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G100 Network Notebook | January 2018

CEOs’ Existential Threat

The tech-adoption cycle has sped up so rapidly that any CEO not personally leading a digital transformation in their companies will inevitably fail, says Tom Siebel, chairman and CEO of C3 IoT. On the coming corporate extinction event and those CEOs who are reinventing the transformation playbook:

When I see CEOs who may be experimenting here and there with AI or the cloud, I tell them that’s not enough. It’s not about shiny objects. Tinkering is insufficient. My advice is that they should be talking about this all the time, with their boards, in the C-suite—and mobilizing the entire company. The threat is existential. For boards, if this isn’t on your agenda, then you’ve got the wrong agenda. If your CEO isn’t talking about how to ensure the survival of the enterprise amid digital disruption, well, maybe you’ve got the wrong person in the job.

Next Steps in Urban Revival

The “city as platform” model advocated by Alphabet’s Sidewalk Labs is slated for its first North American trial. Quayside, a planned community on the Toronto waterfront, will be supported by a “digital layer” to monitor and manage all infrastructure and activity in the neighborhood. From The Atlantic:

Kitchen appliances switched on too long, overflowing trash bins, and high-traffic park benches could be monitored and addressed by this digital layer. So could changes in air quality and spikes in noise levels. Each passing footstep and bicycle tire could be accounted for and managed. This ocean of data could inform urban planning, research, and new software development, including a special platform by which Quayside residents could access public services.

Autonomous vehicles will play a critical role in the smart city revolution, a point Ford CEO Jim Hackett highlighted in his recent op-ed on disrupting transportation:

Before cars, city streets acted as bustling social hubs where neighbors and families could gather, vendors could sell their goods and children could play. Over time, parks and public spaces were sacrificed for parking lots and highways, and cities came to be associated with social isolation. Streets compose one-third of public land in our cities. By developing smart vehicles for a smart world, we can reverse this trend and return these valuable resources to the people.

The Bitcoin Distraction

By focusing on Bitcoin, the cryptocurrency propped up by “a veritable goon squad of charlatans, false prophets and mercenaries,” we are missing the bigger story of blockchain’s promise, argues Steven Johnson in The New York Times Magazine. Open, decentralized blockchain networks will allow people to own their digital identities, fundamentally disrupting the closed architecture that defines tech companies:

The blockchain evangelists behind platforms like Ethereum believe that a comparable array of advances in software, cryptography and distributed systems has the ability to tackle today’s digital problems: the corrosive incentives of online advertising; the quasi monopolies of Facebook, Google and Amazon; Russian misinformation campaigns. If they succeed, their creations may challenge the hegemony of the tech giants far more effectively than any antitrust regulation.

What Kind of Data Does AI Need?

Data used to build and train AIs is not the same data needed to operate and refine predictions, says past G100 speaker Ajay Agrawal in Harvard Business Review. Organizations err in not understanding how the data they have historically collected is limited to a one-time benefit:

New data allows you to operate your prediction machine after it is trained. It also enables you to improve your prediction machine through learning. While 10 years of data on past yogurt sales is valuable for training an AI model to predict future yogurt sales, the actual predictions used to manage the supply chain require operational data on an ongoing basis.

Doubling Down on Diversity for Growth

McKinsey updated their influential “Why Diversity Matters” report, examining over 1,000 companies in 12 countries to confirm an even stronger statistical link between executive team diversity, profitability, and long-term value creation. The study also identified imperatives for diversity and inclusion practices, including:

-Articulate and cascade CEO commitment to galvanize the organization. Leading companies … promote ownership by their core businesses, encourage role modeling, hold their executives and managers to account, and ensure efforts are sufficiently resourced and supported centrally.
-Define inclusion and diversity priorities that are based on the drivers of the business-growth strategy. Top-performing companies invest in internal research to understand which specific strategies best support their business-growth priorities.
-Craft a targeted portfolio of inclusion and diversity initiatives to transform the organization. Leading companies use targeted thinking to prioritize the I&D initiatives in which they invest, and they ensure there is alignment with the overall growth strategy.

The End of Cloud Computing?

Though the cloud isn’t going away, more intelligent, customizable, and mobile IoT devices and systems portend a shift to edge computing. Per The Economist:

The dominant narrative in the tech industry—that most data are best crunched centrally in the cloud—is also undermined by the fact that many new applications have to act fast. According to some estimates, self-driving cars generate as much as 25 gigabytes per hour, nearly 30 times more than a high-definition video stream. Before so many data are uploaded, and driving instructions sent back, the vehicle may well already have hit that pedestrian suddenly crossing the street.