Mike Sutcliff, Group Chief Executive, Accenture Digital

Michael:         (00:04) Hello, welcome to episode number 96 of CXOTalk. I am Michael Krigsman with my – I don’t know how to say – Vala you know it’s like I want to praise you to the sky. To praise to the sky worthy co-host, who willingly gave up a seat to the Super Bowl Vala Afshar, hey Vala how are you?

Vala:               (00:29) Michael what a great intro. I’m doing great and I love the fact that we’re going to end the week with one of the top thought leaders in terms of digital as our guest. So please with the introductions Michael.

Michael:         (00:44) Well we’re joined this week – we are going to talk about digital transformation, and we’re joined this week by Mike Sutcliffe, who is the group chief executive for Accenture Digital. Mike how are you?

Mike:               (00:58) I’m great and I’m pleased to be here, so thank you so much for inviting me it’s nice to spend time with you.

Michael:         (01:05) Great Vala, why don’t you jump in with the first question

Vala:               (01:08) Michael please, could you give us a brief background and introduce yourself to our audience.

Mike:               (01:14) Hi, first of all, a fantastic job that I’ve got here at Accenture Digital. Our role is to help all of Accenture to work across industries, across geographies to think about how we combine technologies. And those technologies may be around digital marketing, collaboration, e-commerce engines, it may include mobility, our analytics capabilities, our cloud capabilities.

                        (01:38) Our job is to take all of those technologies and use them to try and solve problems for our clients in new and unique ways. So it’s a lot of fun, and I get to work across all of the industries, all the geographies and I get to learn from our clients what works and what doesn’t.

Vala:               (01:54) How big is the group Michael, your group.

Mike:               (01:56) Well we are about $5 billion in revenues, about 28,000 people that are specific to Accenture Digital, But we work more in the context of more than 300,000 people at Accenture and our goal is to help them all go digital at the same time.

Michael:         (02:15) Mike, we hear the term digital transformation name thrown around a lot, and I think it’s become one of the big buzzwords of our time, so what does it actually mean?

Mike:               (02:27) Well, the way we think about it is providing better outcomes and experiences. So whether that is a better learning experience for a student or health outcome for a patient, a better interaction with the government, for a citizen, or better digital commerce transaction, or an interaction for business to business or business to consumer perspective.

                        (02:50) We’re trying to take a broad view about first of all, doing things differently, but then in some cases it’s all about doing different things. It’s about changing your objectives, your operating models, the way that you engage so that you can actually provide a better experience or a better outcome. That’s the way we think of digital transformation. It’s truly changing the way the world works and lives

Michael:         (03:13) So digital transformation is changing but it’s always on digital data.

Mike:               (03:19) Well for us it’s a lot of things. It’s a lot of different technologies and some of those are engagement technologies, the ability to reach out and communicate and interact with somebody. Sometimes it’s about mobility, the ability to allow somebody to beat mobile whether it’s a device or a person.

                        (03:35) And it’s also analytics, it’s letting analytics in a way that’s intuitive and easy to understand for people and objects in different environments. So for us, the definition of digital is a combination of communication, computing, storage, bandwidth etc. in a way that allows people to do things differently.

Vala:               (03:57) So this week Michael we’ve had Apple selling four a half million iPhones, which equates to if I do the math on a 90 day period of about 570 phones per minute. Google and android claim they have sold over you know 1 billion android smart devices, smart phones in 2014. And Facebook comes out and says, they’ve got about 800 million mobile only active users – daily users. So clearly, when you’ve got Facebook, Google, and Apple talking about mobile revolution – it may not beat mobile’s first, it may be mobile only trend that we are heading. So I’m guessing mobile is one of the – and you talk about collaboration, analytics, mobile, social, cloud, analytics. Are these the driving forces behind digital transformation and ultimately potential business disruption.

Mike:               (04:50) Absolutely, I mean we’re looking at mobility as one of the primary factors and how people think about changing the way they are working. And many of our clients have said, yes we’re designing for a mobile first world, and sometimes a mobile only world.

                        (05:09) And so mobility is absolutely going to explode. If you think about where we are today, we’ve got 6 billion-ish people on the planet, and let’s say that 4 billion have some kind of mobile technology that’s connecting them. And I think we’ve got between five and 7 billion things that are connected as well. And all of those numbers will explode over the next couple of years. I think we might add 9 billion in new connections to the Internet next year.

