The future of retail is omni-channel: identifying and serving the customer from mobile to Web to the sales floor. Eli Rosner, NCR’s SVP and CTO, helped build a $3.7 billion business supplying technology, software, and services to this fast-changing industry. Learn what it takes to continually reinvent a 130-old-company in the face of relentless technology change.
Eli Rosner is Senior Vice President & Chief Technology Officer (CTO) of Software Solutions for NCR Corporation. In this role, he is accountable for the company's strategy, formulation, development and cross-functional delivery of NCR's software portfolio. Rosner also participates in the NCR Leadership Team led by NCR's President, CEO and Chairman Bill Nuti.
NCR: From Cash Registers to Omni-Channel Retail
Michael Krigsman: Welcome to Episode #215 of CxOTalk. I'm Michael Krigsman, industry analyst, and your host of CxOTalk. CxOTalk brings the most amazing people together, the most innovative in the world together, for an in-depth conversation about topics such as transformation and leadership, and the impact of technology on our organizations, and our society. And today, it's going to be a fascinating conversation. We are speaking with Eli Rosner, who is the Chief Technology Officer of NCR.
Now, some of you may know NCR as National Cash Register Company, which is how they were founded about 130 years ago. And so, we’re going to talk about that evolution and what the company is doing today. Eli Rosner, thank you so much for being here!
Eli Rosner: Thanks for having me! It’s a pleasure!
Michael Krigsman: So, Eli, tell us about NCR, how big the company is, and what the company does. And you're CTO; what does that mean?
Eli Rosner: Yeah. So, the company, as you said is about 130 years old. I just want to be on record stating that I was not there when they founded the company. Over 30,000 employees all over the world, thousands of customers. We are serving clients in three primary segments: financial services, hospitality, and retail. As such, we are having customers all over the world in retail banking, in all kinds of stores, whether it's a specialty store, a grocer or petroleum, or in quick service restaurants, stadiums, cinemas, etc.
My role within the company is the Chief Technology Officer, [though] I actually wear multiple hats. One of them is the standard array with Chief Technology Officer role, where I’m accountable to set the overall vision and strategy of the company, and where we’re going from a technology perspective. The other part of my job is that I’m accountable for all the software engineering within the company, so it’s like a glorified role of VP of Engineering, so to speak.
Lately, I've also had the added accountability of being accountable for the project management practice. At NCR, where solution management is what we go to market with, we separate between solution management and product management. There's a different group that we call the "Industry Solutions Group" that does that, and we work in close collaboration with them, as all the products we develop are becoming part of the solutions that we go to market with through the ISG group.
Michael Krigsman: So, you are running the products, and you're responsible for the technology vision. And, I think that when I was researching NCR, the fact that the company is so old, 130 years old, of course, you're not doing the same thing now that you did 130 years ago, and so, how do you take the company through that kind of a transition?
Eli Rosner: It's a very exciting challenge to understand a company of that magnitude. You know, NCR is an iconic American company, so I just want to make sure that I'm very clear that it's a privilege and an honor to be part of that transformation and reinvention of an American icon. The company has an unyielding heritage in innovation. It's one of the first enterprises in the world that actually held sales conferences. So, the entire sales practice, and the best practices around selling are very active in the company. And, the company was also into manufacturing everything that they did in-house. So, they were not outsourcing a lot of the manufacturing; everything was done in-house many, many years ago.
Well, in August 2005, a significant event happened in the company, where Bill Nuti, our CEO and Chairman as of today, joined the company as a relatively young CEO, I think he was around 40. Bill took a company that had a perception positioning in the marketplace as a hardware and services company, and started a very exciting reinvention journey. And that reinvention journey has been going on now for the last ten years, and now we're going into the last leg of it, which is the next ideas between 2015 and 2020. And, the reinvention process, in the first five years, we streamlined all the manufacturing of the company. We laid the foundation to fuel the growth, and between 2011 and 2015, acquired several software assets in the neighborhood of 3.6-3.7 billion dollars in all the divisions that we serve.
