The Fortune CEO Initiative is a forum for corporate leaders who are committed to addressing major social problems as part of their core business strategies

CEO Initiative 2019

I wanna to talk about business activism, CEO activism. Because I've been covering business for four decades, and I think something has profoundly changed in the last decade. There used to be a very clear line between what business responsibilities were What government responsibilities were. If you've gotten to hot button social issues, most CEOs would be under the table in a heartbeat. Didn't wanna talk about it, didn't wanna go there, it's not my bottom line. And you were kind of at the front end of changing that when Indiana, was it four years ago, five years ago passed a Religious Liberties Law that you perceived as being discriminatory You stepped out and wasn't even in San Francisco it was in Indiana. Why did you do it? What was going on there? Well, the reason why we got involved and the reason why we get involved in most things is it's driven by our employees. And I think that if you're to kinda get to your question of what's happened in last decade is. That as millennial's, have entered the workforce. And companies like mine, they're far more active and more involved in creating the culture. Before I think the culture was a very lonely job of the HR executive or, Maybe even the CO. And now the workforce realizes, they're actually a critical part of making that happen. And so, you're really seeing active employees, and that's creating active COs. And you can see a lot of examples where We have significant employee activism in tech companies for example that has changed the course of the history of the technology industry. I think that's a really interesting point. We had a presentation earlier about millennials and one of the things we didn't get to in that presentation is because millennials are are taking longer to get married They are less likely to be involved in organized religion, they are less likely to join social clubs, groups, the Elves Club, the Moose Club, the Lottery Club whatever, but the employer becomes their most important formal connection to society and they put a lot of hopes and dreams and values to the employer. Well I think also that they've just realized that they have a choice where they can work. And the thing is, is that they want to be in an environment and a business that is about purpose. That they want to make sure that their company that they're in is actually committed to improving the state of the world. That that is a critical part of the employees that we're hiring day And certainly the next wave of employees, imagine that 2 or 3x. So we are just getting a taste of the future and I think that why that's exciting, okay, is really kinda what I call, there's a door that is definitely opening. And for the last four five years now we've been talking about the fourth industrial revolution. And the fourth industrial revolution is very powerful because you can see all these information and biotechnologies, you've done an exhaustive work on it yourself and that could be the cloud computing and artificial intelligence or autonomous vehicles. On the biotechnologies it could be all the next generation of amino therapies or gene therapies, I mean robotics theres a wide variety Of technologies that had been unleashed. But what is going to happen, and you can already start to see it, is that, you have these very young people, very young, some who haven't even entered the workforce yet, getting coupled with these next generation technologies. And what they're doing is, They're bringing them together to create this 5th industrial revolution which is all about actually saving the planet. And you can see it with somebody like [ UNKNOWN ] who is this Swedish activist we meet at the Wallbuck and we look for him who at the time we didn't hadn't really seen her become as famous as she is now. I mean, she was even on the cover of Time Magazine, I don't know if you saw that, Alan. But- Did you have something to do with that? You choose covers? No, I do not. But I was impressed that, you know, somebody like that has such a high profile. Because, and the reason why is, because she's an example of somebody who's using technology To create the world that you want and knows how to do it and I think that you're gonna have lots of people who emerge like that. And to your original point, it's gonna happen in our businesses too. Yeah. And it is. It's a great moment and it's an exciting moment but you got people who have a lot of opinions that May not be the right thing for the company, may not be the right thing for the country. I mean you had an interesting moment when your employees said hey we don't wanna do work for the custom and border patrol. That's right. Yeah. He said really, like you're not gonna support protecting our borders? So how do you decide which impulses to support and which impulses to resist? Well I think this is now, CEOs are gonna have to react to these changes. So waht is the first thing the CEO is gonna have to do? Well all that's said, I got labelled Activist CEO, OK. And it wasn't me, I'm just finishing this book right now called Trailblazer it comes out in October I saw some right at the end of the process and it's really the story of this is not me, it's not about me. I didn't become this all of a sudden this activist CEO, I got kind of Pushed by my employees into it and my job as CEO is to listen deeply to my employees and my customers and to respond to them effectively. You mentioned like tableau. I'm doing that because it's customer driven like I was with. The investors aren't crazy about it. I was, well, good investors, they will see just as they've always seen You know how amazing it is overtime. = Oh well it's just spectacular. I Mean you know it's just a spectacular combination. Yeah. I didn't mean to. That was also like a year ago we when we bought me all soft. But let's. But let's let's keep moving forward. So this arts concept of it's about. How do you listen to CEO, how do you listen to employees, how do you listen to your customers, and that might then, you might be called I'm an activist CEO because I'm responding to what my employers want, okay, but it's not true, the reality is if you're not gonna do that you're not gonna be the CEO, and we have a lot of examples actually in SIlicon Valley. Of COs who are no longer COs because they did not listen. [ CROSSTALK ] By their employees. Fired by their employees and it's gotten really close on some super high profile COs where you know you see employees storm out of hte building becasue they're unhappy with a critical part of the Culture. So- You're talking Google? This, I'm not naming any names. I just wanna say that, you know, there is a moment where you know, things can tip, and you have to pull back as a CEO and say, who am I, what am I doing here, and am I listening? And now, and the one other point is this Which is that because of that, you're gonna faced with these kind of challenges by your employers. You better have a repository for that that you can then process that. So most organizations don't, and that's why we created our office of ethical use. Because, for example, in the example of custom and border patrol, When our employees say well, should we be doing business with this organization or should we not? Then we can say well here we can actually talk to customers, the this chief ethical us and let them be the arbitrator. So how would that have been? Tell us how this works. I mean, you said you had a bunch of employees who came to you, they said we should stop doing business with Customs and Border Petrol, you said I don't agree. No, I didn't say that. I would never say such a thing. I think if you're a CEO and you say that, you are in big trouble. I don't agree, I this, I that. What I said was, what, I am an expert in this all of a sudden? Somehow this is now also something that I have to do as CO? But, you accepted this mantle. Not only do I have to do all these other things I now have to do this. But, that's the point. No, that is not- But, you kind of led the way [ UNKNOWN ] No, it's not the job of the CO. As a CO yourself, you know that's not the job of CO because the job of CO is then to Create a process and a structure that lets it auto resolve and we will do whatever we need to do. Ok so. And for example yes we hired a Pola who is gonna speak I think later today. Yeah. And her job is she is a phenominal person in this word renowed expert in this area. And then she sets up an organization and those employees can go and they can be fully vetted and in some cases there will be action in some cases. Is it a democracy? Do you take an employee vote? How does she What is her process? To decide whether- Well you're gonna have to ask her, I guess. [ LAUGH ] That's why you have her on stage, Alan. But, you know, as an example- What good is a CEO if you can't do that? Well one of the things we've got, we have an amazing thing. We have an incredible product line. Some that we've built organically, some inorganically, and one amazing inorganic acquisition we bought several years ago now is Demand where which is now our commerce cloud and we should sell a huge amount online like Adidas. We're selling lots of Adidas shoes and everybody wants access to this commerce cloud technology because you can just incredibly increase the velocity of your sales and it's got artificial intelligence our sales force. Einstein built into it its next generation It's built into our customer 360 it works with all of our other products. So we have a lot of gun sellers coming to us and saying we want to sell guns and we're not opposed to selling guns. Then we had bumped stock sellers coming to us we want to sell bump stocks. Then we had our employees who are in the commerce cloud. See that and come to Paul and say Paula, we can what not well, they said should we be doing this? Is this ethical? How do we look? nd through our own resolution study evaluation. And mitigation with other experts' outside voices, inside voices, we decided. We're not gonna sell bump stocks, that's not something that sales force is gonna do. But I'm not gonna make that decision, I don't think I can. I think it's better from the company if this actually a professionally, because by the way, it's not just that. There is a list Okay have things that employees want evaluated, right? And not only my company, I'm sure in your organization and every organization, but if you do not make those changes, then you cannot say if business is the greatest platform for change, and you're going to focus on these changes, you can't focus on everything and you can't do every guy made prior. Not going to take on every cause and Whatever, you do have to kind of have a north star and it better be around a structured process to make that happen. And that's why I think in office of ethical use, we might be the first ones in technology to do that, but we will not be the last. Just as we [ CROSSTALK ]. Do you think it's just technology or you think it's much bigger than that? You think this is something that has to be adopted across the board? I think this is far bigger. Well, I went through all the biotechnology [ LAUGH ] So I mean, you talked about the ethical use of the biotechnology is is amazing. I'm sure there are questions, comments, he has to have provoked a few of you here. [ LAUGH ] Yes. [ BLANK_AUDIO ] And Jim, please identify yourself for Mark. Jim Zawkosky, I'm the CEO of buildOn. First I want to thank you Mark and everybody at Salesforce for the incredible partnership that you built with us. We've worked closely with Parker Harris and Mark Hawkins in a big team and I see Paula here who we're going to talk to in a little while so what we've done together is deep service immersion 36 our merchants on in the south Bronx south side of chicago and deep east Oakland and together we've been building schools in Malawi africa But jim there's a question here I'm david the question is this [ CROSSTALK ] I know it's your moment [ LAUGH ]. No, I'll get a moment. Well you talked a lot about how millennials are setting culture. My question to you is, what is the next generation of social impact for millennials, and how will you harness that at sales force? Thank you. Well I mean I've been basically on the road nonstop for the last 120 days and it's been a very powerful process and it's resulted in this acquisition. It's resulted in a lot of very interesting things, changes that I have made to the organization I've been all over the world and I'll tell you the number one thing that's on my mind is reskilling. Last night even we opened our new Salesforce tower here in New York City, and I met somebody Somebody who came up to me and said I retweeted his tweet because it was a very sweet thing that he did. Said [ UNKNOWN ] when I got up this morning, I remembered yeah, incredible story. So he comes up to me and he says. You know, I am not part of the fourth Industrial Revolution. I don't think I was part of the third Industrial Revolution. [ LAUGH ] I was a Baker, and I knew that that is not gonna get me to where I wanted to go, and I got on your platform, which we call trailhead. com, and I reskilled myself And I have this next generation of skills, and now because of that, I am squarely in the fourth Industrial Revolution and I have this incredible career. And I think that there is this arc, where we have This group of people that we need to bring with us into the future, and we cannot leave these people behind and that this concept of not just workforce development, but core re- skilling, that is in all of these amazing technologies, what we're talking about AI or blockchain or Even information security and even in the areas of ethical use all of the areas of compliance of our organization. We really need to all go to another level but I really see this imperative of bringing everybody with us in the future. That's a great example because 10, 15, 20 years ago we thought about as a government responsibility, not a business responsibility. Has that changed I think it absolutely has changed because we know the government can't do anything. So so what changed is our understanding and expectations of government. Well I think a great example is I was with a government executive recently talking about this and they had setup programs in Appalachia and then they were lamenting. Well I guess we can't really do this because these this program has failed. And they had gave me the URL and all that. And then I countered with well, take a look at our program in [ UNKNOWN ]. And here, this one is working and here's why [ UNKNOWN ]. And that we can actually point to these success stories and. Rarely a day goes by that I don't now get re- inspired that this is possible that somebody can get on trailhead. com can re- scale, not just for our platform, but other platforms, not just for our technology but for other technologies. And that this gonna be something that's gonna, this is In my world, this is also an ethical issue. That is, yes, everyone in this room has a job, at least most of the people, and that we are marching under the fourth industrial and fifth industrial revolution together But not everybody is with us. So I talked yesterday about how this CEO initiative grew out of an event that we had at the Vatican of December of 2016. In January of 2017, we started talking about it At a dinner in Davos. And as we were talking about it, you raised your hand and boldly said I will be your founding sponsor. That is not exactly the story, the story is like this. [ LAUGH ] That's the way I remember it. Basically, I was reading Fortune Magazine, and it was just one kind of very bad story about the next. [ LAUGH ] And I was like, there is tremendous optimism in the future. But there are stories of the change makers and we need to highlight the change makers so that people can be inspired by the change makers. And that was the idea and I said hey, Allan we need to profile what somebody did thing We're doing that that are happening. I know that the dark of social media We're doing that to Or sell more magazines but it's the good stuff that we need to kinda anchor to so that we can model that going forward. We're doing that too. My quick question for you is what can we do as a community. Mm- hm. What's your advice for us? You were there at the beginning. Yeah. I mean you. Well, I think something. You know I think that the most important thing is to do something, one thing. Find the thing inside yourself, deeply listen to yourself. If not, to your employers. If not, to your customers. Listen to yourself, go deep inside yourself and ask yourself one question, what is the one thing that I can do to make the world better? And if everybody does just one thing that has a sense of person and individual responsibility, the world will get better. But also we have to do it in companies, sales force has lots of examples of things you can do. But everybody can do one thing. Great piece of ending advice, do something, write that down. Yeah Mark, thank you very much. Thank you. Thanks for having me. [ BLANK_AUDIO ]

CEO Initiative 2019: A Conversation With Marc Benioff About Workplace Culture 

A Conversation With Marc Benioff About Workplace Culture 

Leadership

Marc Benioff, Chairman and Co-CEO of Salesforce, discusses the importance of using business as a platform for change.

