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Speaker 1: This is a Bloomberg Business Flash, and I'm Karen Moscow.
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Speaker 1: r i A dot net. U s stocks are falling
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Speaker 1: five hundred slipping from a ten month high amid speculation
Speaker 1: equities may have run too far, too fast given the
Speaker 1: lackluster prospects for global growth. We check the markets every
Speaker 1: fifteen minutes throughout the trading day on Bloomberg, and the
Speaker 1: SNP five hundred is down four tenths per cent or
Speaker 1: nine points to one ten. Dow Jones Industrial Average down
Speaker 1: three tenths per cent or sixty points is seventeen thousand,
Speaker 1: nine hundred forty four. Then as d ACT down four
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Speaker 1: year Treasury up ten thirty seconds, the yield one point
Speaker 1: six six percent. The yield on the two year point
Speaker 1: seven six percent. Now I'm excrude oil down one point
Speaker 1: four per cent or seventy two cents to fifty dollars
Speaker 1: fifty two cents of barrel comes. Gold is up three
Speaker 1: tenths per cent or four dollars ten cents to twelve
Speaker 1: sixty six forty ounce the euro a dollar thirteen twenty
Speaker 1: six the yen at one oh six point for eight.
Speaker 1: Household confidence increased for a second week, reaching the highest
Speaker 1: level since early April, as Americans felt better about the
Speaker 1: economy and the buying climate. According to the weekly Bloomberg
Speaker 1: Consumer Comfort Index, consumer comfort gage rose to forty three
Speaker 1: point five at the period ending June five, from forty
Speaker 1: three point two in the prior week, and Restoration Hardware
Speaker 1: Holdings is down nine this morning after the Upscale furniture
Speaker 1: chain posted a surprise loss and cut its annual earnings forecast.
Speaker 1: That's a Bloomberg business flash. Tom and Mike Karen, thanks
Speaker 1: so much. Michael. We're talking with David Wilson earlier about
Speaker 1: jam Smucker they make. It is just you know, we
Speaker 1: know the jams they make. Jiff peanut butter founded in
Speaker 1: nineteen fifty eight. They acquired it in two thousand two,
Speaker 1: what is it, fourteen years ago. They do car Nation,
Speaker 1: They do Smuckers. Of course our W Knudson, do you
Speaker 1: want to make fifteen percent per year total return for
Speaker 1: the last decade with a stunning Dana her like persistency
Speaker 1: that is JM. Smucker and you and you're earning stick
Speaker 1: to ther and yes. And I would suggest that it
Speaker 1: is out of Ohio a culture that that we should
Speaker 1: not make light of. A culture of a company matters, right. Uh,
Speaker 1: speaking of that, there's a good sigui, as you like
Speaker 1: to say to our next guest. Um, I don't know
Speaker 1: what you're You're performance review is always upstandingly exceptional. But um,
Speaker 1: there is a school of thought that seems to be
Speaker 1: growing these days. G one of the the companies that is
Speaker 1: looking at scrapping traditional performance reviews and finding ways of
Speaker 1: doing things. Um, we called it everyone culture becoming a
Speaker 1: deliberately developmental organization looks at this. It's written by Howard's
Speaker 1: Robert Keegan and Lisa Lascout Leahy, and we welcome Professor
Speaker 1: Keegan to the program. And I want to get to this.
Speaker 1: There's a The book is case study, no surprise from
Speaker 1: but I want and I want to get to one
Speaker 1: particular case. But first let me ask you to define
Speaker 1: a deliberately developmental organization and what kind of change you're
Speaker 1: suggesting might be useful, Sure, the good morning. A deliberately
Speaker 1: developmental organization, which is kind of a mouthful, so we
Speaker 1: call it a d d O is a company that
Speaker 1: has a culture. If you so valued developing the capabilities
Speaker 1: of your people that you would want to create a
Speaker 1: culture that would be the world's greatest incubator for developing talent,
Speaker 1: that's what a d d O is. We think it's
Speaker 1: a kind of a company that can form to what
Speaker 1: we've learned at the end of the twentieth in the
Speaker 1: beginning of the twenty first century about adult development. So
Speaker 1: a DdO first of all, recognizes it. In a normal organization,
Speaker 1: everyone is doing a second job that nobody's paying them for,
Speaker 1: and that second job is basically covering their rear ends,
Speaker 1: looking good, managing other people's favorable impressions of them. And
Speaker 1: we think this is an enormous waste of energy everybody's
Speaker 1: doing getting paid full time money for doing part time work.
