Inside Spotify’s AI Transformation - Spotify CHRO Anna Lundström

0:00We do not know how the future will look like, but we do know is everyone needs to equip themselves. then we talk about the efficiency and opportunity with AI.

0:34throw out the handbook. We're here to redefine rules to work for us, not against us. Let's dive into another episode.

0:50Hello, everyone. Welcome to another episode of TruthWorks. I am Jessica Neal, your host, and Patti McCord is still recovering. We love you, Patti. Get better. I've been saying that many episodes. She is going to come back, I promise. But exciting, exciting news today. I have a friend of mine on the show who, I don't know, we have a little bit of a similar story, but her name is Anna Lindstrom. She is the CHRO of Spotify. And Anna, I'm not going to tell you her whole story because I want you to tell it, but I feel like I grew up in Netflix and then kind of got promoted to be CHRO. You grew up at Spotify and got promoted to be CHRO.

1:32So I think we have that in common and it's fun and honored to have that happen. But then it's an incredibly hard job. And sometimes, I don't know if you experienced this, but sometimes people see you as the baby you were when you were growing up and they don't always see you as the CHRO. So how are you? How's it going? How's the new job? Tell us everything. First and foremost, so great to be here, Jessica. It's an honor to do this podcast together with you. And I feel like we instantly clicked, you know, when we chatted back in the spring. So thank you. And super, of course, excited to talk about this together with you.

2:13Yeah. So how's it going? I mean, I like to say that the building still stands. No, but that is a joke I'm making. But it's going quite well. I'm, of course, super excited and challenged at the very same time. It's also very interesting that more or less at the same time that my appointment was announced, the whole AI era in the world takes off. I mean, AI is not new, but I think we all can agree that this year is when it took off. So I kind of added that to my plate of, you know, responsibilities. Yes, no, I know. Laszlo was on the show a little while ago, and we were just talking about how complicated this job is and how complicated it's become over the years because not only are you the HR strategist and talent strategist for the company, you're also the chief medical officer, the chief diversity officer, the COO, and now you're the chief AI officer.

3:16100%. and there's just the amount of things that this role has to figure out is just really complex so how are you well i want to hear all about the ai stuff but how are you handling all of that yeah no yeah i'm so happy to share and then if i take a step back i think you know you're also like how's it been going and also talking about all these different things we have on our plate at CHROs. I'm genuinely grateful for the almost 10 years I've gotten at Spotify. So I've seen the company grow up. Like I started here when we were a startup, like a couple of thousand employees, and now we're close to 7 ,000 and much more of a, we don't like to say mature, but we kind of left our teenage years behind.

4:02And I'm also very lucky that I was set up very well by my predecessor, Katarina, who's meant so much to me. And I've done almost every role in HR in this company. So that learning puts me, I think, in a good position now to oversee the HR organization at Spotify. So when a challenge like AI comes in, I have a lot of that foundation to stand on. I have a fantastic team of senior HR leaders that I work with as my colleagues. I don't see them as me leading them I mean, in a way, I see us as one team working together, trying to get a transformation journey for the company where we don't have a blueprint.

4:44But that's also always been the fun thing with Spotify that regardless of who you ask that work here, I think everyone would say it's an environment where you get to work on so many creative and challenging things where there's not really a blueprint for most of it. You get to figure it out. And that's what I'm doing right now. when it comes to the AI transformation from a people and organizational lens. Right. Yeah. I mean, so I think it'd be great for our listeners to kind of hear how you are thinking about that. And I, cause I think, you know, you're right. I mean, like this year, it sort of AI has been around for a long time, but it's at this like inflection point.

