AI Is Getting Good, But Still Can’t Replace Human Curiosity

Adi, thank you so much for having me.

ADI IGNATIUS:

A lot of the work you do is advising companies that are going digital. I imagine practically every company describes itself at this point as digital, but you have a more sophisticated lens on this. What is the biggest blind spot for companies that are on this transformation?

TIGER TYAGARAJAN:

Adi, it’s a great question, because we are clearly seeing every company think through what digital transformation means. Now, the first thing I’ll say is we’ve got to distinguish what one could call digitization, which is automating processes, making it straight-through touchless, no human touches it, as compared to digital transformation, which is really running the entire business differently, having people take decisions differently, leveraging technology and tools and the cloud and AI and machine learning, dramatically improving user experience, customer experience, all of those things. Parsing those two would be important. And when it comes to digital transformation, one of the big learnings we’ve had is that it’s not just about technology. It’s about processes, it’s about the data underlying those processes, it’s about people. Because in the end, you really want to have people change the way they work, and that’s when you really achieve digital transformation. If you ask me for the single biggest roadblock, it’s how you drive change through an organization. And by the way, the more successful an organization, the more that challenge increases, as you can imagine.

ADI IGNATIUS:

You are saying one of the keys to digital transformation is how we’re interacting with our colleagues. What do you mean by that exactly?

TIGER TYAGARAJAN:

Let’s take a couple of examples. Think about a bank that lends to small businesses. Something that’s very important for the economy, something that a lot of banks do, and the application comes in, typically someone in an operations function puts all the data that is available in the application onto the system. And then, the system then ends up taking the application to a risk officer whose job it is to evaluate that application and take a decision. Now, the reality is that you have a human who is prone to making errors, who has biases, often doing that underwriting. You change that to a completely transformed way of running lending operations and approval of a loan. You could think about the application coming in, getting read by a machine, getting photo’d onto the technology.

The technology then uses past data and patterns to say, “Here’s the kind of prediction that I have about this customer.” Payments, what the customer likes, the interest rate that works, should you approve or not, etc. And then finally, the risk officer takes a look at it, and then takes a final decision. You can drop cycle time for approving a loan from 20 days to minutes and hours. And the impact that has on the customer, the delight of the customer, the fact that it actually drives economic value for the customer and therefore for everyone, is really what digital transformation is about in that one example.

And you can apply the same example to supply chain where a retailer places an order for milk or chocolates or cheese, and that has to be processed. Now, all of that can be done again by the machine, including getting the truck, getting the right truck, having the best route, driving low carbon footprint, not just lower cost. Those are the kind of things that people are really beginning to do in order to change the way business runs.

ADI IGNATIUS:

If you’re talking about machines, machine learning, machine response, we’ve got to talk about open AI, we’ve got to talk about ChatGPT. We did the show last week from Davos, the World Economic Forum in Switzerland. And I probably had more conversations about ChatGPT than about any other topic. Everybody’s playing with it. I’m sure you’re playing with it, experimenting with it. I’d love your thoughts on what this is going to do to business? What is this going to do to jobs? I’m amazed by the technology. I’m also aware of its limitations at this point, but I think it’s going to get better quickly. What are some of your early thoughts about ChatGPT and what it says about the future of AI?

TIGER TYAGARAJAN:

I think it’s obviously very, very topical. I’ve had a couple of hundred of my team spend a couple of days kicking off the year, just the last couple of days, and ChatGPT has been one of the central themes that people kept bringing up.

I’ll start by saying ChatGPT is one more step in the evolution and the sophistication of AI and AI technologies. Not that unexpected. This progression has been expected and will continue to make progress. And the view that we’ve always had, I’ve always had, is that it’ll change the way work gets done. I’ve had a clear view that it does not replace labor. It changes the way that labor will get used, it changes the skills that are needed, etc. I almost correlate this to the invention and the building and the spread of calculators or Excel spreadsheets. Go back to the time when we didn’t have calculators. It was important for people to know how to add, subtract, multiply, divide, and those were tests conducted before you hired someone into a particular job. You don’t do that these days, because everyone uses a computer, everyone uses Excel, everyone uses a calculator. So, it becomes a common platform that everyone uses.

