Gerald Kane on The Technology Fallacy: How People Are the Real Key to Digital Transformation

Audio Transcription

On today’s show. I am honored to interview the professor of Information Systems of the Edmund [inaudible] Shay Junior Center of Entrepreneurship at Boston College, having surveyed over 20,000 humans and the managers of such companies as salesforce, B a s f, Walmart, Google, and other leading companies. Professor Gerald Kane shares why evidence now shows that people are the real key to digital transformation.

On today’s show, we have a super guest, a Boston college professor by the name of Gerald Kane. Gerald, welcome to the show. How are you? I’m doing great. Thanks for having me here and I hope that this comes across as a respectful commentary. I, as I was researching you, you are a professor, but to me you come across more like a bro fessor you come across as like a very relatable, smart man. Is that an accurate description or is that, is that or am I just kind of overthinking it? Well, we’ll find out in the next 30 minutes. We’re all wait. Okay. Okay. Well now you have a written his book, the technology fallacy about how people are the real key to digital transformation. Can you talk to me what, what inspired you to, to write this book?

Well, this is actually the outcome of a four year research project we worked on with MIT Sloan Management Review and Deloitte. And we’ve been really investigating the question, you know, how are companies dealing with digital disruption? How are they sort of adapting their business models, their organizations to deal with the change that we’re facing, thanks to digital technologies. And we’ve written yearly reports on it. Uh, but then we realized there was a bigger story that weren’t, wasn’t really getting captured in the yearly reports. So we decided to put, pull it together into a book. Um, and we got a lot out of date. We’ve got a lot of information. We’ve surveyed over 16,000 people worldwide over this time. We’ve interviewed over a hundred executives that are on the ground doing this. So I think it’s a really meaty, um, take on this topic

now. Did you interview employees and managers and any, how many talked to you about all the different positions that you interviewed?

Well, certainly the survey covered all levels. You know, when we’re interviewing people, we tended to focus, you know, at the more senior levels just because they have theoretically a, a bigger picture over the, you know, what the organization is doing it as a whole. But we also talked to some, you know, lower level team leaders

as well as some regular employees. And you interviewed people at salesforce, Walmart, you are, you, you surveyed employees at salesforce and Walmart and Google about big, big companies. Yeah. Interviewed all those interview people at all those. So we had got to talk to each of them for about an hour. And I learned a ton. You know, I do this professionally and I still learned a ton in this process. So let’s, let’s, uh, our listeners out there, some of our listeners are saying, okay, okay, I’m gonna, I’m going to probably get this book, but before I do, you’re going to have to wow me with some polarizing stuff. You know, some stuff where we go, I did not know that. Can you give us, where are most business owners getting, getting it wrong and more most managers getting it wrong as relates to this technology fallacy. Well it works really great because the title sort of outlines that.

And the funny thing about the book is that the title, you know, we did that last until he never actually describe what the technology fallacy is in the book. So I’ll describe it for you now. It’s this mistaken belief that just because many of the strategic challenges that companies are facing are caused by digital technologies, that the solution or the response to them also needs to be involves implementing digital technologies. And in fact most of them were compelling stories we saw over our four years of research were those responses that didn’t involve technology at all. But it was changing the strategy. It was changing the talent, it was changing sort of a leadership perspective and so it was really more about these human and organizational aspects than it was about implementing, you know, the, the latest digital communication platform, marketing tool, et Cetera, et cetera.

I have a listener who has a business that, I won’t mention the name of the nominee names, but one of our clients, I told them that I would ask you this question, but I’m not going to mention their name for their safety. Okay. They have about 30 employees and the culture is borderline tox and this is before I met them, they had this kind of toxic culture and I said, how do you motivate the team? How do you hire and inspire and retain your people? How do you do that? And they said, well, after we hire them, you know, we hire them, they go through the packet and they have a series of onboarding videos to watch onboarding videos. And I said, is there ever a human with them? Are they just watching the video by themselves? He said, no, no, no. It’s all digital.

It’s a video. It’s like a drip path that go through and then I sit down, how do they change their schedule? Oh, it’s all online. You just submit your thing and you boom, boom, boom. And I’m like, Dude, how often do you actually talk to your people during the training process? And do you ever have face to face meetings? Do you ever, and everything they had done, they had every, it built everything Gerald to be digital. It’s all automated. And so the employees never talked to the boss. They don’t like their boss or know their boss. There is no human connection. How would you help someone like that? D a I guess remove the digital dysfunction. What should they keep and what should they get rid of?

