1 00:00:00,080 --> 00:00:02,120 Speaker 1: Well, the rules of business feel like they got a 2 00:00:02,200 --> 00:00:05,160 Speaker 1: jolt back in the summer often when the Business Roundtable 3 00:00:05,240 --> 00:00:07,320 Speaker 1: came out and they announced a new statement on the 4 00:00:07,320 --> 00:00:10,320 Speaker 1: purpose of a corporation, and it was really about companies 5 00:00:10,360 --> 00:00:14,840 Speaker 1: operating for the benefit of all stakeholders, customers, employees, suppliers, 6 00:00:14,920 --> 00:00:18,759 Speaker 1: communities and shape and shareholders. So we've heard a lot 7 00:00:18,800 --> 00:00:20,840 Speaker 1: about this over the last couple of years. We've had 8 00:00:20,880 --> 00:00:24,720 Speaker 1: big name investors like Larry Finka Blackrock weighing in as well. 9 00:00:24,880 --> 00:00:28,120 Speaker 1: So addressing the changing rules of business, it's all in 10 00:00:28,120 --> 00:00:31,160 Speaker 1: a new book. It's by Judy Samuelson. She is Vice president, 11 00:00:31,160 --> 00:00:34,320 Speaker 1: founder and executive director at the Aspen Institute Business and 12 00:00:34,360 --> 00:00:38,200 Speaker 1: Society Program. Her book Six New Rules of Business, Creating 13 00:00:38,280 --> 00:00:40,839 Speaker 1: Real Value in a Changing World, and she joins us 14 00:00:41,200 --> 00:00:43,640 Speaker 1: on the phone in New York City. Judy, nice to 15 00:00:43,640 --> 00:00:47,240 Speaker 1: have you here on Bloomberg. Tell me about the premise 16 00:00:47,320 --> 00:00:51,680 Speaker 1: of your book and what you initially set out to do. Sure, 17 00:00:51,800 --> 00:00:55,000 Speaker 1: thanks for having me. Sure you know it's really it 18 00:00:55,120 --> 00:00:58,480 Speaker 1: starts with the premise of business is simply maybe the 19 00:00:58,480 --> 00:01:02,480 Speaker 1: most important, simply the most fluential institution of our day. 20 00:01:02,640 --> 00:01:05,320 Speaker 1: And we needed at the Table to address any problems 21 00:01:05,319 --> 00:01:10,399 Speaker 1: of consequence and particularly these complicated long term changes that 22 00:01:10,440 --> 00:01:14,160 Speaker 1: need to take place. So start with that, that premise, 23 00:01:14,240 --> 00:01:17,600 Speaker 1: and then just that you know, the context and expectations 24 00:01:17,600 --> 00:01:20,440 Speaker 1: of business are changing fairly rapidly. We've seen this happen 25 00:01:20,520 --> 00:01:23,520 Speaker 1: during COVID time, but certainly before as well, and the 26 00:01:23,640 --> 00:01:27,880 Speaker 1: businesses to understand this changing context and maybe work with 27 00:01:28,000 --> 00:01:31,320 Speaker 1: the forces that are that are shaping the context. Well. 28 00:01:31,319 --> 00:01:35,800 Speaker 1: And what's interesting too, you you use real life examples 29 00:01:35,880 --> 00:01:38,440 Speaker 1: to spell this all out. And you had case studies 30 00:01:38,720 --> 00:01:40,840 Speaker 1: and which I always love, and I think about our audience, 31 00:01:40,959 --> 00:01:44,240 Speaker 1: you know, love specifics and love anecdotes. So give me 32 00:01:44,319 --> 00:01:48,080 Speaker 1: one case study and what is the lesson that we 33 00:01:48,200 --> 00:01:51,120 Speaker 1: learned out of it? You know, the one that comes 34 00:01:51,160 --> 00:01:53,640 Speaker 1: to mind because you started out talking about the business 35 00:01:53,680 --> 00:01:56,680 Speaker 1: round table having you know, changed up the definition of 36 00:01:56,720 --> 00:01:59,480 Speaker 1: the corporation. If I go back to the time that 37 00:01:59,640 --> 00:02:04,040 Speaker 1: wrote Jelos was was the CEO of Murk and was 38 00:02:04,160 --> 00:02:07,360 Speaker 1: engaged in the decision to whether or not to produce 39 00:02:07,400 --> 00:02:10,880 Speaker 1: a drug that had no commercial