« Freakonomics Radio

315. How to Become a C.E.O.

2018-01-24 | 🔗
Mark Zuckerberg's dentist dad was an early adopter of digital x-rays. Jack Welch blew the roof off a factory. Carol Bartz was a Wisconsin farm girl who got into computers. No two C.E.O.'s have the same origin story — so we tell them all! How the leaders of Facebook, G.E., Yahoo!, PepsiCo, Microsoft, Virgin, the Carlyle Group, Reddit, and Bridgewater Associates made it to the top. (Part 2 of a special series, "The Secret Life of C.E.O.'s.")
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
This podcast dynamically inserts audio advertisements of varying lengths for each download. As a result, the transcription time indexes may be inaccurate.
For economic video sponsored by the financial times. Twenty twenty was a year like no other in the financial times is looking ahead. Twenty twenty one and asking can the? U S and the world go from crisis to recovery. The financial times is award winning reporters look behind the headlines to discover the real impact of the issues affecting society. The empty considers questions such as is the global economy points for a powerful rebounded, twenty twenty one and is worsening. Inequality in America, a symptom of the pandemic visit, empty dot com, slash new agenda to say fifty percent on an annual empty subscription and read carefully selected free articles. That's empty dot com, slash the new agenda. If you'd like to listen to for economics, radio without ads the place to do that,
is sticker premium five dollars a month and you can get a free month trial by going to stick your premium dot com and use a promo code freak you also get access to all. Bonus episodes and you'll be supporting our show to that sticker premium, dot, com, promo code, freak thing, It is a very lonely John. I wouldn't want to forty hour days eight days a week and emblem they make a decision and everybody's had been. Everybody has some skeletons in their clause of the release into honeymoon period, because you want to see you. Theo's born or made I'm pretty sure. Some combination of both you look at the data are nos ten different recipe for success. Nicholas bloom, an economist at Stanford, has been studying leadership for years. No one could really give us a straight answer on what to find a good or a bad leader.
Sure there are some people, the better than others, but its damn. How to tell what it is. We ve been spending our time lately interviewing the ceos of companies like Microsoft and Pepsico. Facebook you'd think there be some sort of a template for what makes a successful ceo, some set of common characteristics, but as Nicholas Bloom and others have told us, the data till a different story, it's very hard to pin down just what produces or predicts or even indicates a good ceo. So today, I'm for economics. Radio, in the absence of great statistical evidence, will go the anthropological rail and ask the question: how do you become a ceo will track our seat? Yos from beginnings through their ascensions, including how they almost didn't make. By expected, I might get fire, he didn't. Have the nerve to see me face to face because he knew I would probably punched him out. Then I had my ask your turn. Times and then I am here
I'm happy w and Y see studios. This is for economic radio broadcasts that explores the hidden side of everything. Here's your host Stephen governor of the ceos we ve been interviewing or of them Gun MBA from an elite school to have law degrees. One has a phd on the other end of the spectrum. One is college drop out and one is a high school dropout. I was sixteen when I started off in business cycles version the business you may wreck. Nice that voice got my name, is richer Bronson them. What do I do? I do everything virgin now. Your title, your official title, as far as I can tell, is founder com, a virgin group. In addition to that, are you
the ceo of anything I used to be, but I've a gated, pretty well see I rose. You created your own path and just kept going and kept having ideas kept, trying failed, didn't let it bother you and so on, but from the original that the magazine student magazine, which was a culture magazine to record stores, record label, airlines, trains, mobile phone company, etc, etc, etc. I dont know, who you might have looked to as a model for that peaceful. I never thought of myself as a business person or or an entrepreneur. I just initially just thought of myself as an editor. I wanted to have a magazine, the campaign against the vietnamese war, but in order for the magazine to survive ahead, to worry about printing and paper, manufacturing and distribution, and so on, and I saw the became an entrepreneur
and you might education was being in the real world in it. In learning the artist survival I am the only child of two parents who both dropped out of high school David Rubens time is a co founder of Carlisle Group. The biggest private equity firms in the world until recently was also its co ceo. He went to Duke University and scholarship than war school at the University of Chicago. After a couple years in New York doing corporate law, a move to Washington, I worked for TED Sorenson had written a great speech were John Kennedy. He helped me get a job which autumn you lead me to the Carter campaign. So twenty seven, I was the deputy domestic policy via the present state of job. I obviously wasn't qualified for now. I've read that you stately at your job to make sure that your memos run top of the president's breathing.
