The recent system failures at Southwest Airlines and the Federal Aviation Administration caused major disruptions for travelers, pilots, and cabin crew across the country. It also underscored the importance of prioritizing technology modernization initiatives, data integration, and the management of technical debt as the aviation industry races to make updates that many consider long overdue. This article will give a brief overview of both incidents and share lessons technology leaders can take to their own organizations.
In late December, a winter storm and frigid temperatures impacted airlines across the country. While many airlines bounced back relatively quickly, Southwest did not. Cancellations mounted and the company was unable to address them in a timely, automated way.
Southwest’s flight and crew scheduling is managed by a mainframe-based software that was built decades ago and is nearing the end of its life, according to the airline. When the system is overwhelmed, employees have to resort to manual processes. As the backlogs grew in December, “there just was not enough time in the day to work through the manual solutions,” Southwest COO Andrew Watterson said. By December 25, the Southwest team decided “the only way to pull the airline’s operations back from the brink would be to cancel even more flights: around two-thirds of its schedule for several days.” Nearly 17,000 flights were canceled, disrupting the lives of about two million customers.
The company is working with GE Digital to add new functions to its mainframe-based software, Crew Optimization (formerly known as SkySolver), to improve the flight and crew scheduling process. GE Digital owns the Crew Optimization technology. Bob Jordan, Southwest Airlines’ CEO, said the technology and processes worked as designed but “they just were all hit by overwhelming volume.” A GE spokesperson told the Wall Street Journal that its software isn’t an end-to-end solution, but rather a backend algorithm that airlines can supplement with other software to manage disruptions. Southwest and GE Digital are working together to develop a new release for the software to address past problems to reduce the need to do so manually.
Unions at Southwest have been urging the company to modernize the antiquated scheduling technology. “We’ve been harping on them since 2015-ish every year,” Southwest pilots union vice president Mike Santoro told CNN. In 2022, the Southwest flight attendants union wrote a letter to management prioritizing “modernization of the antiquated reserve system” and “improved communication tools to alleviate long scheduling hold times” over pay increases. Watterson said that Southwest was working through multi-year system upgrades, and had focused on maintenance and group operations ahead of crew-scheduling updates.
As a result of the disruptions, regulators and lawmakers have called for investigations and penalties against the airline. Additionally, the company’s board has created an operations review committee and the company has committed more than $1 billion of its annual operating budget to maintaining and upgrading IT systems as part of a five-year strategic plan. The events have cost Southwest Airlines an estimated $725 to $825 million, and the ripple effects continue to be felt.
Just weeks after the Southwest meltdown, the FAA’s system experienced an outage that led to thousands more travelers experiencing flight delays and cancellations. Like Southwest, the FAA’s outage originated from systems scheduled for upgrades. The affected system, Notice to Air Missions (NOTAMs), is a critical tool for alerting pilots about conditions that could impact flight safety and for real-time information on flight hazards and restrictions. Pilots are required to consult NOTAMs before every flight.
Due to safety concerns and to address the outage, the FAA grounded departures nationwide for the first time since 9/11. “Today’s FAA catastrophic system failure is a clear sign that America’s transportation network desperately needs significant upgrades,” said Geoff Freeman, president and CEO of the U.S. Travel Association. “Americans deserve an end-to-end travel experience that is seamless and secure. And our nation’s economy depends on a best-in-class air travel system.”
The FAA has identified a damaged database file on systems scheduled for upgrades as the cause behind its system outage, and found no evidence of a cyberattack. Investigations are ongoing to prevent any similar disruptions to travelers in the future.
New tools are being developed, some originating from startups, to modernize and automate processes and systems in the airline industry that are manual, siloed, and outdated. Executives at a number of major airlines have reaffirmed their commitments to investing in technology modernization and operational infrastructure during their January quarterly earnings calls.
The examples above serve as cautionary tales on the potential dangers of not addressing needed system upgrades in a timely manner. Technology leaders can keep the following points in mind as they build organizational resilience amid a fast-changing technology landscape:
Don’t put modernization efforts on the back burner. CIOs and their organizations are constantly balancing a shifting portfolio of initiatives. Challenges at Southwest and the FAA illustrate the heightened risk and serious consequences of waiting to make critical upgrades or letting technical debt pile up. If your team doesn’t have a strategy for chipping away at that technical debt, it’s time to address it.
Connect the dots between internal systems, employees, and customers. Long-reliable legacy systems may be an afterthought for many organizations (until they stop working, that is). Incorporate maintenance and upgrades into short-term and long-term business and technology strategies with an emphasis on how these systems ultimately affect employee and customer outcomes.
Have a backup plan and prepare for the worst. Develop and regularly test response plans with teams to reduce risk and ensure the organization is prepared to navigate potential mishaps.
