Stuff is Cheap, People are Expensive: ISE 2024 Stage Talk

In this podcast, Walt Zerbe, Sr. Director of Technology and Standards at CEDIA and host of The CEDIA Podcast talks with Leslie Shiner, owner of the Shiner Group, Rich Green, owner of Rich Green Design, and Jon Rehwaldt, Director of Curriculum at CEDIA about stuff and people. We get into employee retention, new generational issues, staffing, using AI, and lots more.

Podcast Transcript

Walt Zerbe  0:01  
I am CEDIA. I

Speaker 1  0:02  
am CEDIA. I am CEDIA. This is the CEDIA media CEDIA podcast.

Walt Zerbe  0:06  
Hello and welcome to another CEDIA Podcast. I'm Walt Zerby, Senior Director of Technology and Standards, and your host for the CEDIA podcast. And this week, I will be rebroadcasting a talk that took place at the 2024 ISC integrated systems Europe show in Barcelona, Spain, I told you I would be doing another one of these talks, and we may also post a couple others. This one is a bit different. We don't talk about technology, but we talk about people. And the title of this talk is, stuff is cheap and people are expensive. And without further ado, let's get on with the cast. Welcome to the talk. Stuff is cheap. People are expensive. I'd like to introduce everybody here. I'm Walt Zerby. I'm with CEDIA. I'm the Senior Director of Technology and Standards. And then to my left we have Leslie shiner. So Leslie, tell us a little bit about your due and how long you've been in the industry, I like to give everybody context for why you're up here and what you can what you can bring to the to the conversation.

Leslie Shiner  1:10  
So I'm a consultant. I consult in the industry, and I also do a lot of the education for business. My goal is to help companies improve profitability, understand their numbers, so that they can actually continue to be profitable. So I specialize in working with integrators to understanding their numbers better, and then ultimately, to me, the goal is better management and better profitability.

Walt Zerbe  1:37  
Yeah, and Leslie, without spilling the beans. Are you regularly surprised in that with the people that you work with? How many of them do don't really have a concept of the numbers?

Leslie Shiner  1:49  
I'm regularly surprised with people that don't work with me, that don't have a concept of the numbers. Okay, people that work with me do have that concept, because that's typically why they they work with me. But yes, I'm ready. At, you know, the question is, are, are you running a business, or are you just a hobbyist? So many people get into the industry because they like it, which is great. I mean, you don't have a problem with that, but it's it has to go from being just a hobby and something that's kind of cool, and you get to play with with cheap stuff and be able to do fun stuff, but you also have to make a living and be profitable.

Walt Zerbe  2:25  
All right, thank you, rich, rich green. Please introduce yourself. Same, same stuff,

Rich Green  2:30  
okay? And Leslie is a CEDIA fellow,

Leslie Shiner  2:34  
right?

Walt Zerbe  2:35  
We have two CEDIA volunteers here, major volunteers, two fellows and all sorts of

Leslie Shiner  2:41  
teaching over 20 years, something like that,

Rich Green  2:44  
rich green Palo Alto, California, the birthplace of Silicon Valley. I'm an integrator. I do both commercial and residential work. I'm also a long time CEDIA volunteer. These are my ribbons. I'm famous for my ribbons. I track new technologies, Silicon Valley perspective, and where I'm heading these days is more of a humane approach to technology. And I am a CEDIA fellow, and I'm very proud of that.

Walt Zerbe  3:14  
That's quite the challenge. Rich a humane approach to technology, which we will touch. We can touch a little bit on that. And then we have our own John reinholt, and you are a director of curriculum for CEDIA, and you've recently joined us, but you have a lot of history working with people. And so you are focused on curriculum right now, but working with people, working with technology, working startups, entrepreneurial things, so you've seen a lot as well. So give us a little bit more of a history about you. Sure,

Jon Rehwaldt  3:46  
I started off in traditional education as a teacher and English teacher, so I'm sorry for your experiences if you had language classes, but I started an incubator accelerator about seven years ago for manufacturing companies to help people in my region start many and so I launched about 11 businesses, manufacturing businesses, and I put together the teams that would help those entrepreneurs reach that goal of launching a product. So a lot of what I did in that role was putting together the right people and identifying the characteristics to help them work in a team, and then developed education to help them skill up so that they could also run that business well and understand the manufacturing process.

