Why Over 90% of AI Pilots Fail, and What Wholesale Distribution Can Learn From It

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Welcome to around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by LeadSmart Technologies. Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents, and the global wholesale supply chain. Whether It's M&A SaaS and cloud computing, B2B, E commerce, or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most.

Guess what? It's football time tomorrow. College football is back.

Okay. Boy, way too early for that.

You're not excited?

No, I'm not really. It's like too early for that. It's, it's just doesn't seem like summer went too fast.

Too much summer left.

Yeah. There's too much summer left. Yeah. Okay. Well, I mean, when football comes to start getting dark earlier, I just, all those things I don't want.

Yeah, I, I think you're, I think you're right with that. That, that is true. That, you know, that is always, for me, the getting dark early thing is always kind of a struggle throughout the year. It's like, oh, oh, it's. Yeah, it's no fun.

Before you know it, it'll be Thanksgiving and then it'll be Christmas. And weren't we just there? Like, didn't that just happen?

We were talking about this earlier the week right in, in our EOS meeting. Is that it? Just the pace of things. Right. When we kind of look at some of the goals within the company and the expectations of things we want to get accomplished is like, where did this year go? And before we know it, we're going to be at this place that we're planning for.

Right.

So it happens fast. But anyways, yeah. Tomorrow my University of Southern California Trojans play Missouri State. So back to going into sick, like.

A big, big game.

Well, second, second year into the, second year into the Pac 12, top teams going into the Big Ten, which get me started on that. I still think it's a stupid idea. But you know, it's funny, normal years, last two years, I've had far less the focus and excitement about college football that I normally do because it just, you know, as I was talking to somebody the other day, it's kind of.

Getting paid this year. Is this the first year where people can pay them?

Yeah, your schools can actually have payment besides the nil dollars. And you know, I'm just, I'm going to leave this right here for anybody that's with us that happens to be college football fans. Call Me crazy if you like, but I just believe if you want to get that nil money, give them. Give them a quarter million dollars a year right now. Put the rest in a trust for when they have a degree and they're 25, you know, and then if you want to transfer through the portal over and over again to find a better school for you, then show us how many units you completed towards graduation before you move. So.

All right, sounds like a good plan.

Again, the NC2A has not asked me my opinions on this, much like the economic opinions that you get from this show each week, but.

So who's ranked number one starting the season?

You know, I gotta look at it. I'll just tell you real quick. It just, you know, I don't pay close attention until we've been playing football for a few weeks. But let me see here. I'll just tell you fast enough. There we go. Texas is number one. Penn State, number two, Ohio State, three. Clemson for Georgia, five. And it goes on from there. And close.

The probability is of Texas winning the national championship at the end of the year.

I would say it's low. And I would say that you have to. You know, Steve Sarkasian doing some great stuff there. And, you know, former USC coach, he had some pretty serious personal problems that got him bounced out of la, but seems to have those under control. And he went to, like, Lane Kiffin, who's doing great now at Ole Miss. They went to the Nick Saban USC coach rehabilitation program. Okay, so Nick Saban at Alabama a number of years ago, was taking in all the coaches that got fired from USC and bringing them in as assistants. And now you've got, you know, Sarkeesian doing great stuff at Texas. I think the issue here is what. What does. Was it Colt Manning do? The Manning, the other Manning brother, he's the one that's been equal or higher. More financing a brother or a son. So the, the. The Texas player. And is, um. Is this. So there's three. There's three Manning brothers.

Yeah.

Right. So Arch is who I'm trying to talk about. Arches. This. So three Peyton. Three Manning brothers. Peyton, Eli. And then I can't remember the other brother's name. He was a good athlete, but not a college football player, pro football player. He went into venture capital and private equity and Ton in real estate. Hugely successful. And now he and the other brothers are doing some stuff together as well. And it's his son Arch, who's named after Archie, the dad. Who's it? Who's there? You know and he was top, top recruited pick huge nil numbers. But he's this is he's coming in now as a starter for the first time.

Okay.

So that's the difference. So we'll see. What happens is so you know, USC has a lot to prove. We'll see. I am going racing tomorrow, but if things play out the way I expect them to, we hit the dock by about 4:30 when the game starts. Boat will be put away and cleaned up and into the club to meet my wife and start the frustration of her losing me on Saturday afternoons and evenings.

So all right, let's, let's get on.

With the news or something.

Yeah.

Yeah. Good, good. Very good. The why don't we kind of dive in and I'll just do some of our quick housekeeping today. So I'm Kevin Brown. This is Tom Burton. We get together every we review a newsletter that we publish and put out each week. It's called around the Horn in Wholesale Distribution that goes out to thousands and thousands of people each week. And what we do is we curate the top happenings between the economy, supply chain, mergers and acquisitions, AI technology, customer experience, E commerce, you name it. We talk about even some leadership and HR related topics. And what we do is we try and discuss those and loop those back to how those impact wholesale distributors and manufacturers. So we focus on that each week. If you don't get that newsletter and you would like to, we would love to send it to you. Three simple ways you can get it. You can pop a note to helloadsmartech.com we'll send that out to you and quickly and easily. You could also, if you're active on LinkedIn, you could quickly and easily just go on LinkedIn. Go to the Lead Smart Technologies page at which time you can see the newsletter there and you subscribe to it. Or you can search around the Horn and wholesale distribution on LinkedIn. Finally, we have a website for the podcast. It's called aroundthehorn pod.com www.aroundthehornpod.com and we will get that. You can subscribe to the newsletter as well as you can subscribe to the podcast there through Spotify or Apple or whatever it might be. Love to have you join us each week. Love the comments that come in regularly from people that are with us as well. So we're happy to have you with us today. Again, we would love to get that newsletter out to you. We couldn't do the show each week though if we didn't have the sponsorship of the company that Tom And I work for Lead Smart Technologies. We have multiple people working behind the scenes for the show. Leadsmart has developed what we call the Channel Cloud solution, which is an AI, AI enabled smart CRM and customer intelligence platform that's built solely for wholesale distributors and manufacturers. What we do at Lead Smart Channel Cloud is we bring together information and data from around the business. So we do what we call corralling siloed data. So ERP data, E commerce data, marketing automation, other data sources across the business. We bring those together in a single platform. We're able to use AI and other tools to analyze that data and help make decisions on how to accelerate growth in the business and provide a far greater customer experience because we're serving them better. So what we do is we get deep insights into the customer, the team and the overall business. We talk every day to companies that have had CRM solutions in their business before. Maybe they've had an experience with a Microsoft Dynamics or a Salesforce or products like that where they've had failed implementations or struggles that go with that because they don't get return on investment. Our single most greatest focus within the Lead Smart Channel Cloud product and as a company is to quickly get companies up and running and see return on investment and get engagement with customers. Had a great conversation last week, Tom, with a customer that says They've got over 80% adoption of people that are using the software every day and they're driving 20 plus percent revenue growth in their business. So if your company has struggled with implementations and issues with CRM and other technologies before, we'd love to talk to you and help you on your digital journey. So that's it. Want to dive into the news?

Yeah, no, I just add one thing. You know, I did a early morning Q A session with one of our customers today that went live a couple weeks ago. They have about 100 outside sales people on the system plus others. And it was kind of a Q A session. How's it going? And it was interesting. A couple of comments were why the hell did we not do this a long time ago? I can't believe I was like tracking, trying to track all this on a notepad and in my head. And, and, and they're, you know, realizing they're being so much more effective. Not just efficient, but effective. Which is really, really good to see. Right. It's like, you know, and they were concerned, of course, there might be pushback and all that kind of stuff. It's, you know, obviously there's always going to be some people that Push back. But the majority are like, why didn't we do this before?

Yep.

So.

