Episode Transcript
[00:00:00] Hello everyone. This week I want to talk about my trip to the Middle east, which was three very action packed days in Riyadh, Abu Dhabi and Dubai. We met with close to a hundred companies, to be honest, some one on ones, lots of workshops, and most of the conversations were with senior HR people about what's going on in AI. Of course, the interesting thing about the Middle east, there's a couple things I want to sort of point out to those of you that don't spend a lot of time here is that virtually every organization we talked with is on a hypergrowth path. Construction, engineering, retail, transportation, railways airways, energy companies, hospitality companies. The seventh Disney park is being built in Abu Dhabi. I mean, it's just an incredible growing economy. A little bit slower in Saudi than in the uae, but just incredible. We also spend some time with the Sovereign wealth fund here. So I have some impressions and some things to share about the culture of the Middle east that you may or may not be familiar with and just kind of fill you in on what's going on in this part of the world. So the first thing that you realize when you talk to companies in this kind of a climate is that it is very hard to grow an organization quickly. These organizations have no shortage of money. A lot of them are getting money from the government and they have a very clear mandate as to what they're trying to do. But they have infrastructure questions, people questions, organizations questions, leadership questions, leadership pipeline challenges, skills shortages, of course, just like everywhere else. And a world where 80, 85% of the workforce, at least in the UAE, is immigrants or expats. So the issue of diversity, however you feel about it, is just a way of life. And so culturally these organizations, and I can't speak to every single one, but we met with a lot of, are very inclusive, very meaningful in their strategy. They have a big mandate, most of them, for the reasons they're growing. Like for example, one of them was a very large water treatment organization plant that's doubling its size in Saudi Arabia because of the growth of Riyadh. If you look at Etihad, the airlines, they are expected to double the number of planes they have in the next five to 10 years. You can imagine the growth that they're going through. I mean, all over Dubai there's construction companies, massive retail and distribution companies, all growing with a meaningful purpose to support the economies of the countries they live in. And you know, I can speak only of Saudi and uae, but the ministry people that we met gave us a very, at least me, a very strong impression that the purpose and meaning and growth strategy of these countries is very determined and meaningful and of course, competitive globally, but also focused on the growth of the people and the meaning and the positive experience of the society around them. The reason I say that is that because I do get a chance to travel and talk to a lot of companies, I think there is a big difference in the way growth happens in different parts of the world. The United States in particular is a very transactional culture and growth environment. If you can grow quickly by buying another company, by acquiring another company and putting it out of business, by treating your people poorly and going through high turnover, you are rewarded for it. In the United States, even though your employment brand may not be great, the stock market will love you. I don't think that's so true over here. The culture of the Middle east, at least of the people I met and I did talk to quite a few senior execs about this, is much more of a tribal culture, probably going back thousands of years, to be honest, where relationships are really fundamental to the business strategies. In fact, after giving a bunch of presentations on AI, which I'll talk about AI in a couple of minutes, you know, one of the senior execs came up to me and we talked in the back of the room. That, you know, in some sense people are not loyal to their companies or to their jobs. They're loyal to the relationships they have with their peers and their managers and that once they build strong relationships and trust, they maintain those relationships for life. I mean, at least in the US it's pretty doggone easy to change companies and say goodbye to your manager and perhaps never talk to him or her again. Maybe occasionally over here, it's not like that. And a lot of the conversations and relationships we had with people, many of these people knew me and I knew them through the Internet. They wanted to shake our hands, they want us to come back. They want to spend face to face time together. Because the relationships and the tribal nature of the interconnectedness of the relationships is fundamental to the work experience and to the business experience and the life experience of these particular countries. And so, you know, I walked away with a really inspired, positive feeling about the Middle east, at least these countries and what's going on and how successful they're going to be. They're not just successful because they're sitting on a bunch of oil and they're using, you know, it to grow. They really have a meaningful strategy for building the next major section of the world economy in a very, very aggressive but positive way. And when we met with the Sovereign Wealth Fund here and they sponsored some of the meetings we had with other companies, it was very clear that growth, obviously is a big part of the strategy. But it's more than that. It's growing in a way that makes the UAE a good country to live in, a good country to visit, a good country to do business in, and a meaningful experience for the very long term. You know, I don't think that is at all the culture of the United States at the moment. We are in a very angry discourse in the political environment in the United States that is lost that sense of positive society and positive growth. And it's very frustrating for me as an older person to watch this, but I wanted you to think about it because, you know, every country has its own culture and its own history, and that is in some sense defines the way people think and how they relate to each other and how businesses operate. Okay, so I won't go through a lot of the companies, you know, in specific, we met with the Cleveland Clinic, we met with several airlines. But the growth is spectacular. And when you're growing at that rate, you know, you want to use AI for the super worker effect, for the scaling effect of your business, but you need to know how to use it. And so most of these companies asked a lot of fundamental questions about what is going to have to happen to jobs, what is going to happen to leaders, what is going to happen to young people. And I dispelled a lot of those myths, by the way. You know, one of the things that comes up frequently, especially at the