Designing the technology organization of the future

Transcript

Stuart Hobbs: Welcome to Pragmatism in Practice, a podcast from Thoughtworks, where we share stories of practical approaches to becoming a modern digital business. Now, most leaders say they want a technology organization that's built for the future, but far fewer know what that actually takes. It's messy, it challenges how you fund teams, how you make decisions, and how much control you're willing to let go of. Today's guest has lived this, not once, but several times. I'm Stuart Hobbs, your host for this episode, and I'm delighted to sit down with Ricard Vilà, chief digital officer at LATAM Pass, the frequent flyer and customer loyalty program for LATAM Airlines.
 

A quick note before we start, we originally recorded this episode in Spanish with my colleague, Ramiro Castillo. What you're about to hear today is the English version, so you can enjoy Ricard's insights wherever you're listening from. Ricard, welcome. Would you mind telling us a little bit about your role at LATAM Pass? What is the e-loyalty business, and what's the scale of what you're building?

[00:01:13] Ricard Vilà: LATAM Pass is one of the bigger loyalty programs. There are some Chinese that are bigger than us, but in this part of the world, is a very big one. We have more than 50 million members. What we try to do is to present them, an ecosystem in which they can interact daily in their lives and enjoy rewards and experiences that are valuable for them.

At the same time, we expect that this ecosystem will be also valuable for our partners who offer their experiences and their value propositions to our members. The main partner of this ecosystem, of course, is LATAM Airlines, and it's the main object of desire of our members. We've evolved from looking at ourselves as a frequent flyer program of an airline, which is where we started, to becoming a loyalty ecosystem which goes far beyond that.

[00:02:19] Stuart: Wonderful. Look, before we dive more into the organization, I'd love to understand a little bit more about yourself. I'd love to get a sense of who are some of the thinkers, the leaders that have shaped how you see the product organizations, and some of the experiences that you've had. What have they taught you? What do you still carry on today?

[00:02:43] Ricard: I'm an engineer and mathematician by trade. I've worked for two companies in IT consulting, one in the first period of my career. Then I went for my MBA, and then the last 14 years I've been at LATAM. I would say there have been two periods. The first one in LATAM, the first years. I was part of the classical black and white IT organization that was a support function across center that took orders from "the business," not very exciting, but also very interesting to fight to move from that scenario to what have been the second part, the last maybe seven years, in which IT, now it's called digital and data, which is more fancy, became the transformational engine for the company. That was the change in the environment and in my particular functions.

Also, I moved from working on employee-facing systems in the first part of my career in LATAM to working in customer-facing system. First, I was offered to lead the digital organization that was ending his cycle. It was an organization that went over maybe 10 years or more doing the website and the app for the passenger journey. Then at some moment, LATAM decided to hold this and start Greenfield from scratch. I went to lead the organization that was going to stop at one moment once this Greenfield was ready to cover that.

That period was amazing. It was like Disneyland for me. Moving from employee-facing systems to there, you all of a sudden have millions of transactions, and hundreds of thousands of users, and functions like design and experimentation, and a level of maturity of continuous improvement, continuous delivery that I have never seen in the previous roles. It was a great learning experience for me.

Then at some moment, once this Greenfield proved the hypothesis, LATAM decided to start a dynamic of co-leadership of these digital organizations. There were two leaders, one reporting to the chief commercial officer and one reporting to the chief information officer. I was invited to be one of these two. That was my second digital customer-facing organization. I spent four years there.

Now the last two, I've been doing what is LATAM's third digital transformation, which is the loyalty program, that also follows this pattern of co-leadership. Now I'm with Cristian Ortiz, that is the CEO of LATAM Pass, and he reports to the chief commercial officer. I go along with him. We, together, co-lead this digital organization. If I may continue with your original answer of the-

[00:06:22] Stuart: Of course.

