Category: Economics

Source: Microsoft

Headline: Podcast: Jared Spataro on maximizing intelligence on tap

MOLLY WOOD: That was Jared Spataro, Microsoft’s Chief Marketing Officer for AI at Work. Spataro and his team help companies understand how to use AI to solve unique business problems, reduce costs, and drive value. They also use sophisticated research and customer feedback to improve the company’s products and help customers deploy them in a relevant, productive, and secure way. Some of that research is on display in the new 2025 Work Trend Index report. It examines survey data from 31,000 workers across 31 countries, plus brings in LinkedIn hiring and labor market trends and trillions of Microsoft 365 productivity signals. It surfaced insights to help every leader and employee understand how knowledge work will evolve. And in his AI at Work newsletter on LinkedIn, Spataro predicts that soon all businesses will operate with collaborative teams of humans and AI agents, or what he calls “digital employees.” He notes that this evolution will require every leader to redefine how they think about their teams, so we talked about that, as well as how AI agents will transform workflows and team structures, and why the vital first step for companies is to hire that first digital employee. Here’s my conversation with Jared. Jared, thanks so much for joining me on WorkLab.  

JARED SPATARO: It’s great to be here. Thanks for having me, Molly.  

MOLLY WOOD: So a key phrase that comes up in the new Work Trend Index report is that leaders can now access “intelligence on tap.” How do you define intelligence on tap?  

JARED SPATARO: Well, I think it’s worth pausing for a second just to recognize that, up to this point in human history, if you wanted intelligence to help you do something, you really had to hire a human. And today, we have reached the point with this technology, with the models that are out there powered by AI, that they can really think, reason, even do, at the level of a human. So what that means is you can start to buy intelligence without hiring humans, and you can buy it like you would purchase a commodity like electricity, any other input to a business. That means it goes from being something scarce and expensive, also kind of bundled up in a particular package, to something abundant and cheap and available on demand in a much smaller package that you can purchase. So from my perspective, it’s a really, really big thing. It’s a big deal for business. 

MOLLY WOOD: Another key point in this report is that AI-forward companies, or the ones you call “Frontier Firms,” will have a real advantage in seizing the force-multiplying power of AI agents. Do you think all companies will have to become Frontier Firms?   

JARED SPATARO: I think they’ll either become a Frontier Firm or they’ll end up being disrupted by someone who’s figured out how to use this intelligence on tap more effectively than they do. So you look at, for instance, the volatility in the market today. You look at how quickly companies have to now adapt to all sorts of different situations, and those that are able to combine human intelligence with artificial intelligence in the form of agents, I think they’re going to differentiate themselves for sure. 

MOLLY WOOD: The question of course, in a time of uncertainty, or I guess really any time, is what timeline are we talking about? How soon do companies have to be ready for this?  

JARED SPATARO: Well, let’s just look at the report for a second. Already, 82% of the people that we surveyed say they’re confident that they’ll use what they call “digital labor” to expand their workforce capacity in the next 12 to 18 months, Molly. So that’s kind of how companies are thinking about it. But at the same time, we look at this and say that it will be a process. There’s going to be a work-in period, but I’m confident that this calendar year, companies who are on it, who recognize, I’ve gotta be looking to the future, they’ll be experimenting with digital labor and digital employees.  

MOLLY WOOD: Well, and of course, you must be interacting with customers who are already operating this way. Are there examples of companies who have taken the leap?  

JARED SPATARO: For sure. You know, interestingly, what we find is that there’s kind of this barbell in the distribution. There are companies who are growing concerned, who look at this and say, Hey, I want to be on the forefront here. So, as an example, Dow, they’re an American multinational, they are already projecting that they’ll save millions in the first year with a supply chain agent that they have created to catch misapplied fees. It happens to literally save them millions of dollars. But on the other end of the distribution, the other end of the spectrum, we are definitely seeing AI-native firms that are really representative of these Frontier Firms that are leading the way. There’s an ad agency called Supergood that has folded decades of ad research into their platform to scale expertise across teams with AI. There’s another really interesting company. It’s an AI-powered staffing firm run by a single employee that’s on track to earn $2 million this year. So you look at both ends of the spectrum and you can see it. The tough place to be, the place I don’t think anybody wants to be, is in the middle, you know, where you’re not either someone kind of coming up and disrupting or someone who’s decided, Hey, I’m going to get ahead of this, because the middle is the place that will be disrupted. 