Leverage cloud-based systems where appropriate. Partnerships with cloud providers are expected to help airlines improve their technologies. A shift to cloud solutions is no simple or risk-free task, and successful implementations go well beyond simply installing the technology, but strategically scaling these technologies can create greater operational agility, help automate processes, and make data integration more seamless and secure.
Continue to enable real-time data and communication that can take place across teams and organizations. Where possible, eliminate silos that can slow and reduce the quality of data sharing and, at worst, bring operations to a halt. Ensuring accurate and accessible data enterprise-wide is not a small task and often requires a robust data strategy to execute effectively, but its benefits can extend well beyond helping with crisis response.
Continue to gather and listen to feedback. For executives especially, careful listening and communication are key to empowering teams, creating an effective digital experience, and ensuring they have the tools needed to do their jobs.
Our next Digital Symposium is just around the corner. Join us on February 16 as technology executives and other industry leaders discuss how AI is transforming their companies, the role of technology in driving sustainability initiatives, and how to build a culture of innovation in trying times.
CIOs and other technology leaders, register here to reserve your spot today and stay tuned for agenda updates. We look forward to seeing you!
(Click here for highlights from our most recent Digital Symposium, and stay tuned to our YouTube channel for videos of our panel discussions.)
12:30 p.m.
Welcome and Introductions
Welcome and introduction to the Metis Strategy team.
Peter High, President, Metis Strategy
12:40 – 1:05 p.m.
Establishing a Data Strategy in Complex Organizations
Krzysztof Soltan, Chief Information Officer, Vulcan Materials Company
Anupam Khare, Chief Information Officer, Oshkosh Corporation
Moderated by Michael Bertha, Partner & Central Office Lead, Metis Strategy
1:05 p.m. – 1:30 p.m.
Talent’s Strategic Role in Making Transformations Stick
Sastry Durvasula, Chief Information and Client Services Officer, TIAA
Ramon Richards, Chief Information Officer, Fannie Mae
Moderated by Alex Kraus, Partner & East Coast Office Lead, Metis Strategy
1:30 – 1:55 p.m.
From CIO to COO: Tech Leaders’ Expanding Operational Purview
Rob Lux, Chief Operating Officer & Fmr. Co-CEO, Cenlar
Mark Wassersug, Chief Infromation Officer & Fmr. COO, Intercontinental Exchange Inc.
Moderated by Peter High, President, Metis Strategy
1:55 – 2:20 p.m.
Becoming an AI Company
Katia Walsh, Chief Global Strategy & Artificial Intelligence Officer, Levi Strauss & Co.
George Brady, Chief Information Officer, loanDepot
Moderated by Chris Davis, Partner & West Coast Office Lead, Metis Strategy
2:20 – 2:45 p.m.
Cultivating an Enterprise Mindset
Michelle Greene, Chief Information Officer, Cardinal Health
Marco Argenti, Chief Information Officer, Goldman Sachs
Moderated by Steven Norton; Co-Head Executive Networks, Research, and Media; Metis Strategy
2:45 p.m.
Closing remarks and adjourn
Click here for highlights from our December Digital Symposium, or watch the panels on our YouTube channel. We look forward to seeing you!
As we enter 2023, many technology executives are preparing their organizations for a possible economic downturn. In addition to pursuing growth and transformation initiatives (though perhaps with a tighter budget than before), they are exploring ways in which technology can deliver efficiency and resilience.
In a recent episode of “Forbes Talks”, Peter High joins Diane Brady to discuss the growing role of the CIO and technology in the workplace, as well as the evolving technology landscape in 2023 and beyond.
Watch the Forbes interview with Peter High below:
Thank you to all who attended the 11th Metis Strategy Digital Symposium. As we enter 2023, many organizations are seeking faster pathways to growth and opportunities to boost resilience in anticipation of economic headwinds. Nearly 60% of attendees noted rising inflation and interest rates as the macro issue that will have the biggest impact on their organizations in the year ahead.
Modernization efforts remain a priority as companies seek to drive efficiencies and revenue growth. Chief Information Officers and their peers are also strengthening relationships with business partners as digital technologies play an increasingly greater role in product development, operations, and customer experience.
Below are highlights from the event. Stay tuned to the Metis Strategy YouTube channel and Technovation podcast in the coming weeks for recordings of individual panel discussions. In the meantime, click here to request an invitation for our next virtual event on February 16, 2023.
Poll: Which macro issue do you anticipate will have the biggest impact on your organization in the year ahead?
In preparation for the year ahead, technology leaders noted they are:
As economic pressures add potential challenges to organizations across industries, technology leaders are deepening relationships with business partners to deliver tangible value quickly.
At Magna International, Chief Digital and Information Officer Boris Shulkin is focusing his efforts on identifying use cases and partnering with business teams on execution, adding that “credit can be shared when things go well.” Shulkin noted that his role is rising in importance as cybersecurity and operational efficiency become more critical to the bottom line of the company’s manufacturing facilities.
