Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Well, today's probably a pretty good day. Where's good day? As ever? To talk about leadership, we saw here in the US this week the inauguration of a new president and administration. Carol, you and I twenty four hours ago, we're covering that. We're still covering the president's first full day. We do wait to hear from him as he plans to speak with tech executives to make a big infrastructre announcement at the White House. We'll bringing those comments as
we do get them. Leadership, though, and different types of leaders and what makes a good leader is Adam Glinski's world. He's Paul Collello, Professor of Leadership and Ethics at Columbia Business School. He's got a brand new book out, Inspire, The Universal Path for Leading Yourself and Others. Professor Glinski joins us here in the Bloomberg Interactive at Brokers Studio.
Before we get into what you write about this inspiring, infuriating continuum, the different types of leaders that were out there, I want to hear from you how this book came together because you essentially created a class at Columbia Business School that every person who goes to Columbia is required to take.
Yeah. So I've been studying leadership and teaching leadership since two thousand and two. Originally I was at the calleg School of Management TAD at Berkeley and then at Columbia, and around two thousand and six I was actually teaching the FBI, the Federal Bureau of Investigation. We had a program at Kellogg for agents to come in, about sixty agents at the time, and one of them just started talking about a leader that inspired them, and I was
really struck immediately by the transformation in physical transformation. His eyes lit up right, he almost looked smiled, he got expressive, his voice spoke really quickly with a little higher pitch, and it was clearly that he had been fundamentally affected and impacted by this leader. Then the next year, a different FBI agent, ironically enough, started saying, I want to talk about an inspiring person. I want to tell you
about all the infuriating leaders I had. And then so I started asking hundreds and thousands and probably tens of thousands of people across the globe. A very simple question. Tell me about a leader that inspired you, and tell me about a leader that infuriated you. And notice both both types of leaders transform you inside. Right, one is like a well spring, the other is, you know, a
seething cauldron. And one of the things I realized really quickly is that they're basically mirror images of each other. So the inspiring leader, right has that optimistic, big, big vision. The infuritying leader is a pessimist, pedantic, right, you know, the inspiring leader's courageous, infering leaders cowardly inspiring leader is elevates people and friendly leader diminishes people. And so you
can start to understand that this happened. The second really fascinating thing about this research is I started asking people all over the world, so every continent that you can think of, you know, dozens of countries, And what I discovered was there was a single inspiring or in feruiting characteristic that wasn't mentioned in every single country in the world. So there's something universal in the very tapestrying fabric of the human mind that really captures.
This anything between men and women differences.
I have not found any It's a great question, you know, that's That's another one, which is that you know, you know, women find you know, courageous, big picture, you know, generous people inspiring, you know, and so do men. And it doesn't really vary that much by It doesn't vary by gender, by ethnicity, by country, by culture. There's something really fundamental
about about that. I think there's some variations sometimes in like you can see Democrats and Republicans right where Democrats put a little bit more emphasis, let's say, on the empathy side, and Republicans might put a little bit more emphasis on the strength side of the equation.
Well to that point, and I want to jump right into it because I want to go we do want to go over some leaders at a certain point, and you know, whether they're inspiring or infuriating. But I think to myself, here you are telling us about these different leadership qualities or the way that people view leaders that they've encountered in their lives. I think of somebody's top
of mind. President Trump to many people, to more than seventy million voters, he's an inspiring leader to many people who didn't vote for him, and even some people who've worked in previous administrations. In his previous administration, he's not. He's an infuriating leader. How can one single person be both of those things to different people?
So I'll say three things about that. The first is that one of the things that I think my research has discovered is that there's these three universal factors, and I'll sort of go through them talking about Trump in a second. But it also tells us something fundamental. We're not inspiring infuriating born that way, and we're not forever that way. We can be inspiring today and inferating tomorrow, and we can be inspiring on some dimensions and inferuit
in other dimensions. So in some ways you can say all of us, every one of us is both inspiring and inferuiting, or has the potential to be both at different time, right. And So I think that's one thing. The second thing I would say is that there's two things about Trump that I think everyone would agree with. One is that he has a simple, compelling visual vision that people everyone can understand. Right, make America great again.
