In this episode of In-Ear Insights, the Trust Insights podcast, Katie and Chris discuss the future of work and how the capabilities of generative AI are changing how executives think about building a team. Learn why simply cutting staff to save money is not a viable long-term strategy. Discover the questions you should ask to accurately assess your needs and build a plan. Understand the importance of including your team in the decision-making process to foster transparency, ownership, and innovation.
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Machine-Generated Transcript
What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for listening to the episode.
Christopher Penn – 00:00
In this week’s In Ear Insights, let’s talk about the future of work and generative AI’s impact on it. There is an old adage: fast, cheap, good — choose any two. That applies to pretty much everything. If you want something fast and good, it’s not going to be cheap. If you want something good and cheap, it’s not going to be fast, and so on and so forth.
This adage applies to human endeavors. With generative AI, with enough skill and experience and things like prompting and building systems, you can have all three. You can have something that’s fast, cheap, and good. It may not be great, but it will be good.
Christopher Penn – 00:36
For example, if you wanted to, as we talked about on recent live streams, if you wanted to create things like editorial calendars or content newsletters and podcast outlines, today’s generative AI tools are very skilled at creating those things, either for a human to do or in some cases, just do it outright for you. Depending on how good your data is, this is going to change how executives and stakeholders and CEOs make decisions about hiring, about retention, about the structure of a workforce and the future of work itself.
So, Katie, when you think about a world where fast, cheap, and good is achievable — all three — by machines versus the human limitations of “choose any two,” how does that, how do you…
Katie Robbert – 01:26
Look at that as a CEO? With huge skepticism. And I say that because it, because we’ve only ever seen two of the three. To believe that you can get all three feels really risky. And so I think that executives should be curious, but I think that they should proceed with that bit of skepticism.
So, what I’m seeing a lot of executives do is open their arms and embrace generative AI with no real consideration for the long term ramifications. And so they’re just saying, “Great, let’s bring it in, let’s make some money. Let’s fire half the workforce because they can do it.” So, it’s a lot of short-term thinking, and that’s where the risk lies.
Katie Robbert – 02:26
Generative AI might be able to do all three, it might be able to do it fast, it might be able to do it cheap, and it might be able to do it good. But there needs to be a longer-term strategy. There needs to be a longer-term impact analysis. There needs to be a longer-term risk assessment of what does that actually mean for our company? What does that mean for me as the decision-maker?
Because ultimately, if I’ve been making my decisions based on only having two of the things, and now I have the three things, the way that I approach making decisions has to change. So, it really has to start with me. I’m the one who, first and foremost, has to start the change management, and then the rest of the company can get on board because it is a culture shift.
And so when I think about the future of work, when I think about how generative AI is impacting the C-suite and executives, we’re the ones who have to adapt first, not the rest of the company. We’re the ones who have to say, okay, this is what it means for us as a whole. Not, “Hey, Chris, here’s some generative AI, do your work faster.”
Christopher Penn – 03:42
Talk more about that because I’m very curious about what that means. And when you say you have to change your decision-making processes from having to choose two out of three to having all three, because I would think the logical decision would be like, let’s do as much of all three as we can because fast, cheap, and good is a great position to be.
Katie Robbert – 04:06
It is. But there’s always a down, there’s a downside to everything. And I, it’s, I’d say it’s not pessimistic. It’s realistic. And so if you’re suddenly able to do things fast and cheap and good, what does that then mean for the workforce who’s been doing the cheap? Or what does that mean for the workforce that’s responsible for the fast? Their lives, their production, their culture is about to shift greatly.
And so we always say, I always say, “New tech doesn’t solve old problems.” And so if you find yourself now in this position where you can have all three, I would suggest, but I’m guessing this doesn’t happen, the first thing you need to think about is, what is the impact to the people in my company?
Katie Robbert – 05:02
How many, if I can do this a lot cheaper than having 20 people on my analytics team, what does that mean for those people? In the short term, it probably means a bunch of layoffs, but what does that mean in the long term? And so that’s what I mean by that. I have to change how I’m thinking about decisions.
If I can only have two out of the three, then I’ve been thinking about it in terms of, if I’m looking at my team and I can choose them, and I can have them do things quickly, I can have them do things inexpensively, but I’m going to get super high quality. Now I have to think about, what does it mean to get all three? And what am I asking of them? Because I’m asking them to do something different now or I’m asking them to step aside and do nothing at all. And that’s what I mean by I have to change. And that also changes how I communicate to people.