I'll it, sir for better or worse completely. True, I would take into the presence private study my memoirs and a bypass the staff system and put my memos on top. So in the present came in mourning he would read my memos first as they run top of the inbox and that had the advantage of bypassing everybody s comments on my memos, which was a way of meeting the system, It wouldn't be something I would tell my three children would be a good way to get ahead, but I would say sometimes you do things in life that in hindsight with wisdom and gray hair. You realize probably don't look so good. I came from a dairy farms, answer my mom died when I was eight, I was very motivated. All was to do well, the good girl, that's Carol parts. She was ceo of the software from Autodesk for fourteen years and later CEO Yahoo, I actually was very fortunate to get a computer science degree from university Wisconsin.
In nineteen. Seventy one good timing. I fell into a world that I just loved and I could continue in that world for the next forty years talk for just a minute about Oh being a woman affected your career, if you, if you can kind of measure that input for of all, it was easier in the beginning, because not many people had computer science degrees, and so they didn't care fewer rioting. You could get a job because they didn't understand. What was going on and they thought maybe you could help them and fortunately, though, that time I walked into a mass of typical. Bad man? Ah there, you read about today, but I was a tough
arm girl, so let too much I get in the way You mean bad and sexually harassing kind away or ourselves. Radio. Absolutely I absolutely I mean when I was at three p m the guys that I worked with call me. Carl because they didn't want their wives and all they were travelling with a female so that that of it wasn't harassing me. It was just a kind of an indicator how the world was, and you know Ass time went on and I was able to move up. I was fortunate enough to have some very good mentors and leader. That believed in me and arm, and I was ornery. I think, of a product
of two amazingly unique american things, but such an Adela, the CEO of Microsoft. The first is this technology that it's me where I was growing up that even made it possible for me to dream the dream and then the enlightened american immigration policy that would be like to debate, but it allowed me to come here in the first place and live the dream, only in America wouldn't a story like pine be possible. In addition to you, the ceos of Google, Adobe, Mastercard and many other big american firms are Indian American, often immigrants like yourself. How do you account for that massive success? While I admit all of those companies other no sooner had Google we already the same high school. Even so I don't know maybe neglect the water. I first of all, I think,
it's sort of one of those false positives that you can take too much out of Reaches I think each of us had our own unique story hitting the unique path is, after all, a country with billion people, but a relatively low immigration rate for most of the immigration that is correct, I think what you re seeing here is that there was this tat boom, especially in the early starting in the early nineties. There was a good supply. Of engineering graduates out of the country and demand meet supply and the enlightened immigration policy, I think, is what made it possible I think it's because we are products of an indian education system at the high school India,
The gradual level, which is all in English, that's ingenuity. The CEO of Pepsico she's, also indian, and I asked her the same question all of us. I grew up with the family that basically valued educational or anything else, and I think that's what an hour. Is to come here and be successful to using my dad has a lot of fun stories about how he got me into a technology. That's Mark Zuckerberg founder, an ceo of Facebook. He took a lot of pride in being the first dentist in the area who did digital access is instead a visible and he's just as such a geek, but he's us marked: don't you think this is cool? I haven't. I think my my sister there's were happy enough to play the game that I programmed growing up right, so they prefer, like playing a snowball fight. Gay more some strategy game that I met. You listen, graphics were terrible. The game. Wasn't that good rex I was to learn how to program guys like twelve or thirteen or fourteen they'd prefer that to getting chased around the house with a super,
current you probably already know the Zuckerberg dropped out of Harvard ten. Years ago I was just trying to help connect people. It colleges and a few schools is probably the most accidental. We spoke with now. I never started to build accompanying at thirty three. Work is also the youngest ceo we interviewed the oldest at eighty. Two is Jack Welsh, former long time, ceo of General electric tree The same is ludicrous. I don't buy, it won't join D, in nineteen sixty with Phd in Chemical engineering. It was a different era. Well, let's start with differentiation, I were
differentiation when I was eleven years old in the playground and the other guys were fifteen and sixteen and what happens to the worst player he pits last, and he goes I feel that's differentiation. I mean that hasn't changed my mind from the day that first day and what the playground Welsh spent his whole forty year career with G, the last twenty as it seems. It's not cruel and darwinian, and things like that. The people like to call it a baseball team publishes every day. The betting averages and you don't see the one hundred and eighty hitter getting all the money of all the races. That's why they say it's the purest form of differentiation, because its public business is more subtle, more qualitative so Precision. Isn't there did you ever Ajay, so judgments important
