>> a very special episode for you this week, we are here in california, under the gorgeous sun and this week limburg businessweek is releasing its annual best school ranking and for the second straight year, stanford is number one. we will hear from the dean, john lovett, and so many prominent alumni

have made their way through this school and we will hear from aco, and joe lake up, the owner of the war and the inns coming ceo of nike, and they will talk about their experience here and also what they are seeing in the world of business. so much here from stanford plus back at headquarters back in new york, this week it was all about the year ahead summit, a 306 to degree view of the most urgent topics facing every executive. >> we set down with the providence equity ceo commend the ceo of macy's and co-ceo jim coulter and also i should mason -- manson and alum of the school. >> first let's get to stanford graduate school of his nest dean on taking the number one spot on the best school rankings for the second year in a row. to thes a testament fantastic faculty and staff we

have here and i could not be happier to be the top business school this year. dark of the students will be here very shortly. what is on their minds right now. as they prepared to get into the whatstage of their career, are they worried about? they are arriving at a time of great change, and globalization, and those things are all on their mind. they are thinking about how my career is going to evolve, and that is what they are here for to get exposed to all sorts of print opportunities and ideas to getelop the skills them forward in their careers. are,inking about where we this time there is a lot of talk in washington, about silicon valley. how do you square all of that being the face of silicon valley. questionhat is a great

. washington just seemed it could not have been further away from are loadingey, we things and trying to make the world a better place, and it doesn't feel that way right now. it feels like washington and silicon valley has come much closer together. much moreing to be really -- regulation on government and democracy. it is an, and we are right in the middle, and i think that is a really important responsibility for stanford to be in the middle of that discussion, and we are trying to do that. one of the interesting things about a business education is for a long time, it was an investment, he paid tens of thousands of dollars and then you got out on the other and and got paid very well. it seems more complicated now, and maybe even some accidental questions around why am i getting an mba good how do you

with the students, you got to make the case that than some of the school spirit >> all of what you said is still trooper there still rate economic roi here. i think what has changed is the students who have evolved. it's a much broader set of students. we had students just like we always did, but we have a student in the first-year class who was a central banker in nigeria, oner from who was an olympic medalist, and he put all of those people in the mix together, and that is part of the magic of the place, and then they go on to approximately the same richness of careers. that has changed. this can prepare you for

anything, i think that is really fundamental to what we are trying to do. >> we turn now to an animal alum from this school. >> he graduated from here and is now best known as the owner of the golden state warriors who was also pretty successful back in the day. >> it's just not about what is in the books. it's about a lot of other things and there are so many issues that one has to be aware of to be a ceo if that is your goal or to be in business. it is a very international world now. it affects the business i am in right now. you really have to have an experience where you get exposure to all of those issues. i think this is what stanford does. >> when you think about this place, so many companies have been born of this, private companies. we seem to be in a moment where

private evaluations and private ones for a long time, what do you make of this moment where people are trying to decide what something is worth and there is some disagreement out there? >> clearly there are very high, and there are some structural issues, with respect to the giant funds that have been raised and the prices they have been willing to pay for some of the startups. i think that the public markets and private ones have to figure this out. this is no different than what has gone on in the past. we have had times where private valuations have gotten to be what some people believe are too high, and they have to sort of make do. i think it will all work itself out. duckett we have to talk about basketball. see people have to who look at you and say, that's what i want to be when i grow up. what do you make of the season so far? there have been some twists and

turns. >> every player was with us last year is gone or on the way at this moment. it will improve. i like to tell my guys that i am always positive, and i do believe there are silver linings and everything. the younger players will get a lot of time, and we got some really good ones. so from the standpoint of basketball, i think our fans understand that they will be with us and we will wind up being better. we will be better when this is all over. china me ask you about and everything that happened over there. what happens next in china? a sensitive subject. i don't think all of us here and even the players and myself can fully explain or understand this. i think it will gets way out. i think it is like everything else. i think we will get back to where we were before. that's the optimistic point of view. >> what is their responsibility

of the leaders like yourself, like what is going on with hong kong. >> i think it is complicated. our job is not really at its most primary, to look at what is going on there from a political standpoint. up, more from the best business school special edition from stanford. talk about the number one business school in the united states. >> we are also talking about some notable alums, the incoming nike ceo. he takes that job at the beginning of the year. lots to come. this is bloomberg businessweek.

until 1230. the air i'm so glad to know she likes them though!

