Business leaders talked with Andrew Ross Sorkin at the DealBook conference, “Playing for the Long Term.” Excerpts have been edited and condensed.
I’d say this last week 100 million people came through Starbucks stores around the world, and our customers are a diverse base of people from all walks of life and all political persuasions. But yet we are living in a world right now where every day, almost, some episodic event is affecting the way we live, the way we think, levels of anxiety, lack of trust, lack of confidence, polarization, dysfunction. How could we ignore what is going on? We have 350,000 people working for Starbucks — they expect Starbucks as a company to have a point of view about what we stand for, what our core purpose is and what our reason for being is.
And our reason for being is not just to make money. I will go a step further and say the last few years — as we have engaged in these subjects with respect and civility and have not really taken a political position, just tried to elevate the national discourse — our business has not been affected negatively on any level, even after we attempted to raise the level of national discourse on race, which I think we should talk about.
But if you talk about tax reform, which is in the news every minute of every day, this is not tax reform. This is a tax cut. This is fool’s gold. [President Trump] wants to take the corporate tax rate from 35 to 20 percent for what purpose? Is that profit going to go back to the people who need it the most? Is that going to help small businesses? Is that going to help half the country that doesn’t have $400 in their bank account for a crisis?
No. So once again, where we are thinking as a company: What is our role and responsibility in raising the national conversation about things that we think are important? There’s a lack of truth, there’s a lack of authenticity and as a result of that we are trying to elevate a conversation that’s just based on the fact that we want to be authentic.
When it comes to making progress in corporate diversity, companies don’t seem to be attacking the issue aggressively. What we hear is, “We’re working on it.”
Now look, I married Yoda’s dad. My husband is George Lucas. And as many people know, in “The Empire Strikes Back,” Yoda famously said, “Do or do not, there is no try.” Trying is not the same thing as doing. This is not a pipeline problem. This is a blind-to-possibility problem.
I always tell people there are 300 million Americans. I guarantee there is someone out there capable of tackling or being trained to fill basically every job. And I’ve heard all the excuses.
Not long ago, someone actually said to me, “Black people don’t want to move to Phoenix.” Now, the last time I checked, black people and all people welcome the opportunity to work with smart people for good pay. Trust me, Phoenix is not a deal-breaker.
It’s also been shown that employers expect more of minority candidates. We aren’t allowed to just be good, we must be exceptional.
So we had an employee who on this person’s last day took it upon themselves to deactivate [President Trump’s Twitter account]. And there are a number of things that came out of this for us: First, that should never be possible. So we started looking into the controls that we have in place and what we could improve, and where we have weaknesses, and where we have gaps. Second, just the — you know, particular policies around what agents have control over and what they don’t.
Where we haven’t been great is showing the interpretations of our policies as it pertains to enforcement. And we work really hard to make sure that we are listening to voices, and specifically the journalists on our platform, to determine newsworthiness, and to determine what is public interest and what’s not public interest. In some cases, we’re going to get it wrong. But as our peers have said, like, this is something that is evolving, this is something that’s moving very, very fast. I wouldn’t give us a high grade at the moment, but we do have the intention internally in the company to fix that.
On starting a new company: Square is something I built from Day 1, and I know every single detail of that system.
My goal is to make sure that we are building something that outlives me, and that endures, and that continues to serve generations beyond me. And that means I need to build structures that aren’t dependent entirely upon me. That means I need to recognize leaders who can succeed me. That means we need to get our decision-making rigor and process and understanding into the very DNA of our companies.
I said I’m considering running for president. I think that given the circumstances there’s a unique opportunity for somebody like me who’s independent, who’s not affiliated with a party in any way. I haven’t given money to a politician since 2002 and I think that people are looking for an independent voice, a real independent voice, that at least has an inkling of what they’re talking about.
People are tired of politicians and the things that politicians do, and whether it’s me, Bob Iger, Howard Schultz, somebody else, I think there’s a door that’s wide open and I think somebody who doesn’t have a deep affiliation with either party or with politicians has an even greater opportunity.
I met with 15, no, it ended up being eight, Democratic senators yesterday in D.C. to talk about health care, so I try to get a better understanding. To me, you can’t absorb enough knowledge and you can’t connect with people enough, and so I don’t want to just limit myself to one silo. I don’t want to be in a bubble.
The reason why I’m considering — haven’t committed — is because I’ve got three kids. What caring, loving parent would put an 8-, 11- and 14-year-old child through this?
There’s a lot of ways to have an impact and the more in tune I am, the more connected, the more educated I am about a variety of topics. the easier it is for me to decide.
