Joes Garage

Building converted to Joe’s Garage on the movie set of Ready Player One
  • Joe Schroeter

    Questions for Boards and Senior Teams to Consider in Their AI Strategy

    I’ve been straddling AI for some time now between involvement in projects to develop AI products and services and company efforts to work out their AI strategy to add value to their businesses. The tension between investment/spending on AI and getting visible value is pushing the need for disciplined focus. Boards, Private Equity and Senior Teams will do “something” around AI in 2025. The risk of doing more harm than good is real, and you will have a strategy either implicit or explicit; so better to make it explicit.

    Programmers are already facing the reality that their world has changed and is accelerating. This should serve as notice to leadership both around the pace and reality of change AND the need think in a disciplined manner around AI. For example the Cursor team was on Lex Fridman recently(its worth a listen). Aman from Cursor commented that during a conversation about the laws of scaling he realized that he was going through the states of grief, denial, anger, etc; and had to get to acceptance to be able to think about what is possible in terms of progress. Just being a few months ahead in terms of action is an advantage but the Cursor team pace is that in a year, their product will make the current version look obsolete.

    I am still seeing companies aware of the importance of AI but either too vague about its use or on the other end, boiling the ocean with claims and aspirations of AI changing everything in 2025. Regardless, these are at least some of the questions that require attention as part of your AI path.

    1. Do you have a cross functional AI group to guide your AI effort?
      • For example: Jeff Sprecher, CEO at ICE, announced during his Q1 call this year that he was forming an internal AI center of excellence to look at use cases and trends impacting ICE after it came up at a Futures Industry spring industry conference
    2. What is your short list of assumptions and use cases across AI themes over the next 24 months company wide and in each functional area?
      • Reporting and Analytics
      • Agentic AI
      • Personalization, Profiling and Identification
      • Coding assist
      • Prediction
      • Automation
      • Content generation
    3. How do your assumptions about the state of AI impact the answers your key business strategy questions: (see Roger Martin’s work)
      • What are your aspirations and concrete business objectives?
      • Where do you play and not play?
      • How do you win against the competition?
      • What capabilities do you leverage or need?
      • What management systems need to be put into place; what I call the company operating system
    4. Are you getting at the right, few metrics?
      • Real cost of AI
      • Objective improvement of process
      • Evidence of value added/ efficiency developed
      • Iterate your metrics
    5. What aspects of AI do you want to drive top down across a group of companies or functions vs. bottom up surfacing of practical use?
    6. How can risk management play a positive role in successful implementation? (like in trading, good risk management is often the key to value enhancement)
      • Do you have AI operating principles or governance of use?
      • Do you have a defensive strategy to spot and mitigate nefarious use of AI as part of your cyber strategy
      • What are the gates for moving from POC to implementation
    7. How does your AI strategy prioritize against other strategic moves and what can the organization tolerate and be successful?
    8. How are you preparing the organization and your people for AI use through real application of the organizational change stack?
      • Alignment
      • Practical Engagement
      • Active Leadership
      • Individual Accountability
  • Joe Schroeter

    My Personal Q3 Review

    Q3 begins with remembering Blue(Bluesy, Baby Moose, Blusifer) who was a fixture in our family and also with some of my clients, teams and work for nearly 11 years. He passed suddenly in early September. He was a close friend, trusting, trustworthy, a big dork, rockstar model, protective, obsessed with training people to retrieve rocks and toys and damn near human.

    I’m taking advice I give clients and others for my Q3 review. I focus on what I learned and what to keep(and do more of), stop and start doing to close out the year in Q4 to improve and accelerate outcomes into 2025.

    Like companies I have worked with and teams I have led, the two re-learning of themes for the year and this last quarter are be consistent and have simplicity of focus. When they are deviated from, progress and the success at the level of doing something great stops. The last relearning is from 7 days in the Wind River Range, that we don’t need nearly the volume of food we think to go all day.