but you don't win with a year mediocre players in business. Are in baseball one those is water or other winners, Larcom once more fun. When you look back at your tenure gee, you had an awful lot of different issues, controversies occasional crises, you had financial, you had environmental, you had some involving personnel. I walk me through what felt at the time like the worst. One and how you addressed it- whether I blow up a factory It was early on re story about how your boss- or maybe it wasn't your immediate boss blasted know me he made sure he got away from me. I blow the roof of the factory force. We know almost scale
it's called loudly Yorkshire Sway won't happen by my boss. Is bosses boss, so I met this guy really for the first time, guy named Charlie Reed, I'm yeah yeah that good good good to you, as you did some homework, alright you're expecting what from Charlie. Now, I think you know him, so I didn't know what to expect that. I suspected I might get by Yeah, I drove out of my Volkswagen from Patesville Bed Jolly and all he did the tragedy, which appeared lunch from emerging. So he took me to the second nothing. You know why it happened. What would you do differently? Why did you do that? why did you do this and he was coaching man. It was couldn't be nicer the lower from that. Never chick anybody when they're down when they start to swell. I don't
just so many when they're down Jolly Jenna, however job of culture made through the era I may in glowing oxygen through benzene without enough grounding in think that change the way that you manage going forward right. That was, you know. Almost twenty years before you took off pre eminent changed. My life forever from the outside its tempting. To assume that the path of chief executive has been a straight line, a procession of victory, small and large. That is rarely the case failure is not only common among the ceo class but to some degree desirable, Nicholas bloom again, you need that experience of diversity in Silicon Valley. This is old, saying about you, aren't you
the fund people? They had one or two business values, but three or more is pure carelessness or we are, and then I had. My ass kicked in enough times. Ethics I remember the moment in late nineteen, eighty Eighty one, its re dahlia at the time he was running small hedge Fund called Bridgewater, so I had calculated that american banks that lend to foreign countries want more money than those countries going to be able to pay back. Delia's calculation turned out to be right. This brought him a lot of attention from Wall Street. He was asked to testify before Congress Dalio told anyone who would listen that the looming debt crisis would in Everett. Led to stock market crash. I was so wrong. I had to let clients go, I lost money, I've got so broke, then I had to borrow four thousand dollars
dad and letting go people who were like extended family. I was literally down to me that was a very painful experience, but it was one of the best expire Just then happen in my life because it changed my perspective from Thinking I'm right to asking myself How do I know one right? Dahlia rebuilt bridgewater from scratch, and that began the whole process of trying to find the smartest people like and vine who disagree with me and be curious about what they think to create a culture in which there is independent King Bridgewater would become famous for using algorithms to make decisions and for practising what dahlia called radical honesty and radical transparency. Senior partner said that you're making people uncomfortably demoralising them with your straight forwardness, but it worked ridge. Water is now the biggest hedge fund in the world, fifteen hundred employees
roughly a hundred and sixty billion dollars under management dahlia, who recently stepped down as Kosovo as a net worth around seventeen billion dollars. He traces his success back to having weathered and learn from that early failure. We have a challenge. Being able to deal with our own imperfections and our own weaknesses and our own being wrong and arson. I had a reinforces that its reinforced in schools about Ok, you got the gray dried, you're right, you're, right, you're, right, you're right, it doesn't reinforce the notion of fair oh you're and learning from failures, and that whole experience
Well, we ve made plenty of mistakes, as everybody in this business has David Rubinstein again from the Carlyle group, the hay, but it's how you have made a mistake, probably really isn't in the business world and being honest. Carlyle is a private equity, firm buying established companies, sometimes replacing their seals and ultimately selling them off. This is not to be confused with a venture capital firm, which generally fun start ups. I don't think I have the skill set in venture capital. I passed on Facebook and Mark Sucker Borg was in college, and I had a chance to be an early owner of Amazon and effectively turn it down. Still Rubinstein is among the most experienced people on the planet. When it comes to observing Theo's Carlyle has acquired or invested in nearly six hundred km.
