Speaker 1: This is Bloomberg Markets with Gerrol Mazer and Grey Johnson
Speaker 1: on Bloomberg Radio. Well, this time to start thinking differently,
Speaker 1: and if you're not already doing so. Linda Burn Bernardi
Speaker 1: is chief executive officer of the consulting firm Stratera Partners
Speaker 1: from our IBM, chief innovation officer of Internet of Things
Speaker 1: in the Cloud, her book The Inversion Factor, How to
Speaker 1: Thrive in the IoT Economy, and she joins us on
Speaker 1: the phone from Seattle. Linda Bernardi, nice to have you
Speaker 1: here with us. UM. Tell us a little bit about
Speaker 1: this book and why you wrote it. Pleasure to be here,
Speaker 1: Thank you. Um. The Inversion Factor is really about the
Speaker 1: change in paradigm that's happening in all companies, in particular
Speaker 1: traditional companies where they used to develop products based on
Speaker 1: specifications or what the company thought they should delover developed
Speaker 1: and instead understanding consumers at such a level through artificial intelligence,
Speaker 1: machine learning deep learning. Know that companies can begin developing
Speaker 1: things based on the needs of the consumer and at
Speaker 1: times that could be completely different than developing the products
Speaker 1: in the traditional way. So I wrote The Inversion Factor
Speaker 1: to really begin this critical dialogue because we're used to
Speaker 1: companies like Uber and Airbnb from from the beginning being
Speaker 1: this way and operating this way. But we have thousands
Speaker 1: of companies that need to begin to shift their thinking
Speaker 1: to survive in the new world. So give me an
Speaker 1: example of someone who has shifted really nicely and someone
Speaker 1: who has not. Well, um, not to name names, but
Speaker 1: if you look at, for instance, a company like Microsoft.
Speaker 1: Microsoft was a very traditional software company that initially really
Speaker 1: didn't migrate to the cloud, and then they began to
Speaker 1: develop cloud services and maybe perhaps through the pressure of Amazon,
Speaker 1: began to shift radically and now very much operate in
Speaker 1: that zone. So when you think about Amazon to excuse me,
Speaker 1: Microsoft today, you think about them operating in that zone.
Speaker 1: Whereas there are a lot of companies and honestly, I
Speaker 1: really don't want to name names, but there are so
Speaker 1: many that are still developing products in that are that
Speaker 1: is exactly how they used to develop it before. One
Speaker 1: very clear example is think about Tesla versus the rest
Speaker 1: of the auto industry and think about how Tesla, every
Speaker 1: movement that you make in that car is continuously noted, understood,
Speaker 1: improved upon, and acted upon, to the point that the
Speaker 1: communication between Tesla and the car is happening without the
Speaker 1: driver needing to be involved. That's a radical shift than
Speaker 1: how pretty much the majority of the auto industry has operated.
Speaker 1: Another example, fair enough, fair enough, but some folks would argue,
Speaker 1: and there are a lot of people out there, certainly
Speaker 1: rooting for Elon Musk find it really interesting how he's
Speaker 1: disrupting kind of state industries and thinking differently and approaching
Speaker 1: things differently and how to do in his view certainly,
Speaker 1: how to do things maybe in a better way. Tesla
Speaker 1: has yet to make money, and we have yet to say.
Speaker 1: Anytime we talk about Tesla, there's always somebody who comes
Speaker 1: out and says, well, wait a minute, though, you know,
Speaker 1: we'll see if he can make a go at it
Speaker 1: and whether or not he can be successful. So that
Speaker 1: is true, that is true, right, But part of it
Speaker 1: is also because Tesla is a newer company, and um,
Speaker 1: I mean, is it making money. Yes, people are buying cars,
Speaker 1: but is it making money to to sort of go
Speaker 1: into black That remains to be seen. But in terms
Speaker 1: of how it has changed, it changed or inverted the
Speaker 1: auto business in terms of how we think about a car, right,
Speaker 1: and an inversion sometimes at the beginning you don't necessarily
Speaker 1: make money. If you think about Amazon or Google putting
Speaker 1: these boxes in your home, Echo or Google at home,
Speaker 1: you know, at the beginning those boxes aren't making money.
Speaker 1: But what they're doing is they're completely changing how business
Speaker 1: is going to take place. And eventually you're going to
Speaker 1: walk into your dining room and you're going to talk
Speaker 1: to a box. You're going to order everything that you need. Now,
Speaker 1: did that box at the beginning make money remains to
Speaker 1: be seen, but these are transformational ways thinking and changing businesses.
