No, it's not your fault the economy crashed. Or that consumer preferences changed. Or that new technologies have blown apart your business model. But if you're the C.E.O., it is your problem. So what are you going to do about it? First-hand stories of disaster (and triumph) from Mark Zuckerberg, Steve Ballmer, Satya Nadella, Jack Welch, Ellen Pao, Richard Branson, and more. (Part 4 of a special series, "The Secret Life of C.E.O.'s.")
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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If you'd like to listen to free economic radio without ads the place to do that is sticker premium five dollars a month and you can get free month trial by going to stick your premium dot com and use a promo code freak, you also get access to all our bonus. Episodes and you'll be supporting our show to that sticker premium, dot, com, promo code. Freak banks, its frankly a horrible job, and I wouldn't want to add my asking enough times I blow up a factory she wants to allow them to make some mistakes. Be bored can have a stomach for from day one see you. So let me ask you this: a Lotta ceo seem to want to be as on
interesting and unrevealing almost as inhuman as possible, when their speaking in any public or quasi public setting is that strategy is it? personality or something else, I think they have bad advisers. They have, I think, one of the things they either have out as a basic personality they ve been advised to Billy, is benign as possible three. They are scared, that's a former taxi o Carol bargains and I don't buy any of that Think people want to know where you stand where your company stands. What you stand for where you goin not all of them, but many of them. Come over managed and that's Jeff salmon failed
a long time observer of seals, the bureaucracies of overtake them. When I started singing, weren't treated US celebrities to the larger world. They didn't have this global rock star. About them and that's been to their detriment. Their schedules have them running from until then it's hard for them to have I am to listen and they often learn things way too late, What sort of things do steals? Learn? Tooley. Let me put it bluntly: they hear about the stuff after its already here The fan today and for Economics, radio, the next instalment in our secret life of a ceo series interviews with the ceo is past and present a facebook, Microsoft, Pepsico read it Virgin G and more telling us about all the different kinds of Duff they have had to handle from consumer rebellions lower, maybe fifteen or twenty thousand people were very upset,
changes in the business climate. We try to hard to keep our Model alive and huge changes in technology, and then I choose came along, but what, if you're the one with the new technology and it becomes so powerful? But the world starts to panic, that's a thing that Facebook and the internet. I think it really. Work to change over the last fifteen years. Theo's also get to deal with plain old fraud, Jack Got four hundred million dollars missing and the joy of managing troublesome employees? How do you fire that one person who is actually going to get you over the finish line. The corner office is empty. You want it. You sure you want it taking decisions, not easy, raising or very heavily on me personally. I'm happy
from W and Y see studios. This is frequent comics radio, the that explores the hidden side of everything. Here's your host Stephen governor. It's not your fault. You the one who move the goalposts You were the one who made or your customers suddenly why something new you're, the one who started worldwide financial meltdown. So no, it's not your fault, but it is your problem because you're the senior. So what are you gonna do about it? they do if, for instance, you are running a global soda and chips company, just as the world decides that soda and chips are borderline too
We knew we had to read tool a portfolio, that's ingenuity, the CEO of Pepsico and the star of our previous upset. That was just not even a question. We knew that we didn't do it. Our future was in jeopardy Pepsico did retool its portfolio, adding what it calls good for you and better for you, products to its fun for you, snacks and it's been working. Pepsico. Is an all time. High Neue still has a job. We ve never had a company go bankrupt. That's Richard Branson, founder of the virgin group amassing fifty is proud of that region is a conglomerate small one, as conglomerates go with businesses ranging from travel and leisure to financial services, to music what we started off with record shops, and we built maybe three hundred wrapper shops around the world
mega stores and then Itunes came along and and the internet came along and then people sadly didn't see the need to go into rapid shops anymore, and so we either sold all closed than most three indirect jobs, but that sport is on to move into mobile and into new technology that was evolving. Rinsing has been a serial reinventing, in contrast to a consumer goods. Company like Pepsico Virgin, is essentially a lifestyle brand, so it can apply that brand to dispel any sort of business, many of which we should say haven't worked out so well. It may be true, as Branson says, it has never had a bankruptcy, but the list, a virgin failures, is long in diverse, including virgin. Cola Virgin vowed coverage and Games Virgin Cars Virgin clothing version.