Well, it makes me think, Tom, before we jump ahead, is that, you know, you, you remember you telling me this years ago when we were first starting the company with you know, my, my 35 years in wholesale distribution, manufacturing and your 35 years in technology and in software world. Is that. I think your words were, it's easy to buy software, it's hard to get outcomes. And I can think of, you know, a number of our customers who have left, you know, either industry specific software products that they couldn't get achieved results, but even more so of the traditional big, big software companies that we spend, you know, hundreds of thousands of dollars on the software and another, you know, equally typically, you know, one and a half to three times the cost of the software to get it implemented. Nobody uses it. There was no plan in place to get it up and running. And you know, one of the things that we love to do is work with our customers and identify what we call success criteria. So every implementation meeting and every follow up meeting in our client success journey is what are those success criteria and are we meeting them and are we reaching those goals of closing more quotes or following up on white space or full line selling? So good stuff. All right, we're talking about the news a little bit. What's happening out there?

Well, some more confusing economic reports, I guess for lack of better. Yeah, more, more confusing economic data.

Q2, Q2 results out. And it's kind of funny, I'm just thinking about, you know, we're seeing reports on Q2 results and you know, we're late into Q3 and in, in this economy right now, you need to be tracking weekly. If not, you know, I think this is a modification.

Possibly this one.

No, I think this one was the first report. I didn't see that. Did you read that about a modification? I don't think so.

I thought it was an update or a modification, a revision. It's the first revision of first GDP growth for the latest court. So.

So is the President going to fire somebody now?

Could be because the revision. But I mean let's, let's kind of hit these real quick. I think these first two articles talk about this. Right? So the headline number was GDP, gross domestic product was up 3.3% in Q2. Right. So you look at that and you're like, oh my God, the economy's kicking butt. That's what we needed. Right? It's, it's, you know, what was a 3% target that Besson is, is shooting for and so forth. So it was, you know, kicking ass and. And so forth. So it's. But if you kind of then peel the onion back on that and take a look at it. 5 percentage points or the 5. 5 of 5 percentage points of the 3.3% was attributable to a 29 or almost 30% drop in imports that were there. Right. Because the GDP is calculated through consumer consumption, business investment, government spending. But then it takes into account exports and imports. Right. Those two things that are there. Well the imports dropped considerably in Q2 which is not surprising based on everything we've talked about. Which actually changed the GDP by 5 percentage points. If you remove that. So if you remove that 5 percentage points that were attributable to the imports, you actually have negative GDP in the Q2 related to those areas that I just said. Consumer spending, investment and government spending. Now there's some other economic. You always say this, right? There's some other economic statistics. One of them kind of just looks at overall takes out the exports and the imports or whatever that shows that the actual growth in Q2 is about 1.6% after you kind of strip away sort of some of the noise that exists within GDP which isn't kick ass growth, but it's least it's something that's there.

So two things come to my mind out of this. One is there's no discussion in the article or other articles related this. We published a couple of them that are semi related to this is that there's no discussion in there of the impact of DOGE cuts.

Yeah, right.

Because what is it a third or more of. No 2 3rd. 2 thirds I think of GDP are made up of government spending, right?

No, no, no, no, no, no. It's not that high. So assumer spending is the highest part of.

Yeah, it's a third then.

Yeah.

But anyways, if we've got cuts there that are significant that are going on, that seems, seems odd to me.

Government spending they said was about, you know, it was a little up. Wasn't. So there might be some reduction from Doge, but then there were other spending in other areas.

Yeah.

So it wasn't meaningful one way or the other.

Yep. So it's interesting from that standpoint. The other part of it that you know, as you were talking about imports fall off is Q2 was still when we had tons and tons of front loading. There's we have an article later to talk about, you know, inventories being front loaded. So that's. Is There I'm wondering about that component of it when it talks about the imports is. To me, that one didn't make sense.

Well, but you had front loading, right, in Q1.

Well, it's still, there's still people front loading.

Well, they said there were the 30 reduction in import from Q1 to Q2.

Yeah, no, I know, I know what it said. I'm just, I'm not arguing what it said. My confusion is, right, there's still people that are working on front loading. It's far less. But while, while there's no final decision on China. Right. There's still people bringing in significant amounts of inventory to overcome what could be coming right from that. Now, we saw it up to a certain point, but if you think about it, right, there was. And let's look at the dates that go with this, right. Liberation day was April 1st. First or second. First couple of days of April. And that is obviously in the second quarter. Right. So we had some front loading going on with that. It's. There's another point we're going to talk a little bit later in the show about a manufacturing company in the PPE space. It's like, hey, we can't onshore. They're going to talk about a little bit in that article. We'll get to that. Because of your willingness to pay prices on that. And it's going to be kind of interesting. There's some things I want to talk about that related to that in tariffs when we get there. But anyways, to me that's kind of surprising because through Q2 we still saw quite a bit of front loading and bringing in larger quantities of inventory because it was what was coming with the tariffs, not what was in place.

Yeah. So that's what's odd to me about less than Q1. Right. So was it there?

Yeah, yeah. Or we see more revisions.

Yeah.

So that could be, you know. So anyways, you want to jump ahead there? Yep. So there's a decent article, a good article coming ahead about how U. S. Companies are trying to beat Trump's China trade war. You catch that one?

I did. I'm trying to figure out how to move this thing here. Okay. My mouse was not cooperating, so.

Yeah. So this one. Just go ahead. I'm sorry.

No, So I mean, not surprising, Right. I mean, when you get kind of hit with something that you don't like or don't want to deal with, what do you do? You try and find workarounds to it. And there are workarounds we've talked about Some of these, you know, like warehouses.

And everything like that, trade zones and so forth.

Right. To, to do it. So I'm not, I'm not surprised that there is a lot of sidestepping and workarounds and things like that that are, Was there anything in here in particular that jumped out that you thought was, was more interesting than others? No.

We've talked about quite a few times, you know, before about some of the tools people are using and so forth. But I think, you know, it's, it's the big takeaway for me. Right. And there's a few things we'll talk about this today is, you know, one of the quotes from the articles about, you know, front loading strategy has helped companies to avoid some tariff costs but introduced more complexity and risk to the supply chain. And so it's just there's, we have another article that'll dive into this a little bit further here shortly where I'm trying to talk about. But it is kind of interesting to me that it's just I think about, you know, in the past companies I think kind of did a, an overview and a flyby on looking at supply chain issues and, and I remember a little over a year ago talking to a guest who said, you know, his company is meeting monthly, sometimes weekly about supply chain issues and so forth. And now, you know, people are hiring entire teams and there's AI tools that are coming out. We're going to talk about one in a little bit that, you know, kind of helps with this supply chain planning component of things. And it is more than ever, supply chain is critical. And I think it goes back I was talking to, to John Gunderson and David Gordon. I was on a call with them from the Channel Marketing Group in this earlier in the week and kind of we were talking about some of this as far as the, you know, there are companies that have always manage their balance sheets well, their supply chain well and really stayed on top of it. But a lot of people don't, even large companies don't. And now it is like there is probably nothing more important right now than having how are we leveraging our supply chain, our inventories and our balance sheets to, you know, keep our profitability where we need it to be sure and keep, you know, minimize, minimize price increases. So.

Well, I think there, I don't think it was in this article, but I think it was another article downstream where it was like you can no longer manage your supply chain based on gut instinct and experience. And you know, a couple, I mean there's It's a. There's a lot. Obviously a lot of variability and. And impacts.

Yeah. Yep. No, that's good. All right, let's. So anyways, something to keep our eye on. There is a kind of jumping past a couple of these other articles down the manufacturer showing resilience and mid economic uncertainty. Kind of covers some of the same. Same ideas that we talked about. You know, it's funny, I was gonna just was kind of scrolling through some of my notes here, Tom, and before we go into that article, just makes me think, as we were talking in our first couple articles about statistics, right. In economic factors. And it just seems like for every negative data source that we get, there is a contradiction at the other side. Right. So there's two components, right. The next go round is the next piece of data that we get. Cpi, ppi, whatever it is, it's the reverse, Right. And then we get updates, right? Oh, we were wrong with the data. I mean, how do you. Fortunately for us in the technology world, things are a little different about how we need to plan and organize. We're not planning for inventory, we're planning for time and people mostly. But man, it just makes it so hard if you're trying to rely on this data. And you told me not to talk about it, but I'm going to say it anyways. It just makes me wonder, are we using all the right stats still or can we. Can we modify how we look at those stats? But.

