54. How AI is Reshaping Distributor Operations and Boosting Sales | Mike Marks

Karthik Chidambaram: Hello, everyone. I'm really excited today because we
have with us a very special guest. Welcome to a new episode of the DCKAP’s
Driven Podcast. We have with us Mike Marks, the founding partner of IRCG,
Indian River Consulting Group. Mike is a visionary in distribution. He's
worked across many industries, different parts of distribution, different
sectors, including construction, industrial, OEM, agriculture, healthcare,
you name it. He's done it.

He's also a senior research fellow at the National Association of Wholesale
Distributors, and also a faculty member at Purdue's University of Innovative
Distribution. Mike, it's really exciting to see you again. I enjoyed meeting
you at the NAW conference in Washington, D.C. I also attended your session,
and we're really glad that you're here at the DCKAP Driven Podcast. Welcome.

Mike Marks: Well, thank you very much. Yeah, it's the first time we've
gotten together since we're, and if you think back, it was early in the
morning, we're already talking about artificial intelligence. And here we go
again, you know, so.

Karthik Chidambaram: Absolutely. Well, thank you. So yeah, what's up, Mike?
So how's everything going on your end?

Mike Marks: Well, I mean, I think we’re going well, let's just say that when
your company's growing at 10 percent a year, and you're in a stable business
environment, nobody needs a consultant. But when you're going through all of
this chaos, right, and everybody's trying to do things for the first time,
it's very frustrating. It's a great market for consultants.

There's actually more more work to do that I'm willing to do at this point,
simply because I'm supposed to be semi-retired now and I just basically sit
on some boards, and Mike Emerson has become our managing partner several
years ago. And so I don't even do projects. I do advisory stuff, but
everybody's trying to figure out what to do.

And there's kind of a- it's interesting. I think we talked about this a
little bit with the NAW thing, but a lot of people were slow when the
internet and the World Wide Web and e-commerce came along, and they were
kind of lagged behind and they raced to catch up. And what's happened with
all this AI stuff now, everybody's got a disease called FOMO, fear of
missing out.

And so there's, all of a sudden there's, everybody's an expert and
everybody's running around. And so I've basically just been spending my
time, most of the speaking I've been doing is trying to just, I don't want
to say dumb it down, but just talk about what's the practical side of it for
people because there's so much hype here.

I mean, it's mind blowing to me, but so there's plenty of stuff going on.
There's lots of things to do and I still get time to race cars and have fun
and keep taking my girlfriend out and have fun. So, I'm just an old guy
that's happy and a little bit crotchety.

Karthik Chidambaram: That's awesome. Let's talk about race cars as well in a
bit.

I'm curious to know about IRCG. I've read a lot about IRCG. I read your
blogs. You know, you offer a lot of great insights. So for the audience out
there who are not very familiar with IRCG, tell us what is IRCG? Indian
River Consulting Group.

What do you guys do? And also, how did you come up with the name IRCG? You
know, it's a cute little name, four letter domain, not easy to get. So tell
us about the story behind IRCG.

Mike Marks: Well, actually, we started the company back in 1987, and I used
to be the business development guy for a large English company like Service
PLC, and I bought electronics distributors for them in the United States.

And I came up through distribution, came up sort of through sales, ended up
running some electronic semiconductor distributor for a while. We were
acquired by Lex service. I ended up moving into business development because
I knew everybody and then finally just got tired because I couldn't, I was
traveling.

Let me put it this way. I had a home in London and I had one in Manhattan
and commuted almost weekly and it was just my life just got nuts, and so I
left decided I was going to go be a professor and and move back to Florida
and and true story second ex-wife actually decided 11 days and moving back
in with her that it was she's going to get a gun and go shoot me. So
needless to say she was not successful.

And I moved out, started a consulting business and we were either going to
call it Roger and Mike's Excellent Consulting Company. Or when you look out
the bathroom window, you can see just the corner of the Indian River Indian
River. So we finally picked Indian River Consulting. I'm glad we picked the
latter, but we didn't know at the time.

But we just work with distributors on B2B, in B2B markets. We don't do B2C.
So even, like we've done a fair amount of work for Procter & Gamble,
which is a large manufacturer, but it's only on their B2B markets, you know,
not B2C.

And most of our work has been with distribution. So we're, you have high
competitive intensity. A lot of times the products are essentially a
commodity. There's nine guys, the dumbest guy in the market controls
pricing. And so we've been doing that since ‘87.

I spent a lot of time at Texas A&M back in the beginning. And then ended
up switching over, you know, when Purdue took over the University of
Innovative Distribution. So, we just, we do consulting projects. We've done
some big projects that have been like over a million dollars. And, but we've
worked with small companies, big companies and with manufacturers primarily
just on channels to help them understand what, why they need distributors
and how much money they should make.

So, I could go on forever, but-

Karthik Chidambaram: No way. Interesting. So it's something like McKinsey
bought for distribution. So you come in, you look at what's out there and
you get an outside perspective as a distributor. Let's say I'm a
distributor. I get an outside perspective on what I should be doing, what I
should not be doing.

What am I doing? Well, so you help with strategy in terms of, Hey, how do I
take the business forward?

Mike Marks: We do a lot of strategy work with people, but strategy always
starts from the outside in with customers, you know, in terms of what value
you're bringing to the market.

But we have we'll typically do an assessment if, and typically somebody that
hires this is typically already used one of the big companies, and if you
look at the- We have a lot of respect for McKinsey, by the way, McKinsey's
actually added, created a practice called distribution, and it's only two
years old before they lumped everything in before they've actually got some
really sharp people in there and do neat things, but a lot of times they do
the analysis themselves, and it's very hard for some companies to execute
and implement and manage the change that they're doing.

So, what we typically do is. Well, somebody has a problem. They keep trying
to fix it. Their diagnostics are wrong. They end up calling us up and they
say we need some help doing this. And then the first thing we do is we do an
assessment. And if you were distributed, we come in and it turns out your
brother in law's the BP, a supply chain, and he's an empty suit.

And so you have to, you know, you actually assess what's working, what's not
working, and then help them fix their problem and move on. We, you know, on
advisory stuff, we'll do an occasional retainer thing, but mostly it's fixed
price and projects and deliverables.

Karthik Chidambaram: Very interesting. And it's also very interesting that
you started on sales. You started with sales. And from there you moved on to
entrepreneurship. It's really interesting.

And sales is fun. And sales has also evolved over a period of time, I would
say, because it's not just about selling, selling. Hey, you know, it's
consultative. Hey, what value are we bringing to the table? And let's say,
even if we do not make the sale, how are we helping the distributor? So
excellent. Mike.

Mike, I want to talk about AI. You know, we hear a lot about AI, everywhere.
So how do you define AI for a layman? Right? So let's say I'm out there. I'm
just getting started, or I'm not too familiar because this is a question a
lot of people have, you know, they're not too familiar with AI.

