Bloomberg Businessweek Weekend-June 27th, 2020

it was week fifteen. We welcomed officially the first day of summer to kick off our week, and then once again some very familiar themes weighing on the minds of investors and on the stock market this week, the virus, trade tensions, and we continue to talk with our guests about racism in the United States, how to stop just talking about it and to actually take action. Well, and when you think of the people you want to hear from, I dare say we had the top of the list

this week. Lebron James my conversation, it's the cover story in this week's Business Week, how he and his longtime business partner Maverick Carter have been managing a moment in

history like no other. We've always been in this position, We've always strived that we've always had to plan for this moment um is something that I've always Um had a passion about and that's you know, letting people know, having people to understand how important we are as um Black America, you know, and the powers and the creativity and the language and everything in the struggle that we've

had for so long. And for me to have the brands that I have and having spring Hill and having Uninterrupted and now today having a nonprofit organization and we are more than a vote. It's allowing people to now really sense what we've been striving to do from the very beginning. So Um it's coming. You know. You always talk about timing, and I guess, I guess the timing is perfect for what we've always wanted people to understand what we're all about as a company and as a

brand and as an individual. And Jason, We're gonna hear a lot more from Lebron a little bit later on in our broadcast. We'll also here from the president of the Center for Talent Innovation, Lenia Irvin. She is someone who has been such an advocate for diversity and inclusion, spent a long time on Wall Street as well, so another thoughtful chat with her. First up, Though we love tom Orlick, He's got a new book out. He's the

chief economist for Bloomberg Economics and talk about timely. Oh my god, so timely Jason, And as an excerpt of that book in the magazine this week. His book it's entitled China, The Bubble That Never Pops. I spent eleven years in China, Carol. I moved there in two thousand

and seven. I left in the summer eighteen when the trade war was heating up, and the sort of the consistent consensus, the kind of the prevailing view amongst foreign investors and economists and policymakers all that time was that, yes, it's impressive, they've got double digit growth, that you just wait, it's a bubble and it's going to implode. There's some kind of China crash coming um. And of course that

crash never came. So the motivation of me is in putting pen to paper and writing this book was really to explore why why have we got it so wrong on China? What are the reasons for resilience, and how did that help us think about the future. So what was the biggest surprise to you? Because I know there are numerous answers, but what was the one? Where As you dug into this time you thought, wow, I either underestimated that as a reason or I just didn't think

of it. So I think one important thing Jason was struck me as I was reading as I was writing it is there are lots of things that we think of as weaknesses in China which which actually strength UM when you consider them in the Chinese context. So a really important one is state control of the economy and state control of the financial system. So of course here in America, UM, we see the markets as a key

driver of dynamism UM. And for an advanced economy, which is kind of push back the frontier, trying to innovate that market driven dynamism is really critically important UM. But that's not what China is trying to do. China is not trying to push back the technology frontier. China is

trying to catch up. UM. And when you're trying to catch up, having a plan to catch up, having a bunch of businesses that will execute on that plan, a bunch of banks that will lend money to help the businesses execute on that plan can be really powerful and really important. I think that's a really important point because if you look at kind of the United States as

a comparison. We often talked Tom about the inability for policy makers and you know, parties in power to actually think really really longer term, you know, in terms of things that need to be done in this country and create programs that will have economic market, country payoffs, citizen payoffs. But China can do do it right. They do those tenure plans and they just set out and do it. I mean, you know, not all the citizens may like what's coming, but nonetheless it's a long term plan and

it creates dramatic changes in China. Yeah. I think that's absolutely right, Carol, Um. I mean, I want to be clear that I'm not advocating for the political system. I don't think there's many people here in the States who'd want to go to China to it to in to Injro the how things play out in that respect over there, Um. But in terms of economic planning, there's a really clear distinction. I remember being over there, there was this one moment, He's in my mind, there was this split screen moment

of inbo television. Um. And on one side we had the US Congress, which was debating a bill to fund the government for one more day. And on the other screen we had Hijin Thing who was setting out of vision for China's economy and it was just such a stock contrast, right, I mean, can agree funding for a day, planning for the next thirty forty years. And that's Bloomberg Economics Chief economist Tom Orlick. Always loved catching up with him and talk about a man on the news here.

I mean, this was a week where China it felt like Carol came back to the four in multiple iterations, some comments having to be walked back, and some real concerns around the world, not just about the virus but about trade. Right his book China The Bubble That Never Pops and bottom Line Jason from him, he says, one day there will be a day of reckoning for China. It will have ripple effects across the world. You're listening

to Bloomberg Business Week coming up. It's been a big week for the Bloomberg invest Global Conference and China was front and center there as well, and a part of my conversation with Blackstone Chairman and CEO Steve Schwartzman that's coming up next. This is Bloomberg. This is Bloomberg Business Week, with Carol Masser and Jason Kelly from Bloomberg Radio. Well, today we're bringing you some of the most important, we hope, informative conversations we had on our daily Bloomberg Business Week

radio show and beyond. We were all over the place, Carol virtually, Oh my god. We were at the Bloomberg invest Global Virtual Conference. As you said, Jason, this was three days around the world talking to the most important voices in the investment and financial community about what comes next. Well, and one of the big names speaking was one of the biggest in investing, talking about Steve Schwartzman, Blackstone Group co founder, chairman and CEO. Check out what he had

to say. Well, this has been a pretty remarkable uh environment. Imagine uh uh you know, sort of around the last year end, if somebody told you that we were going to have the voluntary closing of the world's economy, who is certain except is to just keep food moving and other things, you would say something like that couldn't happen, and if it did, it would result in a global depression. Uh.

