Built to shift:

Rick Cheatham: And it really is so funny because I think the concept of just shifting fits a lot more than what we historically think of as change. The, the, you know, the ability to basically pivot as we go based on new knowledge versus the traditional view of change that hey, market dynamics are different. So we’re gonna go press the reset button.

Jessica Skon: Yeah, I agree. I happened to watch one quarter of the basketball game last night, um, and one team dominated after halftime and the other team didn’t so much. And that’s an example. One team shifted and shifted successfully and the other one didn’t. So there’s daily shifts and then there’s big strategic ones as well.

Rick Cheatham: Well, so if we can, let’s, let’s go back to your big three and, uh, have you go a little bit deeper for us because, um, even. Your first comment about culture makes me think, and you know, I’ve had the pleasure of working with you now for almost 19 years, believe it or not. Uh, you know, makes me feel old just saying those words out loud.

Do I feel like I should only be 25? Uh, but, uh, anyway, I know for us at BTS culture is. One of the things that we credit with our success, but when you talk about culture shifting fast, it’s a little bit hard for me to understand because I think of culture almost as identity and how does that, how do we build cultures that are not only strong, but can shift

Jessica Skon: adaptable?

Yeah. And I think it’s not only speed, but it’s speed at scale. And I, I think even I’m thinking about like the BTS culture is very grassroots oriented, frontline empowered, and so we may get pockets of brilliance, but then the question is how do you scale that? Right? And, and really thinking about that. Um, but anyways, going back to answering your question, if I think more from our, what we’re seeing from our clients and across industries, um, one particular standout.

Company is a software, global software company. They have about 45,000 people on the go to market side of their business. And the way their CEO runs the company and kind of their overall operational cadence is they tend to shift what they want their sellers to talk to customers about on a quarterly basis.

That’s on average, um, what the experience is like working there. Right. And if, if that’s. What’s required now to stay relevant and to be helpful advisors to their customers and pivot their products on a regular basis, then the question is, how do you get 45,000 people to come back from halftime and play a new game, right, or run a new play and have the confidence and the capability to adjust their conversation and show up differently to their customers.

And, and what this particular company does, which I find, um, really impactful and effective, is they lean on. Super high fidelity micro simulations to train and to allow all of their 45,000 people to practice the new place. And some of them they practice by themselves. Some of them they practice together as a sales team that calls on the customers, but they wanna ensure that they give people the chance.

To immerse themself in what that conversation is gonna sound like, or what the proposal’s gonna look like, or what the New deal contract is gonna be structured as, and practice multiple times so they get over the hump from sucking the first time to being a little bit better, to then being so confident that in the moment with the customer, you can just be yourself, but show up and lead them in a new way.

And I honestly can’t think of a more powerful, practical way to ask 45,000 people to feel prepared. To show up differently than doing that. It’s very basic, right? It’s very basic in its concept, but it’s unusual in accepting that as an important step in how you get people to change.

Rick Cheatham: Well, and it’s funny ’cause you almost said it as a throwaway comment, but when you said, and it allows them to show up and be themselves in front of their customer.

Because I think that’s really where a lot of that cultural element comes in because they’re doing something different. They’re shifting to a new way of potentially customer engagement, but because they have the background, they’re able to show up the way that the company wants to represent the, and the company wants to be represented in the way they want to represent themselves.

Jessica Skon: And it’s impossible to ask people to try something new and be confident and show up authentic without giving them the chance to prepare and practice it. No other organization on the planet would do that. So why would companies do that with their people? Um, you know, thinking about other important ingredients for adaptive cultures at scale, I mean, one thing that comes to mind is a culture that, and a company and leaders that are comfortable with transparency.

That fight the natural tendency to only share information with the top of the house and then hope and wonder if it trickles down. Um, I can think of another, it happens to be another tech company, but they, when they were shifting to have product releases much more quickly, I. They realized that they needed to do open mic during their product debate sessions or when they were talking through which priorities should we prioritize now or in the long run, and by opening it up to the entire organization, what that did is it provided shared context.

And the importance of shared context meant that when the market told them that priority number 30 had to become number one and priority number two had to drop to number 50, that the egos of the teams involved in that work didn’t take it personally. They understood because they had the full context when the priorities were set, and now they’re involved in the context of how the market has shifted.

And if you can do that for people, there’s a much better chance that they will release talent and they’ll accept talent overnight. ’cause they know in another month or in another quarter or another six months, it’s gonna change again. And I, I just think, um, cultures that are comfortable flattening hierarchies, sharing as much as they can, making sure that the language is non-corporate speak, not strategy speak is a form of inclusion and that shared context, people will move, they’ll pivot if they understand why.