Yeah, well see and there, you know, that’s a perfect example of one where you think the solution, because there’s some of the challenges we’re dealing with are digital. That we need a digital solution. You know, culture is one of those things that if we have one takeaway from this book is that culture is critical. And this goes from those small, you know, 30 person companies to the large behemoths like the Walmarts and the salesforces and the googles. And salesforce is a great example. You know, they put a ton of time and effort into onboarding their employees and it does involve, you know, there are some digital aspects to it, but it also does involve, you know, interacting with the people and they have a number of opportunities where, you know, the, the employees get to know each other. So I think to say, you know, we’re moving toward this entire digital entirely digital world where we’re not going to interact with people.

Uh, I think is a real mistake because I think you do lose something in the culture when you, when you cut that out. Now there’s a lot of things we can offload a to digital, you know, some of the routine stuff. But it’s really that balance. Um, you know, so how do you fix those things? You know, the easiest solution is, you know, start so you don’t run into that problem. Um, but begin to have these open conversations. Um, you know, and honestly, when we did this research, um, I expected that there was going to be, I mean I had this theory that there was going to be multiple different types of digital cultures. In fact, I had a title setup, 50 shades of digital transformation, um, which I was, I was ready to run with. And in fact, our research says, you know, that that’s not true. There’s actually one set of characteristics that companies need to, uh, adopt. And that’s things like being more risk tolerant, that’s being more agile, that’s being more collaborative. Um, and, and, and elements like that. And so culture is really sort of key to the whole digital process. And when companies ask, where do I start? That’s actually where I suggest,

how many years did you spend researching these 16,000 people?

Um, so five, well, so five years at this point. So we’ve been working in conjunction, we’ve done a yearly report, we’ve done a yearly survey. So each of those, um, that 16,000, really now 20,000, cause we have a new report coming out, um, is about 4,000 people per year and that’s about two thirds international and one third in the u s

uh, I would like to get your take on things that are very common in my world with working with small business owners or I call it [inaudible] digital dysfunctions. And I’d like to get your take on the best way to handle it since you’ve done the research. So this is there, this is area number one. When an employees sins, a full page email, you know what we’ll call it, the keyboard warrior email. You know, a person who’s kind of less courageous, typically face to face, writes the full one to two page, all caps, email addressing the issues that they’ve been storing up inside their cranium for the last two years. Should a business owner respond email or should

they talk to the person face to face? Should they call them? Should they respond back and forth via email? Because I see a lot of business owners by default responding to caustic emails with more cost emails. Yeah. One of my colleagues, one of the people we interviewed was a guy named Phil Simon, who’s an author and he is a professor at Arizona State. Uh, right now I believe. Um, and he really talks about email being, you know, a source of significant dysfunction in our organizations and our dependence, our overdependence on that. Um, and so what he, he has a rule of thumb doesn’t really apply in this situation, but I think it could be extended to this. Um, if you have more than three back and forths on an email about a topic, you need to have a face to face conversation. Um, and certainly I would escalate that with if you have a toxic email, um, you know, face to face just changes the entire game.

People behave differently and act differently behind a computer and behind a keyboard and behind a screen than they do in face to face. And so, you know, and it’s really interesting. And so the question is, is face to face, do you have to be in the same room or does it just mean moving to a richer communication medium? So, you know, maybe video conferences enough if you don’t have that privilege, uh, you know, many companies or are distributed and they, they don’t, they’re not in the same city and that makes that face to face harder. But you can change, uh, you can change channels to sort of increase the richness and increase that human connection. And I know in fact, Facebook, um, their rule, they have a policy that you’re on all conference calls. They have to be video calls because people are more present, a real connection, see them rather than just phoning in and you know, and uh, you know, doing your laundry while the conference calls going on in the background.

Oh, and how common is that by the way? I that come on that dad is so common. The other guys, I definitely think for a person of one and on the grounds that may incriminate me. Okay. Now let’s talk about this managing via email. I see this ally. See small business owners all the time. They have 10 employees and they email them, do this, do that. I’m very unhappy with this. They’ll write an email. Very short, very pithy, very quick. I’m very unhappy with this. Gerald Kane. Talk to me about the dangers of managing exclusively via email. Well, I sort of see email as the Swiss army knife of digital collaboration tools. It’s great and it’s very versatile. We Swiss army knives can do a lot. Would you want your brain surgeon to use a Swiss army knife? Probably not. Would you want your butcher to use a Swiss army knife?

