In this week’s episode we were joined by Gregory Garrett, CEO of CGS Advisors, a strategic transformation advisory firm that helps companies plan and execute initiatives to compete in a connected world. He is also the host of the highly rated podcast You, Me and Your Top Three.
In a change to our typical format, Gregory kicked off by interviewing Erik about his experience as an entrepreneur in China. They then switched roles and Gregory shared his perspective on the importance of establishing an ecosystem in order to create digital solutions that scale.
- How do you keep your knowhow fresh when you work in a dynamic industry?
- What is it like to be an American entrepreneur in China?
- Who should you surround yourself with in order to become a better leader?
- How do you build a vision for your company’s future? And when should you be open to changing that vision?
Erik: Gregg, how are you today?
Gregg: I'm doing great, Erik. How are you?
Erik: I'm good. I'm good. I'm looking forward to this conversation with you.
Gregg: Yeah, it's been a little bit of pulling it together, but I think it should be fun to see how we can do a dual podcast together.
Erik: Yeah, exactly. So, this is a unique one. I think this is the first time that I'm doing something where I'm not formally the host but just, let's say, a party of a conversation. Have you done this before?
Gregg: No, I think we'll probably be arm wrestling a little bit here of who's asking who, what, and where. But I think that our backgrounds are interesting enough and similar enough that we'll meander through this together. It sounds great.
Erik: Yeah, we'll figure it out. Well, let's start with backgrounds then. So, tell me. I mean, obviously, you're running your own company now. You've got a lot of interesting experience behind you. How did you end up now in the position you are, running CGS?
Gregg: So, the quick version of it is, I started the company when I was 16. I didn't retire by 20 like I had absolutely planned. I've done quite a few years in big companies, just about eight years with the Ernst and Young's management consulting practice and then over a decade with really large firms — Volkswagen, Deutsche Telekom, subsidiaries of each and whatnot. In 2011, I took all that experience and launched CGS Advisors. So, CGS is a little over 10 years. We're a boutique. You told me at one point, don't say small. Say boutique. So, we're a boutique strategy and transformation firm specializing in a lot of digital space, really understanding how digital disruption is happening and affecting firms, and really around the connected world, that digital getting permeating into devices, changing the landscape. We do the strategy work. We do the transformation work. We do the human change. We call it nurture removal work. We do a lot of innovation work helping large firms set up innovation practices. So, that's how I got there. It was a little bit of a window in my world. How about you, though? We said we're going to arm wrestle on this. How about yourself? You founded the firm. I think we've got some similarities in that, as well. What's your story? How did you get to the top where you're at?
Erik: Well, at least our earlier started a bit differently. I think I was basically retired until I was 24. So, I think I don't know when my first proper income was. It was probably when I finished my MBA and I was, I don't know, 28 or so. But I studied philosophy. I had no interest in business. I'm coming from Portland, Oregon so business is a bit of a curse word there. I figured I would be involved in non-profits. I finally got involved in a non-profit in Nepal. I was trying to set something else with a friend. I realized, on the one hand, that I was relatively incompetent and, on the other hand, that all the other non-profits that were doing a tremendous amount of business in the country weren't actually doing too much good for the country. At that point, I got convinced that maybe the best thing would be to learn how to be competent and learn how to do business. Then maybe I could really help people. After that, let's say, I got a bit serious. I ended up joining the Swedish management consultancy, Applied Value Group, doing cost and capital consulting. Then I eventually decided that digitalization was a bit more interesting. It was a space that was younger and developing a bit more dynamically. So, I set up that firm in 2015.
Gregg: That's good. I don't think I asked you before, but I'm just curious. From Portland, Oregon to the Asia PAC region, was it just a professional piece? Because it sounds like there was other steps along that way. What took you to China?
Erik: Everybody has their own experience, right? In mine, I was studying political science and philosophy. I felt like, okay, I've been reading a lot of books about the world, but I've never actually seen the world. I spent about a year in Latin America traveling around, doing odd jobs to pay the bills. Then I met somebody who had just returned from China. I said, "Well, China sounds like something I should see." I think, really, two weeks later, I was on a plane to Nanjing. I was teaching at a suburban college in Nanjing. So, not a very glamorous entry, but it was a great — I remember standing on the top of the teacher's apartment complex the first week I got there, looking out in the distance and seeing more construction cranes that I've seen in aggregate my entire life and thinking, "Okay. There's something here that's quite interesting I need to learn a bit more about."