[00:06:23] Ricard: -thinkers and books that you said, there is one ex-Thoughtworker called David Robinson, who wrote EDGE: Value-Driven Digital Transformation. He consulted for us. One of the key ideas of this book is to approach the transformation thin-slicing it, so imagining the organization as an orange and starting one part of the orange at a time. Now that we've seen what it happens after five pieces of the orange, it's an extremely valuable piece of advice.

These organizations, these pieces that we did, what we did at LATAM was to put an E in front of them. The first one is called e-business. That's the one I was. The second was for the aircraft journey, and it was called e-maintenance. The third one, which is the one I am now, is the loyalty, and then came e-carbon. Now we are about to start the fifth.

If it's connected to Thoughtworks, I can share two. There's this one, Agile IT Organization Design, written by another ex-Thoughtworker called Sriram Narayan. Created a profound impact the way he proposed ideas that were totally unconventional for me at that moment. Another one from a guy that was invited to your 2019 paradigm shift that you organized in New Orleans, and that I was invited to, which is Team Human by Douglas Rushkoff. Then, of course, many others. The No Rules Rules of Reed Hastings on Netflix was amazing, the Marty Cagan series recently. Also, we made the shift to product, and Marty Cagan, Teresa Torres were some of the mainstream thinkers that we chose to get our inspiration from.

[00:08:40] Stuart: Fantastic. Got a proper library. Now, awesome. I'd like to come back in a moment to talking more about learning and leadership and the importance of that. Before then, one of the things that strikes me about the way that LATAM Pass operates is that you've deliberately designed the organization so that people can work in the language they're most fluent in. This really interests me. I'd love it if you could walk us through that design choice and what that's unlocked.

Beforehand, I think this is also a great time to bring in one of my colleagues, Ivana Ciric. She's a product principal here at Thoughtworks, who I understand has worked with your team. She has firsthand experience of what this multilingual way of working actually unlocks. Ivana, over to you.

[00:09:40] Ivana Ciric: What I love about this is everything that Ricard already shared. It's that people can feel comfortable in the language that they are most fluent in, but others can still understand them. Of course, that takes having the kind of geographic distribution that LATAM has naturally available to them. It's also diversity in practice. It's a real concrete action you can take, whereas a lot of companies commit to diversity, and then they get lost at the value part. Here you've made a concrete step to encourage people to come with whatever, wherever they are.

As someone who came in with a very rudimentary knowledge of Spanish, basically no Portuguese. I could still understand people. I can see how they communicate, and I've adapted. I had to learn a little bit, but the technology that exists right now is incredible. By the end of working with the team, I was able to-- We can go on Google Meet now, and they can hear me speaking in the language that is most comfortable to them.

Overall, it's made me think more about how I'm communicating, because misunderstandings happen whether you're speaking the same language or not. It's not all about the language. Forcing myself to slow down, to think about what people are trying to express to me, and then how I am expressing what I need to communicate to them. With the technology and just our approach, knowing that that is expected and knowing that that is okay, that made a big, big difference. It's helped us collaborate so much more effectively.

[00:11:34] Stuart: Thank you, Ivana, for that. Fascinating. Ricard, as I said, it would be great if you could walk us through this design choice. I'd love to get some of the thinking behind it.

[00:11:48] Ricard: It was very noble in that part of the world, but in places where it's natural to speak two languages-- I'm from Barcelona in Catalan. Here it's very natural that people speak Spanish and Catalan, and that switch between them. My wife is Chilean. My kids are Chilean. At my table, when we have dinner, it's very normal for my kids to start one sentence speaking Spanish to their mother and finish the sentence looking at me in Catalan. For me, that was not strange at all.

There's one meme that I love from Modern Family, which Sofia Vergara says, "Do you know how frustrating it is to have to translate everything in my head before I say it? Do you even know how smart I am in Spanish?" This really resonates with me, because I've been, all my life, having to develop myself in English. I'm not at all as fluent as I am in my mother language. I feel I'm a fraction of myself when I have to speak in a language that is not mine, and I have felt this frustration many times.

