Tony Bates had an advantage as he began the AI transformation at Genesys. The CEO already had led one transformation there and in doing so he saw the success that came from creating the right culture. So when it was time to dive into AI, he already had the foundation he wanted in place.

Without that original cultural shift, "I don't think we'd have been anywhere near as successful as we've been with that [AI] transformation," he said. "So I think what it says is strategy kind of tells you where you want to go, but I think it's the culture that determines how you get there."

Let's back up to that first transformation. When he arrived at the customer service software provider more than seven years ago, Bates said his mission was to build the company into a cloud business, moving away from its "on-premise software" model.

That meant "everything had to change." Bates stressed that "you build culture at that moment of change, and so it was very surgical and prescriptive."

He used three values as the basis for the change.

Go big. That was important because "if you're going to make a change, it's got to be exciting and it's got to be bigger than the way they thought before." Genesys was stuck with revenue growing in the single digits. He knew that the cloud business could spur much faster growth.

Fly in formation. Bates saw silos and some finger pointing when he arrived. CEOs sometimes use sports metaphors but stars can dominate those teams. That's why he liked the idea of birds flying in formation. "When birds migrate, they can travel incredible [distances], thousands of miles, and they symbiotically know exactly when the lead bird needs a rest."

Embrace empathy. The organization was described as collegial by his predecessor but Bates found passive aggressiveness. Emphasizing empathy paved the way for respectful disagreements. "It allowed the company to feel safe and that an individual could have a voice, say what they felt," he said.

Today, the cloud business generates about $2.9 billion in annual revenue, up from less than $100 million when Bates arrived, and is growing at more than 30% a year.

So Bates had a workforce with a different mindset when it came to the second transformation. While he said AI is woven throughout Genesys products, the company does break out AI revenue, which is now more than $400 million on an annual run rate and is growing at double the rate of the cloud business.

There's also a big difference this time. Transformations often are viewed as projects with beginnings and endings. That is not the case with AI, which he said requires continuous transformation and adaptive behaviors.

But those constantly shifting sands may make culture even more important. Said Bates, "I think it is going to be one of the sustainable advantages in the AI era."

Erle Norton Managing Editor, C-Suite Content

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