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Decoding Digital Heroes: Cultivating the People that Drive Innovation
Episode 329th November 2021 • Decoding Digital • AppDirect
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If one thing is clear about digital transformation, it’s that people power drives it. But how do you inspire, empower, and cultivate these key changemakers?

Authors of “The Transformation Myth: Leading Your Organization Through Uncertain Times”, Dr. Gerald Kane, Boston College Professor, and Rich Nanda, US Monitor Practice Leader, Deloitte Consulting, join this episode to share their insights. Listen to hear their thoughts on what leadership and culture characteristics enable digital heroes to thrive and how to start a transformational flywheel.

Press play to hear their thoughts on…

The Advantages of Legacy Companies 

“I think traditional legacy companies have several inherent advantages. They have scale, they have supply side advantages locked in. They have long-term customer relationships to build upon. They have IP that's been developed over years. But the key is that the shelf life of those ideas isn't as long as they used to be in a world that changes so often.” 

—Rich Nanda

The Near-Term Future 

"The next three to five years are going to be among the most exciting and disruptive periods in our lifetimes. Companies who have learned to innovate and are rethinking the workplace are going to unleash new competitive capabilities. We ain't seen nothing yet, to quote the phrase."

—Gerald Kane

The Importance of Vision  

"It's a myth that technology is some kind of silver bullet. People think that, buying fancy technology, partnering with the cool tech companies, all of a sudden change is going to happen. But one of that's possible without the right purpose and vision."

—Rich Nanda

Click here to download The Digital Hero Mindset: The Traits People Need to Innovate in a Technology-Driven World


Transcripts

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For digital heroes to thrive,

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they really need to be in an

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environment that is supportive

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of them. Create opportunities to

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find those people in your

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organization. Find the people

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who want to be part of this

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change.

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It does come back to the right

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mindset, the constant

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willingness to experiment and

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understand how digital

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innovations will impact the

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company.

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Earlier this year, I sat down

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with Dr. Gerald Kane, professor

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at Boston College, an expert in

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how organizations respond to

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digital change. Since then,

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we've collaborated on a research

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report, "Digital Hero Mindset --

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The Traits People Need to

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Innovate in a Technology Driven

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World." The report looks at the

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traits that define the people

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who are the most effective at

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driving digital transformation,

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or as we call them, digital

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heroes. On today's show, Gary

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and I are joined by Rich Nanda,

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principal at Deloitte Consultant

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to take a deep dive into the

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results of the report. We also

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talk about the related findings

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about digital leadership from

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their new book, the

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transformation myth, leading

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your organization through

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uncertain times. It's a wide

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ranging conversation that

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details why today's digital

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transformation is more difficult,

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why there's going to be an

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explosion of innovation over the

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next three to five years, and

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the traits that people need to

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navigate these changes

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affectively. This is Daniel

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Saks, Co-CEO AppDirect. It's

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time to decode how to cultivate

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digital heroes. Welcome to "

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Decoding Digital," a podcast for

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innovators looking to thrive in

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the digital economy. I'm your

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host, Daniel Saks, and I'll sit

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down with other founders, CEOs,

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and change makers to decode the

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trends that are transforming the

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way we work. Let's decode. Gary,

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great to have you back on the

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show, and Rich, so excited to

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speak with you today. A lot of

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exciting things happened since

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we first chatted with Gary. We

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co-developed a report called the "

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Digital Hero Mindset -- The

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Traits People Need to Innovate

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in a Technology Driven World."

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The collaboration provided so

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many insights that we wanted to

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have Gary back on the show today

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to speak to the report. We're

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also really grateful to have

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Rich with us today who's going

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to share his knowledge from his

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collaboration with Gary on their

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own book, "The Transformation

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Myth -- Leading Your

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Organization through Uncertain

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Times." With that, really

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excited to kick off this podcast.

