2/12/18
By Peter High, published on Forbes
To say that Dow CIO Melanie Kalmar has a lot on her plate is an understatement. She has helped integrate two major acquisitions (Dow Corning and Dupont), is in the process of planning their divestiture, leads digital initiatives across the enterprise, runs Corporate Facilities, helped establish and runs Dow Services Business, all on top of running cybersecurity and infrastructure. Hers is a role that has all traditional aspects of IT, but also encompasses revenue-generating business and helps drive both customer and employee experience, as well. She covers this vast purview, the implications of the acquisitions and divestitures, the role that technologies like artificial intelligence and blockchain will play at Dow, among many other topics.
Peter High: Can you provide a brief overview of your purview at Dow?
Melanie Kalmer: I am Vice President and Chief Information Officer at Dow Chemical, and my role is a great example of how the responsibilities of a CIO continue to evolve. I have responsibilities for both global IT as well as for our Corporate Facilities and Dow Services Business. In terms of traditional IT accountability, I have responsibilities on a global scale including delivering the typical broad set of IT services. The fun part of that is the unique services that our business units need. I also have other corporate infrastructure responsibilities focused on our end-to-end processes and other stuff we do with our business units.
I also have accountability for cybersecurity and analytics, and I have a fun role in leading the digital transformation for the company. Even though I lead that, I want to be clear it is a collaborative effort that engages all facets of the company. That is how I like to operate, by engaging with the other executives and being extremely transparent about what we are doing. We hit the mark and we can deliver the expected business outcomes.
The other half is Corporate Facilities. What I focus on there is the offices and labs around the globe and creating modern capabilities. We want the spaces where people work to be vibrant and allow for greater collaboration. We are building new facilities and remodeling others to bring in more technology and create more opportunities for people to collide. The buzz word in the industry is collision space.
We just opened a new headquarters late last summer, and it is a beautiful building. There is a lot of buzz around the building about how it is driving more collaboration and a better flow of information. People can hear what others are talking about. We have open environments across most of our buildings.
As we embark on the huge set of activities that are coming out of our big M&A around Dow Corning and DuPont, we are working on what we call our rooftop strategy. This involves us deciding what facilities will go with which company, and how we get better space utilization in the buildings that we do occupy.
Under Corporate Facilities, we also manage real estate, which will help drive financial assessments on the real estate and sell assets. Much of this, be it land or buildings, we have acquired through many acquisitions over the years.
Finally, I run Dow Services Business [DSP]. The business was formed to support our joint ventures and our divestiture activities. The team that I lead manages contracts to provide services such as IT services, procurement services, and site services, to name a few examples. Those services are provided to our joint venture partners or to buyers of businesses that we divest.
The team focuses on ensuring we have those contracts in place but also acts as a liaison between those DSP customers and the groups within Dow that are providing the services. That has allowed us to leverage Dow’s capabilities on both a transitional basis and on a long-term basis and allows the joint ventures or the buyers of a divested business from Dow to focus on meeting their business objectives instead of having to figure out how to run the day-to-day business. We can provide those services for them while they are starting up.
Those are the three key areas I focus on. Additionally, I sit on the board for a reinsurance company [Dorinco Reinsurance Company] and participate in a lot of external activities such as around STEM. This is my role in a nutshell.
High: You spoke about the digital responsibilities that you have. Can you share how you define digital, as well as the ways in which you lead that from a transformation perspective?
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2/5/18
Dover Corporation is a diverse $7 billion revenue company, with businesses in Energy, Engineered Systems, Fluids, and Refrigeration, and Food Equipment. Given this diversity, across the company’s 60 years, it had never had an enterprise chief information officer. That changed roughly two years ago when Dinu Parel was named to that post. In the time since, he has provided strategy, governance, and shared services to the traditionally decentralized IT function.
