Welcome And Guest Introduction

SPEAKER_00 0:00

Welcome to Digitally Curious, a podcast to help you navigate the future of AI and beyond. Your host is world-renowned futurist and author of Digitally Curious, Andrew Grill.

Protecting People As A Business Case

SPEAKER_01 0:15

My guest today is Simone Carroll, one of the most distinctive executive voices on the future of work operating the world right now. Over 25 years, she's led people, technology, digital and brand functions through the eye of some of the most profound industry transformation in our era. Print to digital advertising, in-store to omnichannel retail, and fossil fuel generation to renewables. She's now based in London, writing about the future of work on Substack and bringing that same rigour to bear on the question every organization is currently getting wrong. Not how to adopt AI, but how to redesign work around it. This episode was inspired by her Substack post that carries a warning every leader needs to hear. Work has moved upstream. And if your organization isn't redesigning around it, you're already behind. Welcome to the show. Thank you. Thanks for having me. Now, some of the things in the introduction there we're going to unpack, but a lot of things are dear to my heart. And the reason for this podcast, apart from you're be a fantastic guest, is I have I want answers to a lot of these questions. I get asked all the time by my clients on stage, you know, will AI take our job? There's the pithy answer, but I want to spend the podcast delving a lot deeper into it. So some of the things that I've just must ask, let's look at the commercial provocation. You've only ever taken roles where the leader genuinely wanted to protect people through transformation, not just survive it. So, in a world obsessed with efficiency and headcat reduction, why is that a commercial position and a soft one?

SPEAKER_04 1:40

I think it's really easy if you look back on case studies of the past. You pay for people on the way through the organization with your training and employee support, and you pay for them when they leave as well, and sometimes too early with your IP at the door at the same time.

SPEAKER_01 1:59

So your Substack argues that workers moved upstream, and I'd like to unpack that in plain language. What does it actually mean? And what's the business consequence for a CEO or board that misses it?

SPEAKER_04 2:09

We need to have a look at a number of different case studies. So I the reason why I love talking to you is you deal with different case studies all the time, and we get to talk about this. And it's important we do talk about this in our community, in our HR community, in our change community. Upstream simply means that you're moving employees or your talent to where the most valuable work gets done. So the first question is for any organization, any industry, is where is that value? And that's a strategy conversation that needs to be had. So I think what's interesting is if we look at it company by company, is and sitting down with the the executive team, is where is that value today? Where does that where is that performed today? And how might AI change that? And that's where the conversation starts. Now, if we were spending a lot of our time downstream doing the things that are repeatable that we know AI can do today, and yes, some of these are entry-level jobs, we can talk about that later. What happens to entry-level jobs? I know that that you're definitely concerned about that as well, and you think about that as well. But what we want to be we want to start to do is focus on where the customers see us adding value and where we can spend more time getting ahead of our competition. So this is a this is a fantastic opportunity. AI coming in, where can we use it to get some of the costs out of our business, reduce some of that replicable work, and where can we start to spend more time giving the customers really what they're looking for?

What Work Moving Upstream Means

SPEAKER_01 3:44

So one thing I want to unpack is why now? So ChatGPT was launched November 2022. So we're kind of three years into it now. What I'm seeing is that now people are waking up to it. It seems more urgent now. Why has it taken that three-year lag to get to the point where we're having these sort of discussions that actually make sense? Three years ago, this would have been a nice discussion, and it's coming, but it's now so urgent in 2026.

SPEAKER_04 4:07

I think this is very interesting because this is this why now question I've dealt with my whole career. I know this is something that you've been across as well. I remember first seeing this in the Yellow Pages business in the early 2000s, a long time ago, where uh executives were talking about uh print revenue and the future is still print. And meantime, consumers were buying pizzas online, and that that technology was coming into play in the consumer world. We were on Google, but we're still trying to hold on to these old revenue models where we were making money from print. Now I'm sure that this was also happening in in uh years before that when it comes to things like um the ice industry being killed by the refrigeration industry, um, for example. I haven't thought about that analogy before, but it's probably very clear, yeah. Exactly right. So technology always comes along. The business usually tries to hold on to that revenue model because that's how we get paid. And that's that's natural, that's normal. But meantime, we start to see this disruption or or this uh consumers starting to grab hold of that technology. And I think we're at that point. We're at that point where the majority of consumers get AI. It's it's not mind-blowing anymore, it's it's exciting, it's interesting, the barriers to entry from a business point of view are incredibly low right now. And uh if if market leaders want to remain profitable or market leading, they need to get ahead. So I think that's why they're starting to invest in this this strategy space.

SPEAKER_01 5:43

Where does the strategy work start on AI? So we've got, as you say, everyone's using it. There's probably a lot of shadow AI where people are using AI and we don't even know that they're using it. Um my view, and I actually had a uh discussion, had a presentation a couple weeks ago to a group of um board chairs. Yeah I think it starts at the very top. If you can get the board on board, then the chief executives sort of fall in line. Uh, where do you think the the pressure point is and the the the path where of least resistance but also the the most um leverage can be made?

SPEAKER_04 6:16

All right, well you know, Andrew, I'm not always agreeable, but I 1000% agree with you that um it's that the board play a major role right now. Um and they what they need to do is be giving management the permission to innovate. So always when it comes to innovation, you need equal governance. And there's been a lot of innovation in the last 20 years and a lot of governance to balance out that innovation and growth. But I'd say that we're we're probably at a point where the boards are probably over-indexing on the governance. The audit committee's you know, risk um reward programs are probably a little bit slower than what innovation requires. So it's really down to a courageous board to give the management team permission to play and be curious to use your your terminology when it comes to AI and have these strategy conversations around how AI can advance the organization. Now, today, let's move on. Again, because those barriers to entry are so slow, and I actually think one of the greatest risks of an organization is going to be that disruption that's been enabled by AI by players that you haven't even heard yet, if if you're aboard.