MOLLY WOOD: Right. So for the business leaders who are trying to leave the middle as soon as possible, who are trying to recalibrate for this era, what should they focus on?   

JARED SPATARO: One of the things that we are seeing in the report is that the companies who are taking the step forward are those who recognize that they have to first increase AI literacy across the entirety of the firm. Last year was a really interesting year because the WTI, when we released it, showed that employees were leading, they were the people out in front bringing AI into the workplace. Well, this year it’s kind of really flipped around. We now have managers who are leading the charge, and they’re recognizing they’re ahead of many of their employees. And so we have to have a way, I think, to help all employees start to improve their AI literacy. But then from there, once you improve AI literacy, you kind of have to change a mindset. You really have to think, well, what would I do if I had intelligence on tap? Where would I apply that first? You know, how would I structure everything from my teams to my processes to take advantage of that? And that’s maybe the two steps that we’d give, we’d encourage everybody to start with a broad base, and then second, look for very specific ways to apply the tech.  

MOLLY WOOD: We’ve been talking about the potential of AI agents, or digital employees. I mean, what is that and how does that differ from AI, which we might think of as a personal assistant that can manage your calendar or write an email? 

JARED SPATARO: This idea of a digital employee introduces a lot of really important concepts, but perhaps the most important concept is this idea of the digital employee is autonomous and can go off, kind of goal-seek in a very complex, not well-defined environment to get to an outcome that you’re looking to accomplish. That type of digital employee is just priceless because it could sort through all of the noise, sort through the systems, all the data that it has access to, in order to go grab what it needs, reason across that, and come back and say, Hey boss, I think I’ve got something here for you. And that’s the idea of hiring your first digital employee that can do that type of work.  

MOLLY WOOD: I want that. I want that. Are you and your team at Microsoft already using digital employees like this day to day?  

JARED SPATARO: We absolutely are just starting to do that. In fact, on my team there’s a data scientist, Alex Farach, who has created three agents to assist him with the Work Trend Index, which is really exciting. One agent goes online every day, scoops up some relevant new research. Another assists with statistical analysis. He has a third one that drafts really rich briefs to help him connect the dots. So imagine that, he has started to command, if you will, a team of agents that are helping him. These are digital employees to help him get the work done. So, pretty exciting, to see it come to life. I’m just starting to do that same thing. Typically, mine is much more oriented toward the interactions I’m having with customers as I’m starting to get up to speed or try to figure out how I can work with a particular customer. 

MOLLY WOOD: What does this start to look like day to day for knowledge workers? What does a typical workday look like for someone who has AI agents performing tasks on their behalf? It’s like a view from the future, if you will.  

JARED SPATARO: Well, let’s start with the present and then we’ll go to the future. You know, presently, we know through our telemetry that almost all professionals start and end their day in email or on Teams. So in other words, in communication tools. It makes a lot of sense, we’re kind of checking in with colleagues. But we think that the way this will happen is that people will have a personal assistant. We call that Copilot, and that personal assistant will be how you start and end your day, because it will be infinitely better than a single-threaded communication tool at providing you a view of all the work that you’re doing. That personal assistant also, most importantly, will essentially be your window into the world of digital labor, or the world of agents, if you will, and we believe that window, the ability of a Copilot, for instance, to orchestrate all of the agents that are getting work done on your behalf, that’s where the power will come in. 

MOLLY WOOD: Stepping back, I think a lot of employees are wondering if digital employees are going to assist human employees or replace them. So the question on everyone’s mind, of course, is what happens to jobs?  

JARED SPATARO: I see it this way. First off, 80% of the global workforce, both employees and leaders, say that they’re lacking enough time or energy to get their work done. So you have to look at it for a moment and recognize the moment that we’re in, the context in which we’re operating. So I believe we need intelligence on tap. And the way I think of it is, we have too many problems to solve, too many things to work through, too many challenges to tackle, and this is such an important time as you look at the history of business, as you look at the history of the world. So, we look at this and say, man, our brightest days are yet ahead. We look at the ability for digital employees to not only help us cut costs, but also help us innovate as we look at everything from energy to some of the most pressing problems that humanity faces. That’s where we get excited that these digital employees will really help us. 

MOLLY WOOD: So how should leaders and employees think about their own agency as more and more work teams have humans and AI agents collaborating? Some people aren’t thinking of this in terms of business value and opportunities. They’re imagining, you know, scenarios from science fiction.  