Now, the question is, “What can you do with it? How do you use it? How do you create value?” So our view is that ChatGPT is going to open up a whole new avenue for value creation. I heard someone talk about an example just in the last few days where a developer has been able to use ChatGPT in order to pull government documents and serve it easily to someone deep inside a village in India in order to have the farmer take a better decision on getting government subsidy or ordering seeds or fertilizers. So I think the vision that I’ve always had about AI is that it’s going to make the cost of so many things lower, that it’s going to increase the spread of education, healthcare, all of those things where sometimes the barrier for a couple of billion people in the world is that the cost of those things is very high, and the spread is very difficult. So, a very optimal view on this.

ADI IGNATIUS:

Those are very positive use cases. At the very least, we’re talking about a short-term dislocation. Seeing the ability of ChatGPT to write code that’s effective quickly makes you wonder about code. Same thing as the people who used to sit around adding and subtracting being replaced by machines. Our code is going to be replaced by machines. By the way, our editors are going to be replaced by machines. I could see the need for an editor or two to make sure the machine is coming up with good content. But aren’t we talking about far fewer individuals needed to collaborate with the machines as they get better and faster? And I just wonder what all this white collar labor is going to do.

TIGER TYAGARAJAN:

So the answer is yes. We will probably need far fewer X, Y, and Z, all the kind of people you described. But we’ll need a whole set of new people that we didn’t need before. One of the things that I believe is going to happen, and this is a journey that actually has been on for some time, is that the importance of soft skills in everything in the world is just going to keep rising. The importance of building relationships, empathy, delighting the customer, really understanding the needs of the customer by actually listening. Then, the curiosity that a human being brings, I don’t think, yet, AI has been programmed to actually become curious. In fact, AI has been programmed for the reverse, which is, what has the pattern told us so far, and therefore what moves should we make? Whereas curiosity actually says, that’s the move I probably should make, but I want to explore something that I haven’t done before. I want to go north, even though the machine says go south. Only a human can do that.

We are big believers in augmented intelligence rather than artificial intelligence. And transition always has pain. Every technology transition has had pain. Re-skilling, therefore takes on a whole new meaning. It’s been going on for some years now in the world, and I think it just takes on a whole new meaning as these technologies become more pervasive, ubiquitous, and usable.

ADI IGNATIUS:

So one thing ChatGPT is very bad at is humor. I keep trying to get it to write decent jokes and they’re always terrible. They’re just basic puns. If you say that’s not funny, that’s just a basic pun, it’ll say, alright, and try another attempt and try another. But I think the joke writers are safe, at least for another few years. But on the reskilling question, this isn’t the first technology that has prompted a conversation like this. I have people tell me sometimes, “We have good intentions. We’re not very good at reskilling.” That whether it’s on national levels or corporate levels, we talk a good game. We’re not very good at reskilling. Give me your thoughts on where we are and what we need to do because we’re talking about large numbers of people for various reasons who need reskilling to succeed going forward.

TIGER TYAGARAJAN:

That has been a problem in the world for some time now. You’re right. And the bad news is I think we still have a long way to go, both in terms of the impact, and therefore, a response in terms of reskilling. The good news, the glass half full, the optimist view, and I’m an optimist, is that over the last five years, corporations, businesses such as ours, have taken significant steps to re-skill their workforce. And the reason to do that is actually very simple, because if you find a way to do that, it becomes a competitive advantage. You actually excite your employees. You actually make them valuable for your clients and your customers. As they learn these technologies and use them, it requires a whole new set of motivation, incentives, time allocation.

It requires an understanding that I’ve always had, which is: I don’t think any more that life is about 20 years of education followed by 40 years of work followed by, let’s say, another 40 years of retired life. It’s actually continuous, every couple of years, refreshing, re-skilling, even maybe taking time off to do that a couple of months. And I think businesses must have programs that do that, platforms that allow re-skilling to happen have become so much easier to use, so much better.

