57: Unpacking IBM's CEO Guide to AI

Pete Behrens:

How are CEOs viewing the impact of AI? Welcome to another episode of (Re)Learning Leadership, where we explore a specific leadership challenge and break it down to help improve your leadership, your organization and, just possibly, your personal life. I'm Pete Behrens, and today we've got a special episode for you. Recently, we received a report from IBM entitled The CEO's Guide to Generative AI. And in looking at this report—it's about 150-some pages, and it's got a deluge of information. And I thought, “How do we bring this about? How do we bring this forward in a meaningful, insightful—but not too overwhelming—sense?” And—thinking about that, I decided to just invite one of my favorite sparring partners over, Jim Highsmith, and just talk about it. And so, this episode is going to be providing you some information from that report. Which is incredible information, but it's through two lenses.

Lens number one is a lens of agility. And one of the things we realized in reading this report is how much Agile principles and practices are infused in AI. And that just comes through this report, which is really fascinating and, obviously, valuable to an Agile Leadership Journey audience. A second lens is this—construct around, you know, the AI and leadership, right? It's this intersection. And so, the lens we're bringing this data to you is with respect to what we're doing with our AI Leadership Lab, which you may be unaware of. But it's something—we've been kind of undercover for a number of months, on an exploration process in this intersection. And what you can only see as a Venn diagram between the whole world of AI, which is huge, massive, and leadership, which is huge, massive. But there's a thin slice in between these two, AI and Leadership. And it's that space that we're starting to explore. And we've developed our initial cohort; we're starting to explore this landscape.

And so, what—we're bringing this conversation to you—is to share a little bit about why we're doing, what we're doing, and how it connects with some of the learning we're seeing. What that means for you is—there's now starting to be different ways you can get involved in the AI Leadership Lab. And we talk about cohorts—this is an opportunity to join others in this discovery process. But we also talk about some discoveries and some sharing that we'll be doing over this next year, as well as some experiments that we're going to be running around AI with leadership development. So, for us, it's quite exciting! It's fascinating territory, but it only works in an ecosystem.

And you're part of that ecosystem! And so, I encourage you, after you listen to this—I know you're going to enjoy this conversation. I encourage you to get involved. Check out our information. So, the link to the report is under our website. The link to our lab and how to get involved is on our website as well. And one final note: this conversation—I was fortunate to invite Jim over for an in-person chat. So, if you're watching this, you're going to see a slightly different setting. Jim and I got to hang out in my living room. So, enjoy this conversation, and I hope to see you somewhere along this AI in Leadership Journey!

Well, Jim, I just want to say thanks for joining me on this conversation!

Jim Highsmith:

It's been a lot of fun so far!

Pete Behrens:

Well, you know, one of the things I wonder about is, you know—a couple months ago I proposed, maybe, an AI leadership Journey or an exploration with you. And I'm kind of curious—why did you say yes to that?

Jim Highsmith:

Well, leadership in this space is something I've always been interested in. And, as you know, I wrote a couple of articles now on leaders looking from the top-down, as opposed to the bottom-up. So, I've got interviews with a couple of C-suite leaders who have been on this agile journey—and successfully—and talk to them about what they viewed as agility and adaptability and how they work that into their leadership. And so, leadership has always been an area of interest of mine. In fact, in 2014, I published a book called Adaptive Leadership. And even in—and I really, really went back to one of my earlier books in—was released in 2000. And the word, term, adaptive leadership is actually in that book. And I didn't push it a lot, but it's interesting that I was thinking about that, way back then. And so, I've always viewed leadership as part and parcel of how you made Agile transitions. And now I think we've got another kind of transition that's going to be even more challenging, and particularly to leaders. I think leaders’ jobs are going to change for a variety of reasons, which we could talk about. But then, with AI and some of the new technologies that are coming around, it's going to be a change again. And the thing that's happening is—if you look at change over the industrial eras and the non-industrial eras, it was slower. And now you get into the change which is faster. And that's really hard for people to absorb.

