How should Chief Information Officers and other technology leaders think about investment for 2021 and beyond? We speak with Paul Daugherty, Accenture's Group Chief Executive for Technology, to learn more.

Paul Daugherty is Accenture's Group Chief Executive – Technology & Chief Technology Officer. He leads all aspects of Accenture's technology business. Paul is also responsible for Accenture's technology strategy, driving innovation through R&D in Accenture Labs and leveraging emerging technologies to bring the newest innovations to clients globally. He recently launched Accenture's Cloud First initiative to further scale the company's market-leading cloud business and is responsible for incubating new businesses such as blockchain, extended reality and quantum computing. He founded and oversees Accenture Ventures, which is focused on strategic equity investments and open innovation to accelerate growth. Paul is responsible for managing Accenture's alliances, partnerships and senior-level relationships with leading and emerging technology companies, and he leads Accenture's Global CIO Council and annual CIO and Innovation Forum. He is a member of Accenture's Global Management Committee.

Paul is co-author of Human + Machine: Reimagining Work in the Age of AI, a management playbook for the business of Artificial Intelligence, published by Harvard Press. Paul joined Accenture in 1986 and became a partner in 1999. He earned his Bachelor of Science degree in computer engineering from the University of Michigan.

Transcript

Michael Krigsman: Technology planning and investment with Paul Daugherty, Accenture's Group Chief Executive of Technology and their Chief Technology Officer.

Paul Daugherty: Our Accenture technology business that I'm responsible for was $25 billion of the $45 billion or so of Accenture's revenue, so it's a big part of our Accenture business. In my role, I'm looking at the strategy and kind of what we do with the business, as well as being responsible for all the capability and innovation on how we drive the business for our clients every day.

When I think about that in the context, like how I think about our business, then how we help our clients think about what's happening with technology and how to plan for it that there are two truths that I keep talking about that I think help me make every decision. I would say there are two truths that I think we need to incorporate in decision-making as you think about technology.

The first one is the exponential pace of technology advancement is accelerating. We've been talking about that for years. COVID didn't slow it down, despite all the impacts of COVID. That's still a reality for clients, and it has massive implications.

The second truth is that every business is a technology business. I think this is a realization that many companies are coming to. I'll talk about this a little bit more later (depending on where we go in the conversation).

Back in 2013, we came out with a provocative statement that said every business is a digital business. A lot of people challenged us at the time and we had to defend it. People said, "No, that's not true. Our industry is not digital." It became widely accepted that every business in every industry was going digital.

We might have gotten a little bit wrong or just missed a point, which is, to be digital you need to master technology and be as good at technology as a digital native. That's the journey that every company is on right now. When you think about technology planning and what you're doing, I think you have to throw away some of the old mindsets.

There used to be this thing we had in technology. Everybody has seen the chart. We have technology in business and an arrow drawn from one to the other and back. You say, "Technology drives the business," or "Technology enables the business, and business drives technology."

You've just got to throw that aside because technology is the business. Technology is the foundation of the products and services of the digital world. I think that's what you need to integrate into your technology strategy and planning. Simply put, that the way we think about it.

Michael Krigsman: Paul, how is that different from traditional technology procurement?

Paul Daugherty: I think you need to think about technology in a few different categories. You need to think about what we've typically thought about in IT, which is, how do you support the business, which are the typical things you do to support the business. We need to equip people with technology and provide the technology workplace the PCs, the basic access to systems and such, but that's just the basics.

Then the question is, how do you use technology to improve the business? How do you run your supply chain more effectively? How do you transform your channel engagement with your consumers, your CRMs systems, processes, and the like? That's improving the business.

The other obligation, I think, of any technology executive is an active role in growing the business and looking at ways you can drive growth.

Think about companies like Marriott who launched their Home Suites platform, a new business to compete with companies like Airbnb (in the experience category) around homes. It's a technology-enabled business, along with other aspects of a digital business model.

Think of Unilever with Blueair and connected air purifiers and how that creates a different experience and different connection with their consumers.

Increasingly, technology (across every industry) is about growing the business as well.

Michael Krigsman: What are the implications of this for chief technology officers?

Paul Daugherty: You need to stretch the eye. We think of CIOs as chief information officers; what it typically means. The CIO needs to be about innovation. The "I" can be for innovation. The "I" needs to be about inspiration as well.

I think the CIO has to play a role around the inspiration and the evangelism of technology and the education of the rest of the organization. The education of technology, certainly, but the education of the rest of the organization.

We've got a program at Accenture we call TQ, which stands for Technology Quotient. It's for all of our people. It's not just for the technologists. All of our 500,000 people take TQ and have TQ goals to learn about different topics that are important.

I think that's the kind of role the CIO needs to play so that, again, it's not just supporting the business and improving the business. It's growing the business, inspiring, and leading the organization through the appropriate use of technology.

I think that's a key change in the role. I think it's been changing, so some are certainly approaching it that way. There are so many great CIOs, CTOs, CDOs out there. I think that becomes an obligation for everybody that's in this type of role.

Michael Krigsman: In a way, you're talking about the natural conclusion, the natural extension of how the CIO role has been evolving for some number of years now. It's not a new thing, but it's now being more fully realized. Would that be an accurate way to put it?

Paul Daugherty: I think, for a lot of years, if you think about a rock concert analogy – I like to go to rock concerts. You can't do it right now, but in normal times – I think IT has been kind of the roadies. They've been following the band around, setting up the stage, making sure everything worked, and supporting the stars that are going to go out there on the stage.

I truly believe that the pivot we're in is the CIO and, really, technology being the stars of the stage. It's not about the role specifically, but technology is the star of the stage and what's going to differentiate companies going forward. We can get more into that. We have a lot of evidence around this. When you move from being the roadie to the star of the stage, you take on other obligations around how to put on that performance and lead the business in the right direction.

Michael Krigsman: Paul, this CIO role, what does it take for a CIO to fill those shoes that you're describing?

Paul Daugherty: The technology capability of a CIO is really important. We have our new Technology Vision out, and one of the technology trends that we talk about, we call it "stacked strategically." What we mean by that is the technology stack is strategic to what the company is doing and the way that the company operates.

It used to be that, hey, however you got it done was fine as long as you generated the business outcome (to a certain extent). Not for everybody, but that was the way that, in a lot of cases, IT was thought about.

Now, how you build it matters. That's why we're having discussions with CIOs but also with CIOs and their CEOs, their C-suites, and their boards about technology because it matters. How they compete matters. Who they partner with, how they develop the technology, what streaming service do they use, what kind of cloud data services they use could impact how they can compete in their industry.

The technology really matters. Obviously, you need to know the business. That hasn't changed. That's always been a key trait of the CIO.

I think you need to be a learner and a teacher. This education aspect becomes important because the technology continues to evolve. I think the role of the CIO or the senior technology leader in any organization needs to be to teach others; to be able to learn fast and to teach others.

Then the other element of it is being a change agent. The title of the vision that I just mentioned, the title of our Accenture Technology Vision this year is called Leaders Wanted: Masters of change at a moment of truth. I can talk about why we believe it's a moment of truth, if you're interested.

