Transcription:
Penny Crosman (00:03):
Welcome to the American Banker Podcast. I'm Penny Crosman. How are tech trends reshaping the workplace and what should banks do to adapt? Our guest today is Phil Simon, author of a new book called The Nine, the Tectonic Forces Reshaping the Workplace. He is also a consultant and former college professor. Welcome Phil.
Phil Simon (00:23):
Penny, thank you for having me.
Penny Crosman (00:25):
Thanks for coming. So let's start with one of the book, one of the trends you talked about in your book, which is remote work. In your book you say, the war over where we work is over, deal with it. Now, in the financial world where American Banker lives, many large banks are trying to get people back into the office. For example, in April, JP Morgan Chase's operating committee sent out a memo asking managing directors to work from the office five days a week. And they said in the memo, our leaders play a critical role in reinforcing our culture and running our businesses. They have to be visible on the floor, they must meet with clients, they need to teach and advise, and they should always be accessible for immediate feedback and impromptu meetings. And JP Morgan Chase CEO Jamie Diamond has described working from home as management by Hollywood Squares.
Phil Simon (01:19):
I saw, I know that article, I know the story, but I didn't hear that quote. That's a funny quote.
Penny Crosman (01:23):
So what is some of the answer to that? And do you think that some of these banks that are trying to bring everybody back in could be making a mistake and that they could lose some top tech people, for instance, as a result?
Phil Simon (01:37):
Oh, a hundred percent. In fact, there was a study that came out, I think I quoted in my previous book, I think it was from the University of Chicago that, well, I'll just ask it as a question. Guess what percentage of it jobs can be performed remotely?
Penny Crosman (01:50):
Hundred,
Phil Simon (01:51):
Boom, hundred. So we've had this unique opportunity, penny, as you know, over the last three years to really redefine things and prior to the pandemic, especially in the United States, but certainly in some other industrialized countries as well. Our work lives were the center and our personal lives revolved around them. The average American commute, pre pandemic, I believe was 37 minutes. We've had now for the last three years, the opportunity to reset that or invert that. So in many ways, our work lives revolve around our personal lives. So if you're only commuting to the office, let's just say three days a week, and you have the average commute, which is 37 minutes, you're saving about 150 minutes per week. So think about what could you do with an additional, how's my math? Four hours, actually less than that, two and a half hours per week. Could you exercise?
(02:43)
Could you pick up a hobby? Could you spend time with your kids? Could you eat better? Whatever you like to do. And people are reluctant to give that up with good reason. With respect to banking, I understand the need for in-person communication. You'll get no argument from me that despite tools like Slack, zoom, Microsoft teams, sometimes it's aged. It's easier to be in the same physical proximity as someone to tap some on the shoulder. Hey, penny, do you have a minute? Versus sending 17 emails or Microsoft team messages back or getting on your calendar for a Zoom meeting. But I do think that there's this false dichotomy about all in-person or all remote, if I am honest with myself. I think that yes, there are certain times in which I don't need to be in office, and other times that I do, whether it's for collaboration or brainstorming or training or just data to know my colleagues.
(03:31)
So if you look at the data, Nicholas Bloom, who's a professor at Stanford, runs a research outfit called WF eight Research. And if you look at his analyses over the last three years, it's ebbed and flowed, but it seems like we're going to land on, as a general rule, not across the board, people being in the office about three days a week and people being from home about two days a week. And for me, that seems reasonable. I think it's absurd to say that we can only be productive in the office. Again, the pandemic proved otherwise, and we can't be productive at home. So to me, there's a happy medium. And with respect to banks, I completely understand that if you're managing my money, I want to shake your hand and have lunch with you and get to know you a little bit versus just be on Zoom. But do we have to be in the office all five days a week? Could it be three or four?
