With all the ways digital innovation has enabled companies to remain productive during the pandemic, one of the most positive outcomes is improved collaboration across traditional business silos. In my new book, Getting to Nimble: How to Transform Your Company into a Digital Leader, I discuss how enterprises have made these silos more permeable, creating greater partnerships along the way.
Consider the following five examples and how they could apply to your digital transformation efforts.
Talented technologists are in high demand at most organizations, tasked with helping teams in other divisions figure out the digital implications of their ideas and strategize accordingly. In many cases, these ideas come from the technologists themselves. Companies that provide such “T-shaped” career paths offer an enormous advantage, developing leaders with great breadth and depth of experience. When they ascend to “chief” roles, they do so with a much clearer understanding about how value is created within the enterprise.
Agile methodology has been a boon for collaboration across the enterprise.
The traditional “waterfall” method of development involves someone from the business side (outside of IT) placing an order with the IT department. The IT team then develops this order, with little input from the business side until the project is completed months later.
In contrast, agile development includes the intended audience or user of the project in development from ideation through completion. With each iteration, the user validates value, and features are amplified or turned off accordingly. In some cases, the entire project may even be scrapped as a result of what the team learns.
DevOps blends two traditionally siloed parts of the technology and digital domain: development and operations. In a traditional project development model, developers take a project from ideation through completion, and the operations team then moves it forward. There is often a moment in the lifecycle when the project is “thrown over the wall” from development to operations (even this phrase highlights the distance and disconnects between the activities of the two groups).
DevOps instead makes delivery teams responsible for production issues and fixes, whether legacy or new, drawing them into the lifecycle earlier. Greater levels of involvement and accountability make for better work products.
The migration from a project to a product orientation is another area that benefits from greater collaboration. Internal “products” are also good examples of this – think order-to-cash, onboarding new hires, or creating a mobile customer experience.
These products potentially involve great value, and the product teams are typically cross-divisional or cross-discipline: They might include tech and digital, marketing, sales, operations, and any other division to which the product is relevant. A product leader should lead the cross-functional team, and that team should be prepared to remain intact for a longer period of time than the typical project.
An early example of this type of project orientation comes from Atticus Tysen, Chief Information and Security Officer at Intuit. When Tysen became CIO, he brought with him a product orientation, defining products for IT to drive. By developing in long-term teams, each team member was able to develop a higher level of expertise in the product area than they would have in a more traditional project structure.
Data strategy has also driven more cross-functional thinking. Done well, all strategy should invite greater collaboration across traditional silos since value is truly driven at the intersection of the disciplines. Data strategy should apply everywhere data is gathered, secured, synthesized, and analyzed – across the entire company.
Many companies have found it useful to have a leader who drives data strategy on the company’s behalf. To do this effectively, that leader (whether the CIO, the chief data officer, or another IT role) should engage leaders in other parts of the company to ensure that the data strategy is as comprehensive and useful as possible.
These are just a few areas where stronger collaboration is happening across industries and geographies. Companies that fail to take advantage of these trends risk falling behind more nimble players in their industry.
Peter A. High is the author of GETTING TO NIMBLE: How to Transform Your Company into a Digital Leader (Kogan Page, Spring 2021) and President of Metis Strategy, a management and strategy consulting firm focused on the intersection of business and technology. He has advised and interviewed many of the world’s top CIOs and leaders at multi-billion-dollar corporations like Gap, Bank of America, Adobe, Time Warner Inc., Intuit, and more.
Yasir Anwar is the Chief Technology Officer and Chief Digital Officer of Williams-Sonoma. He refers to the company as a house of brands, which include Williams-Sonoma, Williams-Sonoma Home, West Elm, Pottery Barn, Pottery Barn Teen, Pottery Barn Kids, Mark & Graham, and Rejuvenation. Technology and digital are the central nervous system of the company, Anwar notes. “We are the world’s largest digital-first, design-led and sustainable home retailer. For that, you have to bring the whole world together to serve the customer needs.”
Anwar sees the evolution of the head of technology role as key in this transformation. He notes that “traditional” CIOs have an internal operational focus. The merging of technology and digital in his title and responsibilities implies a focus on technology projects but also on outcomes. What value is being driven? “It always has to start with the customer experience,” Anwar says. “This is the merger of the technology strength, powered and coupled by customer experience, digital experiences, and the power of digital that has been unleashing in the world as we speak.”
The results speak for themselves. Williams-Sonoma has a 70% e-commerce revenue penetration, Anwar said, up from 58% prior to the pandemic. Achieving that from a technical perspective begins with a global multi-tenant platform and a modern e-commerce platform. “We are building on top of not just microservices, but micro front-end, which would allow us to have more nimble, small, modular services,” noted Anwar. This allows the company to go to market much more rapidly. The platform is used across all of the company’s brands, which gives the company an edge when it comes to innovation. The platform allows the company to test a new idea or feature on a single brand, gather data, and quickly roll it out to others if it is successful.