>> welcome back. i am jason kelly. >> i am carol masur. join us every day on the radio starting at 2:00 p.m. wall street time. you can also check out our podcast at apple and at bloomberg.com. also find us online and through our mobile app. >> that's get back to our special from stanford. >> it's all about the annual results. >> they are celebrating her stanford is ranked the number one business go for the second year in a row. for tallied top scores entrepreneurship paired the runner up is dartmouth, moving 17 spots do to improve scores for networking and learning. harvard,three, university of chicago and university of virginia. bloomberg compiled these rankings aced on responses from

students, alumni and recruiters. we also used job placement data rate there were a number of surprises. names don't always translate into the best education. william & mary was ranked top for learning followed by virginia and texas at dallas. when it comes to networking, dartmouth was first, but ucla was runner up. entrepreneurship, maryland utah and mississippi all finished in the top seven. >> a lot of companies can through trace their roots back to business schools part we are here just to the left of us, the night management center is here on the graduate school campus. nike founder, he wrote a paper while he was here earning his mba. that became the basis for the sports apparel company. >> i love that story. john donahoe is also part of the network. bei was blessed enough to

there between 1984 and 1986, and it was really the most formative experience i had that has set me up for not just my career, but to be honest, my overall life over the last 30 years. i distinctly remember many of my professors as well as my classmates, and what stanford really grounded me in was this notion of leadership rate it was a phrase i first heard at stanford. it resonated with me. a former dean of stanford, that is where the phrase came from. if i would say there is one guiding principle for the last 35 years since then, it's been a real inspiration toward this notion of leadership. is certainlylley developing, a far cry from where it is now. why did you go west? >> i knew i wanted to go to

stanford. in 1982,or in college stanford was known for teamwork. withs known for working others paired that was attractive to me. i played sports my whole life. i hadn't been in business, but i knew a team approach was what i wanted to do. that was the reputation they had. california,lived in so i came with the agreement that i was going to stanford in 1984. when i came out, i was not disappointed. >> having been so entrenched with several companies here, what do you make of some of the great need about some of the big tech players? mymice perspective -- perspective is this, soon to be moving to portland, the important part is honest dialogue. it's not that technology was good and now is bad predestinate it at all.

the reality is technology has had a profound impact on the net, andat it is, net, mentally positive. it is also true that there can be consequences that are very real. we have to be able to acknowledge those and then engage in what is often messy dialogue where reasonable people can have different perspectives and see if we can get dialogue around the issues and the remedies or policies or frameworks that can help us begin to address some of these issues. it will take time here these are not simple issues. what does not work is the politicians labeling tech as the bad guys. i don't buy it. you can't be tech companies and say government and regulation is bad. i don't buy that either. this will be the hard work of dialogue. >> we have to talk about your

new job. he said you're moving to portland. he served on the board there of nike. why take this job now? circle, asis full you say, with your history and now working for the company? >> i have always deeply resonated with their purpose, andh is bring inspiration innovation to every athlete in ,he world, if you have a body you are an athlete. to me that's around human potential. it speaks to each person on the planet around the potential they have within them. and for is a very powerful institution in the world right now. a lot of other institutions are falling down, government or politics. sport is something that brings people together. it brings them together on a level playing field within countries and across countries.

