Motley Fool Money - "Search is forever."

Episode Date: July 25, 2022

Weber's CEO gets the boot from the board of directors. (0:22) Jason Moser discusses: - Why more company CEOs are on the hot seat - Expectations heading into a big week for Big Tech earnings - Why the idea that "search is forever" should give Alphabet shareholders comfort (12:57) Ricky Mulvey talks with Jennifer Moss, author of "The Burnout Epidemic" about one tech company that's nailing the hybrid transition. Stocks mentioned: WEBR, AAPL, GOOG, GOOGL, AMZN, META, OKTA, HPQ Host: Chris Hill Guests: Jason Moser, Jennifer Moss Producer: Ricky Mulvey Engineers: Dan Boyd, Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

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If you're 45 or older and at average risk, ask your health care provider about the Coligard test. Colagard is available by prescription only. Learn more or request a prescription today at colagard.com slash screen. Another CEO is out, and we've got a preview of big tech earnings. Motley Fool Money starts now. I'm Chris Hill, and I'm joined by Motley Fool Senior Enlist, Jason Moser. Joining me here in studio, by the way.

Good to see you. Hey, it's always nice to be in studio. You can add Chris Scherzinger to the list of CEOs heading for the exits. Scherzinger has been the CEO of Weber Grill for the past four years. He is out. Chief Technology Officer Alan. Mattula is going to be the interim CEO at Weber Grill. And you never like to see anyone lose their job, but my first thought when this news broke,

Jason, was, oh, this is one of those things we talked about earlier this year. Expect to see more boards of directors keeping a shorter leash on their management teams. And in the case of Scherzinger, you look at the stock performance at Weber Grill. I'm not putting it all on him. It sounds like they're not either. But a change had to be made here. Yeah. I mean, it happens, right? At least it's not Traeger. And I say this is a very happy Traeger grill owner. I have the Trigger smoker. I don't own Trigger stock. But Trigger shares are down 73 percent for the year, whereas Weber down about 50 percent for the year. So it could be worse. But the bigger problem, I think, is that, you know, When I say it could be worse, that really means, actually, Chris, it is going to get worse. If you look at the way the business has been performing, clearly it's run to a lot of headwinds. It's a very difficult economic climate for virtually anyone trying to sell anything, much

less a typically fairly expensive household item like a grill or a smoker or whatever you might be buying from Weber. If you look at the guidance that they have gotten out there, just this quarter ending in June, pegging sales between $525 and $530 million. Now, that's down from $668 million a year ago. I think that you look at these companies, Weber, Trayor, these are, again, sort of companies that played into that stay-at-home stock mania that we've witnessed over the past couple of years as we were spending more time at home, cooking at home, and I think a lot of people sort of upgraded. That's great. I understand it. But these are, you know, these are, you

These are not purchases that you make very frequently, too. I don't necessarily put all the fault here on the CEO. It's a very difficult business to run this kind of a business. It's a large ticket purchase, and then you're probably not really going out and buying another grill for several years, hopefully. They make these grills really well now. They're very durable. They can last a long, long time. So they've got to figure out a way to go beyond just the grill, right?

They're selling things like wood pellets or charcoal or even potential food plans, recipe ideas and whatnot. That really hasn't proven out yet, right? You still need to see over some time whether that actually can develop. It doesn't look like the rest of the year is especially optimistic, right? I think they've suspended guidance for the full year of fiscal 2022, basically due to uncertainty. Now, they're not the first ones to do that. But like I said on Twitter, and maybe Scherzinger just felt like you just felt like you,

He was just sick of getting grilled on the calls, right? Hell! Seriously, though, I mean, it's a very difficult job. I don't know that he, I feel like he probably walks out of a job like this with some financial certainty. Maybe he's kind of just happy to be done with it. It's possible. The stock is, at one point, was down about 20 percent this morning.

It's bounced back a little bit from that. But as you said, it's down about 50 percent for the year. I understand anyone who looks at shares how much they've pulled back from when it went public less than a year ago and thinks, ooh, well, maybe this is that. I would just point you to the comments from the board member who came out as part of this announcement and made it very clear, like, look, this is not going to get solved quickly. This is a brand with some equity in it. There is a version of the future where things turn around.