Pete Behrens:

Yeah, yeah. So, one of the things we're going to be talking about today is an IBM report that was recently produced. And I think, if we had printed it out, it would be a really thick stack. It was over 150 pages. And lots of interesting content in there. And I think they're—they talk about nearly 6,000 CEOs or C-Suite-like people that they interviewed through this process. And one of the things I think I saw in that report—and, you know, you picked this out—is some of the themes that were in that report, and how they connect to what we do at ALJ, how they connect to what our exploration is with our AI Leadership Labs. But I'm curious—what stuck out to you, I guess, in terms of—why did you find that report, and what jumped out to you?

Jim Highsmith:

I must have gotten it off of a LinkedIn feed. That's how I find a lot of things. And it just appealed to me! It was pretty long, like you said, 150 pages or something like that. And there's some repetition in there, but there are also a lot of ideas. It's oriented to CEOs, yeah. And that's their, sort of, their target audience, which means people below the CEO, CIO are going to read it too. But it really laid out, I thought, a fairly comprehensive look at how you would plan for this AI invasion, I guess of organizations. And it will be an invasion because, as I've said, with Agile transformations, the organization antibodies are going to come out and attack. And so, it's going to be an interesting transition.

But yet, as you know, we talked to a couple of leaders recently, and these are leaders in good-size organizations, mid to upper-level managers. And I asked them a question: what are you using AI for? They said a better question is: what are we not using AI for? And that really stuck with me. And, you know, there are, by some account, 63,000 AI firms in the world right now. I just saw a website the other day that listed 10,000-plus AI tools. I mean, it's just exploding. And how do you get a handle on that? And I think this is the—one of the reasons, or one of the things that you've got to do, is—you've got to recognize that it's out there, and you've got to figure out how to deal with it. And it's not going to be a Plan, Do approach. It's going to be an Envision, Explore approach, which is sort of the Agile way of doing things. Let's envision where we might go. Let's explore into that, back up and envision again. And explore again. So, it's going to be an iterative cycle. And those of you that think anybody has the answers right now—they don't.

Pete Behrens:

Including us.

Jim Highsmith:

Including us!

Pete Behrens:

Yeah. And so, the report, which—we'll make a link in the podcast episode—is the CEO's Guide to generative AI, which is IBM's report. Now, what you're bringing up is connection to agility, you know. You and I have both written articles on this, right? You wrote If you fail at Agile, you will fail at AI, which has been a bit controversial in our space. And I talk about why agilists are moving to AI, right? And there's a natural—right? You talk about this in terms of that natural call/response, right? The prompt response is a natural evolution. And how we work with—how we collaborate with AI. But there's also this synergy of change, right? This synergy of disruption. The synergy and how we respond to that. And I think what you're picking up on here is—there's a symbiotic nature between agility, the ability to change and AI, right? And its ability to change and help organizations change.

Jim Highsmith:

Right. Well, its ability to generate change. [Laughs]

Pete Behrens:

Disrupt change, yes.

Jim Highsmith:

So, it's a disruptive force. And how do you deal with disruptive force? You've got to be more adaptive, more resilient. One of the things that's even more important, I think—or one of the aspects of this is really important in this space—is the ability to sense what's going on. If you think there's 10,000 tools out there, and 63,000 vendors coming knocking at your door, how do you figure out what to look at, how to look at it? Who are you going to believe? Who are your sources going to be? Where are you going to go for tools? Where are you going to go for help? There are all these kinds of things that are going to be new. And it's going to be—this is trying to sense what's out there and what to do—is going to be a real major task.

Pete Behrens:

Yeah, yeah. So, diving in now, maybe, into some of the findings in the report, and maybe how we connect those to what we're doing with our AI Leadership La, as well as Agile Leadership Journey in general. You know, one of the things you talk about is the report talks about this experimental approach. Like, we can't wait, right? We can't sit back. Leaders must act, but they've got to act even without all the information, right? And I think that's one of the things we've talked a lot about with this bold agile leadership, right? To be able to have the courage to step into a space with unknowns present.