so the purpose of nike and the role and impact it can have in the world is just something that i have always admired deeply. it always spoke to me. >> business schools have long trained their students to maximize shareholder value. students really want to master the skills that are needed to lead businesses committed to social missions. >> that's right. that was a topic while we were here. deanis senior associate sarah soul on social entrepreneurship. >> our students have changed a lot over the past few years. our students have come of age in a very different era then certainly i did. they have come of age on college campuses where their undergraduate professors and peers are talking about issues of diversity, about equity and inclusion, social responsibility

they come to us as learners who have already and exposed to some of these pressing issues. they come to us hoping that we will give them answers and that we will be able to train them to become better leaders. >> i do wonder about what the students think about, because i feel like there is this importance of diversity for some many different reasons for it am curious, do -- do students think the corporate world is doing enough? there's so much conversation, and some of the numbers are getting better, but i think there could be more improvement. >> i think that is kind of mixed. i tend to be an optimist, and i sort of tend to point to the wins we see, but i believe in transparency and in making sure that companies are able to tell us what they are doing so we can do better. i think our students really come

to us believing that they can make positive change in your world and they want to make positive change. coming up, the commencement speaker and also the ceo of this company. >> and we have more from that year ahead summit, straight from bloomberg headquarters. this is businessweek.

>> welcome back. i am jason kelly. >> i am carol messer. you can listen to us on the .adio >> and right here in the bay area and in london and through the bloomberg business app. >> back to our special broadcast, louvered businessweek

releasing its annual best business school rankings this week for the second straight year stanford is number one. >> we have this co with his story. >> i started researching and back then businessweek had a ranging of schools and stanford was number one. i said i was going to apply to schools, but stanford for sure is number one. they were number one through the 80's and 90's, and i was accepted, and then i had to apply for scholarship because my parents did have the kind of money to send me to school. then i went to stanford business school and it changed my life. >> you talked about the financing to get there. businessman, one of the top guys today in the

world of business, and i knew that he had a bank that would give loans to some of the employees that were pursuing an mba abroad. was accepted at stanford that year i decided to make my case and he decided to paper my first year, out of his own pocket. so i went to stanford because of him, and it was interesting because he asked three things of me when i went. i said first keep in touch, before you can accept any full-time job offer, talk to me first pray no obligation to work for me. and help somebody as i am helping you if you can. so that was it. >> that was part of the education. not talk about your experience at stanford. >> for me it transformed the way i view the world. it was very international, saberi open to the world even in those days.

it was also a place where i learned talents. i was surrounded by the best people in the world pretty much at that age group that kind of orientation to business. and i had to up my game. top of myys at the class, and when i went to stanford, i was not at the top of my class. i had to work harder. but i got from stanford is it is about first who then want. , learned that talented people one guy over a person is worth 10 very good people, but it is hard to find. when you look at stanford in the valley, that is a mirror image of each other. stanford has open minded and is always embraced ideas. other places look at ideas as threats. things are moving, stanford embraces it and they say there is an opportunity. they are open minded.

i think the valley is a true reflection of stanford, and retro things from the valley as well. >> let's talk about your consumer. it is interesting for you have a global view. let's go straight to china, where. it is a huge business, yet there are concerns about the consumer right now. >> that plays on your latest earnings for it what is going on in china right now? >> right now, for sure there was some deceleration, but still growing at 6%. business nightlife is an important channel for budweiser dominates most of the share. in nightlife, it got a bit deemphasized given some of the

celebrations in china. that happens from time to time. likely help to take the number one spot in entrepreneurship of the best school business school rankings. here are a couple of very impressive students who are also entrepreneurs. ago i started an enterprise with my sister and we work with veteran owned american manufacturers across the country to make accessories, like this necklace. is one, and we also have leather goods as well. is military grade materials from what i understand? >> yes, some of it, like this machineas well as shells, which are in all of our

jewelry. they are all made eye american manufacturers and we donate 10% of our profits to veteran organizations. >> it is really incredible. avis a sense of what it is like to be a student here. time where there are a lot of questions about businesses right now. i think we would all love to be in your classroom in some ways. how do you characterize it? >> what is really interesting about stanford is they really bring out the authenticity and also the education is surrounded around who you are and staying true to yourself, but then also being good at business. the coolest thing is not only are you in the business school, but you are part of stanford as a whole. >> coming up, we speak with leaders on the most urgent topics facing every executive in

the coming year. this is bloomberg businessweek.