I think if you're looking at Weber Grill and it's on your watch, says, I think you've got to wait and see who the next CEO is. You've got to see who are they bringing in, and does he or she have a plan that resonates with you, maybe then by a couple of shares of this stock? But right now, everything about this situation, to me, says, stay away. Yeah, I fully agree. And I mean, I say that just, again, from the perspective of the action, but right, you know, actual business model itself. I think you're right. They've got tremendous brand equity. They

make great products, right? They have a status in this market. It just is kind of one of those things where, and we've seen this before, right? Good product doesn't always translate into good investment, right? It's the nature of the product, and you have to take that in consideration as how a business monetizes that. And it's not to say there aren't ways for them to be able to come up with some more meaningful and recurring monetization down the line. But that is going to be dependent on leadership that takes this role. And there's a lot we just don't know yet. This is a corner that is very difficult to see around. And so they're going to have to be very, I think, deliberate and the talent they bring in here, because you've got to be able to paint that picture

going forward of how you take this business to the next level. Because, again, great product that doesn't always translate into a good investment. We're in earnings season, and you never want to focus too much on any one earnings report for a business. We're long-term investors. We try not to get hung up on a single earnings report, or for that matter, a single earnings season. Having said that, this seems like a pretty consequential week for this particular earnings season, because we're going to get reports from Apple and Amazon and MetaPlune, and MetaPlo. platforms, Shopify, among others.

How are you feeling? What, if any, expectations do you have about this week? There is a level of trepidation that I'm feeling personally, and I'm seeing, I take comfort in the fact that I see it in others, sort of walking gingerly into this earnings season. As Matt Arger's singer said on the radio show last week, it's just sort of like, okay, so we just don't want to disappoint. Just don't disappoint us too much, and we'll bid your stock up. It sort of feels that way, although with, look, some companies are just more important than

others by virtue of their size. That's why I'm feeling a little bit of trepidation, particularly in the case of the big three Apple, Amazon, and meta platforms. Yeah, I mean, it is obviously a very big quarter here, and it did seem like last quarter, no matter what a company reported, the market just wasn't having any of it. And it's obviously been a very difficult year for investors. You're looking at, what, you got Google tomorrow on Tuesday, you got Meta on Wednesday, you got Amazon on Thursday.

I think we're going to get an interesting look into the advertising market with all three of those businesses, actually. And starting with Google, you look at Google revenue last year in the quarter, they're getting ready to announce $61.8 billion. This quarter, just a tad under $70 billion. So there's still projection there that the company will be growing. Now, it remains to be seen whether they hit that or not. But I think it's more knowworthy what meta's going through right now.

And this is a company that has really pivoted in its direction. I don't know that it's necessarily going to work out. The metaverse is still something that really is not fully understandable by a lot of people in exactly how they're going to be able to monetize it. Is it something that the masses are going to buy into? What I think is really fascinating, you look at meta, in Q2 a year ago, the recorded revenue just north of $29 billion. The business is actually forecast to contract this quarter, so it's actually going to shrink.

Now, they may surprise to the upside there, but the point remains. This is a business that's in transition, and growth has... stall, of course. And I think part of that has to do with this conscious transition they're making, this pivot into this metaverse idea. But it's also a very competitive industry. We saw Snap last week report a quarter with, I mean, the market was just having none of it, right? Growth slows down to 13 percent. Guidance suspended. They can't see what's coming down the pike here. I look at this market. I look at something like a Google versus a meta. in Snap and whatever else, TikTok.

I mean, to me, I'd like to say that social is fleeting, but search is forever. I think that really holds true. I mean, social faces these ongoing competitive pressures of people flocking to the next social platform, right? Today, it's TikTok. People are losing interest in Facebook. They're using Instagram more, but now they're losing interest in Instagram and they're flocking to TikTok.

Something's going to come after TikTok. I don't know what it is. But it's going to be something. And so it remains to be seen there. Now, I think with search and what Google's doing, search is far more resilient because it's so much more essential. We just need search. And what necessarily disrupts search, I'm just not so sure.