Jim Highsmith:

Right. So, my loose definition of agility is—or adaptive leadership style is—number one, you've got to be adventurous, and you've got to be willing to take some risk. And—calculated risk, but risk none nonetheless. And you may be able—may have to take a little additional risk in today's world. The second part of that is inspiring. You've got to be able to inspire people to go along with you on this leadership—on this journey into AI. So, how do you inspire the troops, other people in the organization? And then, finally, do you have an adaptive life cycle that you can use? It's an experimental life cycle that kind of keeps you going. So, it's a whole different environment. It's even more necessary to have an adaptive, open experimental approach to things.

Pete Behrens:

Well, and I think we're trying to role model some of that. I mean, we're not experts in AI. We're not attempting to be experts. As you mentioned—right?—there's thousands of organizations, thought leaders out in the world about AI. What we feel competent and maybe uniquely qualified for is that intersection of AI to leadership. And I think that's the space we're looking at playing, and that's the kind of focus of our lab is. Okay, what impact does this have on leadership? I look at this report. And one of the things I wrote about was, you know, the landscape. And you talk about awareness and assistance and, maybe, how leaders change. I saw this a lot, about awareness. I'm curious—this report, did you see it going beyond awareness? Did you see this report going into more assistance or—what we call—augmentation?

Jim Highsmith:

It did a little bit. As you know. I've sort of defined capability in this environment as knowledge plus experience plus decision-making. And I think one of the things that's happened in the Agile community is—we've kind of stopped at knowledge in many situations, and we haven't gotten into the experience factor. And therefore, the total experience with Agile and organizations has gotten kind of thin. And then, do you know enough to help you make decisions? And I think that what we need to do, or what we're doing—is trying to look at each of those things. And saying, “How can AI help us with the knowledge that you need to make—to be a better whatever you are.” So, if you're a developer, how do you be a better developer by having knowledge instantly available? Then the next one is, “How do you get experience?” Is there any way to get experience, other than through experience?

Pete Behrens:

Yeah, that's an interesting question.

Jim Highsmith:

And so, there's some ways to do that. So I think that's a second level of what AI can do. But it's—that's a more abstract level. And then, can it help you in the decision-making? That's sort of the third level of capability. And so, the question here is, “Can you help make decisions? And help somebody making a decision, a person making a decision?” Or can you actually make a decision—AI make a decision? I think that's off in the future. Hopefully!

Pete Behrens:

Well, yeah. Guardrails and, you know, how do we manage that ethically and meaningfully. I'm curious—maybe, you've got a, you know—what stuck out to you, maybe, in this report? Was there a key, kind of, focal lens?

Jim Highsmith:

Well, I've looked at a lot of use cases. And so, for example, this part, this report, starts out talking about customer service. And that number one priority for a lot of people, a lot of organizations. But the one that stuck out to me—and I think, basically, because I come from an IT environment—is the revamping of old legacy systems. And that may actually be able to go a lot faster, using some AI. And so, there's a lot of stuff going on in the developer community, in terms of using AI. And so, I thought—if we can get rid of some of that old technical debt that's holding a lot of companies back, one of the things the IBM report says is—this may be able to take traditional firms that are less digitally oriented and jump, leap, programs into catching up with the competition. And that's something that we—that I hadn't really looked at before, or heard before. But that would be a great Advantage for a lot of companies.

Pete Behrens:

Well, yeah. I saw a lot of customer orientation in this report. And we can connect that to ad, right? The customer responsiveness, right? The customer connection. The customer personalization—right?—that AI could potentially bring into that relationship. And so, yeah, I think, again, coming back in that Agile space, what you're saying also, though, that I think connects—is the advancement of technology, enabling business agility, right? And I think one of the things they say in that report was—it's not just about legacy systems, moving them up. It's about—those become the precursor to them being agile, which I thought was an interesting connection.

