What 12,000 technology decision makers taught one tech advisor

[00:00:00] I think the first fallacy here that business leaders and IT leaders need to ask themselves or need to think about is this idea that they’re the most unique business in the world, and no one’s ever had the same problem as them. Like, that’s really like tinkerer syndrome that IT people have, right? Are the two fallacies that are con- just consistently in the way of good decision-making on this topic.

[00:00:19] I’ll tie it back in a minute, but let me get to a second reason real quick. I think the other challenge that businesses have is believing that building is a one-time event because it just never is, right? There’s tech debt, there’s ongoing support, there’s uptime. All of these things are expensive. I have a tendency to consider it a hamster wheel.

[00:00:34] That’s the analogy that I’ll give to customers. When you get on, there is no getting… You can’t dismount, right? So when you put those two things together, I think businesses that are not themselves tech businesses should never start from a build idea.

[00:00:52] Welcome to In Other Words, the podcast from Phrase, where we speak with leaders shaping how global businesses grow, scale and operate. Today’s guest is Scott Kinka, Chief Strategy Officer of Bridgepointe Technologies and host of his own podcast, The Bridgecast. Scott is a 30-year technology veteran, former startup founder turned private equity exit, and the person responsible for the partner ecosystem that over something like 12,000 businesses rely on to make technology decisions. Impressive. He also started his career as a working musician, but much more on that later. So in this episode, we’ll examine and explore how technology choices shape global growth, why build versus buy decisions carry more long-term consequences than most leaders expect, and how partner ecosystems determine whether technology investments create value or just more complexity as businesses expand across markets. And finally, we will cover, because we have to in today’s world, how AI is re-shaping advisory relationships in this case. Scott, it’s great to have you on the show.

[00:01:56] I’m thrilled. Thanks for having me.

[00:01:58] Brilliant. Well, let’s get going. And Scott, you’ve been a founder, a CEO, Chief Strategy Officer, and a podcast host of a very successful podcast. But before all of that, you were a working musician. And so for listeners who don’t know your background, how did you get from that, you know, playing seven nights a week to running strategy for a large independent tech advisory firm?

[00:02:24] How I got started as a musician is it was the best college job you could possibly have. I mean, that’s really what it was. I was in high school, in a bar, underage, playing music, and some guy walked up and said, if you do everything I tell you to do, I can have you working all summer. And all I’m thinking about is how I was going to pay for college starting, you know, that September. So we just said yes and listened and followed instructions and did the things and ultimately got creative control back. But it was an interesting message in Surrender, you know, where follow, listen, learn. You know, we were a bunch of kids who had no idea what we were doing. And, you know, ultimately that became something that took me through college, took me through graduate school. I was still playing early in my career. It was never my intended path to be a full-time musician. But again, you know, my friends were flipping burgers and I was playing music and getting free beer. So it was awesome. But a lot of business lessons, you know, learned in that. And I’m sure we’ll get into those over the course of the, you know, over the course of the day today. But what really happened was that, you know, I studied marketing, actually, in college. It was, you know, in early, early, early 2000s. And, you know, how I landed here, frankly, is, you know, I was trying to market my band. I was working in a small advertising agency. It’s 2005. I’m like, these web pages sound like a cool thing. Let me go be the one person who knows how to build them in my firm. And then that became a consulting company, which became a stint working for a CLEC. As if you remember those days in the mid-2000s, nobody knew who was supposed to build their web page, whether it was their marketing company or their ISP. We built a big business up there. And, you know, that led into, over years, Evolve by P and dealing with, you know, everything that goes along with that. So just, you know, be open to saying yes, I think, at the end of the day. And that’s how I landed where I am now.

[00:04:17] Yeah, look, I think that’s fantastic career advice for anyone is to be open to saying yes. It’s funny. I remember those days where everyone was trying to learn Dreamweaver at one point when I was, you know, I was doing completely a different job. But we were trying to learn all the web tools on the side. It’s not unreflective of today’s market, but we’ll get to that a little bit later. So let’s delve into a little bit more about Evolve IP. And you took that for a kind of startup. Through something like 15 acquisitions into a private equity. What did that experience kind of teach you about the relationship between building the technology but also building an ecosystem that kind of sells and supports that technology?

