Kris Safarova  01:00

Welcome to the strategy skills podcast. I’m your host, Kris Safarova, and this episode is sponsored by strategy training.com you can access the key insights and practical action steps from today’s discussion at firms consulting.com forward slash action so you can make the most of the discussion. And we also prepared some gifts for you. First, you can get access to Episode One of how to build the consulting practice level one at firms consulting.com forward slash build. It is f, i, r, M, S, consulting.com forward slash build. You can also get the overall approach used in well managed strategy studies at firms consulting.com forward slash overall approach, and you can get McKinsey and BCG main resume, which is a resume that got offers from both of those terms at firms consulting.com forward slash resume. PDF. And today we have with us Phil Gilbert, who had a very, very interesting career, and I’m really looking forward to having this discussion, but he is best known for leading IBM’s 21st Century transformation as the General Manager of design, and he’s also author of the book irresistible change. Phil welcome,

Phil Gilbert  02:13

thank you, Kris, I’m looking forward to our conversation today, so maybe let’s

Kris Safarova  02:17

start with what some of the key experiences that most influenced you and your philosophy on change.

Phil Gilbert  02:25

Oh, well, you have to go back to, you know, when I was growing up, I lived in a I grew up in a city called Oklahoma City, and we were one of the two school districts that had to be taken over by the federal courts in the 19, early 1970s and implement bussing to achieve the integration goals that our society had at the time, because Oklahoma City as a city wasn’t conforming, and that that was My first experience with, you know, real upheaval and I really, I thrived in it. And I thought it was fantastic. I think it achieved its goals. And, you know, it’s a I don’t want to get into, you know, political discussions per se, but that was, that was my first embrace of of WoW, societies can change, and can change relatively quickly. And started thinking even back then, of how that happened, and how a person could make that happen. And in my own career, then going forward, I was very early in the in the personal computer industry in the early 1980s and was fortunate enough to work with some of the pioneers in our in our tech industry today, with my first startup, and then as a part of that got exposed in the late 80s, 1990s to people like David Kelly, who founded The firm IDEO and introduce the world to what we now call design thinking, which was a framework for how you could really solve wicked problems at scale. So those are just a couple of episodes that kind of inform my outlook on change.

Kris Safarova  04:19

And if you think back on your time working with the founder of IDEO. What are some of the key things that really stayed with you?

Phil Gilbert  04:26

You know, at the time in my in my company, I was struggling with how to scale quality. My firm was fairly small at the time. In the late 80s had about 30 people, and I felt like, I felt like our approach to listening to sales objections and then delivering software that overcame those objections and made people want to use it, because, if you’re a small vendor, people have to want to do business with. To you, nobody was forcing them to buy my product. And when I came across design in as it relates to software in my case, and then ultimately, to what became design thinking for non designers to have a framework to kind of bring that design mindset to their problem solving skills. That blew my mind, and then I realized that was the first time I really felt like I had an approach to scaling quality that I had never really come across before. And that’s how I look at design thinking, and that’s what I took away from David’s and many other people’s work at the time was, this is a way to scale critical thinking skills in a very big way.

Kris Safarova  05:51

And how did your background as a startup founder? How did it influence you in terms of your approach at IBM?

Phil Gilbert  06:00

Well, one thing it did is it gave me a very short temper. In fact, what led to my role at IBM was me, after about three months, feeling I was not built for this. I had never thought I was built for a big company to begin with, but I had kind of made a commitment to be there, to myself and to my team for a year to help with the integration of the company. My company had been bought by IBM in 2010 and I was going to take about a year to integrate us into the company, and I was going to stay for that and help the team through it. And after three months, I was like, I’m out. I’m out. And I flew to New York and had dinner with the senior vice president, who was the senior vice president over the division that had bought my company. And I told zoom with Robert LeBlanc, and I told Robert, you know, I look around and I see people that I don’t I’m not those people, and I see your processes and practices Good on you. If they help you, that’s great, but they’re not for me. And he said something that changed my career. So that was the that was the startup person kind of venting, and he said something that really changed everything, which is, he said, You you’re looking around at people that exist, and you’re looking at processes that exist. But we know we need to change. We don’t necessarily know how. So if you have, if you have a something to contribute to that, then let’s talk about that, and that was real, that really reframed the question, and that really kind of brought out not the startup part of me, but the entrepreneurial part of me was like, wow. Well, there’s an opportunity here. You know, if I could work at IBM scale, but but do it in with modern practices that could be really fun. And so at that that night, Robert said, Well, why don’t you take over this? The relatively small division that you were bought into. My company had about 202 50 people, the division that bought us that had about 1200 which was nothing to IBM. IBM at the time, had 400,000 people, roughly, but it was a big sandbox to actually, you know, hey, if you think you can change things, go change him there. And he and his specific words were, go make that group my, my company’s name was Lombardi software, and he said, Go, make that group look more like Lombardi and less like IBM. And that was a real interesting challenge. So that was where the two worlds came together. My startup sense was, I’m out of here. My entrepreneurial sense was, hmm, it could be fun working at this scale. And then the challenge was, you got a 1200 person unit that was steeped in the old ways, steeped with the old people, and I had a remit to go change it.