In this interview, Parel notes that his vision continues to be to allow the business units to have some latitude in selecting strategic technology, but two areas of focus on standardization have been security and infrastructure. He is currently focused on transforming IT from a traditional, back-office support function to an advisory function that helps drive business growth and innovative technologies such as Blockchain.
Peter High: You are the CIO of Dover Corporation, a diversified company with $7 billion in revenue. Could you provide an overview of the operations?
Dinu Parel: We are a diversified global manufacturer that provides product innovation. We are headquartered right outside of Chicago and have 29,000 employees around the world. We have a customer-focused business model. We are currently structured and organized into four segments.
Each of these segments has multiple operating companies that roll up under them and work directly with our end customers.Making decisions close to the customer while working on thousands of products enables and empowers an ownership mindset in the operating companies.
High: Dover Corporation is a very diverse set of businesses. How is IT organized?
Parel: Each operating company has an IT team that is responsible for providing the end-to-end IT function for the business. Each of the four segments has an IT leader, and a few key roles are consolidated at the segment level. Since I joined the company as the CIO, we have been on a transformation journey of establishing the enterprise organization from the ground up. For the enterprise organization, the vision is working with the operating companies and working with each of the segments to drive the enterprise strategy for IT, the governance, and providing centralized services.
It has been exciting for all of us who have been involved in this transformation because it is changing the historically decentralized IT operating model.
High: You were the first ever CIO at Dover Corporation. When you rose to the role two years ago, the organization had not had one in its 60 plus years of operation. What was the genesis of the role? How did the company conclude that time was right for a CIO?
1/29/18
The integration of a major acquisition is the bane of the existence of many executives. Chief information officers have special challenges during such scenarios, since, after all, they must think about the people, processes, and technologies that must be integrated. This is an enormous amount of change to usher in.
When Steve Phillpott became CIO of $19 billion revenue developer, manufacturer and provider of data storage devices and solutions, Western Digital less than two and a half years ago, the company was nearly a third of its current size. With the acquisition of HGST in 2015 and the acquisition of SanDisk in 2016, there was no avoiding the fact that this would be a heavy lift for Phillpott and his colleagues. This was all announced in his first months on the job.
Phillpott noted that across the technology stacks of the three companies, in most areas, two-thirds of employees would be impacted, as the “winning” solution would be named. Phillpott recognized this as an opportunity to choose best-in-breed solutions across the technology portfolio. The mandate for change that any integration brings about would be a boon.
This would lead to the integration of more than 3,000 applications and would test the company’s change management practices, but Phillpott and his team have made enormous progress, as he notes herein.
Peter High: You are the Chief Information Officer of Western Digital. In its current generation, Western Digital is the combination of three multi-billion dollar organizations: Western Digital itself, the 2012 acquisition of HGST, and the acquisition in 2016 of SanDisk. I know you took an interesting approach to integrating these companies. Please explain.
Steve Phillpott: We integrated three large multi-billion dollar, Fortune 500 companies into one future Fortune 150-ish company. You are looking at integrating systems, integrating processes, and integrating technologies. As we started on this journey, this integration became a great opportunity to transform the company. By transforming the company I mean looking at those applications systems and processes that we have today, thinking where we want to be in a couple years, and starting to lay the foundation for that journey.
Consider ERP as an example. Across the three legacy sub-companies, we had three different ERP systems. Going forward, we could have picked any one of the three. In a typical acquisition where you have two companies; one large company, one small, it may default to the larger company’s ERP. Two like-sized companies integrating together, you may flip a coin, or you pick the best one and go forward. With three, it provides an interesting dynamic because, at a minimum, two-thirds of the company are going to have to go through change.
Our thinking was if two-thirds of the company are going to have to go through that massive amount of change, why should we not look at a newer, best-in-breed solution and have the entire company go through that change. What that does is it allows us to transform a foundational application that will support us as we grow to $20 billion, $25 billion, and beyond. It became a great opportunity to go through and rebuild processes and applications that we knew would not scale. We were able to revisit chart of accounts, revisit cost centers, and revisit the reconciliation process with an eye to the future and a focus on ensuring those processes would support us as we grow past a $20 billion company.
