WEBVTT - Samuelson on How Doing Business Has Changed 0:00:00.080 --> 0:00:02.120 Well, the rules of business feel like they got a 0:00:02.200 --> 0:00:05.160 jolt back in the summer often when the Business Roundtable 0:00:05.240 --> 0:00:07.320 came out and they announced a new statement on the 0:00:07.320 --> 0:00:10.320 purpose of a corporation, and it was really about companies 0:00:10.360 --> 0:00:14.840 operating for the benefit of all stakeholders, customers, employees, suppliers, 0:00:14.920 --> 0:00:18.759 communities and shape and shareholders. So we've heard a lot 0:00:18.800 --> 0:00:20.840 about this over the last couple of years. We've had 0:00:20.880 --> 0:00:24.720 big name investors like Larry Finka Blackrock weighing in as well. 0:00:24.880 --> 0:00:28.120 So addressing the changing rules of business, it's all in 0:00:28.120 --> 0:00:31.160 a new book. It's by Judy Samuelson. She is Vice president, 0:00:31.160 --> 0:00:34.320 founder and executive director at the Aspen Institute Business and 0:00:34.360 --> 0:00:38.200 Society Program. Her book Six New Rules of Business, Creating 0:00:38.280 --> 0:00:40.839 Real Value in a Changing World, and she joins us 0:00:41.200 --> 0:00:43.640 on the phone in New York City. Judy, nice to 0:00:43.640 --> 0:00:47.240 have you here on Bloomberg. Tell me about the premise 0:00:47.320 --> 0:00:51.680 of your book and what you initially set out to do. Sure, 0:00:51.800 --> 0:00:55.000 thanks for having me. Sure you know it's really it 0:00:55.120 --> 0:00:58.480 starts with the premise of business is simply maybe the 0:00:58.480 --> 0:01:02.480 most important, simply the most fluential institution of our day. 0:01:02.640 --> 0:01:05.320 And we needed at the Table to address any problems 0:01:05.319 --> 0:01:10.399 of consequence and particularly these complicated long term changes that 0:01:10.440 --> 0:01:14.160 need to take place. So start with that, that premise, 0:01:14.240 --> 0:01:17.600 and then just that you know, the context and expectations 0:01:17.600 --> 0:01:20.440 of business are changing fairly rapidly. We've seen this happen 0:01:20.520 --> 0:01:23.520 during COVID time, but certainly before as well, and the 0:01:23.640 --> 0:01:27.880 businesses to understand this changing context and maybe work with 0:01:28.000 --> 0:01:31.320 the forces that are that are shaping the context. Well. 0:01:31.319 --> 0:01:35.800 And what's interesting too, you you use real life examples 0:01:35.880 --> 0:01:38.440 to spell this all out. And you had case studies 0:01:38.720 --> 0:01:40.840 and which I always love, and I think about our audience, 0:01:40.959 --> 0:01:44.240 you know, love specifics and love anecdotes. So give me 0:01:44.319 --> 0:01:48.080 one case study and what is the lesson that we 0:01:48.200 --> 0:01:51.120 learned out of it? You know, the one that comes 0:01:51.160 --> 0:01:53.640 to mind because you started out talking about the business 0:01:53.680 --> 0:01:56.680 round table having you know, changed up the definition of 0:01:56.720 --> 0:01:59.480 the corporation. If I go back to the time that 0:01:59.640 --> 0:02:04.040 wrote Jelos was was the CEO of Murk and was 0:02:04.160 --> 0:02:07.360 engaged in the decision to whether or not to produce 0:02:07.400 --> 0:02:10.880 a drug that had no commercial value, but it was 0:02:10.919 --> 0:02:14.079 a it was a cure for a devastating disease called 0:02:14.200 --> 0:02:17.200 river blindness that's found in river valleys in Africa and beyond, 0:02:17.960 --> 0:02:19.560 and he had to make the decision about whether to 0:02:19.600 --> 0:02:22.799 go forward, and he understood he was it was he 0:02:22.880 --> 0:02:26.120 was a scientist. He understood that the real purpose of 0:02:26.280 --> 0:02:32.280 Murk required their ability to unleash this scientific talent too. 0:02:32.360 --> 0:02:36.440 They wanted to produce, they wanted to be abuse to society. 