Ask Us Anything: Four Day Work Week? + Do Founder Political Profiles Effect Business Value?

0:00I'm Adam Schwab. I'm Adir Shifman. And this is The Contrarians with Adam and Adir. And we are back. Episode 125. Ask us anything. Over to the world's greatest moderator, Mike. Oh, thank you for that fantastic compliment. The first question for today comes through from Nadav Prawer who asks, how do you assign value, either positive or negative, to the political profile of an organization's leadership? For example, how would you value Tesla differently sans Elon Musk's political opinions or purgatory without Taya? Without hash. That is a fascinating question. I'll throw it to you on this one. Well, I'll phrase this question slightly differently.

0:51It's a question to you, actually. To me or to Mike? Well, either one of you can answer this. but it'll be more, it's an interesting question because we can ask it a different way. So when I was growing up, there was all this like consternation about listening to the music of Wagner because he was a big Nazi inspiration, let's call him. But we don't have to talk about old fashioned stuff. We can talk about modern stuff, which is, would you stop listening to Kanye West now if you think the music is great? I'm using that as an example with Tesla because Elon is so inextricably connected to it, right?

1:23If Elon was not the founding CEO of Tesla, I think it's fair to say he'd be long gone by now, right? He wasn't the founding CEO of Tesla. Whatever. You know what he was. If he hadn't stolen the credit for being the founder. He certainly saved and without him there'd be no Tesla, but he wasn't technically the founder. But the reason I'm using this analogy is because he's so inextricably connected because I think it's an easier question. Well, maybe we'll come to it if it's not the founder. And so what do you think about it? I think that's analogous, isn't it? Can you separate the person and the output, maybe, is how I think about it?

1:59There's two questions. That is question one, and then question two is, is it good or is it bad? Well, I think being a Nazi sympathizer in general would be bad. No, but obviously, let's not go on this. Forget Nazi. Elon Musk, I don't think Elon Musk is a Nazi. He's got views that offend - He's definitely not a Nazi, I'm happy to say. Elon Musk clearly is inextricably linked with Tesla, you're right. The question is, does Elon's views impact Tesla? And I think the answer is pretty clearly yes. Yes. Well, people are setting Teslas on fire who are not Trump supporters, right? Well, ironically, like Elon's ability to get free publicity, free PR, was instrumental in growing Tesla from 2013, 2022 or 23 when it was caught.

2:41Not necessarily good Elon, but kind of in a less offensive Elon. And that was like Tesla spent virtually zero on marketing. And Elon's Twitter or whatever he did was able to get incredible PR and grow the business in a really efficient way. So that was a big plus. Obviously, the problem is – and I think the Elon example is a really unusual one – is Tesla's intuitively appeal to people who are left of center on the political spectrum because they're an electric vehicle and the right don't like EVs. And I'm generalizing. Because climate change became a political slash religious movement on the left.

3:14And therefore, on the right, they became anti that. Like so hopeless, right? Such a hopeless situation. And Elon Musk obviously was Democrat initially. And to be honest, what actually turned Elon Maga right was Joe Biden inexplicably didn't invite him to some rando AV conference he had. So that was a stupidity from Biden. It turned him again, possibly lost him an election or lost the Dems election. I think there's lots of theories about why he became, he called it the woke mind virus. Like, I don't know, there's some kid issues going on there. And the reason why it was so dumb for Elon is because he turned against his specific customers.

3:49So that was nonsensical. But I'm not sure you can use Elon as a proxy for every sort of call it found. So let me just ask you this because, you know, that's a nice intellectual comment. But like you've got a Tesla within the bounds of the normal political spectrum. Like that's why I'm kind of using your guidance to say let's not go to the Nazis. Do you care? Like if you buy a Tesla and you own a Tesla, do you care? No, but the reason I bought a Tesla, I didn't buy a Tesla for environmental reasons. I bought a Tesla because I love the car. But do you care? But do you care if he's a Trump supporter or whoever's going to run for, I'm going to go a little bit to the left extreme.

