Lachlan McDonald - Boston Consulting Group

(Joel Beasley at 00:00:00) Hello, my friends. Today we are talking to Lachlan, the expert project leader at Boston Consulting Group, and we discuss how decentralization will evolve in the post-COVID era, how to make the most out of hiring the best talent, and why sometimes indecision can be worse than a bad decision. All of this right here, right now on the Modern CTO Podcast. Here we go. This is the Modern CTO Podcast.

(Joel Beasley at 00:00:35) So where are you calling in from today, man?

(Lachlan at 00:00:38) I'm calling in from Sydney. So I've moved to Sydney, and I've been on pretty much a self-imposed, or government-imposed really, lockdown for the last, I'd say, three weeks and trying to really master the working-from-home thing with two small kids.

(Joel Beasley at 00:00:58) It's like a skill you don't want to have to master, but then you have to master it.

(Lachlan at 00:01:04) Exactly. It's really funny in a way how COVID has shown—it's made everyone put their money where their mouth is in terms of this theory around distributed working. And I find even myself really just replicating, or trying to catch myself not replicating, the kinds of ways of working that I had in office. I'd do the same things, get in the same habits, and get stressed when I wouldn't be able to do work the same way I could when I had an office and a dedicated team helping me out. And of course there's all the funny aspects of when your kids bust in on a WebEx or something and then they can't leave the room. So it's been a learning curve, let's say.

(Joel Beasley at 00:01:56) Oh, man. It's changed everything. So what was it like—I know what it was like in America, but what was it like in Australia as the lockdowns happened?

(Lachlan at 00:02:07) Yeah, I think to say that people were concerned would be an understatement, so it's been a real, I guess, scary time for a lot of people. So for me personally, it's been a challenge to work, and it's also been a challenge to explain to my family the preparations that mom and dad are making to make everyone safe, and you can't go to school at the moment because there's an issue, but everything's going to be okay. And then try and make each and every day fun at home, and rapidly learn how to homeschool kids, and try and make it fun and stay sane at the same time. And I think the government overall has tried to rapidly understand the scale of the problem, so we've had this progressive kind of rolling lockdown over, say, two or three day periods where they'd come out and say no groups larger than one hundred, and two days later, no groups larger than ten. And I think they've caught some criticism for that, but I think they were really trying to understand what's the right balance here. And within a week or two they realized the right balance is everyone needs to stay at home so we can flatten the curve.

(Joel Beasley at 00:03:24) Oh, man. Is your business classified as an essential business?

(Lachlan at 00:03:30) Well, so it depends. I work with Boston Consulting Group now, and we are absolutely flat out supporting our clients remotely. So, you know, working from home, there's some work that's been deemed essential where we're supporting the government, particularly to do with the response around COVID, and so there may be some travel there. But I haven't personally been traveling. I've been pulling some pretty late nights here at home and also trying to fit in—when you're in the home and your kids expect you to be available through some period of time through the day and trying to get a healthy balance as well. So I haven't had to travel, luckily, but I know that there's people in my team that are out there doing the hard yards to try and tackle this thing head on.

(Joel Beasley at 00:04:22) It's tough. You know, I'm usually a really early person. Some nights I've had to get late because the kids get up really early, right? And so some nights I'm like, I just try to get all the work done when I can. And yeah, there's no clear, easy way to deal with it. You just kind of do it. You just make it happen.

(Lachlan at 00:04:45) Exactly.

(Joel Beasley at 00:04:46) But I was—I have a second one now. I know I told you this on LinkedIn, but I want to tell you face to face. I named my son Lachlan.

(Lachlan at 00:04:55) That's excellent. What a great name to go through life with. I'm sure you've set them up for success there. It's a very rare name in the US, though, right?

(Joel Beasley at 00:05:06) Yeah, it's pretty rare. And so his name is—we named him Lachlan Ray. So R-A-Y is his middle name. And this is how the conversation went. We're having a boy. Oh, that's pretty cool. My wife goes, what do you want to name him? I go, I don't know. I talked to this cool Australian dude today. His name is Lachlan. Maybe we name him Lachlan. She goes, oh, I like that name. I go, cool. What's his middle name? She's like, I don't know. She's like, we let—oh, I can't believe I forgot his name—we let our brother-in-law decide because he's like a songwriter, like a famous songwriter. She's like, let's text him. And he responds back, Lachlan Ray. And in five minutes, we had Lachlan Ray. And we're like, alright, that's the name of our son.

(Lachlan at 00:05:49) That's amazing. Do you make all of your decisions in that kind of serendipitous or spur-of-the-moment type of way?

(Joel Beasley at 00:05:58) Usually, yeah. You should see how we hire people around here. It's like, yeah, because here's what I found out about hiring people. Like, you really don't know what it's like until you're in the throes of working together. Like, you get a vibe of someone. I've spent a lot of time with someone and hired them, and I've spent a little time with someone and hired them, and I haven't found much of a difference. So if I find somebody that I—or I guess the difference I find is when I click with their perspective. It doesn't have to be equal to mine. It can be different, but when I understand that they have some logic behind their thoughts and they've got some communication skills and they meet the requirements for the position, and I'm like, yeah, alright. So I guess I'm known to hire on the spot a lot.

(Lachlan at 00:06:52) Yeah. So I think that you've got a really interesting approach to talent, right? Finding talent and what do you do with it? And a lot of the companies that I've been to have a different approach, or they're kind of wrestling with it, like how do we get talent? We need talent to compete. It's so hard to find it. But they go out and they try and find bright and motivated people, and then they put them through this kind of bureaucratic ringer. And then at the end of it, they're like, well, we didn't get the kind of cookie-cutter description that we wanted that we wrote and didn't really think about at the time. And I think there's been a lot of value in the last couple of years—companies trying to rethink, like, what is talent to us? How do we actually go out and find it and get it? And a great example would be if you have a hiring process for engineers that has only, you know, ten years' experience for an entry-level role. And, you know, the people who lose out the most for that are women or people from minority communities that may not have had the same kind of opportunities for experience, but can bring a wealth of additional kind of knowledge and insight to your teams. How do you broaden or make your talent process more inclusive and also less impersonal so that you're getting out of the way of the talent is the way I like to say it? And it's kind of a revelation for myself as well when I was really struggling to find teams for my companies in the past. We'll find the right people in the right mix. I came to the realization that oftentimes it was I wasn't being clear with what the mission was or clear on the expectations around how we're going to fulfill it. And I'd spend all my time putting roadblocks up in front of them, right, to use them to educate me instead of trying to get roadblocks out of their way and work in a more agile way, which is a humbling kind of journey to go through. But I'm glad I've realized it now.

(Joel Beasley at 00:09:06) Oh, yeah. Experience is like—gaining it is—you know, I keep thinking it's a lot like Bitcoin mining, right? Like, it takes a lot of work, but then you get a reward, and that reward's financial. And so, yeah, the more experience I gain, the more mistakes I make, I can make decisions quickly. I guess somebody who would be hesitant to hire would be someone, you know, like, if you're not clear—that'd be a good one. Historically, I'm just thinking of the mistakes I've made. I've made that exact mistake. It's like, I know I need someone, but what do I need? You know?

(Lachlan at 00:09:42) Exactly.