And it just wasn't on the page. Uh. And in effect that those directions too almost every country to stop your economy did occur, and unemployment has gone up massively, but but we haven't had a depression. And the reason for that is that we've learned from the past, and you've had massive government intervention, massive transfers of trillions of dollars of money to people who needed to in effect

replace the lost revenue from shutting our economies. And that first big stimulus bill in the United States, UH, followed by UH really very very large follow on by the Central Bank in the United States. The FED is pumping unprecedented peacetime moneys into economies, and in fact, the amount of deposits and banks because money was transferred to people

has exploded. UH. And so we are awash with liquidity that was necessary to give you some idea, US GDPs around twenty one billion dollars to excuse me, trillion dollars a year, and say, well, miss a quarter or more so, so we're sort of missing six trillion coming in uh and and somebody's got to fill that hole. And that's what all these stimulus bills and the FED in effect,

you're doing in a very simple way. And so we've had this dramatic collapse, stock markets down and now it's bounced up as if nothing had occurred because of the liquidity and support from the FED. And also so let

me ask you about that. So, So, Steve, if I may, that specific point is one that I really feel like I want to understand from your perspective, which is this apparent disconnect with every headline that we're reading every day related to virus cases going up, this medical crisis, this health crisis that we're going through, and a stock market if I even just look at my own four oh one k that has rebounded. Is it just basically the liquidity that's been pumped into the system. Help me understand

this gap. Yeah, I think it's mostly the liquidity that's in the system, and also some elements of confidence. In other words, you have a vaccines that are in the process of development. The fact that will go oh for

one thirty really seems remote. There are three different types of vaccines, uh and and and so I think people are much more optimistic that that that's going to occur on a timeframe that's way different, uh than the development of vaccines was in the past, where the fastest one was like four and a half years, and people are have have have optimism that within the next nine months will have enough positive could be a year outcomes from trials that that you'll get there within a year to

start really producing large scale vaccine. And there's other therapeutic breakthroughs that are occurring if you if you get the virus. The second thing I'd say about these cases going up, uh, how could one believe they wouldn't? Um, I don't find that surprising. People have been locked up in their homes for two to three months, and when you let them out, there'll be more socialization. Uh And and people won't understand

truly that this can get them sick. Uh And once they see that, and the appropriate government response will be the first really warned people in democracies Apparently they like to see bad things happen before people in democracies actually respond. Uh. So, so I I completely expected this to happen. I think the markets did as well. Uh And and that will be put under better control because there's no option. Nobody

really wants to get sick. Uh And so you'll you'll have change in behavior as as the number of cases goes up, and eventually that will be beaten down. But but I think it's it's you'll also see a big V in terms of the economy going up for the next few months because it's been closed and as people are allowed to go back, the economy will really respond a lot. But there's only so much the economy that's highly complex can respond, uh, just because not all things

go up equally. Uh. And if it will take uh quite a while before we sync up and get back to levels. We've certainly been through a test. It's a test for society. Uh. You know, I I still find it astonishing that that that you managed to have the vast majority of people around the world sort of going to suspension for for two to three months, and so there's going to be all kinds of changes. That's Steve Schwartzman, chairman, CEO and co founder a Blackstone Group at the Bloomberg

Live Invest Global Virtual event. What I loved about what he had to say, Jason and man, this was all over the Bloomberg terminal. He predicts a big V in terms of the economy going up for the next few months because he says it's been closed. But there's a lot of folks that say that's not going to happen. Well, and the market didn't seem to agree with him for much of the week, but it's hard to bet against

Steve Schwartzman. You're listening to Bloomberg b this week coming up, as the world continues to reopen slowly and piecemeal, how travel is rebounding from the unprecedented effects that the pandemic has had. We'll hear from Kayak co founder Steve Haffner talk about a front row seat. This is Bloomberg. This is bloom Bird Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. We're bringing you some of the most important and informative conversations that we have throughout the

week on our daily radio show. And Jason, of course, all of this happening in real time as a lot of news was changing again around us. Lin, Carol, we know there's been some optimism, but a lot more pessimism when it comes to travel. So who better to catch up with than Kayak co founder and CEO Steve Hafner. He's this week's Business Week Talks. We published data on Kayak from about a billion consumer queries, and it's actually showing you that there is some recovery in travel interest.

So the bottom period for for what we've seen in our querry volume was happened in April seven when queries fell year of a year, and since then they've been gradually recovering. So yesterday, if you look at the data, query volume was only down versus the previous year. So there's a long way to go to be sure, but consumers at least are thinking about flying again and they're

looking for trips. Tell us about you know, okay, so some I mean percentage wise, can you give us an idea because I know we keep talking about these numbers and they're coming off of such significant loads. I mean it's still way down, correct, It's still way down. So yeah, last year there was twice as many people looking for flights on kayak and there are uh this year as of yesterday. But that's that's come up from down the

first week of April, so it is a recovery. And remember this is search data, this isn't actually booking data. So that just means that people are thinking about traveling again, right, And I know that that is largely based on consumers.

Talk to us about corporate travel because I think we're all trying to figure that out, not just again from a personal perspective from our own work, but you know, knowing and talking to a lot of other CEOs about the decisions they're making in terms of, you know, maybe we should video con, maybe we don't need to take quite as many trips. What's your read on that? I share those sentiments. You know you're talking to somebody used

to travel on a plane almost every day. Yeah, it's been amazing boon to productivity not to have to do that. And I think this pandemics, you know, one of the few bright spots is it's taught people how to conduct

their affairs, uh somewhat efficiently online. So typically, in past recessions and we're in one right now, business travel is one of the last things to return because companies are are really suffering, right So consumers still want to travel, but consumers, but consumers may have may be able to afford that in a way that the business um can't.

