Learning Without Scars
As a third-generation educator, it is easy to say that teaching and training are in the blood for Ron Slee. From his beginnings as a coach, through his time at McGill University, Ron developed a foundation for the work he does today. From working within dealerships, to operating a consulting company, creating a training business and running twenty groups, Ron has been directly involved in this Industry since 1969. Ron has been known as the industry expert for years, and has brought this expertise to bear through his training programs. Today, Ron provides specialized, job function based internet based subject specific classes, job function skills assessments, as well virtual seminars and webinars. These courses are designed for manufacturers and their dealers, as well as independent businesses in the construction equipment, light industrial, on-highway, engine, and agricultural industries through Learning Without Scars (www.LearningWithoutScars.com). This platform is a continuation of the work begun by Quest, Learning Centers which was established in 1996. This training is aimed at improving dealer parts and service operations through qualified people that are knowledgeable in using operational metrics and current market and operational best practice methods.
Learning Without Scars
Reconciling Technological Innovations with Innate Human Sensibilities
Could our reliance on artificial intelligence be numbing our innate human touch? Join myself and John Andersen as we dissect the delicate dance between emotional intelligence and AI in today's business world. In a landscape where numbers and algorithms reign supreme, we take a step back to appreciate the unquantifiable value of intuition and gut feeling that fuels true visionary leadership. We chew over the enigma of balancing technology with the human element, using Amazon as a shining example of innovation propelled by a deep understanding of customer needs—a reminder that despite our love for data, emotional intelligence is the real MVP in deciphering the human experience behind the numbers.
Imagine a classroom where AI avatars breathe life into education, but where do human connection and emotional intelligence fit into this futuristic picture? Our journey continues with the potential of these revolutionary teaching aids, yet we can't help but circle back to the essence of personal interactions and the emotions AI cannot yet mimic. I share an intimate tale contrasting Disney's crafted magic with the raw splendor of a natural sunrise, driving home the power and necessity of authentic human emotion. It's a candid conversation that urges us to question whether we're becoming too entangled in data to appreciate the very essence of what makes us human.
We're not just here to speculate; we're here to understand the seismic shifts in industries like customer service and software development, where AI and data analytics are drawing new battle lines. We ponder the subjective nature of value and the challenges of adapting to rapid technological changes with insights from Tom Barry, who brings his first-hand experience with Comanche dealers into the mix. Our discourse spans from the historical echoes of the Industrial Revolution to the cutting edge of neuroscience, all while emphasizing that no matter how advanced our tools become, human effort and service remain irreplaceable. Join us for an episode that doesn't just look at the future but seeks to shape it with the timeless power of human connection and intelligence.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Aloha and welcome to another candidate conversation. Today we're joined by John Anderson and we're previewing a blog he's we're putting up on Tuesday that he recently wrote, that looks at the difference between emotional intelligence EI and artificial intelligence AI, and how our world seems to have been taken over by AI at a time that we seem to be losing the people touch. So with that as the intro, john, good to see you, young man, you look very relaxed in Florida.
Speaker 2:Nice to see you. I'm just waiting out a rainstorm. I know this won't will probably date the podcast, but I'm waiting to see whether it's going to rain through the Daytona 500 tomorrow or not, or whether we're going to have a Monday race. So it seemed an excellent time to talk to you, ron, ron well isn't.
Speaker 1:Isn't every time an excellent time. Come on, now, Don't start on that. Okay. So what are you trying to say with this? We, we, we ended your blog with a bold statement that went along the lines of artificial intelligence is data intelligence and modeling, and emotional intelligence is passion, wisdom and instinct. And you and I and chatting back and forth talk about entrepreneurs, business leaders and that magical thing called intuition, which seems to be a common characteristic of most of the really wonderful leaders that we have experienced over the last 1500 years. So, with that as the start, why are we so focused on artificial intelligence?
Speaker 2:Well, I think some of it is because of people like you and I, who have been pounding the pavement for the last 10 years telling everyone that data is king. And you know I I as as recently as a couple of months ago addressed a large number of dealers and talked about the gold mine that they were sitting in on, on volumes and volumes of data. You know, 20 years in a dealership would. I'd hate to see what it would look like if you converted it to paper run, but it would fill several warehouses. There is so much data and so much intelligence around the data and you know a long come. Step two, which is pushing towards analytics and and and I'm a big fan of analytics and how else do you pour through, you know, three or four warehouses of data to come up with a decision. The problem with the problem with all that data and the problem with analytics and, in my opinion, the problem with AI is you have to give it the problem to solve. So, in other words, what I'm saying is, anytime you want to use all these mountains of data, it's to support a presupposition or a case that you have in your head. You know, should we increase our pricing? Should we change our stock factors? Should we add more technicians? Should we increase our territory? Should we bring on a new product line? All great questions, but AI doesn't ask questions. Ai gives answers, so it sorts through data to come up with that.