                        (05:37) And that’s all about mobility. It’s about providing the ability to communicate and to move, and for people to take advantage of the power computing and storage and science from elsewhere. So whether we’re talking about edge computing at the edge of the cloud, or whether we are talking about the computing that’s available through the cloud technologies. I think we are going to see a massive shift in hot the technology enables us to do over the next 12 to 18 months.

Michael:         (06:03) Mike what are the underlying on (unclear 06:05) that are driving these types of transformations and how is digital transformation distinct from a business transformation as we’ve known it for many many years.

Mike:               (06:19) Well I don’t think digital transformation is distinct from business transformation. From our perspective those to fit together like a hand in glove. What we’re trying to do with business transformation is understand how to deliver a better product or service. And when we think about digital, digital is just a set of tools and techniques that we use to get that done.

                        (06:39) From our perspective digital is you know a very unique in the advances in technology and the economics that are associated with those advances in dramatic drops of the cost of storage in the cost to compute, and the ability to communicate and have bandwidth spread and devices available in so many places around the world.

                        (07:05) So for us, the underlying factor is not one thing, it’s not Moore’s Law in computing power or the ability for storage to drop its price by 90% last year on a global basis. But also in addition to storage and compute, it’s the ability to connect and to have devices that are active and available in so many places and are truly at this point ubiquitous.

Vala:               (07:30) Is all of this ultimately about a competitive advantage or is it bigger than that, is something else.

Mike:               (07:37) Well I think it’s both, a short-term competitive advantage in that if you’re willing to test the waters to experiment and to define a new way of working, certainly you can gain a competitive advantage. But frankly it’s also about keeping up, because even if you’re not the one doing that, then other people in your industry are.

                        (07:57) And earlier we were talking about the fact that in the world of marketing, people are getting down to much more discreet capabilities and marketing the segments of smaller populations and in some cases segments of one. And to understanding the personas and behaviors, but even those personas and behaviors are changing over time.

                        (08:18) So from our perspective yes, it’s about short-term competitive advantage, and absolutely we’re seeing lots of people will do that. But it’s also about restructuring industries and keeping up with the blurring boundaries between industries and the new products and services to (unclear 08:33)

Michael:         (08:35) Mike, when we think of digital transformation, people very often tend to think about marketing. How does digital transformation actually affect the core operations of an organization?

Mike:               (08:51) Well so we agree with people when they think about marketing as one of the early uses of digital technology. It is all about providing better interactions and better experiences with the people you’re engaged with. And digital has done a huge huge service to organizations that are trying to create better engagement with the experiences for the individuals that they deal with.

                        (09:14) That’s where a lot of attention was for the last several years, and what we’re seeing today is an equally explosive opportunity around the way the enterprise is managed, and around the way that operations are actually executed.

                        (09:29) So we see the digital enterprise and digital operations as being a massive areas of change in terms of how supply chains work, how products are designed. How products and services are combining to create new features and experiences.

                        (09:45) So we actually see digital customer continuing to expand and explode and the interaction around a multichannel experience would be very very interesting. But when you start looking at how the products themselves are designed and the features that are wrapped around them with new services. And then how the operations of the companies change their manufacturing and supply chain, and the way that they actually work with other members of the ecosystem. We see the next generation of business and the next generation of healthcare, and the next generation of vegetation all being able to be fundamentally re-taught. And it allows our client to ask the question, what could I do in a fundamentally different way next year, as compared to what I’ve done in the past?

Vala:               (10:29) So you know given that extensive knowledge you have at (past? 10:34) industries and certainly of various personas, who is leading the digital transformation and revolution? Is it the CEO, is it CIO, are they some new titles. I mean I think LinkedIn has about 1600 chief digital officers, where two years ago there was probably 100’s. So is there an emerging C-suite that’s leading the effort and based on your client benchmark experience?

Mike:               (11:04) Well first of all we have a huge immense respect for the role of the CIO, and we believe that the CIO as in many industries are continuing to lead in terms of their thinking, there experimentation, the capabilities they’re developing. But whereas historically the businesses have thought about IT as their systems of record, and they thought about their VRP platform’s and those kind of things as kind of the core IT assets of the firm.

                        (11:30) Today they’re starting to understand that technology can enable the business in the systems of engagement, and that may be actually more important than the systems of record in terms of gaining a competitive advantage, or enabling a completely new way of interfacing with their customers, and providing the products and services that those customers are looking for.

