Milind Naik on AI, Leadership & Organisational Transformation

Milind Naik

Sure. That sounds interesting — I'm looking forward to it. A brief background: I am Gen X. Born in the 1970s, educated in the '80s, and started my career in the '90s. Thankfully there were no cameras, so there was nothing that captured what we did! But it was an interesting time. We had to really do things the hard way — we had to actually write code, not look up code somewhere. So I'm a software developer at heart.

Milind Naik

There are so many things which have happened — Visual C++ and all that. In fact, I learned coding directly in machine language, directly on the boards and the gates that we had to configure.

After my engineering, I specialised in finite element analysis. I was bad at drawing, but I had an analytical mind, and I didn't think I was ready for the actual manufacturing setup. So I spent 10 years in finite element analysis in the defence segment, then came into the civilian world. I was lucky: I was CTO for ABC Consultants, then I was heading projects reporting to the CTO of the National Stock Exchange. Around 2004 I decided to move away from Mumbai, because I was a parent by then, with two kids. So I moved to Chennai, took over as global CTO and then became the MD for Cricinfo, and set up their IDC in Bangalore. Now we call them GCCs, but in those days they were IDCs.

Milind Naik

After that I joined Fox Interactive, heading Asia-Pacific. What we see as Hotstar now — the mobile app — I had done that way long ago. I started working on mobility way back in 2004 itself. After moving on from Fox Interactive, I saw that as an opportunity, because small devices with that kind of compute power were amazing, and you were seeing the inroads of smart devices. We were moving away from those Nokia bricks to real applications coming in — internet happening, email happening.

Milind Naik

Yes, BlackBerry came in. So I started developing applications on that, and Symbian and so on, and then progressively, after 2010, moved into iOS and Android. I was acquired by one of the big five consulting companies, basically for the team, because that knowledge of mobile app development was not available then. I exited that, and then started a company in what you would now call AI, or narrow AI — it was more statistics and preemptive analytics for health conditions, focusing on non-communicable diseases. We raised capital and got in partners as co-founders along with me. By 2018–19 I was a bit tired of being the CEO — engineering was always there — so I started a firm along with a friend of mine in the logistics domain, more into 4PL and 5PL.

Milind Naik

Right, because by then AI had become a little bit stronger. I started working on AI way back in 2012, looking at automatic number plate recognition and image analysis — how you superimpose images on top of something, and so on. I even tried to see if you could do haemoglobin detection using AI, based on the colour of a droplet of blood on a specialised paper. That didn't work out, but nevertheless I did try.

So in 2018 I started this with a friend and raised some capital. COVID was good for us, and we got acquired again. So I was again contemplating what to do in my life. Before that, I did join a fund and mentored startups — basically moving away from the how to the why and the what, the hygiene factors that make them investment-ready. People, process, technology — technology was the easier part of it, but I focused on the people and the process. I also had a healthcare venture around that time. Then I decided to call it quits, and since then I've been teaching. I do courses for CXO levels — whether it's CTO, CDO, CDIO, leadership in AI and so many more — across ISB, IIT, IIM, NUS and MIT.

Somewhere in between, I also thought it was time for me to be selfish, and I moved away from Bangalore to this remote place called Kotagiri, near Ooty, where it is more about solitude, not loneliness — trying to find my purpose in life. I guess imparting knowledge has been something very close to me, because my mother was a teacher, my mother-in-law was a teacher and my grandfather was a professor. So it's giving back to the community in a sense — a pseudo-CSR kind of thing.

I'm now in the final segment of my PhD, on two elements. One is quantum — mapping people and process to quantum as a technology. The second is the human element. Surprisingly, when we talk about any transformation on three pillars — people, process and technology — we seem to miss out the people part of it. When we talk about a process, processes are tasks. Tasks are done by humans. We try to see where technology comes in and automates those tasks, but eventually that affects people. That's a grey area which nobody actually focuses on.

Milind Naik

Difficult, but let me try. I have been teaching since early 2004. I was going to colleges, because I found — and that's the case even today — that the engineers we are generating in millions are not ready for what organisations need. There is this huge gap. Let's take a simple thing: we were taught derivatives and integration in our engineering days. Ask any engineer out there who has ever used derivatives or integration — or, for that matter, Pythagoras' theorem. Is it good to have or nice to have? That is what we really need to understand. Skills like selling, understanding P&L statements, understanding the problem and the need — the human element — were missing.

