Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Let's talk right now
Speaker 1: about what's going on in the world of cannabis. Alex
Speaker 1: Pasternak joins us. He's the executive vice president of BINSK
Speaker 1: and he can talk to us about um, the market
Speaker 1: and the future. It's it's interesting out because I was
Speaker 1: just in New York City for a few weeks and
Speaker 1: I started to see these cannabis stores popping up. They
Speaker 1: weren't selling real weed yet. It was like Delta eight
Speaker 1: th HC, which I guess is kind of a knockoff,
Speaker 1: slightly legal version of legit th HC. But it'll come.
Speaker 1: And I wonder how you expect this market to develop?
Speaker 1: Is it going to be like the liquor market developed? Hey,
Speaker 1: how you doing? Thanks for first and foremost thanks for
Speaker 1: having me today. UM, I would say that the liquor
Speaker 1: market is going to be uh, you know, a little
Speaker 1: bit of provides a little bit of insight for us
Speaker 1: in terms of as legalization continues to roll out and
Speaker 1: how they do it. You'll see differences in terms of
Speaker 1: the distribution models in particular in some states that that are,
Speaker 1: you know, share some of the characteristics that you see
Speaker 1: on the liquor side. But altogether, no, I think cannabis
Speaker 1: is going to prove to continue to be its own, um,
Speaker 1: its own product category that takes a few few things
Speaker 1: in particular from the liquor segment, but no, on its own,
Speaker 1: I think it's going to be completely different. To be ho.
Speaker 1: Of course, the liquor market has been legal for so long, um,
Speaker 1: I guess the cannabis. Cannabis was legal for a long
Speaker 1: time before anyone figured out what it really was. But
Speaker 1: it's been uh, fairly well demonized in the US. How
Speaker 1: you go about now in this kind of quasi legal
Speaker 1: state sourcing and selling weed? Is it? Are you looking
Speaker 1: over your shoulder all the time depending on which state
Speaker 1: you're in? Great question? No, Actually, we were able to
Speaker 1: sleep pretty well at night over here. Everything we do
Speaker 1: is fully legal. We only operate in legal territories. So
Speaker 1: even though it's federally still illegal. Um. As you all know,
Speaker 1: it was deemed an essential business during the pandemics. So
Speaker 1: the the idea of having concerns at this point, UM,
Speaker 1: are are long gone. And it's proven by the fact
Speaker 1: that you see more and more investors entering the space
Speaker 1: on a daily basis. So the risk factor is almost
Speaker 1: fully mitigated at this point. And no, we are only
Speaker 1: operating in legal territories. On the liquor comparison, as you
Speaker 1: compare it to there, there are some things to look at.
Speaker 1: For example, I could go into a liquor store today
Speaker 1: and buy fifty handles of vodka and in six kegs
Speaker 1: and no one says a word to me. But in
Speaker 1: most legal territories, I can only buy a edibles or
Speaker 1: announcer to a flower. So there's major compliance and regulatory
Speaker 1: issues that we're still battling through here. Alex, you mentioned
Speaker 1: the federal legislation, your federal approval. Give us a sense
Speaker 1: of where you think that is and how that may fall. Yeah,
Speaker 1: great question. Um. Look, I'm a big numbers guy, engineering
Speaker 1: background geek out on data and science in particular, there's
Speaker 1: nineteen recreational states in thirty six medical nineteen and thirty six.
Speaker 1: It doesn't take an engineer to understand that there's really
Speaker 1: no turning back at this point. Full legalization is imminent
Speaker 1: at the federal level. Look at the latest proposals by
Speaker 1: the Schumer Bill and progress on the Stafe Act and
Speaker 1: in Congress. I mean, there's just too much money on
Speaker 1: the table for the private and public sectors, particularly the government.
Speaker 1: Putting aside the money, there's two other major factors that
Speaker 1: I want to address. Number one, the opioid crisis and
Speaker 1: number two the criminal justice system. Last year alone, we
Speaker 1: lost about a hundreds thousand people to an overdo us
Speaker 1: on opioids or another synthetic drug. The legalization of cannabis
Speaker 1: can immediately help this horrible, horrible opioid epidemic. Lastly, the
Speaker 1: war on drugs needs to end with sensible criminal justice reform.
