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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.

IT Innovation for Competitive Advantage

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.

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Chief Digital Officer: Lessons from a Former CIO

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, Chief Information Officer, Federal Communications Commission
Dr. David Bray
CIO
Federal Communications Commission
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”. 

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AI: Legal, Ethical, and Policy Challenges

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.

Building the Business Case for Data

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.

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Digital Transformation and the CIO

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.

Leadership Lessons from a Fighter Pilot

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, Chief Information Officer, Federal Communications Commission
Dr. David Bray
CIO
Federal Communications Commission
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.

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Disruption and Resiliency: Lessons from 9/11

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.

Don't Let Silos Destroy the Customer Experience

Jamie Hunt, VP, Global Advisory Services, Avanade
Jamie Hunt
Vice President, Global Advisory Services
Avanade

Every company has silos. They separate people from each other and from information — and generally speaking, the bigger the company, the bigger the silos. They can exist along regional, country, business unit, product team or other lines.

Silos can even influence your digital operations. Many brands have separate teams for physical and online stores who rarely collaborate, and may even compete with each other. Or sub-brands and business units may try to optimize their experience instead of collaborating to create a unified user experience when the user journey could (and should) cross multiple business units or brands.

Silos Create Opportunity for Competition

Consider the example of a cosmetics company with disparate product lines that spanned the age when their customers first started wearing makeup to the time when they looked at ways to prevent the signs of aging. Instead of building a lifelong journey across all of their brands, each brand hoarded its customers. The company had several user databases, but they could not get senior executive-level support for a strategy that leveraged the data and insights from across the company. Instead, each brand, region, and country had its own strategy. Competition between them was — and still is — fierce, which creates great opportunities for their competitors.

Another client faced a similar issue. The silos in their company were preventing a great customer experience. They had a vision of leveraging reusable content, components and templates to improve user experiences while increasing the value of their investment and engaged us to help them achieve this vision.

They wanted to start with the Sitecore platform, but had a few problems. One division we worked with had eight business units (BUs). Funds to build out the Sitecore experience were allocated per BU, not at the division level.

Despite having one platform and implementation partner, business units still had no incentive to collaborate. Each BU was used to creating experiences autonomously and didn’t want to be slowed down by collaboration with other BUs. This resulted in the first couple of teams duplicating each other’s effort on the platform rather than building upon each other’s experience. This also created a disjointed customer experience with missed opportunities to cross-sell and upsell.

Once we helped the client understand the problem, we worked with their senior executives to help them modify their governance model. Together we developed a digital and platform strategy, set up a governance model for direction and collaboration across the BUs, and helped them get the most from their Sitecore investment. With that in place, they gave each BU a smaller budget to run campaigns — supporting their unique offerings — and started budgeting at the division level for strategy, platform build and overall user experience.

Rules of Thumb for Destroying Silos

1. Know the difference between strategy and tactics

Strategy is the art of the general and the diplomat. It lets one country defeat another on the world stage. It requires distance, restraint and the ability to see the big picture.

Tactics are the art of the soldier on the ground — how we win this fight, right here, right now. People tend to focus on tactics because tactics are clearly tied to the situation at hand, but this is where silos are born.

2. Demolish silos from the top down instead of from the bottom up

A major key to demolishing silos is working with people who are senior enough to understand strategy, who see beyond tactics, and who can sponsor strategic initiatives. People without these attributes may be able to help execute, but only once the strategy is in place.

3. Follow the user journey

Users don't care about your org chart, so don't have your site reflect it. Instead, focus on their journey. It will always tell you the best ways to connect data, experiences and all of the back-end stuff. You can’t destroy silos and create a great user experience unless you understand how to connect everything to the user journey and how technology can support it.

4. There are no right or wrong answers about sharing information ... if people actually share it

Technological tools are a vital part of the equation. But if people don't use them, then they're part of the problem, not part of the solution. Again, focus on understanding the user journey and this problem will practically solve itself.

Demolishing silos is simple in theory. But like all simple things, it can be very hard to do in practice. Silos rarely help anyone. Smart managers get rid of them by looking at governance from a strategic — not tactical — point of view.

AvanadeThank you to Avanade for presenting this episode.

This originally appeared on CMS Wire

What Formula One Racing Can Teach Business Leaders

Jeff Gilchrist, Corporate Vice President and General Manager, Avanade
Jeff Gilchrist
Corporate Vice President and General Manager
Avanade, Canada

The sports industry is doing an incredible job leveraging technology’s ongoing developments to raise the bar for athletes and the specialists that contribute to their achievements. The biggest investments are in enhancements to training and performance, and, consequently, what it means to remain competitive is constantly evolving.

This is clear when you take a closer look at Formula One racing. At the Canadian Grand Prix in Montreal this summer, Williams Martini Racing had an abundance of vital racing data at its fingertips, and Avanade helped the team maximize it by making actionable information accessible trackside in real time.

There is a universal sense of urgency in the workplace to make data-driven decisions. Advantageous information needs to be gathered, channelled and analyzed quickly and effectively. While companies do not move at the speed of a Formula One car, this change is happening at a relatively thrilling pace. As we all race to the finish line, we would be wise to remember the following:

Information is only as useful as its application

Every time a Formula One car laps around the race track, it produces nine megabytes of data. The bottom plate of the race car alone has 1,000 pressure points that are being carefully monitored, and that data is growing exponentially. While Williams Martini Racing is lucky to have access to an abundance of information, it is only valuable if used to boost productivity, develop key insights or increase market share.

