AI, People, and the Power of Curiosity with Jim Harris, Keynote Speaker and International Bestselling Author

(Intro Narrator at 00:00:00) Today, we're talking to keynote speaker and international bestselling author Jim Harris about the nature of disruptive technology in 2023. You're listening to Joel Beasley, Modern CTO.

(Joel Beasley at 00:00:17) Jim, it's good to see you, man.

(Jim Harris at 00:00:19) Hello. Good to see you.

(Joel Beasley at 00:00:21) So you started as a journalist working back when journalists used to get paid. You could be a job, and it wasn't just a super hard thing to do. And then when did you transition from just being a journalist to having this personal brand? How did that develop?

(Jim Harris at 00:00:36) Well, couple things happened. So first off, I wrote this book, and it was a national bestseller. And then the moment it came out, well, even before it came out, people began calling me saying, "Hey, we want you to come speak at our conference and tell us what the best companies have in common on strategy or employee engagement." So I went on to the speaking circuit. This is more than thirty years ago. And then I ended up connecting with Stephen Covey, who wrote The 7 Habits of Highly Effective People. Powerful, powerful book. And I represented Steven for six years teaching the seven habits. Then I brought out my second book, which was called The Learning Paradox. And when I published the first book, after it came out in 1990, IBM laid off 200,000 people worldwide, half its workforce. So I began to say, if not even the best companies can provide job security for people, what does create job security?

(Jim Harris at 00:01:44) And I came up with an answer, which was learning, changing, and accepting uncertainty. And what we tend to fear most as adults is learning, changing, and uncertainty. And so I called that book The Learning Paradox. You can just see it right here with a baby on the cover, because our very job security is based on the things that many people fear the most. And then I've written a number of other books, but Blindsided came out, which looks at disruptive innovation.

(Jim Harris at 00:02:16) And so, for instance, right now, Tesla is worth more than 17 traditional car companies combined. That's head spinning. Or Uber is worth more than every taxicab company in North America added together. And so while the taxi industry owns billions of dollars of assets in the form of cars and limousines, Uber doesn't own a single vehicle. And to me, that shows a widely distributed app is a huge multiplier on valuation. It also shows me the collapse of traditional business models where you measured, you look at the asset base. Well, the assets aren't physical cars anymore. The assets are innovation and technology with a multiplier effect of having a widely distributed app. So the rules of the game are totally different, and there is so much disruption that is happening in every single industry conceivable. So I got into this whole field of writing, thinking, speaking, consulting on disruption. And then because of that, I've been going to CES and COMDEX before it for the last thirty years, because technology is a huge enabler of this disruption.

(Jim Harris at 00:03:45) It disrupts business models. So I've been going to CES in Vegas. It's an annual pilgrimage. I also go to Davos for WEF, and I go to MWC in Barcelona, which is the preeminent mobile conference. So everything I do focuses on disruption.

(Jim Harris at 00:04:08) Now I want to give one example here just right up front in the show, how it's not all about tech. So we need to deconstruct jobs. The pandemic has thrown a monkey wrench into so many industries, so many business models. It has accelerated digital transformation by a decade. So I argue, for instance, in ecommerce, we saw ten years of growth in ecommerce, online shopping, in the first ninety days of the pandemic. That blows me away. So these trends were here pre-pandemic, but they got turbocharged by COVID. So coming back to deconstructing jobs, healthcare workers have been burned out. Some have long COVID, and they had to work double, triple shifts. And there's a shortage of nurses and doctors. And so one medical group, Providence Health, couldn't get enough nurses. So they went and they looked at what is the actual work that these nurses do. And 30 to 40% of their job is keying into keyboards or charting or sticking thermometers in patients' mouths.

(Jim Harris at 00:05:31) We won't talk about where they otherwise stick thermometers, Joel. We'll leave that to the listeners' imagination. But you don't need a professional nurse who's had years of school or a doctor to chart or to keyboard or to stick thermometers in people. So they deconstructed the jobs. They reassigned the 30 to 40% that a nurse didn't have to do to another person who doesn't have to be as highly trained or as qualified.

(Jim Harris at 00:06:06) And, surprise surprise, their nursing shortage went away. So it's not just about the technology. We have to think about how technology enables new relationships, new business models. And we have to deconstruct the way our organizations work, the way jobs work, and reconstruct them given the new reality. So I know your listeners are CTOs, which is all about the technology, but we need the human aspect as well, and that's the difficult part. That's where the rubber hits the road.

(Jim Harris at 00:06:41) So another great example for me is pre-pandemic, the average American worker spent five work weeks a year in traffic jams or on crowded transit getting to or from work. Where is the joy of that? If you're in a Lamborghini, you might think this is joyous, but if you're going one mile an hour in a traffic jam, it's either my knee or the clutch that's getting burned out in the Lambo. Right? So there's no joy in commuting.

(Jim Harris at 00:07:12) No joy. And we found that the pandemic accelerated, it blew up this model that we have to be physically in work to be productive. So how are organizations reconstituting themselves with hybrid work and work from home, and how do we be productive? How do we achieve increased productivity?

(Jim Harris at 00:07:36) I have as a client one insurance company. And I know this is, Joel, the longest answer in the world to—

(Joel Beasley at 00:07:45) It's good. If it wasn't, I would stop you. You know? Is it the gecko? Can you say? You probably can't say.

