Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg
Speaker 1: Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio.
Speaker 2: One of our guests, the Dean Dean Mao, came in
Speaker 2: here and asked how long we'd been co hosting together.
Speaker 3: This is a sad story, and it's fun.
Speaker 2: You laugh because it's always good to laugh.
Speaker 3: Yeah, otherwise you cry.
Speaker 2: And the reason you're laughing is because we have a
Speaker 2: long history of doing other show. You're filling in for
Speaker 2: Carol now, but we have a history of doing other shows,
Speaker 2: other shows that have been canceled.
Speaker 3: We used to have a daily streaming show, Quick Take
Speaker 3: Stock Rest in Peace. Then we had a crypto show
Speaker 3: to We had a crypto show, a weekly crypto show.
Speaker 3: What a blaze of glory?
Speaker 2: Uh Crypto I RL.
Speaker 4: Yeah.
Speaker 2: Yeah, it was a great show.
Speaker 3: It was a great show. What a weird time though,
Speaker 3: to have a crypto show. We had it. Of course,
Speaker 3: one of the events that happened was FTS collapsed, so
Speaker 3: that was interesting to cover in real time.
Speaker 2: It was the crypto winter.
Speaker 3: Yeah, well it was the start of it, the start
Speaker 3: of it. Yeah, for a while it was the crypto summer,
Speaker 3: it was like Crypto on the Sun.
Speaker 2: Well, that's kind of a perfect segue to get to
Speaker 2: our next guest. Adam Sullivan is the CEO of Core Scientific.
Speaker 2: The ticker is CORZ. And the reason why I say
Speaker 2: that's the perfect segue is because this is a company
Speaker 2: that's intimately familiar with the ups and downs of the
Speaker 2: industry at once. For once, it was the at one
Speaker 2: point it was the largest public bitcoin mining company by
Speaker 2: computing power, but it went bankrupt back in December of
Speaker 2: twenty twenty two. It's now emerged from bankruptcy. It's back
Speaker 2: listed publicly again, but the company's going for something a
Speaker 2: little different right now. Adam, welcome to Bloomberg Business Week.
Speaker 2: How are you very well?
Speaker 5: Thank you for having me on.
Speaker 2: You still are doing bitcoin mining, but you're looking more
Speaker 2: at the computing power to do other stuff right now.
Speaker 5: You're absolutely right. So we're a digital infrastructure company at heart.
Speaker 5: We've developed eight hundred megawats of infrastructure that allowed us
Speaker 5: to be the largest bitcoin mining company for the past
Speaker 5: three years, and now we're utilizing that infrastructure to be
Speaker 5: one of the largest data center companies in North America.
Speaker 2: Talk to us about the bankruptcy process and sort of
Speaker 2: what you were able to do with the fresh start.
Speaker 5: It was a pretty tumultuous process, right, you know. I
Speaker 5: came into the company about four months into the bankruptcy process,
Speaker 5: and there was a big fight over the valuation of
Speaker 5: the company because bitcoin is volatile. Bitcoin mining reterms of volatile.
Speaker 5: So the valuation of the company that you have to
Speaker 5: set four months before you come out of the bankruptcy
Speaker 5: process is challenging. And so we came out with a
Speaker 5: very unique capital structure that we've now solved for We
Speaker 5: saw for it last August or this previous month, and
Speaker 5: we've been able to clean up all of the litigation,
Speaker 5: all of our balance sheet, and put ourselves in a
Speaker 5: really strong position to execute on the h or the
Speaker 5: high performance computing play that we have in front of us.
Speaker 3: Now, can we talk a little bit more about bitcoin
Speaker 3: mining and data centers because not to quote Harry Styles again,
Speaker 3: but it is a real sign of the times here,
Speaker 3: and it's interesting. It sort of feels like how Facebook
Speaker 3: became Meta, but now they're really in an AI company
Speaker 3: and Meta is sort of an afterthought. I mean, how
Speaker 3: do you identify as a business? Are you a bitcoin minor.
Speaker 3: Is that how you introduce yourself or do you introduce
Speaker 3: yourself first? With the data centers.
Speaker 5: We're a digital infrastructure company, and so what we develop
Speaker 5: is very application specific data centers. We've been developing them
Speaker 5: for bitcoin mining facilities for the past seven years, and
Speaker 5: now we're developing them now for specifically for high performance computing,
Speaker 5: for artificial intelligence.
Speaker 2: Why make that change.
Speaker 5: Well, artificial intelligence and high performance computing provides us with long,
Speaker 5: steady contracts with large counterparties. So we just signed twelve
Speaker 5: year contracts that total more than six point seven billion
Speaker 5: dollars in revenue over the next twelve years. So it
Speaker 5: really takes away the volatility and provides us the opportunity
Speaker 5: to make countercyclical investments into bitcoin mining.
Speaker 2: How much of your revenue now comes from bitcoin mining?
Speaker 5: Nearly all of it does today, And so.
Speaker 2: Even though you signed these contracts, this contract.
Speaker 5: These contracts are for delivering twenty twenty five and twenty
Speaker 5: twenty six.
Speaker 2: So what's the ultimate goal in terms of portion of
Speaker 2: revenue from bitcoin mining versus high performance computing. Yeah, so
Speaker 2: if you can have that distinction.