In order to take full advantage of the statistics generated during a race – including sensor data, weather information and GPS telemetry data – Williams Martini Racing needed a tool that would allow it to make better choices trackside and to inform long-term decisions. To tap into these insights, Avanade created a tire optimization application.

Companies today should take note. Though every business should be mining for real-time information, how many are actually leveraging it to make themselves more nimble? The combination of speed, quality, precision, and real-time analytics has to convert to insights and rapid decisions and actions.

Admittedly, this is new territory for many, and while it has an exciting amount of potential, there’s still room for improvement. One way to stay on course is to have a clear data application strategy in place before you hit the gas. Keep your end goal in sight and, when faced with unforeseen obstacles, you’ll have the information you need to course-correct quickly and strategically.

Collaboration is compulsory

A windfall of information requires the right teams to help manage it effectively. Formula One rules limit the number of personnel a race team can have trackside. To overcome this, the Williams Martini Racing team working on-site is backed up by a team stationed at its headquarters in Oxfordshire, England. This team works with it during the race to further interpret the real-time data obtained so the team can make the necessary strategic decisions to maximize the position of the driver.

At the same time, Williams Martini Racing relies on outside resources and partners, like Avanade to augment its IT team and to achieve a competitive advantage. Not only do partners bring a fresh perspective and keep the wheel of innovation running, they bring outside capabilities that help inform aggressive technology and business strategies that ultimately help you rise above the competition.

This collaboration of information would be impossible without the input of many, but most companies are still learning how to do this well. Familiarize yourself with the resources available and ensure you’re tapping into each as needed.

When you think you’ve practised enough, practise again

It takes approximately 2.5 seconds for the racing team to change a driver’s tires. This is not an accident. The reason this group is able to complete this task so efficiently is because it runs this drill until it gets it right. When it fails, it deconstructs the performance and apply what it learns to future drills. Furthermore, it practises equipment failures, such that the team can anticipate what it will do when something goes unexpectedly wrong. When it gets it right, it keeps practising.

The real-time nature of what Williams Martini Racing does is public, both in its successes and failures, so choosing the right people for the team is imperative to drive the business forward. It is not just about technical skills, it is about the choosing the right people who can cope with extreme demands and make immediate decisions. It is the expectation of innovation that drives every team member.

By the time race day arrives, the team has the exercise down to a science. Each person has a specific role to play and their excellence helps the other pieces fall into place. Once the car hits the track, the data analytics team springs into action and the cycle of success continues.

Ultimately, the team that trains together and works together, wins together. Taking full advantage of every resource available, including internal specialists and external partners, will only amplify your capabilities. Once all hands are on deck and the information at your disposal is applied strategically, your company will reach new heights.

Jeff Gilchrist is corporate vice-president and general manager of Avanade, Canada

AvanadeThank you to Avanade for presenting this episode.

This originally appeared on The Globe and Mail

Women and Tech: The CIO Connection

Andi Karaboutis, EVP Technology & Business Solutions, Biogen
Andi Karaboutis
EVP, Technology & Business Solutions
Biogen
Kim Stevenson, CIO, Intel
Kim Stevenson
COO, Client and IoT Business Systems
Intel
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK

A recent article in USA Today describes a study from Accenture, predicting the number of women in technology may drop to 22 percent by the year 2025. On this episode, we explore the role of women in tech with two senior leaders, who are both former CIOs and industry pioneers.

Kim Stevenson is corporate vice president of Intel Corporation and chief operating officer for the Client and Internet of Things Businesses and Systems Architecture (CISA) Group. Stevenson is responsible for CISA’s operational excellence, strategic planning process and related cross-company coordination. She also serves on Intel’s management committee. Stevenson served as Intel’s chief information officer (CIO) from 2012 until August 2016.

Andi Karaboutis is Executive Vice President Technology & Business Solutions at Biogen, Cambridge, MA. Accountable for technologies that provide insights for drug discovery and patient benefit. A former VP & Global CIO, and Technology leader with an extensive business background in high tech (Dell), and supply chain and lean manufacturing (General Motors & Ford). She has been at the forefront of IT/business integration over the past 20 years by leading the consolidation and alignment of manufacturing and IT processes and strategies to create a superior customer experience.

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Women and Tech: The CIO Connection

Michael Krigsman: Welcome to Episode 199 of CXOTalk. I’m Michael Krigsman, and I’m an industry analyst and the host of CXOTalk. The purpose of CXOTalk is to bring the most innovative, visionary leaders for in-depth meaningful conversations. These are people that are shaping our world, and on Episode 199 today, I am speaking with two truly amazing women who fit into all of those categories, and we’re going to talk about technology, we’ll talk about the world of the CIO, and what’s coming down the line. And in no particular order, Adriana Karaboutis, who is guest number one. Hi Andi, how are you?

Andi Karaboutis: Hi I’m well, Michael, how are you?

Michael Krigsman: I’m great! Please, briefly introduce yourself.