    For those of you doing corporate reviews, I start with what I am going to do going forward as the rest of the story is better told in person. I’ll spare you and my blog all the notes leading up to this and stay on the outcomes and the actions to happen in Q4.

    Health– cut weight, keep muscle, improve conditioning Q3 Grade- B+

    • “Keep the goal, the goal” on weight loss without losing too much muscle. I’ve made good progress for the year, but will be much closer to the long term goal by Mid November
    • Continue focus on consistency in eating. Protein feeds fitness when cutting. Eating window and low/no sugar, dairy and grains
    • Stop alcohol for the remainder of the year. Mostly done already.
    • Take my own personal fitness test and blood markers by end of the year. I’ll blog separately on those. My fitness test is a good one for people of all abilities in their 40’s, 50’s and maybe 60’s. I developed it with a friend of mine years ago and it is a reliable reflection of general fitness. It might be a bit more strength focus as I hate cardio.

    Professional: Keep Consulting to Scale Growth and Change- Find team to join by end of year. Q3 Grade C-

    • Continue marketing consulting(facilitating, transformation, and operational excellence); I know few consultants that enjoy this aspect. I do as my work is the challenge of growth and change but much of the effort in Q3 was waylaid by a number of things.
    • Keep looking for the right team in capital markets to join. Right fit right time. International, driving technology, and working to create some thing great. Bonus is opportunity to be/live outside the U.S. for some period.
    • Stop looking for opportunity in environmental voluntary markets. Voluntary carbon markets; you’re dead to me. It’s not me its you…. its likely flawed as a model.
    • Do more of AI use case application especially in the areas of agents. Take the AI integrations we have completed, learn from them and look for practical needs and opportunity for automation and use for engaging staff and customers

    Personal: travel(work in Europe on project/team), simplify, write Q3 Grade: A-

    • Stop and don’t fall for the temptation of spreading myself too thin
    • Continue simplifying focus
    • Continue writing, start submitting for publication
    • Continue Vipassana
    • Start submitting articles and decide on book

    I’ll post later on the multi decade fitness test that some friends and I have done for years. Otherwise. The main focus like anyone in Q4 is hustle.

  • Joe Schroeter

    Useful Quarterly Business Reviews

    “He wasn’t bad; he got the information out there.”

    “Hey, do you have a template I can fill out?”

    “I got my deck down to 20 slides!”

    “We don’t really do a formal business review. We just add it as an agenda item at the end of each quarter.”

    I was speaking with a CEO client this week about the next round of his company’s version of Business Plan Reviews, (BPR’s and QBRs) He was scrambling to give people detail of what to include in their presentations and anticipating what guidance he already knew he wanted to give. He couldn’t remember much about the reviews in late July.

    So how do we make our Quarterly Business Reviews less forgettable, and more useful for driving discussion, learning, decisions, and momentum into the following quarter? No one likes corporate monolithic presentations or discussions and presentations. They suck, and they invite micro management from the CEO and Board to, do this, don’t do that, and nitpicking at detail in an effort to find value in the sessions.

    Don’t underestimate the number of hours that your people, and their teams spend preparing for these reviews, working on “decks” of one kind of another, sending slacks, emails, digging for data that they haven’t looked at since the last reviews. Too often the unstated goal is to get out of the review with as few dings as possible and as little added to an already overloaded team as possible. Forgettable becomes the goal. Below are a few ways to make business review working sessions useful to all participants.

