The importance of foresight for innovation, with SAP’s John Licata

Speaker 1: Business Schooled.

Speaker 2: Business Schooled.

Daryl Pereira: Hello everybody. Welcome to another edition of the Business Schooled podcast. My name is Daryl Pereira. I'm a branding content strategist here at IBM. Really fortunate today to be joined by John Licata from the SAP. He's got a very interesting title, let John introduce himself. We're going to have a really amazing discussion, I think, about what's going on in the AI space at the enterprise level. What does this mean for the future? Where's this going to take us? But before we get there, John, if I can turn it over to you and ask you to introduce yourself.

John Licata: Hey, Daryl, great to see you again. For the listeners, my name is John Licata. I'm Chief Innovation Foresight Strategist at SAP. My task really is to kind of look into what's next and help SAP and our customers, more importantly, become more future ready. So a lot of fun things to tackle along the way. And hopefully today we can shed some light on some nuggets maybe to take going forward.

Daryl Pereira: We're all trying to figure out what happens next and how we can go, whether it's us as individuals, how can we be most successful with the skills we have? If it's a company, how do you position yourself for success? But before we get into that full discussion, it's really interesting that you have this foresight title. How did that come to be and how do you bring that to life?

John Licata: I think it's a great question. I've been noticing increasingly more folks putting foresight in their LinkedIn profiles, which is great for the space in general, that people are enthusiastic. But Daryl, it's been over two decades of work that has enabled me to have the ability to learn different parts of the global businesses. Everything from coming from Wall Street in research and trading environments, strategic roles that I've had through the years in advisory and consulting practices, writing as a journalist at one point in my career for Dow Jones and really trying to bring it together in a way that kind of sheds light on what's the monetary impact, what's the policy impact. So it's not a one size fit all. It's not something you could learn in one sit down of a training, although I think it's really beneficial for people to look into how can they apply a more future forward lens on their current business model. And I think what's really helped me in my career is constantly to learn. And we live in a very interesting time where many folks are really excited and they should be about the role of generative AI. Look, there are so many different AI opportunities, Daryl, for our readers and listeners to absorb responsible AI, ethical AI. It's unbelievable to see synthetic data what we can do. And I've always been intrigued and I think maybe being curious has really helped me in my foresight role. I'm never one to just accept the status quo and for those who know me, that's the New Yorker in me I guess too. But I think that it's always kind of understanding how do you not just connect dots but draw new dots to kind of understand where can businesses go. And I think a lot of businesses today, they have marketing that says their technology or solution is future- ready, but that's really impossible. No company or solution can truly be future- ready. I think there's a discrepancy between future- ready and future- proof. I want to say that. So future- ready is definitely the right path, but you still have to constantly challenge yourself. It's not a one- time situation where you're doing a particular look ahead and helping your company become future- ready once. It's a continuous journey. And I can say that my enthusiasm for the way global markets work, I'm constantly reading. I'm always looking forward to looking into university studies, looking into what's coming from Wall Street analysts, but then also writing my own. And I think it's sort of that innate bridge to help... I think when we're thinking about foresight, it's not a guess. Definitely want to clarify that for those listening, it's really backed by maybe speaking with customers, getting their feedback, understanding what's their pain point and how can you maybe solve that with a new solution that doesn't exist today. And if you did, it's about balancing the thought leadership at a high level from a macro perspective, macroeconomics certainly very important for those interested in the space