5:27And, you know, now boards are having conversations about it. They want to know what the strategy is. CEOs are saying, hey, go figure this out. And a lot of organizations don't even know where to start. So how did you think about that? How did you strategize around it? So happy to share. I think many knows that we already have worked many years with AI in the product. So we're quite well advanced there. However, when you look at AI within the organization, obviously that that was new to us also earlier this year with AI in the organization I mean all the variety of jobs and functions that we do have we have everything from engineering to of course music people to content producers to business people and everything in between so that made it extra interesting and challenging to put how do you put like an AI transformation strategy together for a company that kind of employs that broad type of jobs and diverse people, which also makes it really fun.

6:35So what I will say is my number one key advice is this is not HR alone running the AI transformation. This is not R &D alone. This is a cross-functional collaboration across the organization. So early on, I partnered with our chief product officer, our co-president of chief product officer, Gustav Soderstrom, as well as our head of platform, Tyson Singer, to put together our beliefs around where we think the organization should be and look like a couple of years from now, very much also inspired by a lot of conversations that I've had, obviously with Daniel, our CEO. so we first and foremost focused on humanizing ai because as many companies did jessica earlier this year they all went out and shouted from the roofs like you have to get on the ai train and of course we said that to our employees but we said it with a different lens we said you have to become future ready both for your your development and and career advancement at spotify but also in the world like regardless of where you go ai is here to stay it's not an era right and what do we mean by humanizing it well we obviously shared a lot of advice and recommendations how you can learn with ai so we leaned into the learning with a broad plethora of trainings and tools that we quickly offered up so we gave everyone chat gbt licenses early on we put together our own trainings around this is how you prompt very effectively this is kind of security items you need to think about when working with or playing around with ai then we offered up a full week of hacking with ai that usually was set aside for the r &d communities so we call it hack week we open it up to the full company and we asked everyone to submit their hacks and then we shared it and we keep sharing it out and then on a broader company level we have put together like a governing body, if you will, like a steer code that is called AIM, AI Momentum, that represents representatives on senior levels from all these various functions that I mentioned.

8:47And Tyson, our head of platform, and myself are the co-sponsors. And that governing body very much functions in a way where we make decisions around what tooling should we offer, ensuring that we not do duplicative efforts when it comes to initiatives and things like that. It's really, really, really leaning into the cross-collaborative partnership across the company to drive this transformation forward. Yeah, that resonates because I really feel like that's the only way that you can make progress. But what I love about what you said is where you all started. You sort of started with your philosophy, your beliefs, right?

9:28And then you went from there. And where I see a lot of companies, they're just doing a bunch of stuff, right? They're trying a bunch of stuff, which is also good, but they also aren't grounded in like, here's what we believe in. Here's our philosophy around it. And I think that when you have that as a foundation, it allows you to collaborate more effectively and experiment and test and quickly figure out what really does work and what doesn't. But when you don't have a clear grounding or belief, it's hard to build from. 100%. So we've started with the there. And again, it's formed by the conversations I had very early on with Gustav, with Daniel, with some other senior leaders at the company.

10:14And we're calling the strategy from here to there. And we have painted a picture of there. And then we basically want to figure out to take steps there. But we have a set of beliefs. And it's much better, we think, to have a set of beliefs that we can then deviate from rather than, as you say, just trying a bunch of different things. And then you don't really know what you're supposed to do with them or what the end goal is. Rather, we paint the end goal and then we're going to work our way there. Yeah, I love that. Yeah. So tell us what you're finding. What's exciting? I find, I mean, we are very, very humble to the fact that we have a very digital workforce already.

10:53our employees were early on like jumping on that train and very excited about ai i actually don't find a lot of employees in our company that are expressing fear around ai i think it's great i think it comes from both from the actual type of of roles we do employ and like the digital first mindset but i will say and i like to say that the approach we have taken has also made people excited because we have said to our employees we're going to equip you to become future ready we're going to be with you along the journey you're going to have to of course learn yourself but here you go so we have a super high adoption it's almost like 100 % now in terms of usage of ai so that moved super quickly i think the inflection point was that week when we offered hack week up to everyone was in may this year then people just jumped so we find it and we find that people are on the journey with us um we have very transparent and good communication everything from tactical questions coming from staff into like our our aim program but also sharing out senior leadership learnings how we play with ai and so on and that sharing has also led to, I think, an openness around how we all dare to talk about deficiencies with AI, the opportunities with AI, maybe the risks with AI.

