That we will do what the consumer thing happens. But when the going gets tough, the cash is of a business is the oxygen. You could be the most ideological epic awesome person. And by the way you know this, this is the biggest Insight The humans are saying this. but what happens when the humans themselves act differently when the going gets tough? Vayner Nation How are you Another exciting episode of the Garyvee audio experience with uh well, the man that um, some of you already know and many will discover uh and I think this conversation is going to go quite well. We just laughed. We had one second before we went on. I said Ellen anything you want to talk about, he goes. Whatever you want to talk about I'm like good. This is going to be a great I'm gonna be able to do a lot Elmer uh why don't you? uh I always like to let the guests take the first minute or two to create the context with the audience I always uh, want to make sure that they can position uh the context the way they want. So why don't you fire away and tell the Vayner Nation a little bit about who you are and yourself and your career and then we'll go into it. Well, I'm a lifelong journalist and also to some degree a lifelong entrepreneur. I Started my first newspaper when I was nine years old. uh I stayed in, you know, edited my co my high school newspaper College Newspaper worked many years at the Wall Street Journal ran the Washington Bureau uh uh, did a few years uh uh uh doing his show at CNBC uh then came to Fortune and I'm now the CEO of Fortune So it's a it's a fairly consistent storyline. it it it's not too. uh, it's not too confusing. I I I Suspect the reason I'm here Gary You'd have to tell me that. but I suspect the reason I'm here is because of a book I've written recently called Tomorrow's Capitalist. That was my attempt to try and get my head around what was going on. Why I was hearing more and more Business Leaders talk more directly and intentionally about their impact on society. Something very different was is going on in the conversations I was having with CEOs and the book was my attempt to understand it and explain it. So let's let's just go there. You know. Obviously, when you think about the Wall Street Journal when did you start at the Journal? let's start this actually. I I started the journal in 1983. Perfect. That's even. That's exactly what I was hoping for. so everybody can understand where I'm going with this in 1983 at the Wall Street Journal How many CEOs running those Fortune 500 companies even nuanced the concept of something that their Coca-Cola or IBM or Chevy had impact on the world? Yeah, relatively few. I Mean there was sort of some cases out there that you could point to I think of: you know the history of a company. a company, like Cummins engine that was such so inherently a part of its Community but it was uh uh. look, we were in the thralls of Milton Friedman the Great Economist who said the social responsibility of businesses to make a profit? uh and I think that was in the 1980s very much the reigning frame. Do you think that there's a danger that if it goes so the opposite way of that POV that these things don't become sustainable and I'll tell you where I'm going with that question? Yeah, yeah, my great. Obsession Right now in America and I think about it globally. But obviously America is who it is in the scheme of capitalism and societal ambition. that as America goes more red, more blue, you know we're pulling that. The answer is purple. It's the blend of the two and that you know. I for example, have incredible ambition and hopes and I love being an entrepreneur. but I genuinely do like Civility and kindness. and I I think it's very easy to build a business that is profitable and can be nice and a positive impact. But I also believe that there's not a business on Earth nor is there a human on earth that doesn't have shortcomings in some social framework, no question. But if you ask businesses to be great at everything that we could go too far and and kind of lose our Collective way. But uh, it's a fair concern and and and we should talk about it. And I appreciate the fact you put it in a political context. but let me just take it out of the political context. First, let me give you another context for what I think is going on. You know there was a uh, some research done a few years ago about how how are businesses creating how do businesses create value and they looked at the Fortune 500 in uh, the 1970s and they looked at the balance sheets and said where's the value value coming from at these corporations And what you saw in the 1970s was more than 80 percent of the value came from physical stuff. It was a plant. It was equipment. It was oil in the ground, It was inventory on the shelves. It was physical things that you needed Financial Capital to to buy and build. Yes, if you do the exact same exercise today, what you'll find is more than 85 percent of the value of Fortune 500 companies is coming from intangibles. It's coming from intellectual property. It's becoming from the brand value with the consumer. all of all of which are things that aren't tied to physical. So much to physical stuff or financial. Capital They're tied to people. They're tied to human beings. They're tied to your employees to walk in and out the door and your customers who have a sense of brand loyalty for you. I Mean this is this is your business Gary You