High: You have had to rationalize around 3,000 applications. Could you share how far you have come in that process, as well as what learnings you have had?
Phillpott: We had roughly 3,000-plus applications across the three major companies, and then we added a couple more acquisitions after that, which added more applications to the mix. I would say we are still early in the journey, but we have completed some major activities and 2017 was a very productive year for us. We focused on getting a lot of the collaboration and communication tools correct. Communication tools allow for the flattening of the organization, which is increasingly important as you are trying to go through these integration activities.
The speed at which companies can effectively collaborate is essential in helping move these integrations forward and trying to harmonize the processes in the system. The other interesting thing about focusing on those collaboration and communication tools is it also sets us up well for future M&As. Once we get those in as we move forward and have more acquisitions, we can bring them into the mix much quicker. We determined best-of-breed technologies across a variety of communication and collaboration tools.
Globally, we have everybody on the same email, the same file sharing around Box, the same intranet, Jive, WebEx, Jabber – those core collaboration and communication tools. If you look beyond those initial communication and collaboration activities, we have started to migrate many of the legacy applications. Now we are on a global Human Capital Management system which we consolidated with our CRM. We consolidated on a global ServiceNow instance which was interesting because that is another area where we try to get everybody’s information into one area, but it is diverse in terms of what activity we need to help the end users with.
1/22/18
By Peter High, Published on Forbes
Diane Schwarz has the killer combination of skills and experiences to be a chief information officer. She was an engineer as an undergraduate, and therefore learned important technical skills. She has an MBA from the University of Chicago and learned key business disciplines. She was a consultant, gaining experience solving problems across many different companies who were her clients. By the time she joined IT departments, she had depth and breadth to her experiences, and quickly rose to become a CIO.
For nearly five years, Schwarz has been the Enterprise CIO of Textron, the $14 billion revenue multi-industry conglomerate in aircraft, defense, industrial and finance businesses. With such diverse businesses in the company’s portfolio, it can be tricky to get the balance right between standardizing processes and technologies, and allowing the business units of the company to have autonomy. She has simplified things by operating with four key strategies that she describes in more depth in this interview:
Peter High: You are the enterprise level Chief Information Officer of Textron, but I know there is also IT leadership within the business units themselves. Could you talk about the structure of IT at an organization as complex as yours?
Diane Schwarz: We have a CIO in each of our business units and major product lines, and they have their own IT organizations that report to them. Those CIOs have dual reporting to the business unit leadership as well as to me. The business units do what I call the fun stuff. They support the stakeholder applications, whether it is ERP or CRM or PLM tools.
With that much disparity in the organization, we communicate often and at great lengths to make sure that we know what is going on in our different locations. I have only 50 percent of the staff in the United States. I have many folks in India, who roll up independently to each of their business units, but who also happen to sit in a common office building. It may seem complex to an outsider, but we know how our puzzle pieces fit together.
High: In an organization as diverse as yours, how do you think about what should be common versus what should be unique as it applies to that diverse range of businesses?
Schwarz: That is a question our CEO answers. He has said our business units are empowered to make decisions on what is going to be best for them to meet their strategic objectives. Of course, profitability is part of that. Let’s say a business unit wanted to host its own email system. We do not have any rules that say they cannot, but it is going to cost more for them.
Profitability objectives help keep people in line without deviating too much from the standards. This enables employees to be able to interact across our locations. Our CEO also recognizes that when it comes to, for instance, ERP systems, what serves a business unit in aerospace is different than what serves somebody in automotive. If you make people share too much, you sub-optimize what is going to support their business. We look at what is going to best serve their business needs.
High: Could you talk about your strategy? What has risen to the top of your strategic plan?