Brides and virgin student Social network Branson launched in two thousand. But by and large we ve had many more successful than we had things which we ve had to say say goodbye to he carried businesses. They had lost money for ten years. They gain is, but we could afford it. It's Jack, Welsh, former CEO of General electric talking at the state of the company when he took off, in nineteen eighty one, but we couldn't afford a day longer. The Japanese were coming eating. Our lunch Welch responded in force, he's flashed underperforming business units along with tens of thousands of employees, and he pushed GE an old school manufacturing and technology firm into a variety of unrelated territories, financial services and insurance, even broadcasting, one thousand nine hundred and eighty six GE
we see television network drifts on and felt again what was g ever doing with NBC. Anyway. It was good for cash flow, but didn't strategically Ryan Where's. The rest of what she was doing did ye have a good logic for being in what turned out to be quite powerless insurance businesses. Some of these other businesses were very far afield from Jeez expertise, and became burdens later and there are things that were done in terms of em in accounting practices, canopy killer, those again on the list of mistakes. G bought the brokerage firm, Kidder people. For six hundred million dollars in cash over the objection of some board members. Right, that's true! I I support my dream that, while the EU and Africa A board members, my love to challenge it.
They were right shortly after the acquisition of former Kidder executive was found to have been selling insider information. Some years later, another scandal, a killer bond trader, had faked hundreds of millions of dollars and profits to her. I'd trading losses: I was going out the door on a Friday night. The guy running Europe able to combine, said Jack. We'd get four hundred million dollars missing. I guess So my stomach, I was torn up and then I will judge a canopy body for the weekend. I know where the four hundred million dollars one and we have to come out with Press release on Monday that I worry follow me and I'll short I went to the euro that night I was standing next door guy tourism,
A baby I returned amazing jack. This wrong done bonus roller jeez, acquisition of Kidder Peabody, one analyse later said quote was like G lost its mind. What was a company known for jet engines and turbines doing in financial services and insurance, but from a stock market perspective G under Jack, Welsh exploded when he took over its stock price was just over dollar when he left twenty years later was over forty dollars, but today, G stock is it around Sixteen dollars and the future is not bright. Its current ceo recently announced a g still owes billions of dollars to cover liabilities from insurance business. It bought decades earlier Jack, Welsh, Richard Branson
and ingenuity have all tried to master, with varying degrees of success, that busiest of business school buzzwords, the pivot factors, but every seat year we spoke with when we asked about the biggest problems they face said it involved some kind of opinion. My name is Ellen POW, Ellen POW grew up in maple, would, Jersey, which has a great town to grow up in her parents, weren't from New Jersey, I'm the daughter of immigrants from China, her parents for both engineers who came here to work on the American space program. I ended up going to college at Princeton and law, school and then business school at Harvard. I pray as a lawyer and then went into the tech industry where I've been for the past. Almost twenty years, part of those twenty years were spent at read it. The self proclaimed front page of the internet, it was exciting to be
someplace, where there was all this positive energy and people were really tied to technology. Pell became interim ceo of read it in two thousand fourteen. The sight had roughly a hundred and thirty five million active users at the time for I have read it considered the most genuine, engaging in free, wheeling replication of humanity to be found online critics say it also reflects the worst of humanity, pockets, massage any racism and more pal The change that culture and one of the things that we did, that was really quite daring at the time was too. Guph revenge porn, an unauthorized, nude photos from read it and shortly thereafter. All the big companies followed Google Facebook Twitter, so they were kind of waiting to see what would happen if somebody did it and it actually turned out to be pretty unreal a ball and we got rid of their content, and thus I didn't go up in flames. People
leave in droves. There wasn't a huge uprising there. Wasn't it rising then, but later the uprising, one. We removed five of the most harassing sub credits from the site, a sub read it is Zero run community within the larger read at sight and those were supper at its where people would gang up on. Other individuals in one case, are trying to get somebody to kill themselves and another case in other. Sharing private information they were coming individuals in a way, That was very targeted and specific. We got rid of those five sovereign debts and people went up in arms yellower, maybe fifteen or twenty thousand people who were very upset. One of the subjects we got rid of was one that was fairly popular, so they set up a kind of putting up a lot of a lot of terrible pictures.
