Piva Capital Holds Book Launch Event for Venture Partner Robert Siegel

A few weeks ago we hosted an event to celebrate the launch of our Venture Partner, Robert Siegel’s new book entitled, THE BRAINS AND BRAWN COMPANY: How Leading Organizations Blend the Best of Digital and Physical, published by McGraw-Hill. The event was held outside on the deck of the Piva Capital office in San Francisco, where we were able to take in the great view while enjoying food, drinks and great company.

In addition to being a Venture Partner at Piva Capital, Rob is a lecturer at the Stanford Graduate School of Business, where he teaches graduate classes, Executive Education classes, and does extensive research on companies like Google, Schwab, AB Inbev, Stripe, and 23andMe. He also sits on the boards of several startups, was a several-time entrepreneur, and previously held executive positions at GE and Intel.

In his book, Rob argues that while digital is important, it is not a panacea. Today’s most successful companies blend the best of digital “brains” and physical “brawn,” and in his book he outlines ten key competencies, five of each. He also shows leaders how to put the framework into action by becoming Systems Leaders, based on the popular Stanford course he teaches with former GE CEO Jeff Immelt.

During the event, Rob was interviewed by Benjamin Pimentel, a veteran reporter with Protocol who has covered some of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch, and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond.

Highlights of the Interview

Below are some highlights from Ben’s interview with Rob on key components of his book.

Ben: What are the key elements that are important for companies in terms of adapting to this new world?

Rob: First, it starts with data. Having good data science, good data engineering is critical. But that’s only the ticket to the dance. What we found is that the better organizations we studied were the ones that are more thoughtful about how to use data. So in the book, I talk about Charles Schwab, in the context of data usage.

Charles Schwab is an organization that manages almost $8 trillion of assets and most people don’t think of them as a data company. And yet, if you go to the Schwab site and fill out the section called life events, at that moment in time, Schwab knows something about what’s going on in your life. And so the question that Schwab asks is, “What does the customer want us to do with this data?” Not just, “What can we do, but what should we do?” You will find that it’s really important for companies to have a mental and emotional North Star, and understanding what your customers want you to do with their information. And if you juxtapose that to Facebook, all of us probably believe they might have great data engineers, but that they will use our data for their benefit, and not necessarily for our benefit. Organizations need to be thinking about not only how they can be competitive with artificial intelligence, machine learning, etc., but also how do they make sure they don’t lose the customer-first model.

Ben: You mentioned Facebook, they’ve had a hard time since 2016, but Amazon uses data in a way that shuts out the competition.

Rob: So what Amazon has done is that they give us what we want, and we don’t think they’re abusing us. You don’t see the visceral hate for Amazon from the consumer side that you see towards Facebook.

Amazon Prime has hooked us and we all benefit from it. You never have to leave the house! I think that if companies have anti-competitive practices and use data to hurt competition, the government always wins, and Amazon needs to be careful about that as the government’s recent investigations show. It’s only a question of when the government’s going to come after you if you get as much power as Amazon has. And by the way government relations — that’s something that a lot of incumbent organizations tend to be very good at. Some of the larger incumbent companies that have been around a long time, know actually how to work with the government, and they know that regulation is likely to happen given their size and scale. Working with governments is going to be an absolute requirement across every company across every industry for the next several decades. Global geopolitical conflict is going to be driven by economic ideology, not political ideology for the next two to three decades. And business leaders are at the center of this conflict.

Ben: If you were to name maybe two or three of these legacy companies that have been able to adapt very well, to the age of big data of high tech, what would those be?

Rob: I’ll start with a Bay Area company, Kaiser Permanente, an $80 billion vertically integrated health care provider that uses tech aggressively not just for cost benefits, but also to treat customers better. Bernard Tyson, who, unfortunately, passed away a year and a half ago, was one of the greatest leaders that I ever had the privilege of meeting. He talked a lot about understanding how to use tech to serve their members better.

In the retail space, Best Buy, Target and Home Depot have also done a very good job of blending digital and physical. These are three examples of retail companies that you could have imagined would have gone out of business, and on the contrary, have blended digital and physical very nicely.

The last one I’ll highlight is Johnson and Johnson. J&J is a pretty diversified medical device, pharmaceutical, and healthcare company. Their Credo guides their ability to kind of go through good times and bad times. They know who they serve and why they serve them. With all of these companies, if they run towards the disruption that is affecting their businesses, they have a good chance to be around for a longer time. Dinosaurs are not necessarily all doomed, I think is one of the things that we want people to take away from the book.

Ben: Another classic example or comparison is Daimler’s approach versus Tesla.

Rob: Elon Musk is the kind of business leader that comes around once every 100 years. Daimler, on the other hand, is in a world of hurt, because they did the brawny (physical) side well but somehow completely missed how people are wanting to use their vehicles digitally. Daimler wanted to own the customer experience and what people saw on the dashboard. And yet, we all want to mix our own Spotify playlists from our phones and use Waze through our phones. And so they are way behind the ball designing the kind of cars that delight customers. And Tesla has done a much better job with a digital-first mindset.

Key Takeaways

We asked Rob for the three key takeaways from his book and his thoughts for the future. Here is what he shared:

• Going forward, every product and company will need to combine digital and physical;
• Incumbents are not doomed and disruptors are not ordained; and
• A new type of leader, a Systems Leader, will be required to guide organizations in the next couple of decades.