Techonomy CEO on the Impact of Technology on Business and Society

In a world of fake news, where automation is threatening jobs, Josh Kampel remains a techno-optimist. In this episode, the CEO of Techonomy Media shares his views on how organizations can get more value out of technological innovations and disruptions by taking time to understand deeply what they stand for as a company, and what value they provide to their customers and the world at large. Because legacy technological baggage isn’t the only thing keeping big organizations from reaping the benefits of new tech: “It’s [also] culture, people, it’s real estate, it’s infrastructure…”

Kampel shares his views on the successes, struggles, failures and opportunities that companies face today and compare them to what other companies have experienced in the past. Kampel insists that CEOs cannot be the only ones leading the charge to transform organizations: the board needs to get involved, as well as the people who work in the organization and are the living breathing representations of that company’s culture.

Accenture | SolutionsIQ’s Global Managing Director of Innovation Max Furmanov hosts.

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MAX FURMANOV: Hello, and welcome to another edition of Agile Amped. I’m your host, Max Furmanov, and today my guest is Josh Kampel. Josh is actually the CEO of Techonomy Media. That is a company focused on exploring the impact of technology on business and society. He is a serial entrepreneur with experience in financial services, digital marketing, entertainment media, and in today’s world of fake news and where automation is threatening jobs, Josh remains a techno optimist and believes that technology will accelerate social and economic progress. So again, thanks for joining us. And now, onto our conversation. Josh, thanks for much for taking time with me to record today’s session, and welcome to the show.

JOSH KAMPEL: Thanks Max, thanks for having me.

MAX FURMANOV: Yeah. Great to have you. So let me maybe start by asking you to tell us a little about Techonomy and when and why you started it. Just give me some sense of what you’ve been doing there.

JOSH KAMPEL: Right. So Techonomy, we started about eight years ago. When we looked at the media landscape, we saw a lot of media companies focusing internally on technology, really the speeds and feeds. And then we saw other events and media focused on these bigger economic and societal shifts. But there really wasn’t anyone that was convening conversations for business leaders to help them understand how technology was transforming their business, their workforce, their industry sort of at large. So we thought Techonomy would be a great platform to do that. And as someone who has sort of been on, I’ll say, the wrong side and the right side of tech transformation, I just was really excited about this idea.

MAX FURMANOV: Very cool, very cool. And of course, we at Accenture and SolutionsIQ have had a relationship with you guys for a number of years. And it’s very, very important because we’re driving some of this change with our clients. So it’s very synergistic for us to have this conversation with you guys, and I know that we’ve been at a number of your events and have participated in a number of things you do. So let me kind of ask you this. If you look today at our clients, which I think you’re also talking about, the C suite executives that are interested in this change or are going through this change, these organizations, these large complex businesses, they’re facing tremendous challenges. And I mentioned some of this already earlier today. We have fake news, people are concerned about, automation threatening jobs. There is technology disruption that’s happening. The competitive landscape for a lot of our clients, for a lot of large complex companies is changing. Obviously the political and economic uncertainty. And of course, we all as customers are increasingly changing our expectations much more quickly. And we see our clients struggle with this. We see them struggle to adapt, so kind of be at the speed they need to be to change, and to transform quickly. What are you hearing from CEOs that you speak with? What are some of the challenges they’re telling you about?

JOSH KAMPEL: Yeah. So it’s interesting. Again, we look over the last sort of we’ll say the eight years that we started Techonomy. And eight years ago, they were coming to us trying to figure out cloud, social, mobile, and big data. And fast forward eight years, and those trends are still highly relevant. But those have enabled things like artificial intelligence and automation. Everyone wants to talk about blockchain, everyone wants to talk about the internet of things. So these things have sort of multiplied, and they’re looking at their business not only, again, where they before were able to let their CTO take the tech strategy, but they need to understand it. I think one of the most fascinating things is at one point people started talking about data security is now a board room conversation. Well, we’re starting to see technology as a whole as a board room conversation, because it’s really at that core of transforming these people’s businesses. And at the end of the day, no CEO wants their company to be a case study like Kodak or Circuit City or Blockbuster. They’ve seen those companies not move and adapt as fast as they needed to, and they don’t want to be at the helm on sort of bringing those companies down. So they’re really just right now trying to figure out how they compete sort of in this new world of these new digitally native companies coming up.

