CIO CTO Investment Strategy with Lenovo CXOTalk # 773

CIO   CTO Investment Strategy with Lenovo CXOTalk # 773

Show Video

Our conversation today covers investment planning  for 2023 for CIOs and CTOs. Our guest is Arthur   Hu, Global Chief Information Officer and CTO  of the Solutions and Services Group at Lenovo.  As the CIO, it's really about helping power  Lenovo, which is a $70 billion powerhouse   today. We're in the Fortune Global 200. As CIO, the role is really about how to   make sure that the $70 billion business runs  24/7/365, as well as driving the transformation.   We'll talk more about that later. On the CTO side, it's really a little   bit different in the sense that it is  very focused on our customers and how   we take the best of what Lenovo has to  offer and bring them to the customers as   services and solutions. The CTO role is about  planning and building that technology future  

and about the portfolio for the business group. What are your objectives as you think about 2023?  As the CIO, it's really about helping the  company continue to be agile in the face   of uncertainty (to be more specific). Obviously,  the business needs to continue to run to keep the   lights on. It has to go flawlessly and seamlessly. At the same time, we find ourselves with a couple   of other factors. One is the macroeconomic  environment, which is injecting a lot of  

uncertainty, which means the goal is to help  the company navigate that. At the same time,   as a strategic objective, we're continuing  our transformation from a hardware-based   company into one that's hardware  plus services and solutions-led.  That's really like building an entirely  new company. The CIO role is really   helping how we build the processes, the  technology, the tools, and the systems   to enable that growth and transformation. On the CTO side, the objectives are really  

about how we envision the next generation  set of services and solutions we want to   bring to our customers. For example, around  digital workspace, around immersive reality,   around the right managed IT services to deliver  outcomes for IT leaders around the world.  Now, what ties those together is that it's really  all about using technology in order to power,   whether it's powering Lenovo, or it's powering our  customers as well. That's the thread that ties it   together, which is, if we think about it, Lenovo  is (from an IT perspective) my main customer.  At the same time, our solution and services  group (SSG, as I'll refer to it to save us   some time upcoming) is trying to serve people  similar to myself. We want to build a platform   that ties together that says, "Let's take  the best of what Lenovo builds today and   use it not only for ourselves but to help  our customers achieve their objectives." 

As you think about the investment decisions that  you're making, what is the criteria? What are   the evaluation points that you go through? It's a  complex process, especially with these dual roles.  Let me take you through some of the frameworks  to think about this. The first one is, of course,   tying with the business strategy and  the business value because, ultimately,   whatever you're investing in, you want to be  sure that, whether the time horizon is one year   or three years, there's a return that's going to  be tangible and recognizable to the business in   that timeframe. That's the first part, and  I would say that's one of the key pillars.  The second piece is really going to be around our  ability to execute. As you sort through, there's a   very important part of the prioritization, which  is how executable are these things because you   want to make sure, with transformation, there's  going to be different levels of maturity and   readiness to receive or to implement and land  what it is you're doing with the business. As we  

go through the process, we're also going to take a  sharp eye on which parts of the business look like   they are more enthusiastic, they're more willing  to put in the work with us to make that happen.  We'll also consider track record. This  is important as part of the closed loop.  I think, as you and I have seen, one of the key  things around our environments, especially with   large enterprises, is complexity. It's very  hard to say this one thing led to the outcome.  If we did a project, for example, there  are many other variables that could lead   to an outcome. Let's say we're targeting  to improve customer conversion rates. But  

because there are so many variables in  that, it's very difficult to attribute.  When we think about the business cases, it's  really important also to consider how well have   we executed with these teams in the past because  we want to and will preferentially weight teams   that have a track record of working well with  us, and our ability to deliver. Everything   looks good on paper. But when the rubber  hits the road, when the outcomes are done,   and when you look at a track record over  time, you can create a much better picture. 

