LUMINARY magazine Dec15

LINKEDIN CEOJEFF WEINER

LUMINARYEnlightening Business

PROFESSIONALGRAPH OF LINKEDIN LINKEDIN FROM SOCIAL NETWORK TO AN ALL-IN-ONE PUBLIC RESUME CRAFTING SERVICE, BUSINESS RECRUITING TOOL AND CONTENT PLATFORM.

35 RESTRUCTURE BEFORE IT’S TOO LATE

19 A DECISIVE DECADE?

39 INNOVATION AT GLANCE

The value of investments can fall as well as rise. You may not get back the amount originally invested. UBS 2015. All rights reserved.

Can I trulymake adifference?Do I invest in the world I’m in?

Or the one I want?

ubs.com/makeadifference

Together we can explore new and innovative waysof creating lasting positive change. Establishing sustainable portfolios that seek to maintain your values and your income.

So the right investments can help to improve the world.

For some of life's questions, you're not alone.

Together we can find and answer.

We think it's possible to do good and still do well.

LUMINARY | 05

CONTENTSDecember 2015/January 2016

CEOs are in the spotlight, constantly scrutinized as they 29 Raising Money To Support A Great Idea?

61 Ahead of the Game

Exclusive Interview with Jake SchwartzCEO General Assembly

39 Innovation at Glance

Four Reasons To Be Exhilarated About Tech Innovation

45 Tech Innovation

Immortality

30 Switzerland’s biggest banks to face more stringent regulations

introduce tough new regulations.

46 Insurance Industry

67 MENTAL HEALTH

66 Eating a Healthy Diet May Reduce Brain Shrinkage

19 A Decisive Decade? CEOs are in the spotlight, constantly

Switzerland to

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BUSINESS23

BUSINESS

14 Astex Pharma Demonstrating Open Innovation

11 Global News Stand

12 Concept Of �e Minimum Viable Product

Astex Pharmaceuticals believes that open innovation in the pharmaceutical industry can invigorate internal research groups and inspire more strategic collaborations

Your MVP isn't really viable until your potential customers say so

MANAGEMENT20 Employees ManagementSeven ways to manage your most motivated and talented employees

FINANCE30 Switzerland’s biggest banks to face more stringent regulations

Reliance on the �nancial sector has led Switzerland to introduce tough new regulations.

35 Restructure Before It’s Too LateMany companies get bad press when they announce they are to restructure - but such reorganisation can be a very positive step

TECHNOLOGY49 Tech & ScienceReal-life 'Tractor Beam' can levitate objects using sound waves

INNOVATION

What all companies must know about innovation, ( JAMA SOFTWARE)

52 Business Innovation

Chemicals in personal products may stimulate cancer more than thought

HEALTH65 Life Style

Q&A

Managed print services is increasingly becoming a full-service data industry. key player Konica Minolta is commi�ed to leading the way...

61 AHEAD OF THE GAME

LUMINARY | 09

�e holiday season is a time for gratitude and, here at LUMINARY, our deepest thanks of all go out to you. A�er all, it’s your support that makes our work possible. Your input allows us to stay nimble and meet the evolving needs.Despite worries about the global economy and volatile stock markets, US consumers appear more con�dent than analysts had expected, but industrial production in the country fell for the second month in a row.Meanwhile hopes that the US Federal reserve would decide not to raise interest rates this year a�er all helped stock markets end the week on a positive note.In the UK, Bank of England policy maker Kristin Forbes said in a speech in Brighton that fears about emerging markets were overdone, and the next move in UK interest rates was up - and not far o� at that. Not all of her colleagues at the Bank agree, however.Eurozone slumped back into negative in�ation, pu�ing more pressure on the European Central Bank - which meets next week - to extend its quantitative easing program.Tesla Motors delivered the �rst batch of its new Model x car to customers, two years behind schedule. Volkswagen's new chief executive, Ma�hias Muller, presented to a board commit-tee the �rst �ndings of an internal investigation into the carmaker's cheating of emissions tests.

It was also another bad week for Glencore, which saw its share price fall by a third a�er investment-bank analysts issued grim warnings about the mining and commodi-ty-trading company's balance-sheet if commodity prices do not rebound. Investors are worried by Glencore's high levels of debt. Its insistence that it is "operationally and �nancially robust" and has access to strong lines of credit sent its shares up again.�e oil industry absorbed Shell's decision to abandon plans to drill in Arctic seas o� the Alaskan coast, because the results of initial tests were disappointing.

Ralph Lauren decided to call it a day as chief executive of the American fashion house he created in 1967, which is best known for Its Polo label. Who is the best CEO in the country? According to one rating service, its Je� Weiner, CEO of social networking giant LinkedIn. In 5 years of running the company, Je� has inspired his team, the industry, and Wall Street, and he has helped build LinkedIn into a $25 billion powerhouse. An exclusive interview with Je� Weiner read on page 23.GA the world’s most innovative company of 2015 in the education sector, GA is recog-nized for teaching the skills workers need now based in New York with 13 campuses worldwide, �nd out more details about Jake Schwartz 36 year old Co-Founder and CEO of General Assembly (GA) Page 39

By James Galbraith [email protected]

EDITOR'S NOTE

WE ARE THANKFULFOR YOU

LUMINARY

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Volkswagen's new chief executive, Matthias Muller, presented to a board committee the �rst �ndings of an internal investigation into the carmaker's cheating of emissions tests. Mr. Muller was the boss of Porsche, a subsidi-ary of VW, prior to the resignation of Martin Winterkorn as Volkswagen’s CEO over the a�air, who was placed under criminal investigation by German prosecutors vw also recalled up to um vehicles worldwide to re�t the emission-cheating software. It has lost around a third of its market value since the scandal broke.

HOW THE MIGHTY TUMBLE It was also another bad week for Glencore, which saw its share price fall by a third after investment-bank analysts issued grim warnings about the mining and commodi-ty-trading company's balance-sheet if commodity prices do not rebound. Investors are worried by Glencore's high levels of debt. Its insistence that it is "operationally and �nancially robust" and has access to strong lines of credit sent its shares up again.

Alcoa said it would split in two, a move that had been long anticipated given the decline of aluminum and other commodity prices. The company's aluminum and mining divisions will retain the Alcoa logo; its metal-products business, which serves the car and aerospace industries, will go by a new name that has yet to be decided.

The oil industry absorbed Shell's decision to abandon plans to drill in Arctic seas o� the Alaskan coast, because the results of initial tests were disappointing. Environmentalists, who had rallied against the decade-long project under the banner of "Shell No" were delighted. But it is one of the most costly failures to date in the energy industry, for which Shell will take a big write-down, leading to many job cuts in Alaska.

Investors gave a thumbs down to the announcement that Energy Transfer Equity is to take over Williams in a $37.7 billion transaction that creates one of the world's biggest oil-pipeline and energy-infrastructure companies. In June Williams rejected a much higher o�er from ETE, but, like others in the industry, its share price has since fallen.

Valeant's share price plunged by 20% after Democrats in Congress asked the drug company to submit evidence to their investigation into big price increases on certain pills. The issue has gained traction in America Okra Biotech Company talked of raising the price of one of its drugs by 5%. The Democrats want to question Valeant about price rises of up to 525% for two treatments for heart disease.

NEW DESIGNS

Ralph Lauren decided to call it a day as chief executive of the American fashion house he created in 1967, which is best known for Its Polo Label.

His successor is Stefan Larsson, a Swede who made his mark at the more downmarket H&M and is credited also with reinvigorating Gap's Old Navy brand. Mr Lauren is staying on as executive chairman.

In a surprise move India's central bank made a hefty cut to interest rates, reducing its main rate by half a percentage point. to 6.75%. It is the fourth, and biggest, cut this year. Although in�ation is stable, the central bank is worried that India's far from robust economy could be hit by weakening global demand.

The euro zone dipped back into de�ation. as consumer prices fell at an annual rate of 0.1%(excluding energy prices, they rose by 1%). In�ation has been below the European Central Bank's target of 21, for more than two years now; it will decide at its meeting on October 22nd and whether to increase the Euro 60 billion ($67 billion) in asset purchases it makes through its quantitative easing program me each month.

The European Union formally released its proposals for a capital markets union with an aim to stream line myriad rules on investment and lending to business among the EU’s 28 member states. Many European startups, for example, commonly have to turn to American funds when they expand their activities and need more investment. The EU plan was generally welcomed by banks and investors, but getting 38 countries to agree on what the initiative should actually deliver will be a tough task.

DRIVING THE FUTURE Tesla Motors delivered the �rst batch of its new Model x car to customers, two years behind schedule. The pioneering electric-car company thinks the Model x. a sport-utility vehicle, will help It reach its target of selling half a million an worldwide by 2020, ten times more than it expects to sell this year. It has opened a factory in the Netheriands, its �rst in Europe, to speed deliveries of its Model s saloon to European buyers. But in Denmark the government said it was ending a tax break on electric cars, which will up the price of a Tesla by 18o%.

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GLOBAL NEWS STAND

BUSINESS

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Eric Reis and Steve Blank’s concept of the minimum viable product (MVP) has become the philosophy thousands of entrepreneurs across the world subscribe to when developing products and ideas. The problem many of these entrepreneurs run into is they don’t e�ectively test the viability of their MVPs.

THE IMPORTANCE OF STRINGENT TESTINGNine out of ten startups fail. That’s a 90 percent failure rate. Pretty sobering, eh? Well, that number is a bit misleading. Roughly 42 percent of startup founders claim their ventures failed as a result of “no market need” for their product or service. Nearly half of all failures are the direct result of learning their irrelevancy the hard way.Reis and Blank are always quick to point out that failed startups “begin with an idea for a product that they think people want.” They then spend months perfect-ing the product without ever turning the “idea” into a tangible product that can be shown to customers, tested and re�ned.

YOUR MVP ISN'T REALLY VIABLE UNTIL YOUR POTENTIAL CUSTOMERS SAY SO

Only when the startup fails do they realize the product was doomed from the start.This can all be �xed with stringent testing and basic prototyping. The MVP is a basic version of the end product that can be tested. You can gauge whether the product is likely to succeed based on response from your target market.A sloppy MVP may misrepresent your end product and skew the testing results. So, �rst and foremost, focus on creating an MVP that’s both “minimum” and “viable.”

3 WAYS TO TEST YOUR MVPOnce you have a quality MVP you are con�dent to stand behind, it’s time to start testing. Here are some methods you’ll want to try:Interviews and focus groups: The more people you talk with, the more accurate your results will be. Start with interviews and focus groups. There’s a lot of value in using the Internet for quick feedback, but nothing beats face-to-face interac-tions. Every penny you spend on

interviews and focus groups will be well worth it in the long run.Social monitoring: Social media is an excellent tool for gauging market receptiveness to your MVP. Run a social campaign and send out free prototypes, then follow up with users and listen to what they’re saying. You will get an accurate idea how the product will be received.A/B split testing: If you’re �nding resistance among your test groups, it’s important that you get to the bottom of the issue. While it’s possible users don’t like the entire product, it’s more likely they �nd a particular aspect or element undesirable. Use split testing to isolate these problems.Testing is key to a successful MVP. In the end, accurate prototyping and thorough testing will help you determine whether your startup is headed for success, or in need of a pivot. Just leverage the tips mentioned in this article and you’ll be better o� than 42 percent of startups.

ANNA JOHANSSONCONTRIBUTOR

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ASTEX PHARMA DEMONSTRATINGOPEN INNOVATION Astex Pharmaceuticals believes that open innovation in the pharmaceutical industry can invigorate internal research groups and inspire more strategic collaborations

Used originally in the 1960s to describe a situation in which knowledge and expertise is imported and exported by a company to foster internal innovation and expand opportuni-ties for its products, open innovation has made a return in recent times. Embraced, largely by R&D organizations, to foster transparent interactions between companies, the concept has done a great deal to inspire the very latest industry develop-ments.The role of open innovation within the pharmaceutical industry has been immense the industry has su�ered a signi�cant decline in productivity in the last 25 years, although recent data indicates an improvement in the last few years.

One of the key reasons for this decline was that internal R&D groups were unable to deliver the same output of new medicines as during the golden decades of the 1970s and 80s.Many industry observers cited a lack of internal innovation as a contributory factor to this reduction in productivity, and encouraged large pharmaceutical companies to embrace the wider biotech and academic ecosystems. As a result, open innovation has now taken hold in the vast majority of pharma-ceutical companies, and has invigorated internal research groups as well as providing signi�cant opportunities for both biotech companies and academic institutions to establish strategic partnerships with big pharma.

BUSINESS

Historically it has been di�cult to secure funding from public market; there has been limited investor appetite for biotech stock in the UK, given the size and sophistication of the London market. Some observers believe it is a legacy left over from the failure of some of the early UK biotech companies, such as British Biotech in the 1980s, and the resulting losses made by investors. However, others are of the opinion that London investors tend to have a lower appetite for risk compared with US investors, which explains a more general reluctance to fund technology companies. Whatever the reasons, it is clear that this has held back the development of UK biotech �rms, and for now some of the most promising UK companies are choosing to launch their IPOs on US exchang-es such as NASDAQ. However, in the last two years there has been some cause for optimism, as several biotech companies have successfully gone public in London, with one called Circassia raising a record amount of �nance.

In the �rst two rounds of funding Astex raised about £45m in total, one of the largest VC funding rounds in Europe at the time. Later on were also able to generate signi�cant �nance from a range of strategic partnerships that Astex established with major pharmaceutical companies, such as Johnson & Johnson, Novartis, AstraZeneca and GlaxoSmithKline, who wanted to access our technology platform. These deals typically involved multi-million dollar upfront payments, in addition to downstream milestones and royalties on future marketed products originating from the partnerships, also accessed smaller amounts of �nance from research charities, foundations and organisations such as the Wellcome Trust.

Astex pioneered a novel approach called fragment-based drug discovery to discover new small-molecule medicines. This approach has certain advantages over the conventional methods that most big pharma companies typically use to discover new drug candidates, but requires sophisticated biophysical techniques. One of key goals is to maintain Astex leadership position in this technology by developing new methodology, as there are now many competitors in this area. Furthermore, Astex also continue to focus on primary therapeutic area of oncology, in which we are discovering multiple new drug candidates which one day may become e�ective medicines for patients with cancer. More recently, Astex have begun to work on neurodegenerative diseases such as Alzheimer’s and dementia, a major challenge for our ageing society. In both oncology and neurodegenerative diseases, pursuing a strategy of trying �rst to understand the molecular basis of the disease and then developing a targeted therapy which can arrest its progression. This approach is generally referred to as ‘precision medicine’.

The most exciting thing to come from this research so far is collaboration with Novartis, in which they have developed a drug candidate, called ribociclib that has shown signi�cant promise in clinical trials of patients with breast cancer. Indus-try analysts speculate that this may be a future blockbuster drug, which could help many cancer patients. Clinical trials performed by Novartis have shown that ribociclib is a highly targeted anti-cancer agent, which has reduced tumors in patients with breast cancer when used in combination with other oncology drugs. Assuming the development of riboci-clib continues well, Novartis is planning to �le for market approval in 2016.