♪ carol: welcome back to business week. businessweek is releasing its annual list of this week. for the second straight year, stanford is number one. carol: they are indeed. go online and check out what went into the rankings of the business schools.

we turn now to another top event this week, the year ahead summit in new york city. change is certainly the one constant that unifies global ceos. the pace of change is speeding up. that's why bloomberg invited leaders to discuss the topics facing every executive in the coming year. every year for the past three, we have turned into an alumnus of this institution. he is also the co-ceo and cofounder. peers what he tells his investors. -- here is what he tells his investors. >> in some ways, the message is similar to what we have seen over the last couple of years. what we are seeing is change. change is to be expected but what is unexpected is the nature and the speed of that change. most of us thought change would look like this.

it was continuous improvement. we have gone into a world where change has changed in its very nature. there has been a change in the nature of change. most of all, industries are being made at a rapid pace. enjoy the equilibrium in the world of business. the record business is radio and records for years. suddenly, it goes through a change and emerges as spotify. change has become a snowball. it is increasing in speed and size as it rolls down the hill. we used to purchase things. we now subscribe. the implications of this are profound. that have existed for a long time, there was a backwater of commerce. the first one i saw, books were too expensive so ben franklin's

together and it was the first library. the newspaper popped up in the 1830's. by000 people subscribed 1834. it was the first use of subscription in media. that is where subscriptions were most constant through the early years of the 1900s, magazines went from 3000 to 18,000. it was the heyday of reader's digest. outside of media subscriptions were a backwater. the fruit of the month. columbia record club. you to write checks and wait for things to show a serious how about netflix? you would send them -- they would send you a dvd and you would send it back. tiny parts of the marketplace. what we see is a clear change in the amount of share of subscriptions. why is that? it turns out psychologically on both sides of the market, subscriptions are

extraordinarily powerful business models. for people, there is a tendency called mental accounting. really poor mental accounting. we put our money down at a casino and they give us chips and we forget we are gambling money. want to push you subscriber behavior, you separate the purchase decision from how it is consumed. are deep in this mental accounting. you pay once then forever it seems like it is free people like that feeling. secondly, we have a flat rate bias. we hate to see a taxi meter take. that's why over -- uber gives you the price up front. people will pay more to buy at a flat rate. what you eat is often more expensive than buying off the menu people like it better. subscription,a there is lost you version -- aversion.

it's more painful to take it away. as people buy subscriptions they tend to keep them because they would somehow suffer a loss of they were canceled. side, peopless love subscriptions because in the world of tech, you can sign people up forever with a double-click. it's easy to deliver subscriptions. one of the things you hate is if someone opts out of one of your sets.ts that's -- product lastly, it turns out the market loves description revenue. if you look at what happened when the software business went from package to subscription, the multiple of the software business exploded. the same dollars delivered a different way gives you a higher multiple. the two-sided preference for subscriptions both subscribed -- consumers and businesses means that the situation market is exploding. carol: for more -- jason: i caught up with the ceo of providence.

one of the most influential investors in the media space. there's a lot going on out there. >> netflix, we talk about the streaming wars. i think they won. said which one of you guys going to come in second? think it's that much of a lead? >> i do. for two reasons. 60 millionis subscriptions in the u.s.. they will be at 200 globally which means they can and are paying more. they have learned a lot. execution matters. they have a huge advantage. i cannot imagine them being one .f the winners did -- i cannot imagine them not

being one of the winners. at some point, they will be judged not on subscriber growth .nd engagement ultimately, it's gravity. you are judged by free cash flow and earnings ultimately. that will be an interesting. . pivot. disney should be interesting. they have enormous valuable brands. they have inspired leadership. they are all in on direct to consumer. they have three strategies. blue --hulugh espn, and tsitsipas. the combination of those brands, strong leadership and media i would put my money on them also.