(Joel Beasley at 00:09:43) And then you narrow that down. And then when it comes to the people, I've often found that, you know, you and I have met a lot of people in life, right? So as we gain more experience and meet more people, we get more refined in our abilities to detect things earlier. And I will often come across talented people who are stuck in that bureaucratic process within the hiring process of other organizations. And I'm like, if anyone with any sense sat down with this individual, they're going to get hired on their next interview. And I need to hire this person now.

(Lachlan at 00:10:19) Yeah. Well, it's a good approach. And I'm guessing that that has really worked out for you, or has it ever come about that you've made the wrong call?

(Joel Beasley at 00:10:30) Oh, well, yeah. Wrong is relative, right? So I would say I've had—the reason why I'm so okay with it, and I don't do it all the time. It's not like I have to do it. But the reason why I'm comfortable with it is because I get equal results as just waiting a long time and putting people through the long process, because you really just have to let that human get in there, burn through their perfect thirty days. You know what I'm saying? It's just that you never have that much energy as you do in the—we just really got to get into that, like, forty-fifth day. And we really just have to understand what it's like to wake up every morning and have you on my team, because that's a huge part of it. I mean, you could be really talented but a horrible person to work with, and then it's like, in that case, all the technical interviews in the world don't mean anything. Um, yeah. So I've found that by making a decision, it'll either work or it won't, and then I just make another decision. And then I just keep—and that's how I keep moving forward. I don't like that, like, well, I might go with this person. I kind of like this about him. I'd rather stay out of the middle land, you know, and then just say, yeah, I have a good feeling about this person. Let's go. And it either works or it doesn't.

(Lachlan at 00:11:47) It's a decisive way to do it. I like it.

(Joel Beasley at 00:11:50) It's that military—once I heard that military story, it's like the famous military story of, like, make a decision, you never have all the information, and then you just make another decision, and you just make—once I heard that, I was like, oh, okay, great. If the people helping decide the fate of our country are using this methodology, then it works for me.

(Lachlan at 00:12:07) Yeah. Because indecision is worse than making the wrong decision, often.

(Joel Beasley at 00:12:12) Oh, always. Always. And then you're going to kill yourself, and then you're always in that, like, I don't know, or maybe I—and then, oh, man, the worst is, like, seeing that great person hesitating and then them getting a better job offer. That is the worst.

(Lachlan at 00:12:28) Yeah. I can imagine.

(Joel Beasley at 00:12:30) You don't want to do that. So let's talk about startup stuff. You're in the supply chain space. Last time we talked, you did a startup. We also talked about how awesome—what's the acronym, BCG? We talked about how awesome they were last time you worked with them before you did a startup. You're back working with them again. Tell me how the progression of the startup went and what you learned from that.

(Lachlan at 00:12:53) Yeah. So startups are a very interesting journey to go on, as I'm sure you know, and quite a humbling one as well. But I think the lessons that I walked away from that and the opportunities that came from it were amazing. So I'd always encourage anyone to—if they have an idea—to chase it, because it really worked out in my case. So last time we spoke, we had just—we were just building a smart contract platform. The smart contract was based on logistics, so it was trying to reduce the cost of moving things from A to B. And it was also really based on this kind of latent capacity or inefficiency in how everybody needs to move things, but no one can kind of cooperate, and that causes all of this inefficiency in the system. What that means for you is when a truck arrives at your depot, which is usually late, it has to queue, you can't pack it perfectly, it might be late at its destination because of traffic or you packed it late, which ends up—there's this kind of compounding inefficiency across the network that you and everyone else ultimately pays for. And the way that we've solved it historically is to throw more money at it—express freight, more trucks, you know, bigger warehouses, try and move things earlier so you hold more inventory. And all of this is really costly. So I had done a couple of transformations with big kind of global clients on this and gotten really frustrated that I couldn't kind of fix it in that silo. So the smart contract was really aimed at a variable rate geolocation based off of GPS data on the trucks. So we could say, here is where the truck is going to be. You need to move this stuff at the warehouse now. And the truck driver, if he's not on time, he's not paid the full rate. But if you make him late, then you have to pay him extra, basically. So we built it. We trialed it. It was really exciting. But through the process, I had two really kind of key learnings. The first was, it's really hard to build the right team. To your point earlier, how do you find talent? How do you make the decision quick enough? And then how do you lead them effectively? And a startup environment is probably the best kind of environment if you really want to find out what your leadership skills are made of when you have to build a structure and organization around yourself effectively. And the second was moving fast enough. And it was a combination of those two that put me in a position where I was really lucky to get the opportunity to go to BCG and continue that kind of work, but with their resources and at a much greater scale, which I was really excited about. So the team dynamic was a challenging one, and it was how do I—there's all this white space that I don't understand. Systems engineering. I'm not a systems architect. In trying to quickly stand up this technology with some of the biggest companies in the world, there was this huge kind of investment and barrier to quickly solving this problem for them. So while we could do the smart contract over the top of their current systems, we'd have to do it one contract at a time, one route at a time. It's quite slow unless we solve the systems problem. And that was going to take somewhere in the order of two years and a lot more investment than we currently had. The second was the competitors in that space were moving really quickly. They were really cashed up. But their approach was, we're going to build a much better mousetrap, right? So they were going to kind of replicate the same old systems in a way. We're just going to optimize all of the individual components. And I always had this kind of thought in my mind, are you building a faster caterpillar or are you building a butterfly? And up until that moment when I really realized the dynamic between my two key challenges, I thought I was building the butterfly and they were building the faster caterpillar. And I realized, no, no, no. I was just building a faster caterpillar. My theory and what we were implementing for these clients was we had a laser-focused feature set. So we would connect these disparate sets of data across different vendors, right?

(Lachlan at 00:17:24) We would kind of triangulate this is your truck and this is your shipment and your invoice, right, and put it all together. And we'd lay our contract over the top of it. So we had much tighter features, so we're faster. But because of the systems issue, it was harder to replicate at scale. So BCG gave me the opportunity to jump on board their team and use their kind of strength in systems engineering and AI and machine learning to go out and continue to build this kind of value from a smart contract and digital procurement perspective.

(Joel Beasley at 00:17:57) Dude, that's so cool. And it's amazing because, you know, it's a hard leap to take to go out and to do that. And when you do, you realize that whether or not you won as far as a business, that isn't as important as the experience you now have because now you know what it's like. And also, you know, I'm a big fan of Musk and how he approaches things and he approaches them like, oh, it's most likely to fail. Like, this is probably gonna fail. Let's just, how do I mitigate? Like, what steps can I take to mitigate failure and reduce the probability of failure and increase probability of success?

(Joel Beasley at 00:18:37) And especially like, you know, whenever I go into something new, I'm like, oh, here I go. Let's fall down a hundred times. And then after you have kids and you watch them learn to walk, you're like, that's where I get it. You just keep falling down. You just keep getting up, and then amazing, beautiful things happen along the way.

(Lachlan at 00:18:56) Yeah, exactly. And I think, you know, I really respect people that have a go, that actually get stuck into something regardless of whether you might fall or not. And it's a humbling but amazing journey to go on. Right? When it's your idea, you're steering the ship, it's your money on the line, it's your name to really roll those dice, and it was a hell of a lot of fun. And the humbling part, I guess the part that was where I did the most growth in a way, was really wrestling with the realization that I could either keep trying to raise money and keep trying to build out the systems engineering and replicate the same kind of architecture and application kind of basis that everyone else has, or I could take what the really valuable piece, which was how do we mine insight into this data? How do I, the algorithms that we developed in collaboration with these large companies, how do I take that and scale it and leverage the architecture that's already there? And that meant that I had to change the approach, and I was lucky enough to get the opportunity to do that.

