Willy Walker: Good afternoon and welcome to another Walker Webcast. It is my great pleasure to have Adi Ignatius joining me today. Before I dive into an introduction of Adi and then into our conversation, just a couple of notes from having been on the road for the better part of the past week. I was back in Boston for my 25th Harvard Business School reunion and so it's apropos that I have Adi on with me today to talk about Harvard Business Review and everything that he sees sitting in his seat.
But a couple of things from that reunion. First of all, I was flattered by the number of my classmates and other former HBS alums who listened to the Walker Webcast on a very consistent basis. And so, to those of you who came up to me and said how much you enjoy the content we put out, thank you. Glad that so many people find what we do on a weekly basis with the Walker Webcast to be so insightful and interesting.
The second thing is the content in my 25th reunion, everyone was very pleased that it was focused on happiness and what we do with our lives. Arthur Brooks gave this fantastic presentation about finding meaning in the back half of our lives. And I said to a number of people that that just means that we're actually now officially old and that they've given up on trying to teach us how to make more money or manage organizations any better and the Harvard Business School is now saying we need to go figure out how to enjoy our lives, which was quite fun and the presentations were great.
I went from Boston to Chicago for a conference that Sam Zell hosts every year with a number of the most influential commercial real estate executives from around the world. And I would just give a couple quick things from that discussion. The first is a reasonably pessimistic tone/view on the world we live in today, the rising interest rate environment, and the high inflation. Many people from a commercial real estate standpoint are concerned about negative spreads on how do you buy a property at a 3.5 cap and finance it at a 4.75 interest rate and actually make money on it? And at the same time, I think to summarize where the conversation went, it was someone's comment saying it is a stock picker’s market is not an ETF market. In other words, you're just not going to see all boats rising in a rising tide. You're going to have to be very focused on where you're buying, what you're buying, very similar to the overall capital markets and the equities that people are investing in today. On the overall markets, one of the things that -- I haven't listened to Chairman Powell’s commentary this morning in front of the Senate Banking Committee. But I would say that there are some signs that the 75-basis point increase and, if you will, the deceleration in the economy is starting to have some impact. I saw this morning the spot price on WTI crude is down at $103 a barrel. And all of the oil, both refiners as well as extractors, were down precipitously this morning. And that led to a conversation that I had with David Faber at CNBC yesterday about the fact that the government and many people are focused on the supply of crude oil and that the real inflationary pressure right now is actually happening in the refined oil market, that the reason that the price at the pump is so high, the reason that plane tickets are so high is that for every three barrels of WTI crude, we produce two barrels of refined gasoline and one barrel of diesel and jet fuel. And the prices for those three are somewhere around 100 bucks a barrel for WTI crude, $175 a barrel for refined gasoline, and $275 for diesel and jet fuel. And that it's really a lack of refining capacity in the United States today that is causing the massive inflationary pressures for the cost of a trip on an airplane or for filling up your car. That to some degree, the policy is focused in the wrong place. And until we get more refining capacity online, just as we had happen as it relates to lumber prices. Lumber prices were at $1500 per thousand board feet, not because we didn't have enough trees in the United States or there weren't a bunch of trees sitting around in lumber mills. The issue was we didn't have the milling capacity to do it. And as we got that milling capacity back online after the pandemic, the price of lumber has dropped from $1500 per thousand board foot down to last I checked, $550 per thousand board foot. So, some of these supply chain problems are not actually the materials not being available, but actually the refining or the milling of them to get them to market. Just a couple of thoughts.
So let me give a quick introduction to Adi Ignatius and then we will dive into our discussion.
Adi Ignatius is the Editor in Chief of the Harvard Business Review. Prior to the HBR, Adi was Deputy Managing Editor for TIME Magazine, where he was responsible for many of its special editions, including the Person of the Year and the TIME100 franchises. He also served as TIME's Executive Editor starting in 2002, responsible for the magazine's business and international coverage. He wrote frequently for the magazine, including cover stories on Google and the 2007 Person of the Year profile on Russian leader Vladimir Putin. Prior to joining TIME, Ignatius worked for many years at the Wall Street Journal, serving as the newspaper's Bureau Chief in Beijing and later in Moscow. Mr. Ignatius received his bachelor’s degree in History from Haverford College. His father, Paul Ignatius, served as the United States Secretary of the Navy. And his brother, David is a former Walker Webcast guest and editor and columnist for The Washington Post and a dear friend.
I want to start with your upbringing and how and why two sons of a former secretary of the Navy became such fantastic journalists. What do you think it was that sparked that interest and amazing capability in you and your brother, David?
Adi Ignatius: So, you're softening me up, so I worry about what's to come. You know, so there were four of us. There were four kids. Our two sisters both got law degrees. Amy is a judge in New Hampshire. Sarah just finished a stint running an Armenian scholarly research center outside Boston (we're of half Armenian descent). Growing up in Washington, my father was part of the Pentagon, and we would sit around and talk about issues, we were that kind of family. And so, it would make sense to me that we would go into professions like journalism and the law. My big thing was China though, I fell in love with all things Chinese in college and really what I wanted to do when I graduated was go to Asia and find a job wherever. And I sent letters to everybody I knew. One crazy guy who ran a little publication called Petroleum News in Hong Kong not only was the only guy to respond to my letters, but actually sent me a contract to have me sign to come out to Hong Kong and be news editor. So that's how it started for me.
Willy Walker: So, let's focus on China for a moment. You edited a book called “Prisoner of the State,” a book about Zhao Ziyang, the former general secretary of the Communist Party who was sacked after the 1989 Tiananmen Square protests and massacre. I think many of us who don't know China nearly as well as you, view that act in Tiananmen Square back in 1989 as sort of the embodiment of Chinese tyranny. Are we missing a broader story by going back to that just one day?