Speaker 1: We need to address the fact the imprisonment of more
Speaker 1: than forty thousand Americans incarcerated still for activities that are
Speaker 1: now legal in a significant portion of the country. Well,
Speaker 1: I wonder what kind of people do you have to
Speaker 1: deal with then? I mean, when I was a kid,
Speaker 1: we drive down to Athens County in Ohio, or at
Speaker 1: the Humble County in California, and there was a pretty
Speaker 1: shady group of grow ops. Um in those places, you
Speaker 1: did not want to tread on someone else's farm. Has
Speaker 1: that changed significantly? You know, there is a ton of
Speaker 1: black market still going on today. They're estimating in California
Speaker 1: alone that the black market is somewhere between two to
Speaker 1: five the legal market. That range of two to five
Speaker 1: is just so mad, considering the legal market in California
Speaker 1: is tracking to be four billion. So you really just
Speaker 1: have endless black market cultivators and endless black market producers
Speaker 1: at this point. Um, what's going on back there of
Speaker 1: theft and stealing from farms and security is uh, it's
Speaker 1: definitely a slippery slope. And again we're pretty grateful that
Speaker 1: we are nowhere near what's going on in some of
Speaker 1: those parts of the country. In particular, what about the
Speaker 1: quality and the strength alex of the of the weed
Speaker 1: that you guys are getting today, I mean, it has
Speaker 1: steadily increased to a point where, um, you've got to
Speaker 1: be careful if you want to smoke a joint, especially
Speaker 1: if you're an older person. Is that going to be
Speaker 1: easier to measure and easier to decipher? Yeah, So think
Speaker 1: about like alcohol again to compare as you get as
Speaker 1: we grow older, you go into some of these superstores,
Speaker 1: these mega stores, in the product variety just ranges from
Speaker 1: from lower and lower quality and two dollar bottles of
Speaker 1: wines that select stores to thousands and thousands of bottles
Speaker 1: of wines in some stores. So I think the same
Speaker 1: thing is gonna happen with cannabis. Over time, We're gonna see, uh,
Speaker 1: we're gonna see products going again a little bit towards
Speaker 1: the race to the bottom on on the value products,
Speaker 1: and then we're gonna have continuously higher and higher end
Speaker 1: products what you see on the what the first part
Speaker 1: of your question what's happening right now is one of
Speaker 1: the only data points associated to cannabis is the THC
Speaker 1: percentage that's the consumer sees when you go by cannabis
Speaker 1: or flower as we call it in the industry. There's
Speaker 1: a numerical value associated to that test that strain from
Speaker 1: that batch. They usually range between let's say fifteen and thirty.
Speaker 1: But if you watch what happens in a given dispensary
Speaker 1: on a given day, these these uh, these people come
Speaker 1: in these a construction worker after work or um a
Speaker 1: an electrician after work and they have a twenty dollar
Speaker 1: bill in their hand, and they say, how far can
Speaker 1: I take this twenty dollar bill? What is the highest
Speaker 1: high I can get from this twenty in in comparison
Speaker 1: again to alcohol, what's happening is ever Clear is being
Speaker 1: valued at a higher quality product. And let's say a
Speaker 1: blue label. Just because ever Clear has a higher alcohol content,
Speaker 1: it doesn't mean it's a better product than blue label.
Speaker 1: And unfortunately in the cannabis market, it's just not as
Speaker 1: educated and it's not as sophisticated yet, and so the
Speaker 1: blue label is literally selling for less money than the
Speaker 1: ever Clear. And that's part of what I'm trying to
Speaker 1: do every day is help educate and help everyone understands all.