(Lachlan at 00:20:13) But, yeah, you have to confront that kind of entrepreneurial drive in yourself. If I just push harder, if I just, you know, double down again, I'll get there in the end. And I think I really made the right call. Yeah. Time will tell.

(Joel Beasley at 00:20:30) Yeah. Time, you already made the right call. You already won. You got the experience. You're now, and it's not like you wake up and you get one shot. It's like you go, you find the next white space, you take your knowledge from the first time, you learn, you build relationships, you grow, and then you wait and you look for your next opportunity. And then it'll show up and you'll be even better positioned. And you just keep going, and you just keep doing it over and over and over, and then you'll make all the mistakes. You'll learn everything, and then eventually, boom, it'll happen. And then, like, we always have to change. Like, right now, man, we are cranking. January and February were our best months in business. We've had a tough, yeah, we had a tough two years, man. Like, difficult. And we made it by, right? And then January and February, and I was just getting to the point where we were like, alright, this thing's going up. It's going up. It's scaling. We're adding more people. This is good. Business is good. We're growing. We're growing.

(Joel Beasley at 00:21:36) And then COVID. I'm like, and now I'm like, oh, we lost half of our revenue. I'm like, what do we do now? But then that's when I start calling people. I don't, like, curl up in a ball and cry about it, right? Like, start asking people, hey, what are you seeing in the marketplace? What parts of the market are still moving? You know, who's still buying? Why are they buying? Who's growing in this and why are they growing? Okay, health care companies, are they growing? Can we focus on health care companies or government comp? Like, let's focus on that. Let's focus on who's not upset about this.

(Joel Beasley at 00:22:10) And then let's change our business model. Like, if we have to change our business model, we change our business model. I, that's why, you know, and this kept running through my head, Lachlan, so many times in the past couple weeks. You build your network before you need it. You build your network before you need it. Because then, when crap like this happens, you can pick up the phone and call people and say, hey, what are you doing? How are you handling this? And they share information, and you share information. And then, you know, we learned recently that I'm paired with another top podcast but in the HR space. And we both kinda started our journeys at the same time, and we've been sharing information for, you know, a year or two. And he's like, oh, man, you know, we lost a bunch of our revenue too, and then we put on a digital event, and it's, like, rocking and rolling. And I was like, oh, that's awesome. So now we're putting on a digital event, which we haven't talked about on the podcast till now.

(Joel Beasley at 00:23:11) But we were just gonna bring, yeah, we're gonna bring all CTOs together. Call it, like, the Modern CTO Virtual Summit. You could come on, do, like, a panel about startup stuff, right, if you want. You think that'd be cool?

(Lachlan at 00:23:25) Yeah. That'd be great. I'd love to.

(Joel Beasley at 00:23:27) Yeah. Way to put you on the spot. Sorry about that. Yeah. But, like, we can look at dates and everything. But, you know, what you went through is, like, you know, super important, and it's super important that you share it because it's recent. And because we want, I want to encourage other people to go out on that limb, take that chance, come back, recoup, build your savings back up, right? Build your life back up, and then go at it again. I mean, you gotta take big shots like that.

(Lachlan at 00:23:56) Yeah. It's, I think, being an entrepreneur is quite exhilarating. And part of the challenge for me was still trying to be a good father and then having perspective on where is this thing going and how can I keep the momentum up? And I was really in the weeds of systems engineering and trying to raise further capital, and we're getting further and further away from what the value of the company was. So, yes, spot on. So how are you responding to COVID? I've been flat out with the kind of COVID response here in Australia, but I'd love to get your perspective. So you've kind of changed and pivoted your business model, and you're looking at a digital event. That's exciting.

(Joel Beasley at 00:24:43) Yeah. Yeah. Of course, you buy lots of ammunition because we're in America. That's what you do. Fair enough. No. But, yeah. So we didn't change the business model much. We just, for the leadership company, we just focus on companies that were growing and still buying. And then for the podcast, we decided to do this virtual summit. And we realized we have, like, the best connections and the best people in interviews and stuff in the world, like you. And, you know, why not use this as an opportunity to bring everyone together? You know? Because before, digital, it's, so in-person events are pretty expensive. They're pretty expensive to put on. And we had thought about it. We've actually talked about doing in-person events before, and we're like, alright, where do we have the most guests? Should we, what time of the year is best? Everybody's in meetings and, like, we wanna get everyone together. And then, you know, people are so busy going to the in-person events. Digital events kinda took a back seat. But now we, like, are in this prime spot where, like, everybody's stuck at home. And a digital event is, like, a great way to bring everyone together.

(Lachlan at 00:25:51) Yeah. Yeah. I think it's a great idea. And, well, I think the challenge is the practicality around it as well. So it's something that I've been wrestling with. So a lot of our kind of team meetings and our the kind of initiatives that we run internally in the company around whether it's diversity or, you know, inclusivity or trying to champion change makers in different businesses have all rolled online, which has been exciting. And there's been, it never ceases to amaze me how people can find innovative ways to try and make online kind of engagement really fun and exciting. But I'd have to say I'm still, I guess, at the bottom of the learning curve in trying to put these kind of distributed work or digital events on. So is there a real practical challenge to try to wrestle this together?

(Joel Beasley at 00:26:52) No. I'd say it's pretty easy. Like, I've got, I called up some past guests that have experience in doing online events. Because we do the videos for the leadership company, we have, like, a full video production studio and high quality, you know, video and audio equipment. And so, yeah, not really a whole lot of issues, just execution and, yeah, that's pretty much, and then making sure that the topics are right. You know, we want good topics. Like, what are you noticing with your customers right now? Like, what's popular in your world with technology leaders?

(Lachlan at 00:27:30) I think two things. Everyone is really focused on the resilience part of COVID response. So they're setting up crisis management teams. We're trying to get visibility into the supply chain. So, you know, a great example is a multibillion dollar mine may have a $5,000 part that it relies on to process the ore that's extracted, right, or the minerals that are extracted. And if that $5,000 part fails, the plan was always, we'll go get another one from China or wherever it may be, right? The OEM will have one in stock, we'll go and get it. Well, those rules have kind of gone out the window in the last, you know, two months, and now that part might not be available for, say, six months. So that $5,000 part could shut down a large part of the processing of a multibillion dollar mine. The real challenge is, what are those $5,000 parts? Like, how do you get the visibility into what's impacted? Is it the electronic circuitry in it that's disrupted from a warehouse in Wuhan? Or is it rubber from plantations in Southeast Asia that have been shut down because the labor force has, you know, COVID? And the current state is we don't have a great deal of visibility across, you know, industries into where our suppliers are drawing their critical parts from within their supply chain, and trying to build that visibility quickly at the moment is really the key challenge.