Probably not. And so we tend to make email the goto tool for every business and there’s some value in that, but I think we overuse it. Um, and I, I do think we need to have the face to face. And I do think there’s also another suite of tools, whether it’s things like a slack or he hammer or, or even just, you know, scheduling software, you know, shifting some of the routine stuff off of email so we’re not getting bogged down in the routine and all the reply, all CYA stuff. And the manager really needs to set that culture. Um, and at the same time the access of we personal, the things that need to happen face to face, uh, don’t need to get shifted over to email. And, and you know, I have always said face to face is, is, is social media too. So my research really started on social media, um, and it’s just, it’s a different tool in a managers

toolbox. Uh, Magic Johnson reportedly quit his job as the head of the Los Angeles Lakers after receiving an email that wasn’t meant for him to see. And I see a lot of people delivering criticism via email. I have the rule in my office, dow shout, not email criticism, but I want to get your take on that shit. If I’m a owner, if I’m a manager of should I be emailing people criticism.

Yeah. So the rule of thumb is never put in an email what you wouldn’t want your wife or your boss to see. Um, or now you know, even your, your, your, um, your reports. Um, and I think in a digital age, you know, now all this that’s so it’s so easy for it to go viral. Um, never put anything you wouldn’t want a future wife or a future boss to see as well because, uh, once it’s on there, you know, anybody can use it for whatever purpose. So there’s also, you know, there’s a CYA of not putting certain things in email as well.

Okay. Now you are obsessed with this topic and that’s why the book’s going to be so good for the listeners out there who purchased the book. Yep. When did you first get excited about this? Did you hit your head on the toilet seat after watching back to the future or something and you thought, this is what I need to do? I mean, what motivated you to really just nerd out and to focus in and to research and a deep dive cause this is a good book.

Yeah. So you know, I’ve been studying, you know, digital business really since 2006 and it was actually, um, my first day teaching as a college professor was the day that Facebook launched the news feed feature. Um, and all of my students came in pissed off saying that they’re going to leave Facebook and go back to my space if you remember what that was. Uh, if I first they ever as a college professor, I called an audible and I said, let me explain why you’re not going to do this. When we went through business concepts like network effects and switching costs and such like that. Um, and then what happened, uh, over the next 48 hours is a group called students against Facebook newsfeed formed and gathered 500,000 members over the course of that 48 hours. And then Facebook responded as a result of that. It was that experience that made me realize, okay, we are playing in a new ballgame now.

Um, and I started studying that technology, you know, then and sort of how it was changing organizations. And then what really shocked me is how slowly organizations were changing in response. It’s like there, there are these opportunities to get rid of email. These are, these are your opportunities to do business differently. And yet so many companies still want to work as if it’s 2003. And I’ve, where I started banging my head against a wall was there’s, there’s so much more possibility in the what these companies are doing. And I wanted to understand why they were struggling, why couldn’t they get up to speed? Um, and it’s funny since you work largely with small businesses, pretty much our data shows the ones that have the biggest advantages for coping in this digital world and adapting to it are the smallest and the largest. The smallest can be the most agile and they can make the changes the fastest. And of course the largest have the resources to really throw at it. It’s those in the middle, um, that, uh, that, uh, have the biggest challenges because they still have that big, you know, slow organizational culture and structure and yet they don’t have the resources to sort of buy them. They’re way out of the problem. And so they’re the ones that have to be the most creative on how to deal with it.

Now, thrive nation, I want to give just a little bit of context so you recognize what, what a, a, a kind of a big deal here. Uh, our professor Gerald Kane is, think about this thrive nation. What are the top selling books for startup entrepreneurs of all time is a book called the lean startup. Many of you probably have that book, the lean startup by Eric Reese and the author of that book lead the Eric Reese, the, the author of the lean startup. He actually has endorsed your book. How did you make that happen and how do you know Eric?

Yeah, I don’t, and that’s what made this so thrilling. Um, you know, I was just, I geeked out when he agreed to do it is I cold called him and sent him to the book, told him why I thought it was a fit and it really does fit with his work. You know, it’s basically taking his lean startup approaches and GE has really worked with him to try and get that entrepreneurial mindset into the organization. So I really just cold called him and sent him a copy of the book and I said, I’d love to have your endorsement because I think it fits with your ideas really well. And he said, I took a look at the book and I agreed, let me let me fill something out. So, so I was as thrilled about that as a, as anybody,