And it’s not about big classroom training programs, it’s bite size, video-based, gamified. We’ve done that across the company. In the last 18 months, we’ve had 70,000 out of our 110,000 global workforce enroll themselves and learn data analytics at the base level, using our program that we call Data Bridge. And it’s caught on like wildfire because everyone needs to learn, wants to learn. And of course, we’ve been driving it.

Now, governments, educational institutions, they all also have to approach this, but I sometimes think that at least in the Western economies and the more democratic and capitalist economies, corporations such as ours have to take the lead.

ADI IGNATIUS:

I want to bring in a question from our audience that’s on topic. This is a good, provocative question from Chander in Zurich. “How could generative AI like ChatGPT, potentially disrupt the business model for a firm like Genpact?”

TIGER TYAGARAJAN:

Oh, a lot. A lot. And when I’m responding to that question, I interpret the word “disrupt” in a positive and a problem sense, a threat and an opportunity. Left to its own devices, the work that we do will change. And if we don’t do anything about it, then, of course, we are going to get disrupted. But the smart people, businesses like ours and other businesses like ours will actually say, therefore, I’m going to find a way to use that technology. If you think about, at the core, often the work we do is take information from one source, take another information from another source, often from within the company, our client’s company, and then take information sometimes from the outside world. It could be the weather report. It could be what’s happening with interest rates. And then bring all that together, apply mathematical and algorithmic models to then take a decision that then gets put back into the system. At its core, a lot of the work we do, a lot of the work that knowledge workers do is that, and then there are people who build those models, code those models, etc.

You could have a ChatGPT generative AI kind of thing to actually do some of that. Having said that, it could also write the report that comes out of that that says, this is the decision that I took and here’s the rationale for the decision. All of that, you could actually have that ChatGPT generative AI do it. However, I would argue that you still sometimes need a lot of information from the customer and it’s not been provided. So you’ve got to call the customer up, explain to them what they need to provide, and they then need to provide it. Two, you need a human to say, “This is a gray zone. I don’t think this is the right decision. I’m actually going to increase the risk in my portfolio, and therefore, I’m going to actually take a decision, yes, even though the credit score here right now says no.” So every aspect of the work that knowledge workers do will change. I don’t think there’s any denying that.

There are going to be firms that are going to grab that disruption and be the disruptor, and there are going to be others who will get disrupted. So the question is, who’s more agile? Who’s more nimble? Who has the culture to embrace new things? Who has the culture to reskill? That’s going to differentiate the winners from the losers in every industry, in our industry as well.

ADI IGNATIUS:

Here’s a question from Autumn, from Indianapolis, who’s asking, “How do you see AI implementation into education specifically to prepare students with these skills needed for the future?” In other words, to what extent will AI be part of this retooling, re-skilling effort?

TIGER TYAGARAJAN:

Phenomenal question. And, often when technologies start maturing and start disrupting, the answer and solution often is the technology itself. If you take the case of AI and you say it’s going to disrupt jobs, however, that same technology is going to create jobs. Education is a great example of that.

As I said, pick a number, a billion and a half people in the world do not have access to education of the kind that actually they should have. Partly driven by time, the asynchronous nature of their education being required, the creative back and forth that often only a teacher can do. And that’s very difficult in places like deep into the interiors of Africa, India, Latin America, and so on. And all of a sudden, on digital platforms with AI sitting behind the scenes as an engine and understanding the person who needs to get educated, so that the right material gets served in 10-minute, 15-minute bite-size, consumable, video, gamified, and dropping that cost down to literally cents versus tens of dollars will change the game.

You suddenly bring a billion and a half people into the education workforce, the pie for education will expand, the cost will reduce, and therefore, more course content will be needed. More people will be needed to make it gamified. I mean, I can talk about a whole set of new industries that’ll get created just on that one question.

