1 00:00:02,520 --> 00:00:07,640 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:22,840 --> 00:00:25,640 Speaker 2: This is Wall Street Week. I'm David Weston bringing you 3 00:00:25,720 --> 00:00:29,160 Speaker 2: stories of capitalism this week. What it takes to keep 4 00:00:29,200 --> 00:00:31,960 Speaker 2: a company on track or get it back on track 5 00:00:32,120 --> 00:00:35,440 Speaker 2: when it's wandered off. The tale of two very different companies, 6 00:00:35,680 --> 00:00:39,200 Speaker 2: the Mars Company and global power giant Ennel, and their 7 00:00:39,240 --> 00:00:43,360 Speaker 2: particular take on stakeholder capitalism. But we start with the 8 00:00:43,360 --> 00:00:45,920 Speaker 2: milestone this week of the first one hundred days of 9 00:00:45,960 --> 00:00:50,120 Speaker 2: the Trump administration, moving fast and breaking things. But where 10 00:00:50,159 --> 00:00:53,400 Speaker 2: does it all lead? We ask our special contributor Larry 11 00:00:53,400 --> 00:00:54,640 Speaker 2: Summers of Harvard. 12 00:00:56,560 --> 00:01:00,600 Speaker 1: From a financial point of view, President Trump vowed to 13 00:01:00,720 --> 00:01:04,720 Speaker 1: do new things, and we have something new, the American 14 00:01:04,760 --> 00:01:10,080 Speaker 1: capital flight trade. It's a major pattern in markets when 15 00:01:10,120 --> 00:01:16,600 Speaker 1: the president does something consequential and new. We see four things. 16 00:01:17,200 --> 00:01:21,800 Speaker 1: Stocks go down, bonds go down, the dollar goes down, 17 00:01:22,400 --> 00:01:27,320 Speaker 1: and gold goes up. The signature is very clear. It's 18 00:01:28,000 --> 00:01:33,120 Speaker 1: revulsion against American assets, Foreigners less willing to put money here, 19 00:01:33,760 --> 00:01:39,120 Speaker 1: Americans more eager to diversify out of the country. It's 20 00:01:39,120 --> 00:01:42,160 Speaker 1: something that we saw a little bit of during the 21 00:01:42,200 --> 00:01:46,800 Speaker 1: Carter administration, but it's basically not a pattern in the 22 00:01:46,880 --> 00:01:52,600 Speaker 1: United States. It's a totally common pattern in what wags 23 00:01:52,760 --> 00:01:58,000 Speaker 1: joke are submerging markets, emerging market countries that get themselves 24 00:01:58,080 --> 00:02:03,120 Speaker 1: in trouble, as Argentina has many times, as Airdowan's Turkey 25 00:02:03,600 --> 00:02:08,560 Speaker 1: has in recent years. Most of us didn't ever think 26 00:02:08,639 --> 00:02:13,480 Speaker 1: that this would become a pervasive pattern in the United States. 27 00:02:14,120 --> 00:02:17,760 Speaker 1: So from an economic and financial point of view, there 28 00:02:17,840 --> 00:02:22,280 Speaker 1: is something very new, and of course it accumulates over time. 29 00:02:22,840 --> 00:02:27,480 Speaker 1: And so if you look at the combination of stocks, bonds, 30 00:02:27,520 --> 00:02:32,120 Speaker 1: and the dollar, this has probably been the least successful 31 00:02:32,120 --> 00:02:37,720 Speaker 1: one hundred days of a new president since the Second 32 00:02:37,800 --> 00:02:43,480 Speaker 1: World War. And that's what That's a verdict that's not 33 00:02:43,520 --> 00:02:47,200 Speaker 1: being rendered by any individual. That's not a verdict that's 34 00:02:47,240 --> 00:02:51,400 Speaker 1: being rendered in a partisan way. It's just reflecting the 35 00:02:51,520 --> 00:02:54,799 Speaker 1: judgment of markets. 36 00:02:55,280 --> 00:02:56,960 Speaker 2: Larry, we saw them a couple of weeks ago, the 37 00:02:57,000 --> 00:03:00,760 Speaker 2: effect on stocks, bonds, and the dollar because of tariffs, 38 00:03:00,840 --> 00:03:02,960 Speaker 2: and there was a suspension of course for ninety days 39 00:03:03,080 --> 00:03:06,400 Speaker 2: for negotiations. This week we've seen it. It appears with 40 00:03:06,520 --> 00:03:11,480 Speaker 2: regard to Chair Powell and remarks about possibly terminating his 41 00:03:12,280 --> 00:03:15,440 Speaker 2: regime as a Chair tell us about that, will the 42 00:03:15,480 --> 00:03:18,760 Speaker 2: markets keep President Trump from moving? On? Chair pow. 43 00:03:19,440 --> 00:03:25,800 Speaker 1: Things change, but they stay the same. When the president 44 00:03:25,880 --> 00:03:31,320 Speaker 1: of a country looks like he is driving events, and 45 00:03:31,360 --> 00:03:36,520 Speaker 1: he is driving events in an ill considered populist direction 46 00:03:37,360 --> 00:03:44,160 Speaker 1: against the wisdom of all economics, then bad things happen. 47 00:03:45,000 --> 00:03:49,120 Speaker 1: That's the response to the tariffs, That's the response to 48 00:03:49,240 --> 00:03:54,960 Speaker 1: the FED bashing. That's the response to the indications of 49 00:03:55,640 --> 00:03:59,920 Speaker 1: fiscal responsibility. That will come to be the response to 50 00:04:00,080 --> 00:04:03,080 Speaker 1: the undermining of the rule of law. 51 00:04:03,960 --> 00:04:06,440 Speaker 2: The tradition of keeping score on a president's first one 52 00:04:06,520 --> 00:04:09,760 Speaker 2: hundred days began with FDR when the country was in 53 00:04:09,800 --> 00:04:12,680 Speaker 2: the depths of the Great Depression. Barbara Perry is a 54 00:04:12,720 --> 00:04:16,400 Speaker 2: presidential historian and professor of governance at the University of 55 00:04:16,440 --> 00:04:17,760 Speaker 2: Virginia's Miller Center. 56 00:04:18,200 --> 00:04:21,560 Speaker 3: If you view FDR Franklin Roosevelt as a modern president, 57 00:04:21,640 --> 00:04:23,480 Speaker 3: most of us in political science. 