“Generative AI will revolutionize client interactions, bring new efficiencies to advisor practices, and ultimately help free up time to do what you do best: serve your clients.” -Morgan Stanley co-President Andy Saperstein

Morgan Stanley is taking its AI @ Morgan Stanley Assistant fully live for all financial advisors. The tool provides financial advisors rapid entry into the bank’s knowledge repository, which houses about 100,000 research reports and related documents.

Quick, easy access is a first-order effect. The second-order effects will be much larger. But these will take time to materialize. And they will only materialize after advisors not only incorporate the new tools into their workflows, but also build new processes and procedures as a result of the new tools.

Some food for thought on the future of fast food in the era of AI:

➡Personalized Experiences : AI algorithms are delving deep into customer preferences and buying patterns to offer personalized recommendations, enhancing the customer experience and boosting sales.

➡Automated Ordering and Delivery : From chatbots taking your orders to robots delivering your cheeseburgers, AI is revolutionizing the way we order and receive our food.

➡ Sustainability : AI is aiding fast-food chains in becoming more sustainable by optimizing supply chains, reducing energy consumption, and helping with food waste, moving every cheeseburger a step towards a greener planet.

➡ Fan Experience: The goal of AI is to improve the fan experience. Restaurants everywhere are starting to us AI to deliver better service and a better product.

Here’s to the future of fast food, where every day is #NationalCheeseburgerDay!

Last week took me to Nashville, though sadly not for Taylor Swift. Instead, I was privileged to join the Unleash HR Summit. I have been fortunate to cross paths with Dirk Beveridge over the years and witness his remarkable efforts in transforming legacy distributors into dynamic and innovative market leaders. It’s great to see him extend his expertise to HR executives, because the radical reinvention of people and culture is central to any organization’s transformation. The conference was truly exceptional, and I was delighted to be part of such an incredible community.

My keynote centered on the intersection of HR and technology. Here are a few of the thoughts I shared:

  1. See the lasting impact technology, and the shift from digitization to ‘data’fication, is having on HR

Technology has revolutionized nearly every aspect of modern life, and the field of human resources is no exception. To stay ahead of the curve, HR executives must keep up with the latest advancements. New tools and software can provide valuable insights into workforce analytics, increase employee engagement, and improve talent management. HR executives must understand how these technologies impact the future of work and their teams on a personal level. It’s important to remember that technology often has unforeseen second-order effects, which can be much larger and more impactful. HR executives need to spend time understanding the second-order effects of tomorrow’s technologies.

  1. Embrace the Changing Nature of Artificial Intelligence (AI)

The future of work is decidedly human and AI is unlikely to take your job anytime soon. However, a burst of new AI applications does suggest those who can fully leverage its potential will have the most significant impact on their organizations. AI is disrupting the HR role in specific and special ways. Ultimately, it is also elevating the HR role to a more strategic level than it has sometimes played in the past. HR executives should aggressively experiment with new AI tools to find the ones that best support their unique mission and culture. These might be chatbots to answer employee questions and provide support 24/7 or perhaps predictive analytics to identify employees who are at risk of leaving so HR executives can take proactive measures to retain them.

  1. Understand how demographics shifts are changing HR

As Gen Z enters the workforce and becomes a larger consumer base, their tastes preferences are exerting a greater influence on workplaces. This generation values quick access to information and the ability to independently solve problems. They expect services to be available “on demand” and facilitated by technology. HR technology tools need to change with changing demographics. At the same time, most organizations now have employees in their workforce from more generations than ever before and HR executives will need to balance different needs. Technology can be utilized to improve the employee experience. HR executives can use tools such as employee self-service portals to provide convenient access to information. You might also use virtual and augmented reality to provide immersive training and enhance onboarding experiences. These tools can also be used to help scale the expertise of some of your most seasoned employees.

  1. Employees need more from their companies

Current data on employee sentiment is troubling.