12:19So we have an open dialogue in the company around it, which is super important. And we are still very much experimenting. So we were not there yet in our here to there, but we have the foundations are great. We have a great foundation to stand on. Yeah. And I think what's important about what you just said is there is a lot of fear for employees around this. And I think when you're rolling it out like you all are, where it's like we're going to help you, we're going to educate you, you have to learn this no matter what. Versus some companies are more restrictive or more controlling around instead of like, here are the things you need to know, the risk, right?

12:57Here's how to handle those risks. but let's go experiment and try versus like only do this one thing and try this one thing and they make it a very scary thing and oh we don't know how it's going to impact jobs and nobody nobody does you know but i think being honest about that and teaching your employees and bringing them along on the journey is is a way to to subside that fear yeah exactly and another piece that we very much talk about this yes we do not know how the future will look like what we do know is everyone needs to again equip themselves then we talk about the efficiency and opportunity with AI so we we talk a lot about a lot of the tools that exist today will help you become more efficient and then you will take that time and you redeploy it into your opportunity list all of us have those this opportunity pool that you just are you're just waiting to tap into it I have this list of usually those things on my to-do are the more complex the more lengthy the ones that you you like i will get to them soon yeah one day one day what if you carve out that time much quicker now so that's how we talk about ai also like for example we work with bets like that's our goals and and this last cycle we had 40 bets that we did we did we did bets at netflix too yeah i'm sure It's a common name in the tech world.

14:22We then say, what if we could do 60 bets in the next cycle, but with the same number of people and in the same amount of time? So that is a way to talk about and engage people also with that, where they really have to redeploy and the tedious work, get help with AI and like get creative with the time you have on your hands. Yeah. And is that what you're seeing right now, just in terms of the things that you have rolled out is it's more saving people time on administrative like things that take a ton of time. But then when those are kind of off your plate, to your point, you have a lot more free time to focus on the strategic stuff.

15:06Exactly. Yeah. Or have you guys have you guys stumbled on anything that you think is really game changing or. I think right now we're still in experimental phase, but very much seeing early effects, such as like time gained, being able to spend much more on strategy and creative thinking. And I think we've done it. What you need to be mindful about is also that, as with all type of learnings, it takes a bit more of your time first to kind of work with AI and get used to AI. And then I think that like hockey stick effect is going to come. And we're starting to climb on that effect now, but we have also allowed for employees to take that time to learn.

15:49So cool. Yes. Very fascinating times. Yeah, no. Okay, well, let's talk about you in this role. And it's less new now. You're sort of getting your sea legs, if you will. But what are you learning? What's different for you? Very good question. i'm learning to be doing like talks like this that i'm doing with you right now which i know is it that that is a big adjustment i didn't i was like why do i have to do why do i have to do these things i mean i have so much work to do yeah it's a very much yes that ambassadorship is i mean again katarina was amazing putting me in the many times in in the front seat but now when you like are in this in the situational job you are really the the front front facing person so that's kind of new and i'm actually learning a lot around how to do that effectively getting the help i need like very much and getting used to preparing for for talks both like this podcast wise or doing a keynote or participating in an article so that is that is you know challenging and fun, I would say.

17:03I know I keep sounding like a broken record around the AI piece, but that is a fully new lens. Add that to the complexity of everything a CHRO have to do. And I think the most of, yeah, I would say the majority of all areas that I'm overseeing, as I said, I've done the roles in already. This is new. This is no one has to answer and you kind of need to dig into it. Yeah. And is it what you thought it was going to be? Yes. or even better. Okay, good. Yes. Yeah. I'm really enjoying it. I'm really enjoying it. I get a lot of energy out of having a full plate, which I think we all can relate to, right?