Cancer is a disease that involves some normal cells in the body losing their ability to control their growth. Rapid growth and division of these cells results in tumors, which eventually damage the surrounding organs and often cause fatal outcomes. In the past, there was a very poor under-standing of how and why these cells lose the ability to regulate their growth. However, in the last 30 years, funda-mental research has provided answers to these questions and revealed the mechanisms that result in cancer.Targeted therapies are designed speci�cally to block these mechanisms and have shown spectacular e�cacy against some types of cancer, such as melanoma.

As a private company, Astex has turned to alternative �nanc-ing means as funding from public sector is almost nil thus was largely �nanced by European and US-based life science venture capital �rms, such as Abingworth, Astex founding investor.

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Better

interactions

between

pharmaceuti-

cal companies

and third

parties have

inspired some

of the latest

industry

advances.

Nowhere is

this better

illustrated

than in the

case of Astex

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Astex now operates as a wholly owned subsidiary and is a key component of the Otsuka organisation. Astex future is bright, as they begin to apply there leading fragment-based drug discovery technology to new therapeutic areas, such as neurodegeneration, in addition to ongoing commitment to oncology.

Furthermore, there location in Europe’s premier biomedical cluster, Cambridge, Astex will be able to play a central role in open innovation relationships with some the world’s leading academic institutions.

Astex Pharmaceuticals – structural biology revolutionises drug discovery

Another area of great excitement in oncology drug develop-ment is immuno-oncology. Here, drugs are being developed that are designed to stimulate the body’s own immune system to �ght cancer cells, and recent examples have shown very impressive results with some types of cancer.

One of the main advantages of targeted cancer therapies over traditional chemotherapy is that the side e�ects are signi�cantly reduced. Chemotherapy is not designed to target only cancer cells and so often kills many healthy normal cells, which can result in devastating side e�ects for the patient. Chemotherapy can still be very e�ective against some cancer types, but the side-e�ects need to be carefully managed. There are also some side e�ects associated with targeted therapies, but these tend to be milder in compari-son.

In 2013, Astex was acquired by Japanese pharmaceutical company Otsuka for $886m, which was the seventh-largest global M&A transaction in the biotech sector that year. The primary driver for Otsuka in this deal was Astex’s leading position as a drug discovery technology pioneer, in addition to portfolio of cancer drugs.

NEWS RELEASE

2015 Astex Pharmaceuticals Announces Orphan Drug Designation for Guadecitabine (SGI-110) in the Treatment of Acute MyeloidLeukemia

2015 Astex Pharmaceuticals Announces Publication of Key Clinical Data for Guadecitabine (SGI-110) in �e Lancet Oncology

2014 Astex Pharmaceuticals Presents Final Results of Phase 2 Study of SGI-110 in Treatment Naive Elderly Acute Myeloid Leukemia at the European Hematolo-gy Association Meeting

2014 Astex Earns Milestone Payment on Initiation of Phase 3 Study

2013 Astex Pharmaceuticals to Present at AACR-NCI-EORTC

2013 Otsuka Pharmaceutical Completes Acquisition of Astex Pharmaceuticals

Open innovation has now taken hold in the vast majority of pharmaceuticalcompanies, and has invigorated internal research groups as well as providing signi�cant opportunities for both biotech companies and academic institutions

BUSINESS

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A DECISIVEDECADE? CEOs are in the spotlight, constantly scrutinized as they steer �rms through signi�cant transformations. If this is what they face today, who knows what they can expect in 2020

going and lead it there by example – to coaching and a�liative styles, which value the contribution of teamwork to end goals.The majority of the executives who took part (64 percent) also believe CEOs of European service providers should be driven, in 2020, by a passion for innova-tion, and would provid the most value to the organization through ideas and strate-gy (�rst) and innovation (second), ahead of �nancial governance (third), good corporate governance (seventh), and good operational management (ninth).

What leadership styles, qualities, skills and approaches will successful CEOs need to take their companies into the next decade? These were the questions that a new global study – commissioned by Amdocs with strategy consultancy Telepresence – sought to answer. In-depth interviews with CEOs and other senior management executives at the world’s top-tier service providers, includ-ing some of the largest in Europe, provid-ed insights that uncovered views and forecasts for how CEOs will be running their organizations in 2020.The local industry believes collaborative styles will be needed to allow service providers to scale into the future.

Management styles are changingThe typical CEO of today has worked in di�erent countries, and has held at least three di�erent roles at their current company. However, professional diversity may not be enough to be e�ective in 2020. The survey found that in Europe, 100 percent of respondents who expressed an opinion believe that current CEO management styles need to change for them to remain successful just �ve years from now.

The local industry believes collaborative styles will be needed to allow service providers to scale into the future. This means moving away from today’s favored styles of visionary and pacesetting leader-ship – in which the CEO is expected to know where the company is

C-suite transformationIn Europe it’s not just CEO leadership styles that will change. New areas of focus and lines of business are already opening new C-level opportunities. Respondents felt that today, the most commonly added roles hold responsibility for commercial activities (�rst), and customer experience, digital and people (tied second). Execu-tives predicted that, in 2020, the most commonly added role will still be for customer experience (�rst), followed by big data (second), digital (third), and cloud (fourth).

Today’s C-suite team is likely to be the breeding ground for future CEOs. So it’s interesting that 64 percent of senior executives in Europe believe that the CEO in 2020 will most likely come from a CFO background, implying that the former is expected to drive innovation while keeping the numbers right.

Roadblocks to successThe top barriers to Europe’s CEO success by 2020 will be ‘no clear strategy’ (�rst) and ‘lack of resources’ (second), ahead of lack of ideas (third), and competition a distant ninth. Reinforcing the need to overcome the challenge of executing innovative ideas, executives in Europe believe that, by 2020, the most important innovation skill the future CEO will have is the ability to create organizational structures that support innovation and change.So, it’s unsurprising that the region’s senior executives plan to invest in outsourcing strategies to supplement internal resources insupport of innovation investment impera-tives. In 2020, CEOs in Europe are most likely to invest in customer experience (�rst) and cloud services and networks (tied second). To drive change, it is believed that a blended approach of both outsourcing and insourcing will be required. For example, more than half are expected to outsource at least some support for cloud services (82 percent) and digital services (64 percent).

In what has been termed ‘the new world of customer experience’, customers expect to be inspired and excited by a constant drum of new services, delivered in an intelligent manner through person-alization and contextualization, and shaped by a dynamic quality of experi-ence, regardless of device or network. All this needs to be accomplished in a manner that accelerates business value for the service provider, speeding up time to market, optimizing business processes, and reducing costs. As players continue to consolidate, innovation is increasingly challenged by back-end system complexi-ty, impacting service providers ability to deliver on customer expectations.

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MANAGEMENT

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Any manager who tells you that motivating the troops is the �rst thing on his mind is lying. That’s because managing people is never a job title and it’s rarely a priority. Like it or not, that’s just the way it is.While managers do have direct reports, their job is to manage a function of some sort: marketing, �nance, HR, product develop-ment, operations, whatever. And that’s usually the way their goals and priorities are written. Getting the job done is top of mind. Managing people is not.Don’t get me wrong. The best managers �gure out how to walk and chew gum at the same time. They know that the hands-down most e�ective way of accomplishing their goals is to �gure out how to motivate their people to work together like

a well-oiled machine, so that is a priority. It’s just not the priority.And while some do have a knack for getting their

folks so �red up they’ll work tirelessly and ask for more, most don’t. They got promoted for their functional

ability, not because they’re good managers. Don’t think of that as a bad thing; it’s just the way it is. Some learn in time, others not so much. It’s just the natural order of things.

In any case, if you manage talented people, or plan to someday, it’s a good idea to understand what really excites them about

their work and what makes them proud to be part of a company. Granted, everyone’s di�erent, but most achievement-minded folks get o� on more or

less the same things. A CHANCE TO MAKE A REAL DIFFERENCE

It’s funny to read about the importance of employee engagement and how Millennials want jobs where they can have a big impact, like those are new concepts. They’re not. Those

same factors have motivated go-getters forever. I should know. I was once one of them. A MERITOCRACY WHERE THEIR EFFORTS AND TALENTS ARE RECOGNIZED AND REWARDED

Those who reach for the stars can’t have limits on how high they can climb. Nobody ever thinks about how former CEOs of Micron (Steve Appleton), Verizon (Ivan Seidenberg)

and so many others literally started at the bottom and worked their way up. It inspires up-and-comers to know the opportunity is there.

EMPOWERMENT TO TAKE ON AS MUCH RESPONSIBILITY AS THEY CAN HANDLE AND THE TOOLS TO ACCOMPLISH THEIR LOFTY GOALS

For overachievers, a little responsibility is a dangerous thing. It’s like a gateway drug. They always want more. If you want them to stick around and help your company to become wildly successful, be smart. Don’t just give it to them; empower them to take the initiative and take

responsibility.AN ENVIRONMENT THAT CHALLENGES THEM TO REACH NEW HEIGHTS

AND MENTORS TO HELP THEM DO ITB e s i d e s responsibility, everyone who wants to go places in life wants a challenge. Once the challenge is gone, they’ll be next. That’s why startups are such a big draw for success-oriented people. They get to be big �shes in little ponds and wear lots of new hats. If nothing else, startups are characterized by constant challenges.EXCEPTIONALLY COMPETENT AND DRIVEN MANAGERS WHO WORK HARDER THAN THEY DOFew things are harder for hard-working employees to do than leaving the o�ce while the boss is still there. Smart, ambitious people love working for like-minded bosses who walk the talk.A SUCCESSFUL, GROWING COMPANY THAT MAKES KILLER PRODUCTS CUSTOMERS LOVEEveryone wants to work for a winner or at least a growing company with great prospects. Being the underdog is �ne but you’ve got to at least have a shot at making it. Even when Apple was down, folks loved to work there, but I bet they love to work there even more now. There’s nothing like knowing you help make awesome products customers can’t live without.A PIECE OF THE ACTIONWhat I’ve always loved about the culture of the technology industry is equity. I got my �rst stock bonus as a young engineer at Texas Instruments and boy, did that motivate me. Nothing tells employees that you value them more than putting your money where your mouth is in terms of ownership. It goes a long way. While some of these tips are written for top executives with signi�cant control over how organizations are structured and employees rewarded, that’s OK. You may not be in the corner o�ce today, but if you play your cards right, you never know. Just remember, if it motivates you, it will motivate others like you.

WAYS TO MANAGE YOUR MOST MOTIVATED AND TALENTED EMPLOYEES

THE NAVITIMER 46 mm

A N I C O N J U S T G O T L A R G E R

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COVER STORY

JEFF WEINERCEO

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LUMINARY: You write these wonderful essays on management and being a CEO. One of the most popular was your lesson that the pitcher never wants to come out of the game. It’s your job as CEO, the manager, to come in and say, “Sorry, I’m going to take you out and replace you.” It’s obvious on the baseball field: you can’t hit the strike zone. What does it look like in the office?Jeff Weiner: Leaving the pitcher in the game is less about the pitcher missing the strike zone. It’s more about the arm tiring and the other team teeing off. If you remember the American League World Championship with the Red Sox — Pedro was up to the mound and it was very obvious his arm was tiring. And the Yankees were starting to get around on his fastball, and then the manager comes out and says, “Are you OK?” and he says, “Of course I’m OK.” It’s Pedro Martinez, one of the greatest pitchers in the modern era. And hit after hit, the Red Sox lost the game. I’ve been in business for roughly 20 years, and the entire time I’ve been managing people, not a single person has ever approached me and said, “I can’t do my job.” Not once. So the key is knowing what to do proactively. I think this is one we all learn the hard way, because we have the best interest of people at heart. We’re always rooting for people on our team. We also sometimes act, or don’t act,out of fear. We’re fearful over what people will think if we let that person go. We’re fearful of the morale hit. We’re fearful of the unknown. So we all just look away. And it will come back and bite you virtually every time.And so when you have to ask yourself whether or not someone’s doing the job the way you hope they’re going to do the job, you already know the answer. And it’s been my experience that at that moment you actually put them on the clock. You do it in the most compassionate and most constructive way you know how.But you give yourself and you give that person some kind of timeline where you say: “I’m going all in with you; I’m going all in. Here is where I’ve observed the gap exists between your current perfor-mance and what we need from you. And I’m going to be transparent with you all the way.And if it doesn’t work out,

we’re gonna figure out another role for you here hopefully, and if that doesn’t make sense, I’ll do everything I can to make sure you’re successful elsewhere."

LUMINARY: So you say that you set aside 90 minutes a day to think?Jeff Weiner: Up to two hours, yes. If you were to see my calendar printed out you would see these gray blocks, and it’s not a mistake. It’s done very much by design.

LUMINARY: Does it say, "Thinking," "Jeff Time"?Jeff Weiner: Jeff Time — it’s like the Seinfeld episode with Jimmy! It says buffer. I think as we evolve, there are two continuums that it’s very important we all navigate successfully in order to help scale the business. One is the difference between problem solving and coaching. Problem solving is much easier than coaching. Coaching takes a lot of energy. It’s exhausting, because you need to understand what the person’s about, their strengths and weaknesses, their hopes, dreams, and fears. And then you have to deliver messages in such a way that’s tailor-made for them so they can internalize it, and most importantly — this is where true scale begins to happen — they can start coaching people on their team to do it.The other continuum is tactical execution vs. proactive, strategic thinking. And again, you’re a smaller startup, it’s all about building, it’s all about getting it done. Your competitors are going to be waiting for a misstep; they are waiting for you to become defocused. Thinking proactively and thinking strategically and starting to revise or refine your vision, your mission, your strategic objectives that takes a lot of time. So that’s where a lot of my buffer time goes.

LUMINARY: What are the most important strategic decisions you've made to contribute to the success of the company? Jeff Weiner: One is defining the core of the company. I remember we were in the process of recruiting our first

PROFESSIONALGRAPH OF LINKEDIN Linkedin From Social Network To An All-in-one Public Resume Crafting Service, Business Recruiting Tool And Content Platform.

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independent board member and I was interviewing Leslie Kilgore, who at the time was the CMO of Netflix. She became our first independent board member.She's amaz-ing. She said: "So tell me about LinkedIn. How do you describe the company?"And I gave an answer and I thought it was a pretty good answer. She said: "That sounds pretty good, but that sounds like a lot of stuff. Let me ask it a different way. If you could only build one $1 billion business, what would it be?" Came back to the office, and I ended up on the whiteboard, and I drew a target. And above the target I drew our core value proposi-tion, which was connecting talent and opportunity at massive scale. [Later, I said:] "Hiring solutions. Let's make that our first $1 billion business." I think that was an important decision.

LUMINARY: You are the highest-rated CEO. HIGHEST. Way above all these other guys we read about all day long at all these other companies that have even more, some-times, visibility than you do. Do you have a CEO coach, or did you?Jeff Weiner: No. LUMINARY: No?Jeff Weiner: Just bear in mind, I never aspired to be a CEO. Ever.LUMINARY: So you were shocked when Reid Hoffman said to you, "I would like you to be CEO."?Jeff Weiner: I wasn't shocked. I just, growing up, I never aspired to be a CEO. And when I was at Yahoo, I really didn't aspire to be a CEO. And I especially didn't aspire to be a public company CEO. There were things that I wanted to do, I was very purpose driven, but I wasn't title driven.