These in aerospace, healthcare, energy, media, financial services, you name it so Rubinstein has formed some rules of thumb. Running companies is different than getting them off the ground. I think it's much harder to get em off the ground, but generally the companies that are gonna make it, with some exceptions, are the companies that have a she o founder who has driven the company for a first couple years and really driven its success, and then you bring in a sheet YO whose better at managing it more sure company than somebody's, getting it off the ground. Some of the greatest managers of companies in the world are not great entrepreneurs, and some great entrepreneurs are not really good at managing companies. In the latter category, Travis Cabinet of Ober comes to mind great entrepreneurs as a manager, much less great, which is I challenge is no longer the ceo of Goober. As for successful ceos who weren't entrepreneurs there's Lou Kirshner, who ran IBM and R J R Nabiscos AL,
Malawi, who ran forward and before that division of Boeing? But what about the third group company founders, who go on to successfully run their firm? It's a rare person like bill gates. Who was an hour. The Brenner and also was a very effective ceo for many many years. The high profile nature of those a relatively few excellent founders, Theo's memento bill gates. You now you could say mark Zuckerberg at this point could say Jeff basis. At this point you gotta see jobs while he was alive. Do you think they give a kind of skewed anomalous view of what the ceo should be? In other words, it should be the founder there that, or at least it would be best if it were the founder, are clearly. They get all the attention, and so it does give people something to aspire to, but probably most companies, five years into the formation, the com
are not being run by the person who conceived the company might have started. It is just a different skill set and very few people have the skill set that Jeff bases exhibitor bill gates exhibited. It just usually doesn't happen in the case of Facebook and Mark Zuckerberg. It wasn't at all clear that the founder would make it. As the ceo, I thought he showed an incredible audacity to not learn and listen as a leader s, gifts on and felt a leadership, Dollar at Yale, oh, my gosh has he changed and he's he had a great board great mentors and also has just been agreed learner. He has been remarkable,
different now is a leader than he was when he first became ceo. I should think the most important thing is: what decisions and what process on a day to day basis you choose to, let people have the freedom to do and just not get involved and that Sucker Burg, a huge part of of how Facebook works, is giving a large amount of freedom to our engineers, the company and to people use the product to make with it what they will run in entrusting people to do that. Rather Then, with that hard for you to get to her. I think it's hard every day, if I use it when you're running something, you of course have the ability to make as many of the decisions as you would like. So the real art, I think, has not
Not when you know that you have someone who's superstars and make great decisions, but deciding to let people do things that you disagree with, because on principle- and you know it's just going to free up more creativity in and people will feel like, there's more potential to try different things in the future it may be better off. If you let them go, do those things. Even if you disagree with them too many young entrepreneurs is one click on to everything and then that did not dare not good delegated Richard Branson, again the founder of virgin. If I'm ever giving a talk to a group of young businesspeople, I will tell him you have guns, go take a week out to find somebody has You know better than yourself. I know that once when you were asked how involved you are in the mechanics of your businesses, you said I dont understand these things completely, and you said I have never been able to know the difference between net and gross. I'm guessing you
exaggerating at least a little better now. Well, I'm I'm quite badly dyslexic and then it was alive, fiftieth birthday I was having a meeting with a group of executives, and I asked the question: is that Good news and bad news when some figures were given to me? I wanted the executors took me out side, the room and the ETA sudden coloring pencils, and they had a blank sheet of paper, the coloured in this piece of paper blue and then he put a net fishing net amongst the little fish in the fishing nets and then he said richer. Damn I dont think you know the difference. Nothing grows, and let me simplify it for you, the fish in the net, your profit and the all the fish that are not in the net Are you are your grace turnover? Damn, hey Presto, I got it on them. Since then, I have been spent.
