Rethinking Digital Transformation (with Cheryl Smith) | Part 1

rfps are not appropriate at this moment because they're too specific people need information and even after you get your first range of information you might need a second range of information um and even then to try to narrow something down to a contract that you hold people accountable for i can guarantee you things will change things will change as you begin to work [Music] i'm joined today by sheryl smith cheryl has led i.t organizations at fortune rank companies for 20 years she was the global cio at mckesson corporation keyspan energy now national grid and westjet airlines was the vp of strategic systems at verizon and principal at eny on top of being a co-founder of the cio institute at uc berkeley's house school of business cheryl has helped to create a leadership program at the professional development academy with general colin powell and served on a number of advisory boards including ibm and oracle's most recently co-authored a leading book on digital transformation the day before digital transformation unlocking digital transformation for business leaders cheryl it is so great to talk to you again thanks for joining me it's good to be here jason thanks for having me maybe tell me what uh encouraged you to write this book and what might have been missing from the industry in february just before the pandemic hit um i'm on the board of an internet of things company and i've been on the board for about four or five years it was a small company specializing in doing work on internet of things and the ceo from the company called me in february of um 2020 and said do you want to write a book and i said nope not on my bucket list whatsoever i'm happy doing consulting well then he called in march after the shutdown and he said do you want to write a book i said yep let's put together an outline and what we started out both of us and and i come from as your introduction shows i come from a background of being inside very large companies um when i left mckesson we were fortune 14 and i was one of five people that that ran that company and i was their global cio but i've been the global cio for very large companies and so i've seen technology from the inside and phil perkins my co-author um is is very technical but he's always been in consulting for very large companies and so he's seen it from the outside and what we realized that together we had an incredible amount of information detailed information for about a hundred companies and the thing that frustrated us more than anything is people throwing around the words digital transformation and we didn't like any of the definitions that were out there i mean if you look up any vendors product if you look up any corporation's website they all say we're working on digital transformation we do digital transformation so phil and i knew that we needed to come up with the right definition to help people truly understand in businesses what this is all about and what they have to do it was a very contentious eight months as we wrote the book because we had the same conclusions that we were coming at it from different directions so it caused us to do a tremendous amount of research so the book is filled with research with experience and it's experienced from all different perspectives um what we came up with by the way is the fact that we are in the fourth industrial revolution we have gone through this as society three times before this and there were patterns that we found in the first three industrial revolutions that are absolutely applying to this one so at the very beginning the this industrial revolution started around 1980 it will continue to about 2040. so we're in the last 20 years of this revolution um we know from prior revolutions exactly what that means exactly what that stage means this is the time when companies take the technologies that have been developed um during that revolution and really really leverage them this is the time where all the places where where society booms jobs boo people make money um and and so go back to the very first industrial revolution the steam engine right so the steam engines invented and it began to be built into looms into boats into trains it you know it created um new products but it took products that were already there and it automated them so here we are 2021 um what we found is is that there were some early technologies that truly created the um digital age and that they were technologies like erp systems e-commerce systems search systems you know privacy mobile computing it was the it was the um miniaturization of technologies from the electronic age and also the development of some really powerful technologies that software technologies that helped companies and organizations run themselves better and the googles the um facebooks the amazons took advantage of those technologies and did really well with them they developed those early technologies and did spectacularly well with them and now we have a second group of technologies coming up called we just call it emerging technologies and these are the 3d printing the data analytics the artificial intelligence edge computing machine learning so these new technologies are part of this digital revolution but these are the ones that today when businesses incorporate these technologies into their products and services are really going to make a difference it's going to make a difference both in making sure that the organizations succeed and thrive and the companies we have found from the past three revolutions that if you don't incorporate the technologies you will no longer be in business you will no longer your organization will no longer survive so we have from 2020 to about 2030 to begin to incorporate these technologies into our organization's products and services now the really frustrating thing was too many organizations say oh i've taken my infrastructure and i put it in the public cloud i'm now digitally transformed no that is that's the early technologies that builds the baseline for you to truly digitally transform your products and your services that you offer to your customers to your guests to your cust clients to your patients to to whatever you call your end users you have to incorporate these technologies in in both the early and the emerging but particularly the emerging directly into your products and services so this is not an i.t issue this is not something i mean there's never been an age in the past where they said oh well let's just go out and hire a chief innovation officer and let them do all of this special technology stuff that's not how it works the the the business people whether you're a government or a non-profit or a company the business people have to select some of these technologies incorporate them into their products and services or surround their products and services using these technologies in order to digitize in order to truly digitally transform their organization to be able to move forward into the 2030s because by 2040 there's going to be a whole new suite of technologies and we're going to start all over again so many of our customers and the people that we talk to feel like they're kind of a victim of this market right now which is dragging them in particular directions or washing them downstream with technology and they're told oh migrate to the cloud because that's good or deploy your whatever office suite and that's digitization and i love that it gets rid of the opacity of what digital transformation is when you when you say you must digitally transform your products and services the way you do business and how your customer experiences you that's your digital transformation and anything else is just foundational or a start i love that that's exactly true you you have summarized it perfectly and that's why we wrote the book we were frustrated