Latest / Humanity Working / Why Do Big AI Rollouts Keep Failing?
Transcript
- 0:16SPEAKER_01: All right, Paul.
- 0:17SPEAKER_01: So we're back with our series here.
- 0:19SPEAKER_01: Question four today.
- 0:20SPEAKER_01: Why do big AI rollouts keep failing?
- 0:24SPEAKER_01: I think this is a really, really good question, and your response in here is fascinating to me.
- 0:30SPEAKER_01: So let's let's get right into it.
- 0:32SPEAKER_01: Why do you think these keep failing?
- 0:34SPEAKER_01: We're spending plenty of money on them.
- 0:37SPEAKER_03: Well, I guess let's start with whether they are.
- 0:39SPEAKER_03: It's really um it's really interesting.
- 0:42SPEAKER_03: This sort of got into the news, gosh, it was a while ago now.
- 0:46SPEAKER_03: There was an MIT study that was like catnip to the internet community and to also, you know, Forbes and outlets like that that said that 95% of AI, of generative AI pilots are failing.
- 1:05SPEAKER_03: You know, it's interesting.
- 1:06SPEAKER_03: I mean, not to disparage MIT in any way, but if you go into it, there were some methodology issues, I think, with that study, and it was very small, and and it it gets you into this sort of like weird question as to, you know, what constitutes failure, etc.
- 1:24SPEAKER_03: I think if you think of a AI project the success and failure of an AI project purely in terms of we need these types of business results in this period of time, and that period of time being relatively short, then under those criteria, yeah, they a lot of them are failing.
- 1:54SPEAKER_03: So I think that almost as interesting as as to how true the question is, is how resonant the question is.
- 2:05SPEAKER_03: So earlier this year when I was promoting the book a lot, I got a lot of questions about this.
- 2:11SPEAKER_03: Like, is it any good?
- 2:14SPEAKER_03: Does it um why or I've spent all this amount of money on trying to deploy it and nobody's using it?
- 2:21SPEAKER_03: Or I thought we were supposed to get amazing business results with this technology, and I'm not seeing anything meaningful in my business as a result.
- 2:30SPEAKER_03: Should I be firing people and replacing them with AI every time I've seen people do that?
- 2:36SPEAKER_03: They seem to go back six months later and say, Whoops, we made a mistake there, and they start rehiring people.
- 2:42SPEAKER_03: So I think it's sort of all like all in the in the context of that.
- 2:45SPEAKER_03: But but the question itself is a really interesting one because in a way it gets the heart of what even the AI is that you're deploying and how you think about it.
- 2:56SPEAKER_03: People didn't really ask this question, at least from my memory, people didn't really ask this question about Microsoft Office, right?
- 3:05SPEAKER_03: They didn't uh But there was a world before we all had Microsoft Office, and now we do have Microsoft Office.
- 3:12SPEAKER_03: And what the ROI is on Microsoft Office has never been that clear, right?
- 3:19SPEAKER_03: Um, and I think we're in a similar spot here where the the ROI on this investment looked at through traditional metrics, at least right now, is not terribly clear because it's not a question of like I get this and I sell 20% more, or I get this and my operational costs go down by 45% or whatever, right?
- 3:37SPEAKER_03: It's not that easy to be able to track, and so that's part of the issue here.
- 3:42SPEAKER_03: But there is a generalized feeling that people are deploying this stuff and it's been sold to them and marketed to them as the thing that will literally change their world and change their fortunes and all that kind of stuff, and it's not really doing.
- 3:57SPEAKER_01: Do you think there was some almost a wish that people the the reason that the headline resonated so greatly is people are like, ah, see, I told you.
- 4:08SPEAKER_01: Because there was so much hype, it's almost like, yeah, we thought it would fail, kind of attitude um confirmation bias.
- 4:17SPEAKER_01: I don't know, just just that it it it made people feel better that it didn't work or something like this.
- 4:23SPEAKER_01: So it resonated.
- 4:24SPEAKER_03: Yeah, people want to take this thing down for for very good reasons.
- 4:28SPEAKER_03: And and you know, and it's so interesting you say about how much hype there is.
- 4:32SPEAKER_03: For five years, I was living in Tulsa, Oklahoma for the last three or four months.
- 4:39SPEAKER_03: I'm in Seattle, which is if you look at all the cities in the United States, it's the you know, second most AI city, if you like, in terms of the amount of activity that is happening uh related to AI.
- 4:54SPEAKER_03: And then just this last week, I was in San Francisco, which of course, you know, San Francisco and the Valley is number one on that list.
- 5:03SPEAKER_03: And I w I went through San Francisco airport last Wednesday evening, and in the city and in the airport, it's everywhere.
- 5:15SPEAKER_03: I mean, everything is everywhere.
- 5:17SPEAKER_03: Everywhere.
- 5:18SPEAKER_03: And like every billboard, every sign, every, you know, your agentic partner for a such and such or whatever it would happen to be.
- 5:26SPEAKER_03: Yeah.
- 5:27SPEAKER_03: And this is a bit tangential, Matt, but it it suddenly occurred to me, I was thinking, I wonder if we've ever been in a situation where there is so much marketing spend being put on something.
- 5:44SPEAKER_03: If you were to actually talk to the general population, the general population would divide into a very small percentage of people who think this is awesome and can't wait for the next shoe to drop.
- 5:59SPEAKER_03: A larger population who think this is basically terrible and what the hell are we doing, and then a really large population, which is what is this again?
- 6:11SPEAKER_03: Right?
- 6:12SPEAKER_03: And not even paying attention, yeah.
- 6:14SPEAKER_03: You know, you do your AI shit, and I'll and meanwhile I've got I've got a life to live and I've got a dog to walk, you know.
- 6:20SPEAKER_03: And it's a um I don't recall it ever happening in exactly that way.
- 6:27SPEAKER_03: And the number of people that are unambiguously thrilled by this is really, really small.
- 6:34SPEAKER_03: And then there's a few people, I guess like you and I, which are like, Yep, could save the planet, could kill us all, and are trying to hold those and are trying to hold those two things in our head at the same time.
- 6:46SPEAKER_01: Well, too, think about the the general all the other people that you're talking about.
