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April 11, 2023
Nothing dictates real secular change to enterprise operations more than financial pressures. We are rapidly arriving at a third major trigger that will lead to the evolution of many autonomous enterprises where leaders have no choice but to drag their operations out of the dark ages.
These critical topics are up for debate:
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This transcript was auto-generated from the original recording and lightly edited for readability. We've done our best to catch errors, but names, technical terms, and company references may be misspelled or imperfectly captured. For the definitive version, please refer to the original audio or video. Views expressed are the speakers' own.
So, without further ado, let’s get some of these esteemed panelists to introduce themselves. So, over to my far left — Mr. Rohan Murthy. Name, rank, serial number.
Morning. My name is Rohan. I’m the founder and CEO of Soroco. We are a technology company headquartered in London, Boston, and Bangalore.
Good, good, good. And I won’t tell anyone who your brother-in-law is, I promise. Completely irrelevant.
Excellent. And I’m Keshav — that’s K-E-S-H-A-V — and I’m the CEO of a company called WNS Global. People often ask me what WNS stands for, and it’s evolved across the years, but right now it stands for ‘winning never stops.’
Yeah, I’m Leslie Willcocks. I’m a professor at the London School of Economics and Political Science, in the management field. I’ve been researching global sourcing with that lady there, Mary Lacity, for many years — decades, in fact — and more recently I’ve been looking at automation and digital transformation, maintaining that research stream, and I’ll be able to talk a little bit about that today.
Hi, I’m Carole. Phil, thanks for inviting me along today, and it’s lovely to see some old friends — well done on getting us all together in London. When last I saw a lot of you, I worked with Capgemini and I was on the supplier side delivering BPO, talking to Phil about how we were going to use automation to transform how we did things. Since then, I’ve now worked for a company called Accorion. Effectively I’ve gone back to the other side, to actually deliver for Accorion — so I’m the COO of Accorion. I look after transformation, technology and operations. So I’m really here today to, one, represent what’s possible to do in a small company and how technology really makes a difference to our clients, but also to learn from you guys. So I’m more in listening mode than trying to sell you something. I actually want to hear what you have to say for a change.
There we go. Mr. Keppel.
I’m John. I will try and sell you something if you need any insurance. I’m the Chief Sustainability Officer for Zurich UK. That’s interesting, I guess, but in my previous five years — I started that role midway through ’22 — I was the COO for Zurich in the UK, so many of the things that Phil was talking about this morning are very familiar to me.
Tiger.
I won’t bore you with trying to pronounce my last name. CEO of Genpact, now based in London for the last three years. I decided that the middle of the pandemic was the right time to move from one continent to another, and so I’m delighted to be here. I don’t know how you make it happen that, in spite of all my travels, I end up lining up in every one of your sessions.
There we go. Mr. Radha, it’s great to have you here.
Thanks, Phil. Thanks for the invite, folks. I’m Radha. I’m the CEO and MD at Infosys BPM, which is a wholly owned subsidiary of Infosys. The CEO stands for Chief Empathy Officer.
Chief Empathy. Fantastic. There we go. So, without further ado, let’s get into some conversation about enterprise leaders — you know, who’s going to succeed and who’s going to fail as we tackle this global assault on everything that we once knew was stable. Maybe, Leslie, you want to kick us off here.
Sorry, what was the question?
That one. It’s that one there. Enterprise leaders — who’s gonna fail, who’s gonna succeed as we tackle our global assault on everything.
Yeah, we’d just done research, because I was absolutely puzzled about where we were all going. I delayed writing a book, which I called ‘Globalization, Automation and Work: Prospects and Challenges,’ because I couldn’t get my brain around the globalization bit — and you did a good job here, but I’m a bit more radical than you, and I think you have to understand context before you can answer that question. And the context is that the level of complexity, dynamism and interconnectivity is now so high that we are in an unprecedented and distinctive place, where the uncertainty, the level of risk, and the unanticipated outcomes are massive. I call this not the new normal, but the new abnormal. I think COVID-19 was a forerunner to what is going to happen in the future and to the way we can respond to it, and it’s a very difficult world to manage. I’ve got it in for forecasters. Mary and I always have a joke about futurists who appear at conferences, and increasingly we believe that they’re very good for corporate entertainment, but in terms of predicting the future they’re less useful than more traditional methods like looking at the stars, reading tea leaves, and perhaps the good tried-and-tested one of reading chicken entrails. The other thing that doesn’t seem to work is faith-based economics — the idea, and Britain is a prime example of this, bottom of the league, that the market’s going to help us and we’re all going to end up in the right place eventually. It’s not working like that, and this is not a context in which we operate. What’s going to work is more anticipation, more resilience in organizations. One of my favorite cartoons — I’ll stop in a minute, Phil, I realize there are much more experienced people than me — one of my favorite cartoons, which is above my desk, is: there are 22 men on spikes, they’re at the Tower of London, and the date is about 1743. They’re on spikes because they’ve been traitors, and people are throwing rotten fruit at them. And one of the heads turns to the other and says, ‘I think it’s time for Plan B.’ So I think there’s gonna be a lot more Plan A’s, Plan B’s, and Plan C’s in the future, and the organizations that don’t do that are gonna run into real problems. You can come back to me for more recent research on that, but I think I’ll stop there.