At supermarket chain Giant Eagle, CIO Kirk Ball brings front line workers into the product development process from the start to ensure it aligns with their needs. Spending time in the shoes of end-users helps eliminate friction and provide them with the necessary tools, data, and capabilities to do their jobs. He also continues to engage with peers and business partners across Giant Eagle on the company’s transformation efforts, which will be executed over the next three to five years. “It’s not my strategy, it’s our strategy,” he said.
The increased collaboration with teams outside IT underscores the need for more customer- and business-centric thinking. Jennifer Hartsock, Chief Information and Digital Officer at Cargill, emphasized the need to think as a business leader first and a technology leader second, working alongside peers to understand the business context, develop strong relationships, and focus on solutions that truly serve the broader organization. “Sometimes we’re not prepared to truly understand what we’re trying to enable,” Hartsock said. She encouraged other leaders to lean into tough conversations, make tradeoffs where necessary, and meet others where they are so that their voices are heard and strategy creation becomes a “together conversation.”
As technology and digital leaders continue to lead cross-functional initiatives, they’re proactively looking at new technologies to create new opportunities and address existing challenges. At Tractor Supply Co., one area Chief Technology, Digital Commerce, and Strategy Officer Rob Mills is focusing his efforts is M&A. At the table with C-suite peers, his purview allows him to articulate not only how to integrate a particular acquisition, but also the impact it will have on the company’s technology platform and architecture years down the road. That strategic focus opens new conversations about how the technology organization can best adapt to ensure any M&A activity has the needed processes and technologies behind it to drive long-term opportunities.
While companies continue to build out internal products and services that support the customized needs of their business, some MSDS speakers have taken the opportunity to commercialize their offerings to customers, using technology as a means to connect to partner ecosystems. At Pilot Company, Chief Technology Officer Michael Rodgers developed a cloud- and API-first strategy that focuses on utility, functionality, and efficiency for drivers and team members. The company has built a platform that allows the company to expose those APIs to other trucking companies. This approach allows Pilot to embed its technology directly into apps like GasBuddy, giving drivers using the app the ability to engage seamlessly with Pilot’s services.
Meta’s rebrand as enterprise engineering meant embracing two broad mindsets: understanding and incorporating internal employees into product building, and making a fundamental shift to a “build” culture that can provide customers with custom tools, technologies, and platforms needed to do their jobs in the most effective and efficient way possible, CIO Atish Banerjea said. “You’re essentially going away from a mindset where your engineers are just taking in a third-party system and configuring it.” Building tools for internal users has also influenced development of commercial products. One product designed to make onboarding information accessible to new Meta employees ultimately became part of the company’s Workplace offering for external customers.
At Toptal, the world’s largest remote working company, CEO and Co-Founder Taso Du Val spoke to the benefits of building platforms, paired with robust data and information architecture, to drive greater agility. Since Toptal built and owns all parts of its customized software platform, it is able to create synergies, scale processes, and make changes more quickly. On the flipside, the customized nature of those internal systems makes it unlikely those technologies could become a commercial product.
At XPO, CIO-turned-CEO Mario Harik is driving a strategy focused on growth and using technology to better serve customers, help goods move through the supply chain, operate more productively, and efficiently expand margins. As XPO grows, there has been more of a focus on financial outcomes and tech stacks contributing to company expansion.
During his time as CIO, Harik learned to prioritize the commercial outcomes of technology solutions, and emphasized the importance of financial acumen. “Knowing the impact on the top line and the bottom line is essential for investments and getting expected outcomes,” Harik said. As MSDS attendees contemplate an expanded role in the C-suite, they are looking to sharpen customer centricity and financial acumen.
Poll: As you contemplate an expanded C-suite role, which skill or focus area are you most looking to sharpen?
Kelly Kent, Chief Transformation Officer at ServiceNow, said her work with a number of organizations on their transformation efforts is surfacing new conversations around metrics. While productivity is still top of mind in any transformation initiative, companies now are asking about the best ways to measure customer and employee experience, as well as measure revenue impact from digital channels. The ability to track and manage those metrics, both financial and not, will be key for CIOs as they look to move at scale and with speed for their companies in 2023.
Today’s emerging technologies are tomorrow’s big disruptors. To make organizations more nimble, technology executives are focused on creating more opportunities for innovation and improving test-and-learn processes. Gail Evans, Chief Digital and Technology Officer for Disney Parks, Experiences, and Products, first listens to customers, cast members and others to better understand the outcomes to chase. She encourages teams to “test before you invest” – to pause and think about what to test, assess the cost of building, and fully consider the value that a new solution would deliver to an end user before investing heavily in a new initiative.
Evans encouraged other executives seeking to expand innovation efforts to pay close attention to and understand mega-trends, have a game plan for responding to major technology and business disruptors, and ensure innovation is open to everyone at the company rather than just one person or one team. “Every employee that is in your company innovates something.”