Andi Karaboutis: Certainly. So, I am Andi Karaboutis, Executive Vice President for Technology, Business Solutions, and Corporate Affairs at Biogen, here in Cambridge Massachusetts. Biogen is a leading and one of the oldest biotechnology companies around, and we specialize in therapeutics for neurodegenerative diseases, multiple sclerosis, hemophilia, spinal muscular atrophy, and we’ve got a great foray into alzheimer's and some great products in our pipeline.

Michael Krigsman: Fantastic! And we’ll dive into your role and what you do in just a minute. And guest #2 is Kim Stevenson from Intel. And Kim, welcome again. You and Andi have both been guests at CXOTalk in the past. Again, welcome!

Kim Stevenson: Thanks, Michael. So as Michael said I’m Kim Stevenson and I am COO for Intel’s Client, Internet of Things, and Systems Architecture Group. That is a mouthful, of course we’ve made an acronym. And, I took this job about two months ago, I keep saying last month, but it’s the end of October. I don’t think I need to explain too much about what Intel does, but we’ve got a lot of new forays outside of our core business in exciting areas with artificial intelligence, Internet of Things, drones, and all of the 5G expiration and activities going that will enable services to run at that layer. So, it’s good. It’s exciting.

Michael Krigsman: So, let’s begin with… You’re both former CIOs, and maybe a good place to start is can you share with us how you move from the CIO to the business roles that you’re now in?

Kim Stevenson: Yeah, I think I would start with, Michael, once a CIO, always a CIO. So, maybe not “former”! [laughter] So, it’s interesting to me that, as I move into the COO role, how much of the knowledge that you gain through IT… because as an IT organization, you’re horizontal in the company, so you see how every process in the company executes. And with that execution you gain deep insight into the business processes and the things that you have opportunity to drive greater improvement. So, this is a new role in Intel, and frankly, I was instrumental in crafting it, because what we did was we outlined the major strategic challenges going forward for the next five years or so, and how did we want to attack them; and then through that, came the need for this particular leadership role. And, I think everybody in IT understands that if you’re trying to drive any form of transformation across the company, the IT knowledge, the business process knowledge, just marrying the two together to drive the right outcome is key.

Andi Karaboutis: Yeah I would...so Michael, I would agree exactly with what Kim says, is that the CIO role sort of evolved, and you’re working across the enterprise. The recognition that it goes beyond just digitizing processes and capabilities for the company is kind of what happened to me as well, and we started, when I joined Biogen two years ago, they had developed a vision for… they wanted core capabilities, which is the traditional IT, we also wanted digital data sciences and business solutions which is part of the title, that would help us actually foray and help disrupt the life sciences and healthcare industry, because there’s such an opportunity for patients, payers, and providers to come together for the greater good of patients. And so, the role evolved into something that was beyond the CIO. I have the whole IT organization reporting in to me. I have digital and data sciences, and obviously corporate affairs, which is a little bit separate. It has communications, patient advocacy, etc. as a part of it. But the recognition when Biogen approached when I was the CIO of Dell, was that we want to do something more, and be something more and be in this space than was traditionally IT. I think you’re seeing that evolution everywhere. So I think Kim and I will both take a bit of credit of growing beyond the role, because I think we both worked very hard, if I could say that; we go back a ways. But I think it’s also the industry has evolved, and enabled this. In recognition that technology is ubiquitous, a lot of the disruptive technology that Kim just referenced is opening doors. And I truly believe all companies, to a greater or lesser extent, are digital and technology companies now.

Kim Stevenson: And Michael, it might be worth noting that both Andi and I serve on corporate boards to publicly held companies. And what you see in the management ranks, in terms of the importance of technology, is the core strategic element that technology brings to the execution of the business plan, is also a board-level discussion. So, you see that happening across industries also.

Andi Karaboutis: Yeah, that’s a great point.

Michael Krigsman: One of the things that I’m really wondering about is how did you make that transition from being a CIO to being clearly a business person serving on the boards? And it’s funny that as I say this, the Kim Stevenson of my conscience is saying, “Well all that IT is just another business function, that they’re not separate,” as Kim has said in the past. But, how did you, and how can a CIO make that leap, which for many CIOs is a tough one?

Andi Karaboutis: So, I think what’s important, we’ve always talked about “seat at the table” and “earning seat at the table” and things like that, I mean, for many years. And “seat at the table” is really code for understanding the business, the objectives, the mission, the enablers, etc., and how do you apply technology to enable that, or even to modify it and streamline and make it even more impactful. So that continues to be the case. You do have to be an ardent business person. You also need to understand, strongly, the financials of the company and financials in general, and understand how public companies work, if you’re on the board of a public company or part of one, and also nonprofits if you’re there as well. The bottom line is, you know, while we have a mission at Biogen, which is: care deeply, change lives, provide therapeutics, we have stakeholders. And those stakeholders include our shareholders, our employees, you know, our patients, our providers, payers, etc., and being part that ecosystem, means you have to be part of that ecosystem, and really understand and embrace it. And when technology is as important as it is, having all of that and pulling that together is mandatory, and that’s what the ardent businessperson needs to be with what I call a technology backbone.

