After a year of change and upheaval, host Tanya Ott revisits some of our most popular and compelling discussions from 2021.
Carey Miller: One of the most powerful things we can do are just to get to know people of other races, ethnicities, backgrounds, genders, much better. Deloitte held a diversity session a few weeks ago and one of the professors that spoke called us walking strangers and that we walk and talk to one another an awful lot, but don’t really get to know one another at a personal level.
Yie-Hsin Hung: If you can create an environment that feels inclusive, where people truly feel like they belong, that their voices matter, then you have a much better chance of not only arriving at a good business decision, but then as you roll it out and issues invariably arise, people feel very comfortable speaking up.
Kraig Eaton: Neither workers nor organizations can control which futures come to bear. This is not a situation where an organization can say, “I like that future. I’m going to head that way. I’m going to make these decisions so that I can lead us into that future.” The government impact and talent supply [and other] external factors are really the things that are going to dictate which future comes to bear.
Mike Bechtel: What COVID-19 did was it punched all these high-performing, exquisite supply chains right in the mouth. And what a lot of organizations have found is that, my goodness, we might need to trade away a little of this performance for agility, for resilience, for flexibility, and for margin.
Tanya Ott: Welcome to the Press Room from Deloitte Insights. I’m Tanya Ott and we’re taking a little time today to reflect on what a wild year it’s been. We’re still dealing with COVID-19. Some of us are still remote. Others are back in the office. Many of us are reflecting about not only where we do our work, but how. And what are the values we bring when we show up each day?
For many companies and individuals, the racial reckoning that came after the deaths of George Floyd, Ahmaud Arbery, and others has prompted another kind of reckoning. Statements about diversity, equity, and inclusion have to have teeth … they have to be backed up with action. That’s where we start our “Best of 2021” edition of the podcast.
Chapter 1: DEI.
There are lots of different kinds of diversity, but one that comes to mind is race. Earlier this year, we turned our attention to the Silicon Valley of the South: Huntsville, Alabama. It’s one of the fastest growing tech cities in America,1 with one of the highest per capita numbers of engineers2 … thanks largely to the defense industry.
Tammy Blish-Honeycutt and her husband cofounded a small government contracting business in Huntsville called MSB Analytics Inc. Tammy is the CEO. Her husband is president. They qualified for a U.S. Small Business Administration program that gives management and technical assistance to socially and economically disadvantaged people and companies—women, minorities ... So they can compete for certain government contracts, but Tammy says there are some baked-in challenges.
Tammy Blish-Honeycutt: The 8(a) program is a wonderful program that does help you get launched, help to win some contracts, but the contracts that are available are less technical. They are less in dollar revenues. And because of that, you’re on a pathway where if you get these contracts, they become your past performance. Then when you begin to migrate out of the program, you have a hard time because your scope and your magnitude, when you’re going after larger context is so small. There’s a disconnect. There is a huge gap. It puts you at a disadvantage in terms of having the scope and the magnitude to compete at a larger level and a higher dollar threshold.
Tanya: Joining us in the conversation was state representative Anthony Daniels, who’s Alabama’s first Black and the youngest state house minority leader.3 He’s been working to promote a new high school, the Alabama School of Cyber Technology and Engineering in Huntsville. It’s meant to build a pipeline of people in STEM, especially Black students from rural parts of the state.
Anthony Daniels: One of the things that we were intentional about in developing this piece of legislation: There is a requirement on the part of the admission to the school to open up their cybersecurity and engineering emphasis at the K-12 level and [build] the foundation even in places like the Black Belt of Alabama, because there is a percentage of African Americans and minorities that must be in attendance at that particular school. The school has to address the diversity and inclusion part of it. That was one of the things that I wanted to make certain was in the actual legislation, that we were being intentional about our focus. If our mission is to educate and create a pipeline or the next generation of individuals in science and technology, we needed to make certain that there are no children, regardless of where they are located in the state of Alabama, regardless of their socioeconomic status, [who won’t] have an opportunity to get into the school. You could not use just test scores or something of that magnitude to allow them to get into the school. If we’re looking at ninth grade—our focus will eventually be seventh grade through 12th—we’ve got to understand that there are some deficiencies at the state level, which is why we also passed a bill adding computer science to the high school curriculum.
We do have to do more. On the front end, we’re making these investments in early-childhood education, even really cradle-to-pre-K in my mind, to build a pipeline, so that we can increase the quality and the rigor of education throughout the state of Alabama, so that it will be very competitive to get into the school. But for parents that are moving to Alabama, seeing the cybersecurity and engineering school, especially located in Huntsville, that makes them more optimistic about the future of our state. And that’s something that each and every day when I’m in the trenches down in Montgomery or here in town, diversity and inclusion is a priority for me—and making certain that we’re not just talking the talk, but walking the walk.
Tanya: Also in the conversation, Deloitte leader Carey Miller.
Carey Miller: One of the things that Deloitte is really humbled and excited to be a part of is we’re helping the school meet their mandate of recruiting minorities and those with perhaps fewer educational opportunities from other parts of the state to Huntsville, to give them a high-quality education and a high-demand STEM area like cyber and digital engineering. When you talk about breaking the cycle, that happens when you overcome some of those economic and geographical barriers to really great jobs in a community like Huntsville that is growing, growing, growing. Those are some things that I really think that the city and the state have started to do well to address these disparities.
