Jason (00:00)
Hi Ryan, how are ya?

Ryan McManus (00:01)
Very well. Jason, how are you?

Jason (00:03)
I'm doing great, thanks. Thank you so much for joining me today on the Wise in Five I know you're gonna share a ton of wisdom with everyone who's listening and watching, but before we dive into our questions, I'd love for you to share some of your amazing background with the folks that are part of this today.

Ryan McManus (00:19)
Sure, happy to. So I work with a number of different organizations across my portfolio, private equity, Fortune 500, startups, mid-market on all things emerging technology, and in particular, the intersection of new value creation, new business models, and really helping organizations to keep up with the pace of all of the change that's coming through. that's largely what I've worked on for the entirety of my career. I've had the great pleasure of doing it in a number of different...

sort of categories and sectors i've had the fun of being able to do it cross-border and cross-industry and that's largely where my focus is

Jason (00:54)
Terrific. So, and we're gonna get into where you've worked because you've worked and led at some very impressive places. My first question, which I ask everyone, is where do you find inspiration just in daily life? I mean, I'm finding inspiration now. I'm on the campus of Indiana University. I think you know the number one football team in the country. We're now a football school. But I'm questioning where do you find inspiration?

Ryan McManus (01:19)
It's an important question. So I have the great privilege of working with some terrific leaders, board directors, entrepreneurs, founders, leaders across a variety of different organizations and what they're able to do in a very complicated, very complex, very fast economic environment inspires me on a daily basis. I'm particularly inspired by the people who are building out the new capabilities that are proving to be so impactful and so fast.

as we can all tell, changing things really faster than any other previous cycle. But there's also room for inspiration from people who are doing their best to understand what is happening and get up to speed with all of the change. So there's really a full scale. I've never seen anything like it, frankly. There's a full scale pull across certainly the business and the institutional community to understand where the world is going.

to understand some of the complexities, the new opportunities that things like AI, not exclusively AI, but AI is of course one of the major drivers right now, how those are changing business models, how they're changing markets, and to really try to do the right thing, both in terms of new value creation, risk management, ethics, all of the rest of fiduciary responsibilities in these organizations, taking care of their people, and really trying to move their organizations into the new economic.

really landscape that we're all working with.

Jason (02:36)
Yeah, I mean, well said. Is there anything that's not changing right now and going at a pace that, frankly, I don't think we've seen, even with the dawn of the internet, I don't think things were moving as fast as they are today.

Ryan McManus (02:49)
So statistically, we know that nothing's not only ever been this fast, but never even close to as fast as where we are today. I think that there are some things that continue to remain true in terms of looking out for your shareholders, looking out for continued value creation, looking out for what moves the needle in terms of market cap and corporate performance. Hopefully looking out for the continued development of

our talent and looking at that as a main source of value creation and long-termness of the organizations which we are part of. So I think all of that still continues. Obviously the fiduciary responsibilities that board directors still continue. They're getting harder, they're getting more complex. I do a lot of work with boards, of course. But everything else around it is really moving very, very quickly. And so every sector, every geography, every area of the enterprise, every area of the economy has been touched.

very quickly and more and more so by this wave of generative AI. Again, it's not the only technology that is changing things, but it's sort of the major driver for the moment. And interestingly enough, is driving arguably all of the other technologies as they evolve and emerge as well. So in a certain sense, everything's changing. On the other sense, part of the challenge is to continue to keep in mind the things that we have to preserve for transparency and fiduciary responsibility.

and the appropriate ways of investing and building out long-term strategies, but doing it in this very complex and arguably ⁓ unprecedented environment.

Jason (04:19)
Yeah. mean, again, well said because with everything changing, here comes the question of risk. You know, when things are changing so fast and the company and the people around are trying to catch up with it. So you were at Accenture and you were COO and then driving a lot of the strategy there, digital transformation. So you went from working there to founding your company, tectonic.io. And I'm curious.

Now what drove you to create your own firm?

Ryan McManus (04:48)
So my time at Accenture was terrific. I was the CEO of the strategy business globally, and I had the opportunity to really start Accenture's digital transformation business strategy practice from zero. And we had a terrific run and built out something that was very impactful. And so after working in the firm and enjoying every minute that I was there, my personal interest was more in returning to working more closely with engineers, working more closely with emerging technology. I actually did a couple of

of jobs at some data platforms where we were looking at not only AI, but IoT and some other emergent ⁓ technology capabilities there in the interim before founding Tectonic ⁓ IO. And Tectonic IO is really a recognition that in my estimation, based on all of the work that I've done in my experience, there's a significant gap in the market for board directors, CEOs.