17:42Yes, for sure. Well, I think what's great about you too, is that you, you know, you kind of held every job you could have, you know, so some, some people who, you know, grow into this role, maybe they come from the HR side and that's really kind of all they've seen, or maybe they come from the recruiting side but you kind of did everything yeah so you you you really kind of knew all facets of the role i feel like that's an advantage yeah and for my my team a disadvantage no not really but i know where the bodies are buried i'm like yeah i know this is harder i know this is should it be so hard and yeah no but yes i genuinely believe and i've said this too obviously because a big part of my job is coaching leaders and i always say that the most effective leaders It's like you actually know the technicalities of the job.

18:31Of course, you have to have the leadership skills and kind of the inspirational skills as well. But knowing the technicality of the jobs you're overseeing is, I think, a key cornerstone that you need to have. Yeah, yeah. Well, I know that people are just fascinated with the company because similar to Netflix, like you're a household name, you know, like, I mean, my five-year-old's like, play it on Spotify, you know, and so you're something that are a product that is in people's lives and days and brings joy and distracts them from whatever else is going on in their lives and gives them a minute to relax or listen to something or learn something or just dance.

19:16And you have to have, I think, with that kind of success, you have to have a culture and an operating model that allows you to continue to do that year after year. And we had that at Netflix and still do. And I know that Daniel and Reed are very different, but they actually think kind of similarly around some of these principles around operating and culture. And I think they have similar views on compensation. So tell us a little bit about the culture and how you guys think about operating and running the business. Yeah, I'm happy to share. And this is also very timely for me as there's a lot of exciting work going on in this specific area when it comes to culture.

20:03So if we take a couple of steps back, actually, two years ago, we did quite a lot of changes to our operating rhythm by appointing two co-presidents. So Gustav runs the R &D side, and then Alex runs the business. And they very much changed the operating rhythm by implementing an E-team. An E-team is our top 20 most senior leaders across the company representing all different functions at Spotify. An E-team is actually stands, E stands for execution team. It's not the executive team. It's not executive. Yeah, that's good. And this team that I'm part of, we meet every week, every Tuesday for three hours straight to discuss everything from checking in on that bet board.

20:50How are we doing? What's maybe blocking? What's maybe need to be accelerated? What's going well? Where do we need to pivot and things like that? We also talk about broader strategic items, updates, and a broad variety of things. But the whole focus is to move the company forward with the execution mindset that that team has. So that's the kind of baseline for the operating rhythm. And then, obviously, 2023 was also a pivotal year because we, as many other tech companies, realized that they had hired a bit too much. money wasn't free anymore they had to make some tough decisions to to kind of uh and be more opex for uh focus going forward so so at the end of 23 we we made that um difficult but necessary decision to to do our deduction in force um and since then obviously company doing extremely well from a business and product lens and also very we have created a very famous culture so all that we'll get to now with the culture is that as we implemented this new operating model about two years ago that team started to to work very differently um and which also has triggered effect throughout the company and again people we started to do really well from a business lens we hadn't then started to say out loud what were the behaviors that were maybe new or maybe needed to be tweaked to kind of maintain this new rhythm and this new focus of ours.

22:24And that is what my team has now actually worked through. So we've had a set of values that are extremely, has really, really served us well all throughout our startup and scale-up era. And now we felt based on the new operating rhythm and where we are today and where we are going that these values took us to where we are today and we are not forgetting where we came from but we need to evolve to unlock where we need to go yeah so as of right now i'm working on a rollout of our new values how exciting across the company that's exciting i think you know one One of the things that I see companies do is they don't do that, right?

23:17Like, you know, and we were always at Netflix thinking about evolution. And of course, you have this foundation, right? That you built the company upon, which are your values. And you don't forget those. But at the same time, as you grow and you scale, some become more important. Some become less important. There are new ones, right? And you have to rework that operating model. It's not just these words that are on posters on the walls or memos that you send out. This is how the company makes decisions. It's how you get alignment. It's how people know what to do, right? And I just wish more companies spent time really thinking about that and being willing to throw out what doesn't work, add in new elements that are going to amplify and propel people.

