Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 248 | June 10-16, 2022
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Shaping Section : Ideas and forces shaping economies and industries
How smarter AI will change creativity
The Economist | June 9, 2022
In a sense, that computer is merely the descendant of the power looms and steam engines that hastened the Industrial Revolution. But it also belongs to a new class of machine, because it grasps the symbols in language, music and programming and uses them in ways that seem creative. A bit like a human. The “foundation models” that can do these things represent a breakthrough in artificial intelligence, or AI.
Foundation models are the latest twist on “deep learning” (DL), a technique that rose to prominence ten years ago and now dominates the field of AI. Loosely based on the networked structure of neurons in the human brain, dl systems are “trained” using millions or billions of examples of texts, images or sound clips. Foundation models show that building ever-larger and more complex dl does indeed continue to unlock ever more impressive new capabilities. Nobody knows where the limit lies.
The resulting models are a new form of creative, non-human intelligence. The systems are sophisticated enough both to possess a grasp of language and also to break the rules coherently. Foundation models have some surprising and useful properties. The eeriest of these is their “emergent” behaviour—that is, skills (such as the ability to get a joke or match a situation and a proverb) which arise from the size and depth of the models, rather than being the result of deliberate design. This intelligence is broad and adaptable. This breadth means that foundation models could be used in lots of applications, from helping find new drugs using predictions about how proteins fold in three dimensions, to selecting interesting charts from datasets and dealing with open-ended questions by trawling huge databases to formulate answers that open up new areas of inquiry.
But it also stirs up worries. Inevitably, people fear that AIs creative enough to surprise their creators could become malign. In fact, foundation models are light-years from the sentient killer-robots beloved by Hollywood. Terminators tend to be focused, obsessive and blind to the broader consequences of their actions. Foundational AI, by contrast, is fuzzy. Similarly, people are anxious about the prodigious amounts of power training these models consume and the emissions they produce. A more penetrating worry is over who controls foundation models. And then there is the question of access. Firms are right to fear abuse, but the more powerful these models are, the more limiting access to them creates a new elite. Self-regulation is unlikely to resolve the dilemma.
3 key takeaways from the article
- In a sense, that computer is merely the descendant of the power looms and steam engines that hastened the Industrial Revolution. But it also belongs to a new class of machine, because it grasps the symbols in language, music and programming and uses them in ways that seem creative. A bit like a human.
- The “foundation models” that can do these things represent a breakthrough in artificial intelligence, or AI.
- Foundation models challenge the assumption that it is a threat to repetitive, routine jobs only. But they also show how ai can be used as a software sidekick to enhance productivity. This machine intelligence does not resemble the human kind, but offers something entirely different. Handled well, it is more likely to complement humanity than usurp it.
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Topics: Machines, Technology, Artificial Intelligence
The crypto market has now lost $2 trillion in value. Here are 5 shocking facts from crypto’s Black Monday
By Will Daniel | Fortune Magazine | June 14, 2022
The rout followed yet another report of high inflation on Friday that has investors concerned the Federal Reserve will continue its aggressive interest rate hikes, thereby increasing the odds of a U.S. recession.
The cryptocurrency market saw its total market cap drop by roughly 12% on Monday to just $980 billion. The sector as a whole has now seen more than $2 trillion in losses since its November 2021 peak. The crypto market was hit hard after crypto lender Celsius revealed it was suspending transactions, withdrawals, and transfers on its platform on Sunday citing “extreme market conditions.” The world’s largest crypto exchange, Binance, also briefly paused withdrawals, but has since resumed activity and called the interruption a result of “several minor hardware failures.” All that is just the beginning of the bad news. It was a dark day for cryptocurrencies on Monday. Here are five shocking facts that explain just how bearish the market has become.
- Bitcoin is now at its lowest level since 2020. The world’s leading digital asset, Bitcoin, fell over 13% on Monday to below $23,000, the lowest it’s been since 2020. Despite a monumental rise in 2020 and 2021, after this year’s rout, Bitcoin is just 20% above its highs from the previous crypto market peak in December 2017.
- Elon Musk and Michael Saylor are nearly $1.5 billion underwater on their Bitcoin bets.
