Episode 14: Retired U.S. Air Force Brigadier General Balan Ayyar

Informing your decisions with intelligence analysis and insight brought to you by the team@ooda loop.com.

Hello and welcome to the oodacast. Today Balon IR Balon is the CEO of Percipient. How are you doing, Balon?

Hi, nice to see you, Bob. Great to see your team.

Yeah. And I wanted to give our viewers my view of your bio. You know, I met you after you had already left the Air Force and was incredibly impressed with what you were doing with your company. I want to talk about your company, but then I read into your background was even more impressed. And those few conversations we've had, your thought leadership in multiple areas is great. Your background was Air Force. You were a pilot trained on many platforms. You flew for years a general officer and if I understand correctly, you were at one point in charge of all Air Force recruiting, Is that correct?

Yeah, I had a great time. What a wonderful. You can just imagine this is more than 10 years ago, but it was a spectacular experience.

You know, the Air Force is many things and you know, a lot of hardware, a lot of platforms, but what the Air Force really is is people and leaders. Right. So that's how you grow and maintain and build the future. Air Force is recruiting, right?

I think that's right. I mean it's, as you know, your background is similar, impressive background in the profession of arms. But it the ability to think with a degree of uncertainty and to be able to kind of have clarity of purpose and to have the kind of confidence to act when the nation needs you to act. These are the things that are really powerful in war. And that's of course who we're looking for is young men and women in America who can be responsible at that level. And so I thought it was a terrific, terrific experience. And it just reminded me that as you know, in the Navy and certainly in the Air Force, it's the. And of course the army center mass of the nation. But it's, you know, people are the number one weapon system that allows us to win. Right.

Yeah, it is.

Alexander knew it. Everybody knew it.

Right.

Better to. What is Alexander the Great used to say, you know, better to face an army of lion led by a deer than an army of deer led by a lion. Right. Knew the power of inspiration to allow people to achieve extraordinary results. Right. So leaders and leadership. Yeah.

And you know, my partner and our CEO here at OODA, Matt DeVoe, frequently says similar things. He comes from this hacker background, red teaming. And he would underscore that the target is not the computer. The target of the red team is that individual sitting at the other side of this system.

That's exactly right.

Which, so before we get into it, you know, we, we named our company as an homage to an Air Force. Yeah. And you know, the OODA Loop. And I just wanted to take the opportunity to ask you, what do you think of what is the OODA Loop to you?

Well, you know, I, as I mentioned to you, I think previously, I think of this as about how you look at the world, right? How you constantly learn, how you understand your interaction and engagement on the things that are important to you. If you're not doing something akin to the Ooda Loop, you're probably being outcompeted, you're probably being out thought, you're probably being taken advantage of by the world. And it's, it's within your power. Right. These are limitations that you impose on yourself. The mental frameworks, the experience. Sometimes your experience can be a limitation. Your ability to learn and be open to. And this is what this OODA Loop reminds us of, that you have to be an active observer, you have to be understanding the world around you. And then you have to orient to that world and understand how it may be different than what your expectations were. And then based on your values and your experience, you have to make the best decision you can to stay ahead of your adversary. You know he was talking about air to air combat, right? This idea that you are constantly making decisions impact your energy and your position in relation to your ability to kill your adversary. Of course, in the private sector, thank goodness we don't do any killing of adversaries, but it, but it's very much applicable to the way that your business strategy, the way that your understanding of your customers, the way that the environment is changing around you. Just like for both of us in COVID 19, the environment's changing around us. It's one thing to believe that we're going to come out of it exactly the same way as we came into it. It's another thing to think of this crisis as having both risk and opportunity. Leaders using your approach will take the latter, which is it has both risk and opportunity. How can I minimize my risk in this crisis while seizing the opportunity to strengthen my competitive advantage against my adversaries, or in the view of my customer, to help them achieve and succeed in their missions in this new environment? So this idea that you should be able to do both, manage risk. Interestingly, we're talking about China. China has one character to represent crisis, and it's the combination of the character that represents risk and the character that represents opportunity.

Right, yeah. Fascinating. And these views are exactly the kind of things that I wanted to hear from you. And. And this applies to corporations, to businesses, to individuals and our nation. And I think you're uniquely positioned to give us some thoughts on what this current Covid crisis might mean to some implications for national security. Because one thing I'm sure of, if we think we're going to keep doing the same thing, that's got to be the wrong approach. Things are changing fast because of this crisis. I mean, the. There's pressure on the eu, there's pressure internal to many countries, some of which may break apart. There's regional tensions that could spill over into war. There is a new push towards nationalism because of the COVID crisis that was already out there. Globalization may have reached its peak economically. We're seeing food shortages in some parts of the world and other places. There's food security issues as well as the price of oil just a few days ago went inverted for a while.

