Bloomberg Businessweek Weekend - May 15th, 2021

volatile markets. We saw global stock slide on inflation concerns. Yeah, we did a busy week here at Bloomberg headquarters. Lots of our colleagues return into the office for the first time in over a year. So it's good to see that things are slowly getting back to normal. I talk about this all the time. More and more traffic, Yeah, and a lot more traffic on the roads and in the elevators. Coming up on Bloomberg Business Week, We've got a jam packed show. We've got live person CEO Rob

Lacazio on the proliferation of artificial intelligence. Also an inside look at the volatile nature of the multibillion dollar video game industry. And we've got in music legend joining us as well. Rock and Roll Hall of Famer Nancy Wilson on self discovery with live music. She is putting out her first solo album ever. And you guys talk a little bit about the late great Eddie Van Halen as well.

Just some great stories. Well, all that to come. We're gonna begin this week with the cover story in Bloomberg business Week, The spack boom has sputtered thanks to SEC warnings and some disappointing performances. One guiding voice admitted all the former immigrant kid who is now worth billions, the so called pied piper of the recent blank check craze.

We're talking about venture capitalist to moth Pollyopatia. Bloomberg Projects and Investigations reporters Zeke Fox explores how Pollyopatia shaped the media and Wall Street narratives around Clover. It's a middling health insurer in New Jersey that he reframed as a disruptive and game changing profit machine. We're also joined by

Bloomberg Business Week editor Joel Weber. So the pitch for Clover Health is that it was a tech company that was going to revolutionize healthcare, and if you weren't listening to that closely, you might not even really pick up that it was really a health insurance company. And of course you can find this all out from its securities filings if you're the kind of person who reads those. But really it's a medicare advantage plan that almost exclusively

operates in New Jersey. Not really a very big company, and from talking to former employees, one that's had a lot of trouble hitting its growth targets in the past

expanding the way it wanted to. Now, of course they have this pitch now that they've invented uh tech tool that's sort of the culmination of, you know, a decade of their existence that's really going to bring together all their machine learning technology to analyze patient data and recommend treatments, and that this is what's really going to make the

company take off. Um. But I hope that the investors that are buying it understand that, you know, this is a pretty risky new business rather than something that is you know, guaranteed to go up, and you say, decade in business still losing money, So that if it was being taken public, you know, and it was going on a road show, you would certainly see, Zeke, it become

under a lot of scrutiny. Yeah, that's sort of the appeal of SPACs for a lot of companies is when you go public, the un writers are worried about getting sued if they make projections that are wrong, So you're

almost forced to dwell on your recent results. So if you're a company with like Clover that's losing huge amounts of money every year, but you're on the verge of a turnaround, you say, um, when you do a spack, you can talk more about your great future prospects and you can hopefully investors won't dwell on your recent losses.

And there's been just like a huge wave of these unprofitable UH companies with big dreams going public through spacts this year, and for a while it just seemed like all of them went up almost people were talking about it like it was almost a new asset class. You could just invest in SPACs and get great returns well. And then um, gravity kind of came in and and things have changed a little bit um and hence the spacticost flat cover. Um. Zeke, though, I wanted to ask

because despite what what we'll publish in the magazine. And Um, despite maybe that data, it doesn't seem like it might stop Jamas. Right, And even as you were working on this story, he announced that there was another one coming with a certain gym chain. So how do you how do you make sense of of of where Jamas could go with his vision of SPACs. So he has turned himself into kind of a brand name like Goldman Sacks.

And if you're a company that wants to go public, maybe you hire a bank to do an I p O. And now people are aware that there's another option that you could merge with one of Pollhopatia's SPACs. And my big question is whether the brand name can survive one or two bad deals. Um, if it was it was built on just sort of this to the moon idea. Um, is he gonna lose his appeal if he has a mixed track record like anyone who's bringing companies public is likely to have. In the long run, you can't all

be winners. But you're right, he's just the other day Bloomberg News broke that he is planning to bring the Jim chain Equinox public um. But he hasn't raised any new blank check companies for a while, So that's something to keep an eye on. If he's uh, raise those more gets closer to his goal of like he said, that was Bloomberg's Zeke Fox on the King of Spacks Chamas Pollopatia. But I think to his followers he's more of like a one name person Chama. People tweet it,

you know who they're talking about, like Madonna. He's definitely we within that world. And listen. I think for SPACs, uh, the history books will see how they cover this era because back is not a new thing. But man, we've had quite a boom in the past year. We really have. The big question is how sustainable is it because the last few months haven't seen that similar boom. Right, we're

not seeing it in the returns either. Coming up the changing face of consumer interactions, that is, they have no face at all, live person CEEO Rob Licasio on earnings and the booming market for conversational artificial intelligence software. It's about bots. It's when we go on a website, tim and we get to actually kind of talk with somebody. I feel like I'm talking with the person. Yeah, it's working, It is working. You're listening to Bloomberg Business Week. This

is Bloomberg. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes to insinivate from Bloomberg Radio to the next couple of segments. We're gonna take a look at consumers and shopping because we've seen a lot of changes, increasingly everybody going digital in the last twelve thirteen months because of the pandemic. And I guess some of the questions are what happens in a post pandemic world? And

this one next guest kind of gives us some clues. Yeah, it's Rob Lacatio, the founder, chairman, and CEO of the publicly held application software company it's called Live Person. He joined us after his company reported he's strong first quarter. He's someone we've talked to you though throughout the pandemic,

keeping my Live Person. It's an a I powered conversational platform for consumers to essentially talk with companies, engaged with companies, and Lacascio says, there's a good chance you've interacted with his platform, whether you know it or not. We're talking about bots, so much demand for UM you know, AI and conversationally on bots and messaging consumers, we want to do things differently, and so we had like you know, Dunkin Donuts now is using it for their consumers to

sign up for their loyalty programs. And there we got a big jewelry company, one of the public company's they're selling diamond jewelry with it, sort of like daun it's the diamonds. It's kind of like it's moving beyond care right now. We just sawty growth in the quarter. That's our highest glowth quarter in the history of our companies. So so for people who aren't familiar with the actual technology,