    Purpose:

    • To discuss notable work completed, iterated, delayed and shelved over the course of the quarter and how that impacted the outcomes and metrics in ways we expected or not
    • To coalesce learning, make decisions, and
    • To decide on a vital few actions to create and accelerate momentum for the next quarter

    Preparation:

    • Consider whether PPT or a slide deck is the best way to communicate the quarter. Taking a break from decks can create better dialogue and decisions
    • Share any information relevant to the review session 48 hours prior with commitment to arrive having reviewed the material
    • A word on data and metrics. Having your data in a “not final” status is sufficient for a quarterly review. e.g. you cannot wait until the end of the first month of the next quarter to have a discussion and make decisions because your numbers are not final. If you have to dig to find your key metrics they are not good metrics because they are not driving decisions or action and/or your technology and process is not providing proper decision support
    • Do not take multiple days of your staff’s time to prepare. They know how the quarter went
    • Divide your presentation between keep the ship afloat/execution excellence work and change efforts that are requiring behavior, business, culture and organizational changes(creating the future efforts)

    One Agenda: (60 min)

    As the presenter, anchor your entire presentation on what, and why is it important.

    15 min: Presentation

    • What 2-3 key measures did you expect to impact? Why are they important,; how have your assumptions and views of those measures changed during the quarter.
    • The work of the quarter is a story- We did these few key things, here is what we expected to get, how we did or didn’t get the outcome expected and what we learned
    • Notable people and customer moments, improvements, contributions of the quarter
    • What didn’t you do during the quarter, what were your top 5 or so distractions that got in the way of “the work”
    • Known changes/plans for the next quarter

    30 min Discussion

    • Questions on material presented prior to the session
    • Discuss key items around what is working and not working from the presentation and materials, identify improvement opportunities and options
    • Are our people supported and challenged in the right balance?

    15 min. Decisions and Communication

    • What will we continue doing, stop doing, and start doing in the next quarter
    • What is key to communicate, who is accountable

    This approach is obviously non-exhaustive but is intended to make your business reviews less forgettable, more useful and provide you with a starting point to make the effort valuable as a part of any organizations operating system. On a last note, there are enough AI options now for recording, transcribing and summarizing the session to make it a standard part of the session and allows more automated follow-up and communication from the session.

    Best of luck!

  • Joe Schroeter

    Does The WPE v WP Dispute Impact Your Thoughts on Using Open Source AI in Capital Markets Operations and Trading?

    “WP Engine is the leader in the $597 billion WordPress Economy. The company’s platform, the fastest among all WordPress providers, powers 1.5 million digital experiences.” That was from WP Engine in 2023 billed as the first study of the WordPress economy. I’d be reticent to use an open source AI for automating fintech or capital markets company processes at this point or to inform trading systems, ML or Algos.

    https://www.fastcompany.com/91198361/the-chaos-at-wordpress-revolves-around-a-clash-of-egos

  • Joe Schroeter

    A leaders real job- Turn nice to haves into must haves

    I’ve acted as a leader, and helped companies go through so called transformations. I think change management is fleeting to some extent as a term. I tell myself as well as those I work with our jobs as leaders are pretty simple but they are an obligation. Being a VP is not a perk or an honor to hold over people. It is a service position, a position as guide. It is not about telling but usually about understanding, clarifying direction, encouraging them to do what they do to get the outcome the business needs.

    1. Our job is to keep some things stable, and turn other things into must change efforts. That is why being an effective sponsor of change is so important. You can’t delegate it. If you cross the line of having too many must haves, you have none. Interesting impact of too many must haves is then you also will lose stability because if you are not being reborn, you are dying.- Dillon. It applies to everyone, every organization.
    2. Second, your job is to develop people to their potential and the company need at the same time. It is again your obligation to provide leadership. If your people don’t trust you, and don’t perform, or don’t deliver on something you say should be simple, look in the mirror to find where the fault lies.
  • Joe Schroeter

    That First Year as CEO

    I read a recent HBR article entitled Inside the First Year as a CEO by Ty Wiggins and Rebecca Davies. The two surveyed a small, gender diverse, number of CEO’s regarding their first 12-18 months of leadership. The results resonated with me as both a senior executive and advisor to senior teams.

    The responses of the 35 CEO’s they surveyed serve as a good reminder and derivative of the Jim Collins concept of “first who, then what.”