Christopher Penn – 06:01
Let’s look at a very concrete example. In our old lives, prior to Trust Insights, we ran a marketing technology team. It was a team of 10 people, and we had one client that was paying us $52,000 a month to manage their content creation and marketing programs. This also had one full-time employee, one fully dedicated to the project, plus one executive stakeholder, plus a team of 150 independent contractors.
The contractors were each paid $150 to write a 700-word blog post on a specific topic using a specific keyword. And those blog posts were okay. They weren’t great. They weren’t amazing literary pieces. They were really boring things like, “Here’s how to make this report in Google Analytics,” and stuff. The blog post would take four to six weeks for a contractor to return.
Christopher Penn – 06:49
The blog posts would then be punted off to our team for editing. Our team would edit them, which would take probably another one to two weeks, and then hand them back to the client for posting, which would get staging and posting. So the overall process for a single blog post was about an eight-week turnaround for one piece of 700-word content and tens of thousands of dollars per month to create this thing.
In a world where generative AI exists, and you invest the time upfront to build really good prompts and build out a brand style guide and a writing style guide and things. And you have your content calendar, you know what you want for your keywords in your content calendar.
Christopher Penn – 07:31
You would then hand that to one, probably one person to feed the entire thing through an AI model like Gemini, for example. And then you would still need that team of editors to edit. As we’ve said many times, there is no substitute for human review. You don’t want to just put factually incorrect things online.
But now your process time goes from eight weeks instead of two, and you will cut that program’s cost maybe by two-thirds, if not more. So, instead of spending, they were spending on average about 80 grand a month. They could probably throttle that back down to like 40 or 30 grand a month. As a CEO, and really, when your CFO is nagging you, wouldn’t that be like, immediately? Let’s make that change immediately. We need to do that today.
Katie Robbert – 08:22
Oh, sure. That is super enticing. Like you’re being handed a solution on a silver platter. And I think that’s where I am still skeptical. Like, it almost sounds too good to be true. What’s the catch? What’s, what’s the thing? Where’s the other shoe that’s going to drop? And the thing about what you’re describing is, it’s a very established process. The process development has been done. The, the shoe that’s going to drop is when you decide, I want to do something different. I want to change the process. So now you’re at the mercy of the machine, and you’re at the mercy of having people on your team who know how to maintain and manage and update the process development.
So, in this example, their goal was to basically own search for these topics, for these keywords, to be the authority so that anytime, “Hey, I’m looking for, IT security,” whatever the thing was, this brand would come up first because they were dominating in terms of content creation. To your point, it was good, not great. It was good enough. If they changed their strategy now, everything that they just built, everything that just, they just optimized, means they have to change that whole process.
So, the stable of 150 writers, they might need to say, “You know what? We actually need about half of those people back to do whatever this different thing is over here.”
So, yes, short term, if you handed me that solution on a platter, I would say that’s amazing. Long term, I can’t change that strategy without consequences. But what does I have to rebuild?
Christopher Penn – 10:20
Expensive and exhaustive to change a strategy with all those people?
Katie Robbert – 10:26
It depends. It depends on what it is you’re changing to and how you’re approaching that change. If you’re saying, “Scrap everything, start over,” that is incredibly expensive. If you’re approaching it in a more agile way, where you’re taking little bits and pieces of a time and pivoting them to eventually get from A to B, so you’re going like A1, A2, A3 all the way over to B. That is more sustainable and less expensive and easier to manage.
Yes, you can do that with a machine, but then you need the people who are constantly iterating and testing. So, you’re replacing the writers with prompt engineers, with developers, with QA. So, you’re taking one set of people and replacing it with a different set of people to do a different thing with, ideally, the same outcome.
Katie Robbert – 11:21
So, I guess for me, the bottom line is, you can’t get away from needing people.
Christopher Penn – 11:26
Oh no, absolutely. Not, you still need, absolutely need people. But in this example, you’re 150 independent contractor writers. You could probably swap out with two prompt engineers, maybe or less because machines are getting really good at writing their own prompts now. But it’s a radical change in terms of the future of work because of the way you, where you might have a problem is you might need to hire more editors.
Katie Robbert – 11:56
Well, and that’s sort of the thing is, like there’s always going to be a trade-off. And so it’s nothing. So for an executive, it’s not understanding or thinking through what those trade-offs are that you’re still going to find yourself in the same. “Well, I thought I could do all three, and I’m still only able to do two because I didn’t think about the trade-offs.”