Adi Ignatius: Well, I mean, that's not a bad place to start. Look, from a Western perspective or from a liberal perspective, Zhao was the hero and the guy who was trying to find a solution to the stalemate other than bringing in the tanks and the live ammunition. The extent to which this story was different, I mean, you think back to students occupying the square for a long time, that it was a problem in Beijing and would be a problem anywhere but what do you do about it? The logic of a communist state is you don't compromise that. If you compromise anywhere, all is lost, you know? Is that true? I don't know. I mean, history maybe have shown that and certainly in 1989, some of the revolutions in the East Bloc show that it's difficult to find that middle ground. But really, by the end of it, it was a power struggle, and it was a power struggle in the (Political Bureau) Politburo. Zhao was on the liberal side, and Li Peng, his counterpart, was on the conservative side, and they were both vying for Deng Xiaoping's ear. Deng at that point had no title, but everybody knew he was the real leader of China. So, it was a power struggle that, to my mind, is a little bit conspiratorial, required a massacre to resolve. And the day before that, the troops and tanks came in with live ammunition. Things are actually starting to dissipate on the square. Students were starting to go back to their dorms. There were still people coming in from the countryside, but it wasn't a seething hotbed of activity. The government sent troops unarmed, jogging in from the outskirts into the center of the city, which brought all of Beijing out on the streets again and got everybody riled up. And then they came back the next day with live ammunition. So, I’m not saying that they manufactured a massacre, but I think at a certain point, a violent resolution was required to resolve the power struggle that had happened at the highest levels.
Willy Walker: And Zhao had been promoting, if you will, a more liberal or a more relaxed response to it. And Deng Xiaoping came in announcing he would impose martial law. When I read that, I was actually surprised that martial law really wasn't already in place at that point. That was a significant shift in Deng’s policy at that time?
Adi Ignatius: You know, they had declared martial law earlier and it didn't really take. I mean, so another lesson is the student movement really captured the popular imagination. I mean, this was all of not just the whole world fell in love with the students and that was one of the first times CNN was broadcasting live around the clock when they could. So, the whole world was seeing this play out. But everybody in China, everybody in the cities - it wasn't just Beijing and Shanghai, it was everywhere. This outpouring of support for the demands, modest, really, that the students were making, but just standing up to a government that had never budged on anything. So those moments in Beijing were wonderful. I mean, it was, my wife was pregnant. She was a journalist to. She was marching with the students in the Tiananmen Square and Chinese would just sort of lock arms around her, protect her body as she was doing this. Old women would throw cartons of milk to her and say, “Tell our story.” It was joyous. And I think people who had covered sort of war zones and protests before had a sense that this was not going to end well, and it didn't end well. Now, was that the only possible outcome? No, I don't think so. I think if Zhao had prevailed in the power struggle, you might possibly have a more liberal China today. But he didn't. And now you have a deal that you can make money in China, but you have to shut up about anything political and that's the deal. And I think the fact is most Chinese people would probably say that's a pretty good deal.
Willy Walker: And on that, Deng Xiaoping is known as the architect of modern China. As you reflect back on the 25 years since you were there and living there, what surprised you the most as it relates to their economic development, either on the upside or the downside?
Adi Ignatius: So, there were many of us who thought after Tiananmen that the center could not hold, the brutality, the massacres of people in and around Tiananmen Square it was just so horrible. The international isolation is sort of what Russia is facing today, that it would impose such a penalty on China and that the party couldn't maintain itself. And I was totally wrong and many of us were totally wrong.
I think after a couple of years in the darkness, Deng realized we have a problem, that we need to liberalize the economy in a serious way but try to keep political control. And I guess it surprised me to the extent to which they've been able to do that. I mean, I think. Scholarship has sort of said, yeah, you do that, you liberalize the economy and there's growth and there's the rise of the middle class. And the middle class has certain desires and values that at a certain point the government can't continue to meet and when that happens, there will be change either violently or peacefully. But no Communist Party can or no one party state can kind of maneuver that. Well, they have. And really what I was saying before, I think it's important for those of us outside of China to know that people in China are happy with their lot, they're happy with their government. I mean, we look from the outside and we're rightly outraged by what's happened in Xinjiang, by the fact that there is no free speech, that lawyers who defend people, innocent people are jailed themselves. I mean, it's terrible. But you know, the Chinese people are not sitting there seething, hoping that their government topples. You know, for most people, this deal, you can get rich. You can have economic freedom. You keep your mouth shut. That's an acceptable deal.
Willy Walker: It's funny, I had dinner on Thursday night of last week with one of my HBS classmates, a gentleman named Will Chen, and Will lives in Shanghai, and said exactly what you just said. He's lived there for 18 years. He said, it’s just part of life, we're just used to it. And I said, how are you on communication? He says, I just figure they're looking at it and that's it. And I go about my business and do what I need to do. So that clearly, to your perspective from afar, that was exactly what he said as someone who lives in Shanghai. Now, on that, he also bemoaned their zero tolerance for COVID and said this whole policy has made life very, very difficult. And in Bloomberg, they just reported that there was an EU Chamber of Commerce survey done last week that said that one in four European companies that is operating in China today is reconsidering whether they want to stay in China due to the zero-tolerance policy, as well as a lot of other issues going on in the world. You and the Harvard Business Review have published extensively about globalization and the scale benefits of a global marketplace, global brands, and things of that nature. Do you think that we're at a tipping point here, Adi, as it relates to more protectionism and regionalism, if you will, rather than globalization?