Kris Safarova  09:19

Such a great opportunity, and doesn’t often happen in a situation like this. So a lot of respect to the guy you met in New York. So what happens next?

Phil Gilbert  09:29

Well, what comes next? You know, over the course, it took us about 500 days, about a year and a half, a little bit more than that, from the middle of 2010 to the end of 2011 and I have to tell you, Kris that, and I’m not kidding here. There were many days when I thought I had gone too far, and I was expecting an email that morning in my inbox from Robert, who’s saying. And enough stop. We’re done. We’re done with this experiment. And that never happened. He had my back the entire time. And over the course of that year and a half, we took a very kind of a ridiculous portfolio of products. We took 44 products, many of which, most of which were actually competing with one another in the marketplace, and they had overlapping capabilities and features, and customers didn’t know which one to buy sales, people didn’t know which one to sell. We took 44 products down to four. We grew. We almost doubled the revenues of the operation, and we took massive market share from competitors, and Oh also, we went from 1200 people to 700 people. Those were the outcomes that we achieved. And when that occurred at the by the end of 2011 that was kind of the results for the calendar year, and Jenny Rometty had just become the new CEO, and in her first in her first leadership team meeting, Robert was on her leadership team. In her first leadership team meeting, she essentially laid out the problems in front of IBM, which was, clients aren’t buying our products. They don’t like our products. It’s hard to do business with IBM, and our employee engagement scores are in the gutter. And what are we going to do? And Robert, at that meeting, said, essentially, I know this guy in Austin, Texas, and so I connected with Jenny, and I told her essentially the same story. I told you, obviously a little bit more data behind it. And Jenny said essentially the same thing Robert said a year and a half earlier, which was all right, so what you did there? Can you do everywhere, incredible

Kris Safarova  12:07

so before we go to the next step, which is also very, very exciting to explore, can you give us a little more details on how did you actually achieve the incredible results in such a short time? Because often there are few key levers that really made a huge difference.

Phil Gilbert  12:26

Yeah, so in our case, you know, the the issue, one of the big issues with IBM at the time, was that we had missed a couple of pretty big technological shifts. You know, when our when our company was purchased, when my company was bought by IBM, one of the products that we were just about to release, we were seven or eight weeks away from the launch of the iPad, and we were building an iPad app. In fact, we had hopes of being on stage at the launch. When we got bought, that was the first thing that IBM killed, because one of the executives in charge of our acquisition said, business to business, SaaS is not going to be a thing. Obviously, that was wrong. It was obvious even then, IBM, even at the time, had missed the cloud and the rise of the cloud. And the reason was, is we weren’t out in the marketplace listening. We were telling. We were telling, we were telling. So the the first thing that had to happen was we had to develop a, you know, you can call it a scalable curiosity. You can call it empathy. There’s any number of words we can use, but it’s the practices that are embodied in most any version of design thinking that you look at. And so the first thing we did is we started rolling out design thinking across all of the product teams, so that we inculcated a more of a human centered or customer centered or client centered, client first again, whatever word you want to put on it, because they all have their own baggage, but we had to get, we had to get better at listening and understanding our users and not so wrapped around the axle of telling them about the technology that we thought they should have. So that was the that was kind of the big thing. Now if you if you unpack underneath that, what that means is we not only inculcated a culture of design thinking among all of our engineers and product managers, it also meant that we had to bring on board scale designers. We brought on board about 50 or 60 of them. And we actually about about 20 or 30 designers. And then we brought on board another 20 or 30 product managers that were of this mindset as well. And at the same time, we started ruthlessly, you. End of lifeing products, and then we created essentially a sales desk that dealt with all of the customer feedback and pushback as we deprecated products that they were using. And so it was this combination of we instituted new practices in the in the way teams were building products. We ruthlessly pruned the portfolio so that it was clear what product was going to answer what need, and then we worked. We spent a lot of time and effort and money and my own bandwidth in listening to customers that were using the deprecated products, understanding which parts of those products were not in the other in the in the remaining portfolio that we needed to move over, and also making sure that they were provisioned into the future, and they were supported into the future in the proper manner. So even that was a very human centered design point of how we how we pruned our product line. Those were the the three major efforts that we, that we undertook, and they all worked together. They all communicated with one another, because we had to know, you know, on the deprecated product side and on the new product development side, we had to be understanding and hearing from customers. What did they really need from the things we were deprecating and what, frankly, they they didn’t need. And in fact, as it turned out, and the reason we were able to grow so much is once we, once we provided our customers with that level of clarity and that level of support, they were actually happy that their lives were simpler than they were before,