Poll: How much of your IT budget is currently allocated toward ‘grow/transform’ activities?
At Little Caesars, CIO Anita Klopfenstein helps operationalize innovation through “Area 51,” a group that comes up with a number of potential solutions that haven’t gone into production, such as efforts to reduce waste or automate production lines. Key success metrics are tied to each initiative. If something shows promise, teams will build a prototype and roll it out with a franchisee that is open to new technology. They will develop the technology and measure progress until it reaches the desired success metrics before gradually rolling out successful initiatives systemwide. To drive innovative thinking, Klopfenstein encourages members of the IT team to work in stores a few times a year to understand how the technologies they have built impact everyday workflows. “There have been several cases where just moving a button from one side of the screen to another…really impacted the operations of the store.”
From inflation to the war in Ukraine and the ongoing effects of COVID-19, a perfect storm of economic, social, and geopolitical disruptions has increased uncertainty for business leaders. Building on research and insights from technology executives across industries, Metis Strategy has identified five actions leaders can take to navigate that uncertainty in the months ahead:
Recent downgrades to economic forecasts suggest an economic decline is on the way (indeed, some argue that it has already begun). In July, the International Monetary Fund released an updated global economic outlook which forecasted growth to slow to 3.2% in 2022, down an additional 0.4% from its April forecast and sitting at just above half of the 6.1% growth from 2021. The IMF cited the war in Ukraine, supply chain disruptions, and tighter monetary policy among the key drivers behind the decline. In the U.S., inflation continues to rise, recently surpassing 9% to reach a 40-year high. Additionally, interest rate hikes to tame inflation are already underway by the U.S. Federal Reserve. With so many economic factors at play, uncertainty will be the only constant for the time being. As such, contingency planning and risk management in decision making will be vital to long-term success.
Multi-scenario planning allows decision makers to identify potential outcomes and the likely predictors of each to ensure that the organization is ready to act quickly no matter what comes to pass. Companies must not place too much emphasis on small data variations, as this course of action will not necessarily yield the best results given the array of factors at play. Rather than try to predict or plan for each incremental interest rate hike, for example, leaders instead should prepare for a combination of possible economic conditions: inflation and a recession, inflation and economic growth, stagflation, and so on.
By pursuing macro-level planning for multiple scenarios, organizations will better be able to see the shifting landscape and make timely adjustments rather than wavering due to “paralysis by analysis.”
New work models demand new infrastructure. That sentiment has never been as profound as it was over the past two and a half years as CIOs facilitated a massive shift to remote work. Today, those CIOs face a mandate to enable productive work in a hybrid environment.
As hybrid work models become the norm, it is time for CIOs to focus once again on their organization’s long-term agenda. Corporations know that the pace of change in technology has never been as quick as it is today, and at the same time will never be this slow again. With over 70% of organizations pursuing a flexible or hybrid work model, companies must invest in infrastructure, training, and culture to provide teams with the tools they need and ensure a strong and collaborative environment across more flexible work models.
That requires giving people the tools and skills they need to navigate the uncertainty that lies ahead. Upskilling and reskilling programs are some of the most prominent ways to do this. A LinkedIn study found that 94% of employees would stay longer at a company that invests in their learning. This has manifested itself in many ways at insurance giant MetLife, which launched a digital academy for employees to develop technically. The company has also worked to foster a culture in which employees feel empowered to achieve their career aspirations, Bill Pappas, MetLife’s Head of Technology and Operations, said in a recent episode of the Technovation podcast. Part of developing a strong hybrid model includes investing in the necessary tools, from collaboration platforms to cloud infrastructure, that enable teams to work productively from wherever they are.
Every organization must define its own version of a sustainable work model, including how to attract and retain employees, and how to nurture the desired culture. As old work operating models are redefined and new ones are implemented, investments in people and infrastructure that enable digital dexterity, paired with an increased focus on cultivating culture, will be key differentiators for organizations’ long-term success.
Supply chain challenges brought on by COVID-19 and the war in Ukraine, among other factors, have exposed the fragility of global trade networks, which have seen relatively little disruption over the past 30 years. The global economy’s reliance on Ukraine and Russia for crucial commodities such as oil, wheat, and neon (used in chip manufacturing) has hurt national economies and small businesses alike. The war also has disrupted both air cargo routes and sea shipments, driving up wait times and prices. Trade restrictions (such as sanctions and tariffs) and weakening trust between countries further compound those challenges. Increasingly, companies are questioning whether global supply chains will be as beneficial as it has been in the past.