What happened where we were is that it was a team of Brazilians and Chileans in a company that is the merger of a Chilean company and a Brazilian company. In the moment that this happened, everybody in Chile had Portuguese classes, everybody in [unintelligible 00:13:30] had Spanish classes. It was normal for everyone to at least understand everything. What happened is that, for whatever reason, Spanish was the normal language, and what you've got is the Brazilian people having to speak at 0.8 the speed and also having the same frustration that I was having.

I was convinced that the communication throughput is way higher when people can speak in their normal language and the audience understands 80% than if people are speaking 80% at their speed. We had this beautiful chance in which we were starting a new organization from zero, so we could define everything. It's a moment in which the organization is very, I don't know the English word, but maleable. It's very plastic. You can give it shape very easily. We declared that we wanted everyone to speak in their mother language.

It has worked. There are still some people that want to make the effort to speak the other language. There is sometimes occasions in which I remind them that we said we won't do that and people think that I'm not liking the ability of them speaking in Spanish, which is not at all my intention. We have to explain this several times because people arrive and leave, and these things that were very clear for everyone in day one, two years later, you have to continue reminding them. It's a continuous effort. I think that the final result is beautiful and that people can work better in this condition.

[00:15:29] Stuart: Ricard, one of the things that you were talking about there was very much spoke to me around empowerment. Empowerment of your team. Now, for me, empowerment is possibly one of the most overused words in the corporate world. Every leader claims to champion it, yet most people don't actually feel it. Let's be concrete, what does real empowerment look like in practice? How do you know when you've genuinely given someone enough autonomy and not just told them that they have it? Why is that so much harder to pull off for a lot of organizations than it sounds?

[00:16:13] Ricard: First of all, I would start saying it's totally contextual. The organization you live in has a certain roles, and empowerment is the distance you achieve from that starting point to a better position. One organization might look like an empowered team. In another one, might be order-taking team. It's always relative to the environment. That's why the word means so many different things in so many different places, because it's just relative to the starting point. It's good when the word appears there. For me, it's a good signal because it shows that there's a willingness to distribute authority. It's at the same time bad, because if teams need to be empowered, means they are powerless.

There's one beautiful book by Patty McCord called Powerful. The reason for the title is to say, "I don't want to empower teams, I want them to be powerful." It depends a lot on your belief system. How much you treasure control, how much you believe that you can control, or how much you have convinced yourself that the control you think you've had in the past, it's just the illusion of control. Depending on where you stand in this set of beliefs, empowering your teams will be easier or harder as a leader.

[00:17:50] Stuart: Lovely. Well, look, I'd love to go back to what we were talking about earlier, particularly around learning. You shared some fantastic books that, hopefully, our audience are going to check out if they haven't already. I think that it's never been more important for everybody to be learning continuously and to be embedding that into our ways of working. For leaders, that often means learning publicly, visibly, sometimes a little bit messily. We've seen this work really well in your organization, yet we've seen plenty of other organizations where the culture still expects leaders to automatically walk in with all the answers. What do you think that a lot of those organizations get wrong about learning as a leader? What's that costing them?

[00:18:51] Ricard: I don't know. It's been a long time since I've done work in one like this you are describing. [laughs] This is a question, probably, more for a consultant that has the opportunity to see a little bit of many organizations. Now I've been 14 years in one that has changed a lot over time, but that has happened to be the same. We have repeated many times that the pace, the speed of change is only going to increase. It has never been as fast as it is today, and it will never be as low as it is today.

When you really let that sink in, you realize that what you know today will not be enough to solve tomorrow challenges. Either you embrace a lifelong learner attitude, or at some moment you are going to start making the wrong decision based on the wrong beliefs. Once you do that, it becomes normal to read a lot, to watch a lot of videos, to share that on the chat groups, to start book clubs or sessions on Friday in which we sit together to comment what we think we learn from reading. By reading, you only learn a part of it. There are some things that you can only learn by experiencing them, but it's a good start.

