Highlights from our recent Metis Strategy Summit are below. Check out our Youtube channel and Technovation podcast in the coming weeks for recordings of the conversations.
Organizations across industries are moving beyond initial AI experimentation, focusing on driving implementation, proving and measuring ROI, and developing the next generation of talent as they apply AI to a broader number of business challenges.
As multiple executives emphasized, strong data foundations are essential to any successful AI implementation. Marina Bellini, President of Global Business Services at Mars, noted that the hype around AI has led to more focus on ensuring those foundations are in place. “This is the dream of the CIO: that people will actually start working on data quality.”
This year has also seen increased focus on AI’s ability to deliver value. Augment CEO Scott Dietzen said 2024 “is the year where tech teams are looking for proof and return on investment,” something not always clear or easy to measure for software such as Copilot productivity tools.
Organizations are finding new and innovative ways to apply data and AI to business challenges. Royal Caribbean Group CIO Martha Poulter described how the company transformed traditional food service operations into data-driven processes. Initially, “you would order what you thought, cook what you thought, and serve what you thought. It was gut based,” she explained. By measuring proteins before and after cooking and analyzing everything from ordering to de-thawing to waste, Royal Caribbean was able to generate tens of millions in savings while improving sustainability. “You’d never think food can be an AI problem, but it is,” Poulter said.
Similarly, Avis Budget Group is using an AI-based modeling and prediction system to address asset utilization challenges and ensure cars are on the road for the greatest amount of time. Chief Digital & Innovation Officer Ravi Simhambhatla explained how the company is aiming to break through the 70% utilization ceiling for its vehicle fleet. “If you have physical assets that aren’t being utilized, it’s costing the company money,” he said. “We hit this glass ceiling and asked ourselves why can’t we go to 80% or 90%? It turns out it’s data.”
Technology leaders discussed various approaches to managing and organizing AI initiatives across their organizations. A common thread across nearly all of them was the importance of bringing together technology and business leaders to identify valuable use cases and deliver on them faster. NRG’s Chief Data and Technology Officer, Dak Liyanearachchi, talked about establishing a transformation office that bridges data, business, and technology teams. At Berkadia, an AI Council that includes both business partners and technology leaders drives deeper engagement and keeps discussions focused on value, Chief Information and Innovation Officer Damu Bashyam said.
As mentioned throughout the event, these new organizational structures place particular emphasis on modern technology stacks and data practices. Nicholas Parrotta, Chief Digital and Information Officer at HARMAN International, outlined the company’s evolution from infrastructure-as-a-service to data-as-a-service, and using that data to create more personalized experiences on wheels as the world moves toward autonomous vehicles. “We start with how we do the big stuff with architecture, then product, and now data and being able to drive those as revenue and capabilities,” he said.
Capital One CIO Rob Alexander detailed the company’s platform strategy, explaining how the organization built dedicated infrastructure for machine learning, feature engineering, and now generative AI applications. When it comes to AI, he noted that while it’s “easy to get 70% accuracy out of the box, all the work is getting from 70-75% accuracy, which involves training and fine tuning.” Being in a position to leverage AI today has been a 12-year journey for Capital One, Alexander said, one that has included transforming “everything about who we are” to become a successful technology company and a winner in the banking industry.
Leaders emphasized the need for pragmatic approaches to AI implementation. Mastercard CTO Ed McLaughlin noted three questions a review panel considers when evaluating the feasibility of a new AI initiative: “Does it work, is it worth doing, and does it align to our ethics?” If ChatGPT-style search responses are 10 times more expensive than traditional methods, for example, the question then is whether they can deliver 12 times more value or be that much more useful. McLaughlin underscored the need to assess both the right way to solve a particular problem and whether there are returns on the work being done.
Dietzen added that NPS and engineer satisfaction can also be indicative of value. “If you make engineers delighted, you’ll tend to do well in your organization,” he said.
Chris Davis, Partner and West Coast Office Lead at Metis Strategy, advises technology leaders to ensure that there is product management in every layer of the AI stack, including the application of AI to business processes, the marketplace of horizontal and reusable capabilities across use cases, and underlying foundational models and model development. Business value should be measured relative to components of the stack, especially with generative AI, Davis said.
Effective product management requires teams across the organization to sharpen their product mindset. Cigna’s Chief Digital & Analytics Officer Katya Andresen outlined three elements of that product mindset: identifying real problems for real users, validating through testing and learning, and unlocking value. She cautioned against common pitfalls like “death by a thousand pilots,” in which proofs of concept pile up and eventually become unmanageable. Organizational silos can present a challenge. “We find a lot of opportunities to streamline operations, but there has to be a really deep partnership across tech and ops,” she said. Otherwise, “tech gets upset that ops don’t use their products and ops says well what you gave us didn’t solve our problem.”
Organizations are rethinking their talent development strategies as the landscape evolves. That involves both upskilling internal talent and expanding talent pools across geographies. Land O’Lakes CTO Teddy Bekele described moving from a roughly 50-50 mix of in-house and external talent to a model in which contractors and third parties make up a more significant portion of the talent pool, taking on much of the development work while in-house employees lead the teams. The approach allows for increased flexibility in team sizes depending on shifting enterprise needs. The change was driven by three key factors: accessing expertise, maintaining flexibility to scale teams up or down, and increasing nimbleness.
Upskilling also remains a key focus. At FINRA, Chief Technology Engineering Officer Tigran Khrimian’s team is teaching developers generative AI skills and has seen demonstrable success with using natural language prompting to create “good code” for the company. “Developers with code assistant tools will replace developers who don’t use them,” he said.
Corning’s Chief Digital and Information Officer Soumya Seetharam detailed the company’s three-pronged approach to talent development: creating strategic digital and IT hubs around the world to ensure global talent access; launching a digital literacy program with dedicated “revitalization days” for learning rather than meetings; and expanding the talent pipeline through technology internship and rotational development programs globally. “In the future every person for every function will have some technology in their background,” she predicted.
Technology leadership roles are undergoing significant transformation, reflecting the strategic importance of technology in business operations. According to Katie Graham Shannon, global head of the Digital and Technology Officers Practice at Heidrick & Struggles, the traditional CIO title is becoming less common. Of 23 recent technology leader placements at Fortune 200 companies,18 did not have the CIO title, and 52% were newly created positions with expanded roles. She noted that there is also a shift in reporting structures, with more CIOs reporting to the CEO, and a greater focus on technology leaders’ ability to create and protect value and attract talent, among other responsibilities.
“If we could use the title ‘orchestrator’ it would make more sense,” Shannon added, explaining that today’s technology leaders create value and orchestrate initiatives across the entire C-suite. This expanded scope includes both customer-facing initiatives and internal operational efficiencies with “equal pressure and emphasis” in both areas.
The role is also becoming more business-oriented, particularly in relation to managing technologies like AI. “A properly formatted conversation about AI is not a tech conversation, it’s a business conversation,” observed Henry Man, Co-Founder and Managing Partner at Candela Search. This presents an opportunity for technology leaders to “have a seat at the table” when business colleagues might lean out of technical discussions.
That expanded purview extends to technology leaders on boards or seeking director positions. “There’s no market for a one-issue board member,” said Art Hopkins, who leads the Technology Officers Practice at Russell Reynolds. “You need to show business acumen and a P&L. Go to the CEO and say I’d like to be the executive sponsor of this new incubator. This is a solid step in that direction.”
This article was written by Leila Shaban, Research Associate at Metis Strategy
Thank you to everyone who attended and participated in the 17th Metis Strategy Digital Symposium. Highlights from the event are below. Check out Metis Strategy’s Youtube channel and Technovation podcast in the coming weeks for recordings of each conversation.
Companies continue to make progress in their AI journeys, deploying the technology to drive efficiency, productivity and innovation. Technology leaders are focused now on driving adoption, generating buy-in for new initiatives, and rolling out new training programs to ensure teams across the enterprise are able to take advantage of what AI has to offer. Below are a few highlights from the event:
Building a foundation for AI at scale
Nearly all CIOs on stage said scalable infrastructure and high-quality, accessible data are key to driving value from AI initiatives. Over the past few years, many organizations have focused on building data platforms, shifting to cloud and rethinking ways of working in order to deliver AI at scale. “Having a really good data infrastructure is foundational to taking advantage of any of these generative AI capabilities,” Priceline CTO Marty Brodbeck said. Many speakers noted their current efforts to get reliable data into the hands of more teams across their organizations.