- 6:51SPEAKER_01: So if it's two per 2% of the population that's in the camps of like, I it this is amazing, and also know what's going on, everybody else, their experience of it is uh just the call center that sounds more like a person now for them, or pretends to type or cough while they're talking to them to make it seem more human, and it's not working well.
- 7:14SPEAKER_01: So, you know, it I think people and the music that you know, AI music that everybody kind of it ramped up and then everybody's like, oh, we hate it, get it off the platform, you know.
- 7:25SPEAKER_03: Um, the general consumer social media platforms, right?
- 7:30SPEAKER_03: The and and you're you are really right.
- 7:33SPEAKER_03: I mean, there is a glee that is very human that is like, look, we're better.
- 7:38SPEAKER_03: I mean, we're recording this like actually very soon before it it goes out, we're recording this at the at the end of August.
- 7:45SPEAKER_03: And so we've just had those robot championships, right?
- 7:50SPEAKER_03: And some of it really, really is stunning, actually, right?
- 7:58SPEAKER_03: If you just take a step back and you look at the level of achievement and where we've got to versus where we uh were.
- 8:03SPEAKER_03: But what's the ones that everybody's sharing and everybody's taking glee in?
- 8:06SPEAKER_03: It's when the it runs really fast, falls it, you know, goes into a wall, breaks apart, and part of it, its arm falls off and part of it explodes.
- 8:16SPEAKER_03: That that that's the bit, it's like ha ha ha, I wouldn't do that, you know, and so and it's very, very socially acceptable to laugh at how rubbish it is.
- 8:24SPEAKER_03: Um that you do wonder.
- 8:27SPEAKER_03: I was sitting there thinking as I was like chawling at it, I was thinking here this seems like the sort of last the last throws, the last cries of of humans feeling superiority.
- 8:41SPEAKER_03: And you know, next year, the one just broke Hussein Boltz record, right?
- 8:45SPEAKER_03: Next year it's gonna be running it at like six seconds or whatever, and it ain't like falling apart when it gets to the end.
- 8:50SPEAKER_03: So the the speed of progress here I think is uh is something that's meaningful.
- 8:54SPEAKER_03: But there is glee.
- 8:55SPEAKER_03: There's glee when it mucks up, there's glee when it's stupid.
- 8:59SPEAKER_03: Um, and then of course, there is this sort of generalized AI is destroying the environments in which I sit.
- 9:07SPEAKER_03: And in social media, that really is showing off so many people on LinkedIn complain all the time about the slop, which I actually think has gotten mu slightly better in the last couple of months.
- 9:18SPEAKER_03: But so it's there's almost like a sub-industry of people complaining about how terrible AI is, often with articles that appear to have been written slightly by AI.
- 9:30SPEAKER_01: Yeah.
- 9:31SPEAKER_01: Yeah, it's it's very interesting out there.
- 9:33SPEAKER_01: So you say in the article you're talking about um you know, digital transformation, and this really stuck stuck out to me because um, you know, that's been in the in industry for a while now, results may vary.
- 9:50SPEAKER_01: It's definitely been said probably at every corporation in the organ in the world that we're gonna do a digital transformation, we're gonna do this major shift.
- 10:00SPEAKER_01: But you know, you point out, and I kind of was thinking about this sort of passive response to it.
- 10:08SPEAKER_01: Um, you know, the psychological profile of the users has to come into play.
- 10:16SPEAKER_01: And what are we actually transforming?
- 10:18SPEAKER_01: What happened over the last ten years?
- 10:21SPEAKER_01: We're we're digital because we can't help but be digital.
- 10:24SPEAKER_01: The the pandemic forced us to be virtual because we had no other choice.
- 10:28SPEAKER_01: So that's naturally digital.
- 10:30SPEAKER_01: Is that digital transformation or do we just have to shift, right?
- 10:34SPEAKER_01: And then do we put this in the hands of the learning organizations at companies appropriately to execute with employees because the traditional doesn't seem to do it, where you have a training course, we've all built them, you built them, I'm sure, at large companies, you've sent them out.
- 10:57SPEAKER_01: I see it in my world where people say they want training, but their idea of that is this slide deck before they have to use the tools or whatever, some some training course they were required to take, and then they're just sent away into the back into the into the world to try to use these things whether they like it or not.
- 11:22SPEAKER_01: And it's uh you know, it might not be AI transformation and AI uh that's failing, it's our way that we talk to people about it that's failing.
- 11:33SPEAKER_03: Yeah, I mean there's a lot in that.
- 11:35SPEAKER_03: Let's I guess let's start with the digital transformation piece, because we are, to your point, and I think the pandemic did play a role in this, but we are at a point where most companies have digitally transformed in some way, shape, or form.
- 11:51SPEAKER_03: And in the article that I wrote about this, I talk about how we talked to large organizations about digital transformation and what they did and all this kind of stuff.
- 12:03SPEAKER_03: But there's a bit I didn't mention in the article which I think is very important to to cover here.
- 12:08SPEAKER_03: So we're in a phase right now with AI transformation that is similar to the phase we were in when we first started talking to companies about digital transformation.
- 12:22SPEAKER_03: And uh if you're in big tech, which I was, and your job, I guess I guess I still am, and your job is to uh suade people to invest heavily in this thing you call digital transformation.
- 12:45SPEAKER_03: What you're really trying to do is you're trying to get uh you're trying to build momentum.
- 12:51SPEAKER_03: So you you might be spending you know, every day of the week in executive briefings talking to companies saying, you must get on this train and you're trying to actually get enough people on the train to make the theory that you've created, this utopian new world, get enough of them doing it so that everybody else then wants to do it to cat to catch up.
- 13:18SPEAKER_03: And for people that have seen the Gartner hype cyclists, right, you're trying to find those those early adopters who will put up with a bit of pain but will go through this to gain some form of strategic example that then port forces everybody else to cat to catch up.
- 13:34SPEAKER_03: You don't really realize you're doing that at the time because it feels like it's so obvious that everybody must be doing this, and in reality, there's always a choice as to whether you move from one you know from one environment to another until there is no choice.
- 13:48SPEAKER_03: And the point at which there is no choice is because the vendors that you're buying from don't offer it the way they used to offer it, or you're falling massively behind your competition because you don't have it, or whatever it would happen to be.