CEO Initiative 2019: Salesforce, Coupa And IBM On Building Trust And Transparency

Paula Goldman of Salesforce, Rob Bernshteyn and others on how businesses can create new frameworks, listen closely to all stakeholders, and lead with trust and transparency.

CEO Initiative 2019: David Brooks On Finding Fulfillment

David Brooks argues that we’re at an inflection point in American culture: we have become too individualistic and analytical at the expense of discovering joy and building community.

Let's see if you can find yourself on this chart. So this is the history of humans on planet earth. Not very many of us about 160, 000 years ago, you get the first Homo sapiens and it's just thousands, 100s of thousands, millions. Not really until the last few hundred years, did we hit that hockey stick growth curve and go from millions to billions? almost overnight. So, what happened? Well, what happened is along the way, We invented solutions to the hard technical problems that kept humans from thriving. How do you feed all those people? Give them jobs, give them homes, eradicate the disease that's killing them off. To know about 400 million people died of smallpox. Before we invented vaccination people think it was government policy or religion or charity or some election but in fact it's new technology. That is the force multiplier that gives us. The ability to solve these problems at scale is the exponent in your equation. But there's one thing all these extra humans are good for. It's making more problems. So our job, literally our job in this room is to figure out how are we going to invent On that scale. At one point, we thought it might be wise to try and come up with a backup planet in case this doesn't work out. So I started this lab. This company for Jeff Bezos called Blue Origin a long time ago. Just kind of the first time in human history. The individuals got wealthy enough that they could try and have their own space program. Which sounds crazy, but it's a sign of the times like one of the things that comes with affluence, is this ability to start worrying about problems that you don't have, right? For the first time humans are wealthy enough that we can start worrying about generations to come. thousand years in the future, all right? It's not something you can worry about if you're trying to put food on the table. [ BLANK_AUDIO ] And the I built this lab for Nathan Melvolt, it's called intellectual Ventures Lab. And we basically just bought one of every tool in the world, hired one of everyone of every kind of scientist, put them on the same team and the started trying to go after the biggest problems that we could find. And see if we could invent new technologies. That's kind of a weird business with invention you're just wrong. Almost all the time. It's the kind of business where like you need a garage and a crazy hair and a DeLorean. And your gonna get a few inventions a year and most of them aren't gonna work out. At our scale, we get 500 inventions a year and so out of that we hope one of them pays for all the failures. We have a batting average of 1. And you know what, in any other business that would sound crazy but in arts it's a hits business and it works. So here's some hits. Enough police defends he takes almost a million lives a year, spreading malaria in Sub Saharan Africa and other diseases. This is the most dangerous animal on earth, not sharks, not snakes, not spiders. Actually the person sitting next to you is a close second, watch out for them. Yeah, this is the low hanging fruit in global health right now. So we thought it's be funny to try and find those mosquitos, and shoot them down with laser beams. So that's what that looks like. She's not coming back. It's okay you guys, you can laugh. You can kill as many mosquitos as you want. Not even Peter cames to save them. [ LAUGH ] [ LAUGH ] Here we vaporized her wing off. At one point we're overdoing it with a little bit too big of a laser. So here we vaporize an entire bug. It's very satisfying work if you can get it. I mean I don't know what you guys are doing at work but [ LAUGH ] Yeah. So malaria is insidious. You know you have a parasite living in a red blood cell. The diagnostic for it is a human counting cells in a microscope. It's like they're trying to find a quarter in a football field and they get 20 minutes to do it. It's hard. Most countries are lucky to have one person who's any good at it. We invented this thing. It's an automated microscope, using machine vision. It can look at that blood sample, and it now outperforms the best humans on Earth. In fact, it's been doing that for about five years. This is the kind of thing that's easy for us. It's not necessarily easy for you if you are dying of malaria in Africa. We invented a new antenna technology that could be used, it's part of 5G but we can use it to get gigabit wireless to everyone on Earth. We invented this pretty simple device really. It's a giant tube, you stick it in the ocean and as waves crush over the top and it's like an artificial beach. It pumps the hot water from the top down to the cold water below and mixes it up And it brings the surface temperature down just a couple degrees. And that's enough to turn Cat 5 hurricanes into Cat 4 or Cat 3. All right, we invented a new type of nuclear reactor that's powered by nuclear waste. What a lot of people don't realize is today's Reactors were all designed before we were born with pencils and slide rules. We designed these reactors using giant super computers with computational models. We knew what every neutron's going to do before we ever build it. The other thing people don't realize is those reactors we have deployed today Are 0. 7 % efficient, yeah. If you had a can of depleted uranium the size of a Coors Light, sorry, did I offend somebody from, wait. I know we have a beer guy here. I forget which beer guy. [ INAUDIBLE ] [ BLANK_AUDIO ] That's enough energy in one can to power you for our entire lifetime It's so energy dense, but we're only getting 0. 7 % out. Our reactors can get the rest of that energy out. This is a stock pile in [ UNKNOWN ], Kenturcky, 700, 000 metric tonnes of depleted uranium sitting on the surface of the earth. We're saving it for our grandkids, maybe they'l figure out how to make [ UNKNOWN ] out of it or something, all right? With this one stock pile in our reactors, se could power the entire planet including growth for about the next thousand years. We don't even need to mine uranium. Right? We can do better but we've got to try on these things. And the truth is We're not really trying this tech industry that we're all excited about it's mostly a software industry right enterprise software iPhone apps the potential for humans to use technology to solve our problems to advance ourselves into the world. Is so much greater than iPhone apps. [ BLANK_AUDIO ] See if you can find yourself on this chart. Yeah maybe in the blue part or the red part. Doesn't really matter. On your worst day girlfriend left you. Lost your job, iPhone battery is dead, [ LAUGH ] you're still in the top 14 % globally. That's not so bad, it's like being a lottery winner. You won one lottery by getting to be human, which, you know, for a mammal is pretty good. Only thing coming after you is mosquitoes .>> [ LAUGH ] Reproductive process is fairly enjoyable. One a second lottery by getting to be American, which, assuming you've got $ 400 saved for an emergency, you're doing amazing. Most people are trying to live their lives like they gotta win that third lottery Right. I think what this means is that the world just kind of over invested in us, right? More money's been spent on me. More education has been spent on me more jet fuels been spent on me. So I should probably do what I'm uniquely good for. World probably doesn't need me. Sowing in a factory dungeon, all right? Maybe I can contribute something more. If you have an iPhone in your pocket, the cost to that thing is equivalent to the global median income. I'm not trying to make you feel bad, I've got Piles of these things lots of them with the screws taken out because trying to figure out what else I can make out of these parts .>> [ LAUGH ] You should have an iPhone, you should drive a Tesla, you should do all these expensive things that we get to do first because it's our job. To advance these technologies into the world, to waste a lot of money on them and figure out. What's good about them but then understand that the job isn't done just because we made a product for rich people. Then the job is to take on a problem that you don't have. That a billion people have. That's harder. Here's an example. This woman is Pac and $ 25, 000 worth of vaccines. Into a crummy two dollar Styrofoam cooler and she's going to truck him out into the bush. Start injecting kids, about half of those vaccinations are gonna fail. And they fail because it too stay cold. There's no detection for that, so we're injecting kids anyway. Every year a quarter million kids die. Something they were vaccinated against. We did. Part of the work we went through the motions we spent the money we put the people there we injected a kid to vaccinate him and didn't work. You know why no refrigerator. Your kids don't have this problem. My kid doesn't have this problem. We have refrigerators and power. The power is out for to 16 hours a day in these places. So we invented this thing. It's a kind of super thermos. You put vaccines in there. Stick it in the sunshine in the Sahara. No external power has no power cord. Come back a couple months later and your vaccines will still be cold This is literally the deployment scenario, is strap this R2D2 looking thing to a camel, walk for days into rural Ethiopia, set up a clinic, which is a fancy word for a tree with a doctor under it, and this thing, injecting kids. That's the front lines of vaccination. This is how we save. Millions of lives here all right? That's the work that has to be done. It's probably worth a little extra effort if you get these folks good tools all right? It wasn't that hard for us, the team that work on it did a lot of work. They did, you know, they worked hard on it. But I've got a lab full of PhD's in physics and chemistry and biology. It's comparatively easy for us, compared to that guy. Probably, I don't know what his educational background is, but chances are, the world invested more in us than him. Right? We can do better on these things but not with enterprise software. That you know Styrofoam cooler they use today is only good for 4 hours. So for the entire history of humanity we've had this sort of innovation methodology. Biological evolution. And that's actually how you got opposable thumbs and two eyes and the ability to appreciate music right? Through, successive generations of sex and gamma rays. We've got variations and mutations and then Survival of the fittest, you kill of the one's that don't work as well, that's how we got here and, it's amazing. It works so well but, once we got to the top we killed off the very mechanism that got us here. You used to just have to die to innovate. Now, you got to use your brain To innovate. We don't actually know if this is gonna work. For the first time. Biological evolution isn't doing the job for humans anymore everybody gets to live regardless of their fitness. At some point you gotta ask yourself. Do we need all these extra humans? Now don't get me wrong. I'm not going to tell you which humans are extra. Actually if you want that job you should probably be the first to go, okay. It's the most beautiful and amazing thing we've ever done We overcame a biological instinct, we chose the sanctity of human life, we chose to let everybody live, right? That's extraordinary, I think we made the right choice, but it doesn't come without a cost, right? Up until about 100 years ago maybe with the industrial revolution I think everybody just had to work all the time, To keep us going, right. But at some point we got efficient enough, that we got a little bit of spare time. And I don't think we were, you know we didn't squander it, we were industrious we invented the entertainment industry. Books, movies, music, elections, video games all the things that we do to fill our free time. We're very industrious. But at some point, I think we hit peak entertainment, right? At some point, maybe we don't need you to watch more Netflix. And something really important is about to happen, which is that robot is coming to take your job. Actually, you guys probably won't be that lucky. No robot is going to come and take your job. Unfortunately, you suckers are going to have to work until you're dead. Or you might get to retire a little and then play golf for a while before you're dead. But essentially, you're not going to be that lucky but lots of people who work for you will be lucky and a robot What common take over if not their job, at least a bunch of the work that they do right? And is really important to understand this right? I mean I know we are talking about this fantastical staff with artificial intelligence and what not, the truth is the only, there is only one thing you gotta know. Right. Computers for our whole lives were really good at following sequences of of instructions. If you could map out the plan, go from A to B to C, computers could do it, they've been doing that our whole careers. Now computers can figure that **** out for themselves. Right, so now they can do the things that we thought they'll never do. Right, and computers probably should, robots probably should come and take over any mini or dangerous, repetitive, boring job that they can do better than a human, right, but that leaves you with the big question, what are the humans good for? This is Maslow's hierarchy of needs. So it's way of thinking about what humans need to feel fulfilled. I'm sure other people have beaten you over the head with this slide in the past. But look at the bottom of this pyramid. Think about where technology is helping. Physical needs, Breathing, food we have lots of technology reason to feed people warmth, sex with condoms in vibrators you know keep going. Things like health. All kinds of technology for that well we're at a point where. We're using technology to help us meet these needs. The bottom half of this pyramid is what I call quantity of life issues. We can keep you alive longer, we can make you healthier, we can keep more people alive but keep going. Friendship, Family, there's no app for that. Where's technology helping? Sexual intimacy, you're using technology for that? You're probably doing it wrong. [ LAUGH ] Self esteem, confidence, achievement, these are what I call quality of life issues. And I'm here from the front lines of inventing new technology to tell you we don't have any idea what to do about that stuff. We're not even working on it. Silicon Valley acts like we're solving every problem, nope, we're working on the bottom half of the pyramid, right? Now as [ UNKNOWN ] highest level Meaning in life, creativity, the things you need to feel happy. That's not stuff technology is currently helping with. These are the happiest people I know. You look around you you see a lot of people hurting. These are orphans in Ethiopia In their classroom. They've never heard of overcrowding. Look at this kid, you know anybody happier that him? [ LAUGH ] I don't pity this kids. They've got something we don't have. He knows exactly who needs him when he wakes up in the morning. Robots can only do what we teach them how to do. And right now we are terrible role models for robots. This is my daughter, she came from that orphanage in Ethiopia. And I immediately started raising her with a bunch of American problems. For example, we have this robot in our kitchen, called Alexa You guys know Alexa? I noticed she talks to Alexa kinda bossy like, Alexa, tell me a joke. Well, she talks to Alexa the way I talked to her. And I said, hey, there's gonna be a lot more robots coming. They're probably gonna need some friends. They also have very long memories, you might try to be a little nicer to Alexa, so she liked this idea and she would say hey Alexa please tell me a joke, which totally confuses Alexa cuz apparently she wasn't trained on respectful training data but listen, [ LAUGH ] You and I never got this manual. Right, these technology are coming and they're here to help us, right? They are here to help us and it's not a technology problem. If it's all goes south and we become pest for robots or [ UNKNOWN ] you don't get to blame the technology, you get to blame humans. For not choosing what to do with it. These are human values problems. And it's up to us to decide what future we wanna create, it's up to us to use these tools to become better ancestors. [ BLANK_AUDIO ] Every tool is a hammer, I can smash your head with it, I can build you a home. Artificial intelligence is no different. That's what I had to share with you guys today. Thanks so much and I'm gonna jump off stage and you guys can run me out of town but hopefully, if you get to catch me afterwards I'd love to hear what's on your mind and if you think I'm full of ****, please tell me about that too. So thank you. [ APPLAUSE ] [ BLANK_AUDIO ]

