Trump’s chilling effect on big business, with Harvard Business Review’s Adi Ignatius

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1:26You know, you could talk about whether CEOs speaking up on an issue, whether that's a good idea or not. But the idea that, well, they wouldn't dare in this climate because it's too scary. You know, that's China under the Communist Party. I mean, that's somehow an unintended consequence of where we are right now.

1:51That's Adi Ignatius, longtime editor-in-chief of Harvard Business Review. After 16 years at the helm, Adi recently passed the mantle, but today's episode is much more than an exit interview. It is an eye-opening strategic examination of today's unprecedented business climate, from AI's impact to Elon Musk, to the evolving role of what it means to be a business leader. Adi is refreshingly candid, sharing lessons and unfiltered assessments. I think it's one of the most important, insightful episodes we've done, So let's get to it. I'm Bob Safian, and this is Rapid Response.

2:34I'm Bob Safian. I'm here with Adi Ignatius, the longtime editor-in-chief of Harvard Business Review and an old colleague and friend. Adi, great, as always, to chat with you. Nice to be on with you. Thanks for doing this. You and I first worked together at Time Magazine as executive editors. You have then ran HBR for more than 15 years before turning over the reins to Amy Bernstein earlier this year. Is it a bittersweet moment passing the mantle or are you content? I know I had mixed feelings about leaving Fast Company. So yes and no. I mean, it's, you know, it's nice to be editor-in-chief. I reached a point in my career though, where I didn't want to have direct reports.

3:14I didn't want to be sitting in meetings with the board. You know, I realized what I needed at this moment in my life was to get back to the reason we all got into this profession in the first place, to write, to report, to create content. So I definitely have a pep in my step. And yes, I missed some of the trappings of power, but I'm really happy with the shift. You've covered so many seminal, like tumultuous moments, wars, 9-11, market collapses, regime changes. 2025, the current climate, it feels like we're at a threshold, even though it's not quite cataclysmic. Do you have a thought, a feeling about what we've seen so far in 2025?

4:01So there are some indexes that tracked fear, that track fear, you know, and the fear index has been kind of off the charts in ways that it had only been during the kind of early peak of COVID and during the financial collapse of 2008. So, you know, to the extent we can measure something, yeah, we're in a strange moment. I don't mean to make much of a plug for HBR, but, you know, we've just launched a new product called HBR Executive, which is very much leaning into the fact that this, you know, it's always hard at the top, but this is a really difficult moment to lead, partly because AI is out there and it's going to disrupt us all.

4:38And we're not sure when, and we're not sure how or how much, but it will. So that huge uncertainty there. And then the, so maybe what you're hinting at, the kind of political and geopolitical uncertainty that is just off the charts and really makes it difficult. So our point is, is, you know, not just to say it's uncertain out there folks, but to say it's uncertain out there and there's things we've never seen before, but we have lived through moments in the past of, of enormous uncertainty and there are ways to lead through it. And we will try to share some of those best practices. Do you have a framework or a philosophy about how you personally think about change?

5:18So if there are two big uncertainties now, and let's say technology, but especially AI, and then the geopolitics, I think with AI, you know, so, I mean, I'm not an expert on on anything, but I, I talked to a lot of people and, you know, Kareem Lakhani at HBS, who's really an expert on, uh, you know, AI, generative AI in the workplace. I mean, his, his big thought is that CEOs are talking about AI all the time. They're talking to their boards, they're talking to their shareholders, they're sounding knowledgeable. And he says, in fact, they're not, they're not, most CEOs are not even remotely knowledgeable and that it's really important that they get that threshold of kind of competence and understanding.

6:03Because, you know, if you're in the camp that thinks AI is truly going to change everything, and I am until proven otherwise, you know, then the transformation needs to be driven from the top. So it needs to be understood, you know, from the top. So the technological part is you've got to get involved and it has to be CEO driven. With politics and geopolitics, I mean, you know, in a sense, you have to have your own foreign policy, right? every company needs to really pay attention and think there's so much baloney coming out of Washington, but then some of it sticks, right? Some of it is not bluster, but is actually significant.

6:36So, uh, I think, you know, having either connecting with people who know, or having people on your team who really know and know how to kind of tease out what's real versus what's not real, what you need to panic about, what you don't need to panic about is really essential. So you can't just sit back and try to follow the news cycle because the news cycles are, are insane, right? And not helpful. So I think those are a couple of things, a couple of ways to think about it. I mean, there's a lot of scenario planning. I talked to a Brazilian CEO today, right? So they're suddenly threatened with enormous levels of tariffs that are purely personal.

