Business

Spiritual growth is an odd mandate for business schools preparing graduates to make manna in a secular world. One such institution, hec Paris, has nevertheless decided to send students on a trek through the French countryside to a remote village, where a Benedictine monk (a former lawyer) guides them through ethical dilemmas. Whether or not the three-day seminar represents a shift away from the profit-driven logic of business and towards a kinder, gentler form of capitalism is up for debate. But it shows that expectations for what makes a great mba programme—and, by extension, a great executive—are in flux.mba courses (our ranking of which you can find at economist.com/whichmba) used to focus on number-crunching and business strategy. Executives must still master these skills. Yet the corporate world has changed since the mba first became a rite of passage for high-powered executives. Management teams answer to a growing number of “stakeholders”, from employees to social activists, and face public scrutiny on their companies’ environmental, social and governance (esg) record. Simply creating shareholder value no longer cuts the mustard.One consequence of this trend is that running a modern business requires an ever-expanding list of credentials and competences. In addition to financial and digital literacy, strategic acumen and communication skills, executives are expected to be clued in on supply chains, climate science and much else besides. They must ensure that their workforces are diverse and inclusive. And as work life goes hybrid, mixing time in the office with home working, they are also asked to spend more time checking in on subordinates. Some of these new duties are delegated to new corporate roles. Prince Harry is the “chief impact officer” of a Silicon Valley firm. Clifford Chance, a law firm, has appointed a global “wellbeing and employee experience” chief. Nearly 5,000 people on LinkedIn, a social network, describe themselves as “chief happiness officers”. Still, most high-ranking managers will almost certainly need to perform each of these novel tasks to a greater or lesser extent. Since a day has 24 hours—and even hard-charging executives need sleep—their workload is changing. Devoting more time to employees and other stakeholders leaves corporate leaders less for other things, including mission-critical ones like coming up with a strategy for their firm. Since 2006 Michael Porter and Nitin Nohria of Harvard Business School have tracked what ceos do all day. They find that bosses spend 25% of their working lives on fostering relationships with insiders and outsiders, more than they devote to strategy (21%), corporate culture (16%), routine tasks (11%) and dealmaking (4%).Although Messrs Porter and Nohria do not yet have the relevant data, anecdotal evidence suggests that hybrid work may be skewing executives’ workday even more towards people management. Human-resources chiefs report that managers spend more time hand-holding staff, for example. Bosses were hybrid workers before covid-19. The pre-pandemic ceo spent around half their time in the office and the rest in external meetings, travelling or otherwise working remotely. More than a third of their communications was via video chat, email or the phone. The difference now is that everyone else spends just as little time in the office—if not less. This further reduces opportunities for face-to-face contact, which makes building relationships with employees more difficult, and almost certainly more time-consuming. As the 21st-century executive’s workload is changing, so too are mba curriculums. Many institutions are busily incorporating new, cuddlier modules. Harvard Business School now has one entitled “Reimagining capitalism”. insead, a French organisation, teaches students about “Business and society”. Plenty of mba programmes offer courses on interpersonal skills. Some are tailoring classes for the Zoom age, for example pointing out the common traps of virtual negotiations. That necessarily leaves less time for other, more traditional instruction. A few schools are even fundamentally rethinking their recruitment policies to reflect the evolving character of modern management. That may involve conducting group interviews to assess candidates’ soft skills rather than their intellect alone, or screening candidates for emotional traits such as empathy, motivation and resilience through questionnaires, letters or essays. Changes to whom business schools recruit, as well as to what they teach, may in turn affect who applies. Given that a business-school degree is designed in part to send a powerful signal of executive competence, that may determine what type of person rises up the corporate pecking order. It might not be your parents’ mba. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Spiritual growth is an odd mandate for business schools preparing graduates to make manna in a secular world. One such institution, hec Paris, has nevertheless decided to send students on a trek through the French countryside to a remote village, where a Benedictine monk (a former lawyer) guides them through ethical dilemmas. Whether or not the three-day seminar represents a shift away from the profit-driven logic of business and towards a kinder, gentler form of capitalism is up for debate. But it shows that expectations for what makes a great mba programme—and, by extension, a great executive—are in flux.Listen to this story. Enjoy more audio and podcasts on More

