Skills for Tomorrow: Navigating the AI-Driven Workforce

Patrick Moorhead: The Six Five is On the Road at Cisco Partner Summit in Los Angeles. Dan, it has been a whole lot about surprise AI and everything that Cisco is doing in the context of doing business with its partners.

Daniel Newman: Yeah, it’s a really important part of the Cisco ecosystem. I think the number was something like 89% of the revenue, $50 billion goes through its partners ecosystem. Pat, one of the biggest and most productive machines in the entire world when it comes to building partners, building channels has always been Cisco. And yet, you’re right. They’re at this inflection. We’re at this AI moment and it’s being rethought. And a lot of that’s happening right here in LA.

Patrick Moorhead: That’s right, and whether it’s networking, security, data, and everything in between. We even heard about compute and one of our favorite topics, chips, which was great. But the bigger topic has been, what can we do with AI? And then what does it mean to the workforce, right? There’s skilling. There’s up-skilling. And I can’t imagine a better person to talk through that. Welcome to The Six Five. Have you been on this show before? Because I feel like you have, but maybe it’s-

Francine Katsoudas: It’s been a long time.

Patrick Moorhead: Maybe it’s because we have met so many times, but welcome to the show.

Francine Katsoudas: Thank you.

Patrick Moorhead: Or welcome back to the show.

Francine Katsoudas: Thank you.

Daniel Newman: Yeah, I really enjoyed having the chance to listen to the executives, including yourself. We had some time as analysts with the executive panel. A number of questions actually came your way. People are thinking about work, skilling, up-skilling. What’s next? And you sort of heard my little introduction. That is the big thought here, that partners need to re-skill. They need to prepare. You’ve seen Cisco move over 50% recurring revenue now. The business has changed. They need to change with you to stay successful. How are you thinking about a future with AI and its impact on the workforce?

Francine Katsoudas: So the first thing that I’d say is that I think we’ve recognized for a long time that technology is moving faster than people. And I think we accepted that to a certain extent. And recently, I think there’s this realization and this worry that there’s a lot more structure we’re going to have to put in place to ensure that our people can move with the changes that are coming. And what’s so interesting is across industries, I see a lot of worry. I see a lot of partnership as a result of that, which is really good. So from a Cisco perspective, we’re partnering with a lot of our peers, and in some cases, some of our competitors, if you will, to really come together and understand how do we prepare the workforce? How do we get skills to people in an easier way?

By the way, there’s an AI solution for AI that we’re going to have to work through. And then given that we’re here at Partner Summit and the big announcement that we made yesterday, which is a commitment to invest $80 million in helping our partners continue to build the skills and capabilities that are needed, we think it’s an exciting time. I think we’ve been trying to crack this nut for a long time, and we haven’t had the success that we want to. And I think now, the ironic thing is the technology is going to help us to do just that.

Patrick Moorhead: Yeah, and it’s important. If I look at, I grew up in the Midwest where a lot of jobs moved and people didn’t re-skill. It became a pretty big societal issue. And all the research that we’ve either done or we’ve seen say there is a fear out there. And there’s definitely two sides to the coin here, because I do remember even back in the mid-’80s when desktop publishing meant that we didn’t need any more creatives anymore. And even in programming, even back when we were doing machine coding and then COBOL comes out, oh my gosh, we have COBOL. We don’t need any programmers anymore. And every successive generation of new technology that was going to eliminate all these jobs, we never ended up having enough of those jobs. So I’m curious, any specific, let’s say jobs or role types that you can see, let’s say at the tip of the spear that need to be up-skilled or re-skilled?

Francine Katsoudas: Yeah, there’s quite a bit. In the AI ICT Consortium work that we did, which is part of the EU-US Trade and Technology Task Force, we actually saw that 92% of roles from a technology perspective will be moderately to greatly impacted, which is pretty amazing.

Patrick Moorhead: It’s a pretty high percentage.

Francine Katsoudas: It is. You see roles like a business analyst. That’s a really good example of a role that’s tip of the spear and is going to change pretty significantly because a lot of the role in the past was doing the research, which is now so easy for people to get. So some of the work that’s happening behind the scenes at Cisco and I think more broadly is this conversation around, okay, so what are the skills needed for the role? And then how many people will you need? And so if you have 300 people doing that today, how many will you need? And what are the skills that are needed in another part of the company? And to almost create this adaptive model that I don’t think we’ve ever seen before.

Patrick Moorhead: Yes, a great industry top-level discussion so far. Let’s talk directly about Cisco. What are some of the programs and strategies that you’re putting in place? By the way, I want to reflect that it’s all new. We find new things to do with AI every month, every three months. So you’re almost trying to build a new railroad as it’s moving down the line here, and business can’t stop. You can’t just call a timeout. We’re going to do business transformation and start over.