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1/15/17
Estonia is, perhaps, the most digitally advanced society in the world. This Baltic region country with less than 1.5 million citizens has been occupied frequently through its history, including by the Soviet Union between 1944 and 1991. In the aftermath of independence, particularly progressive leaders decided to leverage advanced technology as a means of simplifying the lives of citizens. As early as the mid-1990s, the government made radical moves to eliminate paper in its interactions with citizens, forming the basis of what would become an almost entirely digital society.
Taavi Kotka was an Estonian CEO of one of the largest software companies in the Baltic States, Nortal. He left the company in late 2012, and he was under a non-compete agreement for two years. He used the time to join the government, and in the process, helped usher in some more remarkable change. The changes he and others enacted would have profound impacts on the efficiency of and value derived from healthcare, banking, education, voting, law enforcement, among other areas. He also spearheaded the Estonian e-Residency program, which has allowed Estonians abroad and non-Estonians, especially so-called digital nomads, to take advantage of these superior services. As Kotka explains, the degree to which Estonia has become digitized actually enhances its security. He describes all of this and more in this far-ranging interview.
Peter High: Estonia is perhaps the most digitally advanced, technically competent country in the world, and for the past four years, you have led much of that work. I wanted to start with the genesis story. Why Estonia? What are the secret ingredients, either in the combination between the government and the citizenry, or other structural advantages that were there that made this change and transformation possible?
Taavi Kotka: That is a good question, but it was not me. It was set up almost 20 years ago after we broke apart from the Soviet Union. It was clear, especially for the private sector, that Estonia is a huge country geographically – we are bigger than the Netherlands, or Switzerland, or Denmark – but there are only 1.3 million people living here. For the private sector, it was clear that it is impossible to physically serve all the people living in Estonia. It is not economically feasible to have a bank office in every small town, for example.
High: And roughly when was that taking place? How long ago?
Kotka: The internet was born in the 1990s, so the push started 1995 or 1996.
High: Remarkably early.
1/10/18
By Peter High, on CIO Insight
As the CIO of Blue Cross, Bill Fandrich oversees all technology-related services that support business operations and security. He is also responsible for providing critical IT operations, strategic technology leadership, and enhancing the connection between business strategy and technology. In this interview with CIO Insight contributor, Peter High, Fandrich discusses his current strategy, the way in which he collaborates with the CIOs of other Blue Cross Blue Shield organizations, the resilience of Detroit, and a variety of other topics.
Peter High: You are charged with designing IT plans to help drive business imperatives. What are examples of current strategic priorities in your business together with initiatives your team is undertaking to drive them forward?
Bill Fandrich: As a company, we support a variety of business units through customized strategies. One of our current priorities is our informatics and analytics department, which supports Blue Cross’ businesses.
Another area of focus is the modernization of our capabilities to service both our members and our customers by improving engagement and providing affordable, high-quality care. A key value of our company and health care IT is to work toward bringing new products and offerings to the marketplace that support collaborative relationships with our providers and make health care resources as effective and accessible as possible.
High: How do you work with the CIOs of other Blues Cross Blue Shield organizations?
Fandrich: Although BCBSM is our focus here in Michigan, we are part of a broader organization that is governed by the Blue Cross Blue Shield Association. As I mentioned previously, we also have more than four million members within our network, some of which are out of state. As part of that BCBS system, our responsibility is to ensure that our members are obtaining services and products that are consistent with the services offered in Michigan. Our various work groups make sure these services translate seamlessly to members across the country.
In addition to our various works groups, BCBSM along with five other BCBS plans are co-owners of a company called NASCO, which provides services and support around technology for members out of state.
The BCBS CIOs also meet twice a year to discuss collaborative tactics. A key part of BCBSM’s strategy is collaborating with other Blue systems to make sure we are bringing the right offerings to the markets in which we serve our customers.