(Lachlan at 00:29:02) So you understand what are the potential shocks that are coming, and then what can I actually do about it? Is there an alternative? Are we able to change our product mix, or is it something within, can we run that plant less so it has less hours on it or less chance of breaking, let's say? But all of this is really quite manual at the moment. It's really exposed in some sense how fragile a lot of our digital transformations that many of our companies have been on the last couple of years actually are, and obviously COVID is once in a generation type shock. But at the same time, if we were to have a digital supply chain where we had real-time information from our suppliers as to their inventory, their kind of supply chain, their back orders, where the actual products are coming from, and the status of them, we could work in a more collaborative fashion to understand where those potential shocks are and act a lot sooner. And then the actions that we can take immediately, obviously, people are the most important, keeping your people safe, but the actions to try and mitigate the supply chain shocks are also limited by some fairly manual contracting tools and approaches, right? So the beauty of smart contracts is it was automated, it was aimed at a big problem, and you could crunch, it was data driven. A lot of our contracting approaches at the moment have, are not data driven. They rely on, you know, three or five year tendering cycles that are very manual. They're based on lots of face-to-face kind of negotiation and purchasing through 40-year-old ERP systems. And your ability to quickly identify, right, it's this $5,000 part, and I'm going to go to market and find an alternative for it quickly, and have that alternative on site here within the next week is really, really a tall order for most of the companies in our major industries. And, you know, a lot of them are doing a great job in throwing their talent behind it and understanding where these risks are and what I could do about it. I think the penny hasn't really dropped in regards to, well, or sorry, the impact hasn't really started to hit because a lot of the equipment's still running or lots of our workforce is still essential and working. But I think the crisis response is really aimed at that from a supply chain perspective. But the technology angle of it, I think, will be the solution for tomorrow. So what comes, so that's today. What comes tomorrow is how do we build a more digital, more resilient supply chain where we have real-time information from our suppliers?

(Lachlan at 00:31:44) We have automated smart contracts that are able to identify stock-outs that are able to, we can lay optimization algorithms over the top to ensure, like, the logistics example before that we don't have, we're optimally packing these trucks. And I think that there'll be a huge push to use that as a value lever to make companies more competitive and to reduce the kind of total cost of their operations coming out of this. Because I think the traditional procurement levers of trying to negotiate better prices and things in a really distressed market will be a bit of a challenge as well.

(Joel Beasley at 00:32:22) That is interesting. That is an interesting problem. That $5,000 part could knock out the whole mining operation.

(Lachlan at 00:32:30) Yeah. So and it's not just one. So it's kind of a cumulative effect of all of those, those kind of risks, those failure points, and then it's identifying and doing something about it when you've got quite a manual process to interface with the world around you. So we're still in the early stages, I would say, of thinking about our companies as existing in an ecosystem. We still think of ourselves very much as like an actor, an independent actor in a market where we can just go to the supermarket and get the goods and services and buy at the price that we need for our operation, and we're kind of isolated over here from everybody else, right? And I think this shock, even though it is a, you know, once in a generation shock, is going to significantly accelerate the thinking around actually, we're all kind of connected here. We exist in an ecosystem. My actions impact that ecosystem, and I have really kind of manual or inefficient tools to get information in for it, do anything with that, and then kind of influence the ecosystem back out. And a great example would be someone who really capitalizes on this ecosystem type thinking would be Airbus. They've run a really kind of open data platform where suppliers can access more data than they have just in their small silo. And they really kind of leverage it to improve their predictive maintenance and to share kind of critical data amongst a whole heap of their suppliers, and it's really significantly reduced their operating cost and made their suppliers more effective because they can see more and they can do more.

(Joel Beasley at 00:34:18) That's interesting. And the airlines need all the help they can get right now.

(Lachlan at 00:34:23) Yeah. Exactly. Yeah.

(Joel Beasley at 00:34:24) Do you think we're gonna see more decentralization? Like, one of the things I thought of was there's some company out there that's building these essentially buildings, and inside they have robots that are gardening and making food. Right? And they've, I guess their goal is to have, like, in different cities — cities can buy one of these things.

(Joel Beasley at 00:34:49) Right? So you could, you know, have a year-round, like, watermelon and corn plant, you know, facility that produces, you know, X amount of yield of these two foods or whatever foods you so choose. Do you think that's gonna happen more? Because, I mean, I kinda think it will.

(Lachlan at 00:35:09) Yeah. So I love your example of the watermelon plant. That's a great one. I'm gonna pinch that one. The one that I always go to — so to answer your question directly, yes, I do in a way.

(Lachlan at 00:35:21) I think the concept of central and decentral will change a little bit. I think that you will have more distributed manufacturing. Particularly, this is gonna be a real kind of driver for it. But if you have smart manufacturing that's enabled by kind of deep data driven by consumer insights, you understand — you've got hyper personalization of exactly what kind of, you've got a 3D scan of someone's foot, you're gonna understand exactly what they need in a shoe and when they need it. You can bring the manufacturing facility that relies on robotics and 3D printing direct to the consumer.

(Lachlan at 00:35:59) So you can have a small shoe player in each of the, you know, cities that it wants to service. And it can then make the shoes instead of having these really kind of long supply chains. Instead of based on pumping in a whole heap of orders at once in a very kind of manual way, really relying on scale and kind of trying to simplify the manufacturing process, this will almost go the other direction and you can do a one-off shoe at a much lower kind of cost than you currently can in a much tighter time frame because it's just down the street and they can 3D print it for you. So I think in one sense, there'll be a significant decentralization of your manufacturing capability or the ability to build the things that consumers want and need. It'll be much more local in the future because of these technologies.

(Joel Beasley at 00:36:49) Yeah. I think that's how we stabilize things. Right? Like, decentralization has — I mean, I was talking to my brother last night who's a doctor, and he was showing me, like, the new hospital that they were building. And essentially, it looks like how you would imagine, like, a civilization on Mars would look like.

(Joel Beasley at 00:37:08) It's all like these decentralized, you know, domes kind of. And, you know, because you can separate them, you can add to them if you notice that your population starts needing this type of surgery, you could put that in there. You just do all sorts of different things with these, like, modular designs. And I was just thinking to myself, you know, the first time I saw it happening in food was when I asked the question, how do they get bread to be fresh? And I realized that there's, like, these bakeries, and they license the brand, and the bakery will make, like, that same bakery is gonna make, like, five different brands of bread.

(Joel Beasley at 00:37:49) You know? And that's in your town somewhere. And so it's not coming from out of state. It's coming from down the street.

(Lachlan at 00:37:57) Yeah. There's no monolithic bread factory in Wisconsin or something.

(Joel Beasley at 00:38:02) Right. But there is like an Oreo factory.

(Lachlan at 00:38:06) Yeah. World's biggest Oreo production. The modular approach is really interesting. And I think in theory, it's an excellent concept. You could say, based off of we'll have much greater demographic data and kind of leading indicators, the health of our population, instead of someone presenting at the ER, we'll be able to have much more kind of data-driven insights as to the overall health of the population from their habits and their food and exercise and things like that so we could preempt any of the care needs that they may have. And I'm not a health care expert, but I would think that being then able to kind of modularize the health care in each kind of regional area would probably increase the outcomes and reduce cost.

(Lachlan at 00:38:56) The really interesting part though will be where the rubber meets the road on how people perceive the modularity. So will people want to have a modular hospital where you could bring, you know, this part of the ICU in and out, or are people going to campaign to have that capacity there all the time just in case? And then once they have it, they're not gonna wanna give it up. I think the technology is only half the story a lot of the time. It's really changing how we think about using technology. That's also a real part of the challenge.

