What is the link between innovation and customer experience? Industry analyst and CXOTalk host, Michael Krigsman, explores this topic with the Global Chief Innovation Officer at EY.
What is the link between innovation and customer experience? Industry analyst and CXOTalk host, Michael Krigsman, explores this topic with the Global Chief Innovation Officer at EY.
Jeff Wong is responsible for Innovation at EY, where his role is to challenge everything, from the way EY operates internally to how it delivers services to its clients. Jeff works across the organization to help identify, share and scale the best ideas. Additionally, part of the Global Innovation team's remit is to research and explore new technologies.
Earlier, Jeff held several positions at eBay, including founder and senior director of its Business Incubation Group, which built startups for eBay marketplaces. He also worked with J.P. Morgan Partners and JAFCO America Ventures, and he began his career with the Boston Consulting Group.
Michael Krigsman: Today, we are talking about innovation, and we're going to focus on customer experience and what's the relation between innovation and providing the right type of experience for your customers. It's a very important topic.
I'm Michael Krigsman. I'm an industry analyst, and the host of CXOTalk, and you're watching Episode #297.
Now, before I introduce our guest, I want you to please, please, please tell your friends, tell your family; subscribe on YouTube. Tell them to watch and tell them to subscribe. We need those subscribers on YouTube.
I'm just thrilled to introduce our guest today who is Jeff Wong. Jeff is the global chief innovation officer at one of the largest professional services organizations in the world, which is EY. Hey, Jeff, how are you? It's great to see you here. Thanks for taking the time to be here with us.
Jeff Wong: Thank you for having me, Michael. It's a pleasure to be here.
Michael Krigsman: Jeff, please tell us about EY, and tell us about your role there.
Jeff Wong: EY is a large professional services organization. We have about 260,000 people around the world. We're in every major country, pretty much every major city. We have tax advisory services. We have transaction advisory and, of course, our assurance business, which is our largest business. We're $30 billion to $33 billion plus a little bit there in revenue. My job here as Chief Innovation Officer is to create new things for EY.
Michael Krigsman: When you say, "Create new things," please elaborate on that for us.
Jeff Wong: Really, it's about thinking about innovation. For us, innovation is about what I call creating new, so that's new services that we want to be in. It's new ways of looking at old services. It's new ways of delivering the things we've done for many, many years. It's all about creation of new.
Michael Krigsman: Now, why does a company like EY have to have a chief innovation officer?
Jeff Wong: Michael, that's a very good question. Change has been a constant in business throughout history. Our history goes back over 100 years. We've had to evolve through many different shifts and disruptions throughout that time.
What's different now than what was happening before is really the pace of change. I think it's been well documented and written about quite a bit. Really, the pace of change has gotten to a tempo where the systems and processes that large, long-standing companies that have been successful navigating disruption in the past, those systems and processes aren't built for today's pace. Really, that's why I'm here and that's why we created this new role a few years ago because we need to make sure that we match that pace of change for ourselves and, frankly, to watch the world around us and match the pace of change in business around us.
Michael Krigsman: Jeff, how do you link that notion of responding to the pace of change with accurately responding, at the same time, to what your clients or what the market is expecting and wants from you?
Jeff Wong: Yeah. [Laughter] You know that's what makes it a lot harder today than it used to be. I have a good friend who has been a CEO for the last 20 years of several large organizations. He and I were chatting once. I don't want to reveal him because it's his thought and I want to let him have his own voice on this. But, he said, you know, "Jeff, it's hard to rely on my last 20 years of experience to make decisions about where the company," that he's leading now, "should head." He's like, "Right now, I just have to react to the environment in front of me."
I think this is why it's so important now for companies to really be focused on the theme of the show: customer experience. Really, it's linking together the fact that we have to create new things, but we have to do it in a way that really, really addresses how customers want to receive the new products and services we're delivering. It's really that marriage, that coming together that makes creating new things powerful.
Michael Krigsman: Now, that's an interesting question, the notion of customer service and the intersection with innovation. Most people, I don't think, consider these two as being married tightly. Maybe you can share with us your thoughts on that.
Jeff Wong: Yeah. [Laughter] It's funny, Michael. I grew up, actually, in the Internet world, so I spent almost ten years at eBay. I worked in venture capital. I worked in growth equity investing. I didn't actually grow up in the professional services firm.
