What are the elements of being a transformation CIO? Two prominent Chief Information Officers share their experience and advice.

Nick Costides is the President of Information Technology at UPS where he has global responsibility for the company’s industry-leading portfolio of technologies that power UPS customers’ supply chains. In this role, he heads the technology organizations that support UPS Supply Chain, International, and Subsidiary Technology organizations. He also oversees the /the office of the CIO and the company’s IT Strategy Group. Additionally, Nick leads UPS’s Technology Transformation program and is a member of the company’s Venture Investment, Information Security, Enterprise Risk, and Technology Governance Committees.

Previously, Nick was President of UPS’s Operations Technology Group responsible for the planning, sortation and delivery technologies that power the UPS Global Smart Logistics Network. Nick also served as President Transportation Technology responsible for the technology organizations that support UPS Airlines and UPS’s Worldport mega-hub, and he was President of UPS’s Customer Technology Group where he was responsible for all customer-facing solutions such as UPS MyChoice and ups.com.

Jay Ferro is the Chief Information Officer for Quikrete, the largest manufacturer of packaged concrete in the United States. Previously, he served as CIO for a number of other companies including Earthlink, the American Cancer Society and AIG.

Known as a thought leader in the information technology arena, Ferro is a frequent guest speaker and panelist, both in Atlanta and nationwide. In recognition of his accomplishments, Ferro was selected as as one of ComputerWorld’s 2015 100 IT Leaders, as well as Georgia CIO of the Year in 2011, and is currently serving as chair for the Georgia CIO Leadership Association. Ferro was also selected to join Leadership Atlanta’s Class of 2015 and participate in a rigorous year-long leadership development program alongside other prominent Atlanta leaders. His commitment and dedication to community involvement is evidenced by the time and energy he contributes. In addition to his work with Priscilla’s Promise, in 2011, he was elected to the board of directors for TechBridge, an Atlanta-based nonprofit organization that helps other nonprofits use technology to improve their capability to serve the community.

Transcript

Michael Krigsman: The topic of transformational CIO is one we have discussed at length on CXOTalk because it's just so important. Nick Costides is President of Information Technology at UPS. Hey, Nick, how are you?

Nick Costides: Hey, Michael. Thanks for having me today. Just for your audience, as President of Information Technology, I have to tell you I'm privileged to be a member of a world-class IT team of 5,700 IT professionals around the world.

I hope, today, through our conversation, I'll be able to tell you our story of innovation and our technology journey from a fledgling startup that started in 1907, in Seattle, Washington, to what's become the global brand of UPS that you know today that delivers 22 million packages each and every day in 220 countries and territories. We power all of that with something we call the Smart Logistics Network, and I'm sure we'll go through that as we get through the conversation.

Michael Krigsman: Our second guest is Jay Ferro. He's an old hand here at CXOTalk. Jay, you're CIO of Quikrete. Tell us about Quikrete. How are you?

Jay Ferro: I'm doing well, Michael. Great to see you. Hope you're staying safe and healthy. Nick, good to see you too, my friend.

I am. I'm the CIO for the Quikrete Companies. We are the largest manufacturer of packaged concrete and cement mixes in North America with hundreds of locations all across North and South America, Puerto Rico, Canada, et cetera. Great to be here and great to be with you both.

Michael Krigsman: Nick, we use this phrase "transformational CIO." I'm afraid it's kind of becoming a little bit of a buzzword, so break it down for us. What do we mean by that?

Nick Costides: At UPS, we're executing a corporate transformation in support of our growth strategy. We're changing our processes, our organizational structures to become more agile, not just in IT, but across our lines of business. We're making significant investments in technology to grow this business.

When I think about transformational IT leaders, I think about how we're positioning our IT leaders at UPS today. Our IT leaders are not just technologists. They're business leaders who have a seat at the table, which allows us to lead innovation of new technology-enabled products.

One example, I know you just mentioned you're a UPS customer. UPS My Choice, that is a technology-enabled solution that today provides 68 million My Choice members the ability to control their delivery experience for their e-commerce shipments in the palm of their hands. From my perspective, that transformational leader is one that is really a business leader first and a technologist second.

Jay Ferro: I agree. I think it always starts with the business and what the business goals are. I think Nick hit the nail on the head. World-class CIOs are business leaders first and technologists second.

I think transformation at the CIO level begins with the leader, herself or himself. It's a mindset of continual improvement. It's a mindset of always looking for opportunities while also balancing operational responsibilities as well.

I think Nick said it right. It's truly understanding what your organization's goals are, what is important to your customers, and recognizing that technology is not the reason you exist. Your customers are your lifeblood. They are the reason you exist – and your employees. Technology is an enabler and a very powerful one of all of that, so I couldn't agree more.

Michael Krigsman: Is the reference point of customers the kind of touchstone of being a transformational CIO?

Jay Ferro: I think, if you're not starting with them then you're missing a real opportunity. I think the best CIOs in the world put themselves in their customers' shoes. I really do.

Look, that means your colleagues as well, right? I'm sure Nick has spent plenty of time in a lot of different UPS locations all around the world. I've spent a lot of time in a number of our locations, understanding exactly how we produce our product, what our employees go through day-to-day, how IT enables or doesn't, in many cases, and how we can get better.

But also, what is important to our customers? Every organization I've been part of, we've done day, week, month in the life of where we eat our own cooking. To me, that's the way that IT not only builds credibility but comes up with innovative solutions because we truly are experiencing what it's like to be a customer.

Always having that channel open with your customers so that they can give you 100% transparent feedback about how you're doing. A CIO leader has got to be made of pretty stern stuff. You have to be able to take feedback really, really well and not be personally insulted by it, I guess.

Nick Costides: The reality is, you have to be business sentiment, as Jay just said. You've guessed that's our strategy and very customer intimate. You always have to be listening.

Jay Ferro: That's right.

Nick Costides: Remember, we're not all building technology for technology's sake. We're building it to solve problems, to create products that our customers desire. Listening is going to be a very critical skill that that next-generation transformational leader needs to have.

Michael Krigsman: We have a question on LinkedIn. Sergio Quiroz asks, "Is business transformation now mandatory?"

Nick Costides: It's table stakes, right? The markets we operate, the technology landscape is changing at a dramatic rate, at a pace that many of us have never seen before. All of us need to kind of look ahead to understand how we can disrupt our industries, disrupt our business models before we become disrupted.

I have to tell you, and we'll talk about this throughout this conversation today, but the digitization of our businesses, the automation of our businesses is going to be critical for businesses to survive going forward. At UPS, as I mentioned earlier, we've got a transformation going on that's informing our strategy for growth.

That strategy for growth, the underpinning for it is what we call the Smart Logistics Network, which is not only really cool, customer-facing technology, but also operational technologies like our Orion platform that are allowing us to do things like save 100 million miles a year in drivers on the road and to reduce carbon emissions, greenhouse emissions by 100,000 cubic meters. It's just amazing what you need to do here, but you have to be transforming at this point because, if you don't transform, you will be disrupted.

Jay Ferro: I agree 100%. You need to be operating like you're being chased 24/7/365. Even if you're not, you probably are. You're just not aware of it.

You always have to be pointing the finger inward and have your finger on the pulse of what your customers are asking for. Not only that, getting good at anticipating the questions that they haven't even asked yet.

We all know the phrase that Gretzky coined, "I don't skate to where the puck is. I skate to where the puck is going to be." That's what we're called to do as business leaders. We have to be able to anticipate and extrapolate from what we're hearing from our customers and what our competitors are doing to stay one, two, five, hopefully, ten steps ahead.