Nearly half of MSDS attendees said that the rapid evolution of AI, among other macro issues, will have the biggest impact on their organizations in the year ahead
Exploring new use cases
Many organizations continue to train generative AI on internal knowledge bases to streamline processes and enable more self service. CIOs also see potential around developer productivity.
Bristol Myers Squibb receives thousands of calls from physicians and nurse practitioners each day requesting information about specific, often technical, topics, Chief Digital and Technology Officer Greg Meyers said. MDs on the other side of the call often find those answers in internal documents. Now, an AI chatbot trained on the company’s knowledge base can search through the documents to retrieve answers to these questions much faster. With enough fine tuning, Meyers noted the chatbot could constrain search results to trusted documents and help agents provide near-immediate answers to customer queries.
At UPS, Chief Digital and Technology Officer Bala Subramanian recently launched an internal AI tool for email which can process the tens of thousands of customer emails UPS receives on a daily basis, connect relevant information across internal policies and procedures, and generate responses for contact center employees. This ultimately improves worker productivity and reduces response time. UPS also launched an AI chatbot to help employees answer HR questions. Subramanian noted that the company is proceeding slowly due to the sensitive information and personal data in HR systems, and emphasized the critical role of risk management and governance.
At AstraZeneca, AI is significantly reducing the amount of time it takes to conduct research. Cindy Hoots, Chief Digital and Information Officer, described a generative AI-enabled research assistant that quickly searches both internal and external data to answer complex scientific questions. The assistant has helped reduce the time it takes to conduct a literature review from months to minutes, she said. Hoots is now focused on scaling AI adoption. About 15,000 employees use the research assistant, she said, while roughly 5,000 use Copilot solutions and almost 80,000 have access to AstraZeneca’s internal ChatGPT.
At KB Home, employees evaluate a number land deals across 35 markets every week. Aggregating property data from different sources to determine whether to make an acquisition used to take 30-90 days, CIO Greg Moore said. With AI, KB Home can now complete the process in less than two weeks. The faster turnaround now enables the company to make more evaluations and manage more potential deals in the pipeline.
Developer productivity is another area of rapid experimentation. Many of the tools offered by major vendors are in their early days and have room to grow, said Brodbeck of Priceline. The team is exploring solutions that can learn from Priceline’s codebase and provide a richer and more contextual experience. Whether for code generation or another use case, Brodbeck said companies will likely need to deploy retrieval-augmented generation (RAG) to deliver more productivity.
At Augment, CEO Scott Dietzen is thinking about how to retrieve knowledge from internal codebases in a way that protects intellectual property and reduces the risk of leaking sensitive information. The team started with basic engineering tasks that can make developers more productive rather than trying to replace them altogether. Demand for these kinds of tools will last for at least a decade as organizations produce more software, Dietzen said.
The top use cases for digital assistants/copilots that are driving the most value for MSDS attendees are code generation, self-service chatbots, and enterprise search/knowledge management
Bringing the organization along on the AI journey
To drive a common understanding and widespread adoption of AI, CIOs have increased their focus on storytelling and talent development.
At Wilson Sonsini, Chief Information Officer Michael Lucas is focused on cascading AI communications across the firm. His team started with a general awareness campaign. That included employee town halls to communicate the broader strategy as well as AI-centric briefings to partners. Given the sea of media coverage about AI, Lucas encouraged leaders to develop their own elevator pitch to help their organizations clearly understand the company’s AI strategy. Driving a common understanding across the firm is key to driving adoption. “We feel like we need to learn, understand, enrich, and then apply and operationalize,” Lucas said.
At Liberty Mutual, Global Chief Information Officer Monica Caldas is delivering customized employee training and connecting it to the company’s capacity demands across 27 countries. It’s part of a workforce strategy plan called “skills to fuel our future.” First, the company surveyed more than 5,000 employees to determine their skill level around topics like data, data engineering and software engineering. Next, the company mapped over 150 skills, connected them to 18 domains, and assessed how and where to invest in training.
Now, Caldas and her team are helping employees apply that training to a variety of career paths. Instead of a traditional career development ladder, Liberty Mutual is evaluating how to map skills to different jobs and create a “jungle gym” or “lattice of opportunities.” The focus on specific skills, Caldas said, “will help you position your capabilities as a tech organization not just for today, but also plan out where it’s going.”
Education at the executive level is also critical. To bring executives along on the journey, Caldas introduced a program called Executech that helps improve organizational data literacy and elevates the digital IQ of decision makers. Enhancing teams’ tech acumen gives leaders the confidence to start conversations early about important technology topics like API integration.
AI adoption may not be uniform, and there is still lots to learn about how it will impact specific roles. At Eli Lilly, employees who have incorporated AI tools into their workflow are reluctant to give them up, said Diogo Rau, Chief Information and Digital Officer. However, widespread adoption is a continuous and sometimes challenging process, “a lot harder than anyone would guess,” Rau said.
Rau often gets more questions about the risks of AI than how it can be used to improve products and services. Another challenge is that teams excited about creating AI bots aren’t always excited about maintaining or training them. “There are lots of good firefighters, but not every firefighter wants to be a fire inspector,” he said.
62% of technology executives who attended the Metis Strategy Digital Symposium anticipate that the most significant impact that AI will have on talent is increased productivity
Leveraging ecosystem partners
Achieving the transformative potential of generative AI will require collaborating with networks of vendors, startups, peers, and academics. In addition to providing technology solutions, these ecosystem partners can help upskill employees, explore emerging challenges, and prototype new use cases.
Amir Kazmi, Chief Information and Digital Officer at WestRock, draws learnings from both established technology partners and startups. He also brings in academics and peers from other companies to share wins and lessons learned about generative AI.
Regal Rexnord’s Tim Dickson, Chief Digital and Information Officer, uses hackathons and internal events with vendor partners to increase the company’s digital IQ. The company also offers self-paced training from about 10 partners that includes pathways to certification. In the past seven months, more than 100 employees have received training on GenAI fundamentals from Databricks and robotic process automation from UiPath, as well as certifications from Microsoft Copilot. Even if employees don’t use these tools every day, increasing the number of people with technical skills means more individuals “can at least help, or even lead, these initiatives across the organization,” Dickson said.
CommScope CIO Praveen Jonnala, like many other technology executives, is thinking about how to drive a cultural shift around AI. He spends about 80% of his time on organizational change management and culture. He is also leaning into existing partnerships to take advantage of new AI solutions and educate teams. For example, he took business teams to Microsoft for a full day to learn more about the technology and its ability to unlock new business opportunities.
Thank you to everyone who attended and participated in the 16th Metis Strategy Digital Symposium. Highlights from the event are below. If you missed the event, check out Metis Strategy’s Youtube channel and Technovation podcast in the coming weeks for recordings of each conversation.
Our next event will take place May 21. More details and an agenda coming soon. CXOs, are you interested in attending? If so, kindly register here. We look forward to seeing you!
The COVID-19 pandemic, global supply chain challenges and the broad resurgence of artificial intelligence created a sense of urgency among many technology leaders to modernize and improve their organizations’ digital capabilities. Today, many companies are beginning to see the results of those investments and talking about the strategic ways technology can continue to enable innovation and resilience. Tech leaders recognize the importance of playing both offense and defense as they continue to navigate an uncertain business landscape, and the continued need to align talent and business strategies as they plan for future growth.
Investing in resilience
Some leaders outside IT may argue that there is never a good time to invest in IT. But given how quickly the competitive landscape is changing, organizations can’t afford to pause. For CIOs, a question is where – and when – to make those strategic investments.
“It’s much more beneficial to invest in a downturn than in an upcycle,” said Gates Corporation CIO Diego Silva. During a downturn, there is more capacity and willingness for people to drive change, put new skills into practice, and move projects forward. The greater acceptance for change gives companies the opportunity to drive productivity and resilience, and ultimately put them in a position of strength when the next upswing comes around.
Indeed, many organizations took advantage of time during the pandemic to invest in digital capabilities. When the world was in “shutdown mode,” Sunbelt Rentals Chief Digital & Technology Officer JP Saini invested in the organization’s omnichannel retail capabilities, talent development, new innovation models, and other initiatives to strengthen the resilience and adaptability of the enterprise. As Metis Strategy partner Chris Davis notes: “Businesses are cyclical, but progress and innovation don’t have to be.”