I think it's a combination of what are the  things that deliver value to the business,   what are the things that we're able to land, and  then, finally, from a technology perspective,   what are the things that we need to do to  make sure we keep the architecture modern   and ready for the future because I think, as  part of maintaining the architecture freshness,   we'll say, for the future, you never want to  let the technology debt get too high. And so,   it's a combination of the strategy, the value, the  executability, as well as the technology aspects.  What I find particularly interesting is  how this planning process seems deeply   rooted in both the technology side, but it  seems equally so in the human side as well.  I think a lot of it also goes back into the  planning in terms of how do I ideas make their   way through the organization because all great  projects and all projects that really deliver   outsized value, especially relative to the  baseline and the expectation, are rooted in a   strong partnership between the technology and the  business teams. On the people side, it's really  

important, I've found, that from the inception,  even when you're brainstorming about a project,   the best projects that I've seen will  tend to be ones that were co-conceived,   co-brainstormed, and co-sponsored soup to nuts  with a strong partner in the business team.  That doesn't happen overnight. A lot of my time,  whether it's in the CIO role or the CTO role,   it's been an integral part to make sure that  you're investing the time not just in the   technology because I think it's table stakes. The  company expects you to be fluent and to be deep in   the key technologies, and to make that accessible  to the company in terms of what it makes possible. 

What really makes the technology  sing is its deployment, usage,   and uptake. That part, I think, the human  side comes into play so important because   when you have the partnerships that you've  built over time and you have the trust,   the trust ultimately is actually what allows  you to really gain speed and move quickly.  I think, in addition to the general notion of  business readiness, are they ready to accept the   change, are they willing to embrace the change,  roll up their sleeves, and do the hard work   of knowledge transfer and organizational change  management? The sponsorship and the trust are huge   accelerators when you can get them right as well. As you're thinking about technology and ensuring  

that you don't have the overhang of technical  debt, at the same time you're also thinking   about the uptake into the organization  and how the organization can absorb that   technology. Is that an accurate way of saying it? It is, and I think the challenge there is really   helping the business have the right mindset  for viewing it. Let me give you an example.  If you think about programs, the most visible  things are the functionality. If you think about  

any RFP or anything where you're evaluating, the  first thing on the list is what will it do: one,   two, three, four, five. And that's fair.  It deserves its place in the evaluation.  What's important for the business to  recognize, though, is then they say,   "Well, if we need to beyond this." It's like the  iceberg, maybe to use another example. That's part   of keeping that healthy as part of making sure it  integrates well, as part of making sure that it's   properly architected, as part of making sure that  the technology stack is going to be up to date. 

There's additional work to be done,  and so the technology debt – sorry,   making sure the stack stays modern is helping  the business understand the whole picture,   but in terms they understand. If you say,  "Hey, I'm going to give you the functionality   and I have to do a bunch of back office work,"  it's a little harder for them to understand.  If we take an example recently where we talked  to the business about why the project cost was   higher than they would have expected  to, quote-unquote, "just deliver the   functionality," if you say, "Well, I've  got to do a bunch of" – insert technical   jargon there – they don't understand and process. Instead, we've had to reframe the discussion to   say, "If we don't invest in this, it's actually  going to impact, ultimately, your agility. You   may get this live now, but in 6 months, in  12 months, your ability to release quickly   will be slower. Your ability to upgrade and get  the latest platform features will be slower." 

Then they say, "Oh... Okay." And so, that's been  one of the tactics that we've had to use because   I definitely remember – myself included,  and my teams – we would spend significant   time trying to tell them why we needed. Tech debt is kind of a hard concept,   and so we've even stopped using so much tech  debt but started talking to the business   and meeting them where they are, so using terms  such as, "Hey, look. It's going to be harder for   you to upgrade." Okay, they understand that. "It's going to be slower to release because   we have to do extra regression  testing." Okay, they get that. 