Yeah, nobody wanted to make contracts. Nobody wanted to actually take delivery of oil. Yeah, we had too much. We had too much oil in storage and there's nothing to do now that the future contracts are a little bit better.

Just came out with a report saying that the national security strategy of the nation needs to change. And.

But, Bob, listen, it's easy to paint a picture that, that suggests that this kind of crisis has never happened before. It's epic and there's many changes that are coming. I'd actually just take a second and reframe that for you. I do think, first of all, there's a lot of love and compassion and generosity of spirit that's unfolding right before our eyes here just to bring the nation to its knees economically in order to protect vulnerable members of our society and our citizenry. This is the mark of a great nation. Right? This is what. This is what great nations do. They sacrifice for each other. Now, how we do that and could we done that more effectively? Those are great questions that we all probably need answers to so we can be better prepared the next time. The second thing that's quite positive is it's also, you know, we might have thought about national security a certain way a few months ago. We think about national security differently now. Right. There's very few things on the national security front that could have brought our economy to its knees. Our own will to protect life is what ultimately did it. But the question about how we're going to address these threats I think is very helpful. To us, this could have been much more catastrophic. The number of people that we're losing, not insignificant, but truth be told, compared to what we lose to cancer, compared to what we lose to influenza, compared to globally. These are the kinds of threats on the global health front that we're going to have to get better at. It turns out these viruses don't know where the nation state stops. They don't know the color of your skin or what language you speak. So we all have to. In some ways, these kinds of threats help bring us together as one race, the human race. Right. And our impact and engagement with the environment are important for us to think through. So there's a lot of positive that will come out of this, notwithstanding the very, very real challenges we're facing, both with the loss of lives, primarily for our elderly and those who are immunocompromised, but also for the way that we look at social interaction and the transmission of these times, these types of potential viruses and how that may change us. I happen to be very optimistic based on the amount of love and generosity of spirit I've seen. I think we're going to come back. I think we're going to be smarter about, you know, when these influenza, seasonal influenza and other things come up, from washing our hands to keeping social distance, to staying at home when we're not feeling well, we're going to do a lot better about the transmission of these types of threats. Now, on another level, to your point about what's happening in different nations, what I found to be true almost in all respects is that people will tend to search for the facts that best suit their understanding of the world. And if these kinds of situations can reinforce the drive toward a more nationalistic approach, then no doubt they will seize upon them and they'll play that into their approach to their elections or to their approach to foreign policy. And I think we just have to be cautious about, as a nation, we typically are fairly thoughtful because we're divided in the way we think the nation ought to be led. But, you know, I'm hopeful that we'll be able to see our way through this and let the kind of higher tendencies of our nation be an example for the world, as I think they have been. I really think they have been right. We've shared information we're sharing with other nations who are less fortunate. We're trying to get a very graduated approach to dealing with these threats, certainly vaccines and treatment protocols, but also things we can do as a nation that required shared responsibility and shared sacrifice and so I'm optimistic. There are a lot of things you just talked about there though that probably each one could take a full podcast to discuss the implications of. But we are looking at national security differently, I can tell you that.

That's good. And a couple other things I'd like to ask you about now. First of all, your company is squarely in the artificial intelligence space. I've seen what you do and you have real capabilities that leverages some of the greatest American technology there is. And most of the use cases I saw with your technology are about helping decision makers who are right now being overwhelmed with loads of data. How do you see the right thing and make the right conclusion and come up with the right assessment? I want to ask you first of all, if you could tell me about percipient, because I want to make sure I captured that accurately. And then I have a follow on question about AI and how it may be useful to helping to restart the economy.