                        (11:50) Is that part of the business, those systems of engagement become more important, we’re starting to see the buyer move outside of the CIO suite. And frankly many of the more interesting and earlier adopting kind of use cases we saw were coming from the Chief Marketing Officer. Because the Chief Marketing Officer was thinking about how to engage with customers and how to provide better products and services that those customers would be. Because they found more value in the way the products and services were being combined.

                        (12:22) We did see a lot of Chief Digital Officers get amounts, and in many cases the Chief Digital Officers came from a marketing background, and that I think goes back to the thing we talked about a minute ago about the interactive side of the digital world being an early adopter of space. But we’re also seeing now, many of the Chief Digital Officers backgrounds being more operational asset intensive in especially the industries that find that as the key value lever for where digital is going to impact their business.

                        (12:53) We think the Chief Digital Officer is being asked to represent a broad coalition across the leadership team, so it’s not just the CIO agenda or the CMO agenda. But it’s also understanding what the business units are trying to achieve, and how the new products are going to be developed. And how do you bring all of that together in a way that actually substantially changes the results of the company moving forward.

                        (13:19) That’s why we believe this is a C-suite agenda. It’s not just for the CEO, CIO, or COO, or CMO. It’s how they all work together and the really challenging thing for the CIOs is that while they’re being engaged in this exciting new space, they actually still have to keep track of the legacy environments that run the shop that exist for the systems of record. That is a a lot of work to get done in a very short amount of time.

                        (13:49) And that’s why we see a whole raft of new services available where clients are buying things as a service. And so when you look at (discussionary? 13:58) that the IT spend and you say how is it being spent. In the old world where the CIO wasn’t in control of that discussionary budget and it was kind of doled out to the business, we’ve seen that change where the businesses can just go and buy things as a service. They can buying digital services that enable them and then integrate that back into the corporate environment.

                        (14:16) So we see this as a C-suite issue that is going to continue to engage everybody in the C-suite. We think that’s a really healthy dynamic because we don’t view digital as being a technology issue. We view digital as an enabler to the whole business.

Michael:         (14:34) Mike, if this is a C-suite agenda that extends through the operations throughout the organization, then that also implies that it’s an agenda that encompasses operations and encompasses people at every level inside the organization, wouldn’t that be the case?

Mike:               (14:56) we think there is a ton of innovation to come, that may come from the manufacturing space, the supply chain space, the broader operation designs, and in fact as we start to see the blurring between industries we can see industries learning from and taking advantage of tools and techniques that have been developed elsewhere.

                        (15:17) So we absolutely agree with that point of view that this is going to be a major enabler to the next generation of the way healthcare is delivered, or learning services are delivered, or citizen services are delivered, or corporate and commercial services.

Vala:               (15:34) We have a question from Twitter from Zachary Genes, and he asks, are we in the adolescent stage of digital security or just infants in info exec

Mike:               (15:47) Great question, great question. I would say the infant stage of digital security. We know a lot of tools and techniques that could be added to the picture and still be added to the picture in the short line to address some of the immediate challenges that we face. But make no mistake, this is a multiplayer game with lots of different people who will try and insert themselves into the environment, and many of those will have malicious intent.

                        (16:17) And so you know we absolutely believe that we’re in the very very early stages of understanding and reacting to all of the challenges that will exist as digital becomes embedded in almost everything that we’re doing.

Michael:         (16:32) Mike, given the kind of pervasive nature of digital transformation across so many parts of the organization, how do you implement these programs and how do you begin to get concept of measuring the success? What are the metrics that you can use?

Mike:               (16:50) Well you know what we try and do with clients is start with the value map to understand what matters in their particular organization. So if it’s a healthcare organization and their mission is to provide better health care, then we really start to understand the key drivers of that and we say let’s measure those outcomes. Let’s talk about patient experience and the special outcomes that you’re trying to deliver so if it’s lowering the rate of occurrence in a particular disease pattern, then that is the measure and that should be what you’re going after.

                        This What we try not to do you know, let’s measure eyes that we have on a network, or how many people we have coming to you know a collaboration site. To us, activity is and what we’re trying to measure, it’s outcome. And so sometimes that’s financial outcome, sometimes it’s learning outcome or health outcome. Sometimes it’s the engagement of citizens and political process.