- 14:03SPEAKER_03: So in this case, we've got to a point almost without realizing it, where organizations have very minimal in-house IT in the way that they did, that they're using various as a service things and predominantly and they're using a lot of software as a service, they're using some platform as a service, and they're using sort of, you know, a little bit of infrastructure as a service, but fairly minimal.
- 14:35SPEAKER_03: And if you were to walk in their data centers, there would be far fewer servers that were there, right?
- 14:39SPEAKER_03: And so as a result, without them even really thinking about it, some of these organizations thinking about it, we have shifted to a point where a bunch of services are running on the cloud, and we've got a much more flexible infrastructure that we're that we're all using.
- 14:58SPEAKER_03: And now the attempt is being made to try to do kind of that all over again, but with AI, and say, look at this cool infrastructure you now have.
- 15:07SPEAKER_03: It would be very easy for you to implement AI on top of that.
- 15:11SPEAKER_03: And if you do, then you're gonna see all of these benefits.
- 15:15SPEAKER_03: So we're trying to get these larger organizations to invest very seriously in AI, and many of them are doing so at quite some speed because of that fear of being left out and the fear of being left behind and all that kind of stuff.
- 15:29SPEAKER_03: Yeah, yeah, yeah.
- 15:30SPEAKER_03: So I think that's the a very important like backdrop.
- 15:33SPEAKER_03: Now, all of that said, when I was doing the you know, when I was helping organizations understand what digital transformation was, and I was talking to them about all the various different things, as I mentioned in the article I wrote about it, there is a there's a bit, there's a obligatory slide or a couple of slides where you're saying, don't forget your people, right?
- 15:55SPEAKER_03: It's this is only going to be successful if you really consider the people that are in this.
- 16:01SPEAKER_03: And as I mentioned in the article, which people can get by the way on humanityworking.net, when I when I mention it, every time I did it, a CEO or a CIO or a COO, they kind of like nod importantly, right?
- 16:21SPEAKER_03: And maybe they would turn to their head of L and D if the head of L and D was in the room, and if not, maybe they turned to the CHRO or something like that, and they would say, Yes, this is very important, isn't it?
- 16:32SPEAKER_03: And then the other part would go, Yes, this is very important.
- 16:34SPEAKER_03: We'll have to have a plan, we'll have to put a plan together for all of this.
- 16:37SPEAKER_03: And then that became like in some organizations, that became the three the three or four words that were exchanged about it and they never thought about it again.
- 16:46SPEAKER_03: In other cases, it became a training program, in other cases it became a full-on organizational change management thing.
- 16:53SPEAKER_03: But most of the time, when these things failed, as they did in some organizations, you could almost always trace it back to them not paying enough attention to that, right?
- 17:03SPEAKER_03: Because people inside an organization are the are the difference between success and failure of the vast majority of projects, right?
- 17:12SPEAKER_03: They're the passive resistance layer, they're the active resistance layer, they are the they act according to their, in many cases, what they perceive their own best interest to be in the short term.
- 17:23SPEAKER_03: They can act uncharacteristically or what appears to be irrationally, they can they can they can do all kinds of things in very invisible ways, often not maliciously, but things that will prevent things from being successful.
- 17:36SPEAKER_03: So we've known this for years.
- 17:38SPEAKER_03: We know you know the whole discipline of organizational change management came out about it.
- 17:42SPEAKER_03: But I I think what is really, really important in this regard is that this is not a question of us just not learning those lessons from digital transformation.
- 17:54SPEAKER_03: It is that we fundamentally misunderstand what AI transformation actually is.
- 18:00SPEAKER_03: And if we try to approach the people readiness aspect of AI transformation in the same way that we should have approached it for digital transformation, it's gonna fail.
- 18:12SPEAKER_03: And I think actually, yeah, we'll we can and we should get into the details of what I mean by that, but I think actually this is we're in real danger here of people fighting the last war and going, you know what, I remember what didn't work with digital transformation, I'm gonna get it right this time and apply it to AI transformation.
- 18:32SPEAKER_03: That's not gonna work because AI transformation is not digital transformation, it is fundamentally different, and it's different in almost every regard.
- 18:43SPEAKER_01: Yeah, yeah, it strikes me another piece to that that is very different this time is that in some cases, obviously it's anecdotal, but it's been written about a bunch.
- 18:57SPEAKER_01: They fired the people first.
- 19:00SPEAKER_03: Yeah.
- 19:01SPEAKER_01: So like digital transformation wasn't introduced as a way we can you know completely wipe out all of the people, it was a way to change what the people are doing.
- 19:13SPEAKER_01: This one was kind of like, oh, this one's gonna mean we can wipe out the entire organization because AI is gonna do everything, and they did that first before that it was even tested, it felt like, in in giant chunks, which is another you know, differentiator that I hope we we we don't do that again, uh or at least learn from it in in in large part.
- 19:37SPEAKER_01: And I think you know, you touched on on something there, the meeting where the three people at the top of the organization agree that what's being said is important and then that's where it ends.
- 19:48SPEAKER_01: And I think, you know, partly that is because not necessarily their fault, but unless the people in charge of those types of things, like your CIO, your your chief people officer or whatever, are the type of technology curious type person, they're going to have to delegate that job down.
- 20:10SPEAKER_01: And they're probably not gonna understand it to the level that they need to.
- 20:15SPEAKER_01: And again, it's the psychology of well, we said we were gonna do it, now we implemented it, I gave it to this person, and I have to trust that they're gonna execute.
- 20:26SPEAKER_01: And it's to your point, such a different beast, this AI transformation.
- 20:31SPEAKER_01: So talk a little bit more about that and how that maybe the trust and expertise becomes paramount.
- 20:38SPEAKER_03: Yeah, so how it's different, and let's compare it directly to digital transformation.
- 20:43SPEAKER_03: So for those that sort of are not deeply familiar with the term of digital transformation, the sort of like back of an envelope version of what digital transformation was was we're gonna basically take all of this infrastructure that you spend an inordinate amount of your time and money maintaining, and we're gonna free you up from having to do any of that, and we're gonna put it into an environment that is sort of inherently self-improving.
- 21:17SPEAKER_03: So it's not like the old the old world was you figure out what you need to run, you figure out what you're gonna run it on, you shove that stuff in data centers, and then every three years you replace a server and you employ a bunch of people to maintain that infrastructure so that it can continue to provide you with the services that you need.