Speaker 5: Yeah, Well, we'll be developing these sites over the course
Speaker 5: of twenty twenty five, in twenty twenty six, So as
Speaker 5: we look forward to twenty twenty five, it's going to
Speaker 5: be you know, a lot of high performance computing revenue,
Speaker 5: but as we look at twenty twenty six twenty twenty seven,
Speaker 5: it's going to be much more heavily weighted towards the
Speaker 5: traditional data center revenue.
Speaker 3: I want to talk a little bit more about the
Speaker 3: mining piece in particular. Remind me when of the last
Speaker 3: having was.
Speaker 5: It was in April this year.
Speaker 3: It was an April of this year. That feels like
Speaker 3: a year ago, so it was an April on this year.
Speaker 3: I mean, how do you handle the having as a miner?
Speaker 3: Of course, for those listening who aren't super acquainted with
Speaker 3: the language, of course, the having is basically when you
Speaker 3: have to solve a lot of you know, puzzles and
Speaker 3: computer problems, and then you get bitcoin as a reward
Speaker 3: as a minor, and then that reward is cut in
Speaker 3: half every four years. So I mean, how does that
Speaker 3: actually impact your business? We talk about it all the
Speaker 3: times in terms of the price impact, but from a
Speaker 3: revenue standpoint, how do you handle that?
Speaker 5: Yeah, So the expectation is that when blockerard gets cut
Speaker 5: in half difficulty drops or how hard it is to
Speaker 5: find a block in this previous having difficulty did not
Speaker 5: really fall off, and so mining revenue did get cut
Speaker 5: almost nearly in half in April in a single day.
Speaker 5: And so what we saw over Q two was much
Speaker 5: more challenged mining economics, and we handle it a little
Speaker 5: bit differently than other companies. Because we developed our own
Speaker 5: software stack, we're able to have much more flexible energy
Speaker 5: contracts with our end providers, and so that provide us
Speaker 5: an opportunity to actually have our costs only increase sixty
Speaker 5: percent post having, whereas what you saw in the broader
Speaker 5: market generally speaking about one hundred percent increase in cost
Speaker 5: of mind, that's.
Speaker 3: Really interesting, and I mean bitcoin, it's the actual price
Speaker 3: itself has been interesting, and that it's been really boring.
Speaker 3: I feel like we've been hovering around sixty thousand dollars
Speaker 3: since basically the end of February's the.
Speaker 2: Current the ETA after the ETA.
Speaker 3: Yeah, we got the ETFs and then we go up,
Speaker 3: we go down, but really we're in the neighborhood of
Speaker 3: sixty thousand dollars. What is the current break even level
Speaker 3: when it comes to bitcoin price?
Speaker 5: Yeah, so for us we announced in Q two our
Speaker 5: break even bitcoin price was about twenty nine thousand dollars.
Speaker 3: So you're having a great time.
Speaker 2: Yeah, So we're still as long as the price is
Speaker 2: above twenty nine thousand, right.
Speaker 5: Well, the expectation is if bitcoin price fell, you'd see
Speaker 5: difficulty come off the network or network hash rate drop,
Speaker 5: and so you expect the break even price to then
Speaker 5: drop in tandem with that.
Speaker 2: I'm wondering about the infrastructure that you own and how
Speaker 2: easy it is to switch that from bitcoin mining to
Speaker 2: high performance computing. Is it impossible?
Speaker 5: No, but it's not easy. It takes a very talented team.
Speaker 5: So much of our team comes from the traditional data
Speaker 5: center industry, and so the way our facilities were originally
Speaker 5: constructed was with the idea in mind that we're going
Speaker 5: to be a we're going to be able to some
Speaker 5: of these facilities to traditional data centers in the future.
Speaker 5: So our facilities look much more like powered shells with
Speaker 5: the opportunity to convert it based on the end specifications
Speaker 5: of the user.
Speaker 2: You mentioned flexibility when it comes to power costs. This
Speaker 2: is a huge determinant and how profitable a bitcoin minor
Speaker 2: is because it is the main determinant. Yep, what do
Speaker 2: you do for power?
Speaker 5: We're entirely on grid, but we participate in multiple different
Speaker 5: load programs that provide you know that it gives us
Speaker 5: downtime of about one two three percent depending on the
Speaker 5: depending on the time of year, but it's a significant
Speaker 5: reduction in power costs.
Speaker 4: What are the.
Speaker 3: Politics there, Because I remember with a lot of the
Speaker 3: bitcoin miners, something that we explored in cryptoiurl Rest and
Speaker 3: Peace was of course that the miners came under a
Speaker 3: lot of fire for the electricity usage. It feels like
Speaker 3: data centers haven't quite experienced that same criticism, probably because
Speaker 3: I feel like as a society we're all interested and
Speaker 3: excited about the possibilities of AI. What are your thoughts there, Yeah, I.
Speaker 5: Think both data centers and bitcoin miners have been underfire.
Speaker 5: Data centers were under fire prior to the bitcoin miners
Speaker 5: being an underfire, but I think where we sit today
Speaker 5: is a lot more states and a lot more regulatory
Speaker 5: bodies that are starting to understand the benefits of bitcoin mining,
Speaker 5: and so it's actually provided a big opening for utilities
Speaker 5: because utilities have to count data center demand against peak demand,
Speaker 5: but bitcoin miners do not kind of against that peak demand.