MAX FURMANOV: So interesting, right? I mean, we’re actually … I completely agree with you, and we’re totally seeing the same thing, this conversation around innovative technologies, emerging technologies being elevated to the C suite. And not even just to the C suite, but to the board as you said. But when you talk about companies like the Facebooks of the world. The Amazons of the world, they are digital natives. They are new to this game. They don’t have the baggage that a Ford or a General Motors or some of these historic companies that have been around for decades might have from a technology standpoint. And what are you seeing from these historic companies? How are they dealing with the technology that’s slowing them down, the stuff that they have had for decades? And how is that affecting their ability to be Agile and they’re ability to start to adapt in this environment, and to bring some of these technologies like blockchain, like AI to market in the context of their, what we call technology debt?

JOSH KAMPEL: If you really look at it, this legacy baggage you talk about is not just on the technology. So technology is a core piece of that, but it’s culture, it’s people, it’s real estate, it’s infrastructure. So the interesting thing is, these CEOs are struggling when they look at it from a legacy standpoint with just the operating model that they’ve created through acquiring other companies. So obviously yes, technology is a big part of that, but making that big cultural shift in their workforce, in their business model is hard. We look at it from a standpoint of … Especially if you’re a public company. You mentioned Ford, and Ford’s a company we’ve worked with over the years. When you’re a company that has been known for decades of selling a vehicle and you realize that the world is shifting towards this idea of mobility and you need to now figure out how you supplement selling cars with mobility services for people who don’t buy cars, that sounds great. But, to your point, it takes a huge investment into technology and new people in teams who historically just thought about building better vehicles.

So how do they do that, and how do they communicate that to the market, that they’re going to make these big investments that aren’t going to pay out as short term? They don’t get the leeway that a Tesla gets. So Ford is struggling with, “How do we continue to evolve our business model? How do we get into the mobility space as you look at Uber and Lyft and Lime and scooters and multimodal transportation?” How does Ford share in that development of that ecosystem while maintaining their core business, and again, meeting shareholder expectations so when the CEO comes in, he says, “Okay, our stock price is X, and when I left it was at least hopefully up.”? So I think the CEOs are struggling with that. And you do look at companies like, if it is Michael Dell taking Dell private again so that you don’t feel the pressure of the analysts. When Elon Musk joked about taking Tesla private because he was just fed up with people not seeing the vision and wanting to sort of reward him for the vision. So a lot of these transformations for these legacy companies sort of will take investment that the street and revenues may not see the benefit of short term. And that’s hard.

But I think the other challenge is, we always talk about start ups and digitally native companies as like they’re the be all end all. We don’t talk about the stories of them failing. While they can get into a market quick and build on top of AWS and build quick proof of concepts and move quickly, they don’t have that experience, that know how of building huge teams and scaling the business. So you use Facebook as an example. I think Facebook is … You look at the problems Facebook is going through. They built amazing products, but because the teams were so young, they didn’t realize, they didn’t think about the bigger societal consequences of building the most amazing ad serving and ad targeting technologies. So they’re great technologists building great products at Facebook, but kind of losing sight of why they existed as a company, and sort of those unintended consequences.

MAX FURMANOV: Yeah. And not to mention that the road to Facebook is kind of littered with failures. Your point is Facebook is even struggling with some of these kind of responsibilities that it has and scale that it’s reached, but the road is also littered with others that we never even heard of that probably have failed along the way.

JOSH KAMPEL: Yeah. I mean obviously Friendster and all these social networks that could have had the greatest technology. And I think, again, as people in the technology world, we always speak about technology as the thing that will differentiate companies or will make companies succeed. But we kind of forget that some of it’s luck, some of it’s market fit, some of it’s the sales and marketing arm of the company. So yes, the technology could be the best that it is, but there’s still a whole lot that has to align for the company to be as hugely successful as some of these big IPOs we’re seeing in this last couple months.

MAX FURMANOV: Yeah. Actually, I want to go back and dig into that a little bit, because you said earlier when you talked about some of these big historic companies, you said that one of the challenges that they have to get through is having a longer term view, not looking at the next quarter but looking at the next year or two, five years. “What are my investments? What am I doing?” So that totally makes sense. You also said that this is a big change. It is about culture, it is about talent, it is about operating models, it is about organization, it is about technology. But it’s not just about technology. It’s about all of these things together. So this is complex. If you look at some of these large companies, like we keep talking about Ford, but any one of these large, whether it’s a bank or insurance companies or technology companies that are historic. Do they get this? Do they get the level of change it requires? Can they do this, do you think? And do they have kind of the right motivation in place and the right set up in place to go and drive some of this change?

