Good Morning.
Andrew McAfee, digital innovation guru at the MIT Sloan School, has a new book out this week. He joined Fortune senior reporter Sheryl Estrada, me and 40 CFOs at a dinner in Boston last week, held in collaboration with Workday and Deloitte, which sponsors this newsletter. Before diving into a preview of his book, we talked about the unprecedented invasion of generative AI in the workplace:
“This is weirdly powerful, and it's weirdly fast. This stuff is going to diffuse throughout the economy. It's going to separate winners from losers. And it's going to truly turbocharge the winners faster than you and I have been expecting.”
I told him that many corporate executives I speak with are cautious about adopting the new technology because of concerns about data protection, misappropriated IP, and the confounding but continuing problem of “hallucinations.” Why not be a “fast follower” instead of an “early adopter”?
“That's a recipe for long-term decline…Every risk that you just articulated is real. But if you are behind on learning about them, then you're behind on the experience curve, you're behind on the learning curve, you're missing out on the productivity benefits. The risks are real, but they are manageable. And I've noticed that too many companies, when something new comes along, look for a reason to say ‘no.’ I think that's a bad strategy.”
McAfee’s new book is called The Geek Way, which he explained as follows:
“The Geek Way is a way to run a company that has sprung up over the course of the 20th century largely concentrated in Silicon Valley, because a bunch of geeks started running companies, then they found themselves in these super turbulent, uncertain, highly competitive, weird environments. And I think a lot of them realized that the industrial era playbook wasn't helping them run companies for this environment. So they did what geeks do, they dove in deep on a problem, they experimented, they iterated, and they came up with a set of practices that as I look across them are weirdly consistent. And they're better. And when you look at the head-to-head battles between the upstart companies and the incumbents of the industrial era, in how many of those battles has the incumbent won or even held steady?”
I challenged him on that last point. In my view, many incumbents have done far better against digital upstarts than anyone expected a decade ago. I cited Marriott, which managed to claw back control of its customers via the Bonvoy app.
“Your glorious success story is booking through an app?”
“How about Daimler,“ asked one of the CFOs.
“Have you looked at the market value of the incumbent automakers compared to [Tesla]?”
Walmart?
“Continuing to exist is a really low bar.”
JPMorgan Chase?
“It’s a regulated industry.”
At that point, I stopped. But I challenge other CEO Daily readers to send their best examples of an incumbent company that has triumphed over technology disrupters. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