Terrible means terrible content about Mister Bell view that about you got about me and Photoshop images and saying terrible things about myself and my family. And what was that like? For you, your most of the site, I think, was either neutral, or positive, I did get a lot of messages from people who are just relieved. One of the people said that they had had a friend of yours. Sisters had experienced revenge porn and had ended of committing suicide so that the importance of taking down that content and taking these steps to clean up the site and make it you know a place where everybody could feel comfortable was something that was really meaningful. So I knew that it was the right thing to do, and that was what help me get through that time
the pivot, the Ellen POW attempted at read. It was about a change of content. The change of tone, Richard grandsons, multiple pivots at virgin, were in response to changes in technology and taste. Ingenuity. Big pivot at Pepsico was about a shift in consumer preferences. The next pivotal year about covered all those pieces and accompany far more valley, well, then Pepsico Virgin and read it combined. We'll start here, five hundred dollars, that is the most expensive phone in the world, and it doesn't have the old business customers because it doesn't have a board which makes it not a very good email machine that Steve Bomber, the DEN Ceo of Microsoft. When asked in two thousand seven about the impending launch of apples, Iphone Microsoft had been
the phone business for years right now or sell millions and millions and millions of pounds a year? Apple is selling zero phones year six months that have the most expensive found by far ever the market place and what's wrong. What's the expression, let's see how the competition does that competition, as you likely no went very badly apple built a phone that a lot of people loved and they got wireless carriers like eighteen tee to subsidize its high cost Steve Bomber. When we spoke with him acknowledged his miscalculation. So apple did business model innovation. We tried to hard to keep. Are Model alive is supposed to move to a new model, we did not take. The right path is apple was climbing. Microsoft was falling hard, but wasn't just a phone failure.
Computing generally back and ninety. Ninety nine Microsoft was the most valuable company in the world, the Marquis cap around six hundred and twenty billion dollars, adjusted for inflation, though, to about nine hundred and thirty billion hours today, which would still be the most valuable company just ahead of apple At one point, Microsoft Windows software ran on more than ninety percent of the world's computing devices. Today, if you count smart phones and other smart gadgets as computing devices, which they are windows is at around eleven percent, the mobile right pollution was on, and Microsoft was very late to the barricades Steve most solution. Finally, with two by the phone business of the finnish firm Nokia, it wound up sing roughly nine billion dollars the other Nokia purchase, was not mine, but type it got done. I recommended it to our board. In June of twenty thirteen
our board turned me down. I got kind of wild up about that topic and I didn't think was handled There is one thing to Germany dams. Another thing: the way it happened, jump ninety Laszlo upset about it. But then, after made clear that a thick It was time to go, find a new leader. The board came back and said: let's go headed by it. By then I knew I was gonna leave and they still wanted NEO Nazi purchased. Ok, so this is strange. Steve bomber wants to buy Nokia to help revive Microsoft. The board says no bomber feels mistreated, not long after he says he stepping down. Then the board says yes, which puts the Nokia
Deal on the desk of the new ceo, which was who sought in Adela, Sea or Microsoft. In February of two thousand fourteen such Adela became just a third ceo in Microsoft, history. After Steve Bomber and CO founder Bill Gates, the della was a relatively low key insider, not the shake the the outsider, some people thought Microsoft needed. He was an engineer been with the firm since one thousand nine hundred and ninety two and it ultimately been drawn to the senior management team. His mission, then to help Microsoft, dat world driven by mobile in cloud computing, Steve Bomber, your predecessor, famously pushed to purchase Nokia. This fading mobile phone company toward the end of his tenure
we voted against it, but the deal wound up going through a few months after you were appointed CEO. So I'm I'm just curious how this works first ball. Why did the board select a ceo who'd voted against this gigantic recent acquisition? A registry ear put the facts and make them clear am, I was not in the border directorate Microsoft. I was part of the management team of Steve, so it's not like. I had a vote. Steam just went around the room and wanted to get the pulse of his leadership team and we had a good deal. It, and I felt that it is important for us to do things given where we were in the mobile space at that point, which was out the number three slot, with a huge gap between the one two and three to do something that is more unique, indifferent and differentiated so shortly after who were installed as Theo. You shut down Nokia, which resulted in a total right off of the purchase,