What I saw out there in the Internet world is, you could look at a lot of websites, and you could start to see the organizational chart in the website. You could see where the category manager was and made that decision, and the product manager made a different decision. The engineer maybe took a shortcut, or the business development group made a deal that the product people didn't like. It's all revealed out there on the webpage.
What happens is, as companies get bigger, things become more about the organization and sort of the internal negotiations of the organization rather than about the customer. Really, when we look at what it means to revitalize something, revitalize a company, or look at something new, I think everybody has to return to that first principle, which is: what does a customer want; how do you address their need; and how do you make them happy with you?
When we look at innovation here, when we think about these new services we're delivering, when we think about how we deliver the services we've been doing for 100 years, we're taking a fresh look, looking at our customers, and saying, "Well, what are they really trying to address? What is the problem we're really solving for them? And, how can we do it better?" I really think that's the core of innovation is looking at customer problems and saying, "How can we do this better?" That's what we're doing here.
Michael Krigsman: Why is this so hard? I'm being facetious but, on the surface, you say, "Okay, I want to be more responsive to what the customer needs, and so let's go out. We'll have a beer. The customer will tell me what they want, and I'll just go do it." But, it's not that easy, so why is customer experience so, so hard?
Jeff Wong: You know, I think customer experience is hard because large, successful organizations become wedded to their systems and processes and the way that they think things ought to be run. Then what they lose sight of sometimes is the fact that they're no longer thinking about the customer as much as they're thinking about their own systems and processes. I think breaking through that organizational chart, those systems and processes that exist, re-asking the question, "Well, why do they exist? Why do these hypotheses about what we should be doing and not doing exist?" Being able to challenge them, that's really the marriage of where companies sometimes get stuck and needing to break through with thinking about it in a new way, which is where innovation comes into play.
When we come into an organization, when I come into an organization, I have the benefit of looking at something new, looking at it in a new way, to look directly at the customer and say, "What does the customer want?" That's what my team is able to do. We're able to look at our existing businesses and simply ask the question, "Well, what would the customer want today if we built this service today? How would the customer want it delivered? What would we build? What tools would we use to build it? What technologies would we bring to bear?" That's really how we're thinking about the world in a new way for us.
Michael Krigsman: Jeff, innovation is fundamentally about change. Is that what we're talking about then with customer experience is changing how we operate, changing how we listen? Is it all about change in a very similar way that innovation is about change?
Jeff Wong: Yeah, Michael, you're right. Innovation is about change. I think it's also about change along all dimensions of a company.
We're talking about customer experience, customer service. Obviously, I think, when people think about innovation, they think a lot about technology and technology being sort of the only driver of change. What I'll tell you is this: We don't think about it that way at EY. We don't think about innovation as just about technology.
Technology is clearly important. It's clearly something we focus on. It's clearly something we know about and we know how to apply. But, really, it's about changing all aspects of the organization.
For us, for example, we think about talent very differently than we did before. When we go out and recruit now, we think about how we can be as good at recruiting STEM graduates as we are with the business school students. We're excellent at the business school students. We want to be as good at recruiting STEM graduates. Why is that? Because we think we need a diverse set of critical thinking skills, and we want to expand on the great skills we have here by bringing in new mindsets in greater percentages.
We also are rethinking how we train them, so our learning and development organization. I'll tell you one example is that we have a leadership development program now here at Stanford University, which is just across the street, which is about the School of Engineering, the School of Design, and the School of Business versus the traditional corporate training programs, which tend to focus on the schools of business around the world, because we think that's the new mindsets that we need to have.
We think about how we promote them differently. Right? It's not just technology. It's also talent. For us, it's also business models, so we're expanding on our business models. We, historically, have been an hourly rate times hours business. Right? Very traditional. It's lasted for 100 years. It's worked extraordinarily well. It will continue to work extraordinarily well, but we want to add on different ways that we can create value for our customers and that our customers can pay for and, frankly, the ways they want to pay for it.
We're thinking about our business from multiple perspectives. When we talk about change, it's not just technology, not just thinking about the customer experience; it's also talent, business model, how we govern ourselves, the pace of which we make decisions. It's sort of all aspects of the firm.
Michael Krigsman: Now, going back, Jeff, to customer experience, if we want to apply this kind of innovation thinking to customer experience, do you have a framework or a way that we can approach thinking about this?