As with many other companies, the pandemic accelerated digital innovation. For example, Williams-Sonoma associates use a tool called Room Planner to help advise clients on what furniture fits best in which rooms. The pandemic pushed for a faster release of a customer-facing version of the tool, which enables a customer to use the measurements of a room in their house, and then fill the space with furniture from across Williams-Sonoma’s brands. This proved to be a game changer at a time when so many people focused on updating and upgrading their homes to make them more conducive to both work and personal life. The tool also provides a connection to a professional when a customer wishes to get advice or ask questions.
When asked for Williams-Sonoma’s points of differentiation, Anwar believes one of the biggest examples is the company’s in-house design. “Many other marketplaces…sell home furnishing items,” he said. “They [typically procure] those items. They’re sourcing those items from different vendors across the world, but they do not own the design of those products.” By contrast, each of the Williams-Sonoma brands have high-performing, passionate and inspirational designers. “We own and we design everything and then we work with our in-house manufacturing locations, which we have here in the U.S.,” said Anwar, “We make in America, and then we also go to our partners, wherever we need to get the quality and diversity of design manufacturing…. I don’t think there is a company that could claim that they have such a deep ownership of the design, freshness of the design, and then the quality of the design.”
Anwar and his team have focused on two key cultural pillars in their transformation. First was moving a culture of “managers managing managers” to “experts leading experts.” This entails upskilling the team dramatically to greater levels of depth of knowledge. The second was going from a focus on output to a focus on outcomes. The result has been a transformation from a traditional retailer to a true hybrid between traditional retail and retail tech. “Our business is completely running on the rails of technology,” Anwar said. “Our goal in the next few years is to [reach a point where] tech front-loads the business propulsion and growth.”
The “house of brands” approach works for Williams-Sonoma because each brand serves different phases of an individual or a family’s life. The stores, themselves, reflect those nuances. A Pottery Barn Kids will have a different look and feel from Williams-Sonoma. That said, there are many commonalities and best practices that the unified Stores team can apply across the brands. Technology reflects a similar strategy. “If you have brands which are running on different platforms, different versions, there is a ton of costs,” he said. “If you have tested something great in one brand, you cannot go live [with] another brand because there are so many nuances.” Anwar noted that at least 85% of the company’s technology stack is common for all the brands.
Each of these trends served Williams-Sonoma well, and the stock price of the company bears this out, as it has risen more than 450% since March 20, 2020, from roughly $36 per share to the current price north of $164 per share.
Anwar is proud of the degree to which the tech and digital team fostered nimbleness in the company. “The teams were ready, the infrastructure was ready, the websites were ready, the supply chain fulfillment operational teams were ready,” noted Anwar. “It is a unique situation for all [retailers]. As they say, everybody is going through the same storm, but on different types of ships.” Anwar and his team have helped Williams-Sonoma build a ship to withstand the storm, steering more readily toward opportunity and away from danger.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, was recently released. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
LoanDepot has named George Brady Chief Digital Officer, effective July 6. LoanDepot has funded more than $300 billion in loans since its founding in 2010 and currently ranks as the second-largest retail nonbank lender and one of the leading retail mortgage lenders in the United States. LoanDepot is an approved seller and servicer for Fannie Mae, Freddie Mac, and Ginnie Mae.
Brady will oversee all of loanDepot’s technology capabilities, including the leading proprietary platform, mello, with a specific focus on spearheading loanDepot’s technological innovation. Brady will report directly to loanDepot Founder and CEO Anthony Hsieh. LoanDepot’s technology team, led by Chief Information Officer Sudhir Nair, will report to Brady.
“Pushing the technology envelope is in loanDepot’s DNA,” said loanDepot founder and chief executive officer Anthony Hsiea. “Since our launch in 2010, our technology-powered products and services have changed the game for both customers and originators by providing an exceptional experience they can’t get anywhere else.”
In describing Brady’s hire, Hsiea went on to note, “George is a world-class talent whose unmatched knowledge, skills and leadership adds incredible horsepower to an already exceptional team. Under George’s leadership, I’m confident we’ll drive our world-class platform, mello, to new heights and continue to cultivate a culture of innovation and technical excellence. We have a tremendous opportunity to not only continue our innovation path as a category leader, but to shape and change the entire industry.”
“LoanDepot has a deep understanding of how technology can push the boundaries to enable both consumers and originators to seamlessly and successfully navigate the lending process,” noted Brady. “Between its remarkable track record of digital innovation, the talent and passion of its outstanding team, and the commitment of a visionary CEO to stay on the cutting edge, loanDepot is in a unique market position. The time is right to set the new standard for technological excellence and expand our capacity to meet the changing expectations of our customers.”
Brady has spent most of his career in financial services at companies like Goldman Sachs, Fidelity Investments, and Deutsche Bank. He was most recently the Chief Technology Officer at Capital One.