understand this so I think what's really going on here is not a politicization of business. it's a human humanization if that's a word. Yeah, a business that that you know we I have a colleague Jeff Colvin who wrote a great book called humans are Underrated. One of the things he said in the book is we spent the 20th century trying to make people into better machines. They were cogs in the Great in the Great Factory you know and they were supposed to do their role to make the machine work better. Yep, in the 21st century, the machines are taking care of themselves. Thank you very much. We need people to be better people. And so all of these things that I'm writing about and talking about. the increased focus on contribution to society is much more about that than it is about politics per se. Talk to me about things that are in the water that challenged us. humans to be better. For instance, something I'm obsessed with I'm so pumped I get to ask you this: yeah, the notion that nice guys finish last when no in the context of the combo you and I are having right now I'm fascinated by that because I have a lot of empathy for the women and men in business that I interact with all the time that don't even realize that that's the thing that they believe that's leading to their concern of overleading with their emotional intelligence or their heart and thoughts on that. If I throw that out. oh my God. well look. I I think in some ways that's the uh. one of the biggest changes you just used. look. We've already established that I've been doing this stuff for four decades, right? So I've seen quite a lot of this. Yes, you just used a word empathy that I can tell you for three and a half Decades of covering business I never heard a business leader use just did not happen and I just got off a a phone call with a dozen CEOs who were talking about Wellness in the workplace and I heard the word 15 times in the course of one hour I I Don't think that's just a semantic change I think that's a dramatic change in the way that Business Leaders think about their uh about their jobs. Uh yeah. Do you believe the operators that believe in Merit competition? um, tenacity? All things I believe in By the way, yeah of course. uh. get over concerned when they hear empathy and these things that that that they struggle with balancing the two because they don't realize it's an and versus an or is that your take I Gotta tell you. and maybe it's the maybe it's the CEOs I hang out with you know I've spent a lot of time on this topic over the last five years and so maybe the the people I'm hearing from are self-selected group. but I don't hear that anymore you know I think that would probably have been true if you were talking to Jack Welch and remember only 20 years ago that was only 20 years ago. but man I don't hear you know one of the one of the uh, most amazing corporate statements that happened during the pandemic came from the CEO of Marriott um Arne Sorensen who when it when it became clear that his business was going to drop by 95 or more I mean about that, it's just people weren't in in the hotels and and so the the company didn't have the financial wherewithal to keep everybody employed and he made a Twitter message you can search this on Twitter uh to send to his employees uh to explain why he was furloughing so many of them. uh uh, it just so happened that at the same time he was making that message he personally was suffering from very severe cancer which subsequently killed him and he you know was showing the effects of the cancer treatment. uh but my God it's a two-minute video I was in tears by the time the thing was over I mean this is a CEO telling his Workforce that their jobs have disappeared. um but the but the way he did it the the you know the way he explained it to him. it was sort of a masterpiece of transparency and vulnerability and empathy and all the things that the Jack Welch's of the world 20 years ago would never dreamed of doing. so. it's you know, a dramatic illustration of the of how Tides have changed. What do you think are the masses from your perspective spending so much time? what do you think are the massive benefits and what do you think are the changes that will become new challenges Because you know when you have these kind of seismic gifts, you know this is all. this is all wonderful. I mean you're talking to somebody who started a wine brand called Empathy? You know, like I've been on this train for a long time because I'm very much my mother's son and she was built on incredible emotional intelligence and compassion. and I very proud of how I've operated on the flip side: recessions that are aggressive and sustained America losing its pedestal of being the economic dominant player you know? Do you believe that this is potentially a trend in the maturity of a superpower that when challenged, um may have a tough time finding its balance in some of this because as organizations find their way, I can tell you as one that is built. So my company's code word internally is the honey Empire honey over vinegar. But we're building an empire. We have a thousand plus 27 and under year olds. so Gary I think I I'll finish this in this I'm a guy in your take. The thing I spend time on is how do I make this the greatest from all those emotional Frameworks and how do I also not create entitlement that creates the vulnerability of the task at hand and