Lars Schmidt: Leaders Should Experiment with AI Weekly

HR thought leader Lars Schmidt shares how HR can lead business transformation, foster innovation, and reap the opportunities of an AI-driven world of work.
lars-schmidt-leaders-experiment-ai-weekly
Daan van Rossum
Daan van Rossum
Founder & CEO, FlexOS
I founded FlexOS because I believe in a happier future of work. I write and host "Future Work," I'm a 2024 LinkedIn Top Voice, and was featured in the NYT, HBR, Economist, CNBC, Insider, and FastCo.
May 14, 2024
15
min read

🎧 Listen Now:

In today’s episode, we explore how HR can be a powerhouse for business transformation in the age of AI and remote work. 

We're joined by Lars Schmidt, who shares his journey of 25 years, from operator to one of the most influential thought leaders in the industry. 

We delve into how HR is not just a support function but a critical driver of business strategy, especially in times of AI, and what leaders in HR and across the organization can do to future-proof themselves and their teams. 

Here are some actionable takeaways to implement in your roles and organizations:

1. Get close to the business

Lars emphasizes how HR should be close to the business, something Anthony Onesto also sent a previous episode. He named Spotify, who is CHRO has created a context in which AR is a natural partner for all important decisions made in the business. Look at this on an individual and organization level. Make sure you truly understand the business - the most successful CHROs have spent time outside of HR. And be curious!

2. Regular Engagement with AI Tools

Encourage your HR team and employees to engage with AI tools on a weekly basis. This practice helps integrate new technologies seamlessly into daily operations, enhancing productivity and decision-making.

3. Emphasize Skills Development

Focus on continuous learning and skills development within your teams. Most skills will expire i. 2.5 years. With the rapid pace of change in job requirements, fostering a culture of growth and adaptability is crucial.

4. Foster Talent Mobility

Implement strategies that support talent mobility within the organization. This approach not only prepares your workforce for future needs but also helps in retaining top talent by providing them with new challenges and growth opportunities.

5. Promote Self-Learning

While we’re all stressed and burnt out, Lars agrees that we’re with the vanguard of a new world of work. Hr is leading that change. Encourage your HR professionals to be proactive in their personal and professional development. Staying curious and informed about industry trends and new tools can make them more effective and forward-thinking in their roles.

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You can find the full episode and transcript here:

Transcript:

Daan van Rossum: My first question is probably the most important one, which is that you're currently with Amplify on this really important mission to elevate HR within organizations. But you've been in organizations yourself in various roles.

And what have you learned along the way that you're now really bringing to the community with Amplify? 

Lars Schmidt: Wow. I mean, I've been doing this for a while. So I'm a little over 25 years at this point. So the first 15 years of that was in-house. So I was in an operator role, running global recruiting and talent teams. And then the last 10 years has been more of an entrepreneurial role, building communities and doing consulting and advisory work and search. 

So over those years, I've accumulated a lot of experience. And I kind of had this interesting perch on the industry where I'm not inside now, like I'm an entrepreneur on the outside of the industry. I'm not in an operator role today. But because I have different editorial channels with the Redefining Work podcast and some editorial columns I have for Fast Company and books, I have this really unique kind of lens into what it is to be an operator today and how that has changed and how that's continuing to evolve.

And so it's this really unique mix of kind of direct hands-on experience, but also peripheral, hands-off, but very deeply connected to perspective.

Daan van Rossum: Where do you think specifically HR stands in 2024? So we all know there's a couple of megatrends and obviously you're talking about it on your podcast and in your newsletter. Maybe both from people looking at HR from the outside and also from within HR, what are you hearing from the community in terms of what are their biggest challenges, maybe misconceptions that people still have about HR?

Lars Schmidt: Yeah. I think the biggest misconception about HR is that it's a monolithic function. So people tend to paint HR with a brush that HR is this or HR is that. And those things may be true, but HR is also this and that on the other end of the spectrum. And so I view the field as a spectrum and the way that we approach our work at the leading edge of the spectrum is very different than the way that we approach the work at the other end of the spectrum, that kind of more personnel, transactional mindset. So I think that's the biggest misconception of the field.