MSDS attendees shared that the biggest barriers to advancing and maintaining digital capabilities are legacy operating models and legacy infrastructure
Managing both offense and defense
True transformation means not just building innovative products and services but also ensuring that all the processes that support those innovations are running as they should. For CIOs, that means playing both offense and defense well.
At pharmaceutical firm GSK, innovation has long been a core competency. As leaders discussed transforming parts of the organization, there was growing recognition that the company had to balance playing offense and defense, playing to win rather than “playing not to lose.” Offense includes those digital and data capabilities at the core of a company’s strategy, while defense-oriented activities may focus on areas like responsible AI and cybersecurity. It becomes a virtuous cycle, GSK Chief Digital & Technology Officer Shobie Ramakrishnan said. “Defense in service of the offense becomes important.”
Tech modernization is another area where offense and defense must be balanced. As Grainger CTO Jonny LeRoy noted, organizations that have been early adopters have a duty to tend to the IT garden over time, “to keep the weeds out.” Putting that into practice, Grainger is focused on the mechanics of how it grows, using its understanding of processes like customer acquisition and inventory management to guide the continuous development of its systems and solutions. Meanwhile, Grainger keeps an eye on the horizon and experiments with new technology as it comes so it can be ready for what’s next.
Continuously improving
Responding to a fast-changing market requires organizations to deploy new capabilities quickly and pivot when necessary. That requires a mindset of continuous improvement and a constant search for opportunities to align people, process and technology toward a common outcome.
Consider a zero-day cybersecurity vulnerability, one that takes advantage of an unknown or unaddressed issue and needs to be fixed immediately. Jen Felch, Chief Digital Officer and CIO at Dell, said the best way to be prepared is “not only to take care of it early, but figure out how to get fast.” While some may view behavior or process change as antithetical to speed, the efforts to make those changes and continuously improve can be major levers to increase speed and efficiency.
Felch recognizes the desire for continuous improvement among teams as well, not only to build skills but also to see the results of their work. Rapid experimentation cycles have helped, she said: “let’s see what we can do in two weeks and build on that and see how it goes.” Giving appropriate context, bringing in knowledge from across the organization, and encouraging a test-and-learn mindset can also drive empowerment across teams. On the process side, constantly improving data quality, information retrieval methods and learning opportunities have also aided progress.
The top talent efforts that technology executives are focused on to advance AI are widespread education/upskilling and scaling AI-based productivity tools
Adopting new ways of working
Technology leaders are also adapting their talent strategies to better suit their strategic goals. Barry Perkins, COO at Zurich North America, noted that having a majority of technology employees in India limited productivity and agility. Noting “ABCD” – AI, Big Data, Cyber, and Development – as four critical digital capabilities, the company has begun to reassess its talent strategy, including which roles should be closer to headquarters. “We can’t have agility if we’re having conversations thousands of miles away with different time zones,” he said. “It’s much easier side by side.”
Effective talent management also requires leaders to inspire teams about the organization’s future vision and help team members see their place in the plan. As Brinks Inc. CIO Neelu Sethi said, transformation of any sort is less about technology and more about people. She is working to create a true “three-legged stool” of people, process and technology rather than letting a single element be the focus.She also reiterated the need for true collaboration. “You cannot whistle a symphony,” she said. “It takes an orchestra.”
At Travelers, preparing talent for large-scale change has involved a focus on four areas: Customer First; Empower and Act; Test and Learn; and Prioritize. Chief Technology and Operations Officer Mojgan Lefebvre also emphasized the need for effective communication to drive trust and accountability through transparency. “People want to play a role,” she said. “Bringing them along and giving them that capability is important.”
A majority of MSDS participants are either experimenting with Copilots or other generative AI tools to enhance software developer productivity or scaling the adoption of these tools
Advancing generative AI adoption
Naturally, artificial intelligence continues to be a priority in 2024. After a year of initial exploration and education, many organizations are ramping up AI experiments and seeing ways to expand AI across the enterprise. Underpinning all of this exploration is a focus on value delivery and safety.
GSK established an AI policy and set up an AI governance council five years ago when the organization decided to scale AI across the company. Now, Ramakrishnan is thinking about additional risks around adoption and procurement to ensure AI can scale. Similarly, Travelers many years ago set up an AI accelerator team to explore potential use cases and create a framework for responsible AI use. Now, they are prioritizing a handful of use cases and in the process of scaling them across the organization.
“Generative AI is top of mind for every executive to accelerate their workforce and accelerate the products of the business,” said Varun Mohan, CEO & Co-Founder of Codeium. In a poll, participants said the biggest benefit to AI and generative AI adoption is increased productivity (67%), followed by improved products and services (17%). When it comes to advancing AI, 40% of attendees said talent efforts are focused on scaling AI-based productivity tools.
Around two-thirds of respondents see increased productivity as the biggest benefit to AI/generative AI adoption
Many speakers said they are currently using AI for use cases such as developer productivity and internal process automation. A key outcome: speed. “The more we eliminate the drudgery from the process, the more we can start to deliver value,” said Jen Felch of Dell. At Travelers, Levebvre’s team is exploring how generative AI can be an assistant or collaborator, such as quickly searching through and summarizing documents or helping team members access needed information. The company is also exploring how AI can be used to improve job descriptions and recruiting processes. Lefebvre noted that while many of their use cases are internally focused, they want to be able to scale the technology and “make it good before turning it around with customers” as there is also a lot of external value to capture.
At Grainger, LeRoy’s teams are experimenting with generative AI in technology (coding assistants) as well as customer service. Through internal hackathons, the technology team developed tools that are boosting employee productivity and allowing them to do more with a constrained budget. As use of these tools continues to scale, financial management becomes an important factor, LeRoy said. “Some of that is selecting the right model with the right capability level that’s not overly expensive, and managing how much information you put into them.”
Our next event will take place May 21. If you are a CXO and interested in attending, please register here.
Thank you to everyone who attended and participated in the 14th Metis Strategy Digital Symposium. Highlights from the event are below. Stay tuned to the Metis Strategy Youtube channel and Technovation podcast in the coming weeks for recordings of individual panel discussions. We look forward to hosting the next Metis Strategy Digital Symposium in December – more details to come soon.
As generative AI continues to flood the headlines, technology and digital leaders are busy discerning hype from reality and exploring use cases that can deliver tangible value across their organizations.
While many companies have used AI in their operations for a while, the rapid rise of generative AI has drawn outsized attention from colleagues well outside the IT department. As a result, many CIOs and their peers have turned their focus toward the tools, processes, and skills needed to take advantage of the emerging technology at scale. Tech leaders are also honing their storytelling skills as they paint a picture for colleagues and customers of how AI-based technologies can drive growth and deliver new, value-added experiences.
In conversations with technology leaders across a variety of industries, we have found that those most successful in their AI endeavors so far are driving excellence across four overlapping workstreams: educate, explore, experiment, and expand. The speakers at this year’s Symposium were no exception. In order to prepare their organizations for an AI-driven future, they noted the following priorities:
Building cross-functional AI teams
Many organizations are taking an interdepartmental approach to developing AI strategies, bringing together stakeholders from across the business to prioritize use cases, build solutions and lead change management.
At Total Quality Logistics, CIO Ryan Kean built a Center of Excellence with 12 people across business units to evaluate new automation use cases, assessing whether or not to develop them based on expected value, tangible benchmarks, and reusability across the enterprise. Kean noted that while a decentralized approach may work for some organizations, it could lead to chaos in others if citizen development happens in silos. At TQL, the CoE model has helped to ensure proper governance, monitoring and development of new solutions.
Similarly, at real estate giant Cushman & Wakefield, Chief Digital and Information Officer Salumeh Companieh’s team has developed an AI task force that includes members from departments including cybersecurity, legal and procurement, to name a few. The task force has developed a standardized process that is helping CBRE actively review 200 use cases globally, delivering necessary governance while focusing on driving client value, market differentiation, and delivering unique insights.
Measuring customer and employee experiences
Speakers noted the critical role advanced AI tools can play in enhancing the digital experience for customers, but emphasized the need for a quality data foundation and clear measures to ensure progress is made.
Keeping customers and employees front and center will be key to enabling increased value and competitive differentiation with AI. To do that, technology leaders must continue to measure and assess progress on these initiatives regularly. DXC Technology CIO Kristie Grinnell conducts both employee NPS and external NPS surveys to measure whether her department is providing the tools and data that create frictionless experiences across the board, noting that both of those measurements should go up as the digitization journey continues. Grinnell also uses sentiment analysis to understand how employees are feeling and uses that feedback to guide employee experience initiatives. She noted that embracing accountability and ownership for specific services over the past years has helped push internal NPS scores from the low 20s to the mid 30s.
