President Trump summoned the titans of American business to the White House on Monday for what was billed as a “listening session,” but it was the new president who delivered the loudest message: Bring back domestic manufacturing jobs, or face punishing tariffs and other penalties.
The contrast between Mr. Trump’s talk and the actual behavior of corporate America, however, underscored the tectonic forces he was fighting in trying to put his blue-collar base back to work in a sector that has been shedding jobs for decades.
Many of the chief executives Mr. Trump met with have slashed domestic employment in recent years. What is more, their companies have frequently shut factories in the United States even as they have opened new ones overseas.
Mr. Trump said he would use tax policy, among other means, to deter companies from shifting work abroad. “A company that wants to fire all of its people in the United States and build some factory someplace else, then thinks that product is going to just flow across the border into the United States,” he said, “that’s just not going to happen.”
Union leaders also met with Mr. Trump on Monday afternoon, the same day that Mr. Trump withdrew the United States from the Trans-Pacific Partnership trade agreement. While unions often ascribe the shift of manufacturing jobs abroad to “corporate greed,” the migration is a result of a more complex corporate calculus.
Wall Street is pushing industrial companies to increase earnings at a double-digit rate when the American economy is growing by only 2 percent, and the quickest way to deliver higher profits is by reducing labor costs, whether through automation or by moving jobs to cheaper locales like Mexico or China.
In some cases, Gordon Gekko-like hedge fund managers are to blame, but much of the time, it is the drive for bigger returns on 401(k) accounts, pension plans and other retirement vehicles that depend on steadily rising corporate profits and, in turn, a buoyant stock market.
Just as significant is the desire by multinational corporations to go where the growth is, and many emerging-market economies, as well as China, are growing at more than twice the rate of the United States.
“Global capital doesn’t have a social conscience,” said Kevin W. Sharer, who teaches corporate strategy at Harvard Business School and served on the boards of 3M, Northrop Grumman and Chevron, in addition to running the biotech giant Amgen. “It will go where the returns are.”
A case in point is Dow Chemical, whose chief executive, Andrew N. Liveris, leads a panel on manufacturing that Mr. Trump created. Mr. Liveris was at the White House on Monday.
At the end of 2015, Dow employed 49,500 people, about half of them in the United States, nearly 5,000 fewer than it did at the end of 2012. During the same period, the number of domestic Dow manufacturing locations fell to 55, from 58, but increased by five in Latin America and Asia.
Not that Mr. Liveris is necessarily to blame — he and the company were targeted in 2014 by the activist investor Daniel S. Loeb, who called for splitting the company in two to bolster profits and for the ousting of Mr. Liveris. After a multiyear battle, Mr. Loeb essentially prevailed, and Mr. Liveris will exit Dow after it completes a merger with DuPont later this year, with a breakup to follow.
Dow is hardly the only company to reduce its head count in recent years. International Paper, whose chief executive also attended the White House meeting, had its work force in the United States fall to roughly 34,000 in 2015, about 2,000 fewer than at the end of 2010.
The final piece of the manufacturing jobs puzzle is technology, said Bill George, who formerly ran Medtronic, a producer of pacemakers, stents and other medical devices, and who now teaches at Harvard Business School.
Mr. George noted that Ford Motor, which Mr. Trump has tangled with and whose chief executive was at the White House on Monday, employed a fraction of the workers it did two decades ago because its production lines were now highly automated.
Even boosters of the factory sector, like Scott Paul, president of the Alliance for American Manufacturing, an advocacy group, reacted cautiously to Mr. Trump’s initial approach Monday.
“It’s easy to get C.E.O.s to come in on the first day of his presidency and warn them they are on watch,” Mr. Paul said. “I believe a lot of the C.E.O.s in that room want do the right thing and create jobs in America, but the realities of Wall Street pressure and a globalized economy leads them to offshore a lot of these jobs.”
Mr. Paul added that “there are a lot of villains to go around” and that he hoped Mr. Trump would send a similar message to Wall Street chiefs like Stephen A. Schwarzman, chief executive of Blackstone, and Jamie Dimon of JPMorgan Chase, both of whom sit on an advisory panel of private-sector leaders Mr. Trump created last month.
Mr. Trump made clear on Monday that his plan to reshape the economy and revive the manufacturing sector went beyond exhortations, however. Taxes are up next, he suggested, and when it comes to tax policy, one of his top priorities is to punish American companies that move jobs abroad.