[00:05:01] I had been working for a CLEC before that, that we, you know, I’m building new tech into a telco. And. You know, I was there during the dot bomb. Right. So 2000 bankruptcy, bring it out, fix it up, sell it to private equity. You know, leverage that experience to build a friends and family, you know, investment group, along with partners. I mean, I was a founding partner there. And we got the product stood up and we started sort of moving into it from there. And, you know, now we’re like, okay, awesome. We got through all that. Guess what it is? Now it’s 2008 when we’re raising money. So, you know, from one disaster into the next disaster. So, you know, the plan there was to grow faster and all the things that were happening, you know, in 2008, then obviously we were able to do. But we looked to alternative distribution originally just as a means to scale faster. Right, which is we could hire, we can train, we can try to get sales reps open and ready to go within 18 months. Maybe they do, maybe they don’t. So very early on, we just started looking at alternative methods of distribution. And by the time. You know, we sold that business to private equity in 2017. About 70% of the business, maybe between 70% and 70% of the business was coming through indirect distribution. And I can tell you what was, it was not a popular proposition with investors at first. You know, they’re like, well, you don’t control your own, you know, destiny and you’re waiting on others to help you get there. But I think what’s happened in the ensuing years is that organizations realize that the economics actually work. Right? The investment community has learned, you know, these multiple types of distribution have themselves become target for outside investment. You can go to the public filings of any of the big providers, you name them. Right. And they’re talking about, well, yeah, you know, next year we would love to cross the 50 percent mark in indirect distribution. Is it just a matter of scale? Is it expensive on a dollar of revenue? Yes. And of course, you’d have that there, but you’re also not losing a dollar because it’s purely success based at the end of the day. So I think, you know, over time, those economics have been accepted by the investment community. And it’s been really a way of changing the way people are buying technology at the end of the day. And frankly, a way for the technology side, having spent most of my career kind of in your seat. Right. It’s a way to scale fast. You just can’t get that kind of engagement without an ecosystem.

[00:07:33] Yeah. I mean, we’re not here to talk about necessarily phrase, but we definitely invest very heavily in ecosystem, making sure the technology is open enough to benefit to an ecosystem. But also that channel distribution is really, really important on, you know, constantly laying on those direct costs of having teams. I get the balance. The balance is interesting for every business, but I get that it can be a really, really effective channel. So let’s talk a little bit about Bridgepointe and you there. The business works with some of the biggest names in tech, you know, those 12,000 companies I mentioned earlier in the intro. We’re not really tied to sort of any of them, you know. So for businesses trying to get the most out of their tech ecosystem, why does that sort of independence layer kind of matter?

[00:08:22] I think. You know, and I may have, this may be a controversial opinion, but we might as well just get it out now. Let’s have some fun. I mean. You know, there’s we think that the way people have to buy technology is intrinsically broken, like period, full stop. At the end of the day, there’s too much information. There’s not enough time to evaluate it. Ideally, the C-level, the CIO, the IT director, even the, you know, has, it now has a seat next to the CEO. Post-COVID. It’s not a job they want to seed at this point, but they still have to keep the lights on. And that’s a lot of work. And we think that buying in that category is bad. If you think about it, you know, VARs are beholden largely to margin and to a capacity around the sub-platforms that they are entrenched in. You know, those they’ve certified, they’re carrying that. So they sell both services and an OEM product, which is great, but no business can know everything. So your engagement there is, yeah, I can show you a few things, right? If you go to the consulting firms, you know, that’s an hours, not outcomes cost model.

[00:09:35] Yeah.

[00:09:36] Right? And that’s really where the method that we go to market was formed in the U.S., and I know we’re going to talk international a little bit. And this is a model. I’ve got some experience trying to build into Europe. And people were like, I don’t really understand how this works. But, you know, in the advisory model in the U.S., we effectively have a portfolio of 300 plus suppliers, I say, from AT&T to Zoom. And that covers cloud, data center, you know, network infrastructure, you know, UCaaS, CCaaS, security, managed IT. You know, but still think of it largely on the plumbing side, not the application side.

[00:10:10] Yeah.

[00:10:12] You know, these providers pay us residually, frankly, and we don’t hide that fact because we also don’t charge for our time. Right. So the idea is, you know, it’s a model where the customer and the advisor, much like you see in insurance and you see in financial products, are beholden to each other. If you’re not satisfied with the supplier, I don’t get paid next month either. So it’s definitely a different model. It spawned out of kind of the divestiture of local and long distance to the baby bills in the U.S. It’s spawned and it’s since grown kind of into multiple categories. So, you know, that’s really where we have our success, right? We recommend products that we hope they stay in the journey on. If they’re unhappy, we help them solve what that is. It’s not a resale motion. The customer is ultimately signing an agreement with the end supplier. But if you’re not happy, you know, we don’t get paid for effort that we’ve already put in, you know, at the end of the day. So for us, it’s a model that. It’s accepted largely in the U.S. I think there’s a challenge, obviously, in that that’s a model that’s not as well-known internationally, but I think that it should be. And as platforms like Bridgepointe are growing in the U.S., it’s impinging, I would say, into other geographies and becoming an opportunity. As our customers in particular, we’ve gone significantly upmarket over the last handful of years, and there are Fortune 25 customers of ours who lean on us to make decisions for them. Will they have international? Technology decisions that they have to make. So very often we’re going to suppliers and saying, yes, this is how we’re going to educate on our model. Help them build an ecosystem if they want to do business with this large company in the U.S. Who’s choosing to transact this way. So very different. But in our world, that’s really where the independence kicks in and where it’s important.