If you say, "Well, look. Do you want to pay  it now or pay it later?" paying it now means   you don't have to pay it later, and it's a  better philosophy. You can illustrate why   that is. Then they're much more receptive. I think that's the bridge that we've tried   to build between the business and also  technology debt in a way that's accessible.  We have an interesting question on Twitter.  This is from Wayne Anderson who says,   "With an uncertain market, maybe a  year or two of global flat growth,   does the budgeting and planning approach  of the CIO needs to fundamentally change?"  The planning fundamentals and approach  don't need to change, but certainly,   you need to weight factors differently. What I  mean by that is, in any healthy planning cycle,  

you're going to be thinking about where you  need to invest, where you need to optimize,   where you need to stop or reduce, potentially. When times are good, you're going to overweight   on the invest for growth, and maybe more on  optimization, less on the stop or reduce.   With uncertainty, then I think IT professionals  around the world are going to be faced with   do more with less, inevitably. The picture really evolves around,   well, how do we save? And, if you want to  invest, save to invest. The aspects about  

what we want to stop or how we rebalance,  I think, get weighted significantly higher.  If you set up your budget planning the  way I have, you don't have to say, "Oh,   throw everything out. Let's start over," but it's  simply a matter of giving the factors different   weight in the portfolio that you're looking at. I think that's the key, which is not to do a 180.   I think, again, it's education with the business  because IT is longer-term. It's very hard.  For example, we have many projects, and  I think many in the audience who do this   professionally are in the same boat.  We have multiyear transformations.  

That doesn't make sense to say, "Stop." For example, at Lenovo, we're not going to become   a solution and services-led company. No, we are.  That's going to continue to be the aspiration, and   we have significant capital expenditures aligned  to achieve that. We're going to continue those. 

The question is then how do we rebalance? How do  we take a really hard look at things that we are   already doing today so that we can continue  to fund the absolute strategic imperatives?  Please subscribe to our newsletter  and hit the subscribe button   to subscribe to our YouTube channel. You have a trajectory, and that trajectory   has a variety of different components. But it's a  longer-term trajectory. And so, therefore, you're   making adjustments as you go but not significant  changes, necessarily, due to a year or two of a   change in the economic climate. Again, is that  a correct way of paraphrasing what you just--?  That's exactly right. I think the way I think  about it, which is our strategic direction  

and the strategy of the company have not  changed. But our tactics may change. We   may go a little faster here. We may zig  where we were going to zag. We're going   to make small adjustments, but we're still  going to be pointed in that broad direction.  Now the other piece that's extremely important,  as I'm also going through this real-time as we   try to navigate the uncertainty, is that this  needs to be an iterative game. Similar to how we  

run sprints and we're going to continuously test  for feedback, I think planning is the same way.  Now Lenovo is a public company, and so we  report out quarterly. The way to navigate that,   though, is within the construct of having budgets  because if you tell your CFO at a public company,   "Please, I don't have annual targets. I don't  have quarterly targets," that doesn't fly. 

But within that construct, I think there are  tactics you can take to hold some contingency   and to work with the CFO and the organization  so that you have the ability to maneuver. And   you can create that for yourself. If you  say, "I'm going to take some from over here   and rebalance so that I can do more that's  strategic," that's going to be important. 

The iterative part also is don't assume it's  a one-off, which is you get a target and you   have to say yes or no. What we're finding  is because there's so much complexity and   because there are a lot of tradeoffs to be  made, it's an active conversation over time.  When we do it at Lenovo, it's not about,  "Yes or no, is this the target?" It's,   "Well, let's make sure everyone fully  understands. We can hit any target that   the company gives us, but does the company  fully understand the implications of doing so?  For example, if we say, "Hey, we will need to  slow down these strategic releases by 25%," and,   for example, one of our major releases  is around improving our everything as a   service platform. If we wanted to slow that  down by 25% and the business says, "No,  

we want to prioritize that," and they say, "Well,  maybe that part of the budget we don't touch."  It's important to recognize, to create the space  for dialog because the more that the business   understands what it is, the more it becomes a  collaborative exercise. Anything in my book,   Michael, that draws the business into the  discussion about what are the real tradeoffs   here and what's really valuable I think is a  win because you want people talking about how   the technology lands and how it's applied  and if they're going to sign up with you.  This is how you align your investment strategy  with what the business ultimately needs to ensure   that you're meeting the business goals. Yes, exactly. Our governance  

actually reinforces that. Whenever we have a business case,   I think there are two things that I want  to call out. One is that when we sign on   the dotted line to say commit, it's always  a multi-line. There's a business sponsor,   and there's a technology sponsor. There are people  on both sides who are committed to make it work.  The second part is what I talk about, which  is we need to lengthen the time horizon.  

