Businessweek Extra - John Donahoe

he sees in terms of the fitness industry. But what was really fun is there he is or he's been in Silicon Valley and we got to talk about some of those bigger, broader issues like the tech backlash that we're seeing his views on that. This is a guy. It's interesting his wife and you'll hear this in the conversation. She holds to keep position at Stanford. They were really partners throughout. She went to law school while he went to business school. So his perspective on this is wide ranging.

A very thoughtful conversation. Check it out. We gotta start John, uh with your time at Stanford. Take us back there. Well, I was I was blessed enough to at the g SB between nineteen and it was really, I think probably the most formative experience I had that has set me up for not just my career, but to be honest, my my overall life over the last thirty years. UM. I distinctly remember many of my professors as well as my classmates, and what Stanford really really grounded me in

was this notion of servant leadership. Um. It was a phrase I first heard at Stanford. It resonated with me. Ernie R. Buckle, it had been a former dean of Stanford and that's where the phrase came from. And if I were to say there's been one foundational, foundational, almost guiding principle for the last you know, thirty five years since then, it's been a real inspiration and attraction towards

this notion of servant leadership. Well, and there's so many full circle elements to this, and we're going to get to them throughout the conversation, one of them being the Phil Knight. This is school. But you were the winner, I believe, of the R. Buckle Awards, so clearly whatever you learned there really took root. I mean, when you go there in the eighties, Silicon Valley is certainly developed and developing, a far cry from from where it is now.

Why did you go West in the first place. Well, Stanford at the time that you know, I I went to Dartmouth College undergrad. I was fortunate enough as a senior in college to apply to a few different business schools. I was fortunate enough to get in. But I knew I wanted to go to Stanford because Stanford, as a as a senior and a senior in college rather in two it was known for teamwork. Um. It was known for working with and through others, and that was really

attractive to me. I'd played sports my whole life. I loved team sports. I had not yet been in business, but I knew that a team approach was what I wanted to do, and that was a reputation Stanford had. I'd never lived in California, So I joined Baine for two years, uh the agreement that I was going to going to Stanford, and when I came out, I certainly wasn't disappointed. Well, And it's interesting, John, I mean, because both you and your wife were there at the same time.

She was getting a law degree, correct, Yeah, a law and a master's in nation studies. Um uh so, yeah, joint a joint degree. What was it about those? And it was really the early years of our It was really it was sort of a quick you know, we came out there, we had we had been married, we had our first child my first term of of business school.

Eileen started at Stanford Law School that next fall, and we actually lived in married students housing for five years, so the two years I was at business school and three years after and and one of the things that Stanford really embodied was this notion of family. And Stanford feels like a family inside the business school and it's not a place where there's work at home or personal

and professional life, a more integrated understanding of life. I really felt like I learned at Stanford, and we were at a very formative stage of our marriage, you know what began, you know, a marriage and a set of dual careers that have intertwined for the last thirty five years.

And Stanford kind of legitimized that. They they they they took a lot of classes at Stanford that were about the human side of management, about the inner journey of leadership, not just accounting and marketing and finance and so in at Stanford it was very legitimate to talk about things like the inner journey of leadership, talk about your personal and professional life, and how to build an integrative life.

And so at a very young age and a very impressionable stage of my life, I feel like what I got from Stanford is those things were not only were they legitimate, they were the best way to lead a fulfilling and hopefully impactful life. It sounds like you feel like I learned that at Stanford. It sounds like you

got that early on. Because it's interesting, is I feel like the conversation among leaders today we're seeing it with the Business Roundtable that you know, yep, it's great to build a strong com many, a financially sound company, but it's not just about shareholders. It's a much more holistic approach to looking at a company's impact on society at large. And it sounds like you learned that early, very much,

very much. You know, Stanford embodied that. Um it was it was some of the other business schools at the time, we're almost kind of, you know, factories of certain career tracks. At Stanford, they really encouraged us to to go inside of ourselves, think about what spoke to us, what do we care deeply about to see the world in a fairly integrative ray way. They had a very strong public sector program that was integrated into the core NBA program,

not a separate program. And so this notion of you know, if I think about back in that period of time, this notion of servant leadership, this notion of an integrative perspective both of life and business, society and business, and also an integrative way to understand a business. I feel like those are all things that, um, I didn't know it at the time, how how valuable it was going to be. And I probably couldn't have use those words

at the time. I was just in the experience. But I feel so fortunate because I think those things have served me really really well in the last you know, the last thirty five years since then. So let's go back to the mid eighties when you come out. How does all of that inform the choices you make about the career you want to have and where you want

to have it. Well, it's a it's a funny it's a funny example because I made my career choice to go back to Bain after Stanford because I was following my wife in the sense that she was still in law school. And so I said, all right, I'll go back to Bain. They paid for business school. UM. I don't know if I would have chosen to do that or not, but by saying that I valued that part of our relationship, UM, you know, allow me to go

back to Bain. And I'll actually go back. One other story prior to this, and just and this just tells you about what's Stanford's like. During my first year at Stanford Business School, my wife applied to law school and she got in. And so during the beginning of my second year, which was going to be her first year Stanford Law School, we had a one year old child.