I think it is a really important moment for all of us that are in leadership positions in technology and masters of change is really a key skill that leaders need because it's not about creating a static technology platform. It's about building a platform for change of technology and to allow the business to change more rapidly. That's harder to do and different than some of the ways we've approached things in the past.

Michael Krigsman: We have a comment on exactly this point from Twitter. Khwaja Shaik makes the point that it's all about the people, aligning people towards a common purpose, developing the skills and the talent, which seems very much in accord with what you were just describing.

Paul Daugherty: Talent is really pivotal and critical. I think it's the right kind of talent, too. If you think about this moment of truth and building the future, you need the right talent and you need an inclusive and diverse set of talent, which is something we talk about in our vision. We've been talking about it for a while and it's something I've been involved with at Accenture and across the industry on is looking at how we build inclusive and diverse opportunities around technology.

The reason that's important is we're rewriting the future with technology. It's not just about applying technology and doing things to automate business and such. We're enabling the experiences of the future across every business and across every sector of the economy.

We're only going to get that right if we have the right talent (to the question) and the right workforce involved in doing that. That's why we're so committed to things like our 50/50 gender diversity pledge. We've been one of the first (if not the first) to come out in our industry with specific targets for underrepresented minorities in terms of hiring and advancement, in addition to women.

We think it's not just good for people, which it is. It's not just good for communities, which it is. To make sure we're creating opportunity for all is just the right way that we need to operate to create the right future for all of us.

Michael Krigsman: Certainly, in the many years that I've known you, this theme of diversity and creating diverse teams, and creating opportunity has been a constant for you. Paul, a lot of what you're talking about is digital leadership. What are the characteristics of a digital leader today?

Paul Daugherty: I think the roles of a digital leader and technology leader are converging. A lot of organizations are converging their digital and technology organizations for the reasons that I said earlier that digital leadership requires technology.

It's not just technology. There's the business model. There's the business and all sorts of things you need to drive the experience, et cetera, with digital.

A lot of that is converging as we go. Not saying it will in every organization, but that's a trend we see.

The other point that's important to realize is most organizations are not very far along on their journey to be digital. This is getting embraced throughout the business.

We took an interesting step. Some may be aware of this. We had an organization called Accenture Digital. We had that for a number of years. We created it back when we said every business is a digital business. We created Accenture Digital to build our digital business.

About a year ago, we actually said Accenture Digital isn't needed anymore not because digital is not important because digital is more important than ever and we're just getting started. But it's because it became embedded in every part of our organization, so having a separate organization wasn't the right approach anymore. I think that's an important thing to think about for a lot of organizations.

We did a survey and a whole research study that studied (I think it was) 6,000 organizations around the world. We talked to many people, many executives at these organizations. We released this research just before COVID, last January, 15 months ago, in Davos.

The research highlighted a digital achievement gap. What the research showed is that the top 10% of digital leaders were outperforming the rest by 2X. The top 10% outperforming by 2X.

Largely, it was because of talent (which we just talked about), the mastery of technology, governance in digital around the organization, and their ability to drive change. Those were the characteristics of the digital leaders.

You might then ask, so what happened with COVID? We're about a year after COVID. What happened?

Well, we just recut the research and redid it. What it showed is the gap widened. The top 10% of digital leaders widened the gap from a 2X performance gap to a 5X performance gap.

I think this is intuitive for a lot of us, all of us who have been living through this crazy time of COVID that those who had better digital foundations were able to adapt better. Think about Starbucks who did relatively well compared to competitors. They enhanced their mobile app, pushed out millions of new downloads, enabled new remote ordering capability so consumers could still shop, used APIs and microservices to expose and develop new capabilities with partners like UberEATS to enable new in-home delivery experiences. That shows the point about the digital leaders widening the gap in what's important going forward.

To your point on digital leadership, it's those characteristics around the talent, the technology, the governance, the change. We'll talk about experience maybe a little bit, too, that are really important in this. Increasingly, the digital and technology really come together because you need the technology and the mastery of technology to create the leading digital experiences.

Michael Krigsman: We have a couple of questions from Twitter on some points relating to this. Let me couple them together. Chris Peterson asks, "How is the CIO role changing, focused on the business and focused inward on the technology versus focusing outward on the customer?" Constance Woodson asks, "How does one become and what are the qualifications for being a CIO today?"

Paul Daugherty: The CIO can't be just focused on the technology alone and can't just be focused internally. I had a very interesting session with one of our large clients earlier this week with the CIO. This happened to be the CIO and the C-suite.

The whole theme of it was thinking about it from a customer perspective. How do they create the right experiences for their customers? Some of the learnings coming out of this session were about the importance of understanding the customer, the experiences that the customer needed, and then the data around that because the data is essential at driving those experiences.

I think the CIO absolutely needs to be outward focusing from that perspective and understanding that working with their peers in the business to do so. Then it'll tie back to some of the core competencies that IT has to deliver like the data, cloud, and key capability that they need to make that happen.

I think, to the second question, to develop these kinds of capabilities, what's really the most important trait (not just for a CIO but for any leader in this environment) is being a great learner and being a bit empathetic in terms of understanding others. You need to be a learner to learn the business, learn about the consumer angle in your company (or whatever it might be). Learn about new technologies and then be empathetic as well because if you're trying to create experiences, if you're trying to move an organization, create change, and these other things, some of those types of skills around being able to lead with empathy in this different way becomes a really important trait.

Michael Krigsman: "How does one become a CIO in today's world?" That's from Constance Woodson.

Paul Daugherty: I think there are a lot of different paths to get there. I know a lot of CIOs, talk to a lot of them, have many friends who are CIOs, and support and mentor some along the way as well.

Some come from a technology perspective and are extremely successful. If you're coming from a technology perspective, I think it's about how you round that out. How do you learn the business? How do you think about being a change agent and develop some of these other capabilities?

Then there are others who are extremely successful, leading CIOs, who don't have a strong technology background, who came in from the business and came into IT from a different perspective. For them, I think, in the era we're in, mastering technology is really important. I'm doing a lot of work with some CIOs kind of coaching and helping them on the mastery of technology.

I think the answer to the question on how do you become a CIO, it depends on where you're starting from and making sure you round out those skillsets to develop the full capabilities that are required to be successful.

Michael Krigsman: Paul, let's shift gears slightly. You mentioned the term customer experience earlier. Again, as I talk with CIOs, this seems to be a common refrain among the most innovative CIOs. Share with us your thoughts. I know your Tech Vision report spoke about human experience. Talk about customer experience for us, if you would.

Paul Daugherty: I've been obsessed with this idea of experience for over 30 years or more – 35 or 40 years now. I read a book a lot of years ago by a guy named Don Norman called The Design of Everyday Things and this is back when the PC was new.

It wasn't really talking about computer technology at the time. It was talking about how the design of things changed human behavior. That book deeply affected me, and I got into this idea of understanding the impact of things and technology on people. I've been studying this for a long time.

We're at a time now where it's essential and experience, I think, is what makes the difference. Think about it in the context just of the past year and what's happened. We're roughly a year after the big shocks of COVID and the terrible things that happened, not to mention all the other unbelievable events and some of the catastrophic events of the past year with systemic social injustice, racism, political chasms, all sorts of challenges we dealt with.