I think in terms of the kind of mind of practitioners today, people are tired, people are burned out, and people are stressed. We've seen obviously this economic condition that we've been navigating globally over the last 18 months has certainly taken its toll on our field pretty extensively. And so there's many people who have been put out in the job market.

There's other people who are fortunate to have their jobs, but now are asked to maybe do more with less as their teams have been cut. But the expectations of what they'll deliver haven't necessarily, nor the budgets may be contracting as well. So it is a difficult time, I think, to practice, to do this work in the environment that we're in today.

But I also think there's an element of this and I'm an optimist and also I'm not in the operator seat. So it's easier for me to have this perspective and I'll own that. But I think that we're also at the kind of vanguard of so much change in work itself, not just HR or people or talent or however you view the function, but work itself, the very nature of work.

And we are driving that change. We're at the leading edge of that change. And so there's a variety of things happening, whether it's generative AI, whether it's skills, whether I mean, so many things I'm sure we'll get into in the conversation, but we are the architects navigating our businesses through all of that.

And that's pretty exciting for the field. But yeah, I mean, the last four to five years, really since COVID have been a pretty just turbulent time for us because it was just thrust into one massive, seismic change and shift after another, after another, from geopolitical conflict to remote work, to war, to political instability, to AI. I mean, to the layoffs and the economics we've seen, the economy over the last two years.

So we've been through a lot as an industry and we continue to be, but I think there is, while it's a challenging time, there is still room for optimism. And I hope we hold on to that.

Daan van Rossum: Yeah, definitely. Where do you feel when you're speaking to your community, when you're interviewing people, when you're consulting, where do you feel people stand on that? So we're tired, we're worn out, and then we have all these mega trends coming to us and we have to change again.

How do you feel people are approaching that?

Lars Schmidt: I think they're doing their best, I mean, I think that there are some days where you're trying to keep your head above water. I think that there's some days like, again, because I'm not in that operator's seat, I will own that it's easier for me to be optimistic about that future.

I think for practitioners who are juggling 12 plus hour days at times, it may be a little harder for them to do that. But I think that when you look at the opportunity for us as a field, we're coming out of the last four years, particularly since COVID, HR has demonstrated that it is a business function, that is a business driving and enabling bottom line driving function. And we weren't always viewed at that.

And to be fair, there are some areas where we're still not viewed as that. But I think if you look again, at like those best in class people teams, that is how the business views them. And that is, in some companies, a shift, I think, from what those perceptions were in the past.

Daan van Rossum: Do you have some companies that you're looking at, particularly that you feel are doing that really well in terms of really HR people teams being at the center of the business?

Lars Schmidt: I always point to Spotify as an example of organization that really does that. Netflix as well. I spend a lot of time in tech.

So my answer to Robin would be a bit biased from a tech standpoint. But I think it's companies that you can look at their CHRO and how tightly they're aligned in the business. And then in some cases, they're actually coming from the business.

They're really looking at the talent strategy and the people strategy as first and foremost, from a first principle standpoint, how is this helping the business achieve its goals? And everything trickles back from that. So I think that the way that they view the work, the way they prioritize programs and projects, the way that they are pulled into every meeting, they're not having to ask to get into some of those strategic meetings.

Those meetings don't start without them, because they know that they need that perspective. And they value that CPO or CHRO's perspective. I think that those are the organizations that stand out to me.

But Spotify as a company, I just, Katarina Berg, their CHRO, I admire her approach to leadership. I admire her authenticity and also her passion for building in public, which is something that personally resonates with me just as somebody who's been a big advocate for open source.

Daan van Rossum: It's such a nice thing to hear that there are those companies out there where HR is sitting very close to the business. We've heard now a few times on this season alone, from Josh Bersin, from Anthony Onesto, that HR really needs to be a business function. Obviously, there's still a lot of other companies where that's not the case.

So let's say that someone is in a company where that's not quite the case yet. What are some steps that you would say those people can take to become more like a Spotify? What are some principles that they could uphold to be more like them and to be closer to the business? Which is where, like you said, then they're getting invited into the room, then they're getting invited into the meetings.

Lars Schmidt: I mean, look, there's a couple layers to that. There's an individual layer as what can a CPO or a CHRO do?

There's also a business layer that's often dictated by the CEO or the founder or the executive team and how they want to leverage HR. And those two things have to be in harmony. You take, again, I reference Katarina Berg as the model of a CHRO.

