Khwaja's Take: Elon Musk, Twitter, Bill George's HBR piece, IBM's Quantum, FTX Crash, Ethical/Safety AI

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1. Why Elon Musk's Product-First Approach is Doomed to Fail For Twitter

Tesla and SpaceX CEO Elon Musk has made it clear that he prioritizes product above all else. In a recent interview, Musk said that he spends "80 to 90 percent" of his time on product development and engineering. This laser-like focus on product has served Musk well in the past, but as he looks to the Twitter 's future, he would be wise to shift his priorities and focus more on understanding the current environment of Twitter. Here's why.

Twitter is a platform that is constantly evolving. What works today might not work tomorrow, and vice versa. To be successful on Twitter, you need to be nimble and adaptable. You need to understand the ever-changing landscape and be able to adjust your strategy accordingly. This is something that Musk has been struggling since he aquired Twitter.

Furthermore, Twitter is a platform that is all about engagement. If you're not regularly engaging with "all" your stakeholders including regulators, you're not going to be successful. Yet Musk seems content to let his tweets speak for themselves. He doesn't seem interested in engaging all stakeholders, including employees, and customers, in conversations or building connectedness with his employees. This is a mistake.

Finally, it's important to remember that Twitter is a public platform. Anything and everything you tweet has the potential to be seen by millions of people. This means that you need to be thoughtful and considerate about the things you tweet. Unfortunately, Musk has shown time and again that he is not particularly thoughtful or considerate when it comes to his tweets. Musk has time and again demonstrated that he doesn't really understand the importance of employee engagement or how to meet "all" stakeholder needs.

Conclusion: 

If Elon Musk wants to be successful on Twitter , he needs to start putting people first. He needs to focus less on product and more on understanding the current environment of Twitter. He needs to be nimble and adaptable and build relationships with all stakeholders anchored by noble purpose. Only then will he be able to capitalize on this platform's power.

2. Connectedness is in Crisis

I always believed in taking people with you to do great things. I have led several business transformations, mergers & acquisitions successfully. It is only because of putting people front and center. Unfortunately, connectedness is in crisis. 

I counsel boards and CEOs to get employees aligned. Ensure employees understand the value they bring to the firm. Lately, Firms are laying off people, causing disengagement.

Bill George notes on a Harvard Business Review piece that frontline workers are still not being treated as essential by corporate leadership. I wholeheartedly agree with him. Bill provides two takeaways. First, firms should flip their org charts, putting frontline workers at top. Bill reiterates that executives exist to serve and coach their employees, not to control them. Second, CEOs need to commit to spending more time on the front lines.

The Importance of Connectedness

In order for a company to be successful, its employees must feel valued and connected to the organization's mission. When employees feel disconnected from their work, it leads to disengagement and ultimately talent loss. The current state of affairs has caused many companies to lose sight of this fact. With so much focus on cost-cutting and shareholder value, employee engagement has taken a backseat. This needs to change.

Flipping the Org Chart

One way to increase employee engagement is by flipping the org chart. That is, putting frontline workers at the top instead of executives. This may seem like a radical idea, but it's one that makes a lot of sense when you think about it. After all, executives exist to serve and coach their employees, not to control them. By flipping the org chart, companies can send a clear message that their employees are their most valuable asset.

Another way to increase employee engagement is by ensuring that CEOs spend more time on the front lines. Too often, CEOs are isolated from the day-to-day realities of their employees' lives. They're so focused on strategy and shareholders that they forget about the people who make up the heart and soul of their organizations—the frontline workers. If CEOs want to create a culture of connectedness, they need to commit to spending more time on the front lines interacting with employees on a regular basis.

Conclusion

The current state of affairs has caused many companies to lose sight of the importance of employee engagement. With so much focus on cost-cutting and shareholder value, employee engagement has taken a backseat. This needs to change if we want to avoid a talent crisis in Corporate America. Flipping the org chart and ensuring that CEOs spend more time on the front lines are two ways that companies can begin to address this issue head-on.