Again, you know, we hear it a lot. Maybe the geeks or people in tech, they
are very familiar. But for some, you know, it's still not. It's a buzzword.
So as somebody working in distribution, should I be scared or should I be
excited? What is AI?

Mike Marks: Well, if people get in routines and, you know, we sell a lot
more painkillers than we do vitamins in this country, or in every country,
there's an old saying that nobody likes change with one exception and that's
a wet baby.

So if somebody's in their little group and they go, it's Thursday and so we
always do fish on Thursday or whatever it is they've got, they're probably
going to be terrified with this because it's going to create a lot of
change, tons of change. But, if you kind of go back and take a look at it
and you look at the history of global economies, or especially the North
America and the US, and you look at the rise in GDP, even with the
depression and the Great Recession and wars and everything else, the trend
line just keeps going, the quality of life and the economic value keeps
improving all the way through.

So, as a country, and as a global world, fortunately, on the planet, we're
going to be more efficient. There'll be creating more jobs, a lot of old
jobs will go away. So it's going to be individual for each person. But, this
whole AI thing's been around for a long time. All the hype that's out there
now, it's all around large language models.

And it all started with OpenAI when they released GPT 2, and then GPT 2
started, that started bringing people in the business community, and then
GPT 3 just punched it all through. Everybody got freaked, and I think it was
the media in the beginning. Because, and when GPT 3 came out, which is- and
again, this is just a large language model that talks to you, but, but when
it came out,

every, hang on, sorry, I forgot to get, turn off my phone. Sorry, I lost my
train of thought, there's an edit there, but, but

when ChatGPT 3 came out, people got all freaked out because it was the first
time a piece of software that they were running in the cloud and actually
taught itself how to multiply two digit numbers and it was never part of the
instructions or what they're supposed to do.

And everybody started to think ‘Terminator’ and ‘Skynet’ and all these
movies with Arnold Schwarzenegger, and it's the end of the world that taught
itself. I mean, it's a very small step. But, when you start to be able to
have conversation, everybody, that's what made all the hype, but every
distributor's been using AI all along.

If you go back to what machine learning is, I mean, I was one of the
original guys with LISP back in the 80s, and then it was a beta test site
for Borland and Prolog, which were the two predecessors to any of this. But
if you talk about machine learning, distributors, I mean, you can go back to
your Prophet 21, and Eclipse, and N4SX Enterprise, and all these other
packages have already built in symbolic logic.

It's probably the most unused feature that any of these ERP systems put out,
but it lets you set up if then else. And if you look at AI, what AI does, AI
automates easy things that we used to do, and it does them faster and
better, and goes through the whole thing. It just, it allows you to predict
and solve things instead of having to do everything by yourself mentally, it
actually does a lot of the work for you.

And a simple example, we were involved developing the- and this is going way
back with LISP- putting the architecture together to how do you make
Campbell's tomato soup. And it's not somebody in an apron with a big fat- I
mean, it's like a fat, it's awesome actually, what they do and the chemicals
and, not the chemicals, just the control system and the process.

And so what you did with LISP. And it was basically back then it was all
just Monte Carlo simulation linear algebra. You'd come up with, all right,
there's 20 variables. What's the temperature? What's the humidity? You know,
all these other things. And what you do is you put together a set of ranges.
And so what happens once you get the pattern set up, anytime something
happens, the software tells you what to do.

It does it for you automatically. And so, you know, the if-then else in a
distributor, typically what happens and this would be a customer example. If
the customers got an active AR, right? We know they're an active customer,
but they're a departing customer. If they bought from us, they bought from
us this year, but we have no AR. There may be departing, you know, and 90
days later with no activity, then they're X.

And so you can start to measure. Once you set that up, it's a simple
statement and any Prophet 21 is an example. And so if customer class is a
And if it's been 60 days since we've had an order from them, automatically
generate an email from the sales manager to the sales rep, said what
happened at Acme Screen Door and Missile Supply, and let me know, and then
copy the sales manager so that you know the system sent the letter to the
sales guy.

The whole point is making people aware of things so they catch it. The
problem in distribution is it's easy to describe and it's hard to do, and so
many things fall through the cracks. As an example, a lot of times
distributors, they call up somebody that just wants price and delivery, they
give them a quote, and it may turn out that they're the lowest bid, but
everybody's so busy doing quotes, nobody's got time to follow up on it, and,
and so we never get the order.

So the whole idea is that AI, and, and the people already paid for it, but
nobody uses it. Now we're talking about a lot of other tools that are out
there. And how do we do it? I mean, when a lot of things that you guys do,
where you're sort of how you link outside and inside sales together, so
they're not dropping the baton.

That's an example of AI or machine learning. It doesn't involve a large
language model, but everybody's got all flipped out because of these large
language models, which is a whole nother discussion. Sorry, that was a short
answer for a consultant.

Karthik Chidambaram: No, I mean, I love it. Actually, it's very interesting.
So you talked about AR and, you know, it's kind of a nudge, right?

So let's say I have not placed an order or there's a quote out there, but
then the order did not come through. The system sends a nudge. Hey, did you
not place the order? Like, I'll just give you an example. Now, this just
happened to me. A couple of days ago, I was, I mean, I use a GoPro camera.
I'm just dabbling with it.

I bought a subscription for a year and I completely forgot renewing the
subscription. And then what happened is my credit card expired too. Right.
So, I mean, whatever credit card I'd given there, you know, it expired. So I
got an email, you know, it said, Hey, so if you want to renew your
subscription right now, please update your credit card.

And then I'm going to give you a 30 percent off. So I thought, okay, you
know, 30 percent off. It's a good deal. So let me just take it. And I just.
Make sure I just picked up my credit card. I put it in there and I renewed
it. I mean, maybe that's a good example of AI as well.

Mike Marks: But if you just think about it, it reduces that, just reduce
customer churn from whatever subscription you had and the whole point is
just how do you make things so easy? You're taking friction out of the
process.

And anytime you have an artisan process, you. If you think about it, in, in
in artillery, you used to have to have a forward observer that get up, hide
behind a tree looking at the enemy and wave flags so that the people back
there could aim their cannons, but if you're waving flags in front of the
enemy, a lot of those guys got shot, you know, and then it all thing turns
into digital.

And now all of a sudden, if somebody fires a mortar. With the radar, we can
have a round going back within six feet of where they landed, and all that
pops up on the screen. It doesn't, it, it will, it can be automatic, but
there's always a person in the process in the military, and they can sit
there and they have the button to hit.

And they can just sit there and, and so they control it. But think about the
implication of that. If you look at a artillery round or a mortar round as a
sales call, what happens if you actually create a synthetic sales agent for
your, for your sales people, and all these little things come up and it
generates an email to the customer, it says, Hey, you have an order.

I, you know, this stuff's getting hard to get. I want to make sure I got
your coverage. You know, do you want to place an order? It generates email
and sends it to the salesperson, so the salesperson could just see a whole
string of these and just go click, click, click, click. The salesperson is
not being replaced, they're in control, but the whole point is that the
technology allows them to deal with larger territories and be more
effective.