moment when people are talking about superintelligence is, you know, this idea that this new technology base is going to replace humans and eliminate jobs and create massive unemployment. I have a strong opinion on that, and I'd be happy to argue it with you, and maybe I'll put it into a separate podcast. That is not going to happen. And one of the reasons it's not going to happen is that the genetic intelligence that we have as human beings has been developed. Not only is our genome far more complex and far more intelligent in a sense than software, I mean, just way, way, way more. But we live with the intelligence of thousands of years of history of life, and every generation that is born learns genetically from the generation before it. That's the way the genome works. That's the way cells work. That's the way our bodies work. That's the way our brains work. I was talking to the chief technical officer from Sana who was with Us the whole time. We had a lot of conversations about this. AI has no concept of that. AI has no concept history. It barely understands time. So, in fact, I'm not sure it really does understand time very well. So other than as words. So the perspective, the wisdom, the complex problem solving, the creative nature, the innovative nature of us as humans does not exist in AI, none of it. So, yes, AI is very good at some things, not everything, but some things. It's very good at writing data manipulation, writing code, things like that. Humans are so much more complex and rich in the way we think. So as much as you love your AI strategy, it is going to be the human ideas and creativity around it that's going to make your company successful. And, you know, I had to explain that to a lot of companies here because they're, you know, somewhat jaded maybe in the stuff they read about what's going to happen to society. Now, I can't prove to you this is true, but I've been doing this stuff for 35 years, seen a lot of companies, met a lot of people, and I'm pretty convinced this is the way the world works. So we talked about that a lot. We talked about the four stages of AI. Then we spent a lot of time with several groups about learning and development. And I cannot emphasize enough how important it is for you to read the paper, the report we built on the, on the revolution in learning and development. This is a massive change in the way we're going to run our companies. I mean, many of the other areas of HR are going to be automated by AI and somewhat streamlined and further integrated into the systemic HR model. But L and D is going to be revolutionized. And I literally mean that. Moving from the legacy publishing model of training to the dynamic real time content model of training is very profound. I don't have time to go through all of it on this recording, but after now talking to many more companies and working with a lot of them that are implementing SANA and implementing Galileo Learn now this is happening. There's a whole new way of thinking about content, a whole new way of thinking about training and enablement. There's going to be a massive creator economy built inside of your companies around AI and in L and D. And you're going to change the strategy structure of L and D. And so we really encourage you to read that report and get hold of us. By the way, the best way for you to learn about this transformation is to get your hands on Galileo Learn. A single license is only $495 and you can experience it. You can develop your own content in Galileo, learn even as a one user license, and you can immediately see how vastly different, superior and quite innovative AI is when you have an AI native L and D and enablement strategy. And it's going to go beyond L and D, way beyond L and D, as you'll hear when we talk about the Galileo platform strategy, which I'll talk about maybe next week. So we talked a lot about that and then went through many, many examples for companies on how AI is being used in recruiting, how AI is being used in employee experience. One of the fascinating things that came up because we met with a couple of airlines, the IATA organization, which is the Airline Transport association that does research for the airlines, is now using Galileo. And a professional there who I'm going to interview and we'll have maybe her on the podcast or maybe come to our conference, has built an entire skills model for the future of five levels of skills in all of the major roles in the airline industry and map them against the demand for those skills by geographic location because of the different demands for different types of travel. It is a fascinating report that she did and she used Galileo to manage all the data and combine and analyze all the skills data. So the things people are doing with Galileo in particular and AI are just mind bloggling. And I won't go through all of them, but we're doing just ongoing adding more and more content to Galileo. We have a new release coming out in July, by the way, called the Venus release. We're naming them after planets for a while and it's going to have a whole new data set for AI transformation that's going to blow your mind. I won't tell you right now exactly what it is, but stay tuned for that. And that was an interesting finding when we talked to her and looked at what she was doing, because the airlines here are hypergrowth airlines. I don't know if you've ever seen a hypergrowth airline, but hypergrowth airlines have to hire all sorts of people. They have to come up with new systems, they have to come up with. They have to build airports or gates and terminals, they have to acquire planes. It's really amazing what's going on over here. Okay, so that's a little bit about my experience the last couple days, and we're just so excited about what's going on in HR at this point. One of the other themes of a number of the conversations was layoffs and downsizing of the company and the AI and the HR department itself. So let me just discuss a little bit what's going on there. So this week there was another article in the Wall Street Journal about this. There have been articles day by day filtering out Chip Cutter wrote one, and highlighting companies like IBM, Microsoft, generally the tech companies, but others, Unilever, Nestle, that are using AI in very innovative ways for people practices, but also that they're reducing the size of their HR department. So let me talk about that. So it's pretty clear to me, and I wrote a big article on this a couple months ago, that something like 30% of what we do in HR is paper management, data management, data entry, process management, stuff that isn't really top of license work. There's a concept in the healthcare industry, particularly for nurses, called working at the top of your license. And the idea of top of license is if you're a nurse, you should be doing nursing. You shouldn't be moving furniture around and worrying about wires or spending time scheduling people.
