What is business transformation? Arthur Hu, CIO for Lenovo Group, speaks with CXOTalk about embedding technology in businesses, shadow IT, and managing the balance of high uncertainty and high likelihood of change.

As the Chief Information Officer for Lenovo Group, Hu is responsible for the overall delivery of information services, digital technology, and business transformation. He works with the business units to drive business model transformation for more competitive capabilities, and oversees a portfolio of strategic initiatives to further strengthen IT management and business collaboration.

Prior to joining Lenovo in 2009, Hu worked with McKinsey & Company, Amazon, and in software engineering at a variety of companies.

Transcript

Michael Krigsman: We hear a lot of talk about the role of the CIO and the great opportunities that are presented to CIOs through digital transformation and our new digital environment. But, what does that really mean? Today, on Episode #291 of CxOTalk, we are exploring this issue with the global CIO of one of the largest organizations in the world. I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk.

Now, before we begin, I want you to, right this moment, invite a friend, tell your friends, tell your family; come watch and be sure to subscribe on YouTube right now.

I want to say thank you to Art Hu, who is the global CIO of Lenovo Group. Art, how are you? Thanks for taking time to be with us today.

Arthur Hu: Michael, it's a pleasure to be on. Thanks for having me. I'm a long-time viewer, and I'm very happy to be on the other side of the webcast, so to speak, for once.

Michael Krigsman: Well, thank you so much. I'm just thrilled that you're here with us. You're in China. I'm here in Boston and you're in China right at the moment.

Arthur Hu: Yeah, that's right. We're doing something a little bit different than the regular, but it's always good, as a part of being global, to try things new, so I'm happy we could make this work.

Michael Krigsman: Art, please, we all know the name, the brand, Lenovo. But, tell us a little bit more about the company.

Arthur Hu: Yeah, absolutely. It's an interesting question. I think everyone knows about Lenovo and thinks of, oh, IBM ThinkPads. But, in the past few years, we've changed significantly. We're now $45 billion in revenue. We have a presence and customers in over 160 countries. We're one of Interbrand's top brands globally. And, last year, we were #226 on the Fortune 500.

What's most interesting is we're definitely not just Lenovo of ThinkPads and laptops anymore. We also have an intelligent device group that carries, and we offer as solutions, anything that computes for consumers that you can hold in different form factors, which includes mobile phones, laptops, desktops, and also things like AR and VR. Then the other side, we also are offering data center solutions. Not just servers, but also storage, network and, increasingly, powering the computing revolution and the AI revolution.

Michael Krigsman: Lenovo has its hands across a very broad range of technology, and the consumer brand is really just the tip of the iceberg.

Arthur Hu: Yeah, that's absolutely right. One of the things that we like to say is we're not a PC company in a sense of personal computer. But, in the future, it's really about personal computing, so a different kind of PC.

Michael Krigsman: Now, you're the global CIO. Please tell us. What does that mean at Lenovo, and what is the scope of your responsibilities?

Arthur Hu: That's a good question and one I do think about quite a bit. I think there are two facets that I work on. One facet is what we would call more on the run and grow the existing business, and I'll talk about why I put those together in a second. The other is really about transforming the business. Digital transformation, of course, it's hard to receive a journal or a newsletter that don't mention those words. But, that is also the other aspect of the role that I focus heavily on, which is around digital and business transformation.

On the "run the business," I think that's pretty self-explanatory. I think everyone who is watching today would understand in making sure, in the data center, your hybrid cloud is running, email is running, [and] security incidents are being managed.

I think it's really on the "grow and transform the business" that's quite interesting because there are a lot of net new content, which is very different than keeping the business running. It's an entirely different set of interactions and different problems to go tackle and solve.

Michael Krigsman: When you talk about "grow the business," I think that gets right to

Michael Krigsman: We hear a lot of talk about the role of the CIO and the great opportunities that are presented to CIOs through digital transformation and our new digital environment. But, what does that really mean? Today, on Episode #291 of CxOTalk, we are exploring this issue with the global CIO of one of the largest organizations in the world. I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk.

Now, before we begin, I want you to, right this moment, invite a friend, tell your friends, tell your family; come watch and be sure to subscribe on YouTube right now.

I want to say thank you to Art Hu, who is the global CIO of Lenovo Group. Art, how are you? Thanks for taking time to be with us today.

Arthur Hu: Michael, it's a pleasure to be on. Thanks for having me. I'm a long-time viewer, and I'm very happy to be on the other side of the webcast, so to speak, for once.

Michael Krigsman: Well, thank you so much. I'm just thrilled that you're here with us. You're in China. I'm here in Boston and you're in China right at the moment.