Jeff Wong: Michael, there's a lot of writing out there about how to think about customers and how to talk to them, et cetera. You know what I honestly think it boils down to? It boils down to having smart people go out and really listening to customers, being willing to talk to them face-to-face, to meet with them in their environment, to look at how they interact with whatever product that you're competing against or service you want to enter and asking smart and good questions about it.
There are lots of different ways. People talk about different polls, and I've seen lots of polling in different customer segmentation and all the different studies around the world. They're all valuable, but I think nothing really can beat looking a customer in the eye, asking them good questions, watching them do their work, watching them do what they do because sometimes the customer can't articulate what they really want or what would be really helpful. I think that's why it's so important to just see the customer in their environment. There are lots of different ways to do that, but I think nothing is better than that.
My team has practiced this religiously. Right? Whenever we think about entering a new service or a new business, the first question I always ask is, "Well, go talk to five customers." They come back, and we talk about the conclusions, talk about what the problem might be, and they said, "Okay, let's go talk to 10, 50, or 100 more." That's the first three or four steps for us.
Really, we don't use any specific framework. We know all the frameworks. We use different ones, as they apply differently. But, the soulfulness boils down to that, being able to look a customer eye-to-eye and asking good questions.
Michael Krigsman: Jeff, we have an interesting question from Twitter. Arsalan Khan asks, "What does innovation mean in the context of professional services?" Because we're talking about customer experience, I will ask you to address that but, also, weave in innovation and professional services. Weave customer experience in as part of that.
Jeff Wong: Within professional services, like I said at the top of the webcast here, it's about all aspects of creating new. For us, we need to be in new services.
You know what's really interesting that I didn't know this before I came here is, our world is constantly evolving. The rules that govern how companies operate are constantly evolving. The latest and greatest thinking around supply chain management, pricing, how we audit, what we need to be auditing, or what's being taxed, it's constantly changing.
For us, we need to be constantly thinking about what's new, what's coming up next, what's the way the legislation is going, how do we address it in the best and most meaningful way? But we also look at our existing services and ask, "How can we do it better?"
For us, one thing that we're doing that's really interesting is in our audit business, actually. Our audit business has been around for over 100 years. Most people around the world look at it like, "Boy, audit. That's very traditional, done in a very traditional way, business." In many respects, there are a lot of things we do very consistently because it's the ethics and professionalism of our team here.
But, what we also realized is, how do we help our customer understand, our clients understand, what we're doing better, understanding the process and the pathway better, and connect to us in a more meaningful way? We actually launched a client portal within our audit practice so, as we go about the audit, it doesn't just become, "Hey, we're doing the audit. Give us a bunch of information. We're going to walk away, do a bunch of processing, and come back to you with the answer. Then we'll sign the document and you sign the document."
What we've done is, we've created a client portal where the CFO and the finance team can watch the process along the way. We can communicate back and forth in real time. They can see where we are in different processes. We can ask relevant and important questions. It's a much more seamless experience.
Look at that. We took a very traditional business, 100-plus-year business, done very similarly for many years, and we said, "How can we do better for the client? How can we do better for the customer?"
I have to tell you. The customers that are using it, it's early days in this launch. They love it. They love that ability to use technology to have a much better connectivity to their teams and, frankly, it helps us deliver a better answer for them at the end of the day.
Michael Krigsman: Again, if you think about the kind of challenges that are involved, this is a very end-to-end process that involves listening to the customer, going cross-functional, it sounds like, inside the organization--this would be true whether it's EY or any other organization, or whether it's professional services or not--sharing information. There are a lot of changes that are required, so where do the obstacle points or the choke points with this kind of innovation tend to arise?
Jeff Wong: Well, the challenge with any large and successful organization is that they're large and successful, and that the systems, processes, and methods that have been in place for years have been working extraordinarily well, and that's why the company is successful. I've had the benefit of, in my role, going around the world talking to C-suites and boards around the world. I think the consistent refrain I use with them and I think is really resonating is that these systems and processes that have made you so successful over the last ten years probably aren't going to work for the next five.
You know what you said about what are the roadblocks and choke points? That's really easy to agree with. It's really hard to implement because people within the organization have been really successful, and they're really, really good at their jobs. They really are experts in what they do, but it's hard for anybody to go through change. It's hard for anybody to have something different.
