739: Our broadcast today comes from our recent Metis Strategy Digital Symposium on the topic of mastering the human side of digital transformation. Rob addresses his role as a strategic facilitator within Tractor, speaks to influencing the prioritization of technology during M&A, and explains how he is building product management capabilities within the organization. Jen discusses the challenges of change management, the emphasis she places on her “platinum rule,” and driving change among her C-Suite level peer group.
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737: Our broadcast today comes from our recent Metis Strategy Digital Symposium on the topic of Establishing the Foundation for a Modern Enterprise. The panelists who spoke about this topic were Boris Shulkin, Chief Digital and Information Officer of Magna International, and Michael Rodgers, Chief Technology Officer of Pilot Company and the conversation was moderated by Metis Strategy Co-Head of Executive Networks, Research, and Media; Steven Norton. Michael Rodgers begins the discussion with the role technology plays in the broad businesses under Pilot Company’s umbrella and speaks to the ways he and his team are developing a holistic experience for the business’s customers. Boris talks about the digital transformation of Magna Intl. and the components behind the company’s cloud strategy, data strategy, and more.
735: Our broadcast today comes from our recent Metis Strategy Digital Symposium on the topic of Optimizing Value Delivery through Digital and Technology Capabilities. The panelists who spoke about this topic were Anita Klopfenstein of Little Caesars and Kirk Ball of Giant Eagle and the conversation was moderated by Metis Strategy Partner and East Coast Lead Alex Kraus. Both executives talk about how they align business objectives to operational needs and leverage data & analytics capabilities to improve the employee experience and internal training. Anita shares thoughts on Little Caesar’s “Area 51” initiative to help pilot innovations and measure their success at select locations while Kirk discusses the philosophy behind the co-creation of strategy to build commitment within the team.
726: Michael discusses how he is driving new digital touchpoints for customers and implementing a frictionless experience for truck drivers and other business partners. He describes the structure of the conglomerate, the various verticals he leads, and how marketing and data fit within his purview. Michael covers his career prior to Pilot and what innovations and new trends in technology are on his and Pilot’s roadmap. Finally, he describes the relationship Pilot has with universities to bring in new talent and foster a culture of innovation, among other topics.
714: Rob discusses how he is leveraging technology to improve customer and employee experiences, build a closer connection between them, and improve overall operational efficiencies. He describes the three verticals under his purview; technology, digital commerce, and strategy; why it makes sense to combine them under one role, and how he fosters cross-functional team culture to drive customer experience improvements. Rob shares perspectives from his experience across the retail industry, the insights he has drawn from across the different segments in retail, and how it has led to securing a board-level position in his career. Finally, he looks ahead at trends in data and artificial intelligence and reflects on the keys to his career success.
708: Justin Mennen, Chief Digital and Technology Officer of Rite Aid, discusses the digital transformation of Rite Aid and how it is leveraging the symbiotic relationship between traditional and digital commerce. He details the hallmarks of a great digital experience, the way his team is structured, and how he has recruited and trained talent to be able to deliver the experience to the company’s customers. Justin describes how he determines when the company invests in shared services across the business versus when a dedicated solution is necessary as well as how the digital platforms increase traffic to the in-store experience. Finally, Justin reflects on the keys to his successful career and how trends in artificial intelligence and data will drive a new level of personalized experiences.
704: Marykay and Carman speak with Metis Strategy’s Steven Norton about driving strategic IT modernization efforts at their respective companies. Marykay gives insight into Pearson’s use of data and technology to engage with consumers and the metrics she looks at to gauge the progress being made in the company’s digital transformation. Carman shares how he is applying digital to the in-person experience at Dollar General’s stores and how consumer insights have driven the evolution of the company’s mobile app. Finally, both executives talk about the methods they’ve followed to future-proof their organizations and foster resilience.
699: Vinod and Susan cover the topic of Data & Analytics as a Source of Resilience and Growth. Susan explains the role data & analytics play in delivering predictability and stability as a part of Boeing’s overall strategy, how she trains her team in the skills needed to achieve that, and why data is integral to a company’s culture and telling its story. Vinod describes how data & analytics impact the customer experience at Sam’s Club, how he is making Sam’s Club into an AI-enabled digital enterprise, and how he is democratizing that data across his business.
Not long ago, Target’s legendary chief information officer Mike McNamara announced his intent to retire. He would stay on through the naming of his successor. That successor has been found, as Brett Craig has been elevated to the executive vice president and CIO role at the company. He has been with the company for roughly 14 years, and he has held roles in technology and in merchandising among other business areas. His penultimate role was as the senior vice president of digital.
“The updates we’re making to our leadership team reflect the size and scale of our more than $100 billion business, while also positioning the company for continued momentum well into the future,” Target’s Chairman and Chief Executive Officer Brian Cornell noted. “I have tremendous confidence in [the company’s new leaders, Craig among them] and the value they bring to our organization as we work together to meet the needs of current and new Target guests.”
“This is a chance to work with thousands of world-class technologists building products and platforms that impact millions of people every day,” said Craig. “Our tech, data sciences and cybersecurity teams are simply doing an incredible job enabling Target’s strategy and advancing everything we do in service to our purpose. That’s a journey we’re going to accelerate, and Target’s culture of care, grow and win together will lead the way. How Target tech and our teams work together across the company is one of the most unique differentiators of our success.”