Arthur Hu: Yeah, that's right. We're doing something a little bit different than the regular, but it's always good, as a part of being global, to try things new, so I'm happy we could make this work.

Michael Krigsman: Art, please, we all know the name, the brand, Lenovo. But, tell us a little bit more about the company.

Arthur Hu: Yeah, absolutely. It's an interesting question. I think everyone knows about Lenovo and thinks of, oh, IBM ThinkPads. But, in the past few years, we've changed significantly. We're now $45 billion in revenue. We have a presence and customers in over 160 countries. We're one of Interbrand's top brands globally. And, last year, we were #226 on the Fortune 500.

What's most interesting is we're definitely not just Lenovo of ThinkPads and laptops anymore. We also have an intelligent device group that carries, and we offer as solutions, anything that computes for consumers that you can hold in different form factors, which includes mobile phones, laptops, desktops, and also things like AR and VR. Then the other side, we also are offering data center solutions. Not just servers, but also storage, network and, increasingly, powering the computing revolution and the AI revolution.

Michael Krigsman: Lenovo has its hands across a very broad range of technology, and the consumer brand is really just the tip of the iceberg.

Arthur Hu: Yeah, that's absolutely right. One of the things that we like to say is we're not a PC company in a sense of personal computer. But, in the future, it's really about personal computing, so a different kind of PC.

Michael Krigsman: Now, you're the global CIO. Please tell us. What does that mean at Lenovo, and what is the scope of your responsibilities?

Arthur Hu: That's a good question and one I do think about quite a bit. I think there are two facets that I work on. One facet is what we would call more on the run and grow the existing business, and I'll talk about why I put those together in a second. The other is really about transforming the business. Digital transformation, of course, it's hard to receive a journal or a newsletter that don't mention those words. But, that is also the other aspect of the role that I focus heavily on, which is around digital and business transformation.

On the "run the business," I think that's pretty self-explanatory. I think everyone who is watching today would understand in making sure, in the data center, your hybrid cloud is running, email is running, [and] security incidents are being managed.

I think it's really on the "grow and transform the business" that's quite interesting because there are a lot of net new content, which is very different than keeping the business running. It's an entirely different set of interactions and different problems to go tackle and solve.

Michael Krigsman: When you talk about "grow the business," I think that gets right to the heart of the key issue because, historically, the CIO role was about that, keeping the business running, that operational excellence. When you think about growing the business, now inside Lenovo, what does that actually mean?

Arthur Hu: I think this one also is in two parts. One is about growing the existing business. On that aspect, because it's fairly well understood, there it's about how do we provide better capabilities, more efficiency, better experience for known product lines, known offerings. In that sense, the solution space is much more around something that's much better understood. It's something that the company already had a competency around. Therefore, they tend to be more linear or incremental.

The other aspect around growing the business is on what I just mentioned on the digital transformation. That's where some discontinuity or areas where we're not so good today, or we're trying to grow into, or we're trying to learn about whether there's a fit on something that we could make a difference and bring value to the market. On the digital transformation side, that's the other aspect, and that's marked by, as I mentioned, discontinuity because it's not something where it's as clear, necessarily, what you have to do right out of the gate.

Michael Krigsman: What is the role or the place of the CIO in that digital transformation side?

Arthur Hu: I think, at Lenovo, because it requires a melding of technology fluency with business insight, I'm looked at as the person who brings that to the table. I think there's a very simple litmus test, and I think you can actually track it if you're in any meeting. But, at Lenovo, if you look at executive committee and other senior leadership team meetings, when topics like these come up and people ask questions such as, why are our business capabilities not competitive; why aren't we moving faster? Then you watch where the heads swivel to. They tend to swivel to me. [Laughter] And so, that's a very easy litmus test that I have, which is, the business teams are really looking for someone who can bring the combination of technology and insight and meld it with the business problems to find something that we can talk about together, that we can unlock new possibilities.

Michael Krigsman: Now, presumably those chairs, those heads swivel towards you because technology is intertwined through every part of any organization's, any business's, operations today.

Arthur Hu: Yeah, absolutely. I think, from a trend line perspective, that's become more and more true, if I think about some of the discussions. I have now been the CIO at Lenovo for a little more than a year and a half, so fairly new in my tenure. I think, even compared with three or four years ago, the tenor of the discussions is very different.

I think the business, just in the last few years, has made significant strides, and I think there's also external pressures because so many others are facing similar trends that it's now front and center in a way it never was before. It used to be the sales guys that are doing something, or it's all about the product, or it's all about something else. Now, more and more, we see that the critical capabilities on whether it's go-to-market or running efficiently, it's all tied with technology. There are fewer and fewer domains where technology is not either, A) relevant, or B) critical path for helping achieve a business outcome.