explain where they might have interacted with it. You mentioned a couple of companies there, and what exactly they're doing when they're communicating and do they know that they're not necessarily communicating with a real person. Yes, So like if if you've ever been on Delta Airlines or T Mobile or City Bank there, you'll be basically if you've messaged into using Apple Business Chatter or SMS or even in their app, if you're messaging with them like you do

your friends and family, you're using our technology. So sometimes it's not a live agent, and we provide an automated what we call botty chiplte that you can order a burrito now with a bot called Pepper and pick that burrito up at the store. So that's where you would have touched it. And we have eighteen thousand customers all around the world, so we do about eighty million people a month will be interacting on our system with one

of our eighteen thousand customers. WHA, So what's changed? I mean, you have a great you know, first of all, we've talked to you a couple of times throughout the pandemic and it's been great checking in with you because you do have a great vantage point. You work with a lot of different companies, different industries from that vantage point. We were just talking about. C e o s are not giving a lot of forecast longer term, so we're not quite sure what happens after maybe the pop in

the second quarter and after that. What would you say about the economy today and maybe out through the end of the year. I mean, we're seeing like we have a lot of travel, hospitality customers and some of the biggest brands in the world from hotels to um you know, airlines and man like they they reduced their staff in some cases down to like nothing, and now they've had the overhire for the amount of demand we're seeing their retail, online, retail.

We have some of the biggest home building companies in the world. We're seeing a lot of action. Their home improvement companies a lot of action there. So I think there are are are we're seeing basically across our customer base a lot of movements. So it feels like things are bouncing back now in our world a lot to

shift into digital. So I think those brands that are really being digitally forward and aggressive and really changing how they were doing business during COVID are gonna sort of they're gonna they're gonna really get the real bang out of as we come through this thing. So what does that look like on the other side in terms of how people interact with other people versus how they're interacting

with bonds. What do companies that are reopening or that have reopened need to be prepared for the different way that consumers want to communicate. What do you see? I think it's really like the retail, it's been really interesting retail,

Like obviously the retail physical locations got shut down. Now they're opening back up, but we're seeing such demands still in digital using messaging, allowing the consumer to have that personal experience, and that's what we need, Like we'd like to have conversations as people because it's how our brain works. We want to ask questions about products and we need that. So being able to provide that, especially in the retail area, I don't think it's about going back to stores. It's about, yes,

the stores will be there. But I can tell you these retailers were working with like this big jewelry company, like they have three thousand stores in the US, the amount of money they've they've created an opportunity digitally now where they didn't think they could sell like this, sell a diamond necklace or diamond ring, and they're able to do it. That's what they're really starting to see is that, oh, yeah, we should have done this a long time ago. This

is our future. We don't have to just rely on people walking in our stores. You and I talked about this, I think before. It was somebody during the pandemic that we talked with. It was kind of high end watches and they were doing virtual meetings with consumers to show them stuff, you know, and shot that way and personally these converse conversational bots. I kind of enjoyed. It engages me and I feel like I actually have some personal experience. Rob, Yeah,

and that's that's what it is. Like the version one of the bots a couple of years ago, we're pretty bad. But our platform and what we're able to do with it, and it's just the way we built the platform and the way we have the data and the way our customers can build their bods like Pepper this this bot for Chipalti. It's it's like you basically you talk to it and you have this relationships and you build a

burrito and and it's cool. It's like it's not just like give us your burrito order, Press one, Press twility, like you converse with this, like there's a personality and as personality. And that's the cool thing is that the websites are all sort of the same when you think about them, top navigation a bunch of texts and pictures. Every brand now can create a different type of think about it, like it's almost like they put a live human. They it's automated, but they create a personality for it.

That was Roblicasio, founder, chairman and CEO of Live person listen, I think about, you know, what I have done over the last twelve thirteen months. And when I go online, it's not just about looking at a website, picking things and just filling out the order form. Essentially. There are times I have questions. I did it with a paint company and I started talking with somebody. I did it with framing, somebody actually had an ongoing conversation. And I have to say, as a consumer, I really like it

because I get my questions answered right away. I do think it's something that has become as as the technology has gotten better, it's become increasingly acceptable to consumers because there is that fine line between what actually works and what makes a consumer more frustrated if they can't get the answer to what they're looking for. And I have to stay every once in a while, though, there's a bot that it's like, you can tell it's like standard questions.

You're like, no, that's not what I want, that's not what I'm asking, all right. Still ahead on Bloomberg Business Week, Ruin and Recovery in the video game industry. Bloomberg's Jason Schreyer on his book Press Reset, all about how our series of renowned studios fell apart. This is someone who knows the video game industry inside and it's a second book on the industry. Yeah, and it is a fantastic read.

Also up next the Shop from Home. Boom is here to stay, but now people are buying clothing and accessories for going out. Retail veteran Julie Bornstein on consumer spending patterns and the one year anniversary of her shopping app, the yes, are you shopping more? I am shopping a little more, a little differently. Yeah, I mean I don't shop much in general. Okay, okay, cat talk to your wife,

Yes you can, all right, that's coming up. This is Bloomberg Broadcasting from the financial capital of the world, Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg nine six to the country Sirius XM CHADO one nine team, and around the globe the Bloomberg Business app and Bloomberg Radio dot Com. This is Bloomberg Business Week. We mentioned we had a couple of interviews when it

comes to consumer spending. This is our second one and this next guest has a front row seat when it comes to consumer spending in retail. We're talking about Julie Bornstein. She's founder and CEO of the shopping app The Yes, which she launched him one year ago. Talk about timing, Yeah,

and she knows a thing or two about retail. She's a former chief operating officer of stitch Fixed, former chief digital officer at Sephora, executive responsibilities at Urban Outfitters in Nordstrom as well, and now she's steering a company that she launched during the pandemic towards a more normalized retail climate. So here's what people are spending their money on. When it comes to fashion, we definitely are starting to see sort of a turn in pattern. Um. I would say.