SPEAKER_01 7:33

So I I I love um the power of serendipity and what my listeners love hearing is some of my own stories. So there's actually a board here that got us together. So if if you'll just humor me listeners, I was standing on stage in uh Cardiff about a month ago, and I'd mentioned about the need for AI on boards, and I said that I actually sit on a board. And afterwards, one of the other speakers who works for CIPD came up and said, Um, you mentioned the Britain Australia Society. There's an Aussie friend of mine you should know, and she's been moving in these board circles. And so I sat down at the back of the room, I then remembered we'd met uh probably a year or before at Australia House when you and your husband had landed in Australia, uh landed in London from Australia. And so I messaged you and then realized you'd written a Substack post that actually highlights a lot of these issues, and I thought we just need to connect, and we did. So using that Substack post, because that really spoke to me, maybe you could just explain to the listeners, and we'll put a link in the show notes, what was the central theme of it and what were you arguing in the post?

Why The AI Moment Is Now

SPEAKER_04 8:30

It's a reminder to not forget the business fundamentals. Disruption tends to throw human beings into a sense of chaos and overwhelm, and we we don't respond well typically, um, human beings. Now, my background's in HR and change management. And so I've seen human beings deal with different types of disruption at different stages of their career across different industries, and every industry will tell me that they're different, you know, that their people are different. But the one thing that happens every time is human beings react with a sense of overwhelm, even the coolest cats at the highest level, and they forget the fundamentals. They forget to speak to their customers about what their customers are looking for and how is AI actually impacting your customer, not just how's it impacting your operating model and your commercial model. So we've got to get back to remember um the old supply-demand, the things that we know for sure. And I'd say this also to board members as well. I've seen countless board members get intimidated and say to me, as someone who manages HR and and uh the digital remit, I don't know that stuff. You know, that's something for for you to think about. What do you think? And I see them hand over that responsibil that responsibility to management when essentially they do understand what we're dealing with. It's just business. It's always been just business. So I just don't why they should read it is it's it's at the at the very least, it's just a reminder to not forget those fundamentals and just to think about that old value chain. So let's just sort of take some of those old um textbook management theories and think about where that value is in the market today, number one, and then as an organization looking at our unfair advantage as an organization, where can we position ourselves in that market in order to be able to exploit and then capture the value?

SPEAKER_01 10:41

I hark back to something that the chief AI officer of Dell Technology said on stage a couple of years ago. And I play the clip all the time, I played last week. He says, What makes you special and what problem are you solving? Then you can look at what AI can do to help you. And I think you're right. That's a cost every business that's the same thing. But we don't think about that. We think, oh, we've got to do AI. Uh so we'll we'll go and get some co-pilot license. Right, tick, we've done uh done AI. Now what do we do next?

SPEAKER_04 11:07

It's Yes, it's not a job. It's just it's it's not a separate thing. Like we we need the technology officer to sort it out, we need HR to think about what the organization looks like. Yes, of course technology is gonna think about technology, of course HR is gonna think about the shape of the organization in the future. But it doesn't stop us thinking about why are we in business in the first place? And you know, and how this is just another tool that can help reduce some of our costs and equally create some of that top-line growth.

SPEAKER_01 11:38

Aaron Powell So you've argued in the posts that the real differentiator isn't AI deployment speed, it's redesigning work so that expensive human judgment targets customers, operations, risk, and cash. So what does that look like in practice?

SPEAKER_04 11:51

Aaron Powell This is about changing organizations across all the little dials that you run the business. Again, different for different industries. But in every organization, if you think about what are those key metrics and measures that you look at today, and how can you shift that dial just by 1% across all of those dials in order to be able to manage those margins? And um, if you need to reposition yourself entirely in the in the market to serve an a new part of the market that you can do enabled by AI, um, is to think about a business model, a brand new um business model within your existing business that's going to get on that um opportunity as soon as possible. Does that make sense?

SPEAKER_01 12:35

Yeah. So now if work's moving upstream, what happens to the people who built their careers doing the execution layer, and what should organizations do about it right now, not in five years?

SPEAKER_04 12:46

I want to hear your opinion on this as well, Andrew, by the way. Because I think this is a conversation that we need to have. This is this is a a philosophical conversation to some extent about the purpose of humans and and humanity, so you can take a philosophical view. And then you can take a very practical view. So what should human beings do in our organization today? Well, a CFO might say we could take 30% out, right? A HR director might say that we could train people. Uh a CEO might ask the HR director and the and the CTO and the CFO to have a think about it on their behalf. The organization, this this is where we need to, as a leadership team, take a day out, go sit on a mountain somewhere, and and figure out what you want to do with humans. What I would avoid doing is letting that IP walk out the door. So back to that first question about why this is important right now and and and why managing humans isn't a soft thing, is because the risk right now is your valuable IP walks out the door, right? Now, practically what you want that valuable IP to do is start to program some of that that agentic AI for you, right? Is to to start building um a technology program that is unique to your organization, that's going to give you a unique competitive advantage. That's practically what what you need to do. Philosophically, uh there's a whole lot of conversation here, which I think is very interesting, about what humans should be doing in any given sector. And you could think about, let's take health, for example, and dealing with patients. Surely you could hand that over to the machines at some point, but do we want to? Um when it comes to the arts, surely we could digitize everything that we put on our wall walls. But does that give art meaning or do we lose meaning? So there's it's come it's up to industry leaders to start thinking about the role of humans and the luxury we have of this time is to afford humans the space to be able to think about this and determine what humanity is going to look like for us. Now that's pretty deep. I'm interested in your thoughts.