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Gary, one of the things that was

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super interesting that we've

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seen is that regardless of what

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type of company you come from,

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whether it's a technology

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company, a legacy company, a

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fast grower, really

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transformational change comes

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down to people. We've identified

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certain characteristics of those

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people that increase the

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likelihood of them to be

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successful. Can you share some

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of the insights that you had

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from interviewing digital heroes

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for the report?

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Absolutely. I think the first

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thing to point out is for

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digital heroes to thrive, they

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really need to be an environment

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that is supportive of them. What

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we found was that there was this

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recursive relationship where we

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call it the flywheel in many

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organizations between the

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individual characteristics of

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the digital heroes and the

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organizational environment.

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Then they feed off each other

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and gain momentum. A couple of

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things we found was first,

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having and communicating a

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vision really enabled two way

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transformation, like top down

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and bottom up. I'm going to

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quote from Patrick Pichette,

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who's the chair of Twitter, that

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these digital heroes can see the

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future and they believe that

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this future is better. When

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they can communicate that future

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to the people in the

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organization, people are willing

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to sort of get on board and help

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make this vision happen. The

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second thing we found was that

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curiosity of the digital heroes

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really leads to a healthy level

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of risk tolerance. When we talk

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about curiosity -- and I was

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reminded from the interview with

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Helene Barnekow, who's the CEO

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of Microsoft Sweden -- it's a

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disciplined curiosity because

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curiosity isn't enough because

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our day-to-day tasks will crush

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us with the things we need to do

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to keep our days going. Making

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sure we find time to be curious,

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and what happens is, as we find

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time to be curious and

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organizationally curious, it

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shifts our mindset from success

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or failure to what can we learn

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as a result of these experiments,

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and as a result of this

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curiosity. The growth mindset

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is a theme that ties together

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both the report we did and the

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book we did with Rich. Third,

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this passion for the mission

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turns the organization into a

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talent magnet. Dax Dasilva, the

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CEO of Lightspeed says that

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those who make the most change

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are those that are driven by

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passion. They make that change

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because they get other people

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excited about that change. That

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could be positive passion, where

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you see a vision and you're

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excited to make that happen, or

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Jim McKelvey at Square said that

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can also be driven by negative

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passion. I'm really upset about

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something I see happening out

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there and injustice in the world.

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We want to work to make the

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world a better place as a result.

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Last but not least, we found

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that of the digital

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heroes creates a bias towards

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action and iteration. Lee

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Lestadi, for instance, said,

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we're going to keep believing

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there's a better way to do

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something. The path isn't going

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to be straight enough into the

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right. It's going to be zigzag.

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It's going to be hard. These

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digital heroes keep at it. They

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don't spend time thinking about

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what next, they spend time doing

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and then reflecting on what

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works so they can do something

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else, and that action

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orientation. It's these

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characteristics between the

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digital hero and the

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organizational environment that

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they're bedded in that gets this

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flying wheel of change going,

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gets the momentum going that

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really enables the

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transformation in companies.

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Rich, you work with companies

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all the time that are really

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trying to uncover this

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transformation, I know you wrote

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about it in your book. What

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examples have you seen of

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leaders that have driven these

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characteristics to drive

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transformational change?

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Look, I like to characterize a

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lot of what Gary was talking

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about. There is a growth versus

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a fixed mindset. Really

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understanding that change

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creates upside, innovation

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creates new lanes to play in.

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Leaders that bring that growth

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mindset, they're going to create

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experimentation. They're going

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to allow for higher degrees of

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risk. They're going to find that

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flywheel that starts to turn.

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Positivity in that creates more

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opportunities and it sort of

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snowballs on itself. One leader

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that we spoke with as part of

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the book, Rajeev Ronanki at

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Anthem, he was brought in as

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their chief digital officer.

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This is a very traditional old

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health plan company that

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effectively tries to help

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patients and providers connect

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to each other. The information

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flow about how appointment gets

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done, the financial flows. It

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doesn't get more legacy than

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oiling the US healthcare system.