Anthony: We all know that the most successful organizations are those that focus their attention on diversity and inclusion. That story of success should be an example. And understand that people of all different races and backgrounds and genders are starting to become more engaged. But specifically Alabama, when you look at Huntsville being the Silicon Valley of the South, we must reflect the diversity that exists in places like California and understand that diversity is good, is a strength, not a weakness. We’re so accustomed to not trading old friends for new friends that we’ve allowed that to really seep into the business opportunities instead of helping grow diversity and inclusion, because it’s going to make things better, it’s going to help you with your recruitment and pipelining, and it’s also going to help you with your retention.
Tammy: The ingenuity, the concepts that come from different backgrounds, it’s just so much more than we can even imagine. And in a place like Huntsville that has that all together, for us not to put it all together and to explore what we can be would be a shame.
Tanya: Of course there are many different kinds of diversity and Katie Dudtschak represents one kind that we don’t often see in high-profile, public-facing positions.
Katie Dudtschak: I am a parent of four incredible children—two boys, two girls. I am an executive vice president with RBC in Canada, and I have the privilege of leading all of our personal and commercial advisers across Canada and regions across Canada, which essentially is about 20,000 to 25,000 advisers that serve our 15 million customers in Canada.
Tanya: Katie is also a woman with gender transition experience.
Katie: I came out to the world as Katie on June 17, 2019. It’s important to pause, though. Given I’m a senior executive with over 30 years of experience, you say,“Well, why? Why at this point of your life?” The practical reality is each of us are whole human beings. What’s important and what I have pride in is, yes, I’m a woman with gender transition experience, but I’m a woman first. It’s taken me many years to get to full authenticity and peace with who I am. I’m at a point in life where I can honestly say that I love myself, and I’m at peace with who I am.
Tanya: Your willingness or embracing every part of you and talking about every part of you is a really brave thing that a lot of people can’t do. But I can’t imagine that it was always so easy, and that it took some time to come to this place.
Katie: I do believe it’s important that all of us as human beings self-reflect. I just happen to have several decades of self-reflection under my belt. When you deal with something like a learning disability or you deal with something as grey as gender and identity questions or as hard to nail down as gender and identity questions, you naturally become quite self-critical and analytical and self-reflective. But I would also say at the core of my being, if you think of the attributes you bring into the world—nature—versus the attributes the world teaches you, which is nurture, at the core of my being I’m a highly sensitive human being. I’m a very curious person. I’m a playful person. That curiosity and sensitivity has been with me for my whole life. I never thought of myself as the typical leader or typical executive. I’m quite analytical—back to the curiosity side—but I’m also quite sensitive and feeling. I learned probably about halfway through my career that it was okay to show sensitivity. I remember the first time I cried at work and ironically, one of the first times I cried at work was with a colleague that was 20 years older than me that opened up his heart to me about his own family experience. I broke down crying with him. What resulted from that one single moment was, one, a level of emotional connection with a colleague that was different from that day forward. But it also taught me it was safe; it was okay to be vulnerable.
The other part is, and it gets back to the dyslexic part, I’m visual and I’m verbal. Writing things down is not my forte. Talking things through is my forte. So when my gender issues really came to a head, I [had] coped for many decades with it. It was there. I remember poring over my mother’s jewelry box at age five. I remember age 12, dressing up like my sister and going to play in my sandbox. Like these feminine or female feelings were with me from childhood, but I suppressed them because I got really good at setting goals and being busy. I said to myself, based on my other life experiences, “I’m going to prove to the world I’m smart enough and I’m good enough, and I’m not going to let anybody stand in the way of my family goals or my career goals.” That served me really well until about five years ago when my children got older and I began to mature in my career, where the job just got easier because I knew it intuitively. Then what happens is—some people in my community call it the beaver dam broke or the dam broke—the gender feelings got stronger and stronger and stronger because there was space for them. I couldn’t ignore them any longer. I began to research earnestly what the heck was with me. Unfortunately, like many people with transgender experience, as I worked that through and figured out that my mind wiring and emotional wiring was female, but my physical body was born male, I ended up in a very dark place. About 80% to 90% of us seriously consider suicide. It’s this conflict between knowing your identity and fear of rejection from the world, from your family, from your colleagues, fear of hurting my children, fear of hurting my partner. That conflict of knowing your truth, but [being] so fearful of rejection and judgment, is what brings people to the brink from the mental health perspective. I kind of got to the point ... no, not kind of, I got to the point of sharing my truth after hitting the darkest period in my life. Ultimately, being more mature and more senior, I have the benefit of a lot of really wise, loving people in my life that I had confided in in my journey. In October 2018, I made a promise to myself that I would be around for 50 more years. I would be around for my children. I also made a promise to myself that I would find a way to embrace myself in my job. The nuance of that is I was in this job, leading 25,000 people. I knew that if I had to give up my job, that from a mental health standpoint, it would have been even more damaging for me.