LUMINARY: If you go back to Silicon Valley in the 1990s, the wisdom was, “The crazy founder: sure they’re great to get the prototype up and running, and maybe they get a

few sales and so forth, but then you bring in the profes-sional CEO to run the place.” Now, thanks to Andreessen Horowitz and others, the prevailing wisdom is, “No, you keep the wacky, crazy founder as CEO and you hire a Sheryl Sandberg to represent to the world that they’re not quite so wacky and crazy.” You are a throwback to the 1990s because you didn’t actually found LinkedIn.Jeff Weiner: Is that a compliment, or just an observation? “You’re a throwback!”

LUMINARY: Yes! How do you look at that? Why does it work so well?Jeff Weiner: I don’t think there’s ever been an explicit discussion about where we sit along that evolution. I think it’s what worked best for us. And Reid is an extremely bright guy — very, very thoughtful. I don’t think he likes to make the same mistake twice. And before I got to Linke-dIn, Reid had been the founder and the CEO, and then hired the professional CEO. And they had a lot of mutual respect for one another, but it was challenging because Reid maintained the title of President of Product, report-ing to the CEO, who then reported to Reid, who was the Chairman and the Founder and the largest shareholder. They liked each other quite a bit. But it was just a really challenging situation. Hear the full exchange on Reid Hoffman:So the night before I started, I was interim president with all the responsibilities of a CEO. The night before I started, I called him and asked, “How is this going to work in terms of decisions? You’re in title the CEO, the founder of the company. I’m President. Which decisions would you like to make; which decisions would you like me to make?” He said, “This is very easy. It’s your ball, you run with it.”That was the entire discussion. And he went further, so this is a great example of how thoughtful Reid is. After I started, for the first 8-10 weeks that I was at LinkedIn, he

LINKEDIN EMPLOYEES LOVE THEIR CEO FOR FOSTERING TRANSPARENCY

was out of the office for 6-8 weeks; he had scheduled travel. Because he knew no matter what we explained to people, in terms of my calling the shots, there was muscle memory there and people would go back to him. I just have a lot of respect for him and he's not only a mentor, he's become a very good friend.

LUMINARY: A very simple question: Is being CEO funda mentally different from being a manager?Jeff Weiner: Yes. The more people you're responsible for, the more your words and the way you communicate those words and your body language and essentially everything you do is taken into consideration by the team. You have to be that much more aware of the way in which you're coming across. And I think the best leaders maintain awareness of their environment and in real time can course correct. It doesn't matter if they're in a one-on-one, a staff meeting, an all-hands, or speaking to thousands of people at a keynote. They are always aware of the way they are being received. They can course correct so they can ensure that what they're saying is resonating and that it's bringing people together.

LUMINARY: One of the issues in the economy right now is wages are at an all-time low, while CEOs, senior managers and shareholders are making out like bandits.Jeff Weiner: I'm smiling because you have been all over this for years.

LUMINARY: And the average CEO pay now at Fortune 500 Companies has gone from 30 times the average employee to 350 times. You got a very nice raise last year — first of all, if anybody deserves it, you deserve it. It is a huge number, though. My question is: How do you decide what's fair?Jeff Weiner: I think that's going to be different for every individual. I think oftentimes when determining compensa-tions for people, I think you have to draw upon your own experience, I think you have to draw upon.

Je� Weiner is an American business-man CEO of LinkedIn, a businessrelat-ed social networking website. He started with LinkedIn in December 2008 as Interim President. Weiner graduated from The Wharton School at the University of Pennsylva-nia in 1992 with a Bachelor of Science in Economics. Weiner served in various leadership roles at Yahoo for over seven years beginning in 2001, most recently as the Executive Vice President at Yahoo's Network Divi-sion. As EVP of Yahoo, he led a team of over 3,000 employees, managing products reaching over 500 million consumers. While serving Yahoo’s Network Division, he was part of the Search leadership team that directed the acquisition and integration of Inktomi, AltaVista, and FAST as well as the development of Yahoo Search Technology.He has worked at Warner Bros. as Vice President of Warner Bros. Online, developing its initial business plan. He was an Executive-in-Residence for leading venture capital �rms Accel Partners and Greylock Partners.In 2011 Weiner and Reid Ho�man were the U.S. Overall winners of the EY Entrepreneur of the Year Award In 2014, Weiner was recognized by LinkedIn employees via Glassdoor's annual survey as among "the top 10 CEOs at U.S Tech Companies".Weiner is also active in the non-pro�t sector, serving on the Board of Direc-tors of donorschoose.org and Malaria No More

PORTFOLIO IN BRIEF:

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RAISING MONEY TO SUPPORT A GREAT IDEA?CONSIDER FORMING AN ADVISORY BOARDBY MICAH JOHNSON

FINANCE

RAISING MONEYTO SUPPORT

A GREAT IDEA?

Sometimes, a great idea can run away from you if it becomes an immediate success -- especially if you do not have the proper plan in place to meet that instant demand for your product.

After seven years running a service business that helps large organiza-tions with multiple locations manage social media and online reputation, my company and I decided to make a leap into the mobile app world. I took the largest problem that didn’t have a solution -- one we run into on a daily basis -- and sketched out what a mobile app might look like to solve it. Distributing the sketches to our internal team helped me further refine the idea and overall direction of the app. With that refinement in place, I built a few Photoshop mock-ups, a sales presentation and started test marketing it to our current clients.

The initial results were in. The existing clients loved the concept. We took the development one step further and started building a beta version. One that would allow us to demo the app firsthand to anyone who was interested. This is where things got a little crazy. We set up a no-frills booth at an automotive trade show to demo an experience with our initial beta version of the app. The auto industry is our biggest no-brain-er target industry. During the two-day show, we ended up being one of the most trafficked booths and had a total of 400 dealerships interested in using our app.

At the same time, our test marketing wasspreading and, in total, we identified three industries that our app would work perfectly for, easily generating a high demand in all of them.

The problem? We didn’t have an app ready for that demand

At first we thought, “Let’s raise some capital! We can increase our develop-ment

team size and get this app built pronto!” However, as we reached out to potential investors, a few things became clear:

• We need money, yes. But at what cost?

• We need more insight and connec-tions into our target industries.

• We don’t need dumb money, we need a strategic investor that can provide these insights and connections.

Enter the advisory board

By building an advisory board, we’re accomplishing a few things right away:

• We are making connections in the major industries where we want strong market share.

• We giving incentive to our advisors to help us grow the business.

• We are leveraging advisors that have connections to smart capital and can be introduced through them as a third-party instead of seeking capital directly.

the solution to the problem and can buildan app to solve that solution, there is still a lot of knowledge we do not possess. Initial discussions with poten-tial advisors have already refined our revenue model and shaped the way we’re thinking about the rollout. This

kind of information is extremely valuable and helps us stay leaps ahead of any competition

Start building your advisory board

• Define the objective you want your advisory board to fulfill.

• Build your dream list of people you’d like on your advisory board. As tempt-ing as it is to ask buddies, it’s ideal to have a mix of representatives with experience in your target industries and the capital world. Left and right brains should help dissuade too much conformity.

• Contact every person on your wish list with an individualized pitch. Whether it’s a direct ask to be an advisor or some serious wooing, do your best to get them as excited about the offering as you are.

• Set the expectations for board mem-bers such as meeting frequency, bringing solutions with problems, honesty, transparency, etc.

• Establish the compensation (options, stipend, travel, meals, etc.)

• Create an advisory board contract that keeps everyone on the same page with expectations, term, compensation and confidentiality.

Finally, we don’t want to dread meetings with our advisory board. Hopefully these tips will help you avoid that too.

Switzerland’s financial regulatory body Finma has recently set out plans to strengthen the country’s banking regulations, including an increase in various different capital requirements. Since then, however, the head of the body has stated that the country’s two biggest banks – Credit Suisse and UBS – would be forced to further increase their capital requirements.

The regulatory requirements announced in mid-October will bring total capital requirement based on risk-weighted assets will also rise from 19 percent to 28.6 percent. The new rules will also require what banks hold of their exposures in going and gone concern capital to rise from less than five percent to 10 percent. New requirement for loss absorbing capital were also announced as part of the plan, meaning taxpayers should not have to bailout financial

that the rate would be at around 5.5 to six percent.

Switzerland’s economy is heavily skewed

towards its banking sector, leading to concerns that of the impact of another financial crisis. The country’s banking monoliths were heavily hit by the 2008 financial crisis, after losing large amounts on mortgage loans.

institutions should any new crash arise in the future. Further, Switzerland’s leverage ratio closer will be brought in line with global banking standards, at around five percent. The UK currently has a ratio of four percent, while the US’S sits at around five percent.

However, according to Mark Branson, Chief Executive of Finma, the leverage ratio will rise even further if the country’s banking giants expand their size further. “If the size were to expand, the capital requirement would gradually rise,” Mr Branson said in an interview, suggesting

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Switzerland’s biggest banks to face more stringent regulationsReliance on the �nancial sector has led Switzerland to introduce tough new regulations. UBS and Credit Suisse could see these become even stricter if they increase their market share

BY MARK BRANSON, CEO FINMA

“Switzerland’s economy is heavily skewed towards its banking sector, leading to concerns that of the impact of another finan-cial crisis”

“Once you go over certain thresholds, you come into the next bucket”

‘Company to be restructured’, ‘everything to be put to the test’, ‘restructuring necessary’ – companies that appear in the press under such headlines often have a hard, uphill struggle ahead of them. Nevertheless, such news also has its good side. The crisis-stricken company is taking action – trying to turn the boat around by means of a restructuring programme.Restructuring processes can be initiated either internally or externally. Internal initiators may be the

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FINANCE

executives (chairpersons, managing directors), the supervisory bodies (supervisory or advisory board members) or the owners (partners, shareholders). The basis for this is that the instruments required for detecting a crisis at an earlier stage are in place. As regards corporate planning requirements, the legal system only includes rudimentary rules. However, the requirements grow sharply with the onset of insolven-cy. It is, therefore, up to the stakeholders to lay down

RESTRUCTURE BEFOREIT’S TOO LATE

planning. This means linking various plans for areas such as sales, investments and staff, and transferring them to an integrated earnings, assets and liquidity plan. Only when all essential reciprocal influences have been included in the plan can a reliable and objective-oriented result be achieved. The degree of detail, as well as the organisation and intensity of the plan, depends on such factors as the company’s size and complexity. What » is decisive in this respect is that the objectives are precisely defined and that a specific plan of action (that can be monitored) is devised.

FLEXIBILITY WITHOUT RED TAPE

Companies in a crisis have many options for action – this not only applies to an out-of-court turnaround, but also to insolvency proceedings under the supervi-sion of a court.The US has been a role model in this respect for many years. If a US company is threatened by insolvency, they can file for insolvency proceedings pursuant to Chapter 11 of the US Bankruptcy Code. The debtor is then granted protection from creditors for a limited period of time, so that restructuring measures can be implemented. A company is allowed to continue business operations during such proceedings, in accordance with US insolvency law. Moreover, as a rule, a restructuring concept is devised together with creditors and examined by the insolvency court. The management may then apply for further loans to help them to get back on their feet. New creditors have priority above all over other lenders.England is also well known for the flexible options that the country’s insolvency law allows restructuring companies, without too much red tape. Two options from the variety of proceedings offered by English insolvency law are administration and company voluntary arrangements (CVA). A CVA is a kind of out-of-court settlement agreement between the credi-tors and the debtor company.

ABUNDANT ALTERNATIVES

In countries like France and Germany, governments

have adapted their insolvency law to the Anglo-Saxon

model and, by doing so, have given restructuring efforts a lot more weight. In Germany, the Law on Further Facilitating the Restructuring of Companies (ESUG) came into effect in March 2012. Obviously, the objective is to make it easier to turn around companies in a crisis. This can be achieved by in-court restructuring proceedings without an insolvency administrator, such as debtor-in-possession and protective shield proceedings. This means that the previous management is allowed to lead the company through the crisis itself – in each case supervised by an independent custodian and generally supported by a restructuring expert with insolvency experience.This is a good idea in principle. However, up until now, a large number of ESUG reorganisations have

MANY COMPANIES GET BAD PRESS WHEN THEY ANNOUNCE THEY ARE TO RESTRUCTURE - BUT SUCH REORGANISATION CAN BE A VERY POSITIVE STEP

THE EARLIER A COMPANY ADMITS A CRISIS, THE GREATER THE CHANCESOF A TURNAROUND. STILL, MANY ONLY ACT WHEN IT’S TOO LATE

The conventional external initiators of restructuring processes are lending banks. On account of the provi-sions in loan agreements (e.g. covenants) and banking supervisory regulations relating to risk exposure, banks only reach positive loan decisions if the borrower has proof of restructuring capabilities.However, while banks were previously reliable initia-tors of turnarounds – on account of harsh banking supervisory regulations – restructuring measures are now often initiated inconsistently or too late. One reason for this is that it is possible to resell non-per-forming loans. This means that restructuring process-es are no longer subject to banking supervisory regulations. Therefore, in more and more cases,

investors will have the task of initiating and main-taining restructuring processes, since merely continuing business as usual will not create any added value in the long run.

FINANCIAL AND STRUCTURAL REORGANIZATION

But what does restructuring actually mean in practice? Just as in the field of medicine, there are two approaches – you can combat the short-term symptoms or eliminate the causes of the illness over a long period of time. Intervention from outside is financial reorganization. This involves contributions from creditors and equity capital providers as a means of improving balance-sheet ratios. This can include deferment of payments, forfeiture of claims by creditors, and conversion of liabilities to shares. An alternative could also be a reduction in share

capital.Completely different instruments are used in a struc-tural reorganisation, which entails restructuring the entire enterprise internally. This means changing production and distribution processes, reorganising departments such as purchasing and operations, and reorienting the company’s strategy.In practice, the financial aspects often have greater clout. Without any doubt, the best thing that creditors and owners can do to ease the financial situation in a crisis is to sit down at one table. However, experience shows that such measures alone are often insufficient. Many a long-established company has once more been in the headlines just a few years after a suppos-edly successful financial reorganisation. The decisive reason for this is that, although these companies had less debt and fresh capital, they were still working with the same structures and a strategy that was only gradually changing.

ELIMINATING THE CAUSE

The main goal of restructuring is to eliminate the causes of the crisis. All measures are taken to ensure that a company will once more become competitive and generate a return which is normal for the respec-tive sector. Analysing causes is often a laborious task, since they are usually a combination of out-of-date production methods, entrenched distribution channels, a neglected control system and other factors. Only those who have the courage to leave familiar paths and reorganise structurally can get back on the road to success on a long-term basis. Without the help of external advisors, such an analy-sis often gets bogged down halfway to its goal. And even during the following implementation phase, it is easier for an external advisor to ease old structures away and modernise an enterprise.Restructuring only bears fruit after some time, when new processes take effect, new products are launched and new distribution channels are well established. It is not possible to restructure an enterprise compre-hensively within quarter of a year; the impact of a reorganisation based on structural criteria is only noticeable in the following quarters. The ability to implement efficiently is of crucial significance to the success of the restructuring programme.

