Interview

Ravi Kumar S., President, Infosys, interviewing Todd Lavieri, Vice Chairman, Partner & President of ISG Americas & APAC


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  • Ravi Kumar S.
    00:11
    Ravi Kumar S.

    Yesterday, I was speaking to a chief executive and he was very curiously asking me what jobs of the future would remain. I said, I can only think of three jobs which will remain in the future and everything else will get disrupted. Chief executives, I was talking to a chief executive.

    Lawyers and psychiatrists. And all other jobs are going to be disrupted. That’s are the times we are living in.

    You know, let me tee up the first question to you. The more I think about it, digitally native firms, you spoke about the new ones… they have this unique advantage of not having a legacy. Not to have to deal with a quarterly financial target. In fact, Uber in its listing, actually said that for the foreseeable future they are not going to make money. They will be rewarded if you don’t make money. The valuations keep shooting up based on foreseeable revenue streams and the chief executive I was talking to yesterday said I have a very unfair start. I have a legacy to deal with. I have a workforce to deal with. I still have to disrupt my business. I have to deal with quarterly results and this dichotomy… there isn’t a balance of how to deal with this. What is your advice to chief executives who kind of now look at this as a burden? Sometimes it does look like you can just let it go and start fresh and that might be a much better opportunity to work with.

  • Todd Lavieri
    01:57
    Todd Lavieri

    Well, so a few thoughts. First of all, I think, don’t quote me on the exact numbers, I think Amazon, it took them about 10 years to break even net, right? So, they lost a billion dollars or something in those first few years and then made a little bit of money, but over 10 years it took them to break even. Uber lost 5 billion dollars last quarter. I don’t know if I would have said this two years ago and you may have seen WeWork today announce that they are expecting to lose over a billion dollars this quarter. I think the question might be, do everything I just talked about – innovate, act be digital, but focus on the business problems, because you have a balance sheet. And I don’t know that some of those companies are really going to make it. I don’t think you can lose 20 or maybe, I guess you can, but I am not sure there is a real appetite to do that again. I think we’ll see, so…

  • Ravi Kumar S.
    02:47
    Ravi Kumar S.

    But in the short run, they are disrupting the larger traditional enterprises.

  • Todd Lavieri
    02:54
    Todd Lavieri

    I always tell CEOs, what’s the business problem? Some of the noise around technology and the rest of it, is kind of a ball and dirt. You are not to swing at it. What is the business problem? I don’t get my products fast enough to the market. I don’t have the best marketing data and analytics. I don’t have the best marketing insights. They are beating me with better products to the market. Well now that’s a problem. Let’s solve that problem. Let’s throw money at that problem. Focus on the problem. And, do I need cyber security? Yes, of course you need cyber security. I get all that, but be careful not to be too distracted with all the balls that are being thrown your way. What are the business problems? The business problems get solved in your customer ex perience. Stay strong, you’re going to win. People predicted Wal-Mart was going to go out of business because of Amazon. Now maybe they will, I have no idea. The future is this company.

  • Ravi Kumar S.
    03:40
    Ravi Kumar S.

    They’re turning it around. They are doing quite a few smart things.

  • Todd Lavieri
    03:42
    Todd Lavieri

    Wal-Mart is an amazing company. It is maybe one of the best managed companies on planet Earth. People don’t give them credit for what they do on a daily basis. With the Americanization and they have just reported amazing earnings. So, they figured out how to be digital natives and digital immigrants and gotten to a point where they’re doing same day delivery. They’re doing groceries. They are really on it. And I would say take a few lessons out of that playbook around what they have done well.

  • Ravi Kumar S.
    04:09
    Ravi Kumar S.

    Absolutely. I think one of the traits of digitally native firms is, they kind of sense the gaps and they figure out a way to bridge the gaps and that is how they make money. That’s how they create a business model. (So one of the ways to…one of the advice I would actually tell the chief executives is, figure out where the gaps are and you should be able to sense them and fix them, otherwise somebody else is actually making a business model around it. Experience gaps, is what digitally native firms actually build their operating models on.

  • Todd Lavieri
    04:44
    Todd Lavieri

    I totally agree with that and I think making micro investments in acquisitions to fill those gaps can also be an accelerator for making sure it gets closed and you have checked the competitive bracket.

  • Ravi Kumar S.
    04:55
    Ravi Kumar S.

    Todd, you know I want to pick your brains with my second question which is about, with technology being so strategic, do you think enterprises should now change their insourcing –outsourcing mix, because technology is core to most businesses now? In fact, everybody wants to be a tech company now. Every industry, every firm wants to be a tech company. Does that change the insourcing – outsourcing mix of tech?