58 00:04:23,160 --> 00:04:23,800 Speaker 4: And history do. 59 00:04:24,520 --> 00:04:28,040 Speaker 3: And what he referred to in July of that nineteen 60 00:04:28,120 --> 00:04:32,400 Speaker 3: thirty two presidential campaign against Herbert Hoover the incumbent, was 61 00:04:32,440 --> 00:04:36,240 Speaker 3: that he would start working with Congress in their first 62 00:04:36,400 --> 00:04:39,320 Speaker 3: hundred days together at the r said action is what 63 00:04:39,400 --> 00:04:42,400 Speaker 3: he would give them, and so he up till I 64 00:04:42,440 --> 00:04:45,960 Speaker 3: would say, now under the second Trump administration, was viewed 65 00:04:46,000 --> 00:04:50,240 Speaker 3: as having the most activist and the most successful administration 66 00:04:50,360 --> 00:04:54,480 Speaker 3: in the first hundred days, passing through Congress fifteen pieces 67 00:04:54,520 --> 00:04:58,520 Speaker 3: of New Deal legislation. So first thing that FDR did 68 00:04:58,640 --> 00:05:02,360 Speaker 3: was go on radio and give his first fireside address, 69 00:05:02,400 --> 00:05:04,640 Speaker 3: which is also part of that one hundred days, to 70 00:05:04,760 --> 00:05:08,040 Speaker 3: calm the people, to say, here's how banking works, here's 71 00:05:08,080 --> 00:05:10,800 Speaker 3: what I'm going to do. Here's the legislation I will 72 00:05:10,880 --> 00:05:13,920 Speaker 3: pass through Congress to regulate that, and then I will 73 00:05:13,960 --> 00:05:17,840 Speaker 3: also have regulations for business and housing and farming to 74 00:05:17,880 --> 00:05:19,919 Speaker 3: try to lift us out of this great depression. So 75 00:05:20,279 --> 00:05:23,919 Speaker 3: he not only starts the concept of those first hundred 76 00:05:24,040 --> 00:05:29,719 Speaker 3: days and judging particularly by legislation that's passed, what is 77 00:05:29,760 --> 00:05:32,920 Speaker 3: successful what's not in a first hundred days, and then 78 00:05:32,920 --> 00:05:35,640 Speaker 3: we end up applying that to all first hundred days 79 00:05:35,640 --> 00:05:37,440 Speaker 3: of the rest of the president's up till now. 80 00:05:37,760 --> 00:05:39,479 Speaker 2: I'm struck, Barbara, with the fact that it was a 81 00:05:39,520 --> 00:05:43,080 Speaker 2: focus on legislation, a one hundred day agenda to work 82 00:05:43,120 --> 00:05:46,880 Speaker 2: with Congress. I'm not sure how much that is left anymore. 83 00:05:46,920 --> 00:05:49,320 Speaker 2: It seems like the president's doing much more on his 84 00:05:49,360 --> 00:05:52,240 Speaker 2: own because they've been mailed so far. Has that been 85 00:05:52,279 --> 00:05:54,760 Speaker 2: a gradual shift or was it more abrupt? 86 00:05:55,720 --> 00:05:59,599 Speaker 3: I think that the current administration has had an abrupt 87 00:05:59,760 --> 00:06:03,920 Speaker 3: change in the substance of these executive orders, and by 88 00:06:03,960 --> 00:06:09,799 Speaker 3: the way, has surpassed FDR, who signed ninety nine executive 89 00:06:09,880 --> 00:06:13,240 Speaker 3: orders in his first hundred days, and even up to 90 00:06:13,640 --> 00:06:17,400 Speaker 3: getting to the first hundred days for this second Trump administration, 91 00:06:18,080 --> 00:06:21,000 Speaker 3: he had signed ninety nine to one hundred already. So 92 00:06:21,279 --> 00:06:23,719 Speaker 3: by the time we get to the official one hundred 93 00:06:23,800 --> 00:06:26,200 Speaker 3: day mark for Trump, there will be well over one 94 00:06:26,240 --> 00:06:27,800 Speaker 3: hundred executive order signed. 95 00:06:28,240 --> 00:06:32,880 Speaker 2: Looking back through history with that benefit, what were the 96 00:06:32,880 --> 00:06:36,479 Speaker 2: most consequential first hundred days obviously nineteen thirty three that 97 00:06:36,520 --> 00:06:39,760 Speaker 2: you mentioned with FDR, which other ones were particularly consequential 98 00:06:39,760 --> 00:06:40,680 Speaker 2: as we look back on it. 99 00:06:41,000 --> 00:06:44,600 Speaker 3: I'll give you another of John Kennedy, something very consequential 100 00:06:44,920 --> 00:06:48,680 Speaker 3: in his first hundred days that he really wasn't responsible for, 101 00:06:48,839 --> 00:06:50,920 Speaker 3: and that is the invasion of the Bay of Pigs 102 00:06:50,920 --> 00:06:56,279 Speaker 3: at Cuba, trying to upend the dictatorship of communist Fidel Castro, 103 00:06:56,560 --> 00:06:59,560 Speaker 3: who had aligned with the Soviet Union, our mortal enemy 104 00:06:59,600 --> 00:07:01,960 Speaker 3: and the Cold World War. And the word most often 105 00:07:02,080 --> 00:07:06,600 Speaker 3: used for that invasion is fiasco. But something that's important 106 00:07:06,640 --> 00:07:10,080 Speaker 3: to remember as well as some political scientists historians say 107 00:07:10,080 --> 00:07:13,760 Speaker 3: about the first hundred days is what style of president 108 00:07:13,840 --> 00:07:17,840 Speaker 3: and presidency does this president portray? And in the case 109 00:07:17,880 --> 00:07:20,760 Speaker 3: of Kennedy, he went before the public, he went before 110 00:07:20,760 --> 00:07:23,679 Speaker 3: the press, and he said, after the Bay of Pigs, 111 00:07:24,000 --> 00:07:26,320 Speaker 3: I will do a study. I will have an expert 112 00:07:26,360 --> 00:07:29,160 Speaker 3: panel to see what went wrong here. I am the 113 00:07:29,240 --> 00:07:32,440 Speaker 3: responsible officer of this government, and therefore I take full 114 00:07:32,480 --> 00:07:35,920 Speaker 3: responsibility for the failure of this invasion. He had come 115 00:07:35,920 --> 00:07:39,920 Speaker 3: into office with a seventy two percent approval rating. It 116 00:07:40,040 --> 00:07:43,239 Speaker 3: jumped almost ten points up to eighty three percent because 117 00:07:43,280 --> 00:07:48,200 Speaker 3: he took responsibility. So sometimes those consequential first hundred days 118 00:07:48,520 --> 00:07:51,280 Speaker 3: are not so much about what's happening with Congress. But 119 00:07:51,360 --> 00:07:54,480 Speaker 3: I would say, what's happening in the world, what's happening 120 00:07:54,520 --> 00:07:58,120 Speaker 3: at home and the economy and foreign affairs, in wartime 121 00:07:58,200 --> 00:08:02,920 Speaker 3: situation and doreidence make a correct decision or in we 122 00:08:02,960 --> 00:08:05,840 Speaker 3: look back in history, is at a fiasco. 123 00:08:05,760 --> 00:08:08,640 Speaker 2: Bubba looking back through history? Is there a correlation in 124 00:08:08,680 --> 00:08:11,600 Speaker 2: general between how consequential the first hundred days is and 125 00:08:11,640 --> 00:08:14,040 Speaker 2: the rest of the four year term. I mean, they 126 00:08:14,240 --> 00:08:17,320 Speaker 2: might make mistakes, might not make mistakes. Style. As you said, 127 00:08:17,400 --> 00:08:20,280 Speaker 2: certainly we learn from but in general, if it's consequential 128 00:08:20,320 --> 00:08:22,280 Speaker 2: its first hundred days, does that mean something for the 129 00:08:22,320 --> 00:08:23,880 Speaker 2: rest or can it be very different? 