(Jim Harris at 00:07:52) But so this one insurance company and this sales rep, they believed in the magical properties of ink. You see, ink is magical. It's got Harry Potter properties. You know, only ink can bind a new insurance policy. So the poor sales reps for this organization had to drive two and a half hours west of my city to go meet a prospect for forty-five minutes, hopefully sign a deal, and then three hours, three and a half hours back in rush hour traffic. A whole day to meet one client.

(Jim Harris at 00:08:28) And then the pandemic hit, and nobody could meet anybody. And so thirty years of legal and compliance saying only ink can bind a policy had to evaporate overnight, and they moved to DocuSign. Now was it really a legal and regulatory problem, or was it a mindset problem? Or was it legal and regulatory exerting political power in their organization? Was it really a requirement to have ink?

(Jim Harris at 00:09:01) No. And so the pandemic forced these culture changes, these people and process changes, but that sales rep can now make eight pitches a day, not one pitch a day. So his sales have actually increased. So there are huge benefits when we're forced against our will to cross the chasm and get to the other side and find out how technology can profoundly benefit lines of business and our companies and increase sales and increase customer satisfaction, increase employee engagement, increase employee satisfaction. So I believe we have to—yes, I am a total tech fan—but we have to look at how do we get involved in digital transformation from a people perspective. How do we bring the whole organization along?

(Joel Beasley at 00:09:57) How do you do it? I think—

(Jim Harris at 00:10:00) How do you do it? That's a shorter answer. You gotta answer that one.

(Joel Beasley at 00:10:06) I'll share a quick story with you. So I'm fully on board with this idea of, you know, the insurance company and the ink and going digital. Because when I was starting this company, I did it as a hobby for two years, and then I raised, started to get some traction, raised some money. And when I was going around, it was the first time I had ever raised money by myself. And I remember the group I closed the deal with, I was up in front of them talking, and they were probably average age fifty-five. Right? And they were asking me a bunch of questions, and then they said, "Hey, we noticed in your P&L that you don't have any travel expenses. How do you go get these deals? Tell me about that."

(Joel Beasley at 00:10:47) And I said, "Oh, Zoom." And they looked at me like, "What do you mean?" And I said, "Well, I meet with people on Zoom." They're like, "Well, so you meet people at a conference and then you do a Zoom call?" I was like, "No." I was like, "I just meet people on Zoom." Like, "I meet them on Zoom, we do business on Zoom, and then they send us money." And they were looking at me like I was—That's exactly how easy it is. Right?

(Joel Beasley at 00:11:12) No, but we would do meetings. I send emails. I say, "Hey, you have this problem. We can talk about it. We need to get on a call," because we have an audience. Right? You're familiar with this model. We've got an audience, bunch of tech listeners. People want to get in front of the tech listeners. So we just say, "Hey, we have this audience. Do you have anything worthy of news or something we can work on together as a story?" And then sometimes they say yes, and then they sponsor the show, and that's how it goes. Right? That's how we generate most of our money. And so it was just an amazing moment. And I don't want to rag on them too hard, so Josh can decide if this makes it into the episode because I love them, and they're the best firm ever. Shout out to Florida Funders. They're the largest VC in Florida.

(Joel Beasley at 00:11:51) But I remember that same time standing up in front of them pitching them, they had asked me if I had been doing any radio advertising, and I said, "Well, what do you mean? I was like, Pandora or Spotify?" They're like, "No, like radio in the car." I said, "Oh, those still exist?" Because in my world, I have not been on cable or used anything. I've been using Pandora and Netflix for media consumption for over ten years. So this idea that I would use my car system for anything other than pairing to it and playing exactly what I want to hear through Pandora is a foreign concept to me. I figured, because I saw iHeartRadio release apps and I saw everyone start to do this other stuff, I figured that the radio stuff had just maybe gone away or stopped, but it didn't. There are still radio stations, and they'll play ads a bunch and music, and people still listen to it. Sadly, my wife's one of those people. I'm sorry, Jim. She likes the radio.

(Jim Harris at 00:12:46) Well, this really reminds me, who is closest to the future? The sixty-five-year-old CEO who has his assistant print out all his emails for him to read, or the eighteen-year-old who's on Tinder? You know, who does all the strategic planning? Who is most disenfranchised from strategic planning? Is it any wonder we only get incremental change?

(Jim Harris at 00:13:12) So I don't want to be ageist. I don't want to suggest just because you have gray hair or no hair, you can't change the world. When he was CEO of General Electric, Jack Welch knew nothing about the Internet. So he had the humility—Stephen Covey used to say the first virtue of leadership is humility—he had the humility to get some twenty-year-old who came in every week and mentored him on the Internet. It's called reverse mentoring. So the question to all the CTOs listening today or C-suite or CXOs would be, do you have a reverse mentor? Do you have some Gen Z who comes in every week and teaches you about what the cool new things are that they're using and how they're using them? Now you can't just confuse a technology with deep business wisdom.

(Jim Harris at 00:14:09) I remember when the Internet launched into our consciousness with the web in 1993 that one of the coolest applications was a fish cam. So this was a camera pointed at a goldfish bowl, and you could watch the goldfish swim around. The techies thought this is the best thing ever. Like, okay. Love it. Love it. Great. But what's the business use case? How do you actually do this in a way that's going to generate a business model? "Well, I don't care. It's just cool."

(Jim Harris at 00:14:47) So we can't leave everything to the techies. We need a tech-forward vision married to business wisdom. So it's like Jack Welch and the twenty-year-old mentoring him. How do we take that business knowledge and marry it to the technology to create something new that nobody's ever seen before?