to really have a better grip on. I was an economics university major. I mean I'm very fascinated by data and it's sections of data, but I also think that people need to look into what the solutions that don't exist, do they solve a problem and do they solve a problem that does not yet exist that will become a problem. And I think Daryl, I think that's something interesting because we absolutely should be focusing on today's problem. But today's world is changing very, very quickly. In fact, the trajectory of the word longer- term innovation should be reevaluated. Many people think long- term innovation is 5, 7, 10 years away the horizon three. But thanks to the technology that we're actually discussing led by advances in many forms of AI including generative AI, we are really shortening the long- term horizon. And so businesses need to do more to look really the next two years is as the long- term if not sooner. And if you look at history, goods come to market is becoming faster and faster. And so I think the foresight role is one where it mixes research strategy and has an innate ability to absorb what's next. But I think people sometimes think, oh, maybe you're a futurist and I don't want to discount my friends who are futurists. I think that's fantastic for those that do that. What I think is really fun about the foresight role for me personally is the bridging of the thought leadership of where we're going with the action ability of what we could start to build now. And that's where in my role, where I get involved with prototyping, developing new use cases that could start to solve whether it's existing problems to make them maybe less problematic today or shine a light on there is problem. We're having so much more data, so much more unstructured data, and we're so busy looking at the role of 5G. For example, what about the role of six G? Where are we going with that? I mean I think we need to look at that. We hear a lot about the cloud, but what happens once we get there? What's past the cloud? Is it the fog? We have to start pushing boundaries. And I think we do innately focus a lot on structured data. I really firmly believe that our listeners need to focus more on what's the role of unstructured data and as part of the foresight function is how does the world look when it's more personalized? I think that's so important, the personalization of data and the systems, knowing how me, John and you, Daryl, operate on a day- to- day basis and not simply just providing you input based on queries, but also saying, John, you're going to be speaking with Daryl and these might be some good things to keep in mind. And Daryl traditionally has asked these sort of questions and it's more of your guide, but it's invisible. And I think that's one of the things I see. There's so many new artificial intelligence solutions. It's overwhelming right now for anybody to see what's the latest and greatest and the speed of the latest and greatest already becoming past tense is rather unprecedented. I've never seen this in almost three decades of my career. The speed of what we're seeing, new technology, just when you get the grips of one, you're being asked to look at another, which makes the foresight role more intriguing when you try to focus on the composability of future- like qualities with existing functionality so that they can be become more agile if they can be more composable. This is something that for me, I'm super excited at SAP where I get to work with my brilliant colleagues around the world and focus on, for example, the business technology platform, the BTP, where really focusing on how do we optimize our applications in the cloud. Again, that's hard. Most people have a lot of different tools in their tool belt today, but the unified platform is really interesting. So bringing the foresight into a place where I think it becomes simple for people to understand these complex topics but also do in a way that's beneficial to them. It doesn't cloud their day, not to use the term negatively, but it helps brighten up their day because they feel empowered. They're augmented. You're bringing out the best in people by unleashing the power of AI in the not too far distant future, the benefits of quantum computing, these are the things that from IBM and your colleagues that I've had the privilege of exploring more and more. And I think it's fascinating times for those interested in just trying to be curious but also put the curiosity to practice.