130 00:08:24,920 --> 00:08:29,160 Speaker 3: Well, let's take FDR and also a president before this 131 00:08:29,320 --> 00:08:32,439 Speaker 3: modern concept of one hundred days the first hundred days, 132 00:08:32,640 --> 00:08:36,440 Speaker 3: and I'll take Lincoln and even George Washington. They are 133 00:08:36,520 --> 00:08:41,160 Speaker 3: always listed by scholars, political scientists, historians, is the greatest 134 00:08:41,200 --> 00:08:43,960 Speaker 3: presidents of the United States. If you have a good 135 00:08:44,000 --> 00:08:48,160 Speaker 3: first one hundred days, it's very unusual to have then 136 00:08:48,360 --> 00:08:52,679 Speaker 3: an absolutely catastrophic presidency. I would say in the case 137 00:08:52,720 --> 00:08:56,120 Speaker 3: of Donald Trump's second first one hundred days, and as 138 00:08:56,160 --> 00:08:58,640 Speaker 3: most people know who study history, he's only the second 139 00:08:58,640 --> 00:09:02,960 Speaker 3: president to have a sexecond non consecutive term. He's off 140 00:09:02,960 --> 00:09:08,280 Speaker 3: to a consequential start in disruption and somewhat chaos, both 141 00:09:08,400 --> 00:09:11,680 Speaker 3: in how the government is perceived by the people, but 142 00:09:11,840 --> 00:09:15,720 Speaker 3: also how the United States is perceived abroad, particularly with 143 00:09:15,800 --> 00:09:20,560 Speaker 3: issues of tariffs and alliances and NATO, etc. So we 144 00:09:20,679 --> 00:09:24,839 Speaker 3: don't know if this will port a successful presidency or 145 00:09:24,960 --> 00:09:29,120 Speaker 3: if this disruption and chaos of the government and of 146 00:09:29,160 --> 00:09:32,000 Speaker 3: our standing in the world could lead to failure. We'll 147 00:09:32,040 --> 00:09:36,480 Speaker 3: have to wait and see up next. 148 00:09:36,679 --> 00:09:39,719 Speaker 2: Every week seems to bring another story of a successful 149 00:09:39,720 --> 00:09:43,040 Speaker 2: company losing its way. But what about those that don't, 150 00:09:43,600 --> 00:09:46,000 Speaker 2: or that having strayed, find their way back to what 151 00:09:46,160 --> 00:09:48,600 Speaker 2: made them great to begin with. We look at the 152 00:09:48,640 --> 00:09:52,240 Speaker 2: Mars Company and Ennel, two major global companies, and what 153 00:09:52,360 --> 00:10:08,360 Speaker 2: they share in the way they do their business. This 154 00:10:08,440 --> 00:10:11,560 Speaker 2: is a story about heritage. How a company's heritage can 155 00:10:11,600 --> 00:10:15,000 Speaker 2: help it succeed, return it to success, or put it 156 00:10:15,040 --> 00:10:17,000 Speaker 2: at risk when it is left behind. 157 00:10:17,440 --> 00:10:23,600 Speaker 5: Without the unabsolute reputation, the safety and consistency, you simply 158 00:10:23,640 --> 00:10:24,400 Speaker 5: can't compete. 159 00:10:24,440 --> 00:10:28,360 Speaker 2: And that's why everybody's worried about Boeing. Boeing is just 160 00:10:28,400 --> 00:10:32,080 Speaker 2: the most recent and glaring example of a once great 161 00:10:32,120 --> 00:10:35,920 Speaker 2: company stumbling, in its case by losing its core edge 162 00:10:35,960 --> 00:10:36,760 Speaker 2: in engineering. 163 00:10:37,120 --> 00:10:40,240 Speaker 6: I'm an aerospace engineering Back in the day, I actually 164 00:10:40,240 --> 00:10:42,680 Speaker 6: worked for Boeing. That's where you went if you wanted 165 00:10:42,679 --> 00:10:44,640 Speaker 6: to work on airplanes. You couldn't go anyplace else, you 166 00:10:45,000 --> 00:10:47,360 Speaker 6: really couldn't. That's not the case today. 167 00:10:47,600 --> 00:10:51,400 Speaker 2: Ron Epstein is a former Boeing engineer who now covers 168 00:10:51,440 --> 00:10:55,400 Speaker 2: aerospace and defense for Bank of America. He watched as 169 00:10:55,440 --> 00:10:59,000 Speaker 2: his former employer lost its way It's far from the 170 00:10:59,040 --> 00:11:03,040 Speaker 2: only one, but there are also companies that over many years, 171 00:11:03,200 --> 00:11:07,079 Speaker 2: kept their momentum or even regained it after a stumble 172 00:11:07,200 --> 00:11:07,760 Speaker 2: or two. 173 00:11:08,120 --> 00:11:11,040 Speaker 7: IBM turns one hundred and fourteen this year, one hundred 174 00:11:11,080 --> 00:11:14,320 Speaker 7: and forty in the technology industry. Think about companies that 175 00:11:14,320 --> 00:11:17,560 Speaker 7: have lasted a century in the technology industry. They're hard 176 00:11:17,600 --> 00:11:20,240 Speaker 7: to find because of the nature of technology. 177 00:11:20,480 --> 00:11:24,480 Speaker 2: Sam Palmersano spent much of his career at IBM, rising 178 00:11:24,520 --> 00:11:28,960 Speaker 2: to become chairman and CEO. He attributes IBM's long term 179 00:11:28,960 --> 00:11:31,840 Speaker 2: success to a deep commitment to innovation. 180 00:11:32,520 --> 00:11:34,800 Speaker 7: The Watsons defined that it was about the future and 181 00:11:34,800 --> 00:11:37,800 Speaker 7: about innovation, and that that's where you should drive. You 182 00:11:37,840 --> 00:11:38,880 Speaker 7: should drive innovation. 183 00:11:39,960 --> 00:11:43,480 Speaker 2: The Business School at Yale University has created a program 184 00:11:43,520 --> 00:11:46,680 Speaker 2: to study what separates the companies that succeed over the 185 00:11:46,720 --> 00:11:50,480 Speaker 2: long term from those that don't. Some may find the 186 00:11:50,600 --> 00:11:54,080 Speaker 2: results surprising. They take us back to that notion that 187 00:11:54,120 --> 00:11:58,760 Speaker 2: has become known as stakeholder capitalism, although many of the 188 00:11:58,800 --> 00:12:01,320 Speaker 2: CEOs don't it new at all. 189 00:12:02,280 --> 00:12:06,040 Speaker 8: We've interviewed more than one hundred and seventy five chief 190 00:12:06,080 --> 00:12:11,000 Speaker 8: executive officers as to the practice of this concept of 191 00:12:11,000 --> 00:12:12,720 Speaker 8: stakeholder capitalism. 