Kim Stevenson: Yeah, and Michael, I would say, if people think of it like a leap, then you probably won’t make it across the chasm. Through your years of IT, what you’re doing is you’re building a track record of understanding the business, [and] delivering business value projects. And you move from a service provider ─ someone who executes the projects and programs that a division or a line of business executive might ask you to do, to someone who’s sitting there collaborating with the business that helps them to really think more broadly about how they could execute, what’s possible with technology, in terms of are they trying to grab share, create new products, whatever the business outcome might be. [And then eventually become], someone who actually sits at the table as a decision maker and what’s the right strategic move, what’s right right next move; not what’s the next technology move, but what’s the right next move for the company. So, it’s your career experience that builds up, that gives you that track record, so then when you step into the next role, it’s logical. It feels normal. It feels like the next extension just as if you moved from an applications development leader to, you know, a functional leader over multiple functions in IT. That seems natural after you’ve done those things. So I think it is more about this career-building and track record of experience that allows others to see the potential that you could bring in a different capacity.

Michael Krigsman: So, Andi Karaboutis, Kim  was just saying that, essentially, before making that leap, or that leap, in a sense, is a recognition of what you’ve been doing all already, but Andi, doesn’t it also require the right type of environment inside the organization or more broadly, to accept a CIO making that leap, no matter how good he or she might be?

Andi Karaboutis: Absolutely. So, and some companies come to it by what comes first. A CIO that shows that it’s more than just digitizing processes. You can do more. How can you contribute to the top line and bottom line of, you know, a company’s balance sheet objectives, and so on and so forth. But, sometimes a company comes to it by seeing the disruption that’s out there and what’s happening, [and] goes and looks for, which was the case in my case, looks for a CIO that’s shown sort of progressive improvements, and really taking a company along. So there’s a chicken and an egg, and I think it’s a bit of both. You have to have a company that’s mature, that recognizes just what technology can do, and you know, you have to have candidates that are ready, willing, and able, and can do it. I feel very lucky, to be honest with you, because I crossed three industries. So I did twenty years in the auto industry, I spent four and a half wonderful years at Dell, it’s a fantastic company, and I’m now at Biogen and again, another fantastic company. But the common thread that’s followed me is making sure that I’m at least as current and on my game as possible on technology, as I’ve absolutely had to take on the challenge of learning those very different businesses so I could succeed. And you know, even though Kim, for example, is in the same company, she’s traversed organizations similarly, and I think you can agree with me, or I hope you will, anyway.

Kim Stevenson: Yeah, so I completely agree that… I always say that business leaders that grow up on the business side really are never going to speak the language of technology. Maybe they understand how they use technology, they understand what can be done, but may not understand how you make that come to life. And technology people know how to make things come to life, like deliver the solutions that create that value. And we have to learn how to speak the language of business, how to prioritize the business outcome over the specific technology choice, or selection, or implementation date ─ whatever those, you know, boundary conditions that we put on ourselves. And because we learn both and we understand the business outcome that we’re trying to drive, it actually puts an IT leader…when you compare a business leader. Now, you’re trying to make a decision: What’s the next person that I’m going to put into this role that’s going to drive the company to the next level? Am I going to put someone that understands one dimension? Or am I going to put someone that understands both dimensions? And that’s why I think we’re so fortunate as IT leaders now in this, sort of, next era of where technology’s going to take companies, because we had to learn the business language to be able to effectively execute our IT mission. Business leaders have never had to do that until now, and that is a challenge to many of them. And it refers, Michael, to the resistance factors that you find in companies about the risk associated with adopting new technology.

Michael Krigsman: And we have a question from Arsalan Khan, on Twitter, who asks: You’re saying that the tech folks need to understand business, but Kim, hearkening to what you were just talking about, what about the need for business folks to have a better understanding of technology?

Andi Karaboutis: So, I’ll jump in on that one. It’s the technologists… One of the key roles of the technology person’s job is to help them understand; to help them understand the art of the possible with new and emerging technologies and how it can disrupt the business and enable the business. And so, the third dimension beyond understanding the technology and the core business is communication. Communication for a technologist is hugely important. And while I really don’t want to take the burden off of the businesspeople to really understand the technology, etc. We need to make sure that we’re communicating well enough, and not just communicating what is SOA, and what are services, and, you know, what is machine learning, but how those things apply to what is core and paramount to the business. So, I think that’s a big role that we have to play and yes, the business does need to understand technology.

Michael Krigsman: What about… You mentioned AI, machine learning, and it’s almost becoming a, kind of, buzzword now. You’re both in organizations that are exploring all of these technologies. Could you maybe talk a little about AI and machine learning, and some of these new technologies and the impact on your business, and how you’re thinking about these things?

Kim Stevenson: Yeah, I’ll start on that. So, for me, this is a really… So, AI has been a long time coming. And, the way I think of it is AI is the umbrella for things like machine learning, deep learning, cognitive computing, ambient computing. All of that sort of fits into the AI umbrella. And you’re already seeing really, really interesting solutions come into play, like the self-driving cars and things like that. And then there’s the drone, think of it as a demo, you know, 150 drones fly up in the air in unison, and we spell out the Intel logo, and we do interesting things with the drones. But take that to the next step where you might be using it for a search and rescue mission. Where if you had 150 drones, the area you could scan for search and rescue is multiplied by 150 times. You could save lives that way. If you’re doing track inspections for railway tracks. And so, there’s a lot of really interesting things that have to come into play, and this machine learning, deep learning, this artificial intelligence, helps you actually make decisions in faster time, and with more accuracy, that you just wouldn’t be able to do without that. So, to me it’s really exciting and it’s a huge benefit for Intel’s business, because the more data we’re storing, the more we’re processing, whether it’s at the edge or back in the data center, those are all good things for Intel’s business. So, for us, you know, to accelerate that momentum would be a really good option.