Jim Highsmith:

Yeah. And, for example, there are a lot of people who have moved a lot of their legacy systems to the cloud, and thereby gained some flexibility and agility, in terms of their IT infrastructure. That's a fair—you have to be careful about that, because both systems that were built long ago—are not cloud native. And so, you have to do some rework of those systems. And sometimes, even, replacement. If that can go faster, that means that the infrastructure can be more adaptive, more agile. I used to always say that you could have the most agile team in existence, and if you put them to work on a clunky, old legacy system, they weren't going to be—necessarily be fast. Or, you know, it's just the nature. You have to have an Agile team, and you have to have an Agile infrastructure in order to move forward quickly.

Pete Behrens:

I think the danger here, though, is to look at this as an IT thing, right? To look at this as a tech thing. And I think one of the things I saw in this report was the importance of business, the importance of leadership, the importance of the board. And how this isn't just delegated, right? This can't be delegated. In fact, I think there was some really interesting things they, quote—it said stop measuring business and IT goals separately, right? Explicitly prioritize IT projects with the strongest links to business value. And then there was another stat that said 64% of executives believe generative AI will bridge the gap between IT and business. And this is something we've been trying to do in Agile, right?

Jim Highsmith:

Well, it's interesting, because in a book that I wrote with a couple of colleagues called Edge, which was a digital transformation book—it was published a couple, three years ago. And one of the things we talked about in there is three kinds of measurements. One is a customer facing measurement, giving you customer value. And that was a, really—that the most important. Then you have business value, like sales and profits and those kinds of things. And that was a business value. And then you had activities, you know. Like, “How many lines of code did you do?” Or “How many of these things did you sell?” And you need all three of those kinds of measurements. But it's got to be driven from the customer value perspective. And people are finding more and more ways to do that. It's a little bit tough, because what you're asking somebody to do is look at—what I'd call—fuzzy numbers, as opposed to hard numbers. Financial numbers are hard numbers. Customer value numbers can be fuzzy numbers. And—but I'd rather have a fuzzy number for something that's important than a precise number for something that's not important.

Pete Behrens:

Yeah. You know, what is easily measured is not always valuable. What is valuable to be measures is not always easy. Speaking of, kind of, getting into that fuzzy side, you know, one of the things I saw as a connection to this—besides shifting from IT to business—is the importance of creativity, the importance of curiosity. And, you know, one of the things they talk about, I think, in this report—right?—is this concept of creativity over capability. And I just want to emphasize that, because I think a lot of the leaders out there are thinking, “I need AI capability!” And that's probably true, but it's the creativity. I think the podcast with Henrik Kniberg really, kind of, showed that—to me, he's, like—the concept of prompt imagination is almost more important than the prompt, you know, engineering, you know, behind it. And I think that connects here, into this concept of the creative culture, right? The curiosity culture. And I think they even said, “Crystallize a culture of curiosity.” They must build a cultural mindset. And then the governance guard rails. Which I think says, “How do you create a space for people to play, right? To experiment. To allow them to take risks. Because I think that cultural element is so critical.

Jim Highsmith:

It's interesting. Hans Claus, of the World Economic Forum, has what he calls Four Ages of Industrial Evolution. And the third one is knowledge work. And I think the fourth one is innovation work. And so, we're moving from knowledge work to innovation work, where creativity is really important. And I think AI is driving that. So, I think you're right in, that it's not just setting these things up. But you got to set up a culture of innovation and creativity, which means loosening the bonds of a lot of traditional management, even more so to get that creativity there. I was hearing a story of—and I forget who it was—it was one of the big, high-tech companies, where his direct reports wouldn't do what he wanted. They're very independent. And, you know, that's not always a good thing. But in a lot of those high-tech organizations, you can push back really hard on management, or at any level. And in more traditional organizations, you really can't do that. And so, that's one of the things, in terms of leadership change—that you've got to be willing to give up some of the power, quote, that you had before, and be more of a consultative approach. In fact, Bayer and Company is going through a major restructuring of their organization. And one of the things that they're talking about is span of control of, first, LAND management. Going from three or four, which is the industry average, to fifteen or so, which is what Bayer is shooting for. And one of the things they've done is—they've changed the name of that from span of control to span of consulting. So it's a different role, even for first-line managers.