7:14Brazil has a trade deficit with the US and yet Trump is threatening them with enormous tariffs. It's purely personal, political. He doesn't like Lula and he liked Bolsonaro and He's trying to kind of manipulate Brazilian politics and how its Supreme Court works. So, you know, what do you do with that? So this CEO, they are doing a bunch of scenario planning. If tariffs come in at 50 percent, if they come in at half that, if they come in at 10 percent, and they're not sure what else to do because it is just enormously uncertain. Well, and I guess all these institutions have to develop the capacity to be more flexible than maybe they've needed to be before because things are so unstable, right?

7:58Which I guess AI maybe provides an opportunity to do if you can get your organization to handle it the right way. I guess. Yes. You know, we live through a period. I mean, it's not like this is the worst time in the history of the world. It's definitely not. There have been periods that were, you know, much more uncertain because there was, you know, broader global war, etc. Okay. But we had a kind of post-World War II order and predictability that obviously had winners and losers and there were terrible tragedies along the way. But there was a basic, I don't know, rules-based order at least in the West and you kind of knew what to expect.

8:40So now you don't and the U.S. has a president that doesn't like rules-based order. So you've lost a certain reliability or dependability on what America, the world's most powerful country, stands for and will be advocating for. So it's tough. It's slippery. And, you know, I know the knee-jerk thing is to say, well, China is the big winner. And I think it's important to really analyze that. But I think it's possible China is the big winner as the, you know, kind of global economy and global, you know. trade protocol is restructured. I think a lot of this could be to China's benefit. For our listeners' benefit, you spent a fair amount of time in China.

9:25You were a Wall Street Journal bureau chief in Beijing. You ran Time Asia. You were also a bureau chief in Moscow. So you've been inside some of these places that people are trying to figure out right now. Are there ways that you think people understand or misunderstand what's going on in China, what's going on in Russia, and what the impact is going to be on us? So Americans, I think, by and large, misunderstand China. Americans, by and large, are not comfortable with the repressions that exist in China with a sort of strongman government. And, you know, that's all fine. China is booming. I mean, you know, you go to a Chinese city and it is, you feel, wow, I'm in the future and America is not in the future, right?

10:10I think there's some people who associate the repression in China with a sense that people are listless and want to overthrow their government are unhappy. And it couldn't be farther from the truth. I mean, China is booming. If you think about where the U.S. is moving away from sort of cleaner fuels, China has its foot on the accelerator. I mean, it is really dynamic, not just big cities, big buildings, but developing a kind of the future economy. and we're still in the sort of fossil fuels past. So I think there's a general misunderstanding just how rich and developed and dynamic China is, even though it has enormous problems, including unemployment, including fiscal issues.

10:58It's certainly not perfect, but I think that's a misunderstanding. Russia, I mean, God, Russia has squandered opportunities to develop its economy since the fall of the Soviet Union. I mean, really, you know, has so many resources and the ability to be an economic player and instead has just fallen victim to corruption and sort of stupid wars. I think that's pretty well understood. You posted something early this year, around the time of the World Economic Forum, about Davos man as compared to what you called Mar-a-Lago man. Do you remember this? Yeah, yeah, yeah. Yeah. So I was trying to capture, so, and Bob, you think about this stuff all the time, you know, so there was, let's say there was 50 years of kind of Milton Friedman sort of dominated philosophy to management and basically, you know, shareholders are what matter.

11:55And you could just measure that. And if managers are also aligned to benefit, if the share price goes up, then that's great. Then your shareholders and your managers are aligned and, you know, the other stuff will fall into place. And then, you know, 10 years ago, whatever, suddenly people got more serious talking about stakeholders more broadly. That it's just, it's not enough to worry about share price. You have to think about your employees and your customers and sustainability, the planet. And that seemed pretty entrenched. Although I'd say the world was searching for the kind of theory, right, that was as simple or as easy to grasp as a sort of Friedman-esque focus on the share price.

12:39hbr we wrote lots about stakeholder capitalism and and uh you know it kind of became that's what they were teaching at harvard business school and that's what every you know everybody davos was talking about you know you need to worry more about your bottom than just about your bottom line the share price uh and then trump got elected so that's why i wrote this piece on davos man and This is defining Davos man as, you know, elite businessman, but who also gets, you know, whatever. They're listening to their kids or whatever outside pressure, but they understand, you know, they have to think about the externalities they're creating.

13:17They have to think about the planet. They have to think about some social issues and not just the bottom line. And then Mar-a-Lago man, you know, is now in ascendance. and you know in some ways i you know mark andreessen gave an interview i think to the new york times that it's worth reading because because he's just really articulate in in in speaking about kind of this new wave you know sort of like mark zuckerberg saying you know more masculine energy and you know so andreessen just says things like why would why would i want people to bring their whole selves to work like why is that good and that's been such a tent like we for For a decade, we would say, you want your employees engaged.