4:27If he supported, you know, this Ocasio-Cortez, Mamdani kind of characters, far left, yeah? Yeah. Would you get rid of your Tesla just on those grounds? Probably not. Yeah. So I feel the same way. Like, I find it quite easy to separate the product from the creator. And so in this case where it's a founder's company, I think if I thought that is a great car and it's exactly what I need and he was supporting the left or the right, like I don't think I would necessarily care. That's you. I think that it's not everybody's view. Some people definitely aren't. I know, but we can start with me because that's the viewer most likely to know best.

5:06You're N equals one. I'm talking about N equals a million. I'm not sure that N equals one is relevant. All right, but we start with N equals one, and then you can radiate and say, and so do I think that is the common view, or do I think people might feel differently? And my answer to that is, I think people feel very differently. I think people love boycotts. That's people's favorite hobby. Like, what are you doing on the weekend? Boycotting something. And so, like, I think people love it. And so, the reason I say about Kanye is I find it hard to listen to his music now just because of what's in the back of my mind.

5:37That was pushed me to the extreme, okay? But I can still listen to it. But with these kind of things, I think people look at something and they say, boycott that thing. We don't like what their values are. And so I think it is a huge risk if people go to the extremes of political views. What do you reckon the most ironic boycott? I'm trying to think the most ironic boycott in my mind was, remember Stephen Hawking who was in sort of an OG anti-Semite and he supported BDS and sanctions on Israel? And literally the machine that kept him alive, he had motor neurone disease, was made by an Israeli business.

6:12It doesn't get any more ironic than that. I totally agree. That's all of these things. That's people typing on the latest intel chip to boycott Israel and not understanding the connection. But so I think definitely in the age that we live in, a leader of an organization, especially if they're a founder, that comes out and takes a very strong, very controversial political position is likely to alienate some chunk of his or her customer base, but also pick up a whole lot of new customers. And I think that's kind of a bit what happened as well. The problem, Tesla is a particular example. It's a deeper example because it's got some cars problem as well, right?

6:50Like it's got some product problem. Well, the issue with Tesla is whilst he alienated the Dem voters, Republicans who might like him weren't necessarily buying EVs because of the hatred of EVs. So it's not as if he – I think a great example of where it worked and obviously it didn't work eventually, but Alan Joyce and Qantas supporting the gay marriage plebiscite. It was a bit easier because most people supported it, but that was I think a great alignment of the Qantas brand with the plebiscite with a very popular view and I think it matched the Qantas audience to a degree. I think that was a smart brand alignment.

7:23So I don't like companies taking political positions at all. In fact, maybe I would even say I hate it. And if you look in the US, you know, Target in the US, same logo as Australia, same name unrelated to the brand, actually positioned a bit lower than the Australian brand. Yeah, new CEO this week. And so one of the reasons there's a new CEO this week is because Target in the US, first they jumped on the woke yeah the dei bandwagon and in doing that alienated a whole lot of their customers so that was a mistake and just to prove you can't win when they rolled back away from that and said we're never doing that again they just alienated a whole lot of other customers the remaining customers exactly yeah yeah and so i think like i'm not a believer that companies should only focus on making profits i think that's going to take capitalism to a bad place.

8:11But I also think companies as entities, I do not think they should take strong political or social positions as a general rule. I think they can leave that to individuals in the organization. When you say companies, forget companies, what about the executive or the founder? Because that's more relevant. Well, it's tricky, right? Because I take a very, I don't know if I'd say pro-Israel position. I would say pro-Western liberal values position very openly. But I don't think that's controversial. Like if you don't believe in Western liberal values, maybe you're in the wrong country, right? Like find somewhere else to live.

8:50There's a lot of people who probably aren't in the right country then. Yeah, well, they should push them all out the door, you know, my view on that. And so, I mean, I don't mean that literally because they're citizens or whatever, but like I don't think it's very controversial. And so maybe I say I don't think it's controversial because it's me, but actually objectively, how can you say living in a Western liberal democracy, it's controversial to support Western liberal values. I mean, it's a bizarre concept. But then what if I was taking a more aggressive position, like as a chairman, or what if someone who's a leader is taking a more aggressive position?

