What's up, Toby. We have made a podcast, Processed
At Podcast number 28. Woo -hoo. I know. All right.
It is Friday for everybody that's listening.
Hopefully you've had a good week. Yes. Happy
Fridays. I mean, you know, fix it Friday. That's
why we launched these on Friday because it might
be the only day in the corporate world in which
you actually have some time to work on You were
part of the business to make your life better.
Chris, that's such an interesting point. Do Fridays
feel like the time where you have a little bit
of space? My favorite time to work is Saturday
morning, about 730 to 930. Oh, nice. That's just
the prime time for you. It is. It is free work,
meaning I get to work on whatever I want. I'm
not bugged. I can go and scratch an itch and
it's actually a lot of times it's really rewarding.
Yeah. I love that. All right. Today's topic.
Why do businesses suck so much at change? That
is today's topic. I love how eloquently and simply
put that. Why do you suck? Yeah. Long is it that
the difference between success and failure is
literally a coin flip? Yes. 100%. More important
to, you know, we're actively disrupting our own
businesses. We don't always even harden how the
processes work. And then we're throwing our success
and our livelihood in the air on a coin. Yep.
Yeah. You say coin flip. We do have some statistics
here. There was a study in 2016 by the CEB Corporate
Leadership Council. where they stated that 50
% of initiatives are outright failures. Whereas
16 % have mixed results and 34 % are successes.
Nice. Who doesn't want to bet on that? One in
three, it's not just a 50%, one in three is people
are going to step back and say, well, shit, that
wasn't the way we hoped. Man, that worked. That's
a great, you know, that's not bad. Batting average
hit 100, I suppose, but with people's livelihood,
I think we want a little bit more assurance.
Talk to me about why do you think that is? Just
the statistics aside, what's your gut say about
why only a third of these big change initiatives
are viewed as successes? That's a good question.
I think most of the time people don't know why
they're changing or the people that are having
changed. are having change pushed down from above,
it's not clear. I think some of this comes down
to just alignment. It's not like the basketball
team is out there tackling people like football
because they don't know what the game is. They
understand the goal is get the basketball in
the hoop and play an offense and a defense, and
there's a lot of strategy. For on the business
side. It's really hard to change because you
don't know what game you're playing Yeah Yeah,
so many so many businesses at their most foundational
level forget that it's basically intake of Raw
materials or human capital. Yep, or it into something
more valuable than the people that are shuffling
through your warehouse or offices and then produce
something that creates value both for customers,
employees, and shareholders. The statistics around
what we now call digital transformation, I think,
are equally bleak. Part of it is we have, and
quite literally, I remember a client, a senior
executive came back from the holidays, had gone
on a ski trip with a friend that was an SAP.
you know, welcome to the new year was we're going
to lay out $10 million for SAP. We're going to
start with the finance module. His entire finance
team at this company was maybe 14 people. 14
people in a business that was manufacturing a
raw material. They knew how to weigh it. They
knew how the flow went. And this was finance.
This wasn't the supply chain. Well, the 10 million,
they were starting with finance. So now you give
people that are kind of mailing it in, because
they don't give a shit. Let's be honest, right?
A lot of people, it's like, I got to have a job.
This is better than the last shitty job I have.
Oh my gosh, that's funny. But people aren't total
assholes. And so then you're going to go to them
and say, everything that you know about just
showing up and getting work done and then getting
back to your life, we're going to completely
disrupt that. Yeah. and we're gonna give you
a system designed by German Mines that have an
entirely different schema. So now we want you
to think differently about the work you did.
So they were several million dollars in. They
launched the finance piece and the finance folks
all maud it and oh, thank you so much. And they
kept using their spreadsheets and they used it
as a very, very expensive ledger system that
they would upload to once a month. That's what
they learned was how do you appease the boss
who goes off ski for a bit fancy bulls and then
makes bad choices? So, okay, I think Arge what
did why? Like what I mean, like what was going
through the what was going through the decision
-makers had that was like SAP Yeah, was it getting
a logo? I not necessarily in like getting a logo,
but like I wonder what Like, I'm really curious
about these things, as far as like, what was
the frustration that was going through this person's
head? Yeah. Right? The idea that comparison is
the thief of joy immediately comes to mind as
the response, right? And so when you're talking
with a professional peer and they're sharing
what they attribute their success to. Sure. especially
at those senior executive levels, they don't
always understand the blocking and tackling mechanics.
A different client just about 10 years ago now
needed a supply chain solution, but instead gutted
all their financial systems first. And so they
got $90 million pregnant with their version of
SAP that... Still didn't replace the the corporate
headquarters dysfunction and they still had supply
chain problems Like so when we're trying to solve
great big vast things that we don't understand
I think this is yeah, my opinion is you know
It's people making decisions in a in isolation
and they're walking this floor. We've talked
a lot about You know Toyota philosophies and
the whole Deming. Yeah notion like get close
to the process but when whether it's ski villas
or whether it's making pronouncements from the
floor with all the great views, the solutions
don't fit the problem. Can you capex that SAP?