High: You are now the largest IT employer in Michigan. As such, you have been a part of Detroit’s renaissance. What is your assessment of Detroit as an emerging IT hub?
Fandrich: The size of our IT workforce is gauged on a couple of things. Our IT employee base is made up of over 1,000 people. In addition, we work with local service companies who provide staffing services to support our IT capabilities. Combined, our IT workforce exceeds 1,400.
I grew up in the Midwest and lived in Michigan and Detroit during the 1980s. I’m just now returning to Michigan after having lived in the Boston area for more than 20 years. I’ve noticed that there is an incredible foundation here in the Midwest, and Michigan in particular, for technology companies. The academic institutions here continue to develop impressive technology and engineering talent. Detroit offers affordability, a resilient culture and an incredible amount of social and economic benefits for those in IT. There are also a lot of new developments taking place throughout the city, which makes it a very attractive place for companies and the technology population to plant roots and participate in the innovative environment.
High: What trends particularly excite you as you look out, say, two or three years?
Fandrich: What’s great about IT is there is no other industry like it. Information technology is one of the only industries continually reinventing itself and evolving its capabilities, which has led to new opportunities and innovative strategies that have supported our company throughout the years.
I’m excited to see more evolution around cloud space as well as analytics and informatics. I’m interested to see how those areas will expand and leverage robotics and cognitive learning. I’m also looking forward to seeing more advanced techniques that will allow us to leverage information, apply it in different ways, and deliver a new type of experience to our customers that we may not have been able to accomplish before.
This article was originally published on CIO Insight
1/9/18
By Mary K. Pratt, published on CIO.com
As one of the original fintech companies, TD Ameritrade has leveraged technology to do business differently.
CIO Vijay Sankaran says he’s well aware of that tradition.
“This ability for technology to innovate is probably one of the most important things for us,” he says. “The cornerstone of that is how technology facilitates speed and how it helps with the prototyping and adopting of new paradigms.”
Innovation is often portrayed as the mind spontaneously lighting up. But Sankaran and other innovation leaders say innovation happens in organizations that structure their people, processes and technology the right way.
“As businesses mature, what ends up happening is a more execution and operation mindset can creep in. So you have to be very deliberate around how you get new juices and ideas flowing,” Sankaran says.
Digital companies born into the cloud and agile world have an advantage: They’re not burdened by legacy systems. “They’re able to be faster and more flexible and can focus more of their spend on creating value vs. keeping the lights on,” says Rudy Puryear, a partner and director in Bain & Co.’s Chicago office and leader of the consulting firm’s IT practice.
That doesn’t mean CIOs at older companies are always left in the dust. Puryear says those CIOs who have modernized their infrastructure can deliver fast, flexible, value-creating, and differentiating projects just as well as their digital company colleagues.
But CIOs with mostly legacy systems? Not so much, he says.
Puryear says Bain research shows that some organizations spend up to 80 percent of their resources on maintaining legacy environments — “and trying to keep it from breaking” — vs. forward-looking, innovative projects.
“If the company is spending $1 billion on IT and only 20 percent is invested in the future and that has to interface back into the legacy environment, that has a productivity or legacy tax behind it. So the business isn’t getting anywhere close to $1 billion out of that investment,” he explains.
Puryear says CIOs focused on innovation have committed to modernizing their environments; they’re not just delivering stand-alone innovative projects on the edges, as those aren’t enough to truly transform any organization.
“The reality is that traditional IT isn’t really ready for digital. Leading CIOs understand that. They embrace new adaptive architectures so that everything they build and buy going forward is more modular, microservices and plug-and-play. They have a cloud-first mindset and they embrace far more agile, product-centric operating models,” he says.
To drive innovation, Sankaran says he and his 1,500-member technology team has adopted new technologies and work processes.
That includes moving from a shared services model to a product-first agile culture over the past 18 months, a move that has helped IT nearly triple its output. It also includes adopting increased automation and a DevOps environment to support technologists as they work to deliver game-changing applications quickly.