I mean, I don't know that that's necessarily as easy a hurdle to clear. So I like a business in this environment like Google, far more than something like a meta, for all of those reasons right there. And then Amazon, of course, building out its advertising business as well, which I think is operating on a 30-plus billion-dollar run rate now, which is pretty fascinating. I mean, that's just, the business with so many different moving parts and ways to make money, and now you're seeing that this is a nice little ad business that they've built there. But to me, it's going to be just fascinating.

Given the sentiment in mobile advertising market right now, it is obviously as low as it could be. I feel like maybe it's a little too low. I look at a business like Google in this environment. I think when you get a business like that trading south of a 20 earnings multiple, man, that just seems like that's a very short-sighted take on a business like that. It's going to be interesting to hear the Amazon call when you think about questions around Prime Day, the recent acquisition of One Health. It seems like in terms of clues to the future, that to me is the call that I'm the most curious

to see the results of. It definitely feels like you know more of what you're getting with a meta and a Google versus an Amazon that is continually dipping its toe in all of these different waters and trying new things out, whether it's retail, cloud, healthcare, grocery, just a million different ways for that business to go. I think they're still really trying to figure out how to piece those puzzle pieces together. Is there a place where I can place a bet on the use of the word only? as it relates to Apple's earnings. I'm just imagining, it's just like, well, they only earned,

the revenue was only, like, it's such a big company. They put up such huge numbers, quarter after quarter, and I feel like this is one of those quarters where the word only is going to get applied to some sum of money that is tens of billions of dollars. I'll tell you, Chris, the big focus out there on sports betting, man, you cannot let earning season betting slip under the radar, because it just is just a sum of money. becomes more and more entertaining every quarter. Jason Moser, thanks so much for being here. Thank you.

Mark Zuckerberg is raising expectations and hoping some of his employees self-select out of the company. One burnout expert sounds the alarm on meta platforms and discusses a tech company that's nailing the hybrid transition. Ricky Mulvey has more. Feeling burned out? Well, that's not only a problem for you, but some of the companies you own as well. Joining us now is Jennifer Moss.

She's the author of the book, The Burnout Epidemic and a Harvard Business Review contributor. Welcome, Jennifer. Thanks for having me. I'm looking forward to this. In a recent Harvard Business Review article, you wrote, quote, that 54% of workers left a previous job because their boss wasn't empathetic to their struggles at work. And 49% said employers were unsympathetic to their personal lives. This business-as-usual mentality caused a ripple effect that some experts believe may have contributed

to the Great Resignation." End quote. How are you seeing the social contract with work? How has it changed over the course of the pandemic? And how is it continuing to change in your view? This has been an evolving topic of interest. For me, I've been writing for HBR on the topic of burnout, researching it, pre-pandemic, started writing the book before the pandemic.

And so there was a lot to be discussed. But what happens in these types of crises is it tends to exacerbate issues that are just kind of boiling up, right? And so what we used to see, and this would be a few decades ago, was that, and this is pre-technology. Technology played a big role in creating this sort of always-on culture of work. So employers were asking more of employees to be working inside of work hours, but at home.

And so this sort of kind of slow trickle down of work being consumed, 24 hours a day, this integration of life, made it so that employees said, well, if you're going to ask me, you know, to work at home and to integrate my whole life and to work, well, I expect different things of you. And what happened in the pandemic was that employers just felt like this is business as usual. They had the same demands, even higher demands. There was still growth expectations. And as soon as we saw that one metric, that productivity was the same during COVID working remote, it was like, oh, you know, this big sort of false measure, whereas people were working three more hours a day or 30% more of their day to hit those pre-COVID goals.

And so what's happening now as employees are saying, you know what, I'm not going to face my mortality for the next, you know, for the last two years for a job that doesn't care at all about my mental health and well-being. And I am done. And it used to be that life was transactional between, and your relationship was transactional between employers' employees, but that's no longer the case. If employers are going to demand so much for their employees and to have them integrate their work in life so much, then there has to be more concern about how that's impacting their life overall. Flexibility can be a double-edged sword, and workload seems to be almost a larger key than just hours at the desk. One company that seemed to learn some lessons about workload for their