Gregg: That's interesting. You did that multi-year adventure, find yourself adventure, find the location, et cetera. I jammed that all, not all of it but a good portion of that into a single semester during my collegiate years. I lived on a boat. I went around the world and went to class a little bit. China was actually one of our stops when I was — a long time ago now, but it is a different country. My gosh, it has really changed. So, you enjoyed the Wild West, getting there and seeing everything grow and be part of that upward trend, huh?
Erik: Yeah, I did. But like you said, it was a different place. I mean, the suburbs of Nanjing in 2006 were not a very glamorous environment. I think, for many of the people, maybe most of the people that I met, I was the first foreigner that they saw in their life, right? So, that was an interesting experience. I think I spent about six months there. Then I went to Korea, Nepal, Japan, and eventually, like you said, figured out some direction and made it back to the States to pursue that goal of getting competent.
Gregg: That's great. I know that your podcast should keep it a little bit separate from the corporate side. But what are you doing now? Just maybe let everybody that's listening know what you're up to with your current firm.
Erik: Yeah, sure. So, my day job is as a CEO of IoT One. We're a management consultancy that focuses on, I'd say, three key terms: Asia, growth, and digitalization. How do we help companies to leverage digital technologies to grow in Asia, and working primarily within the larger multinational companies who already have a footprint here but then are either looking at extending their product portfolio? They're looking at operational excellence, and they're basically looking at their organizations and saying, "How do we make sure that we're competitive for the next decade, the next two decades of development here in Asia?" Then I'm wearing a couple other hats. I like to be part of communities. That's actually one of the reasons I host my podcast, is I like to talk to people. So, I'm chairing the Tech and Innovation Committee over at the American Chamber of Commerce. Also, since 2013, I've been running the Shanghai Chapter for a community called Startup Grind, where we support early-stage entrepreneurs.
Gregg: That's good. That's maybe a good straight man for setting up how we got together to do this joint, strange podcast, right? At least from my piece, great members of your team, somehow or another, I might actually never ask them how they found us or found me. But they put us together. There are a lot of similarities and a couple of differences — to leading, consulting organizations, advisory organizations that are smaller in size but maybe playing above our weight class in many ways, of working with really large firms, around growth and digitalization, and Internet of Things. But you're very focused, your firm is very focused on the Asian market. Our firm is located and fairly focused in North America. So, we were able to admin flow and have some conversations around that, I think.
Then secondarily, as you said, you're doing all kinds of things in the community. I have a lot of these professional hobbies, as well — teaching for the last 10 years, writing a book, and then teaching a course on competing in the connecting world, bringing a lot of different organizations together and these collaboratives that we build. We've got one right now, actually, around Industry 4.0 and bringing a lot of larger firms together to try to see what they can do with one another, to drive the promise of the Fourth Industrial Revolution together, and some startup community. I know you work with a fair amount. I'm thinking, actually, most of the folks that you have or many of the folks that you have on your podcast are from a startup or a scale up perspective or people wanting to receive the other side of that. We do, and I do, a lot of work in the startup community as well through organizations like TechStars and whatnot. When we both thought we had a podcast, we thought, "Well, we want to interview each other. Maybe we can do it at the same time and see how this all works, and tell the same story in two different places." So, I think that's my version of how we got here. Is that how you remember it as well here?
Erik: Exactly. Yeah, those first connections are a bit foggy for me as well. But I guess our teams found each other, and here we are.
Gregg: It's great.
Erik: I'm looking forward to it.
Gregg: That sounds good. So, I think both of our formats are different. Everybody that's listening, we've got to — we're trying to get a two out of one, two birds, one stone. Maybe if I can take the lead, if that's okay, we can talk a little bit. I can ask you a couple of things about how you're leading and who you're surrounding yourself with. Because that's the premise of the show, You, Me, and Your Top Three, which is what I host on a fairly regular basis for almost three years now, 140 some 150 episodes in. If that's all right, maybe we can talk a little bit about you. Is that all right?
Erik: Yeah, perfect.
Gregg: That sounds good. So, you're an American in China. We talked a little bit about how you got there. Maybe if I can talk to you a little bit about who you surround yourself with in this journey, either that helped you get there in the first place or that you're in the journey with. But I'm sure, American, as you said, early days, it was the first foreigner that some of these folks saw. You've obviously transitioned that to a much more vibrant part of the country at this point. But maybe the way that I usually say this is, we've got you and we've got me. Who are your top three? Who are one, two, or three people that you surround yourself with that make you a better, braver leader that you've been learning through this journey with? Can we highlight somebody or a couple?