192 00:12:13,160 --> 00:12:16,920 Speaker 2: John Iwada spent thirty five years at IBM, where he 193 00:12:16,960 --> 00:12:21,480 Speaker 2: worked closely on innovation and strategy with Sam Palmasano. He 194 00:12:21,600 --> 00:12:25,079 Speaker 2: is now an Executive Fellow at the Yale School of Management. 195 00:12:25,760 --> 00:12:28,560 Speaker 8: One of the things we learned in these interviews is 196 00:12:28,600 --> 00:12:32,040 Speaker 8: that most of the CEOs felt this wasn't really a 197 00:12:32,080 --> 00:12:35,760 Speaker 8: departure or anything new, and some of them said, this 198 00:12:35,840 --> 00:12:39,000 Speaker 8: is sound business practice, or it's a return to sound 199 00:12:39,080 --> 00:12:43,520 Speaker 8: business practice, especially if you think about the long term. 200 00:12:43,800 --> 00:12:47,800 Speaker 8: Leading a corporation or an enterprise for the long term, 201 00:12:48,200 --> 00:12:52,640 Speaker 8: there are short term pressures or expectations that sometimes get 202 00:12:52,679 --> 00:12:56,120 Speaker 8: in the way of making investments or decisions that may 203 00:12:56,160 --> 00:13:00,080 Speaker 8: not pay off for many quarters or even years, so 204 00:13:00,120 --> 00:13:02,720 Speaker 8: you have to think about that. You may think about 205 00:13:02,840 --> 00:13:08,160 Speaker 8: non financial commitments to employees, to society, and those are 206 00:13:08,160 --> 00:13:12,320 Speaker 8: not standardized, those are not accepted measurements and metrics, and 207 00:13:12,360 --> 00:13:16,000 Speaker 8: so those are soft or squishy, and other factors that 208 00:13:16,120 --> 00:13:17,000 Speaker 8: come into play here. 209 00:13:17,840 --> 00:13:20,520 Speaker 2: I want to learn from his CEO interviews of the 210 00:13:20,640 --> 00:13:24,600 Speaker 2: challenges leaders face in trying to bring together disparate parts 211 00:13:24,600 --> 00:13:28,800 Speaker 2: of the company and disparate interested parties, and the key 212 00:13:28,920 --> 00:13:31,560 Speaker 2: role of purpose in weaving it all together. 213 00:13:32,320 --> 00:13:37,160 Speaker 8: CEOs like every executive comes up through a business or 214 00:13:37,200 --> 00:13:41,360 Speaker 8: through a professional career in a vertical finance or R 215 00:13:41,400 --> 00:13:44,840 Speaker 8: and D or sales, and when they get into the 216 00:13:44,880 --> 00:13:49,080 Speaker 8: CEO chair, as Sachia Nadella Microsoft said it some years 217 00:13:49,120 --> 00:13:52,280 Speaker 8: ago in an interview, is then you realize just how 218 00:13:52,360 --> 00:13:58,000 Speaker 8: multi constituent or how many stakeholders the enterprise actually has. 219 00:13:58,280 --> 00:14:01,280 Speaker 8: You have shareholdergy of government, of course, you have customers 220 00:14:01,280 --> 00:14:04,760 Speaker 8: and employees, you have suppliers, and you have to have 221 00:14:04,840 --> 00:14:09,600 Speaker 8: these relationships with all of these constituents. The question is 222 00:14:10,000 --> 00:14:13,400 Speaker 8: do you manage them piecemeal or do we think of 223 00:14:13,440 --> 00:14:18,480 Speaker 8: this more holistically. A lot of the CEOs described sometimes 224 00:14:18,520 --> 00:14:22,720 Speaker 8: they use air quotes, this management system almost an operating 225 00:14:22,760 --> 00:14:28,560 Speaker 8: system for the company that is based on common definitions 226 00:14:28,560 --> 00:14:31,520 Speaker 8: of the firm. Some of them say, there are three 227 00:14:31,600 --> 00:14:35,000 Speaker 8: questions that you have to ask and answer why, what 228 00:14:35,160 --> 00:14:37,920 Speaker 8: and how? Why do we exist? Which turns into the 229 00:14:37,960 --> 00:14:40,800 Speaker 8: purpose of the company. What do we do, which is 230 00:14:40,840 --> 00:14:44,400 Speaker 8: the strategy of the company? And how and that's the culture. 231 00:14:44,960 --> 00:14:46,240 Speaker 8: How are we going to show up? 232 00:14:47,040 --> 00:14:50,320 Speaker 2: A well known company that has put purpose and values 233 00:14:50,320 --> 00:14:53,360 Speaker 2: at the core of its operations since its founding is 234 00:14:53,400 --> 00:14:56,960 Speaker 2: the Mars company in business since nineteen eleven. 235 00:14:57,520 --> 00:15:00,600 Speaker 8: Mars is more than one hundred years old, very successful 236 00:15:00,640 --> 00:15:04,120 Speaker 8: for a long time, and as we began to talk 237 00:15:04,160 --> 00:15:08,120 Speaker 8: to management at Mars and members of the Mars family, 238 00:15:08,840 --> 00:15:11,440 Speaker 8: we learned that they were going through what we would 239 00:15:11,600 --> 00:15:15,920 Speaker 8: refer to as a founding moment. And why because for 240 00:15:16,080 --> 00:15:20,360 Speaker 8: much of Mars history, members of the Mars family led 241 00:15:20,400 --> 00:15:23,880 Speaker 8: the company and worked in the company. But the reality 242 00:15:23,920 --> 00:15:28,000 Speaker 8: today in the future is very few members of the 243 00:15:28,040 --> 00:15:31,320 Speaker 8: Mars family, perhaps no members of the Mars family will 244 00:15:31,320 --> 00:15:33,600 Speaker 8: be in management or even work in the company. 245 00:15:34,160 --> 00:15:38,080 Speaker 9: The principles and the values are at the heart of 246 00:15:38,200 --> 00:15:38,800 Speaker 9: who we are. 247 00:15:39,800 --> 00:15:44,040 Speaker 2: Victoria Mars is the great granddaughter of founder frank Seymars. 248 00:15:44,600 --> 00:15:47,080 Speaker 2: She has been on the board for nearly twenty years, 249 00:15:47,440 --> 00:15:48,760 Speaker 2: three of them as chair. 250 00:15:49,720 --> 00:15:55,440 Speaker 9: My grandfather had very strong principles and values, and these 251 00:15:55,440 --> 00:15:59,800 Speaker 9: principles and values I grew up with without actually no 252 00:16:00,440 --> 00:16:03,120 Speaker 9: that I was growing up with them. So when we 253 00:16:03,200 --> 00:16:07,160 Speaker 9: talk about the Mars principles, we're really talking about the 254 00:16:07,200 --> 00:16:11,520 Speaker 9: family values that have existed since the beginning. And as 255 00:16:11,560 --> 00:16:14,560 Speaker 9: the company got larger and it was more and more 256 00:16:14,600 --> 00:16:18,040 Speaker 9: difficult for the family, specifically at that point my father 257 00:16:18,120 --> 00:16:21,200 Speaker 9: and my uncle to be around all the associates. To 258 00:16:21,240 --> 00:16:23,160 Speaker 9: be able to talk about the values and to be 259 00:16:23,200 --> 00:16:26,560 Speaker 9: able to talk about how we do business, they decided 260 00:16:26,600 --> 00:16:29,520 Speaker 9: it was time to write them down. The five principles 261 00:16:29,640 --> 00:16:36,040 Speaker 9: that were actually written down and defined in the early eighties. Quality, responsibility, efficiency, 262 00:16:36,280 --> 00:16:40,520 Speaker 9: mutuality and freedom have been our principles since the beginning 263 00:16:41,400 --> 00:16:45,000 Speaker 9: and they are the foundation of everything we do within 264 00:16:45,080 --> 00:16:45,640 Speaker 9: the business. 