Josh:
Good afternoon, good morning wherever you are. Welcome to episode 58 of the Leading IT Podcast, hosted by Tom Leyden, CIO at Longview, and me, Josh Rubens, CEO at Empyrean. If you’re new to the podcast, welcome to the family, and if you’re a returning listener, thanks for coming back. The purpose of our show is for IT leaders to discover unique and valuable insights into current trends from both sides of the vendor and client paradigm. We tackle relevant and time-sensitive topics like cloud, cybersecurity, infrastructure, AI strategy and leadership, and how to deal with emerging threats and opportunities.
Today, we’re really privileged to be joined by leading organizational psychology and change management specialist Dr. Josephine Palermo, who’s going to have a chat with Tom and me about how we as IT leaders can manage change in our ever-increasingly complex world. These days, with AI and things that seem to be moving and changing and becoming more complex than ever, how we can successfully deliver these changes is going to really define how successful we are over the next 18 to 24 months. So, good day, Tom. I think it’s an important topic and excited to have the chat today.
Tom:
Thanks, Josh. Yeah, looking forward to that. But before we start, let’s talk about some of the news that’s going on around the world in IT. Josh, what have you got?
Josh:
Yeah, so the first couple of bits of news really come from Amazon, from AWS. One of them is that it was announced last week that AWS is no longer able to sell the VMware Cloud on AWS solution. So now customers have to buy it through Broadcom or through Broadcom partners. It’s a pretty big change, a bit of a slap in the face to AWS from Broadcom. I mean, Broadcom has been pretty unfriendly in this approach to the VMware acquisition. They’ve really put a lot of people offside. The customers who have existing one-year or three-year subscriptions, that will continue to work until their end of term, but it’s putting the whole solution in doubt. Something I thought was quite humorous was that AWS has posted a blog giving a step-by-step process on how to migrate their VMware virtual machines to native AWS workloads. So, I thought that was pretty interesting.
Tom:
So, what are you advocating that customers start looking around, Josh? What are you actually saying here?
Josh:
I think if you are running the VMware AWS, you should be looking at your options.
Tom:
Yeah, yeah. When your contract ends, make sure you’ve got a competitive solution coming up, right? I’m going to move on and talk about ChatGPT. The latest version, 4.0, was released last week. It’s better than version four, apparently. But I don’t know if you’re using it, Josh. What I’m seeing is that it uses the internet natively. A lot of AI, like, “Sorry, I don’t know anything after 2023.” It now searches the internet natively and the results are really compelling. So, rather than browsing, you can now just start using this thing directly to find answers for you with all the tools, image generation, the DALL-E type stuff, the language translation piece as well. It’s a lot faster than it used to be. I guess the reasoning is a lot better as well. So, I think a lot of people, particularly marketing people, are already using it. This is becoming more and more a toolset people engage with, right?
Josh:
Yeah, that was a big issue with ChatGPT. It only had data up until 2022. So now, yeah, that’s huge. That puts it in line with the Microsoft Copilot because that was a big selling point for Copilot. That’s interesting.
Tom:
Yeah, it was. There’s a question around whether to use ChatGPT or Copilot. A lot of people using ChatGPT directly or natively or in the Teams enterprise version are saying maybe they need Copilot. Maybe that’s actually better on the side. That’s interesting.
Josh:
Yeah, it depends on the use case, really. If they want to use it within the M365 ecosystem, yeah, okay. Is it much faster, Tom, or are they saying it is?
Tom:
Yeah, yeah. The answers are just better, frankly, more accurate. The better integrating is a big deal, actually. It makes a big difference to your results.
Josh:
Yeah, that’s pretty cool. Also, the other bit of AWS news is that their CEO was saying that 85% of IT spending remains on premises.
Tom:
Yeah, that’s amazing, isn’t it? People are still spending on infrastructure in server rooms or data centers. You’re nodding your head.
Josh:
No, I’m not saying it’s great, but it’s true. He’s spinning it as a big opportunity for them, and that AI workloads will increase spending in the cloud. Although I did see an article from CIO Magazine last week saying that they think AI workloads will revamp the whole on-premises strategy.