[00:13:15] That's not nursing work. You should be with patients and taking care of them. And so what the healthcare industry does is rigorously redesign work so that nurses can stay top of license. We don't do nearly enough of that in our white collar jobs. So what AI is going to do is it's going to allow us to work top of license. What does top of license mean for an HR person? If it's a recruiter, it means talking to people and assessing them and finding them a good job and making sure they're a good fit. If you're an L and D person, it means teaching and educating and identifying performance problems and working with leaders and managers to improve operational or technical or compliance performance. If you're a comp and benefits person, it means studying the comp and benefits market and understanding the needs of your employees relative to your peers and competitors, and creating competitive and innovative mixes of benefits and adding, you know, the dimension of the performance process of your company and, you know, very subtle design issues. I would say most of us only spend maybe a third of our time doing those things. Maybe a half or two thirds is doing routine, mundane stuff, playing around with HR technology and trying to get things to work correctly, going to find data that's hard to find or maybe incorrect, sitting in meetings, making plans, getting alignment that are not truly top of license. By the way, sitting in meetings and getting alignment is top of license because that's a lot of the most important work we do. And if you look at the systemic HR model, which is a much more integrated model for thinking about the human capital operation, we can eliminate a lot of routine work and a lot of complex workflows. In recruiting, you can probably eliminate two thirds of the administrative work that various recruiters do on scheduling and administrating, administering interviews and surveys and sourcing and looking at, placing ads and working on employment branding and things like that. And I could go through all the other areas so there will be a downsizing effect. Does that mean the HR department is going to be half the size?
[00:15:07] No. I mean, you could do that if you want and I think there will be people that do. But the reality of it is it's going to give you time to spend more energy and intellectual capital on growth, on innovation, on positive impact of your organization. Now that means that all of you listening to this podcast are going to have to step it up and be more comfortable in higher level roles. If you like entering data into the performance management form on behalf of your employees as an HR business partner or an hr, you know, advisor, whatever your job title might be, you're not going to be doing that anymore. They're going to do it themselves or the system will do it. If you like writing job descriptions because it kind of gives you a thrill, that's going to be done by AI in a much more interesting and capable and more probably correct and valuable way. You're going to have to start to think about your skills in understanding the business, in coaching, in change management and leadership assessment. And you know, those are all great skills that you probably have some of, but you're going to do more of that and you're going, going to spend more time on cross domain thinking. You know, we had a lot of conversations about this because they're very thoughtful people. In a lot of these meetings, you know, what are the skills of an employee post the AI age? Well, one of the skills you need is you need to understand the system. Systemic thinking of what does the whole process look like that we're trying to accomplish. We repeatedly talked about this idea of falling in love with the problem, not falling in love with the solution. The problem. The issue we have in HR is we fall in love with our programs, our, our onboarding program, our employment brand program, or our retention program, wherever it may be. But the programs only exist for a reason, to solve a problem or to address a growth strategy of the business. So the more you focus on the business strategy, which we call the real problem, not the solution, then you can decide what solution is needed in a much more systemic way with AI. So we're going to write this up and come up with a model. We're getting there. We're not quite there yet. We're doing some work with SHL on this. But the skills of an HR professional in the days of AI are all the core skills you already have, but more focused on the strategic work and less focused on the mundane administrative work, some of which is going to disappear. And once we use AI for more things and we're tape recording interviews and automatically assessing skills from AI systems and assessing job fit based on candidate behavior and getting direct performance feedback from the AI on performance ratings, we're going to have to think very strategically about whether these AI recommended solutions are correct or not. What can we do to make them better? What data did they base their decisions on? These are kind of new, complex, higher level things that we're going to be doing in hr. And you're just going to have to understand how HR works. And that is why I'm going to repeat one more time. The best way to learn about this is not to take a course, but to use an AI tool. Use Galileo, Learn. Use Galileo if you can. Because I mean, Galileo is designed for HR and there's hundreds of pre made templates or prompts in the task library in there and we're adding more. So this is a lot of what we talked about with a lot of these companies here. And these companies are very aggressively adopting AI as much as they can, but only in the, you know, context of growth. Another topic came up a lot because there's a lot of new technology adoption in these growth companies and that is what about the core systems versus the new ones? And again, another podcast I could do on this, but the general shift that I think is going on is not