Speaker 1:
From the library of the New York stock exchange at the corner of Wall and Broad streets in New York city, you're inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision, and global business. The dream drivers that have made the NYC an indispensable institution of global growth for over 225 years.
Speaker 1:
Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism, right here, right now at the NYC and at ICE's exchanges and clearing houses around the world. And now welcome inside the ICE House, here's your host, Josh king, of Intercontinental Exchange.
Josh King:
Last summer when Intercontinental exchange was getting ready to announce the launch of Backed, a company formed with backing from Boston Consulting Group, Galaxy Digital, Gold Finch Partners, Intercontinental Exchange, M12, which is Microsoft's venture fund, Chengdu Capital and Protocol Ventures for people and institutions to seamlessly buy, sell, store and spend digital assets.
Josh King:
We thought about where the announcement would have the most impact. More importantly, we asked where could the content and full story be best told with space to give readers the past, present and future of its founding idea. These stories take time to research, report, write, edit, and layout, whether in a printed or online format.
Josh King:
And for me, a kid who grew up grabbing the magazines from the old Time Inc, Time, Fortune and Sports Illustrated from my parents' mailbox to pour over the words, cover art photos, even the ads, there was only one place for this story. Maybe the last place for it left in the publishing diaspora Fortune magazine.
Josh King:
How many of you have actually handled an issue from Fortunes early days, oversized 11 inches by 14 inches, gloriously illustrated sometimes with a photograph of industrial or natural America by Margaret Bourke-White or Ansel Adams. Even today, if you can find a few of those old issues on eBay, they look Regal on a coffee table, but at last those were the days.
Josh King:
Still, a long form writer like Shawn Tully still plies his trade for Fortune and the 9000 word pieces that he turns out like so much of Fortunes writing can still feel like a short book when you dive into them from start to finish, as it did on that story about ICE and Bakkt. The headline in that piece Wall Street's power couple take on Bitcoin.
Josh King:
It's a long way from 1929, when Fortune was founded just before the wall street crash. When the crash hit the legendary founder, Henry Luce wrote a memo to his staff, "We will not be over optimistic, we will recognize that this business slump may last as long as an entire year." Well, maybe loose was a little over optimistic himself. The same might have been said 90 years later about cryptocurrencies. And yet it's still very early days. Those who invested in the markets at the beginning of 1930, saw a Dow Jones industrial average at 248, that's 248 down from a pre crash high of 381.
Josh King:
Today, where does it stand? Just above 26,000 as we sit here in the library today, that's long term my friends. Joining us is another long term thinker, Alan Murray, who was at the helm of Fortune since before its acquisition by Meredith corporation through its sale in late 2018. And now as it embarks as an independent company for the first time on its 90th year of operation, will Fortune's new ownership and leadership change the future for Fortune. And what will that future look like? Our conversation with Fortune's CEO, Alan Murray, right after this.
Speaker 3:
We began with a vision to transform energy trading through technology, creating a modern accessible marketplace, the level, the playing field and drove transparency. Today, Intercontinental Exchange operates markets around the world. We provide data people rely on and connect participants to support investing, trading, hedging and capital raising, driving the world forward. Well-functioning markets play a critical role in advancing economies and create opportunities for those who build them.
Speaker 3:
And we innovate to ensure our markets serve the world every step of the way. When you turn on a light switch, we help ensure that energy is priced efficiently from fields to your cup each day, from farms to your table and products that enable financial opportunity at Intercontinental Exchange, we build, operate and advance global financial and commodity markets. It starts here.
Josh King:
Our guest today, Alan Murray, is president and CEO of Fortune, overseeing the independent media company's global operations in print digital and live events. Prior to that, he has held positions at Time Inc, as its chief content officer, was the president of the Pew Research Center and spent more than two decades on the Wall Street Journal, where his experience included overseeing digital operations conferences, video, and the Journals, Washington DC bureau.
Josh King:
Alan also hosted a show on CNBC in the early two thousands and has also authored four books. Welcome Alan, inside the ICE house.
Alan Murray:
Great to be here. Thank you.
Josh King:
Henry Luce new success depended on advertising dollars. So he pitched the nascent paper to advertisers describing it as a publication that would be, and I quote so richly illustrated and so distinguished in appearance that it will be instinctive to turn the pages and having turned the pages, his reader will discover the editorial content of such arresting vitality that were it, but in mimeographed on the cheapest newsprint would still pay dearly for it, Allen, how faithful is the Fortune of today to this founding ideal for man Luce?
Alan Murray:
Well, Henry Luce did have this notion that business could be beautiful and those early magazines were gorgeous pieces of art. And as you pointed out in the thirties had photography from Margaret Bourke-White and Ansel Adams, really a wonderful piece of work, but you probably know your history well enough to know that was pre-digital and the digital world has changed the things pretty substantially in terms of the role of the print magazine.
Alan Murray:
We still do it every month. We love it. It plays an important role in our business, but it's only one leg of the business. We have over 10 million people who visit us through digital outlets every month, we have seven daily email newsletters, and we have a very robust executive conference business. So we've become much more of a multimedia platform than we were in Henry Luce's beginning days.
Josh King:
Talking about the multimedia platform Luce said people would pay dearly for its reporting. The cover price of that issue that I talked about from last August was $6.99, well, north of the buck that loose charged for copy in 1930, which I think in 2019 is $15. So breakdown the revenue stream that you look at today, if you're only selling the newsstand copy for 6.99.