(Jim Harris at 00:15:10) So it's not an either-or. It's an "and." So the question for an organization from my perspective is, do you have a shadow board? You know, you have a board of directors or an executive committee, and they make all the CapEx decisions, big decisions. Do you have a shadow board of millennials and Gen Zs, and you run all your major decisions by them?

(Jim Harris at 00:15:31) And they say, "Oh, that's brain dead." I was at a conference once. I talked to a lot of CEOs, and we had so much fun at this conference that they invited me back to speak again the next year. And at the dinner for the sponsors the night before, one CEO, his name's Jeff, and he has a company called Almita. They do helical pilings for pre-construction. It's like big screws that go into the ground to create stability for a high-rise. Jeff came up and said, "Look, Jim, I gotta tell you what happened in the intervening year." I said, "I'm all ears." He said, "You told us about assetless expansion like Airbnb and Uber that can grow exponentially, but no CapEx requirements. You told us to create a shadow board of millennials and Gen Zs and run major decisions by them."

(Jim Harris at 00:16:23) "That's what I did. I wanted to expand, and the way I would have done it is a $15 million custom design-build manufacturing facility. But my shadow board said that's brain dead. Why don't we just go find"—and this, by the way, is pre-pandemic—"Why don't we just go find a facility that's overbuilt and rent it?"

(Jim Harris at 00:16:46) So he did. He found a brand spanking new facility the owners had overbuilt by more than 100% to allow for future expansion. They had no plans to use it for the next three to five years. He got to rent it literally pennies on the dollar of what his approach would have been. So then the pandemic hit, and let's look at the implications of this pivot in mindset.

(Jim Harris at 00:17:11) So one, he totally de-risked expansion. He didn't have the $15 million CapEx. Timewise, the cycle time of getting up and running was cut by 90% because the new facility was built. He just had to put the equipment into it. He was cash flow positive from day one and profitable from day one.

(Jim Harris at 00:17:32) And then the pandemic hit, and he wasn't left servicing $15 million in debt. And so what I said is, "Jeff, what you're really saying is coming to this conference last year, hearing me speak, changing your mindset was worth $15 million to you." And he goes, "Yeah, Jim. I guess you could say that." And I said, "You're paying for my dinner tonight, man."

(Joel Beasley at 00:17:54) I'd ask for a check.

(Jim Harris at 00:17:56) Yeah. I gotta change my business model to take a percentage of this. Right? Some small percentage. But really, you know, we can't just pay lip service to mindset.

(Jim Harris at 00:18:09) We have to have systemic systems and structures in our organizations to promote ways of seeing things differently. And the shadow board of Gen Zs and millennials is an example of a systemic approach. Like Jack Welch having this twenty-year-old mentor him, reverse mentor him every week is a systemic approach. So how are you staying fresh? And what triggered this, Joel, was, you know, the VCs having no idea that you could have a business model without ever meeting.

(Jim Harris at 00:18:44) Like, think about all the cost that is stripped out of the old model that you don't have to fly places and meet people and stay in hotels and eat meals, but you can have an amazing business and tuck your kids in at night. Wow.

(Joel Beasley at 00:19:02) And that's going to make the world better because you're more present as a father and or a mother. And, yeah, I'm curious. Systemic approaches, the shadow board's a great example. I see that as more of a learning and changing connection to the learning paradox that you have. What about accepting uncertainty? Has anyone had a successful systemic approach to that?

(Jim Harris at 00:19:24) Oh, that's a good one. Well, I'm gonna get a little bit philosophical here for a second. There's an ancient Chinese religion called Taoism. It's spelled with a T. It doesn't sound like how it's spelled.

(Jim Harris at 00:19:41) But I can only understand things in terms of analogy or stories. So here's how I understand Taoism. Three thousand years ago, in rural China, there was a small village. And in this village was a farmer who owned his own horse, so he was the wealthiest person in the village. He used it for transportation and plowing his fields.

(Jim Harris at 00:20:07) And one day, his horse ran away. And all the villagers said to him, "What terrible luck. All your wealth has just left you." And he said, "Maybe." And two days later, his horse came back, bringing with it two wild horses.

(Jim Harris at 00:20:21) And they said, "What incredible luck. All your wealth has returned. In fact, you're three times as wealthy as you were. You're now the richest person, not just in the village, but the district." And he said, "Maybe."

(Jim Harris at 00:20:34) And that day his only son was out riding one of the wild horses, trying to tame it. It bucked him off and he broke his leg. And three thousand years ago, a broken femur was life-threatening. And they said, "What terrible luck, your only son with a broken leg." And the farmer said, "Maybe."

(Jim Harris at 00:20:52) And the next day, the emperor's men came through the village conscripting every young man to fight in a war, taking every young man to their certain death, except for the farmer's son. And the villagers said, "What incredible luck." And he said, "Maybe." And really, this is what life is like. Sometimes the most wonderful situations are not that great in hindsight, and sometimes the most difficult situations are really the seedbed upon which glorious things are built.

(Jim Harris at 00:21:23) But I really don't know what it is. We unfortunately live life going forward, but we only understand it in hindsight. So the question for me is, how do I live with joy, calm, and serenity of the farmer regardless of what's happening in the external world? How do I have that? And many people—for instance, what comes to mind right now is with ChatGPT being the fastest-growing app in the history of the world, going from zero to a million users in five days and now two months, a hundred million users—people are fearful.