what? I for me I'm confident because I don't have a board I'm not a publicly traded company and I'm in my most joyous when the people around me are yeah. but I have empathy for people that are going to have to deal with a public board, a public company competition and so when the going gets tough, I'm worried that they may deviate from words like empathy towards like we've got to compete. Maybe. But here's what's so interesting about what's happening, right? First of all, let me say you don't ask simple questions. That's a compliment, right? That is a compliment. Yeah. So um so in fact, if you want to, you know like go refill your Starbucks uh cup, it may take a look I'll try and come. I'll try and I'll try and keep my answer concise. Take your time because I think the depth is interesting and I think you have a great perspective. So I'm excited. So so you asked about the good part of this and then you asked about the parts that I think are may not be sustainable and and and I'm gonna I'm gonna put in a little bit less of a political context than you did and sort of just focus on business per se, please. The good part is you know things like climate and things like diversity, equity, and inclusion I think five years ago most Business Leaders thought well those are important but they're kind of nice to Do's you know they're like Corporate Social responsibility I should do it because I'm a good person. Yeah, what's what's happened in the last two years that's so fascinating is it has become a business in imperative. You know, start with climate. I Had this fascinating conversation with Soren SKU who is the CEO of Uh Molar Mask that runs the big shipping uh ships all over the world and and he has made this massive investment in hydrogen power using uh wind power in the North Sea It is not economic. There is no current economic rationale for making the investment he made. And so I said why'd you do it? Why are you spending all this money on something that is just there's no way that's going to get close to the price of fossil fuel. And he said I did it because every day I get a call from a customer who says I just made this Net Zero Climate commitment that requires me to get the carbon emissions out of my supply chain. and you're my supply chain if you don't figure out how to operate your ships. uh, without carbon emissions I can't meet my goal and so there's this kind of reinforcing thing going on that has made it no longer just a good thing, but a business imperative. think about. GM I mean Mary Barra The CEO of GM made this extraordinary commitment in January of last year. she's only going to make electric cars by 2035. Yeah, and that's not just buying the Sky commitment I Mean she has to start investing against that commitment She had to start the day she made the commitment. Um, so did she do it because she thought it was the right thing to do for the environment? Yes. But did she also do because she was afraid Tesla was going to take her business away from her? Yes. So so it's become a business imperative. Couldn't agree more and just and just one other thing before I Finish it Because you you talked about diversity and equity and inclusion. Same thing. We are in a massive battle for talent that most CEOs I talk to don't think is going to go away even with a recession. And so if you're not figuring out how you create new pipelines for disa, you know for people who've been overlooked to bring them into the workforce, you're you're probably not going to win the town of. War Alan Are you telling me that in the last hundred days the CEOs that you're talking to do not feel that there's going to be a correction in the job market if the recession keeps going in the direction that it's going. we. We just did a survey just fresh out of the field that shows that more than two-thirds of CEOs think there's going to be a recession. but then you ask them what is the single biggest challenge you face and you know what it is. It's not the recession. Talent So yes, I I mean will there be a correction? Maybe, But we've never had a moment where we are talking about recession and we're looking at three and a half percent unemployment at the same time That never happened before. It's going to be interesting because what's the dynamic that don't people don't see is that the Internet has created so many options for people to make six figures a year. Do it with their side hustles that the fragmentation of the long tail of the economics is very real. the question will become things like hey, Gary I don't need to get a job because I'm selling things on Amazon and making 150k a year. But if Amazon has to raise their fees because of a recession, does that become viable? Like where the trickle-down economics all these influencers you can imagine my world Gary I mean 200 000 a year in brand deals I Don't need to get a job. Well if the marketing budgets go into a different or you know, so it's gonna be. There's so many macro trends that are happening that may be affected in the micro with a recession, that will be an interesting game to see play out and what's happening on the other side of that equation Again Again, this is the Dozen CEOs I was just on the line with this is what they were talking about. What's happening on the other side of that equation is companies are just getting better at figure out figuring out what they have to do to attract, retain, engage, excite people