Associa CIO Andrew Brock expanded his C-suite mandate by parlaying his IT purview to helm proptech spinoff HOAM Ventures. Here’s his advice on doing the same.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy
Early in his career, Andrew Brock was told by a mentor that, to reach the C-suite, you have to take assignments across the various drivers of a P&L: marketing, operations, information technology, and so on.
At the time, Brock had held finance-related roles of increasing responsibility at household brands such as Kraft and PepsiCo at the time, and the advice piqued in Brock a curiosity that has since marked his career. It led him to accumulate cross-functional experiences that eventually landed him at Associa, which, serving 7.5 million homeowners globally, is the world’s largest residential property management company.
In rather short order, Brock was tapped to lead the launch of Associa’s first client shared-service center, and the success of that initiative propelled him to the perch of CIO, where he inherited corporate IT and the remnants of a forgotten software development group that came via a previous acquisition. Again, his curiosity was piqued.
“I wondered if we could use the development group to start building our own products,” Brock explains. “We were paying a lot of third parties to provide digital services to our clients.”
As it turned out, they could, in fact, build their own products. Soon after repurposing the development group, Brock and that team launched the company’s first digital product: a solution through which residents could pay their HOA fees digitally. This solution, along with other early products the team developed, significantly reduced costs, inspiring Brock to consider whether these products might be commercially viable on the open market.
The opportunity, as Brock explained, was that the market was fragmented. Associa, as large as it was, owned less than 10% of the residential property management market, even as the market leader. This intense fragmentation meant fewer barriers to entry for entities looking to introduce new solutions, so Brock and his team determined that “if we built a product that worked for us, it could also work for the open market.” And they were right. As these products built a client base and a sales team was mobilized, it became easier to cross-sell more digital services, and by doing so, they created for Associa not only a new organic revenue stream, but a platform by which they could scale their acquisition growth strategy — which, in the era of prop-tech, focused increasingly on digital services.
Once the operation was earning profits and boosting EBITDA, Associa’s leadership formalized what had started as a few experiments into a proper business unit, and to address the reality that their customers consisted mostly of their competitors, they spun off a new entity, called HOAM Ventures, tapping Brock as president and CEO, a title he would add to his existing one Associa’s CIO.
If you, too, are a CIO seeking expanded roles in the C-suite, you’re likely wondering: How can I emulate this strategy? Brock, who admits that luck and timing have been paramount in his career, modestly offers the following advice.
Brock says he never would have earned more responsibility had he not brought order to IT proper. “Our systems had to be up, stable, and secure, and if any of that went off the rails, I would not have had the time or confidence of my peers to pursue this path.”
He emphasizes the importance of hiring leaders that can “manage the operations as you are leaning into the white space,” and he rejects the notion that, by empowering such a team, you might render yourself redundant. “It can be scary letting go, but it’s a necessary step to allow the space required to determine your beachhead, and, ultimately, scale any business.”
Brock suggests that, if, as a CIO, you lack a cross-functional upbringing, you can build these aspects of your resume in myriad ways. For example, you could volunteer to lead a large acquisition integration, which Brock sees being especially relevant. “You’re analyzing a company, function by function, examining their merits, and figuring out how to put the pieces together to maximize value.” Moreover, the highly cross-functional nature and visibility of integrations can only help you gain relevant experience, he says.
If your company isn’t acquisitive, Brock advises joining the steering committee of another cross-functional transformation program, an opportunity available to most CIOs. When such a program is executed thoughtfully, it wins hearts and minds, adding stamps to your functional passport.
Even with the right team and resumé, ascending to “CIO plus” requires some self-advocating. “Nobody is going to ask you to take on this role,” Brock explains. “There’s a lot on you to make your intentions known.”
For Brock, this meant talking with CEO John Carona. Brock recalls expressing early on that, while he was grateful and honored to serve as CIO, he was open to more. “I shared that if the opportunity were to present itself, I was keen to explore a broader leadership role,” he says.
Additionally, as he was coming up, Brock carefully cultivated his brand, so that when he would in fact get the chance to expand his responsibility, his peers would support his candidacy. “Of course, I’m the technology specialist when it’s needed, but that’s not how I brand myself or operate within the organization,” he says. “I try to ask operational and budgetary questions that demonstrate my grasp of the business. If you aren’t intentional about this strategy, you could get pigeonholed.”
Luckily, as CIO, you have a unique purview in the organization. “You’re the only person that can see holistically across the organization and how all of the systems, functions, and process work together,” Brock says.
By coupling this view with your responsibility to chart the company’s digital transformation, you discover new avenues to create areas of opportunity, he points out.
“There’s bound to be customer and business needs adjacent to technology that haven’t been explored: This is your chance to stake your claim. You have to discover it, want it, and raise your hand,” he says.
The US Division CIO of Wacker Chemie says tech chiefs should think beyond run, grow, and transform, and consider how they are uniquely positioned to promote social values across the business and beyond.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Duke Dyksterhouse, Senior Associate at Metis Strategy
CIOs hear constantly that their position has evolved, that it’s now a business position. But whenever this is pointed out, the emphasis tends to fall on the tactical responsibilities of such a position—the “plan, build, and run” of it all. But just as important now are holistic matters of people—diversity, inclusivity, employee welfare, and so on, and perhaps few technical leaders have concerned themselves with these as enthusiastically as Raj Polanki, the US Division CIO of Wacker, the seven-billion-dollar German chemical manufacturer, and the co-lead of its DEI council.
“The way I see it,” he says, “the CIO role obviously needs to make sure the business can run while contributing to growth and transformation. All those are well and good, but the current, evolving CIO role, it’s not just about going from technology to business, but from business to people. As a technology executive, I have a unique position to contribute to the human aspects of it all…DEI aspects.” And accordingly, since coming to Wacker in 2018, Polanki has worked both to embody Wacker’s DEI principles and, alongside his fellow council members, to inject such principles into the organization’s ethos.
Now, he hopes to amplify his impact by sharing some of what he’s learned with other technical officers who might themselves hope to make a bigger and longer-lasting impact. “What leaders get wrong about DEI is that it concerns much more than what can be observed by the naked eye. We are all shaped by our experiences, and the better we understand each others’, the more we can achieve.” Indeed, Polanki suggests that any leader can reap better outcomes across all their responsibilities by embracing this philosophy. Here he offers five steps for doing so.
Be the change you wish to see. It’s a well-known adage and clearly present in Polanki’s first bit of advice: “Start with self-awareness. Look inward.”
Embedded in this philosophy are two propositions. The first is that you do in fact want to change something. Therefore, a good place to start might be to understand why you do. While it’s fine to cite common talking points about the benefits of DEI, you’ll find yourself more motivated (and therefore more able) to employ such principles if they mean something to you personally. Polanki, for example, found inspiration in his background, in which technology and business overlapped significantly. “I’ve always thought in terms of how I could bring these things together to create real value for people, and value can mean many things. I recognized that Wacker’s DEI council would present a great opportunity to provide an important value pulling on both business and technology.”
The second proposition is that you must embody the change, and as Polanki suggests, you can do this in few ways more effective than to consider your own unconscious biases. He implores leaders to constantly ask themselves: “Am I jumping too soon to a conclusion? Am I assuming certain things?” And if you think you don’t have any biases, congratulations: You just discovered your first. It’s called objectivity illusion—the belief that we are more objective and less biased than others—and it underscores the gravity of Polanki’s advice. Everyone has biases, and they shape our societies. They lead us to elect taller CEOs, hire certain candidates, and sink money into failing projects. According to one survey, unconscious biases may cost the workplace $64 billion annually. Having biases doesn’t make you a bad person, but making yourself aware of them, as Polanki suggests, can free you to make better decisions and thereby become a better leader.
Next, start embodying your principles among the circles that you immediately influence—like the teams you oversee. When Polanki came to Wacker, he inherited a team whose previous manager had served the company for thirty years. Although that leader had left behind a solid team, Polanki wanted to suffuse it with his own ideals, two in particular.
“One was self-respect and respect within the team,” he recalls. “Yes, I had a list of things they could do better, but I started by respecting [the team]. I used not just my words, but showed it in my actions. I recognized them for the things they didn’t even know they were doing well, and with time, they would even come to me and say, ‘You don’t seem to get upset easily. You really maintain your composure.’” Soon, Polanki’s reports began imposing the same warmth, patience, and appreciation on their own teams, and the respect collectively expressed across the department grew steadily. It also nurtured Polanki’s second ideal, “customer oriented.”