JOSH KAMPEL: Yeah. Obviously there’s two parts to that question. One, your first part of the question is, “Do they understand it? Do they see it?” I think of course they do. I think that it would be hard to imagine a CEO or a company right now in any industry, be it financial services, healthcare, that doesn’t see these new enter ins to the market that are really putting the pressure on them. So obviously, “How do they react,” is, to your point, sort of that key question. And I think we’re seeing all these different new innovation models. Everything from open innovation models, working with external ecosystems, investing in startups, traditional M&A, strategic partnerships, acqui-hire, because again, a lot of the internal culture isn’t used to that rapid pace of change. So I think the companies see it. They know they need to do something. I do think they, again, are paralyzed a bit because certain industries, and again I mention financial services and healthcare, historically have always thought the barriers of data privacy and security and all of that positioned them as the incumbents, where it was harder for start ups to get into.

As we see those going away, they’re trying to definitely figure it out. So you look at companies like PayPal. So Dan Schulman moving over from American Express, a traditional financial services provider, to now being CEO of PayPal. I know the PayPal market cap exceeds, or for a period of time exceeded that of Amex. So I think they see it. I think they’re again, they’re trying to figure out, and I think technologists internally are trying to figure out, their role as, “What is the internal infrastructure changes that need to be made?” Because a lot of these companies grew through acquisition, and there’s these legacy systems that really aren’t fully integrated, that don’t speak to each other in a manner that, again, if you’re building it from scratch, do. On the other side, they’re trying to figure out from an external innovation and the products and services that they’re building, what do they need to be doing? And I think one of the interesting things is, when you look organizationally, you now have all of these titles from chief technology officer, chief innovation officer, chief digital officer. Chief innovation versus information officer, what’s the difference?

MAX FURMANOV: Chief transformation officer.

JOSH KAMPEL: Chief transformation officer, right? So these people are creating these roles. Some of them are business based roles. Some of them are technology based roles. The hard part is, again, how do you think about what each of them are doing differently? And then, in big companies, you see within the operating units, within the business units, that innovation is happening as well. So how does that bubble up to the top? Should that be pushed down broadly into the organization? So companies know it, they’re trying to move, but I think they’re actually creating these complex structures and assigning these tasks to so many people that harnessing all that sort of innovation is becoming more difficult as well.

MAX FURMANOV: So Josh, it sounds like a lot stands in these companies’ way. We talked about organizational structure, which you just kind of went through on all these different levels that are being created. We talked about technology and legacy kind of technology and technical debt. We talked about operating model. We talked about expectations of the street. So this is a lot. What else have we not caught? What else stands in the way that we haven’t talked about yet?

JOSH KAMPEL: Well, I think at the end of they day it’s really coming back to business executives realizing and thinking about why they exist as a company. And I think that in this world of innovation and technology-

MAX FURMANOV: “What is my mission?”

JOSH KAMPEL: And their mission, right, exactly, is, “Why do we exist as a company? What is the value we can provide to our customers?” and I’ll say the world more broadly. And I think they need to really settle on that first before we run into, “Hey, we’re going to do something in blockchain, because again, everyone’s telling us we need to.” Or, “We’re going to create an internet of things platform and collect data before we know even what we’re going to do with that data.” So I think that companies are so fast to sort of understand that they need to do something, but not really sit back and understand why they exist as a company. I think the other thing is, the executives have to start thinking about … As startups, and I’ve run a couple startups, you talk about this word pivot, and you talk about changing your business model. And I think big legacy companies, it’s very hard for them to even think about this idea that they need to pivot, or they need to sell us some of their traditional businesses because they’re low margin and they’re just really not contributing towards growth.

There’s a lot of good examples recently. I think there was an announcement two weeks ago that BlackBerry finally killed BlackBerry messenger.

MAX FURMANOV: I did see that, yeah.

