← DealBook Summit
DealBook Summit
The New Rules for Leadership
01:16:36
Watch all of the day’s interviews. The modern business leader walks a tightrope: between fighting for the success of their company and shareholder value; between communication and leadership ability, demands for innovation, media representation, political pressures and international dynamics and besting their competition. So, we asked: How do they manage these competing interests, and what does it mean to lead with purpose? How do current Fortune 500 leaders see their role today, and what defines their leadership? We also asked the big question of the moment: How are they approaching the integration of generative A.I. into their business models? And how are they building resiliency in their own companies? Panelists: Alex Chriss, C.E.O. of PayPal; Beth Ford, President and C.E.O. of Land O’Lakes Inc.; Bob Jordan, President and C.E.O. of Southwest Airlines; Ynon Kreiz, Chairman and C.E.O. of Mattel; Pete Nordstrom, Co-C.E.O. of Nordstrom, Inc.; Emma Walmsley, C.E.O. of GSK Modera...
Loading summary
Transcript184 lines
- [00:01]
A
This episode was recorded at the 2025 DealBook Summit. This year's Dealbook Summit sponsors include premier sponsor Accenture, associate sponsors U.S. bank Vanguard, Invesco, Q. Q. Q. And University of Michigan, supporting sponsor Capital One and contributing sponsor Invest Puerto Rico.
- [00:22]
B
This is Andrew Osorkin with the New York Times.
- [00:25]
C
You're about to listen to some fascinating.
- [00:27]
B
Breakout conversations from our annual Dealbook Summit.
- [00:31]
C
Recorded on Dec in New York City. You'll hear experts, stakeholders and leaders discuss.
- [00:37]
B
Vital topics that are shaping the business.
- [00:39]
D
World and the world at large.
- [00:45]
A
Hello, everybody. Hello, group. My name is David Brooks. I am a columnist at the New York Times. I started in September 2003 and they have not been able to wedge me out of this job ever since. And for those of you who are listening and watching, we are joined. I'm going to start at this side. This is Alex Chris, who's the CEO of PayPal. None of these companies need any introduction. Next we have Beth Ford, who's the CEO and president of Land o' Lakes. Over here we have Bob Jordan, who's the president and CEO of Southwest Airlines. Over here we have Inon Kreitz, chairman and CEO of Mattel. Then Emma Walmsley, CEO of GSK, which I still call GlaxoSmithKline. I guess that's bad, but we call it GSK. And then over here is Pete Nordstrom, who is the CEO, you guessed it, of Nordstrom's. And now the team here did some calculating. And around this table, the companies here have a market cap or enterprise value of a combined $222.6 billion. So that's a lot of market cap around the table. And the team around the table, employees. 263 and 450 people. And if you include the people I employ, that's 263,000, 451.
- [02:02]
Employ anybody? Just myself. And we're going to talk about first, about what it's like to be a CEO these days and where people find value and meaning and purpose in the role. Then we're going to talk about how to do this impossible job. Whenever I interview a CEO, it's like interviewing a president. I come away thinking I could never do that job because you have to know about AI. You have to know customer service. You know, to employees, there's just a million things you have to know about. And then finally, we're going to talk about the world and what it's like to open up in a world where the economy is unstable, where trade is more problematic. And so we're going to start there. And let me start with Beth. You know, you work with farmers. And so the first question, and this will be for most of you, like, what's the most meaningful thing that you've achieved as a CEO?
- [02:53]
E
Well, I think it's elevating the understanding of what is happening in rural America with agriculture, with the food system. And it's amazing to me now, I did not grow up on a farm, but I am from a farm state. And it wasn't that I had this ambition to go work for Land O'. Lakes. I've worked for seven companies, six industries. I've been in Land O' Lakes for now 13 years. And the CEO, this is my eighth year. Why did I make this change to Land O' Lakes and what do I find most meaningful and what am I seeing? Well, Land O' Lakes is a Fortune 500, is a Fortune 250, but it is also a farmer owned cooperative owned by local rural retailers and farmers. We work directly with farmers and with rural and rural retailers and we're in 10,000 plus rural communities. We see the whole food system. We literally are on the farm. So what do I find meaningful? Well, there's an intimacy to this model that I really love, that I feel like my now 40th year in business. All of the things that I've learned are consolidating right to this most important work of my life where I need to elevate the understanding and the importance and thus the resilience of what is happening in these communities, these farms, the food system.
- [04:13]
And I see it every day. I admire so much the resilience of the American farmer, the work that they do and things that pop to my mind about the why 19% of the population lives in rural America. They comprise 44% of the military. Service is deeply embedded in these communities. I see the joy, even though I see the struggle. I get the phone call, hey, I'm not going to make it. I'm going to declare bankruptcy. I can't make it anymore. And farm profitability is down, has been for three years. Bankruptcies are the highest since 2020. And so the meaning to me is very obvious. It is that family, their community, their farm.
- [05:01]
Their family every day. And it is making sure that they have the tools that enable success, not for their business, but their family, their communities have to have investment. 20% of the population in rural America lack access to broadband, an enabler. So I think that the meaning is very simple for me. It's very intimate. I know these families I know this board is comprised of farmers and local retailers. I admire them, I respect them. And I think we have as certainly as Americans need to understand the investments that are necessary to make sure our food system remains resilient. I think we should be investing in it as we invest in all national security areas. And so, you know, I have meaning not just in the work, but in the, I guess the intimacy of the model with these families and their connection.
- [05:56]
A
Yeah. Now, Alex, you run a company that has a famous founding generation. What have you found? Is there an event that you found? This is why I went into this. This is why I'm alive. Yeah.
- [06:06]
C
You know, I, early in my career, I ran my own small business and I knew how hard it was and how terrifying it is in that moment when you are scared to make payroll and you're not quite sure you have access to money. And small businesses struggle with cash flow. Every day, PayPal serves 30 million small businesses around the world. And when I very similarly have those conversations with small businesses, we brought one to one of our all hands to show to our employees what we do. It was a company called OP Way. They make shoes out of North Carolina. They were hit when the hurricane came through and family run business. And after 15 years of this family run business, they were put out of business overnight. They come to PayPal. We're able to, because we can see their cash flow, give them access to a working capital loan and give them the capital they need to get back on their feet. That's what makes my heart beat faster, gets me jumping out of bed in the morning. And it's what we try as a mission to make sure that we spread across the entire organization. It's those individual small businesses that are able to survive, employ the majority of employees and be able to thrive because of the products and services we can put into the market.
- [07:20]
A
I've got to ask both of you, you both mentioned small businesses and small farmers. Do they look at you as business partners or they look at you as big bad corporations?
- [07:28]
C
I mean, speaking of PayPal, they absolutely look at us as business partners. We only make, I mean, the way our model works, we only make money when they make money. And so for us, we're not charging them anything above and beyond helping them be able to thrive as much as possible. So, you know, at least our business model works to be additive to their business.
- [07:51]
A
Yeah.