that people were thinking okay so we've put in server farms we are now digitally transformed no all you've done is built a baseline by which you can actually digitally transform your products and services and you have something to deliver it you have something to be able to um be able to incorporate those technologies into your products and services and really do something with it we're part of the emerging technology we're part of the piece that brings that the data that's out there just this raw data and makes it usable by the business but quite often we're hitting a customer bid stream i'll give an example where they've done all the quote unquote hard work of getting their microfiche and their paper documents and their drawings and they've scanned and pdf them and then put them into a nice system like an open text or an ibm or a sharepoint they say we're digitally transformed but then nobody uses it nobody can find it and it's not being used to drive your your core business workflows it's this there as governance and reference material and then shiny docs comes in and says let's mine the data out of there combine it with your structured information that's out there turn it into usable information and knowledge and this is news to these to to our guests they're like oh i have something extra to do i thought i was done my digital transformation and there's this kind of exasperation where when we look at emerging technology i agree with you there's another 19 years worth of work here to bring in these amazing emerging technologies that are going to transform your business yet somehow people wanted to rest on their laurels and saying hey it's pdfs now instead of documents that's good enough right you know it's funny because we understand the frustration phil and i spent a tremendous amount of time trying to figure out how can we take um to take this confusion that's out there and help companies really think about what this is all about and so we came up with four we call them strategies in the book but they're basically frameworks and so you take your product it's pizza i can't change pizza okay so it's a diaper there's nothing i can do about diapers however if you take a look at the strategies that we've that we've developed the first one says i i want my company or my organization to be completely customer oriented i want to be so customer-centric i want these customers to be able to push a button and all they have to do is push a button and the pizza that they want shows up at their house and when they want it to show up without having to do anything else this is that so the first strategy is to become very figure out how to totally connect with your customer the second strategy is is look at all of the systems that serve all the support systems surrounding your product maybe your strategy is to take these new technologies and to make those support systems the most amazing that they can possibly be the third strategy is to actually build these technologies into your product or service build it into the car build it into the diaper build it into the battery build it into the product or service and then the last one is platforms we see platforms obviously and these are providing products and services that are purely digital there's there's nothing else but you know zeros and ones involved in in the in the product and we talk about all different industries we talk about different technologies that apply to it but to get to what's important to to you and your your folks is the data is the information the intelligent information so what we found is in every company every organization today there is and we we began this at the beginning of the digital age we began to find that's why we initially called it the information age so much data was being produced by these new technologies by these new systems that hadn't been available to people before and so it's exactly what you said it's taking that data that helps you do your operation and right now after it helps that particular manufacturing process or operational process you throw it away it's data exhaust you just i mean it dissipates into the air like you know exhaust coming out of a of a car that we say no no no no no i mean amazon took that data and amazon knows what you're going to buy before you buy it facebook took that data and is selling it for advertising that's how it gets funded google took that data and figured out how to help you search it better so these companies are big and powerful because they understood the power of not of taking that data and creating it into intelligent information and that's what we need to get to because no matter which of the four strategies is best for your products and services no matter which of these technologies you actually eventually incorporate one of the the new emerging technologies you really need to understand the data exhaust a tremendous amount of information where it is in your organization and then the decision makers the business has to say what questions do i need to have answered you don't go to i.t and say you

tell me what questions i need to have answered no that's not what i tease you know what their job is what their skills are we can help you get those analytics packages up we can help you get the ai up we can help you get the machine learning up but it's the the business the operational people have to say what questions do i want answered what data do i need where is it and how do i take this and make it powerful for us i i love the example we talked about before that fell on your plate which was which is wi-fi on westjet aircraft maybe maybe we could talk about what the different roles were in the organization how this changed from being an i.t project to a customer experience project and in a business project yeah i think it's a really good example when businesses come to me and say you know this is all i.t stuff and i say okay let me give you a really good example when i was a cio at westjet um the business came to me and said we want to put wi-fi on our airplanes makes sense everybody was doing it it's a revenue product they charge for people when they get up there to use wi-fi on the airplanes and i said to them i'll tell you what i'll give you some of my technology people to help you hire your own technology people when they look to me and they say well why would we do that we have yours and i said wait a minute we have 89 bases around the world that i have to communicate with every minute of every day we have kiosks at all those places that we have to keep up we have 1 000 call center agents that now that we're using voiceover ip one of the new technologies we have got to um they're working from home we have all of this telecommunication we have ground to air communication that we deal with between our operating our operations people in our airplanes we've got under the wing we've got the maintenance guys and how they communicate that's my job that's my responsibility i've got to take care of all that telecommunications why find an airplane is a revenue product that's yours that's your responsibility it's not mine and so this is where business began to say oh yeah like she's right in the past any revenue product i would be responsible for those technologies whatever you want to call them involved in in revenue project products or products that directly touch you know consumers that's something that the business has to become expert at and in the past believe me i was a cio that if i found it organizations out in the business i called them skunk works i went and got them and i brought them in but this is different this is different now this is digital transformation is transforming your business products and services with in these wonderful digital emerging and you know establish technologies and that's a business function and so the business has to learn more about the