Michael Krigsman: The key then is you embody both the technology background, but equally business sophistication. Is that a fair way to describe it, to put it?

Arthur Hu: Yes. I think that's one of the keys. If you bring just the technology background and you start talking about it in those terms rather than framing it in terms of business outcomes or business hypotheses that we're trying to test, it just goes over their head and it doesn't stick, right? You become less relevant to the discussion.

Michael Krigsman: Your background includes business roles. For example, before you became a CIO, you were a consultant at McKinsey.

Arthur Hu: Yes, that's correct. I think having that breadth and being able to go deep in some areas, but also having a wide range of exposure to different situations and solving challenging problems, provides a good grounding on how you can integrate some of that business experience with the technology credibility and know-how.

Michael Krigsman: One of the issues that I see across many companies is that the heads don't swivel towards the CIO in the way that they do at Lenovo. And so, what are the differences or what are the characteristics of Lenovo that make this work?

Arthur Hu: I think a large part of it is, we have had a history where we've had to put a lot of focus on technology and transition and transformation. This goes back to kind of Lenovo being a global company with Chinese roots in 2004 when we announced. In 2005, when we closed the initial PC division acquisition from IBM, we immediately embarked on building a global platform. And so, right from the get-go, it became so clear that, in order to become a truly global company rather than one that was just China-focused and had some rest of world business, in order to become a truly global company what happened was technology out of the gate was very important. It was literally one of the board level items and seen as a critical path as part of making the integration work. It wasn't just the organizational integration, but also the technology and process integration.

I think that's carried through. I think it's carried through because we've also had the ups and the down. I think one thing that sometimes happens is it's easy for technology to be taken for granted or fade into the background. For right or for wrong, but one of the things of which I'm a beneficiary is that Lenovo has definitely had periods in its more distant past where technology was off track, shall we say, in a very high profile way and that, as a company, we figured it out.

When we say IT or the systems are off track, it's actually not really us. The real statement is the systems and the business teams aren't coming together in the right way. And so, I think, very early on we figured out if we don't have the business and the technology teams talking, working together very closely, it just doesn't work. That kind of a culture and awareness has, I think, for the better, stayed with us through today and it's something that helps the discussion for the leadership team to have that awareness of how critical it is, especially on digital transformation. It's not just the financial system or the ERP systems, but it's actually branching out. There's no place that the technology enablement isn't anymore.

Michael Krigsman: It sounds like there's a deep respect for the role of technology, not just on an operating level, operational excellence projects and so forth, but for the strategic contribution that technology can and needs to make to the business going beyond just efficiency.

Arthur Hu: Yes, absolutely. I think one of it is because we see what happens when we don't treat it with that respect and that level of attention. But also, from an external orientation perspective, even if that weren't true, the technology discussion and how it matches with the business moves to the forefront because we see our competitors. We see adjacent spaces and people taking actions. We see that if we don't have the right technology discussion and we don't have the right architecture to enable the business response, whether it's to attempt to something new or to roll out, it becomes an issue very quickly. That helps keep things at the forefront.

Michael Krigsman: You're looking then as well at the internal IT architecture and how that links to the broader strategic goals of the business.

Arthur Hu: Yes, and I think that's also a little bit newer, or it really forces a discussion around how to build that bridge between what historically you would say enterprise architecture and technology architecture. That sounds really far away from being market responsive and being agile in the business, but it's totally not anymore because we see that those things directly impact our ability. And so, if we frame it in those terms, you actually have the business, in a good way, caring about, "Hey, how is that architected? Is that loosely coupled? Why does the critical path run through that particular integration gateway? Doesn't that slow me down? If that slows me down here, shouldn't we think about refactoring?"

It's quite interesting what, maybe a few years ago, people would have imagined that's just architecture speak. I'm not sure how that's relevant. I actually have business leaders who are proactively coming to me and talking about things like a shared architecture and how we can actually make things as part of the API economy and things should be service oriented. Things which would be kind of an enterprise architect's dream from four or five years ago are actually things that, if you don't go talk to the business, they're coming to me to ask about how those things are relevant because they see that we can reuse more quickly. If we can respond more quickly, that translates directly into better time to market. That's something they care about, and that's how it becomes very relevant.

Michael Krigsman: I'm smiling at the idea of businesspeople talking with you in this way. How did you do that? [Laughter] I mean this is something that CIOs really struggle with. Usually the businesspeople, they hear IT jargon and they don't know what it means, and they completely turn off. How did you bridge that gap?