But there is a lot of stats, right? And that's what I was, you know, as I was kind of researching the gdp. There is. There's these headline numbers that you see, right? Core inflation, gdp, consumer sentiment, unemployment or jobs. Right. You could probably pick six or eight of them that you hear these headline numbers. But then there's a lot of other statistics that are being tracked that we don't hear a lot about. Yeah. What the fact is though, and this is what is you start to go down the rabbit hole, which I've done a couple times now, is they are very contradictory, right. It's like you don't start to see alignment between the statistics, which means it's either there's just bad data or how the, you know, again, you have to understand how they're being calculated or all of that. But I agree, I don't think you can. I don't think you can effectively run any business, right? Technology business, distribution business. Right now, just looking at these economic indicators. So the only thing you can really do is kind of focus on how do you make your Business. I think it was. I made a note on this. It's like the three E's, right? How do you make your. Your business more effective, more efficient and provide a better experience?

I think you should write a book about that.

I think I should, actually. Because if it really, if you go back to, like first principles, right, which is a common people like to talk about now, is that's all that matters is how do you become more effective, how do you become more efficient and how do you provide a better experience? We're going to talk about experience here.

Yeah, well, and I think it's interesting you say that, right? Because I think if you could apply that across your company, right? Your, your operations, your finance, sales and marketing, every person in every process, you could push that across, you know, But.

I think you also. And we're going to talk about experience here in a minute, probably of those three, right? If you were to say kind of, what's the tip of the triangle? If those three are a triangle, right. Think of that experience efficient. And which, which layer of the triangle or tip of the triangle is maybe more expensive is. Start with that experience part of it. So look and see, okay, how am I providing a superior experience to my customers, my employees and so partners and so forth. But then how am I doing that effectively and efficiently, right? And if you look at those two things or three things together and just focus on that, you'll win. Because if you strip away all these numbers and all this noise, right, there's stuff happening. People are building stuff, people are buying stuff. We're not in a recession or a big downturn. It's kind of, you know, it has its peaks and valleys. It's certainly very regional. I think we've heard from our economists that we had on the show that you really can't look at things at a national level. You have to look at things at a regional level.

Good point.

So there's a lot of stuff happening. It's not. So how do you take advantage of what's happening? That's really the question. And you do that through experience, efficiency and effectiveness. So one more time. Pardon?

One more time. Three E's.

Experience, efficiency and effectiveness.

So Tom Burton's E Cubed.

E cubed. Yeah, the E3. The E3 model.

Okay, I like it. Yeah. Good. That's. That's. I. I'm so you heard it, you.

Heard it here first. So when this, you know, when you hear Elon talking about this in the future, you know, you heard it here on this, on this show, right?

The Thing I'll, I'll add to that though is that when you stop and look at it is, you know, and we have a number of articles that are going to lead to this as we discuss it further, is, you know, the days of, I'm just, you know, and I, I was on the phone early this morning with a company that we're talking about partnering with and using our technology. Very large, you know, billion plus dollar a year company, well known in their space, great company, great people, culture seems great. But, you know, when you're a billion, billion and a half dollar, your company and you're running off of a no good, a good ERP system, not maybe not what I would consider top tier, but a good ERP system. But that's really that in mailchimp is the only tool you have in your company right now from a technology standpoint, there are a lot of opportunities to solve problems around all of the things that we're talking about related to how we're dealing with our customers, the supply chain, all of those things. When you start implementing additional technology that can help you into the point that we're going to talk about in a few minutes with customer experience, it just becomes so critical now of bringing these types of tools in because the days of, you know, Joe with his notepad and his, his iPhone, and he uses his iPhone mostly for text messaging and his calculator, those are the guys that when things are getting tighter like they are now, you're not bringing a lot to your customer. You're just bringing, I sell this type of product into this market and I'm not bringing a lot other than, I'll call it supply chain support. But when it comes time to go do a presentation to a company or a group of buyers, right. And consortium, which we're, you know, see more and more of now, and they're under pressure with their suppliers, you better be able to show the value that you bring other than on time delivery.

Sure.

Right. There's a lot more that goes with that and now is the time for people to kind of get on board with that. So anyways, we'll talk about more as we roll through this today.

No, you certainly cannot. You cannot certainly live the three E, right, The E cubed, as you just called it. In this day and age without some, well, two things, right? Data and technology in process. It's actually three things. So back to the same thing is, right, your process workflow, your data and your. And the technology that you're using to facilitate that. But I know that Sounds like, oh my, that sounds overwhelming or that sounds huge. Right. But when you actually start doing it a little bit incrementally and that's even what came up on that call I. I was mentioning here this morning. Right. Is one of the people brought up. It's like now when I go to a customer, I always have something to talk to them about. Right. I. It's not like I'm having to think about or what are we going to talk about or what are we not going to talk about. I can come up with in, you know, five or six talking points that are going to add value, which makes me more effective. It makes it provides a better experience for my customer. And I did it in an efficient way in about 30 seconds versus trying to go through a bunch of handwritten notes from my last meeting that I can't find.

Right. Yeah. And in addition to that, you know, you end up in a position with that where you where not only to your comment right. About people going in and using the technology to find out how to do that and knowing what to talk to people about is when you have tools like Genius Feed, that's the AI tool built into Lead Smart Channel Cloud, you're getting the smart alerts coming in and reminding you you don't even have to open the software yet to necessarily to know what to do. So why don't we jump ahead into our manufacturing distribution segment there, Tom. Okay, we talked about this a little bit earlier. We mentioned a manufacturer but this article is from MDM Modern Distribution. Our good friends at mdm, our buddy Mike Cockett. I got it Mike. Scheduled on the pod with us again. I think I've said that three times in the last three or four months and haven't done it yet. But good article here about Ansel. Ansel is one of the probably the biggest name and market leader in disposable gloves in the PPE market. And they talk about it says that the article talks about the Ansel CEO indicated companies unlikely to invest in expanding U.S. capacity for PPE due to distributors unwilling to absorb the cost premium for U.S. made goods. Well, that's kind of a duh. Making a latex or a vinyl glove here in the US is problematic. There are people that do it, but there's a lot of.

You would know this better than I would, but wouldn't this. This doesn't seem like the right type of product, you know, with the margins and the things being so slim to be made in the US I don't know that's correct.

And the access to the raw materials and the raw material that goes with this. But there are people that are doing it and you know, Ansel's just coming out and saying, basically saying hey, we looked into it and we can't and here's why. And there's a little bit of this article that is, you know, I'll call it rudimentary. I mean duh, it only makes sense. But there's, there's deeper part of that and, and it goes to, you know I, I've mentioned before, a good, good friend of mine is, runs a very large organization in the industrial and industrial safety market and he runs their operations and purchasing side of the business. And we were talking about this is that. And literally it was after Liberation Day and this was the big shake up of Liberation Day for so many people was when it came across and it was like, you know, I think people were thinking about major trading partners in the eu, China and Canada, Mexico and so forth. But when it went across the board and now we're literally have tariffs on Vietnam and Laos and Thailand and, and some of the other Southeast Asia companies where a lot of companies that are big sellers of Ansel's product in this point. But maybe, you know, it's not difficult to private label a box of latex or vinyl gloves and in, in those countries if you have the volume to go with it. Well, people were moving their supply chain out of China because of not just tariffs but all of the geopolitical issues and the other things going on with China. They were moving those to Southeast Asia, some of which were just Chinese backed companies that were doing things there. And then boom, Liberation Day hits and there's major tariffs on all of those companies countries. I should say that people had been moving to vendors there to avoid the challenges that go with China. So a big hit in that setting.

Yeah, yeah, for sure.

And it was a surprise for people. So I'm guessing you don't have a lot to add about that.

I don't, I don't have a lot of value to add there. So you. I'll stay in my lane.

