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Good morning.
I spent an hour yesterday listening to a baker’s dozen of CEOs talk about how their company’s purpose has helped guide them through crisis. Three months ago, I had wondered whether the economic downturn would force business leaders to focus all their attention on the bottom line, and abandon broader goals. But this group, assembled by Fortune and McKinsey, insisted the crisis has done the opposite. They may not represent every CEO, or even the majority. But their passion is an indication that something different is afoot in business leadership. Some excerpts:
“I think the number one constituency that I serve is my employees, because I think the only sustainable advantage that a company has is the talent and passion of their employees. If you put employees first—and employees come to companies that have an inspiring mission and values—then you will serve customers better, and, ultimately, shareholders.”
—Dan Schulman, CEO, PayPal
“For Best Buy, this journey started by saying out loud: ‘The purpose of this company is not to make money.’ It is imperative to make money, but it is not the purpose. Our purpose is to enrich lives through technology.”
—Corie Barry, CEO, Best Buy
“When the s— hits the fan—whether it is COVID or social injustice—we look to our purpose to figure out what to do. Our purpose is to create world changing technologies that enrich the lives of every person on earth. That simple line helped us define fairly quickly what to do.”
—Bob Swan, CEO, Intel
“Like everybody else, we focused on our employees number one. The combination of pandemic and social injustice… 4people are desperate for information and support.”
—Margaret Keane, CEO, Synchrony
“The crisis brings out the best in a people-driven organization. We believe the social contract at work is a source of resilience. We don’t give this up in a time of crisis. It actually makes us stronger.”
—John Driscoll, CEO, CareCentrix
“Where employees… have a sense of purpose, they are four times more engaged, which means more productivity, which means less attrition, which means they are bringing to work creativity, thinking out of the box.”
—Bruce Simpson, McKinsey
“I think we have a unique opportunity, in part driven by the lack of leadership in our government, for companies to make a huge difference. It has become very common for people to say COVID is accelerating trends already in place. The trend of companies driving real societal change is absolutely huge. It’s literally like a snowball going downhill, picking up momentum.”
—Roger Crandall, CEO, MassMutual
More news below. And take a look at Shawn Tully’s piece on what basic math says about what shareholders can expect from Apple in the years ahead.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Hong Kong arrests
Just as Hong Kong marks 23 years since the end of British rule, police made their first arrests under the brand new security law imposed by Beijing. Two people have been detained, including one who was holding a pro-independence flag. BBC
A great quarter
Did you love Q2? No? Well, the stock markets did. Tuesday capped the best quarter for Wall Street since 1998, bouncing back from a rough first quarter in a turnaround of the likes last seen in the 1930s. That whiplash came as investors looked beyond enormous unemployment figures and pinned hopes to a turbo-charged recovery as lockdowns eased. Hmm. Fortune
'Wrong direction'
Dr. Anthony Fauci told senators Tuesday that the U.S. is "going in the wrong direction," with easing lockdowns in some regions putting the whole country at risk. With the country already reporting 40,000 cases a day, he said he would not be surprised if case levels reach 100,000 if there's no change. "I am very concerned," he added. AP
PizzaHut operator bankruptcy
NPC International, the largest franchisee of Wendy's and Pizza Hut, filed for bankruptcy, under pressure from COVID-19 lockdowns which have decimated the restaurant sector. The company has struggled to move towards delivery and away from traditional dine-in, as labor and food costs have risen. Bloomberg
AROUND THE WATER COOLER
Wirecard's shareholder revolt
When Wirecard went bust, they brought the fortunes of retail investors—like 37-year-old Fabian Schmidt—down with them. Now, Fortune's Bernhard Warner writes that an epic shareholder revolt is brewing, as Schmidt and others look for answers and push for changes in how regulators oversee listed companies on their watch. Fortune
Simple Math
Fortune's Shawn Tully takes up the challenge of Apple, and finds that the stock has become so expensive that investors will be lucky to make plodding, mid-single-digit returns. "Apple was so appealing a few years ago because it was a slow-growth stalwart that was dirt cheap," he writes. "It’s still a slow-growth stalwart, but now it’s premium priced." Fortune
The Brexit cliff
A letter signed by more than 100 company chiefs, executives and business associations said it would be hugely damaging to the U.K.'s already struggling economy if the country leaves the EU without a trade deal by the end of next year. The U.K. is currently in a transition period of its multi-year exit from the EU. The letter told Prime Minister Boris Johnson that businesses simply don't have the time or capacity to prepare for big changes in trading rules, especially given COVID-19. FT
Adidas HR chief resigns
Karen Parkin told staff in a memo she will leave her position in order to "pave the way for change," but Black employees at the company say she has failed to address issues of discrimination and lack of representation within the company. Parkin once called racism "noise" that is only discussed in the U.S., but later said she regretted her word choice. WSJ
This edition of CEO Daily was edited by Katherine Dunn.