- [07:52]
E
You know, I say to mine, you know, to answer that question, the, you know, to our team, our success starts with the members success. We are not successful because we Made this profit. In fact, many times I will hold profit a little bit down. I'll hold some level of cost savings at the farm level so that they can be made more resilient. They think of us, yes, as a business partner, but I think mostly they think of us as family, as friends, as folks who show up for them, with them, who they can call, who they can share their excitement about what, you know, I just had a grandbaby. That's, I think, the way that our members, our business partners think of the team.
- [08:34]
A
Pete, when you step back from your role, will there be a moment you said, yeah, I'm proud of that. I did that. That thing made a difference in people's lives.
- [08:43]
D
Yeah, there really isn't a moment. I mean, we just went through a big moment as a business. We took the company private, but no one really cares about that. Customers don't necessarily care about public or private. So I'd say probably the biggest thing in my generation, I've been doing a version of the job I have now for 25 years, is just to see through the change that's happened in our industry and kept a culture and a values relatively consistent with what's what got us here in the first place. And, you know, we didn't want to be known as the first generation norms to screw it up. And I feel good that we've been able to keep the train, the tracks as the business has really evolved with, you know, the advent of how online shopping, everything really just changed everything.
- [09:24]
A
You know, I mentioned you earlier, I got through Covid because of Uno, because of your card game, and still played that with my kids over Thanksgiving, just again. So you make people laugh. That's got to be rewarding. But is there a moment, something you've done that you think that's what I'm proudest of?
- [09:42]
B
You know, Mattel is a very special company in many ways, but what we do matters in children's lives and we take an active role in shaping future generations. And when you come to work, you realize that what you do is, has a societal impact, real impact on the world out there. And our job is to become trusted partners of parents, families, caretakers in helping them raise their children and infuse positive, healthy, important values in their lives. And, you know, our journey has been about transforming the company from being a toy manufacturer that was making items to become an IP company that is managing franchises and thinking much more holistically about the journey. The company is celebrating its 80th anniversary this year. Some of our brands have been around for decades. In fact, Fisher Price has been around longer than Matteo over 90 years. And the only way you can keep these brands alive and important is by taking something that is timeless and making it timely and creating this cultural relevance, emotional connection that keep these brands evergreen and always important. And, you know, reflecting on what, you know, kind of seminal moments or important moments over the journey within Mattel. You know, I can think of two things on opposite sides of the spectrum. On one end, easy to think about the Barbie movie that was our first film that we produced that became not just the biggest movie in the year it came out in 2023, but the 14th largest box office movie in history and Warner Brothers biggest movie ever in 100 years. And this was our first movie. So this is obviously a big moment for any company, especially in the way of showcasing our strategy and the potential of our brands to emanate outside of the toy aisle. And on the other hand, you have many, many, many small moments where you touch and impact people, individuals like you said earlier with your family or young children that have their own moment, their own small individual moment with the product that we create that touches the heart. I see this all the time and I'm always excited and touched by these events. Whether you see people watching our movie on flight, crying in front of it in a small screen on the plane, or when I was traveling with my son a couple of years ago to Brazil, we went to do some water sports and we stayed in a small fishing village in a remote location in Brazil, three hours north of Fortaleza. You need to gather on a 4x4 car. You're in a fishing village. We're having dinner in a small restaurant, and we see commotion and noise in the corner. And I looked around to see what's going on, and I see people are excited about something, they're holding something in their hand, and I went to look, what, what is that about? And guess what? They're playing Uno. And so, you know, you reach people in every corner of the world. And in the aggregate, having that impact is truly meaningful.
- [13:22]
A
Yeah, I hate it when I see people reading my column on planes. But sad thing is, they're also crying.
- [13:30]
I also spend much of my life debating, starting at age 7, whether the wheels on Hot Wheels cars are really hot. Finally, at 62, I decided they're not. Now, Emma, you, you're in the healthcare business.
- [13:42]
D
Sort of.
- [13:42]
A
I'm not only sort of. You're literally in the healthcare business. So there's purpose built into that, but it's also A big business with huge investments, long research times, lots of regulatory there must be. Is it a challenge to keep the focus on making people feel well versus all the financial and other stuff that comes with running a company like yours?
- [14:03]
F
Well, as you say, it's very easy to find meaning when you're working in health care. And actually I don't think it's the challenge, I think it's the unifying force, the purpose. We remind everybody there's 70,000 of us around the world who are working in 80 countries every day to literally get ahead of disease. And you know, this is why most people do this very difficult job. Remember that 90% of drugs don't actually make it the way through the development process. It takes years and it costs billions. So the reason we are able to mobilize people in the morning is because this is something that impacts every family, every community, every company and every country. Lest our memories be too short about what, you know, health security means at global scale. So, you know, in terms of the, the things that can kind of register deeply as a moment. When I joined gsk.
- [15:09]
I actually joined originally to run the consumer business. I moved from China to London to build that up. And there's no doubt that one proud moment in terms of impact was when we spun that business out to be a standalone company. The biggest merger that Europe had seen this century actually.
- [15:29]
But the reason we did that was to free up the balance sheet, to invest in the reason that GSK exists as a company, which is to discover and develop meaningful scale drugs and vaccines. We doubled our investment in R and D. We've done since in the last five years probably more than 30 deals to add to the pipeline. And today, this year we will have a record, probably five new drug approvals in meningitis cancer, the first new antibiotic in nearly 30 years for common UTIs for hopefully in a couple of weeks we'll get the first six monthly asthma treatment that will reduce the number of the kind of attacks that cause hospitalization by over 70%. And we've got the first longer acting biologic for chronic obstructive pulmonary disease, which is the third leading cause of death in the world. So that's just this year. And Today we have 15.
- [16:30]
Scale medicines and vaccines that will all launch in the next few years, each of which could have revenue of a couple of billion. But exactly to your point, I prefer not to think of it in terms of the pounds or the dollars because half our business is in the us. I actually like to think of the lives impacted you've got six CEOs around this table. For all the privilege and access that we have, two of us will personally fight cancer. Two of us, if we make it to 80, will deal with neurodegeneration, and two of us, if we're not vaccinated, will deal with the excruciating pain of shingles. But these are just some examples. And.
- [17:15]
The reason to get up every time something falls over is so that you can meet this enormous amount of unmet need in the world. And GSK will this decade reach 2 1/2 billion people on the planet through our global access programs. The way we open up our IP for really tough diseases for the developing world like hiv, the projects we do in malaria and infectious diseases. So it's the scale of the impact and it can mobilize everybody through the most difficult days.
- [17:49]
A
Now, because I'm a hard working reporter with access to Wikipedia, I understand that you have a master's in Latin or classical languages from Oxford.
- [17:58]
F
Yeah, yeah, very.
- [17:59]
A
As someone who has that kind of degree, has it been great or inconsequential that you have this degree in Latin and classical? Well, you can name a lot of diseases that are long.
- [18:12]
F
Well, listen, I am always incredibly grateful for my education and you know, I'm really struck by how different and broad based the American system is. And I think in the uk, which has its pros and cons, if you know what you want to do when you're 17, which you know most people don't, I'm not sure I did really, but you are able to go very deep in a, in a subject.