Adi Ignatius: Possible. I mean, look, it's easy to say you're planning to leave China. It's more difficult to actually leave China. I think what we're seeing is that companies that are there are limiting the investment dollars they're putting into growth as opposed to pulling out. You know, yes, there are people pulling out. Yes, there are people trying to diversify their supply chains. China is just a really good partner. I spoke to guys at Microsoft who make the HoloLens who are just saying “If we couldn't do it in China, we could not do it anywhere else.” And maybe that's hyperbolic, but he just said there's no replacement for it. Would take so long to do that. So, I think China's role in the global supply chain will not sort of end quickly, or overnight, or won't end. I mean, I see a lot of problems with China, but to me, the solution is not a kind of a full decoupling. The COVID stuff, though, is a new twist, and it is just hard to get in and out of the country. And so, it's just huge inefficiencies for foreign companies there.
Is it a tipping point? I don't know. I guess we may be headed toward a foreign policy where we realize that people who we kind of branded as not our friends or whatever - we need to be allies where we can find. And it is my own bias, I guess, really, that I want smart people in the U.S. and China to continue to talk to each other, to continue to find ways to work with each other, because this world is complicated and nobody's all good. You know, and everybody's going to offend some sort of fundamental value that you have. But that doesn't mean you can decouple from everybody.
Willy Walker: You mention that it's a lot easier to talk about pulling out of China than to actually pull out of China. Were you surprised at how swiftly Western corporations pulled out of Russia after the invasion of Ukraine?
Adi Ignatius: Yeah, that's a great question. I don't know why I was surprised, but I've been fascinated watching it. The logic of sanctions is sort of airtight and it's brutal. So, we have a partner, kind of a licensed partner in Russia. They're great. And they're values are sort of free speech, stand up to authority, you know, everything that you would want to identify with. But it's just not tenable for us to have a business in Russia now. It's just not. And it's partly because for economic reasons, you know, their economy is going to be hit. And it's hard to do business, but for all the other reasons that it's just not tenable. For my stakeholders, for my staff, for my team, for our subscribers to be doing business now with Russia, to be sending money back to the Russian state, which in theory is financing what's happening. It's not tenable. And so, there are a lot of unhappy break ups that we've had to do with partners we love, because that is the brutal, un-nuanced logic of sanctions.
Willy Walker: I have to say, I think back and there are plenty of people listening today who are young enough to not remember this. But when Mikhail Gorbachev came to Washington, DC back in 1990 and began the whole process of Western investment in Russia, and you think about 32 years of investment from Western companies into Russia literally evaporated in the course of three months. And in the context of that, Adi, what's your thought as it relates to Putin and given the position he's in now and having lost so much foreign investment, he can't unwind that. He can't get McDonald's or Starbucks or any of these other companies that decided to pull back all of a sudden, turnaround on 32 years of investment. And obviously, they all didn't go the day that Gorbachev showed up in Washington to meet with President Bush. But my point is just he sort of seems like he's in a corner here where he's lost all the good that he created for this move and therefore, he has to keep forward with the war to win what he wants to win because he really has no other escape hatch. Is that the proper way of looking at it, or do you think there's some other alternative outcome?
Adi Ignatius: Don’t know. I think Putin will insist that there's an outcome that he can describe as victory. And just from what we know about him, he's not going to suddenly say, “You know what, that was ill-conceived, I'm sorry to the mothers of all the Russians,” you know, it's just not going to happen. So, what does the end game look like? You can speculate as easily as I can that there’ll be a more formal seizure of parts of eastern Ukraine to really come under Russian control.
I could imagine in a conventional scenario where war stops, now it probably won't be sufficient, say, for the West to lift sanctions. So, Russia ends that, and continues to be in isolation. And so, I would watch, what do Russia and China do? I mean the East has emerged as an alternate market for Russian raw materials as the West has cut them off. You know, Russia and China have this access of I don't know what exactly, anti-West, or something. I would be careful not to push China into a position where they feel like the only ally they have is Russia and if that becomes an alliance, that doesn't seem like a good outcome for the West to push China or to contribute to China being completely out of the orbit. I mean, it doesn't feel like we're anywhere near that endgame. And there's a lot of fighting still to happen.
Willy Walker: It feels to some degree as if India is the one right now who's really helping support Russia. And they're not quite in that same position of being the pariah. I don't want to call China a pariah. They don't have the same political pressures on them between the United States and India. And yet at the same time, they're the ones who seem to turn their economy on to Russia so dramatically over the last three or four months.
Adi Ignatius: Yeah, absolutely. And I know that's frustrating to U.S. policymakers. I think it makes sense to Indian officials in terms of India's self-interests. And that's as far as the conversation goes. And they just haven't been willing to join as a symbolic or a moral partner in standing up to Russia.
Willy Walker: So, I'm assuming that you met Putin when TIME made him Person of the Year and when you were writing about him. Anything from looking back on those meetings and interviewing the Vladimir Putin that you know now in hindsight says, ah, we should have known that this was coming long ago?
Adi Ignatius: Well, the Putin of 2007 seems very similar to the Putin of 2022. What really animated him and what he spoke most passionately about and even aggressively to us, even though we were journalists and not representatives of NATO or even the US Government was really a sense of humiliation, a sense of lost pride, a sense that the West didn't respect Russia, that NATO was being strengthened and enlarged to hurt Russia, to hem Russia in. That there were Russian speakers, you know, ethnic Russians, who, when the Soviet Union broke up, ended up outside the Russian border, and that these people were being mistreated and that this was the real human rights violation. And it doesn't really square with what seems to be happening. But that's the way he talked then and that's exactly how he talked when he launched this most recent incursion into Ukraine to protect Russians who, you know, in his mind were being treated badly.