And now, we’re going into the last phase of the reinvention, which is very exciting, to pivot the company to a leadership position into a platform-based business model that serves our only channel that delivers omnichannel solutions.
Michael Krigsman: So, we definitely want to hear about what you're doing now. But, can you give us a sense of what was driving this ten-year reinvention that you just mentioned? Why did you do it?
Eli Rosner: Yeah, it's a fair question, you know. And, I've got to take you back to 2005-2006. Bill Nuti is a unique person. He's got the ability to see around corners. In 2005, Bill Nuti sat down with the executive team and set a vision for the company that we want to lead how the world connects, interacts, and transacts. Now, you know, when you think about 2005, the iPhone was not around. We were still carrying portable DVD players. E-Commerce was about 8% of what it is today. So, if you think about the depth of the vision that Bill had regarding repositioning the company to a global player and omnichannel, you can get an appreciation of the strength and the depth of his ability to foresee the future.
Today, when we look at those three verbs, "connect," "interact," and "transact," and people are talking about the Internet of Things, people are talking about platform-based business models; or there's co-creation of value that's happening through interactions, interactions between pairs in different ecosystems. You can just see how that vision was far-reaching, far-looking, and still applicable as of today.
What Bill realized, is that there are significant changes; cyclical and macro-trends; that are happening in the economy, in the world, in the way that services transition into the front-end. You can think about different industries that went through this transformation of becoming more self-service and handling more of the transactions than the consumer. You can think about people standing in elevators pushing some buttons to take you to some floor; you can think about gas stations, think about Blockbuster replaced by Netflix and things like that.
So, Bill saw that digital transformation that is happening on the edge points and handing off the service over to the consumer, and moving the transactions over to the consumer. That was why he felt the need and the necessity for long-term sustainability, and that's where he changed the vision and positioning of the company.
Michael Krigsman: So, you talk about these edge points, and that's important because that's the source of data that runs through your platform. So, maybe describe this from the outside in, perhaps starting with the edge points and the types of data, and then you mentioned omnichannel, and you said platform-based, and so maybe take us then through those pieces?
Eli Rosner: Sure. Regarding the edge points that we have in each of the industries we serve, think about the financial/banking sector. We have ATMs, interactive service terminals, and kiosks. In the retail, we have a flexible checkout, personal self-scanning, and all kinds of tablets for the associates to help cue in the stores, specialty stores specifically. In the restaurants we have mobile points of sale, we have kitchen controllers, we have handhelds, different payment mechanisms, digital signage, various types of sensors, etc. Those are all the edge points that NCR is delivering today in its hard work arsenal.
So, if you think about the type of data that's generated across all those edge points, we are, by the way, running, just as a benchmark, probably 650 million transactions every day for our edge points around the world. The number is likely to be higher, but I'm trying to think conservatively here. And think about us as consumers, where a company like NCR has access to information about us: where we eat, shop, bank, travel… I mean, every time you use the delta barcode to check in, it's our product that you're using. If you check in at a kiosk in an airport, it's our product. We use an ATM for the most [...], you know, close to a million ATMs around the world, in millions of points of sale around the world.
So, people are using us almost on a daily basis, and we collect a wealth of information about transactional data, inventory data, sales, loyalty programs, coupons, you name it. All this data is collected. Of course, transactional data at every restaurant and point-of-sale, where the transaction is held, so there's a wealth of information that we're collecting from all the edge points about actions that ask that we do as consumers.
Michael Krigsman: So you’re collecting this vast amount of data, because NCR has got machines, devices, controllers, sensors, pretty much everywhere. That data comes in, and what do you do with that data, now?
Eli Rosner: Yeah. A lot of things. So, first of all, we are building a centralized database of customer and consumer preferences, things that you like to do, so that we can provide the data back to our clients and other companies. As you get service in those service points, either at a retail bank, or a store, or a restaurant, we provide you with better service, with better promotions. They know what the expectations that you have are, and we can also help make the transaction across all those channels seamless in the sense that that's what all the channels are about, right? It's like a 360° surround-sound music around you. Regardless of where you are, you always hear the same music, so to speak. So you can start an activity at home, on a desktop, you can do it on the go on a mobile device, you can do it before you get to the store, while you're getting into the store, while you're in the store, as you left the store… So, all this data enables us to provide better customer service to the consumers, who are our customers' customers.