- 21:44SPEAKER_03: And the new version of that was outsource, it was like outsourcing 3.0.
- 21:50SPEAKER_03: Sometimes people called it that, right?
- 21:51SPEAKER_03: But basically, the new version of that was give it to Microsoft, give it to Amazon, and they'll take care of all of that.
- 22:00SPEAKER_03: Stuff so that you don't have to worry a pretty little head about it.
- 22:02SPEAKER_03: But also as they're doing that, they will make sure that it's continuously improving and continuously getting better and all of and all of that kind of stuff.
- 22:13SPEAKER_03: And you are going to worry about managing your stuff at a much higher level.
- 22:17SPEAKER_03: And then over time, you not so much you, but the companies that you're buying stuff from will move you up the stack.
- 22:25SPEAKER_03: So you won't be sitting at the infrastructure layer.
- 22:28SPEAKER_03: Now you'll be sitting at the platform layer, or you'll be getting rid of this software that you've had to install and maintain yourself and replacing it with a software as a service version where you're again having to do less and less and less to maintain it.
- 22:41SPEAKER_03: So there was with digital transformation, there was a subcurrent, like an undercurrent of some of the stuff that you used to do, you don't have to do anymore.
- 22:51SPEAKER_03: Right.
- 22:51SPEAKER_03: And as a result of that, there could be like, oh, we don't need this role, or we don't need that role in order to be able to do it.
- 22:59SPEAKER_03: But it wasn't, it there was part of it, but the benefits were flexibility.
- 23:06SPEAKER_03: The benefits were focusing on stuff that is much more core to the business, and taking a bunch of things that you were having to focus on in order to be able to work on your business, taking those off your plate to allow you to focus on the business more.
- 23:23SPEAKER_03: That was the extent of the human of the human dimension of digital transformation.
- 23:32SPEAKER_03: Now, AI transformation.
- 23:36SPEAKER_03: Forget about the technology for a minute.
- 23:38SPEAKER_03: Forget about models and agentic harnesses and whatever it is you want to talk about that excites you about AI or scares you about AI.
- 23:50SPEAKER_03: Fundamentally, what this is about is changing across an entire organization changing what people do and how they do it everywhere.
- 24:11SPEAKER_03: So the irony is here is that in many ways this is some of the most advanced technology that we've ever seen in the history of mankind and at the same time is the most human of any of these transformations because there is not a person in an organization whose work has either hasn't been disrupted massively or will be disrupted massively by AI.
- 24:41SPEAKER_03: So we're going to be doing different things in different ways with different teams in different organizations.
- 24:47SPEAKER_03: Everything, everything about how we work, the way we work, who we work with, all of that is shifted as a result of this.
- 25:00SPEAKER_03: And I think we got an insight into a bit of that when we started all working a bit differently due to the pandemic, and we started working remotely and hybrid and stuff like that.
- 25:09SPEAKER_03: But this is that on steroids.
- 25:12SPEAKER_03: And so digital transformation was a technology transformation with a human aspect to it.
- 25:18SPEAKER_03: AI transformation is a human transformation with a technology aspect to it.
- 25:23SPEAKER_03: And so it is completely flipped.
- 25:25SPEAKER_03: And I think almost everybody is not getting that at this point.
- 25:29SPEAKER_03: They're thinking about it as the tech.
- 25:31SPEAKER_03: They should be thinking about it as the massive disruption for the way work happens, of which tech choices are a part of that.
- 25:40SPEAKER_01: Yeah, that's great.
- 25:41SPEAKER_01: Yeah, that's so true.
- 25:42SPEAKER_01: I mean, I think of like a very simple digital transformation was taking what used to be a paper-driven process and turning it into an electronic form that could be routed electronically.
- 25:53SPEAKER_01: That's a digital transformation in its purest form.
- 25:56SPEAKER_01: It was a technology.
- 25:57SPEAKER_01: Oh, you don't have to put this in an envelope anymore for inter-office mail.
- 26:01SPEAKER_01: You have email, right?
- 26:02SPEAKER_01: So digital transformation.
- 26:04SPEAKER_01: This is psychological transformation.
- 26:07SPEAKER_01: This is uh behavioral change and asking people to really look at how they do what they do.
- 26:17SPEAKER_03: Well, yeah, and against the backdrop that we've already just alluded to, right?
- 26:21SPEAKER_03: Against the backdrop, we're all where very like hand on heart, very few people want it.
- 26:30SPEAKER_03: And so that's a massive, massive shift to all of these things and unwelcome.
- 26:38SPEAKER_03: No matter how many, you know, no matter how many ads they do, right?
- 26:43SPEAKER_03: I don't know anybody who's like seen an ad for, you know, I think probably Anthropic is still the one that people feel a little bit more cuddly about for whatever reason, but I don't think I I don't think I've seen anybody's like, oh now I've seen an ad from Anthropic, I feel much better about it.
- 26:58SPEAKER_03: And they do the weirdest, like the marketing, this is like of a totally off topic in a way, but the marketing is weird too.
- 27:07SPEAKER_03: I mean, like really weird.
- 27:09SPEAKER_03: Because if you think that when they have a senior leader going, oh, it's gonna lead to mass unemployment, that if you don't think that that's part of the marketing, you're not that is part of the marketing.
- 27:20SPEAKER_03: It's not speaking to you, it's not speaking to the populace, it's speaking to the other CEOs, going, hey, you know, all those pesky humans that you employ, you don't you're not gonna have to worry about them anymore.
- 27:30SPEAKER_03: But that's a weird, weird way of pushing the the technology.
- 27:37SPEAKER_01: Yeah, and then and when that question is absorbed by those senior leaders, then they start asking their team, so when am I getting this headcount reduction I was promised?
- 27:48SPEAKER_03: Uh and then and it leads it back to it must be failing then because I'm not.
- 27:54SPEAKER_01: Exactly, exactly.
- 27:55SPEAKER_01: Wow, yeah, that's interesting.
- 27:57SPEAKER_01: I think uh just a quick side note, uh, because of when we're recording this, we're just only two days now past what the Terminator determined would be the clarity on August 29th at 214 a.m.
- 28:10SPEAKER_01: And I find it very interesting that if you believe in that sort of stuff, have we?
- 28:15SPEAKER_01: Now it's just a waiting game.