value, but it was 40 00:02:10,919 --> 00:02:14,079 Speaker 1: a it was a cure for a devastating disease called 41 00:02:14,200 --> 00:02:17,200 Speaker 1: river blindness that's found in river valleys in Africa and beyond, 42 00:02:17,960 --> 00:02:19,560 Speaker 1: and he had to make the decision about whether to 43 00:02:19,600 --> 00:02:22,799 Speaker 1: go forward, and he understood he was it was he 44 00:02:22,880 --> 00:02:26,120 Speaker 1: was a scientist. He understood that the real purpose of 45 00:02:26,280 --> 00:02:32,280 Speaker 1: Murk required their ability to unleash this scientific talent too. 46 00:02:32,360 --> 00:02:36,440 Speaker 1: They wanted to produce, they wanted to be abuse to society. 47 00:02:36,520 --> 00:02:39,519 Speaker 1: It was in their DNA and that if they refused 48 00:02:39,520 --> 00:02:43,880 Speaker 1: to put forward a drug, that was essentially telling new scientists, sorry, 49 00:02:43,880 --> 00:02:45,800 Speaker 1: you didn't get it right. Next time, find something that 50 00:02:45,840 --> 00:02:47,880 Speaker 1: would be more popular in the United States of America. 51 00:02:48,400 --> 00:02:50,880 Speaker 1: It wouldn't it wouldn't have It wouldn't have spoken to 52 00:02:51,480 --> 00:02:54,600 Speaker 1: the reason people choose to work for a great company 53 00:02:54,639 --> 00:02:57,640 Speaker 1: like Mirk. So it's it's just kind of a tangible 54 00:02:57,680 --> 00:03:02,520 Speaker 1: example to me of of real purpose, of clarity of 55 00:03:02,560 --> 00:03:05,600 Speaker 1: what that purposes, and understanding what has to be true 56 00:03:06,080 --> 00:03:11,200 Speaker 1: to honor that purpose. Well, is it difficult though, to 57 00:03:11,360 --> 00:03:14,760 Speaker 1: do that clearly, especially if you're a publicly held company, 58 00:03:14,800 --> 00:03:16,840 Speaker 1: and at the end of the day, you're going to 59 00:03:16,919 --> 00:03:20,880 Speaker 1: have members of the business media like myself, saying, oh, well, 60 00:03:20,880 --> 00:03:23,920 Speaker 1: that stocks down nine because they didn't make their numbers, 61 00:03:24,360 --> 00:03:27,640 Speaker 1: which is something I'm often critical of myself. But you know, 62 00:03:27,720 --> 00:03:31,240 Speaker 1: what I'm saying, Yes I do, and it's you know, 63 00:03:31,280 --> 00:03:33,200 Speaker 1: it's the reality of the world we live in. So 64 00:03:33,520 --> 00:03:35,800 Speaker 1: you know, business people don't get up better work too. 65 00:03:36,040 --> 00:03:39,480 Speaker 1: You know, people don't join companies in order to make 66 00:03:39,480 --> 00:03:42,440 Speaker 1: the shareholders happy. It's not it's not the lifeblood of 67 00:03:42,480 --> 00:03:44,800 Speaker 1: why most people go to work in the morning. And 68 00:03:44,840 --> 00:03:49,400 Speaker 1: I think increasingly business executives and leaders understand this. What 69 00:03:49,520 --> 00:03:52,440 Speaker 1: the Business round Table was essentially saying, which has always 70 00:03:52,440 --> 00:03:56,160 Speaker 1: been true, is that there is no single objective function. Yes, 71 00:03:56,200 --> 00:03:58,280 Speaker 1: you have to care about your shareholders or they'll get 72 00:03:58,280 --> 00:04:02,520 Speaker 1: really annoisy. But to manage the business well and to 73 00:04:02,560 --> 00:04:05,320 Speaker 1: build a business that you're proud to work in, requires 74 00:04:05,360 --> 00:04:08,440 Speaker 1: being a tuned to a host of different inputs and 75 00:04:08,440 --> 00:04:12,000 Speaker 1: and kind of consequences of business decisions. And these things 76 00:04:12,040 --> 00:04:15,480 Speaker 1: are increasingly noisy because of the power of the Internet, 77 00:04:15,560 --> 00:04:18,360 Speaker 1: because of the voice of employees becoming more important piece 78 00:04:18,400 --> 00:04:20,720 Speaker 