Start With Business Fundamentals

SPEAKER_01 15:20

Oh, I I let me reflect on that. So I think first of all, we've had a lot of inefficiency in the way work gets done for years. We haven't had a decision partner as powerful as generative AI before. And so, what happens when I have what's called the aha moment with chief executives? I show them what it can do. Let me give you an example. So before I do most of my speaking engagements, I send the executive team an AI readiness assessment. It's a 10-question online thing. Fill it out, tools I use, those sorts of things. I then get back a bunch of data in an Excel worksheet. And depending on how many have responded to it, that could be tens or hundreds of responses. The thing that happened last year where a family-owned business asked me to come in and speak. The CEO was very, very skeptical, and I was told, This guy, you're gonna really have to work on this one. And so I asked, what I normally do, I did a readiness assessment. I said, What else have you got you can give me about your organization? And they said, We've just done a SWOT analysis. 17 departments, we can send you the EXO worksheet. It had 17,000 cells in it. Okay, and all these different tabs. So when I got into the room, I was about to show my response to the SWOT analysis. I said, Who is responsible for analysing this? And it was Chris. I said, Chris, how long did it take you to analyze this? 10 days. I said, Chris, I've got some bad news for you. When I was ironing my shirt this morning to come here, I put the EXO worksheet into AI, and what I'm about to show you is all the things you should be doing department by department with AI. That moment, the CEO had already got six pages of handwritten notes, and the light bulb went off. You went, Oh my goodness, I've just got it. It's not replacing it. So then let me bring that theme a bit further along. Because we've had such inefficient processes, it took Chris 10 days to analyze that because there's a lot of data, and then AI did it in two minutes. So, do we get rid of Chris? No, no, no. We look at Chris's tasks or we look at Chris's job as a series of tasks and we slice them. And we work out which bits of his job could we slice off to automation. And given your healthcare example, I've spoken to the NHS twice this year. They are a people business, but there are parts of the job that can be sliced off. Rotom management, um, patient um bed analys uh analysis, all those sorts of things can be automated. So for them, I would say focus on the patient care and automate the rest. For other people, I would say focus on what you love and automate the rest. It's not changing the way you do work. What we'll find, and this is the challenging discussion for the HR department, we're going to uncover these massively inefficient pro programs. Let me give you another example. I'm sure everyone out there listening, if you're working in an organization, has to get your expenses approved. It's painful. You have to prove that you incurred this expense with a copy of a receipt, which is read needed for your governance and everything else, and someone else has to stop what they're doing and approve it. Now, when I was at IBM and I had a team of people, um, all of them were very diligent and I didn't need to look deeply into why they had two coffees or whatever. So I really needed an exception report rather than an expense report. That's a really inefficient use of a very well-paid manager. Could we actually slice those tasks off to AI and I look at the exceptions and I then focus on the parts of my job that I love? So my question back to you with all of that is if we're now seeing that AI has exposed massively inefficient processes, it isn't the case that we just need to get rid of a bunch of people now. How do we redeploy them? How do we use AI as their decision partner to help them make better decisions? Because there's this pithy saying, I think um Jensen Yang said it, AI won't take a job. Someone who knows how to use AI will take a job. I actually have changed that, and there's a third line that says AI demands better humans. In that example, having the SWOT analysis analyzed in two minutes, I now have the gold. What are you going to do with it? You need to be a better, smarter human. I've just given you the answers in two minutes. Yes. What are you going to do with the other nine days and uh forty seven hours and forty-five minutes?

SPEAKER_03 19:17

Yes.

SPEAKER_01 19:18

So so how does this change the thinking of HR? That we know there's inefficiency. AI's given us the answer. How do we redeploy our talent?

SPEAKER_04 19:29

Well, I have a bias towards HR people. They're my people. I love them. Oh, exactly right. Um and you know, I think that that w we we suffer, our profession suffers from being a little bit back house back of house. I know we've been asking for a seat at the table for 20 years, and and most HR directors these days have. Putting that aside, the opportunity here is for HR to do what they've always wanted to do.

SPEAKER_01 20:00

So What is that by the way?

SPEAKER_04 20:01

Okay. So this is so i you will you'll find out. Oh you'll need to come to work with me one day in HR. What happens is you get phone calls early in the morning from employees and late at night that you can't tell anyone else about, but it's some sort of emergency that's happened. Um Because they're humans. Because they're humans. And we're fallible. We're like like the concierge, we're the business concierge. And I I I know that there are all sorts of stereotypes about HR people, but these are highly trained uh people people in many cases.

SPEAKER_01 20:30

Probably the most empathetic people in the building.

SPEAKER_04 20:32

Most empathetic people. And actually very commercial people. Certainly the ones, the HR directors of the future have been working on this for a good 20 years now. And but they've always been plagued by needing to deal with these people issues because at the end of the day, that person's um sick leave that wasn't processed properly does need to get processed and all these sorts of things. Well, now it's finally been done, HR. There are no more excuses. There's no more feeling sorry for ourselves. So what we get to do now is A, um, automate these processes that we've been complaining about for a long time. Uh now there's a role in that. So so that is an ongoing role about how um you start to program the uh AI itself.

SPEAKER_01 21:20

Let me just stop you there. I don't want people to think we just put AI on top of these broken processes. What I'm advocating for is you step back, you have your day on the mountain. Yes. You actually reimagine the way you have done this. So the sick leave policy, the sick leave process, the way everyone's been doing it for 40 years, does that change in the age of AI and how does it change?

SPEAKER_04 21:42

Oh, I hope so. I hope so. I don't and and this is this is a very important thing.

SPEAKER_01 21:45

But that's it's not about automating because I think if we automate in a broken pro problem, that is part of the thing. Oh, we just automate it. We actually have to have a really difficult discussion. What I'm saying also, just to to pause your thought there, yes. There are lots of digital transformation projects over the last 10 years. This is before. Before AI was a thing, and they took a long time. And COVID sped them up because oh, you can't get things on the website, let's make it digital. They had to do that. They they digitized those manual pros. That took a long time, and that was hard. Yeah. Now AI's come along, and you think we've got to do another process reimagination. It's actually a deeper analysis because you're not just making things digital, you're not just putting a paper form online. You're saying, do we need a paper form? Do we need a form?

SPEAKER_04 22:25

I love that you've paused right now to clarify that. Do not digitize broken processes. If a process is broken, it's driving you crazy. Now is your time. This is what's so incredibly.

SPEAKER_01 22:40

That's that's my thing.

