Genpact CEO Tiger Tyagarajan: Digital Transformation Isn’t About Technology, It’s About People

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0:43Adi Ignatius Hi, welcome to Harvard Business Review's The New World of Work. I'm Adi Ignatius, Editor-in-Chief of Harvard Business Review. It's great to have you here. Every week on this show, I speak to a CEO or another leading thinker, and we talk about this reset moment for all of us in how we work, how we collaborate, how we innovate. So we have a great guest today, but before I introduce him, a word from our sponsor, Unisys. Where some see barriers, Unisys sees breakthroughs. Unisys pushes what's possible across digital workplace, app modernization, cloud, and beyond. Unisys, keep breaking through.

1:19I also, if you like this content, I also want to make a quick pitch for our flagship podcast, idea cast same same format as this one of our editor hosts speaks to somebody who is has big ideas about the about the workplace about management about the future of work so check us out wherever you get your podcasts and we also have a newsletter associated with this show with the new world of work so if you're a subscriber go to hpr.org slash newsletter it's something like that and And you can subscribe to the New World of Work newsletter. So with that, I want to introduce our guest today. And he is Tiger Tigerajan, who is the CEO of Genpact, which is a global firm that advises clients on digital transformation.

2:06Tiger himself helped transform a division of General Electric, GE Capital International Services, into Genpact, which is a company that now has more than 100 ,000 employees and annual revenue of$4 billion. He originally served as its COO and since 2011 has been GenPAC's CEO. So, Tiger, welcome to the show.

2:28Tiger Tyagarajan:Ali, thank you so much for having me on the show. Thank you. All right. Well, let's jump right into it. So, you know, as I said, a lot of the work that you do is advising companies that are going digital. I want to ask you about that a little bit because I would imagine practically every company describes itself at this point as digital. but you're probably seeing a more sophisticated, you have a more sophisticated lens on this. So talk about what is the biggest blind spot for companies that are on this transformation? So Adi, it's a great question because we're clearly seeing every company think through what does digital transformation mean.

3:05Tiger Tyagarajan:And the first thing I'll say is we've got to distinguish what one could call digitization, which is automating processes, making it straight through, touchless, just no human touches it, as compared to digital transformation, which is really running the entire business differently, having people take decisions differently, leveraging technology and tools and the cloud and AI and machine learning, dramatically improving user experience, customer experience, all of those things. So parsing those two would be important. And, you know, when it comes to digital transformation, one of the big learnings we've had is that it's not just about technology.

3:46Tiger Tyagarajan:It's about processes. It's about the data underlying those processes. It's about people. Because in the end, you really want to have people change the way they work. And that's when you really achieve digital transformation. So if you ask me for the single biggest roadblock, it's how do you drive change through an organization? And by the way, the more successful an organization, the more that challenge increases, as you can imagine. So just to the audience, if you have questions for Tiger, put them into the chat and I'll try to get to audience questions later. But I want to pick up on what you were just talking about.

4:19So you were saying, you know, one of the keys to digital transformation is how, you know, how we're interacting with our colleagues. What do you mean by that exactly? What's the digital version? What's the most? When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast.

4:52That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. effective version of that?

5:01Tiger Tyagarajan:So, there's too many versions of that. So, let's take a couple of examples. So, think about a bank that lends to small businesses, something that's very important for the economy, something that a lot of banks do. And, you know, the application comes in, typically someone in an operations function puts all the data that is available in the application onto the system. And then the system then lands up and takes the application to a risk officer whose job it is to evaluate that application, blah, blah, and take a decision. Now, the reality is that you have a human who is prone to making errors, who has biases, et cetera, often do that underwriting.

5:45Tiger Tyagarajan:You change that to a completely transformed way of running that lending operations and approval of a loan, you could think about the application coming in, getting read by a machine, getting ported onto the technology. The technology then uses past data and patterns to say, here's the kind of prediction that I have about this customer. Payments, what the customer likes, the interest rate that works, should you approve or not, et cetera. And then finally, their risk officer then takes a look at it and then takes a final decision. You can drop cycle time for approving a loan from, you know, sometimes it takes 20 days to minutes and hours.