It's even an acronym. Right. And the second thing is that no one will contend with the fact that he presents himself as a strong and courageous protector and two is that he comes across as authentically passionate. And so those two are to the fundamental of like how we are in the world, this exemplar thing. And so he has this very clear vision and he is very clear presents himself as this strong, courageous, passionate you know, protector. Now where he falls on the infurity in side is
I think two things. Some people find the vision itself to be infuriating, like exclusionary it only includes a certain category of Americans, for example, and find it to be maybe harsh. And then the second thing is I don't think any person would argue with the fact that the third fact, so the three universal factors are being visionary, how we see the world, being an exemplar how we are in the world. And then the final one is
mentor how we treat people in the world. And I don't think anyone would argue with the fact that Trump doesn't treat people very well. Right. You know, he had more turnover in his first term than any other president in terms of you know, the main leaders within his administration. He is notorious, right for throwing people under the bus, right, And when I ask people around the world, you know, describe an inspiring leader, it's always someone who share success
but takes on blame and burden. But with Trump, right, he forever steals success. It's me, me, me, me me when things go well, and it's you you u uu when it goes bad.
Well and you know, And yet step back for a second, and whether he took accountability for this or or said that, you know, in some of the policies that he implemented or had people implement, whether it's tariffs on China, many would say this was long and coming, Like there are certain things he's done that actually people applaud him for. Right, and those terriffs with China and push back on China carried over to the Biden administration. Now we're like getting
ready for kind of what comes next. But I'm just saying that, is it only inspiring leaders that actually get some stuff done? Is it infuriating leaders also, and you know or leaders that maybe you know, people don't want to be around that still bring about some changes.
Absolutely. I mean, I think if you look at some of the most famous leaders in our world, you know, for example, Steve Jobs right, even in some ways Elon Musk right, that they fit that mold right, being sort of you know, very clear vision, you know, authentic and passionate, but not always treating people very well. Right, And so those people might be great top of the top leaders, but they wouldn't be very good managers, for example, you know.
And I think that really makes the difference. One thing I'll say about Trump, though, is that the things that he's concerned, he's very good at recognizing what other people's concerns and fears are, right, and so he's able then to package those in a way like I think everyone would agree we need to have a very clear immigration
policy to have an effective United States. Now we may disagree with some of those elements, but he's very good at simplifying it, right, Like we need to shut our border down, you know, to figure out what's going on, and we could maybe then sensibly reopen it at a later point. And I think you see that the trans issue is another one that he really expertly understood, which
is that people are concerned about fairness and athletics. They're concerned about could someone show open a bathroom that would make me you know, could a man schopen a woman's bathroom? You know? Using this issue as a ruse, and so he understood people's fears around that and was able to articulate them.
Well, what do you think corporate leaders need to do going forward? Because often they'll have their employees say listen, I'm uncomfortable. I don't think of our you know, employee base as male or female. I think there's other choices. What do you think is going to how this is going to play out in corporate America?
I mean, that's a great question. I mean, I'll say the first thing I'll say is, I do think that one of the reasons why Kamala Harris lost the election was two things that are on vision. She never articulated the true state of the economy, which was that it was much better than.
The economy stupid, right, Like, yeah, there's a reason why people say that she.
Didn't defend it. She didn't come out and say, yeah, prices are higher than they should be. But like she should have said every single day about djob growth. That's what Trump would have done, right every single day. And the second thing is she never articulated at any point what her vision around let's say, gender identity was, Like I have no idea, Like I know that she generally supports the rights, but like, are there limits to that?
Like what is the fabric of that? Like Trump was very clear and when when you look at some of the exit polling, you see two things. People at accurate information on the economy voted for Biden and they voted for Trump if they didn't, and if they're concerned about the trans issue, they voted for Trump. And so I think those are two things. What should corporate leader.
Well, I was just going to say, we have plenty of time at least until we start to hear from the president, and we are awaiting that at the White House. I do want to ask, because your book it's not just about leaders on the international stage and leaders in the border. I mean you talk about parenting and being a leader in the home. What are some takeaways that people who are not necessarily in managerial positions right now can take from the book.
