Host – Grace Jennings-Edquist: [00:00:05] Is your team keeping pace with AI and as a business leader, are you across the proposed small business charter that’s currently on the table? We’re diving into both in today’s episode.
AI training: the new workplace essential
First up, Andrew Phillips from Freshworks Australia explains how accelerating AI adoption is, creating a gap between those embracing the technologies and those falling behind. He also shares practical ways to weave AI into your operations while bringing your workforce along. Then Anne Nelder, CEO of the Small Business Association of Australia, breaks down the organization’s proposed small business charter. Why it’s needed, what it asks of policy makers and how it could improve the day to day experience of small businesses nationwide. From Sound Cartel, I’m Grace Jennings-Edquist and this is Business Essentials. Our first guest is Andrew Phillips, vice president of Freshworks Australia, a company delivering AI software for customer and IT services. As artificial intelligence adoption accelerates, a new divide is emerging between owners and employees, embracing AI’s possibilities and those being left behind. Andrew explains why it’s now time for small and medium business leaders to become AI literate. He shares some simple, accessible tools that he says can improve productivity, reduce costs and future proof teams from repetitive tasks to customer service. Andrew describes some practical ways to integrate AI into your business and get your workforce on board too.
Andrew Phillips: [00:01:41] Well, of the people that we surveyed and bearing in mind this went from 18% of Australians that we surveyed used AI six months ago to 27% recently. So over a six month period, 18 to 27%, over half of them say that they’re using it to get more work done. So I think if any business owner was offered a tool that increased productivity by 5%, they would be clamoring all over it. And we’ve got a tool here that uses a saying confidentially so they don’t have a cart to push here. They’re saying that they get 55% more done when they can use these generative AI tools.
Jeff Waters: [00:02:25] How are they doing that? How are they getting more work done?
Andrew Phillips: [00:02:29] There is a large portion of work. It’s around about a third that employees feel is mundane and repetitive. And I think we know that about all of our jobs. It doesn’t matter whether whether CEO of a company or, you know, we’re just new to the workforce. There is a ton of our work that we look at and it’s mundane, it’s repetitive, and we do it every day, and it’s kind of the work that you have to get through to get to the good stuff. And generative AI can take a lot of that off your plate. So I think the question then is, what am I going to do with the spare time? Because we know that over the years from when the 20 hour workweek was first proposed, which I think was in the 60s and the 70s, we know that really never caught on. Humans want to work. Mostly the work expands to fill a 40 hour week. So what are people using it on? They’re using this extra time for 41% of people said that they were using it for doing more creative work. Now, that’s the type of thing that you want to replace mundane things with is creative things. That’s where we get a kick out of life as humans.
Jeff Waters: [00:03:33] Andrew, that all sounds fantastic. We can be more creative, we’ll have more spare time, but you’ve just described to me that I can make my employees more productive. I can increase productivity, which this country desperately needs, by using generative AI. But I’m confused. How how do we do it?
Andrew Phillips: [00:03:52] Well, I mean, we’re in the middle of the wave of generative AI, and there is a a division. There’s a divide between the amount of employees that are using it every day, and the amount of organizations who are allowing their employees to use it every day. So I think the key to unlocking these productivity benefits is for employers, which are people, but employers to create policy that allows employees to use generative AI within their environment. It’s as simple as that. They’ve got to have a policy, understand what it is, have a position on it, provide training on it, tell their employees where they can use it and how they can use it, and see what creativity happens.
Jeff Waters: [00:04:37] Wow. So you’re saying that in effect, the research and development is being done by the employee in the workplace in real time?
Andrew Phillips: [00:04:45] Well, I mean, that is the hope of every company is that that is happening. But what ends up happening is we get gummed up with repetitive, boring, mundane work. And, you know, we know every listener to your podcast now is thinking about the repetitive, boring, mundane work that they wish they wouldn’t have been doing every job. It doesn’t matter.
Jeff Waters: [00:05:06] I know I was.
Andrew Phillips: [00:05:07] Every job, it doesn’t matter. Around 20% or you know, is boring and mundane. And in the past, we’ve looked at ways of taking that out of our jobs. And and we have we’ve got great tools that visualize data where we used to have to put that data together. And now we’ve got great tools that can summarize, that can expand, that can make things more creative, that can visualize our ideas so that we can get our point across better. All of these things cut time out of our day, and it’s what we replace it with, is really interesting. And our surveys told us what people replace it with.
Jeff Waters: [00:05:43] Is there a possibility that this could backfire? That by letting my employees experiment in effect with ChatGPT or other You know, generative AI that it could cause a problem for me?