Consequently, executives are re-assessing the viability of relationships with suppliers both foreign and domestic. Decision-makers may benefit from diversifying their supplier portfolios, possibly favoring those that are more geographically proximate and located in more politically stable countries to further help prepare and protect against future disruptions. Companies such as Intel and General Motors, for example, are building new manufacturing capabilities within the U.S. to decrease their dependency on suppliers in Asia. However, the decision to regionalize varies widely across organizations and industries, and many economists, academics, and executives are speculating about what the next decade holds. Professor Willy C. Shih of Harvard Business School argues that regional supply chain blocs may be the future of international trade as organizations emphasize safer and more stable routes. Others contend the benefits of a global supply chain (i.e. reduced costs), will regain value and that a “transformational shift from global to regional business” is unlikely. The common factor across both theories (and many others) is that significant instability is likely to endure. That makes building supply chains with sufficient flexibility of paramount importance. Technology offers several avenues to achieve this.
Many organizations are turning to digital tools to boost supply chain resilience and transparency. Companies can leverage artificial intelligence and machine learning to carry out risk analysis of supply chain patterns in real-time. Autonomous planning, for example, allows organizations to increase supply chain efficiency and decrease necessary human involvement. Enterprise resource planning upgrades and advanced track-and-trace solutions also offer more visibility into the movement of goods and can help mitigate risk. Furthermore, emerging technologies such as blockchain, autonomous mobile robots, and 3D printing may offer additional benefits from the warehouse floor to a product’s final destination.
Cybersecurity remains a priority for all members of the executive suite. Last year saw a record number of data compromises, up 68% from 2020 with an average cost of a staggering $4.24 million per breach. Roughly 65% of respondents in Foundry’s 2022 State of The CIO study said current socioeconomic pressures have further boosted the importance of increasing cybersecurity, and cyber has been noted as the CEO’s top priority for IT in 2022.
The increasing volume of digital interactions has led to a dramatic rise in the likelihood of breaches and the cost of protection. Facing a threat landscape that is evolving faster than ever, organizations should act quickly to re-evaluate company polices, assess risk management strategy, and bolster both internal and external security practices. This requires a mindset shift in how security is viewed. Traditionally viewed purely as a cost center, organizations must view cybersecurity as a critical piece of the enterprise risk mitigation strategy. Today, businesses must continuously update their cybersecurity practices to reduce the risk of becoming a target and ensure they can respond quickly if or when they face an attack.
Technology leaders should communicate clearly to C-level peers and boards about how risk is being managed. At the same time, it’s important to continue developing strong cybersecurity hygiene at all levels of the organization and to disincentivize unsafe behaviors. Security policies should be evaluated and updated regularly to ensure that they are keeping up with changing times. Regardless of what specific technologies an organization pursues, it must accompany the mindset shift to cybersecurity ultimately as a risk mitigator and cost saver, rather than just a cost center.
Environment, social, and governance initiatives (ESG) have been on the rise for the past several years. Individuals are becoming increasingly concerned not only with working for a company that is actively pursuing ESG initiatives, but also in purchasing from one. This trend shows no signs of slowing down.
It is critical that organizations clearly communicate actions and results of ESG efforts to the public. Historically, however, ESG goals have not always had clear or easily obtainable data and metrics. Technology is making that job easier. Connected devices, for example, can conduct remote diagnostics of buildings, enabling “smart buildings” and helping to minimize their carbon footprint. CIOs can lead the charge on ESG initiatives by identifying key results that IT can deliver, weaving ESG into an organization’s broader digital strategy, and rallying support across the organization to ensure progress on ESG initiatives is fully realized.
The global business environment is in a period of transition. Leaders must use this time to ensure their organizations can respond in a nimble fashion to unexpected changes and not only survive, but thrive, no matter what the future holds. This requires a holistic look across people, process, technology, ecosystems, and strategy and, in many cases, willingness across the enterprise to transform operating models and ditch traditional ways of working. Technology leaders can be at the forefront of this shift, pairing their expertise in digital with a focus on operational excellence to drive sustainable change across the enterprise.
General Motors today named two new technology leaders and said it would split its information technology organization into two groups, one focused on global IT and the other on software product development for customers.
Fred Killeen was named VP of global information technology and Chief Information Officer, reporting to CEO Mary Barra. He will lead the Global IT team, which is responsible for back-office IT support and using software to support growth across the company. Killeen most recently was GM’s Chief Information Security Officer and CTO, where he oversaw the automaker’s global information security and IT risk management programs.
Stacy Lynett will run the Digital Business Software group. Reporting to newly appointed Chief Digital Officer Edward Kummer, her team will be responsible for technology strategy and software product development that is geared toward delivering enhanced products and experiences for customers. She will also support global customer and dealer systems.
Lynett most recently was executive director and CIO of Global Product Development and Quality for GM IT, as well as CIO for Global Corporate Functions. In that role, she focused on the company’s Workday solution and supporting IT for the legal and communications functions.
Both Killeen and Lynett previously reported to CIO Randy Mott, who last week announced plans to retire.