                        (17:46) But what we rarely try and do is to say let’s focus on what and matters and measure that, and let’s also make sure that is that we are thinking about the world of digital and what’s possible. We separate what’s possible and what we could do from what’s important and what we should do.

                        (18:04) And it’s very easy to do something digital because it sounds interesting and it make sure look good,’ I’ve done this cool thing. I built this really cool mobile app.’ Well you know, you can create a mobile app in about a week. But creating a mobile app that engages and delivers a substantial change in terms for the experience of your customer or how your employee actually executes the work. That doesn’t take a week, that takes a bit longer, it takes a bit more work and a bit more thinking, but actually generates a completely different outcome.

                        (18:34) So we try and segregate what could you do from what should you do, and then think about how to do it most effectively.

Vala:               (18:42) When you think about the (unclear 18:46) versus you know just the challenge of keeping up with these trends that are just disrupting the the way businesses grow market share and delight customers. Mobile, social, cloud, apps we’ve touched. We haven’t talked about Internet of things and big data and analytics. What are the impediments of transformation, is it skillset is it culture, is it vision and foresight, is it innovators dilemma? What are some of the big impediments?

Mike:               (19:19) Well I think that changes actually by company, depending on the industries and the geographies that they compete in, and also the positions that they hold in an industry. So certainly we see some leading competitors that are early adopters, and in fact are gaining competitive advantage using digital. But we see others that are saying you know, I can wait and see and become a fast follower.

                        (19:42) And so the first impediment is just to understand what’s happening and do you really truly understand the pace of change, and whether or not there might be a disruptive change coming at you that’s not easy to predict, right.

                        (19:55) And so we have these discussions you always hear people talk about BnB and Uber being complete disrupters to industries that weren’t expecting them, and certainly that’s true. But what we expect to see in most industries is that the people that make the most disruptive change are actually already incumbent in the industry. They’re just willing to rethink what it is that they’re going to do to create value in the industry. And then there going to leveraged their assets, their customer relationships, they‘re really deep insights in how the industry works today to think about what it might look like tomorrow.

                        (20:30) So if you can get past that stage you’re really thinking about the strategies and what would be creating significant new value, then the disruptors usually move to skills. It’s not technology, because the technology exists and it’s easy to buy. You can buy it, rent it, have it as a service if you want, but do you have the people in the organization that know how to use it and apply it perfectly. And that’s true in terms of whether you can get enough data scientists, or whether or not you can get people who really understand how to use design skills to do service design work effectively.

                        (21:02) And we see a lot of clients struggling because frankly there are a lot of gaps in the talent markets. And specifically, you know if you don’t happen to live in the right geography would be in one of the industries that was an early adopter. If you’re looking in the traditional places that you might recruit from they’re not developing the skills that you are looking for. And so, once you have passed the strategic issues we actually see talent as one of the big challenges.

Michael:         (21:27) What about the intersection of analytics, mobile, interactive cloud – and by the way, I’ll just mention parenthetically that we’re talking about technology as a foundation even although you just said, technology itself is not the thing – it’s not the main thing, but technology is certainly a critical component of it. So again, analytics, mobile, interactive cloud, what’s the intersection there and the role?

Mike:               (21:57) Well you know we look at this as I said, it’s a combination of changing in their technology capability, whether that is computing power or sensor capabilities, or communication capabilities, storage and bandwidth capabilities. It’s knowing how to take advantage of all of those things to do something that actually is going to make a difference for you.

                        (22:19) And one of the challenges in the IT stake try now, is the way that we train people to do development work over the past 30 years, it’s fundamentally different than what we need to do to create liquid application and really take advantage of the open source libraries, the API datasets and the STK’s that are out there.

                        (22:41) And so if you look at a company like Apigy, who is in the API space, right they spend a lot of time trying to educate the big IT shops, on what is possible in terms of exposing their legacy environments in a way that could be taken advantage of by developers that might sit outside the company.

                        (23:01) Or it might be vice versa, how their developers inside the company might use those API’s and SDK’s to take advantage of open source libraries. And so when we look at this evolving set of technologies, and you start to think about the advances and cognition engines or artificial intelligence, or advanced analytics, and asked whether or not the traditional IT teams know how to do that.

                        (23:25) the answers – probably not, and so there’s a lot to be done in terms of educating and working out how these technologies can work together and then doing that at a fairly rapid pace. So for us it’s a big challenge for most of the members of the ecosystem, to keep up with that pace of change because it is moving dramatically quickly.

