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G100 Network Notebook | March 2014

Stan McChrystal’s Playbook

Former General Stan McChrystal focuses not on war stories but how an organization facing extraordinary pressures can promote collaboration among different team members. Newsweek offers an inside look at how McChrystal’s new consulting business works with large corporate clients:

The McChrystal Group is selling…a blueprint of how they used to hunt Al Qaeda repackaged into something it hopes corporate America can implement. Using tactical training sessions, war room action plans and one on one coaching, the firm has, effectively, come up with a step by step tutorial on how to do what they did: fight a digital age war.

Are Older Workers a Boon for US Prosperity?

Only if we abandon society’s notion of a fixed retirement age and engage older Americans in the workforce through specific government and business reforms, says this compelling piece by Michael Hodin of the Global Coalition on Aging and AEI’s Nick Eberstadt.

[Recent data from the UK] suggest that increasing the total number of workers over 65 by just 2.6% a year could boost per capita output in 2037 by as much as 6%, cumulatively adding nearly £1.7 trillion to the U.K. economy-more than total British GDP today. … Corporations must change their approach to hiring, training and retaining talent to capture the abilities of older workers. … If human-resource executives took the lead, their influence would spread [to society].

Exploding the Myths of CEO Succession

CEO succession planning is steeped in misconceptions. In a new article published by Stanford’s “Closer Look” series, Stephen Miles and his co-authors debunk “Seven Myths of CEO Succession.” Among other things, the article argues that while boards are responsible for CEO succession, most directors are “not adept” at evaluating the CEO talents of incumbents or senior executives in their pipeline:

A significant percentage of directors (21%) report having only moderate or little understanding of the strengths and weaknesses of the current CEO. … Directors do not have sufficient exposure to senior executives below the CEO, making it difficult to accurately assess their capacity for leadership and growth. … Less than a quarter of directors (23%) formally participate in senior executive performance reviews, and only 7% act as a professional mentor to these individuals.

The paper also identifies best practices in executive development and CEO succession for companies looking to shift from a process focused on risk management to one that builds shareholder value. Interesting throughout.

The Fading Opposition to Keystone

Over the past year, public support for Keystone has surged, with 65% of Americans backing pipeline construction, says this recent Washington Post/ABC News poll.

The project has even made converts out of vocal environmental critics, such as Science editor-in-chief Marcia McNutt. This editorial explains the reasons why she switched her opinion and suggests common ground for a compromise:

Blocking Keystone XL will not reduce GHG emissions nor will it increase investment in renewable forms of energy. Allowing Keystone XL to move forward could advance both goals. … As part of a compromise to allow the project to move forward, let’s now insist on an income stream from Keystone XL revenues to support investment in renewable energy sources to secure our energy future.

eBay and Activist Investors

Carl Icahn’s campaign to split eBay from PayPal gets a lot of press. But this astute analysis from former LinkedIn CEO Reid Hoffman, a director on PayPal’s founding board who helped design the union with eBay, cuts through the noise, contrasting Icahn’s profit motives with longer-term value creation at eBay.

While Icahn is insisting that eBay and PayPal are…”two very different business platforms” that should separate in order to improve their effectiveness, everyone else in the [payment] space is converging as furiously as they can. … [As competition in the payment sector intensifies], controlling major commerce platforms will become even more important to payments players, because they’ll still be able to create value by building valuable ecosystems on top of them.

Why Most Companies Fail to Hire Great Managers

A Gallup survey reveals that companies fail to recruit candidates with the right managerial talent 82% of the time. The source of the problem, according to the survey, is a lack science and research in the manager selection process:

Most companies promote workers into managerial positions because they seemingly deserve it, rather than because they have the talent for it. This practice doesn’t work. Experience and skills are important, but people’s talents…predict where they’ll perform at their best. … When you do the math, it’s likely that someone on each team has the talent to lead. But given our findings, chances are that it’s not the manager.

Data Analysis as the New Standard for News

Great New Yorker interview with acclaimed statistician Nate Silver provides background on his new and highly-readable website, Five Thirty Eight, now operated by ESPN. The news venture, which covers everything from the NCAA bracket to new weather statistics, aims to fill what Silver regards as a complete lack of intellectual rigor in traditional media:

We think that’s a weakness of conventional journalism, that you have beautiful English language skills and fewer math skills, and we hope to rectify that balance a little bit. … The op-ed columnists at the New York Times, Washington Post, and Wall Street Journal are probably the most hedgehoglike people. They don’t permit a lot of complexity in their thinking. They pull threads together from very weak evidence and draw grand conclusions based on them.

Securing the Cloud

Cloud adoption rates have nearly doubled between 2010 and 2012, but security represents a hurdle for many IT departments, says an EY white paper. This new research, which reveals the risk of a hands-off approach to cloud services, is a useful model for companies looking to promote secure cloud adoption.

It takes little more than 15 minutes…to set up a cloud solution, making it an easy workaround for business executives that too often hear “no” from their IT functions. … The proliferation of this phenomenon without IT oversight creates growing security, privacy and financial risks to the organization. … Often, there is a gap between the controls typically implemented in the cloud and the controls necessary to create a secure, trusted and audit-ready cloud environment.