Yeah, the beauty is then there's this really
lovely, well, accounting treatments vary. Okay.
Not just choices, so I won't geek out all the
way. Okay, all right. I appreciate the minor
geek out. Because my little tiny budget here
is like, why in the world would I ever spend
$11 million on SE? Whatever, right? On a software.
So, all right, geek out a little bit on capital
expenditures. Yeah, so CapEx, OpEx, right? Yep.
CapEx means we're going to put it on the balance
sheet and we'll slowly depreciate it over time.
Yeah, yeah. And so we can spread out that cost
against future income. Alternatively, with its
operating expense, we recognize that this year
goes directly against this year's income. So
a lot of times organizations, they're looking
at it and they're like, God, we don't want to
eat 90 million of costs this year, so let's spread
it out. It's a long old asset. We're going to
use this system for years. Then they discover
that they've absolutely just bumblefucked it.
not doing anything that it was intended to do.
And this is where, you ever hear the phrase impaired
asset? Impaired is not just beer goggles at two
in the morning and wondering why you parked your
car in the middle of your front yard. Impaired
asset is not just a car that's smoking, you know,
you can just pull it on fire. Lot of corporate
impaired assets are these projects that never
delivered the value Yeah, then they go back and
auditors are asking is is your SAP system really
a 90 million dollar asset Really say that with
a straight face. They're like, okay, maybe it's
nine It's a shit job. I'm a total potty mouth.
I don't know what's going on happy Friday, man
But this, this kind of winds me up because I
have background in finance and then I'm here
and it's turned a man's plane to me like, yeah,
that was the best 90 million bucks we could have
ever spent. Oh my gosh. I feel like if we start
a consulting company, we should call it beer
Gallagher's consulting. Yeah, we're here to,
yeah. I have a friend that's like, I can be a
CEO and you don't even have to pay me market.
Just give me $2 million. And I will screw this
thing up less than most. And I'm like, you know
what? You have a fighting chance. I'll tell you,
for a million five and a nice pension, I won't
even show up and bring badges into the office.
I mean, it's not free, but the avoided costs
could be considerable. Oh my gosh, that's funny.
I like your earlier comment about change and
it's that. Not only do we have organizations,
like think about today, we were talking about
big ERP systems, but today, the last 18 months,
everybody's been rushing to figure out what's
our AI strategy? What does artificial intelligence,
whether it's generative AI, creating new things,
whether it's agents to interact with our customers,
horrible idea. How many different ways can we
use these emergent technologies? And I think
that it is, it's always this comparison. So many
excellent point solutions, just blown out of
proportion and were invariably drawn to the new
and sexy thing. And so everywhere I turn, you
know, the IVR systems now that instead of like
press one to talk to somebody that pretends to
care, they give me an AI agent that says, Oh,
did you say you'd like to speak to potato salad?
You know, we talked about this in a prior episode.
There's a disassociation between businesses and
their customers, but I think poor change management
has exactly the same effect of damaging the relationship
between a business and its employees. Customers
may or may not experience it, but we're whiplashing
employees left and right. Well, it's hard to
know why. Right and then it's it's also hard
when you you know, we've been around but you
know a couple years Yeah, two or three two or
three and so when you realize that when someone
comes out and you're like the general the general
mood of the office is I'm not sure that one's
gonna work And so, you know and that's not always
the case right like sometimes you're like, okay
The pieces are starting to come together, but
there's some where you're like hmm Not sure what
the problem is that we're solving here Followed
with not exactly how this is not exact don't
exactly know how this is aligned Yeah, and don't
know what net don't know the necessary Action
action steps, which makes changing really hard
because then it's like, okay Well, I'm gonna
guess to see where my next step is on the journey
And you're kind of just, you're looking for social
cues on whether it's the right change, right?
And then I think people do little micro -mutants.
Where it's like, you're going to test resistance
to see if you're going to get in trouble because
then you found the boundary. I mean, we all,
like I said, in some ways we all become like
these teenagers. for our, for her, for her, for
her. What is it we work with? We're like, we
need you to be home at midnight. And you're like,
wow, let's let's shoot for 1230 and see what
happens. Like, doesn't matter. Is there a consequence?
Okay. See you tomorrow. Not really sure. No,
I love that. And I think, uh, I think when we.
couple, like life feels like it's changing faster
because we have so much information thrown at
us, enormous volumes any day. To try to stay
aware of what's going on and then keeping up
with the lives of the people that matter to us
when we're more broadly spread out than we've
ever been geographically, but have the means
to keep tabs. It's not like I jumped a boat and
went to a foreign continent a hundred years ago.