Tanya: Katie, when you decided to share your story and bring the people at work into your journey, how did that go down? How did you do that?
Katie: I didn’t think it would go down very well at all. When you’re in the depths of fear and anxiety … my therapist rated me at the 97th percentile of anxiety, so I didn’t think it would go well. The reality is it went extraordinarily well. In December of 2018, my partner and I told our children. In February of 2019, I started hormone therapy. In February of 2019, I told our CEO, the head of HR, and my boss, my truth. They responded extraordinarily well. You don’t text the CEO, but I did, and I texted the CEO and I said, “Thank you for being so compassionate and hearing me out.” He came back to me and said, “I cannot get over your courage. I don’t know how you’ve done this. I’ve got a lot to learn. And RBC is with you.”
That’s what I needed to hear. I needed to know that they were willing to come with me on this journey. I didn’t make it a requirement that they come with me on this journey. I knew I had to face my own truth, but then they ultimately chose to come with me on this journey. Through the next few months we built a plan together. We built a critical path of how we would tell the board of directors and how we would tell senior management and how we would tell my senior executive-leadership team and then ultimately how we would create this video to tell 80,000 employees my truth.
Candidly, the curse of my job was I had to get comfortable being vulnerable with 80,000 people. The blessing was that the CEO and my boss volunteered to be part of the video. And secondly, the blessing was that I had emails coming in from thousands of colleagues saying, “Katie, you’re brave and you’re courageous”—which I still have trouble with. I did it to survive. They say, “Katie, you’re going to save lives.” Quite candidly, what I was doing was selfish. I was doing it to save myself. I really hadn’t internalized that it would be an example, I would be an example for others that might create hope that they could save themselves. But the most riveting for me and humbling for me was that countless numbers of employees started telling me their personal stories. Because they saw vulnerability, they felt safe to share with me their personal stories and their vulnerability, whether it’s a woman that was abused or whether it’s a woman who has several LGBT members of her family and was fearful of being ostracized from their home country. I’ve got countless stories I could share. What it gave me as a leader, and this is the leadership learning, is by showing vulnerability at that scale and then receiving vulnerability from so many employees back, what I got to see was that the human beings we see at work is really just the tip of the iceberg. That there really are whole human beings underneath that tip of the iceberg and in many, many human cases, if not all, there are traumas, there are hurts, there are struggles that somehow in society we’ve taught people, and in business we’ve taught people, to suppress it and don’t talk about it at work. I felt like I had this new consciousness around what’s really going on in people’s lives and the burdens that people are coping with.
Yie-Hsin Hung: It is an area that I’m very passionate about.
Tanya: Yie-Hsin Hung is CEO of New York Life Investment Management. In March on this podcast, we had a wide-ranging conversation about being an Asian woman in financial services. She’s also the mother of an adult son with autism and that informs how she thinks about workplace diversity.
Yie-Hsin: I just want for him what I think most parents want for their children, which is the ability to live a fulfilling life and to be able to contribute to the most of their ability. We are starting to embrace neurodiversity and thinking about implementing a pilot program, hopefully, when we get back into the office, where we can start to bring people on that autistic spectrum into the workforce and integrate them into the organization. It’s very important. All of these elements go a long way to creating a more just society and more inclusive environment.
Tanya: How’s that pilot program going to work?
Yie-Hsin: What we want to do is make sure that we have good matches between a person’s skill set and what the job requires. We are definitely training our managers and having them appreciate some of the characteristics of people on the spectrum and what level of support they need, and doing it in a way that’s really measured: try to do it on a small basis, make sure we’re learning and understanding how we get to success, and then begin to expand it over time.
Tanya: It’s interesting you mention the support that people need when they’re on the spectrum. But I also think a lot of times people who don’t have any experience with interacting with someone who is on the spectrum don’t understand the capabilities that they bring that are really powerful. I had someone I worked with once who was on the spectrum and he was fluent in seven languages because that was something that had fascinated him from the time he was a child. And it was really, really useful from a business perspective in what we were doing.
Yie-Hsin: Exactly, and so much of this conversation around diversity, particularly in a year like this year where there’s been such an effort and focus around social justice and the like, we’ve been holding a number of programs internally that are candid conversations, talking about race, talking about people’s experiences, and trying to create a safe environment where we each get a better understanding of where the other person is coming from and what they experience being who they are. What you’re talking about is just an extension of that. The more that we can appreciate the differences and the value that people bring, we have a much better chance of giving them a career where they can be very successful.
Tanya: Those kinds of conversations that you have been having within your organization are not always easy to have. How’s the process been for you?
Yie-Hsin: I would agree, it’s not. Some of these conversations and topics can feel like they belong in that sort of taboo category, if you will. But we have been focused around a lot of these conversations going on five, six, seven years. We have a team within our HR group that is really good at facilitating these conversations. We’ll bring in outside people to help us go through the process of learning. We’re having managers learn how to hold conversations with our teams and really bring to light any unconscious bias that people might have. One of the things that I’ve done, I started out with my extended leadership team engaging in this training, and then I asked each of them to host sessions, not necessarily just with their team members, but with other employees around the organization. As we know, sometimes, it’s one thing to learn, but it’s another thing to teach. When you can put people in a position where they really have to get in and understand it, there’s a better chance that it becomes much more internalized.