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Rajeev came in and he had this

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idea that they needed to be a

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data and an intelligence company.

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If they did that, they would be

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able to provide better care to

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patients, and they would be able

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to match providers with great

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patients, and make those

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providers' life more efficient

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and more profitable. Sure

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enough, it paid off. Years ahead

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of the pandemic, they started to

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actually invest in their data,

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invest in artificial

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intelligence to help manage and

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understand that data. When the

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pandemic came, one of the first

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things that happened, there was

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this phenomenon where patients

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that needed care, they weren't

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going in to providers because of

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fear of the virus of the

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pandemic, and they were missing

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out on really important care.

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Anthem was able to use AI to go

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find those patients and nudge

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them to say, "Hey, you got to go

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in and get this care. Here's

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places you can go that are safe.

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Here's telemedicine options that

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are safe. It's only because

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Rajeev had that vision of being

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a data-driven company, and

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getting ahead of that digital

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transformation was that growth

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mindset that was able to get

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care to those patients in a very

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impactful way during a difficult

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time.

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That's a great example. One of

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the things that we found when

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looking at the report around the

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Digital Hero Mindset is beyond

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the traits that people may have

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and beyond their ability to be

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really successful. There's also

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organizational factors that

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would influence their ability to

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drive this change. Gary, what

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did we find about really the

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culture that can enable people

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to drive this change and

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ultimately become an amazing

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digital hero?

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The way you make this happen is

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first to find the digital heroes

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of your organization. I

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guarantee, every organization

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has people who have that growth

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mindset who see that future,

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that Patrick Pichette talks

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about, and believes that it can

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be better. It wants to be part

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of an effort like that. The

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first thing is create

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opportunities to find those

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people in your organization,

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whether it's through an internal

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innovation incubator, whether

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it's through hackathons, whether

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it's whatever format it comes,

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find the people who want to be

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part of this change. Then the

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second thing is protect those

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people from the organizations.

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Jim McKelvey has something

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interesting. He talked about one

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organization he was working with.

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He encouraged them to give their

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innovators a one get-out-of-jail

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free card, where I'm going to

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break organizational rule for

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the effort of innovation. You

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get a little bit of that, not a

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free pass, but the opportunity

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to change things, because your

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organization does want to kill

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innovators. That's just every

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organization is built that way.

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How do you create an environment

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where we can protect them?

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Third is it really need to start

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small. Starting small innovation

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teams. Start with small groups

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of people who want to make this

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happen in short bursts, six- to

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eight-week initiatives, to try

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to move the needle in some small

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way that matters for your

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organization. Then the trick is

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repeat. So many companies do a

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six- to eight-week innovation,

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do a hackathon, they pat

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themselves on the back and say, "

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Look at how we're innovating.

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Aren't we doing great?" Those

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small changes aren't going to

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lead to transformation unless

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they can get that flywheel going

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and finding that the next set of

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digital heroes who want to be a

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part of that, building momentum

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through those small wins and

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through those successes,

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publicizing them, sharing them,

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celebrating them and get more

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people on board to making that

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happen. That's how you sort of

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get that momentum going for

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transformation to really happen

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within their companies.

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Attracting talent seems really

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core to that. One of the things

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we've seen in the industry as of

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late is the great attrition, so

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many organization losing talent

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for a variety of different

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reasons. Gary, what can

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companies do to better attract

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and retain their digital heroes?

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I think we are at an

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unprecedented juncture and I'm

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sure we've heard the term

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unprecedented a zillion times

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over the last 18 months. We sort

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of have a timeline of when

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business will be going "back to

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normal," or when that

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opportunity will be. When we

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published our book, we thought

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that was going to be September

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of 2021. Now it's looking like

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it might be closer to January

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2022. The exact timing doesn't

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matter. We have a couple of

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months to a year to decide what

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we want our organizations to

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look like. What level of hydrant

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work, what level of in-person,

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what types of tasks are

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appropriate for virtual and what

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types aren't. This is something

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we deal with in the book. For

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the organizations to take a step

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back and say, what type of

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working environment do they want?