(Jim Harris at 00:22:05) Some people are fearful about AI. "AI is gonna take my job." Well, if you're doing something that is dull, dirty, or dangerous, it's a good thing that AI takes your job. Because, you know, if you're just keying in data, rekeying in data, that is the most boring job in the world. AI can do that.

(Jim Harris at 00:22:26) You can do something more interesting. Do you know that up to 80% of phone calls into an IT support center are people just resetting their password? How exciting is that to be on the other end of the phone? In fact, could an AI do that just as well? Maybe even better with seven-factor authentication: your voice print, the phone number you're calling in on, the retina scan of your eyes if you're on Zoom together. Seven-factor authentication.

(Jim Harris at 00:22:57) It's more secure, and boom, all the people now can do half-hour calls, not five-minute calls that are brain-dead, and more exciting things. So we often think in polar opposites, black or white. It's not gonna be AI or people. It's gonna be companies that use AI with people are gonna outperform companies that don't use any AI and just have people. So it's not gonna take our jobs.

(Jim Harris at 00:23:23) It's gonna change our jobs. We're gonna have to upskill. We're gonna get more exciting work. So I don't see these polar opposites. But people often think it's either good or bad.

(Jim Harris at 00:23:34) And in the story of the Taoist farmer, I live life going forward, but I only understand it in hindsight. So in fact, the farmer's son breaking his leg was the most fantastic piece of luck he could have ever had because he didn't face certain death in a war. So how do I look at change and remain joyous as I go forward, as opposed to generating a fear response?

(Jim Harris at 00:24:09) So how do we help organizations transition? And this is where we get back to that people part that we were talking about before. I think I've gone down a little bit of a rabbit hole here, Joel. Help me.

(Jim Harris at 00:24:21) Bring me back.

(Joel Beasley at 00:24:21) Yeah. I've got a bunch of stuff for you. Everything you say sounds good, so I'm just taking notes for a while. The farmer story—I have found that to be more often the rule than the exception, at least in my life.

(Joel Beasley at 00:24:35) You know, the worst thing that most people would say ever happened to me, which is when I got hit by a car when I was about 11, 12, and I was in a wheelchair for two years—that most people would look at my life and say that's the worst thing. For me, I think it's the best thing that's ever happened to me. It taught me humility, having people have to take care of me physically. It allowed me to be inside at the computer more where I picked up a lot of my skills that ultimately led me down the career path I chose. And I didn't realize this until about a year and a half ago when my sister-in-law said, "Hey, my sons, they're wild boys, like to play in the street, and they're not watching for cars correctly. Can you go tell them your story about how awful it was with you getting hit by a car and how it messed up your life and all of that?" I said, "Vicky, I can't. This is the best thing that ever happened to me." So I get it.

(Joel Beasley at 00:25:25) I'm curious.

(Jim Harris at 00:25:26) Go ahead. Can I jump in on one thing? So I wanna share my experience of having a medical problem. So I get a symptom, something's wrong, and I have to call my doctor. And it takes me four weeks to get in to see her, typically.

(Jim Harris at 00:25:47) And if I have something else that's come up that day, like a client wants me to be in Las Vegas for a keynote, I have to cancel and get another appointment eight weeks away from when my symptoms first appeared. And then on the actual appointed day, it takes me a half day. I have to drive to her place, find a parking spot, and then I go sit in her waiting room with people who are coughing, sneezing, and scratching. And really, Joel, it's the scratching people that bother me the most.

(Jim Harris at 00:26:22) And I have to wait for an hour with them until I get to see her for my seven and a half minutes. And then she sends me off next door to the lab where I sit with a whole new group of people who are coughing and sneezing and scratching. She's in a medical building where they draw some blood. And then I go down to the pharmacy, and I wait with a whole new group to get some prescription. And then I get home, and it's taken me an entire half day. It is insane, and parking costs.

(Jim Harris at 00:26:49) But during the pandemic, it forced people to begin using telehealth, eMedicine. And in China, 50% of all medical visits during the pandemic were virtual by smartphone. And in the US, it's now a billion visits a year according to McKinsey. So the pandemic forced us to change for the better.

(Jim Harris at 00:27:16) Because during the pandemic, I had some symptoms, and I got an appointment that day—same day—for 15 minutes with a real doctor using video conferencing. Now it was a proprietary system because there's all of security and blah blah blah, whatever. But I got to talk to him, and he assigned a set of tests which were sent to me. I physically printed out a requisition slip, and I took it to a lab that's just a block away from my home, had the blood pulled. Two and a half days later, the results are there online.

(Jim Harris at 00:27:57) I get a new consultation with the doctor again, and boom, he prescribed something for me. And we've taken an eight-week cycle time and jammed it down to two and a half days. And I walked to a pharmacy that's one and a half blocks away from me. From a patient perspective, this is amazing. This is incredible.

(Jim Harris at 00:28:20) Who wants to suffer symptoms for eight weeks not knowing whether it's serious or this is just something that'll go away with some antibiotics or whatever? So there's a huge enhancement in going digital, but the medical system resisted this pre-pandemic. We, in fact, don't practice evidence-based medicine. We practice reimbursement-based medicine because the system didn't reimburse the doctor for a virtual consultation, so surprise, surprise, they didn't do them. But when the pandemic hit, the system had to change.

(Jim Harris at 00:29:00) And this is back to the bit. It's not about the technology. It's about the system. Edward Deming said 94% of problems in organizations are bad or misaligned systems and structures. We have to systemically change our organizations.