Erik: Yeah, sure. I can probably look at this from a couple of perspectives. So, number one has to be my wife, in part, because she's on the couch just next to me.
Gregg: Smart man.
Erik: Yeah, I think this is true for many people, right? So, you have your business partners. You have people that help you in very specific ways. Then you have people that help you through difficult times, and so forth. Often, that's family to some extent. It's probably healthier where we are today — where she's not very involved in my business, except occasionally help me think through a topic. But there was a time when I was first setting up. Especially I set up my first startup, I had no partners. I failed very quickly. She was a big part of that, holding my hand through that failure, let's say, losing money with me too much but also helping me to learn through it and stay relatively positive through the difficult times. Now we're in a position where, again, she's — we advise each other on problems here and there. We're both running our own careers. But nonetheless, I think that's just a critical part of being successful. It's having somebody that's going to let you know if things are difficult, that it's okay. You'll get through it one way or another. If business collapses, there's more important things. So, I think that's number one.
I've got two partners at IoT One, and they're critical. I met them in a very odd way. My first startup, brutal failure, in 10 months. Probably, the wrong business for me to run. I ran into also policy issues where we had a new leader here in China. They decided they wanted less foreign influence on college campuses, and that business was around helping college students transition into their professional careers. So, my sales channel closed, basically, overnight. So, it was a tough experience. I then had no intention of setting up another company in the near term. I decided, basically, that I wanted to build expertise outside of management consulting, more specifically in this digital technology realm. I thought the best way to do that would be to work with a Siemens, a GE, and Alibaba, Tencent, somebody like this. So, I contacted some headhunters. I said, "Hey, do you guys have any interesting roles that I might be suitable for?" One of them contacted me back and said, "Yeah, let's have a chat." It turns out that they were interested in the same space and thinking, "Okay. Maybe we want to set up a company here." They were a couple of friends that had been running a headhunting firm for the past, I don't know, seven years by that point or so. They said, "We need a general manager." I said, "Well, I'm trying to learn something. Are you willing to — are you willing to pay my bills while I learn?" They said, "Okay. We'll pay you. We'll cover the cost for the first couple years. Let's see if we can get profitable after that." It basically worked out. So, we formed a partnership.
One of them, Michael is just a great relationship person. So, he taught me a lot about what it means to build relationships, not to do sales, hey you got a proposal, but to just build trust with people, help people out when they need help. Then over that, you build relationships. Eventually, people say, "Hey, Erik. You seem to know something about this, and you seem to be a person I can trust. Can you help me?" Then Chun, who is our COO and does everything about — he knows everything about process. We need to build process into HR, process into marketing, process into finance and accounting, and so forth. He has taught me a lot about how do you build structures to be small but be efficient, be quick. So, they've been a huge influence on me developing my skill sets.
Those, I think, are the three people that are most influential on me. As I mentioned, I like to be part of community. So, I invest a lot of time in having lunch with people, having coffee with people, trying to do little favors here, asking for favors. Sometimes, I think people like to give. They like to ask for favors. They also like to support you. It's a great way to learn and build relationships. I think that has helped me a lot, of just having those little relationships where I learned from people in little steps here and there. Then it's hard to point to one person, but there's probably 50 people that over the past five years or so have somehow contributed to who I am today.
Gregg: Interesting. A lot of different questions along the way. But just in the interest of time, maybe we'll just pull in that last thread just from a moment. You mentioned the Chamber and the relationships you're making there. When you talk about these many people, is that the community that you're mostly speaking of, or is it multiple communities around the local China space that you're thinking of when you think about the community aspects of that?
Erik: I would say it's broader than that. Actually, the Chamber is relatively — I've been a member for a while, but having this role is relatively new. I think it has been 18 months or so. So, it's Startup Grind. I have co-directors there. We were just people that have joined events and have allowed me to pick their brain about different topics. I have organizations like VDMA, which is a German association of machine builders. The GM there is a good friend and just helping me to understand German machine builders, what are their priorities and how do they think. Everybody contributes in some way. So, very fragmented. The luxury of living in a city like Shanghai is that you probably have a greater aggregation of talent and multinational decision-making and so forth here than just about any city in the world, just because it's very concentrated as opposed to maybe in the States where it's a bit more fragmented across cities. So, it's just a great base of people to be learning from.