Gartner's done some really neat work on that, in what they call a synthetic
sales agent. And, and what I think is neat about Gartner is they're putting
it all out in the public domain. All you gotta do is just go in and ask, and
register as a client, and you put your email in, it doesn't cost anything,
and you get it.

Karthik Chidambaram: Oh, absolutely. It makes one very efficient. But I'm
just curious, you know, because you work with a lot of distributors. Are
distributors really applying these techniques? Or how do you see the
adoption?

Mike Marks: Well, there's two things that are going on. Number one, I can't
tell you the association. But we just did some work on AI for a large
association full of distributors and their manufacturers and the rest of it.
And what we were going to do is I was going to do a 90 minute keynote, and
then I was going to do a panel of early adopters on AI.

And the point wasn't to find out their secrets also, what they were doing,
but to get them to actually share, well, what's it like when you start? How,
what was your first step? What, you know, if I'm thinking about it, what
should I do? We couldn't get anybody to volunteer. And they said, well, we
just couldn't get anybody to come up and do it.

And then it just, I know a fair amount of people in the industry and I was
talking to some of them and they go, oh, we're spending tons of money on
this, but there's no way in the world I want anybody to know I'm doing it.
So it's still very early days. And the people that are doing it don't want
to share what they're doing because it's, it's, it's not a best practice
yet.

It's an innovative practice and they don't want to give up their competitive
advantage. Most of the applications you've seen, large scale, and I'll go
back to large language models now and most of the large language models
implementations of scale have either been how to cheat on homework, or how
to do non consensual pornography. I mean, those are the major apps that have
been put together, you know, and there's all kinds of-

Well, you and I are both sort of closet nerds. And so we see a lot of things
that most distributors don't see in terms of the newsletters and the various
things that are going on. And there are people that are using AI now, the
Aligned Language Models have like put together an intelligent chatbot.

Most people get really frustrated with chatbots because they're just, it's
just linear programming. I mean, it's just irritating. But, actually, if you
think about it, if I once let a customer come in and they have a portal on
my website where they can come in, which is how they get to see their prices
and available to sell and all the rest of it to do, especially if I'm going
to do a punch out with them.

But, once they come in, I can actually upload all of their information and
give them a chat bot that only works when they're inside the firewall. So I
can actually give them actual prices and do the rest of it. And all that's,
I mean, there's all kinds of alarm that there's, I would say, there's
probably more distributors playing with llama right now, because it's a
smaller model and when people- And they can actually run the whole thing
without it being in the cloud, just through the API and, but anybody that's
concerned about security, they're typically open AI is the big winner right
now.

And they'll go out and they get a private cloud and they put out, they use
the API. So they've got all their core ERP stuff, and they crunch this thing
through the API up in the cloud, but all of a sudden you can actually create
a useful chatbot that does some work for people. Simple example won't say
who, but if somebody's sitting here on the phone, right, and I've got a
phone app and I've got a contractor out in the field, and they can just pull
up their last hundred items that they bought, which is the hybrid purchase
rate, they can see the last price paid. They can sit there and order it.

You've got a little app that shows, just like Uber, where it shows where the
truck is because there's no address when you're a new construction. And the
other button is for something they need they can just hit a button all of a
sudden they're FaceTiming or doing something else with their inside sales
rep. So, if all of a sudden they can talk to their inside sales rep about
something they're doing logistically, what is that going to do to the role
of the field salesperson and we're just now starting to see the impacts of
that people are the big issue to me with AI.

And it's the same thing with CRM. Any technology lends itself really well to
having a defined process, but selling has typically been an artisan process
that every salesperson does it the wrong way. I mean, we've had this
conversation before. And, you know, once you put the process together, it
makes it real easy, but we're seeing people lay this technology on their
existing models where they don't have processes, right?

And they're thinking, I put the CRM and it's going to give me a process. No,
it's not. It's just going to give you a bunch of data and irritated
salespeople. So, to me, getting the process right and what it is you're
trying to do, then you create, then you can go back to the old Toyota model.
You know, in terms of chosen and, you know, we must get this process in and
get it right.

And then you're trying to improve your first pass via viability or
credibility or yield. And so you just make the process more effective and
people haven't gotten that far. The other issue, as long as I'm dumping all
this on you, is that when we go into unscrew a CRM implementation where
they're stuck in pilot purgatory and the sales people are just kicked off.

One of the main things you find is that their sales managers don't know how
to be a sales manager. They know how to push deals in quotes, and so they
push all this stuff out there, but they don't know how to improve the
selling skills and the time allocation, the sales reps and the rest of it.
And so what we found in several cases, the first thing you had to do to fix
the CRM is put the sales managers through some coaching and build a sales
management process.

What are they supposed to do? Where's the value they're adding other
interning sales people what to do? So, sorry, I got carried away. I'll be
quiet.

Karthik Chidambaram: Oh, very nice. I mean, I love this. Actually, it's also
right. So it's about the process which you talked about. How do you make it
efficient, and even talking about chatbots, right? I mean, you rightly put
it.

I also hate chatbots, but then it depends on the chatbot I'm interacting
with. Let's say if I am interacting with an Amazon chatbot at amazon. com, I
don't really mind. I actually love it because whatever information the
chatbot asks me, I really don't know why, right? Because I do think that
that's going to help me. It's going to save me time. So I don't mind
whatever Amazon asks me.

Let's say I have a problem with the order. It just asks me some information.
I key it in, but let's say if it's another chatbot and they ask me, I say,
‘agent, agent, agent’. And the reason I have, the reason I say that is
because sometimes I feel I'm just wasting my time talking to the chatbot.

So yeah, I mean, I think it's evolving as well And there's definitely a
thing or two we can learn from how Amazon does things. Yeah.

Mike Marks: Well, and if you look at Prophet 21, Eclipse, SX Enterprise, the
big ERPs, people are actually trying to create their own AI themselves, you
know, and Epicor had Eva and Infor had Coleman. Now, they've both dropped
both the names because they've gone to the next generation, but the whole
idea is it's going to end up like, like Ironman and Darbus, and we're very,
very close.

I mean, Apple just this week. Just made a major announcement in terms of
what they're going to do in terms of plugging Siri into GPT 3, which was a
big decision for them to pick because there's so many other choices and Tim
Cook's actually built sort of their own model.

It's kind of a merge. They're taking a very different approach to large
language models. And so that's been kind of a topic of conversation. So I
spend an hour a day probably reading these blogs and doing all this stuff
trying to keep up with it and I can't keep up with it an hour a day and I
actually know a fair amount about it.

So I don't even try. I'm just trying to figure out, what are the business
applications going to be? And so I just kind of look at what, can people get
on the ground and get it working. I mean, there's some neat stuff, you know,
because you integrate a lot of different silos, but when you start thinking
about Salsify and Marketo and, and any kind of CRM people have, how do you
pull that together?