You know, Michael, it's funny. I have this phrase I like to use internally, which is, "When I wake up in the morning, half the company hates me; half the company loves me. When I wake up, I don't know which half is which. It's different every day," because everybody likes it when you come in and you say, "We need to change." Everybody agrees with that.
When you go and ask them, it's like, "Yeah, that group over there needs to change. That group over there." They say, "Oh, yeah, that group over there needs to change," but so do you. That's when everyone goes, "No, no, not me. Not me. Somebody else needs to change." [Laughter]
What I've really appreciated about my time at EY, which, coming from the internet, I was very happily surprised by, is the willingness of everybody to not just engage in this conversation about how we need to be different, but also to start to take action around it. It doesn't mean it's easy, and it doesn't mean that there's not the stickiness to the way we've done things before. Frankly, sometimes that stickiness is a good thing. It's protecting what we've been able to build and create.
The willingness of our organization to think in new ways, to run experiments, to now take risks around things that maybe work and maybe won't work, but if it works it's a big impact to the firm, that's been a really, really remarkable, eye-opening thing for me. One wouldn't think a 100-plus-year-old company that's been this successful would have this much ability and flexibility to think about change and really start implementing it.
Michael Krigsman: I know somebody who was--and the keyword here is "was"--head of innovation at a major retailer, major brands that we all know. There was a tension between her role as innovator and the company's desire to basically drive profit through, drive revenue through, e-commerce. This became a real issue and, thus, the operative word "was."
It became a real issue because she felt her role was to drive investment in future opportunities. But, despite the company saying, "Well, we innovate; we want to innovate," what they really wanted was to figure out ways of optimizing and being more efficient with retail e-commerce. How can a company bridge this gap between the present and the future, as you were just describing?
Jeff Wong: There are a lot of rules of thumb about how you should think about investing out there. I think the most popular is the 70/20/10 rule, right? You should be 70% investment in your core, 20% in your adjacent, and 10% in your disruptive, and really holding yourself to that discipline, as close as you can get to that discipline as possible. That really allows you to think about your portfolios of effort differently. E-commerce and the efficiency, in your example, sounds like it probably should have been in that 20%; figuring out an adjacent business to the core business and making it more efficient. But, the leadership should have really reserved that 10% for something new; what your friend was trying to work on.
That actually makes me reflect on something that I think is critically important about innovation. That's about who really leads innovation within an organization. For me, the CEO, our CEO and chairman, the head of our client managing partner, Mark Weinberger and Carmine Di Sibio, are incredible sponsors, advocates, leaders of innovation. They really brought me in to help sort of implement their soulful passion around the fact that we need to evolve.
For me, that's really where it starts. You have to have a CEO, a leadership team with the courage to think about the world in a different way, to realize that there will be some people who like the messages they're delivering and some people who are saying, "No, things are going great now. Let's not rock the boat here. Just keep it going for a little while longer."
They really had the vision and the foresight and, again, the courage to say, "Hey, you know what? We're doing great. In fact, we're probably at a lot of our all-time highs across a lot of different metrics. We've got an incremental amount of momentum."
What was really wonderful for me when I joined the firm was to watch a team, a leadership team, and it really does extend beyond them to the leadership team, to say, "Wow, we have this incredible momentum. We're hitting on all cylinders right now. You know what? We need to be thinking about the future as much as we're thinking about delivering excellence in the present."
I think that that's really where it all starts. For your friend and for people out there who are looking for organizations which are transforming and want to transform, I really would look at the leadership team. Are they bought in? Do they have the courage and the ability to really back the idea that we need to balance thinking about the present and the future?
We're fortunate to have it here. When you look around the world, when I look around the world, and when I look at different companies that are innovating around the world and doing new things in their industries, redefining themselves, frankly, redefining their industries, that's the commonality that I see. It tends to be the CEO. It starts there, but a leadership team that's bought into the idea that they want to take advantage of the opportunity to define their industry because that's really what this disruption affords us.
A lot of people think about it as a challenge, and they think about it as you hear the world telling you that this is something that's negative, something that's hard. We need to fend off disruption. We need to defend ourselves against change.