Andi Karaboutis: Yep, I couldn’t agree more with Kim, and it’s multidimensional. You know, for my industry, for life sciences, if you think about the plethora of data to bring together, and not just the analytics in that, but deep mining to really learn from [it], to try to penetrate, you know, more quickly getting to therapeutics for diseases. There’s thousands of diseases out there for which, you know, biologically, we have therapies for about 500. You know, the opportunity is tremendous for that data mining, and machine learning, and opportunities to drive various variables together. And interestingly enough, Michael, and Kim and I were just on a string over the weekend, there are so many dimensions to it. As with evolution of technology, and evolution of various industries, you know, with the new car, you had to develop roads, you had to develop rules of the road, machine learning brings with it some interesting moral and ethical things that we have to get in place to be able to manage, as the advent of it. As always, companies like intel are providing better, faster computing power. We have more storage, more of everything, companies like Dell and the rest are doing that. We have to make sure that technology doesn’t become the long pole in the tent. We need to make sure that all of the ethical issues and all of that comes along with it. So, it’s a really interesting topic and Kim and I are heavily into it.

Michael Krigsman: So when you talk about, or think about some of the ethical issues, can you give us some examples of some of the potential issues that may come up?

Andi Karaboutis: So by definition, machine learning, right, will take you to where you have now created intelligent devices that will take more, and more, and more actions on things. If we don’t have rules of the road, I’ll call it, at a very tactical level on how we develop these things, what are we doing, you know, think about I’ll draw an analogy: Guns are used for good reasons. Guns can also be used for bad reasons. Atomic bombs on jets: same sort of thing. We have to make sure that what we’re developing or programming has morals, ethics, integrity baked into the thought processes behind them, or something that could be very good could turn into something that could be very detrimental for people.

Kim Stevenson: Yeah. So there’s a lot of decisions, you know, that are made. The easy ones to talk about are life and death decisions, but there are many nuances to it. But, if you’re in a life or death decision today, so, if I’m, you know, driving a car today, and, it’s clear there’s going to be an accident and I make a decision: Do I want to swerve right? Do I want to swerve left? Or do I want to go straight? So now the machine learning algorithm is going to make that decision because it’s a self-driving car. And, so then, what do you tell it to do, when in front of you is your clear death, to the right of you is my grandmother, and to the left of you is my children? Which decision is the machine going to make? And you could take that to a military application, you could take that to drug running and supply chain automation. There’s a lot of things that could go wrong, but I’m a firm believer that technology shouldn’t slow down for the fear that someone might do something bad with it. We are active in lobbying and discussing with Congress and legislative communities about what legislation should be in place. No clear answers at this point, but you take that ethical responsibility and that integrity responsibility with the technology advancement, and then, you have to take it to the legislative side. In fact, that’s how we got airbags in cars. Right? So, I wouldn’t slow down, but like Andi said was really good: Don’t make technology the long pole in the tent. Think this thing through holistically to the whole solution, so that legislation will be there when you want to introduce the new technology.

Michael Krigsman: Andi, do you think about AI/machine learning technologies in a different way than you would traditional software development or drug research?

Andi Karaboutis: So, I mean, as with all evolving technology, you have to think about: What is it bringing more to the table? What can you do with it, etc.? And to me, yes, I do think about it differently. I think about it as data mining on steroids, and really coming up with how do we get the vast amounts of data that’s out there, pull it back in, be able match it, find correlations, find causations, then go on to a next level of learning without sounding too redundant, and really taking that to help disrupt. If you look at our industry, you know, developing a therapeutic takes twelve years. And, when you have debilitating diseases like Alzheimer’s and cancer, and things like that, anything you can do where you can go in silico, and you can use machine learning techniques, artificial intelligence techniques, you know, and deep analytics and things like that, absolutely. I mean, we are following it a vengeance and we do treat it differently because it’s providing new capability to the table, and it can help solve bigger problems of course.

Michael Krigsman: Well clearly, this is a very exciting point, and certainly it seems drug development and of course all the things that Intel is doing. To what extent are you embracing AI and machine learning? I’m sure you both have organizations and folks devoted to this. But, where are we in the sort of explosion of the life cycle of the explosion of this?

Andi Karaboutis: So Michael, I wish I could tell you that, you know, we are really far along the path, etc. I think we’re treading very carefully. I think we’ve got a great foundation in place here at Biogen. I would say, if you wanted a scale of 1-10, we’re probably in the 2-3 range, and what the art of the possible is, and probably 10 keeps going further and further away from us, because as things progress, as the, you know, the technology and the learnings get better and better, we have a loftier goal to strive for.

