Ep . 41: Why Your AI Strategy Stalled with Greg Shove
About this episode:
Original Air Date: January 12, 2026Enterprise AI adoption is still stuck in the teens and the gap between the hype and the reality is getting harder to ignore. People are finding pockets of productivity, but they’re often keeping the gains to themselves, worried that “using AI well” is just speed-running their way into a layoff. Meanwhile, many leaders treat it like another piece of software without touching the messier truth: AI changes how work actually happens, and it doesn’t care about your org chart, your approval chains, or your performance theater.
In this episode, Rodney sits down with Section CEO Greg Shove to name what’s really blocking adoption and what it takes to break through. They talk about AI as “co-intelligence”, why most “AI layoffs” are PR cover, and the non-negotiables for real transformation. They also get into how to build a robust AI strategy for 2026, Section’s own AI disruption, and why the next era may be dominated by super companies built around small human teams and a fleet of agents.
Tools from The Ready:
Toolkit: The Ready’s AI Coffee Club
Mentioned in this episode:
Dual Transformation: AWWTR Ep. 43
Mary Barra at General Motors
In this episode:
Greg Shove
CEO, Section
Greg Shove is the CEO of Section, an AI workforce transformation company, and founder of Machine and Partners, an AI application lab. Prior to Section, he founded multiple companies with several exits, including SocialChorus (later FirstUp), which was acquired by Sumeru Equity Partners, and 2Market, which was acquired by AOL. He has also held leadership roles at Apple, AOL, and Sun Microsystems. He was named one of Edelman’s AI Creators to Know 2025.
Greg's WebsiteSection's Website
Rodney Evans
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Episode transcript:
Greg Shove:
When the bubble bursts, all the bozos will get cleared out, all those AI influencers who are in my LinkedIn feed every day, they're going to be gone. That'd be good for my LinkedIn feed at least. And the people who really give a shit about this and want to work at it, they're going to keep their heads down and just kind of plug away.
Rodney Evans:
Hey everybody. Welcome back to At Work With The Ready, a podcast about modernizing organizations as the future of work collides with the present. I'm Rodney Evans and today we gave Sam a break and I am joined instead by someone who I've been wanting to talk to for quite a while now, Greg Shove. Greg is a seven-time founder and CEO who is currently the CEO of Section, an AI workforce transformation company, helping orgs to get real value from their AI investments. He's helped train thousands of leaders and knowledge workers on how to actually use AI in their work and was very recently named one of Edelman's AI Creators to Know in 2025. Greg, welcome to the show.
Greg Shove:
Thank you, Rodney. Great to be here.
Rodney Evans:
So I am thrilled about this conversation because Greg is really operating at the exact intersection that we are always talking about on this show. And that is what the work design is that is necessary to adopt AI and thrive in the intelligence age. But first we're going to do a check-in question because we always do. My check-in question for today is, what's something happening in the AI hype cycle that drives you nuts right now?
Greg Shove:
The AI hype cycle. I mean, that's what drives me nuts. Listen, I get it. People need to raise money and to raise money, you have to tell a story about the future and how the future's going to be great. Here's what I really wish, I wish that AI CEOs from the major AI companies would stop saying we should slow down and really contemplate the impacts of what we're doing because they say it with such earnestness and they don't have any intention of slowing down. So I wish they would just stop saying it. Don't be insincere and just admit and tell everyone what you're doing, which is you're moving at the fastest pace possible regardless of the consequences because you think it's a war and you want to win. So just be straight up with us, we'll figure it out.
Rodney Evans:
Yeah, that's a great answer. My answer is somewhat related, which is so much of what I read and see, whether it's about agents or robots or workflows is about all of the things that human beings aren't going to have to do anymore. We're not going to clean toilets and we're not going to drive cars and we're not going to write greeting cards and we're not going to push code. And I rarely see anything about what we are going to do and what is going to be meaningful in this life as all of these pieces of our functionality are stripped away. And I would just, I don't know, I would find it inspiring and compelling to hear a little bit, just 10% of what that future might be.
Greg Shove:
Well, you don't like the version of that answer which is we're all going to be poets and then sitting on a beach and collecting our UBI check?
Rodney Evans:
You know what? I don't buy it, Greg. I don't buy it.
Greg Shove:
Shocker. Shocker. Yeah. Yeah, that's because the answer is no one knows-
Rodney Evans:
No one knows.
Greg Shove:
... so there's nothing to talk about because no one actually has any idea what's going to happen.
Rodney Evans:
That's fair.
Greg Shove:
Which is probably the honest answer.
Why enterprise AI adoption is stalling out
Rodney Evans:
That's fair. So I want to get right into our conversation talking about enterprise AI. The listeners of this show know the statistics around how AI adoption is performing and that the statistics are pretty grim. We see hovering around 10% of ROI on use cases that's expected. What's going on? Why is it so shit?
Greg Shove:
Sure. Well, a couple of things. First of all, consumers love AI. So let's be clear. When you talk about adoption, let's differentiate between consumer and corporate or enterprise, right?
Rodney Evans:
Yeah.
Greg Shove:
Consumers love AI. This is a revolution that is just getting started in some ways and is gaining momentum, I'd say, on the consumer side. And of course, Silicon Valley is based on an addiction business model.
And so Silicon Valley is making AI very addictive. So consumers, in addition to loving it, will likely become addicted to it. And we can see that, when-
Rodney Evans:
It's happening.
