Boardrooms in Transition Ep. 2/5 | Larry Quinlan | Risk and Speed

This is episode 2 of 5 in Boardrooms in Transition, a special series from Inside CVC by U-Path. We recommend starting with Episode 1 and listening in order. This episode opens with a short recap. If you are listening to the full series in one sitting, use the chapter marker to jump straight to the conversation. 

In the second chapter of Boardrooms in Transition, former Deloitte Global CIO and seasoned board director Larry Quinlan explores what it means to govern in an AI-driven world. Drawing on decades of experience leading technology transformations, Larry argues that AI is not simply a productivity tool—it is a force that could fundamentally reshape business models, risk profiles, and competitive advantage.

We also discuss:

• Why speed—not technology—is the defining challenge of the AI era

• How boards should rethink risk and strategy in an AI-driven world

• Why governing AI is different from directing IT implementation

• The role of data, cyber resilience, and board education

• The human capacity required to absorb transformational change

• Why optimism—not fear—should guide leaders through the AI transition

As the series continues, Larry reminds us that velocity is ultimately a human problem. Organizations rarely fail because technology moves too quickly. They fail because people, processes, and governance cannot adapt at the same pace.

Boardrooms in Transition: www.boardroomsintransition.u-path.com
Inside CVC: www.u-path.com/podcast
U-Path Venture Advisors: www.u-path.com

Acknowledgments
Special thanks to Grammy Award-winning saxophonist and composer Wayne Escoffery for lending his music to the soundtrack of Boardrooms in Transition. A member of the Yale School of Music faculty and one of the leading voices in contemporary jazz, Wayne's work helps bring this series to life. Learn more about Wayne and his music at www.wayneescoffery.com.

Transcript

Steve Schmith 0:00

Previously on Boardrooms in Transition, a special series from Inside CVC.

Didier Cossin 0:05

At large. Boards underperform. Boards have a hard time acting. But I have never seen a board firing a CEO too soon. All boards are regretting how long it has taken them. Well, I see boards weakest today is on information. And it takes courage to be on a board and shape things. It takes art, it takes psychology, right? But it also takes courage. Those actors that are gonna be successful, another in desire, knowing regret, they're already in action.

Steve Schmith 0:46

Welcome to Boardrooms in Transition, a special series from Inside CVC, where we are bringing you an inside look at the conversations and the decisions being made inside of boardrooms around the world.

Philipp Willigmann 0:58

We are doing this series because you have asked us to share some insights what really happens in the boardroom. So Steve and I reached out to our network to find the most influential board members who are willing to share their insights, how they are transforming organizations, how they are thinking about the future of ecosystems, and how we can together move to a more positive world.

Steve Schmith 1:19

And that's exactly what you're going to hear in the five episodes personal stories around managing AI, leading with courage, managing through geopolitical pressures. We cover it all from voices from inside the boardroom. I'm Philipp Willigmann, and I'm Steve Schmith. Welcome to Boardrooms in Transition. In episode two, we're joined by Larry Quinlan, former global CIO of Deloitte and seasoned board member. In this conversation, we explore what it really means for boards to govern in an AI-driven world. From managing a rapidly shifting risk landscape to ensuring strategy stays fit for purpose when the technology is moving faster than the organization. Larry brings both an optimist's lens and a realist discipline to one of the most consequential questions boards face right now. Here's our conversation with Larry Quinlan. Larry, welcome to Inside CVC. How are you today, sir? Doing well. Really looking forward to this conversation. Thank you for joining us. Looking forward to reconnecting. Obviously, the three of us are Deloitte alum, um, and now your role in the boardroom. This conversation is going to be part of our transformation in the boardroom series. So why don't we hop right in with disruption, AI, a lot of different sorts of new technologies are emerging from your view? What do you think fundamentally feels different in this moment from the boardroom view?