Daryl Pereira: I love that. Putting curiosity to practice on that side of it. There was a lot there, which is awesome. And it's obviously your wealth of experience shines through as you talk. Just to play this back to you, make sure this makes sense. For instance, I thought it's really interesting what you said in terms of part of the idea when you look at foresight is to look at what will be the future problems. Obviously there'll be certain things that will be you can't account for, but when you do see certain things, and it felt like as an interesting point there where you talked about personalization, it feels like, for instance, scalability has been a big problem in business or maybe a lot was focused around scaling business, especially when you look at the industrialized era. We went from a kind of craft- based society, clothes could be handcrafted or whatever, but then as soon as we had big mills that could produce medium, small, large versions of most clothes at a fraction at the time and cost, all of a sudden then it opened up a level of clothing to new people and that built a whole industry as an example. So the scalability in that side of it is happening and still continues in obviously many markets. But where then once you're scaling, the idea is that then how can you still offer that personalized service? And it feels like that's something, as an example, that's one area for instance, where as you're saying it can be as much as it is, like you say, looking at the latest technologies which will help you build solutions. It's very important to also look at the problems.

John Licata: We need to look at solutions that can be tangible, not just theoretical. When we look at AI and the opportunities, for example, in the operations field and having the opportunity to have better demand forecasting or maybe better resource allocation that benefits the supply chain. And I think what we've learned in recent years with COVID and having crippling instances where the Suez Canal was blocked, we need to figure out plan A, B, C and then some so that people get what they need when they need it. And I think even for if I worked in compliance, I might be able to have very good policy grasp that I know that certain things are more risky than others. There's new legislation coming out. But using the AI to help you in your moment know that whatever you're thinking about for strategically is maybe something... To consider something else. Finance, predictive analytics. I made this example recently. If you just paid attention financial models a year ago you probably missed the big upswing in cryptocurrencies because the models said they were too risky, there wouldn't be an ETF. But guess what? There was. And this is where I think the foresight role is interesting because there's an element of relying on systems to help humans make better decisions. Ultimately, I don't think AI should be making decisions on its own. I think we can't even trust a lot of the data that's out there yet. So how do we give the keys to the AI to make business led decisions at this moment in time? But I think that we have to get to a place where we trust in the data, but the data's going to help me do my job better. Maybe I'm going to have a better understanding of certain critical materials that maybe for example here in the United States, were flagged as shortfalls and maybe we need to look at alternative suggestions. But in the moment of making a business decision, it would be nice to know some of this stuff at the ready rather than spending hours, weeks looking into certain ideas to help me get through the day. Understanding the rapid change that AI is making across the globe right now and the regulation happening in Europe versus what's happening in the US is quite different. Can the AI help me make a decision that I feel confident, that my decision is stronger today because the AI helped me become more 360 degrees? Again, I don't believe that we should be relying on the AI to make the decisions. I believe we should still have a very big role in understanding what we should and should not be doing. But I think it's certainly be helpful to have more data- driven insights or scenario planning simulation of different ideas. And it could be an idea of moving into a new geographic area, maybe entering a new market or looking into the potential of new personas. I think in years gone by, we built personas of Jack and Jane, but they have to be evolved. Their interests change, their market tastes change. We inaudible to have AI help us understand their changing behaviors more real time so we can make real time decisions. SAP, IBM, we're both publicly traded companies. I'll bet our CFOs would love the ability at any point in time to say it's on a given date at a given time and our capital was X. Rather than having it on a quarter to quarter basis, a lot of studies and research need to be put into that. Having the information at your fingertips can change the way we work. And I think Daryl, it's all workflows that can ultimately be optimized. And I think this is where we become more intuitive by leveraging new AI solutions. But again, I think understanding the world is changing, sustainability is continuing to be at the forefront. How does the decisions I make that can be fueled by AI help me make better sustainable decisions? And also how can the technology of tomorrow that maybe some functionality can be seen today, how can it help all people? Not just certain demographics. There's a lot of people that have challenges with some disability of another that maybe can't put on a headset in a virtual setting. And so how are they going to benefit from these new solutions? Are there ways that we can help people who can't hear work better? Maybe that we can leverage the immersive computing to give sight to those in a different way who can't see? And so I'm intrigued because the problems that might be tomorrow's problems in some regards, they're older problems that have new problems to them. Again, people just using those who cannot see. Unfortunately there are many people that are affected by some sort of ocular disease or another, but now you introduced an immersive setting that they're not part of at all. How can they be a part of that? And that's where that curiosity for me is so important for big companies to work together with smaller startups, to find the right balance of capital infusion and technical prowess to develop solutions that I believe can maybe level the playing field, give people more of a fair chance. I know that we both have kids and there are times where I say, can my kids benefit from the things that I'm talking about? Their world is quite different than ours. So this is something where I feel like maybe the foresight in some shape or form can maybe help them do something better. And it doesn't mean just plugging in homework and making it grammar free, which is great obviously, but you're already starting to see the impacts of the stuff that we're discussing impact the younger generations and those are the future decision makers. So I think we have to figure out what we are doing to enable a future ready that becomes more consistent. That's the drive that I find compelling about my day to day.

