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SAP's Millennial CIO: The Changing Role of IT

Thomas Saueressig, CIO, SAP
Thomas Saueressig
Chief Information Officer
SAP
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK
Dion Hinchcliffe, Chief Strategy Officer, 7Summits
Dion Hinchcliffe
Chief Strategy Officer
7Summits

The Chief Information Officer role is changing dramatically, driven by shifts in expectations from external customers, internal clients, and business leadership. For the CIO, this means rethinking relationships with all these groups. In this episode, we talk with a Millennial CIO to learn from his perspective on the evolving role of IT.

Thomas Saueressig is Chief Information Officer, Senior Vice President, Global Head of IT Services and a member of the SAP Chief Technology Officer circle. In his role as SAP CIO, he represents the entire IT organization internally and externally and is actively rejuvenating the IT organization to become agile, user-centric and business driven with a cloud first approach. As global CIO of SAP, he is enabling new business models as well as optimizing business processes by leveraging the latest technologies and innovations while providing a modern workplace.

Thomas has vast experience in the global IT organization, having led multiple organizations, always following his vision to become a user-centric IT organization and with this not only deliver great user and customer experiences but also change the perception of IT. Starting with building up the Enterprise Mobility organization and leading all cross functions, over to heading the entire IT Project Delivery and Client IT organization globally. Prior to this, he supported Executive Board Member Gerhard Oswald as Executive Board Assistant in his daily operations and strategic projects. Thomas started his career in SAP Consulting where he successfully led multiple CRM customer projects. Thomas was named in the renowned Fortune 40 under 40 list and holds an executive MBA Mannheim Business School (Germany) and ESSEC (France).

Transcript

Dion Hinchcliffe: Hello and welcome to the CxOTalk Episode #236. It’s a Tuesday, June 6th, 2017. We have a very special show for you, today. We have the Global CIO of SAP, Thomas Saueressig, as our special guest. And with us, we also have Michael Krigsman, founder of CxOTalk, who will also be joining us for the conversation today on the Millennial CIO: The Changing Role of IT.

I’d also like to thank Livestream for all their support in broadcasting the show. You can go to Livestrea.com/CxOTalk for a discount on Livestream. And so, let’s get going!

Welcome, Thomas, to CxOTalk. I think it’s your first time on the show, right?

Thomas Saueressig: Yes, absolutely. Thanks for having me! It’s truly a pleasure to be here with you!

Dion Hinchcliffe: Absolutely! And, Michael, glad to have you be with us today, too! It should be a great show.

Michael Krigsman: Hey, thanks so much, Dion! And this is exciting! So, this is part of your regular, every-other-Tuesday series of conversations with CIOs. And, of course, I do my show on Friday. So, Dion, thank you so much!

Dion Hinchcliffe: Absolutely! But we have such a special guest; we thought we would both have a conversation. And it goes back a while! We've done several online shows, not on CxOTalk, with Thomas. We learned his story. He’s part of a new generation of CIOs with a new way of looking at IT, a new way of looking at service delivery, a new way of thinking about working. So, Thomas, tell us a little bit about SAP, about your role you’ve been in for about a year now, and give us a sense of how things are going!

Thomas Saueressig: No, thank you! Yeah, basically, SAP is the world market leader with regards to enterprise applications. That means we want to empower companies in more than 25 industries to run that company best, meaning trust lines of business from marketing, to sales, to finance and all the others, to empower the business. And that also comes along with, at SAP, and being the CIO within SAP; I need to ensure that I support and enable the new business models of SAP. SAP is 45 years old, and we are coming from a licensed maintenance business model, and now, for sure, impressively moving to the cloud which means subscription and consumption-based. And here, we also aspire to become the most innovative cloud company in the world. And as a CIO, for sure, you need to see how to make that possible, how to enable this for SAP as a company, which has multiple dimensions.

On the one hand, how to enable these digital business models, how to make the business process. But on the other side, how actually to provide a digital workplace to the employees; how to make the users of SAP the most productive in the world. And that's certainly part of the role to enable this, actually.

Michael Krigsman: So, Thomas, when you talk about making this change from an on-premise world to a cloud-based world, tell us what is involved with that.

Thomas Saueressig: Actually, this has multiple dimensions. If you look at it from a […] perspective, in a licensed world, you have a big deal, up-front cash, and then you basically monetize it throughout the maintenance period you have. In the cloud world, with subscription, you have these massively […] revenue streams. And this is changing the entire fundamental […]. It also needs to change to a culture of sales, which we see. So, it's a lot of pressure on the sales side, but also, the same on the finance side. If you think about the difference in liquidity management and treasury, which we see, which we need to enable to make that possible. So, this change is going through the entire company end-to-end, starting with digital marketing approaches, starting with high-volume sales processes as well. And that’s exciting as well, to get new sales channels. So, SAP is also happening… We’re going into online sales, into digital sales channels, with the sapstore.com to facilitate the trial and buy process throughout

Dion Hinchcliffe: Hello and welcome to the CxOTalk Episode #236. It’s a Tuesday, June 6th, 2017. We have a very special show for you, today. We have the Global CIO of SAP, Thomas Saueressig, as our special guest. And with us, we also have Michael Krigsman, founder of CxOTalk, who will also be joining us for the conversation today on the Millennial CIO: The Changing Role of IT.

I’d also like to thank Livestream for all their support in broadcasting the show. You can go to Livestrea.com/CxOTalk for a discount on Livestream. And so, let’s get going!

Welcome, Thomas, to CxOTalk. I think it’s your first time on the show, right?

Thomas Saueressig: Yes, absolutely. Thanks for having me! It’s truly a pleasure to be here with you!

Dion Hinchcliffe: Absolutely! And, Michael, glad to have you be with us today, too! It should be a great show.

Michael Krigsman: Hey, thanks so much, Dion! And this is exciting! So, this is part of your regular, every-other-Tuesday series of conversations with CIOs. And, of course, I do my show on Friday. So, Dion, thank you so much!

Dion Hinchcliffe: Absolutely! But we have such a special guest; we thought we would both have a conversation. And it goes back a while! We've done several online shows, not on CxOTalk, with Thomas. We learned his story. He’s part of a new generation of CIOs with a new way of looking at IT, a new way of looking at service delivery, a new way of thinking about working. So, Thomas, tell us a little bit about SAP, about your role you’ve been in for about a year now, and give us a sense of how things are going!

Thomas Saueressig: No, thank you! Yeah, basically, SAP is the world market leader with regards to enterprise applications. That means we want to empower companies in more than 25 industries to run that company best, meaning trust lines of business from marketing, to sales, to finance and all the others, to empower the business. And that also comes along with, at SAP, and being the CIO within SAP; I need to ensure that I support and enable the new business models of SAP. SAP is 45 years old, and we are coming from a licensed maintenance business model, and now, for sure, impressively moving to the cloud which means subscription and consumption-based. And here, we also aspire to become the most innovative cloud company in the world. And as a CIO, for sure, you need to see how to make that possible, how to enable this for SAP as a company, which has multiple dimensions.

On the one hand, how to enable these digital business models, how to make the business process. But on the other side, how actually to provide a digital workplace to the employees; how to make the users of SAP the most productive in the world. And that's certainly part of the role to enable this, actually.

Michael Krigsman: So, Thomas, when you talk about making this change from an on-premise world to a cloud-based world, tell us what is involved with that.

Thomas Saueressig: Actually, this has multiple dimensions. If you look at it from a […] perspective, in a licensed world, you have a big deal, up-front cash, and then you basically monetize it throughout the maintenance period you have. In the cloud world, with subscription, you have these massively […] revenue streams. And this is changing the entire fundamental […]. It also needs to change to a culture of sales, which we see. So, it's a lot of pressure on the sales side, but also, the same on the finance side. If you think about the difference in liquidity management and treasury, which we see, which we need to enable to make that possible. So, this change is going through the entire company end-to-end, starting with digital marketing approaches, starting with high-volume sales processes as well. And that’s exciting as well, to get new sales channels. So, SAP is also happening… We’re going into online sales, into digital sales channels, with the sapstore.com to facilitate the trial and buy process throughout the entire web experience which we offer.

And now, this is exciting from an IT perspective because if you look at it, if an end-user, a customer of SAP, is going to sapstore.com, and gets a trial, buys the solutions, all online. Basically, the idea is to make that without any human interaction. So, 100% optimized and automate the entire process. So, IT is becoming part of the value chain. And that's exciting that you're not only supporting these things but basically, you're the fundamental enabler of the technology platform to have these new business models enabled.

Dion Hinchcliffe: Right. Well, this takes this […], we’re in a new era of IT as you’re talking about it becoming its own P&L in its own right and becoming part of the business. So, what do we look at? What is the optimal role of the CIO today? The role is clearly changing, you’ve seen my writing, the things I’m talking about; you know we need to be much more customer-centric; we must be talent magnets because we need people who can build that digital future with which we'll run our business. But, what do you see in the role of the CIO? And does it change by industry or company, or is it really kind of a new perspective broadly emerging?

Thomas Saueressig: I think you’re pretty right. In the core moment in time, when you look at the technology which we have at hand, IT needs to lift the role to have this custom experience in the center of all those activities and, to talk about business outcomes. It’s not about providing a solution here or an education there. It's not about operating infrastructure. It's talking about the business outcome of the company that we can drive with our activities. And that’s a different level of discussion we need to have because…

That's also if you think about the cloud. A lot of people, if they think about cloud, talk about, "Oh, I just want to move workloads from A to B," when they talk about technologies or something like that. But fundamentally, the advantage that CIOs now have with leverage in the cloud, is that you can get rid of commodity service that you, for yourself, can focus on the whole value chain of the company.

I will give you an example. If you are in a certain industry, managing data centers, managing service and all the replacement depreciations and something like that, basically, you spend a lot of time from an IT perspective. And those kinds of topics. But these are not part of your core value chain because your core value chain is most probably having a great customer experience, having a great go-to-market, enabling new business. But it's not about the data center or operations, which means, if you now go to an infrastructure-as-a-service provider, and you get rid of your infrastructure, you basically free up mental capacity. And that's important for you that you can spend your valuable time and to keep differentiating things for the company. And it's a different kind of thing how to fuel the cloud. And that just was one example with regards to Infrastructure-as-a-Service.

The same, we have with Platform-as-a-Service and Software-as-a-Service. You need to see how you can focus your entire energy and those of your organization on core value-delivering, differentiating capabilities for a company. And that’s…

Dion Hinchcliffe: And that’s very interesting. So, it sounds like you’re a major proponent of outsourcing in somewhere, offloading in some way, the tactical aspects of IT; the lower parts of the stack, if you will; and focusing on the strategically significant bit of the business, to the core of what the organization does. Is that correct?

Thomas Saueressig: Absolutely! You need to focus on exactly this value at which we deliver as a company. And that, for sure, means, on the one hand, what I mentioned with regards to business processes, but also, never forget your end-user; your employee; who is working in your company which you want to make the most productive in the world. And that's… Because thinking about SAP, SAP has no warehouses. We don't have a large supply chain. We don't have production chains. So, in my case, if I want to increase the productivity of SAP, it's only working on improving the productivity of the employees. And that's the reason why we changed our strategy to become a user-centric IT organization. And that's a very fundamental decision which we took to place the user, the internal user, or an external user, in the center of our activities. Because, it also comes as a […] how an IT organization needs to work to serve our users in all regards, in the entire delivery process as well. And that is, I think, a very important factor as well.

Michael Krigsman: Thomas, how do you create an IT organization that is user-centered? So, in other words, when you say “user-centered,” can you drill down and elaborate what does that mean, exactly?

Thomas Saueressig: Yeah. Very good. And that’s exactly [it]. It starts already with a project initiation. So, if we talk about new projects which we deliver, we changed [to a method where] we purely talk about user stories. What is the impact we generate by the user? What is the change of how he's working in the future when we do that project? If we are not able to articulate that in a solid way, then most probably, we don't have exactly the knowledge of what we need to do. And we need to clearly can articulate that change. So, user stories, the user value; each and every single activity is key. But it also means we need to involve the real end-users, not a business operations team or our sales organizations. We involve real account executives together to validate our mock-ups, our prototypes. And this is also something which is very important. You need to make it transparent. The people need to see to understand what it means. And that means a lot of markups, a lot of prototyping, but involvement of the user to validate and give feedback along the way, in a very iterative way.

So, you could for sure, say agile will help, because you have more iterative ways to develop your application. And for sure, end-user testing is key. And again, I mean the real end-user, not the business operations team. Fundamentally, if you do approach it, you need to also ask the user afterward, after a couple of months, "Did the change we aspired to really come through?" So, the user service and the user feedback is essential for us. That’s the reason why we have regular IT client satisfaction surveys, regular employee surveys at SAP overall, but also what we did within our organization…So, each and every […] application and each and every single mobile application we have, has the possibility to drive straight feedback from each end-user directly to a responsible product owner within IT. And that means every real response that's accountable for IT gets rated feedback [that's] positive, but also negative. And that's very important that we have a straight direct, communication line from the end-user to the IT because we don't want to hide in between our buildings. We don't want to hide behind processes. We want to go center-stage to the users. We also do a lot of activities and campaigns to get the straight feedback from the users. That’s a key thing which is important for our culture; taking feedback with services.

Dion Hinchcliffe: And if you say you can put the users on center stage, and your leadership is well-known over the last year or so in talking about empathy as a key focus ... One of the things that were really interesting about the new Gartner CEO Survey is that most companies don’t seem they actually have KPIs around this. How does empathy appear at the top level? I mean [to] measure it. Do you guys have a KPI, or are you managing to that? I mean, how do you make sure that you’re actually doing that follow-up at the very end to make sure you deliver the right solution?

Thomas Saueressig: Exactly. And so, certainly, that’s something which we established in our delivery process that after each and every single project, we send out projects so it's to get feedback around it and that we, as I mentioned, have these regular client satisfaction surveys for the IT solutions.

We also have some service projects throughout the year for specific areas with high usage. And, this is something everybody has on my team in his goal settings, actually, to really get closer to the user to get this feedback and mention that very seriously. Actually, also, the specific KPIs we have around client satisfaction where we for sure want to continuously increase the client satisfaction, even if we are already actually, based on benchmarks we have, under the top 10% of IT organizations. But again, our aspiration is high to even [the] product first. Absolutely.

Michael Krigsman: And, Thomas, what are the skills and the capabilities that need to be in place inside IT to make this happen? Because, clearly, when you talk about empathy, you’re not just talking about empathy for the computers and for the wiring in the walls. There’s something beyond that! [Laughter]

Thomas Saueressig: [Laughter] Absolutely! I think the mindset is a key topic anyway for an IT organization because you need to have a mindset that people really want to help people on every occasion. Not hiding between processes, but really understanding that process is just made [so] that they actually should help people; and if they don't need [help], to treat them. So, the mindset is a key topic. But, if you talk about the roles and the skills within the IT organization, you can receive that as a change for multiple reasons also based on the move to the cloud.

On the one hand, we see changing technology skillsets. So, if you take the classical SAP IT organization, where you most probably have a lot of hard skills, now we see SAP cloud platform with new technologies. We now talk about Java, JavaScript, […], CSS, and the like. So, you see, on the one side, the technology shift of skill sets that we have, but on the other side, also considering the multiple cloud solutions made most probably used, actually. You also see more need for orchestration, so cloud orchestration: the integration capabilities to integrate the multiple best-in-class solutions in terms of a seamless end-to-end process. So, integration skills are absolutely key. For sure, security is something which is must-have; to have the right focus on security throughout this entire enterprise architecture which you have in mind.

So you see, actually, different roles which are now getting more center stage in the core, and between the past couple of years. So, we've certainly … We see that change. And also, what is quite exciting to see, we need more business skills in IT, actually. We need to be able to consult more and advise the business as well because if we embrace best-in-class public cloud solutions, for sure, we can do a lot of configuration. For sure, we can do some extensions and differentiating applications on the Platform-as-a-Service, like […] platform. But still, this is also that we now need to take a different role advising to the business to make it work.

And I also believe if you see the multitude of cloud solutions between […], IT is the central organization to need to make that work in a holistic way, to have a seamless integration. Because, at the end of the day, if you talk about the need to cash the process, this needs to be tightly integrated. It doesn't help you if you have spots and you can see point solutions there. We need to talk about customer master data. You need to have that straight. So, data quality is a key aspect in the cloud. And that's something, if you think about all those aspects, we need to come together. You see actually an increased relevance for the IT organization, especially in the cloud to make that work. And that’s something we’re I believe we see a push also in the next couple of months that IT needs to have a stronger role in orchestrating this entire enterprise architecture, end-to-end.

Dion Hinchcliffe: Yeah, so we heard you talk about the business, you know. We've always had this classic divide between IT and business; the IT department software in their own building in many organizations even today. But, you're [part of] a new generation of CIOs that are coming in and looking at things with different eyes. And as I hear you talk about things like the cloud that I heard you talk previously about, your belief in being responsible for stakeholder happiness, which I've never heard CIOs talk about; can you talk a little bit about your guiding approach or philosophy of IT at a high level? Where is this all going? Are we going after the cloud? Are we going to manage happiness in the end? What’s going to happen there?

Thomas Saueressig: Yeah. As you mentioned, I mean certainly … As I mentioned, I mean … Our key purpose for the IT organization is to enable SAP to become a digital enterprise with happy end-users. That’s basically the progress of the IT organization of SAP. And what you see is multiple aspects of the purpose. The one aspect that we briefly talked about is digital enterprise. What does a real digital enterprise mean? And here, I have always referred to, on the one hand, digital business process and new digital business models. And on the other hand, the digital workplace; how do people work? And at SAP, I mean, we have more than 190 locations, more than 86,000 employees around the globe and you need to bring them together and you need to connect the people because I also fundamentally believe that innovation is only happening by connecting people. A diverse set of people. And that’s where IT needs to have a huge role to make this digital workplace happen in that way, to try, actually, innovation at SAP.

On the other hand, you also heard the sentence "with happy end-users." And that means, with all our functions, from project delivery, from IT support, IT operations, all the functions, I mean, they are customer-facing. They need to ensure ... They need to have an emphasis upon the end-user when an application's not working. When something's not working, they have a huge pressure point because they also serve our customers; which means, are you really ensuring that IT organization has the empathy to serve our employees? And it needs to [be in] the best possible way because they are in a pressure situation as well. And this is a very important topic.

And, this comes along with some guiding principles, for sure. User-centricity is one principle I already mentioned, which is totally key. The next principle, which is also very important is Agile. And when I talk about Agile, it's not purely about the project methodology what Agile means, like “strong or […]". I also talk about the culture around it - from a mindset perspective, that you are adaptive to change, that you are actually positively reacting to change, and [what] change requires. And that's something, especially for the IT organization, [that is] very important because the business is a paradigm and we are in an exciting market these days with changing business models. So, we cannot just say, "Oh, we now work on this project for the next one year, and then we have an outcome." That will not work. We need to see that, first of all, we have quick results and business outcomes on the one hand, and on the other hand, when something's changing, we need to be able to react on that in a very positive way and make that also work.

So, user-centricity, Agile is key. Then, for sure, for the aspect of the cloud: That also, here, again, is the notion that we not just want to have the cloud for the sake of having the cloud. It's really about that on the one hand, quickly delivering innovations and value to our end-users, but also to ensure that we have the right level of focus and key differentiating aspects of our […] and not just on the commodities that exist by the side. That's also an important key element.

And, with those, we had leading, guiding principles. We drive the IT organization [with them], for sure, supplemented with one which should never be forgotten which is part of each and every IT organization, is that of rock-solid operations. I mean, stable operations are the key for each and every single company in the world. We need to ensure business operations. And that's the foundation where we, then, at the end of the day, build on our innovations on top of that. If stable operations are not given, nobody will thank you for the innovations because you need to get that right. And that's even more important that you have the right level of, you know, working models in place; operating models; to have stable operations so that you are going to focus on innovations, on value delivery, for your business. And that will also lift up your discussion that you have.

Also, if you think about topics like enterprise architecture, enterprise architecture is a key asset every IT organization needs to have - having a plan [for] how to transition from today's world into the new world, actually, into tomorrow. And when I talk about the enterprise architecture, this is nothing where I would reduce to any IT topic. For sure, it compromises the application architecture. But, it for sure should also have data architecture [with] roles and processes included because, at the end of the day, you want to talk about business capabilities. So, business capabilities are your anchor point where you talk about your lines of business. That's what they understand, and that's what you want to improve. Business capability. And the business capability itself is set up with different applications, data models, data points, role to fulfill this specific business capability as well as the process. And, now, you can tweak those four dimensions to improve your overall business capability.

And, this is something you also need to come into multi-year discussions with them [about]. So, if you talk about a business strategy, about a line of business, for the next three years, basically you want to see what that means for the specific business capability. And with that, you turn around the discussion from a pure IT I want to replace with an ERP system that forces them… What exactly is the business capability I am sure I want to improve? My liquidity management? My cash management? What do I want to do with real-time analytics on top of that? So, we need to go away from an application or IT-centric discussion as well.

Michael Krigsman: So, clearly, there are many, many moving parts to this. And I want to remind everybody that you’re watching Episode #236 of CxOTalk. And, we are speaking with Thomas Saueressig, who is the CIO of SAP. And, we have an interesting question from Twitter. Sal Rasa, and in a way, gets right to the heart of what you were just talking about, Thomas. And, he says, "How can IT become a hub for digital transformation internally, to make practices and processes like HR more modern and bring innovation? So, it gets right to the heart of the issue.

Thomas Saueressig: Yeah. I think that’s a great question because if you talk about digital transformation, the important piece is that it’s always coming along with multiple stakeholders. It’s never only IT alone. It’s always complemented by the various business functions, and that’s the important, key aspect. Also, each project which we do, they are business-driven. So, we talk about what do you want to achieve with the business? So, in this case, with regards to HR, for sure, you need to talk with HR about the plans for how to […] for talent, which means, how to increase the […] to get the best talent, to recruit the best talent. And automatically, you have one component: recruiting. How do you prove the recruiting in a digital world? Like, with online recruiting; like machine learning that you automatically screen the right CVs, actually, fitting to the job description. And then, you already discuss how to improve that business capability actually using machine learning for recruiting.

The next topic is for sure that you want to have an employee experience throughout his entire lifetime at a company. So, starting with onboarding, what do you do with onboarding? How do you get the best level of education right to the employee? And this is for sure complemented by [something] that they get right away: they want the best possible key setup. But here, these are the discussions, then, which need you need to have with the business organization [about] business capability [while] leveraging for sure the modern technology to support it. But also, really thinking about how you are getting leverage - like, innovations like machine learning into each and every single one of those processes to make them more efficient? And then, basically, we transform business functions; we transform the line of business that is there, and even more importantly, we also need to see the interfaces between the lines of business. If you talk about HR, it never should be only the internal organization.

We also need to talk about the external workforce. And then all of a sudden, you have global procurement as the next line of business joining again because you won't have a total workforce discussion; which means your internal and external workforce, and how you actually develop your entire organization and derive skillsets and roles. And now, you have to bridge the gap between procurement and HR to make it transparent, and also the reporting throughout the entire total workforce discussion. And here, you see, by focusing on business applications, and, as well, the interfaces to other lines of business, the IT function would actually be the glue between the entire company. And that’s what you need to recognize, and that’s where you need good people in your team to actually bridge the gaps, respectively build up the bridges between the lines of business.

So, IT, in my opinion, has a huge need, [to have a] collaborative function throughout the entire company. Because there are not many functions like HR who are [relevant] across each and every single line of business […]. So, you do see that interface as an IT organization. And now, it’s also your […] job, actually to go fix it and go bridge the gap between some line of business […]. And this is something I can just recommend to everybody: highly collaborative [role] to really join the forces with the various business owners and make that work. And again, think of the product picture across lines of business; not just HR.

Michael Krigsman: Dion?

Dion Hinchcliffe: So, if you’re talking about a very holistic view of IT, and I think that encouraging … The question was about this IT as a digital transformation hub. Let’s draw on IT and that hub: is it to cultivate innovation from the business, or is IT really supposed to lead innovation? Or is it really a partnership, and if there’s a lot of discussion about who’s going to be driving digital transformation these days?

Thomas Saueressig: Yeah. I mean, at the end of the day, if a company itself is becoming really digital, then it means that each and every single function of the company needs to be digital. And then, all of a sudden, you have a different [feeling about] the topic of Chief Digital Officers here, CIOs here, CMOs there. I think this is something where when you have the right level of maturity, I mean, everybody should have that in their DNA to think about digital. But, we are not in that moment today, which means today, for sure, there are various functions [that] push a lot of business functions into that direction, which makes sense. But, at the end of the day, it's a partnership approach, which is the key to success. So, collaboration, what I meant [before], is required.

But if you think about innovations, technology innovations like artificial intelligence: I certainly have the aspiration that the IT organization needs to try because we are close to the market. We know what's technically possible. We see that every day. And for sure, we need to look at how we could best leverage those technologies to involve it within the business processes of a company. And that's where, for sure, the IT needs to drive that innovation and discussion in the company to push the various business functions. And also, at the end of the day, with that, inspire our customers to have a customer experience which is exciting to see, because they get the right […] at the right moment in time. And again, technologies like artificial intelligence will help, and you need to try that and bring that into the company.

Michael Krigsman: Thomas, you mentioned earlier the importance of IT operations and maintaining stable systems. And so, how do you now manage to maintain infrastructure and have skill sets that are necessary in order to maintain infrastructure and do that really well? And projects; standard project management and so forth, and project portfolio management? How do you do that and at the same time maintain IT as a highly innovative force inside the company? It seems like there are very different skills and roles and requirements. How do you do that?

Thomas Saueressig: Absolutely. I mean, it’s certainly clear that as an IT organization, each and every IT organization has that challenge. And one insight providing stable systems and to create operations. On the other side, to drive quickly and agile innovations. I think this is something every IT organization is faced with. And now, I believe … And we also heard a lot about bimodal IT and topics like that. And I think, from a conception discussion, it is highly exciting to talk about a bimodal IT. But fundamentally, it's about enabling a two-speed IT architecture where on the one hand, we have stable systems, but you need to be able to [quickly] build up […] innovations on top of those. And this is something where such an architecture is the essential driver for that success.

I’ll give you an example, actually. For sure, every larger enterprise has a hybrid landscape. It has some cloud solutions and has some on-premise solutions. That's for the larger enterprises certainly as setup which is on the market. And now, you will see some on-premise systems where you have delivery cycles where you have perhaps, once or twice a year, a release. But still, you want to provide on a monthly basis, perhaps, innovations for this specific area.

What we did actually at SAP to enable this two-speed IT architecture is actually leverage the SAP cloud platform. So we exposed services from the premise system to this SAP cloud platform. And now, at that moment, I can now start building a new application on edge for these on-premises to continuously evolve this and use the stable APIs […] on-premise system. So, I can iteratively improve the applications, the experience for employees, and actually, still have the stable operations on an on-premise system as well.

I’ll give you one concrete example how we did that to make that really crisp. We had actually, at SAP, two on-premise ticketing systems. One for IT tickets and one for business tickets like for all the shared services, and for finance, HR, travel, facility management, and the like. And the employees of SAP came to me and said, “Look, Thomas. I really don’t understand why we have two ticketing solutions. I want to have one system where I can, you know, glaze my ticket, and actually, one system where I get my inbox where I get the solutions." And, quite frankly, five years ago, most companies would have probably started a massive migration project from one on-premise system to the other on-premise system; which you know you need to align the categories, you need to have some data migration. It would be a two or three-year program, and at the end of the day, you just have, you know, the outcome that you have […] for the tickets.

We actually decided against those. We [also] kept on-premise systems, but we build a new application on top of the SAP cloud platform, leveraging functionalities and business rules out of these on-premise business systems. And now, we are responsive to sign for each and every single device, and that means within the six weeks, we were able to provide this unified ticketing application with one inbox and that now, this is the starting point for an exciting journey. First of all, the employees had quickly this innovation and this great user experience with […] on each device, so only one system. But now, actually, […] our paths. So, the second step was, we used the public cloud solution, SAP Chain, where we have the knowledge database of SAP. And, employees going out to this floor application can type in the keywords that automatically get all the relevant knowledge articles that, perhaps, actually, you don't even need to create the ticket [for]. Because, for sure, the IT organization would want to try to reduce the number of tickets because as an outsource partner, I would need to pay for tickets. Which means, now we [would] combine two on-premise systems, and one public cloud solution, with this SAP cloud platform application on top. So, that was the second iteration.

And the third now was with machine learning, because in the machine learning services of the SAP cloud platform, basically, we are able to include and introduce the application in an internal round, which is just amazing from … It was also four weeks only, and now an employee is typing in a description. Basically, we can automatically determine the right category, you know? Ticket classification that we brought on the first level depending upon who is the responsible team because sometimes employees just choose the wrong category. And, we can automatically provide the right solution, which we have in our knowledge of the business as well.

So you see, we still live in a hybrid world, two on-premise systems, one public cloud solution, but we leverage this cloud platform for iterative and agile innovations in a quick way, harvesting and leveraging innovations we did actually in the past. But, the employees quickly get these innovations. And still, we have two very stable on-premise systems in the back-end for the functionality which we have in there.

And now, the exciting piece if you think about it, from an end-user perspective, you have created your applications in the cloud working on every device, where you get, every month now, innovation. So here, actually, the end-user ... He or she doesn't know what the back-end system is anymore. And now, it's actually IT who can charge, "What do we do now with migration? Do we wait? Do we migrate to a public cloud solution at some point in time?" But that's decoupled from the user. And that's also giving us a good position in our enterprise architecture discussion on how we handle it. Because from a user perspective, we solve the issue, and even more, we are giving innovations now on a regular basis to the end-users based on the agile two-speed IT architecture that we have. And I think that’s a great example where such an architecture can help on the one side, stabilize operations; leveraging investments; but also having this possibility for quick innovation on top, which is essential because nobody will wait for IT. We need to be quick. If we are not able to show quick innovation, for sure, the line of business will ...

Dion Hinchcliffe: Absolutely. I did a CIO survey, which in fact, you recently participated in, and we clearly saw 96% of CIOs are either under significant or great pressure to move faster. But, when we look at how to do that, I mean, you mentioned siloes earlier on in our conversation. And, you know, we've had IT around for nearly 40 years, and we've been having the silo conversation from the very beginning. How does a CIO cultivate the right business relationships? What advice do you have? I mean, you talked about procurement. You talked about HR. You talked about accounting functions, time to cash, and lots of other interesting things that touch into the different business areas. How are you pulling them together? What would you advise CIOs to do to get better at that?

Thomas Saueressig: Yeah. I think the most important advice is most probably that you shouldn’t care about the recognition because I believe that we can achieve so much if just avoid the discussion about the recognition for success because it's a show and game. And if you actually help the business users and the business owners to shine, and to have success, they would love to really work with IT because they know that actually, they are better off with working together with IT. So, that's a very important topic and dear to my heart because, at the end of the day, it's about the user, it's about value for the company which we deliver, and not about individual successes. And that's the first, very important aspect.

And the next aspect like this: You need to be proper. You need to be able to connect multiple people in the organization. And by connecting the people, you need to show that they are all … that the sum is more than the parts. And, that’s something which is very important to translate, actually, to your business owners as well. So, the key aspect, and again the recognition aspect from a psychological aspect that you should not forget. And, I think IT can be a great enabler for that. And, they will highly value and appreciate your support, actually, in making them successful, because refer to what I said in the beginning. It's about the business outcome, and that's what we should have in your mind with that way from an IT perspective; that the business is successful with what they do with the end-customer of SAP; or, in this case, our business units; is more successful. It's not always about the success of IT. That is always the wrong discussion. It's always the success of the business.

Michael Krigsman: But, Thomas, does the business also need to learn how to relate to IT in a new way? Because, the business, historically, has looked to IT to be that kind of services provider of technology. So, what does the business need to learn?

Thomas Saueressig: I think multiple aspects. I mean, certainly, they need to learn that in a new world, when you see all that technology and innovation, that it is a digital world, nowadays. And that means you need to get out of traditional thinking morals to see how can each and every single company in each industry now really become digital? And that again is going throughout the entire organization, from marketing to sales, down to the support organization, finance organization; and here, IT plays a fundamental role in enabling that. And each and every line of business needs to understand that, again, it's only working together with IT also across boundaries to make that work and to leverage these new technologies, and also new thinking about it.

I mean, the IT organization also needs to provoke a discussion within the company to say, "Look. If we now take this, why can't we enable this digital channel for our company? Why can't we provide a different level of support? For instance, why don't we have a social support? Why don't we have chat support?" And actually, by the way, when we have support, why can't we use chatbots, actually, for the first level in a large way? So, [we are] dealing now with these new technologies influencing the core value chain in improving those [channels]. And this is something where for sure, with the technology we have, you can go into these value chain discussions and improve that end-to-end. And that's what you actually need to do, and the business needs to acknowledge that without the help of IT, it would be a very difficult option.

Dion Hinchcliffe: Yeah. That makes a lot of sense. And, yeah, so this is … All this conversation takes us to the evolution of the cloud, the push for innovation and digital transformation, and it really brings us to the question of where does the traditional operating CIO go as opposed to innovation-driven or digital CIOs who are focused on the forward-looking aspect of it? We know that 80-90% of the CIO budget goes to operating what we call "Legacy Mountain," right? All the things that we build up, […] in most organizations, literally hundreds or even thousands of legacy applications which are important, but as you said, they're really becoming tech where that’s something you should figure out how to offload in some way. What’s the future, you know? If we’re looking five or ten years ahead, where is this all taking us?

Thomas Saueressig: Yeah. And I mean, you are spot-on. Certainly, every year, we need to work on getting out of the operation or […] into an innovation-driving function. Otherwise, you become irrelevant because somebody in the company will take that role because no company can wait. You need to innovate consistently, and you need to have an IT organization who can do that. So, if you focus too much on … Or, if you only can focus on operational tasks, then you are doing something right. And you mentioned it: If you talk about the move to the cloud, then certainly, this is about offsetting some of your commodity services to providers. So, if you talk about infrastructure, pieces move to the infrastructure [of the cloud.