Speaker 1: Alex Pastron act there from Bens, Thanks very much. This
Speaker 1: is Bloomberg Now. We got earnings out today UM from
Speaker 1: a number of retailers, and we're going to continue to
Speaker 1: get them out over the next couple of sessions from
Speaker 1: more Walmart UM coming out this morning, and UM giving
Speaker 1: a beat in term of its UM in terms of
Speaker 1: its previous earnings and and raising its UM outlook in
Speaker 1: terms of its forward earnings. And then we at home Depot,
Speaker 1: which disappointed. How to bring Katie Thomas, she is leading
Speaker 1: the Kearney Consumer Institute out of Pittsburgh to talk about
Speaker 1: retail because it's going to be such a huge theme
Speaker 1: this week. Katie, First off, what's your reaction to what
Speaker 1: we saw already? You know, honestly, I would say I'm
Speaker 1: not that surprise that Walmart and some of the big
Speaker 1: box retailers that really stand to benefit from some of
Speaker 1: the trends we've been seeing with consumers, so they're set
Speaker 1: up to benefit in all the right ways. And to two,
Speaker 1: we were seeing them return to stores. The store is
Speaker 1: king as much as we hear about convenience. When we
Speaker 1: talked to consumers where do you prefer to shop, especially
Speaker 1: for groceries, they still still tell us they love this store.
Speaker 1: And on top of that, in general getting as much
Speaker 1: done in one trip as possible, it's still you know,
Speaker 1: relatively attractive to consumers. They're not doing as many of
Speaker 1: those quick runs to local grocery store is but instead
Speaker 1: really focusing on the big box how much can I
Speaker 1: get in one trip? Um the it's competitive pricing, giving
Speaker 1: some of the inflationary concerns and so a lot of
Speaker 1: positive tail wins for Walmart that I'm not surprised you
Speaker 1: saw flow through in those comp uh store sales. So, uh, Katie,
Speaker 1: the omni channel strategy where I can maybe order online
Speaker 1: pick up at the store, that seems to maybe have
Speaker 1: been a pretty good strategy for retail. Is that something
Speaker 1: that can boost this industry going forward. Absolutely, So when
Speaker 1: we talk to consumers, they really love that as an
Speaker 1: additional option because it's really that perfect hybrid approach. So
Speaker 1: you're still physically going to the store you forgot something
Speaker 1: you can run in, but especially at the store the
Speaker 1: size of a big box retailer, whether it's Walmart and
Speaker 1: Target or Best Buy, you don't have to wander through
Speaker 1: the whole store either. So it's really like those those
Speaker 1: different options, the optionality that we didn't have before that
Speaker 1: consumer really are excited to take advantage of, and I
Speaker 1: think you'll continue to see it not just in those
Speaker 1: types of swords, but as we're seeing it with small
Speaker 1: retailers and just across the industry in general. What happened
Speaker 1: at um Home Depot there their sales forecast is kind
Speaker 1: of hinting at a slow down in the boom that
Speaker 1: we had seen is that just to be expected. I think, yeah,
Speaker 1: I mean a lot of people we've made the investments
Speaker 1: we were going to make in our house. Um, and
Speaker 1: you know, Walmart really stands to benefit from that everyday consumption,
Speaker 1: whereas the delta variant is driving just enough concern in
Speaker 1: the eyes of consumers. Now where what we really thought
Speaker 1: over the pandemic is people held off on buying things
Speaker 1: until they really felt like they wanted it or needed it.
Speaker 1: And so with some of those home improvement I think
Speaker 1: it's you know, pressing pause for right now. You're not
Speaker 1: going to see the impact of the child tax credit
Speaker 1: flow through to home improvement as much either. So it's
Speaker 1: just kind of a combination of factors that I think
Speaker 1: is having home depots often a little bit Katie, one
Speaker 1: of the themes of retail in America over the last
Speaker 1: decade or so is there's just too many stores were
Speaker 1: overstored here. Um, where are we in terms of that metric?
Speaker 1: You think we still need to reduce the footprint of
Speaker 1: the stores across the U S Well, it's an interesting question.