We have got to constantly be transforming. That transformation doesn't always have to be cold fusion. It can be, to Nick's point, digitization of manual processes. It can be constantly pointing a finger and saying, "We need to pay down technical debt."

It's just this transformational mindset constantly of how do we, as an organization, get better, faster, higher quality, service our customers better, think of ideas before our competitors do. Yeah, I think you're right, Nick. I think it's table stakes. I think that's well said.

Nick Costides: The speed of the leader sets the pace for the pack, right?

Jay Ferro: Yep.

Nick Costides: The companies that are out there on the edge disrupting, they're creating products and services that people didn't think they needed, right?

Jay Ferro: Yeah.

Nick Costides: We talked about My Choice earlier, the first in industry capability for consumers to control the delivery experience. Earlier this year, we deployed a first in industry solution, My Choice for Business, to allow businesses to control their experiences through the supply chain.

At UPS, since 1907, we've always seen ahead of the curve, right? We started as a bicycle messenger delivery service and, out of the gate, we were disrupted by the telephone.

In our culture, in our DNA is that spirit of transformation, that spirit of entrepreneurial leadership. We've constantly transformed and adjusted to changing conditions to become the company that we are today.

Michael Krigsman: We have another question on LinkedIn from Simone Jo Moore makes the comment, "Doesn't transformation only happen because you are being disrupted?"

Jay Ferro: I don't think so. I feel like it can only happen if you are being disrupted. I feel like a CIO or an organization has got to be almost self-transforming constantly. To me, that's just a standard state of being in 2020. To Nick's point, the market, the technology, our customers, what they want is evolving constantly.

Yeah, I think fear of disruption or being disrupted can be an impetus for transformation. No doubt about that. But I feel like you also have to be transforming yourself without that external influence where you're constantly challenging yourself. I think it can be both.

Nick Costides: I was just going to comment on Jay here. Look, if you're reacting to a disruption—

Jay Ferro: That's right.

Nick Costides: –it's already too late. You're already on the downside of that hype curve.

Michael Krigsman: Nick, we have a comment on Twitter relating to all of this from Arsalan Khan. He makes the comment that digital transformation requires organizational change at every level of the organization. Really, therefore, we're talking about a cultural change as opposed to technology.

Jay Ferro: Oh, absolutely. There is no digital transformation without cultural transformation – period, full stop. Your ability to influence the organization is severely limited if you don't have the ability to influence the culture. I think the CIO is in a perfect role, or the president of IT, in Nick's case, is in a perfect role to be able to influence that culture through delivery, through improvement, through high-quality products, that kind of thing.

Everybody loves a winner. Michael, you and I have talked about this before where winning cures all ills. It's amazing how, when you start winning and winning as a CIO when you deliver high-quality products on time and you're constantly delighting your customers and the trains are running on time and all of those things. It's amazing how much easier things get when you are trying to push the envelope and maybe change the culture. I don't know that there's a better role than a senior IT leader like Nick or me or all of the other great senior leaders that are out there.

Nick Costides: I think we talk about strategies in silos, right? We talk about the digital strategy. We talk about the business strategy.

Jay Ferro: That's right.

Nick Costides: At UPS, we just look at it as the strategy.

Jay Ferro: Right.

Nick Costides: I think that's very important. You get the cultural change and you get the organization to align around the priorities.

Jay Ferro: Yeah.

Nick Costides: As we talked about earlier, and as Jay mentioned, with the right leader that has the seat at the table that can speak in business terms or with their peers, they can really drive and really move the puck forward unlike any other function. I really believe that the IT leaders in our companies today have probably the largest view, if you will, of the scope and breadth of the organization because they touch every product, they touch every service, they touch where our customer is at, and they touch every internal function.

Jay Ferro: I agree. They have to recognize that, though, and be proactive about engaging and learning. You cannot wait to be knighted. You can't wait to be told, "Gosh, you CIOs or presidents of IT or CTOs are so great."

You have got to build that culture within IT that you're truly seeking to understand the value chain within your company and bringing solutions to the table. You have that vantage point but you've got to take advantage of it and be proactive.

Michael Krigsman: Nick, are you primarily a businessperson or a technologist?

Nick Costides: I think a successful IT leader today has to be both. In order to have that seat at the table that I spoke about earlier, you have to be business intimate, you have to be customer intimate, you need to think about how you and your technology function are going to help drive top-line, how you're going to improve margins. Right? I mean I think that's critical. By the way, when that IT leader is speaking the language of business, that's what really drives agility because we're all speaking the same language, we're all moving to the same goal.

Jay Ferro: That might not happen overnight. Nick is spot on. It's incumbent on us as IT not just in our roles but pushing that down through the entire IT organization and making sure they understand the business role that they play within the organization and educating them on the impact that IT makes throughout the company and with the customer.

It might not happen overnight. In every company, you're going to get people who are just, "Well, you guys are the IT guys, right? You fix computers. You do some things." I mean that still exists in 2020. We know it does in large companies or companies that have a lot of tenure.

You can wear them down over time through delivery and, to Nick's point, speaking their language but truly becoming intimate. I love that term, Nick, business intimate. That earns credibility.

Nick Costides: Solution delivery is a team sport, right?

Jay Ferro: Mm-hmm.

Nick Costides: I don't think we look at technology or systems as an IT project. I'll give you an example. A few weeks ago, in China, we launched our WeChat presence. It's a great, interactive technology. In China, that's the way you do business. That's the way you interact for commerce.

That product launch would not be successful if our China marketing team did not develop a marketing campaign specific to that market, reaching out to consumers in Toutiao and Baidu as channels to inform them of the offering and the solution that we have in the marketplace.

Michael Krigsman: We have a question from LinkedIn from Scott Padgett who is from the Department of Defense. He says, "As part of your technical strategic roadmaps, how are you employing artificial intelligence, machine learning into your technology?"

Nick Costides: I talk about the smart logistics network. The smart logistics network is informed by data.

We have built, at UPS, some machine learning and analytics practice. We have data scientists in a variety of business units. We bring together a lot of data about not only our business, but our customer's businesses. Those solutions really provide us insights.

We announced, about a year or so ago, a solution that we call HeAT. It's an analytics machine learning platform that consumes, during our peak holiday season, literally several billion events a day. We use that to allow us to inform how we're going to tweak and change our operation on a daily basis.

The use of data, the use of machine learning is critical if you're going to really be able to want to think about how to innovate on the edge and also change your business right in front of your eyes.

Jay Ferro: Could you just change it so that you can all leave my good wine on my front porch and not have to have an adult sign for it, please? No, I'm just kidding.

Michael Krigsman: [Laughter]

Jay Ferro: [Laughter]

Michael Krigsman: I actually really like that feature. The two features I like is the fact that I can sign the authorization in advance and also the Follow My Package, so you can see.

Jay Ferro: Isn't that great?

Michael Krigsman: Yes.

Jay Ferro: My kids are amazed by that. I said, "Well, it's on its way. It should be there in the next 15 to 30 minutes. The truck is just a couple of miles away."

They're like, "How do you know that?"

I'm like, "How do I know that? Why don't you know that? You're 19 years old. Get out there and look." [Laughter]

Michael Krigsman: [Laughter] Nick, how do you create? Let's just use that as an example, that follows the truck. How do you create that? What's the planning that goes into it, the kind of technology, whatever you're comfortable sharing?

Nick Costides: Getting that delivery experience that you just talked about is free by just downloading our app. I will tell you that, at UPS, we've adopted not only an agile methodology and agile tools, but an agile mindset. As we talked about earlier, we listen to our customers to determine what they need to power their businesses.