These are never one-off interactions,  and so you want to make sure that the   people you're signing up for have credibly  worked with you and delivered in the past.  I think those two elements are  very powerful because, at Lenovo,   we're actually pivoted to strengthen the  weight and to strengthen the voice of the   business in technology decisions because, for us,  we found it had a very powerful ownership effect.  When it was myself, for example, I sit on our  executive committee. I could see the marked   difference when I would get up by myself to make  a pitch for why our latest project was delivering   value. Then we ran kind of an A/B test. In the next one I said, "Well,   what if we co-present?" Variant one was  when we would co-present, myself and the   business president or the sponsor (about the  impact of technology). That was way better. 

The best part was actually when I just shut up,  and I actually wouldn't speak about it. It would   be the business achieved something really  remarkable that they felt was noteworthy   of discussion or needed to be shared, and  technology was a part of that. That actually   got the best reception over time because then the  rest of the executive committee, the rest of the   company felt we were really committed. I think it's worthwhile for everyone to  

consider running that type of experiment.  What's right for you in your context in   terms of how to get the business buy-in? Michael, I think it's very important.   Those are just some of the tactics  to consider in terms of getting that   business alignment and follow-through. Let me ask you this. Going forward,   as you look into 2023, are there unique  opportunities relating to technology or   relating to opportunities for CIOs and CTOs? The first one that comes to mind is some insight   that kind of shook me a little bit in a positive  way to think differently when I took on the CTO   role for our solution and services group. It  was this: In the CIO role, as an expense or as  

a cost center, you're constantly evaluated on  the efficiency, and are you underrunning your   budget or can you save relative to the budget? If  you spend more than your budget, then you get a   nice call from the finance organization asking  why and will you please go back to the budget.  When I became the CTO, there was a budget, and we  were not spending as much money as was forecast.   And so, I expected to get a congratulatory  call, "Great job! Thank you for underrunning   the budget." Instead,   I got a call, and they said, "What's wrong  with you? Why can't you spend the R&D budget?"  The ah-ha moment for me that was so fascinating  (to think about my own mindset and trying to   figure out, well, how do CIO and CTO roles, and  what's different and not) was it was a mindset   because the company viewed IT as an enabler,  yes, but ultimately, because of the accounting,   it goes under the SG&A line on your P&L. R&D is an expense that's expected to generate   growth. And so, when the company looks at  the R&D (under my CTO management) and says,   "Oh, we're not hitting the targets," they see  that as, "Oh, we're not building the future." 

I think, whether you're a CIO or CTO, one of  the key mindset shifts you can think about is,   "Well, what is the value? How do you think about  this as creating growth to the company?" because   regardless of the accounting and where it falls  on the P&L, if you can sign up and convince a   business leader that the spend – because it's  all technology, right? These are in some sense   accounting distinctions. But ultimately,  we're building and using technology and   software to create capabilities that  we think will empower our customers.  If you can get the business to sign  up for that in the mindset that that's   going to generate near-term, medium-term, or  long-term benefits in growth for the company,   that's a whole new ballgame. I think that's  been a powerful mindset shift for me,  

and it took this kind of joint role to get me  out of, "Well, let me just hit the budget."  It's really, "How do we create value?" Then  it's true. If you find that with the business,   spending more is fine because you're going  to ultimately make more, that's a much easier   discussion than, "Well, please just stay within  the budget because that's how we view you." 

I think it's a little bit of a breakout mindset  that's worth considering, especially, Michael,   as we're starting the new year. New beginnings  and all, I think it's one of my resolutions to   try and carry that forward and to extend  that discussion and mindset with my team.  What can CIOs do in order to be part of that group  that is seen as a driver of growth as opposed to   just an expenditure of corporate resources? One, it's founded on the delivery of value.   Obviously, if you have a lot of remediation  to go do and fix a lot of operational issues,   please go do that because it's the same even in  a well-running IT shop. Whenever something goes   wrong, it's like all of the oxygen in the room  gets sucked over to that. But you get past that. 