In the beginning of our launch last May, which was a crazy time to try and launch a fashion business, we were primarily selling casual clothes Zoom tops was a big category, and leggings and comfortable clothing, um. And it was interesting because we definitely saw, with the world really focusing on online shopping, an appetite for consumers to try out new apps. You know, I think as everyone started doing grocery shopping on instat cart and other ways of

sort of going through life. We saw a lot of people downloading our app called the Yes and UM, you know, I would say both playing around and uh sort of thinking about what they want to buy in the future and then buying pretty practical clothes. Um. But we started to see um, some light at the end of the tunnel of the COVID pandemic in the thought that people are starting to buy for going out. So we're seeing some occasion categories like dresses and heels, UM, and some

other interesting trends. How much are they buying and how much do you think has also been impacted as a result of the stimulus payments? How much has that given kind of maybe a boost to some of the business at the Yes. The Yes cells primarily branded um, you know, mid to hire price points, so we're probably a little

less sensitive to the checks. But I think just the I mean, I think a combination of the stimulus checks and the fact that sort of consumer confidence is growing and people just are starting to think about going out again is very evident in we're seeing an increase in total sales and obviously a change of what people are buying well. And so how has kind of what you've seen Julie and maybe the last few months maybe changed

your thoughts and thinking about the rest of the year. Um. You know, I think that the it's hard to predict how things will come back, UM, and I think it's gonna be, um, a slow, steady return, especially in fashion. If you kind of look at historical trends, you know, it takes a little while for things to come back. And it also, UM, I think there's sort of this combination of you have sort of this money that you haven't spent in this category, UM, so you're excited to

spend it. And on the flip side, you haven't worn anything in your closet for the past year, um, And so you know, I think and then the things that you have bought you kind of want to burn because you've been wearing but you have gotten used to wearing comfortable things. So I think there are a number of interesting dynamics that play and we're seeing a little bit

all of it play out. Um. Certainly in terms of some of the you know, if you look at the product categories that the fashion brands are making, they've added a lot of casual into their line and it seems as though they will keep that while also we'll start to see the return of more, you know, sort of clothing to go out in for occasions and ultimately for work, which I think will come back even later because return to office won't happen more at scale until the fall, right.

I mean, i'mwhere in heels, to be fair, I'm getting dressed up you so like you do get back and that's from you know, yoga pants and jeans and bare feet at home for eight nine months. Um Or is there anything you know, you're just talking about kind of how people are adapting some of their lines to include some of that you know, casual wear. But is there anything from the pandemic in terms of how we shopped or how we looked at the stuff we owned, how

that stays with us post pandemic. Yeah. I mean I think two of the um sort of trends that I think stick is, you know, we saw a step function change in the amount of purchasing online and so you know, there have been sort of there's been a steady growth in online purchasing. I've been in online retail for twenty

years and you know you've seen a very steady rise. Um. But I think we saw a step change function this year that will continue um, meaning that we've increased the trend and now we will sort of continue to grow off of that new trend. That was Julie Bornstein, founder and CEO of the shopping app The Yes. She was former chief operating officer of stitch Fixed, former chief digital

officer as Aphora or did Urban Outfitters Nordstrom. You know someone who really, you know, has worked in retail for a long time see me ups and downs and understands kind of the evolution in how we're shopping throughout the pandemic. We've been hearing from executives and talking about this a lot. The acceleration of trends pretty amazing, Caroll. To see a company get five years worth of shopping trends compressed into one.

That's that really stood out for me, just as a reminder of how much happened in the last year and and the impact it's going to have want all of us going forward. All Right, you're listening to Bloomberg Business Week coming up next, the rise and fall of some gaming heavyweights. We're talking about video games. Yeah, the dark side of the video game industry. We're bringing it to light. This is Bloomberg. You're listening to Bloomberg Business Week with

Carol Messer and Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. Do my reclose cover story Bloomberg Business Week from the summer. It was about the dark underbelly of a business built on fund Tim, this is a story about the video game industry. Bloomberg News technology writer Jason Schreyer joined us again, this time around talking about his new book, an excerpt

of which was just in the magazine. I could not put this story down when I started reading, and Carol, I'm not a gamer, and the mark to me of good writing is bringing someone in who has no experience in something, and that's how I feel about gaming. I just could not stop reading this. I was enthralled. Well, this is the second book on the industry, and he really brought it down to the people in the industry and how the ups and downs can really imp packed

them personally. The book is called Press, Reset, Ruin and Recovery in the Video Game Industry, and an unforgiving one despite the hundreds of millions of dollars that it generates. So with my first book, I kind of broke down the question of why are games so hard to make? And I kind of answered that through a bunch of

case studies exploring different games and telling their stories. With this book, I wanted to so more of a human story, tell the story of people in the video game industry and the hardships that they sometimes go through, and what that means for them, what it does to them, um, what kind of how it feels, how they recover afterwards. And through that I explored the question of why is this games industry which is making so much money, it made a hundred eighty billion dollars last year, Why is

it so unstable for its workers? Why are workers whether they have such a hard time keeping their jobs in this industry. You write it's about heartbreak and tragedy, it's also about recovery. I mean, there are several instances in the book where you talk about you know, people who have worked together, as you say, pulled all nighters, you know, working on games, you know, hitting deadlines and so and so forth, only to come in and just find out that they don't have a job and they're not going

to see these people anymore. Yeah, And it's not only that their games failed or that the company is in business trouble. Sometimes it's a successful game, as in the case of Irrational Games, which is one of the companies that I cover in the book. They made a game called BioShock, which is very popular, critically acclaimed. About a year after their most recent game, BioShock Infinite, everybody came in to find that the studio was shutting down. And yeah,

it can be really brutal. One of the worst parts I think, and I talked about this quite a book, quite a bit in Press Reset, is that, um, you are kind of stuck wherever you are, and you might have to move thousands of miles away. I didn't get a new job in a Rationals case. They were in Boston, and there are not a lot of other video game companies in Boston, so a lot of the people who wanted to stay and keep working in games have to move across the country, up with their whole families. And

it can be really just burn people out. It's it feels unsustainable to me. I feel like it's a company that goes bank right and then all of a sudden, everybody's in there, the vultures like I want the desks, I want this, But I mean, you talk about when a company goes down, one of these video game company goes down, then all of a sudden, recruiters fly and right to kind of take the workers. So they are in demand, but as you said, they often have to