CEO Initiative 2019: Former Hacker Reveals His Latest Project

Tech

A former hacker, Pablos Holman shares some of his latest mind-blowing projects and reveal why, in order to greet the automated future, we’ll need to become better humans.

This part of the program has to move very quickly this is the report backs from the working groups that happen before lunch and each co chair gets one minute and I'm keeping the time. So this is an exercise in concision. Can you take all that conversation that happened for an hour and a half this morning and boil it down to the most important point. And we're gonna start with the report back from the group on employee engagement with John Haley and Patrick Quinlan. John, you going first? Thanks. They're starting the clock now. Hey, don't take away from his minute. Three things we wanted to talk about. One was Value, bringing together employees to define and interpret your values. So the sense that when you want to build the values for a corporation, they shouldn't be the values of the CEO, they shouldn't be the values of the board, they should be the values of the whole organization. And really dealing with your customers and your clients to do that. And a key part of that was we said Look, it really goes to it's not just values creation, it's values co- creation. Following on the theme that Lindsay had this morning about you have these five different generations they're working at once. You need to get them all involved. And part of the discussion was that you can write down values, but sometimes the words mean different things to different generations too. And so you have to work on interpreting them among all the different groups. Living the values and this really gets to the issue of building better managers. And we talked about the fact that the values of a corporation aren't what you have written down on some piece of paper somewhere, the values of the corporation or the way you comport yourself every day, what your employees feel what your customers feel how you do, and it really gets to what you reward And what your reward is largely a consequence of who your middle managers are. And I think I'm not allowed to say that somebody said some managers shouldn't meet humans. So I won't. [ LAUGH ] But we need to all work on holding them accountable for talent development, which is an important part of it. All right, then finally, we want to have benefits which are personalized to individuals. And the notion there was that, the idea that one size fits all, doesn't work. It's actually one size fits nobody. And what we need to work on, Is more things somethings will be for the Gen Xers, some for the Millennials etc. But, we have to have something that's more responsive to all the needs of all the employees. Great, Patrick you're gonna add to that? Yeah, so, I think, so again the overall topic was the contract between employees and employers. And we think one of the important things to think about that is that what employers are looking for is organizational justice. So what does organizational justice means it means that there needs to be a certain level of transparency. There needs to be a level of consistency and expectations. So if if x action if I see a leader do x action, that regardless of how successful that leader is, if x action is bad. There will be a consistent response to that. So organizational justice, consistency and transparency. And then the layer below that comes or the layer alongside that is that the leaders inside the organization are lit are living that justice on a day to day basis. And they're doing it in an inclusive way. [ CROSSTALK ] So thank you Patrick touched on not neither of you reported on the minority of one in the room who said that if somebody leaves his company they're never coming back. But I can't tell you who. Penny Pennington and Tom Wilson. Go, Tom. There you go, Tom. Excellent. So, Penny and I had delivering economic inclusion and investing in employee financial health. As we all know that financial health of Americans in abysmal and it's worse around the world. It's hidden by the macro statistics, being 3. 6 % unemployement rate, yet a whole bunch of people, over half the people don't have $ 400 for emergencies. And a tremendous amount of work has gone on, on educating people creating more transparency. So we felt like that needed to continue but we needed to do more and businesses needed to do more. So we had two ideas for business. Business one for the government for business was to for businesses to commit to significant reductions, let's say half of the people in of the employees use your company who are financially fragile. And we toyed, we said we need to come up with a definition on what financially fragile is the Fed has a measure where 37 % of the people in the United States are financially fragile today don't have 400, 000 on this right measure We said we should get a measure. We should have that measure applied to all of our employees. And we whatever your measure is at your company, if you're at 70, get to 35. If you're 20 get to 10. That if in fact we commit to do that will come up with processes to improve. They get people, more included. We do think we need a coalition of companies to do that so that if you're interested you should feel free to reach out to use and see if we can't come up what to measure and then what goals would we set for ourselves. The second was to increase business commitment to creating jobs, making it equal to profit. We talked about that at lunch Are creating a job's standards creation board so actually putting measurement around job creation at the same level we measure profit because it's as important. And then we can hold ourselves accountable for did we create jobs. The concept being it's no help being educated if you don't have any money. So, first thing we got to do is get people money. We get them money. Then they'll get educated, educating them when they don't have any money doesn't really make any sense. The third thing is government tax policy, perhaps to be changed so that we could give employees tax free money to pay off their student loans, or their save for retirement, just like we gave them tax free money for their medical benefits today. Good, and Penny ran out on us? Penny delegated this to me. You deligated all to Tom? You're happy with this report? I'd be happy to give her- Did she represent you? She; s got a mic, all right. Hee represented Australia where the only thing that I would add about the jobs, the job creation is creating good jobs. And so the idea of what is a good job, there are standards. Jane was talking about certain standards that are in the market place around what a good job is And holding ourselves accountable really creating more of those. Great, thank you Penny. Technology for good. We got three coaches on this one so that means you'll each get, I don't know, somebody to divide two minutes by three. Yeah go ahead Tiger. Talk started off. Great team. First start with values. Every company has values, use those as your North Star. And then anytime you think about building new products with AI and machine learning etc. Apply that principle of your values and make sure it qualifies. Number two, very strong governance structure around how do you make sure unconscious decision making biases are also visible, which is a really strange discussion but even unconscious decisions have to become visible and a governance structure around that which often means you have to include outsiders in that governance. And I'll build on that, we spent a lot of time talking about how we mitigate and reduce bias in our AI systems and algorithms that starts with the data, the diversity of the data al throughout the framework formation learning which includes training of the models validation and deployment. The second topic we spent a lot of time discussing was about diversity and inclusion. Very important to we solve for the problems we know. So it's really critical that we have different diverse voices around the table as we build and deploy these AI systems, not just age diversity, or ethnic diversity or gender diversity, but also cognitive diversity, people with different backgrounds, even the history majors and the room [ LAUGH ] Big debate around that Good Simon. So related to the skills of the people doing the work. Universities right now producing a lot of graduates who have great skills in writing Python and understanding the math behind A. I.. That in itself if everyone is trained in the same way he's going to lead to everybody producing the same answer. We talked a lot about ethics. And so a conclusion was, that we should kind of work on the universities to make sure that they are producing graduates who have that as part of their training, before they go into this field, given it's gonna apply to so many different industries, and affects so many different people. The other thing we talked about was regulation. Tech industry hates regulation has a view that the government or a bunch of idiots. Nevertheless, despite if you think that regulation is probably coming your way if you work anywhere in the field of AI, and so we believe it's incumbent on industry, to start working with the people in power, who are gonna define that regulation to make sure they do it in the right way. Great, thank you. And finally workforce development. Margaret Kane, Sarah Franklin. Great. So we had an overarching theme that we just need to think bigger. I think all of us felt we're all doing things in pockets but we need to just really think big work towards achieving scale and really push the old system off the cliff. That was kind of the overarching thing. The other couple of things we talked about is really starting early, teaching life skills, public speaking, financial literacy to kids at the high school level, expose students to the working world. I think we all talked about, you can't be what you can't See? So trying to get them engaged at that level and encourage more project based internships and apprenticeships. And then the second is really we just really need a better level of engagement from the private and public and community organizations together. How do we bring folks together, give the private sector a greater chance to shape the curriculum around job skills. I think there was a lot of discussion that There's stuff we can do to help whether it's a community college or other programs where we can say these are the kind of skills we're looking for. It has to be a living thing so it can't be static and then let employees shape the curriculum as it involves expand the role of the community organizations serving as mentors in reaching particularly lower income opportunity youth. So. Great. Margaret takes us back to where we started the day this morning with Ragram Raja and the importance of community and business and community working together. Sarah. Yes and two more things to add on to first reinvent credentials. So really create pathways into the workforce that aren't necessarily just a four year degree. And also to not screen only for the four year degrees when you're hiring. And for companies to collaborate to make sure that our credentials are industry recognized and and validated. And also when we're reporting that credentials to ensure that it's not just academic performance but also like on the job type of performance that can you know lead to the achievement and the second thing is having the courage to land our brands. Recognize that people can be credentialed in delivering your technology or product that don't necessarily work at your company. So that can give that to other people. So those are the two other additions to the topic. Good insights out of all of those discussions today. I hope You're all getting something from that. [ BLANK_AUDIO ]

CEO Initiative 2019: Fortune CEOs Want To Make Business Work for Everyone

Fortune CEOs Want To Make Business Work for Everyone

Careers

John Haley, Patrick Quinlan, and others want to make business work for everyone.