The most insightful methods that leaders use to gauge internal and external customer satisfaction and experience are Net Promoter Score (NPS/eNPS) and Customer Sentiment Analysis
At the Home Depot, CIO Fahim Siddiqui noted the virtuous cycle between great employee experience and customer experience: “If you take care of your associates, they will take care of your customers, and everything else takes care of itself.” To ensure that he is providing the right digital features and capabilities, Siddiqui provided all 400,000 customer-facing associates with a handheld device that connects them to the data and insights they need to help customers throughout the network. He also noted that this process sometimes involves interacting with a generative AI model that provides natural language responses to associate queries. Siddiqui noted that employee engagement has reached its highest level, and positive leadership behaviors are also on the rise.
Driving strategic automation
Generative AI tools have created new opportunities to automate and enhance a range of business processes. It is shifting the conversation around automation from one solely of efficiency to one of organizational effectiveness and growth.
One of the quickest ways that technology leaders have unlocked value for their customers and employees is training chatbots on company knowledge bases, ultimately reducing the time it takes to access critical information, answering queries in an easy to understand way, summarizing documents, and enhancing internal search and support. During peak tax season, Intuit employs 20,000 employees to provide advice to customers, resulting in 25 million conversations between customer agents and customers. To extract insights from these conversations and increase agent productivity, CIO Rajan Kumar has been employing AI/ML to provide automatic responses. Kumar’s team is now exploring and implementing a similar chatbot and user interface to provide support for internal employees around IT help desk, HR and procurement questions related to the employee experience.
The top generative AI use cases that MSDS attendees are prioritizing are answering customer queries, summarizing documents, and enhanced internal search/support
Driven by accelerated customer expectations, KeyBank developed a virtual assistant, called MyKey, to connect customers to the contact center and intelligently route support questions to staff faster and more intuitively. CIO Amy Brady has already seen value realized from these digitization efforts, including improved revenue, delivering more to clients with self-service, and improving the job of support agents while reducing turnover in support centers. She shared how improving the agent experience reduced uncertainty around automation. “We can be aspirational and get people engaged, driven by the impact,” she said.
Evolving their approaches to talent development
The rapid rise of generative AI has reignited conversations about how technology will change the way we work. It’s early days, but it’s becoming clearer that successful enterprise adoption will require not just new tools and processes, but also new skills and mindsets. Because generative AI doesn’t require users to know how to code, and doesn’t always require technical experts to drive these applications, the talent paradigm is changing. The shift is prompting technology leaders to reassess talent strategies and the skillsets required to prepare companies to be future ready.
Frustrated with many existing corporate education tools, Mars Global Vice President Shubham Mehrish and his team set about rewriting the playbook to create a more digitally savvy workforce. Mehrish is focused on education at every level of the organization, both top-down and bottom-up, and uses a range of educational and storytelling approaches to communicate with different stakeholders. The rise of AI is also prompting him to think differently about what he is looking for in technologists. Some of the key traits that he believes will mark successful candidates moving forward include curiosity, collaboration, and experimentation.
About one third of MSDS participants said that they are focused on general awareness and basic education in their AI talent development programs
Paramount CIO Lakshman Nathan reflected on the possibility that many companies won’t necessarily need data science or machine learning experts to drive AI applications, changing the way he approaches talent strategy. He is also working to increase general awareness of AI across the organization, including re-educating teams on technologies and processes that already exist inside the organization. “Business users are technologists now,” Nathan said. To increase general AI awareness, Nathan’s team set up a central site for everyone at the company to understand the AI process and get on the same page. The effort is collaborative across security, privacy, and technology teams to evaluate and expedite best use cases.
Aligning AI initiatives to business strategies
In order to generate the best value out of AI, technology leaders have to take a strategic approach aligned to business strategy. While there are many potential use cases for AI, technology departments are in a key position to assess the current and future state of AI-enhanced organizations tailored to specific business goals and industry requirements.
Assessing the best AI strategies to generate value requires thinking about the overall ecosystem and value chain. At NRG Energy, Chief Data and Technology Officer Dak Liyanearachchi is having the Data organization and the IT organization pull data together to focus more on the cost-benefit analysis: “will it generate the value we want?” At the same time, Liyanearachchi is evaluating the role that AI and generative AI will play in shaping the energy industry. He said that AI and technology enables his teams to focus more on the demand side of the energy grid and drives services to create better transparency around energy consumption for customers and households.
CIOs have to make sure they have the basics down before investing in new transformation. To prepare for tackling generative AI strategy and change management, Western Digital’s CIO Sesh Tirumala is looking at two buckets: perform and transform. He emphasized that leaders “get the keys to have a transformational agenda only if you are doing a good job in your perform.” After aligning on the fundamentals and the forecasting view, leaders can prepare their organization to be data-driven with action- and decision-making moving forward. “We don’t just manage for today and yesterday, but align on where we need to be [in terms of] talent strategy, outsourcing strategy, and IP […] to think about the problems of the future. How do you prepare and inspire the organization to look 3-5 years out?”
The majority of respondents at the Metis Strategy Digital Symposium indicated that they are either developing/defining AI strategy or implementing AI strategy across some teams
Thank you to everyone who attended and participated in the 13th Metis Strategy Digital Symposium. As 2023 approaches the halfway point, leaders convened to discuss the rapidly changing economic, technological and geopolitical landscape and its impact on strategy in the months ahead.
Highlights from the event are below. Stay tuned to the Metis Strategy Youtube channel and Technovation podcast in the coming weeks for recordings of individual panel discussions.
As tensions continue to escalate around the world, technology leaders must understand and prepare for new geopolitical dynamics. Jared Cohen, Co-Head of the Office of Applied Innovation and President of Global Affairs at Goldman Sachs, argued that the notion of hyperglobalization ended before the COVID pandemic and that the world now faces a reorientation of supply chains and capital flows.
Technology executives are playing close attention to changing value chains and alliances. “Technology is changing geopolitics, and geopolitics is changing technology,” said Cohen. One of the biggest areas where technology is currently influencing geopolitics is in the area of generative AI, which Cohen dubbed as the “most disruptive experiment in anarchy” since the internet. He warned about the risk of people deploying large language models for “bad use cases” to cause real problems in international systems. While there is significant discussion around which companies have superior large language models, he noted a desire for the conversation to focus more on the implications of generative AI for the world.
George Lee, another Co-Head of the Applied Innovation Office at Goldman Sachs, said generative AI is dominating discussions with boards and management teams around the world. While its rapid growth offers many fascinating possibilities, it has also disturbed the human desire for order and linearity. Lee noted how creators are being constantly surprised as the emerging technology develops. “Anyone who tells you they know where this is going, how fast it’s going, and what our destination is, is just wrong.”
While conversations around generative AI have taken the world by storm, technology leaders today play a key role in translating the hype into reality. That means not only vetting new use cases for the technology, but also educating their teams about the benefits and risks of generative AI and creating policies that encourage innovation while ensuring responsible use.
“It takes courage to take a step back and say, maybe let’s not fall into the hype, let’s go about this in a methodical way,” said Digi-Key Electronics CIO Ramesh Babu. Babu created a community of practice around AI that includes stakeholders from across the organization and a list of key terms with consistent definitions to keep everyone on the same page. He also created a network of influencers within the company that serve as “education ambassadors” for the organization.
Allen Smith, CIO at Baker Tilly, recommended leaders approach generative AI like they would any other technology. “There is a difference between home runs and singles. Singles in this case are your front. Go do something, show it, have a tangible example,” he said. “Now, it can be used to fuel the really good ideas.” He also expressed concerns about the security and privacy risks that generative AI poses, noting the dangers that may arise from inputting sensitive data into services like ChatGPT and the need to identify and mitigate potential bias.
As companies continue to navigate an increasingly complex and competitive landscape alongside shifting customer demands, innovation will be a key source of differentiation for industry leaders. Many organizations find that design thinking frameworks help to formulate the strategy and direction that will help ensure they can harness that innovation effectively.
Michael Newcity, Chief Innovation Officer at ArcBest and President of ArcBest Technologies, highlighted the importance of empathy and deep listening to uncover unsaid user needs. To advance design thinking, Newcity has sponsors responsible for thinking through ROI, teams, timing, and other tactical factors that will help gain executive sponsorship and drive innovation initiatives forward.
