Three things will be on the corporate strategy radar throughout 2019: Trump, women and gender equality and technology. I am purposely excluding topics like the Fed’s monetary policy as we have very little control over Jerome Powell’s mood swings. Also, if I know my business history, Steve Jobs never gave a second thought to Fed policy as he looked over elegant designs when he planned the iPhone launch on June 29, 2007. Compare that to the smartest guys in the room who, on the same day, were second-guessing the Fed and bulking up on derivatives.
The kinds of challenges that interest us are those that rely on the instincts of leaders to discern which way the wind blows, not which way the globe spins.
The Rise and Fall of Donald Trump
Two issues that the president is focused on, trade and immigration, are critical to business. But Trump has a more significant challenge, some of it self-inflicted and some courtesy of his energized opposition, and that is the election in 2020. The virulent attacks on his pro-business positions will begin shortly, courtesy of Elizabeth Warren, and ironically for Trump, his populist base is not far apart from her position on those issues. This makes it a perilous time for business.
Despite the perception the President is in trouble, his ratings after the first 700 days are not that different than Obama’s and Clinton’s. It means that in order to succeed, what he needs most is rational policies that appeal to the all-important independent base of voters, and smart friends who can guide him to that goal.
By talking up employment in America, the business community can argue for increased talent immigration and more rational trade policies. As Apple Computer CEO Tim Cook found out recently, Trump makes the right moves when jobs are on the line. As observers noticed, the President’s $200 billion tariff on Chinese products excluded Apple, and Tim Cook suggested Trump got the message: “I don’t want to speak for the Trump administration, but I think they looked at this and said that it’s not really great for the United States to put a tariff on those type of products,” according to CNBC.
Cook’s approach to working with Trump when there is a common set of goals is a crucial opportunity for both trade and immigration. The business community needs more H1B visas, or what we call ‘talent immigrants,’ and more reliable trade policies. Trump needs strong employment that will resonate in the middle ground, and business can show him the way forward.
In 1980, Governor Jerry Brown of California made an unsuccessful bid for President against Jimmy Carter and Ted Kennedy. While running around the country campaigning during his first term as Governor of California, his girlfriend, Linda Ronstadt, dedicated a song to him while on tour in Las Vegas, “My boyfriends’ back.” The lyrics relate the story of a woman who was harassed by an unwanted suitor, warning that when her boyfriend returned he would be in trouble.
It turns out to be Governor Brown’s anthem as he has come to the aid of women in his second incarnation as governor on Sunday, September 30, 2018. On that day, according to the LA Times: “Jerry Brown signed a bill into law that requires major companies with headquarters in California to have at least three women by 2021.”
The critics are calling it a quota system, but to those sensitive to public sentiment, it is a godsend to the business community because it spells the end of gender inequality in the boardroom and the C-Suite. The law affects a few well-known names, too: Apple, Yelp, Facebook, Tesla, Google.
Even a company like Google that claims to be free of gender bias found out that displaying poor gender policies caused tens of thousands of Google employees to walk out—when the company tried to conceal a $90 million payment to a sexual misconduct offender. Is there a better way to assure this never happens again than having as many women as men in the boardroom?
Since business relies on talent, especially in a period of such historically low unemployment, it must recruit the smartest people it can find. There is no better way than opening the door to half of humankind. We have Jerry Brown to thank and, as Linda Ronstadt said, “you better get on the double.”
The End of DIY Technology
Technology, it turns out, is either an education or an ornament. The latter is very expensive, the kind venture capitalists put on a tree and hope will light up. Knowledge is cheaper and more rewarding for companies who simply want to stay ahead of the curve.
Making the wrong choice, as GE has, may cost you your job and your company’s legacy. The company spent over a billion dollars each year to hone technology credentials within the cloistered walls of Fairfield, CT. In the process, it elevated second string technology players into top jobs because they were the best they could find. But they were not the best in the world, and that’s what working directly with Silicon Valley venture capitalists would have provided. For example, here are the financings to date by venture capital firm SoftBank to date, according to tech research guru, CB Insights, which include Uber and Airbnb, Brandless, and WeWork.
If GE had made tech investments into partnerships with the likes of Sequoia, Kleiner Perkins, or Softbank, those billions could have reaped technology transfer applicable to their broad-based businesses. They also would have received billions more in gains from a professionally managed portfolio, and all the ‘tech sniffing’ they could handle. They would have educated the company for the future, not just dressed it up for the moment.