If you talk about a certain commodity service, which you have on-premise systems for, put them into public cloud solutions. Invest in cloud Software-as-a-Service solutions so you don’t need to worry about those anymore. And you orchestrate this. And then, with the freed up capacity and resources, you can again turn them into focusing on the core value chain and differentiating capabilities, and you need to do that. You also need to be able to work on functions in your organization, really working on enterprise architecture, innovations; really keeping the focus on the latest and greatest innovations doing some proof-of-concept, and to see how this could influence the existing distance operations. And that's something which is important, and you need to be able to do that. And, moving to the cloud on all the different layers will actually help you in this journey.

And that's what I mentioned in the beginning. You need to get the mental capacity of your organization focused on the key topics, and not commodities. But for sure, there's a lot of work. You will have hybrid scenarios along the way, because in the next couple of years, by using something like this SAP cloud platform as an agile innovation platform, these are elements which will make you successful because you can continuously innovate and on top of those, leverage the latest and greatest technology already along the way - because you also need to gain time. And that's the important piece as well because this is not a transition from day to the other, but you also don't have now three years where you say, "Now, I have three years [to] clean up my enterprise architecture." Nobody has that time because the competitor will already have passed you in three years, which means, you need to see how you can have this quick innovation value and in services on your organization as well. And again, you’re right. I mean, if you don’t live up to this innovation and master each and every relevant role from an IT perspective, somebody else will take that.

Michael Krigsman: Thomas, we have about two minutes left. So, just in one minute, you’re a Millennial CIO. You’re one of the few Fortune-500 Millennial CIOs. And, does that come into play, just in one minute? Is that relevant? Does that come into play? What about that?

Thomas Saueressig: I think actually, if you talk about Millennials, it’s not about age. That’s very important for me. It’s not about age. But, it’s about a different kind of mindset and thinking which is coming into the workforce, and you need to ensure that with the services due to arrive, that you have a different level of how you serve your end-users, how you serve your customers, how you want to deal with innovation, how you want to actually adopt innovations in a quick way. And this is something where a Millennial, for sure, has a huge interest to get the innovations out of the door; to get the close user feedback; to have new ways of working. I mean, if you talk about how people want to work in the future, for sure, this is something where we need to provide greater answers to have this digital workplace; to be able to work everywhere, anytime, where you are, and in the best possible way. And these are topics where I believe a different mindset is now coming into the organizations, and that’s the prime factor. But, it’s not age.

But for sure, I believe the new workforce which we see will change how companies function. You need to think about different leadership skills; how you lead, actually. Millennials and actually, the grown workforce with that mindset … And this means, yes, from a mindset perspective, there’s a lot of topics where I believe there will be a huge push into each and every single level of the company.

Dion Hinchcliffe: That was fantastic! Thomas, we really appreciate you taking your time to join us today on CxOTalk and sharing your thoughts on how IT is evolving, how we’re connecting the business and IT, becoming more agile, moving to the cloud; so that was a fantastic discussion. And you will be able to see this on YouTube in a few days. And we would appreciate your time. Michael, do you have any closing thoughts for us, today, as we talk to the CIO that’s […]?

Michael Krigsman: I thought it was so interesting, Dion, to hear the way Thomas thinks about placing the customer as the reference point. And, it’s not just language, but he has built up the IT operating model and the enterprise architecture all thinking about that. I mean, don’t you think? Isn’t that interesting?

Dion Hinchcliffe: I think it's unique with respect to how he's connected a very direct line between the customer and the way IT operates. And, not just during the initial process of engaging the customers, because this is the old requirements […], but all into the very end of the afterword saying, "Did we do the right thing?" So, I think that kind of … That's real customer-centricity and I agree that coming up with the enterprise architecture behind that is really the hallmark of I think the next generation of IT.

Michael Krigsman: And of course, we’re talking about IT. We’re not talking about the marketing department. We’re talking about IT in exactly the same language that the marketing department might speak about their relationship with customers and end-users as well.

Dion Hinchcliffe: I think it’s a very consumerized view of IT, and that’s the future. And, I always enjoy talking with Thomas. He has a very fresh perspective; a different one than we’ve heard before. I love this discussion about happiness and the whole message around empathy. It’s the right thing and it’s hard to actually do. It’s always been hard to do in IT and we’re seeing now a sign that it can be done much better than it has been. So, very good start.

Michael Krigsman: Well, clearly, there’s a lot more to talk about. So, Thomas Saueressig, thank you for joining Dion Hinchcliffe and me for Episode #236 of CxOTalk today. Thank you so much, Thomas.

Thomas Saueressig: Thank you!

Michael Krigsman: And Dion, I’m the interloper on your Tuesday CIO show, so thank you for allowing me to interlope, as they say. [Laughter]

Dion Hinchcliffe: Always a pleasure, and really glad you can stop by, Michael. Thank you for coming.

Michael Krigsman: Everybody, we have another show on Friday and tune in. And, come back. Take a look at CxOTalk.com/Episodes to see the always current schedule. And while you’re at it, you should “Like” us on Facebook. [Laughter]

Dion Hinchcliffe: [Laughter]

Thomas Saueressig: [Laughter]

Michael Krigsman: Thanks so much, everybody. And, have a great day. Bye-bye!

Yahoo CIO: Rethinking Information Technology

Ben Haines, CIO, Yahoo
Ben Haines
Chief Information Officer
Yahoo Inc.
Dion Hinchcliffe, Chief Strategy Officer, 7Summits
Dion Hinchcliffe
Chief Strategy Officer
7Summits

The technology industry is changing faster than ever, demanding new types of leadership to ensure IT systems meet the sky-high bar that is set across the sector. Growing workforce expectations in tech firms, combined with modern technologies, have pushed even leaders in Silicon Valley to innovate further and improve service delivery while embarking on ambitious programs of digital transformation. In this episode, Ben Haines, Enterprise CIO of early Internet pioneer Yahoo, shares his ideas on rethinking IT to meet these shifts head-on in today's exponential digital era.

Ben Haines leads a team of over 400 people in enterprise IT at Yahoo. His responsibilities include ensuring all Yahoo workers are productive, from all corporate applications to the help desk. Ben Haines was previously the CIO at Pabst Brewing Co. as well as the former CIO at Box. He is an enterprise IT and business professional with over 17 years IT leadership experience. This visionary strategic executive has a focus on short-term execution for immediate results while developing a wide-ranging point-of-view the challenges and opportunities of today's IT fast-moving IT environments. Ben understands how to embrace new technologies responsibly while managing large budgets, executive expectations, and shifting end-user needs.

Transcript

Dion Hinchcliffe: It’s Tuesday, June 20th, 1 PM Eastern Time, 10 AM on the Pacific Coast. This is Dion Hinchcliffe. I'm doing this show from Bangkok, Thailand today. I'm on my way to Frankfurt for an event. So …

[Cutoff]

… then Box, formerly, and then Yahoo as well. So Ben, welcome to the show.

Ben Haines: Well I am […]. How are you?

Dion Hinchcliffe: Very good! So, welcome, and Ben, most recently you’ve been the CIO of Yahoo, but apparently there’s been some events happen in the last week or so, so you have some exciting news to share? Maybe give us a little bit of an update; you’ve been on the show before; about how things are going? What’s the news? And tell us what’s going on with you?

Ben Haines: Yeah! Some exciting times. Really busy right now. So, Yahoo was purchased by Verizon. The deal closed last Tuesday, so we’re starting fresh and getting into some deep merger work. And, we’re effectively combining AOL and Yahoo together to form a new company called Oath, which is a house of at least fifty brands, which I still don’t know all of them, but they put out brands like TechCrunch and Huffington Post. And we have Yahoo Finance, Yahoo Sports, just an amazing opportunity to bring two giants together and, yeah, get some awesome stuff working!

Dion Hinchcliffe: Oh, fantastic! So, that sounds like a big, new responsibility. Can you give us the … How big an IT empire that is for you to manage?

Ben Haines: Yeah. So, it’s, you know, very similar companies, and similar size. We’ll end up with somewhere between 14,000 employees, I think, and globally, we have about … you know, what I know so far, about 800 applications across the companies that we now have to merge together. And, we have to get everyone productive as fast as we can, and also keep revenue moving, of course.

So, yeah. There’s a lot to do at a global scale, which is really exciting. And, it gives us the ability to also … Time to change to do things that you couldn’t have done when you’re keeping the lights on, and there’s just all these reasons now to make some really big, hairy moves and draw some lines in the sand and get things moving, and shut down tech debt. So, it’s actually really exciting to get into this.

Dion Hinchcliffe: All right. So, the big news is: the CIO of both, now.

Ben Haines: Yes.

Dion Hinchcliffe: Umm, and, you’re primarily a media and technology company?

Ben Haines: Correct.

Dion Hinchcliffe: So, that 14,000 employees count is very different in terms of the amount of IT you have for employees by much higher than it would be in a traditional organization. Is that fair to say?

Ben Haines: Yeah, I think it’s … There are a lot of similarities, but there are also a lot more demands when you have thousands of engineers that are extremely technical, obviously. And, they have very high expectations. And, you also have a traditional sales team, and marketing team, and finance team. But, the DNA of the company is different because everyone wants to be as efficient as possible, digital … And, it’s just great to work in that environment because you have less explaining on the “why,” like “Why do we have to automate this process?” You have more to do around, “Well, why can’t it happen now?” And, we know how technology will […], and everyone knows everything. So, there’s a different pressure, but a more positive pressure of, “Yeah. We just want to get it done and less explaining, which is awesome.”

Dion Hinchcliffe: Yeah, exactly. For those of you just joining us, we’ve got Ben Haines, CIO of Oath. A new role. We’ll be taking your questions on Twitter. The #cxotalk hashtag, if you look at that or post there … We’ll be monitoring Twitter, you can post there, and I’ll ask Ben your questions.

So Ben, the core role of the CIO today: One of the things you said that was interesting to me was “keeping the revenue flowing.” I think

Dion Hinchcliffe: It’s Tuesday, June 20th, 1 PM Eastern Time, 10 AM on the Pacific Coast. This is Dion Hinchcliffe. I'm doing this show from Bangkok, Thailand today. I'm on my way to Frankfurt for an event. So …

[Cutoff]

… then Box, formerly, and then Yahoo as well. So Ben, welcome to the show.

Ben Haines: Well I am […]. How are you?

Dion Hinchcliffe: Very good! So, welcome, and Ben, most recently you’ve been the CIO of Yahoo, but apparently there’s been some events happen in the last week or so, so you have some exciting news to share? Maybe give us a little bit of an update; you’ve been on the show before; about how things are going? What’s the news? And tell us what’s going on with you?

Ben Haines: Yeah! Some exciting times. Really busy right now. So, Yahoo was purchased by Verizon. The deal closed last Tuesday, so we’re starting fresh and getting into some deep merger work. And, we’re effectively combining AOL and Yahoo together to form a new company called Oath, which is a house of at least fifty brands, which I still don’t know all of them, but they put out brands like TechCrunch and Huffington Post. And we have Yahoo Finance, Yahoo Sports, just an amazing opportunity to bring two giants together and, yeah, get some awesome stuff working!

Dion Hinchcliffe: Oh, fantastic! So, that sounds like a big, new responsibility. Can you give us the … How big an IT empire that is for you to manage?

Ben Haines: Yeah. So, it’s, you know, very similar companies, and similar size. We’ll end up with somewhere between 14,000 employees, I think, and globally, we have about … you know, what I know so far, about 800 applications across the companies that we now have to merge together. And, we have to get everyone productive as fast as we can, and also keep revenue moving, of course.

So, yeah. There’s a lot to do at a global scale, which is really exciting. And, it gives us the ability to also … Time to change to do things that you couldn’t have done when you’re keeping the lights on, and there’s just all these reasons now to make some really big, hairy moves and draw some lines in the sand and get things moving, and shut down tech debt. So, it’s actually really exciting to get into this.

Dion Hinchcliffe: All right. So, the big news is: the CIO of both, now.

Ben Haines: Yes.

Dion Hinchcliffe: Umm, and, you’re primarily a media and technology company?

Ben Haines: Correct.

Dion Hinchcliffe: So, that 14,000 employees count is very different in terms of the amount of IT you have for employees by much higher than it would be in a traditional organization. Is that fair to say?

Ben Haines: Yeah, I think it’s … There are a lot of similarities, but there are also a lot more demands when you have thousands of engineers that are extremely technical, obviously. And, they have very high expectations. And, you also have a traditional sales team, and marketing team, and finance team. But, the DNA of the company is different because everyone wants to be as efficient as possible, digital … And, it’s just great to work in that environment because you have less explaining on the “why,” like “Why do we have to automate this process?” You have more to do around, “Well, why can’t it happen now?” And, we know how technology will […], and everyone knows everything. So, there’s a different pressure, but a more positive pressure of, “Yeah. We just want to get it done and less explaining, which is awesome.”

Dion Hinchcliffe: Yeah, exactly. For those of you just joining us, we’ve got Ben Haines, CIO of Oath. A new role. We’ll be taking your questions on Twitter. The #cxotalk hashtag, if you look at that or post there … We’ll be monitoring Twitter, you can post there, and I’ll ask Ben your questions.

So Ben, the core role of the CIO today: One of the things you said that was interesting to me was “keeping the revenue flowing.” I think there’s this sense now that the CIO has to be much more involved in P&L than ever before. And some companies put a Chief Digital Officer in place for that. How does that work for you? Are you primarily responsible for digital P&L, or is there a Chief Digital Officer, too? Or are you guys trying to figure all that out right now?

Ben Haines: No, we have mul- … It’s too big a job for one person. And, we have multiple platforms across the company in all our different properties and brands. It’s not a one-person job, and I believe everyone at this company has to be thinking like a Chief Digital Officer and how do we monetize, advertise on all of our different platforms. So, the CIO role at this company really plays a major enabling role. So how, when we’re in a merger situation, it’s “how does Employee A get access to all these systems that are on the Yahoo side, but they’re an AOL employee?” And week one, it’s just really hard to make all that happen.

But, you know, we’ve got to keep selling, and we’ve got to merge sales teams together and make sure that everyone can get what they need to get to and things don’t break. Yeah. So, it’s a lot of enabling in this environment.

Dion Hinchcliffe: Yeah. What that … Sure sounds like a lot of what we call "business contiguity," right? Making sure that the lights are on and the infrastructure's running. So, where … How are you going to manage innovation and pushing the company forward? These days, internet and media companies have to move at light-speed, and not trying to get people to try to access the applications. And, is that going to be a challenge for you? Or…

Ben Haines: Yes. So, we're working through different sizes. And, the initial couple of months really is about that business continuity. And, then we’re going very aggressive on what is our long-term strategy. So, when you look at all the applications we have, you know, we don’t need two ERP systems. So, how do we quickly get to one? And, that helps us when you want to move fast. We don’t have a lot of time for analysis. We can’t overthink these things.

And, we can just move on what is the best product to use, and also the best practices and process because teams get caught up a little bit on, “We know the best way to do this, and our world, our process is the best process in the world.” Which is awesome, but some things just need to work. And so, we can move things really quickly by adopting a lot more standards, and especially when it comes to the “plumbing,” I call it; but adopt the standards as fast as we can and then move into the pieces that really start to differentiate the business and help move the business forward.

So, the speed is a major catalyst to make some decisions and, you know, cut things, cut bad habits, and bring in new processes and new technologies as needed.

Dion Hinchcliffe: Yeah, so that's … It's the speed and agility, is kind of the term that's in vogue for moving more quickly. I asked the top CIOs that I could find, I think I included you on that survey, Ben, about whether they're feeling pressure this year to move quickly. And 96% said they felt either strong or very strong. 63% said there was very strong pressure to move much more quickly in 2017. How are you dealing with that? What is the … What tools are in your tool chest that you're bringing to bear to help move more quickly, or what are you experimenting with?

Ben Haines: Umm, look it all starts funnily enough, with people, and helping explain why some things need to happen faster than others, and also, making sure everyone understands why; why do we have to move fast? Finance has an objective that Sales isn't aware of, and finance is trying to move faster than Sales, that Sales needs to be aware of why that's important and get everyone on board. And once you get that communication and collaboration across the […]. So, this is a really … It's especially, I believe, all IT and CIOs really honing in on as we work across all these departments, and we have that visibility. So, we've got to make sure that everyone understands why we're doing this first. Otherwise, people start to block things.

And, once we get them on board, then we look at what are the next tools and systems we need to move with. And some things just take time, and you’ve got to work through. You know, systems of record can be challenging. But, you know, if everyone understands why we’re doing it, then the business can also give on some of those things that I really think they want. But, you know, if I use WorkDay, for example, you can do some amazing things in there, and spend a year configuring it, or you can spend three months and get it working. And then, let’s iterate.

And so, you start to bring some of the agile concepts, really, into some really traditional platforms. And, it’s like, “Guys, let’s just get that foundation in, and then let’s just iterate on top and have that schedule.” So, it’s not spending a year spending the perfect solution and everyone then loses interest, it’s getting that base and then moving forward.

Dion Hinchcliffe: Yeah. And, one of the interesting things about agility is that the goal is to do, build the right thing for the customer; provide the right thing to the customer with whatever resources that you have. And, I’ve had developers come to me and say, “I don’t like having to re-do things over and over again until it’s right.” And, this is kind of the old “Throw it over the wall!” mentality we have. Do we have to unlearn or rethink some of our old preconceptions in IT to modernize? And, so what are those things that you think IT needs to kind of change?

Ben Haines: Yes, we definitely need to unlearn the traditional waterfall approach to everything that we have. And, it's very challenging in a systems-of-record space and ERP and spaces like that. And, we have to get comfortable with some failure. And, I think that’s really important and we're not going to fail on delivering a P&L and revenue. There are some limitations. But, there are things where let's at least get it out there and see what people think. If you're building an intranet, or let's "get that in the valley," we call it; a minimal, viable product.

And, we can really learn a lot from our production engineering teams and product engineering teams and apply that to IT, and just like, "Let's get it out there" … It can't be horrible and bad, it’s got to have the right user experience and have a solid foundation. But, yeah let’s get it out there and see what people think, and then let’s iterate and build on that.

And, you know, I still see a lot of traditional IT people. They’re looking for the ultimate blueprint. And we’ll spend six months on the ultimate blueprint and all of that. And, we can’t move fast enough like that. So, that’s probably the biggest thing I think we need to unlearn.

Dion Hinchliffe: Yeah, and I think somebody will be surprised at … It's even Waterfall, you know; "agile" has been the mantra for ten, fifteen years in the development space, right? But, projects still, at large, have a beginning, middle and an end, right? And so, the people look at it that way. I think it's very interesting and telling what you said about that perfect blueprint. And this, the traditional IT skillset was around engineering, right? It's about this careful planning because the company's counting on the system to run the business. So, there's risk management and governments, and all these things that the end-user doesn't understand has to go into it. But, I think that we’ve perhaps overinvested in that skillset and not enough on the people skills, right? This whole design thinking around empathy for the user.

So, what are your thoughts? I think it’s very interesting what you said about “learn from product engineering.” Are you actually trying to take product engineering know-how and kind of move it forward into the IT side?

Ben Haines: Yeah, so little things like turning the conversation around to have product owners, and a product owner owns the life cycle of that product, and they bring teams together. And when we’re done, it’s different for different groups, but we’ll bring teams together where a product owner will actually have business analysts and engineers in the one team. And, you know, they’re not having to go across siloes and speak to different managers and get everyone […]. Like, no, you just own it. You own the life cycle of that product, and you need to make it happen. And, you know, that gives some awesome accountability. And, it takes the conversation from an engineering conversation like you said to a product and business user engagement conversation. So, and I’ve been able to do it with some teams. You know, it’s a little harder if you’re in Oracle ERP. But, I still want … I got product […] and just keep trying. So, that’s one of the biggest things we’ve done and we’ve changed entire teams around.

And, you know, just little things; if, you know, you want to upset engineers, you just tell them they can’t sit where they’re sitting. They’ve got to sit next to the analysts. You’ve got to sit with the product owners, you know? And they can’t hide in the background and, you’ve literally forced all these teams together and said, “Alright guys. You’re all in this together, let’s make this work.” And, we’ve had some success. We’ve had some failures as well, but you need to do that to learn.

Dion Hinchcliffe: Well, yeah. And I’ve talked to several CIOs, who, in trying to implement things like Agile or DevOps, which is the other sexy topic of the day, it’s either those that are reticent and it’s not so much the training that isn’t efficient. It is the holdout. So, people who have a hard time adjusting their mindset.

We just had a comment on Twitter from Jeff Sussna.

Ben Haines: Ah, Jeff. Yep.

Dion Hinchcliffe: Yeah, author of "Design and Delivery." And, he commented explaining; this is your comment about telling the "why" we've got to move faster, right? And, I agree with that completely. If people understand the motivation for something, they […]. But, he said it’s not sufficient. He says you also have to guide them through experience, right? So make them walk the walk. And, I’ve seen this too. Until they’ve been in the trenches with you, they can’t really understand. What are your thoughts on that?

Ben Haines: Yeah, I agree. The “why” is just a start. And, I think that’s the trick. If you don’t start with the “why,” yeah, you’re starting on the wrong foot, really. And so, you are helping to work everyone through that and work through experiences. The more knowledgeable people you have, that helps that whole conversation. It’s like, “We tried it here. Here’s what happens; it failed miserably, so here’s why we need to do it this way.” That definitely helps that conversation, for sure.

Dion Hinchcliffe: Yeah, exactly. So, what do you see as the big shifts, Ben, in today’s IT operating environment, right? What’s coming in and kind of just wrecking all the chess pieces? Is it mobility? You know, previously, in your position at Yahoo, Yahoo has been one of the few companies to get mobile right, if you ask me.

Ben Haines: Right.

Dion Hinchcliffe: But, most companies are getting everything up into their apple cart […] by trying to go into mobile, because it’s hard, really hard. But, now there’s artificial intelligence and Internet of Things, and going to public cloud, although I suspect that’s not a problem with you guys. What’s really starting to get on your radar and forcing you to spend more attention than you might be ready for?

Ben Haines: So, the mobile one is an interesting one. I feel like it’s one area we’re kind of failing at from the enterprise standpoint, and it’s grating me quite a bit because I came in here just over a couple years ago, and just found a lot of hurdles from an enterprise perspective how to get my bar – which, we are really carrying towards. And this is one of those things. The catalyst of change now is, “Okay. We have to bring all these applications together.” And now, Model Now is mobile-only. Like, if it doesn’t work on mobile, you’re going to have a real tough time getting that application cleared through the integration process.

Dion Hinchcliffe: Most people won’t use that, right? Most people use mobile these days.

Ben Haines: Yeah.

Dion Hinchcliffe: Majority …

Ben Haines: Exactly! So … right. So, there’s this awesome forcing function now, where I’ve got to make sure my infrastructure’s correct and, you know, there’s going to be work around … Our […] doesn’t work on a mobile device. It’s horrible. But, maybe, it’s not really designed to and there’s a certain class of worker that’s okay, because they’re sitting on their phone or their PC their entire day, and that’s where they’re at.

So yeah, we’re really starting to force that function on mobile, and our fallback will be web-only so you should be able to work through a browser. And, that could potentially get to a Chromebook-only-type experience. Different groups have different opportunities and capabilities to move to that model, but that’s really where we’re heading.

The other big piece is probably no surprise is security. And, it’s been a really interesting journey for me, personally, because I went through mid-2000’s where IT was … we were the “department of ‘no’” and you must use a Blackberry because it’s the only secure thing, and you must be on the VPN and connecting to all our resources because that’s the only secure way to do it. Went through the startup of their whole […] space and that was going to change the world, and everything’s on the internet and the consumerization of IT. And, I think we’re not back, but we’re in a very different security world, right now when if comes to technology. And, we have to be a lot more considerate about security. And, not regress all the way back to the “department of ‘no’,” but we have to educate everyone in the company about there are secure ways to do things, these days. If you don't have two-factor as a default, you should not be upgrading. You should not be a CIO, as far as I'm concerned. If you're not mandating two-factor authentication in your company, that’s just a baseline and then let’s start from there.

So yeah, that’s probably the biggest challenge for us right now is making sure you blend that end-user experience. You know, we can’t get back to the “department of ‘no’,” you have to blend that into a secure end-user experience and that’s probably the biggest nut to crack right now.

Dion Hinchcliffe: Yeah, that cybersecurity, which can be a career-ending event, you know, for IT leaders. You know, that is the tail that’s wagging the dog. And, if you look at the CIO priority surveys that always come out every year, the real priority at the very, very tippy-top is that security. We have to make it all safe and work, but it tends to all of a sudden monopolize budget, time, attention, and makes it hard to innovate. And so, what happens with things like shadow IT? We see that in this wave of new tools and technologies just kind of pouring over the firewall into our organizations. I have people calling me up and say, “We just saw this survey, and 20% of our workforce is using WhatsApp to do their work,” right? So, we have no control over that. What do you do about all of that?

Ben Haines: Yeah. Look, it really starts with a lot of education. The security is not the CIO’s responsibility. It’s not the CISO’s responsibility, and I love CISOs because they help us and they hinder us, but we have to have this awesome partnership and work together – and share that burden, really, of security. Look, it’s a company problem and if you want to be that person that brings in that application that suddenly all your employee data is now available on the internet because you went around policies, that’s a risk you are taking. And, you have to … but you’ve got to go company-wide. Like, “Here’s why,” it’s back to “Here’s why we need to be secure,” and “Here’s why you need to do this.” And we’re doing our best to make it fast and deliver things as fast as we can in a secure way.

So, we’re just starting that because shadow IT to me is a reflection on IT. And, we're not doing what the company needs, and it’s two-sided. There are factions or business groups in the company that just don’t … They just want to do it themselves because they want to own it, and ... But that’s also a bit of a reflection. I mean, we haven’t built that relationship. They don’t understand how we can deliver and how we can help, or there’s history and you come into a 20-year-old company where IT hasn’t delivered, and you’ve got to rebuild that trust. And, you rebuild that trust through executing and showing, “Well, here’s what we can do,” and if you make it easy enough for the business, I believe most of them don’t … As long as they’ve got so many things to worry about, you can tick the security box; you can let the people [know they’re] productive and they’re awesome, and I can actually get on to running my business. So, it’s a complex beast. We’ve got to work toward it.

Dion Hinchcliffe: Yeah. And, so this brings us full-circle. The title of this episode is "Rethinking IT in the Exponential Era." And it's this exponential growth of tools and technologies and the standards that you were talking about earlier, and the needs of the business to move much more quickly. Can IT do it all? I mean, this is the question I'm seeing start to be asked, is a little, tiny department, you know, that's consuming 5-7% of revenue, to technology enable the entire business and the whole supply chain, and meet all customer needs. Is that realistic? Do we need to think of a new way of empowerment and enablement? How are you thinking about that challenge?

Ben Haines: Yeah. I think there are certain things we need to rethink, and we're just starting this journey here now with the new company, which is awesome. But, how do we provide platforms to enable people to be self-sufficient? And, give them data, think about internal APIs and putting these, I guess they’re large, but these secure platforms in place that people can then … Like, business intelligence is a big one. It’s just data everywhere. So, how do we provide some data access tools, and then enable analysts? If we don’t need to be writing reports. The days of IT writing reports are well and truly over. How do we get that data that we bless; it’s coming from the single-source and all of this traditional data management governance happens. And then, they can write the reports they want to write. And, that’s just one example, I think.

If you look at different platforms where, you know, how do we get … You […] tried to do it but to me, they’re kind of a big legacy application now. And they wouldn’t like me saying that, but they’re complex, but the clarity of space, I still think there’s some work to be done where you can have these people building smaller applications which are very departmental in nature, and it’s solving their problem which IT is like, “Well, we don’t have time to get to that departmental issue.” And how do you provide them guidelines and architectures, and guidance around, “Yeah, go and build this app and this platform. Knock yourselves out. We know it’ll be secure.”

And we give them wrappers around identity. Identity is critical! How do we provide all of these foundational wrappers so that they can be enabled? I don’t have the answers. I think that’s kind of where I think we need to be heading, and that’s what I’m working through the team with on that.

Dion Hinchcliffe: Yeah, and I don’t think anyone has definitive answers. There have been some interesting success stories. Things that, you know, like change agents or IT champions programs where, you know, you let them experiment or let them bring a shadow IT experiment into the cold, and you look at it and say, “I’ll make it safe and secure,” or “no, I have to help you replace it.” So, I think there are some signposts that kind of show us where this is all going.

So, one of the things in your background, because you and I had a long relationship in the industry; I know that you know a lot about the digital workplace and things like collaboration. And that’s been changing a lot, and I know you’ve kind of been at the forefront of that. How is that evolving in high-tech organizations like yours right now?

Ben Haines: Yeah, it’s really interesting. The fallacy of one collaboration platform is there. There isn’t. There is not one collaboration platform. And, to standardize a company of ten-plus thousand people on one platform is a fool’s errand I believe, right now. And it’s really interesting. You know, there are "holy wars," I call them, over different tech tools. So, we've got the Slack thing going on here, and you have the HipChat, Camp, and everyone loves the tool that they want to use. And we actually build an integration platform, to, I think we call it “SuperChat,” my team has a little hack thing they did; to connect different chat platforms because, you know, one team was in HipChat, one was in Slack, and they liked it because they liked it and there are different integrations in the backend tools and all of that. And, they also wanted to be on the same conversations, so it’s like, “How do we get the chat tools actually talking to each other?” So, the collaboration space has really moved into that chat messaging side of it. That’s kind of risen to the top as what everyone wants to use. But, we’re still buried in email. It’s still about reality.

You know, intranets to me, I’ve seen, really have … You know, they’re still just a place for people to go to get really good information, but there’s not a lot of social collaboration happening, I believe, in the intranet space – at least in our company. It’s still that destination to go to. But, everyone’s really starting to focus on chat. And we're going to see that blow up because there's too many … There's an overflow of information. There are too many Slack channels, there are too many HipChat channels, and people don't know where to of to get information. It’s going to be interesting to see. It’s sitting back a little bit, and just watching that evolve, because IT can’t sit and go, “Well, here’s how the company’s going to collaborate.” Let’s throw it out there and they’ll tell us how they want to collaborate. It’s quite interesting.

Dion Hinchcliffe: So, I mean, I run into this a lot in organizations because my background is also in the digital workplace. And the question is, should we train workplace to modulate their collaboration to be more efficient? Or is too much collaboration or too little collaboration not good? Do you need to be in the middle somewhere? Or, is it a filter failure issue, as […] said? And, we want to capture all that information, but we need this knowledge, to manage the knowledge better? Where are we going? Because the firehose is a complaint I hear from everyone I talk to now.

Ben Haines: Look, I think it starts as a people problem, at first, and then you can solve it with some technology. But, you know, it’s an interesting one because there’s a lot going on and … There’s a lot of good conversation that the departmental but even the smaller groups and teams, where they’re talking and just working. It’s not a company-wide communication thing, that I believe. But, yeah. I don’t know how much success we would have. I think it’s a … If you try to explain about why do you have to be blasting out all this information to everyone? Like, who really needs to hear it? But, people are opting-in. And so, it’s a person’s choice if someone has their Slack channel and someone’s interested, they’re opting-in to that conversation. If they don’t like it, then they can opt out, you know, and filter that. But, I still think we need to see how this evolves. It could be interesting.

Dion Hinchcliffe: So, it sounds like you are falling more on the side of some digital collaboration skills [you] need to teach in this much more open communication era.

Ben Haines: Yeah, it’s an awareness. Where are people? What do people really need to hear? And, but I do think the technical side will come into play, for sure. And, like I said, the opt-in is … We have many different channels here and I don't opt-in to a lot of them because I can't filter a lot of the information. I don't know what's relevant. And it's kind of bad, but I have some people that I say, "Look, I need you to move on to this and let me know if anything comes up that I should be aware of."

Dion Hinchcliffe: And hopefully, it won’t be people in the future that will have these artificial intelligent agents that can draw our attention to things that need to be done. The unblinking gaze, as it were.

Ben Haines: Yeah. Definitely.

Dion Hinchcliffe: So, that brings us to the next topic. So, collaboration is a problem that most organizations are trying to get better at in the way of unengaged employees. Over half of organizations are just doing the least that they can. But, how do we collaborate better with the business today, given that they have more needs, and they also have more options to get IT. They don't have to go to you, Ben. And, I suspect, as most organizations, they sometimes don't. But how can we get them more involved to come to us first and when they do, how do we be responsive? Because it's the back-end issues. So, you've already got fifty projects. How do you service them? You know, this is what's driving the CMO away because they're at the bottom of the list, because it's not considered mission-critical.

Ben Haines: Right, right. So, it’s getting that organization alignment. And, I have different business teams at different stages, and different levels of trust are really what it comes down to. And now, it’s all we’ve got to start again for certain reasons, because we have different leadership now. With the merger, it’s kind of interesting but also scary to start rebuilding those trust levels.

You build the trust by executing. So, if you’re in there, and you’re at everyone’s trying to work together and you’re executing and I found a business, they don’t mind. They actually prefer you to be helping. It’s where you don’t have that trust, and where you don’t have that … You’ve got to prove why you’re doing it and how, how you can help. And, that is people-to-people, but talk to people and work through it. And then, there’s also once you get the company aligned … An organization’s wasting money and duplicative service to what we offer. You know, that’s a pretty basic conversation if we’re doing it right. And, you know, there’s money wasted. People are always happy to have … remove some topics and have those costs.

So, that’s one angle we work through. And … But I really look at my team to build those relationships, and really get into how can we help? And then, when you find departments that aren’t funded well enough, sometimes, we have money they don’t, funnily enough, but … You know, there’s a team I know that are trying to do something. I’m like, “Well, that, to me, is .5 of an engineer of an analyst and I can help you and make that happen,” “Really?” And I’m like, “Yeah, because we have the machine and we have it working. We can slot that into a sprint.” And, they’re amazed.

And then, there’s also joint efforts where I’m getting a lot of conversation is, like, well, if IT doesn’t do it, they’re going to go and do it and cost the company more money. So, why not fund IT to do it? And, we’ll do it and it’s in a lot better interest for the company. And, you’ve got to start just getting those conversations. And, like, so shadow IT is a reflection of IT predominantly not doing what the company needs. The fact is the company’s spending money to make that happen, and so we need to prove we can do it better.

