CEO Daily: The Best in Business Reading

Jun 25, 2017

Good Morning.

My vote for best opening lines in an article this week goes to the Atlantic: “If power were a prescription drug, it would come with a long list of known side effects. It can intoxicate. It can corrupt. It can even make Henry Kissinger believe that he’s sexually magnetic. But can it cause brain damage?” What can I say? The writer had me at Kissinger.

The second paragraph is pretty great, too. It muses on the public obtuseness of former Wells Fargo CEO John Stumpf (whose last name, through the backward lens of history, has come to have an onomatopeic perfection). Come to think of it, the third paragraph is pretty amusing. Let’s be clear, though: “Power Causes Brain Damage” isn’t merely clever. It’s got a deadly serious point:

The historian Henry Adams was being metaphorical, not medical, when he described power as “a sort of tumor that ends by killing the victim’s sympathies.” But that’s not far from where Dacher Keltner, a psychology professor at UC Berkeley, ended up after years of lab and field experiments. Subjects under the influence of power, he found in studies spanning two decades, acted as if they had suffered a traumatic brain injury—becoming more impulsive, less risk-aware, and, crucially, less adept at seeing things from other people’s point of view.

The article goes on to argue that powerful people can lose the ability to see themselves as others do, among other negative effects. On the plus side, the syndrome does allow, say, a CEO to devote more mental resources to decision-making—rather than pleasing the boss. The article offers a few techniques for managing hubris (if such a trait can be said to be “managed”) as well as management lessons ranging from the aforementioned Stumpf and Indra Nooyi of PepsiCo, to Winston Churchill and Franklin Roosevelt. Power is frequently written about in black and white terms—often hinging on whether the writer agrees with the goals or effects of the powerful person—and it's a pleasure to read a well-considered, nuanced assessment of the quality with a fresh perspective.

If You're Obsessed With Apple...

...you'll want to read “Leaked Recording: Inside Apple’s Global War on Leakers,” which is exactly what it sounds like. The article is largely based on an audio recording of an internal company security briefing that was leaked to a publication called The Outline. We already knew Apple was secretive; the value of this article is its details, which certainly do leave the impression that the maker of the iPhone resembles the National Security Agency. Indeed, this piece centers on the “New Product Security” (NPS) group. A former NSA analyst turned Apple security official named David Rice describes the NPS as “really a secrecy group, we’re a little bit misnamed.”

Here are some of the tidbits that particularly caught my eye:

… Apple has cracked down on leaks from its factories so successfully that more breaches are now happening on Apple’s campuses in California than its factories abroad. “Last year was the first year that Apple [campuses] leaked more than the supply chain,” Rice tells the room. “More stuff came out of Apple [campuses] last year than all of our supply chain combined.”

In the past, Apple has seen disgruntled employees leak after a bad performance review, he says. “But that's oftentime not what happens. We oftentimes get people who are really excited about our products and they end up finding something to share and they will go out and say, ‘Hey, guess what we did,’” he says. “Or somebody will ask them a question and instead of just saying, ‘I can't talk about it,’ they will say too much.”

Rice says that Apple’s focus on secrecy has not translated to a culture of fear. “I think what is unique at Apple is that we don’t have a Big Brother culture,” Rice says. “There’s nobody on my team reading emails, sitting behind you on the bus, we don’t do that.”

But the presentation makes working for Apple sound like working for the CIA. (At one point, Rice even refers to “blowing cover.”) There are repeated references to employees drawing boundaries in their personal lives, for example. “I go through a lot of trouble not to talk about what I work on with my wife, with my teenage kids… with my friends, my family,” an employee in one of the videos says. “I’m not telling you that you give up all relationships,” Rice says, “but that you have a built-in relationship monitor that you’re constantly using.”

NB: I didn’t see any sign in the article that the Outline contacted Apple for comment, so at minimum, we'll have to take the publication’s word for it that the recording was authentic.

In Brief

Yet again, here's a case where my colleague beat me to the punch in this newsletter, and so I'll be brief: Fortune's story on Google's anti-hacker SWAT team is well worth-reading, especially for its spell-binding opening scene.

ProPublica's story on how Horizon Pharma took generic versions of two medications, Aleve and Nexium—combined cost for a monthly supply: $40—and turned them into one pill that costs $3,252 per month is hardly the first example of a pharma outrage, but it's deeply reported and profoundly dismaying.

The Atlantic has a fascinating business-history essay tracking the use of the word "monopoly" and what that reveals about the business climate.

"Globalization In The Age Of Trump," in the Harvard Business Review, argues that despite bad press and political obloquy, globalization is far from in retreat.

Nicholas Varchaver
@nickvarchaver
nicholas_varchaver@fortune.com

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