⁓ private equity investors to understand what's happening without the pressure of lots of sort of big pyramids coming through and those sorts of things, but really understanding from a senior executive value creation lens, a business model lens, right? We know exactly what wins, we know exactly what loses in these technology cycles. The patterns are always the same, they've been the same for 60 years, but having access to that thinking, having access to...

the real strategic frameworks that are different than what have historically won is a terrifically fun and impactful capability that you can bring to companies in addition to actually some emerging tech in and of itself that can provide different solutions. So that's been the mission of Tectonic IO is to help very senior leaders and investors understand where markets are going to get value immediately from these changes as they emerge, but also

pilot their organizations for a longer term value creation because there's different stages that all of these phases go through. Again, we know exactly what wins as these sort of tenure cycles move through and being able to have a co-pilot with someone whose incentives are linked up exactly with yours as a senior executive seems to have a lot of value.

Jason (06:49)
That's really smart and very, very needed, especially now. And I should mention, you know, a big thank you because you're going to be part of a round table that we're going to be hosting as part of this great re which the great re for us is about AI and all the things that are having to redone and relearn and restructured. And we have one about realignment with, with boards and governance and AI. And so I can't imagine a better person than you to be part of that round table along with some other.

luminaries that we have. To that point, you've been recognized as a top 100 corporate director by the NACD. You're very tied into the NACD, especially in New York. With all your experience with working with boards and being a leader within the NACD, what do you think good looks like in a director, especially over the last few years where there has been this tech disruption that you were referencing?

Ryan McManus (07:40)
So it's a great pleasure to work with the NACD. I have the privilege of serving as a president of the NACD chapter here in New York. I also am very active with the NACD and have been for several years on all things technology and governance. And the NACD has done a terrific job leading those conversations on behalf of the board community, certainly nationally and arguably, even globally with some of the advanced thinking that has come out from the organization. To answer your question,

I'll answer it first in terms of technology and then second in terms of a broader sort of governance capability. In terms of technology, there, I think for the first time, certainly the first time in my career and the first time since I've been a board director, which I've been for many, many years now, there is a full scale pull from the director community to understand what's happening in technology. Arguably before the current wave, which is again,

largely but not exclusively driven by generative AI, the conversations with boards around technology outside of the technology industry, of course, and outside of some specific areas, be it e-commerce and retail or some very specific functional domains like that, was almost exclusively at an automation and cost efficiency purview. And it was largely reactive. Something has changed. Something is different with the board community today.

We actually wrote about this in the 2024 Blue Ribbon Commission Report where I had the pleasure of serving as one of the commissioners. One of our colleagues said something is different today in terms of the recognition of how technology is impacting organizations and subsequently governance. So there's a real pull, arguably a full scale market pull to understand what's happening with this technology, what's different. And there are some fundamental things that are different with Gen.A.I. from previous technologies.

⁓ The cycles and the patterns of what wins are arguably going to be the same, but the technology itself is significantly different, of course. And so that openness, that real intent on learning not only the risk profile and the emergent risk profile, which is complex and broad in an AI-powered economy, but also, again, the opportunity set. How are we doing this with a fiduciary responsibility, a talent responsibility, and attention to markets and margins and economic performance?

It's a real full scale interest from the director community to get our heads around how do we oversee what the organizations that we serve are doing and the shareholders and the stakeholders that we serve are doing with this technology. It's arguably one of the first times that we have a technology which is impacting every single aspect of our fiduciary responsibility as directors. That doesn't really happen every

single day. Sometimes there are things that are just operating benefits, that's great. Some things we have channel developments, that's great as well. This one is much broader as we've already talked about, and so it requires a sort of broader scale engagement, not only with the technology leaders on boards, but with the full board in and of itself. The second part to your question, Jason, in terms of sort of a broader consideration around this is

We've seen a real surge in the number of organizations, publicly traded organizations in particular, that have science, technology, and innovation committees. I've written a number of research pieces on that over the last several years. That's very useful in terms of making sure that there's an explicit carved out time to have board conversations on a regular basis around business model change, emergent risk, cyber, all of those different areas that are so important.