265 00:16:47,440 --> 00:16:51,880 Speaker 2: Times change and businesses evolve, something the Mars Company has 266 00:16:51,960 --> 00:16:55,320 Speaker 2: certainly done. But as much as the Mars Principles may 267 00:16:55,360 --> 00:16:59,640 Speaker 2: be updated every few years, the fundamentals do not change. 268 00:17:00,120 --> 00:17:03,600 Speaker 9: So they haven't changed. They've just been updated to be relevant. 269 00:17:04,320 --> 00:17:07,840 Speaker 9: Management helps us and supports us and clearly obviously implements 270 00:17:07,880 --> 00:17:11,760 Speaker 9: them in our business. But any changes to them, any 271 00:17:11,840 --> 00:17:15,560 Speaker 9: tweaks to them, anything from the colors to the script 272 00:17:16,040 --> 00:17:18,800 Speaker 9: to the words, belongs to the family. 273 00:17:19,600 --> 00:17:22,919 Speaker 2: A company having principles is one thing. Putting them to 274 00:17:23,080 --> 00:17:27,119 Speaker 2: use in everyday decisions, not to mention big strategic decisions 275 00:17:27,600 --> 00:17:28,520 Speaker 2: is something else. 276 00:17:28,840 --> 00:17:33,040 Speaker 10: Entirely, it's not a checklist, but it comes up in 277 00:17:33,080 --> 00:17:36,000 Speaker 10: conversations when we make decisions, and I think that are 278 00:17:36,000 --> 00:17:40,040 Speaker 10: two things. One is this aligned with the purpose of 279 00:17:40,040 --> 00:17:43,160 Speaker 10: what we're trying to deliver here, whether it is overall 280 00:17:43,240 --> 00:17:45,720 Speaker 10: from Mars. You know, the kind of company that we 281 00:17:45,760 --> 00:17:48,399 Speaker 10: are trying to deliver today is well set up for 282 00:17:48,480 --> 00:17:49,720 Speaker 10: the world we want tomorrow. 283 00:17:50,359 --> 00:17:54,000 Speaker 2: Klass, our guard is the Mars Chief financial officer and 284 00:17:54,440 --> 00:17:57,320 Speaker 2: like all members of management, not a member of the 285 00:17:57,359 --> 00:17:58,480 Speaker 2: Mars family. 286 00:17:58,840 --> 00:18:02,280 Speaker 10: Five principles come up. Certainly as a fact check. You know, 287 00:18:02,720 --> 00:18:05,359 Speaker 10: this doesn't feel like in line with the five principles, 288 00:18:05,400 --> 00:18:07,879 Speaker 10: Well why not? And you know, and sometimes they're not 289 00:18:07,920 --> 00:18:11,800 Speaker 10: all equal in every decision. Are we really delivering quality? 290 00:18:11,920 --> 00:18:15,000 Speaker 10: Are we really directed by the consumer? Or is this 291 00:18:15,240 --> 00:18:19,600 Speaker 10: mutual to the stakeholders around us when we may make 292 00:18:19,640 --> 00:18:24,159 Speaker 10: decisions around renegotiating certain things or whatever. You know, are 293 00:18:24,240 --> 00:18:26,000 Speaker 10: we true to the stakeholders around us? 294 00:18:26,720 --> 00:18:30,240 Speaker 2: The Mars principles underlie the values of the family, but 295 00:18:30,320 --> 00:18:33,680 Speaker 2: the family also believes it makes the company more successful. 296 00:18:33,920 --> 00:18:39,600 Speaker 9: Overall, the principles and the values help us be proud 297 00:18:40,000 --> 00:18:44,760 Speaker 9: of this company. We do believe that utilizing these principles 298 00:18:45,280 --> 00:18:49,080 Speaker 9: helps our associates make the right decision, the decisions that 299 00:18:49,160 --> 00:18:52,040 Speaker 9: create the concept of a win win. We are all 300 00:18:52,080 --> 00:18:56,120 Speaker 9: going to succeed together versus let me win and let 301 00:18:56,119 --> 00:18:59,119 Speaker 9: me see you fail. So I really do believe that 302 00:18:59,320 --> 00:19:02,960 Speaker 9: utilizing these principles has helped us be successful in business. 303 00:19:03,600 --> 00:19:04,439 Speaker 1: It helps us. 304 00:19:04,440 --> 00:19:09,200 Speaker 9: Recruit good people and keep good people. It helps us 305 00:19:09,240 --> 00:19:12,600 Speaker 9: earn trust with government, It helps us earn trust with 306 00:19:12,680 --> 00:19:15,720 Speaker 9: our associates, It helps us earn trust with communities where 307 00:19:15,720 --> 00:19:19,159 Speaker 9: we work. So to us, yes, it does make a 308 00:19:19,200 --> 00:19:21,719 Speaker 9: difference and helps us be successful. 309 00:19:22,880 --> 00:19:25,840 Speaker 2: The Mars Company is at its base a family company, 310 00:19:26,160 --> 00:19:30,760 Speaker 2: a global, highly successful one, but nonetheless a family endeavor, 311 00:19:31,240 --> 00:19:34,359 Speaker 2: which may give it advantages in pursuing its principle based 312 00:19:34,440 --> 00:19:38,200 Speaker 2: business strategy, but they can also come with some challenges. 313 00:19:38,680 --> 00:19:42,080 Speaker 10: There no doubt many public companies with a long history 314 00:19:42,080 --> 00:19:45,240 Speaker 10: that also has a very great story to tell. We 315 00:19:45,280 --> 00:19:48,760 Speaker 10: believe we have our own story and our unique vision 316 00:19:48,840 --> 00:19:53,560 Speaker 10: for the future, while respecting that long term success is 317 00:19:53,600 --> 00:19:57,920 Speaker 10: also built on continuing to have healthy short term performance, 318 00:19:57,920 --> 00:19:59,960 Speaker 10: if you want to call it. That is an ingredi 319 00:20:00,119 --> 00:20:03,040 Speaker 10: and that live well in our context with the way 320 00:20:03,080 --> 00:20:09,080 Speaker 10: management is set up, with the commitment also of our 321 00:20:09,200 --> 00:20:13,159 Speaker 10: owners to take a long term view and you know, 322 00:20:13,320 --> 00:20:17,320 Speaker 10: leave a lot of capital for reinvestment in the company 323 00:20:17,440 --> 00:20:22,320 Speaker 10: and set some objectives both financial and non financial objectives 324 00:20:22,400 --> 00:20:25,359 Speaker 10: that really enables us to do the things that we're doing. 