Power Sheet - May 6, 2016

By Geoff Colvin and Ryan Derousseau
May 6, 2016

Most business leaders would not normally concern themselves with a news report about surgery on porcine innards. But this morning they all should do so because it takes us quickly to a question they’ll all have to confront: Which employees must be replaced by technology, and which employees must not be?

The report tells how a robot stitched together a pig’s small intestine autonomously – entirely on its own. Surgical robots have been around a long time, but they aren’t robots at all; they’re power tools operated by human surgeons. This, however, is the real deal. The robot did the job by itself on a pig intestine that had been cut through; it did this on tissue in the lab and on tissue in an anesthetized pig. Don’t worry about the pig: The robot performed the task better than human surgeons who were assigned to do the same thing.

The significance of this, beyond its meaning in the medical world, is that surgery strikes most of us as just about the last job we could imagine a robot doing. But robots are clearly on their way to doing it. “Now driverless cars are coming into our lives,” one of the researchers, Dr. Peter Kim, told reporters on a conference call. “It started with self-parking, then a technology that tells you not to go into the wrong lane. Soon you have a car that can drive by itself.” It’s obvious where he thinks the surgical technology is headed.

Dr. Kim’s analogy is apt. Also yesterday, General Motors and Lyft announced that within a year they will start testing a fleet of self-driving Chevrolet Bolts on public roads – testing them with paying passengers inside. The Lyft app will offer passengers the option of choosing to be picked up by a self-driving car, and initially the cars will operate with a human driver behind the wheel, just in case.

No one is very surprised by such news any more, but remember that just two or three years ago, mainstream experts were saying with confidence that autonomous vehicles were a decade or more from real-world use. Now it’s just today’s news story about more self-driving cars on the road; there will be another one tomorrow.

The issue for business leaders is that they will have to make decisions much sooner than they expected about what these and related technologies mean for their companies. As technology performs ever more tasks better than humans, it will become competitively necessary to replace the humans doing some of those tasks; not doing so would incur an insupportable cost disadvantage. But in other jobs, replacing the humans could be a fatal error; when stock markets plunge, customers who were happy to conduct their brokerage transactions online may feel a deep and urgent need to speak to a real person, for example.

Which jobs are in which category? Even in an age of awesome technology, those are ultimately judgment calls. Leaders will be making lots of those calls with very little history on which to rely.

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What We're Reading Today

Sumner Redstone’s competency trial begins  

The trial over a suit brought by Redstone‘s former companion Manuela Herzer begins today in Los Angeles. Redstone lawyers are expected to countersue Herzer and another companion to reclaim millions paid to them over the years. Because of inadequate succession planning, Redstone’s family affairs could alter the course of his media holdings, most notably including Viacom and CBS. Fortune‘s investigation examines how Redstone’s empire has come to this.  Fortune

Paul Ryan: “I’m just not ready” to support Trump

Non-support for the presumed nominee from the House Speaker, the nation’s highest-ranking Republican, signals a party in disarray. Ryan said he hopes to endorse Donald Trump, but first he must see evidence that Trump supports the party’s conservative values. Trump’s tit-for-tat response was that he isn’t “ready to support Speaker Ryan’s agenda” either. CNN

Tim Cook to meet with China’s government

Apple’s CEO will travel to China this month to meet with government officials. Apple investors will be watching closely; the meetings come a few weeks after Beijing suspended iBooks and Apple Movies services as part of President Xi Jinping‘s crackdown on foreign technology and cultural influence. Cook‘s company finds itself in the crosshairs as it bets on expansion in its second largest market. Reuters

Toshiba nominates new CEO 

Satoshi Tsunakawa, a company veteran, will take over pending board approval as the carmaker tries to right itself after an accounting scandal last year. Toshiba is still trying to recover from revelations of misstated financial results over many years, leading to layoffs and the sale of non-core businesses. Masashi Muromachi, who stepped in as CEO to guide Toshiba through the crisis, will become a special adviser. WSJ


Building a Better Leader

The list of highest paying employers… 

…among great companies to work for hasn’t changed much. Google remains No. 1 with median pay for experienced employees at $140,000. Salesforce.com and Facebook are close behind. Business Insider

Business advice from someone who has spent $35 million reviving companies 

Marcus Lemonis, known for his spot on CNBC’s the Profit, says you must get used to failing if you want to become an entrepreneur. Fortune

Ask for a raise when…

…you need it, when your boss is in a good mood, or when your responsibilities increase. Just make sure you’re doing a good job. Fast Company


Worth Considering

GM and Lyft to test autonomous taxis within a year

Logan Green‘s Lyft will begin using Chevy Bolts to test autonomous cars in a yet-to-be-named city. Users will be able to opt into the program. Mary Barra‘s GM is rushing to test self-driving cars in the wild in an effort to stay ahead of tech firms, especially Google’s parent company, Alphabet.   WSJ

Square settles with co-founder

Jack Dorsey‘s company has agreed to pay Robert Morley $50 million over claims that he created the credit card reader that is synonymous with Square, according to a note in its earnings report. Morley argues that he invented the tool, which Dorsey and James McKelvey used to create Square.  Fortune

Sanofi threatens to oust Medivation’s board 

Pharmaceutical company Sanofi said it would raise its $9.3-billion offer for cancer drug maker Medivation. But if Medivation won’t even discuss the deal, then Sanofi CEO Olivier Brandicourt says he’ll take the issue directly to Medivation shareholders and try to oust its board. A potential bidding war is brewing for Dr. David Hung‘s Medivation, as Ian Read‘s Pfizer has approached the company about possibly bidding. Reuters


Up or Out

FireEye has named Kevin Mandia CEO, succeeding David DeWalt, who will become executive chairman.  WSJ


Fortune Reads and Videos

Merck CEO: We’re on the hunt for deals 

Ken Frazier said he isn’t just looking at cancer drug makers. Fortune

Uber and Lyft receive high marks…

…for how they handle privacy issues. The Electronic Frontier Foundation gave both companies a perfect score for their handling of government requests for user data. Fortune

M&A breakups have cost Wall St. $1.2 billion so far this year 

The number of busted deals hasn’t reached this level since 2007. Fortune

KFC develops nail polish that can be licked…

…and tastes like chicken. Why? Fortune


Happy Birthday

Former British Prime Minister Tony Blair turns 63 today.  Biography

New York City Mayor Bill de Blasio turns 55 on Sunday.  Biography

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Produced by Ryan Derousseau
@ryanderous
powersheet@newsletters.fortune.com

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