9:22I think you need to be very careful, right? Like just going on LinkedIn, by the way, I just want to say this. You know, I deleted LinkedIn from my phone. That's a topic for maybe the - You did what? We're calling the psychiatrists. we call an ambulance to his place, Mike. I'm slightly concerned about his mental wellbeing. We won't get sidetracked on that. But, you know, people write on LinkedIn, or X, these views are mine and not reflective of the company that I lead. And then they go and write, we should just kill all these people. And it's like, well, I don't think that this claim is going to go a very long way in protecting you.

9:54So, you know, in summary, I think it is a very big mistake for leaders of companies or companies to take strong positions on political and social issues. I just don't think it's necessary and it doesn't play out well. If you pick up some customers on the one hand, you're just going to lose some other customers on the other hand. So I think it's a mistake. I think where it's really a mistake, where it's a really controversial issue that polarizes people significantly, and I think Gaza is a great example of that, I think there's a lot more downside than upside because you're going to annoy half your customer base potentially.

10:28But I think if it's a more economic issue, if it's a less emotional issue, maybe you can take a view. But yeah, certainly emotive, big ticket issues are really hard. Economics I've got no issue with, by the way. Like ConBate coming out and being opposed to this whatever RBA move, I've got no issue with that because that's heavily in their own domain, right? That's not a political or social issue. That's a commercial issue. I've got no issue with that. Yeah. Next question, Mike. Mike, you still listening to Kanye or not? Let's put you on the spot. I'm going to be honest, was never a fan in the first place.

11:00So, like, I've never enjoyed his music. I was a fan, despite the fact that he probably can't rap. Like, I actually think his music is, I actually really like it. So there you go. Overrated. Overrated. Next. Second question for this week comes in from Benjamin Klein. Thank you, as always, for all your questions, guys. Keen to hear you guys discuss the ACTU's proposal for a four-day work week. I'm sure Adam Schwab is a big supporter. Cry laughing emoji. Jokes aside, how do you think Australia can fix its productivity issues? Your thoughts. I reckon Ben should become our producer or our associate producer because I had this on our run sheet for next episode.

11:41We're jumping ahead, so thank you, Ben. And that goes to show that both me and Adir have not read the run sheet this week. There we go. Yeah. At least in my defense, he hasn't suggested he should become the co-host. Yeah. But we may be going for a new producer soon. So, here you go, Mike. I didn't realize your job was in jeopardy. Very nice. We can add and say, in Victoria, it would be a four-day work week, two days of which would be at home. Yeah, exactly. Unless you do one of the many professions that, you know, is not that important like a firefighter, policeman, nurse, ambo, et cetera. Teacher, truck driver.

12:14Barista, yeah. Hospitality worker, doctor, you know. I mean, I think we can both agree that the government should not legislate this. And in general, I want to go back a step and say this. You know, it's very easy for people in business to be misperceived by people in the world of unions or on the left. And so I just want to be crystal clear about something. My overwhelming support is for a fair work environment. That is my overwhelming position on things. And I think if you go back to like the 1700s and have no unions, then without a doubt, you get employer exploitation of workers. That's where that ends up.

12:56And so like the origin of unions came from a good place, protecting workers from being exploited and shafted by bosses. And the flip side is in Australia, they became way too powerful. And there's a Labor government that's very sympathetic to them. And so you get junk like this happening. And so I don't have an issue with a four-day work week. if a business decides it wants to do a four-day workweek, I'm very dubious about the research. I can't even see my air quotes, but the research on four-day workweeks, it's amazing. You work fewer hours, you get the same money, but somehow more work gets done and more productivity.

13:31My question in that research is why the hell weren't they working properly for five days? And so that's the question. So I don't believe any of that research, but I think just leave it to employers to work it out with their employees within the context of protecting minimum basic standards and conditions for workers. And beyond that, this is just what happens when the ACTU senses that they've got a government in their pocket and they can start tightening the screws. And I'm sure that Jacinta Ellen coming out and talking about this two days work from home has just thrown fuel on the fire of this belief by the ACTU.

14:10Yeah. There was actually a report in the AFR last week that Australia, and this is AFR saying it, obviously not me, Australia is lagging behind many countries in adopting a four-day work despite research, inverted commas, showing that giving employees a shorter week can boost job satisfaction, improve mental and physical health, and reduce burnout. Yeah, I saw that article, but there was no quote of what research that pertained to, right? Yeah, of course. It was known that the research was complete bullshit. Research from HR company High Bob found 65 % of workers want a four-day week, but only a third would sacrifice their flexible arrangements for it.