Michael Krigsman: So I think you need to elaborate that piece of it. So, you're collecting this data, and then tell us who your customers are because you mentioned your customer's customer. So, tell us who your customers are, and then how does the data enable them to provide that omnichannel customer experience that you were just describing?
Eli Rosner: Our customers are retail banks, stores, and quick-service restaurants, stadiums, and cinemas. Our customers' customers are the consumers. It's you and me, and everybody else who's listening to this call today, here. So, think about a retailer situation, where you know where you shop, what you're used to buying, the things that you buy more frequently … We also have connectivity with other ecosystems like the weather so that we can help our customers, for example, know when they can apply some kind of promotion, if there is any food that's sensitive to weather conditions, etc.
So, think about it. When you go to a site, and you want to purchase items: since we know your shopping patterns - it's very similar, by the way, to what Amazon does, are people who bought that also bought that, as well as that. So, we're running similar correlation engines for our customers, as well as enabling them to get access to all the transactional data around it. When it does, they get to know you better.
Let's think of a light example. I believe that this tells the story significantly. If you go to a specialty store that you've been buying from for some time, and you put something on your shopping list two weeks ago, where you say, "You know, I want to be notified when there's a specific tie or a shirt that I was looking for at that store," well, then you get a notification that your item is available. As you get into the parking lot, our technology enables the specialty store to know that you're around, using beacon technology. As you get into the store, you can be identified by a sales associate who is pulling all the information about you, your buying patterns, your preferences, etc., then they can approach you and say, "Hey! Mr. Rosner, you were here two months ago. You bought a pair of jeans; you were looking for a particular type? We have it in stock. And, by the way, there's a great t-shirt that can go nicely with the jeans you purchased a couple of months ago. If you'd like to see that, it's all ready for you in measuring room #5." So you go to the room, and it’s all ready for you to test.
So, here's a very specialized service that we can provide because we know your buying preferences. As they're helping you, they can say, "By the way, there's a special promotion for this item and the other item. We know you like purple, so we have a lot of variety concerning shorts in purple now. Summer is coming, why don't we go take a look at those products?" And that's how they cross-sell you and up-sell you in a very personalized manner.
Michael Krigsman: So, you are supplying the source data. And then the platform that essentially provides that correlation mechanism with all of these pieces of source data.
Eli Rosner: That is correct. We have a technology platform that enables us to collect and stream all this data, structured and unstructured data. We run some of the correlations, some of our customers take the data as-is and run the correlations on their own or complement our engines, and doing all the activities that I described earlier.
Michael Krigsman: And, are you providing the data to other software providers, or are you selling this service directly to that customer of yours, but namely the store or the retail chain?
Eli Rosner: It depends on the type of the agreement that we have concerning our ability to access the data. So, in cases where we have the license to use the data in an aggregator, in an anonymized manner, we do that, and we provide it to third-party companies so they can improve the service for our customers as well. And in all cases, our clients have access to the data.
Michael Krigsman: What about the privacy issue? Because of course, it enables a lot of convenience for consumers, because, "Hey! The store is going to give you, or recommend to you some item that there's high confidence in which you'll be interested in it." But at the same time, how do you avoid collecting so much data, or being too intrusive that it becomes creepy?
Eli Rosner: Yeah. Look, at the end of the day, the control of how much data is exposed to the consumers, or pushed to the consumer, is all within the supervision of the consumer themselves, and our customers. More specifically, all the programs that we're providing are an opt-in basis, meaning you have to opt-in and agree to get the service. You'll be amazed at the amount of data that specifically [...].
Michael Krigsman: Oh! It looks like Eli Rosner's connection has died. So, Eli Rosner, if you are out there in the ether, then please just reconnect. In the meantime, I'm looking through some of the comments on Twitter.