Interesting. Carol, what do you think? Plan A, Plan B, Plan C — who’s gonna succeed and who’s gonna fail?
I’m trying to remember when everything was stable, because I think we all are a bit victims of recency. So what we used to think was stable was never stable. Kind of going back to your friends that were on spikes, looking backwards, things are always changing. And I suppose, if you go back to evolution — you’re always very thought-provoking, so you’ve got me thinking — the reality is we all have to be ready. The classic evolutionary requirement: adapt or die. So I think the organizations that are able to adapt are the ones that are always going to be most successful. What that means is different things at different times, I suppose. How you adapt is the question. I would agree that looking forward is difficult, so I wonder if the key to it is also being more closely connected within your ecosystem, as you’re talking about, Phil, and within your communities, because then you will learn from the people you’re working with, from your customers, from your suppliers. So I think it’s always about learn from everyone. So adapt or die — that’s never going to change.
Adapt or die. It’s very heartwarming. What’s your perspective, Radha? You’re from India.
Yeah, so I’d like to use a recent analogy, the RRR. I don’t know how many of you have heard this, but the song from RRR earned an Oscar. For me, three R’s matter in this situation. The first R is being relevant — every day, finding that relevance with the stakeholders, whether it’s the customer, whether it’s the supplier in your ecosystem, or your employees. Staying relevant to them as a leader is going to be very, very important. The second aspect is responsiveness — your ability to respond to change, and to do this while acknowledging your vulnerability in a very authentic way, is going to help enterprises in this uncertain environment. The third, clearly, is resilience. And doing these three R’s — being Radha, I need to give the fourth R too, which is respect. Whatever you do, you bring respect into that equation, whether it’s with the governments you operate with or with your employees. So these four R’s, as an enterprise leader, would help you create some kind of template to cope with this level of uncertainty and dynamism in the marketplace.
OK, thank you. So, as you can see, these are the headwinds that we’re talking about impacting us. So let’s think a bit more about adapting to this new recessionary, post-pandemic world. What is gonna work, what do we have to do here? Maybe, Tiger, you wanna share some thoughts?
So I just want to connect the previous question, and the answers everyone gave, to this one — and I agree with all the responses. One, leaders should stop trying to predict the future. Forever now, we must understand that we are in a new world, and the new world is a connected world. By definition, in a connected world, when there’s an earthquake somewhere — I’m talking about a metaphorical earthquake, a change — it’s felt everywhere immediately. In an unconnected world, you can have an earthquake in one place and you’ll read about it, but you won’t feel it. In a connected world, every earthquake is felt everywhere. I don’t know if people know, but there are about 100 earthquakes a day in the world — which means every day you’re going to feel change. So therefore leaders and today’s enterprises have to think: I’m not here to predict tomorrow, don’t even ask me the question, I refuse to answer. I’m here to create Plan A, Plan B, Plan C — the scenario planning — and if this happens, this is our response; if that happens, that’s our response. Which means you’ve got to be flexible enough to move in five different directions, four of them opposite of each other. So how do you do that? Variabilization of everything, I think, is going to be one direction everyone has to go in — which means ecosystem, which means partners, which means connected technologies, which means diversity. So many things fit into that. So agility, flexibility, variabilization, and then the ability to sense — because, yes, there are 100 earthquakes, but can you sense it one second before you feel it? If you sense it, then you’ll respond to it with either Plan C or Plan D. So that’s what we think about for enterprises in this world. And I don’t think about it as a new recessionary world — I think it could be a recession, but my view is that there are going to be times when it will become hyper-growth overnight. It’s going to be overnight, so people are going to get left stranded with, ‘Oh my God, I wish I had planned for this demand — now I’m going to miss it. My competitor has capacity, so he or she is going to capture it.’
Right. And you think ecosystems is the best way — the more you broaden out your conversations, the more you… OK. And then, but I’ll be clinging more to the rules of the past. It’s a leading question, it’s a leading question. Maybe, Keshav, are we clinging to the rules of the past too much, do you feel?
So, Phil, that’s an interesting question. Personally, the way I’m seeing our clients interact with us and respond is: taking leadership. A lot of the stuff we’ve discussed is not quite obvious to everyone — change is a constant, and the fact that people are looking to come up with new agile and resilient models and, in my view, putting that famous word you used earlier, digital transformation, at the center of everything they want to do. But while doing all of this, they’re also very conscious of all the other assets available around them that you can actually leverage to go from point A to point B. So things like the new areas of technology — intelligent automation, which consists of so many other things people want to leverage. What are the new interesting things being spoken about? We keep talking about it, and now we’re talking about ChatGPT and metaverse and things like that — people are all asking, ‘How can you guys help me build a stickier relationship with my end customers, or create impact with my customers, leveraging all of this?’ But while doing all of this, I’m also seeing that most of them are trying to carry their people with them. I think that is very, very critical. Somewhere in your presentation you spoke about autonomous models. The reality is everyone is trying to understand which repeatable tasks can be replaced by machines and technology and software and whatever else — and, more importantly, how do they elevate their talent to new areas, while creating an ecosystem and an environment where everyone is now working together. And while doing all of this, I think people are also focused on the fact that you have to create an ecosystem where you are positioning emotional intelligence and empathy — again, Radha used that word earlier — as potential game changers. So you’re carrying technology, you’re carrying a new business model, you’re carrying your people with you, and you’re continuously focused on what all these new technologies around you are that you can leverage to give a better experience to your end customer. So I actually think people are voting very well in terms of grappling with this new model — and if you’re not, you’re toast.