Arthur Hu: [Laughter] Now it's my turn to smile because I think this has also been an iterative journey for me. There have definitely been times where people would look at me. I'm like, "Okay, I have lost the plot. I clearly went a little bit too technical for the discussion."

By calibrating around and understanding what the business problems are, I've been able to kind of put on different hats. It's something that I'm on my teams constantly. If we're within an internal hardcore technology and architecture review, then it's totally okay to have your very technical hat on because that's what the situation requires.

But, when you walk into a business meeting where someone has a very different lens about what they care about, that hat goes off and the other one comes on. And so, I think, through just iteration, which is kind of a fancy way of saying trial and error, I've been able to figure out what is the level of engagement, and it varies by stakeholder. There's not a one answer fits all. Over time, you figure out what's the degree of technology speak that you can use and still match, but ultimately still linking to business outcomes. One stakeholder might care a lot about standardization of processes, and so you can talk about how a shared service architecture actually makes that easier to deploy and how they can actually run a global structure rather than run parallel geo-based or segment-based structures.

For the other example I mentioned, a shared service architecture might be most impactful for their rapid iteration on a new product line or a go-to-market model. That's what they might care about. That's from one aspect, which is, I've had to try a lot of different formulas and figure out, for the various stakeholders, what's worked.

The other one, I really think you can't underestimate because it's not just to me or any one person. I think the surrounding environment for most business leaders, they feel the pressure. I'll give you a very interesting example. I pulled up a steering committee review document the other day. I thought it was great. It talked about how we were going to go agile, how we were going to co-locate teams, how we didn't use a waterfall way for certain situations. They wanted a toolchain that continues - all this stuff.

I'm like, this is really a great deck. I wonder who put it together. I thought it would be one of my guys, and it totally wasn't. It was a business team's deck about how they wanted to work with the IT team in an agile model and co-locate and get a scrum master and have a burndown chart and groom the backlog.

I think, in general, because the environment is such, especially for people who are trying to respond more quickly, I'm telling you if you don't come talk to them about it, they're going to find you or, even worse, maybe they don't find you. They just go find someone else to go have that conversation with. You definitely don't want that.

Michael Krigsman: The issue then, it seems, as you're describing, is the business people now understand that speed of execution for their projects, for their goals relies on technology and, therefore, they should have a better understanding and a closer working relationship with the people who are supplying that technology.

Arthur Hu: Yes. Absolutely. I think sometimes you have to get past the initialization or the bootstrapping problem, which is, in many cases that closer working relationship is actually beneficial to both parties to go do. But, there is definitely a forming and storming.

Here, I have a very anecdote as well, but it's among one of my favorites. In one of these services businesses they wanted work delivered in a way that was consistent where agile could help, a lot of uncertainty, wanted to change things a lot at a high pace, and had a broad direction for exactly what the path to go there was. It sounded like a really good fit for agile, so we tried it with them, and we thought it would be a match made in heaven.

They hated it. It was awful. I got escalations every couple of days or every week for about three or four months where they said, "I can't believe you're making me sit with the IT team. Why do I have to look at the prioritization daily? This is not my job? I'm doing your job. You're wasting my time."

I thought we were going to have to pull the plug and just go back. Then something interesting happened. That stopped. Then, by month five, the complaints gradually ramped down, and I think the team got into a good working rhythm. Then, once they got into a steady state, the transformation was complete. This was a good case because the business leader now says, "I can't imagine working any other way. In fact, I refuse to go back to any other way of working."

It's not always smooth, and not all business teams turn out like that. But, in that particular case, we found the right fit. Through a lot of the forming, it was just, in the end, the delivery spoke for itself.

Michael Krigsman: There's a certain amount of training, coaching that needs to take place to get the business up to speed on these rather technical IT concepts.

Arthur Hu: Absolutely. It's not just the business teams. When you said a certain amount, I would say actually very high. As with anything on change management, I think there's a lot of energy that goes into making the case, the theory of the case on why you would pursue a change.

It's funny. Even though my team also has business transformation responsibilities, when it comes down to making change happen, we're all human. My team all suffer from NIMBY-ism - not in my backyard; change is good for that guy over there, but not so much for me.

When I say it's not just with the business, even on my own teams we have to put a tremendous amount of effort on equipping people not only with the right tools, but also with the right mindset and the right expectations of what the journey will look like and what that ultimately, if done right, leads to better outcomes, leads to upskilling of the team as well. This one was important here because, within our team, as we started our own transformation, we have something that I've branded as transformation 2.0. It's an umbrella to catch all these things and to give the team a visual identity and something to rally around.

But, what we found is that people just took things like agile, and they used a sticker on themselves. They used it like a sticker, so suddenly said, "Art wants everyone to be agile." Low and behold, the next day, the reports started coming in. We were 95% agile overnight, which is of course totally false and bogus. Nothing happens that quickly.