1: of the puzzle, and you simply have to manage to 79 00:04:20,839 --> 00:04:23,400 Speaker 1: multiple objectives. That doesn't mean it's all the same for 80 00:04:23,440 --> 00:04:27,240 Speaker 1: every single company. Every company is different, and what has 81 00:04:27,279 --> 00:04:29,640 Speaker 1: to be true for them to succeed over the long 82 00:04:29,680 --> 00:04:33,760 Speaker 1: haul may be different than even for a competitor so 83 00:04:33,880 --> 00:04:35,520 Speaker 1: I want to go through the rules, Judy, but I 84 00:04:35,560 --> 00:04:39,280 Speaker 1: want to ask you the pandemic. How did that impact 85 00:04:39,320 --> 00:04:43,839 Speaker 1: any of your writing for this book? Wow certainly slammed 86 00:04:44,279 --> 00:04:47,080 Speaker 1: right in the middle of the book. Um, you know, 87 00:04:47,160 --> 00:04:50,800 Speaker 1: I think one one kind of download from the pandemic 88 00:04:50,960 --> 00:04:55,520 Speaker 1: is just that it's humanized the corporation to some degree. 89 00:04:55,800 --> 00:05:00,520 Speaker 1: You know, this all of the conversation about the health 90 00:05:00,520 --> 00:05:03,880 Speaker 1: of frontline workers and the risk they were taking, whether 91 00:05:03,960 --> 00:05:07,680 Speaker 1: or not they were being adequately rewarded, and companies playing 92 00:05:07,720 --> 00:05:10,520 Speaker 1: with CEOs pay in this moment, etcetera. It kind of 93 00:05:10,520 --> 00:05:12,960 Speaker 1: put a human face on companies that we don't necessarily 94 00:05:13,000 --> 00:05:16,560 Speaker 1: go deep into all the time, and that relates to 95 00:05:16,680 --> 00:05:19,680 Speaker 1: some of the underlying tensions and changes and forces that 96 00:05:19,720 --> 00:05:22,880 Speaker 1: are shaping business today. And they stay there. Do you 97 00:05:22,880 --> 00:05:28,080 Speaker 1: think they're lasting? You know, the whole game is about 98 00:05:28,240 --> 00:05:33,320 Speaker 1: whether companies are taking seriously the process of lining aligning 99 00:05:33,360 --> 00:05:37,400 Speaker 1: their operations and their decision making with their intentions. We 100 00:05:37,440 --> 00:05:40,520 Speaker 1: have had no shortage of CEO speaking out in the 101 00:05:40,600 --> 00:05:43,960 Speaker 1: last years, not just during the pandemic, but going back 102 00:05:44,200 --> 00:05:47,200 Speaker 1: into early years of the Trump administration and even before that, 103 00:05:47,640 --> 00:05:52,000 Speaker 1: speaking to complicated issues around immigration, around the right to 104 00:05:52,080 --> 00:05:54,480 Speaker 1: own a you know, to bring them into a store 105 00:05:54,560 --> 00:05:58,919 Speaker 1: or not. These social issues that don't always rebound to 106 00:05:58,960 --> 00:06:01,560 Speaker 1: the business environment but will receive you as increasingly have 107 00:06:01,720 --> 00:06:04,680 Speaker 1: been kind of having to mirror what they're hearing from 108 00:06:04,680 --> 00:06:08,560 Speaker 1: their own employees. And I think that I don't think 109 00:06:08,600 --> 00:06:12,200 Speaker 1: that's going to change. But it's still a complicated endeavor 110 00:06:12,279 --> 00:06:14,880 Speaker 1: to set intentions or speak to the complexity of these 111 00:06:14,960 --> 00:06:17,599 Speaker 1: questions and then make sure that you're actually scrubbing your 112 00:06:18,400 --> 00:06:23,240 Speaker 1: operations and kind of rules of decision making to make 113 00:06:23,240 --> 00:06:28,200 Speaker 1: sure that they're aligned with those intentions. Complicated, It is complicated, 114 00:06:28,360 --> 00:06:30,440 Speaker 1: I agree. And you know, I was having a conversation 115 00:06:30,560 --> 00:06:34,040 Speaker 1: with someone about, you know, how racism has really come 116 00:06:34,080 --> 00:06:36,480 Speaker 1: to the forefront, and this