Pete Behrens:

Well, and I think—one of the misses I think this report had was how leaders might change, right? It talked a lot about leadership decisions, leadership focus. Organizations might change but, you know, I think a little bit more. And one of our things our Agile Leadership Labs is attempting to do is focus a little bit more on—how does this change the leader, right? What I did appreciate—you know, a couple things that you tied into there. One is—they talk about—don't go alone, right? This is not a venture you can do by yourself as a company or as a leader. And we definitely believe that, right? We're looking at partners we're bringing in. And we'll be introducing a couple of our senior leaders, advisers, who live between AI and leadership. And we've involved them, right? We're bringing in digital partners. We're bringing in technical experts and AI experts into this conversation. And I think one of the things they said about leadership is—you've got to be willing to partner, right? It's an ecosystem. It's a collaboration, more than a solo journey.

Jim Highsmith:

Right. There's just so many skills necessary and capabilities necessary that no one organization—even a large organization—has got that breadth of skills. Particularly now. Because I was looking at something the other day. And a headline—an AI person, technical person, can now command up to a million dollar salary. How many organizations can get that through their HR departments?

Pete Behrens:

That's amazing, yeah.

Jim Highsmith:

And so, if you're a traditional organization, and you can't afford a million dollars for your top AI guy or gal, then you've got to go about it in different ways. So you've got to be able to partner with people. And there's a tech, like you said. There's a technical partnership. There may be a leadership partnership. And you've got to find people that are willing to do that kind of collaboration together. And that's one of the—that's why I like this thing we've set up, this cohort, because it has four, kind of, key people. And then bringing other people in, as we need to, you know?

Pete Behrens:

And connected to that collaborative approach, you know? One of the things that really jumped out to me in this report was not leaving the humanness, right? That, number one: leadership can't—it doesn't go away. Leaders still make decisions. Leaders still need to be human, right? This whole concept of the hybrid environment. We've talked about hybrid-like remote on site. But I think this is a new hybrid world now, where it's a hybrid human tech, and how do we balance that? How do leaders show up, and does that mean more emphasis on the human side of leadership, because of the tech?

Jim Highsmith:

I've got a friend who's a CIO of a fairly big organization. And every Friday afternoon, he gets his direct reports to send him ten people that are down at the lower level, and he calls them up on the phone, has a ten or fifteen minute conversation with them. And that really defines who this guy is. He goes down to the coffee shop with him and sits around and has coffee and, you know, gets into discussions. And that's how he finds, learns, a lot about the organization. But it's also this human connection, as opposed to a leader who sits up in his or her office at the top of the building. You've got to get down and really relate to people. And I think that is something that has to occur all the way up and down the organization. And so, that's one of the leadership traits. And it's not really a capability. It's a trait.

Pete Behrens:

Yeah. That's a—I think that's a good way to do it, say it. The quote that I kind of pulled out of the report was, “While generative AI changes what you can do as a leader, it should not change who you are—right?—as a leader.” And I think that was a really interesting awareness of the concept, of you still making decisions. You're still working with people. You're still—you know, the criticality of how that system works.

Jim Highsmith:

I’m glad you kind of touched on that. The last couple of paragraphs of the last book I wrote—one of the principles or values of the agile environment is individuals and interactions, which is a collaborative environment. And so, I thought, “If that's really true, then I'm more interested in who you are, as opposed to what you've done or what you know.” I want to know who people are so I can relate to them, as much as I want to know what they've done. And so, I think that's—one of the things that we have together is—we're gaining some understanding about who each other are, and that leads to a collaboration that's really valuable. And I think that's something people need to think about. In fact, I've changed my whole bio around—I've gotten several speaking engagements coming up. And I've changed my whole bio around—to focus on who I am, as opposed to what I've done.