So typically business is the last thing recover. I think it's gonna we're gonna see more the same now, and it may never fully recover back to the levels that that it once was because people have learned to adapt, so we may never see twenty nineteen levels again. We're preparing to see levels back in terms of total travel demand by about three That's kind of how we've structured our cost in our balance sheet. UM. But I think how people are traveling and what they're thinking about and

how often they're going to travel are different. And that's a big implications for how airlines do their schedules because you've got to remember that the business traveler usually is paying half the revenue on one of those flights. So I think they will see the frequency of trips go down, and I think you'll see average fares go up to as business Talver is no longer subsidize, you know, the

consumers of leisure travel. So what about on the open table side, what are you seeing in terms of restaurants. We're seeing recovery and restaurants as well. So people want to travel and they also want to dine out, and we're seeing a stronger recovery on on the restaurant side of the business half of you know, we've got about sixty thousand restaurants UM on the Open table platform, about half of them have reopened, which is great. And in terms of seated diners, UM, we we capture that data

and we make it publicly available as well. Um that was down only about yesterday, So so people are going out and a seventy percent it sounds like a big reduction, but you have to remember that because of COVID nine team restrictions, most restaurants aren't operating at full capacity. A lot of them are only outdoor only where they have set up tents outside. Were even that they have to

have their table space six ft apart. So a lot of them are you know, fifteen capacity, and you know they're they're they're selling every seat they can and every table they can, which is great news. It's not enough to keep them in business, find you, but but it does show that consumers want to get out of their houses. And to that point, I mean, I believe you guys had forecast and I think others have followed you in this regard that we could see a quarter of restaurants

across the country go out of business. Does that still feel about right or what are you guys thinking now? That's still our best guests. Restaurants are tough business. They go out of business all the time, as as you well know. But usually what location goes under it's because the concept was bad. What the management was bad and a new restaurant takes his place. That's not what we're

expecting now. So when we talk about restaurants going out of business, that means the location shutters permanently and becomes something else. And you know, it all depends on what happens with COVID nineteen and the restrictions, right, so can we safely dine out again and indoors? Will employees come back and start working in restaurants again versus collecting benefits were doing other types of work? So you know, well,

we'll see what happens. But that's that's our prediction. And that's Kayak co founder and CEO Steve Haffner also the CEO of Open Tables, so he has a window in and Carol, I think one of the things that we really like, he's got the data. Oh my god, he does. Jason, and it's this week's Business Week Talks. It's in the magazine, it's in our podcast feed, it's online. What's interesting My takeaway. He says how they're doubling down on some of their

business initiatives because of the impact of the virus. And he talked about grocery stores, universities and bars soon being able to use their apps. So definitely they are leveraging their platform trying to adapt to a changing world, that's for sure. You're listening to Bloomberg Business Week. Coming up, how w W, the company formerly known his Weight Watchers is pivoting amid our new world order. Our interview with

WW International CEO Andy Grossman coming up next. This is Bloomberg Busines Bloomberg Business Week with Carol Messer and Jason Kelly from Bloomberg Radio. Well, today we're being you something the most important and we hope informative conversations we had on our daily Bloomberg Business Week radio show. Carol, Yeah, and one of those conversations, she's a friend of the show, Jason, You and I both have spent a lot of time

talking with Mindy Grossman. She's a presidency of WW International, used to be known as weight Watchers, but she has been transforming that company thinking about wellness holistically. And I got to say that they've been going through a tough time because of the virus. They've had to cut costs, they've had to let go workers, they've had to shut down some of their outlets. We had a lot to talk about with Mindy Grossman. We entered the year with

unbelievable momentum. You know, we had launched my WW We were in the throes of our digital transformation. We did a nine city tour with Oprah, touching you know, a hundred and thirty five thousand people, and you know, then all of a sudden in mid March, um the world changed and we had to quickly pivot um not only for the safety and security of our employees and our members, but it was important to us that we kept our community together because of our approximately five million members who

are all digital. Per cent of them also attended our studios in March in six days, we had to train fourteen thousand coaches. We pivoted our whole products and tech team, and simultaneously, in twelve countries we launched virtual workshops, which in the first week we had fifteen thousand and they're

still continuing today. And that pivot for us, even though we saw suppressed subscriptions starting in you know, mid March, that started really picking up again, uh, starting in mid April, and you know, now our digital subscribers are at an all time high, as is our retention. And it was our maniacal focus on not losing our community in a world where community and motivation and support are really more

important than ever, just even psychologically for people. We also took the learnings from the tour we did physically with Oprah and said, what can we do for people who need this now more than ever? And we launched a four weeks every Saturday virtual tour with Oprah and made the decision to make it free globally for everyone because it's really what people needed right now, and that's what

our brand has stood for since the very beginning. And we had just in the first one over half a million people live and we've now had millions of people watched the content. UM. So what we've been trying to do is use this as an opportunity to accelerate our digital transformation, UM, reduce our real estate, bookprint, be able to add, you know, to the ecosystem of wellness, and you know, I think now we're seeing more than ever, health and wellness is on top of everybody's mind. It's

not a luxury anymore, it's a necessity. Talk about Mindy and I believe we've talked about this before. You mentioned her a couple of times the Oprah effect here, I mean, what has she done for the brand, especially in this time it feels almost more important to have that voice