Very good. I have spent a few years in the PPE world so just to hit on this, there's a good article that we have in the newsletter about Parts town. Parts town is oem. OEM replacement parts for a lot of, A lot of it is food service products and related products. But they're, they're broadening that out. Two and a half billion dollar growth story. They did a pot. It's a podcasting interview that MDM did, it's a night and I've only listed a part of it, but it's great. At an event. I was at the Distribution Strategy Group's AI event in Chicago a few months back. The. I think his CTO or CIO of Partstown was there and talking about some of their uses of technology and AI in the business. So good thing to follow. Good, good piece here. Okay, so that next article there from Impo magazine about the AI advantage in a volatile tariff era, did you look into that one a little bit?

Yeah. I mean it's kind of along the line of what we were just talking about, but it's, you know, talking a lot about keeping track of all the tariffs or even the supply chain or, you know, the things that you can do, you're not going to do. I think this was the article that says you're not going to do it based on instinct in a piece of paper. Right. Or experience. It's there. So then it went on to talk about how AI is being used and what's by some companies to really emulate potential situations before they occur. But then when situations do occur, provide sort of immediate guidance and strategy on what you would do to mitigate whatever those situations are and to maximize your results. So, and I'm interested in your take on this because you would know more than. It seems to me though that in order for that to work, you have to have options. Right. So I can't just be locked into one option and one scenario and so forth. I have to have multiple options that I can draw upon and then as the AI can help me optimize, that can go back to efficiency. Right. And effectiveness.

We're not leaving this 3e cubed, are we?

It's no, I'm just, you know, giving, you know, good solid examples.

Reinforcing. Reinforcing your position.

That's right. Okay. But anyway, yeah, I think it's important you have all. But then when the AI can do its job, right. To figure out how to optimize and work on those things that are there. So.

Yeah, well, I think my, my big takeaway from this is one of the comments was, you know, in part of this article was talking about a company that has developed some AI tools to help with documentation and planning for tariffs. Right. And there's, you know, what a great, great opportunity. We talk, we've talked for a number of years now, about couple of years now about digital twins. Right. So when you start looking at scenario planning and using AI tools for scenario planning for what, what if this category of products that I'm still buying from China, what happens in this setting? You know, you can build some fantastic spreadsheets, but if those spreadsheets and just makes me think. There was a Twitter or X post this morning from Satya Nadella, the CEO of Microsoft, and it was. He was talking about a series of tweets about different ways that he's using Copilot to help manage his days and the beating that he took from the Twitter sphere on, you know, he's now been reduced to a pitch boy for, for tools. And then it was just the, the ongoing onslaught of just comments from people about how bad Copilot is. But, you know, I mean, I used Copilot the other night to help me with a spreadsheet I was working on for some bonus planning for people in the organization. It was helpful. But, but in general, you know, if you're trying to go mitigate tariff issues from your own internal spreadsheet, it can be problematic when you can apply some AI tools to that from people that have built them for that and using the technology that's there, I think it's great. I wasn't familiar with the company that they mentioned here, but the key takeaway for me is this, you know, and it, this transcends the discussion about tariffs in this setting is that says that they talked about the blend of automation and expert human oversight helps companies avoid costly customs holds, ensuring smoother flow through global supply chains, et cetera, et cetera. Kind of goes on about that, but it just, it goes back to me for me about, and it was a trigger point for me in talking about this article where it was really focused on the idea of what we say all the time, right? It's in fact quoting Jensen Huang from, from Nvidia, right? It's AI is not going to take your job. People using AI are going to take your job. And when you start looking at this and it just, it talks about this again about expert human oversight, right? So we need to all get really good at taking the expertise, the understanding the tribal knowledge, the things that we have in our head. We, we joke about it internally and we call that ralph, right? The guy that knows everything about your business and knows that there's a file cabinet in branch number 17 that is back in a corner with a moving blanket on top of it that has the file you need, take that knowledge from RALPH and apply that into using that to feed the AI tools or to help with prompt building, right? That guy that's got RALPH'S knowledge and understanding could literally ask AI models to coach him on what the right prompt is to get the knowledge out of him. And there's so many great examples of that. But I just love the idea about this is you know, expert human oversight with an AI tool. So anyways, I don't know if you had any thoughts on that one.

No, makes sense. And it just, I think the next. These couple articles here that we have together kind of go arm in arm. Right. It's and it does go back. I don't know how you could in this day and age with all of these different variability try and you know, track all that without you said AI and some, you know, expert oversight of what it is that's going on.

Well, I think you know, you, you just, I think about, you know, I'm just thinking about one of our customers or a couple of our customers. Right. Can literally go in fact even you know, somebody that listens this show regularly and his team, I mean I can see the people sitting around a table, right. And, and it's you know, literally sales, their technology leaders, executive management, purchasing, supply chain warehousing, people sitting down and using a group think of expertise to feed into the AI tool that can really go analyze that data. The challenge that people have is you've got to get that data somewhere that you can use it to analyze it. Right. Because it's going to be difficult if you only use ERP data when you've got other information in the system that helps you understand a little bit better about customer journey. Right. What's going on at the customer. So another little plug for our technology. So anyways, why don't we jump down into E commerce and marketing.

Let's do it.

Good. This is from marketing profs that we bring articles from them pretty regularly. Dear clients, AI is smart, but it's not an agency.

Yeah. You know, I think well, what their punchline is here, right. Is that you know, don't fire your agency because. And try and replace everything with AI. And I, and I think that's fair. If you've, if you rely on an agency and you use agencies for your marketing actions. I think that's a fair, a fair thing. The AI at this point isn't really going to be at the point where it's going to understand the business and understand the strategy and so forth that maybe an agency would, what I would look into when I, when I would deal with my agency is I'd be asking them how they are using AI again to be more efficient and More effective. And how are they using that again to increase the customer experience? Right. So we're going to talk. I know it's this article's coming up here in just, just in a minute, but that would be the question I would ask is I would want to know how they're using AI, how what they're doing with it and not just as a way to oh, we were writing blog posts faster or we can put a LinkedIn post faster or whatever. But really how are you using this to understand my customer or understand the market or understand the sales process or and so forth. And the next article kind of ties into this, which is, which I found interesting. It was kind of a little nuanced thing that it said at the end of the article. But I've heard this now a couple of times and I'm, and I look at it as it relates to, even to what we do. What it's saying is, is that marketing has traditionally with white papers and you know, webinars, it gives insights. Right. Okay. You know, and great. And I'm not saying insights aren't important because I think insights are important for people to kind of have that aha moment the light bulb go off, go, oh, wait a minute, I need to maybe do something about this or I need to look into it. But what it's really saying within it then said is beyond insights is you can really start to go to the next level of not just answering questions, let's say about your product or service, but actually getting to the point where you could, you know, you, you hear, you know, people doing trials or pilots or whatever.

Yep.

But where you could actually start implementing the solution for them before their eyes so they could see it or see part of it. Right. Earlier in the pre sale cycle of things. So really understanding, you know, you talked about success criteria and stuff earlier. We were talking about. Right. Understanding success criteria earlier, understanding their objectives earlier and then actually making it even more real to them how it's going to be accomplished through, through and even through pilots and implementation. That's not usually what marketing does, right? Marketing, you may do that in sales. And I even heard Benioff talk about this, the Salesforce CEO on a podcast a couple days ago. He's saying that more and more. Right. The AI will allow the pre sale process to become way more a much better experience risk for the customer, reduce the fear of messing up because they've actually been able to get their hands on some of things earlier in the process. Now I don't know exactly how that would translate into the distribution and manufacturing world. But I think there is, I think there's things that definitely could be translate into that that would make it easier for the customer to understand what they're buying, what they're getting. And you know what, what's the best strategy to do with it?