Alan Murray:
So you really have, as I said, three legs of the business, and they're all in terms of their financial significance, they're all roughly equal. The executive conference business is a big and growing piece of it. The print magazine is an important piece, but advertising dollars in print have been shrinking across the industry. And then there's the digital business which is growing.
Alan Murray:
So the three legs we view as of equal importance, one of the things we want to do now that we have our independence and are able to chart our own future is to go back to that premium model that Henry Luce talked about in 1929 and 1930. So I think over the course of the next year, you can expect to see changes that will both improve the quality of the journalism in the magazine, improve the look and quality of the product itself and increase the price that we ask for it.
Alan Murray:
Under, as part of timing, Time Inc was very much an advertising focused organization. Advertising will continue to be important to Fortune, but we really want to focus on our readers, our customers, and super serve them with information they need to survive the tumult that's going on in the business world right now.
Josh King:
Those who have us who have followed the fortunes of Fortune, Time and Sports Illustrated kept a close eye on what Meredith NYSC, ticker symbol MDP would do with the flagship brands of the old Time Inc when it bought the storied company.
Josh King:
But Alan, for those unfamiliar, take us through a quick history going back to that watershed moment in 2000, when Steve case stood at a podium with Gerald Levin of AOL bought Time Warner for 162 billion, the century has not been kind to the publishing business.
Alan Murray:
No, the century has not been kind to print media. If you think about this is a comment on my age and I apologize for it, but I remember watching Leave It to Beaver when I was a kid and the Beaver's father was always sitting at the kitchen table, reading the newspaper, and he didn't seem to have a job. He just seemed to sit there and read the newspaper. And after you watch it for a while, you realize-
Josh King:
Ward Cleaver worked very hard.
Alan Murray:
So if you wanted to get a message to the Cleaver family, you had to go through that newspaper. And I think magazines played a similar function. They really were one of the few ways that advertisers could access people's attention. As soon as you replace that with a computer or a cellphone, there are thousands of different ways to get people's attention. And the advertising model started to break down.
Alan Murray:
And that's the source of the problems that you've seen over the course of the last 15, 20 years. Now, there have been some bright spots in recent years. If you look at what the Wall Street journal pioneered in doing, if you look at the New York times, or the Washington post, or you look at the economist, or the Harvard business review, or the new Yorker.
Alan Murray:
Those magazines have made real progress by saying, by recognizing that advertising is not going to play the preeminent role it has in the past. And by saying, we need to produce something that our customers are willing to pay for. I think that's clearly the future of journalism.
Josh King:
So last year, Alan, Fortune found itself up for sale along with Time and Sports Illustrated, November 2018, two months after Time was sold to Marc Benioff of Salesforce that's NYC, ticker symbol CRM. The news broke that Chatchaval Jiaravanon we'll call him Chat for the rest of our conversation with me.
Josh King:
Part of the family that owns Thailand's biggest conglomerate would buy Fortune for a small fortune, albeit at a steep discount to what Case bought it for. The last year, that for you was to say the least a global journey to preserve and grow the global brand. Tell me about it.
Alan Murray:
Well, we spent, it was a very interesting year, shortly after Meredith bought Time Inc, they made it clear that, Meredith is a great company with a very clear focus and their focus is on women's service magazines. And what they really wanted from the Time port portfolio were magazines like Southern Living and InStyle and People, but magazines that principally, this principle circulation was among women because they really wanted to own that audience.
Alan Murray:
And so Sports Illustrated, Fortune, Money and Time didn't really fit that portfolio that well. So they announced pretty quickly after the purchase that they were going to sell those four publications. They asked me to stick around, to help with the sale. I thought it would be a six month process. It turned into a one year process, but was very interesting.
Alan Murray:
And it was interesting primarily for this reason, most of the people who came in the door were not media companies, they were wealthy individuals who thought that owning a media company might not be the most lucrative investment they could make, but was a good thing to do with their money. It served a social purpose, it would be kind of fun. And so we had a lot of those people coming in and looking at the titles and we spent the year talking with them. And finally, in the case of Fortune ended up with Chatchaval Jiaravanon.
Josh King:
Let's go back to the very beginning for Alan Murray, you were in journalism since age nine. What was the first big story you broke?
Alan Murray:
Oh, I think it was somebody who lived up the road, their grandmother was coming to visit or they lost their cat or something like that. I would walk up and down the street I lived on and take the notes on what was going on in the neighborhood, and-
Josh King:
Where'd you grow up?
Alan Murray:
It's an interesting linguistic twist. I grew up on a street called Outlook Drive in a suburb of Pittsburgh. And I would torture my poor mother, I'd make her, I'd take all these notes about what was going on in the neighborhood. And she would type it up using a, this is before the days, again, I'm broadcasting my age, but it was before the days of Xerox machines and copy centers.
Alan Murray:
And so she would type it up on this special carbon paper that I could then lay down on a jelly sheet, copying machine, and I could make 30 copies and I'd sell it for a nickel around the neighborhood.
Josh King:
So how did your career progress, what did you call this publication? Did you have name?
Alan Murray:
It was called The Outlook Outlook. So you ask how my career progressed. My family moved to Tennessee, Lookout Mountain, and so The Outlook Outlook became The Lookout Outlook, but I did continue for a good time after that.
Josh King:
What brought the Murray family from Pittsburgh to Tennessee?
Alan Murray:
My father worked for a company called Westinghouse, which says something about the rise and fall of great companies. And he was in sales and was moved by the company to Tennessee.
