Joseph Fuller: If you’ve noticed that your customer service agent is especially on the ball, or the bank processes your loan application with surprising efficiency, you might have artificial intelligence to thank. Traditional office work is increasingly giving way to process automation and machine learning. And the coronavirus pandemic has only accelerated that transition. AI is transforming mundane and complex tasks alike, boosting accuracy, speed, and overall productivity. But these developments also raise questions about safeguards and accountability. How can businesses balance human and algorithmic intelligence? And what does this transition mean for the future of knowledge work?

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. My guest today is Barak Eilam, CEO of NICE, a leader in AI and data analytics in customer-service applications. NICE is at the forefront of deploying AI and machine learning to handle repetitive and complex tasks. The company’s technology augments the work of customer-facing personnel by harnessing large and diverse datasets. We’ll discuss the evolution of AI, the challenges of competing for talent in a cutting-edge, rapidly growing marketplace, and of promoting diversity in high tech. Welcome to the Managing the Future of Work podcast, Barak.

Barak Eilam: Thank you very much for having me.

Fuller: Barak, AI is a topic that’s very, very widely discussed. There’s a lot of coverage in the popular press. When you think about it, how would you describe the current state of artificial intelligence? And as you think about its future, what do you anticipate is going to happen?

Eilam: There is still a very long way to go, but we’re starting to see in very specific use cases and industries some interesting usage of AI. I also think there is a better understanding—that it’s not just about the sophistication or the level of sophistication of the algorithm or the computing power; there is better understanding of the importance of the size of data and the domain-specific data needed for each one of those use cases.

Fuller: For lay people don’t really understand the technology, that are curious about it, what are the things you think they need to understand about it and about its future?

Eilam: I think that in five years from now, we will consume AI services in a way that, if they will be down for a few hours, we’ll think it’s the end of the world. That’s the way I would think about it in a positive way, taking away a lot of mundane tasks from our life and allow us to do other things. For organizations—by the way, it’s the organization that will adopt the AI in the right way—it can be a significant force multiplier to the way that they operate and—if they do it right—obviously a key differentiator vis-a-vis their competitors.

Fuller: How would an AI going down be visible to someone a few years from now such that they would have the same reaction they have to when the Internet’s unavailable to them today or their electricity is out?

Eilam: Well, there are so many different use cases where it’s going to help our life. If you think about AI, as it enters our life and takes away all of the things that we kind of are very—have the expertise, know how to do them—it’s going to take them away. And as I said, if this is to go down, we will be kind of useless or feel very, like something was taken away from us. And there are so many different use cases that you can think of in many aspects of our life, starting from driving, shopping, and so on and so forth.

Fuller: So it’s going to be sufficiently universal that, even someone who’s not in a technology job and doesn’t utilize high levels of technology or want to query big databases, it’s going to be visible to them if there’s a disruption.

Eilam: Yeah. There is a big shortage today in the profession called “data scientists.” I think one of the capabilities AI will give us in our life is the ability to consume data and use it, without the need to become a data scientist—for all of us, all citizens. This is one of those things. Yes, it elevates the data for us to something that is much more consumable for us.

Fuller: So tell us, how is it that you find yourself running a prominent AI company? Is this something that you envisioned as a student or early in your career? And what’s your journey been to find yourself as a CEO of NICE?

Eilam: I always liked technology. When I was a kid, I thought about technology, my passion about technology came about because I saw that technology can actually make your dreams come true. So that’s where the source of my passion came. I was a young officer in the Israeli army. I left the army at the age of about 24, 25. I joined a relatively small start-up company called NICE. And I joined as an engineer. And I kind of evolved and built my career at NICE to the place that it is today. And about eight years ago, I became CEO. But all the thing that I’ve done in the company in the previous years actually prepared me for the role of the CEO. I’ve been with R&D, I moved to product management, to sales, running a small organization, a big organization, and that prepared me to become the CEO of the company.

Fuller: So talk a little bit about that, where NICE is not a household name outside of the markets you participate in, what does NICE offer for its customers? And how does it reflect what you were saying earlier about the evolution of AI and its future?

Eilam: We are a cloud software company enabling thousands of B2B and B2C organizations to interact and manage billions of interactions with their consumers all over the world. We’re doing that with a lot of AI and data. A lot of Fortune 500 companies, as well as thousands of other companies are using our solutions to manage customer service with their customers. Now for many years, we optimized those interactions. But a few years ago, we realized that the data that we have and the need of consumers and our customers is to elevate and take it to the next level with applying AI algorithms and AI technologies using what we have in this platform. So today we see a dramatic shift from just optimizing these interactions to manage that and offer them in a self-service fashion to consumers with AI.