Eli Rosner: [unintelligible]
Michael Krigsman: Oh! Are we back? […] I think he's going to reconnect.
So, I’m looking through some of the comments on Twitter right now, and Zachary Genes … [bell]
Oh! It looks like we have Eli Rosner back. There you are! Welcome back!
Eli Rosner: I don’t know what happened!
Michael Krigsman: [Laughter] You know, such is the way of the internet. So I was just saying that Zachary Genes, who's listening, just tweeted out … Every time you check in at a Delta Kiosk, you use our product. So your data sources are pretty much everywhere. But you were talking about the privacy implications, and I also want to speak about the data science behind this. I'm not a data scientist, but [is there] any insight that you can share with us about how you're doing this magic?
Eli Rosner: Yeah. So look, data privacy is a top concern, as you can imagine, for us, specifically with all the data breaches that happened lately, to quite a few of the large retailers as well as banks. And so, data is always protected, data is obfuscated whether it's a [...], you know in storage, or in transport. And, the ultimate decision about what data to show our customers resides within our customers' hands and the relationship that they have with their consumers. We will never give out data that is unique to a particular person. We will always provide information in an aggregated, anonymized manner. So that's how we protect the customers' privacy.
Michael Krigsman: So your customer is the bank or the retail chain. They are the ones who are interacting with the end-users, ultimately. Or, they’re the layer in between. So, it’s your machine, but it’s traversing their policies, their privacy policies, their customer relationship policies, and so on.
Eli Rosner: Exactly. And in most cases, the data flows in integration or through the CRM system that our customers have just likely described. So we're providing a service that indirectly touches the end-consumers, you and me, but it always goes through the systems of our customers: the retailers, or the banks, or the restaurants.
Michael Krigsman: And that's what I was wondering about earlier because obviously, there's a close connection here between what you're doing with the data, and the personalization that the retailer, or the bank, is doing using their … could be their call center, could be their CRM system, what have you.
Eli Rosner: That's correct. So, the banks will use, the banks, the retail, the stores, whatever it is, they have their own CRM system in most cases. They get access to the data, you usually opt-in to a loyalty program with them, and it's in their discretion as to how you actually run this program. You provide them a mechanism to collect the data, and we provide it to them.
Michael Krigsman: Now, what about the data science? I'm assuming that you're, and I shouldn't say that I'm assuming because I don't want to make assumptions about anything, but what kind of analytics do you provide? Do you employ data scientists? Do you think about predictive analytics, or is it just correlation? How do you think about that data in a forward-looking way?
Eli Rosner: It’s a practice that we’re investing quite a lot of money at NCR into. It’s a practice that gets a lot of attention all the way to our CEO and leadership team. We are hiring, we have data scientists on board, and we’re actively recruiting to anybody who’s listening, or knows anybody who’s interested. We’re absolutely actively recruiting people with those skills. They’re not easy to come by these days.
So, we are doing all types of correlations with the data. You can be thinking about very simple correlations of just raw data collection, but you can also think about unstructured data that we're collecting from social networks in our customer service department, etc. So, we put all the data in a data platform that we have that's based on the Hadoop file system, and then we use streaming mechanisms to be able to put the data in a data lake that enables us to look at it from all kinds of angles. We look at it through any possible filter that you may be thinking about.
We're also, in some cases, integrating with machine learning, or intelligent pro-communicative services engines. If you think about Microsoft, LUIS, Language-Understanding Intelligence Service, from Microsoft, we're now thinking about integrating with systems from IBM Watson, Salesforce Einstein, Google Deepmind, etc.
So, the fact that we have surrounded all our data, and all our capabilities with an API or an educational program or an interface, specifically to the technical [...] potentially a RESTful API, enables us to now interact with all those other systems. More specifically, we are interacting with the machine learning and cognitive science that are provided by those large players I mentioned earlier.