Speaker 2: We only have thirty seconds left. But make the case
Speaker 2: for the benefits. People might be listening say, wait a second,
Speaker 2: that benefits of bitcoin mining, like, I don't care about
Speaker 2: an I don't see any benefits. What are the benefits.
Speaker 5: The benefits allow new generation to come online even if
Speaker 5: it's not economic to run one hundred percent of the time.
Speaker 5: Bitcoin miners can take that base load, so that in
Speaker 5: the five to ten percent or twenty percent of when
Speaker 5: that power is actually needed, that can be supplied back
Speaker 5: to the grid. Well, the bitcoin miners are paying for
Speaker 5: the power the rest of the time.
Speaker 2: Adam, good to see you. Good to see you, Thanks
Speaker 2: for joining us on Bloomberg Business Week. Adam Sullivan is
Speaker 2: CEO of Core Scientific cor Z is the ticker. He's
Speaker 2: here in the Bloomberg Interactive Broker's studio. Well, our next
Speaker 2: guest spent more than thirty years at AT and T.
Speaker 2: She ultimately rose to become the CEO of AT and
Speaker 2: T Business. She was the first woman and first woman
Speaker 2: of color CEO in the company's history. Now she's on
Speaker 2: the boards of three m CSX and Franklin Covey. She's
Speaker 2: a senior Fellow and abject professor at Northwestern's Kellogg School
Speaker 2: of Management. Oh, and she's got a brand new book out.
Speaker 2: It's called Lead Bigger, The Transformative Power of Inclusion. Please
Speaker 2: to have with us An Chow here in our Bloomberg
Speaker 2: Interactive Brokers studio and how are you welcome?
Speaker 4: Thank you so much, Tim, it's great to be here
Speaker 4: with you.
Speaker 2: Hey, we got a great big chunk of time, so
Speaker 2: we're going to get to the book in a few minutes.
Speaker 2: But we'd be remiss, after more than thirty years in
Speaker 2: the telecom business if we didn't talk a little bit
Speaker 2: about what's going on out there, because it's kind of
Speaker 2: wild with the news that you have. Verizon last week
Speaker 2: announcing a deal for Frontier sort of getting more into
Speaker 2: the broadband space. This deal was a little prizing to
Speaker 2: me because I thought wireless was really the future that
Speaker 2: these companies are going for. Fiber is so expensive to install,
Speaker 2: to maintain, to get a tech out there to help
Speaker 2: you hook it up to your home. What's going on
Speaker 2: out there?
Speaker 4: Yeah?
Speaker 6: So, Tim, as you know, I've been out of the
Speaker 6: industry for a couple of years, a.
Speaker 2: Couple of years, but I'm sure you still follow it
Speaker 2: a little bit right.
Speaker 6: A little bit, a little bit, But what I would
Speaker 6: say is that, you know, convergence is really where it's at.
Speaker 6: You know, as you think about the wireless network and
Speaker 6: wireless capabilities.
Speaker 4: Yes, I mean.
Speaker 6: That's that's that's critical to the functioning of society, But
Speaker 6: ultimately it all comes down to a fiber network, comes
Speaker 6: down to a wired network as part.
Speaker 4: Of that infrastructure.
Speaker 6: So that's uh, you know, that's what I think. You
Speaker 6: know we're seeing out there is that coming together and
Speaker 6: you know, I'd love an opportunity to talk about this
Speaker 6: leadership in general and you know, inclusion.
Speaker 2: Oh yeah, well, well well we're gonna we got a
Speaker 2: lot of time, we're gonna we're gonna get to that.
Speaker 2: But but but I just thought I thought that with
Speaker 2: with how expensive fiber is and with the advanced that
Speaker 2: we've made in wireless, moving forward, we'd see more wireless
Speaker 2: nodes than you know, people digging fiber. Are you saying
Speaker 2: that we're still going to be having fiber coming into
Speaker 2: homes and businesses and not going to be going wireless?
Speaker 4: Now what I'm saying.
Speaker 6: What I'm saying is that the way that networks will
Speaker 6: continue to evolve as they always have will be based
Speaker 6: on the latest technologies, right, and the demands of the marketplace. Right.
Speaker 4: Certainly, with the needs for.
Speaker 6: Storage and the high capacity computing and the emergence of AI,
Speaker 6: there will always be a need for networks and a
Speaker 6: high capacity, high powered, you know, fast networks.
Speaker 4: And so all I'm saying is that as the technology.
Speaker 6: Evolves, that's where it will be, right And ultimately, if
Speaker 6: you look at any network, right, a mobile network, it
Speaker 6: includes stuff in the ground, it includes wired capabilities. That's
Speaker 6: all I'm saying. And I'm sure you could have plenty
Speaker 6: of other experts who could talk about costs in a
Speaker 6: much more specific way than I could.
Speaker 3: Well, I am curious to talk a little bit more
Speaker 3: about AI. AI is in every conversation. We talk about
Speaker 3: it all the time, How it relates to different industries.
