The Supply Times
Posts
The Edge of Brinkmanship

The Edge of Brinkmanship

Naseem Malik
May 18, 2023

Welcome back to The Supply Times!

If you’re a first-timer joining us, thanks so much for subscribing. If you’re a frequent flier, I really appreciate you reading.

Last week I was at the annual ISM conference in Dallas, and it was wonderful to connect with some of my subscribers and get great feedback. If you ever have any comments for me or would like to see me address a particular topic, please reach out!

This week, we talk about the doomsday scenario of our nation defaulting on our debt, and a group of experts weigh in on their thoughts about integrating AI in the workplace. Plus, I’ll share what I’ve been reading, watching, listening to, and thinking about.

Once again into the breach!

Industry Highlights: Dancing on the Debt Ceiling

A roundup of recent global events sounds like a verse in Billy Joel’s “We Didn’t Start The Fire.” Pandemics, invasions, recessions, inflation. What else could we possibly add to the list?

The US Congress has a few ideas. How about the world’s wealthiest nation defaulting on its debt?

Earlier this week, Treasury Secretary Yellen warned the US is running out of cash, and if lawmakers don’t reach an agreement on raising the debt ceiling soon, our options could be exhausted by as soon as June 1.

Doing so would have some pretty serious consequences. A White House report suggests even a short-lived default would result in 500,000 lost jobs and a 0.6 percent decline in GDP. A longer one could lead to 8.3 million people out of work and a 6.1 percent GDP dip.

It would also affect our credit rating.

“[A default] would trash the credit score of the US government,”JPMorgan chief global strategist David Kelly told Financial Times. “And it would take a long time to repair, just like it does with an individual. US taxpayers would have to pay far more in taxes for decades to come.”

The threat of default is certainly nothing new. The country has bumped against its debt ceiling numerous times since Congress imposed one in 1917. Lawmakers have increased it 78 times since 1960—most of the time in such a humdrum fashion that it barely made the news.

But recently, raising the debt ceiling has become a political football. Both parties use it to point out the egregious spending of the other, and they hold out on approving a ceiling increase to apply pressure for reform.

That’s exactly what’s happening now. As Time Magazine puts it, House Republicans are demanding cuts in exchange for their votes on raising the debt ceiling. President Biden and Senate Democrats are holding strong, insisting that Congress pass an increase with no strings attached.

Few really believe that politicians will actually allow us to careen into default. As in 2011 and 2013, lawmakers will likely strike an agreement.

But as Financial Times columnist Martin Wolf points out, playing with debt fire time and time again will eventually result in someone getting burnt.

“Even if the worst is avoided this time, repeated plays of this game of chicken make it cumulatively more likely that the crash will indeed happen,” Wolf writes.

He suggests that a long-term solution—one where “debt ceiling theatrics” are replaced by long-term budgeting—is necessary, given the current trajectory of US debt.

That, of course, would require politicians on both sides of the aisle to forfeit the partisan advantage the debt ceiling affords them. And given the level of division we’ve seen in the last several decades, I’m not holding my breath on that one.

The Future of Work: AI – The Experts Chime In

I know, I know, I just covered how AI will affect the future workplace, but in light of my recent presentation that involved AI at the ISM conference in Dallas (more on that later), I wanted to stick to it.

Earlier this week, The Wall Street Journal released a fantastic roundup of experts sharing the areas of their respective fields that AI will affect the most.

Here’s what they had to say:

Automating Ideas: McKinsey Global Institute partner Michael Chui said he expects AI to continue automating parts of knowledge workers’ jobs, with generative AI facilitating the creation of initial drafts for various tasks. This could lead to increased time spent on editing rather than original content creation, while also enhancing productivity in areas such as software development and improving the naturalness of customer interactions in contact centers.

Flatter Organizations: Brookings Institution senior fellow Darrell West sees AI flattening organizational structures through the automation of work activities. As routine tasks are automated and generative AI is deployed, job supervision and assessment will require less human oversight, allowing companies to streamline management layers and reduce the overall number of employees in the organization.

Human Development: You read that right. MIT professor Sherry Turkle observes that companies are increasingly using AI to assess employee empathy, not only during job interviews but also on the job. AI programs are being employed to monitor empathy levels in call centers and various workplace interactions, potentially leading to job loss for those who don't meet the machines' standards. But beware: this shift towards pleasing machines and defining human empathy based on what machines can comprehend is a concerning development in technology's influence on human behavior.

An Ethical Threat: USC professor Jonathan Gratch said he has major concerns with the ethical dilemmas AI-powered digital assistants with human-like qualities will create in collaborative settings. Research suggests that people may behave less ethically when interacting indirectly through virtual assistants, leading to more transactional and self-interested interactions, including deception and emotional manipulation. Recognizing and addressing these ethical risks will be crucial for business policies and AI research going forward.