The company now known as Cox Enterprises was founded nearly 120 years ago by James Cox, a man who would become the Governor of Ohio. It began with his first media property, the Dayton Daily News, and developed into a media conglomerate covering many cities. It is now a $20 billion private, family-owned company with 55,000 employees. Cox Enterprises operates across three business categories: Communications, which includes Cox Cable; Automotive, which includes Manheim Auctions, Kelley Blue Book, and Autotrader; and media, which dates back to the company’s founding. Much of the media business was divested in 2020, though the company still owns the Dayton Daily News and a few other properties. Much of that part of the company was divested in 2020, though the company still owns the Dayton Daily News along with a few other properties.
The company’s chief information officer is Richard Cox (no relation to the founder). He joined the company in 2013 as part of the Autotrader.com team and took on the CIO role in October 2019. However in 2018, he took a break from his ascent in Cox Enterprises to join the City of Atlanta as Chief Operations Officer, which proved to be a seminal experience for him. The current mayor, Keisha Lance Bottoms, was early in her administration and called upon Cox to help her set things up. “We went to high school together,” recalled Cox. “I hadn’t talked to her in 30 years, so it was just this really interesting opportunity. Cox [Enterprises] allowed me to go help her at the City of Atlanta for about a year and a half. I was an executive on loan.”
During his first week in that role, Atlanta experienced the largest ransomware attack in its history. This was a few months before Atlanta was to host the Super Bowl, making the situation all the more impactful and stressful. In retrospect, Cox sees it as a blessing in disguise. “I am absolutely convinced if we had not gone through that, that Super Bowl would have been [all the more] challenging,” remembered Cox. “We were on high alert during the Super Bowl. We were being scammed on a regular basis, but because we were really prepared [due to the earlier cybersecurity attack] it was seamless. We didn’t have any security issues at all, and the city now is in a good posture.”
Cox says his time in government accelerated his progress as a leader. “During those times, you can’t pretend to be a leader, you have to prove it,” he noted. He brought back much of what he learned in taking on the CIO role at his old employer. Cox encouraged open dialogue across the team to understand how the company could improve. That led to a group called Action Speak, which increased Cox Enterprise’s focus on diversity and inclusion. “Now we have paid time off for people to vote,” Cox said by way of example. “Regardless of what your political views may be, you will be supported to vote. We’re being more intentional in terms of making sure that we look across all levels in how people of color are represented across not just our front lines, but (also) middle management and the executive ranks.”
Cox has also focused his team’s attention on reducing the complexity of the company’s diverse set of businesses. “We have worked on making sure we take a step back and build a strategy that is holistic,” he said. “In the past, we just had this tendency to work in silos.”. An early way in which he accomplished this was by conducting numerous interviews and surveys to understand how customers viewed technology. By doing more together, Cox reasoned, the customer’s experience would improve.
This approach extended to the technology that the customer might not immediately notice. For example, Cox focused on creating a comprehensive cloud strategy and incorporating better data and analytics capabilities. These priorities have improved reliability and resiliency and helped Cox identify new ways to improve customer experience.
These priorities were part of a three- to five-year plan that accelerated dramatically during the COVID-19 pandemic. For Cox, the pandemic was a chance to improve. “In these times of crisis, you can take a step back and regret what you didn’t do along the way, or you can look at it as an opportunity,” he said. “We have looked at this as an opportunity for sure.”
Communication is the essential element to pursue during these times of great change, Cox said. “What’s non-negotiable: you have to communicate. You have to be proactive, and you have to communicate relentlessly.” There are several formats that have worked best. With groups of 10 to 15 at a time, he met with every member of his team to communicate plans and listen, noting their concerns, hopes, and the like. Additionally, town hall meetings and more impromptu “ask leadership” sessions have added to the frequent opportunity for conversations and learning.
With each challenge and crisis he has faced, Cox has gained lessons and confidence for the next one. Though he hopes he won’t be tested again, Cox knows he and his team have what it takes to guide Cox Enterprises through turbulent times.
Johnson Controls has appointed Vijay Sankaran as vice president and chief technology officer, a new role aimed at accelerating product software engineering development and expanding customer solutions. This will expand upon the company’s OpenBlue digital platform, which allows the company to connect all building systems and to optimize interior environments by learning from the data the systems share. Johnson Controles is a global leader for smart, healthy and sustainable buildings. Sankaran was most recently chief information officer and head of innovation at TD Ameritrade, with responsibility for digital strategy, customer platforms, software engineering, technology operations, cybersecurity, data management and analytics, and enterprise innovation.
“Vijay brings a wealth of strategic software experience to Johnson Controls and is ideally positioned to strengthen our solutions and market competitiveness through world class software engineering,” said Johnson Controls chairman and chief executive officer George Oliver to whom Sankaran reports. “In this new, enterprise-wide chief technology officer role, Vijay and the software engineering team will accelerate our innovation, solve for unique customer outcomes and deliver for our customers on the key secular trends of sustainability, energy efficiency, and healthy, safe and connected smart buildings.”
Sankaran’s is a newly created organization, with software engineering team members from across Johnson Controls global portfolio reporting into it. His team will accelerate and unify the product software engineering development efforts creating common software architecture to further drive the enterprise software technology strategy.