As every wartime quartermaster knows, it is only when things go really wrong that you get noticed—or shot. The same is true in the logistics business. That is why it made news recently that Dave Clark, Amazon’s former logistician-in-chief, left the Seattle-based online giant to become ceo of Flexport, a shipping-software company. His departure comes just as Amazon is deluged with overcapacity in its vast warehousing and distribution business, which he captained during most of his 23 years at the firm. Some wondered whether he had faced the firing squad. In fact Mr Clark’s move looks to have been a voluntary one—with a hint of masochism. After doing a job that would have finished off most people, namely blitzkrieging through the retail landscape to bombard the world with Amazon packages, he now wants to prop up firms battling to get to grips with global supply chains. In doing so, Mr Clark leaves behind him a severe headache for Andy Jassy, Amazon’s boss. The titan of e-commerce is not just overbuilt and overstaffed. For the first time in its 28-year history it is in the midst of an inflationary whirlwind, which is playing havoc with its ability to predict the future. The situation is bad enough in Amazon’s American heartland. It is worse in its operations elsewhere. That makes it harder to fix.When looking at Amazon, most attention is paid to its North American retail business—mainly the United States, but also Canada and Mexico. It accounts for the vast bulk of sales, almost 60% in the first quarter. The hinterland, which is to say its international business, includes dozens of countries, from Japan to India, parts of western Europe and elsewhere, that punch well below their weight. Strange as it sounds to non-Americans tied to the tyranny of the doorbell, collectively they contribute just 25% of Amazon’s overall sales. Amazon Web Services, the fast-growing cloud business, makes up the rest. Unsurprisingly, then, Amazon’s frenetic logistics drive in the past two years began at home. Since the early days of the covid-19 pandemic, the firm realised that lockdowns would fuel demand for online shopping. It threw caution to the wind and went on a domestic warehouse-building and hiring binge. In two years, as Marc Wulfraat of mwpvl, a logistics consultancy, puts it, Amazon created as much fulfilment square footage as Walmart, America’s ubiquitous supermarket giant, has built in half a century. Its logistics business, started only in 2014, has leapfrogged FedEx and is catching up with ups. Amazon’s total workforce almost doubled after 2019, to 1.6m. The feat was a Herculean one—with Hydra-headed consequences when inflation and covid-19’s contagious Omicron variant hit. In round numbers, overbuilding, overstaffing and inflation each added $2bn to Amazon’s costs in the first quarter, year on year, driving it into the red. The next epic task is to squeeze those costs out. This is where the rest of the world becomes a big problem. For cost control may prove harder abroad than at home. Although Amazon says it will keep building American fulfilment centres, it plans to sublease some of the space until demand recovers. It also hopes to reduce staffing through attrition and allow third-party sellers to use some of the spare capacity. It assumes that domestic retail growth will pick up later this year. Prologis, the world’s largest warehouse operator (and a big supplier to Amazon), showed similar faith in the future on June 13th when it agreed to buy Duke Realty, an American rival, for $26bn.Look outside the United States and such optimism becomes harder to sustain. Amazon’s international business is, as in America, awash with overcapacity. But whereas North American sales grew by 8% year on year in the first quarter, in the rest of the world they shrank by 6%. Worse, in some big foreign markets, such as Britain and Germany, conditions may be deteriorating. Mark Shmulik of Bernstein, a broker, notes that overall e-commerce penetration is shrinking in Britain and mainland Europe for the first time in years. Consumer confidence is plummeting. Europe’s woes may be exacerbated by its proximity to the war in Ukraine. They may also be a harbinger of trouble in America.Some of the deep-seated problems in these non-American markets were easy to make light of when business was booming, but loom larger now. The biggest is profitability. Amazon’s international operations are almost perennially loss-making, mainly because of the huge amounts of cash it is ploughing into expansion; the losses were particularly severe in the first three months of this year. Another is spending power. Mr Wulfraat calculates that Amazon sells $881-worth of stuff and services a year for every American. No other country comes close; the figure is $436 in Britain, $97 in Italy and $13 in Mexico. Third, in the poorer regions where the company operates, such as India and Latin America, the infrastructure is shoddy and local competition intense. That makes it look like it is throwing good money after bad. Amazon says it intends to continue its international expansion. It believes the slowdown in e-commerce penetration in Europe is partly a reaction to excessive dependence on online shopping during lockdowns. And whatever happens to the world economy, Amazon is confident that the structural shift from offline to online commerce is real and permanent. Cutting down the Amazon When Jeff Bezos was running the company he founded, few would