Dan Bigman

Dan Bigman
Dan Bigman is Editor and Chief Content Officer of Chief Executive Group, publishers of Chief Executive, Corporate Board Member, ChiefExecutive.net and Boardmember.com. Previously he was Managing Editor at Forbes and the founding business editor of NYTimes.com.

Our Next Moonshot? It Should Be Fusion

[caption id="attachment_69315" align="alignnone" width="696"]fusion reactor ITER july 2019 Construction continues at ITER in southern France, where 35 nations—including China, the European Union, India, Japan, Korea, Russia and the United States—are working to build the first fusion reactor.[/caption] In 1961, as NASA was trying to spec out the computer needs for taking a man to the moon, there was only one commercial supplier for computers that could do the needed real-time calculations—IBM—and the only machines that could do them filled an entire room. By 1969—just eight years later—the computer that took Apollo 11 to the moon and back fit in about one cubic foot of space, weighed less than 100 pounds and featured pioneering integrated circuits from Fairchild Semiconductor that didn’t exist five years earlier. The development of the Apollo computer, as retold in One Giant Leap, Charles Fishman’s great new history of the Apollo missions, was the moonshot within the moonshot. Funded by NASA and designed and prototyped at Charles Stark Draper’s legendary Instrumentation Lab at MIT, it is Apollo’s true legacy, ushering in not the Space Age but the Digital Age that has transformed human existence. With moonshots in mind, I sat down in June with another MIT visionary, Nicholas Negroponte, to talk about emerging technologies, from quantum computing and A.I. to augmenting people with both genetic and machine mutations. He founded the school’s vaunted Media Lab and has an uncanny ability to see the future long before it happens. What one technology would he pick for an all-out development effort by the United States? Negroponte didn’t blink. “Fusion,” he said. Fusion? “Absolutely.” Surprised? That’s understandable. Unlike the race to space during the Cold War, autonomous cars or who will roll out 5G, there’s zero mainstream attention being paid to the idea of forcing together hydrogen atoms to harness the limitless energy source that powers the stars. Nuclear fusion research—despite huge gains in recent years—isn’t going to make a presidential debate anytime soon, let alone garner Apollo-like funding. And that, says Negroponte, is a pity. Because no other technology would transform our lives in the same way fusion would. In an age where we quibble over how many solar panels you need to run a hair drier, this would upend everything. “Think for a moment if power were costless and limitless....What if we all used 20 times more power than we do on a per capita basis?” he says. “A different equation where power is infinite, it’s not polluting, you have no fuels that you need to replace.” To Negroponte, fusion isn’t about going green. It’s creating a new world based on unlimited energy consumption, filled with new kinds of machines, new businesses, new industries, new ways of being. Crazy? Hardly, says Negroponte. “I remember when we would say to each other, ‘Imagine when computing is free and memory is infinite’,” he says. It sounded dotty in the ’60s and ’70s, but now “we’re almost there.” So, will fusion happen, even with a zero chance of moonshot funding? Yes, he predicts. “It’s definitely going to happen in your life.” Wow. Now just imagine if we treated it like Apollo.

Marriott’s Arne Sorenson: 2019 CEO of the Year

Megadeals! Hacks! Strikes! Protests! Airbnb! In a very crazy time for Marriott International, CEO Arne Sorenson excels by focusing on his people—and sticking to his principles.

Amalgamated Life’s Paul Mallen On Making The Leap From CFO to...

When Paul Mallen stepped into the CEO role at The Amalgamated Family of Companies in February 2018, he felt well prepared for the top job thanks to fourteen years at the White Plains, NY-based life insurer, which has traditionally focused on selling to labor unions—but is now branching out to mid-sized companies. As CFO, he had a deep understanding of the company’s finances—but he’d also worked as the defacto COO as well, overseeing functions including IT, underwriting, insurance operations and facilities. He also had the advantage of solid, long-standing relationships with all the other senior managers in the leadership team who would now report to him. But still, being CEO is very different than being CFO. From reporting to a board, not a boss, at a $180 million (revs) private company to engaging with entirely new parts of the business—not to mention customers—Mallen’s had to expand and reshape his focus. Mallen shares his lessons with Chief Executive for anyone making the transition—and CEOs helping their CFO get ready for the top job. What follows is edited for length and clarity:

You came up on the finance side. What surprised you about being CEO?