Larry Quinlan 2:48

You know, I've been privileged to be a part of a number of transformations, all the way from X.25 networks to mobile to cloud to messaging, etc. I think what's different here is speed. The adoption of AI is occurring at breakneck speed. Now, at risk of being thrown out of the room, I'd have to say the breakneck speed is incredibly uneven. So I don't want to leave people with the notion that everybody's just implementing transformative AI in their businesses. And if you don't get it done tomorrow, you're way behind. That is not the case from my point of view. There are a number of industries, particularly tech, that are racing to put in the infrastructure. And there are a number of corporate organizations that are racing to lay the groundwork, but true transformation, I think, is still a bit uh hard to find. That's not a criticism. You've got to put in the groundwork, you've got to lay the foundation, you've got to train staff, you've got to get the tooling done, you've got to do all of these things. You've got to gain the efficiencies, you've got to pluck the low-hanging fruit in order to get to transformation. Transformation isn't just a uh, oh, by the way, overnight it drops in our lap kind of activity. But it's moving faster than it ever has before. And from a boardroom perspective, speed is something we've got to figure out and react to. But there's one other thing that I believe is truly important, and that's the notion of this could actually change business models, and it's up to the board to really think through when, where, and how. And uh AI can be a productivity tool, a very effective productivity tool. It can result in business cycle improvements, etc. But every now and again a transformation of business model will present itself, and a board really has to take a look at strategy, execution of strategy, how this impacts the strategy of the organization, and be very open to having that conversation about when and how the business model gets impacted.

Steve Schmith 5:32

A quick break and a crucial distinction here. Larry argues AI is a business model shift, not an IT productivity tool. And if your board is reviewing AI as a cost center rather than a market disruptor, he's arguing that you're already behind the curve. Let's go on with the conversation.

Philipp Willigmann 5:54

So, Larry, what you just described in your background, um, in going through so many transformations over the couple of decades, how you know, how does a board actually catch up uh with all the changes? I'm just curious, you know, um AI was a buzzword, you know, I feel like last year, year, year and a half ago, people were starting to talk about it, right? Now it's everywhere. How can somebody you know who sits on the board become somewhat an expert on all these uh dramatic changes?

Larry Quinlan 6:23

I actually think it's easier for the board than it is for management, right? Management's got to live this day in, day out, truly understand the model. You know, the board's job is to manage risk. The board's job is to ensure that strategy is fit for purpose. So it's not the board's job to direct AI for the company. It would be a mistake for the board to attempt to direct AI for the company. So the board's got to do a few important things. With the introduction of AI, how does this impact the risk heat map of the organization? Does it add any new risks? Does it intensify any risks? Does it eliminate any risks? And if so, how? And what is our answer to the mitigation of those risks that are created are intensified? And do we do anything about the ones that potentially eliminated by the use of AI? The second is strategy. The board's responsible for ensuring that the strategy of the enterprise is fit for purpose and is being executed effectively for competitive advantage. The board has to ensure that it works with management to understand the implementation, to understand the impact on the business model, and to understand where strategy could be impacted or where competitive advantage could be gained or lost, and has to engage in those conversations very significantly. It's not easy. Board education becomes really important, keeping up with it. And by board education, I don't mean that every board member has to go off and start developing a cursor or something. But a good enough understanding of the risks and the business model transformation capabilities becomes essential. The second thing the board has to do in addition to education is decide on a governance model. And that governance model could be wow, this is so transformative in our organization, we need an AI committee. I think a lot of organizations won't necessarily do that. Some organizations already have a technology committee. That's a possibility. Some have a tech and cyber committee, some will choose to do it in the full board. What's really important is choosing a governance model that's fit for purpose for that particular organization, that particular industry. So the board has responsibility for that and really understanding how that works. So the governance model, risk mitigation, strategy development, and execution are some of the key areas that I believe are important.

Philipp Willigmann 9:32

Larry, I would love to come back to one thing you mentioned at the beginning, you know, about the speed of change. Um, a lot of our listeners, you know, coming out of innovation, corporate venture capital, were sitting at the forefront to actually sense and see how transformation is happening in the market. Sometimes, you know, five, 10 years out there, bringing ideas into the uh into the company. How do you at the board balance the, on the one hand side, you know, you have to change rapidly to innovate and stay ahead of the game, but also making sure that you keep the balance and the steady business can go on. How do you support the management of a company to do that?