Fuller: So say maybe you could walk us through an example or the type of transaction where NICE is in the background in managing this relationship between a consumer and a company. And how does that evolve to self-service? Is it the consumer that’s able to manage that relationship in a customized way, or is it the company that’s able to take more control of the configuration of your resources?

Eilam: When was the last time you have a positive experience with one of the enterprises that you consume services from—your utility companies, your bank? We, as consumers, we live in the world of news events, we think in news events. And organizations, whether we like it or not, they think processes and channels of service. So that has created, by definition, a reality of friction. Now for many years, we’ve been applying a lot of manpower into the problem, but that has a limited potential. Today, with applying AI and putting it into the mix, there is an opportunity to serve consumers, regardless of the doorstep of where they actually interact with the organization—whether it’s the phone, chat, email, mobile, and social channels and so on and so forth—and applying a lot of AI, making sure that they get the right service.

Fuller: A lot of our listeners understand the basic idea of cloud. They hear about it a lot, but they’re not entirely clear as to what the significance of services moving into the cloud is, what it takes to make that migration. Is that a development that should be seen as positive, highly positive in terms of the integrity and the capability of AI and other provision systems, or is it just a way to minimize costs and maximize margins for the operator? Can you give us a little primer on cloud and how NICE thinks about it?

Eilam: Sure. And you’re right, the basic value proposition many years back of cloud was about the economics and about cost reduction and so on and so forth. But today there is much better understanding that the real valuable position of cloud is twofold. The first one is pace of innovation. And the second one, it’s the agility that it gives organizations. These are kind of the two real valuable positions, or two great enhancements, cloud offers to customers. And NICE as a company, we’re now a 30-year-old company. And up until five, six years ago, we offered all of our solutions in an on-premises fashion—meaning customers bought from us the solution, deployed it into our data centers, and consumed it. And every few years, it would come for us to the next version. There would be a project to upgrade to the next version. And basically, the innovation cycle was roughly once every year and a half or two years. The minute organizations buy from a company like NICE the solutions in the cloud—and today we all fill a much bigger portfolio in the cloud—first of all, their solution, the innovation, is updated on a weekly basis. So the innovation cycles are becoming weekly or monthly, and there is no effort involved from the organization as a viewpoint. That’s number one. The second, obviously the cost, they need to have less people involved in that, and they need to be less specialized in things that are not their core competency. And lastly, it makes it much easier for organizations to buy different solutions and be less of the system integrator in bringing things together. Actually, the responsibility lies today on us as the vendor, and we are no longer just the provider of the software. We are the provider of the full operation of the customer, allowing banks, utilities companies, insurance companies, to focus on their core competencies.

Fuller: And also, of course, reduces the barrier of entry to new innovators and entrepreneurial companies. Barak, you mentioned the shortages of data scientists, and something that we are obviously keenly interested in here at the Managing the Future of Work Project is the growing supply-demand imbalances in certain technical fields, the difficulties particularly companies that badly need talent in some of these very exciting areas, but aren’t specialists in the area, maybe don’t compete in an industry that has lots of appeal to young engineering graduates, or maybe in a location that isn’t as advantaged in terms of the population available to hire. How are you seeing that relative to NICE? What are you doing to try to ensure access to the relevant skills for the future? And when you talk perhaps to your customers about where are they going to get the type of talent that NICE has and needs to continue to get, what do you say to them about how to build their own capabilities and what that’s going to take?

Eilam: First of all, we are all experiencing a shortage of talent, a lot of different types of talent. Data scientists is one of them. There are few reasons for that. First of all, as you said, because of the cloud, because of the level of investment, there is a dramatic increase in new companies, new ideas—which is great, by the way, that it is coming into the market. The second thing is that everyone today is a tech company. You go into a bank, you go into a pizza franchise. They have, today, probably more developers than the people actually serving customers at the front of the shops. So there is much more competition on the talent. We’re a very global company, both because of the way we grew, but also because of many acquisitions that we have done in the past, and we have centers in several areas around the globe. So we can tap into a much broader pool of talent. Because of our size by now, we also take our share, and we are highly involved in helping young graduate and people that are in school. And we start to employ them earlier and train them earlier in their career. So that’s what we are facing today. But as I said, we see more people understand that this is the future. More countries, by the way, are investing in different programs—in academy, and some other places—to make sure that this shortage at some point will be addressed, but not right now. It’s about as a company, it’s about the valuable position that you offer those young employees or those new employees as they start their journey with your company.