- Stablecoins are showing signs of destabilization. With the recent blowup of the stablecoin TerraUSD fresh in the minds of many in the crypto space, continued turmoil in the stablecoin market this week has been a worrying sign.
- Some Bitcoin mining machines are shutting down as prices drop. The drop in Bitcoin has been so dramatic that companies using older computers to mine the cryptocurrency shut them down on Monday as they weren’t able to continue operating profitably.
- The crypto ‘fear and greed’ index is stuck at an ‘extreme fear’ reading. Cryptocurrencies’ “fear and greed” index, which measures sentiment in the crypto market, also remains stuck at “extreme fear” levels. On Monday it hit a level of just 11/100, only three points higher than during the COVID-induced panic of March 2020. And with investors pulling roughly $102 million out of cryptocurrencies last week alone, according to a CoinShares report, more dark days may lie ahead.
3 key takeaways from the article
- The rout followed yet another report of high inflation on Friday that has investors concerned the Federal Reserve will continue its aggressive interest rate hikes, thereby increasing the odds of a U.S. recession.
- The cryptocurrency market saw its total market cap drop by roughly 12% on Monday to just $980 billion. The sector as a whole has now seen more than $2 trillion in losses since its November 2021 peak.
- Five shocking facts that explain just how bearish the market has become: Bitcoin is now at its lowest level since 2020. Elon Musk and Michael Saylor are nearly $1.5 billion underwater on their Bitcoin bets. Stablecoins are showing signs of destabilization. Some Bitcoin mining machines are shutting down as prices drop. And the crypto ‘fear and greed’ index is stuck at an ‘extreme fear’ reading.
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Topics: Global Financial Markets, Crypto Currency, Recession
Saudi Arabia plans to spend $1 billion a year discovering treatments to slow aging
By Antonio Regalado | MIT Technology Review | June 7, 2022
The Saudi royal family has started a not-for-profit organization called the Hevolution Foundation that plans to spend up to $1 billion a year of its oil wealth supporting basic research on the biology of aging and finding ways to extend the number of years people live in good health, a concept known as “health span.” By comparison, the division of the US National Institute on Aging that supports basic research on the biology of aging spends about $325 million a year. The sum, if the Saudis can spend it, could make the Gulf state the largest single sponsor of researchers attempting to understand the underlying causes of aging—and how it might be slowed down with drugs.
The Saudi government may be partially motivated by the belief that diseases of aging pose a specific threat to that country’s future. There is evidence that people living in the Gulf states are aging faster biologically than they are chronologically. Basically, the country is being beset by diseases of affluence brought on by rich diets and too little exercise. Even though Saudi Arabia has a relatively young population, with a median age of around 31, it is experiencing increasing rates of obesity and diabetes. In a 2019 study in the Saudi Medical Journal, Saudi public health officials said the country’s prosperity had led to an “urgent need to establish prevention and control programs.”
The idea, popular among some longevity scientists, is that if you can slow the body’s aging process, you can delay the onset of multiple diseases and extend the healthy years people are able to enjoy as they grow older.
Hevolution hasn’t announced what projects it will back, but people familiar with the group say it looked at funding a $100 million X Prize for age reversal technology and has reached a preliminary agreement to fund a test of the diabetes drug metformin in several thousand elderly people. That trial, known as “TAME” (for “Targeting Aging with Metformin”), has been touted as the first major test of any drug to postpone aging in humans, but the study has languished for years without anyone willing to pay for it.
No one knows if metformin will work either. One long-term study of diabetics, published this year, found the drug didn’t result in any protection against heart problems. But even if metformin doesn’t delay aging, the trial could carve a path for other geroscience drugs to enter human studies.
3 key takeaways from the article
- The Saudi royal family has started a not-for-profit organization called the Hevolution Foundation that plans to spend up to $1 billion a year of its oil wealth supporting basic research on the biology of aging and finding ways to extend the number of years people live in good health, a concept known as “health span.”
- Hevolution is looking at funding a $100 million X Prize for age reversal technology and has reached a preliminary agreement to fund a test of the diabetes drug metformin in several thousand elderly people.
- No one knows if metformin will work either. But even if metformin doesn’t delay aging, the trial could carve a path for other geroscience drugs to enter human studies.