That's what I've been doing since 2004, maybe not in such a devoted way — maybe once in three months I was called into colleges — and I've been mentoring dedicatedly since then. When I had my own startup, obviously I was mentoring, but there was a selfish attitude in myself. Then I guess when maturity sinks in, you really understand the P — and I'll talk about the P: the position that you are in, what it is that you want to achieve, what it is that you are scared of, and what it is that makes you angry. I guess the only way I could vent it out was giving back to society — and obviously getting paid for it. It's not that I don't want to get paid for it, but it's not about the money; it's the value of what I'm bringing to the table. When we talk about value creation or a value proposition, we also need to consider the value capture which comes around it.

I've been blessed by the fact that my students come over to Kotagiri to visit me from across the world — from Dubai, Delhi, Bangalore, Mumbai, Hyderabad, Chennai. It's the people culture which we have built that stays longer, and I see that in organisations. Many a time I have seen that we believe it's transactional leadership that we follow. We say, “No, no, I'm a team leader, I am a charismatic leader.”

Milind Naik

Interesting question. As you said, everybody's talking about AI, agentic AI, autonomous systems and so on. But you really need to break it down and understand: what is the problem? What is it that they need? You don't necessarily have to cater to the want. If you can do things simply — a simple calculation like 1 plus 1 — you really don't need a calculator for it, unless you're getting into square roots and so on. That's where you really need high compute.

What I have seen is that senior leaders talk about tech, but they don't really map out people, process and technology — the processes and the underlying people behind them. They just talk about technology. Move away from tech, because I'm sure you have seen in the last 20 or 25 years that you have worked: technologies will come and go.

Milind Naik

Today the flavour of the month is agentic AI or autonomous systems. If you were to go back three years, they were talking about GPT models. Before that, they were talking about big data. Before that, ERPs or SCADA. Before that, on-premise.

Milind Naik

It goes on changing. So you can't really put a finger on a technology and say, “This is where I'm going to put my bets.” What you own is the people. Technology will change. Processes you will optimise. But it is the people part of it which, surprisingly, is never looked at. And — maybe I'm wrong here — they think that people management is HR or L&D. I don't think so. I think every leader leads people. He doesn't lead technology. At the end of the day, when you talk about a leader, what you are doing is leading people — and the elemental part of that is what we forget. That's the best way I can define it.

Milind Naik

It applies to everyone. I have had this discussion with Gen Z. In fact, the other day a friend's daughter and some of my students had come over, and we were around a campfire talking about this. She's 14 years old. She says, “You're talking about tech — I don't understand tech.” So I asked her, “Beta, what is it that you desire?” And my framework is: P is equal to your desires minus your fears, divided by your frustrations.

Milind Naik

There are many connotations of P. At an individual level, it could be your position — where you see yourself. It could be your pride, your prestige, your passion, your purpose, your pleasure. There are so many things which come in at an individual level. If you look at it at an organisational level, it could be progress, penetration, product, position, perseverance, platform, precision, performance, profit, pricing power — even a problem could be a P. And it all goes back to: what is the state that you want to be in, which is your desire; what is it that you're scared of; and what is that friction where you get angry that you can't solve it or get away from that fear, which is the frustration.

Very simple. People have asked me, “It's so simple — why wasn't it done before?” I guess common sense is one of the most difficult senses. Maybe somebody thought of it but did not actually put it in place.

So, back to her. I asked her, “Where do you see yourself?” She says, “I want to get into an Ivy League.” I asked her why she wants to get into an Ivy League. She said, “I want to have that bragging power, I want to make my parents proud” — all those things: earn more dollars, a better quality of life. Then I asked her, “What is it that you're scared of?” She says, “What if I don't get into an Ivy League?” Then I asked, “What stops you from getting into an Ivy League? What is it that you are angry with yourself about?” She says, “Addiction to my mobile. I want to meet my friends. I can't commit that many hours a day.”