The Global IT and Digital Business Software groups will be a critical part of GM’s plan to deliver $20 billion to $25 billion in software-enabled services revenue annually by 2030. In a press release, GM noted that both groups “will continue to collaborate on driving innovation, providing the best software and technology solutions to support the company, attracting and retaining talent, professional development, and more.”
“The new structure and dual operating model will enable GM to fully leverage its strong foundation in IT capability, talent and resources, as well as reduce complexity and improve speed,” Barra said in the statement. “Stacy and Fred bring unique backgrounds and experiences to help us seize the opportunities software plays in our business as we move from automaker to platform innovator.”
Vinny Hoxha, deputy CISO at GM, will take over as Chief Information Security Officer, reporting to Killeen.
PSteven Norton is co-head of CIO networks, research and media at Metis Strategy, a business and IT strategy firm. He previously was a reporter for The Wall Street Journal’s CIO Journal, where he covered the changing role of the chief information officer and the rise of emerging technologies including artificial intelligence and blockchain. At Forbes, he covers new CIO appointments as well as the ways in which technology executives are developing the workforce of the future.
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It may seem strange to think of a technology or digital leader being responsible for aligning strategy across the enterprise. Since the inception of the CIO role, strategies were often created and then brought to them. They were not engaged in the strategic planning processes of the rest of the organization. Instead, they had to bring to life the outcomes of those strategies.
If you think about it, though, aside from the chief executive officer, only the chief financial officer and chief human resources officer has the breadth of purview comparable to a CIO or chief digital officer, and the technology and digital executives are increasingly involved in customer-facing activities in a way that the CFO and CHRO roles have not historically been.
Technology and digital leaders must recognize that they engage with the rest of the enterprise and the company’s customers, and that is rare if not unique. As such, they must leverage this advantage to a greater extent in fostering strategic alignment.
Strategic alignment means ensuring there is alignment from enterprise strategy to divisional, business unit, or functional strategy. This alignment is often misunderstood or lacking in companies, and that disconnect means wasted effort and money for the enterprise.
Further, a lack of well-articulated plans at the divisional level means the path to bringing those plans to life will be murky at best. For reasons of self-preservation and value-creation, technology and digital leaders must push for better.
Translating IT strategy from the enterprise level to the divisional level is important because it is at the divisional level where the work is done. Enterprise strategy typically calls out objectives related to revenue growth, cost efficiency, customer satisfaction, geographic expansion, product innovation and the like. It is the divisions of the company that determine how each of those will happen.
Let’s take revenue growth as an example. Growing revenue is vital to the health of a company, but each function — from sales and marketing to specific product or service areas — contributes in different yet important ways. The specifics of what each function will do needs to be formulated clearly to have teams go and find the new revenue through the various mechanisms available across the company.
Engage teams to conduct an analysis of strengths, weaknesses, opportunities and threats (SWOT). Such analyses are typically simple, easy to understand, and ensure that leaders can gather information quickly, easily and at the right level of granularity:
As you gather feedback from these SWOTs, it is important to categorize the feedback into topics like people, processes, product, brand, geography or market, finance, customers, organization or culture, competition, technology, vendors or partners, and the like. These form the vestigial versions of objectives for the enterprise or division.
Optimally, you should gather that feedback into a common framework of objectives, goals, tactics and measures.
Each objective should have a goal associated with it. This is a success metric that helps chart the path to success.
Using the same rather generic enterprise strategies, the goals might be defined as revenue growth (grow revenue by 15% in the next year), cost efficiency (grow costs at a rate 5% under revenue growth in the next year), customer satisfaction (improve customer satisfaction with our products from 70% satisfied to 80% satisfied in two years), geographic expansion (open 10 new offices in the coming year) or product innovation (introduce two, $50 million revenue products in the next year).
Try to limit the number of goals to two, as if you go for more than that, the strategy is less of a filter and is permeable to too many ideas.
Next, the digital and technology leader can brainstorm tactics with members of the enterprise or divisional team who are experts in the area noted by a given objective. As noted above, these are the various actions available to the company (or division) that help it reach the goal(s) articulated.
It is important to note that tactics should never include the name of a particular solution. The extent to which a project name or a vendor product is noted in a strategic plan renders it more important than it is. The action is one thing; the means of delivering the action are another.
You may believe that Salesforce is the solution you wish to use for customer relationship management, but better to articulate the need for CRM than to note the solution. The solution should be debated.
The tactics can be more plentiful, and during the brainstorming phase, definitely err on the side of more rather than fewer tactics. After the list is finalized, the tactics should be prioritized. The prioritization should be undertaken based on the perception of which ones are being pursued today, which ones are likely to be pursued in the near term, which will be undertaken in the medium term, which will be undertaken later, and which ones may or may not be undertaken.
Finally, a measure or measures should be defined for each tactic. For the same reason noted for the goals, try to limit them to two. For the goals and measures, remember the acronym SMART.