To curb such behavior, Mr. Trump said, he plans to impose a “substantial” border tax on such firms. In the past, he has said the tariff could be as high as 35 percent.
The logistics of such a tax continue to befuddle both Republicans and Democrats. Many wonder what penalties companies such as General Motors, which already has a plant in Mexico, might face, or what would happen to a technology giant such as Apple that has contracts with manufacturers in China but does not manufacture there itself.
It also remains unclear whether the threat would be carried out as part of a broader tax overhaul or would be imposed through executive powers. While Congress generally sets tax policy, the president does have authority to impose tariffs under certain circumstances.
Michael R. Strain of the conservative American Enterprise Institute said that Mr. Trump’s idea to punish companies for sending jobs abroad was a protectionist proposal and that he anticipated corporate backlash if it came to fruition.
“Everything he’s said about this has been so vague and ill defined, it’s hard to think about it sensibly,” Mr. Strain said. “It could be that the business community really starts pushing back against this stuff and it becomes a broader fight.”
During the meeting on Monday, Mr. Trump also made the case that building in the United States would soon become a more cost-effective proposition because of his plans to cut the corporate tax rate to 15 or 20 percent and to reduce regulations.
He pointed to onerous environmental regulations as one area where changes could be on the way, and he insisted that, despite the more lax regulatory environment, protections would improve under his administration.
“There will be advantages to companies that do indeed make their products here,” Mr. Trump said.
Of course, financial considerations like taxes and regulations alone do not guide corporate decision making.
Terry Gou, the chairman and founder of the Foxconn Technology Group, the largest contract electronics manufacturer in the world, is weighing a major investment to build a factory in the United States.
Mr. Gou, speaking at a company event in Taiwan on Sunday, suggested that the factory, a $7 billion plant making flat-panel screens, could create 30,000 to 50,000 jobs and that Pennsylvania was the front-runner as a likely location.
Technology analysts were puzzled by the job projections Mr. Gou described because flat-panel displays, like computer chips, are produced in highly automated factories. But if Foxconn does proceed with a factory in the United States, it will be as much a matter of the politics of trade as the industrial economics of high-tech manufacturing, analysts said.
Foxconn is based in Taiwan, but its largest operations are in China. Apple is its biggest customer, representing about half of Foxconn’s sales, and opening an American plant might be a way to alleviate White House pressure on Asian exporters like China and Taiwan.
This article was originally published on nytimes.com on 1/24/17.
Donald Trump’s presidency isn’t yet a week old, but he has made it clear that business leaders matter in his White House—and chief executives say it’s about time.
Former Exxon Mobil Corp. chief executive Rex Tillerson is primed to lead the State Department, and Mr. Trump’s transition team has tapped a panel of executives to provide the president with economic insight and advice. On Monday, Mr. Trump began his first full week on the job in a breakfast meeting with corporate chiefs.
For CEOs, the moves have sent a message that their stock is rising in Washington, with some betting that they will have a louder say in running the country.
To be sure, Mr. Trump’s Twitter pronouncements targeting companies and threats to punish firms with tariffs are causing anxiety among corporate chieftans, many of whom didn’t support his candidacy. Yet corporate leaders welcome his willingness to tap CEOs for important jobs and advice is a welcome change.
Going forward, “it’ll be different voices heard,” said Delos “Toby” Cosgrove, the chief executive of the Cleveland Clinic, who has met with the president twice since the election. Dr. Cosgrove, who was offered the top job at the Department of Veterans Affairs, will serve on the President’s Strategic and Policy Forum, a group of business leaders convened to advise Mr. Trump.
Dr. Cosgrove said he felt frustrated by the health-care industry’s lack of involvement in the shaping of the Affordable Care Act during President Barack Obama’s time in office. “I got three minutes in the Roosevelt Room,” he said. “The input into the legislation was very little.”
Mr. Obama sought executives’ advice during his tenure, appointing corporate leaders such as General Electric Co. CEO Jeffrey Immelt and Facebook Inc. operations chief Sheryl Sandberg to his council on jobs and competitiveness, which met four times. Some executives say they felt the financial crisis stigmatized big business during the Obama years.
“I’ve had a sense in the last eight years that big business is not popular,” said David MacLennan, CEO of agricultural giant Cargill Inc. “Perhaps there will be a different attitude that’s more understanding and appreciative.”