Yeah, well, you know, I coined a phrase that I use in the book called the leader amplification effect. And the leader amplification effect is that when you're a leader, you're essentially on stage. Eyes are on you. And one of the things we know from cognitive psychology, and I know you've had a lot of cognitive psychologists on this show is that attention amplifies signals and then those also
intensify reactions. So when you're on stage, your signals, whatever they could be verbal, nonverbal, good, bad, small, big, are going to get amplified, and then people's reactions are going to be intensified. And so what is a leader, Well, a leader is someone who has power and status. Those are two of the things I've studied the most in my career social hierarchy for twenty years. And essentially it's someone with some authority, right, and also people look up
to that person. Guess what parents are, right? Parents are They have authority over their kids, and their kids generally look up to them or at least look to them for information. And so I have coined a phrase that I call the parent amplification effect, a corollary of the leadership, which is like they pick up on things. I'll tell you a very short story about this that I really love about a former doctoral student at Columbia who worked
with some people you've had on like Sondra Mats. But when she was twelve years old, she overheard her mom say to someone else, both girls are great at piano. But I can't remember right now. Her sister's they know has a real knack for it. Abby. I think it was their sister Abby has a real knack for it. And she was so incensed she never played piano again. She was like, you know, basically, f you, mom. You think she's got better thing. And you know, I saw
her mom. And this is what's great about the leader amplification effect is that we can be totally unaware that we're we're we're having this impact. And you know, you know, I told her mom the story. She's like, I had no idea why she quit PIATO, Like that happened like twenty years earlier. And Barry Salzburg, who is a he was CEO of Global Deloitte. About six months after being CEO, he noticed there was bananas at every meeting. He's like, huh,
like banana is an important symbol of Deloitte. I've been here thirty years or someone else?
Did he bring to a media No.
No, what happened was is his first meeting he went to. He picked up a banana with a little bit of enthusiasm, and his the executive assistant, was like, have bananas at every meeting Barry's at you know, he didn't even say anything right, and so you know, whether it's your parent, whether it's you know. And that's why I always say
it's not about a position of leadership. It's like whenever you matter to someone else, right, it could be a So it could be in the dating relationship when you care about the opinion of another person, right, all of their expressions and could you're paying attention right intentions? Really that currency.
Well with kids, I think about that a lot. We've talked about this, how kids can be branded as well, you're a math kid or you're really not a math kid, and they just kind of get it in their head and and kind of go that route. We want to ask you about a couple of different leaders. You have mentioned Elon Musk. You know, it's interesting. We're just coming
off the inauguration. We saw these big tech ceo so they're kind of top of mind for me when you think of Elon, when you think of Jeff Bezos, Mark Zuckerberg, Sundar Pitchai of Alphabet, I don't know, inspira inspiring leaders, infuriating leaders.
I mean I think there, you know, they can be a little bit of both. Right, and some of them, you know, clearly. Any you know, one of the things that we are inspired by is people who do amazing things right, right, Like think of Steph Curry, Like, how many people are you know? I Steph Curry is my favorite player, right, he can just do things that no one else can do. Josh Allen on the football field, right,
is the same way. And so you know, people who create things are always going to hold, you know, a big attention in the world. And that's true and throughout history of the United States, you know, you go back to you know, some of the famous people in eighteen hundreds, you know, And and so I think that there's a way that we really get captivated by that that vision and that super competence. But also they can start veering off into the wrong vision, right, and they can also
start not really paying attention to other people. So one of the problems of the leader and amplification effect is sometimes we aren't aware of the impact. Right. That's exactly what happened with Erica's mother. She had no idea this all in comment would have that impact.
And so you know, so those employee surveys about your bosses are really good.
Yeah, I mean, I think they're really good. I think so. I mean, I'm a huge fan of three sixty feedback, right, And I think it's you know, I created, I actually created a thing called, you know, an are you and am I inspiring scale that people can sort of measure. But the best way to use it is to take it yourself and then have other people take it, and then you can say, I might think I'm visionary, but
they don't see me as visionary. And that's the you know, that's what we want, is we want accurate understanding of how other people perceive us.
So I'm thinking about other leaders out there who are in our world. We talked about Elon Musk, we talked about some of the other tech leaders. We just celebrated the life of Jimmy Carter and a lot of people in remembering Jimmy Carter talked about how he had these qualities that you know, really inspired people around him, but he was an ineffective president because he was a micromanager
and he didn't play the politics game. How do you balance where do you balance on this continue to be effective?
Yeah? I think that's right. I think, Well, if we just got you know, the last chapter of the book talks about actually the connection between Jimmy Carter and Donald Trump. They both lost reelection, you know, and you know, fortunely was able to get in a couple of paragraphs at Donald Trump becoming president again, you know after that. But you know, they lost because I think different different parts of what I call the VEM diagram of inspiring leadership, visionary,
exemplar and mentor Donald Trump. Sorry, Jimmy Carter was clearly he was deficient on the visionary end, right. He never articulated a clear vision first presidency. And there's an amazing quote by I can't remember exactly what it was, but it was about even cabinet secretaries need a vision in order to execute within their departments, and Jimmy Carter never
gave him that vision, so they couldn't execute effectively. And the micromanagement, you know, the famous story of Jimmy Carter approving the tennis schedule everything, you know, you know, it's unclear whether it's actually true or what role played, but it fit the image of who he was, which was someone who was lost in the weeds, a micromanager couldn't
see the thing. But all those other qualities right, his his courage, his calmness, his humanity, the those shown brightly outside of the Oval office, and so in many ways, right his entire image was rehabilitated in that process. And you know, Donald Trump, you know, really benefited from the fact that distance left him. He lost because he was a poor mentor, but the distance allowed people to forget how he treated people well.
