AI-Enabled Supply Chain Leadership: Blake Tablak on Accountability, Adoption and Disruption

"You could build a gazillion things, but you've got to get customers to use it and get value out of it." — Blake Tablak

During a recent Trax LinkedIn Live, Blake Tablak, CEO of Trax, answered questions about AI-enabled supply chain operations and shared his perspective on leading a company through disruption.

Inside the Conversation

The discussion opens with a question about accountability: who owns the problem when AI flags an issue and nobody acts on it? Blake argues that it's a culture question more than an AI question. From there, he explains how better data is changing the resiliency versus efficiency debate between logistics teams and the business, why executives need to be among the heaviest LLM users in their companies and why adoption has replaced creation as the bottleneck for AI.

In the second half, Blake answers questions for CEOs. He covers why leaders need to be willing to disrupt their own cash cow business, why first-time failure is part of winning and what he learned about leadership from working with senior Navy leaders.

Resources

Full Transcript

Host: Hi, everyone, and welcome to the Trax channel. Today, I'm here with Blake Tablak, CEO of Trax. Hi, Blake. How are you?

Blake Tablak: Wonderful. How are you?

Host: Good. So we're going to do some questions about AI-enabled supply chains and your thoughts. Then at the end, we're going to do some thoughts from a CEO, just some trending questions right now from CEOs in this ever-changing environment. So our first question is: the global supply chain is evolving with multiple carriers, vendors and partners. Who is accountable when AI identifies a problem but no one takes action?

Blake Tablak: So this is an interesting question. The Ritz-Carlton back there, I don't know if they still have this, but one of the reasons they were so successful early on was they said, if you found a problem, you get to fix it. So when you were walking along and you found a tile that was broken, you were responsible for seeing it all the way through. I don't care who you were. If you were the general manager and you found it, if you were the head cook or the head dishwasher and you found it and reported it, you had to see it all the way through. Culturally, they made that a really cool thing. So it wasn't like, "Ugh, that's broken. I don't want to tell anybody because I don't want to do it." They celebrated fixing the problem.

So I always find this one interesting. If AI finds it and nobody does anything about it, it's no different than if somebody finds a problem and nobody does anything about it. There are a million stories of companies that understood a problem was coming and did nothing about it. You've heard me talk about disruption. I tell our company all the time, if anybody's going to disrupt me, it's going to be me. I'm not going to wait for the market to come and beat the snot out of me because I didn't stay ahead of the technology curve, where I was trying to protect some free cash flow business that was going to get slaughtered anyway. There's no scenario where you should be avoiding problems.

And so I don't think it's an AI question. I think it's a culture question, maybe more than anything. Do you have a culture where people are incented to go resolve problems, or at least to bring them up to you? People come and tell me about bad things all the time. If I beat them or yell at them or whatever, they're not bringing that to me anymore. If I say, "Thank you, that's awesome. Thank you for telling me that. That's great," then I'll always hear about them, and I shouldn't be surprised by things.

So I don't know that it's an AI question so much as it's a culture question. But AI does surface a lot of really interesting insights that require some research. And you do have to prioritize your time, kind of stack rank what's a fire and what's smoke, or what's a hallucination.

Host: Yeah, absolutely. I think that question was kind of a trick one, because it is a culture thing, creating a culture where people are willing to come to you with questions and challenges. So the next one is, and I don't know if you could do just one, but what is one business process companies may need to rethink completely because AI has changed what's possible?

Blake Tablak: I'll stick to the supply chain for now, but I may answer this in a more holistic way in a second. When it comes to the supply chain, we talked about this in a previous call, which is resiliency versus efficiency, and this big battle. I think AI is making a meaningful dent in that conversation. Here's what I mean by that. You're the head of logistics operations or the chief supply chain officer, and the CFO comes and says they need you to cut costs. Fine, ship less stuff. There's a natural tension between the business and the operator, and that goes on at any company.

I was talking to a company whose services group ships everything air overnight, and that's a requirement. Okay, great. But to all of these locations, you could ship it any way and it would get there at the same time. So without that information, you're looking at cost, quality, speed and emissions, and you're making decisions without that great level of detail. You may have a lane that has a single carrier, and you're okay with that single carrier risk. That may be okay. But it's having that level of insight that I think has made the argument around resiliency versus efficiency maybe a little easier to get at.