Walt Zerbe  4:30  
Yeah, okay, and really interesting, because in our trade, a lot of the people that are running the companies aren't necessarily business people. They're more technology focused people, and that is that can be a challenge, right? So let's get into the crux of this discussion, which, well, first of all, class is teaching. Are either of you teaching anymore for the rest of the show? Okay, please announce what you're teaching. All of you. I'll just go right down the line, because we do have some great education. Up in the CEDIA education area, which is as soon as you come in the building later, and it's upstairs, and there's deeper dives in a lot of the stuff that we're talking about there. So Leslie, oh, look, everybody's looking. I'm going to go to John. He looks like it's it's in his brain. John, what are you what are you involved with? Yeah,

Jon Rehwaldt  5:16  
so I have a session right after this on how to create a benefits package that will attract and retain talent. So we just talk about how to adequately look at the industry and your competitors and make sure that you're compensating appropriately, and then how to get your employees to invest in your business by training and skilling up and growing as an employee to do more things. We know very much that right now, retaining your employees is one of the most important things that you can do.

Walt Zerbe  5:47  
Yeah, and I'm going to touch on that so you can chime in on that one who wants to go next.

Rich Green  5:52  
Let's see. So I'll be here at three o'clock for the stage talk on AI and the smart home. It's going to be the best stage talk ever. Wait, compared, wait a minute, except for this one, yeah. And then tomorrow I'm doing a stage talk here, navigating AI threats in the AI AV industry. That's gonna be the best scary one, yeah, yeah. It's gonna be positively terrifying. And then 230 tomorrow, I'm doing a course that I call whitewater rafting, how to survive the chaos of exponential change. And that's a new kind of psychology that involves imagination and core values mixed into a way forward. So it's kind of a new thing. Okay?

Walt Zerbe  6:39  
Leslie,

Leslie Shiner  6:40  
so right after this, I'm teaching warning avoid these 10 things that could put you out of business. So trying to give you some idea about how you want to run your business as a business. And then tomorrow, I have a really fun one called Creating an exit strategy, something that you should be thinking about, no matter what age you are, no matter where you are in your business, how you decide to want to exit is how you want to operate every on a daily basis, every day,

Walt Zerbe  7:11  
all right. Well, let's start off with the main question. Stuff is cheap. People are expensive. Let's just, let's just dive into that one right now. And when I say, dive into that one. We did this talk last year, and it was well attended and well received, because we're, we still have people and we still have stuff, but which so it's, it's always definitely worth talking about, but we've had a monumental change from last year to this year, which is two letters rich. What are those two letters? A I, yeah, so I want to bring that into this discussion later. So I want to make sure that we, at least we start off with the traditional look at the business. Look at the business today. What do we mean by people are are expensive and stuff is cheap. So who would like to start?

Leslie Shiner  7:58  
Well, I want to start before, before it gets hijacked by AI, because no matter what you do and end up doing, you're still going to need certain people to do certain things at some point in time. As installers, you will need to have people. And the issue is that as an integrator, if you look at sort of how the industry is trended, margins on equipment have fallen and fallen and fallen. People are selling stuff. They're not even making a penny on it. Although some are selling things, you're still making stuff on but most profit is made off of labor. And so when I say, when you say that, you know, stuff is cheap and people are expensive. Labor is expensive, and then you have to use labor, and you have to set enough billing rate, and you have to charge enough to cover all of those costs. So it's not just how much you pay somebody. I always say labor is like, your employees are like pigpen. You all know who Big Ben was in American cartoons, Charlie Brown cartoons, Big Ben was a character that wherever he cloud of dust that followed him wherever. And inside, I'm not saying your your employees are dirty. They're clouds of dust. They're clouds of dust. And in those clouds of dust are the tools that they had lost, and the vehicles they drive, and the training you had to give them, and the bonus you had to give them to retain them, and the commitment you had to make, and the time off you had to pay them. So people become very expensive when you look at how much it costs per hour to pay somebody and retain somebody, and then how much you can bill. And unless you put that inside your business model, you're not going to be making enough money to cover the cost of the people and overhead and profit. Yeah,

Walt Zerbe  9:47  
you guys want to add anything to that? If not, I have a follow up question. Yeah. I

Jon Rehwaldt  9:50  
mean, it's absolutely true that the people in your business are always going to be one of your biggest line items, like whatever it is that they need. Yeah, so how are you making decisions to give them what they need? How do you view them? And one of the things that you absolutely have to do is to have goals and dreams and aspirations, and maybe they align with your company, or maybe they don't, but you have to know that before you can decide whether or not they're worth retaining or whether they're worth skilling up. So continuous conversations with your employees is really, really important no matter what size your business is. Yeah,

Leslie Shiner  10:29  
and I want to, I want to add to that, because I always say I taught a class called building your business with training. And I hear so many business owners go, if I train. So if I pay to train somebody, they're just going to leave and then they're going to take my business, and that is a possibility, but if you don't treat them well, they're going to do it anyway. So it's not just that I'm going to pace to train somebody, and they're going to leave and take it away. But if they become part of the team, and if we have the right culture, and if I value them. People don't leave. They leave for many different reasons. It's not always just money. The culture becomes very important. Money to train people, but better trained employees will be will produce more revenue for you and be more profitable for you. Yeah,

Walt Zerbe  11:19  
you know you can't, you can't use that mentality if, if, if I train them, they may leave, because you're still doing something with them on your staff, and a lot of it, you're still investing a lot of your time and other employee interactions. So it's kind of a misnomer to me to say if I train someone, they may leave, you you're already going to be training them to some level. And yes, there's anybody can leave and start a new business. So if that's the way you're thinking, that's that's not a very right way of thinking.