COVID, if you think about it as a specific thing, what it did is something that's never happened before in the history of human experience, human civilization. Billions of people changed their behavior instantaneously. Ice ages didn't do that. Plagues didn't do that. The flu in the early 20th Century (in the 1920s) didn't do that. Wars didn't do that in the same way.

Instantaneously, people had to adapt to a new reality, and the new reality was fundamentally different. In my experience, and I'm sure with many of you, I'm now using Teams, WebEx, Zoom, or Hangouts, whatever, to communicate with relatives. Kids are going to school in that way. Telehealth visits for primary care are up 350 times. Online grocery shopping from your home went from less than 40% of people in the U.S. to over 80% in a matter of weeks.

Dramatic changes in human experience that I don't think we've fully absorbed these yet. I think anybody who says they understand how this is going to change our human experience permanently can't possibly know the answer because we don't know the answer yet and kind of our own expectations of how this is going to change us.

Experience was important. But in the post-COVID era, it's essential. How is health going to be part of every experience going forward? I believe it will be, and we'll be thinking about that more profoundly. Things like that become really important.

Anyway, that's maybe a long lead-in to the question, Mike. We've been getting into this in a lot of different ways. I think experience just needs to be part of your strategy.

Experience is part of the architecture. We talk about stacked strategically. One of the layers you need to look at is your experience layer.

It's about your worker experience. It's about your consumer experience and how you create the right experiences there. We're doing some very interesting work with clients on that front.

We saw this change happening. Again, it's driven by technology. In 2013, again, when we created Accenture Digital, we also launched Accenture Interactive.

Our bet was technology. It was a simple bet. We could have been wrong. It turned out to be right.

We made a bet that technology was going to disrupt the advertising industry and that technology was going to turn it from advertising to experience and that experience was going to disrupt the whole notion of marketing. That was the bet of Accenture Interactive.

It turned out to be right. We now have the largest digital agency business in the world that's a technology-powered experience creation business. It's all about assembling these types of new experiences for customers.

Michael Krigsman: What I find quite fascinating is you're a technologist and yet, the conversation that we're having is talking about empathy. It's talking about leadership. It's talking about how you create experiences. How do you reconcile what historically were two very different sides, empathy, and leadership against hardcore technology?

Paul Daugherty: Just to be clear, I have my micro-drone here and my VR headset here, so I'm never far from gadgets and technology. I love technology. I have my AI-powered Einstein that I can program with Python (behind me), so I'm never too far from technology.

The reason I'm at Accenture – I joined Accenture 35 years ago. I thought I was going to be a research scientist at university and teach. That was what I thought the path was going to be.

What got me hooked and why I love what I do at Accenture is it's the opportunity to create the impact of technology, which is a lot more fun than just building technology. If you're talking about impact of technology, then you have to understand the human dimension of how it's going to be used.

Don Norman and Ed Tufty (if you follow any of his work, which is amazing) – experience and design, that's what's important if you want to apply technology effectively.

I think it's interesting. If you look at the founders of a lot of the top unicorns that have been public, the top successful companies, the Airbnb type companies, most of those weren't technologists. Reed Hoffman at LinkedIn wasn't a technologist.

It's these other skills that are important to understand how people will use technology. That's why I think it's a fascinating time [to] think about the future.

I was doing an exercise earlier. I was thinking about something. I starting counting up the number of chips and sensors that are within my site in my office here. I stopped at 30 different chips and sensors. That's not by trying to have a lot of things. It's just by what's here in all the devices and things in my office.

That's true across everybody all around the world. We're pushing out more and more devices. We have 5G technology, edge devices, sensors, et cetera all over the world, which can be used in one of two ways.

It can be used to overwhelm people, frustrate people, and used for the wrong way. Some of the debates we're having around technology now are because of decisions that certain companies make that are kind of working against human desires. We see that dynamic playing out.

The other perspective you can take is, how do use technology to create better experiences for people and create trust with them so that they trust the way you're using technology? Those businesses that understand that will get it right.

Think about Amazon and Walmart now who are doing in-home grocery delivery. They'll actually put groceries in your refrigerator or put packages inside your home. Think about the trust you need to engender to do that, how quickly it can break the trust, and how every single interaction you have needs to build the trust to be able to deliver those services. Those that can create the experiences that build more trust will get more data, more information to create increasing services that have the trust.

Those that abuse the trust and think about click-throughs and think about optimizing views, clicks, and those sorts of things will destroy trust longer-term. That's the dynamic that's playing out. That's a long way to come back to your question of why these other factors around leadership and technology interest me a lot more because we're going to be able to use technology a lot more effectively for the benefit of people and humanity if we understand a lot of these other issues around leadership, empathy, understanding, experience, et cetera.

Michael Krigsman: We have a very interesting question from Twitter. This is "a nerd question" for you. New technology investments that are being planned will affect the company's technology architecture going forward. What do CIOs and CTOs need to do now to be thinking about that, the implication for their architectures?

Paul Daugherty: Architecture matters in technology, how you architect the systems. I think we're in an era of the renaissance of the technology architects.

Good technology architects are hard to find. How you assemble the technology, how you create the microservices, how you build the APIs out around your technology is really essential. I think it's a great question.

I think that's critical for organizations. The way you're able to get your MVP (minimum viable product) out quickly to allow for extension and agility to build on it going forward is going to depend on architecting it properly.

I think that's one key point I'd make and I do encourage all the clients I talk to, all the companies I talk to, to really focus on finding and nurturing the best architects. It's a huge focus for us. We've got something called our Master Technology Architect Program, which is a rigorous, long-term development program to build those types of architectural skills and capabilities. That's one answer to it.

The other is, I'm hugely sympathetic to technology leaders in organizations because it's hard to create the new while you keep the business running today. The legacy is a real issue. The legacy debt issue is a real issue.

I think it's about getting creative. How do you start to do feature extraction from your legacy systems and do it in a way that allows you to use them more effectively in the context of your new architectures? How do you get creative around techniques like that?

How do you move to the cloud, which we haven't talked about a whole lot now? There's a massive, very compressed acceleration to cloud going on right now. How do you do that in an environment where you know you can't just pick up and move all your legacy overnight? Some things don't move to the cloud that well. Is there a business case to move it or not?

I think it's a combination of thinking about the right architecture and target state and then getting creative in exploring some techniques. We talk about digital decoupling and a variety of things to use to try to enhance the modularity and ability to move some of the legacy and extend the life of it as you build on the new platforms as well.

Michael Krigsman: The future of work, where do you see our work environment going? You mentioned earlier that healthcare is going to be woven into the fabric of everything we do. What's happening with work and what should we be thinking about regarding that?

Paul Daugherty: The reality is, I don't think anybody knows. I think if you say you know, if you say it's going to be 15% or whatever – make up a percentage – I don't think anybody knows that at this point.

We do know some things. We know, in our organization and through all the work we've done for our clients, everything we do can be done virtually. Everything we do can be done virtually and we've enhanced our ability to do it virtually over the past year.

There wasn't a single project we couldn't do because the technology wouldn't allow us to do it. Yes, there were some clients who couldn't afford to continue because of COVID, but there weren't things that we couldn't figure out how to do in the environment.

That tells us it can be done virtually, but the other thing I'd say is we're not going to do everything virtually. The future is not about all of us working from home. The future is one about giving people more choice and optimizing around bringing people together to enhance experience.

