Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. I'm Jason
Speaker 1: Kelly and I'm Carol Masser. Welcome to the Bloomberg Business
Speaker 1: Week Extra. It's our weekly podcast bringing you an in
Speaker 1: depth interview you'll not hear anywhere else. And we sat
Speaker 1: down with John Donahoe. He's the incoming CEO of Nike.
Speaker 1: He'll start that job in the new year. It was
Speaker 1: really great to catch up with him because to see
Speaker 1: what he said about why he took the job, what
Speaker 1: he sees in terms of the fitness industry. But what
Speaker 1: was really fun is there he is or he's been
Speaker 1: in Silicon Valley and we got to talk about some
Speaker 1: of those bigger, broader issues like the tech backlash that
Speaker 1: we're seeing his views on that. This is a guy.
Speaker 1: It's interesting his wife and you'll hear this in the conversation.
Speaker 1: She holds to keep position at Stanford. They were really
Speaker 1: partners throughout. She went to law school while he went
Speaker 1: to business school. So his perspective on this is wide ranging.
Speaker 1: A very thoughtful conversation. Check it out. We gotta start John,
Speaker 1: uh with your time at Stanford. Take us back there. Well,
Speaker 1: I was I was blessed enough to at the g
Speaker 1: SB between nineteen and it was really, I think probably
Speaker 1: the most formative experience I had that has set me
Speaker 1: up for not just my career, but to be honest,
Speaker 1: my my overall life over the last thirty years. UM.
Speaker 1: I distinctly remember many of my professors as well as
Speaker 1: my classmates, and what Stanford really really grounded me in
Speaker 1: was this notion of servant leadership. Um. It was a
Speaker 1: phrase I first heard at Stanford. It resonated with me.
Speaker 1: Ernie R. Buckle, it had been a former dean of
Speaker 1: Stanford and that's where the phrase came from. And if
Speaker 1: I were to say there's been one foundational, foundational, almost
Speaker 1: guiding principle for the last you know, thirty five years
Speaker 1: since then, it's been a real inspiration and attraction towards
Speaker 1: this notion of servant leadership. Well, and there's so many
Speaker 1: full circle elements to this, and we're going to get
Speaker 1: to them throughout the conversation, one of them being the
Speaker 1: Phil Knight. This is school. But you were the winner,
Speaker 1: I believe, of the R. Buckle Awards, so clearly whatever
Speaker 1: you learned there really took root. I mean, when you
Speaker 1: go there in the eighties, Silicon Valley is certainly developed
Speaker 1: and developing, a far cry from from where it is now.
Speaker 1: Why did you go West in the first place. Well,
Speaker 1: Stanford at the time that you know, I I went
Speaker 1: to Dartmouth College undergrad. I was fortunate enough as a
Speaker 1: senior in college to apply to a few different business schools.
Speaker 1: I was fortunate enough to get in. But I knew
Speaker 1: I wanted to go to Stanford because Stanford, as a
Speaker 1: as a senior and a senior in college rather in
Speaker 1: two it was known for teamwork. Um. It was known
Speaker 1: for working with and through others, and that was really
Speaker 1: attractive to me. I'd played sports my whole life. I
Speaker 1: loved team sports. I had not yet been in business,
Speaker 1: but I knew that a team approach was what I
Speaker 1: wanted to do, and that was a reputation Stanford had.
Speaker 1: I'd never lived in California, So I joined Baine for
Speaker 1: two years, uh the agreement that I was going to
Speaker 1: going to Stanford, and when I came out, I certainly
Speaker 1: wasn't disappointed. Well, And it's interesting, John, I mean, because
Speaker 1: both you and your wife were there at the same time.
Speaker 1: She was getting a law degree, correct, Yeah, a law
Speaker 1: and a master's in nation studies. Um uh so, yeah,
Speaker 1: joint a joint degree. What was it about those? And
Speaker 1: it was really the early years of our It was
Speaker 1: really it was sort of a quick you know, we
Speaker 1: came out there, we had we had been married, we
Speaker 1: had our first child my first term of of business school.
Speaker 1: Eileen started at Stanford Law School that next fall, and
Speaker 1: we actually lived in married students housing for five years,
Speaker 1: so the two years I was at business school and
Speaker 1: three years after and and one of the things that
Speaker 1: Stanford really embodied was this notion of family. And Stanford
Speaker 1: feels like a family inside the business school and it's
Speaker 1: not a place where there's work at home or personal
Speaker 1: and professional life, a more integrated understanding of life. I
Speaker 1: really felt like I learned at Stanford, and we were
Speaker 1: at a very formative stage of our marriage, you know
Speaker 1: what began, you know, a marriage and a set of
Speaker 1: dual careers that have intertwined for the last thirty five years.
