "pouring in" cash from the public purse. Financial Times
AROUND THE WATER COOLER
China's President Xi Jinping appears to be hammering home his economic and environmental reforms a little more gently at the moment, ahead of next year's Party Congress—the gathering where he's expected to secure a historic third term. Eurasia Group's Neil Thomas: "Xi has a low tolerance for outcomes that directly cause a lot of ordinary Chinese to suffer, because that would create serious risks to political stability and party legitimacy." Bloomberg
It's not just China that's "decoupling" from the U.S.—the EU is also loosening ties, according to Accenture CEO Julie Sweet, who cited the European Court of Justice's invalidation of the U.S.-EU "Privacy Shield" data-sharing agreement last year. That decision was based on the inability of American companies to protect their European customers and users' personal data from U.S. intelligence services. Fortune
How good has the pandemic been to Amazon? Pretty good, as the eight charts in this article show. Per Nicolas Rapp and Declan Harty: "Revenues all told have spiked for Amazon during the pandemic, jumping 44% in the first quarter from the same period in 2020 when COVID-19 had just begun to take hold in the U.S. Its latest revenues were up about 27% year over year. Quarterly profits, meanwhile, hit $7.8 billion in the most recently reported period, compared with $5.2 billion in the same period of 2020." Fortune
COVID bouncers are a thing these days, at weddings, concerts and other indoor events that have recently come, er, bouncing back. COVID bouncer Karen Jimenez: "I like to pride myself to be likable, but it kind of forces me to have to be very serious. You can't be friendly in that role, especially when you're just having to say no." Fortune
This edition of CEO Daily was edited by David Meyer.
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