Michael Krigsman: That’s interesting. So, you’re aggregating this huge amount of data, more than 650 million transactions every single day, and it sounds like you’re in the middle of a strategic project for you to think about what other platforms can you integrate with, and what is the best way of taking advantage of that data?
Eli Rosner: That is correct. Yeah, just to be accurate, Michael, we are running through our systems almost 650 million transactions per day. We don't collect all our data in our systems. It really depends on the arrangement that we have with the customers concerning what they allow us to obtain, or not. The integration with other ecosystems is a crucial element of our strategy here, where … I think a lot of companies have recognized that the platform-based business model is getting stronger over the last several years.
As a matter of fact, if you look at the large market-cap companies, 100% of them are all practically platform players, and being a platform player based on a platform-based business model means that you’re opening up your systems and enabling others to co-create value together with you. So, that’s one of the key strategic pivots that Bill Nuti’s taking the company towards: positioning the company from a leader in omnichannel solutions, to a leader in omnichannel, platform-based business model solutions.
Michael Krigsman: Yeah, that's fascinating. And, it's true. The essence of a platform is making something of value available to others so that there is this shared creation of value. Maybe, can you talk more about that? I think this is just such a fundamentally important point, and it's a point to which not every software company, and not every company gets. We still have a lot of businesses that are focused on, you know, "This is our island, and we're going to protect the border." You know, I don't want to be political here at all. So let's just … [Laughter] … Let's not talk about borders and walls, so maybe just talk about ecosystems and platforms.
Eli Rosner: [Laughter] That's easier these days. So look, you're right. There's a significant shift in the industries around us from a pipe-type of a business model, to a platform business model; and let me expand on what that means: A "pipe" business model means you're manufacturing, you're distributing, consuming, you're servicing, done. So, it's very transactional in nature. If you look at the large marketing companies around us, and you can name companies; everyone knows Google, and Apple, and Facebook, and all those; AirBnB and Uber; but, you can also think about Nike, who developed a complete platform. Here is a manufacturer of sports equipment that is now penetrating and working with the health ecosystem, right? Now they're providing and integrating with all kinds of health systems.
So, the big difference is that with a platform-based business model, you bring in producers of content, and consumers of content, into a place where you create a pull, you create a magnet, because you have a lot of data to bring them in. It’s interesting for them to join, you facilitate the interactions between them, and eventually, they transact. They form a transaction.
The role of the producer and the consumer interchanges even during the transaction. Let me give you an example: Uber. As a driver, you are producing a service. As a passenger, you're consuming the service. When you get the right [point] when you're done, you're now producing content, which is feedback on the driver, etc. and the driver becomes the consumer of this data. What Uber did; Uber doesn't have any cars, right? And they don't actually produce much content, but all they do is bring content from producers and consumers, and enable them to collect together to co-create value on the platform. And you can see it with … You know, Facebook doesn't create any content. We create the content. We're producers of content as well as consumers. Think about AirBnB: same business model.
So, as we reflect on that shift from a pipes- to a platform-based business model, where you have the creative feedback loop between the participants on the platforms, the players on the platforms, this is what our customers are looking for today. So, we have to provide them with the capabilities to extend their systems to put down the barriers to entry to enable them to open their systems up to other partners, developer partners, and other ecosystems. This is so that they can play with everybody else and still provide a unique value, the relative competitive advantage, but they still can play and extend their reach to other ecosystems.
Michael Krigsman: I want to remind everybody that you are watching Episode #215 of CxOTalk, and we're speaking with Eli Rosner, who is the Chief Technology Officer at NCR. And right now, there is a tweet chat going on using the hashtag #cxotalk. And, you can, and I hope you do participate, and you can direct questions about any of this to Eli, and we'll try to answer your questions live right now.
So, Eli, you were talking about the bringing together of the buyers and the sellers to create value. So, can you give us some examples on your platform regarding the use of the data that you're providing, and the capabilities that your platform offers?