Greg Shove:
Yeah, when AI comes back and says things like, "Do you want me to do that?" Or, "Do you want me to make a PDF?" Or, "Create a spreadsheet?" Or, "Make the report?" I'm like, "Yeah, sure. Do that." And then, "Do you want me to do this?" "Yeah, do that." Just kind of pulling me into its little addictive claws, I guess, on the consumer side. On the enterprise side, it is shit. Adoption is not anywhere near what we thought it might be at this point. It seems to be around 10, 12, 13, 14% depending on the organization. I don't think this is rocket science, I think it's simple.
Two parts to the answer. The first is employees are getting the gain and they're not sharing it with employers. And so a lot of this data around there's no ROI, I think is bullshit. There's plenty of ROI. It's their early adopter employee that is getting that ROI because they're using AI in their work all the time, but they're not going to share that gain with their employer. And why should they? Because the second part of the answer is everyone else is worried about getting laid off.
And so we have deployed this like it's software. You know, what a mistake. This is not software. This is not ERP or CRM or marketing automation or... This is not software. This is co-intelligence. It doesn't behave like software, it's unreliable. It hallucinates, makes mistakes. It can be incredibly productive and insightful and it can be really stupid. It's sort of a genius and a clown at the same time, but it doesn't behave like software because software for most of us hasn't threatened our employment, hasn't threatened our livelihood.
So most companies deploy it like software and then they're shocked that no one's using it because they haven't really answered the question which you started with, which is what am I going to be doing after? If I be a good corporate citizen and use AI every day and find a way to get 6, 8, 10 hours of time back, maybe more, what's going to happen to me? Will I go on to more interesting work or will I get laid off? Or will my team shrink because now the team of 10, we don't need 10, we need six. So yeah, this is in a way not surprising. And we're going to have to bust through this anxiety and resistance if we're going to get adoption levels that are 60 to 70 to 80% in a typical large organization.
Rodney Evans:
Yeah. I mean, a lot of times in the work that we do, one of the things that I say to C-suite executives is when they're telling me about a frustration or a tension that they're feeling in their organization, I usually remind them that the people, the talent force is probably operating rationally based on the environment that they're in. And what you just described is very rational behavior.
Greg Shove:
Absolutely.
Rodney Evans:
Okay, so I've got 10 pocket hours. Where is the incentive to give them back? Why should I, A, and B, a lot of top performers, as you and I both know, are punished for their competence. So they have more workload, more roles, less balance than the slackers do. I am imagining somewhere in that population, those people are going like, "I'm going to take those hours and get a tiny slice of my life back and not immediately fill it.
Greg Shove:
Yeah, totally. Right, walk the dog, take a yoga class. I mean, listen, remote work gave us Friday afternoons back, bottom line. AI is giving us Friday mornings back. If you're one of those early adopters and you figure this out, how to use GPT at work, whether it's sanctioned or not, meaning if it's not sanctioned, again, those early adopters are using it anyway and getting those hours back. And to your point, what's the incentive to share that with my employer? Plus it just takes time. Even if the employee was willing to share that time, if you will, back with the employer, it takes time to redesign workflows, redesign teams, as you know, change the composition of the organization. That doesn't happen overnight. It's going to take years for those changes to happen and then therefore really see the impact of AI in the organization in terms of making it more productive, if in fact that happens.
So most of these AI layoffs that we hear about or read about, they're bullshit. There's no way in those organizations AI is that well integrated and changing the nature of work and the nature of teams such that they need to make those layoffs. That's not happening. That's just cover for CEOs that want to do something that's rational as well. Every CEO I talk to wants to grow their business at 25 to 30% of the year for the next five years and hold headcount flat and they brag about it. In board meetings, on the golf course, they brag about in public. You see these CEOs doing this in terms of their earnings calls and their all hands meetings. And I get it, that's rational. It drives your stock price up. And that's where 90% of your compensation is if you're an executive. We're going to have to find a way to get through this in the next 10 years.
How AI acts as a truth serum for the lies in your company
Rodney Evans:
The other thing that this sort of behavioral pattern brings up for me, in a lot of very large organizations, there is a level of institutionalized idiocy. We're saddled with organizational debt. We're all just walking through sludge all day because the bureaucracy is crippling. And as a result of that, I have a fair number of interactions with people who are sort of at the middle to upper strata of organizations who have let their muscles for strategic activities atrophy over the last 10 to 20 years. And as AI takes the more rote, easier, dopamine producing layer of work, those people don't know what the fuck to do. And so I feel like part of the resistance is like, do we all actually want that space opened up? Because there are people who I think are loathed to admit that they don't know what to do with it.
Greg Shove:
Oh, absolutely. No, we have a lot of people in the knowledge economy that make a good living passing information from one silo to the next, right? Or I call these the cut and paste jobs and the lookup jobs and the synthesizing jobs and the reporting up jobs. I think this is what AI is kind of revealing. There's a lot of knowledge work that is repetitive, kind of mind-nominally boring, but quite lucrative if you can get the job, especially in a big tech company or just a big company in general where you get decent health benefits and other perks. So yeah, why not stay in that job for as long as you can? And what would I do with that extra time? I think that's right.
Listen, AI is truth serum for organizations and AI reveals a lot. When you come to apply AI to an organization, you'll see the lack of growth mindset. You'll see the lack of organizational coherence. You'll see a lot of busy work. You'll see the undocumented workflows. You'll see a lot of people working, but not in any synchronized way. So when you go and try to automate that with AI it doesn't work because you've kind of slapping AI on already a broken workflow that has too many people who are unclear exactly what they're doing. This is why the worst run organizations will just be worse with AI. It's not going to help them. And the best run-
Rodney Evans:
They'll just be bad but faster?