One was having to work more closely with the board of directors, which I expected. I've worked with the board before in my CFO capacity, but now we're reporting directly to the board and it's not like reporting to a direct manager such as your CEO or others. They're not looking at you day to day. They're not in the office, they’re spread out throughout the country. Some of the other differences: I have to focus more on sales and marketing. As CFO, I always worked with the sales and marketing groups, but I didn't have to get into in depth how they market, how they sell and so forth. I had to gain a deeper understanding of the process with our sales executives. And with that we've come up with new strategies and approaches to enhance our growth going forward. There were certain operational areas of the company, that did not report to me, so I had to learn those more in depth. More direct involvement with customers, brokers and consultants, which I happen to like. I've been very lucky with the internal relationships here. When I was CFO, of course I had many peers, but then when I was promoted, they were all reporting to me.

That's a difficult transition sometimes.

It can be. I was very fortunate that the senior executives here supported the board decision to elect me CEO and they've been in the past year and a half extremely helpful. It's really gone a long way in helping our company succeed.

How have you fostered that?

Well, first of all, those relationships developed over many years and from working with them and I think it's gaining respect at that point, even though they may not have reported to me. It's respect for the work I've done, the way I've treated them, the team effort. A lot of that carries now into the executive meetings and the way I'm looking at the company. If there are issues or problems that have been bubbling, we always try to get to them early before they become difficult to manage. If one person has an issue, we're not looking for that individual to necessarily resolve it on their own. I'm always looking for a different point of view and disagreements. I'm not looking for yes answers. I'm looking for different viewpoints.

The insurance business is changing, you're looking to expand beyond your traditional labor base of customers. There are other really large players in your sector. On top of that, there's digital technology and the way it's transforming every industry. Can you talk a little bit about how you're triaging all this and how you're tackling some of those challenges?

That’s exactly what we're looking at right now. Our roots are in or in labor and now we're looking to grow beyond labor unions to include midsize employers nationally. How do we think about that? Well, serving labor is really no different than serving the needs of rank-and-file employees, including highly skilled workers serving mid-size companies. So we think that we know these people, we know how to service them, we understand their needs. And with that, we think we could be successful in selling our benefits, which is one of our growth areas. We understand the needs of mid-sized companies because we are one. Because of our size, because of the way we operate here, we can customize solutions. As far as the technology change, obviously it can be a great equalizer between big companies and small companies done right. But also, you have to be very careful about capital spending and making the right decisions. And there's just a lot that comes with it.

How are you tackling that?

We’re the smallest standalone “A” rated company in terms of capital. So we have to approach things very differently than larger carriers because we can't take flyers. If we make a mistake when we're investing in technology, if we're putting a lot of capital into it, we obviously have a big issue. Having said that there are real technology needs and…we're dealing with all the same cybersecurity issues that the larger carriers are. We spend a lot of time in terms of prioritizing where our needs are. We're looking at the markets. We're looking at Insuretech, we're looking at other ways. We can always find efficiencies.

Any advice for someone who's come up in finance who's moving into the CEO role from the finance side?

Someone moving into the CEO from the CFO role, whether it's internally or externally, you’ve got to start to make sure that you understand all the businesses that the company has and the operations so in effect, you're learning down in terms of the operations. Also, there were a lot of expectations in terms of reporting directly to the board of directors and being able to work that with that board, not just around board meetings, but throughout the year. I think CFOs always think ahead and are proactive. But as a CEO, you’ve really got to think ahead and keep thinking way out into the future, not just what's happening this year. A lot of times CFOs might be focused on current year results, but you've got to focus out into 2021 while we're in 2019.

Dual-Class Shares Are More Popular Than Ever. Do They Actually Juice...