- 28:17SPEAKER_01: Yeah.
- 28:18SPEAKER_01: Like, did it happen?
- 28:19SPEAKER_01: Did did did it happen that we didn't know of?
- 28:21SPEAKER_01: It was anthropic, not cyberdyne.
- 28:23SPEAKER_01: I don't know.
- 28:23SPEAKER_01: Very fascinating.
- 28:24SPEAKER_01: So um I loved in the article where you talked about, you know, examining how your organization needs to be ready, figuring out what it needs to design your organization.
- 28:35SPEAKER_01: It's like, okay, this is here now, let's take a step back.
- 28:38SPEAKER_01: And I think it's that taking that step back that is directly in contrast to this advertising that you're talking about and this promise that you're talking about, which is accelerate, move forward, it's here, let's go, we're we're finished, as opposed to okay, it's here now, let's make sure we use it correctly and and work through this correctly.
- 29:02SPEAKER_01: And that that step back is hard to swallow also when you talk about you know the things that are being funded, the things that are being spent by corporate corporate organizations to to move forward.
- 29:16SPEAKER_01: So how how do you square that and can we take that step back and do this right?
- 29:21SPEAKER_01: Is is there a is there a opportunity here to to do that, do you think?
- 29:28SPEAKER_03: I I think this is possibly the most important thing that we should be thinking about.
- 29:37SPEAKER_03: One of the one of the beauties of the work that I've been doing over the last year is sort of like being able to see across organizations.
- 29:46SPEAKER_03: And I'll tell you one pattern that I've seen with almost everybody that contacted me and asked me for help.
- 29:55SPEAKER_03: Almost every organization thinks they're behind.
- 29:59SPEAKER_03: They think that that their peers or the tech companies and so on have got this AI thing figured out way better than they've got it figured out.
- 30:11SPEAKER_03: They are frequently frustrated by the slowness of their own IT organization, and they're pointing at them and blaming them and saying, look, other organizations have deployed Fable.
- 30:29SPEAKER_03: Why haven't, you know, why haven't we?
- 30:31SPEAKER_03: Why are you pushing back?
- 30:33SPEAKER_03: So there's always been that tension between IT and and the business, right?
- 30:38SPEAKER_03: And IT has an impossible job, right?
- 30:41SPEAKER_03: You're supposed to keep us safe and you're supposed to make sure that we realize business value.
- 30:46SPEAKER_03: And IT looks at this stuff and says, well, you know, I can't even begin to guarantee safety if the if everybody in our entire company has access to this monstrously powerful model, and I don't have any controls over what they do with this power.
- 31:01SPEAKER_03: Right?
- 31:02SPEAKER_03: So I get the attention, but so much of it comes from this idea of we're behind, we're behind, we're behind, we must deploy the next thing, we must deploy the next thing.
- 31:12SPEAKER_03: And almost none of it is centered around truly stopping and truly thinking about what does the organization need to do to maximize the value of the investments that it's already made.
- 31:27SPEAKER_03: And I I do a thought experiment with leaders and I say, I want you to imagine, like, we don't know whether there's going to be in quotes a pause at some point in the future.
- 31:38SPEAKER_03: You're seeing increasing pressure from some to implement a version of a pause.
- 31:44SPEAKER_03: But I do a thought experiment with leaders and I say, I want you to imagine just for a second that there's no more frontier model development in the next three years.
- 31:58SPEAKER_03: And I want you to imagine that the technology that we have today that allows us to, you know, build and manage agents doesn't advance either.
- 32:14SPEAKER_03: What could you do in the next three years?
- 32:18SPEAKER_03: And would the lack of advancement in either of those areas be a serious bottleneck, or have you still got plenty to do to improve your organization?
- 32:26SPEAKER_03: And to a person, including to some of the most technical people that I've spoken to, they're like, oh man, I mean, if if everything paused here, we could innovate like crazy for the next three years, and we wouldn't even be half done in terms of realizing the value of what we have.
- 32:44SPEAKER_03: And so it's a very strange thing whereby you've sort of got like these organizations going, we must move faster, we must move faster, that are the tech companies themselves, and we must move faster.
- 33:00SPEAKER_03: Always goes back to a variant of because China or because our competitors or because open weights or because whatever, right?
- 33:07SPEAKER_03: But we must move faster, we must move faster, is that is what's happening on the frontier itself.
- 33:12SPEAKER_03: Just behind that, you've got all of these organizations saying we must deploy this, we must deploy that because our competitors are.
- 33:19SPEAKER_03: And then there's a reality behind that, which is that of all of the capabilities that are available to us, we're maybe getting 1% of the value that we could be getting if we thought about this in a different way.
- 33:35SPEAKER_03: So stepping back in many cases could be the most powerful thing that you could do because you would then start to think about seriously about what is the design of my organization and what are the capabilities of the people that I need in my organization in order to be able to use this incredibly powerful, disruptive, transformational tool that only showed up a couple of years ago, right?
- 34:04SPEAKER_03: And and that can't be the afterthought anymore.
- 34:08SPEAKER_03: That is the thought, right?
- 34:10SPEAKER_03: In a sense, the technology is the afterthought or should be, right?
- 34:14SPEAKER_03: But we've got this, as we do so many times, we've got this us backwards, we're just simply buying into the technology and saying all that all that complicated stuff that's difficult to measure, and the human bits and the organizational design bits, we'll figure that out later.
- 34:27SPEAKER_03: But at least let's make sure that we're on the top, the top-tier technology.
- 34:31SPEAKER_03: Well, that that's not stopping until government stops it or somebody else, you know, until other regulations come in.
- 34:38SPEAKER_03: So you will always be doing this chase-up game, and you will never be maximizing the benefits that you get out of it until you stop playing that game and start flipping it around.
- 34:49SPEAKER_01: Yeah, and I think that that's such a good point.
- 34:52SPEAKER_01: And I think we have to look at the levers that you have at your disposal too, because right, you can't ignore that things are changing, right?
- 34:57SPEAKER_01: Otherwise, you may have hired a a department of prompt engineers six months ago, and now they're useless, right?
- 35:06SPEAKER_03: So you can't take your eye off what's just what did you see with regard to prompt engine with regard to prompt engineering?
- 35:12SPEAKER_03: Because you know, you're in an organization where you've got like very, very capable people that are trying to figure out what to do with AI.