So I said, “Okay, let's build a cadence. If you were to switch off your cell phone, do you think the world is going to end? If you don't get a Snapchat or an Insta reel immediately, does the world end?” She said no. So I said, “Now define your priorities. If you were to switch off your phone for four hours, do you think you can commit to it — and that will reduce your fear?” She said yes. I said, “This is what my DFF framework is all about.” She said, “That's so simple!”

And this is actual Gen Z — she's 14, which means she was born somewhere around 2010. I have two kids, both of them Gen Z. I've been discussing this with my wife around her health condition, with my students, with board members: in this list of Ps, can we really break it down to an individual level or an organisational level and raise a sharp focus there? Yes, Gen Zs are difficult to manage. Their whole circle revolves around personal fulfilment — that is their P, their priority. But if you look at any other word, there is not a single word which covers everything that we want to talk about.

Milind Naik

Absolutely. If you were to look at A, it talks about ambiguity and ambition. I didn't find a word which could actually connote the derivative of my DFF around it. That is where P came into play.

Milind Naik

Trust me, this is something I've seen — tech for the past 35 years, starting all the way from the remote-control TV to where Instagram actually knows what you want to see and shows it to you before you even type it out. Or YouTube.

Milind Naik

Precisely — algorithms, which are very, very powerful. Since November 2022, when GPT was launched, I have never seen any technology scale so fast. It has given you immense power, but what has been missing is the proper use of that power — and guardrails around it. The governance part of it, which people seemingly are not looking at. Of late, that has become the centre of every boardroom discussion, especially now that DPDP is like a sword of Damocles sitting on us, by 2027. There's GDPR. If you want to do it in the Americas, you have to look at the CCPA; you should look at the AI RMF. The GCC has their own thing. China has its own thing. Singapore is doing something on its own. Australia is doing something of its own.

Milind Naik

So I really want to explain this to people who have this fear of AI. AI is good — provided you build your guardrails around it. It's an extremely powerful thing. We also need to understand where we come from: we used to talk about VUCA — volatility, uncertainty, complexity, ambiguity. We have moved into a state of flux. If you were to look at 2022 to 2026 — four years now — how many versions of GPT have come in? And look at the spread that it has: in less than four years, we are talking about autonomous agents.

Milind Naik

Agents which can act. If you look at the initial GPT models which came in, it was more of a personal assistant. Now, with the scale at which things are happening, we are talking about autonomous agents already production-ready.

Milind Naik

Yes. So you would have to look at the good and the large bad part of AI, because they are autonomous, they are intelligent, and they have the collective knowledge of everything that is happening, because they have ingested everything. Now we are even talking about getting into the physics of it — the physical realm. Once that has been captured, we are going to go into singularity and sentience, because if you're going to have autonomous robots working for you, they would, in a sense, have to be sentient: look at the environment and start taking their own decisions. But unless you keep your guardrails, they can switch over.

Milind Naik

Then the governance part of it, the data ownership part of it. Who owns that data? Who sees that data? Meta had an issue which was flagged, about their Meta glasses: the footage was being tagged in Kenya. We see a lot of things every day — the good and the bad about it. And somewhere, someone is sitting. That's why AI governance will be one of the most important things: it should sit on the top, on the side, and as a horizontal layer.

Board members or CXOs won't lose their jobs if they don't get the ROI that was expected. Maybe the shareholder value might take a beating, but they won't lose their jobs. But if there is any mishap in governance — whether there's a data breach, some PII which has gone into your data, biases, hallucinations — how are you going to handle that? Because eventually your data is going to drift. So how are you going to set it up? You have to look at that.

Milind Naik

There might be a new position. In fact, I think companies are looking at governance in a very big way, and they're investing in ethics committees, which might be reporting into the C-suite. But that would mean we will have to define the responsibility and the accountability. I guess the accountability will lie at the C-level. Maybe the responsibility can go to the ethics committee, but the accountability will come to the C-level, and there will be legal implications also. I've been talking to a lot of them, and they say, “Oh, DPDP is coming — it's a tech thing.” No, no, no. DPDP is not just a tech thing. DPDP is a legal thing. You're talking about ₹250 crore on the table.