Josh King:
And so from The Outlook Outlook to Lookout Mountain and then progressing your student journalism career, what were big influences? How did you develop your style and your passion for writing and looking at stories?
Alan Murray:
I read a lot. Starting with the Hardy boys, but I read everything I could get my hands on. So I was constantly consuming things, I like to read, I like to write, I edited my high school newspaper. I edited the college newspaper.
Alan Murray:
The unfortunate thing about it is that it happened so early in my life that I never had the opportunity to really think about what I wanted to do with my life. It just kind of happened to me and I tried to escape from it once or twice, but failed. And so here I am.
Josh King:
A big part of your career was the Wall Street Journal, which had its start right here on Wall Street. And during 9/11 was just a few blocks away at the world financial center. Tell me about your journey in that narrative arc that saw the WSJ pass from the Bancroft family and ultimately to Rupert Murdoch.
Alan Murray:
Sure, you mentioned 9/11, probably the most emotional moment in my career was that day. I was running the Washington Bureau of the Wall Street Journal. And we saw the planes fly into the trade center and I got a call from Paul Steiger who was then the managing editor saying we have to abandon the building, which was just a few blocks from here, said we have to abandon the building.
Alan Murray:
We're going to try and make our way to New Jersey, South Brunswick, where we had a printing and fulfillment center and hopefully get there in time to produce the paper. But in the meantime, you have to put together the content for the day. So I called together the people in the bureau and said, this is our moment. We have to tell this story for the readers of the Wall Street Journal from every aspect.
Alan Murray:
And it was tricky because communications were pretty much out. But what happened that was so fascinating was that all around this area, it was 9 o'clock in the morning, which is about when journalists come to work. Other people in the financial district are already at work, but journalists are a little slow on that front. So a lot of people were out in the streets when it happened, and they did what reporters do under those circumstances. They started reporting.
Alan Murray:
And they couldn't talk to their editors because communication wasn't working at that time. There weren't many cell phones. I had a Blackberry, a few people in management had a Blackberry, but most of the reporters didn't. And so they just started reporting and looking and seeing the things they saw.
Alan Murray:
And then around noon, we found we're sitting in Washington, these emails would come in and they were addressed to everybody at the company because the reporters didn't know who else to send them to, but they had gotten to a computer, started writing out what they had seen sent in these incredible first person accounts of what had happened around this area.
Alan Murray:
And then we had editors in Washington assemble those into stories, probably around three or four o'clock the caravan of people from down here finally got to the offices in New Jersey, set up a makeshift publication operation, took the content we had put together in Washington, got it produced in a paper. And the paper came out the next morning, which was an amazing feed. And in the end won the Pulitzer prize. So it was quite a 24 hour period.
Josh King:
And from that 24 hour period then comes this 2007 purchase of the Wall Street Journal by Rupert Murdoch. And we're began our conversation talking about these wealthy individuals who are now beginning to reacquire some of these storied names and journalism. And we're going to get to that in a minute.
Josh King:
But at that point, did you look at what had been your home since 1993 and had been stewarded by the Bancroft family in the same way that the Salzberg had continued to steward the New York times and thinking, this could be the beginning of the end.
Alan Murray:
Look, I love the Bancroft, I was friendly with a couple of them. I obviously loved the Wall Street Journal, but we had reached a point in those days where the last five years that the Bancroft's owned the Wall Street Journal, a hundred percent of the profits went to pay dividends to the Bancroft family. So nothing was being reinvested in the newspaper.
Alan Murray:
Now we thought the idea of Rupert Murdoch, it was pretty much generally agreed. The idea of Rupert Murdoch buying the Wall Street Journal was somehow the end of the world. It would be terrible. The history was over and the bankrupts and many of the management were writing, trying to fight this and writing about how horrible it would be.
Alan Murray:
In retrospect, it turned out the best thing that could have happened to the paper, Rupert invested in it at whatever else you say about in Rupert Murdoch is a person who loves newspapers and wanted us to succeed and wanted people to take risks and try new things. And I've pretty quickly found myself running digital conferences, video, and always had felt I had the wind at my back. Because Rupert encouraged you to take chances and do things.
Alan Murray:
You know what happens at big organizations, you go back to that time AOL merger, why things like that fail is because at big companies, there's usually somebody who can stop anything. The bureaucracy gets in the way of progress you and at Rupert Murdoch news core, the thing that kept that from happening was Rupert himself. He was there to sort of block the bureaucracy and put wind at the back of people who were willing to take chances and build new businesses. And I thought that was fabulous. Enjoyed it.
Josh King:
This Was probably about the time you'll correct me if my timing is wrong, but around the time that Walt Mossberg and Kara Swisher were starting, AllThingsD and starting the events business. Were you aware that this was going to be a big revenue area for journalistic brands?
Alan Murray:
I think so. Look, I spent in 2005, when I first moved to New York from Washington and Paul Steiger asked me to write the business column, he wanted to call it the business column. I thought that was a little odd. I said, if my column is business, what the hell is the rest of the paper?
Alan Murray:
But he had this notion, which I think was right that the Wall Street Journal did a good job covering individual companies, and covering industries, and covering the economy and covering politics. But people sitting in the C-suite had to understand how all those pieces came together. They had to have a unified view of the world and he wanted a columnist to write a story for those C-suite leaders. And so that's what he asked me to do.