Speaker 2:And what concerns me moving forward is is the lack of intuitive thinking, the lack of having a gut, the lack of doing something because you know it's what needs to be done in your heart of hearts, and I think you're right. I think if you go look at the top successful businesses in the world and the top successful executives that are leading those companies, every one of them makes regularly unsupported decisions because they just know it's the right thing to do, and you don't have to look too far backwards to find it. And I understand it's not everybody's cup of tea. But if you look at Tesla, for example, or Amazon, for example and let's use Amazon because it's a little less controversial the start off of Amazon selling books and becoming a global bookstore over the internet is probably counterintuitive to everybody's thinking at the time, but it takes some kind of a visionary to say, hey, this is the slim end of the wedge. This is how I see the world in five years, in 10 years, when Amazon came out and said we're going to do everything we can to make your shopping experience perfect.
Speaker 2:And the first thing people said is well, if I'm in a real store and I don't like it, I can put it back on the shelf. Amazon said no problem, we'll handle your returns for you. Well, if I get it and I don't like it, or it doesn't fit or I don't want it in a real store, I can drive it back. Amazon said no problem, you can send it back to us and within most cases, 24 hours, we'll credit your account and go through. Yeah, but if I'm in a real store, I can explain it and they don't ask a lot of questions. And Amazon said that's fine. Our return policy now is no questions asked. So when those decisions are made, I don't think the data even exists to make those decisions run. And that's where emotional intelligence comes into it, because that's understanding your customer, understanding the person that you're dealing with on the other side of the counter, on the other side of the phone or on the other side of the world. It's really got to be between two people.
Speaker 1:So it went three to five minutes there before the keyword was uttered. It made Amazon a success and everybody else who we want to talk about a success, and it's called customer. Whatever the hell a customer wants, wanted, needed Amazon did. Bookstores had a model that was a couple of hundred years old and it had never changed. They were very comfortable with it. They had limited inventory based on data.
Speaker 1:We sold this many things or we got this promotional money to put this book out here, and I went to Amazon almost instantly because any of the books that I was interested in buying the bookstore never had. I had to get them to order it and I paid the freight to bring it in. And here comes Amazon, and in those days we had to pay the freight at the very beginning, but the price was better, so that even with the freight paid I was cheaper than a bookstore. I had to wait for both, so it didn't really matter. And then here we go. Now you go into an Amazon, go into Whole Foods, use your hand, pay your bill. You can drop off your returns at a Whole Food Store. I mean, you can buy cars, you can return cars, you can test drive. It's all and everything about this whole thing, john, to me is about customer service. Whether it's AI, ei or GI, it's all about customer service and I think over the last 20 years, customer services has gone to the backseat, as a servant of profit.
Speaker 2:Yeah, I think there's again. Just to fall back to my position, because I'm not going to give it up, I think the reason that it's taken a backseat to profit is because we're making our decisions based on being data driven again. So we're making our decisions based on analytics. I had a great partner, a super mentor, somebody you know very well early in my career, who regularly said to us as partners let's do what's right, let's enjoy what we do and let's feel good about it at the end of the day, and we'll make money. There's a little expletive in front of money, but we'll make a lot of money. If we do what's right, enjoy what we do and do the right thing, we'll make money. It would happen with every critical decision we made. And I'll tell you what. As a really pragmatic, data driven person, I was always able to look at it and go look, here's a spreadsheet, here's the data that tells you exactly why we should do this. It does not work on paper, but if you fall back to that EI, that emotional intelligence again, that says this is what the customer wants, this is what the customer needs, and I guess the reason that I drive it to customer customer is kind of a unilateral term, ron. We have customers everywhere in our life, all day long, whether it's working in a dealership and it's a customer that you're dealing with externally, or whether you're providing a service for another department. Or, quite frankly, you're a customer to your kids, whether you're picking them up from school on time or dropping them off at the soccer game or whatever has to happen when you're dealing with another entity and another person, not just data to data. When you're dealing with a human being, you have to have emotional intelligence on how you're going to deal with them, and emotional intelligence when it's held up against data, unfortunately, it's often counterintuitive.
Speaker 2:I mean, let's talk about AI just in itself. People are terrified of it, and they're terrified of it because they say, hey, it's going to replace my job, it's going to move me out of my world, it's going to move me out of my comfort zone. I'm sure you are old enough to remember the book who moved my cheese. Well, we're not moving the cheese anymore, we're just taking it off the table. All together, I mean, everything is gone. We're rewriting the way that the traditional mundane transactional stuff is done. So if you assume that AI can handle the mundane transactional stuff, where does that leave us? And by us I mean people that are trying to work every day. That leaves them to do something that the transactional AI can't do, and that's have the emotional intelligence, have the gut instinct, have the intuitive thought to be able to deal with real people on the other side of it. And I'll tell you what this plays out in every single industry. And, again, always frustrated because equipment dealers just put their heads in the sand and say I've got 10 years to wait for AI. And I'll tell you right now you don't have 10 years to wait for AI because it's coming daily.
Speaker 2:I think I mentioned to you earlier in the week four times.