I was a federal prosecutor for more than a decade and was looking to leave the government, but I still wanted to be doing something that I thought was socially impactful. So I went into Facebook through a legal job and hadn’t been there too long when the company approached me about taking over the policy world. Basically what this means is setting the rules for what people can share on Facebook. So, what can you post, what can you advertise?
And over time, this has grown into a community where now we have people in countries all over the world, more than 85 percent of the people that are using Facebook are outside the United States. So it’s this really global community where when we’re setting these policies for what people can share we have to be thinking about what does it look like in, you know, in Turkey? What does it look like in Australia? And craft our rules accordingly.
We’re not at the point where we say we’ve got it all figured out and here’s how speech should be on social media. We’re sort of learning as the community grows, how people talk about social and political issues right now. What we do is we say we allow people to come to Facebook to discuss what’s important to them, that’s why we exist.
We publish a report every six months where we say, here are the countries that have asked us to remove speech, and here’s where we’ve done it by law. It’s tricky because when you do that you are breaking this borderless service, and part of what makes Facebook so special is that you can communicate so freely all over the world. So, any time we do that we are breaking that borderless nature.
On the passenger forcibly removed from a plane: The event as it unfolded should have never happened, and that is on me and us. And I think we’ve talked about that a lot. As we’ve dissected all the events, all the circumstances, I think one of the key learnings that I project out to folks — because we all at some point in time could be affected by this — is that you have more time to respond than you think.
The initial response that I gave under my name was wrong. Period. I own that, and it was one of those moments where you felt compelled to respond quickly as it was escalating on social media. It was a combination, as it always tends to be, a mixture of folks in your ear telling you what to say.
It was not what I felt, certainly, and I should have gone with my gut instinct. And at the end of the day when you sit in the offices that we sit in, there’s no one behind you. And so what I felt, what I saw, I should have said so and moved forward from that perspective. That was probably the biggest learning in that regard. There was only one United employee effectively involved in the whole process. It was not their fault. We let the policies and procedures of a mega-operating safety-oriented organization get in the way of simple human values. No one should be treated like that.
From my point of view I’ve just been doing the work for 20 years, and a lot of the issues that we’ve been working on are issues of our day. And they’re getting much more prominent. And the work that we’ve been doing is starting to accumulate. But, you know, being on the inside it seems like I just keep doing the same thing I’ve been doing.
So the media portfolio came through because we built out a muscle. Because we’re in the social change sector, and when you’re in that sector you have to also look at behavior, and identity, and the cultural narrative. And so that’s why we started doing our own comm stuff, and then we started looking at media, and we realized that if you’re not part of the cultural conversation you could work your entire life trying to, in a Sisyphean way, move things forward and be crushed if you don’t connect with people at the heart-and-mind level.
We also believe in the importance of free and unfettered press and media, and its role in our democracy. And we know the business model is weakened, and we also feel that that kind of shoring up and that kind of belief, and the kind of patient capital that we can bring to media companies, is essential for the health and well-being of our democracy. So it’s also as Americans we think it’s really important.
I think there’s a trend going on which says clothes are just not that important or as important as they were. And if you go through the audience — and I always do this at the office when I went to the office every day — is how old is what you’re wearing, and what’s the latest trend in the world, and what’s this, that and the other thing?
I used to call shopping centers the local villages, but you don’t have to go to the village to see other people if you’re on your device because that’s the new way of meeting and seeing and having relationships.
I think the fact that if I’m a customer and I’m used to seeing 30 percent off today, 40 off tomorrow, Black Friday is coming and they’ll be giving away inventory — I think the fact of the matter is that people get used to not spending full price, and the fact is that you don’t have to. It’s changed everything fast.
I think it’s O.K. to buy clothes, wear them for a night. Someone said to me yesterday that, well, I’m renting clothes by the month, and why should I even buy clothes anymore? So I think clothes don’t play the same role in one’s life as they used to.
I mean, you have to sometimes face the reality that something is not gonna grow and it might be going like this, and maybe that’s the state of the retail business.
On Broadcom’s hostile bid for Qualcomm: You can see there have been transitions in this industry over the last 50 years where we’re, you know, there was a step function in the cost of doing that and there was consolidation that occurred. I think this is just another example of scale. As important, you’ve got to have it and there’s consolidations.
On the implication for Intel if the deal goes through: I think we face our constant kind of industry where the competitors are getting constantly bigger and stronger and, you know, because of that consolidation I don’t think it really changes our strategy. If you take a look at what they’re doing and where they’d play, it’s mostly not in the same places. We’re more the higher-end high computers, you know, large data center PCs. They tend not to be in those, so it’s not going to change our strategy.