Alan Murray:
And so I said, great, but you have to understand I've spent my career in Washington. If you want me to do this, I want to go spend the summer at Stanford business school, where they had a senior executive program to study business. And the reason I mention that is because those programs, those executive education programs are really geared to get you thinking about the problems in your own business.
Alan Murray:
And so, while I was there in part to learn more about business and read case studies and get historical anecdotes for my column, I also spent a lot of time thinking about what was happening to the newspaper business. And it was clear that the problem wasn't one of a lack of demand for information, you had companies like Bloomberg, or Gartner, or Forester that were thriving, selling business information. So I thought, what is it that we are doing wrong by focusing so much on media?
Alan Murray:
And that's when I began to think about conferences and verticals, the other thing I did at the Wall Street Journal was create the CFO journal, CIO journal, which focused on a narrow serving a narrow audience and have been successful product. So I spent a lot of time thinking about how do we get over this drought that's affecting advertising, supported media, so that was really what got me started on the path that I'm continue to be on to day.
Josh King:
You came to Fortune as its top editor in 2014, one of the iconic publishing names, as we've been talking about in your farewell email to the Pew Research Center, where you had been president, you described becoming the editor of Fortune as a calling, how did the job offer materialize? And does it remain a sacred task for you?
Alan Murray:
It does. I think it's one of the great brands of American history and my goal, and I think I said this when I first got there, but my goal is to make sure it makes it thriving into its second century. It's 89 years old today. We've got 11 years to go. My hope is that when that moment comes, we'll be able to look at Fortune and say, wow, it's not a declining asset. It is a growing thriving asset.
Alan Murray:
It came about because a couple of people who had worked with me, who I had worked with at the Wall Street Journal had moved to Time. One was Todd Larson, who was executive VP. And the other was Norman Pearlstine, who had been editor of the journal when I started in 1983 and had come back as Chief Content Officer. So it was the two of them who brought me in to run Fortune.
Josh King:
So now even with the constraints that must be on your time as president and CEO, building this business as an administrator, you still have time to author, at least a couple of the CEO daily articles each week. Why is it an important for you to maintain a journalistic identity even while you're trying to run a business?
Alan Murray:
Well, because I love to write and that's what I've done my whole life. And I struggle to find the time to write those 300 words every day, that top that newsletter, but it's the most important part of my day. I love it. I love the direct relationship it gives me with Fortune readers and I'm going to fight to keep that to the very end.
Josh King:
So in one form or another, The Outlook Outlook continues.
Alan Murray:
It continues. Look, throughout my career, I've always had these two simultaneous and competing impulses. One is to write, to be a practicing journalist, but the other is to lead. I've always felt that you can accomplish so much more if you can get a group of people moving in the same direction towards a common purpose.
Alan Murray:
And that's been a part of my life almost as long as writing has been a part of my life. And so I enjoy them both, and I want to keep doing them both.
Josh King:
Then let's focus for a second on leadership because in 2017 comes the big news. Let's take a listen.
Speaker 5:
Meredith just waited and waited and waited, why now?
Speaker 6:
Because they got the backing, they got some equity funding from the Coke brother. So they can actually finance the deal. Banks were not willing to finance a magazine transaction of this size and all cash deal. So they needed some equity.
Speaker 6:
But I think if you're Meredith, you're doubling down on the magazine business, it's a very bold move. I would argue it's a risky move for them. The magazine business continues to be in a secular decline in terms of circulation and print. The question is, can digital save the magazine business.
Josh King:
We talked about the strategy that Meredith focused on by wanting to acquire these flagship women's brands. But for Alan Murray and Fortune, this is going to be a moment where you're going to have to step up, lead and follow this journey toward independence. Does this occur to you immediately? And what are the first steps you begin to?
Alan Murray:
I think it was pretty clear right away. Meredith had tried previously a few years previously to buy the women's magazine. So it was pretty clear that they really didn't have an interest in Fortune, Times, Sports Illustrated. It just wasn't their thing. It's not what they did. So I think we understood pretty quickly. In fact, I went and that down with the CEO of Meredith Tom Hardy, who was a wonderful man very soon after the sale.
Alan Murray:
And I said, look, here's what I think Fortune can be, if you want to do it, I'm happy to do it for you, but if you don't want to do it, let me find somebody else out there who does, and let us go at it. And it was a great conversation. And I think they, he actually, I think they thought about it for a while, but ultimately decided it wasn't their thing. And that he would give me the opportunity to help them find the right buyer.
Josh King:
You don't do this all alone. Tom has given you the go ahead to begin to pursue this pathway independence, who are the important people in your team or your network that you say, we've got to imagine this differently and who do pull in.
Alan Murray:
There was a great internal team. I feel very fortunate that team was there. There was a woman by the name of Lisa Klein who had built the conference business at Fortune, which was critical to our success and our future in a way that's what distinguished us from the 23 other brands at Time Inc. All of those other brands are still primarily dependent on revenue from the print magazine. But at Fortune, the print magazine is now a minority of the revenue and that's because of digital, but because of conferences as well.
Alan Murray:
So Lisa was an important part. There was a guy by the name of Mike Schneider who had, was heading up the finance sales vertical for all of Time Inc. But his roots were in Fortune and Money. And he wanted to be part of the team and had a great editor who replaced me at Fortune name Cliff Leaf. So I feel fortunate that there was a core team in place that was ready to start working. And we did start working at the beginning of 2018 long before we knew who was going to end up buying us.