I have a colleague of mine who I love the way he said it. He said, "The criteria for getting people together physically shouldn't be on need. It should be based on fun." When you can enhance the experience, have fun, and enjoy the human relationship and build relationships, connectivity, trust, and such, that's when you should get together. I think that's an interesting view.

We're going to have a hybrid approach going forward. We're going to have a lot of people back in office spaces. The office spaces will look differently, which is something we're looking at already in terms of there'll be more around group work and how people work together.

To go to an office to work in a cubical, I'm not sure will make a whole lot of sense going forward. But I think we'll be back to a world with a lot of human contact, human interaction, and dialog because, for certain types of work, it is an advantage to being together physically and we need it to build cultures, to build trust, to build relationships, et cetera. That's the way I'd answer that question.

The only other thing I'd say is I think you need a real-time pulse. That's the way we're looking at it. We're talking to our employees, getting input from our employees, getting input from our clients, getting input from new recruits and people that are joining the company about what they want to do, how they want to work, and how they can work. That continual pulse from the people is what we'll use to decide on the optimal approaches going forward.

Michael Krigsman: Another topic is responsible AI. I know this is again a topic that's important to you. You wrote a book about this topic. Thoughts on responsible, ethical AI today.

Paul Daugherty: It's not a solved problem is what I'd say, I guess. AI, we haven't gotten too deeply into some of the technologies, but what I believe is that cloud and AI will be the two most transformative technologies of the next decade. They're not going away any time soon. In fact, we're at the early stages of both technologies. Both are innovating rapidly and moving on to different techniques. You have to follow them carefully.

In AI, specifically responsible AI, the issues we talk about I talked about a lot in the book I wrote, which is called Human + Machine. It's accountability, transparency, fairness, honesty, and the systems you build.

Accountability so that you know, at the end of the day, what human is accountable for key decisions. It's not okay just to say, "The car turned left because the machine told us so," or created an accident. A human is accountable for a design decision or an operating decision that made something happen. We need to understand accountability properly.

Fairness is critical because AI isn't biased. AI is a very neutral technology, like every technology. Technology is neutral, but AI can be trained on data sets that reflect bias and AI can be implemented in a biased way.

There is simply no excuse for it. We know enough about AI. We know enough about testing. We have something called an AI fairness toolkit to implement AI in ways that are fair, that are not biased, and that don't have some of the consequences of gender bias, racial bias, et cetera that have been problematic in the industry.

Transparency means there are certain things that need to be explained. You should explain them.

Honestly means you shouldn't use AI to cheat. Unfortunately, some companies have been caught using AI to cheat and violate laws or regulations. That's not appropriate either.

This sounds pretty basic, but that's the foundation. I think it's incumbent on the leaders in organizations that are applying to AI to have policies in place to ensure you're using it consistent with these things I just mentioned. If not, you're going to run into problems and you're going to be applying AI irresponsibly at some point and get caught up for it. I think it's in our control as leaders to get our arms around this and deal with it in the appropriate way.

Michael Krigsman: Issues around AI fairness and algorithmic transparency, do you see these as financial issues or cultural issues? What's the obstacle?

Paul Daugherty: Creating frameworks to ensure that you're applying it appropriately. The data sets you're training on, do they reflect all the qualities that you need to train the algorithms you're training? Do the testing, the way you're testing and the way you're evaluating for potential bias, there are again techniques we're using – this is possible to do – techniques that we can test for the bias that might be in the systems to understand the dimensions of bias that may be evident in a system?

Are you doing that before you roll out a system into the wild? Many organizations aren't. It's those types of things that I think are important.

I think, again, in the AI field, we're fortunate to have a lot of really talented diverse leaders in AI. I think, in our organizations – I get back to my diversity point – if you have a diverse team of people working on these problems, they're more likely to come out with the right answers and test and develop for the right things. That's part of it as well.

Michael Krigsman: There is business model resistance to transparency and fairness. I recently interviewed, on this show, two members of the House of Lords in the UK who are grappling with this from a policy perspective. What should business leaders do to reconcile the business model issues, the attractiveness of non-transparency with the social desire to have transparency?

Paul Daugherty: there are a couple of things. The first is, as an example in the U.S., we do not have appropriate data privacy legislation at the federal level and we need it. It's something we've advocated for. We've been active with the business roundtable and others in advocating for change.

That starts to help because if you have standardized, accepted rules around data privacy, that at least creates the foundation. We don't have that in the U.S. now, and I think that's a big gap. It's kind of crazy, in the digital world we live in, to not have that in place.

Then from a business perspective, sure, there are things that, for competitive advantage, you're going to want. You have trade secrets and things. Of course, you can't publicize every part of an algorithm and such that you have, but you have an obligation to make sure it operates effectively.

Just like if you build a car, you have an obligation to make sure it operates effectively. With an algorithm, unfortunately, it can have more dangerous connotations than a car or some other physical equipment, in some cases, because of these types of bias issues.

Again, I think what a business leader should do is make sure you have the principles established of what defines acceptable use for you and make sure you have policies in place in the organization that ensure you'll adhere to what you're setting. That's what I think leaders need to do.

I think too many organizations, I would say the majority of organizations, are flying blind. They have people out there applying the technology, developing the technology, applying AI, and putting it out there, and don't have a prescriptive and defined set of guardrails as they need to ensure the acceptable use of it.

Michael Krigsman: Developing a framework and then adhering to that framework, in essence.

Paul Daugherty: Yes. We've got one we use in Accenture. We do this for clients. We help them set these things up.

There are organizations like Partnership on AI that have been doing work in this area. There is a lot of work in this area. I think too few organizations are tapping into it in developing rigorous policies in their own organizations.

Michael Krigsman: Paul, as we finish up, there are a lot of CIOs and technology leaders who watch CXOTalk. How can CIOs ensure the highest degree of relevance for themselves inside their organization and for IT going forward?

Paul Daugherty: I'd just like to start the answer to it by giving a shoutout to all my CIOs, CDOs, CTO friends out there, and those who aren't friends that I don't know. I have huge respect for the technology leaders in every organization.

I think it's if not the hardest, one of the hardest jobs that there is out there when you talk about everything we talked about, the need to evangelize and set direction and strategy, from keeping the lights on, to balancing the financial needs, to looking at the talent and developing the talent across the organization. A big shoutout to the amazing work that everybody in this industry does.

I would say that the three things that I come back to, to focus on, I'd say you need to focus on the technology. I'd say the main thing there is learning about things. Really think about the trust and how you cultivate it. The way that you're using technology in the organization cultivates the degree of trust within your consumers, customers, business partners, as well as your employees in the way you're applying technology.

Then the talent and cultivating the right talent. I think it's not just in IT or technology, but cultivating the right talent is really essential.

We're in an era where we're re-platforming business right now. We've been applying technology in businesses for 70 years, since the transistor was invented (not too far away from where I'm sitting right now). But we're going through a major re-platforming now with cloud and AI and everything that's happening.

We're creating the new future. You might say we're creating tomorrow's legacy today, right now, but it's not legacy. It's the new modern stuff. And you need the new talent to do that. It's creating the talent and the talent of your current organization transitioned to new skills that are going to help with that, focusing on the talent, the reskilling, the rotating, as well as bringing in the new talent.

