Episode 47: Leadership in an Age of Disruption: Reading Signals Without Complacency

**Charlie Harary** (0:00)
This is Crossing the Chasm, your front row seat to how leaders think in real time. My name is Charlie Harary, RXR's Chief People and Organizational Strategy Officer, and I'm joined with RXR's CEO and leader, Scott Rechler. Join us as we break down what's happening in the world, and we pull out the leadership lessons behind the headlines. Scott, thanks for taking the time.

**Scott Rechler** (0:17)
It's great to be here.

**Charlie Harary** (0:18)
So tell me a little bit about the world today, and I'm looking at Iran and what's happening with oil and the Straits of Hormuz, and it feels like the world is getting volatile yet again. How do you look at it?

**Scott Rechler** (0:31)
This has clearly been the age of disruption that we talked about in the white paper. But I would say one reaction is we now are over 50 days in the conflict with Iran, is that it's going longer than anyone had anticipated. And yet, when you look at the US economy in particular, it seems like it's become somewhat complacent to what's really happening with all the geopolitical turmoil. We have gas prices above $4, oil prices hovering around $100, supply chains disrupted, so any oil-based products having a hard time coming to the US, that will eventually impact the broader economy. Yet, we have the stock market, the S&P, the NASDAQ hitting new highs in the face of that. As we speak to our clients that are out there, the businesses, they're not changing their long-term plans about growing their businesses today.
So there's a dynamic that when I reflect on, I try to know why is there not more of a reaction to the potential fallout from this conflict, right? Because there's no clear path to the end yet. No one can say with any degree of certainty of how this ultimately comes to a conclusion. And you'd say, is it that A, that the American public and business community and investors view the US economy so strong and so resilient, and the AI expansion that we're seeing is just fueling this growth that can be more powerful than the impact of the conflict? Have we gotten complacent and seen patterns in the past, like we saw with Liberation Day, that people panic, stock markets go down, but then a policy changes and everything goes back up? And so there becomes this sense of a FOMO where people are buying through the noise and assumption that it's just going to be able to turn itself around in that mix. So that's, I think, where it's concerning, because the third option could be that we just haven't gotten to it yet. The impact of supply chain disruption, the impact of the geopolitical uncertainty in the Middle East region, and the implications of that, and the implications of what could happen with Europe with that haven't yet been felt. And the US, of all the places in the world, is the one that is the most immune to it because we are ourselves, we actually produce more oil and gas than we consume. So we're a net exporter of that, and our economy is more independently strong than these other parts of the world, like Europe, which, you know, the equivalent of a gallon of gas in Europe is $10 a gallon right now, right? There's a question as to whether they're going to have enough jet fuel, so they're putting for planes, they're canceling flights because of a shortage of jet fuel. So they're feeling the impact more real time than we are here in the US. And the question is, is it just a matter of time before it hits us?
Or do we have some level of resiliency that gives us a greater level of of durability during this period of time?

**Charlie Harary** (3:36)
Do you feel as if we're like getting conditioned for volatility?
As if the Trump administration has come in and the pace of those initial policies and the ups and downs that we endure in a way, like you had said, that feels like we've never really had to be subject to an environment that was this volatile before. Are we just more immune? Are we just recognizing that we just can't predict the future? Is it a condition that we as a society is going through and we just really look at the world and go either it can change in a moment, I'm not going to make a long term plan or I really have no idea to know what's going to be in the future, whereas maybe a couple years ago I really had a better chance at prediction. So let me just do what I always do.