“Because I came from an outside consulting and value-driven mindset,” explains Polanki, I put the customer in the front. I would tell my team, “If the business comes to us with a problem, we’re not trying to fix the problem alone; we’re trying to save their day to be more productive and efficient. That means we directly affect the business. We are not just a back office. We are sitting with the business. We are partnering with them to support them, and we should take pride in what we do.” He recalls evoking a sentiment he had once heard from Starbucks: “I asked them, if ninety-nine out a hundred coffees are right but the hundredth is wrong, is that acceptable? I explained that this was part of taking pride in yourself.”
And pride they took. Together, these two ideals—respect and customer oriented—energized the team and propelled what became a virtuous feedback loop. It improved morale as the teams began to celebrate small wins and to believe in themselves as more than order-takers. And the changes showed. Polanki recalls that the business partners would remark, “Your team is really solving issues, and they’re very approachable.” And in one of the team’s internal customer-satisfaction surveys, they scored 97% positive feedback—one of their highest scores ever.
After you’ve proven that you can instill DEI principles among your own teams, you can become a catalyst for wider adoption through mechanisms like your company’s DEI council. Or, if your company has no such council, you can start it.“The first thing you’ll want to do, if it hasn’t been done already, is specify the council’s DEI principles. And don’t squander this opportunity”, warns Polanki. Too many councils adopt principles that are either generic or otherwise similar to another company’s. Contemplate what DEI really means to your organization and connect it to the goals and mission of the enterprise. At Wacker, Polanki and his fellow council members conducted extensive internal research to ensure they did just that, and in the end, even became an advisory council to the executive team.Next, you have to spread the word—and show your employees that you stand behind it. “After we had defined our principles,” recalls Polanki, “we published them on posters, which were put up across Wacker’s offices. They had our signatures on them, and the executives’, so people knew we meant it.” Polanki and his council also took advantage of town halls and modified several of the company’s programs—including the leadership and management development programs and new-hire orientation—such that they incorporated DEI principles. “We even hired an external person to help us connect the content to the programs.” They also dedicated a SharePoint site and several communication channels to the cause, and instituted internal advocacy groups, including one for LGBTQ+ members and one for veterans. Polanki says more will follow.
Once you’ve spread your principles, and others have started acting on them, you can further amplify their effects, says Polanki, by “starting with the data.” It makes sense. ESG-related efforts are driven heavily by metrics, and so few tools can propel you toward your DEI goals as forcibly as data can. And as a technology leader, few have the power that you do to mobilize that data and to do so not only for your department but for others.
Polanki recommends that, above all, to employ your data more meaningfully, you make it more visible, which you can do even by simply starting conversations with other leaders, since many of them will hesitate to ask what’s possible. He recalls one such conversation with Wacker’s very own ESG team: “We asked them, what can we do for you? What’s on your mind? And it was only then that they said, ‘Well, actually, we’re having a lot of containers shipped to California and we’re concerned about the waste.’ I explained that we could give them some visibility by pulling data about those containers—what materials they contain, whether they’re recyclable, and so on. They didn’t know we could do that, and it helped them act much more effectively.”
The other tool is longstanding data solutions, like dashboards and accompanying analysis, both of which Polanki’s team constructed for Wacker’s Environmental Health and Safety group. As a result, the group could now get, in mere hours, data that once took them at least days to collect. And it came with trends, to boot. “We could now ask questions like, okay, where is it happening? Is it a seasonal thing? Why does this one area have so much variation?”
Polanki plans to resign as the co-lead of Wacker’s DEI council later this year. He feels that he and his fellow members have built a sturdy foundation from which the next leaders can further expand the council’s influence. “If you think in terms of crawl-walk-run,” he says, “we’re finally walking. The next council can take it further. They can set up new resource groups, engender more inclusivity, and start to have a more direct impact on the business.”
Yet Polanki’s far from finished improving the welfare of the people around him. A graduate of University of Michigan’s Ross School of Business, Polanki has been approached by that community to become more involved with certain university activities, like becoming a resident council member for the university’s Flint division technology and innovation center. When asked by the university, Polanki asked Wacker whether they saw any conflict. They didn’t, and encouraged him to participate, knowing that his doing so would advance their own mission to “make the world a better place with our solutions.”
This outward growth demonstrates Polanki’s last bit of advice for looking beyond your traditional responsibilities as a technology leader. “Be thinking, can I help my communities where we operate? Can I partner with the local community? With universities? How can we make a bigger difference?” Leaders who ask these kinds of questions and embrace these responsibilities, he says, will find they create better results across the board, in part because they have wide-ranging intangible effects.
Highlights from our recent Metis Strategy Summit are below. Check out our Youtube channel and Technovation podcast in the coming weeks for recordings of the conversations.
Organizations across industries are moving beyond initial AI experimentation, focusing on driving implementation, proving and measuring ROI, and developing the next generation of talent as they apply AI to a broader number of business challenges.
As multiple executives emphasized, strong data foundations are essential to any successful AI implementation. Marina Bellini, President of Global Business Services at Mars, noted that the hype around AI has led to more focus on ensuring those foundations are in place. “This is the dream of the CIO: that people will actually start working on data quality.”
This year has also seen increased focus on AI’s ability to deliver value. Augment CEO Scott Dietzen said 2024 “is the year where tech teams are looking for proof and return on investment,” something not always clear or easy to measure for software such as Copilot productivity tools.
Organizations are finding new and innovative ways to apply data and AI to business challenges. Royal Caribbean Group CIO Martha Poulter described how the company transformed traditional food service operations into data-driven processes. Initially, “you would order what you thought, cook what you thought, and serve what you thought. It was gut based,” she explained. By measuring proteins before and after cooking and analyzing everything from ordering to de-thawing to waste, Royal Caribbean was able to generate tens of millions in savings while improving sustainability. “You’d never think food can be an AI problem, but it is,” Poulter said.
Similarly, Avis Budget Group is using an AI-based modeling and prediction system to address asset utilization challenges and ensure cars are on the road for the greatest amount of time. Chief Digital & Innovation Officer Ravi Simhambhatla explained how the company is aiming to break through the 70% utilization ceiling for its vehicle fleet. “If you have physical assets that aren’t being utilized, it’s costing the company money,” he said. “We hit this glass ceiling and asked ourselves why can’t we go to 80% or 90%? It turns out it’s data.”
Technology leaders discussed various approaches to managing and organizing AI initiatives across their organizations. A common thread across nearly all of them was the importance of bringing together technology and business leaders to identify valuable use cases and deliver on them faster. NRG’s Chief Data and Technology Officer, Dak Liyanearachchi, talked about establishing a transformation office that bridges data, business, and technology teams. At Berkadia, an AI Council that includes both business partners and technology leaders drives deeper engagement and keeps discussions focused on value, Chief Information and Innovation Officer Damu Bashyam said.
As mentioned throughout the event, these new organizational structures place particular emphasis on modern technology stacks and data practices. Nicholas Parrotta, Chief Digital and Information Officer at HARMAN International, outlined the company’s evolution from infrastructure-as-a-service to data-as-a-service, and using that data to create more personalized experiences on wheels as the world moves toward autonomous vehicles. “We start with how we do the big stuff with architecture, then product, and now data and being able to drive those as revenue and capabilities,” he said.
Capital One CIO Rob Alexander detailed the company’s platform strategy, explaining how the organization built dedicated infrastructure for machine learning, feature engineering, and now generative AI applications. When it comes to AI, he noted that while it’s “easy to get 70% accuracy out of the box, all the work is getting from 70-75% accuracy, which involves training and fine tuning.” Being in a position to leverage AI today has been a 12-year journey for Capital One, Alexander said, one that has included transforming “everything about who we are” to become a successful technology company and a winner in the banking industry.
Leaders emphasized the need for pragmatic approaches to AI implementation. Mastercard CTO Ed McLaughlin noted three questions a review panel considers when evaluating the feasibility of a new AI initiative: “Does it work, is it worth doing, and does it align to our ethics?” If ChatGPT-style search responses are 10 times more expensive than traditional methods, for example, the question then is whether they can deliver 12 times more value or be that much more useful. McLaughlin underscored the need to assess both the right way to solve a particular problem and whether there are returns on the work being done.
Dietzen added that NPS and engineer satisfaction can also be indicative of value. “If you make engineers delighted, you’ll tend to do well in your organization,” he said.
Chris Davis, Partner and West Coast Office Lead at Metis Strategy, advises technology leaders to ensure that there is product management in every layer of the AI stack, including the application of AI to business processes, the marketplace of horizontal and reusable capabilities across use cases, and underlying foundational models and model development. Business value should be measured relative to components of the stack, especially with generative AI, Davis said.