325 00:20:26,400 --> 00:20:28,679 Speaker 9: When people used to ask me and say, you know, 326 00:20:28,760 --> 00:20:33,000 Speaker 9: what is your biggest fear, what is your biggest worry, 327 00:20:33,280 --> 00:20:36,480 Speaker 9: My response usually is it's not the business. The business 328 00:20:36,520 --> 00:20:43,280 Speaker 9: really can function very well on its own. It's managing 329 00:20:43,320 --> 00:20:47,280 Speaker 9: a family. So part of being able to be a 330 00:20:47,320 --> 00:20:51,840 Speaker 9: family business, to continue to be a family business requires 331 00:20:52,520 --> 00:20:58,040 Speaker 9: a lot of energy and effort into working with the family. 332 00:20:58,320 --> 00:21:01,480 Speaker 9: We have been having annual Fai family meetings for over 333 00:21:01,560 --> 00:21:06,720 Speaker 9: twenty years. Our family is continuously there because we're connected 334 00:21:06,760 --> 00:21:09,840 Speaker 9: to this business. We're joined at the hit by this business. 335 00:21:10,240 --> 00:21:14,520 Speaker 9: So having the family functioning well and having the family 336 00:21:14,560 --> 00:21:18,040 Speaker 9: and being able to manage through conflicts that come up, 337 00:21:18,080 --> 00:21:20,960 Speaker 9: which of course will come up in every family, and 338 00:21:21,080 --> 00:21:24,880 Speaker 9: being able to work towards a common outcome and common 339 00:21:24,960 --> 00:21:27,159 Speaker 9: goals takes a lot of work. 340 00:21:28,880 --> 00:21:31,679 Speaker 2: The Mars family continues to work hard at pursuing the 341 00:21:31,720 --> 00:21:34,320 Speaker 2: goals and values it has established since the beginning of 342 00:21:34,359 --> 00:21:37,520 Speaker 2: the last century. But could a similar approach succeed in 343 00:21:37,560 --> 00:21:40,639 Speaker 2: a publicly traded company in a very different business. And 344 00:21:40,680 --> 00:21:43,439 Speaker 2: that's where we turn. Next to the second biggest power 345 00:21:43,440 --> 00:21:47,320 Speaker 2: company in the world and how it moved forward by 346 00:21:47,359 --> 00:22:01,399 Speaker 2: returning to its basic purpose. Mars Company has enjoyed a 347 00:22:01,520 --> 00:22:05,040 Speaker 2: very long and successful history as a family company, pursuing 348 00:22:05,080 --> 00:22:08,600 Speaker 2: the family's values even as it expanded around the world 349 00:22:08,680 --> 00:22:11,600 Speaker 2: and into new businesses. But the Yale Project learned from 350 00:22:11,640 --> 00:22:14,560 Speaker 2: its one hundred and seventy five CEO interviews that Mars 351 00:22:14,600 --> 00:22:18,400 Speaker 2: shares some approaches with large publicly traded companies in very 352 00:22:18,400 --> 00:22:21,960 Speaker 2: different industries. One of them is the Italian power giant Ennel, 353 00:22:22,240 --> 00:22:25,280 Speaker 2: whose CEO redirected it for a new age by taking 354 00:22:25,320 --> 00:22:30,840 Speaker 2: it back to its simple roots. Like other CEOs looking 355 00:22:30,840 --> 00:22:34,199 Speaker 2: to move their companies forward, Staracci studied the future of 356 00:22:34,320 --> 00:22:38,240 Speaker 2: his business, and, like so many others, concluded it laid 357 00:22:38,280 --> 00:22:42,000 Speaker 2: in technological changes in the very business of power. 358 00:22:42,119 --> 00:22:45,040 Speaker 4: The company was already a pretty large revenues big and 359 00:22:45,119 --> 00:22:49,200 Speaker 4: it was heavily indebted because of the expansion we had 360 00:22:49,240 --> 00:22:52,639 Speaker 4: in the preceding years. It had let's say, a cash 361 00:22:52,840 --> 00:22:57,400 Speaker 4: conversion problem, so there was a lot of revenues that 362 00:22:57,520 --> 00:23:02,080 Speaker 4: didn't really come up with a lot of cash, and 363 00:23:02,359 --> 00:23:06,960 Speaker 4: growth was a little bit stalling. It was a company 364 00:23:06,960 --> 00:23:12,040 Speaker 4: that had to deal mostly with managing that given the 365 00:23:12,080 --> 00:23:16,919 Speaker 4: size it had. The issue was we needed to restart growth. 366 00:23:17,480 --> 00:23:21,640 Speaker 4: But more than that, we needed to, let's say, give 367 00:23:21,760 --> 00:23:27,800 Speaker 4: clarity about the sustainability of future revenues to the debt markets. 368 00:23:27,840 --> 00:23:31,200 Speaker 4: You know that that in itself, you know, the size 369 00:23:31,240 --> 00:23:33,320 Speaker 4: of a debt is a function of the size of 370 00:23:33,359 --> 00:23:35,520 Speaker 4: the revenues that you can generate to serve the debt. 371 00:23:35,720 --> 00:23:37,959 Speaker 4: So there was a little bit of an issue at 372 00:23:38,240 --> 00:23:40,919 Speaker 4: what was the future of the company going to be? 373 00:23:41,320 --> 00:23:45,680 Speaker 4: So we had to actually decide what was the trajectory 374 00:23:45,720 --> 00:23:49,240 Speaker 4: of the company, sell it to our shareholders and also 375 00:23:49,280 --> 00:23:52,359 Speaker 4: to of course the whole market in a way that 376 00:23:52,400 --> 00:23:57,280 Speaker 4: it was understandable, solid, robust enough to withstand potential shocks, 377 00:23:57,760 --> 00:24:02,159 Speaker 4: and of course more generative of cash flow. Basically, that 378 00:24:02,359 --> 00:24:04,479 Speaker 4: was the issue we had to deal with, and that 379 00:24:04,960 --> 00:24:07,480 Speaker 4: clearly had to do with the time and how much 380 00:24:07,520 --> 00:24:10,720 Speaker 4: time did we have to do that, and also what 381 00:24:10,800 --> 00:24:13,879 Speaker 4: kind of pockets of value creation we have left We 382 00:24:13,960 --> 00:24:16,720 Speaker 4: had in the company that were not didn't we didn't 383 00:24:16,800 --> 00:24:18,560 Speaker 4: really tap well enough. 