Swine policing net profit in prose turnover. Coming up on economics, radio, ok, the sea. Yo Chair, suddenly empty and you ve gotta Philip. What happens now? Would you one of these novel dragging drawn from within to save us even the day before they told me that I was gonna be sealed. I didn't think I was become seal. I was on the sidelines, thinking What I would do, if I got it When I got it, I get tradition versus changed insiders versus outsiders, Microsoft versus the world. That's coming up
after this. Where
you see owes come from first of all, keep in mind that small firms vastly outnumber large ones when people mentioned seo, they think of the Oda White Man in charge of a company of ten thousand people. In fact, there are six million companies in Amerika the median come TAT said the fifty percent has three employees and the most common company has won. But let's say we are talking about a big company. Maybe it's a start up like Facebook or Goober that shot into the stratosphere an old timer like general, Electric Pepsico, where does the ideal ceo come from, is an insider who knows the culture has got institutional memory or an outsider with fresh eyes and instincts to what
three and on which dimensions? Should the incoming CEO resemble the outgoing? Let's start, this conversation with Jack Welsh became ceo of G. After twenty years of the company, you are ultimately appointed CEO by Reggie Jones, you You were very different from him. He was kind of button down form all classically trained and away, and british- and you are more scrappy- Boston area, said what you thought didn't didn't necessarily care that much how people received it is It was a fascinating hand off from him to you, and it's amazing that he's in you. You know what others may not have seen. I'm curious You were there a long time before that day. I wonder how much were motivated to stay and rise by your desired,
change. The way the company was run because you and he both acknowledge it at the time you took over g- need a lot of change, yeah, I had an enormous thirst my answer: So obviously I was. On the sidelines, thinking rubble What I would do, if I got it, and when I got it, I get it you make it sound, pretty easy. Why Frances ray, it's a lot easier sure come up and company and see if foibles from the bottom we do in the metal. Then brought in as a hero at the top and known Think of the infrastructure, other vibes of the place, Welsh eliminated many of G ease business units, and he let go so many employees. It came to be known as neutron Jack doing so he argued was how G was going to win and it didn't help any employee to pretend
there are better than they were. It's a sin. People come to work, not knowing where they stand. Everybody who works for you must know what, where they say, what their blah space above them with a company thinks about this idea of false. I guess is pure nonsense, pure nonsense. Jack Welsh was not everyone's favorite flavour some said he was abrasive that his cost cutting was inhumane. Other settings, lucky turning g into more of a finance company during what turned out to be a huge stock market run up whatever the case his tenure, as theo from a performance perspective was extraordinary. We were doing six billion dollars in sales with one point, four billion dollars a profit and we had four hundred and twenty thousand employees,
that was an early nineteen twenty. Years later, we were given a hundred, billion dollars in sales plus or minus they were making this game that knowledge and we had three hundred bucks, employers that of one hundred twenty. So either we were sat before above are something different. It's a sample set of exactly one but Jack wealth is evidence and its possible for an insider to take over and kick start a legacy firm. But what? If ye had brought in? And outside, or maybe they would have done even better for a firm in need of big change. You'd think that an external ceo, have all sorts of advantages when you, the truth is just the opposite. The research slightly favours the objective internal person to make the big changes. That again is
F Seinfeld from Yale. They know where the problems are where the bodies are buried. They also know where the opportunities are an objective. Smart, honest how's. Your answer is generally a much better pick. Somebody from the outside here's some numbers to back up what sun and felt sing, two thousand and nine academic study, which analyzed established public companies from nineteen. Eighty six to two thousand and five found it internally promoted ceos led to at least a twenty five percent: better total financial performance than external hires, a twenty ten study by Booz and company similar
We found that in seven of the ten previous years, insiders see egos delivered higher market returns than external hires, and yet external hiring seems to be on the rise in two thousand. Thirteen between twenty and thirty percent of boards replaced outgoing see use with external hires a few decades ago that numbers eight to ten percent outside hires, also tend to be more expensive their meat Pay is three million dollars more than for insight, hires, so an external high our will on average cost you more and perform worse, and yet that's the trend. What has happened in this so troubling governance days of this new millennia is insiders are often disparaged way too quickly, as boards have taken on with the messianic zeal, a belief that Whoever our saviour is further next, the ceo it ought to be so
from the outside, because hey if this company is not performing perfectly that we can't take one of these knuckles. Drawn drones from within the save us with the outside. You have no idea of that. Person has gotten a lot of credit because of a biased relationship with the search firm or maybe person had been part of a successful operation and a strong performing company and is benefiting from the afterglow of other peoples. Where's the inside the person you know when they ve tripped. So often we give too much attention to miss. Eggs from an insider, but an insider we can judge They ve learned how they ve come back from setbacks and mistakes and an insider tends to me a much better choice into doesn't fourteen Microsoft. One of the biggest companies in the world found itself searching for a ceo, Steve Bomber had announced he was stepping down he'd, been at Microsoft, forever thirtieth, employee hired- and he was
its second ceo after cofounder Bill Gates, allowed of names were mentioned, as Microsoft searched for its next ceo. Many of them were high profile, outsiders, one name rarely mentioned was sought in Adela. He was. Relatively low profile insider. A computer scientist have been at the firm since one thousand nine hundred and ninety two and yeah Nadella was the ultimate choice you make. No secret of it that that a lot of people were hoping for an outsider to be appointed ceo of Microsoft, but you're a lifer. I gather there wasn't a lot of enthusiasm internally when you were named, as you said, but Kanzi made insider, but though hunting that I've tried to do, being someone who grew up in Microsoft is have as objective outside. In view is a very humble guy. That again is ceo, Watcher Jeffson and felt he was never going for the bright lights.