14:41It found 23 % of women and 41 % of men would be on board if it meant returning to the office full-time. My view on this is pretty simple. I actually did an ABC, as in the ABC radio station podcast on this. And this is, I say, I recorded a podcast and I had like four rabid sort of four week from home supporters and me as the other person. And it was like an hour podcast. I probably spoke for 10 minutes. That's the usual structure for the ABC, isn't it? Well, even worse, they cut me out entirely. I think nothing I said made it. You know, you didn't say ideologically acceptable comments on the taxpayer-funded broadcaster.

15:17100%. So what a joke the ABC is. But my view remains, to agree with you, if a business wants to give a four-day work with, it's like giving employees a 25 % pay rise. You're getting the same pay for working one day less. So businesses can give pay rises to employees anytime they want. If you want to give your employees a 100 % pay rise, go give it. That's up to individual businesses. I wouldn't recommend anybody do it because suddenly you're far less profitable. But if you think you need to do it to maintain your team, then do whatever it takes to meet the market. But let's not hide what this is.

15:49This is a 20%, 25 % pay rise. There's nothing else. And if people want to work less, that's fine. If you want to get paid more, that's fine. Whatever you want. But let's not pretend it's something that's not. And let's not pretend it's like we're helping mental wellbeing or some other bullshit. It is a 20 % pay rise, which is fine. I'll tell you how I would support it. Okay. Let me tell you how I'd support it. Like this is a much better to me. I know it's very unpopular at the moment to have facts and data. Like that's, you know, seemed to be very anachronistic in this era, but like if you brought facts and data in and you could say, you could make this argument, you could say like, I was about to say God didn't say there was a weekend, but actually if you believe in God, you probably do think that there's a week, a rest day.

16:27But like the two-day weekend, that is a human invention. We decided we're going to have one. We didn't, but states decided, right? The same as like the eight-hour workday. Human beings decided that that was what we would do. And so that's fine. I'm very supportive of a two-day weekend. By the way, I'm very supportive of the fact that, you know, Australia gets more annual leave than just about any country in the world. Once you add up the four weeks annual leave, plus all the public holidays, it's really high, right? I'm supportive of that. I'm not supportive of the grand final in Melbourne public but putting it to the side.

16:59And so if someone came with data and said, this is the reason that a two-day weekend worked. This is how the world has changed since then. And this is why we really should be on a, let's say, two and a half day weekend. I would be all ears to that argument because I think you've got to be prepared to change things when circumstances change and society changes. Why not go to a six-day work week? Why can't we work more? Because I think, I'll tell you what I think about that. I think if you look at the, now I'm going to get a bit philosophical. If you look at the, there's quite extensive research, I talk about this too with you a lot, on what happiness in society is correlated to.

17:35It's very, we have this unique situation historically now that exists in liberal, Western liberal democracies where the increased individual wealth has become uncorrelated to increased happiness. In fact, the reverse has happened. People have gotten richer and less happy. And so what we know is that increased wealth generation is not the key to happiness. I definitely think it's very obvious, especially as, you know, there's a longitudinal Harvard study that has gone on for many decades. JFK was actually in the original career of it. And it's, yeah, it's looked at what's, what looks at what the connections to longevity and low morbidity and happiness, definitely spending time with good relationships with family and friends, especially a partner is a high correlate.

18:18it. And so I'm very supportive of people having leisure time to be happy. And so I don't want to go backwards. But if we're going to go and do more time, just bring me data and good arguments and a way to test it. Don't just bring me the union movement thinking this is another chance for it to get a win. I'm not saying I support or don't support. I'm saying just call it what it is. Let's call a 20 % pay rise request. And if that's what people want to do, if you said to me, I'm going to do a four-day work week and get paid for the four days I work. I say, well, that's – I actually wouldn't like it because I think it's actually not great for people and not great for customers.