Speaker 1: I think you're seeing a lot of you know, uh
Speaker 1: press around that, a lot of shift to online businesses,
Speaker 1: all of that but the challenge there is direct to
Speaker 1: consumer businesses that are online only really have a challenge
Speaker 1: with eyeballs and footprints. So you know, in fact, you're
Speaker 1: seeing some of these big box retailers make those strategic
Speaker 1: partnerships target with Alta Coals, with the Flora and with
Speaker 1: the DNC smaller brand. So it's hard to say consumers
Speaker 1: really like to get out there and shop. Um. I
Speaker 1: think it's really what we called at the beginning of
Speaker 1: the Pennant pandemic, what you saw was the death of
Speaker 1: the middle So it's really some of those middle of
Speaker 1: the road retailers that lost their value to consumers. Then,
Speaker 1: you know, consumers do have so many options nowadays, you're
Speaker 1: just not ultimately going to be successful unless you have
Speaker 1: a real value offering in differentiation. Does the Delta virus
Speaker 1: Does at Delta Delta variant of the virus offer any
Speaker 1: severe headwinds? I don't think so no. If anything, I'm
Speaker 1: I'm more concerned about some of the ships we're going
Speaker 1: to see in the labor market to flow through of
Speaker 1: the supply chain. Right now, you're seeing a little bit
Speaker 1: of an uptick in avoidance of stores, But ultimately, consumers
Speaker 1: have money to spend, and they do want to spend it,
Speaker 1: it's just gonna be a little bit of bumpy um
Speaker 1: in terms of spending when they know they'll need it.
Speaker 1: I think to slow down in the return to work
Speaker 1: is slowing that down a little bit again. Even apparel,
Speaker 1: non back to school apparel, apparel for adults is slowing
Speaker 1: down a little bit in the retail numbers today. And
Speaker 1: that's just I'm going to hold off and see how
Speaker 1: things play out. Katie, real quickly thirty seconds, talk to
Speaker 1: us about the supply chain. Is stuff gonna be on
Speaker 1: the shelves back to schooling holidays. There are a certain
Speaker 1: categories where there are some challenge and it's definitely on
Speaker 1: consumer's radar. We're hearing from them directly, I should buy
Speaker 1: student then later. But at the same time, it's it's
Speaker 1: coming through in pocket. So it's really hard to say
Speaker 1: exactly what that's gonna look like. And I think some
Speaker 1: of these bigger retailers are actually the most protected because
Speaker 1: they have so much strength in the market. So if anything, unfortunately,
Speaker 1: it's going to be some of the smaller retailers that
Speaker 1: I think are going to feel more of the impact. Katie,
Speaker 1: thank you, so much. We really appreciate it getting your
Speaker 1: thoughts here is we're in the midst of these retail
Speaker 1: or earnings Katie Thomas, she's a lead at the Currently
Speaker 1: Consumer Institute based in Pittsburgh, PA. And again, you know,
Speaker 1: I think what a lot of investors are are focusing
Speaker 1: on this quarter as the retailer's report is kind of
Speaker 1: how is the consumer doing? Is the delta variant causing,
Speaker 1: as Matt suggests, perhaps some headwinds for some consumers and
Speaker 1: consumers spending, and so that goes to not only the
Speaker 1: results that they report, but maybe more importantly to the
Speaker 1: guidance they provide. So some good numbers out of Walmart
Speaker 1: certainly a good indicator of the consumer. There gotta sell
Speaker 1: off in this market. As Greg was just reporting, what
Speaker 1: really jumps out of me is the Russell Uh. It
Speaker 1: is off one point five percent. So the small caps
Speaker 1: are really underperforming. UH. And it's a good time to
Speaker 1: speak to our next guest, Brian Small, principal portfolio manager
Speaker 1: at hood River Capital Management. UH. They are located in
Speaker 1: Florida like everybody else these days and money management business. Brian,
Speaker 1: thanks so much for joining us here. Give us your
Speaker 1: thoughts based upon your experience of kind of where you
Speaker 1: envisioned small cap stocks here again under performing today, but
Speaker 1: in the reopening, a lot of people like the small cappers. Yeah,
Speaker 1: we're constructive from here the markets. The biggest concern I
Speaker 1: think is the impact on the delta variant on the economy,
Speaker 1: consumer behavior, business behavior. And we're constructive as we look
Speaker 1: out too small caps that significantly lab lag this year
Speaker 1: there about flat versus the FMP up. So it's been
Speaker 1: a lot of multiple compression in these names. And I
Speaker 1: think as as we kind of go through the peaking
Speaker 1: phase here of the delta varian, people get their booster shots,
Speaker 1: case decline and people come to grips that earnings need
Speaker 1: to go up next sharing earnings estimates than we think
Speaker 1: small caps will tend to outperform. But we're constructive on
Speaker 1: the market in general. So small camps is a big universe.
