Business Leadership and Technology – Digital CxO Podcast EP63

Hello, and welcome to the digital CXO podcast. I'm Amanda Ani, and I'm here with Mike Baard. How are you doing?

I'm doing great. How are you? Doing well.

If you've been following our podcast, you know that we've pivoted and we are talking about all things digital transformation, innovation, automation, and we have a lot to discuss today. So with that, I'm gonna kick it to Mike. All right.

Well, let's get started with this article that George Hill wrote on digital CXO talking about, um, the level of success people are having with Gen ai. I know it's still early, but a lot of folks are trying to figure out how to operationalize this stuff, and my take or sense of it was that we're experimenting like crazy, but nobody's got it down just yet. I don't know what your sense of what's going on here, and I'm also gonna be curious to see, you know, what role or digital CXOs playing in this conversation.

I, I know for certain that they're wanna take advantage of it, but who's leading the charge for this is not quite clear in my mind. Yeah, absolutely. So, yes, he wrote about some Infosys research and he said that 67% of North American enterprises are looking to adopt gen ai.

But there's a question of how they're gonna use the gen AI and, um, see the return. Um, and I think this is, um, just across the board, as you said, they're all trying to harness this technology, but they need some clear cut direction and an end goal. So one of, one of the issues they're having is, um, you know, determining how do they see, um, the benefits of the Gen A after they, um, adopt that technology?

Yeah, and I think there, if I had to characterize it, I would say that last year was the year of irrational gen AI exuberance, and everybody was like, oh my God, this is gonna transform the world and it will have a major impact, no doubt. But there's a world of difference between relying on a Gen AI tool to craft an email that you're gonna send to somebody that you're gonna review before you send it out. And relying on an AI model that is prone to forget things or maybe not necessarily, uh, have the right context to drive a a business process, right?

95% accurate because Murphy's Law will be that the one time is not accurate is when it involves a $3 million transaction or something like that. And I think a lot of folks are now wrapping their arms around, well, to what degree can we really use this stuff? And, um, some of them will, as a result, now customize LLMs, and they'll do that by making use of vector databases as, as we talked about in a recent episode, or some other search techniques to expose new data to the large language model that will help that model make a better recommendation and create more reliable output.

Um, but even then that still requires, you know, review cycle somewhere. It's not like the thing is just automatically going to, uh, take care of all this stuff. Whereas as one wag pointed out, they, they call it a copilot for a reason.

It's not an automated pilot, it's a copilot. And I think organizations are still working their way through what that means. And so this is the year of operationalizing ai, and I don't think those returns show up until 2025 or beyond.

And I think organizations just gotta come to terms with that kind of decide, you know, what's real and what's not. Absolutely. Um, you know, there's, uh, investment in this technology to the tune of billions of dollars, but, uh, it seems like many business leaders do realize that they may not see that return right away, but they're all just trying to make sure that they're implementing and using it or else they're gonna fall behind.

There you go. I think that's the biggest issue I think people are having, right? There's this fear of being left behind, so everybody wants to be seen doing something.

Um, and yeah, that's a factor because competitors will do things and I've seen some amazing, uh, prototypes of things that are gonna be, you know, changing the way, uh, we operate at Techstrong Group for that matter, but, um, you know, it takes time to get it right and to implement it, and not everything's gonna happen overnight. So for all those folks that are looking for the Gen AI light switch doesn't exist. Absolutely.

So it looks like next we're going to talk about, uh, a very interesting white paper put out by Gary Groover. Um, and we're discussing leading large software organizations. So, um, essentially he wrote a, a great paper, you can find it on digital CXO, um, and, uh, it, it's, uh, a really good informational, lengthy paper and he essentially says, working backwards with Agile, um, is the direction to go.

And he gives some great examples of his time at Hewlett Packard, um, and, um, basically saying it's important to have vision and direction at the beginning, um, in this process, and then constantly being deeply engaged and active. So did you wanna add your thoughts to that? Yeah, I mean, Gary's got a lot of history in the space.

I think it's really worth it for digital CXOs to read this because many of them have not led software organizations before, right? But they are more dependent upon software than ever. So they kind of really need to go find out how these software teams really operate at a senior level.

Um, because if you want the outcome that you are theoretically responsible for delivering, that's not gonna happen If you cannot speak to your developers and DevOps teams and even the data science teams in a way that they understand and they comprehend, and for that matter respect, um, I think there's a lot of, uh, magical thinking that goes on sometimes in digital transformation where somebody says, oh, well, it's just a mere matter of writing code far from it, uh, code, you know, we use terms like software factory, but I don't know any developer that wants to work in a software factory. And simple truth of the matter is they, uh, can't really just write code on a dime, right? It, it's, it's as much art as it is science, it requires inspiration.