    A number of other lessons ring true as well from my experience:

    1. The reality of the culture is different than how you perceive it initially. 75% of the people were surprised by the culture they stepped into was different than what they thought it was during the interview process
    2. Employees are often more dedicated and talented than you realize. See lesson one; employees may be disengaged or disenfranchised, but that reflects on leadership and culture
    3. The senior leader takes too much time to build and make changes to his senior team. Its the most common regret of incoming CEO’s
    4. It takes much longer for a senior team to function well as a team; for the group surveyed by the authors of the article, on average was 14 months and most said it was still a work in progress. The reality that might be masked is that this is a dynamic and continual process.

  • Joe Schroeter

    “Reaching beyond our grasp”

    That is how a company I was working with recently described their effectiveness at driving change. Its the primary job of leadership to drive change; not just keep the ship afloat. They have a sense of urgency, they work very hard, they are aligned. Their people understand how to start, solve and implement changes that will create improvement. As a senior leader, accountability falls to you to feather the balance between creating stability and change. A few reminders:

    1. Don’t punish success. Focus and finish to realize business improvement before adding more projects
    2. Don’t overload your staff with sheer volume of “change” projects
    3. Do you have the right foundation of work done? Don’t bother adding features on an unstable platform When some of the trading platforms like Blue Ocean via Robinhood and Schwab went dark during the recent market sell off, no one wanting to exit a position cared about what new features were being added

  • Joe Schroeter

    A tongue in cheek way to use chatGPT4o to improve how you engage your staff around OKRs!

    For years I have thought the quality of my leadership is dictated by the quality of the questions I ask; to resist the urge to be the expert and to dig deeper into creating a give and take on how we solve problems at work(and at home for that matter) I’m finding the same applies to genAI. The quality of my prompts of how I’d like in this case chatGPT4o to assess, reflect and revise an email sent to a direct report inviting them to meet to set OKRs mattered. The prompt enabled chatGPT to spot an unprofessional email comment on it and revise it to something that is perfectly sharable to a colleague or staff member. Clarifying prompts and going back to see if they are close and making changes refines the LLM’s ability to interact with what you need.

    Prompt for advising on an invite to meeting to work on OKRs

    “You are a mentor and consultant coaching a manager with 5 direct reports. Analyze the email the manager is sending to a direct report inviting them to an OKR setting meeting. Your advice should include feedback on:

    1. The balance between formal and informal tone of the email

    2. Whether the person gives a brief description of an OKR in the email

    3. Whether the manager sends an agenda for the meeting as well as suggests a day and time?

    4. Whether the manager sets the tone and expectation that the employee should come with some of their own ideas for OKR’s 5. Considers whether the manager anticipates that they will some small number of OKRs they assign. After you provide feedback on the quality, clarity and level of engagement in the email invitation, please provide a suggested revised email for the managers consideration that is properly formatted and can be imported or cut and pasted into an email. Here is the email to evaluate:”

    Sample Email: Note I would never send such an email:)

    Dear Simon: Due to your inability to come up with OKR’s on your own, I am left with having to hold your hand and actually schedule one on one time to get this simple task complete. OKRs are just a combination of things that make up a goal; an objective combined with a key result. I have a couple in mind but I do want you to try with your tiny mind to come up with at least one idea of an objective and key result you want to work on this year. the agenda will be as follows: 1. review my thoughts on possible objectives for you

    2. Discuss why I think those makes sense and how we might measure success and how we might accomplish them or if it is too much

    3. Look at ideas you have, lord I hope you have one.

    4. Decide what we need to do to further research and bring to completion in the next two weeks. Might meeting next tuesday at 1 pm for an hour work you knuckelhead?

