AI in Digital Transformation: Focusing on People First with Suriel Arellano

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Growth Blueprint Podcast. I am your host, Mark Osborne, and today I'm very excited to welcome my guest, Suriel Arellano. Now I'm going to read Suriel's bio because he's done a lot of great stuff and I want to make sure I get it all right. Suriel is an author, speaker, inventor, and executive mentor with over 2 decades of experience inspiring audiences with his deep insights into digital transformation and the transformative role of artificial intelligence in empowering humanity. We're going to talk a little bit today about the parallels between the digital transformation of the last couple of decades and, and what that means for the future of AI transformations. As an executive coach and organizational development consultant, Suriel combines his in-depth knowledge of leadership principles with AI expertise to help organizations navigate the complexities of digital transformation and achieve business success. His journey has been shaped by his leadership roles at companies like IBM and HP, where he developed strong industry relationships and honed his expertise in leadership, organizational change, and culture transformation. He holds a Bachelor of Science in Leadership and Management from NYU, New York University, advanced certifications from MIT in artificial intelligence leadership and Harvard Business School in business management. So he's no slouch on the academic front either. As a DiSC independent consultant and organizational development coach, coach Suriel applies his expertise in behavioral analysis to guide organizations through cultural challenges and leadership development. Ensuring that teams are cohesive and aligned with the company's goals. Suriel, welcome to the show.

Mark, thank you so much. I'm so glad to be here, honored to be in your podcast. Thank you.

So you have such an illustrious background.

I know. I was just listening to it. It's like I listen to it every time someone introduced me and I'm just, yes, that's a lot. But thank you so much. Yeah.

So tell us about that, that history. Like, how did— what was your story? How did you get to where you are today?

Yeah, absolutely. So the, the funny thing is that I've always been techie. Um, I actually, before having my, my Bachelor of Science in Leadership and Management, I have, um, had halfway— I actually had it halfway— my engineering, electronic engineering. So I consider myself a geek. I, I love everything, uh, in, in tech gadgets and everything, but About the 2000s, that was when actually I came into as a sales engineer, which is pretty much how do you translate technology into plain English for C-level executives that can understand it better and be able to sell. So that's where the part of being able to educate people and kind of have conversations with C-level managers, directors, in a way that they can actually understand technology, digest it better, and of course implement it for a better world, right? So that's my story in a nutshell.

Gotcha. And what do you spend your time doing today? Like, tell us a little bit about, you know, what you're really focused on right now.

Yeah, so if I'm not watching Formula 1 on the weekends, I support my son on the track as well. He's on karting. You can see everything is about speed and everything. But besides that, I love to just talk to people, just business owners, C-level executives, and just listen to what their vision is and how we can actually empower them through technology. So that's for me, it's been a passion. Again, like I said, I'm a techie, but also like to have those conversations and see how we can empower people through technology. So yeah, it is kind of like coaching consulting, but it's a combination of both.

Yeah, you know, it's so funny that you say that because although, you know, I work in marketing and sales, which, you know, many people think of as, you know, more on the softer side, I'm really very like you, very passionate about using data and the technology to make sense of that data so that you can, you know, really make a more powerful impact in the marketplace. And one of the biggest obstacles that I've seen, you know, over the decades is for those senior decision makers to really understand, okay, what does this really do? And very often the very smart people that are creating the solutions don't know how to put it into terms of, well, it takes this and turns it into that so that you can do this. And that's the sort of the fundamental glue that really sort of moves these projects forward. So it's so interesting to Talk about your experience.

Absolutely. Yeah, I love that.

So we were chatting a little bit before the call about, you know, sort of the future of AI and how AI will transform businesses. And you made a really interesting comment, which was that, you know, you worked in digital transformation and, you know, from kind of the late '90s until maybe a little bit ago, maybe some laggards are still undergoing digital transformation. That was, you know, one of the big projects. In fact, you know, there are entire consulting firms that, you know, generate hundreds of millions of dollars just leading digital transformation, still doing it today. And you called out a statistic that, you know, 70% of digital transformations fail. And talk to us a little bit about, you know, why that is and what were the best practices that you developed in your work in digital transformations and that, you know, you've learned from seeing other best practices as sort of that, you know, industry, you know, sort of grew and expanded.