You put her in an environment where the CEO devalues the function, doesn't see the value, then she wouldn't be successful in an environment like that. So those two things, there has to be a bit of a harmony there. I think specifically to your question, for a people leader who wants to have that kind of relationship, the first thing is really making sure that you understand the business.

Spend time in the business. When you kind of look across some of the top CPOs and CHROs out there, one unique thing that you're seeing is that a lot of them have spent time outside of HR at some point in their career. And so I think particularly if you're watching this and that is your aspiration to be a CPO and CHRO and you get an opportunity to do a rotational duty inside the business, take that.

Because that experience will actually be really helpful for you. You'll become a customer of HR. So it'll give you a different empathy for what the people you support are experiencing.

But also you'll get to understand the business in some interesting ways. And so I think really focusing on, to me, the head of HR role is one of the most difficult in the C-suite. Because you have to have a mastery of your own domain, but you really have to understand your peers domains with some real depth.

And that's not necessarily unique to the CPO, but certainly you can't be successful without it. So that piece is there. And then the last thing I would add, which is more of an innate trait, is being curious.

Really I’m wanting to understand, asking questions, understanding how the business operates, and understanding what the different levers are that the business can pull in different times to be successful. And obviously some of those things are people related. Some of those things are not.

But you have to ideally have that holistic understanding of, okay, here are the levers we can pull. And this one is in sales, and this one is in IT, this one is in people. And be able to really come back and make recommendations to your C-suite peers based on that holistic understanding.

Daan van Rossum: That's probably getting more difficult by the day as well. As you said at the beginning, that work itself is changing. If we look at things like generative AI, the way that people work, whether it's in a sales function, a marketing function, in an engineering function, is going to be very, very different.

All the domains individually are figuring out what that's going to look like. That also makes it pretty hard for the people team to then understand what is happening in all those domains. So what are some ways that people can start to catch up or at least get a sense of what's happening out there because it is a lot of change?

Lars Schmidt: Yeah. I mean, you mentioned generative AI. I will apply that to our world as well, right?

Certainly, if you're a people leader, but I think frankly, if you're in any role in HR, you need to be experimenting with generative AI on a weekly basis. Because what it does is it allows you to get that understanding of, I view it as a co-pilot. And Scott Galloway famously said, AI won't take your jobs, humans using AI will.

I do think that that is very relevant because I think it gives you such an advantage if you really understand how to use these tools. And so I think what is also interesting, you kind of mentioned finance and engineering and development, we're starting to see more, I think, as generative AI continues to mature and continues to kind of begin to absorb more areas of the business. So when I say absorb, I don't mean fully take the place of humans, but augment humans in some really tangible ways.

A lot of that work is going to be on what we call a “hard skills,” Coding, design, video production, QA support, those types of things that are considered hard skills. It's not going to be doing a lot of things that we consider soft skills.

And I think for our function that is an area where in many cases we excel, that I think we'll have the opportunity to lean into, particularly as we're building these new future workforces that are a mix of man and machine, if you will, in terms of the composition of the organizations.

Daan van Rossum: I think LinkedIn that you're also affiliated with, they have done some research around how actually the soft skills are becoming more important in the future, not less important, right? So actually the human parts are becoming more important.

And so you see a role there for people, teams and for HR teams to support people in that. Because things that are going to change a lot also include something like L&D. Again, like having to understand that every job function, every team, how AI is going to change, obviously it's going to change a lot about L&D as well.

So you're doing a lot of things to support people to level up and to get ahead and to find new roles. So can you share maybe a little bit about what your empire looks like today? Because it's getting more and more impressive by the week, I would say.

What does it look like today and how are you supporting people on that journey?

Lars Schmidt: Empire is a strange word. I tend to use ecosystem, because to me I think that's kind of what we've been building.

So I've been doing this for 10 years within Amplify. So the first five years are really focused on strategic consulting. The last five years have been focused on a mix of HR executive search, which is one kind of branch of Amplify.

Leadership development, so kind of developing and connecting the next generation of chief people officers, which is the other kind of core element of the business. And then a media element, wrapped around that. And so that is the Redefining Work podcast, infrequently published newsletter on Substack, my Fast Company column, conference talks, those kind of things.

