Good morning, and welcome to the Year of the Pig.
There’s a story in the new issue of The Atlantic with the provocative title: “Why Ford Hired a Furniture Maker as CEO.” It’s about Jim Hackett, who was CEO of Steelcase before joining Ford. But what it’s really about is “design thinking”—a discipline embraced by Hackett and pioneered by design firm IDEO. (You can re-read Adam Lashinsky’s 2017 Hackett profile here—it touches many of the same themes.)
If you aren’t familiar with design thinking, you should be. In today’s world of hyper technological change and colliding industries, design thinking has become a critical piece of the success puzzle. As a manager, you may hold a black belt in Six Sigma, and be the master of improving existing processes within your company. But the challenges of new technology force you to go further, and rethink your business from the ground up. If a previous generation of Ford engineers thought about making great cars, the new generation has to think about a whole range of ways of meeting their customers’ need for mobility.
I’ve written a lot in this space about how the vast majority of big-company CEOs believe AI will profoundly change their companies, but only a minority have made big investments in it. That’s a design thinking challenge. Most CEOs quickly grasp technology that improves processes and efficiency—that’s why their first AI investments have been in “chat bots” that replace people at call centers. But the big opportunity will come when they use AI technology to create new products and services that improve the lives of their customers.
As an executive, how do you learn to use design thinking? One way to start is by reading the new edition of Tim Brown’s book, Change by Design. Brown is the president and CEO of IDEO, and the book is coming out in March. Fortune will publish an exclusive excerpt later this month.
The other is to travel to Singapore next month for Fortune’s Brainstorm Design conference, March 5-7. Brown will be there, and so will other icons of the design thinking movement. That includes Tony Fadell, who helped invent such products as the iPod, the iPhone, and the Nest thermostat; Dyson CEO Jim Rowan; Facebook VP of Design Margaret Gould Stewart; and top design experts from IBM, Google, McKinsey, and Salesforce, among others. Brainstorm Design has rapidly catapulted to the top of my list of favorite Fortune events because it stretches the mind in unexpected ways. You can see the full agenda and request an invitation here. Or just shoot me a note. CEO Daily readers get special consideration.
More news below. I’ll be listening to President Trump’s State of the Union address tonight for signs of a pro-business agenda, and report back tomorrow.
According to multiple reports, President Trump will nominate Treasury Department official David Malpass to be the next head of the World Bank. That may not go down so well with the rest of the world, as Malpass is a critic of the institution who thinks it needs to be reined in. The U.S. traditionally gets to select the World Bank chief, but that’s not a rule that’s written down. Malpass is currently working on negotiations in the U.S.-China trade spat. Washington Post
Google parent Alphabet beat analyst expectations with its Q4 results yesterday. However, Wall Street is alarmed about its $25 billion investment spree during 2018, as well as falling advertising prices and margins, and the company’s stock fell 3% in extended trading. CNBC
Tesla and Maxwell
Tesla will shell out $218 million to buy Maxwell Technologies. Maxwell is developing ultracapacitors that may prove safer and more reliable than today’s batteries. Tesla’s paying a premium of 55% over Friday’s share price. Fortune
Now that the U.S. and Russia are walking away from the Intermediate-range Nuclear Forces Treaty, Russia must develop new land-based hypersonic and cruise missiles within the next couple years, the country’s defense minister reportedly said. Hypersonic missiles are the big new thing in killing people at speed—they’re way too fast to be intercepted by current defense systems. Reuters
Around the Water Cooler
The winner of the U.S.-China trade war could be Europe, according to a study from the U.N. Conference on Trade and Development. UNCTAD reckons European companies will get around $70 billion in trade that would have passed between the U.S. and China. “The effect of U.S.-China tariffs would be mainly distortionary,” said the agency’s Pamela Coke-Hamilton. “U.S.-China bilateral trade will decline and be replaced by trade originating in other countries.” South China Morning Post
Vivendi is mulling a partial sale of Universal, with the value of the latter being pegged as high as $25 billion. As Bloomberg notes, this shows how streaming services are keeping the music industry’s heads above water, despite a general feeling a decade ago that the Internet would be the death of the industry. Bloomberg
Slack has filed for an IPO with the SEC. Like Spotify before it, it seems the business messaging platform wants to go public without raising new capital, which allows employees and longtime shareholders to sell stock at the start. CNN
The Financial Times has an interesting piece on how Huawei’s woes are playing out in the world of telecommunications network operators. The fear is that a wide rejection of Huawei’s equipment would delay the rollout of 5G by years, and make it more expensive. Keep an eye on the Mobile World Congress in Barcelona at the end of this month to see how the GSMA trade body decides to react. Financial Times