Gregg: Yeah, interesting. Maybe I'm going to pull on that thread one last piece. When we've talked in the past, you've talked about local-for-local strategy a bit. When you've got this comparing address, at least growing up in the States maybe not really had a much more professional route through those days, but you have your perceptions of the States, and then you've got this experience on the ground in China. You also have that in the developing China, including pre and current/post-initial wave of COVID. How does it work? For those that haven't — a lot of folks that do business, they hear about China. They read about it in the journal. Maybe they've come once or twice. But few Americans, a lot fewer than all of them that are out there, or Europeans even, have spent time there and even less have launched a company that is based there. Can you give the highlights, for the novices that are listening in, of how does this local-for-local strategy work?
Erik: Well, first of all, I think there's some characteristics of China that would be very familiar to an American, for example. China is a big culture. It's a country with a lot of nationalism, and so is America. It's a country with — if you take a farm boy from China and you take a farm boy from the US, and you put them together, they're going to have a lot of fun together, right? Let's go shoot guns. Let's go. Okay, you can't shoot guns here. But the Chinese would love to shoot guns. I mean, give us some fire crackers, and let's go have some fun. I think, actually, they might think that they're completely different. I think they would have a great time together. But there's also an intense competition, which you see in both countries. You have large countries with a lot of local competitors, and you have these, in technology domain and industrial, really intense competition. That, I think, is really important to understand in China. We have the Protestant work ethic in the US. China has an intense — its own intense work ethic. It's maybe coming from a slightly different place, but it's really a part of the culture going back thousands of years — the ethic of supporting the family and being a breadwinner.
If you're coming to China, it's really important to understand the complexities, that there's going to be some things that are quite foreign and just part of an organic culture that's built up over generations, and that are going to be very difficult for you to understand. Then there's some things that are big trends that you can make sense of. You can make sense of the work ethic. You can make sense of the intense competition. You have things like industrial clusters, one city where 70% of the paperclips in the world are manufactured. You have Detroit. You can make sense of that right? One city, that at least back in maybe the 60s, was building most of the vehicles in the world. So, you have some characteristics like that. As a business person, you also have to then make sense of what are the similarities. In a B2B environment where I'm coming from, physics operates the same. Chemistry operates the same. So, there's always a lot of similarities. Then you have to pick apart what are the differences that are going to impact how we go to market, how we build channels, maybe now how we build our tech stack, because of also some of the privacy and cybersecurity policies that have been put in place in China.
Gregg: Interesting. I think that what you said at the very beginning of that is maybe the most interesting to me. It's the perception of the differences. Some holds true, but when you get down to the people level — the human level below the organizational level — that people are the same in many walks of life and many geographies. You put some more people there with other similar people. You're probably going to find people that can converse and find more common than differences. I think we probably need to try to find a lot more of that out there these days, especially in the global economy and the global situation that we're in right now. Interesting. Really, really helpful, I think.
So, that's a small, little aspect of typically how I run these things — the whole premise of speaking a little bit about you and who you surround yourself with. I think you did a great job in a fast forward format. The whole premise is that you really are the people that you surround yourself with. If you surround yourself with laggards, you're going to be a laggard leader. If you're surrounding yourself with progressives, you're going to be a progressive leader. I think you give a great snapshot from your wife, who's on the couch there, to your business partners that took a chance on you, it sounds like to maybe these community leaders that are pretty broad and diverse that has push you forward likely. It sounds like that's really how you lead yourself, as well as how you probably lead IoT ONE as well. So, that's a little snapshot into what you mean your top three is all about. So, I appreciate you letting me go first and pull that forward. Maybe I can hand the mic to you, and we can experience a little bit of what your podcast is typically like.
Erik: Yeah, great. Well, I'm really interested in understanding how you approach the Industry 4.0 and IoT in broader digitalization topic, coming from it's a much more of a leadership perspective than I'm coming from. Maybe a good place to start would be this initiative that you mentioned briefly earlier, where you're pulling together multinationals to collaborate around these topics. Because this is an area where I see a tremendous amount of potential. Because this is a space where you have a lot of organizations that have tens of thousands, maybe even hundreds of thousands of employees, but they tend not to have a tremendous amount of competence in this particular area just because, historically, their core competencies have been in other areas. There's the potential to share learning, share resources and domain expertise. But there's also, obviously, very significant human challenges of making that possible. So, I'm really curious how you approach that challenge.