And so that is where I think, again, sort of that decision-making, the way that you’re approaching it has to change, is you need to be thinking through more of those scenarios. “Well, if I get rid of 150 writers, what does that leave? What is that burden on the people who are left? What can the machine do? What can’t it do? What *shouldn’t* it do? And how do I replace those skills with different people, different machines?”
So, there’s always going to have to be a replacement for the thing that you took away if you want to get the same result. And it could be more of something, it could be less of something, but it has to be *something*.
Christopher Penn – 13:02
So, as a CEO talking to your fellow CEOs, what does their playbook look like to start making these changes? Because in this particular example, but in general, it’s pretty clear where the value is. You can, you can do, and this is a tired refrain that is decades old at this point, but is also sort of the mantra of most of your executive brethren, you can do a lot more with less.
Katie Robbert – 13:33
I think you have to have a really good, solid understanding of what you have today. And I think that, depending on the size of the company, a lot of times executives are far removed from what’s happening in the day-to-day.
So, I would say you have to start there. You have to understand all of the foundational pieces before you start shaking up the foundation so that you know that when I, “remove the first-floor dining room,” the rest of the house is still going to stay standing. But if I suddenly remove the whole basement altogether, everything else is going to fall down.
Katie Robbert – 14:17
So, I’d say the playbook, as you want to call it, for decision-making, is having a really good handle on your current state and then having a very clear vision and plan for the future state.
And so when you’re talking about making these kinds of changes, you are shaking up the foundation. You are changing the overall structure of the business, the culture, the things that matter the most to making the business successful. And so the playbook is having a really good understanding of today, having a really good understanding of tomorrow, and being very strategic about where you’re making those changes. You could make *all* the changes.
You could say, “I want to completely replace the foundation, that’s fine.” But you need to make sure you’re doing it in a pragmatic way that is going to allow you to not disrupt the business and say, “You know what? We’re just going to shut down for six months, not make any money, and we’ll reopen when we think we’re ready.” I don’t know many businesses that have that luxury, so they have to continue to do business as usual and in parallel be making these changes. And so the way to do it is to make sure you’re not doing too much disruption at once. You can disrupt, but do it in a thoughtful way.
Christopher Penn – 15:41
What if you have to? I’ll give you an example. I used to work for this one company that was owned by a private equity firm, and the private equity firm said, “You must return to us 6% annual growth and 21% margin, period. End of story. Otherwise, you are all fired.” And they actually did this to many of their portfolio companies.
There’s this one company that they had in the portfolio. They literally fired everyone who was a manager and just restaffed the entire company because the previous team was given four quarters to make the numbers, and they didn’t. So, they literally fired everyone.
When you look as a CEO, you’re like, “The board is handing me down to directive. We’re at 17% net margin now. We have to get to 21% net margin by the end of the year, or else we’re all fired.”
When you’re given the “performance first” and a purpose like that, how then you think about saying, “Okay, well, we know generative AI could probably get us there,” because the net margin is income minus expense. So, if we can cut our expenses dramatically by laying off a bunch of people or paying fewer contractors, we can hit that number quickly. When you have much more concrete boundaries like that, is it harder or easier as an executive to make those decisions about using AI and the future of work?
Katie Robbert – 17:01
What’s interesting to me is that you immediately went to, “Well, laying off people is the solution.” And I think I’ve always felt, and I maybe, I like to say this to you, Chris. I’m an N of one. I may be different in the way of thinking, is that, to me, laying off a bunch of people is the last thing I’m considering.
There may be some obvious places where it’s like, “Okay, this person’s job is redundant.” But in general, so let’s just say in this example, laying off people is the last thing we want to evaluate. The first place I would look at is the processes. How efficient are the processes?
Katie Robbert – 17:41
So, if I have Chris and Katie, who are producing 10 blog posts a week between the two of them, five each, one a day, I would then look at, well, what is your process for creating a piece of content? Where are the inefficiencies?
Is it that you are sitting down on a blank piece of paper, coming up with a brand new topic on your own without data, and then writing it from scratch, and then giving it to an, like, you know, what does the process look like?
So, is there an opportunity to bring these tools into the process, to bring these platforms into the process, marry the two together, and make that more efficient so that your output becomes 2x, 5x, 10x with the assistance of these generative AI tools so that it increases the performance? Well, guess what?
Katie Robbert – 18:34
I didn’t have to lay anybody off. That’s not where I’m making the cuts. I’m actually increasing productivity. I’m not just slicing and dicing my team and saying, “Good luck picking up the slack” to everybody else because, again, that’s that short term. I’m not thinking of the consequences. I’m looking at what’s happening today. I’m not worried about tomorrow. Tomorrow is tomorrow’s problem.