technologies they have to hire technology experts in their areas to work directly with their day-to-day people to make sure that what they're doing what they're offering um is what their customers their end users whatever you want to call them actually want and need in the absence of a sheryl smith to coach a business to do this activity to understand where the business demand lies where the experience for the customer lies what organizations often do will say i need technology x and they'll put out an rfp and they won't educate themselves on how the customer experience how we're going to transform our products they'll just say we think we need this feature and then of course everybody out there is going to bid to that exact feature whether it is asked correctly or incorrectly maybe to talk about like am i off base or is this actually organization shooting themselves in the foot by by just demanding something without truly understanding the sheryl smith how the business experience should work in order to get the technology well to me there's two aspects to that question so the first aspect is i'm a business and i'm sitting there and i'm attempting to do strategic planning and the first aspect is what am i going how do i even begin to figure out what kind of technologies might even be of value to to my organization and that's when strategic planning has to be done differently it can't be done the way it's been done in the past i mean you seriously have to take a look at your products and services um and at competitors and and what technologies can do and so there's a strategic planning part of it that's really important and in the book we kind of try to give a step by step as to how to go about do that but once you do do that and once you've narrowed it down to you know i i really need um 3d printing i need data analytics and i need embedded sensors those are my three emerging technologies are going to make the difference okay going at an rfp makes absolutely no sense these technologies are called emerging technologies for a reason that means they're emerging you know their features and functions are changing they're morphing they're they're being incorporated by different companies in different ways or different organizations in different ways and so what i tell people is to go out on rfi you know get information bring the information into your organization an rfp makes no sense if you don't know exactly what all your requirements are and no one can know what all the requirements are when you're inventing something reasonably new for your product or your service and so um you know phil worked with a company like my co-author about batteries you know you can go to you can go to amazon and get batteries in 24 hours cheaper than any duracell than any you know um energizer what whatever and so how do the big companies compete well they worked with one of the big companies and they said let's put bluetooth into build bluetooth into the battery so that when this battery is in a a configuration you'll know when the batteries are running out so for example your smoke alarm it wouldn't be nice to know when it's time to change your smoke alarm before it starts to go off more important healthcare so many healthcare devices require batteries and so knowing when those batteries need to be changed specifically need to be changed is really important so now so how do you go about and put an rfp out for help doing something like that and you need requests for information so that people can give you their best ideas about the different technologies how they're using them how they're developing how they're seeing them what they have found really works um for different organizations so that was a long way of answering a question that i think rfps are not appropriate at this moment because they're too specific people need information and even after you get your first range of information you might need a second range of information um and even then to try to narrow something down to a contract that you hold people accountable for i can guarantee you things will change things will change as you begin to work do it yeah certainly our most successful projects are ones where the customer decided to do something slightly different than what we originally engaged them for uh the ones that are unsuccessful are the ones where the customers dig in and say i don't care what we learned about our data i still want to do x and that's some for some reason that that happens and it to me it's kind of locked to that rfp type of thinking i chose the cadillac of products therefore i must implement it and we're stuck with that decision it's kind of that sunk cost fallacy i mean we're even talking to to government organizations that are really kind of fanatic about the difference between rfps and rfis but the technologies the emerging technologies they're going to make a difference in transforming your business digitally are not ready for rfp for the rfp process they're just they're just not so we try to explain to people um we give an example in the book about intelligent shelving you know this company goes out for intelligent shelving and this company that's providing it realizes that oh my goodness we have a whole new group of people that we're dealing with within a company we're just not dealing with the shelving guys that used to buy shelving we now have to deal with the financial guys with because you know it's giving off a ton of information that helps so many people within the organization in so many different ways and the solution might be a little more expensive than just buying you know wooden cardboard shelves but the benefit to the organization is massive particularly in terms of the information that everybody will get so yeah it's it's it's a new world it's a different world it really reinforces that your organization everybody's organization has a data ecosystem that's already running it a information ecosystem that is emerging uh and if you don't understand that ecosystem the data how information flows within your organization and you don't have a strategy to transform it no amount of technology is going to help you until you are confident in that that data and strategy how did we miss that how did we go technology first well the technology is moving faster than unfortunately business business and when i say business i don't care whether you're a government person whether you're a not-for-profit business is not i.t so let's kind of use that as the description but the business folks aren't used to being really challenged to say what decisions do you need to really run your business what information do you need what is going to make a difference to your success and failure as an organization those are tough questions and there's nobody but the business people that can actually answer those questions and so it is a little scary on the other hand when products give you this tremendous range of data that you already have in your organization and if they show you where it is and if they make it really relatively easy to access there's going to be people up and down the lines in your organization they're going to say wow this means this if i put these two things together it means that wow if i i love having that available to me because it helps me understand what that is and and so um i think first thing and what we talk about in the book is to know what you have second thing is is to be able to get know what you have in terms of data second thing is is to be able to get access to it relatively easily and then the third thing is to say okay i how am i going to use this to how am i going to use this to make it powerful to help me make really good decisions that will make sure that my organization succeeds in the next 10 years in the next five years [Music] [Applause]

2022-03-07 17:05

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