Josh King:
So after you assembled the internal team and had several other discussions about where Fortune might land, how did you connect with Chat?
Alan Murray:
We did have several other, it was a rollercoaster year. We came very close to two other deals before chat arrived on the scene, which was only in October, I guess. He had reached out through a contact to someone who I know very well. Bob Nardelli, the former CEO of Chrysler, home Depot came from GE originally. I've known Bob for a long time and Bob made the connection with me at the time we were in an exclusive negotiation with another potential buyer.
Alan Murray:
So I said, and Chat wanted to fly me to Bangkok and have a conversation. I said, I can't do that, we're in a exclusive legal agreement. So I introduced a Chat to our bankers at Citi and they began a conversation that after that I wasn't a part of, but when the deal that we were in fell apart, he was there ready to go and just swooped right in. And it happened incredibly quickly. Just a matter of weeks after that.
Josh King:
Marc Benioff has talked about his motivations for buying Time. We've heard about Emerson collective and their motivations for buying Atlantic. What were Chat's motivations for looking at Fortune?
Alan Murray:
It's a really interesting question. And it's a better question for him than for me, but I'll tell you the pieces of the story that I've garnered. Chat was in his teens when we pulled out of Vietnam, the US pulled out of Vietnam and Saigon fell and then Laos fell and Cambodia fell. And he was a part of the biggest capitalist family in Thailand.
Alan Murray:
And I suspected that moment in history it felt kind of precarious being the son of a Thai capitalist. And so his family sent him off to school in Arizona and he finished off high school in Arizona, then went to USC in Southern California for college and studied at the business school. And apparently in those days, God blessed them. The Marshall school at USC required its students to read Fortune magazine.
Alan Murray:
So at a pretty early age, he got introduced to the great history of Fortune magazine. After he graduated from college, he went to China, he was ethnic Chinese, but he went and lived in China for several years. Got to know China well has subsequently spent a lot of time there and done a lot of investment there. And he got to know the remarkable power of the Fortune brand in China, which I think relies on three things.
Alan Murray:
One is Henry Luce, who of course grew up in China may have known this when he chose the name, but it is a great name in China. If you go to the races in Hong Kong, you'll see that about a quarter of the horses have fortune somewhere in their name. It means wealth prosperity, happiness, health, it's everything. And so it's a beautiful name in China. Second, our list, particularly the Fortune global 500 list has become one of the leading benchmarks of China's incredible economic success over the last two decades.
Alan Murray:
Two decades ago, there were maybe four Chinese companies on the Fortune global 500 list, today, there almost 130 Chinese companies. And it's not uncommon to walk into the headquarters of one of those companies and see a sign on the wall that says number 87 on the Fortune global 500 list. So in a way that we no longer are in the US, we have become an important benchmark of economic success in China.
Alan Murray:
And then the third reason is because some of my very foresighted for bears at Fortune started 20 years ago, something called the Fortune global forum, which now happens in cities all over the world. But in China, it was an opportunity for Chinese cities to really say to Western business people, hey, we're open for business. And we would bring Western CEOs to China first in Beijing, then Shanghai, Hong Kong, Chengdu year before last, it was in Guangzhou next year we're looking at another city.
Alan Murray:
There are a lot of cities that still want to do it, and that's become a very big, it's almost like the Olympics. It's a way of Chinese city saying we're open for business. It's a very well covered because it's sponsored by the government, it's well covered by the state owned press. And so it's become very well known. So what Chat saw was this very strong brand that he thought should be a much bigger business than it was. And that was what motivated him to do it. Sorry. That was a long-winded story. But it's truth.
Josh King:
It's a great story. After several years of financial uncertainty for Fortune, how has the infusion of capital from Chat and the long term outlook that he has altered the way you are running the business day to day and Fortunes long term plan?
Alan Murray:
Oh, it's transformational, it's exhilarating the opportunity to chart our own course. In the final days of Time Inc, we couldn't do anything that wouldn't make money, at first, it was in the same year, then it was in same quarter because at the end of every quarter, there would be this scramble to, oh my God, we got to find some cash somewhere so that we don't have to report a decline to the street.
Alan Murray:
That's really debilitating it when you can't invest at all in the brand, we had lots of ideas of ways we thought we could expand it, but we couldn't, our hands were tied. We couldn't do anything about it, so having an owner who has a long term vision, he's giving us seven year incentive plan and who has the resources to invest, and we're not talking about, we don't need to buy giant buildings. We just need the freedom to do some things that not pay off for 18 months. It's transformational.
Josh King:
I visited a couple times the timing space over at Brookfield place, gleaming set of offices for all of the Time Inc brands, but maybe more space than you need. You probably used some of the infusion to find more purpose built space.
Alan Murray:
We're leaving.
Josh King:
I know you're leaving. So tell me about the plan to sort of keep your writers and your creatives together?
Alan Murray:
We're leaving because we wanted to be, one of the problems with a big company like Time Inc, or with Meredith was so much happened in silos. So our sales were handled by people over there and technology was handed by people here and they didn't talk to each other. And the opportunity to take our team, which is only 150 people or so to put them in a unified space and have everybody working together and pulling together and working towards a common goal is part of what's a very exciting about this.
Alan Murray:
So we went out shortly after the deal was completed December 21st, and started scouting for space and we found a beautiful three floors on Fulton Street, right across from South Street Seaport, still within easy walking distance of your wonderful studio here.