Speaker 1: Is there are there specific places that you like best?
Speaker 1: So at Hood River were bombs of stock pickers. So
Speaker 1: we like to see inefficiencies and stocks that that we're buying.
Speaker 1: We aren't really making industry top down calls bottom bombs.
Speaker 1: That basis right now where overweight consumers, loutical financial and
Speaker 1: industrial stocks in general, those valuations are better. They're tied
Speaker 1: to more of reopening in the economy, and I think
Speaker 1: ear introvisions are gonna be good and valuations are attractive,
Speaker 1: and I'd love to get your thoughts. I'm a former
Speaker 1: sell side equity research channels, and I know what I've
Speaker 1: been hearing a lot over the last you know, decade
Speaker 1: in particular sense of financial crisis, is that the equity
Speaker 1: research from Wall Street on small and mid cap stocks
Speaker 1: is as really declined in terms of how many names
Speaker 1: are in fact covered. How does that impact your job
Speaker 1: on the bi side as you think about, you know,
Speaker 1: doing research analysis on the names of you guys invest in. Yeah,
Speaker 1: that's a great question. So, as you mentioned, there's been
Speaker 1: a big dislocation on the cell side covering our stocks,
Speaker 1: which has made those stocks a lot more inefficient. So
Speaker 1: it's made our job easier, which is why it's been
Speaker 1: easier in general for active management to our perform in
Speaker 1: particular product. We see that as being the case going forward.
Speaker 1: There are a lot of reasons why why that's the case.
Speaker 1: Commissions have been tougher to come by in general, Compensation
Speaker 1: for sething Elysis dropped significantly, and so it's just given
Speaker 1: us more of an opportunity to find stocks where the
Speaker 1: earnings estimates are inaccurate. Looking out well eighteen twenty four months,
Speaker 1: so you're looking at Western Alliance, Chart Industries, Coulica, and Cepha,
Speaker 1: what what what do you like specifically? Are those are
Speaker 1: some of the names that we like. We like Western Alliance.
Speaker 1: It's a regional bank that trades it around twelve times earnings.
Speaker 1: The street has about nine dollars and worty cents for
Speaker 1: next year. We think that's really low as they continue
Speaker 1: to grow loans and the north of twelve range. Uh.
Speaker 1: We like Chart Industries, as you mentioned, it's an infrastructure
Speaker 1: provider for all sorts of chemicals and gases. And what's
Speaker 1: growing the fastest there is hydrogen and there's big demand
Speaker 1: for green hydrogen. Is is the economy more moves to
Speaker 1: more sustainable energy and it's relatively inexpensive, especially in comparison
Speaker 1: to other hydrogen plays like plug power and Coolic and
Speaker 1: Sofa is a semiconductor capital equipment company. Specifically, they make
Speaker 1: wire bonding equipment and that that's as you've seen the
Speaker 1: news all over the place, there's been a big shortage
Speaker 1: there they had great earnings, uh, and they guided to
Speaker 1: a little north of two dollars per share next quarter,
Speaker 1: and the street was at a dollar. So obviously that
Speaker 1: stock has been acting well and it's still cheap around
Speaker 1: twelve times earnings there as well. Broadly speaking, when you
Speaker 1: look at the small cap universe, is give us a
Speaker 1: sense of kind of where we are in terms of
Speaker 1: historical valuations because ones a lot of fun managers will
Speaker 1: come on here and say, boy, it's a twenty times
Speaker 1: forward earnings. That's yes, that's high, but interest rates are
Speaker 1: so low, so you know, it's not that big an issue.