That sense of lost pride, you just can't overstate it. I mean, at one point I threw out a softball question and I just said, “What's a misconception about Russia that you would like to correct?” And he really got agitated and was just talking about how, “You people talk about us as if we're primitives, as if we just descended from the trees, sand in our beards. And it was just a weirdly colorful but clearly pained expression of what it felt to be Putin, former KGB guy, who would like to restore the USSR and maybe the Russian empire and what it felt like to suddenly be viewed as a kind of a lesser state, an unimportant state. And that's the battle he was fighting rhetorically in 2007 that he is fighting militarily now.
Willy Walker: You've met a lot of foreign leaders, and there's always the office to be impressed with or intimidated by. Was Putin as an individual, if you will, increasingly intimidating, just given his background in his own demeanor?
Adi Ignatius: So, he was very intense. There were several of us who would come in from New York for this interview at his dacha. We're sitting with him. We were there for three and a half hours. And it was just intense. We commented later that he didn't, we couldn't remember seeing him blink. And the only time he laughed was to make fun of a couple of us in a biting way. And we were TIME magazine, you know, half of what we do, we're trying to be playful, and ask, “What's your favorite sport?” And he just wouldn't go there. It was all very, very intense and all about this kind of pain and wounded pride that we were dealing with.
I remember our photographer, so we had Platon, the great portrait photographer of our era, take the cover picture of Putin and some of the inside stuff. And I remember he was nervous afterwards. He was like, “Are we going to get arrested?” I was like, “Why would we get arrested?” But it was just the kind of intensity that just made him wonder whether we were somehow in danger. And that was kind of the tone. Platon always has this device to try to get his subjects to relax because Putin gave him like five minutes to shoot a cover portrait. Platon always asks people what’s their favorite Beatles song because the Beatles are so universal and just it gets people's minds off the photo. And Putin said, “Of course, Yesterday, which just seemed kind of so appropriate.
Willy Walker: Did you work that into the article on him?
Adi Ignatius: We did. The perfect kicker.
Willy Walker: So, I want to stay on Person of the Year for a moment, because it reminds me of when my mother was asked by TIME to go photograph Steve Jobs back in 1982 for Man of the Year. And they also sent a crew out to cover Bill Gates. There was the question of do we go with software, or do we go with hardware? TIME for the first time ever, instead of having at that time it was Man of the Year went to and then evolved to Person of the Year. But at that time, they were with Machine of the Year, and they put the personal computer on the cover and had Bill Gates and Steve Jobs as the main protagonists inside the magazine. TIME clearly called it right there, Adi, as it relates to not sort of saying Gates was going to be the image of the future or Jobs is going to be the image of the future. As you think back on all the various people and candidates that you looked at for man, woman, or person of the year, what did TIME miss? What was it that hit the editing table, if you will, and hit on the floor that should have been Person of the Year?
Adi Ignatius: Well, the obvious one was 2001. What is Person of the Year? The idea is the person who is affected the news most for good or evil. And in the past years, TIME's history goes way back, Hitler was Person of the Year and that never felt comfortable. So, they put Hitler with an X over his face or something like that. Just to make it clear this is not an endorsement, but this does fit the criteria. So, in 2001, Osama bin Laden, of course, should have been the person of the year in terms of affecting the news, affecting the world, for better or worse, more than anybody else. I don't think we had the “guts” (if it’s the right word), maybe we had the good sense not to do it or the good taste not to do it. But the idea of this moment when the world was still reeling, to put Bin Laden's face on the cover of TIME magazine, Person of the Year just seems untenable. We got a lot of criticism for that. We ended up with Giuliani at that moment rose to the occasion, and it wasn't an insane choice. But I think plenty of people realized we had chickened out might be the right word, that it just wouldn't have gone well with our subscribers and our sponsors. It just didn't quite feel right in our gut. But it was not the right decision by the criteria we had set, it should have been done.
Willy Walker: Was there any thought to change it to either movement of the year or influence of the year and have it been terrorism more broadly than just putting Osama bin Laden on the cover?
Adi Ignatius: There might have been, sometimes those general things sort of backfire. It was 2006 that the Person of the Year was “You”. We correctly put our finger on the moment where all this DIY content was sort of happening and we were all creators. So, it was cool, and it was clever, and the cover image was sort of a mirror thing. And people hated that, it just didn't work.
Willy Walker: Has it cost you a huge amount of money to manufacture that?
Adi Ignatius: Yeah. So, we used that mirror stuff and we put it in the editor's note that this was Kevlar, and the thing went so badly that the DuPont, which makes Kevlar, had us write a note. They made it clear that it is not Kevlar. We are not associated with this, that is a different product altogether. So, I don't know. So sometimes those things are clever, but they don't land very well with the readers.
Willy Walker: So, in 2008, you were editor of the book “President Obama: The Path to the White House”, which contained behind the scenes photography by my mother's colleague, Kelly Shell. As you think back on that book and the subsequent eight years of the Obama presidency, what one word would you use to describe the Obama presidency?
Adi Ignatius: Disappointing?
Willy Walker: “I led you there, but I was expecting something,” along those lines?