Tanya: Chapter 2: How We Work.
Melanie Langsett: What we’ve seen during the pandemic is that leaders have had to trust their workforces in ways that they’ve never been stretched to do before with the focus on measuring outcomes versus activity.
Tanya: That’s Melanie Langsett. She’s a principal with Deloitte Consulting LLP and US leader for reward, recognition and well-being.
Melanie: That’s very positive and hopefully something that we’ll be able to pull forward postpandemic, that it’s not about how many hours you’re working or how many hours I see you sitting at your desk, but rather, “What is the output? What’s the impact that your work is making?,” and really measuring that, which will allow people to take that time off that they need.
Tanya: Melanie coauthored a paper with Deloitte’s Nicole Nodi about the “Disconnect Disconnect”—basically, this “always on” feeling many of us have. I don’t know if you’ve felt it too, but for me it seems it’s gotten harder to take a break from work.
Nicole Nodi: We need companies to find a way to make their culture mesh with their policy, to build this trust with their workforce, that they can actually take time off when they need it, that they’re not going to get in trouble, that it’s not going to cause them to be one rung lower on the “could get fired ladder” or something like that.
Melanie: I couldn’t agree more with what Nicole said, and maybe I’ll say it a little bit differently—let’s walk the talk.
Nicole: I’m looking at small shifts in cultural norms to just start out that larger cultural transformation, things like making [being] busy not a sign of pride, that always being online, regardless of whether you’re being productive, shouldn’t be looked at as a really positive thing for you to be doing. This phrase has been coming up lately and it’s true—what is your [rest] ethic? When do you need to take time off? Is it after a project? Is it in the summer because your kids are off of school? [Do] you need to go visit elderly family out of state? Things like that.
It’s not just about taking those long breaks. There’s also the concept of time-off microdosing. That’s basically a practice that you can start with yourself so that you can disconnect in these small ways to sort of build up your tolerance so that when eventually you get to take a week off, it doesn’t take you until Friday to relax enough to be off.
Melanie: I love that Nicole. It’s a muscle that you have to build.
Tanya: We’ve hit a major inflection point in the future of work. Will we stay in the office? Will we continue working remotely? Will there be a great resignation? These questions and more hinge on the relationship between workers and employers. And in August I talked to Nic Scoble-Williams—a partner at Deloitte Tohmatsu Consulting— and Kraig Eaton—a principal in Deloitte Consulting LLPS’ US Human Capital service area—about the loads of data they’ve gathered on how the worker-employer relationship is being disrupted right now.
Right off the bat, they led with the story of e-commerce giant Shopify, whose CEO had sent an email to thousands of employees saying “we’re a team, not a family” and we can’t “solve every societal problem.”4
Kraig Eaton: It’s interesting when any leader comes out and makes a bold statement that we’re a team, we’re an organization, we’re not a family. At face value, you can look at that and say, that probably created some divisiveness between the leaders and the workforce of the organization. But it’s a really good indication of all of the disruptive events that have occurred over the last year and a half and how it is creating a push-and-pull effect between workers and their employers and trying to navigate what’s proper, what’s appropriate. How do we ensure that we don’t build an environment that is divisive and rather build an environment that recognizes differences? But it was a pretty bold statement. And it’s one example of a few where organizations and leaders feel like they need to come out and make some pretty bold statements to try and set direction around where this relationship might be going.
Tanya: You mentioned proper or appropriate, and another example you have is the software company Basecamp, which weighed in on what employees can talk about while they’re at work.5
Kraig: No political conversations, maybe even no social [issues] conversations. Again, the similar thread between the Shopify and Basecamp example is how do we ensure that we create an environment that doesn’t foster divisiveness? I think you can. And Nic, I’m sure, can weigh in on this. Where is the line and how clear is that line to your workforce? I think statements like that are easy to articulate, but very tough to manage and to have to navigate.
Nic: One of the things that really struck me throughout the journey, Kraig, was the way that every day we would observe or we would experience in our work with clients, a new move, whether it was a move from the worker perspective or the employer perspective. There would be a CEO coming out with a different statement or an article, for example, talking about, The New York Times piece, YOLO—you only live once.6 And it was just fascinating to see that we are in this moment. These examples that we’re talking about are endless, and they don’t all necessarily reconcile except to highlight that these expectations from both the worker and the employer perspective are really in flux and are evolving in an incredibly fascinating way that’s really creating opportunities and challenges that many of us have never had the chance to explore before.
Tanya: So in your new special report, you explore a set of possible answers to the question at the heart of all of this, which is how might the worker-employer relationship evolve to meet the opportunities and challenges of the post–COVID-19 world? Was there a salient moment that you can remember when you said to yourself, this is a really big issue, it’s not going away, so we need to tackle this one head on?