And the power of actually applying some AI to looking for the patterns and
that that can actually become predictive. I want to be able, the technology
is there right now that can tell a salesperson, where are you going to get
the highest yield on your time? In terms of investing your time. And if I'm
a sales guy on commission, I really value that.

But most, most companies totally screw up their CRM. I mean, I just, I
cannot believe how we continue to do it wrong, you know, and it's just, the
salespeople should be designing it, not the managers.

Karthik Chidambaram: No, absolutely. And also companies like Epicor or
Infor, they're really well equipped to be very successful in AI because they
own the data, they own the ERP, they have access to all this data. So, you
know, it's really, really interesting.

So, Mike, you also talk about letting customers drive digital
transformation. So what does that mean? I found that to be very interesting.

Mike Marks: Well, everybody's typically- Jeff Bezos says we, most businesses
are looking through the wrong end of the telescope. And what they're doing
is they're trying to push, push, push. How do we sell? And I care about you
a lot, but what I really want is a big order.

And his view is that we don't sell anything. Amazon went- and this goes back
to his shareholder letter in 1999, back when they were just getting out of
the book business- and he said, we, we are not a sales organization. We're a
customer sourcing organization. And we want to take friction out of the
buying experience.

So you can be in a hotel in your jockey shorts at midnight, and you can be
buying a garden hose that you're going to use that weekend. It's just trying
to make it really easy for everybody. And so when I say let customers drive
your digital transformation, when we talk about putting a digital roadmap
together for somebody, the first thing we do is we go out and we obviously
do a literature search, what's going on out there.

We have the salespeople identify their tech savvy customers. And we
interview a small set of tech savvy customers. We then go out and just do
some broad based market stuff in terms of just, if they're in a contracting
business or roofing, then go out and talk to a bunch of roofing contractors
with three questions about how much they care.

And then what you do is you go back to the company and you say, you want to
build a picture of what is the North, what is your North star digitally in
say five years, just arbitrarily pick a number and you look at the tech
savvy customers and say, where are they going? Because, you know, Henry Ford
always made the point.

He said, if I would have asked people what they wanted about transportation,
they would have wanted a faster horse. They didn't even know it was a car,
that was an option. So what happens, you go back and you're talking to
customers looking at how they're going to compete. You build a list of ‘who
do you think your biggest customers are going to be in five years?’.

I want to be the one that attacks every customer because a lot of people are
going to get left behind. This is the way you talked about, people should be
afraid. Because there's already a large gap of people doing digital
transformation, those that aren't, and that gap's getting wider and wider,
but when you go back and people start to put these tools in place and get
things going, all of a sudden they start to win and everything ends up
commercially being a lot stronger.

So, you think about it. Five years from now, I want to be the answer to
those tech savvy customers. They don't even know that they need this yet,
but I take a guess about what capabilities I need to create over the next
five years. So when we get there, I'm the blindingly obvious choice for
those customers.

Yes, I get a premium for what I'm doing. That's what Michael Porter called
‘competitive advantage’. I'm getting a price premium and a cost advantage
because of what I've done is I've skated to where the puck's going to be,
and then everybody else is playing catch up because nobody's going to even
notice it.

So. What you want to do is, we went back to this one, actually, I just
mentioned riffing. We went back to a company. They thought they were way
behind in their customers and it turned out the customers already thought
they were really digitally savvy and smart and they were ahead of the
customer.

So we said, look, if you're going to do digital transformation, you need to
be prioritizing what you're doing internally. The lower you're selling
general administrative costs, take your, you know, streamline your
processes, make things faster. It's the gross of flex AI deal that you and I
talked about at NAW, what they were able to do is take what we usually would
take them with a new customer, two to three days to set up and get it down
to two to three hours, you know, made a huge difference.

So, the advice we gave the client is that look, yeah. Yeah, pulse the
companies, make sure you're staying up with the companies, the customers, so
they see you as a leader, don't ever lose that position, but be spending the
time internally to make yourself more efficient in terms of lowering your
costs and improving your ability to grow.

And so, if you keep thinking about what the customers are going to need that
they don't know, how do you get that information? And by the way, you're
never going to get that from your own sales force. I mean, everything a
salesperson does is clouded by negotiation. Even a buyer that says, I want
you to give me a really good price on this and the salesperson does, in the
lowest price, the buyer's still going to come back and say, you know what? I
gave you an opportunity to bid and you really embarrassed me in front of my
boss. Can't you do something better?

It’s lying equals negotiating. So, everything they do is colored by
negotiation. So, typically when you talk about those kinds of interviews,
it's got to be above the transaction level. It's usually Senior executives,
we actually coach the senior executives on how to interview customers, and
you'll have a senior executive in operations and finance and HR because they
don't have to pretend they know, they're just asking real questions.

So that's kind of our rant on that. And, actually, I care a lot about that
because everybody makes their strategy and their own little echo chamber,
and they only talk to each other. And they miss all kinds of major changes.

Karthik Chidambaram: Oh, very interesting. So we work with, as in
distribution, one of the largest roofing distributors in the country. And I
had a similar conversation with Patrick Garcia. He's the VP of innovation
there.

I vividly remember this, you know, I met with him in his office, I think
probably about 6 years ago and he had a big vision. Hey, this is what we're
going to do. And he had a drawing board. He drew a lot of things. I'm going
to go talk to the roofing contractors out there, you know, we are
interviewing them. We are building an app and I already have a prototype.
This is what I'm showing. I want you to do this and all that.

Right. I thought, you know, Patrick was all over the place and all that. I
wasn't too sure. Hey, it looked like a really, really big dream for Patrick
to do this. I didn't tell it to him. Look what happens. And, you know, he
built a roof farm and, you know, it's actually widely used by the roofing
contractors out there at SRS distribution.

And it's really helped the growth, you know? So it's really very nice that
you mentioned that. So. Yeah, very interesting story.

Mike Marks: Well, people get so internally focused they forget it's really,
it's not all about them, you know, and it's just, it's what's the value you
can bring. Can you make your customer successful?

And part of the problem to me, there's a big difference between a
professionally managed distributor and a lifestyle distributor. And a
lifestyle distributor by definition is when the owner of the capital is also
the senior executive. If you just go to Wikipedia and start to look at it,
people will, when we're professional, and they get all mad and say, well,
that's the definition.

But, here's what happens. Most distributors get involved and they're doing
the same thing over and over and over, right? And they just kind of get into
this routine. This is what we do. And if I need a new pencil, bring me the
nub, turn in the old one. And I'm just, I'm very frugal and I don't spend
money until I absolutely have to.

I mean, you're in the technology business. How many times have you been
involved with a customer? And there are three versions back. Or four
versions back on their ERP. They didn't want to keep up. They've done all
these modifications. They've gone down a rabbit hole. They've dug a really
big hole. It's hard to get out of.