for a whole variety of reasons. She has been such a partner to me since, you know, the day I joined the company, certainly as a board member, but also as a thought partner in how can we work together to really give people the tools and the motivation so

they can really live their best, healthiest lives. So, you know, if you look at what we've built out in terms of this wellness ecosystem, whether it's nutrition or activity or mindset, motivation, sleep, relationships, whatever, that is having Oprah and her voice to be able to amplify. And it's really her superpower is to galvanize people. And we really saw it on the tour, and we also saw it on this virtual tour, and I know she feels UM now more than ever. What we bring

um is going to be more critical for people. And you know, as we talked about moving into the broader scope of wellness, we said, we're never going to abdicate our global leadership in healthy weight loss, which is so important. If you look at the number one factor in COVID deaths with obesity. UM. Diabetes is a huge fact, sir. And we're seeing from all our data in terms of why people are joining UM. And what is that? What is top of mine? It's I need to be healthy,

not just for me, but healthy to others. I need to not get sick to get healthy, I need to prevent what is happening. And I think, you know, COVID has really changed the mindset. The other thing it's done, though, it's really identified the health disparities amongst communities, and I think that going to be a big focus as well. So maybe I gotta ask you because Carol and I both know you pretty well. We've watched your career, and I wonder you've managed through all sorts of crises before.

What's different about this one? From a leadership perspective and and from the CEO seat. Yeah, you know, I thought when I took my last company public in August two thousand eight, that was kind of going to be the biggest crisis I would have UM threw through. UM this has been. This has been very different UM. Number one, this is truly global UM. You know. Number two, there's an aspect of uncertainty that we've never had before. UM, you know number three, it has made us all isolate

in a very different way. UM. And all of those things, you know, you have to take in from a leadership uh perspective and right now and you know, not that it wasn't then, but the need to a communicate. I'm not just the CEO, I'm the chief communication officer, the chief crisis officer, the chief hope officer. What people are needing and feeling right now, UM, is they they want to know, you know, where they stand, what is happening

at any given time. And you know, my feeling is control what you can control, tell people what you're doing, galvanize them around what you can do, UM, and and keep that focus. And I'm very fortunate that you know, our leadership team has really come together. I mean we've we've built a culture of purpose and they're galvanized around how what we can do. And I'm galvanized around what we can do for them and for other I think the other thing that's different this time is the world

has changed since then. And UM, authenticity is really important. I say that. You know, people used to think vulnerability was a weakness. It's a strength. UM. People want to understand if they're feeling, you know, something that they're not alone. And so the number of town halls and the number of communications that myself and you know, our leadership team has done has been significant, and we have tried to

be you know, transparent. We've tried to communicate whether that's what's happening with the business, um, what's happening with you know, our studios or our offices or everything around the world. UM. And you know, I think that's that's that's been a very big, big factor in this and and and lastly, it's not just one thing. You know, we have a pandemic, we have a financial um, you know challenge, and you know, in the United States in particular, UM, you know, we

have a real issue in terms of racism. And you know, what we are going to do as a country, and what we're going to do is businesses. UM. So again, it's all of these things happening at the same time that really require um, you know, your ability or the CEO's ability to address them in a very humane way. And I think it's really a call to moral leadership right now. And what does that moral leadership looks like to you, especially around the racial justice issue. Indy. So

you know, for me, it's been devastating. You know, I've been such a champion of diversity, uh my whole career and it's it's been very emotional and uh, you know, I'm very fortunate my c h r Oh kim Seymour who who is a black woman, but she's been my partner and the two of us um have really you know, spent a lot of time saying, you know, how are we gonna you know, manage and what are we going to do? And we we had had and made progress, um around diversity within our company. There's a reason we

have a diverse board that didn't happen by accident. There's a reason we have a diverse executive team. But the first thing we did was do a town hall UM and said, look, we've made progress, but it's not enough, and we need to do more and we need to do it better. That's w W president and CEO, Mindy Grossman and Jason. I feel like every time you and I talked with her, we just want more and more time. She continues to be one of those individuals that whatever

industry she is, she really is transforming it. And she's definitely thinking about wellness in a very very different way, in a holistic way. Well. And she's the first to admit this time is hard, and this time is different. She looks back to the financial crisis, taking a company public in that but listen, trying to reshape and do everything she's trying to do with that company just got a whole lot harder in well. That wraps up the first hour of the weekend edition of Bloomberg Business Week

from Bloomberg Radio. I'm Jason Kelly and I'm Carol mass are plenty for you. In our next hour, we'll hear from Lenia Irvin. She's a president of the Center for Talent Innovation, spent a long time on Wall Street. She too is on the front lines when it comes to diversity and inclusion. So we'll have that conversation in just a moment. And speaking of the front lines, we're also

going to hear from Lebron James. I'm looking forward to the season getting restarted in back in the Laker uniform um and continue to to push the envelope not only on the court, but off the court. My conversation with King James and the man behind the legend himself, his longtime friend of business partner Maverick Carter. That's coming up later on Jason. It's such a timely conversation. It is this week's cover story. This is Bloomberg. This is Bloomberg