Kim Stevenson: Yeah, and I would say, Michael, you’ve seen Intel announce products this year that are tuned for machine learning, deep learning, both training and scoring. So, we’re all in from a business point of view, and you’ll continue to see advancements there. I would say, though, you know, that we’re still (even though there’s sort of been this long buildup to it, because we’ve been doing AI for a long time in different flavors), we are still in the very, very early days, where industry standards haven’t been set yet, legislation still, the technology’s evolving really, really rapidly all with great performance improvement. But, we have, you know, libraries being developed, etc. So, we’re still at the early phase, and I think the way this plays out is you start to see component capabilities come in for autonomous function. The whole car doesn’t go autonomous in the 2016-17, I guess, model year, but things do...You see the technology come out every generation. And that’s what’s so exciting. But, we’ve got a good decade ahead of us before this fully comes into play, and there’s going to be lots of coexistence with existing technology, new technology, and they’re going to have to work well together.

Michael Krigsman: I’m involved with the IEEE, which has a major initiative going on looking at the ethical implications of AI, and autonomous systems. I actually co-chair one of their groups with David Bray, who’s currently CIO of the FCC. Just any thought on tensions that may ultimately come up between the desire of people who are probably fearful and, in some cases, with good reason, to regulate AI and the desires of developers to have unfettered forward motion. So, any thought on that tension, at all?

Andi Karaboutis: So I actually think developers sort of welcome the, what I’ll call standards or the rules of the road that the IEEE could put in place, or other organizations. Great developers actually like to do good. They like to deliver great capabilities. They like to provide, especially what can we learn, how can we apply it? Again, back to my world, around how to do good for patients. And so, I think they welcome it. They actually want to be part of the conversation, that’s the key thing. Instead of having something just come down, it’s how do they become part of the conversation and provide their insights on what would be good ethical programming, good ethical machine learning, mining, etc. and what we do with it. You will always have the hackers, you will always have people that don’t. But the mainstream, I think, is a very proud cadre of people that want to be proud of it. So, I really don’t see it as attention. I just hope that the IEEE is bringing in good people and knowing them as they do, I think they probably are to help with that and ever.

Kim Stevenson: Yeah, and I’d say, Michael, to prove Andi’s point: So, we have at Intel a Cloud for Good initiative, and one of the first implementation is what we call our cancer cloud. And, so it takes DNA sequencing information to actually give sort of better diagnosis and treatment plans. And, one of the things that we’ve done, because data is always the key to these kinds of initiatives, is that we’ve offered a benefit to employees and their families, that if you have cancer, we will pay for your DNA sequence so that it can get you to a better diagnosis and treatment plan. So, that all sounds wonderful, right? But, because healthcare is done on a state-by-state basis, we started in Oregon, and that’s available in Oregon, and we have to work through other states to get the same kind of benefit available in other states, and then we will have to build datasets that are appropriate to that state. So when I said, it’s going to take a decade, it’s because of those kinds of things, and that’s just a reality that you face, and you have to work within the system. And you know what, I never am afraid of tension. If there is tension, that usually leads the better dialogue, and gets us to a better answer. If there were no tension, I don’t think we would be as creative and innovative in the solutions that we bring together as technologists. So, I applaud the tension, and would, hopefully you and David would do this, but request that you have a diverse set of people, you know, global representation, industry-wide representation, so that we get to answers that work, you know, across a global economy.

Michael Krigsman: So I can’t speak for the IEEE, but I can tell you this large initiative has global representation, has people from all different sectors, and certainly on the committee that David and I co-chair, we include policymakers and from the government, and independent think-tanks, and from private industry, because, absolutely, we agree that we need this balanced perspective that includes these multiple points of view.

Kim Stevenson: That’s awesome.

Andi Karaboutis: Great to hear, Michael.

Michael Krigsman: So, let’s go on to another topic in our last fifteen minutes of this show, and let’s talk about, and I’m cringing before I say it, let’s talk about women in technology. [Laughter] So, okay, so either one of you can start and beat me down right from there.

Andi Karaboutis: What do you want to talk about relative to women [in technology]? There’s a lot of us there, we’re hoping there will be more, Michael.

Michael Krigsman: Let’s talk about the fact that there are a lot of women there, and hoping that there will be more. Accenture recently came out with a study. They were partnering with Girls who Code, and USA Today had a provocative headline that said something to the effect of, “If we’re not careful, the number of women in technology will actually decline between now and the year 2025.” And as Kim pointed out earlier when we were talking, an attention-grabbing headline. But, still, there are concerns, and it’s not a panacea.

Kim Stevenson: Yeah, so let’s… I always say we have to reframe this. When people start with “women in tech”, it’s like women have a problem. And, the broader issue is how do we make the technology industry and profession an inclusive profession that includes people of all sorts of different backgrounds and genders and cultures, the whole bit; because, you know, I’ll go back to my statement: we all know IT projects are all business projects. There are no teams that can be sort of, of a unilateral mindset. You need diverse experience, diverse perspectives, right? And I can give you lots of examples where products were developed by a homogenous team that didn’t represent the customer that product was for, and it failed in the marketplace. Yet, when, you know, I’ll go back to the early 2000’s, Ford put a set of women engineers on the Ford Taurus, right? And it became the highest-selling car because they had a different need understanding of their customer. At Intel, we were working on some wearables, and some of them are high-end fashion bracelets. Well, who’s going to wear the fashion bracelets? Women. And so, they were thinking about where on the bracelet do we put the USB charging port? And one of the women on the team said, “Well, I wouldn’t want to plug it in anyway, because at night, when I take off my jewelry, I lay it on my dresser. So why not create a wireless charger or a wireless pad that I can just set it on, and then you’re not destroying the beauty of the bracelet with a plug for a USB charging.”