Speaker 1: And Stanford kind of legitimized that. They they they they
Speaker 1: took a lot of classes at Stanford that were about
Speaker 1: the human side of management, about the inner journey of leadership,
Speaker 1: not just accounting and marketing and finance and so in
Speaker 1: at Stanford it was very legitimate to talk about things
Speaker 1: like the inner journey of leadership, talk about your personal
Speaker 1: and professional life, and how to build an integrative life.
Speaker 1: And so at a very young age and a very
Speaker 1: impressionable stage of my life, I feel like what I
Speaker 1: got from Stanford is those things were not only were
Speaker 1: they legitimate, they were the best way to lead a
Speaker 1: fulfilling and hopefully impactful life. It sounds like you feel
Speaker 1: like I learned that at Stanford. It sounds like you
Speaker 1: got that early on. Because it's interesting, is I feel
Speaker 1: like the conversation among leaders today we're seeing it with
Speaker 1: the Business Roundtable that you know, yep, it's great to
Speaker 1: build a strong com many, a financially sound company, but
Speaker 1: it's not just about shareholders. It's a much more holistic
Speaker 1: approach to looking at a company's impact on society at large.
Speaker 1: And it sounds like you learned that early, very much,
Speaker 1: very much. You know, Stanford embodied that. Um it was
Speaker 1: it was some of the other business schools at the time,
Speaker 1: we're almost kind of, you know, factories of certain career tracks.
Speaker 1: At Stanford, they really encouraged us to to go inside
Speaker 1: of ourselves, think about what spoke to us, what do
Speaker 1: we care deeply about to see the world in a
Speaker 1: fairly integrative ray way. They had a very strong public
Speaker 1: sector program that was integrated into the core NBA program,
Speaker 1: not a separate program. And so this notion of you know,
Speaker 1: if I think about back in that period of time,
Speaker 1: this notion of servant leadership, this notion of an integrative
Speaker 1: perspective both of life and business, society and business, and
Speaker 1: also an integrative way to understand a business. I feel
Speaker 1: like those are all things that, um, I didn't know
Speaker 1: it at the time, how how valuable it was going
Speaker 1: to be. And I probably couldn't have use those words
Speaker 1: at the time. I was just in the experience. But
Speaker 1: I feel so fortunate because I think those things have
Speaker 1: served me really really well in the last you know,
Speaker 1: the last thirty five years since then. So let's go
Speaker 1: back to the mid eighties when you come out. How
Speaker 1: does all of that inform the choices you make about
Speaker 1: the career you want to have and where you want
Speaker 1: to have it. Well, it's a it's a funny it's
Speaker 1: a funny example because I made my career choice to
Speaker 1: go back to Bain after Stanford because I was following
Speaker 1: my wife in the sense that she was still in
Speaker 1: law school. And so I said, all right, I'll go
Speaker 1: back to Bain. They paid for business school. UM. I
Speaker 1: don't know if I would have chosen to do that
Speaker 1: or not, but by saying that I valued that part
Speaker 1: of our relationship, UM, you know, allow me to go
Speaker 1: back to Bain. And I'll actually go back. One other
Speaker 1: story prior to this, and just and this just tells
Speaker 1: you about what's Stanford's like. During my first year at
Speaker 1: Stanford Business School, my wife applied to law school and
Speaker 1: she got in. And so during the beginning of my
Speaker 1: second year, which was going to be her first year
Speaker 1: Stanford Law School, we had a one year old child.
Speaker 1: I went to the dean of the Dean of Students
Speaker 1: um Student Affairs at Stanford Business School, Jerry Gould, and
Speaker 1: I said, Dean Gold, I have to take next year
Speaker 1: off or I have to work part time because we
Speaker 1: have a one year old. We can't both be in
Speaker 1: graduate school at the same time. And this is classic Stanford,
Speaker 1: she says. Dean Gold says, oh, John, note, just do this.
Speaker 1: Go ahead and start and you know, if you want
Speaker 1: to take three classes instead of four, that's fine. Maybe
Speaker 1: start with four. If you want to drop one, that's fine,
Speaker 1: and we'll be flexible. You don't have you don't have
Speaker 1: to come in with some preordained plan. So that was
Speaker 1: like that gave me go ahead. Well, what she did
Speaker 1: is she gave me permission to have an open mind
Speaker 1: and my and that said, hey, it was legitimate what
Speaker 1: my wife was doing and the fact we had a kid,
Speaker 1: as well as going to business school. As it worked out,
Speaker 1: I started that second year UM started with four classes.