  • Todd Lavieri
    05:22
    Todd Lavieri

    It certainly does. But again, I will go back to what problem are we solving? Are we solving for we are not getting the product to the market fast enough, we are not getting… filling those competitive slivers in the market that startups are able to attack on a digital basis quicker, faster? Can we be quicker and faster? So, I think having the capability, what I learned from the clients all the time is we’re stuck in a little bit of an old practice around how we interface with our customers and that is where the gold is. They don’t have the data, they don’t have the analytics. They don’t have the marketing analytics. So, maybe they need to both insource capability to get them to get in to the front-end of that business, backstop, support it by providers. IT capability maybe, as I mentioned in my comments, accelerates how you can change and affect what you are usually looking to accomplish. That, I would say, is being looked at more than ever. We do research all the time on providers and how they are working in the industry. And for the first time, a couple of years ago, we reached a threshold where most large enterprises have 5 or more providers. We looked at over a thousand different technology providers. That’s who we tracked, over a thousand of them in detail. And it’s amazing to me that so many enterprises have never of some of those companies, but those are the companies that can help you backstop your capability and insource, they have this talent insource supported externally with either outsourced or supporting incapability. Maybe that’s something that you don’t need over time but maybe that’s something you want to invest in going forward.

  • Ravi Kumar S.
    06:55
    Ravi Kumar S.

    That’s a good view. In fact, one other thing which kind of always fascinates me about digitally native firms is hyper productivity. They kind of bring value in the confluence of open source software, business DevOps, rapid sprints, quicker deployments, embrace of AI and automation and in fact the hub in Hartford, in our view, is going to manifest a confluence of all these forces for our clients. That’s one of the reasons why we think we have a dichotomy. We have deep offshoring on one side but we also have distributed talent and distributed development so these hubs are going to be co-innovation engines. So, my next question to you is, how do you build this innovation infrastructure which what kind of differentiates digitally native companies and how do you actually embrace AI and automation in a very fragmented distributor provided landscape?

  • Todd Lavieri
    08:01
    Todd Lavieri

    It’s a great question. I think leveraging these hubs is actually a very important piece of that puzzle. You can now bring clients here for workshops, in a two-day innovation conversation around how can you solve this problem. Well, here’s our issue. We even start with what are your issues? What are the business challenges you are having? That time a CEO is going to Uber and Tesla and Apple that’s what they are doing. They are not looking at the new iPad. They are understanding just what you said – how can we bridge the technology needs, the challenges in the market, the capabilities that we have to have? Do something better, cheaper, faster. And so, I think these hubs can be an accelerator for that.

  • Ravi Kumar S.
    08:36
    Ravi Kumar S.

    Awesome. One other thing you and I have discussed before is about the future of the workforce in tech. We have been evangelizing this in a big way. We started with STEM. We are probably now the largest recruiters from schools and colleges in the U.S. Last two years we hired 10,000. We hired from schools and colleges almost 2,500 to 3,000 in the last 12 months and 4,000 in the last 24 months. We moved out from STEM to non-STEM. We partnered with the Trinity College on Liberal Arts and we have almost 5 cohorts which have come out of Liberal Arts. How do we build data scientists out of Liberal Arts streams? We have a design cohort as well with other universities. We are now experimenting with the digital back bone jobs. We believe the future is going to be there. The embrace of digital is going to be so pervasive that you are going to build the … and I actually picked that term from you and I am using it without taking your permission I am using it in a very…

    Todd Lavieri: It’s good to know though. You are free to use it.

  • Ravi Kumar S.
    09:44
    Ravi Kumar S.

    I used to call them the Blue-Collar Digital Jobs but you coined the word very well. What do you think about the future of workforce and tech? You need STEM skills but these are deep programming on one side. To apply them you need a diversity of skills.

  • Todd Lavieri
    10:01
    Todd Lavieri

    Right. I always remind people that Steve Jobs was a history major. So, that is the trend of all of these businesses – what I just talked about and talked about here today. It’s so important that there is a grounding in that capability in that knowledge of what all these trends are going to be. Not just companies will go extinct. You might not be able to find real employment in the future if this isn’t a part of what your understanding is because all these enterprises in this area and around the world will be engaging this way. When I think about who the German auto companies are hiring, or the German insurance companies or the UK businesses, all across the entire U.S., I frankly think innovation is leaps and bounds ahead of the rest of the world on so many levels in how it promulgates across the globe, but I think that these organizations can revamp what they need for the future, it will either trickle down or create a pulling system from the education system to make sure that we have got those right capabilities. So, I am not that close to what’s happening on campuses with some of the community colleges and some of the others but I do know that they get it. Maybe they didn’t get it 10 years ago. They totally get it today. And I think that there is excitement around what’s become digital and cool, in filling in these wide spaces for enterprise opportunities, is attracting lots of people. Digital backbone, CEOs and everything in between and I think that’s going to continue to be the changing workforce that we will all be seeing or witnessing over next 10 years.

  • Ravi Kumar S.
    11:32
    Ravi Kumar S.

    In fact, yesterday I was at a meeting at the World Economic Forum for the future of work and we were talking about this fascinating thing about how the world around us is so disruptive and the education system still has the first 20 years of studies and the next 60 years of possibly, longer lives, people are going to work and how is that going to be relevant and how lifelong learning has to get so well baked into our education system. There is one session which Johan is doing today about that.