  • Workers are broadly dissatisfied with their company when it come to their work.
  • Half of the workers report that they do not understand what is expected of them at work. I am concerned hybrid work environments might exacerbate this problem because they often eliminate the small clarifying conversations that occur serendipitously throughout a workday.
  • Only approximately one-third of workers feel that their company’s mission and purpose make their job feel significant, and similarly, only about a third of workers feel they have the chance to utilize their unique strengths every day to do what they do best.

Employees need more from their employers. They need to feel they are making a difference and be recognized for their contribution in meaningful ways. HR executives will play a central role in delivering these needs in the future, and technology will also play an important role.

  1. Growth requires new processes

James Clear’s assertion is that “you do not rise to the level of your goals, you fall to the level of your systems.” This means that having lofty goals alone is not sufficient; we must also establish effective systems to reach them. It is not enough to apply new technologies to old processes. Modern technology demands new processes and procedures to harness its complete potential. HR executives should prioritize agility by fostering a culture of experimentation and innovation. They should inspire employees to contribute novel ideas and offer opportunities for learning and growth.

  1. Executives need to think differently about the future

HR executives must think differently about the future to remain competitive and relevant. The time to act is now. HR executives, in particular, must anticipate future trends and adapt their strategies to attract and retain top talent.

This week, I took the stage in Neenah, Wisconsin, joining nearly 200 leaders of SECURA Insurance. In my keynote, I discussed the ongoing shift from digitization to ‘data’fication, what that means for the future of the insurance industry, and how this shift is creating new opportunities for insurers to better serve their customers.

In addition to the keynote, I delivered a separate workshop for the leadership team. We explored the leadership characteristics that make big technical migrations successful. SECURA, like many companies, is working hard to build the future. We discussed what leaders can learn from Amazon’s Day 1 mentality and how we can avoid the trap of Day 2. Leaders need to maintain a long-term focus, obsess over customers and their needs, and boldly innovate to meet those needs. We also ran through a pre-mortem exercise to identify and prioritize risks and build and implement preemptive mitigation strategies.

It is no longer enough to have the best people or the best technology. In order to thrive in the decade ahead, organizations need strong leaders, creative employees, and the newest technology. These three things need to work together to unleash an organization’s full potential. Technology alone will not drive growth. Most great transformations require new workflows.

The strategic use of data is no longer a luxury, but a necessity for businesses looking to stay competitive in today’s rapidly evolving market. By leveraging the power of data in new ways, businesses can develop innovative solutions that truly meet the needs of their customers, resulting in greater customer satisfaction and ultimately, increased profits.

It’s an exciting time for the insurance industry, and I was thrilled to be part of the conversation at SECURA’s event. SECURA has a rich 123-year history, and the leadership team is doing an artful job of embracing this history while also building the future.

Axios CEO Jim VandeHei writes about the conflict brewing between management and workers over the future of work-from-anywhere policies. VandeHei notes he is worried about two big risks: “younger workers benefit more than they realize from being in the trenches, in person, grappling with tough, teaching moments. There is a magic in human interaction [and] it is way harder to create strong emotional bonds with colleagues and your company from your couch. People stay in jobs and thrive when they feel tight connections.”

In response, he offers four steps Axios takes to mitigate these risks:

  1. Hire self-motivated, driven people
  2. Create new human interactions
  3. Communicate until you annoy yourself
  4. Create new performance measurements

All of these steps ultimately speak to the importance of corporate culture and how to build it in a work-from-anywhere world. Corporate cultures often develop organically when everyone is in the same place, housed under the same roof. Sure, organizations can help culture along, but a meaningful portion of culture happens through the patterns and rituals of office life. And it happens serendipitously in-person because an organization’s culture is, in part, the amalgamation of its people.

When the pandemic hit companies tried to replicate some of these rituals in the digital realm – think Zoom happy hours and digital water colors – but their successes were largely short-lived. These approaches often miss the mark, because they force banter, but it is deeper human connection and shared culture that individuals really want. As Rita Ramakrishnan, head of people and talent at Cadre put it, “the single greatest indicator of retention and engagement is whether you have a best friend at work.”