ADI IGNATIUS:

Are you bullish on the metaverse at this point?

TIGER TYAGARAJAN:

Long term? Yes. And I want to explain bullishness. I’m bullish that it will become a thing that will become part of the way people live their lives, work gets done, business gets transacted, etc. I worry a little bit about what it does to human and social interaction. Will it further drag humans into the virtual world at the expense of time being spent in the real world with real people, with nature? I mean, we can go on and on. Over a 100-year period, I guess in an accelerated fashion, that’s been happening. And I do worry about that, because I think there is real value created in the world when people come together and debate with each other, fight with each other a little bit in a constructive way. I worry a little bit that all of the joy of that gets taken away. I also worry about what it does to mental health and so on and so forth. So, still a long way to go, bullish in what it will do and can do, and not so bullish in the impact it actually has, and how you balance that, like all technologies.

ADI IGNATIUS:

I want to shift a little bit, and I know that in your consulting work you think a lot about ESG. And you know ESG is problematic. At least in the US, the right thinks ESG considerations are too woke, and that companies should just think about generating profits, and that everything else will take care of itself. On the left, there’s a feeling that ESG, as we measure it, is insufficient. I almost think we need to throw out ESG, come up with a new term and a new approach, but anyway, we’re in the ESG era still. What is a valuable way of looking at and thinking about ESG at this point?

TIGER TYAGARAJAN:

It’s a great question, Adi, and I will start by saying maybe the word, and the phrase, and the acronym should be thrown out. It doesn’t matter. What really matters, in our thinking and in my thinking, is business is about being sustainable in the long run and serving four stakeholders. I think that is incredibly clear for us, because those four stakeholders—our clients, our talent, our investors and shareholders, and the community and society—all four are equal stakeholders, and the reason they’re equal is because they fade into each other.

Obviously, you’ve got to satisfy your shareholders, you’ve got to satisfy your clients. That’s an obvious virtuous cycle. Talent is at the middle of all of that, and that talent makes a difference to both investors and to clients. And none of that is possible if you can’t do two things. You need to attract talent and excite them, and I would argue, until anyone comes here saying, “Our strategy is to attract talent, and in order to attract talent, we must be able to explain how we are helping our planet sustain itself in the long run.” Because everything shows us that it can’t. And if we don’t have a role there, I may not be able to attract talent. I may not be able to serve my clients.

So, it’s very clear to us that we can call it by whatever name. Our strategy of long-term sustainable value creation for the four stakeholders requires us to focus on things like the environment, the climate, on society, on diversity, on inclusion, so that we can get the best minds to attack problems, and of course good governance. So, you know, I’m not conflicted on the word ESG. It doesn’t matter, because it’s core to our strategy. The problem is when you keep it separate, and you say, “I have an objective that I need to serve these four stakeholders, or three stakeholders, and I have this other thing called ESG, which I need to satisfy some people.” We don’t think about it that way. We think ESG is core and central to the long-term strategy of companies.

ADI IGNATIUS:

I think that was the rhetoric, at least, of a lot of CEOs of big public companies for the past several years. I mean, we’ve had a great run for the past several years. We’re in tougher times right now. You know, there may or may not be recessionary threats in certain parts of the world. You’re having conversations with people out there. Aas times get tough, we’re certainly seeing the layoffs, particularly in tech and finance, media, although not limited to those industries. Everything you just listed, sustainability, diversity and inclusion, all these things: when times get tough, and tough decisions have to be made about where the money goes, do you worry that the emphasis that’s been put in these areas could fall to the side?

TIGER TYAGARAJAN:

Adi, you’re right. And that’s no different than many other strategic imperatives that an enterprise and a business undertakes. And when there is short-term pressure on serving, let’s say, investors, and shareholders, you then have to evaluate those long-term strategic imperatives, and the investment, and the time, and effort, and the money that goes against it. I think great companies find a way to navigate through such tough times, in a way where they try and protect some of those strategic imperatives, because they know that just as the world could be slowing down and there’s a recession, it’s going to come out of it. When it comes out of it, the winners are going to be those who invested in those strategic imperatives through a cycle like this.