the unknown will be execution. force.ll be a thel: coming up from summit, we got a sense of what's next in retail and 2020? who better to ask that in the ceo of macy's? this is bloomberg businessweek. ♪

jason: welcome back to bloomberg businessweek. i'm jason kelly. carol: i'm carol massar. you can check us out on our podcast. jason: you can find us online at this week.com and through our mobile app. the year continue from ahead summit in new york this

week. there are a lot of big questions about retail to say the least. we had a conversation with the simon oncy's, david the future of their business and whether there were two mortar is going to be a thing. in the past, we were not a scalable model. we would got most of it. spending $3 million on these properties and that's just one of the strategies we have. we are adding backstage and ticket. those are doing well and our portfolio. we are adding new brands. that's one element. it is product in its environment. the other part is focusing on the people. management, colleagues, commission rates.

then, marketing and special events. the opportunity to get the community in and for us to go into the community is high. what we can do to get more footsteps into the stores is very high. it is the combination of those five things that is what is driving the overall business. david in one of our first meetings he was kicking my but on king of prussia. it was one of the best malls in the nation. we had a tired product. he said this is everything i am andg and you are behind this is the increase i am getting in dollars per square feet. these are the agreements i am changing. get busy. >> i said it much more politely than that. [laughter] that was one of the first stores we invested in. 2%t was 2018 and we got a

increase and this year we are getting a 4% increase. investment is not a one and done. what we learned in this business is that you have to continue to invest in new content, new experiences. the customers raise the bar on all of us. >> this is beyond real estate. i don't care if you're a technology company, you have to invest in product. question, newyour york is the hippest city in the country. >> i'm ok with that. >> that's debatable. years, threeive malls have opened. we are not involved in any of them but you have hudson, the world trade center, and one more. it's interesting that the hippest city in the world opened three malls. the narrative and i'm not

blaming bloomberg at all may be slightly [laughter] carol: wait a minute. >> the narrative is so negative facts,n you look at the you can drive a much different conclusion. jason: staying with regional, a timely can -- conversation you had with the ceo of nordstrom. he has a lot on his plate. inol: after 118 years business, it just opened its first store in new york city. find this story in the magazine. carol: customers are more empowered and less willing to compromise any of their experience than ever before. in our industry, we talk about on the channel --omni channel. i talk to customers every day. i never have a customer use the

word channel. they just want great experiences. ae reality is, if you are at definition of channel, the categories we sell are bought and stores. much more accurate is people are and they are in physical locations and they wanted when they wanted. they wanted on their terms. carol: people think how will nordstrom be different than the troubles than lord and taylor fell into? how would be different for you? store aarted as a shoe hundred years ago. i grew up selling shoes. you are literally on your hands and knees in front of the customer trying to take care of them. metaphor for how we try to run the business.

the customer wants things that are different. building a new physical store today gives us advantages. we have technology built into the store. customers can be on their phone and a lot of product discovery for what we sell, fashion begins online. we know that over half of our store sales involve a visit to our website. usually on someone's phone. there are a lot of features that we can build their and the architecture of the place is pretty different. we have followed this over the years. historically, retail especially mall-based retail has been inwardly focused. almost like a fortress. you enter a different environment. it is shielded off from the rest. we want to do the opposite. carol: it's interesting you say

that because when you look at the retailers that have had problems, if you shop at nordstrom you know exactly what you're getting. the brand and identity are very clear. it --that don't do what about the fallout we have seen in retail? over-stored. it's not a newsflash that america has too many stores. people are online more. will there be no stores? of course not. people like to touch, feel the sizes. our onlinesting that return, the vast majority of customers choose to come into the store to do it. we have free shipping online returns that they would rather come to the store. it's easier than putting and a box. customers will do what they want to do.

our job is not to force them into a channel that we prefer. we give them options. we let them do what they want to duplicate -- do what they want to do. next a conversation on the future of cannabis and how high the industry can go. jason: i see what you did. this is bloomberg businessweek. ♪

♪ back to bloomberg businessweek. i'm carol massar. jason: i'm jason kelly. you can listen to us on the radio. a m naik 60 in the bay area. 960 and on the up. jason: we had to talk cannabis.