With that in mind, the first release of Follow My Delivery was a minimal viable product. We launched it to a limited market. We received feedback from our customers and we quickly turned around sprints to iterate features in literally a handful of months to become the product that you see today.

Now, I'm really glad that you guys enjoy our service because, at this time in the U.S., none of our competitors can match this service offering. Really, thank you very much for bringing it up.

Jay Ferro: Do you take that same mindset, that same agile mindset for internal projects as well? Does that just permeate UPS? I love it and I'm a big proponent of that same mindset.

Look. Let's put an MVP out there. Let's put a prototype, proof of concept. Get people to react to it versus opine on it for six months, which to me is a glorified paper exercise. Let's get something out there for people to react to and then iterate, iterate, iterate. Do you take that same approach with all of your major projects?

Nick Costides: There are projects that are applicable for agile. As part of our IT transformation, we moved our organizations to Agile and DevOps, and that includes the business partners that work with us. Embedded in the product teams, the product owner is truly the product owner.

Everything that we do is based on that agile mindset, but I'll give you a couple of exceptions. If you're going to build or deploy a brand new general ledger in your company, you're probably going to follow a waterfall methodology, right?

Jay Ferro: Yeah.

Nick Costides: To get that right but, yeah, everything we do, we're all speaking that language now of minimal viable product. What's more important is making sure that those releases create value. This isn't about technology for technology's sake.

Jay Ferro: Right.

Nick Costides: Agility for agility's sake. It's about creating value for your customers and about creating value for your shareholders.

Michael Krigsman: We have another question on Twitter, again from Arsalan Khan, that says, "Nick's background is in enterprise architecture. How does that background help you in your dealings with other business executives?"

Nick Costides: In general, an IT leader needs to be that savvy businessperson that's, as we said, business intimate, that understands the business, the operating model. Everyone in IT has to be a savvy technologist, right? That's what the role is all about.

I would tell you that, here at UPS, our technology teams across the board wear both of those hats. We spend a lot of time ensuring that our teams remain contemporary, that they invest in training so that they can be on the leading edge of new and enabling technologies.

Now, our job is to bring forward emerging technologies, to inform the business about what's possible to solve problems. The one thing that we don't want to do is react to somebody reading something on an airplane magazine and saying—

Jay Ferro: iMagazine, baby. Come on now.

Nick Costides: Yeah. Yeah, here's a cool widget. No, I think we have a very good, disciplined approach and process here. Again, I think it's that trust that's been brought together with the folks here at UPS in terms of the fact that IT is not a silo.

It's not the technology gurus that sit in the back room that only comes out to fix your PC. They're sitting there around the table with you at the very beginning when you're thinking about a new product, a new concept, a new strategy. We're there, arm-in-arm, all the way through the journey.

Michael Krigsman: We have an excellent, interesting question from Joel White on LinkedIn. He says, "What has been the biggest challenge for UPS during this pandemic and what do you think the new normal is going to look like?"

Nick Costides: First and foremost, the safety and health of our employees is extremely important as we care about each other, our families, the communities we live and work in. As you may know, UPS has been designated by governments, of countries around the world as a critical infrastructure business.

Now, we have both a privilege and a responsibility to continue to safely work during this challenging period. We continue to operate in line with the demand and the needs of our customers, except where there are limits due to government restrictions.

The situation, as everyone knows, is changing daily. Our smart logistics network is really enabling us to adjust and deploy contingency plans to safely meet our service commitments as conditions on the ground permit.

I'll tell you a little bit about IT. I really appreciate the question because it allows me a moment to recognize our IT teams around the world and the great work they've done during this pandemic.

First and foremost, all of our IT operations and all of our solutions that are in the delivery pipeline continue to proceed as normal. In parallel, our IT teams have had to deliver system changes and enhancements in hours and days to customer-facing technologies, operational technologies, to react to changing market conditions on the ground.

The BCP plans and the proactive investments we made in IT infrastructure prior to the crisis allowed us to move tens of thousands of our employees around the world to remote workers with minimal disruption. I'm truly proud of the response of our IT teams and how we've been able to balance the priorities that are going to grow our company and the tactics that are required to react to this crisis.

Jay Ferro: Nick, how has this crisis, if at all, changed your leadership style? Has it? I would argue that it reveals, crisis reveals leaders. It doesn't change them; it reveals them. What do you say to that?

Nick Costides: You have to be more connected. We're all working remotely. We're taking these calls today remotely outside of our offices, and so staying connected is important.

I start the day every morning with a standup with my direct reports at 7:30 every morning. We are sending out a weekly communication profiling projects, profiling how we're responding to the crisis. We're doing regular townhalls to keep our people informed and connected.

By the way, we're having a little bit of fun. Some of my directs, on a Friday night, will bring their teams together and do a networking event. As a matter of fact, Michael, you may or may not know this, but Jay and I serve on the advisory board of a technology organization here in Atlanta.

Jay Ferro: Yeah.

Nick Costides: Every Tuesday, trying to keep that organization's mission together, we all meet on Tuesday nights in a virtual networking event. I think, Jay, you're right. It's taking a different type of leadership style and you really have to keep being connected. You have to really communicate and you've got to communicate and be transparent and honest.

I think, as a company, we've done a really good job with that, not only in IT or in the workgroups that I have the privilege to coordinate here, but really across the board as a company. We have 495,000 people that are at work each and every day moving PPE, moving test kits, supporting the reopening in various markets, and communicating and getting to understand the situation that we're facing is really rallying the troops.

I'm not going to say it's an IT thing. I'm not going to say it's an IT leadership thing. I'm going to say we've got a great corporate culture here at UPS and that culture is shining right now.

Michael Krigsman: What does that say about the nature of the work that you do and your focus and where you place your priorities?

Nick Costides: At UPS, technology is weaved into the fabric of everything we do. As we talked throughout this conversation this morning about things like My Choice, Follow My Delivery, the Orion platform, technology is on the forefront.

We are digitizing a lot of our processes today. We're automating a lot of our processes really to help make the jobs our people do easier and simpler. Automation and digitization are top of mind and, as I mentioned earlier, it's not a technology strategy; it's a strategic imperative.

Michael Krigsman: We have another question from Twitter and again from Arsalan Khan who says, "He's getting the feeling that UPS is a data company that happens to be in the delivery business gathering data from the supply chain all the way to providing data to customers."

Nick Costides: We like to say that we are a technology company and that we believe that the smart logistics network and, you know, what we call the UPS Cloud, our suite of APIs that allow retailers and etailers to integrate with UPS services is where the power is at.

We have a lot of data, but we use that data to improve our customers' experience and to inform our product strategy. We're not in the data selling business.

We are in the physical world. For 113 years, UPS has been that trusted provider in that Pullman brown uniform that knocks on your door, that excites your children.

In the digital world, we also have that same responsibility. I have to tell you, in the digital world, we take information security and privacy very seriously. When we talk about our IT priorities here at UPS, make no bones about it. We can talk about innovation and great products and cool technologies. We always start with information security.

Jay Ferro: Always.

Nick Costides: Protecting, always. You have to protect your customers' data and we use the data in the ways that are really purposefully focused on improving their experience and really helping to optimize our operations for our customers.

Michael Krigsman: Jay, this notion of the information technology leader as customer experience leader, any thoughts on that one?

Jay Ferro: I feel like we play a critical role as customer experience leader. I love – nothing energizes me more than visiting our plants, talking to our customers, seeing our product on the shelves, et cetera, and understanding IT's role in that value chain and how we can get better.

Even on a smaller scale behind the scenes, customer experience, when I think about my colleagues in our divisional or corporate offices. How do we make their lives easier? How do we remove friction so that they can better service our customers? All of those things.

