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Episode 1 - The Four Realities of Transformation
Welcome to the “hello, Human” podcast, a show about AI solutions, advancements in technology, and about the leaders in the tech industry. Our guest today is Pankaj Chowdhry the founder and CEO of Fortress IQ.
Organizations on the transformation journey should take the counterintuitive approach of embracing both change and the status quo. The key to the speed, and success of a transformation program lies in figuring out how to leverage components of the existing, while delivering change.
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Jon: Pankaj Chowdhry, the founder and CEO of FortressIQ, joins us today on the hello, Human podcast, where we discuss the latest topics in artificial intelligence and how it’s being applied in the real world. I’m Jon Knisley, the host of hello, Human, and a long-time technologist working at the intersection of business and emerging IT applications.
A big thanks to FortressIQ for sponsoring the program. Be sure to subscribe wherever you listen to podcasts.
In this episode, we’re going to explore the AI-human integration and the four realities of transformation that lead us to this idea that successful transformation requires a careful and somewhat counterintuitive balance of embracing both change and the status quo.
Welcome, Pankaj, to the program. I’m really fascinated by this issue of human-agent teaming and have worked on it for a number of years. Let’s jump right into it.
When you talk with people about the impact of AI on humanity and society, people tend to fall into two camps. You either have this Hollywood dystopian view that the robots are going to destroy the universe and everyone takes everyone’s job, or you’ve got the more utopian view that technology will make life better, lead to a more prosperous future, and let people do more meaningful work.
Given, FortressIQ’s lofty mission to unlock the limitless potential of the global workforce by accelerating the responsible and ethical use of AI, it’s probably safe to assume that you see the more positive contribution of technology. Is there a darker side that we need to worry about?
Pankaj: It’s a great question. I think the thing to do is to step back and say, what would make AI different from anything else? Any technology that we as a human civilization or a more technology-advanced society, has always had positive and negative to it.
If we think of just going back and looking at nuclear power, there’s a tremendous potential for both good and bad there. AI is really very much the same thing, that there are going to be incredible use cases of how AI is going to help us to do things. But like any technology, there’s going to be tremendous potential for abuse also.
I think the real thing that’s changing is that the rate and pace at which AI is improving is something that’s been relatively unprecedented. The questions that we have to ask ourselves are changing completely. It’s not when we talk about jobs being shuffled amongst different categories. When you start talking about AI, you start talking about not jobs and just in these tests, but in an entire category of work that is going to be reimagined. I think that’s where the infrastructure of how to even ask those questions needs to be further explored.
Jon: That’s great. I think there’s also the issue that sometimes with AI and technology, you think of it as a darker side, but it’s really almost an unintended consequence sometimes. It wasn’t intentionally put in there as being negative. But based on the data and the other aspects of it, it can seem to be a negative outcome. That goes along the lines of people like to think in terms of absolutes. As you say, it’s either AI’s good or AI’s bad. It makes the decision easier to make. The answer is either all technology or no technology.
In your experience, what’s the preferred partnership of this AI-human integration look like, specifically around delivering successful transformation? What’s the ideal blend?
Pankaj: I don’t know if there’s an ideal blend that is just a good rule to use everywhere. It’s different for different use cases, for the maturity level of both the function and the AI that’s trying to help with that. I think it’s one of the things that we have to look at as a notion and the fundamental understanding that a joint solution is always going to be better.
When we think about team sports, the idea that there’s no I in team is something that you learn very, very young the idea that you can’t be an individual player in a team sport, you’re never going to win.
When we’re looking at transformation and the reimagining of these job roles, looking at it through that same lens of you wouldn’t expect someone to do a job—many different types of jobs—without a laptop. You’re going to get hired. You’re going to be given a laptop so that you can do A, B, or C. We wouldn’t expect people to do certain roles without a pen and paper.
AI is kind of that same level. There is going to be a certain level of interaction with artificial intelligence that every job role is going to have. The key is just to figure out how much of it works and if it actually adds value. Then, making sure that it gets aligned there.
Jon:I think that makes a lot of sense. It’s really that augmentation of the workforce that I think AI can come in and help out with. They need to play off of each other, let AI take care of the lower-level task work, and let the human come in and take care of the more pieces that require more thought and more intellect on it.
Building on this idea that technology and humans need to work together to be successful, you’ve written in and talked about the four realities of transformation, which I think are on point. I’d like to explore each of them in some detail. The first one that you’ve noted, reality number one is your processes aren’t going away.
Pankaj: When an organization approaches transformation, there’s just this reality of stepping away from the four realities that I outlined, which are just cosmic reality that we have to deal with. One is this dimension of time. You’re not going to be able to transition something instantaneously. Even if you have a beautifully designed architecture that you want to get to, you’ve got customers, vendors, partners, employees that you’re working with today, that are going to need a transition plan to get there.
Transformation is not this idea. There’s a binary event. There’s a big bang. It’s change management and all these things that go into that.
When I say that your processes aren’t going away, what I’m trying to make sure that people understand is that the process is going to exist. The process of you need to ship something to your customer, your customer needs to be able to request information about a support or a return. Those processes are still going to exist. Many of the characteristics of those processes are going to need to be static over a transition period.