be uprooted and move their families, maybe across the country. Yeah, it's funny. I saw it stat just the other day. That was essentially it was a list of job postings for the video game industry, and there were like a couple of hundred jobs here and there for junior level people, and then it was like thousands of senior level Apple

like applicated job listings for senior level positions. And the reason that is is because the game's industry has this dearth of people who have five ten years of experience because so many of them burn out. So yes, these recruiters are seizing in and helping to get some of that talent, some of that experience. But a lot of those people might not want to move. I mean, in the Rationals case, a lot of the people who were

in Boston. Um, maybe if they're in their twenties, they can move across the country and get these jobs they're kind of free. But if they're in their thirties, they have families, didn't want to pull their kids out of school, so a lot of them just left the industry entirely went to other tech companies in the area, UM finance company, banks, stuff like that, and that we are seeing uh way

too much. Well, we all got a tease of your book thanks to Business Week magazine where there was an excerpt in there, and that's where the Bloody Sox chapter, which is specifically about Kurt Chilling of the Red Sox UM.

Just give us a little little tease and and folks can go to Bloomberg dot com or on the Bloomberg or buy your book to read the whole story, because I feel like that chapter alone could be a Netflix series or a movie because it's just fascinating, very successful baseball player, but it didn't turn out so well when it comes to video games. Ultimately. Yeah, yeah, man, thank you for the kind words. And yeah, so Kurt Chilling, formerly of the Red Sox UM these days best known

as kind of uh provocateur, right wing provocateur um. But yeah, he very much like came from the baseball life. Was very much like I'm going to treat all my employees like all stars. I'm going buy them the best of the best, get them on these perks and the best health benefits, which on it's on the on the face of things, is pretty great by that. But he wound

up running the company completely out of money. They wound up taking a giant low and that was guaranteed by the state of Rhode Island for seventy five million dollars in exchange for moving to Rhode Island and getting a bunch of jobs. They're in Providence, um, and wound up burning through that in a year. Suddenly, one day everybody gets into works. They think they have been made in the shade that they're here at this company where they

are treated like the best of the best. They get into work one day and they are not paid their paychecks of not process. Because it turns up the company ran completely out of money. Um. None of them got severance, none of them got those final paychecks that were all robbed essentially of weeks of work, and all were stuck in Rhode Island where there are no other game companies.

It's a similar story, so Chason, chapter nine, Human Costs, Human Solutions, and you and you write, ask any veteran video game developer their least favorite thing about the industry, and you'll probably get a different for of the same answer. It treats people poorly. It choose them up and then spits them back out, leaving nothing but gristle and bones behind. So why do they do it? Because people go back, right?

Or do they go back to the industry? I mean they do write they like it well and pretty much a young persons industry. And um, there's a great there's a great quote in the book from a guy named Zack Mumbox who has been a long time at e A, and at one point later in his career, he said, I was looking around in the office, and when I had started in two thousand, I was in my twenties

and everyone else is in their twenties. Now I'm looking around my thirties and everyone else is in their twenties, and I'm like, where is everyone who came up with me? And the answer is that the video game industry, while it's certainly fun, I mean it's fun to work on games, and it can be really interesting and challenging and creatively satisfying. Um, all these these terrible factors, including the volatility that I cover in press reset um just lead to a whole

lot of burnout. Um. And I'm not sure how many of those people are going back. I think a lot of people just feel like games does not treat them. Games, the games industry does not treat them right. Is there any model that just seems to work above and beyond other models or is this just yeah, like, what are

the companies that maybe have done it right? Yeah? Well, there are a couple of things, and I explore in the chapter you mentioned, I explore some of the potential answers to these questions and solutions to these problems that I bring up there. Um. One is the big one is unionization, which has not happened in the North American

video game industry at all. Um. And you look at, uh, the video games kind of sister industry in Hollywood, and one of the reasons that people are able to maintain careers in that field just because they're unionized and so they have protections in place, and they might pounce around from gig to gig, but they know they'll get paid for every overtime hour, and they know they're going to get a certain minimum salary, and they know they're going

to get benefits and health care. UM. So that's a big thing, and I think that could offer some protections and give workers to see the table in the video game industry UM to a level that they haven't seen before. The other thing and this is it. It's wild timing. You were talking about zoom before and how a year ago we had no idea what it is. UM. I actually think that remote work is one of the big

solutions to the to the video game industry's woes. And I said that because, like I mentioned earlier, UM, the worst part about being caught in a layoffers to be a shutdown is knowing that you might have to move thousands of miles away, you might have to uproot your family. That's ultimately what drives a lot of people out of gaming. And a solution to that might be if hey, okay, I just got laid off, but I can just log into my computer my home office and potentially get a

job anywhere without having to move. That I think would keep a lot of people who left the industry from burning out because they would have to worry about moving to a new city every time they had to switch shops. So a game changer. Give me an idea too, you said,

it tends to be a lot of younger individuals. I remember doing a story on a video game company years ago out on the on the West coast, uh, in conjunction with it, think it was Stanford that either had a program you know, that was just specifically geared to UM teaching people to kind of how to be in the video game industry. What do they get paid typically? Yeah, I mean it varies drastically. Like if you're on if you're in San Francisco, coach, you're an engineer, you could

be making over six figures. It could be making a hundred fifty something like that. But then again you look around and face between Google and you could be making double the double that. So it's it's uh, it's all relative, right, UM. Yeah, I mean it could really drastically differ depending on your discipline, depending on your years of experience, depending on whether you're

at a big company or smart company. UM. But in general, the people on the bottom of the potem pole, the q A, which is quality assurance, the testers in the video game industry, they're the people who are paid to find all the bugs and games. UM. They're making around usually close to a minimum wage, maybe not exactly that, but um, twenty dollars an hour or something like eighteen

twenty dollars an hour, um. And then you kind of get bumped up over that as you become if you're if you're a junior designer, maybe you're making I don't know how forty fifty a year, and then you kind of go up from there. It is, by no means a well paying industry. It's not. It's not banking or chech or anything like that unless you are at the very top. Unless you're here. Yeah. That's Bloomberg's Jason Schreier on his new book Press Reset, ruining recovery in the

video game industry. Jason, by the way, also best selling author of his first book, Blood, Sweat and Pixels, also on the video game industry. That reps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser and I'm Tim Standard. That coming up in our next hour, Pulitzer Prize winning journalist Joyant Lublin on the importance of women in the workforce and rock and roll legend and Nancy Wilson fly solo

for the first time. I love that interview. Also, Americans faith in their biggest institutions, including the business community, remains fraud. Edelman founder and CEO Richard Edelman on his firm's latest trust barometer that's coming up. This is Bloomberg. This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. As it happened. It's Bloomberg Business

Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovin on Bloomberg Radio. Hi, I'm Carol Masser and I'm Tim stan playing ahead in our second hour of the weekend edition of Bloomberg Business Week, and we really dig deep, Tim into leadership and the workplace because there is a bit of a shift going on because of what happened in the past twelve and we're going to continue to see it. This one we're doing with former Best Buy CEO he Bears Jolie, who says that it's time to

enter the next era of capitalism. We'll also hear from award winning journalist Joanne Lublin on her new book Power Moms. It's all about struggles of women trying to balance management responsibilities with raising children. She talked to some really prominent female executives, many in the C suite, for her book. Let's Get It All started with an update on trust between A. Mary Kins and companies, the government, media and more.

We are talking about the trust barometers from the Global communications from Edelman, which this time around looked at business and racial justice in America, and for that we heard from Edelman founder and C Richard Edelman. We began with asking how the business environment has evolved in the past year. I think on systemic racism, there's an increased height of

the bar. You know, a year ago it was companies just saying or or or or or ads for brands saying you know how sorry we were for the murder of George Floyd. That's performative. Now we're looking to companies to actually make a big um commitment, a big difference, and you know, otherwise it's just not going to work. You know, Basically, there's such an opportunity for business here two talk to its employees, all of whom are looking for serious action on more diversity on boards, more diverse

city and senior management, change in the supply chain. So that you use black and Hispanic small businesses. And also they want CEO to speak up on voting rights bills, and how is it that we passed legislation in Florida and Texas that restricts people's right to vote. I think it's a great thing that we had record voter turnout

in UH this year compared to any election since. But that's not what some others see well, and I have to say it was a little surprising I think on some level that maybe Americans didn't think we made more progress. Dig a bit deeper into some of the data points. UM. One that came out for me through just people of color black, we're talking about UM, Latin Americans here in the United States, the Asian CE brands is doing enough to redress racism in their communities. I mean, that's a

small percentage. Well, Carol, the big thing that changed in this last year since we lasted this study is that corporations actually jumped about over fifteen points. Brands were flatlined. So again the idea that corporations have made some progress in their hiring and in promotion of people of color, UM, but a big change the Asia, the Asian Americans, they are seeing record levels of violence and all of a sudden, um, you know, six of them say the business community is

ignoring problems of racism against Asian Americans. So this is a big new constituency that we have to pay attention to do something to help. Well. And what's interesting is, um, the constituency is doing something right and they are stopping using a lot of brands right if they don't agree with how certain companies have responded to systemic racism. Wasn't it amazing that the respondents said they've actually changed brands

if they don't stand up and speak up. And I think a good example of doing it the right way is Dove where you see that, you know, for their Dove Men's UM. They showed on the n C Double A Men's Finals UM a ad that showed um, African Americans who have been basketball players who have gone on to great careers, and it says, you know, see African American men for who they are, you know, their politicians,

their business people, their teachers, They're not just jocks right exactly. Well, you know what's interesting is that, I mean, what is it that Americans, our consumers or customers want businesses to be doing is it transparency in addition to taking action but then showing you know the results of such. They

want to change the game. Example, KFC put a hundred million dollar fund together to enable African Americans and Hispanics especially who our store managers, to be able to become franchisees. They had a very low percentage of diverse owners and so they've changed it by putting up the equity money such that then that man or woman can go to the bank and borrow the money, then become a franchise

that puts them on the trained to success. And otherwise, these these sort of financial hurdles make it impossible to create step change. So Richard tell us, there's one finding that talks about the number of Americans who believe CEOs themselves are deeply racist. What did you guys find? So, look, I think that UM eight intent expects CEOs to act that they have to have a zero tolerance for racism and the organization. They have to ensure the organization is

racially representative of the country as a whole. They have to make sure that their training and promoting black and Latin and API employees. The question is are CEOs unaware? Are they or are they somehow you know, acting in a knowledged in a way in which they have knowledge of the racial problems. And I think CEOs have to pay real attention here. Two how they change their organizations. This is not something that's going to pass. This is absolutely as much an urgent issue as it was a

year ago. And the companies are being expected to fix problems that government normally would right that they're stepping into the void. My employer is the most trusted organization, big jump seventeen points and my employer, meanwhile, government pretty well go sideways. And you know it's twenty points higher than business and thirty points higher than than than government. My employer. So my company's got to act, that's what I'm expecting. Well,

that's Edleman, founder and CEO Richard Edelman. You're listening to Bloomberg Business Week coming up. He was at the Helm when Best Buy emerged as one of America's top electronics retailers, and now he there Jolisa's it's time to reach think how we look at stakeholder capitalism and prioritize purpose over profits. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick takes Tim Stenovik from Bloomberg Radio. Kuber Julie ran best By a CEO for about seven

years before transitioning to chairman for another year. He is on the boards of J and J. Ralph Lauren a senior lecturer at Harvard Business School. He has done a lot. Yeah, He's been recognized as one of the top CEOs in the world by the Harvard Business Review, one of the top thirty CEOs in the world by Barons, and one of the top ten CEOs in the US by Glassdoor and Tim. We caught up with him to talk about his book, It's just at the heart of business leadership

principles for the next era of capitalism. Safe to say things are changing, well, I think it leads to evolve right the shift if we locate it. It's clear that we're facing a multifaceted crisis, right, health crisis, economic crisis, societal crisis, systemic racism, environment, political or the all you can eat menu of challenges. And so what's the definition of madness? Carol Right doing the same thing and hoping

