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00:00So you have such a unique perspective, of course, on how AI is shaping companies.
00:04And there's a great piece in the Wall Street Journal coming out of their Leadership Institute.
00:10I understand that you attended as well, but it seems like the consensus is that,
00:14OK, AI is fueling change faster than anything we've experienced before.
00:18But how exactly companies handle that is not as clear.
00:23So I wonder, you know, in the chairs that you occupy, what do those conversations sound like?
00:27Well, you can count on the fact that AI is a topic at every single board meeting.
00:32It's been about three years since ChatGPT arrived on the scene.
00:36And I think the last three years have been a lot of experimentation at most companies.
00:41BCG just put out a recent survey that said 5% of companies are actually seeing the impact of AI in their P&L.
00:49And yet well over 65% of companies are reporting AI initiatives.
00:54So I do believe 2026 is going to be a year where it's going to materialize in companies' P&L,
01:00both on the cost and efficiency side, as well as on the revenue growth.
01:04A few factors companies are really working through.
01:07One is how to upskill and really completely retrain their workforce on the utilization of AI.
01:14And you will see a dispersion of companies doing that really well,
01:18where all of their employees are utilizing the tools and getting more comfortable,
01:21and those that are perhaps lagging behind.
01:24So training and change management are number one.
01:27And then the second is really this move from, do you have an AI strategy,
01:31which was kind of a buzz question for the last three years,
01:34to what is your strategy in an AI world?
01:37Because everything should change.
01:39Every single function, every workflow needs to be reimagined.
01:43Business moats and competition will change.
01:46So it's a very important and key topic in boardrooms.
01:49Yeah, those are two very different questions, too.
01:52So getting answers to that has to be interesting.
01:55But you touched on this a little bit.
01:56But when it comes to the P&L, how this is actually impacting companies,
01:59something I wonder about all the time is whether we're just talking about productivity,
02:03whether we're talking about cost savings, chiefly,
02:06or whether we're talking about actually reaching new customers
02:09or unlocking new lines of business.
02:12Well, I think those are the two vectors.
02:15You're exactly right.
02:16So we are and every company should be looking at how to make everything more efficient,
02:21either with less people or to be able to produce more.
02:24But the more exciting opportunity for AI is actually generating new revenue streams
02:29and reaching new consumers.
02:30And there has been incredible progress with AI in marketing.
02:34So companies like Coca-Cola are reimagining their entire workflow in marketing,
02:39which will allow them to get much more targeted in terms of the right messages
02:44to the right consumers.
02:45We've been talking about that my entire career in digital.
02:48Are those marketing campaigns going to resonate the same way?
02:50I know there's been a lot of time.
02:51Everyone's seen these Coca-Cola ads.
02:53And there's a new ad, I think, with Ford, a car company that also used all AI.
02:56And I am just curious, is there a sense that that is going to resonate with customers
03:00in the same way that filming that with humans, particularly for Coca-Cola,
03:04which always has, particularly around the holidays,
03:06kind of these real touchy-feely, you know,
03:07make you feel warm and your belly kind of adds?
03:09No, it's a great question.
03:11So with Coca-Cola, I would say Disney is the exact same way.
03:14This is about human involvement really being enhanced with AI.
03:18It's not AI replacing humans.
03:20So there were humans extremely involved in that Coca-Cola holiday campaign.
03:25As a matter of fact, the song is being sung by real humans.
03:29So even though a lot was done from an image standpoint,
03:32utilizing AI and translation into different languages
03:35to make it appropriate for geographies, the human element is critical.
03:39I would argue that actual humans and how they're going to touch all of these campaigns
03:45will be more important than ever before,
03:47because brands need to resonate more than they've ever before.
03:51Consumers used to be able to now search and scroll through a doomsday list of blue links
03:56in order to find either a company or product or service they were looking for.
04:00Now, instead of search and scroll, it's ask and get.
04:04And 20% of purchase decisions in LLMs are being driven by LLMs, I should say.
04:10That means brands need to be discovered in LLMs,
04:13which means the human element and the emotional resonance of brands
04:16is going to be more important than ever.
04:18There is a broader issue here, too, about the idea of replacing humans,
04:21whether it's in ads or movies, but also just in terms of employees.
04:24You talk about living in an AI world.
04:26You know, Senator Mark Warner from Virginia made some comments yesterday,
04:30this idea that he wants some of these companies to take whatever they're saving from AI
04:34and reinvest some of that in job training with the idea that there will be a lot of workers displaced
04:39as AI technology does broaden out to pretty much every facet of our lives.
04:44So I think the way most companies that I'm involved in are thinking about this
04:49is how do we utilize AI to take out the monotonous tasks,
04:52the tasks that really, really don't need to eventually be done by humans
04:56because they would be better served by AI agents.