JARED SPATARO: That is certainly the narrative that I see often in the press, because it taps into Hollywood, it taps into, you know, I think it does tap into our fears. This technology is not something where you click a button and it’s wired into every one of your systems and it can do everything without your help. And so I think human agency here is incredibly important. You can hire your first digital employee, but you have to onboard the thing, you know, you have to connect it up to your systems, you have to tell it what it can and can’t do. You have to watch it ramp up into your organization. So I’m excited about this moment because I think it will all be guided by human agency. Nothing’s going to happen here without humans recognizing, wow, this is my opportunity to leave my mark on history, to leave my mark on humanity, to do something that will be a pattern that we’re going to follow for decades to come. So I hope people are energized by it. I hope they don’t think that it’s a fearful thing. Instead, I hope they really recognize that it’s an opportunity for leadership and for a lasting mark on the history of the world. 

MOLLY WOOD: So you mentioned that in the past, some of the AI revolution has been driven from the bottom up, from employees bringing ideas in. Now it really is the role of leaders and managers to implement this change and bring people on board. How does this change the role of managers, not just from an adoption perspective, but also managing human and digital employees at the same time? 

JARED SPATARO: Well, let’s start from the role of managers. I think the theory of the firm has been predicated on this idea that you organize around the labor and how it uses capital. You know, those are the economic basics. Now, all of a sudden, the theory of the firm actually changes because a manager is meant to allocate resources that now include this intelligence on tap to produce outputs. And that means that, literally, a manager has to learn a whole new skill set, not only depending on what you’re doing, how do you create kind of the processes, if you will, to get something done, but where do you stick human talent? Where do you stick this intelligence on demand? How do you coordinate between those things? I mean, there’s a whole new, I think it’s a whole new era that we’ll be opening up here. Very exciting.  

MOLLY WOOD: I could imagine that that would apply to younger employees too.  

JARED SPATARO: My theory is that really educational institutions are going to start to need to think about, how do we essentially produce early-in-career talent that works as well as mid-career talent used to? In other words, during their education, how do they learn to become the boss of agents, such that they are able to command a team, able to produce the same type of work a medium or large size team would produce. Because they know how to delegate, they know how to judge work, they know how to pull it back together. They know how to send things back to be done again. You know, that’s usually stuff that takes 10, 15 years in the workforce to learn just by practice. And we expect, I expect, that early-in-career folks will be able to do that work now with the aid of these tools. So in many ways, I think we’re making every employee a manager, every employee a leader. And that’s a very different change. Today, a lot of knowledge work happens at the leaf nodes, you know, people who have to kind of get the work done all on their own, whether they’re an analyst or a writer or a designer. And what we’re essentially saying is, all of those jobs are going to turn into managerial jobs where certainly you can do the work if you want to, but you’ll find you get more done, you produce better work, when you orchestrate agents to go get that work done.  

MOLLY WOOD: In fact, one of our recent podcast guests, Harvard Business School professor Karim Lakhani, just co-authored a paper called “The Cybernetic Teammate.” You’ve said you’re pretty excited by some of its findings, right?  

JARED SPATARO: Man, I love this study. You know, this is a study I can’t help but cite as I work with management teams. Probably the most important finding of the study from my perspective is that a single person equipped with AI can perform as well as an entire team of people not equipped with AI. And we’re just getting started. But it was specifically a field test, Molly, that was done with Procter and Gamble, so it’s real work in the real world, and I just think that finding is remarkable. I think we’ll come back to it, you know, in five, 10 years and say, yeah, that was the beginning. We saw it right there. We saw a spark of what the future was going to be.  

MOLLY WOOD: You know, it strikes me that we’re talking about this in such a matter-of-fact way. There are digital employees, you have cybernetic teammates, intelligence is now on tap. Can you give us your perspective on the tech advancements that got us to the point where we’re discussing this in such a commonplace way?   