Kraig: I’ll share a couple of statistics that really, for many organizations not just us as authors, are bringing this challenge and this evolution to the forefront. The Microsoft Work Index came out and one of the key data points was that 40% of those global workers that were surveyed articulated that they’re considering leaving their employer within the next year.7 Another key data point that shows a little bit of the inequality around the implications of the pandemic: 80% of job losses were among the lowest quarter of wage earners.8 And one last one to just maybe answer your question, 70% of employers are struggling to find workers with the right mix of skills and capabilities.9 These talk to the uncertainty that is in front of us as a result of the pandemic and how it is causing both workers and organizations to take a step back, reflect and try and make a determination around how this environment is impacting their relationships. There is no playbook that people can pull out and say, we’ve seen this in the past, let’s just follow the same playbook. There’s a recognition that there’s a high degree of uncertainty associated with this current disruption. Everybody’s trying to employ different strategies and techniques to solve for the here and now. What we’ve articulated in this concept of scenario planning is there is no one certain future. You’ve got to really respond with a strategy that thinks beyond just the next six to 12 months and helps you to set a sustainable strategy and relationship between those two key parties for a much longer term.
We coined this shift from a mindset of surviving to a goal of thriving. A survive mindset really is focused more on the short term with this expectation that if we could just get through this disruption, if we get through, we can return to normal. We can revert back to the way we used to operate. So by definition, it leads many organizations and leaders to think about solutions and strategies in a shorter term. When you think about thrive, thrive is a focus on recognizing that disruption’s not going to go away. There will be future disruption, climate change, political unrest, and making decisions through a longer-term view will set up organizations to thrive and to really develop a competitive advantage that helps them to succeed in the long term.
Tanya: Kraig and Nic identified four possible futures of work, depending on how things unfold, including a potential war between talent where workers are competing for limited jobs and the relationship between worker and employers become very impersonal. You can find their full report at Deloitte.com/insights.
Tanya: Chapter 3: Technology
Scott Buchholz: What we’ve learned from doing trends research for 12 years is that there are actually recurring patterns that we wind up seeing over time.
Tanya: That’s Scott Buchholz, emerging technology research director for Deloitte Consulting LLP. This year his team—including Tech Insights research lead Anh Phillips and Chief Futurist Mike Bechtel, both of Deloitte Consulting LLP—decided to dig into those patterns and try to predict what will happen to technology in the next 18 to 24 months.
Anh Phillips: To be clear, this is not a COVID-19 edition of tech trends, but there’s no doubt that the pandemic has had a big impact and influence on the trends that we’ve identified this year. It has accelerated a lot of changes in organizations, and it’s impacted a lot of their technology initiatives. We’ve interviewed a number of executives who say that in the past months they [had] experienced a lot of digital change and a lot of transformation that they really hadn’t before—years in the span of several months. It’s forced companies to interact with their customers and their employees in different ways. Because of all of that, we can see the trends are being affected by the pandemic this year. So from core to supply chain to our digital workplace and “bespoke for billions,” some of those are trends that we’re seeing this year that are going to continue to happen, that have been catalyzed by the pandemic.
Mike Bechtel: In chemistry, a catalyst speeds up and sustains a chemical reaction. What we found with COVID-19 is that it hasn’t necessarily changed things. It hasn’t shown up as a wild card or a black swan. It’s accelerated things. Work from home, for example, or work virtually—that’s been a trend 10 years in the making, but strategies and plans that expected five-year turns have happened in five months. Mark Andreessen, the venture capitalist, said 10 years ago that software is eating the world. COVID-19 has increased its appetite. It’s eating it faster. The big shifts are continuing in the directions they were. The velocity, that’s changed.
Tanya: Are there any new shifts that you’ve identified?
Mike: One of the novel things we’ve been seeing is that in a world where the best talent could be anywhere, any time, the opportunity to broaden our net of what a high performer is broadens along with it. So we see that opportunities for greater diversity, equity, and inclusion seem to be creeping up in a world where you’re able to find the best people wherever they are.
Tanya: Let’s dig into the trends. Scott, you’ve got nine trends this year. How should we be thinking about these trends? How are you organizing them?
Scott: When we put them all together and we’re looking at them, what we realized was that there are actually three groupings of three, Tanya. The first grouping is this idea around the heart of the enterprise. What are the things that drive companies? How does strategy inform technology and vice versa? All of those sorts of things are heart of the enterprise.
The second grouping is all about data. Here what we’re seeing is, what’s the art of the possible? Whether it’s machine learning or making machine learning run at scale or zero trust for cybersecurity, there’s a ton of change that’s been happening and that’s continuing to happen as we are speaking now.
The last grouping is really all about experience. Whether it’s inside the organization with customers and constituents, whether it’s about diversity, equity, and inclusion, there’s a tremendous amount of change as we’ve gotten comfortable with digital interactions because we’ve been forced to do more ordering online, but still want the feeling of dealing with our fellow humans in person.
Anh: You might have heard the phrase that every company is a technology company, and what that phrase speaks to is how integral technology is to an organization’s future and success. In a separate, multiyear study that we did on digital maturity and transformation, we found that companies that were furthest along in this whole process, and this whole journey had digital at the core of who they are and how to integrate it into their overall company strategy. So when you look at a technology strategy and a company strategy as two separate things, you’re missing an opportunity to really think of your company in terms of a technology company. You’re also missing the opportunity of using technology to help feed into your strategy. It’s becoming increasingly difficult to separate both of these.