Trumpets, there's no grandiose city about him and he was quietly but prophetically building up the cloud business that wasn't GINO Bill Gates, Thirsty Steve Front Burner topic in yet. He saw what was coming and as CEO one thinks he's done, is by increasing market cap since he's been in there just what three year should, just over three years by two hundred and fifty billion dollars, but two hundred fifty billion dollar figure is accurate when we spoke with Sun and fell, but that was a few months back. As of today, Microsoft market cap is increased by more than four hundred billion dollars, since Medellin took over its share price more than doubling but that tells only a small part of the story because he did come into a culture that had become very bureaucratic. It had become possessed by very strong turf issues and you might how did he do it just talking with insiders, and there is an app.
A genuine collaborative decision making on anything large or small, that there isn't driven by fiefdoms nothing by imperial decree there's an accessibility and a friendliness. Almost they playfulness that is brought in to accompany. Were you you just wouldn't. I thought it was possible at this late stage to do it. What he did to revive the culture is, is really is incredible. Mandela himself attributes his management success one word empathy he wasn't always so empathic. I always ask myself, you know at at whatever twenty five widows interviewing and somebody says what would you do if you do, you see a baby on the street crying and after having fallen down, I answered with your thinking. This is some trip question. Maybe there's some algorithm that are missing. And said I'll call nine. When one has only to have that manager wait, we cannot get up and walk me out of the room, saying you know, that's the Alps.
Bullshit answer and if, if you see a baby falling down, you pick them up and hugged them, and I must devastate because I remember thinking about it and I say how could I not get that binding, EL. As own admission, it took an even or dramatic event for him to get it On the thirteenth of August nineteen, eighty six said: Levin. Twenty nine all life changed his wife Anu, an architect, has just given birth to their first child, seen he had a severe case, surreal policy. It took me multiple years to even understand what had happened, because in some sense I was more about me. Why did this happen to us? What happened to me and it's only by observing my wife, you know really step up, give up a carrier.
Do all things, she was doing to care for saying that with that's. When I realized nothing happened to me, in fact, really something has happened to my son and it's time for me to step up and see life through his eye, and do what I'm I should do as a Farrington as a father. That's, I think, perhaps the big lesson for me around empathy, and it's only developed through your lives experience. It's not something! That's really endowed on you as long as but every day, senior with perhaps every passing mistake you make you develop More of a sense of being able to see life through other people's eyes is gonna. Make you more effective parent? More effective colleagues and I are more effective partner
so you can see why the Microsoft Board was impressed enough with an Adela to make him, despite being a relatively low profile insider that choice. So far at least has paid off. But the fact is that many many ceo searches look for a very but say a very typical sort of candidate. I talked about this with the Stanford economist, Nicholas bloom. By the time you get to people with basically in a grey education, charming individuals in some kind of prior experience, there will in the frame for leadership. It sounds as though your raising, then a central problem or or challenge at least, which is, if everybody's always looking for ceos who fit the ceo mould. Then you're going to continue recruit
installing a bunch of well educated white men from middle or upper middle class backgrounds which, as you know, I think we all agree is a potentially very discriminatory but be potentially idiotic, because you are reducing your pool of potentially excellent people. So how do you deal with that. Imagine if you're, making a new type of soup and he decided to invent tomato soup, already a hundred different types of tomatoes about that? But if, instead, you went for some indifferent, ah ahead, shokhin shitty soup, most people think desirable that never go near it, but you know one in a hundred consumers who think that's kind of cool broader need have a market much as it is with with ceos. You actually really want diversity, because you actually want to be different from your competitors and that enables you to have the edge it enables you to innovate, so sure, there's gonna be a lot of Rina white men see eyes, but given that a lot of white men ceos out there, actually there be a lot of pale
having in some something different? Because you have a different angle and that's where you can make money in business? Are we actually I to find that people are starting to hire people with different views and different backgrounds. Different experiences, who we really believe are going to change the system and not just perpetuated with different players. That's pow! I am the chief diversity and inclusion officer at the Cape or centre and a venture partner at cape or capital, and also see when CO founder of product include a non profit oriented towards giving everyone a fair chance to succeed and tech. Pow herself had a brief in stormy tenure. As CEO Interim CEO, equally it read it some of the changes she made deeply upset the red at community. At the end of the day, I think the board in a didn't have a stomach for, and They told me that they want to mean a reach in either through under fifty million or five hundred million,
by the end of the year- and I just said no, like no company- has done that, so that I can commit to doing that and that ended up being the reason why they asked me to leave from her experience within firms and as a venture. Capitalist pow has found that the ceo playing field is quite on level tilted, especially against women. There is a perception that if you are pregnant, that you're no longer as good a founder or as committed, Theo and we ve seen story after story. I don't think there's any scientific research about it, but of a sea owes hiding their pregnancies because they don't want to be perceived as less of an employee or less of a leader, and I had a co worker who I think she tried to hide her pregnancy. Ferland five months will look more care.