3. The Cashless Revolution: A few questions I often encounter with the C-suite and #fintech boards

In a world that is increasingly digitized, it is no surprise that the payments industry is also undergoing a digital transformation. With the rise of mobile payments, contactless payments, and now digital currency, we are moving closer and closer to a cashless society. While there are many benefits to this shift, there are also some risks that need to be considered. In this blog post, I will address a few questions that I often encounter with the C-suite and #fintech boards regarding the cashless revolution.

What are the risks associated with digital currency?

One of the risks associated with digital currency is state surveillance. When payments are made in digital currency, the chances of state surveillance increase. This is because transactions can be tracked and monitored more easily than cash transactions. Chinese fintech is a case study of this risk. In China, the government has used fintech to track and monitor citizen's financial activity. This has led to increased regulation of the fintech industry in China.

Another risk associated with digital currency is regulatory risk. Regulators will struggle to contain risk in a cashless society. This is because they will have less visibility into transactions and less control over them. Firms will also struggle to meet the changing needs of consumers in a cashless society. This is because they will need to invest in new technologies and processes to accommodate digital payments.

Finally, digital currency poses a risk to financial inclusion. This is because it could lead to exclusionary practices by financial institutions. For example, if banks only accept digital currency, then those without access to banking services will be excluded from the financial system. This could lead to increased inequality and social unrest.

Conclusion: 

The cashless revolution is underway and it comes with both risks and benefits. In this blog post, I have addressed a few of the risks associated with digital currency. These include state surveillance, regulatory risk, and financial inclusion. While there are risks associated with the cashless revolution, there are also many benefits that should not be ignored. These benefits include convenience, efficiency, and security. Ultimately, it is up to each individual to weigh the risks and benefits of the cashless revolution and decide whether or not it is right for them. You can learn more here -The Cashless Revolution’ Review: They’ve Got Your Number

4. How IBM is redefining TSR -Total Shareholder Return

Arvind Krishna , IBM CEO, was recently interviewed by CNBC . In the interview, he discussed how technology is a deflationary answer to today’s macro struggles. I couldn’t agree more. Arvind Krishna excels at redefining TSR -Total Shareholder Return. In my view, It is the age of an ecosystem #economy where there are no borders. I counsel CEOs, and boards to put value creation over profits by constantly reevaluating vertical integration with a clear eye. Everything starts and ends with the customer underpinned by a noble purpose.

In today’s economy, it is more important than ever for companies to focus on creating value rather than simply maximizing profits. This means that companies need to be constantly reevaluating their business models and strategies in order to ensure that they are creating the most value for their shareholders.

One way that companies can create value is by focusing on customer needs and delivering exceptional customer experiences. This requires companies to have a clear understanding of their customers and what they want and need. It also requires companies to be agile and responsive to changes in customer needs and preferences.

Another way that companies can create value is by investing in new technologies such as AI, blockchain, and quantum computing that will help them improve their operations and better serve their customers. This includes investing in artificial intelligence (AI) and data analytics so that they can make better decisions, automate repetitive tasks, and improve customer service.

Finally, companies need to focus on reducing costs so that they can reinvest those savings into growth initiatives. This can be done through cost-cutting measures such as automating processes and eliminating waste. It can also be done through cost-optimization efforts such as using data analytics to identify areas where costs can be reduced without sacrificing quality or service levels. I have executed several cost optimization initiatives during my career including $1.2 billion savings on Bank of America ’s balance sheet.

Conclusion

Technology is a deflationary answer to today’s macro struggles, says IBM CEO Arvind Krishna. I couldn’t agree more. Arvind Krishna excels at redefining TSR -Total Shareholder Return. It is the age of an ecosystem #economy where there are no borders. Put value creation over profits by constantly reevaluating vertical integration and adjacent markets with a clear eye. Everything starts and ends with the customer underpinned by a noble purpose. Get more insight from McKinsey & Company ’s thought leaders on the power of ecosystem -The ecosystem economy.

5. IBM Quantum System Two: The Next Major Milestone in Quantum Computing

IBM has outlined their next major milestone in developing quantum centric supercomputing, IBM Quantum System Two. This update features a modular design & hybrid cloud middleware that will enhance the scale + speed at which IBM is able to operate. IBM is continuously scaling up and advancing their quantum technology across hardware, software and classical integration to meet the biggest challenges of our time, in conjunction with our partners and clients worldwide.

