Here’s my takeaway from day two of Brainstorm Tech: Technology is not the answer.
That’s an odd conclusion from a tech conference. But it emerged from an intense discussion on transforming companies with an eclectic group that only could have been convened here: the CEOs of Sprint, Best Buy, Sears, Electronics Arts, Athena Health, Juniper Networks and Flextronics; the incoming CEO of HP’s printer and computer business; the president of CVS/pharmacy; the CEO of a drone startup; the CIO of General Electric; and venture investors for Comcast, Google, Qualcomm and Microsoft. All agreed technology is driving change at an unprecedented pace. And all concurred that companies need to disrupt themselves, or face disruption. “Every company represented at this table is a disruptor, and is being disrupted,” said Scott Coleman of Microsoft Ventures. “That’s a very different world to live in” from even a decade ago.
Yet most of our conversation focused not on changing technologies, but on changing cultures, and the people skills needed to change them. Big companies need leaders who will drive new technologies and business models; middle managers who are willing to embrace change; a culture of accepting and adopting ideas from startups; people who can spot and deploy technologies developed by startups; and service providers who can realize the value from rapidly evolving and proliferating technologies.
As investor Eddie Lampert, who has spent the last decade trying to revive Sears, put it: “Disrupting yourself … is very hard to do.” Technology won’t do it for you.
• China’s shares fall after GDP report
Typically, when a nation reports a better-than-expected economic report, investors respond favorably. Not in China. Second-quarter gross domestic product was better than expected but the Shanghai Composite – which has seen shares slump 36% from its peak in June – fell. What gives? Some may worry that more stimulus measures may not swoop in to save the day. And the GDP figures also raised skepticism, reviving long-standing concerns about the reliability of China. Fortune
• Is Salesforce for sale?
The potential sale of Salesforce.com to a competitor has been rumored for a while now, so Fortune asked three people who led mergers and acquisitions during a session at Brainstorm Tech if they were interested. Yahoo’s representative flat out said no. Microsoft and SAP, both mentioned as potential buyers, were a bit more vague, with SAP’s M&A specialist saying “it’s hard to make a deal work.” Fortune
• Back-to-school spending likely to fall
U.S. consumers are expected to spend about $68 billion on back-to-school and back-to-college items this year, down 9.3% from last year, according to a survey by industry group National Retail Federation. The muted season delivers another setback for the sector, which hasn’t yet truly benefited from lower unemployment rates and higher consumer confidence. Fortune
• Celgene inks $7.2 billion deal
Cancer-drug company Celgene has agreed to buy Receptos in a bid to move deeper into the multibillion-dollar market for autoimmune diseases. Celgene has been trying to diversify beyond its foothold in drugs treating multiple myeloma, where it has one mega blockbuster that makes up a bulk of sales. Drugs for autoimmune diseases like psoriasis offer one of the pharmaceutical industry’s biggest markets. WSJ (subscription required)
• SEC investigating fake Twitter news
The Securities and Exchange Commission is reportedly looking into possible market manipulation over a fake news article that claimed Twitter had received a takeover offer, a story that briefly sent shares up more than 8%. The report, which imitated the form of a Bloomberg News article, appeared on a fake site called bloomberg.market and looked eerily close to the media company’s actual website. Bloomberg
Around the Water Cooler
• Taxi bubble burst hits lenders too
There was a 33-year period of time when taxi medallions in New York City – licenses required to carry passengers – saw their values soar more than gold. But lenders that were once clamoring for access are quickly backing out of the business. Why? They are freaked out about the competitive pressure from ride-sharing app Uber. Bloomberg
• Autos unite to make cars more secure
An alliance of 12 automakers, including Ford and General Motors, are creating an information sharing and analysis center that will allow the manufacturers to swap cyber security data and keep each other informed about the latest hacking threats targeting vehicles. Automobiles today come loaded with software and sensors to help drivers navigate the roads, but all that data can also lead to a more insecure system. Fortune
• Social media: The newspaper of today
A new report from the Pew Research Center found that more than half of all Facebook and Twitter users get their news from those websites, a significant increase for both services since 2013. And it isn’t just millennials who are using those sites for their daily dose of news. Users across all genders, ages, races and demographics claimed an increase. That bigger audience explains why both tech giants are pushing features meant to deliver the news more smoothly. Wired