Andrew Phillips: [00:06:00] Yes. I don’t think we should be scared of that. As soon as we get scared of failing, we stop progressing. So I think we need to understand what the blast radius of potential problems can be. Minimize what that is, and understand and know what that is. We need to have systems that can alert us to where there are problems. Obviously, we’re not going to know all the time what they are, but we want innovation within organizations and it doesn’t. Innovation just doesn’t happen in engineering departments. It happens in finance and HR and IT. And we should be encouraging that. This is the great one of the great things about this tool is that freeing our time up to think about other things, but also on top of that, it’s taking what we’re thinking and suggesting things that we might not have thought about before.
Jeff Waters: [00:06:44] So is that the first step, letting your employees use it first of all and seeing what they come up with? But is there a second step? What else should I be doing?
Andrew Phillips: [00:06:53] Well, I’d say the first step is actually to for business leaders to familiarize themselves with it first and then to talk with their employees. Especially if you’re a small business and you can get everybody together in one place, talk to them about how they use it currently, how they want to be using it. You know, where are some areas that they think that the business could benefit from using it? There are outside consultants that people can can use, but also nearly every company of size uses IT vendors to some degree. And they should be asking them, what is your generative AI strategy? How can you offer me tools that allow me to use generative AI in the workforce securely? Show me that the data doesn’t leave Australia. Show me that you’re not training public large language models. Lms prove to me that this is secure and then show me how my employees can use it. The pressure needs to be on the industry, on organizations like mine at Freshworks. The pressure needs to be on us to create tools that people can use to take advantage of this new technology.
Jeff Waters: [00:07:51] Goodness me. Are there any risks in me losing intellectual property through these systems.
Andrew Phillips: [00:07:58] Yeah, there are. And I think that absolutely needs to be understood. I think there’s a I mean, I won’t name the company, but you can Google it. There’s a famous example of where a, um, a semiconductor company uploaded the specs of their latest chip to a public LM, and it became available for everybody. Absolutely. There are risks in this, and you need to understand, but there are public LMS like the ones that we know about, like ChatGPT. And then you can use GPT models in things like Azure, OpenAI, which is what our company uses. You can use these models which use the power of large language models, but don’t use your data or customers data to train the public. Llms. So this is.
Jeff Waters: [00:08:39] So it’s a closed system.
Andrew Phillips: [00:08:40] It’s a closed system. And these are the important things for business users, for business owners to understand not how it works, but what’s happening with their data.
Host – Grace Jennings-Edquist: [00:08:50] That was Andrew Phillips, vice president of Freshworks Australia.
The Small Business Charter: tools for stronger SMEs
Now to the proposed small business charter. Small businesses are subjected to complex policies from all levels of government local, state and federal. So how is it possible to appeal to those layers of police and public servants to take small business interests to heart? Anne Nalder is the CEO of the Small Business Association of Australia, which recently drafted a new ten point small business charter that’s being handed around to decision makers. The charter is a set of guidelines for lawmakers and leaders to follow when formulating policy. But let’s start at the beginning the reason the charter was created in the first place. Ann Nalder explains to Jeff Waters.
Anne Nalder: [00:09:40] In Australia, we have never, ever had a long term plan regarding policy for small business. Now they are made up of three sizes, which makes it complex. You’ve got micro, small and medium, and they all have different needs at different stages of their growth. Now, as I said, in Australia we treat all sized businesses regardless of the size, with a one cap fits all mentality. And that must stop. That’s in most cases. And you and I know that a small business, like a micro business, for example, its needs are totally different to that of a large corporation. So they are disadvantaged right from the start as to when it comes to policy, particularly in the areas of like taxation and industrial relations, just to to mention and very important ones. Now the charter is the very, very first long term reform policy. We call it a policy, even though it’s not a policy document, but it’s a first paper to actually address the issue because small business needs serious structural reform. There are very, very serious flaws. The economy is not the best time at the moment for small businesses. And so therefore they need all the help they can get. Now the charter is non-political. It is neither anti-big business nor anti unions, but it’s rather the framework in how we create those policies.
Anne Nalder: [00:11:18] And you’ll hear a lot of governments keep talking about red tape which is a very broad and loose term. You’ll never get rid of red tape unless you introduce the charter. Because the charter it’s in the way we create policy. And a lot of our policy includes red tape. Some red tape is great. We need it. But a lot of it just creates massive roadblocks for small business owners. Now, what we have done for decades and decades on all sides of politics, we keep using band aid solutions. Like for example, if you have a house or a building that keeps getting cracks in it, what do you do? Do you keep patching it up, or do you investigate as to what are the causes or what is the cause of it? And the same applies to small business. We just do Band-Aid solutions rather than going to the root of the problem, and bad policy results in bad outcomes. So the charter is the first step and the most important step in reform. If governments want to really make a difference to the operational requirements of a small business. So it’s no use talking about it. We’ve got to do something about it.
Jeff Waters: [00:12:34] So this is a charter of principles that I presume that you’re going to be introducing to state and federal governments and, uh, as guidance as to where their policies go. Is that what you’re saying?