It requires a, a moment of clarity that doesn't just magically happen nine to five. And you know, I think part of the issue is you gotta make it easy for them to create software when that inspiration strikes. But if you're running around thinking that you're gonna have a, uh, uh, some sort of factory that's just cranking out applications day after day, I would say you're sorely mistaken.

And this is a great article to read to kind of get you down the right frame of mind. Yeah, absolutely. It takes a, a, a, a mass collaborative effort, it can all fall on them.

Um, and then there's another article on the site that's kinda related to this, but it talks about, um, what data engineers can learn from SREs. And for those of you don't know what an SRE is, it's a site reliability engineer and it's core to the DevOps practice. And what we're seeing is the rise of best data ops practices to drive digital transformation.

Data ops is, you know, defining a set of best practices for managing data that we've talked about this, uh, previous episodes, but, uh, data management is a mess. And in most organizations, if you really wanna get the value of ai, you gotta clean that up first. But that means you gotta have some best practices in place for managing data.

And that typically involves some sort of data engineer that you're gonna hire to kind of bring some mortar to the chaos. But if you look closely at what the DataOps folks are doing, the best practices that they're using are essentially a clone of the best practices that the DevOps teams have been using to manage application development. And so, uh, these two teams need to be closely linked with each other and those best practices have to be aligned.

But this is where, uh, you know, the rubber meets the road when it comes to digital transformation. So digital CXO should have a, just as we said earlier, a very keen understanding of the relationship between not just how the software is built, but the relationship between the software team and the data teams and everything else that makes that digital transformation go. Uh, I know they all think that there's some sort of, you know, IT leader or CIO that's gonna do all these things for them, but the CIO doesn't always know what the outcome is supposed to be, what the vision is.

So if the digital CXO officer doesn't have that capability, they're kind of gonna be, shall we say, watching something and hoping rather than leading. Going back to Gary's point. So, um, again, this is another article worth reading in.

com that's, uh, about a company called Log Z io that is, um, adding an ability to discover anomalies in IT environments to their observability platform. And their point is, is that each of those anomalies is a business event somewhere that someone should correlate and investigate 'cause we're so dependent upon it. And, um, my only point here is the platforms are getting better and smarter about how to surface, uh, business events that should be investigated so that we know what's going on in these digital environments.

And we're not just kind of wondering what that, uh, hiccup was. We can actually get to the root cause and even maybe use some gen AI tools to ask some queries and natural language, why did this thing go south? What do we need to do to fix it?

So I, you know, on the, on the plus side, it's getting easier to figure out what's going on with it. On the downside, you know, we have a, a history on the digital CXO side of, uh, maybe trying to be too much of a business executive and not enough of an IT executive. Yeah, I think that's always helpful when you can have all the departments come together and communicate more regularly.

And if you understand from the ground up at least a little bit of the inner workings of different processes rather than staying siloed in your own area, it's, it's always gonna be better. All right, cool. So we invite you to check all those things out where I think we're gonna shift the gear here and talk about, uh, one of my pet peeves, which is, uh, you know, what happens when you go to the doctor, um, had a good chat with, uh, Dr.

Mike Merrill, who is the chief medical Officer for Brook Health, and he is a book out calling leadership is Overcoming the Natural 52 Maxims to Move Beyond Instinct. And we had a great conversation about why is it that all these wonderful digital transformation techniques and capabilities don't really manifest themselves when you go to the doctor's office or the healthcare system. And that ranged from everything from, you know, the healthcare providers trying to figure out how to reduce their costs, not necessarily provide a better patient experience.

It also is that they just wind up replicating a broken paper-based process and throwing into a digital system. And then on the back end, all these healthcare systems do not talk to each other. So if you wind up going from one hospital to the next hospital, there's just no way your records are gonna show up there.

So you wind up spending half a day, um, basically reentering the same data over again and they don't have any ability to actually analyze that data against other data to come up with some sort of treatment because, uh, you know, basically they don't even know what's in the other system so they can easily wind up prescribing you drugs that conflict with what you're already taking. Um, so the whole system is, you know, not to be overly negative, but there's been progress, but we're such a long way from realizing any of this digital business transformation vision in the healthcare sector that uh, it's a wonder that more patients aren't rebelling. Yeah.