Yeah, absolutely. And I think is important what you said is the transformation through digital transformation, right? Is 20 years ago, even 10 years ago, we were just talking about going from paper to systems, going from old school systems to new systems.

Yeah.

And although AI is nothing new, it's been since the 1950s, in, in the last couple years has been, well, AI is here, right? So now let's transform, let's bring AI and, uh, either create AI technology or, uh, integrate AI. And, uh, but it doesn't matter how the, the digital transformation is, like 10 years ago or, or just this last 2 years, uh, the— what we've seen is that the core of a digital transformation is its people, is the people component of it. And one of the things that, that I work on, going back again to, to that fusion, if you may, from people and technology, one of the things that I always realize, and McKinsey actually says that 70% of digital, digital transformations fail. Because of resistance from the people. And one of the things that I've seen in, in with many clients that most of them go and directly implement or integrate technology is that they start, if, if you recall the golden triangle, the PPT, right? The people, process, technology.

Yeah.

Most people start with technology. They try to recreate the processes And then people, it's just an afterthought. So one, one of the things that in, in, in my career, uh, and now that I'm software agnostic, I, I don't work for any software companies mostly, like, well, why don't we start? Let's create a framework when we can really start at the people component, having the, the element of people first, then the processes. And then ultimately that technology. And I think that's the part that has been crucial because more often than not, people, of course, which is the bloodline of your organization, will always be the fan or the stars of the show when it comes to new technology. Why? Because they're the ones that are going to use it at the end.

Yeah.

So that's the part that in a digital transformation, when you start with people, then look at the processes. I always say, and even before AI, I used to say is like, don't automate because automation was one of the biggest things like let's automate, automate. And I said, don't automate for the sake of automation. Look at really what your people, again, the skill set of your people, look at what they need. And once you have that, then look at your processes. Look at what processes will enable a better either performance, productivity, or even if you are like a B2B or SaaS company, right? It's like, what are the things that will improve that bottom line and then make those changes in your processes And if you notice right now, we haven't even talked about technology.

That's right.

So that's the most important thing that I consider. And of course, we can talk more about in details. But yeah, this is for me is people first. People first is the most important part of the digital transformation.

That makes tons of sense. And it's so interesting, you know, right now in the marketing and sales space, There's so much buzz around generative AI or AI in general. And oftentimes what they really mean is automation. But there's just all this buzz and there's a lot of focus on, you know, people sort of hunting for that, like that magic trick, that one growth hack. And interestingly, you know, the last button, golden buzzer, that one thing, if I just do this one thing, I'll have more business than I can handle. And interestingly, you know, if you look at the history of marketing for the last 20 years or so, a lot of success really did come from kind of first mover advantage of finding these growth hacks. Like if you were the first company in your space to buy paid search ads, then you reaped the benefits for that because you were first to go there. And then if you were the first to sort of optimize your paid search ads better than your competitors, That one little growth hack could really make a big difference. Same thing was true with, you know, search engine optimization and the first to be on the, the new social platforms and all these things. So there are people that have had a long career of success from finding a growth hack. But it's funny as I look at the businesses today that are really, you know, finding success, it's not the ones that are chasing this growth hack because there's just too many of them today. The explosion of data, the explosion of technology.

We're overwhelmed with data now and information.

That's right. And so it's the companies that build those systems or processes and, you know, that are built around those people. I love the way that you put people first and then they layer in technology, they layer in data. That's what really creates this sort of exponential growth beyond just sort of the incremental improvements that you get. So it's so interesting to hear you talk about, you know, emphasizing the people first and then the processes, then we bring in technology.

Yeah, I always say using that framework, it comes to like, for example, we live in the US, Southern California, and we usually, if you're gonna buy a house, you don't go and shop for the house first. Right? You probably talk to your bank and tell the bank is like, well, how much I can afford, right?

Yeah.