JOSH KAMPEL: And it’s interesting, because BlackBerry is a perfect sort of case study of a company that’s at the top of the market. 2008, stock hit I think a price of about $140, and then they started having network outages and problems with their devices. And again, that’s what they were known for. The highest stability and security of their network and their devices. Fast forward, John Chen has to step in, he came from Sybase in 2013, and really look at the business and say, “What is our business?” And he quickly said, “We’re not going to be a device business anymore. We’re going to stop manufacturing devices. It’s now low margin, and we’re going to sell it off.” He really doubled down on this idea of, “We’re a software provider, we’re a technology provider. We’re going to double down on building this infrastructure to support IOT software.” But those are hard decisions. And as a new CEO coming in, you can sometimes make those radical changes. Sell off some commodity business. But it’s hard to sort of make those big leaps.

You look at … Max, you and I had talked about over lunch this idea of, “What are the companies that have successfully made these big changes?” And the one I keep coming back to is Netflix. Netflix has made a double pivot. They started out as a logistics business. So if you can imagine the technology they had to build around shipping and logistics and all of that, and that was their first tech stack. And then they said, “Okay.” Luckily they saw the writing on the wall and said, “No. We need to become a streaming platform.” I’ll say fortunately or unfortunately they built on top of AWS, so obviously Prime Video may have benefited from some of the data. But they knew they had to transform into a streaming business. And I don’t know the inner workings of Netflix, but that required a completely, I’m assuming, different skill set, different stack to build that up. And then from there, they said, “Okay, great. Now technology is a streaming media business. That’s a commodity. We need to be a content producer.” So now they’ve really evolved their business. And I think making those types of really hard decisions and making those investments …

Reed Hastings, being a founder, probably has more leeway and more passion about making those hard decisions, it’s his legacy, than a gun for hire CEO that comes in, knows they’re only going to be there for three to five years, all they care about it their stock price when they join the company and their stock price when they left. So you do have visionary leaders like a Marc Benioff at Salesforce or a Reed Hastings, people who, this is their legacy, not only just sort of a cash cow.

MAX FURMANOV: By the way, Josh, did you know that you could still get movies on Netflix shipped to you? I didn’t even know this. I found out last night. It’s totally true. We were trying to watch a movie that wasn’t available on streaming, and they said, “Would you like us to ship you a DVD?” I was kind of surprised they still do that. But yeah, you’re absolutely right. They started out as a completely different company.

JOSH KAMPEL: And that’s an amazing thing. I mean, number one, you think about the reason they can’t stream that movie is a whole nother program, because of antiquated licensing agreements with the movie studios. So that’s a completely different-

MAX FURMANOV: Yeah. My favorite is when you go the Amazon app and try to rent a movie, they say you can’t rent it on this app, but if you go to the browser, you can rent it there and then you can watch it on the app. So obviously all of this is getting around some of these licensing issues and challenges that have not adapted to the new world.

JOSH KAMPEL: Yeah. It’s funny you bring up that, because I actually realized last night, I booted up my smart TV, and there’s a Blockbuster app. Not that I even know what that Blockbuster app does or why anyone would care about it, but again, as I mentioned earlier, no one wants to be known as the Blockbuster of their industry or the Kodak of their industry that had most of the market share in that business, did not see the writing on the wall, was not willing to invest in technology. And again, if they would have looked back at their core, “What are we as a business?” and at that case, they were an entertainment distributor, and how the market was going to change on how consumers sort of consumed media, they would have figured it out and they would have invested in technology. But I just think they got so caught up in their own model of, “No, this is what we do. People love on a Friday night to come to a Blockbuster store and see the movies on a wall and take it off and bring it home. There’s something about that experience.” Sometimes we have to give up on those sacred cows and say for the business’ sake, “Where do we need to be investing?”

MAX FURMANOV: We almost kind of have to continuously look at our business and understand what is our business mission and apply that to what we’re doing, and think through what changes need to be made. And you talked about all these cool technologies like blockchain, AI, IOT. We often just sort of employ these technologies because we can. We see companies going around and doing proofs of concepts and prototypes not because it solves a business problem, or creates a new opportunity for the business, but because they can play around with it. And sometimes, that leads down an interesting path. I was actually … Two years ago or a year and a half ago we built a new house. And of course, being the geek that I am, I connected the whole house. And so I have connected lights and connected music and connected everything in the house. And I was very proud showing my wife how I can open up my phone and log into it and find the lights app and turn on the light in my house by pointing to a button inside the app. And my wife patiently looked through me doing that, and then she said, “Yeah, sure, that’s easier than flicking a light switch on the wall.”