Daryl Pereira: Can't help think even what you say in terms of something like if you're visually impaired and in the past that may preclude you from doing certain activities in a business environment. Which obviously the more that we can bring people that might be visually impaired into the workforce, it feels like there's a huge business imperative to all of this as well, for instance, because at the moment we're largely missing out from that diversity of thought that comes from that particular group of individuals because we don't have a clear way or a good way of getting those folks into the workforce. But what you're suggesting is that there's some of these bigger pieces, but also as we touching on sustainability and some of these areas, is there any kind of categorization of system, some of these are very big problems that if we solve could have significant impact on many people as well as potentially open up new business opportunities. And sometimes we might put it as passion versus profit, which maybe forcing the dichotomy. But is there ways in which you think about whether it's where the best gains can be made in terms of their different criteria, which you'll consider as you go through that thought process?

John Licata: Yeah, I mean I think there's another P, people. For me it's how do we put people first? If you put people first, businesses can be certainly successful. People, profit planet. I mean I definitely believe that there's an intersection there, but I think sometimes we forget that we're people and I think we have to get back to the leading with empathy. Something Julia White our CMO at SAP is definitely a big advocate of, and I think that we can't be in the role that we are in if we don't focus on trying to create solutions that people could benefit from. And real quick, we talked about visually impaired, what if you have sensory issues and now you have to wear a headset? There are plenty of people that are not okay with putting something on their head for hours at a time. And so these are the things that I think... Again, I go back to I am curious, but I want to help people. And I think that that's important if we start to put people first, and I'll say this because I often hear the expression of we need to put people at the center of technology. And I'm going to say that I believe that we need to put people on the right side of technology. If you put people in the center, then you're really focusing on a one size fit all approach to a problem. But if you deep into their creative abilities and their abilities to influence businesses, you're giving people the opportunity to both innovate and execute simultaneously. So therefore, instead of looking into the center, go to the right where it is more personalized and you're thriving or endorsing people's creativity, that's the new world that we live in, Daryl. We're unleashing so many amazing new solutions that were just like in awe of. But look how much we've grown since over a year ago when ChatGPT first came out and now we're looking into making movies and creating new experiences. In the not too distant future we're going to see the Academy Awards presented to someone with the best query that developed something remarkable. But I think that we have to figure out how we solve problems, but we anticipate where the problems are evolving. I mean, look, we're still trying to cure cancer. It's awful at this day and age when that's still such a significant issue. So this is not like we're going to take one swipe at this and win. It's a collective approach. It's customers, it's partners, and it's constant learning. And this is where I think the benefits of your show I think is so important because we have to learn. And this is where I think people should experiment very, very much with these new models that are coming out, this is the time to try things new and to see how your own day- to- day can be improved. Certain tools, maybe they're great, but maybe they're not for business, maybe others are. But there's only one way to find out is to experiment with new AI- led tools. SAP, we have learning in SAP where you can learn and get courses that are so interesting related to AI. I know IBM does as well. In the past, I've actually taken some myself from IBM, but I think this constant evolution of learning has to happen. And this is the time for people to not say, " My job's going to be replaced by AI." Try to understand how you could be augmented to AI, you could create new jobs, new roles that don't exist today. That's a difference. That's when people need to feel like, you know what? I have a lot more to contribute to society at large, and they should be looking to, again, try to use all the tools in their arsenal right now to make their own business and individual workflows much more of a positive experience than they are today.

Daryl Pereira: For sure. And I think like you say, we do have a training platform. And on the flip of that is especially just to drive home one point that you're making is that it's typically these tools in the hands of an individual. Basically you have a human, you have AI. AI on its own isn't that useful. Humans on their own can get your certain adventure. Where you put these two things together is where you tend to see the strength. And I know you've talked a little bit about some people might... There may be within the workforce even a certain anxiety about these technologies because we do have this fear of, oh, it's going to take away my value. But that's largely not what we're seeing. And I think of even reports... I can't remember, there was one early last week I think it said about half of business leaders, even though many of them haven't got to the point of widespread adoption of AI within their organization, they see the value of it and more than half see a skills gap. So this idea that there's a need for the people that can use these tools, and it feels like when it comes to using it spans the whole gamut, right? It's from every computer, science, math, PhDs, those folks that rarely can climb under the hoods and rework some of this tooling, but it goes all the way. I know even on this podcast, we've talked to folks that are pushing forward around things like prompt design, which I know you touched on, which in some ways could lean as much into liberal arts and critical theory as much as it does anything computer related. But what's your perspective or the idea of, especially as you're talking to a younger audience when you about things like skills in this space?