Greg Shove:
Yeah, exactly. They'll just be bad and wasting more money now on the AI as well. And the best run companies I think get this strategic advantage if they can figure it out and deploy it successfully. So my model's going to be as an investor, invest in the best companies in the category, if you think they're committed to transforming to become an AI first or AI enabled organization, they're probably going to create more distance from their competitors because they're already well run and they'll have a much easier job of applying the AI into their product services and into their internal organizations. And for the rest of them, they're going to fumble around just more.
What it actually takes to make AI work in your organization
Rodney Evans:
Yeah, absolutely. What do you think actually moves an organization from those disconnected efforts to something that looks like large scale transformation? What are the non-negotiable ingredients for enterprises to shift?
Greg Shove:
It's a long list, so let's try and make a short list.
Rodney Evans:
Cool.
Greg Shove:
The first is the why of AI and AI manifesto. Why are we doing this and how will we do it? And I don't mean a governance policy. I mean, all governance does or AI policies do is actually suppress usage. So you want the purpose. Why are we doing this? And in what way will we do it? What's the culture around our AI? Are we going to celebrate it? Are we going to share our wins and losses? Are we going to consider it not cheating, but actually working smart to be using AI? So I think one non-negotiable is you need a why of AI with an AI manifesto. You need to be public about it. And so to publish it to customers, to investors, and obviously to employees first.
The next thing you need is give your employees good AI and pay for it and give it to everyone. I'm blown away by AI leaders who want to give AI only to some part of the organization, like the best AI to some people and not to others. It makes no sense. Everybody needs to get a great AI. And great AI means the latest version of whatever enterprise AI that you want to buy for your internal ecosystem. So give everyone a great AI.
Third is constant coaching or training. This idea that you're going to do an AI week or a "lunch and learn" or like a bunch of workshops and be done and employees will figure out how to use these tools...Again, very naive. It feels like that's what you would've done 10 years ago when you deployed your new ERP. This is not software, these technologies are really exciting and terrifying at the same time, and their capabilities are changing all the time. So you are going to have to constantly coach and help people figure out how to use these tools.
Finally, you have to help them find their use cases. It's not enough to learn how to prompt. You need to get people faster to value. And that means in your specific job, in your specific division and role and country, what are the use cases that are going to give you some value as an individual employee and get to that knowledge and that applicability much faster. It's taking way too long. Even after you've trained employees like how to prompt, you've got to get them faster to their use case.
Finally, it's what you said again at the top of the podcast, what's going to have to come next after that is help them ... And by the way, AI can help us do this. What will employees do with this new time? It's one thing to save them a bunch of time. That's great. But as a manager, as a leader in particular, your job, and I see very few leaders doing this and managers doing this, is your job is to come up with the next set of work and tasks that are interesting and valuable to basically get your team engaged in that work. What's going to come next is there's got to be new work that is interesting and higher value. And the manager has to come up with that. I think that we've got to also fill in these gaps a year from now, which is, okay, we've got 10 hours a week back, what is more interesting and strategically valuable work you can do for the organization and for yourself? So those to me are some of the non-negotiables.
Rodney Evans:
Well, and your last point to me is such an interesting one because one of the top three presenting problems that leadership teams come to us with is an inability to prioritize. They can't actually get after more strategic initiatives with the current resources that they have, for the most part, and this theoretically is a way to create enough slack to get after the things in the "maybe someday" column. And yet, to your point, I don't hear that narrative very much, which is like, "This is what 2026 looks like and if we can find 15% of slack, here's what the dual transformation play is that we would love to be able to get after, let's start dreaming about that now because almost certainly we'll have capacity to do it later." I just don't hear that logic much.
Greg Shove:
Yeah, but isn't that because of what you just said earlier around there's been that atrophying of those strategic skills and analysis? Because that to me sounds like strategy, right?
Rodney Evans:
For sure.
Greg Shove:
And I think most of us have our heads down executing what's in front of us. And we like the reliability of that. We like the predictability of that. We can manage our time because we know what that kind of work is versus the strategic work. It's tougher that kind of work. It's more uncertain. It asks more questions than it answers. Most people want answers, not questions. So yeah, I think that's right.
This is why startups can apply these kinds of technologies so much easier and so much faster. One of them is they're just small companies, they're small organizations, so the change management challenge is not as great as obviously in a larger organization. And I think the second is every day is a strategic challenge in a startup. And so you're always asking these kinds of questions and you're always saying, "Well, if I had an extra hour, I'd probably do that, because I've got this list of burning to do things because I'm a startup fighting for relevance and survival. I'm not usually short of important shit to do. And if I free up time, I can go to that list and get on with it."
Whereas in big companies, that imperative or that level of intensity has just been dissipated over the years and over the size of the organization and over the amount of resources the organization has and they lack that edge, that sharpness around, how would we use our time if we got some of it back? How would we expand margins? I think we only should walk around with like five questions and just all of us keep those questions top of mind when we work. Growth, margin, organizational health, whatever's relevant to you, it may not be five, it might be only two or three, but I think those are the questions we always should be asking ourselves at any moment. And they're more strategic questions, they're about value creation.