[00:12:05] No, I love it. I think it’s very interesting. Let’s explore the sort of global connection in a minute, because I think it’s curious to me why that feels difficult. But let’s come back to that later. So, you know, when you think of ecosystems, you know, I know different executives tend to think of list of vendors or suppliers. Where do you see people getting it wrong? Because that feels like just a list of things that’s kind of not deeply strategic in terms of the way you think about it. So what do you think people like me or executives get wrong about the strategic value of their partner relationships?

[00:12:40] I think independence and focus are not mutually exclusive. Right. And what I mean by that is, you know, I made the point earlier, hey, a VAR needs to certify on two or three competing products and have their people be willing to deliver it because they’re reselling it ultimately. And sure, we have a broader reach than that. The counter argument to that would be, well, you’re not a specialist in any of them. And that’s a fair argument, right, that you can make. I think the key, though, is focus. So, of course, we have those. Whom we are certified to implement. We have those with whom we have better economic terms. We have those with whom we have, frankly, more success in the field. But if I gave you the whole cadre of suppliers in a particular category and I pointed to who was more successful than not, you’d probably come up with the same list that I would, not sitting in my seat, right? Because it’s really more of an indication of how successful they are competitively, frankly, in the market, right, as you go there. The flip side to what we have to focus on, and this is something that I caution our teams about all the time. I’m constantly saying, listen, when you are in the deal, you are not being paid to back the truck up. If you’ll take the euphemism, right? We’re not backing up to the front door, opening up the truck and saying, I have it all. What do you want? Come hop in with me. You need to be purposeful in your approach. And honestly, it’s something that I can agree, frankly, on the deal killer coming my way. You know, the objection handler for our emotion. You know, yes, we struggle with that every day. How do you make sure that you maintain independence, but also know specialism that you, are providing value to the client. You know, not saying, hey, I’ve got three quotes. Which one are you, you know, what are you actually recommending for us? Because again, we have to stay in the journey. And I think though that the recurring portion of the way that we’re compensated is a way for us to ensure to the customer that we are making the right recommendation at the end of the day.

[00:14:37] That’s it, because you’re basically thinking about outcomes and you’re on the hook. You know, you’re on the hook for a future. So it’s a good way of balancing out that focus versus, you know, independence. So let’s talk about your customer base a little bit with the, you know, IT leaders predominantly, I would imagine. You know, you’ve said before, I’ve listened to some of the things you’ve talked about in your podcast and with the interviews you’ve done. IT leaders need to kind of decide whether they’re plumbers or general contractors. Can you just go into that kind of distinction? And what does that mean for how organizations structure, particularly their technology partnerships?

[00:15:16] First off, let me explain the topic because I get this one comes up a lot. And I file that away in the controversial statement category, right? It’s working, apparently. Thank you for noticing it. I mean, I think, listen, the history of being somebody who’s worn that hat for a lot of my career, right? The history of IT is that, you know, at first it was the job of keeping the lights on and it reported to the CFO and the COO. And there wasn’t value being derived from that function, seen as a cost portion of the business, right? And that’s what I mean by plumber, right? Focused on infrastructure, network, security, you know, empowering underlying technologies to some other business that other some other function that the business supplies or supports for their end customers. I think that role has changed. I sort of mentioned that, you know, my feelings around the post-COVID opportunity, which is, you know, IT has been brought forward in many cases to have the opportunity to be the general contractor. And I think that decision makers need to decide which one they want to be. And by the way, that’s okay. You know, you may be in a business where… You know, maybe you can’t really be driving value to the bottom line. I don’t, you know, maybe a business where, you know, IT is truly just keeping the lights on. But most of your customers, and I’ll get to the ecosystem portion of this, kind of the advice for here. Most of your customers don’t really want to see that new seat they got in the boardroom. And they’ve proven value post-COVID. Right. So the plumbing becomes just that. Right. That’s the part where you outsource. The GC comes up with the plan. The GC builds the documentation. The GC decides how the house is going to look. And in this case, what the business is going to how the business is going to use their, you know, their IT functions, assets and investments to grow the business. And then. That general contractor outsources the plumbing because it is just that. It’s got to work and it has to be there and you want to turn the faucet on and it needs to be there when it’s there. But ultimately, that’s the place to bring in partner ecosystems.

[00:17:18] Yeah.

[00:17:18] Right. So, you know, the advice I think to anybody that’s trying to figure that out is figure out who your ICP is.

[00:17:26] Yeah.

[00:17:26] Right. And this will get into your buy versus build, I’m sure, too. Right. Which is, is your customer the… Person who’s still sitting in the boardroom CIO. Or the person who’s keeping the lights on. And both still exist and both have a significant place in all of our IT distribution. No question. But I think it’s understanding because the way they’ll buy and the things that they’ll want to accomplish, whether you’re the person selling something to them or you are that person, is going to depend on whether they’re a general contractor or a plumber.

[00:17:57] Interesting. I mean, interesting. But so if we back up a little bit to one thing that really caught my attention when we were talking about, you know, clients being global brands operating, you know, you engage with them primarily in North America, but they operate across all those multiple countries and the languages and the customer expectations and the cultures that that involves. As those businesses, if we get into it a little bit, as those businesses expanded to new markets, you said it’s been tricky to kind of work on the same system in those other markets. Let’s dive into that. How do you make sure that partner ecosystem is helping rather than sort of that old way of thinking or a different way of thinking, let’s not call it old, is getting in the way?