- 35:21SPEAKER_03: What what's your take on the on the prompt engineering revolution, as it were?
- 35:27SPEAKER_01: It feels like it lasted about five minutes in the grand scheme, where they're like the most important thing we could possibly do is make sure we have really good prompt engineers.
- 35:37SPEAKER_01: And then you turn around and you're like, oh, you don't need those anymore.
- 35:40SPEAKER_01: You know, you can actually ask the model to write me the prompt that it needs, right?
- 35:44SPEAKER_01: So what it what it's really feeling like to me right now at this stage with it is really opening people's mind up to the possibility that is available to them and getting comfortable with it, and just getting comfortable that things are rapidly shifting, right?
- 36:02SPEAKER_01: So it that is a new skill for a lot of people.
- 36:07SPEAKER_01: You know, you talk a lot about adaptability and resilience, and that is everything right now.
- 36:15SPEAKER_01: Is is is the these tools are here.
- 36:18SPEAKER_01: We're not getting rid of them, but we should learn to and adapt to figure out how how can we make these work for us.
- 36:26SPEAKER_01: And we talked, you know, a little bit about the the interfaces that we deal with and and the software that we deal with on a day-to-day basis.
- 36:34SPEAKER_01: I just thought it was amazing.
- 36:36SPEAKER_01: You said people don't even want this, they didn't even want some of the software that was forced upon them either.
- 36:42SPEAKER_01: Like it's not just AI, they didn't like it, you know.
- 36:46SPEAKER_01: I'm sure there are probably not as many anymore, but there were probably people when Microsoft Word came out that just wished they could have their typewriter back.
- 36:54SPEAKER_03: I trained a bunch of them.
- 36:54SPEAKER_03: That that's how old I am.
- 36:56SPEAKER_03: So but that's absolutely true.
- 36:59SPEAKER_03: I do think that this the the degree of resistance is is greater here, though, but I think it's just because people are like it's touching a nerve, right?
- 37:11SPEAKER_03: That you could be very happily superior as a human for ever since this tech revolution started, right?
- 37:20SPEAKER_03: And now are we?
- 37:23SPEAKER_03: You know, and around us is you know, when you get into your car and increasingly it it sort of is figuring out how to drive and it's probably doing as good a job or better than you, and you go and you you go to work and some of the things that you took great pride in in terms of you being able to do them, you can now just like throw it over to a prompt and and you know it'll probably do it as nearly as well as you and or maybe better than you in some aspects and you're doing things a little bit better than it.
- 37:56SPEAKER_03: Right.
- 37:57SPEAKER_03: We're th the old tech you could at least be yeah, but I'm better.
- 38:06SPEAKER_03: And I I I almost think it's probably what I wonder what the chess community really felt like when Deep Blue beat Kasparov for the first time.
- 38:20SPEAKER_03: I'm sure some of them were quite excited, and I'm sure some of them felt like a Rubicon had been crossed, and it would never quite be the same again.
- 38:30SPEAKER_03: Now, what was fascinating is that we now live in a world where chess is actually more popular than it has literally ever been, but that's because we found a way to sort of like have humans use AI to or use use you know chess version, you know, AI for chess, I suppose would be the best way to say we've found we found ways of humans using AI to help them figure out how to be better human players, and then we've used the other sort of technology things to allow them to be able to connect with each other and play with each other and then also sort of like test fairly well when you know when the engines are being used versus when a human is using them.
- 39:12SPEAKER_03: But there was a there was a point where you're like, oh, I used to be the best chess player in the world, like Kasparov himself for years.
- 39:20SPEAKER_03: I'm the best chess player in the world.
- 39:22SPEAKER_03: Yeah.
- 39:22SPEAKER_03: Now he's not, yeah.
- 39:24SPEAKER_03: And the entity that is better than him is a frickin' machine, and we're getting to that and we're getting to that point for each of us.
- 39:33SPEAKER_03: Each of us are discovering it at our own time.
- 39:35SPEAKER_03: But that is I do think that that bit is like different for people to deal with.
- 39:43SPEAKER_01: It's literally chipping away at our ego day by day.
- 39:47SPEAKER_01: Like, like little by little, like, yeah, I got that.
- 39:51SPEAKER_01: Did you see just total again sidebar?
- 39:53SPEAKER_01: But I saw an article that said somebody sent Moby Dick through one of those filters to detect AI, and it came out with like 67% AI written.
- 40:03SPEAKER_01: It's like, yeah, it was written in 1863 or whatever.
- 40:06SPEAKER_01: I don't think there was any AI.
- 40:08SPEAKER_01: Um so we won't get into whether that's an indication that it's not very good.
- 40:13SPEAKER_03: That's my I've got it uh up here somewhere.
- 40:16SPEAKER_03: And I and you know, I love I I I'm obsessed with old books, but but that one's a that one's a struggle.
- 40:26SPEAKER_01: Uh so let's let's try and bring this home.
- 40:30SPEAKER_01: You know, you talk about that you you won't get a full value out of your investment until you fundamentally change your organization, structures, practices that no longer fit.
- 40:44SPEAKER_01: What kind of shape does that take for organizations now?
- 40:47SPEAKER_01: What what might this start to look like for for a company to be able to compete in this environment?
- 40:54SPEAKER_03: So that could be five hours in its own right.
- 40:56SPEAKER_03: So we won't we won't go into the detail of all that.
- 40:59SPEAKER_03: But the one thing that I will say, and this I think this should probably be a takeaway for anybody, if you're imagining that the structure of your organization that you had, let's say two years ago, will be appropriate is appropriate even now, but will be appropriate in two years' time, I think you're massively, massively missing a trick.
- 41:29SPEAKER_03: Organizational designs and structures, they form multiple purposes, right?
- 41:37SPEAKER_03: And it's important to kind of like understand what those purposes are, I think, which as you sort of think through this.
- 41:43SPEAKER_03: So one purpose, an important purpose, is we use an organizational design in order for us to create a model that leaders and employees can understand.
- 42:00SPEAKER_03: So, for example, I recently joined Adobe as their principal AI technologist, and one of the things that I had to understand in order to be able to figure out how to do my job is how is Adobe structured?
- 42:15SPEAKER_03: Who are the people and where do they sit and how do I find them, and you know, all of that kind of stuff.