Vala:               (23:49) Does that talent extend to the C-suite. I mean we talked briefly about chief digital officers, can you talk a little bit about – and when I mean extending to the C-suite, we have CIOs and traditional CIOs/CMO’s who are able to you know address some of these megatrends and drive transformation, and is it lack of talent that is leading to you know a CDO coming in and really leading the transformation efforts.

Mike:               (24:20) Well I’m not sure that I would describe it as a lack of talent. I think we have a lot of very talented CIOs that are doing just that, that are leading the change, that are being innovative and kind of redesigning what it is that the CIO organization brings to the rest of the business.

                        (24:36) But remember as I said earlier they still have the heavy lifting to do to maintain the legacy environments that have been built up over the you know past 20 or 30 years, and figure out how to continue to be more operationally efficient and effective in that space, while they are also being innovative.

                        (24:52) Chief Marketing Officers in the same way right, Chief Marketing Officers think about the tools and techniques that they use them as, and they find that those tools and techniques haven’t nearly been effective as they had been. They have got to learn a whole host of new things.

                        (25:06) So there’s a lot of change going on at every level, whether you’re COO, CMO, CIO, and especially if you’re a CEO to really grasp that concept that technology is not something that happens underneath the covers of the business. But technology has got to be core to how you design a product how do you think about the services that you wrap around the product. How do you think about enabling that with the community of people that make find value, how do you partner with others and in ways that you might not have felt comfortable with in the past. Because, I think ecosystem relationships are massive massive accelerators to what a lot of people are going to need to accomplish.

                        (25:46) So having that CEO mindset that is not just kind of, I’m running the company that we’re competing as a company. But, I’m running a company that exist as an ecosystem that plays a multiplayer game, and can take advantage of all of these technologies to very rapidly redefine our products and services, and the value that we create. To me that’s the question, how many of those have got the mindset?

 

Michael:         (26:09) Mike we have a question from Twitter from Arsalan Khan, who asks, what about specific industries that Accenture is hoping to learn from.

Mike:               (26:24) Well the early adopters of digital technology consumer facing industries, whether that was a consumer products goods and retail or whether it was retail financial services, or even communications to high-tech. So we saw a lot of early adoption there and we’ve learned a ton from those companies, because they were out experimenting, they were doing things that we could all learn from and then take across other industries.

                        (26:51) What I’m expecting to see as we move forward is to learn from a lot of the industries that are a lot more asset intensive or operational intensive, as they start thinking about how the industrial Internet can be used. You know, we’ve had people who’ve spent 20 years thinking about the automation about the industrial environments. That’s massively changed in a very rapid rate, and I think we can learn from many of those, you know the people that are out there experimenting.

                        (27:21) We certainly respect what GE has done with their Predix platform, and we look at the joint ventures we’ve done with GE around the airlines industry or the natural gas pipeline industry, or the oil and gas pipeline industry, and we say gosh, there were lessons that we saw there that we didn’t expect.

                        (27:41) And so I think what we’re going to see is the industrial sector is going to start teaching us things about how this digital technology can be used, that frankly may lead them back over into some of those consumer faced industries that were the original early adopters.

                        (27:56) Something I would see as bit of balancing in terms of where we see the innovation and where we take lessons across industries.

Vala:               (28:04) Mike, (unclear 28:05) analytics and the role and importance of analytics and perhaps the intersection of mobile and social analytics and the role it plays in terms of successfully transforming the business to delight customers grow revenue and reduce expenses through digital initiatives.

Mike:               (28:30)… Business it is absolutely the backbone of our belief to do this. So I talked about mobility and mobile first, every single one of our client assignments includes mobility. It just does, right, we’re already at that point.

                        (28:47) But beyond that, every single one of our client assignments also includes some level of analytics. Now, a lot of the analytics was early stage business intelligence where we were just trying to provide scorecards, and you know give people at least and instrumentation panel that tells them what’s going on and how they can react to it.

                        (29:06) But that’s not what I considered to be analytics, that’s business intelligent and it’s got a lot of value that we can create. But when we start talking about analytics, we’re talking about using advanced analytic techniques and things like machine learning and have mission engines, that enable us to take very complex science and make it available at the point of need in a way that’s very simple for somebody to understand.