Dion Hinchcliffe: You know, that’s very interesting. And I think that’s telling that, you know, you’re willing to sponsor business projects if you see the right opportunity. You have the resources and presumably, maybe some new tools and technologies you’d love to pilot in that area. But, you were talking about that IT has to go deeper. And, I think this is a longstanding challenge, that IT is its own discipline, right? You know, it’s kind of like asking a doctor who spent years and years and years accumulating this rarified knowledge in this special area to also learn to do something else, right? So this is what IT has to do. It has to learn the technology and then, have to learn the business, too. And I see a lot of IT people are reluctant. But I see all the new job skill breakdowns. Everyone’s going to have to be more multidisciplinary, transdisciplinary; be an expert in technology and the business. Is that really going to apply, though? Or are IT groups going to be able to make that move, or is there going to always be this resistance?

Ben Haines: Umm, well it’s the same. Resistance is futile. So, look. I’ve seen, and I look for businesspeople first over IT people. And, a businessperson who understands IT will be more successful, and it depends on the level. Obviously, business and engineers and engineering.

Dion Hinchcliffe: Yeah, the person […] do your market services architecture, but you know…

Ben Haines: Exactly, exactly. But especially when you look at senior leaders and people running business process and product, even development. They really … It's harder to find a technologist who can […] up to the business space. But it depends on their training and background. But, a couple of my key leaders; one came from marketing and ran all these different programs and customer experience and customer support, and how to bend for IT. And, she was great in program management and project management and analysis. And now, she's leading a massive IT team. And, I've had many successes with bringing what I call "business leaders" in, and …

But, you have to have a plan. Like you said, you know, the market service architecture, you know, it’s a very specialized … So, it’s really, I guess, diversity within your team of the business IT; the leaders; is critical - absolutely critical to move forward.

Dion Hinchcliffe: That’s very interesting. So, we’re getting close to the end of the show. And, Tim Crawford, my good friend. You may be familiar with him, Ben.

Ben Haines: Ah, Crawford? […] expert?

Dion Hinchcliffe: Yup. …noted that it’s the impact of consumer engagement and digital collaboration that will impact the corporate world.

Ben Haines: Mhmm.

Dion Hinchcliffe: Do you agree with that statement? I mean, I see, at the top of the list now, along with cybersecurity now, is “customer experience” is the other big conversation. You know, is that the right priority? I mean, what should IT do to keep focusing on [it] if you’re generalizing that way?

Ben Haines: So, we really have a duality here because we have internal customers. And, there’s been all these arguments over here. We are business partners. But, we are providing a service as well, right? And we have to partner, we have to think about that internal customer experience and how is that helping the company, and helping the groups who are together. And then, yeah, externally-facing for sure. It really is. Then for us, as we are a digital company for all intents and purposes. Everything we do is internet-based and so, that is a major critical priority of what is that engagement, and like you said earlier, the mobility apps and all of that cover stuff. So yeah, I think it is. I really do.

Dion Hinchcliffe: And so, it kind of brings us back to rethinking IT. If we talk about the role of the CIO and where it’s going, and we look at consumer engagement or customer experience, is the CDO and the CMO larger going to carry that away and be responsible for that, and the CIO get everything else? I see some of that, and I also see everything rolling back over to the CIO, that it all just gets, you know, dotted line back to the CIO anyway. What do you see as the general trend?

Ben Haines: Yeah. I think of the general trend as you either get the right CIO in place, or you get the incumbent really steps up to it. There’s just this underlying technology gap, well call it, that we are, you know, well-versed in, that the marketing people are … And, for the CMO to be successful, you have to have an extremely strong partnership at the CIO level and enable that, otherwise you create a … you have a very big problem of creating a really big silo that, you know, is … You will be successful if you have the right collaboration in place.

CDO, to me; I see CDO and CIO kind of evolving. And, to me, there won’t be much difference between a CDO and a CIO. And, maybe that’s a logical step. CIOs, if you’re the right type of CIO, you do become a CDO. And it’s really that final piece of that puzzle. Like I said before, we've worked through finance, we've worked through sales, and we digitized all that. Now we're going to consumers. And maybe, that's the evolution of the CIO really, are you are now CDO as you bring in that [tool] and use a consumer experience into that group. But every organization is going to be different, right?

Dion Hinchcliffe: Well, and I’ve actually gone on record as that’s what’s going to happen, and now we’re seeing it happen. We have folks like David Chao, who recently got the CDO role added to the CIO; Alexander Bockelmann and UNIQA Insurance. He recently got the CDO role added to the CIO role, his title. So, I think that’s exactly what’s going to happen for reasons too complicated to go into here.

So, final question, Ben; and I have a tremendous amount of respect for you. You’ve been the CIO at a lot of top organizations. So, thinking back; pulling back at all that experience, all the current trends and issues you’re facing right now; what updated pieces of a device would you have for CIOs just getting into the role today?

Ben Haines: Umm, have a respect for what’s happened but don’t focus on it. [Laughter] So, you know, and if you’ve been lucky enough to have the right leaders that you’ve been mentoring with, that’s great. But, you know, really, we’re changing. We’re evolving. And if you’ve been in the IT space for ten years, it’s extremely different now. So look outside the organization and look at what different companies are doing.

And, you have to network. You have to see where everyone’s at, because what you might be thinking, “Oh wow! This is crazy to do X!” but there are ten other companies who have already done it. And you’re like, “Ah! Okay. That’s not bad at all.”

Look across industries and, you know, have a look at what different industries are doing. And right now, this is my third industry, I guess, that I’ve been in. And it’s very different how they operate. There are a lot of similarities, though. And so, you know, have a look at what’s happening out there.

And, don’t buy the marketing cloud from the enterprise software vendors. Like, they’re there to do a job, and so use something. Make sure you understand how that fits into your vision and what they’re vision is, and, you know, you’ve got to be responsible for that outcome and not just listen to the “marchitecture” coming out of some organizations.

They’re probably some of the big, big topics.

Dion Hinchcliffe: Yeah. The one that really resonated with me is this openness, willing to learn from others that have gone before you because almost no-one's a unique snowflake anymore. There are some battle-hardened people who are further down the journey, and you have to find and listened to them and see what they’ve learned.

Ben Haines: Yeah.

Dion Hinchcliffe: So, great! Well Ben, thanks so much for making time in your busy schedule. I know you’ve got some crazy things going on with all the changes in the organization in your new role. I hope that goes well, and I’d love to have you back on in a year or so to maybe tell us, give us an update on how all of that’s gone. So, appreciate that, and thanks for being on CxOTalk.

Ben Haines: Cool. Thanks, Dion.

Workday: Women in Tech

Ashley Goldsmith, Chief People Officer, Workday
Ashley Goldsmith
Chief People Officer
Workday
Diana McKenzie, Chief Information Officer, Workday
Diana McKenzie
Chief Information Officer
Workday
Christine Cefalo, Chief Marketing Officer, Workday
Christine Cefalo
Chief Marketing Officer
Workday
Robynne Sisco, Chief Financial Officer, Workday
Robynne Sisco
Chief Financial Officer
Workday
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK

Workday is an important player in the enterprise SaaS market, with consistently high customer satisfaction scores and recognition for being a great place to work. Workday also holds the distinction of have four female C-level executives. On this episode we speak with all four these execs, discussing their roles and how they collaborate. It's an exciting and special show!

Christine Cefalo is Chief Marketing Officer (CMO) at Workday. She oversees the global marketing organization, with responsibility for building the brand and creating customer demand in markets around the world.

Diana McKenzie is chief information officer (CIO) at Workday. She oversees the company’s security and global information technology (IT) organization, with responsibility for the internal deployment of Workday products as well as other innovative technologies and programs that create a competitive advantage for the company and serve as best practices to IT organizations globally.

Robynne Sisco, is the Chief Financial Officer at Workday and is responsible for all aspects of the company’s finance organization,including accounting, tax, treasury, and financial planning and analysis.

Ashley Goldsmith is chief people officer at Workday and has global responsibility for human resources, internal communications, global impact, workplace facilities, and the Workday Foundation.

Transcript

Michael Krigsman: Welcome to Episode #241 of CxOTalk. I’m Michael Krigsman, industry analyst and the host of CxOTalk. I want to thank Livestream for underwriting this episode, and if you go to Livestream.com/CxOTalk, they will give you a discount on their plans.

We have such an amazing and interesting show, today. We’re speaking about women in technology. And, we’re talking with four C-level female executives from Workday. And, I’m so thrilled and so thankful for these four women for being here. And so, we are speaking with Ashley Goldsmith, who is the Chief People Officer at Workday, Diana McKenzie, who is the Chief Information Officer, Christine Cefalo, who is the Chief Marketing Officer, and Robynne Sisco, who is the Chief Financial Officer. And, I’ll just ask each one of them to briefly introduce themselves and describe your role and very briefly, how did you get there? And let’s start with you, Ashley. Welcome to CxOTalk!

Ashley Goldsmith: Thank you! So, my job, some people would call “human resources,” but at Workday, we characterize it as people purpose and places, which means I have responsibility for the traditional HR things like compensations, employee development, but also areas like employee communications, philanthropy, and our workplace facilities. And so, my focus is all about the employee experience, making sure that we are creating a great experience so that we innovate and provide perfect customer service.

How I got here …

Michael Krigsman: …

Ashley Goldsmith: Oh, sorry. I gotta keep going though! The way I got here: I fell in love with Workday long before I got here, actually. At least a few years. At my prior company, we were going through a selection process. It was time for us to choose a new Human Capital Management system. And, through that process, Workday was one of the contenders, so of course, you get to know a little bit about it. And I was not totally blown away by the technology, which was incredibly impressive, but I got to know the people. And I was so impressed! [They were] so humble and so smart. So, a few years later, when I got a call about Workday, I knew it was just something I had to pursue.

Michael Krigsman: Fantastic! So, from customer to Chief People Officer.

And, sitting next to Ashley is Christine Cefalo, who is the Chief Marketing Officer at Workday and Christine, you and I have known each other for quite some years now! Welcome to CxOTalk!

Christine Cefalo: Thank you! Thank you for having us! It’s been a great relationship, Michael! So again, really appreciate you having us here today. I’m Christine, as you said. I’m the Chief Marketing Officer. My job is to generate awareness and build demand for Workday’s products all around the world. And, just as important, of course, is to hire and develop great talent to bring our marketing organization into the future.

The way I know you, Michael, is I actually started in communications. I’ve been in enterprise software for about fifteen years. And most of that time I spent in Public Relations and Analyst Relations. As most marketers know, over time, marketing and communications have sort of merged and become an even larger and more measurable part of the business. And so, over the past two years, I’ve been overseeing the whole marketing and communications organizations.

Michael Krigsman: Fantastic! Well, thank you, again, for joining us. And, Robynne Sisco, the Chief Financial Officer of Workday. Welcome to CxOTalk!

Robynne Sisco: Thank you! Thrilled to be here! My path to Workday is somewhat similar to Ashley. I was a customer of Workday’s and just really enamored by the Workday technology, and so ended up coming here five years ago as Chief Accounting Officer, and was fortunate enough to be appointed CFO approximately a years ago. I’m responsible for all of the financial functions of Workday, which includes running all of our financial systems within workday as well.

Michael Krigsman: Welcome to Episode #241 of CxOTalk. I’m Michael Krigsman, industry analyst and the host of CxOTalk. I want to thank Livestream for underwriting this episode, and if you go to Livestream.com/CxOTalk, they will give you a discount on their plans.

We have such an amazing and interesting show, today. We’re speaking about women in technology. And, we’re talking with four C-level female executives from Workday. And, I’m so thrilled and so thankful for these four women for being here. And so, we are speaking with Ashley Goldsmith, who is the Chief People Officer at Workday, Diana McKenzie, who is the Chief Information Officer, Christine Cefalo, who is the Chief Marketing Officer, and Robynne Sisco, who is the Chief Financial Officer. And, I’ll just ask each one of them to briefly introduce themselves and describe your role and very briefly, how did you get there? And let’s start with you, Ashley. Welcome to CxOTalk!

Ashley Goldsmith: Thank you! So, my job, some people would call “human resources,” but at Workday, we characterize it as people purpose and places, which means I have responsibility for the traditional HR things like compensations, employee development, but also areas like employee communications, philanthropy, and our workplace facilities. And so, my focus is all about the employee experience, making sure that we are creating a great experience so that we innovate and provide perfect customer service.

How I got here …

Michael Krigsman: …

Ashley Goldsmith: Oh, sorry. I gotta keep going though! The way I got here: I fell in love with Workday long before I got here, actually. At least a few years. At my prior company, we were going through a selection process. It was time for us to choose a new Human Capital Management system. And, through that process, Workday was one of the contenders, so of course, you get to know a little bit about it. And I was not totally blown away by the technology, which was incredibly impressive, but I got to know the people. And I was so impressed! [They were] so humble and so smart. So, a few years later, when I got a call about Workday, I knew it was just something I had to pursue.

Michael Krigsman: Fantastic! So, from customer to Chief People Officer.

And, sitting next to Ashley is Christine Cefalo, who is the Chief Marketing Officer at Workday and Christine, you and I have known each other for quite some years now! Welcome to CxOTalk!

Christine Cefalo: Thank you! Thank you for having us! It’s been a great relationship, Michael! So again, really appreciate you having us here today. I’m Christine, as you said. I’m the Chief Marketing Officer. My job is to generate awareness and build demand for Workday’s products all around the world. And, just as important, of course, is to hire and develop great talent to bring our marketing organization into the future.

The way I know you, Michael, is I actually started in communications. I’ve been in enterprise software for about fifteen years. And most of that time I spent in Public Relations and Analyst Relations. As most marketers know, over time, marketing and communications have sort of merged and become an even larger and more measurable part of the business. And so, over the past two years, I’ve been overseeing the whole marketing and communications organizations.

Michael Krigsman: Fantastic! Well, thank you, again, for joining us. And, Robynne Sisco, the Chief Financial Officer of Workday. Welcome to CxOTalk!

Robynne Sisco: Thank you! Thrilled to be here! My path to Workday is somewhat similar to Ashley. I was a customer of Workday’s and just really enamored by the Workday technology, and so ended up coming here five years ago as Chief Accounting Officer, and was fortunate enough to be appointed CFO approximately a years ago. I’m responsible for all of the financial functions of Workday, which includes running all of our financial systems within workday as well.

And, I really came to Workday with a fairly long history of financial and accounting background and had been in technology, mostly in the Bay Area, for the good part of my thirty-year career. And I'm thrilled to have been here for five years.

Michael KrigsmanWelcome to CxOTalk!

And finally, Diana McKenzie is the Chief Information Officer at Workday. Welcome, Diana!

Diana McKenzie: Thank you, Michael! It’s a pleasure to be here! I have responsibility for all of the core IT systems at Workday. We also have a team that we call “WOW,” stands for “Workday on Workday,” and their mission is to help Workday be our first and best customer of our products, and I have responsibility for that team as well. And lastly, I have responsibility for the security that we provide to our company around corporate security as well as for our platform.

I came to Workday also as a customer, although, I had exposure to Workday and I watched Workday's trajectory over the years and would find myself in an envious position when I found myself with other CIOs that told me they were going to Workday. So, it's pretty exciting when I had the opportunity to do that with my past company, where I was the CIO for five years. Thirty years in life sciences. And when the opportunity to come work for one of the best software companies in the world arose, I said "yes."

Michael Krigsman: Fantastic! Well, this is a very unusual show because, of course, we've had many C-level executives on this show, including Aneel Bhusri, your CEO, but this is the first time that we have had four C-Level execs. And so, I think we should talk about collaboration. You're all here, and obviously, working together, and so, describe maybe the nature of the collaboration and how you think about your roles intersecting each other. Who would like to jump in?

Robynne Sisco: So, why don’t I start with that one? Even though, as you’ve heard, we run very different and distinct functions within Workday, the one common thread that ties us all together is people. And everything that we all do impacts the employee population here at Workday and all of our people. And so, due to that common thread, we have to really be in lockstep on any decision that we make and that really drives a lot of the collaboration between our teams.

So, one example of that would be if Ashley wants to roll out a new employee program or take a look at changes to our compensations structure, she and I would work very closely together around what’s that going to look like? What’s that going to cost Workday? Can we afford to do it? What’s the timing of that? What are some tradeoffs that we maybe need to look at in order to meet our financial commitments in a year but still be able to embrace some of the programs that she wants to roll out?

Ashley Goldsmith: Exactly! And when it's using that example, not only is it a great partnership with Robynne but when you're making changes to something like a benefit or compensation program, also the partnership with Diana's team is critical because you do need to pick the system changes to support what you're doing. And then also with Christine's organization, because you're doing these great things, you want to be communicating them both really well internally but also probably externally with what could be future candidates and employees.

Christine Cefalo: Yeah, and I ... You know, Michael, even though we all spend a lot of time with our teams so Ashley, obviously with People and Purpose, etc. You know, and ... Well, I look at us as representatives of our organization who are joining together to drive the business forward. And so, of course, there are natural intersections. I obviously work a lot with Diana. I have a marketing technology team, and I work a lot with both Ashley and Robynne, particularly in marketing. I would say, you know, who you are on the inside is who you are on the outside. And at Workday, our core values are extremely important. And so, I partner very closely with Ashley on that part of the business.

The other thing that I really wanted to take a moment is, Michael, you know who the key stakeholders for Workday solutions are. And, I’m sitting right here with my internal clients. The CFO, the CHRO, and the CIO. They work very closely with marketing to tell our story of being first and best on our own Workday applications, but also, to help marketing understand how we can take customer stories, how we can explain how to drive more value back into our customers.

Michael Krigsman: This is a … This particular issue of collaboration, many organizations find challenging. And so, how do you ensure what are the steps that you take, or how do you ensure that you have close communication, and at the same time, what are the boundaries? How do you establish boundaries?

Ashley Goldsmith: You know, it gets less around establishing boundaries, and more around ensuring that we have a line of priorities. And, you know, we often have priorities that are completely aligned or are set from the get-go. And there are other things that come up where there may be times where our priorities need to be aligned.

And, I think one of the things that help us stay on-course really easily here at Workday is, because we do have strong core values, and we just take it right back to what's best for the employee and the customer. And, asking ourselves that question, it makes it typically very easy to see what the clear answer is and how we prioritize, and therefore how we make sure we're collaborating on the right things moving forward for the business.

Diana McKenzie: And, I would build on that, right? I believe that in the relationship that we have, there are clearly activities that exist within each of our respective functional areas that we work together individually on. But at the same time, when we think about what's happening as every company becomes a software company or a digital company, there's this element of information explosion that's occurred. And, the benefit there with what's happening in the technology space is we're now in a position to take those boundaries down between each of us. And we're spending a lot more time working together to understand what are the important decisions we need to be making as a company, and how do we tap into the rich wealth of data that we have as an asset and use that in a much more creative fashion to help us move the company forward? And we do that all very all working very closely together.

Robynne Sisco: And I see that as one area that’s really changed over the course of my career. If I think back even eight, ten years ago, my conversations with somebody in Ashley’s role would have been all around the data and is it right? Who’s got the best data? Is it HR, because they’re responsible for the recruiting, onboarding, and offboarding process? Or is it finance because we run payroll and we know who’s being paid? And I can recall sitting in a room with other CHROs having debates about whose data is right? And in the end, you don’t end up trusting it and you don’t have the basis for which to make really solid, good decisions about your business.

And so, we’ve just taken those conversations completely out of the picture and today, I’ll sit in a room with Ashley. We’ll pull up the Workday HR system and we’ll look at live headcount data, and we can really talk about what’s it telling us, and what do we need to do differently as a company to address whatever the data’s telling us? And the debates over whether the data’s accurate or not are really gone.

Ashley Goldsmith: And it does change the nature, particularly, I think Robynne, of our jobs and our team's jobs, because what we soul d have done eight or ten years ago would have been a lot of data dissemination. Our teams would have been gathering, generating a lot of data and then disseminating it to the right people who needed to know it. And now, with technology, that data is already in their hands. It's on their phone and it's at their fingertips. And so now, instead of data being the topic, instead, we are talking about what are the things we need to do as a result of what we're seeing in that information. And I think it is a powerful shift.

Michael Krigsman: And we have a question from Twitter, from Alan Bergson. And I want to remind everybody that this is a great opportunity to ask questions and use the hashtag #cxotalk. So, Alan Bergson is asking about how do you collaborate and what kind of tools do you use? Are there specific collaboration tools, he wants to know.

Christine Cefalo: Well naturally, we use Workday. I mean, in all seriousness, I think what you heard, you know, from the prior question is that we actually all do business planning together. So, it really does keep us on the same page. We, you know … It’s really important to prioritization. I don’t know, Diana, if you want to talk more about collaboration tools outside of Workday…

Diana McKenzie: Yeah, I would … We have a very face-to-face-oriented culture here. And that doesn't mean we have to be in the same room with one another, it does mean that we are very rich on video conferencing. And so, we use tools that make it possible to connect with one another regardless of whether we're in the same building or in the same state or in the same country, for that matter. It's also a very open culture of communication. So, there isn't a place anywhere in the company where if you want to reach out and talk to someone and get some information, there isn't an opportunity to reach out to that person and make it happen.

Like a lot of other companies, we struggle with the number of these tools that have continued to proliferate that are out there, and we are working to tackle that, and that can always be a great conversation to have at some other point about how we’re going about doing that.

Michael Krigsman: You mentioned … Somebody mentioned earlier when there was some discussion about the customer, about using the customer and employees as the reference point. Can you elaborate more on how you think about customers and employees, and why that's so important?

Christine Cefalo: …

Ashley Goldsmith: Yeah. Employees are our number one core value and, our founder said this from the beginning, which is happy customers equal … Excuse me … Happy employees equal happy customers. And we believe that to our core, which is why we believe employees are our number one value and customers are number two. And what we all do is think about how we're creating an experience for our employees where they feel appreciated, valued; where there is a sense of belonging no matter who they are, where they came from .... And they feel like what they do matters because every single person at Workday, what they do does matter. And if we can create that environment where we know they will do their best work, we know that they will innovate, and we know that they will provide exceptional service. And so, that's why this notion of really putting employees at the forefront, for us, matters so much.

Christine Cefalo: Yeah, and I think, you know, the core values just keep us really centered. You know, when I think about, “Am I on the right track?”, I always go back to those core values to make sure that we’re really focused in the right places, Michael, and making sure that we’re putting our investments in the right place. You know, from a customer standpoint, I have the opportunity, of course, to tell great customer stories every day, but all of our jobs is to always enhance and deliver the best customer experience possible.

Robynne Sisco: I think one of the things that make this a little unique on that front is that we've talked a little about this before. We are using all of our products, and so every employee at Workday uses Workday, whether it be from an HR perspective, or I want to change my payroll tax deductions or submit an expense report. And so, every employee has a connection to the customer in terms of the product, right? And I think that makes it very unique in that any interaction between employees and customers have this commonality where we really understand what our customers are saying when they're using our products because we're living that lifestyle as well.

Ashley Goldsmith: Yeah, that’s right.

Diana McKenzie: And I would just add one more, and that is we’re all very customer-facing in our roles, so we have responsibility for running our own areas of the business, but we also have responsibility for interacting with customers, and that gives us a tremendous opportunity to take the feedback that we hear from them and bring that back in, and use it to influence the direction of our product in addition to the experience that we have internally.

Christine Cefalo: And Michael, I just want to highlight one more core value. We’re very core value-focused here at Workday. And I think Dave and Aneel did a great job when they founded the company setting out those core values and making sure that employees are always extremely focused on them. But, I would also just highlight integrity. We have six values, but as we talk about customers and employees, I always feel like integrity is important, as Robynne said. We all have very customer-facing roles, and of course, employee-facing roles as well. And I think that that’s a value that we can always check against and make sure that we are always on the same page and delivering the right experience which is authentic back to our customers.

Michael Krigsman: So these core values have a practical import for you? They’re not just abstract.

Christine Cefalo: And even … So […] our core values, we all are. But from a marketing execution standpoint, we are always looking back at our core value, "fun." You know, is this marketing, are we delivering a fun experience? Hopefully, you've experienced that in some of your interactions with Workday. Hopefully, somebody's seen an advertisement and laughed. We're constantly checking back … I can't express how important the values are.

Robynne Sisco: I think the values actually really drive our priorities, too. So when we… If we get to a point where we need to decide between two things that may be conflicting or mutually exclusive, the conversation really quickly turns back to what’s the right thing for our employees? What’s the right thing for our customers? What’s the path of greater integrity if there’s a difference there? And really, they help us even with day-to-day decision-making as well.

Ashley Goldsmith: And it’s the first company I’ve been in where they are so much more than a poster on a  wall or something that you hear about in orientation. I mean, they really are fundamental and core to who were are, and they are present every decision we make.

Christine Cefalo: A few years ago, I participated in a dinner for a bunch of young women who are on a college tour in the Bay Area, and the really common question that I received from these soon-to-be college graduates was, “I have so many options. How do I know if the company I’m looking at is right for me?” And my advice back was, ask them what their core values are and if you get a consistent answer throughout your interactions with the business, then you know those core values are real. And if those core values align with who you are, then it’s probably a great decision.

Ashley Goldsmith: That’s good advice!

Robynne Sisco: That’s a great answer!

Michael Krigsman: We have another question from Twitter. You’re all leading organizations and so, of course, staff development is key to what you do. And Angie Reese on Twitter is asking, “How do you empower your staff to raise the bar?”

Christine Cefalo: Ashley’s team does an amazing, amazing job with talent development at Workday, and so, I would love to, you know, give you huge props for that. Every people manager at Workday has gone through special training that was developed over the last year, and I can’t say enough great things about that. In addition, we actually, on the marketing team, did 360’s for all of our managers, and we aggregated the results. And, based on the areas that we saw, in aggregate, that our managers needed to improve on, Ashley’s amazing Purpose team went out and developed custom training that they delivered to the marketing organization and then created learning modules that are now available, I believe, through Workday learning that can now be shared with others at the company.

So, I can’t say enough. I think Ashley’s team does an amazing job. I’m sure you guys have lots of examples.

Diana McKenzie: I couldn’t agree more. Just in the last year, we’ve run close to one thousand of our managers at Workday through a two-day experience where the members of the senior management team were the ones that actually delivered their curriculum. And the curriculum was very specific to the core values conversation we were just having, which is how do you, as a leader, be a great leader, but also be a great manager? And it means you have to understand who your people are. You have to understand what motivates them. You have to understand where they want to take their careers. You have to spend time with them. You have to actually want to be a manager. And for us to allocate that amount of time to that number of people to focus specifically on what does it take to be a good manager, I don’t think I’ve ever seen another company do that. And, the response throughout the organization has been very supportive of that because I think our Workmate population feels like they’ve got a management team that really cares about them deeply and what we need to do in order for them to feel like they’re maximizing their potential here.

Robynne Sisco: We also have a culture and a history of allowing people to really move around in different areas of the company. And I think that's something that's a little unique. Managers don't try to trap their employees in their teams, they really allow them to go out and explore other areas of the company, which ends up being a really great thing for Workday because they then develop as employees. They get to learn other parts of the company, and so that has been something that has really been built over time. And now when employees come in that are new, and they see this mobility that's open to them, right? It's a very new experience for them, and we've got a lot of great examples of people either moving overseas to take new opportunities or moving within different teams.

I’ve lost people in accounting to our product teams, to our customer support teams, and so, it’s really fun to see this … The career opportunities here which are really vastly different from what a lot of these employees have experienced in their past companies.

Ashley Goldsmith: And I do think the underpinning of all that still goes back to our values, because if you do have a belief that what your employees do really matters, then every single person, no matter if they’re an intern or an executive, that what they do really matters, then empowerment is part of that. You have to allow someone some empowerment in order to contribute. And so, all of these things that we’ve talked about are the supporting mechanisms to help that flourish inside a growing company.

Michael Krigsman: So it sounds like these values do serve as practical reference points when you’re making decisions and having to choose between A, B, and C.

We have another question from Twitter. And, folks on Twitter, again, I want to remind you that we’re speaking with four C-level execs from Workday who all happen to be women. And, you can ask your questions directly using the hashtag #cxotalk.

And we have another really interesting question from Arsalan Khan, and he’s saying, “Frontline employees have the best opportunity to learn and innovate by learning from customers. And how do you encourage that frontline employee behavior to happen?” To learn from customers?

Ashley Goldsmith: I guess I'll throw out that I think this kind of gets back to what we're saying before. That everybody has the opportunity to make a difference. Everybody has the opportunity to share. I think if you look across our organizations; again particularly Diana, and Robynne's, and mine; and then you go into product and then you go into development, you have people who are so intimately involved with the product. And all of us are out in the communities, right? We're with our peers, that's a natural part of being in the workforce. So we are always with customers or potential customers, and so there's always a source of good information back. And I think being in a company like ours that is low-hierarchy, as Diana said, anybody can reach out to anyone and share an idea. We have a lot of forums to do that from just the easy pick up the phone or send a note. But others…

So I think that it’s just part of who we are to allow people to share their feedback, share an idea, no matter how big or how small, and then you’d be surprised how many things just get jumped on that are a random idea that’s tossed out that suddenly seems like something really good that we pursue.

Robynne Sisco: We also actively solicit employee feedback.

Christine Cefalo: Of course.

Robynne Sisco: Yeah, through various channels. Ashley’s team often runs that, whether it be your short surveys or an email inbox to generate ideas around a specific topic, and then we action those. And so, we’ve got a history of showing our employees that, “Hey, if you have an idea and it’s something that’s going to be good for Workday, we’re going to action it.

Diana McKenzie: This notion of first and best is something that everyone in the company owns. It's not limited just to the people that work in our respective organizations or that work in the product organization. We have employees who think about that every day, and it's a great way to put themselves in the position of a customer or even when they're out talking to customers. It happens often. I get stories all the time of employees who find themselves in a conversation with a customer because they've worn a Workday hat or a Workday t-shirt. And before they know it, they're having a discussion about their product and oftentimes, that's a great, very positive conversation and if there's ever a time where it's a conversation about, "Boy, it would be great if you guys could do X, Y, or Z," the opportunity for them to bring that feedback back into the system is wide open.

Ashley Goldsmith: Yeah, I actually got an email from someone just this week. An employee, someone who I haven't met, who was out the prior weekend with some friends that were customers, and they came up with some interesting ideas for the product and so, he said, "I just want to pass them along to you." And they're actually really good ideas! So, I also have shared them onward. I think there are a couple things there that we could pursue so, yeah, they come from lots of spaces.

Michael Krigsman: Let's jump again to another question from Twitter. I'm glad there's a very active Twitter conversation. And, Gus Bekdash asks … He says, "Managers in technology complain about not having enough qualified women." He hires by ability and has never had that problem. And so, you’re all female executives. And so, how do we spread the word and how do we encourage women in technology, which is Gus’ question?

Robynne Sisco: I think that it's a difficult question to answer, obviously. And you know, I've been in finance, and mostly here in Silicon Valley, for the last thirty years and you know, I've seen a pretty good shift over time. But, I do think that it comes down to the culture of the company and whether or not that culture is one of hiring and promoting the right people for the job, regardless of gender or diversity and background or anything else. And once you have shown that you are that type of company, then you're going to start attracting more women, right? And so I think that we're in our roles here because we were the best people for the job, not because we're women but because we were the most qualified. Yet, people looking from the outside in can look at Workday and say, "Well, I know that I can have a successful career there as a woman because Workday has proven that they promote on ability and don't have a gender bias, and other types of biases."

So, it can be difficult. I’ve certainly, over my career, have worked for companies where I did not feel like I had the opportunities that I wanted. And, that’s a hard battle to fight. One person trying to change a company culture and so, I do think sometimes it’s really important to realize that maybe, you need to leave your company to really find the opportunities that you’re looking for. And, you know, that was certainly the path that I ended up having to take a few times in my career.

Ashley Goldsmith: On the shifting that concept of advice for women … I mean, it is true. In certain particular functions within any organization, there are some that there are fewer qualified women than men. No doubt about it. So, that … Yes. The pool may be smaller, but to that person, to Gus' question, I don't think that means we can't still have a lot more women in the workforce. And in terms of advice to women, there's data that's shown, the power of your network. The people that have a broad network and deep network across their organization or across their industry have far greater success. They will move up more quickly, they will ultimately be more successful in their career.

And I think when you find yourself in the minority in the organization, whatever reason that is that you’re in the minority, whether female or otherwise, you could find yourself with a much smaller network just sort of naturally happening. And I think that we can take it upon ourselves to proactively build that network by forming relationships, reaching out, and just being much, much more intentional with our network. And not just up. I think it’s a natural assumption to think I need to get to know the people above me so that they will be sponsoring me. Yes, there’ certainly no harm in that. But, peers. Even that newest intern; you never know who will play an important role in your professional life over time. So I think network expansion is something really important.

Diana McKenzie: And I would add that we can all help each other as well. I find, in a number of forums that I attend, I'm one of two or three women in a group, maybe of thirty, forty CIOs. And, one of the things that we've all started to do more is to proactively seek out other women that we know that would be great for that forum, and work hard to extend the invitation so that there is more diversity around the table. And when there's more diversity around the table, the conversation changes and the opportunity for inclusion becomes greater. So, I think there's an element of that that we can take on as well.

Michael Krigsman: And certainly, inside IT, which is a technology function, there are far fewer women than in other areas of the company – of companies in general. So, at Workday, how did you end up having four female C-level executives? Was this by design? Did it just happen naturally? Organically? How did this happen?

Ashley Goldsmith: So, Workday's culture values really set the stage for us to have a very diverse group of executives. So, we didn't set out with a goal, you know, we're going to have a certain percentage of women on our executive team. But, it is a priority for us to have a sense of belonging for every single person. We're a company that emphasizes contribution wildly over a person's gender, or their race, or any other characteristic. And so when you have that fundamental, then it makes it much more likely that you are going to select whoever is the right person for the job, and then the case, it so happens that we do have a lot of women in the executive team.

But it's not just there. I mean, if you look across Workday, we have great diversity in women throughout. If you look even in places that are traditionally male, product management, engineering, and development, we have really great female leaders and employees throughout those organizations. So, it is something that I do think if you get some diversity at the top, that will be very attractive to others who will say, "Yes, if I work there, I could see myself there because I know that people like me can get ahead."

Diana McKenzie: So, if I could just build on that: when I came to Workday for the first set of conversations, the very first person I met was Ashley. And I was so taken wither her. And, I had the opportunity then to get connected with Robynne, and she was so energetic and positive about the company and about the values of the company. I knew that the company was ranked very well in the Fortune-100 from a diversity perspective. And once I joined, I was attractive for that reason. I didn’t get a chance to have met Christine, but I would have loved to have done that before I showed up.