IBM's Newest Quantum Computer

IBM Quantum System Two features a modular design that allows for more qubits, improved cooling and enhanced stability, meaning that it can handle more complex workloads than ever before. In addition, the hybrid cloud middleware will allow for easier integration with classical systems, making it possible to solve even the most challenging problems. With this latest advancement, IBM is well on their way to becoming the leaders in quantum computing.

Boards must learn the quantum's value creation potential in addition to their responsibilities for defining business models, driving innovation initiatives, and testing new routes to markets. -Khwaja Shaik, Board Advisor

The Benefits of Quantum Computing

Quantum computers are capable of tackling problems that are too complex for classical computers. They have the potential to revolutionize industries such as finance, healthcare, energy and transportation. In addition, quantum computers can help us unlock new scientific discoveries and create more efficient algorithms.

Approve a milestone-based Quantum fundraising plan in alignment with long-term strategy and growth opportunities. -Khwaja Shaik, Board Advisor

The Future of Quantum Computing

IBM is committed to continuing to scale up and advance their quantum technology across hardware, software and classical integration. With the help of IBM's partners and clients worldwide, IBM intends to meet the biggest challenges of our time head on. Together, we will create a better future for all. 

Classical Quantum needs AI/ML and AI/ML needs Quantum. There is so much potential to leverage from each other. -Khwaja Shaik, Board Advisor

Conclusion: 

IBM's latest quantum computer is a major milestone in the world of quantum computing. With its modular design and hybrid cloud middleware, it is more powerful and efficient than ever before. This latest advancement brings us one step closer to solving some of the world's most complex problems. Get more insight from The Wall Street Journal article -IBM Unveils New Chip in Push to Realize Quantum Computing’s Promise

6. Questions for Board's Technology & Innovation Committee on Innovation Resiliency

The recent FTX debacle has profound implications for AI Research. Sam Bankman-Fried was a significant donor for super powerful AI projects “and” AI safety projects. However, the AI safety-oriented research initiatives, including edge research devoted to understanding the potential dangers of AI are shut due to lack of funding. This is a major problem because it means that we are not doing enough to understand the potential risks associated with artificial intelligence. If we do not have a clear understanding of the risks, we will not be able to mitigate them. This is why it is so important to fund AI safety research initiatives.

Why AI Safety Research is Important

AI safety research is important because it helps us to understand the potential risks associated with artificial intelligence. As artificial intelligence becomes more advanced, it will have a greater impact on our lives. We need to make sure that we are doing everything we can to understand the risks so that we can mitigate them. 

There are many different risks associated with artificial intelligence. For example, artificial intelligence could be used to create autonomous weapons. These weapons could be used in warfare and they could kill innocent civilians. Additionally, artificial intelligence could be used to manipulate people and information. This could lead to false information being spread and people being manipulated for political gain. Finally, artificial intelligence could be used for mass surveillance. This would violate our privacy and could be used to control and oppress people. 

As a member of a board committee focused on technology and innovation, it is important to ask the right questions in order to ensure that the company is prepared for anything. With AI becoming more and more prevalent, it is important to make sure that the company's investment in this area is resiliant. Here are some questions to consider from an AI safety standpoint.

1) What edge research initiatives are being undertaken to understand the potential dangers of AI? 

2) How is the company funding these initiatives? 

3) What are the risks associated with not undertaking this research? 

4) What are the potential benefits of AI safety research? 

5) How will the company communicate these risks and benefits to shareholders? 

6) What are the ethical implications of AI safety research? 

7) How does the company plan to mitigate any risks associated with AI? 

8) What are the contingency plans in place in case of an AI accident? 

9) Who is responsible for overseeing AI safety initiatives? 

10) What are the Key Performance Indicators for success in this area? 

 Conclusion:

Asking these questions will help to ensure that the company is prepared for anything when it comes to their investment in AI. It is important to understand the potential risks and benefits of this research so that informed decisions can be made about how to proceed. With proper oversight, the company can mitigate any risks associated with AI and be prepared for anything that may happen.