individual said, you know, in 117 00:06:36,520 --> 00:06:38,960 Speaker 1: some ways we have President Trump. To think that that 118 00:06:39,560 --> 00:06:43,280 Speaker 1: really brought this conversation out. That to have you know, 119 00:06:43,600 --> 00:06:46,200 Speaker 1: a president that had very extreme views about things and 120 00:06:46,240 --> 00:06:49,479 Speaker 1: others who had very extreme views about racism, that it really, 121 00:06:49,960 --> 00:06:54,320 Speaker 1: you know, created a very strong conversation. Uh, to some 122 00:06:54,400 --> 00:06:57,240 Speaker 1: extent that's kind of controversial, but you do, you know, 123 00:06:57,320 --> 00:07:00,359 Speaker 1: you do wonder um And what this individual saying to 124 00:07:00,400 --> 00:07:02,560 Speaker 1: me is that as things start to get quieter and 125 00:07:02,640 --> 00:07:05,960 Speaker 1: more normal in terms of the political environment. Do does 126 00:07:05,960 --> 00:07:11,920 Speaker 1: our enthusiasm for change also kind of die down? I 127 00:07:11,960 --> 00:07:15,840 Speaker 1: think that it has pointed out domains where the companies 128 00:07:15,880 --> 00:07:20,360 Speaker 1: have real agency. You know, executives have real decision making 129 00:07:20,440 --> 00:07:25,040 Speaker 1: power that deeply influence the kind of conduct and the 130 00:07:25,080 --> 00:07:29,320 Speaker 1: well being of employees. Certainly they have real decisions that 131 00:07:29,440 --> 00:07:33,360 Speaker 1: make that that either um kind of stick with the 132 00:07:33,400 --> 00:07:37,400 Speaker 1: status quo and and fail to kind of review our 133 00:07:37,440 --> 00:07:43,600 Speaker 1: assumptions or mind these these moments and and try to 134 00:07:43,640 --> 00:07:46,559 Speaker 1: figure out where in the company, where are the ways 135 00:07:46,600 --> 00:07:50,040 Speaker 1: in which we can actually influence racism authentically from inside 136 00:07:50,040 --> 00:07:53,640 Speaker 1: the enterprise. And I think that conversation is ongoing. And 137 00:07:53,640 --> 00:07:55,920 Speaker 1: then back to employees again, I don't think employees are 138 00:07:55,920 --> 00:07:58,560 Speaker 1: going to let business off the hook. I think they 139 00:07:58,600 --> 00:08:01,440 Speaker 1: are a natural bridge between the inside world of the 140 00:08:01,520 --> 00:08:05,440 Speaker 1: enterprise and the community that's the host and hosts the enterprise. 141 00:08:06,320 --> 00:08:10,760 Speaker 1: And they are both the risks. They are both. They 142 00:08:10,800 --> 00:08:15,720 Speaker 1: are both keen to understand and to communicate the risks 143 00:08:15,760 --> 00:08:18,440 Speaker 1: that they see for the business, but also the opportunities 144 00:08:18,920 --> 00:08:21,600 Speaker 1: that are possible if a business does align with their 145 00:08:21,600 --> 00:08:24,880 Speaker 1: real values. Yeah, I do think you know, you're onto something, 146 00:08:24,880 --> 00:08:26,320 Speaker 1: and I feel like we've had a lot of conversations 147 00:08:26,320 --> 00:08:29,800 Speaker 1: about that that the future worker, the younger worker, probably 148 00:08:29,800 --> 00:08:32,920 Speaker 1: younger today, and then you know who will be you know, 149 00:08:32,960 --> 00:08:36,520 Speaker 1: that employee for for years to come is certainly being 150 00:08:36,559 --> 00:08:38,839 Speaker 1: an agent for change at companies because they're demanding it 151 00:08:38,920 --> 00:08:40,320 Speaker 1: or they're going to go work somewhere else. And the 152 00:08:40,320 --> 00:08:42,200 Speaker 1: same thing for consumers. I see it my own daughter. 