Speaker 2:Last week I was involved in customer service activities, everything from trying to book a reservation to make a change on an airplane, chasing down some bank charges that I didn't know what they were and I forget what the other one was, but all of them involved me interacting with the chat box. And I can interact with the chat box so far, and it can answer my questions. It lets me get all my story out, it lets me get my frustration out, it gets all the facts put into order, but when it comes time to make the decision at the end, if it requires an intuitive decision because it means that I'm going to have to override and put you on another flight, or if I'm going to have to say I'm sorry, because I screwed up your banking and I charged your card when I shouldn't have. All of that stuff dumps you to a real person. So there is a precursor to all of these transactions that can be handled through AI and I'm telling you right now it's going to take a major role in the equipment market space.
Speaker 1:Oh, no question about it. The other thing that you touched on is well, somebody has to know what questions to ask. We can have all the data, we can have all the algorithms, we can have all of the sexy systems we want, but if nobody can answer the question, then we've got a problem. Well, wait a second. Somebody's got to know what the question is. Why don't we have that part? Why are our sales going down? Why is our market share what it is? Those are really cool questions. Market share is a perfect one because we have no definitive way of calculating that.
Speaker 1:Everybody comes up with their version, the Anderson method, or whatever the heck we want to call it. But why does a customer choose to stop buying from you? It's kind of interesting because we're just going through converting all of our education products to artificial intelligence driven avatars that are now people that talk in a manner that you wouldn't know, that they weren't in the room with you. So we can have 15 to 20, 15 minute sectors, segments in a class, different genders, men and women, different ages, different races, and they're talking to you about subject matter. It's much more compelling. It's terrific.
Speaker 1:People don't know, but along the way, at the end of every segment we have to ask a question Mr Student, what? Or, ms Student, what did you learn? What do you know about this? What's your answer to that question? And if they can answer those, they can go on to the next segment. But now you got to learn. Okay, then the next trick. With all of this stuff here comes AI and EI intermixed and there's something in between that I don't know what we want to call it Retention. You got to be able to retain that knowledge, that wisdom, that emotional intelligence. I go to Mary and I have to approach her this way, or, george, I can't talk about this. Those things are in our heads. I don't know how we put that into artificial intelligence.
Speaker 2:Well, I mean as a proponent of AI, I'll tell you there's probably a real simple metric of 30 or so items that will pigeonhole people with remarkable success into whether they're an A type or a B type. Or I'm a big fan of colors training, which just basically gives you five buckets to put people into it's way, simpler than some of the real complicated methods of establishing different personality types. So I think AI can get there. But I think the problem, ron Stillis, is fundamental. Ai can't put its hand on your shoulder and squeeze it at the right time. Ai can't look into your eyes when you're talking and say, hey, I can see that either this is really stressing you out or you're really happy, or you get it. And I think you know this as an educator and you know my history in delivering presentations. I do them face to face, because when I can look at people, you can get a myriad of cues that touch you emotionally that you can't get in a telephone call with somebody. You can't have a telephone call with somebody and see their eyes fill up when you're talking about something in particular, and it's interesting because AI doesn't know what will ignite something in someone else, and I think that's the difference. So, listen, I believe in AI. I'm just saying, if your question is, how do I survive it and how do I thrive in that environment? You thrive in that environment by going back and doing what we know how to do best, which is be a person and have emotional intelligence about the people that you deal with.
Speaker 2:And I make it sound so simple. Go read the blog. The blog is wonderful. I specifically and I don't say it's wonderful because I wrote it, although that's always a good indicator, but I know I'm such a modest person no, but the reason I say that it's, the reason I say it's wonderful, is because it takes two fantastic situations and it compares them. And one is the image of fireworks over the Magic Kingdom here in Walt Disney World, florida, and to see people's eyes light up and to see how, how engaged they are, and to see how contrived the whole event is, from the kickoff working its way through a finale and even having, you know, the smell of popcorn pumped into the air and the music.
Speaker 2:I mean, ron, it's hard for you not to be moved when you're there, but the people that are most moved when they're there are their grandparents, and the grandparents have seen fireworks a million times in their life, but the reason that they're moved, and oftentimes to tears, is they're never watching the fireworks. They're always watching their kids and their grandkids react to the fireworks and that's where the that's where the EI kicks in and that's where they leave the parking lot and say that just cost us $800. And they're okay with it. And what I did a comparison to is a natural EI and it was to me. I sent you the picture, you saw it and, in fact, if you want the credit, I'm going to give you the credit, because you're the one who told me why. Why did I?
Speaker 1:tell you that.
Speaker 2:You told me, wake up early in the morning because I'm going to have the most spectacular sunrise because I'm on the Atlantic Ocean. It's only comparable to the sunset that you're getting on the Pacific Ocean. So, begrudgingly, I took the dog out and I went and stood at the end of my site looking right out on the beach, and was surprised, first of all by the number of people there, because it's cold. Number of people in various stages of not being awake. So everything from bathrobes to track suits, fletching their coffee to watch the sun come out of the horizon. And it is for a matter.