Sankaran says he’s also taking additional steps to ensure TD Ameritrade can continue to foster innovation. He’s testing integrated collaboration platforms to support cooperation and communication across the organization. “It’s really around how you share ideas in a more natural way and how you create communities of communication,” he says.
Sankaran started an Advanced Technology Group tasked with evaluating emerging technologies, identifying prototype opportunities and bringing them to market. And he’s implemented programs, such as an incubation process and hackathons, to spur and develop innovative ideas wherever they come from.
Management experts say they see progressive CIOs making similar moves as they adopt agile, DevOps, automation and innovation labs to speed delivery of new ideas. But, they note, those CIOs represent only a fraction of the IT leaders. Consider, for instance, Deloitte’s 2017 Global CIO Survey found that 74 percent of CIOs surveyed “are investing less than they should in emerging technologies that could contribute to innovation and growth.”
Seth Robinson, senior director of technology analysis with the nonprofit tech trade organization CompTIA, says companies must have processes for people to explore technologies that have potential to drive innovations and test how those technologies could transform the organization’s processes and workflows.
“IT has been focused on lowering costs and investing in pieces that are strategic, but in terms of being collaborative and IT understanding business goals and then being able to take those back into the tech department to come up with innovations, that’s not something we see as the standard course of business. Only leading CIOs are doing that,” Robinson says.
Technology drives innovation today, no doubt about that. But successful CIOs remember that technology itself is only part of the equation, says Michael Gretczko, a principal at Deloitte Consulting.
“It’s fundamentally about changing how people work,” Gretczko says. “And to truly innovate, CIOs have to change how people work. They’ve got to be considering the people component and partnering with their HR counterparts. We see that the most progressive CIO understanding that.”
Gretczko says he sees innovative CIOs, in collaboration with other executives, ask how jobs will change and how customer interactions with the organization will be different. Moreover, they’re articulating how and why those changes will benefit the business to ensure they’re not adopting new technologies simply for technology’s sake.
“CIOs have to drive that process of envisioning the future. And if they’re not thinking about this last mile, they run the risk of technology enabling and not technology innovation,” Gretczko adds.
For Peter A. High, president of consulting firm Metis Strategy LLC, what separates CIOs capable of delivering innovation from the others is their attitude.
“There are very few other executives who have a reason to get into every strategic meeting, but great CIOs recognize they have strategic insight across the organization that few other executives have and [they leverage] that strategic perch that they have,” he says.
Here’s how High sees it: Most companies have an enterprise strategy that lists goals like reduce costs, grow revenue, enter new markets and develop new products. The strategic plan often doesn’t get into explicit details about how the various roles — marketing, operations, sales, and so on — will drive those.
“But a CIO who recognizes those gaps and fills them in with the other chiefs, that’s really an essential step for innovation,” he explains. “This is where the CIO can add value. [The CIO] can understand more than anyone else where there are common needs and divergent needs across the organization and then on the back of that develop IT’s own plans.”
He says leading CIOs do that and as a result have officially incorporated that strategic focus into their roles. He points to the 2015 decision at Dunkin Donuts to promote the existing CIO, Jack Clare, to the newly created position of chief information and strategy officer, as one of several examples.
High also notes that CIOs who leverage their unique position within organizations also don’t refer to the business units (or the business unit employees) as customers, as if IT is second to them. “They refer to them as their colleagues,” High says.
Furthermore, he says these CIOs see the organization’s end customers as IT’s customers and, thus, have a focus on how IT can drive new products and services that impact top-line growth.
Yes, technology and processes must be part of any innovation initiative today. But CIOs need people who understand those pieces and have the vision to leverage them in new ways. Moreover, the company’s culture must support and reward innovation through training programs that develop the technical and business knowledge needed for now, such as collaboration and DevOps skills.