0:02:36.520 --> 0:02:39.519 It was in their DNA and that if they refused 0:02:39.520 --> 0:02:43.880 to put forward a drug, that was essentially telling new scientists, sorry, 0:02:43.880 --> 0:02:45.800 you didn't get it right. Next time, find something that 0:02:45.840 --> 0:02:47.880 would be more popular in the United States of America. 0:02:48.400 --> 0:02:50.880 It wouldn't it wouldn't have It wouldn't have spoken to 0:02:51.480 --> 0:02:54.600 the reason people choose to work for a great company 0:02:54.639 --> 0:02:57.640 like Mirk. So it's it's just kind of a tangible 0:02:57.680 --> 0:03:02.520 example to me of of real purpose, of clarity of 0:03:02.560 --> 0:03:05.600 what that purposes, and understanding what has to be true 0:03:06.080 --> 0:03:11.200 to honor that purpose. Well, is it difficult though, to 0:03:11.360 --> 0:03:14.760 do that clearly, especially if you're a publicly held company, 0:03:14.800 --> 0:03:16.840 and at the end of the day, you're going to 0:03:16.919 --> 0:03:20.880 have members of the business media like myself, saying, oh, well, 0:03:20.880 --> 0:03:23.920 that stocks down nine because they didn't make their numbers, 0:03:24.360 --> 0:03:27.640 which is something I'm often critical of myself. But you know, 0:03:27.720 --> 0:03:31.240 what I'm saying, Yes I do, and it's you know, 0:03:31.280 --> 0:03:33.200 it's the reality of the world we live in. So 0:03:33.520 --> 0:03:35.800 you know, business people don't get up better work too. 0:03:36.040 --> 0:03:39.480 You know, people don't join companies in order to make 0:03:39.480 --> 0:03:42.440 the shareholders happy. It's not it's not the lifeblood of 0:03:42.480 --> 0:03:44.800 why most people go to work in the morning. And 0:03:44.840 --> 0:03:49.400 I think increasingly business executives and leaders understand this. What 0:03:49.520 --> 0:03:52.440 the Business round Table was essentially saying, which has always 0:03:52.440 --> 0:03:56.160 been true, is that there is no single objective function. Yes, 0:03:56.200 --> 0:03:58.280 you have to care about your shareholders or they'll get 0:03:58.280 --> 0:04:02.520 really annoisy. But to manage the business well and to 0:04:02.560 --> 0:04:05.320 build a business that you're proud to work in, requires 0:04:05.360 --> 0:04:08.440 being a tuned to a host of different inputs and 0:04:08.440 --> 0:04:12.000 and kind of consequences of business decisions. And these things 0:04:12.040 --> 0:04:15.480 are increasingly noisy because of the power of the Internet, 0:04:15.560 --> 0:04:18.360 because of the voice of employees becoming more important piece 0:04:18.400 --> 0:04:20.720 of the puzzle, and you simply have to manage to 0:04:20.839 --> 0:04:23.400 multiple objectives. That doesn't mean it's all the same for 0:04:23.440 --> 0:04:27.240 every single company. Every company is different, and what has 0:04:27.279 --> 0:04:29.640 to be true for them to succeed over the long 0:04:29.680 --> 0:04:33.760 haul may be different than even for a competitor so 0:04:33.880 --> 0:04:35.520 I want to go through the rules, Judy, but I 0:04:35.560 --> 0:04:39.280 want to ask you the pandemic. How did that impact 0:04:39.320 --> 0:04:43.839 any of your writing for this book? Wow certainly slammed 0:04:44.279 --> 0:04:47.080 right in the middle of the book. Um, you know, 0:04:47.160 --> 0:04:50.800 I think one one kind of download from the pandemic 0:04:50.960 --> 0:04:55.520 is just that it's humanized the corporation to some degree. 0:04:55.800 --> 0:05:00.520 You know, this all of the conversation about the health 0:05:00.520 --> 0:05:03.880 of frontline workers and the risk they were taking, whether 0:05:03.960 --> 0:05:07.680 or not they were being adequately rewarded, and companies playing 0:05:07.720 --> 0:05:10.520 with CEOs pay in this moment, etcetera. It kind of 0:05:10.520 --> 0:05:12.960 put a human face on companies that we don't necessarily 0:05:13.000 --> 0:05:16.560 go deep into all the time, and that relates to 0:05:16.680 --> 0:05:19.680 some of the underlying tensions and changes and forces that 0:05:19.720 --> 0:05:22.880 are shaping business today. And they stay there. Do you 0:05:22.880 --> 0:05:28.080 think