On resigning from President Trump’s Manufacturing Council: I think it’s never any one thing — you never just walk out and go, ‘Oh it’s this.’ You know this thing that triggered it, it’s kind of a buildup. The first was, I joined it to really be to, I believe it’s an imperative for the U.S. to keep bringing manufacturing back — that R&D and manufacturing are often tied together, and if we lose manufacturing I would think we risk losing R&D next, and so I think it’s an imperative. As we went through that week, Charlottesville happened first, and it made you start to think, “O.K., what’s happening to this?”
And then what really triggered it for me was Ken [Frazier of Merck] left the council, and when Ken left, when I saw him leave and it became very politicized, and I said, that’s not what I want to be a part of. This is not now something that’s really focused on just manufacturing, it’s becoming more political.
To me it comes down to the product and the brand and, frankly, the product and the brand that Travis [Kalanick] and his founding team have built is extraordinary and talented. The company’s extraordinary, and the culture went wrong and the governance of the company went wrong, and the board went in a very bad direction. But if the product is good, then if you can bring in good leadership and you can ultimately bring it together — and I think we’re on our way. It’s going to take a lot of work. But after two months I feel better about where we are than, frankly, I was going in.
It’s a good relationship but it also comes with balance and that’s what I told Travis very early on, is that any new C.E.O. needs space and needs that from the old C.E.O. And so I told him very early on, “Travis, I’m actually gonna be pushing you away early on because I need my space.” I need to be able to meet with a team. I need to be able to communicate with them so that they’re just communicating with me and they don’t have someone to go around if they don’t like something that they’ve heard, etc. So you’ve got to let me engage with the team, engage with a company, engage with the culture.
And I was a little worried about that conversation. But, actually, he took it really well and he’s been very respectful, and at the same time he’s been available to me whenever I’ve needed him.
On the proposed AT&T-Time Warner merger and CNN: I have never offered to sell CNN. You think about what we’re trying to accomplish here and one of the key benefits of putting these two companies together is to stand up a new advertising capability. We have built an amazing distribution platform — 150 million mobile subscribers — the largest pay TV base in the United States, a huge broadband base. There’s a lot of information and data that we think can be used to stand up and do advertising business.
Pairing that with the Turner advertising inventory is a really powerful thing. We believe that is what we aspire to do. Selling CNN makes no sense in that context if that’s the business you’re trying to build. So to suggest that I would be interested in selling CNN just doesn’t make sense.
I will state again, I’m not selling CNN and AT&T is not selling CNN.
I personally think that where we are right now in the world of advertising and media is that there are a couple of players who have built incredibly strong positions and impressive positions in advertising and they are technology companies and I believe that if we are going to compete — if somebody is going to compete — with them the best opportunity we have is somebody like AT&T.
We have a very strong global economy. I must say, though, prices are more extreme now. So much of corporate profitability is validating the stock market valuations. But we have risen three-plus multiple points, so, you know, we’re not extreme prices but we’re certainly not cheap.
President Trump has given more confidence in some business through some deregulation that allows — you’re seeing more spending by some companies. And so I would say there are many parts of the world that have created this atmosphere, and I would say the United States is partly contributing to this.
But let’s be clear — the market dynamics are good. We’re being tested as management teams and boards making sure we’re doing the right thing. I do believe we have lost focus and there is too much short-termism, but I think it’s going to be hard. As Ken Chenault suggested, long term is only two years, and I think that’s the equal system we’re all working in. And I would say long term for Washington is about six weeks. So we’re living in a world where everything has been truncated to smaller components of time.
I think over all the consumer is in pretty good shape. I think as we all understand we’re not talking about a robust economy. But what is interesting, if you look around the world, the economy has been relatively stable in a range of markets.
I don’t think that’s happened for quite a while, and if you’d asked me a year ago how would you feel, I would have told you I’ve got concerns in this region and in this region. And we’re at a point in time where, in fact, things are holding up pretty well.
That said, what you’re seeing is a demarcation in performance because there are some companies — in fact, many companies — that have not been able to take advantage of the stability, and, in fact, were banking on seeing an improvement in the economy. And so the consumer is there, certainly spending, we’re certainly seeing that on our cards. They certainly want experiences. They like to travel and we’re seeing from a millennial perspective a strong interest both in our products and services but also experiences in travel. I’m not going to predict what the holiday season is going to be, but what I would say is we’ve been very encouraged about the spending.