Josh King:
When you look at the examples set by Alibaba's Jack Ma who bought the South China Morning Post, and certainly the transformational aspect of what Jeff Bezos has done with the Washington post, very much keeping hands off editorially, but bringing new technology and new ideas to the business side. What are the ways in which Chat has similarly embarked on his ownership of Fortune?
Alan Murray:
I think he doesn't have a lot of experience in media, but we from day one said, this is the direction we have to go and is clear. And both those publications, you mentioned signal it. The advertising supported media had frankly, devalued content and left people chasing after eyeballs and the ad dollars that went with it.
Alan Murray:
And we had to invest in journalism, invest in technology, begin to ask our devoted readers and devoted audiences to pay more. And that was the course that we had to follow. And so, and he understood that, seen what had happened at the South China Morning Post, as well as the Washington Post. And at other places, he understood that immediately.
Josh King:
After the break Alan Murray, and I discussed the future of Fortune media from its growing community's business to how it planned is to differentiate itself from its competition. That's right after this.
Speaker 7:
Cushman & Wakefield is one of the premier brands in the commercial real estate services space. We have 48,000 professionals around the world in 400 offices in 70 countries. This company, a hundred, one years old, if you can imagine is never been public.
Speaker 7:
There's a reason they call the NYC the big board. It's a great home for companies like us, big companies with big ideas, Cushman & Wakefield now listed on the NYSE
Josh King:
Welcome back before the break, Alan Murray, president and CEO of Fortune and I were discussing the Fortune media group's an acquisition by Chatchaval Jiaravanon, most people think Alan of Fortune media as a magazine, both print, and more recently online at CNN during the time Warner days, and now at Fortune.com. But how would you describe the company that you're running and how do you want the customer experience to evolve over time?
Alan Murray:
So I think the way we're thinking of it is that our purposes to is to make business better. And I mean that in both senses of the word better, and we have various ways of doing that, we do it as we have historically through great storytelling. We do it through inspiration, we do it through networking. There're really two fundamental forces that are driving our business today.
Alan Murray:
One is the incredible transformation of business that's being driven by technology. We are, I believe on the cusp of something that looks very much like a new industrial revolution, particularly when you think about the ability to collect data from everybody and everything, and then turn that data into intelligence, using smart algorithms, artificial intelligence.
Alan Murray:
And how that has the potential to change the way every company, not just technology companies, the way every big company interacts with its customers, with its employees, with its suppliers, with its machinery, we're on the cusp of something very big and it's causing kind of a collision of industries. And it means that senior executives at big companies need peripheral vision more than ever before.
Alan Murray:
It's not enough if you are at bank of America and you've been a great banker throughout your career, and you move into a senior level, it's not enough to understand the banking industry because your competition may come from Alibaba. If you're in a insurance company, a health insurance company, it's not enough to understand your competition across the street. You got to realize that Apple now, Tim Cook said last week that he wants Apple to be a healthcare company.
Alan Murray:
How is that going to affect you? And so this tumultuous technological change requires successful executives to have a much broader view of the world. And we think we can help with that, both in our media and in our events and possibly in other ways, so that's one piece. And then the second piece, which I think is closely related to the technological change is a change in the nature of leadership that something has happened in the last five to 10 years, in the way the people who run large organizations think about their jobs.
Alan Murray:
The old model was kind of hierarchical. Information would go up the hierarchy, get to the top, you'd sit in the C-suite put together the strategy, put out everybody's plans and it would trickle back down the hierarchy, that doesn't work anymore. First of all, information moves horizontally, not vertically. Everybody gets it instantly, but second, the pace of change is so fast, you can't wait for that hierarchical process to take place.
Alan Murray:
So leadership has become much more of setting purpose, direction, guide walls for the people who work for you. And as that has happened, there's also been this rising desire on the part of employees to work for a company that they think is doing good in the world. Millennials are a different generation. They get married later than previous generations. They're less likely to belong to a religious organization. They don't belong to moose clubs or rotary clubs.
Alan Murray:
And so the employer becomes their most significant formal connection with society. And so they put a lot of their hopes and dreams into that connection. And CEOs are feeling that, and you see this in the kind of reactions we've seen in the last few years, when for instance, Indiana passes a religious liberties law, that's viewed as discriminatory and Marc Benioff, who we were just talking about, feels the need to take a public stance on that.
Alan Murray:
Or North Carolina passes a law, limiting transgender access to public bathrooms and Bank of America of all places, which is the largest employer in the state feels it has to do something. Or Delta, when the shootings happen in Florida, the CEO of Delta airlines cuts off his discount program for the NRA, even though he operates in the state of Florida, he has a tax bill waiting before the legislature there.
Alan Murray:
And he knows that a majority of the members of the legislature are members of the NRA. So those sorts of things wouldn't have happened 10 years ago or 15 years ago. There's a sense among the leaders of large organizations that they have to do more than just provide strategy and direction for the company and focus on the bottom line. They're feeling they have to become moral leaders, in many cases, they have a broader responsibility to their employees, to the community they operate in and to society at large.
Alan Murray:
So I think that's the second thing that we've been feeling and have been reporting on and have been encouraging through our events like the CEO initiative, new lists, we created three years ago, something called the change the world list that is focused on companies that are helping, that are making real progress, addressing social problems as part of their core business strategy.
Josh King:
How does Fortune potentially act as a convener outside of governments and NGOs to help these leaders who do control millions of workers and their futures and their employments, and think about how companies and the major components of this industrial revolution can steer a different world course?