That was very eloquently put — thank you, Keshav. Yeah, we’re struggling with a lot of things, as we spoke about. So maybe, Rohan, at the end there — you’ve come from a services family, but you’re pushing a technology solution that transforms work at this moment in time. Do you feel that companies are embracing this, or are they still clinging to the past and how they do things?
So a couple of things, Phil. First, I come from an academic family — seven generations of teachers, just to be precise, with one anomaly. My background: I did my PhD in Boston, I used to teach students, I used to do research, I published papers, all in computer science. And there’s something very interesting: over the last couple of years, the only time I’ve spent in the corporate world is essentially building the company I’m building right now, and we have customers who are mostly Fortune 500 or their equivalent counterparts in Europe. What I’ve learned, I constantly contrast with what I used to find with my students in academia. The one constant question I’ve had — and I think, Phil, it goes to point number two on this slide, as well as some of the other things folks have said — is: I used to constantly poll students, asking, ‘Hey, when you graduate, how many of you are going to go work for an insurance company?’ I used to teach students studying computer science, the same place where Mark Zuckerberg and all these cool kids studied. How many of you will join a bank that’s not Goldman Sachs? That’s probably the only exception. How many will join an insurance company? How many will join a manufacturing company that’s not Apple? And almost never could I get any student to say, ‘My dream is to work at an insurance broking company and help them build technology.’ So I used to always wonder: these are all important companies, important industries — so who’s actually going to help them be more relevant with technology? Now, for sure, there are some services companies who will say, ‘We are the right people’ — no doubt. But that alone can’t be the answer. Every company, in my limited opinion and experience, to be relevant has to understand technology at a certain fundamental level, in their DNA. And if you’re not going to be able to attract that talent — because all the cool kids want to land up in the Valley, want to build OpenAI, want to be at Google, at Amazon, maybe Microsoft, or at startups and technology companies — I used to constantly wonder, and I still do, and I see this with our customers too: when you’re sitting across the table, who on the other side is actually able to help them understand what’s happening outside, apart from all the buzzwords? I’m not going to use words like AI. If you really get down to the specifics — and a very specific case in point — I actually think ChatGPT is incredibly scary, and if people are not scared enough, you need to be. Radha, I’ve known Radha for 18, 20 years now, since I was probably in high school in Bangalore; in 2013 we were standing outside Infosys BPO’s gate arguing about automation. ChatGPT can pass a high school biology exam, or a college biology exam. My friend, who’s a professor at Princeton in biology, is able to give his biology and genetics exam to ChatGPT, and it scores 98 out of 100. These are smart students at Princeton, no less than Cambridge and Oxford. And that is so scary. So I keep wondering: who in all of these companies is able to help them understand what technology is going to do to their business, before it’s too late? And I actually think, therefore, your point number two is screaming — and it always has been screaming — as the biggest issue, at least the way I see the world. And I constantly wonder how companies will continue to attract, or whether they can attract, the kind of talent they need to stay relevant in this increasingly scary world.
It’s amazing, isn’t it?
So, should I respond to that on behalf of the insurance industry? Because that was a damning indictment of my career right there.
Well, I hope I’m not coming off as damning. Maybe, John, you can tell us what the world’s gonna look like when we emerge from this.
I definitely cannot do that. So I will instead answer the previous questions, because it’s way easier. The thing I think about question two is that an organization that’s solved question one will have already solved question two. We’re working in a post-pandemic world right now, so we’ve done that. We’ve already made all the adjustments necessary to work in an inflationary environment. Of course we had plans for that — we didn’t think we’d have to dust them off quite so quickly, but we did. So an organization that’s got good leadership, good leaders, good plans, good resilience, good partners, good capabilities, good connection with a customer base can respond to those things really quite dynamically. Terrified by climate, terrified by AI — those are the things impacting businesses now and in the future. Climate, frankly, because we know it; AI, because we don’t — and we don’t know what’s going to come out of that box, and it’s extremely scary that the smartest people in the world are busy in that box and they don’t even know what’s going to come out of it. On climate, however, we do know what’s going to happen. We are in charge of the future to some extent, we can certainly influence it, and for a lot of businesses, including our own, it’s a substantial threat, but it’s also a significant opportunity, because the entire global economy is going to shift to a post-carbon world, and that’s going to have an effect on the vast majority of businesses operating today. Catastrophic consequences for businesses that cannot adapt, and some amazingly positive consequences for businesses that do. So making sure that enterprises understand that, that they’re engaged in it, that they are changing their organizations as they need to, that they’re listening to their customers and making sure they understand how their customers’ businesses are going to change — certainly for us, as a largely B2B enterprise, that’s incredibly important — and then supporting, challenging and influencing that customer change, and making sure that we can take market share through that journey. And to do that, if I look back towards this community, having partners — one of our significant partners is represented by someone up on this stage; I won’t say who, but we have a relationship that absolutely focuses on outcomes and that, at its core, is not about a new widget or a new chatbot or a new little piece of technology. That’s not the innovation we’re after. It was a transformative relationship, a cultural relationship — one about cultural alignment and about changing the customer experience that we can give in partnership with another organization. So, linked to some of those outcomes, some of those cycles of buying behavior that Phil was referencing earlier, I think that partnering approach and that community is going to be really, really important as we head into the next couple of big areas of challenge.