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More importantly, what type of

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working environment do the

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employees we want to attract

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want to have? Because we've

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seen the virtual environment has

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enabled, particularly tech

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companies, the ability to

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attract much more diverse

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talents because they're not

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limited to talent on Silicon

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Valley. Or an unprecedented

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opportunity to strategically

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think about what type of

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organization you want to build

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that's going to be able to

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attract the type of talent you

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want to get. That's going to be

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appealing to the type of

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customers you want to attract.

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You have the opportunity now to

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think through and intentionally

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craft that organization without

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the level of resistance that you

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would have at any other time. I

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hope leaders, don't just say, "

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OK, we're just going to wait

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until January 2022 and then life

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will be back to normal. I think

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that that's a real mistake. I

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actually think because of these

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changes, the more significant

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disruptions are still in our

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future. I think the next three

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to five years is going to be

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amongst the most exciting and

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amongst the most disruptive of

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any of our lifetimes as

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companies who have learned to

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innovate, who have developed new

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capabilities are rethinking the

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workplace are then unleashed

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with these new competitive

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capabilities. I think we

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haven't seen nothing yet to

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quote phrase.

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We've gone through this

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unprecedented disruption, so

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transformation and growth

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mindset and change is super

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critical. Your title of the book

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is the transformation myth. Rich,

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what were some of the myths that

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you found?

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The overarching myth is that

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transformation is a one and done,

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it's a project, it's an event

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that has a start and finish.

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What we hope the readers of the

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book appreciate is that

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transformation is actually an

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ongoing capability. It's how

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innovation happens in the

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company. They have to position

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themselves, their mindset, their

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talent for this continuous state

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of transformation. That's always

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been the case to some degree,

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but it's especially the case in

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an uncertain and fast changing

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environment, which is what we

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have now for decades ahead is

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what I would guess. Then

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there's some other myths that we

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try and debunk in the book. The

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first is that technology is some

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kind of silver bullet, and by

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buying fancy technology,

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partnering with the cool tech

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companies, all of a sudden

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change is going to happen, and

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good benefits are going to

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accrue to the company. None of

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that's possible without the

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right purpose and vision for

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where the company's going,

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without the right articulation

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of strategy and how technology

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opens up new strategies or

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fortifies existing strategies,

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or without people, customers,

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colleagues that are adopting and

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using that technology in a

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different way. That's another

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myth is that it's all about the

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technology. Another favorite of

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mine is that digital

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transformation is the CIO or the

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CTO's job. This is ultimately

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the CEO's job, but the whole C-

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suite and their teams have to

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rally around digital

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transformation. There has to be

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tech fluency. There has to be

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an understanding that how we

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grow, how we compete in a

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digital world requires

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technology. We can't ask one

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executive in one function to own

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that on behalf of the company.

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Those are a few that are my

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favorites from the research that

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we like to talk to clients about.

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It seems like risk always comes

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to play. When you're a large

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organization with an incumbent

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brand and a lot of revenue and

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an incumbent customer base,

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taking the risk to drive these

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transformations can sometimes be

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hard for the company to embrace

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and, therefore, the culture

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tries to spend more time

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protecting what's there versus

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building for the future. What

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examples of good leadership have

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you seen that have balanced both

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the protect the core mantra from

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find the next thing that's going

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to drive the transformation?

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Fortunately, and Gary I'd love

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your thoughts here too, we had a

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bunch of good ones that we were

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able to include in the book from

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Fortune 500 companies to...We

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had McDonalds in our book, which

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is again, a very longstanding

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company with a franchise

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business model that has served

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them very well over time.