eighteen thousand jobs lost. What was that? I mean that's a pretty big deal, to be handling both. You know the Mccain, so be it in the emotion of it I'm shortly after you come in as a not obvious choice. A ceo just walk me through what that like on your way to accomplishing that. First of all, I think these hard decisions around what to pick and focus on, is something that I believe c, o uniquely has to do that's, not something that you can delegate. I mean, ultimately, that's your correspond mobility at an inn, especially taking those decisions that impact people's lives I ve heard, is not easy ways or way heavily on me personally. So therefore, I had to think it
and then having talked it through and made. The decision to execute honour to a point where my pet waters of paramount importance was to make sure that the employees being impacted were treated with dignity and or given all opportunities to find their next play, whether inside of Microsoft or outside, and that was my real concern and that's where I poured my energy. But I knew that I had to define the core well propositions that we will be creating the company was getting quite mature. In an industry that was facing really of excess tension, disruption, Jeffson and failed again. The ceo expert at the Gale School of management he did come into a culture that had become very bureaucratic. It had become
possessed by very strong turf issues. Sonnets felled thinks Microsoft has benefited from the Dallas management style. What you might call a mellow intensity, some info points to Hound Adela handled the Nokia mess he had voted against. This merger with Nokia he thought, was a mistake but doesn't run around trying to shame, bomber and gates. Overages had looked on this as we look at it now clear, eyed way that wasn't the path to today doesn't mean dead. The mistake was doo, doo, idiocy or corruption is that in the light of day, it was somewhat different conditions. We say we need to take a different path. Now, the path the Della has chosen from Microsoft, isn't radically different there still making big acquisitions linked in for twenty six bill.
Dollars and another two and a half billion from merging the swedish maker of minecraft. Microsoft is still a software company that sometimes tries to sell hardware which we haven't worked so well, but lately they ve gotten better, especially with their surface tablets and laptops. Button. Adela is pushing Microsoft particularly hard, three new or new issue directions. The first is cloud computing, one of Medellin specialities before he became so here's what he writes in his recent book, which is called hit refresh when I took over our fledgling cloud business two thousand eleven analysts. Estimated cloud revenues were already multi billions of dollars with Amazon in the lead and Microsoft. Nowhere to be seen Amazon was leading a revolution and we had not even mustard our troops under Adela Amazon
still weigh up front of everybody, but Microsoft has seen huge gains, especially in the past couple of years. The second big shift under an Adela partnerships in its early days, Microsoft, eagerly partnered with software firms like Adobe in hardware makers like Dal and each p. Here's what Della writes in his book, I don't think Google would have existed, but for the pc browser. Microsoft enabled Google to build a toolbar for our internet, explore but as the tech ecosystem evolved and friends like Google, apple and others became a threat, Microsoft began treating partners and would be partners as rivals. The devil is trying to reverse them. One example: he has allowed Microsoft, apps like office and Skype, to run on mobile devices that use rival operating systems, including the open source Linux which Steve Ballmer when it's called a cancer. The della's leadership thus far has been
on pivot after the nets. Nothing can be taken for granted and there's no such thing as a perpetual motion machine, What you have to do is be good at being able to refresh yourself at the crucial times. The third big push Underne Adela this one, you sense is his favorite. Microsoft is trying to build what it calls the ultimate computing experience, essentially a layer of technology that would lie beneath pretty much everything we do it be a blend of August. In reality, artificial intelligence and quantum computing, and then this is the real fun part right I mean just Jenny for your hologram was right here. How interviewing me, as opposed to just on the phone
more recently demos, new augmented reality model to Ford in the past. Forty would create these clay models, which weighed five thousand pounds that needed to be moved so that people, can critique than new car, whereas now they have essentially these sessions where people in their manufacturing design, sales can all look at the model simultaneously. Annotate did leave voice comments. I mean it's just a complete new way to collaborate You may I I think that deal the lady to reason over data and create intelligence is another amazing, amazing breakthrough. I give you an again. A very tangible example of group of people came together at Microsoft and created this new app called senior. I that anyone can download