So, what you really look at is a professionally managed company invests
ahead of the market. When a lifestyle business, all of a sudden I've got my
inside sales people screaming and yelling on their ERP because it's not
working and I'll finally, if they yell and scream loud enough, I'll do
something about it, but I wait until it's absolutely critical before I'm
going to spend any money.

But a professionally managed business says, I'm going to, I put a plan
together. I think I can grow X. So I'm going to invest right now and expect
to get the results, a lifestyle business says, let me get the growth first,
then I'll put more stuff in. And so they just sit there and it's like this
endless loop they go through.

And that to me- and by the way, I've, I will not name names, but I've, we've
worked with 2 billion lifestyle businesses. Where the owner of the business,
you know, shows up in a branch and actually starts to rearrange products on
the counter, which is dumb as a rock. And, but he, He's the king. He owns
the gold. He gets to do what he wants. That business isn't worth nearly as
much as a professional.

I'm seeing 30 million dollars of plumbing distributed. I'm a big fan of it.
It is, I mean, 30 million bucks, but they're extremely professional. They're
investing ahead of the market. They've got a strategy much, much like you
were just talking about our ripping example, but it's more about leadership
and vision.

And those, those that are building those businesses are going to do very
well with all of this. You don't have to. The cool part of this whole thing,
Craig, is it used to be to play with the big boys, you needed to be a big
company, and all this technology stuff has been the great leveler. It's, all
of a sudden, it's what happened when people started, when they invented the
firearm, because before, if it was a lance or a broadsword or anything like
that, you had to be big and have muscles, but once I had a gun, somebody
little could kill somebody that was really big, and it was, technology's
done that for small businesses.

A small business that really wants to do something can be kicking a big
company’s butt, seriously, because if they can create solutions for their
customers, you know, RFID tags, and if you look at some of this stuff, a
simple example, Lawson products, you know, the fasteners. Right. Instead of
having salespeople going out waiting for people to order, they actually put
strain gauges in these little things, the fasteners with the washers and
screws and the strain gauge actually tells them what the inventory is in the
bucket.

And so the replenishment all becomes automatic. That's a perfect example of
using technology to take friction on the process. The key advantage is that
doing that saves sales, wasting sales calls. We don't need them anymore. And
the customer never runs out of product or loses one of their technicians to
go to a shop to get something.

Sorry. I got carried away again.

Karthik Chidambaram: No, I mean, I love this. I mean, technology is a great
enabler. It works the same for the rich and the poor, a rich company or a
growing company. It really doesn't matter. You know, it works the same. I
love this.

And also Bob Iger, the CEO of Disney. He talks about innovate or die and
don't do the same good thing for too long, even if you're very good at it.

So I want to shift gears a little bit and I want to talk about Peter
Drucker. So you were friends with him and it looks like you also worked with
him. Tell us about that. I'm really curious.

I mean, management guru, we have read a lot of his books. We have read a lot
of his writing. How was it like working with him and how was it?

Mike Marks: It was intimidating. I mean, this was, well, this was back in
the late seventies and early eighties. He was my faculty advisor at
Claremont graduate school. And he ended up, we ended up being friends. My
boss was, had gone through the program before there, and he was my partner.
He ran an office in Beijing for eight years.

And Peter gave us exclusive rights to all of his intellectual property to
teach in China. So we were teaching the knowledge worker and
entrepreneurship and the rest of it. And a lot of, anyway he taught me how
to ask questions and, everybody, we actually had a class in graduate school
called work.

Everybody talks about management and they talk about all this stuff. He only
talks about what's work and how do you get work done, which I thought was
fascinating. But, he would, he was hard to take notes with because he'd just
start telling stories and the stories were all fascinating. And you're just,
you sit there like 20 minutes in, you stop writing it down because you go,
this makes no sense.

He's just telling stories. And what would drive you nuts is that the last 15
minutes of class he takes all these stories and puts it all together and you
see this wonderful model of how all these things work and you go, holy crap,
Batman, I should have written that down, but just in your head, just
explodes.

But I mean, there was an old joke because we used to have, we had dinner
classes and so it was, it was an evening class and he'd lecture for an hour
and then we all sit in the faculty lounge and, you know, have good
California Cabernet and dead cow and, and everything was good. And, and then
we'd go back and lecture some more and it was just the conversations that
the joke was, you could tell how smart you were by how long it took you to
sit with Peter Drucker before you realized how much smarter he was than you.

So, but it was fun. I mean, he just, this is back in the days of blue books
with you had to write essays. You know, because, I mean, people actually
read things there instead of doing digital scoring, but it was, it was
something.

I was actually in China at the time, but my partner, Bob, was actually our
pallbearer at his funeral, and his wife, well, anyway, it was just, it was a
wonderful opportunity in my life to be around them, and I learned just a ton
of stuff from him, and, and I wish I had done more in terms of, like, taking
pictures and doing all the rest of it. I mean, but we were just everybody
just busy. It was a very exciting time in my life.

Karthik Chidambaram: Oh, very nice. You know, what's the most important
lesson or great lesson you, you learned from him, you know, so what is one
thing or two, you know, you took it out for him and you apply that at your
work.

Mike Marks: I would say second order thinking or thinking on first
principles a lot. Elon Musk thinks with first principles, which is, and
you're just thinking about, he basically said, everybody's very quick at
coming up with answers. And what you have to do is you really have to do
second order thinking, which is a lot more complex.

Charlie Munger, who used to be the co-chair of Berkshire Hathaway before he
just passed away last year, was very big on that. Howard Marks, who was
probably one of the best debt executives on the planet, basically said it's
supposed to be hard.

Anybody that finds it easy is an idiot, you know, but the thing is, you
actually just think, well, all right, I have an opinion about something. All
right. Why do I have my opinion? What's my data? What things could impact
this. Peter Drucker used to make us write down what we thought was going to
happen in the next three months or six months.

And we'd actually have to do our forecast and just, you know, writing things
down, turning it in and he, and we had to put it in an envelope and gave it
to him and then he'd give it to us sometime later. And we'd have to go
through and talk about what we, what we got right. And what we got wrong.
And the key reason we did that was because there was always information at
the time.

The things that I missed is because I wasn't looking and thinking broadly
enough about what things are going on. That was part of how we taught second
order thinking. It is what, what was in my deal when I made that prediction
that I didn't think was important or I wasn't thinking about. And so when we
talk about data and the, and the ERP companies, They think they have all
this power because they have all the transaction data, but that's all they
have is transaction data.

And when you start looking at real marketing and using AI, it's taking data
that's outside the enterprise and integrating it back. I mean, there's a
whole, and what's really frustrating to me is that. We do that for clients,
and a lot of other consulting companies do it for clients as well. It's not
like we're the only ones, but when I was at Texas A&M, we tried to set
up a 3 day workshop on how do you take external data integrated to your ERP
and do with it?