Gregg: So, there's probably a couple of different tracks in that. First, maybe I can just back up and talk a little bit about IoT or, at least, my/our view on that in the Industry 4.0. Then I'll talk a little bit about trying to bring different people together. First, rarely do I use the term IoT out there, but we do put it inside of a spectrum. So, we see the world is connecting the connected world. The end state would be the connected — ED, in a past tense — world. The current state would be the connecting world. The world is connecting. Maybe prior to that is the world of IoT, the Internet of Things. That doesn't mean that we've achieved a complete world that has all things connected or internet connected. But it does mean that there's a difference between connecting things and connecting things with humans. So, we just put that a little bit on a trajectory. First, you may connect the things. But if you really want to change life, shape society, change maybe the fundamentals of the way that you're shifting the business, humans are going to need to come into that at some point, which is where we look at the world connecting versus just the things connecting. That's the philosophical side, although I don't have the philosophy degree like you. If you want to muse on that at some point, I got lots of thoughts in that space. I wrote a book on it back in 2018, called Competing in the Connecting World, which lays out some of those spectrum and those progressions around Industry 4.0.
There's a lot of different roads into this conversation, but I guess the first piece is the promise of the Fourth Industrial Revolution. The three prior to this are already happening. But the promise of this is a lot of machines speaking to machines, effortless aspects happening, a lot of products moving from design to the actual manufacturing, to the movement, to the usage, into the recycling the whole spectrum of the product, finding efficiencies and automations and new value. What we found when we started this effort a little over a year ago — we were working with one of our great clients, a major US telecom company. They were very interested in providing services to firms around the Industrial Internet or the Fourth Industrial Revolution. We started speaking with big companies. I mean, I'm talking Fortune 50. In some cases, Fortune 25, as well as Fortune 2000 or Global 2000. Most would say that they were doing something around the Fourth Industrial Revolution. Many would admit, within the first 10 minutes of conversation, that what they were doing was really point. They were putting artificial intelligence on one segment of their value chain, or they were running an experiment in a loading dock, or they were doing something with augmented reality to be able to make manufacturers' lives easier or different.
They would talk about that's what they were doing. But as soon as I asked them why, or we push the conversation to value, they would describe a world where information flowed freely. They would describe a world where product usage information was driving the manufacturing or recapturing of resources in a recycling way that they would be able to, in real-time, know where these products were, and then be able to reuse them to affect both the economic aspects of the company but also the environmental aspects around them. When we talk, there was just a huge gap between these point things and the promise. That's why we brought the collaborative together. What we see is or what we think we see is in order to really achieve the promise of the Fourth Industrial Revolution, information needs to flow between organizations in a way it never did before, and trust. Maybe more important than just information, trust needs to be achieved between organizations. Our belief is, that starts with the leaders of these organizations. Sometimes that can be from the C-level, and sometimes that can be from the VP level. Once in a while, that can be from the director or manager level. But organizations need to be speaking with one another to even try to experiment. So, that's what we're trying to do. It's bringing leaders together to first build the trust, then maybe share the learnings with one another to even further enhance the trust. If we really do a good job, actually, have them start to experimenting together to see if they can really drive the real value of the Fourth Industrial Revolution.
Erik: Okay. Yeah, fascinating. That resonates very closely with my experience, that it's relatively easy to develop a vision for the future. It's quite natural for people to do that. It's an exciting activity to do. Then it's relatively easy to do pilot projects and make small budgets available to solve specific problems, which can be valuable in themselves.
Erik: But then, bridging those two is extremely challenging. I agree with you. Trust is the critical thing. Actually, I've recently interviewed a couple folks on the podcast who are approaching this more from the technical standpoint of how to use next-generation blockchain to create trust in the transfer of data and that we're using data. I think that's an interesting technological potential. But I think that sometimes you look at trust from that perspective and you think, well, we're not quite getting at it. You might then have trust in the data, but you still lack trust in the organization in terms of the decision-makers, around what are we going to use the data for. That's a critical gap that you can't solve with technology. Very interesting initiative. Nonetheless, I think, very, very challenging. Can we go a bit more into the details of how do you make that happen? Because I think still getting the right people at the table is a great start. Getting those people to agree on ambitious initiatives that they're going to collaboratively devote resources to is a significantly bigger challenge. What's your process for helping them to define areas where they're comfortable collaborating?