Pete Behrens:

Awesome. Shifting from the leadership role, right? Shifting from the human and hybrid side, another principle I picked up on in the report was also connected to Agile. And that was focus. And one of the things I think, you know, I drew out here, as a quote. It says, “Don't get distracted by the 400 possible use cases for generative AI. Focus on the top five, top three, and then scale ruthlessly.” And then they had a quote that actually reminded me of you, of the strawberry jam! But their quote was, “Don't spread Generative AI like peanut butter, evenly across the portfolio.” I know you talked a lot about the strawberry jam, you know, the Jerry Weinberg quote. Talk a little bit about the concept of focus here with AI.

Jim Highsmith:

Well, I think there's all—it's really a learning journey. And I've noticed myself, in my learning journey, it's easy to go down rabbit holes, especially with this. Because there's so many rabbit holes out there, and there's technical rabbit holes, and there's management holes, and there's use case rabbit holes. And you can really get lost, so you have to go down some of these rabbit holes just to figure out what it is you don't want to pursue. But then you've got to actually come back up and set some goals for yourself, in terms of—what are you really looking for? For example, one of the things we've talked about is the difference between AI to support a functional area, like accounting or customer service or IT whatever it is. And to focus on leadership advantagement. And you can't do both. There's just so much material in both. And in the management realm, you've got to refer back to a particular use case in the real world, you know, that's customer-facing. But you've also got to look at what are the use cases that are valuable to you, as a leader? And so, leadership and management on one side, and functional areas on the other side. And I think, by splitting it like that, you can—that's a narrowing focus. Looking at a particular kind of leadership is a narrowing focus.

It was really funny. I wrote this blog, If you fail at Agile, you will fail at AI. And then I actually put in there—and I said I was putting this in there—a section of it that was actually written by an AI GPT. And I said, “This is written by GPT, and I have trained that GPT to be more like me.” So I've fed it my books and my information and articles and things like tha, so that it kind of thinks like I do. And some guy wrote me, wrote a comment and said, “You're biased!” I said, “Absolutely I'm biased!” [Laughs]

Pete Behrens:

Yeah, yeah. You know—and it's interesting, around bias, around ethics around, you know, governance, you know? And this report does get into a lot of that, right? Get—at least from a high level, I would say, right? It's the warning signs. And I see this kind of playing two ways. And even with our exploration. Like, we're developing a, you know, a coaching bot, okay? So, what happens when somebody hits a boundary? You know, it could be a safety boundary, could be a psychological boundary, could be—versus, you know, psychology versus coaching. It could be a boundary of just irrelevance, right? But it also could be one of those boundaries where, you know—are we having data that's not appropriate, right? And things like that. Are we giving advice that isn't, you know, recommended? And, you know, this is one I think was really interesting, around—you can't—the quote I remember is—“You can't delegate ethics.” Right? That has to be baked in it, talked about it, almost like the heart. And I think about, like, culture and our values. Like, we can't just delegate ethics to the IT group. We can't just delegate ethics to tech, right? It's really about who we are, right? And I'm seeing that, too, as we're training things. Like, this is—I want this thought to be sarcastic, a little bit. I want it to be pushy and edgy a little bit. Because that's who we are, right? But at the same time recognize where that's crossed the line. And this is going to be an interesting one. I mean, the G in GPT is generative. Meaning it's going to generate, right? So, how do we hit those boundary points—is going to be really interesting.

Jim Highsmith:

Yeah. And they're going to change. So, I can remember back in the day, when I was in college. [Laughs] We had a slide rule. And if you brought a calculator into class, they, you know—the instructor would get really upset and kick you out, you know. And so, for example, one of the ethical kinds of things that's going on now is—how much do you need to disclose when you’re using something to help you write something or help you develop something? Or, you know, how much do you need to disclose if you have AI generating images for you? And so—and what may be acceptable now or not acceptable now may be acceptable in the future, when everybody's doing it. I mean, I can remember going to teaching classes in the '80s and '90s, where nobody had a computer on their desk, right? They were just too big and clunky. And then, all of the sudden, people had their cell phones and had computers. And your first response as a teacher, as an instructor, is, “Put your computers away, and listen to me!” But, you know, and that's just—and same thing in meetings. So that whole ethos changes over time. And it's going to change with AI, but it's going to be, I think, even more critical here that we think about those kinds of things.