These are things that we have been practicing for a while. I particularly enjoy doing it. I got energized by learning. To me, it comes naturally. I don't have to make an effort. When I'm procrastinating, when I'm avoiding filling a cost report, I go and watch a video that teaches me something, and then I fill the cost report.

[00:21:14] Stuart: Absolutely. I think it can be, as you say, incredibly energizing to challenge yourself and learn new things and ultimately want to change, want to adapt, and be better. Now, you've led large-scale digital transformations, as we've heard, and you're now in the middle of what might be possibly the biggest one yet, an AI transformation.

Let's imagine for a moment that you're sitting across from a CEO at another organization who wants to do this for real, who wants to do an AI transformation. They want to go beyond just putting together a lovely slide deck. They actually want to make and effect real change. What are the two or three things that you think that they need to personally be willing to change about themselves before they can ask anything of their organization? We've already spoken about learning and the importance of learning. Is there any other advice that you would give executive leaders that are looking to do this?

[00:22:20] Ricard: What they will need to change depends on where they are. Let me change slightly the question to what I think they need to have. Curiosity, I think it's essential, for sure. Humbleness, I think it's very important. Maybe it's not essential, but if you don't have it, you are going to suffer a lot because you will make many mistakes. With humbleness, the path will be less painful. There are some things I think that require genuine humbleness. Otherwise, you will not look for them because you will think you have it. This more than a trait is a concept.

I think that one of the most valuable concepts that are out there is the-- Dave Snowden puts it very nicely in an eight-minute video. It's the difference between the Cynefin frameworks. The difference between complicated and complex. This is a very important difference. I think that the business world, up until some years ago, has been much more complicated than complex. You could strive by mastering how to solve complicated problems. I think that it's been already maybe two decades in which business is mainly complex.

Most of traditional executives that have done traditional MBAs pride themselves of being very skilled at doing things that are solving complicated problems. If somebody is listening to this and not knowing what's the difference between complicated and complex, then I would suggest that this is the next concept to go and study and understand. I think that without that, you will be making mistakes in week one.

[00:24:26] Stuart: Indeed. When you look at how a lot of organizations are responding to AI right now, Ricard, we're seeing a lot of them following the same playbook. A dedicated task force here, a new prompt library, a handful of tool subscriptions. Given how deeply that you've thought about org design, do you believe that AI actually demands a rethink structurally of how we build and run teams, or is it more of a skills and mindset challenge that any good organization can absorb?

[00:25:03] Ricard: I think it's a bit of both. I think that you were, some years ago, doing the digital transformation or moving to the product operating model, and you did that based on recipes instead of in principles. By now, you know you have failed. Now with AI, it's going to be exactly the same. Those who failed at the digital transformation or those who failed at moving to the product operating model, if they apply the same approach, they will see the same results with AI.

I think that in that sense, there are many common themes with those transformations we tried in the past before November 2022, in which the world stopped talking about anything that was not AI, and now they only talk about AI.

Then there are some things that are different. I think that it's like the difference of playing with normal bombs and with atomic bombs. The scale, the power that can be unlocked, it's orders of magnitude bigger. The differences between those who get it right and those who don't will be maximized. If up until now most of the things was a winner-takes-all, I think this aspect will be exacerbated in the AI game.

[00:26:40] Stuart: No, indeed. I think that there's always been a tension in product work between moving fast and maintaining the depth that great products need. The craft, the customer empathy, the hard thinking. Arguably, I think a lot of people are saying that AI is intensifying that tension. I'd love to get your thoughts on where are you actually letting AI accelerate the product development process and where are you insisting that human judgment has to take precedence over that acceleration? It'd be great to understand how you're striking that balance.

[00:27:20] Ricard: Yes, it's the fast versus far program. I still have way more questions than answers around that. The team recently made something that was amazing. I need to explain to you a slightly long story to be able to get there, so bear with me. One of the beautiful things of this thin-slicing the transformation is that in every transformation you do inside one part of your company, there is something that is the major learning theme. Then the next one stands in the shoulders of the previous one, gets that as a consolidated learning, and goes for the next thing.