That to me is a huge risk with generative AI for executives right now is they’re focused on “What can I do today? I have to increase my profit margins by 10% by the end of the quarter. You know the fastest way to do that? Lay off half the team.” That is a huge problem because new tech doesn’t solve old problems. By laying off half the team and not having a plan in place, you burden everybody who has left, and they will then leave.
Katie Robbert – 19:31
And sure, you’ll then have a great profit margin with nobody doing the work. So, it’ll last for about a hot second.
Christopher Penn – 19:40
And yet for many corporations, especially publicly traded ones, where you have to hit those numbers quarter by quarter, that is exactly how the current decision-making process works, which is, “Let’s. Oh yeah, let’s.”
One of the things that makes Trust Insights a wonderful place to work is we don’t have to do that. We have to obviously make money and stay in business. That’s, that’s basic logic. But we do not have someone saying, “Your profit margin must be 21% or else.” Whereas a lot of your other executive brethren are under that exact sort of duress to say, like, “Yeah, your $65 million bonus hinges on hitting that 21% margin, or else.” And so the decision-making processes that those executives are using is exactly that: “What can I do to hit *this* quarter’s numbers? And I’ll worry about next quarter, next quarter. This quarter, we just got to hit that number.”
Katie Robbert – 20:41
It’s such a panic move, and to me, it’s a reflection of what’s going on inside the organization. And that’s what I mean by the executives are so far removed from what’s happening in the day-to-day. That that’s the problem, is they don’t have a good grip on what’s actually the foundation of the company, what any given employee is doing.
And that’s the evaluation, that’s the audit that you have to go through. And so you can use the 5Ps with different teams, with different departments, with your different, you know, sections of the company to understand, “Okay, so our dev team, for example, is maybe the most inefficient because of how they are prioritizing tickets, of how they are pushing out of builds and how they’re doing a lack of QA. So, they’re breaking more things than they’re building.”
Katie Robbert – 21:38
That is a process problem coupled with, people. So, there’s some education that needs to be done there. You could just say, “You know what? We’re just going to scrap all of our existing devs and start over and rebuild the team.” That is a solution. I’m not saying you can’t make that decision. You absolutely can.
But that also comes with consequences because you lose that institutional knowledge, you lose that momentum of whatever was actually good on the team. You have to build your processes from scratch. And maybe you’re okay with that. Maybe that’s a risk that you’re willing to take.
But you can’t take something away without giving a replacement, whether that’s an automated machine replacement or other people with different skills or a combination of both.
Katie Robbert – 22:23
And what I’m seeing, and I know I’m like on a soapbox, but I’m seeing executives make decisions of taking and taking away without a replacement.
Christopher Penn – 22:36
And to your point, many of those executives are so far removed that they just say, “Okay, well, now your headcount is this, and you guys figure it out.” And then that trickles down as the crap rolls downhill into middle management and stuff like that.
In those situations, then because we know people are going to make the short-sighted decision, what’s the best way then for a leader within a group or corporation, or even just a team, to say, “Okay, well, I *have* to hit this number. This is the number I have to hit. There’s no choice in the matter because otherwise, I lose my job.” How do they thoughtfully and quickly hit that number?
Katie Robbert – 23:27
One of the big misconceptions about being a leader, about being a CEO, about whatever role you’re in, a decision-maker, is that you’re doing it alone.
Talk to your team leads, empower your people to tell you what’s going on with them day-to-day. Have those conversations, bring them into the fold, gather the information *before* making the snap decision. When I worked, prior to the agency that you and I worked at, a company that was very top-heavy. We had 10 people on the executive team and 60 people at the company as a whole. So that’s, you can do the math there of how many executives per team member there were.
Katie Robbert – 24:20
Those executives would lock themselves in a room for two hours at a time, make all these wild decisions, and then, you know, come down from the top of their mountain, descend upon us, and say, “And we decree: This is the way.” And we’re, all the rest of the staff, are just sitting there like, “Well, nobody asked *me*. Nobody asked *me* what was going on day to day.”
I could have told you that by taking away, the sales and marketing team, sure, you’re going to save a bunch of money in the short term, but in the long term, when you come back around inevitably and I quote, “Why aren’t we making money anymore?” I don’t know.
Katie Robbert – 25:03
Because maybe you got rid of the whole sales and marketing team without consulting anybody else who actually works on those teams as to what their challenges are, as to why they’re struggling to do anything. They were struggling to do anything because the product that was being created was being sold to the wrong audience, and they weren’t getting any support in terms of how do we pivot that to sell to the right audience.