Penny Crosman (04:17):
Yeah. It's an interesting dichotomy as you talk about, and it seems like they're requiring the people at the highest levels to come in the most. And the Hollywood Squares thing is kind of an interesting point, but is there any way technology can help recreate those little coffee chat conversations you have when you just happen to bump into somebody in a hallway
Phil Simon (04:44):
Or, yeah, there are rough facsimiles out there, penny. There's one Slack app. There's probably for Microsoft teams as well called Donut that would effectively randomize encounters with folks, but then you'd still be in front of a screen and Zoom fatigue is a real thing. So I am a big believer that particularly if you're young and you haven't built social capital in an organization, and if you think about what's traditionally a conservative environment like banking, do you really want to promote someone or hire someone when you've never met that person? I mean, proximity bias is a real issue. I did a lot of research for this book as I have with really all of my books, but Slack's Future Forum did a tremendous amount of research around proximity bias. This notion that if you're out of sight, you're out of mind. You could be working your tookus off and you're at home, but nobody notices.
(05:33)
And I'm in the office taking two hour lunches and playing on Instagram and TikTok or playing Scrabble or whatever, and people think that I'm working hard just because I'm there. Something like 37% of executives pulled believe that proximity bias was the number one concern. It would create this two-tiered system. And in fact, again, the data proves this. We know that people, if we control for performance, get promoted more if they're in person versus if they're remote. So there are things we can do to attempt to replicate the in-person experience, but I really don't think that it's the same with the existing collaboration tools. In chapter seven of the book, I talk about immersive technologies like AR and VR and some other things that you can do, but just I'm a big believer in bonding with folks over foosball or getting lunch with them or things that way. If you're trusting them with your career or your clients in the case of banking, you do have that comfort of that you wouldn't necessarily have if you were talking to a screen.
Penny Crosman (06:37):
Yeah, that's a good point. Well, since you brought up immersive technologies, I know that was something that was one of the key trends that you wrote about in your book, but I have to say in the financial industry, it's been something that I would say has been in the pilot or experimentation stage for decades. I feel like banks, every now and then a bank comes out with sort of an augmented reality pilot or a presence in the metaverse, and I've never seen those things blossom into something super practical and something that employees and customers really use in a very workmanlike way. Do you think that immersive technologies are going to get to that really practical workplace stage, or do you think they're likely to remain a fun gamification thing maybe to a game for younger people or maybe as a training tool or something like that? Do you see real life use cases?
Phil Simon (07:56):
Absolutely. If you had asked me seven or 10 years ago, I would've relied on one of my favorite quotes from the journalist Keith Overman, and speaking of American soccer, and make this point in the book, he says, it's the sport of the future, and it always will be. The implication is that we're never going to accept it the same way that they would in Europe or Latin America where what we call soccer, they call football is really popular. I mean, look, I've been, I'm 50 years old. I remember when the Stephen King book, the Lawnmower Man got made into a movie with Jeff Fahe, I think it was 1993, so 30 years ago, and it was about vr, oh, this is so cool, when will it get here? And we kept asking, when will it get here more directly? To answer your question, let me quote the immortal words of the sci-fi writer William Gibson.
(08:41)
The Future is here just isn't evenly distributed. In the book I describe how for training purposes, Accenture, which is very white collar, and Walmart, which is very blue collar in terms of jobs, have both embraced immersive technologies for training. Accenture effectively created its own. So when that comes to banking and in what form, I don't have a silver ball, but I included those two examples for a couple of reasons. One, I wanted to illustrate the array of companies that can benefit from this tech. Second, if you operate under the premises I did, that these forces are related and that dispersion remote and hybrid work are here to stay. Surely we can do better than just Zoom. We can simulate real life to some extent, maybe some of the time, not all the time in every possible scenario. But again, this is a book about trends when it comes to banking and in what form, I don't know, but I want to make in this book, senior leaders aware of trends that are coming. And if you understand that Walmart and Accenture, not some 10 person startup have already adopted these technologies and seen some real benefits, then maybe it's worth pursuing.
