Reconciling Technological Innovations with Innate Human Sensibilities

Well, isn't every time an excellent time? Come on now. Don't start on that. Okay, so what are you trying to say with this? We ended your blog with a bold statement that went along the lines of artificial intelligence is data intelligence and modeling, and emotional intelligence is passion, wisdom, and instinct. And you and I, in chatting back and forth, talk about entrepreneurs, business leaders. And that magical thing called intuition, which seems to be a common characteristic of most of the really wonderful leaders that we have experienced over the last 50,100 years. So with that as the start, why are we so focused on artificial intelligence?

So it went three to five minutes there before the key word was uttered. that made Amazon a success and everybody else that we want to talk about a success, and it's called customer. Whatever the hell a customer wants, wanted, needed, Amazon did. Bookstores had a model that was a couple of hundred years old, and it had never changed. They were very comfortable with it. They had limited inventory based on data. We sold this many things, or we got this promotional money to put this book out here. And I went to Amazon almost instantly because any of the books that I was interested in buying, the bookstore never had. I had to get them to order it, and I paid the freight to bring it in. And here comes Amazon. In those days, we had to pay the freight at the very beginning, but the price was better so that even with the freight paid, I was cheaper than a bookstore. I had to wait for both, so it didn't really matter. And then here we go.

Now you go into an Amazon, go into Whole Foods, use your hand, pay your bill. You can drop off your returns at a Whole Foods store. I mean, you can buy cars. You can return cars. You can test drive. It's all and everything about this whole thing, John, to me is about customer service, whether it's AI, EI, or GI. It's all about customer service. And I think over the last 20 years, customer services has gone to the backseat as a servant of profit.

Oh, no question about it. The other thing that you touched on is, well, somebody has to know what questions to ask. We can have all the data. We can have all the algorithms. We can have all of the sexy systems we want. But if nobody can answer the question, then we've got a problem. Wait a second. Somebody's got to know what the question is. Why don't we have that part? Why are our sales going down? Why is our market share what it is? You know, those are really cool questions. Market share is a perfect one because we have no definitive way of calculating that. Everybody comes up with their version, the Anderson method or whatever the heck we want to call it. But why does a customer choose to stop buying from you?

It's kind of interesting because we're just going through converting all of our education products to artificial intelligence driven avatars that are now people that talk in a manner that you wouldn't know that they weren't in the room with you. So we can have 15 to 20,15 minute sectors, segments in a class, different genders, men and women, different ages, different races. and they're talking to you about subject matter, it's much more compelling. It's terrific. People don't know. But along the way, at the end of every segment, we have to ask a question. Mr. Student or Ms. Student, what did you learn? What do you know about this? What's your answer to that question? And if they can answer those, they can go on to the next segment. But now you've got to learn. Okay, then the next trick with all of this stuff, here comes AI and EI intermixed, and there's something in between that. I don't know what we want to call it. Retention.

You got to be able to retain that knowledge, that wisdom, that emotional intelligence. I go to Mary and I have to approach her this way. Or George, I can't talk about this. Those things are in our heads. I don't know how we put that into artificial intelligence.

Why? Why did I tell you that?

And it is dramatic.

But the other part of that, John, I'm going to say is the grandparents know that they're creating memories. The grandchildren have no concept of what that is yet. The children are in a bridge position. They're halfway. And, you know, we've seen that. My grandmother lived until she was 94. She was born in 1890, and she raised me for the first three, three and a half years of my life because both my parents worked. And it was the greatest gift that I ever received. to having her perspective. She got a master's in 1915, just as an example. She was able to speak fluently Greek and Latin. An incredible lady. Who also separated from her husband was a single parent raising three daughters in the 30s. So, yeah, I mean, she was off the scale. But then, you know, in the last day or so, I've been doing work on our classes and talking about customer service, which is all about... the interaction between two people.

And everything comes down to, in that world, from my definition, the customer's perception of what they receive, did it match what their expectations were? And then I'm going to put different gradations in there, say that if you meet the expectations, congratulations, you're the same as everybody else. If you met the expectations and you said thank you, that might be something. But what you're trying to do is you're trying to create a memorable experience that blows past expectations and perspectives so that you get to that Disney World word of apostles. Every grandparent leaving that site, they don't care how much it costs. It was the benefit of seeing that look in their grandchildren or children's faces. And the joy of smelling the popcorn, contrived or not, the fact that you're in a position to take a picture where there is no shade that you have to worry about. All of those things. And think about it. That's Walt Disney. That's 50 years ago.

And they have not really modified, other than made it bigger, until recently, the last five or ten years where we've become, quote unquote, woke. Now we go into a different path.

Oh, absolutely. Me too.