they're lasting? You know, the whole game is about 0:05:28.240 --> 0:05:33.320 whether companies are taking seriously the process of lining aligning 0:05:33.360 --> 0:05:37.400 their operations and their decision making with their intentions. We 0:05:37.440 --> 0:05:40.520 have had no shortage of CEO speaking out in the 0:05:40.600 --> 0:05:43.960 last years, not just during the pandemic, but going back 0:05:44.200 --> 0:05:47.200 into early years of the Trump administration and even before that, 0:05:47.640 --> 0:05:52.000 speaking to complicated issues around immigration, around the right to 0:05:52.080 --> 0:05:54.480 own a you know, to bring them into a store 0:05:54.560 --> 0:05:58.919 or not. These social issues that don't always rebound to 0:05:58.960 --> 0:06:01.560 the business environment but will receive you as increasingly have 0:06:01.720 --> 0:06:04.680 been kind of having to mirror what they're hearing from 0:06:04.680 --> 0:06:08.560 their own employees. And I think that I don't think 0:06:08.600 --> 0:06:12.200 that's going to change. But it's still a complicated endeavor 0:06:12.279 --> 0:06:14.880 to set intentions or speak to the complexity of these 0:06:14.960 --> 0:06:17.599 questions and then make sure that you're actually scrubbing your 0:06:18.400 --> 0:06:23.240 operations and kind of rules of decision making to make 0:06:23.240 --> 0:06:28.200 sure that they're aligned with those intentions. Complicated, It is complicated, 0:06:28.360 --> 0:06:30.440 I agree. And you know, I was having a conversation 0:06:30.560 --> 0:06:34.040 with someone about, you know, how racism has really come 0:06:34.080 --> 0:06:36.480 to the forefront, and this individual said, you know, in 0:06:36.520 --> 0:06:38.960 some ways we have President Trump. To think that that 0:06:39.560 --> 0:06:43.280 really brought this conversation out. That to have you know, 0:06:43.600 --> 0:06:46.200 a president that had very extreme views about things and 0:06:46.240 --> 0:06:49.479 others who had very extreme views about racism, that it really, 0:06:49.960 --> 0:06:54.320 you know, created a very strong conversation. Uh, to some 0:06:54.400 --> 0:06:57.240 extent that's kind of controversial, but you do, you know, 0:06:57.320 --> 0:07:00.359 you do wonder um And what this individual saying to 0:07:00.400 --> 0:07:02.560 me is that as things start to get quieter and 0:07:02.640 --> 0:07:05.960 more normal in terms of the political environment. Do does 0:07:05.960 --> 0:07:11.920 our enthusiasm for change also kind of die down? I 0:07:11.960 --> 0:07:15.840 think that it has pointed out domains where the companies 0:07:15.880 --> 0:07:20.360 have real agency. You know, executives have real decision making 0:07:20.440 --> 0:07:25.040 power that deeply influence the kind of conduct and the 0:07:25.080 --> 0:07:29.320 well being of employees. Certainly they have real decisions that 0:07:29.440 --> 0:07:33.360 make that that either um kind of stick with the 0:07:33.400 --> 0:07:37.400 status quo and and fail to kind of review our 0:07:37.440 --> 0:07:43.600 assumptions or mind these these moments and and try to 0:07:43.640 --> 0:07:46.559 figure out where in the company, where are the ways 0:07:46.600 --> 0:07:50.040 in which we can actually influence racism authentically from inside 0:07:50.040 --> 0:07:53.640 the enterprise. And I think that conversation is ongoing. And 0:07:53.640 --> 0:07:55.920 then back to employees again, I don't think employees are 0:07:55.920 --> 0:07:58.560 going to let business off the hook. I think they 0:07:58.600 --> 0:08:01.440 are a natural bridge between the inside world of the 0:08:01.520 --> 0:08:05.440 enterprise and the community that's the host and hosts the enterprise. 