for a different outcome. And I think I've bested by over the last eight or nine years, we've demonstrated there's a very powerful way to achieve extraordinary results by putting people and purpose at the heart of business. And I think that's a philass of fee that is particularly relevant today because I think we need to see businesses be

a force for good. I think I've seen best by the power of unleashing human magic in support of that purpose, and the importance of embracing all stakeholders, including community and the environment, and treating profit as an outcome and not the goal. Even though you know, during my tenure or since I became to Seal, our share price went from eleven dollars to now between hundred and ten and h

twenty sorts of a powerful for me. It's one that's very relevant today, very needed, and I thought that in writing this book, leveraging the experence I've had, you know, I could help others on the journey. So many of us on this journey right doesn't want to be on that journey, and who are eager to lead from a place of purpose and with humanity and we although it's desirable and it's hard, and I think that's with the experience I could help. Well, it's interesting you talk about

you know your kids. You talk about the dinner table, how you your children talked about how excessive consumerism. I was drawn to this in the book Excessive Consumerism and waste was contributing to global warm warning. I have to say, no one calls me on the carpet like my eighteen year old about the impact things we are having on society or the things that I've done or she thinks I've done in my world and how it's not making it a good world. But they do think differently. They

look at products differently, brands differently. What can we learn from a younger generation? So have to disclose something to you. My daughter went to Boundard College, same as you. Great love that of course, and she together with my son, are saying exactly the same thing. And it's a call for action. Right. We need to create a future that does not exist yet, but that needs to be more sustainable. And my experience at best bias that we can embrace

all the dimensions, all of the stakeholders. So at Best Buy, for example, and we're not perfect, right, We're on this journey. We've had this recycling program right where you can bring all of your old electronics and then we'll work with partners to recycle it. It's good for the customer, it's good for us because it creates traffic to our stores, and it's good for the for the planet. Same we're working with vendors on the circular economy. Same at our

flown where on the board. You know, the power industry is a big polluter, So how can we use plastic bottles. That's what graph has done Plastics recycled plastic bottle to create the the Earth's Polo shirt. So you see businesses that are embracing these principles. And we have a ticking time bomb. Love Bill Gates book right we published in February. We have thirty years to get to net zero. And I think that if we all mobilize and stop I

think this excessive focus on profits. You know, we have to start with how can we create some good things in the world. How can we mobilize the human resources? People are not the problem? Right sometimes you know, turnaround? You know the advice I got you in twent twelve when I studied is cut cut cut right, Like if people are the problem, no, people are the sourced There the solution. By first week on the job, I spend it listening to frontliners, and so I think we need

to think leading differently. And that's what I'm calling for, is a re foundation of business and capitalism around these principles of purpose and people at the heart of business. Yeah, there's a section in your book about cutting jobs as the last resort that definitely chopped out for me. Let me let me ask you something though, because you know, how would shareholders really react? Though? If you are another CEO,

you know you make profits. Maybe this is the wrong word and afterthought, I mean it's hard as a publicly held company. I understand purpose, I understand e s g uh, and I do think it's becoming you know, easier to do that financially. But if you've got to make a decision between kind of doing the quote unquote right thing versus being profitable, especially if you're public, how do you do that? So I think it was three years ago Cal actually told our shareholders we was at an investor conference.

He said, our purpose as a company is not to make money. It's a now it's an imperative, it's an outcome, and you guys are a very important stakeholder. So we're going to take care of you. But the way we're gonna do this is by first focusing on doing the right thing, and we're gonna work hard to then create

profit as an outcome. One of the things I've learned, I think it was thirty years ago when I was at McKinsey from a kind of mind it told me there of the questions that I asked us, either or a better answered that, and to fuse the tyranny of war and embrace the power of ants. And I think our challenge as leaders it's not easy, but it's doable. That's what I've learned during my career, in particular at best Buy. You have to force yourself to find ways

that our win win win. Uh. And so my view of purpose and stickholder capitalism this is not at the expense of shareholders. This is in fact how you create, you maximize, you know, performance for shareholders, but not at the detriments of other stakeholders. That's what I've learned. That's you bear Jolie really successful career in the C suite,

of course, but now his mindset is changing. Is he imparts wisdom to current in future executive Carol, I I do wonder to what extent this type of thinking actually is going to stick moving forward, because look, when we talk earnings, we're talking about the top line in the bottom line, and we're talking about outlook, we're not talking about different different forms of capitalism, right, and investors are

reacting to those numbers. I remember in our planning call before doing this interview, and you said, you know, I wonder if you know you put it off two shareholders and say, listen, we're going to be a better company. We're going to put purpose over profits, which means maybe we will be as profitable. How they will feel about that? And I think a lot of investors might be like, Okay, good,

but I still want to see you being really profitable. Right. Look, It's it's one thing for a private company like Patagonia to do that. It's a completely different thing for a publicly traded company. Still to come on Bloomberg Business Week, we're gonna stay on this theme about how work is changing, leadership is changing. We're gonna catch up with Joanne Lublin of the Wall Street Journals. She's a Pulter Prize winning journalist.

She's got a new book out on power Moms. Got to Say Tim In the last year we've seen women slide back when it comes to some of the inroads that they've made in the workplace. They are juggling a lot right now, taking care of kids, schooling kids at home, taking care of maybe elderly. It's not easy. It's not easy. We saw that data just recently in the latest jobs report that all the new jobs that came back, those

went two men. Yeah, exactly. Plus how a year away from touring helped a music legend right her latest chapter, we're talking about Nancy Wilson. Yeah, she's going to join us on Bloomberg Business Week. She talks about a song

that she wrote about the late Eddie Van Halen. Now life on the road to This is Bloomberg Broadcasting from the financial capital of the World, Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one does San Francisco, Bloomberg nine sixty to the country Sirius XM Chado one nine team and around the globe the Bloomberg Business app and Bloomberg Radio

dot Com. This is Bloomberg Business Week. As promise, we're going to continue talking about what's going on in the workplace. Things are changing, and that has certainly happened for women in the past year. They have been hurt disproportionately harder because of the pandemic. Joanne Lublin was The Wall Street Journal's career columnist for many years. I knew her when