But, what had happened was people said, "Oh, right. I'm agile. See, I have a backlog." Or, "I'm agile. I have a scrum master." Or, "I'm calling myself a product leader. I'm agile now."

It's on both sides. The story on the business was, we had to spend a lot of time with the business on how it works. But, the same is true for us. There's no automatic assumption that, "Oh, right. In Lenovo, we're known as BTIT - business transformation and IT."

Within Lenovo, there's no good reason to assume the BTIT guys just automatically know how to make the transition. There's an equal amount of handholding and care that needs to go in, in bringing the team along this as well.

Michael Krigsman: It sounds like you helped guide your IT organization from being what I sometimes call a traditional IT or traditional CIO versus digital IT or digital CIO. It sounds like there was a lot of training and talent management on the IT side as well, as you were describing.

Arthur Hu: Yes. I would say, not to quibble on words, but I think of it as more of an expansion because transitioning feels to me like you're leaving that behind. I've tried to establish something that's inclusive for my team. I think that's important because, just going back to where we started, even if you're a digital CIO and you would want to apply that label to yourself, you don't get relief from running the business. No one is going to be like, "You're a great digital CIO but, man, my private cloud crashed, and it's been down for longer than you committed in your SLA."

In my view, for the team, it was very important coming from a history of having worked in that model for a long time and very successfully. There's nothing wrong with it, per se. And so, the framing that I took with my team was, "That's great. Let's not lose the discipline around execution and operations that get us here, but we need to widen our horizons. We can't just do that."

I think Marshall Goldsmith has a book What Got You Here Won't Get You There, and so it's very simply saying, "Let's keep all the elements of what made us good at some of the traditional things, and there's another world out there that we get to go explore as well. How do we introduce and welcome elements of that and start putting that in?"

I will be the first to say, though, it's a work in progress. I think any CIO that says, "We're perfect," or I think there are very, very few CIOs that would be able to say that, "Yes, we're at the nirvana where all those things are true." And so, I've also had to recognize different teams move at different paces, and there are endpoints based on their area of the business and the capabilities and the domains they support are different.

In fact, that makes sense. But, on first blush, you don't necessarily understand. I didn't understand that. My finance team, maybe they don't need to be agile all the time. The general ledger, things around accounting, we don't need to iterate constantly on those, and so it's actually okay. They retain a mix of agile plus traditional waterfall delivery methodology. And so, I found that to be interesting as well.

Michael Krigsman: It sounds like, as you described it, you maintain the discipline and the rigor of keeping these systems running and running the way they need to and then layer on top of that what? What are you layering on top of that? How do you describe it?

Arthur Hu: That's a very good question. I think what we're layering on top is, how do we look at as what I think of as a cornucopia of new technologies beyond the traditional packaged software that Lenovo had been very heavily relying upon? How do we expand or open our eyes, lift our heads, and then look at this vast array of new and emerging technologies to see what possibilities that unlocks?

Just to go back for a second, I think that's particularly important on why I said expand rather than transition from because one of the first things I made a big point to my team when I first became CIO is that I said, "Everybody needs to be a first-class citizen in this organization." I explicitly didn't want people thinking, "I'm the traditional guy. I'm just in the back office. I'm reorganizing database tables, and I'm configuring parameters, and I guess I'll just do that for the rest of my life."

And so, what was very important as part of the inclusive is if you think, no matter where you are, digital transformation and these new technologies don't apply to you, then stop there. Go back and rethink because you're approaching it wrong. That took a lot of people by surprise because I think a lot of people expected me to say, "Yep. All right, the old guys, just do the old stuff, and then we'll have the new, exciting guys do the exciting things."

It was extremely important to avoid that because I think that creates kind of a two-class system. You don't want people who are thinking, "I'm just not going to grow and I'm just going to do the same old thing until I retire," versus, "Oh, this is the new, exciting stuff." The reality is, as we went through, in many cases I would have to show the teams or we would brainstorm together on figuring out why even, for example, if you're in what I have as the command center, but it's our level one, kind of level 1.5, helpdesk on resolving tickets.

They were like, "Well, what can we do? We just resolve tickets all day?" Yes, if you think about it that way, that could be true. But, if you take a more expansive view, then all these exciting things start happening.

Well, we have lots of tickets, so we have a lot of people interacting. What can we discern about system stability? Can we start correlating with more proactive maintenance? Hey, let's go get some AI and natural language processing to have a bot as well, so we can explore some AI technology and provide better overall blended cost to serve as well as quality.