John Licata: I can't emphasize enough, there's so many opportunities to try new solutions that are out there and you have to find the one that you feel comfortable with. But you mentioned the word anxiety and it's high. It's so high right now because people feel overwhelmed. And I remember very well living through. com exploding and what that felt like. And if everything wasn't. com, the business didn't do well. But when a company announced. com, the stock shot up on Wall Street and I remember that vividly. And I feel like now all companies, all workers should be trying to figure out what works best for them to incorporate AI solutions into their business workflows. You've heard me mention the word curiosity, but I think we need to paint the picture of it's urgent because there's a level of up- skilling, Daryl, that has to happen. And sometimes you have to take your own career into your own hands. And whether you're studying in an MBA program, looking into a new certification to learn a different skillset, you have to keep pushing yourself because nevermind your own personal gain, the economy's demanding that. As long as I've been around, I'm constantly looking to improve my own skill set and update myself on new certifications that might be out there. And also certifications that might have cross pollination of what I'm doing right now. And by that is cybersecurity. Cybersecurity is something that I feel like is not getting enough conversation when we're talking about the future of AI, but we need to do more to have the data not just be trustworthy, but we need to guard and also make sure that humans don't make mistakes when certain information is bypassed and they're inside. So a lot of the errors that take place with systems today are actually because the majority are done by humans. And so whether you have ethical concerns about a human that put a bad data interpretation into a model that came out as racist, or you have a new solution as a third party solution that's integrated into your backyard and that also caused a back door entry and a system that might even happen a year or two from now. That's crazy that somebody could be laying still in these systems. We're starting to see even more and more threats to the energy grid. Certain ERPs just this week have mentioned that the systems have been corrupted by hackers. I think we have to look at what is the role of cybersecurity in the AI domain and how can we improve. And I think too, we live in such an interesting time. This is probably one of most pinnacle technological revolutions known to men and women, and we need to figure out how do we stay on top of this. And so of course you need to look into AI certifications, cybersecurity certifications, but again, you need to stay current because as I mentioned before, the field is changing so quickly. I do think that I would implore listeners out there to also really look into a specific domain of knowledge, say in a particular sector. Life sciences is very big. It's becoming even more critical than ever with an aging population. And I think that getting specialized in particular sector like energy, healthcare, life sciences, I think is important. But also then use the AI to help you get better and better so you can take your augmented self to your job day in and day out. In my career, and I came from commodities, I came from the energy space, I was fascinated by the role of energy and smart cities and electric vehicles. It was a ripple effect. So it wasn't like, oh, years ago in the early 2000s I was talking about the price of gold, which is now over 2000. So I should have kept my money there. But I think it's interesting to see that as you start to get more focused, you also get wider in a good way. Again, I came from the commodities, I was in energy, smart grid, electric vehicles, future batteries. There was a natural ripple effect. And I think that's where I think people can really upscale their careers is find the passion that drives you to get into a domain and then nail the domain and use AI as a tool to get better and better. And you'll be amazed at how your curiosity spreads like wildfire.

Daryl Pereira: What a great thought that yes, that idea that your own personal curiosity is one thing that you should continue to fight for, but then also to look at the degree to which tools like AI can also amplify that and help you find out how you can effectively scratch that itch and figure out where those real opportunities are, what you can learn as the next stage and how you can accelerate your learning. But no, it's a fascinating thought.

