Debt Ceiling, Trump Town Hall, and Guest Claire Hughes Johnson

Kara Swisher: As marketing channels have multiplied, the demand for content has skyrocketed. But everyone can make content that's on brand and stands out with Adobe Express. You don't have to be a designer to generate images, rewrite text, and create effects. That's the beauty of generative AI that's commercially safe. Teams all across your business will be psyched to collaborate and create amazing presentations, videos, social posts, flyers, and more. Meet Adobe Express, the quick and easy app to create on-brand content. Learn more at adobe.com slash express slash business.

Scott Galloway: Rinse takes your laundry and hand delivers it to your door. Expertly cleaned and folded. So you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you. Like Tea Time You. Mmm. Or this Tea Time You. Or even this Tea Time You. Said you hear about Dave. Or even Tea Time Tea Time Tea Time You. Mmm. So update on Dave. It's up to you. We'll take the laundry. Rinse. It's time to be great.

Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.

Scott Galloway: And I'm Scott Galloway. And I have to tell you a few things about your liquor cabinet.

Kara Swisher: No, kidding. We hid your liquor at your apartment. The Swishers were there.

Scott Galloway: Oh, you busted into the liquor?

Kara Swisher: No, we did not. Daddy has good liquor.

Scott Galloway: You do. Daddy likes the fire water. What did you dig into?

Kara Swisher: We didn't dig into anything. We actually moved the cart away from Saul and Louis, really, in a lot of ways. But we moved it away from the children because they would have enjoyed playing with all your very clinky bottles and expensive crystal and stuff like that. Champagne, Cool Whip, and 1942. A few of my favorite things.

Scott Galloway: You did. 1942 is still sitting there on your thing, a gift from a friend of yours. You have beautiful liquor. But thank you so much for letting us stay there. We had a great time.

Kara Swisher: You're very welcome. Did you guys have a nice time?

Scott Galloway: We did. We had a great time. I had to travel to Toronto for the day on Saturday, and Amanda went off to Brooklyn with the kids. But Louie did babysitting. We went to Chinatown. We went to dinner. We did a lot of fun things. We went to see Lucky uptown, went to the Central Park Zoo. It was very New York. It was a very New York situation, and it was lovely to stay. Your apartment's perfect to stay at. And the kids loved running around in circles around the living room which was great.

Kara Swisher: That great. Well, you know I have the kids room with the climbing wall. Kids aren't allowed in there. It mostly signals to strange people that I'm actually interested in parenting.

Scott Galloway: Yeah, yeah. No one allowed in there.

Kara Swisher: Well the kids were, and they actually solomated up quite a bit up the wall, which is a little bit disturbing for a one and a half year old. He's quite athletic, which is interesting. Anyway, I heard you have a new king there in Britain. Now that you're a British subject.

Scott Galloway: Yes, this is very exciting. How'd it go? Yeah. Look, I mean, a few things. One, if you think about it, I've been struck by the level of snarkiness and animosity around it. I don't know if you've seen, there's TikToks everywhere of different football games all over, mostly in Scotland, of course, but also at the Liverpool game of fans, tens of thousands of fans erupting into "you can stick the coronation up your ass."

Kara Swisher: Yeah, I saw that. Yeah, there was a lot of that going on.

Scott Galloway: I put out a thing saying in one of my more controversial tweets with a picture of Charles the King saying, "I can't help it. I like him and I wish him the best." I think he, like his mother, takes service seriously. And there's just no getting around it. The idea of a monarchy and a bloodline is just a primitive concept. It probably doesn't stand the test of time. But in terms of monarchies, it's kind of the best bad one or it's the best of a bad lot. It actually generates money. If you think about, I look at it as a marketing construct, and I think it's one of the most successful marketing vehicles in history. If Qatar spends a quarter of a trillion dollars to get the world to focus on them for a few days, for a lot less money, the whole world was focused on the UK. In the pageantry, people are cynical about it, but I do think it's a sign of stability and consistency, it generates money for the UK in terms of media, tourism.

Kara Swisher: Yeah, no, just so you know, the royal ceremony at Westminster Abbey was the first UK coronation in seven decades. Elizabeth was around for a long time. Over 2,000 guests attended, including 100 heads of state and First Lady Jill Biden. Well, there were protests, and there were a lot of crowds, too. And one of the things that was interesting is that British people tell me Americans like the monarchy more than they do, in a weird way. Americans like celebrating it. So, I mean, I think it was, did you do anything? I watched, in honor of it, Queen Charlotte on Netflix, which was fantastic. It's a six-part series about one of the Bridgerton plot lines, which was quite good.

Scott Galloway: I did do something. I had a Cobb salad down by the pool at the Beverly Hills Hotel.

Kara Swisher: Oh, okay.

Scott Galloway: You weren't there. And I had an Arnold Palmer, which for some reason I find British. But actually what I did was I charged my oldest son his home on the weekends. And I charged him with taking his 12 out. I try to get them at any excuse to get out of the house and do something for the coronation. And so I actually posted the picture on Twitter. It's really cute. It's them at a restaurant. And they have like a British Union Jack stuck into their burger.

Kara Swisher: Oh, that's nice. That's nice.

Scott Galloway: That was their celebration of the coronation. And the photo is so hilarious because, you know, the 12-year-old fanboys this 15-year-old. And he's leaning over for the picture. and the 15-year-old was like leaning away. But look, I loved it. I've been there. But you know, the most controversial thing about the coronation was the date for the coronation. The date for Charles's coronation was announced like a decade ago and it created a ton of controversy. You know what the date was?

Kara Swisher: What?

Scott Galloway: Camilla.

Kara Swisher: Oh my God.

Scott Galloway: There's a lot of-

Kara Swisher: Last one, last one. Okay.

Scott Galloway: It would have been so much better. It would have been just so much better if Charles's name had been Richard, because at some point they would have had to say, "Introducing the Dick King."

Kara Swisher: By the way, quick request.

Scott Galloway: Oh my God.

Kara Swisher: I would like you, if possible, just a small request. Can you start referring to me as King?

Scott Galloway: No, I will not. I shall not do this. You are not the King. There's King Charles III. I'm excited about it. King Charles. I like the monarchy. I'm hopeful for him.

Kara Swisher: Good. He's a nice man.

Scott Galloway: You're living in the perfect place then. God save the king.

Kara Swisher: God save the king. Anyway, today we'll also talk about who's in and out at Twitter. Also, Republicans aren't giving an inch in the budget, even as the debt ceiling gets closer. We'll speak with author Claire Hughes-Johnson about what managers get wrong. But first, tomorrow or tomorrow.

Scott Galloway: Yeah, Tuesday.

Kara Swisher: Trump is CNN's hosting a town hall for Trump. The event will be hosted by Caitlin Collins, who is CNN's chief White House correspondent during the Trump administration. She's now on that doomed morning show. It's not doomed, but cursed morning show, I guess. It will be live, calling fact-checking abilities into question after criticism. Warner Brothers CEO David Zasloff said, "He's the front runner. He has to be on our network. We're happy he's coming on here." Obviously, you had to say that. And he wanted to have Trump on. What are you talking about? They're trying to pull very hard to the right at CNN. I would agree with that issue, although I think it's going to be an almost impossible interview on many levels for Caitlin, who's very talented and considered one of the hot stars of CNN, which is not very hot.

Scott Galloway: Yeah. I'm curious to get your take on this. You're going to forget more than I ever going to know about journalistic situations like this. What do you care? Your thoughts.

Kara Swisher: You know, I talked to a lot of people at CNN and they're not happy about it for a lot of reasons.

Scott Galloway: They're not happy that they're platforming them?

Kara Swisher: Yeah, I think they think it's too early. Like, why now? Why this second? They don't think that he's not, you know, if he's the front runner, obviously they would like him to be on the network. They just find it unusual that they're doing it at this moment. And of course, it's because of ratings. Because CNN ratings are in the basement, like way below MSNBC and Fox and everybody else, like significantly. And they've lost a lot of money. They've gone from a billion to 750 million. Of course, along the way, they insult Jeff Zucker, who was at the billion mark, right? And the better ratings mark. But I just think it's early. I would agree. Like, why now? I think doing it without being able to fact-check quickly is a problem. This guy lies like he breathes. So I think that makes it difficult. You have to be extraordinarily quick on your feet. And I think Caitlin's quite talented. But man, it's going to be a lift. She's not going to win no matter what. If she's too mean to him or too tough on him, she'll get slapped around by whoever slaps people around online. And if she's too nice, that'll be an issue, obviously. I think if you don't write up the top, ask him about the insurrection and really give it to him. I don't know where you can go with that interview if you act like nothing. It's not normalizing as much as I hope she's not too polite. I'll tell you, because this guy deserves enormous scrutiny. But given how much he's insulted CNN, et cetera, real early for this. And so I don't quite know why he's on there right now. But they got him, I guess.