Effective product management requires teams across the organization to sharpen their product mindset. Cigna’s Chief Digital & Analytics Officer Katya Andresen outlined three elements of that product mindset: identifying real problems for real users, validating through testing and learning, and unlocking value. She cautioned against common pitfalls like “death by a thousand pilots,” in which proofs of concept pile up and eventually become unmanageable. Organizational silos can present a challenge. “We find a lot of opportunities to streamline operations, but there has to be a really deep partnership across tech and ops,” she said. Otherwise, “tech gets upset that ops don’t use their products and ops says well what you gave us didn’t solve our problem.”
Organizations are rethinking their talent development strategies as the landscape evolves. That involves both upskilling internal talent and expanding talent pools across geographies. Land O’Lakes CTO Teddy Bekele described moving from a roughly 50-50 mix of in-house and external talent to a model in which contractors and third parties make up a more significant portion of the talent pool, taking on much of the development work while in-house employees lead the teams. The approach allows for increased flexibility in team sizes depending on shifting enterprise needs. The change was driven by three key factors: accessing expertise, maintaining flexibility to scale teams up or down, and increasing nimbleness.
Upskilling also remains a key focus. At FINRA, Chief Technology Engineering Officer Tigran Khrimian’s team is teaching developers generative AI skills and has seen demonstrable success with using natural language prompting to create “good code” for the company. “Developers with code assistant tools will replace developers who don’t use them,” he said.
Corning’s Chief Digital and Information Officer Soumya Seetharam detailed the company’s three-pronged approach to talent development: creating strategic digital and IT hubs around the world to ensure global talent access; launching a digital literacy program with dedicated “revitalization days” for learning rather than meetings; and expanding the talent pipeline through technology internship and rotational development programs globally. “In the future every person for every function will have some technology in their background,” she predicted.
Technology leadership roles are undergoing significant transformation, reflecting the strategic importance of technology in business operations. According to Katie Graham Shannon, global head of the Digital and Technology Officers Practice at Heidrick & Struggles, the traditional CIO title is becoming less common. Of 23 recent technology leader placements at Fortune 200 companies,18 did not have the CIO title, and 52% were newly created positions with expanded roles. She noted that there is also a shift in reporting structures, with more CIOs reporting to the CEO, and a greater focus on technology leaders’ ability to create and protect value and attract talent, among other responsibilities.
“If we could use the title ‘orchestrator’ it would make more sense,” Shannon added, explaining that today’s technology leaders create value and orchestrate initiatives across the entire C-suite. This expanded scope includes both customer-facing initiatives and internal operational efficiencies with “equal pressure and emphasis” in both areas.
The role is also becoming more business-oriented, particularly in relation to managing technologies like AI. “A properly formatted conversation about AI is not a tech conversation, it’s a business conversation,” observed Henry Man, Co-Founder and Managing Partner at Candela Search. This presents an opportunity for technology leaders to “have a seat at the table” when business colleagues might lean out of technical discussions.
That expanded purview extends to technology leaders on boards or seeking director positions. “There’s no market for a one-issue board member,” said Art Hopkins, who leads the Technology Officers Practice at Russell Reynolds. “You need to show business acumen and a P&L. Go to the CEO and say I’d like to be the executive sponsor of this new incubator. This is a solid step in that direction.”
Adobe, Equinix, Lenovo, and G-P share the five difference makers that will help companies successfully harness global talent to compete at speed and scale.
This article was originally published on CIO.com by Chris Davis, Partner at Metis Strategy and Kelley Dougherty, Associate at Metis Strategy
To succeed as a large, global company, there is no choice but to harness the power of technology talent around the world. There simply aren’t enough people with the right skills, and at the right cost within a single location, to support the innovation and operational demands of a modern organization.
Organizations have implemented a variety of workforce models over the last two decades or so, but each has eventually proved to leave them with more questions than answers. The global outsourcing trend of the 1990s and early 2000s addressed capacity restraints through low-cost labor markets, but the lack of ownership and the transaction-based working relationships meant organizations outsourced not just the work, but also the accountability. The early 2010’s practice of co-locating talent supercharged collaboration, but also limited organizations’ ability to scale with a workforce based in high-density, cost-prohibitive metros. By 2020, many technology leaders began revisiting the idea of building dedicated, employee-based teams in lower-cost global locations, but the remote workforce model experienced its own set of challenges throughout the Covid-19 pandemic.
Fast forward to today. Many global technology leaders continue to struggle to find a balance between cost efficiencies, team productivity, and the human aspects of employment. However, there were a few pioneers that preemptively and effectively prepared for a distributed remote workforce and therefore were able to flourish at a time when others scrambled to adjust to the new normal.
Adobe, Equinix, Lenovo, and G-P were strategically situated and equipped to achieve the ideal duality: leverage global talent to realize cost efficiencies and realize the effectiveness of an agile team, yet in a distributed operating model. The key design principle that they all share is this:
To make global, distributed teams successful, they established dedicated decision-making power in distributed locations with full-stack teams of business and technology employees that can autonomously deliver end-to-end value.
The technology and HR leaders at each of these organizations shared their insights into building successful global teams that can sustainably drive innovation at scale. They highlighted five themes that can make or break the development of a global operating model:
We will explore each of these below:
Implementing operating structures that leverage distributed decision-making in the context of a coordinated strategy requires cross-functional credibility and finesse. The ability to drive strategy across several departments or teams with varying functions and skill sets is a rare talent, and leadership needs to build this muscle to ensure distributed teams are aligned for execution.
Art Hu and Jeanne Bauer-Hamlett, Chief Information Officer and Executive Director of Human Resources at Lenovo, emphasize the importance of equipping and empowering teams for success. Leaders need not only to identify the appropriate talent to manage and own decisions within global teams, but also to regularly engage with local managers to maintain strategic and process alignment. Middle management will ultimately be the make-or-break layer of the operating structure, so leaders need to ensure they are able to:
Leading global teams also comes with the inherent challenge of limited in-person interactions and face-to-face communication. Technology leaders therefore need to be particularly adept at building trust between themselves and dispersed teams.
“You’ve got to be good with the data, but you better have the emotional intelligence to match it,” says Richa Gupta, CHRO at G-P. This includes displays of empathy, authenticity, and concerted efforts to build human connection, either in-person or virtually.
Leaders should veer on the side of over-communication to break down emotional barriers and establish a sense of transparency across locations and management layers. Adobe CIO Cindy Stoddard explains that she makes it a habit to foster connections, both virtual and in person, throughout Adobe’s IT teams.
Likewise, Milind Wagle, CIO at Equinix, notes that he makes deliberate efforts to visit each of the company’s global teams at least twice a year to alleviate “emotional” distance with his reports and ensure each location feels valued and connected to the organization.
The value of building full-stack global teams is largely driven by the knowledge retention and improved delivery resulting from a sense of organizational identity within teams and the long-term commitment to the organization.
“Prioritizing culture among the leadership team is crucial, as a company’s culture starts at the top and is carried down to employees,” Hu said. Leaders should approach culture as an internal capability that needs to be actively maintained, measured, and nurtured from the top down.
For example, we worked with a retail company that built a nearshore development center in Mexico to maintain time zone alignment while taking advantage of 2-3x cost savings. While onboarding 50 new developers, U.S. team members flew to Queretaro for cross-location agile product operating model training. The team leader in Mexico took the time to educate employees on both Mexican and American business culture, and encouraged empathy and open dialogue between team members and segments of the IT organization. Doing so helped build cultural understanding and trust at the onset of the working relationship.
Indeed, organizations establishing globally distributed teams need to understand and navigate the business and cultural distances that may cause friction across teams and stakeholder groups. Rather than attempt to enforce a blanket uniformity across all offices, technology leaders should aim to strike a balance between promoting a common sense of organizational identity and celebrating the local cultures and customs of each team.
Establishing and maintaining effective employee feedback loops is an essential aspect of promoting a positive workplace culture. Art and Jean explain how they have made intentional efforts at Lenovo to ensure feedback loops to regularly measure employee experience and identify pain points. They note the importance of using outcomes, rather than outputs or behaviors for those measurements. For example, employees at Lenovo are evaluated based on the specific value or outcomes they deliver rather than the amount of time spent online or at a desk.
The same logic can be applied to measuring company cultural efforts. Rather than analyzing the number of diversity workshops or social events scheduled in a given period, leaders should instead assess outcome-based metrics such as:
Initial launches of a global operating model are typically designed with “decision makers” (Product Managers, Business System Analysts, senior Tech leads, and Business Stakeholders) based in the U.S., with Scrum Masters and engineering teams in the alternative location. While this can work, leading organizations tap global talent to build truly global solutions.
For example, one organization stood up a full data platform team, including product management, Scrum Masters, and engineering in India. This was not a subservient team that took orders from the U.S.; they were fully empowered to build the global product for all users.