I think business research has shown, so often, that in times like these, the winners and losers, there’s a shift in the tables, and those who tend to win tend to be the people who didn’t take their eye off the long-term ball and found a way, through other means, including digitization, and digital transformation, and applying technologies, to preserve some of the longer-term investments they are doing, because that allows them to take off when the economy takes off. We will come under pressure. I think finding a way to navigate that without killing it is a very important goal of great companies for the long haul.

ADI IGNATIUS:

Tiger, one of the reasons we do this show is that we feel this is kind of a reset moment for business, for how we think about business. And part of that is what the pandemic has done, how it turned everything upside down, and what we’ve learned from that experience. Part of it is new technology, and there are other factors as well. You’re a company of roughly 100,000 employees. To what extent are you the same company, with the same culture, now that you were in 2019, before the pandemic and before some of these shifts, and to what extent have you changed?

TIGER TYAGARAJAN:

I’ll start it with a meta-answer, saying our belief is that there are core parts of our culture that we always try and preserve: our maniacal focus on our client, or the way our teams collaborate with only one objective, which is solve the client problem, the way we drive curiosity and learning in the company.

At the same time, we’ve always been a big believer that culture is not statistics. You’ve got to find new things to incorporate into that culture, because that’s what the world requires, and if there’s one thing that the pandemic has taught us, and all this digital transformation has taught us, it’s the exponential curve on change. And I actually believe that change is here to stay. The pace of this change in the world on a variety of topics is here to stay.

What that means is that it’s therefore important for businesses such as ours—and we’ve changed, and we continue to change—to become much more agile. And you have to do that now, in an environment where it’s actually different. It’s no longer everyone who comes to the office every day, in every location in the world. We operate from 35 countries, 120 sites across the globe. Our business, of course, has a set of people who are often constantly traveling and consulting with clients, but also a set of other people who sit in operating centers. That world has changed. It’s no longer 100% in office. It’s a mixture. It’s hybrid. It’s two days a week, three days a week, five days a week in some cases, five days a month in some cases, and a week in a quarter in other cases. So it’s a lot of variation.

And in that variation, how do you preserve culture? As new people come into the company, how do you mentor them, sponsor them? How do they learn? What is apprenticeship? All of those are undergoing change as we speak. One example I’ll give you: we spent three days here, a group of 200 of us, and normally we would have spent one day to kick off the year. We deliberately spent three days, physically all together. Why? Because we don’t do this as often as before, run into each other in an office, etc., so we decided we’re going to invest in three full days. And then people will go off, do their thing for probably another four or five months, and then bring them back together.

So rhythms are changing. Communication is at an extreme high. The pace of that change requires us to communicate continuously. Obviously, things like video conferencing, and Zoom, and the ease with which that can be done has raised the game and our ability to do that, but now our job is to leverage those things.

So, lots of changes as we speak. It’s very important in the way we deal with our clients as well. Clients have become very comfortable doing video conference calls and Zoom calls. However, I think there’s still a requirement where you make that social connect. You break bread. You share experiences. You have a debate on a very contentious topic, and you come out of that and say, “I trust you.” The world that we are in and the world in the future requires even more trust. That requires real humans connect, to continue. And that’s part of the culture we’ve got to find a way to keep maintaining. More difficult than before, but more tools available than before.

ADI IGNATIUS:

You talk with ease about change, about embracing change. Not everyone does. I’m going to raise a question that’s come in from Veronica in Prague. “Why do so many companies resist change?”

TIGER TYAGARAJAN:

It’s the ultimate question in business. At the core of digital transformation, it’s actually about change and driving change. Humans are humans. If something has worked and it’s worked for a long time and it’s been successful, there is no reason to change, and who are you to tell me to change? So first is, why do I need to change, and who are you to tell me to change? And then understanding each person’s motivations, making the collective motivation the same rather than two motivations that pull against each other. That, I think, will always be the central topic of society, irrespective of generative AI or not. And if anything, it’ll probably increase in importance, as more and more of those technologies can be leveraged, but only if change is embraced.

