CEO Daily: The Best in Business Reading


Good morning.

Have you ever read an article that feels like an elixir for your brain? Well, a few sentences into “The Four Letter Code To Selling Just About Anything,” I started to sense electricity crackling through my synapses. The feature, by Nicholas Thompson in the Atlantic. begins by examining the work of Raymond Loewy, a titan of industrial design decades ago—he helped conceive the look of everything from the Exxon logo to Greyhound buses to Air Force One—who makes Apple’s Jonny Ive look like an underachiever. The article focuses on Loewy’s conception of the sweet spot for new products: “to sell something surprising, make it familiar; and to sell something familiar, make it surprising.” The article goes on to explore the yin and yang of humans’ desire for the new—and their equally powerful need for the old and familiar. It explains everything from moviegoers’ cravings for Hollywood sequels to parents’ choices in baby names. The science is fascinating:

In 2014, a team of researchers from Harvard University and Northeastern University wanted to know exactly what sorts of proposals were most likely to win funding from prestigious institutions such as the National Institutes of Health—safely familiar proposals, or extremely novel ones? They prepared about 150 research proposals and gave each one a novelty score. Then they recruited 142 world-class scientists to evaluate the projects.

The most-novel proposals got the worst ratings. Exceedingly familiar proposals fared a bit better, but they still received low scores. “Everyone dislikes novelty,” Karim Lakhani, a co-author, explained to me, and “experts tend to be overcritical of proposals in their own domain.” The highest evaluation scores went to submissions that were deemed slightly new. There is an “optimal newness” for ideas, Lakhani said—advanced yet acceptable.




Inside The Minds of White-Collar Offenders

The Atlantic also published a second fascinating piece this week, one in a rare category: It doesn’t quite attain what I’d call long form and…I wish it had been longer. “The Psychology of White-Collar Criminals” is written by Harvard Business School professor Eugene Soltes, who interviewed 50 corporate felons, many of them still behind bars. No surprise, he finds plenty of denial and stunning levels of delusion, including that of former WorldCom controller David Myers, who told Soltes he thought he was “‘helping people and doing the right thing’ while perpetrating one of the largest accounting frauds in history.” Soltes embarked on his mission assuming that executive misbehavior was a much more thoughtful, considered process than, say, violent crime. He discovered otherwise, with more than one of his interviewees proclaiming themselves mystified as to their own actions.

The biggest difference between the white-collar miscreants and garden-variety criminals, perhaps, may be that the former seemed unable to grasp that their conduct could harm others:

Indeed, the former executives I came to know were unable to relate to those they had harmed. “It was, in my mind, a very small thing dealing with small dollars,” London, of KPMG, explained as he described the impact of his insider trading on his amorphous victims. Others, like Andrew Fastow, the former CFO of Enron, were being honored by the likes of CFO magazine at the same time that they were engaging in fraud, perversely suggesting that their actions might be viewed positively by others. “People thought this stuff was frickin’ brilliant,” Fastow recalled of his excitement.

What To Do When The FBI Says You're Being Hacked?

For incisive reporting on a difficult, highly sensitive topic, it’s hard to beat “The Perfect Weapon: How Russian Cyberpower Invaded the U.S.” by Eric Lipton, David Sanger, and Scott Shane in the New York Times. It’s technically a political and diplomatic story rather than a business piece, given that it examines the horrifying level of bumbling that allowed Russian hackers to root around inside the servers of the Democratic National Committee for months with disastrous consequences. But it’s a devastating must-read for any company or organization that uses computers—i.e., all of them—and so filled with telling detail that it’s hard to isolate just a few examples. I will, however, depart from my usual policy and offer some free advice here: I’m no cyber expert, but if an FBI agent repeatedly calls you, warning that there are signs of a major breach in your systems, don’t wait weeks to follow up on the off chance that they might be prank calls—as a DNC technology contractor did—and then wait additional months to do something about it. I'll confess I ended up feeling a bit sorry for the relatively junior bumblers who are unmasked in this piece—but even angrier about how easy they made it for the Russian hackers.

The Long And Short of AI

“The Great AI Awakening” in the New York Times magazine seems like a worthy exploration of Google’s artificial intelligence initiatives—particularly viewed through the prism of its language-translation product. Of course, the phrase "seems worthy" is a tip-off: A story I felt I should want to read...but couldn't come close to completing (oh, the shame of it). I found my mind wandering about a third of the way through. I decided to check how much was left to go. Egad! The whole thing runs to 15,000 words. For my money—and feel free to take the plug with a grain of salt—Fortune’s examination, in October, of Silicon Valley companies and AI is much more cogent and to the point. At a relatively svelte 4,900 words, The Deep Learning Revolution, by Roger Parloff, justifies the word "revolution" and takes you deep inside technological transformation at Google, Microsoft, Facebook and more.

Extra: The Fake News Beat

As an extra, consider BuzzFeed's investigation of fake news, "The Unbelievable Story Behind The Strangest Fake News Empire On The Web," which reveals that a single individual—a charter plane pilot—may be behind "at least 43" fake news sites (including ones that falsely reported that the Pope had endorsed Donald Trump...and others that falsely reported the Pope had endorsed Hillary Clinton). Ultimately, the reporters aren't yet able to conclusively identify the individual—which is why I'm hedging the recommendation—but the hunt itself is fascinating.

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