Another organization built out a business-unit-aligned supply chain team in Brazil to best serve South America. A third built out a team in Singapore to support finance operations and then structured their business product management in the same location to align time zones. In each case, the big shift was allowing these teams to define the strategy, develop the product, launch, and operate it no differently than a team in the U.S.
The appropriate tactical model for each organization will be dependent on the specific needs and responsibilities of teams. For example, Hu notes that “a ‘follow-the-sun’ model can and does work for teams who have well-defined tasks, boundaries, and hand-off protocols.” In contrast, a team that has heavy dependencies and requires more centralized oversight and direction will be better suited to a setup that allows for more time-zone crossover with other teams, or fully accountable teams staffed within the same time zone.
Wagle of Equinix notes the importance of communication within a global operating model, but also emphasizes that cross-team communication does not necessarily need to be more frequent or within a specific forum. Communication should instead be optimized to provide the most time value for teams. Equinix moved away from daily scrum meetings in favor of weekly meetings with daily asynchronous check-ins to reduce meeting exhaustion and allow more time to work on key objectives. Technology leaders should ensure the proper cadences are established for strategic decision-makers and cross-functional teams to discuss key topics such as:
A technology operating model built on agile practices and consistent delivery processes enables teams to reduce operational redundancies, cross-team friction, and internal costs. Stoddard at Adobe describes improving business workflows as “a strategic investment” and notes that her organization focused on establishing systems that “create positive employee and customer experiences in the hybrid world, drive efficiency and productivity, and enable standardization, optimization and consolidation.”
With standard ways of working in place, technology leaders need to define where and how decision-making rights are delegated. The digital-first, hyper-connected nature of the modern workplace means people no longer need to be in a company headquarters to have influence, but organizations need to be intentional about which decisions are delegated to local teams. Technology leaders should have a defined architecture of decision-making rights that enable teams to work asynchronously and deliver autonomous value while ensuring those teams are working harmoniously toward enterprise-level strategic objectives.
“Technology is no longer just about enabling work, it’s the workplace itself,” said G-P’s Richa. Leaders establishing a digital operating model built on distributed teams need to ensure the appropriate tools and systems are in place to support it.
The most fundamental technologies are those enabling a unified and streamlined employee experience, giving teams the day-to-day resources and support they need to do their job. Delivery and project management tools that can be shared across locations will enable teams to have visibility across efforts, monitor risks, and identify dependencies without daily facetime. Milind provides the example of Equinix’s rollout of ‘Operation Collaboration’ that is geared toward maturing the organization’s workplace technologies and meeting experience platform to enable teams to work asynchronously.
Each of these companies above has also invested in technologies to streamline internal processes and reduce the operational risks of distributed teams. Cindy at Adobe advises that by investing in digitization, technology leaders “can help their organizations make the most of data analytics and insights, unlock new business and revenue opportunities, and significantly reduce costs.” These organizations also made strategic pushes to leverage AI and automation to minimize repetitive tasks, reduce time costs, optimize resource utilization, and allow teams to access services and support regardless of location or time zone. Lenovo in particular launched its Premier Support Plus, which “combines AI and human interaction for proactive, predictive, seamless and direct IT support, designed specifically for today’s hybrid workforce.”
The regulatory environment in each team location is the final, and potentially consequential, consideration of a workforce strategy. Among the standard regulatory concerns are those regarding the local labor and employment laws in a given location. Richa at G-P says that establishing a foreign entity and managing local administrative tasks is both costly and time-consuming, and advises that technology leaders work with internal or outsourced HR and legal experts to ascertain the compliance requirements around legal entities, taxes, compensation, benefits, workers rights, and the ability to hire and fire, among others.
The second facet of compliance is more closely aligned to a technology leader’s purview and pertains to the local data, privacy, and intellectual property regulations. Some regions could differ in their approach to data sovereignty and IP protection, so organizations may weigh privacy concerns when determining where and how to store sensitive information. Art at Lenovo advises that leaders have “full awareness of the laws and regulations, and make sure global teams have the tools and processes to adapt to the rapidly changing landscape.”
For organizations contemplating building a global technology operating model, the final big decision is whether your company is willing to truly change its mindset. There is a big difference between a “U.S.-based company that operates internationally” and a “global company that happens to be headquartered in the U.S.”
Not all companies will be ready for it. But, in our view, there is no other option to realize both efficiency and effectiveness in your operating model. Whether proactively or reactively, global companies will have to retool the way they work across these five dimensions to sustainably leverage global talent at scale.
How leaders can drive the coveted project-to-product transformation
This article was originally published on CIO.com by Chris Davis, Partner at Metis Strategy, and Kelley Dougherty, Associate at Metis Strategy.
In this time of fluid markets, fierce competition, and constant disruption, the modern enterprise must stay innovative and agile. It must be ready to evolve at any moment, and deliver quickly, consistently, and reliably through its large-scale software operations.
But it can hardly do so through traditional, monolithic ways of working, particularly those organized around projects. Many companies are therefore reorienting their operating models around end-to-end products. Done well, these transformations make a company nimble. Done poorly, they exhaust the organization and produce little value.
Leaders must transform their organizations methodically along a path that minimizes redundancies, builds momentum, and creates immediate and tangible business value. In this article, we outline the steps to start a product operating model journey, coloring the steps with stories told on the Metis Strategy Podcast by executives from companies like Ascension, Condé Nast, and Hyatt.
First, leaders must identify the products around which their operating model will be designed. We define a “product” in this context as:
“a capability or portion of a capability, brought to life through technology, business process, and customer experience, with a continuous value stream, and an ability to measure success independently.”
Therefore, leaders should draw the capability map of their business, showing how value streams and assets are positioned, how they relate to each other, and which of them are immature or missing. These capabilities can then be translated into end-to-end products calibrating for the organization’s size, offerings, and business model.
If an organization has uniform customer offerings and go-to-market motions, then its products should be aligned to the company’s value chain. Such is the case at Ascension, as explained by its Chief Marketing and Digital Experience Officer, Raj Mohan: “We’ve organized our teams particularly broken up by the consumer journey into product teams down that path, and then staff those teams along those journeys itself.”
In practice, products aligned to a customer-facing value-chain might include: Development → Marketing → Sales/Order Management → Fulfillment → Customer Success
Aligned to internal value streams, they might include Financial management, HR management, Legal Management, IT Management, Facilities Management, and Data and Analytics.
In contrast, if an organization has multiple business units, offerings, or go-to-market processes, its products must be defined so they account for each BU’s customers, geographies, and so on. This way, products can still be aligned to value chains but also arranged into broader groups, lines, and teams, each constituting a “deeper” aspect of the value chain.
This is how products have been defined at Condé Nast.
Sanjay Bhakta, Chief Product and Technology Officer at Condé Nast explains that his organization’s product offerings result in them having “some capability within the brands, especially the big brands, that focus on things that may be bespoke or have specific requirements.”
Next, leaders must define the capabilities around which they’ll organize resources and configure the product teams such that they can deliver value autonomously. Mohan suggests that a product team can stand on its own “if, over at least a three-year horizon, you can see clearly that a durable team can bring value that you can sign up for.”
How many product teams should you have? As a rule of thumb: about one tenth as many employees as there are in the organization. Ideally, each product team should comprise seven to nine people, and they should include a product manager, scrum lead, technical lead, and engineers. These might be supplemented by user experience leads for consumer products, other engineers, shared services, or specialists.
A project-to-product transformation requires that an enterprise think first in terms of products, and this shift hangs on the structures and processes by which the company manages its portfolio. A company should organize its portfolio around the outcomes it seeks, and those should in turn dictate the capabilities initially staffed to mature at a higher rate. When resources are limited, start by productizing 2-5 key areas, do it well, and scale from there.
Hyatt, for example, has organized its portfolio around customer-focused capabilities, and so has caused the enterprise at large to think in terms of customer outcomes. As Hyatt’s Global CIO, Eben Hewitt, has explained: “Moving to a product mindset, to me, means, number one, it’s for a customer… You’re thinking about the outcomes that people want.”
Further, an organization will do well to manage its portfolio according to Agile principles and to align its product teams to business outcomes. Not only will product teams then naturally align to each other and their shared objectives; the organization itself will think in terms of products and outcomes.
To manage portfolio by capabilities, use annual planning sessions to craft roadmaps aligned to outcomes and segmented by capability. Such roadmaps can then inform the teams who support those capabilities, and ensure their own roadmaps align to enterprise objectives. These planning sessions also give leaders a chance to decide how to allocate funds. As a rule, the product teams should receive roughly 80% of the organization’s budget, and that allocation should cover their needs end to end to build and manage the lifecycle of the product. The remaining 20% should go toward broader initiatives.