Interesting. So you see partnerships as the future?
I mean, partnerships is part of the current reality. The issue is how you can leverage them — whether or not we change the name of the procurement professional to, I can’t remember what it was, a partner experience officer. But if I look at my head of procurement, she’s also one of my biggest sustainability champions, because she’s been driving sustainability initiatives all the way through procurement for the last five years. So if someone’s just turning up now and going, ‘Oh, I really need to think about my supply chain in a new and broader way,’ they’re quite late to that game. So although we haven’t got all of the name changes that were on the board, there’s that kind of leadership-role challenge. The other bit of my role — and I’m not hugging trees and saving the planet in my spare time — is customer experience. I run the customer office at Zurich, so we have all the customer sentiment analysis, our tone of voice to customers, all of our complaints management comes through me, as well as sustainability. So really different executive roles are emerging to get the right balance of: what are your customers thinking? Who’s looking at those things? Have you got management roles that can challenge the other management roles you have — the guys running the P&Ls? Who’s challenging them? Who’s making sure the customer experience is right? What if they’re losing sight of customer outcomes?
So there’s a lot of change, I think, happening in the way organizations are being built. But is it about developing… The CEO has to drive the culture of the company — saying we want to be more client-centric, because we’re not nice enough to our clients, we’re screwing up, we need to be closer to our clients — then that surely is a culture you want to instill across all your leaders in the business. So how do you get everybody thinking client-centricity? How do you get everyone thinking employee-centricity? Isn’t this…
I mean, in our organization — and I’ve seen it in other organizations, I think it’s broadly similar — it’s all about purpose. Our industry is regularly the butt of a joke: who on earth would go there to die? But the answer is me, and a few people like me. The reality is it’s an incredibly purposeful industry, insurance, and the people who work in it take that purpose extremely seriously. Our job is to support individual customers, corporations, and businesses in their times of most need, and we’re not remotely cynical about that commitment. So there is a strong purpose. Now, that’s not enough for all of our employees — it’s enough for some of them, not all. They want to know that we’re also committed to positive outcomes, social outcomes, and other things, and building that engagement is something relatively easy to do when you’re recruiting particularly younger people into large enterprises. I think the thing worth recognizing is that that’s also an important selection criterion in partners.
So let’s flip forward here. I’m gonna flip to the next polling question, if we can have it. Get into your Slido and type in your code, and then we’ll ask a question around how we view the state of the economy. Is it business as usual? Is it challenging and you’re nervous? Very challenging, very nervous? Are you bullish — you think everybody’s just overreacting? Or are we all doomed? Look at this. Yeah, nervous about the fire alarm. Very challenging, very nervous. None of the above. So it’s challenging and I’m nervous — I think it’s nervous, but not very nervous. OK, but there’s quite a few ‘very nervous’ as well. But only one or two people here think we’re completely doomed. There we go. Good, thank you for that. So let’s get into the next level of this conversation, which is: how is this current climate impacting investments in emerging tech and innovation? We’ve come through two gravy-train years in the tech and services industry, where people were plowing money into cloud migrations galore, lots of software being acquired — to a big pullback, as we’ve seen in the last couple of months. It’s been quite an alarming shift. So maybe, Rohan, do you wanna kick this off with what you’re seeing, particularly from your clients, in terms of their investments in tech?
I think our vantage point is really influenced by what we do and the kind of outcomes and value we produce. From our vantage point, we haven’t seen anything really change. If anything, we actually see more acceleration now. Our actual realization of new customers has never been faster than it has, particularly in the last four months. Again, that may be specific or endemic to what we do; I don’t know the broader perspective.
Is that because you feel you have a product that helps them reorganize how they work?
Yes. It helps them think about efficiency. It also helps our customers think about — essentially it’s reflecting some set of priorities. I’ll perhaps give one example. A very large investment bank that we work with decided to cull a whole bunch of vendors in this environment, but we have actually been beneficiaries of that process, because the way it was explained to us was: ‘Our highest priority is either top line or bottom line, and this is how you fit into our priorities.’ And so, as long as we’re able to do something like that, we benefit.