Adi Ignatius: Yeah, I don't know what I could say. It was thrilling when he was elected. We published that book because he was elected. He won the Nobel Prize before he even took office because it was such a thrilling moment. He is such a remarkable person. But disappointing in terms of what was accomplished. I mean, look, my views are very conventional on this, but Obama seemed disinterested in the work that went into complicated policymaking and working with people he doesn’t like. So, I remember not long after Obama finished the second term, I ran into Leon Panetta, who had been his CIA chief, who had been his defense chief and who had been Bill Clinton's chief of staff. And he just said, simplifying things, but he said all Obama had to do with some of these Republicans who didn't like him was to take them out to play golf or give them a ride on Air Force One or something like that. That's just some basic politicking that could have strengthened his presidency. He could have been more effective. That may be a simplification, but I think he put his finger on something that Obama wasn't very interested in that. The deck was stacked against him. The Republicans from day one said, our mission is to stop anything this guy tries to do. So, it's not like it's easy. But, you know, the two terms were disappointing.
Willy Walker: Now Virginia Governor Glenn Youngkin was elected, I said to a number of people “he could pull an Obama.” By saying he could pull on Obama, my comment was saying a newly elected governor, Obama had just been elected to the Senate for the very first time. And so, if you look at senators and governors as the group of 150 of the most senior offices, I view them all in kind of the same bucket, if you will. Is there something that was unique, Adi, as it relates to Obama's ascendancy that will be almost impossible for someone else to replicate? Or is it fair to think that someone who like Youngkin – what was unique either at that time or Obama as a candidate that allowed him to jump from his first national election to being elected President of the United States. Is that just too big a bar for anyone else to jump over and obviously you can say never, but I'm just saying, from your knowledge of all that, was that truly unique or could someone else go and pull it off?
Adi Ignatius: Anything's possible. I mean, the rise of Trump as a political candidate was in some ways, you know. I think when he started his campaign, the Washington Post was covering the Trump candidacy in the Style pages because they thought it was a joke and before they realized it, he was President of the United States. So, yeah, anything's possible. Obama was a pretty special character, though. I always think back to the 2004 speech that he gave at the Democratic National Convention where he said, “I'm a skinny kid with a funny name” and then he just blew us all away. I mean, that helped to have had kind of that under his belt to suddenly arrive on the stage and people noticed and that gave him a boost that was sort of behind the scenes. He’s generally such an amazing speaker. I mean, those days. You know, primary after primary where Obama would come out and talk to the American people in ways we sort of never heard before, sort of the emotion, the passion, and the poetry. So, you know, there aren't a lot of guys like that. But I mean, anything's possible. And I like that observation. I don't think the Democrats know what they're going to do in the next general election. Nobody seems excited about Biden again. So, something has to happen, and it may be that somebody has to come out of the woodwork and have a meteoric moment. And maybe it's Youngkin.
Willy Walker: We'll see. So, let's switch to the Harvard Business Review.
Adi Ignatius: Oh, yeah.
Willy Walker: I love everything we just talked about, I could keep talking about it for a long time, particularly given that, if you will, common history with TIME magazine with my mother.
So, I remember when I was doing research on business schools back in 1990, and the Business Week book on the Best Business Schools started its piece on Harvard Business School, something along the lines of Thump. That's the sound of the Harvard Business Review arriving in mailboxes of CEOs across the globe and the reason why the Harvard Business School brand is so strong. And so, in that context, how do you view the HBR? Is it a marketing arm of the Harvard Business School? Is it a public record or consolidator of all the research that goes on at both Harvard University as well as Harvard Business School, or is it an independent journal of business practices or all of the above?
Adi Ignatius: So first of all, we are 100 years old this year.
Willy Walker: Congratulations!
Adi Ignatius: Thank you, we're getting ready to celebrate. I haven’t been there the whole time but thank you. So, when HBR was set up 100 years ago, it was expressly done so then it remains true today that it's not meant to be a vanity publication for Harvard Business School. It's not meant to be a publishing arm of HBS. So, it's really your last point, editorially, our goal is to acquire and publish the most important ideas in business. And as it turns out rightly, a lot of them come from Harvard Business School because there's a lot of really smart people there and they're doing a lot of interesting research. But that's maybe 20% of what we publish. The rest is coming from people. And that's essential. I mean for us to be credible, for us to have value, there has to be a sense that we're publishing the best ideas, best research wherever they come from.
Willy Walker: And talk about that for a moment, Adi, in the sense that when you were at TIME, you had a group of writers and you sit around and your whiteboard various things that they ought to cover, and you give them the authority to go and spend time researching something. And you've also a timeline on it saying, let's get that written this week, or let's start doing a feature piece that's going to take you three weeks or whatever the case is. How do you manage the content supply at HBR, given that you don't have a team of writers who go out and cover things for you? You're reliant upon consultants at McKinsey and Bain, professors at Harvard Business School, as well as all the other business schools and then industry for content to put into the HBR.
Adi Ignatius: So that's absolutely true. My editorial team, they're editors, not writers. Very little of what we produce is written by us. So, it used to be that we sort of produced what we produce from the inbox. Stuff would come in and we sort of search through it and pick out the best stuff. We're more proactive now and we pay a lot more attention to, you know, it's hard. Well. So, we still go thump. All right. We have six print issues a year, but most of what we do is digital. We're reaching. 50, 60 million uniques a month digitally, and that's across all kinds of platforms. And we have 13 million LinkedIn followers. There's a whole lot of things that we do and ways to do it.
But in many ways, the coin of the realm is still the sort of big think, research-based pieces that are in the magazine. And we have a long lead time. It's hard to be newsy, but we want to be in the zeitgeist. We want to anticipate where people are. And HBR didn't used to do that. There was just a feeling that you got Fortune, you got Forbes, you got whatever, we’ll do timeless. Everything will be relevant maybe forever or for a generation. That doesn't feel right anymore. I mean, in part because we're also digital and have the ability to deliver things quickly. But it's a fast-paced world and things are changing quickly, and we need to deliver information for where people are right at this moment. And so right this moment now could be, you know, how to thrive in a recession or how to avoid a recession or something like that. The topics that people are really trying to solve now, how to create and sustain a diverse workforce. You know, that has become an imperative, certainly in the U.S. in the last couple of years. So, we have to be finding authors, finding research, finding ideas out there on these topics in a really timely way. So, in that sense, it's my job and the job of the editors here has changed a lot.