Well, you start thinking about, I mean, future proofing some of this stuff would be, you think about some of the tools like Showpad or some of those that have, right, keep all of your PDFs and your data sources in one place. And then you think about tools like Lead, smart channel, cloud that has deep insights to what's going on at the customer. And you start putting these different tools together that says, hey, you need to talk to him about these things. Here's the talking points and by the way, here's the videos that you should share with him, here's the materials, this product specs on that, whatever it might be. Then you start taking that to the next level of things that your team is working on right now is you having, you know, agentic tools, you know, AI tools that you that understand very specifics about marketing or very specifics about sales, customer experience, supply chain, whatever it is that are built right into a platform like LeadSmart that you now can start asking specific questions about the data that's coming from across your organizations. Where we got the silo data out of the silos.

Yep.

Right before we jump ahead though, Tom, you know this, the first article there about the agency pieces. You know, there's a couple of pieces here that are much broader and just across the board is they talk about five inconvenient truths about AI that clients can't ignore. And I think the core of this particular article was agents need to adapt. Agencies, I should say need to adapt to be support in a different way. Because what the clients are saying is, hey, I can go have a offshore person for $12 an hour that is really good at marketing, go develop all my LinkedIn content and my, you know, social media content or whatever it is. And the agency was doing that before. But they talk about this key number one point, and I think this just goes across the board to our discussion of, you know, people and AI, is that their number one point here is that AI is void of strategy. It could craft an email, copy, generate limitless versions of a subject line, spout keywords, but it can't comprehend the objectives and perspective of what the client has and what their customers need, doesn't know the target market, customer relationship, previously workings and so forth. Now Some of the AI can get those things right.

Yeah, you can, you can definitely train it to that, to that point.

Typically people aren't doing that. Right.

Typically they're not. And even I, I find myself lazy. Right. Prompt lazy a lot of times just trying to, hey, I need to get something done. And so you put in a very lazy prompt and you get something back. But you're, you're, you really have to be cognizant of what you're getting back based on the laziness of the prompt that you put in and the laziness of the tuning that you did to even get to the point of doing the prompt.

So it's interesting you say that because, you know, it's something that I run into as well is you know, having within chat GPT built, you know, tons of, you know, we call them helper agents. Right. That, that have, it's an agent that you go to to solve a particular problem or get particular information. Simplest example is, you know, I've loaded in all of our, you know, our company's key contracts, you know, customer vendor contracts, so I can ask questions very quickly. But that even drives in my case, even more laziness in prompts because it, it knows a lot about, you know, one, it understands the company, it understands the market we serve. It's. And it understands that it's supposed to be acting in a legal, you know, format for us or being able to ask answer legal related questions. But it's still, you want to maximize those eight helper agents, you still should be building or using really good prompts of defining exactly what you want from it in this instance.

Yep. So, and I think that's the point here, right. Is on this agency stuff, most agencies aren't taking the time to build into the context of the AI, their helper agents or whatever.

Right.

The things about that customer, the icp, the or customer profile, the, all of those things. And so you end up with kind of lazy prompting, getting general results and not really, you know, getting what you could be getting out of the AI for that customer. Yeah.

Yep. The. Well, I think what, you know, what comes out of this is, you know, for me, I was like, well, does our audience care about agencies? Well, it's not just the agencies component, it's the what are you doing in your business if you have an agency and how should you be partnering with them? And if you, if you do use an agent marketing agency in your agency, is it coming back to wanting to partner with you on how to use AI best? And the tools that they'll use versus the tools that you use, you probably have the wrong agency because those people are just hoping to survive now. And maybe, maybe you won't realize what you could do in house. Anyways, the next article there was from sales and marketing. You started to reference it a little bit about agency I powers marketing future. And it's interesting. There was a quote from that says Companies deploying agency AI expect to drastically reduce manual intervention, shifting 75% of marketing staff from production staff to strategic roles back to the same thing that it's almost today's theme, right, is people with expertise in a business and a market and AI, Right. You need them both. And now to this point, seven, you know, this small survey was.

I think, I think that is the future, right. If you, if you look at the future of business, right, you're going to have people with expertise complemented through AI ideally. I mean, that's your ideal outcome that's there right now. Obviously there'll be parts of a business where that can happen faster or of course, and, and again, it goes back. And why are you doing that? Because if you do those things, you will achieve the three E's, right. That we just talked about.

Oh boy. But the, this isn't going to die, is it?

No, no. I think, I think a book is in the future here.

Okay.

But if you, if you look at the, if you look at those, if you look at that objective of having and what's going to cut. And this, this is where you hear a lot. Well, we're not going to lose jobs. We're going to move jobs. Right? I tend to agree. I think that the demand for jobs of people that can wear that role, of that expert and have expertise. But what does it mean to be an expert? You got to understand more about what the business does. You have to understand how the business operates. You have to understand a lot of the nuances about a business that a lot of maybe lower people don't know. They just do their job, quote unquote, every day. Right. I think there's going to be few and fewer jobs like that and there's going to be more and more roles that have a responsibility of understanding the business and the expertise that is required to run that business, which is going to require. I think the demand for that is going to grow significantly. Right. For those types of people. But we don't, we're not training our. Even in college. We're not training for that role. We're not training people coming out of college or Younger, you know, younger generation to do that role. We're training them necessary to do jobs. And again, this isn't going to happen overnight. But if you just look at the evolution, right, of where things are going, you need to be leveling up to be an expert or to be able to have the ability to be to, to learn and to, and have the willingness, I guess, and the ability to take that role in the organization.

Yeah, Well, I think, you know, until we get to a place where we have fully automated warehouses, we're going to have knowledge workers and heavy lifters. I'll call and knowledge workers. And it's. I think it's the beauty of both manufacturing and distribution is, you know, if you go through. Were to go scroll through my LinkedIn network, which is the majority is people in manufacturing and distribution is. And you see people bounce back and forth like I've done, you know, my career. Back and forth between both sides of that is people stay in the industry forever. Right. It's, it's almost, you know, it's sticky. Right. If you, if you get a job working for a distributor in H vac out of college, I'd love to see some of the statistics, but I'd say probably the vast majority of people stick around in distribution and probably even stick around in not just distribution, but distribution in a category that they know well. You know, I mean, first 15 years of my career, I didn't think about distribution outside of industrial and safety. It's just what I did and it's where I had my network and where our network is, is, you know, where we stay. So I think, you know, we look at this now and thinking about it is, okay, well, are we preparing those people that are. We call it sometimes the carpet versus the concrete. Right. The concrete is out the door to the warehouse and the carpet is in the front. Right, the front. Front of the house. People need to be understanding how that they can use AI to make their job better. And the warehouse side of things is we're always going to need people. You know, I don't know that we'll ever be to a place where robots. We might be where robots do everything in a warehouse, but we still need RALPH that understands the business and how to program those things.

Well, yeah, you're going to have to. Someone's going to have to run the robots, right? Yeah, someone's going to have to. Again, that's expertise. Having expertise and how to run robots.

Right?

Yeah, that are there.

So, so we have an article here though, Tom, about the role of the hidden buyer that I think was pretty powerful for marketing profs and IT talks about maximizing sales you didn't know were missing. Did you catch that one at all?

I did, yeah.

What are your thoughts?

I mean, it's for sure. I mean, look, in any B2B sale, right, you have, I guess, the, the people that are visible and then the people that are invisible influencers. And we see this all the time, right. We may get on a call and do a demo or a conversation with some business users. And what are they going to do though? They're going to go talk to the IT team, right. And get feedback from the IT team on the technology, the project, the scope, all those things that are there. Right. And you may not know that. Right. We're not. We've never had an IT person on a phone call. We've only had business people. Yet the IT is that invisible influencer. Yep. Along the way. And this happens all the time, right? There's these invisible influencers that. And here's the problem, right. And we've talked about this before and B2B, there is as much of a concern about fear of messing up as there is fear of missing out. Right. So you have to kind of be thinking through the process. Yeah. Fomo, fumo, right?

FOMO squared, right?

Fomo, fumo, fomo. Easy for me to say. Fear of messing up, right. With a U instead of an M. But the, the point being is.

You.