Emotion AI, tell me what that is and why the people in this room should care about it, what it means for business. Well, if you think about human intelligence, it's not just about your IQ, right? I mean, as leaders and in our professional and personal lives, your emotional intelligence matters perhaps more importantly than your IQ. And that's true for technology, as well. As AI becomes more mainstream and starts taking on roles that were traditionally done by humans, like acting as your personal assistant or hiring your next coworker, driving your car, you know assisting with your health care. It's really important that technology doesn't just have lots of IQ but also EQ and so we're on this mission to bring Artificial Emotional Intelligence to our devices. Well, so how you can a device to recognize emotions? How can you exhibit EQ when you're a machine? Yeah, so the way people communicate nonverbal signals, only 7 % actually of how we communicate is in the choice of the words we use. It's 7 %? Is the actual text, only 7 %. Okay. 93 % is nonverbal, and that's split between your facial expressions As well as gestures and vocal intonations. So a big part of what we do is focus on the face and using deep learning and machine learning to build algorithms that read your expressions. Can you show me how that works? Yes, let's try a live demo. All right. All right. I've been warming up my face all day for this, so- Yeah. [ LAUGH ] Here's hoping. [ COUGH ] Yes, let's give this a shot. All righty, so let me come in. All right, so start with your best poker face. My best poker face, okay. Okay, great, [ LAUGH ] so as you can see, the software has basically identified Matt's Face, it identified your gender as male based on how you look. So far so good. [ LAUGH ] And then it's locked onto the main feature points on your face. So your eyebrows, your eyes, your mouth, your lips. And then let's test the software, let's start with the simplest expression, which is a smile. Okay. Pretty universal, all right 100 %, that's a great smile. Yes. [ LAUGH ] And then let's cycle through those. Okay, look surprised. Okay, looking surprised. You can see that it's all mapping Matt's dominant expression to an emoji. Always one of my own, okay. How about a brow furrow? Brow furrow. Which is the corrugator muscle. It's an expression of yeah, anger, exactly, or confusion. Smirk if you're skeptical, and it's asymmetric little corner pull. Yeah, there you go. Disgust. Disgust? [ SOUND ] Okay, that's like a [ UNKNOWN ]. That was disgust and disgusting. Okay. And then, this is my favorite, this is the lip pucker, which is the Kardashian duck face. That's awesome, all right 100 % That's the one I practiced most Thank you Matt. So this is just kind of a toy app to demonstrate how the technology works. When we first started it could only identify three expressions, And using a ton of data and deep learning, it now can read 20 different facial expressions, seven emotions and we keep adding more and more. So you've gathered this data, this wonderful gallery of my own photos now, what would Affectiva, your company, do with it? How would you translate that into something that a business could use. Yeah, there are a lot of use cases. So 25 % of the Fortune 500 companies, so a number of you here, are already using this technology to test how people emotionally engage with content. For example, video advertising, and then the data drives decisions around media spend advertising spend targeting. So that's one of the initial use cases of the technology. So these are the kinds of decisions and working in media I know this that are often made in agonizing ways by dozens of people sitting in a room is this kind of a shortcut. Cut to the answers or decisions? It's a data- driven approach to making these decisions, right? Often, as you said. And often, actually, you're making the decisions and you're not the target audience, right? So if you're targetting millennials, you may not know what will resonate. But now, you have a way to test that And of course, you can test it through surveys, but that's tapping into your cortex. It's not really tapping into the visceral, emotional response people have. Sure, that's the [ UNKNOWN ], you're in the verbal realm, the 7 %- Exactly. Of what we feel as opposed to the 93 % that we- Absolutely. Express, that's interesting. So you've talked a little bit about how your own company's working a little bit more in the automotive sector. Tell me a bit more about. The applications of that there. Yeah, a number of years ago, we started getting approached by global automakers, especially in Asia, actually. And they said, this is very interesting what you're doing with emotions. Can you expand that to other states of mind, like distraction or drowsiness? And so now we're very focused on the automotive industry, which is undergoing a ton of disruption, as you know. One use case is around safety monitoring. So, driver monitoring for distraction and drowsiness, sometimes intoxication even. But what's really exciting is kind of the continuum of use cases through semi- autonomous vehicles, and eventually fully autonomous vehicles, where we're understanding how many occupants are in the vehicle, what's their demographic, how are they interacting with one another. And then the vehicle can personalize the experience and potentially monetize the riding experience. So this is a way to sort of change the atmosphere in the car, give, for example, Spotify a way to know which playlist to play or something like that. Exactly, changing the lighting, changing the type of riding experience. Maybe you want it to be quiet and zen cuz you're gonna get work done. I want it to be fun. Somebody else wants to sleep and the vehicle can adapt accordingly. And can you get that? From what you currently know about facial expressions, can you get that much data, that much information about a person from the images you can access today? Yeah, so the face has about 45 facial muscles that drive kind of thousands of ways to express emotions and cognitive. States and we're building our way up through these different kinda repertoire states. So right now we've collected over 4 billion facial frames from 87 countries around the world and that data's being used to train and kinda validate these algorithms. That 87 countries point that you just made, that's important from an ethical perspective and avoiding bias, right? Because you want a broad pool of images So that you don't accidentally build software that only recognizes white guys who make Kardashian faces- [ LAUGH ] Or something like that. Absolutely, I think this is one of the biggest concerns I have around AI in general at the moment. Which is accidentally perpetuating bias that exists in society in these algorithms because we're not paying enough attention to the divesity of the data. And so, we are very thoughtful about ensuring that the data's gender diverse, ethnically diverse, age diverse. And then, once we have the data, it's all about how to sample these deep learning algorithms in a way that You know equally represents different minority groups. I mean it was really telling actually yesterday that both in the opening sessions with Jenny and Brad, there was a lot of emphasis on facial recognition technology discriminating against you know women of color and and other minority groups, and it's not done on purpose, but we have to be very mindful about how we design these things. Sort of the unconscious bias. Exactly. I have another ethical guess concerned about empathy and emotion and AI, which is this. Not long ago, I was taught that empathy would be essentially the quality that would protect my job from being taken by a robot. My ability to read your cues and to read the cues of someone I was speaking to or talking to Was something that separated human intelligence from digital intelligence. And the thought was that, that was a realm that we kind of the empathy centric jobs essentially would be where humans would be concentrating in this eventual imagined Division of labour Yeah So with technology like this what is to stop an empathetic robot from taking my job or any [ UNKNOWN ] job I don't think of it as a competition between humans and robots or humans and machines. I really think of it with a lense of partnership, so. Because a lot of our communication is digital. How we communicate, again, personally and professionally is often done through digital communication. I think it's imperative that we have emotion AI technology to augment our EQ. What does EQ look like in a very digitally driven world? Right now when you're communicating online, you're EQ's probably like 20 points lower, right. Yes. Cuz you're missing all of these nuanced non verbal communication. So my hope is that our emotion AI technology augments people's ability to communicate with empathy and compassion online. I mean I actually, I'm a big believer that a lot of the bullying that we see And kind of the rhetoric that we see in online communications on Twitter and what not . Its because you don't see the effect you have when you send a person a really mean message. You don't know how you don't see that effect it has on them so. So with our technology could make up for some emotional deficits that are misuse of technology is. One of my favorite favorite examples around that. So imagine you have a nurse, and the nurse now has a number of home robots. Social robots that take care of patients at home. And have the ability to clue in that nurse if the if the patient requires actual human intervention. So it's a way to augment the nurse you know the nurses now these mini bots, right? But they really work for the nurse. Exactly. I have one more question about ethics and then I'd like to throw things open to the floor. Our COI knowledge partner is jam packed and they recently did a jam packed recently did a survey of businesses to ask them about their AI Strategies and one thing we found, is that only about a third of these companies have a framework in place to avoid the claims of bias problems ethical conflict problems that we've been talking about. If a CEO came to you, someone in this room, and asked you how to kind of come up with a framework like that, what would be your quick, 30- second piece of advice? I like to think of it, about the ethical development and the ethical deployment of AI. So with the development, it's things like data consent and data privacy, and mitigating bias. On the deployment, it's Just really thinking carefully about where do we deploy these AI algorithms, and where do we steer away from them? So, we as a company do not work in the security and surveillance, and lie detection space. Sure, sure. We feel that that breaks the trust We have with our users and consumers, so that's one. Development and deployment of AI. Is opting in an important standpoint from the person, you know. Absolutely! So everything we do is opt- in, and often not just like verbose language that you don't really understand, but actually really simplifying it. So you know the camera is gonna turn on, who's gonna get access to the data, Yeah, that's really important. That's great, thanks. I'd like to throw things open for questions, if anyone has any. And, as always, if you've got one, please stand up and introduce yourself. Anyone out there? I'm looking for the yellow paddle. If not, I have some others. [ LAUGH ] [ LAUGH ] Up here at that table, thank you Hi. I'm Paula Goldman. I am the chief ethical and humane use officer at Salesforce, so I think a lot about. Great. The questions you were just asking. And just noting that just in the last few months, facial recognition technology has become such a hot button topic. You have large portions of the transgender community saying kind of ban the technology altogether. You saw the city of San Francisco say. You know we're not gonna use it in law enforcement. So there seems to be a very polarized discussion, rather than a nuanced discussion about the pros and cons of the technology, and I wonder how you think about how we, Balance those things, so we get the good. Right. But also avoid some pretty extreme downsides that people are talking about. Yeah, absolutely.. I mean I do wanna underscore that there is so much potential good out of this technology. One of the areas I'm most passionate about, Is applying this to mental health, so the very first [ UNKNOWN ] case we explored was autism. How kids with autism understand non- verbal communication. But also things like facial and vocal biomarkers of depression and Parkinson's and flagging suicidal behavior. They're so much good and potential Transformative applications of this technology. So I think we have to as a community of AI thought leaders and innovators to really kind of be able to articulate what are the potential for good and what's the potential abuse. And be at the forefront of that, I mean I think legislation and regulation is really key, and it's coming. But I don't think we, as a community, have to wait for that. I think we have to actually kind of self- regulate and put some frameworks and guidelines in place. Have you, or I should say, has your company ever been offered an opportunity that you decided to turn down for these kinds of reasons? Yeah, we're routinely approached by kind of surveillance, and security, and law enforcement organizations. But the one example that sticks out, in 2011, we were raising venture money. We were about two months away from running out of funding, and we got approached by a free lettered Venture arm of a security agency and they wanted to give us 40 million dollars at the time which was a lot of money for us as a company. And we had to think really hard about whether, because the alternative was maybe we run out of money all together and cease to exist and I just couldn't. I kind of went back home and imagined what life would look like if we did that pivot. And I just felt that that was not why we started the company. It was not in line with our core values and so we turned it away and thankfully were able to raise money from like minded strategic inventor investors. I'm glad that turned out to be the case. Rana el Kaliouby is the CEO and co founder of Affectiva and were so greatful you were here, thank you so much. Thank you. [ APPLAUSE ] [ BLANK_AUDIO ]

CEO Initiative 2019: A Closer Look at Emotion-Recognizing Technology

A Closer Look at Emotion-Recognizing Technology

Rana el Kaliouby, Co-founder and CEO of Affectiva, explains how ‘Emotion AI’ will change consumer engagement. 