- 42:22SPEAKER_03: And so the structure of the organization allows me to do that.
- 42:28SPEAKER_03: And the simpler that structure is, and the less organic, if you like, that structure is, the the easier it is to be able to accomplish that.
- 42:38SPEAKER_03: So that does serve a purpose, a real purpose, a valuable purpose.
- 42:42SPEAKER_03: And when that breaks down, then it can be difficult for people to understand it in the way in the way in which they did previously, and it can be difficult to find the right people in the way that you need to in order to be able to get your work done.
- 43:00SPEAKER_03: Another aspect of it that organizational structures serve, have served historically, is that they give people some it's not talked about a lot this, but they give people some comfort and structure and some a sense of stability.
- 43:13SPEAKER_03: And if you don't believe that that's important, think about what happens inside an organization when an organ when the CEO has the dreaded, we're gonna do a re-org.
- 43:24SPEAKER_03: When CEOs say we're gonna do a re-org, there's almost nobody in the organization that is like rolling up the sleeves going, sweet, a re-org.
- 43:32SPEAKER_03: Nothing I love more than a re-org, right?
- 43:35SPEAKER_03: People don't like re-orgs because re-orgs change that mental model that I was talking about.
- 43:39SPEAKER_03: They introduce uncertainty and all of that kind of stuff.
- 43:42SPEAKER_03: And so the structure is in part a psychological crutch, right?
- 43:49SPEAKER_03: It is a thing that allows you to be able to say, okay, I understand the rules of the game here.
- 43:56SPEAKER_03: I understand what I'm sitting in.
- 43:58SPEAKER_03: And by the way, 80% of this is subconscious.
- 44:00SPEAKER_03: Most of us don't spend our lives obsessing over organizational structures.
- 44:03SPEAKER_03: But it's a but it does it does fulfill some of those things.
- 44:07SPEAKER_03: Now, what does it create, though, that's problematic?
- 44:10SPEAKER_03: Well, what it creates that's problematic is it's by definition, it's rigid, right?
- 44:15SPEAKER_03: And so it serves a certain purpose until all of a sudden it doesn't serve that purpose.
- 44:19SPEAKER_03: That's why those reorgs happen in the first place, right?
- 44:21SPEAKER_03: It's like we used to be this kind of company, but now our structure is getting in the way of what we need to do, and so therefore we need a different kind of structure going forward.
- 44:30SPEAKER_03: And maybe that's going to apply for a certain period of time.
- 44:34SPEAKER_03: The fact that things are getting to a point where organizations need to be so flexible and so adaptable as organizations has led many people to question whether the traditional sort of idea of an organizational structure is itself broken.
- 44:53SPEAKER_03: That led to things like, you know, we've spoken slightly about things like holocracy and the teal movement and stuff like that.
- 45:00SPEAKER_03: I will say we've we've gone through a period of time now where people have been, you know, seriously playing with holocracies and self-organizing teams, organizations, and so on and so forth.
- 45:14SPEAKER_03: And most of the large-scale versions of that have not succeeded.
- 45:19SPEAKER_03: And actually, some of the famous ones, they've kind of like pulled back from it and introduced sort of more traditional structures associated with it.
- 45:28SPEAKER_03: I believe the reason for that is some of the stuff that we just spoke about, right?
- 45:32SPEAKER_03: Having having a structure that people understand, being able to be able to sort of like measure how the organization is doing, also sort of like elements of fairness, like people want some structure in terms of how reviews are done and you know, all of that kind of stuff, and they want to be able to understand to understand it.
- 45:51SPEAKER_03: So there is this tension here between those, you know, between these different things.
- 45:56SPEAKER_03: I would say that the first thing to do if you are trying to understand what this means for the structure of you as an organization, the first thing to do is actually understand the archetypes, uh, what organizational archetypes really are, organizational design architect archetypes really are.
- 46:21SPEAKER_03: And I would recommend strongly a book by a guest that we've had previously on the podcast.
- 46:26SPEAKER_03: Henry Mintzberg was the guest, and uh his book was Understanding Organizations Finally.
- 46:33SPEAKER_03: We'll put a link to that in the show notes.
- 46:36SPEAKER_03: And what Henry does so beautifully is he go, he says that there isn't really such a thing as a best and a better, or you know, that this type of you know, organizational design is better than that type of organization.
- 46:50SPEAKER_03: There are types of organizations, and those types of organizations lead you towards a different type of design.
- 46:58SPEAKER_03: So you don't design a tech company in the same way that you do a theater company or a hospital or whatever, and there are reasons for that.
- 47:08SPEAKER_03: And so understanding what those reasons are gets you towards a point where you sort of like understand what archetype you are, and then that's and then you're playing within that field.
- 47:18SPEAKER_03: So I think sort of like starting by understanding that is really important, but then there's two other principles that I think are super important.
- 47:26SPEAKER_03: So the first is that because of the point that you made about adaptability and resilience and so on, we've got to get ourselves out mentally completely out of the space of this is going to be our structure for the next five years to lead us towards this inherent future.
- 47:44SPEAKER_03: Instead, what we need to be doing is we need to say, this is where we are right now.
- 47:50SPEAKER_03: It makes sense for us to move in this direction for the next three months.
- 47:57SPEAKER_03: Right?
- 47:58SPEAKER_03: And moving in this direction for the next three months could consist of some experiments over here, some tweaks and some changes to organizational design over here.
- 48:10SPEAKER_03: Maybe we're firing up like a mini startup inside the company over here, and we're seeing what happens to that.
- 48:16SPEAKER_03: We're doing a whole bunch of different things and we're experimenting within the archetype that we are.
- 48:22SPEAKER_03: And then also related to that, and this is the one thing that I think people are missing right now, and is going to be very important.
- 48:34SPEAKER_03: I think there's there needs to be this idea of swarming.
- 48:40SPEAKER_03: Have you seen the Odyssey yet?
- 48:43SPEAKER_03: Yes.
- 48:45SPEAKER_03: So forget about whether you think the Odyssey is amazing, good, indifferent, or whatever.
- 48:50SPEAKER_03: It's an achievement, right?
- 48:51SPEAKER_03: It is an impressive piece of industry, if you like, right?