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Topics: Science, Aging, Basic Research
Strategy & Business Model Section
Getting strategy wrong—and how to do it right instead
By Richard P. Rumelt | McKinsey Quarterly | May 3, 2022
Through many years of working with companies, government agencies, and the military, the author has too often seen strategies that are actually a toxic mix of wishful thinking combined with a jumble of incoherent policies. According to the author, many of the company’s leaders misunderstood the meaning and purpose of the strategy itself. Instead of facing and resolving challenges, leadership asked operating managers to create strategies for achieving certain arbitrary financial outcomes.
Real strategy work is hard. It is hard because serious strategy situations are much more complex than decision situations. They are what the author calls Gnarly, resisting easy resolution. Gnarly situations do not present easy-to-identify answers; they don’t even present readily identifiable choices. Rather, they present multiple issues where the underlying forces and logic at work are not immediately obvious. In a gnarly situation, clear choices must be searched for and designed or imagined. Many of the most apparent alternatives—invade or blockade, acquire BuyCo or not—have been posited with artificial clarity by shortsighted staff or parties with vested interests. There are almost always other ways to proceed.
To execute strategy well, one must consider the logic of challenges instead of wished-for end states. At a moment in time, a properly configured strategy is a mixture of policy and action designed to surmount a high-stakes challenge. It is not a financial goal, or a plan for hitting a financial goal, or a wished-for end state, or a long list of priorities. A dynamic strategy is designed to be a way forward that deals with particular obstacles and barriers to progress. It is not static but rather is renewed as new challenges and opportunities appear and as older challenges are surmounted. Strategy is continued, ongoing problem solving.
Given a set of gnarly challenges, three strategic skills can define the path forward. The first is judgment about which issues are truly important and which are secondary. The second is judgment about the difficulties of dealing with different issues. And the third is the ability to focus, to avoid spreading resources too thinly or trying to do everything at once. In combination, these three skills lead to what the author calls the crux—the most important part of a set of challenges, the part that is addressable, which has a good chance of being solved through focused, coherent action.
The most ancient and still crucial element of strategy is focus. In military terms, it is the concentration of force on an opponent’s weakness. More generally, it is the coordinated application of resources and effort to an important yet addressable challenge. Strategic focus means bringing sources of power to bear on a selected target. If the power is weak, nothing happens. If it is strong but scattered and diffused across targets, nothing good happens. If power is focused on the wrong target, nothing good happens. But when power is focused on the right target, breakthroughs occur.
3 key takeaways from the article
- Strategies in most of organizations have become a toxic mix of wishful thinking combined with a jumble of incoherent policies.
- To create a strategy, one needs to embrace the full complex and confusing force of the challenges and opportunities being faced. To create a strategy, one has to develop a sense for the crux of the problem—the place where a commitment to action will have the best chance of surmounting the most critical obstacles.
- To create a strategy, one needs to be persistent and avoid the temptation to grab the first glimmer of a pathway through the thicket of issues. To create a strategy, one must balance a host of issues with its bundle of accompanying ambitions—the purposes, values, and beliefs that stakeholders wish to support. To create a strategy, one must keep actions and policies coherent and aligned, instead of nullifying efforts by pursuing too many different initiatives or conflicting purposes.
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Topics: Strategy, Purpose, Strategic Planning
Mastering Innovation’s Toughest Trade-Offs
By Christopher B. Bingham and Rory M. McDonald | MIT Sloan Management Review | June 02, 2022
Innovation is frustratingly hit-or-miss. Failures are often attributed to a lack of money, talent, or luck. But the authors think the underlying cause is that innovation in dynamic environments — those characterized by novelty, resource constraints, and uncertainty — is rife with critical tensions. When left unaddressed or mishandled, these tensions sink teams and organizations. To address these questions, the author conducted hundreds of interviews at organizations in diverse industries on five continents and surfaced eight questions that every innovation leader must be able to answer correctly. Three of these are being shared in this extractive summary.
- Should you be flexible or disciplined when capturing growth opportunities? During the opportunity selection phase, it’s better to be disciplined — spending time studying prospects and devising a plan to capture the best ones rather than those that are easiest to attain. In this way, an organization can accumulate knowledge and experience, using early opportunities to build a foundation for more strategic ones later on. During the opportunity execution phase, more flexibility leads to greater success. This helps organizations abandon ineffective products and practices and adopt more appropriate ones.