Christine Cefalo: I was with you, Michael, at Workday Rising!

Diana McKenzie: [Laughter] That’s right! She was! You know, but what I tell people now and it’s the honest truth is when the senior management team takes a break, there is a line in the women’s restroom. And I just don’t know how many other senior leadership teams have that vignette to go along with them.

Christine Cefalo: Yes, so I think, Michael, it’s worth noting that though there are four of us here, the senior management team is quite a bit broader than just the faces you see on Workday.com, for example. And, there are a number of amazing women. The next time we sit down and talk to you, we’d love to bring them along and have that broader conversation as well.

Michael Krigsman: Sure! And I know some of those folks, folks like Lianne and others. And my colleague Elizabeth Shaw, who’s tweeting at the moment, just tweeted a comment from Robynne where she says, “These women aren’t in CXO positions because they’re women, but because they deserve it,” which gets back to that merit-based approach you were talking about earlier.

We have another question from Twitter, and a very interesting one, from Gabriella Angiolillo who is a Workday employee …

Ashley Goldsmith: Hi, Gabriella! [Laughter]

Michael Krigsman: … who I also have known for quite a while. And, Gabriella’ asking about mentorship. And so, what’s the role of finding mentors and how does somebody find a mentor, the right one, and what needs to be done? Talk about mentorship, if you would, please.

Ashley Goldsmith: You guys want me to start?

Christine Cefalo, Robynne Sisco, Diana McKenzie: Yeah!

Ashley Goldsmith: Okay. [Laughter] I think mentorship can be incredibly important in any person's career. And so, Gabriella, for you, in particular, leveraging some of the resources we have here at Workday. Workday's functionality has the opportunity to identify mentors and reach out to people and establish a relationship with them through the technology. But for anyone, I think, a big piece of it is just understanding what it is that you are seeking in your mentor relationship. What are the areas that you want to develop in, or places you want to get advice, and then targeting somebody who you think will meet those needs and can help with that?

You may not know who it is. You may need to ask your boss, a colleague, peer, but zeroing in on who are a few people who you think would help you with the areas that you want to develop, and then just ask. I think people would be wildly surprised how often you will get a “yes,” even for people quite senior in your organization – that you’ll get a “yes” to a mentoring relationship because, I think we all really do want to help, right? We all want to see other people grow and succeed. So, I would say just reach out.

Christine Cefalo: Absolutely! And I personally have several mentor relationships with people at Workday that I meet with them on a regular basis. And, answer questions and they may or may not be on my team. I want to just highlight Gabriella for a second. Gabriella, I hope you don’t mind, but Gabriella was on the marketing team and now, she’s moved into building products for Workday. And, Gabriella was kind enough to come back to the marketing team and participate in a panel that we hosted on people who have made internal mobility moves. And, I just think it’s great that, again, another example of someone who’s moved from marketing outside and is now building product for Workday to come back and talk about those internal promos. So, really proud of you, Gabriella!

Ashley Goldsmith: That’s a really interesting career move, too! That’s great!

Michael Krigsman: What about inside IT? I'm just curious about any advice that you might have, Diana, because IT, in particular, is such a male-dominated field. We've had a number of female CIOs on this show, and they're all uniformly great. But, they're relatively few! You're relatively a rare breed!

Diana McKenzie: Yeah, I know. This is definitely a focus area for me and for any other person who's in a role like mine. I think that the statistics show that there's quite a few number of women that are choosing to major in the field of science and technology, and they emerge from the university and join the ranks, and there's a point where they make a decision for whatever reason not to continue. And, I think there's an opportunity there to catch some of the women at that stage of their career and make sure they are getting access to the best mentors and the best sponsors and making the right decisions.

One of the things that we’re doing actually next month is we’ve, within my organization specifically, have sponsored a book review of the book called the confidence code. And, it’s a very good read, research-based read, on how women sometimes don’t think about putting themselves forward for that next position because they have a fear that they may not bring everything to it. They may not have all the experience that they need to take on that position. And it’s how do we help each other build the confidence that we need to take that leap to say "yes" when you're asked to do something that you think you may not be completely prepared for, because that's, in essence, the way you're going to stretch and grow the most. And if you fail, you'll learn from it and you'll pick yourselves up and you'll keep moving.

So, I think there’s some element of helping women to think differently about how they can push themselves further in this career that will help us to build the ranks and the pool of future leaders and CIOs.

Michael Krigsman: So, I’m sure for all of you, the advice has to do both with advice to women as well as to their organization, or their company. And so, what other advice do you have? Maybe, the other three of you … Share your thoughts on what women can do or what companies can do.

Robynne Sisco: Yeah, I think one of the things that I've noticed over my career is that we tend; if we're looking at promoting somebody, maybe into a role we just got promoted out of; we tend to look for people that are going to do the job the same way that we did the job because that's our comfort level. And I think that the awareness of that bias is really important for leaders and managers to think about because maybe the best person for the job is someone who's actually going to do things completely different from how you did them, right? And, that diversity of thought can be really, really important.

And so, just ask everybody to really think about, how am I looking at the candidates for a job whether it be an external hire or an internal promotion. Do I have an unconscious bias to try and find somebody who's like me, and would the company benefit from somebody who's maybe quite different and just kind of open your mind for opportunities for people? And maybe, it's somebody who's never done that role before. I mean, certainly, all of us at one point, had to break through the ranks of the CXO job and that's not an easy thing to do. But somewhere along the line, someone gave us the opportunity to do a role that we had never done before. And so, I think if we can just get managers and leaders out there to think a little differently about that and that the best person for the role may not be somebody who has already done the role before.

Christine Cefalo: And, as I was preparing for this conversation, Michael, I was actually thinking what advice would I share, and maybe this is a result of Ashley and I working so closely together, but I actually thought the exact same thing, which is, “Ask, ask, ask." Speak up! You know, have confidence, like you're amazing! Find a mentor, find a sponsor. I look at those as slightly different. Sometimes, it's the same. But I've had great mentors and great sponsors. I'm guessing we all have, and I think those are just all things that you can do. And they're very hard too, I think. To speak up sometimes is hard. To be confident is hard. But I think just to remember that and have that confidence.

Ashley Goldsmith: And, just a piece of advice tilting it more towards the organization. I think most companies do want to have good diversity in their organization but don't necessarily know exactly how to get there, and it's certainly something that we all face. And, I think one of the most important things is just having good data. And it does come back to data being so important because it goes beyond just knowing what your percentages are and hoping that you can raise those, but being really intentional with your data and …

So, for instance, with collaboration, with the four of us, we talked about what questions do we need to answer about diversity in Workday. And then, how do we have that data ready for us? And so, we have diversity dashboards that really speak to what are the common questions? And, it’s what can get into the heart of where you might be losing your diversity. So, it’s what are your promotion rates? Where does attrition vary within your organization? How does pay parity look? Where are you losing people in the attraction funnel? Are you getting enough people at the top and they’re falling out during the interview phase?

So, if you know where you have an issue, you really can target your efforts, and I think that’s where you can look at whether you need to look at blocking bias that may inadvertently exist somewhere, or look at better attraction programs. Once you have the data, then it becomes a lot easier to be intentional.

Michael Krigsman: We have only a few minutes left. And, I wonder whether you can share your thoughts on what is the value or the benefit, and maybe this is obvious, but maybe not, what are the values and benefits of developing a diverse organization? And, at the same time, what are some of the challenges or the stumbling blocks that you’ve seen organizations face? And I’ll ask you to keep your answers relatively short because we only have a few minutes left.

Robynne Sisco: So, I think that one of the benefits are when you get different points of view and perspectives, and people with different backgrounds in a room together, you're going to end up with the best answer you can possibly generate, right? You won't have groupthink. You'll have diverse perspectives on a problem and then, apply your core values like what's right for Workday, what's right for the customer, what's right for the employees. Then you can come to the best solution to a problem that likely nobody would have come to that same conclusion by themselves. And I think that diversity of thought, that diversity of experience, and the diversity of background really helps bring all the different perspectives together and you end up with some of the best decisions and best creativity, which is important particularly in a technology company.

Diana McKenzie: I would build on that. We look at our customers and our customers are all very diverse. And, by being able to reflect that diversity at the leadership table here and within our organization, it just helps us be better connected to them, and to make sure we’re truly listening to their needs and their wants, and reflecting those in our products as we develop in our communications as we reach out to them about what our products are capable of doing.

Ashley Goldsmith: And I think it’s really just a fact. I mean, the demographics, if you just take the US, the demographics of the US are shifting wildly. So quickly. And we will be a country where the minority is the majority in just a matter of years. So, companies that don’t get this right are going to really struggle to have the talent that they need because diversity is part of who we are.

Michael Krigsman: And it looks like Christine Cefalo, you are going to get the last word because we’re just about out of time!

Christine Cefalo: All right! Well, I was just going to say I have nothing to add because of these … I'm so proud to be a part of this team and they said it perfectly! So, I have nothing to add. Thank you, Michael!

Michael Krigsman: Well, we are out of time! This has been one very, very fast forty-five minutes. I would like to thank everybody for watching and really, I’m very grateful to Workday and to these four amazing women. Ashley Goldsmith, who is the Chief People Officer at Workday; Diana McKenzie, who is the Chief Information Officer at Workday; Christine Cefalo, who is the Chief Marketing Officer at Workday; and Robyn Sisco, who is the Chief Financial Officer at Workday. And I said before we started broadcasting, there are a lot of chiefs and no Indians here, today! Thank you so much! [Laughter]

And everybody, thank you for watching, and thank you to Livestream for being such a great partner to CxOTalk! Go to CxOTalk.com and be sure to like us on Facebook and subscribe on YouTube. And, we'll see you next time, next week. Thanks, everybody. Have a great day. Bye-bye!

IT Innovation for Competitive Advantage

Tayfun Yigit, CIO, Index Group
Tayfun Yigit
Chief Information Officer
Index Group
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK

The Index Group, one of the largest distributors of computer products in Turkey, has been in business for 27 years with $1.2 billion in revenue and 40 percent market share. A combination of aggressive competitors combined with changes in consumer buying habits forced Index Group to rethink how it uses IT to gain operating efficiency while supporting new business models and ways of working.

Listen to The Index Group's Chief Information Officer, Tayfun Yigit, explain how the company changed its approach to IT and replaced an in-house system with SAP.

Transcript

Michael Krigsman: I’m Michael Krigsman, industry analyst and host of CXOTalk. And I’m talking with Tayfun Yiğit, who is the Chief Information Officer of the Index Group in Turkey; and the Index Group is a large distributor of computer products in Turkey.

Michael Krigsman: Tayfun, tell us about the Index Group.

Tayfun Yiğit: Okay. The Index Group is a 27-year-old company, and the number one, one-stop IT distributor in our country. We control around 40% of the market, and have been the leader of the market since 2000, which is around 16 years now. And, we work with approximately 4,000 - 4,500 channel partners. Last year’s global revenue was around $1.2 billion annually.

Michael Krigsman: So you have a 40% market share; that’s an extraordinary number!

Tayfun Yiğit: Yes, but there’s not much room for many distributors. So, the market is mainly controlled by the distributors appointed by our vendors ─ the brand owners like Lenovo, Asus, Apple; any brand you can imagine that is currently being distributed here in Turkey. So, that’s the business model for the vendors. So what they do is they appoint several distributors, and namely, we are one of them. And thankfully, we [have been] kind of the greatest for 16 years now.

Michael Krigsman: Now, I am sure that the market and the competitive landscape has changed very significantly over this period of time, and probably especially during the last 2, 3, 4, maybe 5 years. So, tell us about that, please.

Tayfun Yiğit: Yeah, exactly. You are very much right, and the margins are getting narrower every day, and it’s becoming more and more competitive every day. The distributors are seeking ways to do new methods of business in the markets for the larger market share. They compete with each other, and also trying to adapt to the consumer needs as days go by. So naturally, we experience all these issues firsthand and we must develop new methods, and ways to adapt to issues that we come across every day.

Michael Krigsman: So what are these methods and approaches? How are you managing and addressing the changes that have hit your industry?

Tayfun Yiğit: Okay, we have several responses to these issues. The first is we are trying to invest more and more into IT, and increase the efficiency of our resources ─ mainly human resources─ because, also, our cost is human resources. And so, we are trying to do business more efficiently through the facilities of IT operations. And, the second thing is we are trying to expand to new markets in our neighbors, the former Soviet Union markets, [which are the] historically Turkish origin countries like Azerbaijan, Georgia, and Uzbekistan, and similar countries like that. And, another thing we are doing is we are trying to align better with the consumer markets through investing resources into mobile computing - mostly mobile phones, tablets, phablets, and things like that. So, we are kind of trying to diversify and proliferate our services.

Michael Krigsman: It sounds like you’re undertaking business model changes that are pretty significant as well in this mix.

Tayfun Yiğit: That’s right, that’s right. The IT issue is kind of an important and hot issue for us because we migrated to SAP on January 1st of this year, 2016. And that was a big change for us because we used to run our in-house developed ERP system. And now, thanks to the large ecosystem and infrastructure provided by SAP, we are much more agile. So, Goal #1, achieved. We are improving our efficiency through the change in our IT infrastructure this way. And, another thing is we are reorganizing and re-engineering our business processes because things have to change and adapt to all these mentioned new developments. Human resources is kind of a key element in our job. So, what we are trying to do is we are trying to choose the right people for the right job. This is another trick maybe we use to adapt to our newly emerging requirements. So

Michael Krigsman: I’m Michael Krigsman, industry analyst and host of CXOTalk. And I’m talking with Tayfun Yiğit, who is the Chief Information Officer of the Index Group in Turkey; and the Index Group is a large distributor of computer products in Turkey.

Michael Krigsman: Tayfun, tell us about the Index Group.

Tayfun Yiğit: Okay. The Index Group is a 27-year-old company, and the number one, one-stop IT distributor in our country. We control around 40% of the market, and have been the leader of the market since 2000, which is around 16 years now. And, we work with approximately 4,000 - 4,500 channel partners. Last year’s global revenue was around $1.2 billion annually.

Michael Krigsman: So you have a 40% market share; that’s an extraordinary number!

Tayfun Yiğit: Yes, but there’s not much room for many distributors. So, the market is mainly controlled by the distributors appointed by our vendors ─ the brand owners like Lenovo, Asus, Apple; any brand you can imagine that is currently being distributed here in Turkey. So, that’s the business model for the vendors. So what they do is they appoint several distributors, and namely, we are one of them. And thankfully, we [have been] kind of the greatest for 16 years now.

Michael Krigsman: Now, I am sure that the market and the competitive landscape has changed very significantly over this period of time, and probably especially during the last 2, 3, 4, maybe 5 years. So, tell us about that, please.

Tayfun Yiğit: Yeah, exactly. You are very much right, and the margins are getting narrower every day, and it’s becoming more and more competitive every day. The distributors are seeking ways to do new methods of business in the markets for the larger market share. They compete with each other, and also trying to adapt to the consumer needs as days go by. So naturally, we experience all these issues firsthand and we must develop new methods, and ways to adapt to issues that we come across every day.

Michael Krigsman: So what are these methods and approaches? How are you managing and addressing the changes that have hit your industry?

Tayfun Yiğit: Okay, we have several responses to these issues. The first is we are trying to invest more and more into IT, and increase the efficiency of our resources ─ mainly human resources─ because, also, our cost is human resources. And so, we are trying to do business more efficiently through the facilities of IT operations. And, the second thing is we are trying to expand to new markets in our neighbors, the former Soviet Union markets, [which are the] historically Turkish origin countries like Azerbaijan, Georgia, and Uzbekistan, and similar countries like that. And, another thing we are doing is we are trying to align better with the consumer markets through investing resources into mobile computing - mostly mobile phones, tablets, phablets, and things like that. So, we are kind of trying to diversify and proliferate our services.

Michael Krigsman: It sounds like you’re undertaking business model changes that are pretty significant as well in this mix.

Tayfun Yiğit: That’s right, that’s right. The IT issue is kind of an important and hot issue for us because we migrated to SAP on January 1st of this year, 2016. And that was a big change for us because we used to run our in-house developed ERP system. And now, thanks to the large ecosystem and infrastructure provided by SAP, we are much more agile. So, Goal #1, achieved. We are improving our efficiency through the change in our IT infrastructure this way. And, another thing is we are reorganizing and re-engineering our business processes because things have to change and adapt to all these mentioned new developments. Human resources is kind of a key element in our job. So, what we are trying to do is we are trying to choose the right people for the right job. This is another trick maybe we use to adapt to our newly emerging requirements. So, of course, the new landscapes, the new countries, the new markets are natural and it’s standard sales and marketing thing we do like every company.

Michael Krigsman: When you say that you needed to become more agile, and you’re relying on your systems to help with that, can you elaborate on what specifically you mean by that? How does it directly impact the business?

Tayfun Yiğit: Okay, that’s a very nice question. Actually, the IT business requires lots of manpower and development efforts to put a new process into use. Every day, a new requirement comes up from our vendors, from our group of companies, the management teams, the sales force, etc., and our natural business expansion actions, etc. So, we have to develop and tweak our software every day. In the old days, this took a lot of time, and after we received a new requirement, the actual Go-Live, or the actual implementation took around, let’s say, four weeks. But now, thanks to this large infrastructure and ecosystem and plumbing provided by SAP, we kind of reduced this to approximately four days, comparatively. So, it’s a magnitude faster [when we develop] our systems depending on our requirements. So that’s a very large efficiency. With the same team, we output much more productivity, and products and services, to our clients, which is the company personnel and business.

Michael Krigsman: So, your business is based around people, as you said earlier; and so, it sounds like the consolidation of systems is enabling your people to get things done much faster, which of course, that level of efficiency can change your operations.

Tayfun Yiğit: Exactly, exactly. That’s the key issue. The efficiency was the main goal for us, and trying to do much more with the same, or even maybe less resources. Of course, the margin changes ─ the margin decreases ─ kind of forced us to take such similar actions. So, that’s a main issue: If you decrease the costs somehow, or if you increase your throughput, you will adapt to the decreasing margins problem.

Michael Krigsman: And this feeds into your shifting business model as well, I’m assuming?

Tayfun Yiğit: Of course, of course. Absolutely.

Michael Krigsman: I should ask you, are you cloud or on-premise?

Tayfun Yiğit: We are mainly on-premise. We are experimenting on cloud products and services, but we still do not rely on the communications infrastructure. The Internet connectivity here ─ it’s still not fast enough to achieve local access network speeds, and similar speeds. Also, there are some legal actions that need to be taken to make sure that your data is safe; your servers are safe; and your business will not be interrupted in any way through problems of the service provider or through other legal issues, etc. So, I think the cloud still needs some time to mature enough, especially in our environment, to make us feel comfortable enough to migrate entirely to the cloud.

Michael Krigsman: So it sounds like in Turkey, for the moment, on-premise is just a more practical option.

Tayfun Yiğit: Yeah, 90% of similar people like me think this way.

Michael Krigsman: What are the changes, the upcoming changes, that you anticipate in the market that are going to force you to respond?

Tayfun Yiğit: Yeah actually, the same trend that will probably continue. So, our net, our margins are going to get narrower every day, and the mobile rush, and the mobile popularity will increase every day. So, we will have to find ways and adapt to this issue. And we actually set up a company [that groups some of our] subsidiaries {to] concentrate solely on this mobile environment ─ the consumer mobile market. And, another initiative we have taken is we have kind of merged and placed around our contracts to make sure that one of our companies focuses solely on the value-added services like server storage services, database management products like Oracle, HANA, things like that. So naturally, value-added products and services kind of have higher margins. So that helps us to fight with the ever-decreasing profit margins much better.

Michael Krigsman: So your business model continues to evolve, it sounds, quite rapidly in fact.

Tayfun Yiğit: Exactly. Our market is a very interesting market, and let me try to illustrate it with an example: I’m going to mention some names, naturally, but let’s say the brand Apple takes a specific action to increase their sales, or to reach deeper channels, etc. In a week’s time, you will immediately observe that Samsung, or LG, or Huawei kind of take a similar action. So, you have to adapt very fast, because your vendors are acting very fast. So, agility is very, very important for us. That’s why I try to concentrate on that agility issue.

Michael Krigsman: And finally, as you have been through these changes, and these evolutions responding to the market, what are some of the lessons that you have learned? It’s always hard to change, and so, what can you share with us about your experience?

Tayfun Yiğit: Okay. That’s also okay; that’s also a great question, Michael and I will, of course, kind of touch on the issue of migrating to SAP a little bit when giving you these examples, because that’s the most significant change we have performed in the last year. It was a very important step for us also. Choosing the right partners is very important in this SAP ecosystem. So, it’s not easy to come across many qualified consultants every day in every consulting company, so it’s very important to wisely choose the right consultants for the right people.

And also, what we did was we kind of tried to train our troops, our internal team of developers, actually to pull themselves up by their bootstraps. They are trained as strong consultants and business consultants of SAP, and also developers of SAP. So, what we tried to do is to balance our resources to be more efficient this way by relying less on partners. [Or] maybe relying on them [for just] critical issues, and doing most of the legwork ourselves. We are saving lots of resources, actually, the time in terms of time. Because if you go to a developer consultant [for] a development project, it would take two weeks maybe. But if you do it in-house, it will take maybe two days, [which is] much less than two weeks, absolutely. So, it’s important that we kind of trained our team to be experts on this issue. This was an important lesson we learned.

And also, we really took advantage of many great training resources provided by the SAP ecosystem: One of them being the [SAP] Learning Hub ─ the portal of self-based training provided by SAP itself. [Another of them being there are] lots of e-books and books published mainly by SAP Press, actually. We really took great advantage of those resources.

Michael Krigsman: So for you, gaining the self-reliance through education has been extremely important.

Tayfun Yiğit: Yes, that’s right. That’s right, because it’s never enough to learn a lot about the SAP ecosystem. It’s a huge system, it’s a huge universe, actually. So, you have to be training yourself every day, and every day.

Chief Digital Officer: Lessons from a Former CIO

Christian Anschuetz, Chief Digital Officer, UL
Christian Anschuetz
Chief Digital Officer
UL
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK

With the Chief Information Officer role in transition, business expectations of the CIO have also changed. In this episode, we talk with a seasoned CIO, Christian Anschuetz, who left that position to become Chief Digital Officer of Underwriters Laboratories. The discussion explores the Chief Digital Officer role and offers advice to both CIOs and their organizations.

Christian Anschuetz is the Chief Digital Officer at Underwriters Laboratories. He has been the Chief Information Officer of Underwriters Laboratories since November 2008. Mr. Anschuetz is responsible to establish IT strategies, goals and priorities and to provide senior leadership on key technology initiatives in the areas of enterprise resource planning, business process automation, computer systems validation, and electronic communications. Mr. Anschuetz served as the Chief Information Officer and Executive Vice President of Americas at Publicis Groupe SA, where he was responsible for the strategic management and delivery of IT support to over 17,000 associates in more than 100 unique lines of business. Prior to Publicis, Mr. Anschuetz served as Vice President and Director of Operations at BCom3. He began his professional career in a broad range of progressive management roles these included; Senior Consultant and Information Security Thought Leader for Sprint Paranet, and Senior Partner/Founder of UpTyme Consulting. He holds a Bachelor's Degree in Economics from the University of Michigan, Ann Arbor, and a Bachelor's Degree in Computer Information Systems from Strayer University. He was a decorated United States Marine Corps officer and a veteran of the First Gulf War.

Transcript

Michael Krigsman: Welcome to Episode #223 of CxOTalk. I’m Michael Krigsman, and I am your host. I’m an industry analyst, and we have a really interesting show. We are going to be talking about the role of the Chief Digital Officer, and our guest, Christian Anschuetz, works for a company called UL that everybody knows under the name “Underwriters Laboratories.” So, I have to imagine that having been founded in 1884, the company is different today than it was way back then.

Christian Anschuetz: Oh, it is so different than it was back in 1894. Hugely diversified, it is now a global leader. We're in over a hundred countries worldwide, thirteen thousand people to this day; it's a fantastic company with just a super, absolutely superb mission, which again is all about safety, safer living, [a] safer working and living environment.

Michael Krigsman: So, you were the CIO at UL for many years. And, then you transitioned recently into the Chief Digital Officer role. So, let’s begin by talking about that CIO role. So, what was your mandate as the CIO?

Christian Anschuetz: Well, I think I was just like, you know, every CIO. My job was to help create a contemporary technology, a platform if you will, that would allow the company to be successful in the marketplace.

Michael Krigsman: And, what are some of the challenges that you face? I mean, it’s a really tough job. And, I’ve seen you talk a lot about the role of IT in terms of supporting innovation at the company. So, I think that’s a particularly interesting aspect as well.

Christian Anschuetz: Well, you know, I think that everybody has a role in the space of innovation. And, I definitely think that technology, whether you’re in IT or in a line of business that’s associated with technology, you have to lead from there, because you simply are already in that cutting-edge space. And, I think we’re uniquely positioned as leaders in technology to be aware of new and emerging trends, and take advantage of them for our respective businesses.

Michael Krigsman: But, I guess, you know, the challenge that many CIOs face is bringing innovation back inside the organization, and getting out of just supplying the infrastructure, right? And, people use the buzzword “becoming a partner with the business.” So, maybe we can kind of explore what that is, and how do you go about doing that?

Christian Anschuetz: Umm, yeah. So, maybe you’ve got to bring innovation in. You know, I’m a firm believer in the idea of cross-pollination. I think that you really have to innovate by creating a […] so, you really have to spend about two-thirds of your time outside of your comfort zone, meaning outside of your industry. You learn from what others are doing and find connection points. And then, innovate through … understanding what others are doing, and bringing those into your industry, bringing those into your company. Otherwise, what you end up have to happen, Michael, is potentially having … So we see this all the time, right? It's an industry of "me too." If all you're following is the same players in your market, the same players in your industry, you're going to keep doing what the same industry is doing. And, how innovative is that? Or, is it perhaps more interesting to bring something from outside the industry altogether, and create something altogether new? Maybe, the new category takes you and your firm outside of your niche.

Michael Krigsman: That’s a very interesting point. I guess the question, then, becomes how do you do that? I mean, do you talk with startups? How do you bring external innovation ideas inside, and especially into IT in a way that will affect the broader business outside of IT?

Christian Anschuetz: So, is the question how do you do that?

Michael Krigsman: Yeah.

Christian Anschuetz: That’s, you know, that’s kind of the magic of it. Well, you know, I think so much of it comes down to a fundamental leadership conversation

Michael Krigsman: Welcome to Episode #223 of CxOTalk. I’m Michael Krigsman, and I am your host. I’m an industry analyst, and we have a really interesting show. We are going to be talking about the role of the Chief Digital Officer, and our guest, Christian Anschuetz, works for a company called UL that everybody knows under the name “Underwriters Laboratories.” So, I have to imagine that having been founded in 1884, the company is different today than it was way back then.

Christian Anschuetz: Oh, it is so different than it was back in 1894. Hugely diversified, it is now a global leader. We're in over a hundred countries worldwide, thirteen thousand people to this day; it's a fantastic company with just a super, absolutely superb mission, which again is all about safety, safer living, [a] safer working and living environment.

Michael Krigsman: So, you were the CIO at UL for many years. And, then you transitioned recently into the Chief Digital Officer role. So, let’s begin by talking about that CIO role. So, what was your mandate as the CIO?

Christian Anschuetz: Well, I think I was just like, you know, every CIO. My job was to help create a contemporary technology, a platform if you will, that would allow the company to be successful in the marketplace.

Michael Krigsman: And, what are some of the challenges that you face? I mean, it’s a really tough job. And, I’ve seen you talk a lot about the role of IT in terms of supporting innovation at the company. So, I think that’s a particularly interesting aspect as well.

Christian Anschuetz: Well, you know, I think that everybody has a role in the space of innovation. And, I definitely think that technology, whether you’re in IT or in a line of business that’s associated with technology, you have to lead from there, because you simply are already in that cutting-edge space. And, I think we’re uniquely positioned as leaders in technology to be aware of new and emerging trends, and take advantage of them for our respective businesses.

Michael Krigsman: But, I guess, you know, the challenge that many CIOs face is bringing innovation back inside the organization, and getting out of just supplying the infrastructure, right? And, people use the buzzword “becoming a partner with the business.” So, maybe we can kind of explore what that is, and how do you go about doing that?

Christian Anschuetz: Umm, yeah. So, maybe you’ve got to bring innovation in. You know, I’m a firm believer in the idea of cross-pollination. I think that you really have to innovate by creating a […] so, you really have to spend about two-thirds of your time outside of your comfort zone, meaning outside of your industry. You learn from what others are doing and find connection points. And then, innovate through … understanding what others are doing, and bringing those into your industry, bringing those into your company. Otherwise, what you end up have to happen, Michael, is potentially having … So we see this all the time, right? It's an industry of "me too." If all you're following is the same players in your market, the same players in your industry, you're going to keep doing what the same industry is doing. And, how innovative is that? Or, is it perhaps more interesting to bring something from outside the industry altogether, and create something altogether new? Maybe, the new category takes you and your firm outside of your niche.

Michael Krigsman: That’s a very interesting point. I guess the question, then, becomes how do you do that? I mean, do you talk with startups? How do you bring external innovation ideas inside, and especially into IT in a way that will affect the broader business outside of IT?

Christian Anschuetz: So, is the question how do you do that?

Michael Krigsman: Yeah.

Christian Anschuetz: That’s, you know, that’s kind of the magic of it. Well, you know, I think so much of it comes down to a fundamental leadership conversation, right? So, first of all, you’ve got to lead by example. You have to be able to do that yourself. You have to be willing to be really uncomfortable, right? And push yourself in these new and different areas and hopefully inspire people to do the same.

When you bring these different ideas in, you have to hopefully make the connections and show that in these intersections, in these different things that you can possibly do with the business, you can maybe create an inspiring vision that [could] have people go, “Wow! This is fantastic! This is something I want to be a part of!” I guess the point of what I’m trying to make, Michael, is you can’t tell people what to do in this space, but you can inspire them to want to be innovative. You can inspire them to want to look outside their comfort zone, you can inspire them to want to look up outside […].

Michael Krigsman: And so, can you give some examples from your experience at UL of how you did this? I know it’s a leadership issue, as you were describing, but I think it’s one that many people find very difficult, or there would be more of it.

Christian Anschuetz: Uhh, yeah. I think it is very difficult, and I think; well, let’s talk first about the last part; we said that there would be more of it. You know, what’s your impression, Michael? Are most firms struggling with disrupting themselves, even though it’s obvious that all firms are going to be disrupted?

Michael Krigsman: I mean, is that a setup question? I think disrupting oneself, whether it's a … Look, as people, it's hard to disrupt and rethink how we are, what we do, how to improve ourselves, and companies are comprised of people. So, absolutely it's very difficult for most companies, and very few companies are actually disrupting themselves. I think that's really hard.

Christian Anschuetz: Yeah, well why is that, do you think?

Michael Krigsman: Hmm. The tables are turned. The interviewee becomes the interviewer. Again, I think the reason is that it’s easier to stay stuck doing what we know. So, in business terms, we have sources of revenue. And, we have processes. And, we don’t want to risk upending or disrupting those sources of revenue. So, we tend to do that which we’ve done before, which we know has worked in the past.

Christian Anschuetz: Yeah. Michael, I think you’re exactly right. And, I’d add another dimension to it, actually. And it goes back to what you were saying about businesses not wanting to disrupt the revenue streams, or disrupt their current models. I think there’s another part to it, too. Another part is that I don’t think people want to disrupt themselves. And you know, when it comes right down to it, we can talk about IT and digital and everything, and you know all day and all night, and think about it in terms of technology, but in the end, it really does come down to people. Just because it’s digital doesn’t mean we take people out of the equation. In fact, digital is actually more powerful when you consider people as part of the equation.

What the reality is, is I think that most people struggle with disrupting themselves. I mean, change is hard. I mean, you know, there's a reason we call growing pains "pains," right? Because it's hard to grow into new and different areas. And so, I think it's really important for us to tend to the wants and the needs and perspectives of the people that we're affecting when we're having these conversations in order to really help bring in these innovations into these disruptions and make them really disruptions that are opportunities as opposed to disruptions that are perceived as distractions.

Michael Krigsman: So, you're saying that the key is to engage the people who are quote-on-quote going to be disruptive or disrupted, in order to make them part of the change process.

Christian Anschuetz: Yeah. I think the key is actually to look at them as less of people that are going to be disrupted, and more people that are going to then actually become disruptors themselves. They’re going to become part of the disruption. Umm, you know, at least that’s the perspective of a firm that’s trying to disrupt itself.

Michael Krigsman: And is that what … Is UL trying to disrupt itself?

Christian Anschuetz: Yeah, of course. Well, we definitely are. We're a hundred and twenty-year-old firm that likes to think of itself as a hundred and twenty-year-old startup. And we do want to disrupt ourselves. Yeah, that’s right.

Michael Krigsman: Well, I guess for a firm … any firm that’s been in business for a hundred and twenty years has gone through many changes. And so, can you elaborate right now on what are … What is the focus of that disruption at UL?

Christian Anschuetz: Well, you know, UL is just a fantastic company. I think you have to understand a little bit about us and let's just start with the "why," again. And so, the purpose of UL is … Our mission and our purpose is to make safer, more sustainable, and more secure … Well, [a] safer, more secure, more sustainable world. It’s a mission for humanity, right? And, we've accomplished that mission in the past by helping organizations test products to meet standards. Standards are … sometimes we write, and sometimes there are standards where we help participate in their development. And when a product passes the standard, that means that product is safe, it's sustainable, it is whatever … It's over the threshold for whatever reason that standard exists. And in many cases in our tradition business, that's about safety, right?

And yet, the thing that’s fascinating about us is that our mission is something other than testing. Our mission is about safety, sustainability, and security. And, nowhere in that mission statement does it say we just test. And, it’s very interesting, because the one thing that this company has, and that is very unique, and so we are a leader in the trust industry. We are trusted, we’re a third party, we’re hugely independent. Our integrity we hold incredibly dear.