Then once you are consistently able to deliver  value, you have credibility. Then with the   credibility, Michael, I think comes the right  to be at the table, to have a voice, and to   be heard as part of the strategic discussions. Then I found that I had the opposite problem and   I'm having the opposite good problem.  Meaning, I get pulled in everywhere.  If I look at the strategic pillars and our  strategic objectives, it's difficult to find one   where my name is not on it because everyone says,  "I need this enablement. I need this capability.  

Please help plug me into the ecosystem. What can I  do with technology? What do you think about this?"  Actually, once people view you as a credible  partner, I think you very quickly find it's the   opposite problem of everyone wants you at the same  time. Again, it's a great problem to have because   I think it reflects the underlying increasing  importance of technology to what the company does.  That says to me there is this real opportunity for  CIOs but it definitely does require a different   mindset, just looking at internal infrastructure  and developing the skills and the relationships,   as you emphasized earlier, with the business  so that you're genuinely responding to their   needs and that IT has the capability  needed in order to respond to those needs   and deliver the value that the business wants. Yes. The other thing, Michael, you just triggered  

another thought. If you're getting started on that  journey or you want to start, I think everyone is   going to be at a slightly different place on their  journey and what makes sense for their company.  You can start small. One of the interesting things  I've observed is you can use competition or kind   of the natural instinct to be competitive in a  good way on this. If you're just getting started,   pick one high-profile project. Pick the  most ready or the most mature business  

group or business sponsor that you want  to work with and make a success there.  When we did that at Lenovo, I could tell, after we  had a good discussion at the executive committee   around the technology. You could see all the  other business leaders. Because our CEO and   chairman became very excited and said, "This  is great," you could tell that all the other   business group leaders said, "Oh, I want to  be like that. How can I be the next person   achieving that sort of success together?" That kind of starts a virtuous cycle, so it's   not that you have to – like the movie Everything  Everywhere All at Once (I think is the title),   because that's very difficult. But I think, one by  one, you can, if you're starting on this journey  

or you want to start on the journey. You don't  have to. You won't suddenly get there in one fell   swoop, but you can absolutely take measured steps  by speaking up, by finding the right partnerships,   and that will give you the credibility on value  delivery that lets you elevate the discussion.  We have another question. Wayne Anderson comes  back, and he says, "With January '23 upon us,   even more jurisdictions have data sovereignty and  privacy obligations. Where has this evolved your   thinking over the last few years, this  issue of data sovereignty and privacy?"  I think it's certainly something that also  is increasing weight in strategic dialog and   conversations. Maybe I'll back up one step on this  because it touches on a broader point, which is,  

this is one of those compliance-oriented items.  Of course, we are all going to comply with the   relevant regulations and laws in all the countries  and jurisdictions in which we do business.  There have been studies that show. I saw  one by Techaisle that was showing basically   three-quarters of IT time is spent just on  operations and keeping the lights on. This is part  

of a trend which, if you're not careful, all your  time just gets sucked into the back-office stuff,   running the business, making sure it's  compliant, tax, accounting, all that stuff.  It's important, but it's not enough  if you want to go back to, Michael,   what you and I were just talking about. If you  want to shape some of the investment discussions,   if you want to be a partner and have a voice  at the table about what technology can do,   if you're spending 70%, 80% of your time  saying, "I don't have the people or the   people I do have are just making the machine  run," that's not a good situation to be in.  That's part of also delivering outcomes. One  of the things that I'm trying to do (and our  

solutions and services group) is let's  deliver outcomes on the basics so that IT   leaders can spend more time on strategic topics. Now, specifically about data sovereignty and data   localization, I think it has really far-reaching  ramifications. Even for us, we've had to think   very differently about the architecture, and we've  rearchitected to be able to accommodate and to   be in compliance with the laws and regulations. If you think about major regulatory regimes around  

the world (including China, the EU, America  – and I think many countries are exploring)   it's going to be a rising tide. We have had  to rearchitect. We've rearchitected our core   systems. We've rearchitected our data  platform. We've rethought data capture.  It's really an ongoing study because these things  are changing constantly. You can't ignore it   because someone is going to come knocking on your  door and say, "Please demonstrate to me how you're   compliant," in the various ways with the China  data privacy law or with CCPA or whatever it is.  Now it's different for the business because we  had to say, "Hey, look. We have to take a pause   here and rearchitect." Now, luckily, because it's  also very high profile in the news, the business  