13:56Let them bring their whole selves to work. So that's being questioned. So the point of the article I wrote is that to the extent to which, like, you should have values as a company that don't flip-flop with every election, right? You should figure out what they are, and then you stick to them, hell or high water. And if it's just performative, then, okay, get rid of them. You know, that's fine. But you have to figure out what your values are. And they cannot just be, you know, subject to every twist in the political calculation. No, and I think we have seen that because the pressure Trump is putting on leaders to, like, you're either committed to this or you're going to go away, whether it's, you know, DEI or, you know, whatever, immigration policy or something else, right?

14:41Like, what do you really believe in that is what Ken Frazier, the former Merck CEO, said to me? You know, their principles and then their preferences. Right. And if if you're not going to pay a little cost for something, then it's really just a preference. And don't don't turn it into a principle. If it if it's not something, you know, you're willing to have it cost you a little bit. But yeah, no, that's well put. And look, I feel for CEOs now who don't want to be in the crosshairs of this administration because they could make life difficult for you as they can make life difficult for politicians who stand in their way.

15:16But, you know, I mean, there is a search for an alternative. I mean, I talked to a Silicon Valley CEO recently who, you know, in Silicon Valley, you know, CEOs there don't have the same political beliefs. There's certainly a strong libertarian strain there. But this was a guy who said, you have to understand, we were deep blue, right? This is this CEO and his cohorts, right, in the tech world. We were deep blue. And then they got pissed off with regulation and didn't like Biden's appointments and thought Biden was unfriendly to business and to mergers and things like that. Okay, fine. You know, that's a perception.

15:52And he said, we became deep red. And we were excited about Trump. We were excited that Musk was going to be doing the Doge thing. We were excited about, you know, Lutnik and trade. Like, we were excited. And then the administration began. And there was this, you know, incredible uncertainty with all this tariff stuff that just made it hard to lead a business. And then more than that, the immigration thing, it made it really difficult to bring engineers in, you know, even from, forget China, but from India. so so you know these are guys who flipped deep blue to deep red and are now having buyer's remorse uh and you know the extent to which i look i i think you know whoever wins the next election will have to have a platform that is somehow appealing to business you know i mean you know the biden administration i mean there were parts of it almost seemed cartoonishly anti-business You know, they're bad and rapacious.

16:47And, you know, look, I believe in regulation, of course, but but, you know, there has to be a middle ground. You cannot lose business and hope to prevail, I think, in this country. You mentioned this that sort of a lot of business leaders just sort of kind of want to keep their heads down right now. Do CEOs wish they could be more outspoken or, you know, is speaking out like bravery or is it just like foolishness at this point? I love this topic because, you know, if you go back a generation, you know, CEOs didn't talk publicly about political issues and social issues. Like, why would they? You know, that would be crazy.

17:28And then with the rise of the Internet, there was this sort of truism. And I feel like I said it many times that CEOs don't have the option of not speaking. Right. Because, you know, their employees want to know where they stand on these important social and political issues. Their customers want to know. If you decide, I'm just going to stay silent, the internet, you know, X will interpret your silence however it wants to, and it might be negative. So you have no choice. You have to jump in to the fray. And we wrote articles and I've said that, that was sort of the new reality. Well, maybe not, right?

18:07Targets, problems, Bud Light. I mean, there were attempts to get involved in social issues that really backfired that made, I think, companies think twice about what they're doing. I guess where we've landed is that, again, you know, figure out what your real values are. And if there are issues that really touch your business directly or your, you know, I don't know, the values that you stand for, then yes, you cannot be silent. But this idea that you have to weigh in or your employees will get mad, I think we've rethought that. Part of what appealed to me about your framing of Davos man versus Mar-a-Lago man, like Davos man is sort of CEO as statesman in a lot of ways, right?

18:54And right now, sort of CEOs and business leaders are a little bit like, I don't know whether I want to be a statesman, but not if I have to deal with some of the garbage that goes with being a statesman. I feel like the United States sort of overnight became China, right? Where, you know, you have this tremendous ability to do what you want as a business, but suddenly, you know, we can't criticize the government, right? Yeah. because there will be a tremendous backlash and I might lose my, you know, that's China. That's authoritarianism. And I'm not saying anybody has stated that as a policy, but that's how it's rippling through.

19:36And, you know, that's really sad. You know, you could talk about whether CEOs speaking up on an issue, whether that's a good idea or not, or whether their statements are good or not. But the idea that, well, they wouldn't dare in this climate because it's too scary. You know, that's China under the Communist Party. I mean, that's somehow an unintended consequence of where we are right now. Adi doesn't mince his words. Some CEOs I've spoken to are relieved that there's less pressure to speak out on things that, frankly, they weren't particularly comfortable speaking on in the first place. On the other hand, other CEOs are mourning the loss of exercising their pulpit.