Fuller: One thing that younger employees regularly talk about when we survey them as to what they’re looking for in an employer and how they judge between competing offers is, what companies are going to give them opportunities to get leadership opportunities earlier, to take a leading role in a project or with a product, and also what companies are going to offer them the most exciting learning path. You have an interesting life story. And so much as I remember, you actually, after you arrived at NICE, you continued to study and to expand your skills, and that equipped you to advance. How is NICE approaching that topic of growing its own, of reskilling and upskilling talent? And how much weight would you put on that versus playing the merchant market for skills?

Eilam: I started as young engineer and became the CEO of the company and had the privilege to grow my career in one company. I’ll tell you what is our approach to that. NICE is that kind of the sweet-spot company in the sense that it’s not a start-up, in the sense that it operates in so many different verticals and domains. So you can get into the company, build your career in the company and experience different dimensions, versus a relatively small start-up. At the same time, we’re not a Big Tech company that is very hard to navigate in. And it’s hard to understand for employees, how is what they are doing in the day to day have an impact on the success and the strategy of the company. Internally, I would all always prefer to promote people from the within—and indeed, actually 50 percent of our managers are people who built their career and were promoted from the within. And if you look at the higher ranks in the company, the more executive ranks, I don’t have the exact statistics, but I think it’s 80 percent of executives built their career within the company. So I’m a great believer in that. When I interview someone, I don’t interview them just for the upcoming job. I look at their potential to have at least two or three roles in the company, and I want them to join NICE, maybe not for life, but at least to build a career for a period of five to eight years.

Fuller: When we talk about talent pools that are historically underrepresented in high-tech firms like NICE, women have historically been underrepresented in management and leading technological roles. There’s been some response to that, but I know that, as the father of daughters, this is an interest of yours, a passion of yours. Could you talk a little bit about how you view diversity and inclusion in technology, and specifically NICE’s approach to try to create more avenues and more pathways for young women into technology?

Eilam: So you’re correct. You’re touching a topic that is close to my heart. Yes, of course, because I have two daughters, but as a CEO, I was sitting on those quarterly reviews with our HR for years. And I’ve been seeing the statistics about the difference between the amount of males, females were in the company staying quite steady between about 70, 30 in tech roles. And I started to ask myself, “Are we doing something wrong? Are we not being inclusive enough as a company?” So I took a group of a few leaders in the company, female leaders in the company, asked them, “Do you mind doing a quick study with me?” And we looked around, we looked around at other companies, we looked at different countries, and we realized that this reality, it’s a global reality almost across the board in tech. So we started to go back and understand what’s the source of the problem, because the pool, itself, is actually 70/30. So we went back, and our conclusion is that somewhere in middle school at the age of about 13, 14, that’s the age where we’re starting to see the difference between boys and girls, if you would like. So we opened a program in the company, we call it called “Coda,” which is a program that basically approaches girls, that we cooperate with schools at those ages where we have campuses, and we have people in the company that can train them. We bring them over to our campuses once a week on our expense in the afternoon hours. And we try to give them the passion about technology with teaching them some basic coding. And those are girls that said in the survey that they’re not planning to pursue computer science or something like that in high school. And we have this program running now for three years, and we are stepping into the fourth year, and the results are amazing. From zero percent of them saying that they’re going to take or pursue technology or engineering in high school, we got to 55 percent. By the time they’ll get to the workforce, it probably will take 10 years, but you need to solve problems at the source, and we always look for the long run. So I’m a great believer that this is the way to resolve it. And, of course, there are many other populations that you’ll find similar statistics. And I think similar programs focused on very specific population can help as well.

Fuller: I’m curious. When you did that research and found that it was in those middle school years, early high school years, when the young women were arcing away from a technology career, was there anything, any explanation you arrived at or causality as to why that was happening?

Eilam: There were a few. First of all, there is the issue of perception that we need to fight, that technology at that age, that technology is for boys and girls should go someplace else. I was shocked that it’s still out there, but it is still out there. The second thing is, it’s about a critical mass. If you are a young girl at that age, and you want to go and experience, even after our studying computer science or something like that, most likely the class you’ll enter will have the majority of boys. And you’ll be the minority in the class. And this is pretty frightening experience for a girl. So the environment we gave them is a female-only environment where they’re not going to be a small portion of the class or something like that until they gain enough confidence so they can select it as they go into high school.

Fuller: That’s interesting, because that parallels research that’s been done about the impact of single-gender education. It’s not just that girls and young women are more likely to excel at math and science in all-girl settings, but it’s that boys are more likely to participate in things like theater and poetry competitions in all-boys settings. So Barack, we’re talking, of course, in the mid-October, mid-fall of 2021, when we hope it isn’t a false dawn, that we’re beginning now to have companies revert, not to their old operating style, but to some next normal. Do you have any rules you’re beginning to derive from what you’re observing in the company as to what should that next normal look like?

