Indispensable Newsletter #8

Welcome back to another issue of The Indispensable Newsletter!

The summer days are dwindling, and this is the time each year that I begin turning my thoughts toward school.

This fall will be an exciting and new semester, as for the first time, I’ll be teaching a course at the Yale School of Management. The course is going to be a fun one—Power and Influence Within Organizations. Politics is a critical part of organizational life, but we often think of it as a dirty skill practiced by morally questionable people. Rarely has anyone used the term “good at office politics” as praise. But power and influence—the currency of politics—are what determine what organizations do. If you don’t understand—and use—those tools, they will be used against you by people with far fewer ethical compunctions.

Which is why the formal name of the course is “Power and Influence Within Organizations,” but I think of it as “Defense Against the Dark Arts.”

It’s an interesting feeling to be teaching somewhere other than Harvard—I promise to wear Crimson before the Harvard-Yale game!—but I’m looking forward to spending time with my New Haven neighbors.

I’ve got some great stuff for you in this issue, including a look at what AI means for leadership, some thoughts on LK-99 and science’s quest for the superconductor, as well as a few odds and ends about what I’ve been reading and watching.

Onward and upward!

Deep Dive: The Human Side of Enterprise in the Age of AI

Unless you’ve been living under a rock, you know that AI technology is poised to transform virtually every industry on planet Earth, with the dramatic growth of Large Language Models like ChatGPT leading the way.

That’s not just bombastic Silicon Valley posturing. A recent OpenAI/Wharton joint study found that bot technology will alter at least 80 percent of all jobs in the near future. A similar study from Goldman Sachs opined that AI will cause “significant disruption” to around 300 million full-time workers across big economies.

There’s also been a lot of speculation about the impact AI will have on the workforce—from a Cornell University white paper that suggests many finance and law positions will be made obsolete to the Writers Guild of America demanding AI regulations to protect their jobs.

But what will leadership look like in a world where we have access to AI assistance?

More than a year before OpenAI dropped the bomb of GPT3 on the world, I discussed this topic on the World Reimagined podcast with Shawn Bice, then-president of products and technology at Splunk, and Nick Beim, a partner at Venrock.

This is where the leadership question gets interesting. Leaders have many roles, but two of them are particularly important:

The first is making decisions. Most successful businesses are headed by really good decision-makers. Just look at Microsoft—I’ve never met Bill Gates, but I know 10-15 people who know him really well. Every single one of them describes him as the smartest person they’ve ever met.

Jeff Bezos is similar. No matter what you think about Amazon, the strategy Bezos implemented to take advantage of the marketplace was intellectually brilliant. This was perhaps best elucidated by a classic article by Ben Thompson, “The Amazon Tax.”

Some leaders, like Gates or Bezos, seem to have an extraordinary ability to take large amounts of information and process it in a way few others can. That can be an enormous asset for the organization they lead—and it’s why research on leader characteristics and organizational performance, as summarized in my book Picking Presidents, finds that intelligence is among the strongest predictors, perhaps even the strongest predictor, of leader success.

With the advent of AI-aided decision-making, the competitive advantage from superior analytical abilities is going to get whittled away. AI systems will have the ability to analyze data and run simulations in ways and with a speed that was never before possible, and the lightning fast-advances in technology that have become routine in the world of computers mean that those tools will likely be very widely distributed faster than we expect.

So if superior processing and decision making are going to become less important in determining when organizations succeed, leaders will have to lean on a very different set of skills: Their ability to get people to be engaged in their work and committed to their organization.

Let me tell you a quick story about what that looks like. My wife and I often shop at Roche Bros. a chain of supermarkets in the Boston Metro area. In most grocery stores, it’s really clear that workers are being paid minimum wage, and as a result, they do the minimum. At Roche Bros., though, that’s not the case.

I recently walked into my local Roche Bros. a few minutes before closing looking for a very specific spice I couldn’t find. I asked an employee if he could help, and he told me he didn’t know where it was and apologized that he couldn’t do more because he was leaving for the day.