I went to the dean of the Dean of Students um Student Affairs at Stanford Business School, Jerry Gould, and I said, Dean Gold, I have to take next year off or I have to work part time because we have a one year old. We can't both be in graduate school at the same time. And this is classic Stanford, she says. Dean Gold says, oh, John, note, just do this. Go ahead and start and you know, if you want to take three classes instead of four, that's fine. Maybe

start with four. If you want to drop one, that's fine, and we'll be flexible. You don't have you don't have to come in with some preordained plan. So that was like that gave me go ahead. Well, what she did is she gave me permission to have an open mind and my and that said, hey, it was legitimate what my wife was doing and the fact we had a kid, as well as going to business school. As it worked out, I started that second year UM started with four classes.

I thought I was going to drop one, never ended up dropping one and ended up graduating on time. But Stanford, both institutionally for the dean and just the culture gave me permission to have the fact that it was a father, the fact that I was married to someone who was a peer and had a dual career that was legitimate. And so ironically I ended up following my wife when I went to bain Um thereafter, and you know that ended up working and okay, end up staying seventeen years

of bain who would have figured at that time. And so you find yourself then back in in Silicon Valley in many ways and have been there really for some of the most formative years as Silicon Valley finds its way deeper and deeper and deeper into society and culture, help us understand the connection in between Silicon Valley and Stanford, because in many ways and in many people's minds, they're inextricable. How how do we best understand that? Well? You you

just said it. You just said it, well, that they are inextricable. So, for instance, I distinctly remember as a business school student, Steve Jobs came to campus and gave a speech. Uh, Andy Grove came to campus, gave a speech, and you know, to be honest, we just thought that was normal. It wasn't even it was the Stanford largely because of its location, but also because of its culture. Um. You know, had a very um poorous experience with business.

Warren Buffett helped speak at one of the investment classes. Um. And so the outside world, be at Silicon Valley or the other business community kind of seamlessly flowed in and out, and you, as a student were probach enough to get to get access to at And then once I graduated, and I was part of the Silicon Valley community, first at Bain and then certainly at eBay, and now it's service. Now I'm frequently invited back to speak in a class or to do a suminar and and of course you'll

always say yes, that's why I'm doing this video. Dan Levin calls me and says, and you say, you know, I am so appreciative of my time at Stanford. It's like, of course I want to give back because what Stanford gave me has been invaluable and so and I think that's particularly true, you know around Silicon Valley that Silicon Valley learns from Stanford, and Stanford learns from Silicon Valley. Well,

and I think that's definitely continuing. And I think, you know, Silicon Valley so much a focus of the world at large and just big tech um, you know, whether it's by regulators, policymakers. I'm curious, having been so entrenched at several companies within Silicon Valley, what do you make of some of the scrutiny that some of the big tech players, whether it's a Google, whether it's a Facebook, um, whether

it's some of the other players. Amazon in particular, what do you make of that scrutiny, Because I'm sure it's you know, it's certainly being pulled into the teachings at Stanford. Well, absolutely, and here's what here's the to go back to my initial team, here's the army my wife today. My wife went on and had a career in law. She was

an ambassador to Human Rights Concil under President Obama. She now has a co director of a center at Stanford in the Freeman Spoggling Institute around digital governance and the impact on democracy and on human rights, so very much along these issues of the second order consequences and second order of issues of technology today, around privacy, around security, around things like fake news, and the impact I can

have on elections. And so I can happily say, like most things in my marriage, my wife is the authority on these particular topics. Well, well, Jason and I are just writing that we're going to have her on because she sounds impressive. Trust me, your ratings will be much higher when she's on then when I'm on, because she's the brains of the family. But this is here's the point. Stanford wants to be the place that's convening dialogue about

these topics. Stanford is the place that a Google or a Facebook, or Twitter or an Apple will come with an open mind and trusting that they'll be honest dialogue. And then Stanford's a place that that government, current government officials and then former government officials like my wife. Um, you know, whether it was Condi Rice, whether it's George Schultz, Bill Perry, a long history of of embracing both producing government policymakers and officials and then while giving them back.

And then of course the faculty bringing research, and then and then civil society and so both what in this case my wife's particular center, it's just emblematical what Stanford

does so well. And business school brings Silicon Valley and business and actuld tmia together and in this case in the public policy arena, Stanford is one of the few places in the world where all the various stakeholders and what is this somewhat emotional debate right now and somewhat polarizing debate, they can come and have honest dialogue with one another in a confident that Stanford will create an environment of of civility and respect to have that that

sort of truth seeking dialogue. And and that's true about the university in addition to the Business School in this case is being done or more in the university, but it is just part of what is in that you know, that secret sauce that is Stanford John. Just quick follow up though, but if you were at that center, you were pulled into a class and the and the students they were saying, Hey, John, what do you think about the tech lash that's going on? Should big tech be

broken up? What would you say? Well, I think I think tech is fundamentally the impact technology has had on the lives of almost every individual in the world old and by and large in society has been positive. Technology has brought transparency, Technologies brought opportunity. Technology has brought prosperity in general. But there are second order consequences and second

order consequences we haven't yet faced in the world. So, for instance, we have a legal system that's very clear in the physical world, right if if law enforcement has a concern, they can go to a judge that they can get a subpoena, that there's clear rules and what a subpoena can do. If subpoena comes to a company, you know what you need to do of subpoena. That hasn't happened yet in the digital world. So now we don't really have it. We don't really have a government system.

