Digital Transformation 911: Raymond Sheen on Why AI Initiatives Fail and How Leaders Can Fix Them

0:01John Lee Dumas:Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire, brought to you by High Level, the all-in-one sales and marketing platform. Today we'll be breaking down digital transformation 911, why AI initiatives fail and how leaders can fix them. And to drop these value bonds, I brought to Raymond Sheen into EO Fire Studios. Raymond is an engineer, author, and founder of PPI Consulting, helping organizations rescue failing digital transformation initiatives through structured diagnostics, system thinking, and practical leadership execution. And today we talk about why transformation fails, the hidden systems breakdown, the early warning signs, and oh, so much more.

0:38John Lee Dumas:And a big thank you for sponsoring today's episode goes to Ray and our sponsors. Stop duct taping your business together. High Level runs your website, your funnels, email, automation, scheduling, payments, and memberships all in one place. And when you sign up at highlevelfire.com, you get a 30-day free trial, plus my exclusive bonus stack that includes weekly office hours with me and much more. Visit highlevelfire.com. Highlevelfire.com. Fire Nation, if you have a high ticket offer and need more quality leads, Nexus Install is designed for you. We'll book you 8 to 20 qualified calls each month, then train you to run the system yourself.

1:16John Lee Dumas:Email my team at john at eofire.com to learn more and see if Nexus is the right fit for you. Raymond, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Okay, well, thank you, JLD, for inviting me on. And what I would say is that whatever your current job is right now, it's not going to exist in three years. You might be the president or CEO of your company. You may still have that title. But with the kind of work you do, the things you do today, it's going to be different. Three years from now, it's going to be dramatically different.

1:55And you need to start making the changes today to reposition yourself for the way work is going to be done three years from now.

2:03John Lee Dumas:Fire Nation, you can be a turtle and stick your head in the sands, and that's going to be a problem. But guess what? You don't listen to this podcast if you want to be a turtle, so I know I'm not talking to any turtles right now because we're talking digital transformation 9-1-1, why AI initiatives fail and how leaders can fix them. So why, Raymond? Why transformation fails? Why do so many digital transformation initiatives struggle, stall, or even quietly fail despite by companies making these massive investments? Culture change is hard. Remember that in the term digital transformation, transformation is the noun, digital is just the adjective.

2:44And it's the nature of transformation is hard. And too often companies underinvest, underperform because they haven't really considered that everything in their business is going to be impacted by the change. It doesn't mean absolutely everything has to change, but everything is impacted by the change. And so they've kept it into a narrow silo, kept it into a narrow lane, but customer expectations are changing. The technology is changing. Your processes are changing. Everything is changing. And in that changing world, you've got to be changing everything to adapt to it. And that's why it's hard.

3:21Even if you make the change, whatever you change to is going to be different a month from now, six months from now. so you're going to have to continue to change and that's again that's just hard to keep up with all

3:32John Lee Dumas:of that it's hard to keep up with but at the end of the day it's giving so many opportunities to those people who are willing to change because so many people are going to stay stagnant you're just going to burst right by them by doing what by actually putting in the work now you're not just going to have all these individuals that are just like these old crusty white men that are just at the top of the heap because they're the top of the heap no you can fly by these individuals with knowledge by being agile, by pivoting. And I want to talk, Ray, about the hidden systems breakdown because when AI projects collapse, it's rarely about the technology itself.

4:05John Lee Dumas:So what underlying system failures are usually to blame? Okay. So when I look at digital transformation, these kinds of AI transformations, there's three parallel paths that are happening that really constitute the system. You've got people, process, and technology. The people roles are changing, the responsibilities are changing. And I know you said that these old white men, I am one of those, quite frankly. I'm getting there too, buddy. And one of the things I had to do is I had to go back to school and relearn, reinvent myself. And I've reinvented myself now several times to try to stay current.

4:42But in addition to the people path changing, there's also the processes are changing. Our customers' expectations are changing. Everything that we do internally can change, needs to change. The expectation for speed and accuracy is significantly different than it was even just a few years ago. The technology is an enabler, and that is also changing. We're seeing that change time and time again. This past week, I was in a room full of 20 executives, and I asked them the question. And I said, how many of you have used AI within the last week or two in some aspect of your work? Every hand went up.