Once you start opening people's eyes to that, then people's eyes light up. They say, "Oh, cool. I'm not just the helpdesk. I can pull in natural language processing. I can pull in chatbot. I can pull in AI. I can pull in all sorts of advanced machine learning because I have a lot of data. I can be more proactive. I can help the infrastructure team."

All these things started coming out, and that's true at every level. Software-defined infrastructure for my infrastructure team, it's not just about reorganizing database tables. It's about the software-defined data center of the future. How are we going to use the software to define WAN? How can we actually go to self-service and provisioning, not just on IAS, but building a mix on our architecture of private and public cloud for a hybrid?

And so, it's not just, oh, the business is where all the innovation happens. But, intelligent operations and taking new technology and landing them in every part of the organization, I think, has been something that I've enjoyed because that's where the fun is. This is what I think the art of possibility thinking is. What we're trying to layer on top is really what new possibilities does technology unlock, especially given the very rapid and astonishing progress that's been made in the last four or five years?

Michael Krigsman: We all know the term "two-speed IT" but, from this perspective, two-speed IT then is kind of a copout for settling for something that doesn't create as much opportunity as the possibilities that you were just describing.

Arthur Hu: I try not to get caught up on terminology. In my context at Lenovo, I knew that calling it two-speed -- and we had actually experimented with bimodal IT and two-speed IT. People were like, "What am I? I'm always stuck in the low here?"

For us, it wasn't. Other companies I know call it bimodal IT, and it works fine, or two-speed IT, and that's fine. For our cultural context, the message for people was, "I can either be like the low speed or the high speed," and so, for us, it was inclusive. It was kind of a multi-speed. Find the right speed. By the way, you can also have the flexibility in your choice of technology and deployment to find the right speed for the business at that given point, so you're not locked in.

Michael Krigsman: Now, you have teams in both China and in the U.S. Were there cultural differences that you found in the different countries relating to these things?

Arthur Hu: Yes, absolutely. I think Lenovo's path to globalization is a little bit different than many other MNCs, which are much more from North America or Western Europe based to the rest of the world. Lenovo, as I mentioned, is now a fully global company, including if you look at our executive committee composition. But, we started from China and then grew outwards. I think that's also been an interesting journey.

I think one of the most important things about culture, and we spent a lot of time over the past ten years building, is what we call the Lenovo Way. That's a set of norms that help guide the interactions so that we can truly be inclusive and get the benefit of the diversity of thinking in a constructive way and putting those thoughts together.

One of the things, just as an example, that I think is very important is not going to extremes, understanding where the other party is coming from. At least culturally at Lenovo, traditionally, the teams that have come from China have tended more towards the hierarchical side. Let's see what the boss says. Let's have very clear accountability. Whereas, teams that have come from more of the North America or Western European background have been more around just collaboration and a little bit less on the rigidity of the hierarchy.

These are just styles. There's no right or wrong. But, I find myself, for teams, that you have to make sure you understand what the natural style of the other team is and to figure out how to work together in spite of it. I see teams where they lapse.

I think here is getting comfortable with shades of gray. Someone who is more comfortable as a style--and I've also had these discussions in different parts of my career at Lenovo--devolve into, "Wait a second. Am I in charge, or are you in charge?" If I'm in charge, then please do exactly as I say. If you're in charge, I'll be quiet, and I'll do exactly as you say.

If you take it to that extreme, it's like a zero or a one, and that's not right because a lot of the things happen in the middle where we can find some common ground, where everyone is contributing. I find myself having to remind the teams from a style. How do we understand and respect that, so we don't fall into these extremes of, "Oh, right; you do, and I'll do it"? And so, I think that's been an important aspect on the culture side.

The second thing, I don't know if it's as much about culture, or maybe the culture here is between business focused teams and more technology-oriented teams. I don't know if this sounds funny to you, but I think the translation aspect consumes an inordinate amount of time. But, I think it also is extremely valuable as a result.

I see this all the time, even in our executive committee meetings. I can tell if someone asks a question and someone else is not answering in the way that is expected. And so, we kind of go down all these sideroads whereas, if we can just say, "Well, actually, I think what you're looking for is this." This notion of translating and being able to find the right answer using a mix of business and technology terms for what was asked is actually a huge, huge deal. I'm seen teams that have gone off track for months because of something, at the very start, they thought someone said something that meant A, and that's not what was meant. I think it's more of a technology and business orientation bridge as well, but it's a different form of bridging a cultural divide.

Michael Krigsman: It sounds like communication is a very big part. Clear communication is a very big focus and a very big part of what you do.

Arthur Hu: Yes. I think that's one of the things I also underestimated coming in. As we build up engineering culture, it's something that we have to account for.