THE PERFECT PLAN

Integrated corporate planning is crucial to the success of a restructuring programme. Up until now, it has often been the case that a plan was not devised until a crisis occurred. Many companies get into dire straits as a result of planning based on nothing but their own viewpoint, without deploying modern planning and early warning systems. The consequences are fatal – they recognise earnings and liquidity risks too late, come under time pressure, and can only concentrate on financial reorganization.Those who are really serious about restructuring their enterprise cannot avoid looking at integrated

suitable rules in the company’s memorandum and articles of association, management guidelines or information regimes, so that the causes of a crisis can be recognised well in advance.

failed. In reality, one in four proceedings in Germany ends in ordinary insolvency. The decisive reason for this is insufficient preparation and lack of time. Ideal-ly, a restructuring concept will already have been devised in advance and can provide a basis for a feasible turnaround plan. Anybody who begins from scratch on the day the application is submitted has very little chance of devising a convincing plan, in view of the complexity of the proceedings. In such cases, it is often only the deployment of outside experts that can help.

THE VALUE OF EXPERTISE

Business law firms are the right restructuring partners, provided they have a good feeling for business and the ability to implement efficiently. Only then is it possible to create an integrated corporate plan, a due diligence review and restructuring concepts, as well as to manage M&A processes. At the same time, law firms already know prior to insolvency what is crucial in a worst-case scenario.

ABOUT PLUTA

The company was founded in Ulm in southern Germ ny, more than 30 years ago. PLUTA is an expert in restructuring and turning around companies that have been affected by a crisis or insolvency. The law firm concentrates on legal advice and insolvency adminis-tration, together with consultation on and implemen-tation of restructuring programmes. With more than 35 appointed insolvency administrators and over 330 employees in more than 40 offices in Germany, Italy, Spain and Poland, PLUTA has been one of the leading restructuring companies for many years.The insolvency and restructuring business has become global like every other business activity. Enterprises have branches, customers or suppliers outside their own borders, so require cross-border advice. The international network BTG Global Advisory, of which PLUTA is a member, will in future increase its efforts to offer international services for cross-border restruc-turing. The network used to focus on insolvency administration, but nowadays important pre-insol-vency restructuring has been added to the range of services.BTG Global Advisory covers wide parts of Europe, North America and Asia. This year, newcomers to the network included GlassRatner Advisory & Capital Group in the US, as well as Rodgers Reidy with headquarters in Australia, Hong Kong, Malaysia and New Zealand. Farber Financial Group in Canada, Begbies Traynor in the UK, and Integrated Capital Services in India have all been members of the network for several years now. PLUTA supports the network from its offices in Germany, Italy, Spain and Poland.

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MANY COMPANIES GET INTO DIRE STRAITS AS A RESULT OF PLANNING WITHOUT EARLY WARNING SYSTEMS








THE PERFECT PLAN






ABOUT PLUTA


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THE PERFECT PLAN






ABOUT PLUTA


SUCCESS WILL BE WHEN THERE’S A VOWS COLUMN WITH TWO PEOPLE WHO MET HERE,

THAT’S MY DREAM, THAT’S COMMUNITY

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Portfolio in brief: Jake Schwartz 36 year old Co-Founder and CEO of General Assembly (GA), the tech education company based in New York with 13 campuses worldwide. Jake Schwartz grew up in Oregon, and had an early love of music. Switching from violin to �ddle to guitar, he found that music developed his thinking and communication styles, a tool which came in handy later as CEO of General Assembly, the compa-ny behind the learning facilities of the same name. �e company o�ers online and in-person courses and workshops in business related tools such, as market-ing, design, product development,

and data science. Under his leadership, General Assembly has scaled to nine cities (Berlin, Boston) Hong Kong, London, Los Angeles, New York, San Francisco, Sydney, and Washington, D.C.) in less than three years, working with more than 70,000 students along the way.Prior to founding General Assembly, Jake worked for Associated Partners, a multistage private equity �rm focused on telecommunications, media, and technolo-gy. He has a B.A. in American studies from Yale University and earned an MBA with honors from �e Wharton School. Schwartz, 35, is based in New York City.

TOGETHER WE’RE CREATINGA WORLD OF INNOVATION

GENERAL ASSEMBLY

CEO and Co-Founder General Assembly

INNOVATION AT GLANCE

Jake Schwartz

Q&A

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LUMINARY: Which technology sector excites you most?Jake Schwartz: I think self-driving cars are going to change how we live in fundamental ways and radically alter the real estate market. Sociologists talk about how the Interstate and the car are what created suburbs and sprawl. Once you don’t have to drive, all sorts of neigh-borhoods, towns, and lifestyles become attractive.

LUMINARY: Is business school necessary for entrepreneurs?Jake Schwartz: We get that question often at General Assembly because you could argue that business school is something we’re trying to disrupt. And it’s tricky because I’m also an MBA [graduate] from Wharton. I definitely use all the knowledge and experience I gained

to run GA now that we’re 200-plus person company, but I’m not sure how useful it was when we were getting started. I think if GA had been around when I was in my 20s, I wouldn’t have needed to go to Wharton at all.

LUMINARY: What is the best advice you ever received?Jake Schwartz: Howard Schultz once told me that if he could go back, the one thing he’d do differently at Starbucks was “hire the best HR person and give them a seat at the table.” That resonated with me in a huge way, and so I went back to GA and did just that. We hired our amazing Chief People Person, Jill Maguire-Ward. She’s a C-level executive, and she’s involved in all the major decisions at the company. It has literally changed our company’s course, and I don’t think we’d have been able to scale past 200 employees without her.

LUMINARY: What is one goal that you would like to accomplish during your lifetime?Jake Schwartz: When I was a little kid, my dad would read me science fiction books about interstellar travel, and it’s had a huge impact on me. I really want to be able to go up in space with him while we’re both still alive.

LUMINARY: What was your biggest missed

opportunity?Jake Schwartz: I almost started a crowd-funding business in early 2007, before Kickstarter or any of those companies took off. I saw the trend and could have ridden the wave, but I chickened out. It’s a great lesson in taking the leap when you see something like that coming.

LUMINARY: What do you do to live a balanced life?Jake Schwartz: I’m not sure I do live a balanced life. I try to read novels, work out, hang out with my girlfriend; things like that. But GA is a huge part of my life, and I’m glad that it is. That was what I set out to have my work be — a core passion and calling — and so I’m happy that it’s almost all-encompassing.

LUMINARY: What was your first job?Jake Schwartz: I worked as a tour manager for a singer-songwriter I knew who had a record deal in the late ’90s. It was awesome. I drove, met a lot of interesting characters, and sometimes I got to run the soundboard. Being in the music business is the ultimate entrepre-neurial experience — nothing happens if you don’t make it happen, and so you have to be a hustler. It makes

Silicon Valley startups look easy.

LUMINARY: What do you do for fun?Jake Schwartz: I’m always trying to learn a new musi-cal instrument. I’ve tried to learn the banjo a few times, and right now I’m working on it again. It’s hard, but it’s so different than my work that I find it really relaxing.

LUMINARY: What is one unique or quirky habit that you have?Jake Schwartz: Ask anyone on my team and I’m sure they’ll have a laundry list. One of the biggest is I’ve been on a no-carb diet, off and on, for several years, and it’s still a daily struggle. Sugar is like crack [cocaine] for me, and so it’s better if I completely abstain.

LUMINARY: If you could have one superpower, what would it be?Jake Schwartz: I’d love to be like [X-Men leader] Professor Xavier and have telepathic abilities. It would make running a company way easier.Correction: Due to an editing error, an earlier version of this story described General Assembly as a series of

GA THE WORLD’S MOST INNOVATIVE COMPANY OF 2015 IN THE EDUCATION SECTOR, GA IS RECOGNIZED “FOR TEACHING THE SKILLS WORKERS NEED NOW.”

“coworking-meets-learning facilities.” The company no longer offers coworking.

LUMINARY: Why so successful? Jake Schwartz: “Persistence and resilience. There have been so many times where taking an entrepreneur-ial path felt like the difficult, unsafe and risky way to go. It was my persistence that allowed me to overcome the uncertainty. I literally couldn’t get it out of my head.”

LUMINARY: No. 1 role model?Jake Schwartz: Richard Barth, CEO of KIPP and GA board member: “He is an incredible individual, manager and leader. I hope to someday be even close to as good as he is”

Luminary: we went to take a portrait of him reclining in his pod and he straightened up — “I’m supposed to start looking like a CEO,” he said, laughing.

“Success will be when there’s a Vows column with two people who met here,” he said. “That’s my dream. That’s community.”

He said universities have been intentionally slow to teach practical skills. On this he was animated.“There’s something relgious about it — when we think of college, we think robes, gothic — like a church. These diplomas look like indulgences,” he said. “Universities are selling salvation in way more of a symbolic than actual way.”

Q&A

LUMINARY | 42

LUMINARY: Which technology sector excites you most?Jake Schwartz: I think self-driving cars are going to change how we live in fundamental ways and radically alter the real estate market. Sociologists talk about how the Interstate and the car are what created suburbs and sprawl. Once you don’t have to drive, all sorts of neigh-borhoods, towns, and lifestyles become attractive.

LUMINARY: Is business school necessary for entrepreneurs?Jake Schwartz: We get that question often at General Assembly because you could argue that business school is something we’re trying to disrupt. And it’s tricky because I’m also an MBA [graduate] from Wharton. I definitely use all the knowledge and experience I gained

to run GA now that we’re 200-plus person company, but I’m not sure how useful it was when we were getting started. I think if GA had been around when I was in my 20s, I wouldn’t have needed to go to Wharton at all.

LUMINARY: What is the best advice you ever received?Jake Schwartz: Howard Schultz once told me that if he could go back, the one thing he’d do differently at Starbucks was “hire the best HR person and give them a seat at the table.” That resonated with me in a huge way, and so I went back to GA and did just that. We hired our amazing Chief People Person, Jill Maguire-Ward. She’s a C-level executive, and she’s involved in all the major decisions at the company. It has literally changed our company’s course, and I don’t think we’d have been able to scale past 200 employees without her.

LUMINARY: What is one goal that you would like to accomplish during your lifetime?Jake Schwartz: When I was a little kid, my dad would read me science fiction books about interstellar travel, and it’s had a huge impact on me. I really want to be able to go up in space with him while we’re both still alive.

LUMINARY: What was your biggest missed

opportunity?Jake Schwartz: I almost started a crowd-funding business in early 2007, before Kickstarter or any of those companies took off. I saw the trend and could have ridden the wave, but I chickened out. It’s a great lesson in taking the leap when you see something like that coming.

LUMINARY: What do you do to live a balanced life?Jake Schwartz: I’m not sure I do live a balanced life. I try to read novels, work out, hang out with my girlfriend; things like that. But GA is a huge part of my life, and I’m glad that it is. That was what I set out to have my work be — a core passion and calling — and so I’m happy that it’s almost all-encompassing.

LUMINARY: What was your first job?Jake Schwartz: I worked as a tour manager for a singer-songwriter I knew who had a record deal in the late ’90s. It was awesome. I drove, met a lot of interesting characters, and sometimes I got to run the soundboard. Being in the music business is the ultimate entrepre-neurial experience — nothing happens if you don’t make it happen, and so you have to be a hustler. It makes

Silicon Valley startups look easy.

LUMINARY: What do you do for fun?Jake Schwartz: I’m always trying to learn a new musi-cal instrument. I’ve tried to learn the banjo a few times, and right now I’m working on it again. It’s hard, but it’s so different than my work that I find it really relaxing.

LUMINARY: What is one unique or quirky habit that you have?Jake Schwartz: Ask anyone on my team and I’m sure they’ll have a laundry list. One of the biggest is I’ve been on a no-carb diet, off and on, for several years, and it’s still a daily struggle. Sugar is like crack [cocaine] for me, and so it’s better if I completely abstain.

LUMINARY: If you could have one superpower, what would it be?Jake Schwartz: I’d love to be like [X-Men leader] Professor Xavier and have telepathic abilities. It would make running a company way easier.Correction: Due to an editing error, an earlier version of this story described General Assembly as a series of

WE DON’T USE THE WORD ‘UNIVERSITY’ BECAUSE IT’S A LITTLE PRETENTIOUS,” HE SAID. “WE WANT TO MAKE SOMETHING A LITTLE MORE PRACTICAL

“coworking-meets-learning facilities.” The company no longer offers coworking.

LUMINARY: Why so successful? Jake Schwartz: “Persistence and resilience. There have been so many times where taking an entrepreneur-ial path felt like the difficult, unsafe and risky way to go. It was my persistence that allowed me to overcome the uncertainty. I literally couldn’t get it out of my head.”

LUMINARY: No. 1 role model?Jake Schwartz: Richard Barth, CEO of KIPP and GA board member: “He is an incredible individual, manager and leader. I hope to someday be even close to as good as he is”

Luminary: we went to take a portrait of him reclining in his pod and he straightened up — “I’m supposed to start looking like a CEO,” he said, laughing.

“Success will be when there’s a Vows column with two people who met here,” he said. “That’s my dream. That’s community.”

He said universities have been intentionally slow to teach practical skills. On this he was animated.“There’s something relgious about it — when we think of college, we think robes, gothic — like a church. These diplomas look like indulgences,” he said. “Universities are selling salvation in way more of a symbolic than actual way.”

TECHNOLOGYFOUR REASONS TO BE EXHILA�TEDABOUT TECH INNOVATION

echnology is advancing at a much faster pace today than it was 26 years ago. �e progress we will

experience in the next �ve to 10 years will de�nitely out-measure that of the last �ve to 10 years. We are just around the bend from life- and world-changing technolo-gies we can’t yet imagine.

Here are four reasons to be really excited about tech innovation, which is transforming everything:1. TECH FOSTERS COLLABO�TION AND CONNECTEDNESS.

Technology is blamed for causing less commu-nication and connection between people. Although innovations like smartphones and social media were built with the intention of bringing people closer together, in many ways they have done just the opposite.We are constantly on our phones, missing out on face-to-face interactions and distracting us from what’s happening in the moment. In fact, people between the ages of 18 and 36 check their smartphones an average of 43 times per day, according to research

published by SDL in 2014. But as technology becomes more advanced and more integrated into our lives via the internet of things, we will become more connected and social than ever before. �ere will no longer be physical blocks that we carry around and stare at while dining, cha�ing or working. Everything will be seamless and integrat-ed, which will yield unbelievable collabo-ration and connectedness.2. TECH IS IMPROVING MEDICAL CARE AND HEALTHInnovations in technology are radically

changing the way healthcare is delivered and monitored. Smartphones, tablets and wearables are increasingly being used and are allowing patients to take control of their own health.A�er all, seven in 10 U.S. adults already track at least one health indicator such as weight, diet or a symptom of a condition, according to a 2013 survey from Pew Research. In this new system, healthcare is evolving to become proactive rather than reactive, allowing patients to poten-tially catch and treat problems earlier.In addition, technology allows treatment to become more individualized. �ose

with rare and speci�c illnesses, disabili-ties and injuries will bene�t from new technology and the tailored treatments they allow. Providers, hospitals and health systems can personalize and track treatment plans to be�er �t the needs of individual patients, and patients can personalize their exercise regimens, diets and health goals.Not to mention that advances in science and technology are ushering in a new era of medical research that will likely cure many diseases in the coming decade or two.

