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G100 Network Notebook | October 2018

Why Innovation Dies at Big Companies

Do incumbents underestimate the velocity of change for disruptive technologies and competitive upstarts within and outside their industry, as Clay Christensen’s argument goes? Or, as economists Rebecca Henderson and Kim Clark posit, does a failure to reinvent organizational structure in legacy companies doom good ideas? Tim Harford parses examples of ineffective “architectural innovation“ at the British Army, Xerox PARC, and IBM. An excerpt on the latter’s fight for dominance in the PC market:

For IBM, the shift from a mechanical tabulator to a mainframe digital computer was like the shift from rifles to the machine gun: an awesome step up in firepower, but a modest adjustment to organisational capacity. The tank was like the personal computer: it may have been a logical step forward given the technology available, but it required a different organisational architecture – one that bypassed and threatened the existing power centres of Big Blue. That was the problem.

High Season for Cyberattacks

With a week until midterms elections, vulnerabilities in the US electoral system and technologies are under the spotlight. Threat reports are dizzying: county election offices hacked by Kremlin-affiliated groups, at least a dozen House and Senate races targeted by malicious cyberactivity, plus the discovery of mass social media disinformation campaigns designed to sow discord among voters. Vox offers a detailed, if harrowing, update on the scale and sophistication of electoral cyberattacks:

The United States this November won’t have one midterm election, or even 50, but a number closer to 10,000. It’s these local officials, in Knox County and elsewhere – and not the NSA, FBI, or DHS – who are standing foursquare against cyberattackers this November. It’s as if America’s most ancient civilian office, the local election clerk, has become saddled with new and alien responsibilities tantamount to a military contractor. “We are at a fundamental disadvantage because it’s not a fair fight,” says a big tech security expert, who spoke on background in order to speak frankly about election vulnerabilities. “It’s now every county versus the FSB.”

We will discuss the state of American politics and its implication for business at our G100 Fall Meeting next week.

Hard Truths of Leadership in the Valley

No more “move fast and break things.” Silicon Valley CEOs and executive officers have significant work to do to repair tech’s leadership crisis, says John Hennessy, chairman of Alphabet and former Stanford president, beginning with an emphasis on long-term thinking and consumer impact. In Wired, Hennessy also discusses why higher ed institutions, including Stanford, have added classes on ethical decision-making to their required coursework:

There are specific courses that try to bring to bear core ethical principles that arise in the tech sector. So let’s just take one that’s now the topic of hot discussion: bias in machine learning systems. Of course that bias essentially comes from the fact that the training data has bias and it reflects all kinds of biases in society. So you, for example, take police records and you use those to train a system for future criminal cases. You’re going to start arresting people on the basis of the fact that they resemble other people with existing criminal records. And that’s going to lead to all kinds of prejudicial and discriminatory things. We’ve got to train people to look for that.

At our BoardExcellence Fall 2018 Meeting in Menlo Park next month, we will address the board’s role in governing ethical data use.

Driving Behavior Change with a Digital Nudge

Humu is placing its bets on nudge theory. Laszlo Bock, former head of Google’s people operations, has brought his new digital behavioral coaching startup out of stealth mode. The company utilizes people analytics and machine learning to send managers and employees an electronic nudge in the form of targeted emails and texts, recommending behavioral changes to drive a more effective – and more human – organization. From the Washington Post:

A manager might get a text message just before the meeting to encourage quiet teammates to speak up, a way of improving a sense of inclusion. Another employee who is going to be in the room might get an alert just before the meeting urging them to consider speaking up early on. Bock said those kinds of real-time nudges to multiple people are important for change. “This is where traditional framing falls down,” Bock said. Employees might go individually to training sessions on negotiating, being a better manager or getting better at speaking up. “But then you go back to your work environment, and everyone’s the same. And your behavior is not going to change because there’s nothing reinforcing it.”

Stalled Progress in Workplace Equality

In the fourth year of their Women in the Workplace study, McKinsey and LeanIn.Org report that little progress has been made in women’s representation in the corporate pipeline. Drawing on data from 13 million employees at over 270 companies and 64,000 surveys, they highlight some dismal findings:

  • Women are less likely to be hired into manager-level jobs, and they are far less likely to be promoted into them – for every 100 men promoted to manager, 79 women are. Men end up holding 62 percent of manager positions, while women hold only 38 percent.
  • For almost two-thirds of women, microaggressions are a workplace reality. Most commonly, women have to provide more evidence of their competence than men and have their judgment questioned in their area of expertise.
  • Fifty-five percent of women in senior leadership, 48 percent of lesbian women, and 45 percent of women in technical fields report they’ve been sexually harassed.

For more on women, work, and how companies are moving forward in hiring and promotion, see the Wall Street Journal’s special report on this topic.