“Vijay’s role as CTO will be pivotal in driving continued growth and expansion for our OpenBlue digital platform as all of the elements of a building’s operational technology become connected,” said Johnson Controls Chief Customer and Digital Officer Mike Ellis. “Through OpenBlue, that connectivity enables us to leverage machine learning and artificial intelligence, as well as edge computing technologies, to predict patterns and trends, and provide positive customer outcomes for sustainability, energy efficiency, security and healthy building environments.”
“I couldn’t be more excited to have this opportunity to lead customer facing engineering as no other company has the breadth of capabilities to provide healthy, smart, sustainable building environments,” said Sankaran upon reflecting on this new opportunity. “The Johnson Controls team already successfully developed and rolled out an outstanding platform, OpenBlue.”
Sankaran’s role is to integrate software engineering across the company in a holistic way so that we can further expand the capabilities of OpenBlue and leverage the breadth of the company’s building systems portfolio. When asked about the technologies that will be most important to this journey, he noted, artificial intelligence, machine learning, data analytics and connectivity, each of which he referred to as “game changers” to help customers meet their goals on sustainability, energy efficiency and healthy, smart buildings.
Prior to working at TD Ameritrade, Sankaran held executive roles at Ford Motor Company from 2001 to 2013, including IT Chief Technology Officer, Director of Application Development, as well as leadership roles in architecture, emerging technologies, data and analytics, and enterprise transformation programs.
Sankaan has a B.S. in Mathematics and Computer Science from Massachusetts Institute of Technology and an M.B.A. at Duke University Fuqua School of Business.
The $8.4 billion revenue network infrastructure provider CommScope has promoted its vice president of digital transformation, Praveen Jonnala, to the chief information officer role, effective immediately. Jonnala has been with the company for more than a dozen years.
In his prior post, Jonnala led all aspects of strategy, development, and delivery of the company’s digital transformation efforts partnering with sales, marketing, supply chain, manufacturing, finance, HR, and quality.
CommScope is focused on developing its next-generation wireless networking and communications infrastructure businesses. In recent years, CommScope grown tremendously through acquisition, requiring simplification of business processes and enterprise systems. This has included steps like consolidating to a single, global ERP to improving operational efficiency and improving customer experience digitally. Areas that Jonnala and his team will focus on in the near-term include enhancing the company’s product catalog and better tracking of product orders. The business teams will have access to more artificial intelligence capabilities to build better revenue projection models and predict and manage global supply chain risks.
“Working for a leading edge technology company in the networking equipment space, CommScope’s CIO plays a critical role in not only optimizing our own operations, but also serving as a test bed for cutting-edge technologies and new customer solutions,” said Alex Pease, chief financial officer. “Through advanced analytics, automation, machine learning and artificial intelligence, Praveen will help us optimize our business operations as well as serve customers better. With his depth of experience and broad knowledge in advanced technologies, Praveen is uniquely positioned to drive value both within CommScope and externally.”
“Establishing the role of IT as a business and innovation partner is critical given the rate of change in our business and customer expectations,” noted Jonnala. “I believe we have a great opportunity to add value through technology across CommScope—by providing an exceptional digital customer experience, partnering with product teams to drive more software capabilities into our products, and transforming our factories and supply chain for improved quality and reduced costs. I am excited about Artificial Intelligence and its transformational potential, particularly in our product development, manufacturing and customer service operations. Building hybrid AI teams made up of both IT and business partners will unlock new opportunities for CommScope and our customers.”
CommScope has Global IT capability centers in the U.S., India and China. Having global IT centers enables the company to tap into the best talent across the globe.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, will be released in March 2021. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
Saul Van Beurden is the Head of Technology for Wells Fargo, a role he has had for nearly two years, after having spent time as the Chief Information Officer of Consumer and Community Banking at JPMorgan Chase. He commands a budget of roughly $9 billion and has a team of 40,000 technologists reporting to him. His purview includes all software developments, IT operations, infrastructure and cloud enablement and cybersecurity. His is a role of tremendous consequence in the bank to say the least.
The top technologists at major companies are most often referred to as chief information officers. They are sometimes referred to as chief technology officers or as chief digital officers. The “head of technology” title is an unusual one. When asked how the company and he arrived at it, he noted that the reason was that when he joined, there was already a chief information officer and a chief technology officer, both of whom would report to him. “For me, it’s not important the title of a role,” noted Van Beurden. “It’s how you act on that role and the responsibility that you have [that is more important].”
Upon joining the company, Van Beurden elected to develop a plan to play both “offense and defense,” as he put it, comparing it to coaching an American football team. “The first role is what you could call the defensive role and is the first operator role,” he said. “This is all about making sure that the plan runs, that the things go. The second role is an offensive role. This is what we call the business enabler role, where it’s more about how do you decrease risk for the bank? How do you maximize revenue? How do you get better return on investments?”
To bring this to life, early in his tenure, Van Beurden and his team defined what he refers to as a “6S Strategy.” They are:
Relative to skills, he highlights that it is critical to build a team that has the skills of today and grows the skills of tomorrow, suggesting a level of learning agility necessary to accomplish the company’s mission. This is the path to being a “trusted operator,” as he put it. “This is all about upscaling and reskilling your workforce,” he said.