(Joel Beasley at 00:39:35) Oh, yeah. It's almost always, like, why doesn't this exist? It's so logical. It's like, well, the humans that are in charge of that, they don't feel comfortable with the newness. I mean, we forget that, like, core human monkey brain parts that drive us are, like, we fear things we don't understand.

(Joel Beasley at 00:39:55) And we have a small attention span, so it takes a lot of time to get new information in. And then you get people that have growth mindset, and then you get people that don't. And we all kinda have to live together. Like, I was reminded this week that, you know, with all the kids out of school, you get 16-year-olds driving around doing stupid things in the neighborhood. Right?

(Joel Beasley at 00:40:18) And we all have to coexist. Right? We have to coexist with people of all ages and all belief thoughts, and it's just like a really interesting problem to solve, or thought to have. But, like, for example, the medical supplies — like, we should have, you know, some building in every city that can manufacture, or, like, every major city or per population that can manufacture essential medical supplies. Like, why are we flying stuff on planes from other countries?

(Joel Beasley at 00:40:50) Like, we should at least have that. Like, we should take, like, some bare essentials and make production facilities of them, and it doesn't even need to be free market stuff. It could be government stuff. They're just manufacturing facilities. Like, just put them up, and when we need them, there are supplies there so we can make whatever — like these essential items we agree on.

(Lachlan at 00:41:13) So the PPE supply challenge is really being felt all over the world. We have a very similar challenge here where we're trying to get enough masks and respirators and gloves and gowns to our frontline staff, and also in dealing with the same kind of community challenges of hoarding or people profiteering and that that I'm sure your community is dealing with as well. But I think the PPE angle is really interesting in as far as these were highly commoditized type goods in the past, right, or right up until this happened. It didn't make a lot of sense economically to have mask building facilities in each county. Yeah.

(Lachlan at 00:42:05) It's just not something this makes sense to do at scale and to do in a select number of places. And until there's a crisis and everyone wants to keep their hands on those things, no one really saw, I guess, a challenge with it. But now it's become one of the greatest challenges each of our communities is facing. And I think the answer will be somewhere in between. I think the answer will be, how do we make our supply chains have more flex or more resilience in them?

(Lachlan at 00:42:36) If we have a single point of failure, and that is masks come out of these three factories in China, let's say, and the Chinese companies are either at capacity, they don't wanna sell them to us, or someone else has bought them. How do we quickly scale production in a way that we don't have to repurpose facilities that are kinda doing something else at scale and be behind the crisis all the time? And I think that's a really interesting challenge to tackle, which is what are the goods or services that are really critical in our society, and how do we have the capacity in our community to deal with that in an efficient way without having a single point of failure? And I think people are wrestling with it all over the world.

(Joel Beasley at 00:43:22) Yeah. I think this will bring up a whole new wave of concerns. I mean, I'd be surprised if, you know, state legislature or state government didn't decide to, you know, build some of these concepts of, like, these facilities that manufacture basic things that you would need. I mean, for sustainability of a population, it just would make sense. Like, if aliens came here, they'd be like, why don't you guys have this type of stuff?

(Lachlan at 00:43:51) Yeah. They probably have a whole heap of questions for us, like, why are you people doing it this way? But, yeah, PPE is probably way at the top of their list at the moment.

(Joel Beasley at 00:44:01) Yeah. Or they just — they would know why. They'd be like, we're just waiting for you guys to mature a little bit. This is probably just, like, part of our puberty, and we go where everyone's cruising along since, like, the fifties. Everything's going good. No war, booming economy historically from, you know, if you look at fifties to today. And then we just all realized, like, oh, wow. Like, we can die. And we have a very fragile system that was built really fast, and there wasn't any need to build redundancy in.

(Joel Beasley at 00:44:37) And now we need it.

(Lachlan at 00:44:40) Exactly. It'd be great if you could share maybe with my team your take on working in a distributed fashion. I know you've got a lot of experience in trying to manage clients and team in a distributed way. And also, I know that you have a growth mindset and are a student of leadership, let's say. How are you facing this crisis with your team and personally as well?

(Joel Beasley at 00:45:13) Yes. So distributed work, not hard because we were already pretty distributed. I would say the things I learned when doing distributed work were very clear objectives and outcomes and making sure those are tied to revenue and, you know, customer happiness. So the more clear you are on what the exact single tiny thing is that needs to be achieved, like, what's the metric you can measure that's, like, so small, so you really only wake up and have to focus on, like, one or two things and know and have confidence that those two things materialize into revenue.

(Joel Beasley at 00:45:51) That is what I say would be, like, the single hardest part. For us, we figured out it's, uh, we do this thing called planting seeds in the morning. We collect ideal customers' profiles. We reach out to them. We do advertising campaigns to them. So it's like, how many seeds did we plant this morning? And then how many meetings got set this week? And then how much revenue did we close? And we literally just every single day focus on those things. And we talk about them, we track them in a spreadsheet, and we just hyperfocus on those things.

(Joel Beasley at 00:46:24) And other projects come and go, but we make sure that those are the things we focus on because for our business model, those are things that happen to completely matter. We already care as humans, so, like, we're gonna do good at customer service. We are a smaller team. Right? So we're under 15 people, but we're gonna care about customer service. We all really care. As the organization grows, you're gonna have to change, but that's where we are at today at our team. For growth mindset, I would say it's incredibly hard. The hardest thing is that you have to stay in the loop, meaning you have to consume some sort of media, and media is, like, horribly negative. And they're designed to write the most fearful things so that you read the next story, so that you come back, you watch the ads, so that they get more impressions.

(Joel Beasley at 00:47:12) And so they're designed that way, so you have to, like a diet, balance it. Right? So I just — I set up specific time. I give myself 15 minutes per day to go read the headlines and check everything, and I stop myself at 15 minutes. In the morning, when I get up, my first hour or two of the day is, like, no technology or anything. I just focus on — I go for a run. I make a good breakfast. I don't eat crappy food, so I don't wanna spike, like, my blood sugar or anything. So I eat good breakfast, high protein, high fat, and then I listen to some audio. Typically, somebody smart or positive, whether it's like a motivational speaker or somebody giving a positive speech, like a famous business person.

(Joel Beasley at 00:48:01) I listen to somebody that has a positive mindset because, physically, with your body and the way your mind operates, you'll produce different levels of serotonin and different chemicals in your brain, and so you wanna make sure — I do the exercise to hit that part of it. That releases certain chemicals. Simon Sinek has a great talk about the different, like, dopamines and serotonins, like, how to release them, like, triggers you can use to release different types of good feeling things. So I trigger myself physically. I trigger myself mentally, and that sets me up for, like, this baseline of the day.

(Joel Beasley at 00:48:37) And then I let the world beat me up a little bit. Then I have a good lunch and do some jumping jacks, try to listen to something for 15 minutes, and then keep it going. But focusing on what I can control, really focusing on what I can control — I built a little — trying to — I built part of a gym in my garage. My wife got her hours all cut and furloughed, so she started watching videos on how to refinish cabinets and offering to, like, refinish people's cabinets that we know.

(Lachlan at 00:49:14) Wow.

(Joel Beasley at 00:49:16) Yeah. And so then we — we stopped parking in the garage. We took both cars out, and then her side of the garage is where she's refinishing cabinets for friends. And then my side of the garage is where I'm working out and, you know, that's kind of the big changes in my life and how I'm handling it. And on top of everything is, like, it's incredibly hard. It's just super hard. It's very difficult, and it's not easy. And I usually have, like, on a given month, I usually have, like, one or two bad days. Right? I think I'm up to, like, six bad days a month.