to come and work for them. You know that it's just becoming their their focusing intentionally on how do I make this a better experience because if I don't make it a better experience I'm not going to get the people I need I have such double feelings right now I am so excited that a um Observer of your pedigree and social commentator to the sector I've Loved I followed business like it was Sports my whole life I I'm pinching myself that this is the conversation we're having. If you told me, if you told 1998 Gary who came into his dad's liquor store with objective number one is to be more kind to our employees that stopped ourselves that this would be a 2022 conversation I would pinch myself out of happiness. On the flip side as 2022 Gary who's watched 2020 to 2022 and has interacts daily with Fortune 500, CEOs and CMOS The disconnect between the ambition of the Ivory Tower and the execution in the trenches is such a grand. Gap Right now that I'm curious about the speed in which these conversations you're having become actually executable. Yeah and I I I Thank you for taking me back because I never answered the your question of what are the limits of this where where does look This doesn't mean this is not greed is dead. You know this is like corruption is over. This is not I mean look I Spent uh I Spent a couple of years as the Chief Content Officer for time Inc when there was still a timing before it went under. Yes! and I was in the C-suite of that company when it was under attack from Uh shareholder activists who wanted it to produce more money each quarter. Yeah, and what you see when you're in that position is there are hundreds of bad things you can do when I say bad. It's bad for your employees, It's bad for the your customers. It's bad for the environment, environment. Maybe, uh, bad for the long-term health of the of the company. But there are hundreds of bad things you can do that will make you money in that quarter. Yes sir. And and when you got a shareholder activist breeding breathing down your throat, you know I See now Mark Benioff has one Uh right yeah. say we want more money next quarter. Gotta hold them up. Stop all this all this fluffy talk. So no question there are a bunch of short-term money-based pressures that can push companies to do bad things and companies will continue to succumb to those pressures. But but what I'm saying is, as somebody who has watched this for four decades, there is a set of countervailing pressures in place yes that are causing more and more corporate leaders to take a much more serious look at their social impact and at the long-term impact of their companies. And I don't think that's a silver bullet or solves all our problems. but I think it's a good thing. I do too. I I Think it's a great thing because back and again, I'm actually not using politics I Just think it's so easy for people to grasp given the macro. Let's use a seesaw. You don't have to use red and blue. Let's use a seesaw. To your point If the Seesaw is balanced left to right and this is not about what you're saying which excites the out of me personally is this is not seesaw going right to left. This is the Seesaw is going flat. Yeah, and the reason the reason I reject I Mean they're they're you know? Look, I worked many, many years at the Wall Street Journal I Know the folks on the editorial page very well. Um, uh, they've been leading the attack against Woke CEOs and you know saying that this is all a bunch of misguided Business Leaders trying to pay, play footsie with Bernie Sanders and Elizabeth Warren or something like that. The reason I think that's so misguided? Well let me use an example to make the case. Uh, two weeks ago I was down in Bentonville Arkansas with Doug McMillan uh Doug McMillan is CEO of Walmart has to be about as you know that has to be about as red of a CEO and has read of a company that you can imagine I mean he grew up in Arkansas His first job was loading trucks at Walmart The company serves Red America right? That's who their employees are, That's who their customers are. But he has said we want this company to become the first truly regenerative company. Sounds like something Mark Benioff would say. Okay and and he has challenged his suppliers to get a gigaton of carbon emissions out of the environment and you know how, how uh how Walmart In fact the buyers and he has said and he's changed the way you know Sam Walton Great businessman that he was I'm pretty sure thought of employees as an input and his job was to get the price of that input as low as he could so pay the absolute lowest wages. Doug McMillan has completely changed the way wages are said. We like to pay better wages I I Tell my friends all the time that take it to the extremes I'm with you. To me, this is not about that To me this is about common sense. To me, this is not about politics. this is consumer centricality. What you're referring to is if the humans are 85 percent of the thing and this little humans feel we're going to do what the humans feel because that's the customer. Yeah, I'm fully on board. I Think what's going to be most interesting to me because I'm fully on board and so I wanted you here and I like this middle the Seesaw will use instead of the red blue. um is that we will do what the consumer thing happens. but when the going gets tough, the cash is of a business is the oxygen. You can be the most ideological epic awesome