We couldn't ever get anybody to sign up for it. But you say, how do you get
your margin up to 200 basis points and everybody signed up, but it was just
frustrating with the powers in the data, but it's going to be outside the
enterprise. That's where you really get the power. So, asking questions and
thinking about second order thinking and then Richard Benjamin, who's the
physics professor at Caltech that my dad went to when he did his graduate
work.

He was one of the guys who worked on the Manhattan project. And he was very
much in the first principles and second order thinking, too. And so if
you're sitting on a board. The executives are in charge of the company. I'm
not going to do anything like that. And so what I'm basically going to do is
they're sitting here talking about all their problems and then what I do is
I just sit there and I'll think about it and I'll ask one question and
you've done a good job when all of a sudden it's dead silence in the room
and everybody goes…

You know, it's kind of like, holy crap, Batman. I never thought about that.
And then it takes, you know, you're what you're trying to do is make people
more aware of the alternatives that they have in any given situation and the
consequences of those alternatives, right? Because, which some things I can
make a placeholder about, which doesn't cost me anything to reverse it.

Some decisions, once I make the decision, there's a high cost to reverse.
It's a lot easier to get into the situation and get out of it. But, I mean,
people need to think those things through. And I think that's what I learned
in graduate school. Another long answer. I apologize.

Karthik Chidambaram: Very interesting. It looks like you read my mind
because I was going to ask you about company boards.

You sit on company boards. What typically happens? I'm just curious. What
happens in a company's board meeting?

Mike Marks: Well, it's amazing how dysfunctional most boards are. And I've
been in public company boards and private company boards and mostly on
distributors, although I am on a manufactured board right now. And,
fundamentally, if you're on a board, there's 3 things you're supposed to do
if the board is working properly.

Sometimes it's a good old boy network and the owner puts in trends that are
always going to support him. But, are you married? By the way.

Karthik Chidambaram: I'm married. I have 2 kids.

Mike Marks: Okay. Well, every now and then, and if you've got kids and you
understand, we all need to be taken to the woodshed occasionally. And
somebody needs to point out that we're the problem. Right. And a good board
does that, but the board has three responsibilities.

Is there a strategy in place that the management teams brought forward to
you that's going to create growth in shareholder value, dealing with all the
external disruption that's going on so the management team needs to bring
something to the board, the board gives them a corporate challenge. That and
they get it right. So we're all aligned and and we get a strategy approved.
It's going to create growth and shareholder value.

The second responsibility is to have the right people in the right seats.
And if you're on the board, it would be the CEO and their direct reports.
Anything below that you have nothing, nothing to say about and you shouldn't
even be looking at.

And then the third thing that you do is you make sure that the team is
making adequate progress in achieving the strategy. Now you have the normal
fiduciary controls like you'll, you'll sit there, the auditors for the
company report to the audit committee on the board of directors, although
the work's all done by the CFO and the rest of it.

But, what you're really looking to do in a good board, what happens is you
have a conversation a couple times a month. The CEO calls you up and-
because the nice thing, if I'm a consultant, and somebody wants me to help
them, sure glad to help you but, I'm going to send you an invoice.

And and if i'm on a board, I can't consult- our firm can't consult- for that
company It's a ethics conflict and sarbanes oxley actually prohibits it in a
public company but, and it should, so you don't want bankers, and you don't
want accountants, you don't want lawyers, you don't want consultants on the
board. And theoretically you pick directors that I'm trying to do something
for the first time, let me go find somebody, I'm going to a central
distribution center as a company instead of having all these independent
branches, well then maybe I go find somebody that's running a regional
logistics executive for Grainger, and they can still work at Grainger, we're
not competing with them, but he sits on my board, he's been there, done
that, got the t-shirt, right?

You want to have people on the board that bring wisdom and some direct
experience. And then these, these little five minute phone calls that you
get. A CEO knows that I'm not selling them anything. I'm being compensated.
And in most cases, you end up with some kind of equity or phantom equity if
there's an ownership change in terms of how that goes.

But, fundamentally, they know that I'm aligned with the owners and the
shareholders, and I'm going to help them help. And so a lot of times, it's
okay, can we go have a donut? I got a problem. I got, you know, they just
want somebody to talk to that's not going to go put me in, promote me, give
me more money, doing the rest of it.

And, the whole point is that a CEO puts people on a board that they trust,
but they know they're going to tell them the truth instead of just sitting
here taking the checks. And a lot of these companies, it's more about optics
and how things look, and people want to look good instead of do good. And a
big part of the board, in public companies, you spend a lot more time
worrying about compliance and things you have to do to avoid risk.

You know, and one of the things that Peter Drucker talked about all the
time, he said, if you're in a business You always want to focus, there's
only two exceptions, but you always want to focus on growing the revenue
stream. That means adding value to customers, right? Because that's how you
grow. And in a properly managed company, the cost stream is self regulating.

But when you're in a public company, there's so much liability and so much
risk out there. It takes some time away from talking about what you can do
in terms of the business, but you have to, because that's, you're a bigger
target. There's a whole lot more, there's many more people that care about
what you do than a privately held company.

So, but it's, we have a pretty active board practice. We've set up boards
for companies and help them figure out where they get the outside people to
do, to come in and help. But it's, it's, you're getting paid. The thing I
like about being on a board is that I'm getting paid for what I know, not
what I do, if that makes any sense.

Karthik Chidambaram: No, thanks for sharing this insider information on how
a board works. I thought it was pretty cool. So talking about race cars, you
know, I told you I'm going to come back to it. I mean, I've never driven a
race car, but I've been on one. What does it take to drive a race car?

Mike Marks: Well, you have to have a license.

They won't let you out without a license. But, when I first got my
competition license, everybody said, you must be really good. And I said,
no, it just means I've learned how to be passed safely by better drivers. So
people, the key thing in terms of competitive racing is you, you want to
have enough respect from the racers, the other racers, but they want to race
with you because going around turn 17 at Sebring.

And you're, everybody's going around there at like. You know, you're going
around there at like 85 miles an hour. If you go around at 90, you spin out,
right? But you're like right on the edge and you're three wide and there's
like room for a pack of marbles between each car. And they're all slightly
sliding in formation.

You want to be able to earn the respect of the people you're racing with.
But a lot of times people think, It's really interesting. It's about seat
time and it's about how you can be smooth and it looks like it's fast, but
you get to the point that lost the last endurance race I was in.

It was a six hour endurance race where we were running first for the first
hour. Second hour. It was my turn in the car. I lost my front left brake
line and so I had no break in the front left tire. And so going around turn
17 just, it's bad, it was similar, it was a brown trouser event.

I'm going around and as soon as I just brush the brakes, the car does a 360
and I'm going like 80 miles an hour and going down the front straight at
Sebring. With these giant concrete walls on either side, I managed to keep
it off the wall. And by the time we got it back in and got the brakes rebled
and the fitting changed and all that, came back out, we were 36th and we got
back up to 5th, but we skipped a fuel stop thinking we could make it.