Tom:
Yeah, I tell you what, this is the old story. The reason why people got it on-prem is because it’s cheaper, right? That’s the number one reason why people have it on-prem. Is that going to change, though?
Josh:
Well, I think if you think about the lifecycle, maybe you want to go to the cloud when you’re doing the proof of concept because you can run it up really quickly and prove the use case. Then once you know what you’re doing and have it stable, you might want to move the model close to where the data is, particularly if the data is on-premises. The cost of those AI workflows in the cloud is extremely high. If anyone’s tried to utilize a GPU on the public cloud, you’ll know they make you pay for it upfront. So, it’s a lot cheaper to run it on-premises. That’s what I’m thinking, Tom, that people might –
Tom:
It’s the same story, right? It hasn’t really changed.
Josh:
No, so they might play around in the cloud and prove the use case, but then potentially bring it back on-prem. That’s for organizations that care about costs. Surprisingly, a lot of enterprises don’t care how much they spend. That’s fine, they’ll stay in the cloud.
Tom:
I’d like to work for them.
Josh:
Yes.
Tom:
I’m going to move on. I’ve been immersed in marketing technology and the SEO world recently. It’s interesting to see what AI is doing in that space. Did you know, Josh, 80% of Google’s revenue is generated by advertising? Did you know that? 80% of Google’s revenue, 80%. It’s huge. So, they’re under an enormous amount of threat. Their revenue is under threat with ChatGPT coming on and people essentially doing their searches in ChatGPT. Why go and browse anymore? It’s a massive problem for Google. They’re trying to change that. They’re trying to put AI into their browser. You’ll see that when you search for something in Google, they’ll come back with a chat-style answer. Their old dream is to answer your query directly in the browser in that chat thing. What does that mean for advertising? They’re trying to work out how to incorporate advertising within the AI stream and still get you to click on something. It’s huge disruption for Google at the moment.
Josh:
Did I hear something like it was a 30% hit on their revenue or search amount? It’s been huge already.
Tom:
It’s been full on. For a company that has 80% of its revenue from that stream, there’s a big problem. However, I’m sure they’re pretty smart. I’m sure they’ll get through this. I just wouldn’t be buying shares, Josh. Maybe not just yet.
Josh:
I’m not in Google. Most of my shares are on the Microsoft side, and they’ve been good.
Tom:
Full disclosure, full disclosure.
Josh:
As I said, we are not advisors. If anyone takes the advice, that’s on you. Good luck to you. My last bit of news, which I’ll do quickly because I think we will attack this on a future podcast episode, maybe the next one, is that IDC is saying that the PC market is going to return to growth after two years of significant drops. It’s been down like 26 or 27%, but a lot of that was because organizations overspent during COVID on notebook devices. They’re expecting it to have significant increases in 2025. About 43% of total shipments will be AI PCs. What’s changing is new processors. AMD has got their Ryzen processors, and Intel has got Core Ultra processors. These have CPU as well as GPU, and now there’s a new name, NPU, which is Neural Processing Unit. Essentially, it’ll be offloading a lot of the AI processing from the CPU onto this NPU. All the major vendors, Microsoft with their Surface devices, HP, Dell, Lenovo, are all coming out with a new range. The idea is that customers will be motivated to refresh to get into these new AI devices. I think it’s worth drilling into that, Tom, on a future episode and getting into some more detail.
Tom:
Yeah, I think so. There’s a huge question around the value of those endpoints, those devices in the corporate space. How much should you be spending on those things? How often do you refresh your devices? Is there value in the NPU, or is it just a gimmick? We’d like to know the answer to that.
Josh:
Yes, yes. All right, we will attack that probably next time, Tom. Now, if we can welcome our guest. Our guest today is Dr. Josephine Palermo. Josephine is a seasoned leader, executive coach, and consultant specializing in fostering strong leaders, teams, and culture in organizations. She’s worked with hundreds of leaders to help them find untapped potential in their people, processes, and systems. She has a PhD in organizational psychology. She’s held leadership roles in both the public and private sectors. She led a $6 million program at Australia’s largest telecommunications provider, which was about enhancing technological capabilities for enterprise customers. She’s a director of Geared for Growth Consulting and a partner at Six Team Conditions Australia. Josephine champions the purposeful shaping of business leadership and strong culture by enabling collaboration and high-performance teams. Her Amazon bestseller book, “Rising to Feminine Power: The Lasso of Truth,” and her podcast, “Gears, Action, and Growth,” reflect her commitment to challenging traditional views on work and fostering a collective approach to leadership. So, welcome. We’re really honored to have you with us, Josephine.