Adopting an Agile mindset and common ways of working early in the journey will help reorient a company reliant on waterfall, project-based operating models towards continuously delivering value. However, frameworks such as Scrum and Kanban are a means to an end. Some organizations conflate a “product” transformation with an “Agile transformation,” and lose themselves in the minutia of adhering to specific ‘rules’ and ceremonies. The key is to create a baseline for teams to form, storm, and norm by reducing confusion of how to transition from a rigid waterfall process to a mindset in which an entire agile product team establishes a shared identity founded in the problem the product solves; not their title or role on a waterfall assembly line.
Bhakta emphasizes that Agile should extend to the relationship between product and engineering. He explains: “[It] helps us do faster decision-making, helps us to get products out into the market faster.”
If organizations are already practicing Agile when they start transforming, then they should focus on infusing into their processes the product mindset. If an organization isn’t so mature, however, then it should train teams on core Agile practices to which they can align their processes.
Ultimately, this transformation largely depends on whether people can successfully serve the role as a Product Manager, and balance the business value, viability, usability, and feasibility to focus teams on shipping products and experiences that users love, adopt, and help improve with feedback.
Therefore, each team needs a Product Manager, who can:
Identifying, training, and upskilling Product Managers, especially for internal products, is often the hardest part of the journey. But to be successful, Product Managers must also have clear scopes of responsibility, the power to execute on them, and feedback loops by which they can measure performance and course-correct.
Each of the steps we’ve covered critically enable teams to scale, and once they’ve been carried out the first time, they tend to act as a flywheel, sustaining themselves with their own momentum and creating excitement within the organization to productize more capabilities.
To gauge success of your product operating model journey, start by:
The journey of maturing a product team is never really complete. Once the teams are launched with the steps outlined in this article, leaders should then do the following at scale, working team by team:
It is our firm belief that adopting a product operating model is the only way to successfully support a scaling organization. But don’t take it lightly; this is a commitment that requires leaders to dedicate at least a year of their time to successfully transform an organization’s mindset.
Personalized customer experiences, automated business operations, and data science-driven insights all depend on the quality and volume of your data. That’s why your data privacy strategy must be more than a policy on ethics.
This article was originally published on CIO.com by Chris Davis, Partner at Metis Strategy and Elizabeth Tse, Associate at Metis Strategy.
Companies continue to face implementation challenges as they rush to comply with data privacy regulations such as Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). This is due largely to a mismatch between their management of data and the stringent requirements set by the regulations.
Organizations can address the complexities of privacy regulations via a well-defined data governance framework, which leverages people, processes and technologies to establish standards for data access, management and use. Such a framework also enables companies to address elements of privacy, including identity and access management, consent management and policy definition.
As leaders implement data governance models with privacy in mind, they may face challenges, including lukewarm executive buy-in, lack of a cohesive data strategy, or diverging opinions about how data should be used and handled. To address these obstacles, leaders should consider the following actions:
While a Chief Data Officer or CIO may lead the implementation of a data governance framework or model, data governance should be a shared responsibility across a company. At a minimum, the IT department, privacy office, security organization, and various business divisions should be involved, as each has an important stake in data management. Bringing in a variety of stakeholders early allows firms to establish key data objectives and a broader data governance vision. This collaboration can take the form of a dedicated task force or may involve regular reporting on data governance and privacy objectives to the executive board.
Data privacy, similarly, is also a shared responsibility. All employees have a part to play in maintaining data privacy by following accepted standards for data collection, use and sharing. Indeed, implementing a successful data governance model with privacy in mind requires educating employees on governance concepts, roles and responsibilities, as well as data privacy concepts and regulations (e.g. the definition of “personal information” vs. “consumer information”).
After establishing a governance vision and driving employee awareness, organizations can define their desired data governance roles – such as data owners, data stewards, data architects and data consumers – and tailor the roles to their needs. Some companies may distinguish between data stewards and data owners, for example, with the former responsible for executing daily data operations and the latter responsible for data policy definition. For one client with a large and complex IT department, Metis Strategy established a governance hierarchy with an executive-level board, combined data steward/owner roles, and other positions (e.g. data quality custodians). This structure facilitated ease of communication and enabled the client to scale its data management practices.
In the long term, firms should incorporate data governance and management skills into their talent strategy and workforce planning. Given the expertise required and the shortage of qualified people for some data-intensive roles, organizations can consider enlisting the help of talent-sourcing firms while focusing internal efforts on talent retention and upskilling. As companies’ strategic goals and regulatory requirements change, they should remain flexible in adjusting their data governance roles and ownership.
To respond adequately to consumer privacy-related requests for data, organizations should establish standardized procedures and policies across the data lifecycle. This will allow companies to understand what data they collect, use and share, and how those practices relate to consumers.
For example, the CCPA provides consumers with the right to opt out of having their personal information sold to third parties. If a retailer needed to comply with such a request, it would need to be able to answer questions in the following categories:
Establishing policies and standards for the above can help organizations quickly determine the actions needed to respond to customer requests under privacy regulations. Companies should communicate policies widely and ensure that they are being followed, as failing to do so can propagate the use of inconsistent templates and practices. At one Metis Strategy client, for example, few stakeholders had sufficient awareness of data management and access standards, despite the fact that the client’s IT department had established extensive policies around them.
To successfully implement data governance frameworks and ensure privacy compliance, firms may also need to address challenges posed by legacy infrastructure and technical debt. For example, data often is stored in silos throughout an organization, making it difficult to appropriately identify the source of any data privacy issues and promptly respond to consumers or regulatory authorities.
Firms also need to evaluate the security and privacy risks posed by outsourced cloud services, such as cloud-based data lakes. Those using multiple cloud providers may want to streamline their data sharing agreements to create consistency across vendors.
Some technologies can help companies leverage customer data while mitigating privacy risks. In a Metis Strategy interview, Greg Sullivan, CIO of Carnival Corporation, noted that data virtualization enhanced his organization’s analytics capabilities, drove down operational and computing costs and reduced the company’s exposure to potential security and privacy gaps.
Companies can also consider new privacy compliance technologies, which can enhance data governance through increased visibility and transparency. Data discovery tools use advanced analytics to identify data elements that could be deemed sensitive, for instance, while data flow mapping tools help companies understand how and where data moves both internally and externally. These tools can be used to help organizations determine the level of protection required for their most critical data elements and facilitate responses to consumer requests under GDPR and CCPA.
Although legacy technology overhauls can be time-consuming and costly, firms that are decisive about doing so can reduce their privacy and security risks while avoiding other challenges related to technical debt.
As the global data privacy landscape evolves, organizations should continuously adapt their data governance models. Companies should proactively address their obligations by designing data governance roles, processes, policies, and technology with privacy in mind, rather than reacting to current and forthcoming privacy legislation. Companies doing so can not only improve risk and reputational management, but also encourage greater transparency and data-driven decision-making across their organizations.
Company-first CIO Krzysztof Soltan and his team helped transform the construction-aggregates giant with a focus on digitizing operations, modernizing infrastructure, and overhauling how IT goes about its business.
This article was originally published on CIO.com by Mike Bertha, Partner at Metis Strategy and Chris Boyd, Manager at Metis Strategy.
In a recent “all-hands” meeting, Krzysztof Soltan, CIO of Vulcan Materials, announced his IT organization would continue its “laser focus on digital transformation.”
Digital technology, he explained, would remain a central focus of the construction-aggregates industry and would underpin customer-grade experiences increasingly expected from industry leaders. Vulcan, based in Birmingham, Ala., is the nation’s largest construction aggregates company, producing materials such as crushed stone, sand, and gravel, with strategic downstream assets like asphalt and ready-mixed in select markets. Soltan, previously a tech leader at Johnson Controls, ABB, and GE, became the company’s first CIO just two years ago and is at the forefront of the company’s digital transformation efforts.
Soltan and his fellow leaders attribute Vulcan’s success to many things, but chief among them is the company’s attitude toward key activities like operating and selling — “The Vulcan Way,” as it is widely referred to within the company. This orienting force has become so strong that, to Soltan and his team, it seemed only right that they should rethink IT in terms of how it might amplify the approach. As Soltan explains: “If we were going to keep up with the pace of change in the industry, IT would have to be recalibrated.”
Here, Soltan and his IT leadership team share the story behind those efforts. They highlight the mindset and approach necessary to leverage new technologies to best compete in the digital age.
As Soltan’s IT leadership team explains, Vulcan’s digital transformation turned a corner with the advent of the Vulcan Way of Selling, an enterprise-wide initiative that, through technology, aimed to turn the company’s highly manual relationship-based sales model on its head. And so it did.