Speaker 1: How do you think about evaluations in small cap land? Yeah, so,
Speaker 1: as I mentioned earlier, relatives multiples have compressed significantly. So
Speaker 1: what I tend to look at is the the earnings,
Speaker 1: the positive earnings companies in the index, and what the
Speaker 1: valuation is there versus the benchmark. And right now that's
Speaker 1: at parody with the some ps about twenty times next
Speaker 1: year's earnings. And there's always this large swath of non
Speaker 1: earnings companies like biotech, and it's a little bit harder
Speaker 1: to take a swag at that, but we usually are
Speaker 1: underweight that area. So that's one of the reasons why
Speaker 1: I like small cap is that when you look at
Speaker 1: the relative valuation versus the SMP and the higher growth
Speaker 1: and the higher concentration of domestic focus here in the US,
Speaker 1: I think it can outperform. What's your screening technique? What
Speaker 1: do you do uh to start looking at these companies
Speaker 1: bottoms up? So most of it is just organically talking
Speaker 1: to a ton of companies. We talked around for Warner.
Speaker 1: Companies popetrated every single quarter. So really it's just putting
Speaker 1: together mosaic in terms of how the business is doing
Speaker 1: and comparing that versus where the streets doing. And obviously
Speaker 1: those are businesses that we want to be a part
Speaker 1: of long term. We're looking for companies that are growing
Speaker 1: north of that have leading market share the in an
Speaker 1: industry that's growing, and most importantly, have a management team
Speaker 1: that's going to deliver. We do have some screens that
Speaker 1: look at the fundamental data and the odds of them
Speaker 1: exceeding analy assessments over the next twelve and twenty four months.
Speaker 1: That's but that's really more to stop gap. Again, it
Speaker 1: just comes down to just having a lot of conversations
Speaker 1: and talk to a ton of people. Brian, thanks so
Speaker 1: much for joining us. Brian Smallock, there is the principal
Speaker 1: and portfolio manager at hood River Capital Management, coming to
Speaker 1: us out of Florida. Of course, he's a long career
Speaker 1: in banking. Started it, Sally, this is Bloomberg. Now let's
Speaker 1: get back to r T oh. We haven't talked about
Speaker 1: returning to the workplace over the past couple of sessions. Here,
Speaker 1: let's bring in Shawn Lyons, Global Chief executive Officer at
Speaker 1: r G A Sean are we are we looking at
Speaker 1: a future where it basically goes back to the past.
Speaker 1: Are we going to all eventually go back to our offices,
Speaker 1: get back on plane, start our long commutes and just
Speaker 1: forget about the hybrid work that we did over the
Speaker 1: last couple of years. Well, hi, Paul, I thank you
Speaker 1: for having me on. I hope not. I really hope not.
Speaker 1: I think there's too much binary thinking right now in
Speaker 1: terms of back to office all remote. I think there's
Speaker 1: a real benefit of of how we've all worked in
Speaker 1: the past year and a half. I think the tremendous
Speaker 1: benefit to the technology we've we've used, the diversity of
Speaker 1: talent we've been able to pull into the company. So
Speaker 1: I'm we're we're all in on hybrid and I'm all
Speaker 1: in on the actual long term benefits of a hybrid model,
Speaker 1: which I think, you know, while maybe require a lot
Speaker 1: of thought and and burden on management to manage, I
Speaker 1: think the benefits and the long term we're just gonna
Speaker 1: be tremendous. So we're fully embracing it. Yeah, it's interesting
Speaker 1: here in New York City, and obviously Bloomberg we focus
Speaker 1: a lot on the big financial institutions. Uh, they were talking,
Speaker 1: some of them were talking a big game about getting
Speaker 1: people back in full time all the time, and they
Speaker 1: since push back some of those dates. What are you
Speaker 1: seeing at there from some of the leading companies about
Speaker 1: how they're thinking about their back to work. Yeah, I
Speaker 1: mean I think we I think generally there's a like
Speaker 1: I mentioned, there's some short term thinking happening right now.