Rob Krugman, Chief Digital Officer at Broadridge Financial Solutions, discussed the importance of understanding the value proposition for their customers’ customers, then working backwards to deliver value for Broadridge clients. “If we can solve the needs of that end customer, our client’s customer, the likelihood of us being correct is more likely than not,” he said. Across the ecosystem, “we’re all generating value, and we have a much better understanding of how to actually present and tell that story around value.” His team also works with the VC community to stay on top of emerging technologies and asks hypothetical questions to try and understand their impact on Broadridge.
Krugman laid out two different types of innovation: sustainable innovation, led by the product organization, and disruptive innovation. The key to both: “iteration, iteration, iteration, all based on validation.”
No matter the scope of a change initiative, whether adopting an emerging technology or implementing agile ways of working, leaders must act as role models for change within their companies and drive cultural transformation from the top down.
Hyatt Hotel Corporation’s CIO Eben Hewitt, who is working to nurture a product mindset and drive enterprise-wide behavior change, said engagement starts with the CEO and executive board. “When you see a boss acting that way, then you act that way,” he said. “You have to model it.” Hyatt also uses a “people playbook” to easily guide teams to resources they need for specific use cases, and Hewitt has encouraged the development of high-level cultural principles that inform behaviors throughout the organization.
Ultimately, culture is the most important driver of any organizational change. While many are familiar with Peter Drucker’s quote,“culture eats strategy for breakfast,” Ascension Chief Digital Officer Rajan Mohan added that “culture eats transformation for lunch.” At Ascension, Mohan has helped lead a transformation that includes a digital product orientation, end-to-end accountability and a focus on Ascension’s mission to reach underserved communities. With that shift has come a new mindset, as well as metrics that are more closely tied to business outcomes. “We’re not just measuring for measurement’s sake,” he said. “It is to demonstrate and deliver continuous value.”
Kathy Kay, CIO at Principal Financial Group, said driving cultural change requires leaders first and foremost to be their authentic selves. That includes a willingness to be vulnerable. “If you can’t show vulnerability…I think it sets a tone for people feeling less open,” she said. In addition to bringing that openness to her role, she works with peers at Principal to ensure leaders are giving teams necessary support, removing blockers, and helping them understand how their contributions matter. Kay also discussed the importance of adapting communications to local norms, particularly when working with teams across the globe.
Building a high-performance culture is of course linked to finding and developing the best talent. World Fuel Services CIO Josh McLean said some of the best people typically look for three things in their work: aspirational goals that give a sense of purpose; challenging work that helps them learn and grow; and being surrounded by other highly talented people. “I try to make sure those things are all present and in harmony, or a work in progress to get there.”
Thank you to everyone who attended and participated in the 12th Metis Strategy Digital Symposium. As access to AI and other technologies becomes increasingly ubiquitous, CIOs and their peers are working closer than ever with peers across the organization to develop technology-led products and services. Leaders continue to explore emerging technologies like ChatGPT while connecting digital initiatives to clear and measurable business value. Amid a backdrop of cybersecurity challenges and economic uncertainty, leaders remain focused on developing both new and existing talent and leveraging analytics to better serve customers.
Highlights from the event are below. Stay tuned to the Metis Strategy Youtube channel and Technovation podcast in the coming weeks for recordings of individual panel discussions. In the meantime, click here to request an invitation for our next virtual event on May 11, 2023.
Among the discussion topics at February’s Digital Symposium:
Working backward from the customer and proving the value of technology investmentsTechnology leaders balance a portfolio of priorities and initiatives that have the potential to transform their companies. As artificial intelligence and other technologies evolve, executives are finding use cases that deliver value quickly in order to build momentum and secure long-term technology investment.
At clothing company Levi Strauss & Co., Chief Global Strategy & Artificial Intelligence Officer Katia Walsh sees cutting-edge technology as a way to maintain a competitive advantage. The starting point for any AI investment, Walsh said, is improving the customer experience. “If customers do not feel the impact of investment in AI, then it’s not worth doing.” After defining a strategy for AI, she noted that leaders must simultaneously establish the people, process, data, and technology building blocks necessary to execute on that strategy while delivering tangible business value. “It is absolutely essential that anyone embarking on this today delivers value immediately.”
Doing so requires engineers and others in IT to develop a strong business understanding, an increased commitment to customers, and a focus on business outcomes. To drive what he calls the biggest cultural shift at the organization, Goldman Sachs CIO Marco Argenti has implemented practices that require teams to work backwards from the customer when developing new solutions, thinking from both a technology and a product management standpoint to better understand what customers want. “The trick is to measure technology with business KPIs, because at the end of the day it’s all about outcomes,” Argenti said.
Upskilling talent and diversifying employee skill sets
As organizations continue to navigate ongoing social, economic, and geopolitical changes, technology leaders are seeking new opportunities to supercharge their talent strategies and prepare teams for whatever lies ahead. TIAA’s Chief Information and Client Services Officer, Sastry Durvasula, underscored the need to provide cross-functional opportunities for people to apply their strengths across the business while learning new technical and leadership skills. Durvasula launched internal gigs where employees can “major” in their current role, like analytics, and “minor” in a different role, such as cybersecurity. Giving individuals exposure to multiple fields creates a more skilled and flexible talent base and better prepares both individuals and the organization for the future.
As Oshkosh Corporation continued to enhance its data-rich culture, CIO Anupam Khare recognized the critical role talent would play in ensuring a successful pivot. However, like many other technology organizations, Khare had to contend with a shortage of data science talent. He decided to take a homegrown approach, identifying opportunities to develop internal talent within the organization. He recalled a member of Oshkosh’s legal team who was passionate about data, went through training, and is now one of the best data scientists at Oshkosh. Khare also brought data science education to the leadership level and received support from the CEO around creating digitally savvy leaders.
Exploring the potential use cases and threats of ChatGPT and generative AI
Over the past several months, ChatGPT has taken the world by storm, amassing millions of users globally and sparking conversations about how this new phase of generative AI can be used to unlock new business opportunities and create new products and services. It also means the demand for AI applications is growing significantly outside the IT department. George Brady, CIO at loanDepot, said loan officers are “experimenting like crazy with ChatGPT,” using the service to lower barriers for first-time homebuyers and provide more education to customers before they have their first conversation with a mortgage officer, thereby driving better engagement, decisions, and outcomes.
At the same time, this next phase of AI may present a number of risks. “A lot of us are in a position where we can’t get too excited about the positive applications [of ChatGPT] and have to think about guardrails so that bad actors don’t use this technology to cause harm to our companies,” Fannie Mae CIO Ramon Richards said. By putting appropriate guardrails in place, monitoring advancements, and leveraging those advancements safely, Richards is helping to protect the organization while positioning it to take advantage of this emerging technology as it evolves.
Aligning with business partners and strategies
Truly transforming an enterprise requires tight alignment across different organizations to advance business and technology strategies in parallel. Technology leaders play a key role in making connections across teams and using technology tools and new processes to enable business partners.
At Vulcan Materials Company, CIO Krzysztof Soltan is refreshing the company’s data strategy by tying it to the corporate business strategy and connecting it to each business function. By making real-time data accessible and available across the business, Soltan is able to better support Vulcan’s business processes and make more informed strategic decisions. As the needs and desired outcomes of the business change, so too will the data strategy and its success measures.
As Cardinal Health went through a reorganization, CIO Michelle Greene took the opportunity to drive “enterprise thinking” and solidify the organizational change by establishing key roles specifically focused on alignment with the business and its needs. The tight alignment has blurred the traditional lines between technology teams and others in the organization. “When sitting in a room, you might not be able to know who’s business and who’s IT,” she said.
Exploring continued opportunities for professional growth
Technology’s expanding influence across the enterprise is enabling leaders to gain new responsibilities and avenues for professional development that may have not been on their roadmap.
At Cenlar, Rob Lux first held the CIO role before transitioning to the COO role when the former COO departed. He then took on the co-CEO role when the company’s CEO retired earlier than expected. “I’m an accidental COO,” said Lux. “It wasn’t part of my career or succession plan.” He explained that the path from CIO to COO can work because CIOs are one of the few C-suite positions that are able to see across the breadth of the organization. For those that want to move beyond the CIO role, Lux advised getting out of the comfort zone and taking risks, even if just for a period of time. “Don’t be accidental like me,” he said. “Build a career plan so you’re prepared.”
