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G100 Network Notebook | September 2018

The Most Expensive Cyberattack in History

In a matter of hours on June 27, 2017, the NotPeyta cyberattack shut down the Ukrainian government and many major utilities and paralyzed operations at global companies including Mondelez, Merck, and Maersk. The sum total of damages is estimated to be over $10 billion, making NotPetya the most costly cyberweapon to date. Wired explores how the cyberattack unfolded, including this surreal scene at Maersk’s HQ, where the breach effectively froze shipping operations:

Maersk employees were running down hallways, yelling to their colleagues to turn off computers or disconnect them from Maersk’s network before the malicious software could infect them, as it dawned on them that every minute could mean dozens or hundreds more corrupted PCs. Tech workers ran into conference rooms and unplugged machines in the middle of meetings. Soon staffers were hurdling over locked key-card gates, which had been paralyzed by the still-mysterious malware, to spread the warning to other sections of the building

Betting Big on AI in the Race for Talent

Facing a 4% unemployment rate and a widening skills gaps, HR leaders are increasingly turning to AI for leverage in a tighter battle for talent. Fast Company offers an update on how Unilever, IBM, and Johnson & Johnson are utilizing AI capabilities to improve recruiting, hiring, and career management. At least one initiative at Johnson & Johnson points to promising results:

The company teamed up with Textio, an AI startup that analyzes job descriptions to remove gender-biased language while also measuring which terms are most effective in attracting talent. … When J&J rolled out this system last October, response rates to recruiting write-ups rocketed 24%, and the Shine system’s [Johnson & Johnson’s hiring platform] Net Promoter Score quintupled within four months. Most compellingly, J&J’s Textio-enhanced job listings, dissected to remove gender bias, resulted in a 14% increase in qualified female applicants for STEM roles and a 7% uptick in hires.

Lessons from the School of Bezos

At the Economic Club of Washington earlier this month, Carlyle Group co-founder David Rubenstein interviewed Amazon CEO Jeff Bezos, on the heels of his company reaching a $1 trillion market value. Bezos, relaxed and reflective, spoke about scaling an organization from five to 500,000 employees, his take on the role of a free press, and Amazon’s legendary customer obsession. A few of his most relevant insights:

  • On failure: “We make mistakes – and we’ve made doozies like the Fire Phone and many other things that just didn’t work out. …. But the big winners pay for thousands of failed experiments.”
  • On avoiding short-termism: “All of our senior executives operate the same way I do: they work in the future, they live in the future. None of the people who report to me should really be focused on the current quarter.”
  • On time management: “I like to do my high IQ meetings before lunch. Anything that’s going to be really mentally challenging – that’s a 10 o’clock meeting. Because by 5:00 p.m. I’m like ‘I can’t think about that today, Let’s try this again tomorrow at 10:00 a.m..’”

Where Defense Goes Next

Few leaders possess as deep an understanding of the geopolitical security landscape as Lockheed Martin CEO Marillyn Hewson, leader of the largest government contractor in the US. Hewson, who was just named No. 1 on Fortune’s Most Powerful Women list, expanded on the company’s new defense innovations:

An important area that we’re working in is hypersonics – things that can travel over Mach 5 [five times the speed of sound], whether it’s weapons or [aircraft or spacecraft or something else]. Others outside the U.S. are ramping up in that area, and we need to stay ahead of the curve, so we’re investing significantly in it. … Directed energy, or laser weapon systems, are [also] very important. You don’t have to have the same replenishment of munitions, so it’s more cost-effective – and just more effective.

The Fight for the Future of the Internet

In a conversation with economist Tyler Cowen, former Google chairman Eric Schmidt offered his prediction that the next decade will see the development of two separate Internets: a US-led one and a China-led one adopted by countries linked by the Belt and Road Initiative. On the bifurcation:

Chinese Internet is a greater percentage of the GDP of China, which is a big number, than the same percentage of the US, which is also a big number. If you think of China as like ‘Oh yeah, they’re good with the Internet,’ you’re missing the point. Globalization means that they get to play too.

Writing In Foreign Affairs, Adam Segal, a China and cyberpolicy expert at the Council for Foreign Relations, outlines how Beijing is pushing forward its conception of the Internet. In addition to mass spending in semiconductors, quantum computing, and AI and the $50 billion already invested on BRI infrastructure, not to mention cyber-espionage, China is ramping up its role in determining international Web governance:

China was essentially absent for the discussions about third- and fourth-generation mobile network technologies, but things have changed. In 2016, Huawei, China’s largest telecommunications company, sent twice as many representatives as any other company to the meeting in Vienna that defined the specifications for the coming fifth generation of mobile networks.

How CEOs Combat Volatility

How can CEOs thrive in an uncertain environment? A new article from The Miles Group explains common behaviors that can derail CEOs in a crisis event and offers strategies for adapting to uncertainty and bringing the executive team back to focus:

Be the absorber. A stress event or crisis requires the CEO as a leader to be calm, cool, and collected, and “absorb” the panic on the team. The CEO must be the focuser, redirecting the energy to help everyone focus on the problem, the facts, the supporting data, and the proposed solutions. The moment a CEO panics, there is a 100X amplification into the company and then people start to worry about the implications for them and are not focused on leading through the issues.

What We Get Wrong About Innovation

Most successful innovation does not come from relying solely on incubators or R&D departments, says former GE vice chair Beth Comstock. Instead, she recommends dedicating approximately 30% percent of the company’s time, resources, and people to new ventures and empowering employees to be creative under constraint. In an interview with Harvard Business Review, the leader behind numerous digital initiatives at GE and NBC shares what she learned working with Jack Welch and Jeff Immelt, leading mission-oriented teams, and what Silicon Valley gets wrong about failure:

I worry about failure because I think we’ve made it into a competition. You go to a lot of different events like I do, and there’s always the [request to] “share your biggest failure” story, right? And it’s almost like a competition – am I worthy of failure? Have I failed spectacularly enough? In our companies – the markets aren’t rewarding us, our processes don’t reward us for failing.