Kris Safarova  16:52

of course. And what kind of approach did you use to speak to customers? Was it a survey? Did you speak to them one on one or over the phone?

Phil Gilbert  17:01

Mostly one on one and over the phone. And the way that, the way that we did it, you know,

Phil Gilbert  17:08

one of the problems I see large organizations make is they tend to,

Phil Gilbert  17:15

they tend to want to scale something out way before it needs to be scaled out. So for example, let’s talk about, you know, our sales force with this and the sales force in that group was several, several 100 strong. The typical approach would be, Okay, write all of this stuff about all of these product changes we’re making, and then hold massive training sessions for all of your sales force. We were talking about 1000 customers worldwide, something like that. IBM’s a B to B Company. It’s not a B to C Company. We’re not talking about millions and millions. We’re talking about hundreds or 1000s with 1000 customers. I was like, You know what? There’s no reason for all of our sales force to learn all of these moving parts. I took a small number, I think it was two or three of our really smart, technical pre sellers and sales people. I put them essentially on a desk. I mean, it wasn’t the physical desk, but think of it. I put them on a desk, and they were the ones that had all of the information, and the Global Sales Force was simply told, we’re making a lot of changes. Here’s kind of the introduction to the changes. But as you, as your customer, is ready for the conversation, we’ll set up a video conference with you and them and the expert. And that way we we didn’t have to scale out all of these changes all the time. We had a very few people that had to be in the loop on everything, and then they would interact. And, you know, they can interact. A team can interact with. You know, many customers in a day in that way, you still have your global person was sitting in the room with them at the time. In person was a big deal, but the video conference was with the experts that could actually walk them through the specific provisioning so again, it was a different it was a very different approach to what IBM would have done before when they had this level of turmoil in a particular product line,

Kris Safarova  19:27

definitely, and as you were speaking with customers. So what were some of the most surprising findings?

Phil Gilbert  19:34

Well, the most surprising finding for our sales people, because they were petrified. You know, some of them would have sold. We had one that was a major financial institution that had just spent over a million dollars on a product that we were going to deprecate. Now, a month later, you can imagine, the sales team was petrified. Well, that was one that I took myself, and I went with them and I talked to the customer. Mer, and when I was done, they were like, you’re simplifying the product portfolio, and you’re going to start building the product with us in the room. Like, that’s good. We’re we’re a little upset that we just spent a million, but you’ve just told us that you’re going to provision us into the new product when it’s released. So we’re good. I think the biggest surprise was to the to the legacy IBM ers, that our customers, if you just work with them, if you just listen to them, and if you responded honestly to them and actually delivered something that met their concerns, they’re, they’re going to stick with you. They, they were great.