Needless to say, security is an important skillset for any enterprise, but especially so for a major financial services company that has so much sensitive data flowing through it. “You could say the only thing that a bank sells is trust: the fact that it’s safe to have your [money and data] with the bank,” said Van Beurden. “Security comes down to cybersecurity, to controls that you need to have in place, and so forth.”
With 90% of all transactions taking place digitally across Wells Fargo, stability is sine qua non. “When the digital app or the online desktop version is down, the bank is down,” Van Beurden underscored. “You need to have a stable shop. That stability is created by more and better resiliency. It’s all about automating the processes on the IT operation side, and with rationalization of your applications.” He noted that these first three “S”s make up the defensive play.
The offensive play begins with scalability. Van Beurden highlighted that this requires on-demand service, so that as transaction volumes increase, the technology seamlessly scales up and then can scale back as necessary.
Next is the focus on speed. As a long-time financial services executive, Van Beurden noted that banks are slow, with the behemoths like Wells Fargo often taking more than a year to deliver programs. He has driven his team to halve or even to cut the time to a third of that. He painted the picture of the typical way of doing things, and then offered the improvement. He highlighted the typical process with many handoffs along the way. “First product requirements, and then the prioritization with finance teams, and then it goes to a PMO, and then it gets to a project leader, and then IT intake, and IT intake to design, to technical design, to developers, to test, to production,” Van Beurden said. “You already near 60 weeks’ worth of work right there.” The improvement comes through multifunctional teams that do not require inefficient handoffs. “The analyst with the product idea sits down with the engineer who is supposed to build a feature, who is also the one who can directly put it in production because he or she is using DevOps tools like we have today. You take away that whole notion of handoff, handoff, handoff.” Next, he noted that process automation is critical. He highlighted that speed is the key differentiator to maximize revenues and to gain advantage over the rest of the market through better return on investment.
The final “S” is satisfaction. “You can do all the other things, but if the end customer is still not happy with and app [for example], and the uptime of the app [are not appropriate], we have failed,” Van Beurden said. “Satisfaction is, for us, the cornerstone of the strategy.”
Van Beuren hoped to simplify things from a strategy perspective to validate progress relative to each of the six “S” categories. By maturing and driving value in each area, the goal is to deliver better capabilities for innovation. The technology team has re-infused the company with the art of the possible. That innovation is based is also structured, in this case into three pillars.
The first pillar is an innovation unit that reports to a peer of Van Beurden’s, Ather Williams III, who is the Senior Executive Vice President, Head of Corporate Strategy, Digital Platforms and Innovation at Wells Fargo. “[Williams’] team constantly looks for what is the next best experience for our customer,” said Van Beurden. “What is the next best feature that we need to develop? They also look a little bit further ahead, like three years, four years into the future, and start to see what is coming and looking around the corner and making sure it is getting adopted.” That team works in an integrated fashion with software engineers on Van Beurden’s team, ensuring there is alignment and a strong collaboration between the teams.
The second pillar is research and development on the technology side. This team is often tasked with the most deeply technical or complicated innovation topics. The team has assembled an ecosystem to stimulate the thinking necessary to tackle big topics, partnering with institutions such as MIT and Stanford. Van Beurden indicated that the R&D team focuses on what he calls “the magical cocktail of artificial intelligence and machine learning, data and compute.” He believes that the future of the bank will be defined at the intersection of these technology disciplines.
Van Beurden offered examples of how Wells Fargo is leveraging each. “We need to explain the outcomes of AI models. If we get a lending request of a customer, and we say yes or no, we need to be able to say why we said yes or why we said no. We cannot say, ‘There was the model and it ran it and we do not know [why the decision was made].’ We need to be able to explain it.” The team has been able to monitor and explain the outcomes of the models while fine tuning them where necessary. With MIT, they have developed a mechanism for AI to explain AI. “This is how we solve the problem of non-explainable AI by putting AI on top of it by which it becomes explainable,” said Van Beurden.
Though many companies think of big data as an operating principle, Van Beurden thinks about small data. “Small data is really finding that smallest significant set of data that will bring you to [the right] outcome, [which may leverage] synthetic data, instead of all the production data that we use for this,” explained Van Beurden. “Can we do synthetic data to come to the same outcome?” In concert with the research institutes, his team is hard at work on this.
The final pillar is related to compute; more specifically, the fast advancements Van Beurden’s team is making on compute power. “That speed that is coming with quantum compute cannot [be expressed] in factors like 10, or hundreds or millions,” he noted. “It’s [beyond] what we think is possible to be done. It doesn’t matter when it’s ready. We do not want to be the one that has regrets that we didn’t do it from the start, and that we weren’t there if it becomes successful and production ready.” There are two areas of focus as his team drives this journey: trading algorithms and cryptographic keys. The former will aid the bank in fostering faster trading. The latter will protect the bank from the time when all possible passwords can be determined at lightning speed by bad actors due to dramatic advances in compute speed.