employees was the company, Octa, cybersecurity firm. spoke with the CEO, Todd McKinnon. What did he learn about workload during the pandemic for employees and what were some of your takeaways for other companies? You know, I love that conversation with him because he was really demonstrating empathy. He got it and he was measuring. He was gathering data and looking at the data because so often we see our high performers going above and beyond. And we think that that's a really great thing to celebrate, but we're not checking in to see, are they still working at midnight every night? Are they working on weekends? You know, they might seem to express a desire and a love and a passion for their job, but they're still

at high risk of burning out. And so what Todd did was he was just, you know, analyzing when he gave people time off on Friday. So it was supposed to be sort of this meaningless Fridays or a little break where it was like a day off on Friday. He saw that when he did that, his employees would just come back in and work on Saturdays and Sundays to finish the, the, project. So what he came to understand is that it isn't about giving people these Fridays off or even just, you know, the big, big kind of headlines of lots of organizations. You know, we gave a week off to our burnout employees. I mean, that's just such a Band-Aid solution. That's giving ice cream to people that need water. And what Todd is saying is that we need to be upstream.

We need to recognize that workload is not sustainable. So how do I reduce workload? so that I can give someone a Friday off, and they don't need to compensate for that Friday off by working on Saturday and Sunday. And that is really that switch. You know, there's perks and there's optimization for people. Then that's about 20% of our global workforce that really does benefit from that. But 80% of our global workforce needs to have more upstream interventions so that they can then actually enjoy a lot of what employers are spending their money on, which is those optimization perks sort of downstream. tactics. Not every upstream intervention is helping their employees work less, putting that in opposition.

You've now got Mark Zuckerberg at Meta Platforms writing in an internal memo, quote, part of my hope by raising expectations and having more aggressive goals and just kind of turning up the heat a little bit is that I think some of you might decide that this place isn't for you and that self-selection is okay with me. End quote, I'd say Sunder Pichai, CEO of Alphabet, said something similar-ish in an email to Googlers saying, quote, moving forward, we need to be more entrepreneurial, working with greater urgency, sharper focus, and more hunger than what we've shown on sunnier days. In some cases, that means consolidating where investments overlap and streamlining the process. In other cases, that means pausing development and

redeploying resources to higher priority areas. I'll end the quote there. What goes through your mind when you're hearing these statements from, in some cases, beaten down tech companies essentially cracking the whip on employees saying, we need to work harder now in this remote-first hybrid environment. Well, it's frustrating for me as someone who has been sounding the alarm on burnout for a long time. And I get that there is a fear that we're going to have some sort of malaise or people are going to ask too much. We've already defined burnout for a long time as this whiny millennial problem. They're just complaining about work-life balance, which has been so disingenuous and unhelpful. When you actually look at, you know, the definition of burnout, it's institutional

stress left unmanaged. And it's showing up in signs like high levels of depletion and exhaustion. You know, we're seeing people feeling like they have no value at work. They're feeling disconnected from their job. They feel like they're no good at what they do anymore. They're uninspired. And they feel this high level of cynicism, which then cynicism breeds into our, you know, our communities where we don't see people in that same sort of level of optimism and hopefulness. And that is a very dangerous thing. And there's catastrophic impacts to burnout. It can lead to PTSD. It can lead to, you know, it can lead to chronic illness and anxiety and depression and even suicide. So it's not that we can just turn around and say, oh, that thing didn't happen. Let's ignore it. There's a massive hangover for people right now.

They have been dealing in this kind of macro stress surge capacity level. They're experiencing all these different impacts from that. And what we're going to see is, yeah, you're going to see people leave. But I think what we're also going to see is some sort of revolt. And I am seeing that when you look at how many people are actually leaving jobs and not going into jobs at, like we talk about this great reshuffling, people are actually leaving and they're taking time off. We're also seeing the highest level of mental health disability claims in the U.S. and Canada right now. So you might think that you're saving money, but really you're just putting a whole bunch of people in your organization on mental health disability leave.

