Speaker 1: Well, the rules of business feel like they got a
Speaker 1: jolt back in the summer often when the Business Roundtable
Speaker 1: came out and they announced a new statement on the
Speaker 1: purpose of a corporation, and it was really about companies
Speaker 1: operating for the benefit of all stakeholders, customers, employees, suppliers,
Speaker 1: communities and shape and shareholders. So we've heard a lot
Speaker 1: about this over the last couple of years. We've had
Speaker 1: big name investors like Larry Finka Blackrock weighing in as well.
Speaker 1: So addressing the changing rules of business, it's all in
Speaker 1: a new book. It's by Judy Samuelson. She is Vice president,
Speaker 1: founder and executive director at the Aspen Institute Business and
Speaker 1: Society Program. Her book Six New Rules of Business, Creating
Speaker 1: Real Value in a Changing World, and she joins us
Speaker 1: on the phone in New York City. Judy, nice to
Speaker 1: have you here on Bloomberg. Tell me about the premise
Speaker 1: of your book and what you initially set out to do. Sure,
Speaker 1: thanks for having me. Sure you know it's really it
Speaker 1: starts with the premise of business is simply maybe the
Speaker 1: most important, simply the most fluential institution of our day.
Speaker 1: And we needed at the Table to address any problems
Speaker 1: of consequence and particularly these complicated long term changes that
Speaker 1: need to take place. So start with that, that premise,
Speaker 1: and then just that you know, the context and expectations
Speaker 1: of business are changing fairly rapidly. We've seen this happen
Speaker 1: during COVID time, but certainly before as well, and the
Speaker 1: businesses to understand this changing context and maybe work with
Speaker 1: the forces that are that are shaping the context. Well.
Speaker 1: And what's interesting too, you you use real life examples
Speaker 1: to spell this all out. And you had case studies
Speaker 1: and which I always love, and I think about our audience,
Speaker 1: you know, love specifics and love anecdotes. So give me
Speaker 1: one case study and what is the lesson that we
Speaker 1: learned out of it? You know, the one that comes
Speaker 1: to mind because you started out talking about the business
Speaker 1: round table having you know, changed up the definition of
Speaker 1: the corporation. If I go back to the time that
Speaker 1: wrote Jelos was was the CEO of Murk and was
Speaker 1: engaged in the decision to whether or not to produce
Speaker 1: a drug that had no commercial value, but it was
Speaker 1: a it was a cure for a devastating disease called
Speaker 1: river blindness that's found in river valleys in Africa and beyond,
Speaker 1: and he had to make the decision about whether to
Speaker 1: go forward, and he understood he was it was he
Speaker 1: was a scientist. He understood that the real purpose of
Speaker 1: Murk required their ability to unleash this scientific talent too.
Speaker 1: They wanted to produce, they wanted to be abuse to society.
Speaker 1: It was in their DNA and that if they refused
Speaker 1: to put forward a drug, that was essentially telling new scientists, sorry,
Speaker 1: you didn't get it right. Next time, find something that
Speaker 1: would be more popular in the United States of America.
Speaker 1: It wouldn't it wouldn't have It wouldn't have spoken to
Speaker 1: the reason people choose to work for a great company
Speaker 1: like Mirk. So it's it's just kind of a tangible
Speaker 1: example to me of of real purpose, of clarity of
Speaker 1: what that purposes, and understanding what has to be true
Speaker 1: to honor that purpose. Well, is it difficult though, to
Speaker 1: do that clearly, especially if you're a publicly held company,
Speaker 1: and at the end of the day, you're going to
Speaker 1: have members of the business media like myself, saying, oh, well,
Speaker 1: that stocks down nine because they didn't make their numbers,
Speaker 1: which is something I'm often critical of myself. But you know,
Speaker 1: what I'm saying, Yes I do, and it's you know,
Speaker 1: it's the reality of the world we live in. So
Speaker 1: you know, business people don't get up better work too.
Speaker 1: You know, people don't join companies in order to make
Speaker 1: the shareholders happy. It's not it's not the lifeblood of
Speaker 1: why most people go to work in the morning. And
Speaker 1: I think increasingly business executives and leaders understand this. What
Speaker 1: the Business round Table was essentially saying, which has always
Speaker 1: been true, is that there is no single objective function. Yes,
Speaker 1: you have to care about your shareholders or they'll get
Speaker 1: really annoisy. But to manage the business well and to
Speaker 1: build a business that you're proud to work in, requires
Speaker 1: being a tuned to a host of different inputs and
Speaker 1: and kind of consequences of business decisions. And these things
Speaker 1: are increasingly noisy because of the power of the Internet,
Speaker 1: because of the voice of employees becoming more important piece
Speaker 1: of the puzzle, and you simply have to manage to
Speaker 1: multiple objectives. That doesn't mean it's all the same for
Speaker 1: every single company. Every company is different, and what has
Speaker 1: to be true for them to succeed over the long
Speaker 1: haul may be different than even for a competitor so
Speaker 1: I want to go through the rules, Judy, but I
Speaker 1: want to ask you the pandemic. How did that impact
Speaker 1: any of your writing for this book? Wow certainly slammed
Speaker 1: right in the middle of the book. Um, you know,
Speaker 1: I think one one kind of download from the pandemic
Speaker 1: is just that it's humanized the corporation to some degree.