And we saw that in the debate between um, you know, the FBI and Apple a few years ago. UM. And so that needs to be thought through. And it's it. You know, we talked about innovation of products, that's innovation of governance. That it's the first time we're facing this, and there are second order consequences that need to be thought through. Similarly, technology is brought fundamentally good. It's connected

the world together. But something like fake news, well that's come out of kind of come out of left field. And I can tell you no one in Silicon valuing technology five years ago or eight years ago was thinking about fake news. No one imagine, Oh my goodness, that's how this platform can be used. Now we have to confront it. Now, we have to think through it. I was having a I was having a drink last night with a Mead Kordistani, who's the executive chair of Twitter.

And you saw you know, Twitter, Jack Dorsey and and Twitter scidy too to ban all political advertising. Okay, that may or may not be the right answer, but it's calm after they were thinking about it and trying to get honest dialogue and We're in an environment where you're dan if you do, dan if you don't. And that's just part of life that when when any time you're in the hot seat about something and they're differing perspectives, honest people can have, UM, then you know it's hard.

My perspective is this, it's it's relatively simple. As kind of a gray haired guy in Silicon Valley, I guess soon to be moving to Portland. Um. The important part is we engage in honest dialogue. We don't duck the issues. It's not that that technology was good and now is bad. That's not at all. The reality is technologies had a profound impact on the world. That is net net net

fundamentally positive. I deeply believe that. But it's also true that there are second order consequences and issues that are very real and we have to be able to acknowledge those and then engage in what is often messy dialogue where reasonable people can have different perspectives and see if we can get civil dialogue around or right. What are the issues? What are the remedies or policies or frameworks that can help us, uh, you know, begin to address

some of these issues. And it's going to take time. These are not simple issues, and so what doesn't work is the Polo titians labeling tech is the bad guys. I don't buy that. In the same way you can't be tech companies and stay government's bad regulations bad. I don't buy that either, and he is. This is gonna be the hard work of dialogue. And so, as you mentioned, Silicon Valley will continue to wrestle with this, and you certainly will be a part of this. You're gonna keep

your board seat at Service now. I think I believe through the end of your term you'll have a transition to deal with there with Bill McDermott. But we got to talk about your new job. As you said, you're moving to Portland to become the CEO of Nike. You've served on the board there. Why take this job now? Why bring it full circle, as you say, with your esteemed history at the Phil Knight Business School and now working for the company that Phil Knight created. Yeah, it

feels spite a big role to g SP. It's not quite called full night business goal but night now. But you know I was I is lucky enough and fortunate enough to meet Phil twenty years ago. And Mark Parker Nike's CEO, and I've always deeply resonated with Nike's purpose UM, which is, you know, bring inspiration and innovation to every athlete in the world. Asterisk around athlete. If you have a body, you are an athlete. And to me, that's around human potential. It speaks to each person on this planet,

around the potential they have within them. And sport is sport is a very powerful institution in a world right now a lot of our other institutions are falling down. They're polarizing, whether it's you know, government or politics. Sport is something that brings people together. It brings people together on a level playing field within countries and across countries. And so the the purpose of Nike and the role in impact it does and can have in the world

is just something that has I've always admired deeply. It's always spoken to me. And so, as you mentioned, I was privileged enough to be served on the board the last five years, and when Mark and failing the board UH invited me to have this opportunity to become CEO, it almost felt like UM a calling and UH and a cause that I had to pursue and very much along the lines of what we've been talking about in

this conversation. Nike is at the epicenter of many things, and I think has had a track record of playing a very positive role not just with its athletes and customers and consumers, but also in the broader society. And and so I am I'm feel very privileged and honored to to have the opportunity to serve continue my my my quest of servant leadership by serving the employees and customers and athletes and society around Nike. And I'm looking

forward to it. So if there's one lesson you could give to uh future NBA students, what would it be, just quickly our future advice? Just do it, Just do it. That's John Donahoe. He's Stanford Graduate School of Business, class of six. Week caught up with him because this week in the magazine. In Business Week magazine it's all about the top business schools in the United States, Stanford was number one. So he's an a lump so we talked with him. But he was chairman of the board at PayPal,

former president and CEO at eBay. He had some time at Banning Company, was a former CEO there, he's now at Service, now at the top job, but he's taking over the top job at Nike come the new year. A very important conversation. Important guy you're gonna want to keep hearing from, especially as he takes that new job. You've been listening to Bloomberg Business Week Extra, he short a tune into Bloomberg Business Week Radio Live Monday through Friday at TBM Wall Street Time, bl Bloomberg Radio. I'm

Carol Masser and I'm Jason Kelly. This is Bloomberg