Meanwhile, Intercontinental Exchange Inc.’s Mark Wassersug went through a number of title changes himself, most recently from COO to “accidental CIO.” Through these roles, Wassersug was able to oversee a number of successful acquisitions and ensure early communication, bringing corporate tools together, and solidifying culture throughout the organization. The CIO and COO roles have been particularly useful when overseeing mergers and acquisitions, allowing Wassersug to not only bring the required tools and technologies together, but also to ensure smooth transitions by being transparent about changes and strengthen the culture by having expertised colleagues work side by side with new colleagues across the organization.
Wassersug also discussed the importance of developing a relationship with the company’s board, and finding opportunities to educate on foundational technology and operations. By doing this quarterly, “there was a much deeper understanding during board meetings [that] made conversations much more meaningful and productive.”
The recent system failures at Southwest Airlines and the Federal Aviation Administration caused major disruptions for travelers, pilots, and cabin crew across the country. It also underscored the importance of prioritizing technology modernization initiatives, data integration, and the management of technical debt as the aviation industry races to make updates that many consider long overdue. This article will give a brief overview of both incidents and share lessons technology leaders can take to their own organizations.
In late December, a winter storm and frigid temperatures impacted airlines across the country. While many airlines bounced back relatively quickly, Southwest did not. Cancellations mounted and the company was unable to address them in a timely, automated way.
Southwest’s flight and crew scheduling is managed by a mainframe-based software that was built decades ago and is nearing the end of its life, according to the airline. When the system is overwhelmed, employees have to resort to manual processes. As the backlogs grew in December, “there just was not enough time in the day to work through the manual solutions,” Southwest COO Andrew Watterson said. By December 25, the Southwest team decided “the only way to pull the airline’s operations back from the brink would be to cancel even more flights: around two-thirds of its schedule for several days.” Nearly 17,000 flights were canceled, disrupting the lives of about two million customers.
The company is working with GE Digital to add new functions to its mainframe-based software, Crew Optimization (formerly known as SkySolver), to improve the flight and crew scheduling process. GE Digital owns the Crew Optimization technology. Bob Jordan, Southwest Airlines’ CEO, said the technology and processes worked as designed but “they just were all hit by overwhelming volume.” A GE spokesperson told the Wall Street Journal that its software isn’t an end-to-end solution, but rather a backend algorithm that airlines can supplement with other software to manage disruptions. Southwest and GE Digital are working together to develop a new release for the software to address past problems to reduce the need to do so manually.
Unions at Southwest have been urging the company to modernize the antiquated scheduling technology. “We’ve been harping on them since 2015-ish every year,” Southwest pilots union vice president Mike Santoro told CNN. In 2022, the Southwest flight attendants union wrote a letter to management prioritizing “modernization of the antiquated reserve system” and “improved communication tools to alleviate long scheduling hold times” over pay increases. Watterson said that Southwest was working through multi-year system upgrades, and had focused on maintenance and group operations ahead of crew-scheduling updates.
As a result of the disruptions, regulators and lawmakers have called for investigations and penalties against the airline. Additionally, the company’s board has created an operations review committee and the company has committed more than $1 billion of its annual operating budget to maintaining and upgrading IT systems as part of a five-year strategic plan. The events have cost Southwest Airlines an estimated $725 to $825 million, and the ripple effects continue to be felt.
Just weeks after the Southwest meltdown, the FAA’s system experienced an outage that led to thousands more travelers experiencing flight delays and cancellations. Like Southwest, the FAA’s outage originated from systems scheduled for upgrades. The affected system, Notice to Air Missions (NOTAMs), is a critical tool for alerting pilots about conditions that could impact flight safety and for real-time information on flight hazards and restrictions. Pilots are required to consult NOTAMs before every flight.
Due to safety concerns and to address the outage, the FAA grounded departures nationwide for the first time since 9/11. “Today’s FAA catastrophic system failure is a clear sign that America’s transportation network desperately needs significant upgrades,” said Geoff Freeman, president and CEO of the U.S. Travel Association. “Americans deserve an end-to-end travel experience that is seamless and secure. And our nation’s economy depends on a best-in-class air travel system.”
The FAA has identified a damaged database file on systems scheduled for upgrades as the cause behind its system outage, and found no evidence of a cyberattack. Investigations are ongoing to prevent any similar disruptions to travelers in the future.
New tools are being developed, some originating from startups, to modernize and automate processes and systems in the airline industry that are manual, siloed, and outdated. Executives at a number of major airlines have reaffirmed their commitments to investing in technology modernization and operational infrastructure during their January quarterly earnings calls.
The examples above serve as cautionary tales on the potential dangers of not addressing needed system upgrades in a timely manner. Technology leaders can keep the following points in mind as they build organizational resilience amid a fast-changing technology landscape:
Don’t put modernization efforts on the back burner. CIOs and their organizations are constantly balancing a shifting portfolio of initiatives. Challenges at Southwest and the FAA illustrate the heightened risk and serious consequences of waiting to make critical upgrades or letting technical debt pile up. If your team doesn’t have a strategy for chipping away at that technical debt, it’s time to address it.
Connect the dots between internal systems, employees, and customers. Long-reliable legacy systems may be an afterthought for many organizations (until they stop working, that is). Incorporate maintenance and upgrades into short-term and long-term business and technology strategies with an emphasis on how these systems ultimately affect employee and customer outcomes.
Have a backup plan and prepare for the worst. Develop and regularly test response plans with teams to reduce risk and ensure the organization is prepared to navigate potential mishaps.
Leverage cloud-based systems where appropriate. Partnerships with cloud providers are expected to help airlines improve their technologies. A shift to cloud solutions is no simple or risk-free task, and successful implementations go well beyond simply installing the technology, but strategically scaling these technologies can create greater operational agility, help automate processes, and make data integration more seamless and secure.
Continue to enable real-time data and communication that can take place across teams and organizations. Where possible, eliminate silos that can slow and reduce the quality of data sharing and, at worst, bring operations to a halt. Ensuring accurate and accessible data enterprise-wide is not a small task and often requires a robust data strategy to execute effectively, but its benefits can extend well beyond helping with crisis response.
Continue to gather and listen to feedback. For executives especially, careful listening and communication are key to empowering teams, creating an effective digital experience, and ensuring they have the tools needed to do their jobs.
Thank you to all who attended the 11th Metis Strategy Digital Symposium. As we enter 2023, many organizations are seeking faster pathways to growth and opportunities to boost resilience in anticipation of economic headwinds. Nearly 60% of attendees noted rising inflation and interest rates as the macro issue that will have the biggest impact on their organizations in the year ahead.
Modernization efforts remain a priority as companies seek to drive efficiencies and revenue growth. Chief Information Officers and their peers are also strengthening relationships with business partners as digital technologies play an increasingly greater role in product development, operations, and customer experience.
Below are highlights from the event. Stay tuned to the Metis Strategy YouTube channel and Technovation podcast in the coming weeks for recordings of individual panel discussions. In the meantime, click here to request an invitation for our next virtual event on February 16, 2023.
Poll: Which macro issue do you anticipate will have the biggest impact on your organization in the year ahead?
In preparation for the year ahead, technology leaders noted they are:
As economic pressures add potential challenges to organizations across industries, technology leaders are deepening relationships with business partners to deliver tangible value quickly.
At Magna International, Chief Digital and Information Officer Boris Shulkin is focusing his efforts on identifying use cases and partnering with business teams on execution, adding that “credit can be shared when things go well.” Shulkin noted that his role is rising in importance as cybersecurity and operational efficiency become more critical to the bottom line of the company’s manufacturing facilities.
At supermarket chain Giant Eagle, CIO Kirk Ball brings front line workers into the product development process from the start to ensure it aligns with their needs. Spending time in the shoes of end-users helps eliminate friction and provide them with the necessary tools, data, and capabilities to do their jobs. He also continues to engage with peers and business partners across Giant Eagle on the company’s transformation efforts, which will be executed over the next three to five years. “It’s not my strategy, it’s our strategy,” he said.
The increased collaboration with teams outside IT underscores the need for more customer- and business-centric thinking. Jennifer Hartsock, Chief Information and Digital Officer at Cargill, emphasized the need to think as a business leader first and a technology leader second, working alongside peers to understand the business context, develop strong relationships, and focus on solutions that truly serve the broader organization. “Sometimes we’re not prepared to truly understand what we’re trying to enable,” Hartsock said. She encouraged other leaders to lean into tough conversations, make tradeoffs where necessary, and meet others where they are so that their voices are heard and strategy creation becomes a “together conversation.”