I worked at the Wall Street Journal. She's also an editor covering workplace issues from the c suite on down, Poulter Prize winning journalist, and she still contributes to the Journal. She's the author of two books about female business executives. Her latest is Power Moms, How Executive Mothers Navigate work in Life, all about that delicate balance that women with management aspirations are forced to deal with while raising families. And it's become that much harder, as I mentioned earlier,

harder during the pandemic. She explained to us how her last twelve months has been that's where we started. Well, the last year has been sort of anticlimactic for me because I turned in the manuscript for this new book literally on the day before America shut down, and I had been a hermit for the prior nine months writing the book, and I thought, oh great, now I can go out and party and socialize and take some trips, and you know, then the world's kind of turned on

its head. And so I've been doing what everyone else has been doing, which is basically, you know, quarantining in place. I've taken flights twice in the last year to visit my out of town grown children and grandchildren. But that's about it. Yeah, interesting, and I do wonder how are you thinking about women right now? We talked about some data that showed that women dropped out of the U s labor force in April for the first time since January.

It was I think initially we thought Joey and the pandemic would be maybe helpful for women, you know, finally giving them some flexibility and how they worked and took care of their families. And yet we're finding out that that's not the case necessarily. Unfortunately, that is indeed correct, and in fact, the Wall Street Journal did an analysis of US data and they concluded that they're nearly one point five million fewer working mothers in the workforce than

before COVID nineteen. And this is especially hitting women hard who have school aged children. They're having a difficult time returning to work because frankly, the balance of power in the home. As much as has shifted somewhat, dad's have certainly picked up a bigger share of responsibility while everyone's been working from home, the burden is still squarely on mom's shoulders, particularly when it comes to school aged children. Is that even for younger generations of couples that it's

still the case? Well overall, that's what the studies I've seen have suggested, But certainly in the women that I interviewed for the book, I saw a marked difference between generations. For this book, I interviewed women from the Baby Boom generation, my generation, to look at the first wave of women who had gotten an executive level roles in business and also had kids, And then I compared that to a similar sized group of women who were millennials and Gen

xers anywhere from their early thirties to early forties. Altogether eighty six such women plus twenty five adult daughters of the boomers. And I was looking to see what had gotten better, what had stayed the same, and what had gotten worse in terms of how they navigated work and life. And to your point, yes, I did see that there were improvements among the younger generation when it comes to sharing the duties at home. But we haven't gotten all

the way to the you know, goal line yet. Yeah, no, exactly. Well what's interesting is talk to me a little bit about your book. What did you set out to do. You've written books before. What was your hope to do

with this? Well, my hope was to explore just that because my first book, which was called Earning It Hard One Lessons from Trailblazing Women at the Top of the business world, looked at fifty two high ranking corporate executive women, all but one of whom were baby boomers, and of those women, it turned out, had children, and among those who have become public company CEOs, the proportion was even higher. So what was their secret sauce? Well, they were trailblazers.

They were the pace setters. They were the first, frankly of their generation to get into the executive suite, and in many cases did so while having children. And it just made me wonder, have things changed all that much for that younger way the women who in more recent years have become executives after having children or having children when they became executives. And when I found was that definitely things have gotten better. The Wall Street olds Joanne

Lublin on her book Power Mom's Carol. Something that's happened during the pandemic is I've returned to work, but my wife has been working from home for more than the past year, and she just started going back to the office. But what I saw play out in our household over the last year has really what has played out across the country. Because she has been home, the work of the home has disproportionately fallen on her. Yeah, and listen.

I think initially we thought the pandemic was going to provide women some flexibility of maybe being at home, and that it would be an advantage and help women in the workplace. But as the months played out, as the numbers showed, that wasn't the case, and that women have definitely slid back because of the pandemic. All Right, you're

listening to Bloomberg Business Week. Coming up, we're gonna wrap up do something a little bit lighter with rock and roll Hall of Famer Nancy Wilson, of course, one part of the great Iconic rock band. Alright, we also get to hear some stories about the late great Eddie Van Halen. You do not want to miss it. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovy from Bloomberg Radio. We welcome back.

So that's the title track from Nancy Wilson's first ever solo album. It's entitled You and Me the track in the album. Nancy, of course, along with her sister Anne, are the iconic rock band Heart in the Rock and Roll Hall of Fame. They were touring just before the world shut down because of the pandemic, and during the past year as the world stopped, Nancy produced this new album working at our home studio. It will be released

May seven. Let's get more cuss lucky for us. Joining us is singer songwriter Nancy Wilson, also author of Heart memoir Kicking and Dreaming, and she joins us on zoom in Los Angeles. Nancy, so nice to have you here with us. How are you. I'm good. How are you doing over there? We're doing okay. You know, we're feeling like things are starting to open a little bit. Well,

I'm in northern California now. We moved here right in time for the shutdown actually, which was a very very lucky thing for us because we got to kind of get out of this the big city, which was maybe a little more scary to be there then. But uh, now it's you know, it's been going well. There seems to be some light at the end of the tunnel. Um because of the vaccines obviously, and the and following

all the rules and the protocol is working. So it's really a beautiful, um thing to be able to say, you know, go into inside in a restaurant and you know, with a mask of course, but and then you know, we dined for for our anniversary, and the other night we went and had dinner at a favorite restaurant and that was like really like oh my god, really exciting

right right, like getting back to quote unquote normal. Um, it's interesting over the past year, a lot of musicians and it sounds like yourself, you know, once you found your footing, have been very creative and productive over the past year. Tell us about this new album that you

are putting out. Well, I I started realizing, you know, after we moved in and and and we realized we might be here for a while, shut that shut into our home, not daring to go out, and you know, even touch anything or just all of the sphere at the beginning of this thing, but I did have a new space to do music in. So I got my stuff, you know, out of storage. I pulled it into my space. I got my best guitars out. I got my amps out, and my pedals and my microphones and my new interface.

A friend of mine nose how to run for me, and uh, just a real simple gere and the simplest but you know, the old guitars that have the good sounding dirt in them and the old amplifiers that have the sounding dirt in them. And decided to start writing again since a lot of people have said, why aren't you gonna do it's all album? Ever, you've never done it yet, so only a live thing once, but that wasn't a studio album, and and so I started to write.