Jon Rehwaldt  11:48  
Somebody said to me recently, and I thought it was really great, what happens if you don't train your employees? What if you don't train them? How does that affect your business, how does that affect your relationship with them? If you don't, if they don't see you investing in them or giving them the kinds of resources that they need that's going to make them leap. Training and the ability to grow as an employee is important, and to some people, it's more important than others. But you have to know, yeah,

Rich Green  12:19  
there are two sides to that coin. What if you train them and they leave, yeah, but what if you don't trade them and they stay? Yeah? Okay, that's a problem. You got a turd, you know? It's like, oh, geez, all right, I should have trained them a couple of years ago. Yeah.

Leslie Shiner  12:34  
The other thing you have to realize is, it's not a zero sum game. If I pay you $1 less or a pound less, or a Euro less. It doesn't mean that that goes in my pocket. Companies that I work with, the most profitable companies actually pay their employees the most salary. And you think, Wow, can they do that? How can they be making so much money? Because they train their employees, they invest in them. They pay them very well. Their employees are very loyal, and they are producing the results. So don't think like for every piece of money that comes out to give to you, that means the poor and you richer. It's not a zero sum game. We all have to make each other better. That's

Walt Zerbe  13:20  
a really good point. And if they also, I would think correct me, if I'm wrong, if they understand that investing in their people is worthwhile, then they also understand I should charge appropriately for my labor, right, right? Absolutely. And that's why, also they're making money, because they get the whole the value proposition. Okay, let's talk about people and a business. So I know we have people here that are not integrators, and so just you can apply this to any business, staffing, staffing today. Do you have any general guidelines on how you should staff, what key roles you may want to have around in the company if you're one that employs a fair amount of people. And that's kind of a trick question, because I'm going to then flip it to rich, because I know Rich is doing a completely different model you used to do the other model. So Can, can you talk a little bit about, I guess, to reframe the question, sometimes people run around with too many hats on, so they're very inefficient and they don't do anything Well, and that's just not a good way to be doing a business. So do you have some guidelines on how many people or what key roles you should definitely be considering? I know that's got to be tailored in the

Leslie Shiner  14:38  
business. But first of all, just because the owner does it doesn't mean it's free, and just because the owner's spouse does it doesn't mean it's free either. So you have to look at it, depending on the size of your company, what's the biggest bang for the buck for your minute, a minute or an hour of. Your time. For most integrators, the owner is in sales, not in production. When it comes to the biggest bang for your buck, I can sell better. I own my own company. I know I can talk to customers in a better way than my employees. If I want to delegate, I will delegate the install function, as opposed to the sales or some other office function, or marketing, or marketing, or any of that. So I mean, there's many different companies out here. I always say, take a look at your profitability and your numbers. And one of the greatest metrics that I like is revenue per employee. And it can be different for your industry. It can be different for your employees. It can be different for your history. But if you take a look at that, the reason I like it is to twofold. One is, no matter what Shambles your books are, hopefully, you know how many people you have and what you sold, hopefully, hopefully. And the second thing is, it's very forward looking. So what are your projections now? What are we going to sell in the next six months? What are we going to produce in the next year? And once you come up with a company standard, you can use that to on a forward looking basis, to figure out what do you need for the future. You have to be considering, are you going to have to let somebody go, or if you're not going to meet your sales goals? So many of you might find that it's difficult to let people go. I think at least in America, we are way too quick to hire and too slow to fire, and we should be the other way around. I tell you that what best thing you should do is invite somebody into your office. Knock, knock, hello. It's called a knock, knock, knock. Oh, who's

Walt Zerbe  16:42  
there? Not using Hello,

Leslie Shiner  16:46  
knock, knock. Who's there, not you anymore. So that's my way of firing people. I don't think HR would like that, but works for me.