We don't look at it that way here. Leading companies around the world that I've talked to don't look at it that way there. They want to take advantage of it. They want to take advantage of this opportunity to redefine themselves in the eyes of their customer, to become something bigger, greater, more meaningful, more impactful, to change their part of the world. A long answer versus your friend's challenge, but I think it all starts with the leadership of the company.
Michael Krigsman: It's a very good point. I think, in that particular case, the company wanted to innovate, but the short-term demand of generating as much revenue as possible. Let me put it another way; senior managers were compensated on the basis of short-term revenue and that, therefore, outstripped any sort of abstract goal for innovation.
Jeff Wong: Michael, I see this too much, I think, around the world. It's actually something I'm fairly concerned about for large, longstanding, successful companies. The pressure on these leadership teams to, what I like to say, squeeze another penny into their margins, squeeze one more penny.
The shareholders who just demand that from that short-term nature of it, it's too often that that pressure prevents this long-term investment. It's sort of a penny-wise, pound-foolish, right? You might squeeze another penny out of earnings or two pennies out of earnings, but you're not making the investments that will get you a transformative, new, industry-defining company where the gains are extraordinary and astronomical if you're looking at it from a purely shareholder perspective. You need to give your leadership teams the ability and the space to enable their courage to do something differently to think about the long-term while they're thinking about delivering in the short-term.
This goes broader than innovation and customer experience. Here, we're really thinking about what we call inclusive capitalism, what I think the world is calling inclusive capitalism. A lot of this is around, how do you measure companies in different ways?
We do a lot of measurement. We're auditors, and we're very, very good at it. We have a large, large audit practice. We're very, very good at it. We measure revenues, margins, and all the other numbers, the financial metrics that one ought to measure.
We're challenging ourselves, asking the question, is that everything we should be measuring? Does that truly reflect what a company is and does? Does it reflect the impact on their employees? Are they training them? Are the employees developing skills, and are they leaving behind greatly skilled employees that are improving the communities they exist in and the world around them? What's their impact on the environment? How are they balancing the short-term versus long-term investment? Are they really thinking about competition, strategy, and the pace of change in the right way that really reflects the opportunities and challenges to their business? And, how do we measure that? That's a really hard question.
Fortunately, we have a really, really incredible team working, a large team working on it and trying to think about that question because that's what it really means. I think that for us to innovate, for companies out there to innovate, they really need everyone to understand that it's really a balance between short- and long-term. It's really about not just your impact on revenues and margins. It's about your impact on your employees, your community, [and] the environment. That adds up to a company, a whole that is far greater than simple metrics that we use today, or another penny of earnings next quarter can really tell us.
What I'm happy to say is that we see a lot of the financial leaders around the world starting to pick up this theme and theory. We're trying to do our part to help lead this effort.
Michael Krigsman: I want to remind everybody that we are speaking with Jeff Wong, who is the global chief innovation officer at EY, which is a professional services firm with 260,000 employees. They're a really big company. Right now, there is a tweet chat taking place using the hashtag #CXOTalk. Please, jump in and ask your questions.
Now, we have a couple of questions from Twitter and, actually, a really interesting one from Gus Bekdash who asks, "Do you have to convince your clients of the benefits of innovation?" How do you get your clients to get on board with this? That's what he's asking.
Jeff Wong: Yeah, so clients and being really focused on clients is, I think, the theme of what we're talking about. You're right. Sometimes they're not ready for parts of our journey, and so what we definitely try to do is to be very straightforward, very honest, very open about everything we're doing.
When we do something with technology that's new, we show them everything about it. In fact, oftentimes, they get down into the details. We bring in our engineers and technology experts to come in and describe exactly what's going on and how it's going on. In particular, in this day and age of sensitivity around data and privacy, maybe appropriate sensitivity around data and privacy, we are extraordinarily careful about it and we're extraordinarily careful to talk about how we're extraordinarily careful about it.
I think really open and honest communication with our clients is important. There are some clients that pause and say, "Well, things are going well. Maybe we should think about continuing how we're doing it today."
What's been really interesting is, when people think about innovation, they tend to think about, "Oh, the technology industry, the Internet. Those folks are just newly innovating, or the financial services industry, they're really innovating."