Speaker 3: Of course, mostly you know, we talk about it in
Speaker 3: terms of the chip makers and sort of the picks
Speaker 3: and shovels right now, maybe a little bit with the
Speaker 3: iPhone given what we heard yesterday, how do you think
Speaker 3: it'll affect AT and T in the industry of course
Speaker 3: that they sit in.
Speaker 4: Yeah, so, Katie, I wouldn't say that I'm the expert.
Speaker 3: Right, right, just broadus strokes.
Speaker 6: Yeah, so I mean I can talk about what I
Speaker 6: think ABOUTI and how it will impact.
Speaker 4: The need to be even more inclusive if you will, right.
Speaker 6: And so what AI does, It helps us and gives
Speaker 6: us as you know, as humans, as leaders, the opportunity
Speaker 6: to actually advance our human skills, right, which means that
Speaker 6: because AI will help us with more basic computing tasks,
Speaker 6: help elevate our intelligence, no pun intended, pun intended, we
Speaker 6: as leaders have now got to figure out what are
Speaker 6: the kinds of skill sets we need to develop in
Speaker 6: our people, what kind of talent we need to complement
Speaker 6: and utilize those tools that are now just simply emerging
Speaker 6: across every industry and every business In a way, so
Speaker 6: the actual calling for bigger leadership is more important now
Speaker 6: today than it has ever been.
Speaker 1: Mm hmm.
Speaker 2: Do you think about I'm just thinking about, like how
Speaker 2: many things around our home we plug in and charge
Speaker 2: and are connected to the network. Is is that do
Speaker 2: we see you talk about convergence? Do we see more
Speaker 2: and more individual items connected to the network? The Apple Watch?
Speaker 2: For example, you're in a garment, but I'm pointing because
Speaker 2: you do have a somewhat of a smart Watch. But
Speaker 2: that's not that's not connected to the network, that's like
Speaker 2: connected to your phone, right, Yeah, yeah, you can get
Speaker 2: the Apple Watch connected to the network. You're you know,
Speaker 2: you're paying more for for each each additional advice device
Speaker 2: that you add on. Or are we going to see
Speaker 2: a convergence within within hardware and we're going to see
Speaker 2: fewer devices but doing more.
Speaker 4: Yeah.
Speaker 6: Again I'm not a hardware expert, but what I do
Speaker 6: believe will happen is right, there is more And this
Speaker 6: is really what AI and computing is all about.
Speaker 4: It's about the data. It's about the intelligence. Right.
Speaker 6: So, as we see a more need for data, whether
Speaker 6: that's in how healthcare evolves, right, so the watch, fitness
Speaker 6: and health, health monitoring, or in other aspects of you know,
Speaker 6: monitoring your water levels or your utilities. These are all
Speaker 6: things where if more data is more helpful to us
Speaker 6: as a society, that innovation will occur. Right. There will
Speaker 6: be more connected things and that will help generate you know,
Speaker 6: more need for data, more need for computing, and more
Speaker 6: need for connectivity.
Speaker 2: Okay, so how how do you make sense of all
Speaker 2: this data that is out there?
Speaker 4: It makes sense?
Speaker 2: Yeah, I mean how does a company make sense of
Speaker 2: all this data? How does a leader make sense of
Speaker 2: all this data? Because if you think about everything that's
Speaker 2: monitored today, you have so many inputs. I mean, you
Speaker 2: could probably as the CEO of a company, have an
Speaker 2: understanding of when people are badging in, when people are
Speaker 2: badging out, when they're more engaged, when they're not engaged.
Speaker 2: A lot of this has to do with how you
Speaker 2: create a workforce that is aligned with what you want
Speaker 2: to accomplish.
Speaker 6: Yeah, absolutely, right, right, And so the first the first
Speaker 6: part of biger leadership of inclusive leadership. And let me
Speaker 6: first say what if what is inclusive leadership? It is
Speaker 6: simply and leading bigger is simply about widening your person
Speaker 6: to have greater performance and impact. That's all that is, right.
Speaker 6: But the part of that widening of your perspective is
Speaker 6: being able to handle and process even yourself as a human,
Speaker 6: more data sources, right, surround yourself with more different people,
Speaker 6: surround yourself with more different data sources, different different media
Speaker 6: and otherwise, and that will be absolutely key as relates
Speaker 6: to how to lead forward and you know, get ahead
Speaker 6: of you know where you need to go.
Speaker 2: Speaking of getting where you need to go, I'm always
Speaker 2: so interested in people who spend almost their entire careers
Speaker 2: at a single company, especially. I brought this up yesterday,
Speaker 2: we did.
Speaker 3: Yeah, we were speaking, of course, the former CEO of Dow.
Speaker 2: Yeah, and he spent more. He spent thirty two years,
Speaker 2: just like you did at DOO. But it's so hard
Speaker 2: to find somebody early on in their career, except for Katie,
Speaker 2: who spent their entire career at a single company.
Speaker 3: Is that right, Bloomberg?
Speaker 2: Yeah, yeah, Katie was born here.
Speaker 3: Born in this building. I don't actually leave. Okay, okay,
Speaker 3: I live here.
Speaker 4: But you had a long way to go before thirty
Speaker 4: two years.
Speaker 3: Yeah, got eight in the bath. I'm on my way.