And you know, it would be nice if there was some way just imagining the future, um, if there was some way that this medical information could be in some like holding area and any facility could access it with permission and just get that information right away if needed so that we avoided all those issues. And it's not clear to me, I mean Mike was basically suggesting that the best way to go tackle this issue was to have IT folks and process managers actually accompany, uh, physicians and nurses on the, during their daily routines. 'cause it's only when you get that level of insight that you can apply it in a way that makes a difference to them.

Um, otherwise, you know, it's always seems to be about applying some quote unquote theory or, you know, best practice that somebody divine as some sort of, you know, universal truth when each of these systems in each of these hospitals is slightly different. And I, his point was there's just not enough IT folks and digital process mavens on the front line with these folks and that's part of the reason why none of this stuff works as well as it is because none of them actually go see what happens. Yeah, absolutely.

And I, I have the same issues that you were speaking of earlier where I go to this one clinic and it's all supposed to be digital and helpful and they gimme this tablet and I'm filling out the same stuff every single time and it's, I'm just thinking, why, why am I even, what is the digital transformation here? There you go. But, um, we have another piece on the site that, uh, you can maybe provide some more insight into, but it speaks to this whole digital customer experience is an issue across the board, right?

Yeah, absolutely. So I had a great discussion with Jenny of verin and she was talking about their recent, um, customer experience report and she said that 69% of customers will leave after one bad experience, which means that, um, business leaders really need to address this issue because if they're gonna lose customers with one bad experience, what they're trying to do is avoid all bad experiences then. So how do they do this?

They've gotta collect data and they've gotta actually harness and use that data to make effective change, which is one issue that, um, that they're having a roadblock with is how to, uh, um, positively impact change and give a better digital experience. Um, so it was interesting she said, um, most customers expect an omnichannel presence for, from companies these days. Um, so you know, they're looking for really effortless, um, and uh, easy service efficiency and then they're looking a lot of the times their problem is after they've ordered something, they're looking for, um, good customer service that's easy and quick.

Um, so business leaders are looking at smarter, more intelligent chat bots to help right away if there's no one available, um, no human available at the time, um, because they want it now. They want that help immediately. So, um, it, it was very interesting conversation about just the greater expectations that, um, customers have now.

And I think part of the issue is, and I get we need ROI, but I feel like digital transformation is too obsessed with reducing costs and not providing a better experience to gain market share and to gain customers. It's far too much about, you know, did we eliminate a bunch of spreadsheets and, you know, did we lower the cost of labor? But it, it's not enough about does is the end customer happier?

Because it seems to me most of the folks that I talk to, regardless of what industry they're engaged in, are not given the digital experience or RA review. I mean, maybe outside of some new application that came along in recent years, like, you know, Uber where, you know, you can now pretty much get a car service anywhere you want. Um, a lot of this basic tasks that we do every day are still as cumbersome as ever.

Yeah. And it's, as we become more digitally inclined, it just comes to a point where customers expectations are just at a higher level. It just, they take for granted that they're gonna have a level of service and they're gonna more notice when they don't have that level of service.

Then notice, you know, the opposite, you know, we always focus on when we don't have what we expected. So, um, just they do need to put more effort into it because, you know, the return on investment, if they're looking at cutting costs, well if they don't focus on customer experience and they lose the customers left and right, they're, that's not effective. And I get it's harder if you're an established player in the space.

'cause you have all these backend systems that, um, a lot of them don't have APIs and a lot of them are, shall we say, uh, antiquated. In fact, you know, where you do see better digital experiences, it's usually from some startup company that doesn't have all that weight behind it. There.

Their issue, of course is they don't have enough data to do a lot of interesting things. So we have this kind of split where the incumbents have all the data and no way to kind of do anything interesting with it. And the startups have all the interesting ways to do things and no data.

So, uh, maybe, you know, there'll be a wave of mergers and acquisitions to drive that convergence. But from my perspective, uh, you know, you'll see occasionally a great financial services application, but you know, it's typically not from a, a well-known bank. It's usually some startup you've never heard of.

Uh, I think a lot of the younger folks are happy to use those services, but the people who have money are like, I'd rather see that come from somebody I already know. Right. Yeah, it, it's a definitely a dilemma.

All right folks, well that's what we got for this week. Uh, thanks for once again for listening to us, but Amanda, take us out. Alright, well I wanna thank you for tuning in and if you're just now catching the digital CXO podcast, go back.

We have several podcasts catch up. There's been some great conversations and we'll see you next week. Bye-Bye.