Bill George, a former Medtronic Inc. chief who teaches leadership at Harvard Business School, has advised CEOs not to be naive and to focus on running their companies. This president is unlike the business leaders corporate executives are used to.
Mr. George said he generally knew what to expect when Medtronic negotiated with Bill Clinton. “We felt like there was much greater clarity,” he said of working with past presidents. “Now, we don’t know.”
Another danger: if Mr. Trump doesn’t make good on his campaign promises for economic growth, business leaders acknowledge that could hurt them, too.
Ralph Stayer, the chairman of Sheboygan Falls, Wis-based Johnsonville Sausage LLC, believes perceptions of business leaders will improve only if the administration is successful and creates jobs. Still, he is pleased to see corporate executives ascending to the highest ranks of government. “I’ve been waiting for it for a long time,” he said.
If his picks are approved, Mr. Trump’s cabinet will have the greatest number of high-level executives coming directly from the private sector since the Reagan administration, according to Anne Joseph O’Connell, a University of California, Berkeley law professor who tracks political appointments. Along with Mr. Tillerson at State, billionaire investor Wilbur Ross, former Windquest Group chairwoman Betsy DeVos,Andy Puzder, chief executive of CKE Restaurants Holdings Inc. and former World Wrestling Entertainment Inc. CEO Linda McMahon have been tapped to play big roles in his administration.
Scott Gittrich, whose Toppers Pizza Inc. restaurant chain counts 76 restaurants in 15 states, said he has felt cast as a villain in recent years. He mentioned a speech Mr. Obama gave in Wisconsin regarding overtime pay, which in his view accused restaurant bosses of making money at workers’ expense.
Although Mr. Gittrich didn’t vote for Mr. Trump, he has taken the election as “an endorsement of what I do and my chosen vocation.” He is also heartened by Mr. Puzder’s nomination. “Holy smokes, one of us is going to be on the cabinet. Wow.”
“There is a buzz in the business community,” said EY CEO Mark Weinberger, who will join Dr. Cosgrove on the policy panel. Instead of being at loggerheads, corporate leaders may be more trusted to work alongside public-sector officials, he said.
“There’s a feeling that somehow, while we’re not going to get everything we want...our ideas will be heard and vetted,” he said.
Mr. Trump has made room on his schedule for executives, hosting dozens of business leaders since his election. In a Dec. 14 meeting with Silicon Valley executives, the president struck a conciliatory tone with tech leaders who didn’t necessarily support his campaign stances.
Mr. Trump declared an open line to his office. “You call my people, you call me. It doesn’t make any difference,” he said, according to a video of the start of the meeting. “We have no formal chain of command around here.”
by Rachel Feintzeig
This article was originally published on wsj.com on 1/24/2017
If the Roman emperors ruled by edict, President-elect Donald Trump appears poised to rule by tweet. Even before taking office, Trump has discovered he can move the world’s largest global corporations with simple, 140-character tweets. And though his aggressive approach is winning politically, good politics doesn’t necessarily mean good economics.
Voters see Trump fulfilling his campaign promises to close America’s borders and bring jobs back home. He is using the bully pulpit to stand up for workers by taking on the most powerful American companies, including Ford (F, -0.24%), General Motors (GM, -0.88%), Toyota (TM, -0.03%), Boeing (BA, +0.20%), Lockheed Martin (LMT, +0.89%), and United Technologies (UTX, -0.61%)/Carrier.
Thus far, no CEOs have had the courage to stand up to Trump. General Motors CEO Mary Barra has said the company’s small-car production will remain in Mexico, but it could only be a matter of time before she’s forced to change course. Trump’s sudden tweets likely worry many CEOs who fear they may be his next target. Right now, most have just tried to stay out of his way. Some, like SoftBank’s Masayoshi Son and Fiat’s Sergio Marchionne, have put forth peace offerings to invest more in the U.S.
Most striking was Ford’s recent decision to reverse plans to build a $1.6 billion plant in Mexico to produce small cars. Then Trump rattled Japan’s leading automobile producer, Toyota, and its CEO, Akio Toyoda, by threatening to slap a “big border tax”—which he has referred to as 35%—on any automobiles the company assembled in Mexico and imported into the U.S.
Shortly thereafter, Marchionne committed to invest $1 billion in two existing U.S. plants and create 2,000 new jobs—investments that were already part of Chrysler’s plans. He said it is “quite possible” his company will abandon Mexican production altogether if Trump’s tariffs are too high.
