fortune--2020-08-09--A family’s $35 billion fortune evaporates in a blink

A lot can happen in two-and-a-half years.
In early 2018, Georg Schaeffler became Germany’s richest person as shares of Continental AG, the car-part maker in which he and his mother—Maria-Elisabeth Schaeffler-Thumann—own a major stake, surged in price. At the time, their combined fortune totaled $35 billion.
They’re now worth about a quarter of that. That’s partly due to the coronavirus pandemic, which has slowed auto production and significantly curbed sales, as well as the industry’s broader shift toward electric cars. The Schaefflers ended each of the last two years less well-off than they began, and 2020 may be the same. Both have lost about a quarter of their wealth so far this year, according the Bloomberg Billionaires Index, a listing of the world’s 500 richest people.
While they’re still super-wealthy, the slump in the Schaefflers’ fortune is among the biggest on the Bloomberg index and highlights the slowdown in global vehicle production. Georg, 55, and Maria-Elisabeth, 78, also control Schaeffler AG, the German engineering group that has faced similar pressures as Continental. Shares in both companies have tumbled by more than a fifth this year.
A spokesman for the Schaefflers declined to comment.
Rare Swing
Such swings are rare for multi-generational family fortunes of this size, thanks largely to diversification. While founders can be single-minded in their pursuits, their heirs often look to reduce risks by branching out into new ventures. For example, the Mars family began as candy makers but have since pushed into pet-care products, which now comprise about half of annual sales of the business behind their $120 billion fortune. Germany’s Reimann clan have parlayed the proceeds of a chemicals business into a consumer goods empire spanning Krispy Kreme Doughnuts and Panera Bread restaurants.
The Schaefflers are now worth $8.5 billion, according to Bloomberg’s wealth index, though the family may have arrangements to protect them against slumping share prices. Other fortunes linked to the auto industry are also suffering during the pandemic. Susanne Klatten and Stefan Quandt, major shareholders of car-maker Bayerische Motoren Werke AG, and Hyundai Motor Group Chairman Chung Mong-Koo have seen their fortunes fall about 10% this year, according to the Bloomberg index.
Still, the Schaefflers have bounced back before. Their debt-fueled takeover of Continental forced them to ask for emergency support after credit markets contracted in the 2008 financial crisis, but the company’s share price then surged between 2009 and early 2018. In a sign of another potential rebound, Continental’s shares have climbed more than 50% since mid-March, though the company has said its outlook for the rest of the year remains uncertain.
When his father died in 1996, Georg Schaeffler inherited 80% of the ball-bearing business that carries his surname while his mother inherited the rest. Both serve on the supervisory boards of Continental and Schaeffler. While Georg grew up as the heir to an engineering empire, Maria-Elisabeth studied medicine and never expected to embark on a business career.
“I grew into it step by step,” she said in a 2001 interview with the German newspaper Welt am Sonntag.


fortune--2020-08-09--Calls for schools to get ‘creative’ with reopening have largely been ignored. Why?

Black women account for less than 3 % of U.S. doctors .
Is health care finally ready to face racism @ @ @

Early last month, New York magazine published an intriguing proposal for the fast-approaching school year: “This Fall, Classrooms Will Be Too Crowded. Theaters and Malls Will Be Empty. We See a Solution.” Similarly, The Atlantic noted the plethora of unused office buildings and empty college campuses that will be available come fall. “Alternative solutions to parents’ dilemma just require more time, money, and imagination,” the article said.
The words “imagination” and “creativity” have come up often over the past couple months as teachers, parents, and politicians have debated how to reopen schools. With no immediate end in sight for the COVID-19 pandemic, which has killed more than 160,000 Americans, these debates have been contentious.
Some people argue that reopened schools are just asking for a devastating second wave of the pandemic. Others say teachers, like nurses and doctors, should just get on with their jobs, arguing they’re just as essential to society as healthcare workers.
A much discussed solution involves taking the middle ground—in-person instruction, with enough physical space to keep kids and teachers socially-distant. Like the Atlantic article suggests, schools could create more space for their students to socially distance by relocating to a university lecture hall with 200 seats, rather than sticking with a classroom that seats 30.
The result: Younger students, for whom hands-on instruction is more vital, get a better schooling experience. And parents could worry less about childcare during peak working hours. As New York wrote, “Let’s declare an educational emergency and recognize that returning to physical classrooms by the start of the academic year is one of society’s most urgent priorities, even if that means enlarging our concept of what a school building is.”
It may sound like a reasonable plan to salvage a highly difficult choice. But for most major school districts in the U.S., it probably won’t happen. As of Aug. 6, 17 of the largest 20 U.S. school districts are forgoing in-person learning altogether—at least to start the year—out of a fear of more COVID-19 cases. Like the chaotic spring that saw millions of students rapidly switch to remote learning, school in these districts this year will at least partly be online.
As enticing as the alternative classrooms sound, too many proposals are from people who don’t actually teach children, says Mark Weber, a full-time K-12 teacher in Warren Township, N.J., as well as a part-time lecturer at the Graduate School of Education at Rutgers University. The ideas therefore fail to take into consideration a number of potential complications.
“As an educator there are all kinds of questions because you know the set-up needed to take care of your concerns,” Weber says. “Are the kids safe? Are there adequate bathroom facilities? Can you get in and out of facility easily? Can you monitor the children properly? Is liability taken care of?”
Liability is a particularly contentious issue as schools weigh reopening for public and private schools alike—although more so the latter. In Tampa, the Catholic Diocese of St. Petersburg asked parents of its nearly 13,000 students to sign a waiver in case their children become ill, or worse, from COVID-19. An outraged mother called the form a “death release.”
A liability waiver for schooling in an alternative space would potentially then have to account for not only the school, but the office building, movie theater, lecture hall, or whatever space is being used, further complicating matters.
One notable district that is pushing forward with in-person classes happens to be the nation’s largest: New York City. On Friday, New York Gov. Andrew Cuomo announced the state’s schools will be allowed to open for in-person instruction in the fall, though the final decision will come down to local superintendents and officials like New York City Mayor Bill de Blasio.
New York’s plan is a hybrid model, in which students will go to school two to three days a week, and learn remotely on the other days. At press conference last month, the mayor said the city’s education department was looking for spaces in non-school buildings to help alleviate space constraints. But none of these spaces have yet to be disclosed. The education department did not respond to a request for comment.
One 5th grade Brooklyn public school teacher doesn’t expect much to come from these plans. For one, there could be an issue with transportation. “A lot of our kids walk to the building, and I think if their location were to change from day to day or class to class, I think parents would end up taking them to the wrong place,” says the teacher, who spoke on the condition of anonymity because he was not authorized to speak to the press. “But aside from the logistical issues that would come up, right now my school’s priority is people more than it is spaces.”
The teacher says that due to the recent proliferation of charter and private schools, his school has shrunk from more than 1,000 students to around 500. “Half of our classrooms are empty, so providing for social distancing with our entire population wouldn’t be an issue of having enough space,” the teacher said. “It would be an issue of having proper supervision.”
Some schools are experimenting less with alternative indoor space and more with outdoor space. A recent NBC News article outlined measures some districts have taken, from buying tents and all-weather snowsuits to gathering tree stumps for outdoor seating. “Schools need to figure out a new solution because the inside of the building doesn’t work as the only solution and online learning doesn’t work as the only solution,” Sharon Danks, CEO of Green Schoolyards America, an organization focused on adding green spaces to school grounds, told NBC. But others, like the superintendent of a Phoenix area district called it a “gimmick,” saying weather will be too inconsistent for it to truly work year round.
“You can always find one example, one or two exceptions” of schools experimenting with alternative spaces,” says Weber, the New Jersey teacher and university lecturer. “But then you’re making policy by anecdote. What we really should be talking about is what do we need to do to keep school reopenings up to scale,” like insuring that staff have access to enough personal protective equipment, or that additional teachers are hired to supervise smaller class sizes in an effort to reduce the spread.
And for most school districts, the answer has been less about creativity than it is practicality. Remote learning isn’t perfect, but educators have decided it is easier to implement than creating pop-up schools. “We have to be guided by the science, period,” Chicago Mayor Lori Lightfoot said last week while announcing that the city’s public schools would shift from a hybrid model to fully-remote. When in-person classes were still on the table weeks ago, “we were in a very different place in the arc of the pandemic,” she said.
By forgoing any level of in-person education, Chicago’s decision seems to underline the fear of sending students and teachers out of their homes to any physical space, school or non-school. “We have to acknowledge that we are trying to pick the least worst option,” Weber said. Even if it’s not as imaginative.


fortune--2020-08-09--Black-owned food businesses are seeing a surge in publicity and customers—and hope that investors ar

Black-owned food businesses are seeing a surge in publicity and customers—and hope that investors are next

Calls for schools to get ‘ creative ’ with reopening have largely been ignored .
Why ?