Larry Quinlan 10:16

You know, I think there are a number of built-in checks and balances that help the board. The first and maybe the most obvious check and balance is the size of the organization. I'm on the board of organizations that are $20 billion in size, and there's a certain amount of inertia, right? A battleship doesn't just, you know, an aircraft carrier doesn't just turn on a dime, and the massive organization doesn't just turn on a dime. So there's that built-in inertia in an organization. Quite frankly, I think it's actually more important to study techniques to accelerate adoption than it is to try and pace the enterprise, because a large enterprise naturally moves slowly. There are risks that have to be avoided. There are hundreds of thousands of people potentially who have to be educated, who have to change their mindset. For some of them, AI is a threat to their actual job, livelihood, sending their kids to college. They're all of these built-in governors on the speed of change. That really we have to become students about how to prepare an organization for change and how to effectively implement change faster rather than worrying as much about how to pace that change. I've not found a lot of organizations who can move much faster than their people can handle. Uh, but doing effectively is an important element of board work.

Philipp Willigmann 12:02

Let's hit the pause button for a moment. The risk heat map. Larry says boards shouldn't be directing IT, they should be governing risk. For MA leads and innovation leaders, this means your due diligence must now include the human friction of tech adoption. Can the organization actually digest the change you are buying? And let's go back to the conversation.

Steve Schmith 12:29

Larry, you mentioned the role of the board is to, in the in the realm of AI, is to serve as that strategic uh entity that is driving that vision of how AI is going to be implemented in the organization. From your view, how are boards evolving their view of AI as a true strategic capability that that goes to define their competitive advantage? I mean, I would rephrase a bit. I'm not totally convinced that the role of the board is to direct how AI is implemented. I think the role of the board more is to be open and understand the impact it can have on the enterprise, the strategy of the enterprise, and whether competitive advantage can be lost again. And also to understand uh the way that it influences risk. And I think that's different from directing the implementation uh of AI. And I think boards will do this in a number of different ways. We talked about board education, we talked about strategy. But I think incorporating AI into the strategy conversation is an imperative. I I just don't believe a modern company can have a strategy off site or a strategy hour in the board meeting anymore without discussing what the future of AI looks like for this company, for this industry, what others are doing, what the competition is doing, how can we move forward? How can we radically change the top line? How can we change the bottom line? And I believe those are conversations we continuously need to have to keep pushing, to keep probing, to understand how management is thinking about those topics.

Philipp Willigmann 14:38

So with this, Larry, um, I mean, I agree with you that obviously, you know, a board should talk about AI and it should be part of the strategy conversation. Um but from your perspective, and you sit on a couple of boards who are, I would say, like data native, they have they they're coming out of the data and of the digital side. Um, but to to use AI in the right way, at least you know, from my um experience, you do need to have a lot of good data in the company, right? And really understand where you know what you know about your customers and so on and so forth. How do you see kind of like companies being being ready actually for that move into AI and having the data available to build these AI capabilities to transform faster?

Larry Quinlan 15:32

It's part of the journey. Lots of organizations are not ready. Uh some organizations are partially ready, very few, if any, are fully ready. So the data journey is one that has to be undertaken. And there are a number of different ways of undertaking this data journey. Right? One of them is the full-blown end-to-end soup to nuts, uh, get all of enterprise data together in the right place, in the right format, totally cleansed, free of risk. Um and some have tried, but no one will succeed with that. I mean, we're talking about a vast undertaking that will cost more money than you've got, take way more time than you've got, and prove to be less effective. So I think just having targeted approaches that are coordinated, so you don't just end up having a free-for-all, that really focuses on high-value data and spending time thinking about where that is. I do believe we will end up with more centralization than we've had before. But full-blown end-to-end centralization of everything is a pipe dream. But more centralization. I think we'll see the rise of chief data officers who aren't insisting that every piece of data belongs to them, but who are really investing in tools that will allow them to understand where the data is, what the format is, what the data lineage is, what the risk is, and really apply tool sets, AI tool sets to that data. So the journey starts now. It's gotta get done, we've got to move fast, we've got to move targeted, and reporting on the risks of that to the board is important. And you say risk, what's the risk of data? Well, many enterprises are regulated, right? So ensuring the safety of that data becomes important. Uh as you amalgamate data, you potentially expose it to cyber hackers. Uh doing so exposes you to regulatory punishment and uh disclosure. So that's an important aspect of it. Uh, the risks involved in data are manageable, but they have to be absolutely uh dealt with. The costs of the data journey also have to be examined in relationship to the returns that we expect from productivity perspective as well as top-line enhancements.