Rodney Evans:
Yeah. It's interesting to your point about startups also, because in that space, when teams are still looking for PMF and they're still really resource constrained, there's also just like not the same preciousness about, "Oh, is this technology going to fill in this form for me? Then what am I going to do on Tuesday morning, which is form filling time?" Whereas I think in a lot of large organizations, one of the things that I find really challenging is in very large organizations, you have a lot of people that are insulated from the market and the customer, and frankly, the financials by hierarchy. And they're just like, "I don't really know how the money goes here. I don't really know how it goes from the street through the org chart into my bank account. And frankly, I don't really care." And in a startup, you just don't have that luxury.
Greg Shove:
Mm-hmm.
Rodney Evans:
Everybody has to be paying pretty close attention to the value creation.
Greg Shove:
That's right, everybody in the startup knows the levers of the business. You're right, and in large companies, most people can't explain those levers, financial or operational. They don't see that big enough picture and/or they don't care to. And again, they want to get their job done.
How startups and large enterprises balance AI risk different
Greg Shove:
Also, startups don't care about the risks with AI. There's all kinds of risks with AI, including just tactical risk like hallucinations, getting a wrong answer. The reality is the gain outweighs the risk. And if you're in a large organization, everything's about risk management. We want to manage away risk so that we're not at personal risk in terms of our employment. And of course, we don't want to put the organization at risk. That's why Google didn't launch Gemini or it didn't basically launch an LLM. They sat on it because of the risk. They sat on the technology, which they developed because all they could see was risk. They couldn't see any upside.
Rodney Evans:
It's so interesting.
Greg Shove:
It took OpenAI and ChatGPT and a billion users to really awaken them from their slumber and it seems like they've responded, right? Gemini 3.0 looks legit and the numbers in terms of user numbers are starting to be impressive. I think next year, this is Google's year next year. I think Sundar looks like a genius by the end of next year and they'll have a billion active AI users. They were asleep at the wheel and now they've woken up.
Rodney Evans:
Interesting, interesting. I want to go back to what you said about risk and large companies being focused on risk mitigation or risk elimination because I see the way in which large companies value a lot of things that AI doesn't give a shit about. And one of those things is it's not actually risk mitigation, it's the performance of risk mitigation. It's the overwrought compliance. It's the 10 ton governance model that doesn't make any fucking sense to get anything done. It's all of the rules-based culture. And our business for the last 10 years has been really trying to get at ways of working, but we've always coached orgs to do that through the lens of experimentation.
And large organizations do not like experimentation. They don't like that word. They think it means chaos. They feel like it means mess and vulnerability and looking bad and blah, blah, blah, blah. When I think about the risk thing, when I think about the experimentation thing, when I think about silos, I'm just like, these are things that AI is not going to honor. It is not going to honor your stupid org chart that nobody looks at or the 82 approval chain process that makes no sense for shipping an update to your customer. And so I'm just curious, obviously you're talking to a lot of leaders specifically about their vision for AI. How are they talking about how they're going to change their companies? Because this stuff is in the DNA of these organizations.
Greg Shove:
Yeah, I don't think most of them have any clue about what's about to happen, and I don't think they think yet about it as changing the organization or ... I think they think about this as a productivity software, and therefore they really think about this as a path to hold headcount flat or reduce headcount in order to grow and grow earnings at the same time. I think only a few are really contemplating the amount of change that might need to happen for the organization to leverage these technologies. They don't really understand the technologies in terms of how powerful they are, how to your point... AI has no boundaries.
Rodney Evans:
Right.
Greg Shove:
None. It crosses everything, crosses countries, crosses language, crosses time, crosses function and capabilities and so on. I don't think most executives realize this really and what it really means for their organization. Again, we're just getting started here. And I think what will have to happen is more bankruptcies and/or companies that are really impaired because they did not respond or mitigate the risk from AI. We've seen a few, everyone talks about Chegg, but we need to see, frankly, more of them to wake up management teams and make them realize that there's going to be real risk here unless you really appreciate these capabilities and integrate them into your products and services and into the way you work. But at the end of the day, we're motivated by compensation a lot of the time and startups see gain and as yet incumbents aren't seeing much downside, not yet.
Incumbents, existing firms, legacy firms will see less of a gain likely because they can't move to that gain that quickly, they're going to have to see more risk. What woke up Google was risk from OpenAI and ChatGPT to their monopoly on search, and then all of a sudden everything got to be mobilized and Google started to make progress with Gemini. That has to happen in other industries and I think management teams need a wake-up call. And it's going to be a competitor going bankrupt or a competitor reporting two, three, four, five quarters of trending down revenue. If you're in the media business, if you're in the agency and creative services business, if you're in the entertainment business, we're going to start to see some of these impacts on these businesses, real impacts on their revenue and bottom line. When that happens, I think management teams start to take things a little more seriously. Until then, I don't know. I'm not so confident.
Why “Head of AI” roles are an uphill battle
Greg Shove:
Which makes it hard, by the way, as you know, I'm sure these are some of your clients, makes it hard to be the AI evangelist inside a large organization.
Rodney Evans:
Absolutely.
Greg Shove:
If you're not getting the resources, if you're not getting the traction with the management team, if you're getting lip service, you might have actually the most buy-in from the CEO who's like, "Hey, let's do this." And everybody else is like, "I don't know." So yeah, I have a lot of empathy right now for heads of AI, whether it's actually their job title or they're the ones that volunteered to do it as a side hustle even inside the organization because they're probably not getting a lot of love and it's hard work. It's a real slog.
Rodney Evans:
Yeah. Yeah. I mean, a lot of the behavior I observe, it is often the CEO who's sending the articles, bringing AI up in meetings, posing provocative questions, and then it's kind of like, "Anyway, back to business." It's not...the work to be done, which is significant design work and also education and also experimentation. It doesn't live in the strategy and it doesn't live in the operating rhythm and it doesn't live in anybody's role except for the poor head of AI transformation who's basically screwed. And it's just not sort of in the fabric of companies yet.