Speaker 1: I thought I was going to drop one, never ended
Speaker 1: up dropping one and ended up graduating on time. But Stanford,
Speaker 1: both institutionally for the dean and just the culture gave
Speaker 1: me permission to have the fact that it was a father,
Speaker 1: the fact that I was married to someone who was
Speaker 1: a peer and had a dual career that was legitimate.
Speaker 1: And so ironically I ended up following my wife when
Speaker 1: I went to bain Um thereafter, and you know that
Speaker 1: ended up working and okay, end up staying seventeen years
Speaker 1: of bain who would have figured at that time. And
Speaker 1: so you find yourself then back in in Silicon Valley
Speaker 1: in many ways and have been there really for some
Speaker 1: of the most formative years as Silicon Valley finds its
Speaker 1: way deeper and deeper and deeper into society and culture,
Speaker 1: help us understand the connection in between Silicon Valley and Stanford,
Speaker 1: because in many ways and in many people's minds, they're inextricable.
Speaker 1: How how do we best understand that? Well? You you
Speaker 1: just said it. You just said it, well, that they
Speaker 1: are inextricable. So, for instance, I distinctly remember as a
Speaker 1: business school student, Steve Jobs came to campus and gave
Speaker 1: a speech. Uh, Andy Grove came to campus, gave a speech,
Speaker 1: and you know, to be honest, we just thought that
Speaker 1: was normal. It wasn't even it was the Stanford largely
Speaker 1: because of its location, but also because of its culture. Um.
Speaker 1: You know, had a very um poorous experience with business.
Speaker 1: Warren Buffett helped speak at one of the investment classes. Um.
Speaker 1: And so the outside world, be at Silicon Valley or
Speaker 1: the other business community kind of seamlessly flowed in and out,
Speaker 1: and you, as a student were probach enough to get
Speaker 1: to get access to at And then once I graduated,
Speaker 1: and I was part of the Silicon Valley community, first
Speaker 1: at Bain and then certainly at eBay, and now it's service.
Speaker 1: Now I'm frequently invited back to speak in a class
Speaker 1: or to do a suminar and and of course you'll
Speaker 1: always say yes, that's why I'm doing this video. Dan
Speaker 1: Levin calls me and says, and you say, you know,
Speaker 1: I am so appreciative of my time at Stanford. It's like,
Speaker 1: of course I want to give back because what Stanford
Speaker 1: gave me has been invaluable and so and I think
Speaker 1: that's particularly true, you know around Silicon Valley that Silicon
Speaker 1: Valley learns from Stanford, and Stanford learns from Silicon Valley. Well,
Speaker 1: and I think that's definitely continuing. And I think, you know,
Speaker 1: Silicon Valley so much a focus of the world at
Speaker 1: large and just big tech um, you know, whether it's
Speaker 1: by regulators, policymakers. I'm curious, having been so entrenched at
Speaker 1: several companies within Silicon Valley, what do you make of
Speaker 1: some of the scrutiny that some of the big tech players,
Speaker 1: whether it's a Google, whether it's a Facebook, um, whether
Speaker 1: it's some of the other players. Amazon in particular, what
Speaker 1: do you make of that scrutiny, Because I'm sure it's
Speaker 1: you know, it's certainly being pulled into the teachings at Stanford. Well, absolutely,
Speaker 1: and here's what here's the to go back to my
Speaker 1: initial team, here's the army my wife today. My wife
Speaker 1: went on and had a career in law. She was
Speaker 1: an ambassador to Human Rights Concil under President Obama. She
Speaker 1: now has a co director of a center at Stanford
Speaker 1: in the Freeman Spoggling Institute around digital governance and the
Speaker 1: impact on democracy and on human rights, so very much
Speaker 1: along these issues of the second order consequences and second
Speaker 1: order of issues of technology today, around privacy, around security,
Speaker 1: around things like fake news, and the impact I can
Speaker 1: have on elections. And so I can happily say, like
Speaker 1: most things in my marriage, my wife is the authority
Speaker 1: on these particular topics. Well, well, Jason and I are
Speaker 1: just writing that we're going to have her on because
Speaker 1: she sounds impressive. Trust me, your ratings will be much
Speaker 1: higher when she's on then when I'm on, because she's
Speaker 1: the brains of the family. But this is here's the point.
Speaker 1: Stanford wants to be the place that's convening dialogue about
Speaker 1: these topics. Stanford is the place that a Google or
Speaker 1: a Facebook, or Twitter or an Apple will come with
Speaker 1: an open mind and trusting that they'll be honest dialogue.