SPEAKER_04 22:41

Totally. And this is this is why HR people also let's talk to each other. You know, we've been sort of notoriously busy and not great at networking, but come out and come up, start thinking about how do we do sick leave differently. I can tell you one process we need to change completely, and that's performance management. What does performance management of human beings in the world of AI look like? That's a fantastic, exciting conversation. That's another podcast, Andrew.

SPEAKER_01 23:08

Okay. Hold for that.

SPEAKER_04 23:10

Okay. But that's so there's there's a practical example of what we could do today. Now, chicken or egg, you've also got to do it from a place of redesigning the work itself. So exactly what you're talking about. So we need to think about how does work needs to be redesigned? And that comes down to well, what are you trying to achieve? Are we trying to retain employees? If so, who? Are we trying to reward employees? If so, who? Are those rewards aligned? Or are we rewarding for downstream work or are we rewarding for upstream value? So there's a lot of work in the in the next between now and the next two to three years, some boards will argue, and certainly private equity will argue that you need to do it before then. But there is a lot of work to be done around redesigning the work of HR itself.

SPEAKER_01 24:00

So who does that? Because you can't stop the business. You can't put the road work sign up saying this road's now closed, you have to go round. So the HR director is already busy, they're already frazzled with existing broken processes. Yes. How do we redesign this? Who does it?

SPEAKER_04 24:14

Well, you this is this is why you always need a community of people around you. Now I'm not pitching um you know Andrew Grill, as genius as he is, to come in every time. There's only so far you can go. Um, but you do need to find someone in your organization or outside of your organization that can create the space for that redesign to happen. And mind you, it's going to continuously happen. So this now needs to, you not only need to create some time with your existing high-value employees who know these processes deeply and what these processes are designed to do. So not only have you got to create that time, but you've got to think about how to build that continuous improvement into the system as an essential part of operating your business going forward. Now, that's just HR, right? And I argue, I would argue that HR needs to get itself sorted ASAP. Like this is this that you need to be the role model for how the rest of the organization needs to do this. If HR cannot organise its own people, it cannot be the group that encourages and helps the rest of the organization sort itself out.

SPEAKER_01 25:25

It's a bit like fit your mask first, then fit the children's mask.

Redesign Jobs Around Human Judgment

SPEAKER_04 25:28

Yes, indeed. Yes, indeed. So any HR team that's sitting around at the moment wondering about what the future looks like still, or what how am I going to cope, what's going to happen to my people, you're not asking the right questions. So the question is, and this is this is true of an IT team or a finance team, HR people management will exist. It just will. That's a business fundamental. We agree that's not going to change. The difference here is now we're dealing with artificial intelligence as well as human intelligence. So, HR, you're now interested in artificial intelligence. And guess what? You're actually leading it. You're leading the comp the conversation at an organizational level about what that correct balance is going to look like. And the only way you're going to lead that conversation is by asking questions about where the value exists in that organization. Because you don't get to make that call based on process and existing processes alone. You get to make that call on where that value sits in the future of your organization. So that's the first conversation that a CPO, a chief people officer, needs to have with its management team. What is the future going to look like? Then we start thinking about how do we design the HR team to enable the rest of the organization to change. And it's the most exciting time for HR ever, I would argue, in history, since Dave Ehrlich, you know, wrote his HR Champions book and started to think about HR as a service to the business. We're not just a service to the business anymore. We are now very much front and center when it comes to strategy. And there are no excuses because the conversation starts with people, customers, employees, and how the two can mirror each other in order to deliver value for the customer.

SPEAKER_01 27:22

So you talk about the HR professionals having this community. So talk to me about where HR directors' AI literacy is at, because to do these changes, you need to have that aha moment. You need to understand what the levers are. In fact, one other thought I'm going to put in there as well. I'm now telling people they should put AI in the org chart. They actually have virtual employees. They have Rita, who is the AI agent that goes off and looks at um sick leave management, lots of things. So if you actually put it on the org chart and you know that they're there, they're 24-7 employees, we we have a resource we can use. So where's the AI literacy at the moment in Chief People Officers and how do we get them so they understand all the levers they can pull with AI?

SPEAKER_04 28:05

Well, first of all, I love that idea. And I think that's a that's actually a really nice, neat idea that I would love to hear back from any employees that are either doing that or trial that. And I think that could that should be trialled at the very least, at to start naming agents. Because I think that's a good way for a linear human brain to conceptualize what's actually in the city.

SPEAKER_01 28:31

She missed a few of those. Her her her performance is down a bit. We're not going to pay her this week. Love it.

SPEAKER_04 28:35

Love it. And you see how humans, we understand that. Yes. We understand that we are in control of Rita. That's the beautiful thing. And Rita doesn't have, she's not very emotional either.

SPEAKER_01 28:47

So she doesn't care. She just will approve or disapprove. Yeah.

SPEAKER_04 28:51

You can be really direct with Rita, right? So I love that. First of all, I love that. Yeah. Um, second of all, IT literacy comes down to not being afraid. So HR, you've done this before. So it would be my message to HR. There was, you know, when Dave, the the godfather of HR, Dave Ehrlich, um, started talking about uh HR champions and HR needing to be a business partner, what he was essentially saying is you need to understand the commercials of the organization, including your balance sheet and your operating costs and how to get those down and how to get your top line growth going up. That's his finance. And we we got uncomfortable with finance and those that started to understand how the business works, the performance metrics, financial and non-financial, we did really well out of that. It's just going to be the same for technology. Now, you don't have to be the best. We're not asking you to be the CFO, we're not asking you to be the CTO, but we're asking you to know how to have a conversation and ask the right questions. Now that's that's true of a HR director and a future HR director. It's also true of board members and anybody who wants to influence the direction of this AIHR conversation.