Speaker 2: But do you think that? And you teach school, You
Speaker 2: teach business school students. So do you see that still
Speaker 2: as a typical career path for somebody or do you
Speaker 2: see them jumping around more? Yeah?
Speaker 6: So, I do actually get this question quite frequently. Or
Speaker 6: do we see the younger workforce, the emerging force, having
Speaker 6: this idea that they're going to be in a place
Speaker 6: for thirty plus years? Right?
Speaker 4: The answer is absolutely not right.
Speaker 6: I mean, I think that the pace of change today
Speaker 6: is nothing like we've ever seen it. I think that
Speaker 6: there is a desire and a transparency for what opportunity
Speaker 6: is out there in today's workforce. I happen to have
Speaker 6: two gen Z daughters, so I spent yeah, yeah, I do.
Speaker 6: I do and spend plenty of time with gen zers.
Speaker 7: Right.
Speaker 6: And what I'm so excited about, so hopeful about, is
Speaker 6: the fact that they are even more courageous and bold
Speaker 6: about what they want and what they don't want.
Speaker 1: Right.
Speaker 6: I know plenty of gen Zers who will only work
Speaker 6: in a work environment that's hybrid as an example, right,
Speaker 6: And that is a requirement. Do you rather not have
Speaker 6: a job than hybrid?
Speaker 1: Right?
Speaker 6: And so that is something that as a old gen
Speaker 6: x er I would have never I would have never
Speaker 6: embraced right. I would have said, Hey, my job is
Speaker 6: like my foremost thing. My job is necessary to have
Speaker 6: the life I want to live, as opposed to knowing
Speaker 6: what I wanted in my life and then having my
Speaker 6: job fit that. So I don't think it's a paradigm,
Speaker 6: Tim or Katie that long term loyalty. But what I
Speaker 6: think that puts the pressure that puts on bigger leaders
Speaker 6: is we have to we have to lead differently.
Speaker 4: We have to evolve with the times, right, you.
Speaker 6: Can't count on institutional knowledge that is indigenous over the decades.
Speaker 6: And in fact, when you think about long term planning
Speaker 6: from a strategic standpoint, you know, can we really predict
Speaker 6: what's going to happen in five years? Yeah, let alone
Speaker 6: five Right, So fundamentally the pace of everything has accelerated.
Speaker 3: I'm so glad you brought up the hybrid point because
Speaker 3: I do think that. I mean, you think about the
Speaker 3: effects of the pandemic, maybe some of the lasting changes
Speaker 3: is that hybrid structure. I mean, in my own life,
Speaker 3: I think about the time. I still spend a lot
Speaker 3: of time at the office, But I used to be here,
Speaker 3: you know, eight to six pm every single day, and
Speaker 3: I don't do that anymore.
Speaker 2: But you're still getting those hours out.
Speaker 3: Oh yeah no, But I go home and I work.
Speaker 3: I have to be here every day because you know,
Speaker 3: I'm on air. But and then a lot in my
Speaker 3: personal life, my friends, I have a lot of friends
Speaker 3: who move jobs for that hybrid flexibility. They're all millennials.
Speaker 3: But I when you think about leaders today, I always
Speaker 3: wonder is it sustainable? I mean, do you think that
Speaker 3: those gen zers will fall in line? Or do you
Speaker 3: think that, you know, leadership at big companies today will
Speaker 3: have the desire to be flexible and meet them where
Speaker 3: they are.
Speaker 6: Yeah, well, you know, the very last chapter of my
Speaker 6: book is actually called flexibility.
Speaker 3: Right there you go.
Speaker 6: I fundamentally believe that flexibility is here to stay, right,
Speaker 6: I personally cannot stand the moniker of return to the
Speaker 6: office or back to the office. Has anybody have actually
Speaker 6: found a way to go back to the past.
Speaker 2: No, I dock in back to the future.
Speaker 4: That's right. I actually with the DeLorean and a right,
Speaker 4: you can do it.
Speaker 2: That's capacity.
Speaker 6: Lost capacity can do anything. Jigga wats however possibly have?
Speaker 6: So But on that note, right, what leaders have to
Speaker 6: do now? And nobody has been taught this right, how
Speaker 6: to lead in this way. Nobody's been taught how to
Speaker 6: deal with a workforce that is geographically disperse, you know,
Speaker 6: a combination of different modalities which could change every single
Speaker 6: day who is in a work site versus.
Speaker 4: Who is not. So, in my view, flexibilities here to stay.
Speaker 6: It's here to stay because we want as leaders access
Speaker 6: to the best talent possible. We want access to as
Speaker 6: diverse a customer base as possible.
Speaker 4: We want access to.
Speaker 6: The most diverse, compelling investor base right. And as you know,
Speaker 6: as every generation emerges, every generation.
Speaker 4: Becomes more and more diverse in terms of what.
Speaker 6: Their needs are, you know, the clarity of their of
Speaker 6: their purpose. And it's incumbent upon us as leaders to
Speaker 6: figure out how to operate this way. But what I
Speaker 6: will say is that you have to now treat the
Speaker 6: office or presence with great intention. You cannot just assume
Speaker 6: that because people are present physically in the office, that
Speaker 6: they're more productive, that they're happier, that they're more engaged.