Speaker 2  20:44

So let’s talk about what happens next. Yeah, well,

Phil Gilbert  20:51

as I said, I was, I was running that organization, and we those levers I talked about, which was, you know, try to introduce Design Thinking practices, bring in some new product management, bring in some new designers. Yes, we did all that, but that created a lot of turmoil. It was pretty apparent that power was shifting. People who had power had different levels of power tomorrow than they had yesterday. And some people who maybe not even were at IBM yesterday, have more power than I used to have or whatever. Anyway, whenever that happens, whenever change happens, the thing people are really the thing people really fret about is I’m losing power. I’m worried I’m losing power. I’m losing influence. I’m losing something that that’s the that’s the emotional feeling of change. It’s not change in and of itself. It’s that I’m losing something. Well, when I ran that small organization, I could just deal with people and say, Yes, that’s the way it is. And if you don’t like it, you can leave, or you can do whatever you want to do, but this is the direction we’re going. And to be honest, I because I had done it before in organizations and my two previous startups. It came kind of naturally to me. I wouldn’t say it was totally intuitive, but it was. It came naturally. Well, when Jenny said, Whatever you did there, can we do everywhere? The reason I said, I have no idea. Which is what I said in the moment, I said, I have no idea, but let’s give it a go. It was because I didn’t none of those 400,000 people reported to me, and my somewhat intuitive practices could no longer be intuitive, like there had to be a formula for how we got there 400,000 people is going to take a while, and that’s a different kettle of fish. And so I had to go away and kind of figure out how I was going to pull off what I ended up calling the magic trick, which was, how do you get 400,000 people to do something when not a single one when not a single one of them owes you anything? And it struck me, after a week or two of kind of thinking about this, that this is the same problem that a startup has. So now we’re going back to I’m a startup guy, and in a startup, nobody needs to buy your product. Nobody’s nobody’s forcing anybody to buy your product. You’ve got to make a product that is so good that people want to buy it. In fact, it has to be so good that if you’re selling to a business, they’re going to add a new vendor. And anybody who’s listening, who is part of a big organization knows that bringing on a new vendor, to a new cut, to a big organization is like, Oh, I don’t want to deal with procurement. It has to be really, really good. And that, that’s what struck me, is that, and that’s the animating factor of the book that I wrote, irresistible change was I need to build a product which incorporates the change agenda, and the product has to be so good that the users will clamor for it, will want it. And that changed everything. Once you start going down that path, you start realizing a few things, oh, this should not be mandated. And by the way, most transformation efforts fail. One of the key drivers of failure is a mandate. It immediately puts. People into a defensive posture and, oh, if you’re telling me to do something, I just immediately am going to recoil from it. Well, with a product mindset and a startup mindset, I didn’t we didn’t mandate ever, every single team that came in was opt in. They opted to buy our product. And I can talk about, I’m literally talking about buying our product. But the second part of that was, who is, who is the what’s the market? Well, the market is IBM. We started thinking about, Oh, the market is IBM. It’s everybody inside IBM. But because we are, because the reason that we’re doing this is not because we want to make people into design thinkers. Organizations don’t care about design thinkers. Organizations don’t care about AI. Organizations don’t care about return to Office. Organizations, I’m talking about the entity. Care about outcomes. And so I realized that individuals don’t contribute outcomes. They influence outcomes, but it’s teams that actually deliver outcomes. And so now all of a sudden we had our user, and that was that, that was the big idea was we’re going to build a product that’s going to incorporate the change agenda, which includes design and design thinking and agile, but it’s going to include a lot of other stuff too, if we’re really going to change and we’re going to market it inside IBM to our teams and our teams, the teams that want it, can come by it.

Kris Safarova  26:46

How did you deal with people fighting for power?

Phil Gilbert  26:51

You know, we kind of didn’t, no matter how large your organization is, whether it’s 1000 people or whether it’s 400,000 people, your change office is not going to be able to get to everybody day one. So we always made it a rule that we were going to work with teams that wanted to work with us and wanted to win using these new methods. And in the first year, it was just seven. In the second year, we started charging for admission into the program, and we expanded to 25 and the third year, we expanded to about 75 and then after that, about 300 and then it was kind of done at IBM at any given time, there’s about 3000 teams, we think, working on stuff. And so because of that, we had demand in the second year, we only had capacity to work with about 25 teams. We had demand from about 75 and so we went through a just like a startup would with a sales pipeline. We went through a pretty rigorous grooming exercise of Who are these teams? Who do they report up through? Do we have support? There? Is the team really bought in, or are they just trying to get in on this shiny new thing that the CEO is talking about? So we did some due diligence, and we really worked with teams that authentically wanted to work with us, so we didn’t have, we didn’t have the by and large. We didn’t have issues with with jerks or with people that wanted to grab power, because we had vetted them, and because we were, we were in a position where there was more demand than we could satisfy. Now, over the course of the years, there were a couple of situations where we did have to deal with that, but by then, we had a reputation among the senior leadership that I could go to them and talk to them about somebody who is misbehaving, and they would deal with it

Kris Safarova  29:04

makes a lot of sense. So as you were going through this huge effort of transforming the organization, what do you recall were the most challenging moments for you personally, and how did you deal with them?