The first transformation had one theme, the second had another, the third, loyalty, the one I mean, the theme was the product operating model. We had done amazing things in the previous one, in engineering, in design, in data, in org design. Somehow we lost track of product. Don't ask me why. In the third one, we realized that that was the thing that we wanted to invest on because there was a lot of upside to that. For us, product, Marty Cagan's ideas, Teresa Torres's ideas was the themes that we invested in. We started September 24. In September 24, AI was still not as impressive. It was already impressive, but not as impressive as today.

Then May, June '25, the fourth transformation started. For them, the theme was AI. They were born with AI-native teams. Already smaller teams, every people in every role using AI tools in a very advanced way. Of course, they got amazing results and very visible and all the lights were there. We started to feel the pressure that we needed to also do that. Now, there are a couple of certainties after what happened. What I can tell you is that jumping on the train now or six months later is not that clear which is better.

Now you will learn a lot, but in six months' time, it will be so much better. That many things that now are super hard, in six months' time will be soft, and you will get that value. Of course, you cannot repeat that forever because you never jump, but the point is that it's not that bad to jump just six months later than somebody else. That's one thing. The second is that this was something that many people in the organization did, but for which João Lucas, who is the head of engineering in Loyalty, has a protagonist role there, and a lot of credit of these results is attached to his leadership.

They defined a way to approach-- there was one moment in which we said, "Okay, now this thing is super mature and we need to jump. Otherwise, it will be--" There is nothing more valuable than jumping into the trend. That was one day of February this year. Ten weeks later, the organization had completely transformed. The way they were working was completely different, and things that used to require X effort were requiring a tenth of that in really big, complex, long workflows.

Answering now the question you asked me 20 minutes ago, a lot of questions is still open in my mind. Two things, jumping now or in six months' time, it's not that bad. Both can be good depending on where you are. Second, if you do it well, in just 10 weeks, you can have a completely different, way more powerful organization than the one you had just 10 weeks before. I'm not talking a 30-people organization, I'm talking a 350-people organization.

[00:32:12] Stuart: Well, it'd certainly be useful to have a crystal ball to see what's going to happen, but none of us have that, sadly. However, I am going to challenge you now, Ricard, to look into your imaginary crystal ball. I'd like to put yourself 10 years in the future. What do you think the organization's or the market, looking back 10 years from now, will say, "What are they doing? Why are they designing organizations that way?"

Is there anything that you think that folks in the future, 10 years in the future, are going to look back to today and say, "That's crazy. Why are they doing it like that?" Any thoughts on that front? It's a tough one, as I said. We haven't got crystal balls, but I'd love to get your thoughts on what future you might look back in 10 years and go, "That's mad. Why is everyone doing that?"

[00:33:11] Ricard: I'm going to mix what I think will happen with what I would love that happens, and maybe it will not happen in reality in 10 years. Maybe we need a generation to retire, but I think it will happen. The thing that will happen, I think, is that they will look back at us and say, "Why did they concentrate power in a few people based on a distrust of what individuals could do? Why did they did that for 120 years instead of trusting people and distributing power so that everyone close to the problem could make decisions fast in order to create value for the customer and in order to connect with the purpose of the organization?"

[00:34:13] Stuart: Fantastic. Well, hey, if there are any listeners here from 2036, you heard it here first. [laughs] Lovely. Ricard, thank you so much for joining us today and sharing your insights. It's been fantastic. For more details on the work that we've done with the team at LATAM Pass, please visit the Thoughtworks website to read our case study. We'll also add a link to the episode notes of the podcast. Thank you so much, Ricard, for joining us today.

[00:34:50] Ricard: Thank you, Stuart.

[00:34:51] Stuart: Thanks to you, our audience, for tuning in today for this episode of Pragmatism in Practice. If you'd like to listen to similar podcasts, please visit us at thoughtworks.com/podcasts. If you enjoyed the show, help spread the word by rating us on your preferred podcast platform. Look forward to seeing you next time. Thank you. [music]

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