Speaker 1: Another maybe example is think about Airbnb and how it
Speaker 1: has grown versus, for instance, traditional hotels, brick and mortar hotels,
Speaker 1: and think about all the expenses and thinking that a
Speaker 1: Sheraton or a Weston has to go through versus the
Speaker 1: fact that every every day, every instant, people are putting
Speaker 1: properties or assets onto Airbnb, and it's allowing it to
Speaker 1: think very differently in terms of how it can serve
Speaker 1: the public. Ultimately, the experience is staying a night in
Speaker 1: a different bed. Right, used to be a hotel Airbnb? Right? No, no, no,
Speaker 1: and and right We've seen a lot of industries certainly disrupted.
Speaker 1: So I'm just thinking, if there is a business owner
Speaker 1: out there. Maybe they've got a small company, maybe they've
Speaker 1: got a middle market size company, maybe they've got a
Speaker 1: large company. I mean, so, how how do you like?
Speaker 1: What are your one or two three pieces of advice
Speaker 1: and kind of how to think differently? Right, So, first
Speaker 1: of all, our time won't permit to talk about the
Speaker 1: arc at texture and how all of that is changing.
Speaker 1: And that's all in the book. But in chapter nine
Speaker 1: we present a roadmap of eleven very specific steps that
Speaker 1: starts at the very beginning. The most important thing about
Speaker 1: a business owner medium, small, large is to think differently
Speaker 1: and have a vision about where they're going. And the
Speaker 1: second thing is to be able to take a risk.
Speaker 1: If they're not taking a risk, inversion is never going
Speaker 1: to happen because if you're just playing safely around the
Speaker 1: same borders, all you're doing is developing another version of
Speaker 1: the same product. And so through the steps that we offer,
Speaker 1: really thinking about the vision, strategically, thinking about how you're
Speaker 1: willing to take a risk, tolerate some level of failure,
Speaker 1: and allow yourself to open up new business opportunities. Then
Speaker 1: we take the business owner through a lot of the
Speaker 1: intricate steps afterwards in terms of how to go from
Speaker 1: not being an inverted company as in a traditional company
Speaker 1: into becoming a fully inverted company. Interesting, do you feel
Speaker 1: like a lot of the companies that have been around
Speaker 1: for decades, it's um the old household names. They've either
Speaker 1: you know that most of them are not doing that
Speaker 1: this yet or what Yeah, there is tremendous amount of
Speaker 1: risk aversion the larger the company is. I mean I
Speaker 1: was certainly at I d M, where it was close
Speaker 1: to over four hundred thousand people and a hundred year
Speaker 1: old history. Part of what makes to inversion difficult is
Speaker 1: because you have tens and thousands of customers that you're
Speaker 1: supporting in the old model. So the idea here isn't
Speaker 1: abandoned ship, throw everything away and jump in, but really
Speaker 1: begin to think about innovation more actively. And oftentimes big,
Speaker 1: traditional even successful companies think about innovation to acquisition. They
Speaker 1: didn't seem to think the only way I could do
Speaker 1: this is by buying another startup, right, because suddenly that
Speaker 1: culture is going to come in and really sort of
Speaker 1: infuse and create change. To truth is um. You know,
Speaker 1: inversion has three elements. There's innovation, there's technology, and then
Speaker 1: there's culture. If the culture of the company top down
Speaker 1: and bottom up, doesn't support wanting to invert. Right. It
Speaker 1: doesn't matter what technology come in, inversion will fail. So
Speaker 1: all right, It's an opportunity and necessity at the same
Speaker 1: time to think about inversion. Linda Bernardi, thank you so much,
Speaker 1: CEO at Stratera Partners, a consulting firm, on the phone
Speaker 1: in Seattle, her book The Inversion Factor, How to Thrive
Speaker 1: in the IoT Economy. Speaking of just the online economy,
Speaker 1: Carl's Jr. The chain formerly run by one time Trump
Speaker 1: Cabinet nominee Andy Pudster is um apparently reaching out to
Speaker 1: Amazon saying hey, please buy us. That's what they're doing.
Speaker 1: It's one of our most read stories at Bloomberg. You've
Speaker 1: been listening to Bloomberg Market's Carol Masster Corey Johnson right
Speaker 1: here on Bloomberg Radio.