from the op lobster, in fact did uses all the cutting edge machine learning ye I techniques or on computer vision from a cloud, and things about the capability for someone with visual impairment ought to be able to see. In fact, one of the my colleagues Angela Mills was telling me about how she is visually impaired, and she uses that act now to confidently go into the cafeteria order, food. Could she walks and had not even realise this to be such a challenge, which is she said, you know I can now walk into account, this room at work. Knowing that that's the conference room than I am expected to be an interim barging into the wrong meeting are, for the first time and to know that yeah. I can actually help someone fully participate in her job. It's remarkable such a you, ve got over a hundred twenty three
employees around the globe. If we put him altogether in one room, how many do think you'd know, by name let's say: five thousand wow- that's impressive! Really, the twenty five years, five thousand five percent, the aperture, perhaps the biggest challenge for Microsoft and Adela, a quantum leap in computing itself. Ultimately, I believe in to bring about some of these magical experiences. Any I capability even have to break free of some of the limits were hitting of physics. Really I mean Moors LAW, even if any grew the transistors exponentially computing power was only growing leniently, but in better reason over larger and larger amounts of data. I mean think about the unsolved problems right when we talk about global warming, what if there was a catalyst that good absorb carbon economy? That problem cannot be
all the organic chemistry problem that cannot be sold. You need to take a classical computer, the amount of time it as it had that has transpired between Big bang too now, but a quantum computer can solve that. So I think we need to go after this ball. New departure of building out a computer, that's very different. All the from the math. Do the physics to the computer sides of it. Listening to such an endeavour, speak, you probably want peace Prize to learn that he's proven to be a popular ceo and whether this is related to say a very successful one. Microsoft being more than four hundred billion dollars in value since he took it coming up on economics, radio. It isn't only failure to use up the pivot away from there.
Brightest computer scientists and all their thinking about is how do I Keep someone on Facebook for ten more minutes perils of success and employ judgment calls you'll have like this star engineer on a team who might be kind of a jerk and if you want to keep up they on what we're working on it for economics, radio punch, you sign up for a free email newsletter, just go to for economics, dotcom thanks. We will be right back
as we ve been hearing most problems, a ceo has to deal with most of the pivots. Their forced into are related to some sort of a failure. Failure to execute or may be into support a shift in technology, failure to understand your customers, but what? If the problems? You're dealing with are driven not by failure but by success. What if your firm has become so rich and pervasive and powerful the just, but everything you do is controversial. That's pretty much what's been happening last several years with Facebook and its Founder and CEO Mark Zuckerberg. As again early stages. We sat down last summer and a very warm day in Chicago in a trailer outside an event space where he just given a keynote talks, does very well.
When here another you throw their yeah. That's our followed. Thoughts go at our Zuckerberg has just spoken to a very friendly audience. Thank you. So much for coming out to our first Facebook nearly summit, the audience is made up of people who act as group administrators for all sorts of Facebook, user, new moms and miss Terry moms locks, myths and bird watchers Mark and I'm a member of the Zuckerberg family group, So, member about five different groups or people like the same kind of dog as I do, the purpose of the talk was to introduce new software tools. Facebook was making available to Edmunds lose their tools are and how this sort and filter all your request by location in general. Mars. Handing them together and also help to remove back,
And all their content set, the bird combines, enthusiasm, Oprah salesmanship, Begun Bill Clinton, the moral uplift, of Joel Esteem, neuron regarding always hear lorry warrior. Laurie runs Group for disabled veterans and tries to on some of the gaps that our government in all new members in a hard financial time and was close to getting their elect does any turned off your group rallying together to help pay their bills
by pumping up groups like military, moms and locksmith and recently by tweaking the Facebook Newspeak, show people more content about themselves and their friends. Zuckerberg has been working hard to reshape Facebook now or in a changed facebooks whole mission as a company in order to focus on us this being more community and connection less fake news and racism and maybe less unhappiness. That's air. Our conversation started in the trailer after his keynote. I love you to talk for just a minute about kind of the net effect of Facebook or social media or social networking.