Philipp Willigmann 18:22

So, Larry, one follow-up on that. Um, I remember back in the days uh when when you were the um chief information, chief technology officer at Deloitte, US, and then globally, you implemented a lot of systems to reduce cyber risk. Um and today with AI and also the geopolitical um world we live in, uh geopolitical competition specifically around AI, how do you see cyber risk um from a board perspective today? And and how do you, as a board member and part of a board, guide companies around cyber risk, what what to do, how to protect data?

Larry Quinlan 19:02

Cyber is still the number one risk on the heat map for a number of organizations for good reason. I am really amazed at the severity of the cyber attacks we're seeing still to this day. And we've been at this, you know, cyber hygiene, cyber prevention, cyber arms race for 15 years, right? And if you look at some of the big companies that have been impacted, there is a cyber offensive capability that is pretty potent out there that still has the ability to bring organizations to their needs. I'm also amazed at how numb we have become to this, because it just gets reported day after day after day, and until it happens to us, then we get a little numb to it. Many boards, however, are still very, very focused on this. There's cyber committers working closely with CISOs, understanding the state of the art, having external reviews done, making sure cyber hygiene is being effectively practiced. You can't completely prevent attacks, but how you react to them is important. So I would say the boards that I see are still very focused on cyber, still believe it is absolutely important and still understand that the consequences of a major breach can be pretty severe.

Philipp Willigmann 20:43

Um so, Larry, you said at the beginning, you know, AI and the speed of change uh is impacting business models. Um businesses are really transforming. And that also means we as humans are transforming, right? And or we have to transform. And uh, if you look at some of the news of some of the big companies about layoffs in the last couple of months, some do use AI as a reason. Um, I do question if that's really the you know, really true or much just uh um yeah, um using using the wrong arguments, but how do you see the human element in all this massive transformation? Um, you know, obviously we do know is new value going to be created by by leveraging AI and automation, but how do we ensure that this technology is not just replacing people, but it's also augmenting the human potential, right? Really ensuring that for employees, for customers, for society, we're using it in a way to create more value for all of us.

Larry Quinlan 21:50

I'm an optimist. I'm old enough to have been through a lot of technology cycles. Um you know, the advent of the word processor. Was going to eliminate all admin assistance. The advent of the cloud was going to devastate all corporate IT organizations. They just wouldn't exist anymore. Everything would be in the cloud. You know, I'm I'm an optimist. I believe that every major technology cycle results in human pain. And that is regrettable. But every major technology cycle has resulted in an expansion of opportunity for the human race. And you know, if you go back to the horse and carriage to the automobile, that had to be painful for people involved in in the business of caring for horses and um the shoeing of the horses, etc. It had to be very painful. But it's a huge expansion for human beings. Uh cloud did the same thing, mobile did the same thing. I believe AI will do the same thing. I'm an optimist. Um there are a number of AI practitioners out there who are far more technical about this topic than I am, who have voiced alarm about the potential to just massively replace work. I remain an optimist just given the cycles we've seen. History will tell. But um I I believe that the transformation of business models will create opportunity for human beings in an age of AI.

Steve Schmith 23:55

I'm curious, Larry, do you think you mentioned the horse and buggy, certainly these other innovations. In my view, those took decades to scale. Right. We are certainly in a much faster cycle now. And so I'm wondering how do boards of directors, how do people themselves reskill themselves at a pace that keeps up with how fast this technology is being adopted, how fast this technology is being iterated, right? There is the scaling piece of it, but I think there's another piece of this conversation that says there's certainly opportunity for humans as a result of this, but that requires human preparation much faster rather than perhaps some of those other innovations, the transition from a from the horse and buggy to a car. Would you agree with that? And how do you keep up with that?