Speaker 2:I wish I could have a word to describe it. I didn't have a word to describe it. In fact, all day long I just kept thinking and you could put so many spins on it, ron it was beautiful, it was gorgeous. Look, the sun rises every day, no matter what happened.
Speaker 2:I mean, there's so many things you could say about it, but until you stand there and witness it and it's interesting because one is comparable to AI, so it takes a lot of work, it's very contrived, it's very scripted and it fills a certain void. The other one is purely holistic and there isn't a single thing you can do to stop it, change it or manipulate it, and they each can have a. My argument would be that sunrise probably has a more impactful statement because it just happens all by itself, and that's why I say the Disney one is really cool too, because, again, some people are enjoying the manufactured experiences, but the grandparents are typically the ones that are going back to the emotional experiences and, incidentally, grandpa, those are the ones that are paying the bill for it a lot of times too.
Speaker 1:But the other part of that, john, I'm going to say, is the grandparents know that they're creating memories. The grandchildren have no concept of what that is yet. The children are in a bridge position, they're halfway, and we've seen that my grandmother lived till she was 94. She was born in 1890. And she raised me for the first three, three and a half years of my life, because both my parents worked and it was the greatest gift that I ever received To having her perspective. She got a master's in 1915. Just as an example, she was able to speak fluently Greek and Latin. An incredible lady, well, also separated from her husband, was a single parent raising three daughters in the 30s. So yeah, I mean she was off the scale.
Speaker 1:But then in the last day or so I've been doing work on our classes and talking about customer service, which is all about the interaction between two people, and everything comes down to in that world, from my definition, the customer's perception of what they received. Did it match what their expectations were? And then I'm going to put different gradations in there. Say that if you meet the expectations, congratulations, you're the same as everybody else. If you met the expectations and you said thank you, that might be something, but what you're trying to do is you're trying to create a memorable experience that blows past expectations and perspectives so that you get to that Disney world.
Speaker 1:Word of apostles Every grandparent leaving that site. They don't care how much it cost. It was the benefit of seeing that look in their grandchildren or children's faces, and the joy of smelling the popcorn, contrived or not, the fact that you're in a position to take a picture where there is no shade, that you have to worry about all of those things and think about it. That's Walt Disney. That's 50 years ago and they have not really modified, other than made it bigger until recently, the last five or 10 years, where we become quote unquote woke. Now we go into a different path.
Speaker 2:But I'll tell you the same thing about my grandmother's shortbreads.
Speaker 1:Oh, absolutely, me too.
Speaker 2:Please don't change the recipe. And the solution is when it works, it works, and I get that. And I get that also in the dealerships that people are saying hey, listen, we've been operating like this for the last 50 to 75 years. My grandfather ran it, my father ran it, now I run it. We don't have to change what we're doing. I agree, you don't have to change what you're doing. You have to know what it is that you're doing that helps you keep, maintain and service those customers.
Speaker 2:And sometimes it's not the obvious, Sometimes it's not price, Sometimes it's not availability, Sometimes it's something entirely different. And I'll add this to your class saying thank you and have a nice day is OK when someone looks at me and I've taken to doing it myself now if I've had a pleasurable experience, I will say thank you and say I sincerely hope you have a nice day, and that's different than just saying be on your way and have a nice day. I want them to know that I hope they have a nice day because they've had an impact on me and I'm going to be thinking about them at least for the next 15 seconds until I get out of the store and I'm faced with the next traumatic event in my life trying to find my car, or I've lost my keys, or can't figure out where I'm going to put the groceries on my bicycle, or whatever it happens to be. So I just I think, in terms of the dealership, it's going to take a fresh set of eyes to look at things. There was a time when you and I talked about how are we going to get parts counter people, how do you get people to be excited and work behind a parts counter and do all that? You know what they're not going to have to be excited to work behind a parts counter anymore. What they're going to have to be excited about is to provide a service and to take care of a customer and to really have an impact on a transaction that you're doing with somebody else. And you know it's the same old question, Ron.
Speaker 2:Why do people buy from you? Well, because I have the product. Lots of people have the product. Well, because I have the best price. Really, I can find a better price on just about anything anywhere. And if you don't believe me, just go search the internet. You can find a better price on just about anything anywhere that you want. Then, on top of that you get to the part where somebody says, OK, so if it's not my price, it's not my availability, it's not I'm the only one that carries it.
Speaker 2:Why do they buy from you? Well, it's really simple. People buy from people they like and trust, and whether that's a chat bot or whether that's a person on a telephone or whether that's face to face, that's the EI side of things. That's where you have to be able to engage in an actual relationship with a person on the other side of the transaction, to the point where they will like and trust you. And when I say like, they don't have to like you, We've all worked with those folks, Ron, and I bet you can go back in your history and find some of the biggest pain in the butts that you've ever worked with, and you'd have to don't give any names and you'd have to go back and say but they were probably some of the most effective people that you've ever worked with. At the same time, it really really comes down to this emotional intelligence, and until we can figure out how to put that in a chat bot or put that on a screen, I'm not exactly sure that we have to fear being replaced.