Michael Krigsman: Okay. Well, we are unfortunately out of time. It's been a great conversation. Thank you, Paul Daugherty, for spending time with us today.

Paul Daugherty: It's been great, Mike. Thanks. Time went by fast.

Michael Krigsman: It did. Everybody, we've been talking with Paul Daugherty. He is the chief technology officer and the group chief executive of technology at Accenture. It's a huge company with 500,000 employees. It's hard to even imagine that scale.

Thank you for watching, especially the folks who ask such great questions. Now, before you go, please, please subscribe to our newsletter and hit the subscribe button at the top of our website to do that. And subscribe to our YouTube channel.

Thanks so much, everybody. I hope you have a great day, and we'll see you again next time. Thanks so much.

Michael Krigsman: Technology planning and investment with Paul Daugherty, Accenture's Group Chief Executive of Technology and their Chief Technology Officer.

Paul Daugherty: Our Accenture technology business that I'm responsible for was $25 billion of the $45 billion or so of Accenture's revenue, so it's a big part of our Accenture business. In my role, I'm looking at the strategy and kind of what we do with the business, as well as being responsible for all the capability and innovation on how we drive the business for our clients every day.

When I think about that in the context, like how I think about our business, then how we help our clients think about what's happening with technology and how to plan for it that there are two truths that I keep talking about that I think help me make every decision. I would say there are two truths that I think we need to incorporate in decision-making as you think about technology.

The first one is the exponential pace of technology advancement is accelerating. We've been talking about that for years. COVID didn't slow it down, despite all the impacts of COVID. That's still a reality for clients, and it has massive implications.

The second truth is that every business is a technology business. I think this is a realization that many companies are coming to. I'll talk about this a little bit more later (depending on where we go in the conversation).

Back in 2013, we came out with a provocative statement that said every business is a digital business. A lot of people challenged us at the time and we had to defend it. People said, "No, that's not true. Our industry is not digital." It became widely accepted that every business in every industry was going digital.

We might have gotten a little bit wrong or just missed a point, which is, to be digital you need to master technology and be as good at technology as a digital native. That's the journey that every company is on right now. When you think about technology planning and what you're doing, I think you have to throw away some of the old mindsets.

There used to be this thing we had in technology. Everybody has seen the chart. We have technology in business and an arrow drawn from one to the other and back. You say, "Technology drives the business," or "Technology enables the business, and business drives technology."

You've just got to throw that aside because technology is the business. Technology is the foundation of the products and services of the digital world. I think that's what you need to integrate into your technology strategy and planning. Simply put, that the way we think about it.

Michael Krigsman: Paul, how is that different from traditional technology procurement?

Paul Daugherty: I think you need to think about technology in a few different categories. You need to think about what we've typically thought about in IT, which is, how do you support the business, which are the typical things you do to support the business. We need to equip people with technology and provide the technology workplace the PCs, the basic access to systems and such, but that's just the basics.

Then the question is, how do you use technology to improve the business? How do you run your supply chain more effectively? How do you transform your channel engagement with your consumers, your CRMs systems, processes, and the like? That's improving the business.

The other obligation, I think, of any technology executive is an active role in growing the business and looking at ways you can drive growth.

Think about companies like Marriott who launched their Home Suites platform, a new business to compete with companies like Airbnb (in the experience category) around homes. It's a technology-enabled business, along with other aspects of a digital business model.

Think of Unilever with Blueair and connected air purifiers and how that creates a different experience and different connection with their consumers.

Increasingly, technology (across every industry) is about growing the business as well.

Michael Krigsman: What are the implications of this for chief technology officers?

Paul Daugherty: You need to stretch the eye. We think of CIOs as chief information officers; what it typically means. The CIO needs to be about innovation. The "I" can be for innovation. The "I" needs to be about inspiration as well.

I think the CIO has to play a role around the inspiration and the evangelism of technology and the education of the rest of the organization. The education of technology, certainly, but the education of the rest of the organization.

We've got a program at Accenture we call TQ, which stands for Technology Quotient. It's for all of our people. It's not just for the technologists. All of our 500,000 people take TQ and have TQ goals to learn about different topics that are important.

I think that's the kind of role the CIO needs to play so that, again, it's not just supporting the business and improving the business. It's growing the business, inspiring, and leading the organization through the appropriate use of technology.

I think that's a key change in the role. I think it's been changing, so some are certainly approaching it that way. There are so many great CIOs, CTOs, CDOs out there. I think that becomes an obligation for everybody that's in this type of role.

Michael Krigsman: In a way, you're talking about the natural conclusion, the natural extension of how the CIO role has been evolving for some number of years now. It's not a new thing, but it's now being more fully realized. Would that be an accurate way to put it?

Paul Daugherty: I think, for a lot of years, if you think about a rock concert analogy – I like to go to rock concerts. You can't do it right now, but in normal times – I think IT has been kind of the roadies. They've been following the band around, setting up the stage, making sure everything worked, and supporting the stars that are going to go out there on the stage.

I truly believe that the pivot we're in is the CIO and, really, technology being the stars of the stage. It's not about the role specifically, but technology is the star of the stage and what's going to differentiate companies going forward. We can get more into that. We have a lot of evidence around this. When you move from being the roadie to the star of the stage, you take on other obligations around how to put on that performance and lead the business in the right direction.

Michael Krigsman: Paul, this CIO role, what does it take for a CIO to fill those shoes that you're describing?

Paul Daugherty: The technology capability of a CIO is really important. We have our new Technology Vision out, and one of the technology trends that we talk about, we call it "stacked strategically." What we mean by that is the technology stack is strategic to what the company is doing and the way that the company operates.

It used to be that, hey, however you got it done was fine as long as you generated the business outcome (to a certain extent). Not for everybody, but that was the way that, in a lot of cases, IT was thought about.

Now, how you build it matters. That's why we're having discussions with CIOs but also with CIOs and their CEOs, their C-suites, and their boards about technology because it matters. How they compete matters. Who they partner with, how they develop the technology, what streaming service do they use, what kind of cloud data services they use could impact how they can compete in their industry.

The technology really matters. Obviously, you need to know the business. That hasn't changed. That's always been a key trait of the CIO.

I think you need to be a learner and a teacher. This education aspect becomes important because the technology continues to evolve. I think the role of the CIO or the senior technology leader in any organization needs to be to teach others; to be able to learn fast and to teach others.

Then the other element of it is being a change agent. The title of the vision that I just mentioned, the title of our Accenture Technology Vision this year is called Leaders Wanted: Masters of change at a moment of truth. I can talk about why we believe it's a moment of truth, if you're interested.

I think it is a really important moment for all of us that are in leadership positions in technology and masters of change is really a key skill that leaders need because it's not about creating a static technology platform. It's about building a platform for change of technology and to allow the business to change more rapidly. That's harder to do and different than some of the ways we've approached things in the past.

Michael Krigsman: We have a comment on exactly this point from Twitter. Khwaja Shaik makes the point that it's all about the people, aligning people towards a common purpose, developing the skills and the talent, which seems very much in accord with what you were just describing.