At this point, if you're not considering yourself, when you're a senior IT leader, as a customer experience leader, you're missing a significant opportunity and it could have severe consequences. It's not about bits and bytes and feeds and speeds. Those are table stakes. We all know we have to do it. They're very, very important, but it all starts with the customer.

Michael Krigsman: Are there CIOs out there who are still focused on feeds and speeds?

Jay Ferro: Oh, yeah. I wish there weren't. I wish there weren't.

Now, look. We all attend a lot of events. I know Nick has seen them. I think that number is shrinking, but we've all been at events where CIOs are hyper-focused on the how and not the why and the what.

We have to be good at all of it, by the way. I'm not trying to absolve us of being good technologists. We have to be good technologists. But if you're expecting to get a seat at the table because you can regale people with tales of blinking lights and boxes and wires, then you're missing a big opportunity and, chances are, you're not going to get that seat.

Unfortunately, yeah, I think there are still some folks who do that. That, "Hey, the trains are running on time. That's what I'm here to do."

Nick Costides: But there's a shift. Right, Jay?

Jay Ferro: Right.

Nick Costides: I think we're starting to see it. In the old days, most IT leaders, the majority of IT leaders were the technology guru that nobody understood.

Jay Ferro:
 

Right.

Nick Costides:
 

I think, today, you have to transform yourself because if you're not sitting at the table, you're not leading; you're following. You're an order-taker, right?

Jay Ferro: That's exactly right.

Nick Costides: You don't want to be the order-taker. You want to be sitting at the head of the table helping to drive that corporate strategy, helping to drive those technology-enabled service offerings like the My Choice and the Follow My Deliver that we spoke about earlier.

Jay Ferro: Yep. Well, we have to be complete CIOs, right? We have to be complete CIO leaders.

There is no question to me about, are you an operational CIO or are you transformational CIO? You're a CIO. To me, the role by definition means you have to do both.

Yes, we have to keep trains running on time. Yes, email has to flow. Data has to flow. Systems have to stay up. There has to be availability, resiliency, disaster recovery, data security. All of those things have to happen, but we also have to be transformative and innovative leaders as well.

If you're thinking about the role of the CIO—and not you, but some people do—as two different types of roles, it should be, in an ideal world, one role. That's it. You have to do both if you want to be a world-class CIO.

Michael Krigsman: We have another comment on LinkedIn and again from Samone Jo Moore who says she's still struggling to get some organizations to answer the question of how data and security are incorporated into their knowledge management strategy on a larger scale, not just helpdesk articles. Does UPS have a view on this?

Nick Costides: We do. Security and the security topic is something that starts at the board level at UPS. My boss, who is the chief engineering and information office and our CISO report regularly on our security posture to the board of directors.

We have an information security and privacy committee that is not an IT committee. It's a committee made up of the business unit heads across the organization. We've weaved the security message, the privacy message across the organization.

It's been a journey. In the early days of information security, a lot of people didn't get it. But with the incidents that have occurred in industry over the past few years, and seeing the impact it's had on brands, to see the impact it's had on topline, to see the impact it's had on margins, it's easy to have a conversation with your peers about information security and why it's important at UPS – very easy here today. Much easier than it was five years ago, seven years ago.

Michael Krigsman: How does somebody break through all of your various defenses in order to get to you?

Jay Ferro: In general, I think most markets are the same. It's a relationship business. Thousands of emails, phone calls, LinkedIn requests, et cetera. You're being bombarded with requests and magic widgets and everything to save your business.

You've got to be real crisp with your message. Cold calling, cold emails, at least for me, and I'm sure with Nick too, you've got a near-zero percent chance of that capturing my attention.

If you go to where CIOs or senior IT leaders are and build relationships, I'm doing business today with people who shook my hand and, in today's day and age, maybe bumped elbows—hopefully, we can all get back together in person—but took the time to build relationships, understand my business challenges, and played the long game. Unfortunately, we live in kind of a, "What have you done for me lately?" cold call, ROI, instant gratification kind of world.

I'm doing business today, and I'm sure you are too, Nick, and I'd love to hear it. You're doing business with people today, probably, that were willing to play the long game, build those relationships over time, be there when you needed them, and offer value.

Jay Ferro: A couple of years ago, in one of these forums that I spoke at, the same question came up.

Jay Ferro: Always, yeah.

Nick Costides: I gave the same response. About three months later, I was at an IT networking event. A woman approached me and said, "I was at your talk three months ago. I got your message and I waited until this moment to give you my elevator speech."

I've got to tell you something. It impressed me so that I took a meeting with her leadership team. We brought the product in to do a proof of concept and take a look at it, but she played the long game, as Jay said.

Michael Krigsman: Let's finish up with this idea of trust. That's a great way, actually, to finish up from what we were just talking about.

The idea that IT leaders must be trusted by the organization and by customers, how do you create trust and what advice do each of you have for creating that sense of trust and confidence among these stakeholder groups?

Nick Costides: First, it does start by being part of the team, getting that seat at the table, being engaged in the dialog, being side-by-side with your customer and solving your customer's problem. Being side-by-side with your peer in your organization helping them to work through what their strategy for growth is. If you're shoulder-to-shoulder with your customer, if you're shoulder-to-shoulder with your peer, you're in it together.

In a lot of organizations, you hear the term, and this is a term that we don't really use at UPS anymore. We used to hear IT people talk about "the business."

Jay Ferro: Yeah.

Nick Costides: Frankly, in my mind, anyway, there isn't IT; there isn't the business. We're all the business. We're all in it together.

In a company like Quikrete and a company like UPS, hey, we're trying to grow value for our shareholders, our customers, our employees. We really want to grow topline. We want to improve those margins, so we're in it together. Being at that table, not being isolated in the back room, I think is critical.

Jay Ferro: I agree. I think that's really well said. I think trust begins with those relationships that Nick is talking about. It also includes integrity, doing what you say you're going to do, and being a transparent leader.

To me, nothing builds trust better than when IT screws ups, and we screw up, and that you own it. You've heard me say this, Michael, that if the baby is ugly, we've got to call the baby ugly, but we have to follow it up with a plan on how we're going to fix it.

When you can look somebody in the eye and say, "Look. That should not have happened. I'm embarrassed that it did."

Now, don't get me wrong. I'm not talking about flogging yourself daily about how terrible you are. I'm also talking about celebrating victories, et cetera. But being very transparent and taking that ownership, that builds trust. It does. That transparency in everything that you do builds trust and then following it up with action versus just words.

Michael Krigsman: On CXOTalk, we spoke with a guy named Joel Peterson. He's the chairman of JetBlue. He emphasized the goal of his term now "solving for fairness" in business dealings as opposed to one side take everything – solving for fairness. Any thoughts on that?

Nick Costides: As a global company that has millions of customers, everyone on the other side of the equation from us is a potential UPS customer. I always start every meeting with a new partner and say, "Hey, look. We're all in business together." If there's no value proposition in what you're offering, I don't want you to waste your time. I don't want you to do a proof of concept. You probably need to pivot to another customer.

I think you have to put yourself in everybody else's shoes and recognize that we're all going through the same thing. We're selling to customers. They're looking for our services.

People are selling to us, so I do think that he's right. We have to treat everybody like we want to be treated. It's the Golden Rule. I think if you bring the Golden Rule to your corporation and you can sleep at night because you have high ethics, what more can you ask for?

Jay Ferro: I agree. We have to play the long game too. If you want to have true partner relationships versus vendor relationships, I think there has to be a win-win.