Well, it's very generous of you. The latter question is probably more important to your colleagues and to your listeners. But the first question about percipient AI, you know, we are, we do believe that understanding the world more precisely and allows us to be more decisive in a way that strengthens our values. We think that human and machine teaming on the toughest challenges is what's ahead for us if we want to protect, defend and ultimately ensure our values continue to be the choice that free nations have. And so I feel like this idea, this big idea that we have to have a standard bearer in software for human and machine teaming where the human is elevated or the conscience or consciousness of the human to make values based decisions and is strengthened to be able to understand the data which as you know, is growing. And some people would say it's just, it's almost, it's almost incomprehensible. How much data is out there, depending on the risk you have in a mission, how much you may want to know, but the ability to look a little deeper into the data that we have, the history that the world is presenting us in order to understand what patterns and anomalies are unfolding so that we can properly assess risk. This is very important work to the national security and intelligence space. And what I saw happening when like you, I was serving was that we had much more, much more data than we could possibly understand in the time we needed to understand it. And so our hope as a firm is that we can present some capabilities to help our most precious organizations on the far edge of the defense of Our values and our system of government and our freedom to be able to understand just a little bit ahead of our adversaries and our competitors and rising pure nations so that we can make better decisions, really preserve the freedom of action so that our values and our example can influence in a non kinetic way the world in a much more positive way. And I think our ability to understand precisely and decisively ahead of our competitors is also the difference in business. So we have, besides an SQD intelligence space. Once we're at scale there, we hope to bring these capabilities to the private sector more directly. We have capabilities to look at the world and understand the world. That's as much as I can say now for you that might be of interest to your team. These are what we believe. That's the premise on which we built a company. It's very unusual to have venture capital focused on missions that are primarily national security and intelligence community decisions. We've got an enlightened group of advisors that believe this is very important work that we're doing and we ought to have the best people in the world technically working on these kinds of challenges. So we're very excited to present our capabilities. Our core customers are thrilled with the efforts. It's a slow, long effort of validation and confidence building with our customers because the stakes are very high in their missions. But we're very excited by that. Now, the second part of your question and I welcome if there is a further time when any of your colleagues are interested in the space we're working in. Precisely. I'd be happy to do a demo and show them some of the capabilities. But suffice it to say, we, like you, believe human and machine teaming is on the forefront of what it'll take us for us to win. And we think the capabilities we're providing with machine learning and computer vision across ground, air and space sensors can be very helpful to many, many agencies in space on the way that AI is changing our society. Was that the second part or was it. Well, I want to now ask any.

Thoughts you've had because I know you've looked at all AI. It's just your nature and we have. The economy now has been slowed down really significant. And it's going to be hard getting everything restarted. It just is. And some industries are going to totally disappear, I'm sorry to say. Maybe some of the entertainment will be changed and others we got to get back fast.

Right.

Wonder if you had any thoughts about how AI in general can help us reboot the economy and get it moving.

Well, you know, AI is working already in so many ways, Bob. I'm hesitant to say that Netflix makes it a better world, but just understanding. There's a great book you guys probably have read already, but I recommend it to people who want to understand technology and the technology firms that have been most successful. Zhuboff's book on the age of surveillance capitalism is highly recommended. But this idea of behavioral surplus, you know, many technology companies have been learning about us trading convenience for all the knowledge we give them about who we are, what we believe, what we're interested in. And they found a way to turn that into things that we find interesting. And at a price, of course, that earns them a profit. So the very precise advertising, for example, that Google does against what they think we're interested in comes from the information we share with them. And that idea that they've created a behavioral capitalism market means AI is working to make it a more convenient place for you to live and work. Now, there's a very open and important question about trust and about what we've traded to these companies and whether we knew the value of it and whether they were completely upfront about what they were using that data for their purposes and intent. As a firm, we're very interested in our clients knowing exactly what their purpose is that they're trying to achieve with the data that they collect, and that they have a transparent, authentic, and verifiable and ethical way to examine that data. And we think that in the future, between technology and humans, and humans and technology, that trust is going to be very important. And that's why so many companies that don't really honor the trust are in trouble now and will continue to be in trouble with fines and other kinds of challenges from the government and from society at large. But to your point, listen, AI is working every day to make the world a better place in various ways, from how you use energy so you can spend less money on your energy bills, to what you're watching on TV being, or maybe even on Netflix or one of these private providers being influenced by what they know you like. Now, we would like to see AI helping us in many more substantive ways as we talk about in health care, where the earliest indications are computer vision in health care is going to help us kind of check the choke point of radiology, in some cases, informing and creating a higher level of early recognition of cancer, as an example. But in addition to that, looking across all the different treatment protocols for several of the diseases that we face in different forms as people and being able to understand what protocols are most efficient over time. So you can imagine AI really being beneficial to the experts that understand the values that are in play, be able to look at large amounts of data, to understand more deeply into the data what may be in play for people. Whether there's the treatment of their healthcare or whether it's the decisions and options they may have in investments, AI is working for us. You know, the question that I think we've got to really understand is that the kind of generalized AI that many people are worried about from Balin's perspective, hey, listen, really bright people disagree on this. But from balance perspective is many, many years off. What we're really talking about now is kind of very narrowly tailored, very powerful compute and imagery processing and other types of algorithms that can help us solve specific problems not without risk, but better able to understand as much data as can be understood about a problem that we're solving. So if you ask Balin, I would say that for most of the complex problems we're facing, we're looking at the next dozen years or so at a wonderful human and machine team to help us foundationally know what can be out there and then to apply our value judgments and experience as humans to that data.

Awesome, thanks. Great context. A couple other questions I'd like to ask you, please, if you don't mind. Any other lessons from you as CEO of your company that might help other CEOs who've been struggling to pivot to this new economy that we're in. Any advice or thoughts for other CEOs?