have second-guessed such assumptions. But this is new leadership in turbulent times. Mr Jassy, who took the helm less than a year ago, is still on probation. If Amazon’s forecasts are correct, pretty soon the successor to Mr Clark will be building yet more warehouses and Amazon will be back to the races. If they are wrong, the newish ceo may have little choice but to consider reducing Amazon’s exposure to some of the more peripheral parts of its hinterland. Would he have the guts? ■Read more from Schumpeter, our columnist on global business:What’s gone wrong with the Committee to Save the Planet? (Jun 9th)Why Proxy advisers are losing their power (Jun 2nd)BASF’s plan to wean itself off cheap Russian gas comes with pitfalls (May 28th)For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Few things are more depressing than estimates of how much time people spend on a specific activity over the course of their lives. You know the sort of thing: you will spend one-third of your life asleep, almost a decade looking at your phone and four months deciding what to watch on streaming services. A new study, by academics from the Maryland and Delaware Enterprise University Partnership (madeup), applies this approach to the workplace. By conducting a time-use survey of 5,000 office workers in America and Britain, the researchers identify the number of minutes that people waste on pointless activities each working day. (Meetings are excluded: they often turn out to be useless but not always and not for everyone.) The authors then extrapolate these figures to come up with a “weighted total futility” (wtf) lifetime estimate of time that could have been better spent. The results are literally unbelievable.Correcting typos takes up an average of 20 minutes in every white-collar worker’s day, the equivalent of 180 days, or half a year, over a 45-year career. Some words are mistyped so frequently that on their own they can waste days of the average employee’s existence. “Thnaks” is the worst offender in the English-speaking world, followed by “teh”, “yuo” and “remeber”. The amount of time the average worker spends writing “Bets wishes” is also counted in days.The gestation period of a goat is around 145 days. Which is also how long the average worker spends logging into things during his or her working life. Security concerns mean that some time is bound to be absorbed in this way. But months are wasted trying to remember passwords, entering them wrongly or updating them. Just as much time is spent waiting for something to happen, a great economy-wide period of vacant staring at a screen. If getting into things wastes lots of time, so does closing them down. Eliminating help windows and tool-tip boxes takes up days over a career. Rejecting repeated requests to schedule updates to your operating system is another chunk of existence that you will never get back. Zapping pop-up ads and trying to pause auto-playing video absorbs time that could have been spent learning to knit or visiting Machu Picchu.A bundle of “tidying up” activities absorbs over four months of the average worker’s life. Deleting emails takes up about six weeks of your life. Clicking on Slack channels to read through messages that are not meant for you, or clearing notifications on your phone screen for articles that you will never look at: tasks like these each eat up several days. Various types of formatting tasks constitute another huge time-suck. Think of those attempts to change the margins on Word or Google documents, or the hours spent trying to work out where exactly you need to put the missing bracket in that broken spreadsheet formula. Shakespeare wrote “King Lear” in the time an average office worker spends changing font sizes during their career. Redoing work that you have failed to save is in a category all of its own, because of the psychological trauma involved. This problem has been mitigated now that revisions are saved automatically on many programs, but it has not been solved. Batteries still run out at crucial moments, internet connections still fail. Making a series of deeply insightful comments in a Google doc, failing to save them and then closing everything down causes a special kind of despair. So does creating an org chart with hundreds of arrows and text boxes, and realising you missed someone out.These are only some of the many ways in which time is routinely wasted. Co-ordinating diaries for meetings that will later be cancelled: another month. Waiting for people to repeat themselves because they were on mute by mistake: a fortnight. Spending hours crafting an email and then leaving it in the drafts folder: two days. Desperately opening and shutting various flaps on a recalcitrant printer: a day. The madeup study shows that technology lies at the heart of this squandered time. Technology can also help. Services that sync up diaries and autocorrect options already do; passwords will doubtless end up being replaced by facial recognition and fingerprint logins. Whether the time thereby saved would be put to more productive use, like reading this column, is a reasonable question. But years of workers’ lives are wasted on utterly pointless activities. All improvements warrant heartfelt thnaks.Read more from Bartleby, our columnist on management and work:Corporate jets: emblem of greed or a boon to business? (Jun 9th)Do not bring your whole self to work (Jun 2nd)The power of small gestures (May 28th) More