18:51But at least be honest about it. The problem I hate about this whole four-day work week bullshit is the intellectual dishonesty in pretending it is something that's not. There are some other problems, just to finish. So I always come back to emergency services workers because they're the people that you can't live without. And so if you want a four-day work week, what that means is you need 25 % more ambulance paramedics. Not just imagine. We've got doctors, nurses, teachers. We have teachers. What are we going to do with kids? The kid's going to go to school four days a week and you've got to – Oh, well, that's another point.

19:24So then you've got teachers. So then unless you're going to do four days of school, which, by the way, I think would be perfectly fine. I can just get rid of the junk that's being taught. You can probably get rid of 95 % of the school. That's true. And then you basically – but you're right. Like you need whatever job you're reducing to four days a week, you need 25 % more employees. And frankly, when you're running at 4 % unemployment in society, you're not going to find 25 % more employees. It's not viable. I mean, even if you just take the basic cafe, unless you get 25 % more baristas, you're just not going to get coffee on one of those days.

19:57I think we're in marginally agreement here. We'll go to a super quick break and be back with our last question. And we're back. Question number three, Michael. Okay, circling back to Elon Musk actually, this question comes in from Daniel. You often talk about the importance of storytelling in a business. People like Elon Musk are celebrated as great storytellers because they tie their businesses to bold visions of the future, like sustainable energy or becoming multi-planetary. If you're running a business that isn't as futuristic or world-changing on the surface, how do you think about storytelling?

20:32What are the important stories you are telling in your businesses and to who? Well, Adam's going to answer this, but I just want to start off by saying that there's a name for Elon Musk's stories. They're called fairy tales because nothing is ever delivered in any way like the way he says it's going to be delivered, right? He's got this ability to just lie to investors and the public on a consistent basis. And everyone knows that it can't possibly be delivered the way he says it's going to be delivered. But for a very long time, it might have changed now, but for a very long time, it didn't matter.

21:04People were happy to buy into the religion and to keep believing. And to his credit, usually he would eventually deliver. But we should separate. Like the Elon Musk and Steve Jobs of this world, they're in like a world of their – a category of their own. And we're not going to be emulating them and we shouldn't try to emulate them. But you should answer this question, Adam, first. I actually listened to Elon Musk's SpaceX episode of Acquired recently. and they were saying, talking about, they actually brought up Elon's, because he talked about self-driving in 2017 and all this stuff that obviously hasn't proven right.

21:35Often, as you say, he often does get proven right eventually, just the timeline's off. And then what they say is that he essentially thinks he wants to do the Falcon 9 rocket and he's talking about this Falcon 9 rocket and he thinks, if I worked on it seven days a week and I worked on it eight an hour a day and I was able to sort of get a bit better than what I think, I can do it in six months. When realistically, he's just brought forward a bunch of assumptions that were just too bullish. So their view on him was he doesn't set out to lie. He just takes these overly optimistic assumptions that were never going to be proven right.

22:06So it's probably a generous. What's that dude? What's that dude that did that big Ponzi scheme again? Edouard Ponzi? No. Well, I mean, yes. Madoff? Yeah, Madoff. Yeah, that's the Madoff argument. I didn't set out to steal everybody's money. You know, it kind of just does some assumptions and it kind of just, I'm not sympathetic to that argument at all, by the way. Anyway, whether you believe that or not, I think the question's a great one. And Scott Galloway talks about this and he says the most important skill for a CEO, and this is a CEO of, it actually can be an early stage or late stage, is storytelling.

22:36You've got to be able to bring forward the future and raise capital at a great valuation so you're not diluting existing shareholders. And to do that, you've got to be a great story. You've got to tell the story of how your business can grow from being a business that turns over$1 ,000 to a business that turns over$1 billion. And how can you convince potential shareholders and potential investors that this is the case? And that is a super important, without outright lying, obviously, but how do you create a credible, make your credible case that that is true? All right. So we all agree with that.

23:03But the question is, if you don't have a business, let's say you've got a business. I thought that was a question. Isn't that not a question? No, I know you thought that was a question, but I'm helping you figure out the question. So that was a nice preamble. You know, when there's a book and there's like, I don't know, what's the one before prologue or something, right? So you just did the prologue to the question. And so the question is basically, what if – that's all good and well, but what if you have a business that's not changing the world in this kind of material way? What if your business is – No, I didn't answer.