THE WEEK’S OVERVIEW – CORPORATE

Items of interest that might have been missed in the press of events:

  • AT&T has recently completed succession planning for the future by tapping long-term executive John Stankey to occupy a newly-created No. 2 role of President and Chief Operating Officer.  It’s expected that Stankey will be a leading contender to succeed CEO Randall Stephenson when he exits the role.  No date is set for Stephenson’s departure, so the two executives will have some years to work together before that time occurs.  This is the best process of succession planning – where the heir apparent is found and given the time to learn many of the intricacies of the job before assuming the CEO role.
  • WeWork has indicated the possibility of cutting its valuation in half for its upcoming IPO, indicating that it is becoming concerned about the number of concerns about the operation of the company expressed by analysts and potential investors.  Losses at We Work aren’t the only concern mounting about the shared-office company as it prepares to go public.  Some of its practices push the boundaries of traditional corporate governance, analysts say.
  • It’s a little-known fact that Proctor and Gamble started a dry-cleaning chain a decade ago, in order to market detergent and learn more about how consumers like their laundry.  Their effort has now evolved into the second-largest competitor in the dry cleaning arena.  Tide Dry Cleaning remained a low-priority project for several years, limited to a couple dozen locations scattered around the U.S.  But the venture took on renewed importance in recent years, as P&G experienced heightened competition from start-ups and online rivals.  At that time, P&G started seeking new ways to reach customers.  Thus, the cleaning business.  While it is still small as a company entity, it is gaining revenue as it adds locations and offerings, from campus delivery to wash-and-fold service.  A company spokesman says, “The industry was declining; it was ready for someone to come in and change the way things are done.”  P&G now operates or franchises 146 dry cleaning locations, accounting for 2.5% of the U.S. Dry cleaning industry and garnering 9.1 billion in annual sales.
  • Lego AS reported a sharp drop in half-year profit as a result of pouring money into new stores and rolling out product and digital initiatives in a bid to stay ahead of fast-changing consumer behavior.  The world’s No. 1 toymaker says that it is investing to ensure continued growth as it competes for children’s attention against video games, YouTube and other digital distractions.  CEO Niels Christiansen says, “The biggest challenge is innovation; the good thing is that physical play remains relevant, but it’s really a fight for children’s time,” (ref. WSJ).

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