We didn't make it. Ran out of gas in the last lap. So, we had to walk back.
So we were 6th, but you know, it's a lot of fun. You learn an awful lot, you
know, driving, but, what looks like skill is really, you're so used to
patterns. Most people just look right in front of their car when they're
driving.

And when I'm coaching, because I coach people, if you get a new Ferrari or a
Porsche here in Florida, depending on what you pay for it, they give you one
or two days at the racetrack. And I'm one of the instructors that sits in
the right hand seat going break, break. We're going to die in a ball of
fire.

And, but what happens, it looks like you can do this faster, just. I put a
piece of cardboard up on top of the dash so that they can't just look in
front. They have to look forward because when you're driving fast, you, you
people end up jerking and losing control of the car. You can get eyes, eyes
need to be looking forward.

You need to be anticipating where the car is going to go. And I could go on
like this for hours, but the other thing is that everybody follows
everybody. So when you're in a left hand turn lane, everybody turns too soon
when they start to make the turn. And they always end up not going to the
first lane on the left hand turn.

They end up on the outside lane, which is dangerous and sloppy because they
turn too soon. They need to drive out. And then actually it's called early
apexing. And so you learn not to follow people, but you can practice all
this stuff in the street. So it's just, it's fun.

I have no adult supervision at this point, you know, kids are grown and
gone. And, so I can spend money on this stupid stuff and it's a whole lot of
fun and it's, from my point of view, it's old age and treachery over
youthful enthusiasm, that's why I like endurance racing more than sprint
racing.

Karthik Chidambaram: It's great. How to drive a race car. I think we can
make a nice short video out of this. So thanks for those great insights,
Mike.

So, Mike, the theme of this podcast is driven. So how do people be driven?
For somebody out there who's already driven, what advice would you give
them? Or somebody who's not so driven, what would you tell them?

Mike Marks: Well, not so driven, you can also put another word on it, call
it complacent.

If every day is Groundhog Day, and what I did, I mean, you're seeing a lot
of companies doing monumentally stupid stuff right now, because they can't,
if you think about it, if you look at 23, the supply chain for many
companies straightened itself out. The companies had a lot of backlog, and
they were able to ship a lot of backlog.

And they also had the benefit of price increases too. There were a lot of
price increases last year because of inflation, you saw what the Fed's done.
But, so what happened, a lot of companies had a record year last year. And
now you have, if you talk about less driven, you have sales forces that say,
Hey, I don't want to change anything.

We just had a record year. We should be getting out of voice, and let's just
keep doing what we're doing. It worked, didn't it? So leave me alone. And,
and, but here's the problem. We now have, in a lot of markets, things are a
little bit softer. Customers are trying to claw back some of the price
increases they had to eat because of the pandemic.

So there's a lot of pressure on margin in 24. The backlog is gone. So a lot
of people are trying to look for incoming orders and all of a sudden things
get a lot softer and people because they didn't know why they had a record
year or they thought it was all about the brilliance of their sales force.

And, and they're, you know, now the sales force, we're not getting the
results and they're going, well, it's the economy, it's the economy and
nobody does anything. But if, if you're driven, you're starting to say, what
do I end up doing? What urgency do I have to get better? Right? What am I
doing now that makes me better than, than.

Well, simple example, when we go in and do an assessment, I'll sit and I'll
ask everybody, you know, you're interviewing the senior managers, what do
you see as your top three strengths and top three weaknesses, you know, just
in just self reported. And well, I know I have a lot of relationships. I've
got a good reputation.

I know tons of product knowledge. Okay, that's great. And the strengths.
What about weaknesses? And they give you this deer in the headlights look.
And I say, let me help. Let's write down lack of self awareness. Right. And,
but the whole point is that people get complacent and, and they, they drip
at the other extreme where you have people that are driven, they just got to
win everything.

And you, a lot of times, see them as being aggressive or bullies or the rest
of it. And the right way to do it, if you want to find a balance is if you
want to go fast in a race car, you need to be very smooth. It's all about
weight transfer and chassis. So smooth this fast, right? And so what you're
really trying to do is getting people to anticipate.

Instead of looking at every little issue you're in, if you're driven, I have
to win. Look at it as a series of individual games where I don't care about
winning this particular game. If I can improve my position to win the next
game, right? It's a whole series of these events. And so part of it, if you
really want to think about innovation and especially the digital side.

The shortest commodity that defines the highest probability of success is
trust and respect. So if you're a senior leader in a company and you go out
and get a CRM and you do a cram down, right, this is good for you. It's just
like you got to eat a lot of vegetables and stop drinking whiskey and all
the things people tell you.

And just remember under operant conditioning, punishment is only effective
when the punisher is present and the salespeople do the minimum acceptable
performance and not get paid or not get fired. And, and, and so nobody's
really bought into it. But if you actually can be trusted by the people that
work for you, and you take the time to answer the what's in it for me
question, and you've instead of winning all these battles, I'm driven, but I
want to be driven as leader of a team.

And, and pulling the people in the team along instead of just, it's all
about me making decisions. You, if you look at winning each iteration at all
costs, you're going to damage your ability to win the ones in the future. So
it's about building that trust and respect. And people will do things that
everybody wants to follow a good leader.

I mean, look, look at the frustration we're having with all of our politics
right now in terms of leaders. That's not even shown there. But, it's not
like I can't remember. I'm 75 years old. I can't remember. Well, actually,
that's not true. I can remember the last time I got really excited about a
presidential candidate where both guys looked pretty solid and was one you
cared about, was Jack Kennedy.

Yeah. You know, he got assassinated in ‘62. So that's how far back you have
to go. We're not in that situation of choosing from the best of the best
where everybody at this point now is who do you who do you hate the most and
vote for the other person. So if you think about the power of trust and
respect.

If a leader in distribution can do that and they want to be driven, they're
going to, it makes all the difference in the world, and we did a study for
NAW several years ago with one of our partners. It was really funny that
we're trying to interview and understand the conflict between manufacturers
and distributors.

Right. And, you know, we love you, but we also hate you and, you know, the
whole thing. And so we're out there interviewing distributors, we're
interviewing manufacturers and my partner, he'd only been with us a year and
he'd gone back and he's graduated. He used to own a liquor distributor.

The guy's brilliant. But he calls me up on the phone and goes, ‘Mike, I got
this whole thing all figured out’. I go, ‘what is that?’ And he goes, ‘the
smart guys do really well. And the dumb guys screw it up’. And I go, well,
you're exactly right, but we can't put that into a book. We can't just do
that. You know, so we had to come up with, you know, put the framework
together, but there's, there's so much that's out there.

If you can actually be trusted and start to think things through, most
people just react. They don't think. Sorry, I started wandering on you.

Karthik Chidambaram: No, totally right. So earn the trust and respect, and
it's just not about people, right? So companies need to be driven as well.

So, Michael, we interview a lot of leaders for our Driven podcast, and our
last guest was Mark Dancer, the CEO of Network for Business Distribution,
and we ask them to ask a question to our future guests.