Phil Gilbert  29:19

Well, there were a couple of things, you know, when you’re in the midst of all of this change, just keeping people aligned around the agenda was hard. One of the first things that I stumbled in was fairly early after I had been put in this role, and I was out in one of the larger IBM offices, areas, technology centers with that had 1000s of people, and I was speaking in front of all. Those people and talking to them about about what we were getting ready to do, and the changes and blah, blah, blah, as you do and I, and my speaking style is fairly informal. I typically just say what I feel, and I had always pretty much been effective at that well, that afternoon, I was sitting in a small table discussion with some of the managers at that site, and they were essentially talking back to me of my talk, and of course, how great it was, because they knew I was somebody who they should say their talk was great to at the time, and what they said was complete rubbish. It was, it was almost antithetical to what I meant, and that was my first lesson in somebody who has been given a powerful platform. I didn’t necessarily have power at that time at IBM, but I had, I had been given a powerful platform, and I had spoken words, blah, blah, blah, and people in the audience heard what they wanted to hear. And now started saying, oh, Phil, this, this person with this powerful platform said this, we’re going to go do it, and they’re going to misinterpret what I said, and they’re going to go off. And I realized that the the bow wave, if you will, from miscommunication from the top of an organization. That was the first time I really, I mean, I had seen it before, and I had seen, wait a minute, the CEO said this, or the so and so said this. That’s not what they meant. And you see all this horrible execution follow. That was the first time it had ever happened to me, where something I had said had been really misconstrued three or four levels down the organization, and it was going to go spin off work efforts that were completely unrelated, if not even harmful to the change agenda. And so I realized real quickly that I needed to learn how to communicate better in that setting with that platform. And I ended up enrolling in a high end media training seminar in New York and going through a couple of days of real, intensive vetting and replaying with me and my team, I actually took my whole leadership team there to it, and that was a that was a real that was a real moment for me of understanding the power I had and that my words had and the power to be misconstrued, and that I kind of needed to learn some new tricks. I felt like I was learning some new tricks in terms of how to scale a program at a large organization, but I had to learn some new personal tricks of how to communicate, and that led to, by the way, one of the biggest breakthroughs of the program, which I talk about in the book, which is this notion of branding. And I realize that when we use words, and, you know, consultants do this all the time, people in business do this all the time, but we we label our transformation efforts, oftentimes with with the thing that we’ve selected as the to be transformed around. This is an Agile transformation. This is design transformation. This is an AI transformation. And what I learned from that, from that episode, is that when you use words like that, everybody has already defined those words and their meaning for themselves, and that’s a bad thing, because now the job of aligning people around a common change agenda is not simply presenting a new concept and aligning people around it. It’s you have to change minds. You have to change beliefs, in many cases, and that’s hard. So I came up with this notion that we needed to, I needed neutral words, that I could use, that I could define, that everybody could look simply look up the definition of on the internet, if you will, and go, Oh, that’s, that’s what he means. Like, there’s no ambiguity there. So we one of those neutral words is, I decided to brand the program because the program, while it was a design and design thinking program, just like aI transformation today, or AI transformation. Is, if you limit yourself to just that thing, you’re not going to make much of an impact, because the existing systems and processes and tools of the organization also need to be changed to incorporate that thing. HR, career ladders, the career ladders for all of your people, need to be changed in an AI initiative, the tooling, if you’re moving to to an agile world or a design oriented, human centered world, some of the tooling is going to have to change that the teams use the methods like design think, whatever it might be there are, there are things around the thing that have to change, and the values of the organization itself has to change a little bit. There are values around AI that have to be thoughtfully inserted into people’s belief systems. That’s not AI. Well, all of this came to me kind of as a result of that episode, and we, therefore, we named our program something neutral. We we use the word Hallmark. I talk about it in the book, but and then Hallmark not only became this thing about design, it also became this thing about values. How do we behave with each other? Empathy? How do we practice empathy with ourselves? How do we practice empathy with our clients? It became about tooling. It became about the HR systems that had to change. It became about front end and back end developers. Again, things that we don’t need to go into detail. But the point is, Hallmark became something much bigger than design. It was also focused on generating outcomes that were differentiated in the marketplace. It had a business purpose, and because nobody knew what Hallmark was, whatever we said it was, is what it was, and it got us communicating much more thoughtfully about the intentions behind the program, as opposed to, did you do a journey map this week, or some other tactical thing? So that was one of the big ones for me, of where I stumbled and hopefully recovered, and then, as a result, also came up with, I think, a tactic that was very differentiating and helped us succeed in the end.