understands. They see the march of regulation,  and so they say, "Ah, okay. Yeah. Let's make sure   we're on the right side of the law on this,"  and that's a fairly easy discussion to have.  But it is real work to say what you want  to be able to tell the business is, "Okay,   we have an architecture that's extensible."  It's fine if we have to take a delay one   time. But if every time the law changes,  it's minus three months or pushing out the   schedule plus three months, that's not a good  discussion, and so you have to be thoughtful   about how you have the right architecture. Then I think, finally, the good news is there is  

a lot of rhyming. The same way when GDPR came into  force, many people studied it and, we'll say, took   inspiration from it. I think that's of benefit  because then it makes it more likely you can come   up with an architecture that's largely extensible  and reusable. If another country wants to have   data onshore and wants to have data residency,  well, you can use a similar solution rather than   having to cook one up totally from scratch. Those are a couple of angles to think about.  Another question on the planning aspect. How  do you balance the need to make long-term   investments in technology, as you were describing  earlier, with the fact that, as a public company,   you're measured on a quarterly basis? How  do you balance long versus short-term?  You have to have the alignment understanding that  you're in it for the long term. At Lenovo, I'm  

also very lucky in that our chairman and CEO said  (especially now, at a time when we're trying to   optimize expense and rebalance) the one thing that  we remain committed to is doubling our R&D spend.  We're a technology company. We believe technology  will drive the future. And so, we can think about   how to reallocate marketing, how to optimize other  back-end functions, how to optimize and rebalance   sales, but we will continue to be on the path to  double our R&D. From the set and setting for me at   Lenovo, I think the first thing is you'll be more  advantaged if, at the company, there's an implicit   or explicit (in our case) understanding that  technology is the future we're going to invest.  Now, regardless of the set and setting, whether  or not you're at a company like Lenovo that's   going to continue to double down, then it's  about portfolio planning. Again, it's weights. 

I think you don't want to get into the either/or  trap. I think one of the key conjunctions is   "and." We're all being asked to do this. We  want to save money and rebalance and continue   to drive the transformation and run smoothly.  I think, Michael, what you said, the long and  

short and medium terms is an extension of that. Then it just goes back to portfolio planning,   which is to say these things are never black  and white. You should never have to mortgage   your future or sacrifice today. Those are probably  overly simplistic frameworks, and so the portfolio   of initiatives has been a very helpful mental  model, as well as framework, to tell the company,   "Look. We can dial things up and down." If we really want to overweight on short-term   and short-term profitability and efficiency,  then we'll take the portfolio. For example,   instead of 60%, maybe we want that to be 75% this  year. For the very long term and exploratory,  

maybe instead of 10%, it'll be 5% this year. That way I think you can make it explicit on the   tradeoffs you're making to show the shape of that  portfolio as well as the implications. If you say,   "Hey, our exploratory and long-term efforts  we're going to have for the near term," then   it does mean, your innovation pipeline,  you may have a little bit of a hiccup.  To our earlier point, what you don't want to do  is surprise anyone. That's why, the visualization  

of a portfolio, it's a simple two-by-two  or three-by-three where you show timeframe   as well as impact as well as the potential.  You'd have that discussion together so that,   regardless of the choice you make, you can make  sure the company is taking explicit decisions   and understands the implication that it has  for the innovation and the delivery roadmap.  What are some of the KPIs or the metrics that  you use for evaluating your investment decisions?  The first and foremost is going to be financial.  We've evolved this over time because obviously,  

a very important part of this is the business  case to say whatever your metric is. We happen   to use the ROI. Other companies use internal  rate of return (IRR). There are a number of   metrics you can use on the financial side. What we've had to do, in addition to meeting   the hurdle rates on the financial side, we've  had to layer in some additional categories so   that we can capture the nuance. One  of the things I believe you want to—  The nuance, meaning not everything can  be represented strictly by a dollar,   and the world is a bit more nuanced in  that. So, becoming overly financialized I  