It was a regular afternoon in May for Denise Woodard. Her daughter raced past in the background while she attended Zoom meetings from her Jersey City apartment in the black leggings and T-shirt combo that had been her uniform even before coronavirus. But when she went to check her email, the founder of Partake Foods experienced something new: hundreds of new messages, all from retailers and companies interested in selling her vegan, allergy-friendly, gluten-free cookies.
Before the pandemic, Woodard’s company Partake Foods was already set to launch nationwide with Target and hit 2,700 stores by the end of 2020. But after the murder of George Floyd by Minnesota police officers, Woodard and other Black business owners suddenly found themselves receiving more attention, the kind of interest from companies they had only dreamed of working with, as Black Lives Matter protests began in cities across the globe. After being featured in multiple articles as a Black ‘business to support,’ Woodard says Partake has taken off.
“They’ve just gone up and up and up. We’ve continued to have record months,” Woodard says, adding that she’s been working from 5 a.m. to 9 p.m. to get through incoming emails. “All of that extra love that has come our way because of this, we’re trying to pay it forward and support the Black community even more.”
Between May 25 and July 10, Yelp reported over 2,500,000 searches for Black-owned businesses— a 7,043% increase from the same time period last year. On The New York Times bestseller list, Black authors swept the board and titles addressing racism filled the top 10. In the past month alone, marketing agencies like C+R Research have received a huge spike in requests for educational presentations about the Black community and Black consumers.
“Our most recent webinar with Black consumers broke attendance records from our client ranks, more than tripling sign-ups compared to webinars we have done on other topics,” Ashleigh Williams, a researcher for the agency, told Fortune. “Brands are finally starting to realize the importance of investing in understanding Black people and other minorities with them.”
Williams has received all kinds of questions, from “Should we refer to them as Black or African American?” and “Is it the right time to focus on the Black community?” to what she calls the more complex and committed: “What should we do to fuel change?”
A surge in interest
The food industry in particular has seen a surge in interest—both as a result of consumers staying home to cook—and also looking to connect with authentic Black-owned brands, that often have developed a strong identity and story that is closely tied to heritage and culture.
“We could see it immediately after George Floyd was murdered and people started curating these Black owned-lists,” Woodard says. “There were some accounts and retailers where we’ve been reaching out literally for years with no response who are now very interested in onboarding our products.”
Partake Foods sales in the month of June were bigger than its entire e-commerce business for 2019, Woodard says. She’s thankful for the recognition and interest—but there’s guilt and anger too. While the flood of interest pushes her business close to capacity, Woodard has also been receiving more and more requests to speak on panels about race. On top of taking care of her five-year-old daughter and coping with her own reaction to the trauma of police brutality, Woodard is exhausted.
“Why weren’t these people reaching out to me before? I feel bad when I can’t get back to everyone or when I can’t say yes to all the things, but I’ve been trying to work on saying no more and owning my time,” Woodard says.
A Dozen Cousins founder Ibraheem Basir. Courtesy of Dozen Cousins
Ibraheem Basir, who grew up in Brooklyn’s Fort Greene, is another entrepreneur who has tapped into the burgeoning demand for authentic flavors. Months after launching his ready-to-eat bean company in 2018, A Dozen Cousins, Basir won a NEXTY award for best new pantry product from the biggest trade show in the industry, Natural Products Expo West. Around a crowded dinner table —he actually has a couple dozen cousins — Basir grew up with the flavors of the Caribbean, Latin America and the deep south. The proof is in the beans: consumers loved those flavors too, and A Dozen Cousins is the No. 1 seller in their category on Amazon.
“People are so used to eating global food, but for some reason in the supermarket, the industry hasn’t made that same connection.” When quarantine sent families scrambling to stock up on food, A Dozen Cousins saw “explosive” growth in March and April, with another jump in June. While they are happy to lean into the moment, founders like Basir do wonder if this moment is will grow into something bigger or if investors will continue overlooking Black companies. In 2016, a study reported that all startups raised on average $1.14 million during their first funding round. Black startups only averaged $42,000. When the study looked at only Black women, the median raised was $0.
Hoping for change
As an alumnus of the University of Pennsylvania’s Wharton School of Business and former marketing manager for General Mills, Basir had a vast network to lean on. But for Black business owners without those advantages, Basir says the challenge of attracting mainstream investors still remains. One 2011 study of the relationships between startups and VCs found that investors are more willing to invest in the startups that their peers are familiar with. When 81 percent of VC funds have no Black investors, Black founders who did not build their network by attending top MBA programs or working for big-name companies find themselves left out of the kind of networks crucial to receiving funding.
“We all understand that a lot of times people do things for marketing purposes,” Basir says. “I’m much more excited to hear people speak about a long-standing commitment that either they’ve already had or one that they’re willing to commit to over an extended period.”
Eniac Ventures founder Nihal Mehta took to Twitter in May to offer free appointments to Black founders. “Dear black founder, as an entrepreneur and VC it’s my responsibility to mentor and invest in you,” he wrote. “Bridging wealth inequity is one way we can help address our structural racism.” In less than 12 hours, his investment firm had booked over a hundred 15-minute meetings.
Other larger firms have rolled out similar intiatives. In May, PayPal announced a $530 million plan to invest in Black-owned businesses with short and longterm goals, $500 million of which the company says it will invest directly into Black startups. The company committed to matching employee donations and $10 for every volunteer hour, up to $500,000. Internally, Paypal committed $15 million to support recruiting and advancement for employees of color. JPMorgan Chase committed to hiring 4,000 Black college graduates by 2024 and announced a $5 million investment to its Advancing Black Pathways program to provide resources and support for Black businesses.
Malika and Jamila Augustin founded Caribbean subscription box and grocery service Callaloo Box. Courtesy of Callaloo Box
And while BLCK VC launched well ahead of the current moment, in 2018, their mission is still the same: Turn 200 black investors into 400 black investors by 2024. Founded by Storm Ventures’ Frederik Groce and Dolls Kill’s Sydney Sykes, BLCK VC aims to close the investment gap by developing a community to support Black venture investors. If a firm is looking to hire more diverse investors, BLCK VC has suggestions ready.
Malika and Jamila Augustin don’t have investors yet, but the explosion of interest is enough to keep business going for the two sisters who founded Caribbean subscription box and grocery service Callaloo Box. When the sisters moved to New York from Trinidad they couldn’t find the Trinidadian brands they grew up with, even in the city. Visiting home became an opportunity to not only see loved ones, but to bring back bottles of ketchup—sweeter and less tart than the American version—to feel at home. Though the business had been successful since launching in 2017, it suddenly exploded during the pandemic. As summer began, they found themselves featured in Cosmopolitan. Their orders tripled. They struggled to keep their shipping time, previously two days, to under a week.
“We could have been around forever and probably would have never gotten mentioned in many of those publications,” Jamila said. “There are so many people in our market that we’re now reaching because of it.”
August 12: This story has been updated to include Sydney Sykes’ current title and the correct spelling of her last name.


fortune--2020-08-09--How the government’s new real-time payments system could transform commerce

On Thursday, the Federal Reserve unveiled new details about FedNow Service—a new real-time payments platform that would enable financial institutions in the U.S. to clear and settle transactions in virtually instantaneous fashion.
The Fed announced its plans for FedNowService almost one year ago to the day, and has since been receiving public comments on the platform, what it should look like, and how it should operate. The goal is to develop a widely accessible, “24x7x365” instant payments infrastructure that would “modernize the U.S. payment system and bring the benefits of instant payments broadly to communities across the country,” according to the Fed.
While the Fed has provided payment and settlement services to the financial system since its founding more than a century ago, FedNow Service would represent an expansive, tech-enabled leap forward—one allowing individuals and businesses to transfer funds in a matter of seconds at any time, on any day (including weekends and holidays).
The U.S. lags behind much of the world in this regard; dozens of developed and developing nations around the world—including the likes of the U.K., India, Poland, Mexico, and Nigeria—already operate their own real-time payments infrastructures. Though The Clearing House—a collective comprising most of America’s largest banks and financial institutions—did launch its own real-time payments platform, known as RTP, in 2017, that system remains far from universally adopted.
The Fed has relationships with more than 10,000 different financial institutions across the country, giving it the ability to develop a real-time payments system that virtually all American banks can access to facilitate the near-instant flow of funds. Individuals and businesses would be able to send up to $25,000 through the FedNow Service, though the Fed said Thursday that it would reevaluate that figure after numerous commenters suggested a larger transaction limit.
The benefits of a state-of-the-art, real-time payment infrastructure would appear to be wide-ranging. In addition to allowing businesses of all types to access funds and manage their cash flow in a more flexible manner, it would also allow individuals to send and receive money more quickly, potentially helping those facing financial constraints to avoid penalties like overdraft and late fees.
While many banks and non-bank payment services (like PayPal and Square) already offer instant payments and transfers through The Clearing House’s RTP network, such services often come with additional fees. By creating a wider-reaching platform, the Fed believes FedNow Service would stimulate “healthy competition” in the real-time payments space, and result in “efficiencies related to pricing, service quality, and innovation.”
As Federal Reserve governor Lael Brainard noted Thursday, the need for a ubiquitous real-time payments system has become increasingly apparent at a time when the U.S. government has had to transfer billions of dollars in stimulus funds to Americans in need of financial assistance during the coronavirus pandemic.
“The rapid expenditure of COVID emergency relief payments highlighted the critical importance of having a resilient instant payments infrastructure with nationwide reach, especially for households and small businesses with cashflow constraints,” Brainard said.
Not all observers agree with the Fed’s approach. The central bank noted Thursday that it received more than 2,200 letters from commenters arguing that it “should not operate in competition with the private sector,” and that FedNow Service would represent “an inappropriate expansion of the Federal Reserve’s role.”
But Fed itself counters by noting that it would be playing the same “operational role” within the national payment system that it always has—one working in conjunction with the private sector, rather than competing against it. It notes that no other “traditional” payment system in the U.S. has only one private-sector provider like The Clearing House’s RTP, and that such a dynamic would “create significant risks to the safety and efficiency of the nation’s payment system”—including “creat[ing] a single point of failure in the nation’s instant payments infrastructure.”
The central bank said its targeted launch date for FedNow Service remains “2023 or 2024,” with a more specific time frame to come. The Fed will take a “phased approach” to rolling out the platform; an initial launch will offer “baseline functionality” with the goal of “help[ing] banks manage the transition to a 24x7x365 service,” and that will be followed by additional features and enhancements to be “introduced over time.”


