AI Advice for the Confused CEO

I'm Rich Ziotti, and I'm Paul Ford. And this is the Aboard Podcast. That's right. It is about how AI is changing the world of software with a little bit of a focus on business to keep it exciting and cool. And I am one of the exciting and cool co-hosts along with Rich and we're the co-founders of the company. Richard, by the time people hear this, the party will not have happened. So we should tell them how to come to the party. Last minute velvet rope. We might let you in. We might not.

Unfortunately, because we're opening a new office and there's only so much space. We would love to see you and you are welcome to visit. We just can't violate fire code. But anyway, check out Abort.com. Let's get into our podcast. You ready? You ready to talk? Let's do it. so you know the last time we talked and we don't we try not to have too many cliffhangers but But we're trying to give executives good advice.

about what to do with AI. And the guy from Klarna is like, man, you got to use some AI. We're not going to hire anybody. And then eight months later, he's like, actually, we're going to hire lots of people and AI didn't quite work out and the code wasn't good enough. So it's a confusing time, and for people who don't know a lot about this, we recently went and talked to a big group of executives, successful entrepreneurs,

And there's not a lot of like... A lot of confusion. There's no instinct, right? Because it's so confusing. You either have people telling you that artificial general intelligence is around the corner or whatever. We've belabored these points enough. So I thought what we could do, what we're talking about is like actually coach an executive through the journey.

oh yeah you know people charge you're supposed to go to utah and they charge a lot of money for that you're going to give it to them for free well yeah because we're not providing any skiing Oh, yeah. Exact's always like when there's that little extra, like that spa. It ends at four. Yeah. And then you go do other stuff. Have you ever been around the really, like the big time CEOs, their skin is so well tended.

yeah yeah it's like a garden it's like they just yeah it's like they have a skin it's creepy though like have you seen larry ellison recently i dream actually and he appears to me in a cloak and he's the ceo of oracle He looks like my aunt. Let's not talk about his face. He might buy our company one day. My aunt is very beautiful. He might have had some work. He's about 98 years old. Five steps. Okay.

So let's, and let me be clear, this is not necessarily the most flattering version of executive leadership. flattered all the time let's take a good shit on them here come on so the first thing that happens is they're watching like cnbc or fox business Or if they're smart, they're watching Bloomberg. All right, okay. and they hear probably a competitor or someone in a related industry or an analyst is investing 300 million dollars

in AI. We're seeing $3 trillion in opportunity here at some giant bank. And so Goldman is buying Snurgle Blacks. It's just sort of whatever. All of it. Can't wait to see what the AI transcript does with Snerglebox, the AI S-N-E-R-G-L-E-B-L-A-X. There you go. I'm just trying to help everybody out. Go ahead. Okay. So you hear about it. You hear about it. Now what are you going to do? What are you going to do?

You're probably going to ask, what company do you run, by the way? Is this a big public company? Let's make it pretty big. Sure, sure, sure. What do you guys actually do? You can't be too tech. Can I use a real company? You go for it. Dick's Sporting Goods. You are the CEO of Dick's Sporting Goods. Yeah. Actually, wait. I think that guy might... Choose another one. Okay. Um...

I think there's like a thing there. I just don't want to get it. Frito-Lay. There we go. Not a problem. Not a problem. Okay. See you. Okay. As far as I know, there's not going to be any like blue sky chatter about Frito-Lay. Okay. So you're at Frito-Lay. You're sitting there. You're having your breakfast Frito. Yeah.

You're dying. I'm putting milk over Fritos. Oh, it's so bad what's happening to you. Oh, my gosh. Okay, so, yeah, and we find out that... You're probably sour cream and onion ointment onto your face. Yeah, but that's... PepsiCo. PepsiCo. I think they own Fritos. Let's assume the potato chip company across the street lays. No. That's Frito-Lay.

What's another one? Wise. Is Wise still around? We're learning something terrible about the food industry right now. It's one company. Utz. I think Utz is still. Utz. Utz. Utz has decided. that they're going to use AI to come up with their next 10 flavors. Okay, you've heard that. You've heard that. Yeah, and they have accelerated... Customer testing.

and surveying so that it's 10 times faster so they can get things to market much more quickly. So they're really leaning in. I mean, frankly, to me, that's hurtful if I'm running a competing chip company. No, speed.

efficiency, innovation, right? Those are the things that freak people out. In my head, I just went, wow, I spend... know 14 15 million dollars a year on on crunch and so what what is okay you want to keep going or okay so that's what you hear this is part of the part of the dream so you're like you're getting your bearings yeah okay

Now, I think the second part of the journey is you talk to your people and maybe somebody's coming to you in the company. You'll call like your head of potato chip innovation and you'll call your CTO, your technology people. That's a classic move. Like, Hey, Are you guys thinking about this stuff? Get your sour cream guy. Get your onion guy. Get your barbecue guy. I've flown close to the sun. I've dealt with some very... I've reported directly to some very serious, high-powered...

like CEOs. What ends up happening is they'll send that signal out and then the executives below It becomes like a little project. prepping the messaging and the deck and the memo for that meeting with the CEO. He's giving you 30 minutes next Thursday. All hands on deck. Your job is now. You thought you were the director of toppings. Yeah. And your number one function in life was just to get enough salt. And your best.

