Guest · 47:18
A media or tech company that is owning a bunch of the different media and tech appliances.
Kara Swisher · 47:22
They're adjacent. They're adjacent.
Guest · 47:24
Right. Whereas whereas GE was doing everything from subprime mortgages to aircraft engines. It's hard to point to a company, I think, today, except you could argue maybe Berkshire Hathaway, which of course is a very different model.
Scott Galloway · 47:36
That's true.
Guest · 47:36
Common ownership, very little common operations. It's hard to point to a company that has that sort of ambition to be so many things to so many people today.
Scott Galloway · 47:48
What can you say about the man, or what surprised you about Jack Welch as, you know, a dad, a family man, a friend, you know, as a a citizen?
Guest · 47:59
I will... I'll answer the question, but I wanna note that I didn't go deep into his personal life. I got into it a bit, but there's a whole lot more that I left off the page. And that's because this book to me is ultimately a book about a system, not a man. But as a man, here's what we can say. In the office, he was crude. He was crass. He was a bully. He terrorized people for lots of his career. As... I did not honestly just go into him as a family man. There's a famous episode shortly after he retires when he leaves his wife of many years, marries the woman who would be his wife until the end of his life. But more interesting to me than that is the way in which he tries to recast himself as this emotionally intelligent sort of CEO adviser type in retirement and tries to soften the edges because I think
Kara Swisher · 48:52
he under his second wife. That that was a lot about his second wife too. She was very savvy to his, as I recall, to his imagery.
Guest · 48:59
Yeah. I think he understood how history would ultimately judge him, and all of this sort of, you know, wearing a sweater and talking about literally podcasts and audiobooks about emotional intelligence.
Scott Galloway · 49:11
Well, he started a
Guest · 49:12
business school. Business school. And even more sort of mind melting is the fact that then he would go on to say things like shareholder value is the dumbest idea in the world and take to LinkedIn and start... Write articles about why it's not good to stack rank, which is something he started.
Kara Swisher · 49:28
Yeah. Yeah. Of course. Well, you know, Andrew Carnegie gave us libraries. But one of the things... Curious. You say broke capitalism, gutted the heartland, and crushed the soul of crushed the soul of corporate. I like all these very aggressive verbs. He... You you wrote that he embraced deregulation, union busting, outsourcing. Isn't that actually what capitalism is under a Jack Welch mentality of the world or perhaps not? Because it's changed so much. There's shareholder capitalism. There's, you know, ESG. There's all kinds of things. But isn't that really what capitalism is? Was he not embracing? How did he break it?
Guest · 50:02
Well well, you said the critic... You you you modified the question initially in a critical way. You said under the Jack Welch vision, and and that's exactly right. But it wasn't, and this is the point I tried to make in the book, it wasn't like this for the thirty five years or so before he came on the scene. If you go back, which I did, and read the annual reports of GE in the fifties, and go back and read the Johnson and Johnson creed of these sort of seminal... IBM. Absolutely. These seminal documents where the CEOs in the postwar era very articulately spelled out how they believe businesses should strike a balance with society, and it was a much more holistic vision. They talked about making a return. Yes. They were not blind to the necessity to make a profit, but they went on to say they had a responsibility Yes. Certainly. To their employees, to their employees' families, to communities, to the government even. Yeah. GE bragged about how much it paid in taxes.
Kara Swisher · 51:03
Jack was like, fuck that.
Guest · 51:04
Right. Right. So it changed. Right? And it changed first because there was sort of an intellectual revolution that was percolating when Jack came on the scene. Friedman had written his essay in the New York Times Magazine ten years earlier, but then he came along, and he actually did it. He put this ideal into action, and then all the rest of corporate America got in line. Damn. And that's the world we still live in today.
Kara Swisher · 51:29
Yeah. We don't slap Mountain Midstream around nearly enough. We should.
Guest · 51:32
We should.
Kara Swisher · 51:33
We should. Much more slapping. Next one. I I have just one more question. What... How do you look at today when they're trying to... You know, there's a lot of people trying to break down ESG or shareholder capitalism. Obviously, Larry Fink likes it. Elon Musk hates it. Elon Musk is kind of... Does that. Jeff Bezos is trying to break unions at his stuff. There's all kinds of people trying to do different things. Where do you find corporate? What is the soul of corporate America now if there is one that you could pick?