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CNBC’s Jim Cramer warned investors on Wednesday that while there are some stocks with low price-to-earnings multiples that look cheap and therefore investable, it’s worth noting that they aren’t always recession-proof.
“There are the higher-quality ones that you can justify owning if you feel a little more sanguine about the economy,” the “Mad Money” host said.

CNBC’s Jim Cramer warned investors on Wednesday that while there are some stocks with low price-to-earnings multiples that look cheap and therefore investable, it’s worth noting that they aren’t always recession-proof.
“There are stocks with insanely low price-to-earnings multiples that can’t be bought under any circumstances,” the “Mad Money” host said. “Then there are the higher-quality ones that you can justify owning if you feel a little more sanguine about the economy.”

Cramer highlighted Nucor, Toll Brothers, Ford and Whirlpool stocks that have low price-to-earnings multiples and could be great bets if the economy stays stable. 
However, because these stocks have toppled before during the height of the pandemic, it’s possible they will continue to fall if the market doesn’t recover, Cramer said.
“If we get a steep recession, all four could go much lower. Keep that in mind if you take the risk,” he said.
Cleveland-Cliffs is a stock with a low price-to-earnings multiple that investors should avoid completely, he added, predicting that the stock has more downside to it.

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“When you buy a stock with an extremely low price to earnings multiple and yet the darned thing still goes down, that’s because these stocks only look cheap thanks to the fact that the earnings estimates … are too high,” he said. “They can go lower and then lower and then lower.”

Disclosure: Cramer’s Charitable Trust owns shares of Ford.
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GM on Wednesday said it is investing $81 million at its tech center in suburban Detroit to hand build the upcoming Cadillac Celestiq – a new electric flagship car for the brand that will be made in limited quantities.
The decision marks the first time GM will build a vehicle for commercial sales at its massive tech campus in Warren, Michigan.
GM is scheduled to officially unveil the car, which is expected to cost $200,000 or more, next month.

Front driver’s side view of the Celestiq show car, which GM is expected to unveil in late-July.

DETROIT – General Motors on Wednesday said it is investing $81 million at its global design and technology campus in suburban Detroit to hand build the upcoming Cadillac Celestiq – a new electric flagship car for the brand that will be produced in limited quantities.
The decision marks the first time GM will build a vehicle for commercial sales at its massive tech campus in Warren, Michigan. It also marks a pivot for Cadillac to offer a hand-built car, which is typically reserved for high-end sports cars and uber-luxury vehicles such as Bentley’s exclusive models, as GM pushes to revive the quintessential American brand into a tech-savvy EV carmaker capable of challenging Tesla.

“As Cadillac’s future flagship sedan, Celestiq signifies a new, resurgent era for the brand,” GM President Mark Reuss said in a statement.
GM is scheduled to officially unveil the car next month. Only hundreds are expected to be produced each year and cost $200,000 or more per car, Cadillac President Steve Carlisle told The Wall Street journal in 2020.
The vehicle will be based on GM’s new Ultium electric vehicle platform, which was first used on the GMC Hummer EV. The platform is meant to be modular and underpin GM’s newest EVs, including 30 new models by 2025.