And what you did see from some of these large firms, these firms that you're talking about, their highest level people, their highest performing people, are exiting the company. And so, yeah, it sounds like this is really great for them, but they are losing a massive amount of wisdom and talent and, and innovative thinking inside their organization. So all of this downstream ends up being bad financially for organizations overall. What are some companies that are handling the hybrid transition in a healthier way in your view? I know you've done some research on Hewlett-Packard. You know, HP is doing a really, here's a thing. I want to backtrack because HB has been doing

this work for a while. You know, they went into the pandemic with high resiliency because they were already doing a lot of upstream interventions. You know, they were thinking about, you know, more equitable paternity and maternity leave. So they didn't see this mass exodus of women. You know, they cared about care leave and family leave and had protections around that. So you didn't have to see that kind of struggle with, you know, with making choices about staying home and caring for your child or are working. So there's these sort of fundamental burnout prevention, you know, mentality around their wellness that may. them more effective inside of the pandemic, made their sort of their customers happy, but also

their employees had high trust scores, trust in leadership, and they felt like their employers, whether they got it right or wrong, had their best interest at heart. And so you saw less attrition within that organization, but they were doing things like, like I said, those fundamental sort of equity fairness pieces. They were also, you know, moved to a hybrid situation, that didn't feel so jarring. Some companies, like, all of a sudden, they're remote because they've, and they never had worked remote before and never even considered it. You know, a lot of financial institutions were, you know, insurance companies and others were really, you know, kind of hit hard by this transition, but, you know, Hewlett-Packard wasn't. And even now, as we go back,

what we're seeing is they're doing things like, you know, listening to their employees, which was something they did in the pandemic too. They had more of this, like, like, Me Anything Style conversation where senior leaders, sea level leaders would go into these conversations every single day for months and they would have their employees just ask their burning questions of them, you know, which created this certainty. And now as they're transitioning, they've offered a full hybrid mindset and their campuses even, they're thinking more around this idea of this is not life on site. I'm going to give you meals to take home to your family because you've told us that that's more important than us doing your laundry for you.

on site and making you, you know, eat the chef's food here and coming home to your family at 10 o'clock at night. So this is that, you know, that shift that we need to think of in the most competitive companies I see and who I've seen, like Unilever and others, are taking on this mindset about listening, empathetic and actively listening to what their employees need, and then figuring out how to make it mutually beneficial. You know, maybe you're listening to this. Maybe you're having a little trouble getting out of bed. You might be feeling cynical. You're feeling. burned out. I can't fix the whole problem in a final question of a podcast interview, but what's maybe

one or two things you can do as an employee just as a worker? You're feeling a little burned out to make today a little bit better. You're right. It's a systemic issue with lots of root causes. It's not going to be solved overnight. But there are some things that we as individuals can do. And there are certain individuals that are more at risk of burnout, those that have high levels of perfectionism, You know, those that kind of look at their work as their identity, they maybe self-describe as a workaholic. I mean, these are all things that are definitely going to lead to burnout. And one of the things that we have to recognize both as leaders and as individual employees is that we've been living in sort of this emergency state for a really long time. And by definition, emergencies are unexpected, right?

So now we know what this is. It is still stressful in some environments. It's, you know, we have different kind of protocols around things, but still, we have been living with this macro stress for a long time. And it's making us feel like everything is urgent. Every time we get an email, every time we get a request to do anything, any type of action that is work-related, and then it's trickling into our life too. We have to deal with it right away. And we have to ask ourselves constantly, is this urgent or am I creating false urgencies around this? How do I create some boundaries around what is worth it? I created this schematic in my life. I created this schematic in my

life, a priority sort of scale. And I say, you know, is this a deathbed regret if I don't do this thing? And, you know, sometimes it has to get as basic as Maslow hierarchy of needs, kind of basic level of understanding around what matters. And if we are putting false urgencies on things, we're also disconnecting from the things that make us well. And so one of the most important things that we need to do is create margins, create space, so that we can spend time on things that give us joy and pleasure, like spending time with our friends, you know, being around our family, having dinner with other people, seeing people eye to eye, and actually going and having coffee with them in person and reconnecting to that part of our community. And all of those things,

eventually if we start to practice them in small micro kind of habits, we'll eventually start to feel better. Jennifer Moss, she's the author of the burnout epidemic. Thank you so much for your time. It was a real pleasure. Thank you. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy ourselves stocks based solely on what you hear. Chris Hill, thanks for listening. We'll see you tomorrow.