CEO Daily: Thursday, July 23
Our cover story for the August issue, Humans are Underrated, gets released online today, here. I encourage you to read it. It will change the way you think about business, technology and the future.
This piece is by my colleague Geoff Colvin, a 37-year-veteran of Fortune and one of the sharpest observers of business I know. His thesis is simple: We have spent most of the last two centuries trying to get humans to act more like machines. But as we perfect machinery, that strategy is making workers redundant. What we need in the future is for humans to act more like humans. Geoff then goes on to describe the three sets of skills that people will need to survive and thrive in a hyper-tech future. (Spoiler alert: coding is not one of them.)
In a post last week titled Technology is Not the Answer, I wrote about an unusual discussion with a small group of CEOs and other business leaders I had at our Brainstorm Tech conference in Aspen, where Geoff’s thesis was very much on display. The topic of the discussion was how technology is disrupting enterprises. But the discussion itself focused almost entirely on human, not technical issues. How do you decide which technologies to embrace and which to ignore? How do you get middle managers to abandon approaches that have worked for them for decades and adopt new ways? How do you build a culture in a company that is open and excited about change, and not resistant to it? How do you create organizations that learn from startups and are willing to disrupt themselves rather than protect what they know?
Those questions reflect the skill sets Geoff argues will define human work in this brave new world. We will remain in charge, and need to make smart decisions. We will need to work together to set collective goals. And we alone can satisfy the deep social needs of human organizations. For these jobs, robots need not apply.
More news below.
• Qualcomm trims 15% of workforce
Qualcomm, which has been facing pressure from an activist investor to cut costs, on Wednesday said it would do just that through a corporate restructuring that would include job cuts for 15% of its staff to help it cut $1.4 billion in costs. It also said it hired outside advisers to determine if Qualcomm should break up its business, a decision that should come by the end of the year. Fortune
• Bank of America CFO to exit
Bank of America is reshuffling its executive team, including replacing the company's chief financial officer. CFO and chief risk officer Bruce Thompson is being replaced by Paul Donofrio, who recently took over the CFO role at the company's consumer bank and wealth management units. The bank aimed to ease the blow of Thompson's departure by alluding it was a personal decision. USA Today
• Syngenta quibbles with Monsanto
Swiss pesticides maker Syngenta and unwanted suitor Monsanto sniped over an earnings report from the takeover target, with both sides claiming it strengthened their case in a $45 billion takeover battle. Though sales dropped 10% in the first six months of the year, Syngenta's results were stronger than expected, and the company said it was not "the one with the problem." Monsanto disagreed, claiming the results confirmed Syngenta doesn't have a plan to create the value it is proposing. Reuters
• Greece passes second reform bill
Greek lawmakers passed a second set of reforms in order to start talks over a new $94 billion bailout program, a vote that was a big relief for Prime Minister Alexis Tsipras and for now shores up his shaky political situation. Key provisions in the bill include a simplification of the civil code that would make it easier for banks to foreclose on delinquent loans, including home loans. Fortune
• Uber, NYC reach compromise
Uber and New York City's government have reached an agreement of sorts, with NYC promising to temporarily drop its plan to cap the number of Uber cars allowed to be added to the ride sharing system's fleet. Instead, the city will conduct a four-month study on the effects of services like Uber on city traffic and the environment.The move comes after Uber launched an aggressive effort to delay Mayor Bill de Blasio's proposal. Fortune
Around the Water Cooler
• Doctors bemoan high drug prices
More than 100 oncologists from top cancer hospitals around the U.S. have lamented the soaring prices of cancer drugs and called for new regulations to control them. In an editorial published in the Mayo Clinic’s medical journal, the doctors focus attention on the financial burden to patients, saying the out-of-pocket costs are bankrupting many just as they’re fighting a deadly illness. Drug sales have risen sharply, with sales of oncology, the largest category, projected to be among the fastest growing. WSJ (subscription required)
• When CEOs lack language skills
Bloomberg makes a case for global CEOs to have a firm sense what makes a local culture tick for the companies they run, and that includes mastering the regional language. It points to examples of the CEOs at Deutsche Bank and Credit Suisse, where two executives that weren't particularly great at speaking German have been ousted. Their failure at learning German didn't necessarily cost their jobs, but it drew criticism and made it tougher for the CEOs to connect with local shareholders, colleagues and customers. Bloomberg
• The latest minimum wage move
The push for higher wages in the United States is a slow slog – state by state, city by city and at times, sector by sector. Take the example of New York, where a wage board recommended a new $15 per hour minimum wage, but just for the state's fast food workers at restaurants with more than 30 locations. That recommendation would give fast food workers a separate minimum wage for the first time. It would also be a 70% increase from the current statewide rate. Fortune
• Home prices hit a record
The prices of existing homes in the U.S. hit a record high in June, topping a mark set in 2006, as sales increased at their strongest pace in more than eight years. The new high mark stands at $236,400, exceeding the previous high of $230,400 recorded in July 2006. The figure was aided by a stronger employment picture, a strong summer selling seasons and buyers anxious to get into the market before mortgage rates and prices increase further. WSJ (subscription required)
• The 12 biggest disruptive tech trends
Consulting firm McKinsey's in-house think tank has compiled a cheat sheet for the future of tech, and Fortune has recapped their list of the "disruptive dozen" – a group of technologies that have the greatest potential to remake the current business landscape. Some of those technologies include advanced robotics, autonomous vehicles, 3D printing and of course, the Internet of things. Fortune