[00:18:41] Yeah, it’s tough. I mean, you know, the default agreement that we have, right, with our suppliers is for a regional distribution, you know, and it’s usually, you know, North America or the Western Hemisphere, right, at the end of the day. And that’s partly because of… Regulatory and cultural issues and how they recognize revenue between countries, right? How the divisional structure of a service provider or a customer is structured, how they can buy, whether the bill’s paid in the U.S. Or whether the bill’s paid in the country where the assets actually sit. So these are the things you’ve got to consider at the front end of how you’re, if you’re the buyer, if you’re the IT person, how you’re transacting across borders at the end of the day. And much of it is, you know, it’s currency billing, it’s regulatory, it’s things of that nature. And that also, by the way, the thing to think about it is if you have those complexities as an IT buyer. The supplier with whom you are trying to do a global implementation has the exact same challenges, right? So the first part is I think, you know, what I would ask of the IT decision makers is a little bit of empathy there, right? In that the provider who’s telling you they’re global is contending with the same issues, right? So that’s the first piece. I think the second piece is, you know, I think we have a tendency to sitting now from my seat, working with very large U.S.-based organizations who have infrastructure in other parts of the world. Now you’ve got a challenge I mentioned earlier about kind of our feelings around how we think IT purchasing is, you know, maybe intrinsically broken. The people who are working with us are enjoying our model, right? And they want to be able to use that model, or at least they’ve structured their IT operation to leverage our model. Now you go someplace else where the supplier, the local environment, the currency, the culture, whatever, won’t support that methodology, you know, same kind of thing. So we do find ourselves very often. I mean, I was recently running on a global data center project. So we do quite a bit of what I would consider to be real estate work. It’s very hard right now if you are a, you know, if you are a Fortune 25, you know, 50, 100, to buy data center space because you’re competing with the hyperscalers first and the AI companies second, right? And in fact, some of them, including some of the AI companies, use us for this because they’re trying to take down large swaths of power and physical space at the same time. But if you’re a company who needs, you know, six select markets across the world, this isn’t a matter of picking the right price. This is a matter of finding a parcel large enough with enough power in the place that you want to be that hasn’t already been bought. Yeah. Frankly, by an AI company or a hyperscaler. So we do quite a bit of that work, but then we get to the supplier and they’re like, this is awesome. I now have an opportunity with insert, you know, iconic U.S. brand name here.

[00:21:38] Yeah, yeah, yeah, yeah.

[00:21:39] And they’re like, well, what are we going to do to do that? They’re like, well, you know, this is how we transact. We’re not going to charge you anything upfront. We don’t resell you. You will contract directly with them. You know, our effort is being paid for by the suppliers effectively. You know, like, well, we don’t have a model for that. And we end up having to get into education on that. But the client is now all of a sudden not going to go, well, I didn’t pay for help in the U.S.. I’m not paying for help in Brazil. You know, sure. You know, we can do a whole different model there. No, they’ve chosen a way and they’ve architected the way they spend around the specific way to go to market. So that’s really where our challenge is, is a little bit of education and sort of pushing this model out, you know, into other regions. But I think we’ve really just kind of gotten to ubiquitous acceptance across almost all technology categories in the U.S., after 20-some odd years. So I think that’s coming.

[00:22:30] Yeah, well, look, I think that’s opportunity, right? That’s what you want. You want opportunity because you’ve built up the business. Opportunity, global opportunity is where you’re at. Brilliant. Okay, so let’s take a little pause. We always have this mid-show moment where we ask our guests, you know, what we call the inbox confession. So we ask you, Scott, and what is the one task, professional or personal, that you wish you could automate?

[00:22:58] You already said it in the intro, which is my inbox, which is an absolute disaster. We’re on, you know, we’re Microsoft internally shop. And. You know, the promise of Co-pilot is not exactly yet there, if we’re all being honest with ourselves. And, you know, due to compliance. Reasons, we don’t allow sort of third party clean up my inbox type thing. So I have my important inbox and my not important inbox, and neither of them are important because I want to answer all of my emails, you know, so my My personal AI assistant, whom I’ve named Jarvis, and my wife says is my unhealthy best friend, and my, you know, my in-work co-pilot are used. Very frequently, I’m burning tokens like a madman, but I have yet to figure out how to use either of them to make my, you know, eliminate the one and a half hours in the morning I have blocked out to try to catch up on email. Haven’t gotten there yet.

[00:24:02] No, no, but keep going because I think there is a much better chance of solving that these days, right?

[00:24:08] We’re going to get there, I’m sure.