Interesting. So we shared some data from our Pulse on emerging tech adoption, and you can see some — like metaverse — have very high adoption, but from a very, very low base of companies, whereas you move to the right and you’ve got a high base of companies but a fairly slow growth of things like process automation and IoT. Low-code seems to be emerging as the fastest-growth, fastest-scale area in the industry.
Yeah. So we’re seeing it a little differently, Phil. I’m pretty certain that both Tiger and Radha would probably feel the same, but we’re seeing that a lot of companies, because of the uncertainty in the ecosystem outside, are probably moving towards much more short-term-gain projects. So they’re focusing much more on cost, probably more on agility and business resilience, as opposed to investing in longer-term-ROI tech projects. I would also say that for the IT services players — we’re not in that space, generally — the discretionary projects probably are now on the back burner. But again, I think the smart companies are not letting go of the opportunity to keep investing a little bit in innovation and R&D. So we’re actually seeing, for example — we just bought a company a few months ago which is essentially in low-code — and we’re seeing that the way of interacting with clients is dramatically changing, and we’re seeing significant business momentum. But one thing I must tell you: at the end of the day, we are not here to talk to our clients about technology and automation and blah, blah, blah. We are here to actually work with clients and help them drive outcomes. Those outcomes would be around what they want to get done with their end customers, what they want to get done internally, what they want to get done in terms of impact to various stakeholders. What they look to do is have a partner who’s investing in all of these things, helping them focus externally, and enabling the partner to be an extension of their enterprise. But today, I’d say the focus is going to be much more on the short term — though the smart companies will continue to invest a little bit in innovation. Because there’s an interesting study we did: we found that companies that kept investing in R&D and innovation, even in a downturn, outperformed the market by about 10%; but when the market comes back, they’re outperforming by at least 30%.
I would agree. From my expectations, when we’re working with our partners, there was a moment where you need a solution — you always need solutions, but they need to be able to deliver relatively quickly at the moment. There isn’t the expectation that we’re going to start something that might deliver in two or three years. I think we’ll be more looking to start small things that give immediate returns, whether to our client experience or employee engagement, because one of the things we hear more and more of, going back to the talent question, is also that people are unhappy with the tooling they’ve got because it doesn’t work. And, going back to your point, there’s a huge gap: we’re producing more clever, well-qualified people every day now than we ever did before, but we don’t necessarily welcome them into the workforce with jobs or tasks organized in a way that they feel they can bring something to. So again, we’re continually looking for ways not just to automate, but to make that journey easier for people joining us. And then also balancing that against the older skilled workers, who may have less willingness to adapt to technology — but it’s even more important for them to understand how we do that. So in looking at what technology companies we’re looking to partner with, or the ideas we’re looking for, it’s something that delivers quickly for either our customers’ challenges or employee engagement. None of these five-year SAP rollouts.
We looked at what clients were doing with digital technologies back in January. What we found was that 65% had a very short-term view on digital investments. In fact, in January, about 30% of those were sweating the assets — they were driving their existing technologies because a lot of them were in a desperate situation. They were trying to maintain cash flow, retain their customers, cut costs. Then there was another percentage using the technologies to underpin today’s business — they were investing in digital technologies, but for particularly short-term reasons, depending on the objectives driving them. So typically, for digital technologies, you’re either driven by a customer-experience requirement, an operational efficiency moving to operational effectiveness, or developing new products, services, or even new business models — and also, I think, an employee experience, which is very often neglected. Those were underpinning today’s business with their investments. But then there are more long-term companies — about 20% of those are delaying the digital strategy: they’re spending the money, but spreading it over a longer period. I think the next nine months is a bit of a semi-paralysis for a lot of people, despite the talk of more money going into this, and they’re also spending more money on short-term survival. And then there’s this glorious bunch of digital leaders — between 15 and 24%, depending on sector — that really have an adaptive digital strategy, have a very long-term focus, and are building resilience for the next time they run into trouble. So it’s a very mixed picture, and I’m sure all the vendors represented here will recognize what I’m saying.
What’s that?