Here are three mindsets to drive culture in a work-from-anywhere environment:

  1. Shift from an office-first to a remote-first mindset. In an office-first mindset, organizations helped culture along by offering amenities and decor that aligned with the culture they desired. And culture developed overtime through the events and gatherings that play out when everyone is in the building. Think welcome bagels, birthday lunches, and new parents stopping by with their babies. But work-from-anywhere requires a remote-first mindset. An often-overlooked aspect of remote workforces is that employees work and collaborate asynchronously. Sure, there are the Zoom calls, but the bulk of work, and communication, is happening asynchronously. This is especially true when teams span the globe.
  2. Be excessively intentional. It is not enough to think that the culture you want will develop naturally in a work-from-anywhere environment. Leaders need to be excessively intentional in their efforts to build the culture they want. Communicate until you annoy yourself, as VandeHei recommends. Build workflows and communication approaches that ensure everyone has equal access regardless of time zone or location. Create new remote-first cultural ties.
  3. Over invest in in-person experiences. It may seem counter intuitive, but remote-first organizations need to invest heavily in in-person gatherings. As Pamela Hinds and Brian Elliott wrote last year in Harvard Business Review, “plenty of research shows that our ability to connect meaningfully to others is less satisfying when we’re not physically present and that shared understanding is harder to establish and more likely to suffer from “drift” as we spend time apart. The absence of shared context, from body language to the type of snacks made available in the shared kitchen, dilutes these myriad of signals that convey culture.

Many companies lost their mooring when the pandemic hit. They went into triage mode, grasping onto the nearest video conferencing platform, and many have not reemerged. Now is the time to rethink your approach to culture.

We have more data on the impact the pandemic has had on our kids and their education and the results are disheartening.

The National Center for Education Statistics (NCES) ran a special administration of the National Assessment of Educational Progress (NAEP) long-term trend (LTT) reading and mathematics assessments for students who are 9 years old. Average scores declined 5 points in reading and 7 points in mathematics compared to 2020. This is the largest decline in reading in 30 years and the first ever decline in mathematics.

NAEP, sometimes called the “nation’s report card,” is a congressionally mandated program administered by the U.S. Department of Education.  It is the nation’s only ongoing, representative assessment of what students in different grades know and can do. The main NAEP is given to students who are in 4th, 8th, and 12th grade, whereas the LTT assessments are administered to students sampled by age.

The test results also showed greater score decreases for lower-performing students. For both math and reading, age 9 students showed steeper declines in the lowest percentiles. For example, for students in the 90th percentile, reading scores declined 2 points and math results declined 3 points. For students in the 10th percentile, reading scores were down 10 points and math scores were down 12 points.

The test results also show widening performance gaps between different subgroups of students. For example, those eligible for the National School Lunch Program (NSLP), a common proxy for poverty, saw reading scores fall 6 points, compared to 2 points for those not eligible for NSLP. Mathematic results fell 8 points for those eligible for NSLP compared to 5 points for those students who were not eligible for NSLP. The LTT had previously shown a gradual narrowing of achievement gaps between racial and ethnic groups. In this year’s data, the performance gap in mathematics widened sharply between white and African American students and white and Hispanic students, pointing to greater inequality.   

The pandemic has had a profound impact on every aspect of our lives, and education is clearly no exception. The new results are sure to add fuel to the already heated debate over how best to improve America’s schools and how to help our kids recover from the devastating effects of the pandemic.

NCES will be releasing more data from the both the main NAEP and this LTT administration in the coming months.

Last week I took the stage at Global Business Travel Association (GBTA) Convention 2022 to highlight the results of CWT and GBTA’s 8th annual global business travel forecast. I worked with GBTA and CWT to craft forecasts for average room rates, airfares and car rental hires for each of the major regions of the world. Below are some of the key results, but you can see the entire forecast here (it is free!).

Overall travel demand is up significantly. In the U.S., TSA throughput is up 41% over last year (though still down from pre-pandemic levels). Likewise, business travel is recovering sharply and the breadth of travel is expanding. For business travelers, international tickets were approx. 38% of all tickets purchased in 2018 and 2019. This fell to 33% in 2020 and 22% in 2021, but has risen to 34% in 2022.