(Joel Beasley at 00:49:54) So yeah, it's definitely gone up. And I consider bad days days where I, like, fudge a little bit on my disciplines. Right? Like, maybe I go to bed 30 minutes later than I should have, or maybe I eat 100 calories more that day than my diet had predicted that I eat, or maybe I do one set less. You know, those are days that — that's how I — that's what I consider a bad day. I beat myself up over it. Yeah.

(Lachlan at 00:50:30) I have bad days as well. Not everyone's Jocko Willink. Right? That's it.

(Joel Beasley at 00:50:36) Right. You try to be. It's a good flag to follow.

(Lachlan at 00:50:39) I love Jocko, and I love his Instagram pictures every morning of, you know, like —

(Joel Beasley at 00:50:39) Me too.

(Lachlan at 00:50:39) 3:20 in the morning, in that really gruff voice that he has. What I like to do is look at whenever I wake up and the time difference between that and that and laugh because I'm no Jocko these days. Right? I'm approaching middle-aged dad, and I think that you've gotta have some perspective as well. You're not always going to be the best version of yourself. I think what matters is that you try, right? That you're always striving towards it. And that you realize that some days you just can't — you can't do all of the things that you would like to. Yeah, I do the same way, have some cheat sets or some cheat meals.

(Lachlan at 00:51:29) But I think when you have that kind of higher background noise, psychological pressure of the moment, focusing on what's important as well — so there's how you feel and whether you're being productive at work and treating your team the right way and displaying those leadership lead-by-example qualities, but then it's just as important or more important at home, right? Are you bringing it home with you and are you being calm for your kids? And I'm still working through getting the balance right as well.

(Joel Beasley at 00:52:04) Yeah. And it's just popped up to us as, like, a skill we have. You know, as you were talking earlier, I was thinking one of the topics we might wanna cover maybe at the virtual summit is how you lead your teams through this. You know, how do you lead your family through this? You know, I was —

(Joel Beasley at 00:52:23) I was having different conversations with my wife, and I'm like, you know, communication is incredibly important. If you think that the same way that everyone's comfortable with, the team's gonna feed off your energy, right? The team's gonna feed off of your mood and how you're perceiving things and how you set the standard. The same is true at home.

(Joel Beasley at 00:52:45) And often I find myself like, you know, I don't wanna go home and unload on my wife, right? Like, you know, shit, we lost some revenue. This is not looking good.

(Joel Beasley at 00:52:57) You know? Because she's gonna be mama bear and go into protective instincts, and she's gonna say, you know, shut it down. Like, let's save everything. I'm like, no, no, no, no. I just needed to vent for a minute. And so I made that mistake a couple times, and the way I countered that mistake is finding people who you can talk to about that.

(Joel Beasley at 00:53:19) Yeah. Whether it's like outside counsel, help, someone through your board, or someone through a friend of a friend. You know, there are people out there, like a lot of people out there, who are willing to talk and listen and give you objective. Worst case, you just pay somebody $60 for an hour, and you get that stuff off your—it's a tactical and strategic method of dealing with something that's very legitimate and very real. You have to get that out, and if you get that out to your team, not good.

(Joel Beasley at 00:53:48) If you get that out at home to your family, then you're gonna create doubt in your family, and they don't need to see the leader of the family as doubtful. And so I was doing these things, you know, and I was realizing, okay, like I have to find an outlet for this, and then you just you figure it out. And then once you get that outlet, then you can go in calmly and get that off your—it's just, it's like resistance, you just gotta get out. It's like this built-up energy that you have to let out.

(Joel Beasley at 00:54:19) It's like you have to talk about it, and you just have to make sure you're talking about it to the right people at the right time.

(Lachlan at 00:54:26) Yeah. I really like what you said. I think it takes a lot of bravery to be able to have those conversations, at least for me. I grew up in a rural Australian community where men never showed any kind of weakness, right?

(Lachlan at 00:54:43) And what it led to was lots of really kind of emotionally stunted men that weren't happy. And I've been super lucky to have a couple of really good mentors that whenever I've gotten stuck, right, so there's a problem I can't solve, if I've had some kind of business challenge, I'm trying to figure out how to balance a demanding career with, you know, this desire to be a really good family member, a family man, because that's what's really important to me, is family. They've always been able to do two things. The first is listen, right?

(Lachlan at 00:55:23) And it really is quite cathartic to just have that pressure release of communicating with someone without having to kind of heroically bear the burdens, right? And it takes you outside of yourself for a minute as well, and you can see, well, hang on. I've been carrying this stuff around. And then they help you kind of readjust to, alright, what's the goal?

(Lachlan at 00:55:45) What are you doing to achieve that? What's your mission? And particularly ex-military guys were really helpful for me to put things into perspective and to become like a happy warrior. So a happy warrior is someone that's, you know, no matter how difficult it gets in training or on the battlefield, they always have a smile on their face. They're very focused on their team.

(Lachlan at 00:56:11) And one of the ways that I've tried to live that, can't live it every day, but it's something I strive towards, is focusing on, if my team is happy, I'm happy. And really trying to take the pressure off yourself to be perfect all the time, right? If you're going in the right direction and if you're leaving it all on the field, there's nothing else you could have done from an effort perspective, then you've had a good day.

(Joel Beasley at 00:56:38) Yeah. And that's what I strive for. I strive to have those days, and then I proportionately beat myself up when I don't achieve them because there has to be a consequence to not achieving a standard. I mean, they're ultimately all just thoughts in my head, right?

(Joel Beasley at 00:56:54) And so I have to reward myself as well as punish myself for hitting goals. And that ability, that discipline to keep doing that, I found is the most difficult thing I've experienced in life because it's you versus you. And you're the one that can let that rope go, and you're the one that can tighten it up. And you're also the one who has to look at the mirror. Like, it's a—I think life is a beautiful thing, and it's also a difficult thing.

(Joel Beasley at 00:57:26) It's a wide spectrum of experience for sure.

(Lachlan at 00:57:32) Yeah. I think I used to put a huge amount of pressure on myself to be perfect, to be the best at whatever I did, no matter the effort or the toll, right? And I think having kids and getting older and having businesses that are successful and fail give you perspective. And one of the great things that that perspective has given me is that what really counts is how you approached it. So did you leave it all out on the field to use a pretty tortured kind of sporting analogy?

(Lachlan at 00:58:08) But I know that if I did everything in my power to make something happen or to do it the best of my ability, and I did it in a way that was positive to the people around me, then that's enough.

(Joel Beasley at 00:58:19) Yeah. It's like figuring out what makes you tick. Like I used to think, you know, in my earlier twenties, it was like money, right? It was like I want more money. I also loved programming.

(Joel Beasley at 00:58:29) And I was like, I wanna be the best programmer in the world and I want a lot of money. And then I realized when you get to the top, it's like a bunch of experts just arguing about best practices. And then if you go for money, you realize, like you can absolutely work yourself to death. Like that is an option. You can check the box on that option and kill yourself working.

(Joel Beasley at 00:58:48) And it's this interesting thing where your mind can push harder than your body can respond. You can reach that limit, and it's actually not that hard. We did a startup. We both had startups. We've reached that limit where we're saying, I can push myself to sit here for another hour and try to move forward, but my mental state is so bad that that'll actually create, put me in a worse situation.