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They're looking to apply

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technology into the customer

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facing aspects of the

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restaurants in a very different

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way, and to get not only the

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corporate team on board that we

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have to have AI in our

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restaurants. We have to have

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differentiated customer

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experiences. Then to get the

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franchisees, a whole different

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set of owners and stakeholders

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on board. Yeah. That's a lot of

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change and alignment that has to

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happen. The stick-to-itiveness

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that we learned about from the

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McDonalds story was so

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impressive. What they never

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lost was the purpose, which is

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we have to keep providing

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quality experiences to guests,

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regardless of the circumstances.

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Our guests now are accustomed to

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things like online ordering,

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click and collect, getting

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quality food delivered to home,

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just as much as it is in the

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store. That requires a

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different level of customer

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interaction and operational

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interaction. I would look at

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that McDonalds story from the

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research as a pretty interesting

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one.

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Yeah. I have a couple of others

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because I think, Dan, what was

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really interesting and a silver

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lining of the COVID is,

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innovating sometimes was

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required to protect the core

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business. Nothing motivates

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companies like to protect that

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core. Another great example is

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Marriott. Marriott experienced a

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90 percent drop in demand. Their

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core was shattered. What do they

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do? They pivoted their entire

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call center to support the state

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of New York processing the

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hundred X increase in

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unemployment claims. They just

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basically took this resource

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they had and repurposed it to

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solve a problem and to keep the

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people employed. They could do

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that because they had the

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digital infrastructure to make

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it happen. The last example

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that I geeked out on from the

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book was Hitachi Ventura. They

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basically had created a factory

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system by which they had sensors

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in place to monitor the

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production in factories. Over

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the course of two weeks, they

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were able to use AI to develop

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new software, to then turn that

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sensor network into social

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distance monitoring, to monitor

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the temperature of their

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employees so they could get back

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to work on the factory floor in

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a much faster way. As you

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digitally transform, it creates

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what we call some digital

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superpowers of scalability,

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optionality, nimbleness, and

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stability that really enables

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these organizations to have some

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new strategic capabilities that

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they can leverage in the

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marketplace. It's not the

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technology alone, but it's about

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the capabilities of the

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superpowers that these

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technologies enable.

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One of the common themes of the

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research that we've found is

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that transformation is not a

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technology problem. It's a

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people problem. How do we

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educate the next generation of

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these transformative people with

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a growth mindset and really

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enable a broad generation of

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digital heroes.

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That's a great question. I think

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the hope is as we create more

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digitally mature organizations,

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that they will be immersed in

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environments where they can

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begin to learn these skills. If

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you are an environment that

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encourages a growth mindset

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rather than tries to crush it, I

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think that people are going to

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be able to sort of recognize

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opportunities for innovation.

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In our research, we asked how

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you learn things and how do you

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keep your skills up to date? 90

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percent of people, this was pre-

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pandemic, said we need to keep

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our skills up-to-date at least

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yearly, and 50 percent said

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continually to stay relevant to

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the digital world. We asked how

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you did that, and training was

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actually a very small portion of

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that. It was more about creating

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a work environment that enabled

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you to develop new skills and

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new capabilities and put you in

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to new challenges. Rather than

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sort of the steady step up the

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organization where you've

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climbed the ladder, we've seen

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some companies move to a tour of

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duty model, where employees will

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spend three years in a

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particular job and then move to

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something else entirely within

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the company to begin to round

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out those skill sets, to bring a

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beginner's mind and a fresh eye

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to new problems. I think skills

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and classes are great, but

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creating a learning organization

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is really what's key. That again

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is starting from the top, from

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the CEOs that really push this

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growth mindset, but then create

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an environment where that

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mindset can flourish.

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Especially in this kind of great

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resignation era then, once you

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get those people in the door and

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you can attract them because you

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have the growth mindset you're

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going to allow for innovation,

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they have to be empowered.

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Suffocating those people or

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frustrating them by not

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empowering them to experiment

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and grow, or by having

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overbearing management systems

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that boggling down. We're seeing

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it quite a bit in this era right

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now, where employees are feeling

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very empowered and what has to

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be something where they're

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seeing the reward, the fruits of

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their labor impactful and paying

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off.