Right? Um, another cool one that I, I learned recently that I’m gonna use inside of BTS is, um, you can’t really have an adaptive culture unless the culture and the employees in it love the red. And I learned from, um, a CEO of a CPG company about six months ago that in her meetings they cut the watermelon.

Okay. It’s just so great. So the watermelon, unless you cut it only shows green. So in every meeting she wants that, they want, she wants to talk about the red. So it’s cut the watermelon meetings. And there are sometimes when you’re having a meeting and the data shows all green. Mm-hmm. And if that’s the case, you know, they’re not pushing hard enough.

They’re getting a little bit lazy, taking things for granted. Life’s getting easy, right? In other meetings, if you’re showing only green, probably the bad news is being hidden somewhere. So every meeting is about cutting the watermelon, and when you do that, then everyone can lean in and help each other on turning the red into the green, and that means that you get movement and inspiration and energy around the bad.

Right. And I, I, I think without a cut, the watermelon culture, um, perfectionism and fear creeps in, and that is the antithesis of speed and adaptability.

Rick Cheatham: Um, yeah. And, oh, sorry. Yeah, go ahead.

Jessica Skon: No, go ahead.

Rick Cheatham: I was just, I was just gonna say, I think. That more traditional view of the way we move fast is to put a couple of executives in a windowless conference room and have them determine for all what is happening.

That could possibly be a little quicker from a decision making process, but it, I’m assuming that what you’re finding in these conversations and even what you just described, the implementation takes four times as long. So by having people connected and involved, speed and productivity happens faster by not having people spending potentially days making things pretty for internal meetings.

Trying to, trying to bury the bad news, uh, makes you better, smarter, faster. Am I getting it?

Jessica Skon: Totally. I’ll never forget, um, I talked to a 20 year veteran in the tech industry in one of the biggest global software companies, and he described finally realizing what it meant to be an EVP in his company and how different it was and what he thought it was for a long time.

And I’ll share how he described it. ’cause it’s exactly what you just said. He said for the last 19 years. As an EVPI would watch the market evolve, hear data points from the team, and know that in the fall I would get together with my peers and we would set the priorities for the next year. Small group of us in a windowless room, although they’re pretty rich, so it’s probably really nice on some mountaintop.

But anyways, and then, then they would allocate the actions and then the troops would march. And he said, now what I realize my job is, is to create the culture and the environment so that those closest to the customer can pivot real time based on what the market is telling those people.

Rick Cheatham: Mm-hmm.

Jessica Skon: And he had to really think long and hard about if that’s the culture that he was responsible for creating.

What does that mean for him and his role? And the biggest change for him personally was it meant that it would be impossible to be able to be the person in the meetings who had the answer. And getting personally comfortable that he could still have a leadership legacy and, um, respect from the team without being the smartest person in the room.

And as soon as he got comfortable with that reality for himself, it was a huge relief. A huge relief. So then all it was is about setting big picture intent. And as soon as frontline sellers or engineers or product developers had an insight that meant they should pivot, creating the. Calms and the teaming to be able to pivot quickly and, and back it up and continue to take share.

But his way of describing that I think is, um, quite. Universal and common from a more traditional, more hierarchical culture into one that’s truly frontline empowered. We were working with a big healthcare company and they were trying to become more frontline empowered, right? And what does that really mean and look like in the day to day?

And the executive team was saying, look, let’s just come up with some low hanging fruit, some symbolic things that we can do right now. That helps to reinforce that we mean it when we say we believe we have smart people in the company and we trust them to take on more, you know, responsibility and do the right things.

And one of the things they came up with right away was, I remember the CFO said, you know, to hire somebody into the company requires 13 signatures. How about if we just cut that right now to one, to the person who has the open rec? And they all looked at each other like, well, could we do that? And he is like.

Well, who would do it if we can’t do it? So all of a sudden, a memo went out the next day, and that was the first symbolic thing they did. Didn’t cost anybody anything, but certainly sent a message that they’re serious about the cultural shift that they’re trying to drive. I think coming up with those really practical, easy things to do is, is the responsibility of leaders, you know, at all level and then actually getting them done and, and, um, making it happen.

Rick Cheatham: Well, it’s funny because when you start talking about frontline empowerment and. How that can really, really change the trajectory of an organization. I started to think about your second point around reinventing how work gets done and you know, whether it’s a downturn or whether it’s a major shift in ways of working.

I think traditionally most people try to take power decision making away from the frontline and consolidate it down to few when we’re trying to really shift or we’re trying to make something. Happened. So this really kind of flies in the face of that traditional thinking.