Penny Crosman (09:54):
Yeah, that makes a lot of sense. Another trend you wrote about in your book is automation, and that's something where we have seen banks take to robotics process automation and implemented in a lot of areas where there's a very perfunctory task to be done, but banks often don't want to talk about this because of the perception that robotic process automation kills jobs, which it pretty much does. Do you have a sense of which jobs will be replaced by R P A over the next few years? 5, 10, 5 to 10 years?
Phil Simon (10:34):
If I had to guess, I would say that blue collar workers are probably a little bit safer. I was watching an interview on C B S Sunday morning with Eric, and I always bastardize his last name. It's something like Bjornsen, but again, I, I'm sure I got it wrong. Anyway, smart Cookie used to teach at M I T and now he teaches at Stanford, and he made the point that in the future there'll be two types of lawyers, one lawyers that use AI and automation and people who used to be lawyers, and they don't use them anymore, so they're no longer. So these are powerful tools, but that doesn't mean a penny, that blue collar workers are safe. In a chapter four, which is the chapter on automation to which you're referring, I do mention the robot McDonald's in Fort Worth, Texas, there isn't a single employee there, and that's not because there's a striker, everyone's sick or the jammed shut.
(11:24)
It's because you place your order through an Apparat kiosk and a bunch of robots eventually spit out a quarter pounder with cheese or a Big Mac. So I have seen a lot of analyses from places like McKinsey that actually will, automation will and generative AI will impact some of the white collar jobs more than the blue collar ones. If you look at a lot of the hiring trends with respect to hospitality and the service industry they are really hurting for is another fun fact. I'm a BA data guy, as you know from reading the book and talking to me for a few minutes. I think there's something like a 500,000 worker, a construction worker shortage in this country. Now, are there automation tools that effectively build prefab houses? Yes, there Are they going to happen tomorrow or the next day and probably not, but in five to 10 years, is it inconceivable that your neighbor will buy a plot of land and they will just drop a home in that's already been preconfigured somewhere overseas in the United States with additive manufacturing?
(12:28)
Yeah, I think all those things are possible. So again, I don't have a silver ball, but a data analyst, I mean, if you look at a tool like chat, G P T, you can feed it a bunch of information and it can spit out a visualization Tableau, which is part of Salesforce now, but for My Money is the single best tool for visualization. And I wrote a book about Data Biz back in 2014 has added, they call it Einstein. It's effectively chat, G P t in there, power bi, which is a Microsoft tool that basically does the same thing as Tableau is also going to be integrating that. So rather than dragging and dropping with your mouse or writing code, you'll be able to say, tell me the top 10 customers in the Eastern region. So white collar workers historically have been pretty protected from some of this automation. I don't think that the same will be true with the automation and generative AI tools that I write about in the book over the next five to 10 years.
Penny Crosman (13:21):
All right. Well, I was going to ask you about generative AI as well, because I know that was something you talk about a bit in your book, and that's something where I would say banks are treading carefully. A few banks are experimenting with a enterprise form of generative ai, so not open AI's chat, G B T going out and screen scraping Reddit, but keeping something within their own servers that could read documents for instance, and pull out information that might help employees, that kind of thing. Where do you see generative AI having a place in the workforce in the near future, if it does?
Phil Simon (14:09):
Oh, it absolutely forget if it does. It already is. I mean, we're seeing about how sites like buzzfeed, I think their stock pop 15% when they laid off employees and said, we're going to use tools like Chat G P T to generate our own articles. CNET took some justifiable grief because it was essentially using these tools without fact checkers. And even though tools like Chat, G P T and Bard from Google are very impressive that they don't know what's right. Fun fact, when I was putting the final touches on the nine, my narrator said, Hey, is this sentence right? And grammatically it was correct and I had missed it and my editor had missed it, but the sentence said the opposite of what I wanted to say because I forgot the word not Well, something being grammatically correct and something being true are very different things, and will it make more employees more productive, perhaps?