Greg Shove:
No, and I think that it won't be for a while. And again, there needs to be some really significant motivation or catalyzing moment where the organization has to agree to start to do this kind of work. And I think that usually comes from economic risk outside, meaning a competitor or a customer says, "No, we're no longer going to be a customer because we can do this without you and we can do it with AI." I call this jumping capability boundaries.
What I love about AI for individuals is it makes individuals sort of more enabled to jump those capability boundaries. That if you're not a financial analyst, you can kind of be a decent financial analyst with AI or you can do a little bit of your own coding now and so on. So I think this idea of jumping capability boundaries is good for people. It's going to be tough for organizations because customers and suppliers will begin to jump those capability boundaries with AI and potentially become your competitors or just stop being customers. So again, I think we're going to need to see more of that or organizations are going to need to see more of that to get them the kind of motivation they need to do this work because it is hard work and it won't be accomplished by buying more AI.
Because it's the easiest thing to do If you're a CEO and says, "I want to be all in on AI," what's the first thing you do? You just go buy a bunch of AI. And that's easy because there's a ton of great AI out there, a lot of great applications and all kinds of startups and vendors. And for your CTO or whoever's buying the software, it's easy. Cancel some old SaaS contracts because no one's using them anyway. We're overpaying for all this software. So cancel a few SaaS contracts and then go buy some AI. So we routinely work with organizations that have three to seven to nine different AIs they've bought and deployed, deployed in air quotation, to the org, no one's using any of it.
Rodney Evans:
Well, it feels like you can say you did something-
Greg Shove:
Yeah, you did something-
Rodney Evans:
... if you have a receipt.
Greg Shove:
Yeah, and you're spending money, exactly. Hey-
Rodney Evans:
Right, you're investing in something.
Greg Shove:
You're investing. Absolutely. And then you do a couple trainings and then you do an AI week or whatever or lunch and learn. No, listen, a few. The good news is there are some companies that are getting way past that and they're getting into the 60, 70, 80% adoption, weekly active usage, companies like Moderna or Zapier or Box, but it takes that level of commitment and investment that we're talking about, I think to make that happen.
First principles of an AI-first organization
Rodney Evans:
Yeah. One of the things that you said before, which I hear a lot, is that the point that a lot of executives are steering toward has something to do with productivity and that that is sort of like the first principle behind the AI transformation work is increase in productivity. I think that's not a good first principle. And I'm curious if you're king of whatever large, large organization and you're like, "Hey, my first principle around becoming an AI-led organization is X." What is it?
Greg Shove:
It's cut and create. That's what I would do. So I-
Rodney Evans:
Cut and create.
Greg Shove:
Yeah, I share somewhat your point of view, I think, which is I think this is an efficiency and a growth play or strategy. I mean, we know that-
Rodney Evans:
Yep, 100%.
Greg Shove:
... certainly customer service and there's some obvious areas where that's already happening. But I think we should think about it as cut what you don't need to do anymore in order to free up the bandwidth that we talked about and the resources and the capital in order to create. And with create, I mean, that's the fun part, right? Let's create new products and services. Let's create new business models and then eventually hopefully we'll be creating new jobs and new revenue for the organization.
So I think you should do both. You can do them in parallel or in a serial way. I think if you're going to start with cut, do it fast. All the anxiety in AI is in that first phase, the cut phase, what we just talked about. That's where employees, "I'm not sure," understandably, right? So I think we've got to get through that cut phase as fast as you can and get to the fun part. And the fun part's create, which is how do you reinvent your products and services and your business model? And the business model part's really important. I think a lot of incumbents think about making new or improving their products and services with AI, they absolutely should be doing that, but be careful if you don't also focus on your business model.
Because I think the AI native startups, they will do both. They'll make a better product and service. They might make a better business model. And once the customer sees a better business model, they love it. They're not going to go back. And so I do think a lot of disruption is not necessarily because of product disruption in terms of someone having a better mousetrap, it's the better mousetrap combined with a better business model for the customer.
Disruptive your business model with AI and dual transformation
Rodney Evans:
That's cool. It brings up something else that I wanted to ask you about. I'm a big fan of this book called Dual Transformation. Do you know this book?
Greg Shove:
I don't know it, so say more.
Rodney Evans:
Okay, it's good. The crux of it is this. Essentially, in order to do real transformation effectively, one has to do the transformation in their core business at the same time as they build the new business alongside even understanding that the new business may ultimately cannibalize the core business. And my sense is that's going to happen a lot with AI. Even as we automate and find efficiency and do things better and reduce headcount and provide a more seamless customer experience in our core business, as we build alongside, we are going to lose some of that core business. And the point of dual transformation is plan for that and move into the new house over here when the paint's dry, rather than trying to keep this thing working. First of all, I'm curious just your take on that. And second of all, I have in my show notes from Jack that you guys have done this at Section.
Greg Shove:
We have, yes. First of all, dual transformation sounds absolutely right. That is the strategy, I think, to survive and/or thrive in these moments, which is, yeah, you need the core business. I mean, that's providing the cash and the revenue and all the people. So you need that and you want to make it more efficient and optimize it as you said. And at the same time, can you do the Skunk Works or can you start the startup inside the big company to get ready to disrupt yourself? Most people don't want to do that though, Rodney.