well thrivers out there, if you are, cannot form a prayer chain here. I’m trying to get people to pray, to ask to email to encourage Eric Reese, we one him on this podcast. And if you can all just come together and help us harness the good energy invite Eric Reese. Maybe he too, she’ll give us the kind of love he’s given the professor. Okay, now we move on. So Ah, I see this next area of dysfunction is in businesses with the digital clutter is this one guy in the office is using slack. Somebody else is using base camp, somebody else is using email. Somebody else is using a whiteboard and somebody else is using a yellow notepad with a large sharpie marker and refuse to show up on time or to use any of the systems. Talk to me about let’s say in the business right now, and I’ve got about 25 people on my team and eight of them are using slack. 10 of them are using base camp two are using those. There’s the sharpie marker move. Why is that so dangerous and how can I fix it? Yeah,

so there’s actually a concept in the book called uh, affordances. A, again, geeky academic term, but, uh, I sorta like it. And basically what affordances say is, it’s not, you know, with the technology can do, it’s really how you use it, which doesn’t seem like rocket science, but you’d be surprised at how often people forget that. Um, and so it’s pretty cool. And so my colleague at UC Santa Barbara Polian already has this concept of collective affordances, which means the technology is only going to be valuable if you all can agree on how you’re going to use it. And you know, he did a case study on your collaborative technologies. One team that he looked at agreed and they really got performance benefits. Another team just did it all individually and it just never got used. And so really this is where managers step in. They need to set the tone for what platforms are going to be used for what purposes, um, and get everybody on the same page.

And then when people don’t use it, the right platform for the right purposes, pull those employees aside and very gently remind them, hey, this is the platform we use for those sorts of requests. And only, you know, if the manager can agree at you, get that agreement, sort of say this is how we want to use it and get people’s buy in. And then, you know, gently reinforce that. A really great example in the book, um, was Bas f the chemical company and they were doing it a platform and you know, they’re based in Germany, but they really wanted to launch this new collaboration platform in the u s because they realized if they didn’t, if they launched it in Germany, everybody would use German. You speak German on the platform and it would never get out of the home country. If they started in the u s people would start using English and then that would become the shared language for the whole platform.

And in fact that’s what happened. And so it’s a, you know, that’s a multi multi-cam country company. But the same thing applies unless you all agree with what’s the right way to you and how, and there’s no right way, you know, there are plenty of different ways. That’s another thing about the affordances. We have a fun chapter called, you know, digital strategy, the duct tape guide to digital strategy. Um, and we say, you know, saying that there’s one right way to use duct tape is ridiculous. Um, and in fact, I read the Wikipedia article and duct tape and there are so many fascinating uses that I’d never heard of before. And collaboration tools are like that to say there’s one right way to use slack where base camp or whatever is ridiculous and you just need, it’s much more valuable to get everybody on the same page.

And the manager’s the one that’s going to have to set that, state that, and then set an example a and live it out. Now I have two final questions for you. And, and uh, I want you to really just, I am prepared for knowledge bomb. Okay? So here we go. Okay. You get to to say that you get to send a text message to every one of the 500,000 listeners today. All right? You just get real pits in a, and would it matter how long it is, how short it is? You can, maybe you can even send to text messages. What would you say? What would you

communicate to all of our listeners? What’s the big message,

the key message, um, is that what most people, the biggest differentiator between those who are doing it and those who aren’t is mindset. So we, we really rely on Carol Dweck work, Carol directs, Stanford psychologist and what she, she distinguishes between growth and fixed mindset. Fixed mindset are people who think that basically, you know, their success or failure is based on, this is a long text message, but I gotta give you background, uh, is based on the external forces. Growth Mindset believes, you know, success is really based on your own effort. Um, and will, and we see this fixed mindset all the time in companies. Uh, we’re just not a digital company. I’m not a digital person. We’re not digital natives, fixed mindset. Um, my experience is one that anybody can learn enough to be able to, to function in this digital world because it’s not about being a coder.

It’s not about a being a machine learning expert. It’s about just understanding the basics and having some digital literacy. And then the second thing is just go do it. Um, I often say digital transformation is more about wills than it is about skill. It’s a lot easier for me to teach, uh, business leaders, the digital knowledge they need to survive and to thrive than it is to teach the technologists how to be an effective leader. And so what we need is people developing their knowledge, stepping up and saying, I can do this. I can learn this stuff and pushing their companies forward. Long text message. But that’s I think the core point of the book. Now, Gerald, uh, people are going to Google search you right now. They’re going to go up to profit cane.com. It’s p r o f cain.com. Let me say this, thrive nation, you’re going to go up there for some eye candy. When you go to profit cain.com, you’re going to see a beautiful professor up there, a handsome man. And when they go up there, uh, some might be asking, wow, that guy is a, is a great, why? Why are you not a model would want me to ask you that. But we have Larry Limited time so I’m not going to get into the modeling career that you’ve turned down to become a professor. When I do want to end on,