Willy Walker: So, on that, I view HBR articles as being what I would call “long tail articles.” There are on all the issues that you just raised, but people's consumption of information has gotten increasingly short, down to 140 characters or 160 characters in a tweet. How do you manage that consumer drive towards sort of shorter and cleaner to where the HBR comes from of doing really heavy research and rolling up your sleeves and having long format articles? My assumption is the actual article length has gotten shorter. Is that a fair assumption or is it if I went back a decade and looked at the length of the average article in the HBR, it'd be the same today as it was then?
Adi Ignatius: Basically, in the old days we only had long articles. Nowadays the long pieces are still pretty long. But in addition to that, we're doing digital, short 800-word digital pieces. We're very active on Instagram. I mean, the answer to your question is to give people the nugget. We send out a management tip of the day. You know, our Instagram feed is really lively. You know, give people a nugget that has value, but then provides the link to go deeper. And if you want to go deeper, then you have the full piece with the research, with the methodology, with all of the examples. So, I think a lot of what we're doing is putting these ideas into different packages on different platforms that serve audiences in different ways.
Willy Walker: And as you've broadened the various media, how important you just talked about the number of LinkedIn followers. You're talking about video. You're talking about the actual thump that goes out – at the end of the day, as you look at revenues to the HBR, is it all back to the thump or have those other new investments in a broader media platform started to pay back dividends as it relates to advertising revenue or general viewership?
Adi Ignatius: That's a good question. The publication business, you're getting revenue from a lot of different areas. In the old days when I was at TIME magazine, it was an advertising play. I think at our peak, we had four million circulation. Crazy high. And then you would sell ads based on that incredible rate base. Now, you are churning two million of them every year. So, imagine the cost of replacing two million subscribers every year. Not a pyramid scheme, but it is a tough business to keep going. At a certain point, the advertising goes away, you're left with a problem because you don't necessarily have a devoted subscriber base.
So HBR is different, we are all about subscriptions. Yes, we have advertising. It's very, very important to us. But the main revenue and the most important relationship we have is with subscribers. We have 340,000 paid subscribers now, by far the highest level we've ever had. So, the relationship with them is paramount. So, we have to keep delivering content. Look, HBR is nobody's first read. It's probably nobody's second, third, fourth read. So, people come to us to solve a problem or to deal with an issue or to get some sort of knowledge. So that puts pressure on everything we do to really have unique and often practical value. Like read this article. This will be an idea you can apply to improve your career or to improve how your company functions.
So back to your revenue question, print ad revenue is declining. We do six issues a year instead of 12. But digital revenue has picked up. We do a ton of webinars that are sponsored, like this one where there's sort of intimate conversations with interesting people. And those are sponsored. We found ways to generate new sponsorship money as some of the traditional ones have gone away. But there is no relationship more important than the one with our readers and subscribers.
Willy Walker: So, on that, at the top of your Twitter feed today or yesterday, when I looked at it was a new book by HBS Professor Keith Ferrazzi titled “Competing in the New World of Work.” And Keith presented this past weekend at my reunion, and it was a fascinating discussion. But one of the things that he focuses a lot on is remote work versus in-person work. And as you well know, Adi, this is kind of the issue du jour of everybody from Jamie Dimon saying you're back in the office tomorrow or Elon Musk saying if you're not back in the office, you're not gonna have a job at Tesla anymore.
It seems like everyone is debating this issue when it really is a personal issue in the sense that every company is a little bit distinct. Every company's relationship with their employees is a little bit distinct, and the needs of their employees to deliver their product or service are all distinct. Yet we all seem to be looking for this homogenous solution to an unsolvable question. Is that a fair view of it, or do you actually think that the research is going to tell us that there's something all of us should be doing and we haven't figured it out yet?
Adi Ignatius: I think the research will probably tell us maybe what we should be doing, but we definitely are not there yet. I mean, the most cited bit of research about work from home is a study that's almost a decade old by Nick Blum and others at Stanford who looked at it. It's actually fascinating. They looked at a Chinese travel company. It was like 16,000 employees. And did this research work where a number of them were randomly assigned to work from home and then others to work from the office over an extended period of time and then let's see what happens.
What happened, not surprising now that we've lived through this, is that productivity, however we measure it, went up. Absolutely up. But it was partly because there were no commuting times. But not just that, maybe we were working long hours, but productivity went up, job satisfaction went up. So, some sense of your value, your work life balance, something like that went up. What did not go up (and this is a problem) is promotions. So, the people who were remote were promoted far less than their counterparts who were at headquarters. So that's instructive maybe, or that's the type of unexpected consequence that could come out of something that is producing good results in some ways. But troubling results or at least something we have to deal with. Look, nobody's figured it out. There are plenty of employees who are leaving us and other people because they are finding jobs where they can be 100% remote. I think there are people who didn't realize that was important to them, who now feel like it is essential in what they do. So that's the reality. Once that kicks in, then you can think about, alright, well if I have five floors in the building then maybe I have people come in one, two days a week and I can get rid of a couple of those floors. So that is driving some of the strategic calculation.