last: it was a big story year, this year and next year. >> we believe that today, up to $100 billion industry. most of it is served by the black market. less than 10% of the transactions in cannabis last year were done through regulated stores. that's what's exciting. we are not trying to tell you this needs to be created. it is already there. we just need to transfer out of the black market. inol: you just opened massachusetts? >> yes we started as a medical business. what was recognized many years ago was that millions of americans were self-medicating with cannabis. we entered the space to help people that were sick.

the social attitudes toward cannabis keep changing. it is becoming more mainstream and as states like massachusetts adopt adult use programs, the medical operators are there and they are the first ones to address that population. carol: what is going to be the biggest part of the market? recreational,l, how does the market play out? is it all of that? >> it is all of that. if you think about cannabis or sickest parte, the of our population cancer patients use it and get great benefits. that is a narrow part of the population. there are only so many people that are that sick. there is also the population that uses cannabis for the recreational or euphoric aspect. replaceople want to chardonnay or scotch with cannabis.

you pointed out cbd. there are millions of americans using it across the country for health benefits. it has the ability to deliver amazing health benefits. one of the main reasons why people go into an adult use store to buy cannabis is to sleep. that's the number one condition. i don't consider that a recreational activity it's a life activity. cannabis is going to become a wellness product that people use for sleep, anxiety, pain. i believe that is the biggest opportunity. luxurylet's do a little and pursuits. a watch industry partner. collectors can now trade in their timepieces. carol: it's an interesting thing. watch pieces -- times are changing. here is my conversation with a founder and ceo. in isbelieve that trade

needed in the space and it is a place that is here to stay. to us about, why not do it in-house? we have seen some luxury brands to this in-house. expertise to find an to evaluate the watch, look at the history of it. we want to trace the history of the servicing of the watch. tolike to have an expert satisfy the customer to evaluate the watch and make an offer and do the trade-in. we thought it was the best way to get an established brand to do it from there. with their expertise. it's all set up. to your point before, what's interesting is it is great for our brand to be able to have a secure way of getting your secondary market watch.

of secondary market watch is they are not serviced, they are not in great shape. when you go through us, we service the watch properly because we have a relationship to guarantee that you will have a watch and good condition. for our website, it is an opportunity to satisfy the demand of having a new watch and converting your watch to a new watch. carol: someone stepping up to buy a new watch, that used to be what you didn't want. it's a new revenue stream for you potentially. >> yes being customer centric means you listen to what the cubs -- customer wants. they don't mind a secondhand watch but they also want to look at the new models.

we were are responding to both needs. when you have a vintage watch, that it is due to your heart and comes from family, you want to keep it and i don't think we will see those watches come back. model of the new avenger line and that has been very popular for us for many years. we can definitely see people going online and saying of the new avenger. we give you the opportunity to sell your old watch and get a new one. thehen we mention automobile industry, that's a great example. get customers to trade-in an old car and trade up to a new car. this is a similar tool now being used in the watch space. every year, there's roughly $5 billion worth of brand-new watches being sold into the united states at retail. those watches continue to be in

circulation but watches don't go to the scrap yard like cars do. where they could now be buying or upgrading to a watch that they do want. jason: bloomberg businessweek is available on newsstands now. carol: also online and on our mobile app. you can find our cover story on disney and the launch of what bob iger calls the most important launch in 15 years. jason: and the long-term effects of tear gas in hong kong. much of the population has come into contact with it since june. carol: in politics, democrats

are cool on wall street. why the feeling is kind of mutual. jason: check out our daily business week podcast. more bloomberg television starts now. ♪ sometimes your small screen is your big screen.

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david: in the last recession, your firm performed extremely well. are you anticipating a recession now? ray: in 2007, it was pretty easy to calculate that there were these debts that came due. when i go through those calculations, it is not the same. david: bridgewater would not be said to be an easy place to work. ray: people love it or hate it. david: in high school were you interested in academics? were you a good student? ray: i would cut classes to go surfing. >> would you fix your tie please? david: people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. i don'