Though Wells Fargo has taken its lumps in recent years, Van Beurden and his team have positioned the company to gain advantages once again as an innovator.
Subway restaurants announced that Donagh Herlihy has joined the company as of May 3 as its new Global Chief Digital and Information Officer. In his new role, Herlihy will oversee the company’s global technology teams and initiatives to deliver modern, timely and effective platforms for Subway franchisees and guests.
Herlihy has held technology, digital and e-commerce executive roles at companies like Bloomin’ Brands, Avon Products and the Wrigley Company. His expertise includes digital innovation and strategy, guest-facing technology and international growth.
“We’re thrilled to welcome Donagh to the Subway team,” said Subway Chief Executive Officer John Chidsey. “His extensive knowledge and understanding of QSR brands and restaurant technology will allow us to accelerate our digital transformation, ultimately resulting in a better guest experience as well as revenue growth and operating efficiency for our franchisees.”
Herlihy left his prior post as Executive Vice President and Chief Information and Digital Officer at Bloomin’ Brands in February of 2020, and had been spending time on a portfolio of activities from investing in start-ups and serving on the boards of various companies. He was lured back into a full time role as a technology and digital executive because of Subway’s transformation story which is unfolding, including significant improvements to the digital experience for both guests and franchisees, enhancements to the Subway App & Delivery, the company’s loyalty program, and other digital platforms that will allow Subway to personalize guests’ experience over time. “My most immediate goal, in partnership with the technology leadership team and the broader organization, is to plot that path forward to ensure we meet the needs of our evolving business,” said Herlihy. “That being said, we also need to remain focused on simplifying and reinforcing the core systems that enable our Franchisees to run a smooth and efficient operation—that in itself is a significant effort given that we have nearly 40,000 stores in our system.”
Furthermore his interregnum between full-time roles started at the beginning of the pandemic through to last week. That gave him an opportunity to analyze the reset in consumer behaviors that has happened during the pandemic. As a result, he is a believer in serving Subway customers when, where and how they like, while equipping franchisees with the tools they need to drive traffic to their restaurants. “Before I arrived at Subway, the team drove incredible growth in our digital business with sales increasing over 115% year-over-year, and this momentum has continued as consumer behavior evolves even further,” noted Herlihy. “One component of this growth was the launch of Contactless Curbside Pick Up at over 14,000 of our Subway locations nationwide, at the pace of 1,800 restaurants per week—a massive undertaking from both a technology and broader operations perspective.”
When asked about his plans for the future, he noted that the company’s digital roadmap is focused on the guest with the priority of meeting customers where they are. “That means exciting non-traditional programs in the pipeline, efforts to bolster our loyalty program, which grew considerably in 2020 to more than 27 million, and significant enhancements to the ordering experience that are making it even easier for guests to enjoy their favorite Footlong,” said Herlihy by way of offering examples.
Herlihy has been based in Florida since joining Bloomin’ Brands. He will maintain a home there and split his time between is home office and the company’s headquarters in Milford, Connecticut.
John Hinshaw has held executive positions in technology and operations at a diverse array of companies, from HPE to Boeing to Verizon Wireless. Thus, he has been at high level positions in business-to-consumer, business-to-business and business-to-government companies. He has worked in New Jersey, Chicago, and most recently in Silicon Valley. It was Hinshaw’s last stop at HP, then HPE after the split of the founding company of Silicon Valley, that broadened Hinshaw’s technology ecosystem most dramatically.
In late 2019, Hinshaw added another industry to his resume, as he took on the role of Group Chief Operating Officer and Group Managing Director of HSBC, a global bank with operations in roughly 65 countries and over $500 trillion in payments processed in 2020. Hinshaw had experience in financial services by virtue of his more than five years on the board of BNY Mellon, but he had never been an operator at a bank before. The bank viewed his outsider status as a tremendous asset and Hinshaw notes that collaborating with seasoned colleagues while bringing his own fresh perspective has been a recipe for innovation.
“You certainly need great leaders in key roles who have [deep] financial services experience,” noted Hinshaw. “One of the things I have enjoyed doing is [building bridges with] folks who have 25, 30 years of experience with fresh eyes to look at some of the challenges [the bank faces].” He notes that many of the fintech companies that have emerged as new leaders elsewhere in the financial services industry often are founded by outsiders.
Like those fintech entrepreneurs, Hinshaw is passionate about technology and the ability to enhance customers’ and employees’ experiences digitally with HSBC. In fact, he was convinced to take the role when Mark Tucker and Noel Quinn, HSBC’s Chairman and CEO, respectively, indicated that his mandate was to drive true digital transformation across the company. That means “transforming the bank from where we are today to a digitized bank that is easy to do business with for customers and that our colleagues can have a better experience with,” said Hinshaw. “That would leapfrog a lot of our traditional competition in banking, but [HSBC would] also be able to fend off some of the fintechs that are getting into banking.”