You can grind them into the ground when you're a company of UPS's size or even Quikrete's size over a penny. Certainly, it's part of our job to get the best value that we can for our organizations. I'm not suggesting we should never do that. But if you want a long-term partner who is going to flex with you and adapt and grow, it has to be a true partnership and relationship and a win-win.

Michael Krigsman: We've been speaking with Nick Costides, President of Information Technology at UPS. Nick, thank you very much for being with us today.

Nick Costides: Michael, thank you for having us. We really appreciate being able to tell the UPS story.

Michael Krigsman: Jay Ferro, Chief Information Officer at Quikrete, welcome back, and thanks again for taking time to be with us.

Jay Ferro: Thank you, Michael, for having me. Nick, great to see you, my friend.

Michael Krigsman: Everybody, thank you so much for watching. Check out CXOTalk.com. Be sure to subscribe on YouTube and subscribe to our newsletter. Hit the subscribe button at the top of the page.

Take care, everybody. Stay safe. Stay healthy. We'll see you soon. Bye-bye.

Michael Krigsman: The topic of transformational CIO is one we have discussed at length on CXOTalk because it's just so important. Nick Costides is President of Information Technology at UPS. Hey, Nick, how are you?

Nick Costides: Hey, Michael. Thanks for having me today. Just for your audience, as President of Information Technology, I have to tell you I'm privileged to be a member of a world-class IT team of 5,700 IT professionals around the world.

I hope, today, through our conversation, I'll be able to tell you our story of innovation and our technology journey from a fledgling startup that started in 1907, in Seattle, Washington, to what's become the global brand of UPS that you know today that delivers 22 million packages each and every day in 220 countries and territories. We power all of that with something we call the Smart Logistics Network, and I'm sure we'll go through that as we get through the conversation.

Michael Krigsman: Our second guest is Jay Ferro. He's an old hand here at CXOTalk. Jay, you're CIO of Quikrete. Tell us about Quikrete. How are you?

Jay Ferro: I'm doing well, Michael. Great to see you. Hope you're staying safe and healthy. Nick, good to see you too, my friend.

I am. I'm the CIO for the Quikrete Companies. We are the largest manufacturer of packaged concrete and cement mixes in North America with hundreds of locations all across North and South America, Puerto Rico, Canada, et cetera. Great to be here and great to be with you both.

Michael Krigsman: Nick, we use this phrase "transformational CIO." I'm afraid it's kind of becoming a little bit of a buzzword, so break it down for us. What do we mean by that?

Nick Costides: At UPS, we're executing a corporate transformation in support of our growth strategy. We're changing our processes, our organizational structures to become more agile, not just in IT, but across our lines of business. We're making significant investments in technology to grow this business.

When I think about transformational IT leaders, I think about how we're positioning our IT leaders at UPS today. Our IT leaders are not just technologists. They're business leaders who have a seat at the table, which allows us to lead innovation of new technology-enabled products.

One example, I know you just mentioned you're a UPS customer. UPS My Choice, that is a technology-enabled solution that today provides 68 million My Choice members the ability to control their delivery experience for their e-commerce shipments in the palm of their hands. From my perspective, that transformational leader is one that is really a business leader first and a technologist second.

Jay Ferro: I agree. I think it always starts with the business and what the business goals are. I think Nick hit the nail on the head. World-class CIOs are business leaders first and technologists second.

I think transformation at the CIO level begins with the leader, herself or himself. It's a mindset of continual improvement. It's a mindset of always looking for opportunities while also balancing operational responsibilities as well.

I think Nick said it right. It's truly understanding what your organization's goals are, what is important to your customers, and recognizing that technology is not the reason you exist. Your customers are your lifeblood. They are the reason you exist – and your employees. Technology is an enabler and a very powerful one of all of that, so I couldn't agree more.

Michael Krigsman: Is the reference point of customers the kind of touchstone of being a transformational CIO?

Jay Ferro: I think, if you're not starting with them then you're missing a real opportunity. I think the best CIOs in the world put themselves in their customers' shoes. I really do.

Look, that means your colleagues as well, right? I'm sure Nick has spent plenty of time in a lot of different UPS locations all around the world. I've spent a lot of time in a number of our locations, understanding exactly how we produce our product, what our employees go through day-to-day, how IT enables or doesn't, in many cases, and how we can get better.

But also, what is important to our customers? Every organization I've been part of, we've done day, week, month in the life of where we eat our own cooking. To me, that's the way that IT not only builds credibility but comes up with innovative solutions because we truly are experiencing what it's like to be a customer.

Always having that channel open with your customers so that they can give you 100% transparent feedback about how you're doing. A CIO leader has got to be made of pretty stern stuff. You have to be able to take feedback really, really well and not be personally insulted by it, I guess.

Nick Costides: The reality is, you have to be business sentiment, as Jay just said. You've guessed that's our strategy and very customer intimate. You always have to be listening.

Jay Ferro: That's right.

Nick Costides: Remember, we're not all building technology for technology's sake. We're building it to solve problems, to create products that our customers desire. Listening is going to be a very critical skill that that next-generation transformational leader needs to have.

Michael Krigsman: We have a question on LinkedIn. Sergio Quiroz asks, "Is business transformation now mandatory?"

Nick Costides: It's table stakes, right? The markets we operate, the technology landscape is changing at a dramatic rate, at a pace that many of us have never seen before. All of us need to kind of look ahead to understand how we can disrupt our industries, disrupt our business models before we become disrupted.

I have to tell you, and we'll talk about this throughout this conversation today, but the digitization of our businesses, the automation of our businesses is going to be critical for businesses to survive going forward. At UPS, as I mentioned earlier, we've got a transformation going on that's informing our strategy for growth.

That strategy for growth, the underpinning for it is what we call the Smart Logistics Network, which is not only really cool, customer-facing technology, but also operational technologies like our Orion platform that are allowing us to do things like save 100 million miles a year in drivers on the road and to reduce carbon emissions, greenhouse emissions by 100,000 cubic meters. It's just amazing what you need to do here, but you have to be transforming at this point because, if you don't transform, you will be disrupted.

Jay Ferro: I agree 100%. You need to be operating like you're being chased 24/7/365. Even if you're not, you probably are. You're just not aware of it.

You always have to be pointing the finger inward and have your finger on the pulse of what your customers are asking for. Not only that, getting good at anticipating the questions that they haven't even asked yet.

We all know the phrase that Gretzky coined, "I don't skate to where the puck is. I skate to where the puck is going to be." That's what we're called to do as business leaders. We have to be able to anticipate and extrapolate from what we're hearing from our customers and what our competitors are doing to stay one, two, five, hopefully, ten steps ahead.

We have got to constantly be transforming. That transformation doesn't always have to be cold fusion. It can be, to Nick's point, digitization of manual processes. It can be constantly pointing a finger and saying, "We need to pay down technical debt."

It's just this transformational mindset constantly of how do we, as an organization, get better, faster, higher quality, service our customers better, think of ideas before our competitors do. Yeah, I think you're right, Nick. I think it's table stakes. I think that's well said.

Nick Costides: The speed of the leader sets the pace for the pack, right?

Jay Ferro: Yep.

Nick Costides: The companies that are out there on the edge disrupting, they're creating products and services that people didn't think they needed, right?

Jay Ferro: Yeah.

Nick Costides: We talked about My Choice earlier, the first in industry capability for consumers to control the delivery experience. Earlier this year, we deployed a first in industry solution, My Choice for Business, to allow businesses to control their experiences through the supply chain.

At UPS, since 1907, we've always seen ahead of the curve, right? We started as a bicycle messenger delivery service and, out of the gate, we were disrupted by the telephone.