Pete Behrens:

Yeah. One of the things we're trying to do with our Leadership Lab—and something that the report really drew out—is the concept of platforming. You know, it gets us back a little bit into that tech conversation. But one of the things they were talking about is AI—is really an opportunity to leverage your data. So, number one: proprietary data is king, right? That's kind of the oil. But at the same time—and maybe the quote I pulled out of here is, “The more data on the platform, the more C-value to customers, the more customers you have, the more data you get, the better the generative AI model can be trained.” Right? So that's—it's this flywheel of data plus customers plus training. And I'm seeing that, too, with, kind of, the ecosystem we're looking at with our AI Leadership Lab. The more leaders we get involved in cohorts, the more learning that they do, the more experiments that they run, the more they share back into that system, the more leaders learn, right? And the same thing with our coaching bot, right? The more we get leaders into a coaching relationship with a bot and a coach, the more we get information about coaching, the more we train the bot to be a better coach, right? It's these platforms that are really incredible. And that excites me, I guess, in terms of an entrepreneurship, right? And thinking product and thinking service and value. I'm curious how you look at that?

Jim Highsmith:

Yeah. I mean, one of the things that talks about in the report is that these platforms will allow you to have to change your business model or to have a new business model. And you think about the evolution of the internet from about 1995 to about 2000, and a little bit beyond. We never envisioned things like Facebook or Meta or, you know, some of these other platform companies like AirBnB that came out of that. There were a whole—and Uber! There were whole new Industries built around a platform approach. Where, like, you—Uber doesn't own anything, in terms of vehicles, and they don't have employees, in terms of people. And there, you know—there are issues about that I won't go in. But it's a whole—they were connecting, service people who are providing service and people who needed a service. And that hadn't been done before. And part of that was generated by technology, but it was a business model, based on the use of technology in a new way. And who can say, five years from now, what new things will come out as a result of AI changing business models. So, I think that platform is really important.

And so, it goes back to—you've got to build the organization that's innovative and creative and adaptable, and you also have to build infrastructure that's the same way. One of the things—just to bring up again—going back to the Bayer case. They talked about the fact that they had something on the order of 1500 pages of corporate policies. They reduced 98% of it. That's the kind of thing that frees people up to be more innovative.

Pete Behrens:

Interesting. So, I've been driving a lot of the topics here. Was there a topic that I didn't cover for you, in terms of what you saw in the report?

Jim Highsmith:

Well, I think one of the things that ran through here was several CEOs talking about the fact that they don't—they're not really shooting to reduce staff. They're making their staff more productive, more effective, more efficient. And I think what that would allow is growth, without growth in revenue and profit. And healthy environments, without having to let go of people. But actually have—being able to grow bigger and to grow more easily, without adding a lot of people.

Pete Behrens:

Yeah, it’s interesting to me, thinking about that, right? In one sense, I agree, right? It's—AI is not going to replace people; It's going to augment people. But people with AI will replace people without it. Ultimately, though, I think as you go down the chain, that will replace people. because a more powerful person takes away a job from two or three people. That may be in the past. So, I do think there definitely is going to be an impact. I think this report even says you cannot hide, right? There is no place to hide in this corporate America, where AI is not going to penetrate your business, not going to penetrate your market, not going to penetrate your role, in whatever role you have, right? So, I think, to me, that's the piece people have to be aware of, not to fear, not to scare, but maybe spur and incent people. To, like, if you are not starting to think about this, or if you're kind of saying, “I'll wait,” it's coming at you!