JARED SPATARO: It’s caught so many of us by surprise because it’s happened so quickly. Go back to November of 2022, ChatGPT is introduced. Remember, at that point, we’re still not sure if technology can pass the Turing Test. In other words, could it respond to questions from humans in a way that we could not determine if there were a human or a machine on the other side? You know, that was the question in November of 2022. Well, we found it could. We also started to see the early glimmers of reasoning. It wasn’t just answering questions, but it looked like it was actually kind of, in a reasoning type of way, mimicking what humans do to answer questions. And that was exciting for us. Then fast-forward, the models continued to get more and more capable, but fast-forward essentially to December of last calendar year, of 2024, where OpenAI introduced the first reasoning model. This was a model that was trained on what we call chain-of-thought types of patterns, where we were literally saying, now we want to train you to reason. We actually want to show you what it looks like to do good analytical and mathematical reasoning and see if we can train you to do that. o1 was the first model that did that. It proved to be just kind of mind blowing for us. o3 is the current best tech out there. It is now outperforming and demonstrating what we call superhuman intelligence, Molly, meaning humans cannot outperform it in particular domains. And that’s I think why we’re all of a sudden, matter of fact. We saw the glimmers of reasoning come on. We saw the models get better, and then bang, over the last couple of months we’re in this place where, with our best thinking, we’re not sure we can outthink the machines. And that’s pretty exciting. I think it leads us to imagine what we can do with this technology to really further our dreams about what we can do for the human family. 

MOLLY WOOD: I want to ask you about the ROI of AI. How are firms performing, particularly firms that are starting out with AI or really evolving into, or starting as Frontier Firms?  

JARED SPATARO: Well, truly Frontier Firms are outperforming their peer group or their industry set in really exciting ways. One of the key measures that we see that just gets right to the heart of things is essentially revenue per employee. That’s an important measure for almost every industry, because you’re looking at how you’re deploying capital and people to get things done. And in some of these places, we’re starting to see them do 4x, 10x, or more per employee. And that’s just simply because it’s a really different setup. I mean, they start and say, well, why would you need these types of roles? I know of one of these Frontier Firms, for instance, that decided not to hire a CFO simply because they felt like they had enough analytical understanding, and using an agent to aid that they were able to get the specialized skills that they needed. I know another one that decided to not hire a CMO, but instead hire someone who was earlier in career and say, hey, we believe in you with these tools, we think you can perform as well as any seasoned veteran would be in marketing. Those types of decisions kind of lead you there. And then you start to get from revenue per employee to just some of the key measures in a particular industry. You know, I have seen the legal profession really start to undergo some big changes. Lawyers are all about essentially how much they can bill per hour. Well, all of a sudden when you have intelligence on tap, that doesn’t even make sense as a way of thinking about the business model any longer. And so there’s another place that we’re starting to see entire business models change. So it starts with the most basic of just looking at how much you’re driving per employee. But I think we’re going to start to see big changes even in the models that people use to monetize what value they produce. 

MOLLY WOOD: It feels like that ability to quantify is so important. It’s so valuable to say, this is why you can’t stay in the middle.  

JARED SPATARO: Well, here’s what’s happened that I think has been so interesting. I mean, all along the way I feel like I’ve learned things where I look backwards and say, of course I should have known that. So let me just trace Jared’s history here. You know, we came out with a digital assistant that was saving people first 20, then 30, then the good people can use Copilot 40 hours a month. But guess what? Most CFOs said, That’s cute, but I don’t really have a way of quantifying that to the bottom line. It doesn’t impact revenue and obviously as directly as I wish, Jared. That makes sense to me. So then we moved over to process re-engineering where people were like, Hey, pick a process, something like customer support. And with that process, can you use this technology to really impact costs in a measurable way? And they were, for sure. The biggest problem was you can only pick so many processes a quarter, in a year, and get that work done. The sweet spot that we found has been this idea of digital labor and digital employees, and that’s because I believe everything in a firm today is really tooled around an employee. We all get what it looks like to hire and onboard an employee. We know what the costs are. We call them a fully burdened cost for an employee. Everybody speaks that language. You tell me I can add the equivalent of five employees to my team without all of those costs, I know how to do the math on that. And that’s where I think we’ve hit a sweet spot of how we will be able to quantify, measure consistently in the frame and the system that we’ve already set up the impact of this technology. So I think it’s a really interesting maturity point in just the world absorbing the technology, measuring the impact of the technology.  

MOLLY WOOD: You are someone who specifically has seen a lot of technology transformations. What can we learn from the times that we have been somewhere like this before?  

JARED SPATARO: The one that I go back to that I have the most experience with is the internet. You know, it’s really fun to go back and look at people’s predictions as the internet started to move out of the laboratory, out of research, and into a commercial setting. And I would say the shape of what I have studied there, the impact on society, you know, I feel like we’re going to see that same thing happen here. I believe that, you know, when you look at the internet, no one would say the internet’s been bad for humanity. We all think, man, our lives are much better. At the same time, we can also look at some things that we should have done early on with the internet. I look at an example of something like social media. And so I think that some of those same patterns apply here. So I just think that going back to look at what’s happened, particularly with the internet, really provides us with a good model that’ll help guide some of what we need to do with this tech. 