And so, there are just a few examples of where diverse members of the team that represent your constituency and your customer base actually get you to a better outcome. And so, when I think about where technology is going, I think the world demographics are changing. You know, by 2050 in the United States, there will be no racial or ethnic majority who will be that much of a blended community, and so then why wouldn’t you have blended teams? I’m pretty proud of what we’ve done at Intel. It’s say it’s a journey and we’re partway on the journey, but we set in place very clear objectives about our hiring retention and progression, of our diverse population. And, we’re doing a great job. We’re not there yet, but I’ll tell you our hiring has been… we reported to the last two years over 40% diverse employees. And that tells you that talent is available. You may have to look in different places, you may have to change your interview teams, you may have some criteria about how you select people, but the talent is available and we haven’t lowered our standards one bit. In fact, we increase our standards every year because of the rate and pace of technology change.

Andi Karaboutis: So I, again, agree with Kim. I think she said it extremely well. The conversation has to become more robust. We do still have less women in technology than we’d all like. We’d like to see it, you know, be more 50/50, etc. The conversation has to be more robust around not just talking about women in technology for the sake of getting more women in technology, but what are the things we need to do to get the results we need. Part of it is great diversity programs, that I know Intel has and that Biogen has. Part of it is coming together in women in technology forums, not talking so much of the challenge of the results, but talking about the technology. I’m being a little harsh here because there have been a lot of situations where I’ve been asked to speak, I know Kim’s been asked to speak as well, and it’s how do we get more women? How do we do that? And I think it’s a good topic but it shouldn’t be the whole discussion. The discussion should be, “What are we doing as women to really drive technology forward? What are we doing to be at the front end of that curve? What are we doing, for example, like Michigan Council for Women in Technology, which I was very proud to be part of when I was back in Michigan, to bring a feeder pool to fruition?” And really start driving that. And again, I’ll be a little harsh, and I hope my female colleagues will forgive me: a little less ruminating about it and a little bit more really continuing the great work that we’ve started to drive it forward, and be the poster-people for these great implementations and great things that we’ve done. So, I’m being a little edgy here, I might get a little criticism for it, but I think Kim and I are saying the same thing…

Kim Stevenson: Yup.

Andi Karaboutis: … but we’ve shared a bottle of wine and talked about that actually!

Kim Stevenson: We did! We did, not too long ago. And you know, Michael, the other thing that I get asked a lot… So, men have to help, right? I would not be here in my position today without having been mentored and supported by a number of men throughout my career. And, so there’s a role for women’s growth in this challenge that we’re facing, but there’s a role for men, too. Male advocacy is really important. So, to the extent that all of the audience today, you know… If you’re thinking “What can I do?”, right, then I’ll tell you it’s really easy. Sponsor a woman that’s midway through her career. Find a young woman and keep her, encourage her in technology. And then, ask them to do the same thing for two other women. And so, a couple small steps makes a huge impact when you start getting that multiplication factor.

Michael Krigsman: You both are truly the poster examples of women with extraordinary careers, because you’ve both come out through being CIOs, obviously a very male-dominated profession focused on tech, and, you have now moved into broader business roles. We hear about the seat at the table, I mean, you’re both members of company boards. And so, what did you each do to make this happen?

Andi Karaboutis: Well, you know, I don’t know. Worked hard.

Kim Stevenson: You know, when I think about things that I would say, maybe I did differently than would be considered typically “female,” if that’s a good way to think about it. It’s a differentiator kind of thing, I definitely networked with a purpose. I still do. I network with people who I think can help me, not just people who I like. And, often women fall into that category that we network with people we like, we’re so busy, so you use your relationship time that we need… By the way, for women, “relationship time” fuels us. It helps make us whole. So, you tend to, then, network with people who you like. And in business, frankly, liking somebody isn’t the key criteria, right? Can they help you get done what you need to get done? Can they help you build a partner ecosystem? Can they help you with their innovation agenda? So, again, I think that sounds a little bit harsh, but I do think that that’s a differentiator and I think I’ve always done that. I’ve networked with people that I believe had a shared view, and were in it to help one another, sort of looking for that win-win. Whether I like them personally or not was not a criteria at the beginning. I hope through the developing of a relationship that I like them as people at the end, but it isn’t always the case. And that, for me, is okay.

Andi Karaboutis: Now for me, for me … the way… the simplest thing that’s helped me do it is overcome that little voice inside that says “Not good enough, overcome the qualifications.” We’ve all heard this story of you put a job description in front of a male candidate and ask them, “Do you think you could do it?” and they say “Yeah, absolutely!” And we females do have that little voice inside that says, “Oh, I haven’t done this, I don’t have experience, I’ve never been on a board, I’ve never sat in a boardroom, etc. etc.” And, so, for me it’s been just kind of pushing that voice back and saying, “Yeah, I can do it!” and it just takes a little more work to figure out how I make myself comfortable with it as I’ve built the capabilities needed in this description kind of thing. And that’s the thing that I tell young women, when I’m mentoring them, about the only thing that gets in your way isn’t “People don’t like you, they’re not promoting you, there’s a glass ceiling,” though some of those things can be very real. But the thing you can control and overcome is that voice inside you that says, “I don’t think I can do it.” And, certainly not just women, but I know it’s more so with especially young girls aspiring to do things that appear challenging. And I think we need to move on with that.