[00:24:09] Yeah, yeah, yeah. Okay. And I think that has changed since I started asking that question. There’s much more people using the tools that are available now to clean up things like inboxes or calendars or all that, which is really interesting shift. And that’s not long, you know, that’s in a year. So imagine what it’d be like. And exactly. Okay, right. Well, let’s get back to it. And I know we promised to talk about the build versus buy kind of a dilemma, I’ll call it, but it’s not necessarily a dilemma. It’s just a choice. And you advise, you know, those thousands or so businesses on technology decisions. You know, there’s no secret AI has made it feel easier than ever to kind of feel like you can build things, everything internally. And it strikes me that lots of successful businesses are kind of building upon a platform rather than just saying we’re going to build everything ourselves. But that’s my perspective. From what you’re seeing, where does, you know… Firstly, that approach, we can just build it ourselves, fall into trouble, because that’s not a new, it’s resurfaced, but it’s not a new concept, right? If anyone who’s been working in tech for a few years.

[00:25:16] It’s an age-old return. Jason, it’s the same question. I mean, I think the first fallacy here that business leaders and IT leaders need to ask themselves or need to think about is this idea that they’re the most unique business in the world and no one’s ever had the same problem as them. Like that, that’s really the, you know, that and like tinkerer syndrome that IT people have, right, are the two fallacies that are just consistently in a way of good decision making on this topic. I think that, and I’ll tie it back in a minute, but let me get to a second reason real quick. I think the other challenge that businesses have is believing that building is a one-time event. Because it just never is, right? There’s tech debt, there’s ongoing support, there’s uptime, all of these things are expensive. I have a tendency to consider it a hamster wheel. That’s the analogy that I’ll give to customers. When you get on, there is no getting, you can’t dismount. Right. So when you put those two things together, I think. You know, I think businesses that are not themselves tech businesses. Should never start from a build idea. I mean, if you have to land there because maybe you did find out you were the most unique business in the world or, you know, there literally was no place to go get the thing that you want to get. Sure, you may land there, but I think don’t start there would be my word of advice. Start from the idea of, can I commercially buy this? Number one, yes, I can, but it’s not close enough. Okay, second, can I customize or build upon something that I can commercially buy? Yes, great, go there. No, I can’t. Okay, am I starting from scratch? But the advice there on scratch is you really need to have an understanding of your ongoing expenses. You know, treating it like, treating build like a project will only end in, you know, frustration between the CIO or our director of IT and the CFO, frankly, because the costs never come off the board.

[00:27:20] Yeah, that TCO, total cost of ownership is the thing you need to be thinking about at the beginning, right? So let’s flip that. And sort of talk about, okay, I’ve bought a platform. And another kind of thing that I hear a lot from business leaders is, we bought a big platform, but we struggle to use it all. So what are the things that the people that do it differently or actually build on it? What are they doing that’s different?

[00:27:48] Before I answer that, I want to hit you with something that we say a lot when we’re talking to customers. And my guys always say, like, we’ve got these kinkisms we use. This is one of them. Every tool that does everything doesn’t do anything particularly well.

[00:28:05] Very good, very good.

[00:28:07] And the reason that I bring that up at this point is because I want to answer the question that way, which is the ones that do it well. Understand what they’re hoping to get out of it. Right. So it’s really a use case development strategy. I would, I’d posit the idea that if the reason you bought the software was just to use 25% of it, then the outcome is just fine. Because you had the costs, it was built in there to solve the 25%, right? So that would be one. I think the second thing is. That I want to mention here is This is a responsibility of both IT and the business. Right. If we get back to that plumber analogy that we used earlier, right? I bought the CRM. I stood it up. I made sure you could log in. I uploaded all the data to get the legacy data in there. And when, by the way, when you can’t log in, call me back. Like that’s the plumber methodology on that. The general contractor methodology on that would be that there is an ongoing relationship between the line of business and IT on their use of the application. We could say the same thing isn’t about how people are thinking about AI. Right. Like we’ve got these board level edicts like we had on cloud 10 years ago, like go get some because if we have some AI, we’re worth more. Our investors will be happy or our bankers will make sure we’re doing the right thing. And then we go we’re going to we’re going to I.T. With that. I.T. Doesn’t have the business problems. The business has the business problems. So it’s it’s so the ones that are successful are the ones who are starting from a use case perspective and have a an ongoing, not a one time getting back to the build once. Right. An ongoing relationship with the business on the use of the platforms.

[00:29:51] Yeah, I love that because it’s it might start with one, two, maybe three use cases. But the real platform joy, as opposed to being this, solving every single problem that anyone could ever possibly think of is that you can actually grow. You know, if you’re taking it from an enterprise application level, there are other applications of it around the business that you might do. So from an IT perspective, the platform does have a lot of answers. But the other the other factor is that you do want to build on top of it. So whatever you have as the plumbing or whatever else is, think about how you build on top of it. So let’s go back into that build versus buy and tie the two thoughts that we’ve been talking about together a bit. So you’ve got the build versus buy, you know, you’ve also got this global nature, which you’ve talked about. You know, how do we take this kind of philosophy to it? So when you’re serving customers in your business or your customers are serving their customers across different languages, different markets, how does the build versus buy conversation evolve, change? How does it go? How does it how is it received globally, given that the you know what we talked about before? And have you got any examples? Second part of the question of anyone who’s kind of got that bit right in your experience?