(Joel Beasley at 00:59:14) I—the smartest move is for me to rest, and that's a hard thing to do. It's like you want something, but you've gotta rest right now.

(Lachlan at 00:59:22) Mhmm.

(Joel Beasley at 00:59:22) And then you realize, like, wow. This is an interesting thing because you can kill yourself working too hard. You can lose everything working too hard. You can be a horrible parent. You can watch your kids grow way too fast and not be a part of that, and then you start realizing, okay.

(Joel Beasley at 00:59:43) How do I just design, like, a really good twenty-four hours?

(Lachlan at 00:59:46) Mhmm.

(Joel Beasley at 00:59:46) You know? How do I design a twenty-four hours where, like, if I die, like I'm cool with it? And that's when I found that, like, it wasn't the pursuit of the money that was making me happy. It was the growth along the way.

(Joel Beasley at 01:00:01) And then I constantly make list of things that make me happy. And then whenever I'm like not happy, I'm like, alright, if I wanna feel happy, the hardest thing to do is flip open that phone and look at that list and then start executing items on that list. And yeah, that's the—and it's the beautiful part because it's like it's constantly renewing battle. Because, like, we wake up and it's like a reset.

(Joel Beasley at 01:00:25) And it's like, oh, I have the opportunity to do this. And one of my favorite Jocko things is when he's talking about success and failure being really slow. He's like, they typically—have you heard him say that?

(Lachlan at 01:00:36) Yeah, I have. Yeah.

(Joel Beasley at 01:00:37) Oh, so—because he's right. It's like these compounding actions that happen over, like, days and turn into weeks and then months, and then that's what—it takes a long time in both directions.

(Lachlan at 01:00:48) Yeah. Yeah. That's exactly how I've experienced that. There's no—nothing happens kind of overnight. But yeah, what you said is really interesting.

(Lachlan at 01:00:58) I think that one of the ways that I've kind of approached it is there's no gold medals for exhaustion, right? They're not—anyone there, you know, the twenty-third hour of your coding marathon, like giving you water and Gatorade and telling you to push further. And I found that when I have a healthy balance in my life, I'm much more effective.

(Lachlan at 01:01:29) And I think that really just comes with experience. I think there's a lot of entrepreneurs, let's say, that that espouse this kind of constant grind mindset, right? And I think a lot of that's just not real, and a lot of it's motivated by money, right?

(Lachlan at 01:01:47) Or they're trying to sell something to people that just haven't done it. I think if you have had your own business, you've built technology, you've actually seen results, you realize that the journey—to be successful on that journey, you need to be sustainable, and you need to be effective over a long period of time, not just brilliant on the day. And it really comes down to the people you meet as well. And if you're exhausted and too in the weeds and you can't see the real value in what you're doing or able to pivot, investors invest in the person. They don't invest in your algorithm.

(Lachlan at 01:02:29) And what kind of person are they investing in?

(Joel Beasley at 01:02:33) No, you make a good point. And also, like, to add to that, when you're valuing burnout workout-style, right, especially as a leader and you're looking for that in other people, you end up with a burnt-out and ineffective organization, right? But if you—once you gain the maturity and you go through the pain and you do your time and you realize I need a sustainable routine because compounding over time is what's gonna—it works with everything.

(Joel Beasley at 01:03:00) It works with your physical health. It works with your financial health. It works with your—everything is compounding over time. And so it's like, how do I get people—once you get past that, you're like, how do I get people that are gonna come compound with me? And then I'll have the patience to coach them through—I mean, if you beat yourself up, how long did you do that startup for? Like two years?

(Lachlan at 01:03:24) Two years. Yeah.

(Joel Beasley at 01:03:25) Yeah. Once you beat yourself up and go through all of that emotional roller coaster over the course of two years, like, you just—you don't forget those lessons.

(Lachlan at 01:03:35) No. Yeah. There are scars by this stage, I think.

(Joel Beasley at 01:03:39) Yeah. So what's your main—like what's generating you revenue at work? You're working on the smart contracts with other clients now, or what type of stuff are you doing at BCG?

(Lachlan at 01:03:51) Yeah. So at BCG, I'm tackling procurement from an operations perspective, which is how does a company interact with its supply base, its supply chain, and really looking at how do we leverage digital procurement—so digital tools, whether that's being able to aggregate those disparate data sources into something that's meaningful to make data-driven decisions and then interact with suppliers in a much more data-driven way, or looking at things like predictive analytics or AI over the top of really large complex distributed networks of suppliers to drive insight and value. So, to our wash plan example before, understanding what are those kind of critical parts, where may they fail, but at the same time, if we could build that digital twin of a really complex operation from the pit to the port, we say. So from where we actually mine the ore, all the way through to where it hops on a ship and all of the processing steps in between.

(Lachlan at 01:05:13) You can then get an understanding in a digital way of how the trucks and excavators are moving to the mine plan, how efficient they are, where they're dumping into the hoppers to go through the processing facilities, how efficient the processing facilities are, and you can start to really identify, A, how is my value chain constructed? Where is the friction between each kind of part or phase of that value chain? And how do I optimize the overall value chain by pulling a lever in processing or pulling a lever in the pit? And then the beauty of a digital twin is you can run simulations to understand the impact of decisions that you may take instead of in the world at the moment trying to make those decisions with a lot less data. And you're right, a leader has to make decisions without all the data available, but the more data, hopefully the better the decision, right?

(Joel Beasley at 01:05:47) Oh, absolutely. Yeah. If you can get high-quality reliable data, then you just—you consume that and then your experience does its thing, and then you're better positioned to make a decision. So you're building that, like, that digital twin that's like a software product or something, and that's like what you help build?

(Lachlan at 01:06:08) Yeah. So we have a couple of teams at BCG that are world-class at building these kind of digital products. One of them is called BCG GAMMA. So it's our data science division. And GAMMA will help companies define how they can drive value from their data.

(Lachlan at 01:06:28) Usually, big data is really messy, distributed, and where I'm particularly kind of interested in driving work at the moment is how do we leverage these kinds of technology in a supply chain space or from a supply chain perspective? Because we can look at our operation across the value chain from end to end, from pit to port, but we should open that value chain up to understand what are the key inputs or actions we take that impact our suppliers. If we want a specific specification truck that operates to a specific kind of set of conditions in a mine, is that the right design for that truck? Or can we leverage generative design with our suppliers to understand, here's a particular kind of operating conditions, here's the particular maintenance plan or the complexities or variables around how we operate or our constraints from a capital or efficiency perspective, the lengths of the haul runs, for example. How do we design a better product together in a collaborative way to reduce the cost that we put on to the supplier and then ultimately the cost that we receive from the supplier and form a contract?

(Joel Beasley at 01:07:43) Dude, that is actually—that sounds like really fun.

(Lachlan at 01:07:46) Yes. It's a really amazing place to work. And, like I said, the key challenge in my past, in my startup, was trying to find the right team, and it's really exciting to be around people that want to take the smart contracts and digital procurement and scale it right across a whole heap of industries and move quickly. So it's what's the kind of laser-focused features driven by data that will have the largest impact and being flexible in what that is or how we apply it.