Business Week from Bloomberg Radio. Hi, I'm Carol Masser and I'm Jason Kelly. Today we're bringing you some of the most important, we hope in formative conversations we had on our daily Bloomberg Business Week radio show. But this week there's a little bit more. Carol, Oh my god, there's so much more. And I have to say, Jason, this is a story, an interview that you have been working on for months. It's such a timely interview with Lebron James. I feel like we don't need any adjectives in front

of him because everybody knows who he is. I have not heard true official apology to Colin Kaepernick on what he was going through and what he was trying to tell the NFL and tell the world about why he was kneeling when he was doing that as a San Francisco forty Niner. So clearly King James has some opinions about what's going on in the world. More of that Bloomberg Business Week cover story. Conversation is ahead. First of the Let's get to our conversation with someone who is

a recognized leader in diversity and inclusion. She spent a decade on Wall Street. She took a job at the Center for Talent Innovation in early March. She had a lot to say about the virus and racism in the United States. She is Lenia Irvin, president of the Center for Talent Innovation. Conversations are are critical, right, um, opening up safe space for real dialogue. UM. You know, it's a great way to ensure that your employees steel heard,

you know, UM, ensure that they're seen. Um. But it's also a really great opportunity for leaders and would be allies to listen right the active in in UH their leadership um, and and demonstrate from awareness of this moment in time, the context in which we live disproportionate impact. Right. I'm sure many leaders are. Of course they're considering UH, COVID nineteen and unemployment rates and UH and obviously they

cannot unsee racism and police brutality. UM. But at the same time, are they communicating, are they signaling to their employee base at this is top of mind for them. Um, you know, I think you know, I hosted a similar conversation uh, you know within my organization a couple of weeks ago. And you know, while on one hand, it was tremendous vulnerability from a leadership standpoint to share my experiences in the end after listening to uh, you know, the team share, but on the other hand, it was

extremely powerful. Right. It's important for leaders to be visible, to be vocal, And in this case, even if the conversation was difficult, it offered up space for story telling, it offered offered up meaningful bridging capital, and brought the team closer together. And so I think conversation is a good place to start, uh, you know, for for leaders looking to connect with their employees at this time. Lennie. The other thing, you know, and it's something Jason and

I've talked a lot about in particular over the past month. Um, we had a conversation conversation with John opbrien of Operation Hope and and what's interesting is he was talking with younger a younger population, you know, about why people are protesting and why does it get kind of sometimes you know, out of control a little bit, And and they said to him, you know, you have a seat at the table. You get to go to the White House, you get to talk to executives. We don't have a seat at

the table. You know, we're not in the room when it all happens. And so it's and as he said to us, this is a poverty issue. This is this is you know, a much deeper entrenched problem in our situation, in our system. What do you think we as all leaders and who have voices, what can we do to change that? How do we change that? Well? Right, well, I mean, first admit that there is entrenched bias, right that is that that creates barriers to UM success or

you know, access to meaningful work. But just you know that admission alone is a great step. And then I think, you know it's important for leaders to you know, be intentional about what they can control, you know, whether that's you know, hiring, development, promotion of key talent. UM. You know, representation is and and visibility is really important. Our research find um that you know, it's probably one of the most important things we do have UM talent. Uh, some

talents frustrated with their advancement. One in five black professionals, for example, UM feel that someone of their race could never achieve a top position at their company. I mean they can envision a reflection of their own image is a C suite or a CEO? Right compared to uh three sense as BLAE professionals right, and then professionals of color you know as a whole are less likely to

have access to senior executive advocates. One fifth of black employees and I would note of Asian professionals say that not a single leader knows them by name. Imagine being rendered invisible in connection to power and the long term

impact that could have on one's career. Right. So I think one one thing that will help, um, uh you know, organizations kind of bridge with with you know, emerging talent, those that are coming up in these organizations and they are um looking to eventually have a seat at the table. Acknowledge that there is a disconnect, right, Um, there's a there's a in are being black and corporate America research. One really big finding was a perception gap um that

was unveiled in the data. Uh So black professionals, for example, they witnessed, you know, they experienced serious to its advancement, but they seem this seems largely invisible to their colleague. So where six black professionals say yes, black talent has to work much harder to advance, only six of their colleagues agree with that statement. There's a material yet, there's a material perception gap that makes overcoming the hurdle of

repension development advancement that much more difficult. And that's Lenia Irvian, president of the Center for Talent Innovation, another very timely voice, Carol, and I have to say one of the things that struck me as I thought about our conversation with her is it was pointed. You know that this was not someone saying, well, we need to make some changes. Well,

let's see what we're gonna do. She was specific, and I have to say pointed that I kept coming back to that notion that it's time we got to do something well and what I loved, and I feel like I've been repeating it to everybody I talked to meet. She said that leaders coming out making statements about diversity, they first have to do the work internally at their own organizations to earn the right to make those statements externally.

That to me says it all absolutely and echoes I dare say of a conversation we're gonna hear later on with Lebron James. You're listening to Bloomberg Business Week coming up. As we all face increased levels of stress, you may be thinking about getting a massage. Maybe what does the future of the industry look like? We're gonna hear from Todd Left, the CEO of handen Stone Massage. Oh my god, if only he understands though so much about the world

of small business. This is Bloomberg Face is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. We're bringing you some of the most important and informative conversations that we had throughout the week on our daily radio show. A reminder, as we like to do, is that there was a lot going on, as everybody knows

this week, the news constantly, Jason, evolving around us. That's exactly right, and we know that the world has been shifting for small businesses, franchise ors and franchise so it was especially interesting to catch up with Todd Left. He's the CEO of hand and Stone Massage. They have hundreds of locations across the country. How they closed and how they reopened. It's instructive for where we go. Next part of our strategy was really, you know, how do you

preserve um the franchise e liquidity. That was that's one of the most important things because we want them to be around to reopen. And so one of one of the things they had to do early on was, um, you know, layoff all of the staff except generally managers and so uh within a two week period, we uh, the system laid off about eleven thousand employees. So it was a you know, pretty big hit and um, you know obviously to all those workers, you know, very unfortunate

as well. And so what's the process like of coming back, I mean from a safety perspective, from a worker perspective, walk us through the process of that. Yeah, so you know, that was my biggest concern early on. I mean, you know, when we sat there, you know, kind of mid March and in late March, you really have to answer first the existential question, as you said, Jay said, at the outset, can you do a hands on business safely UM with COVID nineteen, without a vaccine, without a really solid cure.