Speaker 1:And I don't think any of us. Too many people today are afraid to be replaced. They're intimidated. They've got to keep their job Because too many people don't make enough money to have any kind of luxury of comfort. Statistic in the States is something like 62% of the people in America are within $500 or a financial disaster. So all of that comes into play. It's funny.
Speaker 1:I swam and you've heard me talk about this incessantly and it taught me a lesson very early on that you're not competing with anybody other than yourself. Do the best you can. You mentioned do what's right the discussions you had at PFW about let's do what the customer wants, let's do it well, we'll make all kinds of money. Lou holds, do your best, do what's right, honor the golden rule. There's all manner of examples like that. So in swimming I learned at a very young age winning isn't the important thing, getting yourself better, improving is the important thing. And then I go to work and the guy who was the president of the company fired me half of us in times and he taught me a lesson that was kind of amazing. He never, ever let me settle. Do your best, kid, and if you don't, I'm going to catch you. And if I catch you, it ain't going to be nice. And that comes back to something that I wish everybody had a feeling that what they did was worthwhile, that their opinions were valued, that their opinions were sought. Here's your job. I'm going to show you how to do it. I want you to do it, and do it better than you can, and you're a tool in the toolbox.
Speaker 1:I think that's where we're at today, which is where AI comes in. People are taking shortcuts. We're going to have data analytics. We're going to have algorithms. We're going to have this magic thing that's going to decide all of our questions, just like your chatbot on customer service. Answer these 30 questions. I can pigeonhole you, you can do whatever. It's not going to hurt my feelings and if it's a problem, I will give you a person, or you can be charged a premium and you'll get a person right away. So now we start having two levels of service, two levels of customer Customer that's prepared to pay more to get service and everybody else, and then customer who's prepared to pay for it is becoming a bigger and bigger piece of the overall puzzle. 1% of the taxpayers in the United States pay 50% of the taxes, but that's not enough.
Speaker 2:But I think we've all been down that path where we're starting to understand that there's more to the equation than just price.
Speaker 1:It's value but nobody really can put a definition on what value is. The value to you might be different than the value to me.
Speaker 2:But they're going to because we have a couple of neat things in the industry right now. Used to be called AliExpress or Alibaba, and now, if you watch the Super Bowl, you saw a lot of ads for Teemu.
Speaker 1:They're on my screen and on my phone all the time it drives me crazy and you can't get rid of them.
Speaker 2:And they've got a coupon and it expires in five minutes and that's great. So this is gorilla marketing at its best and that's okay. And then their other entry into the market is they take a price and give you a ridiculous discount on a price, just to something that says you're going to buy a set of wrenches for $3.45. At some point you kind of scratch your head and say, okay, I'm going to try it. What's really interesting is what their repeat business is, because the challenge they're facing right now is they need to sell one time to everyone in North America, because they're not getting a two-time, a three-time or a four-time. And the position that I live in now the community I'm in for the wintertime the Amazon, ups and FedEx trucks are here not once, not twice, but three times a day, and I can sit there and watch them and they'll go to the same house three times a day. So we're not talking about a one-time purchase.
Speaker 2:And this is exactly when you're talking about hiring somebody, or you're talking about people in their job being afraid to give their opinion. At some point they have to step out of that comfort zone and politely offer an opinion based on the fact that they have emotional intelligence. They have to have worth, they have to feel like they have worth and they have to put it in place. I mean, you and I are just two old guys standing about this, talking about this, but there was a time where each one of us would go out on a limb and have an argument and say this is why it has to be this way, right, and have those constructive discussions, because AI doesn't have those constructive discussions. Again, everything is fact-based. There's no gut feeling, there's no passion behind it.
Speaker 1:So now we get into generational issues and Marlene, my wife, and I were talking about the Industrial Revolution a couple of days ago and imagined the disruption that caused on people's lives go back to serfdom and aristocracy and all the rest of that stuff. And then I was starting to look at movers and shakers and you look at guys like Alexander the Great or Cyrus or Herodotus. In history there's not very many people Genghis Khan that were impactful on the planet. So here comes a steam engine and it's our source of power. It's wonderful. And the electric engine arrives and it takes a long time.
Speaker 1:So I don't want to get controversial. Here comes Tesla and electrification of vehicles. Transportation is going electric. Probability of success over the next 10 years is zero because we do not have any electrical generation opportunities. We don't have battery capacity. We have none of that.
Speaker 1:But silently and quietly down the side, we've got different gas solutions. We've got natural gas solutions In Canada and the United States. We can solve the world's natural gas needs for the next thousand years and it's clean. Why don't we use it? Because it's not politically beneficial to the elite who need money to continue their control game. They don't own the natural gas.