Speaker 1: And then Stanford's a place that that government, current government
Speaker 1: officials and then former government officials like my wife. Um,
Speaker 1: you know, whether it was Condi Rice, whether it's George Schultz,
Speaker 1: Bill Perry, a long history of of embracing both producing
Speaker 1: government policymakers and officials and then while giving them back.
Speaker 1: And then of course the faculty bringing research, and then
Speaker 1: and then civil society and so both what in this
Speaker 1: case my wife's particular center, it's just emblematical what Stanford
Speaker 1: does so well. And business school brings Silicon Valley and
Speaker 1: business and actuld tmia together and in this case in
Speaker 1: the public policy arena, Stanford is one of the few
Speaker 1: places in the world where all the various stakeholders and
Speaker 1: what is this somewhat emotional debate right now and somewhat
Speaker 1: polarizing debate, they can come and have honest dialogue with
Speaker 1: one another in a confident that Stanford will create an
Speaker 1: environment of of civility and respect to have that that
Speaker 1: sort of truth seeking dialogue. And and that's true about
Speaker 1: the university in addition to the Business School in this
Speaker 1: case is being done or more in the university, but
Speaker 1: it is just part of what is in that you know,
Speaker 1: that secret sauce that is Stanford John. Just quick follow
Speaker 1: up though, but if you were at that center, you
Speaker 1: were pulled into a class and the and the students
Speaker 1: they were saying, Hey, John, what do you think about
Speaker 1: the tech lash that's going on? Should big tech be
Speaker 1: broken up? What would you say? Well, I think I
Speaker 1: think tech is fundamentally the impact technology has had on
Speaker 1: the lives of almost every individual in the world old
Speaker 1: and by and large in society has been positive. Technology
Speaker 1: has brought transparency, Technologies brought opportunity. Technology has brought prosperity
Speaker 1: in general. But there are second order consequences and second
Speaker 1: order consequences we haven't yet faced in the world. So,
Speaker 1: for instance, we have a legal system that's very clear
Speaker 1: in the physical world, right if if law enforcement has
Speaker 1: a concern, they can go to a judge that they
Speaker 1: can get a subpoena, that there's clear rules and what
Speaker 1: a subpoena can do. If subpoena comes to a company,
Speaker 1: you know what you need to do of subpoena. That
Speaker 1: hasn't happened yet in the digital world. So now we
Speaker 1: don't really have it. We don't really have a government system.
Speaker 1: And we saw that in the debate between um, you know,
Speaker 1: the FBI and Apple a few years ago. UM. And
Speaker 1: so that needs to be thought through. And it's it.
Speaker 1: You know, we talked about innovation of products, that's innovation
Speaker 1: of governance. That it's the first time we're facing this,
Speaker 1: and there are second order consequences that need to be
Speaker 1: thought through. Similarly, technology is brought fundamentally good. It's connected
Speaker 1: the world together. But something like fake news, well that's
Speaker 1: come out of kind of come out of left field.
Speaker 1: And I can tell you no one in Silicon valuing
Speaker 1: technology five years ago or eight years ago was thinking
Speaker 1: about fake news. No one imagine, Oh my goodness, that's
Speaker 1: how this platform can be used. Now we have to
Speaker 1: confront it. Now, we have to think through it. I
Speaker 1: was having a I was having a drink last night
Speaker 1: with a Mead Kordistani, who's the executive chair of Twitter.
Speaker 1: And you saw you know, Twitter, Jack Dorsey and and
Speaker 1: Twitter scidy too to ban all political advertising. Okay, that
Speaker 1: may or may not be the right answer, but it's
Speaker 1: calm after they were thinking about it and trying to
Speaker 1: get honest dialogue and We're in an environment where you're
Speaker 1: dan if you do, dan if you don't. And that's
Speaker 1: just part of life that when when any time you're
Speaker 1: in the hot seat about something and they're differing perspectives,
Speaker 1: honest people can have, UM, then you know it's hard.
Speaker 1: My perspective is this, it's it's relatively simple. As kind
Speaker 1: of a gray haired guy in Silicon Valley, I guess
Speaker 1: soon to be moving to Portland. Um. The important part
Speaker 1: is we engage in honest dialogue. We don't duck the issues.
Speaker 1: It's not that that technology was good and now is bad.
Speaker 1: That's not at all. The reality is technologies had a
Speaker 1: profound impact on the world. That is net net net
Speaker 1: fundamentally positive. I deeply believe that. But it's also true
Speaker 1: that there are second order consequences and issues that are
Speaker 1: very real and we have to be able to acknowledge
Speaker 1: those and then engage in what is often messy dialogue
Speaker 1: where reasonable people can have different perspectives and see if
Speaker 1: we can get civil dialogue around or right. What are
Speaker 1: the issues? What are the remedies or policies or frameworks
Speaker 1: that can help us, uh, you know, begin to address
Speaker 1: some of these issues. And it's going to take time.