A lot of times, especially if they're not directly involved, you're going, if you go to IT or you go to anybody in the business and you ask them generally what's going to be their response, it's going to be, well, considerations, right. You know, we thought about this and we're busy and what about this other project and all of those things. So you have to not only be aware of them, but you have to. It's. And they're legitimate. I'm not saying they're not legitimate concerns, right. So you have to kind of be thinking about who are those invisible influencers, what are the types of concerns that they would have and make sure that you either help them get through that or help the other people that are being influenced by them understand, you know, how to either overcome those concerns or to address those concerns in a different way. But yeah, it's. It's a, it's a real, it's a real issue.

I.

It's critical.

So I think it is setting it just. There's some stats here. It says that from a particular study. It says 67% of B2B purchases involved input from these indirect influencers, underscoring the importance of targeted content and personalized outreach tailored to diverse organizational roles. I, I can't tell you. Right. And I, and I know you and I have had conversations about this before is just remember, you know, earlier in my career I was on, when I was on the manufacturing side of things, I was working with a large national distributor in the autumn doing. We were doing a lot within the automotive world, both with Ford and gm, most of it with Ford though. And, and I would go, you know, with a salesperson to an auto plant and there's literally, you know, a room there with 10 or 15 people in it and it's all purchasing folks. But his relationship is with one, maybe two. And yeah, maybe that you know, we're there to talk about a particular commodity and this guy handles these commodities. But there's influence throughout this that's just so far. And I've just, throughout my whole career, I've just seen this over and over and over again of you know, we have one or maybe two key people that we have relationships. I wrote myself a little note related to this article. It's far more these days than I coach the buyer son in Little League and we have a great relationship. Right. There are so many other things impacting this and this doesn't even really talk about the impact that you know, the e commerce world has. Right. And infinite shelves from companies that you didn't even think were competitors that you know, they're your buyer that you coach their kiss on in Little League is, is getting emails and being drawn to a website of a company that's five states away. Right in that setting. Here's your reminder.

Are you reminded, Kevin?

Here's your reminder. Alexa. Cancel. That's pretty funny. The. It's amusing. Sorry about that. The professionalism, professionalism of this show is just astounding, isn't it?

Just because we're so AI enabled. Yeah.

So. And Cooper hasn't chimed in. My, my trusty cohort down the hall hasn't chimed in yet this morning. But anyways, the, the point being through all of this is there are far more influencers than most people give get credit for. And understanding that in the age of E Comm and Amazon and all of the other players out there, it's even more challenging of understanding who those people are and how they're being impacted. And you know, I would say if you don't know your, if your buyer or your targeted person that you're working with if you don't know the other people that have his hat on and you don't know who his boss is and don't have a relationship with his boss or the person right underneath him, you're missing out because unfortunately people do get hit by buses. Companies do make changes and consolidate and lay people off. And if you have one guy and it's, you know, I have tacos on Tuesday with, you know, Judy, there's a lot of risk there and it's just that risk is just going to continue.

Again, having the knowledge and expertise right around the dynamics of how the businesses that you're selling to operate and then using. How then do you use AI effectively? Which I think is what this article was touching on to potentially market or communicate to the different stakeholders even though they may be an invisible stakeholder along the way?

Well, in theory, right. You should have that data right in your smart CRM about all of these people and all of their, the things that go with them and how you work with them on that setting I think is good. Let's dive into this customer experience article that before we move into technology, cyber and AI. We talked about this and referenced this article a little earlier. This is from our friend Market Digital Commerce360 and it's related to a Forester study. Some takeaways from you, Tom?

Well, money is being spent on customer experience, which to me is great. I think that's great to see. It said one third of executives plan to raise tax spending by 5 or more with a similar share investing in CX. CX being customer experience led initiatives. 15% of organizations expect to reduce spending though on third party service providers, which I found interesting on that. So what they're really doing though is they're trying to.

I think some of that goes back to that, that part of that ties to the agency component we just had. Right.

You have to be bringing more of that in house.

Right.

And so forth. So the three, from a technology standpoint, the three platforms that are the three categories of platforms that are kind of the stack if you will, for customer experience, CRM, digital intelligence and business intelligence platforms. And digital intelligence meaning like data warehouses, feedback data lakes, feedback management tools, things along those lines. Now look, there's a lot of other things that go around all of those in that stack. But yeah, I mean those, if you, if you don't know who your customer is, you don't know what you're doing with your customer and you don't know what the customer is doing with you related to sales and Quotes and, and so forth. Right. How are you going to provide a really good experience? You're not.

Right.

So anyway, it's very positive for me to see that more and more. And I think we're going to see more of this. I think this will be. Honestly, if I'm going to pick some of my trends for 2026.

It's early. It's early.

Yeah, it's early. But I do think that this focus of customer experience is going to become a much bigger trend in 2026. It has to. Right. For all the reasons we've just talked about.

Well, let's define it. Let's define customer experience a little bit more, right? Because sometimes people think about it as well. It's just, it's just how people interact with our website. But it's greater than that.

Well, it's everything. Right. So what are, how do you enter? First of all, the question is, how do you interact or communicate with your customers? Well, we do it at a branch. We do it with our outside salesperson. We do it with an inbound phone call. We do. I mean, there's, you know, probably great, great. Within a distribution organization, what, 15, maybe 20 touch points could very well be for where you would interact with a customer. That's there. And so then what is the experience? And it's not just, oh, it was, they were nice or whatever, but it's also, as we've talked about, right, Each interaction, how are you maximizing the value that you're providing to that customer? How are you building the relationship? How are you then using that experience to build more relationship with the business and so forth.

So ties right into our previous article.

Just. It ties into the previous article.

So it really says curator of these articles is good.

Yes, it is really very, very, you know, interesting a sequence of articles there. Well done. So the, yeah, it's really everything that you're doing to provide that optimum experience for the customer. And that experience is generally based around relevance value, right. How at each touch point, relevance at each touch point, and value at each touch point that you're actually doing. And then I think you can round that all out, right, with, let's face it, right? People, people want to be treated well. They want to be treated like that. They, that people, they want to feel like you understand.

They want to be understood, right.

They want to have, you know, the empathy aspect of it. All of that, all of that is impossible without having some of the technology and tools here.

Otherwise.

Yeah, otherwise you're just reacting to a transaction and you're not really dealing with it.

You're order taking versus building a relationship with an organization versus an individual.

And maybe that's what I mean earlier. I think there's going to be more of a, of a switch from transactions to customer, transactional experience to customer experience as a, as a big change over the next year.

I think maybe if I could refine that, customer experience will take the forefront in the transaction.

That's. Well, it'll drive the transaction. It'll be the cause of the transaction.

So let's stop and think about that as well. Because what neither of these articles that we were just talking about mention in this is the, the shift in, in, in the buyers to right now what I think we saw last week. It's 72% of B2B buyers are millennials. They buy differently, they think differently, they look at their jobs differently. Right. Everything about them is different than the previous generation that was in that buying category.

Well, let's go one step further. And I know this may not be the situation today, but think ahead five years or three or four years and let's just what we just talked about, right? Where the, the role of these individuals is going to be more of an expert, right. In the organization. So think about that. If your job or your role, I don't even want to use the word job. Your role in the organization requires you to have more expertise. Think how much more you want to rely on your vendors and your partners to help you build that expertise. Right. You're not going to do it all yourself. You have to rely on your vendors and your partners to help you with that expertise that you need to build. Right. Put it in place. So if you're not bringing that to the table to them, then it's, you know, somebody else will. So who are they going to do business with? Right. I don't want to do business with somebody who's not bringing. I mean, we've made some shifts recently with some vendors and some company that we work. Look at the value that we're getting from some of the people now.

Kicking ourselves we didn't do it sooner, right? Kicking ourselves we didn't do it sooner, right?

And it's, it's you when you get that value and the relevance from that and that experience, right? It's like, it's like, okay, this is. But when you get something that's a mediocre experience and you know, we put up with this with, within our accounting area for a long time with some of the people that we had worked with in Our accounting, we put. Put up with a very mediocre, low value, low relevant experience and you just see the difference. And it's like, I'm never going back to that. So why would that be any different for buying products or.