It’s scary to embrace change. I don’t know if I’m going to be successful in this new way of working, even though in theory and on paper it looks like the right thing to do. I don’t know if I’m going to win or my colleague is going to win. Lots of things like that. I’m biased. I don’t like the person who’s telling me because I don’t trust that person. All of those things come in the way of change. Our business actually exists, to some extent, because our job is to help our clients drive change.

ADI IGNATIUS:

Here’s another question. This is from Manu in Delhi, about emotional intelligence. “How can an organization successfully create awareness on emotional intelligence as it seems necessary for how we collaborate and grow these days?”

TIGER TYAGARAJAN:

Agreed. Again, a great question. And I’ll start with storytelling. I think good old storytelling is still the best way. Use examples. And the storyteller should be the protagonist. So it’s about the person. It’s me telling my story. It has to be a humble, exposing, vulnerable story. Then you have an audience that is listening. The stories must come from diverse people so that the listener then says, “This is not a one-side kind of story.” And then making heroes of those who demonstrate that in a client situation, in a team situation, in a peer group situation. And showing that when they do that, not only do they become heroes, but they actually create value for the stakeholders I talked about.

I think this is, again, not something that you take lightly, not something that you can teach in a class. You’ve got to live it every day. It has to become part of culture. And one of the best definitions I heard about culture—not my definition, but I love it—is, “Culture is the way people behave, without a standard operating procedure and without anyone watching them, that’s culture.” And I’m a big believer culture drives everything.

ADI IGNATIUS:

I love that. I can’t let you go without asking you about cricket, I know you’re a big cricket fan. This is the type of question that you ask chatGPT, which is, talk about cricket as a metaphor for how we work and live together.

TIGER TYAGARAJAN:

Oh my god, you’ve hit a passion of mine. You know what? Our board meetings are set up based on a calendar, that is based on when the India cricket team is playing its big matches. And based on that, the board meeting is set up so it doesn’t clash. It’s that important. But to your question, it’s a team sport, so you can learn a lot from that. It’s a sport where there are so many variables.

I think the best description I have is to compare cricket to baseball. And one of the things that’s interesting about baseball is that you have a hitter, you have a ball, you pitch, you bowl. It’s all very similar. However, a lot of variables that are there in cricket are taken out in baseball. The ball, when pitched, cannot hit the turf. In cricket, most of the time it hits the turf. Once it hits the turf, it can go in all kinds of directions. You can make it catch the turf and spin. If it’s a wet wicket, something happens. If there’s dew, something happens. If it’s a hot, humid day, something happens. So you just have so many variables. It’s so unpredictable, it’s so volatile. I can go on and on.

And that teaches you a lot about grit. If there’s a game that teaches you grit, it’s cricket. This completely freaks out all my US colleagues. You can play a game of cricket for five days between two arch rivals, India versus Pakistan. And at the end of the five days, the two captains can come together and say, “You didn’t win. I didn’t win. We’ll come back another day.” That’s a crazy game.

ADI IGNATIUS:

No, we don’t understand that. And you’d probably be rocking a sweater at that point too. And we don’t understand that either. But anyway, I’m a baseball fan. Here’s the deal. You will come to a baseball game with me at some point, I will go to a cricket match with you, and—

TIGER TYAGARAJAN:

Done.

ADI IGNATIUS:

… we’ll continue this conversation.

TIGER TYAGARAJAN:

And the cricket match has to be in the best cricket stadium in the world: Melbourne. Melbourne Cricket Ground.

ADI IGNATIUS:

Alright, that’s the deal. Tiger, I want to thank you for joining us today. It was really great to hear your perspectives. Lot of audience questions. Thank you for being here.

TIGER TYAGARAJAN:

Thank you, Adi. Really enjoyed it. Thank you.