John Licata: I remember back in the day being so interested on using vanadium and lithium in batteries due to my commodity experience that I became more granular in the electric vehicle market. And I remember having the opportunity to be on an analyst call on Wall Street with Elon Musk, and then things just started really rippling through in my career, and I ended up working on Toyota's 2030 Mobility Project and was talking about flying cars. So you could see the curiosity on one level brought me to someplace I probably wouldn't have guessed I would've went from the get- go, but that foresight led to an amazing turn of events that I'm happy to look back and say, wow, that was pretty incredible ride.

Daryl Pereira: That idea of being curious but not just also be that, yeah, dogmatic about I need to get to this point, right? It's as much about where will this ride take me? Where will my passion take me?

John Licata: You have to tell a good story because it doesn't matter how much foresight you think you have, if you can't clearly express to someone else and inspire them with your findings, with your research- led strategic findings, then your foresight role will be short- lived. Having the ability to inspire someone to buy into your way of thinking for something that doesn't exist yet is incredibly difficult. I want to emphasize that it's incredibly difficult, Daryl, but that's one of the beauties of... That is when you see people say, " I didn't think of it like that," and maybe they don't end up implementing the consensus that you derived, but to see them think about, " But I might implement that in next quarter or I see how that could fit into my existing functionality." And that's what we're trying to do. You're making it more future- ready and constant in the same level which, again, I think that it's great to kind of see some of the look back and say, I remember when we talked about that. I remember when that was a deliverable. And here we are. It's a fun ride.

Daryl Pereira: For storytelling, obviously you can explain and you can pull your thoughts together into a great package and deliver it. Any tips that you would give to folks that maybe think, well, how do I get to be a better storyteller?

John Licata: I've had a passion for writing since I was young, but I think what separates a story from maybe one that might end up being a blog to one that might cause people to sit up and notice is don't be afraid to go off- script and make the comparisons that people understand. Sometimes we live in a world where the technological implications or functionality is so vast, is so deep, and you're working closely with developers and prototypers and data scientists. You need to explain what you see in a way that makes sense to the general public. And I think a good storyteller would be something that your story is something that you can tell the person next to you and there's a beautiful ripple effect that happens. Why? Because it was easy. And I think sometimes we are an extremely data- driven society, but we don't get past the fact that we're still people. So tell me how that data's going to help me. And if you can figure out a good story to tell me how that data that you uncovered is going to impact my day, then I'll listen to you. And I think that's a good story if you could tell people, not just end with, but wait, there's more. I think you have to figure out a way that, " But wait there is more if this can help you," and then tell them what it is. And I think that's where I think good storytellers separate themselves from the pack.

Daryl Pereira: Amazing. I really appreciate the fact you've given up your time for this discussion, especially where we've ended, I think has been a common thread throughout this for hearing from you, which definitely got me thinking this idea as well. We spent a lot of time talking about AI and future technology and innovation, but the idea that human is at the center of all of this, and that is you can sometimes lose sight. You can start salivating over the innovation or the prospect, so, oh my God, look at the feeds and speeds, or look at what I can process now. But it no means nothing if it's not in the service of us as humans and helping us either do better business or helping us still serving our purposes as we need as consumers. That's a huge part.

John Licata: I mean, I think that's maybe a great place to end is also when I had mentioned it's also humans moving to the right of technology and not just going to the one size fit all. We don't live in a one size fit all society anymore. Our solutions should also be more customizable, personalized and also more agile. And to me, that makes technology the right side for humans, not just the center.

Daryl Pereira: Great point to leave it on. All right, thank you. This has been John Licata from SAP. Appreciate John, your role there as both leading with foresight as well as the innovation strategy that you do there, SAP taking the time to share this today with audience. This has been the Business Schooled podcast. We try and cover those topics which you may not find in more business textbook. I think we definitely touched on one of those today with John talking about staying on the right side of technology in terms of and thinking about how we can personalize and make it more applicable to each of us as we have individual needs. But thank you, John. I appreciate you taking the time. Tune in for future episodes of Business Schooled. You'll find it on all popular streaming podcasts, platforms, wherever you listen, and we look forward to catching on the next episode. Thank you.