The challenge for a lot of organizations is they don’t quite think that way. They operate in silos—the technology folks are thinking through the technology strategy and the business folks are thinking through the business strategy. But increasingly, the technology and the business are going to have to work more and more together to come up with an overall company strategy.
Beyond that, what this trend speaks to is the idea that technology really can support strategy development. It can help better sense triggers and trends in the marketplace to inform your organization on decisions that it’s making. It can help better monitor your progress and your outcomes against those strategies. It can help with scenario planning. A lot of this is about using data and the latest AI and technologies to think of strategy in a way that we hadn’t before.
Tanya: Moving on to the art of the possible. This is all about data. As enterprises move further toward automation and machine-led decisioning and human capacity, all of that kind of stuff, what are the trends that we’re seeing there?
Mike: So the data story also comes in three parts. The first is this move from data science to data engineering. The idea that AI is growing up and moving from the realm of the exceptional individual to the realm of the professional team. The second is an idea we call machine-data revolution, the idea that organizations need to rethink from first principles, the kinds of data they store and critically how they store it, putting it together in a way that is optimal for machine processing and insights as opposed to lonely human analysts. Then the third is the idea of zero trust—the evolution of cybersecurity postures from sort of castle and moat, where the presumption is that the baddies live outside and we can trust everyone inside, to the idea that, let’s not trust anyone from first principles, rather, let’s check, verify, and ensure that the right folks have the right privileges and access at all times.
Tanya: One of the questions that it raises is how can automated machine learning, model development, maintenance, delivery, all of these sorts of things affect the life cycles and industrialize AI? Like what does that mean?
Mike: AI and machine learning have felt artisanal. And by artisanal, I mean custom, one-off, custom tailored suits, if you will, in organizations that are otherwise about industrialization, production, speed, scalability. That’s resulted in two problems. One, machine learning talent, you know, the mythical data scientist, they’re hard to find and they’re expensive. The second problem is that these folks, once engaged, spend a huge percentage of their time doing data cleaning, data preparation, data sorting, things that aren’t necessarily data science. They’re data engineering. So what we’re seeing is this move away from singular heroics to a team sport wherein teams of “merely” very professional engineers are there to gladly do all of that prep work so that the data scientists can do their work with excellence and with speed. This is the key to sustainability. There’s that old quote: If you want to go fast, go it alone. If you want to go far, build a team. At its heart this is a story about AI growing up and becoming a team sport.
Tanya: What are the challenges to making it a team sport?
Mike: One of them is accountability. When you go from me to we, you can create a diffusion of accountability, a lack of transparency. Who made this decision? One way to overcome that challenge is to ensure that the algorithms and the approaches underpinning AI models are themselves transparent and explainable. So sometimes we hear about explainable AI as this sort of virtue-signaling play. In reality, it’s a way to ensure that the left hand knows what the right hand is doing in a world where no singular developer developed the algorithm.
Tanya: How do organizations have to rethink their data strategy if all of this data is going to be tuned for machine consumption and not necessarily human consumption?
Scott: It’s a really important question, Tanya. As Mike was alluding to, as organizations are going from hundreds and thousands of machine learning models to tens of thousands and hundreds of thousands, what we’re seeing is for the past 50 years, we’ve collectively organized data to give a small number of decision-makers a small number of key performance indicators to make a small number of decisions. Now these machine-learning models can use thousands or tens of thousands of pieces of data to make decisions in real time in order to have massive impacts and do things at scales we’ve never seen before, because humans just don’t scale to that. As a result, what people are looking at is rethinking what they store, how they store it, how it’s made available, and a whole slew of other things that essentially feed the processes that Mike was talking about.
Tanya: The tech trends that Scott, Mike, and Ahn identify will affect some businesses more than others. There’s a seismic shift happening right now in the financial services industry and it’s going to affect each and every one of us—from multinational corporations to the more than one billion adults in the world who don’t have a bank account.10 I had Linda Pawczuk—Deloitte Consulting LLP’s leader of global and US blockchain and digital assets—and Richard Walker—principle in banking and capital markets at Deloitte Consulting LLP—on the show to talk about it. Their team recently surveyed more than 1,200 senior executives and practitioners in financial services around the world to get of sense of what they expect to come down the pike.
Linda Pawczuk: Let’s be clear, in the last year a lot has changed—not just in US markets but all over the globe—with the virtualization of business and commerce and regular day-to-day things for consumers. Imagine, even a year ago, how health care has shifted to telemedicine. We have accelerated into this weird period of what we like to call “digital everything.”
[We looked at] what that’s doing in terms of the financial services industry’s new business models, and one of the things that surprised me is that 80% of our respondents say that digital assets will be very, or somewhat important, to their respective industries in the next 24 months. 80% of all respondents; that’s globally. [Blockchain had] been something that had some decent pace a year ago, [but] it was still being explored. Now, 80% [of all respondents] view this will change their industries in 24 months. What’s a bit curious is that 75% agree strongly or somewhat that the organization will lose an opportunity for competitive advantage if they fail to adopt digital assets and blockchain. Now, remember, we were highly centered in the financial services industry, but these are two very profound findings. So here we are in the era of blockchain and the era of digital assets moving at hyper speed. We call it a seismic shift. It’s taken a wee bit of time, but it’s dramatically and profoundly changing what we know today to be the financial ecosystem market.