                        (29:29) So, if I’m talking about a call centre rep who’s talking to a customer in the middle of a conversation, I can actually use machine learning cognition engines to tell them how to do a better job resolving that particular problem, and make it so intuitive and easy for them to understand that they don’t have to understand the science that’s already occurred to get them to that particular answer.

                        (29:52) We look at analytics and we say, whereas many people think about analytics for the corporate centre, or analytics that are designed for a kind of a power user. We’re looking at the opposite; we’re saying how can we take analytics and make it available everywhere in all the points of need in the organization, where people are trying to make better decisions.

                        (30:14) Sometimes it’s not people, sometimes it’s machines. So we’re trying to provide analytics in a machine to machine world, so that machines can do a better job at interacting with each other and predicting way where failures are going to occur, predicting when a better solution could actually be executed on behalf of some other process that is going on.

                        (30:35) So for us analytics is absolutely core to all of this.

Vala:               (30:40) So in process transactional based real-time delivery of analytics to either speed up the execution velocity and overall improve the service quality, whether it’s using machines, people you know, any node in your ecosystem that can provide you insight?

Mike:               (30:58) Yeah, so generally our discussion around analytics is what we call, insight to action. Sometimes the insight is a power user, somebody who is looking at a macro level set of data and trying to understand the big trends and how they should act to those trends. Sometimes it’s strategic where we’re trying to decide what market and how how to change a product attribute. So sure, there’s tons of analytics that exist at that level

                        (31:26) But in addition to that, we also believe that we want analytics to enable action as you said, in real time operational environment, whether that’s machine to machine or machine to person – or in many cases person to person.

Michael:         (31:41) Mike, what about the role of culture and getting people inside the organisation to understand, how to make most effective use of the data that is out there and of the analytics that’s available to help them interpret their work.

Mike:               (31:57) Well you know one of the things that recent fewer trends document that just came out is making sure that you’ve got humans inserted into the process. So we don’t view this as an environment where we’re trying to eliminate the human factor.

                        (32:14) And in some cases we have seen that, where people go too far and try to make it a technology solution. What we’re trying to do is enable humans to do a better job at the things that they do well right, of understanding context of reacting to complex situations of delivering empathy and solutions where those things are needed. And so where we see culture go wrong is when we try and take analytics and have that supersede the human element as opposed to enable the human element.

                        (32:51) And when that happens and of course humans are resistive, they say, I don’t believe those analytics or, you’re telling me those analytics are outweighing my gut instinct of the understanding of the industry.

                        (33:02) So what we’re trying to do is provide a balance to say, we’re going to give you insight and we’re going to help you make decisions but do that in the context of understanding the human element, and the importance of the human element in providing the experience that your clients are looking for.

Michael:         (33:19) So that culture change, do you see it as a primarily top-down or a bottom up effort.

Mike:               (33:27) Will certainly both. I think top-down is about setting the context that being inclusive in leverage in all of these different technology capabilities that we called digital. It’s imperative – it’s absolutely not optional, you just have to be open to the fact that these digital technologies these are going to change the way we work.

(33:52) And so if a leadership team in a company believes that, and then gives their people the digital technology that will allow them to redefine their industry and redefine the way they work, generally that gives the environment that you’re looking for for effective change to happen. But that by itself won’t make it happen.

(34:14) You also have to have the bottom up part of the cultural change, where the individual person being impacted actually believes that this is going to give them the ability to do a better job. It’s going to give them the ability to succeed at the things that they think are important in doing their daily work.

(34:30) And so I see these big introductions of digital technology at a very low take-up rates, but what we’ve usually seen is the top-down work has been done. But the change management and human element work hasn’t been done two make sure that the workers don’t just take it as a new tool that is disruptive to what they‘re doing. But they understand that it’s a new tool that enables what they’re doing.

(34:55) And if we can get that balance right of the top-down and bottom up, that’s where we see the massive adoption of change occurring.

Vala:               (35:01) You mentioned GE and industrial Internet of things GE engines and sensors and machine to machine communication, and machine to people. Are there specific industries that are you know, particularly innovative in terms of not just IOT, but just digital transformation in general?

Mike:               (35:21) I wouldn’t say there are actually. You know, when we look at what GE is doing, certainly they work across multiple industries with their platform. But they compete with companies like APD and Siemens, Snyder Electric and others who all have their own versions of what GE is doing, across multiple industries and geographies.