Speaker 1:Teebun Pickens did? He offered to put in gas stations across the country at his expense. Guess what? You take 50% of the energy away if you head on highway trucks powered by natural gas buses there's so many different answers in every single direction Tractors, mine sites or autonomous vehicles. Why don't we have buses running up and down the street that are on electric, on a wire, and nobody has a car in a city? Why don't we have that? And now I'm talking about EI. I'm talking about out there. We got Elon Musk putting chips in people's brains. We got books now and experiments, now called the Blue Mine, where they're now doing actual studies on blood flow and oxygen flow in your brain and finding that you can modify your DNA. We got a guy who can teach you how to breathe that changes the pH and is blood. I mean, we've got so many different things out there that AI is allowing us to see, but we're forgetting that we have to get up in the morning, we have to serve somebody and we have to earn something.
Speaker 2:And that's EI.
Speaker 1:And that's EI absolutely, and the only way that's going to work is Nam. John, I hate to do this but I trust you Give me that damn thing, I don't care how much it costs. It's interesting because Tuesday we put the blogs up. You're going up Tuesday and we have a new guy by the name of Tom Berry who has been with Comanche dealers and a whole bunch of different things, and his is all about a sales story, and it's a wonderful story because it's all about knowing what the customer wants. Letting competition do their damnedest, make their present. You go first. Just let me come in in the back end and that would be the end of the discussion. And that's knowing. That's not AI that you can get from an algorithm and a computer, that's you're walking around between your ears. Ai or IQ or EQ? There's so many darn things here, but we're people first and I think we've lost that Market share and equipment Parts of market share in the last 50 years has gone down by 50% and yet everybody's business volume is higher, in part because we have price increases. The other part is we have fewer people competing in the marketplace and so everybody feels fat, dumb and happy. We're doing real good. My sales last year were up by 10% Congratulations.
Speaker 1:I'm giving a talk in Mississippi years ago and it was to a bunch of cat dealers and we had the guy that was in the room who was responsible for North America. And you know me, in a room I wander around with a microphone, I talk to everybody, stick it in their face and got 100, 200 people there. You can't hide. So we're talking about market share and I go up to this guy and say I know this is a controversial subject, but would you mind telling me what your market share is today for parts in the United States? And he said 38.7%. I don't remember the point and I remember in 1969 and 1970 the market share for cat dealer dealers was 83% of the parts market. So from 1970, make it easy to 2010, 40 years, market share went from 83 to 38. Was anybody complaining?
Speaker 2:Was anybody making?
Speaker 1:noises. No, they're selling on fire. They're making more money. Everything's cool, but that means over time. Congratulations. Go another 40 years. What's it gonna be then? 15%, Where's the bottom? Or, as we're about to see, the steam engine is being replaced by electric. The distribution channel we're used to now, because of AI, because of EI, because of all the tools we got, we're gonna be disintermediated. The buyer is gonna go directly to the producer and there will not be a distribution channel in between. That'll be fun.
Speaker 2:Yeah, as long as the producer understands how he has to serve that customer. And that's always been, that's been. Every dealerships saving grace is the fact that they provided customer service. They provided a shoulder to cry on. They supplied the hand up out of the trench if it needed to be done. They were the ones you could call on Sunday night at seven o'clock during harvest and say, hey, my combine's down. They were the ones who could meet you on a job site a Monday morning to see how big a hole you needed to dig.
Speaker 1:And that's yeah. And what I've been saying for years, almost my whole life, is whoever's closest to the customer's gonna win. And that's exactly what you're saying. You know that agriculture example is perfect because you got two really intense periods of time where get out of the way. That machine's gotta work, forget it. If it doesn't, the crop's gonna get destroyed. My father is saying one of the most beautiful things in the world is watching your wheat field ready for harvest, getting destroyed by a hell storm. And then you gotta go to the bank and say, man, I need some more money. Those days are not that far away, you know.
Speaker 2:Hey, we used to keep track of harvest seasons so that we could have support people available to help the dealership during harvest?
Speaker 2:Absolutely, because the dealership needed to take care of their customers 24 hours a day, and that's where the biggest change comes. So here's what I'm gonna tell you. There are some exciting AI projects that are in the pipeline right now, some by software companies that I've been a little hard on, some that are top secret and nobody knows about. They're all great, but none of them are gonna succeed unless we keep an equal balance of AI behind the artificial intelligence projects. We still need to have those people that, when the questions for the chat bot end, who's gonna pick up the phone and solve my problems?
Speaker 1:Yeah, and to that point, that walks us into the dealer management systems, the ERPs, et cetera, and one of the things you and I've been a little bit distressed by over the last 20 years in for Microsoft Dynamics, sap, jd Edwards, dis, ebs, cdk, e-emphasis they're systems people now. They're not dealer business people. They are selling tools without understanding what the application for that tool is, and it's becoming painfully obvious when you look at the installation they have a vanilla approach to it. This is what we do. This is the end of it. And they don't really.