Gregg: I wish I could tell you that it's all been worked out, and we've got it all perfectly engineered. This is the third time in our tenure history that we've formed collaboratives around these. Typically, the pattern is, we build them up slowly. They take on some life. Then over, maybe, the course of three to four years, they eventually — they've run their value, and we shut them down. So, we're only within the first year of that evolution of this collaborative, and I can't fully predict how it will go. But what I can tell you is what we've been doing over the course of the last year and what we're currently doing.
So, the first phase is find people that are interested in the topic of Industry 4.0. Typically, that's someone that's got that in their title, or they've got it somewhere in their responsibility, or, in a small number of cases, they want it in their title, in their responsibility. The second is to get them to share more on a one-on-one aspect. Us, CGS, is the administrator of the collaborative. What we really are interested in them doing is first telling us what they are doing, then maybe dreaming a little bit together. But what we're trying to get them to talk about is what are their goals. It's the word association or the phrase association game. When we say Industry 4.0, you think what value. We try to get that drawn out. Once we do that, we can then start the matchmaking process. That matchmaking process works through a very particular evolution. First, who are others that would be interested in these topics? Who looks at the world, maybe somewhere around movement of goods and others or around manufacturing of goods? Where are the pockets? How can we put like people together, birds of a feather approach just so they can easily communicate? At least, when we say cry on each other's shoulders, they're not in this fight alone.
The second phase of that is, once they've at least met one another, get them to start sharing with one another what they're currently doing, learning from one another. Hey, we've worked with this vendor. We met this startup here. We have a problem. We look at it this way, and this is how we measure. Maybe you can steal some of those measurements, et cetera. Non-competitive but just really sharing.
The last piece, which we're, honestly, a year into it. We're just getting into this now, but it's the most exciting piece for me. If we have enough conversations with folks about the value that they want to see and what they have, we can start building the story arcs of how they can get to that value. We can start circling in that story, where are your gaps? Usually, those gaps happen in two spaces. One is the movement of the good in one direction. Then the second is the movement of the data — sometimes in the same direction, many times in the alternate directions, and sometimes are perpendicular to that.
We start bringing groups together. So, I can just use one example right now. We have a massive appliance manufacturer. We have a huge produce grower that operates some of the largest greenhouses in the world. We have a health institute that is looking at food as medicine. We have a few others, but let's stick with those three. In the non-connected, in the linear industry world, those three organizations have no reason to speak together. One is running health, one is running produce manufacturing, and one produces appliances. But in the connected world, there are storyboards that we're putting them together for to say, "What happens if the appliance could talk about what produce is being consumed? At what rate? How would that affect, potentially, the production of fruit, in the distribution of vegetables? If you knew that, how could you improve someone's health?" We put the human in the center. We put the appliance, the fruit, and the health around the edges of this. We talk about these, and then we can build that story. Then we ask them to rate — which of these have value to you, and which one you don't, which to prioritize — if they want to work together. That's a live example. We're right in the midst of that grouping right now.
Erik: Fascinating. Data is such an interesting resource, because you generate it from some activity that you're doing. It can provide value to, really, a wide and often quite random assortment of companies. It's really then the discovery of figuring out what data is available, and how can I make use. Then of course, you have to figure out the ethical questions around privacy and security and so forth. It's also a resource that can be shared for relatively low cost, as long as you have the infrastructure in place. I'm curious then. In these conversations, I think when industry 4.0 conferences were first kicking off and so forth, focus was very strongly on operational excellence, operational efficiencies. I've seen that focused now, shift a bit more towards looking at it from a revenue perspective of how can this help us grow our business by being small lot sizes, by improving service, et cetera. Do you see a particular direction of interest, either in terms of the operational excellence or the business excellence side?
Gregg: No, there isn't just one. But I do think that that pattern that you're seeing is occurring, and for some industries faster than others. But again, a lot of it comes down to the leaders in the business situation that they're in. The efficiencies and the excellence is certainly still in there. I feel like when you get into operating leaders, closer to maybe manufacturing leaders, maybe some supply chain leaders, that's oftentimes the conversations you're in. They're in charge of their function. They understand that this is something that's going to potentially be able to really change their function. So, they're focused on maybe bottom-line results, or cost savings, or cost avoidances and these types of things.