only conversational interfaces and agentic tools sitting on top of the ERPs, but even more significant than that is AI platforms are development tools. They're not off the shelf applications because they're not deterministic like old fashioned software. They learn and grow and change based on the data, which means you're going to want to tweak them and modify them and make them the right tool for your company, for your business, for your operation. And so that means that working with it, many of you are going to be writing prompts. By the way it's writing a prompt is just speaking in English or whatever language you speak. It's not a software programming language where you're going to be learning how to train the system and you're going to be building apps. And there are, there's a new Era of development tools called Vibe development, where you talk to the system and you tell the system what you're trying to do, and in IT builds the app for you. And we're working on one of those with Sana, that's going to hit Galileo Learn first. So you're going to be able to tell the system what your problem is, and it's going to build something, and you can tell it what to build and how to build it and what you want it to do. And you're going to be a developer, just like people developing videos on TikTok and YouTube. We're going to be doing a lot of this ourselves. That is a huge difference from the days of buying a great tool in hr, turning it on, training people how to use it, implementing it, and crossing your fingers that it's going to do what it was supposed to do. This is a very different world. And that, of course, means that working with it is very important because they're going to be involved in the standard setting and the data management and the security of this. By the way, I do not believe that we're going to merge HR and it, although a lot of people have been talking about that. I don't think that's likely because I think the IT function in companies has many, many, many things to worry about that have nothing to do with human capital. But you have to definitely be joined at the hip now, because a lot of what they're trying to do to implement AI in the operational part of your company is going to affect jobs and work relationships and work patterns. And so you, if you understand the work well and what they're trying to do, you can help with the human capital issues, the pay, the skills, the training, the hiring, and so forth along with them. So this is back to partnering significantly with IT in this new era of AI transformation. Okay, one more thing. You know, I'll wrap up up, because I've been going on a little bit past my normal time. We did give away a lot of copies of Irresistible, the book. And I'm not here to hawk it just because I wrote it, but that book has very important concepts that are very relevant in this particular era of AI transformation, because it's all about growth and it's all about people and it's all about organizations. Several of the people in the meeting I had just before the end were debating the role of humans and machines and whether machines were going to take over too many tasks and all that stuff. And there's some philosophers who are very negative on this, that have written a lot of books. And I said, well, there's a big part of the irresistible book that talks about the unquenchable power of the human spirit. And you've heard me probably mention this a couple times. But what I said to them was, at least in my experience, in my life, I have seen hundreds and hundreds of situations where human beings have overcome obstacles and learned and changed and adapted in ways that are simply miraculous. And the best example we all have is the pandemic, when not that long ago, we were all worried about dying from the pandemic. I mean, most of us, certainly in my case, we didn't even want to take groceries home and touch the bags because we were afraid there was something on them that was going to kill us before we knew what the virus was doing. Within only a few weeks, maybe a month or less of the pandemic and sending everybody home, we reinvented the way we worked. We reinvented our jobs, our lives, our delivery service services, really giving way to a very high growth economic cycle. After the pandemic unleashed by this new disconnected, delivery oriented, remote, hybrid work world we live in, including getting food and other things delivered online, I mean, a lot of amazing innovation happened. We didn't sit around and just wait for the virus to kill us. We adapted, we came up with new ideas, we pulled ourselves up by our bootstraps. Some of us got pretty sick. I got very sick, in fact. But we all dealt with it. And if any of you have ever had a chronic illness or another obstacle in your life, you've been badly injured, you know what it's like. You have to, you know, kind of tap into this well of energy that you have as a human being. And I believe that in the world of AI, where the AI vendors are overhyping everything they do and talking about superintelligence and hyper superintelligence and super duper intelligence, we're going to have to remind ourselves of this in the HR function. And if you ever get concerned about, you know, the impact of AI on your daily life and you want to talk to me about it, just reach out and I'll give you more concepts to think about in terms of what this all means. I was just inspired by this week. I wish many of you could have just been with me to meet the people that I met and experience what happened here. This region is so interesting and inspirational and in some ways visionary in ways that I haven't seen in many parts of the world. There's parts of Asia that are like this but the United States is not this way at the moment. And I think we all have a lot to learn from our partners and friends in the Middle East. Thank you guys for listening to me today, and we'll keep in touch over the next couple days. And next week, I'll maybe talk more about the Venus release.