Trump didn’t stop with the automakers. He jawboned Carrier into keeping jobs in the United States, threatened Boeing for the cost of Air Force One and Lockheed on its F-35 aircraft, and pharmaceutical companies on their high drug prices.
There is no doubt that Trump is winning the political game and shaking up America’s largest companies. But there is real danger that his pressure may corrode the competitiveness of U.S.-based global companies and cause retaliation by foreign governments.
One of America’s greatest strengths is having global companies that dominate their markets around the world through innovation, quality, and marketing. That’s why American companies lead a wide range of industries, from information technology, e-commerce, and social media to finance, pharmaceuticals, medical technology, consumer products, automobiles, farm equipment, and aircraft. They do so profitably with global supply chains that enable them to design and produce products to achieve optimal costs and deliver the greatest value to their customers around the globe. In many countries, they are required to produce a portion of their products locally.
The global strategies of our corporations have enabled them to compete effectively with Chinese, Japanese, German, and Korean manufacturers—all vigorous competitors striving to win share in global markets. At the same time, they have been profitable enough to reinvest substantial portions of their profits in research, innovation, and product development. When they do so, they stay ahead of their global competitors and increase their market shares. This positive cycle allows them to justify large capital investments in their facilities and provide substantial returns for their shareholders, as share prices for these global companies are at all-time highs.
Trump has learned how to reach the American people directly through his tweets, thus bypassing mainstream media. With his threats of large tariffs on imported goods, he has succeeded in forcing these giants to make uneconomic decisions—such as Carrier paying $25 per hour to its workers in Indiana to do work that can be done by Mexican employees for $2.50 per hour. However, in the long run, this will be a losing strategy for American workers if it forces Carrier to sell its air conditioners on the world market at non-competitive prices, or replace its production workers with robots, as Tesla (TSLA, +2.72%) has done in producing its electric cars. In either case, Carrier will be forced to reduce its Indiana workforce, with its workers ultimately becoming the losers.
The same logic applies to Ford, General Motors, Chrysler, and Toyota. Toyota has created 136,000 American jobs through direct employment, and has invested $21 billion in the U.S. What appear now to be significant “wins” for Trump may turn into pyrrhic victories, as America loses its competitive edge and hiring declines instead of increasing.
Trump has also repeatedly threatened to levy large tariffs on imports from Mexico and China. If he is serious about doing so, he will quickly learn that other countries can also play this game, and are quite willing to do so. This could trigger a trade war that will disadvantage American companies and their employees. Decades of progress in opening up foreign markets to American-made goods could quickly vanish.
Behind all of the threats and CEO responses lies a much deeper issue: the vital need for America to upgrade its workforce so that American employees can compete for jobs of the future. While there are 7.5 million unemployed Americans as of December 31, 2016, the irony is that there are 5.5 million jobs unfilled, many due to a lack of skilled workers. This situation will get worse in the years ahead as jobs become more complex and require more education and training. Filling these jobs with qualified Americans is essential for the competitiveness of U.S. companies.
Rather than jawboning companies to make uneconomic decisions, Trump and Congress should instead work with major employers to train and educate workers. Americans might even find a real strategy that emphasizes preparing for the jobs of the future vs. trying to save the jobs of the past.
If Trump’s tweets turn into an industrial policy, this may signal that the U.S. is headed into an era of “crony capitalism,” similar to the systems of France and Russia. In contrast, American business has been built on free market principles of market-based competition, free trade, meritocracy, and diversity. For five decades, the U.S. government has worked to ensure U.S. companies are free to sell their goods around the world on a level playing field with local competitors.
Now it appears the focus may shift to negotiation with the U.S. government over jobs, factory sites, and a host of other issues. If this becomes the prevailing norm, global companies will be reluctant to create new jobs and invest in new factories for fear of being locked into unprofitable decisions. This is a primary reason why France’s current unemployment rate of 9.5% is more than double the U.S.’s relatively modest 4.7% rate.
Let’s hope the bark of Trump’s Twitter (TWTR, -0.20%) account is worse than its bite. If Trump and his new team are wise, they will use his rising popularity to create transformative policy that fosters real growth for the next generation by making America truly competitive in world markets.
Bill George is senior fellow at Harvard Business School, former chair and CEO of Medtronic, and author of Discover Your True North.
This article was originally published on 1/14/2017 on fortune.com.