Come on, let's say happiness. So the way that I think about this is that technology amplifies human capacity rights are people Thurgood parts of people nor a bad parts of people. I believe that on balance, people are good and that therefore, amplifying that has positive effects, briefing that being open is also very important for society, but it can be challenging right. Confronting fruits or perspectives that don't sit with ours. It don't necessarily make our lives easier in the near term. So when it comes to political or social or gender other affiliations, how'd, you think about weakening the silos. So if you want to have a debate where people engage productively, the first and most important thing is to first connect with that person over something that you haven't conquering words. If you just go into an internet
common thread a new start debating, gun controlling Samuel, Albert Productive, it's easy to edition my eyes. The other people think about them is not not human, not empathize with them. So a lot of what I think social networks can do well, and these communities are first, you connect over something that you have in common see. You recognise that the other person is. Is a person? Do you, I to orchestrate that. Yet I think building communities is one of the ways that you can write so a groom. I come together because they like fishing rank, but then they go connect over other things made debate other things, and I find that hey. We agree on other things. We disagree on them, but now we can have productive and empathetic discussions because we're all people- and we recognise our our common humanity
so Facebook is obviously not a government. You don't have an army. As far as I know the right now would you not, but in some ways it's become a nation stay in the way that term. You know we used to think about nation states if a community- ok, but it's a global community organised by interests, activities and its voluntary. So to me it some right. Nation state is an exaggeration, but what I'm getting at is this governments throughout history and especially now try their best. I would argue to you now: help their people and they often dont, do a very good job, because the structure of government turns out to be pretty sub optimal. New incentives, kinda weird in a way face
it strikes me, has more leverage over how people actually organizing live their lives right that the choices are able to make the information able to get hold of it. We look out of the world and we say: ok, we ve been focused on making the world more open unconnected, and I was thought that that would be enough to solve a lot of problems by its. For some it has, but you're the world is today more divided. Then I would have expected for the level of openness and connection that we have today so now. I just believe that we have a responsibility to also work on that there are lots of different issues and things that help find people together and make us stronger as a whole and some of our parts, a huge part of that is the economy, run our jobs and and all that and in a facebook, as it is a big player there, but no
a relatively small part of the overall world economy, but when it comes to helping people build communities, I'm actually not sure that there are many other institutions in the world that stand for building communities and have the tools to build to empower people. It is large scale to do that is to give people the freedom to share as much as as you can rang. We give people the ability to get access to as much opportunity as possible, did we work on basic things like improving the business model of of telecom operators or our designing solar their planes to beam down access to the internet, because that's a basic, then you can ask me questions about what we're gonna do, but it's actually gonna be other people doing this and we succeed when we empower other people now. A cynic would say well sure it's in facebooks interest, the bigger they
The global community, the bigger and better at the company, is so let's say that someone puts on their. I doubt the do gooder part of you have had to respond to that. I think a lot of people just can't get out of their own way I think for a lot of of companies and governments. They would do better by giving people more freedom and they don't for whatever reason so you may be right that it is strategically the right thing to do, but that doesn't stop everyone from that, doesn't mean that everyone is doing what they should do. I really want to train organization always to think about what is the impact that we can have by giving these people more power and freedom to go to They want how many version,
or whatever their proper now would be of Facebook or running at any given time, and just explain that to people who use it and what that idea represents sure. So one of the basic strategies of our company is to learn as quickly as we can see. The best way to learn is to basically try things out and get feed. So we built this whole framework that allows people within the company any engineer to change. Some could create a new branch of of what Facebook is and ship that to some number of people, maybe ten thousand. What wherever
some small portion of the community in order to get good feedback from now on. So grand 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 read in entrusting people to do that, rather than 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
like so. The real art, I think has not not when you know that you have someone who's superstars immigrate 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 and and people will feel like this more potential to try different things in the future. That may be better off. If you let them go, do those things. Even if you disagree with them, I believe a lot and giving people freedom is one of the biggest challenges for any ceo deciding just how aggressively you want a manager employees. There is, of course, a spectrum of behave.