And so we didn't wait for you know, kind of the government to dictate policy or determine it. We we actually went out and engaged our own panel of health experts that we had an infectious disease research or several medical UH practitioners and then a medical director of a massage school UM to really help us design the protocols necessary up to you know, make sure that this process

could be done safely. And as we did the research into this, you know, it actually ended up and everybody learned so much over this course at the time that that our services actually relatively low risk activity because generally the disease was being transmitted through respiratory means, and so we're really more skin to skin hands on. UM. It didn't impact assuming everybody wore you know, had the proper

you know DP, it did not. It wasn't as risky as maybe the perception would be as you sit there from the outside. But we did we did have to develop a lot of new safety protocols and and so that we use that time wisely, you know, the month we were closed to to develop those protocols and then go retrain you know, ten thousand staff members on on how to do this activity as they reopen. So two

questions I'm curious about what those safety protocols exactly. Will it be like if I go in for a massage, is it somebody that's kind of suited up in a mask and they've got you know, um gloves on or something, you know, some you know. I'm just curious how it works out, and I am curious how many of your workers are you ultimately going to be able to bring back.

So as of the first question, there are a number of safety changes and you would see a different process than if you had went in, you know, prior to March First, we do require that all of the staff members wear masks. Astheticians who these are the folks who do the facial services, have to wear both masks and face shields during the service UH customers. We are UH certainly in most states, and we've worked with states in developing these guidelines. In most states, customers are also required

to wear masks while they're getting the massage. If it's not a state where it's required, then we we have a high recommend and we allow the local jurisdiction to set that up. We now disinfect the entire room after each service, so in between any service, the room is is disinfected. UM. We were fortunate that we had sinks in all of our treatment rooms and so we require hand washed by the massage therapists prior to the service. Some stage they require the customer to hand wash prior

to getting the service. And then a lot of things in the in just the transactional nature of it. UM going to a contact light transaction, we really close down a lot of the lobbies and we ask customers to wait in the car and we text them so they can walk right into the treatment room instead of sitting in a lobby. So you would notice a number of changes. I guess one of the things that strikes me is

all the stuff you're talking about cost money. So what are the things you have to do operationally to ensure for yourself, for your franchise ese that this business is able to continue in this sort of new normal that we're going to be in for some time. Right, Well, I think that in the short term we you see an increase in you know, our operational costs to meet these new safety protocols and guidelines. But UM on the the other side of it, obviously, UM demand has has

come back very strong. We are membership base as well. Although we have you know, we also served non members and guests, so a lot of our members over our member base stayed with us and continued to actively pay their membership fees during the time that we were closed. And that's Todd left the CEO of Hand and Stone Massage and Facial Spot. Important that we get that in there too, Carol, because it's interesting when you think about their lines of business, these are, to say the least

intimate interactions people. And I have to say I walked in thinking, all right, well, this guy is just going to talk about how everything's closed. Not the case. No, listen, what's interesting is they said even in the shutdown, everything was shut down by April for they still had their members staying with them. And remember both of us were talking about this afterwards. Of their comparable store sales, it is back. So it's interesting to see how they are

finding their way back to reopening. Amazing. A very surprising conversation, but also some very specific insights to to how you do it and also how you think about it as a small business. You're listening to Bloomberg Business Week coming up. Hospitals, Man, they are counting beds again as coronavirus cases rise. We'll here from Lloyd Minor, Dean of the Stanford University School of Medicine, and David Entwistle, President and CEO of Stanford Healthcare.

Lots to look forward to. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. Well, today we're bringing you some of the most important and informative conversations We had a cross our daily Bloomberg Business Week radio show this week. It was a doozy to say the Lea's Carol, especially as we saw all these headlines about the virus and one of the most important things we have to understand is how

does this manifest in hospitals. That was really striking to me, Jason, and you and I talked about it throughout the week that when we checked the most read stories, it's one of our favorite functions on the Bloomberg constantly. Now this week, many of the top ten stories had to do in some way with the virus. So it was a timely conversation that we had with Lloyd Minor, Dean at Stanford University School of Medicine and David Entwistle, President CEO of

Stanford Healthcare. They just opened a new facility late last year. We are seeing an increase in the number of COVID cases in many cities and locations across the United States, and I think that indicates that we need to continue to observe social distancing. The masking guidelines that have been rolled out in many communities. There's good evidence that masking helps to prevent the infection. It's gonna be, I think, a location by location decision as to what additional measures

are put in place. That is, whether or not we roll back from stage two where many places are today to earlier stages. But the main thing is we've we've got to be more prudent about UM as we resume activities, as businesses, restaurants, uh department stores start to open. We've got to observe social distancing. We've got to use mass um and do things that less than the spread of the infection. Well and David, largely because all of this comes down to or so much of this comes down

to essentially hospital capacity. So help us understand from the perspective of someone running a hospital what you worry about with this spike, and what hospitals like yours are doing and Obviously you're not facing at the moment any sort of surge, But in your shoes or in the shoes of others running hospitals, what are they thinking about. Well, no,

I appreciate that opportunity. One of the things that we wanted to do, and certainly with any slowdown, which we did as the initial pandemic came on, as we started to see the numbers dip a bit, what we were most concerned about then is getting some of the folks back into the queue that actually needed some of the

delayed surgeries and other things that were going on. We started with which I think is a bit of a model, building on what deed Minor said, actually doing testing, so making sure that the population that we had within the hospital itself, our employees are physicians, uh, that we were free of the virus. And we actually tested over twelve thou employees and staff and saw less than a point three percent of those staff actually had the virus. And so we knew that we were creating a safe environment.