Since the initiative’s launch in 2017, Vulcan has deployed myriad proprietary technology solutions that serve up real-time market insights, thereby improving experiences for sales reps, customers, and the truckers responsible for transporting goods to job sites. For sales reps, these improvements show up as more time spent talking about solutions with customers, and less time on administrative work like quoting. For customers, real-time location-tracking of materials shipment translates to better labor planning. For truckers, a seamless, paperless experience when picking up materials at a Vulcan quarry means faster delivery.
As Vulcan SVP Jerry Perkins put it at the company’s 2022 investor day, “Time is money in the construction and trucking industry, and these tools make our truckers and customers much more efficient and productive.”
The success of the Vulcan Way of Selling brought the company to an inflection point. Enterprise-wide, tech-enabled transformation programs would no longer be one-off events; instead, they were destined to become fixtures in Vulcan’s pursuit for continuous improvement.
Enter Soltan. After learning the business and getting acclimated with the effort to integrate US Concrete, which the company had recently acquired, Soltan got to work charting IT’s path forward. “Between the US Concrete acquisition and other major initiatives, we hadn’t taken a step back in awhile to reflect on how we were managing our own shop,” Soltan says, noting this isn’t unusual for companies during periods of growth.
The path to cementing Vulcan IT’s value proposition, says Soltan, would be two-fold: Invest continuously in enabling business-driven initiatives, and modernize how they manage the business of IT.
As just one example, the company has commenced VulcanX, an initiative that extends the Vulcan Way of Selling by providing best-in-class tools to the company’s Sales teams to help them win more business and deliver better experiences to customers, in the form of seamless and secure interactions. These efficiencies, the company hopes, will drive more quotes and, subsequently, higher quote-to-order conversions, all while allowing the team to spend less time on administrative tasks.
Just as important is the technical foundation on which Vulcan operates its plants. And so the company has launched another initiative in partnership with its business units to modernize the organization’s technical infrastructure, including improving the speed, connectivity, and mobility of its networks in service of Vulcan’s 10,000+ employees — qualities that will become only more vital as the company multiplies its digital capabilities.
“One reality of our business is that we have to enable modern day technology in the rugged, remote locations that are home to our plants and quarries,” says Soltan. “VulcanX enables scale and mobility in the plant with cloud-based solutions, and our modernized networks will improve our ability to capture data and to quickly drive insights for the folks running our operations.”
Vulcan’s employees can leverage digital capabilities in the field only to the extent that the company’s IT and OT systems are integrated. This reality — understood by Vulcan’s business unit leaders as well as anyone — has ultimately stood to justify, incentivize, and propel the company’s transformation.
A great deal of Vulcan’s success in managing the business of IT can be traced back to the department’s operating model. “The capabilities you deliver within IT the roles and responsibilities, and the ways of working — getting these things right — creates a solid foundation for execution,” Soltan says. To Vulcan’s leaders, it made sense, then, that the operating model should be among the first things they strove to modernize.
First, there was talent strategy — how the company would recruit and train. Of particular concern was the department’s IT career paths, which stood to be refreshed. As Soltan recalls, “We needed our paths to be more indicative of the work we’re doing. This not only helps us attract new talent but allows our team to feel confident they are adding modern skills to their toolkits.”
To this end, Vulcan leaders did two things. First, they developed a new set of career paths, including specific tracks for product management, DevOps, Data Engineering, and other sets of skills that, as Vulcan advances, will become indispensable. Second, the leaders expanded its talent pool by opening a second hub in Dallas, home to Vulcan’s US Concrete acquisition, and the fourth largest metropolitan area in the United States.
The second facet concerned projects, which experienced high demand. As Soltan explains, when digitally transforming at the pace Vulcan has, “priorities change daily, and without rigorous governance processes, it’s nearly impossible to have visibility into your IT investment portfolio.”
To rein in demand, and ensure resources were allocated impactfully, Vulcan formalized its IT Project Management Office (PMO). “The goal is to manage IT like a business,” says Soltan. “That means being clear about investment criteria for IT projects and establishing expectations for project execution that allow us to monitor value capture.”
For Vulcan, each new project introduces new applications and integration patterns into the technical estate. To ensure these can be properly absorbed, Vulcan also invested in maturing its enterprise architecture muscle. “Standards around technologies, integration patterns, and security are becoming more important,” says Soltan.
“Architecture ensures that new solutions do not render old ones redundant and that we construct things in a manner conducive to easily capturing and integrating data,” he explains, noting this will only become more important as IT/OT convergence accelerates to enable capabilities such as predictive maintenance in the plants.
For CIOs in similar sectors just starting out on digital journeys, the prospect can be unsettling, especially in light of recent technological changes — the AI craze, the pace at which IT and OT are converging — not to mention the list of demands from the business. And still, as Soltan says, one thing is certain: Technology will increasingly enable you to compete and differentiate yourself.
So if your company is like Vulcan Materials, if it has climbed to great heights despite preceding the dawn of digital, Soltan suggests you get started: “Your business leaders are smart. They know the importance of technology and of modernizing IT to compete. They have your back. So look honestly at where you are, rip off the band-aid, and start moving, piece by piece, towards your future state.”
First-ever McWane CIO Lynn Lovelady fast-tracked the global manufacturer’s corporate IT makeover by emphasizing A-teams, smart centralization, and establishing trust.
This article was originally published on CIO.com by Mike Bertha, Partner at Metis Strategy.
In 2018, the day after his employer publicly announced it was being acquired, Lynn Lovelady, then VP of IT at Energen, received a pivotal phone call that would reshape his career.
It was from Charlie Nowlin, then CFO at McWane, who for more than a year had been searching for the company’s first chief information officer.
After a long courtship that included lunches with members of McWane’s C-suite to ensure a cultural fit, Lovelady signed on to helm IT as CIO at the global manufacturer of ductile iron products, valves, hydrants, fittings, plumbing products, fire extinguishers and suppression systems, and steel pressure vessels.
The Birmingham, Ala.-based McWane’s growing corporate IT department had existed only since 2008, and for Lovelady there was a lot of work to do. =
“We were transitioning from a decentralized IT model to one that increasingly relied on corporate IT, which necessitated enhancing the planning process, governance, and implementing consistent policies on cybersecurity,” says Lovelady, reflecting on a department that was responsible for supporting the more than 20 operationally diverse businesses under the McWane umbrella.
To address the growing pains, Lovelady reinforced the importance of strategic planning for IT. In addition to rationalizing applications and other tactics you would expect, Lovelady knew establishing influence across McWane would be essential for the IT makeover to succeed, and that in turn would require over-communicating, driving accountability, measuring success, and rewarding high performance. With these principles in mind, Lovelady and his team launched their strategy, dubbing it “fifteen in five,” representing their bold ambition to drive fifteen years’ worth of transformation in the next five, and to shore up IT capabilities in doing so.
But executing wouldn’t come without challenges: multiple ERP implementations, a reluctance to adapt to new ways of working at a storied company, and perhaps most daunting, the reality that IT in each of the 20-plus businesses had grown accustomed to operating independently.
According to Lovelady, his team’s ability to overcome these headwinds hinged on three pillars that go beyond technical implementation.
Lovelady admits that in the early innings there were some who questioned whether hiring a CIO was necessary. The company, after all, had been successful historically.
To buck the trend, Lovelady prioritized meeting with all senior executives upon his arrival: to sell his strategic plan, share how he planned to make improvements, and most importantly, state his intention to earn their trust by establishing a relationship based on frequent and transparent communication. “Whether they’re personal or business, relationships take work, but that work is how you establish trust,” says Lovelady, “and picking up the phone or walking down the hall fills the trust bank over time.”
Lovelady’s focus on communication earned him respect and support from the executive team, which included the general managers of the 20-plus portfolio businesses. It showed when he presented to them. Mr. McWane himself and other EVPs started endorsing Lovelady’s initiatives, and “this backing, coupled with some early efficiency wins, helped the GMs get behind the vision and get comfortable with the new chargebacks,” Lovelady says.
To ensure his team embraced and embodied his philosophy, Lovelady purchased everyone a copy of Excellence Wins, by Horst Schulze. “While we can’t do everything the Ritz Carlton does, I think the spirit of having a customer-first mindset is critical. Following up, not assuming a problem is solved, paying attention: It’s critical we all share these values.”
Before Lovelady arrived, many major IT initiatives, especially those — like ERP projects — meant to drive efficiency across the businesses, were viewed as non-strategic. This kept top talent on the sidelines. Lovelady turned this approach upside down. “Do you really want the software you are going to run for the next 15 to 20 years being designed by just anyone?” posits Lovelady. “Or do you want it designed by your A players?”
Combined with an outstanding internal ERP implementation team, Lovelady worked with business units to put their best talent on the ERP initiatives, which in 2023 alone, led to four on-time deployments. It also led to the consolidation of seven separate CRM environments. Those two efforts combined have enabled for the first time ever end-to-end visibility of McWane’s value chain for select businesses, from the manufacturing of products, through the sales process, all the way to recognizing revenue.