Paul Daugherty: Talent is really pivotal and critical. I think it's the right kind of talent, too. If you think about this moment of truth and building the future, you need the right talent and you need an inclusive and diverse set of talent, which is something we talk about in our vision. We've been talking about it for a while and it's something I've been involved with at Accenture and across the industry on is looking at how we build inclusive and diverse opportunities around technology.

The reason that's important is we're rewriting the future with technology. It's not just about applying technology and doing things to automate business and such. We're enabling the experiences of the future across every business and across every sector of the economy.

We're only going to get that right if we have the right talent (to the question) and the right workforce involved in doing that. That's why we're so committed to things like our 50/50 gender diversity pledge. We've been one of the first (if not the first) to come out in our industry with specific targets for underrepresented minorities in terms of hiring and advancement, in addition to women.

We think it's not just good for people, which it is. It's not just good for communities, which it is. To make sure we're creating opportunity for all is just the right way that we need to operate to create the right future for all of us.

Michael Krigsman: Certainly, in the many years that I've known you, this theme of diversity and creating diverse teams, and creating opportunity has been a constant for you. Paul, a lot of what you're talking about is digital leadership. What are the characteristics of a digital leader today?

Paul Daugherty: I think the roles of a digital leader and technology leader are converging. A lot of organizations are converging their digital and technology organizations for the reasons that I said earlier that digital leadership requires technology.

It's not just technology. There's the business model. There's the business and all sorts of things you need to drive the experience, et cetera, with digital.

A lot of that is converging as we go. Not saying it will in every organization, but that's a trend we see.

The other point that's important to realize is most organizations are not very far along on their journey to be digital. This is getting embraced throughout the business.

We took an interesting step. Some may be aware of this. We had an organization called Accenture Digital. We had that for a number of years. We created it back when we said every business is a digital business. We created Accenture Digital to build our digital business.

About a year ago, we actually said Accenture Digital isn't needed anymore not because digital is not important because digital is more important than ever and we're just getting started. But it's because it became embedded in every part of our organization, so having a separate organization wasn't the right approach anymore. I think that's an important thing to think about for a lot of organizations.

We did a survey and a whole research study that studied (I think it was) 6,000 organizations around the world. We talked to many people, many executives at these organizations. We released this research just before COVID, last January, 15 months ago, in Davos.

The research highlighted a digital achievement gap. What the research showed is that the top 10% of digital leaders were outperforming the rest by 2X. The top 10% outperforming by 2X.

Largely, it was because of talent (which we just talked about), the mastery of technology, governance in digital around the organization, and their ability to drive change. Those were the characteristics of the digital leaders.

You might then ask, so what happened with COVID? We're about a year after COVID. What happened?

Well, we just recut the research and redid it. What it showed is the gap widened. The top 10% of digital leaders widened the gap from a 2X performance gap to a 5X performance gap.

I think this is intuitive for a lot of us, all of us who have been living through this crazy time of COVID that those who had better digital foundations were able to adapt better. Think about Starbucks who did relatively well compared to competitors. They enhanced their mobile app, pushed out millions of new downloads, enabled new remote ordering capability so consumers could still shop, used APIs and microservices to expose and develop new capabilities with partners like UberEATS to enable new in-home delivery experiences. That shows the point about the digital leaders widening the gap in what's important going forward.

To your point on digital leadership, it's those characteristics around the talent, the technology, the governance, the change. We'll talk about experience maybe a little bit, too, that are really important in this. Increasingly, the digital and technology really come together because you need the technology and the mastery of technology to create the leading digital experiences.

Michael Krigsman: We have a couple of questions from Twitter on some points relating to this. Let me couple them together. Chris Peterson asks, "How is the CIO role changing, focused on the business and focused inward on the technology versus focusing outward on the customer?" Constance Woodson asks, "How does one become and what are the qualifications for being a CIO today?"

Paul Daugherty: The CIO can't be just focused on the technology alone and can't just be focused internally. I had a very interesting session with one of our large clients earlier this week with the CIO. This happened to be the CIO and the C-suite.

The whole theme of it was thinking about it from a customer perspective. How do they create the right experiences for their customers? Some of the learnings coming out of this session were about the importance of understanding the customer, the experiences that the customer needed, and then the data around that because the data is essential at driving those experiences.

I think the CIO absolutely needs to be outward focusing from that perspective and understanding that working with their peers in the business to do so. Then it'll tie back to some of the core competencies that IT has to deliver like the data, cloud, and key capability that they need to make that happen.

I think, to the second question, to develop these kinds of capabilities, what's really the most important trait (not just for a CIO but for any leader in this environment) is being a great learner and being a bit empathetic in terms of understanding others. You need to be a learner to learn the business, learn about the consumer angle in your company (or whatever it might be). Learn about new technologies and then be empathetic as well because if you're trying to create experiences, if you're trying to move an organization, create change, and these other things, some of those types of skills around being able to lead with empathy in this different way becomes a really important trait.

Michael Krigsman: "How does one become a CIO in today's world?" That's from Constance Woodson.

Paul Daugherty: I think there are a lot of different paths to get there. I know a lot of CIOs, talk to a lot of them, have many friends who are CIOs, and support and mentor some along the way as well.

Some come from a technology perspective and are extremely successful. If you're coming from a technology perspective, I think it's about how you round that out. How do you learn the business? How do you think about being a change agent and develop some of these other capabilities?

Then there are others who are extremely successful, leading CIOs, who don't have a strong technology background, who came in from the business and came into IT from a different perspective. For them, I think, in the era we're in, mastering technology is really important. I'm doing a lot of work with some CIOs kind of coaching and helping them on the mastery of technology.

I think the answer to the question on how do you become a CIO, it depends on where you're starting from and making sure you round out those skillsets to develop the full capabilities that are required to be successful.

Michael Krigsman: Paul, let's shift gears slightly. You mentioned the term customer experience earlier. Again, as I talk with CIOs, this seems to be a common refrain among the most innovative CIOs. Share with us your thoughts. I know your Tech Vision report spoke about human experience. Talk about customer experience for us, if you would.

Paul Daugherty: I've been obsessed with this idea of experience for over 30 years or more – 35 or 40 years now. I read a book a lot of years ago by a guy named Don Norman called The Design of Everyday Things and this is back when the PC was new.

It wasn't really talking about computer technology at the time. It was talking about how the design of things changed human behavior. That book deeply affected me, and I got into this idea of understanding the impact of things and technology on people. I've been studying this for a long time.

We're at a time now where it's essential and experience, I think, is what makes the difference. Think about it in the context just of the past year and what's happened. We're roughly a year after the big shocks of COVID and the terrible things that happened, not to mention all the other unbelievable events and some of the catastrophic events of the past year with systemic social injustice, racism, political chasms, all sorts of challenges we dealt with.

COVID, if you think about it as a specific thing, what it did is something that's never happened before in the history of human experience, human civilization. Billions of people changed their behavior instantaneously. Ice ages didn't do that. Plagues didn't do that. The flu in the early 20th Century (in the 1920s) didn't do that. Wars didn't do that in the same way.

Instantaneously, people had to adapt to a new reality, and the new reality was fundamentally different. In my experience, and I'm sure with many of you, I'm now using Teams, WebEx, Zoom, or Hangouts, whatever, to communicate with relatives. Kids are going to school in that way. Telehealth visits for primary care are up 350 times. Online grocery shopping from your home went from less than 40% of people in the U.S. to over 80% in a matter of weeks.