Walt Zerbe  16:55  
Well, that's just yeah, this. It's very sensitive way to Leslie known for being said. So before I move it to rich, flip it to Rich, I was going to say that probably one of the first steps you do then is and what is implied here is the owner better know their business. And I bet a lot don't. So you we first focus on, do you have a projection for six months? Do you know what your overhead is? Do you know what your expenses are? Guess what? We got to start with that before we can even be thinking about what you just said, right, right, right, all right. So that that is a, this is a model where you employ a bunch of people. Rich you you're an integrator. You had a company. How many people did you employ? 3535 and then you decided to flip the script. So what did you do?

Rich Green  17:46  
I used to come to these shows. I had 35 people, a whole bunch of trucks on the road. I had a big company, and we were very famous for selling a lot of premium brands and all that kind of stuff. I'd go to CEDIA. Hey, rich, how you doing? I'm doing great. I got 35 people. I got nine trucks, and they thought, that's great. You're doing fantastic, rich. I didn't make a dime. Okay? I lost my butt on a big company. So I completely flipped the model. I thought, Okay, I am going to build the smallest possible company, and that's my mission, to build the smallest possible company. That doesn't mean I don't want to make profit. I do want to make profit, but I don't want to do it in a wasteful, soul sucking mess of employment. So my model is, I'm a company of one. I'm doing really interesting work. I've I'm working with subcontractors, several of whom are former employees. We get along great. We're a wonderful team. I scale up as needed. I scale down when I need to. I don't have that overhead, and I'm making much more money now than I did with the big company, so that's a different way of approaching it. Now I know Leslie is going to have some very strict things to say about working with subcontractors. Some countries have very strict laws about who is a subcontractor. How do they manage their schedule and so on. I'll leave that to Leslie, but that's a model that worked really well for me.

Leslie Shiner  19:27  
Well and yeah, and it proves the saying, as the saying goes, that I stole from somebody, revenue is for vanity, profit is for sanity, right? And cash flow is for reality. So you get these people that do the whole we're going to do 76 million this year. Okay, but how much did you make? Yeah, and so revenue is certainly a great number, but if you don't have any profit, then why are you chasing revenue? Yeah,

Jon Rehwaldt  19:58  
well, and it comes back to. It to using data to your advantage, to understand what your business is doing, what your employees are doing, and making sure that you're documenting as much as possible if, if you're not paying attention and keeping track of what's going on in your business, you're not going to be able to make good decisions about it.

Rich Green  20:16  
Yeah, I'd just like to mention how I got started with this theme of stuff is cheap, people are expensive. I heard an author and a futurist named Ramez Nam n, a, a, m, say this, yeah, at a future, a world, Future Society meeting in San Francisco, the first thing he said, stuff is cheap, people are expensive. I'm thinking, okay, he's got my attention. What is he talking about? The scarcest commodity, and I don't like the word commodity, but the scarcest commodity in Silicon Valley, where I work is talent. There's nothing more valuable than talent. So all of these startups, all of these companies, are scrambling for the top talent that they can possibly afford. And when they go in front of a venture capitalist to pitch their company, the VCs are thinking, Okay, nice person, charming, great ideas. Who do you got? Who is your talent? And in Silicon Valley right now, AI source of talent. So if you have any kind of a degree and experience in artificial intelligence, you can come in starting at about about a million dollars a year and and up. So there's this notion that there are very few really good people out there in the workplace, and what you need to do is find them. If they're working for your competitor, steal them. You want to get the best people you can possibly afford. And I think it would make a lot more sense in the smallest possible company metaphor to work with a small handful of really talented, hardworking, good soul people, people who are human beings than dozens of mediocre people who aren't fully trained, who don't understand their purpose In life. It's okay. You have to be fair about this. What you want is to get the best people you can possibly afford and then nurture them, train them, pay them well, give them what they need to be a whole human and I think you're going to build a company that way.

Jon Rehwaldt  22:35  
And they might not start off that way. They might not start off as the perfect employee, you might have to hire somebody who has the characteristics that are going to fit well with your team or your culture in your company, and then get them to that point because they show that they are motivated and they are hungry to learn, and that might be the best employee you ever have. And you got them to that point, you can do that with training and with benefits, and, you know, talking to them and understanding what they're doing and what they're going through and what they want to achieve. So,

Walt Zerbe  23:09  
yeah, let's talk about that a second. I didn't have that in my notes. Of course, these talks never really go by the notes, because we just feed off of each other, which is what makes a talk great. Leslie, do you? Do you touch base on that at all. I mean, first of all, let's talk. People are expensive, and maybe you should pay more because we can't. This kind of has a negative connotation to say that, okay, be prepared. People are really expensive, but guess what? Maybe you're not paying enough, which is what I just kind of learned here. Maybe what John just said, though, is you might find a diamond in a rough, and you can bring them in at a decent price, and then maybe you do need to pay them a lot more to keep them because they're a diamond in the rough. Do you actually talk to your business, your your customers, about, you know, what you should maybe expect to pay a lot more? Or you should maybe get rid of three and and get one person that's, that's that that fulfills that entire budget segment.