Speaker 1:If the dealer asks a question, my suppliers give me stock orders in three days. What changes do I? What do you've got it set for? We got it set for two weeks. Well, I'd like to change it to three days. Oh, we don't recommend that. Why not? Don't know why do you want to do that? Okay, so that's the defense step. And, john, you go back 20 to 40 years, every single one of you guys selling software. Well, look at the founding of PFW. They were dealer people. Looking at the founding of DIS, ebs, all of that stuff they were all dealer people. You'd have user conferences and you'd be trying to garner from the customer what the heck, they wanted and needed, and that's how you develop your package. Don't see that happening anymore.
Speaker 2:Well, I think it's happening somewhere.
Speaker 1:Oh, it's always happening somewhere, but if you look industry-wide, this industry is being poorly served. Automotive industry's got two suppliers of software.
Speaker 2:Congratulations, you're preaching to the choir, ron. Oh, really. Again, this is a year-long debate. You and I have been through this before, just because you're the biggest and you're the best and you have the most resources and you have more developers than anyone else. If you don't know the market you're serving and you're not trying to disrupt your own market and you're not trying to create your own, to create your own product, you're not trying to make your own way, you're not working with your customers, you're not trying to.
Speaker 2:It doesn't matter how big you are if you're not focused on what you can do to make life better for the end user and that could be the end user, the actual person who's buying parts and service from you, that could be the end user, the person you're selling your dealership management system to, that could be the parts counter person, or that could be the dealer principal.
Speaker 2:But if you're not working at making their life better, easier and ultimately more profitable, then it doesn't matter how many resources you have, doesn't matter what you do. You're gonna get me back on this pulpit again about I don't wanna hear about your name change and I don't wanna hear about your history and I don't wanna hear about your resources. I wanna know what you're doing for me today and what you're going to do for me in the very near future, ie tomorrow, because people are telling me about projects and products that are two years away. Ron, I can't even tell you what this industry looks like two years from now. How can I tell you a product isn't gonna be ready for two years?
Speaker 1:Well, the other part of that I guess we're also in transition on it used to be that you would put together a product whatever the product is a tractor dealer system, an engine, whatever it is, and you're gonna spend $2 million putting it together and your expected life on that thing is 10, 15 years and you're gonna have a return on that 2 million bucks of X. That product lifecycle today is measured in weeks and months. You know, if you look back to 1980, time magazine, I think had you know here come the Japanese Kamatsu was arriving and it took them a long time. Toyota, japanese cars it was all metric, wasn't English measures? Hardware, holy mackerel, what are we gonna do with this stuff? So it took 20 to 30 to 40 years. Here comes Korea. It took five to 10 years. Here comes China. It's, you know, except for distribution channels, distributors, products are moving very, very quickly today, in part because of AI. Dealers are almost intimidated by it. It's moving so fast I can't keep up. I mean, I can't tell you how many people in my generation are looking at their phones and they don't wanna change from an Apple to an Android or from the Android to an Apple or to a Google or whatever pixel or whatever the hell it might be, because they don't know how to do it. My wife is so used to her games on Apple. Even though I might have a superior product for her, she will not change because it takes too much, it's too much of a hassle and again, it's a value proposition, isn't it? She's comfortable, it doesn't matter and it's you know.
Speaker 1:I think you've heard this story when Marlene was pregnant. We were a little older, so the pregnancy was a little overdue, so she was in the hospital a week or so before the birth but she got a pass on Saturday. So I'd pick her up in the morning on Saturday and she'd love scampis and I made scampis that were particularly good. And there was a fishmonger we went through. The guy was about six, two, six, four.
Speaker 1:This is in Montreal. He's got a mustache, she's classic French, smooth as silk, and Marlene's looking at the count and there's three different sizes of scampis. She looks at the small one and she said how much are those? And he tells her the price I don't know, 10 bucks and then the middle ones how much are those 15 bucks? Then she looks at the third one and she says how much are those? And he leaned forward. This is first thing in the morning. His apron is perfectly white, brand new. He leans forward and he looks her in the face and she's out like the size of a house. He said, madam, it really doesn't matter, does it Guess? Which side do you think we bought? It didn't matter, and that's the EI of the world and it's, you know, the best scampis in the world come from Scotland.
Speaker 1:My opinion and I can be overruled on it. Everybody has opinions as like noses, and the reason that they're good is it's cold water Salmon. I like smoked salmon from Quebec rather than from British Columbia, and you know there's all kinds of things. Why do I like EBS or E-emphasis? Why do I like IntelliDeter or Extant? Let me change the terminology. Why do I like Discus or Quipwater? It's all personal and it's all understanding, and nobody in my mind knows the inside of the EMS systems to the point that they can defend or offend on every aspect of it.
Speaker 1:It's too big for someone to be able to do that.