PowerPoint guy is brought nearby. You're telling them to drop everything. We need you for a week. You're figuring out how AI This is real. This is real. This is very real. The whole company, hundreds of thousands of dollars of executive time. are going to be spent to make sure that they show him or her that they are on top of this innovative moment like this this moment this this

Game-changing moment. We're seeing this. Maybe they're even calling some consultants. That's right. Okay, so now they come in and they present you. Now I'm going to skip ahead. We can talk about the presentation in a minute. At the end of the presentation, if you're a typical CEO, you go. I just don't say it.

Absolutely. That's your number one move. And one of the reasons I'm doing this particular narrative is that a lot of our listeners are downstream of all of this. And they're like reading... hacker news or they're actually using these tools and then they're getting the worst signal from their company saying like I don't know maybe maybe not like things are moving around like when you're way downstream of this but this is all that is happening it's like the person

who is in charge of making sure that enough people eat crunchy chips and advertising them on the Super Bowl and so on and so forth, is getting a lot of mixed signal and is incredibly suspicious because everything... One person said it's going to save $20, $30 million, but it looks like you have to spend $20, $30 million. So why bother? Yeah. Okay. So that's where we are now. But, okay. Are you ready? You ready, though? Yeah.

status quo. That lasts about a year. What the hell is everybody talking about AI? We do potato chips. Calm down. Board meeting. what happens in the board meeting i mean the board is first of board meetings i've been to those two pretty big ones too um They are a particular dynamic where that That CEO is in a very different setting. I'm generalizing, but let me generalize for a split second here. Because the board, and depending on the governance rules and whatnot,

They essentially hold his or her fate in their hands. They can vote him out. They can actually write a memo to the investors. We mostly hear about sort of... boards that are kind of like puppets right and so like elon musk board like obviously elon musk is it's going to control that board the exception is the board that has no control with the out of control ceo but that's the biggest news Most boards are pretty boring, very senior people.

who are the only people in the company who are related to the company who can actually yell at the CEO. Yeah. Yeah, I mean, a lot of times a board seat is given because like a fund invested a billion dollars in your company, they're like, you've got to give us a seat and we'll make that investment. And if you don't turn it around and get me 25% of my investment, it might replace you. That's actually the deal with the board team. The board members A lot of them are... Um... Have a lot of time.

It's a read. watch videos and learn about this incredible moment in it so let's be clear too the hyper wealthy hyper successful they love a good report they have kind of consultants on tap like you go and get you get water out of the tap to drink That's what they get with PowerPoints. And look, the executive, the CEO of that company, they know they have to put 15 minutes on AI.

at the board meeting they know that already so they already have a team of people that is like i gotta come to them with a strategy and like a budget I've got to tell them what's up. So let's be real. All of their hand-picked selected leaders who they are supposed to empower have come to them with exciting AI strategies, which they have absolutely shocked.

That happened about a year ago. They've shot them down. But now they know that the board is going to yell at them, and it's the one time when they actually have to be humble and not annoying. That's right. And so they get their hand-picked team of consulting types. who despise the sea level people who actually do all the work. to put together a nice package. We're painting a hapless CEO here, which is, I mean, look, let's be real.

CEOs got there because they're probably really smart and and they're probably oftentimes curious and they're probably reading up. They're not smart about technology often. They're smart about people. They're smart about P&L, they're smart about tax, they're smart about distribution and supply chain, but they're not actually in there figuring out how an LLM works. I come from the consulting world. Boy, do you. And let me tell you, we are in like one of the juiciest moments in consulting.

There is anxiety. There is excitement. There's a new technology that people don't really understand. I mean, what if we still ran an agency? It would just be like, just, I mean, we're seeing a lot of people ask for advice rather than ask to buy something. There's a lot of nervousness. And so, look, it's a very fleeceable world, right? A lot of fleecing is going on. And why is that happening? It's not because people are not smart. I think it's because...

This has been pitched as, like, this is changing everything forever. It's over. Like, there was the past and there was this, so there's that. But it's also being pitched as, as something you have to get on board with or you will be left behind. And that is It's the classic market dynamic of greed and fear. It is a moment right now. And here is

The like one bit of advice we can tell all of those anxious CEOs out there who are trying to come up with a strategy and whatnot. Nobody knows what they're talking about. Nobody has the answers. Nobody has the strategy. Those thick white papers you're seeing get pumped out of the big consulting firms. It is absolute fluff right now. It's too early. We can really validate that. We went and gave a talk recently to a bunch of business leaders in an enormous institution.