Looking ahead: global business travel airfares are expected to rise nearly 50% this year. In some regions, like North America, fares have already hit all-time highs. Airline capacity remains constrained. Globally, there were 12% fewer available seats in August 2022 than in August 2019. Higher costs are also pushing prices up. Jet fuel prices have ebbed lower, but hit all-time highs earlier this year.

Our forecasts call for another 8.4% increase in prices in 2023. See more in the full report.

Check out some of the coverage of the study in BTN Group, TTG Media, Japan Today, Business Traveller, Hospitality Net, Hotel Management Magazine,Travel Weekly, Voyages d’Affaires, Business Travel News, Travel Daily, and more.

Last week I joined the Massachusetts Bankers Association to discuss the future of community banking and the future of finance.

Some of the oldest institutions in the United States today are members of this storied association. Eastern Bank was established in 1818 as Salem Savings Bank, Dedham Institution for Savings was started in 1831, and Cambridge Savings Bank was founded in 1854. BankFive, chartered in 1855 as the Fall River Five Cents Savings Bank, is one of the first Five Cent Savings Banks in America.

Community banks were one of the many unsung heroes of the pandemic. They helped small businesses secure life-saving PPP loans. They supported first-time home buyers finance purchases. They helped commercial real estate owners hard hit by lockdown orders.

Community banks are the bedrock of their communities. Nationally there are about 4,200 community banks today. These banks account for roughly 40% of all bank branches, 14% of bank deposits, 18% of bank loans, and just over 13% of bank assets. The remaining deposits, loans, and assets are held by non-community banks, of which there are roughly 127. Despite only holding 18% of total industry loans, community banks hold over one-in-three small business loans.

Similar to other industries, the pandemic accelerated an often-overdue digital transformation for many banks. For many community banks, new customers could not open an account online until COVID changed how they operated and interacted with customers. You could not talk to your banker remotely until the pandemic necessitated zoom-esque video meetings. You could not sign loan documents or perform other essential operations without coming into a branch. Banks, like many businesses across a wide swath of industries, are still figuring out new ways of operating in our post-pandemic world.

Community banks face significant challenges today. The upgrade of digital solutions has reduced traffic at branches, calling into question what to do with these core assets. Community banks face pressure from neobanks and other fintech upstarts that are bifurcating financial services. They face competition from large companies like Amazon, Apple, and Walmart who are looking to expand beyond their existing industry footprints. They face regulatory burdens not borne by other financial institution competitors. They face the challenge of generational shifts and changing consumer preferences.

In my keynote, I talked about the mindset needed to lead a community bank on the pathway towards the 22nd century. Banks need to introduce new products to new markets in order to thrive. This has often meant finding new customers for existing products they already offer. Adding more checking accounts. Producing more loans. But their future will be more than just broadening their base or expanding existing products. I believe the future will mean a new age of innovation that introduces entirely new products.

Much of the innovation we have seen from fintech has been the result of entrepreneurs and innovators crafting new solutions for problems that have long existed. Venmo helped us figure out how to easily split the cost of a meal when the bill arrived at the table. We are seeing new innovations in alternative credit scoring, immediate access to earned wages, digital wallets, small-ticket loans, cold wallets, conditional cash transfer programs, alternative insurance underwriting, crypto and blockchain, payment gateways, and much more.

How will banks find these new products and services? I talked about how their individual digital transformations will lead to massive data exhaust and it is in this data exhaust that they will find many of the solutions needed to thrive in the years to come. They will find new products to offer and new ways to serve their existing customers.