Speaker 1: These are not simple issues, and so what doesn't work
Speaker 1: is the Polo titians labeling tech is the bad guys.
Speaker 1: I don't buy that. In the same way you can't
Speaker 1: be tech companies and stay government's bad regulations bad. I
Speaker 1: don't buy that either, and he is. This is gonna
Speaker 1: be the hard work of dialogue. And so, as you mentioned,
Speaker 1: Silicon Valley will continue to wrestle with this, and you
Speaker 1: certainly will be a part of this. You're gonna keep
Speaker 1: your board seat at Service now. I think I believe
Speaker 1: through the end of your term you'll have a transition
Speaker 1: to deal with there with Bill McDermott. But we got
Speaker 1: to talk about your new job. As you said, you're
Speaker 1: moving to Portland to become the CEO of Nike. You've
Speaker 1: served on the board there. Why take this job now?
Speaker 1: Why bring it full circle, as you say, with your
Speaker 1: esteemed history at the Phil Knight Business School and now
Speaker 1: working for the company that Phil Knight created. Yeah, it
Speaker 1: feels spite a big role to g SP. It's not
Speaker 1: quite called full night business goal but night now. But
Speaker 1: you know I was I is lucky enough and fortunate
Speaker 1: enough to meet Phil twenty years ago. And Mark Parker
Speaker 1: Nike's CEO, and I've always deeply resonated with Nike's purpose UM,
Speaker 1: which is, you know, bring inspiration and innovation to every
Speaker 1: athlete in the world. Asterisk around athlete. If you have
Speaker 1: a body, you are an athlete. And to me, that's
Speaker 1: around human potential. It speaks to each person on this planet,
Speaker 1: around the potential they have within them. And sport is
Speaker 1: sport is a very powerful institution in a world right
Speaker 1: now a lot of our other institutions are falling down.
Speaker 1: They're polarizing, whether it's you know, government or politics. Sport
Speaker 1: is something that brings people together. It brings people together
Speaker 1: on a level playing field within countries and across countries.
Speaker 1: And so the the purpose of Nike and the role
Speaker 1: in impact it does and can have in the world
Speaker 1: is just something that has I've always admired deeply. It's
Speaker 1: always spoken to me. And so, as you mentioned, I
Speaker 1: was privileged enough to be served on the board the
Speaker 1: last five years, and when Mark and failing the board
Speaker 1: UH invited me to have this opportunity to become CEO,
Speaker 1: it almost felt like UM a calling and UH and
Speaker 1: a cause that I had to pursue and very much
Speaker 1: along the lines of what we've been talking about in
Speaker 1: this conversation. Nike is at the epicenter of many things,
Speaker 1: and I think has had a track record of playing
Speaker 1: a very positive role not just with its athletes and
Speaker 1: customers and consumers, but also in the broader society. And
Speaker 1: and so I am I'm feel very privileged and honored
Speaker 1: to to have the opportunity to serve continue my my
Speaker 1: my quest of servant leadership by serving the employees and
Speaker 1: customers and athletes and society around Nike. And I'm looking
Speaker 1: forward to it. So if there's one lesson you could
Speaker 1: give to uh future NBA students, what would it be,
Speaker 1: just quickly our future advice? Just do it, Just do it.
Speaker 1: That's John Donahoe. He's Stanford Graduate School of Business, class
Speaker 1: of six. Week caught up with him because this week
Speaker 1: in the magazine. In Business Week magazine it's all about
Speaker 1: the top business schools in the United States, Stanford was
Speaker 1: number one. So he's an a lump so we talked
Speaker 1: with him. But he was chairman of the board at PayPal,
Speaker 1: former president and CEO at eBay. He had some time
Speaker 1: at Banning Company, was a former CEO there, he's now
Speaker 1: at Service, now at the top job, but he's taking
Speaker 1: over the top job at Nike come the new year.
Speaker 1: A very important conversation. Important guy you're gonna want to
Speaker 1: keep hearing from, especially as he takes that new job.
Speaker 1: You've been listening to Bloomberg Business Week Extra, he short
Speaker 1: a tune into Bloomberg Business Week Radio Live Monday through
Speaker 1: Friday at TBM Wall Street Time, bl Bloomberg Radio. I'm
Speaker 1: Carol Masser and I'm Jason Kelly. This is Bloomberg