And then, a firm's that know of us, and this is so many of them. Over seventy thousand manufacturers worldwide. That's our customer base. And, they know this about us. And, when we have the opportunity to engage in dialogue with them and say, "You know, what are the real, deep problems that you're trying to solve?" It often is bigger than simply testing their products out and help them get to market. There are way bigger opportunities for us to perhaps pursue. And, we're disrupting ourselves by thinking about ourselves in pursuing these higher order problems, as opposed to just the transactional testing activities that we do.

We’re a leader in science research. We spend more on r&d, at least to our knowledge, than anybody else in our industry. And, we are constantly figuring out and learning about these new and emerging technologies and all the while figuring out how we can maybe disrupt the status-quo as we learn more about everything from, you know, new and emerging alternative power sources, EV, hack for that case drones, new app trays and forays in cybersecurity. I mean, what makes the world safe today is very, very different than what made the world safe in the past.

Michael Krigsman: That’s quite interesting. So, your underlying mission remains constant: safety, security, sustainability; that trust that you were talking about. Your underlying mission remains constant. However, the way that you, can we say, deliver that mission; that’s the thing that changes and is disruptive. Is that an accurate way of saying it?

Christian Anschuetz: That’s wholly accurate. And, you know, that’s what’s beautiful about our mission, Michael. If you think about our mission, it’s really not bound by a lot, right? I mean, making the world safer, more sustainable, and more secure, that gives us a lot of room to maneuver, right? And in that maneuvering, it’s helpful [sic] we can maybe reinvent ourselves.

Michael Krigsman: Yeah. That's a very interesting way to think about it. I think many companies don't have that sense of constancy or consistency about their core mission. And so, the disruption becomes a more complete type of change. But, it sounds … But, so you have that constant mission and when you, therefore, are thinking about disruption, the execution, the delivery of that mission, how do you then go about it? How do you then think about that transition, that transformation?

Christian Anschuetz: That’s a big question. So …

Michael Krigsman: Yeah. It’s tough. These are tough questions.

Christian Anschuetz: Yeah, they’re really tough in that, you know … It depends on what we are … Let’s just speak in the abstract; let’s talk about any firm. It depends on, I think, what the firm’s trying to transition or transform itself into, right? And, I think that is, you know … I’m a big believer in “Start with why.” Our “why” is clear. Again, our “why” is a mission for humanity, you know. What we do then, and how we do it, is sort of that order. So you start with “why,” you go to “what are we trying to do,” and then we determine about how exactly we do that. So, it kind of depends on the “what” a firm is trying to disrupt themselves, and transform themselves into before you can probably, at least before I could […], perhaps say how you might go about doing it.

But, I want to circle back to a previous comment and part of our discussion beforehand. You know, so much of this has to do with, again, people, right? We have to be absolutely deliberate and focused on making sure we bring people along for the ride. It’s so, so critical, Michael. And, I will tell you: if you were to ask me some of the differences between like a traditional CIO or maybe a CDO role, they’re both important roles and certainly, one is not better than the other. They’re just different, right?

I think that CIO role is really more typically, typically more about internal, you know, transformation, efficiency; can be in a contemporary firm, internally. A CDO role has, you know, has to trust that a lot of that is happening internally and then project it externally, and bring the customers in. So I think the CDO role is typically, typically more of an externally-facing role. But regardless, when we are affecting like the transformation either within your firm, or you’re trying to create new values outside the firm, you really need to be considering people all along the way.

With regards to the CDO, because it may have a tendency to have an external impact which we change the internal dynamics and how the company sees itself, maybe even how – definitely how it runs itself, right? How it actually delivers this new value, start these new things.

The scope of the responsibilities tend bigger, right? So, one is internal, and one is maybe more external, at least in this definition, right? And, but the CDO role is really all-encompassing, at least in my opinion. And, you know, this is where the soft skills become even more important […] because you really are responsible for changing the external perspective on […], and then you have to change the internal perspective, perhaps, on exactly what the firm does to the value that it creates.

And so, again, I’ll go back to what I think the CDO role [is], and you actually manage transformations really involve people and organizational change management. It’s that saying – I’m stealing it from a contemporary of mine that said that, you know, “The hard results you get are really coming from the soft skills.” And I do believe that’s true for the CDO role. Both roles. All these leadership roles, for sure, but definitely the CDO role.

Michael Krigsman: So, in practical terms, how is your role; how is your work as Chief Digital Officer different from what you did and what you focused on as Chief Information Officer?

Christian Anschuetz: Well, it kind of follows that same path that I was just on. I mean, the CIO role is really much more internally focused around internal operations, and the CDO role is much more of a customer-facing, customer-discovery, customer-exploration role. Again, going in front of customers and saying, “Okay.” You know, what are the really big problems that you’re trying to solve? And doing this out of the context of how they normally see you as the firm. Remember, relationships are contextual, right? So if you and I only know each other in a certain context, and we keep talking about the opportunities to work together in new and different ways, it will always be influenced by the context in which we know each other. Is that a fair thing to say?

Michael Krigsman: Yes, of course.

Christian Anschuetz: Well, when you want to go into these customers, and you want to discover these bigger opportunities, you have to first pull yourself out of that context that you’re known for, and probably talk to someone that’s different from that customer, it doesn’t have that same context. I mean, the day-to-day context of how they do business with us today.

Now, this is why, you know, for the company now, I’ve been speaking in generalities, the company that I’m with now, UL, [has been] talking about … With the permissions that we have in terms of this leader and the trust industry, and this independence, high-integrity firm, we have the opportunity and the latitude, in so many cases, to move outside of typical interactions we have with our customers and engage in different ways; simply because we carry those traits with us. We’re the […]. And so, then we can engage in a different conversation and start having explorations around different, perhaps even bigger problems that we can solve for them. And, again, perfectly in conjunction and support of our mission and our purpose.

Michael Krigsman: So, when you talk about, again, going back to this consistency of mission and purpose, to what extent is this change and disruption affecting your underlying business model and the operations of UL?

Christian Anschuetz: Well, I think that has yet to be seen, Michael. I mean, we’re a relatively – I’m relatively new into this role, and you know, that said, the company has been working to improve itself and diversify itself in accordance with our customer needs for a long period of time. We had a very big disruption for any firm. You know, I sometimes wonder, I mean: When GE was, you know … decided to go to GE digital and really kind of create this industrial internet, this Predix platform and all that, when did they know that’s what they’re going to do?

Michael Krigsman: Yeah, what an interesting question. I mean, I think to … We’ve had a few people from GE on this show. We’ve had Ganesh Bell, who is the Chief Digital Officer for GE Power and Water – they have a different name, I think. And we had Linda Boff, who is GE’s Chief Marketing Officer. And, I think it became apparent to them that the market was changing, and GE needed to have a different kind of relationship with their customers. And so, they then re-thought, “Okay, what kind of technology platforms are they using? What is their business model? How are they selling? How are they pricing?”

And so, for example, instead of selling you a jet engine, they’ll … They own the jet engine, and they’re essentially licensing that jet engine to you, and you can pay on the basis of usage, obviously.

Christian Anschuetz: Jet engines, who would have thought. Right?

Michael Krigsman: Exactly. So, the question of how do you recognize when it’s time to change. I mean, at UL … And I want to remind everybody that we’re talking with Christian Anschuetz, who is the Chief Digital Officer of UL. And, I think everybody knows UL by the name “Underwriter Laboratories,” which was their original name before rebranding. And so, how do you, at UL, […] recognize, and when did you, and what are the signs that say, “Hey, we need to do something different?” It’s a really tough; it’s a really interesting question.

Christan Anschuetz: Yeah, and it's a tough question. I'm not sure if I can put exactly my finger on it and give your audience, your esteemed audience a really great answer. We do know that there is a need for us … our entire industry knows that we're in a position where we can be potentially disruptive, right? And the question is without knowing exactly what that disruption will be, there is a very simple question, and it's one that hopefully all companies, and all leaders are asking themselves: "Do we want to be the disruptor of ourselves, or do we want to sit by, sit back, and wait until someone disrupts us and then moves the initiative?" And, I think we … You know, UL I can speak for specifically, in this case, we want to keep that initiative. Now, why give up that initiative when we can own it?

Now, exactly what that disruption’s going to look like, exactly what will happen; we aren’t sure. Yet, we do know that the only way we’re going to seize the initiative is to act and to do something. And something is? Michael, hopefully someday we’ll talk and we’ll go, “Wow! That was crazy a year ago or two years ago.” Whatever it was. “How did you know you were going to get here,” and you know, we’ll probably reflect back and say, “Well actually, we didn’t, and here are the series of milestones we get,” and then suddenly, “This is the epiphany was this is what we’re going to do and this is how we’re going to change,” and create and entirely new category of business. Something out of what is our traditional industry which is TIC, testing, inspection, and certification.

Michael Krigsman: Well, it’s definitely not a straight line.

We have a few questions from Twitter. So, let's jump on those because they're pretty interesting. So …

Christian Anschuetz: To the best of my ability.

Michael Krigsman: To begin, Arsalan Khan asks, “It sounds like, to some extent, the CDO role is like a consultant to external clients.” I’m sure it’s not a consulting role, but in fact, there’s probably an element of that.

Christian Anschuetz: It’s actually a really great comment. And I think, you know, maybe I would have been pretty far from using the word “consultant,” just the way I think of that word sometimes. Umm, I do think there’s something to that statement, though, because one of the things we have to do that goes back to the whole context thing – I think one of the things we have to do when we’re talking to our customers, when we’re really thinking about the businesses we want to be in and the problems, the key, the problems we want to solve; we can recursively ask “why,” right? Keep asking, “Why are you doing this? Why are you having this problem?” I know “why” is a personal word. You know, “What makes this an issue for you,” until you finally get to, you know, the root cause; you know, the root problems that, you know, the company’s real customer base is experiencing.

You know, our perspective. They engage us for many, many different things. UL's a hugely diversified company and very different than it was a number of years ago. The core of our business is still we test the product against standards and when they pass, we help issue a mark, we tell the agency we're testing for that it met the performance criteria, whatever, right? But when you start asking, "Why do you need the tests," and "What makes you require this certification," until you keep asking for […] It's the organization's turn to try understanding that there's just a general lack of understanding with regards to firms of what they have to do to really, to safely, in accordance with compliance and regulations, put their products in a specific market, right? And testing is a byproduct. That comes down to the “how” you actually do it.

But, you could wind back and keep asking why until you get to the whole … a totally different problem statement that if you attack the “there” or the “why,” then what would you do today could be, you know, it could be relevant; it could be relevant in a different way. I suppose it could be rendered […] and I think that’s unlikely in this particular scenario. But, I think there are the things we can resolve, but you have to …

The consulting question is good, because you have to go in there, and you have to do essentially customer discovery sessions. What are the real pain-points? Other than the context that they know you and that you know them?

Michael Krigsman: And, Arsalan Khan has a very interesting follow-up to the point that you were just making. And he says, “So, yes, it’s good to know… We have to know customer pains and their concerns, and so forth. But, if we only listen to our customers, then Ford would have made just faster horses, not cars.”

Christian Anschuetz: Well, that comes down to the whole design theory, right? You can go and you can listen to just what they say and that’s the Ford story, you know, “Instead of building a car, would they have built a faster horse?” But, what the customer’s really saying when you recursively ask “why” enough is that they actually needed to get from point A to point B faster. They had to do it without a certain amount of maintenance. They didn’t like using; I’m totally making this up [laughter]; they didn’t want to wagons, they needed something with a certain amount of capacity. They didn’t want to sit side-by-side with somebody. In other words, the question might have been more about, or the challenge might have been more about diversity in mobility than it would have been about a faster horse. And if you listened enough, you might have heard something different than a faster horse, too.

I totally get where that statement’s coming from now. I mean, I get it, and I believe in that. But, I think when you listen to them, you have to listen to what they say, you have to really understand what they mean. Those can be two different things.

Michael Krigsman: That’s a key point. So, it’s not just listening to the words, but it’s trying to divine being empathetic, I guess you could say; being empathetic to what do they really want? Listening recursively, as you were describing earlier?

Christian Anschuetz: Yeah. What do they want, and what do they really need? And if you look at some of the best disruptions, I mean, you’re talking about things that people didn’t even know that they wanted. I love the example of Uber. I know it’s kind of tired in so many ways, but just think about it. People just always took for granted that you had to stand sort of dangerously close to the curb and wave your hand waiting for a cab, and by God, hopefully, it wasn’t rush hour, or it wasn’t raining, you know? Or otherwise, you were kind of out of luck. And that, though, was just the way it was, right? Of course that’s just the way it is, it’s how the business works, that’s how … We got rides from Point A to Point B until someone said, “Wow! You know, there’s another need there.”

And actually, did they have to ask the customers or did they just have to observe? And, I think that's observation is key, and that kind of goes to that second thing. You can listen to what they say, but you've got to really follow the meaning. And, the meaning can be divined by any number of different ways, but observation is certainly one of them. I think it's probably the key one.

 Remember, most of what we get from people is less about the words they say, it’s about how they say ‘em, right? It’s the nonverbal cues. And then just if you believe that, right? […] And there’s all the science to back that, that makes it very clear. If you back that, and you really kind of add, then, the sort of subtle, nuanced, observation piece and you say you observe their behavior, well that’s when you get into design thinking and you start understanding why some companies are just better at disrupting than others. They do more than just listen to words.

Michael Krigsman: It’s quite interesting: design thinking as a systematic means to do that kind of deep listening that you’re describing in order to get to the surface of what the customer ultimately really cares about.

Christian Anschuetz: Yes.

Michael Krigsman: We have another interesting question from Twitter. Marc Orelen asks a burning question that I think is on all of our minds, which is: Why do we need a Chief Digital Officer? Why are these … Why is the CIO and CDO role separate? And he says, “wouldn’t the ideal be a customer-focused CIO?”

Christian Anschuetz: I think that’s a great question and a great point. So, you know, it’s so funny. I got the CDO role just a short while ago. I’ve been operating in the capacity for a while as the CDO. But, I’m still the CIO. So, what’s the difference, right? No sooner than I got the role that I stumbled on an article by Forbes. It was January … It was this year, I think, in January. Forbes was saying, “Say goodbye to the CDO role.” And I read it, and I’m like, “Wow. That stinks. I just got the job.” [Laughter]

But the point of it was, and it was a really good point, is that if firms stop thinking about there being business strategy and digital strategy, and it’s just a contemporary strategy and the businesses are run with a very contemporary mindset, and it’s very agile around technology; it’s very inclusive of people and their involvement in technology, then you don’t need a CDO.

Michael Krigsman: So, I’ve heard people say that eventually, the CDO role may go away as the digital mindset, the digital understanding, kind of defuse through an organization; that the CDO role, we could say, is a transitionary role.

Christian Anschuetz: I think that’s right, you know? And I’m less than, I’d say, some sort of expert in this. I do think that’s right, though. But, let’s be honest with ourselves, and look about at the firms that we all know. And I’m speaking in general here. I think that having a CDO role in a company like; I’m just picking an example; like a Google, for example, probably makes a little less sense than a company like, say, maybe like a Ford Motor company, right? Both fantastic companies; and by the way, I drive Fords; love Fords.

But, you know, I think that there is this transition, as you said, and as firms … Firms don’t just overnight become this sort of digital entity, right? It took Ford a while to understand that they didn’t just do cars; that they did mobility. And then understanding what it takes to be mobile players in the digital world is still something that they’re embarking on. And so, having a CDO role that is sort of ushering in that understanding, this sort of contemporary culture, this contemporary understanding, this contemporary application to their business I think takes a certain amount of time.

So, counter to the Forbes article, which said "Say goodbye to the CDO role," was another article by McKinsey that talked about the CDO as a transformer-in-chief. And, you know, I prefer the latter article to the former. By the way, they're both great articles. But I think that's why you actually need the CDO role, at least right now, because I think we're in a state of massive transformation. And again, every industry is going to get disrupted and since we're all rather unclear as to how we do it; I mean, the very basis of why we're having this conversation, the questions you're asking. How are you going to know? How are you disrupting yourself? What are you doing about it? Because most of these questions are very difficult to answer for most firms. I think that's why the CDO role exists.

Michael Krigsman: Well, as you said earlier, it’s very difficult to disrupt ourselves as individuals, and it’s very difficult to make the changes needed to disrupt ourselves as companies.

We have another really interesting and, I think a pretty deep question, actually, from Sal Rasa, who says, “Is the CDO role a community relationship responsibility, a community relationship management responsibility, designed to inform change management decisions?”

Christian Anschuetz: I think that’s a big part of it. I really do. I go back to the statement about the people, and not leaving the people behind. That is all about change management, and I think that that is a really big part of it. Now, that said, there is an external portion of it that goes back to these adjacencies that we talked about. You have to be bringing the people on, but you also have to be an explorer, and you have to be utterly unafraid to go into new and different areas.

Jeff Bezos, I love one of his quotes, and he’s a very quotable person, right? He made a comment that’s a quote, and I think I’m attributing this properly. If I’m wrong, I apologize, but he said that “At Amazon, we're not afraid to be misunderstood." And, I think what's behind that quote is that they are okay to go in new and different areas, and have a lot of people scratch their head and go, "Why the heck are they doing that?" But they're doing it as part of their exploration. Now Louis and Clark didn't make a beeline directly from the east to the west. It wasn't a perfectly straight line and we made that comment earlier, right? You know, a lot of people that I'd say, "Well why did they scale that mountain?" Well they actually didn't know they had a choice, or it looked particularly great, or perhaps, it gave a whole new vantage and a whole set of opportunities that lay beyond it.

I think that there’s people aspect to the CDO role, I think that’s critical, I think this exploration portion of it, and bringing the people along in that exploration; again, making them potential disruptors themselves is actually very, very critical.

Michael Krigsman: […]

Christian Anschuetz: And yet again, another really [good point], you do have … I remember when we were starting this conversation, you said that "Christian, just think we're going to be sitting here talking around a table with a bunch of very, very smart people." You're making that comment, and clearly, the audience and the questions they're asking is making your statement very, very true.

Michael Krigsman: Oh yeah. Now the audience of CxOTalk is quite amazing.

Now we have another really interesting comment from Shelly Lucas, who is with Dun and Bradstreet. And, she makes the comment that she thinks you are ahead of your time as a Chief Digital Officer because many digital leaders are focusing on the science rather than the people on the culture. And I interpret that to mean not just the science, but focusing on the technology platforms that enable this, as opposed to the people in cultural issues.

Christian Anschuetz: Well, thank you. You said it was Shelly?

Michael Krigsman: Shelly.

Christian Anschuetz: Well, thank you, Shelly. That's very kind. You know, I was in IT long enough to know, I mean, IT could implement the best system, and you fail to get the people on board with it, and you're going to have an adoption issue, you're going to have, well, we all know the stories, right? You can implement the best system and … By the way, a little IT joke: How do you make people love their old system? Implement a new one, right? And that’s because if you fail to bring [Laughter]… It’s true! It’s so true. It’s a joke, but it’s totally true.

Michael Krigsman: [Laughter]

Christian Anschuetz: Ummm.

Michael Krigsman: Spoken by somebody with a long history in IT. I’m sorry, I didn’t mean to interrupt. Please, go ahead.

Christian Anschuetz: But it’s totally true, and you know, so I learned at a relatively young age, and I’ve been trying to get better at it, and it is a bit of a struggle. But I’ve learned that you can only get down the path as far as you want to go when you have a lot of people in support. So, you’ve got to bring them along. And I go back to this topic of leadership at the end, but what is the obligation of leaders but to create a compelling vision and inspire people to fulfill that vision? And if you are unable to do that, then how would you ever really help to disrupt yourself and disrupt an entire industry? Because you're not going to disrupt it with just technology. You're only going to disrupt it with your people plus some technology.

Michael Krigsman: So the technol- … I mean, the way I talk about it often is the technology provides enabling capabilities, right? It lets you do things that you couldn’t have done before. So, for example, a software platform that lets you collect data. Well, you need, if you’re a digital company, you’re going to be relying on lots of data. Merely having that technology platform doesn’t mean that anybody is going to use it or do anything valuable with it.

Christian Anschuetz: You’re a wise man. That’s exactly right. How many great technologies were just simply the wrong technologies even though they were perfect, but they came out too soon. They came out too soon, so they were still wrong, right? And so, you know, was it because the technology was at fault? Was it because society or the audience was unready for it, or was it a combination of the two where the technology was right for too little time spent in making the audience understand why this was actually, you know, a really great value. I think there are probably a bunch of different answers depending on use-case to look at.

Michael Krigsman: So, how do you convince the organization that change that it needs to undertake; this kind of change; and then, can we go back to UL specifically and talk about the nature of this change process at UL?

Christian Anschuetz: Uhhh, sure. So, what’s the question you kind of want me to dial in on there? Is it change process specifically you want?

Michael Krigsman: Well, I think the … And by the way, we have about five minutes left, so as we wind down, what are the lessons or the takeaways about driving disruption; self-disruption; disrupting your own organization? How do you even begin?

Christian Anschuetz: Well, Michael, I think you begin and you might be surprised to hear this from a company that prides itself in integrity and independence. It starts with transparency. You know, we ask our colleagues and they’re getting better at this, and we’re just really kind of starting off. Our colleagues, you know, what are the directions that they think we should go? What is the company that we can, and we should be? Again, unconstrained by anything other than our unique mission and purpose; again, […] for living and working environments, right? And our imagination. What could this company be? Getting them involved. I’ll tell you that’s what I think is one of the most key things I can do. Again, I know it’s soft, it has very little to do with inventing some whiz-bang, high-tech solution, but it’s been an important lesson for us, I think, is to involve our staff.

I think the other thing is, again, that thing we talked about already which is changing the context of our conversations with our customers. They know us in a certain context, they give us permissions to have different conversations with them than we traditionally do, so seizing those permissions, having a different power station, and really try and find the sort of root of desire, or the problems that plague them. And, that you have the opportunity to help them address and create new value for them and that portion of the company […]

Michael Krigsman: What about the role of senior management? You know, you’re talking about the grassroots side, but don’t you have to also go from the top down as well?

Christian Anschuetz: Well, you know, again, the senior management, that leadership, it's the vision, it's inspiring people to follow that, and then, of course, there's modeling, right? There's an old … You know, I was in the Marine Corps, and the Corps taught you a lot about leadership and this concept of leading by example. And allowing yourself to be less than perfect; allowing yourself to fail and even celebrating this failure, so getting a management team on board is saying, "Hey, we're going to explore," and some of our exploration – perhaps even the majority of our explorations – are going to end in dead ends. Being accepting of that I think is critical, because that unfetters your organization. It makes them less scared to move in those areas with these roads less traveled, and become potential disruptors themselves. Because, if you're afraid that a dead-end is going to be a blemish on your career, on your history, I think that you're actually stifling yourself. I think you have to free up, again, you have to free up your people, and to the best of your ability, just free them up from that particular fear, and help them have courage. Well, there will be some fear, but a little less fear, a little more courage, and I think senior management's critical.

Michael Krigsman: Well, I guess that’s a … one of the most important and fundamental lessons. We have just a minute left, and Christian, I know that you are a vet, and I know that you’re very supportive of vets, and would you like to take a minute and tell us about some of your activities in relation to that?

Christian Anschuetz: Aww, thank you. Thanks, Michael. Yeah, I mean, just a quick plug. I'm part of an organization called Project RELO. It's a fascinating organization that uses transitioning veteran instructors to teach corporate executives the art and science of leadership. And, that's done in a very unique fashion. In partnership with the United States military, we do pseud-military operations with this collective of executives and veterans and build a deep understanding that hiring our veterans is more than a social good, it's simply good business. If you want to learn more, check out projectrelo.org.

Michael Krigsman: Project reload, r – e – l – o – a – d-dot org.

Christian Anschuetz: Uhh, Project r – e – l – o-dot org. RELO.

Michael Krigsman: Got it! Okay! Check out projectrelo.org.

We have been talking with Christian Anschuetz, who is the former Chief Information Officer and now the Chief Digital Officer of UL, which everybody knows as Underwriter Laboratories. Christian, thank you for taking the time to be here with us today.

Christian Anschuetz: Thank you so much.

Michael Krigsman: We have more shows coming up, and they are great shows. Next week, we’re speaking with the CEO of Coursera, and he used to be the president of Yale University, so that’s going to be an interesting one. Check out cxotalk.com/episodes. Thanks everybody for watching, and we will see you next time. Bye-bye!

AI: Legal, Ethical, and Policy Challenges

Dr. David A. Bray, Visiting Executive In-Residence, Harvard University
Dr. David Bray
Visiting Executive In-Residence
Harvard University
Kay Firth-Butterfield, Executive Director, AL-Austin
Kay Firth-Butterfield
Co-Founder, Consortium for Law and Ethics of Artificial Intelligence and Robotics
University of Texas, Austin
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK

Artificial intelligence is fraught with legal, ethical, and public policy challenges. This episode brings two esteemed experts to discuss these issues and present guidance for both commercial companies and the public sector policymakers.

Dr. David A. Bray began work in public service at age 15, later serving in the private sector before returning as IT Chief for the CDC’s Bioterrorism Preparedness and Response Program during 9/11; volunteering to deploy to Afghanistan to “think differently” on military and humanitarian issues; and serving as a Senior Executive advocating for increased information interoperability, cybersecurity, and civil liberty protections. He serves as a Visiting Executive In-Residence at Harvard University, a member of the Council on Foreign Relations, and a Visiting Associate at the University of Oxford. He has received both the Arthur S, Flemming Award and Roger W. Jones Award for Executive Leadership. In 2015, he was chosen to be an Eisenhower Fellow to Taiwan and Australia and in 2016, Business Insider named him one of the top “24 Americans Who Are Changing the World”. 

Kay Firth-Butterfield is a Barrister and part-time Judge and has worked as a mediator, arbitrator, business owner and professor in the United Kingdom. In the United States, she is Chief Officer, and member, of the Lucid.ai Ethics Advisory Panel (EAP) and an adjunct Professor of Law. Kay is a humanitarian with a strong sense of social justice and has advanced degrees in Law and International Relations. Kay co-founded the Consortium for Law and Policy of Artificial Intelligence and Robotics at the University of Texas and taught its first course: Artificial Intelligence and Emerging Technologies: Law and Policy. She is Vice Chair of the IEEE Industry Connections Committee “Global Initiative for Ethical Considerations in the Design of Autonomous Systems”. 

Transcript

Michael Krigsman: Welcome to Episode #203 of CXOTalk. I’m Michael Krigsman, and CXOTalk brings together the most innovate, most original, most interesting business thinkers to have an in-depth conversation about important and very often disruptive issues. And these are people who are genuinely shaping some important part of our world. Today, on Episode #203 of CXOTalk, we’re going to be discussing artificial intelligence, and particularly the ethical and the public policy, and the legal challenges and implications associated with that. We have two amazing guests. Our first guest is Kay Firth-Butterfield, who is a legal scholar and one of the world’s top experts in the ethical issues and legal issues associated with artificial intelligence and robotics. And our other guest is David Bray, who is the CIO for the Federal Communications Commission. So, let’s begin with Kay. Kay Firth-Butterfield, how are you and thanks so much for taking the time!

Kay Firth-Butterfield: Thank you for giving me the opportunity!

Michael Krigsman: So Kay, tell us about your background.

Kay Firth-Butterfield: Well, my background, as you say, I’m a lawyer. I was a barrister and judge in England before I moved to the United States about eight years ago. And here I’ve been teaching law, and thinking about artificial intelligence. I recently was the chief officer of an AI company and ran the ethics advisory panel. We were the first AI company that actually allowed its CO to go out and give talks, and talk about what we were doing. I’d say that was a great privilege for me to be there at the founding edge of that work and to be able to talk about what we were doing. In the last month, I moved to be the executive director of Austin…  AI-Austin and that’s a brand new collaboration between academia, industry, government, medical school, and others. And although we’re based in Austin, we’re actually having a very global outreach program. So, I’m really looking forward to taking that forward with my co-founding advocates. I still do have an academic background: I’m Distinguished Scholar at the [Robert E.] Strauss Center at the University of Texas; and I teach a course on artificial intelligence and the law for the law school there. I am founder of an organization that is a consortium at the University of Texas, which, we call it “CLEAR” because it’s actual title is quite long. It’s the Consortium on Law and Ethics of Artificial Intelligence and Robotics. And, then, I am Vice Chair of the IEEE’s project (another snappy title): The Global Initiative for Ethical Considerations in the Design of Autonomous Systems.

Michael Krigsman: Ok. So, if we want to talk about law and AI, you’re the person to talk to. [Laughter]

Kay Firth-Butterfield: Well, I’ll try to be! [Laughter]

Michael Krigsman: Ok. And, our other guest is my good friend and colleague David Bray, who has been on CXOTalk several other times, and David is the CIO for the Federal Communications Commission. Dr. David Bray, welcome to CXOTalk again!

David Bray: Thanks for having me, Michael. It’s great to be here and I look forward to discussing how we can both deal with the basic fundamentals of artificial intelligence; and how we can begin to use it in organizations both public and private; as well as how we can actually make sense of the ethical issues involved in AI use.

Michael Krigsman: Ok. So let’s dive in. When we talk about AI, what do we mean? David, tell us, what are we actually talking about here? I think we need to get that out of the way first.

David Bray: I think that’s absolutely true. So, artificial intelligence probably includes many different things to different people. And I can only talk about it as machine learning; it’s neural networks… It really is using technology to try and emulate, basically something that appears to be intelligent. And I want to be very careful about using the word, “appears to be intelligent”

Michael Krigsman: Welcome to Episode #203 of CXOTalk. I’m Michael Krigsman, and CXOTalk brings together the most innovate, most original, most interesting business thinkers to have an in-depth conversation about important and very often disruptive issues. And these are people who are genuinely shaping some important part of our world. Today, on Episode #203 of CXOTalk, we’re going to be discussing artificial intelligence, and particularly the ethical and the public policy, and the legal challenges and implications associated with that. We have two amazing guests. Our first guest is Kay Firth-Butterfield, who is a legal scholar and one of the world’s top experts in the ethical issues and legal issues associated with artificial intelligence and robotics. And our other guest is David Bray, who is the CIO for the Federal Communications Commission. So, let’s begin with Kay. Kay Firth-Butterfield, how are you and thanks so much for taking the time!

Kay Firth-Butterfield: Thank you for giving me the opportunity!

Michael Krigsman: So Kay, tell us about your background.

Kay Firth-Butterfield: Well, my background, as you say, I’m a lawyer. I was a barrister and judge in England before I moved to the United States about eight years ago. And here I’ve been teaching law, and thinking about artificial intelligence. I recently was the chief officer of an AI company and ran the ethics advisory panel. We were the first AI company that actually allowed its CO to go out and give talks, and talk about what we were doing. I’d say that was a great privilege for me to be there at the founding edge of that work and to be able to talk about what we were doing. In the last month, I moved to be the executive director of Austin…  AI-Austin and that’s a brand new collaboration between academia, industry, government, medical school, and others. And although we’re based in Austin, we’re actually having a very global outreach program. So, I’m really looking forward to taking that forward with my co-founding advocates. I still do have an academic background: I’m Distinguished Scholar at the [Robert E.] Strauss Center at the University of Texas; and I teach a course on artificial intelligence and the law for the law school there. I am founder of an organization that is a consortium at the University of Texas, which, we call it “CLEAR” because it’s actual title is quite long. It’s the Consortium on Law and Ethics of Artificial Intelligence and Robotics. And, then, I am Vice Chair of the IEEE’s project (another snappy title): The Global Initiative for Ethical Considerations in the Design of Autonomous Systems.

Michael Krigsman: Ok. So, if we want to talk about law and AI, you’re the person to talk to. [Laughter]

Kay Firth-Butterfield: Well, I’ll try to be! [Laughter]

Michael Krigsman: Ok. And, our other guest is my good friend and colleague David Bray, who has been on CXOTalk several other times, and David is the CIO for the Federal Communications Commission. Dr. David Bray, welcome to CXOTalk again!

David Bray: Thanks for having me, Michael. It’s great to be here and I look forward to discussing how we can both deal with the basic fundamentals of artificial intelligence; and how we can begin to use it in organizations both public and private; as well as how we can actually make sense of the ethical issues involved in AI use.

Michael Krigsman: Ok. So let’s dive in. When we talk about AI, what do we mean? David, tell us, what are we actually talking about here? I think we need to get that out of the way first.

David Bray: I think that’s absolutely true. So, artificial intelligence probably includes many different things to different people. And I can only talk about it as machine learning; it’s neural networks… It really is using technology to try and emulate, basically something that appears to be intelligent. And I want to be very careful about using the word, “appears to be intelligent” because we have to answer the question of what’s intelligent behavior in the first place. We can be very human-centric and say, “Well, humans are inteligent because we are able to make sense of challenges put before us. We can be goal-oriented.”

I think when it comes to talking about AI, what we’re really talking about is using technology to solve problems or achieve goals in ways that appear to mirror intelligence beyond just something that someone has programmed the machine explicitly to do.

Michael Krigsman: And Kay, as an attorney, how do you think about the definition of AI?

Kay Firth-Butterfield: Well, I will piggy-back on what David said, in terms of AI. But, I think that basically we’re talking about a scholarship that has been going on now for a long time and a number of different ways of achieving what we call “artificial intelligence.” But again, I’m going to piggy-back on David as to what might be intelligence. I think that we need to perhaps lift from the UK government’s recent report that “artificial intelligence” can be adequately used as an umbrella for all the different things going on ─ all the different scholarship in this space.

Michael Krigsman: When we talk about AI, it seems like it has become the explosive growth in the jargon value of AI. And, in commercial companies wanting to piggy-back on top of the terminology. And so, clearly AI is very important, but can either of you shed a little bit of light more specifically on why it’s so important, why this explosive growth, and why we should actually care about the legal, policy, ethical issues of AI?

David Bray: So … Go ahead, you can go first, Kay.

Michael Krigsman: Please, Kay, go ahead.

Kay Firth-Butterfield: Ok. [Laughter] I think that one of the things that sticks out in my mind is some research that McKinsey [&Co.] did recently, where they describe AI as a contributing factor to the transformation of society. And I just want to quote what they’re saying about the transformation of our society: that it’s happening ten times faster, and at three hundred times the scale, or roughly three thousand times faster than the impact of the industrial revolution. And you know, a lot of people compare this revolution to the industrial revolution. But, I think it’s the speed and the real, core underpinning that AI is contributing to that transformation of our society, that makes these discussions so important.