Dramatic changes in human experience that I don't think we've fully absorbed these yet. I think anybody who says they understand how this is going to change our human experience permanently can't possibly know the answer because we don't know the answer yet and kind of our own expectations of how this is going to change us.

Experience was important. But in the post-COVID era, it's essential. How is health going to be part of every experience going forward? I believe it will be, and we'll be thinking about that more profoundly. Things like that become really important.

Anyway, that's maybe a long lead-in to the question, Mike. We've been getting into this in a lot of different ways. I think experience just needs to be part of your strategy.

Experience is part of the architecture. We talk about stacked strategically. One of the layers you need to look at is your experience layer.

It's about your worker experience. It's about your consumer experience and how you create the right experiences there. We're doing some very interesting work with clients on that front.

We saw this change happening. Again, it's driven by technology. In 2013, again, when we created Accenture Digital, we also launched Accenture Interactive.

Our bet was technology. It was a simple bet. We could have been wrong. It turned out to be right.

We made a bet that technology was going to disrupt the advertising industry and that technology was going to turn it from advertising to experience and that experience was going to disrupt the whole notion of marketing. That was the bet of Accenture Interactive.

It turned out to be right. We now have the largest digital agency business in the world that's a technology-powered experience creation business. It's all about assembling these types of new experiences for customers.

Michael Krigsman: What I find quite fascinating is you're a technologist and yet, the conversation that we're having is talking about empathy. It's talking about leadership. It's talking about how you create experiences. How do you reconcile what historically were two very different sides, empathy, and leadership against hardcore technology?

Paul Daugherty: Just to be clear, I have my micro-drone here and my VR headset here, so I'm never far from gadgets and technology. I love technology. I have my AI-powered Einstein that I can program with Python (behind me), so I'm never too far from technology.

The reason I'm at Accenture – I joined Accenture 35 years ago. I thought I was going to be a research scientist at university and teach. That was what I thought the path was going to be.

What got me hooked and why I love what I do at Accenture is it's the opportunity to create the impact of technology, which is a lot more fun than just building technology. If you're talking about impact of technology, then you have to understand the human dimension of how it's going to be used.

Don Norman and Ed Tufty (if you follow any of his work, which is amazing) – experience and design, that's what's important if you want to apply technology effectively.

I think it's interesting. If you look at the founders of a lot of the top unicorns that have been public, the top successful companies, the Airbnb type companies, most of those weren't technologists. Reed Hoffman at LinkedIn wasn't a technologist.

It's these other skills that are important to understand how people will use technology. That's why I think it's a fascinating time [to] think about the future.

I was doing an exercise earlier. I was thinking about something. I starting counting up the number of chips and sensors that are within my site in my office here. I stopped at 30 different chips and sensors. That's not by trying to have a lot of things. It's just by what's here in all the devices and things in my office.

That's true across everybody all around the world. We're pushing out more and more devices. We have 5G technology, edge devices, sensors, et cetera all over the world, which can be used in one of two ways.

It can be used to overwhelm people, frustrate people, and used for the wrong way. Some of the debates we're having around technology now are because of decisions that certain companies make that are kind of working against human desires. We see that dynamic playing out.

The other perspective you can take is, how do use technology to create better experiences for people and create trust with them so that they trust the way you're using technology? Those businesses that understand that will get it right.

Think about Amazon and Walmart now who are doing in-home grocery delivery. They'll actually put groceries in your refrigerator or put packages inside your home. Think about the trust you need to engender to do that, how quickly it can break the trust, and how every single interaction you have needs to build the trust to be able to deliver those services. Those that can create the experiences that build more trust will get more data, more information to create increasing services that have the trust.

Those that abuse the trust and think about click-throughs and think about optimizing views, clicks, and those sorts of things will destroy trust longer-term. That's the dynamic that's playing out. That's a long way to come back to your question of why these other factors around leadership and technology interest me a lot more because we're going to be able to use technology a lot more effectively for the benefit of people and humanity if we understand a lot of these other issues around leadership, empathy, understanding, experience, et cetera.

Michael Krigsman: We have a very interesting question from Twitter. This is "a nerd question" for you. New technology investments that are being planned will affect the company's technology architecture going forward. What do CIOs and CTOs need to do now to be thinking about that, the implication for their architectures?

Paul Daugherty: Architecture matters in technology, how you architect the systems. I think we're in an era of the renaissance of the technology architects.

Good technology architects are hard to find. How you assemble the technology, how you create the microservices, how you build the APIs out around your technology is really essential. I think it's a great question.

I think that's critical for organizations. The way you're able to get your MVP (minimum viable product) out quickly to allow for extension and agility to build on it going forward is going to depend on architecting it properly.

I think that's one key point I'd make and I do encourage all the clients I talk to, all the companies I talk to, to really focus on finding and nurturing the best architects. It's a huge focus for us. We've got something called our Master Technology Architect Program, which is a rigorous, long-term development program to build those types of architectural skills and capabilities. That's one answer to it.

The other is, I'm hugely sympathetic to technology leaders in organizations because it's hard to create the new while you keep the business running today. The legacy is a real issue. The legacy debt issue is a real issue.

I think it's about getting creative. How do you start to do feature extraction from your legacy systems and do it in a way that allows you to use them more effectively in the context of your new architectures? How do you get creative around techniques like that?

How do you move to the cloud, which we haven't talked about a whole lot now? There's a massive, very compressed acceleration to cloud going on right now. How do you do that in an environment where you know you can't just pick up and move all your legacy overnight? Some things don't move to the cloud that well. Is there a business case to move it or not?

I think it's a combination of thinking about the right architecture and target state and then getting creative in exploring some techniques. We talk about digital decoupling and a variety of things to use to try to enhance the modularity and ability to move some of the legacy and extend the life of it as you build on the new platforms as well.

Michael Krigsman: The future of work, where do you see our work environment going? You mentioned earlier that healthcare is going to be woven into the fabric of everything we do. What's happening with work and what should we be thinking about regarding that?

Paul Daugherty: The reality is, I don't think anybody knows. I think if you say you know, if you say it's going to be 15% or whatever – make up a percentage – I don't think anybody knows that at this point.

We do know some things. We know, in our organization and through all the work we've done for our clients, everything we do can be done virtually. Everything we do can be done virtually and we've enhanced our ability to do it virtually over the past year.

There wasn't a single project we couldn't do because the technology wouldn't allow us to do it. Yes, there were some clients who couldn't afford to continue because of COVID, but there weren't things that we couldn't figure out how to do in the environment.

That tells us it can be done virtually, but the other thing I'd say is we're not going to do everything virtually. The future is not about all of us working from home. The future is one about giving people more choice and optimizing around bringing people together to enhance experience.

I have a colleague of mine who I love the way he said it. He said, "The criteria for getting people together physically shouldn't be on need. It should be based on fun." When you can enhance the experience, have fun, and enjoy the human relationship and build relationships, connectivity, trust, and such, that's when you should get together. I think that's an interesting view.

We're going to have a hybrid approach going forward. We're going to have a lot of people back in office spaces. The office spaces will look differently, which is something we're looking at already in terms of there'll be more around group work and how people work together.

