Why Clarity Wins in an Age of AI Disruption

As organisations race to embrace AI, Francisco Salazar argues that technology alone is not enough. 

In conversation with Des Dearlove, he explores why successful transformation starts with clarity of purpose, how business design helps organisations adapt to disruption, and why human-centred leadership remains the ultimate differentiator in an increasingly AI-enabled world. 

Transcript:

Des Dearlove:

How do you define business design today and why is it becoming such a critical capability for organizations navigating disruption?

Francisco Salazar:

Well, I think business design is integral to dealing with disruption. This is about, at the end of the day, adapting your strategic choices to the capabilities you need and what type of organizational makeup you have to put together, particularly around the operating model. If you don’t do that right, you’re not going to be able to execute in your strategy.

Des Dearlove:

Now you’ve overseen some large-scale transformation programs across different industries. What patterns have you observed that separate successful transformations from ones that stall or even fail?

Francisco Salazar:

The first thing is clarity of objectives. Many times transformations become kind of a buzzword of just doing things differently instead of actually focusing on what is your objective function, what are you really trying to optimize? And by that, then we can actually apply the other lesson, which is really focusing on continuous business adoption, if you will, of the different things they are doing. Everybody will call it change management. We call it adoption, but it’s really about people changing their behaviors towards what we’re trying to optimize.

Des Dearlove:

I’m thinking of the AI transformations going on at the moment. Is it more of the same or is that fundamentally different?

Francisco Salazar:

I wouldn’t call it more of the same. You can never say more of the same with AI and generative AI, because we know where this started, we don’t know where it’s going to end. But it’s a disruption. It’s changing what we do. And certainly having clarity about what you’re using AI for and how you’re applying it in a way that actually sticks into the organization, is really important.

Des Dearlove:

Do you find that organizations have that clarity? It feels like… sprinting into the fog, was an expression that I heard. That suggests that perhaps we know we need to move fast, but we don’t really know where we’re going with it.

Francisco Salazar:

The question about AI is that we’ve seen a lot of people testing it and nibbling at it with the famous use cases, let me see what it can do for me. I think we’ve passed that. I think right now it’s really about understanding which pieces of your organization you want to enable with AI and what is it for, what is the final business result you want? And not just experiment, but really start to apply it at scale.

Des Dearlove:

Do you find organizations are able to do that or is there still some hesitation?

Francisco Salazar:

Not really yet. I think what we see is a lot of people are still very tentative about where they want to do it. Now, at the end of the day, this is a large capital decision you make, and with big capital decisions you have to actually go through and understand what you want to do, but it’s going to be a portfolio. We’re going to have to have different pieces around a portfolio of late mature things that you can actually apply, some more efficiency moves. At the same time there’s the opportunity of, I’m going to call them innovation moves, and moves in which you can speed certain things you can do before in a much better way.

Des Dearlove:

Is it possible to get an example of some of those?

Francisco Salazar:

For example, when you talk about efficiency, let’s talk about back office and let’s talk about finance. In that space there’s a series of opportunities of applying not only AI but agents themselves as a substitute labor for an agent. Now if you go to innovation, for example, in the pharma space, the ability to actually put AI towards research in a way that you didn’t before is going to speed the ability to get to solutions that you didn’t before. That for me, are the typical examples in which you see the extremes and efficiency move and an effectiveness move, if you will.

Des Dearlove:

How can regenerative business models, those that restore and renew rather than simply extract, reshape the way organizations think about growth and long-term value creation?

Francisco Salazar:

Regeneration for me is a broad word. I think it applies very well to the topics around sustainability and how we can create a regenerative space to continue to grow by actually not exhausting the resources we have. But I think more broadly, it’s also about how do we adapt to an ever-changing environment, ever-changing world in which clock speed today is so much faster than it was before. You have to build an organization that is able to continuously adapt to that. For me, regeneration is about that now, regeneration with a purpose. I think having an objective towards where you’re going is really important. If not, you’re just changing for the sake of changing, which is not really very effective.

Des Dearlove:

Regeneration applies not just to new business models, but also new forms of leadership. How do you see regenerative principles influencing the way leaders design organizations, mobilize talent, and balance performance with what you were just talking about – with purpose?

Francisco Salazar:

A layered question! There’s a lot there. I’m going to try to unpack it. First, I’m always of the belief that leaders have to be acting leaders. Leaders that actually are there, not sitting away putting some fancy vision and then expecting the organization to do it. For me, the principles of regeneration apply very much to leadership about how you are continuously engaging with the organization about where do you want the organization to go and why we’re going where we’re going. It goes back to the purpose thing. In terms of the organization itself you cannot build rigid organizations. You’re going to have to build organizations that allow for some wiggle room, if you will, of actually how to adapt to continuously changing environments.

Des Dearlove:

And the human side of this, obviously we’re all doubling down on the technology. How do you balance that? How do you keep the human bit? How do you manage the human?

Francisco Salazar:

The human is central to this. In our business at Deloitte, we have a lot of assets and a lot of different tools and methods, but it’s really about the human being at the center of what we do. Actually having a human that is enabled by AI in the right way is really going to be important. So the ability that us as humans have to really leverage the technology in the right way. AI is a new technology. It changes different things. It’s a big disruption, don’t get me wrong, but we’ve had other disruptions in the past and we have adapted to those disruptions, incorporating that clearly into what we do and how we do it.

Des Dearlove:

From your early career at World Bank to leadership roles at Monitor Group and now Deloitte, what leadership lessons have you seen, practiced, the ones that have stayed with you, what would you pull out?