Josephine:
Thank you, Josh and Tom. I love that update you just gave. It always blows my mind whenever I listen to your podcast. I come to you for all the news, and yes, I feel very informed now. Thank you for that.
Tom:
Come back anytime. That’s absolutely fine.
Josh:
We’re very easily pleased, Josephine. So, we mentioned earlier the problem we’re trying to solve here: the exponential rate of change in technology. The new one is AI and ChatGPT and all the stuff we’ve been talking about. Poor old CIOs, IT leaders have been tasked with making this change. Maybe later on, we can get into some recommendations around how they go through it. But to get us all on the same page, why don’t you talk to us about what you think change management is?
Josephine:
Yes, and I might talk about strategic change because I think of change management as small “c” change, whereas strategic change is where you’re actually enabling transformation in an organization. That could be digital transformation, but it could be transformation that touches every single function. Often, when you change one thing, you change things within the rest of the system as well. Change management as a practice or small “c” change is the process you use to make sure that you’ve got adequate buy-in from stakeholders when you’re starting a change all the way through to the end of that change producing the benefits you want. There’s a process and a set of methodologies that relate to change management. It’s a really important function, and it sits alongside project management. But strategic change is that leadership function, and all leaders need capability around leading change, especially leaders that sponsor change. So, there’s two aspects to it for me.
Josh:
Right, it’s pretty huge. So, how come we rarely see it in IT projects in the cost model or in…? Why is it so rare?
Josephine:
It’s the bane of my life. I think that it has to be something that’s factored in. EY has done some recent research on transformation projects. Kotter, back in the ’70s, found that 70% of projects failed. EY went out and did some research looking at thousands of organizations globally and asking IT directors and CEOs about their experience, and that statistic still stands up: about 70% of projects fail. The reason they fail is because at the project level, there are certain human factor processes or conditions that aren’t set up. There are certain things that we know make a big difference to project success. In fact, it can increase the likelihood of going from failure to success threefold. There are six things that EY identified. I’ll tell you what they are.
Josh:
Yeah, please.
Josephine:
We can kind of play around with which ones you want to focus on. The first one is purposeful vision. Any change has a future state, and you’ve really got to get that “why” in place, the human mindset changes that are required. Then you need leadership that adapts, particularly leaders who lean in and are constantly working on emphasizing collective effort around that vision. You need to have psychological safety where people feel free to speak up when things go wrong. EY talks about turning points in a project, and leaders need to sense when those turning points are happening. Those turning points might be the first time you get a real niggle that something’s not quite right, that perhaps the milestones aren’t being met on time, or there’s some problem with quality. Leaders who put their heads in the sand at that point guarantee project failure. There are things we can sense and predict when those turning points are going to happen. Then you’ve got to make it real with technology. You’ve got to make sure that technology is brought to life for people in the whole business, not just your target users but the whole business. Get people to invest in playing with the new forms. We see this with the success of some of the AI models like ChatGPT. They’ve enabled people to play with open AI, and now there’s incredible buy-in because people are able to play and understand the potential of that change. The next factor is creating autonomy, disciplined freedom, creating autonomy in the organization to experiment and shift into acceptance of that change. The last thing is collaboration, co-creating new ways of working. Those factors sound like a lot of information, but even if at the beginning of a project we focused on three of those things, on the things we know we need to focus on, and built those into our change management, project management, and leadership governance, we would ensure success. The problem is we have a belief that success is about creating a roadmap and then doing stuff, making stuff, and delivering along that roadmap. We focus on getting things done and the transactions around that without paying attention to the humans in the room, the humans in the organization.
Josh:
Can I ask you a question, Josephine? I’m not going to mention which customer it is.
Josephine:
Can I guess?
Josh:
I’m not going to say. It’s not Tom.