I mean, it's the right strategy. I just don't see it happen very often, very effectively. I'm not sure why. My guess is it's a combination of factors, including you're not that serious about the startup within the big company, you are for the first year or two, but probably not in terms of the long term. You may not really give it all that it needs. You may not be able to get the people. I think so much of creating a startup is about that founding team and that getting the right people to build whatever it is you want to build that's going to disrupt what you already have. I think it's hard to get those people unless it's a real startup with real economic upside. The crazy people that want to do that kind of disruption and that work, that amount of effort over typically three to seven years at least to build something that's going to be truly disruptive to others. They need to see significant economic upside and the corporate parent doesn't want to provide that much upside. And I think quite frankly-
Rodney Evans:
No, it's way out of whack with the rest of their incentives.
Greg Shove:
It's way out of whack with incentives and their risk and you got to tell Wall Street about it. And this is Mary Barra at General Motors, you got to give her credit. She funded, bought Cruise and then funded it and then realized it was just dog shit that didn't work. But the good news is she's kept her job. Some boards would have fired her by now, but she's a really effective CEO and she's been able to withstand that failure. But that's a good example. I mean, that's not for the faint of heart. Most of my friends, if they're my age or the friends of mine that are my age, because I'm old, are like, "I don't want to deal with this shit. I'm going to head to the golf... This AI stuff, this dual transformation," it's like, "Fuck that. I'm just going to go golf."
Rodney Evans:
I'm on the back nine. I'm not doing it.
Greg Shove:
"I'm the back nine, I'm not doing it. I'll let the Gen Z figure this out, whoever the hell it is, whatever that generation is." That sounds like the right strategy. It's really hard to do. I think what usually happens is they buy. They don't really self-disrupt. They wait till it's too late and overpay and buy it and try to bring it in. I don't think the track record for that's very good either.
Rodney Evans:
No, and then they ruin the companies they buy.
Greg Shove:
Yeah, totally. And they don't really turn the corner or sort of make the transformation happen. And we'll see this when the bubble burst. This is going to be air cover for a lot of executives, CEOs and so on to say, "Well, I told you so. It's not that....this AI thing, it was all hyped up and we don't need to focus on it as much. We don't need to invest as much. We can just kind of put that stuff a little bit on the back burner now." We're absolutely going to see that next year.
And the reality is it's going to burst for investors, but the AI's bubble was not bursting in terms of these capabilities, and the people who are serious about will just double down. When the bubble bursts, all the bozos will get cleared out. All those AI influencers who are in my LinkedIn feed every day, they're going to be gone. That'd be good for my LinkedIn feed at least. And the people who really give a shit about this and want to work at it, they're going to keep their heads down and just kind of plug away and emerge with a great startup or maybe transform their own organization. That's what Jeff Bezos did when the dotcom e-commerce bubble burst, right? I mean, people don't remember, his stock dropped 95%. Wall Street Journal called him Amazon.bomb. He was ridiculed. And they had to lay off people and kind of hunker down.
And then they just kept investing. And Nordstrom.com and Walmart.com, all those guys used it as an excuse to basically deprioritize online shopping and e-commerce and Amazon used it really as a way to build market share for 10 years. And so the same thing's going to happen here when this AI bubble bursts, which it surely will in the next year or 18 months.
How Greg Shove and Section disrupted their business with AI
Rodney Evans:
So tell me about Section disrupting itself.
Greg Shove:
Well, two parts of the story. We had to pivot first and then disrupt ourselves a second. So we-
Rodney Evans:
I don't know the pivot part, I don't think. I only know the disruption part.
Greg Shove:
Yeah, we were in online business school, so we basically taught strategy to executives online. That was a good business. And then it was only an okay business. And then I played with ChatGPT+ on February the 1st, 2023 and I realized, well, this was the new accelerant, both for people and for companies, it would be AI, not better strategy. I mean, clearly it's both, but AI just struck me as a better bet. So I kind of pivoted the whole business that day.
Rodney Evans:
Dang.
Greg Shove:
Yeah, like any other leader, it's hard to do a pivot because everybody was like, "What? And I got a day job. I'm busy and how's this going to impact? And will you lay me off?" It took a year, and we were a very small organization, under 30 employees. So that was the pivot.
The self disruption is we've built an AI coach. So the business has been to use workshops, both online and in person, strategy sessions, hackathons, all those manual, effective but manual techniques to kind of make the change happen for our clients, for our enterprise clients, now we're doing all of that inside of intelligence software. It's called Prof.AI. It's software, it's AI software, it's an application. And this is going to be the way we get our organizations trained, constantly trained and retrained, help them find their use cases, help them find what to do with their new time. What's the more strategic work they can do? All that's going to be coached through an AI assistant called Prof.AI. And we just launched it in April. We have maybe 125 enterprise customers now, it's growing like crazy. It was the right move, but we were giving up good, high margin revenue and replacing it with less. So yeah, scary moment, but fun.
Rodney Evans:
But fun.
Greg Shove:
And if I don't disrupt ourselves, then someone else will and then we'll be dead and that's worse.
Rodney Evans:
Yeah. And yet, as you know, that's not a stance that especially executives of publicly traded companies often take.
Greg Shove:
Yeah, because they're stewards of much bigger assets and they are paid to, if it's publicly traded, manage the stock price.