(15:00)
But I'm fond of Solo's paradox. Basically going back to the arrival of the web in the mid nineties, we thought, oh, it's going to make everyone more productive. Well, the data is mixed at best. In some cases, as you can imagine, it made employees less productive because now they could waste time at work going on E S P N or being on social media. And then if you look at smartphones, it's the same thing. In fact, in some countries, productivity actually declined. So again, I don't have a silver ball, but companies are already using these things Now. The positive way to spin this, or I guess the Pollyanna-ish case, is that it's going to remove the drudgery. There's a great quote, I think I mentioned from the book, I forgot the name of it, but something like automation will make us more human because it'll take away the repetitive tasks that quite frankly suck.
(15:50)
So if you're a data analyst and you spend a lot of your time wrangling data and cleaning it up, well, that's not fun. There's not a lot of, I mean, it's important because if my financial advisor says, your return is 8% and it's really 18, I go, well, it's kind of a difference. It's going to infect my investment decisions. But yeah, it's already happening. I mean, copywriters and even apart from chat, G P T, some of the other Jenner of AI tools are pretty impressive. I just did a podcast earlier this morning and the guy interviewing me, I had mentioned how a friend of his was going for a position as a creative director, and his salary demands were something like $150,000. And when it came time to make a decision, the company punted and said, you know what? We'll just use mid journey to generate images and maybe some temps or things.
(16:36)
So yeah, these tools are already here and they're already having an impact on the workforce. I completely agree with you that it is a silly slash dangerous to just use a tool like OpenAI for everything, but there's no reason that a company can't create a large language model and point it internally as opposed to externally. One of the points that I make in my 2020 book reimagining collaboration, and I didn't know about a chat G P T at the time, but I effectively make the argument that if we use these internal collaboration hubs like Slack, zoom, Microsoft Teams, it's going to learn. So if I'm sending you a message and I'm typing 400 characters, it may stop me and go, you may want to stop because Penelope's never going to read something this long, and it probably makes sense to set up a meeting with her if you need to talk to her. So there are all sorts of impressive and sometimes scary implications for generative AI in the workplace.
Penny Crosman (17:32):
Well, yeah, and in your book, you talk about some of the dangers of generative AI and other forms of ai. For instance, the danger of deep fakes, and you gave the example of Johanna Stearns. In case people haven't seen, haven't read her story. Just tell us a little bit about what she did.
Phil Simon (17:53):
Yeah, that actually dropped, I want to say right when the book was coming out maybe a couple weeks later, but it proves my point. The tools now are so impressive that, and she's pretty tech savvy. I've, I've followed her videos and writings for years. I really like her stuff, but she's the first person to admit, she's not a programmer. She's not a deep techie, she's a journalist. But she was able to use tools that get more user-friendly every day and create a f fake, fake video of her that fooled her parents and with a voice fooled the bank. And when you think about some of the technologies that banks use to verify who you are, okay, they ask for your password. Well, sometimes that gets hacked. Well, they want two factor authentication. Well, with swapping hackers can sometimes simulate your phone. I was just watching an interview on YouTube with Robert Downey Jr, who's on 60 Minutes. He's down at South by Southwest, and he invested in a company called Aura that's trying to stop identity theft using ai. So if they can get to Robert Downey Jr or Jeff Bezos a few years ago with some interesting pictures, why couldn't they get to you or me? So again, to me, that's why a technology like blockchain is so essential. It's not going to stop deep fakes, but proving the providence of a photo or a video is going to be essential, not just in banking, but for society to not devolve into utter chaos.
Penny Crosman (19:13):
Yeah, that's a little scary.
Phil Simon (19:15):
It's very scary.
Penny Crosman (19:16):
All right, well, that's scary note. I think we will sign off. So thank you very much for joining us, Phil Simon, and to all of you, thank you for listening to the American Banker Podcast. I produced this episode with audio production by Kevin Parise. Special thanks this week to Phil Simon, author of the book, The Nine, the Tectonic Forces Reshaping The Workplace. Rate us, review us and subscribe to our content at www.americanbanker.com/subscribe. For American Banker, I'm Penny Crosman and thanks for listening.