                        (35:42) So I wouldn’t say that I would hold out a particular industry as being too far ahead or frankly even too far behind. I think we’re seeing change across all the industries and certainly within Accenture Digital, our demand is consistent. It’s across industries, it’s across geographies and there’s not a single geography that I can point to where we don’t have demand organically in that country for significant change. And there’s not a single industry that I can think of that isn’t actively thinking about not having to disrupt what they’re doing to do it more effectively.

                        (36:16) So I wouldn’t hold anybody out as a big leader, and I wouldn’t hold anybody out as a big lagger. Although certainly the early adopters have got a much more rapid pace of change going, and some of the people who are slow on the take-up and who are just out of the gates have gotten more work to do to catch up in terms of enabling a faster pace of change.

Michael:         (36:38) Mike, obviously there’s a clear connection between innovation and digital transformation efforts, in fact, I think one could say that the two are inextricably linked. What about the idea of using start-ups as an extension of corporate innovation efforts. What do you think about that?

Mike:               (37:01) Well first of all we see a lot of it and we think it’s very healthy. We do it and we have an innovation programme at Accenture at our central labs organization that Accenture Digital that are actively engaged with the incubator for venture capitalists and private equity firms and entire start-up communities.

                        (37:19) But we’re also dealing with the labs at the universities, we are dealing with the labs at companies like Microsoft, SAP and Oracle, Cisco, and Intel, and (unclear 37:27) and lots of others, where we’re trying to understand how to take those early stage innovations to where they are going to make a difference.

                        (37:38) And any of our corporate clients are doing the same thing. Many of them have their own labs, and many of them have got their own incubation program’s where they are bringing that incubation in. We do something with financial services called (Pin-tech? 37:49) where in New York, London, Asia we actually invite companies to come in who are all early-stage start-ups. They get evaluated by our clients, by the private equity investors and by Accenture.

                        (38:04) We pick 12 of them and host them in our offices for the summer, and each of the 12 goes out and does a pilot program with one of our clients. And we work together in the summer with our clients and the start-ups to help both of them go through that learning curve to work with each other.

                        (38:21) That program has been immensely successful, and we’re now replicating it in other parts of our business. So we believe it’s absolutely healthy to have start-ups as part of the incubation and innovation process.

                        (38:34) Having said that, on balance, one of the things that a lot of our clients are struggling with which is, where does innovation occur? And our point of view is that you know it’s easy to read all of the stories in the press about what’s happening in Silicon Valley, and he in Israel, London, or other places around the world that are known as kind of digital hubs. But we are seeing just as much innovation occur in the large companies.

                        (39:03) Right if you look under the covers of a company like JPMC or British Petroleum, or shell or ABB, there’s a ton of innovation going on in those companies. And that’s true across industries, so I just hold them out as examples because they’ve all got case studies that you can read about in the press on interesting innovations that they’re working on.

                        (39:25) But we think there’s an absolute ton of innovation that goes on in these large companies is going to make a huge huge difference in how they operate. And our perspective is when clients come to us and say, I want to run an innovation programme. We usually ask them if they’re sure that that’s what they want to do. Because we don’t think innovation for innovation sake is a good use of their time. What we ask is what problems are you trying to solve.

                        (39:50) And who can be most helpful in solving those problems. Sometimes it’s members of another start-up community. Sometimes they’re right there in your own staff. Sometimes their members of the ecosystem who you already partner with in another part of the business. Where you could be bringing their assets and your assets and capabilities together, you could do something really interesting.

                        (40:07) So what we say is less not talk about innovation for the sake of innovation. Let’s talk about specific problems and then think about how you solve those problems.

Vala:               (40:16) Mike can you give me and my peer CMO’s advice in terms of you know how we can successfully lead or actively participate in terms of you know business digital transformation

Mike:               (40:32) Well I guess the first advice that I would give to leadership teams is listen to their people. Because there are lots of people in your organization who have got fantastic ideas, and they have the energy to make a change.

                        (40:46) In many organizations aren’t well structured to take that input and act on, right because they’ve got the process and the management structures in place to create predictable results. What they don’t have in place is the management structure and processes that allow the organization to take the great ideas that exist with their customers, with their employees and with their business partners and do something about them.

                        (41:10) So that ability to take that input from the ecosystem that you are already part of, whether it’s a business partner, employee, or customer and then go and do something with it. To me that is the biggest missing piece of the puzzle. It’s not a lack of knowledge about what’s possible, it’s frankly that most organizations that are set up to try and generate predictable results, are not thinking about how they enable that disruption in the sustained management structures and processes that exist inside the company.

