Good morning,
Trust is seen as the “new currency for business.” So, does your company have it? And if not, can you earn it?
Harvard Business Review’s virtual conference on Monday convened CEOs and industry experts to explore the future of business and ideas in management. Trust and generative A.I. were themes that came up again and again.
“I think it is our job to earn trust with our consistent actions over a significant period of time,” Shou Zi Chew, CEO of TikTok, told Adi Ignatius, editor in chief of HBR. “And we should have the patience to do that.”
It’s no mystery why trust is top of mind at TikTok: Lawmakers are pushing to examine TikTok’s ties to China and its consumer data privacy and security practices. The app has been banned on U.S. government mobile devices. Chew will testify on March 23 before the House Energy and Commerce Committee regarding data security practices. “We’ve invested a huge amount of money, effort, and time to build and make sure that there’s substantial safeguards around whatever concerns people may have,” Chew said.
TikTok was the most downloaded app in 2021, and in the same year earned $4 billion in revenue, mostly from advertising, Bloomberg reported. An August 2022 report by Pew Research Center found 67% of teens in the U.S. use TikTok.
“The majority of our revenue today is still coming from advertising,” said Chew, the former CFO of ByteDance, the Chinese parent company of TikTok. He took on his current role in May 2021. The best-performing ads on TikTok are the “ones that are organic to the conversation that the users are having,” he said. A recent report by advertising analytics firm Pathmatics by Sensor Tower found that, among social media platforms, U.S. companies’ advertising spend on TikTok is up 62% from Q3 2022 to $2.1 billion in Q4 2022.
Regarding ChatGPT, and its application to TikTok, a possible avenue is “instead of having to film the video yourself, are there tools that can help you create a video or express itself in a much more automated way?” he said.
“I think a lot of companies are investing a lot of effort into this,” Chew, said. But with any new technology, you have to make the pros and the cons transparent, and make sure that you’re mitigating risk, he said.
In a separate conversation with Ignatius, former CEO of IBM Ginni Rometty shared her thoughts on ChatGPT. “I think the most important issue right now, and a lesson to be learned, certainly from my experience with Watson—is the world going to trust the technology?” said Rometty who spent nearly 40 years at IBM, and from 2012 to 2020 served as its CEO.
How can you build trust in new technology? “Watching the upside and downside, putting in guard rails so that people understand when to use it and when not based on how mature it is, and being explainable and transparent—knowing what trained it,” she said. Rometty is author of the new book, Good Power.
Trust should seemingly be a central theme for companies handling consumer data and when creating new tech that could potentially replace human creativity.
For more on how trust is shaping the future of business, and how business leaders can earn, retain, and strengthen stakeholder trust, subscribe to my colleague Eamon Barrett’s weekly newsletter, The Trust Factor. You can read his latest newsletter here.
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
Women in Leadership: Why Perception Outpaces the Pipeline—And What to Do About It, a new global study from the IBM Institute for Business Value and Chief, a networking group for women in executive roles, is based on data from 2,500 organizations in 12 countries and 10 industries. Less than half (45%) of organizations surveyed report they have made advancing more women into leadership roles a top, formal business priority. There was a small increase in the number of women at the C-suite and Board level (now 12% for both), and an increase to 40% representation of women in junior professional/specialist roles (37% in 2021).
A subset of outperforming organizations are called “First Movers.” Not only do First Movers have more women in leadership roles, but they also enjoy demonstrably better financial performance, according to the study. These companies share three key characteristics: making the advancement of women a top, formal business priority; view inclusivity as a driver of financial performance; believe that businesses need to continue making changes if they are to achieve gender parity. For example, 59% of companies considered First Movers offer childcare and leave benefits, compared to less than half (47%) of other companies offering that benefit.
Going deeper
"Data literacy for leaders," an article released by the MIT Sloan School of Management, explores why leaders need to understand data for effective decision-making and to drive data literacy throughout the organization. "Modern leadership skills include trusting in data to guide decisions and knowing when to question results," according to the report.
Leaderboard
Adam Greenberg was named CFO at Vivian Health, a national health care jobs marketplace. Over the past 12 years, Greenberg has held numerous finance and strategy leadership roles, including head of strategic finance and CFO, at both early-stage companies and household consumer brands, including Roofstock, a digital marketplace for real estate investors Ideal Image, a medical aesthetics chain. Before this, Greenberg was SVP of North American finance and supply chain at Weight Watchers, where he oversaw financial planning and analysis, accounting, and supply chain operations in the U.S.
John J. Juric was named CFO at Capstone Green Energy Corporation (Nasdaq: CGRN), a provider of carbon reduction and on-site green energy solutions, effective March 6. Juric has more than 25 years of experience in finance and business management. Before joining Capstone, he held senior finance positions at companies including USALCO LLC, Fiberweb PLC, CIBA Specialty Chemicals, and Arco Chemical Company.
Overheard
“There are people, by the way, who routinely complain that they come in and there are big swaths of empty desks and it feels like it’s a ghost town—it’s just not a nice experience.”
—Google CEO Sundar Pichai defended during a companywide meeting a plan to ask cloud employees and partners to share desks at the division’s five largest locations, CNBC reported. Google is referring to the downsizing effort as Cloud Office Evolution.
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