Jim Highsmith:

Yeah. If you look back on these major transition points, between industrial work and knowledge work and innovation work, every one of those caused some people to lose jobs and some people to gain jobs. And so—and the difference is education and training. How do you get those people that no longer have a job—how do you educate them so they can take one of the other jobs that's still available? So, I think one of the things that's going to be going to impact is our education system, which is not set up to do that kind of thing, right? Now, there was some talk about—I forget who it was—talking about business schools. And that business schools are teaching a less traditional approach to management, not a new approach to management. And so, I think our education system has got to step up to this, too, because it's going to be even more pressure.

Pete Behrens:

Well, and if they don't, somebody will disrupt them. They already are. Speaking of education, speaking of awareness, one of the things, maybe, I'll say in closing here is the AI Leadership Lab from Agile Leadership Journey is really a place for leaders to come and feel safe to experiment, to share, to learn. Not necessarily from a come-to-a-class. Because I don't think, really, any classes out there today—they're temporary, right? They're just, kind of, what is right now. I look at this more as a—sharing our story together, like on a hike. And we're better together.

Jim Highsmith:

I like the idea. One of the things I've liked about working with you guys is the idea of a journey. And it's a journey. It's an evolutionary journey. Sometimes we know what direction we're headed. Sometimes we don't know exactly what direction we're headed. [Laughs] But we kind of have an idea of where the peak is. “But the one we want is three peaks over, behind, and we can't see it yet!” And so, this is probably more of a journey than I've been on before, but it's kind of exciting.

Pete Behrens:

Well, it's a fun one. It's a—yeah, if you like adventure, it's a fun one. There are a couple of opportunities to get involved with what we're doing. As Jim mentioned, we've started our first cohort, which is our core advisory cohort, which you'll be introduced, through the podcast, to some of the other adviser leaders. We will be having a webinar coming up here in April, May. We'll get that on the website shortly, where you'll get to meet those those leaders. There's an opportunity to join a cohort. We're actually forming cohorts. These are professionally guided cohorts. Not professional from an AI expert, but professional from a facilitator and an expert in leadership to help facilitate this dialogue. But then there's the platform, that community behind that, that we're really leveraging to build up over time. And then, finally, maybe just call out our partner, the World Agility Forum—I'm sorry! Renamed, this year, World Management Agility Forum, specifically focusing on management and reimagining management. And they've been incredible to work with us and give us a platform at their conference. And this is going to be in September in Lisbon. I highly encourage you to consider that event. We've got people like Steve Denning, Heidi Mueller, a lot of thought leaders in the world we're going to be showcasing. And our leaders are going to be showcasing some of these experiments, sharing that in the public platform, going into deep dives, going through master classes around some of these constructs. So, look forward to maybe, you know—reach out to us! We have a place for you to sign up if you'd like to learn a little bit more about what we're doing.

But, Jim, I just want to say thanks for sharing this report and sharing this conversation with me today.

Jim Highsmith:

Thanks! It's been—it's interesting. As of the first of the year, I've considered myself unretired. [Laughs] So, I'm working as hard as I ever did! But I'm really enjoying it a lot. So, working on leadership and particularly this AI explosion has been quite an experience.

Pete Behrens:

I loved your comment: “You have to retire from being unretired.” Like, yeah, you're going back-and-forth. Well, what it shows is your creative mind, your constant curiosity, and your willingness to explore new topics. And, you know—so, I just appreciate you being a sparring partner with me.

Jim Highsmith:

Thanks!

Pete Behrens:

(Re)Learning Leadership is the official podcast of the Agile Leadership Journey. Together, we build better leaders. It’s hosted by me, Pete Behrens, with contributions from our global Guide community. It’s produced by Ryan Dugan. With music by Joy Zimmerman. If you enjoyed this episode, please subscribe, leave us a review, or share a comment. And visit our website, agileleadershipjourney.com/podcast, for guest profiles, episode references, transcripts, and to explore more about your own leadership journey.