And I don't think any of us, too many people today are afraid to be replaced. They're intimidated. They've got to keep their job because too many people don't make enough money to have any kind of luxury. of comfort. You know, a statistic in the States is something like 62% of the people in America are within $500 or a financial disaster. So, you know, all of that comes into play. It's funny, you know, I swam and you've heard me talk about this incessantly and it taught me a lesson very early on that you're not competing with anybody other than yourself. Do the best you can. You mentioned, you know, do what's right. the discussions you had at PFW about let's do what the customer wants. Let's do it well. We'll make all kinds of money. Lou Holtz, do your best, do what's right, honor the golden rule. There's all manner of examples like that. So in swimming, I learned at a very young age, winning isn't the important thing.

Getting yourself better, improving is the important thing. And then I go to work. And the guy who was the president of the company fired me half a dozen times. And he taught me a lesson that was kind of amazing. He never, ever let me settle. Do your best, kid. And if you don't, I'm going to catch you. And if I catch you, it ain't going to be nice. And that comes back to something that I wish everybody had a feeling that what they did was worthwhile, that their opinions were valued, their opinions were sought. Not, here's your job. I'm going to show you how to do it. I want you to do it and do it better than you can. And you're a tool in the toolbox. I think that's where we're at today, which is where AI comes in. People are taking shortcuts. We're going to have data analytics. We're going to have algorithms. We're going to have this magic thing is going to decide all of our questions, just like your chat bot on customer service.

Answer these 30 questions. I can pigeonhole you. You can. then you can do whatever. It's not going to hurt my feelings. And if it's a problem, I will give you a person. Or you can be charged a premium and you'll get a person right away. So now we start having two levels of service, two levels of customer. Customer that's prepared to pay more to get service and everybody else. And that customer who's prepared to pay for it is becoming a bigger and bigger piece of the overall puzzle. 1% of the taxpayers in the United States pay 50% of the taxes. But that's not enough.

It's value, but nobody really can put a definition on what value is. The value to you for the same thing might be different than the value to me.

They're on my screen and on my phone all the time. It drives me crazy.

So now we get into generational issues. You know, Marlene, my wife and I were talking about the Industrial Revolution a couple of days ago and imagined the disruption that that caused on people's lives. Go back to serfdom and aristocracy and all the rest of that stuff. And then I was starting to look at movers and shakers. And, you know, you look at... guys like Alexander the Great or Cyrus or Herodotus in history. There's not very many people, Genghis Khan, that were impactful on the planet. So here comes a steam engine, and it's our source of power. It's wonderful. And the electric engine arrives, and it takes a long time. So I don't want to get controversial, but here comes Tesla and electrification of vehicles. Transportation is going electric. Probability of success over the next 10 years is zero. Because we do not have any electrical generation opportunities. We don't have battery capacity. We have none of that.

But silently and quietly down the side, we've got different gas solutions. We've got natural gas solutions. In Canada, the United States, we can solve the world's natural gas needs for the next thousand years, and it's clean. Why don't we use it? Because it's not politically... beneficial to the elite who need money to continue their control game. They don't own the natural gas. T. Boone Pickens did. He offered to put in gas stations across the country at his expense. Guess what? You take 50% of the energy away if you had on-highway trucks powered by natural gas, buses. There's so many different answers in every single direction. Tractors, mine sites, or autonomous vehicles. Why don't we have buses running up and down the street that are on electric, on a wire, and nobody has a car in a city? Why don't we have that? And now I'm talking about EI. I'm talking about out there. We got Elon Musk putting chips in people's brains.

We've got books now and experiments now called The Blue Mind where they're now doing actual... studies on blood flow and oxygen flow in your brain and finding that you can modify your DNA. We got a guy who can teach you how to breathe that changes the pH in his blood. I mean, we've got so many different things out there that AI is allowing us to see, but we're forgetting that we have to get up in the morning, we have to serve somebody and we have to earn something.

And that's EI, absolutely. And the only way that's going to work is... Damn, John, I hate to do this, but I trust you. Give me that damn thing. I don't care how much it costs. It's interesting because Tuesday we put the blogs up. You're going up Tuesday, and we have a new guy by the name of Tom Barry who has been with Comanche Dealers and a whole bunch of different things. And his is all about a sales story. And it's a wonderful story because it's all about knowing what the customer wants. Letting competition do their damnedest. Make their presence. You go first. Just let me come in on the back end. And that would be the end of the discussion. And that's knowing. That's not AI that you can get from an algorithm and a computer. That's you're walking around between your ears, AI or IQ or EQ. You know, there's so many darn things here, but it's where people first. And I think we've lost that market share and equipment.