Scott Galloway: I think they should absolutely have him.

Kara Swisher: Yeah.

Scott Galloway: He's the former president. He's the frontrunner. I mean, of course they should have him. And not only that, they need the ratings. They need the ratings. The meltdown at CNN is literally historic in terms of the number of viewers they've shed. But also at Fox. It ends up that Tucker, the shows before and after him, not only has his hour lost a ton of viewers, the hours after him, it ended up he literally was the anchor.

Kara Swisher: Yeah, he's the Rachel Maddow with that. And Rachel did the same thing. And without him, people just aren't tuning into the network for the entire evening.

Scott Galloway: So I believe that everyone talks about the Don Lemon and Tucker Carlson firings immediately went to, "Well, what did they do?" It's not what they did. It's the fact that their businesses are imploding. And when business is bad, they would have overlooked Tucker's bullshit. If that morning show with Don, maybe not CNN, because CNN is more, you know, it has more self-hate and it's more subject to outside criticism, which might be good or bad. But when times are good, you find reasons or you wallpaper over inappropriate behavior. And when times are bad, it becomes intolerable when that person that's making 10 or 20 million or whatever makes a mistake. The reason Don Lemon got fired was not because of a stupid comment. He was fired because that show wasn't working.

Kara Swisher: Yep.

Scott Galloway: And Tucker, I think.

Kara Swisher: I would agree. It was a bullshit reason. And Tucker.

Scott Galloway: Yeah. And if you look at, I do feel bad for Don, because I think, again, if you look at Don's history on the network, he championed a lot of things. He was a good voice for a lot of people, I think.

Kara Swisher: Yeah. Anyway, but the amount of revenue declines at these companies. And again, it's sort of funny because we're sitting here talking about it. There's something about the prestige and the marquee value of television. But what will be a lot more important is what happens after on social.

Scott Galloway: Correct.

Kara Swisher: In terms of actually influence. A certain number of arbiters and influencers will decide if it went well or it didn't go well. And that'll be the impact, the shampoo effect that'll take place online and the memes and all the things, the clips that are played over. But they should absolutely have him on. And she should not overthink it. She should hold his feet to the same fire or not fire as she would any other political guest. But she absolutely, in my view, should push back and say, "That's not true."

Scott Galloway: You know who I would love to do this interview? I think her name's Deirdre Bolsa from CNBC. She did an interview with Keith Rabois, who came on to talk about Open Door.

Kara Swisher: Yeah, somebody you don't like.

Scott Galloway: Yeah, go ahead. And he immediately began lying. He immediately began saying, "Oh, we've been profitable five years straight." And she said, "No, you haven't. The construct we use for establishing profitability is GAAP. You have never been profitable." And she would, in a polite, forceful, yet dignified way, stop him and go, "You can't say that on CNBC." And that is a really, I remember saying she kind of defined forceful yet graceful. Because that is hard to do. It's hard to stop someone and go, "That's not true, Mr. President." And at the same time, because you know he'll immediately go to, "Oh, I see CNN ratings are failing." You will see him. The only thing I know about this interview is he will reference CNN declining ratings.

Kara Swisher: Yeah, he will. "Without me, you're nothing." But good luck, Caitlin. I don't even know what I would ask first, probably about the insurrection. But there's so many things, all the rape thing, the, oh, God.

Scott Galloway: And then he'll say, "Why are you focused on that and not what I want to do with my next presidency?" kind of thing.

Kara Swisher: That's a great first question.

Scott Galloway: Yeah.

Kara Swisher: "What's your vision for America? Why do you want a second term?" Start there.

Scott Galloway: Yeah, I guess.

Kara Swisher: But you really have to go into the insurrection and the other stuff quickly. There's a lot of things to cover.

Scott Galloway: Yeah. I don't think David Zasloff should have been up there flacking. It made Chris Licht, who runs CNN, look weaker. And it was weird.

Kara Swisher: It was weird. I don't know what you're talking about. The CEO, David Zasloff, got on and justified it when he was asked about it. He was answering other things. And I guess they asked him that. But he should defer to Chris on that. He can't help himself. He's a big footer. He's a major big footer.

Scott Galloway: Thing, did you see the New York Times profile of Elizabeth Holmes, "Call Me Liz," over the weekend?

Kara Swisher: Again, I just read about the evaluation of it. A lot of people think she's, a lot of people found it almost like, it reminded me of the reviews of when SBF interviewed with Andrew Osorkin. People felt it didn't make any sense. She didn't do herself any favors. What did you think?

Scott Galloway: I don't think it was very good on the writer's part. I thought the writer, there was a really interesting, it was far too kind. It was weird. It was weird. And I don't think she had the chops to be able to pull it off. Her name's Amy Chozek. I'm sorry, Amy. I think you're a very talented writer, but this one was really terrible. She wrote, "I was admittedly swept up in Liz as an authentic and sympathetic person. She's gentle and charismatic in a quiet way. My editor laughed when I shared these impressions telling me, and I quote, 'Amy Chozek, you got rolled.'" Amy Chozek, you got rolled. This is someone who was, I suppose, people are complex. Amanda pointed this out to me. But I think this woman was just convicted for fraud. So she might be good at it. I asked Elizabeth Holmes for an interview, but I would have been quite tough on her. And not, you know, there was a lot of like how lovely and gentle her and her husband are. And how this is so unfair. And, you know, a lot of babies.

Kara Swisher: The words you're using sound, quite frankly, a little bit sexist. Lovely, gentle.

Scott Galloway: Yeah, I agree.

Kara Swisher: Yeah, well, that's what she was using. She had the children out showing off the kids. She has two young children. I can believe that. She got pregnant in the midst of a trial.

Scott Galloway: Yeah.

Kara Swisher: And I talking about how she fell in love in the middle of a trial. I just feel like most people who are convicted of fraud don't get this kind of treatment. The reason she's charismatic is because she was charismatic when she was defrauding people. And on one hand, I feel like Elizabeth Holmes, there's lots of people in Silicon Valley who did the same or worse than her and didn't get to go to jail. Same thing like Martha Stewart was the only person going to jail for insider trading. You're kidding me, right? I get that. That said, both of them are guilty. So that's the way it goes, I guess. I don't know.

Scott Galloway: Well, but that's the uncomfortable part of this. And that is 3% of unicorn CEOs are female. And it felt like the first one to go away for kind of 10 years plus was a woman.

Kara Swisher: Right.

Scott Galloway: And I feel like, so compare her to Adam Neumann. Adam lost $13 billion. And I want to be clear, there's a distinction here. Adam Neumann was never accused of fraud, nor was he convicted of it. And she was outright lying. People would say that Adam Neumann exaggerated. There is a distinction. And people always go, their go-to is, "Well, but this is more serious." It's not about lying about office space or exaggerating office space. It's about issues related to people's health. She wasn't convicted for anything regarding misleading people around their health. She was convicted of lying to her board and misleading investors. And I think the difference between Adam Neumann starting a new company with Andreessen Horowitz and potentially being on charges is that the board of SoftBank wanted to save face. And they weren't going to go after him and accuse him of fraud because it would have meant the company going bankrupt and American vultures coming in. So they worked it out with Adam. Whereas the board at Theranos, which was a bunch of very, very prestigious, what I call FIPS, formerly important people that pollute these boards.

Kara Swisher: FIPS, nice word.

Scott Galloway: Which kind of describes every country club I've been to lunch at. But anyways, I think they decided they felt really wronged and they went after her.

Kara Swisher: Well, it was the investors. It was the investors mostly.

Scott Galloway: Yeah, she lost institutional capital. The board didn't do its job asking real questions.

Kara Swisher: No.

Scott Galloway: And they went after her.

Kara Swisher: They actually ignored it.