Speaker 1:Absolutely, which is why I say systems are going to change. We're going to have a hub of financial data in the Cloud. Somebody's going to own every single one of those data elements. Nobody can touch it except for that person. We're going to have specialty software coming, often just like an octopus Every arm. There's Salesforce, there's CRM, there's inventory management, there's pricing module, there's market share, there's management reporting, there's metrics. Blah, blah, blah, blah. We'll buy the best in class. It might be something that we change every two or three years. It doesn't matter.
Speaker 1:Like how often do you change your phone? How often do you change your earbuds?
Speaker 2:I agree with you and I think that's going to be fine. That may, in fact, be the way it goes, but I'll tell you the difference and let's stick with your octopus analogy. It's fine to cut off one tentacle and grow a new one, and it's fine to do that every two years, but you can't cut off the head. The head still needs to be there and the head still needs to exist, and I really think that's where there's this lack of understanding on new software that comes out. You and I were talking about somebody who can generate things in weeks and months that used to take years to do, and I was thinking about that and thinking about some of the opportunities that we have coming up right now, and it's great. If I can build it, I can buy it or I can integrate with it or partner with it at the same time.
Speaker 1:So let's use that as the final chapter, because I think that's the answer that everybody has been looking for. We're not going to have anybody that's going to have the answer to the maintenance dreams. It'll be able to satisfy everything, but we're going to have that core.
Speaker 1:We're going to have that CPU, your brain. It's going to be there in the cloud. It's going to have all of the essential things, whether it's static data or dynamic data, I don't care. But, ok, we want sales management and you're going to go out and you're going to look at three options, and you're the guy that authored this and I like the approach. We're going to be able to find somebody that gives us the answer that we need at a valued proposition today, and we'll buy it, or we'll partner with them, or, if there's nobody there, we'll create it ourselves if it's critical. And those three decisions, I think, are where we're moving. Is it out there? Is it good? Do I want to buy the product? Do I want to buy the company? Do I want to partner with them? Or, gee, there's nothing out there. Is it something I need to create myself? I think that's where we're going and I think that's a very smart approach that you bring to the table. It's not that we have to create everything like we had to do 50 years ago. There's people out there that have it. Salesforce is a good example, target's another good example. Maybe Texas is another good example. There's a bunch of them out there, ibm. They really don't make hardware anymore. It's a very different world. So, gee, I want something to do inventory management, and you can walk through these things like I can.
Speaker 1:In the 60s, when IBM came out with their distribution package, they had a thing called Impact Inventory Management, performance and Control Techniques. It was created by a guy by the name of Robert Goodall Brown. It used unbelievably heavy-duty statistics and nobody at the dealership understood what the hell it was. But everybody bought it all the big guys, and that's how I got into the business. Because it cost the dealership that implemented so much money. They said wait a second, this is wrong. How do we fix this? And nobody knew In those days.
Speaker 1:It was assembler programming, and how many people just think about that today? You want to talk about a dinosaur? I used to stand with my butt to the printer and hold on to both sides of the paper as it's coming off, the 1,100 line-a-minute printer reading it. Or we had oh, then it went to Fortran, oh, then it went to Cobalt. Now you've got English language. I mean, things are changing, but now no one person, no one company has the answer to everything. They have an answer for pieces, which is what you're saying. Who's got the best piece, who's got the best tires, who's got the best windshield, who's got the best and most comfortable seats? Because I'm going to make a car and just to put a little link on the back end of that, the size of the railway tracks today across the world are determined by the distance between the wheels on the Roman chariots. That's a truth statement 5,000 years later. Imagine that.
Speaker 2:And I think that's ultimately where you're going to find our traditional DMSs. I agree, you know they have to be in that place and sometime I'll just leave you with this one. I'm not going to explain it tonight. Sometime when you're really bored and you really want to dig in, let's have a next discussion about what the middle tier is.
Speaker 1:Oh, absolutely yeah.
Speaker 2:Because I think that's the part that people are really going to need to understand what the middle tier looks like, so that I can choose, make a good choice, not just based on AI, but based on my own emotional intelligence, when I'm looking at systems too.
Speaker 1:OK, and let me just make that a little bit more obvious. In Canada when I started on the business, there were 10 categories. Today there's two. And in Canada when I started, I can't tell you what the number of John Deere dealerships were, but in the construction world there's one, volvo there's one. It's a very different world. And yeah, the middle tier, the middle kingdom, is what China was called 3,000 years ago. It's kind of an interesting place to end. So I don't know that we solved anything. I don't know that we've got very many more people that are either more firm in their opinions or less. It doesn't matter. I just want people thinking about what we're talking about, because this is an area that is serious Artificial intelligence. In your blog you say it very well, and that we are able to look at AI as data, intelligence and modeling, ai as passion, wisdom and instinct, and I don't think we're going to bridge that ever. People are always going to be involved.
Speaker 2:Well, until we do. I'll keep watching the sun rises and you just keep watching the sunset. Sounds like a plan and with that, thank you very much, John.
Speaker 1:It's been a pleasure and I hope everybody who's listening. Thank you for listening to what we've been talking about and I hope that you are with us at another candid conversation in the near future. Aloha, Bye now.