CEO Initiative 2019: Citigroup's Journey to Closing the Pay Gaps 

Citigroup's Journey to Closing the Pay Gaps

Finance

Michael Corbat, Citigroup CEO, discusses the steps the company has taken to close the gap–and why other companies should follow suit.

thank you for finding yourself in the middle of this great conversation about gender equity. This is a wonderful development for all of us. You are actually the only company to use raw data Thio generate these numbers. That right? Not only us company don't believe that to be correct on the whole planet. So I thought we should start at the beginning with your journey two doubles and this wonderful announcement I know from reporting for for the last couple of years, gender equity is harder than it sounds in the headlines. And when I write about it, could we begin at the beginning the walk before the run? I know that our Juna played a role in encouraging this effort, but you really spearheaded an extraordinary effort of data collection, navigating privacy laws and all of that. Why don't we start the very be sure. So we started the journey by, um I think first recognizing that we were frustrated that we were not making the progress in terms of closing those gaps that you referenced, that we wanted to recognizing that we weren't alone. And there were all kinds of excuses or reasons for why those things weren't happening. And so we looked and said, We've got to change the approach. We've got to change the narrative and to back up and talk a little bit about our numbers work a company of roughly 200,000 employees. And if you actually look at our just based numbers, we actually today a year 23 ago had had and continue to have more women than men in our company, so we could have looked and said We're 51 52% women were done but actually is repealed that onion and knowing in premise what was underneath, we knew that we really had a significant representation challenge. So the first thing we actually did is to go to the core principle around equal pay for equal work. And so the first thing we tested was that premise and we picked three countries in the world. We operate in roughly ah 100 countries and we pick three of our biggest countries to do that. We looked at the U. S. We looked at the UK, we looked at Germany, we got some outside help and we looked and toward the numbers apart. Got external validation in terms of all the numbers and not surprisingly, found that were pretty close. We weren't exactly where we wanted to be, but we had a small gap we needed to fill. We went back, made those reparations very quickly. And then we went public to the rest of the firm and said, We've done this and now we're gonna go to the rest of the company. We're gonna go do the other 95 or 96 countries that we hadn't done. We did those the next year. And so premise one equal pay for equal work regardless of how you come at it. The second piece we then as we peel the onion, was really looking a CZ. You describe what we we call within our from the raw pay gap, right? And the raw pay gap. What it really illustrates is if you have the ability to look someone in the eye and say that you're getting equal pay for equal work and you have Maur females in this case than males, but your raw pay gap comes back and says that your median female in the world is getting paid 29% less than your media and mail. It says that you have a representation issue, right? So what we did in that representation was senior levels we defined with those senior levels were effectively assistant vice president through managing director managerial positions. And then we went back and said that we're going to peel this and we're gonna get granular, and we're going to set goals for ourselves and we're gonna measure ourselves against those goals and make sure that we close that gap. But before we get to your retention and development plan is a long time leadership nerd and reporter, I'm interested in the nuts and bolts. I want to talk about the global peace because it really is a very interesting component. Privacy laws are different all around the world. But you're also doing this work in countries where gender rights are not even on the agenda in this way. So I was moved to discover that 30% of your chief country officers are women, and that includes places like Turkey and Saudi Arabia, where there's all kinds of other cultural components going on. When I think of pay equity, I think of the the African American woman in the high potential pool in the Atlanta market and the ripple effects for her family and from the community or the Latina in the first leadership job in Los Angeles market. You know what that change and what that investment in her is going to mean? What does it mean on a global basis, particularly countries where this is not on the agenda? Why, I think in many cases you mentioned Turkey. You mentioned Saudi Arabia those air in many cases franchise changing, environmentally changing appointments in the rules. But I have to say in each of those cases, the business community, politicians, the government were extremely supportive of those moves. And you can sense you can feel right away when you go back into those places a palpable change in terms of energy enthusiasm. What's going on behind the scenes in those countries so you can really feel feel on the ground? The change when you when you make those kinds of moves. So before we get into that symbol to the bigger picture, what are you measuring? I know income inequality is something that's very much on your mind, but when you think about what gender equity means across the board, What are the kind of big picture social benchmarks that you're looking for? Well, I think first from a you know, we would start from a company perspective. And that is, does our do our people Does our population match the consistency were serving in this world that got so much going on. And we're getting the right perspectives. And I say, You know, I'm 36 years at our company and I sat around the table with a bunch of politely put middle aged white men and had groupthink and to get those different perspectives and whether those perspectives are gender or race or all the things that you can bring to the table and part of part of what we've talked about is this desire or this necessity to start getting comfortable with the uncomfortable. A lot of work. You know, I'm a fan in the middle aged white man. I married one so, but the constant discomfort is really the big issue. I think it's particularly hard for people in power. We were talking earlier and joking. One of the things that move me when I interview people around this work is that leaders in your position I have to say the same thing over and over and over again, and they have to say it with a freshness and vitality. The 75th time somebody that you've cherished, it's been part of your leadership team for a long time says This is nonsense. This is not a meritocracy. And then you say, Well, when it goes back to one of the books I think was Jack Welch wrote to you It's a great lesson in leadership and in particular the big company, and you travel when you say things and you get so tired of hearing yourself, Jack Welch said. You say you say it again. You say it again when you're tired of saying, say it again, you can't stand to hear yourself Say it again. You say it again and I'm always amazed on exactly that point. I'll be somewhere and somebody will say You said it and I did really resonates with me and you're like, Where were you? The other 100 times I've said it right and the power of communication and you know what we call in our company is a tone from the top. But as importantly, the echo back up right, because if the tone from the top comes down and there's no echo coming back up, it's not getting hurt, Right, Right. So you got some big goals here. You're your goal is increased representation at the assistant vice president through managing director levels to at least 40% for women globally and 8% for black employees in the U. S. By the end of 2021 which is coming at us like a freight train here. And we all know that you can't hire your way out of this. You can bring in all kinds of people. But if they're not welcome and if they can't figure out how to navigate the system, what is your plan for this? Well, art is really one that I would in many ways call a three pronged approach. So when I came into my job of being C over company six and 1/2 7 years ago around my table, we had no women. We had no us. We have one US minority around the table. Today we're five women were two to us minorities around the table and so clearly at the top, the tone from the tops got to be there and making sure that we're bringing people through, promoting running the proper slate processes and getting the right people into jobs. But really, if you're going to solve this and I think where at least our company, our industries fallen short before is the organic, sustainable piece of it, I think we've been okay at bringing women, minorities, etcetera into the firm. But I don't think we've created the environment that creates the sustainability of wanting them to be there. So the attrition has been very high, so as fast as you can bring in these talented people, you're losing them because one competitions high. But I think you've got admit we probably haven't created the right environment, that they actually want to stay an investor careers and and so we've tried to take that approach of getting the tone in the demographic from the top headed and publicly stated is going in the right direction, getting the balance, and this year we will be 50 50 men, women of our incoming classes. But the important pieces, how do we create the mentoring? How do we create the career path thing? How do we create the dynamic within the firm where people say this is the place I gotta be. This is the place to build my career, and you cannot solve those numbers that we've spoken to simply by external hiring and if you do solving to sell them temporarily because you won't have the organic pipeline that actually feeds that and create sustainability. So before I invite people to join this important conversation, I thought we could talk briefly about how retention is different now that sort of the modern way that you are making sure that people are trained and engaged, which is very different. When you started many years ago Oh so many years ago, I started at our firm 36 years ago. It was a very, very different firm and different world, and I describe that the company's engagement around me was a methodology that I called shut up and suffer that I came to work. I put my head down. You know, I worked my fingers off lots of long hours, didn't complain about anything. You kind of did what you did. But, you know, in those days, and certainly in financial service, is you were kind of on this rocket ship in terms of what these companies were becoming. And I started in a predecessor firm of ours were 2500 place and we grew to over 200,000. And so it was grabbed the rope and hang on because, you know, if you can do anything, you know you're going to get pulled up in this. And that was in some ways least part of my career trajectory today. What I describe is that career path thing is a jungle gym. Okay, Right. And in there, um, you know, I'll speak to the financial service Is industrial speak for our company? We're roughly 200,000 employees. We're gonna continue to grow and do things, but I actually don't expect that we're gonna need a lot more people. So there's not this head room that's being created around lots of new jobs and things going on. Technology and all those things will grow. But technology will continue to create some of those boundaries. And so when we talk about somebody coming in a couple premises is one millennials. If you're not engaged with them, it is highly likely they're engaged with someone else. The expectations are different in terms of, you know, engage me, move me, challenge me, Keep me steep on the lead on the learning curve be vested in me And the career conversations we often have are very different that we try and get prescriptive fair early and say you may not be right but where do you see yourself? Where do you want to go? And then we can work backwards and say, You know, that's the job you want. You're gonna need some skills and these are the skills and these are the types of jobs Some of these may feel lateral or they may not feel like big promotions, but they're essential to getting to that chair. And the great thing is, is, when we go through that, we get great engagement. And by the time we get people up to where they want to go, they are far better trained, far better trained, and certainly, But you know, I was or my generation ever was because we completely curated that career in a way that gives them all the skills they need. And so I think that managers and leaders that we're turning out today are light years better than you know in the old way. So, um, who would like to join us? Let anybody have a question looking around. Hi. It's right here. And your cattle. Um, and first of all, thanks for being a champion for this clause and for supporting catalysts as well. I know that this Royal pay gap issue is something that is you got a lot of flak for from your peers. But it's also something that, like in the UK there requiring it right? What do you think the trends are gonna be around this? And how do we get the understanding of this better, especially around the work pay gap? Because I think that the pay equity seems to be something that people understand on fairness. But the raw pay gap seems to be a more difficult concept and something that there's a lot of pushback on. You know, when you be blunt about it, when I having done the pay equity work and having a reasonable understanding of, um, our own demographic representation, I wouldn't say that there was a complete ah ha moment in the numbers. Of course we do those numbers we should roughly know what they are. But I think the important piece and the uncomfortable peace around the raw pay gap is one the magnitude of the number, right? But then it's really in my mind of a first generation or a first derivative event off the bigger problem. And so when you put it out there, the only way you solve that raw Paige rap is by getting the demographics of leadership right. And so it kind of calls out the early issue. And then you've got a lot of work to do in terms of mapping and figuring out the right way to solve it. But it just kind of puts the issue right in the middle of the table and I think forces you to deal with it. And for us it was an uncomfortable moment, but we felt it was the right thing to do to put it out there, and we'd already started the other pieces of work and we had a plan and we were implementing the plan. And so let's put it out there. Let's reinforce what we're doing and let's you know, let's make sure we're going in the right direction. With time for one more question. Welcome. I'm just wondering about the cultural changes that you see. I'm sorry. I'm ELISA Nelson, President and CEO. Vital voices. I work on women's empowerment issues, and I'm particularly interested in what you said about the government in some countries that you're working in around the world, being interested in what you were doing and supportive. But I'm just wondering about the cultural impact of what you've seen. So not just I mean, obviously, it's wonderful, The pay is great. But what I also tend to think about is how does this change the way that people value women in communities and countries that girls see themselves? Do you see more women applying for positions? Is the government looking at changing legislation are actually implementing legislation that they have just interested? If you could expand upon that So I think 11 many things, many things change. But one thing that clearly changes is when we she and where women have gone into these and earn these positions, they come in and they're they're talent magnets, but their talent magnets, we've had the ability to just attract and retain great talent around having put these people in place. It happens to be that they're phenomenal leaders, and they're really good at what they do. But the energy when you do that. And I would say again going back is, You know, I've been worried about putting people in harm's way and what the reaction of the business community, how certain constituencies. And I've got to say that I've been very, very positively surprised in terms of the global embrace that's out there, and to me, that's exciting. And I think our people see it and they see the energy. And then, by the way, you know what I talk about inside of our companies, you know, a bank is a risk organization. We take a risk whether we're providing your credit card, your mortgage or financing your company, and to have those perspectives right as we think about. And by the way, the world's pretty complicated place today. And to have those voices around the table that look ATT issues rather than in the group think I mentioned earlier, very different perspectives, creates a willingness to challenge and creates a set of perspectives that I know makes us better at what we d'oh and I and I believe the company sees that it lives it. We're going to have to leave it there. That was a perfect end. Note. Thank you so much. Thank you for being here.