Health tech and biotech have the power to transform the lives of millions, if not billions, of people in the not-too-distant future.

3. TECH INCREASES THE ABUN-

DANCE OF RESOURCES.

Technology is being used to spread food, wealth and other resources around the world. Agritech innovations are aiming to increase the amount of water and food supplies, as well as their quality. Crowd-funding websites are allowing charities to be�er connect with communities around the world, to raise the funds they need.

Innovations are allowing medicines and vaccines to be created and distribut-ed at lower cost, increasing access to necessary treatments around the world.Technology will show where the greatest needs are and then help to alleviate them. With the help of new innovations in technology, poverty, hunger and disease will decrease tremen-dously in the coming decades.

4. TECH GIVES US MORE TIME

Technology is increas-

ingly eliminating jobs. �e workforce is being automated, and robots can perform many jobs more e�ciently than humans can -- and this will contin-ue at an exponential rate.As more and more jobs are automated, and resources become abundant, we will have more time to grow our intellects and our hearts. We can focus on the arts, obtain knowledge and personally grow and help others. We will live less by the sweat of our brow, and more by the inspiration of the mind and heart.

LUMINARY | 45

TECH STARTUPS ARE PRODDING THE DINOSAUR That Is the Insurance Industry

Here’s a sentence you don’t read every day: Insurance is so hot right now.Entrepreneurs and investors have �nally woken up to the opportunity in the insurance industry. At $831.5 million, investment in insurance tech this year is already up nearly 10 times what it was in 2010.The opportunity has been staring entrepreneurs and investors in the face for years. The �rst insurance companies in the U.S. were started in the 1700s, and that cottage industry has grown into one of the biggest markets and sources of capital in the world. Premiums in the U.S. insurance industry total around $1 trillion, or approximately 7 percent of gross domes-tic product. On top of that, insurance companies invest nearly $7 trillion in assets.And here’s the kicker about all that insurance money -- it’s generated by millions of agents, with lots of paper, in process-es that look much the same way they did 30 years ago.In my previous life as a McKinsey consultant, I advised the top insurance companies on projects that were, at their core,

incremental. They were always about increasing the produc-tivity of the agent-based sales force, or improving the e�cien-cy of paper-based claims operations. In other words, what I was doing was putting the dinosaur on a diet and prodding it with a stick. What needed to be done was bring a whole new breed of animal into the insurance game.So I left McKinsey in 2013 to do just that and started a digital consumer insurance company, PolicyGenius. At PolicyGenius, we want to do for consumer insurance what TurboTax did for taxes: Make a complex and intimidating �nancial task easy enough to do it yourself online.While raising seed capital for my insurance tech company last year, the most common question I got from prospective investors was, “Why is now the right time for tech to disrupt insurance?” The obvious answer for those unfamiliar with the insurance industry is the A�ordable Care Act, which was signed into law in 2010. The law created exactly the kind of macro shakeup that attracts entrepreneurs. Indeed, since 2010, 56 percent of all insurance tech startups are focused on

LUMINARY | 46

JENNIFER FITZGERALDCONTRIBUTORCEO and Co-Founder of PolicyGenius

health insurance, either delivering new employer brokerage models (Liazon, Zene�ts, Bene�tter), new consumer broker-age models (Gravie, Stride Health) or even new health insurance (Oscar). These startups are pushing the brick-and mortar incumbents to deliver better services and providing much-needed options to consumers.Beyond the A�ordable Care Act, there are other forces at work that have opened the �oodgates, allowing creative entrepre-neurs to reshape the insurance industry more broadly. These are the market disruptions I see:

1. THE END OF AN ERAAmericans used to rely on their employers for retirement security. After 20 years of service, you’d get a gold watch and a pension to fund your sunset years. Then, in the 1980s, growing pension costs and a legislative change replaced the corporate pension with the 401(k) and gave rise to the modern retail investment and retirement industry.

That shift -- from employer to consumer responsibility -- is exactly what’s about to happen to insurance. Employer-spon-sored insurance is the legacy of an IRS ruling after World War II that allowed employers to deduct employee health insurance as a business expense and employees to receive that bene�t as nontaxable income. Sixty years later, we have a sprawling and bloated system, where the extra employer layer adds billions of dollars of cost and empowers employers to make intrusive decisions about their employees’ healthcare. Add to that, the cost of health insurance premiums growing at four times in�ation and workers changing employers far more often than they did 60 years ago, and you have a system that’s going to break.The cracks are already showing. The number of workers at small and medium-sized companies who get employer-spon-sored health insurance has steadily declined since 2000. The CEO of Aetna has called for the creative destruction of health-care and taking the employer out of the health insurance equation. Startups that can e�ectively step into that employer insurance void, the same way companies like Fidelity and Schwab stepped into the employer pension void, will enjoy a massive opportunity.

2. A CHANGING WORKFORCEIt’s no secret that the workforce is rapidly changing. The average worker changes employers every 4.6 years. And, more disruptively for insurance, more workers are �nding themselves outside the typical employer relationship. Spurred by on-demand services like Uber and countless “Uber for X” startups, freelancers and independent contractors are project-ed to grow from 42 million people to 65 million in the next 5 years.These workers need individual insurance (like health, disabili-ty and life) and business insurance (liability and property). Insurance companies, and the traditional insurance agent model, are ill-suited to serve the self-employed and provide

them with the advice and products they need to �nancially protect themselves and their families.Ask 100 freelancers how they navigate the insurance maze and they’ll all say same thing -- with tremendous di�culty. Easing that di�culty for them represents a tremendous opportunity.

3. AN AGING SALES FORCEMost insurance in the U.S. is still sold by human agents, same as it’s always been. But it won’t be for long. The average age of an insurance agent in the U.S. is 59, and one-fourth of the industry’s workforce is expected to retire by 2018. In other words, insurance companies are standing on a burning platform. And they’re already starting to feel the heat.For example, life insurance ownership is at a 50-year low, not because the need has changed -- in fact there’s a $20 trillion life insurance gap, but because the agent sales channel can’t reach the modern �nancial consumer. To their credit, insurance companies realize this reality, but the fact of the matter is that they can’t move as fast as startups can. So they’re investing in startups. Insurance companies have dramatically increased their direct investments in tech startups to the tune of $1.8 billion since 2010. Much of this investment has gone to the �rst waves of �nancial technology:lending (Prosper) and wealth manage-ment (Learnvest, Betterment). But talk to any insurance company directly investing in startups, and you’ll learn that they’re hammers in search of nails, that is, smart entrepre-neurs tackling the fundamental problems in insurance.

4. UNMET NEEDFinally, and most importantly for a mission-driven company, there is a tremendous unmet need for insurance in the U.S. According to a recent survey by the Federal Reserve, 47 percent of households couldn’t cover an emergency expense of $400. Insurance is intended to �ll in this savings void for unpredictable emergencies. However, too many Americans have low savings and inadequate insurance, which leads to �nancial disaster. For example, health problems and disability contributed to half of all home foreclosure �lings and over 60 percent of all personal bankruptcy �lings. It’s not easy or sexy to sell insurance to middle America, but it’s an important problem to solve -- and the �rst company to do it will be huge.These are the tailwinds that made me excited about insurance tech two years ago and which continue to drive my company forward. We recently closed a $5.3 million Series A round, which included the participation of insurance companies’ venture arms, including AXA Strategic Ventures and Transa-merica Ventures. We, and our insurance partners, are excited to make insurance the next big thing in tech.

LUMINARY | 47

TECHNOLOGY

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REAL-LIFE 'TRACTOR BEAM' CAN LEVITATEOBJECTS USING SOUND WAVES

t may seem straight out of "Star Trek," but it's real: Scien-tists have created a sonic "tractor beam" that can pull, push and pirouette objects that levitate in thin air.The sonic tractor beam relies on a precisely timed

sequence of sound waves that create a region of low pressure that traps tiny objects that can then be manipulated solely by sound waves, the scientists said in a new study.Though the new demonstration was just a proof of concept, the same technique could be adapted to remotely manipu-late cells inside the human body or target the release of medicine locked in acoustically activated drug capsules, said study co-author Bruce Drinkwater, a mechanical engineer at the University of Bristol in the United Kingdom.

LEVITATING OBJECTS

In the past, scientists have used everything from laser beams

to super conducting magnetic �elds to levitate objects. And in 2014, researchers at the University of Dundee in Scotland showed that acoustic holograms that act like a tractor beam could theoretically suck in objects.

"They really just showed the force was there; they weren't able to grab or pull anything," Drinkwater said.The principle behind the new system is simple: Sound waves, which are waves of high and low pressure that travel through a medium such as air, produce force."We've all experienced the force of sound — if you go to a rock concert, not only do you hear it, but you can some-times feel your innards being moved," Drinkwater told Live Science. "It's a question of harnessing that force."By tightly orchestrating the release of these sound waves, it should be possible to create a region with low pressure that e�ectively counteracts gravity, trapping an object in midair. If the object tries to move left, right, up or down, higher-pressure zones around the object nudge it back into its low-pressure, quiet zone.But �guring out the exact pattern of sound waves to create this tractor force is di�cult, scientists say; the mathematical equations governing its behavior can't be solved with a pen and paper.

REVERSE-ENGINEERED FORCE FIELD

Researchers recently created an acoustic hologram, or a 3D sound �eld projected onto a 2D space, which can be used as acoustic tweezers, cages and twisters that manipulate objects as they levitate in air. Credit: Image courtesy of Asier Marzo, Bruce Drinkwater and Sriram Subramanian © 2015

LUMINARY | 49

TECHNOLOGY

So Drinkwater, his Ph.D. student Asier Marzo and

other colleagues ran computer simulations through myriad di�erent patterns of sound waves to �nd the ones that produced the signature combination of a low-pressure region surrounded by high-pressure zones.They found three di�erent acoustic force �elds that can twirl, grab and manipulate objects. One works like tweezers and seems to grab the particles in thin air. Another traps the object in a high-pressure cage. The third type of force �eld acts a bit like a swirling tornado, with a rotating high-pressure �eld surrounding a low-pressure, quiet "eye" that holds the object in place, the researchers reported.To accomplish this task, the team used a tiny array of 64 mini loudspeakers, made by a company called Ultrahaptics, that produce exquisitely timed sound waves with accuracy to the microsecond level. Past acoustic levitation systems have used two or four arrays of these transducers to essentially surround the system, but the researchers' models allowed them to create the same force �eld using just one array. The team demonstrated their tractor beam using tiny balls of polystyrene, the same material used in packing peanuts.

WAVELENGTH AND INTENSITY

The size of the low-force region depends on the

wavelength: The longer the wavelength, the larger the region of low pressure. The sound intensity determines the maximum density of an object that can be pushed and pulled by the acoustic force, Drinkwater said.In this instance, the sound waves operate between 140 and 150 decibels. That would be an ear-split-ting volume if people could hear it, but the sound waves operate at 40 kilohertz, at a wavelength of about 0.4 inches (1 centimeters), well above the human hearing range but audible to dolphins and dogs."I think, if you pointed this device at a dog, it would hear it for sure," Drinkwater said. "It wouldn't like it; it would run away."The team currently levitates lightweight polysty-rene balls that measure up to 0.2 inches (5 millime-ters) across. But for the system to be useful for medical operations, the team would need to minia-turize it to manipulate objects on the micron scale. Doing so would mean using higher-frequency sound waves — a relatively simple tweak, Drinkwa-ter said."The fact that we do it as a one-sided system is so important," Drinkwater said. "To get at the body, you have to apply it to one side."

LUMINARY | 50

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THE 6 MOST COMMON INNOVATION MISTAKES COMPANIES MAKE Because innovation is a system-level problem, a point solution – trying to drive widespread change by doing a single thing – is wholly ine�ective. It is equivalent to a�empting to turnaround a failing school plagued by disinterested students, overwhelmed teachers, and crumbling infrastructure by painting the walls blue. Soothing, perhaps, but unlikely to have any real impact. Here are the six most common innovation mistakes to avoid.

YOU NEED AN INNOVATION ST�TE-GY Why is it so hard to build and maintain the capacity to innovate? �e reason is not simply a failure to execute but a failure to articulate an innovation strategy that aligns innovation e�orts with the overall business strategy.Without such a strategy, companies will have a hard time weighing the trade-o�s of various practices—such as crowdsourcing and customer co-creation—and so may end up with a grab bag of approaches. �ey will have trouble designing a coherent innovation

system that �ts their competitive needs over time and may be tempted to ape someone else’s system. And they will �nd it di�cult to align di�erent parts of the organization with shared priorities.

IS INNOVATION MORE ABOUT PEOPLE OR PROCESS? What’s more critical to producing a breakthrough innovation – �nding creative people or �nding creative ideas? �is is a question Pixar head Ed Catmull has asked a great many people, and he says they tend to be pre�y much split on it.

THE DISCIPLINE OF BUSINESS EXPER-IMENTATION �e data you already have can’t tell you how customers will react to innovations. To discover if a truly novel concept will succeed, you must subject it to a rigorous experiment. In most companies, tests do not adhere to scienti�c and statistical principles. As a result, managers o�en end up interpreting statistical noise as causation—and making bad decisions.To conduct experiments that are worth the expense and e�ort, companies need to ask themselves several questions.

HOW COMPANIES CAN LEARN TO MAKE FASTER DECISIONS SpaceX had a problem. Managers at the aerospace manufacturer wanted to make faster decisions for one of their big clients—NASA—by �nding alternatives to the high volume of meetings and cumber-some spreadsheets used for tracking projects. Initially, NASA sent a fax (yes, a fax) whenev-er they had a query, which SpaceX added to a list of outstanding questions. �e company then assembled a weekly 50-person meeting to review product status information contained in spreadsheets, addressing each question individually before sending the responses back to NASA.SpaceX’s dilemma is not an uncommon one. In today’s organizations, the speed of decision making ma�ers, but most are pre�y bad at it. One-third of all products are delivered late or incomplete due to an inabili-ty or delay in decision-making, according to research from Forrester Consulting and Jama So�ware. Others at Gartner cite “speed of decision making” as the primary obstacle impacting internal communication. No doubt you’ve been part of a team that waited… and waited… for a higher-up to make a decision before you could resume your work.