think causes bad behavior. We actually saw that. When the ROI was the only thing that mattered on   whether you got a check or an X when you came to  the investment committee, people started making   things up. And so, what we had to do to become  more balanced is we wanted the financial aspect,   which is important but not the only one, is we  started layering in strategic objectives, and we   started layering in other things like regulation. We also layered in   around the technology aspect. Will this contribute  to building blocks (we refer to)? Will this create  

strategic building blocks for the company? This is an area where I think you'll need   a little bit of exploration to see what are the  additional metrics you want to look at. For us,   it's really around, does this make a strategic  contribution? Does it create intellectual   property? Does it create something that we can use  for marketing value? These were things we found.  We're like, "Well, it doesn't have the  short-term return, but there are still   things that we want to do over the long  term." And so, we've introduced additional   avenues to capture things that when we look— Sorry, Michael. Let me back up. Without getting   too much into the weeds, those are some examples. The heuristic here was whenever we found   the outcome from the decision machine, it  felt weird. It's like, "By our metrics,  

it says we shouldn't do this project. But  this feels like something we should do."  We would actually dig deeper to say, "Well,  why is that?" and use that to refine, subtract,   add to our decision framework and metrics. But  the point is, on all the non-financial metrics,   that's where you have to add or subject  and reweight as the business changes.  Again, your process is very oriented towards  achieving the financial metrics and you have   the technology goals, but very, very much  ensuring that you're aligning with what the   business actually needs. I don't mean to put words  in your mouth, but it sounds like you use the   data but you're also not a slave to the data. Yes, that's right. An example, and maybe as  

another metric, we also – and it's not really  a metric but a consideration. I think that's   important holistically on go/no-go decisions for  investments, which is, can we actually execute?  We had a recent example, and just to maybe share  some color on this one, where we said the key is   don't assume money is always the answer. We were  having some challenges where we wanted to improve,   especially over the pandemic when everyone  was struggling with supply chain disruption.  We wanted to continue to protect our ability to  deliver on time and on our commitment because we   found people understood the overall environment.  They were okay with slower delivery times. What   they didn't like was lots of changes. "Is it coming Monday?"  "No." "Tuesday?" 

"No." "Wednesday?"  "No. Next Friday." People got frustrated,   so we wanted to call it once and call it right. Now, in our first iteration, we assumed money   was the problem. So, we said, "Let's just  give a few million dollars." Okay, we need   $2 million to create the new capabilities, to put  it into production, and have the new data models. 

Then we found out that money wasn't the problem.  When we went to check on it a quarter later,   none of the money had been spent because the  teams that were needed had all been pulled   in other places on other priority initiatives. I think it's important to use the data. And you   said it well. You don't want to be a slave,  but you always want to see is it generating  

the right outcome given what you've said. It's important to say not only do we run   decisions through the decision-making model but  that we're also examining the model itself and   how it needs to be tuned and take into account  new factors based on the business dynamics.   I found that to be an interesting example. An interesting comment came in on Twitter from   Jonathan Becker who has been a guest on CXOTalk,  and he's president of the San Jose Sharks.  

In response to your comment about CIOs moving  beyond being a cost center to delivering value,   he says, in strong terms, "Create value; don't  just deliver value." It's an interesting point.  Yeah. Maybe just to build on that for a second,  I think having a CTO role has also been a part   of that, which is, I think the tagline  "Build the future." If we look at what we  

have today on our solution and services  group, and we look at our aspirations,   there is a lot of room on this value creation. Of course, there's the incremental extension,   so going back to what you said about the  short and the long-term. There's plenty   of low-hanging fruit that we're going to go  optimize and build and extend onto the existing   franchises and offerings that we have today. Now, at the same time, I think there's a lot   more room in the medium to longer term to help  figure out what's going to be net new. When we  

talk about what's next generation, what's really  going to be exciting from an experience from   an outcome perspective that we can deliver? I think that's absolutely right. Deliver is,   in some sense, "Here's what we  know. Let's go make that happen."  Create speaks to the possibility. And  so, especially with respect to customers,   the art of the possible is a wonderful discussion  to be had when you're thinking about how can you   deploy technology spend to go build that future. For many CIOs this notion of creating the value as  