[caption id="attachment_66209" align="alignnone" width="1138"]Mark Zuckerberg, CEO of Facebook He's a fan.[/caption] Some of the most prominent companies of our era use them, from Facebook and Alphabet to Berkshire Hathaway. So did seven of the 10 biggest IPOs this year, including Lyft, Pinterest and Levi Strauss. They’re dual-class shares, endowing those who hold them with super-voting abilities that effectively leave them in control of the company regardless of what outside investors do—and they’re more popular than ever. Overall, the number of companies going public using this type of share structure went from just 4% in 2009 to 14% in 2018. Some 7% of all Russell 3,000 companies now have this kind of structure, by ISS’s count, and almost 9% of non-S&P 1500 companies use them—nearly double the number using them in the S&P 500. Proponents argue they protect management against exactly the kind of short-termism so many in the good-governance crowd rail against, allowing companies to make the kind of long-term bets needed to really grow a business—especially one with unproven technology. Opponents say they’re flat-out undemocratic, undermining common shareholders—and capitalism itself. (For the record, I've long been in this second camp—especially when it comes to Facebook.) But do they work? Do they actually help companies perform better? It’s a great question—and the answer, according to a new study by proxy advisory firm Institutional Shareholder Services is, well, mixed. ISS found (perhaps unsurprisingly given that it’s ISS) that dual-class companies were much less likely than their one-share, one-vote peers to track some of ISS’s favored corporate-governance benchmarks. They had more CEO-related transactions (raising fears of conflicts of interest), fewer independent board chairs and were less likely to disclose their director evaluation process. Interestingly, ISS found the dual-class firms had more gender diversity in the C-Suite versus one-share, one-vote firms, but less gender diversity in the boardroom. But what about the most important, bottom-line question—do these kind of companies perform better financially? Using Economic Value Added methodology (EVA), which measures profitability after subtracting the full cost of capital, dual-class shares do outperform peers, on what’s known as EVA Margin, that is, EVA/Total Revenues. But dual-class share firms underperform when it comes to EVA Momentum, the rate of improvement in profitability over time. “The advantage that dual-class firms may have established appears to be eroding over time,” writes Kosmas Papadopoulos, managing editor at ISS Analytics. “This trend highlights the risk of stasis upon achieving a certain level of performance.” In other words, the company performance depends—as it does with any other kind of company—on the performance of those who control the company. With one big difference: If something goes wrong here, there's nothing anyone can do about it.

Secrets of Glassdoor’s Top CEOs of 2019…Revealed!

An exclusive analysis of Glassdoor’s Top CEO rankings for 2019 reveals a lot of things about what motivates employees—most of them totally unsurprising. And that Best Buy employees like discounts. We go inside the data.

A Peek Inside Fred Smith’s World

In the midst of a pitched battle with Wall Street, rising global trade tensions, growing anti-business sentiment and incredible technological change, we asked FedEx founder and CEO Fred Smith about his company, his leadership—and what to watch for next.

What Do U.S. CEOs Really Earn? About $350,000 Study Finds

The median private company CEO total compensation package for 2017? $350,622. For the record, that’s just 6.7 times the median income for all U.S. workers, not 275 times, as some have said.

Jeff Bezos’s Loss: 5 Defenses Of New York City

In the wake of the Amazon debacle, EIC Dan Bigman wants to stick up for New York City, even as the bad news piles like garbage on a sweltering sidewalk.

CEOs In The Crosshairs As Proxy Season Heats Up

CEOs and directors looking to suss out some of the big themes that are potentially emerging in this year's proxy season, here's a big one: Public-company CEOs are headed into the crosshairs.

Why CEOs Running For President In 2020 Are Doomed

Michael Bloomberg and Howard Schultz are two of the most successful, entrepreneurial CEOs of the past 100 years. If you haven’t heard, they’re both considering Presidential runs. We wish them luck—they’re gonna need it.
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CEO1000 Tracker

From the schools they went to to the types of companies they run, CEO1000 is tracking the trends among the CEOs of the 1,000 largest U.S. companies.


CEOs Shrug Off Turmoil In Washington As Optimism For 2020 Continues To Rise

In spite of impeachment and ongoing tariffs, CEO confidence rises to the highest level recorded since last May.
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Best and Worst States For Business

Are you looking to relocate or expand? Evaluate each state's strengths with Chief Executive's 2019 Best & Worst States for Business.


CEO of the Year

Once a year, we celebrate the achievements of a CEO, honored for his or her success in and dedication to business, shareholders and customers.


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