LUMINARY | 52

INNOVATION

WHAT ALL COMPANIES MUST KNOW ABOUT INNOVATION, BROUGHT TO YOU COMPLIMENTS OF JAMA SOFTWARE

THE SINGULARITY, VIRTUAL IMMORTALITYAND THE TROUBLE WITH CONSCIOUSNESS

(OP-ED)

According to techno-futurists, the exponen-tial development of technology in general and arti�cial intelligence (“AI”) in particular — including the complete digital replication of human brains — will radically transform humanity via two revolutions. �e �rst is the "singularity," when arti�cial intelligence will redesign itself recursively and progressively, such that AI will become vastly more power-ful than human intelligence ("super strong AI"). �e second revolution will be "virtual immortality," when the fullness of our mental selves can be uploaded perfectly to non biological media (such as silicon chips), and our mental selves will live on beyond the demise of our �eshy, physical bodies. AI singularity and virtual immortality would mark a startling, transhuman world that techno-futurists envision as inevitable and perhaps just over the horizon. �ey do not question whether their vision can be actualized; they only debate when will it occur, with estimates ranging from 10 to 100 years. I'm not so sure. Actually, I'm a skeptic — not because I doubt the science, but because I challenge the philosophical foundation of the claims. Consciousness is the elephant in the room, and most techno-futurists do not see it. Whatever consciousness may be, it a�ects the nature of the AI singularity and determines whether virtual immortality is even possible.It is an open question, post-singularity, whether super strong AI without inner awareness would be in all respects just as powerful as super strong AI with inner awareness, and in no respects de�cient? In other words, are there kinds of cognition that, in principle or of necessity, require true consciousness?

WHAT IS CONSCIOUSNESS?Consciousness is a main theme of "Closer To Truth," and among the subtopics I discuss with scientists and philosophers on the

BY ROBERT LAWRENCE KUHN

program is the classic "mind-body problem" — what is the relationship between the mental thoughts in our minds and the physical brains in our heads? What is the deep cause of conscious-ness? (All quotes that follow are from "Closer To Truth.")NYU Philosopher David Chalmers famously described the "hard problem" of consciousness: "Why does it feel like something inside? Why is all our brain processing — vast neural circuits and computational mechanisms — accompanied by conscious experience? Why do we have this amazing inner movie going on in our minds? I don't think the hard problem of consciousness can be solved purely in terms of neuroscience." "Qualia" are the core of the mind-body-problem. "Qualia are the raw sensations of experience," Chalmers said. "I see colors — reds, greens, blues — and they feel a certain way to me. I see a red rose; I hear a clarinet; I smell mothballs. All of these feel a certain way to me. You must experi-ence them to know what they're like. You could provide a perfect, complete map of my brain [down to elementary particles] — what's going on when I see, hear, smell — but if I haven't seen, heard, smelled for myself, that brain map is not going to tell me about the quality of seeing red, hearing a clarinet, smelling mothballs.

CAN A COMPUTER BE CONSCIOUS? To Berkeley philosopher John Searle, computer programs can never have a mind or be conscious in the human sense, even if they give rise to equiva-lent behaviors and interactions with the external world. (In Searle's "Chinese Room" argument, a person inside a closed space can use a rule book to match Chinese characters with English words and thus appear to understand Chinese, when, in fact, she does not.) But, I asked Searle, "Will it ever be possible, with hyper advanced technology, for non biological intelligences to be conscious in the same sense that we are conscious? Can computers have 'inner experience'?""It's like the question, 'Can a machine arti�cially pump blood as the heart does?'" Searle responded.

"Sure it can — we have arti�cial hearts. So if we can know exactly how the brain causes consciousness, down to its �nest details, I don't see any obstacle, in principle, to building a conscious machine. �at is, if you knew what was causally su�cient to produce consciousness in human beings and if you could have that [mechanism] in another system, then you would produce consciousness in that other system. Note that you don't need neurons to have consciousness. It's like saying you don't need feathers in order to �y. But to build a �ying machine, you do need su�cient causal power to overcome the force of gravity." "�e one mistake we must avoid," Searle cautioned, "is supposing that if you simulate it, you duplicate it. A deep mistake embedded in our popular culture is that simulation is equivalent to duplication. But of course it isn't. A perfect simulation of the brain — say, on a computer — would be no more conscious than a perfect simulation of a rainstorm would make us all wet."To robotics entrepreneur (and MIT profes-sor emeritus) Rodney Brooks, "there's no reason we couldn't have a conscious machine made from silicon." Brooks' view is a natural consequence of his beliefs that the universe is mechanistic and that consciousness, which seems special, is an illusion. He claims that, because the external behaviors of a human, animal or even a robot can be similar, we "fool ourselves" into thinking "our internal feelings are so unique."

CAN WE EVER REALLY ASSESS CONSCIOUSNESS?"I don't know if you're conscious. You don't know if I'm conscious," said Princeton University neuroscientist Michael Grazia-no. "But we have a kind of gut certainty about it. �is is because an assumption of

consciousness is an a�ribution, a social a�ribution. And when a robot acts like it's conscious and can talk about its own awareness, and when we interact with it, we will inevitably have that social perception, that gut feeling, that the robot is conscious. "But can you really ever know if there's 'anybody home' internally, if there is any inner experience?" he continued. "All we do is compute a construct of awareness." Warren Brown, a psychologist at Fuller �eological Seminary and a member of UCLA's Brain Research Institute, stressed "embodied cognition, embodied consciousness," in that "biology is the richest substrate for embodying conscious-ness." But he didn't rule out that conscious-ness "might be embodied in something non biological." On the other hand, Brown speculated that "consciousness may be a particular kind of organization of the world that just cannot be replicated in a non biological system." Neuroscientist Christof Koch, president and chief scienti�c o�cer of the Allen Institute for Brain Science, disagrees. "I am a functionalist when it comes to conscious-ness," he said. "As long as we can reproduce the [same kind of] relevant relationships among all the relevant neurons in the brain, I think we will have recreated conscious-ness. �e di�cult part is, what do we mean by 'relevant relationships'? Does it mean we have to reproduce the individual motions of all the molecules? Unlikely. It's more likely that we have to recreate all the [relevant relationships of the relevant] synapses and the wiring ("connectome") of

the brain in a di�erent medium, like a computer. If we can do all of this at the right level, this so�ware construct would be conscious."I asked Koch if he'd be "comfortable" with non biological consciousness."Why should I not be?" he responded. "Consciousness doesn't require any magical ingredient."

�DICAL VISIONS OF CONSCIOUSNESS?A new theory of consciousness — developed by Giulio Tononi, a neuroscientist and psychiatrist at the University of Wisconsin (and supported by Koch) — is based on "integrated information" such that distinct conscious experiences are represented by distinct structures in a heretofore unknown kind of space. "Integrated information theory means that you need a very special kind of mechanism organized in a special kind of way to experience consciousness," Tononi said. "A conscious experience is a maximally reduced conceptual structure in a space called 'qualia space.' �ink of it as a shape. But not an ordinary shape — a shape seen from the inside."Tononi stressed that simulation is "not the real thing." To be truly conscious, he said, an entity must be "of a certain kind that can constrain its past and future — and certainly a simulation is not

of that kind."Regarding the promise of brain replication to achieve virtual immortality, Tononi is not convinced. According to his theory of integrated information, "what would most likely happen is, you would create a perfect 'zombie' — somebody who acts exactly like you, somebody whom other people would mistake for you, but you wouldn't be there."Inventor and futurist extraordinaire Ray Kurzweil believes that "we will get to a point where computers will evidence the rich array of emotionally subtle types of behavior that we see in human beings; they will be very intelligent, and they will claim to be conscious. �ey will act in ways that are conscious; they will talk about their own consciousness and argue about it just the way you and I do. And so the philosophical debate will be whether or not they really are conscious — and they will be participating in the debate."Kurzweil argues that assessing the conscious-ness of other [possible] minds is not a scienti�c question. "We can talk scienti�cally about the neurological correlates of consciousness, but fundamentally, conscious-ness is this subjective experience that only I can experience. I should only talk about it in �rst-person terms (although I've been su�ciently socialized to accept other people's consciousness). �ere's really no way to measure the conscious experiences of another entity.""But I would accept that these non biological intelligences are conscious," Kurzweil concluded. "And that'll be convenient, because if I don't, they'll get mad at me."

WILL SUPER STRONG AI BE

CONSCIOUS?I'm not going to evaluate each competing cause of consciousness. (�at would require a course, not a column.) Rather, for each cause, I'll speculate whether non biological intelligences with super strong AI (following the AI singularity) could be conscious and possess inner awareness.1. If consciousness is entirely physical, then it would be almost certainly true that non biological intelligences with super strong AI would have the same kind of inner awareness that we do. Moreover, as AI would rush past the singularity and become ine�ably more sophisticated than the human brain, it would likely express forms of consciousness higher than we today could even imagine.2. If consciousness is an independent, non-re-ducible feature of physical reality, then it would remain an open question whether non biological intelligences could ever experience true inner awareness. (It would depend on the deep nature of the consciousness-causing feature and whether this feature could be manipulated by technology.)3. If consciousness is a non-reducible proper-ty of each and every elementary physical �eld and particle (panpsychism), then it would seem likely that non biological intelligences with super strong AI could experience true inner awareness (because consciousness would be an intrinsic part of the fabric of physical reality). 4. If consciousness is a radically separate, nonphysical substance not causally determined by the physical world (dualism), then it would seem impossible that super strong AI (alone), no ma�er how advanced, could ever experience true inner awareness.5. If consciousness is ultimate reality (cosmic consciousness), then anything could be (or is) conscious (whatever that may mean), including non-biological intelligences.Remember, in each of these cases, no one could detect, using any conceivable scienti�c test, whether the non-biological intelligences with super strong AI had the inner awareness of true consciousness. In all aspects of behavior and communica-tions, these non-biological intelligences would seem to be equal to (or superior to) humans. But if these non-biological intelligences did not, in fact, have the felt sense of inner experience, they would be "zombies" ("philosophical zombies" to be

precise), externally identical to conscious beings, but blank inside. And this dichotomy elicits (a bit circularly) our probative question: whether true conscious experience and inner awareness in non-biological intelligences would bring about distinctive, richer cognitions (however subtle and undetectable) or represent higher forms of absolute, universal value (however anthropomorphic this may seem).

IS VIRTUAL IMMORTALITY POSSIBLE?Now, what about virtual immortality — digitizing and uploading the fullness of one's �rst-person mental self (the "I") from wet, mushy, physical brains that die and decay to new, more permanent (non biological) media or substrates? Could this actually work?Again, the possibilities for virtual immortality relate to each of the alternative causes of consciousness.1. If consciousness is entirely physical, then our �rst-person mental self would be uploadable, and some kind of virtual immortality would be a�ainable. �e technology might take hundreds or thousands of years — not decades, as techno-opti-mists believe — but barring human-wide catastro-phe, it would happen. 2. If consciousness is an independent, non-reduc-

ible feature of physical reality, then it would be possible that our �rst-person mental self could be uploadable — though less clearly than in No. 1 above, because not knowing what this consciousness-causing feature would be, we could not know whether it could be manipulated by technology, no ma�er how advanced. But because consciousness would still be physical, e�cacious manipulation and successful uploading would seem possible. 3. If consciousness is a nonreducible feature of each and every elementary physical �eld and particle (panpsychism), then it would seem probable that our �rst-person mental self would be uploadable, because there would probably be regularities in the way particles would need to be aggregated to produce consciousness, and if regularities, then advanced technologies could learn to control them.4. If consciousness is a radically separate, nonphysical substance (dualism), then it would seem impossible to upload our �rst-person mental self by digitally replicat-ing the brain, because a necessary cause of our consciousness, this nonphysical component, would be absent.

5. If consciousness is ultimate reality, then consciousness would exist of itself, without any physical prerequisites. But would the unique digital pa�ern of a complete physical brain (derived, in this case, from consciousness) favor a speci�c segment of the cosmic consciousness (i.e., our unique �rst-person mental self)? It's not clear, in this extreme case, that uploading would make much di�erence (or much sense).In trying to distinguish these alternatives, I am troubled by a simple observation. Assume that a perfect digital replication of my brain does, in fact, generate human-lev-el consciousness (surely alternative 1, possibly 2, probably 3, not 4, 5 doesn’t ma�er). �is would mean that my �rst-per-son self and personal awareness could be uploaded to a new medium (non biological or even, for that ma�er, a new biological body). But if "I" can be replicated once, then I can be replicated twice; and if twice, then an unlimited number of times.So, what happens to my �rst-person inner awareness? What happens to my "I"? Assume I do the digital replication procedure and it works perfectly — say, �ve times.

Where is my �rst-person inner awareness located? Where am I?Each of the �ve replicas would state with unabashed certainty that he is "Robert Kuhn," and no one could dispute them. (For simplicity of the argument, physical appearances of the clones are neutralized.) Inhabiting my original body, I would also claim to be the real “me,” but I could not prove my priority.I'll frame the question more precisely. Comparing my inner awareness from right before to right a�er the replications, will I feel or sense di�erently? Here are four obvious possibilities, with their implications:1. I do not sense any di�erence in my �rst-person awareness. �is would mean that the �ve replicates are like super-identical twins — they are indepen-dent conscious entities, such that each begins instantly to diverge from the others. �is would imply that consciousness is the local expression or manifestation of a set of physical factors or pa�erns. (An alternative explanation would be that the replicates are zombies, with no inner awareness — a charge, of course, they will deny and denounce.)2. My �rst-person awareness suddenly has six parts — my original and the �ve replicates in di�erent locations — and they all somehow merge or blur together into a single conscious frame, the six conscious entities fusing into a single composite (if not coherent) "picture." In this way, the uni�ed e�ect of my six conscious centers would be like the "binding problem" on steroids. (�e binding problem in psychology asks how do our separate sense modalities like sight and sound come together such that our normal conscious experi-ence feels singular and smooth, not built up from

discrete, disparate elements). �is would mean that consciousness has some kind of overarching presence or a kind of supra-physi-cal structure.3. My personal �rst-person awareness shi�s from one conscious entity to another, or fragments, or fractionates. �ese states are logically (if remotely) possible, but only, I think, if consciousness would be an imperfect, incomplete emanation of evolution, devoid of fundamental grounding. 4. My personal �rst-person awareness disappears upon replication, although each of the six (original plus �ve) claims to be the original and really believes it. (�is, too, would make consciousness even more mysterious.)Suppose, a�er the replicates are made, the original (me) is destroyed. What then? Almost certainly my �rst-person awareness would vanish, although each of the �ve replicates would assert indignantly that he is the real "Robert Kuhn" and would advise, perhaps smugly, not to fret over the deceased and discarded original.At some time in the future, assuming that the deep cause of consciousness permits this, the technology will be ready. If I were around, would I submit? I might, because I'm con�dent that 1 (above) is true and 2, 3 and 4 are false, and that the replication procedure would not a�ect my �rst-person mental self one whit. (So I sure wouldn't let them destroy the original.)Bo�om line, for me for now: �e AI singulari-ty and virtual immortality must confront the deep cause of consciousness.