Parts market share in the last 50 years has gone down by 50%. And yet everybody's business volume is higher, in part because we have price increases. The other part is we have fewer people competing in the marketplace. And so everybody feels fat, dumb, and happy we're doing real good. My sales last year were up by 10%. Congratulations. I'm giving a talk in Mississippi years ago. It was to a bunch of cat dealers. And we had the guy that was in the room who was responsible for North America. And you know me in a room, I wander around with a microphone. I talk to everybody, stick it in their face and got 100,200 people there. You can't hide. So we're talking about market share. And I go up to this guy and say, I know this is a controversial subject, but would you mind me, would you mind telling me what your market share is today for parts? in the United States. And he said 38 point something percent. I don't remember the point.

And I remember in 1969 and 1970, the market share for Caterpillar dealers was 83% of the parts market. So from 1970, make it easy, to 2010,40 years, market share went from 83 to 38. Was anybody complaining? Was anybody making noises? No, they're sales by on fire. They're making more money. Everything's cool. But that means over time, congratulations, go another 40 years, what's it going to be then? 15 %? Where's the bottom? Or as we're about to see, the steam engine is being replaced by electric. The distribution channel we're used to now, because of AI, because of EI, because of all the tools we got, we're going to be disintermediated. The buyer is going to go directly to the producer. And there will not be a distribution channel in between. That'll be fun.

that's. Yeah. And what I've been saying for years, almost my whole life is whoever's closest to the customer is going to win. And that's exactly what you're saying. You know, that that agriculture example is perfect. Because you've got two really intense periods of time where get out of the way, that machine's got to work. Forget it. If it doesn't, the crop's going to get destroyed. My father is saying one of the most beautiful things in the world is watching your wheat field, ready for harvest, getting destroyed by a hellstorm. And then you've got to go to the bank and say, I need some more money. Those days are not that far away.

Yeah, and to that point, that walks us into the... The dealer management systems, the ERPs, et cetera. And one of the things you and I have been a little bit distressed by over the last 20 years, Infor, Microsoft Dynamics, SAP, JD Edwards, DIS, EBS, CDK, eEmphasis, they're systems people now. They're not dealer business people. They are selling tools. without understanding what the application for that tool is. And it's becoming painfully obvious when you look at the installation. They have a vanilla approach to it. This is what we do. This is the end of it. And they don't really, if the dealer asks a question, my suppliers give me stock orders in three days. What changes do I, you know, what do you got it set for? We got it set for two weeks. Well, I'd like to change it to three days. Oh, we don't recommend that. Why not? Don't know. Why do you want to do that? Okay, so that's the defense step.

And John, you go back 20 to 40 years, every single one of you guys selling software, well, look at the founding of PFW. They were dealer people. Look at the founding of DIS, EBS, all of that stuff. They were all dealer people. You'd have user conferences and you'd be trying to garner. From the customer, what the heck they wanted and needed, and that's how you develop your package. Don't see that happening anymore.

Oh, it's always happening. It's always happening somewhere. But if you look industry-wide, this industry is being poorly served. Automotive industry has got two suppliers of software. Congratulations.

Well, the other part of that, I guess we're also in transition on, it used to be that you would put together a product, whatever the product is, a tractor, a dealer system, an engine, whatever it is. And you're going to spend $2 million putting it together and your expected life on that thing is 10,15 years and you're going to have a return on that $2 million of X. That product lifecycle today is measured in weeks and months. You know, if you look back to 1980, Time magazine, I think, had, you know, here come the Japanese Komatsu was arriving. And it took them a long time. Toyota, Japanese cars, it was all metric. It wasn't English measures. Hardware, holy mackerel, what are we going to do with this stuff? So it took 20 to 30 to 40 years. Here comes Korea. It took five to ten years. Here comes China. You know, except for distribution channels, distributors, products are moving very, very quickly today, in part because of AI.

Dealers are almost intimidated by it. It's moving so fast I can't keep up. I mean, I can't tell you how many people in my generation are looking at their phones. And they don't want to change from an Apple to an Android or from an Android to an Apple or to a Google or whatever, Pixel, or whatever the hell it might be because they don't know how to do it. My wife is so used to her games on Apple, even though I might have a superior product for her, she will not change because it's too much of a hassle. And again, it's a value proposition, isn't it? She's comfortable. It doesn't matter. And it's, you know, I... I think you've heard this story. When Marlene was pregnant, we were a little older, so the pregnancy was a little overdue. So she was in the hospital a week or so before the birth. But she got a pass on Saturday. So I'd pick her up in the morning on Saturday. And we went. She loved scampis. And I made scampis that were particularly good.

And there was a fishmonger we went through. The guy was about 6 '2",6 '4". This is in Montreal. He's got a mustache. He's classic French. smooth and as silk. And Marlene's looking at the count. And there's three different sizes of scampi. She looks at the small one. And she says, how much are those? And he tells her the price, I don't know,10 bucks. And then the middle ones, how much are those? 15 bucks. Then she looks at the third one and she says, how much are those? And he leaned forward. This is first thing in the morning. His apron is... perfectly white, brand new. He leans forward and he looks her in the face and she's out like the size of a house. He said, Madame, it really doesn't matter, does it? Guess which side do you think we bought? It didn't matter. You know, and that's the EI of the world. And it's, you know, the best campings in the world come from Scotland, my opinion. And I can be overruled on it. Everybody has opinions.