Guest · 52:01
Yeah. It's... It... There is something changing in the water, in the zeitgeist. You you guys have been covering this, so have I, for the last ten years. Right? There's something shifted after the financial crisis where I think CEOs... And it was Occupy Wall Street. It was a whole bunch of things that led us to this moment where finally CEOs were having some modicum of self reflection and saying, like, wait. Are we really doing the right thing? We tell ourselves who we are, but are we actually? I I think it was very hard for a lot of them to say, like, yeah. Everything's going okay. Obviously not. So thus enters the CSR and the ESG. Thus enters the arrival of stakeholder capitalism. In 2019, we have the business roundtable proclaiming the new purpose of a corporation is to look beyond the bottom line and
Kara Swisher · 52:45
do all things. At that one. Laugh. Laugh. Laugh. Right. It's funnier.
Guest · 52:48
Fine. Right. Like, show me the goods, people.
Kara Swisher · 52:50
And Yeah.
Guest · 52:51
It's hard to point to where big companies have fundamentally changed.
Kara Swisher · 52:58
But they have been pulled into social issues. Look at Disney in Florida and stuff like that. How is that? Like, every minute of the day, they've got another political issue they have to grapple with in Texas or Florida or wherever.
Guest · 53:08
Yeah. I mean, I've been covering this change for five years. They hate it. Right? They do not wanna be doing this. Some of them might have, like, you know, a little angel on their shoulder saying it's the right thing to do, but by and large, they would love to not have to deal with it. I think there's a difference, though, between issues like, are you gonna take a stand on a Texas abortion law, and are you gonna give your people a raise? Because it's that second one. Right? Are you taking good care of your people that is the one that has just been neglected for forty years now? If the minimum wage had kept pace just with inflation for the last forty years, it would be over $25 an hour today.
Kara Swisher · 53:49
Say this all the time.
Guest · 53:50
Like, listen. We can talk about all the woke capitalism stuff and all the crazy social and political issues that companies get dragged into. I'm much more interested in making CEOs have a frank accounting of how they treat their people, how they treat their communities, and what kind of impact the wealth they create, all these billions and trillions of dollars in profits, what kind of impact is that actually having on the company that we... Or the country that we all have to live in?
Scott Galloway · 54:18
David, what CEOs do you admire?
Guest · 54:20
Oh, it's a hard question to ask.
Kara Swisher · 54:22
Good one.
Guest · 54:24
Listen. I cite a few in the book. Paul Pullman, who was CEO of Unilever for many years, I think did an admirable job of first thing he did, he said, I'm stopping quarterly guidance. Right? And and just there, he was changing the incentives. He said, that's not what I'm gonna let you measure by. And I think that's such a critical first step. Paul then went on to have a good ten year run and do a lot of pretty admirable things, including late in his tenure as CEO rebuffing a takeover attempt by Kraft Heinz because he knew exactly what those self professed Jack Welch proteges were gonna do to his company, and he fended them off. I think Dan Schulman is doing pretty good work at PayPal in some ways. He has this financial wellness program for his employees where he realized, and this is this critical insight that CEOs... I love it when they have it. He realized that the the lowest paid people in his organization were not really benefiting from the wealth PayPal created. They were having to choose between gas money and textbooks for their kids. Mhmm. Right? And they were like, how is that possible for a PayPal employee to be like that? But these were call center employees in Phoenix or wherever. And so he raised their wages. He gave them stock. He gave them a financial literacy program so they could learn how to save and invest real well. But, critically, he cut their health care costs, out of pocket health care costs, by something like 60%. And guess what? It cost PayPal a little money, but it's nothing. And guess what? KPI scores went up. Net promoter scores went up. People were happier. Retrition went down. There's loyalty, and consumers are happier. So, like, it might cost a little money in the short term. Yes. But in the long term, CEOs like Schulman, like Pullman, who can actually realize there's some merit to doing this in the long run, I think they're the winners.
Kara Swisher · 56:14
Can I ask you one more quick question? The departure of Sheryl Sandberg from Facebook. Any thoughts? Silence.
Guest · 56:21
Silence. I mean, where do you begin? Right? Like, where do you begin?
Kara Swisher · 56:26
Positive and negative. Give me one thing she did you think was the correct thing, one thing, wow, that was a problem.
Guest · 56:33
I would say there are two sides of the same coin, and it's the degree to which she turned Facebook into an absolutely advertising powerhouse. Right? It's the positive and negative sides of that coin are gonna be her legacy, and we're all reckoning with them. Right? You cannot dispute the business results. One of... Some people would argue the all time great business success stories to to just... You look at the sheer revenue Numbers. Trajectory. Astonishing. Few have ever come. But look what it did to Facebook, and look at how the reliance on advertising changed the algorithm and what that changed the algorithm over the years did to our society.