To go to an office to work in a cubical, I'm not sure will make a whole lot of sense going forward. But I think we'll be back to a world with a lot of human contact, human interaction, and dialog because, for certain types of work, it is an advantage to being together physically and we need it to build cultures, to build trust, to build relationships, et cetera. That's the way I'd answer that question.

The only other thing I'd say is I think you need a real-time pulse. That's the way we're looking at it. We're talking to our employees, getting input from our employees, getting input from our clients, getting input from new recruits and people that are joining the company about what they want to do, how they want to work, and how they can work. That continual pulse from the people is what we'll use to decide on the optimal approaches going forward.

Michael Krigsman: Another topic is responsible AI. I know this is again a topic that's important to you. You wrote a book about this topic. Thoughts on responsible, ethical AI today.

Paul Daugherty: It's not a solved problem is what I'd say, I guess. AI, we haven't gotten too deeply into some of the technologies, but what I believe is that cloud and AI will be the two most transformative technologies of the next decade. They're not going away any time soon. In fact, we're at the early stages of both technologies. Both are innovating rapidly and moving on to different techniques. You have to follow them carefully.

In AI, specifically responsible AI, the issues we talk about I talked about a lot in the book I wrote, which is called Human + Machine. It's accountability, transparency, fairness, honesty, and the systems you build.

Accountability so that you know, at the end of the day, what human is accountable for key decisions. It's not okay just to say, "The car turned left because the machine told us so," or created an accident. A human is accountable for a design decision or an operating decision that made something happen. We need to understand accountability properly.

Fairness is critical because AI isn't biased. AI is a very neutral technology, like every technology. Technology is neutral, but AI can be trained on data sets that reflect bias and AI can be implemented in a biased way.

There is simply no excuse for it. We know enough about AI. We know enough about testing. We have something called an AI fairness toolkit to implement AI in ways that are fair, that are not biased, and that don't have some of the consequences of gender bias, racial bias, et cetera that have been problematic in the industry.

Transparency means there are certain things that need to be explained. You should explain them.

Honestly means you shouldn't use AI to cheat. Unfortunately, some companies have been caught using AI to cheat and violate laws or regulations. That's not appropriate either.

This sounds pretty basic, but that's the foundation. I think it's incumbent on the leaders in organizations that are applying to AI to have policies in place to ensure you're using it consistent with these things I just mentioned. If not, you're going to run into problems and you're going to be applying AI irresponsibly at some point and get caught up for it. I think it's in our control as leaders to get our arms around this and deal with it in the appropriate way.

Michael Krigsman: Issues around AI fairness and algorithmic transparency, do you see these as financial issues or cultural issues? What's the obstacle?

Paul Daugherty: Creating frameworks to ensure that you're applying it appropriately. The data sets you're training on, do they reflect all the qualities that you need to train the algorithms you're training? Do the testing, the way you're testing and the way you're evaluating for potential bias, there are again techniques we're using – this is possible to do – techniques that we can test for the bias that might be in the systems to understand the dimensions of bias that may be evident in a system?

Are you doing that before you roll out a system into the wild? Many organizations aren't. It's those types of things that I think are important.

I think, again, in the AI field, we're fortunate to have a lot of really talented diverse leaders in AI. I think, in our organizations – I get back to my diversity point – if you have a diverse team of people working on these problems, they're more likely to come out with the right answers and test and develop for the right things. That's part of it as well.

Michael Krigsman: There is business model resistance to transparency and fairness. I recently interviewed, on this show, two members of the House of Lords in the UK who are grappling with this from a policy perspective. What should business leaders do to reconcile the business model issues, the attractiveness of non-transparency with the social desire to have transparency?

Paul Daugherty: there are a couple of things. The first is, as an example in the U.S., we do not have appropriate data privacy legislation at the federal level and we need it. It's something we've advocated for. We've been active with the business roundtable and others in advocating for change.

That starts to help because if you have standardized, accepted rules around data privacy, that at least creates the foundation. We don't have that in the U.S. now, and I think that's a big gap. It's kind of crazy, in the digital world we live in, to not have that in place.

Then from a business perspective, sure, there are things that, for competitive advantage, you're going to want. You have trade secrets and things. Of course, you can't publicize every part of an algorithm and such that you have, but you have an obligation to make sure it operates effectively.

Just like if you build a car, you have an obligation to make sure it operates effectively. With an algorithm, unfortunately, it can have more dangerous connotations than a car or some other physical equipment, in some cases, because of these types of bias issues.

Again, I think what a business leader should do is make sure you have the principles established of what defines acceptable use for you and make sure you have policies in place in the organization that ensure you'll adhere to what you're setting. That's what I think leaders need to do.

I think too many organizations, I would say the majority of organizations, are flying blind. They have people out there applying the technology, developing the technology, applying AI, and putting it out there, and don't have a prescriptive and defined set of guardrails as they need to ensure the acceptable use of it.

Michael Krigsman: Developing a framework and then adhering to that framework, in essence.

Paul Daugherty: Yes. We've got one we use in Accenture. We do this for clients. We help them set these things up.

There are organizations like Partnership on AI that have been doing work in this area. There is a lot of work in this area. I think too few organizations are tapping into it in developing rigorous policies in their own organizations.

Michael Krigsman: Paul, as we finish up, there are a lot of CIOs and technology leaders who watch CXOTalk. How can CIOs ensure the highest degree of relevance for themselves inside their organization and for IT going forward?

Paul Daugherty: I'd just like to start the answer to it by giving a shoutout to all my CIOs, CDOs, CTO friends out there, and those who aren't friends that I don't know. I have huge respect for the technology leaders in every organization.

I think it's if not the hardest, one of the hardest jobs that there is out there when you talk about everything we talked about, the need to evangelize and set direction and strategy, from keeping the lights on, to balancing the financial needs, to looking at the talent and developing the talent across the organization. A big shoutout to the amazing work that everybody in this industry does.

I would say that the three things that I come back to, to focus on, I'd say you need to focus on the technology. I'd say the main thing there is learning about things. Really think about the trust and how you cultivate it. The way that you're using technology in the organization cultivates the degree of trust within your consumers, customers, business partners, as well as your employees in the way you're applying technology.

Then the talent and cultivating the right talent. I think it's not just in IT or technology, but cultivating the right talent is really essential.

We're in an era where we're re-platforming business right now. We've been applying technology in businesses for 70 years, since the transistor was invented (not too far away from where I'm sitting right now). But we're going through a major re-platforming now with cloud and AI and everything that's happening.

We're creating the new future. You might say we're creating tomorrow's legacy today, right now, but it's not legacy. It's the new modern stuff. And you need the new talent to do that. It's creating the talent and the talent of your current organization transitioned to new skills that are going to help with that, focusing on the talent, the reskilling, the rotating, as well as bringing in the new talent.

Michael Krigsman: Okay. Well, we are unfortunately out of time. It's been a great conversation. Thank you, Paul Daugherty, for spending time with us today.

Paul Daugherty: It's been great, Mike. Thanks. Time went by fast.

Michael Krigsman: It did. Everybody, we've been talking with Paul Daugherty. He is the chief technology officer and the group chief executive of technology at Accenture. It's a huge company with 500,000 employees. It's hard to even imagine that scale.

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