Leslie Shiner  24:04  
So it's, it's interesting. You have to take a look at people's talents. I talked about this earlier. For example, a project manager. People say to me all the time, oh, man, we have the best project manager. He or she manages the job, knows what they're doing. The only problem is they don't do paperwork, except for the fact that most of what a project manager should be doing is paperwork. So at that point in time, when you have something like that, and whether it's in marketing or any other part of your business, when you have somebody that has a good talent and they do something well, you have to decide, am I going to tie you into this chair and force you to do something that you've proven to me you have no interest in doing or can't do. Or can I restructure the way my business is set up so I'll get a contract administrator to work with you, or I'll get somebody to work with you. So it's important to look at people's skills. Right and to develop around them. A lot of times, people say, No, you should, you know, create a org chart and then fill it. And I think it's very important to look at people's skills. Somebody who's very meticulous and very well oriented with numbers and with estimating may be very good at sales and not good at talking to customers. I don't know what it is, but look at what they can do, and try an employee perspective. What are they really good at? In particular, I always say when you hire somebody, you judge them by how many questions they ask, and make sure that it's not too many and not too few.

Walt Zerbe  25:39  
Leslie's tough. Richard, do you want to chime in on that? Were you giving me the approval or are you? Are you wanted to?

Rich Green  25:47  
I just lost the thought. So continue. All right. Well,

Walt Zerbe  25:50  
John, did you want to get on that one as well? What she's talking about as far as well. I think where we're going now is Besides, people are expensive. We're now talking about personality types and looking at the makeup of your business. And that's a whole nother direction, but extremely important. I've been involved in two or three companies in the past where we did a company wide exercise to look at what someone's personality type was, whether that's, there's a whole bunch, there's disc and there's what's, what's the anagram, and they all yield different information, but that you will find that certain people with with certain skill sets ended up being, oh, you'd be good at accounting, oh, you would be good at sales, and you'd be good at outside of the box Thinking. So now we've completely, kind of expanded this discussion. Rich. I'm ready.

Rich Green  26:45  
So Peter Aylett and I did the design thinking workshop yesterday. And in the design thinking process, which is kind of a thing that came from Palo Alto, California, there are certain people who are perfectly suited to a certain role, and others are not and one of the mistakes that we see in a lot of companies in our midst is a is the hat of sales versus the hat of design versus the hat of engineering? Okay? Designers and engineers are two completely different people. The last thing you want to do is put an engineer in front of a customer. Don't do that. Engineers love to hear themselves talk, and they try and they know how to solve problems, but they don't know how to create problems. They just solve problems that they know how to solve, whereas a designer knows how to create the right problems to solve, and they do that with people skills, with empathy, with asking the right questions, with having meaningful relationships with their customers and the potential customers. So getting the right people in the right seat is crucially important. Very often, engineers in our industry rise to the top, but they may not have the skills that you need to do the design work, which is very early on. It's a discovery process. So you have to be, you have to be a people person. You got to figure out. How does this personality work? Are they engaging? Can they make eye contact? Do they know how to ask questions? It's it's a you have to be very careful.

Jon Rehwaldt  28:19  
Yeah. And one of the things that I always come back to as well is that all of that can be taught like they're teachable. Everybody has learned everything they already know at some point in their lives. So if somebody has a characteristic or a personality trait or a skill set that isn't working for your company, you can train them to change that, to help them be better for your business. And if they're an engaged employee who cares about the work that you're doing, they're gonna, they're gonna be receptive to that. You can learn anything you want to learn if you're sufficiently motivated. Yeah,

Walt Zerbe  28:54  
I do. I do wonder, though, about what's inside you and what you're just we're all naturally a way. And when you're doing something that suits the natural way that you are, you're probably going to excel and be happy because you're doing something that you get, and you maybe get fulfillment out of which goes right back to that retention they're going to be willing to stay, versus maybe someone is trained for a position that's completely different. But I see kind of a fine line in that, that are they going to be happy long term, maybe they can do the job, but are they really going to be satisfied doing it? So a lot of experience, John working with people you didn't know that are starting new businesses you don't and getting thrown in a whole bunch of different roles. So do you want to just, do you really think it's completely anybody can be trained to do anything, or are there, are there limits with your personality type? And I think

Jon Rehwaldt  29:47  
that talking about the characteristics that people have, how they communicate or how they relate to information, is really useful for having a discussion with them, but it's always a discussion starter, and I'm wary of. Finding people by the things that they self select on a survey. Does that make sense?