7. How to Address Systemic Risks Due to Lack of Global Crypto Regulations

The recent FTX debacle is a classic use case for the board governance failure. FTX did not have a fully functioning board. It stresses a greater need for future-fit tech executives with deep regulatory expertise. It is essential to have a capable board to address key strategy, risk, and governance priorities.

As boards have a fiduciary responsibility to shareholders to identify risks to the business, they must cover everything from cybersecurity threats, to disclosures, to market disruption from startups such as FTX and competitors. In the case of FTX, the board never existed. Hence it failed to anticipate or react quickly enough to the risks inherent in crypto trading. As a result, the company has been embroiled in scandal and faced bankruptcy and significant reputational damage to crypto industry.

What Went Wrong?

There are a few key areas where the FTX would have avoided collapse if they had a capable Board. Board has responsibility to provide adequate oversight of financial performance and risk oversight. First, they did not have adequate expertise in cryptocurrency trading and regulations. Second, they did not have a clear understanding of the technology underlying FTX's business model. Third, they did not have sufficient oversight of management's actions including overseeing financial reporting.

This is about recklessness, greed, self-interest, hubris, sociopathic behavior that causes a person to risk all the hard-won progress this industry has ever earned over a decade, for their personal gain. -Jesse Powell, Kraken CEO

Overseeing financial performance is not the same as overseeing financial reporting, although the two are closely related. There were several red flags in FTX books. FTX trading didn’t disclose its financial statements publicly.

And fourth, they did not effectively communicate with shareholders about the related party transactions and risks associated with FTX's business.

Mr. Bankman-Fried’s companies had neither accounting nor functioning human-resources departments. -Federal Court Filings

These failures led to a perfect storm of sorts that allowed FTX to engage in practices that were highly risky and ultimately led to the company's current predicament. For example, because of the lack of board and board oversight, FTX did not have adequate expertise in financial reporting, cryptocurrency trading and regulations, and they failed to properly vet FTX's business model and assess the associated risks. As a result, FTX was able to engage in aggressive marketing tactics that ultimately backfired.

Furthermore, because the board did not have a clear understanding of the technology and systemic risks underlying FTX's business model, they were unable to effectively monitor management's actions. This lack of oversight allowed FTX to take on more risk than was prudent and ultimately led to the company's downfall.

The filing highlighted numerous failings, concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. -FTX Court filing

Finally, because the FTX did not have a formal board, they did not effectively communicate with shareholders about the risks associated with FTX's business, many investors were unaware of the potential downside of investing in FTX. This lack of transparency ultimately led to mistrust and confusion among shareholders when things went wrong.

Conclusion: 

The recent FTX debacle highlights the importance of having a board that is equipped to handle the financial reporting and unique risks associated with cryptocurrency trading and regulations. Without adequate digital expertise, financial reporting oversight and risk oversight, companies like FTX are able to engage in fraud and risky practices that can ultimately lead to their downfall. In order for boards to effectively manage risk going forward, they must have capable board with deep regulatory and digital expertise and financial reporting expertise who can help them navigate these complex issues. Need more insight on FTX debacle? Read The WallStreet School article here -FTX Fall was years in making.

8. BOOK RECOMMENDATION -CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest

From the world’s most influential management consulting firm, McKinsey & Company , this is an insightful and revelatory look at how the best CEOs do their jobs. Based on extensive interviews with some of today’s most successful corporate leaders—including those at Netflix, JPMorgan Chase & Co., General Motors, and Sony—the book provides readers with an inside look at what it takes to be a successful CEO.

CEOs are under immense pressure to deliver growth and performance, and the stakes are high—billions, and even trillions, of dollars are at stake, and the fates of tens of thousands of employees often hang in the balance. Yet, even when “can’t miss” high-achievers win the top job, very few excel at it. In fact, research shows that only about 10 percent of CEOs are truly successful.

So, what separates the best from the rest? Growth is essential for any CEO, but it’s not enough. To really be successful, a CEO must also deliver high performance—and that requires a different set of skills.

Growth-oriented CEOs focus on expanding the pie—on finding new markets and new opportunities for their companies. Performance-oriented CEOs, on the other hand, focus on executing at a high level and making the most of the resources they have.

