Good morning.
Fortune assembled roughly 100 CEOs yesterday via Zoom for its first CEO meeting of 2022. The group focused on identifying top challenges and opportunities that businesses face in the year ahead. The top challenge was the battle for talent. The opportunity? A chance to reinvent. Some excerpts below.
On the war for talent:
“Labor, broadly speaking, and the workforce, are the biggest challenge. Getting people back to work, building trust, figuring out how we’re going to live and work in a world with remote work.”
—Stephanie Linnartz, president, Marriott
“What we’ve learned is that people move the supply chain. From warehouse workers to dock workers to loaders to drivers to pilots. We need to automate everywhere we can so we don’t have such a reliance on people. And for those activities that you can’t automate, our pay practices… and best place to work practices… are going to have to change in a big way, because there is a war on for talent.”
—Carol Tome, CEO, UPS
“These prognostications that all the innovation and the deployment of new technologies would be a big net destroyer of jobs…are proving wrong. What we are seeing is that the opposite is happening. Digital transformation is driving a ton of growth, and it is creating a need for more great people.”
—Joe Ucuzoglu, CEO, Deloitte U.S.
“Hybrid work is actually a huge opportunity to increase productivity, and to access talent geographically across the world.”
—Kristin Peck, CEO, Zoetis
“From CEOs down to truck drivers, it’s hard to get people, and that does not seem to be letting up in the year ahead.”
—Peggy Johnson, CEO, Magic Leap
On the opportunity for reinvention and transformation:
“In difficult times, there is an opportunity for reinvention. We know that’s happening in many different areas and industries.”
—Chano Fernandez, CEO, Workday
“There are so many of these conversations that went from talking about making a big shift to the cloud to actually happening or planning it during (the past two years). If anything, it probably accelerated people moving to the cloud by a few years.”
—Andy Jassy, CEO, Amazon
“Innovation can come from digitization of markets or rethinking supply chains, or from closing the say-do gap on environmental sustainability.”
—Adena Friedman, CEO, Nasdaq
“I would characterize the biggest opportunity as the opportunity to change the game and transform the way we do things, whether that’s in an area like healthcare delivery or in the move to net zero or the circular economy.”
—Jim Fitterling, CEO, Dow
“There’s an opportunity to redefine who you are and what you’re doing as a business…and even redefining who you are as a CEO.”
—Hans Vestberg, CEO, Verizon
“One of the major opportunities… is increased focus on environmental, social and governance goals, and the rapid change of technology helping to enable a lot of those goals.”
—Lynn Martin, President, New York Stock Exchange
On business actions to address climate change:
“When you look at how many big companies have a net zero commitment for 2030, 2040, and the changeover that’s going to cause in their supply chain, which is really where it starts to get out to the middle-market size companies, it is unbelievable. I think there’s a lack of appreciation for the movement in the private sector.”
—Brian Moynihan, CEO, Bank of America
“While some people were disappointed with COP26, I thought there were a lot of positives. And one was that the business community was more involved in this COP than any before… There was no discussion about whether climate change is real or not. So finally we’re all to the point, I think, that we know it’s real and we have to do something about it.”
—Vicki Hollub, CEO, Occidental Petroleum
“Environmental concerns are more and more important for consumers…More than two-thirds of them say they would change a brand or a product to buy a product that’s more sustainable. But today, probably around 10% actually do it, because at this point in time, they do not want really to pay more, and more importantly, they do not want to sacrifice anything in terms of product quality.”
—Nicolas Hieronimus, CEO, L’Oreal
“The business community is doing more than we’ve ever done before. But the gap between what is needed and what we are doing is getting bigger.”
—Paul Polman, former CEO, Unilever
On COVID in Africa:
“Our people have been incredibly responsive with very little resources. We’ve coordinated almost 2 billion vaccines now in the pipeline. And we are moving them now. So we are hopeful that this is the year we get on top of this.”
—Strive Masiyiwa, Executive Chairman, Econet; “vaccine czar” for Africa
On travel in China:
“We have seen a couple of trends in travel patterns. The first I call the three Ss. Smaller groups…shorter booking windows, and shorter stays. The second thing is, after COVID, people are paying more attention to health and family.”
—Jane Sun, CEO, Ctrip
On political and geopolitical risk:
“You’ve got potentially a war breaking out in Ukraine that’s going to affect all Europe, China-U.S. issues… Political leadership is focused domestically when you have global issues that are facing us. And you’ve got huge distrust in government… These are not great things in a world that needs global solutions.”
—Dan Schulman, CEO, PayPal
More news below. And for more detail on Fortune’s new CEO poll, conducted in partnership with Deloitte, you can go here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Intel investment
Intel is reportedly planning to invest $20 billion in a new Ohio chip plant. The White House is thrilled. Wall Street Journal
Netflix plunge
Netflix's share price dropped 20% in after-hours trading, as investors reacted to the streamer's weak forecast for subscriber growth this quarter—analysts were hoping for a shade under 7 million, but Netflix is only predicting 2.5 million. Maybe Apple and Disney really are affecting growth after all, and maybe it's part of a wider slump for stay-at-home stocks. CNBC
Peloton drama
Speaking of which, Peloton's shares closed down 24% yesterday on a report that a crash in demand was leading the company to halt production of its fitness bikes and treadmills. CEO John Foley was apoplectic: "The information the media has obtained is incomplete, out of context, and not reflective of Peloton’s strategy." He also said Peloton was "moving forward with the appropriate legal action" against the leaker of the information. Fortune
Crypto tumble
The big cryptocurrencies plunged overnight, and there are two likely reasons. One: Russia's central bank wants a ban on crypto mining and use, and Russia is a top-tier mining destination. Two: the Nasdaq is bombing, and it turns out Bitcoin isn't the uncorrelated asset its boosters claim it to be. (Bonus read: Fortune's Eamon Barrett on Twitter's attempt to protect users' NFT profile pictures.) CNBC
AROUND THE WATER COOLER
El Salvador
How's El Salvador's adoption of bitcoin as legal tender going? Take it away, Fortune's Shawn Tully: "the new Bitcoin regime upended a period of stable money and forces banks and merchants to accept a wildly volatile currency they don't want, and that can't work…dispatching funds in the virtual coins is shockingly costly—on both ends of the transaction." Fortune
DeepMind co-founder
Mustafa Suleyman has left Google to become a VC. Suleyman co-founded DeepMind, the British A.I. pioneer that Google bought seven years ago. His management style sparked complaints that cost him some responsibilities. He was also critical of the tech industry's failure to make A.I. "feel like it's happening with people, and where people have significant influence in shaping how it arrives in their world and doesn’t just happen to people." Financial Times
Microsoft and Activision
Microsoft gaming chief Phil Spencer has assured Sony and PlayStation users that the Call of Duty franchise…might still be available on their platform in future? The Xbox-maker's takeover of CoD publisher Activision Blizzard could face antitrust headwinds, which probably explains Spencer's almost-committal wording here: "Had good calls this week with leaders at Sony. I confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation. Sony is an important part of our industry, and we value our relationship." Fortune
"Stealth Omicron"
Fortune's Grady McGregor has penned a timely explainer of BA.2, the even-more-transmissible version of Omicron that is now outcompeting the original version in some places, and that might even merit its own Greek letter. Fortune
This edition of CEO Daily was edited by David Meyer.
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