Robert Lawrence Kuhn is the creator, writer and host of "Closer to Truth," a public television series and online resource that features the world's leading thinkers exploring humanity's deepest questions. Kuhn is co-editor with John Leslie, of "�e Mystery of Existence: Why Is �ere Anything at All?" (Wiley-Blackwell, 2013). �is article is based on "Closer to Truth" interviews produced and directed by Peter Getzels and streamed at www.closertotruth.com. Kuhn contributed this article to LUMINARY

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AHEAD OF THE GAMEManaged Print Services is increasingly becoming afull-service data industry. Key player Konica Minolta iscommitted to leading the way in this period of transition

Mr.Ikuo NakagawaPresident, Konica MinoltaBusiness Solutions Europe

In today’s increasingly digital age, it’s becoming ever more important for compa-nies to adapt their business practices accordingly. Having an efficient system in place can help simplify and speed up basic processes, saving both time and money. Tokyo-based technology firm Konica Minolta offers a solution, with a unique Managed Print Services (MPS) model and a broad portfolio of services that covers everything from consulting right through to implementation. Catering to a diverse range of clients in 41different countries across Europe and beyond, the company offers tailor-made solutions with the aim of improving efficiency and helping business-es become more sustainable. European CEO spoke to the company’s President, Ikuo Nakagawa.

LUMINARY: How does MPS fit in with the est of Konica Minolta’s business?Ikuo Nakagawa: By optimizing printing, MPS forms the basic foundation for Konica Minolta. However, printing is now just one component part of a whole document process, so companies need to digitize and face up to major challenges such as big data, the cloud and an increasingly mobile workforce. This is significant; given 90 percent of all corporate information assets are held in documents, the costs associated with insufficient document management can be substantial. Surveys show 7.5

percent – or one in 14 – of corporate documents go missing every year, and knowledge workers can spend up to 50 percent of their time searching for specific content items.

LUMINARY: What differentiates Konica Minolta from others in the MPS industry?Ikuo Nakagawa: Last year, US IT research company Gartner named Konica Minolta a leader in their Magic Quadrant for Managed Print and content Services, which is a guide for organizations looking for MPS providers. In 2010, Konica Minolta started expanding its Optimized Printing Services (OPS) initiatives globally, and the company has now served more than 6,000 corporations worldwide. We have also introduced project management offices and specialized teams at our regional operations, to provide support to clients looking to optimize their business processes. We are passionate about creating strategies that lessen the need for printing, while reducing operational expenses and providing access to information as effective-ly as possible. The combined offering of our OPS, MCS and IMS services allows us to architect, implement and manage end-to-end solutions in a cost-effective manner while supporting our customers along the way. Konica Minolta can also analyse processes and implement solutions specifi-cally for SMEs. We have a diverse array of clients of different sizes, from SMEs to global players, including automobile manu-

Konica Minolta is helping to simplify everyday processes for businesse

facturers, logistics companies, pharmaceu-tical companies and the hospitality sector.

LUMINARY: How important is sustainability in the company’s strategy?Ikuo Nakagawa: Konica Minolta’s management philosophy is ‘the creation of new value’ and it’s rooted in the core of our company. We take a comprehensive approach when it comes to sustainability, incorporating stakeholders into our mission. We recently received the RobecoS-AM Gold Class Award for being the MFP market leader in terms of sustainability. We also feature on the Dow Jones Sustainabili-

ty World Index and the FTSE4Good Global Index, and have been awarded the Blue Angel Mark and EPEAT Gold status. We also go beyond environmental sustainability, encouraging young people to start their own businesses. That has led us to become a Global Partner of Pioneers, a platform that encourages startup business-es across the continent. We also sponsor CNN Heroes, a program that supports social entrepreneurship.

LUMINARY: What are Konica Minol-ta’s long-term environmental goals?Ikuo Nakagawa: According to the Intergovernmental Panel on Climate Change, greenhouse gas emissions in 2004 were 7.66t-CO2 per person per year. It’s estimated the amount the Earth will be able to absorb in 2050 is 80 percent less than that. These estimates were used to determine our Eco Vision 2050 target of an 80 percent reduction in lifecycle CO2

emissions by 2050 (compared to the level of emissions in 2005). As part of the program, we are also focusing on preserving biodiver-sity, promoting recycling and ensuring efficient use of the Earth’s resources. We have broken these goals down into tangible objectives in our medium-term environ-mental plan for 2015, which includes measures to prevent global warming and reduce the risk of chemical substances. As part of our medium-term plan for 2016, we aim to reduce product lifecycle CO2 emissions by 40 percent from 2005 levels. We have already made substantial progress, achieving a 54.5 percent reduction between 2005 and 2013.

LUMINARY: What are the company’s biggest achievements to date?Ikuo Nakagawa: Konica Minolta is helping to simplify everyday processes for businesses while making work life more enjoyable. We have also made ground-breaking innovations in other fields,

for example by developing the world’s first organic light emitting diode panel to be made using only phosphorescent materials, which uses significantly less electricity than conventional lighting. We developed the technology used to take the first ever Earth pictures from space (the Minolta Hi-Matic, during John Glenn’s Mercury Friendship 7 space flight in 1962). We’ve made substantial developments since then, including a special type of film that increases the viewing angle of LCD screens for use with TVs, PCs, smartphones and other devices. Our pick-up lenses are now used in almost all Blu-ray and DVD players. We have created materi-als to improve safety in cars, and thermal insulation in buildings. Our innovation extends to the health-care sector, with products designed to help medical professionals. We created a device that lowers X-ray radiation exposure to patients (known as AeroDR) and in 2005 we released the first mammograph to use phase contrast technology. In 2002, we developed Simitri – the world’s first polymerized biomass toner. The product is both economical and environmentally beneficial, reducing CO2 and NOx emissions by up to 40 percent. We have received recognition for these achievements: in 1992, Konica Minolta became the first company in the world to receive a Blue Angel mark in the field of copying, and in 2013 we became the first of those using laser-based MFPs to receive the new Blue Angel Mark covering newly revised criteria.

LUMINARY: What are Konica Minolta’s ambitions for the future?Ikuo Nakagawa: Our fundamental goal is to

anticipate our clients’ needs and turn their ideas into reality, by delivering innovative and meaningful solutions that contribute to a better future. We involve our clients in current developments that affect the market and provide them with tailored, end-to-end solutions. Our services, from consulting to implementation and management, cover the whole spectrum of business technology needs. Konica Minolta wants to give shape to people’s ideas, thoughts and concepts. For us, it is vital to not only understand our clients’ technology needs but to help businesses develop in the most effective ways possible. Konica Minolta has proven it can be as nimble as a startup, even though it builds on 140 years of tradition. We are especially proud of what we have achieved in Europe since Konica and Minolta merged just over 10 years ago and we hope to continue with those achievements in the future.

LUMINARY | 61

Q&A

In today’s increasingly digital age, it’s becoming ever more important for compa-nies to adapt their business practices accordingly. Having an efficient system in place can help simplify and speed up basic processes, saving both time and money. Tokyo-based technology firm Konica Minolta offers a solution, with a unique Managed Print Services (MPS) model and a broad portfolio of services that covers everything from consulting right through to implementation. Catering to a diverse range of clients in 41different countries across Europe and beyond, the company offers tailor-made solutions with the aim of improving efficiency and helping business-es become more sustainable. European CEO spoke to the company’s President, Ikuo Nakagawa.

LUMINARY: How does MPS fit in with the est of Konica Minolta’s business?Ikuo Nakagawa: By optimizing printing, MPS forms the basic foundation for Konica Minolta. However, printing is now just one component part of a whole document process, so companies need to digitize and face up to major challenges such as big data, the cloud and an increasingly mobile workforce. This is significant; given 90 percent of all corporate information assets are held in documents, the costs associated with insufficient document management can be substantial. Surveys show 7.5

percent – or one in 14 – of corporate documents go missing every year, and knowledge workers can spend up to 50 percent of their time searching for specific content items.

LUMINARY: What differentiates Konica Minolta from others in the MPS industry?Ikuo Nakagawa: Last year, US IT research company Gartner named Konica Minolta a leader in their Magic Quadrant for Managed Print and content Services, which is a guide for organizations looking for MPS providers. In 2010, Konica Minolta started expanding its Optimized Printing Services (OPS) initiatives globally, and the company has now served more than 6,000 corporations worldwide. We have also introduced project management offices and specialized teams at our regional operations, to provide support to clients looking to optimize their business processes. We are passionate about creating strategies that lessen the need for printing, while reducing operational expenses and providing access to information as effective-ly as possible. The combined offering of our OPS, MCS and IMS services allows us to architect, implement and manage end-to-end solutions in a cost-effective manner while supporting our customers along the way. Konica Minolta can also analyse processes and implement solutions specifi-cally for SMEs. We have a diverse array of clients of different sizes, from SMEs to global players, including automobile manu-

facturers, logistics companies, pharmaceu-tical companies and the hospitality sector.

LUMINARY: How important is sustainability in the company’s strategy?Ikuo Nakagawa: Konica Minolta’s management philosophy is ‘the creation of new value’ and it’s rooted in the core of our company. We take a comprehensive approach when it comes to sustainability, incorporating stakeholders into our mission. We recently received the RobecoS-AM Gold Class Award for being the MFP market leader in terms of sustainability. We also feature on the Dow Jones Sustainabili-

ty World Index and the FTSE4Good Global Index, and have been awarded the Blue Angel Mark and EPEAT Gold status. We also go beyond environmental sustainability, encouraging young people to start their own businesses. That has led us to become a Global Partner of Pioneers, a platform that encourages startup business-es across the continent. We also sponsor CNN Heroes, a program that supports social entrepreneurship.

LUMINARY: What are Konica Minol-ta’s long-term environmental goals?Ikuo Nakagawa: According to the Intergovernmental Panel on Climate Change, greenhouse gas emissions in 2004 were 7.66t-CO2 per person per year. It’s estimated the amount the Earth will be able to absorb in 2050 is 80 percent less than that. These estimates were used to determine our Eco Vision 2050 target of an 80 percent reduction in lifecycle CO2

emissions by 2050 (compared to the level of emissions in 2005). As part of the program, we are also focusing on preserving biodiver-sity, promoting recycling and ensuring efficient use of the Earth’s resources. We have broken these goals down into tangible objectives in our medium-term environ-mental plan for 2015, which includes measures to prevent global warming and reduce the risk of chemical substances. As part of our medium-term plan for 2016, we aim to reduce product lifecycle CO2 emissions by 40 percent from 2005 levels. We have already made substantial progress, achieving a 54.5 percent reduction between 2005 and 2013.

LUMINARY: What are the company’s biggest achievements to date?Ikuo Nakagawa: Konica Minolta is helping to simplify everyday processes for businesses while making work life more enjoyable. We have also made ground-breaking innovations in other fields,

for example by developing the world’s first organic light emitting diode panel to be made using only phosphorescent materials, which uses significantly less electricity than conventional lighting. We developed the technology used to take the first ever Earth pictures from space (the Minolta Hi-Matic, during John Glenn’s Mercury Friendship 7 space flight in 1962). We’ve made substantial developments since then, including a special type of film that increases the viewing angle of LCD screens for use with TVs, PCs, smartphones and other devices. Our pick-up lenses are now used in almost all Blu-ray and DVD players. We have created materi-als to improve safety in cars, and thermal insulation in buildings. Our innovation extends to the health-care sector, with products designed to help medical professionals. We created a device that lowers X-ray radiation exposure to patients (known as AeroDR) and in 2005 we released the first mammograph to use phase contrast technology. In 2002, we developed Simitri – the world’s first polymerized biomass toner. The product is both economical and environmentally beneficial, reducing CO2 and NOx emissions by up to 40 percent. We have received recognition for these achievements: in 1992, Konica Minolta became the first company in the world to receive a Blue Angel mark in the field of copying, and in 2013 we became the first of those using laser-based MFPs to receive the new Blue Angel Mark covering newly revised criteria.

LUMINARY: What are Konica Minolta’s ambitions for the future?Ikuo Nakagawa: Our fundamental goal is to

anticipate our clients’ needs and turn their ideas into reality, by delivering innovative and meaningful solutions that contribute to a better future. We involve our clients in current developments that affect the market and provide them with tailored, end-to-end solutions. Our services, from consulting to implementation and management, cover the whole spectrum of business technology needs. Konica Minolta wants to give shape to people’s ideas, thoughts and concepts. For us, it is vital to not only understand our clients’ technology needs but to help businesses develop in the most effective ways possible. Konica Minolta has proven it can be as nimble as a startup, even though it builds on 140 years of tradition. We are especially proud of what we have achieved in Europe since Konica and Minolta merged just over 10 years ago and we hope to continue with those achievements in the future.

LUMINARY | 62

A group of chemicals commonly used in cosmetics and other personal-care products may stimu-late the growth of breast cancer cells at doses much lower than previously thought, a new study finds.

The study was done on human breast cancer cells growing in lab dishes, and it's unclear whether these chemicals, called parabens, act the same in the human body. But the chemicals have been shown in previous lab and animal studies to mimic the activity of the hormone estrogen, meaning they can bind to receptors in the body to which estrogen normally binds.This is a concern because when estrogen binds to estrogen receptors, it causes cells to multiply, and in women this increases breast cancer risk, said Dr. Dale Leitman, an adjunct professor of nutritional sciences and toxicology at the University of California, Berkeley, and the senior author on the study.

Parabens are a type of chemical preservative, and are found in a wide array of consumer products,

including shampoos, body lotions and sunscreens.

It's also known that parabens can activate the same pathway as estrogen, but previous studies have found that they do so very weakly, Leitman told Live Science. "Because they're weak, they're assumed to be safe compounds," especially based on the levels of parabens that have been found in humans, he said. [What Is Estrogen?]

But previous studies looked at just the parabens by themselves, Leitman said.

"The real problem when you do studies in the laboratory is that you study one compound at a time, but in the body, that's not the case. What you're seeing in the body is really a combination" of the effects of many compounds, Leitman said.

In the new study, published in the journal Environmental Health Perspectives, the researchers focused on the effects of parabens when mixed with one additional compound: a type of growth factor

called heregulin that has also been linked to breast cancer cell growth.

In experiments, the researchers looked at how well the cells grew when they were exposed to both parabens and heregulin, compared with how the cells grew when exposed only to parabens. The scientists found that when they added heregulin, they could drop the level of parabens by 100 times and the cancer cells would still multiply faster than those without heregulin.

In other words, when the heregulin was added, the parabens were 100 times more potent at stimulating cancer cell growth compared with breast cancer cells exposed to only parabens.

With this increased potency, parabens may have an effect at a level that could be seen in humans, Leitman said.

Still, Leitman stressed that more studies are needed to determine the safety of the chemicals. Lab studies and animal studies are indirect ways of estimating the potential hazards of parabens, Leitman noted.

"All we can say from our study is that in order to determine how safe the parabens are … [we need] to test them not by themselves but with other chemicals that stimulate cell proliferation," he said.

Dr. Jiangang Chen, an assistant professor of public health at the University of Tennessee Knoxville who was not involved in the study, agreed.

"The study, like others published, only demonstrat-ed the effects in the cells, which may not reflect the same scenario as in an intact biological system," Chen told Live Science. But additional studies have also indicated that other compounds may also contribute to how parabens affect breast cancer risk, Chen said.

Indeed, the study raises concerns that the "safe levels" of parabens used in cosmetic products should be re-evaluated, he said.