An ERP veteran, Lovelady knows that technology alone isn’t what makes ERP implementation successful. “It’s about having the right people, following the right processes, and avoiding common pitfalls like customization.”
And for Lovelady and McWane, the right people are often those with substantial IT experience. “Around here, young talent are people in their thirties,” explains Lovelady, “and a lot of our team members came with backgrounds as directors, vice presidents, or even CIOs at well-respected companies.”
It is to this talent philosophy Lovelady attributes McWane’s ability to service their approximately 6,000 employees across its global footprint with less than 30 full-time corporate IT employees, and only a handful of longstanding strategic partners.
Key to reigning in and forging partnerships with the portfolio of operationally diverse companies was the deployment of what McWane refers to as “smart centralization.” Through this strategy, Lovelady and his team have struck the often difficult to balance attributes of business unit flexibility with enterprise scale.
“At corporate, we focus on things that can be done globally,” says Lovelady. These include network management, help desk, establishing and enforcing policies related to information security and risk management, and several other IT functions. “These are strategic capabilities for IT, and we have more purchasing power when we address them horizontally across our portfolio,” says Lovelady. “Besides, our businesses shouldn’t have to worry that outdated network equipment is putting their operation at risk.”
Still, the businesses operate with a high degree of local decision-making authority, Lovelady says. “We’ve simply implemented guardrails and policies to make sure we are influencing the domains where we have expertise, and we are making decisions that serve the greater good of McWane, not just an individual business.”
About five years have passed since Charlie Nowlin phoned Lovelady in 2018, and McWane’s corporate IT is firing on all cylinders. IT’s seat at the table has been cemented for many reasons. Chief among them are a rationalized, simplified, cost-effective ERP footprint; a maturing IT security and risk management capability that includes regular audits; a help desk that receives positive ratings from more than 90% of users; and a successful data center migration, which included moving more than 400 servers in real-time, so seamlessly, Lovelady says, that nobody even noticed.
Communication from corporate IT is proactive, includes regular site visits, frequent updates to demonstrate progress against the strategic plan, and plentiful impromptu calls and drop-ins. Business and IT are rowing in the same direction, with the shared goal of making the right decisions for the greater good of McWane.
Lovelady, who announced his retirement in the fourth quarter of 2023, will leave a legacy of transformation at McWane — one that will be synonymous with service excellence, integrity, and collaboration. The results he achieved are enviable, so we asked him what advice he’d share with CIOs pursuing similar journeys. He vehemently referred to the annual strategic plan that started it all, highlighting the importance of trust.
“It takes years of hard work to build trust, and it can be lost in an instant,” says Lovelady. “Don’t breach that trust, and you’ll go far.”
Companies that educate, explore, experiment, and expand, perpetually, with the right pace and sequencing, are most likely to win with AI
This article was originally published on CIO.com
AI never sleeps. With every new claim that AI will be the biggest technological breakthrough since the internet, CIOs feel the pressure mount. For every new headline, they face a dozen new questions. Some are basic: What is generative AI? Others are more consequential: How do we diffuse AI through every dimension of our business?
Tactically, you can answer these questions in any number of ways. You can build an AI Center of Excellence (COE), launch a strategic task force, or designate a deputy to lead the charge. But whatever you do—if our advisory work and discussions with leading CIOs suggest anything—you’ll have to drive excellence in four related, though not necessarily sequential, streams of work: Educate, Explore, Experiment, Expand. It’s around these four work streams that leading organizations are positioning themselves to mature their data strategies and, in doing so, answer not only today’s AI questions but tomorrow’s.
Educate. You can’t wrangle AI by yourself. Your journey will be fruitful only to the extent that you can instill in those with whom you go to market a digital fluency and a confidence in your ecosystem.
Accordingly, many CIOs have fashioned themselves into the de facto AI professor within their organizations—developing 101 materials and conducting roadshows to build awareness, explain how generative AI differs from other types, and discuss its risks.
To ease collaboration on the topic where it’s likely to surface, Digi-key Electronics, a leading electronic component distributor in North America, has even built networks of influencers. As the company’s CIO, Ramesh Babu, explains, “We identify ambassadors in the organization and position them in the right meetings to drive a common understanding of the many terms floating around.”
Babu also warns against discussing only the benefits of AI. He and his peers make a point of emphasizing the risks. “We’re trying to have balanced conversations,” he says, a practice that underscores the duty CIOs have to develop appropriate policies and usage guidelines in order to mitigate the downsides of AI.
To help educate your own workforce about AI, provide them materials on the topic. Include common definitions, reimagined future states, risks, and policies and guidelines for usage. Have them ready for impromptu meetings, town hall presentations, and other settings. And direct your colleagues to self-service channels so that they may access materials and learn at their own pace.
Explore. To explore is to pose the question: How can I make AI work for my organization?Since the AI landscape is both large and complex, take a two-pronged approach: analyze internally and marry that analysis to marketplace activity.
Internally, start by looking at your value chain or the capabilities that deliver your value proposition. Brainstorm how generative AI could make your processes (and the people supporting those processes) more intelligent and productive. If you’re already using AI for some of the use-cases you brainstorm, no matter – record those too. And pay special attention to use-cases that concern customer service: Of the executives surveyed at the latest Metis Strategy Digital Symposium, 43% said their organizations are prioritizing customer service use-cases for generative AI in 2023.
From all of these sources, compile your use-cases into a backlog and rank them by impact and feasibility. You’ll learn where you can create new ways to win in both the short and long terms while weeding out those cases that are too difficult for their value.
Next, examine the market. At first, you might struggle to wrap your head around the size of it—a $150B addressable market, as estimated by Goldman Sachs—but by doing so you set in motion what should be a continuous evaluation. Search first for vertical-specific and enterprise-wide AI solutions. Categorize them by the capabilities they support. And if your organization permits it, maybe even ask ChatGPT.
Compare and contrast what’s available in the market to your top-ranked use cases and the capabilities you already have. Where an internal capability does not already exist, and the case relies on a large language model (LLM), you will need to determine how you want to proceed: by training and fine-tuning an off-the-shelf model, like Morgan Stanley did with OpenAI; or by building your own, like Bloomberg did.
Experiment. To experiment well is to work through your backlog with urgency and agility and—especially in the case of AI—with a bias for incremental progress. As Baker Tilly CIO Allen Smith explained at a recent panel, “There’s a difference between home runs and singles.” The singles are your friends, says Smith, and a great way to show something tangible, build momentum, and create a vehicle to fuel other interesting ideas.
At the tech juggernaut Lenovo, CIO Art Hu is taking a similar approach. Hu says they are running dozens of proofs of concept. One consequence of being in the early innings of Generative AI, according to Hu, is the rapid pace of development. “Because it’s fast, you can run proofs of concept for not massive investments.” This demonstrates how his team stays in lockstep with the business on investment priorities in a period where economic uncertainty has narrowed the scope of technology investment. “That’s the way you want it. You want small steps for the business without spending or committing a lot of money. They can see the result and decide ‘OK, double down, or shift the investment elsewhere.’”
Many attribute generative AI’s promise to its ascent to the very top of the tech stack, a promise that makes it more approachable than other disruptive technologies that, while undeniably promising, still require technical expertise to be exploited. Acknowledging this nuance, many companies have built experimentation sandboxes in which users from across the organization can try their hand at AI in a controlled environment.
Expand. Research reports have dangled that generative AI could add trillions to the global economy. But generally, these reports assume that AI can be implemented at scale. Here, AI leaps from the Batcave to the streets of Gotham, confronting a new set of challenges.
With regard to creating that scale, Chris Davis, a Partner at the digital advisory Metis Strategy and a leader of his firm’s AI practice, worries less about scaling the technology than he does about people’s role in that scale. “Someone has to develop, train, and supervise the models,” he explains. “…the irony is that people could actually be the limiting factor.”
As a means of overcoming this limitation, he stresses how necessary it is that organizations revisit—and where appropriate, revise—their operating models. “You need to re-envision business strategies with the exponential scale of AI in mind,” he says. “And train product managers on how they might weave AI into anything—core digital products, customer experiences, employee experiences, and so on.” He goes on to explain, that means also ironing out the roles and responsibilities among various players in your organization: “AI laboratories, data scientists, product teams—they all have to know how to work together efficiently every step of the way, from identifying use-cases to building algorithms and models, from following AI operating procedures to monitoring any models that are already in use.”
And there’s plenty of evidence to support Davis’s point. For example, after recently redefining the roles, responsibilities, and delivery methods of its IT product teams to suit its specific AI ambitions, a global financial services provider discovered many gaps in its capacity: some that it could address through upskilling, but also some that would require it to hire new people.