Eli Rosner: Sure! So, think about a consumer sitting in their living room, and they're using our mobile banking application. We have integrated with the sports systems, so you know there is an NFL game coming up. And, you get a notification on their mobile device that if you open a credit card account with a financial institution, you will now get a discount of 100 dollars of a large screen TV. So, here is an example of where NCR has a competitive edge in the sense that we're collecting data from three different verticals: retail, financial, and hospitality. We're unique in that sense, and by putting this data together and creating the correlations between them, we're providing a very robust service.
So, you go ahead and open the credit card account on your phone; you get a coupon that you can later on go to a retail store and redeem. As a matter of fact, we've just shown an excellent demo that integrates virtual reality capabilities to you in your living room, so all you do is put on the goggles, and you go into a virtual sales room. A salesperson on the other end is picking up a set of goggles, and now you're together in a virtual room looking at different types of TV's. You look at those TV's, you eventually place an order for the TV, and we're integrating with a delivery service, so you don't have to leave the comfort of your living room. The TV is delivered to your house.
Now, you're watching the game, the NFL game that you bought the TV for, or whatever. And then during the game, we see that your team is winning, or whatever, and we send you promotions to a specific restaurant, where you know you like to eat, and we send the same message to your friends who enable you. Our technology allows you to open a tab to a bunch of your friends, you open a tab from the comforts of your living room; you haven't left home yet; before you even meet them at the bar. And, you met them at the bar, or the restaurant, our technology there is used to collect all the data, the tab is open, everybody gets a QR code; everybody eats. And at the same time, we can also distribute promotions to all those participants that you invited to your open tab.
So you can see that I took you on a very simple use case of a person that sits in their living room; signs up for a promotion from a bank, for retail, for a TV, then purchasing it; you know, with integration with the sports system, etc. Then we're delivering it to your home, you going to a bar or restaurant, open a tab using our technology, and then we send you more promotions, etc., etc.
And then, as you're done, by the way, a couple of days later, as you use your mobile banking application and get a receipt that you spent $150 in a bar or restaurant, wherever that is. It's a clickable item; you can click and get a detailed account of the transactions of what you bought at the bar. So, let's say there's a type of hamburger or a beer that you like. You click the beer, and you say, "Where can I find that beer now around me?" By the way, we can send you promotions to a particular location where you can find that specific type of beer that you're looking for. And this is how we create the feedback loop, and putting data from all the three verticals into an interesting scenario use-case, and you can see how they think on things to be developed over time.
Michael Krigsman: Yeah, and all of the data that you're collecting feeds in, so over time, the entire thing becomes richer; and as you have more data sources, and more customers, the whole thing, the platform, becomes larger, which then serves all of your clients.
Eli Rosner: Exactly! What you just described is the pull. So if you think about "pull, facilitate, and match," which are the three activities that a platform provider needs to happen, and they have to create the pull for consumers and producers to want to come and play on the platform. They, later on, facilitate interactions between the producers and the consumers. Eventually, they find a match, and they enable you to transact between the producer and the consumers, and then they can change roles. The more data they have, the more people who want to use the platform, the more people use the platform, the better service you can provide because now you have access to more data. And that is the [...] that creates the power of the platform.
Michael Krigsman: Now, one thing that we haven't touched on too much, which I think is important in this: We've been talking a lot about the technology aspects of this, but again, NCR is a 130-year-old company. Anytime you have a company that is undertaking really such a dramatic change as you've been describing, it's never easy, and it requires cultural shift as well. And so, would you share with us some of the business experiences, the internal business experiences, and transformation experiences, and cultural [experiences], that you have been involved with over this last ten-year period?
Eli Rosner: Yeah. You know, there's a saying that culture eats strategy for breakfast, and it's true. You know, the technology aspects of what we're trying to do here are fascinating, very challenging; but at the same time, they're not the hardest part. The hard part is actually like what you're saying: It is the culture change. I call it the "DNA change" that has to happen within the company, and it has to do with A) opening yourself up to looking at what's going on. It's an outside-in type of thinking. Start with the customers' needs, start with what others are doing, benchmark yourself all the time.