When you're seeking new technology, one of the biggest mistake I see in clients and companies, organizations is that they just go for the technology. They know that they need to come and get new technology. Why? And mostly my C-levels, I love them, but sometimes it's that egocentric, right? It's like, oh, I see my competition, doing it, I need to bring it. And usually I work with the IT director, CIO, because they're the ones in charge of that digital transformation. And I always say, going back to that part of the house, right, is once you know the bank or the amount of the type of house that you can afford, then you go shopping, right? So in the way that we have created this framework, the way we start is actually doing— looking at the leadership component, right? At the leadership, then at the people, and look at the processes. Once you have those 2 very well, then it's like we give you kind of— at the end, the deliverables is an RFP, but it's like Literally is like you now know what your needs are. That way you can now shop around with that direction and say, "This is what I need in a software." Same if you are a software provider, right? Is like you look at when you start looking instead of selling, selling just the the software, your solution. You look at the people component. Is like when you look at those. Going back to the leadership traits is empathy and looking at that. It doesn't matter what type of solution you sell because people are going to be attracted to you in the sense of like, you're really looking out for my organization, for my people. And I think that's the part that is for us has been successful with a lot of clients, even for those that they already integrated that technology. that, that they say is like, oh, well, now we have the technology. What do we do? This is when it comes part of the change management process that we help them with the leadership component, the culture, and change management. So it is, it is really, really interesting how you can go both ways in terms of if you're seeking or looking into integrating technology. Look at your people first. If you already have that, Most often than not, the people are gonna come to you and say, what, what is this? Like, this is new technology. I, I have many, many— actually, I have a client. I'm not gonna mention names here, but is they— it's an HR consulting, and they brought an AI technology where it will help the recruiters find thousands of resumes and bring, which that brings another topic that we might be able to talk as well in terms of the bias, in systematic bias. But one of the things that they were saying is like, well, we brought the software, it was great, the company sold it, it was awesome. But now that we implemented, we see that 25% of our people use it. They're still doing the old school way, right?

Yeah.

It's like, well, did you actually integrate them into your process? Did you actually make them— not to promote, but MIT brings it as X-Teams. Did you bring the influential people within your organization to actually be able to put together this digital transformation? No. So see, that's the part that sometimes— and I'm not saying that all of that is wrong, but really helps a little bit in, in when you're integrating that technology and deploying that technology within organizations. It's gonna be smooth, not as smooth smooth, but, but again, is, is gonna be less, less resistant from, from the people.

It's so interesting. And, and this is a slightly different angle, but on the same topic, which, you know, in, in B2B, you know, professional services or software with a service, People oftentimes want to sort of market based purely on the sort of cut and dry facts of, you know, the features that it's going to deliver, or maybe even the benefits that it's going to deliver to the organization. And they forget so often that there's another person on the other side of this transaction. And that person, you know, operates as a human being, which is oftentimes emotional, not always completely logical. And maybe they care more about Well, is this gonna allow me to spend less time at work so I can spend more time with my kids? Or alternatively, is this gonna allow me to, you know, get a promotion and actually do more work and spend even more time here, but be even more productive?

Right.

Like understanding those different motivations of the people. And when you think about implementing new software, what are the motivations of your company, you know, the employees in that role You know, is it that that they're trying to you know simplify the the processes, or is it that they're trying to improve the accuracy? Which of those two things? And then based on those two different outcomes, you could implement very different solutions for that. And so I think it's so important to have that empathy, really understand that sort of human element of the of the process.

