We apologize for the delay in sending out this morning’s CEO Daily. Fortune experienced issues with our publishing system which have now been resolved.
Talk to any CEO these days, and you will hear about the need for speed. Change is accelerating. The future belongs to the fast. Disrupt yourself or be disrupted. If you snooze, you lose.
But here’s the hard truth: business decision-making at most organizations is slowing down.
In the February issue of FORTUNE, Tom Monahan of CEB presents evidence he has collected from hundreds of examples, and it is shocking. Hiring a new employee, for instance, takes 63 days now on average, up from 42 in 2010. The average time to deliver an IT project from start to finish is 10 months now, up from 9 months in 2010. The average time involved in a B2B sale is up 22% over the same time period.
It’s not hard to imagine why this is happening. Technological change is cutting across the silos of traditional businesses, making decisions ever more difficult. Where one or two people used to sign off on a key decision, it may now require three or four or five. The matrixed organization has become the standard among big companies, but most haven’t figured out how to make the matrix work without gumming up the works.
To put it simply: technological change is happening faster than ever before, but the disruptive implications of that change are slowing business down. This highlights, once again, that the fundamental challenge of the new industrial revolution is not a technological one, but a human one. We have the technology to dramatically improve the way we do business; but most businesses don’t yet have organizational structures that can operate anywhere close to the speed of change.
You can read Monahan’s full piece here. More news below. Get moving.
• Theranos poses “jeopardy to patient safety”
The laboratory practices of Theranos, the embattled blood-testing startup led by entrepreneur Elizabeth Holmes, poses an “immediate jeopardy to patient safety” the U.S. Department of Health and Human Services has asserted in a letter. The lab, surveyed in November by the Centers of Medicare and Medicaid Services, was found to be deficient for hematology (the study of blood), analytic systems, and other practices. The startup, valued at $9 billion, has weathered criticism after it was discovered that many of the blood tests it provided were using conventional testing technology. Fortune
• Big quarter gives Facebook shares a boost
The social-network giant reported new advertising formats and an improved mobile app propelled a better-than-expected 52% jump in revenue for the final quarter of 2015. Shares were up in after-hours trading on Wednesday as Facebook said mobile ads accounted for 80% of total ad revenue in the quarter, accelerating from the prior quarter and a year ago. It has also benefited from a surge in views that have also attracted advertising dollars. Reuters
• Samsung issues a warning
South Korean tech giant Samsung Electronics warned of possible weaker earnings this year due to softer sales of devices, a trend that is also hurting Apple. The warning came a day after Apple shares fell more than 6.5%, the biggest percentage decline in two years, as the iPhone maker forecast its first quarterly sales drop in 13 years. Slowing growth in China and weak emerging market currencies are undercutting sales of electronics, a problem that has also stung chipmakers. Reuters
• Fed leaves interest rates unchanged
The U.S. central bank decided to leave interest rates where they were, after raising them for the first time in nine years in December. In its post-meeting statement, the Federal Open Market Committee made no mention at all of the poor stock market performance that kicked off 2016, while making only a brief reference to a sharp slowdown in China that is worrying investors. Fortune
• U.S. imposes penalties on Swiss banks
The U.S. Department of Justice announced that a crackdown on Swiss banks suspected of helping American clients evade taxes by hiding income offshore resulted in more than $1.3 billion in penalties on 80 banks that reached settlements with the government. The crackdown, which started more than seven years ago, made headlines in 2009 when UBS agreed to pay a steep penalty and turn over account information. Overall, the settlements involved more than 34,000 accounts that held as much as $48 billion. USA Today
Around the Water Cooler
• What to make of the Trump vs. Fox News battle
There’s a debate brewing this week about a Fox News-hosted Republican debate set to air this evening: GOP frontrunner Donald Trump is saying he will not attend because of the way he has been treated by the network. The spat is unusual in that Fox is typically seen as a friendly destination for the GOP. Trump is upset that Fox is allowing Megyn Kelly –who asked him a pointed question about his interactions with women at a debate last year – to again moderate. What you have, Fortune believes, is a battle between one massive media entity going up against another. And both are used to winning. Fortune
• Google vs. California regulators
California’s Department of Motor Vehicles is finalizing regulations for the everyday use of autonomous cars with the goal of releasing them next year. What’s planned? The regulations will require a licensed driver – and a steering wheel – are in each car just in case something goes wrong. Google, which has been testing a fleet of self-driving cars, is saying the rules would limit the technology’s potential. The reason California is so closely watched in this case is because it often adopts policies that are later embraced by other states, including clean-air standards. Bloomberg