JOSH KAMPEL: Right, no, we let the technology drive this, and I think we’re all so quick and so close to technology that we love the cool stuff. But I think we want to talk about, “How do these products and services seamlessly integrate into our daily lives as a sort of human being first and foremost, then as just a average consumer, and then as a business?” If we’re creating more friction, to her point, it actually takes you longer. But I love … Introduce voice interface into that ecosystem, and wow, now it starts to make sense. So the voice piece of what you just explained, to me was the missing link. Before it was open an app and figure it out and fumble around and finally get to the light switch or the Sonos button and launch the music. Once we enter voice into that, which is such…

MAX FURMANOV: Could I just say, “Hey, Siri.”

JOSH KAMPEL: Right. So I think again, we get so caught up that technology can solve every problem, which, again, as in the intro you said I’m a techno optimist, I do believe technology will solve most of our problems. But again, I think we get so far out ahead of pushing the technology before the use case that we need to sit back. The technology part, again, I think, is probably getting easier and easier. There’s a lot of great … You use AWS. AWS has only been around, what? Commercially available for a little over 10 years, a decade? But it’s so much quicker and easier for a new tech start up to get up and running with all the out of box solutions that are available. But the ones that I get pitched on all the time are ones that you’re just like … that they’re a technology looking for a market versus vice versa.

MAX FURMANOV: Yeah, yeah. Totally agree, totally agree. So Josh, not to lead the witness here, but we talked a lot about kind of essentially, what are the elements of this large complex transformation for organizations to become more Agile, to be more adaptive, to be more flexible. And we talked about technology, we talked about operating model, we talked about organizational structure, talent, and culture, and all of these things. This change is hard, and I guess when you look at the organizations today, the average longevity of a C suite executive, CEO, CIO, CDO, whatever these roles are, is increasingly becoming smaller and smaller, or it’s decreasing in duration. We’re almost running out of time here so maybe the last question for you is, are these organizations going to be able to adapt fast enough within the duration of these executives to make this change real and to make this happen?

JOSH KAMPEL: Yeah. And the funny thing is, it’s not only a market problem with corporations. I was just down in the White House not too long ago talking around government and transformation of these systems. They’re even worse. They have a predictable cycle that three years into a new presidency, nothing new starts because they have to figure out what the next election looks like. So they’re even in a worse case where they can really do nothing that has a long term vision. I think with companies and organizations, what’s going to have to happen is these initiatives are, number one, going to have to find their way into the organization and the culture more deeply integrated than just the CEO. Because to your point, the CEO is going to be here and gone unless they’re a founder and they’re in it for the long haul. So I think when we go back to the people and the culture, then people and the culture inside the organization really need to believe that they need to be challenging themselves and always transforming, not just think of themselves as cogs in the wheel to operate an existing business model.

I think, secondly, it does need to come from the top down. And the top, at this case, meaning the board. So if we think the CEO is not going to be there for the long term or has the wrong metrics in mind, the board’s going to have to believe it, and boards are going to have to be structured to really understand how technology is changing the organization in their industry deeper down inside the culture everyone and not just the technology organization. Because the technology organization within a company is always going to believe they need to move faster. But it’s getting the buy in from the product groups, from the services groups, to really buy into this idea. So I think it will take, for these transformations to happen, we’ll have to start seeing it through and through that the organization from the board down through the product and services groups believe in this, and it can’t only sit with the CEO.

MAX FURMANOV: Yes. Absolutely. I love it. So big complex change. But Josh, ever the optimist, I know you fundamentally believe that we’re going to get there. All these organizations are going to transform and technology’s going to continue to drive a better way of life and work for all of us. So thanks, Josh, for joining me today. I really appreciate your time. This has been a great conversation, and I look forward to continuing at your Techonomy in New York City event here in a few weeks.

JOSH KAMPEL: Great. Thanks, Max.

MAX FURMANOV: And thanks again to all of our listeners for listening to this edition of Agile Amped. If you’ve learned something new today, please tell a friend, a coworker, or a client about this podcast, and subscribe to hear more inspiring conversations.