fortune--2020-08-09--Why you can trust the new coronavirus contact-tracing apps to safeguard your privacy

A major tool in controlling any pandemic is what’s known as contact tracing. Broadly, contact tracing means letting everyone who has been near an infected patient know that they themselves should get tested and self-isolate. Normally it’s a labor-intensive task, but a coming wave of contact-tracing apps for mobile devices could make the process far more efficient, fast, and widespread.
There’s just one problem. The public has seen many times over the past decade that they shouldn’t trust digital tools with their information, especially sensitive information such as health data. That might make people hesitant to use the new contact-tracing apps, but to be most effective, the apps have to be used by a critical mass of the population in an area. Researchers at Oxford University estimate that 60% of a population using the apps would have a major impact.
Luckily, the new contact-tracing apps are designed to protect user information in ways companies like Facebook and Equifax have failed to do. The apps are based on a new anonymous, largely decentralized data protocol created by a historic collaboration between Apple and Google. Among other features, the system allows iOS and Android devices to interact in ways they usually can’t.
The first of the new apps using the system arrived in the U.S. on Wednesday, when Virginia released its COVIDWISE contact-tracing app. Similar apps are expected to follow from other state health authorities, and all of them will be able to share data using the Apple-Google system.
But why should anyone trust them?
The short answer: Apps like COVIDWISE simply don’t collect any data about you. They don’t track or record location data from phones or personally identifying data about users. Instead, the apps detect contact with an infected person through a neat trick combining short-range Bluetooth signals and an anonymous data protocol that stores almost everything on users’ devices.
When two devices with a contact-tracing app are near each other, they’ll automatically exchange digital “keys,” random and unique strings of numbers, over Bluetooth. The digital keys for a device are changed randomly every 10 to 20 minutes, and each device keeps a two-week record of every key it has encountered.
Storing these contact records on individual devices, instead of a centralized server, makes the data much harder to steal. And because the key codes don’t include any identifying information, even a hacker who somehow stole the data directly from a phone wouldn’t come away with anything particularly useful.
“One analogy that’s good is, if you lose a piece of paper with your bank account on it, it’s not that bad,” says Tina White, executive director of Stanford’s COVID Watch program, which developed some of the ideas used by the system. “That’s how you should feel about this—it’s just random numbers.”
But if someone tests positive for COVID, those anonymous random numbers become crucial to warning others of possible exposure.
A COVIDWISE user who tests positive for the coronavirus can report it in the app. To prevent false reports, this can only be done using a code provided by Virginia’s Department of Public Health. Like every element of the system, the self-reporting is entirely voluntary and doesn’t send any personal information to COVIDWISE.
Instead, after a report is made, the app uploads the infected user’s anonymous device codes over the prior 14 days to a health agency server—the only centralized element of the system. Every COVIDWISE app checks these coded results periodically, and if there are any matches with the anonymous contact records on the device, it notifies the user that they may have been exposed. No information is shared about the location or time of the exposure, or about the individual who tested positive—just that an exposure may have occurred.
Further, no information about who has been exposed, or even where exposures happened, is transmitted to the health agencies that oversee the apps. That means it’s up to individual users to respond to their exposure, such as by getting tested themselves.
It’s important to note that the Apple-Google data system can be used only by apps developed or approved by state health authorities. There are competing systems that may work differently and could have fewer privacy protections.
It’s also too soon to conclusively say apps using the Apple-Google system can’t be somehow exploited—hackers are endlessly inventive. But the unusual structure of the new apps seems to at least limit those risks, while helping control a disease whose costs are already too high.


fortune--2020-08-09--Black women account for less than 3% of U.S. doctors. Is health care finally ready to face racism an

Black women account for less than 3% of U.S. doctors. Is health care finally ready to face racism and sexism?

Uché Blackstock’s experience at her last employer might sound depressingly familiar to many Black employees across corporate America.
An emergency physician who spent eight years as an assistant professor at New York University’s School of Medicine, Blackstock is also a Black woman who saw the many ways in which racism and sexism damaged the health of her patients. Determined to make a difference, she started running training sessions about unconscious bias at her medical school and elsewhere, and eventually became the faculty director of recruitment, retention, and inclusion for NYU’s office of diversity affairs. But while the extra work she took on is critical to addressing long-standing problems in medicine—a field that underserves patients of color and includes vanishingly few Black or Latinx doctors—Blackstock says her contributions were undervalued by colleagues and superiors who weren’t personally affected by unconscious—or conscious—bias.
“People think of medicine as innovative and pushing the limits—but it’s probably one of the most conservative environments that I’ve ever been in,” Blackstock says. “It’s very resistant to change.”
By the end of 2019, she decided to walk away from academic medicine, leaving behind a recent promotion to associate professor and a scorching Stat News op-ed about “a toxic and oppressive work environment that instilled in me fear of retaliation for being vocal about racism and sexism within the institution.”
A spokesperson for NYU noted that it had promoted Blackstock, and said in an emailed statement that the school has “continued to advance diversity in the workplace and to combat the effects of unconscious and conscious bias in medicine.”
Blackstock now runs her own consulting firm, Advancing Health Equity, and has become an increasingly visible public expert about the impacts of the COVID-19 pandemic and systemic racism on Black patients and other people of color. She’s also holding on to some part-time clinical work and spent the worst of New York’s pandemic surge this spring treating coronavirus patients at an urgent-care clinic.
Earlier this summer, Blackstock was planning to stop seeing patients entirely, to focus more on her health care equity work. She’s since decided to continue practicing at reduced hours, meaning that medicine gets to keep one of the few professionals that it desperately needs more of: the 24,100 Black women who make up only about 2.6% of all active physicians in the United States.
A health care ‘self-reckoning’
“It is a significant problem,” says Laurie Zephyrin, a physician and former director of reproductive health at the U.S. Department of Veterans Affairs, who’s now the vice president of delivery system reform at the Commonwealth Fund.
“Study after study shows the positive benefits of having a diverse workforce in providing health care,” she adds. “Training, recruiting, and retaining diverse providers—providers of color, Black women, Black men—that’s important.”
The need for a more diverse workforce, and many employers’ repeated failures to create one will likely resonate for Black employees and other workers of color across industries, as Fortune’s Working While Black project and RaceAhead newsletter have chronicled. But the stakes are heightened in the “first, do no harm” realm of medicine, a field whose position somewhat outside the for-profit corporate sector—and, as Blackstock points out, whose reputation for innovative, science-based thinking—sometimes obscure just how stark its discrimination and lack of diversity can be.
The low percentage of Black women doctors represents a broad and long-standing problem in medicine. Only 36% of doctors are women of any race, according to the Association of American Medical Colleges. Only 5% of all active physicians are Black, compared with the 13% of the U.S. population that is Black.
The numbers are equally bad, if not worse, for physicians who are Hispanic or Latinx: Only 5.8% of doctors are Hispanic, according to the AAMC, compared with 18% of the overall U.S. population; only 2.4% of active physicians are Hispanic women.
These statistics rival the breathtaking lack of diversity at large tech companies, which have drawn criticism in recent years for the low-single-digit percentages of Black and Latinx employees they employ. Now, amid a pandemic that has disproportionately killed people from those same communities, and a national reckoning over racism, some doctors and public health experts are drawing new attention to the long-standing racial inequities that damage the health of people of color in America—and that are exacerbated by the low numbers of professionals from these communities who are able to reach the highest positions in medicine.
“On my more optimistic days, I think that the conversation that we’re having now around these systemic issues of race and inequality could potentially be really well utilized by the health care industry,” says Adia Harvey Wingfield, a professor of sociology at Washington University in St. Louis, and the author of Flatlining: Race, Work, and Health Care in the New Economy.
But “there would need to be an industrywide focus on self-reckoning, about how the patterns and practices that are present in health care contribute to the marginalization and exclusion of Black workers,” she adds. “The health care industry would need to institute an explicit and overt focus on racial diversity—and not simply make it something that is expected to happen by happenstance.”
Hospitals and health care institutions often “don’t do the necessary work of making spaces more accessible and available to communities of color,” instead leaving that work up to their few Black employees, says Adia Harvey Wingfield, a professor of sociology at Washington University in St. Louis. Sean Garcia
Happenstance hasn’t gotten Black doctors very far in medicine, as the numbers show. The reasons for their low percentage in the workforce include many that are shared across the broader conversation about systemic racism: Black Americans have less access to wealth, housing, education, and health care, meaning that Black students interested in becoming physicians generally have more barriers to overcome to enter and stay in the field.
Some of these socioeconomic disparities start with early childhood education and “access to solid STEM training in K to 12,” and then continue through higher education, Wingfield says.
Nor is it enough just to qualify, and be able to pay, for medical school; applicants also have to fly across the country for interviews, and pay for test prep and fees for the tests themselves, in a process that often costs up to $10,000. That’s just a prelude; the average medical student graduates with around $200,000 in debt. (In 2018, NYU started relieving some of these costs for its medical students by guaranteeing free tuition.)
“We know that Black Americans are disproportionately less resourced when it comes to income and wealth than white communities,” Wingfield says. “For doctors, those sorts of issues span a number of institutions, and make it more difficult to enter and remain in the field.”
Black job candidates also often face structural internal barriers in other areas of health care, aside from either obvious prejudice or unconscious bias. Some nursing programs, for example, require traditional four-year degrees instead of community college degrees, which may “inadvertently weed out Black applicants who are interested in the field,” Wingfield says.
And then there are the obvious instances of racism and systemic bias that Black doctors and other health care workers report in their training or workplaces. “In our education, traditionally, racism in health care hasn’t been addressed at all,” Blackstock says. “It’s more so now—I think medical schools are really trying to include it in their curriculums—but it’s been a hard push that’s really come from Black students and faculty at these institutions.”
There’s also obviously a need for better education about the impact of systemic racism on health long before medical school. It’s something that David R. Williams, a public health expert and Harvard University professor, has spent his career teaching medical students about—and says that many of them arrive completely ignorant of.
Williams blames this ignorance not on his students but on a society that has allowed many white Americans to achieve positions of privilege and power without learning about—or reckoning with—the systemic impacts of racism. Over the course of a career at Yale, University of Michigan, and Harvard, “I have taught some of America’s best and brightest students,” he says. “And many of them—I would arguably say most of them—are clueless about the degree of racial inequities that exist.”
Racial outsourcing
Even before the pandemic that has disproportionately harmed Black and brown people, Black Americans had shorter life spans and were more likely to suffer from a wide range of chronic health conditions. For example, Black women are at particularly high risk of heart disease and strokes, and are much more likely to die from childbirth and breast cancer than white women.
These problems are exacerbated by a workforce dominated by white and male doctors, who often tend to dismiss the health concerns of women and people of color—or to rely on harmful stereotypes when treating them. For example, in the research for her book, Wingfield observed stereotypes that she attributes in part to the lingering influence of the 1980s’ drug epidemic, and the “war on drugs” policies of penalizing rather than treating people with drug addictions.
“Many Black practitioners that I interviewed still see vestiges of that today in their work, where white peers will make racial stereotypes about patient populations,” she says. “They expect that these patients are just simply ‘drug users seeking a fix,’ or that they are people who are too lazy or unintelligent to take care of their health.”
As a result, Black doctors and other health care workers who want to combat those racist assumptions and make sure that Black patients receive fair treatment in the health care system often take on the unpaid work of what Wingfield calls “racial outsourcing.”
That involves “Black workers doing more to make sure that patients felt that they were receiving a fair equitable experience in the health care system,” she explains. “Institutions don’t do the necessary work of making spaces more accessible and available to communities of color, but instead leave that work up to the few Black professionals that are in their employ.”
As a result, these employees often end up feeling “exploited and used by the institutions where they work,” Wingfield says. “For Black health care workers, that disparity means that there’s a lot more work that they have to do for patient care—not only in terms of dealing with patients who may suffer from existing health disparities, but also in dealing with colleagues and in some cases, supervisors, who make their jobs more difficult by mistreating the patients that they’re trying to care for.”
Now, she and other public health experts and doctors say they are cautiously optimistic about the attention that medical schools, hospitals, and other health care organizations are paying to the national protests against racism—and the long-term changes they need to make to address their own systemic issues.
Tina Sacks, an assistant professor at UC–Berkeley’s School of Social Welfare and the author of Invisible Visits: Black Middle-Class Women in the American Healthcare System, says she’s heartened by some medical students she is advising as part of a Berkeley joint program with UC–San Francisco. Most of those students are not Black, but “they have started to interrogate and really push back against how that outdated way of thinking about race actually contributes to health inequities,” Sacks says. “It’s not only about unconscious bias. These medical students are saying, ‘This is overt, and we are being trained to sort people based on their race, when that has nothing to do with their underlying health condition.’ That’s super helpful for me as we start to think about the future of American medicine.”
Back in Brooklyn, Uché Blackstock is hoping that her advocacy, as part of this larger reckoning, can help draw more attention to the many ways that more diversity within medicine’s top ranks can improve health care outcomes for all patients.
“Work needs to be done, and it needs to be a multipronged approach,” she says. “We know that having a diverse workforce is one of the solutions. It’s not the solution, but it’s one of them.”