Michael:         (41:40) Mike we only have a few minutes left, but I know that you have some interesting ideas, innovative ideas on the use of data and analytics in the government, and that’s been a topic that we’ve explored on CXOTalk quite a bit. So maybe can we close out by you sharing some of those thoughts on what you’ve seen out there?

Mike:               (42:00) Yeah, so absolutely, first of all we supplied a lot of the government’s around the world that are actively working on understanding the data that they collect and making that available as a public asset that others can use. And we’ve seen that now as you know, a very successful early stage activity, where the governments are really actively generating very valuable datasets and making them available for others to use.

                        (42:26) The other thing that governments are starting to do is to allow other people outside of the government to give them ideas on how to take advantage of data, not only from the government, but that exists elsewhere to do a better job of running their governments. As an example, you have all probably heard of the app that you can have on your phone that allows you to record where the potholes are in the city automatically as you’re driving around. And have all of that information flow into the city so they know where the potholes are, and how many people a day are hitting each pothole, so they know which potholes to go and fix first right. Taking advantage of that external dataset that the government didn’t generate but somebody else did and using it to do a better job running the city, absolutely one of the things that they’re getting smarter about.

                        (43:14) But another thing that we’ve seen in government is the ability to use social networks in the data that you can get through social networks, to do a better job of writing legislation. Because as opposed to only having the staff from a particular government entity involved in drafting the legislation, they can actually open drafts of the legislation out and asked people, what are the unintended consequences that would occur if we pass this particular form of legislation. And you as the public can give us input into alternative versions of this legislation that might give us more effective results as we continue to create the solutions that the citizens are looking for.

                        (43:56) And you know I think as we think about managing the datasets, taking advantage of external datasets, taking advantage of collaboration and input from lots of different places, the governments are finding that they can do lots of interesting things, that fundamentally change the way that they execute their mission. And we think that they are literally in the early infant stage of understanding how powerful analytics can be, and actually affecting the change that they’re trying to impact.

Vala:               (44:33) Mike, you’re dropping some major science on us. I can barely keep up with Twitter and I’m looking forward to about 3000 word blog summary of 45 minutes. Thank you so much.

Mike:               (44:48) It’s been nice thank you so much and it’s just a fantastic time to be doing what we do at Accenture digital, because as I said we get to work with clients across every industry, every geography. We get to experiment and learn together with our partners and ecosystem. And frankly we get to work on interesting projects that really do change the way the world is going to work and live. So it’s been fantastic to be here with you. I enjoy your blog and I look forward to learning from the others that you have on the program. So thanks a lot.

Michael:         (45:20) Well thank you so much. You’ve been watching episode number 96 of CXOTalk and we’ve been talking with Mike Sutcliff, who is the Group Chief Executive of Accenture Digital. And Mike, you’ve given us and education in digital transformation, so thank you so much and I hope that you’ll come back and join us another time.

Mike:               (45:45) I would absolutely, it would be my pleasure. Thanks guys, it’s been a blast being here today and I’ll look forward to our future conversations.

Michael:         (45:52) And everybody watching thank you so much for participating. Next week we have a great show, which is a panel on corporate innovation and start-ups and accelerators and incubators. So tune in next week at the same time and I hope everybody has a great weekend. And again, thanks to Mike Sutcliff, and Vala as always it’s a pleasure and it’s the highlight of my week to do this CXOTalk with you.

Vala:               (46:21) Mine as well, thank you very much. I hope you enjoy the Super Bowl. We have to customers competing for the Super Bowl XLIX trophy. This is a great weekend.

Michael:         (46:31) Alright see you later everybody, bye bye.

 

Companies mentioned on today’s show:

 

Accenture Digital:                              www.accenture.com

Uber:                                                   www.uber.com

Apigy:                                                  www.apigy.com

GE:                                                       www.ge.com

APD:                                                    ?

Siemens:                                             www.siemens.com

Schneider Electric:                             www.schneider-electric.com

Microsoft:                                           www.Microsoft.com

Intel:                                                    www.Intel.com

Oracle:                                                www.Oracle.com

SAP                                                      www.sap.com

Cisco:                                                  www.Cisco.com

British Petroleum:                             www.bp.com

Shell:                                                   www.shell.com

JPMC:                                                  www.jpmorganchase.com

ABB:                                                    www.abb.com