Scott Galloway: I think if Adam Newman's board had gone after him and claimed that there were so many exaggerations around these numbers, I think he would have been in a lot of hot water. I think Adam Newman is literally the luckiest person. First off, the first person to get a 10% commission on losing a billion. No one pulled that off. I think things, I got to admire his bravado. I would have thought after watching some of the trials that are happening and the worm has turned, people are being sent to jail now. It's not just Elizabeth Holmes. There's several tech executives who've been brought up on charges. But if I were Adam Neumann, I would be keeping a very low profile. I got to admit, he's got incredible backbone and moxie.

Kara Swisher: Yeah, yeah. Well, getting back to Elizabeth, there were so many great tweets about it, like that now she's Liz as opposed to Elizabeth. And this was a very kind article, I would say. But it sounds like the definition of access journalism.

Scott Galloway: That's a big guess, right?

Kara Swisher: Yeah, she didn't come on my show. I asked her. I texted with her, too. So everybody's competing. Elizabeth Holmes and her probably very high-paid communications consultants are selecting on who they think will be kindest to her.

Scott Galloway: Yeah.

Kara Swisher: So I think it's difficult. Anyways, I don't know. I guess. I can sympathize with a woman with kids going to jail, but not as much as this was. This was really, she got.

Scott Galloway: But didn't she decide to have kids once she decided?

Kara Swisher: It felt to me very emotionally manipulative that she was trying to manipulate the jury. It's a terrible thing to say, but I think showing up.

Scott Galloway: There might be an age thing. Who knows? But nonetheless, I would urge you all to read the profile. It's called "Liz Holmes Wants You to Forget About Elizabeth." The black turtlenecks are gone. So is the voice. As the convicted Theranos founder awaits prison, she adopts a new persona, devoted mother.

Kara Swisher: Everybody, guess what? She had the black turtlenecks and she had the voice. So maybe you should think about that. Just think about why she did that. Anyway, let's get to our first big story. Twitter Blue's early adopters are also its biggest quitters. Last November, about 150,000 users signed up for Blue. Of the early group, fewer than 70,000 still subscribe or less than half. Others have signed up since then. Twitter Blue has about 620,000 users total. They're not the only ones heading out the door. High-level executives have left the company since the start of May when the vesting clip took effect. The departures came from the trust and safety team as well as public policy. There's reportedly confusion over the company's parental leave policy. It was formerly 20 weeks and supposedly went down to two. Now Twitter says it's 12, maybe. There's also rules around the Parental Leave Act around those numbers. Depends on the state you're in, too. So they also stopped issuing cash bonuses to employees. So we haven't checked in on this business, but Blue is not working as a big business. I mean, if you math it out, I guess, 620. That's about 5 million or about 60 million a month. on this business. But Blue is not working as a big business. I mean, if you math it out, I guess, 620. And it depends. It's about 5 million or about 60 million a year if everyone's paying eight bucks, right?

Scott Galloway: Yeah, because it could be us mixed in with it, right? Could it be people who had them before? Yeah, I don't know how many of those people are paying, right? Who knows what numbers from this guy, right? But let's say, let's assume it's somewhere between 30 and 50 million dollars. They used to be 5 billion. So that's 1% of previous revenues. Post must taking over. It's now $2 billion. So it's about somewhere between, call it, 1.5% and 3% of their revenue. And as long as it's growing, but this just hasn't, I mean, there's nothing around it. This just hasn't worked.

Kara Swisher: No, it's not worked. It's fine. It's fine. It's a little business, like kind of a little thing. I don't know what else they're going to supposedly, he keeps saying they're rolling out all kinds of things for businesses. And then, you know, I was thinking, we talked about Brian Chesky rolling out very useful things, features over time that work, like price transparency, whatever they were trying to do, more and more small features that make your life on the app better or whatever you're using better. And this is not that. They're doing the exact opposite of what Airbnb did.

Scott Galloway: The biggest impact in business this year is not AI. It's not supply chain. It's the sonic boom heard around the world. Elon Musk taking Twitter from 7,500 employees to 1,000.

Kara Swisher: Right.

Scott Galloway: And he's done it in about, what, six or nine months?

Kara Swisher: Yeah.

Scott Galloway: I don't think that has ever happened at a company that was breakeven and not in immediate, like, distress. I've never, I have never seen, when he came into the company, it was losing money on a cash flow basis, but it was kind of breakeven-ish. There wasn't a burning platform other than the debt he took on. I got to give it to the guy. I do think it's a minimum viable product. I personally wouldn't know the difference other than the thing I've noticed about Twitter. And I don't know if you feel the same or if people just dislike us more. It feels like it's gotten even more toxic.

Kara Swisher: Oh, I just turn off comments, Scott. I don't know why you would leave them on in any way. But my point is, since he took it over, the one thing I would notice, to be fair, I haven't noticed any change in functionality. Maybe that's because I wasn't using a lot of the functionality. Other than for two weeks, I couldn't get on it. But the thing I have noticed is, and I've thought is that people getting angry or more upset because the world is getting harder for them. It does feel like the ratio of really ugly comments, people saying really aggressive angry things, has been ramped up. And also the thing I noticed about the blue check is it does appear to be definitely Elon fans. But it just seems like he's got to come up with more businesses. I'm sure he can keep this thing afloat for as long as he wants. I don't think it's in any crisis position, but he certainly hasn't saved it and made it better. He's made it worse, essentially, and less lucrative, I guess.

Scott Galloway: Yeah, but whether it's the writer's strike or parental leave at Twitter, it all reverse engineers back to the same thing, and that is consumers are spending less money on advertising that used to support two and a half men for 30 minutes every week. Now it's one seven-episode, one-hour thing, so there's less. And consumers are spending 12 bucks a month instead of 200 on their cable bill. And there is $2 billion to be divvied up at the end of the year from advertisers instead of five. So you're about to see just everything get a little shittier and a little worse. And whether it's, there'll be all sorts of arguments for AI and there's leverage between the studios and writers. At the end of the day, the thing causing all of this is there's not enough money to go around. Because if cable viewership was up and they still commanded the CPMs, there probably, or there were still just a ton of people were watching a ton of late night television or ad supported television. The studios probably would have come to an accommodation with the writers. And Elon Musk, I would think, wouldn't be cutting parental leave.

Kara Swisher: I was about to say, I don't think he's malicious, but I think sometimes he is. I just think you shouldn't expect it with him. Although Tesla has 16 weeks paid leave, which is interesting. We've made a lot of progress around that. I mean, paternity leave, we're not two words you ever heard in the same sentence when I was working.

Scott Galloway: No, I get it.

Kara Swisher: But still, we have made progress. The United States sucks on this issue. Every other-

Scott Galloway: 100%.

Kara Swisher: I mean, I don't even want to say we made progress because it really isn't. It isn't progress. California, 12 weeks unpaid leave. Well, thanks. You know, you just get to leave. You just don't get to pay for it. I think it's just really the way we treat parents with children. A lot of the better companies, and granted, it's still- I mean, we don't have- The companies have done it. We have to have universal childcare if we want to maintain a growing workforce. So there's a lot of places we could start. But I'm just saying in terms of the best – when my mom was working, you got two weeks vacation a year. And my partner at Prof G, Catherine Dillon who runs the company, talks about at ABC News they got two weeks maternity leave. That was hard when I had Louie. Louie's about to turn 21. I was, it was a whole, you had to cobble together stuff. And companies finally got, companies are the ones that are better. And I'm just saying, whatever, they should. They should. It's a good cost to pay, but companies can decide.

Scott Galloway: The world that this generation doesn't recognize is the difference between, and I'll use business in school as an example, the average graduate of Stern right now, they're making incredible money. And I think the average number of offers is somewhere between like three and five offers per student.

Kara Swisher: Wow, that's good.

Scott Galloway: When I got out of business school in 1992, in the midst of a recession, 40% of the graduating class on the day of graduation had a job. So the majority of us had zero offers. And the negotiation with an employer was just entirely different. The benefits, the amount of leave, the asymmetry of power or leverage between capital and labor has massively benefited labor for about 20 or 30 years across the information economy, not across the lower end of the spectrum. But if you had the right skills and the right certification, effectively, all management meetings were about how do we surprise and delight employees with compensation, economic and non-economic, to keep them happy here. And for the first time in the young adult lives of the majority of information workers, the power has swung back to capital.