Looking forward. Meanwhile, hyperbolic headlines will continue to outpace adoption; yet, they won’t outpace the exponential rate at which the volume of data is growing, especially as technologies such as 5G and IoT hit their stride. So, if you, too, want to leverage AI to its fullest extent, you must first look in the mirror: Can I manage this growing volume of data? If you can’t convert the data into something meaningful, then, as Lenovo’s tech chief, Art Hu, suggests, you might lose ground: “If you don’t figure out as a company how to (manage a growing volume of data) effectively and efficiently, the competitor that does is potentially going to have a significant advantage.”
As you mature your data strategy, remember that you have many data-driven tools at your disposal, only one of which is AI. It’s wedged between an ocean of use-cases to the North and your core data foundation to the South, and progress in each of these layers is linked to the other two inextricably. There’s no use in thinking of your data strategy as something binary, as if it were a building under construction that will one day be complete. Those that educate, explore, experiment, and expand, perpetually, with the right pace and sequencing, are those most likely to win with AI.
Mike Bertha is a Partner at Metis Strategy
This article was written by Leila Shaban, Research Associate at Metis Strategy
Thank you to everyone who attended and participated in the 17th Metis Strategy Digital Symposium. Highlights from the event are below. Check out Metis Strategy’s Youtube channel and Technovation podcast in the coming weeks for recordings of each conversation.
Companies continue to make progress in their AI journeys, deploying the technology to drive efficiency, productivity and innovation. Technology leaders are focused now on driving adoption, generating buy-in for new initiatives, and rolling out new training programs to ensure teams across the enterprise are able to take advantage of what AI has to offer. Below are a few highlights from the event:
Building a foundation for AI at scale
Nearly all CIOs on stage said scalable infrastructure and high-quality, accessible data are key to driving value from AI initiatives. Over the past few years, many organizations have focused on building data platforms, shifting to cloud and rethinking ways of working in order to deliver AI at scale. “Having a really good data infrastructure is foundational to taking advantage of any of these generative AI capabilities,” Priceline CTO Marty Brodbeck said. Many speakers noted their current efforts to get reliable data into the hands of more teams across their organizations.
Nearly half of MSDS attendees said that the rapid evolution of AI, among other macro issues, will have the biggest impact on their organizations in the year ahead
Exploring new use cases
Many organizations continue to train generative AI on internal knowledge bases to streamline processes and enable more self service. CIOs also see potential around developer productivity.
Bristol Myers Squibb receives thousands of calls from physicians and nurse practitioners each day requesting information about specific, often technical, topics, Chief Digital and Technology Officer Greg Meyers said. MDs on the other side of the call often find those answers in internal documents. Now, an AI chatbot trained on the company’s knowledge base can search through the documents to retrieve answers to these questions much faster. With enough fine tuning, Meyers noted the chatbot could constrain search results to trusted documents and help agents provide near-immediate answers to customer queries.
At UPS, Chief Digital and Technology Officer Bala Subramanian recently launched an internal AI tool for email which can process the tens of thousands of customer emails UPS receives on a daily basis, connect relevant information across internal policies and procedures, and generate responses for contact center employees. This ultimately improves worker productivity and reduces response time. UPS also launched an AI chatbot to help employees answer HR questions. Subramanian noted that the company is proceeding slowly due to the sensitive information and personal data in HR systems, and emphasized the critical role of risk management and governance.
At AstraZeneca, AI is significantly reducing the amount of time it takes to conduct research. Cindy Hoots, Chief Digital and Information Officer, described a generative AI-enabled research assistant that quickly searches both internal and external data to answer complex scientific questions. The assistant has helped reduce the time it takes to conduct a literature review from months to minutes, she said. Hoots is now focused on scaling AI adoption. About 15,000 employees use the research assistant, she said, while roughly 5,000 use Copilot solutions and almost 80,000 have access to AstraZeneca’s internal ChatGPT.
At KB Home, employees evaluate a number land deals across 35 markets every week. Aggregating property data from different sources to determine whether to make an acquisition used to take 30-90 days, CIO Greg Moore said. With AI, KB Home can now complete the process in less than two weeks. The faster turnaround now enables the company to make more evaluations and manage more potential deals in the pipeline.
Developer productivity is another area of rapid experimentation. Many of the tools offered by major vendors are in their early days and have room to grow, said Brodbeck of Priceline. The team is exploring solutions that can learn from Priceline’s codebase and provide a richer and more contextual experience. Whether for code generation or another use case, Brodbeck said companies will likely need to deploy retrieval-augmented generation (RAG) to deliver more productivity.
At Augment, CEO Scott Dietzen is thinking about how to retrieve knowledge from internal codebases in a way that protects intellectual property and reduces the risk of leaking sensitive information. The team started with basic engineering tasks that can make developers more productive rather than trying to replace them altogether. Demand for these kinds of tools will last for at least a decade as organizations produce more software, Dietzen said.
The top use cases for digital assistants/copilots that are driving the most value for MSDS attendees are code generation, self-service chatbots, and enterprise search/knowledge management
Bringing the organization along on the AI journey
To drive a common understanding and widespread adoption of AI, CIOs have increased their focus on storytelling and talent development.
At Wilson Sonsini, Chief Information Officer Michael Lucas is focused on cascading AI communications across the firm. His team started with a general awareness campaign. That included employee town halls to communicate the broader strategy as well as AI-centric briefings to partners. Given the sea of media coverage about AI, Lucas encouraged leaders to develop their own elevator pitch to help their organizations clearly understand the company’s AI strategy. Driving a common understanding across the firm is key to driving adoption. “We feel like we need to learn, understand, enrich, and then apply and operationalize,” Lucas said.
At Liberty Mutual, Global Chief Information Officer Monica Caldas is delivering customized employee training and connecting it to the company’s capacity demands across 27 countries. It’s part of a workforce strategy plan called “skills to fuel our future.” First, the company surveyed more than 5,000 employees to determine their skill level around topics like data, data engineering and software engineering. Next, the company mapped over 150 skills, connected them to 18 domains, and assessed how and where to invest in training.
Now, Caldas and her team are helping employees apply that training to a variety of career paths. Instead of a traditional career development ladder, Liberty Mutual is evaluating how to map skills to different jobs and create a “jungle gym” or “lattice of opportunities.” The focus on specific skills, Caldas said, “will help you position your capabilities as a tech organization not just for today, but also plan out where it’s going.”
Education at the executive level is also critical. To bring executives along on the journey, Caldas introduced a program called Executech that helps improve organizational data literacy and elevates the digital IQ of decision makers. Enhancing teams’ tech acumen gives leaders the confidence to start conversations early about important technology topics like API integration.
AI adoption may not be uniform, and there is still lots to learn about how it will impact specific roles. At Eli Lilly, employees who have incorporated AI tools into their workflow are reluctant to give them up, said Diogo Rau, Chief Information and Digital Officer. However, widespread adoption is a continuous and sometimes challenging process, “a lot harder than anyone would guess,” Rau said.
Rau often gets more questions about the risks of AI than how it can be used to improve products and services. Another challenge is that teams excited about creating AI bots aren’t always excited about maintaining or training them. “There are lots of good firefighters, but not every firefighter wants to be a fire inspector,” he said.
62% of technology executives who attended the Metis Strategy Digital Symposium anticipate that the most significant impact that AI will have on talent is increased productivity
Leveraging ecosystem partners
Achieving the transformative potential of generative AI will require collaborating with networks of vendors, startups, peers, and academics. In addition to providing technology solutions, these ecosystem partners can help upskill employees, explore emerging challenges, and prototype new use cases.
Amir Kazmi, Chief Information and Digital Officer at WestRock, draws learnings from both established technology partners and startups. He also brings in academics and peers from other companies to share wins and lessons learned about generative AI.
Regal Rexnord’s Tim Dickson, Chief Digital and Information Officer, uses hackathons and internal events with vendor partners to increase the company’s digital IQ. The company also offers self-paced training from about 10 partners that includes pathways to certification. In the past seven months, more than 100 employees have received training on GenAI fundamentals from Databricks and robotic process automation from UiPath, as well as certifications from Microsoft Copilot. Even if employees don’t use these tools every day, increasing the number of people with technical skills means more individuals “can at least help, or even lead, these initiatives across the organization,” Dickson said.
CommScope CIO Praveen Jonnala, like many other technology executives, is thinking about how to drive a cultural shift around AI. He spends about 80% of his time on organizational change management and culture. He is also leaning into existing partnerships to take advantage of new AI solutions and educate teams. For example, he took business teams to Microsoft for a full day to learn more about the technology and its ability to unlock new business opportunities.