But the board itself also has to get more engaged with these changes because as we've seen, again, just looking at the undisputed economics and financial performance of the organizations that get this right, this is not a technology conversation. This is a business strategy conversation that really gets into the ongoing viability of the firm and the financial performance of the firm. And those are arguably the kinds of frameworks that directors have an opportunity to adopt to really understand.

not only what's happening, but to put it into its proper context as a director.

Jason (11:36)
Yep. And I so want to go deeper, but I don't want to take away all the amazing conversation we're to have on our roundtable. But thank you for teasing that out. I want to jump to the other side now. So not talking about the board, but talking about the companies that the board is there to serve. So the impact on mid-market businesses are not the public companies, but the private companies. And so for a typical mid-market company, someone that's PE back, we work with a lot of

different private equity companies, helping to evaluate and also work with their portfolio companies, evaluating diligence. But what do you think the most misunderstood part of AI's impact on valuation and competitive advantage? You were teasing it out a little bit from a board perspective, from a company perspective, what do you think is most misunderstood at this point, right?

Ryan McManus (12:22)
Well, very simply, think what's probably the most misunderstood is the very significant impact that AI is going to have on exactly those valuations and how do we model that out? How do we play it out over, call it a three to five year roadmap? Not to mention the immediate sorts of productivity and financial performance benefits that we see companies recognizing in very short order, even today with what's relatively speaking.

over the next several years, we're still at a certain point in the technology evolution, there's a lot more coming of course. So the first and probably most significant thing to grasp if you are leading one of the organizations or if you're in the sort of private equity investor community is to have a very clear understanding of the financial performance opportunities that this technology offers for the portfolio companies. And by the way, this comes in in the initial due diligence as well as with

any sort of transformation activities that you might be looking to put the organization through. I would argue that if you're not asking these questions in the early phases before making the investment in these firms, you're almost by definition overpaying and potentially overpaying in a rather significant ⁓ fashion. Something that's different today in terms of mid-market in particular is the accessibility and the speed with which

all companies, mid-market, small, all the way through, of course, the very large organizations and institutions, can get benefit out of this wave of technology. Like we were talking about earlier, there is a speed factor that's happening here. Part of the speed factor is the democratization of these capabilities. In previous cycles, there was potentially a very significant capex that was required to start building out capabilities, and it was largely the

most well-financed, the largest organizations, exclusively more or less, who could actually afford to do something, that has changed very significantly. I'm working with a number of mid-market companies who are among the leaders in their sectors, and even compared to some of the larger organizations, because of the nimbleness, because of very astute and strategic leadership in terms of experimentation and focus on specific KPIs and ROI, but it's very quick to bring these capabilities in. Of course,

Over time, we'll see there will be a divergence that the capex and the investment strategies will start to play into. But largely, there is a significant amount of digital infrastructure that we can ride on top of with these AI capabilities. And as long as you have the right sort crawl, walk, run framework in place, this doesn't have to be an immediate big expenditure to get started and to get some of the benefits coming through. So mid-market companies arguably are in a stronger position.

today with this particular technology cycle than possibly in any of the previous ones.

Jason (15:02)
I couldn't agree with you more. I feel like the mid-market sector and even some startups that are quickly going to become mid-market have a significant advantage. I kind of view it, I love your take on this. I think a lot of the larger enterprises are looking at AI as cost takeout and efficiency and the mid-market and smaller are looking out for growth. And it hasn't yet started to permeate that way. Maybe part of it's for governance and risk and all the things that...

Big companies have to think through beyond the bureaucratic layers they have to work through.

Ryan McManus (15:32)
Absolutely, I largely what we're seeing again, this is very according to pattern. Largely what we see is that the startup organizations in particular are exclusively focused on new value creation because they have nothing to make efficient, right? So that's just by definition. It's always the case with technology cycles that the low hanging fruit is around cost efficiency and automation. We're seeing exactly that with generative AI. The divergence over time, again, always happens

at the intersection of transformation and automation. This is the single biggest problem that companies have made for the last 20 or 30 years when it comes to the further digitization of the economy. It's absolutely black and white. We say we want transformation, but all we do is invest in automation. And that's exactly what opens up the gap for someone to come in with new pricing, new economics, new services, new business models. And then we suddenly find ourselves behind the eight ball. In retrospect, we could have seen it coming.