Optionality For Elders: Joseph Coughlin, director of MIT’s AgeLab, says AI has the potential to rejuvenate older workers by showcasing their capabilities and expertise, challenging ageist stereotypes. By leveraging their experience and knowledge, AI can augment the abilities of older professionals, enabling them to excel in their fields and providing valuable support as collaborators and coaches. For example, AI systems can assist physicians in gathering and analyzing critical patient information, while older doctors can apply their experience to validate AI diagnoses and treatment recommendations.

Navigating New Tech: Many organizations face a "digital dexterity gap," Gartner VP Matt Cain said, where employees struggle to keep up with rapidly evolving technology, hindering efficiency and productivity. AI services with conversational interfaces and natural-language processing simplify complex computer functions, allowing workers to easily describe their needs and obtain desired output without extensive technical knowledge or complex interactions.

Talent Acquisition: This area obviously caught my attention. Digital-workplace expert Alexandra Samuel says while AI can effectively handle routine tasks at a lower cost, eliminating entry-level positions entirely can hinder the onboarding process and make it harder to find experienced mid-career talent. To address this, organizations should reconsider the role of entry-level hires, assigning them more challenging tasks and providing active coaching and mentoring to facilitate their growth into valuable colleagues. This approach allows for the cultivation of a long-term talent pool and maximizes the potential of inexperienced hires in an AI-driven landscape.

How do you think AI will affect your field? Drop me a message about it here!

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About Re: Supply Chain, Work, and Beyond

📕 Read -The Wisdom of the Bullfrog – Admiral William H. McRaven

Over a year ago, I talked about how Admiral McRaven’s book, The Hero Code, was one of my favorites. So I was glad to learn about the release of his latest book, The Wisdom of the Bullfrog: Leadership Made Simple (But Not Easy). In it, Adm. McRaven details his four decades of service as a Navy SEAL and all of the leadership challenges he faced along the way—from commanding operations to capture Saddam Hussein to the raid for Osama bin Laden. Each chapter provides a parable-type takeaway and has rich stories from his storied career. A great one to pick up if you like equal parts tactic and inspiration.

Here’s some other cool stuff I’m reading:

WSJ: “When Apple Comes Calling, It’s the Kiss of Death” – a great article about how Apple takes over companies.
NYT: “Liz Holmes Wants You to Forget About Elizabeth” – a compelling profile of post-Theranos Elizabeth Holmes and her life as she awaits jail time. She lost her final appeal and will be reporting to the big house on May 30th. As someone who has tracked this case since The WSJ first broke the news in 2015, it’s been fascinating. The books, TV, and movie series have finally culminated into justice being served.

📺 Watch - Air

I’ll never get tired of the Ben Affleck/Matt Damon duo, and in their most recent project, Air: Courting A Legend, they’ve done it again. The film, now on Amazon Prime, is a historical drama depicting Nike’s quest to land Michael Jordan as an endorser, and it’s beautifully done. I love Affleck as Nike co-founder Phil Knight, and there are great performances from Damon, Viola Davis, Jason Bateman, and Chris Tucker. A must-watch for any fan of the basketball GOAT and entrepreneurs alike.

👂 Listen - The Leadership Tales Podcast with Colin Hunter

This week’s listen features yours truly! I really enjoyed this enlightening conversation with Colin Hunter in his Leadership Tales Podcast series. We explored the powerful link between talent & finance, the complexities of hiring across various industries, and the impact of the 10x rule.

Thanks to Colin for hosting this insightful discussion. His probing questions made for a truly productive dialogue.

Check it out here!

💡 Think - ISM Annual Conference

I just had an incredible time attending the annual ISM Conference with friends, former colleagues, and top-notch practitioners! Here are some of my takeaways from it:

✨ The conference offered exciting and thought-provoking content, covering not just the impact of AI on Procurement careers but also pressing issues such as ESG, DEI, inflation, and recession risks. 💼📈🌍

🎙️ One of the highlights was having President George W. Bush as our keynote speaker. His candor, insights, and humor captivated the audience. My personal favorite was when he humorously mentioned how he believes he'd be too old to be POTUS now, urging the two frontrunner "geezers" to reconsider. Another memorable line was his witty remark about Chinese men and Russian women.

💼 The ExecIn session was particularly enlightening as an economist fearlessly predicted that the long-awaited recession would hit the US economy on September 5th this year. This reminded me of the old joke that economists have predicted six out of the last two recessions. It's definitely a topic worth monitoring. 📉💡