What leadership looks like in an AI future
Rodney Evans:
Yep, absolutely. You used a word that we use a lot here. So we talk a lot about the industrial age and the assembly line forging the role of manager for the first time in the discipline of management science, and then the information age and the GE paradigm, forging the role of leader and rockstar executive leadership status being the new hotness of the '80s and early '90s. And we talk about this age, the intelligence age, as requiring a shift from leadership to stewardship. And the way that we conceive of stewardship is actually thinking of an organization as a living complex system and one's role in it being to steward its survival, steward its adaptation no different than stewarding a family trust or a land conservancy, it's not about owning it and trying to control it. It's about shaping it and trying to keep it alive, essentially. And I've heard you say the steward word a couple of times too. I'm curious... First of all, I'm curious just if that lands with you or if you think I'm full of shit. And second of all, I'm curious what posture you'd like to see leaders taking now.
Greg Shove:
So I don't think you're full of shit, or only partially. Listen, I think it's both, Rodney. I think we want to steward and there'll be moments of leadership required with deep conviction. Maybe there's no data, so a lot of intuition, a lot of judgment. The stewardship doesn't 100% land with me. It lands in part, but I would say it's that combined with old-fashioned leadership, like kick ass, take some names, make some tough calls and get the organization or team pointed in the right direction in the absence of data, as I said, in the absence of consensus even. I think there are moments where I want leaders to step up more and really advocate for a point of view or a decision and own it and really take that risk both reputationally and professionally, because that's what those kinds of decisions are. And when we try to manage out that risk to ourselves, I think we manage out the upside of that decision.
Rodney Evans:
Yeah, I agree with you. We often say consensus is a race to the bottom. And I think one of the things that neither of us hit on, but I think is in both of our desires around this posture is, I want to see leaders, stewards, in relationship with the broader environment. I want to see the leaders of companies paying a lot of attention to what is going on out there and to what is coming and to have more of an interdisciplinary approach to leadership that's not just like, "Well, what am I doing and what is my competitor doing and what did we promise to Wall Street this quarter?" But, "What is happening out there?" And I don't see a lot of airtime given to that sort of future casting and external orientation. I see a lot of airtime to today's crisis and firefighting.
Greg Shove:
Yeah, no, I love that, Rodney, and I think you're right, especially in this moment, in this age of AI, because there's so much externalities or impact, AI is just going to shake so much stuff up in so many good and not good ways in intended and unintended ways. And I would agree with you. We want leaders who are at least trying to wrap their head around some of this stuff. First of all, for their own organization, I'm stunned about how many leaders don't have an answer when employees ask them, "Well, what will be the impact on jobs at my company?" That's a basic question. If you're going to be all in on AI, you should have an answer about that, what's the impact on the organization and why are we doing this, and so on.
And then you need to get outside of that, to your point, think about AI in our schools, AI in terms of the health of our society. It drives me crazy that people want to buy AI from Meta or xAI. These are unsafe AIs. I mean, we won't pay for any AI from those companies for our own employees' use. And certainly when I'm asked, I advise every CEO, "You should not be buying that AI. You should not be paying for it." Have an opinion about AI safety. Have an opinion about how do we align AIs to our benefit, to humanity. And you do have a couple ways to influence that, one way is with your wallet, pay for responsible AI and deploy responsible AI. And that to me is AI from a company that's like OpenAI, Anthropic, Google, Microsoft, not some of these others. So yeah, have a point of view on that. What is your expectation of the AI company that you're buying your AI from around their safety and alignment investment to make good AIs? So few ex executives even think about it. It's crazy.
Rodney Evans:
Totally agree. And I think that one of the things that I've heard a couple of very famous investors say that I'm like, "I don't like a lot of what you guys say, but I like it when you say this," is systems thinking is the skill for leaders to learn. And as someone who does that professionally, it's not a discipline that is well hewn out there in general. But I think to your point, that is what allows you to know the levers of your business, as you said, understand the levers in the larger environment, have a real practice of first principles thinking, know how to develop a rubric for what safe AI is, what values aligned AI is, know how to charter AI's role in a team or an organization and determine what authority to give it. This is like basic systems thinking shit that is not really part of the conversation of most teams.
Greg Shove:
Yeah, that's because we're, I think in part Rodney, we're at peak capitalism right now. And your frustration that leaders aren't thinking about some of these bigger challenges, issues, or the bigger picture and really are heads down focused on either the next crisis or the next quarter or frankly the next earnings call, it's because we're at peak capitalism. We have one CEO, Elon Musk, where the board has approved a potential trillion dollar pay package. I mean, that is peak capitalism. We have CEOs who routinely boast about shrinking the size of their organization in order to drive earnings, boasting about it. I get it, you have to do that in terms of becoming a more efficient organization, that's the cut part. But also, why aren't you boasting about new products and services? Why aren't you boasting about new jobs created, new value being generated by your organization for the communities in which you do business and so on, but right now we have CEOs mostly boasting about layoffs. So I think we're at peak capitalism and I think that something's going to break and change.
What AI means for the future of companies and careers
Rodney Evans:
That was going to be my next question. I heard someone on a stage the other day also say, "Knowledge work is at peak inefficiency," and now you, Greg, are saying we are a peak capitalism. Those things don't feel like a recipe for human flourishing. How do you think this goes? I think most of us have the felt sense that what is happening right now is not sustainable. What do you think breaks us out of this moment? Is it a recession? Like what is it?