    Your all knowing boss

    Mr. Tool

    ChatGPT’s response:

    This email is highly inappropriate and unprofessional. It is crucial to maintain a respectful and supportive tone, especially when discussing goal setting and performance with employees. Here is an analysis based on the provided criteria:

    1. Balance between formal and informal tone: The tone is excessively informal and disrespectful, which is unacceptable in a professional setting.
    2. Description of OKRs: While the email does include a brief description of OKRs, it is condescending and unclear.
    3. Agenda for the meeting: An agenda is provided, but it is not presented professionally or clearly.
    4. Setting tone and expectation for employee ideas: The tone discourages and belittles the employee instead of encouraging their participation and input.
    5. Anticipating assigning OKRs: The manager mentions having a couple of OKRs in mind but does so in a negative manner.

    Suggested Revised Email:

    Subject: Invitation to OKR Setting Meeting

    Dear Simon,

    I hope this message finds you well. As we prepare for the second half of 2024, I’d like to set up some time to discuss and establish your OKRs (Objectives and Key Results). OKRs help us define our goals and measure our progress effectively.

    Objective: What you want to achieve.
    Key Results: Measurable milestones that show progress towards the objective.

    Meeting Details:

    • Date/Time: Tuesday, [Date] at 1 PM
    • Duration: 1 hour
    • Agenda:
      1. Review potential objectives and key results I’ve identified.
      2. Discuss the rationale behind these objectives and how we can measure success.
      3. Explore any ideas you have for your own objectives and key results.
      4. Outline next steps to finalize our OKRs by [Date].

    I highly value your input and would appreciate if you could come prepared with at least one idea for an objective and key result you’d like to work on. This will be a collaborative session, and your insights are crucial for setting meaningful and achievable goals.

    Please let me know if this time works for you or suggest an alternative. Looking forward to our discussion.

    Best regards,

    [Your Name]

    This version is professional, respectful, and encourages collaboration and engagement from the employee.

  • Joe Schroeter

    Happy Earth Day Gen AI

    Is there a duality to AI, promise and impact on the environment? That was ChatGPT’s response to me when I asked it to depict an image showing the damage AI would cause to the environment. That’s the first time I have gotten an image that was not just a result of poor prompting but more of a reframing by ChatGPT of my ask.

    I suspect that the promise of sustainable AI will not be from innovations in clean energy as much as innovation in AI efficiency that will require less energy. We are living in the Incandescent era of AI where we are living with power hogs for now.

    My hope is that we will see more start ups and investments for the future; an LED or hopefully better era of AI computational energy usage.

  • Joe Schroeter

    Every company wants to be a SaaS company

    I wrote a post a few weeks ago that every company wants to be technology company. Over the past few weeks I’ve realized that every company also wants to be a SaaS company as well.

    The realization started a couple of years ago. I was working with a digital transformation company providing implementation services to the healthcare industry. Supporting efforts around Epic integrations, Workday, and other healthcare specific tech. They were about 25M in revenue…that had to be sold again year in and year out. They were in process of developing some of their own basic applications to sell to the health systems rather than just doing implementation work.

    Another capital markets company recently developed various technology for their own inhouse use and is primarily a services business. But their tech would be valuable to others both vendors and competitors. They are looking at which tech to make available to others and how.

    Last, an outsourcing contract developer I recently spoke with is working to decide which of their efforts in the capital markets tech space can be sold as SaaS products to take advantage of the the industry trend to replace aging infrastructure, OMS, risk, etc. The other thing driving contract development firms to product is the acceleration of AI and low/no code applications.

    Oh I almost forgot. Large consulting firms are acquiring work flow solutions, payroll, supply chain, capital project estimating software and even CRM systems as they morph into SaaS firms that also provide consulting.

    Indeed software vendors also can’t remain only software vendors in capital markets. They will increasingly provide contract services. As AI is truly agnostic and ubiquitous, it will enable connecting platforms with ease to drive automation. As a result vendors will need to expand their products.

    In the end, the ecosystem will favor the incumbents but only if they can innovate quickly. I anticipate however, many firms coming from contract or core services will need to pick their battles. Its easy to think you have a solution in capital markets but the reality is that there is an enormous amount of nuance customized into applications that will be hard to replace if software vendors stay on top of their game.