SPEAKER_01 30:09

I've actually been suggesting to people that are telling me, I'm about to interview someone. I've said, throw in some AI questions, just ask them, how do you use AI? And either they'll tell you all the stuff they've done and the tool they'll try, or I'm just playing with it. You'll actually know how curious they are with the trainless plug for being digitally curious. I think this is an opportunity to say to HR directors, you need to play with the tech. You need to go beyond just doing the co-pilot training, understand what it can do, do some the edge cases, play with a tool called Notebook LM from Google. Google's Notebook LM will turn a document into a podcast. And when you see that, you go, oh wow, we can now change a boring compliance document into something people are going to listen to. And also, some of our people, their learning style is auditory, not written word. Yes. Oh my goodness, this changes the whole thing. And then the light bulb goes off. And then they go, well, if we can do that, let's look at that. And then a week later they're coming back going, right, I've had an epiphany moment.

SPEAKER_03 30:59

Yeah.

SPEAKER_01 31:00

This is I'm going to get more and more literate because I'm not afraid of it. I think there is so much noise out there in the media on LinkedIn about AI and agents and take over the world and job losses. Unless you sit down and play with it, you're never going to understand how it really can work for you. Yes.

SPEAKER_04 31:13

Do you agree? I I completely agree. And and the thing, I I know this conversation is we've started to go into talking about HR for HR and your audience is much broader than that. But I think your broad audience needs to understand the role of HR in this scenario because we're dancing around it a lot. And um HR needs to take accountability for being in this space. Actually, HR, as the people who are accountable for people leadership, and the la line managers are as well. But we're in ch uh we wear humans in our title, right? We give the rest of the organization permission to play. So if you've got a HR team, the fear that an organization's gonna have is that HR thinks that we're cheating. Yes. Right? HR we're that we're gonna worry about employees are gonna w worry that they'll get caught by HR doing something on AI that they shouldn't be doing. When HR actually needs to lead that conversation about how do we protect privacy, IP, they need to have those conversations with IT about how do we create an ecosystem for our employees to play in order to thrive in the in the uh commercial community, to be a market leader or a profitable number two or three, right? HR is the is the group that gives that permission to the employee base.

SPEAKER_01 32:41

Quick question for listeners. You probably have an acceptable use policy for the internet, you probably have an acceptable use policy for social media. Do you have an AI policy? And if the answer is no, the HR team need to write one. There is great examples out there because then it tells your people what they can and can't do and what's safe. For example, most people go, I didn't know that I shouldn't put confidential documents on a public AI tool because that might be used for training. I didn't know that. How can I do it safely? Because in fact, what it does, because we talk a lot about shadow IT, so we've got Microsoft Copilot, doesn't do everything I want. I'm gonna cut and paste it into ChatGPT, and that's a risk. But then the conversation maybe comes from the chief people officer to say our people are not able to use the tools they have effectively. It's not helping them. You need to bring the AI tools inside the firewall, you need to to build tools that actually work on the data internally to protect that. And and then it becomes an education, this level set you have with AI literacy to say, this is what good looks like, this is what bad looks like. We're not going to sack you if you do that, but here's the consequence of you doing that. Yes. Quick example, last year a fashion retailer in the Middle East said, we did a quick search on Chat GPT to ask what they knew about our company. What we found there were things that only an insider would know. So someone had uploaded an internal document and wasn't um conscious of the fact that it could be used for training. It's there forever. Yes. People don't know that unless you tell them.

SPEAKER_04 34:03

Yes, and I'm hearing similar stories through the HR community. And what's interesting is the community are starting to talk about how to discipline that behaviour.

unknown 34:13

Right?

SPEAKER_01 34:14

Reward the fact that it's an issue and and and protect us.

SPEAKER_04 34:17

Yes. And I'm not saying everyone in my in my community, but it's interesting how we go back to that overused muscle. How do we stop the employee from doing this, right? Where actually get on the front foot. What tools do you need? What tools do you need? And this is the same as as any tool that any employee has needed in all of history, and including health and safety management that goes around some of these tools as well. And I would put to you that employees or put to our audience, the your audience, that employees are concerned about the use of AI, not just what's going to happen to their job, but whether they can use it safely in their organization and retain their job as a result. So I suspect that employees are actually using AI in a very conservative way for because of immediate job security.

unknown 35:09

Trevor Burrus, Jr.

SPEAKER_01 35:09

I read a story today on LinkedIn that said that some Gen Z employees are actively sabotaging AI. They're either not using it properly, they're uh faking that they're using it in a way because they a bit like uh the the the ICE example, um, people go in and dis and uh destroy or damage uh industrial equipment so that they had to work longer. So we're now finding it's gone back the other way, they see it as a threat, so they're going to destroy the machine. That's the wrong way of looking at this.

HR Fixes Processes Then Leads

SPEAKER_04 35:34

It's totally the wrong way of looking at it. And this is this is another exciting phase of humanity where we're we we just do need to play with the technology that's out there. We're not going to stop it. Uh but what we do what we do need to do is get out the other side of it as quickly as possible, having built a safe organization and uh an innovative organization that operates with the use of people and technology, and start getting into differentiating our our products and services uh in a way that the um the market has never seen before. This is where the winners start to pull ahead.

SPEAKER_01 36:09

So, an area that you play is that board and investor layer. I want to drill down on that now. And you've sat in boardrooms where directors are nodding at AI strategies they don't fully understand, they're not curious. Yeah. What does that look like and what does it cost?