When you’re looking at how you can leverage technology, the idea of understanding that it’s not a big bang, that you’re going to have to be measured in your transition to that is going to be key to being successful because big bang is usually the one that goes boom, right? That you work three years on something and in the end you’ve got something that no one wants or was designed improperly. That iterative process of making it better and the incremental pace is what we see a lot more of, then try to adopt the more of an agile methodology towards it.
Jon: That’s why I think one of the reasons why you see so much struggle for successfully executing transformation programs, like McKinsey got it at 30% percent. I’ve seen other reports as low as 12%–13%. It is that trouble getting off the ground or those false starts that companies experience, so totally understand it.
Reality number two that you talk about is your IT systems aren’t going away.
Pankej: Yeah, and that gets to the heart of that beating infrastructure of an enterprise. We’ve got far-flung ERP systems, workgroup-level applications, reporting systems that are delivering for us today. Any strategy that you have for transformation is going to have to figure out how to work with that technology in certain areas, obviously upgrade or replace it in others. I think that’s one of the reasons why you see technology like RPA in these things that can extend the investment of existing technology being so popular right now. It really does shine a light on this idea of how we get the most out of our existing investments.
When we talk about your transformation strategy, you have to deal with the realities of what your IT landscape is. It’s really being intellectually honest about, are you going to be able to move X, Y, or Z functionality to a new system? Would you be able to do it in the right time frame? Is it going to have the feature set that’s necessary? Really, building a transformation strategy grounded in that reality of what your technology landscape looks like today, and again, incrementally saying here’s how we’re going to move it to this better outcome.
It highlights the challenge that’s been laid out by Clayton Christensen, the Innovator’s Dilemma. How much are you going to invest in your run the business versus the overall transformation of something new?
That balance is where it gets extremely challenging for the transformation professionals in the sense that we all know that we need to get off of a system A, B, or C, there’s going to be a multi-year transition to get off of that system, we can’t stay still while we’re doing it, and how do we make all of those realities work together?
Jon: We’ve got in through one and two. Your processes aren’t going away, your IT systems aren’t going away. The third one, reality number three, your people aren’t going away.
Pankaj:Yeah. This really gets to that point of any transformation strategy has to embrace the people that are going to be impacted by it. That’s why change management is so important as part of an overall transformation strategy.
Even more so, the idea that because these people are oftentimes the core of what’s going on in the process, making sure that the transformation program is human-centric, in the sense of what can be done best by humans inside of a process, work in AI, automation, or anything can be leveraged to make that experience better, then building this program that: (a) understands where those frustrations are and where the technology can be leveraged be, (b) in any scenario where you’re impacting people, you want to make sure that you’ve got a transition strategy to either retrain, reposition the existing resources to make sure that you’re really building a program that’s going to accelerate and be embraced across the entire organization.
Jon: We’ve hit on the classic golden triangle of people, process, and technology. The last one, reality number four, your organization’s structure isn’t going away.
Pankaj:That’s one that we’ve seen a lot of challenges with the transformation with AI, with RPA, is where some of these initiatives are going to sit. What should we have that’s IT-led? What should we have that’s business-led? And how are we going to work across shared services if there’s a technology-shared service and application-shared service?
Any transformation strategy that requires a wholesale change of the org chart on day one is going to be most likely a non-starter. Looking at the org structure and saying how do you leverage all of these different components to really make sure that you’ve got a program that can be adopted by all these key stakeholders? You’re going to have compliance, security, training, HR. All these things need to be really taken in so that you can make sure that the organization that you’re building and that you’re actually trying to get to has a very, very clear path of how the existing organization is going to arrive there.
Jon: Thanks for walking us through those four realities. That framework and approach for guiding transformational success is very helpful and I think a great point to end on. We’ll make sure to provide a link in the show notes to the original article for anyone interested in exploring the model in more detail.
To recap today’s conversation with Pankaj Chowdhry, founder and CEO at FortressIQ—certainly one of the pioneers and market leaders in the emerging process intelligence space, really helping companies gain operational insight to drive strategic business initiatives—we got great insight on how organizations on the transformation journey should take this somewhat counterintuitive approach of embracing both change and the status quo. The key to the speed and success of a transformation program really lies in figuring out how to leverage the components of the existing while delivering that desired change and getting to that magical future state.
Pankaj, thanks for joining me today. I want to give you an opportunity to make any closing comments or provide any final insights. I also have one final question for you. I’m a bit of an information junkie and always looking for the latest and greatest resources. My final question to you is, what resource, website, newsletter, podcast, framework—whatever it maybe—do you rely on to be successful and knowledgeable in your role?
Pankaj: I read a lot of arXiv sanity. There’s a website that a lot of people are open-publishing there. They’re academic papers, and they’re the latest and greatest that they’re working on. They exist outside the traditional scientific publication channel. You see all of the greatest uses for technology and more specifically, AI. But you can get overloaded because there are new papers being published every day. arXiv sanity really helps to just bubble up some of the most important papers that you need to read so that you can stay up-to-date on the quickly moving pace of technology these days.
Jon: That’s great. That’s one that I have not heard of. I look forward to checking it out. My resource in this episode that I came in with is the Farnam Street blog and podcast from Shane Parrish. It really, really helps out with accelerated learning by sharing the best of what people have already figured out. It’s got some great insights on a lot of different mental models across disciplines.
We will be sure to put a link to all the resources recommended in the show notes. That’s a wrap on today’s show. Thank you, Pankaj, for joining me and for FortressIQ sponsorship. I’m Jon Knisley and this has been hello, Human.