WEBVTT - The Need for Entrepreneurial Leadership

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Jason Kelly on Bloomberg Radio. So tons to talk about

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<v Speaker 1>with our next guest, and he's kind enough to come

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<v Speaker 1>back and spend some time with us to talk about

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<v Speaker 1>today's environment, what's necessary from our global leaders um In

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<v Speaker 1>and out of the executive suite. Joe Peterson has written

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<v Speaker 1>a lot about leadership. He's the chairman of the Board

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<v Speaker 1>of Overseers at the Hoover Institution at Stanford, professor at

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<v Speaker 1>the Stanford Graduate School of Business, founder of Peterson Partners,

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<v Speaker 1>as well as a former chairman of the board at

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<v Speaker 1>jeff Blue Airways, and his latest book is Entrepreneurial Leadership,

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<v Speaker 1>The Art of Launching new ventures, inspiring others and running stuff.

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<v Speaker 1>He joins us on the phone from Park City, Utah, Joel,

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<v Speaker 1>it is nice to have you back here on Bloomberg Radio.

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<v Speaker 1>How are you great? Nice to do with you again, Carol, Well,

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<v Speaker 1>tell us a little bit, you know since we last talk. Um,

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<v Speaker 1>I do think we are looking to the nation's leaders,

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<v Speaker 1>the world leaders to kind of figure out our way

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<v Speaker 1>through this world and figuring out how do you keep

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<v Speaker 1>businesses going, how do you keep the economy going, how

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<v Speaker 1>do you keep the financial markets secure? How do you

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<v Speaker 1>see it? And how do you think the leaders are doing?

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<v Speaker 1>Who's doing well too well? I think a lot of

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<v Speaker 1>leaders are doing really well. We have a portfolio about

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<v Speaker 1>fifty companies and they're adapting to it. They're reconsidering, you know,

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<v Speaker 1>what is their covenant with their customers, what are the

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<v Speaker 1>hard things that they haven't done that they need to do,

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<v Speaker 1>and what ways can they build their business in this time?

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<v Speaker 1>There are opportunities that are coming to the four. People

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<v Speaker 1>are learning new ways of doing business, and I think

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<v Speaker 1>we're actually recovering quite nicely from the covid um prices.

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<v Speaker 1>And so what's what are the learnings that stick, Joel? Like,

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<v Speaker 1>what are the things that you know, we've sort of

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<v Speaker 1>learned in these remote working environments, in this zoom world

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<v Speaker 1>and the distance world that you know, you feel like

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<v Speaker 1>culturally or even in a day to day a setting

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<v Speaker 1>are going to remain well. I think we were probably

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<v Speaker 1>won't be taking trips across the country for a one

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<v Speaker 1>hour meeting anymore. I think we found but there are

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<v Speaker 1>a lot of things we can do on Zoom or

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<v Speaker 1>other of these kinds of programs that are actually quite effective.

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<v Speaker 1>So I think I think the travel and hospitality and

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<v Speaker 1>streets will come back, but they'll come back relatively slowly. Um.

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<v Speaker 1>I think we're finding that we missed people. I taught,

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<v Speaker 1>of course at Stanford in the spring, and uh, I

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<v Speaker 1>used to come out of class on a high. I

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<v Speaker 1>would I would rust me with my students. It was fun.

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<v Speaker 1>I would come out this time into a screen and

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<v Speaker 1>come away think how much longer people? I have to

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<v Speaker 1>do that again, you know? So, So I think we

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<v Speaker 1>really understand that we need to be around people. Yeah. Absolutely,

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<v Speaker 1>I think we are getting a little bit of a

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<v Speaker 1>warped sense of kind of our lives that we are

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<v Speaker 1>living it so much that things that we criticize our

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<v Speaker 1>kids for doing being so much in front of a screen.

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<v Speaker 1>We we have to to kind of keep things going.

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<v Speaker 1>I want to go back to your portfolio fifty companies.

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<v Speaker 1>Talk to us a little bit about them, the types

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<v Speaker 1>of companies, and you said that they're doing well. I

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<v Speaker 1>am just curious about, as a result of what we

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<v Speaker 1>are going through in the pandemic, are there some in

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<v Speaker 1>your portfolio that you're are like, this is going to

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<v Speaker 1>be a turning point for them. Uh, in terms of

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<v Speaker 1>maybe demand going forward. Well, you may have heard of

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<v Speaker 1>the company Franklin Covey. I've been on the board there

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<v Speaker 1>for about twenty nine years. It's a training company and

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<v Speaker 1>they thought for a while that they were going to

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<v Speaker 1>really have trouble because they do a lot of online

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<v Speaker 1>or not online, but in person training, and they converted

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<v Speaker 1>it over to all online and they're getting higher net

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<v Speaker 1>promoter scores. They provided a bunch of free materials to

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<v Speaker 1>schools that they work with and families. You know, people

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<v Speaker 1>are teaching their kids at home now need materials, so