Kris Safarova  37:26

Phil and during that media training, what were some key things you could learn, you could share with our listeners that they could pick up and start implementing.

Phil Gilbert  37:34

You know, if I were an expert, I would go into more detail that the thing I took away. It was a, it was an amazing course. It was a very, as I recall, it was a very expensive course for IBM to to put me through. But it had real, real ex journalists. You were in a you’re in New York, and in a studio, and they would pick a one of your topics, and they had done a ton of research on it, and they were interviewing you with essentially trying to get you to stumble and and they did most often. And you learn. And the big thing I took out of it was whatever you’re asked, and as you talk about something, you need to bring it back to your platform, like, don’t let somebody take you to some other place. You have a message that you’re trying to get across, and if somebody’s out there trying to divert you from that message, you need to you need to have certain strategies that can bring your answer back to your platform, and in a sense, you need to learn how to not answer the asked question. But it’s not quite that cynical. It’s more about bringing it back to your platform so that your message is what’s getting across, and not somebody. Else’s message. And and also having some level of grace in doing that,

Kris Safarova  39:09

of course. And can you give an example of bringing something back to your platform, just for someone who is not completely sure how to do that?

Phil Gilbert  39:17

You know, again, I’m not an expert in this, but since you asked about my book, irresistible change, that’s my platform, and that’s what I keep wanting to talk about. You know, I it really is just about you asked you asked a question about someplace I stumbled and I told you that anecdote, but then I did bring it back to, you know, I wrote about it in my book, and then I talked about the branding effort, and the branding is chapter two of the book. So that’s an example of I could have gone anywhere i. With any particular anecdote of where I stumbled. There was certainly more than one, but that was a good one, because it did highlight it. It was a personal growth moment, but it led to a breakthrough in our program, and that’s really what I am here to talk about, because I think, I think, I think change has has been mismanaged for too long. And I wrote, I wrote this book, you know, John Carter’s. I’m a huge fan of John cotter’s book, Leading Change, and it’s one of the great books, business books of all time. But over the years, I I ran into so many people who also thought John cotter’s book on leading change was fantastic, and they were failing at transformation, and yet they were using all of Cotters words, and they were and they were looking at his eight obstacles. They were saying, I but I had, I have quick wins. I’ve had four quick wins over the last two years. None of them have stuck and so and I’ll ask them very specific questions about what were the teams like, very tactical things. And I just over and over and over again, people think they’re following this strategy, but their execution faltered and they they didn’t really understand, for example, quick wins. You know, in my book, I talk about how I ended up defining a win. I really thought about what is a win for a program. It’s not the same thing as having a team be successful. And that’s a lot of people get that wrong. And you can read Cotter and you can, you can, you can think it’s just about the team’s success, and it’s not. It’s something different. It’s a win that helps your program grow. That’s what a win is. And so a part of it is a team success, but it’s not everything. So I wrote this book to be the operating manual that sits right next to cotter’s book on the bookshelf. There’s no strategy in my book. There’s very little strategy in my book. It is, this is what we did. These are the decisions that we had to make. This was the situation. This was the decision that we made, and here was the outcome, and each and and I feel like I haven’t seen that book written before, so that’s kind of why I wanted to get it out there and give people an operating manual for how to execute change. You know, Steve Jobs said, famously, said when he when he went back to Apple and got asked as to why he was cutting so many, so many products, or he was, he was talking about what went wrong, and he said, Well, what went wrong is we had ourselves a set of people who thought that The idea was 90% of the value. But in reality, execution is 90% of the value, and that’s what that’s what this book hopes to be, is the execution underneath Carter’s strategy,