Hinshaw oversees 50,000 technologists and has a budget of over $6 billion. But he has also developed partnerships with fintechs and other startups around the world, which can provide HSBC with new technologies while gaining access to the bank’s platforms, customers, and history “A lot of the new innovative technology is cloud-based, it comes out of Silicon Valley, it comes out of the fintech community,” Hinshaw said. “Bridging those two worlds is really, really important. That is one of the strengths I bring to HSBC, having lived and breathed Silicon Valley for a decade.”
In recent months, Hinshaw helped broker a partnership between HSBC and Google to help detect and prevent money laundering and financial crime using better analytics. “We process trillions of financial transactions per day and figure out which of those might be criminal or fraudulent in nature,” Hinshaw said. “That takes a lot of computing horsepower, it takes a lot of data and analytics.” By partnering with Google Cloud, the company can remove many of the false positives that naturally occur when analyzing trillions of transactions. “We are doing something that no other bank has ever done in looking at that financial crime challenge, and only really Silicon Valley and the way they think, the way Google thinks and technologists think, can help us bridge that gap,” noted Hinshaw.
Hinshaw has pushed the bank to invest in startups as early as in the angel and series A rounds of investment. That way HSBC can influence the evolution of products to a greater extent, which forms a virtuous cycle of sorts. “If we like a technology, we trial it,” he said. “It works well for us, we make an investment so [the startup] can expand.” HSBC can then test the startup’s technology at scale and help it grow, and usually takes on a board or advisory role to do so. “It just builds on itself. They get the advantage of a working product in one of the biggest banks in the world; we get the advantage of helping to guide and direct their capability, and if we make money on the investment, all the better. We will reinvest it in another opportunity.”
Like others, Hinshaw sees the pandemic and quarantine as an extraordinary accelerator to digital transformation. With customers not having a choice but to operate digitally, it led to massive adoption of the company’s digital capabilities. “It really did change the way we look at the digital adoption curve,” he said. “I think we probably leapfrogged three to five years in the digital curve, and it is not going back. Nobody wants to use paper.”
Another learning for Hinshaw is the effectiveness of virtual work. At a time when financial services companies on the whole have been more conservative in their approach to hybrid work in the future, he sees things differently. He noted that the pandemic proved that people could be much more effective and efficient at times working from home. Time in the office, he believes, needs to be purposeful.
“The only reason to come into a headquarters office should be for collaboration, innovation, co-development with your colleagues, socialization with your colleagues, to get to know them because we have not spent time with them. Connecting with customers, connecting live with suppliers [should also be done in person].”
Hinshaw notes that this has been the most interesting among the many executive posts he has held, as it draws upon all of his past experiences in profound ways.
The pace of change is faster than it has ever been, and yet it is the slowest it will be from this point forward. There is a quotation that is often mis-attributed to Charles Darwin that states, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” The father of evolution may not have said this, but it is an important point that applies to companies as much as it applies to species.
As you think about once successful companies like Circuit City, Blockbuster and A&P, each leaders in industries that they played in that no longer exist, each failed to adapt to changes, even though each could have pivoted to where the industry or customers’ tastes were going.
In 1955, the average time a company on the S&P 500 would remain on the index was 61 years. Fast forward to today, and it is closer to 15 years. Since 2005, 52% of the companies on that index have fallen off of it entirely. This is a remarkable tale of creative destruction, but is also is tale of innovation at a pace and scale that we have not seen before as rapidly scaling organizations take the places of the old stalwarts.
To quote Dow’s Chief Information and Digital Officer Melanie Kalmar, “What separates successful companies from those that have faded? Nimbleness.” She is not alone in this focus. When Shamim Mohammad, the Chief Information Officer and Chief Technology Officer of CarMax, was asked about the trends that excited him most looking three or four years out, he responded, “I do not know how the world is going to be in three or four years. It is hard to predict. What I am trying to do…is position [CarMax] so that we are ready to take those changes and be nimble, agile, and responsive: an organization that can move quickly. That is what I do because I cannot predict what is going to happen. I have to position [CarMax] to be that nimble company.”
In my new book, Getting to Nimble: How to Transform Your Company into a Digital Leader, I highlight five themes that are essential to harness to foster nimbleness:
Relative to people, you can do worse than to emulate the great practices of Rob Alexander, who has, for 14 years, been the Chief Information Officer of Capital One. He recognized early the changes that the digital age were foisting upon companies born in an earlier era. He posed a difficult question to himself and his team: “How do you become a great technology organization if you do not start as one?” Alexander set the goal to develop an engineering-centric technology division that would be oriented toward building technology rather than simply buying it and managing it. He wanted the organization to be oriented around a digital-first mentality.
Alexander and his team started by recruiting a core group of engineers who would form a software center of excellence. These people were recruited based on a pioneering spirit that each possessed. They would be the proselytizers for others.