fortune--2020-08-10--A blueprint for redesigning the office in the pandemic era

For many of us, the old reality of trekking to work at an office every day has begun to feel like a distant memory. Months of working from home—necessary to stem the spread of the coronavirus—have forced us into new routines. And the idea of going back to our desks feels a little scary—literally. In a recent poll by consulting firm Korn Ferry, 50% of respondents said they were afraid to return to their offices. As more companies experiment with reopening, there is mounting pressure to convey a sense of safety to employees. That is spurring a reimagining of the workplace in the pandemic era. “Right now, to start to bring people back to the office, it’s all about reorienting circulation and reorganizing space,” CEO Andrew Cogan of office and home design firm Knoll recently told Fortune.
The adjustment to this redesigned reality won’t be easy or automatic for employees, says Bill Knightly, the chief executive of global occupier services at commercial real estate firm Cushman & Wakefield. Coming back after months away is strange enough, and now workers will need to learn a whole new set of procedures. “We’re asking them to comply with brand new protocols that are unfamiliar in a scenario or setting where they’ve been restricted in terms of their movement,” says Knightly, who runs Cushman’s business managing real estate for big corporate clients. “So that’s extremely challenging to try to encourage and nudge and get compliance with those behaviors.”
To better understand what the new office experience might be like, we studied the latest guidelines from Cushman & Wakefield and other commercial real estate firms such as CBRE Group. What’s out: crowded open-office work areas and collaboration spaces, touching door handles, and communal coffee machines. (Getting your caffeine fix pre-commute will be key.) What may be in: density monitoring, to limit the number of employees in the office on a given day; going to meetings from your desk via videoconference; heavy-duty air filters; and interior design elements, such as new carpeting, that help reinforce social distancing.
Here’s a detailed blueprint for redesigning office spaces in the pandemic era:
Reception
To control and monitor access, only one entrance point should be used. A new guest check-in system permits touchless registration using a cell phone. Body temperature is scanned to filter potential cases of illness. Hand sanitizer and PPE are provided to guests. Receptionists are protected by a glass partition.
Waiting area
Chairs are removed to discourage lingering.
Density monitoring
Sensors are used to track how many people are using common spaces. Dashboards at entries display attendance. Workers may use an online reservation system to see how many people will be in each day.
Signs
Promote safe workplace practices.
Elevators
Elevator attendants manage flow and prevent overcrowding of carriages. Floor stickers establish distancing zones and describe where to stand.
There should be ongoing cleaning of high-touch surfaces such as buttons.
Mailroom
Shipping areas should be set apart from the rest of the company. Mailroom workers will sanitize all items arriving in the workplace, from packages to food deliveries. Sterilizing booths may be equipped with devices that use ultraviolet light to kill viruses.
Doors
Nonessential doors need to be removed or affixed in open positions. Provide disinfectant wipes at entry points where doors remain.
Light switches
Remain always on or movement detectors are used.
Floor mats
Are sanitized frequently
Bicycle racks
Additional bike racks are added to accommodate commuters who choose to avoid public transportation.
Delivery clerks
Deliver sanitized mail as well as pre-requested office supplies.
Personal effects
Individual storage for clothes is provided. Nonessential items should not be stored at desks.
Traffic control
Increments of acceptable social distance should be clearly marked on floors where lines could form. Add signs showing foot-traffic direction.
Isolation room
A specific enclosed room should be designated to isolate any person who experiences symptoms of an illness. A “quarantine marshal” will coordinate the response and notify medical professionals.
Block captains
Certain employees (organized by floor or company) will have responsibility for ensuring that everyone in the building is respecting precautions and protocols. They will also facilitate and maintain communication with building management.
Air filters
Heavy-duty HVAC filters can help reduce airborne contaminants, including viruses.
PPE stocks
Offices should obtain, store, and manage supplies of all required personal protective equipment (PPE). And keeping a careful inventory of cleaning materials is critical to ensure that supplies match building occupancy.
Panels are added between desks. Workers receive disposable wipes to clean their own work surface as well as disposable place mats. No-touch trash cans as well as PPE-specific trash cans are provided. Fabric-upholstered chairs should be replaced with easily cleaned plastic chairs. There’s no borrowing of phones or any desk equipment. Use of mobile phones is encouraged.
Distancing
Workers should sit only at every other desk. The alternate desks should be off-limits or removed altogether.
Smaller rooms
Private offices and small spaces are for single-occupant use only. Groups are prohibited.
Meeting rooms
Large gatherings are off-limits, so meeting rooms can be converted to host workstations and desaturate existing open spaces. Use of virtual collaboration tools such as videoconferencing is encouraged, even for those physically present in the office.
Minimal contact
The fewer the shared objects that can be touched, the better. Whiteboard pens are removed, as well as remote controls. Printers are eliminated.
Heavy-usage areas
Determine which areas require thorough and more frequent cleaning owing to heavy usage, such as office gyms, conference rooms, and restrooms. If fitness facilities are reopened, the equipment should be rearranged to achieve social distancing; wearing masks is required.
Cafeterias
Only prepackaged foods should be offered. Plexiglas dividers separate service providers and diners. Queuing areas need clear signage, and self-service should be avoided. Coffeepots are removed. Furniture is rearranged to promote social distancing.
A version of this article appears in the August/September 2020 issue of Fortune with the headline “Reimagining the office for the pandemic era.”