Tanya: Richard, there’ve been a lot of disruptions that are making this shift happen. One of the first of them, of course, has to do with the move to digital currency. I know most of our listeners are probably familiar with the concept of fiat currency; but, in case we use that term, I want to define it for people who aren’t familiar with it. If you’ve got a US$5 bill, you’ve got Lincoln in your wallet. That is fiat money. It’s government issued currency that’s not backed by a physical commodity like gold or silver. Essentially, one of the disruptions we’re seeing, Richard, is the end of fiat currency—maybe somewhere in the future—and then the move to digital currency.
Richard Walker: It’s really, really interesting to unpack, Why now? Why is that happening? Global trends over the last couple of years, largely catalyzed by COVID-19, have led to increased digital payments, increased reliance on networks and network-based transactions for local country as well as global commerce, [and] the rise of digital payment companies, which are shadow banking systems. If you look at China, for instance, the largest payment companies are private companies using their version of information-based, but not digital, information-based money to affect transactions outside the banking system, which ultimately do get settled in the banking system. It led to China, in particular, introducing and being the first major economy to introduce a central bank digital currency, thus catalyzing central banks around the world to look at the future of money. These trends had been building for a while but really came together and are now in focus.
When we step back and think about the seismic shift, you might ask me: What does it mean? What is that and what’s changing? What’s changing is the surety and the cycle time of a transaction, the basis of trust in that transaction, transparency, speed enabled by simplification, standardization, just general good design. Where does that good design come from? Bitcoin and blockchain introduced a design for a distributed ledger to capture a transaction in a block and then layer those blocks securely, to do them with a distributed network to drive trust through solving the Byzantine generals’ problem of distributing a piece of information to multiple parties and then identifying exceptions— bad actors trying to change a transaction. It’s a perfect data model, but before general acceptance there needed to be a maturation, a growth. There needed to be advancements in the scalability of the network.
A few years ago, people talked about the blockchain network not being scalable. If we look at our survey results, among a cohort called FSI pioneers, 96% of those respondents said they view blockchain as broadly scalable. That is a significant change because of advancements in the global network, in layer two protocols, and other things that are going on. While there’s been growth beneath the surface in the maturity of the network, the distribution, the reliability of the network, the performance of the network, coming from the top down, there have been these other macro drivers: the pandemic driving digital payments and central banks getting on board with exploring what will be a very different money. Those two data points vector into where we are now. The survey data shows that the respondents also believe there’s a compelling business case now for blockchain, digital assets, and cryptocurrencies within their organization because of these factors. It’s seismic in the thinking. It will be seismic in the impact, but we’re not yet into the full impact phase.
Tanya: If you’re a regular listener of this podcast, you hear words like blockchain, crypto, distributed systems, the edge thrown around a lot. You may kind of know what they are, maybe understand through context clues what they do. But I bet you’ve got questions … and I’m going to close out this “Best of 2021” show with a few highlights from one of my favorite interviews of the year. If you’ve got a fitness track on your wrist, there’s a good chance it is built on technology developed by Mahadev Satyanarayanan. He goes by Satya and he’s an experimental computer scientist and professor at Carnegie Mellon University. He is truly a pioneer in the field and what I love about Satya is that he has a way of explaining complicated technology in a way that’s easy to understand.
For instance, here’s Satya explaining edge computing.
Satya: Let me give you two examples just to see how the same idea manifests itself in different forms. One very simple idea is a kind of augmented reality in which I have some kind of wearable device, maybe a heads-up display, Google Glass, Microsoft HoloLens, Magic Leap, or something. And on it are sensors. There’s a video camera, microphone, accelerometer, gyroscope, et cetera, and the signals from them are transmitted to a cloudlet nearby which does compute intensive processing, for example, scene analysis, object detection, et cetera, and then returns, for example, an audio signal that whispers in my ear an important and helpful guidance for some task that I’m doing.
A simple example would be, imagine I’m growing old and starting to forget the names of people. Imagine a system like this whispering in my ear the name of the person who’s in front of me and maybe even a few cues as to how I know that person. That kind of real-time cognitive assistance—we call this wearable cognitive assistance because it’s happening on a wearable device. But what you’re getting is AI at the edge through the kind of seamless spanning of multiple tiers in an architecture like this. So that’s one example. All right. Very cool stuff.