Alan Murray:
So in December 2016, we took just over a hundred CEOs of big companies, CEO of Siemens, CEO of WPP, you had a big group of corporate leaders. We took them to Rome for two days, and we spent the first day in breakout groups talking about, we didn't invite any politicians, any political leaders. They spent a day working on what can the private sector do to address major social problems like global warming or healthcare for the two billion people who don't have even the basics.
Alan Murray:
And they came up with some really interesting recommendations. Then the next day we went to the Vatican, presented those to the Pope, who I think was very impressed by, he's not a capitalist by nature at this Pope. It's not his first instinct, but he was very impressed by what you just said. This is a group of people who employ tens of millions of people and have the ability to have a profound impact on the world.
Alan Murray:
And they are sincerely talking about these things they can do, as part of their profit making activity to really move the needle on social change. So he greeted each one of them individually. It was a really moving, I was sitting at the front. So I got to see each CEO as they shook hands with the Pope. And he would say, pray for me and would turn. And I would see them right at the turn. And you could tell which ones were Catholics because they were in tears.
Alan Murray:
But even the ones who weren't Catholics were so profoundly moved by the moral authority of this man. And all of them came out of that experience saying to us, this is really important. We are at an existential moment for the future of business and the future of capitalism. You need to keep this going. You need to figure out a way to keep pushing this conversation forward.
Alan Murray:
So we created something called the CEO initiative, which had its first meeting, a few blocks from here in 2017. Jamie diamond was the lead speaker there. And again, we broke off into groups to come up with ideas on what the private sector can do the next year we were in San Francisco, Tim Cook was there and we'll be back here again this year, which is our attempt to say, what can we do as a convener, and as a media organization to help push this movement forward.
Josh King:
I think the Pope actually singled you out and thanked you for convening this group in the Vatican, not bad for a kid from Pittsburgh to be individually?
Alan Murray:
And a Presbyterian at that.
Josh King:
Sticking with that first meeting in Rome, I want to hear a little bit from the CEO of Levi Strauss, Chip Bergh and comments that he made at that event.
Speaker 8:
The world is in a very different place today than it was four years ago or eight years ago. And it's not just a US election thing, but when you sum up US election, Brexit, the refugee crisis, what's happening with currencies, there's just so many dynamics going on in the world, but I think there is a moral imperative for companies to step up and play more of a leading role in doing good in this world.
Josh King:
All of the events that you manage from the Global Forum in Rome, Fortune, most powerful women, the CEO initiative, what kind of feedback are you getting from CEOs to say, in this case, Alan, this is really meaningful.
Alan Murray:
They want this look, they don't want it to be just a talk fest. They want it to show results. I think that's the most difficult part of the challenge for us because we're a media organization. We're not the UN, we're not the Clinton Global Initiative, but they want us to measure results. They want it to lead places, but they very much want it. Now, I'm not saying that's every CEO, but it's a growing number of purpose driven CEOs who really want to be part of this movement and want to have this conversation.
Alan Murray:
I love Chip Bergh from Levi Strauss, who you just quoted. And he is a really good example of it. You've been in this business for a long time, I've been in business for a long time. 10 years ago, 15 years ago, you wouldn't have found CEOs talking about the moral imperative of leadership. That's not the way they thought about their jobs then. So there's something going on that's really significant. And I think really important and really good. And we want to do everything we can to encourage it.
Josh King:
What are of the things that have allowed these CEOs to have the courage to speak up? A guy like Jamie Dimon, a person like Larry Fink, overseeing organizations that in some cases are kind of too big to criticize or bring down.
Josh King:
That's one thing you can put them in their own bucket, but you look at other CEOs, the CEO of Carrier, or Northrop Grumman, or Lockheed Martin, or Under Armor, how do events like this give companionship and courage to CEOs that may not have a approach like Dimon and Fink to be able to speak out and stand up.
Alan Murray:
It's really interesting you'll, if you think back to the early two thousands, when Enron and WorldCom, there were a whole bunch of corporate scandals going on. I actually left the Wall Street Journal and hosted a show at CNBC for three years. That was a crossover, but between business and politics and I was constantly on the phone trying to get CEOs to come on the show.
Alan Murray:
And none of them wanted to do it. They were under their desks. They said, are you kidding me? I don't want to raise my head, I don't want to talk about this. I just want to focus on the business and leave me alone. And for God's sakes, don't ask me to talk about gun control or transgender access to public bathrooms. So it was like, just keep your head down and stay out of it.
Alan Murray:
I would like to think that Fortune has played a role in giving them permission to be more, to play a greater leadership role in society. But I actually think the biggest forces, their employees, I ask CEOs all the time. I say, why are you doing this now? Your predecessors never did this. And the first answer you get almost always is the employees, particularly millennial employees. I think they, they're really having a positive impact on business.
Alan Murray:
Now, let me say, it's not always positive. We just had a great example this week, where you've got now something like 200 employees of Microsoft who are saying to Satya Nadella, cancel your contract with the US army. Well, I think that's disastrous. In a world where the Chinese government has absolute access to all the technology and all the information and pretty much anything it wants, that's going on in China, for tech companies in the US to say, we're not going to contribute to the national defense.
Alan Murray:
We're not going to contribute to the protection of the freedoms that we benefit from and that we all hold so dear, is a fatal mistake, but it is another example of the empowerment that employees of big companies have and feel today. That is for the most part been used for the good.