So that's really kind of the ecosystem of Amplify today.

Daan van Rossum: All of that gives you such a unique view. You're a little bit insider, a little bit outsider. And then we know that through media, you're forced to think about how to articulate what you're seeing in the markets.

So what are some changes that you now have to make in terms of the world of work is changing, and maybe the demands for the people that you're doing executive search for or training for are changing? What are some things you're doing to evolve your offering as well?

Lars Schmidt: As you mentioned, I have a unique kind of lens on the field because of all of the different elements of the ecosystem. And that gives me a pretty good read on where things are heading and future trends. And when I say future trends, I will never call myself a futurist.

There's people much smarter than I am who have earned that title, and I will not use that title. But I think that I'm good at connecting the dots. And I'm good at identifying trends that we have to start planning for before they're here fully.

When I think about the trends that we're having to now begin to prepare for, AI is certainly one of them. I think talent fluidity and mobility is another. People aren't looking to work for your company for five years or 10 years, and employers aren't making those guarantees anymore.

I think we're moving towards more of a just general kind of free agent tour of duty to quote Reid Hoffman's view on the employer-employee relationship. So I think that's a big shift. And then I think skills as well.

And that's compounded by AI. It's compounded also by talent mobility and fluidity. So we have to be better at skilling and reskilling and upskilling and identifying what skills we have and what skills we need.

So to me, those are three big kind of meta-trends that are happening in the industry that we have to start preparing for. So I think when I think about the search business and the type of CPOs that we look for, when I think about how we're developing and supporting the Amplify Talent community members to be ready for that environment, how we're developing content as well, it's with an eye towards some of those big forward-looking trends and trying to make sure they're prepared. Our mission at Amplify is to build a better world of work by elevating the field of HR.

And so for me, for us to do that, if that is truly what drives me, it's important for me to kind of understand there is no such thing as future-proof anymore. But how are we more future-resilient? And I think that's where I try to find ways to add value.

Daan van Rossum: You got to stay extremely agile so that no matter what the future brings, you're ready for it. 

One of those mega-trends you mentioned is around skills. So maybe you can share a little bit more about what that looks like, maybe for people who are not so familiar with it yet. What the shift towards skills-based work looks like, and again, how can we prepare for that? Maybe as an HR, okay, what about as a team leader, as a people leader? What about as an individual in the workforce right now?

What does the shift look like and how can we all prepare for it?

Lars Schmidt: Skills has kind of been a buzzword in this space for a while. We've been talking about it for a while, but I think what is shifting is the way that we think about, I think the average skill shelf-life right now is 2.8 years. And again, I'm sure there's data that's kind of prevailing data.

I'm sure that there's data that may make that longer or shorter, but it is shrinking. That is universally kind of understood.

Daan van Rossum: That means like a certain skill you possess, it evaporates over time?

Lars Schmidt: Yeah, it does. And so I think if we're not creating environments specifically within the people function, we're not thinking about our strategy from a talent, mobility, and development standpoint, how we're identifying future skills, how we're identifying those skills that are expiring, how we're kind of identifying skills in people in different teams from a talent mobility standpoint. And so I think that becomes something that is a key part of what our role will be in HR as kind of both identifying what skills the business needs.

And so again, that sounds easy. It's not necessarily easy. We have hiring managers who are used to hiring what I call fully bait candidates.

So they're looking for a role and they have this probably poorly written, overly dense job description that they used the last time they hired that person. And they're dusting that off and saying, we need this. 

That's not necessarily going to be the answer. We have to be better at being able to hire people that are maybe 70% of the way there, but have room to grow and room to expand and have a hunger and a passion to do that than hiring people who are 90% or 100% there. And sure, they could do that role, but they're not going to be challenged or not going to be engaged. And they're probably not going to be sticking around that long.

And so I think it reframes the way that we have to think about how we build the talent function within organizations, how we understand the skills, how we map skills, how we build skills taxonomies. You mentioned Josh Bersin. He's done a lot of work in this space.

And so I think that it's reframing how we think about that. And as bullish as I am on skills, particularly when we talk about hard skills and soft skills with generative AI, I think skills, broadly speaking, are something that we also just need to be, this is not going to happen next year. There's a generational mindset, especially in hiring, how we think about hiring.