Milind Naik

Absolutely. And the CXOs have to have the visibility of that. The boards who are going to sign off on these projects need to have that visibility. And that is where desires, fears and frustrations come in: all this governance falls in the frustrations part of it and the fears part of it. Investing in the right talent and the right certifications will mitigate that risk.

Milind Naik

I am typically like a mirror to them. I ask them: what is the cost of not doing this? There is a cost of doing this — we all know that. But we really need to look at what is the cost of not doing this. And on your priority list, where does it fall? If you think, “I'm going to push that monkey off my back to somebody else,” that won't work, because you need leadership commitment — it is their neck which is on the block.

So we go through complete Excel sheets before we actually decide whether this AI project makes sense. There is a lot of data captured there, and it tells us whether this use case makes sense. Maybe we don't have the readiness of data — but that's a friction; we can overcome that. Change management — that's a friction.

Milind Naik

These are the things which come into play when we talk about any transformation. I did talk about the three pillars, and coming to the people part of it, the first point is: what is in it for me? The second thing which comes into play is the fear of job loss. How do you address that?

I do agree that AI will take away jobs. But AI will take away jobs from people who don't know AI. And because of AI being so prevalent, the market opportunities will be so big. You can go back in time to the early 2000s when computers came, and there was this question: why do I need to learn DOS? Why do I need to learn documents, Word or Excel? But today that is de facto. Today, directly or indirectly, all of us are connected to AI — whether it is via Netflix, via Amazon, via Google Maps, in everything there is a touchpoint of AI.

And DPDP will get you to think about it: have you gone and asked Amazon, “What do you know about me? What do you do with my data?” Have we gone to Google and asked them what they know about me and what they do with my data? Am I right? It's me — you are a fiduciary of my data. So those are the questions which will start coming up now, which we have to be ready for as leaders, because you can't say, “That's the black-box theory — I don't know what is happening inside that AI engine.”

Milind Naik

That was the same mistake which IBM made when they had that opportunity to buy out DOS. IBM said, “Who's going to have a computer on every table?” And they lost out. Today, we are still talking about my generation and your generation. You need to understand that the large audience out there is the new generation — Gen Alpha, and Gen Beta, which is going to be coming soon. They are native AI. There is a generation which is mobile native. Your generation could have been computer native. So it's not that you can be away from it.

Milind Naik

Absolutely. And as we talked about the flux — the X stands for experimental. Companies will have to experiment with it. You cannot say, “I'm going to cross the bridge when the water reaches under it.” You will have to do it now — or else, what happened in Nepal, we all know.

And there are so many opportunities with AI. ESG, if you were to just look at that itself, is going to be big. All the money that we have spent on technology since the internet, computer and telecom revolution happened — for the sake of maths, say from 2000 — is going to be dwarfed by the money which is going to be spent on ESG. We are already seeing counties saying they will not allow data centres. So there has to be environmental impact work done. We also need to understand the societal impact of what is happening around it — and the governance part of it.

Milind Naik

The first industrial revolution, which was steam, lasted roughly around 70 to 80 years. Then came electricity and mass manufacturing, which lasted around 50 years. Then came the internet, computers and telecom, and we can break that into two segments. It shot off with mobile — at least countries like India became native to the internet from the smartphone revolution which happened in 2010.

If you look at that shift, or you look at GenAI as a shift, every industrial revolution has been speeding up. If you take into consideration mobility to GenAI, it is a switch of 12 years. From GenAI to autonomous systems, it's four years.

Milind Naik

From autonomous systems to quantum is not more than three years away. Once quantum comes in, sentience and singularity are just around the corner. Why are companies talking about autonomous robots? Look at the investments which are happening. Today I was surprised to know that there are 600 companies in India who are developing drones. If you go back four years, there were none. And what has made that happen is GenAI capability being with everyone, because that collective knowledge is available to everyone. It's not locked in some room with the key thrown away.

Milind Naik

Yes. So for mankind, it's about experimenting with what more you can create. That has been the biggest change which has happened: open-source technology coming in has made so many versions of LLMs come out — specialisations; you can call it an LLM, I can call it an SLM. Coming from an engineering background, I remember that if I had to design a simple crankshaft, it used to take me days, and the analysis on it — adding the material properties and all that — would take months. Today there are 3D models where you click a picture and it'll create a 3D image for you. That reverse engineering, which used to be an opportunity, has gone. Look at medical transcription, which was a business opportunity — I know a lot of friends who used to do that. Have you heard anything about that industry now?