(Jim Harris at 00:29:16) So if the doctor's not compensated for doing a virtual consult, don't be surprised they don't ever do them. So how do we align incentives with patient outcomes or patient experience? We'd call it user experience or UX or CX so that we get the best outcomes. Nobody thinks about my time. What's the opportunity cost of me taking a half day off to do something that would only take 15 minutes online?

(Jim Harris at 00:29:48) And now if I have something really serious, maybe I wanna see a doctor, or certain things—you want the doctor to feel my arm or something, whatever, or take an X-ray. But for a lot of things, we can do it this way. So how do we enhance our system, shorten wait times, eliminate backlogs using technology?

(Joel Beasley at 00:30:15) Absolutely. Yeah. This is close to me because I have two physicians in my immediate family. And so when they're not available, we'll use something like Teladoc to get on there. But it's amazing to me how when that did happen, you start to realize that 80%—I'm just making that up—but 80% of the visits seem to be visits where that could be done online. Right? And you're exactly right. They'll send you off to the lab, LabCorp or something down the street, and you'll run the labs, and then they'll do their prescription. It's a pretty straightforward process.

(Joel Beasley at 00:30:50) So I think most of them are still doing it. I know some of them have actually stepped back from doing the virtual consultations. I got a letter from one of the doctors that I had in Florida, and he said that when something expired, some law expired, and he can't do the visits for whatever the specific type of thing or whatnot. Or because I was in another state and it didn't overflow to the other states. Because I think for a while, doctors could practice in any state in the pandemic under some emergency orders, and now they can't.

(Joel Beasley at 00:31:27) So overall, net positive and the changes. But I wanna change the topic because I'm curious to share a brief story about me in ChatGPT and how I was scared and then how I stopped being scared. Because you've spent your entire career in disruption and technology and uncertainty. And then I'm hoping you could give me some perspective on how I went about it. Is that okay?

(Jim Harris at 00:31:52) Sure. Love to hear it.

(Joel Beasley at 00:31:54) So my background is software engineering, and so I wasn't a stranger to language models, and I've seen them hanging around for a while. When I saw ChatGPT, at first, I dismissed it. And then one night, I was on YouTube, and I saw somebody doing a tutorial of how they're doing this project with ChatGPT going to help them writing some code. And I saw them interacting with it in a quick, like, two-minute video, and I said, "Get out of here. That can't be what it actually is."

(Joel Beasley at 00:32:19) And so I started digging a little bit deeper, and I said, "Woah. This is unbelievable." And I signed up for the trial or the free thing, and then I started talking to ChatGPT. And I said, "This is—" I got legitimately scared. But I, you know—humans, when I get scared, I usually have a process of, okay, how do I reason about this? How do I understand it? And then leverage it to move forward because I'm not the type to stick my head in the ground. And it usually happens for me pretty quickly, but this time, it took like a week.

(Joel Beasley at 00:32:56) And the way I came back from it is I tried to extract some principles to not be so scared. Because I saw the deepfakes. I saw the ability to replicate voice perfectly through text, and I was trying to think of what could put me out of business. Right? And it seems like all the technology, or at least the beginnings of all of it, are there. So I said, to not freak out, how am I gonna deal with this?

(Joel Beasley at 00:33:11) Well, I need some core principles, maybe some first principles-type deal where I can reason about it that way. And so I said, the first thing I know is early on in my career, I was building software that made teams more efficient. Maybe you could have a team of 20 people, and then after you use the software, you'd only need a team of two people. Well, I went in physically to their offices to help them with this, and I saw that the people that stayed were ultimately the people that were curious. They were the curious people. Right?

(Joel Beasley at 00:33:37) And so I said, okay, whenever I see this big disruption, a lot of people complain about it. A lot of people ignore it, and then a small subset of people get curious about it, play with it, learn it, and then they end up being the ones that are there when the dust is settled. So I said, as long as I have that principle of I keep playing with it, I keep trying—and it's had a direct impact to my business.

(Joel Beasley at 00:33:58) So we only have about 20 people. We do a little under $2 million a year in revenue, and we manage my show and 15 other shows. And so we do a lot of show prep, like how you did with Josh and all of that, and we started using ChatGPT for that. So I would feed it your bio. I'd feed it things I'm interested in asking you, and I'd have it spit out questions, and I'd say, "Make those questions more genuine," or "Make them more interesting," or "Center them around this."

(Joel Beasley at 00:34:23) And it was phenomenal. It was insane. So good. And I said, "Wow. We've gotta implement this." So within one week of me playing, I said, "You know what I'm gonna do? Before I go approach the production team, my head of production, and say, 'Hey, there's this thing we gotta try,' I said I'm gonna use it on three or four of my shows, and I'm not gonna tell anyone that I'm doing it." So I put time in my calendar, and I did my own prep. And I used it on three or four of my shows, and it was phenomenal.

(Joel Beasley at 00:34:50) So then we rolled it out. And as of today, all the producers across all of our shows are now using it to help, and it's a direct cost savings.

(Jim Harris at 00:34:57) Yeah. So cool. So I don't know if you've ever come across Elisabeth Kübler-Ross's work called "On Death and Dying." So if you're diagnosed with a cancer, or, God forbid, your spouse is, you'll go through these five emotional stages. The first is denial, then anger, then depression, then bargaining, and finally, acceptance.