And it's really up to the leaders coming back to the private equity conversation, even the board conversation. It's really up to the most senior people in the organization to be asking a very simple question, but asking it on a regular basis. It's very simple. The atomic unit of what wins here. What is the new value we can bring to market based on these new capabilities? And the emphasis is on the word new. We will all figure out the automation and productivity side. It's relatively straightforward.

We need to do both. We need the automation and the transformation. But if we're not explicitly having both questions, both conversations, both investment paths, both aspects being represented on the roadmap, then by definition, you're really risking not getting to the one where the divergence in terms of market leadership happens.

Jason (17:06)
Yep, completely agree. So I mean, staying on this topic, and you may have just answered it, but gonna, I'm gonna try and nuance it a little bit, which is, we have a lot of folks that are gonna be watching or listening that are C-suite right at these mid market companies. And I'm sure some folks on the private equity side, but more for the mid market businesses. If you were just to like, let's narrow the focus of the next 30 days, right? They hear our conversation, they see the round table that's gonna happen in the next couple of weeks.

What would you say, like in the next 30 days, do this one thing, and if possible, stop doing this other thing? Like is there something you could point to on both those angles?

Ryan McManus (17:44)
think the most important thing, if an organization hasn't done it already, is to get the board and the management team on the same page in terms of what are we talking about with artificial intelligence. Because everybody brings their own definition of these terms and these technologies to the conversation, it's actually quite tricky to have a cohesive approach in terms of strategy, investment, ROI, and the rest if people are operating under different assumptions, different definitions of what's really happening here. It's exactly to your point, Jason, about

cost efficiency versus a broader portfolio of considerations. And again, as we talked about before, this is 360. This is every aspect of the organization that we need to understand. We don't need to necessarily address everything technologically on day one, but to make sure that we have that sort of broad understanding, opportunity, risk, automation, new value propositions, talent, regulatory, leadership, all of these things come in. What's already happening in our sector? What are some of the leading use cases?

that are already demonstrating productivity. If you can cut through the noise and get everybody on the same page in terms of actually what's happening, not the theory and not what's coming next, and that's an important and interesting part of the conversation, but what's happening today, now everybody's on the same page. And typically what happens is that there's a shared urgency to move forward in a systemic way. The good news that every leader should understand is that, again, we know what wins and we know what loses over time.

that's largely very fine tuned. So despite everything that's happening, despite the incredible speed, there are some very workable, very accessible frameworks and models that organizations and leaders can bring in. But I think that that first step of getting everybody on the same page is critical. More broadly, it goes without saying that organizations need to have an acceptable use policy in place, at least something basic.

Over time, there will be many more of those that have to come into an organization, but you need at least that singular what's OK and what's not OK policy in place right now. And then secondly, don't only be looking at some of the low-hanging fruit in terms of bringing, for example, enterprise LLMs into the business to do some general admin instrumentation. That's very important and very useful. It starts building the muscle. But it's not the entire roadmap here. And you actually have to be looking at

experimentation, core business applications, and intersection over time with your enterprise data strategy. I wrote an article for the NACD with my colleague Igor from Pryan a few couple of years ago. We were talking about a concept called total information mastery that basically forms the construct for a longer term roadmap where you're looking at where competitive divergence and competitive advantage is going to set.

Jason (20:22)
Well, to your point, it's not in technology anymore, right? So this comes into technology is the enabler and you need the people around you, as you said, like clear definition, right? Alignment against that definition, understanding what the different activities are and how you put the right ROI and metrics around it. so I'm completely in alignment with you. We have answered our five questions and Ryan, no surprise you passed with flying colors.

Congratulations, I'll get you a Wisory hat. And I just want to, again, thank you for being such an important part of the Wisory, but also for this roundtable that's going to be coming up. And we have two other folks are going to be joining you. All are NACD members, and you've been so ⁓ important for NACD and just driving the whole board governance and how AI and technology is playing with it. So I'm just, I'm thrilled to have you on board with that. And I can't wait to talk with you more.

So thank you for taking the time, Ryan. I truly appreciate it.

Ryan McManus (21:18)
My pleasure, Jason. Thanks very much.

Jason (21:19)
Great seeing you. Bye.

Ryan McManus (21:21)
Bye-bye.