“You can’t innovate if you don’t have that talent and culture,” says Larry Wolff, president and COO of Ouellette & Associates (O&A) Consulting.
Wolff points to a 2016 CIO survey from tech research firm Gartner that found talent and culture were top obstacles to CIOs achieving their objectives. “Most people fall short of looking at, ‘Do I have the organizational structure, the people and the skills to execute these operational changes?”
Indeed, Gartner says in its Building the Digital Platform: Insights From the 2016 Gartner CIO Agenda Report that “Talent has now been recognized globally as the single biggest issue standing in the way of CIOs achieving their objectives.” It cites the biggest talent gaps are around big data, analytics and information management, followed by business knowledge/acumen. Gartner adds: “Talent management practices are not keeping up with the ever-increasing and changing needs of the digital world.”
Wolff says he sees innovative CIOs take very deliberate action on this front.
“They have a very focused and deliberate workforce and talent strategy, and they create a disciplined spirit of continuous improvement,” he says, explaining that they have strong project management skills on staff, they’re good at collaborating and negotiating with the business to determine priorities, and they say no to the business peers when they’re requesting work that deviates from the strategic vision.
O&A and Babson College developed the IT Maturity Curve following a year-long research study about IT leadership. This maturity curve puts CIOs into four groups, with the least mature identified as IT supplier and the most mature labeled as innovative anticipator.
Wolff says one element that all innovative anticipator CIOs have in common is credibility with their business-side peers. He explains that the other chief executives, along with their direct reports and in turn their staffers, know that IT operates efficiently and effectively and thus they can trust IT to deliver on the high-stakes items.
He cites his own past experience to illustrate his point. He joined a $400 million company as CIO, tasked with turning around an IT shop that struggled with basic operations. He improved governance, project management and IT training, all of which allowed his team to better keep up with daily demands. That in turn gave them the bandwidth to move into strategic projects. Those wins won their business colleagues’ confidence to tackle innovative initiatives — including one using predictive analytics to identify which sales leads would become customers, a project that saved $50 million in annual costs.
Building credibility isn’t a revolutionary idea; CIOs have long been advised to do this by delivering exceptional operational services. But it still applies today, Wolff says.
“I would be hard-pressed to find an IT organization that doesn’t have pockets of innovative brilliance. But that doesn’t matter if it the organization doesn’t respect IT. Business will not accept innovation from a low-performing IT organization,” he says.
This article was originally published on CIO.com
1/2/18
By Peter High, published on Forbes Jody Davids has been the chief information officer of four major companies: Cardinal Health, Best Buy, Agrium, and, since April of 2016, of PepsiCo. She had set the goal to be the CIO of a Fortune 200 company, and now she has done so multiple times over. She also set a goal of becoming a board-level CIO, and she accomplished that in January 2015, when she joined the board of the North Carolina-based healthcare company, Premier, Inc.
All of this is particularly remarkable given the fact that she started her career as an executive assistant at General Electric. It was during her time there when her ambition was awakened. She had an assignment that gave her exposure to the paygrades across the company, and she realized how much more she could pay if she joined the IT department. She would go on to do so, and enjoy stops at Apple and at Nike before accomplishing her goal of becoming a chief information officer. She describes her journey, key points along the way, the advice she has for fellow CIOs who wish to join boards, and much more in this conversation.
Peter High:You have been a CIO multiple times. You are currently at PepsiCo but were previously CIO at Agrium, at Best Buy, and at Cardinal Health. While you have been extraordinarily successful, your origins in IT are rather unconventional, as you began your career as an executive assistant. Could you dive into the details of some of those experiences, as well as your pathway into IT?
Jody Davids: My first office job was working as an executive admin for a group of IT people at General Electric’s nuclear energy business group. I was young at the time and was going to college at night as a music major. One of the tasks my boss assigned me revolved around looking at a page full of salaries and reconciling it with some other piece of paper. In that process, I noticed that all the people on the page were making significantly more money than I was. I began to get curious about what the people around me in IT were doing.