Milind Naik

So, coming back to your point: you cannot ignore AI in some sense or the other.

Milind Naik

One of the most difficult things is cultural change, because you need to address what is in it for me and the fear of job loss. And there are people who are trying to see that as an opportunity — in fact, I see that as an opportunity. Today we will see a lot of citizen developers coming in who can build their own websites, host their own applications, or build their own mobile apps without really needing a tech guy. But the change has to happen at an organisational level, and that is going to be a big opportunity. It might not be your standard L&D or HR kind of thing. It has to be a change which happens at the top and then percolates down. You could use philosophies like ADKAR, or you could look at Kotter — there are many around it. But first and foremost, in any of them, is awareness. That has to come from the top management.

Milind Naik

Yes. And awareness cannot only be the tech part of it. Awareness has to be on three other things which nobody talks about: your data, your change management, and the third thing that we talked about — governance.

Let's understand that from an image, you can extract all the information. In fact, there have been cases where you could get fingerprints out of an image. I get a picture of a document and I can convert it into a Word document — I don't have to copy-paste it. Today translators can do anything and everything. Look at the fact that if you have three images of yourself out on the web, somebody can create a deepfake of you. Ten seconds is all ElevenLabs needs to create your voice.

Milind Naik

Synthetic data is going to be a big opportunity — synthetic data for doing what-if analysis, especially taking into consideration the governing policies coming into play. Whether it is DPDP or GDPR, everything is going to revolve around that data, and synthetic data creation is also a big opportunity. You can look at it as a problem; I look at it as an opportunity. Agents can do that, code can do it — you can give them an anonymised kind of thing.

But again, you need to understand that anonymisation does not mean that you cannot go back to that person. Let's take your case: a person living in Indore, teaching AI, coming from a Java or .NET background, married to a professor who's teaching at IIM. How many people are there in Indore like that? If I know which car you drive, can I not point you out? I don't necessarily need direct identifiers. Indirect identifiers can get me your data. So you need to be very worried about it when you do anonymisation. Companies say, “Oh, I've anonymised my data.” What are all the identifiers, direct and indirect? That is what they need to work on.

Milind Naik

This is a very interesting discussion which I have with the CXOs that I guide. There are two parts to this. First: define your P. I have seen people defining their passion as their P, or their milestone as their P. Introspect on your P. What is your desire? Desires generally tend to be 25,000–30,000 feet in the sky. Fears are something which we tend to bury underground — we don't talk about them — and the manifestation of those fears is in the sense of frustrations. Please find out what your P is — whether it is power, pride, product, any of the Ps that I talked about.

Milind Naik

It could be precision; it could be purpose. For me, it was purpose — why am I here on this earth? Think about it. This is very similar to a SWOT analysis: your strengths, your weaknesses, your opportunities, your threats. What this changes is: your desires are your opportunities — where you want to go. Your threats are your fears. Your weaknesses are your frustrations. Now, in today's world of flux, you need to build up your strengths. You cannot harp on your strengths anymore. So, based on knowing yourself and knowing the organisation's vision, you need to build up and cultivate those strengths again. That is what I would say.

Milind Naik

So please think about it. It's very, very important for us to add the human element to whatever we are doing, because they are the ones who are affected. We have seen people from Oracle waking up to a 6 a.m. email — that is fear; they have not slept the whole night long. We have seen CrowdStrike — a bug which was not decoded for the next 36 hours. So find that out; you really need to get to that level.

I have seen people talk about OKRs and KPIs which are pushed down the throat of the team. Understand what it is. If I say, “As a senior manager, I'm going to do my own succession planning,” find out what the desires, fears and frustrations of that person are before you say, “I'm going to have so-and-so take over.” Spend time there. Because today you cannot have one static style of leadership. Your leadership style will change based on the people that you interact with, and the situations. That's what my two words of wisdom would be.

Milind Naik

Very true. Very, very true. So, your guardrails. Another connotation: why does a country build an army? It is not for attack. It is for defence. In the same way, governance is your defence. Think of it that way.