24:18And I don't know how you feel, but I always felt about my job is like, I don't know, I never thought about myself as like the CHRO. I didn't even like the way that that sounded. But I thought about myself as like the chief effectiveness officer. Like my job was to make the company more effective, get the alignment, get the communication, get people moving so that we could go at a pace where we could actually win and achieve all this stuff. I love that so much. It definitely resonates with me. Yeah. So talk to me, I mean, like, talk to me about how, and I think, I don't know, I think you and I are lucky, probably, versus some maybe other people that are in similar roles to what we have had, is that we have founders and executives that are invested in this work.

25:10Yeah. Right? Very much. And they know that it's important. And so when we would try to make these shifts at Netflix, like I could actually make them because there was an investment at the top, right? And they were equally going to do the same amount of work that I did, right? So talk to us a little bit about that. And how did you roll this out? And how do you get everybody to do it? Because I think that it's almost easy to kind of see the areas of opportunity, but it's really hard to change behavior. Yeah. Yeah. I think it's so passionate about talking about this. And I think it actually serves really well that we had already transformed from an operating model perspectives.

25:54And you may want to came from the top. Yeah. Yes. And you may want to like, oh, well, well, we, we, we should have done maybe shifted our values two years ago. No, I don't think so. Because a couple of years into the new operating model, then it's quite clear what journey we're on, who we have become, our employees resonate with the new ways of working. So that and then what I and my team have been doing, and it's very much my senior team that has worked together on this, together with executive team and employees, is that we've done everything from deep interviews with every senior leader at the company to all the regional leaders in the market to get this global lens to do a lot of workshops across the company with employees to ask for their feedback on existing values, what resonates with them, what maybe do we need to tweak, what does not resonate with them anymore.

26:49And then right now we're about to embark on a roadshow that together with more written comms and town halls and internal communication channels, We are also actually going on a more of a physical roadshow to actually talk to our employees across all offices about these new values, ask for their help to kind of, you know, maybe evolve them into a written piece and things like that. So they're very much engaged in it. But it's a full collaboration with senior leadership, employee buy-in, and the global lens because we are truly global. Plus 40 countries where we have people, 24 markets where we have the product.

27:34So obviously what we do and say needs to kind of mirror the world and vice versa. Yeah, similar challenge at Netflix. But I think what's important for people to hear is that you realize that behaviors have changed. You let that kind of codify and learn. And you say, these are the things. You went off and you got lots of data and research. You had buy-in from the top. You had buy-in from everyone else. and then now you're rolling it out and you're making, and you're productizing it, right? Like now you're going to make it a product. I think without those crucial steps in the beginning and just kind of going to the rollout, these things don't ever work.

28:22You kind of have to do the full thing and it's a lot of work, so. Yeah, it is. But it's also very, very, another piece that is very connected to this is this, is a here to there journey that I mentioned. and what again what took us here will not take us there and the there is very different to the here which means that another set of of behaviors are needed so very much resonates with with that strategy as well so it's very much interconnected is there like one you want to talk about like one that you think is um maybe surprising for people or it doesn't even to be surprising maybe it's just like a practical like logical thing yes it's actually three so i'm very happy to talk about it and this is more caveat for the recording but this is where we have to wait until that yeah of course but this is where we will wait to to november but yes there's three and we make it very simple so it's one team okay i like that make it happen okay and then it's human judgment okay so one team may maybe table stakes but still you cannot emphasize it enough that you cannot be successful here at spotify if you don't work as a team member you're part of a team we collaborate we're here for the greater good uh of spotify it's not a one-time show here there's no there's no solo artists right we're a band and two we make things happen again going back to execution team we move really fast we're very thoughtful and and you know we also are timely in our um in our launches and and things like that but we do make things happen you should know that if you work here or if you want to work here that it's it's execution focused and then well i love and i love that that team the e-team is not executive team it's execution i love that Yeah.