SPEAKER_04 36:21

I've I've had um I I was gonna say I'm embarrassed to say I've had some failures in the in the boardroom. I shouldn't be embarrassed. Um What have what have been your learnings from the boardroom? I look, I think it's really easy to think that when you're talking about technology that that people get it, that it's kind of that it's obvious, that you go into a boardroom and or maybe that's just me, that you go into a boardroom and you you you've given you 10 to 15 minutes, you know, to talk about a proposal that you've got to get through. And and this proposal is completely enabled by technology. And you just assume that they get that, that that people get that. And um you also assume that people also understand that the members of the board will also understand that you some of your business um metrics are going to have to be adjusted for this change. And, you know, I've I've gone in and in the tried to be try to be efficient in the past, and um, you know, have had pro proposals rejected or found out that I really need to massage those proposals a little bit more. And it's just because people didn't understand that I was proposing maybe a different way of growing. I'll give you an example. So um the property sector, retail um REITs, real estate investment trusts that invest in shopping malls, um, they measure one of their key metrics is net um property income. And in a world where you're not getting as much foot traffic, that impacts in-store net property income. So when you're trying to p propose that we need to start rolling out digital advertising in our um in our shopping malls and um finding a way to maintain rents but push um the audience to the brand that buy online or in an omnichannel fashion, that actually threatens net property income, um, which has a knock-on impact when it comes to the valuation of a of a property. Now, that's something that needs to be talked through, right? There's an industry that's only ever that's that's measured measured net property income as an indicator of the valuation of a property, and that happens globally. So if you want to propose something that's going to that might make perfect sense, we're gonna make money from digital advertising and we're gonna make money from um driving traffic to brands, and we want to put more emphasis on supporting retail brands, great. It just needs to be spoken through. And that's gonna be true of every business. That that could that's um that's an example that's gonna be l less interesting to anyone outside of an industry. But I bet within every industry, um some of your key metrics that your board members have got really familiar with are gonna be threatened by some of the scenarios that you're gonna propose as a um as a result of what's happening here. And you need to think through any proposal holistically.

SPEAKER_01 39:25

Aaron Ross Powell You've argued that boards need to give management explicit permission to move on AI and that no one wants to go first without cover from above. Uh what is an AI ready board what does an AI ready board actually look like and how does the remuneration committee need to think differently?

SPEAKER_04 39:40

Yeah, so um the piece around there's probably two parts to that. The piece around permission, um, I just can't say it enough, that we all forget how much we impact and influence other people. The older and more experienced we get, we forget what it was like when we were more junior, um and how frightening it is to to rock up to a board and um put your proposal in front of a in front of you know seven to twelve people waiting for their feedback. And permission is everything to a management team, that feeling that you're going to be safe to explore and put new proposals in front of a board and not lose your job as a result. So that's you know, that's the the first part. The second part's around being ready. Um, education, board education is something that boards have been speaking about for a long time. And um, if you're not doing it already, now is the time. There actually is no choice because of the way that um AI is going to directly impact some of your core competencies as a board, specifically around managing risk. Um, and so I wouldn't say do it out of fear. Uh you can do it out of curiosity and and um excitement for the future, but do it. You don't actually have an option at this point, and we can explore that more. I'm interested you you deal with boards a lot in in your practice, Andrew. Are you getting questions about the board's role and the type of education that boards need?

SPEAKER_01 41:23

Yeah, I'm starting to uh engage with people to say this is what boards need to know. I actually lead off the discussion with compliance because that's something people worry about the fact there's an EU AI act and there are consequences of using AI. I think there's been no other technology that has focused a board. So when mobile came along, you didn't have the board having to be educated on mobile or digital or online. I think what I say is we've seen 10 years of innovation in just three. And so the speed of change, the ability for an organization to leverage AI uh has never been more powerful. But i if you're right, and and the top of the tree has is where the education's got to start, they're probably the ones that are least aware of it. Now, if they're on a portfolio, I meet board members who sit on three or four different boards. Every company may be a little bit different, but they have to have a level set. They don't have to be AI experts. They need to know what good AI and what bad AI looks like. What are the risks, what are the challenges. Yes. But they also need to play with it themselves. Yes. And that means taking a document, not a public document or private document, but something that they can and and use AI to analyze that and then have that aha moment. Because I gotta tell you, when I speak to boards and I just do something, I show them, there's an intake of breath, and it's like, I didn't know I could do that. But why didn't you know it could do that? Oh, I haven't really thought to play with it. I wasn't curious enough. Because it is overwhelming. So um there are lots of people like me out there, but I think you need to go and knock on the door of someone who can make AI explainable, they can make it um non-threatening. And every board, individual board member, probably needs to do their own education to say, I need to come up to speed, and then I want to actually enforce that the board I'm on actually does some level of education and level set.

SPEAKER_03 43:10

Yeah.

SPEAKER_01 43:10

I think the management probably go, hooray, we've now got a board that's that's AI savvy that then exposes them. We've we need to get AI savvy. But again, I I it's not about how to use Copal or how to use Chat GPT. It's how do you use this new tool, this new decision partner in a way that is quite uncomfortable. I was doing a proposal the other day to someone, and now the relationship I have with this person is both um commercial and also personal. I've known this person for a long time and asked for a proposal. And the AI actually suggested to me, would you like to know how this proposal might land emotionally? I haven't even thought about that. I didn't have someone sitting next to me saying, Andrew, I'm gonna go through the proposal. Oh, by the way, have you thought about the emotional response to this? No, I hadn't. It was challenging me to say, Have you thought about this? Yes. And I went, I haven't, how do you think they will? And it went through. How they're likely to, you know, they'll land well on this on that. And when I presented it last week, the last line, they smiled.

unknown 44:07

Yeah.

Safe AI Use And Clear Policies

SPEAKER_01 44:08

And I went, yeah, that that was a home run. Yeah. Because it landed emotionally in a way that I didn't think it could. So for me personally, I'm learning all the time. There are ways that I can use my decision and thought partner, my cognitive partner to do that. The other analogy that I use a lot, and I want to leave this with listeners as well, is many people listening to this will remember the Where's Wally cartoons. I'm sure you grew up with them as well. Imagine a beach scene where Wally, and for those that were born more recently, Wally was a cartoon figure who had a red and white striped jumper and a cane and a red and white striped hat. And the illustrator had quite um over quite smartly hidden him in a scene. I then asked people to think of this beach scene that's very noisy as their business. And somewhere in there is the gold, somewhere in there is Wally. And so what I did one day, I I got that picture, that illustration, into AI. I said, find Wally in this picture. I gave it no context, no understanding. I said, put a red circle around Wally, and it did that. I don't know how I did it. So I use that analogy now. How do you find your Wally in your organization, that data that's hiding in there somewhere? Unless you do that, what I did, you're not going to go, oh my goodness, it can do that. So I think part of it is allowing yourself as a board member, as an executive member, permission to play with it. And you know what? Ask a young person how do they use AI? They might show you some things you can teach an old dog new tricks.