The way we hire, other than being digital now, really hasn't evolved much in 20, 30 years. Shifting to skills first, that's a radical change compared to how we've always done things.

Daan van Rossum: Yeah, definitely. I was speaking to Ashutosh Garg from the founder of Eightfold, and he talked about this transition from really focused on roles and saying that, I currently have a junior marketer in my team. I'm going to hire a new junior marketer and kind of have a feel for what that looks like.

And maybe I just replicate that old job description. And then he said a lot of bias creeps in there. That's just one of the pitfalls.

A lot of trying to fill this hole with someone. And he said that if you break it down to the skills level, and you really rethink what is really needed for this role, and just because the last person did it in this way, doesn't mean that that's what you want for the future. So it means that even at that level, people need to think very differently, which again, on an individual level as a team leader or as a people leader, I wouldn't really know that.

So is HR going to be the driving function to also reset that kind of mindset to make that shift? How are they going to enable that? Because again, you may have people who have done this for decades in this way.

Lars Schmidt: I think HR could be a driving force in it. I think HR can own it. I don't think HR can by itself set that agenda.

I think that's going to be a struggle, because you're having to unwire deeply wired behavior. And again, I think when you look at those best in class HR teams, one of the shifts I talked about in my last book, Redefining HR, was one of the contrasts between legacy HR and modern HR is moving from legacy HR had more of a command and control structure. They viewed control as a pathway to power.

So they want to be involved in all processes. There was a view that that is what got them more clout within the business and more power. And the opposite happened.

It pissed people off. It was overly bureaucratic. Nobody liked it.

It's part of the reasons why I think HR had the reputation they did. I think when you look at best in class HR teams today, they don't embrace that. They've gone the opposite way.

It's about decentralizing and empowering. It's about creating some frameworks and some guidance, but pushing that out to the business to run and manage. Again, I think we can create the frameworks for that.

But it can't be, HR is making me do this and HR is making us say that. It has to be championed from the top down, I think, to be successful. Because then it's just another thing that we're trying to force upon employees.

Particularly in a situation like this, we talk about fully bait candidates versus potential and skills. We're working against deeply hardwired, long held beliefs on what hiring is and how it should be done.

Daan van Rossum: Yeah, definitely. Obviously, that's where people are so used to doing it in a certain way. They will also question why suddenly it doesn't work anymore.

Because maybe they're so close to that research, they maybe haven't seen the data. One of the things that Anthony also mentioned in that interview was that if you would come with data as HR, and you say that, look, we've proven now that this way of hiring works better, then maybe you have a shot. But if you don't do it, and if you just say, well, trust me, or I read this report here or there, then it may not be that compelling.

So it sounds like HR in that sense also has to shift quite a lot from that kind of command and control structure, as you mentioned, to more of a, look, we have the research, we have the data, we have the frameworks, but it needs to definitely go beyond HR. It's really about the company's DNA. And how do you run a company, which again, goes back to the CEO, it goes back to kind of like getting closer to the business, where companies like Spotify may do that quite natively.

Lars Schmidt: Yeah.

Daan van Rossum: Very curious that about the upcoming years. AI obviously is going to be making a huge impact, not only in the business, but also in HR itself. How are you looking at some of these new platforms, like maybe Eightfold, I interviewed Barb Hyman from Sapia, AI recruiting these kind of platforms, how are you looking at that?

What are you also hearing from your community in terms of are people ready to embrace those kind of platforms to really dig into it? Or is there still some skepticism around that as well?

Lars Schmidt: Yeah, first, like, I think there's definitely interest, there's curiosity, there's skepticism as well. I think there's so much hype around AI now that it's like, everybody is talking about how they have this like magical AI solution to whatever ails you. It's like the healer. AI is the healer, like whatever it is you have a problem with, we're gonna put some AI on that, that's gonna take all your pain away.

We know that's not the reality. There's a lot of challenges with AI. We're in the early days still of this new kind of generative AI driven wave of AI.

But I think that there is general curiosity. There's excitement about the potential, but also some nervousness and uncertainty. So I think the speed at which this is rolling out, given the backdrop that the field is in that we kind of discussed, that also kind of makes it hard, because, again, the trends around generative AI are so buzzworthy, you're hearing so much about them in the news, your CEO is reading articles about them in HBR, Fast Company, wherever else, and they're, hey, where are we using?