Jessica Skon: Yeah, that traditional thinking hurts my soul because who would wanna work?

Who would wanna work with a leader who thought would feel like that’s the best thing to do? Right? Even the military shifted to an agile culture and operating model. So if they can do it, you know, probably so soaking companies. Um, but yes, the um. The, the varying corporate culture’s response to. Uh, how much freedom should we give our people when it comes to tinkering with the large language models and AI in general?

I think you can probably see the full swing. And actually for that one, why don’t I just reflect on the BTS journey, the last two, that’d be great. Two and a half years since OpenAI was born. Um, I’ll never forget one of our partners when this all became a thing. Right. Um, was advocating very strongly. He’s like, please, chess, please, please, for once can BTS let go of our decentralized democratized grassroots culture, which was very difficult to get any one thing done and let’s go central on this.

And I was thinking it might be right, this could be the time to do that. But, um, what problem are we solving? What is it that we would be driving centrally? He’s like, I don’t know yet. I’m like, yeah, I don’t either. No one does. Until we know the problem that we’re gonna solve and have a big central push behind it, we’re gonna go grassroots and we’re gonna let the people figure out.

How powerful are these tools? How relevant, relevant is it for their role inside of BTS? How cool is it from a portfolio of services perspective? Do they wanna bring to their clients? We don’t have the answers. I certainly don’t have the answer. And you, Mr. BTS partner also do not have the answer right now.

So if we don’t know where we’re going, why would we do a top down approach? So step one of what we did was grassroots, tinkering. I chose not to proactively provide licenses to everybody in the company. I thought that might be wasteful. It could be. It could have been a wrong decision looking back now, but I think it worked out okay.

What we did instead, as we said, when somebody or a team wants to have a license, they get it. And in that dialogue they can explain why they wanna tinker with it, what they’re excited about it. You know what. Ways of working, they think they’re gonna apply it to, so there at least was a dialogue and we were getting smarter about why the people were using it and what they were, what their hypotheses were.

So we did the first 12 or 18 months with just global tinkering. Outta 24 offices, 18 months in, only two had 100%, um, of their team members using ai. And we had, I think, nearly all of our practices except maybe one who are also tinkering with it and in and finding both unbelievable productivity gains and also plenty of stories of, oh.

This large language model is not good at math. We can’t use it for our simulation. So we were, we were hearing both stories of, of super productive and bad. But what I would say is there was a general uplift in joy in the work and for the first time in my life, hearing people say my work is more fun because of software was a first.

So we should just kind of honor that and chuckle at that reality. ’cause every other software’s been like a root canal in terms of getting it implemented and used. Um. But after about 18 months, um, and this is, this is a little bit embarrassing that our best guess as a leadership team, based on what we were seeing from the global team, is that we would get a 1% productivity improvement across the system.

In fact, I believe that as recent as last November, fast forward now to May, and I believe fully. Because of data and what we did for phase two, that that is a gross underestimate. Sure. Right now the consultants are saying, on average it will be a 10% improvement, which is enormous. If that is true, it is a historic moment for BTS ’cause it means we can grow with essentially the same headcount.

And in some of our other operational roles, the productivity gains are even significantly more. But what I, the thing I’ll share that what was important after grassroots tinkering, right, for about 18 months was how do we actually. Globally drive adoption. Now we have enough wins. We’ve written over a hundred prompts.

You know, the team is embedding it into their client work. So how do you get the other 80 or 70% of the company to get to the same place that the early adopters were? And this is a question that I hear every CEO questioning right now and trying to figure out what is phase two. What we are learning so far is that it is not enough to just do additional training and send nudges.

What the teams want and need is two things. Number one is an AI super user who is basically an on-call coach advisor who can help them write the more extreme prompts and just get used to using these new tools in their work. And if you have an AI super user who can be involved in project kickoffs and be on call or on demand for the teams, the quick adoption is like, it’s overnight, it’s within a week.

Or two of the teams. Um, the other thing I would say that is a key success factor for the offices who got full adoption was just the leaders who lead from the front that aren’t afraid of it, that dive in and are aren’t afraid to be vulnerable and have it be messy and learn from, you know, anybody in the office and add into their office meetings.

What did you try? What didn’t work? And what worked? So that’s where we are on our journey. And I would say for us the last six to eight months is a different degree of both internal productivity from what the teams are telling us. And, um, really cool, um, tech, I would say next level options for us across our simulation portfolio.

Rick Cheatham: That’s, that’s great. And it is funny ’cause I can, I can tell you as one who, uh, has probably become a super user over the last year or so, uh, it has been great to just be able to try to figure it out. And I can tell you as someone who has tried to get wide adoption of a software platform. That wasn’t done in this way.