Kara Swisher: That's right. And Elon will do whatever he wants. Speaking of doing whatever he wants, Tucker Carlson, as predicted here on Pivot, reportedly spoke with Musk about working together, although he's-

Scott Galloway: Shocker.

Kara Swisher: Shocker.

Scott Galloway: Are you shocked? I'm shocked.

Kara Swisher: I'm not shocked. I love being right. Though he's supposedly having similar conversations with Rumble and Newsmax. Chris Ruddy's really out there doing a fan dance for him. Maybe looking into his own venture. Maybe he's going to do his own podcasting. Maybe he's going to do his own events. There was one about whether he's going to do a Republican debate. He's still under contract, though, with Fox into early 2025. He'd have to get out of that before he could join anybody, which means they can do whatever they want with him, which is hysterical. He can make as much noise as he wants. They don't have to let him out of that contract.

Scott Galloway: I don't know. Do you think they probably will if he takes less money, presumably, right?

Scott Galloway: If they own 20 and if he takes five or something like that? Well, it depends. Usually there's something called garden leave. And that is when you leave, you have a contract that says there's a cooling off period. In investment banks it's very common because they don't want the guy running coverage for health care...

Kara Swisher: Yeah. No, he has it. He can't do anything until 2025 with anybody. He's quite locked up.

Scott Galloway: My guess is if they really want to stick up the middle finger, and my sense is these guys have a middle finger the size of the Empire State Building and are willing to use it, they would just pay him and keep him off the market and let his career waver a little bit.

Kara Swisher: I don't know how much money we're talking about. I think it's like $20 million, something that sticks in my head.

Scott Galloway: Yeah, but for a guy like Tucker Carlson, who I would imagine has made hundreds of millions, the biggest f*** you would be to let his career atrophy, pay him the money so he can't do anything.

Kara Swisher: Yeah, maybe they'll do that. He's got a pretty tough lawyer, same lawyer that Don Lemon has, but we'll see if they let him. The lawyer's making a lot of noise, which means I think Fox is like, f*** you, we're not letting you out of the contract. Because the lawyer is suddenly blabbity blabbing. If I were Rupert Murdoch and I really didn't like this guy and it sounds like he generally doesn't like him, I'd be like, okay, boss, go fade into oblivion. Here's your 20 million. Fade to black, my brother.

Scott Galloway: Yes, all right. In two years, no one's going to remember who you are.

Kara Swisher: Yeah, could be interesting. We'll see. He's going to try to get out. But the ratings have plunged since he was let go, as you said. And so I think they're going to sideline him. I think they're going to sideline him.

Scott Galloway: Yeah. There's always a deal in some way, but it was interesting the lawyers suddenly rather loud about the issue.

Kara Swisher: All right, Scott, let's go on a quick break. When we come back, the debt ceiling is getting closer and lower and the Republicans want to slam right into it. And we'll speak with a friend of Pivot, Claire Hughes-Johnson, about a wide range of topics.

[Ad Break]

Kara Swisher: Scott, we're back and starting the negotiations over the debt ceiling. House Speaker Kevin McCarthy is headed to the White House on Tuesday to try to hammer out a deal with President Biden and congressional leaders. No deals expected, though, and time is running out. Treasury Secretary Janet Yellen says the country has only weeks left before it hits an economic and financial catastrophe. And that's the Treasury Secretary.

Scott Galloway: Oh, that's scary.

Kara Swisher: The Secretary also warned against proposals to invoke the 14th Amendment to avoid breaching the debt ceiling. Scholars say that doing so would cause a legal fight and turmoil in the markets. The 14th Amendment has a provision that says a validity of public debts shall not be questioned. I can't believe we're going to the 14th Amendment at this point. What would be the economic effect of a default? One analysis by Moody's projected the Republican budget could destroy nearly 800,000 jobs. We'll just review quickly. The House has passed a bill to raise the debt ceiling. The bill goes after the Inflation Reduction Act. Chuck Schumer says it's dead on arrival. And McCarthy has only a five-vote majority in the House. He has to keep everyone on board, including the Freedom Caucus.

Scott Galloway: Yeah, I don't fully understand. I mean, first off, America has this secret aircraft squadron that several hundred aircraft carriers called the U.S. dollar. Everybody uses our dollar. The other incredible weapon we have is that the cost of capital is the lowest for all American businesses and individuals because our government can borrow money at a lower rate. And the reason they can borrow that money at the lowest rate globally – maybe the exception of Japan and Germany, Switzerland, Germany, and Japan probably have lower rates – is the full faith and backing of the US government. It means something. People believe they're going to get their money back. And any interruption in that essentially is this insidious, somewhat imperceptible but real impact on everyone's lives. If interest rates go up, the short-term havoc it would wreak would just be immense. And not only that, it's the definition of a self-inflicted wound.

The other thing that strikes me about this, Kara, is that the Republicans have normalized this hostage taking. It wouldn't be any less strange. It wouldn't be any less un-American than if the Democrats said, "We control the Senate. You're the Republicans. You're the ones that love business. You're the ones that are supposed to be the market people and the adults in the room that hold the checkbook, right? We Democrats who control the Senate want you to fund universal child care and increased Social Security and social programs or we're not going to agree to raise the debt limit." It would be no different than if the Democrats took the whole thing hostage.

Kara Swisher: Child care for all, although I'd be going, yay.

Scott Galloway: And yet we have decided, because it's the Republicans that do this over and over, that this hostage taking is somehow a legitimate point of negotiation for the Republicans. It really isn't. And even the left, even the liberal media is saying, "Well, you got to hand it to them." I watched Meet the Press this weekend with TikTok. They said, "Well, the Republicans have put forward something that's reasonable." And I'm like, the whole thing begins from the premise of being unreasonable. And that is, why would any one party just hold a gun to the head of the economy to try and get leverage? Why wouldn't the Democrats do the same thing? How have we normalized Republicans taking the debt limit as a hostage?

Kara Swisher: They've got a pretty hard right side. He's got a pretty hard right side. Of course, there's other districts that are less so in the Republican Party that might move over to the Democratic side. And of course, everyone has an interest in lowering the deficit, FYI. It's far too high because of both Republican and Democratic spending. That's a conversation we should have. We should have conversations around spending and how we cut it and be responsible. But what's most cynical about this hostage taking is they don't want to even outline, even when the Democrats say, "Okay, what do you propose we cut?" The Republicans don't want to even outline specific programs they'd cut. They want everyone to do it. So everyone takes the blame. They're like, "We just need to spend less," but they wouldn't dare say what they want to spend less on.

Scott Galloway: And if you were an AI generative model that looks at the relationship between words and patterns such that it can predict the next word – you know that the color of the night sky is black or blue depending on the time of the night – it figures out the relationship such that it can predict what would be the next word and the relationship between those words in a sentence. If it did the same thing around what happened with the debt ceiling fights, it's usually that as we get closer and closer and the markets become more jittery, Republicans realize this is a losing issue for them. That if in fact they do tank the economy, the majority of the blame won't be on the president at the time. It will actually be the Republicans. So I think it's a winning issue for the Democrats where the Democrats just say, "This is a hostage taking. We're not even going to validate this or justify it with an attempt to negotiate. We just can't."

Kara Swisher: What do you imagine happening? Like they're going to get together and Biden's been nice. He's saying that Kevin McCarthy is wise. He's not being too mean. I noticed he was being rather gallant. What do you imagine happening?

Scott Galloway: They won't default on this. And the Biden administration will give them something like an agreement to look at this or a committee or whatever it is such that Kevin McCarthy and Republicans can declare victory and say they got something.

Kara Swisher: Yeah.

Scott Galloway: But this is a loser. I would imagine this is a loser issue for the Republicans.

Kara Swisher: Yeah, they've gone out on a limb here like an idiot.

Scott Galloway: I mean, this is Brexit. This is our form of Brexit. That is probably the greatest self-inflicted unnecessary wound in the West over the last decade. You know, if you go back 20 years, you'd have to say invasion of Iraq. Anyways, the biggest one, though, by far would be if we miss a debt payment and cause this crazy havoc in the capital markets.