Speaker 1: There's there's some fear involved in this, which is, how
Speaker 1: do I make sure I can monitor the proctivity of
Speaker 1: my employees, how do I make sure that everybody can
Speaker 1: work together and build team chemistry, because we know how
Speaker 1: that works in an office environment, It's it's a little
Speaker 1: bit more unknown when you think about it from from
Speaker 1: a hybrid of remote environment, but we actually like to
Speaker 1: think about it as like, well, how do we look
Speaker 1: at this creatively, where's the opportunities in here where we
Speaker 1: can actually attract more talent in more places. Where in
Speaker 1: some of the biggest cities in the world, with fifteen locations,
Speaker 1: some of them are quite expensive to live in, we
Speaker 1: now have an opportunity to hire from more broadly, So
Speaker 1: we're looking at that as an opportunity, I think. But
Speaker 1: I do think some of this is just based on
Speaker 1: the concern and fear that leadership has on making sure
Speaker 1: they can keep everything going, make the machine work, and
Speaker 1: make sure people are engaged at work every day. I'm
Speaker 1: not really that that that concerned with that. I think
Speaker 1: that people are happier when they have a choice, and
Speaker 1: I think having a physical environment that they can go
Speaker 1: to and work in, because that's important. I'm also having
Speaker 1: the opportunity to work remotely at home or somewhere else
Speaker 1: is equally beneficial, So we fund it as a tremendous
Speaker 1: advantage for us. You have, over your twenty year or
Speaker 1: so career, worked with at r g A and havas
Speaker 1: huge clients. Ibm um her she's Nike Liberty, Liberty, Liberty. Um.
Speaker 1: Where do you see the biggest success stories in terms
Speaker 1: of current workforce model? You know, I haven't actually looked
Speaker 1: at different models to try to follow. I've actually looked
Speaker 1: at what we need to do, and I've done that
Speaker 1: deliberately because I think this is so new. It's still
Speaker 1: new in terms of where we can actually learn from
Speaker 1: the last year and a half has been remote work.
Speaker 1: Only nobody would design it that way along, but you
Speaker 1: really need to do need to think about how you
Speaker 1: can do the great physical environment where you bring people
Speaker 1: together and also then kind of combine that with it
Speaker 1: with great digital tools so people can collaborate and work
Speaker 1: remotely together. UM. But we found is that our relationships
Speaker 1: is our clients in many ways have gotten better when
Speaker 1: we've worked in this way. There's more frequent communications, there's
Speaker 1: less burden on that one trip you need to take
Speaker 1: for a two hour meeting, which everybody understands doesn't make
Speaker 1: sense anymore. So this Harvard work model remote work is
Speaker 1: actually I think improves client relationships. They've been quite flexible.
Speaker 1: We're actually going to monitor what each of our clients
Speaker 1: is doing as we go along to make sure, we
Speaker 1: understand how they're they're gonna roll out their plans, but
Speaker 1: I think for us it will be an advantage for us,
Speaker 1: but also for them because they're gonna get to work
Speaker 1: with a kind of broader and more diverse team. And
Speaker 1: sometimes that means, you know, time shifting, where we have
Speaker 1: teams working in the US for setting number of hours
Speaker 1: and we can shift the work over to Asia Pacific
Speaker 1: to continue that work. So that there's benefits to to
Speaker 1: uh to the model that we're hopefully going to bring
Speaker 1: to our clients. Sean just thirty seconds. Um, what do
Speaker 1: you think is the ideal model? Well, I look at
Speaker 1: e commerce as a example here, right, so everybody has
Speaker 1: been used to being in the office for what sixty
Speaker 1: seventy years, just the same kind of method of work
Speaker 1: where everybody shows up nine to five. I really think
Speaker 1: if you look at the sweeping changes that happened in
Speaker 1: digital commerce over the past twenty years, how it forced
Speaker 1: evolution in retail. So the retail was hit by that,
Speaker 1: we know that, but it also forced companies to think
Speaker 1: about what their retail environment spaces was about, not just
Speaker 1: about shopping should be an experience. So I do believe
Speaker 1: this is going to require innovation within the physical workspace
Speaker 1: that's going to benefit everybody, and that's what I see
Speaker 1: is the biggest change. Hey, Sean, thanks so much for
Speaker 1: joining us. Really appreciate getting your thoughts in perspective. You're
Speaker 1: on a really key topic for corporate America. Sawn Lines,
Speaker 1: Global chief executive Officer for r g A. Thanks for
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and
Speaker 1: listen to interviews with Apple Podcasts or whatever podcast platform
Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt
Speaker 1: Miller V three and on ball Sweeney I'm on Twitter
Speaker 1: at pt Sweeney. Before the podcast, you can always catch
Speaker 1: us worldwide at Bloomberg Radio