Eilam: We have 7,500 employees around the globe—85 percent of them used to come to work every day, used to work from the office, had the processes, this is what they knew. And virtually or literally, actually, overnight, we are since March of 2020, until today, we’re still 100 percent remote. We have our offices, they are standing empty, no one visiting them. And we are working remotely, by the way, not just internally, also for our customers, we are managing to do 100 percent of what we’ve done before, remotely. It’s working well for us, but we need to remember a few things. Number one, 100 percent of the employees who moved to work from home knew each other and knew the company before that. We are now 18 months later, we have about 1,000 employees, new employees, in the company that never met their colleagues, managers, or had the experience of working together. That’s one thing that we need to remember. The other thing is that as we stepped into this journey, we knew what are our were plans for the upcoming year. And we are now into the, in the phase where it is less scripted, and there are changes versus a year and a half ago. So as we move forward, we believe, first of all, until it’s completely safe, we will continue to be 100 percent remote. We do offer employees from time to time to come to the office if they choose to do so, and if it’s safe for them, and they’re vaccinated. And most of them, by the way, they do come, a day a week or something like that. Generally—our thinking moving forward might change—is that we believe in the future of a hybrid model, meaning that employees will spend about half of the week working from home, half of the week working from the office. Their time in the office will be spent for ideation, collaboration; hence it’s important that teams will come together. It’s not just about individual work in the office, but will offer the flexibility. But based on the last 18 months, I can tell you these are our plans, and life is what’s happening to you when you are doing other plans, right?

Fuller: Barak, you employ people in how many countries?

Eilam: Almost 40 countries.

Fuller: One of the most recent trends—and it has been widely discussed—is this notion that companies are asking an employee that moves away from their original office to take a decrement in their salary. As a company that employs staff in 40 countries, so where there’ll be very different, what are called “purchasing power” measures in economics—so the ability, how far your dollar or your euro or your shekel goes in living in the United States, versus living in the Philippines, versus living in Israel, versus living in Ukraine—how are you thinking about that? And how do you think about this issue of, is the value in the unit of output or should people think about compensation through the lens of purchasing power? How are you sorting through that?

Eilam: We have about five big centers in Salt Lake City, in Atlanta, in Pune, in the Philippines, in Israel, in a few other places where we have hundreds of people in one location. And we prefer to hire them still in that proximity to the office in a hope that, sooner rather than later, we’ll be able to move into this hybrid mode. So we are not addressing the issue of yet of what happens as we will between them, needless to say, when we hire those people today, nothing to do with Covid, there are differences in salary. We are not, today if someone tells us they are moving away from current location to a different location, the issue is not the salary, the issue whether they can still do the job in the new location, given our plans for the hybrid mode. If location doesn’t matter, I can tap into, all of a sudden, different countries with much lower cost of living as you said, becoming much more attractive. And I can be a very strong employer in those lower-cost locations by actually offering premium salaries over there, that are still cheaper than higher cost location, like in the U.S. and other places.

Fuller: When you think about a world that could be permanently distance work, permanently dispersed, would that in your estimation require some additional significant developments in technology to support that outcome? Or would you think that’s a question about management systems and culture and the way work is structured today?

Eilam: It’s a very interesting topic and there are elements of technology over here, but there is also elements of cultures and value, and some other thing that needs to be managed in the company. On a technology side, I’ve been working remotely for the past 18 months, as well as all of our employees. And as I said, it’s working, but there is nothing when it comes to ideation and collaboration and SLAs [service level agreements]. The second thing is that, if you’re completely remote, how do you preserve the sense of belonging, the sense of loyalty, engagement? And this thing, I think, are a bit less on technology and much more about culture of a company and communication, and some other thing that I used to do by actually visiting our offices, and our local managers used to do. And you have much less of that these days.

Fuller: As you anticipate NICE’s future and your plans for it, what are the two or three things that can be your biggest challenges, do you think, and how are you preparing for those in anticipation of meeting them?

Eilam: So the challenges are typical execution challenges. And the two that I will say is, can we get—going back to what we said before—can we get to the point that we have enough talent in order to meet our execution goals? And the second thing is pace. The pace of execution.

Fuller: Well, those sounds like fundamental challenges of management and ones that managers have been experiencing probably since the time of the Phoenicians. So some things don’t change irrespective of the technology environment. Well, Barak Eilam, CEO of NICE, a leading AI firm in the area of customer service and customer support, thank you so much for joining us on the Managing the Future of Work podcast.

Eilam: Thank you very much for having me. It was a pleasure talking to you.

Fuller:We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.