Three minutes later, that same employee found me in the spice aisle. “I didn’t want to end my day that way,” he said, “so let’s find it together.”

To me, that sort of service is indicative of a leader who’s inspired this worker to believe he should do more than the minimum at his job. And it means that I’ll always choose Roche Bros. over a store whose people seem to hate their jobs.

Or what about music startup Pandora, who in 2005 found itself unable to pay employees—and the app hadn’t even launched yet. Founder Tim Westergren pulled the entire team together and gave them a speech right out of a Disney movie.

This wasn’t a speech based on logic or data. Westergren didn’t show his employees a bunch of projections or ingenious strategic roadmaps. It was based purely on emotion—the type of cultural glue that holds a company together when all seems lost.

The 50 Pandora employees in the room ended up staying on with the company and deferring their salaries for TWO YEARS. And their devotion to their leader paid off. Not only did Pandora become wildly successful once it launched—it sold in 2019 for $3.5 billion.

So what is AI going to do to leadership? The answer is counterintuitive, to put it mildly. AI is going to make the human side of leadership more important. Because it’s going to make the only lasting source of competitive advantage your ability to get your people who are actually doing the work to do it as well as they can.

The Holy Grail of Materials Science

Things are looking pretty grim for LK-99, the purported room-temperature superconductor that took the world by storm a few weeks ago.

Scientists across the globe have been trying in vain to replicate the Quantum Energy Research Centre in South Korea’s initial findings of a true superconductor material—which is the Holy Grail of materials science.

As made very clear by every scientist with a Twitter account, if LK-99 is the real deal, it would literally change every global industry from the ground up.

I’m not a solid state physicist, so I don’t have a particular opinion about whether LK-99 is real or fake, although at this point, I think the evidence is basically in.

But I can tell you that it’s very likely that the next time a revolutionary discovery happens, it will come out of a scenario just like this.

The origin of LK-99 is something out of a movie: a small team of scientists in an obscure company drawing on a forgotten theory abandoned after the fall of the Soviet Union. Two decades later, they claimed to have made the most important discovery since the transistor.

If it were real, this superconductor would have required substantial changes in our understanding of the physics of superconducting materials. The sort of revolutionary discovery that overturns existing theories rarely comes from institutional science, which favors the incremental progression of “normal science” over revolutionary discoveries.

Those revolutionary discoveries come from Unfiltered scientists, usually ones rejected by mainstream institutions, who stand defiantly against the scientific theories that explain why something is impossible.

To be clear, almost all of those oddballs are wrong. Every so often, though, one of them turns out to be right…and changes the world.

It’s why Judah Folkman was fired from his job at Children’s Hospital even though, years later, his ideas revolutionized our understanding of cancer. It’s also why the idea that ulcers are caused by a bacterial infection came from an obscure Australian doctor, not a major university or pharmaceutical company.

Filtration and institutionalization are wonderful for creating a predictable, stable future. That’s why I argue it’s safer to have a filtered leader than an unfiltered one. But when it comes to science, we NEED big swings. Over-channeling science leads to slower discovery—and thus slower progress.

There are big discoveries coming down the pipeline. Maybe it will be a room temperature superconductor, maybe it will be something else entirely (my bet is that the biggest ones for the foreseeable future will be in the life sciences).

But in order to get there, we need more, not less, “mad science.”

Mukunda's Media: What I'm Reading, Watching, and Listening to

Light Bringer by Pierce Brown

This book is like crack. The sixth book in the Red Rising series, it follows hero Darrow as he tries to defend Mars from a would-be conqueror. It’s not great literature, of course, but it doesn’t need to be. It’s incredibly quick, thrilling, and exciting. I’m sleeping two hours less every night because I want to finish it. Absolutely phenomenal.

Star Trek: Strange New Worlds

I’m always interested in a new Star Trek saga, and this is probably the series that has the highest consistent quality. Usually, Star Trek series are pretty atrocious for the first couple of seasons (see Picard, which didn’t really hit its stride until Season 3) but this one has hit the ground running. An interesting set of characters and ideas, as well as some great examples of thoughtful, empathetic leadership a la Ted Lasso.

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