If we start at the leadership team level, even though I knew we wanted to communicate, communicate, communicate, I think one thing I underestimated is it still takes time for concepts to soak in, especially new ones. You have to A) be consistent in your core message over time, but B) explore different ways of saying it because, again, different messaging works for different people.

The second bias that I've had to fight, even for myself, is that it's not technical work. I'm an engineer by training. I'm a computer science major. There's this kind of overhang in my mind that I have to actively fight that says, "If you're not doing something that's more technical, that's not as high value-add." Nothing could be further from the truth, especially when you're thinking about enterprise technology.

My teams also have that where they think, oh, I should be writing code, doing an automated test, or scripting something all the time. If you forget the change management aspect, if you forget to communicate about what you're doing, then you fall into the vast majority of projects or initiatives that fail to deliver value because no one knew what you were doing.

Here, the litmus test that I'm imposing is because, when I came on as CIO, I kind of went on a listening tour. I found that a lot of our business group presidents, they couldn't really name even one thing that we were doing that mattered to them. [Laughter] Then, you see the importance of communication. You can be busy all year but, if our board, if our CEO and executive committee couldn't name the top three things we've done for them, then we failed. We're not putting our effort against the things that are most important.

And so, it is so incumbent upon the CIO and the team to help the business teams understand what we're doing, and course correct because maybe you do find out and, we did, actually, find out we were doing too many projects. We had a long tail of projects that, quite frankly, just were consuming effort without making a big difference to the company. And so, we took portfolio management actions as a result.

The metric really is, "Did we strategically move the needle?" not, "How did I resource projects number 125 through 249 on my list?"

Michael Krigsman: Art, you're describing almost a kind of textbook on digital transformation, and so I'm wondering. Did you codify this? Now it sounds like you've really got all the pieces down, but how did you come to this point? Did you think it through strategically? Did it sort of evolve? Did it do both?

Arthur Hu: Yeah, I think, with all things, there's probably no one answer. But, I do think, externally, there are a lot of companies that are thinking about this, and there's certainly no shortage of external firms, newsletters, third party advisors who are willing to give input on this. I think that's been a useful source for me.

I think the other part is just practice. Again, I can't overemphasize it's definitely a journey and we're nowhere near done, and so it wouldn't make sense for me to say we're there. I think the key is figuring out what was relevant to us externally and, even from a methodology perspective, it's been very much let's be very open. Let's figure out all the ideas that could be relevant and have them in some kind of a framework that makes sense for us internally. Let's just start trying things. As a result, I think we've gotten more and more focused on the things that actually make a difference for our employee experience to get my team excited about the transformation, as well for the business.

Now, with that I think comes the tradeoff, which is, as we've explored, there have been definitely things where we're like, "That was the wrong thing to go do." One of the things, for example, is I thought it would be great if we could energize our frontline employees and managers by starting what I called Transformation Networks.

I'd like, well, of course, why wouldn't we do this? Let's get likeminded people who are excited about transformation to talk about what they were doing, what's working or not, and give the CIO and the leadership team feedback about what or wasn't working. That particular incarnation, we ran it for, actually, about a half a year, and then it just started to lose steam. As we dug into it, it was because the way we had done it, people perceived it as just another set of meetings. We weren't doing a good enough job of taking the outputs and connecting that into real changes, simplifying the methodology, so people had fewer hurdles to get to, to approve simpler projects. Simplifying the timesheet management system, so it was one less thing for our teams to worry about.

Definitely, as part of the codification, it's not just what's worked. I have a whole list of things that haven't worked as well, but I think there's nothing wrong with that. That's also very much in the spirit of agile, which is, you try things. If it doesn't work, but as long as you're continuously learning, and you never cut the feedback look, then you can adjust. I think that's also natural. That's part of the evolution.

Michael Krigsman: What advice do you have for CIOs who are listening to this, they're traditional CIOs in a traditional environment, and they want to embrace the things that you're describing but they're maybe not sure? They feel obstacles, impediments. What advice do you have for making that transition from being a traditional CIO to a digital CIO?

Arthur Hu: I think the first thing I would start with is actually listen. What I mean by that is, it's taking a page out of design thinking. But, design thinking, if you boil it down further, it's really about empathy. I think we're very good in technology at packaging fundamentally simple things into things that sound a lot sexier, but design thinking is really about empathy and empathy starts with listening.

One of the things I found most helpful at the start of my journey was, like I said, I did a listening tour. I went around to all the executive committee. I went around to all the geo presidents. I went around to all the senior stakeholders and just sat down.

Now, I was bursting with ideas, so I could have easily just said, "I've got these 25 ideas, and 1, 2, 3, 4, 5," and kind of just swamped them. But instead, I just asked them, "What do you see BTIT or the CIO organization as doing? Where have we done well or not, and how can we partner?"