- Is it better to differentiate your offering or borrow ideas from competitors? Leaaders can resolve this tension by engaging in parallel play, a practice inspired by preschool-age children. Parallel play unfolds in various stages of innovation differently. Early on, put aside differentiation. Borrow ideas instead. Next, test relentlessly — and then commit. Finally, pause, observe, and refine.
- Do you follow what data is telling you, or ignore it? The authors’ research suggests that you should lean on data when making incremental improvements to existing innovations for current customers but view it more skeptically when transforming products and services in the face of disruption or when introducing breakthrough offerings. Nevertheless, leaders can protect potentially disruptive and new-to-the-world innovations by adopting a discerning orientation toward data and a healthy skepticism about insights derived from data.
The other 5 questions are:
- When do you seek internal help or external help?
- How do you mature a business without making it sluggish and bureaucratic?
- How do you make new-to-world innovations comfortably familiar while still distinct?
- Do you spend money on promoting your brand, or solving someone’s problem?
- How do you keep supporters who have bought into one vision on board when you change course?
3 key takeaways from the article
- Innovation is frustratingly hit-or-miss.
- The underlying cause of innovation failure in dynamic environments — those characterized by novelty, resource constraints, and uncertainty — is rife with critical tensions.
- To address these tensions, eight questions must be answered correctly: Should you be flexible or disciplined when capturing growth opportunities? Is it better to differentiate your offering or borrow ideas from competitors? Do you follow what data is telling you, or ignore it? When do you seek internal help or external help? How do you mature a business without making it sluggish and bureaucratic? How do you make new-to-world innovations comfortably familiar while still distinct? Do you spend money on promoting your brand, or solving someone’s problem? How do you keep supporters who have bought into one vision on board when you change course?
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Topics: Innovation, Strategy, Business Model
Leading & Managing Section
How to Overcome Your Fear of the Unknown
By Nathan Furr and Susannah Harmon Furr | Harvard Business Review | From the Magazine July–August 2022
Humans are wired to fear the unknown. That’s why uncertainty can feel nerve-racking, exhausting, and even debilitating. However, that gut reaction leads people to miss a crucial fact: Uncertainty and possibility are two sides of the same coin. Consider the achievements you’re most proud of, the moments that transformed your life, the relationships that make your life worth living. They all happened after a period of uncertainty—one that probably felt stressful but that you nevertheless pushed through to accomplish something great. Our modern-day heroes all have a similar story. We all can become adept at managing uncertainty and empower ourselves to step confidently into the unknown and seize the opportunity it presents. Applying the following four principles will help you do that.
Reframe Your Situation. Most people are loss-averse. Multiple studies demonstrate that the way you frame things affects how you make decisions. Every innovation, every change, every transformation—personal or professional—comes with potential upsides and downsides. And though most of us instinctively focus on the latter, it’s possible to shift that mindset and decrease our fear.
Prime Yourself for New Risks. Although innovators often talk about eating uncertainty for breakfast, if you dig deeper, you discover some curious habits. Steve Jobs had a lifetime supply of black turtlenecks, for instance. All those habits provide balance. By reducing uncertainty in one part of your life, they prime you to tolerate more of it in other parts. You can also prime yourself for uncertainty by getting to know the kinds of risk you have a natural aversion to or an affinity with. Just as important, you can increase your risk tolerance by taking smaller risks, even in unrelated fields.
Do Something. Taking action is one of the most important parts of facing uncertainty, since you learn with each step you take. Research by Timothy Ott and Kathleen Eisenhardt demonstrates that most successful breakthroughs are produced by a series of small steps, not giant bet-the-farm efforts. Starting modestly can be more effective and less anxiety-provoking than trying to do everything at once.
Sustain Yourself. According to Ben Feringa, who won a Nobel Prize in chemistry, scientific discovery happens only after facing uncertainty. Feringa admits that failing hurts and that he allows himself to feel frustrated, even for a few days. But then he stops and asks, What insights can I take away from this? Another practice that the scientists, creators, and entrepreneurs the authors have studied use to sustain themselves is to focus on the people and things that have meaning for them.