However, more research is ultimately required before a conclusion can be reached regarding the safety of parabens, Chen said.

CHEMICALS IN PERSONAL PRODUCTS MAY STIMULATE CANCER MORE THAN THOUGHT

BY SARA G. MILLER

LUMINARY | 65

HEALTH

EATING A HEALTHY DIET MAY REDUCEBRAIN SHRINKAGEBY AGATA BLASZCZAK-BOXE, CONTRIBUTING WRITER

People who eat a diet rich in fish, fruits and vegetables but low in meat may lose fewer brain cells as they age, according to a new study.

In the study of 674 older adults, the researchers looked at whether the participants' diets during the past year included the following nine components of the so-called Mediter-ranean diet: eating lots of vegetables, legumes, cereals, fish, fruits and nuts; consuming healthy monosaturated fats like olive oil but avoiding saturated fats; drinking moderate amounts of alcohol; and eating low amounts of meat and dairy products. The average age of the people in the study was 80.

The researchers scanned the partici-pants' brains, and found that those whose diets included at least five of these nine components had brain volumes that measured 13.11 millili-ters larger on the scans, on average, compared with the brain volumes of the people whose diets included fewer than five components.

This difference in brain volume between the two groups is equivalent to the amount of shrinkage that happens over five years of aging, the researchers said.

"These results are exciting, as they raise the possibility that people may potentially prevent brain shrinking and the effects of aging on the brainsimply by following a healthy diet," study author Yian Gu, of Columbia University in New York, said in a statement.

When the researchers took a closer look at the relationship between brain shrinkage and the Mediterranean diet, they found that the diet's protec-tive effect was driven to the greatest extent by two components: eating

more fish and eating less meat.

This finding suggests that "eating at least 3 to 5 ounces of fish weekly or eating no more than 3.5 ounces of meat daily may provide consid-erable protection against loss of brain cells equal to about three to four years of aging," Gu said. [7 Ways the Mind and Body Change With Age]

None of the people in the new study had dementia. The research-ers noted, however, that greater amounts of brain shrinkage have beenlinkedto a greater risk of cognitive decline.

The new study was observational, and more research is needed to examine the relationship between the Mediterranean diet and brain structure, Gu told Live Science. The new study does not prove that following the Mediterranean diet prevents brain shrinkage; rather, it shows there is a link between the two, she said.

The mechanism between the Mediterranean diet and a greater brain volume is not clear, but it may have something to do with the beneficial effects of nutrients present in the foods, the research-ers said. For example, the omega-3 fats as well as vitamins B and D in fish have been shown to promote the growth of neurons and slow brain shrinkage.

LUMINARY | 66

SCIENTIFIC PRIZES BRING NEEDEDATTENTION TO MENTAL HEALTH RESEARCH

BY DR. HERBERT PARDES

Dr. Herbert Pardes is executive vice chairman of the board of trustees at New York-Presbyte-rian Hospital and president of the Scientific Council of the Brain & Behavior Research Foundation — and last year was the first to win the prize that now bears his name. Pardes contributed this article to LUMINARY

This fall, scientists around the world will trade lab coats for tuxes and ball gowns for the annual "award season" announcements of the Nobel Prize, the MacArthur Foundation fellowships, the Lasker Awards, and the star-studded and televised Breakthrough Prize awards. These prizes, each accompa-nied by significant monetary awards, shine a much-needed spotlight on important scientific research that, in the past, the media has often consid-ered too dense and academic to be of interest to the public.

We are in a day and age when one of television's biggest comedy hits, "The Big Bang Theory," is about the lives of Caltech Ph.D.s, when biopics about Alan Turing and Stephen Hawking win Oscars, and when Hawking hobnobs with a Russian billionaire to search for extraterrestrial life. Suddenly, science, technology, engineering and mathe-matics (the "STEM" fields) have acquired a glamorous sheen that is

attracting people with deep pockets who want to accelerate the often slow, deliberate and bureaucratic march toward new findings and cures.

PHILANTHROPY HAS A PLACE IN RESEARCH

Many in the scientific community are worried by a trend in which wealth trumps peer reviews, grant applica-tions and selection committees, but many philanthropists are serious, knowledgeable, deeply committed and determined to find cures for the most intractable diseases.

For those of us who have devoted our lives to scientific research, there is a lot to appreciate about this new world order.

In today's funding environment, the most significant inroads to scientific discovery will likely be generated by a combination of public and private funding from people with a vested

stake in finding cures. Just look at the progress made by public-private partnerships such as the American Cancer Society in reducing mortality from breast, lung and colon cancer, and the Cystic Fibrosis Foundation — which supported the development of Kalydeco, the first drug to treat an underlying cause of the disease — through its "venture philanthropy."

Federal funding for scientific research has sharply declined over the past 10 years, and dwindling resources have led to the erosion of federal grants, lab closures and diminished incentives for all scientists and, consequently, the loss of talented young researchers.

Even so, private philanthropy still lags behind public funding. The U.S. National Institutes of Health's (NIH) yearly budget is $31 billion, half of which goes toward basic science — the backbone of most scientific discoveries but lacking the allure to attract the

wealthiest philanthropists.

Within that agency, the U.S. National Institute of Mental Health (NIMH) has an annual budget of $1.4 billion, a figure that has declined more than 10 percent in the past five years when adjusted for inflation, meaning a substantial decrease in funding for both basic research and clinical trials. In fact, private funding is now helping to drive the kind of high-risk, high-re-ward research that may change lives and end the suffering that psychiatric illnesses bring to so many.

IMPROVING CARE FOR MENTAL HEALTH

During my career, I have been privileged to work in both the public and private sectors. In 1984, I left my position as director of the NIMH to become chairman of the Department of Psychiatry at Columbia University because I felt I could accomplish more on the outside.

Early in those early days, I set up an annual information symposium about mental health for the public, featuring scientists talking about psychiatric research in plain English. This event attracted hundreds of people starved for information, and enhanced the work of the Brain & Behavior Research Foundation (BBRF), which funds innovative ideas in neuroscience and psychiatry to understand the causes of brain and behavior disorders, and find better ways to diagnose and treat them. Grant recipients are selected by the foundation’s Scientific Council, which comprises 165 leading experts across disciplines in brain and behavior research, including two Nobel laure-ates; four former directors of the NIMH; 13 members of the National Academy of Sciences; 21 chairs of Psychiatry and Neuroscience Depart-ments at leading medical institutions; and 47 members of the Institute of Medicine.

Since 1987, the foundation has award-ed 5,000 grants worth nearly $340 million. More importantly, it has seeded the research of an entire generation of

brilliant young neuroscientists and clinicians who have gone on to obtain $3 billion in additional funding for their work. This is a philanthropic model worthy of emulation.

The field of mental health has come a long way since I visited a state hospital for the first time as a college sopho-more in 1953. I will never forget what I saw — a naked man locked in an empty room, smearing his feces on the wall.

Today, people living with mental illness certainly have access to more help, and scientists are making great strides in basic research, new technologies, next-generation therapies and early interventions.

There are about 320 million Americans, and approximately one in four live day-to-day with mental illness. An influx of veterans are coping withpost-traumatic stress disorder (PTSD), depression and suicide, and have raised awareness and aroused sympathy for people with psychiatric disorders. However, high-profile, violent incidents involving people with mental illness continue to reinforce lingering stigmas. Decades after the deinstitutionalization of mentally ill patients, the United States still lacks adequate community support, psychia-trists, psychologists, social workers, nurses and hospital beds. Many people go untreated, and there are more people with psychiatric illnesses in prison than in psychiatric hospitals.

AN AWARD TO ADDRESS A CRISIS

So much more needs to be done. How do we let people know about this epidemic? How can we get the NIH, the NIMH and the U.S. Congress, more specifically, to increase funding for research into mental illness? How does mental health become a top priority so that help is available to all who need it?

These problems have deep roots, and solutions are elusive and complex. That's why it is so important that scien-tists continue conducting basic and clinical research to understand how the

healthy human brain gives rise to the miracle of thought and consciousness, and how genetic, cellular and circuit anomalies lead to the full panoply of brain disorders

Partly because of the logjam in Wash-ington, enlightened philanthropists have never had a more important role to play in driving brain research forward. Though it is difficult to imag-ine what our ultrapartisan political system can accomplish, Congress must find ways to fund mental health research. Simultaneously, generous philanthropists must provide support.

I'm honored that the Brain & Behavior Foundation will present the Pardes Prize — a $300,000 award recognizing humanitarians striving to change the way the world views mental illness through education, prevention, research, clinical care, mentoring, treatment or advocacy for both individ-uals and policies that affect mental health.

Society has found ways of recognizing contributions in basic science, clinical research and clinical care in the nonpsychiatric health fields, but the field of mental health in psychiatry is complex and affects people throughout the world. With this prize, we hope to expand the care, treatment and under-standing of the underlying causes of mental illness, and reduce the pain these conditions cause individuals and their families.

I'll happily put on my tuxedo to call attention to issues surrounding mental illness. It is time to stop talking about helping people with mental illness and actually do something to help them lead productive lives.

LUMINARY | 67

HEALTH

This fall, scientists around the world will trade lab coats for tuxes and ball gowns for the annual "award season" announcements of the Nobel Prize, the MacArthur Foundation fellowships, the Lasker Awards, and the star-studded and televised Breakthrough Prize awards. These prizes, each accompa-nied by significant monetary awards, shine a much-needed spotlight on important scientific research that, in the past, the media has often consid-ered too dense and academic to be of interest to the public.

We are in a day and age when one of television's biggest comedy hits, "The Big Bang Theory," is about the lives of Caltech Ph.D.s, when biopics about Alan Turing and Stephen Hawking win Oscars, and when Hawking hobnobs with a Russian billionaire to search for extraterrestrial life. Suddenly, science, technology, engineering and mathe-matics (the "STEM" fields) have acquired a glamorous sheen that is

attracting people with deep pockets who want to accelerate the often slow, deliberate and bureaucratic march toward new findings and cures.

PHILANTHROPY HAS A PLACE IN RESEARCH

Many in the scientific community are worried by a trend in which wealth trumps peer reviews, grant applica-tions and selection committees, but many philanthropists are serious, knowledgeable, deeply committed and determined to find cures for the most intractable diseases.

For those of us who have devoted our lives to scientific research, there is a lot to appreciate about this new world order.

In today's funding environment, the most significant inroads to scientific discovery will likely be generated by a combination of public and private funding from people with a vested

stake in finding cures. Just look at the progress made by public-private partnerships such as the American Cancer Society in reducing mortality from breast, lung and colon cancer, and the Cystic Fibrosis Foundation — which supported the development of Kalydeco, the first drug to treat an underlying cause of the disease — through its "venture philanthropy."

Federal funding for scientific research has sharply declined over the past 10 years, and dwindling resources have led to the erosion of federal grants, lab closures and diminished incentives for all scientists and, consequently, the loss of talented young researchers.

Even so, private philanthropy still lags behind public funding. The U.S. National Institutes of Health's (NIH) yearly budget is $31 billion, half of which goes toward basic science — the backbone of most scientific discoveries but lacking the allure to attract the

wealthiest philanthropists.

Within that agency, the U.S. National Institute of Mental Health (NIMH) has an annual budget of $1.4 billion, a figure that has declined more than 10 percent in the past five years when adjusted for inflation, meaning a substantial decrease in funding for both basic research and clinical trials. In fact, private funding is now helping to drive the kind of high-risk, high-re-ward research that may change lives and end the suffering that psychiatric illnesses bring to so many.

IMPROVING CARE FOR MENTAL HEALTH

During my career, I have been privileged to work in both the public and private sectors. In 1984, I left my position as director of the NIMH to become chairman of the Department of Psychiatry at Columbia University because I felt I could accomplish more on the outside.

Early in those early days, I set up an annual information symposium about mental health for the public, featuring scientists talking about psychiatric research in plain English. This event attracted hundreds of people starved for information, and enhanced the work of the Brain & Behavior Research Foundation (BBRF), which funds innovative ideas in neuroscience and psychiatry to understand the causes of brain and behavior disorders, and find better ways to diagnose and treat them. Grant recipients are selected by the foundation’s Scientific Council, which comprises 165 leading experts across disciplines in brain and behavior research, including two Nobel laure-ates; four former directors of the NIMH; 13 members of the National Academy of Sciences; 21 chairs of Psychiatry and Neuroscience Depart-ments at leading medical institutions; and 47 members of the Institute of Medicine.

Since 1987, the foundation has award-ed 5,000 grants worth nearly $340 million. More importantly, it has seeded the research of an entire generation of

brilliant young neuroscientists and clinicians who have gone on to obtain $3 billion in additional funding for their work. This is a philanthropic model worthy of emulation.

The field of mental health has come a long way since I visited a state hospital for the first time as a college sopho-more in 1953. I will never forget what I saw — a naked man locked in an empty room, smearing his feces on the wall.

Today, people living with mental illness certainly have access to more help, and scientists are making great strides in basic research, new technologies, next-generation therapies and early interventions.

There are about 320 million Americans, and approximately one in four live day-to-day with mental illness. An influx of veterans are coping withpost-traumatic stress disorder (PTSD), depression and suicide, and have raised awareness and aroused sympathy for people with psychiatric disorders. However, high-profile, violent incidents involving people with mental illness continue to reinforce lingering stigmas. Decades after the deinstitutionalization of mentally ill patients, the United States still lacks adequate community support, psychia-trists, psychologists, social workers, nurses and hospital beds. Many people go untreated, and there are more people with psychiatric illnesses in prison than in psychiatric hospitals.

AN AWARD TO ADDRESS A CRISIS

So much more needs to be done. How do we let people know about this epidemic? How can we get the NIH, the NIMH and the U.S. Congress, more specifically, to increase funding for research into mental illness? How does mental health become a top priority so that help is available to all who need it?

These problems have deep roots, and solutions are elusive and complex. That's why it is so important that scien-tists continue conducting basic and clinical research to understand how the

healthy human brain gives rise to the miracle of thought and consciousness, and how genetic, cellular and circuit anomalies lead to the full panoply of brain disorders

Partly because of the logjam in Wash-ington, enlightened philanthropists have never had a more important role to play in driving brain research forward. Though it is difficult to imag-ine what our ultrapartisan political system can accomplish, Congress must find ways to fund mental health research. Simultaneously, generous philanthropists must provide support.

I'm honored that the Brain & Behavior Foundation will present the Pardes Prize — a $300,000 award recognizing humanitarians striving to change the way the world views mental illness through education, prevention, research, clinical care, mentoring, treatment or advocacy for both individ-uals and policies that affect mental health.

Society has found ways of recognizing contributions in basic science, clinical research and clinical care in the nonpsychiatric health fields, but the field of mental health in psychiatry is complex and affects people throughout the world. With this prize, we hope to expand the care, treatment and under-standing of the underlying causes of mental illness, and reduce the pain these conditions cause individuals and their families.

I'll happily put on my tuxedo to call attention to issues surrounding mental illness. It is time to stop talking about helping people with mental illness and actually do something to help them lead productive lives.

LUMINARY | 68