Kara Swisher: Yep, the stock market, especially with everything else happening with the banks. It's just – it's a really badly timed thing, especially with the deficit, which everyone's responsible for. Not just Trump, of course, increased it quite a bit. But other presidents have also. I think Clinton was the one who brought it down, which is kind of funny. George Bush exploded it. There's been tax cuts and wars and then the pandemic.

Scott Galloway: Yeah. So. But yeah, it's Republicans that have exploded the deficit.

Kara Swisher: Well, both. There's been Democrats who did. I mean, yes, but yes, Republicans have not been conservative in this regard, but they just want to go after the kind of things they want to go after and increase spending on things they like. But you're right. Reagan started it.

Scott Galloway: Yep. A hundred percent. Vice President Cheney is famous for saying deficits don't matter. And this is the problem. The reason why financial services companies go out of business and banks go out of business is not because they're bad businesses. They go out of business because of mismatched durations. And that is they take in short deposits – people who can get their money back in two minutes on their iPhone – and then they loan it long. They can call in a mortgage. They can call in a business loan on three minutes notice on an iPhone. Mismatched durations. And you have the same thing here. And that is we have a mismatch in durations from a civic standpoint. And that is our elected officials aren't around long enough to have incentive to try and think long term.

Kara Swisher: That's right.

Scott Galloway: Because the deficit is like, "That'll be the next president's problem."

Kara Swisher: Yeah, that'll be the next president's problem.

Scott Galloway: We will maintain low interest rates. We can pay the interest on this massive increase in debt. That'll be someone else's problem, and I will no longer be in office to deal with it. So we have mismatched durations from an incentive standpoint.

Kara Swisher: Yeah, they definitely have to have discussions about cost cuts. But nonetheless, they're just trying to take away politically from Biden the win like the Inflation Reduction Act. But we'll see where it goes. Just one more point here, and I apologize for that.

Scott Galloway: No, go ahead.

Kara Swisher: The thing that's just so ironic – I mean, you've got to really respect the Republican Party. The Republican Party represents the 1%, and the 1% is super important. Our innovators, they control a disproportionate amount of the capital and influence. Okay, they do a great job. What's super impressive, though, is they convince a lot of people – not even at 98%, but below 50% in terms of income-earning households – that they represent them. And if you look at social spending, they get more money from the federal government than they pay into it in taxes. You would think that every red state would love big government because they're the ones that are benefiting from it.

Scott Galloway: They do. They're takers.

Kara Swisher: I point this out every time they start going on about development. I'm like, "Well, then stop taking so much. Stop taking so much from California, which is a giver." Yes, that should be pointed out continually how certain states, most of the states that take are red states. Anyway, let's bring in our friend of Pivot. Claire Hughes-Johnson is the former chief operating officer of Stripe, where she remains an advisor. She also spent 10 years at Google. She's the author of *Scaling People: Tactics for Management and Company Building*. Scott, I brought her here just for you. So, Claire, welcome. We've known each other a long time since you were back at Google, right? And then you went all over the place. You went to a number of different companies, including Stripe. I want to talk about one of the reasons you are companies that scaled. So talk about this idea of what scaling is for people who don't understand. There are companies that don't scale well as they get bigger. Google obviously wasn't one of them. So talk a little bit about what the concept is so people can understand it.

Claire Hughes-Johnson: Well, I think when people talk about scaling, they're usually talking about getting to high growth. And that's usually, Kara, talking about like, "Did I get product market fit and then really take the traction and the opportunity, the market in front of me, and grow quickly?" But I think you referred to this. I think of scaling as how do you actually build a company to last? How do you build so that you don't fall over in the process of that high growth or even maybe not high growth? But my book, *Scaling People*, is really more about intentional investment in company operating structures and how you hire and how you invest in teams and people. Because I think the companies that do fall over or do run into trouble, it's often because they don't have a great foundation.

Kara Swisher: For that, of scaling people, of the talent itself. So talk about what are the most important things when you think about that. And of course, there's a difference between Google back in the sort of the salad days and now, which is very different. But what are the most important elements?

Claire Hughes-Johnson: Well, I think that – by the way, the whole philosophy of my book is, yes, people matter, but it's investing intelligently in operating structures. So the system in which you operate and the people, which is how you get outsized results, as opposed to that being an afterthought. And I think there's a lot of resistance in young companies to processes and ways to make decisions and ways to actually identify talent and develop them. And that is all known by many great big companies as important. And so why not let's talk about it for something that's younger. Google, I think you probably remember early on, didn't have a lot of...

Kara Swisher: Chaos is how I recall.

Claire Hughes-Johnson: Well, not a lot of belief in management. That's correct.

Kara Swisher: Yeah. And it was not highly valued. Let's just say that. And that was something that I struggled with because it mattered to me. It mattered to me that I was a great manager. It mattered as I became a leader, which I think is a different skill set. And I think that did change over time at Google. But it was pretty chaotic.

Kara Swisher: So what do you mean when you say you've got to have it? When you're saying there's got to be management there or being a good manager right now?

Claire Hughes-Johnson: So management to me – and part of this book is very tactical. It's like how do you do the thing? Templates, outlines of conversations, guides. And a lot of that is because John and Patrick, the founders of Stripe, were like, "Look, you end up, especially as a founder, all of a sudden you built a product and gotten product market fit. And then you have to do something pretty different, which is build a company. And you need to put a lot of things in place. And you also need to manage people all of a sudden. You're suddenly hiring and managing a leadership team." Often in tech, there are people who have more experience than you have, right? And so I think that when I say management, I think it's a very knowable skill. It's very trainable. It's like, "Look, I've got an assignment. This is my scope of responsibilities. I've got to get from A to B. So I've got to collect the right portfolio of people, get the best out of them, track progress, set metrics and goals and execute." Right. And by the way, coach and understand. I mean, the hardest part about management is you have to manage different people differently. What motivates Kara versus Scott? I bet it's pretty different. And so your job is to sort of – I say, be an explorer, not a lecturer – to really figure that out. Because if you want to get 3x returns – I mean, I'm not an engineer. A 10x engineer can build a product by themselves. The only way I scale and the only way I have impact that's 10x or even 3x is through people. And so if you don't get good at that, I don't really know what you're doing with your time.

Kara Swisher: Right. Scott, this is your area.

Scott Galloway: I'm just curious what your observations are around how best practices regarding management have changed in a remote world?

Claire Hughes-Johnson: I actually don't think they've changed. They've become more important and more intentional, and people sort of feel awkward doing them, though. Because a lot of best practices have to do with hallway conversation or "let's touch base after the meeting. Let me see how you think you did in that presentation. Here's some feedback." And you get this sort of synchronous interaction around the work that you don't get in the same way when you're working remotely, which means you have to create it. You have to create windows for your team to connect more personally, even if it's on Zoom or maybe even asynchronously through Slack channels or fun documents that you share and comment on. And you need to feel comfortable texting, slacking, pinging, calling your team to have the hallway chat. And I don't know that every manager does that. Instead, we sort of leave the meeting and then we just forget about our team. And that's a recipe for some trouble.

Scott Galloway: It's so true. The companies I was working at and running, no less than eight times a day just impromptu, yell at someone or get their eye contact and just notion. We could read each other's body language and we'd jump into a conference room sometimes for two or three minutes to talk about something or provide feedback. On almost every meeting, we'd ask a couple of people or I'd ask someone to stick around just to debrief or whatever it is. You lose most of that, or at least maybe because I'm not disciplined enough, but you just lose that organic fluidity. I find in remote... I wonder if they're going to start building in tools to remind people for those organic, more fluid interactions, because Zoom is like, "Okay, 60 minutes for this, and there's five people on it." Can you think of a company that's been able to – a startup in the last three years that's been able to scale remotely? I'm not a fan of remote work. I think there's a lot of downsides to it, and I'm trying to figure out how companies, what are the better companies that have been able to extend their culture? I feel like they're harvesting a strong culture and surviving, but not building cultures remotely.

Claire Hughes-Johnson: Yeah, I do. I think of Automattic, which owns WordPress, right? And they've been remote, fully distributed for a long time.

Scott Galloway: Forever.

