a show featuring some of the smartest people

working in data science,

as well as thought leaders leading the industry.

Today we're very excited to feature Barry Libert.

He's the CEO of Open Matters and a strategic advisor

for some of the biggest global brands

like Goldman Sachs, Microsoft, GE, and ESPN.

Barry is also a bestselling author

and has written for the New York Times,

Wall Street Journal, Financial Times,

Harvard Business Review, and many others.

Barry, it's an honor to have you in our chat today.

- Thanks for having me today.

- Barry I thought it'd be great if we can just kick this off

if you could share a little bit about yourself

and the work you're focused on right now.

- Sure, so this work started a long time ago.

It's the basic thesis that just like the human genome,

there's an economic genome and you can use data science to

basically find out what that economic genome is.

- Very, very cool.

I mean, it seems like every single day

I'm reading articles about artificial intelligence,

how it's changing the workforce.

There's a lot of fear I think,

sometimes those articles about robots taking over

and definitely in the financial space

we're seeing signs of robo technology

and artificial intelligence.

In one of your latest articles

you wrote for Harvard Business Review

you wrote an article focused on how even top consultants

in financial services may soon be replaced,

and was really curious if you could talk

a little about that

because that was a really great article you wrote.

- Sure, so the article was more

than just financial consultants.

It was marketing consultants,

strategic consultants, financial consultants,

auditors, legal, doctors, all consultants.

So if you think about the consulting industry,

just talk about one piece of it,

strategic consulting industry in the United States alone

is about a 70 billion dollar industry.

Think of them as doctors

that are doing business the old fashioned way,

which is a patient, a CEO,

comes into my old alumni firm, McKinsey, or Bane, or BCG

and they ask them a question, what's wrong with me?

And that doctor, that consultant,

gives them a piece of advice based on their own experience.

None of that experience is captured in a data structured way

that benefits in today's machine

learning artificial intelligence.

All our article was proving is that it's not just medicine

that artificial intelligence or machine learning,

or in financial services where artificial intelligence

and machine learning are taking an impact.

It's going apply to every single industry

where the services industry has had a huge growth cycle

in the last 50 years.

And that means all the best consultants

are going to have to deal with the fact

that machines learn faster, are more scalable,

and more repeatable than you and me.

Nothing more complex than that.

- Yeah, I think I even read an article a few months ago

talking about Goldman Sachs had a layoff

of a lot of their financial advisors.

Did you happen to see that one?

- I did.

And that's happening around the world

in the financial services industry.

You look back awhile, which is decades now,

the financial services industry

went from what's called active managers,

which was financial advisors giving advice to you and I

about what stocks or bonds to buy

based on what that manager had as his or her perspective

on the financial markets.

A long time ago, really a long time ago,

John Bogle, who was the chairman CEO of Vanguard

had a thesis that monkeys made better decision makers

than financial advisors.

That you could basically throw darts at the wall

and get a better return.

Now, the truth in there is he was right.

ETFs or what's called passive investing,

have outperformed the smartest

of all stock and bond managers.

Which means that the construct of actively advising

is doing less well than passively investing.

You've seen the explosive growth of not just ETFs

and passive managers, you're now seeing

what's called robo investing like Wealthfront and Betterment

begin to offer for you and me, the individual investor.

- Yeah, and I think it seems that from what I understand

around Betterment and some of these robo advisors,

sometimes the combination of artificial intelligence

choosing what stocks or indexes for people to invest in.

But also, there is some element of human management.

Do you happen to know how humans are working with AI

despite the layoffs?

- Sure, the layoffs aren't that big, right?

In fact, they're not big at all.

Growth in the industry is outpacing layoffs by far.

So, there's a massive fear, I call it,

on layoffs by, you know, robots displacing you and me.

I don't believe that.

It's going to create new skills,

obviously we might argue that 100 years ago

machines displaced humans when we started building cars,

or 150 years ago, tractors started displacing farm workers

and we started automating farms.

This is just the next iteration of machines

complementing human workers in ways

that you and I don't scale.

And all our research has shown and our article was about,

was sorry, for all of you people that don't think it's

coming to your industry,

which is all the services industries,

not just the financial services industries,

the marketing service industry, the audit service industry,

the legal services industry.