384 00:24:18,880 --> 00:24:22,879 Speaker 2: As you determine the trajectory for growth and for a 385 00:24:23,000 --> 00:24:26,000 Speaker 2: revenue going forward, how did you find the trajectory that 386 00:24:26,040 --> 00:24:26,760 Speaker 2: you settled upon. 387 00:24:27,080 --> 00:24:32,800 Speaker 4: Basically, we said, where is the technology going? You know, 388 00:24:33,040 --> 00:24:37,399 Speaker 4: because you can you can ignore technology for a while, 389 00:24:37,800 --> 00:24:39,560 Speaker 4: It's okay, but at the end of the day, it 390 00:24:39,640 --> 00:24:42,840 Speaker 4: always catch up with you. So where is the utility 391 00:24:42,880 --> 00:24:46,000 Speaker 4: sector and the industry that is with it, where is 392 00:24:46,040 --> 00:24:49,679 Speaker 4: it going? And what forces are changing these technologies? And 393 00:24:49,720 --> 00:24:52,719 Speaker 4: we saw at that time we had seen it before 394 00:24:52,760 --> 00:24:56,040 Speaker 4: with any green power. I should say that there was 395 00:24:56,560 --> 00:25:01,040 Speaker 4: a major change in the technology of generating electricity, namely 396 00:25:01,119 --> 00:25:05,680 Speaker 4: that renewables were becoming competitive, had become already by twenty fourteen, 397 00:25:05,720 --> 00:25:10,719 Speaker 4: competitive with thermageneration by enlarge in many parts of the world, 398 00:25:11,400 --> 00:25:15,000 Speaker 4: and we were not active enough in that space. And 399 00:25:15,119 --> 00:25:19,600 Speaker 4: that space was going to be where value was going 400 00:25:19,640 --> 00:25:22,480 Speaker 4: to be created in a major way in the next 401 00:25:22,520 --> 00:25:26,760 Speaker 4: few years. So we said, how do we catch this train, 402 00:25:26,920 --> 00:25:30,160 Speaker 4: how do we jump on it? And what can we do? 403 00:25:30,359 --> 00:25:33,080 Speaker 2: And was that driven by a revenue stream that you 404 00:25:33,160 --> 00:25:35,320 Speaker 2: saw out there because of technological change? 405 00:25:35,600 --> 00:25:39,920 Speaker 4: I think the revolutionary thing about renewables at that time 406 00:25:40,040 --> 00:25:43,120 Speaker 4: the people didn't understand. I think we were maybe the first, 407 00:25:44,359 --> 00:25:48,000 Speaker 4: the first that understood it consciously and nothing consciously, you know, 408 00:25:48,119 --> 00:25:51,439 Speaker 4: we actually got and studied and really came with a 409 00:25:51,480 --> 00:25:56,919 Speaker 4: conclusion that shifting our generation from thermogeneration to renewables, we 410 00:25:57,000 --> 00:26:02,240 Speaker 4: would increase double the abita margin, so the amount of 411 00:26:02,280 --> 00:26:05,080 Speaker 4: money we would make with the same kilobataur And that 412 00:26:05,240 --> 00:26:08,560 Speaker 4: was a major aha moment, if you want, We said, okay, well, 413 00:26:08,640 --> 00:26:11,480 Speaker 4: let let's do it, because there's no time to get 414 00:26:11,520 --> 00:26:13,640 Speaker 4: to be lost here. And to do that, we had 415 00:26:13,680 --> 00:26:19,040 Speaker 4: to basically completely change our operating model at developing plans 416 00:26:19,080 --> 00:26:21,960 Speaker 4: and at thinking about generation going forward. 417 00:26:23,040 --> 00:26:27,359 Speaker 2: For Staracci, identifying renewables as the growth opportunity for Anna 418 00:26:27,600 --> 00:26:30,359 Speaker 2: was the first step. But to get there with the 419 00:26:30,400 --> 00:26:34,720 Speaker 2: growth it promised required the company to move fast, faster 420 00:26:35,160 --> 00:26:37,080 Speaker 2: than it had ever done in the past. 421 00:26:37,520 --> 00:26:40,679 Speaker 4: Imagine, this is an industry that worked before with a 422 00:26:40,720 --> 00:26:43,560 Speaker 4: time horizon of five to ten years. So you started 423 00:26:43,800 --> 00:26:46,879 Speaker 4: investing in something and that whatever it was a power 424 00:26:46,880 --> 00:26:50,200 Speaker 4: plant or anything else, it would start generating revenues five 425 00:26:50,280 --> 00:26:53,199 Speaker 4: or ten years after. And we said we shortened that 426 00:26:53,240 --> 00:26:56,800 Speaker 4: to three year maximum. Okay. That was a major shock 427 00:26:57,760 --> 00:27:01,479 Speaker 4: for most people and those that were impact they were 428 00:27:01,640 --> 00:27:05,600 Speaker 4: basically the development people, you know, and we said, scrap 429 00:27:05,680 --> 00:27:08,560 Speaker 4: all the stuff that does not stay in this three 430 00:27:08,640 --> 00:27:12,280 Speaker 4: year time horizon, and that accelerated a lot dur the 431 00:27:12,280 --> 00:27:15,320 Speaker 4: circulation of the cabinet I mean Capita started working a 432 00:27:15,359 --> 00:27:18,840 Speaker 4: lot earlier than before, and that gave us the momentum 433 00:27:18,840 --> 00:27:21,520 Speaker 4: we needed to really kick start the whole thing. I 434 00:27:21,560 --> 00:27:26,919 Speaker 4: should say it took six months to explain over and 435 00:27:26,960 --> 00:27:30,679 Speaker 4: over more than one time this logic, but after that 436 00:27:30,800 --> 00:27:34,280 Speaker 4: everybody got it, and I would say, in a few 437 00:27:34,359 --> 00:27:37,959 Speaker 4: years we were working at two years not three, so 438 00:27:38,280 --> 00:27:43,280 Speaker 4: with further strength shortened that time. That was a major change. 439 00:27:43,440 --> 00:27:47,160 Speaker 2: After some initial resistance, and all employees embraced the new 440 00:27:47,200 --> 00:27:51,400 Speaker 2: direction because of the opportunities it presented them. But ironically, 441 00:27:51,640 --> 00:27:55,760 Speaker 2: Storacci sees this new direction as really a return to 442 00:27:55,800 --> 00:27:58,520 Speaker 2: the basics of what gave rise to the company in 443 00:27:58,560 --> 00:27:59,359 Speaker 2: the first place. 