04:59But that should free up the talent to do things that are much more value or creative to companies,
05:04that are much more creative.
05:06And in many cases, actually, there is a talent war for new talent coming into companies
05:11that have what I would call AI native or AI real skills coming in.
05:17And I actually, I know I've seen the data that, you know, for younger people coming out of college,
05:21the job market has been very, very difficult.
05:24And I think we're in this little bit of a bridge because the next generation coming in,
05:28give it a few more years, they have grown up with these tools just the way the prior generation,
05:34my daughters are 23, they grew up in a mobile environment.
05:37This next generation is going to grow up with AI skills.
05:39And so I actually, I tend to be an optimist.
05:42We have, our history in humanity has been that we have found new opportunities for people,
05:47new jobs, new creation of companies, new opportunities in terms of leveraging new skill sets.
05:53And I really think AI is going to do that.
05:55So I am not on the pessimist, everyone's losing their job side of this.
06:00It's important context too.
06:01I mean, technology advances.
06:03It's the transition period that might be a little bit uncomfortable.
06:06It's always a little bumpy during the transition period.
06:08Absolutely.
06:09So we could spend hours talking about AI, but I want to talk about some of the other hot topics.
06:13And that leads me to tariffs.
06:15Of course, you sit on many boards, as we mentioned, really spanning industries as well.
06:20So I wonder, you know, when it comes to tariffs, when it comes to supply chains,
06:24how is that affecting beverage?
06:26How is that affecting apparel?
06:28And how does that differ from, you know, maybe an entertainment and film company?
06:33Sure.
06:33So if you think about, I'll take supply chains and tariffs as sort of two, but commingling topics.
06:39Supply chains were really tested during COVID.
06:41And many companies had to rethink either the dependence, too dependent on China, needed to diversify, bring things onshore.
06:48So a lot of the supply chain work is ongoing, but a lot has been improved since the COVID era.
06:55Tariffs have been a moving target for companies.
06:57And there has been a lot of scenario planning, which the boards review, to understand what the impact of the tariffs could be.
07:04I think we are very hopeful in the companies that I represent that once the details of what the impact might be are understood by the White House,
07:13which has been, you know, very open hearing from business leaders, which I think is a net positive.
07:18Once those cases are made about what the impact could be, particularly not just on companies that are based here in the U.S.,
07:25but also on the end consumer, because the consumer can't absorb all of the additional costs from tariffs.
07:30Somebody needs to absorb them.
07:32So we are hopeful that some of the initial headlines, which may be shock to companies, a lot of that tends to calm down and find its way to be a more normalized rate.
07:44Carolyn, I'm also curious, too.
07:45I mean, another big issue that boards are having to grapple with right now is the idea of succession planning.
07:50You sit on the board of Disney.
07:51There's been a lot of speculation about the replacement for Bob Iger.
07:54There was a story.
07:55You're not on the board of Apple, but there was a story the other day about planning for the successor to Tim Cook, who's been in that seat for a long time.
08:02What do those conversations look like?
08:04So CEO succession is one of the most important jobs.
08:07In many cases, people would argue it's the most important job of a board of directors.
08:11And what I can say about it more broadly is you have to run an extremely thorough process.
08:17And this is my first time going through it at the Walt Disney Company.
08:20And I can assure you and everyone that the process is extremely thorough.
08:24It's been ongoing and very, very thorough.
08:27And our timing is early 2026, which we've told the market.
08:31But I think we have seen examples of some excellent succession planning.
08:34James Gorman, for example, led a tremendous succession at Morgan Stanley.
08:38He is our lead director at the Walt Disney Company.
08:41We just heard from Walmart.
08:43John Fernand stepping in, outstanding executive.
08:46And Doug has had a tremendous career there.
08:48So it can be done, and it can be done very, very well.
08:51But the boards need to take their role and responsibility extremely seriously, looking at a broad swath of candidates, internal and external.
08:59And I know you can't speak directly to what's going on with Iger, but I am curious, overall, how much input does the existing CEO have in that transition planning?
09:08This is the responsibility of the board for all the companies that I sit on.
09:12Of course, you know, the CEOs that are in any of the companies that I serve on always have input in terms of their specifically if it's of somebody on the management team or multiple people on the management team.
09:22But we do that in the course of talent planning.
09:25We don't just look for CEO successions.
09:28For example, I run the talent and compensation committee at the Coca-Cola company, and we look at succession not just at the CEO level, at the executive leadership team.
09:37And we often go at least one click below, it's very important for boards to really meet numerous members of the management team and click one or two levels below to understand the up and coming talent.
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