David Bray: So, I would build on what Kay was saying, and really say that I think AI has had three waves. We’re kind of in wave three in my opinion. The first wave: you can actually go back to a Nobel Prize winner Herb [A.] Simon. Herbert Simon, interestingly enough, actually started off actually with New York government and public service, and he observed what he called administrative behavior. And what he saw in terms of how people did administrative behavior was, generally, people didn’t go beyond sort of the landscape of what they already knew to be true. And he had this conclusion that the challenge is “How can you help people in organizations go beyond the landscape of what people knew to be true.” And interestingly enough it led him to do behavioral economics, behavioral psychology, and eventually to artificial intelligence. So, in some respects, observing how people make decisions in public service gave rise to artificial intelligence. That was a first wave.

The later waves tried to look at what was called decision support systems, expert systems and that would be the late 80’s and the 90’s. And I think what we’re now is, I think the third wave is really occurring, quite frankly as Kay said, because computers have gotten fast enough; memory has gotten cheap enough; the internet is now connecting things that we can actually now do distributed problem-solving at a scale that frankly was not possible in the 80’s or 90’s, or when Herb Simon was trying to do his work in the 70’s.

So, why AI has become the buzzword is, in some respects, and I would say it’s replaced “cloud” as the new buzzword. In some respects, cloud was the buzzword four or five years ago. That said, and interesting enough, even though it’s replaced that buzzword, in some respects AI is only possible now because we do have cloud computing. So, you have elasticity of CPU cycles, of memory, and quite frankly, just the sheer scope of being able to collect data and trying to make sense of it. That’s why I think artificial intelligence has reached the crescendo that we’re hearing about right now.

Kay Firth-Butterfield: And I think also that we’re actually beginning to see artificial intelligence so the general public can see it so much more. And they’ve interestingly, the Future of Advocacy did a YouGov poll in the United Kingdom just recently, which showed how little the general public understand about AI. But, when they go out their door, and they can see for example an autonomous vehicle or truck, then that’s really leading to the way that we’ve had much more reporting in the press about AI. And so, I think it’s not just the technology, but it’s also the fruits of the technology that are being seen that contribute to the conversation I think is so important at the moment.

Michael Krigsman: So we see, as you said, we see technology such as autonomous vehicles coming out, and if you’re in San Francisco you can often see these driverless cars, or autonomous cars driving around the streets, and things like Chatbots that are visceral reminders to people, or make people aware of the personal impact of these technologies. So, it’s not just hidden behind the surface. But all of this creates a set of dynamics with profound implications for ethics, for the legal system and for policymakers. And, Kay, why? Why is that the case?

Kay Firth-Butterfield: Because, we are, as lawyers, always catching up. And so, for example, in a common law system, unless you have legislation, you have to wait for something to happen before you can have case law decisions be made about it. So, we’re sort of in this holding pattern at the moment where we’re either waiting for governments to create legislation or for self-regulation to spin out, and I think that’s vitally important, or the case law piece. And so, you know, if you look at Europe for example, they have gone with regulation of a lot of these things, and more and more so. Whereas of course, in the United States, we have seen a very slow progress just through the NHTSA trying to work out how to govern or regulate safety on those vehicles.

Michael Krigsman: And David, what about … Why is this such a potential quagmire? Why is this so fraught with difficulty and challenge from a policy perspective?

David Bray: So, that is where I’ll put on my Eisenhower Fellow hat, where I was in Taiwan and Australia and had a chance last February and March talk to them, both about their strategies for the Intenet of Everything, but also the expected impacts of artificial intelligence. And I think, first is there is the need for educating the people in a way that is accessible to everyone, not just computer scientists, as to what artificial intelligence can and cannot do. I think we may have the challenge of people who have been educated in those respects through the movies and the movies, of course, show a very non-realistic situation in terms of artificial intelligence deciding to change its ultimate goal, and somehow taking over the world or something that… You know, we actually do not currently have a programming language that allows you to have the program itself change its ultimate goal. It may be able to change sub-goals, but we don’t have the ability to have a machine change its ultimate goal yet. And people will say, “Yeah,” but then unlikely again.

It’s trying to have a conversation that involves everyone, not just the experts on artificial intelligence, that is going to make tackling these issues, both in the public sector and in the private sector, challenging. And I think as Kay said too, I think we need to have a little bit more demonstration projects before there is any rush to try and do any policy. You don’t even begin to show what’s possible, both from a good sense, and also what maybe you want to try and avoid, if you don’t show what’s possible. It’s really hard to have an informed conversation. So hopefully over the next year or two, we can try to show what artificial intelligence beyond these autonomous cars, maybe can make local communities healthier or safer, maybe address things at the national level.

One of the things I’m tracking with interest is in California. They actually are using machine learning to actually help set bail decisions. So you feed in the facts of the case, and it actually makes a bail recommendation. The interesting thing about that is [it] actually helps weed out things that shouldn’t relate to your bail decision, and shouldn’t be related to your height, or your weight, or your gender, or your race. So, in some respects, artificial intelligence in that sense could actually make things more ethical, because we know what the algorithm is, and we know it’s not taking in extraneous information that should not be important.

Kay Firth-Butterfield: Except, looking at that on a different footing of helping the sentencing, you know there was the recent research done around bias ─ in-built bias ─  in sentencing so that people of color were still getting heavier sentences than white people using the models. So I think we have to be very careful around how we build these systems.

David Bray: Oh I agree 100% and that’s where one of the things I really want to see happen is making the algorithm open-source in terms of what weight and what factors it’s considering. So I agree. If you’re only going to base it on past decisions, and past decisions were made by human bias, then don’t be surprised the machine itself is going to be biased, too. I think that’s where there needs to be a conversation about where do you want to get your data. Because if your data is biased, it will result in biased decisions. However, that’s also where the machine itself can probably pick up, and actually begin to identify weight. These past human decisions were biased. I mean, we know it’s a sad reality. Your height should not relate to the amount of money you earn as, say, a Chief Financial Officer, but we know that there’s a very strong correlation between your height. The taller you are, the more you earn as a Chief Financial Officer even though there’s no relation to the job with height. And so, we know that humans, we all have inherent biases even if we try not to. That’s actually why I’m a big fan of the phrase, “collective intelligence” and what collective intelligence is. How do you arrange both human and technology nodes so they make smarter, more intelligent decisions without, I mean, you can never remove bias, but as less biased as possible? So, I think it’s worth talking about not only doing pioneering projects on artificial intelligence and learning what works and doesn’t work, but also doing experiments on collective intelligence that is a combination of humans, as well as technology nodes, to ideally actually begin to remove bias from both groups.

Michael Krigsman: So is this issue here the fact that we’re now asking machines to make decisions that people otherwise would have made regarding judgement? Is that the issue that’s kind of driving the ethics? What’s driving [it]?

Kay Firth-Butterfield: Certainly, that’s one of the issues. And if you think about what Europe is doing with the general directive that will come into force next year, so very soon, they’re saying, “Well, we want transparency, we want openness.” So, if a machine is making decisions that adversely affect citizens of the EU, we want that machine to be able to explain itself, because the human would have been able to, and so therefore the machine would be able to. So, I think it’s very much around that human-in-the-loop notion. That previously human beings were doing this, and now we are increasingly giving over these decisions to our artificial intelligences.

Michael Krigsman: But David …

David Bray: Just a bit on there real quick. I was going to say, and I think, I would even go one step further. That it’s not just about handing over judgement and decisions to a machine that a human would do otherwise. It really is about the loss of a locus of control, either a loss of a locus of control for the individual. So, when you’re in an autonomous car, you know, you are not driving; the car is driving, unless you have the ability to stop in the next … [garbled text], but again, within milliseconds that might not be possible. It’s really about are we handing over control to an entity that we are willing to trust that will be as fair, if not more fair than a human. And that’s where it gets to what Kay said with Europe. The interesting thing with the Europe question is it applies not just to artificial intelligence but to what they call “autonomous systems”. So, the question is, “Will this require companies like Google and Facebook to be able to explain why certain results showed up at the top of the page as opposed to the bottom, and are they actually going to be willing or able to do that?” Because, that gives them their search algorithm, their ranking, in some respects intellectual property. And it’s going to create some interesting challenges of how much are companies actually going to be able to explain why the system is doing things a certain way, and at the same time protecting intellectual property. And I think it’s going to be the interesting experiment for the next two or three years is, “How can you do that and at the same time, preserve possibly your unique advantages in the organization?”

Michael Krigsman: But David Bray … Please, let me … So David, let me just interject here. So how is this different from what currently is happening with existing technology, because Google and many other companies do personalize the data that is presented to us, and so these challenges are there. So, why is AI any different?

David Bray: So, I think it’s just the scale at which it may be used, and the scale and the impacts of the decisions. I think we’ve always had, well, there’s always been the ability to tailor your experience even before the Internet in terms of what services were provided to you. People were making sense by hand what things you should receive in the mail in terms of ads, or what was called “automated data processing in the 1970’s. And it’s interesting to note that as Kay mentioned about the law, obscenity laws came before privacy laws, and that obscenity laws came about in the late 1900’s because people started moving in the cities. When people were living closer together, now they realize they might look out a window and see something they don’t want to see. So, that led to obscenity laws. And then privacy laws came back in the 1970’s when you started doing automated data processing. And again, these machines were nowhere near as fast as what we have today, but that somehow there could be a correlation of “This person lives at this address; they’re getting this type of heart medication; they also are on this type of insurance.” At what point do you need to say, “Well, those are correlations you shouldn’t draw unless that person is giving consent?” So I think artificial intelligence, much like those things that came before, it’s just the scale and the impact of what this machine might be able to make decisions that will impact your life will be. So you’re right it’s the same trend. But, I think it’s the sheer scope and impact that I think we need to take into consideration.

Kay Firth-Butterfield: And I think it’s coupled with things that are going on in our society, which gives it more, a bigger reach. Say for example our aging population. You know, if we decide that we might go the same route as Japan, and introduce more artificial intelligence devices in the form of robots for example into our elder care, then that’s going to make the technology so ubiquitous that the scope is so much broader. The other way that we might go would be obviously immigration, too, so some of the care needs that we have for our elder population. And again, there’s going to be different choices around the world.

Michael Krigsman: So the issue then, is one of scale and then one of pervasiveness. Is that why the issue of, the challenge of AI ethics has received such a high profile in recent days?

David Bray: I would agree… Go ahead, Kay.

Kay Firth-Butterfield: I was going to say “Yes!” in a nutshell, yes. But I think that actually the AI ethics point really came to the general lips of media, and those people who weren’t really thinking about this, through perhaps DeepMind’s original creation of its ethics board. And obviously, you know the seminal quote from Stephen Hawking on the first of May, 2014, when he said that this could be the best thing that we’ve ever done, or our last. And I think that really captured the attention of the media. And where there were lots of us thinking about these things before, it’s become so much part of a more public conversation now.

David Bray: And I would build on that and say that I do think it’s the winning of Jeopardy by Watson, the winning of a Go championship; there’s been a series of events that are making this much more real to people. If you think about it, how many of us in the last ten years have been on a plane where at some point in time, and probably for a majority of the flight, the plane was on autopilot? And none of us were running around saying, “Oh dear, this plane is being flown by itself!” You know, it was always there in the background. It’s just now becoming increasingly visible to people. Sure, it’s actually raising interesting questions of: Will this impact employment? Will this impact jobs ─ the nature of work? And so, it’s raising a lot of interesting questions. I mean, the good news is we’re talking about it in some respects before the technology’s even able to do some of the things that people are claiming it might be able to do in the future.

Michael Krigsman: Kay Firth-Butterfield, you are one of the top legal scholars in the world and ethicist, and thinking about these issues. And so, when it comes to AI ethics, is there kind of a framework, or an approach that we can use to break it down and look at the problem?

Kay Firth-Butterfield: I think that the way that I have always seen it is that we need to be thinking about responsible design, and also, companies that create AI taking responsibility. Either we’re a nascent industry, or at least a young one, but we need to have a level of maturity around the product. And so, what I was doing when I was at Lucid.ai, was really sort of talking about the fact that we need to be thinking about responsible design from the moment that we have the idea of a product, through to the way that it’s sold and used. And so, I think it’s a continuum, and it’s something certainly that in my new role at AI-Austin, we’re going to be looking at, and working with companies who not only producers of AI, but users of AI.

Michael Krigsman: David Bray, and you have been in public service for much of your career, and have had quite a number of roles looking at these kinds of issues. So Kay talked about responsible design, really from building it in from the ground up, looking at the technology through the development, through the point of release as a product. What is your thought on that?

David Bray: So, I think I’d say i’m very supportive. I would say from my perspective, having served in public service as well as in the private sector, you can plan for something to be used a certain way, or designed a certain way and the reality is humans will find things that you never intended, both good, bad, and mundane. Unfortunately when the Mumbai terrorist attacks happened, the attackers actually used the things that you and I use on a daily basis for web searches. They used GPS. They used social media unfortunately both to plan the attacks and to execute. And, I don’t know of any engineer [who] could have changed the design of web searches or GPS or social media to prevent that from happening. And so, if we recognize that yes, design is a good part, but there’s still going to be the human agency that is going to possibly use it in ways that you never intended it and it may even be good ways that you never intended.

I really want to make sure that when we’re thinking about how we design, and actually how we begin to incorporate these things into society, how we can give people the ability to actually indicate their preferences for what they want done, either with them, to them, with their data associated with artificial intelligence. So there may be some people like, “I’m all in! I would like to have an autonomous car. I’d like to, when I retire, have AI providing care, and that’s something that I have now given my consent to.” There may be other people wanting to live off the grid and that’s also perfectly fine, too.

So, how can we continue to recognize … It’s almost an inversion of the Golden Rule, which is, you know, “Do unto others as you would have [done] unto you.” It’s almost sort of the interesting tweak to say, “Do unto others as they will permit you to do unto them.” And then, that’s again recognizing that what artificial intelligence is, is giving up some control. It’s recognizing that something else is making a decision, and in some respects it could be the same thing for a human, but it’s letting the human that is having those actions occur, so it has the ability to indicate their preferences as to what they’re comfortable with. And ultimately when you do do those things when it’s in the public space ─ having openness and transparency ─ so, as Kay mentioned, it’s not just being able to explain why the machine made a decision, but also be able to indicate: What was its range of possibilities? What is it actually considering? What is it not considering when it makes these decisions? So, we can again have some informed understanding about the scope and sheer impact of artificial intelligence.

Kay Firth-Butterfield: Well, I’ll just echo some of those things. I think that everything that David just said is great, and really important, and leads to the need for us to have a much more open conversation about some of the things that we’re doing. One of the great things about having this great conversation with you, Michael, is that we’re reaching people who will be using AI and we’re able to have this interdisciplinary conversation, which is so important, that we have at this level and at a wider level.

Michael Krigsman: So, Kay, this issue of the unintended consequences of AI, of the use of AI, really any other kind of technology. We don’t know in advance how people will apply these technologies. How does that inform the shaping of laws, policy, and the ethical thinking as well?

Kay Firth-Butterfield: Well, yes of course, you know, with every technology that we’ve ever built as humans, there have been bad actors. And so, my raison d’être when I’m thinking about this, is thinking about things that we can do to be as safe as possible, and to educate people correctly in the use of the technology. But, I agree with David that there are going to be bad actors who are going to use technology in bad ways. The best thing we can do is try and stay ahead of those people doing those things. It sounds like a cop-out answer, but it’s, you know, since someone invented your rock, or picked up a rock and hit somebody else on the head with it, we’ve been having this trouble as human beings.

David Bray: Yeah, and I would actually reinforce what Kay’s saying. I mean, when the car came out, that allowed interstate crime, which was something that had never been possible before. I mean, you could not potentially drive to a state that you weren’t living in, commit that crime, and drive out and the local law enforcement wouldn’t know who you were because you were not a resident of that city. Does that mean we shouldn’t have cars? No, but I think that’s again, we should recognize that again, it’s how we humans choose how to use things, whether it’s good or bad, that will have impacts. What can we do as Kay mentioned, to educate the public, to ideally make it available to as many people as possible. And I think it gets to another ethical dimension that’s worth talking about, which is I personally would like to see artificial intelligence be available to as many people as possible. So, it’s not just a niche only available to a few. And so, I applaud efforts like OpenAI and other endeavors that are really rolling it out so it can be used used by everyone and it’s not limited to a few niche actors, because I think that’s going to be so key to making sure we can have these informed conversations. I would not be surprised, I hope, in the future, you have students as early as elementary school and middle school beginning to do experiments with artificial intelligence so that as they grow up , they are much more aware of what it can or cannot do, and how it can enhance their lives.

Kay Firth-Butterfield: And I think that’s really an important thing because, you know, one of the things we have been talking about is taking some control for ourselves as individuals. And unless we empower people to do that through education, then people are not going to be able to take back that power. And so, and also I think that there’s an issue around what we’re seeing in social media at the moment. I have seen a lot it of Twitter in the last two days that people are saying, “Oh well move. We have to defend our privacy.” And there’s a lot of fear of surveillance ─ switching to Tor, and more secure uses of email and things like that. That is not a positive sign for the way that some people in our society are thinking about artificial intelligence.

Michael Krigsman: Well of course, there’s also great concern that the robots are going to be taking over our jobs, and especially in light of the political climate today, that’s particularly so, particularly pronounced, those concerns. And so, what about that? That must intersect the ethical perspectives in one way or another as well. How do we think about that?

Kay Firth-Butterfield: Well, I think that we do have to be very worried about it, because AI, in my view, is a technology that will benefit mankind or humankind enormously. And, there are some great challenges that we have as humans and for our planet that we really can’t solve without AI. And so, we certainly don’t want to see a groundswell of opinion against AI by people who are losing their jobs to it. We’ve all read for the Oxford Martin study, and the Bank of America [Merrill Lynch] study that says that 47% and I think 52% of jobs in America currently done will go to automation in the next 15 or 20 years. But we have to think about the complexity of job loss, because we don’t know what the future jobs are going to be. But what we do know is that as people lose their jobs, and some think that hasn’t been done in the past, we need, and can use AI to retool and re-skill those that work that workforce to create the jobs of the future.

David Bray: So, I would build on that, too. I mean, if we go back to the analogy of when the car came out, I’m sure there was a large portion of the world’s population that were involved in raising horses and taking care of horses and things like that. But, that didn’t mean we shouldn’t not recognize the car as an advantage, and because people were worried about losing their jobs taking care of horses. And so, I think this raises a question about as jobs are lost because they can be automated, what do we as society owe those people whose jobs have been displaced, to help them re-tool, retrain as best as possible for something else. And the jury is out as to whether more jobs will be created vs. destroyed as a result of artificial intelligence. So, we need to monitor them and be aware of it. We must also be aware of there is what’s called the “unemployment effect” on people’s health, which is we humans need to have a purpose. And so, a future in which we don’t need to work because artificial intelligence is doing everything may actually not be a nirvana as it sounds like because we won’t find purposes. Or we may find purposes in advocations as opposed to vocations. But that’s a collective conversation we need to have, which is, “Where are we going together as a society? How can we make sure we bring as many people along?” As Kay said, ideally make it so they’re not as fearful of artificial intelligence.

I personally think the future is really going to be about pairing humans with AIs. Right now, artificial intelligence is a lot like a five year old. So, for example, if you have a five year old, none of us teach a five year old specifically to speak, sing, subject, verb, and object. We just expose the four- and five-year old to enough language before they actually begin to construct sentences on their own and eventually they might say something like, “I walked to the school today.” And when you ask them why they say it that way, as opposed to, say, “To school today I walked,” the five-year old is just going to say, “Well, I never heard it said that way before.” They’re not going to have a deeper reason why. And so, I think right now, where there’s going to be plenty of automation that’s possible by machines and by artificial intelligence, when you ask the deeper question of “Why right now?” It’s just going to be because that’s what I have seen in the data, or that’s what I’ve never seen before. It’s not going to be telling you the deeper reason. That’s going to require humans at the moment to be able to dive deeper. And so, I think it’s really going to be about pairing humans and artificial intelligence, at least for the next 20 years in my opinion.

Kay Firth-Butterfield: I certainly agree with that and I think that it’s a great, great thing for us to have the augmentation of AI as humans. We’ll be able to do our jobs better, and as I say, perhaps solve some of these intractable, currently intractable problems. I think two points I wanted to just come back to on David’s comment: One is that it was easier for people who had been looking after horses to perhaps move to looking after cars. You know, grooming a horse, and polishing the car. They’re manual labor. If we are looking at a change which actually requires a change from manual labor to coding, or any of those sort of things, then that’s a much bigger gap to bridge and we need to think about how that might be managed. And also, as a historian by background, I really worry about the analogies with the industrial revolution because the industrial revolution hurt a great deal of people over a long period. And yes, we came through it and we developed something better. But, it looks as if this industrial revolution will be much faster, and we need to prepare not to hurt as many people very quickly.

David Bray: And, I think that’s very true actually because it’s worth noting that when the industrial revolution happened, and people moved from working on farms basically 24/7 to factories, and doing basically rote, repetitive actions, aside from the fact they’re doing rote, repetitive actions for twelve hours at a time is not healthy for anyone, so what was also very painful was the way society collectively dealt with that transition from agriculture to industry was actually through alcohol and gin. And so, similarly when we made a transition from the industrial revolution to the post-WWII era, in which people didn’t need to work as much, and actually worked 9-5 jobs, the interesting thing that happened with that, was there are some that actually argue the way we dealt with that was through TV dinners and sitcoms, which, while not as bad as alcohol, we still needed an outlet. So Kay’s absolutely right. It’s going to happen in a much shorter time period. It may be as big, if not bigger change. And so, having again that conversation about what do we, as society, owe each other is really key to have now, because we don’t know! And none of us know if the job we’re currently doing today in two or three years will be done better by machines.

Michael Krigsman: You know, one of the big difference I think between this change that’s taking place, in terms of the fears around job displacement vs. during the period of factory automation is when factories were being automated, they brought in robots, and people could walk into the factory and you could see, “This machine is doing this task, and it’s a physical thing and you can see how this task is now being done that I used to do, and so I understand how my job is being displaced.” However, with AI, I think part of the fear is there’s this unseen hand, there’s the computer that’s a black box and we have no visibility or transparency into it, and it’s changing things, it’s making my job, or I have the fear it’s making my job go away. But it’s not tangible. And that changes the psychology of how people relate to the technology.

David Bray: Yeah, I would agree. My experience is, again, I previously worked in the Bioterrorism Preparedness Response Program, so we dealt with bioterrorism. And what makes bioterrorism such a challenging subject is that it is not seeable. That if you say something bad has happened, even if you haven’t done anything, the fact that it’s not seeable makes people worried, makes people fearful, and makes people worry something’s occurred. And so, we humans don’t do well with things that are invisible. And right now, most artificial intelligences are not written in a way in which you can easily show what they’re doing. Like you said with the factory example. So I think part of the interesting ethics of design going forward is, how easily can you elucidate both what the machine is designed to consider - recognizing again that it’s not going to be like A+B+C+D. That’s not what artificial intelligence does. It’s goal-bound. It’s often exploring a space much larger than you can express in a diagram. But, something that can help people understand what it is possibly doing, what it is not possibly doing in order to help people overcome that possible fear factor.

Kay Firth-Butterfield: And I think that that’s interesting because actually you have two sides of the equation here. When we have the AI that can’t be seen because it’s locked away in our computers, or in the “black box” as it’s often talked about. But, when we actually do put AI into robots, it’s very interesting because we then see them as being created in our own image. And I think that that’s really interesting. You see robots being called, and the people relating to robots almost as if they’re humans.

David Bray: Right, yeah. And well even with computers, how many of us have wanted to hit a computer because it did something we didn’t want it to do, thinking it would somehow respond to the fact that we hit it. But, you’re right, there are these cases of young children being educated through a robot, and then they become their friends and they hug them. So, we do anthropomorphize machines if we can see them.

Kay Firth-Butterfield: And, just I was reading today that Google’s looking at cybersecurity, and had named the three algorithms with human names, that they were using. [Laughter]

Michael Krigsman: So we want to have warm, fuzzy AI algorithms that make us feel good. We have, really, just a couple of minutes left, and so let’s just finish. Kay first, and then I’ll ask David just in a minute: what advice and suggestions do you have for people who are thinking about the law in, and the evolving law in regard to AI?

Kay Firth-Butterfield: Well I think the advice to lawyers is that very soon, you will be receiving… You will see those cases coming across your desk, and you need to get up to speed around artificial intelligence. And, what’s going on in artificial intelligence now, I think just going back to that job creation thing, actually there are going to be a lot of jobs around, so we’re not going to kill all the lawyers by automating them just yet, because we are going to see experts needed in court. For example, instead of cross-examining a driver, we might have to cross-examine an algorithm, a.k.a. an expert on the system. If you are in any business, you need to be looking at what AI can do for you, and what the impact of AI will be on your business. So there are two pieces of that, because I genuinely believe that AI will change everything. And if you don’t start looking now, you will be too far behind.

Michael Krigsman: And David Bray, your thoughts on guidance for policymakers who are looking at the policy, the public sector policy, and regulatory side of this. Any thoughts or guidance for us, very quickly.

David Bray: So again, I’m wearing my Eisenhower Fellow hat, not my FCC hat. What the conversation I had in Australia and Taiwan is, cloud computing in some respects is the appetizer, artificial intelligence and the Internet of Everything is really going to be the main course that we’re going to be consuming over the next five years. And, I don’t know if I can necessarily give advice necessarily to policymakers, but I’ll say what Kay said. Any organization and any entity should recognize that this will disrupt how you operate and it’s a question of whether or not you are very intentional about it. Or, someone else is going to do it to you. So, start on that journey now. Start having conversations. And if there’s one thing I really call out, it’s look at the OpenAI effort and other efforts like it that are trying to make this open and available to people as a place to try to either begin experimenting, or if you don’t have the time to experiment, maybe have some of your employees begin to experiment what’s possible. Because, we’re only going to get the expertise we need to know in this era through the experiments that we need to do with artificial intelligence.

Kay Firth-Butterfield: And I think just to quickly add to that, we need to have more networking. We need to talk about this more. So, thank you very much for this opportunity.

David Bray: Yes, thank you Michael for the great service!

Michael Krigsman: Well, thank you two! This has been an amazing conversation, and in about a week, we’ll have the transcript up on the CXOTalk site, and you can dig in and watch the replay. Just a tremendous amount of information. You have been watching Episode #203 of CXOTalk. Our guests today have been David Bray, who is here in his Eisenhower Fellowship… “wearing his Eisenhower Fellowship hat,” is the right way to say it, although he’s also the CIO of the FCC. And, we have been talking as well with kay Firth-Butterfield, who is truly one of the world’s leading experts on the law and ethics of AI. And, a clear message has been that AI is going to be changing a lot of parts of our lives, and for all of us regardless of the job that we do, the time to start learning about this, thinking about this, and understanding more of it, that time is now. So, thank you so much, and we have another CXOTalk tomorrow, actually. So join us! Thanks so much everybody, have a great day. Bye-bye!

Building the Business Case for Data

Irfan Khan, CTO, SAP
Irfan Khan
Chief Technology Officer
SAP
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK
 

The case for digital transformation starts with engaging stakeholders around the core business model and outcomes they expect. Of course, IT concerns are important, but transformation must focus on the bottom line, which goes beyond IT alone.

To accomplish, be sure the platform considers future processes as well as current ones. Without the right platform, the business model itself might become unsustainable in the face of change. Therefore, technology foundations must evolve at the same time as business foundations.

To engage stakeholders, create a succinct point-of-view document, limited to a single page, which summarizes likely benefits to the business. Be sure stakeholders understand that digital transformation is a business-wide process intended to achieve very specific outcomes.

Transcript

Irfan Khan: Setting a solid case for your business transformation is imperative. It starts off with engaging the stakeholders, and that’s across the spectrum of both senior leaders in the company, but also the business users of course as well. If we understand that the disruption we are introducing to the business is not just there to provide another iteration of IT to get their work done, it’s really there to provide greater profitability for the business, provide greater shareholder value, and ultimately to product new business options and new business models, that will essentially provide greater monetization in the future.

So the platform needs to be significantly strong enough and foundational to support not the weight of current operations, but future operations. Business processes do evolve, they do change, so you need to be able to create more of a virtual experience, a virtual understanding of where data is today, and how the evolution needs to be understood in the future as well. So this is really a very significant part. As the processes, and of course your branches evolve, your translations into the technology foundations have to also evolve at the same time.

Having met with many customers, who are all trying to embark on their own journeys in terms of digital transformation, the one piece of advice I typically give them is, “Be succinct. Try to define exactly what the outcome should be. And a good approach to doing this is to actually create a point of view document, and I would literally limit this to a single page. If you could write down, in a succinct manner, a very crisp fashion, what exactly the benefits to the business would be, what the outcome [is] that you would be able to achieve, and that could be communicated widely…”

Ultimately, a digital transformation is company-wide, enterprise-wide. It’s not restricted or limited to one particular business user, or one line of business. Let’s get the engagement of all the stakeholders, make sure that the understand the outcome that they’re all trying to drive towards, and ultimately the success that we’re able to drive, overall, n2n, for the corporation.

Irfan Khan: Setting a solid case for your business transformation is imperative. It starts off with engaging the stakeholders, and that’s across the spectrum of both senior leaders in the company, but also the business users of course as well. If we understand that the disruption we are introducing to the business is not just there to provide another iteration of IT to get their work done, it’s really there to provide greater profitability for the business, provide greater shareholder value, and ultimately to product new business options and new business models, that will essentially provide greater monetization in the future.

So the platform needs to be significantly strong enough and foundational to support not the weight of current operations, but future operations. Business processes do evolve, they do change, so you need to be able to create more of a virtual experience, a virtual understanding of where data is today, and how the evolution needs to be understood in the future as well. So this is really a very significant part. As the processes, and of course your branches evolve, your translations into the technology foundations have to also evolve at the same time.

Having met with many customers, who are all trying to embark on their own journeys in terms of digital transformation, the one piece of advice I typically give them is, “Be succinct. Try to define exactly what the outcome should be. And a good approach to doing this is to actually create a point of view document, and I would literally limit this to a single page. If you could write down, in a succinct manner, a very crisp fashion, what exactly the benefits to the business would be, what the outcome [is] that you would be able to achieve, and that could be communicated widely…”

Ultimately, a digital transformation is company-wide, enterprise-wide. It’s not restricted or limited to one particular business user, or one line of business. Let’s get the engagement of all the stakeholders, make sure that the understand the outcome that they’re all trying to drive towards, and ultimately the success that we’re able to drive, overall, n2n, for the corporation.

Digital Transformation and the CIO

Martha Heller, Founder and President, Heller Search
Martha Heller
Founder and President
Heller Search
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK

Business expectations of the Chief Information Officer role have changed dramatically, forcing CIOs to adapt and evolve. This episode explores what's happening with CIOs and offers practical advice to both the business side and to CIOs themselves.

Our guest is author Martha Heller, who is president of Heller Search Associates. Before she established her career in executive search, Martha was Founder and Managing Director of IDG's CIO Executive Council, a professional organization for CIOs.

During her seven-year tenure at CIO magazine (IDG), Martha developed leadership programs for CIOs and directed the CIO Best Practice Exchange, a members-only network of IT leaders from top-tier organizations. Martha wrote a weekly column on IT leadership and led a series of executive events on IT staffing, career development, and leadership. Before CIO, Martha was an editor at Rutgers University Press.

Martha continues to engage with CIO audiences every day. She is author of The CIO Paradox: Battling the Contradictions of IT Leadership, and Be the Business: CIOs in the New Era of IT. Martha writes CIO.com’s Movers & Shakers blog, and her e-newsletter, The Heller Report: You and Your CIO Career, is read by thousands of IT professionals every week.

Transcript

Michael Krigsman: Episode number 198 of CXOTalk. I’m Michael Krigsman, and CXOTalk brings the most innovative leaders in the world to talk about the impact of digital disruption on our world, on our society, and on our companies and organizations. Today, I am so thrilled, because we’re speaking with Martha Heller. Martha is a multiple book-author, and she is the founder of Heller Search Associates. Martha is a very prolific speaker at Chief Information Officer events, and without a doubt, one of the leading and most important thought leaders among CIOs, and supporting that CIO community anywhere in the world. so, I’m so thrilled to welcome Martha, and I want to say a huge thank you to Livestream, which provides our video infrastructure. And Livestream folks, if you are listening, we love you, you guys are great. Thank you. So, Martha Heller, how are you?

Martha Heller: I’m doing great! You’re making me feel like a rock star, Michael. I appreciate it!

Michael Krigsman: Well, I think in the world of CIOs, you are the rock star, and that’s no lie!

Martha Heller: My point exactly!

Michael Krigsman: So, Martha, tell us about the things that you do, give us some sense of context and place, and I see sitting next to you is your latest book, so tell us!

Martha Heller: Absolutely! So, thanks so much for the question, Michael. You know, I joined CIO Magazine back in the late 90s, when I started an online column for CIO magazine called “Soundoff”, and aging with the CIO community ever since then. So, I believe I have communicated some kind of message to the CIO community on a weekly basis for the last 17 years. So, if you do the math on that, that’s quite a bit of content, quite a bit of volume. In 2005, I decided to parlay that experience in those networks into the wonderful world of executive search, so my firm recruits CIOs and the folks who work for them, and boy once you’re trying to convince a CEO to hire a CIO, your knowledge of the challenges and contradictions of the CIO world becomes quite acute. So, at this point, I run a search firm, and I write all kinds of content for the CIO community, and I’ve just been endlessly fascinated by the evolving nature of that role.

Michael Krigsman: You know, I aso find it interesting that historically, and this is changing, historically the CIO role has been a male-dominated profession. You’re one of the top influencers in that community, and yet you’re a woman. So I find that’s also quite interesting as well.

Martha Heller: Well, you know, I’ll just address the gender diversity among CIOs. It’s true that the percentage of women who are CIOs is very, very small, and you know, what’s changing is that IT is not the only destination for women who are interested in technology. Marketing, for instance, is hiring technologists. Every company is becoming a technology company, so women interested in technology need not have IT on their career plan, there are many other opportunities for technology-oriented women. In terms of my role, being a woman in this sea of men, my background is journalism, and journalism, which has been more oriented towards gender diversity, let’s say, than IT. So even though I have chosen the wonderful CIO as my journalistic subject for the last 17 years, my background really ultimately is journalism, where you do have more gender diversity.