When you get up to business unit leaders, business development folks, and maybe in some of the strategy offices, at least, I wouldn't say that they're necessarily leading this way. But they're very open to the conversations. They're, at minimum, curious about the conversations when we talk about how can some of this affect maybe your corporate or business strategy. What business are you even in? Will you be in the same business in this new environment? How will you compete in that business? This is where disintermediation of value chain players. What will the role of the retailer be in the future if the appliance can talk to the fruit grower directly, and you can do drop shipping? What is the retailer, the future, for instance? These conversations are starting to happen, and they're not just dreaming conversations anymore. Direct-to-consumer is absolutely a major trend. The supply chain folks, sometimes what we're talking about the manufacturing folks, not so much. But the business development and the strategy folks quite a bit. So, that's really what I'm saying is. All the conversations are in there. This is the challenge with a term like IOT or like Industry 4.0. It means something a little bit different to everybody, so you need to peel the onion and figure out who it is you're speaking with and what's at the core for that company, where's the real value going to be.
Erik: Yeah, makes sense. Let's see. When you are helping companies to figure out how to collaborate, I think it's quite natural for people to start brainstorming also the challenges and reasons that collaboration is not going to work, especially when you get involved in areas that there's a technical laundry list of things that are not going to work in terms of integrations and so forth. Then there's the business laundry list in terms of this data, we can't — privacy issues, in terms of people also defending their business and having uncertainty around, okay, maybe this is a good idea, but we're actually not quite sure what it will look like in the real world when it scales. Therefore, there's some risk embedded in, in that possibility. How do you — as a leader who's helping companies to figure their way through this problem, how do you help them to have conversations where people are making forward progress? Is it about putting these challenges to the side in a structured way and acknowledging them? Is it saying, we'll handle those later? Is it about you helping them to come up with solutions as they go or having service partners that come up with solutions? How do you address these? Because in my experience, when you get a lot of — especially when you start getting maybe middle management and so forth together, there's a lot of people that are going to point and say, “That's a process that you're going to break that I'm currently responsible for. I'm not comfortable considering breaking that process." How do you structure those as a facilitator?
Gregg: You're really onto it. Obviously, you've been around the space long enough and on the front edge of the space enough to understand some of the inertia that sets in. Bravery is a difficult thing — trying to help leaders be brave, to push forward. But it's a little bit of what I said, the whole reason we do the You, Me, and Your Top Three Podcast is trying to put brave leaders with other brave leaders. So, that's the technique. I'll talk about that maybe, then I'll end around on some of the issues.
Inside of a firm — innovators or maybe brave leaders inside of an individual firm — there's a lot of inertia that fight inside that single firm, right? Especially at successful firm, a firm that's already finding success, asking them to behave differently than what they're already doing, that's a challenging job. I was the head of innovation at Volkswagen Group of America for quite a while. People used to tell me, "Man, you must have the best job." In many ways, I did. I got to go to work every day and dream about the future and figure out how, in this case, a lot of digital stuff — it was before the term mobility was out there — but how the auto industry was going to shift into something like a mobility industry. It was great. The challenging side is, every day I went to an office that 99% of everybody else there was focused on the automotive business. I was the one percentage trying to shape something out. That's really — I tell that story and talk about all the other folks that you probably speak with and whatnot. These are individuals inside of firms, that their responsibility is to try to change somebody who's already successful. That's a lot of inertia pulling you in the opposite direction.
So, the first piece is put them with other believers. Put them with other folks, likely from other firms, sometimes from supplier communities but oftentimes with other companies that are part of that value chain. Just get them to dream together. That will give them hope that, okay, maybe they're not crazy. Maybe they're all on the same fight. So, that's the first step of that. That's the easy step and the hardest step at the same time. But once you get them believing — then to get into some of those issues that you talked about, I mean, privacy is always the number one. Tech, that comes up somewhere and availability. But what we're finding is, there's more data than people know what to do with right now, for the most part. It isn't always the right data. But usually, there's something that can act early on that's already available. The biggest issue is the willingness to share it and the willingness to try to time that. Why would we share it to shape a new business while our current business is already operating pretty well? Because we're really preparing for the future. Privacy — people hide behind that pretty quick. You probably know quite a bit about that from a governmental perspective or spying, at least, in your geography. But privacy is absolutely one of the top pieces. How do we get around that? We talk about it. Sometimes it can be handled in a technology way like blockchain or making things non-identifiable. In other ways, it's absolutely the trust, sharing enough customer information so that you can keep the customer at the center. That's really the trick.