[00:31:01] You know, it’s I think one of the things that. You know, I mean, having had experience where, you know, I was operating a U.S.-focused technology business and then, acquired international assets to grow the brand, right? And then in the same way, experience that with customers who are a U.S. Business with international assets, an EU business with some assets here in the United States, and the folks in the United States are coming to us. The best practice kind of answer behind all this, or at least say the warning I would give, is that very often it’s we have an IT strategy for the core. And a customer focused, a customer focused strategy for the core. And then the other assets are a fend for themselves or the other assets are, well, you know, that’s the redheaded stepchild. So if they get 80% of what we have in the core of the business, then that’s okay. And I would say like that is 100% that spells disaster at the end of the day, both in customer relationships and in employee satisfaction at the end of the day. So if you’re in either one of those spots, you know, EU business looking to get some assets in the U.S. Or vice versa as you’re expanding, start from a perspective of can we support this business the exact same way, maintain the exact same customer standards in the other market? If the answer is no, I’d advise not doing it. You’ll never get the same return as whatever brilliance you came up with in your underwriting, right? When you were thinking about building that or buying some business or what have you. An example would be a global brand headquartered in the U.S. In media, entertainment, et cetera. I’ll leave it at that as I’m unable to talk about their name legally. But they have a stance that basically the, you know, the way they answer a customer interaction is going to be the same wherever they are and in whatever language they choose to communicate. So what I’ve seen happen. Is these, you know, kind of quick, we’re going to enter market because AI will help us. Put an agent in place to be able to answer phone calls or to handle chat or something along those lines. And every one of these kinds of customer experience environments always fails out to a human. Right. So don’t take a phone call in… You know, Arabic and fail to an English speaking agent at the end of the day. And this was an organization that coupled a technology. You know, product. To a BPO strategy that we helped them with. And they didn’t have to staff every language full time. They didn’t have to, you know, we enabled them a process to fail, you know, to basically have failed to fractional agents in a series of languages that we were able to set up in a way. So yeah, that seems very people centric at the end of an AI project, but they didn’t want to end the AI project. With a, okay, you know, we’re going to fail out to sending an email because they don’t do that in the United States. And I think it’s really important to think about it that what’s the holistic customer and or employee experience.

[00:34:30] I think that’s right. And we see it as well is that one of the ideas that lots of businesses we talk to is that you’ve got to try and design global at the beginning and before doing things. Design for the global. If you’re a global business, design for it at the beginning when you’re thinking, I don’t know, from a marketing campaign point of view or an IT selection point of view from your sort of side of the fence. But, okay, well, let’s sort of move a little bit of the conversation on to sort of AI because, you know, we’re both usually contractually obliged to mention AI and everything we talk about at the moment. So, you know, you’ve talked, I thought it was a really interesting thing that you did with G2’s Tim Saunders around this idea of a butter analogy. The idea is that AI isn’t a silver bullet with just one use case, but it’s something that kind of spreads across or enriches every workflow. But where are you sort of seeing? Today, AI deliver the most, I like to think about it, measurable value for global businesses rather than just saying value, which is kind of amorphous, but measurable. Where are you seeing it from your side of things?

[00:35:38] Yeah, it’s such a, it’s a… Complicated topic within a lot of ways, an easy answer, right? Because the, um, I think everybody’s running out and doing it. Let me take one step back and just say, like, if when we meet with a customer, we have sort of have a context that we run through around AI. Like we want to do, we’re going to go do some AI. Like, okay, if that’s where we are, we’re going to start from scratch. You know, number one, what’s the plan from a corporate perspective? And I don’t mean what to do. I mean. How does business feel about AI? How does it feel about, you know, equity? How does it feel about bias? How does it feel about hallucinations? What business risk are we willing to take? If we adopt it, what does the business hope to accomplish kind of culturally? Over some period of time. And then that ultimately leads to a governance statement that the business agrees on. All right. So now we know what we can start thinking about. The second thing is, we always advise to move to literacy first. You have Copilot, decide you want to turn it on. If you want to support ChatGPT, okay, because your employees are doing it on their own. And by the way, don’t slap them on the wrist. That’s not the way to do this because the people who are experimenting are experimenting on use cases that you don’t know about, right, in their job. And that is ultimately then, that’s why I was stepping you through, is the answer to the question, right? Which is if you do the good diligence work of saying this is our plan, here’s how the company thinks about AI. And then you go, we’re going to figure out some way to support experimentation. And that can be super formal or super informal provided you’ve got policy around it. And then you’ve got to suck out of those users who are trying to solve the needling small problems in the business, the opportunity to find what I would say to you, find a boring. Right? Single data set easy to solve problem that you can build agent and process around because the literacy portion is hard to get an ROI on. Right. You can just say, hey, all of our employees are more productive. Well, the CFO only cares if that means there’s more revenue or less employees, neither of which is likely to happen. Right at the end of that, you’re just going to expect more. So, yeah, you can say this widget, this thing took me this less amount of time. Again, I have a balance sheet. It’s not showing up there. There’s not something there. But you still need the literacy across the business to surface the 40, 50, 100, small, boring, single data set things you can automate from an agent perspective. And that’s really where we’re seeing, you know, high value coming out of it. They’re not complicated things. It’s almost like you’re using the AI carrot to find the things you can go solve.