Kara Swisher · 57:14
Yep.
Guest · 57:15
There it is. Right? It's it's the same metric, and, like, you hold that diamond up and you look at it, and it... You... It tells all sorts of stories.
Kara Swisher · 57:23
That is absolutely true. Anyway, David Gells is a wonderful writer for the New York Times, but he's written a book about Jack Welsh who can... Let's pull down that statue, and he does. It's called the man who broke capitalism. It's out now. Thank you, David Gellis.
Guest · 57:35
Thank you, guys. Thanks, David.
Scott Galloway · 57:38
Best of luck in your senior year.
Kara Swisher · 57:40
Alright, Scott. One more quick break. We'll be back for predictions.
[Ad break]
— Predictions segment begins —
Kara Swisher · 58:57
Okay, Scott. Let's hear some predictions. Any predictions around whatever you... What what do you wanna predict around? Whatever.
Scott Galloway · 59:06
Well, I I think Roku's in play, and I think there's gonna be and it's interesting though, it's actually down. I mean everything's down today. We're recording on Monday, but it's down 5% or 6%. But at a $10,000,000,000 market cap, its distribution, what you referenced around its user interface, its relationship with advertisers, We should buy it.
Kara Swisher · 59:28
No, I'm kidding.
Scott Galloway · 59:29
You always say that. It's carved out a really formidable position. I think it's the number one hardware streaming device ahead of Amazon. Sony can compete with the best of them. The interesting thing is, so Netflix and Disney are the obvious suitors. But the thing, the downside to a Netflix, one of the reasons for Roku's success is it's seen Switzerland because it doesn't produce its own content. I mean, it bought some content
Kara Swisher · 59:56
Well, no. It's starting to. It's starting to.
Scott Galloway · 59:59
Yeah. But Disney and Amazon aren't... Apple aren't threatened by it. If Netflix owned Roku, I wonder if Roku would still be distributing
Kara Swisher · 1:00:07
Yeah.
Scott Galloway · 1:00:08
Disney and Apple content or So whatever you might see other players come in I don't know if it's a Comcast, Oh,
Kara Swisher · 1:00:15
Comcast. That's smart.
Scott Galloway · 1:00:16
But at $10,000,000,000 Cheap. This company having fantastic so data, so much vertical distribution, such rich advertiser relationships, it just strikes Calling Brian
Kara Swisher · 1:00:29
Roberts. A lot of people. Ring. Ring, ring.
Scott Galloway · 1:00:32
Yeah. It feels so my prediction is Roku and a dinner bell has rung and will not be unwrung, and I think you're gonna see a variety of potential suitors
Kara Swisher · 1:00:41
come in here.
Scott Galloway · 1:00:41
It might even be a a private equity firm might even wanna
Kara Swisher · 1:00:43
take attached to something. I gotta think it's gotta be attached to something. Anyway, we'll see. That's a very good prediction. That's an excellent prediction. It's very good. I'll do a short one. So the SEC is investigating this back deal between Trump and Digital World Acquisition Corp to see if the two negotiated before DWAC went public.
Scott Galloway · 1:01:00
Oh god. Truth social.
Kara Swisher · 1:01:02
I don't think anything's gonna happen. I don't think. No. It's like a... Like this... The Musk thing. Slap on the wrist. Slap on the wrist
Scott Galloway · 1:01:08
kind No. Of We can't we can't decide. He encouraged insurrection and sedition, and we're still unsure on that. We're we're still not entirely
Kara Swisher · 1:01:16
sure happened. Run into someone from the SEC and and who... They all listen to this show, and they're like, we are watching, Kara. And I'm like, yeah. Stop watching and start doing.
Scott Galloway · 1:01:24
Yeah. Start doing. Yeah.
— Predictions segment ends —
Kara Swisher · 1:01:26
Anyway, we want your dating questions. By the way, speaking of what's gonna happen in this show, that should be interesting. Go to nymag.com/pivot to submit your question for us, or call 85551 The link is also in our show notes. We're gonna be doing a special dating show, which is possibly disastrous for our careers, but we'll see. Okay, Scott. That's it for the show. We'll be back on Friday for more. Can you read us out?
Scott Galloway · 1:01:49
Today's show is produced by Lara Nayman, Evan Engel, and Taylor Griffin. Ernie Ingertot engineered this episode. Thanks also to Drew Burrows and Miel Savario. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business. Kara, have a great week.
Kara Swisher · 1:02:07
You too. And scramble the jets. We'll be right down there with all the children.
Scott Galloway · 1:02:11
There you go.