5:21I then asked the question, if I'd asked you that question a year ago, how many of you have ever used AI? How many hands would have gone up? Only two. In a year's time, it went from two people to everybody in that management team is using it. And a lot of that management team were also older people like myself. and they weren't just a bunch of young 25-year-olds. It was a full spectrum. AI is fundamentally changing what we do and how we do it. And if you're not already on board, you are behind.

5:54John Lee Dumas:Oh, I mean, listen, my dad's a 74-year-old lawyer. He's been running his own shop for 45 years now. He's not going to stop. He has this joke he loves. He says, lawyers don't retire. They lose their appeal. If you're a lawyer, you get that joke. If you're not a lawyer, it's not funny anyways. But at the end of the day, like he's literally kind of being reborn now because like all the grunt work that was just like so gross and yucky to do, he can do now with AI and make it so much more fun and efficient and effective. And he was actually kind of getting embarrassed because let's be honest, you know, when we get older, we make mistakes when we're young.

6:28John Lee Dumas:Sometimes we make more mistakes when we're old. It just happens. And he was like, I'm missing some stuff, John, that I haven't missed before. And guess what? this is giving him like a new life because now he's not like, I need to go because, you know, maybe my brain's not quite where it was 40 years ago, as quite as sharp as it was XYZ. But guess what? Now he's like, I'm actually smarter than I am 40 years ago, not because I'm smarter, but because of the tools that I use are smarter. And so that makes me smarter. So think about it. This is like a rebirth. I mean, Ray has been reborn. I mean, you know, instead of having this boring job that he's just going in to collect a paycheck with golden handcuffs.

7:07John Lee Dumas:Now he's got something he can get excited about and change the world with. So let's talk about the early warning size, Ray, because before a transformation effort unravels, let's be honest, there are signals. What red flags do leaders consistently miss? So that depends upon the phase of the transformation that you're working in. So early in the transformation, the warning sign that I see is the secrecy. There's somebody doing something, but it's in the back room. It's a skunk works, and no one's talking about it. And whatever they're working on, it's likely going to be the wrong thing, or at least not really fit with what the business is doing, because they are in this little tiny bubble, and they've missed what's going on throughout the organization, throughout their industry.

7:52In the middle phases, once people are starting to do things, now the area that I see as an early warning sign is when we have what I call the IT and the OT don't mix. We have people who are doing the information technology and the operational technology, they're not aligned. And so we've got the IT folks trying to do their thing, but the folks on the front line working with customers, working on the shop floor, working wherever, they're not aligned with what's happening. And so there's this disconnect that's going on. And when I see that, that's another red flag to me. by the end when we're getting ready to launch when i see a a project that's spiraling out of control and so what we find is that uh whether we're not getting any healthy debate about what to be doing it's just do this do that do this and and we're just directing people we're not discussing it anymore we're missing how we need to actually make this work uh it's that's the indication to me that once again it's going awry it's it's off the tracks because we're just ordering people now to do something, do anything, and no longer doing something that's strategic and important for the organization.

9:01John Lee Dumas:Oh, man, I'm loving this, Ray. We're on a great pace here, my friend. Way to drop value bombs. And Fire Nation, we have so many more things to talk about. We're talking about the digital transformation 911, reset without restarting, what success really looks like, and oh, so much more as soon as we get back from thanking our sponsors. Fire Nation, if you have a high ticket offer, but you are not getting enough quality sales calls on the calendar, Nexus install is exactly what you need. This is a custom LinkedIn client acquisition system built to help you connect with the right prospects, start real conversations, and turn those conversations into booked calls.

9:36John Lee Dumas:Here is what makes it different. We do not just hand you a bunch of theory and tell you, good luck. We build the system with you, dial in your audience, sharpen the messaging, run the outreach, and aim to book you eight to 20 qualified calls each month. Then once the system is proven and installed, we train you on how to run it yourself so you are not dependent on another agency forever. If you have a strong offer, a clear result, and are ready for more quality conversations with real prospects, email my team at john at eofire.com and then we'll set up a call to see if Nexus install is the right fit for you.