[00:38:23] Yeah, it’s interesting, isn’t it? So you’ve got almost the rising tide. You’ve got to get that rising tide because you will get, it’s almost like you have to philosophically accept that you will get productivity gains like you’ve never had before, but it’s going to be difficult to measure. But you also need those kind of things at the bottom going, yeah, okay, well, here’s some things that we can measure and we can prove value. So that means that we keep doubling down on how we’re going to do this. I love it. I love it. I love that idea of risk and governance because that’s always a thing that I think comes up, right?

[00:38:52] No, totally. And before you move on, I’ll give you an analogy. I was just speaking at an event in Dallas yesterday, actually, where we had a roundtable discussion about this with CIO leaders. And we were going through this entire conversation and they were arriving at this like, yeah, you’re right. Like right now, AI is a cost center, until it produces ROI. And I said, think back. I said, do you feel like your cost per employee is more or less now than it was pre-COVID? And they’re like, less. I’m like. Okay, fine, because not everybody’s at home and you have less office space and you have all those things. But there was a period of time at which you had three communication solutions, an entire network in the office that you weren’t using. It costs you more to get to the transformation where we are today, which is, you know, largely settled around some kind of variance of hybrid work. Right. So you need to think about AI the exact same way. Your costs will increase for a period of time to get at eventually. Demonstrable ROI, but you don’t have, you know, the other choice is not an acceptable one.

[00:39:57] Yeah, no, I love it. I love it. I love it. I think that’s good. I think one of the other things that you sort of see, and it’s that experimentation versus kind of chaos idea, is how do you avoid or in your, you know. Experience, how do you avoid the fragmented AI tools and where every supplier brings, you know, all of their different models and none of them talk to each other. Some of them are embedded in the platforms. You know, you’ve got one in marketing, you’ve got one in sales, you’ve got one in CS. How do leaders avoid that fragmentation? But also, I guess, to be pertinent to your previous point is, but you’ve got to allow for a bit of experimentation. It’s like, it’s a paradox almost.

[00:40:40] It’s totally a balance. If you get back to that framework we were talking about earlier, there’s some great data from Infotech, who is a kind of a niche or a research firm you’re probably familiar with. They’re our research partner. And they do a CIO survey every year. And in this last year’s one, there was some data that basically said 70% of CIOs prefer. AI features that are embedded in their existing SaaS platforms. So we’re always like, let’s start with a turn on what you got rather than go by. And maybe they’re even less powerful platforms. We could easily make that argument. You know, we all know that at the end of the day, Copilot is chat GPT with the handcuffs on it, right? From a model perspective. But at least it’s a way to get started. And at least there you know that is domiciled in with the data. On which it’s going to be interacting. Like that’s a simple first step as you go. But then yes, you know. Finance wants to use Claude because it’s super great at spreadsheets. And then, you know, over here, we have this data lake that we want to build, et cetera. So I would say start there, evaluate your wins in the platforms that you already have. But I think one thing that people are. Definitely there are different AI tools that are better at different jobs. Recommendation one is, you know, don’t let groups go off and do it outside of the paywall. Always the paid version. And then really think about orchestration. I think one thing that people have a tendency to get concerned about where maybe they shouldn’t be, where, you know, if you’ve ever tried to build some kind of agent in any AI. Agents across AIs are pretty friendly. I mean, AI does a really good job of talking to AI. That’s one thing to consider. The second thing is really, you know, we’re starting to see are these platforms emerge that really act like orchestrators, right? So you, that it sits in the middle. They buy tokens on all of the models. It’s still a per seat price. But IT now has the ability to say, over here, I’m orchestrating the data sources that you are allowed to inspect. And over here, I’m giving you access to tokens and multiple models to do some things in really a single conversational UI. And that’s a way to kind of keep it inside the walls. Because if all you’re doing is interacting with the same data set. With guardrails, then hopefully you can control some of that craziness. But make no bones about it. Your AI will be an AI of AIs. You know, over time. And that will be something that IT will, you know, be responsible for contending with.

[00:43:18] And it’s definitely still shaping up, isn’t it? I think that’s the interesting part, the exciting bit, right? So let’s get sort of towards the end now, I guess. But you talk about this idea of noise, and you close every episode of the bridge cast with the line. There’s a lot more noise out there in business and in life. Do what you can to be the signal, I think. So after all those episodes and conversations you’ve had with people in enterprise tech, what’s the most important signal you’ve picked up? That most leaders are kind of missing at the moment, do you think?