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<v Speaker 1>they just for added it free to them. So they're

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<v Speaker 1>figuring out new ways to connect with customers. We've got

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<v Speaker 1>another one that's the robotics packaging company, you know, and

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<v Speaker 1>and with fulfillment what it is UH, you're finding that

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<v Speaker 1>they're being used a lot. They actually build packages around

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<v Speaker 1>the products so there's no air, there's no seal, there,

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<v Speaker 1>there's no peanut. They really create these very efficient so

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<v Speaker 1>it's called smart packaging for a green planet. And so

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<v Speaker 1>they've they've done well, So it really depends each one

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<v Speaker 1>is different. Another one called Kota Paxi UH has basically

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<v Speaker 1>given a lot of money to help people through this

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<v Speaker 1>COVID thing through sales of their product. So interesting. Well,

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<v Speaker 1>and I have to tell you, Jason, you know All

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<v Speaker 1>Birds is in their portfolio. Jason and I are both

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<v Speaker 1>fans Ums literally right now, And I have to say,

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<v Speaker 1>you go to you know I remember, yeah, you go

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<v Speaker 1>to their store in New York, and I mean it

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<v Speaker 1>was constantly packed with people buying not just one pair,

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<v Speaker 1>but usually multiple multiple pairs. How do you decide what

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<v Speaker 1>you're going to invest in? You know, I'm pretty old fashioned.

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<v Speaker 1>I'm probably the opposite of Warren Buffett. He always talks

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<v Speaker 1>about the business plan beats out the people. I invest

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<v Speaker 1>in people I find great entrepreneurs that I back them

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<v Speaker 1>and help them great businesses, so to me, I and

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<v Speaker 1>that's why our portfolio had in all of these different

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<v Speaker 1>kinds of things. That was the first investor in Bonobos.

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<v Speaker 1>You may have heard about business UM, and it's because

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<v Speaker 1>there was a couple of students in mine that I loved,

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<v Speaker 1>and you know, I just figured out how to how

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<v Speaker 1>to help them get business. Still and what is the UM?

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<v Speaker 1>And and do people you mentioned a couple of former students,

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<v Speaker 1>like how do people find you? I mean I assume

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<v Speaker 1>you're you were sought after anyways. Job, But but how

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<v Speaker 1>do people get to you? Well, uh, so we're about

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<v Speaker 1>a billion dollar series of fun, We're Insalt Lake, We're

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<v Speaker 1>on the internet. I know I have a big network

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<v Speaker 1>because I've done business on the coast for a long time.

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<v Speaker 1>So and then I always tell people I've done a

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<v Speaker 1>lot of favors for people over the years, never expecting

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<v Speaker 1>anything back, and every once in a while I get surprised.

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<v Speaker 1>So that's the stores of deals. So, Joel, I want

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<v Speaker 1>to talk about leadership in the midst of this world

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<v Speaker 1>we are living in. We got to chat with you

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<v Speaker 1>a little bit about that when we were talking earlier

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<v Speaker 1>in this year about your new book, Entrepreneurial Leadership. But

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<v Speaker 1>this is a real test, I would imagine, and I

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<v Speaker 1>know you talked to CEOs all across the world. If

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<v Speaker 1>you can generalize what makes for a good leader in

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<v Speaker 1>this topsy turvy world. Well, it's actually uh you know,

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<v Speaker 1>I thought for a while, Liss no show of putting

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<v Speaker 1>out a book on entrepreneurial leadership was the worst possible

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<v Speaker 1>timing during this COVID thing. But I actually think that

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<v Speaker 1>coming out of it, we need entrepreneurial leaders. These are

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<v Speaker 1>people who really innovate, They create durable change. They're not

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<v Speaker 1>merely presiders. They're not merely administrators, managers, politicians, you know,

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<v Speaker 1>the kinds of leaders that you sometimes get in organizations.

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<v Speaker 1>I think it's gonna be our lead an organization out

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<v Speaker 1>of this mess without having kind of an entrepreneurial mind.

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<v Speaker 1>That that's a really good point. That's that. So tell

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<v Speaker 1>us a little bit more unpacked that a little bit

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<v Speaker 1>for us, um Joel, if you would. In other words,

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<v Speaker 1>what specifically do leaders at this point need to be

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<v Speaker 1>thinking about. I mean, we talked Jason and I talked

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<v Speaker 1>to a lot of CEOs who had to pivot quickly.

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<v Speaker 1>Restaurants are having to do it right. They can't have

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<v Speaker 1>everybody inside, so they've got to figure out how you know,

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<v Speaker 1>you know upscale restaurants who are doing take out which

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<v Speaker 1>they never thought they we do before. People are having

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<v Speaker 1>to reimagine their businesses, and I think it starts with

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<v Speaker 1>thinking about who are our customers? What's our covenant with

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<v Speaker 1>our customers? And that takes new creative thinking outside the box.