We gave examples of every industry,

the medical service industry,

where robots and artificial and machine learning

are going to complement human intelligence

and human learning.

- Yeah, it's amazing.

It's amazing to see the growth

and I feel like just in the last year

just tremendous growth in people interested

in machine learning, artificial intelligence.

I mean, I was looking at some Google trends

on the amount of traffic being generated around those terms.

Part of it might be out of fear, but then to your point,

there is going to be this strategic alignment

between human and artificial intelligence working together.

And, I think it's going to be a beautiful thing.

And I really like your positive outlook about,

just as we looked in the past,

how technology has displaced some workers,

there's just new jobs that were created from that.

So, I love your positive outlook.

I'm curious about some of the feedback you received,

because your article in Harvard Business Review

was very very popular, was shared all over the web.

I loved reading it.

I'm just kind of curious at the responses you've got.

- Well, surely there were both positive and negative

as you might imagine because we were taking a pot shot,

right, at the world's most elite.

My alumni firm, McKinsey, and Megan Beck who's my co-author

is an ex-Bain person.

So Bain-iac, right?

And my brother was at BCG,

you know, this our heritage from a lifetime ago.

It's hard for them to understand when they are reporting

all day long, McKinsey at their very best, is reporting

on the impact of AI in all other industries.

But not their industry.

It's like them suggesting,

like the taxi industry wouldn't be impacted by Uber,

the consulting industry wouldn't be impacted by AI or Alexa,

right, which what I think is coming anyway.

You and I will be getting my advice from what's sitting

right there on my desktop.

And, so, we had obviously had negative feedback.

Consultants saying, well what job will I have

and who's going to write your next article Barry?

- (laughing)

- According to your interview, a bot is going to have

some influence on that as well.

But there's negative and there was a lot more positive.

Which was trying to understand what does it mean to me,

just like you said, how do I think about it?

We were surprised, on my own LinkedIn page,

2,500 reviewers, right, and likes.

It was amazing to me.

- Yeah.

- HBR, I think there was 400 or 350 comments.

It just blew my mind.

- Wow.

- People are interested, right,

in this article on this area.

- Yeah, like I said, it popped up on my radar,

I saw all the sharing.

People obviously loved it.

And yeah, so I was just curious to hear about,

obviously there's going to be people

that are kind of frustrated or upset,

especially in those in Fintech,

who might be fearful of their jobs.

But I think you definitely touched on a hot topic

that everyone's very very concerned about,

but also excited about too.

- Yep, I think that's was our point.

But the most important part of our point was to tell

truth about something.

Megan and I were both presenters

at the annual MIT Platform Event.

And, it wasn't just falsehood in that article.

My co-presenter as the keynote speaker

at the annual MIT Platform Event was Alexa.

We had to mike Alexa.

And, we literally asked the machine questions

that no consultant could ever

ask about global economic trends that were the synthesis

of machine learning AI looking at 40,000 companies

across the world, across thousands of variables,

and tens of millions of words over 40 years.

- Oh, wow.

- It wasn't that we were kidding.

But, we're happy to share an image

that shows me talking to Alexa on stage.

I mean, of course I started with a silly quote,

an Alexa knock-knock joke, but I took Alexa

all the way to the end, asking board level questions

of things they couldn't get from their consultants

if they had to pay 10 million dollars.

- Wow, that is amazing, that is amazing.

Just seeing the voice, AI, products being developed,

Alexa, Coursera, and what's possible.

And like, what you just shared

because of artificial intelligence,

because of the amount of data that could be crawled

and analyzed and for Alexa to be able to return back to you

smart answers very very quickly

where it would take an advisor a lot more time

to go do some digging.

I mean, the ROI on that is just phenomenal.

- Yep, my always message is I have a simple thesis in life.

I wanna replace a Barry call, a call to Barry,

with a call to Alexa.

I'm tired of getting calls

that ask the exact same question to me every day,

I don't wanna become a platform network and AI company

for the last 20 years when AT&T was my first client

a long time ago.

And I said to them, I'll have a call answering service,

they can call right to Alexa and they can say

I'm calling Barry and Alexa will answer the phone.

- Yeah.

I think there's gonna be a Barry bot.

- There you go.

I'll hook it up so you can answer

some of your other interviewees

and people that you've had on your show

so I can figure out how to do that next.