The second component is regarding the stronger need and desire for innovation. So, we've established a process of design thinking at the company. We've trained hundreds of associates who are ready, and we will apply the training across the whole company. It's a very innovative process for creative design. The teams love it, the teams … You know, they're usually heads-down when implementing solutions. When you give them the environment and provide them with the tools to actually innovate, great things happen. You know, we're a company with a very deep heritage in innovation, but applying the design thinking process is a major cultural change that we're driving within the enterprise, all the way from Bill Nuti's level and down.
We are building a world-class headquarters in Atlanta, in Midtown, adjacent to Georgia Tech. We're going to move in at the end of the year 2018. We have two towers there. These are going to be state-of-the-art headquarters with anything you can imagine of restaurants, a gym, open space, recreation areas, whatever. Anything that anybody could ask for is there. Our proximity to Georgia Tech will enable us to attract and hire the right talent, and it's a very, very exciting move.
So, it's a performance-based culture, innovative, design thinking, outside-in thinking, benchmarking, and putting ourselves in a place where we can get excellent, very easy access to incredible talent.
Michael Krigsman: You mentioned that design thinking has become critical, and so I'm assuming that design thinking is a catalyst, in a sense, to help drive the kind of culture change that you're looking for. But at the same time, there's a little bit of a "Which comes first?" Because how do you create the cultural acceptance and understanding of the lessons that design thinking will bring inside the DNA of the company? That's a hard thing to do.
Eli Rosner: It’s a hard thing to do, I agree. You know, I found that the best way to achieve results in those situations is by showing people the art of the possible. So, there are different approaches to getting those initiatives done within the company. One says, “Let’s do a broad adoption of the whole process, and go all-out, and make it happen.” And the other one is more of an Agile-type of an approach, which is the methodology that we use here not just for development, but thinking about everything that we do. It’s all about being agile, failing fast, etc.
So, what I mean by that specifically with regards to design thinking: We took a very small team of people, and we said, “Let’s start it, and based on the outcome of the design thinking, we’re going to do a 90-day challenge.” So we put the design thinking process for two or three days, we went out, we validated with the customers ... And again, we’re talking about a very small thing. We’re talking about probably something in the neighborhood of a single scrum team; six, eight, at the most ten people. Those people go out into a mentation phase, and within two months, two to three months, we have a working proof-of-concept.
When people see the outcome, the video of that 90-day challenge, the excitement, and the word-of-mouth that they get from the other employees, it's like … It catches fire. It's just … I can tell you that in the beginning, we had to pull people to come into the training. Today, our waiting list could be six to nine months until you could get the training. And by the end of 2017, we will probably train another thousand employees on the design thinking process. It's very exciting, all the way from the top.
Michael Krigsman: We have an interesting question from Twitter, from Kate/Rabbit, so I hope I’m pronouncing that correctly. And, she says, “When you’re focused so heavily on the customer, how do you introduce change?”, changes, product changes, “into the mix?” Because, obviously there needs to be a balance between being customer-centric, and at the same time being innovation-centric coming from inside you. So, how do you balance that?
Eli Rosner: The cure to that is balance. Input to what we develop as a company, and it comes from anybody in the business, and any significant external source possible. We're absolutely innovating together with our customers. We're inviting them to all types of innovation events: hackathons, datathons, codeathons, whatever you want to call those. So, the voice of the customer is crucial to us. And, even as we go through our Agile development process, we invite our clients to participate in the design reviews of the products that we develop. So, that gives us the power to deliver a product that we know will have some market adoption. Now, I've got to tell you, there are many ideas that we play with, that we toy with, that don't get to an implementation eventually at the end, and it's okay for us. We learn from it.
For example, the virtual reality thing is not something that we're going to go to market in 2017 [with], as an example. Nevertheless, it opened people up to understand the art of the possible, of what can be done. And as our sales force has now gone out, and showing that NCR is a thought leader, and an innovative company, we can talk to them about what can be done with machine learning, with a recommendations engine, with chatbots, with artificial intelligence, with virtual and augmented reality. So we show that we're thinking about all of those things, applying them, and balancing our investment in innovation based on a framework of 70 - 20 - 10. So, 70% of what we invest will be applied to production in the next 12-18 months, 20% will follow a year later, and 10% is the dreaming stuff that's going to happen three to five years from now. But, we all know today with the pace of technology, you can't plan for the next five years. You've got to plan for the next two, three, four quarters with the pace of technology. We're investing in a very balanced approach.