Walt Zerbe  30:05  
Yeah, it's more like, um, Are you creative? Are you type A? Are you really quick at problem solving? Are you super organized? You know, those, those are different, different kinds of people that you can, you can, you know, pick up on,

Jon Rehwaldt  30:19  
but you can. You can help somebody learn how to be creative. You absolutely can do that. You can help somebody be more relaxed in the workplace and that vision and understanding what kind of things they need, because probably they've been trained by a previous employer to not talk to their co workers or to treat their their customers in a certain way. They've probably been trained to do that, so you can train them differently. All right, I

Walt Zerbe  30:45  
want to bring AI into the discussion before you get but I want to go to Leslie first. Sorry.

Leslie Shiner  30:53  
The one thing you want to do is have a conversation with your employees about, what's their three year goal. What's their five year goal? And the other thing I always tell people to do is, if you want to try something new, let's go for it. Let's take a technician and make them a project manager. Let's take a designer and make them an engineer, or whatever they're interested in doing. But let's make sure when we do that, we don't put with it a giant promotion. I want to try it. Let's try it and see what happens. If it doesn't if you attach a promotion to it, you are now to that position. Now they have to do it, and if they fail, then you end up losing your best technician. I have to fire you because you're a horrible project manager, but you were the best technician ever. Why are you making yourself do that? So allow people to look at their three year goal and their five year goal and allow them to try new positions, but never include that new position with a raise, a bonus, a promotion or any hoopla. It's like, let's try it out and see hey, and then turns out you're really good. Then we'll do a hoopla. That's a really good don't do the hoopla first, because that may not work, and you may be forcing yourself to lose the best people you have by putting them into a position they can no longer be.

Walt Zerbe  32:11  
That's excellent advice before we move to AI, because I did say we were going to move AI. I just something else has popped in my head. I had a discussion at dinner where, John and I were at dinner with a whole bunch of people, and this was another CEDIA volunteer and an integrator from Australia, Matt Manolis. Matt had some facts. Hey, about how he approaches hiring. When somebody goes to come on the company, he lays out a 10 year plan for them. You're going to make this much money when you come on, you're going to expect you're going to get this kind of an increase every year. If you get a certification, I give you this increase. If you get another certification, I give you this increase. You get a toll budget. You get a he had the whole thing laid out. So at the minute that employee sat down, they knew right away. What is it going to be like working for rich for the next 10 years, as long as I perform? I thought that was super brilliant, because he laid it all right out, right on the table, immediately. This is what you're going to do if you work with me for 10 years. Thought that was brilliant, impressive.

Rich Green  33:15  
You're defining a career path. Yeah, exactly. And then there are young people who need that, like, Okay, I'm I'm on it, right? Yeah.

Leslie Shiner  33:26  
And especially with younger employees, it's your job to teach them how to be a good employee. Haven't come up they they never worked at Starbucks like my kids did, or McDonald's. They just are starting in this workforce and have no idea, and you have to teach them how to be a good employee, all right? And that's what that sounds like. That does I

Walt Zerbe  33:46  
want to move into how this environment is going to change and how expenses are going to change, because now we live in a world of AI. So I would like to talk about how AI is going to change the potential makeup of the business, what positions may be lost, and what positions may you now have to look for. And when we talked about people are expensive, about to get more expensive, that's a big concern with someone that knows how to ask questions like a prompt engineering type person, and then retention, because they're probably going to be younger people. That's going to be an incredibly different challenge that you may have faced. So I just opened up a giant can of worms. Who would like to start with the now we brought AI into the picture. Now, what's going to happen with our people?

Rich Green  34:37  
I'm happy to jump in all right?

Walt Zerbe  34:39  
I know John's got got a lot on this too, okay, well,

Rich Green  34:44  
AI is considered a huge threat to humanity. It'll replace all the workers, and it'll make humans no longer valuable. That is a bunch of bunk. So the idea is to augment and enhance what people do well and help them do it better, to work more efficiently, to expand their mental reach, to understand more concepts and so on. So I think if you wanted to reduce the number of employees but increase the quality of who they are and what their work is, and be able to pay them more bring in AI to make their work more efficient. That is a brilliant use. It's intelligence augmentation is a better term for me. Artificial intelligence. Artificial Intelligence kind of implies that you're replacing the human whereas intelligence augmentation means is I want to get as much out of this person as I can, and AI will help them become much more efficient, much more productive, better informed, and so on. So how do you do that? Most of us don't know how to implement AI. It's scary. There's a lot going on every day. There's a new announcement. So what I would suggest that you do, like you said, Walt, bring somebody in. It might be a young person, but somebody who understands the power of this technology and who's in it, who's every day playing with chatgpt and all the GPT gpts and the large language models and the vivid and the and probably is a gamer, and so they understand virtual reality and augmented reality and mixed reality from a gaming perspective. You person in there, and they can completely restructure the efficiency of your business, for example, if you use AI to inform a Metaverse, extended reality type experience, you can have one very well informed person at a control desk who is in contact with six technicians out in the field by virtue of augmented reality, giving them step by step, turn by turn, instructions on how to build the back of the rack, what to do when they get into the house to start troubleshooting, you might have a troubleshooting master who is leveraging their expertise across six or eight people. So there's, they're sitting at a they're like, it's like a flight control center. And you can use these technologies to inform people in the field in a way that they had no access to the information before. So I think I'm all in I think AI is a tremendous boon for our businesses. Don't be afraid of it. People who understand it and leverage it