Our current moment has provided an opportunity for CIOs and other technology leaders to be the catalyst for their firms’ strategic evolution. These executives should take advantage of driving digital change. Otherwise, they risk digital driving them.
Peter A. High is the author of GETTING TO NIMBLE: How to Transform Your Company into a Digital Leader and President of Metis Strategy, a management and strategy consulting firm focused on the intersection of business and technology.
With all the ways digital innovation has enabled companies to remain productive during the pandemic, one of the most positive outcomes is improved collaboration across traditional business silos. In my new book, Getting to Nimble: How to Transform Your Company into a Digital Leader, I discuss how enterprises have made these silos more permeable, creating greater partnerships along the way.
Consider the following five examples and how they could apply to your digital transformation efforts.
Talented technologists are in high demand at most organizations, tasked with helping teams in other divisions figure out the digital implications of their ideas and strategize accordingly. In many cases, these ideas come from the technologists themselves. Companies that provide such “T-shaped” career paths offer an enormous advantage, developing leaders with great breadth and depth of experience. When they ascend to “chief” roles, they do so with a much clearer understanding about how value is created within the enterprise.
Agile methodology has been a boon for collaboration across the enterprise.
The traditional “waterfall” method of development involves someone from the business side (outside of IT) placing an order with the IT department. The IT team then develops this order, with little input from the business side until the project is completed months later.
In contrast, agile development includes the intended audience or user of the project in development from ideation through completion. With each iteration, the user validates value, and features are amplified or turned off accordingly. In some cases, the entire project may even be scrapped as a result of what the team learns.
DevOps blends two traditionally siloed parts of the technology and digital domain: development and operations. In a traditional project development model, developers take a project from ideation through completion, and the operations team then moves it forward. There is often a moment in the lifecycle when the project is “thrown over the wall” from development to operations (even this phrase highlights the distance and disconnects between the activities of the two groups).
DevOps instead makes delivery teams responsible for production issues and fixes, whether legacy or new, drawing them into the lifecycle earlier. Greater levels of involvement and accountability make for better work products.
The migration from a project to a product orientation is another area that benefits from greater collaboration. Internal “products” are also good examples of this – think order-to-cash, onboarding new hires, or creating a mobile customer experience.
These products potentially involve great value, and the product teams are typically cross-divisional or cross-discipline: They might include tech and digital, marketing, sales, operations, and any other division to which the product is relevant. A product leader should lead the cross-functional team, and that team should be prepared to remain intact for a longer period of time than the typical project.
An early example of this type of project orientation comes from Atticus Tysen, Chief Information and Security Officer at Intuit. When Tysen became CIO, he brought with him a product orientation, defining products for IT to drive. By developing in long-term teams, each team member was able to develop a higher level of expertise in the product area than they would have in a more traditional project structure.
Data strategy has also driven more cross-functional thinking. Done well, all strategy should invite greater collaboration across traditional silos since value is truly driven at the intersection of the disciplines. Data strategy should apply everywhere data is gathered, secured, synthesized, and analyzed – across the entire company.
Many companies have found it useful to have a leader who drives data strategy on the company’s behalf. To do this effectively, that leader (whether the CIO, the chief data officer, or another IT role) should engage leaders in other parts of the company to ensure that the data strategy is as comprehensive and useful as possible.
These are just a few areas where stronger collaboration is happening across industries and geographies. Companies that fail to take advantage of these trends risk falling behind more nimble players in their industry.
Peter A. High is the author of GETTING TO NIMBLE: How to Transform Your Company into a Digital Leader (Kogan Page, Spring 2021) and President of Metis Strategy, a management and strategy consulting firm focused on the intersection of business and technology. He has advised and interviewed many of the world’s top CIOs and leaders at multi-billion-dollar corporations like Gap, Bank of America, Adobe, Time Warner Inc., Intuit, and more.
LoanDepot has named George Brady Chief Digital Officer, effective July 6. LoanDepot has funded more than $300 billion in loans since its founding in 2010 and currently ranks as the second-largest retail nonbank lender and one of the leading retail mortgage lenders in the United States. LoanDepot is an approved seller and servicer for Fannie Mae, Freddie Mac, and Ginnie Mae.
Brady will oversee all of loanDepot’s technology capabilities, including the leading proprietary platform, mello, with a specific focus on spearheading loanDepot’s technological innovation. Brady will report directly to loanDepot Founder and CEO Anthony Hsieh. LoanDepot’s technology team, led by Chief Information Officer Sudhir Nair, will report to Brady.
“Pushing the technology envelope is in loanDepot’s DNA,” said loanDepot founder and chief executive officer Anthony Hsiea. “Since our launch in 2010, our technology-powered products and services have changed the game for both customers and originators by providing an exceptional experience they can’t get anywhere else.”