444 00:28:00,040 --> 00:28:03,160 Speaker 4: The pushback was basically a different one was the fact 445 00:28:03,160 --> 00:28:07,120 Speaker 4: that we had, say, a very limited number of very 446 00:28:07,200 --> 00:28:11,600 Speaker 4: large investments with which we thought we would continue to 447 00:28:11,600 --> 00:28:16,199 Speaker 4: grow the company, and applying these three years' role, we 448 00:28:16,280 --> 00:28:19,880 Speaker 4: would cut the investment size a lot. So the renewable 449 00:28:19,960 --> 00:28:24,720 Speaker 4: energy projects had smaller, much smaller sizes. So people said, 450 00:28:24,800 --> 00:28:28,240 Speaker 4: how can we grow because this project are so small, 451 00:28:28,720 --> 00:28:31,800 Speaker 4: And the answer we gave them is, well, you have 452 00:28:31,880 --> 00:28:35,440 Speaker 4: to multiply the number of projects. So instead of having 453 00:28:35,600 --> 00:28:39,040 Speaker 4: say twenty projects, you're going to have two hundred or 454 00:28:39,040 --> 00:28:44,200 Speaker 4: maybe four hundred, and that was a major shock because 455 00:28:44,440 --> 00:28:47,480 Speaker 4: to manage two or three hundred projects at the same 456 00:28:47,520 --> 00:28:51,000 Speaker 4: time was something a company had never done before. I 457 00:28:51,000 --> 00:28:53,320 Speaker 4: think at the end it was exciting for people. They 458 00:28:53,360 --> 00:28:56,600 Speaker 4: needed something and they loved at the fact that they 459 00:28:56,600 --> 00:29:00,920 Speaker 4: could go at it numerous times, many more times than 460 00:29:00,960 --> 00:29:01,880 Speaker 4: they ever dreamed. 461 00:29:02,040 --> 00:29:05,840 Speaker 2: And every corporation has a culture. Did the culture change 462 00:29:06,320 --> 00:29:07,280 Speaker 2: under your leadership? 463 00:29:07,440 --> 00:29:10,400 Speaker 4: No, it did not. Actually, what happened is that we 464 00:29:10,800 --> 00:29:16,120 Speaker 4: needed to declutter the cultural space in a way. So 465 00:29:17,000 --> 00:29:22,200 Speaker 4: you know, utilities have a very deep culture and very 466 00:29:22,240 --> 00:29:26,280 Speaker 4: simple one, all of them. I mean, they're all the same. 467 00:29:27,480 --> 00:29:30,480 Speaker 4: You know, the semantics are important. A utility is useful 468 00:29:30,520 --> 00:29:33,840 Speaker 4: to people. That's why it exists. And most of the 469 00:29:33,960 --> 00:29:38,920 Speaker 4: utilities were formed in the past to electrify a space 470 00:29:38,960 --> 00:29:43,000 Speaker 4: that didn't have electricity, so people got pride in bringing 471 00:29:43,120 --> 00:29:46,680 Speaker 4: light to places that didn't have it. That is, the 472 00:29:46,720 --> 00:29:51,040 Speaker 4: culture of utility is useful to people, to people or businesses, 473 00:29:51,080 --> 00:29:55,560 Speaker 4: but in a way to society. The rest of the 474 00:29:55,600 --> 00:30:01,240 Speaker 4: stuff that over the decades were thrown at utilities is noise. 475 00:30:02,000 --> 00:30:05,440 Speaker 4: So what we had to do is declutter all this noise, 476 00:30:05,680 --> 00:30:09,160 Speaker 4: throw it away and say, guys, we are here for 477 00:30:09,320 --> 00:30:13,760 Speaker 4: one very simple purpose or not. And everybody agreed to that, 478 00:30:14,160 --> 00:30:18,960 Speaker 4: and that, I can tell you was surprisingly identical across geographies. 479 00:30:19,280 --> 00:30:22,600 Speaker 4: There was zero difference from Russia to the US, from 480 00:30:22,680 --> 00:30:26,960 Speaker 4: Latin America to Africa, including Europe, it was exactly the 481 00:30:27,040 --> 00:30:31,480 Speaker 4: same feedback. Everybody said, that's us exactly we want this, 482 00:30:32,080 --> 00:30:34,560 Speaker 4: So it was super easy. I just had to eliminate 483 00:30:34,600 --> 00:30:39,400 Speaker 4: a lot of say, substrata and stuff that were thrown 484 00:30:39,400 --> 00:30:42,000 Speaker 4: out at the utility over the years. 485 00:30:42,200 --> 00:30:44,960 Speaker 2: So in a sense, you were not fighting with your heritage, 486 00:30:45,000 --> 00:30:47,080 Speaker 2: you were returning to it exactly. 487 00:30:47,240 --> 00:30:49,040 Speaker 4: We had to go back to it. You know, we 488 00:30:49,080 --> 00:30:52,520 Speaker 4: had a purpose statement and that was like five sentences 489 00:30:52,560 --> 00:30:55,680 Speaker 4: glued together and you can read through them. Who wanted 490 00:30:55,680 --> 00:30:58,880 Speaker 4: to add something and nobody said no so much so 491 00:30:58,960 --> 00:31:01,920 Speaker 4: it was a super comp stuff and we just said, 492 00:31:02,000 --> 00:31:04,960 Speaker 4: you know, this doesn't matter. What are we for here? 493 00:31:05,040 --> 00:31:08,200 Speaker 4: I mean, we are useful to society, that's our purpose. 494 00:31:08,600 --> 00:31:12,400 Speaker 4: So we created a very nice purpose line that was 495 00:31:12,440 --> 00:31:17,280 Speaker 4: a cent open power. We empower sustainable progress, that's it. 496 00:31:18,080 --> 00:31:23,760 Speaker 4: And everybody immediately identified in that. So we didn't really 497 00:31:23,880 --> 00:31:26,280 Speaker 4: have to invent anything. We had to remove stuff. 498 00:31:26,880 --> 00:31:31,880 Speaker 2: The term stakeholder capitalism has become somewhat controversial, a potential 499 00:31:31,920 --> 00:31:35,120 Speaker 2: distraction from the basics of running a for profit business. 500 00:31:35,880 --> 00:31:39,040 Speaker 2: But whether you're a global power like no or a 501 00:31:39,080 --> 00:31:42,760 Speaker 2: global family business like Mars, those who actually run the 502 00:31:42,760 --> 00:31:46,840 Speaker 2: businesses find it to be pretty basic, and even some 503 00:31:46,920 --> 00:31:50,719 Speaker 2: of the most troubled businesses are embracing some form of 504 00:31:50,720 --> 00:31:54,800 Speaker 2: this stakeholder capitalism, as the relatively new CEO of Boeing, 505 00:31:55,040 --> 00:31:58,520 Speaker 2: Kelly Ortwerg, recently told Congress. 506 00:31:58,520 --> 00:32:03,040 Speaker 5: Boeing made serious steps in recent years, and it's unacceptable. 507 00:32:03,360 --> 00:32:07,560 Speaker 5: In response, we've made sweeping changes to the people, processes, 508 00:32:07,760 --> 00:32:11,959 Speaker 5: and overall structure of our company. While there's still work ahead, 509 00:32:12,360 --> 00:32:16,040 Speaker 5: these profound changes are underpinned by deep commitment from all 510 00:32:16,080 --> 00:32:18,960 Speaker 5: of us to the safety of our products and services. 511 00:32:20,920 --> 00:32:22,720 Speaker 2: That does it for us. Here at Wall Street Week, 512 00:32:22,800 --> 00:32:25,640 Speaker 2: I'm David Weston. This is Bloomberg. See you next week 513 00:32:25,680 --> 00:32:39,880 Speaker 2: for more stories of capitalism.