What we are finding is, companies around the world of every size in every sector are eager to participate in the change, wanting it and, frankly, from my perspective and, I think, from the perspective of our clients, demanding it from us. That's really what's unique and different in the messaging than we've seen in some of the popular press, Michael. I think a lot of the popular press likes to talk about the fear aspects of this. How is it impacting jobs, the numbers of jobs, where are they going, and all of these things?
The way we approach technology here is, we use technology to make our people superheroes in that technology is really about people. It's really about giving our people, you know, Wonder Woman's lasso or Batman's utility belt. Who doesn't want that?
What we're finding inside of our groups is that they don't just want it. They love it. They don't just love it. If we didn't do it, they would demand it from us. They're smart, passionate, motivated people. They want to do and be as powerful, as useful, and as strong with our clients as they can possibly be.
While sometimes it takes some convincing with the clients, and I think that the convincing usually is around being very clear about how much we've thought about security, privacy, data protection, how carefully we're treating the process, how we're really, really thoughtful about how this impacts our regulatory requirements alongside thinking about new things, and we're melding those two together. I think, for the most part, our clients have asked for this from us, demand it from us, and the leading companies around the world really are picking us because we're doing it. That's been a really great and fun thing to see.
Michael Krigsman: Okay. Fair enough. We have another question from Twitter on the subject of every company facing potential disruptive innovations from outside. In professional services, where do you see the disruptive innovations, potential disruptive innovations?
Jeff Wong: Oh, yeah. We're part of what I think people have colloquially named "The Big Four." We're part of that. Clearly, there's the other three of The Big Four who are also thinking about their investments and thinking about how they do things differently. We watch them, and we think about what they're doing.
Because I come from the technology world and the Internet world, I actually look outside quite a bit. When I think about who else might be doing things, I look at the large software vendors out there who oftentimes we're partnered with. I ask the question, "What are they doing that they could do differently that might impact our business?"
You know what's been fun is, more often than not, we get into a conversation. We say, "Hey, wait. You know what? Let's bring our two strengths together. Let's work together and figure this out to answer our clients' questions in more meaningful and beneficial ways to them."
I look at large technology companies, in general, who are doing investments in things like artificial intelligence and blockchain. I own the global labs in artificial intelligence and blockchain here at EY. We're doing really, really interesting things with regards to those technologies and the enterprise.
But, we also have to look at what are other people doing along these lines, particularly the large R&D labs from the larger companies. What are they putting out? How are they evolving? How are they thinking differently?
We spend a lot of time with startups, too, because I love them, it's fun, and it's great to support them and what they're trying to do. They're trying to change the world, and we want to support them as much as we possibly can.
Frankly, they have a lot of good ideas and think about the world differently. It's sort of mind-expanding to think about their world from their perspective. They just bring such insight in terms of how they think about not just the technology they're bringing to bear, but the business models that they're bringing to bear.
Then, finally -- well, not finally. There are two groups we always talk to. We're embedded in academia. For example, I'm involved with and I'm on the advisory board of the Oxford Foundry, which is bringing all the students of Oxford University out in the U.K. into this entrepreneurship world. It's important for us to have conversations there with the students and what ideas they're coming up with. How are they thinking about the world differently?
Then, of course, government and regulators, what might be fascinating for people to hear about is that I had the good benefit of sitting in front of a group of global regulators at their global regulatory meeting. I was invited in by the chairman of that group to talk about technology, to talk about change, to talk about how things might be different or are different even today. What's really, really interesting is how open the regulators are to that conversation, how open governments are to that conversation. We're talking to not just regulators, but government officials around the world.
We really look at it. I think the best way to talk about it is we really look at it as an ecosystem. We have an innovation ecosystem around us. It's important for us to talk to all different parties of this ecosystem to understand where they're coming from.
I know the question was phrased as, "Where is the new competition coming from? Where is the threat coming from?" That's clearly something we pay attention to, that perspective.
I think, more importantly, we look at it as, how can we come together as an ecosystem and create the win/win/win situations where we're bringing together ourselves with members of the ecosystem to address and answer harder and better questions? I think that's really something that sort of speaks to a theme for us, which is, we look at this as an opportunity, not risk, not competition, not something to be defended against.
When you start looking at things as opportunity, well, you start really looking at places you can do things together with other people. That's really how we're looking; that's the primary, first, second, and third thoughts in our minds are really around, "Wow, there's a way to work together to do something different." That's really how we look at it and focus on it. But, as you can see, we talk and think about the entire ecosystem.