3 key takeaways from the article
- Humans are wired to fear the unknown. That’s why uncertainty can feel nerve-racking, exhausting, and even debilitating. However, that gut reaction leads people to miss a crucial fact: uncertainty and possibility are two sides of the same coin.
- We all can become adept at managing uncertainty and empower ourselves to step confidently into the unknown and seize the opportunity it presents.
- Applying the following four principles can help you: reframe your situation to shift your mindset and decrease your fear; developing habits in some areas provide balance, by reducing uncertainty in one part of your life, will prime you to tolerate more of it in other parts; do something, taking action is one of the most important parts of facing uncertainty; and sustain yourself by focusing on the people and things that have meaning for them.
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Topics: Decision-making, Uncertainty, Risk
Five Ways To Thread Purpose Throughout Your Organization
By Ashu Goel | Forbes | Jun 14, 2022
There is currently a shift occurring in which enterprises are moving away from the traditional emphasis on the bottom line to one in which they try to make the world a better place. The potential benefits of purpose-driven companies are significant, but the process of integrating purpose into an organization is not taught in business schools. Consequently, many corporations are struggling to make this transition. To be successful, they need to expect resistance, turn words into action and create new performance metrics. How to smooth out the transition. Five considerations.
- Expect resistance. Getting institutions to shift direction is challenging. Companies need to hold open forums in which employees can express their trepidations without fear of repercussions. Management needs to not only acknowledge employees’ feelings but also admit that they themselves are not sure how the process will unfold. Only then will the company have a chance to transform itself so that its purpose permeates the collective conscience.
- Turn words into action. Consider crafting a purpose statement in which your business articulates its new purpose-driven goals. Have employees compare the statement against their day-to-day operations and business processes. Identify what needs to be done differently and how to do it. This process only gains traction when each employee, each team and each department understands what purpose means in their daily rituals.
- Ingrain purpose at the local level. Managers are the drivers of an organization’s purpose. They need to ensure that every employee is able to tap into the motivation behind their own individual relationship to the organization’s purpose. How? Management needs to work with individuals in each department because each job and functional area is different. The top of the organization needs to empower its groups so that purpose is implemented from the bottom up.
- Have employees put skin in the game. Purposeful leaders need to give employees the power to interpret, translate and create. Such an acknowledgment enables employees to take ownership of the process, which will manifest itself in many forms. All employees should be able to find a way to look at the company’s objective and make it work for them.
- Create purpose-aligned metrics. Companies have more data at their disposal than ever before. As they move from building a legacy to constructing a purpose-driven business model, they must find ways to use this information to determine how well the transition is taking shape. Some areas where you may see positive movement are job satisfaction, customer satisfaction and revenue.
3 key takeaways from the article
- There is currently a shift occurring in which enterprises are moving away from the traditional emphasis on the bottom line to one in which they try to make the world a better place.
- The potential benefits of purpose-driven companies are significant, but the process of integrating purpose into an organization is not taught in business schools. Consequently, many corporations are struggling to make this transition.
- How to smooth out the transition. Five considerations. Expect resistance. Turn words into action. Ingrain purpose at the local level. Have employees put skin in the game. And create purpose-aligned metrics.
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Topics: Organizational Behavior, Purpose, Organizational Performance
Enterpreneurship Section
9 Things You Learn Only After Failing
By Ben Sherry | Inc Magazine | June 10, 2022
Everybody fails. From Jeff Bezos and Elon Musk to the small-business owner at your corner store, enduring failure is simply a fact of life for all entrepreneurs. The thing that separates the best founders from their peers is the ability to learn from that failure. In a recently posted Reddit thread on the r/entrepreneur subreddit, dozens of users shared their perspectives on key lessons that can only be learned after failing. Here are some of the best takes about wisdom gained from failure:
- Don’t forget to focus on sales. You can create an essential product that revolutionizes your industry, but it won’t make a bit of difference if nobody knows about it. While focusing on the quality of your product is important, sales and marketing are essential to getting the word out about your business.
- Learn to spot signs of toxic personalities. When selecting a business partner and hiring employees, make sure you don’t get suckered in by, “narcissists, sociopaths, and psychopaths.” Toxic personalities can have a catastrophic impact on your business if not dealt with quickly. To spot the signs, look out for a lack of empathy for others and the use of intelligence or charm to manipulate peers.