  • Todd Lavieri
    12:06
    Todd Lavieri

    Just one thing on that – it’s interesting - I have always thought Connecticut invented the idea of an ecosystem and I go back to, you know, the hat industry, the machine tools, insurance, aerospace and defense, hedge funds, you name it, right? This state has had a great history of creating ecosystems and the resulting skills development had to be very local to make that happen. We didn’t have that mobility that we have today. We get it. A chance we can keep some of those industries but we got to figure out a way. This state has all those recipes to make those ecosystems work.

  • Ravi Kumar S.
    12:39
    Ravi Kumar S.

    You almost led into my next question. I want to ask you this thing about, Connecticut had that bright, it was that bright spot, it kind of lost its way in maybe last one decade or maybe 5 years. What does it need to do to bring back that same glory?

  • Todd Lavieri
    12:59
    Todd Lavieri

    Look, we have the ingredients. We have a phenomenal location between Boston, Hartford and New York. We’ve got, I personally believe it’s one of the best places to live in the world. I think that when I go all over the world doing all that I do, I can tell you this is an amazing place of education, culture, capability, industry. We are lucky to have all the ingredients. We had some headwinds, we had some nods. We had some headwinds. A state like Connecticut competes with the world. We don’t compete with Massachusetts as much anymore. We compete with everything else all over planet Earth. So, it’s important and that’s why I think …

    Ravi Kumar S.Orchestrating it together or…?

  • Todd Lavieri
    13:35
    Todd Lavieri

    I think… to remind… look, there’s also an entrepreneurial culture in this state. I mean, putting my CTNext hat on. When I go to New Haven, I go to New London, I am in Hartford. I am meeting with these entrepreneurs and they want to be here. And they are building interesting businesses, in New Haven, pharmas and other ecosystems, the whole pharma industry that we got. We just got to find a way to allow it to scale and to not snuff it out, just to continue to build it and attract it. Warren Buffett saying don’t invest in Connecticut when you are in New Jersey, is not helpful. I get it, I get it, its math, I understand it. We all know what the overhangs are, but from a business point of view we’ve got technology to compete with the world and we have got to always continue to foster that spirit of what all has made that state an amazing state. And so, having talent is a part of it. One thing I would say. Companies might have said a decade ago is ‘I am leaving because I can’t attract the talent that I need.’ I think that can be fixed. That’s got to be a concerted effort to make sure we are building the needs of hubs like this but also university efforts that’s happening around us, around the state. So, and we just can’t think on our own little border here, obviously, we are not in an oasis but on a global basis we can be extremely competitive. We got to fix the headwinds that we have as a state that unfortunately are the headline news.

  • Ravi Kumar S.
    14:49
    Ravi Kumar S.

    So, Todd, just as we conclude this conversation, I just want to ask you one lighter question. I want to put you on the spot, so bear with me. What’s that little-known fact about you which you can tell all of us, which nobody knows? Maybe your family knows.

  • Todd Lavieri
    15:06
    Todd Lavieri

    Oh my goodness! I don’t have a ready answer for that one. A little-known fact, that is a good one, okay, here’s a little-known fact. I grew up in Connecticut and we didn’t have a home team for football so I became a Patriots fan, AFC, Giants fan, NFC. Just kind of, it happened, you know, I didn’t know back then really a home team. You know I was really involved as a Patriots fan – my kids are all Patriots fans. As a quick aside, I had to give a speech in Canada a few years ago to about 3,000 people. And the first question the moderator asked me was what’s my favorite hockey team. And I am in Canada. These people really care about that and I said, well the Hartford Whalers. I didn’t know, what other team is here? S,o I got out of dodge on that one. So, I became a Patriots fan. Growing up in Connecticut my older brother was a Red Sox fan and so I took the other side of that and grew up a Yankee fan. And then I went to graduate school in Duke and I am a Duke fan. So, I end up supporting the three teams that universally everybody hates.

  • Ravi Kumar S.
    16:12
    Ravi Kumar S.

    That’s a smart one there. So, wherever you are, you are a fan of that. So now you are an Infosys fan?

  • Todd Lavieri
    16:17
    Todd Lavieri

    I am an Infosys fan, absolutely! While I am in Infosys, I want to say this. I think in the future, a lot of the provider capability is going to have to have both, strategic consulting capability, innovation (obviously) capability and large-scale system support. There’s a fog of uncertainty out there with CEOs. They know they got to do something. I talked to a CEO, and he said I feel like my digital transformation roadmap, I am on the runway, I got gas in the jet ready to go and we haven’t taken off for two years. He said, my next on the line, if we zip over here and if it doesn’t work and I got to take a ten million dollar. So, I am concerned that we aren’t moving fast enough and yet at the same time, we just don’t want to make a bad bet. And so, I think there’s a capability that needs to happen with the provider support that can help with that fog of uncertainties.

  • Ravi Kumar S.
    17:12
    Ravi Kumar S.

    Awesome, that was awesome! Thank you so much Todd for this wonderful conversation, and a round of applause for Todd.

    Todd Lavieri: Thank you.