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G100 Network Notebook | April 2015

Culture at Apple

Apple CEO Tim Cook, in an exclusive Fast Company interview, refutes the Steve Jobs caricature of a micromanager to reveal his little known qualities as a teacher. Cook says in this interview:

Steve’s greatest contribution and gift is the company and its culture. He cared deeply about that. He put in an enormous amount of time designing the concept for our new campus: That was a gift to the next generation. Apple University is another example of that. He wanted to use it to grow the next generation of leaders at Apple, and to make sure the lessons of the past weren’t forgotten.

Leading Organizational Transformation

CEO Tony Hsieh garnered a lot of press last year when he proposed that Zappos eliminate managers and become the largest company to adopt the non-hierarchical structure, dubbed Holacracy. The transition at Zappos, however, is taking longer than expected, prompting a 24,400-word-memo from Hsieh to employees with action items, self-management literature, and an ultimatum: Get on board or leave.

If employees need to be empowered, it is because the system’s very design concentrates power at the top and makes people at the lower rungs essentially powerless, unless leaders are generous enough to share some of their power. In self-managing organizations, people are not empowered by the good graces of other people. Empowerment is baked into the very fabric of the organization, into its structure, processes, and practices.

Google Hiring Tips

Laszlo Bock, head of People Operations at Google, recently released a highly acclaimed book, “Work Rules!” This excerpt from Wired Magazine provides a good background for discussion:

Sure, it can be fun to ask ‘What song best describes your work ethic?’ but the point is not to indulge yourself with questions that trigger your biases. The goal of our interview process is to predict how candidates will perform once they join the team. We achieve that goal by doing what the science says: combining behavioral and situational structured interviews with assessments of cognitive ability, conscientiousness, and leadership.

Cloud Vendors are More Secure Than Your Business

That message comes from an in-depth podcast with venture capitalist Marc Andreessen. In it, he explains why 2015 marks the year when cybersecurity emerged as a CEO and board priority for Fortune 500 companies and what it means for business in an increasingly online world:

From a technology standpoint, businesses either need to become first-class at security,…with first-class expertise and first-class funding, or they need to work with [cloud] vendors who are. … A lot of CIOs are becoming increasingly aware, especially at companies that haven’t mounted a first-class effort at talent and funding for security, that it is highly likely their cloud vendor is more secure than they are. And it’s highly likely that it has been that case for many years.

How Leaders Step Outside a Successful Legacy

“You’ve got to drive change every day without ever pretending anything was ever wrong. It takes confidence and it takes time,” said General Electric CEO Jeff Immelt, who made headlines this month by deciding to sell off GE Capital, a once-key division created by his predecessor Jack Welch. This New York Times report explains both the divesting rationale and their contrasts in leadership styles. An excerpt:

PG.E.’s corporate resilience, management experts say, owes a lot to its capability to train executive talent. “Markets shift all the time, but G.E.’s leadership engine is strong, and it has picked successors pretty well — and not necessarily predictable choices,” said Michael Useem, director of the Center for Leadership and Change Management at the Wharton School.

Growth in China

Beijing turned heads recently when the People’s Bank of China cut its reserve requirement ratio by 1%, the largest cut since the start of the financial crisis. Several pundits were quick to frame the move in the context of quantitative easing, a poor and “misleading” comparison, argues The Economist. For example:

The loosening is intended in part to replace cash that has left China rather than to pump extra money into the economy. … Unlike central banks that have turned to unconventional tools for general easing when all else has failed, China uses its relending for targeted purposes, hoping to avoid splashing cash all over an economy when debt levels are already too high.

This debt burden, coupled with China’s slowest growth in six years, should prompt greater skepticism about China’s economy, say analysts who provide charts of alternative GDP indicators.

Our favourite chart in terms of China’s imports from Australia and ASEAN (major suppliers of commodities for China) shows that the current state of growth appetite in China is almost parallel to the ‘hard-landing’ scenario in 2008.

When “Caveat Emptor” No Longer Applies

Technology is rapidly closing the information gaps that exist between potential buyers and sellers as well as employers and employees, say economists Tyler Cowen and Alex Tabarrok. This death march of “asymmetric information,” their essay argues, presents several opportunities for both business and government to improve commerce, productivity, and regulation.

UPS knows every time a truck starts or stops, when a door is opened and closed, and whether a driver is wearing his or her seatbelt, among other pieces of information. UPS uses this…to optimize production routes. … As a result of its technology, UPS, the principal, knows more about the actions of its gents than the agents themselves. That is a reversal of principal-agent theory, and that state of affairs is characteristic of the new information revolution.

The Millennial Economy

How will the largest generation in US history change the way we do business? Goldman Sachs offers some clues with an interactive infographic that artfully depicts attitude shifts in purchasing, retail, branding, and wellness. Some good data points help support a bold prediction from author and economist Jeremy Rifkin, “Twenty-five years from now, car sharing will be the norm, and car ownership an anomaly.”

Spring Reading

This year is the 50th anniversary of Moore’s Law that predicted the evolution of silicon microchips would make computing exponentially cheaper and more powerful. An authoritative biography on Gordon Moore, the co-founder of Intel Corporation, illustrates how his remarkably prescient leadership in technology and business helped to shape our digital age. From an excerpt published in Medium:

Gordon’s published article in Electronics may have had little impact in the wider world in 1965, but it affected Gordon himself in a profound way. He had articulated his vision of a future that could be built. He now knew exactly where to go and took it upon himself to work to realize his vision and ensure that the prediction would come to pass.