Larry Quinlan 25:00

Instinctively, I think that's true. Although I suspect that, you know, the elimination of horses from the economy must have felt incredibly rapid to the people who were dislocated. You know, all of a sudden I don't have work anymore. How am I going to feed my children? Had to be on their minds. But all the data would say that this is moving faster. But I would offer a couple of perspectives. Autonomous cars have been moving at an incredibly rapid speed for a long time. They still don't roam the streets everywhere, and we all haven't given up our cars. Um the age of mobility exploded upon us, but we've been at it now for a decade, and there's still opportunity to find work, enhance skill sets, and mobility. I don't see this AI stuff as a gold rush. You have to get there by next year, or all the gold is gone. I I don't see it in that way at all. Yes, I believe we need to prepare. Yes, I believe we need to prepare faster. But it's not a doomsday scenario where we're all at the edge of a cliff, and unless we we got AI, we're hurtling off the cliff. I believe this is a sustained opportunity. We need to prepare, we need to prepare faster, but I believe there are sustained opportunities for us, uh for people who are willing to make that transition over some reasonable period of time. Now I'm gonna tell my kids, you gotta move fast, you gotta get it done, you gotta do all of those things. But I would expect that the next generation coming in is is going to have an opportunity to succeed in an AI world. And I say that because I don't think we've scratched the surface yet. I don't think we know where this is gonna take us yet. And I believe there will be opportunities we do not yet understand, that we do not yet know how to prepare for, that are going to be available to us, which is why I'm optimistic. If you go back to one of my favorite inventions, the microwave oven, it is for many people a productivity tool. You know, get some meal in in two minutes, uh get your kids out to school faster. But for other people, it's a business opportunity to create a fast food franchise where you can serve millions of people and create revenue of billions of dollars because of a different approach to food preparation. I think AI is gonna be the same, and those models will become unearthed over time. And we will prepare ourselves for those things, but it's not a gold rush. The gold isn't gonna be gone next year.

Steve Schmith 28:30

I think it's very refreshing, particularly when you start to hear, right? Are we in an AI bubble, etc.? I think your perspective of it's it's it's it's not gloom or doom. There's plenty of opportunity, there's a runway to this, if you will. I think that is a a refreshing point of view that our audience will enjoy. Now that is different though from the bubble discussion. Okay.

Larry Quinlan 28:54

Yeah. Just think of every bubble. Real estate bubble. Real estate's still important today. The internet bubble. The internet's still important today. So we can have bubbles. We will have bubbles. There might be a day of AI reckling as it comes to a bubble, but to me that has nothing to do whether this will be long-term sustainably important. It for sure will. That doesn't mean that there isn't a bubble.

Steve Schmith 29:26

Yeah, absolutely. Um, I as you were describing your your optimistic point of view, etc., part of me started to think of this is also lowering the barrier of entry as well, in in some respects, right? And I'm curious, right? Is as part from the speed side of it as well, I'd I'd be curious about your point of view of opportunities as these technologies lower barriers of entry, allows folks that have been in the workforce for decades the opportunity to retrain and and and I think experience these things faster. Is is uh would you agree with that?

Larry Quinlan 30:01

I think it is certainly easier to put out marketing material using generative AI. You know, the question is is that hugely important or not? I think the entrepreneurs who would say the fact that I can get marketing material out faster could get me new markets, and this would be hugely important. A tool set. And the question would be then for people who want to get into the space of marketing, does that lower the barrier of entry? Or did it actually just reduce their value? Yeah, time will tell. I have these conflicting thoughts about lowering the barrier of entry. And then just given something I think about a lot, which is inequality, uh, particularly for the next generation, I ask myself this a lot. What will happen to our children and their children? Will AI bridge the divide or will it actually broaden the chasm? I don't have an answer to that, but I'm thinking about it quite a bit. When I think about children in inner cities without the infrastructure at home, will this lower the barrier of entry and allow them to have a better education at a lower cost? Or will you actually find that families who are able to adapt to all of this, who are introduced to vibe coding, who are introduced to the elements of AI, where this is pushed in their school, will they actually move ahead faster exponentially and leave poor kids behind? These are all topics that I think about a lot, and I wish I could just confidently give you the answers. I don't have them, but I worry about them.