Francisco Salazar:

I joke a little bit that a good leader for me is a student athlete. It’s like you have to study and you have to be there. I’m very much a believer of being a present leader. I think the leaders that are present, that are constantly there, that are reinforcing the message, that are there when things are bad, not only there when things are good, is really the difference in my whole career and what I’ve seen in the dozens of clients I’ve worked over my career. I think it’s really important now in this time to remind our leaders that they have to lean in. It’s not about letting things percolate and happen. It’s about the responsibility they have to provide the vision, to provide the guidance, and to provide the pause, if you will, to sometimes just breathe and kind of figure things out as they happen. Not trying to rush towards solutions that sometimes may not be the right ones.

Des Dearlove:

Applying that, sort of, in the mirror, let’s talk about the future of consulting, because obviously we are in this brave new world. How do you see the role of – particularly strategy consultants – evolving in an era of AI, digital transformation, and really a more complex mesh of stakeholder expectations?

Francisco Salazar:

You mentioned three things that I’m going to pick on in that phrase because they’re really interesting. First of all, one of my favorite authors, Aldous Huxley, you just mentioned there with Brave New World; the guy got it 100 years ago, and it’s a little crazy. The second thing, if I knew the answer to the question, I’d probably be sitting on a beach right now, on an island that would be mine. I don’t know the answer because we’re all trying to figure it out, but I think we do know certain things. What we do know is that we have an opportunity to reinvent ourselves as a practice, not only consulting, which is more broadly, and there’s a lot of things there, but certainly as a strategy consultant.

A strategy consultant, at the end of the day, it’s about someone that can bring the right level of dialogue with the C-suite, understand the portfolio implications of the choices you make, and is able to really architect enterprise transformations that actually drive what we need to do. That’s what we try to do at Monitor Deloitte. That’s what we push for. Being part of the Deloitte family allows us to do things that really can help speed up transformations and make them stick in a way that in other situations is harder. But I do think that we are first… and I say that to the practice every single day, we have to disrupt ourselves before somebody disrupts us.

Des Dearlove:

Do you think this is a game changer or a whole new game? Is it a disruptive technology or is it a paradigm change for business?

Francisco Salazar:

Wow. I am going to say, just because I’ve been through too many changes over my career, that I think it’s a disruptor, not a paradigm change. Because I do think that at the center of what we do, still is a human being. The human being is still going to have the opportunity to interact with others, to actually enable change in a nice way. Now the future, who knows? We may end up in a Terminator world where the machines dominate us. I hope it doesn’t go that way. I don’t believe in that. I’m a glass half full kind of guy.

I do think that we have a tremendous opportunity of using AI to really transform things that we did, either inefficiently or too similar to others in a differentiated way. Because the interesting thing about best practices and about AI now… I hear people go “oh, I can go online and do ChatGPT and I have a perfect strategy. For me, I don’t need a strategy… “ Well, you have a perfect, average, mediocre comparison of what other people are doing. As far as I know, that is not a differentiated strategy. That’s just a me-too strategy. Normally, me-too strategies fail.

Des Dearlove:

Now, I know Deloitte takes a lot of interest in the next generation of leadership as well. What advice would you have for emerging leaders? What capabilities do you believe will be most essential for this next generation of leaders if they’re going to thrive in the next 10 years?

Francisco Salazar:

The funny thing about it is it’s analog for me. The AI, the digitization, the speed is all there. Embrace it, learn it, understand how to use it. You don’t need to do it, but you understand how to use it. But there’s two things for me. One is embrace change, embrace, don’t run away from change. Change is going to chase you really, really damn quickly if you don’t embrace it. Second, the funny thing about our business, and I think executives in general, is be effective in the way you communicate. People are very ineffective in the way they communicate. It’s surprising to see that in scenarios and I think we under-invest in that, a little bit of the side of… what are the important things – clarity is critical to what you do. I tell that to our practitioners all the time.

Des Dearlove:

Surely by now we realize how important communication is; clarity, encouragement and all of those things. But what does that actually look like? 

Francisco Salazar:

The first thing is leaders sometimes do not communicate very clearly. It’s a very simple principle. Let’s go back to the classic pyramid principle of communication. First of all, what are you trying to portray and what are you asking your people to do? Sometimes it gets lost in translation. It’s like too many frameworks, too many ifs and buts, too many flowers. I just want to know what you really want me to do.

Des Dearlove:

Because I’ve encountered both, is the problem there the communication or the lack of clarity?

Francisco Salazar:

It’s both. Because the funny thing is I always try to keep our teams and our clients clear about what they’re trying to do. I’ll go back to something I mentioned a little earlier, which I’m going to call it in econometrics term, an objective function. What are you trying to optimize? What are you trying to move? What are your main goals or objectives that you want your organization to be focused on? And that applies to everything. Not only commercial organizations, it applies to governments, applies to NGOs, anything. What are we really trying…? Because if not the organization is going to go in circles. You’re going to create a lot of vapor, a lot of heat, but not a lot of motion, not a lot of energy. That is critical. And it’s surprising to me, by the way, in the biggest organizations, I’ve had the privilege to work in the biggest organizations on the planet, they still don’t do it very well. And there’s a lot of interpretation. Interpretation leads to inefficiency.

Des Dearlove:

Final question. As you say, you’ve seen a lot of organizations up close. What is the one message that you would want a young emerging leader to take away from this conversation? What is the one message you would like to pass down to the next generation?

Francisco Salazar:

There’s a world of opportunities. The future is about the opportunities that are there. Don’t get distracted with the barriers that exist because I think we can do a lot with what we have in front of us. We can solve a lot of the problems we haven’t been able to solve by actually applying some of the things we have in front of us right now.

Des Dearlove:

Francisco, thank you very much.

Francisco Salazar:

Well, thank you for having me, Des.