Claire Hughes-Johnson: Forever. And they've published. Yeah. Forever. And they have, I think, very intentional cadences. One, they have an internal norm, which is if all three of us were in person in an office, but we were joining a meeting with a few other people who were remote, we'd all three do what we're doing right now – we'd be on separate machines, even if we were physically together, because they're trying to level the playing field of the hybrid communication. So that's one. Another is they're extremely intentional. And I think Stripe now does this, of gathering people in person on a cadence. I think some of their development teams, meaning design, product, engineering, gather quite frequently, and then others gather less often, maybe at least once a year. I think GitLab has published some stuff. I mean, if you look at Stripe, honestly, Stripe has always had remote employees. When I joined it, when it was 160 people, I would say it was about 15% of the company. And that was a talent strategy. We weren't going to attract engineers if we didn't sort of hire them from all over the place. And it was always about 20%. And now, obviously, it's much higher. But it is about being extremely intentional about your communication practices, how you document work so that people can work asynchronously, and then how you intentionally do connect. And I do think, Scott, I agree. People need to be in person occasionally. They need to make the human connection. And then Stripe is a very avid user of Slack. I mean, we just have a lot of hallway chatter that just happens in Slack. And I was actually in a board meeting for another company recently. Most of the board was in person. We had a few people on video. And we had one person from the company presenting. And I was sitting, I happened to be sitting next to his boss. And the guy, right as he finished his presentation, his manager, who's the head of sales at this company, sent him a Slack and said, "Hey, great job," and made a suggestion. And I loved seeing that. I actually wish he'd asked him first, "How do you think you did?" But I think that there are tools and you can use them, but you have to be intentional.

Kara Swisher: Intentional. So one of the things that had happened and you've been through these days is tech had a real boom with all the benefits, the free lunches, everything else. Obviously, we're in an era of layoffs now. Stripe, too, has also had to pull in its horns quite a bit. Talk about how you both incentivize employees in this situation that are there and also how you cope with it. Because it seems like managers have gotten an upper hand on employees. Or maybe we just discussed that around Twitter with the parental leave stuff that was floating around this weekend.

Claire Hughes-Johnson: Yeah. I think that, I mean, first of all, I've never subscribed to that. There was sort of a mercenary thing that started to happen, right? Where it was like an arms race around benefits, some of which – I don't need my dry cleaning picked up at my cubicle or whatever. Like benefits that aren't what motivate me as an employee. It's nice to have them. But I think you want to be focused on what matters to people: purpose, autonomy, independence to do their work, ability to learn. Who am I learning from? Am I getting more responsibility? Right. I think going back to those basics is something that good companies didn't really lose, but you can really emphasize. But when you talk about something like parental leave, that's different than laundry service.

Kara Swisher: Right. Right. Yeah.

Claire Hughes-Johnson: Like you can have fewer snack options in your micro kitchen and you're going to be fine if you have a good culture, if you have the right other incentives in place. I think being strategic about what matters truly matters to people – their kids and their experience as new parents really matters to people. Their health, right, matters. And things that are more like a perk. And I think you have to really be smart about when you distinguish between the two.

Kara Swisher: And what is the power relationship now between, especially in tech, between employees and managers? I mean, you've seen the hard-edged Elon Musk efforts that other people admire. And you, of course, still see most tech companies, which are pretty nice to their remaining employees, for sure. There's something here that feels a little Machiavellian or cold, which is depending on your economic power is how you should decide these things, which I don't subscribe to.

Claire Hughes-Johnson: I think company – I mean, there are humans founding these companies and leading these companies. I've been one of them. And I actually do care about the people who work there because I know they are the ones doing the real work. And I am not looking at my economic status to see where my leverage is against them. And in fact, I think companies used to have more of that mindset. And I think today's worker, if you will, does not really enjoy that mindset. And they want to feel connected to the place they work in a different way than they did 20 years ago when that just didn't seem on the table. But I will also say this: there is still a war for talent, right? Especially if we're talking about engineers, let's not kid ourselves. There's never going to be enough engineers at any time. I mean, I think some of the advances we're seeing, whether it's in AI or low-code tools, are starting to level that, but not meaningfully. So companies that think they have some kind of power, if you will, I think are misguided.

Scott Galloway: Claire, any thoughts on best practices regarding what I've always thought was the most difficult thing about management was compensation?

Claire Hughes-Johnson: I said in the book, I was like, "I could write a whole other book about compensation." And I really don't want to because it's still – like right now you bringing it up, I just got like a little bit of a hive. I don't know. It's brutal. It is brutal. And I had no idea when I walked into being COO of Stripe that that would consume so much of my time and energy.

Scott Galloway: Shocking.

Claire Hughes-Johnson: Like if everyone had said, "What surprised you the most when you joined?" That is what surprised me the most, how much I had to think about compensation. And if you are lucky enough to be in a high growth environment, meaning your value is growing at a really rapid clip, you get all these inequities of how you did compensation two years ago, where the stock price was, how you think about the next set of employees. And it's a monstrously hard thing to do. I mean, I have some ideas and some thoughts, but I don't think anyone has figured out any smart practices here.

Scott Galloway: What are your ideas and thoughts?

Claire Hughes-Johnson: One of my ideas I'll give you is that I came to believe there's a lot of energy wasted on these sort of annual increases, whether that's a merit-based increase or it's a market increase or whatever. You spend all this energy on a few percentage points of additional salary. And right now we're talking about fairly highly paid positions, right? I mean, I'm just going to... And I came to believe that I think we'd be better off saying, okay, it's almost like a school or some institutions do this, which is you're in this job at this level. You're a level three engineer, or you're a level two operations coordinator. And you know what? That salary is this, XK a year, 80K, 120K a year. And that salary is going to get reviewed for market data. So we may move that salary up or down based on what's happening in the market, but we're not going to get into a couple percentage points of "you performed better than you performed." Where you're going to see any additional compensation is going to come from some kind of bonus program or equity refresh program. Because I think too much energy is spent working on $500, and you really want to actually level. So you can't possibly know that Scott should have gotten another $500 than Kara. You should be spending the energy on your top talent and on rewarding the people who had the outsized impact and thinking of how you do that on a – maybe that's twice a year, maybe it's once a year – but that's the thing I want to explore more. The bonus, a bonus, like a bonus.

Kara Swisher: Yeah, a bonus, but it's more like, look, your inputs and your outputs. How did you work? And then how did you impact what we needed to get done?

Kara Swisher: Which means, by the way, you have to build a good way to measure that. And so I think that's the other place people fall down is they put a bonus in place and they have no way to actually tell the impact. And I would love to see more team-based impact, by the way. So much of comp is built around the individual.

Claire Hughes-Johnson: I have a follow-up question around culture. The first company, the only real job I ever had was at Morgan Stanley. And the culture in the implicit agreement between its employees and the organization was: we own you, and you're going to work your ass off. You're going to have no life. And in exchange for that, your career will accelerate faster than it would almost anywhere else, and you're going to make a lot of money for a 24, 30, or 36 year old.

Claire Hughes-Johnson: And then my first client was Levi Strauss and Company. And they took the opposite tact. They said, part of your compensation here is that we recognize you have a life outside of work. We have summer Fridays. We have leave. It is absolutely encouraged to say, "I'm a little league coach and I need to be out of here at one o'clock today." That was encouraged and rewarded.

Claire Hughes-Johnson: I have not, and maybe it's because I've been out of the workplace for a while, seen companies be able to manage or traverse up and down that based on people's individual needs. Have you?

Kara Swisher: Yeah, I thought where you were going is like, yeah, I do think. I remember my mom, who was a college professor, once sort of took me aside and said, "Look, I had to make a choice in my career between money or time." And that's a pretty hard choice that a lot of people feel like they end up making. Traversing up and down that is hard because you can be... I mean, I have a kid who's going to be applying to college. And if you look at colleges, they're making choices. And you're like, "Well, do I want to be in more of this kind of grind environment, but they might have better real-world jobs and internships? Or do I want to be in this sort of more flexible, different kind of academic environment?" And you could choose one or the other. How do you flex it up and down? I don't know, Scott. What do you think?

Scott Galloway: I don't think it happens. I think it's pretty hard to build a culture that has that in it. I mean, one thing I have thought about, back to the team-based work thing, is if you had... You know how sometimes the week of a company, or even you guys, you record your podcast, it's a little slower on this day, then it ramps up to intensity, and then maybe Friday's a little less busy, fewer meetings. I thought about if there's a way to cycle teams through being really high intensity and then having downtime more intentionally. But I haven't really pushed that thinking very far.