(Joel Beasley at 01:08:25) That's pretty cool, man. You know, I've also heard a lot of companies doing like divestitures where they'll take an idea, they'll have something that's been, you know, processed a number of times or have a number of customers on it, and actually spin it out into its own thing, like its own brand, but they'll own it, fund it, move team members with it. So divestiture is always an interesting move.

(Lachlan at 01:08:51) Yeah. I think that that's definitely an area of growth for not just consulting firms, but firms in general. So at BCG, we have a division called Digital Ventures. And Digital Ventures are effectively a startup accelerator. So they will help businesses build and scale digital offerings effectively.

(Lachlan at 01:09:18) And they do some really exciting work. We're trying to think through what do companies need on the long term? Like, how can they leverage the data that customers or the strengths that they have in their current offering into a completely new and digital business model?

(Joel Beasley at 01:09:33) Well, shout out to them for being amazing and for having you on the team. Dude, this is awesome. Is there anything that we wanna get out there that we weren't able to get out there today?

(Lachlan at 01:09:43) So I think it's a great opportunity to just talk about the COVID response and the COVID challenge that people have at the moment. We're working with a whole range of people in, I guess, two phases. The first is, what's the crisis response to now? So how do we understand where the risks are in our supply chain, and what can we do to address them?

(Lachlan at 01:10:09) What are those $5,000 parts that could shut down our processing facility, and then what can we do about it? So if we engage our suppliers one-on-one in a fairly manual way now, what's the fastest way to find those gaps, and then how can we leverage our team in a distributed way to try and address or mitigate any of those risks, whether we can't get parts, we have labor shortages, we may have a failure in our system. So there's a crisis response angle. We need to keep the health of our supply chain and try and build some resilience into it quickly and respond to the disruption that COVID is going to drive. And then the second is, what do we do tomorrow? So how do we leverage digital tools and the kind of new way of approaching procurement to drive further value and try and increase the resilience of our supply chain for the longer term?

(Lachlan at 01:11:09) COVID's really demonstrated just how fragile and manual a lot of our processes are about how we interface with the world around us, how we interface with our suppliers. We rely on tendering and manual negotiations. We have non-data-driven contracts, so we have very poor visibility as to what their stock level is or the health of them without actually picking up the phone and talking to them one-on-one. And then it's how do we work in a collaborative fashion to reduce the total cost of our ownership over time. And I think that the digital tools that we discussed earlier to do with—can we look at a digital twin for operations and understand where the friction points are, where we're pushing cost onto our supply chain, or leveraging smart contracts where we've automated the kind of key terms driven by real-world telemetric data?

(Lachlan at 01:12:03) So we understand where the truck is. We understand how many people have passed through the gate or how many people have purchased this item when we've done this advertising campaign. I think will really increase the flex capacity and drive further value to try and respond to the kind of real key gaps that have come from this once-in-a-generation process, right?

(Joel Beasley at 01:12:26) Yeah. I'm interested to—you just sparked the thought—the Google and Amazon data centers are obviously dependent on manufactured competing parts. And what's their status right now? You know, like, if the data center needs to expand, like, you know, do the math.

(Joel Beasley at 01:12:49) If you shut down the production of new motherboards or chips or whatever for X amount of time, eventually, we're going to have more need, more demand for data center space than we can produce data center parts, right?

(Lachlan at 01:13:06) Yeah. Exactly. So then what happens? Exactly. Then what happens?

(Lachlan at 01:13:11) Right? So the key kind of challenge is how do you manage your stock levels, and how do you flex your business depending on whether you have any redundancy for these kind of critical pieces of your value chain? So your data center is a great example. If we are running out of data center parts, right, from a maintenance perspective or new data centers for new business, what does that—how can we leverage the space that we have, make it more resilient, hope that, you know, we find new ways that it doesn't break down or make it more—make the uptime more reliable or dependent, right?

(Lachlan at 01:13:57) You know, independent. Because eventually, we'll run that stock down, and we'll have to look at trying to switch suppliers or trying to develop a way to get those factories switched back on. So you've hit the nail on the head. It's a key challenge of how do you really manage the supply chain risk. And my challenge would be, it's not just the data centers.

(Lachlan at 01:14:21) It's all of the critical componentry around that that would be affected to different levels as well, and how do you quickly find and do something about it.

(Joel Beasley at 01:14:33) Well, lots of interesting—I think the economy is going to have a lot of new opportunity after COVID. I think different countries are going to prepare differently for the next potential outbreak. I think there's going to be lots of new technologies, new types of businesses. I think, at a minimum, some countries will work on making sure that the medicines they need can be manufactured, even if they're not primarily manufactured, that they can be manufactured. Like, certain medicines and certain life-supporting supplies should probably be able to be manufactured by the countries.

(Joel Beasley at 01:15:11) Or and then streamline it too. Like, when I saw all—I talked to the CTO of Ford recently about the ventilators, but I didn't talk to him about this, but I saw, like, all different—like, Dyson collaborated and then Ford collaborated with GE. You know, all these different companies with all these different ventilators, like, why, you know, why wasn't there a standard ventilation design? Maybe it's because, like, they had to design something based off of parts they already had. You know, I don't know. I'm sure there's some good answers to it, but, you know, you would think that there would be—you would think that this problem would be solved, and it wasn't, and it's kind of a surprise. So now I feel like we need to hold people's attention post-apocalyptic scenario to actually do these things versus everyone just talking about them and be like, it was once in a lifetime.

(Lachlan at 01:16:03) Yeah. So you've made a great point, which is, will everyone just go back to what they were doing or how things were? And I think it would be nice for some industries, for some businesses to be able to do that. And I think governments, particularly active in here, are trying very hard to build a bridge between, you know, pre-COVID to post-COVID and kind of get through it and start operating again. But I think it will accelerate the pace of, you know, adopting digital change in, um, procurement, specifically around how data-driven contracts are, how quickly you can make a contractual change, or how quickly you can source something, and the visibility you have.

(Lachlan at 01:16:50) So do we actually understand who the alternative is for this data center maker, for example? Or do we understand what the industry standard is for building a ventilator? And if not, why not? How do we build one? Is it more expensive or less expensive? Is it better quality for the patient or less quality? And I think that from a value perspective and from a resilience perspective, most companies will see that they're going to have to accelerate that change because, A, they're going to be really exposed if this happens again. They've had a lot of challenges around flexing their procurement response, understanding where those gaps are, and moving fast enough. And the second, from a value perspective, is there's a huge value at stake in reducing the friction with how you interact with the outside world.

(Lachlan at 01:17:44) And a lot of those companies are going to be willing and kind of looking to invest in how they make better data-driven decisions as well. So I think there'll be a lot of ground for collaboration in exploring or adopting smart contract technology or adopting, you know, digital tools like the digital twin to understand how do we generate friction and what's the best specifications or way of working, how do we deploy our products most effectively and understand ahead of time from a predictive point of view whether we need to maintain something, whether something will fail, or whether we have a supply chain issue.

(Joel Beasley at 01:18:26) Well, we'll find out. Man, this is good. I really enjoyed talking. I'm so excited to, like, start having more past guests on again because after you get past that first conversation, it's just, like, it's a lot more—it's a lot easier to have the second conversation. So I look forward to having you on again a third time, man.

(Lachlan at 01:18:49) Sure. This was heaps of fun. Thanks, Joel.

(Joel Beasley at 01:18:51) Awesome, man. Have a great afternoon.

(Lachlan at 01:18:53) Cheers. Thanks so much.