If you're the logistics team, if you're the supply chain people, it's a little easier to go back to the business and basically say, "Look, I can accomplish your same goals at a lower cost. And by the way, you can use that money to go pump back into R&D versus a package." For us, we have something called Intelligent Operations that does just that. It helps arm both parties with the same information. So there's not a, "Hey, I get to see this," and the other guy's like, "Yeah, but I've got to get it there, so I don't care about your problems," and the business takes [unclear]. Now we can come to common ground. I think that's a process that should be rethought wholly and really needs to be hammered into by executives and leaders.

So that's specific to logistics, and those are logistics and supply chain use cases. The one area where I think most executives need to rethink is their usage of LLMs. If you're not one of the top users in your company for analyzing data, thinking through how problems happen and trying to be more creative in your understanding of it, man, you are way behind. And I don't care who you are. If you carry a director, a VP or a C title and you're not one of the top users of an LLM in your company trying to figure out how things work, you are way behind.

So I think one thing that does have to change is you've just got to get comfortable with it. The funny thing is the more you use it, the more you realize how many gaps there are in artificial intelligence, especially in LLMs. But they're hugely useful. I analyze massive data sets that are just company data, looking at it and trying to understand better how to improve performance in the organization or how to better discuss things with my clients. I sit on boards. I work with other private equity firms. I do the same thing when I'm doing any kind of advisory work for one of them. So I think that's one process that, I don't know about change, but needs to start happening right away.

Host: Yeah, absolutely. So looking ahead, what do you think will distinguish companies that use AI to operate differently from those that simply use it to do things faster?

Blake Tablak: Gosh. Well, I don't think those two are mutually exclusive. I think, one, speed matters. There's this book, I think it's from the seventies, called The Goal. A really good friend of mine, Dermot, said to me one day, "You're going to read this book," and it's a manufacturing book. I'm like, "I'm in software. What do I need a manufacturing book for?" Dermot is literally one of the most intelligent human beings on the planet, and anytime he says you should do this, just do it. So I didn't argue with him. I said, "Great, I'll do it." I read the book, and it has fundamentally changed how I feel about almost everything that we do as a company. The whole book is about bottlenecks.

AI has enabled us to develop product much faster. Funny, I got a text from a friend of mine who used to run pre-sales engineering at another company. She was like, "Are you seeing the volume of," what she calls, "fraud in the market?" Companies just creating demos and then demoing it, and there's nothing there, and trying to sell nothing. And you're just like, wow, that's really happening. That means you're going to be way more discerning as the buyer.

But the second part of that is I can build software really fast now. I can get things to market super fast. So the bottleneck used to be trying to figure out how to get it done. That bottleneck has shifted to the right. In a manufacturing process, I've moved that over, and that's what you're trying to do. You're continually trying to move that over and over. And now we've got it to a point where adoption is now the bottleneck. You could build a gazillion things, but you've got to get customers to use it and get value out of it, and that still takes time.

I've had meetings with people where, in many previous lives, you literally put gold on the table and they're like, "Oh, that's really nice." And I'm like, "Oh, that's great." And then I go back to doing whatever I was doing before. Adoption is now the bottleneck. So it's not the creation part, it's the adoption part.

And look, companies that really understand that concept of how bottlenecks move and are using artificial intelligence to unlock those bottlenecks and really consider what adoption means, I think they're going to be the winners, and they're going to be the people that are really dominant. I have a vested interest in this, but I wholly disagree with the idea that all software companies are dead because of AI. I'm watching our own company, other companies, other CEOs I know. Their companies are growing. Profitability is growing. There is still a world for the software company if you are very intelligent about how you leverage this very disruptive technology.

Host: And I really haven't read The Goal.

Blake Tablak: Honestly, you should, or listen to it in your car. It's a fascinating book, and it really does unlock a lot of ideas about how to run your organization. And it's still relevant today.

Host: Absolutely. And when we finish this live, I can link the book in the comment section too, so people can look at that. Okay, so now we have the fun part.

Blake Tablak: Yes.

Host: Thoughts from a CEO, thoughts from Mr. Blake, Mr. Tablak. All right. So the first one is, what is something you believe CEOs need to stop doing if they want their businesses to grow in today's environment?

Blake Tablak: Boy, a broad question. I think there are two things that you really have to get your head wrapped around. That concept of, if anybody is going to disrupt this company, it's going to be me. Trust me, if you're an investor and you hear that, you're like, "Oh, please don't do that." And I'm going to give you some very real disruptive moments. I'm old enough now that I've seen a few. My grandfather died at 103, and I had this conversation with him about these disruptive moments that he saw, and he said the same thing. Anytime a disruptive moment comes in, the market gets bigger. This is a really weird concept for most people to get their head wrapped around.