Steve Schmith 32:08

Um before we get to the last question in terms of an outlook and looking ahead, we're talking about reskilling. Let's turn that back to reskilling in the boardroom. As AI becomes the new literacy for leadership, how can boards build the confidence, the fluency to question, challenge, guide, manage, and not actually be data scientists themselves?

Larry Quinlan 32:37

I think there are a number of ways boards can accomplish this. First is regular briefings by management. I think that's an indispensable part of the education, even more so than all of the external stuff. It's management briefings. You really get to understand what AI means for my company, not just generically. Second, it's the consultation of external uh experts. I believe bringing external parties to the boardroom and to the committees is an important element of imagining what the future could look like and understanding what other people are doing, not just uh within the company. Third, it's creating an official governance model that allows us to gauge what our implementation looks like, what our successes are, and where our opportunities are. That educates us a lot on the art of the possible and the pace of progress that becomes really important. And then I'm a big advocate for just personal education. Uh, just going to the conferences, doing the assessments, going online, doing some vibe coding, uh, whatever it is to truly understand. Uh what's the stuff, what can it do? And the intent is not to become an expert, it's just to understand what people are talking about and where it's going and what the capabilities are. With a clear understanding that the stuff we do personally online, some vibe coding, uh some searching, etc., is very different from a corporate enterprise implementation of AI for competitive advantage. These are two very different uh things personal productivity versus business process transformation. So those are some of the things, though, that I would advocate.

Philipp Willigmann 34:40

And I would love to close out today from your perspective, you know, sitting on various boards and serving um multinational global organizations. Would love for you to share with our audience your perspective on how do you think the board and the boardroom is changing over the next five years, like by let's say by 2030, um, to ensure that you know boards stay effective, uh, but also considering um all these changes. What do you think? How is a board, what are new skills coming onto the board? Um, how is it going to change? Um, maybe the the dialogue, the rhythm, how many times the board is meeting?

Larry Quinlan 35:18

You know, boards are a pretty enduring phenomenon. They've been around for a very long time, uh, much longer than I've been a board uh practitioner. So I I approach the institution with some deference. Um but boards operate with a skills matrix, and that skills matrix is constantly under review. And as AI matures, I have no doubt that we will mature the skills matrix, not just to have a box that says AI, check that, but what kind of AI, what kind of approach, what kind of technology, what kind of business process individual are you looking for on the board? I think boards will evolve the committee structure again as AI matures to understand whether or not there is a more appropriate committee structure to deal with the governance of AI. I think my prediction is some boards will decide that's not appropriate, and some boards will decide that it is. And it depends on where you're going with AI in that particular enterprise or industry. And I think, like just like technology, we will find out that most board members will believe that it is important to have a really good understanding of AI again, not to be a technical expert, but that we will find that to be a particularly important element of our board service.

Steve Schmith 36:48

Larry, thank you so much for joining us on Inside CVC. What a wonderful, fascinating, insightful conversation. Thank you for taking the time.

Larry Quinlan 36:57

My pleasure. Thank you so much, Larry. Really appreciate it. Thank you. Thank you.

Steve Schmith 37:02

Philip, what a fascinating conversation with Larry. It's clear from his point of view, velocity is a human problem. It's not about managing tech, it's about managing the organization's capacity for change. So as you think about this conversation, what are some questions you think our audience should be asking themselves tomorrow when they're in the office, next time they're in the boardroom?

Philipp Willigmann 37:29

Thank you, Steve. I fully agree. And I think if you're going to an ex-executive retreat or your next board meeting, you should think about the following three areas. One is really around tools versus transformation. Are we treating AI as a cost-cutting productivity tool? Or are we governing it as a fundamental shift to our core business model? Second, the capacity audit. Does our risk heat map account for our organization's actual human capacity to digest this much change? Or are we just buying tech that will sit on the shelf? And again, last but not least, direction versus governance. As a board, are we wasting time trying to direct the IT implementation? Or are we focused on governing the strategic displacement of our assets?

Speaker 38:22

Larry highlighted the speed of turn. Now the question becomes how you price the risk of the pivot. In our next episode, part three of our five part series, Karen Francis joins us to discuss the sacrificial lamb, the danger of being first with capital in the wrong cycle.