When reflecting on some of the areas that he will push hard to accelerate in the near term, Craig noted more personalized, relevant and seamless experiences for Target’s guests and creating new offerings that will drive more business to the company’s stores, Target.com and the Target app.
McNamara will stay on board as a strategic advisor to the company through the end of January 2023.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, was recently released. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
In 2015, when Mike McNamara received a call from a headhunter that Target, a Minneapolis, Minnesota-based nearly $100 billion revenue retailer was interested in having him come aboard as the company’s next chief information officer, he had one question: where is Minneapolis? McNamara is a native of Ireland, and he received the call when he was in the throes of a distinguished tenure as the CIO of Tesco in the UK. As he delved deeper into this opportunity, he realized this was the same Target that had had a notorious cybersecurity breach. The company was also just coming off an unsuccessful entry into the Canadian market, as well. Given this introduction, what attracted McNamara to leave his company for another much farther from home?
“The downside when you looked at it was that there was a business that lacked confidence in itself, but the upside was that you have this phenomenal brand, and you had a business that was brilliantly run financially, so a balance sheet to die for,” said McNamara. “Then they had a tremendous body of highly capable people.” He reconned that this was a case of a company that had slightly lost its way, but the ingredients for a remarkable rebirth were there, given its human and financial resources.
Part of McNamara’s reputation was built based on a remarkable digital transformation at Tesco, which included industry leading ecommerce capabilities. As such, he knew that Target’s future also had to be digital. Target had under-invested in digital capabilities prior to his tenure, but the impetus for his hiring was a recognition that this needed to change.
Like so many companies in the middle of last decade, Target had outsourced significant parts of its IT. “When I began at Target, 70% of the team was outsourced… [First, we had to ensure that] we were only doing work that was of value strategically to the organization. Second, we [had to] build up our own engineering capability in-house with a focus on the team. Then third, [we had to modernize] our architecture.” McNamara underscored this last point noting that architecture was the key to his vision. “The reality is nobody can predict the future,” he noted. “I couldn’t predict what was going to happen over the ensuing six years when I joined and clearly, a lot of things did happen, including the pandemic, which nobody saw coming. What was important was to start building an architecture that would be scalable, stable, secure, but agile, [giving the company] speed.”
This began a journey that would take the IT team from being 70% outsourced to 93% insourced today. By developing a strong stable of technical talent, he had a much stronger foundation upon which to build. That included investing in data and analytics to a much greater degree. The journey that was created led to talent being attracted to join for the next phases. His team now boasts having roughly 400 engineers dedicated to data science, and another roughly 200 mathematicians. These talented technologists have been among the keys to Target’s success across the past six plus years.
Target can now us artificial intelligence (AI) to recommend products based on searches, to aid demand forecasting and ordering and all along the supply chain. AI is used for workload planning, assortment planning, pricing and promotion of products. It is also used for smaller initiatives such as investigating the quality of imagery that the company puts on the website, or to correct errors in item set up.
McNamara has been a CIO long enough that he has seen the role fundamentally change from an efficiency driver focused mostly on the internal operations to a money maker for the enterprise. “[Today, IT is] about selling stuff far more than it is about moving stuff, which it was in the past in retail,” McNamara said. “It has completely changed over the course of my career. That engineering capability was important to build that up.” He went on to say that DevOps and the migration from a project orientation to a product orientation have also been great growth catalysts for technology and digital divisions in retail and beyond.
Speaking of the product orientation, McNamara’s commitment to it was complete. “We moved the entire team into a product structure overnight,” he emphasized. “Then we burned our bridges behind us by releasing all the project managers, program managers, and business analysts. Then we got on with making it work, which might sound a wee bit cavalier, but it wasn’t. We backed it up with a ton of training.” Today, his team focuses on a couple of hundred products across the business, each of which has a release either daily or weekly. He noted that the only limit to the speed of these releases was the ability of the business and customers to absorb the change.
The pandemic changed the buying habits of many, and Target’s ability to lean on digital revenue streams and digital experiences proved to be a remarkable advantage. Here an analogy was helpful. McNamara was used to the need to scale up digital at the time of Cyber Monday, the biggest online shopping day of the year that falls on the Monday following Thanksgiving. “We already had the ability to scale our systems to that kind of capacity, so that was relatively straightforward,” noted McNamara. “We also had to produce new applications and new features and functions both for our guests and our business at a phenomenal rate.” In essence, McNamara ran the Cyber Monday playbook throughout the year.
An example of an innovation that was necessary due to the health concerns of the pandemic was the limited number of people allowed in a store at any one time. It was critical that the company remain compliant with this. Many companies resorted to having team members stand at the doors and take a manual tally using click counters to determine who was coming in and who was going out. McNamara and his team developed an app powered using artificial intelligence that was installed over the entrance and exit doors of stores. The app kept an up-to-date count of how many people were in stores. That app took a week to produce and two weeks to roll out nationally.
A key to this remarkably rapid response was having the engineering team in house. “Having that engineering team in house without the handoffs, having a product structure that manages the backlog, and then having an agile architecture [all made the difference],” said McNamara. “There is no way Target would have had the standout year we had last year had we not invested in the capability in the team and the definition of the architecture.”
It has been announced that McNamara is months away from his retirement from Target. This will bring to an end one of the more remarkable CIO careers, but his history of transforming a retail stalwart into a digital leader will live on as his legacy.