fortune--2020-08-10--The hidden—but very real—cost of working from home

Closing schools is ‘ socially intolerable , ’ says Boris Johnson .
Teachers and parents are far less assured

In a time of social distancing and remote work, Goldman Sachs CEO David Solomon raised a surprising topic during his latest earnings call with Wall Street analysts: togetherness. “Our firm has always had a team-oriented apprenticeship culture, and we benefit from being and working together,” he explained. While many CEOs seem in no hurry to refill their office buildings, and several have told employees they need never return to the office, Solomon made it clear that he wants his colleagues back in the office as soon as is safely possible. He himself has never stopped going to the office through the pandemic.
Solomon’s desire to bring his employees back together physically even as the coronavirus continues to rage around the globe, particularly in the U.S., isn’t rooted in any simple calculation of efficiency. Facebook, Fujitsu, Nationwide, Otis, Siemens, Twitter, and other major companies have announced that large portions of their workforces may or must work remotely from now on. It saves money and may increase productivity, managers say. Many employees prefer it. A recent survey by Korn Ferry found that 64% of workers feel that they’re more productive at home.
But a group of hyper-successful contrarians—Apple, Amazon, Goldman, Google, and others—have pointedly not offered the indefinite-WFH option. They want employees back physically together. Considerable evidence supports their stance. It also shows that when employers offer indefinite WFH, they’re messing with something more powerful than they may realize.
Allowing or requiring employees to leave the workplace was clearly the right thing to do when the pandemic arrived, and for many companies it will remain the right thing for some time to protect the health of their people. Google, acknowledging the likely timing of vaccine development and distribution, recently extended its voluntary WFH policy until July 2021. Some closings are imperative for public health. But employers who have a choice should keep in mind that the costs of WFH are high and may not be obvious.
The stiffest penalty may be lost creativity and innovation. Every company is desperate for good ideas in this environment, and it would be hard to design a worse policy for finding them than unnecessarily requiring or encouraging employees to stay apart.
Face-to-face matters
In one of the most revealing studies of creativity in the workplace to date, researchers from MIT, Northeastern University, University of Cologne, University of Bamberg, and Aalto University studied several teams working on projects involving computer science, economics, psychology, and other fields; their findings were published in the International Journal of Organisational Design and Engineering in 2012. The subjects wore small badges called sociometers to record interactions within the teams, and the creativity and quality of the teams’ ideas were rated by peers on a scale of one to five. The results show strikingly what a deeply human experience it is to be creative in a group. The more that group members faced each other, the more creative was their output. The more they looked into each other’s eyes, the more creative they were. The more willing they were to confide in one another, the more creative they were.
Facing each other, looking into the eyes, confiding—all those behaviors reflect and build trust. The researchers measured trust within the groups and found that it was crucial to the whole process. Their conclusion: “There is no substitute for face-to-face interaction to build up this trust.”
Those high-achieving contrarian employers have understood all this for years. For example, Google’s free top-quality cafeteria meals aren’t merely a perk. They’re a way to bring together employees who might otherwise never see each other, and to make them wait in lines, where they’ll talk. Long, narrow cafeteria tables increase the odds of sitting next to or across from—and thus talking with—strangers. Such chance interactions are where successful innovations often originate. Gmail, Google News, and Street View came from engineers chatting at lunch.
Apple’s Steve Jobs obsessed over face-to-face meetings. “There’s a temptation in our networked age to think that ideas can be developed by email and iChat,” he told Walter Isaacson, author of a bestselling Jobs biography. “That’s crazy. Creativity comes from spontaneous meetings, from random discussions.” When asked by Fortune to recount the birth of the iPhone, Jobs said the earliest ideas arose from informal gabbing: “We all had cell phones. We just hated them, they were so awful to use.” That “watercooler talk” is the “one part of the iPhone mythology that everyone tends to agree on,” author Brian Merchant reports in his book The One Device.
Missing sparks
But with today’s technology, does optimal interaction really have to be in person? Won’t a Zoom meeting work almost as well? No, it won’t. We are hardwired from our development as humans to value the physical presence of others. It’s deeper than most of us think.
Consider something we’re not supposed to do now: shaking hands. Job applicants who shake hands get rated more highly by evaluators than those who don’t, even when everything else about them is the same. We judge people who shake hands to be more trustworthy and more competent than those who don’t. Shaking hands is literally an electric experience: Brain imaging shows that we energize the region associated with reward sensitivity—that is, we feel rewarded—by shaking hands, or merely by seeing other people shake.
There is a similar physical response when we converse with someone face-to-face. The pupils of our eyes constrict and dilate in parallel with the other person’s. Neither of us is aware it’s happening, but it builds trust. When we’re physically together, we unconsciously mimic one another’s posture, gestures, and tone of voice, which builds trust and empathy.
Video is far inferior. Posture and gestures are partly or entirely invisible. People never look each other in the eye; they can’t look directly into the screen and the camera simultaneously. In video meetings, you can’t turn from one person to face another; everyone is facing the camera. Natural conversational responding, turn-taking, and interrupting become maddeningly awkward.
Hidden costs
Togetherness is in our deepest nature. “Natural selection mandated us to be in groups in order to survive,” Michael S. Gazzaniga, a leading researcher in cognitive neuroscience, has written. Reached recently at his home—his office at the University of California at Santa Barbara is closed—he’s feeling the loss of physical presence with others. “In the academic world I get a sense that the excitement and enthusiasm one can gin up on an intellectual question is harder to sustain,” he says. “It’s humanity influencing the rational thing, and it gets lost on Zoom.”
Much of the most revealing work on team performance in the past decade has been conducted by MIT’s Alex Pentland, who developed the sociometer badges mentioned earlier. Asked what’s being lost as millions of workers remain at home, he says: “The feeling of connection and being a member of a team, and all the incidental conversations and nonlinguistic cues that get people on the same page and aligned, as well as the serendipity that is the source of most innovation.”
His outlook for organizations and their people: “Completely standardized tasks work well. You can rely on existing social ties to align people for a while. But that is expiring about end of summer.”
Companies adopting large-scale indefinite work-from-home policies will certainly save some money—an important consideration now—and they may get along just fine for quite a while. The downside will accumulate only slowly and will be harder to appreciate fully. What these companies gain can be quantified much more easily than what they lose. But while they may take time to show up on the P&L, the losses could be much greater.
Three ways to stay creative while WFH
Physical presence is by far the best foundation for creativity and innovation. But when it isn’t possible, teams can still up their game.
1. Expand your digital conversations
Members of the most effective and innovative teams continually connect with people outside their discipline, industry, or location, getting truly new perspectives and ideas. Then they and the rest of the team exchange what they’ve heard.
2. Pay attention to how much everybody talks
In meetings of the most effective teams, in person or on video, no one dominates. That practice maximizes interaction and gets lots of ideas on the table.
3. Get physically together at least once if you can
That’s how trusted relationships and group social norms get established. Research shows that digital interactions can then reinforce them.
A version of this article appears in the August/September 2020 issue of Fortune with the headline “Losing connection.”


fortune--2020-08-10--Closing schools is ‘socially intolerable,’ says Boris Johnson. Teachers and parents are far less ass

Closing schools is ‘socially intolerable,’ says Boris Johnson. Teachers and parents are far less assured

Semiconductors are a weapon in the U.S.-China trade war .
Can this chipmaker serve both sides ?

As he tries to drag the British economy out of the pandemic recession, Prime Minister Boris Johnson has a key problem to fix: how to reopen England’s schools.
Unless children return to classrooms next month, millions of parents will be unable to return to work properly, leaving the government with little hope of boosting consumer spending and productivity. The damage to the education of a generation of children, especially from poorer families, could be huge.
“Keeping our schools closed a moment longer than absolutely necessary is socially intolerable, economically unsustainable and morally indefensible,” Johnson wrote in the Mail on Sunday newspaper.
Yet Johnson finds himself in a fight with teachers’ unions and other authorities over whether it is safe to restart classes. The public is also divided. A YouGov survey on Aug. 4 found that while 57% of Britons thought schools should reopen in full in September, 25% disagreed and 18% were not sure.
Testing Push
Children’s Commissioner for England Anne Longfield, whose job it is to champion children’s rights, suggested all pupils and staff should be tested for coronavirus as often as once a week, even if they don’t have symptoms. The government rejects such a step as unnecessary.
Union leaders and opposition politicians have also called for improvements to the country’s Covid-19 test and trace program before schools reopen. Teachers’ leaders want the government to reassure staff they will be supported properly with a backup plan if there’s another surge in infections.
Education is controlled by the U.K.’s devolved national governments, and schools in Scotland will start to reopen this week. Johnson has set a target for all children to return to schools in England from September. Elsewhere in Europe, governments have begun returning pupils to classrooms without triggering sharp rises in infections. In Sweden, schools never closed.
Without the backing of unions and a still cautious public, Johnson will struggle to deliver on his pledge. To bolster his case, the prime minister is expected to cite new state-backed research this week showing there is little evidence that coronavirus is transmitted in schools.
‘Moral Duty’
“This pandemic isn’t over, and the last thing any of us can afford to do is become complacent,” Johnson wrote in the Mail. “But now we know enough to reopen schools to all pupils safely, we have a moral duty to do so.”
Johnson has faced growing criticism for his handling of the pandemic, with the U.K. suffering the highest death toll in Europe amid claims he was too slow to lock down the country. The premier insisted he followed the best scientific advice, but public faith in the government’s response has been damaged.
In late March, 72% of Britons thought ministers were handling the crisis well, but by late July this had fallen to 45%, according to YouGov research.
For the U.K.’s recovery, the risk is Johnson’s record makes it harder for teachers and parents to trust him when he tells them schools are safe.