So, going back to the earlier question — in my mind it should have had a ‘none of the above’ as one of the answers, because to me the world we are in is incredibly challenging but incredibly exciting. I’ve been in this industry for 25 years; I’ve never seen the amount of change our clients are thinking through — all enterprises across the globe, irrespective of industry. So what does that mean? Number one: the phrase you had, ‘dichotomy,’ is something we’re seeing a lot. We’re seeing a gravitation to two ends of a dumbbell. Almost every enterprise is saying, ‘I need a dramatically improved cash flow and cost equation, and I’m going to attack it wholeheartedly.’ These are organizations, some of whom have never had partners — I’m talking about Global 500 companies who’ve never had partners in their entire history — all of a sudden standing up and saying, ‘I need partners. I need to take costs out immediately.’ But the same enterprise is also saying, ‘When I do that, I’m going to take a bunch of that money and invest and protect some of my long-term investments that I need to transform using digital technologies, because if I don’t, then — to borrow Keshav’s phrase — you’re toast.’ So one, there is a gravitational pull in two directions. Number two, there are lots of new organizations jumping in who have never jumped in before — so how could I be nervous? It’s the most exciting time. And the last one: I’m going to be a naysayer on this panel. I actually think generative AI and large language models and AI are incredibly exciting. Should we be scared? Yes — of every technology you should be scared, because it can be misused. Every technology has incredible value: nuclear fission and nuclear fusion — how exciting, and how dramatically disastrous and tragic it was. Same with AI. We’ll end up throwing the baby out with the bathwater if we say, ‘Oh my God, AI is scary.’ The use of AI is very scary. At the same time, the use of AI can bring four billion people up — from not being able to get educated, not being able to access healthcare. That’s what AI is going to do. That has to be exciting. So our job is to figure out the right way to use that AI, govern it the right way. I believe there’s a problem in the world where some really big thinkers — Elon Musk, for example — think AI is going to destroy the world. I guess you need some people like that, so they can motivate others to jump on to trying to solve that problem. It’s a problem.
That’s getting big news in the US in particular now.
Yeah. So, as you can see, I’m very passionate in the opposite direction. It’s our job to figure out how we use it — it’s our job. It’ll be tragic if we don’t.
Sorry, Tiger — I think I took off in the opposite direction. But no, your point is very valid. It is scary, because I think there are very real, tangible medium-to-short-term concerns on job loss. I think that’s a very legitimate thing to worry about. When we had RPA and all these things, those were not job-loss things — they were all basic scripts. But now we’re talking about a machine being able to — it doesn’t reason, but it does correlation in a way that, it turns out, most of our jobs actually have a lot of correlation. And I think what it does to the labor force is a very real concern.
No, I’m not saying no — but I don’t use the word ‘scary.’ I would use the words, ‘OK, there’s a problem, let’s sit down and solve it,’ because I don’t think any of us, or anyone, can prevent that from happening. You can’t. So I always try to solve problems I can do something about, rather than saying, ‘Oh my God, what do I do? It shouldn’t be happening.’ OK — so what are you gonna do? It’s gonna happen. So let’s try and solve it.
And I agree. I think the reskilling problem is the problem of the world, and I would actually agree with Tiger: for us, these are all opportunities, not threats. You’ve got to learn it, make it part of your business model. Let’s face it, most of us are focused very heavily on business domains, and around that we do so many other things where technology becomes important. And we’ve been through so many paradigms of change — we went through the Y2K model earlier, we went through Brexit (everyone said our business would be killed), we went through the pandemic and came out much better, and now we’ve got AI, which we’re leveraging as a tool to deliver better to our customers. Because one of the things I realized is that these technologies and scripts and algorithms cannot replace human beings. You can’t outsource morality, fairness, empathy — things that actually need human input and insight. So from our point of view, we’ll have to agree to disagree with Rohan for some time. There will be some amount of job losses, but we are not here to take care of job losses — that’s for the politicians to worry about. Our job is to take care of our companies and make sure our clients do well.
This is not for this panel, but I think you have too much faith in human beings and politicians. That’s the second one that’s scary.
No, but I think the human is interesting. I remember a conversation with Rohan as early as 2013. I gave him this example of two footwear salesmen on a flight to Africa. Both of them land there. One looks and says, ‘Oh my God, there’s nobody who wears footwear here,’ and takes the flight back home; the other stays back and says, ‘Hey, there’s a great market and an opportunity to make people better off by wearing footwear.’ So I think using AI responsibly — amplifying human potential, putting the ring-fences around it in the right way, and providing leadership with context — I still feel domain expertise and context-specific understanding, interpretation of AI decisions to help make better decisions, would be a role. Would it need reskilling the current talent? It absolutely would. Would a lot of boring jobs go away? Absolutely. Would it amplify human potential? It would. But if you treat it as a threat, then you worry about, ‘Hey, it’s going to substitute me, it’s going to kill me’ — in the long term, anyway, all of us are dead. I think it’s that balance we all need to find.
Yeah, in fact — the World Economic Forum, not quite on top of it as HFS is, obviously — but if you see their latest prediction, it says technology may take out 85 million jobs, but this same technology will create 97 million new jobs as well. So we’ll have to wait and see how the jury actually pans out.
I mean, we’ve been talking for 10 years-plus about automation and AI taking away jobs. Right now we have record-low unemployment, particularly in low-income jobs, which technically should be the ones more easily automated.
The best estimate I know of net job loss by 2030 is that all this automation will lose 18% of the global workforce, but you will create 17%. So the net job loss — it’s the issue we will discuss this afternoon. But the issue is dramatic skill shifts, not net job loss — people who didn’t upskill themselves — and the issue is navigating the skill transfer.