Speaker 6: And I think that's one of the fundamental differences because
Speaker 6: Katie one, who was eight to six, we were right
Speaker 6: when we were when it.
Speaker 4: Was pre COVID, we were all in the office. Engagement
Speaker 4: was a fact because that's the only way we knew
Speaker 4: how to work.
Speaker 2: Sit tight, because we're gonna do some news and then
Speaker 2: we're gonna come back more with Ann Chow. She's the
Speaker 2: author of the new book The Lead Bigger, The Transformative
Speaker 2: Power of Inclusion. She spent more than thirty years at
Speaker 2: AT and T. She's on three boards of publicly traded companies.
Speaker 2: That's next on Bloomberg BusinessWeek. I want to get right
Speaker 2: back to an Chow. She's former CEO at AT and
Speaker 2: T Business. She spent more than thirty years at the company.
Speaker 2: She ultimately rose to become the CEO. She was the
Speaker 2: first woman and first woman of color CEO in the
Speaker 2: company's history. She's on three boards of She's on boards
Speaker 2: of three publicly traded companies, and she's a senior fellow
Speaker 2: and adjunct professor at Northwestern's Calo School of Management. She's
Speaker 2: got a brand new book out. It's called Lead Bigger,
Speaker 2: The Transformative Power of Inclusion. So let's talk a little
Speaker 2: bit about that, because four years ago we'd be sitting
Speaker 2: here having a completely different conversation about inclusion, DEI, the
Speaker 2: way people identify themselves, the way people bring themselves to work.
Speaker 2: But just in the last few months, we've seen this
Speaker 2: huge shift. We got Ford coming out recently and saying,
Speaker 2: along with other companies including Harley Davidson, Lowe's Tractor Supply,
Speaker 2: Deer Brown Foreman, essentially pulling back from pledges to commit
Speaker 2: to diversity, equity and inclusion. Many of them were made
Speaker 2: in the wake of the George Floyd murder, and many
Speaker 2: of these companies have been targeted online to sort of
Speaker 2: roll back these DEI initiatives, How do you view that
Speaker 2: as a leader?
Speaker 6: So as a leader, you know, I will tell you
Speaker 6: tim that and I appreciate the question that I think
Speaker 6: DEI has largely been misunderstood.
Speaker 4: I personally don't like the acronym because it, you.
Speaker 6: Know, in some circles it means one thing, when it's
Speaker 6: actually three different things with it's diversity, equity, and inclusion.
Speaker 4: You know.
Speaker 6: My view of that is that diversity is just simply
Speaker 6: a reality of the modern world. Right, every generation that
Speaker 6: comes forward becomes more and more diverse. There are many
Speaker 6: different dimensions to diversity, you know. Equity is just about fairness,
Speaker 6: and inclusion is the topic. As to what I wrote
Speaker 6: a book, right, inclusion means wide being your perspective by
Speaker 6: including everyone that you know that is in your ecosystem,
Speaker 6: everyone to have better performance and better impact. So where
Speaker 6: I think DEI is misunderstood is that it has in
Speaker 6: some circles been now interpreted as issues of representation based
Speaker 6: on gender and race alone at the cost of everything else,
Speaker 6: which is not at all what each of those words is,
Speaker 6: nor what inclusive leadership is about, you know, and I'm
Speaker 6: sure sure that those companies you know had reasons for
Speaker 6: making the decisions they did. I'm often asked advice on
Speaker 6: this topic from leaders across different businesses, and this is
Speaker 6: the advice that I give them, which is, you have
Speaker 6: to start with understanding what the purpose of your business
Speaker 6: is as well as what your value system is. You
Speaker 6: also have to be very very clear about how performance
Speaker 6: is measured. And your stakeholders are not all stakeholders at
Speaker 6: any time are you know, are created equal And one
Speaker 6: of your jobs as a leader is to mitigate and
Speaker 6: manage risk, and so no doubt there are reasons.
Speaker 4: For why those companies made those decisions. And I think
Speaker 4: that each of us as leaders has just got to
Speaker 4: be prepared for us. We serve a set of stakeholders.
Speaker 6: That we intentionally make sure that we message and care
Speaker 6: for the other stakeholders who may be impacted in those decisions.
Speaker 2: And it's a pretty nuanced and pretty nuanced communications coming
Speaker 2: from different companies. So I want to clarify what Ford did. Recently,
Speaker 2: Jim Farley wrote in a note to employees that the
Speaker 2: external and legal environment related to political and social issues
Speaker 2: cantinues to evolve and the company no longer will speak
Speaker 2: publicly on polarizing issuesbout the day.
Speaker 3: Well to that point, I mean, this conversation that we're
Speaker 3: currently having in society around DEI and this pullback that
Speaker 3: we're seeing from certain companies, it kind of reminds me
Speaker 3: about ESG, for example. I mean, there was a whole
Speaker 3: kerfuffle over ESG a couple of years ago. And you
Speaker 3: think about these three letter acronyms. You could look at
Speaker 3: these different conversations and say, it's inevitable that these sort
Speaker 3: of conversations become politicized, and it's hard for the c
Speaker 3: suite to navigate around that. Do you think it's inevitable
Speaker 3: this politicization?
Speaker 4: Don't? I don't necessarily? Right?
Speaker 6: In my view, leadership is a choice that we all make.