[00:43:53] It’s funny, I just used this on a call today, and I hadn’t pulled it out in a long time. The gentleman that I was with was somebody that I had worked with in a previous life and just started cracking up as soon as I said it because he’s like, you’ve been saying that for a long time. Don’t suck on your own carbon dioxide. And what I mean by that, if you’re on the tech side… Don’t be so enamored with your product that you forgot why you started building it in the first place, right? If you’re in IT, don’t be so excited about the mousetrap that you built. That you know it works for your end users. And again, the euphemism is just don’t sit there and breathe in the air that you just breathed out. You need to understand who your customers are, whether you’re an internal IT department or whether you’re creating technology at the end of the day. But that’s generally the thing that’s missing. We get off, shot off with a great premise, and then somehow five steps down the line, we forgot why we were doing it in the first place. So that would be the main thing, I think I would say.

[00:45:01] No, I think that’s brilliant. So let’s look at, you know, thinking about operations, global operations. Where do you think the biggest opportunity is right now for businesses that are willing to rethink that way that they operate globally?

[00:45:15] Yeah, I mean, I think we may have already gotten to it. I think, part of it is really around consistency. I think you need to look for any area where you’ve, where you’ve. Accepted some lower level of service or some lower level of automation or what have you, because it was hard. You know what I mean? And then say to yourself, You know, A, can I solve that? And if it’s unsolvable, does this market or this offer or this thing really make sense to the bottom line of the business? I mean, I look at sometimes international expansion in the 90s and the early 2000s in the same way I look at Internet and in cloud. Right, where like we did, I think a lot of businesses did it because it was the first time that the world got small enough that they could.

[00:46:08] Yeah, yeah.

[00:46:09] But they didn’t necessarily ask themselves whether they should. Right? It became the thing that investors got enamored with. And, you know, we’ll go do Internet. Then we’ll go do cloud. Then we’ll go do international. Now we’re going to go do AI. Like there needs to be a good business reason for it at the end of the day. And if an Internet, you know, so. I hope it’s like I’m answering your question like, hey, how do we standardize international? I’m saying don’t do it. That’s not what I mean. But I think the place to go is to really look at don’t accept good enough.

[00:46:39] Yeah, yeah.

[00:46:40] As it relates to standards across international operations.

[00:46:44] Yeah, I think it’s now doing it substandard is a disadvantage, a competitive disadvantage. You can do it well. You can do it well. Just look at it- And if you can’t do it well, then there’s a fundamental reason to not be in that market. As I say, if I’m paraphrasing. Yeah. So we’re on the quickfire last homestretch. And I was going to ask you about global growth in one word, but I think I’ve got the word. And you tell me if I’m wrong. This is a different way of doing it. Consistency, I think you would, you would say global growth in one word is consistency. Right? I have been listening. Don’t worry. And then so just two more. Build, buy, partner. Which strategy wins most often?

[00:47:23] Oh, wow. I would say I would say partner and customize where appropriate.

[00:47:30] Kids love it And what’s the biggest lesson you’ve learned in your career?

[00:47:34] You know, I might have spilled the popcorn earlier by saying be someone who says yes. But I’ll give you a slightly different one because I promised you a couple of lessons from being a musician earlier. So I’ll end that way, which is the business lesson I took from that experience is that everyone’s the decision maker. And what I mean by that is, you know, my first manager, when he was like, when he was in the do everything I say category, we’re a bunch of kids, you know, just do what we say, I’ll keep you working. And he was very prescriptive about, you know, what to do with the staff when you walk in and knowing everybody’s names and writing them all down and making sure that you interact with the first five people in the bar, not the last 500, because they’ll anchor, you know, interaction. It was very much along the lines of that everyone’s a decision maker. And I think that that ties to most of what we talked about, you know, the consistency statement you just made, you know, that, that office, that service, those people in that country, they are also a decision maker. So I think I think that’s probably it. Just make sure that in every interaction that you have, it’s consistent and you recognize that it might be this large, but that person has influence over your success in that account or your success with that supplier.

[00:48:50] I think that’s valuable advice to end today’s session on. Scott, I just want to say a big thank you to you for coming today. What a fascinating, interesting conversation. And I wish you very well with that global expansion. You’re already dominating North America, but let’s see if you do better elsewhere. Fingers crossed.

[00:49:08] Super excited. Thank you for the opportunity. And, you know, looking forward to having a conversation again.

[00:49:12] It’s a pleasure. Thanks again.

[00:49:14] Thank you.

[00:49:14] Scott, thanks again for a brilliant conversation. You’ve shared a massively clear and compelling view of how technology success depends on the strength of the ecosystem behind it, really, and why, as businesses scale globally, getting those decisions right matter more than ever. And that’s it for another episode of In Other Words, a podcast from Phrase. I’ve been your host, Jason Hemingway, and a big thanks again to Scott Kinka for joining us today. If this episode made you think about what your technology ecosystem needs to look like as your business expands into new markets, we’d love to continue that conversation. Head to phrase.com to find out more. And for more conversations on leadership growth and what it takes to scale globally, subscribe to In Other Words on Spotify, Apple Podcasts or your favorite podcast platform. Thanks for listening and I’ll see you next time.