So it's like, they're getting downward pressure, they're getting upward pressure. There are some real great use cases for these tools. But many of them are not super, meaning kind of CHOs and CPOs, unless they have teams that can support them, they may not be individually super fluent in kind of how and where to use these tools.

So that's kind of, I think, how they're responding. I think in terms of my thoughts on these tools, I think there's tons of potential in them. I think depending on the tool, like something like Eightfold, I think is super powerful, but you obviously need a certain data set for that to be helpful.

If you're a startup or a smaller company, you're not necessarily going to have the data to model the LLMs on.

Daan van Rossum: Or the budget.

Lars Schmidt: Yeah, or the budget, right. That's a good point. 

So I think for larger enterprise organizations, that's a tool that makes a lot of sense. And just to disclose too, I am on their advisory board. So I was disclosed if I talk about a company that I'm on advisory board for.

But I joined years ago because I was bullish on, even then, before we hit this wave of generative AI. I think other tools that are coming up are interesting. What I'm really most interested in, I'm certainly interested in those tools at the enterprise level.

I'm particularly interested in the tools at an individual level. I think to me, AI is not new. Generative AI is not new.

What is new, since ChatGPT's release in November 2022, is the consumer grade applications for these tools. And so I'm excited about the ability for every individual. I had Guy Kawasaki on my podcast a couple of weeks back.

Obviously, he's been creating content and writing books and writing blog posts for decades. He took all of his content and loaded it into a custom LLM that he's calling KawasakiGPT. And he's like, if people ask me to write a forward for their book or give me a quote on something else, maybe I'm not feeling it at that moment.

I can plug that command into this. And it's going to give a response. People come to me for advice on technology. I'll plug that into here. And he's like, it's amazing the quality of the output. And so again, I just think there's so many creative use cases for individuals to be able to leverage these tools.

I'm actually, at this stage, because I think we're still in the early stages of the maturity model of where we're going to use these in enterprise HR tech. I'm more bullish on and curious about and personally experimenting with how we can use these on an individual basis.

Daan van Rossum: That's what you see in a case like Moderna. They just released this kind of report on how their partnership with OpenAI, how it actually rolled out.

They said that it's really not about Moderna thinking about how do we invent the next medicine with AI? It's actually just making everyone on the team x10% more productive and more effective, and they made it a mandate that everyone uses ChatGPT.

The CEO said, you know, people should not use it less than 20 times per day. They created 250 custom GPTs and through that, made huge impacts in terms of like how efficient that they work, without doing any like huge enterprise platform, it was really just about getting people individually to use the technology and that's a much easier place to start than making a huge bet on big platform. So, I definitely like that perspective.

We've come to the end of the time, so I just want to ask one final question, which is the same one for everyone, which is your wish for the future of work. 

Lars Schmidt: My wish for the future of work, I wrote a blog post on this late last year, but I wish that specifically within the HR side, that we were better at becoming more selfish about our own development as practitioners. I think that this, we're in such a volatile space, we're in such a dynamic and rapidly changing place, that the demands of our work often pull our head down and don't give us the opportunity to look up and look around and get curious about things.

I think sometimes we feel that we don't have time to do those things, to invest in ourselves, to learn, to listen to this podcast, or read that article, or check out that new interactive app that everybody keeps sharing, or the next generative AI platform that is out that people are playing around with.

If we're not staying curious, if we're not being selfish about our own development, we're not going to meet this moment. I think particularly as generative AI takes on a bigger part of the workforce. So I think it's an imperative that we do that.

And in doing so, we're actually bringing more value. Like the Moderna example is a great example. If you figure out as an individual how to leverage some of these generative AI tools to become 10% more productive, who's going to benefit from that? You're going to benefit from that, your employer is going to benefit from that, your future self is going to benefit from that. So from specifically taking that question to our field, I want to see our field be more selfish with their own development and their own learning and their own growth.

Daan van Rossum: I love that. Okay. Wonderful note to end on. Lars, thanks so much for being on. 

Lars Schmidt: Yeah. Thanks so much for having me.

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Future Work

A weekly column and podcast on the remote, hybrid, and AI-driven future of work. By FlexOS founder Daan van Rossum.