Scott Galloway: I think where it rears its ugly head, and the reason why many of these companies that offered the best compensation ultimately became more male-dominated and didn't have as many opportunities for women, is when this really becomes a problem is when people have kids. Specifically when women have kids, who still shoulder a disproportionate amount of the responsibility. So, Morgan Stanley and these high-accelerant, high-compensating, very expectation of massive amount of work and commitment, that's all fine and good until you have kids.

Kara Swisher: You said it. The problem there is that women are being expected to shoulder a disproportionate amount of responsibility.

Scott Galloway: It's not actually women. It's the societal situation.

Kara Swisher: I will say though, when people ask me about working in tech, which yeah it does have a lot of men, but honestly, you couldn't pay me to go work in banking when I was coming out of business school. Like the tech companies, I mean Google, much better environment.

Scott Galloway: Yeah, child care. Much more progressive.

Kara Swisher: Exactly, Kara. Overall benefits and actually a certain amount of flexibility. And you know what? The gold mines of the world have gotten better because of the pressure for talent placed on them by tech companies.

Scott Galloway: Let me ask you a question. You just mentioned AI very briefly. IBM said it will replace over 7,000 employees with AI in the years to come. Is it showing up in HR? It's showing up in all kinds of places. Do you imagine that being them becoming managers? They would certainly intuitively know what people want and need and what their impact is.

Claire Hughes-Johnson: Yeah, you know, Kara, I watched... You guys should watch Sal Khan give a TEDx talk fairly recently where he talked about teaching and AI, and I subscribe to his philosophy. Well, one, I will say to you, it's happening. And if we don't start looking at it and thinking about what it will do, our heads are very far in the sand.

Claire Hughes-Johnson: But what Sal demonstrated, and I think this makes a lot of sense to me, is one, you have to create constraints. So I'm in a teaching model or I'm in a manager leading model. So how do I build tooling that's appropriate for that, that is actually augmenting me? Because sure, as a manager, especially say you've got eight, 12 direct reports, am I there every day, especially in a knowledge-based workforce? Yeah, AI could know what they do.

Claire Hughes-Johnson: You could be having to do the first time you've ever done a deeply analytical project. You've got to present to the team. You could have an assistant that walks you through steps of building a model and helps pressure test what you've built. And I think that's really interesting. Do I think AI replaces the intuition that a human gets? I mean, look, especially when we're in a room together, I can look at your body language. I can smell you. I can see, I can feel you. And I think that is very hard to replicate. But I think an assistant for some of the coaching.

Kara Swisher: Also decisions and decisions. 98% of HR leaders said they'd rely partly on algorithms and software to make decisions on who to cut, for example.

Scott Galloway: That's right.

Kara Swisher: Right. And I think that having something to make you actually, frankly, be more data-driven in certain decisions would be better. Because often the worst, you know, like a promotion. "I just don't like the looks of you."

Scott Galloway: Yeah. Who gets the project?

Kara Swisher: Right. Yeah. "I like the looks of you."

Scott Galloway: Claire, what advice... You're advising a 22-year-old, someone who's really blessed, came out of a good school, maybe have more than one opportunity. What advice do you have in terms of the questions they should be asking themselves around the kind of person they are and about the company such that they can find the right fit out of the gate? I find there's just a total absence of self-awareness. The kids I deal with just go to the highest prestige, highest compensating firm, and oftentimes they're just miserable. What questions should you be asking yourself and about the company?

Claire Hughes-Johnson: Yeah, I love that. And actually, my first operating principle that I talk about is building self-awareness, because I actually think too many leaders and managers don't start with themselves. "What am I good at? What do I need to compliment about myself?" And it's hard to develop that as a younger person. You're talking to a woman who graduated from a very nice college without a job because I had decided I was going to go work in politics and government and I was going to go break into it.

Claire Hughes-Johnson: So my advice that I've been giving pretty openly to a lot of people that age is: you've got to seek to know yourself and figure out what you're interested in. Truly, if you are blessed to be in that situation, you must have true interest and curiosity in something. And I guarantee you, it is not the hot job that everyone's trying to chase right then, the hot company. You've got to do some deep thinking. And if you really don't know, that's a fine thing to do for a few years, go the common path. But the most interesting careers are the ones that are built with, I think, a little bit of a contrarian approach, a different path.

Kara Swisher: So the very last question I have: who was the very best manager you had? The worst?

Claire Hughes-Johnson: Yeah, I think probably, you know, I didn't work much directly as Cheryl's direct report, Kara, but she was an excellent manager.

Kara Swisher: Like, how come?

Claire Hughes-Johnson: She really noticed your work and she was all over you if you were not bringing your A game. But she knew and she got what it was taking to deliver. She was empathetic towards your assignment. And then she was very clear on accountability.

Kara Swisher: In my opinion, did you say who was the worst?

Claire Hughes-Johnson: Yeah, I had so many absentee managers. Never even met with me. Never got a performance... never got feedback. Never met with me. I actually flourished. I was like, "Fine, I manage myself. Thanks very much." But that was not just in tech, by the way. That was in some of my early career. They just didn't care. I don't think they were focused on the work, and I get that. But it certainly didn't make me any better. I mean, if I got better, it was me. It wasn't them.

Kara Swisher: Yeah, it was you. It wasn't them. So someone who was there to have accountability and also understand the struggle you go through.

Claire Hughes-Johnson: Yeah, well, you know, and also give you clarity on what really matters. Like, especially if you're earlier in your career, you're in a system, right? We all know this. Every company, whether it's a small company or a big one or a government institution, you are existing in a system and that system has rules and unspoken things. And someone who's saying to you, "Hey, let's think about how to make you successful in this system and hold you accountable for what you need to get done." They notice you and they show that they care about your outcomes. I don't think it's that hard, by the way, but it is about taking some time. And for some reason, we get very oriented toward the task and we don't think about the people. And I think we pay a price for that. I think a lot of companies pay a price for that.

Kara Swisher: Excellent point. That is an excellent last point. The book is called *Scaling People: Tactics for Management and Company Building*. It's available now. Thank you, Claire.

Claire Hughes-Johnson: Thank you, Kara and Scott. Great to see you.

Scott Galloway: Appreciate it. Nice to meet you, Claire.

Kara Swisher: All right. One more quick break. We'll be back for wins and fails.

[Musical break]

Kara Swisher: Okay, Scott, some wins and fails. What do you have?

Scott Galloway: I'm going to go first, actually. Wins. *Queen Charlotte* on Netflix. I just mentioned it. It was so good. It was so much better than *Bridgerton*.

Kara Swisher: I have to say, yeah, I love the actors that they pulled from *Bridgerton*. Does it have as much sex?

Scott Galloway: It has a lot more sex, actually.

Kara Swisher: *Queen Charlotte*, more sex than *Bridgerton*?

Scott Galloway: There's a lot of sex. There's at least an equal amount, but I felt like there was more. And it also was very touching in many ways. It was about the mental illness of King George as a young person and what Queen Charlotte did. And obviously that's a real story. And this was, of course, Shonda Rhimed up kind of thing. But it was really quite lovely. It's only six episodes. It was a lovely little jewel box of a group. It's very nice. And I really thought, well done. A lot of people don't like it, but I do. But it's very popular on Netflix. And Bella Bajaria, who runs their content, chief content officer, urged me to watch it, which I thought was interesting. And I said, "Oh, all right." And then I did. So I liked it a lot. I will get to the fail in a second. What's your wins and fails?

Kara Swisher: Actually, my win is... You know me, I don't really enjoy your work outside of *Pivot*, but I broke down and I listened to your on interview with Roy Wood. And that was my win. I thought it was really good. I think you did a great job of interviewing him. And I was really impressed with him. I had never heard of him.

Scott Galloway: Yep.

Kara Swisher: And I thought he did the best job since Michelle Wolf. But what he managed to do that maybe Michelle wasn't able to do was he was able to thread the needle by being provocative and saying some inappropriate or uncomfortable things. But he didn't really offend everybody. Everybody walked away feeling fine.

Scott Galloway: Yep.