But I think it's important despite being able to be there and be a resource for the community, we do also have to have capacity. And one of the things that we've done, despite opening back up doing our elective surgeries. Uh is creating still a capacity within the organization that's there and always available, because that really is the concern is if we get another significant spike, well, we have the capacity to be able to treat and we want to make sure that we're ready for that this time

without having to shut everything down. Well, Dean Minor, you know what have we learned? You know, here we are. Jason and I have been working from home essentially. Jason went into the office a little bit this week, but he's back home. But here we are, and I think week fourteen, week fifteen, Um, what have we learned from the medical perspective about how to treat with the how to treat the virus, how to stay ahead of it, how to watch for either another spike? I mean, tell

us what we've learned? Thank you. I think we've learned several things. First, is that this is a respiratory virus. The principal mode of transmission is from one person to the next through secretions through mucus through a cloth um and and there may be other modes of transmission as well, but the may danger is through direct contact with secretions of someone who is infected and it is a highly

infectious virus. We've certainly improved our ability to treat people who become ill in the hospital, our own hospital, Stanford Hospital UH. We have been a pioneer in the studies of RIM dissaver that has been shown to be effective and in improving the recovery rate UH and and perhaps also in lowering the risk of mortality from the virus.

We've been a part of those studies. We now have studies going on in the outpatient setting using anti virals at the time someone is diagnosed with the infection, before they become severely ill, using anti virals in a clinical trial setting in order to determine if there are therapies we can give to outpatients that reduce the severity of the disease and reduce the likelihood that people will need

to be admitted to the hospital. That's Lloyd Minor Dina the Stanford University School of Medicine, along with David Entwistle, Presidency E of Stanford Healthcare. Again, these are two individuals Jason, you have seen so much when it comes to the virus, both reminding us that this is still a very serious infection in that you know reopenings are rolling them back, which is something we talked about a lot throughout the week.

They need to be on a location by location basis and bottom line, we still need to be more prudent even as we reopen Absolutely got to look at the data and got to look at hospitalizations, got to look at this rising cases and figure out where to go next. You're listening to Bloomberg this week coming up. We've been looking forward to sharing this one with you all show long. I've been looking forward to sharing it with you for months.

Lebron James and longtime business partner la Rick Carter. Perfect for a weekend listening. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. We're bringing you some of the most important and informative convert stations that we had throughout the week on our daily radio show. And I gotta say, one of the best conversations Jason was one that you had this week. Well, I appreciate that it was one that I was looking

forward to timely, to say the least. King James himself, Lebron James, his longtime friend and business partner Maverick Carter. I had talked with them in February. I caught up with them again this week, all about their company, the spring Hill Company, that they are launching, but more importantly this moment and whether it will be more than that.

I think it's a special moment in the sense that, UM, you can be heard active activism and activists have always been around UM what people had a closed ear, in a closed mind UM and didn't want to recognize and didn't want to hear it, didn't want to be UM knowledgeable about what they were speaking, where they were coming from, the passions they were speaking with. UM. Now it's it's

being heard. People can be heard. Black Americans, African Americans, you know, can be heard, both men and women can be heard. UM. What they're passionate about and the calling for help and the calling for we're being We're just tired. So you know, I don't want to say activism is something that's UM. You know, now everyone's doing it now, It's always been around. But you know, in the in the case of George Floyd, in the case of so

many other UM, innocent lives being taken away. UM, they've put up a stand and and now you know, we're

being heard, and everyone is being heard. Um, not only um, you know, from from what Muhammad Ali was saying and so many that came before him and so many after him, but even the local people, the people in the community, because those are the real ones, the people that's in the communities, that's living and walking those streets and being racialistically profiled and being judged every day that they walk

in their cities. They're the ones that need to be heard, and they're being heard right now, and it's it's great to see. And so what does it feel like in Akron? I mean, you talked about Los Angeles a little bit, but you know, you and Maverick have said often that so much of what animates you started in Akron. You guys met when you were children, And I wonder how this feels there Lebron. No, absolutely, Um. We always we

always recognize where home is a home base. It starts there, you know, having my high primary school here and understanding the um you know the level of importance with my kids and you know when the pandemic, when when COVID started, it was it was it was kind of heartbreaking because I knew that my kids would have to leave the school. We had to shut down our school for a period of time, and I understand how important structure is and

hands on is with my kids and my school. So you know, that was very troubling times for me and troubling times for our facult team members and everyone that had to do with the IPS, because you know, we're so used to having our kids and we and we know how important having them in the classroom and having them underneath our our wing and our and our guidance. UM. So we're always paying attention to our hometown and listening

to the people, listening to what's going on there. Um. So that is constant every single day, no matter um. You know, me and Maverick living in Los Angeles, we we have hands on and and our ears to what's going on in our hometown of Akron Oholla's with Maverick, one of the things that you did during the pandemic that was forced by the pandemic was graduated together. Tell me why that was so important and what was different about it and what it represented for spring Hill and

what it says about the opportunity. Yeah, obviously, the pandemic unfortunately forced all of students back home, and and and as Lebron said, unfortunately, the kids, the students that I a school like, I promise the school is for a lot of those kids the safest places where they get