I'll end with this. Most firms need to realize they're competing not only with their current competitors, but they're competing with what we label ecosystem commanders. These are the Amazons, the Googles, maybe the Microsofts, the firms that touch people in multiple parts of their life and not just a single part of their life. They can really compete across the ecosystem versus just a single industry. It's easy to say, well, I don't want to change because I don't share information. It wouldn't make sense for me to share. A car company sharing the information with a hospital system, that just wouldn't be appropriate. Well, do you think that the ecosystem commanders out there aren't sharing the information? Not necessarily in a negative way, but in a, "Let's keep the customer in the center and make the most frictionless experience possible for that consumer, for that customer, for that business." They absolutely are. If these partnerships, if these conversations, if these new approaches don't come together, I think that the ecosystem commanders that are there are going to win. Oftentimes, just one of the easy tools is we ask them, "What would Amazon do?" If they can't answer, that we'll say something. If most of them can't and they scratch their head, then we need to find a way verse. You tell me all the reasons why you wouldn't.
Erik: That's a great question. What would Amazon do? It doesn't mean you have to do what Amazon does. But it means that, certainly, Amazon is doing this or somebody, some large ecosystem is using data in a certain way. People are accepting it to some extent because it provides value. In my experience, consumers — whether it's business or consumer — are often okay with data exchange if there's some transparency around it and if they understand what you're doing and why you're doing it, and that it's providing value. It's more of a surprise when they realize you've been using data in some way that they were completely unaware of. All of a sudden, it basically leaks. It feels like you've been hiding something under the carpet. That tends to be when companies get in trouble. Having those conversations upfront also with your customers is important. You're running this community now, this ecosystem around helping companies to collaborate. Is this open? If there is somebody listening who is interested in participating, is it possible? Have you sealed the walls around a certain group that's already participating?
Gregg: No. I mean, it's an ever-changing group. So, we've got about somewhere between 30 and 40 active organizations involved from big telecoms to manufacturers, to people that move goods. We try to make it really around a physical product because it is Industry 4.0. But as I said, like a health care company, they're not making many physical products, so they're on the edge helping the ecosystem. But people, absolutely, leaders inside of organizations are absolutely invited to reach in. I think at the end, we'll probably talk a little bit about the contact information. They can reach out to me, and I can get them in touch with the right folks. It's a little bit of a curated group, startups. We certainly wouldn't say no, but when you put birds of a feather and you have a 10-person organization next to 100,000-person organization, the balance isn't there. We do startups to try to solve some of the solutions. But if you're an established company — if you're working in the design, the making, the movement, or the usage, or the recycling of goods — and you think this is interesting, absolutely, we'd be interested in hearing from those organizations to see how we can plug them in.
Erik: Yeah, excellent. Well, what's the best way if somebody wants to get in touch with you around this or another topic? What's the best way for them to reach out to you or the team?
Gregg: Yeah, fantastic. So, maybe two pieces — the team, the organization. That's CGS Advisors. It's simply www.cgsadvisors.com. I'm sure we'll get in the show notes on both of them. As far as me, personally, you can find me in two ways. One, you can absolutely email me, email@example.com or you can get me on LinkedIn. I've got a public profile there that is pretty easily found. We'll get that in the show notes as well. How about you, Erik? Maybe I can turn it around just for those that are listening and would like to think about if they've got opportunities in the Asia PAC region, specifically in China, which is really your specialty. A lot of North Americans are listening to this, if they want to plug in over there, what's the best way to get in touch with you?
Erik: Yeah, same deal. So, you can always learn more about us at iotone.com. You can certainly email me at — my name is a bit cumbersome — firstname.lastname@example.org or find me on LinkedIn. I really love to have conversations with people. If anybody just wants to — I mean, it doesn't have to be to discuss a project or anything too tangible. If anybody wants to just have an exchange, I always welcome that. I think, even in this world where there's basically unlimited amount of content online, often the most valuable way to spend your time is just having a one-on-one conversation and learning about somebody else, learning how they think. Gregg, I really appreciate you taking the time to talk to me today. I think this has been really interesting. I look forward to future conversations with you.
Gregg: Hey, I fully agree that just having a conversation, that's how this whole thing got started. I appreciate you having that conversation, and this one as well, Erik. Appreciate you being here.