We had a program, when I was CEO, putting automation software across the business. And apart from five minutes of apprehension at the outset of that program, if you ask anybody in the company today what’s the main thing they’ve achieved, you’ll get stories of people who moved from that part of the business, which was in decline and where they were wondering what they were going to do with their careers, and who are now automation coders and automation experts, and who think they’ve got not only life inside our company but potential new skills to take outside into the open market. So a massive reskilling exercise, and hugely positive in the way everybody’s looked at it, because it reskilled and retrained a bunch of people who were concerned about where their skills were headed. So we’ll solve that bit of it — I’m sure we can all become prompt engineers.
So, Phil, there’s a very important original thought — I think before anybody else you had it, and that’s when I started to read you very seriously many years ago. You were the first person to call out the hype around automation. It’s a word — like ‘love’ and ‘innovation,’ ‘automation’ — they’re all abused and overused. And Phil wrote, back when this whole RPA thing took off, and you kind of deflated the notion and said, ‘OK, everybody relax. There are things it can probably do, but many things it can’t do well, and therefore there’s far too much hype around it.’ The current wave of where we are, I think, will bring to fruition exactly what you said and predicted many years ago. Because I was new to the industry and I said, ‘Hey, who’s this Phil Fersht guy? He’s actually saying the exact thing that all of us computer scientists believe.’ And the reason it’s important is: if I were an RPA company, I’d be very scared right now. And the reason is, all of what you see in this ChatGPT is just — it’s telling you some text. What’s already cooking in the lab, what you’ll soon see — in fact, one of the co-authors of the Transformers paper from Google in 2017, that’s what really set off this whole thing right now. Here’s a startup, and their entire startup’s purpose is: you go and say, ‘I want to fill this insurance form and do this and this,’ you just say it, and they’ve connected GPT to now taking action — and that’s the next stage: actuation. Actuation tied to human natural-language understanding, intent. And now, straight away, there’s no RPA, there’s no automation in between — this is it. It’s end-to-end, and there’s no programming here. You just say what you want to do. We haven’t seen that come out just yet, but when it comes out, Phil, I believe what you said many years ago will be complete.
That’s right. We’re trialing it with research, testing and searching right now — with our own research, because, well, I can’t even find stuff on my own website. I’m in trouble. OK. So, I do want to touch upon sustainability — I know you touched on it, John, because you’ve taken on this new role at Zurich. What’s gonna happen to sustainability in all this mayhem? We have a chief sustainability officer here, Josh — he’s in the room, there he is at the back, waving; he’s dressed like a sustainability officer as well. He came out and said one thing: he’s kind of given up on consumers and given up on politicians, but our last vestige of hope is actually our businesses. Our businesses can actually drive the example on driving more sustainable behavior.
Fortunately, our politicians haven’t given up on our businesses, so they’re going to try and use us to beat the rest of you into submission. So banks and insurance companies have an important role to play, according to the government, because we can stop things happening or we can support them happening. So it depends what you mean by sustainability. If you’re talking about it in climate terms, it’s relatively narrow; if you’re talking about it in wider societal terms — which happens to be the way we do — then the impact you can have is even more substantial. But the reality is that businesses, particularly those in regulated environments like ours, are being driven down a path, no question about it, towards sustainable outcomes. We need to reduce the carbon intensity in our underwritten portfolio. That means the real-world economy has to shift, because we can’t do it without all our customers shifting, and we have to do it in our investment portfolio as well, alongside all the banks and other asset owners. So it’s an extremely material and large focus — hence roles like mine are suddenly, magically coming into being. Largely, you didn’t have it on the board, but my unofficial job title is chief cat herder, because effectively I just organize the activity that’s happening right across the enterprise and try to channel it into some sort of organized progress that we can track, report on, and challenge ourselves around. So that’s happening in operational functions, in underwriting, in investment teams, within facilities management, within supply-partnership arrangements and procurement, right across the enterprise, and it’s increasingly an activity no organization can avoid. I would expect most organizations you work in to have either someone in a role like this or someone with a different title, trying to organize and collate activity across your enterprises as well. I don’t think there’s a part of the enterprise this stuff won’t touch in the next 20 or 30 years. I do think it’s a massive opportunity, though, rather than a threat.
So why is it that I’m threatened with 4% of my revenues being taken away if I’m in breach of ISO 27001 and SOC 2 compliance with my security, but it’s totally fine for me to screw up the environment? I can’t screw up my data.
It won’t be totally OK for you to screw up your environment, because your events won’t be insured if you don’t offer your insurer a reasonable transition plan about how you’re journeying to net zero as an organization. So that’s the kind of influence we will have: we’ll effectively be working with our customers in a very collaborative way, but effectively we’ll be tasked with withdrawing capacity from the market for participants who don’t have a meaningful and material transition plan that they can evidence.
Yep, yep. And then people’s choice of partners as well is going to be, ‘Do you share our common desire to be sustainable?’ Good. OK — in the interest of time, I think we’re going to jump to my last question, which is: if you get one wish, one thing you could do to change this industry for the better — if you were anointed the emperor of technology, services, outsourcing, whatever — what would that one wish be? Maybe I’ll start with you, Rohan Murthy, at the end.
No, let’s start from the other end. I just need a minute to think. I’m just being honest.
Radha, your wish?