Speaker 1: Imagine if you could recapture some of that energy, bring
Speaker 1: it right into the company itself. Imagine if you were
Speaker 1: expected to manifest your strengths but also manifest your weaknesses,
Speaker 1: bring them out into the light of day so that
Speaker 1: we can build supports around you so that you can
Speaker 1: overcome them. That's a deliberately developmental organization. Well, one of
Speaker 1: the companies that you choose to study embraces that wholeheartedly
Speaker 1: and has for years. Our good friend Ray Dalio and
Speaker 1: the folks at Bridgewater. What did you find when you
Speaker 1: look at them? I mean, everybody knows that public criticism
Speaker 1: of others work is part of the culture there. Yeah, well,
Speaker 1: I think I think Bridgewater and the other companies that
Speaker 1: Decuri in the next jump that we study in the
Speaker 1: book and everyone culture are just some of the most
Speaker 1: interesting companies on Earth. I mean, if you look at
Speaker 1: recent studies about millennials who will soon be the majority
Speaker 1: of the workforce, one of the things they most want,
Speaker 1: you know, is more frequent feedback. At Bridgewater, if you
Speaker 1: have three or more people in a meeting, uh, they're
Speaker 1: all plugged into their iPads and they're not just evaluating
Speaker 1: each other at the end of the meeting, they are
Speaker 1: giving each other a doct as it is, like votes
Speaker 1: on a one to ten scale kind of how you're doing.
Speaker 1: And the feedback is coming in continuously. And when people
Speaker 1: first hear this, they think, well, this would be kind
Speaker 1: of overwhelming and intimidating. But the key thing these people
Speaker 1: are onto is that most people are taking a kind
Speaker 1: of performance attitude toward work. So it's a performance and
Speaker 1: you get you're getting a review, you're holding your breath
Speaker 1: and you're hoping you don't fail. But these companies shifted
Speaker 1: all to a kind of a practice orientation. We hired
Speaker 1: you not because you're perfect, but because we think you're good,
Speaker 1: and we think you know, you can learn kind of
Speaker 1: fail frequently, fail forward, fail fast, and that's how you'll learn. Um,
Speaker 1: I don't tell m wants to jump in, but let
Speaker 1: me just ask one more question about that. How do
Speaker 1: you tie the success and of Bridgewater, and of course
Speaker 1: it's pretty much the most successful hedge fund out there
Speaker 1: to this kind of organizational culture and separate out the
Speaker 1: fact that maybe Ray Dalio is just a really good
Speaker 1: stock pick. Yeah, this is our our interest to I mean,
Speaker 1: clearly they're successful, but we wanted to know, you know,
Speaker 1: is your success in your culture just coincident? You know?
Speaker 1: And every one of these companies interestingly made the case
Speaker 1: that they thought their culture was these single greatest contributor
Speaker 1: you know, to their success. So you know, you ask Bridgewater,
Speaker 1: why were you one of the few organizations on Earth,
Speaker 1: you know that anticipated the financial crisis? And it's it's
Speaker 1: to us. It became a pretty convincing argument that when
Speaker 1: you're continuously kind of holding things in doubt, asking hard questions,
Speaker 1: seeking out weaknesses, not to you know, humiliate people, but
Speaker 1: to help people be stronger and help your analyzes be stronger,
Speaker 1: anticipating all the different possibilities, even the things that would
Speaker 1: be most inconvenient. This is a kind of way of
Speaker 1: thinking that makes you not just help people develop, but
Speaker 1: it makes the company smarter and more effective. Don Barton
Speaker 1: gives you a rave review. He talked to a lot
Speaker 1: of big publicly traded companies. Can your model, Mr Dalios model?