Michael Krigsman: We have about five minutes left. So, you mentioned salespeople, and salespeople are going out to present this broader vision. But, regarding the cultural dimensions that were just talking about, sales seems to me a great one, and a challenging one, because if you have a sales force that historically sold very transactionally, they sold … "We can sell you this thing out of the price book, and that thing out of the price book," and it's essentially just a tool. And now, you're selling something that's broader, and that's more strategic. So, that requires the sales force to thinking differently, and that's just one department out of the company. So again, I'm still interested in how you undertake and make that change, and make that leap successfully across such a large corporation. You said you employ about thirty thousand people.
Eli Rosner: Yeah. That’s correct. It’s a very fair question, and I’m not going to sit here and tell you that we’re done with our transformation process. You know, the challenge that Bill Nuti and the leadership team took upon themselves ten years ago, eleven years ago, and now we’re in the last phase takes courage. And it’s a complete transformation of the company in all the groups. It’s sales, marketing, professional services, human resources, finance, technology, you name it. Product management solution management, everybody is changing.
You know, to support the sales organization in the transformation, we are putting people in leadership positions that understand what is it that you're trying to do, but I think the most important point is that we are right there with them in the field. So, my team, myself, and the leadership team are out-measured based on the number of interactions we have with customers, and me specifically as the leader of the technology, and the visionary from a technology perspective for the company, I visit customers a lot. I don't think there are two weeks where I don't visit one of the customers. Sometimes, it's for good reasons, sometimes we deal with crises, but we try to turn it into lemonade, so to speak. But, we're listening to the customers, we're right along the salespeople as they go out and sell.
We love going out with the sales team, showing off, and helping them. And as they hear us telling the story and the pitch about the company, they are trained during that process. And I got to tell you, a lot of people are stepping up, upgrading their skills, the leadership is encouraging it, and it’s happening. It’s very exciting to see it happening.
Michael Krigsman: So, it looks like the support, but it's more than support. It sounds like the leadership of the company takes this … That is one of your core, strategic priorities. And that's the glue that sort of propels it forward.
Eli Rosner: That is correct. Sales enablement is one of the top strategic enterprise business initiatives, driven all the way from the top, from Bill Nuti to our new president Mark Benjamin, and down to all the leadership there in the company.
Michael Krigsman: We have just about a minute left, and I’ll ask you as a final question: What advice do you have to others who might be faced with this kind of massive cultural and technological change that you’ve been describing?
Eli Rosner: I would say first have the courage to do it. Second, it's not all going to be rosy. Prepare yourself for some failures and stumbles along the way, but as we all know, what matters is not how many times you fall, but how many times you stand up. Be creative, keep an open mind, look at what's happening out there. I got to tell you; there are so many players, companies that are becoming truly successful around us. Learn from other people's experience, apply external experience where you can support people. Always assume positive intent, as you work with employees that are going through this transformation, assume positive intent; over-communicate, lead through a transformation. Leadership courage is what Bill Nuti had ten years ago, and that's why we're on the verge of such an exciting transformation we're going through.
Michael Krigsman: I love that. Assume positive intent. And you know, isn’t that in some way the essence of building a successful platform, because you’re sharing the wealth?
Eli Rosner: Exactly. Couldn’t say it better!
Michael Krigsman: Okay! Well, thank you so much! Eli Rosner, CTO of NCR. Thank you so much for being here, and sharing your experience with us!
Eli Rosner: Thanks so much for having me. It’s been a pleasure!
Michael Krigsman: Everybody, you have been watching Episode #215 of CxOTalk. We will be back next week. Please go to our facebook page, and "like" us! [Laughter] Have a great day, and we'll see you soon. Bye-bye!