10:12John Lee Dumas:Simple, focused, and built for predictable, long-term quality lead flow. Fire Nation, ideas are exciting, but systems will allow you to create freedom. That is where High Level comes in. High Level allows you to build and run your entire business from one platform. Website builder and hosting, funnel and landing pages, email marketing, automation and workflows, calendar booking, payments and subscriptions, even course and membership hosting. Everything works together seamlessly. Plus, award-winning 24-7 support, so you are never stuck. And when you go through my link at highlevelfire.com, you unlock my full bonus stack, a 30-day free trial of High Level with full access, a private 50-minute coaching call with me, weekly live office hours with me, a digital copy of my book, The Common Path to Uncommon Success, my 50 Days to Something execution roadmap, and more.

11:03John Lee Dumas:Stop piecing tools together. Start building momentum. Visit highlevelfire.com and start building your something today. Ray, we're back. And I want to talk about Digital Transformation 911 because you have developed a diagnostic framework. You've called it Digital Transformation 911. So what the heck is it? And how does it quickly identify what's actually broken? So this is somewhat in line with the thing that your dad had said about, he's now much smarter. I've been doing consulting work. I worked in industry, worked in government, and been doing consulting work for 25 years. But I saw the consulting industry evaporate as people started saying, I don't need to go pay this consultant hundreds of dollars an hour when I can get the answer from AI in a couple of minutes and it doesn't cost me anything.

11:54And it's usually a better answer. So what I did as I stepped back and I said, but a lot of companies trying to make those changes, trying to do that digital transformation are missing the boat. They're going off the rails, they're having the problems. And I looked at what were some of the reasons, some of the underlying causes. In this framework that I've developed, I look at three different things. One is the digital side. That's the people, process, technology I already talked about. Those are the key themes. And when I talk with an organization, work with an organization, I look at all three streams.

12:28How are they working those? How have they integrated those? But in addition to that, I look at their project management. Do they have a reasonable schedule and resource allocation of the risk management? Are they using agile in a way that makes sense, or are they just trying to throw stuff against the wall and see what happens? And then on top of that, because of some of my experience and the work I've done in the past, I approach it from a change management standpoint, looking at organizational change. And what are the steps in the framework of organizational change? Do we have an alignment? Do we have people on board?

13:03Are we getting the early wins to convince those who are not quite sure yet where we are, if they should jump on this bandwagon? And it's the blending of all those. Any one of those by themselves is not going to lead to a successful transformation. Where the problem comes in, when a company has trouble, I don't know until I get in there and start looking at them. So when I talk with somebody on the phone for a virtual call, I've got a series of questions I ask in those areas. when I go on site to take a look at it, I actually, I'm kicking the tires. I'm looking the people in the eye. I'm walking the floor, walking the offices, listening in on the calls.

13:42And from that, I can get a clear sense of what's working, what's not.

13:46John Lee Dumas:See, I love that. And I also love what we're going to talk about, Ray, because I think a lot of people are listening to our conversation right now. And they're just like, but man, I've already done this work. So I want to talk about reset without restarting. So for companies who are already mid-initiative and they're off track because they're listening to us right now and they're like, you know what? I just know something's not quite working. I just know I'm not utilizing this at the best way possible. I know we could do better. How can they reset and recover without scrapping everything, Ray, and starting from zero?

14:19So again, I'll go back to the framework. Take a look at what you're doing. Are you addressing the people side? Are you addressing your business processes, the way you do the work? and are you bringing the technology, the right types of technology that are gonna enable the improvements, enable the change in performance, the pivot to happen. So I'd be looking at all three. That's one place I'd be looking. Then I'd take a look at my project management. One of the things that doesn't work well in this environment is to have that classic, perfect Gantt chart. Everything is planned out in detail. We operate in what's referred to now, I don't know if you ever heard the term of VUCA environment, V-U-C-A, volatile, uncertain, complex, and ambiguous.

15:05That's the nature of the work we do. That's the nature of business today. And so you have to have a project plan that is flexible enough to react to the volatility, but still there needs to be a plan. You can't just hope that things are going to happen. You have to have a plan, but you have to work that plan with a flexible element to it. And then finally, I would say, consider the culture change. Are you doing the culture change? Where are you missing things? Do I have everyone aligned? Do I have the thought leaders and the subject matter experts in the organization that are respected? They're going to help me lead the change to make the difference, to make the changes we have to do.