Tom:
That’s good to hear.
Josh:
There’s certainly a culture in the organization around autonomy and collaboration. However, the issue is that in every meeting, let’s say you have 20 people in a meeting and you’re trying to workshop requirements and move a project forward, each one of those 20 people thinks they are a decision-maker.
Josephine:
Yes.
Josh:
Most of the time, all of the 20 don’t agree at all with each other. What’s the balance there between mandating and going, “Right, we’re making a decision here, we’re doing X, sorry, you guys…” What’s the best way to address that?
Josephine:
We don’t know how to do collaboration well, and that’s why that happens, Josh. That’s why you get 20 people in the room either all wanting to make a decision or 20 people in the room who are just there for the coffee. You get the opposite where nobody wants to make a decision. We don’t do collaboration well because we haven’t been taught to do it well, and we don’t understand the science behind collaboration. Collaboration happens when you have role clarity around what we’re here to do and who has accountability. You work those out first and then work out the how. In terms of what we’re here to do and who’s got the accountability, and what the outcomes are, there are four things that can happen when groups of people come together. They can share information, cooperate on some task, coordinate, which needs a bit more trust because you’re giving and receiving resources, or really collaborate, which means making decisions together. Often, we don’t know where we’re at in relation to those four things, and we don’t have conversations about clarity. There’s a fast team protocol based on six team conditions research from Harvard University, looking at surgical teams, for example. Imagine you’re on the surgical bed, the doctor’s there, the nurses are there, the whole team is there, and someone is putting anesthetic in your arm. You want those people to work well as a team, understand what they’re there to do, and know who has the accountability. They often get together and haven’t worked together before. This fast team protocol was developed from researching those kinds of teams, like aircraft crews. Spend the first few minutes of being together, even if you think you know, asking everyone what we’re here to do and who’s accountable for what and how we want to get there in this meeting.
Tom:
Yeah, I think you’re right. Who’s got what role, and do we all agree? Are we all clear on what role each person’s playing within the room here? That’s something we often forget. We’re all about collaborating and sharing and being nice to each other, but it’d be nice to clarify who’s got what role and what people bring to the conversation as well. It’s an opportunity to give people a license to speak about what they really know about and feel comfortable in that space, which is sometimes forgotten.
Josephine:
Yeah, exactly. That’s absolutely right, Tom. Then you create conditions for psychological safety. Psychological safety should not feel like a warm bath or a kumbaya moment. If you feel like that in a group, something’s wrong. People aren’t speaking up, not saying, “Hey, Tom, I think you think you’re accountable for something I’m accountable for,” or, “Hey, Josh, you need to pull your weight because you’re accountable for that and I’m doing your job.” That is a good team when you do that respectfully.
Josh:
I don’t see that happening in a lot of organizations. People are afraid to have that… What’s it called, microaggressions? I think you might be in a meeting with HR. How do we balance that? I can see a meeting with HR saying bullying, microaggressions, all sorts of things.
Josephine:
We have to be real with each other about the work. This is about the work, not about who. If you relate it back to the work, I’m not criticizing you or your personality. I’m saying, in relation to this work, I understood you were accountable for A, B, and C, and I’m not seeing A, B, and C being done. What’s going on? You move away from a blame culture, asking, “What’s going on?” Then it could be about clarity, knowledge, and skills, or maybe barriers in the organization. There could be lots of things. It’s having an open mind about that and not necessarily using big voices. It’s about being passionate about the work, not about strapping someone across the back with a whip.
Tom:
And how can we help? It’s not about blaming you for not getting this done. Let’s unpack it to help you get it done because we’re all vested in this project’s success. Can I change the topic slightly? Comment about the big vision and projects where someone, maybe a management consultant or someone with influence, stood up in front and thought about the grand vision of the project, saying it will be the best project ever. Twelve months later, they’re fired, half the team has changed, and it’s all going horribly wrong. What happens with the big vision and disaster that typically follows?
Josephine:
Haven’t we all been part of that in organizations? There are turning points related to when the vision is realized. At the beginning, the CEO is optimistic, everyone’s optimistic, talking about benefits and dreaming big. It’s appropriate. Maybe 12 months in, there are real problems. The operations functions are chomping at the bit, saying, “We need our resources back, you’ve gone over time,” or, “The benefit you promised isn’t delivered without the resources.” The reality of now competes with the aspiration of the future vision. But we can predict that. Particularly with a transformation program or change that takes 12 months, you can predict at the six-month mark people will have cold feet. They’ll say, “This isn’t delivering what was promised,” or “We have a data ingestion problem.” Predict that, create signature moments at that point. Get the CEO and leadership team to recommit and re-envision. Get everyone in a room to have a real conversation about what’s happening. Shift or unearth problems that weren’t apparent when dreaming big. Explain the shift, bring people along, predict at the six-month mark some extra work is needed.
Josh:
Straight talking is a massive issue in our culture, particularly within corporate organizations. There seems to be an allergy to holding people accountable and being direct in a respectful, compassionate way. It’s hard in a lot of corporates. If security is going to get involved and operations are going to get involved, how do we talk about that?
Josephine:
You predicted that, so you engaged security early, bringing them along. They’ve co-created some things to mitigate blowouts at the six-month mark. You’re continually communicating with the organization, not just at the beginning. You bring people in to have real conversations about what’s happening and why. Create supportive context for the project team, ensuring ongoing communication and involvement. If things happen unexpectedly, bring people into a room and ask easy questions like, “If this was easy, what would we do?” It’s about bringing the right people together at the right moment and asking easy questions, training people on how to talk to each other, and shifting focus to what’s important.
Josh:
Can I ask about a customer where everyone thinks they’re a decision-maker?
Josephine:
We don’t do collaboration well, and that’s why that happens. We need role clarity about what we’re here to do and who’s accountable. We need to clarify roles and ensure everyone knows what they’re responsible for. It’s about the work, not personalities. Communicate expectations and ask open questions.
Tom:
Yeah, I think you’re right. Clarifying roles and expectations can help avoid confusion and ensure everyone knows their responsibilities.
Josephine:
Exactly. It’s about creating psychological safety and being real about the work. People should feel free to speak up when things go wrong, and leaders need to sense turning points in a project. Predicting and addressing issues early can prevent project failure.
Josh:
So, what’s the next step after setting milestones and implementing delivery?
Josephine:
Ensure different delivery teams collaborate and communicate more than you think is necessary. Set up team-based structures where they communicate effectively and solve problems together. Meetings should be focused on creative problem-solving, not just updates. Provide updates beforehand and use meeting time for problem-solving.
Josh:
Yeah, that would reduce 80% of meetings.
Tom:
It would if people did their homework and read the papers before meetings. Getting non-technical business leadership to buy into the outcome and be part of the solution is crucial. Calling out issues with unsupportive stakeholders is hard but necessary.
Josh:
Especially if it’s the CEO.
Josephine:
Absolutely. Sometimes leaders don’t engage because they don’t see a vested interest or shared accountability. It’s important to have conversations to understand their concerns and build relationships. If a project doesn’t motivate leaders to be involved, your story or vision might be incorrect, or you shouldn’t be doing it.
Tom:
Stopping a project halfway through requires strong leadership. You need to manage emotional ties and address underlying beliefs and concerns. Sometimes, it’s about letting go and understanding the real impact on the organization and individuals.
Josh:
So, getting buy-in, understanding use cases, setting milestones, and ensuring collaboration are key. What’s next?
Josephine:
Once you’ve set milestones and are in implementation, ensure collaboration among delivery teams. Focus meetings on problem-solving, not updates. Communicate effectively and provide supportive context for the project team. Ensure ongoing communication and involvement from stakeholders.
Josh:
Fantastic, Josephine. We’ve run out of time, but we’ll have to get you back. It’s been a pleasure.
Josephine:
Thank you, Josh and Tom. I love connecting with people. You can find me on LinkedIn or visit 6teamconditions.com.
Josh:
Thank you, Josephine. Thanks for listening. If you enjoyed the episode, please give us a five-star rating. You can reach me on LinkedIn or email me at jrubens@empyreanit.com.au. Thanks for listening. See you, Tom.
Tom:
Thanks very much. Thanks.