In our culture, in our DNA is that spirit of transformation, that spirit of entrepreneurial leadership. We've constantly transformed and adjusted to changing conditions to become the company that we are today.

Michael Krigsman: We have another question on LinkedIn from Simone Jo Moore makes the comment, "Doesn't transformation only happen because you are being disrupted?"

Jay Ferro: I don't think so. I feel like it can only happen if you are being disrupted. I feel like a CIO or an organization has got to be almost self-transforming constantly. To me, that's just a standard state of being in 2020. To Nick's point, the market, the technology, our customers, what they want is evolving constantly.

Yeah, I think fear of disruption or being disrupted can be an impetus for transformation. No doubt about that. But I feel like you also have to be transforming yourself without that external influence where you're constantly challenging yourself. I think it can be both.

Nick Costides: I was just going to comment on Jay here. Look, if you're reacting to a disruption—

Jay Ferro: That's right.

Nick Costides: –it's already too late. You're already on the downside of that hype curve.

Michael Krigsman: Nick, we have a comment on Twitter relating to all of this from Arsalan Khan. He makes the comment that digital transformation requires organizational change at every level of the organization. Really, therefore, we're talking about a cultural change as opposed to technology.

Jay Ferro: Oh, absolutely. There is no digital transformation without cultural transformation – period, full stop. Your ability to influence the organization is severely limited if you don't have the ability to influence the culture. I think the CIO is in a perfect role, or the president of IT, in Nick's case, is in a perfect role to be able to influence that culture through delivery, through improvement, through high-quality products, that kind of thing.

Everybody loves a winner. Michael, you and I have talked about this before where winning cures all ills. It's amazing how, when you start winning and winning as a CIO when you deliver high-quality products on time and you're constantly delighting your customers and the trains are running on time and all of those things. It's amazing how much easier things get when you are trying to push the envelope and maybe change the culture. I don't know that there's a better role than a senior IT leader like Nick or me or all of the other great senior leaders that are out there.

Nick Costides: I think we talk about strategies in silos, right? We talk about the digital strategy. We talk about the business strategy.

Jay Ferro: That's right.

Nick Costides: At UPS, we just look at it as the strategy.

Jay Ferro: Right.

Nick Costides: I think that's very important. You get the cultural change and you get the organization to align around the priorities.

Jay Ferro: Yeah.

Nick Costides: As we talked about earlier, and as Jay mentioned, with the right leader that has the seat at the table that can speak in business terms or with their peers, they can really drive and really move the puck forward unlike any other function. I really believe that the IT leaders in our companies today have probably the largest view, if you will, of the scope and breadth of the organization because they touch every product, they touch every service, they touch where our customer is at, and they touch every internal function.

Jay Ferro: I agree. They have to recognize that, though, and be proactive about engaging and learning. You cannot wait to be knighted. You can't wait to be told, "Gosh, you CIOs or presidents of IT or CTOs are so great."

You have got to build that culture within IT that you're truly seeking to understand the value chain within your company and bringing solutions to the table. You have that vantage point but you've got to take advantage of it and be proactive.

Michael Krigsman: Nick, are you primarily a businessperson or a technologist?

Nick Costides: I think a successful IT leader today has to be both. In order to have that seat at the table that I spoke about earlier, you have to be business intimate, you have to be customer intimate, you need to think about how you and your technology function are going to help drive top-line, how you're going to improve margins. Right? I mean I think that's critical. By the way, when that IT leader is speaking the language of business, that's what really drives agility because we're all speaking the same language, we're all moving to the same goal.

Jay Ferro: That might not happen overnight. Nick is spot on. It's incumbent on us as IT not just in our roles but pushing that down through the entire IT organization and making sure they understand the business role that they play within the organization and educating them on the impact that IT makes throughout the company and with the customer.

It might not happen overnight. In every company, you're going to get people who are just, "Well, you guys are the IT guys, right? You fix computers. You do some things." I mean that still exists in 2020. We know it does in large companies or companies that have a lot of tenure.

You can wear them down over time through delivery and, to Nick's point, speaking their language but truly becoming intimate. I love that term, Nick, business intimate. That earns credibility.

Nick Costides: Solution delivery is a team sport, right?

Jay Ferro: Mm-hmm.

Nick Costides: I don't think we look at technology or systems as an IT project. I'll give you an example. A few weeks ago, in China, we launched our WeChat presence. It's a great, interactive technology. In China, that's the way you do business. That's the way you interact for commerce.

That product launch would not be successful if our China marketing team did not develop a marketing campaign specific to that market, reaching out to consumers in Toutiao and Baidu as channels to inform them of the offering and the solution that we have in the marketplace.

Michael Krigsman: We have a question from LinkedIn from Scott Padgett who is from the Department of Defense. He says, "As part of your technical strategic roadmaps, how are you employing artificial intelligence, machine learning into your technology?"

Nick Costides: I talk about the smart logistics network. The smart logistics network is informed by data.

We have built, at UPS, some machine learning and analytics practice. We have data scientists in a variety of business units. We bring together a lot of data about not only our business, but our customer's businesses. Those solutions really provide us insights.

We announced, about a year or so ago, a solution that we call HeAT. It's an analytics machine learning platform that consumes, during our peak holiday season, literally several billion events a day. We use that to allow us to inform how we're going to tweak and change our operation on a daily basis.

The use of data, the use of machine learning is critical if you're going to really be able to want to think about how to innovate on the edge and also change your business right in front of your eyes.

Jay Ferro: Could you just change it so that you can all leave my good wine on my front porch and not have to have an adult sign for it, please? No, I'm just kidding.

Michael Krigsman: [Laughter]

Jay Ferro: [Laughter]

Michael Krigsman: I actually really like that feature. The two features I like is the fact that I can sign the authorization in advance and also the Follow My Package, so you can see.

Jay Ferro: Isn't that great?

Michael Krigsman: Yes.

Jay Ferro: My kids are amazed by that. I said, "Well, it's on its way. It should be there in the next 15 to 30 minutes. The truck is just a couple of miles away."

They're like, "How do you know that?"

I'm like, "How do I know that? Why don't you know that? You're 19 years old. Get out there and look." [Laughter]

Michael Krigsman: [Laughter] Nick, how do you create? Let's just use that as an example, that follows the truck. How do you create that? What's the planning that goes into it, the kind of technology, whatever you're comfortable sharing?

Nick Costides: Getting that delivery experience that you just talked about is free by just downloading our app. I will tell you that, at UPS, we've adopted not only an agile methodology and agile tools, but an agile mindset. As we talked about earlier, we listen to our customers to determine what they need to power their businesses.

With that in mind, the first release of Follow My Delivery was a minimal viable product. We launched it to a limited market. We received feedback from our customers and we quickly turned around sprints to iterate features in literally a handful of months to become the product that you see today.

Now, I'm really glad that you guys enjoy our service because, at this time in the U.S., none of our competitors can match this service offering. Really, thank you very much for bringing it up.

Jay Ferro: Do you take that same mindset, that same agile mindset for internal projects as well? Does that just permeate UPS? I love it and I'm a big proponent of that same mindset.

Look. Let's put an MVP out there. Let's put a prototype, proof of concept. Get people to react to it versus opine on it for six months, which to me is a glorified paper exercise. Let's get something out there for people to react to and then iterate, iterate, iterate. Do you take that same approach with all of your major projects?

Nick Costides: There are projects that are applicable for agile. As part of our IT transformation, we moved our organizations to Agile and DevOps, and that includes the business partners that work with us. Embedded in the product teams, the product owner is truly the product owner.