15:45Are we ensuring we have some easy wins to build on? Maybe not easy, but get some small wins that we can build on as we go forward. I would look at all three of those areas and say, where do I see the shortfall? You're probably doing one or two of them well. Find out the one that's weak and shore it up. Patch it up, get it back on track, and then you'll be able to not throw everything out, but get started again.

16:12John Lee Dumas:Fire Nation, I want to talk about success because I'm sure you would agree at the same time, Ray, that at the end of the day, we're looking for success when we tackle these initiatives. So when digital transformation, when it's done right, what does sustainable success actually look like? Not just at launch. We're talking 12 months later, 24 months later. How do we know we're on the right track? How do we know it's working? So this is a very interesting one, and it's counterintuitive. And that's that you know you're on the right track when you're continuing to change. Digital transformation is a journey, not a destination.

16:51And I like to say that you now need to look at your business. It has to go through a change, a transformation to keep up. We need to do that every six months, 12 months, 24 months. 24 is probably too long. Usually it's going to be every six to 12 months. And that also means that when I'm doing the transformation, I don't have to do everything at once. I like to use the metaphor that there's a train that leaves the station every day. And so what is going to be on the train today that leaves the station that I get out, that I implement in the business, that I move things forward? Maybe it's the way I deal with customers and I establish a new customer portal and I engage with them but different.

17:29And then the next pass that I come through, now I'm going to upgrade the way I handle all of my billing and invoicing and labor vouchering and everything associated with that. And the next train that comes along, I'm going to be focusing on some other aspect of my organization. And I'm going to continually upgrade. And every train that comes down, I'm going to upgrade the next piece. So it's an iterative approach, trying to get it all at once, trying to do that big bang of getting everything lined up at once and we're going to be there. and then we can just sit back, pop our feet up and watch things roll by.

18:00Oh, they're going to roll by and in no time at all, you're going to fall off your chair and be watching everybody else going past you again if you're not continually making the changes. Now, that's a hard change for some people to handle because especially those who grew up when I did years ago in business, we were thinking, well, we need to find that sweet spot of performance and then we lock it in and we hold it there and that's what makes a good manager. And quite frankly, now what makes a good manager is you find the sweet spot and you immediately move on to the next one because that sweet spot won't be there very long.

18:34John Lee Dumas:Well, I'll tell you, this interview was the sweet spot because you're here, Ray. You're dropping value bombs. My audience is lapping them up. This is great content. If Fire Nation's like, I need to hear more about this. I need to hear more about this guy, Raymond. Where can my audience connect with you? What is your call to action for our listeners today? Well, you mentioned already Digital Transformation 911. That is a website that I recently created because I found I was starting to do more and more of these diagnostic, these interventions with companies who are trying to do a digital transformation.

19:08And so you can go to that website and connect with me there. Fill out the little contact form, and we'll set up a time for a call. And then from there, we can either do a virtual diagnostic or an on-site diagnostic. Also, you can find a lot of my articles published in places like the Institute for Digital Transformation. I'm a fellow with the institute, and so you would find some of the information there. if you want to learn more about what I've talked about and really more about digital transformation in general. Those would be some great places to start.

19:40John Lee Dumas:Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with RS and JLD today, so keep up that heat. And for links to everything we talked about, visit eofire.com, type Raymond in the search bar. The show notes page will pop right up. And Ray, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Thanks, JLD. Hey, Firing Nation, a huge thank you to our sponsors and Raymond for sponsoring today's episode. And Firing Nation, are you an entrepreneur on FIRE who's looking to share your amazing message with the world?

20:16John Lee Dumas:If yes, we are now accepting applications for EO Fire. So to learn more about becoming a guest, visit EOfire.com slash guest and I'll catch you there or on the flip side. Stop duct taping your business together. High Level runs your website, your funnels, email, automation, scheduling, payments, and memberships all in one place. And when you sign up at highlevelfire.com, you get a 30-day free trial plus my exclusive bonus stack that includes weekly office hours with me and much more. Visit highlevelfire.com, highlevelfire.com. Fire Nation, if you have a high ticket offer and need more quality leads, Nexus Install is designed for you.

20:53John Lee Dumas:We'll book you 8 to 20 qualified calls each month, then train you to run the system yourself. Email my team at john at eofire.com to learn more and see if Nexus is the right fit for you.