And they brought their expert who truly knew a lot, like a real, had looked at thousands of companies, had thought about, had talked to the leaders of the big AI companies. To his immense credit, he looks at us, he's like, these guys don't know anything, and neither do I. Yeah. I think we know about as much as anybody, and we still don't really know where this is headed. Yeah.

And so you end up hiring these consulting firms. They're like, I need a plan. That was step four. You got there before me. Oh, shit. Yeah, no, this is great. It means that my whole strategy is good enough to just go under the table and take a little nap. You go outside because it's safer to go outside, especially with a big brand like a McKinsey or a Deloitte or whatever.

I will notice that you're defending CEOs and you're the CEO of this company. When I was the CEO of the last company, I don't think you would have stood up quite so fast. I wouldn't have. No. No, I would have shot you down. We'll sum this up. And look, I think... I think I want to make a distinction. And I want to make this distinction by defining an often used abused term.

and define it in as plain a way as possible, right? There's two things a CEO, someone that is making big decisions worries about, strategy and execution. What is strategy? Oh boy, this could get real dry real fast. But I'm going to give you like the dumbest definition of strategy. Okay, that's smart actually. Putting some thinking in about what you're going to do before you do it.

Very often strategy does not accomplish that, so I'll take it, right? That's the most base definition I can give you for strategy. Execution is doing the thing. I would also say with strategy, like, it's very easy to say what you should do in a very, it's actually, it's able to be turned into execution. Good strategy. Do you know why strategy exists? Why? because When you're thinking about doing the thing, and then you're changing your mind, it's cheap. It's free.

It's free to spend more time thinking through what you're going to do. If you're already executing... Not if McKinsey is involved, but yes. The larger idea is true. That's totally fair. Execution is like, I've decided I'm going to tackle the Southeast.

Yeah. And then you find out five months in that nobody wants to buy your product in the southeast. You have armies of people down there. You've spent money on marketing. These are fried corn chips. They're going to buy them. You're going to be okay. That's true. This is very true. I don't like corn chips. Really? Oh, it's terrible. What about like crumbled on things? I've never done that. I don't know. I don't live in a shack like you do.

crumbling corn chips on things. We digress. You haven't lived. You're just like, eh, with my lamb. Anyway, you go ahead. Keep talking. What is happening now is everyone is arrogantly pitching The thinking? before you go do something, A, which no one can really do adequately yet. I mean, we are able to be in the questions industry because we actually build things, but most people who don't build things are in the answers industry.

But I think there's a bigger issue. And I think what's happening is because of this anxiety and fear is they're skipping the thinking part. they're just going into execution they're buying stuff they're hiring people like the chief ai officer has become a thing i mean you remember before we've had chief metaverse officer we had chief blockchain officer you just go in yeah right and the truth is these are big companies with a lot of budget and so they go in and the truth is

um this stuff is so murky still and still kind of sorting itself out and but they've already like we're gonna build them all right here you know right here we're gonna build one right here and then the construction starts and that's happening

And people are going to be walking it back because they're going to realize that the payoff isn't there. You know, one of the big tells with all this, why isn't it ready? I'll tell you why, especially for big orgs. When I say software methodology, what's the first thing that pops in here? Um... Architecture?

Sure, or agile. Yeah, some process. There are these processes. People learn them, they get certificates. The processes run in a recurring basis. They run for years. And they cut the risk of software delivery because software is... Partially what they do is they enforce a strategy phase. You have to go think. Then you're allowed to talk. Who can talk? It's phased out. It's phased out and it's iterative and so on and so forth. There is nothing.

for the new ways of working. There is no AI process that's actually demonstrable that works that everybody agrees on. There's 50,000 different ways to use these tools to get certain outcomes. Yeah. And until you anchor things into reproducible processes and can land them in a trainable way into an organization, no big org can metabolize. Small ones can because they're like, we'll take a swing. I got my work done. Cool. Good for me. I mean, I think you're nailing what the big arcs can't do.

You're nailing that. So let's give people a piece of advice. If you are an executive, first off, reach out to us because we're about as good as it gets when it comes to AI. That's not marketing. You wouldn't think it. You're dressed like you're on a safari. I'm just showing up. I was thinking war correspondent. Very good. You've got to wear this on. Yeah, I have those.

Two tips. Let's end it with two tips. Okay. Tip one, do not start any conversation with, when you talk to your team and your leaders and whatnot, with what are we going to do? What is our AI plan? Don't start a conversation that way. That's the cart before the horse. Like, what are we doing about AI? Terrible way to start a conversation. How do you start a conversation? You start it like this.