It's like noses. And the reason that they're good is it's cold water. Salmon. I like smoked salmon from Quebec rather than from British Columbia. And, you know, there's all kinds of things. Why do I like EBS or E-Emphasis? Why do I like Intellidier or Extent? Let me change the terminology. Why do I like Discus or Quipwater? It's all personal. And it's all understanding. And nobody in my mind knows the inside of the MS systems to the point that they can defend or offend on every aspect of it.

Which is why I say systems are going to change. We're going to have a hub of financial data in the cloud. Somebody's going to own every single one of those data elements. Nobody can touch it except for that person. And we're going to have specialty software coming off it, just like an octopus. Every arm, there's Salesforce, there's CRM, there's inventory management, there's pricing module, there's market share, there's management reporting, there's metrics, blah, blah, blah, blah. And we'll buy the best in class. And, you know, it might be something that we change every two or three years. Doesn't matter. Like how often do you change your phone? How often do you change your earbuds?

So let's use that as the final chapter, because I think that's the answer that everybody has been looking for. We're not going to have anybody that's going to have the answer to the maiden's dreams. It'll be able to satisfy everything, but we're going to have that core. We're going to have that central, that CPU, your brain. It's going to be there in the cloud. It's going to have all of the essential things, whether it's static data or dynamic data, I don't care. But, okay, we want sales management. And you're going to go out and you're going to look at three options. And you're the guy that authored this, and I like the approach. We're going to be able to find somebody that gives us the answer that we need at a value proposition today, and we'll buy it. We'll partner with them. Or if there's nobody there, we'll create it ourselves if it's critical. And those three decisions, I think, are where we're moving. Is it out there? Is it good?

Do I want to buy the product? Do I want to buy the company? Do I want to partner with them? Or, gee, there's nothing out there. Is it something I need to create myself? I think that's where we're going. And I think that's a very smart. approach that you bring to the table. It's not that we have to create everything like we had to do 50 years ago. There's people out there that have it. Salesforce is a good example. Target's another good example. Maybe Texada is another good example. There's a bunch of them out there. IBM, they really don't make hardware anymore. It's a very different world. So, gee, I want something to do inventory management. And you can walk through these things like I can. In the 60s, when IBM came out with their distribution package, they had a thing called IMPACT, Inventory Management Performance and Control Techniques. It was created by a guy by the name of Robert Goodle Brown.

It used unbelievably heavy-duty statistics, and nobody at the dealership understood what the hell it was. But everybody bought it, all the big guys. And that's how I got into the business, because it cost the dealership that implemented so much money. They say, wait a second, this is wrong. How do we fix this? And nobody knew. In those days, it was assembler programming. And, you know, how many people just think about that today? You want to talk about a dinosaur? I used to stand with my butt to the printer and hold on to both sides of the paper as it's coming off the 1100 line a minute printer, reading it. Or we had, oh, then it went to Fortran. Oh, then it went to COBOL. Now you've got English language. I mean, things are changing. But now no one person, no one company has the answer to everything. They have an answer for pieces, which is what you're saying. Who's got the best piece? Who's got the best tires? Who's got the best windshield?

Who's got the best and most comfortable seats? Because I'm going to make a car. And just to put a little link on the back end of that, the size of the railway tracks today. across the world are determined by the distance between the wheels on the Roman chariots. That's a truth statement. 5,000 years later, imagine that.

absolutely. Yeah.

Okay. And let me just make that a little bit more obvious. In Canada, when I started in the business, there were 10 Caterpillar dealers. Today, there's two. And in Canada, when I started, I can't tell you what the number of John Deere dealerships were, but in the construction world, there's one. Volvo, there's one. It's a very different world. And yeah, the middle tier, the middle kingdom is what China was called 3,000 years ago. It's kind of an interesting place to end. So I don't know that we solved anything. I don't know that we've got very many more people that are either more firm in their opinions or less. It doesn't matter. I just want people thinking about what we're talking about, because this is an area that is serious. Artificial intelligence, in your blog, you say it very well. And that we are able to look at AI as data, intelligence, and modeling. AI as passion, wisdom, and instinct.

And I don't think we're going to bridge that ever. People are always going to be involved.

watching the sunset.

And with that, thank you very much, John. It's been a pleasure. And I hope everybody who's listening, thank you for listening to what we've been talking about. And I hope that you are with us at another Candid Conversation in the near future. Aloha. Bye now. please don't hesitate to contact us at www. learningwithoutscars. com. The time is now. Mahalo.