But mostly what people aren't answering is what is an office for? And that's the most interesting question. The things we publish, it's a tool. Think of it as one of the tools of your toolbox. It's not just a place where people go to work every day. We're past that. The more thoughtful thing about it is it’s a tool. If it's a tool, what do you do? You have to bring everybody in, and you have fun together. You have hackathons or what. Nitin Nohria, the former dean of HBS, actually wrote a piece saying, “think of the office as a clubhouse.” And that's more we come together to connect, to celebrate and to create and sustain culture, but sort of implying that work we can do anywhere, we can do it from home. So, you're right. Companies are all over the place. You must be at work. We don't have you ever work. I mean, that's the range, right? We're in the middle. We have people coming in two days a week, but we don't feel strongly that that's the answer. We're really trying to figure out what the answer really is. I think a lot of people are as well.
Willy Walker: That Stanford study on the Chinese travel company is fascinating. I was in California three weeks ago meeting with one of our clients, and I sat at lunch next to a young gentleman who graduated from USC two years ago. And so, he's an analyst at this company. And I asked him “How much are you coming to the office?” He said, “Well, I've come into the office pretty much throughout. I mean, California shut down the office. So, it was against the law for us to come. But the moment we could come back to the office, I've been in the office. He said he has two roommates, one who works at KPMG and the other one who works at EY. And he said, “Neither of them has even thought about going back to the office because all the big accounting firms are allowing people to work remotely.” And I sat there and I turned to him and I said, “Five years from now, when you're interviewing for some new job, I can almost guarantee you that a potential employer will ask you whether you were in the office or remote, and it will potentially even become part of your resume and that you having been in the office, will stand a much better chance of getting that promotion in that new job than your two roommates who were at home in your apartment, having a great time now, doing all their work remotely, being very, very productive.” It was funny because you could see him sort of grin and sort of be like, “Wow, actually I've been doing that. That actually might benefit me in five years. I just thought it was what I needed to do to be successful at the company I'm working at today.”
And so, I hadn't heard of that study, but I can only tell you that as an employer of 1,400 people, I can guarantee you that at W&D, a number of years out. We will be looking for people who are in and learning rather than being isolated and just being, if you will, very productive.
Adi Ignatius: That's fascinating. Well, and it may be that the people who work at home would, even if that's clearly the case, will still say, “yeah that was a fair trade off.”
Willy Walker: Yeah, very much so. It might be. But I think also one of the issues here in the professional services and banking world, you cannot speak to somebody who is either in my industry or on Wall Street and not have them say “the way I learned was through the course of hard knocks, sitting there with my boss asking me to do something at 10:00 at night. And I stayed in the office until 2 a.m. to get it done. But that's where I really learned.” I actually had a colleague to help me with the model and to answer the questions that I didn't know. And so much of that casual learning is not happening in a remote environment. I'm not trying to be monolithic, in my view, if you've got to get back into the office because there's plenty of great stuff that gets done from home and you and I are doing a Zoom call here rather than me flying to Boston to do this face to face. At the same time, I do think that that point as it relates to promotion and career path, is a very distinct one that many people in a very tight labor market today aren't fully realizing the implications of that.
Adi Ignatius: Yeah, there's another interesting thing that's happening and that's so a lot of companies, ours included, are trying. This has become a bigger issue again since the murder of George Floyd, but are trying to really create diverse, equitable, inclusive workplaces. We're sitting in Boston and we're seeing a fairly homogeneous pipeline of people locally. When we start to say, look, we can hire people anywhere that could be based in New York, Chicago or wherever that helps us with tapping into pipelines of diverse talent. But then it's a question. So, then we're more diverse on paper in terms of people's backgrounds. Are we more diverse as a culture when we're distributed and remote? That is something we're dealing with to bring this clubhouse idea. We need to bring people together physically on some cadence, even if it is to go to an island and do archery all day or something. But it's because it's a big challenge. And if we weren't allowing people to work remotely a significant amount of time, we would be losing people. I mean, that is just a reality. If we were one of these companies that you have to be here, I think that would be a problem for us right now, at least with the type of talent we're facing.
Willy Walker: We'll see what a softer labor market does for those statistics once we get to it. Unfortunately, from the conversations that I had in Chicago over the last two days at that conference, it sounds like that's coming to a theater sooner than we would expect or want it.
So, you published a piece by Yael Eisenstadt from Cornell entitled “How to Hold Social Media Accountable for Undermining Democracy.” And I'm just curious, Adi, as it relates to how do you draw the line between business issues and political issues and the role that corporations need to be playing in our world today as it relates to either speaking up on these issues or not, and how much you're having your authors or researchers write on it or not?
Adi Ignatius: So, it's a great issue. I think every CEO is wrestling with this. To what extent do they want to they want to be activists? To what extent do they need to be activists? I mean, ten years ago if you asked CEOs about getting involved in social issues or even political issues. Most would say, I don't want to do that. If I speak out, half the people will support me, and half my customers will be appalled. It was Michael Jordan who was asked to be more of a kind of activist on social issues. He said, “Republicans buy sneakers, too,” or something like that. So, you know, that was the prevailing view. Now, it's not. CEOs are feeling more like we need to solve society's problems, feeling it passionately, but partly because of the nature of this connected economy, the nature of Twitter. You know, silence is not an option. So, if something happens, whether it's George Floyd's murder or Ukraine or something like that. You can stay silent and say, this is not my battle, but motives will be ascribed to you by the digital masses. You might as well take control of the message and you have heard this many times, but people want to work for companies that share their values. Customers to an extent, they say it more than they probably actually do, but they want to buy products from companies that share their values.