fortune--2020-08-10--Founder of pet care accessories line Wild One on remaking functional as fashionable

This is an installment in a special series, Startup Year One, interviewing startup founders about the major lessons they learned in the immediate aftermath of their businesses’ first year of operation.
Wild One, a sleek but simple accessories line for pets, was created in the same vein as many retail businesses: in response to underwhelming options already on the market.
A graduate of the Rhode Island School of Design, Minali Chatani started her career in the art department at Bloomingdale’s before making the jump to Sweetgreen, where she served as head of brand creative.
In 2018, Chatani—along with Veronica Becchetti, then director of production for S’well Bottle, and Bill Wells, previously director of supply-chain strategy and innovation at Warby Parker—launched Wild One as a one-stop shop for dog owners, with thoughtfully designed, cross-category products that took style and function into consideration.
“The pet market was crowded with commodity goods that were either super kitschy, overly outdoorsy and industrial, or poorly designed,” says Chatani. “There was little brand recognition or loyalty, and furthermore, no brand that felt trustworthy and covered all the essentials.”
Fortune recently spoke with Chatani, who serves as head of brand at Wild One, to learn more about the startup’s first year in business, the lessons learned, the hurdles overcome, and plans for the next year.
The following interview has been condensed and lightly edited for clarity.
Wild One cofounder Minali Chatani Courtesy of Wild One
Fortune: Wild One has a particular aesthetic that is extremely simple yet feels quite stylish—especially in the social media age. How has technology shaped the development of Wild One?
Chatani: We’re a digitally native brand first, so tech is really at the center of almost everything we do. We approach our digital brand experience by trying to make it emblematic of the dog park. That sense of camaraderie and community is what keeps familiar faces coming back.
Social media and digitally native content informed the creation of Pets and Their People, a content series representative of a robust community of dog parents and Wild One loyalists. Those people are at the center of everything we do from new product launches and improvements to our website to IRL events. You’ll see their own original content on our social media, which functions as a community building tool as much as it aids in marketing and sales.
Wild One says it strives to connect pets and people through thoughtful design and community, with special events throughout the year (pre-pandemic). Courtesy of Wild One
What were some of the biggest hurdles you faced in your first year of business? What surprised you the most?
I think the hardest part of the first year in business for many entrepreneurs is staying focused on your goals and filtering through the noise. There are so many opportunities flying your way from collaboration opportunities to new product ideas—all these “shiny objects” that catch your attention. Sticking to the plan and staying super focused on the year-one goals is not as simple as it sounds.
I was most surprised by the immediate community growth and sense of camaraderie. We are so lucky to be in the business of pets; having pet parents as customers and being able to chat with people about their dogs is a dream. I am still floored by and grateful for feedback, ideas, and photos our community continues to share, and their general commitment to spreading the Wild One love. It’s definitely a gift that I don’t think all year-one businesses are given.
What kind of feedback have you received from your customers, and have you (or will you) apply that feedback to how you sell your products in the future?
We get a lot of product feedback and new product requests from our customers. All of this feedback most definitely goes into our product development process. Veronica [Becchetti], one of my cofounders and our head of product development, utilizes industry and customer insights during the development process.
Our Air Travel Carrier, which is one of our bestsellers, was a highly requested item following the success of our Commuter Carrier. Many of the 2.0 iterations on our products come from customers writing in about added features they would love to see.
The Air Travel Carrier sports breathable mesh walls and an interior cushion that folds out to become a dog bed—the home away from home your best friend deserves. Courtesy of Wild One
Obviously, amid the coronavirus pandemic, consumers’ purchasing habits and practices are rapidly changing—and most people are spending less. But pet care is a space that would seemingly be recession-proof. How does Wild One plan to adjust and fit into whatever this new normal might be?
Our outlook has been to stay the course as much as possible and remain true to our brand while being cognizant of the major life changes and challenges for our customers resulting from the pandemic.
But at a certain point we settled into our remote offices and this “new normal,” and we realized that our role as a resource for our community needed to remain consistent, whether releasing a new color Walk Kit to add a little joy to people’s days, or help them stock up on essentials like poop bags and wipes.
Also, you may have read some news about the major influx of people fostering and adopting dogs during the pandemic. We’re of course thrilled to see an upward trend in pet rescue as we work closely with a handful of adoption networks, mainly Badass Brooklyn Animal Rescue.
The Walk Kit comes with a lightweight dog harness; a dirt-resistant, waterproof leash; and a color-matched waste bag carrier. Courtesy of Wild One
At the same time, how does a shutdown of this nature affect the future of the business, from product development to raising capital?
Working remotely was an adjustment for our team, but we’ve gotten the hang of working together in 2D. Instead of being in the same room for a product development meeting, getting to actually hold samples and chat through feedback, we’ve been mailing each other prototypes and materials, screen-sharing product plans, and “live designing” remotely. I’m very proud of how well our team has adapted.
Of course, some of our timelines have shifted slightly. We’ve become increasingly flexible and malleable, working intimately with our partners and designers, to reimagine timelines and pivot where we can.
Looking beyond the post-pandemic era, which could be anywhere from a year to a few years from now, how do you plan to grow Wild One and what do you want the business to look like five years from now?
Our goal remains the same: to be a curated one-stop shop for pet parents providing thoughtfully designed products across multiple categories. We’re working to become a household name in the pet space as well as to amplify our community on national and global levels. In the near future, we’ll be expanding our offerings into new categories. But overall, there’s still so much more to explore, whether more consumables, wellness, or even services.


fortune--2020-08-10--Why Nestlé’s CEO has been in the office every day since COVID-19 hit