Yeah.

Or who you're buying. You know, especially if they're, if they're not just commodity type products. Good, good, good.

Let's roll time into our technology and cyber security section and.

Guess what? Why don't we hit this MIT thing again?

That's where I was going to suggest. Right. So we, we published this article last week. The can.

Are you checking emails or.

No, I just got something. Family thing here that just popped up. So sorry about that. No, I think I got. That's the problem with having VIP lists, right. Is you can't just. They get past the do not disturb. So.

Yeah.

So. Podcast host 101. I'm. I'm failing the. So we published this last week. Right. MIT did a study that said that there's a staggering 95% failure rate in corporate AI pilot projects, underscoring the complexity and challenges and moving from experimental stages to effective deployment. Okay, great. We talked about it very briefly last week, but I think there's. It's worth. Because we were rushing for time last week, I think it's worth a little bit deeper dive and kind of looking at what some of this really might mean, especially as we think about how that looks in wholesale distribution.

Well, and I, if you remember last week when we did this article, I said I was really. I didn't really like the headline of it. Right, right. The headline got a lot of play.

It did.

It even influenced the stock market. I mean, one of the, One of the. There was a down day or a couple down days last week and they said a lot of it was the stock market. Oh my God. This AI thing isn't working and there's not going to be money spent on it.

Well, that tied in too, Tom. That tied into Sam Altman talking about there being a, you know, where we're at. We're in the hype cycle, so to speak.

No, it's the one, two punch. Right. Of those two things. But. So let's go back and take a look at this MIT study and what it really said. So what they did is they interviewed 150 leaders and 350 employees, and basically they asked them, related to an AI, AI pilot program, how many of them were delivering measurable impact on profit and loss. So only 5% said that they were getting measurable impact on profit. And loss. Well, does that mean that the other 95% was a train wreck? Not necessarily. In fact, maybe the objective of the other 95% wasn't related to the direct impact on profit and loss, but that 95% that they were touting as a failure or stalled. Stalled or whatever was related to having measurable impact on pnl, which again, if you read, you know, the story behind the story.

Yep.

I tend to believe that. Right. I tend to believe that in an enterprise and these are all enterprise companies, larger companies. Right. And so forth. I would tend to believe that probably only 5% of projects have delivered measurable impact on P and L. That doesn't mean that there's the other 95% of the projects haven't had other value or other, you know, valuable outcomes in other areas of the business.

I think there's another component. So. Yes, yes, yes and yes. I think there's another component that goes with this too, is that especially when you talk at a larger enterprise. So let's think insurance company, you know, somebody outside of the manufacturing and distribution space that we work with, maybe it's a, you know, tens of billions multinational corporation where CEO is sitting in front of the board, you know, a year, year and a half ago and they're starting to read the articles and listening to CNBC or Bloomberg or whatever and hearing all the AI stuff and they're like, Tom Burton, or let me point the finger a different way, Kevin Brown, you're the CEO. What are you doing? What's happening in our organization? Don't miss AI, get AI going. What are you going to do to get it into the business? And they rushed out and they started doing some projects. Right. And those projects were early stage projects. They were with people that weren't prepared internally to work on them. And now they're looking back and benchmarking against those early projects and that becomes problematic in that setting as well. So I think part of it, I'm not suggesting anything that you described ever, and hearing all the AI stuff and they're like, Tom Burton or let me point the finger a different way. Kevin Brown, you're the CEO. What are you doing? What's happening in our organization? Don't miss AI get AI going. What are you going to do to get it into the business? And they rushed out and they started doing some projects. Right. And those projects were early stage projects. They were with people that weren't prepared internally to work on them and is incorrect. I think it's all part of a bigger picture. And the article this Particular article, this was actually an Inc. Magazine but you know, key reasons for failure for AI pilots. Right. And I've got a whole series of now they're looking back and benchmarking against those early projects and that becomes problematic in that setting as well. So I think part of it, I'm not suggesting anything that you described is incorrect. I think it's all, it's all part of a bigger picture. And the article, this particular article, this was in actually an Inc Magazine, but you know, key reasons for failure for AI pilots. Right. And I've got a whole series of thoughts I'll share in a moment about what's really going on out there. In fact, we had an, we had a phone conversation you and I were on together yesterday with what I'll say is a very much so an industry thought leader in the wholesale distribution and manufacturing world on AI and we were talking about, you know, the, there is some hype out there about, from, from some organizations and that you know, make money off of having sponsors from some of the AI driven companies out there. But the actual real adoption and getting return on investment outside of saying, hey you know what, my, my order entry process is now a little bit better than it was before because I have an AI tool that's helping me gather order data out of an email or off a picture from a piece of drywall or something. Yeah, that's great. But those aren't, those aren't. I mean, and that's suggesting they're not meaningful. Those aren't game changing in an organization. And I think we're. They're not transformational. Perfectly said right there. One off. Yes, we're having some success. The big picture of what's going to be impacting wholesale distribution is yet to come in the setting. So this article, right, talks about some key points for AI failure. AI project failure, lack of clear and well defined objectives. Right. I'll just go back to that same example is somebody buys a one off piece of software that is going to help us get AI, is going to help us, you know, get orders entered more quickly into our ERP system because it can read the order data out of any email. Awesome. Do we have a clearly defined objective and what is the impact on the organization and what are our intended expectations? Typically not saying all typically is we bought a piece of software but we don't have a well defined objective for our organization. 2. Insufficient integration of AI initiatives with existing business process and data infrastructure. Again, lack of plan, lack of insights. And how does this tie across and guess what? Term they used in this silos.

Oh yeah, I did see that. Yeah, yeah, yeah, Yep.

Right. Success. It says research. It says researchers found that many pilot projects operate in silos disconnected from operational realities of the business. Great. So, and I, I do this in a presentation that I just gave a couple weeks ago and I'm giving again the week after next. You know, if you have silo data across your business, then you have siloed AI.

Sure.

Right. So when you bring that into a platform, I. E. Lead, smart channel, cloud, then now you're looking at all of your siloed data in one place to use those AI tools. But it talked about additionally. Right. Insufficient integration, existing business process and data infrastructure. Then the next one was inadequate talent and organizational readiness. Somebody said. I mean, we had some conversations recently with a company that is trying to prepare themselves for AI and in getting this, getting themselves ready for that, that their CRM in their business was brought in by a sales leader and he's running the whole thing just because he saw a couple of bells and whistles that made good sense to him. But it's not at all. I mean, they have hundreds of thousands of dollars now invested, but none of that investment in the CRM component is across the organizational as part of a strategy.

Yep, yep, agreed.

So anyways, there's some tips. We see these all the time that it offers to find clear business objectives from the outset, integrate with existing workflows and data and invest in talent and foster an adaptive culture. So anyways, I like this article.

Yeah. This is an insightful comment from Paul here and I agree with it. Right. Is that people have a tough time quantifying the impact they put. They can't put dollar sense to the productivity impacts. They don't necessarily know where the new productivity is actually being redirected. Right. So if I'm saving time here or I'm more productive here, what am I and I'll save for. I think I mentioned this last week. I'll say me and my team from a technology perspective and that kind of falls in two fronts. Right. It means building product and implementing product. Customers are probably 30 to 40% more productive than we were prior to having AI and chat GPT and so forth there. Right. So then the question becomes where is that going? And it's an interesting thing. Yes. Is it reducing the number of staff that we need to hire? Yes. But as I mentioned before, we're doing things that we wouldn't have been able to do before because they would have been overwhelming or just not wouldn't be.

Willing to take on. Right. That probably would be on a list somewhere. Right.

They, they wouldn't have been, they wouldn't have been a reasonable thing to do because the cost and the time would have been too long with the team that we had. That's here. So yeah, it's an interesting one is that is the productivity being redirected into new things and better things and stuff that you just couldn't have done before. I don't know how, I don't know how you measure all of that. Ultimately, I think ultimately you can measure it because you will potentially over time, as you get large enough and at enough scale, you will see an impact, a major impact. You should see both on the top line and the bottom line. But it's early. It's hard to see in the early stages. Yep.