Jon Rehwaldt  37:38  
Well, unlike with any tool people need to know how to use it, so you might need to do some training. I know I'm harping on training. That's kind of my job, but imagine how much more productive each of your employees would be if they had a personal assistant, a person whose job it was to do their scheduling make sure that they are where they need to be, and they have everything that they need to have, even if they just did that, it could save you hours or hundreds of hours across your business for in one calendar year. And that's the kind of thing that I, AI, excels at. Yeah, we're gonna see, you know, robots pulling cables through walls. We're gonna see that stuff. It's gonna happen. It's just a matter of how long and how much it costs to get there. But right now, you can give each of your employees for $20 a month, a personal assistant in their pocket. John,

Walt Zerbe  38:30  
that's a really good point. And I think you also uncovered something else, like a lot of things filming. You just said, just start, just like, pick one thing, and your one thing was personal assistant. Just start with that. And then after you live with that for a while, I guarantee you the other ideas will come and you'll be like, Oh, maybe we can do this with it. Oh, maybe we can do marketing with it. Maybe we can do something else with it. But the point is, start and start with one thing, right?

Leslie Shiner  38:58  
I like to compare it. Some of you are old, a little a little older, old, not as old as Rich and I but do you remember when the iPad came out? Oh yeah, because it was going to destroy. I remember the Saturday Night Live skit on the iPad too, but it was for the industry. It was going to destroy the industry, right?

Walt Zerbe  39:20  
The industry is destroyed every time anything gets introduced, right? And

Leslie Shiner  39:23  
it's because everybody made all their money on the boxes, right, restaurant loot, all of the different manufacturers. Like, no, we can't use iPads. So this happens. And are you doing the one about the agent, the speed of change? No,

Walt Zerbe  39:38  
that. But I think rich, rich, exponential change, the yeah and the white water rafting, yeah, anyway.

Leslie Shiner  39:44  
And so I think that we often fear all of this stuff, and there are parts of AI that are different. I think it's such a big term, that's why, like, I like what you're talking about, of a personal assistant or, you know, finding ways to. To say and asking your employees. One of the things I don't think people do enough is they don't ask their employees. I see that it takes you 12 hours to do this. How can we make it faster? How can I make your job better? How can I make sure you have the right equipment when you show up at a customer site? How can I make sure that you don't have to go to take two trips when you can take one trip? If you, as a boss, can ask your employee how to do that, and say, think outside the box. Then you can utilize AI to make sure that those things, how do you implement those things? That's what you're trying to do is hate your employees, but improve their productivity. And that's what you have to use the terminology, I want to improve productivity and I want to improve profitability. Those are the two key things. If we can improve productivity, guess what? We improve profitability, and then we can share that with our employees and keep them on the team.

Jon Rehwaldt  40:58  
One of the other things to note is on the panel's title, AI, development of products is going to go so much faster than traditional product development. It's stuff is going to get way cheaper. So if you're currently making your margin on products, that's not probably not going to happen for too much longer. So finding a way to charge for labor and charge appropriately for labor is a huge part of the way to build a business for the future. But also, there's just going to be so many products on the market with AI development, especially software development right now, I can sit down at my coding, my workstation at home, and I can pull up three agents to help me, which is all a hobby for me. It's not part of my job, and they're all doing specific tasks to look at the code that I'm writing and looking for the mistakes I make, so my code gets done faster, more efficiently, and it's better code, and that's going to happen with all of the things that we sell and develop, too.

Walt Zerbe  42:00  
Yeah. I think one of the themes here is, everybody in the audience, we're all we need. You need to get involved in this, or you're going to be left behind. So this is also going to go down to efficiencies. These businesses that adopt this stuff are going to become more efficient, which means they could charge less potentially because they're more efficient, it's going to, it's going to set off a whole new

Leslie Shiner  42:19  
or the area or work the same amount of people, yeah,

Walt Zerbe  42:23  
or even become higher margin, because they're just so efficient with all these other tools. I listen to a podcast out of Silicon Valley that's with four venture capitalists. It's called the all in podcast. I love it. A couple of the people on there, if you do not use chat, GPT or other fired. They because they found that there is a 20 to 30% improvement in efficiency. And exactly what you said, it's, it's, it's to augment their work, not replace them, they found huge gains in efficiency and productivity. So if you're not willing to do it, or you haven't changed, you're out. That's actually a way of saying you're not using it. You're a great guy, great, great employee, you're out because you're not using it.