In 2017, Mark Schneider became Nestlé’s first “outsider” CEO in nearly a century. Since then, he’s been on a dealmaking kick, transforming the company from a consumer goods stalwart into a health, wellness, and nutrition empire. We talked with Schneider about leading the world’s largest food company through a global crisis and how the pandemic is changing the way we eat.
This edited Q&A has been condensed for space and clarity.
Leading the lockdown
Let’s start with COVID, since that’s what everyone is thinking about these days. Nestlé was one of the first companies to halt employee travel back in February. What sparked that decision?
Schneider: The first few weeks of February, like everyone else, I was at the edge of my seat just watching. We had firsthand experience through our extensive Chinese operations, which is the second-largest market for Nestlé after the U.S.
There’s one specific date that made the difference for me: Friday, Feb. 21. A colleague e-mailed me some pictures from northern Italy where people were panic buying. One look, and it was very clear: This is out of control, and we will no longer be able globally to contain it. This is when several emails went out to the entire company, saying, “Get your inventory levels up, no matter what. Don’t try to be smart—just be sure that we’re fully prepared, because you don’t know exactly which raw material might be in short supply or which supply chain might be under fire.” We knew that in this context, uninterrupted supply of food and beverage was going to be key. People wanted to see the shelves stocked. And some of the initial panic buying was exactly because people were doubting that.
On Feb. 25, we went out with the travel restrictions. I was actually on the road in the U.S. That was my last big cross-border trip. I wanted to be sure that I was the first one to comply with these rules.
How do you see the pandemic changing the industry long-term?
The biggest shift clearly was from out-of-home consumption to in-home consumption. And that is against the prior trend, because for years people had started to consume more food and beverage out-of-home. Around the world, apartment sizes, kitchen sizes, pantry sizes have been shrinking because people consume more and more on the go and on the road. And now all of a sudden, you have this crash reverse¹.
It’ll take some years for things to return to a pre-crisis level. I think it will take a vaccine that will give people peace of mind.
Candy man no more
You’ve done something like 50 deals² since becoming CEO, including selling off the U.S. confectionery business. Are those simply business decisions or are they also about the kinds of products that you want to sell as a company?
It’s dealmaking that positions the company with a portfolio that’s higher growth, higher margin, and appeals more to health and sustainability—themes that we have been patiently pursuing over many years. If you want to sum it up, my tagline is, “Good for you, good for the planet.” I think these are two very appealing consumer propositions these days.
Plant-based meat alternatives are what we call a no-compromise sector, and we’ve been very active there.³ We are providing plant-based alternatives that taste the same, offer better nutritionals, and have a much better environmental footprint. That to me is sort of the lighthouse, but obviously the same principles apply to quite a few of the categories we’re in.
We knew that uninterrupted supply of food and beverage was going to be key. People wanted to see the shelves stocked. Mark Schneider
You’ve also announced that you’re exploring a sale of the U.S. water business. What’s driving that?
Nestlé was one of the pioneers when it came to the global bottled water business. Since the late 1980s, when the world was still busily debating who’s going to win the cola wars, we were betting on water as a healthy form of hydration. To make water available in a safe and convenient manner to lots of people, I think that was a very worthwhile endeavor and something we stand strongly behind.
A major part of our U.S. water business is in a segment that is quite undifferentiated and that is basically purified water and regional spring water. We see a better opportunity in premium waters and also what we call functional water, which has micronutrients added for some additional health benefits.⁴
Bottled water is an area that’s gotten a lot of criticism over its use of plastics.⁵ Has that played a role in your decision?
We have sustainability concerns that we need to face and overcome. We don’t want to run away from anything. But with these two segments, the functional water and premium waters, you are at a better price point that allows you to also go for more ambitious environmental solutions like better and more interesting container strategies.
Single-use plastic has seen a resurgence during the pandemic. Will sustainability still be a consumer priority post-COVID-19?
It’s understandable that people used more single-use plastics when they
had nothing else at their disposal. But just because the crisis happened
doesn’t mean we have more time on this. If anything, we’re facing a
steeper challenge because all this money that went into addressing the
pandemic is going to be missing in the public domain when it comes to funding these other challenges and hence, the degree of difficulty has
gone up, unfortunately.
Safety first
You used to spend something like 50% of your time on the road. Is that changing how you think about leadership and working with your teams all over the world?
All the long-distance stuff had to be replaced by virtual meetings. But staying as close as possible to the people at the front line of the business has not changed. I toured our Swiss factories in March when we were in a rush to keep them safe and keep up supply.
I spent some time on the shop floor to learn firsthand, what is the best practice and how is it being implemented—but also to signal to our frontline workers, “Look, if we tell you that this is a safe place, then I’ll be here with you. I’m not cheering you on from the safety of my home office—I’m actually here with you because I believe this factory is a safe place to work.” That messaging and giving people that comfort and being with them physically, that’s one of those principles that I just wanted to uphold.
The wife of one of the workers at a factory I visited was pregnant and eight weeks from her due date. She kept telling her husband every morning, “If you go to that factory and get infected, you may miss the birth of your first child.” He turned to me and asked, “Is it safe to come here?”
I’m not cheering you on from the safety of my home office—I’m actually here with you because I believe this factory is a safe place to work. Mark Schneider
What did you say?
I told him I was here because I wanted to make it as safe as humanly possible. I can’t give blanket assurances, but I wanted to be sure that no stone was unturned if we sent hundreds and thousands of people to work every day. The same thing here when it comes to headquarters. Switzerland never had a hard lockdown. We never shut down this headquarters building. I did not miss a single day of work here. I’ve been down to the entrance to review the entry procedures probably 10 times, just to be sure we get it absolutely right. Canteen operations, each and every elevator. To this day, I go around with my smartphone taking pictures to then share with the building people to be sure we have all these details ironed out.
Powering through a pandemic
Some of your competitors threw out their guidance for the year, but Nestlé did not.⁶ Why not?
It was important to me that one of the ways as a company we can contribute to stability is by fully meeting our commitments. In Europe there was a debate that some companies should delay or reduce the dividends. We didn’t do that, because it’s someone else’s income. We stayed away whenever possible from taking government support because we were able to do this ourselves. We were giving people idled by some temporary lockdowns job security; where we have had to impose short-term shutdowns, we paid full wages for up to 12 weeks.
How long do you feel like we’re going to be operating under the constraints of the pandemic?
I hope I’m not coming across as too pessimistic, but it’s very clear to me that until there is a vaccine and it’s widely applied, we’re going to be in this strange limbo situation where you loosen up a little bit, and a few weeks later, you get punished with cases up again. And yet, you can’t stay in lockdown for 12 to 18 months. You have to somehow adapt and loosen up a little bit, then tighten a bit again. I believe this is the way we will have to live in 2020 and probably for most of 2021. This is why it was so important to me that we find ways where we can go about our jobs and lead our lives as much as possible with an acceptable risk level. We can’t just all go into hibernation until it’s over.
Between the lines
1. Sale of food, U.S.
May 2019, food away from home: $75.1 B
May 2020, food away from home: $48.5 B
May 2019, food at home: $68.5 B
May 2020, food at home: $74.6 B
Source: USDA
2. Wheeling and dealing
Schneider has promised to replace 10% of Nestlé’s portfolio by 2021. His deals so far include joint ventures for its lunch meat and U.S. ice cream businesses, the purchase of vitamin maker Atrium, and a stake in coffee chain Blue Bottle.
3. Plant power
Nestlé acquired Sweet Earth in 2017 and released its plant-based Awesome Burger last year. The company also launched the soy protein–based Sensational Burger in Europe in 2019.
4. Back to the well
Nestlé may put U.S. water brands like Poland Spring on the block, but is doubling down on premium lines like Perrier and S. Pellegrino.
5. Plastic, not so fantastic
Nestlé has come under fire from environmental group for the use of plastic in its packaging. The company has committed to making 100% of its packag-
ing recyclable or reusable by 2025 and to reduce its use of virgin plastics by
one-third by 2025.
6. Nestlé stock performance
After a rough spring, Nestlé’s stock is trading near all-time highs.
Nestlé 12-month stock price change: +10.9%
S&P 500 food, beverage, and tobacco index: -0.8%
A version of this article appears in the August/September 2020 issue of Fortune with the headline “The Conversation: Mark Schneider.”


fortune--2020-08-10--Semiconductors are a weapon in the U.S.-China trade war. Can this chipmaker serve both sides?

What a difference two months can make. In May, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker, lost the business of Huawei Technologies—its biggest Chinese customer and the source of 13% of its revenue—as a casualty of geopolitical jockeying between superpowers. But TSMC shareholders took the loss in stride. And by late July, after a stumble by rival Intel, TSMC’s stock had risen almost 50% since May, making it one of the world’s 10 most valuable companies.
May’s low and July’s high have something in common: They both reflect TSMC’s distinctive role in the global tech economy. Although far from a household name, TSMC controls roughly half of the world’s contract chip manufacturing. Brand-name companies that design their own chips—most notably Apple—rely on TSMC’s world-class production so they don’t have to spend tens of billions to build their own factories. Crack open your iPhone and you’ll find a chip from TSMC. If you could crack open an American guided missile, you’d likely find one there too. Its prowess has elevated TSMC to No. 362 on the Global 500, with $35 billion in revenue. Today it gets 60% of sales from the U.S. and about 20% from mainland China.
But TSMC’s central place in the silicon ecosystem makes it particularly sensitive to the counterpunches of Sino-American trade tensions. As relations between China and the U.S. deteriorate, each is determined to insulate its supply of semiconductors from attack by the other—which means redefining their relationships with TSMC. As the chipmaker charts its course between the antagonists, the stakes for both countries and the broader tech industry are substantial.
“Semiconductors are such a big weapon because they’re one of the clearest choke points in the global technology trade,” says Matt Sheehan at MacroPolo, the Paulson Institute’s China-focused think tank. “There are good substitutes to a lot of other tech, but there’s not a good substitute for TSMC.”
Still, being irreplaceable doesn’t make a company invulnerable. TSMC chairman Mark Liu admits to Fortune that trade headwinds are creating headaches. “Our work relies on the free flow of knowledge and the free flow of trade,” he says, “which has no doubt been suppressed.”
Founded in 1987, TSMC initially provided overflow capacity to chipmakers like Intel that had their own foundries or “fabs.” When demand for chipsets boomed in the 1990s along with personal computers, TSMC’s revenue soared as it served “fabless” U.S. companies like Nvidia and Qualcomm.
“Suddenly entrepreneurs didn’t need billions of dollars to open their own foundries, they could use TSMC,” says Daniel Nenni, founder of chip information forum Semiwiki. By not engaging in chip or product design, TSMC could assure clients it would never steal designs and compete. Talented chip designers were able to tap TSMC’s manufacturing to launch their own start-ups. “Hundreds of companies resulted from this transformation,” Nenni says.
The company’s biggest breakthrough came in 2011, when it began partnering with Apple. Apple now accounts for roughly 23% of TSMC’s business, and TSMC is the sole manufacturer of processors for iPhones and iPads.
TSMC was attractive to Steve Jobs’ juggernaut in part because of its reputation for protecting intellectual property. Apple and its previous chip manufacturer, Samsung, were exchanging bitter lawsuits over alleged IP theft when TSMC entered the scene. According to Richard Thurston, who served as TSMC general counsel from 2002 until 2014, Apple audited TSMC’s trade-secrets protocols and found “we were doing things even they weren’t doing.”
An engineer transports silicon wafers at a Taiwan Semiconductor “fab” in Hsinchu, Taiwan. Courtesy of TSMC
At TSMC, employees, customers, and suppliers all sign nondisclosure agreements. The company’s 16 manufacturing sites in Taiwan are firewalled from each other, preventing hackers from finding a singular point of access. Even low-tech theft is heavily guarded against. In some fabs, printer paper is lined with metallic strips that activate airport-style gate sensors at the exits if an employee tries to leave with notes in a pocket.
The company also has a reputation for flawless execution. Each semiconductor contains billions of transistors; for the chip to work, each transistor needs to be made perfectly. Although the manufacturing equipment TSMC uses is available commercially, the processes TSMC developed to utilize it are virtually inimitable. Philip Wong, vice president of corporate research, puts it this way: “I could buy the same tennis racket as Serena Williams, but I’m not going to play as well as her.”
China would dearly love to up its game. TSMC is China’s biggest contract supplier, making chips for the likes of smartphone giant Xiaomi, computer manufacturer Lenovo, and electric-vehicle makers. Recently Beijing has accelerated its push for silicon independence. China’s Semiconductor Manufacturing International Corp. (SMIC), a company founded in 2000 with government support, secured $2.5 billion in state funding this May and raised another $6.6 billion in July through a share offering in Shanghai. But SMIC’s technological capabilities remain generations behind TSMC’s. So do its sales: In 2019, SMIC had revenue of roughly $3 billion, while TSMC sold $7 billion worth of chips in mainland China alone.
I could buy the same tennis racket as Serena Williams, but I’m not going to play as well as her. Philip Wong, VP, Corporate Research, TSMC
Without a cutting-edge chip manufacturer, China’s tech economy remains vulnerable, and this spring the U.S. exploited that vulnerability by severing TSMC from Huawei, the telecom equipment manufacturer. The White House has long pressured allies and companies to block Huawei’s development, arguing that Huawei can intercept sensitive data with its communications gear and share it with China’s government. (Huawei has denied that it would do so.) In May, the U.S. Commerce Department issued a regulation that effectively prohibited TSMC from selling chips to Huawei if it wanted to keep doing business with U.S. firms; TSMC obliged.
The timing of the Huawei ban was intriguing. Just hours before it was issued, TSMC had announced it would invest $12 billion in building a fab in Arizona. Alex Capri, a visiting senior fellow at the National University of Singapore, sees that plant as “a concession,” with TSMC expanding production in the U.S. to gain political leverage in Washington.
Leaders in Beijing may have seen it that way too. They sent fighter jets to buzz Taiwan’s airspace a total of eight times in June, upping the pressure on TSMC’s home base—an island the Beijing government claims sovereignty over. The flyovers were a sobering reminder that an escalating Trump-vs.-China trade war could result in something hotter. A major disruption of TSMC’s fabs would have enormous ripple effects in tech—not least, jacking up the price of an iPhone.
But for now, investors seem to be betting that TSMC will be buoyed by the giants on either side of the Pacific whose chips it has built for so long. “Huawei is one big customer, of course,” says Liu, “but we have 499 customers.”
A version of this article appears in the August/September 2020 issue of Fortune with the headline “Walking a tightrope in Taiwan.”


