Hello, dear readers!

Great to have you back! In this issue, let’s take a look at the extraordinary turnaround at GE. What’s behind this success story? Some say it’s the bold leadership of Larry Culp. Others believe it’s due to a series of well-timed divestments. Or perhaps it’s a secret weapon in the form of a 70-year-old Japanese Kaizen sensei … find out below. 

I also dive into Microsoft’s New Future of Work Report. The boffins at Microsoft are truly excited about the potential of LLMs. They’re talking about “provocateur” AI that will push back on your assumptions, AI that uses our verbal conversations in its learning models, the rise of “appropriate reliance”, and more.  

This issue features the usual injection of AI Insights and recommendations for the week's podcasts, books, shows, charts, and tweets, followed by a final chuckle. 

Oh, and by the way - I had a mailing list meltdown when I hit send on my last issue, which meant some of you received it twice (sorry!) and some didn’t get it. If you’re wondering what happened to issue #50, check it out here. 

Let’s get going.

Industry Highlights: GE’s Extraordinary Turnaround

Wow. In 2023, GE stock outperformed Apple, Google, and Microsoft. The conglomerate’s resurgence under the guidance of Henry Lawrence Culp Jr is a model of corporate reinvention. 

In just six years, Culp transformed a struggling conglomerate with $140 billion in debt into three independent, financially strong entities. How did he do it? Kaizen. 

GE's success has been extraordinary. In 2023 alone, the company experienced the largest share appreciation among U.S. industrial firms, with a staggering gain of 95.8%. Shareholders of GE HealthCare saw a remarkable 33% increase in stock value. These achievements have propelled GE's market capitalization to $144 billion, 50% higher than when GE owned GE HealthCare, showcasing Wall Street's confidence in the company's prospects.

Culp, reportedly, is obsessed with Kaizen and lean manufacturing. You know the rules: standardized work processes, cost reduction, waste minimization, efficiency, transparency, and problem-solving. 

Most importantly, Kaizen is about engaging workers on the factory floor to harness their expertise and ideas to drive efficiency. GE wasn’t always great at this, according to a Fortune article: “GE basically ignored those folks in the trenches … At GE, manufacturing was seen as grunt activity; everyone [in head office] did the thinking, and the rabble made the stuff. It was an antiquated view.”

Today, Culp insists that everyone’s ideas need to be considered. The people on the factory floor are best placed to know what’s going on, then figure out what’s wrong, and get it fixed. In Culp’s words: 

“This is not like McKinsey or BCG coming in and laying 100 pages of PowerPoint. These kaizens last five days long and are hands-on, do it now, try-or-fail events—not something on someone’s [long-term] to-do list, but will be in place by week’s end.”

GE has engaged a secret weapon from Japan: lean manufacturing sensei Yukio Katahira, who despite being in his seventies spends 10 to 12 hours a day “sprinting through GE’s factories issuing his exhortations to workers via a mic-equipped translator.”

In practice, Kaizen is about discovering an issue, drilling down to the root cause, finding a solution fast, and then measuring the results. Culp himself participated in a Kaizen team at the Lynn military engines plant, where the workers (not someone in head office!) discovered a single part was holding up delivery times. The problem (a faulty welding process) was corrected, virtually all defects were eliminated, and production time was reduced by over eight weeks. 

Culp's leadership style emphasizes transparency and proactive problem-solving. Managers at GE are encouraged to share project progress openly, focusing on results rather than blame. This shift in mindset turns challenges into opportunities for improvement and has created a culture that addresses issues promptly.

“When these situations occur,” says Culp, “and they always do when you’re stretching, let’s go into problem-solving mode. Let’s embrace it. What can we do about it? Not sugarcoat it. Not hide it. That’s the goal.”

The Future of Work: LLMs’ Incredible Potential

Microsoft’s latest Future of Work report is, predictably, 100% focused on AI. What’s great about this report is it isn’t just written by some brainstorming futurist; rather, every hypothesis and insight has been lab-tested, with the results carefully explained. It’s fairly technical reading with 40+ pages of insights, so I’ve picked five headlines that grabbed my attention to share here. 

Most jobs will likely have at least some of their tasks affected by LLMs 

It’s estimated that around 80% of the U.S. workforce could see at least 10% of their work tasks affected by the introduction of LLM tools. And for about 19% of workers, that impact could be even more significant, with at least 50% of their tasks being influenced. But hold on, it's not as simple as AI swooping in to replace everyone. Microsoft points out that the real picture is more nuanced. They divide the effects of AI on jobs into different categories: "Insulated" where only a few skills in a job category are affected, "Augmented" where skills are complementary, or "Disrupted" where jobs are replaced.

Large Language Models (LLMs) help the least experienced the most. 

Researchers found tools like ChatGPT “helped disseminate tacit knowledge that experienced and high-skilled workers already had.” In a lab experiment, the bottom half of subjects in terms of skills benefited the most when using GitHub copilot, showing a 43% improvement in performance, compared to the top half, whose performance increased by 17%

Critical thinking: LLM-based tools can be useful provocateurs

AI is already moving beyond error correction to become “provocateurs”, promoting critical thinking in knowledge work. This means we can expect LLM tools to challenge our assumptions, encourage evaluation, and offer counterarguments. Microsoft notes that “provocative” AI will have to be designed carefully to avoid overwhelming users with criticism. 

