TO OUR management team: When I left the White House yesterday, after another two-hour round-table with the president, I knew in my gut that it was time to put in place “plan C” for this great company. The boxer, Mike Tyson, had a point when he said “everyone has a plan until they get punched in the mouth.” But so did Winston Churchill when he observed that “plans are of little importance, but planning is essential.” We owe it to our investors, customers and 131,000 employees globally, to have a reset.

A year ago we were pursuing plan A. We expected that Hillary Clinton would win the election and that American business would continue as it has since the subprime crisis, meaning slow growth and lots of red tape but open borders and record profits that we could return to shareholders as dividends and buy-backs. Together, our firm and fellow members of the S&P 500 index have been paying out $1trn a year, far more than we invest.

After November 8th, we switched to plan B. For a few months it seemed a Republican-run Congress and White House might deliver sweeping deregulation and tax reforms to set the economy free, just as in the Reagan era. We dusted off plans to raise investment by a fifth and boost hiring at home. Like most firms we loaded the gun but didn’t pull the trigger. That was a hell of a great...Continue reading