6:26Tiger Tyagarajan:And the impact that has on the customer, the delight of the customer, the fact that it actually drives economic value for the customer, and therefore for everyone, is what really digital transformation is about in that one example. And you can apply the same example to supply chain where, you know, a retailer places an order for milk or chocolates or cheese, and that has to be processed. Now, all of that can be done again by the machine, including getting the truck, getting the right truck, having the best route, driving low carbon footprint, not just lower cost. Those are the kind of things that people are really beginning to do in order to change the way business runs.

7:05All right. So if you're talking about machines, machine learning, machine response, we got to talk about open AI. We got to talk about chat GPT. So we did the show last week from Davos, the World Economic Forum in Switzerland. And I probably had more conversations about ChatGPT than about any other topic. So everybody's playing with it. I'm sure you're playing with it, experimenting with it. I'd love your thoughts on, you know, what is that going to do to business? What is that going to do to jobs? I mean, I'm amazed by the technology. I'm also aware of its limitations at this point, but I think it's going to get better quickly.

7:38What are some of your early thoughts about ChatGPT and what it says about the future of AI?

7:44Tiger Tyagarajan:Yeah, it's obviously very, very topical. I've had a couple of hundred of my team spend a couple of days kicking off the year just the last couple of days. And ChatGPT has been one of the central themes that people kept bringing up. I'll start by saying ChatGPT is one more step in the evolution and the sophistication of AI and AI technologies. Not that unexpected. it. This progression has been expected and will continue to make progress. And the view that we've always had, I've always had, is that it will change the way work gets done. I've had a clear view that it does not replace labor. It changes the way that labor will get used.

8:29Tiger Tyagarajan:It changes the skills that are needed, et cetera. I almost correlate this to the invention and the building and the spread of calculators or Excel spreadsheets. Go back to the time when we didn't have calculators. It was important for people to know how to add, subtract, multiply, divide. And those were tests conducted before you hired someone into a particular job. You don't do that these days because everyone uses a computer. Everyone uses Excel. Everyone uses a calculator. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more.

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9:30Tiger Tyagarajan:Comes a common platform that everyone uses. Now the question is, what can you do with it? How do you use it? How do you create value? So our view is that ChatGPT is going to open up a whole set of avenues for value creation. You know, I heard someone talk about an example just in the last few days where a developer has been able to use ChatGPT in order to pull government documents and serve it easily to someone deep inside a village in India in order to have the farmer take a better decision on getting, you know, government subsidy or ordering seeds or fertilizers. So I think the vision that I've always had about AI is that it's going to make the cost of so many things lower that it's going to increase the spread of education, health care, all of those things where sometimes the barrier for a couple of billion people in the world is that the cost of those things is very high and the spread is very difficult.

10:29Tiger Tyagarajan:So very optimistic view on this. Yeah, that's great. And those are very positive use cases. I mean, there is, at the very least, we're talking about a short-term dislocation, you know, seeing the ability of ChatGPT to write code, you know, quickly that's effective, makes you wonder about code. It's the same thing, you know, the people used to sit around adding and subtracting were replaced by machines. You know, our code is going to be replaced by machines. By the way, our editor is going to be replaced by machines. I mean, I can see the need for an editor or two to make sure the machine is coming up with good content.

11:05But I mean, aren't we talking about far fewer individuals needed to collaborate with the machines as they get better and faster? And I just wonder what all this white-collar labor is going to do.

11:20Tiger Tyagarajan:So the answer is yes. We will probably need far fewer X, Y, and Z. all the kind of people you described, but we'll need a whole set of new people that we didn't need before. You know, one of the things that I believe is going to happen, and this is a journey that actually has been on for some time, the importance of soft skills in everything in the world is just going to keep rising. The importance of building relationships, empathy, delighting the customer, really understanding the needs of the customer up actually listening, then the curiosity that a human being brings, I don't think yet AI has been programmed to actually become curious.