- [18:38]
And I actually think the understanding of language, Latin is an, is an incredibly logically constructed language that allows you to see patterns and I think has been incredibly helpful to understand the kind of conceptual constructs of organizations and is definitely a trigger for being able to play three dimensional chess when you're trying to look through the long, long term, quite aside from the history and the beauty of language. So, you know, if you come to talk to us about how we navigate the pressures and responsibilities of these jobs. A prescription of poetry at the end of the day.
- [19:19]
A
Ask for a poem at the end of this.
- [19:22]
Now, Bob, I'm looking at the heart on your chest, on your lapel and your business. You take metal tubes and fly people to airports. And yet when people get southwest, they think the heart they think of funny. You guys are funny. They think you guys are egalitarian more than other airlines. And I'm thinking, I think the heart is relatively new. That it's sort of an update on the brand. And so would that be the thing you would mention or are there other things, parts of you?
- [19:47]
G
You know, I think a traditional business response would be I'm really proud that the team is driving the biggest transformation in the history of our 50 year old, 54 year old company. I mean we, we are changing our products, we're adding a science seating, we're adding premium, we're going to new cities, we're adding partners that can get you all the way around the world and on and on and on. It's an incredible transformation of the business model which could be hard to do at 54 years old. Team is doing that and I'm really proud of them. But I think that the thing that I am most proud of is that we're putting our wonderful 72,000 people back in the middle of the brand promise. Because the way they think about service and hospitality every day.
- [20:32]
In a humble way that brings joy and humanity to an industry that is not often known for that and we stand for that. That's why we wear the heart. And below that it's not seen is if you're going to expect your employees to serve their customers that way, then we need to serve our employees that way. The closest group to my office is a group called Cohort Care. And their only job is to know what our employees needs are and meet them. And because if you're a family, then you're going to take care of your family. And it comes back incredibly to the company. I was flying in the cockpit not too long ago. I like to, I like to get out and serve with our employees and talk to everybody and get in their way. I was flying with, with, with our couple of our pilots and I was talking to the captain. I said, how you doing? He's kind of quiet. And I said, you don't know what's going on in life. He said, well, he said, you know, I lost my teenage daughter in an auto accident this last year. He goes, but I'll tell you what, the way Southwest Airlines surrounded my family and surrounded me, I'll do anything for this company and anything for our customers. And that loyalty of the company to our employees and therefore the desire to be passionate about service because they received it is what I love about Southwest Airlines.
- [21:55]
A
Now for that first question, I thought we should all get a shot. And for the next questions, I might be a little more not all six. So Alex, I'll start with you. Everybody has what somebody called a decisive likes of advantage, like A specific thing they do, A superpower that they do. And mine is if you give me a mass of documents, I can look at it and draw, synthesize a theme. That's my one trick. I've been doing it over and over again for 40 years. That's unfortunately what AI does.
- [22:25]
So far. But is there one thing that, like, you've become CEO, all of you became CEO when a lot of other people didn't become CEO? Is there one trick that you think is the thing you do that is your decisive life advantage?
- [22:39]
C
Well, decisive life advantage sounds very, very aggressive and exciting. I may have to go find one of those. I think one of the things that I've always enjoyed doing and I think has become a habit that certainly helps in this role is being able to see patterns across industries and experiences that have nothing to do with the business that I'm in. And so much of our job is pattern recognition, and so much of our job is seeing what's working and what's not working. And I love just being curious in how other businesses, other industries, other things are being run, being able to take those patterns and. And then apply them back to the products and services that we're building. And so that's something that I just think if I look across my career, I've just consistently gotten better at doing that and try to bring that to life every day. Just to give you an example.
- [23:33]
There was a show on Netflix called A Chef's Table, which has taught me so much about customer service and customer obsession. Because when you watch how chefs have to serve, I mean, just think about. I mean, we're all in the customer service business to a certain extent, but to get the instant feedback from someone who you've put a meal that you've tried to create in front, and you can look on their face whether they enjoy it or not, and to do that multiple times a day every day, I think is just exceptional. And that show really was something I could learn from and brought back to the team as, hey, this is the kind of obsession. These are the kind of things we need to be able to bring in. So it's that pattern recognition across industries that we may not even be playing in.
- [24:21]
A
I have a friend you mentioned curiosity. I have a friend named Tyler Cowen who's an economist at George Mason University. And when he hires for his center, one of the questions he asks, and he wants to know about their curiosity levels. So the question he asks is, what tabs are open on your browser? Yeah, I don't know if you can tell me what tabs are opening on your browser right now. Some chef's table.
- [24:41]
C
Unfortunately, my browser has, like, 700 tabs. That is the challenge.
- [24:46]
A
Yeah. Is there anybody else who thinks this is the one thing I can do that is my superpower?
- [24:52]
F
I wouldn't describe it as a superpower, but I think a skill that has served me well is being able to ask good questions. And when you move industry, because I spent 17 years in consumer goods and then moved into pharma with a classics degree, being able to ask the right questions when you're not an expert in a subject has been very helpful.
- [25:17]
A
Okay, I could be a CEO. That's my job too.
- [25:21]
Now. I wrote a book some years ago called the Second Mountain, and it was about. One of the themes of the book was it was about I'd achieved way more career success than I ever thought I would, which I imagine is a common trait around this table. And it wasn't as satisfying as I thought it would be, like the, like, getting on the bestseller list, that sort of thing. And so it was about, like, success. Career success wasn't really as satisfying as I thought. And I realized when I talked about that book that I could have a second career as a CEO whisperer, because a lot of folks, especially guys, would come up to me and say, hey, can we have a phone relationship? Because I don't have anybody to talk to in this role.
- [26:00]
Pete, is that something you recognize? Is it truly lonely at the top?
- [26:05]
D
I think I have a unique situation. I'm literally a co CEO. My brother's the other one. And I get asked often, like, well, I mean, how's that work? I don't know if I could work with my brother. And it's great.
- [26:18]
I think we trust each other. We're not in competition with each other in any way. We are completely aligned, at least philosophically, in spirit of intent. We're different people. But I don't know that I'd want to have my job if he wasn't in it. I mean, the ability to be able to have a trusted partner to talk through things almost always brings you to a better place. And I don't take that for granted. And I feel super fortunate.
- [26:47]
A
Has anybody else felt that once you achieve this job, some of the things you could chat about with people around you, it's no longer as easy to chat in that way?
- [26:55]
E
I think that's true from a business perspective, but I tend to talk to my wife. I mean, she's got a very significant career herself and is Very smart. And so in the morning when we're having coffee, one of us will say, okay, now I need to download. I do not need your advice. I really just am getting this out and saying it out loud. Please do not offer me advice. Or sometimes I say, no. What. What are you hearing? And, you know, and maybe you can respond with a little bit of a recommendation, but that I do find that just a real pleasure and a privilege to be able to say something to somebody who only has the best interests, certainly mine, and, and anybody in the company at heart. And I think that is. It does free you up a bit.