Yeah, and and that's actually why we came up with this process. And if if I mention a little bit because I think it's going to help for people and and most. Also, if, if you're an executive and you're, you're viewing this or listening to this, is sometimes we feel— and in my book, uh, uh, which I know we'll talk a little bit more about it, uh, at the end— but is the, the part of the empathy, the part of the leadership traits. And I know some people within organizations think that, okay, we're bringing this software either because someone at the high level C-level executives decided just to bring new software. And some people say it's like, okay, always at the top, right? Is the fault is always at the top. But sometimes at the top, we're struggling with those decisions. Is it I want to keep my people? I want to keep the— because I know the bloodline of my organization, my business is the people. But is the technology that I bring going to bring me costs down? make my people more efficient, or how do you regulate both, right? How do you balance out? So what we've done is create a framework where we start with a people component, but at the first level or at the top level. And in this framework, we have what is the culture change. We start with culture. Like we've said before, is The last topic that I usually talk to people is, is the technology, right? I always go with people. So the framework is you have in a culture, in a culture of innovation, right? You always start at the top where you have your culture shifters. And this is where I call the— actually, a new book that is coming out is you have the culture shifters, you have the culture changers, which are your managers. And then you have your people, which are the culture bearers. So when we start with that framework is I like to start with the culture shifters, right? The ones that are gonna change the, the ones that are thinking of bringing new technology or even creating new technology in their organizations. So at that level, we said, okay, perfect. Let's see where you are in the readiness aspect, right? If you're gonna bring AI, for example, We created an assessment, a readiness assessment, where it says, okay, out of your leadership team, let's see from 0 to 5 where they are on the spectrum of readiness. So we created a 5-minute survey per se, but it's a questionnaire with different aspects on the AI readiness. And then if your management team or your leadership team are under 3, basically 3 is the threshold. Then if they're over 3, from 3 to 5, they're ready. They're ready to have that conversation. They have a healthy culture of innovation. They're ready to implement. And even if you, you are a solution provider, this framework can help you also navigate this with your clients. But we can talk about it, where to find this framework. If they're under 3, that means that they're not ready. And one of the things that we've seen in digital transformation, and, and again, MIT brings it really specific, is when you don't have your leadership team involved or they're not ready, there's gonna be within the, your culture, you're not ready for innovation. There is gonna be some toxicity there, that some pullback, some People resistant to that change. So what we do is that if you're under 3, we work with your team, with your leadership team, and say, okay, within the survey, of course, we— it's anonymous unless for the C-level, right? But we said, okay, these are the concerns of people, right? They're aware of what's coming, but these are their concerns. So we have, with the DISC and different culture processes that we have, we've implemented or designed a training for those people that are under 3. And we coach them, we pretty much get them ready so they're over 3. So when they're over 3, again, the whole digital transformation, the AI implementation is a lot more smoother. Because they're all at the same level of knowledge or information, and that's what empowers more more people within this digital transformation. So it is it is really great to to to work with with with with people at at this level because you go from knowing and of course we can get into the details of of people some people believe that AI is the Antichrist some people believe that oh They're gonna— there are 2 fears most important for people with AI. One, am I gonna be replaced? Or second is, am I gonna lose control? If you mitigate those fears in terms of telling them everything is gonna be all right, everything else will go smooth in your organization.

So I love this idea of sort of organizational readiness and Because that helps you sort of systematically identify, well, where are gaps, and then you can sort of, you know, build against that. So you alluded to this before. So where do people get that? I think you said maybe this is contained in your book. Tell us about this book. Don't, don't keep us in the dark.

Absolutely. So I have it here with me. So it's Leading in the Age of AI and is a guide. I always say this is, this is not for, for those that If you, if you want to read a novel, this is, this is not your, your novel. It is a very short book, but is in, in my 20-plus years of experience and working with people, having this certification from MIT and AI leadership has also helped me into providing more. So the book has a lot of, of not only on the theoretical part of leadership, But how to implement those leadership traits when you're either, like I said, integrating AI technology in your company, or you are creating AI technology or solutions within your company or for your clients. And we also have a companion.

Okay.

Let me just put this kind of here. So this is the book, and this is the companion. This is the workbook. And basically everything that is in this book, we have it, but with exercises that you can do with your team.

Yes.

And they're available on Amazon, Barnes Noble. So you can go to my website, studiolarellano.com. But I think the combination of both is we really— I really made them some really quick exercises. And I even have some critical thinking there. that actually make you think is like, okay, if I do this, going back to the systematic bias, right? That sometimes that's a whole topic that we can get into. But this basically will help you to look at the inventory on your people, the people's skill sets, the culture that you have, if your culture is ready or not for AI integration. So I think is If if this is something that that you know your audience like, they can send me a an email or they they can subscribe to your podcast and we can work on on something on on the book and and the workbook.

Sure. What's that email address where they can get in touch?

So if they they can go to hello@surielarellano.com. So that's That's our catch-all. And if they reference your podcast, we can just send them a book. Oh, wow. That's a good offer. They will receive the book. And of course, they need to follow you and follow your podcast. And of course, we'll send them the book and everything. But yeah, I think it'll be a good start if you're planning on integrating AI or start a project in AI, I think it will be a good starter.