Alexander and his team developed a curriculum to train existing employees on the technologies of the future, noting that learning agility was another key ingredient to cultural nimbleness. Finally, the company developed the gold standard of intern programs, regularly being ranked as number one on Vault.com’s list for internships. By giving great engineering and computer science students meaningful work to do in an innovative environment, the company began to compete with the stalwarts of Silicon Valley for talent, and the intern program allowed the company to get to know a wide swath of would-be employees deeply before handing out full-time offers. The yield on those offers rose, and the best among those new employees were given opportunities to rise quickly through the ranks of Capital One. The company’s nimbleness gave it a reputation as a talent factory that many wanted to join.
Relative to processes, retired four-star general, Stanley McChrystal, has become a guru to CEOs and other leaders on how to foster nimbleness. He recognized that the pace of change was such that if the American military did not modernize, it would not be successful in its critical missions around the world. The military had been silo’d by design, but McChrystal fostered collaboration across the traditional silos, bringing elite members from multiple branches of the military together.
He now counsels companies to do the same, pushing them to foster innovation through better collaboration. Process changes such as agile development, DevOps and the product orientation that many technology and digital organizations have instituted require non-traditional collaboration across silos and ownership of ideas from cradle to grave to a greater extent. Many companies have seen rapid increases in their ideation, throughput, and innovation success as a result.
Relative to technology, Rob Carter, Chief Information Officer of FedEx recognized that the crown jewels of the company were aging to the point where they might be the source of the company’s downfall if a new path forward were not forged. He had the humility to recognize that his team’s work for which they were rightly so proud had to be changed dramatically. His pathway to nimbleness revolved around five steps: first leveraging enterprise architecture to get a full accounting of ones technology portfolio, warts and all. Modernization only begins when a full documentation has been concluded. Second, he established a cloud-first strategy. The clouds flexibility, allowing an organization to scale up and back as necessary was sacrosanct. Third, Carter and his team focused on loosely coupled technology so that changes to one platform would not necessarily require changes to others. The use of microservices and application programming interfaces (APIs) also had many security benefits to boot. Lastly, he focused on standardizing the technology wherever possible. This is easier said than done in a company that is part airline, part trucking company, part logistics organization, part office services enterprise, and more. That said, he pushed for a common core of technologies to set standards to achieve greater simplification while de-risking the organization through minimized complexity.
Competition today is less company-to-company. Rather, it is ecosystem-to-ecosystem. Angela Yochem, the Chief Transformation and Digital Officer of Novant Health has been a model of building ecosystems to marshal innovation at levels beyond what one’s team alone might accomplish. Yochem has an unusual ability to meet an entrepreneur, learn about his or her company and make rapid judgements about potential mutual value that might derive from partnership. An example is Zipline International, the world’s only on-demand drone logistics service. Along with other technology and digital executives, she met with the company’s founder and CEO Keller Rinaudo to hear the story of the company’s genesis and its mission, at the time primarily helping deliver medical supplies to people in need in countries that suffered from road infrastructure issues, for example. Yochem translated what she heard to Novant Health’s business and saw an opportunity especially in light of the pandemic. She and her team became the first organization in the U.S. to be granted a Part 107 waiver by the U.S. Federal Aviation Administration (FAA) to use drones for distribution of medical supplies for Covid-19 pandemic response. The vision is growing, as over the next two years, the partnership plans to expand beyond emergency operations in the Charlotte area, where Novant Health is headquartered, to regular commercial operations to serve health facilities and, ultimately, patients’ homes across North Carolina. Nimble leaders and organizations recognize great ideas, translate their relevance to one’s own company, and build the partnerships that can make a difference rapidly.
Finally, during a time of such rapid change, one might think that strategy is becoming less relevant. There is an African proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” One might add to those important words, “and take a map.” The company’s strategy is the map. Especially during times of great change, having a strategy at the enterprise level translated to the divisions and functional areas and to the technology and digital team through to data strategy is even more important. Granted, changes in the economy, the competitive landscape, and one’s own company, to name three of many factors, will require modifications to those plans as the assumptions behind the plans require changes, but having the well-articulated plans is essential.
Shailesh Prakash, the Chief Information and Product Officer of the Washington Post underscores this need. A decade ago, when he joined the company, it was languishing: ad revenues and subscribers were decreasing at an alarming rate. Prakash helped set the strategy that would bring the traditional print and digital sides of the house closer together. In so doing, he set the Post on a path to a better experience for readers and for the company’s reporters and columnists. He discovered through his collaboration with his colleagues that the company’s publishing platform was antiquated and a source of frustration. Prakash set a strategy to improve the platform. In so doing, he leapfrogged the industry to such a dramatic degree that it occurred to him and to his team that the platform, itself, could be a business for the Washington Post. Arc Publishing was born, and it is now on a path to being a $100 million business annually for the Post. Nimble leaders set bold and well-articulated strategies that rally one’s team to drive new value to one’s company.
Please note the examples given: a financial services company, the American military, a courier conglomerate, a healthcare company, and a media organization. None of these are traditional technology companies. They are not digital native companies with built in advantages of a recent founding. These are likely companies yours, each in challenging environments. Each drove change rather than being driven by it. This is essential in a time when change is coming so rapidly. Only the nimble will survive and thrive. Emulate the lessons of these great leaders.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, is out this month. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