person. and by the way you know this, this is the biggest Insight The humans are saying this. but what happens when the humans themselves act differently? when the going gets tough, that's where I'm You know I'm I can't I'm a very emotionally charged human I kind of by default care about what everybody cares about. Like like it's just kind of like my way. um, look, look I I I I Totally thought when the pandemic hit and it became clear that the economy was going to go down into a recession. Uh, and that was about a year after the Business Roundtable had issued its kind of stakeholder governance statement. I Totally thought based on past experience, all of the stakeholder capitalism stuff was going to go away. That all these social concerns, well guess what it would have if we didn't print money because we haven't felt it yet. That becomes upon the beef right? Like you know this. like if we don't print that money, everything's different. You have an entire generation of under 30. This is important I Think you'll like this Allen I because I'm in love with my employees and I talk to them all the time. and I have all these 27 29 year old employees like you know Gary really believe what you're saying, try to be thoughtful of my money like you know Covid, you know I'm so glad I got to go through Covet. it was tough. I'm like you got checks in the mail. What do you mean tough? this wasn't you know. And then I have all these 35 year olds who went in 2008 and they're watching the 35 year olds talk to 25 year olds in my office is my favorite because the 25 year old thinks Covid was what 2008 was and it surely wasn't. You had people sitting at home getting paid more to be at home than work. That's all. That's a fair point. and when the money goes away, you can't spend the money. No question about that, That's what my whole point is. I'll tell you where my energy is coming from if anybody's confused listening. I'm So Into What Alan is saying that? I'm hoping and praying because I do sense that it might get a little tough here for a little bit for real and I'm hoping we don't lose our way. Yeah, I and I hope you're right. Here's what: I'm hearing from the best companies. What I hear from the best companies is you know why I was one business leader the other day quoted that uh Formula One race car driver who said I can't pass 15 cars in the Sun but I can pass 15 cars when it's raining when I'm here Business Leaders Saying is, recession is when you really have to prove your stuff. If we believe our differentiator in the future is going to be commitment to the environment and commitment to people, then we have to hold on and stick to it and maybe even double down on it in the tough times in order to win the future because we don't do that, somebody else will and they'll get ahead of us. So there's a sense that this has become part of the competitive Dynamic of business. Not only is there a sense you're actively talking to somebody who for the last 120 days has told us 50 direct reports that the next two years are going to be the biggest growth maybe in my career because we've committed to people for a decade and it's going to matter now. There you go and I still love you for it I salute you for it Gary I Tell people all the time it's not because um Mother Teresa Or altruistic, it's the purple. It's the flat seesaw. It's both. Now matter, it's an and game it's not. or our friends to the to the left or right or purple blue. like where they get concerned is they live in a world of ore. They think it's all going to go to this. It's not. It's about the middle. and Gary if I can just say one more thing. I mean when I when I started my career, the business World defined the right to now I'm going to politics. Yeah, business world to find the right wing of the spectrum. But what's happened in our system? politics has gotten broken. Uh uh. both the left and the right are no longer about solving problems. they're just about gaining political advantage In the next election. business people have to solve problems. You can't be a successful business person if you don't solve problems. So by definition you're purple because the the red, the blue are not solving problems. brother. That couldn't be a better way to end this. I Believe that there is a real chance for the business Community to play that purple role in a meaningful real way over the next three decades and it's going to be fun to watch if that's true or not or how, why or not. But I really appreciate discussion I Have a feeling a lot of people got a lot of value from it I Hope you enjoyed it my friend. Great fun! Thank you for having me and by the way, Vayner Nation I I Know because all the authors email me three four weeks later that this is a obnoxiously big book buying Community If you if you enjoyed this, Alan's absolutely right I you know it's funny I don't consume information through long book form but I write them and I advocate for them because ninety percent of you listening right now do. and I think Alan's got something for you. So one more time Alan so they can all go to Amazon or Barnes and Noble or local bookstore what's the name of the book? One More Time Tomorrow's capitalist my search for the soul of business and all the profits go to Fortune So uh, if uh uh, you can support good journalism in the process my friend I Wish you nothing but health and happiness. Thank you Gary Cheers! Great to be with you.