Here is just one example I shared with them. Today we onboard bank customers by forcing them to pick an account plan before they do anything else. You often cannot become a customer of a bank without opting into a specific plan. But many tech companies onboard customers in a very different way. They do not make us decide how we want to use the platform before we have even had a chance to use the service being offered. Instead, they bring us on board, let us try things out, and then let us decide what type of customer we want to be based on how we use the technology. Imagine if banks onboarded customers in the quickest, easiest way possible, and then let the user’s behavior tell us what type of customer they are or what type of account they should have. Imagine if we let the data exhaust tell us how to think about them as a customer only after we have made them a customer.

I also talked about how tech is changing our relationship with capital. For example, what if autonomous vehicles were to become the bank branch of the future – showing up in different neighborhoods throughout the week just like your favorite food truck does today. We think about capital as a fixed resource, but in the future, it does not have to be. Likewise, autonomous vehicles do not have to play the same narrow role traditional vehicles play in moving people between two points. They can morph into a myriad of forms that impact a tremendous number of industries.

Many banks are embracing innovation. They are partnering with fintech companies. They are replacing ATMs with ITMs (interactive teller machines). This is extending branch hours and helping customers to perform even more tasks digitally. Banks like JP Morgan and Standard Chartered have started opening branches in the metaverse. Crypto has also moved front and center for many community banks that plan to offer capabilities in the coming years.

Community banks, like many businesses, are tech companies now. They are software companies. They are data-consuming AI companies. And technology will help them bridge their rich history with their bright future.

By now you are probably familiar with non-fungible tokens (NFTs) and the many ways in which creators are using them to generate value. While NFTs are being increasingly used by artists and musicians, they can also be used strategically by offline businesses.  

Here are three ways NFTs could augment your customer engagement strategies.

1.       NFTs Create Communities

Organizations are using NFTs to provide access to private Discord groups, VIP fan experiences, exclusive meet-and-greets, and special merchandise all with the aim of developing devoted fan communities. Miami super club E11EVEN plans to host private in-person get-togethers for holders of its Captain Club NFTs. A new movie production company is even using NFTs to create a community of super fans who will be able to provide feedback on content produced by the studio.  

2.       NFTs Grant Exclusive Access

A number of brands are offering limited edition items and exclusive access only available to NFTs holders. Think of NFTs as the next member’s only initiative. Digital fashion brand Cult&Rain’s first NFT can be redeemed for an identical pair of luxury sneakers. Gary Vee’s VeeFriends NFTs grant access to its VeeCon conference for each of the next three years. And Buffalo Trace Distillery minted NFTs that correspond to a limited release of its O.F.C. Bourbon Whiskey, distilled in 1982. The holders of the NFT can redeem for a physical bottle of the bourbon and when they do so they also unlock a private VIP tour experience at the distillery.   

3.       NFTs Can Pay “Dividends” that Reinforce Engagement

NFTs can create value into perpetuity. If you buy a collectible in the physical world, the value of that item changes as the tastes and preferences of potential buyers change. But the underlying item does not change. With digital assets like NFTs, the original creator can assign additional value or utility to the NFTs they have created. In this way, you can use NFTs to pay “dividends” to your biggest fans. For example, the Gift Goat token is one of the NFTs created by VeeFriends. The NFT provides admission to the VeeCon conference in 2022, 2023, and 2024, but it also includes a series of physical gifts that are mailed to token holders.

While NFTs have initially occupied the digital world, they are increasingly influencing what takes place offline. Executives should start to take note.

Man U recently announced it is partnering with Sony to build the first professional football stadium in the metaverse. The Atlanta Braves became the first MLB team to announce it was also joining the metaverse. A plethora of interesting consumer-facing opportunities including ultimately bypassing traditional media distribution networks to deliver live matches, game highlights, and other content directly to the fanbase. Remember, the metaverse won’t be exclusively accessible through VR, but will also be accessible through other devices like laptops and smartphones.

In the process of digital mapping, their stadium experiences to develop the virtual reality replica appearing in the metaverse, Man U and the Atlanta Braves are creating a digital twin which opens up other opportunities for their respective organizations. There is tremendous focus on the consumer-facing applications of the metaverse, but in the process of building out the metaverse, organizations are creating digital twins of their physical assets. The enterprise applications could far surpass the consumer-facing ones.