Michael Krigsman: In fact, we are doing a show next week with Andi Karaboutis, who used to be the CIO of Dell, and is now an executive vice president at Biogen, along with Kim Stevenson, who was the CIO of Intel, and is now Chief Operating Officer of one of their divisions, and we’re going to be talking next week about exactly these issues.

Martha Heller: What is interesting about that is both those instances, very strong female CIOs who are now leading organizations that have CIOs in them, while they have moved on to more broad business responsibilities. I’ll bring up another

Michael Krigsman: Episode number 198 of CXOTalk. I’m Michael Krigsman, and CXOTalk brings the most innovative leaders in the world to talk about the impact of digital disruption on our world, on our society, and on our companies and organizations. Today, I am so thrilled, because we’re speaking with Martha Heller. Martha is a multiple book-author, and she is the founder of Heller Search Associates. Martha is a very prolific speaker at Chief Information Officer events, and without a doubt, one of the leading and most important thought leaders among CIOs, and supporting that CIO community anywhere in the world. so, I’m so thrilled to welcome Martha, and I want to say a huge thank you to Livestream, which provides our video infrastructure. And Livestream folks, if you are listening, we love you, you guys are great. Thank you. So, Martha Heller, how are you?

Martha Heller: I’m doing great! You’re making me feel like a rock star, Michael. I appreciate it!

Michael Krigsman: Well, I think in the world of CIOs, you are the rock star, and that’s no lie!

Martha Heller: My point exactly!

Michael Krigsman: So, Martha, tell us about the things that you do, give us some sense of context and place, and I see sitting next to you is your latest book, so tell us!

Martha Heller: Absolutely! So, thanks so much for the question, Michael. You know, I joined CIO Magazine back in the late 90s, when I started an online column for CIO magazine called “Soundoff”, and aging with the CIO community ever since then. So, I believe I have communicated some kind of message to the CIO community on a weekly basis for the last 17 years. So, if you do the math on that, that’s quite a bit of content, quite a bit of volume. In 2005, I decided to parlay that experience in those networks into the wonderful world of executive search, so my firm recruits CIOs and the folks who work for them, and boy once you’re trying to convince a CEO to hire a CIO, your knowledge of the challenges and contradictions of the CIO world becomes quite acute. So, at this point, I run a search firm, and I write all kinds of content for the CIO community, and I’ve just been endlessly fascinated by the evolving nature of that role.

Michael Krigsman: You know, I aso find it interesting that historically, and this is changing, historically the CIO role has been a male-dominated profession. You’re one of the top influencers in that community, and yet you’re a woman. So I find that’s also quite interesting as well.

Martha Heller: Well, you know, I’ll just address the gender diversity among CIOs. It’s true that the percentage of women who are CIOs is very, very small, and you know, what’s changing is that IT is not the only destination for women who are interested in technology. Marketing, for instance, is hiring technologists. Every company is becoming a technology company, so women interested in technology need not have IT on their career plan, there are many other opportunities for technology-oriented women. In terms of my role, being a woman in this sea of men, my background is journalism, and journalism, which has been more oriented towards gender diversity, let’s say, than IT. So even though I have chosen the wonderful CIO as my journalistic subject for the last 17 years, my background really ultimately is journalism, where you do have more gender diversity.

Michael Krigsman: In fact, we are doing a show next week with Andi Karaboutis, who used to be the CIO of Dell, and is now an executive vice president at Biogen, along with Kim Stevenson, who was the CIO of Intel, and is now Chief Operating Officer of one of their divisions, and we’re going to be talking next week about exactly these issues.

Martha Heller: What is interesting about that is both those instances, very strong female CIOs who are now leading organizations that have CIOs in them, while they have moved on to more broad business responsibilities. I’ll bring up another topic in a moment, and that is CIOs on boards, and that is a topic of great interest to the CIO community and corporate boards, “How do I get in on one of those opportunities?” In many instances, CIOs on corporate boards involve women, that, you know, whether it’s corporate boards trying to achieve diversity? I don’t know. But you have many instances of CIOs being appointed to corporate boards.

Michael Krigsman: So, you mentioned, you spoke about tensions, and of course the CIO role is changing, the goal of technology in the organization is changing, and maybe a good place to begin is what is your view of what exactly is changing in the world that’s driving CIOs to need to evolve?

Martha Heller: Sure. So, you know, I’m going to quote Bask Iyer, who is the CIO of VMWare.

Michael Krigsman: He was a guest on our show.

Martha Heller: It’s a small circle! You run in small elite circles. So Bask talks about the “CEO missing out syndrome”. And it’s where a CEO says, “I like my CIO. He, or she, has kept costs down, we’re as secure as I believe we can be, we’ve outsourced the appropriate functions, we’ve got good resilience, employee productivity tools; my CIO has done a great job, in fact, he’s done everything I’ve asked him to do! However, I feel like I’m missing out. There are cool things happening in Silicon Valley. You know Uber? What’s going to be the Uber in my industry, and are we really on top of the technology innovation that’s going to allow us to not be disintermediated? And, I look at my CIO and think, my CIO has never really been an innovator. He’s an operator which is everything I’ve asked for, but I’m going to go hire a Chief Digital Officer.”

So, that move, which many CEOs are making, can be fine, but it can also spell trouble for an organization for a number of reasons. CIOs who would like not to work under yet another technology leader, would be well-advised to step into the so-called “digital technology void”, and drive digital transformation not by themselves, but through partnerships and alliances as they’ve always done everything. But why now, what is happening with the CIO role? It is CEO-driven. And it’s in part, and it’s CEOs saying, “We need digital transformation, but my CIO’s an operator. I’m going to hire this other person. I’m not going to hire a new CIO.” So, digital transformation is driving an evolution of the CIO role toward influence, strategy, getting closer to the revenue stream.

What I will also say is that I’ve talked about the demand-side part of the CIO evolution, it’s CEOs expecting more from technology, more from IT. But I think CIOs themselves are also thinking, “You know, how am I going to spend this incredible digital revolution that we’re in the middle of? Am I going to sit around implementing the ideas of others, or am I going to move and go to another company, or change my role here, that allows me to really be a part of it, and to create a whole different layer, or level, of change?” So, ultimately, what’s changing is every company is becoming a technology company, software is making its way into products and services in ways that we’ve never seen before, that will have an impact on the leader of the technology function.

Michael Krigsman: So when you talk about the digital void, what do you mean by that, and how can a CIO fill those shoes?

Martha Heller: So I think one important concept to understand is that digital is not a function that requires a new executive and new hires and new resources. Digital is a capability that companies need to adopt across all of their businesses and all of their functions. CIOs who understand their roles as critical capabilities champions, “I have a uniquely end-to-end view, and I can see where we’re doing little pockets of digital innovation, where we’re not doing any innovation, which business leaders are spending on digital technologies and which aren’t. I need to create digital as an enterprise capability, and bring all of that to my company. Because if I don’t, we’re going to have little pockets of what I think of as ‘vertical digital innovation.’ We don’t have enterprise scale, we don’t have an enterprise strategy, and we’re entering risk into the organization.” So, you know, the “digital leadership void” is where CEOs are attempting to clamp down on, or get behind this concept of “digital”, so their instinct is to throw a new executive at it and throw a function at it, when really, digital is an enterprise capability that a CIO with an end-to-end view is capable of driving.

I’ll make one more comment on this. Whenever I talk to a CIO and they say something pithy or philosophical or existential, I steal from them and I tweet it out. I tweet out something that they said without attribution because A) we don’t have the character space and I want it to be more real-time than that. And then at the end of my book, I took my favorites from the last year and I listed them. And one of my favorites is when a CIO said to me, “We don’t need a digital strategy. We need a business strategy for a digital world.” And I think that that is a concept that all the leaders in the company need to have, rather than thinking, “What’s digital? We don’t know what it is, it could mean a lot of things, maybe it’s marketing, maybe it’s supply chain, maybe it’s employee productivity. Let’s hire a new executive to figure it out.”

Michael Krigsman: So the idea that the digital strategy is really a business strategy, rather than just a technology strategy, makes perfect sense. But I think the question then comes up: if you are a CIO and you want to be the person that is leading this, what are the obstacles that may interfere with that happening, and how do you overcome those obstacles?

Martha Heller: So, probably the greatest obstacle is the perception that IT is an operator, and that IT is about support and enablement, and not about innovation and strategy. And, what I would say to CIOs in their own companies is that if that perception is so embedded into the fabric of this culture and it is so deeply held, perhaps, this culture is not the right environment, not the right place for you to achieve your digital leadership dreams, and it may be time to pursue another opportunity where you have a chance to change those perceptions. That would be one major obstacle, and probably the most significant.

Another obstacle is the team. If you have a team of people who feel that their role is wait for the order, then take the order and execute on the order, you will not be able to achieve digital leadership, because you may change your relationship to the business but if your senior team hasn’t changed theirs, and you don’t have the right people in those spots, you will also have trouble changing that perception. But I would say, you know, the best way to start moving toward digital leadership is again, to recognize that digital is a competency and your job is to create that competency.

So I’ll give you an example: Dave Smoley is the CIO of AstraZeneca. And Dave said that, “We’ve got pockets of digital activity happening all over the place, but we’re not talking to each other.” So he set up a digital center of excellence. This is a cross-functional group, it does not exist in marketing, it does not exist in IT, and he brought in people from all different parts of the business that he felt had a leadership role in digital transformation. Once he got the center off the ground, he brought in a leader from another area of the business, someone with a lot of experience and respect, and this is critical, had some systems implementation experience. It’s fine and pretty to talk about the front end, but everything’s got to tie up with architectural integrity, and somebody with implementation experience will understand that.

He also made sure that in the center of excellence, he placed somebody in his IT organization. He happened to put his CTO in there. What he said was, “I want to avoid the scenario where there’s the digital conversation, and then there’s the IT conversation. There should be one conversation.” And so Dave incubated it, he got it off the ground, and then once he felt that the digital center of excellence was on firm footing, he moved on within AstraZeneca to climb other mountains.

Another thing that he did and that I’ve seen maybe CIOs of companies do, is that they take their executive committee on a field trip to Silicon Valley, where they meet with a whole host of digital vendors who are doing cool work in their field! That’s the work of a CIO in digital transformation, and those are some first steps, and it’s not easy, but what’s easy really? Those are some first steps CIOs can make to combat the past perception that IT enables and supports but does not drive, and to start getting that digital competency grounded across the enterprise.

Michael Krigsman: Yes. Dave Smoley is certainly a great CIO and innovator. Arsalan Khan on Twitter is asking how do you prioritize things like strategy, politics, education, from the CIO perspective? How do you move forward and fill that digital void, as you call it?

Martha Heller: Well, I would say the first priority is get your house in order. You know, if we think about Maslow’s Hierarchy of Needs, don’t talk to me about self-actualization before I have a roof over my head. Don’t bother having a conversation about strategy is no one’s getting their email. So, I would say, if you’re going to prioritize, the first thing you would prioritize is if you would have your basic fundamentals of IT in shape. The second piece is the team. If you have a team that can partner with a certain area of the business, and have a conversation that that business leader feels is peer-level conversation. You have that in order. The other thing I would look at is, do you have Agile development and DevOps and some other forward-looking development and delivery processes in place, and once you’ve got your house in order, it’s about making sure that you’re part of the conversations where vision and strategy are discussed. And I’ll bring up another concept now in response to our audience question.

This comes to me from Scott McKay who is the CIO of Genworth Financial. And Scott says, “In a boardroom, in an executive boardroom, around me you’ve got chairs around the table and chairs along the wall. The chairs around the table are filled with the ‘what’ executives. They decide what the company is going to spend its money on and what the company is going to do in terms of strategy. And then you’ve got the chairs around the walls, and those are the ‘how’ executives. ‘Oh, that’s the strategy? Thanks for letting me know, and here’s how we’re going to get it done.’ And CIOs have traditionally been in that ‘how’ seat, and it’s a good thing too, because ideas without execution are cheap! So, the ‘how’ executives, the CIOs spend their careers getting stuff done. Now, when IT has an opportunity not only to support business strategy but actually to inform and define it, it’s time for the CIOs to switch chairs and to get up to that ‘what’ table. Now you can’t let go of the enabling because everything has got to get done, but it’s about expanding their horizons.”

So, in terms of prioritizing, I would say get your house in order which includes your killers in your team, but after that it’s to do that gut check and make sure you’re ready to be that “what” executive. It’s a different level of peronal risk to say, “Here’s what we should do” versus how we’re going to do it. And then it’s getting into those meetings and making sure you understand the strategy. And then of course if you don’t understand the business context, don’t worry about the strategy. And then it’s just like everything else: vision becomes a strategy, strategy becomes goals, goals have timelines, and Lord knows CIOs know a lot about that.

Michael Krigsman: Martha, everything you’re saying, of course, makes perfect sense, but it also has built into it the assumption that the CIO has the business capability, the experience, the skill to take on this innovative business role, and work across silos and departments and organizations inside the company. And that can be a challenge as well.

Martha Heller: Well, that’s part of the job. You know, recently, I was giving a keynote to a large group of CIOs, and when I got to the section about being a ‘what’ executive rather than a ‘how’ executive, and doing the gut check and taking the personal risk to do strategy, a CIO stood up and said, “I don’t have the skills to do that. I like implementing. I could implement all day long.” And I said, “Great! Know yourself. Know that you like to implement, but don’t be surprised or confused or concerned when your CEO hires a Chief Digital Officer or Chief Innovation Officer.” So what I would say to those CIOs who say, “I don’t have the skills, I don’t have the business acumen, I’m happy doing what I’m doing,” keep doing it but understand that as the business becomes more technology-oriented, your role will be marginalized and new technology leaders who are not in IT are going to come on board and you’re going to have to deal with them as business partners. So, know if you don’t have the business skills or the business context and you’re ok with that, define your role accordingly. But if you want to be a digital leader, having business understanding is everything.

Here’s a great place to start. This is actually quite pragmatic and revolutionary all at the same time…Let me just finish this thought Michael… Here is a great place to start. Stop using traditional IT metrics to measure your team. Stop defining investments by 3-9’s and uptime and least-times, and start using the metrics of the business. JetBlue, for example, Eash Sundaram who was CIO of JetBlue but is now CIO and Chief Innovation Officer, he’s certainly someone who’s moved forward in this way, he no longer measures his team on any traditional IT metrics. He shares with them the metrics held by the entire airline, which is called “Departure Zero”. How many of our flights leave the gate 0 minutes after departure? He measures his team’s performance and he measures their investment priorities based on its impact on D-0. When you are measuring your team based on the same metrics that the business holds dear, guess what? You’ve got a level of business acumen that you didn’t have before, and so does your team.

Michael Krigsman: And you know, it’s a very interesting point. How common is it in today’s world that’s very much in transition?

Martha Heller: I would say, one of the biggest challenges for CIOs is letting go of a degree of traditional control that their own IT organizations have always had over technology. And when you let go of metrics such as uptime and resilience and cost, and start using business metrics, it can be very unnerving and scary for people who have not done that before. So I think that in the whole wave of companies that have been slow to adopt new technologies that have kept IT in their own silos, I would say that business metrics are a ways off. But, my book is filled with CIOs who are leading innovation in their companies, who are business leaders, and it’s become much more widespread. And I think we will see a permeation through IT organizations in all different industries of business metrics as the barometer of success rather than IT metrics. And a comment on that: when those CIOs turn around to manage their IT vendors, I’m sure they will be employing traditional IT metrics.

Michael Krigsman: We’re talking with Martha Heller who is a multi-book author and truly one of the most important influencers in the CIO community. And Martha, you have your most recent book next to you so please, hold it up for us.

Martha Heller: I do! Here it is right now!

Michael Krigsman: “Be the Business.” And Martha, let’s talk about the relationship between the CIO and these positions like CDO, Chief Digital Officer. And you explained how the CDO role comes about, which is there’s this “digital void,” as you call it, and if the CIO doesn’t step up to fill that void, the organization will hire somebody else who does. But in many organizations, that’s not even an explicit decision that happens. The organization or CEO says, “Hey, we need to get a CDO in here.” And so, what is the quote-on-quote “right relationship” between the CIO and other executives like the CDO, CMO that are all encroaching and overlapping with IT today?

Martha Heller: You know, I’m going to take a step back in answering that question and say that we have been in an industrial economy since, I would say, the very early 19th century. We’ve been in a digital economy for about five or ten minutes now. The industrial economy is all about “more assets, more plants, more real estate, bigger teams.” The industrial economy is all about building walls around companies to separate us from other companies, and building walls around our departments. The digital economy is very different. The digital economy is all about algorithms trumping teams. You can do something with an algorithm and you don’t need a team, and that is often a better way to go. It’s about leveraging partnerships and breaking down the walls between departments in a business. It’s about creating permeable boundaries so that our vendors are not held at arm’s length, but become part of our workforce. And so, the most important work for a CIO to do vis-à-vis her executive peers, as per your question, is to use an end-to-end perspectives to free executives from their traditionally-held vertical prisons so they can look up, across, out, at their digital future together. So it’s the CIO’s ability to get their peers thinking fundamentally different about their business, and I’m going to give you a great example.

So this is one of my very favorite CIOs, Kathy McElligott. She is now the CTO at McKesson, but when I interviewed her, she was the CIO at Emerson, the electronics company. So when she was CIO at Emerson, when she came on board, she said, “You know, we’re aligned, IT has a strategy that is aligned to where the business is going. However, this business is putting sensors in all of our products, we’re collecting a tremendous amount of data, which is great, but we have not crafted a business strategy that capitalizes on any of that. The very fundamentals of what we are and what we do as a business must change, based of Internet of Things and Big Data and all of that.”

And so what she did what she put together what she called the “Business-IT Strategy Board,” 25 executives across the business, and they want to meet quarterly, monthly, I don’t remember the frequency, and let’s talk about big topics. So in her first meeting, she got them all together, and then she realized they were all sitting around waiting for her to give project status updates. And she said, “That’s really not what this meeting is.” So she brought IBM in to really workshop a strategy with them, and then after that she really was able to run meetings about internet security, about Internet of Things, about, “What would happen if we put the customer at the center of everything that we did here?” Now, some of these topics had a technology bent and some did not, and that’s almost irrelevant. Her job, as CIO, vis-à-vis her executive peers, was to facilitate a conversation that allowed them to look horizontally and together at the future of the company, regardless of whether there’s a CDO or a Chief Information Officer in the mix. That’s the CIO’s most important work.

Michael Krigsman: But still, as a practical matter, the organizational boundaries and the politics in many companies start to come into play. So again, what is the right way for the CIO to interact with these peers?

Martha Heller: Well, I would say, you know, this is classic stuff, I mean I probably wrote this article in 1999 for CIO Magazine. But it’s understand your business partners’ challenge, understand in business terms; consult with them about the growth plans or challenges of their business, and then define an IT strategy to help them with that; and then oversee its delivery. I mean, that’s how you win friends. But when it comes to driving innovation, which is one of our topics here, pick a fearless executive for who you have successfully delivered in the past, who believes in you and has your back, and work with that person on something new and innovative, and use that as a test case. Once you’ve got a success there, as my friend Steve Gold, the CIO of CVS says, “Wash, rinse, and repeat.”

Michael Krigsman: So collaborate on an innovative and interesting business case with the right business partner.

Martha Heller: Absolutely, and use that almost as a marketing tool to bring in the more skeptical executives.

Michael Krigsman: That’s a really key point. Now you talked about putting the customer at the center, and how does that translate into the CIO and the CIO activities?

Martha Heller: Well, I think for a long time we looked at business opportunities from the perspective of our supply chain, or our manufacturing processes, or in terms of what makes our numbers move in order to create shareholder value. Well, now we’re in a situation where customers call the shots. Customers have a lot more flexibility in who they do business with, customers have different thoughts about the style in which they want to to business, and companies that are not acknowledging that the customer is at the center of everything that they do are going ot be spending money in the wrong places.

I would also issue a cautionary tale. Putting the customer at the center of everything you do was a strategy that Kathy McElligott at Emerson brought forth to her team. But here’s where I would have a cautionary note about that. When companies imagine the idea of digital transformation or innovation, very often they think about marketing, right, and the customer-customer engagement and marketing. “That’s our digital, that’s our technologies, that’s where we want our CIO to spend most of his or her time.” But the fact is that digital is not marketing but with social media instead of print ads. Digital is much more than that. Digital is supply chain. Digital is employee productivity. Digital is the way we engage with our partners. So, you know, while, sure, you want to put the customer at the center of everything you do, you want conceptualize digital transformation as something larger than at that point where the customer and the company meet.

Michael Krigsman: Now, we’re going through some of the strategies that you go describe in your book that CIOs should adopt to be successful, and an interesting one is you talk about storytelling, and we hear storytelling again in relation to customers, we hear storytelling associated with marketing. So when you say that the CIO should be a storyteller, tell us what you mean by that.

Martha Heller: Sure. So ever since we were little, we loved to hear a story, right? And for those of us who have children, you know exactly which books have the pages falling out of them because we have to read the story so many times. And stories are a great way for two people of different backgrounds to get to a common ground on something abstract, and CIOs are always in a position of having to get to common ground on something abstract. So, I’ll just give you a quick example. Malini Balakrishnan, when I spoke to her, she was the CIO of a construction company, and when she got there, she said, “We have such old technology, we’re having outages left and right, and what we need is an ERP.” So she went to the team and said, “We need an ERP” and the CFO said, and this is a verbatim quote, “You will pry the old system out of my cold, dead hands.” So she thought, “Ok, I need another approach.” So she came up with the idea of taking a clip from the movie “Speed,” and in that clip, Keanu Reeves is a detective and he’s on a bus that’s got a bomb on it that will explode if it goes less than 50 miles per hour. So he has the idea of bringing another bus onto the highway, got to keep both of them going at 50 miles per hour, and everybody from the one bus has to walk across a rickety scary plank on the speeding buses from one bus to the other. So, she presented that clip to the executive committee and said, “This is our ERP situation. We’ve got to get a new bus ready while the old bus is running and everybody’s got to walk from one bus to the other.” And once she was able to show that clip, she was able to get them to the point of understanding the need for an ERP, and of course, people mentioned that story to others, so she had people carrying that story forward for her, where if she had shown an architectural schematic of the legacy systems overlaid with the ERP, she would not have had as much of an understanding of what was needed to move forward within the company. So that’s just an example. She didn’t have to come up with the story herself. She found something great that everybody could relate to, that’s a great way to get executives on the same page, at least initially, in moving forward.

Michael Krigsman: So the issue here is communicating in a manner that the business will find compelling, particularly that the business will find relevant and meaningful to their situation and that will push the business, therefore, to make the change that you as the CIO want to be made.

Martha Heller: Absolutely! I’ll give you one more example, and this was the CIO of a large pharmaceutical company who said he was having trouble getting his fellow executives to understand the multiple roles that IT plays. So he hired a photographer to take an aerial view of a three lane highway. In the highway you had one lane, motorcycles, in another lane, taxi cabs, and in another lane, big 18-wheelers. And he said the 18-wheelers are our global processes and our global technologies, we’re not creating change there, don’t even bother asking us to change that, that’s solid. The taxis are the more localized solutions for different regions that need something more specialized, and the motorcycles are pockets of innovation, new, cool stuff we’re doing, and with time, the motorcycles become taxis and the taxis become trucks. But he said, after he walked out of that meeting, having shown that aerial view, he saw the light in the eyes of his executive committee. So a story doesn’t have to be a fable. It can be a photograph, it can be a pie chart, but it needs to be designed to expressly communicate something abstract to a variety of audiences.

Michael Krigsman: So relevance is at the heart here, and we hear about relevance and the CIO. So let’s talk about factors that make a CIO relevant to the business.

Martha Heller: I love that question because I have a great answer for it. And this comes to me from the CIO of GE, because you know, Michael, I have no original thought, all I do is take the good thoughts of CIOs and put them together in a palatable form. But what Jim Fowler, the CIO of GE is concerned about is the relevance of CIOs and the relevance of IT and he says that, “We have a generation of workers graduating from college and coming into our businesses, and they are self-helpers. They want to create their own algorithms, their own digital tools, and they don’t want to wait around for IT. So for IT to stay relevant, it has to find a way to embrace that innovation, and be a catalyst for that innovation.”

So I’ll bring up the concept of “shadow IT” for a second. When I think about that old-school style of IT saying, “No shadow IT on my watch! No business executive is going to go out and buy their own technology and damage my architectural integrity, and introduce security risk and cost challenges into my infrastructure,” I imagine a man alone on the beach with his hand up, and a tsunami is coming over the beach. Well, that CIO can go ahead and put another hand up, but it’s not going to stop the rise of workers who want to be much more powered with the ability to create their own technology solutions. So Rob Lux is the CIO of Freddie Mac, and when he joined Freddie Mac, there were a lot of concerns about end-user computing, that is business leaders who hired their own development shops to create their own applications. Well that’s all well and good until those applications become mission-critical and have performance problems, and then they call IT to say, “Hey,” and the phrase they use is “productionalize,” “Can you productionalize?” And IT would say, “Boy, it would have been nice if you had involved us a little bit earlier.” So rather than clamping down on EUC’s, or End-User Computing, Rob created a development platform to allow end-users to go crazy! Develop your own tools, but do it in a secure environment using these tools. So a real concept here that I want to get across is, it’s one thing to say to IT, “Be the business,” but another thing we’re really saying is, “Let the business be IT.” IT does not own IT innovation, and delivery investment decisions and adoption, or even development! If end-users want to develop, they’re going to develop. Let them do it. So give them the platforms to do that. So that is being a catalyst and staying relevant, rather than saying, “Yeah, I’ve got to wait for IT.” That’s a perfect way for CIOs to become obsolete.

Michael Krigsman: We have about five minutes left. So it seems that the core of what you’re saying is that the successful CIOs are finding ways to engage the users, not put up boundaries, but invite the users in.

Martha Heller: That’s exactly right! So what we’re starting to see, and I’m glad you mentioned we only have five minutes because, you know, I could go on all day long. But, I want to bring up an important concept, and I’m seeing CIOs replace titles in their organizations, of, you know, this is an applications manager. This person has responsibility for all the technologies. And instead, they’re starting to talk about product management. Whether that product is something that will hit the external market, or whether that product is a finance system that’s for internal use only. And so what we’re starting to see on these product teams are cross-functional teams, so marketing, business analysts, business development, IT. You know within IT you’ve got apps and ops and architecture all on these same teams. And in fact Jim Fowler, CIO of GE, calls it a “teams of teams” structure. So when you conceptualize email as a product, or ERP as a product, suddenly you realize, on that product team, you can’t only have people from IT on that team, you need end-user representatives on that team. Product teams blur the boundaries between what is IT, and what belongs to the, quote, “business” that IT serves. So that product management, and one of the chapters in my book is called “Think Product” because as software makes its way into most companies’ products, where does IT development stop, and product development start? That is a blurry line that product leaders and CIOs need to start figuring out, because that is where a lot of innovation can happen.

Michael Krigsman: So we have just two or three minutes left, Martha, and would you summarize the distilled essence of your advice to CIOs. What’s the bottom line here? What’s most important?

Martha Heller: I would say that what’s most important is that 1) CIOs start to conceptualize their role in the organization, and this comes to me by the way from Cole Chapman, the CIO of the Gap; “As an internal professional services firm, that professional services firm provides information security, software development, product development, management consulting, email, data center hosting, vendor management, and once you see yourself as the CEO of a professional services firm, providing all these services out to the business, suddenly those boundaries in organizational design is all going to become clear to you. So that’s one. 2) Let go of control. Not everybody who uses the tools of finance in a company report into the CFO. Not everybody who considers themselves a developer needs to report into IT. Let your people go. Get into the digital mindset where empire-building is out. It’s about collaboration, blurring boundaries, letting go of control. And here’s the critical one: 3) Despite the fact that you run an organization, CIO, that is not your primary role. Your primary role is to use your end-to-end view and all of your analytical tools that demonstrate what is going on in the enterprise and become the critical capabilities champion of your company. Let your executive peers know what your company is good at, where it needs improvement, and that is where they should be spending their precious investment dollars. That’s your job.

Michael Krigsman: Wow, well, Martha Heller has given us a textbook on how to be a CIO. And there it is! You’re holding up the book, Martha’s most recent book, and what an amazing show this has been! You’ve been watching Episode number 198 of CXOTalk, with Martha Heller. And if you’re a CIO, catch the replay. Go back to the CXOTalk site, there will be a transcript up in a few days, and you can read it, and there’s your textbook. Martha, thank you for joining us today!

Martha Heller: It was my pleasure, Michael. Thank you.

Michael Krigsman: And I hope you’ll come back and you’ll do it again another time.

Martha Heller: Are you free tomorrow?

Michael Krigsman: [laughter] Next week would be good! Everybody, thanks so much for watching. Come back next week, we have two shows, they’re both going to be great, I’ll see you soon. Thanks, bye-bye.

Leadership Lessons from a Fighter Pilot

Dani Golan, CEO and Founder, Kaminario
Dani Golan
CEO and Founder
Kaminario
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK
 

As a fighter pilot in the Israeli Air Force, Kaminario CEO, Dani Golan, learned that the right team enables an organization to whatever it wants. Being agile, responding to changes in business and technology, all require leadership and teamwork.

In today dynamic business environment, organizational agility is essential skill for providing continuous value to customers.

Transcript

Michael Krigsman: I’m Michael Krigsman, and we’re talking with Dani Golan, who is the founder and CEO of Kaminario. Dani, how are you?

Dani Golan: Excellent, Michael. It’s great to talk to you.

Michael Krigsman: And, you are talking right now from Israel, and I see that you have a large photo of a plane, and you have models of airplanes behind you on your desk. So, tell us about that. Why do you have these models?

Dani Golan: So, this is part of my background. I used to fly planes, I used to be in the Israeli Air Force for many years, and it is certainly a part of me.

Michael Krigsman: So, being in the air force; being a fighter pilot - how does that inform your leadership style, and from a leadership perspective, what did you learn?

Dani Golan: That is an excellent question, Michael. If you look at what it takes to fly a jet, I would say there are two major elements. The first and most important one is that you will never find a solo plane in the sky. It is always part of a unit. You’re being taught from Day One that it’s all about teamwork. In combat flying, it means life or death; and in business, it means absolutely the right team can perform anything. Business can change, technology can change, but with the right team, you can accomplish anything. That is the biggest lesson I’ve learned, and I try to absolutely gear to this in Kaminario.

The second element is important and relevant to the modern business world. The modern business world is far more dynamic, far more agile than ever before. And, if you look at our business, IT really fought back in adapting to this brave new world. IT is slow to change, expensive, complex; really, the same dynamic nature that you learn in the air force: that you need to adapt very quickly, and which we really bring into every part of Kaminario. It’s how we act. It’s the product that we developed, and the value that we provide to our customers. It’s really our dynamic nature at Kaminario that appeals to the modern business world.

Michael Krigsman: I’m Michael Krigsman, and we’re talking with Dani Golan, who is the founder and CEO of Kaminario. Dani, how are you?

Dani Golan: Excellent, Michael. It’s great to talk to you.

Michael Krigsman: And, you are talking right now from Israel, and I see that you have a large photo of a plane, and you have models of airplanes behind you on your desk. So, tell us about that. Why do you have these models?

Dani Golan: So, this is part of my background. I used to fly planes, I used to be in the Israeli Air Force for many years, and it is certainly a part of me.

Michael Krigsman: So, being in the air force; being a fighter pilot - how does that inform your leadership style, and from a leadership perspective, what did you learn?

Dani Golan: That is an excellent question, Michael. If you look at what it takes to fly a jet, I would say there are two major elements. The first and most important one is that you will never find a solo plane in the sky. It is always part of a unit. You’re being taught from Day One that it’s all about teamwork. In combat flying, it means life or death; and in business, it means absolutely the right team can perform anything. Business can change, technology can change, but with the right team, you can accomplish anything. That is the biggest lesson I’ve learned, and I try to absolutely gear to this in Kaminario.

The second element is important and relevant to the modern business world. The modern business world is far more dynamic, far more agile than ever before. And, if you look at our business, IT really fought back in adapting to this brave new world. IT is slow to change, expensive, complex; really, the same dynamic nature that you learn in the air force: that you need to adapt very quickly, and which we really bring into every part of Kaminario. It’s how we act. It’s the product that we developed, and the value that we provide to our customers. It’s really our dynamic nature at Kaminario that appeals to the modern business world.

Disruption and Resiliency: Lessons from 9/11

Dr. David A. Bray, Visiting Executive In-Residence, Harvard University
Dr. David Bray
Visiting Executive In-Residence
Harvard University
Karen S. Evans, Administrator (former), Office of Electronic Government and Information Technology
Karen S. Evans
National Director
U.S. Cyber Challenge
Tony Summerlin, Senior Strategic Advisor, FCC
Tony Summerlin
Senior Strategic Advisor
Federal Communications Commission
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK

The events of 9/11 changed how we think about leadership, disruption, and the ability of organizations to survive and be resilient in the face of change and even disaster. On the episode, three seasoned leaders from the federal government share their experiences and lessons learned.

Dr. David A. Bray currently serves as the Chief Information Officer (CIO) for the Federal Communications Commission (FCC), an independent agency of the United States (U.S.) government. As CIO, he supports the eight current goals of the FCC in the areas of broadband, competition, the spectrum, the media, public safety and homeland security, as well as efforts to modernize the Commission.

Karen S. Evans is serving as the National Director for the US Cyber Challenge (USCC). The USCC is the nationwide talent search and skills development program focused specifically on the cyber workforce. She is also an independent consultant in the areas of leadership, management and the strategic use of information technology.

Tony Summerlin is the Senior Strategic Advisor at Federal Communications Commission (FCC). He served as the senior advisor to the CIO of the United States Government for 7 years. Tony is three time winner of the Federal 100 Award for significant contributions made by a private sector employee assisting in the achievement of the President’s Management Agenda.

Transcript

Michael Krigsman:

Welcome to Episode 192 of CXOTalk. I’m Michael Krigsman, and CXOTalk brings together the most innovative people in the world who are focused on digital disruption, digital transformation, and the impact of technology on organizations and on society. Today’s show is really a special one. We’re talking about the impact of the events of September 11, 2001 on our notions of disruption, our notions of organizational resiliency and leadership. And, we actually have three guests today. And let’s start off and I’ll ask them to introduce themselves in turn. David Bray is the CIO for the Federal Communications Commission. David, how are you?