On the listening aspect, that was the first step in building trust because I think the business said, "Huh. He's willing to listen." From that, that is a willingness. Listen means that people are willing to have a dialog with you. Then once you start having a dialog, that's where you can start to bring all these ideas you have and put them in place, not from your perspective in order of operations, but relevant for the business.

A big part of it is just getting started down the journey. If you can create that space and you can create the willingness to engage in the dialog, that's your foot in the door. After that, the second step is, once you have the dialog, then it's time to actually show you can deliver something. If you just talk all the time then, after a while, people wonder after two, three, four quarters, "Where is the delivery?" That doesn't work very well for a sustainable trust-based relationship.

After that, it really is then let's take the resources and make sure they align against what are the most strategically important and make sure those actually deliver. One of the things I've been very happy to see, in my case, as I mentioned earlier, when I first came on, a lot of our senior execs couldn't even list one thing they were happy or that we had significantly done for them. I kind of went through at our kickoffs this year with a notebook. If I listened to our CEO and our business group president, each one of them had at least one major thing as part of their highlights for the year that was a direct result of something we had done, calling us out by name.

As you start to deliver, not only do you feel better; the business feels better. They say, "Oh, we're doing things together." I think that's also been an important aspect.

Michael Krigsman: The listening then is the foundational step, going to talk to these folks and hearing what's going on with them and what they want.

Arthur Hu: Absolutely because I think they were used to a team that hadn't listened, that kind of went their own way and said, "Here's the roadmap. Here's your technology. Now off you go. And so, I think it's changing the relationship to be much more partnership oriented.

As I said, I think, with technology pervading so much more of not only our consumer lives but also our lives at work, I think the traditional mindset of, "Oh, the business guys, they don't know what they're doing. Let's keep them at arm's length around the technology," we've kind of flipped that and invited them in because it was a way of making them more committed as stakeholders and, quite frankly, partners in making things successful with us.

Michael Krigsman: As we finish up, because we're just about out of time, what advice do you have to CIOs who want to follow the path you've just described? They go to the business folks. They want to bring them in, but the resistance is just too high. They can't do it. What advice do you have for breaking down those barriers?

Arthur Hu: I think this one you definitely have to go in with thick skin. I think the second part is to recognize that it's not monolithic. When we say, "The business," if you're saying, "I can't get the business," then I would ask the next level question. "Who exactly?" because the business you're going to have, if you're like me, you'll have dozens of stakeholders. In the spirit of starting small and getting your foot in the door that way, I can't believe that. For any global company or any large company, there's always going to be a couple of people who are willing to try, and that's where you start. You find the people who are willing because that's, again, the way it works. If you're willing, then it's much easier to achieve impact.

I wouldn't accept a statement of, "I can' get the business along." I would say, "How do you?" I think the question that we would redirect and kind of transform that question would be, "Who are the one or two people that you could see yourself partnering with closely?" even if it's doing something small to show a quick win.

What I found is, once you start showing quick wins, the crowding effect definitely comes in. You get one or two business leaders who said, "I worked with the CIO and we did things I never thought were possible," and that actually happened to us. There was an old business leader, previously, who said, "Oh, you guys are the team of quarters if not years of delivery roadmaps. You guys want $100,000 to talk to me, and you want $10 million for every project."

Six months later, he's like, "I can't believe it. We're doing things and releasing every couple of weeks. We're working together closely." This was a respected business leader. Then people were like, "Huh. If he says that, then maybe I should go have some more discussions with the CIO team to see what they can do for me."

I would not approach it as an all or nothing. At any large organization, there will definitely be people who are willing to embrace. Along the willingness, I think you'll find people who are excited. Then you get the flywheel effect going when you get more people excited and talking about it. I think that mentality of, well, if all those people are doing it, then I should be thinking about it as well.

Michael Krigsman: Wow! That was a very, very practical and seemingly simple, but not so simple if you dig down below the surface, and very wise advice. Arthur Hu, thank you so much for spending this 45 minutes with us.

Arthur Hu: Michael, it's been a pleasure. Thank you so much for having me.

Michael Krigsman: We have been speaking with Art Hu, who is the global CIO of Lenovo, a $42 billion company, one of the largest companies in the world. He has just given us a college-level course on digital transformation. Art, thanks again, and I hope you'll come back another time.

Arthur Hu: Thank you again, Michael.

Michael Krigsman: Everybody, I want you, again, right now, to tell your friends and subscribe on YouTube. Check our website out. We have amazing shows that are coming up. Thank you so much. I hope you have a great day. Bye-bye.