It’s just something different where in the old days, CEOs would say, I'll stay out of this. It's just a different equation now. You know, for us, I'm not afraid of politics. When Trump was elected, there were people who wanted us to write “This guy's ridiculous.” I was like, “No, I'm not going to publish that.” If you want to attack a policy position and put up an alternative, that's fine. You can say this is a misguided policy. It's nuts. Here's something. That's fine. But if you have an attitude like, well, obviously any educated person knows that this guy is… like, I'm not going to publish that. That's not what we do, and I wouldn’t support that. Now, we also have realized that there are certain values that we kind of believe in as bedrock values.
The point of HBR is not to make rich people richer. That may be a consequence of some of what we publish, but that's not why we get out of bed every day to do what we do. You know, what we do is to try to make companies, institutions more effective, more successful over the long term. It's not just woke politics, but research shows that companies that are more diverse, companies that have a sustainability imperative, companies that are fact-based decision makers. Companies that think for the long term are more successful over time. So those are sort of, to me, bedrock values. Now, they've become more controversial than I would have thought in recent years. But that's okay. I'm comfortable if some people feel that we're taking our eye off of the prize. And the prize is, I don't know, share price or something. Okay, fine. But this is what the research is showing us are kind of essential bedrock values for long term success.
Willy Walker: So, two of your covers over the last 12 months have been, one, build the leadership team for transformation. And the other, how good is your company at change? I guess the question that I'd have as CEO of a publicly traded company, do you think things ever slow down?
Adi Ignatius: There are academics who fight against this idea that the pace of change has never been faster, that is always what we perceive and then it's demonstrably not true. I just don't buy that, you know, or whatever, maybe it's true, but maybe it's all mirage, but it sure feels like the pace of change has never been quicker. And if you look at the skills that people need to develop, let's say, in college or early career to be successful and to be hirable and all that. I mean, sure, things like coding and data analytics are important, but the number one sort of general skill is adaptability. That there's an assumption that the business model and the strategy of a company is going to be not just tweaked, but sort of upended within a few years. So, you want your people to be resilient and to be able to get excited about the possibility of change. To understand all the sort of digital design thinking stuff where we're going to iterate to the future and we're going to experiment and we're going to learn from it. So, this stuff is all about rapid prototyping, rapid change, that it's not just for startups, it's for established companies as well. So that is adaptability. And an acknowledgment that change is going to come and go with it and help define what it is for your company is really a core skill right now. So, I guess it's a long way of saying no, I don't think the pace is going to change, but at least we're trying to prepare ourselves for it and to hire effectively for it.
Willy Walker: I will give a plug for an article in this month's Harvard Business Review called The C-Suite Skills That Matter Most by Raffaella Sadun, Joseph Fuller, Stephen Hansen, and PJ Neal as a really good article that summarizes many of the issues that you just highlighted as it relates to what the needs are for C-Suite executives going forward.
Final question. This past weekend, when I was at my 25th reunion, HBS Professor Joe Tango made this fantastic presentation on his final class every semester when he teaches students where he goes off of what he's teaching them on entrepreneurial finance and basically tells them life lessons that he wishes he knew when he was a student at HBS. And now, as a middle-aged professional/professor, has the wisdom to look back and say, “Boy, if I'd only known this when I was 26 years old, what a difference it would have made.” As you look back on your career, Adi, what are the two things you wish you'd known then that you know now?
Adi Ignatius: Well, one of them was I sort of thought money didn't matter. I don't know how this happened. It may have been that I went to a Quaker College or something, but I just wasn't interested in money and sort of thought people were just chasing false gods. So, I'm not the type of guy who would ever look on Wall Street. None of that is interesting to me. But I think I undersold myself and undervalued my skills for years because I just thought money was something you don't talk about and don't worry about. So that is something just to kind of undervalue what money means both symbolically and its utility as a thing.
The other thing, I guess, as a young person, I was really sure about what I believed and maybe arrogant about it sometimes. And you know, at this moment, I just feel like I'm so sick of people's certainty and their stridency. And I'm just sick of everybody's opinions. And I guess I feel maybe guilty for maybe being that type of person early, hopefully, and not so much now. But I just feel like we all need to kind of lay off like, I'm not so interested in your stride and everything's a hot take. So, everybody's competing to get attention with a hot take on something and it really adds to the idea that we're talking past each other. So, I kind of wish I'd understood that earlier as well.
Willy Walker: I love that you say that as your closing point, because Arthur Brooks this past weekend in his presentation said that as he gets older, he's in this shedding process. And he said two years ago he gave away 75% of his suits. And he says he's done really, really well with just 25% of his former wardrobe in making it so he looks okay, and he only really needed the five suits he hung on to rather than the 20 he had previously. But the other thing he said was this past year, he really got ambitious and gave up on 50% of his political views. As I've repeated that Adi to a number of people, they've all said, “Well, it depends on which 50% he gave up on whether it actually was good or bad.” But the point being is here is someone who used to run the American Enterprise Institute who had some pretty strong political views and Arthur's point was, “I feel like I'm more understanding. I feel like I'm more loving. I feel like I'm more engaged with the people I talk to. After giving up on those 50% of very hard and steadfast views as a Republican and running AEI.”
I just sat there and said wow if the former head of AEI can give up on 50% of his political views, maybe I ought to think about giving up on 50% of mine. I think that's really interesting that you say that.
Adi Ignatius: Arthur Brooks for President!
Willy Walker: Yeah, there you go! Exactly. You've been extremely generous with your time. I loved our conversation. Thank you for taking the time to join me today. To everyone who joined us, I hope you enjoyed it as much as I did. We'll see you again next week. And Adi, thanks again.
Adi Ignatius: Yeah, thanks Willy, that was fun.
Willy Walker: Take care.