The best CEOs are able to do both—to grow the pie and to perform at a high level. They are able to develop a clear and compelling vision for their companies, build the right teams, and execute flawlessly.

The McKinsey senior partners, Vik Malhotra, Scott Keller, Carolyn Dewar provide the six mindsets of exceptional CEOs that are so relevant to the modern era:

1. They are bold, and set the direction for their company.

2. They work to get everyone aligned, and treat the soft stuff as hard.

3. They mobilize their strategy through their leadership.

4. They engage their directors, and help them help the company.

5. They connect with shareholders, and start with "Why?"

6. They are effective, and do what only they can.

If you’re looking to take your career to the next level, or if you’re simply interested in what it takes to be a successful CEO, this book is a must-read.

If you enjoyed my book recommendation, here are my book recommendations LinkedIn article -Top Must-Read Books for Boards and C-suite -2022

ABOUT KHWAJA SHAIK

KHWAJA SHAIK is the award-winning C-level Global IT Executive with 25+ years of technology, industry, and board leadership with GE, IBM, Bank of America & PwC. He was recognized globally for turning visionary thinking into breakthrough growth. As one of IBM’s CTOs, Khwaja counsels CEOs, Boards, and Startups on corporate strategy, digital transformation, AI, Cybersecurity, ESG, and culture shifts to unlock performance.

Using his innovative mindset, he saved $1.1 billion per year for Bank of America by transforming the Global IT Operating model and future-proofed business by mitigating risk and infusing new fintech. Khwaja has 20 years of experience in the highly regulated banking and financial services industry. 

In addition, as a Big5 thought leader at PwC, he incubated new businesses, reshaped business and platform operating models— digitized end-to-end business processes to capture value, and protected firms from cyberattacks through AI & the cloud.

Khwaja has a history of leading over $10B digital business transformations by scaling Agile practices for cost optimization, revenue-generation, and societal transformation imperatives. It includes digital business optimization and using digital business models to capture profitable growth, customer lifetime value & competitive advantage to Fortune 500 firms.

Khwaja transformed the Omnichannel customer experience by delivering world's largest next-gen Contact Center platform as part of BAC's M&A (CFC, MBNA, Fleet etc.) by replacing aging telephony system with VoIP. Contact Center platform serves 1 billion calls, 500K interactions annually and 300 million outbound calls annually to support multichannel strategy

In 2016, Khwaja was among the most exceptional IBMers appointed with the rare distinction of IBM Academy of Technology member. In 2020, Khwaja was recognized as IBM’s senior inventor and top 100 technical leaders driving technology ethics and data stewardship, providing the direction of IBM on societal transformation with responsible innovation that matters.

Service to others has been a part of Khwaja’s purpose. Khwaja promotes economic equity, social responsibility, diversity, and inclusion for the prosperity of all -the reinvention of education through innovative programs such as Open P-TECH. Due to his holistic stakeholder engagement in the industry, partner ecosystem, and community, Khwaja received several service awards from IBM, Bank of America, University of North Florida, Indo US Chamber of Commerce of Northeast Florida, and 2022 ORBIE Awards FloridaCIO Finalist.

Khwaja serves on the boards of directors of the Museum of Science & History, UNF School of Computing Advisory Board, TECt, MIT CIO Forum, Interfaith Center of Northeast Florida, and McKinsey Executive Panel.

Khwaja regularly writes on LinkedIn, Twitter and regularly interviewed for industry insights or cited in the news, Thought Leadership POVs. He is a frequent international speaker at elite universities, including IIT Hyderabad, CIO IT & Security Forum, MHI Supply Chain Conference, and JAX Chamber IT Council.

Khwaja is a Fellow of Herndon Directors Institute, sponsored by Nasdaq and Atlanta Life Insurance Company. Khwaja holds an MBA and a bachelor’s degree in Engineering. Khwaja lived on three continents, experienced three different cultures, reads too much, doesn’t do enough gardening, married for over 22 years, and has two boys.

 More details on Khwaja’s career and thought leadership activities could be found via Linkedin, Khwajashaik.com or follow him on Twitter @Khwaja_Shaik

"The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions."