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Today, we've got a couple more people from our Tanzu advisor team.

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Why don't you start, Jesse?

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How would you describe what that team is?

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We're a bunch of former clients or execs that have come over to Tanzu

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to help drive the mission of Tanzu about building software anywhere, anytime.

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But what we truly bring as an executive advisor team

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is truly on building the right things

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and actually coming from an app and business outcome down first.

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So we have a lot of folks who have experience in this,

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but that was my prior role at John Hancock Manulife,

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now helping out the financial service and insurance industry over here at VMware.

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And how about yourself, Bernard?

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I've worked in the software industry my entire career, live in Silicon Valley.

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And about 12 years ago now, I got exposed to cloud computing and said,

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this is going to be transformative and have really focused on it ever since.

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And I think it's really demonstrated the potential that I saw at that very beginning,

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the very nascent stages.

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I had the opportunity to work with a company called Capital One when I was at a vendor.

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And then they later recruited me to join them as vice president of cloud strategy.

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And it's a very interesting company in that they're a poster child for all in on technology

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transformation and all in on adopting public cloud computing.

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And so I had the opportunity to work there and see how the sausage is made,

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if I can say it that way, of a company going through a profound digital transformation.

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And then had the opportunity to join the Tanzu Value Advisor team.

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Because what I saw at Capital One was that just as critical to the technology capabilities of the staff

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is the management alignment and commitment and support for that transformation.

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Without that kind of support and drive, really, you end up with people who are maybe chartered,

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oh, help us become faster with our DevOps thing.

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And then they try to work in it and they encounter barriers, organizational restrictions, so forth.

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They just get frustrated.

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But when you get the two things together, you've got the technology capability,

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the staff that you've brought in or that you've reskilled,

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and upper level management is really aligned with and supporting that and driving it,

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then things can really come together.

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So it was a good opportunity at Capital One.

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And I came to Tanzu Value Advisors to help organizations make that kind of transition

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about joining the technology and the, if I can say it, management commitment and structure together.

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Yeah, I think one of the last phrases you said there is like management commitment.

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And that's over the years, I've noticed that is obviously required to do anything.

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I think with a lot of the sort of stuff that we focus on,

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applications and the infrastructure that runs the applications,

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it does seem like such a fundamental change that without that management buy-in,

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like it's exactly as you said, just people are like left improving,

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but then they don't have the authority to do anything, which is frustrating.

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If I can elaborate on that, you're exactly right.

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And what we find, what I observed, I should say, through my career is,

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you'll often have a situation where the people at the coal face, meaning the technologists,

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they're ready, they're excited.

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They've seen how this new technology works.

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They're good to go.

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Upper level management is convinced of it and says we should do it.

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And so they put out a pronouncement, hey, we're going to do a digital transformation.

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If you don't have them really committed and measured, in other words, okay,

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and at Capital One, it was what percentage of your applications are migrated to the cloud by X.

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It's a very structured kind of thing and so forth.

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What you get is a sort of a feel good, we should do this.

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And then it encounters the reality of middle executive level, middle management.

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And I always use the anecdote or example.

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Let's say you're director of storage at some enterprise IT organization.

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You've spent 15 years clawing your way up to a pretty good executive job.

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And then somebody comes to you and says, you know what, we're going to get rid of all this on-prem storage and just go to the cloud.

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And how are you going to respond?

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And so having upper level management committed and measured, and then they drive that through the rest of the organization is really,

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it's a way then to support the enthusiasm and capability of the people at the coal face.

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And I also think of one of my favorite, I love in a computer nerd world.

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I don't know if y'all have seen this, but I realized that anytime we call something a law, it just means it's a collection of anecdotes.

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Like we like to throw that term around as if it's an actual law, but there's one that's a, how do you say it, a law, which is very complicated, many sort of precepts and predicates to it.

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But it basically says to your point that no one wants to change.

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It doesn't speak hyperbolically like that, but many people would prefer not to change.

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And therefore, if whenever you introduce a new methodology or something, you'll see this magical thing that managers do, which will, they will totally say that they're doing the new things, but they will just, it'll turn out they're actually doing the same thing.

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And they've basically retrofitted the description of a new methodology and approach to match what they're already doing.

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Hence the phrase, we've always done agile.

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We've just never called it that, which is one of the favorite phrases out there.

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Yeah, I like to add some color into there.

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It's really, the middle managers can make or break what you're actually trying to do, even if you have that top level support and bottom people that may want to change.

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The middle managers, in order to help them move that way, really need to have some incentive, whether it be, we always use the phrase carrot or stick, because there's, it's driven by the behaviors and metrics that they're either awarded on or have consequences for.

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So getting that aligned between the business middle management and the technology middle management is what may facilitate a lot of that change.

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And so I've seen it good and bad in my experience, basically on the investment side, where they were not totally aligned.

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One had one set of metrics for the business and one had another set of metrics for technology, and it completely flopped on both sides.

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Let's talk about that some more.

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What, tell me, let's start with this statement.

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So the key to doing this kind of transformation is getting the right metrics for upper management, because that, the key is a strong word.

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But like, that seems to be something that I don't see discussed too much.

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A lot of the discussion is all about, so just, we want to change the way that we do software and the way that we run things to be more closely aligned with the business side of stuff.

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And if we can treat software as a product instead of a project that we can outsource or ship out, and we get it shipped to us like some box, and we just unload it and we're done.

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Like, it's much better if the software is actually like agile and evolves with the way that we want to do our business and helps us learn and all that great stuff.

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And so, like, the discussion around that, like, I never, I don't see a lot of tips on how to get a set of metrics that enforces management making it happen.

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And I wonder, in your experience and yours as well, Bernard, like, what do these metrics look like?

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Yeah, it's funny you say that.

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Our team had discussed last week, came out of an MIT class, basically, and the professor there was basically saying, your digital transformation are your KPIs and your KPIs are your digital transformation.

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That was a bold statement there.

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What I've seen and what is working there are the companies that have actually come out of the cloud native world.

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So you look at Lyft and you looked at Google and so forth, they have all this data that are driving metrics for folks that are aligning the business and the teams together.

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Now, stepping into the enterprises, to your point, like financial services that have been around for 100 years, getting there is a much different avenue and actually aligning the middle management to be more digital savvy and the tech side to be more business savvy.

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So that they grow, for instance, aligning like I need to increase my customer funnel on my robo advisor, but I also need to have stability or a better online experience there that will actually grow your funnel, which is aligned with the business.

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Like those types of conversations need to happen nowadays, not just here are my requirements, I throw them over the wall, and I have my business requirements to grow my funnel, and I have my tech requirements to implement a new technology.

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In a way, the metrics flow out of an emotional conviction.

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So you've got to have somebody who's senior going, this is important enough to do something.

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And then they've got to have the discipline to say, and the way we're going to incent people to do that or motivate people to do that is we're going to put that in as one of their measures.

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I like to quote this guy, Charlie Munger, who is Warren Buffett's partner.

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Anyway, he's a student of human psychology and motivation, in addition to being an investor.

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And he says a phrase that really stuck with me that he said, I think I understand incentives more than most people.

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And I'm still surprised at how powerful they are.

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Meaning he really understands them, he studied them, and yet he's still shocked at how much they motivate behavior, how much they guide it.

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And so the emotional conviction is the start of it.

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Hey, I think we could do better.

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I think we could grow our revenues better, whatever it is.

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And then it's, okay, now how would I motivate that and incent that?

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And then you stick in measures against it.

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And that's the KPIs thing again.

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And you put them in place.

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And I'll just give you an example from one of our customers.

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There's a lot of enthusiasm for using public cloud within large enterprises, but many challenges.

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And if you just say to people, you should look at moving your stuff to the public cloud, everybody goes, yeah, that's a great idea.

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But my stuff is really hard, so we'll just leave it the way it is.

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Somebody else will do that.

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So they announced that their goal was to go to 65% of their fleet up in the public cloud.

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And they said, and your bonus this year, at the end of the year, depends on that.

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I'll tell you, it was astonishing how much activity that generated.

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Yeah, yeah, for sure.

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It was like people went, oh, there's a big carrot.

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And that does, of course, raise the thing.

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We've got to figure out how to design those metrics the right way.

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Your KPIs or your strategy, your KPIs.

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You better define the right KPI.

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And that's an art and science in itself.

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But that's the thing.

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I look for the emotional.

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And then I look to, okay, now, once you have this emotional conviction, what do you put in place to do the measurement?

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Because people tend to respond to incentives quite strongly.

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To your point of motivations and incentives and things like that,

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one of the things that I've been playing around, or I talk about every now and then that I get some pushback on,

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is this idea of money is pretty important, right?

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In the tech world, especially for those of us who are literally in working at vendors,

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and we exist in the software and technology world.

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A huge part of what we're supposed to be, and often interested in, is around passion,

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and liking what you're working on, and being able to wear flip-flops to work, and stuff like that.

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But to your point, like, when I discuss with people outside of the tech industry,

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or I don't know if y'all have this experience, when you go visit their IT department,

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like, you can see it's usually poorly lit, and there's some, they don't spend a lot of money on facilities for the IT people.

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Like, it's not always the best setup.

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It feels like just realizing that you can use money to incent people is a good first step for motivating people to change.

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Whether that comes down to putting in brighter lights in their offices where they might be working,

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or I think on the extreme end, like, I'm always curious.

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I wonder what y'all have seen with where y'all work and people you talk with.

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It seems, if you want people to have a long-term focus for the long-term game of transforming and getting better at software,

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like, it's probably a good idea to give them some equity in the company.

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That works for us.

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But it doesn't seem like a very common practice outside of the upper echelons of management.

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And am I, like, a little crazy here to suggest that people look at their compensation plans

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when they find some resistance to changing how they're doing software in their IT?

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I would definitely say that the best teams that I've worked on around digital transformation

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seem to be, like, singly focused and had a purpose behind it beyond compensation.

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So looking at compensation is great, but I had, I'll give an example.

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I did a merger and acquisition when I was at my former job.

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And basically, we had one focus, and that was to get integrated in basically three months.

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And it was hell for three months.

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You were working seven days a week, 24 hours, whatever.

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It was crazy.

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But if you talk to any of those people from that time, they were like, that was the best

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project I've ever worked on because we were, there were no, there was no noise.

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Everybody knew what was the purpose and goal.

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And it wasn't about comp at that time.

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It was like, oh my God, we got to land this ship in three months.

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Like, how is this going to happen?

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And it was like a huge success.

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And if you, I ask everybody, what is your favorite team?

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What was that thing?

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And I feel, we talked about this as well on the team, but like giving that purpose.

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And aligning that purpose is one of the big motivators and changing cultures that we talk

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about that actually build high-performing teams.

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And so we talk a lot about that with our clients.

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I think you're right that compensation is a powerful element.

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And certainly if you're looking at somebody who's got some particular set of skills and you say,

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hey, if you come to company A, you'll make X.

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And if you come to company B, you'll make 1.2X.

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Company B is probably, so, you know, that sort of thing.

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And you can design incentive compensation programs to say, if you achieve this thing by within

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three months, you'll get this, whatever.

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Or by the end of the year, as I pointed out.

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I think you're, the thing that you're really lighting on though, is a larger, more encompassing

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thing, which is what is the role of funding tech within a company?

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Right.

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And within, traditionally within many companies, many enterprises, tech has been seen as a

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cost center.

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And it was, we're going to, we're going to give you a percentage of revenues or something

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like that.

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And so the focus is always, how do you squeeze that?

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How do you do next year with less than you had this year?

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And so it's very much a, and that plays out to things like, can't you use your five-year-old

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laptop and just sit around while it's doing the compile or those sorts of things.

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Companies that want to do digital transformation.

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Okay.

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Part of it is, oh, we need to have staff with certain kinds of skills, but part of it is, oh,

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we're becoming, we need to have tech as a core competence.

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It's no longer a supporting thing.

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The phrase I use is, IT is moving from support the business to run the business.

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And so that bespeaks really funding it and supporting it as a core competence.

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And I'll use an analogy.

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I'm pretty sure that the person who is in charge of manufacturing for Ford or BMW, that's looked

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at as a core competence.

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They don't look at them and go, are you sure you really need to maintain that factory?

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Can you really, can't you squeeze out?

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It's if those things don't get built, we don't have a business and it's a core competence.

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And I would say likewise for the, certainly all cloud native companies view technology as

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core competence.

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Obviously, Netflix, Lyft, choose your favorite example.

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They look on that as a core competence and they have very high expectations and they fund

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it well.

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I will say Capital One, it was an interesting company in that it described itself as a tech

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company, both internally and externally.

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And so they said, oh yeah, we do credit cards, we do banking, but we're really a tech company

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and it's supporting its tech in that fashion.

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And I think that's the future of companies that are going, addressing this digital transformation

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shift from, oh, you support the business to, oh, really you are the business.

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You're the mechanism.

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You made mention of the blog post I wrote about my auto financing experience.

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And the sort of backstory is I wanted to apply for a car loan.

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I went to two different places to apply and one place I applied online and they came back

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within 30 seconds and said, you're approved.

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Just make sure that whoever you buy the car from sends us the paperwork.

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Okay.

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That was great.

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The second site I went to, I filled out, it came right back and said, oh, you're pre-approved.

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We just need to have this paperwork and, or do something.

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And so I sent a, oh, we're supposed to fill out something online and it said, oh, you can

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sign the contract, but it just kept coming up with the pre-approval form.

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So I sent an email saying, how do I get to the thing?

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Nothing.

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Crickets for days.

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And then finally, days later, I get a call from them, from somebody there saying, oh yeah,

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I'm following up on this thing.

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I'm sorry that we didn't respond, but I was out of the office.

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And my reaction was there's one person who, if that person is out of the office, this car

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loan, what I'm trying to say is that experience crystallized this kind of, it's a core competence

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versus this thing that's grafted on.

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And the company that sort of says, this is a core competence.

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We have to support it.

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We have to enable it.

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We have to budget it.

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We have to build the skills is one that's likely to be more successful in this digital

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transformation world.

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I always like examples that most everyone experiences, right?

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Like getting a loan to buy a car is a pretty common experience.

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Retail is always a good place to draw examples from.

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But what I'm going to assume that one of the differences between those two lenders, to be

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all jargony, was one of them was probably like, one of the things we should care about is

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not having a person have to manually approve this.

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And like with your factory example, right?

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Like we should try to automate the factory as much as possible.

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And we should also try to make it easy to, I don't know, factory stuff very well.

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But the other difficult thing in a factory, I think, is like when you have to switch over

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to doing different work, like to switch your machines over.

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Or when you've got a defect and you have to do some sort of rush work through it, all sorts

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of things like that.

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And I think that's why, at least for me, it's always fascinating reading about lean manufacturing,

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because it's kind of to the point that a lot of that you two are talking about, where

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there's this extreme focus on the tools and realizing that like the efficiency of your

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tools is what is, there's no talk of like factory business alignment in the sense that we have

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IT business alignment conversations.

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It's just like the factory is the business.

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There's no confusion about that.

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And so it seems a lot of the conversation we have, or at least I encounter about talking

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about digital transformation and stuff.

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Maybe y'all don't experience this, but after 10 or 15 years, it gets a little boring for

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me to hear.

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But I think that repetition is necessary because this point has to be made that you're making

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where like, you should realize that if you have to have a person approving this loan,

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you're not really like thinking about the business in the best way possible.

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And unless, unless from the top, people are thinking about that way, there's really no

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chance for bottoms up stuff to, to improve the way things are going, which I don't know,

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getting that mindset in place.

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That seems like the core challenge, bootstrapping that, that shift in thinking there.

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That goes back to your middle management comment.

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I think that's where you need to get that mindset change that they, that's where the work

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is done.

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That's where the strategy is made.

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That's where it's delivered.

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So hardest part, but that's the most effective area.

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Your loan example makes me think of something else I've been thinking about recently, which

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is let's call it like rapid release fatigue.

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And that, that is figuring out for everything that we just said, like how frequently, how

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does someone figure out like how fast they need to work or fast is the wrong word, but how

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frequently do they actually need to be changing their software or improving it?

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We as a group try to do this with the outcome driven workshops to help managers across the business

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line and the technology teams figure out what to focus on and drive kind of strategies and

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metrics down there too.

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But to your original question, like how often do you have to change?

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I think the project to product book does a great job with that because depending on where

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your business is and how that application supports that business, whether it's a growth business

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or a mature business kind of defines like how fast you need to release features to your user

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community.

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And obviously if you're in a brand new startup, you're releasing as many features, trying to

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find product market fit as much as possible.

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But if you're a bank releasing to your loan applicants, it may be like once a month, once

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a week, like that may be satisfactory to your current client base.

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It all depends on the application, where you are in your business landscape.

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And I found that project to product flow conversation is probably the best to have in those instances.

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Yeah.

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Yeah.

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And to your banking is where I thought about this a lot.

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Again, it's another good example.

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Most everyone banks.

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So we know what that experience is like.

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And I remember a couple of years ago, there was a lot of discussion of banks fearing fintech

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startups and things like that.

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And when I moved over here to the Netherlands, you got to get such as American banking as

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it doesn't really work over here.

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So you have to get like a local bank account.

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So I signed up with one of the new bank startups and it was like a moderate letdown because I

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was like expecting something cool.

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But then it was just like banking.

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There was nothing.

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There was like nothing revolutionary about it.

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It was just you put money there and then you get money out of it.

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And maybe it'll try to identify monthly subscriptions that you have.

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And so like that kind of got me thinking of, yeah, there's some things that maybe don't

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need a lot of evolution.

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I don't know though.

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But then when I read your example of the Carlin thing, Bernard, it was also making me realize

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that, oh, maybe it's the UI is fine.

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It's like the backend where all the work needs to actually happen.

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The stuff that we don't see in the UI layer is where the hard work and where you probably

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people like me would benefit from shipping software every week.

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I was going to also cite the project product book.

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And the guy who wrote it, Mick Kirsten, has a really very interesting way of, he calls it

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flow and he uses auto manufacturing as his model or whatever.

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And he says, you want to figure out what is the right blend between new functionality,

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security requirements, because there's a security compliance, regulatory things, so forth.

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Technical debt and bugs.

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And technical debt is one of the areas that sort of is implied by what you were saying,

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which is, what is all the change you have to do in the backend to support greater facility

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in experimenting in the UI?

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Because a company like that first bank that I mentioned, the first financial institution

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I mentioned, I'm going to guess they probably didn't get it right with their flow the first

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time.

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The old model was like you'd go into a branch or something and fill out some papers or this

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kind of thing.

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When they said, oh, we're going to do it digitally, I'm going to guess they probably didn't get it

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exactly perfect.

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So they have to iterate.

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Now, should we put the sign up here?

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Do we need to highlight this in bold and a different color to indicate how important this

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step is?

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Whatever it is.

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But you need to have flexibility also in the backend.

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And that's that technical debt.

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Because typically, those backend systems are written to be to a spec and not very easy to

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change.

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And so there's a lot of work to be done to get them to enable that kind of more rapid experimentation.

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To circle back to the question that you asked at the very beginning of this section, which

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was, how often do you have to release software?

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And can you go to a place where you're releasing it too frequently?

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And I guess what I'd say is, I think almost any organization I've ever encountered, and

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that includes cloud native companies that I've worked with, most of them never experienced

356
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the problem of, oh, we're releasing too much too fast.

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They're generally, gosh, wouldn't it be great if we go faster?

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And particularly many of the enterprises that we engage with, their challenge is, how do

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we go from a twice a year or maybe once a quarter update to something that is more frequent

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that can support the kind of technical debt retirement, the more flexible backends, the

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ability to experiment, and so forth.

362
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That's what I'd say.

363
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I'm waiting for the customer who comes and says, we are going as fast as we want to go.

364
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We get as much done as we need to.

365
00:21:33,980 --> 00:21:34,360
We're good.

366
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Thanks.

367
00:21:34,960 --> 00:21:35,340
Yeah, exactly.

368
00:21:35,440 --> 00:21:39,620
It'd be like going to the doctor and having them say, maybe you should cut back on the exercise

369
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and vegetables.

370
00:21:40,260 --> 00:21:41,840
You got a little too much.

371
00:21:42,280 --> 00:21:45,020
You should try to sit around some more and eat more bacon.

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You should get fatter.

373
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That's right.

374
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Yeah.

375
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Yeah.

376
00:21:48,180 --> 00:21:51,820
We in this world like to throw around the, what would you call it?

377
00:21:51,860 --> 00:21:52,960
A prefix is for a word.

378
00:21:53,080 --> 00:21:57,820
I don't know what a prefix for a phrase is, but blank, I guess this would be a suffix, but

379
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blank as a product.

380
00:21:59,120 --> 00:22:03,380
And what y'all are making me think is that we talk about platform as a product and your

381
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software as a product.

382
00:22:04,320 --> 00:22:07,700
And there's probably also your back-end business processes as a product.

383
00:22:07,700 --> 00:22:11,340
Cause I like the way you're tenderizing that out Bernard, which is sure.

384
00:22:11,340 --> 00:22:16,320
You may not be changing your UI or even your business around a lot, but when you get to

385
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that three month window of working a lot, you will be right.

386
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And you're not going to have time to go and pull apart, like the concreted out plumbing

387
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of how your back-end works.

388
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And I think you, you identified it.

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00:22:28,420 --> 00:22:34,380
What I see a lot as well, Bernard is like these back-ends were built on a, almost a project

390
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basis, which is to say like a very static definition of what they should provide.

391
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Like the interfaces into them and the data that gets put back out.

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And there's not a lot of assumption put into assume we're going to need to modify this every

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six months.

394
00:22:49,680 --> 00:22:51,080
Assume a lot of agility in this.

395
00:22:51,200 --> 00:22:54,980
It's more just, this is like the platonic truth of how our business operates.

396
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So therefore it's impossible to change.

397
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No one emerges from the cave and it's to be where a lot of benefit could come from.

398
00:23:01,620 --> 00:23:06,380
Cause the UI layer, that's relatively easy to like getting your ERP system to change.

399
00:23:06,520 --> 00:23:10,300
Like you can always, I don't know, it seems like the mobile teams are always the ones who

400
00:23:10,300 --> 00:23:13,540
have the most success because they don't really have a backend to deal with.

401
00:23:13,540 --> 00:23:19,500
In the late 2000s or the early 2000s, being digitally savvy was that mobile front-end change

402
00:23:19,500 --> 00:23:20,660
of user experience.

403
00:23:20,860 --> 00:23:26,880
I think recently to the loan example, like that is the backend is now where executives are actually

404
00:23:26,880 --> 00:23:32,040
making their biggest impacts from a CIO perspective to their business partners, figuring out like,

405
00:23:32,160 --> 00:23:34,840
how can I change my business model because of this backend?

406
00:23:35,220 --> 00:23:40,580
One great example is where all the financial industry is trying to go with T zero or trade

407
00:23:40,580 --> 00:23:43,560
settling in zero days versus one, two or three days.

408
00:23:43,780 --> 00:23:48,180
And this is the big backend we're talking about working with some of our clients and you hear

409
00:23:48,180 --> 00:23:53,000
technologies like blockchain come into here and all sorts of things, but that's all around

410
00:23:53,000 --> 00:23:57,040
that back office settlement experience, part of the industry.

411
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And so, which will have a huge impact on revenues across the board.

412
00:24:00,800 --> 00:24:05,500
So if y'all were to recommend, so as a couple of initial projects to work on, what would

413
00:24:05,500 --> 00:24:06,600
you recommend people do?

414
00:24:06,740 --> 00:24:11,060
Should they work on a backend sort of thing or should they work on something that's more

415
00:24:11,060 --> 00:24:13,680
visible, modernize an application or like what?

416
00:24:13,920 --> 00:24:17,260
So the clients I talk to, so I deal with mostly financial services.

417
00:24:17,260 --> 00:24:21,200
The common thread that I always get is ease of use.

418
00:24:21,340 --> 00:24:25,680
So it's not that fancy new login, but the app is really on client onboarding, right?

419
00:24:25,840 --> 00:24:29,340
Financial, I always hear that client onboarding and identity access.

420
00:24:29,520 --> 00:24:30,960
Those are two of the main focus.

421
00:24:31,180 --> 00:24:35,260
You want security and you want to make it easy to get on to their platforms.

422
00:24:36,000 --> 00:24:40,040
And so a lot of these financial services companies have grown up in different business units and

423
00:24:40,040 --> 00:24:44,420
I may be a client across six of their business lines, but they don't talk to each other.

424
00:24:44,420 --> 00:24:48,840
So when they think about this and they want a friendly mobile experience where I can actually

425
00:24:48,840 --> 00:24:53,860
go from my banking relationship to my investment relationship, hence Bank of America and Merrill

426
00:24:53,860 --> 00:24:55,240
Lynch, I want one login.

427
00:24:55,600 --> 00:25:01,000
And so this is not that fancy front end, but this is like making it easy to transact and go

428
00:25:01,000 --> 00:25:02,440
across all of their applications.

429
00:25:02,800 --> 00:25:07,540
So we've seen it at the large financial service institutions, this is now going down to the next

430
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level.

431
00:25:08,020 --> 00:25:12,780
And so making that easily integratable and done is where a lot of the focus has been.

432
00:25:13,020 --> 00:25:17,100
I wouldn't have thought of that, but that's a good example on one of the things in your blog

433
00:25:17,100 --> 00:25:21,340
post about five digital transformation mistakes that you mentioned, Bernard, is like, to put it in

434
00:25:21,340 --> 00:25:24,960
my own words, you need to build up a track record of success, right?

435
00:25:25,060 --> 00:25:29,020
Like that you can basically boast about and use as proof points.

436
00:25:29,200 --> 00:25:31,480
I think you put it a little more elegantly than that.

437
00:25:31,680 --> 00:25:36,900
Something like customer acquisition, but then even cross-selling or whatever the term of art

438
00:25:36,900 --> 00:25:42,740
is in finance synergies across lines of business and kind of land and expanding, as we would

439
00:25:42,740 --> 00:25:43,740
say in the product world.

440
00:25:43,920 --> 00:25:48,600
That's a good example because it seems like it is, I wouldn't say easy, but it's possible

441
00:25:48,600 --> 00:25:51,100
to do like it's technically possible to do.

442
00:25:51,460 --> 00:25:55,280
And it has immediate, highly visible, measurable results.

443
00:25:55,460 --> 00:25:58,720
That result being that like more people are signing up for accounts.

444
00:25:58,900 --> 00:26:00,620
So it's tangible that it works.

445
00:26:00,620 --> 00:26:04,380
And then when I think about this kind of thing, like starting small and building up, it also

446
00:26:04,380 --> 00:26:08,600
has this other criteria that I say in a kind of a snarky way, which is like, if it doesn't

447
00:26:08,600 --> 00:26:10,340
work, it already wasn't working.

448
00:26:10,460 --> 00:26:14,360
So it's obviously it's bad reputationally and the time and money you spent on it.

449
00:26:14,580 --> 00:26:19,740
If it doesn't immediately work out, but it's mildly low risk as far as like making the situation

450
00:26:19,740 --> 00:26:21,200
worse than it already is.

451
00:26:21,260 --> 00:26:21,900
How about you, Bernard?

452
00:26:22,060 --> 00:26:26,000
I think a common thread among all of them, because there are different kinds of businesses.

453
00:26:26,240 --> 00:26:27,500
I work with oil companies.

454
00:26:27,580 --> 00:26:30,060
I work with oil companies, work with financial services companies.

455
00:26:30,060 --> 00:26:34,240
If you're hearing a little bit of meowing that star who has decided she's ready for a

456
00:26:34,240 --> 00:26:34,820
bit of attention.

457
00:26:35,020 --> 00:26:36,000
That's what cats are for.

458
00:26:36,140 --> 00:26:36,820
Yeah, exactly.

459
00:26:37,020 --> 00:26:41,900
I guess what I'd say is all of them want to have a strong customer focus.

460
00:26:42,220 --> 00:26:44,300
And so it's, how do I ease customer use?

461
00:26:44,540 --> 00:26:46,300
How do I make it more convenient for customers?

462
00:26:46,500 --> 00:26:48,260
How do I reduce the friction?

463
00:26:48,520 --> 00:26:53,300
And depending on the company, that might be, gosh, I want to make it so that somebody can

464
00:26:53,300 --> 00:26:57,440
use their loyalty points more conveniently from our mobile app.

465
00:26:57,440 --> 00:27:02,420
Our mobile app maybe enables you to request your bill to be mailed out or something, but

466
00:27:02,420 --> 00:27:06,860
you want to add on some new functionality to it about how do I use loyalty points to purchase

467
00:27:06,860 --> 00:27:09,860
a getaway vacation or a barbecue or something, whatever.

468
00:27:10,180 --> 00:27:11,500
So that's sort of customer convenience.

469
00:27:11,620 --> 00:27:12,420
How do I onboard?

470
00:27:12,680 --> 00:27:18,000
With oil and gas companies, there's a strong need to say, gosh, we have a changing customer

471
00:27:18,000 --> 00:27:20,280
demographic that's more interested in sustainability.

472
00:27:20,600 --> 00:27:24,400
How do we provide new services to them that they're interested in?

473
00:27:24,400 --> 00:27:29,840
So a common thread is how do I respond to the marketplace and either roll out new functionality

474
00:27:29,840 --> 00:27:32,020
or how do I ease engagement?

475
00:27:32,340 --> 00:27:36,580
And just going back to this loan thing, as you pointed out, clearly one of those companies

476
00:27:36,580 --> 00:27:38,980
really sat down and said, how do we streamline this?

477
00:27:39,140 --> 00:27:45,060
How do we reduce anyone having to manually interact with this loan in these circumstances,

478
00:27:45,320 --> 00:27:46,840
which is to reduce variability?

479
00:27:47,220 --> 00:27:49,900
And the other one wasn't able to do that or hadn't done that.

480
00:27:49,900 --> 00:27:53,480
And so that sort of, what's the core capability that we have?

481
00:27:53,600 --> 00:27:54,500
How do we streamline it?

482
00:27:54,640 --> 00:27:56,980
How do we avoid somebody having to touch it?

483
00:27:57,100 --> 00:27:59,420
Those are common drivers and common applications.

484
00:27:59,680 --> 00:28:01,780
But it varies according to the industry they're in.

485
00:28:01,860 --> 00:28:04,800
Because one is somebody wants to check into a hotel room.

486
00:28:04,980 --> 00:28:09,800
Another one is somebody wants to change their energy supplier from X to Y.

487
00:28:10,260 --> 00:28:15,660
Yeah, I like one of the general, not principles, but general approaches or filters that you're

488
00:28:15,660 --> 00:28:16,240
going over there.

489
00:28:16,240 --> 00:28:19,380
The idea of, let's call it customer friction, I think you said.

490
00:28:19,560 --> 00:28:25,220
And it's an example where being a little cynical is helpful in the following sense that a lot

491
00:28:25,220 --> 00:28:30,160
of the conversation I've seen recently is around what you want to, when you're trying to improve

492
00:28:30,160 --> 00:28:34,360
the way you do software to make your business function better, you want to deliver on better

493
00:28:34,360 --> 00:28:36,720
customer experience, which sounds awesome.

494
00:28:36,940 --> 00:28:39,660
But if I sit down and think about it, I always think, what does that mean?

495
00:28:39,760 --> 00:28:40,860
Customer experience.

496
00:28:41,100 --> 00:28:45,080
Like, obviously you want them to have a better time, but it doesn't really like help me target

497
00:28:45,080 --> 00:28:45,600
what to do.

498
00:28:45,700 --> 00:28:49,980
But then what a couple of, y'all have both said this a couple of times, but finding where

499
00:28:49,980 --> 00:28:54,280
that friction is or that bottlenecks or where the slowdown is, which is to say, this is where

500
00:28:54,280 --> 00:28:58,060
the negative version of, the negative version of customer experience is friction.

501
00:28:58,360 --> 00:29:00,080
Something's frustrating or it's bad.

502
00:29:00,080 --> 00:29:04,320
And so it's almost like in selecting those projects and you, both of you rattled off a

503
00:29:04,320 --> 00:29:04,720
few of them.

504
00:29:04,720 --> 00:29:08,420
It's, I think maybe the thought exercise with whoever's in the room is like, what's some

505
00:29:08,420 --> 00:29:12,980
stuff that like our customers hate or that we don't like that takes a long time that like

506
00:29:12,980 --> 00:29:13,480
is friction.

507
00:29:13,600 --> 00:29:16,640
And I think that's why I like value stream mapping or whatever you may do to find that

508
00:29:16,640 --> 00:29:17,040
flow.

509
00:29:17,060 --> 00:29:19,640
Like it really helps to identify those problems.

510
00:29:19,640 --> 00:29:23,020
And that kind of helps point you towards the direction of fixing things, which I think

511
00:29:23,020 --> 00:29:27,100
picks back on something you were back in the compensation area, you were saying, Jesse, which

512
00:29:27,100 --> 00:29:31,020
is I think the major pushback I always get about what's all about compensation is that

513
00:29:31,020 --> 00:29:36,000
developers and other people, they especially appreciate it when they can just do their job

514
00:29:36,000 --> 00:29:36,980
and do well at it.

515
00:29:37,060 --> 00:29:40,920
Like where they don't have to ask, go to a lot of meetings to ask for things, do governments,

516
00:29:41,120 --> 00:29:42,280
wait around for their labs.

517
00:29:42,280 --> 00:29:46,920
As we like to say, that path to production is really fast and that in itself can be a reward

518
00:29:46,920 --> 00:29:51,580
or at least it, it keeps people, it keeps not only their heads, but all of them way above

519
00:29:51,580 --> 00:29:54,700
water of being distressed and they're happy in what they're doing.

520
00:29:54,700 --> 00:29:59,220
You've probably experienced this since you moved over to Europe, but I travel a fair

521
00:29:59,220 --> 00:30:03,120
amount and travel to Europe and in particular to Britain quite a bit.

522
00:30:03,440 --> 00:30:07,380
And with one credit card company, it would be like, oh, you're going to go to Britain.

523
00:30:07,700 --> 00:30:10,940
You have to come to our website and fill out a form that says, I'm going to be going to

524
00:30:10,940 --> 00:30:12,600
this country from this date to this date.

525
00:30:12,640 --> 00:30:15,700
Because otherwise, if we see a transaction, we're going to reject it because you've probably

526
00:30:15,700 --> 00:30:16,340
experienced that.

527
00:30:16,520 --> 00:30:20,660
Another credit card company I use says, oh, we're going to see you coming from that.

528
00:30:20,660 --> 00:30:24,980
We may send you an alert that says, hey, you just got a charge from XYZ.

529
00:30:25,180 --> 00:30:25,880
Is that okay?

530
00:30:26,020 --> 00:30:27,420
If it's a problem, let us know.

531
00:30:27,620 --> 00:30:30,040
Meaning they approved the transaction and did that.

532
00:30:30,220 --> 00:30:33,500
The friction of the first versus the second is quite dramatically different.

533
00:30:34,180 --> 00:30:37,320
And what I'll say is, and coming back to your backend versus front end.

534
00:30:37,460 --> 00:30:41,440
So the front end is, oh, one, I have to go do a pre kind of thing and I have to remember

535
00:30:41,440 --> 00:30:42,180
it and all that.

536
00:30:42,260 --> 00:30:44,700
The other one is I have to respond as an exception.

537
00:30:44,960 --> 00:30:48,980
If I wasn't in London and I got a thing saying, hey, you just charged in London, I'd go, oh,

538
00:30:49,060 --> 00:30:50,040
I treat that as an exception.

539
00:30:50,300 --> 00:30:52,660
There's no friction to me if I decide to do that.

540
00:30:52,860 --> 00:30:55,800
The backend implication of that, and this is something I learned working at a company that

541
00:30:55,800 --> 00:30:59,680
did a lot of credit cards, is one would think that in the industry, there was very sophisticated

542
00:30:59,680 --> 00:31:01,820
fraud analysis and assessment.

543
00:31:02,120 --> 00:31:03,820
And oh, this person is a left-handed person.

544
00:31:03,820 --> 00:31:06,020
So this and that person was wearing a sports shirt.

545
00:31:06,160 --> 00:31:08,140
No, it's really crude, surprisingly crude.

546
00:31:08,140 --> 00:31:12,300
And the company that I was aware of was really putting a lot of effort into improving their

547
00:31:12,300 --> 00:31:18,380
fraud assessment of charges to reduce the number of false negatives or false positives or whatever

548
00:31:18,380 --> 00:31:18,720
it would be.

549
00:31:18,800 --> 00:31:22,360
In other words, somebody is charging something that they should be able to charge, but it

550
00:31:22,360 --> 00:31:23,760
shows up as not being able to charge.

551
00:31:23,920 --> 00:31:25,080
That's a backend process.

552
00:31:25,240 --> 00:31:32,840
They were rewriting their fraud system to offer better functionality or greater satisfaction

553
00:31:32,840 --> 00:31:34,340
to their customers, reduce the friction.

554
00:31:34,340 --> 00:31:38,540
And the net of that is, guess which credit card company I would be, and the phrase they

555
00:31:38,540 --> 00:31:41,180
use in the industry is, which one of those would be first in wallet?

556
00:31:41,700 --> 00:31:43,280
Which is the one I'm going to reach for?

557
00:31:43,480 --> 00:31:43,900
Guess what?

558
00:31:44,180 --> 00:31:45,880
So there's a whole range of things.

559
00:31:45,940 --> 00:31:46,820
How do you reduce the friction?

560
00:31:47,060 --> 00:31:48,640
How do you induce use by the customer?

561
00:31:48,940 --> 00:31:51,120
How do you adjust your backend systems to enable that?

562
00:31:51,340 --> 00:31:54,440
And then they have to build a system that says, oh, we need to bring in a new fraud

563
00:31:54,440 --> 00:31:55,560
assessment mechanism.

564
00:31:55,800 --> 00:31:57,700
It's not just left-handed and sports shirt.

565
00:31:57,800 --> 00:31:59,960
It's also flip-flops versus whatever.

566
00:32:00,040 --> 00:32:03,760
You've got to have a backend system that can say, oh, we can add in another analytical

567
00:32:03,760 --> 00:32:04,520
checkpoint.

568
00:32:04,800 --> 00:32:06,340
And so you need more flexibility in the backend.

569
00:32:06,740 --> 00:32:09,920
And if you've built something that says, well, once we get this thing done, it's done forever.

570
00:32:10,120 --> 00:32:11,000
It's going to be hard to do that.

571
00:32:11,140 --> 00:32:14,760
If you've built in a system that says, gosh, this is likely to be an area of significant

572
00:32:14,760 --> 00:32:15,140
change.

573
00:32:15,180 --> 00:32:16,700
So we need to be able to update it frequently.

574
00:32:16,960 --> 00:32:18,560
That's going to, that's going to direct you as well.

575
00:32:18,700 --> 00:32:22,000
So that's an example that encapsulates several of those things that you were bringing.

576
00:32:22,140 --> 00:32:26,320
I like that example because just to rephrase exactly what you just said, it's representative

577
00:32:26,320 --> 00:32:32,080
of focusing on making your customers' life easier, or at least not their whole life, but

578
00:32:32,080 --> 00:32:33,840
their interaction with you, the business.

579
00:32:34,060 --> 00:32:37,420
You can't promise that they're going to be able to make a better sandwich because you put

580
00:32:37,420 --> 00:32:37,860
that in there.

581
00:32:38,080 --> 00:32:45,560
But like, it also directly points out the consequences of a project versus a product mentality.

582
00:32:45,560 --> 00:32:51,360
And the project mentality being like, all we can do is have them basically update a field

583
00:32:51,360 --> 00:32:51,940
in a database.

584
00:32:52,220 --> 00:32:57,060
There's no way for us to like push out a notification to them and then collect what their response

585
00:32:57,060 --> 00:32:59,300
is and then integrate that back into the system.

586
00:32:59,520 --> 00:33:01,580
Like we just, they can just go update a field.

587
00:33:01,580 --> 00:33:06,240
And like the idea that we would change that backend has not occurred to anyone or not that

588
00:33:06,240 --> 00:33:07,200
it hasn't occurred to anyone.

589
00:33:07,200 --> 00:33:11,700
Cause of course it has, but it hasn't occurred to someone to prioritize that high enough because

590
00:33:11,700 --> 00:33:15,860
they, they want to deal with that friction and make the experience better.

591
00:33:15,860 --> 00:33:19,740
Well, give us a little overview of some of the other people that you have on your team

592
00:33:19,740 --> 00:33:22,960
and kind of the industries that you work in case people are interested in following up

593
00:33:22,960 --> 00:33:23,280
with that.

594
00:33:23,500 --> 00:33:29,680
We definitely have a team of experts in financial services here, myself, Bernard, and Henri Vandebook.

595
00:33:29,940 --> 00:33:32,200
We also have JT, expert in healthcare.

596
00:33:32,660 --> 00:33:34,660
Gotham is on our team, Gotham Palapa.

597
00:33:34,880 --> 00:33:38,260
Dr. Gotham Palapa is a retail expert.

598
00:33:38,460 --> 00:33:44,740
Nick Clark, obviously former MasterCard head of cloud, also huge into telco prior to that.

599
00:33:44,940 --> 00:33:45,540
And then Carl.

600
00:33:45,800 --> 00:33:48,020
So if we're looking for manufacturing, we talked about cars.

601
00:33:48,140 --> 00:33:50,880
He's the person that works a lot with people who build planes.

602
00:33:51,100 --> 00:33:55,140
And so we have covered mostly every industry at this point.

603
00:33:55,380 --> 00:33:57,800
I think we're looking to get into more fed stuff.

604
00:33:58,000 --> 00:34:03,780
I think we have some, any industry examples, if folks are looking for around digital transformation.

605
00:34:04,260 --> 00:34:04,640
All right.

606
00:34:04,660 --> 00:34:04,880
Great.

607
00:34:04,880 --> 00:34:08,240
I appreciate you two being on and having a discussion about this stuff.

608
00:34:08,380 --> 00:34:10,800
So with that, as always, this has been Tansu Talk.

609
00:34:10,860 --> 00:34:14,140
If you want to get the archives for this show, you can go to tansutalk.com.

610
00:34:14,260 --> 00:34:19,040
We post many of these things, including this one's as a podcast, but there's also videos.

611
00:34:19,160 --> 00:34:21,240
So you can find a link to all the videos that we have.

612
00:34:21,400 --> 00:34:22,960
And with that, we'll see everyone next time.

613
00:34:23,140 --> 00:34:23,620
Bye-bye.

614
00:34:38,300 --> 00:34:38,800
you