Rich Green  43:05  
Well, think about what John just said, programming the new programming language is English, yeah. And so, at least in the US and so you can there are people who are automating entire homes that are full of IoT devices in a period of maybe three hours that used to take our Crestron and control for programmers days, if not weeks, to do, and we would charge days and weeks of time to get that job done. You can sit down with the right large the right AI assistance, and they will generate the Python code. They will port it to the AP, and now OpenAI calls them gpts That then plug into a garage door opener, a thermostat, a lighting control system and so on, all with English commands it may take three hours, you can still charge as if it took two weeks. Okay, this is incredibly profitable. It's a huge opportunity. So I would be totally all over it.

Leslie Shiner  44:04  
No, because I think what they used to do is charge as if it took three hours and then spend two weeks.

Walt Zerbe  44:09  
Did you have a question? No, okay, I don't know if you're standing at the microphone. So retention is we're just about out of time. But right now as it stands, unless the business owner is someone that's messing around with chatgpt and is kind of a forward looking person, they're going to need to find someone that can get them into this world. We talked about traditional retention for traditional roles within your business. Likely someone you're going to find to come in is going to be a very different employee than you would be looking for. So I'm anybody have any how, where you would find one of these employees and how you would retain them, because if they're a young gamer, but you need them to stick around, this could potentially be one of your largest challenges, is to keep that person motivated and on board to help you through. Or the change. Got any thoughts on that? Anybody?

Rich Green  45:02  
Well, I don't know about finding them, but once you get one, give them some space to play. Give them some space. They all

Walt Zerbe  45:10  
be creative types. They will need space, if they are right. You know,

Rich Green  45:13  
Google tried 20% of their work a week, so one day a week, a Google employee could do whatever they wanted play, go out and play, and hopefully you'll come back with a new idea that we can work with. So I would do that if I brought in some young people who are gamers and familiar with with augmented reality, and AI, give them a day to play. Give us

Walt Zerbe  45:36  
three. So just to be clear, you're paying them a day to play.

Rich Green  45:39  
Yeah, pay them to go away, get out of the office, go come back with something interesting. Okay, and that can be motivating,

Walt Zerbe  45:48  
John, you have a ton of experience in this, because you got involved in this right away. Any advice on that? Well, I

Jon Rehwaldt  45:54  
mean, I think that probably right now, trying to hire somebody who has experience is good, is going to be really hard unless you have a very large budget. So it might be best to get your employees into a room and say, Hey, we were looking at AI. We want to know how to how we're going to use it in our business. You've all got, I'm going to give you all chat GPT figure out how you want to use it in the business or in your personal lives. Just use it. And then we'll come back in a month and talk about it. And then you find the person who's the most excited. And then you say, you're, you're, this is your thing. You take it, run with it, start to figure out where we can use it in the business, and, you know, create a position for them. Yeah, they can do that.

Walt Zerbe  46:39  
I'd venture to say there are services, or will be services that can do that, then, as a service with people to help your business probably grow, if it doesn't exist already

Jon Rehwaldt  46:50  
well. And that's the other part of the AI discussion is, like Rich said, Every day there's new announcements, and every week there's new models, and every month there's new multi million dollar companies launching to sell products that are AI based. So in three months, we might have to be having an entirely different discussion about AI. We have no idea. And I said this to rich the other day. Some people see that and they get scared, and some people will see that and they get excited. And if you can make yourself be one of the people who's excited, you're probably going to enjoy the journey Whatever it looks like.

Walt Zerbe  47:26  
All right. Well, we're out of time. Thank you all very much for joining us for this talk. Leslie rich, John, thank you very much for being on the stage. You can catch some of us around if you have additional questions. I hope you enjoyed it and you have a good rest of your show. Thank you.

Leslie Shiner  47:39  
Thank you everybody.

Walt Zerbe  47:40  
Well, I hope you found this podcast interesting. I know that I did. I hope you can apply some of the things that you've heard to your own businesses. We will keep the podcast coming. I will rebroadcast a couple more of the stage talks from the ISC 2024 show. And I hope you all have a great rest of your day, and I will ask you as always to please keep an open mind.

Speaker 1  48:07  
I am CEDIA. I am CEDIA. I am CEDIA. This is the CEDIA podcast.