- [27:41]
A
Okay, so that's the positive things. The hard thing about your jobs is it involves some painful decisions and painful conversations. And so you have to sometimes let people go, close divisions. Is it hard to be like. It's inherent. You're going to be disliked by some number of people. Do you find that.
- [28:02]
G
You know, I think the.
- [28:05]
This is a little bit of a tangent, but you've got to figure out, you know, only the things that you can do as CEO. But if you're not doing those things, the company's going to stall. Things are not going to move. You're not deciding, you're not moving along. One of those things, to me, what you described, it's anything that is a people issue. You know, the people are the heart of Southwest Airlines. So anything that we do that impacts our people as a decision is difficult, and you've got to balance that with customer needs. And so I think the, you know, anything that's going to impact our folks, by definition, is the most difficult to work your way through. And I want to make those decisions and everybody, and be sure that everybody understands that it's my decision in terms of what we're doing in the direction. But, you know, at the end of the day, these things are really important. You know, our jobs, but. But, you know, three weeks after we're going out of our job, somebody else is going to be there, we're going to be forgotten. And so I think you don't want to take your job too seriously, but I think you're going to take how you treat your people and your team very seriously.
- [29:10]
A
Is there a way to. When you have to make this hard decision, is there a way to cushion the blow, or are there things that you live with after knowing that families are. People are going to lose their jobs or whatever?
- [29:22]
B
You are responsible for many people and you take that very seriously.
- [29:31]
Part of our transformation has been about simplifying and reducing the size of our organization meaningfully and just at the corporate level. In the first three years of the company, of my job at the company, in fact, probably mostly in the first two years of my job, we reduced the number of employees from 13 and a half thousand at the corporate level to eight and a half thousand. So 5,000 job reduction. And of the eight and a half thousand people, we rotated three and a half thousand people, almost 4,000 people that were new in the jobs. So a lot of transition and a lot of people were impacted. And every person matters. When you make those decisions, you have to think about the individuals and be respectful and mindful.
- [30:22]
And really think about the impact that it has on people's lives. But at the same time, you have to make those calls. Of course, when you make those decisions to people that you've been working closely with that were your colleagues by near your office, it's even harder because it's more personal. But you really do have to separate the personal side of it with what is the right thing for your business in this job. But at the same time, do it in a way that is compassionate and show empathy and you really do care. You know, going back in my, you know, early side of my career, the first time that it dawned on me that you actually have real responsibility over your employees career in life is that when I was about 31 years old, first company I run, Fox Kids, we were looking to launch a new business that didn't exist. And I ended up convincing a seasoned executive, 50 plus years old with four children to quit his job in a very established, credible big media company and move countries to work for us in London. And I just convinced him and he moved. And when he landed, I was thinking, oops, I just convinced this guy to pick up his family, four kids and a wife, relocate and bet his career on my idea for a new business that we're about to launch.
- [31:52]
And that was the first time it actually hit me that, wait a minute, this is real like impact you have on people's lives. Luckily it worked really well.
- [32:04]
A
I was afraid you're going to say you fired him a week later.
- [32:06]
B
And he was thankful and grateful and it was a perfect fit. But it was a moment when you realize that you're actually impacting people's lives. But ultimately you need to have a very clear North Star, be transparent, be, you know, have a clear purpose and be truthful to the mission. And that is always the best way to communicate and explain why you do certain things in the way you do them.
- [32:33]
A
Yeah, I mean, I used To, I teach on the side because I like teaching. And I. I used to teach at Yale. I only teach the schools I couldn't have gotten into. And I was teaching Machiavelli's the Prince, and he has a line, and there's a very famous line that it's, for a leader, it's better to be feared than loved. And my college students were, like, horrified. And then I led a seminar also teaching Machiavelli's prints to corporate leaders in New York. And they were like, absolutely. It helps to be feared a little. Is that not really the way modern corporations work?
- [33:05]
F
Well, I'm not sure I would put those as the only two options because it's certainly not a popularity contest, and I think.
- [33:17]
It'S really important to remember that. But you do need to be able to mobilize an organization. And, you know, when you talk about the role of the CEO, I've never believed in CEOs as superheroes. You're only as good as the quality and commitment and energy and alignment of the people you have around you. And so I think you have to be able to motivate and focus and inspire people to keep going on the hardest of days through big changes. And so they have to believe in, in why they're doing what they're doing and what they're doing and be signed up for how the organization is in terms of culture as well. So fear, you know, I'd never have that as an aspiration, as a. As a CEO, because you want people to be able to bring you bad news. And if they're scared of doing that, you're going to have a real problem in terms of transparency and pace of decision making. And I think one of the things you have to be alive to in these jobs is do you have enough truth tellers around you, especially as you go through the sort of degenerative disease of being a CEO, when it all starts off brilliantly and everyone's transparent, tells you all the stuff that's going on in the company, and then.
- [34:43]
At the beginning, you can bring all these fresh ideas. But I always like the idea that year one is really hard, but year two is much harder because it's all your fault by then. So I don't think it's fear or love. I think you, by definition, as a leader, should be looking for followership. And how you inspire that is probably unique to each of us in the moment that we're leading our companies.
- [35:08]
C
Fear is very effective, but it has a ceiling.
- [35:13]
E
Yeah.
- [35:13]
C
And I think, you know, I have always followed leaders and found the most effective. And the way I try to model is to lead with head and heart, to lead with inspiration and compassion. And when you can mobilize thousands of people around an inspiration, I think the, the, the ceiling of what you can accomplish together is just so much higher.
- [35:35]
G
Yeah, people will come. They, they will do what you say in both cases, if they fear you or, or if they love or. You created followership. But fear is not sustainable. The I love creating teams. That's my favorite thing to do is build biz is going to a business, build a team. Build a team of folks that are far better than I am. And.
- [36:00]
This is kind of dumb simple. But the way I have always done that is come in and create trust. And the only way you create trust is creating vulnerability in the room. And it's only going to happen if I go first. And you create that in a room of terrific people. And they can do anything. And it's not about. They'll follow the CEO. They'll follow the fact that they believe in what this team is doing. And nothing is more motivating or powerful than that. Fear sustains for a while. Love sustains for a long time.
- [36:33]
A
Let me ask you guys, for anybody at the table around time management. My wife just happened to send me a video today of somebody in Wozniak or somebody talking about Steve Jobs, how he managed his time, how he figured out what to spend time on. And it surprised me, the strategy, it was find the three things you need to do in the next 18 hours and everything else is just noise. So he fixed it. Seems short term to me, frankly. But he had to figure out a way to, how to portion his time. Do you guys have formulas, practices on how to pay attention to the things that really need paying attention to and not all the noise?
- [37:08]
F
Well, I grew up in a military family, so I, you know, I would say both a strength and a weakness is a degree of discipline and kind of control on diaries. And I think just like.
- [37:22]
Capital allocation is strategy, I think time management or time allocation is strategy for a CEO. And so I'm, I am, I couldn't do it on an 18 month or, sorry, an 18 hour horizon. Although I suspect he probably did that in the context of what he was trying to achieve over the long term. But I'm pretty disciplined around.