12:07Tiger Tyagarajan:In fact, AI has been programmed for the reverse, which is what is the pattern told us so far and therefore what moves we should make? Whereas curiosity actually says, that's the move I probably should make, but I want to explore something that I haven't done before. So I want to go north, even though the machine says go south. Only a human can do that. So we are big believers in augmented intelligence rather than artificial intelligence. And transition always has pain. Every technology transition has had pain. Reskilling, therefore, takes on a whole new meaning. It's been going on for some years now in the world, and I think it just takes on a whole new meaning as these technologies become more pervasive, ubiquitous, and usable.

12:45So one thing ChatGBT is very bad at is sense of humor. And I keep trying to get it to write decent jokes. And they're always terrible. They're just sort of basic puns. And it is responsive. If you say, that's not funny, that's just a basic pun, it'll say, all right, and try another attempt and try another attempt. But I think the joke writers are safe, at least for another few years. But on the reskilling question, all right, so this isn't the first technology that has prompted a conversation like this. I have people tell me sometimes, we have good intentions. We're not very good at reskilling that, that whether it's on national levels or corporate levels or any other, by any other sort of education.

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14:04Give us, you know, give me your thoughts on where we are and what we need to do, because we're talking about large numbers of people for various reasons who need reskilling to succeed going forward.

14:15Tiger Tyagarajan:Yeah, Saudi, that has been a problem in the world for some time now. You're right. And the bad news is I think we still have a long way to go, both in terms of the impact and therefore response in terms of reskilling. The good news, the glass half empty, the optimist view, and I am an optimist, is that over the last five odd years, corporations, businesses such as ours, but we're not alone in this, have taken significant steps to reskill their workforce. And the reason to do that is actually very simple, because if you find a way to do that, it becomes a competitive advantage. You actually excite your employees.

14:52Tiger Tyagarajan:You actually make them valuable for your clients and your customers as they learn these technologies and use them. It requires a whole new set of motivation, incentives, time allocation. It requires an understanding that I've always had, which is I don't think anymore life is about 20 years of education followed by 40 years of work followed by let's say another 40 years of retired life. It's actually about continuous every couple of years refresh you know reskill even maybe take time off to do that a couple of months and and I think businesses must have programs that do that. Platforms that allow reskilling to happen have become so much easier to use, so much better.

15:38Tiger Tyagarajan:And it's not about big classroom training programs. It's bite-sized, video-based, gamified. We've done that across the company. In the last 18 months, we've had 70 ,000 out of our 110 ,000 of our global workforce enroll themselves and learn data analytics at the base level using a program that we call DataBridge. And it's caught on like wildfire because everyone needs to learn, wants to learn. And of course, we've been driving it. Now, governments, educational institutions, they all also have to approach this. But I sometimes think that at least in the Western economies, in the more democratic and capitalist economies, corporations such as ours have to take the leap.

16:27So I want to bring in a question from our audience that's on topic. I don't want to just talk about sort of high-level technology and AI, but this is a good provocative question. This is from Chander in Zurich. And the question is, how could generative AI, like ChatGPT, potentially disrupt the business model for a firm like GenPact?

16:50Tiger Tyagarajan:Oh, a lot. A lot. Don't worry. Chatham House rules here, so you can speak freely. It's a lot. And when I'm responding to that question, which is, by the way, a great question, I interpret the word disrupt in a positive and a problem sense, a threat and an opportunity. So left to its own devices, the work that we do will change. And if we don't do anything about it, then, of course, we are going to get disrupted. But the smart people, businesses like ours and other businesses like ours, will actually say, therefore, I'm going to find a way to use that technology. So if you think about at the core, often the work we do is take information from one source, take another information from another source, often from within the company, our client's company, and then take information sometimes from the outside world.

17:42Tiger Tyagarajan:It could be the weather report. It could be, you know, what's happening with interest rates. And then bring all that together, apply mathematical and algorithmic models to then take a decision that then gets put back into the system. At its core, a lot of the work we do, a lot of the work we do. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes.