David Bray:

I’m great! How are you, Michael?

Michael Krigsman:

I am excellent! So David, tell us what you do.

David Bray:

Sure. So, right now I’m the Senior Executive and Chief Information Officer at the Federal Communications Commission. Fifteen years ago, I had signed up for a little-known program called the Bioterrorism Preparedness Response program at the Centers for Disease Control in Atlanta, Georgia, and was actually supposed to brief the CIA and FBI on September 11, 2001, on what we would do if a bioterrorism event was to happen. So, obviously a lot of memories there. I will be interested in talking about both about what happened and what was supposed to happen after all of that.

Michael Krigsman:

Fantastic! And then, at FCC Headquarters, we have Karen Evans and Tony Summerlin. Tony, please. Welcome to CXOTalk, this is your first time. Give us a brief introduction about yourself.

Tony Summerlin:

I’m Tony Summerlin, I work for Dr. Bray here at the FCC. I’ve been here as long as David has, three years, but I’ve worked in and out of government for 30 years, luckily not all of it, just a small part of it. And, I’m leading the modernization efforts on David’s behalf here at the FCC.

Michael Krigsman:

And Tony, rumor has it that across the government, when people think about IT and the CIO role, that they look to you. That’s the rumor I heard.

Tony Summerlin:

Well Karen can probably say a lot to that, since I supported her in the White House for seven years, but I’m the disposable object that gets moved along to get things done. So I make a lot of contacts, friends, and the other people on a regular basis. (Laughter) When you try to disrupt people, they get very upset, so, I would say it’s probably 50:50 whether someone thinks I’m a positive or not influence, and I like to think I am. But we make a lot of change.

Michael Krigsman:

Well, we’ll definitely talk more about that. And, Karen Evans is the Head of U.S. Cyberchallenge, and really had the first role of U.S. Government CIO, though at that time, it didn’t have the CIO title. So, Karen Evans, welcome! How are you?

Karen Evans:

Oh, I’m great. Thanks for having me back, and I would think based on our title “Disruption and Resiliency”, that that is Tony’s nickname. He is a disruptor and he’s very resilient, so he is the embodiment of what we’re talking about today.

Michael Krigsman:

Alright, so then, let’s begin. Tony, let’s go back to September 11, 2001, and where were you, and what happened and what was the impact on your business and your organization at that time?

Tony Summerlin:

Well, I was actually sitting on a racehorse, exercising a racehorse at the racetrack, and I came back and saw what happened, and rushed back to the office. The world definitely changed. We were in the middle, with Mark Forman, of designing the e-Gov initiatives, which Karen was a huge part of, and trying to change government from the e-Gove perspective, and making government more efficient. And certainly in the face of what happened on 9/11, it added a whole new level of difficulty because people’s focus had changed necessarily away from government and technology, to the security of the American people.

Michael Krigsman:

And

Michael Krigsman:

Welcome to Episode 192 of CXOTalk. I’m Michael Krigsman, and CXOTalk brings together the most innovative people in the world who are focused on digital disruption, digital transformation, and the impact of technology on organizations and on society. Today’s show is really a special one. We’re talking about the impact of the events of September 11, 2001 on our notions of disruption, our notions of organizational resiliency and leadership. And, we actually have three guests today. And let’s start off and I’ll ask them to introduce themselves in turn. David Bray is the CIO for the Federal Communications Commission. David, how are you?

David Bray:

I’m great! How are you, Michael?

Michael Krigsman:

I am excellent! So David, tell us what you do.

David Bray:

Sure. So, right now I’m the Senior Executive and Chief Information Officer at the Federal Communications Commission. Fifteen years ago, I had signed up for a little-known program called the Bioterrorism Preparedness Response program at the Centers for Disease Control in Atlanta, Georgia, and was actually supposed to brief the CIA and FBI on September 11, 2001, on what we would do if a bioterrorism event was to happen. So, obviously a lot of memories there. I will be interested in talking about both about what happened and what was supposed to happen after all of that.

Michael Krigsman:

Fantastic! And then, at FCC Headquarters, we have Karen Evans and Tony Summerlin. Tony, please. Welcome to CXOTalk, this is your first time. Give us a brief introduction about yourself.

Tony Summerlin:

I’m Tony Summerlin, I work for Dr. Bray here at the FCC. I’ve been here as long as David has, three years, but I’ve worked in and out of government for 30 years, luckily not all of it, just a small part of it. And, I’m leading the modernization efforts on David’s behalf here at the FCC.

Michael Krigsman:

And Tony, rumor has it that across the government, when people think about IT and the CIO role, that they look to you. That’s the rumor I heard.

Tony Summerlin:

Well Karen can probably say a lot to that, since I supported her in the White House for seven years, but I’m the disposable object that gets moved along to get things done. So I make a lot of contacts, friends, and the other people on a regular basis. (Laughter) When you try to disrupt people, they get very upset, so, I would say it’s probably 50:50 whether someone thinks I’m a positive or not influence, and I like to think I am. But we make a lot of change.

Michael Krigsman:

Well, we’ll definitely talk more about that. And, Karen Evans is the Head of U.S. Cyberchallenge, and really had the first role of U.S. Government CIO, though at that time, it didn’t have the CIO title. So, Karen Evans, welcome! How are you?

Karen Evans:

Oh, I’m great. Thanks for having me back, and I would think based on our title “Disruption and Resiliency”, that that is Tony’s nickname. He is a disruptor and he’s very resilient, so he is the embodiment of what we’re talking about today.

Michael Krigsman:

Alright, so then, let’s begin. Tony, let’s go back to September 11, 2001, and where were you, and what happened and what was the impact on your business and your organization at that time?

Tony Summerlin:

Well, I was actually sitting on a racehorse, exercising a racehorse at the racetrack, and I came back and saw what happened, and rushed back to the office. The world definitely changed. We were in the middle, with Mark Forman, of designing the e-Gov initiatives, which Karen was a huge part of, and trying to change government from the e-Gove perspective, and making government more efficient. And certainly in the face of what happened on 9/11, it added a whole new level of difficulty because people’s focus had changed necessarily away from government and technology, to the security of the American people.

Michael Krigsman:

And, Karen, where were you and what was your situation at that time?

Karen Evans:

So, on that day specifically, I worked for the Office of Justice programs, which is in the Department of Justice and makes federal grants out to state and local governments. The taskforce that Tony’s talking about, I think it’s really key, especially since we’re talking about disruption and resiliency, because that really is what Mark Forman was attempting to do; to use technology to disrupt the federal government services, and make them more resilient.

But, my particular area in that was working government to government and we had one called Disaster Assistance — disaster benefits. But, it was very focused at that point on physical types of things, like hurricanes, storms. And I remember that working group, and even Tony, and the Office of Management and Budget, giving me a hard time because I had spent two years through the Office of Justice programs talking about terrorism, because we had that big incident in Japan. Remember sarin gas on the subway and stuff like that? So I was very focused on that and we had been training the nation on doing things like threat assessments.

And, when that day happened, I was in Washington DC, at the Office of Justice Programs, and all telecommunications went down within a matter of maybe ten minutes of seeing the actual buildings being attacked on CNN. I remember us all watching it on CNN. And then, rumors started flying about what was happening in Washington DC, and then the third plane then hit the Pentagon. And so, I just remember everyone wanting to run out into the streets, and we were like “No, no, no, no!” because that’s what we were trained on, because that’s what the terrorists would want us to do, is to run out onto the street. And what if this isn’t over and they’d take over the subway.

So, it was really trying to figure out, like, you’re really stressed, but trying to provide services at the same time. So, because we were a rebel component within the Department of Justice, we weren’t configured like everyone else. So, ours was the only working email services, working in the entire department. And so we were actually the ones that had to communicate with everybody else outside of the department to be able to mobilize the things that had to happen between the FBI, the White House, the Office of Victims of Crime. And we actually went in to the mode of implementing our plan, because it was happening live.

But, I will tell you on a side note, we were still getting emails from the taskforce group, like Tony and those guys, and because everything was due in! All this stuff was due in! They were still sending us notes, and I sent notes back. And I remember sending one note back saying, “OK, now it has happened, and I’m redoing the paper because in a matter of hours, you have to provide  a response about what should the White House do as a result of this terrorist attack.”

Tony Summerlin:

That’s right.

Michael Krigsman:

And, David Bray. You are, and I should say Dr. David Bray, you are the CIO of the FCC. And, give us your historical note on what happened: Where were you? What were you doing at 9/11, and then we’ll talk about some of the lessons learned.

David Bray:

Sure. So that specific day, September 11, as mentioned, I was actually supposed to give a presentation at nine o’clock to the CIA and the FBI as to what we would do technology-wise if a bioterrorism event happened. And actually leading up to that, for those who remember, in March 2001, the Agile Manifesto had come out, which was encouraging Agile development versus Waterfall development way back in 2001. And I was an early proponent of that, because we had to get things out as quickly as possible, even before 9/11. And I was told to get back in my box: follow the five-year enterprise plan; follow the five-year enterprise budget strategy. In fact, I was a bit of a heretic, sort of like Karen as she sort said was a rebel; a rebel constituency within the Department of Justice. I don’t know if I was necessarily mainstream CDC in trying to push for Agile development and rapid prototyping.

But, fortunately we did do some rapid prototyping so that when 9/11 happened, we actually did have technology in place that day. Most of the CDC was sent home from work because we didn’t know if the CDC might be a target. But those of us who were still with the bioterrorism program, we loaded computers in the cars, set up an underground bunker, and then got people up in the air to New York and DC to help with the response, in case there were biological consequences that happened with 9/11.

Michael Krigsman:

And so, for all of you what were some of the key lessons that you learned on that day or subsequently thinking about it in terms of the types of disruptions that hit an organization, and how to think about recovery and then in the longer run, think about resilience?

David Bray:

So I’ll toss out the first one, which is a common theme I think you already heard, which is normally it’s the people that are the potential heretics, or the people that aren’t necessarily in the mainstream of the organization that are usually the ones that are actually getting the organization prepared for a bad day, and they’re not appreciated until the bad day happens. That’s definitely the case of both Karen and Tony, as well as myself. And so, one of the things that I try to do going forward is encourage diversity of thoughts, and if everybody’s thinking the same thing, try to find someone who’s not thinking the same thing because that will actually help increase both cognitive diversity of the organization and of the group, but also make sure that we’re prepared, and looking at things from all angles should a bad day happen.

Michael Krigsman:

So Tony, diversity of thought, that seems like a key attribute in the long run of creating resiliency. Cognitive diversity, David just said.

Tony Summerlin:

Oh, there’s no question. I mean, the diversity of thinking and that’s one of the things we learned as Karen pointed out and we learned in a big way, during the e-Gov initiative, if we hadn’t had those 100 people? Karen Evans: 100 people. 100 people narrowing down to 20-40 e-Gov initiatives, and the diversity of thinking was essential in the way we approached things. And, without that, I don’t think we would have gotten very far. I mean, traditional thinking was only going to give you the traditional answer so, I think that was the genius of putting it together in that form.

But the other parts that work really well is all these people existed in government. Nobody flew them in from the left, west coast, or from overseas somewhere. They all exist in government. So, you didn’t need anybody else to come in and tell them what needed to be done. They all knew it, they needed a platform and an audience and a vehicle to get things done, and the group did extraordinary things. There was no question that what was pushed out during that time, considering this was all being done in the face of a new threat that the United States had never known, was extraordinary. And I think that Mark and especially Karen with her seven years of pushing things forward, if you ever look at what was being pushed forward during that timeframe, it was pretty extraordinary in the face of everything that was going on globally.

Michael Krigsman:

Karen, please. Go ahead.

Karen Evans:

Well, I was going to jump in a little bit about the difference of thought and to build off of what Tony said, and a lot of this this, I think, really comes down to the people who have to keep the trains running. Like if you come out of operations, and you only have to fail once somewhere along the line in your career, and you figure out, you go through every scenario that could possibly happen, so that you can then provide the services. And so that might make you a rebel, like David is saying, thinking about “Waterfall isn’t working. Let’s switch to Agile because this is going to happen.” It’s really, very scenario-based, and if you come out of an operations background, you go through every scenario up to the point of “What if the whole world comes to an end, and the government still exists?” And that scenario-type of things that the federal government employees actually work through. And say, OK, what servers do you need to have should this catastrophic event happen? Because it’s always about what we call “coop and cog” in the federal government, you know. It’s the continuity of operations, it’s the continuity of government.

So, what do you have to do to keep operations going, and then what part of government continues to run? And so we were kind of programmed under coop and cog. What happens within an hour, and what has to happen in 30 days in order to keep the country stable.

Michael Krigsman:

David, this notion of “coop and cog” - this type of scenario planning certainly existed before 9/11 and what changed in the aftermath 9/11 as far as this goes?

David Bray:

Sure. I think what happened was a lot of the cases up until 9/11 - if you were thinking outside the box like Karen and Tony, or myself, it was you were kind of pushed to the side. People were thinking about continuity of operations in the face of a Cold War-like threat. They weren’t thinking about what might be on the horizon, what might be new. I think that’s probably true not just of public service but of any government organization, in that they always expect the future to be like the past but slightly different, when in fact all evidence to the contrary is the future is not at all like the past.

So, if you can remember in 2001, we had ten years of the supposed “Peace Dividend” after the fall of the Berlin Wall, and so people were still, pretty much, if they were thinking about continuity of government, continuity of operations, it was probably nuclear, it probably was thinking about something large-scale and nation-state-backed, and not thinking about sort of a lone individual. Of course then after 9/11 came about ten years of focusing very much on terrorism and not thinking about other things that might not be terrorism-related. It might be natural disaster-related, it might be some other form of disruption. And so I think, as a leader you have to be very cautious about making sure your organization doesn’t fall into the trap of thinking the future is going to be like the past, only slightly different. And you need to help them expand their aperture and say, “OK, well this might happen, but what else might happen that we’re not thinking about yet?”

Michael Krigsman:

Tony Summerlin, you are, for the most part, behind the scenes inside the government running IT with David, working for David inside the FCC, while providing other organizations within the government outside the FCC with advice on how to run their IT operations. So, that’s a case for stability, but at the same time, you’re trying to drive change with the Cloud, trying to drive organization change, and so how do you reconcile the demand for stability on the one hand and the need and the desire for disruptive change, on the other hand?

Tony Summerlin:

Well, I don’t actually run anything, I support things, but with great people that run stuff. But what I try to do is move stuff from what I consider jogging or walking to running. So, what we really have to do is pull the rug out from under people, without using too many analogies. People are very comfortable doing what they’re doing. And, in government, just like in most places, you get rewarded for things running the way they’re supposed to run, and you don’t have the time to look at different ways of doing it. So, you have a fall guy that says “We’re going to stop doing it that way, we’re going to do it this way,” and someone has someone to blame it on, that that’s usually me. Then they’ll move along the path because the only loss is not seeing me anymore, which people are pretty happy with at that point, but it has to be, in this case, especially at the FCC, it has to be dollar for dollar. Everything new we did, had to be funded by cutting something else, so it’s a very painful process. But 50% of the people are OK with it and out of that 50%, maybe 25% actually back it. But when things start coming around and they start seeing successes and nobody’s getting shot, it moves pretty well.

But you have to partner with the best of the best, as in software providers and integrators. I mean, there are people that get up every day to do the best job they can. People don’t get up to do nothing. So you get them all on board with a nice path that has a very clear end goal, and you have leadership like Dr. Bray, who clearly sets what the light looks like at the end of the tunnel, and then it’s easier to bring people along. But, nothing is easy, because there is no reward. I mean, the reward for doing a good thing has usually been quashed unfortunately over the years, so it’s no one’s fault. It just has to be done in a way so that someone else can take the heat. And luckily, our chairman, and Dr. Bray, and our managing director are all willing to take the heat and when it works that way from the top, it’s not really as hard as one might think.

Michael Krigsman:

Well of course, there is that old saying that goes, “No good deed shall go unpunished.”

Tony Summerlin:

True!

David Bray:

I just want to say that you’re hitting the nail on the head, Michael, with the fact that if you want to encourage resiliency, you have to encourage a change in the incentives. As Tony was pointing out, there’s really no reward for taking risk in public service and that’s OK. That just means that those of us who do it, want to do it for something other than some tangible reward. We want to do it to actually make some positive difference in the world or the nation.

Karen Evans:

Well, see, then I would argue that is the reward. And so, when you look at public service, and you look at what is the motivator in how to create an environment where disruption is appreciated. Because you’re talking about, like, how do I bring in new technology? How do I integrate new processes? How do I change things? And that reward is in the long-run, and you may not necessarily be rewarded in the short run, but in the long-run, you’re rewarded because I see a lot of the things that I’ve been pushing really hard for that I got my butt handed to me more times than who knows what, but the nation is doing it now. I mean, there’s the embrace of...I can’t go and… I’ll share this one little thing, this is really...This is kind of funny. I think it’s funny, but my husband says I have a techie sense of humor here...

But, my son just graduated with a public policy degree, and they were talking about the implications of different policies coming out of the White House. And, they actually picked up one of these tech policies, which was mine dealing with IPv6, all this other stuff like that, right? And so…Tony Summerlin: That was a three-year project. That was a three-year project! But, the point is that my son was in the class, and the professor was saying a bunch of different things, and so my son put his hand up and said, “No, that’s not the intent of the policy, and here’s how it works and here’s what…” And he went through this whole process about why the White House does what it does to try to stimulate the economy, to have a market response. And then he goes, “Well how do you know?” And he says, “Well, look at the signature on that policy,” and he looked at it and he said, well, “That’s my mom.” So, he came back and he goes, “I can’t believe the way they’re interpreting these things!” That’s the reward. It’s not the instant gratification that we get from public service, it’s about you’re making a difference and it may not come back to you until ten or fifteen years later. Like, where we are today. It’s fifteen years after September 11 and a lot of the things that I fought really hard, and said needed to get in place, are now in place. And so, there are things that the nation will never know, all the struggles that went on to get them in place, but there’s a resiliency now in the infrastructure.

Michael Krigsman:

We have a very interesting question from a regular listener, Arsalan Khan, who’s asking on Twitter. Are there incentives in place to encourage people in the government to think differently?

David Bray:

So, I would say, sort of what both Karen and Tony were saying, which is 1) the long-term impact — that you do get to see things 10-15 years later that you worked on and then pushed through to get done; 2) it is a responsibility of any good leader to actually try and push things forward. So, I think both what Karen tried to do in her role as federal CIO, my role as FCC CIO, is make sure at least for those people on your team, you are rewarding them even if the larger ecosystem hasn’t taken that on. I do think it’s a larger conversation which is, if public service was designed to be risk averse, partly because the Founders didn’t want it to change overnight, are there parts of it where we need to give more license to taking risk and experimenting.

But it’s partly, I mean, I would say another reward of working in public service is working with people like Tony and Karen. I mean, Tony is one of those wonderful individuals that people don’t normally think of when they think of public service: that he races horses; he races cars; he runs races himself in marathons; he’s fiercely loyal. And, you talked about the balance between stability and disruption. Tony would never take on a stability project, he’d get bored. But, he’s all about disruption. And I think that is one of the sort of untold stories about people who work behind a curtain in public service. You never hear about the people you get to work with, and that I’d say is a great reward itself.

Michael Krigsman:

And we have another question from Twitter. I always like to take the questions from the audience because that is most pressing on their mind. And Chris Petersen is asking, is there a difference between change agents and pushback from political appointees, versus government careerists, versus before and after an election? Anybody want to take that one?

Karen Evans:

So, let me take that one, okay? Because having done them on both sides, being a career person for 25 years and being a political person before I left, and David’s still a career person, I think I should answer that question!

Michael Krigsman:

So, go for it!

Tony Summerlin:

And qualified.

Karen Evans:

And qualified! Yeah. So, there are different ways to lead. And the way to think about this is political leadership has short tenure. And career leadership, if you thought about this as a project or program, they’re working on a program on political leasdership with short milestones along the way, and career leadership is in it for the long-haul, right? So they’re going to the same outcome but one is focused on continuing on regardless of who’s at the top. Now, are there different rewards for what happens in between these guys? In how to do change agents and what are the change agents? I would say it all depends again on communication and leadership. And so there’s a lot of communication, and depending on the leadership style of the political individuals that come in, and the tone set by the President at the top, that drives a lot of things down through political leadership.

But there is this level of career, I call them the “we be’s”, and they are categorized as “We be here when you be gone.” And everybody gets it when you say “the we be’s”. And so, that layer has to really be penetrated, and you have to really, really strive to show them why you want to get to that outcome. And if they buy in, then they are the strongest change agents that you can forever have in a program.

Tony Summerlin:

And these are courageous people and they all exist. And that’s why I love working for people in government. They’re all there. I mean, all you have to do is present the opportunity, and the “we be’s”, I took Mark Forman to meet the CIO when he first came in, and the CIO told him, “Yeah, I think it’s all very interesting, but I can’t do any of it, and I’ll be gone and you’ll still be here so have a nice day.” So, those people exist, but I don’t think it’s the propensity to behave that way, but you have people like Karen and you ‘d have folks from industry come in and tell her “You’ll never get a job for the rest of your life!” Because of the way that she talked to them and the rules that were in. And she was like, “I don’t really care.” And so, it depends on the goal of that individual, whether political or career. If the goal is to go into private industry and be loved. And there are some people like David Whittaker, for example, who was a tremendous careerist who was fantastic in the private sector.

And so, people can stick to their gumption and their notions and do the right thing and get great jobs leaving government. So it’s a tenuous line though. I mean, I’ve watched Karen get her butt kicked a bunch of times by government…

Karen Evans:

And industry! Both!

Michael Krigsman:

Well we have another, and this is very interesting; and by the way I want to mention that there are thousands of people watching us and I want to thank every single person who is watching right now. We are talking about lessons in organizational resiliency learned after the events of 9/11. And we’re speaking with David Bray, who is the Chief Information Officer of the Federal Communications Commission, and Tony Summerlin who is the special adviser at the FCC, and Karen Evans, who runs the U.S. Cyber Challenge and really had the role of the first United States CIO. So we have another question from Arsalan Khan, who asks, is it possible to enlist government contractors to help with the change process? How would you harness the govenrment contractors to help with this? I hear laughter…

Everyone:

[Laughter]

Tony Summerlin:

Well, I am a strong believer in harnessing, and we never would have achieved what we were lucky enough to achieve at the FCC without harnessing, that’s a really good word. I mean, I believe in partnering to a very, like, blood brothers extent with our integrators and vendors. And IBM, well, we partnered with the company to move all of our data centers to West Virginia and do everything necessary in the next six months. If you didn’t have a blood relationship, that couldn’t happen. So, the only warning I give to people when they come into the FCC to sell us something or give us something, is we’re really serious. And I learned a lot of this from Karen when she was in the White House and it’s like, “You really want to do that? This is what you have to do to invest to work with us.” And every company. We have nine SaaS products and every single one of those companies are deeply embedded with us. And if we can’t pick up the phone and talk to the top people in the company, and they respond to us, then we just don’t do business with them. It’s not only possible, but it has to happen and Avi Bender is leading an effort now over at Commerce. Karen Evans: Right. That’s a JV effort with industry and I think that has to happen. And I don’t really see that much resistance from industry if you go to the right people.

Karen Evans:

Well, and the other part of this, when you’re looking the portfolio overall. When I was managing the portfolio, it was 71 billion dollars. Seventy one billion dollars. Now it’s at 85 billion dollars. So, when you are talking about what your requirements are, I mean, we’re a good portion of the market. So, you just have to really be clear. I think Dr. Bray is really very clear about what his expectations, what his vision is, what he wants to achieve for the FCC. And when you do that, contractors will respond because they want to be part of success. No one wants to be part of a failure, but I think that you have to be clear about what that outcome is, and you have to share the success with them. And they can’t walk away from you when you’re failing. And that happens a lot. Federal contractors will throw the government agency under the bus, and that’s not right either. And so, you really have to have that shared partnership going for them. And I think David, if you talked a little bit about that clear vision you have, then industry wants to partner with you.

David Bray:

I agree one hundred percent. That’s why I’d use the word, Michael, I’d use the word “public service” because that is first and foremost the public and public-private partnerships, and then government professionals. I think the U.S. is great when we actually have our industry in alignment with what is being done in local communities, and what's in alignment with what's being done in the public sector. And I think sometimes, we end up with industry going in a different direction than what I mean by the public sector and in a different direction than local communities, and that’s where it takes leadership to really bring them all together with a clear vision. And that’s what I think we brought to the FCC and is the secret to our success, aside from having Tony on the inside of the Holy Hand Grenade organization.

[Laughter]

Michael Krigsman:

Let’s shift gears slightly and, Tony, I know that you have been very involved in the effort at the FCC, and I’m sure in the federal government more broadly, to move to the Cloud. So, tell us your views of the Cloud, and what is the relation between Cloud and resiliency, and any other perspectives you have on the Cloud.

Tony Summerlin:

The first thing that started this was data center consolidation, which Karen wrote up before the end of the last administration. And unfortunately we have a branch of government that’s supposed to facilitate contracting and so-forth to help that happen and they haven’t helped very much, which is unfortunate. But to skip over and go to Cloud now is a real possibility. So we had to move two of our data centers out of the FCC, necessarily, because number one, I can’t understand why anybody in the world would want a data center in downtown DC in the nuclear zone, and the expense associated with it. But because of accounting rules and so forth in government that I won’t go into, you can’t actually quantify what it costs. So, if you ask somebody what it costs to have your data center on K Street, they say it doesn’t cost anything, it’s included. So, those things need to be put aside.

But if you’re not going to move the data center or consolidate data centers, then at least take a look at the applications you have and if they can be modified so they can be in a Cloud environment, then they should be there. Why? Because ultimate resiliency lies in the Cloud. People say, "Well, I don’t know that the Cloud is safe.” These people are businesses. They stay in business by staying operational. If there’s anyone that’s going to keep a data center running, it’s someone that has a Cloud. So, I think the entire argument about cybersecurity and resiliency is ludicrous. Comparing a data center to a true Cloud environment (another form of data center, but a true Cloud environment), where you’re slicing and dicing applications and you’re slicing and dicing space and storage, is so much more resilient than anything any agency could afford, even DoD. People cannot afford it. As David has pointed out many times, cybersecurity is the ultimate reason. We can’t afford as a small place; the commission can’t buy all the tools necessary to be cybersecure. But cloud infrastructures provide a level of security that otherwise is unavailable. And people provide pipes to the cloud that are absolutely secure. So, I think the argument about whether or not to go to Cloud is silly. Buying applications that are born and bred in the Cloud that are just SaaS applications is the way to go. And if you’re building platforms, you have Azure softlayer, AWS, you have platforms that are Cloud-based to build them on. And you have ultimate resiliency in those environments with access from anywhere. So, it supports working from home; it supports BYOB; it supports any functions you want not to be at the office in Downtown DC or somewhere else.

Karen Evans:

So, I want to bring it back to 9/11 and then fast-forward to Cloud. So, when 9/11 and all of this stuff happened, there was one news service that stayed up through the whole thing, which was CNN. So, we wanted to find out who was actually hosting and provisioning CNN. And it turned out it was Marc Andreessen. Marc Andreessen’s new company. And he always wanted to talk to me.

So, he wanted me to buy provision services. So, if you think about this, this was fifteen years ago, so we’re running a data center. So what we said to him was...So he was actually thinking about Cloud before Cloud was called Cloud, so think about that in 2001. Well the other part of that was, we said, “You know what we’re really interested in? What software were you using to provision as fast as you were provisioning, given how you had to scale up and surge in order not to go down. Would you sell that to us?” So they started thinking about it, repackaged it, and that’s Opsware, that he ended up spinning off, selling out. But he was working on Cloud, so now come fast forward to Cloud.

So Tony’s talking about apps and other stuff. People are looking at it because of the argument. Tony Summerlin: The enablers. The enablers...I’m at the point where you don’t even need a data center anymore. We should even be talking about data center consolidation, it should be data center closure. So if you look at this administration's policy, it actually talks about data center consolidation and closure now. Because, for resiliency and disruption, you want to go. So retooling applications... and now you talk about government contractors and industry responding? There’s technology out there right now that knows that all the organizations, which are prohibiting going to the Cloud as app re-enigineering. So they’re actually coming up with technology so you don’t have to re-engineer your app, you can take advantage of the Cloud, and they’re going to be right in the middle. And to me, I think we’re going to bypass this whole argument about the apps and cybersecurity, and we’re going to buy this one little object-like connector. There’s technology in there and industry is responding to that. And it’s going to be both in private industry as well as public sector. And that’s this disruption that’s going to happen in maybe I’d say in may be 12 months to 18 months. You’re going to see that type of technology come out that’s going to allow us to just fully make use of Cloud.

Michael Krigsman:

So yesterday, on the Oracle earnings call, Larry Ellison made the comment that on-premise is here...The comment he made was “Coexistence will be in place for the next ten years,” between on-premise and the Cloud.

Tony Summerlin:

Yeah.

Karen Evans:

Possibly.

David Bray:

On-premise should be dying, it should be a slow, ideally faster death than some people are predicting, because I think if you’re on-premise, you can’t be fast. I mean, one of the biggest advantages that we got moving to the Cloud at FCC was, if you’d asked us to send a new application in the past, it would have taken six-seven months to do the procurement and get a working prototype. Now, with Software as a Service, we can get a new application prototype working in less than 48 hours. And so, that’s the biggest advantage. So, any organization that tries to do things on-premise, you need to be okay with not being very fast. And as Karen and TOny mentioned, is you do have to have the resiliency. What do you do when there’s a surge? Both a surge because more people want to view things or just because there’s more traffic? Or a surge because there’s a distributed denial of service attack. And so, again I don’t see the value of on-premise. Finally, just the effectiveness, that really get more money focused on development vs. trying to maintain systems, here at the FCC, we were spending 85% of our budget and growing just to maintain our systems. Now it’s less than 50%. So, I would actually say, and it’s not just true for public service, any company looking at how they want to exist in the next year or two, you should be 100% public cloud. I don’t know why you would do anything on premise. Maybe the only thing right now that’s holding you back is you can’t move your existing assets in legacy applications. But that’s when you get to Karen’s point, which is that there are companies that are coming along and will allow you to jump much faster to get off those legacy applications to the Cloud.

Tony Summerlin:

You know, we’re working at the FCC with companies that are willing to take our kit out the building, move it to their Cloud environment, and start translating the app, and all as part of a service. So, it moves away, but the whole roadmap is based on the fact that they’re going to be rewritng and moving the apps. The whole problem with old legacy systems in the Cloud, evne if you do the translations necessary, is that costs are extraordinary. Yet when Tony Scott gave a speech and someone challenged him on the cost differences, it’s not about cost, it’s about agility and resiliency. You’ll never get them in your data center.

Michael Krigsman:

Ok. So, we have just a couple of minutes left. And, this has been a very interesting discussion of the Cloud. But, why don’t we, in our last few minutes, just go around the virtual room, as it were, and each of your final, parting thoughts on retaining resiliency and the role of leadership in that. So David, shal we start with you?

David Bray:

Sure. So one thing I want to say real quick on the Cloud conversation. I would love to see a virtual conversation between Marc Benioff of Salesforce and Larry Ellison. That would be a fun Cloud vs. on-premises discussion that I would love to pay money to see. Because I think that they definitely have strong views.

On closing thoughts, the one closing thought I would leave is it takes leadership that will help create incentives for your team to act differently, to lead differently, to think differently, and to encourage risk takers to look outside the box and say, "Well, every day right now looks like we’re being okay, and what are we thinking about in the future that may be a disruption like a 9/11-like event, or maybe just a disruption because the marketplace might change, or a customer base might change." We might have a disruption of that sort, and that’s where you want to have people thinking differently. Specifically for public service, I think we really need to have a strong conversation that brings together Congress, that brings the executive branch, and the public sector, that brings together industry, the private sector, and communities. Because right now, there are things such as encryption debates such as debates about bio and things like that, where we’re really going in different directions. But I think at the end of the day, we all want to see the same thing, which is a safe, secure, free, and private well-being of the United States and this world. So can we have a conversation about how we can continue to be resilient, in an era in which technology is moving forward exponentially.

Michael Krigsman:

Fantastic. Karen Evans, your final thoughts quickly on resiliency and leadership.

Karen Evans:

I think if you want to have true resiliency, it requires leadership, and the adoption of disruptive technology and innovation. Because everything David’s talked about in the innovation of thinking, needs leadership to allow it to be embraced in the organization.

Michael Krigsman:

Ok. Tony Summerlin, you get the last word.

Tony Summerlin:

Our chairman is a courageous guy, when we moved our data center and because we went offline, they tried to attack him on the Hill and he said “I absolutely refuse to apologize. It was what had to be done and it’s the right thing to do.” There are pain points. There are pain points, but it has to happen and unplugging people is always unpleasant, but there are plenty of technologists out there to help, and I think there are plenty of people in government and elsewhere that have their heart and soul to make  a change. You know, the incentive should be the outcome. I don’t think these pay things or anything like that will help, and I think the what government has to do in particular, is not provide disincentives. And, other than that, just letting people move forward with their thinking. I’m a consultant. Most places I go people already know what they need, they just need somebody to tell it.

Michael Krigsman:

Ok. So giving people the freedom to solve the problems in the right way. So, you’re a positive person, a very positive person aren’t you? You’re an optimist.

Tony Summerlin:

Me? I am! I wake up every day totally paranoid but very optimistic.

David Bray:

He’s a disruptive optimist.

Michael Krigsman:

I like that. A disruptive optimist. And, on that note, it is time to end this very interesting conversation, and it just flew by, and I’d like to thank the thousands of people who watched this show today, and special thanks to our guests. You have been watching Episode 192 of CXOTalk, and today we have been speaking to David Bray, who is the Chief Information Officer of the Federal Communications Commission, Tony Summerlin who is special adviser at the FCC, and Karen Evans, who is the leader of the U.S. Cyber Challenge and who was, in fact, the first person in the CIO role for the United States federal government, ever. What an awesome show. And I also really want to thank Livestream, because the Livestream folks really provide our video infrastructure and they just help make CXOTalk possible. So thank you to Livestream and thank you to everybody, and we’ll see you next time.