Kris Safarova  43:15

100% execution is so hard and so few people are able to do it. Or we need to do it. We need to put in the work. A lot more people would be able to do it if they just put in the work. Yeah, I want to spend few minutes getting your input on how people should think about AI. I

Phil Gilbert  43:32

think AI is just a tool. I’m actually I guess that would put me in the optimist camp. I don’t think it’s gonna I don’t think it’s gonna kill us. I think it’s just another tool. And the value in AI transformations that is not being seen today. You know, study after study. Now, there’s multiple studies showing that some 95% of efforts are failing, and I think it’s because, again, people are thinking that AI is the thing, when, in fact, culture is the thing. Culture is what delivers outcomes and and it’s the we came up with a formula for culture and outcomes at IBM. And I thought about because I really do believe that you can give. It’s like teams. If you give a great team a mission, they’re going to achieve it, and they’re going to achieve it almost with any tool set. It’s the middle 80% of teams. That’s where scale comes from. Is how do we help those folks? And I think that it’s the overall culture is really what drives more outcomes than anything. You know, culture eats strategy for breakfast, blah, blah, blah. We started to think about, okay, if we’re going to change a culture, we need new outcomes. At IBM, that’s why change exists. We need new outcomes. Um, we broke down. If you believe culture equals outcomes. I started thinking about what defines a culture, what, what does a What does an archeologist do to understand a culture? And spent time noodling on that, and ultimately came up with this formula of, it’s the people, their skills and their mindsets, it’s the practices that those people in their units teams do and use the tools and practices and methods, and it’s the places that they do it in. And those three things, you have to change all three if you want to affect outcomes. And AI is no different. AI fits squarely in that practices place and in the skills place for people, people have to know how to use it, but there are going to be an inordinate amount of things around the introduction of AI that is going to actually change a team’s outcome. You know, so much of the AI that’s being measured today, first of all, it’s being measured simply because it can be measured like I have no idea what it means for 30% of my code base is AI generated. That’s a useless metric. I don’t know what that means, but we can measure it, and so people start measuring it. But what’s more interesting is, how have your outcomes been different when using AI? How have your market outcomes been different. And I don’t I see very few companies that are focused on that question. And I see very few companies focused on Well, if, if AI is important, how do our how does it impact the team’s workflow? Of course, individuals can use it to generate emails, to generate code, to do better research, to get ready for a meeting. But I don’t think that too many folks are working on how does the team’s behaviors change in this new world of AI, and how do we measure those changes, right straight through to differentiated outcomes from what would have happened without the AI. There are a few companies that I think are starting to do it pretty well, JP Morgan. There’s been a recent case study that Harvard did on JP Morgan that this that’s pretty interesting, and they’ve approached this very much more as a cultural question than as just a tool in question. And I think, you know, that’s how I think companies need to start thinking about AI. There’s been way too much hype about its potential. I think way too much hype about the morality of of it all. It’s just another tool, and it’s a very transformative one. But if you look back on the companies that thrived from the change, you know, from our shift to the internet, I think it’s gonna be something like that.

Kris Safarova  48:14

Phil and with the last few minutes for someone who will read your book, what are the key things you want them to take away.