Josh King:
Conversely cities like New York city and particularly Queens where progressives stand up to a potential game changing investment by Amazon in bringing 25,000 high paid workers to the borough on the other side of the east river. And they basically say, can we use the three billion to invest somewhere else, 3 billion that they don't even have?
Alan Murray:
How stupid could that be? But let me say, I think Amazon could have done it much better than they did. What the CEOs who take part in our CEO initiative are beginning to recognize is they have to think about these things differently. What if Amazon had come in, and instead of hard negotiating for what was it, three billion in tax cuts.
Alan Murray:
Instead of in tax cuts what if they used their leverage, they had significant leverage. What if they used that leverage to make investments in the community that would benefit them, but that would also benefit the community. That's what business has to do a better job at today is showing that there is a way, this is when it works right, a win, win.
Alan Murray:
That's the great history of capitalism. We don't want to go back to government, we've seen the horror of what government control does to society. So we've got to emphasize the win-win nature of markets and capitalism, and Amazon had a great opportunity to do it. And I think they blew it.
Josh King:
We began our conversation talking about a particular type of writer like Shawn Tully who basically does one thing really well, which is dive deep and spend eight weeks or so on a story. And he is a poetic writer in many ways.
Josh King:
Now, in terms of gearing up for the future, while you still have Shawn Tully, doing those kinds of stories and profiles, you need to hire a very different kind of journalist. What do you look for in a today hire of a journalist coming out of school, ready to go to work for Fortune?
Alan Murray:
Well, that change that you just put your finger on, we've been struggling with for four years since the day I got there, really, before Time Inc spun out of time, Warner Fortune didn't have a website. The website had been given to CNN money to control. So the team at Fortune was totally focused on those kinds of 5,000 word stories.
Alan Murray:
The problem is in the world we live in, everybody's so busy and there is a place for 5,000 or 6,000 great stories and people will I on a weekend, relish having a great long read that I can sit back in my easy chair and read, but during the week, I get all my information off my smartphone and I'm not reading 5,000 word stories. I'm looking for 300 word bits of information and getting journalists to make that transition from 5,000 words, once a month to 300 words, three times a day has been a really difficult road.
Alan Murray:
I think we have to do both. One of the reasons why our newsletters have become so important is part of the key is making people recognize that it's not the difference between depth and shallow. It's just a different form of storytelling. I think if you read Fortune newsletters, they're very smart. They're not superficial, they're not click bait. They're about providing you the information you need, but providing it in short bits of facts and insights, not 5,000 words storytelling because that's during the week in people's crazy lives, that's the way they consume information
Josh King:
Sitting here as we are Alan in the library of the New York stock exchange in early 2019, what does the Fortune of 2025 look like? And how do you think the media landscape will continue to change?
Alan Murray:
So I think the Fortune of 2025 in some ways will go back to the Fortune of the 1930s. Again, if we're talking about the magazine, I think the magazine will become more premium, more beautiful, more focused on, in a way what was going on in 1929 and 1930 is similar to what's going on today. You were at a period of enormous economic change. That was an earlier industrial revolution and Fortune really tried to capture that.
Alan Murray:
And I think we want to continue to try and capture that in the magazine. I think across digital platforms, you'll see probably much more focused efforts that are designed to serve busy readers, less that are designed to chase eyeballs. And then the conference piece of this can't be understated. One of the things that the digitization of the world has done to us is make us crave more than ever before those personal face to face meetings and things happen at those meetings.
Alan Murray:
I'll give you an example. The Fortune brainstorm tech, which is one of our longest lived franchises. It was at that meeting that Michael Dell met the head of Silver Lake, Egon Durban which a year and a half later turned into this incredible move to take Dell private and really transformed the company. They had phones, they could have picked cut the phone and talked to each other, but it was because they met face to face that it happened.
Alan Murray:
You talked about AOL Time Warner, that meeting actually happened at a Fortune Global Forum in China. That's where Steve Case met Jerry Levin. And that turned into this big deal, so there's something about face to face meetings. I'll give you another fact, Michael Porter, the great Harvard Business School professor has taught many CEOs in classes over the course of the last 15, 20 years. And one of the things he did was require them all to track their time in 15 minute increments, over a four month period.
Alan Murray:
And he's collected this data now for 20 years and a lot of interesting findings, but for me the number one finding was this, that still today CEOs spend 70% of their time in face to face meetings. Not because that's the most efficient way to communicate. It's clearly not, but because that's the way to communicate that has meaning, your customers, your suppliers, your employees aren't going to take you seriously if you don't take the time to look them straight in the face.
Alan Murray:
And so it's an oddity in this digital world, but it is a fact that those face to face meetings have become more important and more valuable than ever before. And that will be a big part of what we focus our time and energy on in the future.
Josh King:
Well, I'm not going to wait until 2025 to see how this story ends up. Alan, come back in a year and tell us how the journeys continue.
Alan Murray:
I would love to, I won't be far away. I'll just be down there on Fulton Street. So I'd be happy to come back.
Josh King:
We're going to be neighbors. Thank you so much, Alan Murray for joining us inside the ICE House.
Alan Murray:
Thank you.
Josh King:
That's our conversation for this week. Our guest was Alan Murray, President and CEO of Fortune. If you like, what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or question, you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet us at NYSE. Our show is produced by Pete Ash and Ian Wolf with production assistance from Ken Abel I'm Josh King, your host signing off in the library of the New York stock exchange. Thanks for listening. Talk to you next week.
Speaker 1:
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