As technology and digital leaders continue to lead cross-functional initiatives, they’re proactively looking at new technologies to create new opportunities and address existing challenges. At Tractor Supply Co., one area Chief Technology, Digital Commerce, and Strategy Officer Rob Mills is focusing his efforts is M&A. At the table with C-suite peers, his purview allows him to articulate not only how to integrate a particular acquisition, but also the impact it will have on the company’s technology platform and architecture years down the road. That strategic focus opens new conversations about how the technology organization can best adapt to ensure any M&A activity has the needed processes and technologies behind it to drive long-term opportunities.
While companies continue to build out internal products and services that support the customized needs of their business, some MSDS speakers have taken the opportunity to commercialize their offerings to customers, using technology as a means to connect to partner ecosystems. At Pilot Company, Chief Technology Officer Michael Rodgers developed a cloud- and API-first strategy that focuses on utility, functionality, and efficiency for drivers and team members. The company has built a platform that allows the company to expose those APIs to other trucking companies. This approach allows Pilot to embed its technology directly into apps like GasBuddy, giving drivers using the app the ability to engage seamlessly with Pilot’s services.
Meta’s rebrand as enterprise engineering meant embracing two broad mindsets: understanding and incorporating internal employees into product building, and making a fundamental shift to a “build” culture that can provide customers with custom tools, technologies, and platforms needed to do their jobs in the most effective and efficient way possible, CIO Atish Banerjea said. “You’re essentially going away from a mindset where your engineers are just taking in a third-party system and configuring it.” Building tools for internal users has also influenced development of commercial products. One product designed to make onboarding information accessible to new Meta employees ultimately became part of the company’s Workplace offering for external customers.
At Toptal, the world’s largest remote working company, CEO and Co-Founder Taso Du Val spoke to the benefits of building platforms, paired with robust data and information architecture, to drive greater agility. Since Toptal built and owns all parts of its customized software platform, it is able to create synergies, scale processes, and make changes more quickly. On the flipside, the customized nature of those internal systems makes it unlikely those technologies could become a commercial product.
At XPO, CIO-turned-CEO Mario Harik is driving a strategy focused on growth and using technology to better serve customers, help goods move through the supply chain, operate more productively, and efficiently expand margins. As XPO grows, there has been more of a focus on financial outcomes and tech stacks contributing to company expansion.
During his time as CIO, Harik learned to prioritize the commercial outcomes of technology solutions, and emphasized the importance of financial acumen. “Knowing the impact on the top line and the bottom line is essential for investments and getting expected outcomes,” Harik said. As MSDS attendees contemplate an expanded role in the C-suite, they are looking to sharpen customer centricity and financial acumen.
Poll: As you contemplate an expanded C-suite role, which skill or focus area are you most looking to sharpen?
Kelly Kent, Chief Transformation Officer at ServiceNow, said her work with a number of organizations on their transformation efforts is surfacing new conversations around metrics. While productivity is still top of mind in any transformation initiative, companies now are asking about the best ways to measure customer and employee experience, as well as measure revenue impact from digital channels. The ability to track and manage those metrics, both financial and not, will be key for CIOs as they look to move at scale and with speed for their companies in 2023.
Today’s emerging technologies are tomorrow’s big disruptors. To make organizations more nimble, technology executives are focused on creating more opportunities for innovation and improving test-and-learn processes. Gail Evans, Chief Digital and Technology Officer for Disney Parks, Experiences, and Products, first listens to customers, cast members and others to better understand the outcomes to chase. She encourages teams to “test before you invest” – to pause and think about what to test, assess the cost of building, and fully consider the value that a new solution would deliver to an end user before investing heavily in a new initiative.
Evans encouraged other executives seeking to expand innovation efforts to pay close attention to and understand mega-trends, have a game plan for responding to major technology and business disruptors, and ensure innovation is open to everyone at the company rather than just one person or one team. “Every employee that is in your company innovates something.”
Poll: How much of your IT budget is currently allocated toward ‘grow/transform’ activities?
At Little Caesars, CIO Anita Klopfenstein helps operationalize innovation through “Area 51,” a group that comes up with a number of potential solutions that haven’t gone into production, such as efforts to reduce waste or automate production lines. Key success metrics are tied to each initiative. If something shows promise, teams will build a prototype and roll it out with a franchisee that is open to new technology. They will develop the technology and measure progress until it reaches the desired success metrics before gradually rolling out successful initiatives systemwide. To drive innovative thinking, Klopfenstein encourages members of the IT team to work in stores a few times a year to understand how the technologies they have built impact everyday workflows. “There have been several cases where just moving a button from one side of the screen to another…really impacted the operations of the store.”
Thank you to all who attended the 10th Metis Strategy Digital Symposium. Across conversations, leaders emphasized the need for foundational data and analytics capabilities to prepare their organizations for growth. Whether modernizing systems, designing new operating models, or upskilling teams for the future, an organization’s ability to appropriately harness the information assets available continues to be a key source of competitive advantage. Below are highlights from the event. Stay tuned to the Metis Strategy YouTube channel and Technovation podcast in the coming weeks for full recordings of individual panel discussions. In the meantime, click here to request an invitation for our next virtual event on December 13, 2022.
To prepare employees for jobs of the future, technology leaders are focusing on upskilling and development initiatives that teach employees the latest technology skills while providing a clear path for professional growth. The most in-demand skill today: “data, data, data,” said Udacity CEO Gabe Dalporto. ”Every part of every organization needs better data skills.” That means not only equipping data scientists and IT teams with the latest skills, but also ensuring data literacy across marketing, compliance, cybersecurity, and beyond.
It isn’t enough to only provide training, however. Dalporto noted that attrition can actually increase if reskilling programs aren’t directly linked to individuals’ jobs and career paths. The message resonated with attendees, 44% of whom noted career pathing and other growth opportunities as focus areas within their upskilling initiatives.
Pearson CIO Marykay Wells reiterated the importance of creating an environment that encourages continuous development. Pearson offers weekly learning hours and a range of certifications employees can pursue to help spark new ideas and creative thinking. The company is also leaning into greater job mobility, encouraging team members to apply their learnings across the organization.
A strong foundation in data and analytics paves the way for new innovations. As organizations modernize enterprise data platforms and gain access to consistently reliable information, they are finding new ways to use emerging technologies to improve processes and services.
At Boeing, data is embedded across the enterprise and serves as a source of growth and resilience, CIO and SVP of IT & Data Analytics Susan Doniz said. Data-driven insights give the company a greater understanding of supplier networks, assist with product planning, and drive sustainability initiatives. Boeing is using emerging technologies like digital twins and the metaverse to drive product precision, building airplanes thousands of times digitally before creating the physical plane. Boeing also combines its own information with weather data and other external sources to drive additional value. “The value of data is not just data by itself, it’s how you combine data with external data,” Doniz said.
Emerging technologies have also shown promise in driving enterprise sustainability efforts. As Chevron Chief Digital Officer Frank Cassulo prepares for the transition to a lower carbon world and more renewable energy sources, he is advancing the deployment of industrial IoT, edge-based sensors, and real-time monitoring to improve the efficiency, reliability, and safety of the energy system. “We believe the intersection of technology and the energy transition is defining the rate at which we advance,” he said. Last year, the company launched Chevron New Energies to identify new technology opportunities and business models to deliver a lower carbon future.
Technology leaders are embracing more data-driven decision making processes and rethinking how to measure the success of digital products and services.
For example, every Monday morning, Vinod Bidarkoppa, SVP at Walmart and Chief Technology Officer at Sam’s Club, meets with the executive leadership team to discuss the Net Promoter Score of critical member and associate journeys from the prior week. Those metrics inform how the organization operates and focuses their efforts week to week. “Because there is data behind it, people can answer in a very data- driven way,” Bidarkoppa said. “It makes it a very rich conversation and it’s not just an opinion.”
Enterprises are also expressing a growing desire for reliable cybersecurity metrics. Orion Hindawi, Co-Founder and CEO at Tanium, detailed how the company is helping customers understand how their progress on particular KPIs compares to others in their industry. That data allows customers to better see where they have adequate protection or gaps that need filling.
Data-enabled products are also unlocking new efficiencies. Ameren Chief Digital Information Officer Bhavani Amirthalingam noted that putting more data into customers’ hands gives them more choice and control in managing their energy consumption. Greater accessibility to data also gives Ameren the ability to effectively track and reduce energy consumption in the data center and among key suppliers.