the most structured because home is tough. And and and especially for seniors, right high school seniors who did you know get the chance to graduate and walk across the stage and get the dipluma, which is a big moment for all of us, and and and even a person like me, it's the only graduation I've ever had, it's the only graduation Lebron has ever had. So it's very

memorable and as an important moment in everyone's life. So at the company, we got approached um by partners to come along and produce graduate together and do it with with Lorayn pal Jobs company, And it was just important that we really over delivered for those students, for those kids, it wasn't about us, It wasn't about the networks. Lebron did the fantastic job hosting. We were fortunate enough to have UH President Barack Obama deliver the commencement speech, But

it wasn't about Lebron. It wasn't about Obama, wasn't about us as a company. It was about creating a special memorable moment for those students, just like we all we got the chance to do when we actually got to experience it. Unfortunately they didn't. They had to do it

in their living rooms with their families. And that's what made me very happy and proud as all the text that I received from from families and parents who said that was a special moment from my graduating senior and now they at least have something they can remember it by, and we did a T shirt. We wanted to make it as special as possible and do it in the Spring Hill Away, which is bringing to life as a

as a show on Network TV. We did an after party on on Uninterrupted Instagram Live channel, and we brought a product, so we wanted to really give them a full three sixty moments so they felt very memorable and something they could always remember, just as though they could do it live and in person and Lebron We moved from that to More Than a Vote that was launched

officially this week. What does success look like from More Than a Vote as you look toward November, UM, I think success looks like UM educating the people that's own the grounds in these cities that we're tackling. UM. You know, we've had voter suppression for so for so long, people not understanding, UM, how they can vote, where they're where they can vote, if their vote really counts. UM. You know in the black community, you know you always here,

go out and vote. But what you don't understand is who am I voting for? Where can I vote? How many people am I voting for? What does these votes mean? What do they stand for? UM? So the education side, UM is what we're most proud about. That is success for us where we're actually getting UM, these communities out to vote, but they're even more educated on who they're voting for, how they can vote, where they can vote. UM,

they have that power. UM. There's some there's a lot of people that believe that they can't vote because they've had previous convictions with the law or or or they've been to jail and they've been told they cannot vote, that their vote UM does not get submitted to things of that nature, which is untrue. UM. In a lot of states that we're tackling, So to educate and to make aware of the people that's on the ground, that

has a lot to do with the future of our country. Um, that is one of the success that we can have. And we'll see what happens in November. And so Lebron to that point, what can you do given your stature, to ensure that this isn't fleeting? What are the things that we need to be doing and thinking about? What can you do to really take this forward in many ways? What are you thinking about? Well, for me, my mission doesn't change. Um, I've been doing this since day one,

you know. And Marverage just touched on a lot about our brand and our company and what we've been doing. But you know, even since I, you know, came out, you know, from from high school to the NBA, you know, instead of going with a company, I decided to hire my friends. I decided to have hire my friends. Um that I believe we can all grow together. We can we can we can have shortcomings, we can have bumps in the row, but at the end of the day, if we stick with one another and we're true to

each other, and we can build this together. So I've been doing this since day once, So my mission has not changed at all. Continue to educate myself because the more educated I am than the people around me will get educated as well and continue to pass that down to the youth. I mean, the youth is our future. I mean we look at the class of this year, the high school graduation, and there's nothing that they will not be ready for after having a year like this,

you know. So for me to have the knowledge that I have in the blueprints that I have to be able to continue to pass it down to the generation below me, to the generation that's with me, and continue to understand how important um these times of every day is. It's not being a leader is not when, it's not about when you decide to do it, it's every single day. And that's Lebron James Star of course, of the Los Angeles Lakers, and maybe more important for this conversation, chairman

of the spring Hill Company. His business partner, the CEO of that company, Maverick Carter. They've known each other since they were kids, Carol. This is a special relationship and where they are in the culture, where they are right now, is incredibly, incredibly important. And what I think is really fascinating, Jason, considering the backdrop of the last month that we've been talking about diversity and racism in America, I feel like this is a company for where we need to be today.

They kind of set the model well, and what you just heard, it's just scratching the surface. For the full interview, download the podcast. Just go to our podcast feed. You can get the whole thing. And let me tell you, it was wide ranging. We talked a lot about the issues of the day. We talked a little bit about basketball, but also to your point, Carol, where we go from here.

And I have to say it's a bit of a bracing conversation at times because Maverick Carter especially talks about racism, talks about what he has experienced, but also what it means to ultimately enabled this system that we've all been being a part of and hopefully what we can do about it. I'm just gonna say it's a must read, it's a must listen, and it's a must watch because you can check out your TV special and your conversation

with both of them on Bloomberg TV. That wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thanks so much for joining us. I'm Carol Masser and I'm Jason Kelly. Be sure to tune into Bloomberg Business Week Radio. Our show live Monday through Friday, starting at two pm Wall Street Time. You can also watch the show live on YouTube. Just search for Bloomberg Global News and in addition to our daily podcast plus the Lebron

and Maverick interview, download our Business Week Extra podcast. This week as well, we talk a lot about wellness, a holistic approach to medicine. Our conversation with Dr vj vot It was a fascinating one. He's a sports medicine specialist and he works at the hospital for special surgery. But he's thinking about medicine and treatment in the sort of way that we need to be thinking. Talk about innovation

in medicine. He is certainly working on that. And I'm just going to say that all the views that we had uh in our weekend show, many of them. You can find the full interview by checking out our podcast feed. Have a great weekend, Stay safe. We'll be back next week at the same time. This is Bloomberg