And so there was a lot of things that were happening within the company that had anyone from a top of their ivory tower come down and talked to anyone on the ground, they would have realized, “Oh, just laying off two whole departments is a terrible solution.” But it was such a short-term…
Katie Robbert – 25:44
And so I give that example because I know a lot of people are finding themselves in that position right now. My husband works at a very large company that has *no* human resources department because that was a cost cut. So, if he wants to talk to someone about his insurance or his benefits, or God forbid, his paycheck, there is *nobody* for him to talk to.
These are the effects of short-term “let’s make our numbers” thinking because you’re not taking into account what happens to the rest of the company.
And I will now come down off of my soapbox until Chris asks me another question.
Christopher Penn – 26:26
I think though you’re hitting on an important point with communication, which is having that level of transparency, being willing to say like, “Okay, the board has said we got to get from 17% net margin to 21% net margin. The typical way we would do this is fire a bunch of people. However, as leader, I’m going to ask each department to put together the P&L, and I’m going to say, ‘How are *you* going to get to the number we need to get to?'” and then have everyone in the company try and brainstorm to the extent practical.
Absolutely. If you have 330,000 employees, that’s not going to go well.
Katie Robbert – 27:03
Right, but you can do a subset of that.
Christopher Penn – 27:05
Exactly. To say, “Here, how can, how can you contribute towards this goal?” With the understanding that if we don’t have a solution within 30 days, then we *do* have to start the process of layoffs.
Katie Robbert – 27:18
And here’s what, here’s what that does. You are giving the people in your company a voice. You’re giving them a sense of ownership of the company as a whole. You’re saying, “I want to empower you to be a part of this solution.” And then they feel more invested. They’re like, “You know what? I’m actually being listened to for once. I actually want to try.”
Now, of course, you’re going to have the people who don’t care. “It’s just a paycheck, whatever.” And that’s fine. That’s normal. But what you’re going to start to find are those advocates, those champions inside your organization, who *do* care, who *do* want to make this better, who *do* have ideas.
Katie Robbert – 28:00
I think there’s what that famous story about the Flamin’ Hot Cheetos, where it was the janitor, whether or not the story is true, it might be an urban legend at this point, but it was the janitor who had the idea for Flamin’ Hot Cheetos and put together the presentation to bring up to the executives. And now today, Flamin’ Hot Cheetos are something that is, like, an occult movement because of how much people enjoy them.
The point of that story being is that you never know where the solutions are going to come from. And so if you, the executive team, think *you* are the only ones who can make these decisions, you’re doing it wrong.
Christopher Penn – 28:42
And I would add on the generative AI front, if you equip people with the tools properly and invest in training those folks, that amplifies their ability to work together and come up with those solutions. Because now, for every employee that you have, you also have a digital twin of that employee in the generative AI system they’re using.
You give them all a copy of Google Gemini or ChatGPT, or whatever, and you say, “Hey, I need you to brainstorm ways to either improve your productivity and profitability *or* reduce your cost.” Letting people take that initiative now, it’ll probably be like 2% of the workforce will be really invested in that, but that’s 2% more ideas than you had before of ways people could do things differently.
Christopher Penn – 29:27
So to wrap up: new technologies, still not solving old problems, but might the core problem of “you have to make these decisions very quickly and hit very arbitrary numbers that may be outside your control.” Can use people and processes and technology to get there.
If you’ve got some stories that you want to share about how your stakeholders or yourself are making decisions to be more data savvy and to use generative AI to hit those numbers, pop on over to our free Slack group. Go to TrustInsights.ai/analytics for marketers, where you and over 3,500 other marketers are asking and answering each other’s questions every single day.
Christopher Penn – 30:14
And wherever it is you watch or listen to the show, if there’s a challenge you’d rather have *it* on set, go to TrustInsights.ai/TIpodcast, where you can find us where in most places where podcasts are served.
Thanks for tuning in, and we’ll talk to you next time.
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Trust Insights (trustinsights.ai) is one of the world's leading management consulting firms in artificial intelligence/AI, especially in the use of generative AI and AI in marketing. Trust Insights provides custom AI consultation, training, education, implementation, and deployment of classical regression AI, classification AI, and generative AI, especially large language models such as ChatGPT's GPT-4-omni, Google Gemini, and Anthropic Claude. Trust Insights provides analytics consulting, data science consulting, and AI consulting.
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