we have a lot of really successful people on the show. Wolfgang puck and Hog Horst Schulze, the founder of Ritz Carlton. And uh, the, I used to manage Walt Disney world resorts, big, big names, great folks like you and you all have some weird idiosyncrasy, you know, like Steve Jobs wore the same thing every day, refusing to get his car tags. They almost always one idiosyncrasy that they do. General McChrystal eating one meal a day. I mean, what is, what is your idiosyncrasy that you do that you would feel comfortable sharing on this podcast?

Oh Man. That’s when I wasn’t ready for what is my, you know, cause I’m a pre, uh, straightforward, boring guy. Um, but my idiosyncrasy do you only eat kale? I mean, look how handsome you’re the only thing, actually I had Kale Caesar Salad today and it was actually quite delicious. Okay. There it is. It’s just a refusal to eat anything, not organic. Is that the thing? Yeah. So I, you know, as with anybody, I’m to be 45 and I realized I better start taking care of this body that has been given to me. I’m not the I, that’s the problem with being a college professors. When you’re surrounded by your 25 year olds, you become really aware of how old you’re getting really quickly. Um,

so can I say your super power is that you eat organic? Is that, is that okay? Is that a, is that an idiosyncrasy we can put it out there. Fair enough. That’s fair enough. Okay. Now people will ask the listeners out there want to learn more. They want to get a copy of the book. A what’s the best way to learn more about you?

Well, the book is on Amazon. We’re actually, I’m thrilled, happy and sad to say we’re sold out right now, but a, a second printing is underway and it’s going to be available soon. Um, my, my website www profit kane.com. I, I joke and say it’s profane except with a k. Oh. How’s that for a tagline? And I’m about, you know, since I started as an expert in social media, I am out there, I’m on Linkedin, I’m on Twitter, I’m on Facebook, I’m on the mall. In fact, I specifically don’t carry business cards anymore because if you are not someone who can find me on Google, I probably don’t want to talk to you. Um, and so I, I should be out there. Yeah. I’m, you know, I enjoy interacting with people, love hearing about the book, Love, you know, happy to answer questions as they come up, you know, to the extent they can be answered via email.

Um, and, you know, go by the book. We’re really, I’m, you know, I think the biggest thing, and we had a really great team. I’m the lead author, but we had, you know, some consultants on it, some really good writers and I think it just reads better than the average business book. Um, one of my colleagues who’s reading, he said, man, there’s just a lot here. I can only read a chapter at a time, but it’s completely readable. So I think you’ll find it a little meatier and more substantive than the average business book. Um, but that, you know, even my wife can read it. Uh, and, and even my, my mother can read it. So, um, it’s, it’s accessible to the average person.

Now are you, do you live near the Boston College campus? I’m about 30 minutes west. I live in a town called Southborough. I am coming to New England to watch my patriots play for the brand. Are you going to that game? Which one? Patriots versus browns at Fox. Not at the moment. But you know, now that you know, now that there’s the opportunity and browns are an upper cover now. No, this is a great, the browns, the browns are no longer a joke. The Patriots have reloaded. We lost six coaches and a bunch of starters. It’s going to be a beautiful thing. So maybe we can connect to when we’re in the New England area. That’d be great. It’s nice to be a patriots fan when people aren’t yelling at you. Oh Man. Oh Man, am I, why were you wearing my Tom Brady Jersey on the airplane? People will have the strong opinion.

How can a patriots fan so 18 years, but uh, yeah, it’s, it’s, it’s a high, high risk, high contact fandom. Now Andrew, have we left a review for the, for the book here? I know, I know we purchased a copy of the book. I know I’ve digested the book, but have we left a review there? Do we do, we know we’ve left a review there about the technology fallacy on Amazon. Have we done that yet, Andrew? We’re doing it right now. Okay, so we’re going to leave you a review right now. If you’re out there and you’ve got $25 in your pocket and you feel like technology is not really your main thing and it’s holding you back and there’s miscommunication and digital clutter and confusion and miscommunication, go get this book because it is filled with the answers that you need to take your business to the next level. Gerald Kane, thank you so much for joining us, sir. Thank you so much, clay. It’s been a pleasure to be here and now we’d like to in each and every show with a boom. And so without any further ado, three, two, one woo.