- Go with your gut. Don’t be afraid to strike out on your own path if you have an idea you believe in. The “this is the way it’s always been done” mentality can lead to creative stagnation. Just because something has only ever been done one way doesn’t mean it’s the best way. Experiment with new ideas and business models, as you never know when you may hit upon something brilliant.
- Take feedback seriously. It can be demoralizing to receive negative feedback on a product or service you’ve poured your passion into, but don’t ignore it. While going with your gut is important, leading with solid evidence rather than emotion is just as key.
- Solve the problem, and then create the product. Make sure that you’ve truly found a way to solve the problem you’re addressing before you begin creating the product and looking for funding.
- Understand your service providers. Make sure you fully understand the terms and conditions of every service provider you work with before signing a contract.
- Learn how to say no. Stick to the areas where you know you’re strong, and focus on them.
- Prioritize co-founder relationships. As one redditor puts it, “co-founders need more effort, care, and caution than marriage.” Presenting a united front to your employees, investors, and clients will do wonders for your reputation.
- Learn to delegate.
2 key takeaways from the article
- Everybody fails. The thing that separates the best founders from their peers is the ability to learn from that failure.
- Some of the best takes about wisdom gained from failure are: don’t forget to focus on sales, learn to spot signs of toxic personalities, go with your gut, take feedback seriously, solve the problem and then create the product, understand your service providers, stick to the areas where you know you’re strong, prioritize co-founder relationships, and learn to delegate.
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Topics: Entrepreneurship, Failure
Seek Progress, Not Perfection: Why Your Business Should Embrace the “Toothpick Rule”
By Neil Hoyne | Entrepreneurship Magazine | June 14, 2022
To control lobbying, USA’s legislation moved extended dinners to hors d’oeuvres – a small bit of food served that could be served with a toothpick was not a perfect solution. But it’s a step forward. It’s progress.
According to the author, he likes the toothpick story because it makes a powerful point. Too many companies get stuck on their couch whenever they’re trying to develop a new program, a new strategy, a new interpretation of data. They want everything to be perfect. They get lost in all the reasons they think it won’t work or is incomplete. They don’t move forward until the data sparkles until it’s collected with no bias, until the models are proven and validated in every possible condition. So they do nothing at all.
This is where start-ups can stand out. When they know they don’t have all the data, all the answers. But, recognize they aren’t supposed to. They’re scrappy, they’re often underfunded, they’re working out of someone’s garage. And they’re okay with it. They just need to keep moving until they prove the viability of their business. They’ll take the 90 percent solution — and so will the best businesses in the world. It sets them apart from their competitors, the billion-dollar conglomerates that believe with their resources, size, and people, they’re entitled to perfect data. Their standards are higher, but in fact it’s generally harder for them to extract good data through the webs of bureaucracy.
How to Think Small. Deep breath! Lower your expectations. Seek progress, not perfection. Trust that small, iterative changes will lead you forward.
Sometimes entrepreneurs try to find perfect solutions to their problems, which actually impedes their progress. If they’d been trying to bring the lobbyists’ steakhouse strategy under control, they wouldn’t have rolled out a new piece of legislation until they were sure they had closed every loop- hole. This mindset underestimates the impact of small changes. An imperfect step is less attractive, less sexy. But the truth is that big fixes are few and far between. It’s more productive to focus on what you can do each day to make your business practices slightly better. These modest improvements add up — but they’re the sort of improvements that many entrepreneurs might mistakenly ignore in favor of chasing the big solution, which will never come.
3 key takeaways from the article
- To control lobbying, USA’s legislation moved extended dinners to hors d’oeuvres – a small bit of food that could be served with a toothpick was not a perfect solution. But it’s a step forward. It’s progress.
- Too many companies get stuck on their couch whenever they’re trying to develop a new program, a new strategy, a new interpretation of data. They want everything to be perfect. And at they end they missed their targets. This is where start-ups can stand out. When they know they don’t have all the data, all the answers. But, recognize they aren’t supposed to. And they’re okay with it. They just need to keep moving until they prove the viability of their business.
- Big fixes are few and far between. It’s more productive to focus on what you can do each day to make your business practices slightly better.
(Copyright)
Topics: Entrepreneurship, Startups, Decision-making
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