Kara Swisher: And that is such a... You were talking about the task that the person interviewing President Trump is going to have. That is a tough gig to do at the White House Correspondents Dinner. So I thought he did a great job. And I just really enjoyed listening to him and some of the things he said, that he will never make fun of someone's personal appearance. The way he talked about how he forms a joke, what they think through. I mean, people just think it's someone really funny who gets up there and kind of goes at it. There is a lot of work. They battle test every joke, how they say it, who the subject of it is, what the rhythm, the cadence. And I always knew that was there, but he kind of breaks it down. Anyways, my win is *On with Kara Swisher* interview with Roy Wood.

Scott Galloway: Thank you. I thought that was great.

Kara Swisher: I think you'll really like my Lily Singh one if you can make it into a habit at all. I interviewed her up in Toronto also. Very thoughtful. What I liked about the Roy Wood one is it went very serious. We played a lot of his comedy. Obviously, he's very funny, but he's a very serious-minded person and I really appreciated that.

Scott Galloway: Most comedians are.

Kara Swisher: They are, but he really showed it, right?

Scott Galloway: Yeah, I liked him. I felt it was really... I just felt he... I liked the direction that interview went, right? He could have just been hand-wavy entertaining and he wasn't.

Kara Swisher: What's the other interview you want me to... Oh, Lilly Singh. It's not up yet.

Scott Galloway: I just want to know because the bottom line is that it's not going to happen. I'm a bit long on Kara Swisher right now. There's too much Kara Swisher.

Kara Swisher: What is your fail? How about some life with your Kara Swisher, Scott?

Scott Galloway: Yes, life.

Kara Swisher: Yeah. I was in your apartment. I was touching all your things, as I always like to do.

Scott Galloway: I like that.

Kara Swisher: Yeah, it was nice.

Scott Galloway: I have to say, fail... I don't... I'm trying to think of the fail. Obviously, the shooting, another shooting in Texas, white supremacist, too many guns. I just don't know when people are going to get tired of this. It's really sickening to me. And I would urge everybody to read the *Washington Post* series on what the damage an AR-15 can do to the human body. They have a series called "American Icon: Deadly Weapons, Divided Nation." It's not really a divided nation, but it's all about the AR-15. And they talk to people who own them and why they own them. The police, even though they have AR-15s, aren't happy that other people have them. The trauma. It's just a really good series because this is just... we're now at record levels again in this mall in Texas. And you just get numb to it. And it's always some white supremacist doing this. Very dangerous.

Kara Swisher: Very dangerous.

Scott Galloway: Yeah, but we don't...

Kara Swisher: Yeah. So my fail is kind of the same thing. And that is, and to be clear, we have white supremacists, we have a lot of mentally ill people, we have a lot of young men who are struggling, but we don't over-index relative to other nations. Where we over-index is access to weapons of war, full stop. And I worry that anytime we talk about these very serious issues, it's usually picked up as a weapon of mass distraction to not talk about the real issue. And we don't have a monopoly on video games, mental illness. What we have a monopoly on is AR-15s and access to them or weapons of war.

Scott Galloway: My fail is along the lines of yours. And that is, and I'm trying to ground it in something that motivates people. And you know, when I'm traveling, that day, my blood pressure is just elevated. "When do I need to leave for the airport? What's traffic like?" I'm a little bit of a nervous... just that day I am less healthy because I am operating in the context of slightly but consistently elevated stress and blood pressure any day I'm traveling.

Scott Galloway: But one of the things I didn't realize that would really be a substantial improvement in my life, because I didn't recognize it... When you're in the midst of a crisis, you don't even realize you're in the crisis because you go into operations or triage mode and you don't realize how stressed you were and how hard it was on you until you're out of it because you get this fight or flight and you deal with the situation and you adapt.

Scott Galloway: And what I realized moving to London is that living in the United States... and my message to fellow Americans is: you don't realize the context and the level of elevated stress Americans have to deal with when they drop their kids off at school, when they go into a mall, when they go into a movie theater, when they're walking around a crowded place. The frequency and devastation, horror of these mass shootings is not something that happens in most Western countries. And when I'm in the UK and I drop my kid at school, or I'm at a movie theater or I'm in a crowded place, this imagery, this stress for me that I was living with in the United States is not there because it is entirely different.

Scott Galloway: And my message to fellow Americans is: we don't have to live with this context of stress.

Kara Swisher: Nope.

Scott Galloway: Other nations don't live... Other nations, when they drop their kids at school, don't immediately have any... And I think most parents can't help but occasionally think, "All right, what would happen? How would I respond?"

Kara Swisher: That's it. I would. I think about that a lot. And my son, Alex, went to Texas for a prom this weekend for his girlfriend. And I was like, "Open carry." The first thing I thought of was guns. I don't know why. I just was like, "Guns there. There's a lot of guns." I know it sounds crazy, but I just had been reading about the open carry and everyone carrying it around. Just the presence of so many guns made me nervous. And I know it's crazy. I've gone to Texas myself.

Scott Galloway: Active shooter drills?

Kara Swisher: Yeah. Do they realize what that is? What we're doing to our kids to normalize the notion that you have to prepare for a mass shooter? 22 mass killings this year, collectively 115 deaths. It's on pace to break the record. It's ridiculous. It's just ridiculous.

Scott Galloway: Can I just add a second thing? This weekend, I had a conversation with Louie, and this person who was throttled in the subway was put in that chokehold by the guy on the subway. I get everybody really exhausted by mentally ill homeless people yelling at them on subways, but the death of this guy... and I don't think this guy malevolently meant to kill him, but boy, placing him in a chokehold. And then the issue I have was Eric Adams not understanding that this cannot happen, vigilante killings, whatever. However, again, I don't think this guy meant to do it. I just think citizens should not be chokeholding homeless, mentally ill people on subways. Like, are you kidding me?

Scott Galloway: That's the same level of fear you're talking about. It sort of was gripping New York, this debate. And, you know, my son was like, "I cannot believe this guy did this for that long." But we immediately go to, "All right, 45,000 people are going to die because of handgun deaths." And so you imagine, the way you think of the horror here is, "What if I was one of those very unfortunate people who lost somebody?" And what we don't pay enough attention about is you don't realize how much stress you're enduring, distinctive whether or not it touches your life. Because we live in a context of fear and anxiety around this.

Scott Galloway: And it's always easy to talk about, but I was trying to find good resources. Like, "Okay, what do I do other than vote?" And Sandy Hook Promise, the website at sandyhookpromise.org, has a really thoughtful page on things you can do for gun control advocacy and specific steps and people to call and personally how you would quit yourself and be most effective in advocating for gun prevention violence. But my message is, or my fail is, obviously, this continued violence. But you don't realize until you leave America the context of stress Americans are living in.

Kara Swisher: Yep.

Scott Galloway: It is not, by the way, it is stress that in most other Western nations that also have guns, that also have gun rights, where you can be a responsible gun owner, they don't have to live with that stress. And what we have found in all these studies about happiness is happiness is not only a function of the things you have, economic opportunities and rights. It's absence from a fear that something might be taken away from you. And we need an absence of fear. We need an erosion in the context of stress that all of us deal with in the United States because of this unparalleled precedence of mass shootings.

Kara Swisher: And the other thing is that I thought, I don't know if you noticed this, Scott, but your idea about showing the corpses... supposedly one of the things that really rattled people about this most recent shooting was because it was live streamed, people actually saw the horror. They said, "Oh, my God, this is even worse than I'd imagined what actually happened here." There was a controversy of it being on Twitter. I think the parents should give permission, but they should show the pictures. I just don't know the other way. Anyway, it's just horrific. It's horrific, and the fact that our politicians just kowtow and make it into a ridiculous political issue... they repulse me even more than those...

Scott Galloway: Anyway.

Kara Swisher: Anyway, great show. We want to hear from you, by the way, on these issues. If you don't agree with us, agree with us, whatever. Send us your questions about business, tech, or whatever on your mind. Go to nymag.com/pivot to submit a question for the show, or call 855-51-PIVOT.

Kara Swisher: Scott, thank you for thoughtful wins and fails this week. It was good, and everything was great this week.

Scott Galloway: Thank you, Kara.

Kara Swisher: Anyway, that's the show. We'll be back on Friday with more. Scott, will you please read us out?

Scott Galloway: Today's show was produced by Lara Neiman, Evan Engel, and Taylor Griffin. Ernie Andretat engineered this episode. Thanks also to Drew Burrows and Neil Silverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to *Pivot* from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business. Call me king.

[Advertisements play]