So I was at a company that got decimated. BMC got decimated by ServiceNow. ServiceNow was the most disruptive thing to happen to that space. IBM did too. HP. Everybody got decimated by ServiceNow because we weren't willing to disrupt the thing that we were doing that was the cash cow. Look how big that market is now. That market's got to be twenty times the size it was before. So if you were willing to disrupt yourself, you would have given up this little thing for this much bigger thing. It seems like that shouldn't be the case, but it is. So as a CEO, you really have to get comfortable with, "Hey, my cash cow over here is likely to go away. It's likely to disappear, but the market I'm moving into is much bigger." You've got to get comfortable with that. That's one.

The second one is cultural shift. If you're a CEO, you tend to be a very competitive person. You tend to want to win. That's pretty common. I don't know many that don't want that. The really good ones understand that failure is a function of winning. There are no teams that go undefeated, other than the Miami Dolphins, whatever. No teams go undefeated. You have little losses here and there. You might lose a customer, you might lose a game, whatever. It's understanding how the loss pushes you forward. And I think becoming very comfortable with high-speed losses to gain something bigger is important.

We talk about this here all the time. Edison knows 2,500 ways not to make a light bulb. You can't tell me anything that's been more transformative than light bulbs in terms of civilization. I mean, there's water filters, sure. There's probably stuff, but it's one of the top two or three. It's got to be. Air conditioning's got to be up there. But there were a million failures that happened along the way before they got to this point where I have an LED light bulb that I won't change for years.

So I think those two things: be willing to disrupt yourself, go look at the cash cow business you have and figure out how somebody else is going to disrupt it. And then the last piece is be okay with failure along the way. It's going to happen. Repeat failure, by the way, drives me bonkers, and I don't do well with it. But initial, first-time failure, man, I love it. I really do embrace it. I love it.

Host: Okay. So our last question for our CEO is, what's one lesson you've learned about leadership that has changed how you make decisions today?

Blake Tablak: Yeah. A guy named Admiral Quast, he passed away some time ago. I got to work with him and another gentleman named Jeff Monks, who's thankfully still alive. Wonderful guys. Executive learning officer of the Navy, deputy executive learning officer of the Navy. I worked for him for a few years. Some of the things that they taught about leadership: they really understood command and control, and they understood what they described as civilian leadership, which is not command and control. I can't tell people in my company what to do.

In his position, Admiral Quast was the rear admiral of the Nimitz Battle Group, the single largest battle group on the planet. He's like, "I can tell everybody to line up and polish my shoes, and they'd have to do it. They would have to line up and salute me doing it." You try that here, you're getting lawsuits. You're going to get people quitting. But they really explained that there are times for command and control and there are times for using the community in a leadership function and getting people to come along. And you really have to understand when each one of those is important and how they work.

And then the second thing they taught is to use risk as a measure for that. You get put into a leadership position because you're willing to take risks. You may not realize it, but you were willing to take some risks, and those risks have outsized returns. Yes, you're good at your job, but there were some risks you took along the way that were different from what other people were doing that got you here. Don't stop doing that. And knowing that moment of risk, you may have to take a command and control position and just force people to move along. And then backtrack. Don't just stay there. Backtrack and then let them sort of take over and let them own it.

I think those two things may be the most valuable leadership lessons that I've ever heard. And I know I'm blessed to be surrounded by guys that were Rangers and Navy. It's so wonderful to get to hear their stories of leadership. They also, by the way, have no stock options they can give people. They can't give you a bonus. They can't do any of that. So a lot of these guys also understand, "I can't just tell you to line up. I've got to win your heart and your mind along the way." I think those are just, man, what great lessons and what great people to be surrounded by.

Host: Absolutely. Well, thank you so much for sharing, and I look forward to continuing our conversations into the new year too. We have lots of crazy things coming up. I know you're so busy, but thank you for taking the time. I appreciate it.

Blake Tablak: Always my pleasure. Thanks.

Keep the Conversation Going

Watch more conversations with Trax leaders on the Trax YouTube channel and follow Trax on LinkedIn for upcoming LinkedIn Live sessions. If you want to talk about what your transportation data could be telling you, connect with the Trax team.