HBS Case Study

Keith Krach 10.08.2021

HBS Cold Call Podcast: How the Clean Network Changed the Future of Global Technology Competition

On Cold Call, Harvard Professor Meg Rithmire & former DocuSign CEO & Under Secretary of State Keith Krach discuss the HBS case study and how the Clean Network defeated China’s 5G masterplan & changed the future of global technology competition.

Brian Kenny: Keith, we love having the protagonist in on the conversation because you experienced it, you lived it. Meg, it’s a great case and it’s ripped from the headlines. I’m waiting for the Netflix series I know that’s going to come out soon.

Meg Rithmire: The Clean Network is heralding a new era for how globalization works and how states are interacting with firms. Clearly, this is high drama. This is geopolitics, and for our students, they’re sitting in this classroom doing their MBA, as Keith did a few decades ago and then, Keith goes on to run a few companies and then, finds himself in the middle of a geopolitical firestorm where he’s using both politics and business background to deal with a problem of extreme importance. You can’t get more dramatic than that. So as a case, it’s perfect to talk about U.S., China, and what role business leaders have. It’s an opportunity I could not turn down.

Keith Krach: To defeat the CCP’s 5G master plan we built the Clean Network Alliance of Democracies comprised of countries, companies, and civil society that operate by a set of trust principles. Those trust principles are democratic values like transparency, reciprocity, respect for rule of law, respect for property of all kinds, respect for sovereignty and nation, respect for human rights, respect for the planet. What China Inc. had been doing is they’ve been taking those democratic principles that we honor, and they do not, and using them against us for their economic advantage. The Clean Network took those principles and in one jujitsu move, flipped them on their back and used it against them for our strategic advantage. In essence, we weaponized the very principles that protect our freedoms. As a result, the Clean Network’s 60 countries, representing two-thirds of the world’s GDP, and two hundred telcos proved China Inc. is beatable. And in the process, creating an enduring, proven model for all areas of economic competition by exposing CCP’s biggest weakness– lack of trust.

Here’s a quick guide to the video:
0:00 Brian Kenny introduces the case: 5G will completely reshape industries — exciting and scary.
1:10 Introduction to speakers: HBS prof Meg Rithmire studies the comparative political economy of development, with a focus on China and Asia; Keith Krach is former Under Secretary of State and has a long and distinguished career as an entrepreneur and business leader, including as the chairman, president, and CEO of DocuSign and he holds an MBA from Harvard Business School.
1:42 We love having Keith, the protagonist, in on the conversation because you experienced it, you lived it. It’s a great case and it’s ripped from the headlines.
2:34 Why is this an important story to tell, an important case to write?
3:55 The case heralds a new era for how globalization works and how states are interacting with firms. And clearly, this is high drama.
4:42 What is China’s investment strategy and their manufacturing strategy in the U.S., and how does it relate to the case?
5:55 China’s state-owned tech firms present a tremendous political challenge to the rest of the world.
7:38 Keith, why did you come to Washington — did you know what you were getting into?
9:12 Krach’s three-part China strategy
10:40 Krach’s listening tour — 60 bilateral meetings — nobody trusts China
15:00 The Chinese Communist Party’s master plan to control 5G communications — it looked like Huawei was unstoppable
16:09 Previous attempts failed, but Krach has a new approach
18:02 Reversing China’s momentum — Krach’s 3-part Global Economic Security Strategy
19:40 Krach’s jujitsu move — weaponize the trust principles that protect our freedoms
20:38 Krach’s team of Silicon Valley veterans and career diplomats persuade clean companies, countries, and telcos to join the Clean Network
23:34 It all comes down to one question only — who do you trust?
24:15 Meg Rithmire: The problem with China’s National Intelligence laws.
26:14 This is a new model for multilateral diplomacy that changes the way business is done.
26:54 Clean Network objectives: 1. Prove China Inc. is beatable. 2. Level the playing field for new entrants. 3. Open a beachhead for other areas of competition.
32:42 Key issue: This is freedom vs. authoritarianism, and this was not America alone.
36:05 Big take-away: Companies and countries will need to adopt some of China’s tactics to counter China’s aggression — for example, large-scale investment in semiconductors and other key technologies.

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