0:08:06.320 --> 0:08:10.760 And they are both the risks. They are both. They 0:08:10.800 --> 0:08:15.720 are both keen to understand and to communicate the risks 0:08:15.760 --> 0:08:18.440 that they see for the business, but also the opportunities 0:08:18.920 --> 0:08:21.600 that are possible if a business does align with their 0:08:21.600 --> 0:08:24.880 real values. Yeah, I do think you know, you're onto something, 0:08:24.880 --> 0:08:26.320 and I feel like we've had a lot of conversations 0:08:26.320 --> 0:08:29.800 about that that the future worker, the younger worker, probably 0:08:29.800 --> 0:08:32.920 younger today, and then you know who will be you know, 0:08:32.960 --> 0:08:36.520 that employee for for years to come is certainly being 0:08:36.559 --> 0:08:38.839 an agent for change at companies because they're demanding it 0:08:38.920 --> 0:08:40.320 or they're going to go work somewhere else. And the 0:08:40.320 --> 0:08:42.200 same thing for consumers. I see it my own daughter. 0:08:42.480 --> 0:08:45.000 Hey listen, um, I'm just going to mention some of 0:08:45.040 --> 0:08:48.640 these these six rules that you lay out, you talk 0:08:48.720 --> 0:08:52.120 about co create, don't compete to culture as king. Employers 0:08:52.120 --> 0:08:56.120 are more than stakeholders, they are the business. Corporate responsibility 0:08:56.200 --> 0:08:59.200 is more than your carbon footprint. Climate change, that's a 0:08:59.240 --> 0:09:01.480 big one, and I think it's really relevant and important 0:09:01.480 --> 0:09:04.840 today on a day when we're seeing many states around 0:09:04.840 --> 0:09:07.680 the country that are either without power or dealing with 0:09:07.840 --> 0:09:12.280 rolling blackouts because of climate change. Yes, and it's also 0:09:12.320 --> 0:09:14.840 one where we've seen some businesses step up and raise 0:09:14.920 --> 0:09:17.760 the bar, and we've seen other companies kind of joined 0:09:17.800 --> 0:09:20.520 them in the fray. So I think that's that's the 0:09:20.600 --> 0:09:23.400 dynamic one. Obviously, with a new administration that has a 0:09:23.520 --> 0:09:27.560 very different mindset about the need to address this problem. Um, 0:09:28.320 --> 0:09:32.240 business can be aligned with that direction as well, and 0:09:32.280 --> 0:09:35.640 not be working at odds, but be working along with government. 0:09:36.840 --> 0:09:38.840 What do you think is the most different among the 0:09:38.880 --> 0:09:40.839 six rules that you've laid out, Which is the most 0:09:40.880 --> 0:09:47.079 difficult right now? Most difficult? Um? Well, I do think 0:09:47.440 --> 0:09:50.840 that the I think the degree to which capital markets 0:09:50.880 --> 0:09:53.360 is still in the thrall of shermold the primacy is 0:09:53.480 --> 0:09:57.000 kind of a simple way to measure and one that 0:09:57.480 --> 0:10:01.280 from which they benefit tremendously if they're right. Um, I 0:10:01.320 --> 0:10:04.320 think that's still a conundrum. I think we hear the 0:10:04.360 --> 0:10:08.040 intentions of business that you know, their CEO pay is 0:10:08.040 --> 0:10:11.680 is anchored. For the large public companies there, uh, stock 0:10:11.800 --> 0:10:14.080 price is the center of their pay package, and so 0:10:14.160 --> 0:10:19.400 they're internally conflicted about these trade offs where I'm sorry, 0:10:19.440 --> 0:10:23.679 it's of profits have been sent to shareholders of the 0:10:23.760 --> 0:10:26.400 last decade. That's going to have to change if we're 0:10:26.400 --> 0:10:30.680 going to enable a kind of a shared economy here 0:10:30.679 --> 0:10:33.360 where everyone benefits, and that's ultimately has to be the 0:10:33.400 --> 0:10:36.080 long game. Business is going to succeed. You can't have 0:10:36.120 --> 0:10:38.760 a successful business in a failed society. Which is a 0:10:38.800 --> 0:10:40.760 really great point to leave on. And I agree that 0:10:40.800 --> 0:10:42.360 in terms of dealing with some of the gaps that 0:10:42.360 --> 0:10:44.640 are out there in society. That's that's the way we 0:10:44.679 --> 0:10:46.920 need to do it. Judy, thank you so much, really thoughtful. 0:10:47.000 --> 0:10:50.319 Judy Samuelson, Vice President at the Aspen Institute. Check out 0:10:50.320 --> 0:10:52.960 our book, Six New Rules of Business, Creating real value 0:10:53.000 --> 0:10:54.360 in a changing world.