In describing Brady’s hire, Hsiea went on to note, “George is a world-class talent whose unmatched knowledge, skills and leadership adds incredible horsepower to an already exceptional team. Under George’s leadership, I’m confident we’ll drive our world-class platform, mello, to new heights and continue to cultivate a culture of innovation and technical excellence. We have a tremendous opportunity to not only continue our innovation path as a category leader, but to shape and change the entire industry.”
“LoanDepot has a deep understanding of how technology can push the boundaries to enable both consumers and originators to seamlessly and successfully navigate the lending process,” noted Brady. “Between its remarkable track record of digital innovation, the talent and passion of its outstanding team, and the commitment of a visionary CEO to stay on the cutting edge, loanDepot is in a unique market position. The time is right to set the new standard for technological excellence and expand our capacity to meet the changing expectations of our customers.”
Brady has spent most of his career in financial services at companies like Goldman Sachs, Fidelity Investments, and Deutsche Bank. He was most recently the Chief Technology Officer at Capital One.
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.
The company now known as Cox Enterprises was founded nearly 120 years ago by James Cox, a man who would become the Governor of Ohio. It began with his first media property, the Dayton Daily News, and developed into a media conglomerate covering many cities. It is now a $20 billion private, family-owned company with 55,000 employees. Cox Enterprises operates across three business categories: Communications, which includes Cox Cable; Automotive, which includes Manheim Auctions, Kelley Blue Book, and Autotrader; and media, which dates back to the company’s founding. Much of the media business was divested in 2020, though the company still owns the Dayton Daily News and a few other properties. Much of that part of the company was divested in 2020, though the company still owns the Dayton Daily News along with a few other properties.
The company’s chief information officer is Richard Cox (no relation to the founder). He joined the company in 2013 as part of the Autotrader.com team and took on the CIO role in October 2019. However in 2018, he took a break from his ascent in Cox Enterprises to join the City of Atlanta as Chief Operations Officer, which proved to be a seminal experience for him. The current mayor, Keisha Lance Bottoms, was early in her administration and called upon Cox to help her set things up. “We went to high school together,” recalled Cox. “I hadn’t talked to her in 30 years, so it was just this really interesting opportunity. Cox [Enterprises] allowed me to go help her at the City of Atlanta for about a year and a half. I was an executive on loan.”
During his first week in that role, Atlanta experienced the largest ransomware attack in its history. This was a few months before Atlanta was to host the Super Bowl, making the situation all the more impactful and stressful. In retrospect, Cox sees it as a blessing in disguise. “I am absolutely convinced if we had not gone through that, that Super Bowl would have been [all the more] challenging,” remembered Cox. “We were on high alert during the Super Bowl. We were being scammed on a regular basis, but because we were really prepared [due to the earlier cybersecurity attack] it was seamless. We didn’t have any security issues at all, and the city now is in a good posture.”
Cox says his time in government accelerated his progress as a leader. “During those times, you can’t pretend to be a leader, you have to prove it,” he noted. He brought back much of what he learned in taking on the CIO role at his old employer. Cox encouraged open dialogue across the team to understand how the company could improve. That led to a group called Action Speak, which increased Cox Enterprise’s focus on diversity and inclusion. “Now we have paid time off for people to vote,” Cox said by way of example. “Regardless of what your political views may be, you will be supported to vote. We’re being more intentional in terms of making sure that we look across all levels in how people of color are represented across not just our front lines, but (also) middle management and the executive ranks.”
Cox has also focused his team’s attention on reducing the complexity of the company’s diverse set of businesses. “We have worked on making sure we take a step back and build a strategy that is holistic,” he said. “In the past, we just had this tendency to work in silos.”. An early way in which he accomplished this was by conducting numerous interviews and surveys to understand how customers viewed technology. By doing more together, Cox reasoned, the customer’s experience would improve.
This approach extended to the technology that the customer might not immediately notice. For example, Cox focused on creating a comprehensive cloud strategy and incorporating better data and analytics capabilities. These priorities have improved reliability and resiliency and helped Cox identify new ways to improve customer experience.
These priorities were part of a three- to five-year plan that accelerated dramatically during the COVID-19 pandemic. For Cox, the pandemic was a chance to improve. “In these times of crisis, you can take a step back and regret what you didn’t do along the way, or you can look at it as an opportunity,” he said. “We have looked at this as an opportunity for sure.”
Communication is the essential element to pursue during these times of great change, Cox said. “What’s non-negotiable: you have to communicate. You have to be proactive, and you have to communicate relentlessly.” There are several formats that have worked best. With groups of 10 to 15 at a time, he met with every member of his team to communicate plans and listen, noting their concerns, hopes, and the like. Additionally, town hall meetings and more impromptu “ask leadership” sessions have added to the frequent opportunity for conversations and learning.
With each challenge and crisis he has faced, Cox has gained lessons and confidence for the next one. Though he hopes he won’t be tested again, Cox knows he and his team have what it takes to guide Cox Enterprises through turbulent times.
