At MIT Sloan, CEOs talk innovation strategies while China attacks

The innovation strategies of the nation's most innovative CEOs seem oblivious to the greatest security hack in history. Why is that?

"There was a time when, if you were king, you had to be in front of the cavalry charge," said Joe Chung, the managing director and co-founder of Redstar Ventures, a company that creates companies, as its website puts it. Chung, who sold his first company, dot.com darling Art Technology Group, to Oracle in 2010 for $1 billion in cash, was speaking at the 10th annual MIT Sloan CIO Symposium. He was moderator of the event's anticipated CEO keynote, "The use of power and influence during the process of innovation." His first question to the distinguished panelists was about their personal innovation strategies. Should the CEO lead the charge on new ideas? Or, if it's true that innovation is inversely proportional to job title, does a CEO innovation strategy of "do no harm" make more sense? Hang back and let the good ideas roll.

Linda TucciLinda Tucci

As I was writing up the panel's advice to the audience on wielding power and influence to spur innovation, more evidence came to light that Chinese government and military hackers had breached critical U.S. weapons systems. These included the advanced Patriot Missile system, PAC-3; the Army's Terminal High Altitude Area Defense system to shoot down ballistic missiles; the Navy's Aegis ballistic-missile defense system; and at least a half-dozen other equally important-sounding combat systems, according to reporter Ellen Nakashima of The Washington Post, quoting from a confidential report that ironically someone had leaked to her. The breached systems on the list are built by the likes of Boeing, Lockheed Martin, Raytheon and Northrup Grumman -- and their supply chain of subcontractors. "This is billions of dollars of combat advantage for China. They've just saved themselves 25 years of research and development. It's nuts," said a senior military official not authorized to speak on the record, but who spoke nonetheless.

On the record, I wonder: If these super-secret industrial giants are all hackable, does that mean everything is available for anyone who wants it? Does this mean that any great idea, wondrous innovation, any corporate innovation strategy to stymie the competition is available to any competitor who can hack it? Last week at the MIT Sloan CIO affair, the emphasis was on how to get innovation going, but with the echo of the Chinese hacking debacle ringing in our ears, it now seems your best innovation can be my innovation if I wish to find it.

Maybe the military is an object lesson in why companies that build things that weigh something are in a bigger security predicament than software innovators.

Innovation strategy and moral authority

None of that security paranoia, however, was apparent on the stage at MIT. As I listened to the most innovative of innovative CEOs open up about how they got new ideas to take flight and in some cases reaped billions, their idealism was palpable, if a bit platitudinous. Tom Leighton, co-founder of Akamai Technologies, the Internet content provider giant, said innovative ideas "are like sparks, and they are easy to extinguish if you are not careful." To make good ideas successful, companies "have to be fanning the flames to get a fire going," he said. In addition to his CEO role, Leighton is professor of applied mathematics at MIT, where he earned his Ph.D. after studying electrical engineering and computer science at Princeton. His resume suggests he knows a viable spark when he sees one. According to his bio, he is an authority on algorithms for network applications, and has published on cryptography, parallel architectures, distributed computing, combinatorial optimization, and on graph theory.

Still, Leighton warned, there's something about a corporate structure that doesn't love innovation. Akamai is just now finally bringing to market some ideas that are "very important to our business," he said. "We had them five years ago as sparks and somebody said no." Rather than fanned, the sparks were back-burnered, slowing down their progress to the marketplace by two, maybe three years. "We put procedures in place, because so many people can say no," he said. One example? Company-wide innovation showcases. At Akamai quarterly meetings, Leighton chooses three projects and puts their teams on stage to describe their innovations. "It's important to show the company that innovation is alive and well," he said. Who, if not the CEO with "the power of funding, the power of the pulpit," should play a leadership role in setting innovation strategies? Jousting with company kings is encouraged. Leighton, who hosts regular small-group lunches (complaints encouraged!), said he's thrilled when the "21-year-old engineer comes along and teaches me something."

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The noblesse oblige comes naturally to the innovation-strategy-wielding CEOs on the MIT stage. They're the real deal. They come to their powerful positions with technology chops -- the "moral authority" of their expertise, as moderator and serial entrepreneur Chung put it. Kazuhiro Gomi, president and CEO at NTT America Inc., a subsidiary of the Japanese telecommunications giant, pioneered new areas of voice signal processing and voice answering systems, according to his bio. Alon Girmonsky, founder and CEO of Israeli-based startup BlazeMeter, a self-service cloud-based load-testing platform for developers, specialized in building enterprise grade Internet applications. He began his career in the technology sector as a software officer in the Israel Defense Forces intelligence unit.

So why have these guys been so successful? Why haven't hackers stolen all their ideas? One possible answer is that they are agile. The difference between us and other vendors, said BlazeMeter's Girmonsky, is "we do it faster." They move so fast that others, cyberspies included, can't keep up. Maybe the military is an object lesson in why companies that build things that weigh something are in a bigger security predicament than software innovators. So much planning and so many players are involved in building a jet fighter or a drone aircraft that preventing leaks and hacks is near impossible. It's a scary thought that manufacturers, who may on average be less computer security savvy than software makers, need a weapons-grade security strategy the most. Here's a spark of an idea: Maybe the nation's fast-moving software CEOs can put their heads together and fan the flames for inventing a national security system?

Let us know what you think about the story; email Linda Tucci, executive editor.

This was first published in May 2013

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