As Pearson offers a broader range of digital education products, it is placing additional focus on metrics such as time to value (the time between a student enrolling and actually starting a course), as well as internal productivity metrics to guide process improvements for engineers. “We are thinking about ways we can use data to improve experience and value,” Wells said.
In an increasingly complex economic and geopolitical climate, digital leaders are among those re-examining global talent footprints and seeking opportunities to streamline or automate existing processes. More than half of MSDS respondents noted that they are bringing on more full-time employees across geographies and exploring new locations for talent.
Denton’s, the largest law firm in the world, has grown from 3,500 employees 10 years ago to 20,000 employees around the world today through robust M&A activity. Over the years, each entity retained IT teams, structures, and systems. As cloud computing adoption expanded and cybersecurity concerns became paramount, especially for clients, Global CIO Ash Banerjee and his team are transforming and unifying the technology function, progressing the firm’s growth and integration strategies while seeking to balance local and global needs.
Anil Bhatt, Global CIO at Elevance Health (formerly known as Anthem) works to make sure that his global product team and engineer teams have the capabilities they need to meet business needs. At the same time, he’s focused on making sure team members are taking care of themselves. Bhatt’s team led two employee-focused transformations and introduced more flexibility and recognition. “As you take care of associates and employees, it changes how they look at company,” he said.
As the security and privacy landscape grows more complex, technology leaders must balance global rules and standards with country- or region-specific regulations. Kevin Stine, Chief of the Applied Cybersecurity Division for NIST’s Information Technology Laboratory (ITL), has been encouraged by an uptick of international governments and businesses adopting and engaging with the NIST framework. He notes this global alignment of standards as a critical step to aligning key cybersecurity outcomes and avoiding duplication or conflicting expectations.
As data-based decision making and digital tools pervade modern business, technology leaders are modernizing organizational architectures to help their companies more directly tie technology initiatives to business growth. At retailer Dollar General, CIO Carman Wenkoff prioritized people and processes in the modernization journey. After evaluating organizational structures and existing ways of working, the company grouped 105 technology domains into categories and assigned domain leaders to define and implement a future vision. The new structure is helping the retailer define new ways of working and find new ways to serve customers.
The prevalence of technology is putting more leaders on the path from CIO to CEO, COO, and other business leadership roles in the C-suite. Chandra Dhandapani; Chief Executive Officer for Global Workplace Solutions at real estate firm CBRE advised technology leaders wishing to ascend to other roles to stay closely aligned with business leaders, invest in technology closely aligned with business strategy, move fast, and care about customer experience. She encouraged leaders to take an outside-in perspective and “internalize being business leaders first who happen to have expertise in technology.” Dhandapani believes that CIOs are well positioned to take on additional leadership roles as they understand their organization’s data strengths and weaknesses and know how to use data to develop key insights.
Thanks to all who attended the Metis Strategy Digital Symposium. Amid a backdrop of economic and geopolitical uncertainty, technology leaders highlighted the need for increased agility as their organizations implement new ways of working and develop technology-led business models. Collaborating more than ever with peers in the C-suite, CIOs today are using data and digital tools to deliver continuous value to customers and to evolve product and service offerings as customer needs and expectations change.
Below are highlights from the event. Stay tuned to the Metis Strategy YouTube channel and Technovation podcast in the coming weeks for full recordings of individual panel discussions.
Technology becomes key to understanding the customer journey
At our February event, attendees noted that customer centricity has been the biggest driver of impact and performance at their organizations. That trend continues as new technology-led business models create opportunities for organizations to better understand customer journeys and deliver continuous value. Mamatha Chamarthi, Head of Software Business and Product Management P&L at Stellantis, explained how the automotive industry’s shift to software-defined vehicles has given the organization a chance to understand the customer journey from pre-sale to ownership while providing opportunities to deliver on-demand features and continuous updates past the point of a vehicle’s production. By transitioning the business model from a one-time purchase to a services and subscription model, Chamarthi’s team is able to generate a recurring revenue stream and deliver continuous, personalized value to customers.
Ather Williams, EVP and Head of Strategy, Digital, and Innovation at Wells Fargo, is navigating a massive change in the financial services industry as customers increasingly adopt digital and mobile platforms and seek new experiences in how they manage their finances. That has driven a mindset shift internally as leaders place greater emphasis on customer journeys.
In an age where customers have higher expectations about their digital experiences than ever before, organizations must adopt an agile mindset so that they can evolve with their customers and take a customer-focused view of value delivery, said Prakash Kota, CIO at Autodesk. Technology teams increasingly look at problems with a customer lens rather than an engineering lens, thinking about where there are opportunities to remove friction.
Training programs aim to build skills, foster new mindsets
To remain competitive in the product-oriented digital future, companies will require leaders with a still-rare combination of business acumen, technology savvy, and leadership skills. To develop “bilingual experts” who are equally comfortable with business and technology and who reflexively think about how technology can be used to create new capabilities, Vipin Gupta, Chief Innovation and Digital Officer at Toyota Financial Services, established the TFS Digital Academy. The program aims not only to equip participants with needed IT skills, but also to embrace a product mindset and think about the how the company’s financial services capabilities can be continually assembled and improved.
While fostering a digital mindset is essential, so is ensuring teams have the necessary skills to take advantage of new technologies. This remains a challenge. More than 35% of attendees said a lack of needed skills was the biggest challenge to adopting cloud, for example. To address the skills shortage and foster a market for new talent, Google Cloud CEO Thomas Kurian noted that the company has committed to train 40 million developers with hands-on skills training and certification opportunities.
Leaders take an ecosystem approach to innovation
Gone are the days in which corporate innovation happened in a silo. Today, the ability to innovate is an enterprise-wide imperative, and leaders are eager to explore the ways in which technology can deliver new and surprising value. Technology leaders play the role of strategic influencer in this new innovation ecosystem, identifying new opportunities, engaging colleagues and partners, and aligning innovation activities with the broader corporate strategy.
At Land O’Lakes, Chief Technology Officer Teddy Bekele is creating a “farm-to-fork” innovation ecosystem. By using technology as a backbone to achieve the company’s mission to feed a growing population, Bekele seeks opportunities to “excite the value chain” and develop ideas that can positively impact stakeholders across the business. “If technology isn’t driving value in the business, we’re just a cost center,” Bekele said. At Land O’Lakes, technology is now the center of the business, and product teams are focused on delivering tangible impact.
Innovation has allowed technology leaders to gain more strategic influence in the C-suite as well. At Thermo Fisher, Chief Information Officer Ryan Snyder works closely with the company’s CEO and the Chief Strategy Officer to make sure initiatives his team are passionate about get woven into the company’s strategy. Innovation needs to be “super connected to strategy being set by company leadership,” he said, and the approach to innovation must be aligned with where the company is heading.
Economic and geopolitical upheaval sharpen focus on resilience, risk reduction
Facing economic challenges, geopolitical uncertainty, and ongoing supply chain constraints, companies are turning to technology to drive operational efficiency, reduce risk, and build resilience across the organization. CIOs across industries noted that they are digitizing supply chain operations for greater visibility, leveraging analytics to better understand customers, and re-evaluating global talent footprints.
In a poll, more than half of attendees noted they are exploring new locations for talent both domestically and abroad, and nearly 30% said they were outsourcing more talent to locations where their organizations have an existing presence. Chris Drumgoole, Chief Operating Officer at DXC Technology, said the company is discussing ways to reduce single-country risk and has placed increasing focus on resilience across operations.
“Operationalizing culture” becomes a competitive advantage
As technology leaders take on expanded roles in the C-suite, tangible value delivery and operational excellence take on even greater importance. Jeff Smith, Chief Operating Officer at World Fuel Services, remarked that the only unique attribute about a company is its culture, and that competitive advantage can be gained by learning how to operationalize it. To achieve this, Smith’s team defined 30 cultural practices, the majority of which could be scaled globally. He created measurements for both operations and leadership, conducted leadership maturity assessments, and even created a “Bureaucracy Mass Index” showing the ratio of leaders and managers to “doers.”
Chris Drumgoole of DXC noted the increased adoption of more customer-focused metrics over traditional IT metrics in order to better understand the customer experience. The company sends a Net Promoter Score survey out each month that creates a regular flow of feedback and data. He and Smith both underscored the need for clear-eyed, tangible metrics – that which gets measured gets done – and to embrace opportunities for continuous improvement.