So Tom we have to update some of those numbers. Yeah. I think it's 44 million dollars in charity. That's absolutely right, we're just under 50 million donated with a quarter billion people running our programs from diaper recycling in Amsterdam to chewing gum in Mexico and so on. Chewing gum, cigarette butts, toothbrushes, everything you always thought you had to throw away. That's right. You can now recycle. So I want to start with recycling cuz this is, incredibly fascinating. When you look at the amount that is actually recycled, there is a fantastic piece in science advances. The journal that looked said that out of all the waste that we've created the plastic waste only 9 % Has been recycled I've seen figures as high as 14 % but that doesn't seem too successful. And in fact you are the king of recycling and you call it a failing business model. Absolutely. I think the 9 or 14 % is generous at that. The real issue is and I know we've read about this in many different papers that the recycling industry from a macroeconomic point of view is in collapse more or less and that's because of three major reasons. The obvious ones are low oil prices so it's hard to compete against Virgin plastics and virgin materials. The second is the end markets like China but now not just China but many other countries in the pack region and so on who's to import all the material have stopped for the right reasons mind you that's taken away 50 % of the demand market which is a horrendous thing. If you're a recycler anywhere from Japan to Europe to here. But the third is the most unintuitive which is the quality of the materials we put in the waste stream is becoming significantly lower. Recyclers make money on what's sort of like a profit per touch and packaging is becoming significantly lighter. So you have to collect now ten bottles for what used to take one bottle ten years ago. And it's becoming more complex which means you have to put more resource, more processing resource against Extracting that limited value. And basically, just less things, less things, less things are becoming recyclable, and that's in the middle of a garbage crisis, at the very same time. Yeah, and it's so light, the plastic, that it's actually flying off the conveyor belts, yeah. Absolutely, some bottles are becoming so light, they're now viewed as almost flexibles, which means they're not being recycled. All right. And it's so sensitive. What makes something recyclable is not about technical mousetraps, or the technical ability to do something. It's simply about economics. Garbage companies are were partly owned in Europe by Suez or here in Canada by Waste Connections, these large waste management companies and they're looking to mine your waste. So if they can make a profit, it's recyclable. If they can't make a profit, your waste will be not recyclable. It's that simple. So One sort of, to show you how thin that line is, a clear soda bottle like this, which is made from PET, is recycled in Europe in most cases. But if you add a little color to this, just make it green, which many bottles are, from sparkling water to carbonated soft drinks, that added pigment takes the value down just enough, to make it now not recyclable anymore. It's that thin, the line. So, this business model, essentially, has collapsed since you began your effort to recycle in 2001. And you've had this big, aha moment, which was that you were in Canada, and you You opened up the closet of a friend's home and you saw the pot plant that had been struggling forever and suddenly it was flourishing and you realized this was worm poop- That's right. That was doing this. And you thought this is how you started your entire- Yeah. Recycling business, taking compost and recycling it through worms. What's the ah- ha moment- Sure. That you've just had? Cuz it is radically different from- Yeah. It's very different than growing better pot, for sure. Now we know the pot smokers in the room. All joking. That's why I asked the question. That's right, we wanted to get everyone out. Just this past January at Davos, at the world economic forum, we announced a new platform in collaboration with most of the world's biggest producers, from European, [ UNKNOWN ], Coke, Pepsi, all the way to Shell, and And others, as well as major retailers from Catfo Tesco and so on, to try to think about how to solve waste at the root cause because recycling is a good solution to the symptom of waste, but it's not solving the root cause of waste. I mean academically If you look up the word recycling in any dictionary, the word waste must be present. So it's the best way of managing waste, but it's not solving waste. Mm- hm. And so we went on a journey, this is actually two years ago. This also spawned out of the world economic formal. We launched a big ocean plastic initiative in 2017, and we were starting to talk with producers about, how do we go a step deeper? And how do we solve waste at the root cause? And the landing Or the landing point we go to was that the root cause of waste is using something once. And so it's not plastic that's the big evil. We like to project everything that is anti- plastic. That's pretty evil though. Well no, no. But it also makes you live longer. It also is what you're sitting on. It's what you're standing on. It's what your driving in. I mean the world is a plastic world. Think the issue is if we took this carpet and threw it out after one use, Right? That would be pretty bad or the chair after you sat in at once, that would be pretty bad. This you're going to throw out after one use. And that's the problem, right? So now why do we love disposability and not just by the way in consumer goods like look at all the disposable coffee cups we voted for right here when you had perfectly good ceramic mugs to choose from Right, I mean, just thank you for the prop, we prepped on this ahead of time. Yeah, that's great. But you know why we did that, and everyone here is enlightened to it, and yet 50 % of the audience voted for disposability? Yeah. It's becase it's so amazingly convenient and affordable. Right. And that has democratized products, people can access, say, shampoo and soap, be able to access it. But it's created this huge crisis And also, I'd argue the quality of products has gone down in the process. Things have become cheaper, and less investment per unit. So you say you wanted to solve for disposibilty. You wanted to give people the affordability and convenience That this offers or those coffee cups, [ COUGH ] but without the downside of that. Well, right, and what's the downside is a more expensive and even less convenience. So there's been many reuse models out there. Loop is not the first one. But every single one relied- Well, tell us what Loop is cuz I'm not sure everyone knows. Yeah, sure. So Loop is the platform Form you can learn more about in the US at loopstore. com or loop magazine [ UNKNOWN ] In France we're launching it about 10 countries over the next twelve months and it basically is an engine for producers to be able to create durable versions of their products, everything from you Tide and Cascade all the way to Haagen- Dazs and Tropicana, all these sort of consumer goods. Where instead of the consumer buying the product and owning the package. And I would argue to the gentleman who raised his coffee cup do you wanna own that cup when you're done drinking it. Right. You're gonna cherish it for many years. It's your property. Okay, there you go. But it's weird right, you own it, it's your property, and yet you don't want it. Isn't that a weird thing? And most of what we buy falls into that category. So by shifting the ownership back to the producer, some amazing things happen. And these were the a- ha moments that you were driving at is that then they become financially motivated to make the package as long lasting and durable as possible, not as cheap as possible because what's in the price of the content isn't the entire package. So you know in a coffee when you buy the entire Higher price of that cup is in the coffee. Where the entire price of the water is in this bottle. But if you borrow it it's just depreciation of the durable package. So now you're in a financial situation where you wanna make it as long lasting and durable. Now what's beautiful about that is Long lasting and durable doesn't just enable reuse, which is great for sustainability. But enables the most epic unparalleled design innovation that's ever been possible before. Right. [ COUGH ] The packages that these producers from the new Hagen Daas container all the way to the new Tide container and hundreds and hundreds of in between. Many are called in the best version of those packages ever invented and nothing even close. They are pretty sledge there is a clearer screen out that looks absolutely gorgeous, it's stainless steel, so now you've partnered with Nefli, Unilever, PNG, every major brand. The supermarkets that are part of this are [ UNKNOWN ] Yeah. Tesco in the UK, I mean this. These are all the big players. That's right. How did you convince them to change their business model? Because essentially what this is, is they now own the package. Yes, yes. And in fact, you're arguing that they They should treat this as a depreciable asset on their balance sheet, which is incredible. That's exactly right. And they've all made that shift. So today packaging is a cost of goods sold, right? And effectively a throwaway cost. So the goal is to reduce that cost, which makes things less recyclable and less exciting. In a durable, yes you have a bigger financial outlay at the front, but you're making an asset that depreciates over the total number of uses, not only to 0, but to the material value of that object. And the reason organizations have jumped on in a pace that I've never seen them. We were adding a big mega- brand every two days, a regional brand every 12 hours. We We just launched announced globalize the big Canadian retailer just a few days ago. And the reason is twofold. One is that the the current paradigm of consumer goods is a downward trend on margin and a downward trend on consumer delight. Everything will end up as a pouch one day, and how exciting is that? Right and you can't really differentiate either. As a producer you're differentiating on your two dimensional artwork, not on anything more than that. Here you can, the real major play was unlocking this fierce ability to innovate, where, like that Clorox container you described, keeps your wipes wet longer. You know the Haagendaas container does all sorts of amazing features never available before in a coded paper pack, which is what ice cream pints are today packaged in. So this monster opportunity for innovation. And by the way, foundationally solves waste and everyone's in a waste crisis. Greenpeace put out a list of the Top 10 contributors to the plastic crisis, nine of those are loop partners and the 10th one is in dialogue will get to 10 out of 10. So when you have your hugging does And you finish your Häagen- Dazs. What do you do with that container? Well, this is the key. I think, in any sustainability message is it has to be fiercely simple and as convenient or more than the current paradigm. If we're gonna ask to change, it's gonna be the more we change, the less success the system will have. And so we want you to echo the behavior of disposability. Because the most convenient thing to do with the crap in your home is to throw it unsorted uncleaned into a pot into a pile. That the negative of doing that is where it ends up. The action of doing that is not bad per se the fact that it ends up in a landfill is the problem or an incinerator if you're in Europe or other markets. So there you look to you throw them all dirty, no sorting nothing into a bin And that bin ends up with us as a reuse center, where we sort it, clean it, provide it back to all the primary manufacturers. So, you collected UPS. You have a loop back. It's very cool, you throw it in. UPS picks it up. You don't even think about it. It kind of conjures up ideas of the old milk man. It totally does. I want to ask who remembers that here. I am curious to see if anyone had a milk man growing up. There we go. That's actaully a pretty fair number. I had one. And here's the point, it worked. Yeah. It's just a reboot of an old idea. Now here's the interesting part, the next you ask about ahas, right? The first aha was unlocking design. The next one, which we're really just opening up the sort of the box on is with reuse you have a direct relationship with the consumer's actual use product, which is really profound. So that becomes as simple as in any shopping environment, you know what your consumer bought. But in an environment like this I also know what you returned, and the difference between the two is what's in your home. Sets up like an interesting function, for example, that will be live later this year is you'll be able to opt to get an alert ten days before anything in your home expires so that your You're alerted to say hey that pasta sauce is gonna go bad maybe you should have some pasta today instead of throwing it out in two weeks ->> Do I want Nestle to know how much Ben and Jerry's ice cream I made. Well Unilever would know how much Ben and Jerry's you're eating but [ LAUGH ] No, but all joking aside, it's about what you can enable for yourself. So, the most profound version of this is that there are certain waste trains that carry diagnosable samples on them. Now, think how bug 23 & Me, and [ UNKNOWN ] and other companies have gotten You use motor oil carries your engine scrapings, your cat litter carries your cat's urine sample. Your child's diaper carries your child's fecal matter. All of those can be diagnosed when they come in if I know it's yours, and then give back to you really interesting. So this is It's an odd transition. I want to get from fecal matter to the capitalist society. But we- Is it odd or maybe not, right, yeah. Well no because we've had this long conversation about the challenges of capitalism and how in crisis it is or whether it is in crisis or not. Your stories, you actually, your family was in Hungary. Yeah. You fled Hungary after the Chernobyl accident, Any of you who have seen the Chernobyl miniseries can understand why. You traveled in Europe before you ended up in Canada. When you got to the United States you talked about this as being this sort of bastion of big ideas. Where anything is possible. And then you built a business basically in the most unusual business model ever. With this worm poop. Yes. As your famously known, you know you've discovered the bounty of the way our system works. How would you see it now. You started a business in 2001. That is the system in crisis? For me I was born in communism and landed in capitalism and I think there is verues of both by the way. Both sides like to vilify the other but there are virtues of both. To me what really Attracting me to business. I think business is the most powerful tool for change bar none. It's been more powerful than politics, than disease, than war. It, imagine as a global CEO, many of you in the room you can snap your finger and how many lives do you change the next hour you know, Versus process and so on that has to take place. What, that to me was really exciting. What was less exciting, remember this so clearly first year at Princeton, Econ 101, the professor gets up this is the very first class and asked what's the purpose of business? And the answer that she was looking for was profit to shareholders and I profits critically important. Don't get me wrong. I'm a die hard capitalist. I think it's important. But is that the point? And I think if we make that the point, then it's going to veer us in very difficult directions. And if you think about you know, when was America at its height because it isn't at its height anymore. It was in the 1950s 1960s where the tax rates just kept going up and you had Phenomenally powerful middle class because the middle class who buys everything. And if I look at it now, it sort of feels to me like what our history books say Russia was like 30 years before that when the Tsars lived there before the revolution where the power balance went so desperate. And man I mean everyone here has got all the guns, it's got all at some point it's going to tip over. And I think it's really important that we think about how to. Bring up the middle class and not have a class of elite and the class of extreme poverty, because that's also gonna make the economy work way better. And I think there's a lot of rules, rules for making sure we're protected. And there's some level of regulation within this amazing motive. You get to create what you want. I mean, in other countries, you can't just have a dream work hard and be successful. That's a uniquely American idea. Well on that, thank you very much, Tom Szaky. Fantastic conversation. Thank you. It was wonderful. [ APPLAUSE ]

CEO Initiative 2019: Rethinking Packaging with TerraCycle CEO 

Rethinking Packaging with TerraCycle CEO 

Tom Szaky,  TerraCycle CEO, discusses a worldwide view of waste, recycling and how he began his business. 