I can FaceTime somebody on another continent
and I feel like I have an obligation to maintain
that connection. So then when work is chaotic,
Oh my Lord. Yeah. Yeah. Well, I think the coin
flip. Yeah. I think it's, I think it's also hard
because you get, I think sometimes it's change
for changes sake. Yeah. Meaning like I've got
a problem. And the simplest way to do that is
to name the problem and head in that name direction.
And that name direction is change, right? So
it's like this reciprocal loop that will never
be successful. And, and, or, and I think I brought
this up before, like people don't think about
cohorts. Like almost everything that we do, there
is something else to compare it to, right? So
if you want to find a successful business model,
host an Olympics. It is a great way for your
city to lose a ton of money because they're all
bespoke. Nothing's the same. But if you want
to see how much you're going to go over budget,
just do an estimate of how many go over budget.
And that's pretty much where you're going to
be. Chris, that's such a horrible truth. Yeah.
And most businesses do not want to hear what
your cohort is because they will realize, oh
shoot. This is going to be hard like like a great
example of this like the best way to remodel
your house is to just do some research for how
long it how much it costs in your area to remodel
your kitchen and If you're if your contractor
is like, oh we can do it for 50 grand and you're
like, okay Well, the average is you know, we
can do it for 15 grand. The average is 50 grand
You know what you're gonna be closer to the 50
grand because they're going to open something
up and they're going to be like, oh man, look
what we found. Averages have a place and they're
a really powerful point of reference. Just like
the statistics you mentioned at the top of the
show here, statistics have a place and it gives
us some more objective perspective on what's
actually going on. So yeah, it's interesting.
Like if you could change, if you could change
even that, you know, we talked about 16 % are
kind of mixed results. Like even if you could
pick that up, I mean, it'd be interesting to
know what the dollar value is on that. Yeah.
Or expand that piece. Years ago, being a finance
guy and then helping, you know, fortune 500 clients
navigate big change initiatives. I tried to monetize,
I tried to put a value premium on why would you
spend money on all the communication and all
the stakeholder engagement? Why do you tell people,
bring them into the room and help understand
from the people doing the work why it's so critical?
And it was incredibly difficult because it's
all soft money. It's people's salaries and it's
why and we... to try to actually put a dollar
value, we can see the hours people are in a room,
but we can't see that as visibly on the adoption
side, depending on the age. It's hard to measure
happiness. Let's just say, I guarantee you these
50 % that were failures, not only do you have
upset employees, you've got changed fatigued
employees that don't want to change again. Yeah,
and so you're you it's like you're creating like
these this super resistant internally that if
you make any change and We want to make a change
because it was a stress or something Yeah, think
about the human body when all of a sudden we
have an overactive immune system Yeah, and all
the sudden it's to our own detriment. Yeah autoimmune
Diseases are input. Yeah. Yeah within the organizational
body. We see the very same thing happening So
we are we are at time. I'm gonna end it with
a very cool JNI prompt that I came up with this
this week so when you do so the way that the
GPT prompts work is you can you can import a
lot of data into the into the into the chat stack
a Lot of pleases. Oh, yeah, a lot of a lot like
a lot. Yeah a lot Yeah, please and thank you
Will you please do this? So you can, you can
do a long, a long chat because it's, and it's
going to pick up that context because every time
you send that back, it's going to send the whole
context, right? So this has to be very, there's
high memory on the ask, but there's low memory
on the output oftentimes. Gotcha. Okay. So the
problem I was trying to solve was how do I run
a long form or long form document? scope of work,
a product release requirement doc using a prompt.
And the solution was to give it a chain of thought
prompt, which is you're going to be getting a
transcription. You are to take that transcription
and summarize that in a table of contents. And
then your objective is to write each section
and ask me if each section is okay. It's brilliant
and it's awesome. Okay. Yeah, that's slick. That
sounds absolutely cool. That's such a next order
of prompt engineering than I think most of us
typically use. Yeah. And I got really, I basically,
what happened is I got really frustrated because
I was trying to, I was like, I was recording
these like long 10 minute transcriptions of like,
this is what I want to do. Right? This is what
I want to do. And then I'd be like, write me
a long article. And I'd be like, the summary
is this. And you're like, oh, gosh. And you're
trying to not summarize, but expand on this.
And so what happens is it gives you the table
of contents, right? And then it says, would you
like me to write the summary? I sure would. Would
you like me to write the problem statement? I
sure would. And it just, and you can tweak it
along the way. It's very cool. Anyway, that is,
that is your, that is your fix it Friday solution.
And we are done with this week's podcast. We
made it through 28. Thanks, man. Good stuff.
All right. Happy Friday. Yep. Talk to you later.
See ya.