Michael Krigsman: The ecosystem dimension of innovation seems crucially important to you.
Jeff Wong: Oh, absolutely. We started with talking about how fast the world is moving, and it's moving ever faster. It used to be, back in the day, I'll call it 1980s or '70s, when you could do the nice chart of who your competitors were, you could look at it and say, "This is the world that exists around me." You kind of could fit it onto a PowerPoint page.
The world is moving so quickly, and it's so dynamic, I don't know how any single individual just keeps it in their head. I don't know how any single individual can just know and understand the landscape in their head. I mean we all certainly try to. But, the fact is, it's moving so quickly, it's so dynamic, and it's changing so rapidly that it's hard to do that.
It's hard to see and understand all the opportunities coming from you because the world isn't that 2x2 matrix that you can draw and say, "This is how we stand versus our industry." We have to have the ecosystem, and we use the ecosystem, like we said, to work together with them, but also as listening posts.
I spend a lot of time with students out there at Oxford, at Tsing Hua University in the Schwarzman Scholar program out in China. We have teams of people who spent time with students at MIT.
We have AI4ALL, which is this phenomenal nonprofit encouraging diversity and ethical AI, and we interact with those students. Why? Because we want to know what they're thinking about. What are you thinking about? How do you see the world changing? What are you going to be working on?
I have to tell you. They are some of the best people in the world. These students, college students, sometimes even the later stages of high school students who are working on these amazing things, they're really telling us where the world is going.
Without interacting with this ecosystem in a very meaningful way, I don't know how anybody understands, even has a complete mental model in their head about where the world is going. For us, the ecosystem is a heavy investment of our time and effort because we really want to be a part of that community.
The second part I'd say, Michael, is that we don't just want to be a part of that community to take things from it. We don't just do this because, hey, we want to take the best ideas and run with them ourselves. We want to be part of this community because we want to participate in it, because it's the right thing to do because it's part of our mission and our effort.
We say we want to build a better working world. That's our tagline. That's our motto. That's our credo.
What's been fun for me is I've been with companies before that have had similar mottos and credos. How much we authentically live it, how we invest in it, how we focus on it, and how we care about it is really different. That's why we're part of this community and part of contributing to this community is because we want to build a better working world. The only way to do that is to contribute to the ecosystem.
Michael Krigsman: Jeff, we're at the point in the show where I have about 20 things remaining that I want to ask you and we have maybe 5 minutes left.
Jeff Wong: [Laughter]
Michael Krigsman: Let me ask you some questions. I'll ask you to keep your answers really, really short.
Jeff Wong: Great.
Michael Krigsman: To begin with, are there common characteristics of companies that do innovation well? Again, just keep it really short because we're almost out of time.
Jeff Wong: CEOs, leadership teams with courage, and a board that backs them.
Michael Krigsman: Okay. Fair enough. Are there industries that, as a whole, you see doing innovation well?
Jeff Wong: Everybody knows about things that are happening in the technology industry, the Internet industry. Financial services is always a leading industry in terms of new things. What people will be surprised by is, there are innovative companies in every sector, in every region, in places that you wouldn't guess: manufacturing, healthcare services, things that people go, "Really? They're really innovative?"
There are great companies around the world doing new things, and it actually correlates with your first question. It's CEOs, leadership teams, and a board that backs them.
Michael Krigsman: Okay. Then we have another question from Twitter. I'll ask you, again, just really quick. As you look over your clients, are there areas with respect to innovation in customer experience that are kind of common concerns, common things they're most concerned with?
Jeff Wong: Yeah, the common thing is that they have started to think too much about their organization. The organization thinks too much about itself and not enough about the customer. It tries to be one step removed from the customer and isn't willing to engage directly.
I talked at length before about it, so I won't emphasize it, but looking the customer in the eye, being one-on-one with them, and seeing what they actually do, that's critically important. I think a lot of larger companies, a lot of successful companies who need to change have sort of lost that feel.
Michael Krigsman: Okay. In the spirit of just asking you complex questions and needing really fast answers, what are the characteristics of a really successful organizational innovation change agent?
Jeff Wong: Do you mean a person, Michael?
Michael Krigsman: A person, yes.