- [37:42]
What are the objectives of the company, you know, on a year, three year and we have to look at a 10 year horizon. What does the CEO uniquely. Should you uniquely spend your time on that has been Harder over the years to adjust to. And I do very obnoxious color coding of my diary and which meetings I go to and all of that kind of stuff, I find that quite effective. The if the issue that I've really struggled with on time management now is.
- [38:11]
How, as a CEO, you don't screw up other people's time management by your enthusiasm suddenly creating a huge ricochet in the company because you ask an innocent question, and suddenly lots of people are working on it. So that's something that I've had to watch out for.
- [38:28]
A
Anybody else have a trick?
- [38:31]
E
I think, you know, that's interesting. I think all of us write like, what am I needing to do today? And, you know, what the critical priorities are, what your strategies are. But just like when you say, well, is your life balanced? Well, sometimes, no. Many times, no. No, it is not. And so you can kind of feel, I always know, okay, I'm working on this. But you know what? I really need to be out in the country. I need to get out onto some farms. I need to spend some time because I'm understanding that this is a stressful time, or I need to be with customers or I need to be with teams in the manufacturing facilities. And so this, you know, I think that there's. There's something. I do tend to be very disciplined, and I'm very structured. But I can feel when, you know, I really have not been present with customers or with farmers or with the members or whatever, and I really need to get out there. And I'll say, I want to spend this next couple weeks. I need to be out in the country with them because I'm, you know, I can feel that. That angst. I can see it coming into my. My mailbox. And I. So that's why I say sometimes it's not about the. Whether you did the. The task for the day. It's overall, are you touching the things you need to touch the people that you need to be present with? And should you make an adjustment to be present, Time is probably the.
- [39:50]
C
I mean, it is the only resource we can't make more of. And so we all have an operating system or something we do to manage our time. I think the thing that would probably surprise people the most is how often we say no.
- [40:03]
E
Yeah.
- [40:04]
C
I mean, there are opportunities like this or like anything else that could fill up five days every day that are all great opportunities, all great opportunities to spend time with employees, with customers, with potential partners all over the place. I say no so often to try to stick to the Rigor and the discipline of what is actually most important in the moment right now.
- [40:29]
G
I've added a technique more and more over the years, which is going to sound dumb simple. And I, I. And I had some former CEO mentor friends of mine pushing me on this that I really trust. Because when you, when you, I think when you first start, it's easy to confuse busyness and go into meetings with leadership. And it's not leadership, because you've got to focus on what you can do. So I put more and more of my calendar to blank time over the years I'm trying to. In 2026, you're gonna. You all are gonna think I'm crazy. Is to hold the afternoons of Wednesday to Friday completely open. And now you're traveling and doing things you can't. But what's it for? It's so that you can work on things you need to work on. You can think about what's important right now. You can call people you need to talk to, you can take care of.
- [41:20]
B
So.
- [41:20]
G
Because what we all find, I'm sure, is there's no time to quote work. And you confuse going to meetings with the work. The most important thing that is the work is what you're doing for the company that only you can do. And if you don't create time to do that, you're just grinding. And then you're grinding on the weekends and you're grinding at night, and next week starts. And next week starts. So I've put more and more quote blank time on my calendar over the years.
- [41:45]
A
I've been a columnist in the times for 22 years. I have never gone to a meeting. And so, wow.
- [41:54]
E
I admire you.
- [41:54]
A
My employers watch this, but if I open my phone, I see one event, one interview in the afternoon. I think, oh, this stays so crowded.
- [42:03]
Let me ask a couple questions related specific industries. Pete, you're in retail and malls have faced some challenges. Retail as a whole list face some challenges. So does it feel like you've been in headwinds for decades? How does it feel to be in an industry where so much is changing and so much is challenging?
- [42:22]
D
The answer is yes to the headwinds. But, you know, I think ultimately for all of us, I'm guessing it's all the same thing. You got to evolve what you do. I mean, you want the values and the practice or the values to stay consistent, but the practice has got to evolve. And that's been particularly true, I think, in our business. And we. That's been going on for a long time. So it's just part of how we do it. But, you know, we're coming up this next year, our company's going to be 125 years old, and that's a lot to be proud of and celebrate. But, you know, just being old doesn't mean you're good. And so what we're talking about is we don't want to be known as a heritage brand. We want to be known as a brand with heritage. And that means we got to spend a lot of energy on trying to be relevant.
- [43:06]
B
That's.
- [43:07]
A
How do you do that?
- [43:08]
D
Well. Well, I think it's staying close to what customers want. I mean, that's. That's the business.
- [43:14]
B
I.
- [43:14]
D
You know, I think if you getting back to spending time, if you're not really spending a majority of your time thinking about how it is, whatever it is that we do is impacting customers, and you're kind of missing the point.
- [43:27]
So I. I mean, I guess that sounds obvious, but, you know, if you're a merchant at heart, it really. It's really about being connected to the customer and how that all works and also kind of what happens at the point of sale with our people. And those are the most important people in our company. So while I'm not attached to that intimately all the time, I come from that place. I mean, I'm selling shoes when I'm 16 years old and all this and stuff. Those lessons never leave you. And I think as a company in our culture, we have a lot of appreciation for what that takes to nurture and enable that. Because, you know, ultimately, you need to talk about your people being successful. And there's a lot of value we all get from that. But we've got to set the table so they can be successful. And our practices and our tactics have to be relevant to how customers want to be served. And so I think it's just staying focused on that.
- [44:19]
A
I mean, I realize you're now an IP company, but you have been a toy manufacturer, and you still are a toy manufacturer, and your company's been doing it for a long time. Have children changed over those decades? Or is one generation of children pretty much the same as the last? Or do they change?
- [44:37]
B
The world continues to evolve in so many ways.
- [44:42]
But people are people, and play is play. And play begins in childhood, but doesn't end there. We know that physical play has been growing. Physical toys have been growing. And over the last 25 years, the industry has grown in 22 out of the last 25 years, even with the advent of screen time and technology. Parents will always prioritize.
- [45:09]
Investing in buying product, quality product for their children, and especially when it comes to trusted brands. And we know that we are a unicorn when it comes to the quality of our brands and the quality of our product. When a child goes to the store and they look to buy any, you know, a product, a toy, they don't say, mom, I would like to buy an 11 and a half inch on doll or a fashion doll or a diecast car. They say, I would like to buy Barbie, I'd like to buy Hot Wheels, I'd like to buy American Girl. Because these brands have an emotional connection, an emotional relationship with people who buy product. And you know, our biggest evolution as a company culturally was to realize that people who buy our product, and not just consumers, they are fans. They are fans that have a connection and emotional connections with our product and experiences. Many fans in the aggregate is an audience. So when we see speak to the world out there, we're talking to an audience of people. And that's a very different approach and conversation than speaking to individuals and trying to convince them to buy an item off a shelf. And that continues to define how we think about the journey. Toys clearly evolved. You know, the, the way you used to reach children, you know, 10 years ago even, is you put a spot, you buy an advertising spot on television and you reach your audience. Linear television between broadcast and cable is down between 90 and 95% in the last 10 years. And the world is much more fragmented. And with the proliferation of distribution platforms, competition for sure of mine is getting harder and harder and harder to reach the consumer. And I'm sure it's true for everyone here. It's just harder to aggregate consumers. So the fact that we have quality brands that attract fans and people are proactively looking to engage with what we do is a huge advantage. So we see an exciting opportunity to grow within toys. But given that we own the underlying portfolio of brands, we can play and participate across different categories that are all driven by big IP and big brands. And in the entertainment world, the game is all about big brands, big franchises that everybody knows that rise above the rest of the market and draw the audience. And this is what we bring to the table when we look to grow our business in film and television and location based entertainment, parks, consumer products, publishing, digital games, These are all industries that are driven by big brands that everybody knows. And that's the approach we're taking.