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<v Speaker 1>You know, at jet Blue we decided there are number

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<v Speaker 1>one value a long time ago is safety and uh

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<v Speaker 1>if you think of safety now it has to do

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<v Speaker 1>with help is what it didn't used to. But now

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<v Speaker 1>we sanitize our planes, people wear masks, we don't serve,

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<v Speaker 1>sell the middle seats. We make sure we have HEPA filters,

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<v Speaker 1>we take people's temperatures, you know, all kinds of things

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<v Speaker 1>that are really consistent with our safety objectives. So I

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<v Speaker 1>think every business is having to rethink these covenants. I mean,

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<v Speaker 1>I would say that the first thing that you have

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<v Speaker 1>to do as a leader in times like this is

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<v Speaker 1>you have to survive. And job one is liquidity. So

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<v Speaker 1>you've got to extend the runway. And I think a

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<v Speaker 1>lot of leaders are challenged by that, but that's job one.

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<v Speaker 1>You've got to do that. And I think you have

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<v Speaker 1>to reimagine what it is your covenant with your customers

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<v Speaker 1>and make sure you're delivering on that and then you

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<v Speaker 1>uh and go from there. And I think a lot

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<v Speaker 1>of it is communication. Our cover story of the magazine

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<v Speaker 1>this week is about Ben and Jerry's, which, as you know,

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<v Speaker 1>is part of UNI Leave, our giant company. But you know,

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<v Speaker 1>after George Floyd in Minneapolis, I mean that company, you know,

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<v Speaker 1>one of their board members said to the CEO you know,

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<v Speaker 1>you've got to do something quickly, and they did, and

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<v Speaker 1>that tends to be kind of their ethos of who

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<v Speaker 1>they are. They're constantly thinking about bigger macro issues and

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<v Speaker 1>how to have a voice out there um so that

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<v Speaker 1>people really understand what they are and the culture of

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<v Speaker 1>their company. So Joel, I have to say you open

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<v Speaker 1>the boarding doors. That were to talk about the airlines,

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<v Speaker 1>and we'd be remiss. It would be journalistic malpractice. We

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<v Speaker 1>didn't ask you what happens with the airline industry now?

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<v Speaker 1>I mean it is back on its heels, to say

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<v Speaker 1>the least. We've got all these dire forecasts, especially about

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<v Speaker 1>business travel. What's the road, the runway, whatever metaphor you

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<v Speaker 1>want to use, what's the way back in the in

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<v Speaker 1>the short and mid term here, Well, if it's gonna

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<v Speaker 1>take some time for people to feel comfortable again, and

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<v Speaker 1>it really starts out with the psyche of the customer,

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<v Speaker 1>and I think they have to feel like it's still

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<v Speaker 1>the safest way to get from point A to point

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<v Speaker 1>buh So the airlines have been that for a long

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<v Speaker 1>long time, and they've been actually a fuel efficient, carbon

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<v Speaker 1>efficient way of doing that. Two, But they don't feel

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<v Speaker 1>like it's a good way from a health standpoint, So

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<v Speaker 1>I think we have to secure that. It's funny after

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<v Speaker 1>nine eleven, it took about nine months for people to

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<v Speaker 1>really start flying the way they've been flying before. It

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<v Speaker 1>took some practice. They had to get used to the

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<v Speaker 1>t s a, they had get used to titanium doors

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<v Speaker 1>on the cockpits, etcetera. So I think it will take

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<v Speaker 1>some time because it's so hard to imagine how things

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<v Speaker 1>will come back. We've done scenarios where we looked at

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<v Speaker 1>a V shape recovery, a U shaped recovery, an L

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<v Speaker 1>shaped recovery, you know, which is to say a long

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<v Speaker 1>long time. So I think you just have to imagine

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<v Speaker 1>that you things are going to be different, and you

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<v Speaker 1>have to be able to thrive, survive, then thrive in

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<v Speaker 1>all of those scenarios. Do you think everybody thrives? I mean,

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<v Speaker 1>Jeff Blue and American Right announcing kind of this big

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<v Speaker 1>partnership collaboration. I mean, people are speculating, is this the

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<v Speaker 1>first step to emerge or you know, do we we

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<v Speaker 1>just have about forty seconds? Do you anticipate that there

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<v Speaker 1>will be some you know, more consolidation here. I think

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<v Speaker 1>there'll be some shuffling. I think you may see some

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<v Speaker 1>carriers disappear. You may see all kinds of different things.

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<v Speaker 1>I don't want to speculate or green any news. Well

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<v Speaker 1>that you could always do that with us, Joe okay

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<v Speaker 1>with it. Anytime you feel like if you come back,

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<v Speaker 1>you come back and joyous, Joe Peter said, it's always

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<v Speaker 1>a treat to catch up with you. We really appreciate

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<v Speaker 1>Joe Peterson, of course, former chairman of Jet Blue, professor

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<v Speaker 1>at Stanford's Graduate School of Business, founder of Peterson Partners.

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<v Speaker 1>He's got his hands in a lot of pos love

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<v Speaker 1>checking in with him head