Well, you know, in a strange way and maybe non obvious way because of all the information out there, knowing who to trust and what to trust is become kind of the currency of the realm. And so I would say first to CEOs kind of know what you're selling. You know, Beckwith, I love this book, Beckwith. When I ran the recruiting service, I gave it to all of my top sales folks because what, what Beckwith argues and I believe in is that, that really what you're selling is not a product you're selling. A belief in you and trust in your understanding of your customers issues and problems and your, your commitment to respond and to resolve when you sell a software or when you're providing hardware and you should know that you should know the brand is much more important than the transaction. And this idea that as the CEO, you want to kind of very quickly be agile and transact at a higher level, maybe charge more for this, charge less for that, that's kind of very Narrow and short term view. What I think every CEO ought to be doing is as much as we can looking into this new arena where our customers are and what their additional either friction points or challenges are, and asking ourselves how best we can respond, how best our products can change, how best our pricing model can evolve, how best our validation process can change. So there's a period of self reflection, I think required from every company right now. And if you're not doing that kind of self reflection, I guarantee you your competitors are. And so you should know someone else would be servicing your customers if you're not. Your competitive advantage typically is much thinner than you think. And this idea that you want to have a little bit of paranoia about whether you're doing enough to recognize that the changing conditions in landscape and environment and competition, it's worth reflecting on. I think the question you're asking me though, about as a CEO, first thing is it's trust with your customers. The second thing is this is a time that I think you ought to be very precisely focused. You know, it's very easy to think about the 10 or 15 or 20 things you could be doing to take advantage of any situation. I think the ones that are really going to win are going to be focused on the one or two areas where they present the most distinguishable, credible, competitive advantage for their customers. And so this is an area where the guys and girls that can focus precisely where they are, where they're most distinguished, those are the ones that are going to make the most progress relative to their competitors. So this is an area that takes a lot of tenacity, perseverance and focus. When you can bring clarity when everyone else is in chaos, that's when everyone wants you as a partner.

Right, right, right. You know, there were a couple other questions I was going to ask you that you've already answered in this discussion. For example, I love asking people, what book are you reading now? And now I've just. I'm able to look at your desk and see you got two there. I have a whole bookshelf full of.

Them and, well, I have a few. I'm not reading as much as I should be. Lately I've been focused on spiritual things for some reason. But I do like Simon Sinek, who's an old, you know, colleague I brought 15 years ago to speak to my leaders when I was a commanding general in the Air Force in the recruiting service. I like this infinite game. It's a little bit like David Brooks argument about character. The second mountain. If you haven't read the Second Mountain, I'd recommend that. But this idea that who you're becoming as a leader is as important as the material game that you're competing in to win business is really profound, and it changes your time horizon for how you look at problems. So, you know, I think you got to constantly be trying to improve yourself. I feel like that is a necessary part of being a CEO is ensuring that you are, you know, you're still learning, growing.

How do you find the next book?

There's a few ways lately, you know, surprising. You're gonna find it funny, but this is an old one. I like Peggy Noonan. I thought I'd read this book, but I. But I just picked it up again. Peggy Noonan is one of the opinion writers for the Washington Post or Wall Street Journal. I can't remember which. But what I find typically, is when I'm, you know, reading the four or five things that kind of keep me abreast of what's going on in the world, I'm always. There's always something I pick up on that hits at a book or a challenge, and then I just do a quick little bit of research about where I think the best writing on that problem is. So I don't have a. Like a recipe card for it. I tend to kind of follow my instincts when I'm reading about things I should know a little bit. Like, lately, I've been. I mean, it's going to sound stupid. I've been looking at art history, and there's some fantastic stories about art that have real relevance for where we are with these technologies. I know that sounds like a stretch. We'll save it for another time. I'll make my argument.

Okay. Because this is fascinating and I love your approach to books because you can just sit back and let them come to you, or you can go out and hunt for them.

You got to hunt. Yeah. You got to be on the hunt. Listen, you're either being hunted or you're a hunter. Right. And so you have to keep moving. Like in cyber, you'd say moving target defense. Right. One of the ways you can best be more difficult to pin down by an adversary is if you are agile. If you're inside of your adversary's hoodaloop, it's almost impossible for them to gain positional advantage. Right. You're making decisions quicker. You're orienting to their environment, to the environment faster. And so this idea that you're constantly increasing your both energy, your angle of attack to your, you know, to your. To your opponent or to your to your customer. These are things that you have to be doing as a CEO. So I think your framework for how you should be constantly challenging and understanding the environment is exactly right for CEOs.

Great. Hey Balon, I really want to say I really appreciate the time you gave us today and we'll write this up. We'll get it out on our sites. We appreciate you being a member of the OODA Loop.

Hey listen, if it doesn't make the site, I've enjoyed the conversation and I look forward to seeing you again. I know you've got brilliant leaders that you have in your network and I think we can learn from each other. There's nothing really insightful or original that I said today, but I enjoyed the conversation. Awesome.

Well, thanks.

Bye.

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