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G100 Network Notebook | February 2018

How Amazon Rebuilt Itself as an AI Company

By connecting projects across the enterprise, luring machine learning experts with ambitious products, and combining AI tools with cloud services. Wired shares the fascinating story of how Amazon created their AI flywheel, which includes offering machine learning-as-a-service to AWS cloud customers:

Yes, Google may offer customers super-fast, machine-learning-optimized chips on its servers. But companies on AWS [including NASA and the NFL] can more easily interact with – and sell to – firms that are also on the service. “It’s like Willie Sutton saying he robs banks because that’s where the money is,” says DigitalGlobe CTO Walter Scott about why his firm uses Amazon’s technology. “We use AWS for machine learning because that’s where our customers are.”

The Proxy Contest Kingmaker

ISS’s rise as public arbiter of corporate clashes has been greeted with less than open enthusiasm by companies, but as their recommendations have lately shifted in management’s favor, activists are increasingly the ones displeased. Institutional Investor takes a closer look at the small team behind ISS’s special situations research and their role in high-profile battles at Arconic, ADP, and Procter & Gamble:

[ISS] talks about operating under a framework, but that is defined primarily as following two central questions: “Have the dissidents made a compelling case that change is warranted? If so, which nominees are most likely to drive that change?” There are few rules, except that ISS doesn’t let participants review its decisions ahead of time and will only consider public information in making them. That’s not insignificant during heated proxy battles where a lot of personal invective and misinformation gets thrown around.

An Old Company Learns New Tricks

How does a 700-year-old paper and pulp business transform into a global renewable materials company? A homegrown approach to change management, says one case study. The Pathfinders program instituted by Stora Enso CEO Jouko Karvinen cultivated change agents to drive digitization and internal innovation. This initiative not only spurred new growth businesses that now contribute 76% of all profits, it built a mechanism to identify high-potential talent. From Harvard Business Review:

Two hundred and fifty employees from throughout the organization applied to become Pathbuilders. Following a thorough selection process, including interviews, ability tests, and an assessment center, 16 participants from widely different functions and levels of seniority were selected to work with top team sponsors over a six-month period. Interestingly, many of the Pathbuilders who excelled in the program had not been on the radar of Stora Enso’s established talent screening system.

Welcome to the Post-Text World

A snapshot of what an audio- and visual-first Internet looks like: one billion hours of YouTube viewings daily, with young Americans spending two hours a day watching videos online. Farhad Manjoo, writing in The New York Times, tracks the implications of this shift from text to images and sound:

The ability to search audio and video as easily as we search text means, effectively, the end of any private space. Then there’s the more basic question of how pictures and sounds alter how we think. An information system dominated by pictures and sounds prizes emotion over rationality.

Quantifying the Impact of CSR

Amidst the mounting pressure for companies to clarify their positive social impact, corporate social responsibility efforts face increased scrutiny. This includes how executive compensation ties to CSR benchmarks – a practice that may not deserve all its skepticism, according to the first researchers to analyze nine years of CSR contracting data from S&P 500 companies:

To [their] surprise, the research revealed that CSR contracting actually hit its mark, leading companies to reduce emissions, increase eco-friendly or “green” patents, and improve social responsibility ratings across the board. Those actions, in turn, increased companies’ value over the long run.