Bill George, CNBC Contributor and former Medtronic chairman, discusses the news that President-elect Donald Trump is taking credit for creating 8,000 jobs in the U.S.
Bill George knows all about pressure from big government.
When he was chief executive of medical device giant Medtronic Inc. in the 1990s, he decided to close a plant in France and move jobs to more cost-efficient sites in eastern Europe. He was promptly told by French political leaders that he would have to continue paying wages to idled workers in France for a year. It hurt, but that’s the price he had to pay.
Today, from his perch as a senior fellow at Harvard Business School, he is watching Donald Trump strong-arm and threaten companies. And like others at the business school, he is trying to gauge how to handle a president-elect who has castigated Carrier for moving jobs to Mexico, ripped into Boeing Co. for making too much money on an Air Force One contract, and rattled drug makers by vowing to bring down prices of medicines.
George’s advice to today’s chief executives? “Right now, you just want to stay out of the line of fire,” he said. “Carrier was willing to absorb a noneconomic decision for a period of time by keeping jobs in Indiana. I see this as more of a symbolic move by the president-elect to make a statement. There’ll be two or three more of these moves. Then we’ll get back to business.”
Others see Trump’s bluster as part of his personality and longer-term strategies, and say captains of commerce should learn to adapt. Some believe the downside could be offset by Trump’s proposal to lower taxes which, if enacted, would prove a boon to business.
“You have to decide how important the presidential crankiness is going to be to your company’s future,” said Harvard Business School professor Joseph Fuller, former chief executive of the global consulting firm Monitor Group. “When the president-elect of the United States calls and says, ‘I need a favor’ — and it’s not material to your business and you know he’s going to be cutting your corporate tax rate — I’m going to say, ‘Yes sir, I’ll do everything I can.’ ”
Still, the former business leaders say chief executives will resist proposals that would force their shareholders to lose money, or thwart a company’s business strategy. One test could come soon, they say, if Trump follows up on his stated opposition to the merger of AT&T Inc. and Time Warner Inc. and tries to block the $85 billion deal.
“CEOs aren’t going to be cowed by being called out in tweets,” said Kevin Sharer, another Harvard business professor who was chief executive of biotech Amgen Inc. “If they think a move is fundamental to the company, they’re going to go forward with it.”
At the same time, Sharer said, business leaders should recognize Trump’s tweets carry a message — US jobs will be valued by the new administration.
“He is certainly laying down a marker to the country, saying he cares about jobs in America,” Sharer said. “He’s saying one of his priorities is saving jobs. He’s not doing it in a skillful or elegant way, but he’s saying it’s a priority. Companies will think harder about moving jobs out of America. And there’ll be policies that will make it attractive to keep business here.”
On Wednesday night, Trump expanded the ring of his business wrath beyond the executive suites. After Chuck Jones, head of the Indianapolis local of the United Steelworkers Union, said Trump had “lied” in talking about how many Carrier jobs had been preserved, the President-elect tweeted that the union should “spend more time working — less time talking.”
Trump’s use of social media has amplified his messages, but there’s a long history of presidents pressuring businesses or wading into the marketplace, Fuller said. He cited President John F. Kennedy forcing steel makers to roll back prices in the 1960s and, more recently, President Barack Obama’s bailout of Chrysler and General Motors Corp.
“You can go back to Teddy Roosevelt and see frequent interventions by political executives in business decisions,” Fuller said. “We used to call this jawboning. The president would use the bully pulpit to cajole both employers and unions in the national interest.”
While Trump’s focus has been on outsourcing and foreign trade deals he says have sapped American jobs, ex-Medtronicchief executive George said the larger issue is technology advances that have made many manufacturing jobs obsolete. George said the new administration should focus on German-style industrial policy to upgrade the skills of US workers and prepare them for jobs in fields like robotics and computer programming that match the needs of domestic businesses.
Manufacturers in Massachusetts appear to betaking a wait-and-see attitude toward the incoming administration.
“My guess is that he might continue doing this from time to time, parachuting into these situations,” said Christopher Geehern, executive vice president at Associated Industries of Massachusetts, a trade group concerned with costs and regulations. “It won’t solve the problem, but it focuses attention on manufacturing issues, and that’s OK. Manufacturers are pleased he’s shining a light on some of the issues that are driving companies overseas.”
Christopher Anderson, president of the Massachusetts High Technology Council, which represents computer software, hardware, medical device, and robotics companies, said no company wants to be singled out — but Trump’s actions appear to be purposeful.
“I don’t know who he’s going to be tweeting about tonight or tomorrow,” Anderson said. “But when people see 1,000 jobs [at Carrier] not leaving the US, they say he’s off to a good start, and he’s not even president yet. There’s a high expectation that there’s going to be a reduction of barriers and regulations in the Trump administration. And that’s going to make it easier to bring cash back into the country and expand the manufacturing base here.”
This article was originally published by Boston Globe on 12/9/16
The past year has been a painful one for many Americans. Our political differences have separated us into two camps, with angry and hostile words thrown at each other. Long before Election Day, it was clear that regardless of who won, the new President would face a deeply divided nation. Today, weeks after the election, many people are still focusing on the political scene, feeling angst over the latest Cabinet appointment.
For myself, I have decided to adopt American Theologian Reinhold Niebuhr’s “Serenity Prayer”:
“God, grant me the serenity to accept the things I cannot change,
courage to change the things I can,
And wisdom to know the difference.”
This prayer challenges us to be serene amid turmoil and chaos, while using courage and wisdom to make a difference in the world. This isn’t easy, but is a goal worth pursuing. Such equipoise is the mark of authentic leaders.
Accepting the things we cannot change is difficult for anyone with the passion and belief that he or she can change the world for the better. When I was young and naive, I thought I could tackle the world’s greatest problems – from war to health to poverty – and have a leadership role in eliminating them.
The reality is that none of us can independently eradicate poverty, eliminate disease, ensure quality education, guarantee rewarding jobs for everyone, or ensure all people have financial security. Even Bill Gates must feel humbled by the vastness of the world’s challenges as he applies his vast resources. But if we focus our energy and our efforts on specific goals that are within our grasp, we actually can change the world – the world in which we live.
Accepting our limits in dealing with intractable problems requires serenity – the quality of being calm and tranquil. When we get caught up in our 24/7 society and upset by the outrage on social media, it is all too easy to become stressed out, discouraged, and angry at the world. When we are too reactive, we lose perspective that our actions are part of the long arch of human progress, and their impact may not be immediately apparent.
When I feel anxious about the world, I have found my meditation practice helps me regain that sense of tranquility and serenity. It also enables me to focus on the most important things in my life and be grateful for my blessings. In this way, I have learned to accept the things I cannot change. Then I can put aside my frustrations with the world and set more modest goals for things that I can change.
Courage is the quality of the spirit enabling people to face difficulty, danger, and pain without fear. Courage cannot be learned in the classroom; it must be experienced in real world situations.
At Medtronic, we focused on restoring health for patients struggling with chronic disease and discovering ways to help more people. Our proudest accomplishment during these years was increasing the number of people restored annually to full health from 300,000 to 6 million per year. Today, some 14 years after I retired, that number stands at 30 million people annually.
In retrospect, growing this number demanded a great deal of courage from my colleagues. They took risks to discover breakthrough therapies, challenge the approval process of the U.S. Food and Drug Administration to get them released, and ignore Wall Street’s short-term pressures and invest for the long-term.
When I retired from Medtronic in 2002, I searched for a new purpose in my professional life. After exploring leadership opportunities in government, business, and non-profits, I went on a working sabbatical in Switzerland to learn and teach at two leading Swiss institutions. It was there that I realized I was most passionate about helping develop a new generation of authentic leaders. I recognized this purpose required a high level of humility about the limits of this goal. There was no chance we could eradicate all the poor leaders, nor claim any credit for the success of the authentic ones. But an emerging new generation of authentic leaders gave me great hope for the future.
Since 2004, I have pursued that goal by teaching at Harvard Business School (HBS) and applying those ideas through writing books and articles, as well as mentoring many emerging leaders. This took a surprising amount of courage as all my 30 years of experience had been in running large organizations. In Switzerland and at HBS, I was all alone in creating new courses for which I had no training or experience. While my colleagues at HBS were extremely helpful, in the classroom I was on my own with 90 challenging students with very high expectations. When I proposed a new course called Authentic Leadership Development that included a small group format (a radical change for HBS), I was required to go to the dean for approval.
As a first-time author, I also faced monumental challenges in getting a book published on authentic leaders. My first book draft was rejected by a dozen publishers. Thanks to my mentor, Warren Bennis, I was able to write Authentic Leadership, which was published in 2003 and became a modest best-seller. That gave me the courage to conduct research on 125 authentic leaders and publish True North in 2007, which is widely read today and used by corporations and academic institutions in developing leaders.
My grandfather, a Dutchman who came to the U.S. in 1878 at the age of two, had a plaque in his home that read: We grow too soon old, and too late wise.
Wisdom requires discernment and the insights that come from experiencing life’s challenges. It took me decades to recognize how long it takes to acquire wisdom. In my younger years, I thought I was a lot wiser than I was. This was especially true in accepting the limits of my ability. It was only by processing the pain of disappointments and acknowledging my limitations that I gradually accumulated a modest amount of wisdom.
In college, a wise mentor told me, “Bill, you can’t change human nature,” but I didn’t believe him. It wasn’t until my forties that I accepted just how hard it is to change other people to behave authentically and ethically. You can only have a modest impact on those people you are in direct contact with, and limited impact on others. When I finally accepted this reality, I have found great satisfaction in taking vicarious pleasure – but no credit – in the accomplishments of authentic leaders.
When we have the wisdom to acknowledge our limits and the limitations of our impact, we can focus our energies on making a difference in our immediate world. Only then can we find the serenity to accept the things we cannot change. This in turn gives us the courage to change the things we can – and realize the fulfillment that comes with it.
Former ExxonMobil board member, Bill George, joins MSNBC’s Ali Velshi to share his experience working with Rex Tillerson at ExxonMobil.
Former ExxonMobil board member, Bill George, joins MSNBC’s Ali Velshi to share his experience working with Rex Tillerson at ExxonMobil.
Bill George, former Medtronic CEO, weighs in on on Exxon Mobil Corp CEO Rex Tillerson as President-elect Donald Trump's leading candidate for U.S. secretary of state.
It started with Carrier. Ford was next. So by the time Donald J. Trump singled out Boeing for a Twitter taunt on Tuesday, corporate executives across America had read the writing on the wall: It was time to hunker down.
Initially aiming to pressure companies like Ford and Carrier to keep factory jobs at home instead of moving them to Mexico, Mr. Trump has upped the ante in recent weeks, forcefully reminding business leaders of his campaign vows to impose painful tariffs on companies that ignore him.
Fresh off a deal intended to keep roughly 1,000 Carrier jobs in Indianapolis, Mr. Trump took aim at Boeing on Tuesday with a complaint that it was overcharging the government on a potential $4 billion contract to replace Air Force One. “Cancel order!” he wrote in a Twitter message.
Unlike the earlier factory-focused attacks, Boeing’s turn as a target of Mr. Trump’s ire caught big business off guard, especially since Boeing is among the bluest of the blue chips and is not just a substantial employer in the United States but the single largest American exporter.
For all of Mr. Trump’s theatrics, the fear in the executive suites of ending up in the cross-hairs of the president-elect is real, according to Bill George, a former chief executive of Medtronic, a large medical equipment maker based in Minneapolis with over $30 billion in global revenues.
And it is not just those who do a lot of business with the government. More broadly, the country’s chief executives find themselves in an unusual and unexpected position with an incoming Republican administration — on the defensive. And whether they like it or not, current and former business leaders said Mr. Trump’s Twitter messages and other statements will filter through corner offices and boardrooms and influence decision making.
“Not that they didn’t think about it before, but C.E.O.s are going to think harder about the consequences for the economy of moving jobs overseas,” said Kevin Sharer, who ran biotech giant Amgen for more than a decade beginning in 2000 and has served on the boards of Chevron, 3M and Northrop Grumman. “What the president-elect is trying to do,” he said, is send the message “that his priority is jobs and the economy.”
But Mr. Sharer said Mr. Trump’s methods so far are limited and relatively easy for big business to accommodate. “This is a very, very minor move,” he said, referring to how United Technologies, Carrier’s parent, agreed last week to keep roughly 1,000 jobs in Indiana from moving to Mexico following pressure from Mr. Trump. “If a new president says please don’t, it’s a no-brainer.”
Blair Effron, co-founder of Centerview Partners, a leading independent investment bank in New York, echoed Mr. Sharer’s analysis.
“All in all, this is probably more important in terms of symbolic impact than it is in terms of substance,” said Mr. Effron, a prominent Wall Street Democrat who strongly supported Hillary Clinton for president. “But symbols matter.”
Mr. Trump’s targets are not just chief executives. On Wednesday evening, he went on Twitter to fire at Chuck Jones, the president of Local 1999 of the United Steelworkers in Indianapolis, which represents Carrier employees working at the Indiana plant, saying Mr. Jones “has done a terrible job representing workers.”
The Twitter message followed a Washington Post article on Tuesday in which Mr. Jones criticized Mr. Trump, saying that the president-elect “lied” unnecessarily when talking to union members about the jobs he had saved.
Mr. Trump said he intended to continue his crusade. In an interview with Time magazine, Mr. Trump said he would ask his newly appointed chief of staff, Reince Priebus, for a list of companies that have announced plans to leave the United States.
“I can call them myself,” he told Time. “Five minutes apiece. They won’t be leaving. O.K.?”
Still, for all the sturm und drang, the underlying message from the president-elect’s cabinet appointments is that he is building an administration of business-friendly veterans of government and Wall Street who favor a wish list of corporate goodies like tax overhaul and deregulation.
Mr. Trump, and the vice-president elect, Mike Pence, have made clear that in addition to sticks like public shaming and the threat of tariffs, they would push for these carrots for big business as well. “I don’t blame the companies,” Mr. Trump said in an interview last week on the floor of Carrier’s Indianapolis plant. Washington, he said, “has been taxing and regulating companies to death. We’re untaxing and unregulating.”
Hopes are already running high among leaders of the biggest public companies that the Trump administration will relax what they see as burdensome regulations, along with overhauling the corporate tax code. Mr. Trump’s taunts, after all, may be a small price to pay for looser regulations or being able to pay only a modest tax when repatriating hundreds of billions of dollars now parked overseas.
“I don’t think anybody wants to be shamed,” said Mark Sutton, chief executive of International Paper, in an interview with CNBC. “If it created a dialogue, if taxes were your problem and that’s why you made some decisions and that created dialogue, then I think maybe it could be for the good.”
At the same time, though, Mr. Trump has been highly unpredictable, more reminiscent of a European or Latin-American-style populist, said Mr. George, who currently is a professor at Harvard Business School.
“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion,” Mr. Trump wrote on Twitter on Tuesday morning. “Cancel order!”
At almost the same moment, he publicly thanked SoftBank, a Japanese company, for investing and creating jobs in the United States. Earlier, Masayoshi Son, SoftBank’s chief executive, met with Mr. Trump at Trump Tower.
Although Mr. Trump claimed credit for SoftBank’s decision to invest up to $50 billion in the United States, those plans predated the election, and Mr. Son has owned a controlling stake in the mobile phone carrier Sprint, among other companies, for several years.
Since the election, Sprint shares have risen 40 percent, partly on hopes that it could be acquired by its rival T-Mobile. While antitrust officials under President Obama have been wary of deals in the telecom sector, Mr. Son and investors are hoping the Trump administration might look more favorably on any potential deal.
Mr. George, who has served on the boards of several Fortune 500 companies, acknowledged that Mr. Trump’s threats on Twitter will force chief executives to think twice before moving production overseas, at least initially.
“It will act as a short-term deterrent in terms of closing factories and moving overseas,” he said. “It won’t change the long-term trend but he clearly promises to be an activist president who will use the bully pulpit throughout his presidency.”
Taking on individual companies raises the risk, some say, of potential abuses by those who might have advance knowledge of Mr. Trump’s actions. Boeing’s shares, for example, initially took a dive after his Twitter message on Tuesday before subsequently recovering.
“If you knew about the tweets beforehand, that would be insider trading,” said Adam Pritchard, a University of Michigan law professor who served at the Securities and Exchange Commission in the 1990s. “You could make small sums of money, I suppose, but if you are buying in large enough volume to move the market or make a lot of money, that would be enough to alert the surveillance units of the exchanges.”
While some chief executives may be rattled by Mr. Trump’s off-the-cuff style, others, especially in the manufacturing sector, say they welcome the idea of a businessman in the White House and his focus on keeping jobs in the United States.
“I didn’t vote for him but I can’t overstate what a bunker mentality most businesses have after eight years,” said Frank Sullivan, chief executive of RPM International, an Ohio manufacturer of paints, sealants, and specialty chemicals with over $5 billion in sales. Mr. Sullivan said that he had supported Gov. John Kasich of Ohio in the Republican presidential primaries; even though he did not vote for either main-party candidate in the general election, he said that he now looked forward to working with the new administration. “We’re not looking for a fight,” he said.
This content was originally posted on NYTimes.com on 12/07/16.