Yeah. We have software, hardware — I would call it humanware. This is a phenomenal opportunity for us in the industry and in enterprises to create humanware: people who can use digital in ways that amplify the value, amplify their own potential, making themselves the best version of themselves — bringing context, domain, data, empathy, and using digital, putting digital first, at the center of it.
OK. Tiger?
I think, since we talk so much about generative AI and large language models, that we are finally entering a world where the importance of culture, relationships, and trust is going to rise to the top of the house in everything. If everyone has generative AI — if it’s democratized to the extent that all of us are going to be able to use it — then who’s going to win, as an individual, as a team, as a company, as a country? It’s going to be two kinds of people. One: those who actually know what questions to ask. If you don’t know what questions to ask, I don’t care what GPT you have, it’s not going to give you a good answer. So you’d better know what questions to ask, and therefore you need to know the domain, you need to know what problem you’re solving and what action you’re going to take. Of course, if Rohan’s technology comes through, then even the action will be taken. And the second is: do you really trust the person who’s holding the machine? So I believe the world we are in now, and into the future, is going to be all about trust — and trust is built over time: reputation, relationships. I hope all of us realize that that’s actually more important than any technology, and the more the world can get there, not just in our industry but across the globe… Unfortunately, politicians are not like that, but — trust.
Trust. I like it.
Probably a similar theme. I would say that our strongest relationships are those built around human-to-human interactions with our customers, and that’s absolutely the case with our suppliers. So I would encourage all our suppliers, and anybody working in that space, to be part of our organization — our best suppliers are not even considered external. They come up with ideas spontaneously in team meetings on a Monday just like every other department does. They forecast doom and gloom just like any other human or department does. They’re not some external thing that comes up with a widget or a gadget and tries to sell it to us. They just see the problems that exist in our business, because they’re inside it, and they respond to them in the same way as our organization does. Kind of be your customers is probably what I would say — and that’s to trust, that’s to strengthen the relationship.
Thank you.
Similarly, I believe we probably need to put humans back into the center. Some of the language we use in the industry — ‘we’re going to take humans out’ — is dreadful, frankly. That is sometimes how we talk when we talk about automation, when we talk about AI. We forget that most of the people we need to adopt the ideas or the technology are humans; they’ll be impacted by them. For me, one of the most incredible things that came out of the pandemic era, at a very stressful time, was technology’s ability to keep people connected. That was incredible. We got tired of Zoom calls, but at the same time that sustained us all for a long period. And the other thing that was really strong, that we might lose sight of now, is community — because community is a wider component that you need to think about. It’s not just my partner, not just my tribe, not just my customer, but actually, particularly when we come to think about how sustainability affects everyone, I think we become more community-based as we think about the impact of our actions on multiple people — that’s ours as individuals, and also as corporate leaders, and also as people who are slightly nerdy about tech.
I’m with you 100% there, and I think, as we were saying earlier, AI is here to help leaders and humans make better decisions. It takes the risk away from us, but we make the decisions. Computers aren’t gonna make decisions anytime soon. But, Leslie, one wish?
Well, it goes back to the 1990s, actually: that clients build and retain management capabilities to keep control of their technology and digital destiny. Most things come from that — the suppliers we’ve looked at hate dealing with an incompetent corporation, essentially, and you lack direction and purpose if you don’t have that retained management set of competencies to keep control of your digital future.
Keshav, one wish that you have?
Phil, I already spoke about morality and values and empathy and emotional intelligence. I think those are the most important things that human beings must continue to invest in and understand, and are going to be important for the future. So there’s one thing that I would want every human being on planet Earth to focus on going forward, with all of this disruptive technology around: it is reinforcing values and what they stand for.
OK, values — I like that one. And Rohan, have you come up with one now?
Actually, I loved what everybody said, cutting across. The way I’d sum it up: there are roughly 500 million people who use software machines to do work every day — all of us included, white-collar workers. The world spends roughly $15 trillion on our wages, and there is no scientific basis for understanding why we don’t like our work, what ails us at work, what troubles us at work, what we could do better to collaborate and succeed. There is no science. But if you’re in the manufacturing industry, there’s a very detailed science for it. So my one wish is the creation of some kind of science to understand, every day when we go to work, what affects us and what could be better. There are things we don’t control at work and yet are subjected to — how badly your processes are designed, how bad your tech stack is, and so on. I’d love, if I had a magic wand, for there to be a science for understanding how we all experience work and how that can be better, and I think a lot of technology can help with that.
And that results in enhancing trust — or, you’re saying, putting the community of the user at the center. In this talent study I presented earlier, technology was the number-two biggest impact on people’s work experience now. It’s how they engage with technology at work, and especially when you’re remote so much of the time, how you’re interacting, how you’re collaborating. We’re all complaining — we run our company, Zoom chat is now our number-one communication tool, and it’s not very good. Anyway. This has been fantastic. We’ve gone over time a little bit, and I really appreciate Radha, Tiger, John, Carol, Leslie, Keshav, and Rohan. What a wonderful conversation, and look forward to the rest of the day. Thank you for coming.
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