At the time, GE had a phenomenal after-hours training program for its employees. I took a class in Fortran which was taught by the one woman in this group of programmers. Apparently, I did okay, and they hired me for their next entry level Fortran programming position.
I was working in GE’s nuclear energy business group around the time of the Three Mile Island nuclear accident [which took place on March 28, 1979]. Three Mile Island was not our reactor, but you can imagine that the whole industry was sent into a tailspin, and eventually, I was laid off at GE. This turned out to be the best thing that ever happened to me because I emerged at Apple Computers as a programmer.
High: Can you talk a bit about Apple in its early days and your experience there?
Davids: I was there for fifteen years, from 1982 to 1997. I started as a programmer working on a product called the Apple III, which was later recalled from the market. I was then placed into an IT group that was supporting Finance and HR systems. It was a wild time to be there.
For me, that period was equivalent to working at three different companies. The early days, the first Steve Jobs days before he left, were the Wild West. We were running all our IT systems on a PDP-11/70, and he did not understand why we could not do it all on a Macintosh. There were no networks ready or anything around it yet. Those were interesting conversations in those early days.
That was the first stage of being there. I was growing in my craft as a programmer and then as a project manager, and then as a young manager. Jobs left in 1985, and we had John Sculley take over. Sculley was a ‘professional’ executive who helped us mature as an organization, get focused on process and on cost management, and generally focus on the things that large companies need to be more focused on.
Clay Johnson has worked at a number of iconic brands, from FedEx to Boeing to General Electric. Roughly a year ago, he joined yet another icon in Walmart. In so doing, he joined a company with 2.3 million associates, 5,000 stores in the U.S. alone, and a complex mix of technology. His priorities in the early days were to meet as many people as possible, to learn the business, and to understand the projects that were ongoing.
He has begun to enact a cultural change within the IT department, and he indicates that the four steps he has followed have been to be transparent, to foster open debates, to push everyone to speak up, and to incorporate a fail-fast approach to work.
Now that he has a year under his belt, he sees his big priorities for the year ahead as developing a product model for IT to facilitate end-to-end ownership of different product areas created, as well as process automation, facilitated at least in part through artificial intelligence. He discusses all of the above and more in this far-ranging interview.
Peter High: Can you please describe your purview as Walmart’s Chief Information Officer and Executive Vice President of Global Business Services?
Clay Johnson: When I joined earlier this year, we consolidated the Internal Technology and the Shared Services teams. Technology encompasses anything that runs internally for the company, from server security and corporate systems to machine learning [ML], analytics, and artificial intelligence [AI]. We split out e-commerce and customer-facing staff to Jeremy King, who is our CTO. Everything else that runs inside the company falls under me. A lot of that is supplier facing rather than customer facing.
Combining these two teams has been incredibly powerful because it enables us to drive end-to-end ownership and use technology all the way through a process. I predict you are going to see a trend of more companies doing this.
High: I know part of the intention was to have a unified view of the associate experience. Could you describe how that is enhanced through digital technologies?
Johnson: The key is a relentless focus on the customer, and my customers are the internal associates of the company. Walmart has over two million associates, which is a huge number. At that scale, any time you can help productivity numbers or improve interactions with the different tools and services that we have, that will result in a massive productivity improvement.
If you look back ten years ago, business technology was better than consumer technology. However, that has now flipped. A lot of the technology that employees use in their personal lives is better than what they have at work. People now expect that when they come to work, the technology will be intuitive like social media and smartphones. They want everything on mobile and at the tip of their fingers. The goal of the Internal Technology and Shared Services team is to provide everything associates need when and how they need it, from tools to analytics.
High: Given this mandate, how much have you had to change in terms of the skill mix of your team? To what degree are you adding new employees, retraining existing employees, or creatively using external parties?