Across the ceo class. Jeff Seinfeld told us how ingenuity of Pepsico thinks about it. She wants to delegate authority for others to grow and allow them to make some mistakes that she knows she could have prevented. But it's part of their growing process is also the question of just how forthright you want to be when employees aren't prevent, well Jack Welsh. Again, first of all, I think I see I must set emission adjuration work without a strong team together, candor today is a sin. People come to work knowing where they stand? Everybody who works for you must now where they want them. Last night, about them with accompanied thanks above them understand. Canada is not cruel. The kindest thing, you can do to somebody tell em where they stand early their careers, so they know they can adjust.
Can change. Although you move on they can be somewhere where they fit Then there are employees who are highly competent, still big trouble guilty like this star engineer on a team whose driving most of the progress might be kind of a jerk, its Ellen pal. Again, the former interim ceo of Red, it she's signalled a culture change with some of her early age. Our moves. I was able to higher a lot of awesome people. So we bring on board like a team that was We diverse there were a lot of women on the exam. Fifteen, there were under represented women of color and people of color, but read it, as you will recall, proved to be a contentious environment for.
The uprising came when we removed five of the most harassing sub from the site. The user uprising was just one of many decisions. Read it faced under it'll you. If you look at who can make those decisions at the it's a ceo, because a lot of these decisions are actually quite hard. Decisions like what to do with that star engineer who might be kind of a jerk, and maybe that jerking us manifests in inappropriate comics, or inappropriate touching, and those head of engineering is often unlikely to do anything about it because they got deadlines they have to meet. Maybe the product is supposed to ship in a couple of weeks, and how do you fire the one person who is actually going to get you over the finish line It's up to the ceo to say: no, we need to get rid of this person. We're gonna move update out we're gonna disappoint them customers, but it is important enough to the company
and to me that I need to make this call and if the sea It was not making that call here. She's allowing this behaviour, then it's going to proliferate within your company. Pow did make the calls at read it. Some of them were unpopular at the end of the day. I think the board in a didn't have a stone for, and they told me that they wanted me to reach in either through under fifty million or five hundred million years. By the end of the year- and I just know like no company- has done that so that you know I I can't commit to doing that.
And that ended up being the reason why they asked me to leave? We Ellen POW was pushed I'll read it. He went from being ceo to an example, an example of a phenomenon in business leadership. It hasn't got much attention. The glass ceiling you ve heard of the idea of the glass ceiling is that women can't get beyond a certain point within the leadership hierarchy. We're talking about something then more dramatic? It's called the glass cliff, so the glass cliff is just one of these categories of explanation for why women may be under presented leadership coming up next time on for radio only about six percent of the fortune. Five hundred companies have a female ceo. Why? So, I dont believe a female
was ever hired a ceo, especially from the outside for the rest that she was the number one pick when accompanied install a woman, as the EU is a good chance. At company was already headed for trouble. We found that white women and people of color are soon frequently more likely than white man to be promoted, see YO to weekly performing firms and there's a good chance that sea winds up getting pushed off the glass cliff with courses depressing its next time and for economics, radio requirements radios produced by w and my c studios and W productions. This episode was produced by MAX Miller. Our staff also includes Alison Hockenberry, Gregory Zawoiski Stephanie TAT merit Jacob.
Your Carruthers Harry Huggins and Brian Gutierrez for this year, is the sound designs by David Herman with help from Damned Zulu the music you hear throughout our episodes was composed by Luis scare. You can and should subscribe to finance radio and apple podcast or any number of podcast portals were apps. You should also check out our archive for economics, com where you can stream or download every episode of ever made can also read the transcripts, find links to the underlying research we can be found on Twitter, Facebook, etc. Or of your email at radio at for economics, dot com, thanks for listening.
Transcript generated on 2021-01-22.