- [48:12]
A
It's interesting, it's like a recipe for longevity because like grim Fairy tales have been around for hundreds of years, and they still. That's a brand. Everybody knows. M and M's.
- [48:21]
B
Exactly. So these brands really matter. And like everyone around the table is trying to create brands and builders, that relationship that emanates from the brand and creates that connection, that emotional connection with your customers, with your fans.
- [48:36]
A
Okay, now this question is for whoever wants to take the hot potato, and it's what CEO pay? So I do not believe that if I don't know what your salaries are, I'm sure that must be public. I think. I do not believe that anybody around this table would work less hard if your salary was a million dollars less than it is right now. So why these numbers, like the numbers do, arouse a lot of popular hostility, angst, anger, gets Bernie Sanders a career. So why are the numbers as high as they are?
- [49:10]
F
Depends which part of the world you're looking at. Well, it's materially different in the US To Europe.
- [49:19]
I'm sure you're right that what motivates most people to do these jobs is not just the rewards, because.
- [49:29]
It'S just such a privilege to be able to have the impact that we can have through the work. The standard answer you will always get to that question is the pay is the board decision.
- [49:45]
And, you know, we are all in the talent business. And certainly when you come to hiring the best talent that you can possibly find.
- [49:57]
I think in my experience, pay is usually an important hygiene factor where people.
- [50:04]
Want to feel that they are fairly compensated, you know, relative to whatever their alternatives are. But what really motivates people is the environment they're in, whether the work is worthwhile and purposeful. And, you know, people leave companies because usually because they think they've got a better opportunity for personal development or because they particularly don't like their boss. So those are the main reasons that motivate people. And I think they're probably. That's probably true for a lot of people.
- [50:42]
A
CEO must be some. You're like, it's not just the board. I mean, the CEO, a you take the money would be. There must be a demand side to this question where people want the number.
- [50:52]
F
That's what I'm saying. I think people, in my experience, these things are often relative to whatever the alternatives are.
- [50:58]
G
Yeah, I think you, you know, the table got kind of quiet when you asked the question. But I, I think you. You can go to the easy answer, which is, it's a market, which is your talent comment. If you want to hire somebody, you have to pay the market. You know, as we've hired external senior resources recently and if you don't pay, you're not going to get them, they are going to go somewhere else. So you sort of start with that practicality. I think what's most important is that CEOs pays are aligned with the outcomes that reward customers, reward their employees and reward their shareholders. I think in my case I don't remember but I believe 92 plus percent of my pay is completely at risk and only shows up if our shareholders do well as an example. So and it often doesn't and it sometimes it does and sometimes it doesn't and that's exactly the way it should be. And so I think it's as important as the number is. What's really important is making sure that you're only paid if you do your job and your, your, your stakeholders are rewarded.
- [52:05]
A
Alex, you're a tech CEO. Does it feel different being a tech CEO than being a CEO? More Well, I don't know what the other kinds of CEOs there are but non tech like it seems tech CEOs are a lot more opinionated but that just be.
- [52:24]
Take from a small sample there.
- [52:26]
C
I have opinions but and I don't know what being CEO of a non tech company is like so you know, I'll tell you what I think is, is unique about being a tech CEO. I think is unique is just the pace of change and the pace of disruption in the industry that we're in. Every day I wake up and see startups that are new competitors, that are incredibly well funded, that are trying to compete with us. The technology changes every day. If I think about the last 12 months.
- [52:59]
Crypto and stablecoins went from something that was on the out to all of a sudden front and center agentic commerce. Being able to buy with an AI agent wasn't even a thought. We just went through Black Friday and had purchases online being done by agents through PayPal. And so just the pace of change, the pace of disruption, the pace of what we have to deal with from competition or new technology every day may be unique again.
- [53:32]
It certainly is exciting and a fun place to be in. On the opinionated side, I think there are a lot of opinionated tech CEOs that, that I think probably could keep some of their opinions to themselves as well. But you know, look, I think the competition is pretty, pretty strong. So I understand why being vocal sometimes helps.
- [53:55]
A
Told myself I wasn't going to ask an AI question because everybody asks AI questions but I just have one for you Emma, right now as we speak, are LLMs accelerating your research?
- [54:06]
F
Yes.
- [54:07]
A
Yes.
- [54:08]
F
Yeah, I didn't know. Do you want a longer answer but.
- [54:11]
A
Topic for at least.
- [54:13]
F
So look, I think it's probably fair to. And you know, I've been on the board of Microsoft for six years so I've had a bit of a ringside seat to what's going on in tech.
- [54:24]
And I am a deep believer that it's going to change everything in health care. There's a reason why healthcare is the number one use case. I think a third of the world's data is somehow related to it. There's enormous inequity and not just in the developing world, I think this country. We also know there's a lot about the system that's unsustainable and unfair and that's why some reform is necessary. But for our side.
- [54:53]
We believe deeply that the way you bend the demand curve on the cost of health care is by innovating more to find solutions.
- [55:02]
E
Earlier.
- [55:05]
F
With diagnostics as well. So we intervene earlier in a more tailor made way and keep people out of hospital. And it's incredibly hard. Takes a decade. Most of it doesn't work. But we know already that like every industry and every company, we're looking at all the cost saving uses of AI and gen AI and agentic AI and a lot of that is going to be off the the shelf. But the most exciting thing is when you turn a 10% success rate into a 20% success rate or you turn 10 years into eight years or five years and you know there are a lot of changes going on inside our companies, whether it's in biological target identification, molecule design, the way you segment patients because of all the genetics data as well to be able to be more precise in the kind of clinical trials that you design, but then also how you execute, execute them and then you track the data and then on the outside of the companies you're going to see regulators starting to change with real world evidence that will actually change the process of clinical trials so that we can shorten that and make it cheaper. And so I think the economics of healthcare are one of the great promises of this technology. And you know, it's incredibly exciting to see what's going to come in the decade ahead. Your question on you know, our changing, I think, you know, we talk a lot about the sovereignty of countries with technology. I think there is a question on the sovereignty, the sovereignty of companies and you know, cost saving is one thing, but it's when you augment the capability of the company to deliver more top line. And how much do we build these LLMs in house? And we're doing that in specific disease areas, which means we can then have, we have an agent that we call AI scientists. I'm sure we could run that better but you know, which is like having a PhD that's serving that can work 247 doesn't need any cultural training and can speed our time from hypothesis to being informal. Testing will reduce it by half by next year I think so there's an enormous amount going on but it will take some years to really change. What's exciting is to see these totally in silico design pharma companies coming through. And this is where the US has led the world. We need to watch what's happening in China very, very carefully.