Phil Gilbert  48:21

You know, I think there are a lot of interesting lessons in it. Probably at the end, I talk about how you know you’re done, and I offer a framework that we came up with, which are, which are based on anybody’s experience with any product or service ever. And they’re called the universal experiences, and they’re basically the nine contexts in which we interact and engage with the products and services that we use. I’ll give you an example. One of them is discover. And so if I’m, if I’m walking into a Walmart and I’m looking for Tylenol, I’m in discover mode, I’m trying to find it, right? That happens. That happens over and over. Sometimes, Discovery just happens once, when you, you know, buy a new car. It lasts for a long time. You go discover again for a long time. But these are nine contexts. I don’t bring them up to so much. Proselytize the nine contexts themselves, but in each in each of these contexts, for a company of any scale whatsoever, the for for a customer to experience that thing creates requires a lot of people, and too many. Transformation efforts focus solely on the product or the service, and they don’t really take into account the holistic system of an enterprise or an organization that is that is actually required to deliver a touch point to an end user. And until you can evaluate the touch point and know that every single part of the organization that contributed to that touch point, the sales people, the support people, the product marketing, all, all of the parts of the organization that have contributed to that experience. Until all of those have undergone your change, you can’t expect a different outcome. Now I say all that to say this, transformations take time. And the reason that, you know, I talk a lot in the book about this notion of an adoption mindset, too many change programs stop at the product team, or if not there, if it’s a broader application, they stop at the enablement of the change, and they don’t track the change all the way through the adoption of that thing, which takes weeks, months, sometimes quarters, for a new thing to actually be adopted in the real world, with all of the real systems around it that are contributing to it. And so companies don’t tend not to have the fortitude to kind of see that through. And they start measuring. They start measuring change based on the enablement metrics, how many people took the training class? That’s a useless metric. The only metric that matters is how many people adopted the change. And that’s, you know, if there is a takeaway, it is that the result in the marketplace requires so much of the organization to be a part of it that you need to be able to see this change through all the way through adoption. It doesn’t stop with somebody going to a training, and it certainly doesn’t stop on the day you announce it, one of my biggest pet peeves are reorgs. Reorgs are done to achieve some new outcome, right? Something’s not working right, and so we need a reorg information is not passing fast enough up. And so we want to thin out our executive ranks, or these set of products belong better over here, because it’ll be closer to their users, and these people that are selling it have affinities with one another, whatever it is. And a reorg typically, is worked on for months and months and months and months by consultants and executives, and it’s announced, and then everybody kind of goes done, and that’s just the beginning, but very few companies view that as the beginning, and they don’t track that. In this case, reorg, they don’t track it all the way through to did the information actually start flowing better? Did the salespeople actually start using their leverage to bring it to cross sell or upsell these new products? And did we actually see a change in the market results down the road? I see very few companies that have that. I call it the adoption mindset, as opposed to the Enable enablement mindset, and that’s what the closing bit of the book is really about, is making sure that you can trace an end result in the marketplace, a new outcome all the way back through every part of the organization that touched it and seeing that they have, in fact, adopted the new changes.

Kris Safarova  54:33

Phil and the last very quick question, if you could instill one belief into every listener’s heart mind, what would it

Phil Gilbert  54:42

be one belief in every person’s heart? You know, it’s that future is going to be fun. The future is going to be fun if we constantly, constantly have a healthy disrespect for the status quo. Phil,

Kris Safarova  54:57

thank you so much. I really appreciate you being. Is such an incredible conversation, and there’s just such a depth of wisdom there that we could have spoke for many, many, many hours on this topic. Where can our listeners learn more about you by your book, anything you want to share?

Phil Gilbert  55:12

Yeah, two things. You can go to gilbert.com that’s the easiest place to learn anything about me. And you can also learn about the book there. It’s available everywhere that books and ebooks are sold. And by the way, get two of them because you’re gonna want one for the office, one for home, and you probably want one for your dog or cat, your colleagues

Kris Safarova  55:37

on the same team by yourself. We only have so much time in the day. That’s right. Kris, thank you very much. Our guest today again was Phil Gilbert, best known for leading IBM’s 21st Century transformation as the General Manager of design and author of the book irresistible change. And you can access the key insights and practical action steps from this discussion at firms consulting.com forward slash action. This is just something new that we are introducing to make sure that everyone can benefit fully from this very important discussion. And this episode is sponsored by strategy training.com and you can download some gifts from us. You can get the overall approach used in well managed strategy studies at firms consulting.com forward slash overall approach. You can get McKinsey and BCG winning resume, which is a resume that led to offers from both of those firms. And you can get it at firms consulting.com forward slash resume PDF. Take a look, see if you can adjust your resume at every level, however senior you are. It’s always good to have a good resume. And you can also get episode one of how to build the consulting practice level one. You can get access to it at firms consulting.com forward slash build. And lastly, you can get a copy of one of our books that we co authored with some of the listeners of this podcast, some of our clients. And you can get it at firms consulting.com forward slash gift, and it is called Nine leaders in action. Thank you so much for tuning in such an incredible discussion, and I’m looking forward to connect with you all next time.