Read more about electric vehicles from CNBC Pro

In a release Wednesday, GM said the investment will be used to purchase and install equipment to hand-build the Celestiq and for campus renovation work that is already underway. The company reconfirmed that the Celestiq roof is expected to be one of the first to feature a four-quadrant, suspended-particle-device smart glass that lets each occupant of the car set their own level of roof transparency.
The automaker also said the vehicle will feature a new interior screen display that spans the width of the vehicle  and include more than 100 3D printed parts.
Although machinery is used in making hand-built vehicles, it’s largely controlled by humans. That compares to a typical vehicle, which is largely produced on an assembly line using hundreds of robots alongside assembly workers.

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Alibaba Group Holding Ltd: “I think Alibaba’s going higher, but I’m not recommending any Chinese stocks. … The Chinese economies are just too hard to deal with.”

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ChargePoint Holdings Inc: “This is the kind of speculative stock that the Fed does not want you to win on, so let’s play with the Fed’s rules.”

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Planet Fitness Inc: “I think the franchise is doing well. I don’t know, I think it’s an opportunity.”

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SoFi Technologies Inc: “If they’ve got the deposits, then they will do as well as the other banks that I’ve been saying, that if you have deposits, you’re going to do very well because the Fed is giving you basically free money.”

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Meta Platforms Inc: “The best metaverse stock to invest [in] is Meta. … I think that they are going to be the winner.”
Disclosure: Cramer’s Charitable Trust owns shares of Eli Lilly and Meta.

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Ford Motor’s CFO said Wednesday that the company isn’t yet seeing consumer demand for new vehicles drop off.
But rising commodity costs have wiped out the profit it initially expected to make on its electric Mustang Mach-E.
Ford CFO John Lawler noted one emerging sign that consumers may be reaching their inflationary limits: Ford Credit, the company’s financing arm, has seen an uptick in “delinquencies,” or late payments.

The Mustang Mach-E is Ford’s first new all-electric vehicle under an $11 billion investment plan in electrified vehicles through 2022.
Michael Wayland | CNBC

Ford Motor’s CFO said Wednesday that the company isn’t yet seeing consumer demand for new vehicles drop off – but rising commodity costs have wiped out the profit it initially expected to make on its electric Mustang Mach-E.
Demand for new Fords and Lincolns continues to exceed supply, which is still constrained by an ongoing global shortage of semiconductor chips, Ford CFO John Lawler told analysts at a conference hosted by Deutsche Bank – even after the company raised vehicle prices to offset the effects of inflation.

For the most part, those price increases have preserved Ford’s profit margins, Lawler said. But the price rises weren’t enough to offset the impact of climbing costs on the company’s electric Mustang Mach-E.
The model saw its costs increase substantially due to sharply higher battery material costs. While the Mach-E was profitable when it was first launched in late 2020, that’s no longer true, he said.
Despite the upbeat report on demand, Lawler noted one emerging sign that consumers may be reaching their inflationary limits: Ford Credit, the company’s financing arm, has seen an uptick in “delinquencies,” or late payments.
Lawler said Ford is taking the possibility of a U.S. recession seriously and the company has modeled several possible scenarios for a downturn.

Read more about electric vehicles from CNBC Pro

Still, Ford and the broader auto industry are in a different position today than in past recessions, when the company typically held high inventories and increased discounts that eroded margins, Lawler said.

“We don’t have that today,” Lawler said. “We’re very lean on inventories. We have an order bank that’s significant at over 300,000 units. … As an industry and as a company, we’re heading into this [possible recession] in a much different position than we’ve ever been in before.”
Correction: This story has been updated to remove an incorrect figure for cost increases associated with building Ford’s Mustang Mach-E. Ford CFO John Lawler did not provide a number for that increase.

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