Everything that we do is based on that agile mindset, but I'll give you a couple of exceptions. If you're going to build or deploy a brand new general ledger in your company, you're probably going to follow a waterfall methodology, right?

Jay Ferro: Yeah.

Nick Costides: To get that right but, yeah, everything we do, we're all speaking that language now of minimal viable product. What's more important is making sure that those releases create value. This isn't about technology for technology's sake.

Jay Ferro: Right.

Nick Costides: Agility for agility's sake. It's about creating value for your customers and about creating value for your shareholders.

Michael Krigsman: We have another question on Twitter, again from Arsalan Khan, that says, "Nick's background is in enterprise architecture. How does that background help you in your dealings with other business executives?"

Nick Costides: In general, an IT leader needs to be that savvy businessperson that's, as we said, business intimate, that understands the business, the operating model. Everyone in IT has to be a savvy technologist, right? That's what the role is all about.

I would tell you that, here at UPS, our technology teams across the board wear both of those hats. We spend a lot of time ensuring that our teams remain contemporary, that they invest in training so that they can be on the leading edge of new and enabling technologies.

Now, our job is to bring forward emerging technologies, to inform the business about what's possible to solve problems. The one thing that we don't want to do is react to somebody reading something on an airplane magazine and saying—

Jay Ferro: iMagazine, baby. Come on now.

Nick Costides: Yeah. Yeah, here's a cool widget. No, I think we have a very good, disciplined approach and process here. Again, I think it's that trust that's been brought together with the folks here at UPS in terms of the fact that IT is not a silo.

It's not the technology gurus that sit in the back room that only comes out to fix your PC. They're sitting there around the table with you at the very beginning when you're thinking about a new product, a new concept, a new strategy. We're there, arm-in-arm, all the way through the journey.

Michael Krigsman: We have an excellent, interesting question from Joel White on LinkedIn. He says, "What has been the biggest challenge for UPS during this pandemic and what do you think the new normal is going to look like?"

Nick Costides: First and foremost, the safety and health of our employees is extremely important as we care about each other, our families, the communities we live and work in. As you may know, UPS has been designated by governments, of countries around the world as a critical infrastructure business.

Now, we have both a privilege and a responsibility to continue to safely work during this challenging period. We continue to operate in line with the demand and the needs of our customers, except where there are limits due to government restrictions.

The situation, as everyone knows, is changing daily. Our smart logistics network is really enabling us to adjust and deploy contingency plans to safely meet our service commitments as conditions on the ground permit.

I'll tell you a little bit about IT. I really appreciate the question because it allows me a moment to recognize our IT teams around the world and the great work they've done during this pandemic.

First and foremost, all of our IT operations and all of our solutions that are in the delivery pipeline continue to proceed as normal. In parallel, our IT teams have had to deliver system changes and enhancements in hours and days to customer-facing technologies, operational technologies, to react to changing market conditions on the ground.

The BCP plans and the proactive investments we made in IT infrastructure prior to the crisis allowed us to move tens of thousands of our employees around the world to remote workers with minimal disruption. I'm truly proud of the response of our IT teams and how we've been able to balance the priorities that are going to grow our company and the tactics that are required to react to this crisis.

Jay Ferro: Nick, how has this crisis, if at all, changed your leadership style? Has it? I would argue that it reveals, crisis reveals leaders. It doesn't change them; it reveals them. What do you say to that?

Nick Costides: You have to be more connected. We're all working remotely. We're taking these calls today remotely outside of our offices, and so staying connected is important.

I start the day every morning with a standup with my direct reports at 7:30 every morning. We are sending out a weekly communication profiling projects, profiling how we're responding to the crisis. We're doing regular townhalls to keep our people informed and connected.

By the way, we're having a little bit of fun. Some of my directs, on a Friday night, will bring their teams together and do a networking event. As a matter of fact, Michael, you may or may not know this, but Jay and I serve on the advisory board of a technology organization here in Atlanta.

Jay Ferro: Yeah.

Nick Costides: Every Tuesday, trying to keep that organization's mission together, we all meet on Tuesday nights in a virtual networking event. I think, Jay, you're right. It's taking a different type of leadership style and you really have to keep being connected. You have to really communicate and you've got to communicate and be transparent and honest.

I think, as a company, we've done a really good job with that, not only in IT or in the workgroups that I have the privilege to coordinate here, but really across the board as a company. We have 495,000 people that are at work each and every day moving PPE, moving test kits, supporting the reopening in various markets, and communicating and getting to understand the situation that we're facing is really rallying the troops.

I'm not going to say it's an IT thing. I'm not going to say it's an IT leadership thing. I'm going to say we've got a great corporate culture here at UPS and that culture is shining right now.

Michael Krigsman: What does that say about the nature of the work that you do and your focus and where you place your priorities?

Nick Costides: At UPS, technology is weaved into the fabric of everything we do. As we talked throughout this conversation this morning about things like My Choice, Follow My Delivery, the Orion platform, technology is on the forefront.

We are digitizing a lot of our processes today. We're automating a lot of our processes really to help make the jobs our people do easier and simpler. Automation and digitization are top of mind and, as I mentioned earlier, it's not a technology strategy; it's a strategic imperative.

Michael Krigsman: We have another question from Twitter and again from Arsalan Khan who says, "He's getting the feeling that UPS is a data company that happens to be in the delivery business gathering data from the supply chain all the way to providing data to customers."

Nick Costides: We like to say that we are a technology company and that we believe that the smart logistics network and, you know, what we call the UPS Cloud, our suite of APIs that allow retailers and etailers to integrate with UPS services is where the power is at.

We have a lot of data, but we use that data to improve our customers' experience and to inform our product strategy. We're not in the data selling business.

We are in the physical world. For 113 years, UPS has been that trusted provider in that Pullman brown uniform that knocks on your door, that excites your children.

In the digital world, we also have that same responsibility. I have to tell you, in the digital world, we take information security and privacy very seriously. When we talk about our IT priorities here at UPS, make no bones about it. We can talk about innovation and great products and cool technologies. We always start with information security.

Jay Ferro: Always.

Nick Costides: Protecting, always. You have to protect your customers' data and we use the data in the ways that are really purposefully focused on improving their experience and really helping to optimize our operations for our customers.

Michael Krigsman: Jay, this notion of the information technology leader as customer experience leader, any thoughts on that one?

Jay Ferro: I feel like we play a critical role as customer experience leader. I love – nothing energizes me more than visiting our plants, talking to our customers, seeing our product on the shelves, et cetera, and understanding IT's role in that value chain and how we can get better.

Even on a smaller scale behind the scenes, customer experience, when I think about my colleagues in our divisional or corporate offices. How do we make their lives easier? How do we remove friction so that they can better service our customers? All of those things.

At this point, if you're not considering yourself, when you're a senior IT leader, as a customer experience leader, you're missing a significant opportunity and it could have severe consequences. It's not about bits and bytes and feeds and speeds. Those are table stakes. We all know we have to do it. They're very, very important, but it all starts with the customer.

Michael Krigsman: Are there CIOs out there who are still focused on feeds and speeds?

Jay Ferro: Oh, yeah. I wish there weren't. I wish there weren't.

Now, look. We all attend a lot of events. I know Nick has seen them. I think that number is shrinking, but we've all been at events where CIOs are hyper-focused on the how and not the why and the what.

We have to be good at all of it, by the way. I'm not trying to absolve us of being good technologists. We have to be good technologists. But if you're expecting to get a seat at the table because you can regale people with tales of blinking lights and boxes and wires, then you're missing a big opportunity and, chances are, you're not going to get that seat.