MOLLY WOOD: If you are willing, can you tell us how you’re starting to see AI be incorporated outside of work? I have heard, for example, you may have used it to help you learn Spanish.  

JARED SPATARO: I have been using it to learn Spanish. I love this thing for language learning, because up to this point you’ve had to find a way to hire or become really good friends with a native speaker so that you can practice. I love just conversing with it. And then you can set it up and say, Hey, I want you to converse with me about these topics, but if I make mistakes, I want you to pause for a second, kind of pause the conversation that’s happening, just correct me and then we’ll go back to the conversation. So I ask it things about, you know, single-cell biology. I ask it about the finer points of dining. I mean, you can just ask any specialty topic and it comes back to you, which is really fun. But in general, I would say that that’s what I see outside of work. People starting to use it to learn about new things, to augment their understanding of the world, to create opportunities to expand what they think about and what they’re processing. I mean, all of that’s very exciting to me.   

MOLLY WOOD: Knowing that we’re in this moment of profound change, what is your advice for business leaders today?  

JARED SPATARO: Yeah, that’s pretty easy. I mean, I’d say hire your first digital employee this week. You need to get after this. The idea that this is, you know, months off, that was like last year. This year you can hire your first digital employee. So I’d say that’s the first one. Number two, what that introduces then is this idea of human-agent teams. And so I think you need to start thinking about your human-agent ratio. You know, that should be a really good measure. We don’t know exactly what that should look like, but it will be a measure of how you’re deploying this technology. And then the last thing I’d say is, once you start to see that pattern take shape, you’ve got your first digital employee, you’re starting to see them proliferate, you’ve got human-agent teams, you need to think about every team and every process. Like, don’t just have it be localized. You know, if you don’t do it, your competitor will be doing it. So there is a sense of urgency that I think is important for business leaders to feel at this moment here in the spring of 2025.  

MOLLY WOOD: This is a high bar because a lot of exciting things are happening. What excites you the most about this moment? 

JARED SPATARO: I feel like humanity’s hit a point where we have been facing some challenges that have been almost like brick walls. You know, whether that is how to cure cancer or how to truly eradicate poverty, how to really grow GDP around the world in a way that’s both sustainable and shareable. You know, some really important questions. And I think we’ve hit that brick wall because I think it’s fair to say that we’ve reached the limitations of our ability to work through them on our own. I think what excites me the most is with this technology, we can tackle those things. We can invent new drugs. We can invent new energy technologies. We can create ways for the people who have not traditionally had access to specialty training and education and capital. To create firms that flourish right out of the gate. I don’t know, you put those things together, they are very hopeful. You know, it does feel to me like a new chapter in the history of mankind. That is, I don’t know, if you don’t get inspired by that, I don’t know what I have to offer you to be inspired by.  

MOLLY WOOD: Jared Spataro is Microsoft’s Chief Marketing Officer for AI at Work. For more of his insights, follow him on LinkedIn, subscribe to the LinkedIn newsletter AI at Work. Jared, thank you so much for the time today. 

JARED SPATARO: Great to be here. 

MOLLY WOOD: If you haven’t already, please subscribe to the WorkLab podcast for more fascinating guests with actionable insights that can help leaders develop an AI-first mindset and maximize the ROI of AI. If you’ve got a comment or a question, drop us an email at worklab@microsoft.com, and check out Microsoft’s Work Trend Indexes and the WorkLab digital publication, where you’ll find all of our episodes along with thoughtful stories that explore how business leaders are thriving in today’s digital world. You can find all of it at microsoft.com/worklab. As for this podcast, rate us, review us, and follow us wherever you listen. It helps us out a lot. The WorkLab podcast is a place for experts to share their insights and opinions. As students of the future of work, Microsoft values inputs from a diverse set of voices. That said, the opinions and findings of our guests are their own, and they may not necessarily reflect Microsoft’s own research or positions. WorkLab is produced by Microsoft with Godfrey Dadich Partners and Reasonable Volume. I’m your host, Molly Wood. Sharon Kallander and Matthew Duncan produced this podcast. Jessica Voelker is the WorkLab editor.