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G100 Network Notebook | July 2015

What Big Hacks Have in Common

Simple safeguards, such as two-factor authentication and timely patches to known vulnerabilities, could have prevented devastating cybersecurity breaches at Sony Pictures and the Office of Personnel Management, the largest government data breach in history. That is one takeaway from an exhaustive Fortune report, based largely on emails and documents stolen in the Sony Pictures hack. The long read, which details “a litany of laxity,” serves as a cautionary tale. For example:

After pilfering Sony documents, the invaders turned to swiping emails for top studio executives; the most recent messages are dated just two days before the hackers detonated their attack. By that point they had stolen seven sets of credentials for system administrators and mapped the studio’s entire network. This information was “hard-coded” into the destructive malware, allowing it to infect all the computers those IT managers were authorized to touch.

How to Lead a Turnaround

It starts with the right set of values, says an instructive Quartz profile of former Ford CEO Alan Mulally that highlights some of the crucial decisions in turning around the iconic automaker. Mulally says:

Leadership is having a compelling vision, a comprehensive plan, relentless implementation, and talented people working together. People also want meaning. All of us want to know that we are doing great things, that we are touching a lot of people, and that what we are doing is something bigger than ourselves.

Can Bitcoin Help Greece Avoid Another Crisis?

The fast evolving technology behind bitcoin – blockchains and sidechains – could make any transaction cheaper and faster than current digital methods, says this Wall Street Journal column that ranks NASDAQ among the more recent companies experimenting with the technology. What does this mean for Greece? Christopher Simms explains with some help from Michael Casey of the MIT Media Lab:

Because bitcoin is becoming not a currency unto itself but a protocol, like the communications protocol that makes the Internet possible, as well as a platform, like Apple’s app store, the kinds of transaction systems developers could build on top of it are limited only by our imaginations. One idea, says Mr. Casey, is that Greece could create a “collateralized currency” backed by state-owned assets. Cryptocoins representing a fraction of all the country’s islands, ports and factories would hold their value as long as people believe the underlying assets do.

What HR Innovation Looks Like

In Harvard Business Review this month, Steven Rice, CHRO of the Bill and Melinda Gates Foundation and G100 Talent Consortium advisor, and USC business professor John Boudreau outline how the HR team at Juniper Networks innovates to help the company strengthen the quality of talent, operations, and customer service. They say:

Juniper has explicitly moved away from the “best practice” approach. Instead, it strips a promising practice down to its kernel of insight and then expands that insight into work experiences that are right for the company’s unique climate, brand, and business objectives. This allows and requires the application to have impact in connection with other components, leading to a greater payoff.

Growth in Partnerships

Cloud computing prodigy Aaron Levie, CEO of Box, used to poke fun at legacy companies, such as Microsoft and IBM. Now, as the company matures in the competitive enterprise software industry, Levie is partnering with those established firms to position his company for growth. From TechCrunch:

Potential channel access is only part of the equation. With the IBM deal, Box can also be a better version of itself. By snagging access to IBM’s datacenter infrastructure, the smaller firm can sell its Box-In-A-Box product, called Developer Edition, around the world more easily, without having any sort of tenancy issues. So, with IBM’s help, Box can sell its extant products faster.

Transformation Lessons from Startups

A new trend in corporate transformations has emerged from our growing understanding of entrepreneurialism: more business model innovation via “minimum viable transformation,” says a white paper from John Hagel of Deloitte’s Center on the Edge. He offers companies a useful guide to prepare for a concept that he predicts will spread. Hagel says:

Beginning transformation at the “edges” of a business is a more reliable strategy for change than attempting to directly transform the core. … An “edge” [is] a promising new business arena that could provide a platform for showcasing the potential of a fundamentally different business model and that has the potential to scale rapidly. … Edges give the transformation team far more degrees of freedom to test and experiment with new approaches to evolving a fundamentally different business model.

What’s Next for the Sharing Economy?

More regulation, hopes Best Western CEO David Kong, who argues why more cities should adopt short term rental bans with stiff penalties for lawbreaking landlords. Kong explains the hotel industry’s rationale in his inaugural blog post. An excerpt:

Airbnb and other short-term rental sites drain affordable housing, turning available real estate into tourist destinations. … An October 2014 report from the New York Attorney General indicates that the volume of Airbnb rooms in NYC surged from 2,650 in 2010 to 16,500 in 2014, and that nearly 75% of the listings violated city or state laws. Add 1,150 illegal-hotel complaints and 883 inspections…, and the economics behind room sharing appears in a different light.

The Internet of Things, by contrast, is one area less likely to receive regulatory scrutiny, mostly due to a steep learning curve in Washington, says a Politico investigative report. For example, US Rep. Daniel Issa, co-chair of the Internet of Things Caucus, said:

There’s 435 members of the House, 100 members of the Senate, and most of them still don’t know what the Internet of Things is.

Breaking Bias

New research in Strategy+Business serves as a fitting footnote to our conversation, organizing a list of our most prevalent biases and proposing respective mitigation strategies. The authors say:

People overestimate the degree to which they can control the negative effects of a disaster and underestimate the time and effort it would take to prepare for one. All of these biases, and others, lead many great companies and institutions to make disastrous and dysfunctional decisions.