fortune--2020-08-10--The Fortune Global 500 is now more Chinese than American

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
The Fortune Global 500 list is out this morning, and you can find it here. Walmart once again tops the list, followed by three Chinese companies—Sinopec, State Grid and China National Petroleum. The big story is this: for the first time, there are more Fortune Global 500 companies based in Mainland China and Hong Kong than in the U.S.–124 vs. 121. Add in Taiwan’s companies, and the Greater China total jumps to 133.
It’s hard to overstate the significance of the change in the global economy that represents. As Fortune Editor-in-Chief Cliff Leaf points out, when the Global 500 list first came out in 1990, there were no Chinese companies on the list. In the intervening three decades, the Chinese economy has skyrocketed, powered by a global trade boom that expanded from 39% of global GDP to 59%.
So now what? That’s the question Geoff Colvin explores in his piece here. The U.S. and Chinese economies are intertwined in so many ways, it’s hard to imagine them ever truly “decoupling.” Yet powerful political forces on both sides seem to be propelling them in that direction.
It’s worth noting that the Global 500 ranking is based on revenues, and many of the Chinese companies on the list—like the three mentioned above—earned their spot not necessarily because of their business dynamism, but because they are state-supported monopolies in the world’s largest market.
And by the way, being on the list is no guarantee of profitability. The five biggest losers on this year’s list—Pemex, Schlumberger, Softbank, the U.S. Postal Service and Nissan—lost $52 billion in 2019. (Sixth and seventh in the money losers’ ranking were Deutsche Bank and General Electric, which together lost another $11 billion.) Saudi Aramco, on the other hand, netted $88 billion in profits and is Fortune Global 500’s most profitable company for the second consecutive year.
Enjoy the list. It remains the world’s best snapshot of the state of global business. More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Hong Kong
Hong Kong media tycoon Jimmy Lai has been arrested, and his Apple Daily newspaper's offices have been raided, under the Chinese national security law that has been recently extended to the city. Seven people were arrested in total on allegations of collusion with a foreign country or external elements to endanger national security. PS: Here's an account from a teenager who was seized by police outside a Hong Kong shopping mall, because of comments he made on social media. Fortune
China sanctions
After the U.S. placed sanctions on top Hong Kong officials including chief executive Carrie Lam, China has hit back with its own sanctions on U.S. officials including senators Marco Rubio and Ted Cruz. Also on the 11-strong sanctions list of people accused of "behaving badly on Hong Kong-related issues" are Human Rights Watch executive director Kenneth Roth and Freedom House president Michael Abramowitz. Fortune
Huawei chips
Huawei (the world's biggest smartphone manufacturer) says it's running out of processor chips for its smartphones, and will soon have to stop producing its own advanced chips, because of the effects of U.S. sanctions. Huawei's Kirin chips are made by contractors that need U.S. manufacturing technology but cannot use it due to the sanctions, so production will end mid-September. AP
Amazon malls
Talk about symbolism. The U.S.'s largest mall owner, Simon Property Group, is trying to get Amazon to take over space from ailing departments stores such as J.C. Penney and Sears, to use as distribution centers. Competition from Amazon is of course one of the main reasons why such chains have gone bankrupt. But what might happen to the smaller stores in those malls that depend on spillover footfall from anchor tenants? Wall Street Journal
AROUND THE WATER COOLER
BP's future
BP CEO Bernard Looney insists that the oil firm's transition to an "integrated energy company" is "unstoppable" despite the skepticism of observers who have heard this before. Vivienne Walt's epic piece for Fortune explains why BP finds itself an unlikely leader in this shift: pressure from both employees and investors. Fortune
What's CFIUS?
How could President Trump threaten to bar Americans from transacting with China's TikTok? The answer lies with the previously obscure Committee on Foreign Investment in the United States. As Fortune's Jeff John Roberts explains, CFIUS has been around for decades but has only recently become a serious issue for lawyers overseeing foreign investment in the U.S. Fortune
Vaccine enthusiasm
Ever wonder what decades of anti-vaxxer conspiracy theories might lead to? Wonder no more: a Gallup poll shows that 35% of Americans would shun a COVID-19 vaccine, and a separate survey showed only 30% of people in the U.K. would definitely take one. So if and when a vaccine materializes, a whole lot of education will be needed. Bloomberg
Climate change
Another worrying survey, this time conducted by Harris Poll, shows Americans now place climate change second to last in a list of a dozen worrisome things. More than a third of Generation X men apparently think the emergency is unimportant. Just last December, American adults said the issue was the most important. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-08-10--Beijing singles out 6 Republican lawmakers in retaliatory sanctions

On Monday, Beijing announced sanctions on 11 Americans, including six Republican members of Congress, in retaliation for the U.S. imposing similar measures on officials in Hong Kong and mainland China last week.
“In response to the U.S.’s wrong behaviors, China has decided to impose sanctions on those individuals who behaved badly on Hong Kong–related issues,” China foreign ministry spokesperson Zhao Lijian said at a press conference on Monday.
Zhao did not specify what the retaliatory sanctions will entail, but said that Beijing will target the following individuals:
Marco Rubio, U.S. senator (R–Fla.)
Ted Cruz, U.S. senator (R–Texas)
Josh Hawley, U.S. senator (R–Mo.)
Tom Cotton, U.S. senator (R–Ark.)
Pat Toomey, U.S. senator (R–Pa.)
Chris Smith, U.S. representative (R–N.J.)
Carl Gershman, president of the National Endowment for Democracy
Derek Mitchell, president of the National Democratic Institute
Kenneth Roth, executive director of Human Rights Watch
Michael Abramowitz, president of Freedom House
Daniel Twining, president of the International Republican Institute
China previously imposed sanctions on Rubio, Cruz, and Smith in July for their efforts to punish China over the government’s suppression of its Uighur minority in China’s western Xinjiang province. The other politicians are also known as China hawks. Hawley and Cotton, for example, have helped spearhead the Trump administration’s more aggressive approach to China in recent months.
In response to Monday’s sanctions, Roth said on Twitter that the sanctions against him are “little more than an effort to distract attention from its wholesale assault on the rights of the people of Hong Kong.” Roth also cited a January essay about Hong Kong he wrote for Human Rights Watch called China’s Global Threat to Human Rights as a reason why the Chinese government has targeted him.
Some of the same organizations targeted on Monday—the National Endowment for Democracy, the National Democratic Institute, and the International Republican Institute—were included in sanctions Beijing issued in December over the U.S.’s passage of the Human Rights and Democracy Act. The December sanctions targeted each organization as a whole, while the new sanctions single out each organization’s leader.
“These NGOs have supported anti-China forces to create chaos in Hong Kong, and made utmost efforts to encourage these forces to engage in extreme violent criminal acts, and also hyped separatism activities in Hong Kong,” Chinese foreign ministry spokesperson Hua Chunying said of the December sanctions. The organizations have denied allegations that they helped stir unrest or helped fund protests in Hong Kong.
The sanctions the U.S. announced on Friday targeted Hong Kong Chief Executive Carrie Lam, and director of the Hong Kong and Macau affairs office Xia Baolong, plus nine other government officials in Hong Kong and mainland China, whom the U.S. claims were involved in what it sees as the erosion of freedoms in Hong Kong. The U.S. government will seize all property and freeze any existing assets that the sanctioned individuals hold in the U.S. The sanctioned individuals will be barred from any future travel to the U.S. or any transactions with American entities.
“The United States stands with the people of Hong Kong and we will use our tools and authorities to target those undermining their autonomy,” Secretary of the Treasury Steven T. Mnuchin said in a statement on Friday.