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18:30Tiger Tyagarajan:What the knowledge workers do is that. And then there are people who build those models, code those models, etc. You could have a chat GPT generative AI kind of thing to actually do some of that. Having said that, it could also write the report that comes out of that that says this is the decision that I took and here's the rationale for the decision. All of that, you could actually have that chat GPT generative AI do it. However, I would argue that you still sometimes need a lot of information from the customer and it's not been provided. So you've got to call the customer up, explain to them what they need to provide, and they then need to provide it.

19:08Tiger Tyagarajan:Two, you need a human to say, this is a gray zone. I don't think this is the right decision. I'm actually going to increase the risk in my portfolio. And therefore, I'm going to actually take a decision, yes, even though the credit score here right now says a no. So every aspect of the work that knowledge workers do will change. I don't think there's any denying that. There are going to be firms that are going to grab that disruption and be the disruptor. And there are going to be others who will get disrupted. So the question is, who's more agile? Who's more nimble? Who has the culture to embrace new things?

19:46Tiger Tyagarajan:Who has the culture to reskill? That's going to differentiate the winners from the losers in every industry, in our industry as well. So here's another question. This is from Autumn from the U.S., from the city of Indianapolis, who's asking, how do you see AI implementation into education specifically to prepare students with these skills we're talking about needed for, you know, needed for the future? In other words, to what extent will AI be part of this retooling, reskilling effort? Phenomenal question. And actually, it goes to the core of often when technologies, you know, start maturing and starts disrupting the answer and solution often is the technology itself so if you take the case of ai and you say it's going to disrupt jobs however that same technology is going to create jobs education is a great example of that as i said pick a number a billion and a half people in the world do not have access to education of the kind that actually they should have partly driven by time, asynchronous nature of that education being required, the creative back and forth that often only a teacher can do, and that's very difficult in places like deep into the interiors of Africa, India, Latin America, and so on.

21:05Tiger Tyagarajan:And all of a sudden, on digital platforms with AI sitting behind the scenes as an engine and understanding the person who needs to get educated so that the right material gets served in 10-minute, 15-minute, bite-sized, consumable, video, gamified. I mean, and dropping that cost down to literally cents versus tens of dollars will change the game. You suddenly bring a billion and a half people into the education workforce. The pie for education will expand. The cost will reduce. And therefore, more course content will be needed. More people will be needed to make it gamified. I mean, I can talk about a whole set of new industries that will get created just on that one question.

21:49Are you bullish on the metaverse at this point?

21:54Tiger Tyagarajan:Long term, yes. And I want to explain bullishness. I'm bullish that it will become a thing that will become part of the way people live their lives, work gets done, business gets transacted, et cetera, et cetera. I worry a little bit about what it does to human and social interaction. Will it further drag humans into the virtual world at the expense of time being spent in the real world with real people, with nature? I mean, we can go on and on. Over a hundred year period, I guess, in an accelerated fashion, that's been happening. And I do worry about that because I think there is real value created in the world.

22:41Tiger Tyagarajan:when people come together and debate with each other, fight with each other a little bit in a constructive way. I worry a little bit that all of that joy of that gets taken away. I also worry about what it does to mental health and so on and so forth. So still a long way to go. Bullish in what it will do and can do, and not so bullish in the impact it actually has, and how do you balance that, like all technologies? Yeah, yeah, good question. All right, I want to shift a little bit, and I know that in your consulting work, in your engagement, You talk, you think a lot about ESG, you talk a lot about ESG.

23:14And, you know, ESG is problematic. I mean, I think, you know, at least in the U.S., you know, the right thinks ESG considerations are too woke and that companies should just think about generating profits and that everything else will take care of itself. You know, on the left, there's a feeling that ESG, as we measure it, is insufficient. And for anyone who doesn't know the jargon, I apologize. I mean, ESG, it's environmental, social, and governance. And companies are ranked by independent observers on their ESG ratings and on their ESG potential. And it increasingly drives investor decisions and things.