Greg Shove:
Yeah, I don't know. I think it's probably some combination of Gen Z resistance, anger, anxiety, resistance. Their early career prospects seem to be diminishing. The data is still, I'd say unclear, but we seeing to be getting some data. There's recent studies out of Stanford in terms of early career jobs, particularly in software engineering and customer service where early career prospects were reduced by AI, so we'll see. If they're the canaries in the coal mine, then I think really that's the generation that's going to suffer the most and I think we'll hear from them first. So I think it's a mix of the current system straining under the fact that it's become so bifurcated, so extreme in terms of some are doing so well and some are just struggling to make ends meet, even in the knowledge economy.
And I think also, and maybe the same generation, finding different ways to make a living, realizing that that path is not going to work for them. I'm optimistic but pragmatic about it that maybe we'll end up creating a lot of new and different jobs, maybe solo entrepreneurs, that kind of work, maybe an explosion of entrepreneurship inside the knowledge economy in terms of small team companies that can generate a good living for the people that work there. That's what I'm hoping. I think large organizations are shrinking and I think that's just obvious and inevitable. I think we are moving to an economy where there'll be super companies and those are not-
Rodney Evans:
Great. Tell me about that.
Greg Shove:
Yeah, I think super companies are ones that are different on the inside. They're smaller. They have super leaders, they have super employees and they have a whole bunch of agents and a giant cable going out the back to a bunch of AI. And I think CEOs want super companies. I think Wall Street's going to reward super companies with outsized valuations. They're going to be very efficient. They're going to likely grow faster than others and using less people. So I think we are entering this next era of capitalism, which is super companies. And I think they'll be in every industry. We'll have super law firms that just behave and operate differently than traditional law firms. They'll be more profitable. They'll likely be leaner. They'll likely serve their customers better in terms of what customers actually want and how they pay for it. So I think in almost every industry, we're going to have super companies. And of course tech will have a lot of them.
It's going to be great if you work in a super company, but so few of us can because there's only so many of them. So we're going to have to figure out what to do and I think that's going to be not working for anyone or working for ourselves in some way, that's what I'm optimistic about. I'm not sure how it looks yet, but I feel like that's what could happen here in a good way.
What role companies play in an AI-driven society
Rodney Evans:
That's really cool. My last question for you was going to be what you think the future of organizations is and you answered it really well. I'll just add to the soup a couple of things that I don't think are new and I don't think are AI related, and then I'll ask you what you think about that. So the gig economy has been so prolific that something like 45% of Americans have some kind of side hustle and this idea of a portfolio career, a lot of this is just in the last 10 to 15 years that this has become a thing. At the same time, as to your point, the lowest paid employees who are still full-time W2 employees in companies cannot make a living and support themselves on a full-time salary. So it's born of necessity and also a lot of the availability of this gig work.
I also think that the membranes around organizations must become necessarily more porous. The idea of like, "I'm an employee and you're a contractor and he's a vendor and that's an agent." I'm like, "Who fucking cares?" What does it take to get a piece of meaningful work done? I feel like that's been true and also large organizations have really resisted the idea of more of a open talent marketplace in order to achieve important things. So if we take all of that together and we take also the idea of super companies, I guess what do you think the role is for companies to play in society in the next five years as some of these truths become self-evident?
Greg Shove:
Such a great question. It's almost too big a question. I don't have a good answer here, Rodney. I'll tell you what I consider my role as CEO of Section and what our company's all about. Create a great product and service that customers want to pay for and do that with good margin and offer good employment to those that we can and generate return for our investors. Do that in a ethical, authentic and fair way, try to enjoy doing it while we're doing it, withstand the competitive pressures and all the stress that come with that. I don't know if that's changed from 30 years ago when I started my first company. It feels like it's the same thing that I've tried to do at every startup and just do it in a way that when we look back on it, we're proud of it.
Rodney Evans:
You know what your answer makes me think of? And it goes back to the very first part of this conversation is, as more and more work does not require human effort or capacity, we're going to need something to do. And maybe there is a world in which organizations become the organizing way for us to still have human experience and contribute something that feels meaningful to someone somehow. Because I don't think, to your point, we're all just going to write poetry and smoke weed all day and nobody wants to spend that much time with their families. We're going to need something else to do with our brains, even if it's not completely economically necessary the way that it is now.
Greg Shove:
Yeah, I think that's right, Rodney. And here's the good news. There are so many big problems that we need a lot of human ingenuity and just frankly, talent showing up, not just the solution, but the people to actually deliver the solution. We're short teachers, I think it's 200,000 teachers short just in the high school system in the United States. We're short healthcare workers and nurses. And we have labor shortages everywhere and expertise shortages everywhere. So I think the good news here is that we've got some big problems that we could apply people who've got some experience, and if you don't have the experience, AI can probably help out with that. Just show up with head and heart, head, heart, and hands and you're right, maybe that is one role of an organization in the future, which is to organize us to go tackle some of these challenges.
Rodney Evans:
That would be pretty cool.
Greg Shove:
Yeah.
Rodney Evans:
This seems like a pretty good place for us to wrap it up. Greg, I could not have enjoyed talking to you more. Where can our listeners learn about you and about Section?
Greg Shove:
Go to gregshove.com, G-R-E-G-S-H-O-V-E.com. And all my links are there. I've started a podcast and newsletter called AI Truth Serum. So if there's one thing I would like people to do is check that out and see if you decide if it's worth subscribing.
Rodney Evans:
Awesome. We will link to that in our show notes. For the listeners, we are always looking for new topics for the show. So if you have an organizational pattern that you're having trouble changing, shoot us a note at podcast [at] theready [dot] com. This show is engineered by Taylor Marvin and produced by Jack Van Amburg. At Work with The Ready is created by The Ready, where we help organizations around the world change the way they work. Thank you so much for listening.