Appropriate reliance is a key challenge in human-AI interaction

I haven’t encountered this term before, but I think it’s perfect: “appropriate reliance”.

In a study about medical decision-making, clinicians with low AI literacy were 7 times more likely to select medical treatments aligned with AI recommendations. Overreliance happens when people accept incorrect AI outputs. We can reduce overreliance with effective onboarding, transparency, cognitive forcing functions, and uncertainty visualizations where the AI indicates when it has low confidence in a fact or figure. 

Digital knowledge is moving from documents to dialogues

Traditionally, AI’s data set has been based on documentation, text, and spreadsheets. But as we increasingly invite LLM tools to listen to and participate in human dialogue, this opens the door to an entirely new data set. Microsoft imagines that facts from previous conversations may surface at contextually appropriate times, past conversations can be used for personalization, and verbal conversations can provide patterns for prompt engineering. It will be a time saver: imagine, for example, you’ve had a brainstorming session with your team. Seconds later, AI creates a slide deck based on that conversation. Sweet.

AI Insights

• US and China agree to map out framework for developing AI responsibly: This is a big deal since both countries are hesitant about giving the other party an advantage by putting the brakes on AI. They’ll meet together with around 50 other nations in mid-2024 to discuss a responsible AI framework and standards document. 

• Talking to chatbots politely can boost their performance: No, LLMs are not motivated by politeness, but ‘emotive language’ or adding a sense of urgency and importance can get better results. This news reminded me of a viral story in 2016 when an 86-year-old grandmother hit the headlines for using “please” in a Google search. Turns out she knew what she was doing. 

• Apple dumps electric car: Project Titan, which honestly looked like a pretty cool car, has been canceled after ongoing challenges. Apple is expected to shift many of the 2,000 Titan employees to its AI division. Apple’s stock has climbed in reaction to the move. 

The Supply Aside

📕 Read - Execution: The Discipline of Getting Things Done

In Execution, Larry Bossidy and Ram Charan blend smart practice with intelligent articulation of how to get things done. It’s a refreshingly realistic and hard-nosed approach to business. These guys eschew formulating a “vision” that may or may not happen; Execution lays out the practical steps to linking people, strategy, and operations to get things done through deep engagement. Packed with case histories from the real world, this book impacted me at the start of my career. 

What Else I’m Reading

• FTC sues to block the largest supermarket deal in history: The $25 billion merger between Kroger and Albertsons will help the supermarket chains compete with behemoths like Walmart and Amazon, but the FTC believes the deal will drive up food prices and harm union workers’ bargaining power. 

• Peter King retires after 40 years of covering the NFL: Legendary sports writer Peter King has announced his retirement. This guy has been at the center of the NFL universe for decades, and his deep insights will be sorely missed. 

• The “Enhanced Games” will be the Olympics on steroids - literally: The concept behind the Enhanced Games is to find out what will happen if we remove all barriers to taking drugs in sport, “rewarding and celebrating drug-assisted achievements” to explore the wild frontier of juiced-up human potential. Wow. 

📺 Watch - Rolling Along: An American Story

Produced by Spike Lee and Frank Oz, Rolling Along tells the story of Bill Bradley’s incredible career from champion basketball player to Democratic politician. Why make the unusual leap from professional basketball to the US Senate? “I wanted to know America like I once knew the seams of a basketball,” Bradley explains. I loved the archival footage of basketball and vintage politics in this film. Bradley’s delivery (he committed the oral history of his life to memory and delivered it live on stage in New York City) is spellbinding in this theatrical recording. Watch it on Max.

👂 Listen - All-In Podcast

Described by one reviewer as “Elon Musk’s inner circle”, the All-In Podcast features a stellar cast who aren’t afraid to speculate, debate, and share a ton of inside information on the latest topics sweeping through Silicon Valley and elsewhere. In Episode 167, they discuss Google’s “Woke AI” disaster (Black Female Nazis, anyone?), Nvidia earnings, Groq’s LPU breakthrough, and more. I can’t believe they impart so much wisdom for free. 

💡 Think - The More Things Change…

Reflecting on my recent trip to Pakistan, I'm reminded of L.P. Hartley's words: ‘The past is a foreign country: they do things differently there.’ The mix of rapid development and the comfort of familiar places struck me in Lahore, my former city. It's a bustling metropolis, yet political opinions are as divided as ever. Everyone picks a side and sticks to it, reminding me that despite the progress, some things remain unchanged.

Seeing old spots and faces was like stepping into a time machine. It's fascinating to see how Lahore encapsulates the complexity of Pakistan, the world's fifth-largest nation by population. This country is full of contrasts and challenges but also immense potential. 

Coming back, I couldn't help but feel a deeper appreciation for home. Sure, it's got its issues, but there's nowhere else I'd rather be. As a bonus - here’s a pic of me in front of my prep school where I completed grade 7 in the late 1980s. Yes, I know that ages me.

Charts of the Week

Quotes of the Week

Tweets of the Week

The Final Chuckle

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you want to see me address, email me at [email protected]!

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Happy reading this weekend!

-- Naseem