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What I find most encouraging and

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exciting about all this research

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is that truly anyone can be a

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digital hero and people can take

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the lessons to be able to

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succeed. That makes our

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organization's diversity

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stronger and more important and

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the importance of having an

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inclusive culture now much more

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important. It's incredible that

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we're working to a world where

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people will have equal

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opportunity and equal access to

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what they need in order to

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thrive. Therefore, it's really

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on the individual to be able to

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build this mindset and these

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skill sets to be able to drive

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transformational change. I'm

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super optimistic about the

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future, but maybe just in

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closing, Gary, what are you

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worried about 10 and 20 years

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out in terms of technology's

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ability to impact society?

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I think we're dealing with a

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couple of questions right now.

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I've interviewed one CEO of a

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large insurance company. I

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always conclude my interviews

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with, is there anything I should

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have asked, but didn't? He said,

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I think the thing you should've

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asked, but didn't is, are we

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really thinking about what the

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world we want to create will

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look like? It's like we've seen

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digital technologies create

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massive inequalities and create

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a lot of problems in society.

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Facebook is right now on the

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chopping block for all sorts of

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things. Some of it's fair and I

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think some of it's not fair. I

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think some more we can think

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about what is the role that we

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want technology to play? What

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type of society do we want to

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build with these technologies?

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Not just sort of a race to say, "

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Who can get the most money? Who

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can get the most eyeballs? Who

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can get the most...?" And really

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get down to a small number of

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winner takes all, can we take a

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step back and use this

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opportunity? I do think it's a

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real opportunity to say, over

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the next 3, 5, 10 years, as

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business leaders, and as we did

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the book, I was so inspired by

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the leaders we spoke to and how

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they were called the golden age

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of corporate leadership. Because

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I think we really saw corporate

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leaders do some remarkable

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things over the last 18 months.

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Actually we had a series and the "

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Wall Street Journal" profiling a

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number of the people we did

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interview, because we just

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couldn't fit it all into the

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book. That's available on my

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website, and then Deloitte has a

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landing page that I assume we'll

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put it up there so people can

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access it. It's spending the

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time. What is the role we want

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to create in 10 to 20 years

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using these technologies? I

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think we have the chance to make

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those decisions now. I think if

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we wait too long, if we wait the

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five years, we may end up with a

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world that's really cool with

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shiny technologies, but not one

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that's really great to live in.

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As we conclude, is there

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anything I should have asked but

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didn't?

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Look, I've really liked this

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last topic on things to worry

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about. I do think thinking about

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responsibility and ethics. We're

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in an environment right now

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where we talked about purpose

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around vision and why, but

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purpose connected to ESG, kind

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of how companies are going to be

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a source for good, responsible

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outcomes, ethical outcomes.

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It's tough to think about the

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second, third, and fourth

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derivative of decisions we make

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today about technology and what

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might happen. That's another

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discipline companies have to

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really instill. I think if

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Facebook knew where the third,

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fourth, and fifth derivative of

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the social media platform they

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created, they might've made some

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different decisions a few years

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ago. How do we start to

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forecast those derivatives of

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decisions we make today? That I

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think is maybe a topic for a

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whole separate podcast and maybe

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a book, Gary.

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Hmm.

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I'll take you up on that, Rich.

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As always, this was an

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incredible conversation, really

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inspiring just to know that the

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research validates that truly

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anyone who wants to develop and

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has these certain set of

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characteristics can be a digital

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hero and can make

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transformational impact on their

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organizations and the world.

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Thanks to both of you for

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joining.

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Thank you, Dan. Thanks for

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having us.

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To learn more about the findings

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from the Digital Hero Mindset

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report, visit decodingdigital.

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com/report. Thanks for

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listening to Decoding Digital.

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Make sure you never miss an

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episode by subscribing to the

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show in your favorite podcast

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player. To learn more, visit

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decodingdigital.com. Until next