Speaker 6: Leadership has no gender, it has no age, it has
Speaker 6: no color, it has no politics, that has no religion, right,
Speaker 6: And leadership is all about rallying and aligning up a
Speaker 6: group of people to go get something done, to do work.
Speaker 6: That's what it has always been. You know, I've never
Speaker 6: been a you know, sort of political kind of person.
Speaker 6: I do think that acronyms are problematic, right, I mean,
Speaker 6: certainly I come from an industry where acronyms are all
Speaker 6: over the place, and well, you know, I think we
Speaker 6: as humans also have this need to simplify oversimplify things, right,
Speaker 6: And so you know, inclusion is so much more than
Speaker 6: just representation. It's about an environment that you create to
Speaker 6: wind your perspective, to look at new data sources, to
Speaker 6: you know, surround yourself with different people, to advance your business,
Speaker 6: to innovate, to grow right, to build a contemporary workforce
Speaker 6: that will compete not.
Speaker 4: Just today but tomorrow.
Speaker 6: It's all of those things that make really just good
Speaker 6: business sense, right. And are gender and race included in
Speaker 6: that scope, Yes, but it's not just that.
Speaker 2: Do you think companies should speak out on issues that
Speaker 2: are not related to their businesses?
Speaker 4: I do not. I do not.
Speaker 6: I feel very strongly that companies and leaders need to
Speaker 6: stay focused on their purpose, on their values, and on
Speaker 6: their stakeholders right and how performance is being measured. And
Speaker 6: you know that doesn't mean that there are issues. If
Speaker 6: there are issues out there that are that are causing you,
Speaker 6: or they that they directly go against your purpose and
Speaker 6: your values, then you are in fact compelled to right
Speaker 6: because you're staying focused on that business purpose. I don't
Speaker 6: necessarily feel that leaders should feel compelled to wade into
Speaker 6: every water, you know, every step of waters. It's a
Speaker 6: very it's a very personal decision I think to do. So,
Speaker 6: you know, each one of us are faced with that.
Speaker 6: Even though on social media profiles it's always views on
Speaker 6: my own, when you're a leader of an organization, a team,
Speaker 6: a big company, your views.
Speaker 4: Are not just your own.
Speaker 2: So how do you balance that with some of the
Speaker 2: contingents issues that are important to voters? For example, like
Speaker 2: I don't know different regulations around a woman's right to
Speaker 2: choose in different states, Like how do you how do
Speaker 2: you figure that out in a presidential election?
Speaker 4: Yeah?
Speaker 6: Yeah, So what what I know I will be listening
Speaker 6: for tonight, you know, is I will be listening for
Speaker 6: bigger leadership. I will be listening for leadership that you know,
Speaker 6: focuses on individual rights but also focuses on what is
Speaker 6: right for our country as relates to policies and programs.
Speaker 6: And like I said, leadership has no politics, all right,
Speaker 6: leadership just is. I will also say that leadership is
Speaker 6: about leading all the people, not just the people who
Speaker 6: may agree with you. And I think that's what inclusive
Speaker 6: leadership is all about. So that's what I'm going to
Speaker 6: be listening for tonight.
Speaker 2: And chall former CEO of AT and T Business. She's
Speaker 2: also the author of the new book Lead Bigger, The
Speaker 2: Transformative Power of Inclusion. She joins us here in the
Speaker 2: Bloomberg Interactive Brokers studio.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenebeck on Bloomberg Radio and television.
Speaker 2: It is Bloomberg Business Week. That is Katie Grafeld in
Speaker 2: for Carol Masser. I'm Tim STANEVIEK Katie, what are you
Speaker 2: doing tonight at eight o'clock?
Speaker 3: I told you already. I'm taking magnesium. I'm taking my miltonin.
Speaker 3: I will watch a little bit of our coverage. Of course,
Speaker 3: the debate doesn't start until nine pm, but we're going
Speaker 3: to have some great coverage on Bloomberg TV and Radio.
Speaker 3: Klee Lines, Joe Matthew, David Gura. What an all star lineup?
Speaker 2: That was perfect?
Speaker 3: Thanks.
Speaker 2: It was very enthusiastic promo.
Speaker 3: Yeah, and it was the best part was that I'm
Speaker 3: being sincere.
Speaker 4: I am excited.
Speaker 2: I'm going to be watching it on the Bloomberg Business
Speaker 2: as you should. Hey. Speaking of politics, Kamala Harris proposing
Speaker 2: a tenfold increase in the small business tax deduction for
Speaker 2: startup costs. It's a new weapon in her arsenal as
Speaker 2: she vised with Donald Trump to show voters who can
Speaker 2: best assuage their anxieties about the economy. Trump, for his part,
Speaker 2: has touted lowering the corporate tax rate to fifteen percent.
Speaker 2: But what is a small business owner to do? What
Speaker 2: are they thinking? To get an understanding of how they're
Speaker 2: thinking about the election, we bring in Elizabeth Gore. She's
Speaker 2: president and CEO of the fintech platform Hello Alice. It's
Speaker 2: a fintech platform for small business owners. Elizabeth joins us
Speaker 2: from San Francisco. Elizabeth, help us understand the visibility that
Speaker 2: you have at Hello Alice into how small business owners
Speaker 2: are thinking about politics.