[ APPLAUSE ] Good morning. Thank you so much, Adam. As you heard, I'm here today to talk about the inprecedented generational changes happening in the workforce, and share some ideas for how to approach them. I'll be focusing on the US market. And as you heard, we have to heart start with the M word. Millennials are officially the largest generation in the US workforce out of 2016. Millennials were born 1981. To 1996. Now Millennials are overtaking the Baby Boomers who were in charge of the workplace for roughly the past 50 years. So this is our tipping point. And it is probably not news to say, that many people have viewed this transition, in a somewhat, negative way. And it was a little bit of a chore for me to choose which, magazine cover shaming and stereotyping the Millennials would be most appropriate thank you Fortune Magazine for not having any candidates. But I try to pick the one that had the most stereotypes all in one. So what with the me me me generation, Millenials are lazy, entitled, narcissist who still live with their parents. Think it left out they want trophies for participation. But otherwise it covers anything. Do we have any Millenials in the room. Okay I'm so sorry that we do this to you. Now I will say as a Gen Xer that this is nothing new. Consider this quotation. I see no hope for the future of our people if they are dependent on the frivolous youth of today. We were the baby bus Gen Xers, born 1965 to 1980. People called us the Slackers. Where are my Gen Xer friends? The eyes remember we were the slackers. Even the baby boomers were the hippies the long hairs right? This could refer to the flappers of the 1920s. And yet this quotation is from the eighth century, BC has said was a contemporary of the poet Homer. We have literally been shaming younger generations for all of human history. I think it's time we stop. My thesis to all of you today is not to view generational change as a problem to overcome as a challenge to supersede But as the greatest opportunity of our workforce. I mentioned that millennials are now the largest generation in the workplace. By 2020 they will be 50 % of the workplace. By 2025 they will be 75 % of the US workplace. It is the nice thing to do, to understand and appreciate millennials, but we also have no choice. Millennials are the future. Millennials have been rising since the very The moment they entered the workplace. And I want to show you the transition that has taken place. From three generations, when I happened to workplace as a gen Xer in the 90s, it was a really simple story, we had people at the beginning of their careers The boomers were in the middle of their careers and the traditionalists silent, our greatest generation, were at the end of their careers. It was easy to understand, it made sense. Well, the millennials entered the workplace and sky rocketed it to the top And brought us to five unique generations that we can go back to that slide in the workplace. So the story is not just the massive skyrocketing of millennials to the top of the workplace. The other story is the expansion of the workplace in the older generations. Boomers have continued to work longer, gen Xers are planning to work longer. Traditionalists are working into their 70s and 80s and now gen Z's, born 1997 and later, are entering our workplace too. So from three generational cohorts to five in the past 25 years. To give you one current example of how this is playing out and will affect all of you as leaders, just think of the Democratic presidential primary, Pete Buttigieg is the first millennial to run for president. He's 37 years old. Bernie Sanders is 77 years old. He is a traditionalist We have two people four decades apart in age applying for the same job. How do you compare that in a realistic way? Another data point to show the mixing that's taking place is the 38 % of Americans today report to a boss who is younger than they are That changes the workplace dynamic. So the question is so what? We're all individuals you could argue that people to judge and Bernie Sanders have a lot in common. Why does age matter? Who could say that all millennials all 80 million Millennials are the same. They're not I'm not here to argue that you should change everything you do and decide that generational differences are now the be all and end all decision maker. They're one factor among many but when it comes to workforce planning, to retention, to recruitment, to engagement. The generational perspectives give you a sense of what people's experiences have been before they enter your enviroment. And what expectations they bring as employees. What technologies they will expect. What career paths they will expect. What skills they might need training in. So I pulled a few really specific data points, to show you what this might mean for you. I talked about the expansion on the older end of the work place. Many people don't realize that there are more Americans over the age of 85, In the workplace today than ever before in history, this is only going to grow as people are living longer as fewer companies offer pensions and people are making up for the money that they lost. In the recession 85 and older that's Ruth Bader Ginsburg. That's Warren Buffett. That's Rupert Murdoch. Young people today are seeing people work and be vital into the very later years of their lives. Right, we focus a lot on the 18 and 20- year- old CEOs and what they bring to the work force. But, how many people are focusing on the 80 somethings and what they can bring? Now, going back to the beginning of the work place, let's look at teen employment. In 1978, when baby boomers and gen Xer's were teenagers, about 60 % of us worked in the summer. Today, only about 35 percent of Gen Zs work in the summer. Why? Most of them are getting education. They are doing enrichment programs. We have more people going to college to get associate's and bachelor's degrees and beyond. What this means for all of you is if you employ young people directly out of school. You may be the first employer they have ever had. So what we refer to is common sense showing up on time, reporting to a boss right. Ironing your uniform may not be common sense to a generation that has never ever worked in a workplace. I've been doing this work for 15 years. I have never had anyone say that the younger generations are less intelligent, In fact, they're more highly educated than ever, but they often lack the soft skills, those common sense skills, that we often learned in those high school jobs. As Voltaire said, common sense is not so common. Another factor about young people, and this is a stereotype proved a little bit true. For the first time in 130 years American 18 to 34 are more likely to live with their parents than in any other living situation. not just because they like their parents but because they have student loan debt so we can roll their eyes about this and laugh about this and say that you want to go home and do your laundry with mom and dad or you can look at a company like linkedin that found that over 80 % of their workplace were millennials and you know take your daughters and sons to work day It was kind of a ghost town at LinkedIn because nobody had kids. So, five years ago, LinkedIn implemented Bring Your Parents to Work Day. Because those are the supporters of their employees. Because when those young people go home at night, it's not a spouse saying, how was your day? Are you gonna stay in your job? It's the parents saying, hey, I really liked your boss. I think you should keep that job. Not for nothing is a business decision LinkedIn reports that they've signed up 4000 of those parents for LinkedIn profiles. Now they were visiting their children, and they became, I think next year. Bring your parents to the CEO initiative. Yeah. Okay. Good. So this is a factor that is a reality to young people. If you have a family picnic and you invite people to bring a spouse or kid, why can't you invite them to bring their parents, if that who chose to bring to the world. How many of you when you turn 16 were first in line at the DMV to get your driver's license. Absolutely. Well, there's been a 47 % decline in 16 year olds getting their driver's license. Young people are not getting their licenses today. Uber's a little piece well but that's only recent. The reason is we can now use technology to socialize. I can play Fortnite, I can Facetime. I don't have to leave my house to socialize, right? Why get a driver's license. So what this means is young people coming into your environment have literally clocked fewer hours talking to other humans eyeball to eyeball. Then previous generations. So when you think about training in this context, you might need to teach those 85 year olds how to use your new software system. But you're also going to need to train those junior people and how to have difficult conversations face to face. Your Gen Z will never have answered a telephone, i. e a landline. That was not for them. They've only ever answered a cell phone, where someone was calling for them. So if you want them to answer a telephone in your job, it doesn't mean that there not smart, that they don't know how, it means that they have never had to do that. Now put on your marketing head, don't call it how to answer the phone, I want you to call it executive communications skills for young leaders. That will go over a lot better. With your younger employees, but what we have to rethink what kind of training is possible. So to finish up I recently published a book called the remix and the idea of the remix come from music. A remixed song is when you take a classic and you don't say it wrong or bad or outdated or should retire But you mix in modern elements to make it new and unique and appealing to the next generation. A remix in the workplace is taking the best of previous generation's practices and mixing in new elements so that it is fresh and applicable to younger generation. And I interviewed a bunch of DJ's for the book and what they told me as a little secret of DJ Put this in your back pocket is if the dance floor is empty at a wedding or a party. You play a remix because the older people recognize the classic and come and dance and the younger people recognize the new version and they come and dance. So it's an inclusive strategy for everybody. So here's three examples. Can go back to that please. Three examples of remixes. The first comes from the industry of lifeguarding. So life guarding as you can imagine had a challenge given the lack of teenagers working because kids were not applying for life guarding jobs. So a community pool in Galveston, Texas looked into their swimming pools and say wow the people People swimming laps every day are mostly retirees, why don't we recruit them? So they started advertising to senior publications and job sites. And they started recruiting people 55 and over to be lifeguards in their pools, and it was a rousing success and it spread all across Texas. We're now in that state. The fastest growing group of lifeguards are in the 55 and over demographic Why does an investment banking analyst have to be in their 20s? Why does the CEO have to have worked for 40 years? Why can't we rethink the ages that we have always expected people to be, by the way, the leader of the Galveston pool so the added advantage, the secondary benefit of hiring 55 plus workers is that they could drive themselves to the pool every day. Number two employee benefits. One of the classic excellent best practice benefits that many companies offered to their employees is 401k. Matching. Great benefits super important. Well, Price Waterhouse Coopers looked at their numbers and found that their employees again 80 % of their employees like LinkedIn are under the age of 30. They said they're not contributing to their 401k. They're not using their match. Now you could be cynical and say, they're lazy, entitled, narcissists who expect trophies for participating in the 401 ( k ) plan. They must be bad workers. Or you could actually sit down with your millennials and say, why aren't you contributing? And the answer, of course, was, we'd love to contribute to our 401 ( k ) s, but we have to pay down our student loan debt first. So, Price Waterhouse Cooper said, let's take a classic matching. And let's remix it for this generation and now, they offer a choice of matching your 401K contribution or your student loan debt repayment. Now, four percent of the companies in the United States have followed suit and I think we'll see that rise. And finally, I've talked all about idea for your organizations, how about for all of you? Another trend that I am seeing in organizations that are remixing Is reverse mentoring. Mentoring is the classic an older person and an executive mentoring, advising, guiding a junior person that should never change. But today in this unprecedented multigenerational mix there is so much value to. To a senior leader getting advice and guidance and ideas from junior people. So one example is [ UNKNOWN ], the CEO of the Estee Lauder companies, he has a reverse mentor as do all the leaders in his executive team. And once a quarter, [ UNKNOWN ] and his millennial mentor go shopping together for makeup in New York City. He shows her his 40 year career at Proctor and Gamble and Estee Lauder and what he's learned in the classics of their business. And she shows him how she uses make up. Another executive I worked with said that I don't have time to do that. Once a week I just go up to the youngest person in my team and I say put a new app in my phone. I wanna use what you're using, I wanna use venue, I wanna use Snap chat the wiki added Tinder, it was very awkward, but other than that, [ LAUGH ] The very successful experiments, but no joke the previous speaker was referred to swiping right. These are things that you have to understand. My own Gen Z mentor taught me what it meant to slide into her DMC Anyone? Instant messaging her, [ COUGH ] direct messaging her on Instagram. She said, if you really want to get in touch with me, please don't go, god forbid you leave a voicemail. Just slide into my DMs and that's how we communicate. So a challenge I'd like to give to all of you, excuse me [ COUGH ] challenge I'd like to give to all of you is to engage a reverse mentor at your organization. One of the greatest values of work is the connections that we build, and so if you build connections that are genuine Across generations, you will not only be a more successful business person, I think that you will enjoy the journey a whole lot more. I want to thank you again for inviting me to speak and I know not all of you in the room are millennials, but I thought you might appreciate a trophy for participating. [ LAUGH ] In this workshop this morning. [ APPLAUSE ] Thank you very much. [ BLANK_AUDIO ]

CEO Initiative 2019: A Conversation About Multigenerational Workplace Leadership

A Conversation About Multigenerational Workplace Leadership

Author Lindsey Pollak discusses how we can leverage a workforce comprised of five generations and meets everyone’s needs. 