Speaker 1: If you will? Can it be transferred over to General Electric?
Speaker 1: And Jeff Emil get anything out of your book? And
Speaker 1: everyone culture well, we think so, I mean we we
Speaker 1: we can't. It's true that all three companies are you know,
Speaker 1: between the two hundred and maybe fifteen people, can it be?
Speaker 1: Can it be transferred over to JP Morgan? Yes? We
Speaker 1: think The answer is yes, we we are working actually
Speaker 1: right now with a hundred thousand person uh company. We're
Speaker 1: using the new technologies to spread a lot of these practices.
Speaker 1: I think it's a matter you know. It starts at
Speaker 1: the top. Just like everything else. The leader has to
Speaker 1: be willing to be vulnerable, has to be a mistake
Speaker 1: maker too frequently when I when I look at this
Speaker 1: in the number one thing I see generationally as a
Speaker 1: young kids today are acutely aware within any system of labor.
Speaker 1: By young kids folks, I mean somebody under forty, they're
Speaker 1: they're acutely aware of labor misallocation, which is people at
Speaker 1: whatever level in the hierarchy aren't getting it done or
Speaker 1: are in the long job. Can you help a company
Speaker 1: on labor misallocation. It's interesting because they have a totally
Speaker 1: different view of what is a good job fit between
Speaker 1: a person and a role in a d d O.
Speaker 1: If you already have all the capabilities to fulfill the job,
Speaker 1: it's the wrong job for you because it has no
Speaker 1: stretch in it. A job should be like a tow
Speaker 1: rope in these companies, so you should be a bit
Speaker 1: over your head. There should be a little bit of
Speaker 1: this allocation at the beginning and then there should be
Speaker 1: supports built around you so that you can actually grow
Speaker 1: into the job. How do you respond? And I've seen
Speaker 1: this folks with various and Sunday offspring, where a younger
Speaker 1: employee is so valuable they can't move on to the
Speaker 1: next constructive challenge because they can't figure out who to
Speaker 1: replace that employee with. Yeah, I've seen in these organizations,
Speaker 1: you know where they will actually face in some cases
Speaker 1: that that's the case, and they will help that person
Speaker 1: get a job in another company. But you know, if
Speaker 1: if you go ahead you want no, I know, I
Speaker 1: just find that to be bordering on fantasy among the
Speaker 1: experience of various and Sundery offspring. I mean, I am
Speaker 1: the behavior I would suggest a professor, the behavior of
Speaker 1: many corporations is far away from an everyone culture. Do
Speaker 1: you agree or absolutely? I think a normal company is
Speaker 1: like I have a picture in my office I'm looking
Speaker 1: at right now. It's a nineteenth century surgical room. You
Speaker 1: got three doctors, you know, working very hard. They might
Speaker 1: even have the right diagnosis, but half the patients died.
Speaker 1: Why because they didn't have a germ theory. They didn't
Speaker 1: have any notion of infection. And I think today, the
Speaker 1: company is the normal company is operating, you know, like
Speaker 1: a nineteenth century surgery room. It isn't taking account of
Speaker 1: the of the germ theory, that is theory of the
Speaker 1: mind and adult development Professor Thank You, sou Robert Keagan,
Speaker 1: Lisa Lesca, Lady and everyone Culture. Don Barton suggests it
Speaker 1: is a must read. Shake up corporate foundations. Stocks negative
Speaker 1: forty four, the vics fourteen point six seven. Markets on
Speaker 1: the Move stayed with Bloomberg Radio throughout the day with
Speaker 1: more data checks Bloomberg Surveillance