Francine Katsoudas: Okay, so I’ll share just a few things that are going on at Cisco. But first from a context perspective, what we’ve seen with AI is that largely the conversation is top-down. So you see a lot of CEOs in particular their teams to use AI. And I think Chuck talked about this yesterday, that pressure is coming down. But the use cases, especially if you look back over the last, I would say 18 months, have been a little slower to come. So what we’ve done at Cisco is we’re trying to take both a top-down and a bottoms-up approach. And so there’s one experiment in particular that we run where we have trained a set of employees, helped them to get their green belt from an AI perspective, and then basically said to them, “Tell us how you would change your role. Tell us what you would do differently.”

And now we’re capturing hundreds of ideas from our people. The beautiful thing about that is when you do that, I think you reduce a tremendous amount of fear in the company because people understand, oh, wait a second, I can use this to scale my job. It’s not taking my job. And we know there’s going to be a variation as it relates to how AI is going to impact roles. But the bottoms-up is a big differentiator for us. The second thing that I would say, which is kind of fascinating, is that there’s some interesting AI use cases around well-being. And I think the use cases right now are not there, but the next generation is fascinating. So there’s a subset of employees that have basically volunteered to tell us how they’re doing, and we ask them questions. Hey, how are you? Did you get good sleep last night? Blah, blah, blah.

Patrick Moorhead: Interesting.

Francine Katsoudas: And when they answer, we push them the resources that are most important. When you start to intersect the loneliness epidemic that is out there, the power of AI to check in with people and provide resources starts to showcase from a people perspective, there are some really interesting use cases in our future.

Patrick Moorhead: By the way, I kind of get into these health devices. Maybe I can plug myself into the AI, and it can tell me what to do. I don’t know. I’m intrigued. I have not heard of this use case, but I’m going to check this out.

Daniel Newman: Pat used to be notorious for having views on tech. Now he’s just the health guy. But it’s interesting that you were kind of talking about the human element of it and the people element and how people are feeling. In a world where we’re so connected, there is this kind of loneliness. We’re all a little dopamine-addicted now. We’re all kind of constantly checking our signal. We kind of laugh at times about getting away. I’m interested. You sort of indicated this, but more at scale as chief people officer, what’s your feeling of the sentiment of an org right now as people are watching this tech barrel down the proverbial rails that Pat talked about? What’s your feel? Are people nervous?

Francine Katsoudas: Yes, and I think they were more nervous two years ago. And so what that tells me is with additional proximity to technology, with additional use cases and understanding, that they’re getting more comfortable. Just like everything else, I don’t think there’s going to be a standard way in which AI impacts roles. And so it’s going to be different. It’s going to come at a different speed org by org, but I feel like there’s more comfort. I also think that there’s a realization now that we can leverage AI to be more human in the workplace, so things like we all learn differently. I’m a very visual learner, as an example. A lot of training isn’t really meant for me today. In the future, it will be. And so I think we’re going to be able to take a lot of what we do and customize it to people. And so my hope is that as we go through the journey, as our people are able to experiment and learn more, some of that fear is going to subside.

Patrick Moorhead: Francine, you and I, when we first met, I don’t know exactly year or date. Was it a decade ago or five?

Francine Katsoudas: I think it was 10 years ago, yeah.

Patrick Moorhead: Cisco had been building, if I look back, I need to be careful my words as an analyst, a super impressive internal platform to gauge the heartbeat of your organization. Is this where you’re getting a lot of this? Are you leveraging that platform to see where they are in the context of AI?

Francine Katsoudas: Always, and the first time that we met, I think we also focused on the role of leaders in this sensing and gathering. So you have your formal elements of listening and then you have this critical role of the leader. And I think I’ve said this almost every year now for the past decade, the role of the leader becomes more and more important. For this topic, having a conversation with your team about where you see roles going, the skills that you think are most important, I think that’s going to be incredibly important. And then I think as we have been, we’re going to have to be open to the fact that what matters to our people is going to continually evolve. And so Patrick, some of what we did a decade ago, at the time, it was good, and we have to change.

Daniel Newman: It never really does sit still. A little bit like technology, leadership in the era of technology has to sort of flow along with it. I imagine that knowing how fast, I don’t know if you all remember the law of diffusion of innovation and the amount of time it takes, and we’ve all seen these trend lines, and disruption to disruption used to be decades. Then it was a few years. Now it feels like every few months, there’s something new that’s come out. Leadership has to move this fast. So how do you sort of envision this AI powered workforce in the future? What do you recommend to leaders of your partner organizations and of course within the Cisco organization to succeed here?