153 00:08:42,480 --> 00:08:45,000 Speaker 1: Hey listen, um, I'm just going to mention some of 154 00:08:45,040 --> 00:08:48,640 Speaker 1: these these six rules that you lay out, you talk 155 00:08:48,720 --> 00:08:52,120 Speaker 1: about co create, don't compete to culture as king. Employers 156 00:08:52,120 --> 00:08:56,120 Speaker 1: are more than stakeholders, they are the business. Corporate responsibility 157 00:08:56,200 --> 00:08:59,200 Speaker 1: is more than your carbon footprint. Climate change, that's a 158 00:08:59,240 --> 00:09:01,480 Speaker 1: big one, and I think it's really relevant and important 159 00:09:01,480 --> 00:09:04,840 Speaker 1: today on a day when we're seeing many states around 160 00:09:04,840 --> 00:09:07,680 Speaker 1: the country that are either without power or dealing with 161 00:09:07,840 --> 00:09:12,280 Speaker 1: rolling blackouts because of climate change. Yes, and it's also 162 00:09:12,320 --> 00:09:14,840 Speaker 1: one where we've seen some businesses step up and raise 163 00:09:14,920 --> 00:09:17,760 Speaker 1: the bar, and we've seen other companies kind of joined 164 00:09:17,800 --> 00:09:20,520 Speaker 1: them in the fray. So I think that's that's the 165 00:09:20,600 --> 00:09:23,400 Speaker 1: dynamic one. Obviously, with a new administration that has a 166 00:09:23,520 --> 00:09:27,560 Speaker 1: very different mindset about the need to address this problem. Um, 167 00:09:28,320 --> 00:09:32,240 Speaker 1: business can be aligned with that direction as well, and 168 00:09:32,280 --> 00:09:35,640 Speaker 1: not be working at odds, but be working along with government. 169 00:09:36,840 --> 00:09:38,840 Speaker 1: What do you think is the most different among the 170 00:09:38,880 --> 00:09:40,839 Speaker 1: six rules that you've laid out, Which is the most 171 00:09:40,880 --> 00:09:47,079 Speaker 1: difficult right now? Most difficult? Um? Well, I do think 172 00:09:47,440 --> 00:09:50,840 Speaker 1: that the I think the degree to which capital markets 173 00:09:50,880 --> 00:09:53,360 Speaker 1: is still in the thrall of shermold the primacy is 174 00:09:53,480 --> 00:09:57,000 Speaker 1: kind of a simple way to measure and one that 175 00:09:57,480 --> 00:10:01,280 Speaker 1: from which they benefit tremendously if they're right. Um, I 176 00:10:01,320 --> 00:10:04,320 Speaker 1: think that's still a conundrum. I think we hear the 177 00:10:04,360 --> 00:10:08,040 Speaker 1: intentions of business that you know, their CEO pay is 178 00:10:08,040 --> 00:10:11,680 Speaker 1: is anchored. For the large public companies there, uh, stock 179 00:10:11,800 --> 00:10:14,080 Speaker 1: price is the center of their pay package, and so 180 00:10:14,160 --> 00:10:19,400 Speaker 1: they're internally conflicted about these trade offs where I'm sorry, 181 00:10:19,440 --> 00:10:23,679 Speaker 1: it's of profits have been sent to shareholders of the 182 00:10:23,760 --> 00:10:26,400 Speaker 1: last decade. That's going to have to change if we're 183 00:10:26,400 --> 00:10:30,680 Speaker 1: going to enable a kind of a shared economy here 184 00:10:30,679 --> 00:10:33,360 Speaker 1: where everyone benefits, and that's ultimately has to be the 185 00:10:33,400 --> 00:10:36,080 Speaker 1: long game. Business is going to succeed. You can't have 186 00:10:36,120 --> 00:10:38,760 Speaker 1: a successful business in a failed society. Which is a 187 00:10:38,800 --> 00:10:40,760 Speaker 1: really great point to leave on. And I agree that 188 00:10:40,800 --> 00:10:42,360 Speaker 1: in terms of dealing with some of the gaps that 189 00:10:42,360 --> 00:10:44,640 Speaker 1: are out there in society. That's that's the way we 190 00:10:44,679 --> 00:10:46,920 Speaker 1: need to do it. Judy, thank you so much, really thoughtful. 191 00:10:47,000 --> 00:10:50,319 Speaker 1: Judy Samuelson, Vice President at the Aspen Institute. Check out 192 00:10:50,320 --> 00:10:52,960 Speaker 1: our book, Six New Rules of Business, Creating real value 193 00:10:53,000 --> 00:10:54,360 Speaker 1: in a changing world.