Sleep at gender and leadership in an upcoming episode about with called the glass cliff it'll feature Carol parts the former Autodesk and Yahoo CEO. We heard from earlier a guys that I worked with comics are all because they didn't want their wives and all they were travelling with a female. When bards took over Yahoo in two thousand nine, the company was in a lot of trouble. She only lasted two and a half years. Well. I was in a limb all driving into New York City when I got a call from Roy BAR Stock, the chairman of the board and tell me was fired. I was literally twenty minutes away from where he was physically located He didn't have the nerve to see me face to face. I do not believe that that would happen to a man.
Didn't have the nerve. Now I like to think you didn't have the nerve, because he he knew. I would probably punched him out and was right Might be right, I know Why did Carol bards with such an excellent track record? Is ceo of Autodesk fail as ceo at young Is it because she was an outsider? Was it a strategic issue? a personality issue, maybe timing, issue or maybe Carol parts is failure, had nothing to do with Carol. Bards me yeah, who was just a company being blown sideways and a tech tornado, we're display, adds were creating and Google was killed,
everybody else in search parts is successors. Didn't have a very good time. Either Yahoo was at one point, the world's most popular web destination, with a market cap a more than a hundred and ten billion dollars. Last year it was sold to rise and for four and a half billion dollars. So maybe we should be cautious about ascribing to much gleam or credit to a given see. There are alot of factors to consider in any firm success or failure, and, as we ve learned today, there is a huge variants in the backgrounds, styles and skills of different seated.
I was. There seems to be no secret sauce whatsoever. Unless maybe it's luck. That said, we also learned that when it's time to pick a ceo, the numbers do seem to suggest that the best bet is stable and experienced inside the day before they told me that I was gonna be see you. I didn't think that I was gonna be see. Also, there wasn't plan to become seal, the plan was to just keep doing a very, very good job and are you not focus on running the job that I add and making sure the company was in a good place. I think one thing just lead to another ingenuity of Pepsico is easily the most experienced stable insider. We ve run across in our reporting on seals that one point she was chief administrative officer to financial overturned chief operating officer, basically all at once and then took on the tests over Christmas at
point become also chief technology officer. Indra is unbelievably brilliant person, sell coming up next time on economics, radio, what's it like to take over a huge multinational food and beverage company. Just as the world decides, your food beverages are a threat to humanity and just as a global recession hits wonder to learn in a hurry how to run this company through extreme peers of adversity and there's no book you can read all you have to develop the book as you go, long. That's what was really really really tough ingenuity on how to run a company instead of getting run over by its next economics, radio Economics, radio is produced by W and my c studios and W productions. This episode was produced by MAX Miller. Our staff also includes
Hockenberry marriage, Jacob Gregg results, Stephanie, Tam, Viewer, Carruthers, Harry Huggins and grind Gutierrez for this series, David Herman, sound design with help from Dan's Azula and the music you hear throughout. Our episodes was composed by Luis Guerra. You can subscribe to Freakonomics radio on Apple podcast or whatever podcast app to use. You should also check out our archive at Freakonomics. Dot com, where you can stream or download every episode was ever made, can also read the transcripts and find links to the underlying research. You can also be found on Twitter, Facebook or email at radio. At economic study. Thanks to us.
Transcript generated on 2021-01-22.