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G100 Network Notebook | August 2014

Can John Chen Save Blackberry?

Blackberry has been widely written off as one of the great tech tragedies of the modern age. Yet CEO John Chen believes that the company still has a chance. This San Jose Mercury News story gives us a glimpse of how he has managed to recruit a top team:

I tell them, “Everything is broken.” BlackBerry is iconic. A lot of people have an opinion about it. A lot of people think it’s dying, dead or should be. This is our chance to show they are wrong.

Design Thinking and Airbnb

Design thinking helped transform the Y Combinator startup into a $10 billion company, says this novel account of the product design team. An excerpt:

Silicon Valley entrepreneurs tend to become comfortable in their roles as keyboard jockeys. However, going out to meet customers in the real world is almost always the best way to wrangle their problems and come up with clever solutions.

CEO Brian Chesky, in an amusing yet revealing exchange with Stephen Colbert, explains the staggering reach of this industry disruptor:

Tonight, 375,000 [Airbnb customers] are staying together and living together in 160 countries. … Six hundred thousand people went to the World Cup – 120,000 of them stayed at an Airbnb.

Building The Future HR Department

Abundant research shows Ram Charan’s call to divide HR departments into administrative and organizational functions “is dangerous and counterproductive,” warns USC business professor John Boudreau. Instead, Boudreau recommends a more nuanced approach to future HR challenges:

Retooling HR makes organization leaders smarter by applying their existing sophistication about finance, engineering, operations and marketing to HR and talent decisions. It does require that leaders reach across functional boundaries, but that’s different than simply placing compensation and benefits under the CFO.

Trends in Cybersecurity

Spurred by Edward Snowden’s leaks about NSA surveillance, more companies are focusing on internal cybersecurity threats, says the Los Angeles Times.

Verizon’s 2014 threat report… noted an uptick in internal espionage incidents, not because more necessarily occurred but because an emphasis on “insider-focused” security resulted in more getting detected. The Snowden news, the report said, “illustrates the risk that exists when an organization must place trust in individuals… Most insider misuse occurs within the boundaries of trust necessary to perform normal duties. That’s what makes it so difficult to prevent.”

Leaders of the Corporate Insider Threat Detection program offer companies useful tips to reduce internal attacks and identify less effective tactics. For example, “Security patches and virus checkers will not prevent or detect access by malevolent authorized employees or third parties using stolen credentials.”

Does It Pay To Have Academics On The Board?

Yes, although the research from the Bank of Finland was largely assembled by academics. The study finds that boards with academics do better in terms of performance and governance:

Academic directors are more likely to sit on monitoring-related committees, such as auditing committees and corporate governance committees, than nonacademic outside directors. … We find that firms with academic directors have higher CEO forced turnover-performance sensitivity, lower cash-based CEO compensation, more patent and citation numbers, higher acquisition performance, higher earnings quality and stock price informativeness.

Streamlining Corporate Bureaucracy

Surprising figures in this Schumpeter column show organizational complexity has increased six fold since 1955 and senior executives now spend two days a week in meetings. The Economist says:

Big companies need to have campaigns against internal complexity: Jeffrey Immelt, General Electric’s boss, is seeking to introduce a “culture of simplification,” as part of a plan to cut the giant conglomerate’s overheads from a peak of 18.5% of revenues in 2011 to 12% in 2016.

Modi Reforms: Where’s The Teeth?

That scrutiny comes from Bloomberg columnist William Pesek, who characterizes India PM Narendra Modi’s early tenure as “all-rhetoric-no-reform.” He adds:

If a supposed maverick with the fattest parliamentary mandate in three decades can’t deliver on easy reforms like opening the insurance industry, how much can the world really expect?

More optimistic is this Knowledge@Wharton piece by Manish Sabharwal, chairman of the Bangalore-based Teamlease Services who sees big opportunity in labor reforms already underway.

The changes to the Factories Act, Apprentices Act, and Returns and Registers Act are useful, targeted and specific. … After 50 years of vested interests colluding with the lack of political courage, these labor reforms seem almost unbelievable.

When Taking Risk Pays Off

Qualcomm co-founder Irwin Jacobs, celebrated recently as a Computer History Museum Fellow, tells an inspiring story about risk taking. Under Jacobs, Qualcomm pioneered the country’s first CDMA mobile network, despite widespread industry skepticism about the technology. As he tells it in this three minute video, the demonstration that launched CDMA almost never happened.

What Golf Can Teach About Tipping

This Golf Digest piece explains the high expectations for tipping from golf professionals. Good peek into the PGA culture and especially interesting is the portrait of Phil Mickelson:

Everywhere he goes, the five-time major champion leaves a trail of exceptionally happy staff members. He’ll tip $300 to hostesses for seating him at empty restaurants, and another $300 to valets parking his car. The stories of him handing small, folded-up $100 bills to the young girls at lemonade stands at the Byron Nelson Championship, then watching in delight as they unravel the prize, have made their way into folklore.

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