So much in this book you cover a lot of ground, Adam, Thank you so much, Adam Galinsky. Paul Colillo, Professor of Leadership and Ethics at the Columbia Business schal His new book Inspire, The Universal Path for Leading yourself and others. It is out and really gives you a lot of things to think about in terms of leadership.
Today you're listening to Bloomberg BusinessWeek with Carol Masser and Tim Steneveek on Bloomberg Radio.
Well, speaking of the president just today and his presidency. Investors are closely watching further moves from Donald Trump to assess their effect on markets. JP Morgan Chase, for example, is establishing a war room just for this purpose. Exactly how policy proposals will play out is not clear yet. For example, shares of companies with tariff risks largely shrugged off the threats, at least for now. Today, in response to what was reported yesterday. For an idea though of opportunities,
we bring in Christi Acolian. She's head of I Shares investment strategy over at Blackrock. She joined us from San Francisco. Let's talk themes for this administration. Christy, where are you bullish?
Yeah?
Absolutely, And Simon Carrol, thanks for having me. It's great to be here. You know, I think that the broad theme of the investment outlook that we just put out for twenty twenty five is really that we're risk on, so we are overweight US equities. We still see really strong you know translation from that strong economic growth that we're seeing all the way down to strong corporate profitability.
We're most bullish right now on large caps. We're really preferring to stay up in quality, even though on a day like today, I know we saw small caps pop a lot. Something like qua L, which is our I Shares quality ETF is where we see the best opportunity because we think that the fundamentals matter just as much too as some of the narratives that we're getting, and from a fundamental perspective, we see the strongest earning growth
coming from the highest quality companies. So that's the number one area we're bullish right now.
In terms of you know, christ is. Of course, this is the first full day of President Trump in the White House. We're watching various policies start to come out, or at least indications of ones, and tariff's in particular.
I think there are some concerns. We talked with our Gina Martin Adams earlier of our Bloomberg intelligence team that targets, you know, tariffs at target economies usually impact companies, you know, so if you target something like Canada, which the President seems to be you know, indicating or possibly talking about US auto companies, you're going to feel it. All of this then ultimately impacts the companies, maybe impacts operating margins. So how do you roll that into your optimistic view.
Yeah, I mean, you know, our optimistic view is certainly not without risk. So we're certainly focusing on trade policy as one source of unknowns, immigration policy as another, and then potential for deregulation. So I think it's a little bit of a mixed bag in terms of the direction that that can have of economic growth. You know, if we look at kind of again kind of back to the macro here, we're focused on fundamentals, even though the headlines are going to move us around quite a bit
this year. What we've seen in terms of inflation looks benign. Right We got CPI data last week that was the lowest core reading month over months since July. The path that the economy is on right now feels good, so that underpins a lot of our bullish outlook. But the risks in terms of how those those policy changes might be implemented are are worth watching this year. So I think that you brought up tearff policy. Trade policy is
obviously incredibly important. If that does reignite or reaccelerate immigration, then we think that there's some portfolio adjustments that you might need to make. We're talking about some thematic exposures right now, something like made great ticker for made in the USA that really focuses on domestic manufacturing if we do see those widespread tariffs put into place, or something
like technology independence. I think both of those thematic ideas have a place in a portfolio, especially if you're concerned about, you know, trade policy. Even though maybe what we saw from from President Trump yesterday was a little bit more benign than markets weren't anticipating. So I think we did see a bit of a relief rally that the tariff potential was not quite as high as as investers maybe had thought maybe what was priced into markets coming in.
It's still early, Yeah, okay, So what about when it comes to international Obviously, you know you're bullish on US.
That's that's not a contrarian position right now, we hear I've lost track of the number of times, Carol, people talk about US exceptionalism in recent months. It's certainly the theme for the year. International equities, though they are less expensive relative to their US counterparts, what's the opportunity there?