- [57:28]
A
Well, let's go there. You all deal with China, I assume. And as just someone who watches the news, it seems they're ahead of us in one academic field after another and in one technology field after another. And you look what's happened say the German automaker and does it feel that way in your industries that we're being leapfrogged or does it feel different than that?
- [57:55]
E
You know, even in the food system they have a very significant playbook they are following and they have of course a lot of control to do it. 70% of the gene edited patents in the food system come from China. They are investing. I think it's five times what the United States is investing in terms of technology. And when I say technology, agriculture is big technology. We're a big partner with Microsoft, we have a small language model. Oz works with agronomists on the farm. So everybody's a tech company these days. China is not only investing heavily, but they also control, for instance say the mids, what we call the mids for our own food system. 70% or actually it's 90% of animal vitamins. I mean a lot of things come in from China. So are they leapfrogging us? They're certainly investing heavily in the food system. Food self sufficiency is their primary goal and they're investing accordingly, not only in their own, in their own country, but with relationships, especially with Brazil.
- [59:10]
A
And are they investing intelligently?
- [59:13]
E
Well, again, the patents, now we could argue whether the patents are viable or not. Yes, they are. They're getting closer I think really, you know, and there's of course a lot of news about soybeans and things like that. Soybeans are an area they don't have self sufficiency. On and that is used for feed for their hog population. And they have, as people move to the cities, they, their diet changes, they want more protein and you know, hog population is, is significant. In China they buy 60% of the world's beans so they're not self sufficient there. The, the balance of it. They're, they're moving pretty aggressively and they're consolidating at four farm level. So they can have a farm that has, you know, 100,000 animals on it and they have the technology that allows them to have the expertise taking care of those animals. So you know, it depends on how you're looking at it. If their goal is self sufficiency or developing partnerships and they're investing in technology, I'm telling you they are moving pretty quickly.
- [60:22]
A
Mr. Bob, is this your experience?
- [60:24]
G
You know, we're a primarily US based company that we're beginning to serve other parts of the world. So I probably have the least knowledge at the table. So we have direct industry impacts around aircraft that's being developed sometimes with US Technology. In China, I think that's probably years behind at this point. But I agree, I think they're putting a lot of money into this. They're hard, highly, highly organized. They don't think short term, they think long term. And if anything, I think that's probably the thing that is the biggest difference in focus is learning to think about five and 10 and 15 and 20 years from now as a horizon rather than six or nine months as a horizon because you'll just make different decisions. But I think everybody around the table is probably more knowledgeable on this than I am.
- [61:11]
B
We actually went the other way. China historically has been a place where between 80 to 85% of toys that, you know, being made, manufactured for the world. At the start of our transformation we said that this is simply too much concentration in any one country. It wasn't about China per se, but rather concentration in any one country. So we practically been diversifying our supply chain whereby China today represents approximately 35% of our global manufacturing industry average is still in the 80s. And we are in a much more diversified position where we make product in seven different countries such as including so Vietnam, India, the newcomers, but Indonesia, Malaysia, Thailand, Mexico. So just having a diversified footprint of your manufacturing. But the point, it wasn't about China and obviously well before any.
- [62:12]
You know, geopolitical issues were on the table, it was just about diversification and having a well balanced supply chain.
- [62:19]
A
Okay. Now When I was 21, my mentor was a guy named Milton Friedman. And he taught me that a country that involves politics too much in their firms is going to have rent seeking, political interference, inefficiency, that that style of capitalism is just not going to work. What does it say about our capitalism that their version seems to be doing okay? Or is it?
- [62:51]
D
You look at me like I have.
- [62:52]
C
An answer for that one.
- [62:53]
D
Well, I don't know.
- [62:54]
C
I don't really have an answer for that.
- [62:56]
D
I mean our, our exposure in China is a lot of what we sell comes from there. But we don't directly do business in China. But it, you know.
- [63:09]
Well, this isn't really answering your question but I mean, you know, our issue is we're just not agile, agile enough to be able to pivot if all of a sudden tariffs really high and something is impacted there in the supply chain.
- [63:23]
Yeah. So I mean when I think about how what happens in China against largely tied to things like tariffs and where we procure the brands that customers want to buy from us and having to create agility for ourselves so that we don't get exposed because we just can't move that fast. I mean it takes us a year or so to source things from different places.
- [63:45]
F
I lived in China and ran L' Oreal's consumer business there in the early 2000s. And I really agree with the comments that setting political models aside, there is an approach to long term industrial strategy which has served the extraordinary acceleration of their progress very, very well with a particular focus right from structurally from education being focused on STEM.
- [64:18]
And some, you know, many countries including mine, talk about having an industrial policy but it can move in our democratic systems to being pretty short term and even into the latest news cycles. And I think when you look at the pharma industry, you know, resilience is a common word we all use these days. And I'm very. We do not manufacture manufacture in China. We have a relatively small.
- [64:48]
Share of our revenue there, although there's still plenty of opportunity. But what we are doing more and more of is business development. So buying early stage assets that are being discovered and developed in China, then picking them up after all the appropriate due diligence and deploying them through our supply chain and then clinical trials in the West. And what is absolutely clear as China has gone from a very low single digit percentage share of first in class medicines for the world to overtaking Europe now.
- [65:22]
And the US is still leading the way. But China's deliberate ambition, and I'm not sure it's a zero sum game actually because we should all be trying to invest in innovation in health care. But China's deliberate position to deploy, deploy technology.
- [65:39]
Alongside the advances in biology to deliver great leaps forward is extremely deliberate and heavily invested. And that's also why we need to keep protecting and investing in innovation that comes out of this country, which has for many decades led the world.
- [65:55]
A
One last China question for Alex. When you go to Stanford or my alma mater Chicago, or Yale, so many of the science PhD students are Chinese nationals and they're obviously very smart and doing very well in your firm, do you experience Chinese nationals? Have you seen them begin to go back to China where they feel there's more opportunity? Has there been a talent issue you faced because of that?
- [66:18]
C
We haven't seen that. Folks moving back, we actually have a business in China. We actually enable small businesses in China to sell around the world. We've connected some of the largest wallets like WeChat in China to the rest of the PayPal and Venmo ecosystem. So we're enabling commerce back and forth and we employ Chinese nationalists to be able to run the Chinese business. But we haven't seen a lot of back and forth, at least not recently.
- [66:48]
But just to the previous comments in terms of stem, and you look at some of the LLMs and new AI models coming out of China, they're incredible. And, and it's something that I think we all just have to have to make sure we're paying attention to because the investment is high and, and at the end of the day, in a market, the, the best technology is going to win.
- [67:09]
A
Yeah. Now I want to talk a little about politics without being explicitly political because I know you guys are not too going to condemn Donald Trump the way I want you to, but we'll let that be. And it's about tariffs and I guess, Beth, I'll start with you. Your industry was very prominently affected.
