Why HR Needs Business Acumen to Navigate AI's Identity Transformation

Welcome to the Built by People podcast, where we share the stories and insights of the world's top HR leaders. Join us as we dive deep into the minds of HR executives, uncovering their strategies, challenges, and triumphs in shaping today's workforce. I'm excited to welcome Jodi to the Built By People Podcast. Jodi, thank you so much for joining us. And as a starting question, I always love to ask if you could share a little bit more about your career journey.

Sure. Happy to. Thanks for having me. Like many people who came out of college with a liberal arts degree, I landed in my profession rather than chose it. So I landed in an HR training program for a division of— at the time they had what was called Baby Bell's, and it was a great training program because I learned breadth of HR capabilities. At the time, the business spun off and became an independent business. It was a high-growth, wild ride of a company, and I became head of HR. I'd been working on my MBA, and the ability to discuss financials and the impact of my work landed me the job. And since then, I've gone back and forth between small companies and large companies, always at a time of business transition, um, which is when I tend to add the most value. I'm currently working at a business moving from startup to growth stage. It's a small insurtech called Insurance Quantified, where we have a small, very dedicated staff working with underwriting teams to harness the power of AI in underwriting.

Thanks for that great introduction, Jodi. You spent your career helping companies transition through different phases from startup to growth to maturity. What are some of the key HR challenges and strategies at each of these stages?

That's a pretty complicated question, but let me say simply, at each stage, what you need from a workforce perspective, how you structure your incentives, and how you organize the team is critically important. If I think about it just from a workforce and a recruiting perspective, what you need at each stage, At a startup, no one comes out of the gate having the right product market fit, no matter how smart your founder was. You spend some time in that real high ambiguity of trying to figure out what your business is. I used to say you need Freddie Mercurys at this stage of the business, people with huge amount of range. The high notes are the strategic work of finding PMF, but the low notes are pouring over a spreadsheet to make sure you have the cash flow to make the next payroll. So at that stage, you really need people who can handle high ambiguity. At the growth stage, you've found PMF, but you don't know how to reliably bring on clients, deliver without all hands on deck. So you're looking for people who can create process out of chaos without losing the secret sauce of the company. Then thinking about a mature business, the organization's on top of the world. They're growing at a regular pace. They are making money. They know how to keep their customers happy. Here you want people who know how to run systems, but you also want to make sure you have an environment to nurture the reinvention that the business is going to have to go through. And that's the tricky part there. You can reinvent when people are married to the mission of the organization, not the product. If they're married to the mission, everyone gets excited to nurture reinvention. If not, if they're really centered around the product itself, they kill any reinvention initiatives. So I could spend all day on this topic, but if I could say just one thing, from an HR perspective, we help the organization understand the transition the business is going through and how the organization needs to change. You can say we are the sense makers. During this period of ambiguity of business change.

Jodi, in your current role at a startup transitioning to high growth, what changes are you seeing in the tech labor market and how are you adapting your HR strategies?

So, going back to what I said earlier, if you've hired the right people for your growth stage, you are, you'll have very low turnover. No matter what's happening in the environment. I haven't had turnover in my business for over 2 years, or voluntary turnover for over 2 years. The tech people we have largely live in New York City or in Michigan, and they are very well courted by the FAANG companies and the hedge funds that want the super high talent and are willing to pay for it. What our team likes about working with us is they stay very close to the business problems, and they like being able to see the impact they have. So I do see changes in the tech market. Everybody's after great AI talent, but it— those changes aren't really affecting my business because we've matched the right people for the environment.

Jodi, building virtual communities is a passion of yours. What have been the biggest challenges in creating authentic community and virtual environments? What approaches have you found to be most effective?

Oh, this is a passion of mine. As with anything, I think in a virtual environment, it's having a repetition. It's having a drumbeat that the organization works by. And when I look at that drumbeat, I'm looking at what's the daily drumbeat, what's the weekly drumbeat, what's the quarterly drumbeat? That employees know and expect. And our daily drumbeat is by our messaging platform, which is Slack. By having a virtual messaging platform, we have to some degree been able to recreate office chatter. We say good morning. We have a recognition channel where we thank our colleagues. We have a random channel where we do things like a weekly behavioral economics question, and that creates chatter across the company. So having that virtual messaging platform has been super important. It's created that daily drumbeat. Our weekly drumbeat's been a town hall, and we had been toying with the frequency of the town hall even before we went virtual. But when we went virtual, we decided every week wasn't going to be too much, and it hasn't been. We do a 30-minute town hall. We start off with what we call a 3-in-3. It's 3 news items in 3 minutes, and then we discuss a topic that's important to our strategy. And then quarterly drumbeat is a look back, look ahead, the progress that's been made in the last quarter and what we want to achieve in the next quarter. It's a strategic execution-focused session led by our CEO. I find that it is having that drumbeat and figuring out what that drumbeat is for the organization that has created authentic community in the virtual environment.

Jodi, given your experience with digital transformation, how do you see AI reshaping job roles and productivity metrics within organizations? Hmm.

So I teach an organizational psychology class at Columbia, and this is a big topic for my students. As they're starting their careers, I tell them that this is going to help shape HR going forward. AI is going to transform how our jobs work, and it isn't going to be a slow transformation. It's going to be fast, and it isn't going to be ChatGPT helping us with our emails. It's going to transform what our work is and how we as individuals provide value. These are identity-changing dynamics. So in terms of what we do as HR people, it isn't necessarily the productivity metrics that we're going to be worried about at first. It's going to be the adoption metrics. So no matter how good the tools are, If people don't use them, if they don't trust them, we won't get the productivity gains that we want. So our jobs as HR people will be to help our staff redefine their roles as AI becomes a useful tool, or even to help them transition into new roles. There was a Planet Money episode in 2023 where they were talking about giving doctors pagers. Or trying to get them to give up their pagers. And one of the big reasons that the doctors wouldn't give up their pagers was because you got a pager on your first day of becoming a doctor. It was a symbol of your identity. And I think it's the same in our industry as underwriters, and an Excel spreadsheet is a symbol of their identity as underwriters. Part of what we need to do to help the adoption is to integrate the tools that they do use that are part of their identity into the AI transformation. We need to get people to trust the AI, and we need to get people to understand what their new identity looks like. I'll give a completely different example. 2017, so at the beginning of some of these changes, I did a tour group in India and met a doctor who had retired earlier. I'd asked her if she was a radiologist and she was surprised I would guess that so quickly. And she said, as her job changed, she just didn't want to do the new job. She would've gone from the basement of the hospital where she had to talk to no one to actually talking to patients and other doctors about what her findings were and explain what the AI had said, and she wasn't ready to do that. Our job as HR people is to help the radiologists or the doctors or the underwriters understand how AI is a tool for them and how they, their value changes in a good way.

Jodi, what parting advice would you like to share with our audience?

For HR people, the key thing is to be a business person first. Know your financials cold. Understand how to read the financial statements and how any programs that you're running will affect the financials. Understand the impact of compensation programs on the financials. Know your strategy and match your programs to the strategy. So how do you drive sales using your workforce structures and composition? How do you drive behaviors with compensation and rewards? So my advice for HR people is to be business people as well.

Jodi, thank you so much for joining us on the Built by People podcast. It was a pleasure to have you involved.

It was nice to meet you, and thank you for including me.