- 48:58SPEAKER_03: And one of the things that as that I was thinking about that the yesterday evening was before Christopher Nolan put a pen to paper, the Odyssey didn't exist as a film.
- 49:21SPEAKER_03: It didn't exist at all.
- 49:23SPEAKER_03: It was Homer's poetry.
- 49:25SPEAKER_03: There were previous examples of it being done, but it didn't exist.
- 49:30SPEAKER_03: He writes this thing, he obviously is lucky that he's you know got a great relationship with his studio and he's gonna get funding and all of that kind of stuff.
- 49:38SPEAKER_03: But then it's like, okay, now we're gonna make a film.
- 49:42SPEAKER_03: And then from the moment that you make a film, you've then got hundreds and hundreds of people swarming around this concept of the Odyssey as an idea as a concept in Christopher Nolan's head, through to that final cut and it's a wrap.
- 50:07SPEAKER_03: And at the end of it's a wrap, you've then now got all of that stuff, and now you've got a new team that is assembling that is swarming around the idea of taking all of that footage and turning that filter footage into an end product that we're ultimately gonna see.
- 50:28SPEAKER_03: That group of people, that particular group of people, didn't exist either and swarmed around that and then disbanded.
- 50:38SPEAKER_03: And the result of all of that is that in a period of basically months, really, you've gone from and of course there's all the marketing and stuff that happens after that, and when we're gonna be in theaters and so on, but basically in a period of months, you've gone from nothing to what we ended up seeing in cinemas, and that was not handed over to a department that had been that exit had existed for ten years or anything along those lines.
- 51:12SPEAKER_03: It swarmed, it disbanded, it swarmed, it disbanded.
- 51:15SPEAKER_03: And the amount of focused productivity you get around this idea of swarming and disbanding is I think monumental.
- 51:26SPEAKER_03: And so AI enables us to be able to do that, to do that kind of thing.
- 51:32SPEAKER_03: And so I think, I think we're gonna shift to a world where institutional knowledge is maintained inside organizations.
- 51:43SPEAKER_03: People are valued for their, you know, for the stuff that they can contribute in a bunch of different ways, whether they're really good at planning, whether they're really good at executing, whether they're really good at prioritizing, whatever it happens to whatever it happens to be, that's the value that they provide.
- 52:05SPEAKER_03: But then when it comes to actually doing stuff and and creating value, that's when the swarming thing comes in.
- 52:16SPEAKER_03: And if you speak to people in the movie industry, I mean, you talked about adaptability and resilience, right?
- 52:24SPEAKER_03: The the personification of adaptability and resilience because what they're working on the movie they're working on this time is different to the movie they're working on that last time.
- 52:32SPEAKER_03: They've been fired from dozens of them, they just keep going, they keep going, they do the next thing.
- 52:38SPEAKER_03: Oh, we're gonna, oh, we're doing IMAX now?
- 52:40SPEAKER_03: Okay, let's figure out how to do that.
- 52:41SPEAKER_03: It's it's it's there inherently in every single thing that they're doing.
- 52:46SPEAKER_03: So people should really think about that.
- 52:48SPEAKER_03: They should think about what that means, what that is, and what it means for their organization.
- 52:53SPEAKER_03: Because I do think AI is enabling that, and I and I think that as we start designing our organizations, we need to really think of that as a mental model.
- 53:02SPEAKER_01: Yeah, I love that.
- 53:03SPEAKER_01: I think that's really sharp.
- 53:04SPEAKER_01: Interestingly, to talk about the Odyssey, right?
- 53:07SPEAKER_01: So he shoots it on 70 millimeter, and to properly see it, you have a choice of 14 different locations in the entire country that you can do that.
- 53:15SPEAKER_01: Yeah, precisely.
- 53:16SPEAKER_01: And and it's for no other reason than that's just what he wanted to do, and he thought it represented it well, and so he did it, and it was extremely difficult.
- 53:27SPEAKER_01: And I'm finally gonna see it in 70 millimeter here in a in a week or so, and then it's gonna go away.
- 53:32SPEAKER_01: Like it used to be.
- 53:33SPEAKER_01: I'm lucky to live in Los Angeles area.
- 53:35SPEAKER_01: There's three 70 millimeter places, but now there's only one.
- 53:40SPEAKER_01: And at a 6 a.m.
- 53:42SPEAKER_01: showing at a 2 a.m.
- 53:44SPEAKER_01: showing you cannot get a seat every day.
- 53:47SPEAKER_01: Every day.
- 53:48SPEAKER_01: It's wild.
- 53:49SPEAKER_01: So he's made something extraordinary.
- 53:51SPEAKER_01: Uh and I I think that that is a a good way to wrap it here because I think you're absolutely right.
- 53:58SPEAKER_01: We can build something extraordinary if we put our minds to it here, um, that you know we'll will live on and uh in our organizations.
- 54:08SPEAKER_01: That's pretty powerful stuff.
- 54:10SPEAKER_01: So um yeah, so why do they fail?
- 54:14SPEAKER_01: Because we approach them wrong.
- 54:16SPEAKER_03: Yeah.
- 54:17SPEAKER_03: It's a human, it's a human thing, and that's what everybody needs to needs to bear in mind.
- 54:23SPEAKER_03: That that whole thing that we said we alluded to a while back, which is you know, what's the best definition of AI, a bad choice of words in the 19 in the late 1950s or whatever it is.
- 54:33SPEAKER_03: It's that it's that kind of thing.
- 54:36SPEAKER_03: Like get the this is a massive transformation to how people are working, and if we're not thinking about what that means for how our organization should be designed, how we should train people, how should we, how we should get people ready for constant, continuous change, we're we're completely backwards.
- 54:56SPEAKER_03: And my concern is that 90% plus of organizations are approaching this completely backwards.
- 55:05SPEAKER_01: Well, good spot to land it, Paul.
- 55:08SPEAKER_01: Until next time.
- 55:09SPEAKER_01: Cheers.
- 55:10SPEAKER_01: Have a good one.
- 55:11SPEAKER_01: Cheers.
- 55:12SPEAKER_01: Bye.
- 55:15SPEAKER_00: Humanity Working is produced by Matt Neal.
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- 55:24SPEAKER_00: It makes a huge difference in helping others find us.
- 55:27SPEAKER_00: And don't forget, you can find all episodes and get our weekly newsletter at humanityworking dot net.
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