Francine Katsoudas: So two things, the first is sometimes I get a little bit hesitant around, should we pull our leaders together to talk about this? And it’s funny because every time we do, our leaders go, “Thank you. We needed that.” So I think we have to lean into communication even more than we’re comfortable with. The second thing is we have to rethink training. This is how we’re thinking about it internally and with our partners. I would say the approach that we’re taking to our partners is the exact same content we’re using internally. So we have done away with having different organizations building content. So it’s one organization now. What was so fascinating is the training that we use for communities around the world, our Net Academy model, was a model where you would drop in the least amount of training to help someone land a role, and then they would build from that.

It’s kind of the opposite of what we’ve done within corporations. I actually think we need to adapt that type of model internally where you basically look at someone and say, “Hey, for the next role, you just need to focus on these two areas, and that’ll get you enough for the next jump. And then from there, you’re going to do something different.” And so I think we have to look at it from a bite-sized chunk perspective and not look at it as a big bad training curriculum. Because to your point, things are moving so quickly.

Daniel Newman: There was something along the lines that I remember, there’s these videos called Shift Happens. I’m sure you watched them over the years, and they talked about if you went to school for computer science, by the time you entered your second year, everything you learned had already become obsolete. By the way, these were 20 years ago. Now it’s happening so much faster, but I really did love that she brought up the idea of people getting together. Because I can tell you, I have people on my team. I’m a little introverted, and so I’m not always a huge fan of the get-togethers. And they’ll be like, “You’ve got to get the team together.” And every time you do that though, you tend to come out, and everyone’s like, “There was so much.” And so you can’t do everything on meeting apps. Sometimes you just need to get into groups, which by the way, I think that’s why events came back in such a big way.

Francine Katsoudas: Absolutely. It’s so funny, because I think today, we want things to be this or that, everything virtual, everything in person. I don’t think that’s practical. I think we need to have the wisdom to know that for some of our teams, they’re going to need the more frequent face-to-face touch points. You’re going to need conferences to have the connects and the conversations. On the way here, someone pulled me aside with some feedback around something we need to do better. If we were in a big virtual session, I don’t think I would’ve heard that. And so I do think we have to find that balance.

Patrick Moorhead: Well, and there’s just this human nature. Again, I know G2 is working hard to make the virtual experience more lifelike, but it’s a long pull. And Cisco said that five years ago, even when we were in the midst of the pandemic. I want to drill down on something that you started talking about, which was how leaders can pivot from thinking about titles and roles to skills. I think I’ve heard that for a long time, and the ultimate futuristic scenario is that we’re bringing teams together based on certain skills, and we just go get stuff done. But how do large organizations do that? How do leaders perpetuate and magnify and just make it the way of doing business?

Francine Katsoudas: So the reason that it doesn’t happen today is that large scale corporations don’t always have a good understanding of the skills of each individual or team. So you have that challenge, which is, I can’t really see the skills of that team. The second thing is it requires leaders to take a bet on folks, because I think there’s been this comfort level in the past that if I’m hiring for a cybersecurity analyst, I want someone who’s done the role before and I’m not as interested in the skills. That’s a little bit of something we’re going to have to break.

Right now, we have an example at Cisco where a team is moving from the engineering organization to our CX organization. It’s a team of 100-plus people. This, to me, is one of the really cool examples of what I think the future is going to look like. So Patrick, what we’ll need to have, and I think AI ironically will help us with this, is we do need to have a better understanding of the skills that our people have. Today, a lot of companies look externally sometimes to understand their skills of their people. Then the secondary thing is we’re going to have to train leaders now to really distill skills and to be willing to take a bet on someone internally than they would on someone externally.

Patrick Moorhead: Yeah, and you’ll also have to come up with the equation, for lack of a better term, that says, “These types of skills and even personal characteristics led to an outcome that we wanted. Then, did they do it with style?” Meaning, is everybody worn out after they’ve achieved this? And that’s okay. Or as an organization, that’s not okay. We want to have an energy level that’s 50% after we’ve climbed this Mount Everest, and we’re looking to the next peak. So I can imagine those algorithms would be, as long as you’re capturing that data, AI actually should be pretty good at figuring out the types of skills that get you the outcome that you’re looking for as a business outcome, but also as a human outcome.

Daniel Newman: Sounds like a real world generative pivot table that could be created that would help all of us make better decisions more quickly.

Francine Katsoudas: You’re absolutely right.

Daniel Newman: Francine, I want to thank you so much for joining us here today. It was a lot of fun, appreciate you having us here in LA, and look forward to chatting again soon.

Francine Katsoudas: Thanks so much, great to be with you.

Daniel Newman: Great to see you again.

Francine Katsoudas: Thank you.

Daniel Newman: And thank all of you for joining us here today. The Six Five, we are On the Road. We are in LA at Cisco’s Partner Summit 2024. Join us for all of our coverage. Check out all the other links. Be part of our community. We appreciate you tuning in. For now, got to say goodbye. See y’all later.