Speaker 7: Well, how do y'all? I'll probably take a millotone in two,
Speaker 7: so I'm with you. I get it look ed, Hello Elise.
Speaker 7: We serve one point five million small business owners with
Speaker 7: credit loans and different access to capital, and we talk
Speaker 7: to them all the time about what they're thinking, what
Speaker 7: they're worried about. And look, seventy percent of them have
Speaker 7: not decided who they're voting for, and it's based off
Speaker 7: what they're going to hear about policies around taxes, inflation, immigration. However,
Speaker 7: ninety five percent of them have said they are going
Speaker 7: to vote, and that is indicative of previous elections. Small
Speaker 7: business owners have a high propensity of voting. So this
Speaker 7: is a population that both candidates need to pay attention to.
Speaker 3: And it's interesting. I mean that you know, a significant
Speaker 3: portion have not yet decided who they're going to vote for,
Speaker 3: but they're definitely going to vote. I mean, that's sort
Speaker 3: of rais'es mistakes on tonight's debate. What will small business
Speaker 3: owners be looking for in terms of topics that they
Speaker 3: want to hear about from Kamala Harrison Donald Trump.
Speaker 7: Look, there are thirty three million small businesses in this country.
Speaker 7: We have five times not opening than the history of
Speaker 7: our countries. Is a really critical population. Never one thing
Speaker 7: they want to know is taxes, taxes, taxes, taxes, and
Speaker 7: remember we're not just federal we're looking at state elections,
Speaker 7: local elections as well. The next is inflation. Cost of
Speaker 7: goods matters to these companies. Finally, we think about immigration
Speaker 7: in other terms, but hiring is a massive still ordeal
Speaker 7: post COVID to small business owners. So how they feel
Speaker 7: immigration impacts that is going to be critical.
Speaker 2: Interesting do you have have you done any research on
Speaker 2: how the small business owners feel after a change at
Speaker 2: the top of the ticket.
Speaker 7: You know, it's interesting the undecided was much higher and
Speaker 7: now it's gone lower. So you know, we don't know
Speaker 7: which way that that is pushing, but it definitely was
Speaker 7: a change.
Speaker 2: So okay, so before Biden dropped out, undecided were about
Speaker 2: twenty five percent, right, And yeah, what are undecided now?
Speaker 7: So we're at thirty percent?
Speaker 3: Interesting, so things have changed.
Speaker 7: And look, here's what's really important about that is they
Speaker 7: are really listening tonight of what are those policies And
Speaker 7: you said corporate earlier. There is a big delineation between
Speaker 7: corporate and small business, So that's what they're really listening to.
Speaker 7: Those key words. The vast majority of jobs in this
Speaker 7: country are coming from businesses with less than thirty employees.
Speaker 7: So that's what I'm paying attention to and what our
Speaker 7: customers are paying attention to.
Speaker 3: Yeah, it's a really nice reminder that, I mean, small
Speaker 3: businesses are the lifeblood of this economy. And I want
Speaker 3: to go back to the point you made about immigration.
Speaker 3: Of course that a lot of small business owners will
Speaker 3: be focused on immigration, and of course we are fresh
Speaker 3: off the last month's jobs report, the August jobs report,
Speaker 3: There's been a lot of questions about the labor market.
Speaker 3: What view do you have into how small business owners
Speaker 3: are feeling about labor availability right now?
Speaker 7: Yeah, well, on one one hand, it's exciting because over
Speaker 7: seventy percent of them are hiring right now, so you know,
Speaker 7: that gets me excited that there is growth in the market.
Speaker 7: On the flip side, they are not finding the labor
Speaker 7: they need. We're still in these quote hiring wars in
Speaker 7: their own neighborhoods. And I'm talking about the folks that
Speaker 7: serve y'all every day, your coffee shops, your dry cleaners,
Speaker 7: your auto mechanics. They've got to have labor in order
Speaker 7: to do their jobs for you. So this is a
Speaker 7: major topic.
Speaker 2: You are president and CEO of a business. Have you
Speaker 2: have you decided who you're going to vote for?
Speaker 7: I have, I have, But I am always listening and
Speaker 7: pushing till the day of to make sure that both
Speaker 7: campaigns are going to understand the policies that they need
Speaker 7: to step forward.
Speaker 2: Do you feel like they're understanding the policies that effects
Speaker 2: I think they're owners.
Speaker 7: There's a difference between understanding and listening. Right There's been
Speaker 7: massive shifts at the SBA. There's been lawsuits and litigation
Speaker 7: around Squire, diversity and supply chain, and so we have
Speaker 7: a lot to do. Capital is very expensive right now
Speaker 7: for small business owners. It is not accessible to everyone
Speaker 7: who needs it. I'm a big fan of US veterans
Speaker 7: and they're having a really hard time getting credit and
Speaker 7: loans right now. So there is a lot to talk
Speaker 7: about and a lot to do.
Speaker 2: Elizabeth, really appreciate you taking the time and joining us
Speaker 2: on Bloomberg BusinessWeek. Elizabeth Gore is president and CEO of
Speaker 2: the Fintech platform for Small business Owners. Hello Alex, Hello Alice.
Speaker 2: Excuse me. She joins us from San Francisco.