And the first thing I wrote was called um We Meet Again, which I thought was a kind of a long view at the horizon of your life a little bit, and feeling like when you have somebody that you love, you're gonna be there with You're gonna be there for them, and they're gonna be there for you for the for

the entire ride. So Um, I thought it turned out nice, and so I kept writing, and I kept writing, um, and and then I decided to do the Rising of Bruce of Bruce Springsteen cover pretty early on because I saw how the world was suffering and how that song had been written for nine eleven originally, which I thought was really appropriate for the times, and it might be something that's maybe a little aspirational for people trying to get through all of this loss and all of the

fear and all of the suffering involved in this whole this whole whip lash of experience we had to be tossed into, you know. So I think, um, it's sort of a woman's voice singing a song like that was even more kind of mothering and nurturing and and aspirational. So that's kind of where it started out, and I kept I just kept on building songs. Well, tell tell me that, because it really does feel like a very thoughtful and very deep and very reflective of what you

were going through. And I think it will I think for people who listen to it will feel, um, some connection easily with things that they were going through. And one of the things I think about the past year, we lost some really incredible people in the music industry, and you have a tribute to Eddie van Hale and

let's talk about that. Yeah. Well, somebody said you've got to do an instrumental song on your album, which I said, okay, you could twist my arm, you know, because I love just playing instrumental stuff because I did a lot of score scoring of movies before in the past, and it's it's a great thing to be able to transition between

songwriting and just instrumental writing. So I somebody said, okay, I'll do I agreed to do it, and then I said, and not only that, I'm going to dedicate it to Eddie van Halen and then and then I was like why did I say that? Like I was like, oh no, now I've really painted myself into work arder, you know, because I have to not have to actually come up with it and figure out how to do it, and and you did. So I really avoided it. I avoided it.

I've procrastinated as long as possible. I finally got my head around it when I thought about, you know, Eddie's I listened to Eddie and even I listened to Van Halen songs and I watched a bunch of his footage and I thought, well, here's something I know that I could try to do. Is it's something in a very happy key. Like his music was all very major key stuff. Um, you don't hear a lot of blueslicks, you know in Van Halen songs, you're you're positive, forth right, jubilant stuff.

So that helped me figure out, like how to find the right key, the right tuning, the right um structure where you a little bit of a classical, a little bit of rock in the middle, and then a little classical at the end and not too long like in score scoring for film with anything without lyrics in it, you know, might text the listener a little bit. I kept it short and sweet just for Edward. Yeah, I love the title for Edward. And I mean you guys toured together with Eddie van Halen. I mean you have

a story of memory. Well, we did tour a bunch of different places and times together, um, and we always found each other hitting it off, you know, like backstage or you know at the hotel, passing in the hallway, you know, and they were like, hey, come down and have a drink with us in the hotel bar. And so it's like, okay, great, we'll get to know you. And so they were drinking Kama Kaze's and WHOA, what is that? Here? Try one? You know, They're like, whoa,

how do you drink more than one of those? I'll never know. And those guys were pretty, you know, pretty heavy duty partiers, and they were pretty primal with it. They would get all tangled in some kind of an argument and then they they started hugging and going, I love you man, and they were just really primal with

their party. And but they were really sweet guys. And Eddie's a sweet person who was very we were just we were kind of fond of each other because he's told me he liked my guitar, my acoustic playing, and I couldn't believe he even said it, you know, And and then he's I said, what about you? Why don't you play more acoustic? And he said, well, I don't

have an acoustic. I made a little video story Storytellers video about it with the song but um, and I said, well, you're gonna have this guitar right now because you need an acoustic. So early the next morning, when it's just getting light, he calls my hotel room and plays me this gorgeous piece of instrumental acoustic music which I when I was trying to recall that as much as I possibly could do for the for Edward tribute song. So I don't know if I get close, but I got something.

It's really I got it done. It's a really lovely tribute. I have to say, Um, you're incredible. I grew up with a lot of music, from Sinatra and Polkas to the Beatles, the Dead Heart, you name name it. So um, you know, music really shaped me in my family, and I can kind of feel it. I feel like when you talk about it and how it influences you and the people you met. I have to say, one of my favorite things that you and your sister did was the Kennedy Center Honors when you guys covered the leaded

Zeppelin Stairway to Heaven. Uh. That must have been incredible to do with led Zeppelin looking on. Yeah, well we couldn't. Luckily we could not see them in the balcony from the stage because of the light they were tearing out that. You know, it was like that was a tough room. You know, that's all these dignitaries and really famous people and the President and the First Lady were there too, and led Zeppelin no less, so you know, we were we were very methodical in our approach to uh, focusing

in on starting the song. We had to take a really really deep breath and you know, like a yoga kind of a breath. That's rock and roll Hall of Famer Nancy Wilson of Heart talking about the late great Eddie Van Halen. I love hearing about stories like on the road and you know, different musicians meeting each other and their interactions. What's also interesting is that over the past year, a lot of musicians, they were out touring, they had concerts planned, all of that had to stop.

Their world was up ended like all of us, but they used that time often to produce some new music. Yeah. It's something I thought a lot about during the pandemic, whether it's literature, whether it's fine art, whether it's music. Are we going to see some sort of explosion in the next few years of art that was created during this time? Yeah, I wonder about like virtual concerts, like well they continue doing some of that stuff, which would be kind of fun. Alright. 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 Tim Stanovik. Be sure to tune into our Bloomberg Business Week daily show. It's Monday through Friday and it starts at two pm Wall Street Time on Bloomberg Radio. You can also watch our daily broadcast on YouTube. Just search Bloomberg Global News and check out our Bloomberg Business Week podcast. You can find it at Bloomberg dot com, Apple, or wherever you

get your podcast. That's where you can find kind of the full conversation stions of a lot of our interviews throughout the week. Bloomberg Business Week also available on newsstands at Bloomberg dot com and on the Bloomberg Terminal. You can also see me on Bloomberg Quicktake available at Bloomberg dot com, slash Qt, and streaming platforms like Roku, Apple TV, Samsung TV, and more. Have a great weekend. Stay safe everyone. This is Bloomberg