The. Well, it, it is. And I think when you start looking though at the, looking at that component is of it is we have to be in a place for this. Well, I'll just use, I'll just use our platform. Right. When you start thinking from a product standpoint, right. Because you're talking about productivity and then I'll talk about the product standpoint, right. Is your vendor should be very easy, very clearly able to provide you with one data from other customers using the product and what they're seeing. But productivity, increased sales, customer experience, whatever it might be to help you with that. And they should have some matrixes that they can work with you on plugging in. And you know, I, I talk to customers all the time. Most specifically because our Genius Feed tool that is looking at open orders and quotes and you know, open orders that haven't been completed, all the line items haven't been purchased. And when you start sending these messages out and reminding people about the follow up, just even identifying them, you know, I talk about this all the time. Right. We have one particular customer and they do, you know, 70% of their business is tied to quotes. So they've extrapolated and they said, well what does this mean to my business If I close 5% more quotes a year for them? You know, they're, you know, four or five branch located company is. They look at that and say that's four or five million dollars to the top line. And they're extrapolating that back to return on investment on about a $60,000 software investment.

Sure.

Because they've never had insights into all of their open quotes before. So there's two components of it, right. There's the productivity side of what can AI and many different facets do. And then what can industry specific software products do to drive revenue growth?

Yeah. And it's not so much the product.

Right.

It's the visibility that and the, and the data that then allows you to provide that better experience and better thing that's there. So hey, let's, let's, let's zip through the rest here and we can get every, let everybody get out for their holiday.

It's holiday weekend. I'm planning, I'm knocking off today at 11. So. Yeah.

What else is new?

Just, it's Friday. Come on. Just kidding. Just kidding. So, you know, there's just a few articles that are nice in our, our sorry, jumping ahead to the People article, our People in Leadership segment and there was a study there that new just posted about that from the National Labor Relations Board about unionized workers. Are they really better off? Good article there. But there's two more. There's one in particular, the next article is from Smart Brief that's in our People in Leadership segment of the newsletter and that talks about is workplace loyalty a thing of the past? And I think it's really an interesting timing and we talked about that very early on today about what younger workers, whether millennials or Gen Z, are looking at from this standpoint is they want purpose and they want flexibility. Right. And we see that in some people in our organization that they, they're, they're not interested in working on new software features just because somebody says go build this. They want to understand. We have one, one in particular that wants to really understand the impact that it's going to have and the value that it's going to bring to the customer. Would he go work on something that you told him to work on? Sure. But when he wants to understand the impact of what his work does.

Yep.

You know, it just makes me think of that one in particular. That's it. That's it. From that standpoint. So we can kind of jump ahead. Tom, I just wanted to make one stop in the Channel Leaders on the Move segment. You know, normally in that segment we talk about people that have been promoted or moving on, but once in a while we have to say some bad news. But this is an update from contractor Supply Richard Lawless, who was he and his father started the Lawless Group, which is probably one of the largest national rep agencies now. And Richard was just a principal guy. I just commented when the announcement came out on LinkedIn about the stories I have from some late night drives and I called it windshield time moving through different parts of Texas working with him as he was a rep for a company that we did. We. Tom, you're laughing at somebody dying.

No, I'm not. I'm sorry. I. I'm laughing at the comment. It's. You're right.

We'll get to that.

That is inappropriate. Go ahead and continue. Sorry.

No, it was tough for me not to laugh. Everybody at the Lawless group, the rest of the Lawless family, Richard's brother and so forth, that are still running the company. Condolences. Richard is a great guy. I loved the time that I spent with him. So anyways, off of that point, we can kind of scroll through and we've got a few other articles in our industry scuttlebutt section. Gray Bar got a nice little recognition. It's one of the top place for women to work. And then the Home Depots and Lowe's doing the big acquisitions they've been doing are having to go through review and antitrust review. Another one of Home Depot's deals just passed that. So, Tom, let's kind of hit our Goodread sections. There's two articles there and we'll call it a day and then we can laugh at Bob's comment. So the good article about get your operating model transformation back on track. And that is a article from McKinsey on that, which is good. And then the other one talks about in that is from Chief Executive it's magazine. It's how to make fear and your inner critic a strategic challenge that will strategic asset. I'm sorry, the critic of strategic asset. And I will tell you for me, that will be some beach time reading on Sunday.

Okay.

Because I like to corral my inner critic.

Okay.

So.

Let'S turn it into a strategic asset.

That's exactly how I look at it. So, Bob, yes. Aloha to you as well. And I hope you have an aloha shirt on. And you did in fact, miss the AI portion.

In fact, you missed the whole show.

I was actually just gonna say, is it. Is it. Is there something wrong with both your clock and my clock? And we started an hour early or something because Bob's almost always with us and he didn't pop in until the very end. So you did in fact miss the AI computer.

He can go download the podcast later today and hear all of that. He can watch the recording here. I mean, we got your back, Bob. There is. And there is some good stuff other than AI too, if I say so myself.

All of the stuff that Tom commented on was high quality content Today.

You Might be able to skim through and just do all the stuff where I'm talking and hit that. Hit the high notes there.

Maybe, maybe we should offer a version of that.

I think it could be done actually, through AI.

We could totally done. John could do it.

Yeah.

Yeah. We could do a poly market on. On who talks the Most throughout the podcast and who's more insightful.

All right, I think on that note, we'll end off good.

Hey, holiday weekend. Monday's a. A great day for everybody to enjoy some time with their family and take a. Take a deep breath. I know you'll be busy coding. Sunday, Saturday I'm racing. Sunday is. Mrs. Brown and I are celebrating our 21st anniversary, which was on Tuesday, by sitting on the beach in Laguna and then going to the Sawdust Art Festival in the evening, which, that's my idea of saving a lot of money on a, On a. On a anniversary dinner because they serve tacos and burgers there and great, great art festival in the Laguna Canyon. So we're doing that. And Monday, I'll probably go to my desk for a little bit just to answer all your messages and go from there. What about you? Anything. Anything planned?

No, nothing special.

Okay. I know you'll get a lot of work done and I appreciate that. All right, listen, everybody, thanks for being with us today. Again, I'm Kevin Brown. I'm here with my lifelong friend Tom Burton. We do this every Friday. What I didn't mention halfway through the show is that we review the newsletter called around the Horn and Wholesale Distribution. If you do not get that newsletter and you'd like to, just send us a note at hello, lead smart tech.com or jump on the thank you very much, Bob for Happy Anniversary. She is a kind, loving and patient woman, as you can only imagine being married to me for 21 years. So that's good news. But the. If you'd like to get that newsletter, reach out to us by email. You can get it through contacting us on LinkedIn as well as the around the Horn in wholesale distribution podcast, which is aroundthehornpod.com. get that coming out to you. Last favor that we always ask is if you like the content that you see, jump on Apple Podcasts, Spotify, YouTube, wherever you listen. But those are the three that are most impactful that help us leave a review like follow. That is very helpful to us. And I'll say this, even if you don't listen on Apple, that's the one that has the most magnitude. If you left a review there pushes us up in the rankings and we get this information out to a lot more people than we do most weeks. We have five to seven countries that download the podcast and we'd like to get that out in front of more people. So Tom, thank you. Thanks for the comments for the day. I wish everybody a wonderful weekend. Be kind, be safe and do good things.

Thanks everyone.

We hope you enjoyed today's episode and our guests. Each week we try our best to dig into the topics that are impacting your business. So please reach out to us and let us know how you think we can make the show better or topics you'd like for us to tackle or talk about more often. And even guests you'd like to see join us. We're looking forward to bringing you next week's session and hope that until then you stay safe, stay focused, and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation. And finally, please check out our sponsor, Lead Smart Technologies and their manufacturing and wholesale distribution Industry CRM Customer Intelligence and channel collaboration platform. That's Lead Smart Technologies at LEED Smart Tech. Com.