(Jim Harris at 00:35:27) And I love to use this as an example. So when Napster came out, recording industry association executives from the big labels said—and tell me what stage you think they're at—"Napster's not gonna affect our business model at all." Where are they? Denial. Absolutely. "These kids are pirates."

(Joel Beasley at 00:35:51) That's angry.

(Jim Harris at 00:35:52) Like, I don't know about you, Joel, but when I was a kid, we called it making tapes. You would sit at the end of the year on December 31st on the year-end review of music for a radio station—because we talked about radio—and you'd have a cassette in the player with record, play, and pause, and you'd hear the song. We were human Shazams back then.

(Joel Beasley at 00:36:16) Mm-hmm.

(Jim Harris at 00:36:16) And you'd take—"Oh, I like this one." So you'd take the pause off, and you'd record the song. We called it making tapes. Kids have always engaged in this behavior because they have a lot of time, and they have no money. So this was just the modern version of making tapes.

(Jim Harris at 00:36:35) But then we got to, "Oh my god. The industry is collapsing," and you could see the tanking of the sales. Right? And honestly, who are the pirates? You know, I bought the copyright in eight-track. I bought it on vinyl before that. Then I bought it on cassette. Now I bought it on DVD. And you're calling me the pirate?

(Jim Harris at 00:36:59) I've had to pay for the same Earth, Wind & Fire songs four times, and I'm the pirate. Give me a break. So the bargaining stage was them saying, "Okay. You can download this song, but you can only play it on the device you downloaded it on." That's like saying you can buy a CD, but you can only play it on the car.

(Jim Harris at 00:37:20) You can't play it at home or up at the cottage or while you're traveling. You can only listen to it in the car. Like, that's idiotic. But that was the bargaining and finally acceptance. So my question around disruption is, why was it Apple that reinvented the business model and took a huge swath of value out of the industry? The industry was incapable of reinventing itself.

(Jim Harris at 00:37:51) So they gave the industry to Apple, which makes literally, this is a Doctor Evil moment, billions of dollars every year.

(Joel Beasley at 00:38:01) That works for you. If you guys are listening, go watch the YouTube.

(Jim Harris at 00:38:09) Billions of dollars to Apple. Right? So this is a human response to any profound change, these five stages of death and dying. And so if you feel your business model is threatened, just like if you feel your spouse has been diagnosed with cancer, you go through these stages. And the first four stages paralyze you from constructive response.

(Jim Harris at 00:38:35) It's only in the final stage that you can do it, but the recording industry never got to that point before Apple did. They were years in court trying to sue individuals who downloaded MP3s. Like, I loved Napster. I loved Kazaa. You know, all of them. Man, they were on fire. Amazing. I found new music. Like, Shazam was a religious experience when it came along. These are the kinds of innovations that tech enables that they were unwilling to embrace, but a company like Apple was willing to embrace, which leads to a fascinating insight.

(Jim Harris at 00:39:14) Disruption typically comes from outside the industry. The industry incumbents have what you could call paradigm paralysis. This is the way we've always done it. This is the de facto standard of how you run a record business. Well, like, I don't know if you've ever seen, I might pronounce her name incorrectly, Kauaʻi, K-A-W-H-I. She's a one woman show of music. Oh my god, beautiful work. But she basically can create a song using a looping machine, a keyboard. Oh, yeah. She's incredible.

(Jim Harris at 00:40:01) The other one is Marc Rebillet. I might be pronouncing his name wrong. But if you go Google them, the two of them have exquisite music, and they're one person shows. And they've changed the business model. They allow fans to subscribe or donate to them. And they travel, and they do shows, but really, they can do everything from a living room. Or there's a great Kauaʻi where she does a cover of one of Michael Jackson songs sitting on her bed with her two dogs sitting beside her. She's just incredible. I see Josh coming in. Are you gonna play one of them, Josh?

(Joel Beasley at 00:40:43) I think he's gonna show us the... Yeah. Could you guys hear that? Oh, there it is. We see it now. Oh my goodness, Josh. Thank you.

(Jim Harris at 00:40:53) And what is so cool about those two that we just have talked about is you watch them building their song piece by piece. And so you watch Kauaʻi do one loop, and then okay, that's locked in. And then she harmonizes with herself and locks that in, and that's the chorus. And then she goes to build some more pieces with the keyboard or the drum machine, locks that in, and then she sings the song.

(Jim Harris at 00:41:23) And you just go, oh my god. She just built a Michael Jackson, "The Way You Make Me Feel" song in real time during the song.

(Joel Beasley at 00:41:33) And it didn't require a studio that was a million plus dollars with a team of audio engineers with a bunch of managers and agents and all of that. Think about, you know, any major band recording, you know, the visual we see in movies and stuff back in the sixties. It was this huge deal with these monster machines and tapes and tracks and... Yeah. Now they can just do it right on their phone or their MIDI keyboard thing.

(Jim Harris at 00:42:01) And she is absolutely brilliant, and so is he. So this has changed the economic model, of course, of the recording industry because if you are passionate about something, which they both are, you can pursue your dream. And as people learn about you, they will support you because they love your music, whether that's coming to a physical show, which we couldn't do during the pandemic, or just watching online. So these shifted business models were perfectly aligned and set up for the pandemic to hit. Back to our thesis at the top of the hour that the pandemic turbocharged change. We've had ten years of change in just three years. So these trends existed pre-pandemic, and the genie's never gonna go back into the bottle.