30:23And then third is human judgment, which is very much what is the differentiator in the world of AI. You can have all the tooling in the world, but if you can't, you don't have the judgment to sort through the noise to like, yes, this is right and this is wrong. I usually compare it to, you know, when you wrote your thesis in school and you had to like state your sources. That's exactly it here. You need to like know the sources. You need to use your judgment. If you get this prompt, like what is accurate? Is this like having that judgment? Also, when you make decisions, it's absolutely crucial to be successful here.

31:00Well, I mean, we were big fans of judgment at Netflix. And I don't know. It's like when people don't have good judgment, it's just there's nothing. It's like an instinctual thing. You can't teach them how to have good judgment. I mean, you can showcase studies, you can provide examples, but if your instinct is to do X instead of Y, that's really hard. But judgment is so crucial, especially when you want to move fast, right? Because you have to empower people. Having both is, yes. Yeah. So crucial. Well, let's change the topic a little bit because I know we're about to run out of time. I wanted to, there's a lot of folks that listen to the show that are CHROs.

31:52There's a lot of HR leaders, but there's a lot of just CEOs, founders, and leaders in general, people that work. So what is your advice to folks that are grappling with how to move things forward in their company, how to operate better? And maybe if you're an individual contributor, how to get your leaders to see these things. What advice do you have? Yeah, I would always say, this sounds so simple, Jessica, but it is true. Like, start with the basics. Like, do not try to come up with this fluffy talent management strategy if you don't have the tactical pieces in order. Like, I like to take an example.

32:37Like, when we launched our Work From Anywhere program that is very successful, that is our hybrid work program. What did we do? Well, we solved for every single question that employees or managers may have around work for men. We had like a FAQ with 60 questions that we had answered in detail before we even talked about let's talk about the nice roll up. No, let's answer the question. Same with what I talked about here from the here to there. We have already talked about where we want to get to, like get your basics and the simple things in order. Then you can talk about big transformation or big strategies but the base go back to the basics like solve the basics don't avoid the oceans hold the basics that that's always where i would start yes that's such good advice because you can't you can't do big transformation if you know that yeah it's impossible okay well is there any other exciting things that you want to share before we get into career confessions i've shared so much So you're like in a very like.

33:42I know. I feel like I'm getting this like very special access. Yeah. No, no, but I'm genuinely excited about all the work that we have going on. Yeah. Just honored to be in this role at this point in time, not only at Spotify, but in the world. Yeah, I know. I know. And you're going to look back on this and be like, oh my God, I did that. You know, it's going to be so crazy. well they are incredibly lucky to have you and i'm lucky that we got to meet and became friends and so thank you for that and you know i'm here to help you anytime i really appreciate that because that's so you know that's the one thing i didn't do enough of when i was in your role i was so busy and so heads down i didn't reach out and um it can be it can be a lonely a lonely role yes Yeah.

34:38So I'm here for you. Okay. Will you do a career confession with me? Yes. Okay. I can't say no to that. Yeah, you can. I won't let you. Okay. So here's the context. It says, our HR team launches programs about inclusion and kindness, but on the ground, nothing really changes. The same clicks, the same voices dominate. How can I, as an individual employee, actually influence culture from the bottom up? What do you think? So this person is an individual contributor. Yes. And so they want to, they say that they roll out these things, but nothing ever changes. It's the same voices, same clicks. How do they influence from the bottom?

35:25This is where I would always advise to someone at our company, because we also built a very strong HR team and HR business partner team. this is where if you can't have the conversation or influence via your manager sounds like you may not be able to you need to talk to your HR partner yeah if you have one yeah if you have one that is like the one of the biggest advice I would always get and that's that if they are if they are there and if they're a trusted partner otherwise it's it's trickier to come about but you you would guess that there is also an outlet for providing feedback that is more yourself Yeah.