As another example, consider a drone. Imagine an autonomous drone, a drone that’s flying by itself under AI guidance on board. It’s continuously analyzing what its camera is seeing. And imagine that because the drone is so small and so light, it cannot carry on board all of the compute needed to do real time video analytics. That’s very, very compute intensive. So the way you handle this is you use wireless communication, 4G LTE today, possibly 5G soon, to communicate with a ground-based cloudlet. That cloudlet doesn’t have to fly. It’s on the ground, so it can be heavier, larger. It can have a large GPU (graphics processing unit). It’s plugged into the wall so it has no battery limitations. And this system, the drone plus the cloudlet, is able to do the analytics that would simply be impossible to do on the drone alone. Now, here’s where the beauty of low latency comes in. If the real-time video analytics reveals some important object or scene in the current view. If you get the results back fast enough you can, for example, ask the drone to take a closer look by dropping down in altitude and getting a zoomed-in view of the same scene. Imagine doing all of this purely under software control without human intervention. That is the kind of sensing and actuation in a cyber/physical system within very tight time bounds that is possible through an approach such as the one I described.
Tanya: Those are such cool examples, and I have to say that I could totally benefit from the eyeglasses or whatever that would whisper in my ear about who I’m talking to. It would cut down on the number of times I have to say, “hey, you!” instead of someone’s name.
Satya: Indeed. This is not so far-fetched. Let me give you a real-world example. Every one of your listeners to this podcast uses something which works this way. They just don’t think about it that way. So not that long ago, if you wanted to find your way through a new city or new part of the country that you just moved to or were visiting, you needed paper maps. And they were somewhat annoying to use. You first tried to figure out where you were, where your destination was, where they will point to the right way, etc., and it’s easy to get lost. Today, [almost] nobody uses paper maps. You have a GPS navigation app on your smartphone or in your car or both. It tells you what to do next. If you make a mistake, you don’t take the exit that it asks you to, it detects it quickly, recovers and guides you to your destination. So what was a difficult task has been dramatically simplified. And the way it works is your smartphone is using the GPS satellites to send information about location. So the kind of wearable device analyzing video data and audio data in real time and guiding you is like GPS navigation on steroids. It’s guiding you through life in a task-specific manner.
Tanya: That gives us a sense of where edge of cloud stands today. What’s the uptake been like in terms of companies deploying it?
Satya: So, there are two halves to this story. One half of the story is the deployment of infrastructure, the actual rolling out by companies like telcos or other companies of edge infrastructure, which are these cloudlets and, possibly also because they’re quite well suited to each other 5G wireless communication, because the lower latency and higher bandwidth of 5G is especially valuable and it’s amplified by the use of edge computing. So that’s half the story.
The other half of the story is translating this into new applications which deliver end-user value like the ones I just described. Imagine being able to help your elderly parents stay at home six months longer, rather than having to move to a nursing home, because through a cognitive assistance of this kind, it is able to remind him or her of daily tasks they need to do, helps to remind them when they’re forgetful and in many ways helps them function in the current environment just a bit longer. That’s the kind of real-world, end-user value that is incredibly valuable and the creation of those applications—we call this class of applications edge-native applications. These are applications you could never create just using cloud computing. They are critically dependent on the edge. The creation of edge-native applications is the other half of the equation. These two halves go hand in hand. You can’t have edge-native applications without edge infrastructure. And by itself, the edge infrastructure isn’t very interesting to most people. Who cares where my compute is done? What I care is what that compute can do for me. So the path forward is an interweaving of the rollout of the infrastructure and the creation of these new life-changing, game-changing applications that are edge-native applications.
Tanya: What advice do you have for organizations that are looking to bring AI to the edge, for instance, to take advantage of the technologies? What should they be thinking about?
Satya: There are a number of things, of course. One is to ask the question from an enterprise-specific viewpoint: Where are the choke points in our daily workflows? What is the kind of functionality that doesn’t exist today, but would dramatically change matters? Let me simply give you one example of a hypothetical. This is not yet built, but it’s an example of how to think about this. In air travel, we’ve all been in this situation where you board a plane, it’s ready to take off, it’s about to push off from the gate, and then there’s some mechanical problem involving the jetway or something. And you sit there for half an hour because the right mechanic has to come from the far corner of the field because he or she is currently working on something else. That’s half an hour. It’s estimated that a typical airliner filled with people runs up US$600 per minute when delayed like this.11 Of course, that doesn’t include people’s time, delays’ consequence, missed flights, all this other stuff. Imagine through the use of tools of the kind that I mentioned—wearable cognitive assistants—one of the mechanics who’s right there, right beside the aircraft right now, can be given step-by-step guidance to troubleshoot and fix the problem and solve in five minutes rather than waiting for the other person to arrive in half an hour. That’s an example of a dramatic change for that business, in this case the airline, which is huge. Similarly, you can think of any industrial setting where there’s troubleshooting; expertise by definition in any domain is rare. That’s why the person is called an expert. Software and wearable hardware of this kind, combined with edge computing, can amplify the value of experts and thereby make the productivity improve the productivity of the whole organization. So these are ways in which I believe companies can think as they think about AI at the edge.
Tanya: Mahadev Satyanarayanan —or simply Satya—is an experimental computer scientist and professor at Carnegie Mellon University.
So there you have it—the top hits of 2021 on the Press Room. We’ve got longer conversations with each of the guests you heard today, plus many more on our webpage, http://www.deloitteinsights.com/. When you follow the podcast, it’ll automatically show up on in your favorite podcaster on whatever device you use. It’s an easy way to get insights that will help you in your business and in life.
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