We have your book and your thesis on the state, the markets, and the community as our agenda. But I thought, given the conversation we just have, I'd start with a curveball and ask you is capitalism in crisis? Well, I think I'll agree with the audience. It's not in a deep crisis, but it needs change and this has happened historically time and again. There have been peters maybe every 60, 70 years when technological change hits it. It has to adapt. It has adapted in the past. It can adapt again, but it requires some significant change. I'm sure this is Obvious to many. But given that you're a scholar, it'd be helpful to quickly give us an example of a past adaptation and how that might apply to our current time. Well, think about the second or third industrial revolution, depending on how you come. When we had big chemical factories coming on board, we had auto manufacturers coming in. Around the turn of the 19th to 20th century. And what you needed then was factory workers, factory workers who knew more than just how to read and write. But who knew trigonometry, algebra, and so on. They required a significantly higher level of education. What happened then was we had an adaptation in the US which was the free high school movement. And a lot of the potential workers went there earlier on in life, got an education and were capable of taking those jobs. Interestingly, there was also [ INAUDIBLE ] if you recall of very high migration. But the immigrants were largely experienced craftsmen, plumbers, carpenters etc. They could work in these factories because the native born children had a much better education Were much more capable of working. That alleviated the immigrant pressure for some time, at a period of very high immigration. Interesting, so problem, solution, which leads us to now. The way you've summarized the problem writ large is that there is an imbalance In our society and you're talking now about the industrialized world. So would you explain the imbalance please? Well the book is really about how capitalism finds balance again and again. And the balance is between what I call the three pillars, the government or the state, markets, And the community. Now, every time technological change happens, it upsets the balance once again, and it's doing that again. And what we require now is significant significantly higher education capabilities for workers to get the kinds of jobs that are being created, the good jobs that are being created as opposed to the low scale jobs of which many are being created. Now in order to make that leap it seems to me that where it starts is in the community because that's where you get your early education that's where you get your early nutrition That's where you get your values. By the time your 10 or 12 my colleague, Jim Heckman, who won the Nobel Prize a number of years ago, basically says you're done for. It's very hard to a change then. And often we try to make the change at high school, or in college, when, in fact, Early education has really doomed these kids. And study after study shows that when you move from a poor community and stay there regardless of who your parents are you benefit tremendously. Community matters. And what I would argue is that across the industry board not just in the United States We have failing communities, when they fail, they fail the people and the people cannot make the jump into that next level which the technological revolution requires. What I thought was such an epiphany for me in your book. If you could take half a step back I think everybody understands we have problems in our community. But why and how did we get there? When we got there? We have had a number of shots. If you think about what the failing communities are often it starts with an economic shock. In Chicago for example, in the 80s it was when the industrial Mills closed down Gary, closed down and steel plants etc. A lot of workers often African American were laid off, and then you start getting the problems in the African American communities were even after civil rights. In fact, ironically after civil rights You get the social break down, marriage is breakdown, divorce as teenage pregnancies. All the [ INAUDIBLE ] is substance abuse. You see that same thing happening in a lot of Americans [ INAUDIBLE ] communities today for the almost the same reasons. Economic breakdown causing social breakdown. But, it's worse because we have a technological revolution which has partly is responsible for the economic breakdown Demands much more of the community. Your high school education no longer cuts it, you need a college degree. But in order to get the college degree you first need a good primary education which you're not getting because the community is failing you. So It seems to me that the onset to some extent is trivial, education, everybody agrees on that. But every American president since Gerald Ford has been the education president, hasn't worked The education president. The education president. Yeah Yeah, and partly it is because you can't start at a centralized level, it has to be much more decentralized at the local level. That's not happening. So let's get to the heart of the matter about what people in this room can do. We Brad Smith, the president of Microsoft spoke very interesting last night about what Microsoft is doing, and it's Community, a meme that has gone around in the business community is that government is broke, and therefore we need to do something, you have a prospective on that >> Well I'd say you can't substitute for the things the government has to do, in a number of emerging markets or developing countries, companies do that, but. We are first well country, the government has to step up to do what it does. However there is a role for other entities also, but what I think is most important is that the solutions had better be bottom up because the problems that each community faces is very different across the country. What? You know, granite city, Illinois faces is quite different from what the problems in Arkansas. I sort of talked about a community in the book community called Pilsen in Chicago. Their problem was crime. They had really a war zone in their in their locality, many murders. In that kind of situation, no amount of money flowing through opportunity zones. First of all, it won't flow in, but even if it did flow in, it won't make a difference, because unless you solve the crime problem, business is not gonna move in. So they first had to solve crime. And for that, local community needed to be empowered, to know what to do To get their leadership together and to start tackling the hard points where you solve crime, close down the bars where the criminals congregated, get people out on the street so that crime was crowded out. He did a lot of things, but what is important is they knew what the answers were. And I think centralized solutions, you know, some large fortune 500 company saying we're gonna do this all over the place It's helpful, but not as helpful as when it dovetails at the bottom, with what that community itself wants. That community may have special needs. It may say, we need to have this kind of training for our kids, so that they can get into a better job situation. Let me gage how your thesis overlaps with some of the hot button, Political debates because one conclusion that one might draw from what you're saying is that government is the solution, but it isn't the federal government. We in fact need to drain the swamp and the action has to happen at the local level. Is that a fair paraphrase? Well, I would say the federal government is important in the things that it does But render unto the government the things that belong to the government. And what is important is what is local, what I would argue is, over time, as market has grown, market has also grown, and crowded out local initiative and social security. In the 19 century used to be local, now it's federal. There is a reason for it. Because local was incapable of handling the big calamities we had. Nevertheless I think as far as possible I would argue for more local empowerment. That would get you a local engagement, Think about what Brexit is about. Brexit is about taking back control. That's because these people feel they've no control over what's happening. A lot of power has migrated to London and from has migrated to Brussels. They want Some power to affect their livelihoods themselves. So for that I think decentralization is better of funding of power. But also you can decentralize a certain amount of control. Let the local people make sure their officials aren't corrupt. Today every time you talk decentralization there are two worries. One, the local officials will be corrupt and misuse the money, and two, if you're gonna talk about decentralizing education, of course they will start teaching creationism, evolution will go out of the window. Well my argument is, it's not that bad If they're not in the hospitals, they're not looking after your health, doesn't matter if they believe in Creationism. That's a small price to pay for the kind of engagement that comes when you control a lot more locally. So I would say decentralize, of course you can have checks and balances And with technology we can have far better checks and balances today than we used to be able to have. It's powerful and provocative point. One more corporate question, and I want to throw it open. I feel like in times passed big companies were very good, At helping their communities, in a paternalistic way, and I'm assuming you think there's nothing wrong with paternalism, that's sort of what Microsoft is doing in the Puget sound area for example. But what about communities where there isn't a well- meaning paternalistic corporation, and they're just left out. The flow the money flow at least Well, first, I do think paternalism suggests my view my way or the highway and that's what I'm resisting that. Understand what the local ones and try and work with them rather than against them. But I would argue that What has happened is, that the large corporations is now much bigger. Not relative to size of the economy, but relative to size of the community than it used to be and much more widespread. A lot more corporations identified from the community they emerged from. We're also small enough to work in that community. Fact. If you look at the Keef our act in in 1950, it's all about keeping cooperation small, so that they can be, you know, more beneficial for the community. I think we've moved beyond that. But I think when large corporations think about these things, I think decentralizing that decision process within the corporation itself, what can we do? Well let the local branch think about what works best in the local area. That's seem to me more effective that here is our large corporate plant, determine in the sea sweet and we gonna spread this all across our branches. It may not be that effective if the local people don't really think it valuable. You think it almost harkens back to the earlier days of the Republic In the United States anyway, questions please. Yes, in the back please. The mic will come to you please stand and identify yourself. [ BLANK_AUDIO ] Patrick Quinlan is conversing, so curious, kind of looking back in history there's been obviously other moments where society has gone through these upheavals. I think one of the things right now when you look at the urban- rural divide, which is also not a new divide, there seems to be an impact of drugs, an impact of literally drugs and death, which is a huge amount of destabilization in the rural areas. And if you look backwards in those other divides, there doesn't seem to be that added component that we're seeing with opioids right now. Which are truly reaching tragic proportions, How do you, I'm curious, how do you think about where we are today versus those other times when you add that additional level of oppiorism ?>> It's a great a question, i think it's a difference ofdegree, because remember there is alcohol then. And the big issues then were alcoholism in these areas. And there were rebellions, [ LAUGH ], around the taxation of alcohol and so on. But I agree that drugs adds a new dimension. Now Again, if you look at the history of the United States, the recent history, the first community to be affected was the African- American community, by this economic decline then the drug abuse. I think if you want to reverse this vicious cycle, You have to start by creating a more virtual cycle. And that means tackling first the problems that impede business from going in from creating activity and then starting more sort of start at the lowest layer of business and move up over time. That's in fact what this Pilsen community that I talk about. They had a drug problem. And they had a drug plus crime because with the drugs comes the criminals who spread it around. And they slowly have turned it around, by attacking the crime then attacking economic activity which then starts bringing down. The level of drug use but it's there is a chicken and egg problem here you gotta work on all dimensions at the same time. That's the way you get out of these chicken and egg problems. But it's fixable And it comes to my town right behind you I've been asked to ask you to stand, so I'm just following orders. Okay, Allen Murray can you talk about the inequality of resources? We talk about inequality. But really the differences between the communities, the successful cities and the left behind towns. Do they have the resources to do what you're talking about? They don't put i would say the most important resource they don't have is committed people that money is important but first you have to have a leadership a plan people getting behind an idea and i think even poor communities sometimes find that leadership but i keep coming back to the chicago example but that's exactly what happened. They found a body outside the church and the Pastor said, " Who is going to take responsibility for this community ?" And a bunch of young lads stood up and for twenty- seven years they've been working at it and it's changed the nature of the community. But, leadership is important. One of the questions we have to ask is how do we prevent these communities from losing good people? Because the good people are the most mobile. And as soon as it starts deteriorating, they start leaving. How do we get people to go back to their communities? And that's where I think some federal programs have, you know, we forgive college loans for people who go back to government, why not people who go back to the original community Please. [ BLANK_AUDIO ] Ravi Saligram with the Ritchie Brothers. It's good to see you. Regardless of one's brand of politics today, it's clear that the country seems very polarized and divided. Do you think this breakdown of communities, and the communities of haves and have nots, has been a major part of this polarization? I would put it as two pieces. One, yes. I mean, but inequality certainly has been, of this kind, has been growing. But. So long as people believed the system was fair, they had a chance I think they still live with inequality. The United States always had that you have a chance because we're gonna give you a chance to participate in that market and you can rise quite quickly there. What is happening now it the sense of despondency, I don't think I have a chance. Because in order to get those fine jobs I need to go through this process, which I start so far behind. I can't get into good schools. I can't get into good universities. I have no chance that. That's the problem. In the United States right now, and to my mind, that's why I keep saying again and again, the answer starts with the community. And let's end on, dovetailing with that, you have a perspective on what happened with Amazon's second headquarters effort here in New York City. How does that fit in with your thinking? So Amazon as you know was looking for HQ2 and it was something every mayor, every governor, was Killing for, right? Please come, please come. 25 thousand jobs, each paying $ 150 thousand a piece. Who would refuse that? And yet, Long Island Swift CIty Queens said sorry, we're not interested or at least at first Us the local politicians won't jumping over each other to say, yes. So I asked a community activist, why do you think they said, no? And the first thing was, they never talk to the community in detail Before announcing it, they should have said okay, here are your worries, here's how we deal with them, and here's the plan for the community. What would that entail? The existing community members, make sure they're not displaced because rents are gonna go up, housing costs are gonna go up Probably prices will go up but only the ones who own will benefit the others will get hurt. How do you make sure the communities stays in place? What about the disruption to the schools? Are we going to have an Amazon school that nobody else can else can get in. Or is it going to be an Amazon school that everybody else can get in and benefit from because of the benefits to the community from that wonderful capacity that's brought in. These are the kinds of conversations that didn't happen if they did happen, there would be so much more buying. And that's why I keep saying bottom up is also very important top down. Well you're not convincing people. Well I think it has been such a wonderful way to start the day with a global economist who's decided to focus on the community [ UNKNOWN ] Thank for being with us this morning. Thank you. [ APPLAUSE ] [ BLANK_AUDIO ]

CEO Initiative 2019: A Conversation About Capitalism

Former IMF chief economist and head of India’s central bank Raghuram Rajan argues that capitalism needs both top-down reforms and bottom-up policies to maintain trust in a market economy. 

CEO Initiative 2019: A Conversation With IBM's Ginni Rometty

The IBM CEO discusses what the future of automation will look like.

CEO Initiative 2019: A Conversation With Microsoft's Brad Smith

The company’s President and Chief Legal Officer explains how you can’t have a healthy company without being in a healthy community.

CEO Initiative 2019

CEO Initiative 2019: A Conversation With Marc Benioff About Workplace Culture

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