(Joel Beasley at 00:42:59) Well, let's talk about that because I want your opinion on this, the genie going back into the bottle. I just read an article last night. UK is trying to ban generative AI models like ChatGPT. Now I think they're in stage two, which is aggression or anger. Because at first, maybe denial, then they introduce this legislation. I don't know what's going to happen. I just read the headline and maybe the sub paragraph that they're introducing legislation to ban AI generative models like ChatGPT. Have you seen that yet? Because I think it just came out yesterday.

(Jim Harris at 00:43:30) So I haven't seen that yet, but one of the people I follow is Cathie Wood. She's on Wall Street. She's a brilliant adviser.

(Joel Beasley at 00:43:39) ARK Investments or something like that?

(Jim Harris at 00:43:41) ARK, ARK, and her primary fund is ARKK. And I hold ARK funds. And pre, I think 2020, her fund was the best performing fund of any fund. And then in 2022, it was the worst performing fund of any fund because as inflation went up, everything tech oriented and disruptive went down. But this year, now with 2023, she's back to 29% return in January.

(Jim Harris at 00:44:16) She's a big bull on Tesla. I'm a big bull on Tesla. And let me tell you, at the start of January, I loaded up on Tesla. It was at a PE of 30. Oh my god. I bought as much Tesla as I could. So, you know, I've seen a 100% return in thirty days. So it's not bad for an annualized return, a 100% for thirty days. But the point of ARK and the point of Cathie is she just released her new study with her brilliant analyst team called "Big Ideas, Big Ideas 2023."

(Jim Harris at 00:44:55) And in it, she looks at coding and AI. And the bull case that they come up with for coding is a 10x increase in productivity for coding by 2030 using AI. So back to your question, let's assume that the UK bans the use of generative AI for any company in the UK. First off, the problem is companies leave the UK, just like they decided to leave the EU, and they had no idea that Brexit would hammer their economy. So let's say every leading company that is all about tech and innovation leaves the UK because they're banned from using generative AI.

(Jim Harris at 00:45:43) First problem for the UK, the flight of your brilliant minds that are all focused on the future. Second problem. Imagine every other company in the EU, every country in the EU allows for generative AI, and people who are engaged in coding can use AI, and every one of those companies experiences a 10x increase in productivity by 2030 because it's people plus AI using most enhanced tools. How are UK companies in general gonna do compared to French, German, Italian, you know, Spanish companies that are using AI? So this is like saying back in 1900, nobody can use the telephone.

(Jim Harris at 00:46:37) The telephone is gonna allow for nefarious things to happen, and the telegraph is just great. So nobody can use the telephone.

(Joel Beasley at 00:46:47) Well, the telegraph jobs, Jim.

(Jim Harris at 00:46:49) Yeah, the telegraph jobs. Jobs. And Joel, you've just hit on something which is a point that's so important to make. Here in North America, in 1867, 80% of jobs were in agriculture.

(Jim Harris at 00:47:05) Today, it's less than 2%. And so there were huge protests about farm automation. You know, if we start using combines and tractors instead of horses pulling plows, we're gonna lose jobs. Think about all those horse people, horse handlers who are gonna lose their jobs on farms. Like so from 80% to 2%, we have survived farm automation.

(Jim Harris at 00:47:33) But what is certain is jobs changed, companies had to change, you know, society as a whole had to change. And so, really, this is a story not about the technology, in this case, generative AI. It's a story about change. It's a story about innovation. It's about culture. It's about mindset. It's about training. It's about upskilling people. This is where the rubber hits the road.

(Joel Beasley at 00:48:02) Yeah. And people try to hold on. You remember when all those ships were hanging out in the sea because they couldn't get processed in the ports? Well, after about the third week of me seeing this on the news, I said, let's do a special on this. So I started interviewing different technologists that understood all of this world.

(Joel Beasley at 00:48:18) And here's what I found. The unions in these ports don't allow the technology for the port to be automated. The port could be fully automated, like 99% automated with all the cranes doing everything, taking it off the ships. But the unions had prevented, and America had prevented these technologies from being implemented to keep the union workers' jobs, and then that created this massive problem. Meanwhile, you got all these other countries who have just fully automated their ports, and they're not having these problems.

(Jim Harris at 00:48:46) Exactly. So this is an example where mindset or culture or historical relationships actually hobble an entire nation. Because then, it's not just the ports that are a problem. It's all the retailers who are depending on inventory. It's the automakers who now can't assemble.

(Jim Harris at 00:49:06) Do you know that there are tens of thousands of Ford F-150s sitting on a lot because they're missing a one inch semiconductor? You can't sell your $75,000 truck because you don't have the semiconductor that makes the windshield wipers work. Right? So boom. Now how does rethinking and innovating look and what lesson can we learn from this logistic and supply chain nightmare?

(Jim Harris at 00:49:34) Well, the average gas car has 2,000 moving parts. The average Tesla has 20. So by being vertically integrated, by making all their own parts, Tesla is not subject to the supply chain risk that traditional auto is. So radical simplification of your manufacturing process, of your supplier logistics supply chain, 99% reduction in moving parts means that they're not susceptible. So in 2022, while every traditional automaker in the US shrunk, their sales were down, Tesla was up.

(Jim Harris at 00:50:15) So like, this rethinking your business model, not just about the tech, about the business model, has radical implications on risk, on CapEx, on marketing, on sales. And we have to rethink these things because there are all these legacy problems like the unions in ports, and unions themselves are not the problem. It's like, I would say, management has to engage unions in a way, and you can do this. There are so many examples of it that they're involved in the decision making, in the evolution, that there are protections in place. So I have case studies from my early books about unions and people who were involved in really profound change initiatives.