Anne Nalder: [00:12:47] Correct. But not only to state and federal governments, but to local governments as well because it is suitable. What we have found also is that local governments are probably the worst culprits, if I can use that term when it comes to red tape itself. So it’s very, very important that we look at this. We have actually started presenting the charter to various levels of government and it is getting a good reception. But we have to go much further. The charter itself is just one part of it. There is a process that will have to be introduced to make sure it works. But if the governments do adopt the charter, it is a long term solution. It won’t fix all the problems of small business, but it will fix a vast majority of small businesses to allow them to grow, to be sustainable, innovative and all the things that we need them to be.
Jeff Waters: [00:13:43] I’m sure it’s a substantial document, but can you pull out some of the most important Aspects just to describe to the listeners what’s actually in it.
Anne Nalder: [00:13:54] Well, when you create policy in the charter, as you mentioned earlier, it has ten pillars and they are all the things that affect whether it’s a large business or a small business. And we’re talking about taxation, finance, innovation, entrepreneurship, competitiveness, climate change, all those things in there. So they’re important things and they’re important for good business practices as well. But what the charter does is use the think small business first principle. That’s what it’s been built on. In other words, in the early stages of developing and creating policy for small business, governments need to engage with stakeholders and a whole range of other people. And to use the think small first principle. What that means is they ask the question, amongst other things, how will this policy that we are about to create, how will it affect a small Business. And once you start asking those questions, you start looking at the challenges that that policy may create. See, currently, I don’t blame actually the public service because who are mainly the key stakeholders in creating policy, because if they have never been in a small business and I’m talking about long term, not just for five minutes, what they create for them, it might seem quite okay in a theoretical way, but in practice a lot of these things don’t work, and that’s where the problems lie. So if we educate the public service in how policy must be created, what to take into consideration, I think that’ll go a long way. What I have found throughout my journey regarding the charter is that when I deal with the heads of the public service like the director, generals, etc., they are actually very receptive to hear what you have to say. They’re not against it. And that’s where I hold a lot of hope because from a political sense, a politician might like something, for example. But if the public service vetoes that for whatever reason, then you’ve got a problem. But if you can convince the public service this will create in better outcomes, I think you’ve got a very good chance.
Jeff Waters: [00:16:06] The tail that wags the dog.
Anne Nalder: [00:16:08] Yeah, something like something like that. But but the unfortunate thing is the wheels of commerce turn around ever so slowly. I’d love to see things happen a lot faster. Um, but I am very, very cautiously optimistic as to where we’re going with the charter.
Jeff Waters: [00:16:25] So is it just my imagination and or has red tape been increasing recently?
Anne Nalder: [00:16:32] No, it’s not increasing. And an interesting thing is, the other day I was at a conference that was with the principal speaker being the Queensland Small Business Commissioner, and he actually hit the nail on the head in this way because he said in 1974, apparently there’s a document that showed like the regulations that we have was very, very minimal. It was actually like like I’m talking about a very small area today that has grown out to three meters in regulations, and it’s definitely increased. There are facts to prove it. But what happens with red two meters?
Jeff Waters: [00:17:13] Are we talking about the height of the documentation.
Anne Nalder: [00:17:16] The amount of regulation it would fill? Imagine a book three meters wide. That’s a true story. And this is what’s killing a lot of particularly small businesses, because those roadblocks are quite severe. Now, something that needs to be understood. We have to have some laws in place. There’s no two ways about it, because there is good red tape, which is regulation, and there’s very bad red tape. And so what happens is we’ve got to get rid of the red tape. But this is easier said than done. I know going back to when Tony Abbott was prime minister, going back quite a number of years ago, he made a promise that during the first term of his government, they would reduce red tape by $3 billion, which would be $1 billion per year. In the second year, they’d only reduced about 200 million. Huge difference. That’s a second year, and most of it was for minor stuff within the charity area. So it’s easier said than done. And you’ve also got to remember that if you reduce or eliminate one piece of red tape, which is compliance and regulation, etc., you have to be mindful that you don’t upset something else within that equation. So it’s easier said than done. And one of the ambitions of various ministers is to say we are going to reduce red tape. And I think to myself, that’s not how you do it. You do it by good policy. And that’s where the charter comes in. Because if you know how to create the right policies, that also affects regulation and all that sort of stuff as well. So that’s where we have to educate and get governments to accept that they need to start with good policies.
Host – Grace Jennings-Edquist: [00:19:03] That was Anne Nalder, CEO of the Small Business Association of Australia. Thanks for joining us on this week’s episode. Follow Business Essentials Podcast across social media and head to www.BusinessEssentialsPodcast.au for more. Business Essentials is a SoundCartel podcast. Producers are Nick Schildberger, Nicole Goodman and myself. Technical production is by Pete Letts. I’m Grace Jennings-Edquist thanks for listening. We’ll bring you more business essentials next week.