Unfortunately, yeah, I think there are still some folks who do that. That, "Hey, the trains are running on time. That's what I'm here to do."

Nick Costides: But there's a shift. Right, Jay?

Jay Ferro: Right.

Nick Costides: I think we're starting to see it. In the old days, most IT leaders, the majority of IT leaders were the technology guru that nobody understood.

Jay Ferro:
 

Right.

Nick Costides:
 

I think, today, you have to transform yourself because if you're not sitting at the table, you're not leading; you're following. You're an order-taker, right?

Jay Ferro: That's exactly right.

Nick Costides: You don't want to be the order-taker. You want to be sitting at the head of the table helping to drive that corporate strategy, helping to drive those technology-enabled service offerings like the My Choice and the Follow My Deliver that we spoke about earlier.

Jay Ferro: Yep. Well, we have to be complete CIOs, right? We have to be complete CIO leaders.

There is no question to me about, are you an operational CIO or are you transformational CIO? You're a CIO. To me, the role by definition means you have to do both.

Yes, we have to keep trains running on time. Yes, email has to flow. Data has to flow. Systems have to stay up. There has to be availability, resiliency, disaster recovery, data security. All of those things have to happen, but we also have to be transformative and innovative leaders as well.

If you're thinking about the role of the CIO—and not you, but some people do—as two different types of roles, it should be, in an ideal world, one role. That's it. You have to do both if you want to be a world-class CIO.

Michael Krigsman: We have another comment on LinkedIn and again from Samone Jo Moore who says she's still struggling to get some organizations to answer the question of how data and security are incorporated into their knowledge management strategy on a larger scale, not just helpdesk articles. Does UPS have a view on this?

Nick Costides: We do. Security and the security topic is something that starts at the board level at UPS. My boss, who is the chief engineering and information office and our CISO report regularly on our security posture to the board of directors.

We have an information security and privacy committee that is not an IT committee. It's a committee made up of the business unit heads across the organization. We've weaved the security message, the privacy message across the organization.

It's been a journey. In the early days of information security, a lot of people didn't get it. But with the incidents that have occurred in industry over the past few years, and seeing the impact it's had on brands, to see the impact it's had on topline, to see the impact it's had on margins, it's easy to have a conversation with your peers about information security and why it's important at UPS – very easy here today. Much easier than it was five years ago, seven years ago.

Michael Krigsman: How does somebody break through all of your various defenses in order to get to you?

Jay Ferro: In general, I think most markets are the same. It's a relationship business. Thousands of emails, phone calls, LinkedIn requests, et cetera. You're being bombarded with requests and magic widgets and everything to save your business.

You've got to be real crisp with your message. Cold calling, cold emails, at least for me, and I'm sure with Nick too, you've got a near-zero percent chance of that capturing my attention.

If you go to where CIOs or senior IT leaders are and build relationships, I'm doing business today with people who shook my hand and, in today's day and age, maybe bumped elbows—hopefully, we can all get back together in person—but took the time to build relationships, understand my business challenges, and played the long game. Unfortunately, we live in kind of a, "What have you done for me lately?" cold call, ROI, instant gratification kind of world.

I'm doing business today, and I'm sure you are too, Nick, and I'd love to hear it. You're doing business with people today, probably, that were willing to play the long game, build those relationships over time, be there when you needed them, and offer value.

Jay Ferro: A couple of years ago, in one of these forums that I spoke at, the same question came up.

Jay Ferro: Always, yeah.

Nick Costides: I gave the same response. About three months later, I was at an IT networking event. A woman approached me and said, "I was at your talk three months ago. I got your message and I waited until this moment to give you my elevator speech."

I've got to tell you something. It impressed me so that I took a meeting with her leadership team. We brought the product in to do a proof of concept and take a look at it, but she played the long game, as Jay said.

Michael Krigsman: Let's finish up with this idea of trust. That's a great way, actually, to finish up from what we were just talking about.

The idea that IT leaders must be trusted by the organization and by customers, how do you create trust and what advice do each of you have for creating that sense of trust and confidence among these stakeholder groups?

Nick Costides: First, it does start by being part of the team, getting that seat at the table, being engaged in the dialog, being side-by-side with your customer and solving your customer's problem. Being side-by-side with your peer in your organization helping them to work through what their strategy for growth is. If you're shoulder-to-shoulder with your customer, if you're shoulder-to-shoulder with your peer, you're in it together.

In a lot of organizations, you hear the term, and this is a term that we don't really use at UPS anymore. We used to hear IT people talk about "the business."

Jay Ferro: Yeah.

Nick Costides: Frankly, in my mind, anyway, there isn't IT; there isn't the business. We're all the business. We're all in it together.

In a company like Quikrete and a company like UPS, hey, we're trying to grow value for our shareholders, our customers, our employees. We really want to grow topline. We want to improve those margins, so we're in it together. Being at that table, not being isolated in the back room, I think is critical.

Jay Ferro: I agree. I think that's really well said. I think trust begins with those relationships that Nick is talking about. It also includes integrity, doing what you say you're going to do, and being a transparent leader.

To me, nothing builds trust better than when IT screws ups, and we screw up, and that you own it. You've heard me say this, Michael, that if the baby is ugly, we've got to call the baby ugly, but we have to follow it up with a plan on how we're going to fix it.

When you can look somebody in the eye and say, "Look. That should not have happened. I'm embarrassed that it did."

Now, don't get me wrong. I'm not talking about flogging yourself daily about how terrible you are. I'm also talking about celebrating victories, et cetera. But being very transparent and taking that ownership, that builds trust. It does. That transparency in everything that you do builds trust and then following it up with action versus just words.

Michael Krigsman: On CXOTalk, we spoke with a guy named Joel Peterson. He's the chairman of JetBlue. He emphasized the goal of his term now "solving for fairness" in business dealings as opposed to one side take everything – solving for fairness. Any thoughts on that?

Nick Costides: As a global company that has millions of customers, everyone on the other side of the equation from us is a potential UPS customer. I always start every meeting with a new partner and say, "Hey, look. We're all in business together." If there's no value proposition in what you're offering, I don't want you to waste your time. I don't want you to do a proof of concept. You probably need to pivot to another customer.

I think you have to put yourself in everybody else's shoes and recognize that we're all going through the same thing. We're selling to customers. They're looking for our services.

People are selling to us, so I do think that he's right. We have to treat everybody like we want to be treated. It's the Golden Rule. I think if you bring the Golden Rule to your corporation and you can sleep at night because you have high ethics, what more can you ask for?

Jay Ferro: I agree. We have to play the long game too. If you want to have true partner relationships versus vendor relationships, I think there has to be a win-win.

You can grind them into the ground when you're a company of UPS's size or even Quikrete's size over a penny. Certainly, it's part of our job to get the best value that we can for our organizations. I'm not suggesting we should never do that. But if you want a long-term partner who is going to flex with you and adapt and grow, it has to be a true partnership and relationship and a win-win.

Michael Krigsman: We've been speaking with Nick Costides, President of Information Technology at UPS. Nick, thank you very much for being with us today.

Nick Costides: Michael, thank you for having us. We really appreciate being able to tell the UPS story.

Michael Krigsman: Jay Ferro, Chief Information Officer at Quikrete, welcome back, and thanks again for taking time to be with us.

Jay Ferro: Thank you, Michael, for having me. Nick, great to see you, my friend.

Michael Krigsman: Everybody, thank you so much for watching. Check out CXOTalk.com. Be sure to subscribe on YouTube and subscribe to our newsletter. Hit the subscribe button at the top of the page.

Take care, everybody. Stay safe. Stay healthy. We'll see you soon. Bye-bye.