Speaker 1: You know, this all of the conversation about the health
Speaker 1: of frontline workers and the risk they were taking, whether
Speaker 1: or not they were being adequately rewarded, and companies playing
Speaker 1: with CEOs pay in this moment, etcetera. It kind of
Speaker 1: put a human face on companies that we don't necessarily
Speaker 1: go deep into all the time, and that relates to
Speaker 1: some of the underlying tensions and changes and forces that
Speaker 1: are shaping business today. And they stay there. Do you
Speaker 1: think they're lasting? You know, the whole game is about
Speaker 1: whether companies are taking seriously the process of lining aligning
Speaker 1: their operations and their decision making with their intentions. We
Speaker 1: have had no shortage of CEO speaking out in the
Speaker 1: last years, not just during the pandemic, but going back
Speaker 1: into early years of the Trump administration and even before that,
Speaker 1: speaking to complicated issues around immigration, around the right to
Speaker 1: own a you know, to bring them into a store
Speaker 1: or not. These social issues that don't always rebound to
Speaker 1: the business environment but will receive you as increasingly have
Speaker 1: been kind of having to mirror what they're hearing from
Speaker 1: their own employees. And I think that I don't think
Speaker 1: that's going to change. But it's still a complicated endeavor
Speaker 1: to set intentions or speak to the complexity of these
Speaker 1: questions and then make sure that you're actually scrubbing your
Speaker 1: operations and kind of rules of decision making to make
Speaker 1: sure that they're aligned with those intentions. Complicated, It is complicated,
Speaker 1: I agree. And you know, I was having a conversation
Speaker 1: with someone about, you know, how racism has really come
Speaker 1: to the forefront, and this individual said, you know, in
Speaker 1: some ways we have President Trump. To think that that
Speaker 1: really brought this conversation out. That to have you know,
Speaker 1: a president that had very extreme views about things and
Speaker 1: others who had very extreme views about racism, that it really,
Speaker 1: you know, created a very strong conversation. Uh, to some
Speaker 1: extent that's kind of controversial, but you do, you know,
Speaker 1: you do wonder um And what this individual saying to
Speaker 1: me is that as things start to get quieter and
Speaker 1: more normal in terms of the political environment. Do does
Speaker 1: our enthusiasm for change also kind of die down? I
Speaker 1: think that it has pointed out domains where the companies
Speaker 1: have real agency. You know, executives have real decision making
Speaker 1: power that deeply influence the kind of conduct and the
Speaker 1: well being of employees. Certainly they have real decisions that
Speaker 1: make that that either um kind of stick with the
Speaker 1: status quo and and fail to kind of review our
Speaker 1: assumptions or mind these these moments and and try to
Speaker 1: figure out where in the company, where are the ways
Speaker 1: in which we can actually influence racism authentically from inside
Speaker 1: the enterprise. And I think that conversation is ongoing. And
Speaker 1: then back to employees again, I don't think employees are
Speaker 1: going to let business off the hook. I think they
Speaker 1: are a natural bridge between the inside world of the
Speaker 1: enterprise and the community that's the host and hosts the enterprise.
Speaker 1: And they are both the risks. They are both. They
Speaker 1: are both keen to understand and to communicate the risks
Speaker 1: that they see for the business, but also the opportunities
Speaker 1: that are possible if a business does align with their
Speaker 1: real values. Yeah, I do think you know, you're onto something,
Speaker 1: and I feel like we've had a lot of conversations
Speaker 1: about that that the future worker, the younger worker, probably
Speaker 1: younger today, and then you know who will be you know,
Speaker 1: that employee for for years to come is certainly being
Speaker 1: an agent for change at companies because they're demanding it
Speaker 1: or they're going to go work somewhere else. And the
Speaker 1: same thing for consumers. I see it my own daughter.
Speaker 1: Hey listen, um, I'm just going to mention some of
Speaker 1: these these six rules that you lay out, you talk
Speaker 1: about co create, don't compete to culture as king. Employers
Speaker 1: are more than stakeholders, they are the business. Corporate responsibility
Speaker 1: is more than your carbon footprint. Climate change, that's a
Speaker 1: big one, and I think it's really relevant and important
Speaker 1: today on a day when we're seeing many states around
Speaker 1: the country that are either without power or dealing with
Speaker 1: rolling blackouts because of climate change. Yes, and it's also
Speaker 1: one where we've seen some businesses step up and raise
Speaker 1: the bar, and we've seen other companies kind of joined
Speaker 1: them in the fray. So I think that's that's the
Speaker 1: dynamic one. Obviously, with a new administration that has a
Speaker 1: very different mindset about the need to address this problem. Um,
Speaker 1: business can be aligned with that direction as well, and
Speaker 1: not be working at odds, but be working along with government.
Speaker 1: What do you think is the most different among the
Speaker 1: six rules that you've laid out, Which is the most
Speaker 1: difficult right now? Most difficult? Um? Well, I do think
Speaker 1: that the I think the degree to which capital markets
Speaker 1: is still in the thrall of shermold the primacy is
Speaker 1: kind of a simple way to measure and one that
Speaker 1: from which they benefit tremendously if they're right. Um, I
Speaker 1: think that's still a conundrum. I think we hear the
Speaker 1: intentions of business that you know, their CEO pay is
Speaker 1: is anchored. For the large public companies there, uh, stock
Speaker 1: price is the center of their pay package, and so
Speaker 1: they're internally conflicted about these trade offs where I'm sorry,
Speaker 1: it's of profits have been sent to shareholders of the
Speaker 1: last decade. That's going to have to change if we're
Speaker 1: going to enable a kind of a shared economy here
Speaker 1: where everyone benefits, and that's ultimately has to be the
Speaker 1: long game. Business is going to succeed. You can't have
Speaker 1: a successful business in a failed society. Which is a
Speaker 1: really great point to leave on. And I agree that
Speaker 1: in terms of dealing with some of the gaps that
Speaker 1: are out there in society. That's that's the way we
Speaker 1: need to do it. Judy, thank you so much, really thoughtful.
Speaker 1: Judy Samuelson, Vice President at the Aspen Institute. Check out
Speaker 1: our book, Six New Rules of Business, Creating real value
Speaker 1: in a changing world.