The second thing is, I stopped beating myself up for not having the demeanor that a lot of people expect of me. I am passionate, I can be emotional, and, you know, I would beat myself up driving home thinking, “Oh, was I a little too emotional or a little too passionate?” And once I put that thing aside and started focusing on, “Did I deliver what we needed to do? Maybe how could I do it better with the results for it?” I got out of my own way, and we women need to get out of our own way. Again, being a little harsh, a little edgy, I hope people forgive me, and sort of embrace that and take it. I think that’s really important and what’s helped me.

Kim Stevenson: Yeah, I would say, being your authentic self is a great attribute for any leader. And so, if that means you’re a little bit more passionate or you’re prone to tears, so what? It’s who you are. But, when you have to cover, that’s an official social scientist term, “cover,” and try to pretend you’re somebody that you’re not, all your energy goes into covering instead of actually solving the problem and so… I’ve been called a lot of things during my career. Some of them have been positive, some of them haven’t been. But, frequently, and actually this has been true for a long time. People will say I’m “intimidating,” and, for a long time, that bothered me, because what they think is intimidating… When I look in the mirror, what I see it as is passion. I just want to get something done. And I finally just decided to own it. Right? So yes, I am a little intimidating. But, you know what? That’s who I am, and you just have to sort of own it. None of us are perfect, men or women. We all have our quirks. If you can stay authentic and open up, and that way, I think you can be a lot more effective.

Michael Krigsman: Well, that was really just amazing hearing you both talk. We only have a few minutes left. What advice or recommendations do you have for organizations that want to do more?

Andi Karaboutis: Stop thinking about the IT organization, the CIO, the digital data organizations in the traditional sense of they are digitizing processes and capabilities, and start thinking, like many companies already do, how to take the person, the organization, the technologies available, and put the challenge to them to how will they help contribute, or completely change, what the company should do in order to be more innovative and really drive top-line and bottom-line growth.

Kim Stevenson: Yeah, and I would say, I’ll take the team aspect of it. Make your goal to build high-performance teams. Most companies can buy the technology that you need, when what you want is a high performance team that’s made up of a diverse population that represents the customer base you’re going after today, and the customer base you’re going after in the future. And then, you’ll be able to partner with great technology companies across the board, to help bring the technology to life. But you need that high performance team that really will implement it, because in the end, technology is good for business.

Michael Krigsman: Boy, I wish that we had a lot more time, because there’s so much to talk about. But, maybe, let’s finish up by asking each of you, what advice can you offer to CIOs? I mean, you’ve both been there, and done that, in the past and you have a very broad perspective. And so, what advice do you have for a CIO that wants to be just great at what she, or he does? Andi, how about you?

Andi Karaboutis: So, it’s a little bit of what we said earlier on. I’ll emphasize it Michael, which is continue to not just be an expert in technology, and continue to not just understand your business, but think about, imagine a day when, or imagine a life of around your business where you’re actually futuring. And you’re thinking a couple steps ahead. The days of “Let’s go see what the business needs,” or even “Let me look at the position and vision of the company and see how I can support it,” which is very important. That third step of “Imagine a world where… What can I do to actually bring in and modify what the company can bring to the table as a leader versus a peer, or a follower,” if you will?

Michael Krigsman: And Kim, your thoughts?

Kim Stevenson: Yeah, I would say company strategy first. Are you executing the company strategy, and you’re bringing the technology pillar into the company strategy? And, part of what the unique ability that you have in IT is to help make those company tradeoffs. So the strategy is a great plan, but in execution, you have to make a tradeoff across business units within product portfolios, you name it. And often, you will bring a unique perspective to help make those tradeoffs that get us to the best strategy. And so, it’s a business recommendation, not necessarily a technology recommendation, but it’s so key to be able to set yourself apart from the business leaders who get paid on their maximizing their P&L, and having that corporate perspective and helping you execute the strategy I think is key. And just never forget that if you try to approach it from being in the seat of the business leader, then I think that you are able to relate better to the challenges that they have, and help work through those knotholes that inevitably come up.

Michael Krigsman: Wow, well I am going to have to go back and listen to this conversation. This has just been so rich, and I want to express such a grateful appreciation to Kim Stevenson from Intel, and Andi Karaboutis from Biogen. Thank you both, so very much.

Andi Karaboutis: Thanks for having us!

Kim Stevenson: Thanks, Michael!

Michael Krigsman: You have been watching Episode number 199 of CXOTalk, and I also want to thank Livestream, because those guys provide our video infrastructure, and they’re breathtakingly good and the make CXOTalk possible. So Livestream, if you’re out there, thank you guys so much. And I hope that, everybody, you will join us again on Friday when we’re going to be talking with the CIO of Brooks Brothers. It started a long time ago, and we’re going to hear about their digital transformation. Bye-bye.