(Jim Harris at 00:51:07) And when they were involved, they understood the problem. They bought in. They created the solutions, and therefore, they didn't go through the fear and denial stages of the five stages of death and dying. And they were onboard supporters of the change. So we need the human aspect to bring people in to change.

(Jim Harris at 00:51:28) So like, those ports could have been dealing with the volume and could have innovated. Maybe you send little ships out to unload some and bring them into a place that's five miles down the road. You create, you know, mini ports to the either north and south of the ports to unload stuff if there's a backlog. How do we deal with this?

(Joel Beasley at 00:51:51) Well, I'm curious. And as we start to wrap up, it's probably a philosophical type answer, so I hope you have something for me. But I'm 35 just to give you perspective of where I'm at in my life, and I've got three kids and a family. And one of the things that I've found to be interesting going through entrepreneurship, businesses, things like that is in the marketplace, there is this default mindset by 80% of the people that somehow the past, meaning every generation before us, is constantly, new things come out. The old jobs go away, but newer jobs come, and this just continues to happen over and over and over.

(Joel Beasley at 00:52:31) And every time this happens, the people are saying, you know, it's not fair or, you know, we, you can't just expect us to change or I shouldn't have to learn new things. You can't make the truckers programmers. Like, it's just this large amount of like, angst and difficulty, but it's the same thing happening over and over and over. How come? Like, why is that happening?

(Joel Beasley at 00:52:51) Why don't we just say as a people, like, this is what happens. We get it. We understand this is what happens, and here's a set of guidelines for how to handle it.

(Jim Harris at 00:53:00) So you used the word earlier in the show, curious, that the people who are curious are the ones who thrive. And if you think about kids, kids know they don't know anything, but they engage in play. They're kinda fearless. They're like, hey, let's try this.

(Jim Harris at 00:53:19) And they play with it. And if they like it, they keep playing. And if they don't, they stop. But this notion of play and curiosity is absolutely essential for kids to learn. And those same characteristics of play and curiosity are what we need as adults in our business.

(Jim Harris at 00:53:39) So we need to play with ChatGPT to figure out how it's gonna help us be more productive. And I've been talking to executives for the last two months about ChatGPT and how it's gonna change business, and we have been having a super fun time. But I know an exec who two to three hours a day of work has been eliminated by using ChatGPT. In fact, you can even say, okay, here's all the information about my prospect company that I wanna pitch for my podcast, and go and look at what are all the pain points of companies in this industry, create a hierarchy of the top seven pain points for companies in this industry, and then create some marketing material.

(Jim Harris at 00:54:28) I want 300 words about how we could address those on our podcast. In other words, write me the pitch document to reach out to this customer and pitch them on sponsoring a podcast series, and it will do it. Now maybe the first cut isn't that great, and so you force ChatGPT to go back three, four, five times and refine things, elaborate on this, eliminate point two, but you use it in an iterative process to create this amazing pitch document. And people who use that, will they be more successful at winning sponsored podcasts than those who don't? And the answer is yes.

(Jim Harris at 00:55:06) So we have to have this curiosity and play continuously. But the great news is if you're playing, you're having fun all the time. Like, doing this stuff is actually fun.

(Joel Beasley at 00:55:18) It's fun.

(Jim Harris at 00:55:19) So when we have a new disease, bacteria or virus or whatever, the pharma companies will develop a vaccine. And what often they are, in the case of bacteria, it's a very mild or muted or dormant strain of the disease, and they inject us with a needle so that our body comes to learn or identify what that disease, that pathogen is and develop an immune system response to it. Okay? So it's the same thing with learning. When I take a little baby step and learn something and go, hey.

(Jim Harris at 00:56:02) Wow. I was able to get through that. I learned. Hey. That's kinda cool. I build up my immunity to the discomfort of learning, changing, and uncertainty, the learning paradox. So the more I engage in innovation and learning and change, the more I can engage in it. So we need to help our people develop immunity to learning, changing, and uncertainty. And the union in the port, they just feel if I can't do this job, I can't do anything else. They don't have an immune system response to say...

(Jim Harris at 00:56:39) I am a capable individual. You know? Outside work, I negotiate, you know, $400,000 mortgages for my home. You know? I'm able to do incredible things. I built my own boat on weekends. You know? Like, as humans, we're capable of incredible things. So how do we get to that mindset and build that immunity to the discomfort of change so that not just people, but entire entities like a union or organizations or an industry as a whole is able to evolve, or a country in the case of the UK wanting to ban generative AI. How do we develop this capability, this competence, this comfort with change?

(Joel Beasley at 00:57:28) Dude, you nailed it. I'm like, preach. Yeah, it's awesome. I love that.

(Joel Beasley at 00:57:32) I'm gonna steal that. I'm gonna spread that around like a virus.

(Jim Harris at 00:57:35) I'll do it.

(Joel Beasley at 00:57:37) That's a great analogy. Super relevant. Man, we made a podcast. How do you feel?

(Jim Harris at 00:57:41) Oh, man. This is the fastest hour I've ever spent.

(Joel Beasley at 00:57:46) Thank you so much for listening. And if you found this episode useful, please share it with a friend or colleague who you think would get value from it. And if you have topics that you'd like to hear discussed on the podcast, either add me on LinkedIn or send me an email: [email protected]. Every time I get an email or LinkedIn message, it absolutely makes my day and inspires me to keep going.