I'm seeing and hearing that you can do things a lot faster and a lot quicker. Can we get Support response time from 40 minutes. It's a 20. I mean, be a customer is what you're saying. And go back to the old school boring metrics that you care about as an exec. Can we make it cheaper to get the box from the West Coast to the East Coast by...

with these new tools. I don't know. Go figure that out. And tie incentives to sort of the classic metrics that you care about as an exec to go and run into is like I heard there's a new Cardiovascular surgery tool. Doc, are you going to use it? You would never ask your doctor what new tool they're going to use. It's kind of like saying, what are we doing about aluminum? Yeah. There are two failure states.

And one of them is obvious and one of them is really sneaky with this new technology. So failure state one is, We went and we tried to use it and it turned out not to be that good and we don't want to use it.

because that's like a classic and then you're going to miss out on a lot of the growth and the weirdness that's coming because you didn't think in that way you didn't actually measure that way you're just like ah we rolled out some ai stuff and it wasn't that great and now we're going to go kind of like We might keep a little of it around. The trickier one is the mild early stage success.

You did something tactical, and now that you've seen that success... blow it up times a thousand and that is actually in some ways risky because I think we're hitting a phase now where people are like wait this didn't fully work out and now I think we're going to hit a phase because the tools are getting better where they go like

Oh my God, no, actually it is working out. And then they're going to write that memo saying we're now an AI company no matter what. And every potato chip will have AI in it and like, et cetera, et cetera. They'll jump to it. They'll jump to it because they want to be visionary and they want the market to see them as visionary. And now nothing has changed. It's still going to be really hard to finish.

And it's still like, like, Back to where you are, like, hey, is there a way that we could save 90% off of the way we're doing engineering in this particular domain? That's a classic executive, like top of the heap, like make this happen better. I need, can we get renewals up? From 18% to 26% or something like that. Big enterprise software installs are creeping monsters that destroy your company. There's probably $30, $40 million in big companies going to Salesforce and ERP tools.

Okay, sure, go assess all those. They become people's domains and they defend them, but... A lot of them should probably just not be there in the future. Can I throw a bonus tip? Throw a bonus tip. Let people tinker because I'm talking about it in sort of classic efficiency ways and like cost cutting and whatnot.

But I do think that if this is like the ultimate hacking tool and I think, you know, people have innovation groups and like, you know, teams that like are supposed to play around and try risky things. They should, because there are opportunities to like, look, I think I can cut five steps out.

if we do it this way that takes time and thinking but let people tinker because this is it's too early i mean we can go back to something you said in our last podcast which is that this is a kind of a grassroots technology which sounds weird because it's such a big platform You have to encourage grassroots thinking that people solve their own problems. We've seen that in our own company where we've led engineering kind of.

explore and come to us with new approaches sometimes. Well, because it's still early days and there's no teachable, repeatable processes that you can use to get good results in a predictable way. But if you want to take a swing, you've got to let people play.

What do you like about corn chips? It's like ask me what I like about my children. Really? Do you love them that much? Like which one? The curvy ones? The ones that are like curvy? You know what I do? Frankly, I stay away from them. They're not safe for me. But I love him that much. Well, no, but I mean, have you ever had like a dipsy doodle? And it just, it hurts.

it's so much salt it hurts your face yeah and you're like what what happened here that is like a neanderthal caveman kind of reaction that that kind of food they're like we jam so much calories and poison into this that your brain won't be able to process anything else yeah you just Suddenly you are in space floating on a corn chip. Calm down. And then they're like, no, hold on a minute. Did you dip them in anything? No. And then they say.

How about that plus Diet Coke? And then they're like, wow. Oh, yeah. And then they're like, hey. This podcast is brought to you by America. And then they add, they're just, you Neanderthal garbage, you haven't even tried anything yet, and then they dust it with that barbecue, fake barbecue dust. It is dust. It's dust.

It's sawdust. If you could combine that with one parliament light, I would just, a column of light would open up ahead of you. There goes all of our marketing. That would just be it. Yeah. Out the window. Up into the Frito-Lay mothership. Cool.

You're in a motel. This is all happening in a motel. Sadly, this is where it happens. You're like the bad business travel. End this on an up note, Ford. You're a thought leader, for Christ's sake. I know, but let's be clear. When you're in that Sheraton... It was right. Like it is Dipsy Doodle time. Fine. It's Dipsy Doodle time. But not at home. We have an agreement. Okay. Okay, friend. All right. Thanks for listening. Come to our party. There will be no Dipsy Doodles. Yes.

Have a lovely week. Give us five stars on the podcast. Please, God. Goodbye, beloveds. We'll see you soon. Have a great week.