It was hellish. So first firsthand lived experience. Well, if we can, then let’s go ahead and pivot to your third one and, and that is, uh, how do we use simulations and modeling to pressure test strategy before we invest and, and what is that looking like now versus what it’s looked like in the past?

Jessica Skon: Yeah, I, I think from the, the BTS experience of partnering with our clients, we’re seeing growth in two areas.

One is using our simulation and modeling capabilities earlier in the strategic planning process and during the strategic planning process. The other one is actually a realization around ways of work. The best way to prepare people to do that. So on the first, um, from our experiences, if members of a company are gonna spend time on the future growth of the firm, whether that’s, um, a new tam that they wanna explore or a different customer segment, or even just have a debate around what customers are valuing more and less, and what the new economics of the firm might look like in the next few years.

By far the most efficient way to do that. And doing it in a way where everyone in that meeting feels like they’re involved, that they own the outcome, and that they understand the interdependencies and trade-offs of the conversation is to make it visual. I. Also to ground them in their actual p and l resource allocation realities.

Because I’ve been involved in too many strategy conversations that without that, people are pretty harmonious. They smile and they nod and they talk big picture. And they know in the back of their minds that when they leave, they’re just gonna go run their team the way they always have. But the minute you put resource allocation and potential p and l changes or capital allocation changes on the table, you’re finally gonna have an emotional debate and.

What we have learned is the most practical way to do that is to have some simulation or modeling tools co-designed, obviously with the clients, um, financial team and business unit presidents and CEO, where everyone can just roll up their sleeves and do scenario planning together and have debates and make it fun.

But it is all grounded in real assumptions and also making the assumptions visible and transparent. So black box simulations don’t work, but. This idea is that then they can just run future scenarios, talk through it, and prepare themselves after looking at options from all different sides for the best way to implement.

I would say that’s the other benefit of using modeling and simulations and strategy conversations, is that they’re so practical that it forces you to take the conversation and tool. Then what’s our first moves if we’re gonna do this? Right. And, and that, uh, decreases the chance that you would leave with just a high level plan that then nobody knows how to implement.

So that’s the first. Um, on the other hand, we’re seeing an increased level of frustration when there’s process change or ways of working change or operating model changes that take months and most often quarters before the teams actually work differently. And in those cases I can think of work we did with one of our energy clients.

It took, it was 18 months into a big consulting project and a big process redesign, and then frustration from the BU president that 600 teams were not changing how they work, that we had the chance to start to work with them. All we had to do was to codify and visualize for those 600 teams together with the people that they reported to.

What the actual new way of working should look and feel like on a day-to-day, week to week and monthly basis. And once we had done that together with them, we turned it into a simulation, very visceral that they could then practice working this way, running meetings differently, having different debates, making different decisions.

It was two days of practice, and guess what happened after the two days of practice? They’re like, oh, this is what you mean. So it was demystified, it was made clear. They changed, and I’m not kidding you on this next part. Within three months of the new ways of working the CEO of the energy company called our account manager and just said, my business unit president is telling me we’re gonna save 5 billion in capital over the next three years because finally people are working in this way.

So, again, it’s not rocket science, but it’s kind of a measure of respect and a realization that if you don’t give people the chance to understand what the new play is and live it and practice it, they’re probably not gonna change, or you’re probably gonna get the 5% changing and that it’s gonna take another two years for everyone else to finally figure it out

Rick Cheatham: to jump on.

Yeah, that’s, that’s very interesting to me. I think, uh, you know, I, I often think about what happens in some of those. Board rooms that I’ve been in myself, uh, even before joining BTS, that it’s, it’s like, uh, the line, the witch in the word room. You pass through those doors and all of a sudden things that are possible are impossible in reality suddenly become possible.

But I, what I’m really hearing you say is what, using these modeling tools. It forces reality into the meeting room and it actually gets people to that place that they have to try it on. ’cause it is so easy to smile and nod and uh, even if you’re not being disingenuous, go back to the way you’ve always done it.

’cause that’s whats natural.

Jessica Skon: It’s also an equalizer in getting all of the voices engaged in the debate. ’cause it’s very common that in a group of 10 or 12 or 20 or whatever it is, that there’s one, two, or three people who dominate. Right. Either because of positional power or just personalities. Right? So it’s another way of, of, um, yeah, making sure everybody’s is a part of it.

Rick Cheatham: Love that. Absolutely love it and uh, absolutely love the time that we got to spend with you today. Uh, your stories are always fascinating and, uh, your insights are always appreciated. So thanks so much for joining.

Jessica Skon: My pleasure. See you Rick