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Good morning.
Our guest on the Leadership Next podcast today is IBM’s Ginni Rometty, who just last week “stepped up” from the CEO job to become executive chair. (You can listen to the podcast here.) We originally asked Rometty on the show because she was one of the driving forces behind the Business Roundtable’s decision last August to move from a shareholder-first definition of corporate purpose to a stakeholder approach. But Rometty also had some interesting thoughts on how the coronavirus will change business.
“There is no doubt this will speed up everyone’s transition to be a digital business,” she told me. In particular, the pandemic will drive change in four areas:
—The movement to the cloud will be accelerated, to make applications and data more accessible.
—The move toward automation will be accelerated.
—Supply chains will be rebuilt, “with more flexibility so that they can be either global or local.”
—The movement toward new ways of doing work will be accelerated.
That last point underscores a concern that Rometty has highlighted repeatedly in recent years. The rapid pace of technological change is creating an urgent need for alternative education programs that prepare people for tech-enabled jobs and reskill workers whose jobs may be eliminated. The pandemic will intensify that need.
“Up to now, the focus has really been on wellness,” she said. “But it will soon turn to [training and reskilling]. We need to do more to accelerate this battle so we can once again make every American feel their future is better than their past.
More news below. And for those scrambling to get cash out of the government’s Paycheck Protection Program, our update is here.
Alan Murray
@alansmurray
[email protected]
TOP NEWS
Chinese exports
China's exports were down in March, but not nearly as much as was feared: a 6.6% drop from the year before, rather than 14%. Imports were down 0.9%, not 9.5%. The news may have contributed to a healthy day in the markets, with the Hang Seng up 0.8% and the Shanghai Composite up 1.4%. The Stoxx Europe 600 index rose around 0.8% after opening, and U.S. Futures appear to be a little stronger. Now stay tuned for China's Q1 growth figures on Friday—and, starting today, much-awaited earnings figures from the likes of JPMorgan Chase and Johnson & Johnson. CNBC
Amazon essentials
Amazon will this week allow third-party sellers on its platform to start offering "nonessential" items again. The company has in recent weeks been limiting that ability, in order to prioritize things like cleaning and health-care products at its warehouses. Amazon on its latest move: "Products will be limited by quantity to enable us to continue prioritizing products and protecting employees, while also ensuring most selling partners can ship goods into our facilities." Wall Street Journal
French plea
French labor minister Muriel Pénicaud personally phoned the bosses of the country's big firms to ask them not to take advantage of France's "temporary unemployment" scheme, which is already heavily stretched as it helps vulnerable companies weather the coronavirus storm. Pénicaud (a former HR director at Danone) said the company chiefs as a result "modified their demands." Financial Times
Re-opening authority
State governors in the Northeast and West Coast have, in their two groups, laid out plans to re-open their economies on their own timelines. President Trump—who is trying to push ahead with his own plans for a national re-opening—maintains that "when somebody is the president of the United States, the authority is total." Legal experts warn that the Constitution maintains otherwise, as it says states are in charge of maintaining public order and safety. BBC
AROUND THE WATER COOLER
Debt collectors
Federal law says federal and state governments can't seize Americans' stimulus payments to satisfy tax debts—but the same does not apply to private debt collection. That's why attorneys general such as New York's Letitia James are trying to get the Treasury Department to issue regulations saying debt collectors can't seize the payments either. Coins2Day
Climate impact
Coronavirus lockdowns are good for the environment, with emissions levels in China and elsewhere having plummeted. But scientists are concerned that the pandemic will overshadow environmental concerns, as crucial policy decisions get delayed. Former U.K. Lead climate negotiator Peter Betts: "The real question is what happens in the recovery phase. Do we just go back to business as usual?" As this piece notes, China's easing of restrictions is accompanied with a massive push for new coal-fired power stations. Financial Times
SoftBank warning
SoftBank has predicted its first operating loss in a decade and a half, due to a collapse in the value of Vision Fund investments such as satellite internet outfit OneWeb (bankrupt) and office-space firm WeWork (where to start?). Expect write-downs, though we don't yet know for which investments. CNN
Post-pandemic cinemas
What might happen to movie theaters in the aftermath of the pandemic? As this Dan Reilly piece for Coins2Day explains, there are reasons to be optimistic despite the chains' obvious financial hardship—for one thing, as the cinemas are often anchor tenants in malls, landlords might cut them some slack. Coins2Day
This edition of CEO Daily was edited by David Meyer.