Jeff Wong: Well, hopefully they have creativity and good ideas, but I think, also, is a willingness to be wrong, a willingness to try things and to take risks, a willingness to wake up in the morning and have half the organization hate you and half of the organization love you, and not know which half is which, but know you're doing the right thing for the company overall.
Michael Krigsman: Okay. You touched on this a little bit but, again, very quickly, are there metrics that companies can use to evaluate their innovation efforts?
Jeff Wong: Yep. We do pretty much every metric out there that's sort of the normal metric, which is, 70/20/10 in terms of investment. What percentage of our revenue comes from things that didn't exist in the previous, you know, insert the correct timeframe. We measure all of our projects individually across a number of different metrics. I think those are the common ones.
What I actually really like to look at and is not a metric, but is some of the qualitative, is here at EY; the conversation has changed around innovation. We are talking about ourselves and the world differently. You can feel that in the hallways and in the conversations that you have. It's not a metric, but it's a feel, and it's really wonderful to sense when it happens.
Michael Krigsman: Okay. Then as we finish up, I have two last questions. These are really hard questions, and you're doing an amazing job summarizing in no time at all. What advice do you have for people working inside large companies who want to change, who want to innovate, and they're just thwarted at every turn? They can't do it.
Jeff Wong: Yeah. Everybody likes innovation when it's at the idea phase and when they launch their thing. They think that's the day that's the victory. You have to love the grind. You have to love the day-to-day. Change doesn't happen overnight.
The fight, the working through hard issues, that's what it is. That's the job, and you've got to love it. I guess it's easy for me because I love it. I love that day-to-day.
Michael Krigsman: At what point do they just say, "It's not going to work," and they should quit?
Jeff Wong: Well, I think that most organizations that I've interacted with, most of the leading organizations around the world, I think the gumption, the courage, the grit, that mentality will be rewarded over time. I guess, if you're not working at a company you see as a leading company, a company that has some desire to change, go find something that fits your passion and fits what you want to do, and that has a team there that's willing to just give it a shot.
Michael Krigsman: Okay. The last question: What advice do you have for senior managers and executives who are behind innovation, they're investing, they're pushing it, middle management does not want to change and, as a senior executive, they just can't get the organization to do things differently; it's just not happening?
Jeff Wong: This is actually a complex question. I'll try to do it very quickly. As a senior leader at the company, it's your job to lead from the front, but it's also your job to put people in place who think expansively about who you are, what you can be, and who you want to be in the future. And so, as a senior leader, I would say, over time--and this is loving the grind again--you've got to love the grind, you've got to love the push, and you've got to put people in the organization and raise up people in the organization who are thinking differently, who are thinking expansively.
It takes time. It takes time. It takes effort. It takes putting people into place that aren't perhaps the traditional profiles or backgrounds that you've selected before. That takes courage. I think that it's all those things: it's courage; it's patience; it's loving the grind; it's knowing that you're doing the right thing for the company for the long-term future of the company. I think it all pays off in the end.
Michael Krigsman: Then I have to ask you one last, final question. For senior managers of public companies who want to do this and, yet, at the same time, they have quarterly results that they have to meet and there is no flexibility in that.
Jeff Wong: I've had a lot of private conversations with CEOs in different areas around the globe about this very challenge. I think that it's important for them to start this conversation with their board, to have these individual conversations, and to take the time it takes to start convincing them step-by-step.
I've seen too many companies adhere to the siren song of the penny of earnings and I'm a hero, and too many CEOs who look at that and have been able to execute on it and know that they're trading off a big, long-term gain for a minor, short-term win. They know it. They know what to do. They know what they do differently, and they need the courage to go and start having those very different conversations with their board and their leadership team and build the momentum around it.
Michael Krigsman: Okay. Great answers. Whoo! We are out of time. What a fast conversation it's been, too. We have been speaking with Jeff Wong, who is the global chief innovation officer at EY. Jeff, thank you so much for being here. I hope you'll come back and do this again another time.
Jeff Wong: Absolutely. It was a lot of fun. Thanks for having me.
Michael Krigsman: Everybody, you've been watching Episode #297 of CXOTalk. Tell your friends, and right now is a good time to subscribe on YouTube. Have a great day, everybody. We have amazing shows coming up, so check out CXOTalk.com. Bye-bye.
Published Date: Jul 20, 2018
Author: Michael Krigsman
Episode ID: 532