- [67:29]
E
What are you talking about?
- [67:31]
A
I guess on Liberation Day, were you happy or sad? No, I really want to know what it was like to be you over and really all of you over this period when a tariff regime that we did not expect, or at least I did not expect 10 years ago is suddenly back and has it been extremely challenging, manageable?
- [67:51]
E
Well, the situation now, it really is about export markets for the food system. Okay. Yes, there is from an inbound perspective from crop protection items, chemicals. Yes, there has been an elevation increase in cost, but it's really about the rewiring of trade lanes and the implication for the American farmer, the American farmer, farmer. And the food system requires exports. It's critical 1 in 4 roads of corn, 1 in 3 roads of beans are exported. And without that, the profitability for the American farmer is challenged. And so what you have right now is a very significant.
- [68:34]
Weak system. Now, this is not just this year, and I try to be very clear about this. This has been going on for a while. Farmers have lost money, especially if you're a grain farmer the last three years. So this is not a new thing. And it's the strength of the dollar. It was the rise of Brazil. They can double crop. They're huge. They've got massive production. They've got different.
- [68:57]
Opportunities. We didn't have a real trade agenda in the previous administration, and we're paying for it right now a bit. But this is. Again, it's not one administration. This has been going on. I think what I would say is, is it challenging? Yes. Right now, farm bankruptcies are the highest since 2020. Farmers less than 5% will lose, will make money. Less than 5% will make money. Consolidation is occurring. There are more farmers over the age of 75 than there are under the age 32. And why is that? Land price continues to rise. And you can say, well, that's good news, because they could collateralize an operating loan. But the problem is that nobody can get into it. And you know who the buyers are? It's financial buyers. There was a farm, you know, being sold in Northern Iowa, for instance. One of my staff, it was near a family farm they had. And there were 400 bidders, and 399 were financial buyers. One was a local farmer. So what's happening? I said, well, we're. We're stepping towards contract farming. I mean, if we are not, you know, and that. And then there's the collapse of the rural communities around them because, you know, the, you know, the hardware store, you know, the school and everything is sustained by these. And these communities are sustained by the work that's going on on the farm. So is this a challenging time? This is a dramatically difficult time. It is incredibly emotional right now. We are in the heart of it. And the reason I say this is because they're going to the banks now to get their operating loans for next planting season. So this December, January, February timeframe is important now. There is a real gratefulness by the farmers that there is a discussion of trade and there's hope. There's announced trade deal with China. We're waiting to understand a little bit more. We're starting to see some things move. Certainly the market markets reacted favorably.
- [70:57]
But, you know, what is the Durability of that agreement? Don't know yet. We have to get more information in more detail. But it's painful, it's emotional. And you have to realize these are folks, they may be sixth or seventh generation farmers on that same farm and they feel such responsibility for their family's legacy, their ability to hand it over to their children. And so it's not just, well, boy, their way of their livelihood, it's their way of life. This is what they have done their entire lives. And so it is powerfully difficult.
- [71:33]
A
Anybody else around the table facing similar challenges or lesser, but also serious challenges?
- [71:39]
G
You know, I think the thing, it's not probably an exact answer, but the biggest issue, at least I feel a lot of times is that the politics come and go. Administrations come and go. And because priorities flip back and forth every four or so years, sometimes more often, the country, you can't get unified focus on the things that really matter. Because a lot of things take longer than that cycle to work on and invest in, especially if it's private investment. You're not going to invest in something that's a 15 year project if you don't know if the politics are going to switch in three years, four years from now. So we focus on the things that are really important to the industry. For us, it's modernizing the skies and air traffic control because a lot of what is in the system today is four decades old, five decades old technology, and it takes years to fix that. And so you've just got to stay focused and sort of rise above the politics and unify on the investments are important and live administration to administration because it's going to change on you.
- [72:43]
A
For those of you who have. Some of you or people on the table are in extremely regulated industries and some are in moderately regulated industries. Have you found this administration, you can deal with them like there's somebody to call and talk to and get an answer. Have you found that to be generally the case?
- [73:00]
F
I mean, there's definitely engagement.
- [73:02]
E
Yeah, the administration wants to focus on deregulation. Things that are enabled, they want to enable businesses. I think that that is absolutely true. And an agenda.
- [73:16]
G
Yeah, there's absolute access and yeah, you can, you can talk to folks.
- [73:19]
A
Okay.
- [73:20]
C
Yes.
- [73:21]
A
Okay. Well, that's good news. Now this country is changing demographically and economically. Pete, I'll throw this to you. Has the client base change for how you think about what you're going to sell and at what price point you're going to sell it? And do you, how do you think about the evolution of our population and, and who you guys are.
- [73:44]
D
Well, I would say if you just looked over the last several years, our average unit retail has gone up and that's really been chasing demand. So I would have to say, at least where we operate in the market, customers were more affluent and, you know, they're willing to spend money on really nice things. You know, we've got a pretty broad assortment, but, you know, we're not a position where we're trying to serve, you know, 80% of America. That's just not really where we are. So I would say again, for most of the business that we do.
- [74:16]
Customers are willing to spend, but that gets tested. I mean, you know, you're seeing it right now. I mean, like in the luxury business, there's been a lot of stuff discussion about they've raised prices like crazy. And I think you've seen how that negatively impacted the business. And then just you talk about tariffs, which kind of hits everywhere. And if you're in a business like ours, you know, we're not a large margin business. We can't absorb that stuff. Those costs get passed along to customers. That's just a fact.
- [74:42]
And price is a hugely important consideration for anything that people are buying, even, you know, when we're operating and with more affluent customers. So, you know, that stuff's a bit out of our control and we try not to get involved with the politics. But what we do try to, we try to let it be known how it's going to impact us and try to give an unfiltered view like we're not taking a position on this, but this is the consequence of that decision, how it's going to impact our business.
- [75:12]
A
I bought an overcoat from Nordstrom's over the weekend and after.
- [75:16]
D
Was it expensive?
- [75:18]
A
No.
- [75:20]
I came back after the 30% Black Friday discount. It was like 279. I'm like, I called my wife. I sort of wanted to spend more.
- [75:28]
D
We're here to help. We can do that.
- [75:29]
A
So I want to thank you guys for the 70 minutes we've shared. It's been a pleasure. And one thing I was confident in, the one bit of social psychology I know is that CEOs are almost all extroverts. And so I want to thank you for being. Thank you.
- [75:44]
B
Thank you.
- [75:44]
A
I appreciate it. Thank you, thank you.
- [75:46]
F
Thank you.
- [75:52]
B
Dealbook summit is a production of the new york times.
- [75:55]
D
This episode was produced by evan roberts.
- [75:58]
B
Mixing by kelly pieklo and katie mcmurran. Original music by daniel powell. The rest of the dealbook events team includes julie zahn, hillary coon, melissa tripoli, beth weinstein, angela austin, haley hess, dana prukowski, matt kaiser, chantal rainier and yen wei liu. Special thanks to sam dolnick, nina lassom, christina josa and maddie masiello.