SPEAKER_04 45:27

Yeah, and there's a there's a beautiful relationship here between people who are uh in in the third act from their career and they've they've learnt a lot, and then you've got those in there first who are coming in who want to learn. There's an exchange that needs to happen now, and this is where sort of we get back into humanity again. How can a board member serve the people around them? Um, is to, you know, is to sort of encourage these conversations and these connections between those that understand business fundamentals and we don't want to lose them. And those that need to learn those fundamentals, but maybe digitally native and get it, get the digital stuff really easily. So I think that's a really beautiful exchange. I'd also encourage boards. I'm s I'm sitting on a um a board of trustees at the moment, um, where I can see this nice balance of people with different skill sets, and I guess I'm probably the more digital HR one. And um, you know, what I've realized is we tend to divvy up roles, um, but actually people management and technology management is something for every board member to be concerned with. It's not anyone's job. We don't get to um opt out of this anymore. Um so I I just think it's it's a really exciting time. And equally, as an as a new trustee, I'm keen to hear from those board members that have been in these governance roles for a very long time and not just be the digital one. So even on the boards themselves, there's a beautiful exchange that can happen as we start to develop new boards. So we can learn from each other as boards. Um, we can also do some, we can do formal training, uh, but we can also speak to our existing employees and play and give permission to play.

SPEAKER_01 47:23

I talk about these two, this value exchange as two different tribes. We have the going digital and the born digital. I would argue that you and I are probably born digital, even though we're of a vintage where we probably should be going digital. But people self-slap, they go, Yeah, I'm I'm going digital. I I don't quite get this. The two tribes need each other. And so the simple way in an organization, not necessarily on a board, is to actually hold a hackathon. And when I propose that, people have gone, what a great idea. We get the two tribes together. The two tribes then see how each other think, and they are given permission in the same room physically to talk about this, and it breaks down the barriers, and and it's such a great idea. So maybe something as simple as a hackathon with the two different tribes could bring these ideas literally to the table.

SPEAKER_04 48:05

Beautiful. And there are there are companies, um, a lot of the the pure play digital businesses have been doing this, and you and and you've seen this things like hack days, hackathons, um, for a long time. Uh, and I would say around that sort of early 2005 onwards, these are the more pure play businesses, and you'll see that those boards very comfortable in this space. Um, and then you've got the more traditional industries who have said, no, that's for the that's for the pure play tech businesses. That's a tech business. That's for them. We're all tech businesses now. We're all tech businesses in that sense. Um, and boards need to think like tech businesses. So I would also encourage um board members, senior leaders, CEOs to um make friends with those industries that have been doing this for a long time. And I think you'll find it's uh it's a really fun experience to have as well. It's a great way to connect with employees.

SPEAKER_01 48:59

Just to unpick one more thing on the board investor layer, you know, you've seen what happens when investors don't align with the transformation thesis. So, how do leaders make the commercial case for workforce transformation to boards and investors who are still operating in this old model?

SPEAKER_04 49:13

Board strategy days, board governance and and strategy days, that model has happened as long as as I've been in business for 30 years. And the in the last good five years or so, boards have been speaking about how they want to be more involved in this in the strategy. And I I think to some extent the boards need to come to that conclusion themselves. And when I say board, I mean those that are in charge of the strategy, because boards have been very clear that they've got a role to play and that they that they decide strategy with the CEO, with the investors. Why now is ultimately a question for the investor and the board. It's easy for me to say it's just really important because the rest of the world's moving on. It's a fundamental strategy discussion about the the price of staying ahead in the market and and winning in the in in the market. And that price is going to come down to where are we going to invest in change in our organization? Which technology platforms are going to be fundamental to supporting some of our fundamental new processes as a part of our work redesign. What are some of those um human investments that we need to make s um going forward? And I think that we're seeing the implications out in the market today of not moving fast enough. So you can you could choose, I pause because you could choose to not do anything about it. Boards talk about being a fast follower. I don't know if that's a strategy anymore, you know, waiting for someone else to to do it. Because I think you lose your ability to um cement your leadership position in the marketplace. I think that's why now.

SPEAKER_01 50:54

So let's make this through. Let's look at a real world example. Something happened a few weeks ago. Microsoft has just restructured their entire HR function. The Chief People Office memos said the pace of change was exceeding what their operating model was built for. So when you saw that, what was your immediate reaction?

SPEAKER_04 51:09

I think that's right. I know that's right. I think the the sad thing about Microsoft is they lost a lot of IP. There were some um pretty major players. Um Chuck Edward, Dawn Hoffer. My reaction to that is it is time to redesign work and we're gonna see some of these bigger organizations move fast. Um Microsoft is a digital native business. I'm not surprised that they've gone first and that their HR department's gone first. I'm not surprised that they've consolidated. I'd like to think, and my hypothesis is as they've done it around a work redesign. I think we're going to see a lot more of it, particularly with these larger organizations.

SPEAKER_01 51:53

So the elephant in the room, if we're having a discussion about AI and HR functions, is will AI take my job? So you you've described a broken loop between education systems and employers, young people prepared for university, but not for the workforce that actually exists. Connect that to what you're seeing at the board level. Is the same failure at different scales? Yes.