And the question Mark Dancer asked was, how can you harness the power of
data for economic impact and social development? How can you use data in a
good way for creating an economic impact and social development?

Mike Marks: The key thing is how much can you get and there's several things
that are all linked together and everybody wants to treat them separately,
but you can't take, take four subjects, take big data and big data.

If you have big data, I'm looking at the entire universe of data. I don't
need statistics anymore. The study of statistics to me in another
generation, it'll be an arcane thing that people don't need to know.
Statistics let you look at a sample of data to infer what's happening with
the whole thing. With big data, you don't need statistics.

It's all there. So you get big data. You also have to be in the cloud
because there's no way in the world that you can actually keep all this
stuff from one site location and get access to all this. Because everything
in the internet, every, every bit of content on the internet, it's been
linked back to these large languages.

So you have big data, you have the cloud, you, you end up with artificial
intelligence. And then you end up with analytics, and the analytics is
putting the patterns itself together. AI enhances all that, and they all get
pushed together. But fundamentally, if you want to talk about data, it's get
the data, and then what, what are you trying to do with it?

I'm either trying in a commercial setting, I want to create a competitive
advantage. So if I'm a distributor, I'm getting data, I'm going to be able
to provide better solutions to my customers, and, and I don't need to charge
them more money. Jeff Bezos always said in Amazon, there's two kinds of
companies in the world.

There's the companies that always want to charge more, and there's the
companies that want to charge less. We're the second kind. What we want to
do is we want to strip out the things that they don't need. So if you need a
lot of help and support and hand holding, you need to talk to people, you
call the distributor.

If I have a part number and know what I want to buy, I'll go to Amazon
because it's typically cheaper, a lot cheaper. So, if you start saying, what
am I trying to do? I want to solve problems for the customers, and it's not
just about the price of the product. It's- what are they doing with the
product? How can I reduce their working capital?

How can I help them find new customers? You want to capture a customer? If I
can go out and help my customers get more customers? It's called C2,
customer's customer. And, perfect example, it's now part of Rexel, but it
used to be Pacific Electric Supplies sold to Royal Electric. Royal Electric
had 600 trucks, had some electric, think about how big a contractor that
would be.

And, so what they ended up doing is they ended up doing a lot of work in
helping Royal Electric as a contractor get more customers and make it more
viable for them with big jobs when they were going out and doing things. And
I can buy from anybody there's a JanSan distributor that had a hospital
chain up in the Northwest, and they were very interested in LEED and in
being environmentally friendly and sustainable and everything, and this,
this distributor personally cared about it as well and had built a LEED four
level office building.

And, so the hospital chain came to him and said, look, we can buy facility
supplies from anybody. But if you'll show us how to become lean and more
sustainable, we'd like to give you the business. This isn't about the low
price and things. It's- how can I use information to solve problems and make
the world a better place?

The interesting thing about distribution is that you can actually add value
to society and you don't have to screw anybody along the way. You can wear a
white hat and not everybody does that. It's a bell curve like anything else.
But all you're really trying to do is use that data to create solutions for
people and it makes things go better.

I think I could get carried away with that, but Mark Dancer asks those kinds
of questions.

Karthik Chidambaram: Totally. I mean, I also love Jeff Bezos as a leader.
And yeah, I think he is terrific.

So, Mike, it's your turn right now. What question would you like to ask the
next leader of the interview?

Mike Marks: Wow. Okay. I think people, their life is shaped by their own
experiences, and the reason that I'm not afraid of AI, AI and in the large
language models, they can't come up with something that didn't exist. If you
look at what, what defined you, and what defined me, It's the first time you
fall in love and weren't loved back.

It's the first time you fall in love and you were loved back. It's the first
time somebody was shooting at you. I mean, there's a lot of things that
shape your experience that were unexpected and, and that, that really shapes
your life and, and AI is never going to be able to, at this point or even
close to it, come up with things that didn't exist or envision things that
didn't happen before, because they don't have that framework.

They don't want to get those experiences. They're regurgitating what already
happened. Large language models. Only look at the knowledge of the universe,
which is all in words right now. So to me, I would go back and say, for your
next guest, well, obviously we're interviewing you because you've got some
things that are relevant to our audience, but what did you plan to do when
you were back in school?

Right. When you wanted to grow up, what were you going to do? And what were
the experiences that led you here? Because a big part of it, those would be
the unique experiences. I mean, you actually asked me about Peter Drucker.
Had a huge impact on my life for the couple of years I was in graduate
school.

And then after, but there's also other things that happen. I've had a series
of mentors in my life, and maybe the right way to ask the question is what
are the mentors that you've had that helped shape the experience? That would
be my question. And mentors provoke excellence. You hated them at the time.
And you look back and go, that guy. That guy taught me a lot of stuff. So
that's my question.

Karthik Chidambaram: Great question. We'll be sure to ask our next guest
this question.

So, Mike, we would like to end with this question. What book are you reading
right now?

Mike Marks: I just finished Tom Siebel's book on digital transformation,
which I would recommend to anybody. It cuts through all the BS, so people
can figure it out. I have just started Perceptrons, which is Lansky's book.

And I'm back into my map again, because I mean, it starts off with Monte
Carlo simulation and driving it all. I'm not sure I'm going to be able to
get through it all, but nobody really understands how neural networks really
work.

It's just kind of a black box and Minsky's Minsky's works. Probably the
seminal work in terms of how they actually go. So I'm going to, I'll
probably only understand half of it, but I'm going to plow myself through
it. And it's kind of bringing me back to the nerd desk. It's been a long
time since I've had to integrate a function.

So I'm going to be back doing some of that just playing with it. But it's
fascinating to me, my life piece in third grade. It's show and tell,
figuring things out and sharing them with my friends.

Karthik Chidambaram: Thanks for these book recommendations. Mike, I just
completed the design of everyday things by Don Norman.

And I'm just starting this, The Checklist Manifesto. So it's a checklist
manifesto. Yeah. So it's written by Atul Gawande. So it's talking about how
do you have a checklist? How can you be organized? How do you get things
right? And so I'm just starting this right now.

So, Mike, thank you so much for joining me on this Driven podcast.

I have not interviewed Peter Drucker. I have not seen him. But I'm really
glad I got to interview you and it's been a fascinating conversation.
There's been a lot of learning. You told us a lot of stories. And one thing
I loved about this is, you know, whatever you shared, you know, we're able
to apply this in our daily lives and in our daily businesses, you know,
which we run.

I really enjoyed this conversation, and I also want to thank our audience
for joining in and listening to the Driven podcast or watching it on
YouTube. So if you have not subscribed to our channel, I also ask you to
subscribe to the Driven podcast on YouTube - Driven by DCKAP.

So, Mike, thank you again. It's been an absolute joy talking to you. Thanks
for sharing all the wisdom. Enjoyed this conversation. Thank you.

Mike Marks: I did, too. We're on the same journey, my friend. I'm sure we'll
be bumping into each other again. So, take care and enjoy the rest of your
week.