That's such a generous offer. Thank you. And it's, you know, given that we work with a lot of companies in sort of that marketing and sales piece, you called out something there that I think is just so valuable, which is the ability to really come in as a consultant to a company. So for, you know, anyone that's listening that, you know, they offer a product that is a technology, maybe it's AI, technically technology, or maybe it's just other more traditional technology or, you know, software as a service. They're gonna chase a lot of really bad deals and find a lot of dead ends if they don't know how to sort of lead their prospects through this sort of assessment for readiness and then identify those that are ready and then focus their efforts on selling to those. And then those that aren't ready, by being able to sort of coach them how to become ready for this type of solution, they become that, you know, sort of trusted advisor and real consultative person. And, you know, certainly gonna win a lot more deals than, you know, the other person that's just out there moving on to the next folks. So I love this framework and I love the way that you're offering it. So thank you so much. That's great.

Absolutely. Yes.

So I have to ask, so you spend a lot of time, you know, it's so funny, although the AI is in the title of your book and we've been sort of talking about it, we haven't really spent a lot of time talking about, you know, sort of specific AI solutions. Again, I understand why it's the people in the process that matter before the technology. But since I've got an expert here, I wanna kind of put you on the spot a little bit.

Absolutely.

Or professional services firms or, you know, software with a service. type firms. What's, you know, a promise that you see AI technologies bringing to those types of companies that you think will be really transformational and really powerful for them?

Yeah, absolutely. So one, one of the things that my team is tasked to is to find ways to, without replacing people, empowering people. And we are working on 2 2 different technologies, but have the same kind of core of in within the generative AI, if you may. One of them is what we call the agents. You, you probably heard of a lot of the agents. We started with chatbots, and now they're more sophisticated. Now they are AI chatbots. But these agents are practically what— and I'm gonna give you an example and It could be for professional services or any type of, in this case, customer service as well.

Sure.

And for example, we are integrating this type of technology for medical, for hospitals and clinics. And one of the main pain points that they have is answering the phone and schedule appointments for patients. I even myself, if I call my doctor and then is like five minutes to get someone, and when I get after those five minutes is like either they hang up on me or or I have to they they're really frustrated people, right? And now that I see the on the client perspective is like yeah, there's these people that are frustrated when they answer. Your call is because they get about 1,000, 2,000 calls per day and only half of them or 25% actually, they go through and they schedule something. So what we're creating is actually that agents that can actually answer the phone and without again replacing receptionists or replacing the people front, We're just navigating through those calls that are just— is like, what's your address? What type of medical services? When do you close? Exactly. I'm having— and this is the thing is that we're also creating agents that are good listeners in the sense of— is like, hey, I'm so anxious. I'm having a surgery tomorrow. What do you recommend? So we trained the AI in this case to be more empathetic in the sense, but also give a sense of like the same service that you provide as a doctor. You're kind of training the technology. And of course, we're not trying to replace the people component, but it's facilitating. Now when the receptionist actually gets through a call, You actually see that that call can be more effective because it's either an emergency. Of course, if it's an emergency, call 911. That's that's number one. But in terms of actually getting the call through an actual reception, is that maybe questions that are more is like I'm I I'm taking this medicine. What what did the doctor say? So conversations that are more with. With a human being are actually being created, being more effective to that particular point. So this is kind of an example of like either creating agents or what is out there that I've seen a lot of generative AI being implemented. There's a couple of other solutions, like for example, we're working for a with law firms in trying to mitigate the part of lawsuits and be able to provide more knowledge base. And we call it AILA, Artificial Intelligence Legal Assistant. So it's kind of to provide empower again, empower people to be more informed and of course mitigated those aspects of hallucination and things like that. But I think those are the things that I've seen more and more being implemented. If you are professional services in the professional services industry, that could help bring more of the quality instead of the quantity, be more of the quality conversations.

Yeah, that makes tons of sense. Well, I— we could talk all day. You're clearly an expert, and I love learning from experts like yourself, but I got to be mindful of your time.

So, Suriel, absolutely.

Thanks so much for your offer. For those listening that are interested in getting a copy of this book, again, just email hello@surielarellano.com and you'll get a free copy. Thank you again.

Absolutely.

And can't wait to talk to you some more.

Yeah, absolutely. Mark, thank you so much. Honored to be here.

Talk to you soon.

Take care.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story, send us a note. Let's schedule a conversation.