20:17As with much of what Adi and I discuss about 2025, it's an evolution that could progress or regress from here. So what signals does Adi keep his eyes on? And how does he feel about Trump's attack on Harvard, where HBR is, of course, based? We'll talk about that, Elon Musk, and Adi's most important leadership lessons after the break. Stay with us.

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21:38And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

22:21So if you're scaling, make it simple with Deal. Go to deel.com slash MOS and get up to three months free. before the break adi ignatius of the harvard business review shared what americans most misunderstand about china why business leaders aren't speaking out against trump and more now we dig into ai elon musk and harvard's response to trump's attacks let's jump back in

22:55i have to ask you about uh harvard's battle with the trump administration I mean, you work at Harvard, of course. What's the feeling at the institution? Yeah. I mean, look, I cannot, I can't speak for Harvard. I'm not involved in any of these conversations. There's soul searching at Harvard, certainly. I mean, if there are charges of, let's say, anti-Semitism coming from anywhere, you have to take that seriously and not dismiss that and figure out, all right, you know, have we created a climate for that? And if so, how do we respond and you know you know any intelligent institution would take that seriously and figure out what to do as a lay person it seems like this is more personal and vindictive um than fact-based um that for uh you know a kind of from a MAGA perspective Harvard is the enemy a bunch of mostly liberal experts telling people what to do.

23:56Harvard's always been a target. I mean, you know, you look at clickbait in any, you know, news thing. And if it's somebody, you know, taking down Harvard or Harvard makes a mistake, I mean, you know, the world loves to read about that because it's just, it's a symbol of greatness or liberalness or both. And so if they slip up, it's a target. So I will say, having talked to a lot of Harvard alumni, it's not universal but but by and large and almost everyone i've talked to is is really impressed with alan garber and with harvard's response when the charges of okay harvard is anti-semitic came out there were people who canceled their subscriptions to harvard business view saying look i don't want to give money to any any publication that's linked to a you know quote-unquote anti-semitic organization so that was an initial backlash you know now it's very different.

24:45If you don't like what Trump is doing, or if you think he has too much power, it's, you know, it's king-like and that's, we're supposed to have a separation of powers. It's like, well, who will stand up? And the lawyers won't stand up. And, you know, companies we've already talked about are too intimidated to kind of respond. And so, okay, you know, Harvard's not caving. And who knows where it goes if it ends up as a positive thing or a negative thing. But I do find And a lot of outside support for that. If Harvard's not going to stand up to the president, you know, what other academic institution would, right?

25:21Yeah. And look, you know, I know I heard somebody at UCLA just saying, good for Harvard. We couldn't do that. You know, they can't even pretend they could do that just with their dependence on, you know, federal money to sort of function as an institution. I mean, it's crazy taking away the grant money for Harvard. I mean, you know, these are grants to solve problems that America has that the government cannot do. So to take away that funding, it doesn't hurt Harvard exactly. Yeah, it hurts Harvard. But, you know, these are, you know, this is meant to be health research or other research that, like, America needs, American citizens need.

26:00You're hurting America. I mean, it's just, there's something truly insane about this particular battle. Again, speaking as a layperson and not as an insider. And, you know, I think there are few institutions who could imagine standing up, and that might depend on, you know, the big endowment that they have that enables them maybe to survive these kind of shocks. The other king in America, I guess, or potential king, it seemed to be Elon Musk, right? The other guy who seems like he can do whatever he wants with almost no repercussions. Although I, you know, I don't know whether the departure of ex-CEO Lindy Akerino means anything related to, you know, whatever, Grok's anti-Semitic exchanges.

26:54It's so hard to follow even with Musk sort of what's going on, his new political foray. He seems to be in the news that every bit as much as Trump. Do you have a perspective on Musk? I mean, I think Musk has been chasing him. I think he's realized his foray into politics has cost him at Tesla, certainly. You know, the damage the business is facing is pretty directly related to some of the perception of sort of what he's doing, that that was bad for his business. um i i don't know why he then came back and said i'm going to form another political party you know uh because i think that the polls i've seen seems to be contributing to the sort of negative take on him and uh on his business so uh you know i mean even when he took over twitter right i mean And it just, it seemed more like he was trolling himself, maybe.

27:55I mean, you know, he sort of enjoys playing the role of the troll. It seems like more than running a business, more than doing Doge. I mean, you know, that seems to be really sort of fundamental to his identity. So even though I think he's been chasing and he's got a board saying, can you pay a little attention to our business over here? I you know I think he's he sort of seems incorrigible or just seems to have this this desire to kind of jump in in the most public ways possible I mean he's he's addicted it seems like to you know his ex following and his his ability to kind of kind of troll and get a reaction.