Chairman Interviews at Fortune Global Forum: Greg Penner
- January 15, 2018
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One of the highlights of the Fortune Global Forum were the really fantastic interviews with the CEOs (and Chairmen!) of amazing companies. Even for CEOs, these are heroes that are looked up to in large part. Each one of them had a way of distilling really important initiatives in their companies down to *very* simple phrasing that anyone could remember. This is part of a series of short posts based on my notes in each session. Given the recent news around Walmart Stores, it seems opportune timing to post this now:
Greg Penner, Walmart Stores, Fortune Global 1
Greg’s energy for Walmart is obvious. “One customer, one store at a time” is obvious in his thinking. This interview spent a lot of time on trade – and the Greg notes that while trade is good, the benefits of trade clearly don’t accrue evenly across the population. So while in aggregate it is good, in specific cases it can cause harm, or convey no benefit. Also: 65% of the kids entering school today will have jobs that don’t exist today – in part due to tech, in part due to globalization. So rather than focus on training for jobs, we should focus on capabilities and building blocks that today’s students can adapt to whatever the future holds. (I have to say, as a side note, that this aligns well with the vision of my own children’s school – Magellan International School).
Greg rightly notes that many trade agreements, including NAFTA, were written before the digital or information age and need updating to reflect current realities. He says that Walmart doesn’t really lobby for these things – that they’ve worked with 11 presidents, and they work with all of them. It is an ongoing relationship for Walmart, not a lobbying campaign.
Some time was spent talking retail and digital strategy as well – leveraging physical assets in the digital world, and vice versa.
This conversation led into a panel discussion immediately following with Carlos Brito of Anheuser-Bush Inbev, and Henry Kravis of Kohlberg Kravis Roberts, on winning in China. Both Brito and Kravis talked about getting into China early. It was a small market for Inbev at first, but it has turned into Inbev sitting on 60% of the high-end beer market. And the market is much bigger. Kravis touts getting started early investing in 2005, and not just putting in capital and hoping, but really operationally involved along the way. In addition, KKR worked on Government policy and implementation of things like food safety, and environment and water safety.
Asked about how to prepare for a correction, Brito argues that effectively China has had a correction from 12% growth to 6% growth. Kravis feels this growth can continue for some time ahead. Also of note: some parts of the economy might be growing much faster than 7%, some much slower – it’s an average. So there are a number of consumer ladders to focus on, and it is important to keep in mind that it is a very big market, big scale.
As an example – one company does 16M food deliveries a day – where no one in the US is doing more than 16M in a week. Lots of advice was shared about hiring the right people to build the business in China.
One final note, echoed many times at the conference: China was a great learner – absorbing best practices from everywhere else. But now China is finding best practices and exporting them as well. It is a fascinating shift in their role in these companies and in the economy.