opposed to delivering services that add value ties  to innovation and can be very challenging. Any   thoughts on that? At the same time, Lisbeth Shaw  on Twitter is asking more about the distinction   between the CIO and CTO roles. We're about to  run out of time, so I'll ask you to answer this   complex, multi-faceted question pretty quickly. The CIO role is really around delivering and  

transforming the company. The CTO  role is around building the future,   enhancing the portfolio so that we actually  can have exciting offerings to our customers.  What ties them together is the ability to  think about and sense what's in the market.   It's really sitting at the intersection. What's  happening in the marketplace? What are customers   saying? And then what does technology  bring that can create something new?  I think a lot of it is the remixing and the  integration of existing and new technologies in   novel ways applied to the context that you have  in hand. That's ultimately what I think makes   the CIO and CTO roles similar, which is, that's  what you do all day for a living. You think about  

complex business scenarios, and you think about  this vast array of exciting technologies. And   then it's about how you integrate it together  in a way that makes sense for that context.  Within that, I think it's quite empowering  because that commonality is what allows you.   Whether it's delivering value or creating value,  you're just taking different lenses on a core   muscle that I think seasoned technologists  have been building over all these years.  Is there tension for you between these two roles  and the different demands of the two roles? Is   there any type of conflict, would you say? There's definitely tension but in a positive   way. One is on the time. Obviously, having  two hats means having a lot more scope to look  

after. And the other one is, notwithstanding what  I said, it's still important to have an open mind.  I never wanted to assume I can just take the  CIO playbook and deploy it to the CTO. And so,   I'm always trying to figure out what's similar  (because the more things that are similar,   the more I can use what I've already  known to greater effect). And at the   same time, there are new things. We talked about the mindset. We  

talked about some of the much heavier customer  orientation and how you layer that in when you   are directly responsible for building and  delivering something that's consumed in   production by thousands of people around  the world (outside of just the company).   I think there are new elements around that. But I think the good part about that tension   and why it's productive is I think it makes  each role better because the CIO discipline   helps with the CTO. The customer orientation  and the listening and the sensing is helpful  

also bringing that back into the CIO role. I  think there's tension but in a productive way.  Art, as we finish up, any advice for CIOs?  We hear. It's not new to say that CIOs should   be aligned with the business and support the  business. But apparently, it must not be that   easy to do because we're still talking about  it as a challenge. What advice do you have,   therefore, for CIOs for being the creator  of innovation and value as opposed to just   delivering services and goodness? Maybe three points to leave   the viewers and listeners with. The first point is I think listening  

really well is still extremely important  because the first step in building trust   is that you can have a dialog. I've seen too  many people just talk about their projects and   not really meet the business where they are. I think the ability to listen and integrate   that to show that you understand what  the problems are then gives you the   opening to talk about what technology can  do. Otherwise, sometimes that door isn't  

even open. I'd say that would be the first one. The second part is really to speak up and to be   very open in offering ideas and contributing  to the flow of dialog around the executive   and the senior teams because the more people  will see you as having useful ideas that are   relevant to their discussions, the more  they're going to want to come to you.  Then finally, I think you want to be the person  of yes. I think a lot of people think of IT as,   "Oh, they're the people who say, 'No, can't do  that. That's too expensive. That's too risky.'"  You want to enthusiastically say yes and  emphasize, "Here is what we can do together."  I actually went around the executive team to say,  "Let's make this happen," because rather than   analyzing risk all day, why don't we try? Let's  put ourselves in a position to try something new,   to learn, to create that value. I think those are the three points for  

the viewers and the listeners to have in mind. I love that. CIOs should be the people who say   yes. You know that's great and simple advice.  Unfortunately, with that, we are out of time.  I want to say a huge thank you to Arthur Hu.  He is the chief information officer and CTO   at Lenovo. Art, thank you so much for being  here today. I really, really do appreciate it.  Thank you for having me, Michael.  It's great to start the year with you. 

Everybody who watched, thank you as well,  especially to those folks who ask such great   questions. Before you go, please subscribe  to our newsletter and hit the subscribe   button to subscribe to our YouTube channel. Thanks so much, everybody. We have great shows   coming up. Check out and we will  see you again next time. Have a great day.

2023-01-26 22:54

Show Video

Other news