What An AI Ready Board Does

SPEAKER_04 52:15

Yes. So I love this question because as a leader, you you have a role to play in an organization. But you also have a role to play in the in the economy that you operate in, how um whether you think about it as a local or a global economy. And you therefore you are concerned about the talent that's coming through the pipeline, and there is a disconnect. There's a there's a major disconnect between the demand side, the the skills that uh employees are going to need in the future and need today, and the supply side, the supply of skills that is coming out of schools, technical institutes, and universities, and it's a growing gap. Um now it does mean that we need to hold conversations that roles of um groups like um CIPD, RE, organizational employer institutes really need to start getting very clear on the demand side about the skills that are required, and that the supply side, which are the academic institutes, need to start thinking about how to create that alignment. Um, now the alignment isn't going to happen on the supply side until the demand side starts getting really clear about it. At the moment, what we have are organizations thinking about themselves and stuck in overwhelm. What do I need? What do I need in my organization? And then not thinking about what my industry needs and what does my economy need in order to thrive. Now, I do think economies are potentially facing a bit of a cliff here, if we don't get this right, an economic cliff, where we we will have untrained supply coming in and we're going to have roles that can't be done simply because we haven't entra we haven't trained the people who are existing in workforce and coming through those academic institutes. So I think there again, I'll get back to the role of HR, who sit on the demand side, I think are absolutely key in making those demands incredibly clear so that the academic institutes can move forward at pace with learning that's going to be fit for the future. The other thing that we we're starting to see is some of these major consulting firms and boutique consulting firms looking to fill some of those skills gaps as well. But again, that only happens when the organization themselves gets very clear about what it is that they want and are not told by technology companies what they need, and not told by consulting firms what they need, but they decide with their boards, with their investors, what their skills and unique value proposition needs to be in the future. Only then can we get that alignment through the economy.

SPEAKER_01 55:05

So you came up as an HR business partner but got on with engineers early. So in a world where every people leader needs to think like a technologist, how do you develop that muscle if you didn't start that way?

SPEAKER_04 55:16

Yeah, it's um it's really intimidating. I was lucky because my very first job was actually on a help desk in IT. Have you tried turning on and off again? You ever say that? I actually did. Turn it off and on again. It's surprising how many problems that actually solves. Um, you know, and I and I got to do code camp uh and I've always just had an interest in technology and they're my tribe. And, you know, I love tech people, and so not intimidating to me at all, but I've also made a career out of um being that bridge between, you know, HR and and leadership, I guess, and and technology teams. Look, I think that tech people are not as intimidating as what they might seem. And, you know, again, it comes down to asking questions the same way as we would ask questions to a CFO about what our balance sheet is saying or to an operation an operations leader about what sales is doing this month. Um, we're just talking about a business imperative. We're just talking about the technology that enables us to do business. Um I would say just really have some fun with it. Talk about some of the consumer experiences you're having with the apps that are on your phone at the moment, with some of the technology improvements that you're seeing when you're watching Netflix, um, you know, the search optimization that's happening in that space. Um just have conversations with the tech people themselves and realize that um they're not as intimidating. Uh and also get make sure that um you've got tech people in the room as you're starting to think about the um the strategy itself, and don't just wait and get them to get the tech team. Um they're not a service function to you. The tech team need to be involved in the strategy, as does the HR people. Once they're involved in that strategy, you'll learn from them, they'll learn from you, and the execution of that strategy will just go much more seamlessly.

SPEAKER_01 57:13

So, final question before we go to the quickfire round. Uh-huh. For a CI or board director listening right now who knows their organization is behind, what is the one thing they should do in the next 90 days?

Your Next 90 Days Plus Quickfire

SPEAKER_04 57:25

Oh, I think you can you go sit on the mountain for the day, but what that means is just sit back and reflect, think about why I am in this business again. Um, how am I getting in the way of the business from moving towards that? What could I be doing differently? And um write it down, um, get real, get vulnerable. Technology requires, and AI especially requires humans to be more vulnerable than we've ever been. Leaders don't like being vulnerable. Acknowledge that there's some stuff that I don't know, and um look at getting that team around you and put it out to put it out to your business. You know, I I I feel like we are vulnerable as a company in this space. I feel vulnerable in this space. Who in this organization is and is prepared to take a leadership position and and start to learn in this space that we feel uncomfortable about.

SPEAKER_01 58:20

So almost out of time. We're up to my favorite part of the show, the quick fire round. We learn a bit more about our guests. Let's see how you answer these. Uh window or aisle? Aisle. Your biggest hope for this year and next.

SPEAKER_04 58:30

Humanity. The my hope for humanity that we realise that we're in control of AI.

SPEAKER_01 58:34

The app you use most on your phone. Real estate. The best advice you've ever received.

SPEAKER_04 58:38

Uh to be vulnerable. My dad told me that. And elders and leaders need to learn how to be vulnerable. What are you reading at the moment? Digitally curious. Actually, I'm not just saying that. I'm just about to finish.

SPEAKER_01 58:46

Sitting on the table in front of us, so it's that was not a uh That sounds that sounds awkward.

SPEAKER_04 58:53

I'm actually I'm I'm reading that and I'm um I'm also um reading the history of Northam, a small town in uh in Western Australia.

SPEAKER_01 59:01

Who should I invite next onto the podcast?

SPEAKER_04 59:03

I'd love to hear a school lever on your podcast, and I'd love to hear their perspective of this. It's a challenge for you. How do you want to be remembered? Somebody who helped um future skills, that that helped people realise that they count, that they matter, that they were born perfectly, and that they have what it takes to have a a perfect, thriving existence.

SPEAKER_01 59:30

How do you stay digitally curious?

SPEAKER_04 59:32

I just play.

SPEAKER_01 59:33

I just play. Well, it's a great lead-in, is this is the Digitally Curious Podcast. What three things should our audience do today to stay curious about the issues we've discussed?

SPEAKER_04 59:44

I would just play with some of the AI that's out there. Um there's there's some um, depending on what you do, just do something fun with it. Write a poem, do some art, just do fun things. It doesn't have to be about work. Number two, I'd go meet some people who are really good at this stuff, um, who you you're not feeling intimidated by, who are not necessarily in your industry, uh, who have done technology change before. And number three, I would take time to meditate, chill out a little bit, you know, just it's not moving as fast as what you think it is. You're just overwhelmed. That's all I would say.

SPEAKER_01 1:00:30

Thanks so much for your time. A great discussion, and stay for sure.

SPEAKER_00 1:00:34

Thank you. Thank you for listening to Digitally Curious. You can find all of our previous jokes at digitallycurious.ar. Until next time, we invite you to stay digitally curious.