Yeah, absolutely so we you know, we think that you need international exposure in your portfolio for diversification. They're just different sources of risk and return, and that is important, especially to your point in this environment where we're overweight, and you know, we're enthusiastic about the opportunity set in
the US, but so is everyone else. So I think that the benefit you get from adding to international is those lower evaluations in terms of the way that we think it's sort of best expressed right now, again kind of leaning into that quality notion. But internationally, we like international dividend payers, so companies you know that screen a little bit higher quality that can can pay that dividend
and a steady dividend over time. We also think it's an opportunity for active management because it is a environment that is changing quickly and in on a path of global divergence. In terms of global growth, I think you need to have sort of high conviction in some of the areas of opportunity that you see. So we do like international, even though we're overweight the US, but I think the best opportunity there leans and screening a little bit higher quality and dividends is an interesting way to
do that. Something like BIDD, which is are active international dividend fund that we just launched. I think that's going to be a really interesting one for this year.
Christy.
You know, you get to see right the big picture, right in terms of what's going on in the ETF industry and specifically in terms of black rock flows, I mean the industry. The ETF industry saw a record flow of about a trillion dollars into ETFs in twenty twenty four. What are you seeing in terms of flow so far here in twenty twenty five, Where is the money going? Where's the money maybe flowing out of Yeah?
Absolutely so to your point, the first trillion dollar year for US ETFs, which is just a huge milestone, So I think that's really interesting. A big part of that was driven by newer asset classes and newer exposures. So obviously, you know cryptocurrencies and spot bitcoin ETFs that were launched the last January just about a year ago, took up a lot of the attention and took up a lot of the flows. But I also think that you know what we're seeing right now in this environment that is
overall strong, but not without risks. We're seeing investors lean into some more niche areas of the market, something like outcome products and outcome ETFs. I think that's an area of focus where we've seen some flows. We tend to see flows follow performance. You certainly saw that in the last quarter of twenty twenty four and Q three as well. In terms of small cap you saw large inflows to small caps. Some of that has reversed and we've seen
that continue to reverse a little bit more. It really is underscored by our preference for being up in quality and large cap that we think the fundamentals can catch up to some of those smaller cap names where we're seeing investors maybe get out over take profits.
When you talk about outcome ets, just to clarify for those who may not be in the note, that's when you kind of use options right to achieve various goals.
Yeah, absolutely so, you know, we have different forms of buffered products. I think it's probably the most the most popular there. So whether you want to you know, protect yourself to the downside of a five, a ten, or twenty percent draw down, the being able to use options to to be able to trade away some of your upside potential in exchange for really locking and more certainty
of outcome on the downside. I think that's been a really interesting conversation with investors, especially in this world where
we're not seeing the same diversification benefits from bonds. So if you love equities and your overweight equities, which you know we are right now, but at the same time you're not getting that same ballast or diversification from longer term bonds, how are you constructing a portfolio that can weather a variety of different environments, and I think those outcomes that having that certainty of outcome has been really important for investors too.
Christy, how should people think about overlap with the S and P five hundred in an ETF with the the USA Quality Factory TF. The QUAL is the ticker, because if I look at the holdings there, Apple's the biggest holding. You got Microsoft and Vidia, Visa, MasterCard, Meta Platforms, Eli, Lilly Alphabet, United Health, TJX companies. How should investors think about that compared to just buying an index fund with the S and P five hundred.
Yeah, a couple of different things. I think quality is as much about what you don't own as what you do. So QUAL is a little bit more concentrated, and you're gonna see some similar exposures to just the broad based index, but they're held at different weights and they're really screening out some of those lower quality companies. So I think that's the important thing. The other thing, too, though, is just when you look at a different at an ETF,
it's really important to know what you own. The way that we construct our factory TF, so quality is one of them is sector constrained. So it's giving you a representative slice of the market.
It's not just.
Giving you an entirely technology fund, because technology stocks screen high quality. Really importantly, it's giving you the highest quality companies within each sector. So I think knowing whether it's a substitute for an S ANDPI founder at augmenting it is important, and the way that it is constructed is meant to be sort of a quiry.
Chris, you just got about a minute left here. A story that we've been looking at in the world Raymond James Financial entering the ETF market through its asset manager division. They have a vast network of financial advisors who up to this point we're probably offering things like black Rocky tfs. We are increasingly seeing others get into the ETF industry, and especially those with their own financial advisor network. We're competition. Does that make it a little bit tougher for you guys, Well.
I mean, I think the general trend that we saw in terms of the one trillion dollars of flows just means that the overall pie is getting bigger. So, you know, competition is not bad. You know, we lean a lot into our reputation and brand and the really full suite of product offerings that we have, so really feeling very confident about ETF flows this year as well.
All Right, cool, Steph, great overview. Christy Aculi and she's head of I shares Investment strategy at Blackrock, joining us on this Tuesday from San Francisco