Digital transformation: 4 questions CIOs should ask now

During the pandemic, companies made giant leaps on digital transformation. Consider these people-minded lessons from CIOs
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One of the things CIOs have learned during the past eighteen months is that when you have the business behind you, the momentum for transformation is turbocharged. Top CIOs are capitalizing on this lesson to further integrate technology strategy with business strategy. And the first place they’re starting is with the people.

How well are you doing on the people front of digital transformation? Here are four questions to ask yourself, based on my recent conversations with the CIOs of CarMax, Dow, and Johnson & Johnson.

1. Did you break down organizational walls during the pandemic?

“We’ve been using digital to break down organizational walls for the past four years when we first embarked on our digital transformation. Because our view is that we are not just implementing technologies, but changing the way the company works. Technology simply enables these changes,” noted Melanie Kalmar, Dow’s chief digital and information officer. She also says that all 36,000 employees at the chemical material science company are part of her digital organization because digital reaches every corner of the business. “We have to harness the minds and hearts of the whole organization to make this work.”

To do this, Dow has taken a “team of teams” approach to accelerating digital, ensuring the right people are at the strategy and design table. This includes embedding IT leaders into business teams to understand their needs and bringing multi-functional teams together to develop, pilot, and scale solutions known to deliver the most value and designed to transform the employee and customer experience.

“It also requires two-way communication,” adds Kalmar. “We listen to employees and customers so we understand what matters to them, and then make sure we articulate the value of our digital investments back to them. Otherwise, we will lose the opportunity to bring them along on our journey.”

[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]

Jim Swanson, EVP and enterprise chief information officer at Johnson & Johnson, talks about technology’s role in shaping the company’s mission and strategy in similar terms: “It’s not just a J&J IT function. It’s the whole enterprise, which is why we’re building the digital acumen of all 135,000 employees so they can take their domain knowledge, coupled with an understanding of technology, and transform human health.”

J&J has taken steps to build digital acumen and other “future-ready skills” beyond just the technology organization to increase the comfort level with them. For example, the company’s leadership determined that data science and intelligent automation were key capabilities for the future and has created enterprise councils focused on these areas to promote greater awareness. The councils have engaged the broader organization through annual events showcasing J&J’s use of these capabilities as well as Hackathons and training on the fundamentals of each.

Shamim Mohammad

Shamim Mohammad, executive vice president and chief information and technology officer of CarMax, says it’s part of a necessary mindset shift that has to take place across the organization: “Over the last five-plus years, we’ve built tremendous capability so that today, we operate and think and behave like a technology organization.”

Shifting from a project to a product organization has been key to the evolution of CarMax’s technology organization. “We get most of the work done through these product teams,” Mohammad says. “And these product teams are like a small startup company within a big company. These folks are seven to nine people. They’re highly empowered and they have this mindset of destination and experimentation. And by doing that, we’re able to increase the pace of innovation.” 

It’s an example of how a Fortune 100 company can behave more like a scrappy startup and think in new ways. In essence, they’re disrupting themselves rather than waiting around to get disrupted by an upstart competitor or external market forces.

And while product teams are the driver of transformation, customer-centricity is the GPS. CarMax has instilled a sense of customer obsession that is both externally and internally focused, which is how the IT organization is able to ensure what they’re doing with technology isn’t just innovation for innovation’s sake, but also applicable and valuable for their users.

With that customer-centric approach, Mohammad says, “we’re able to deliver the technology-enabled experiences that are more relevant to what customers actually want – and what our associates want. As a company that focuses so much on being a people-first company, we want to make sure that the technology that’s used by our associates also provides a good experience for them, because when they have a great experience, they can provide a great experience for our customers.”

2. When was the last time you rethought training?

“We are currently undergoing a training refresh, and consider it foundational to our digital acceleration,” notes Kalmar. Dow has a program called Modernizing Our Workforce that’s designed to develop future-ready competencies and skills across the organization. “We’re addressing it role by role, or what some people like to call persona by persona, across the company. But we’re also addressing it holistically to make sure that we don’t leave anyone out. We also have a very strong network of employee resource groups, or ERGs, that we’re engaging in that transformation,” says Kalmar.

By taking a holistic look at training, Dow is also assessing all training currently available across the company to make sure employee curricula and requirements are keeping in step with current needs. “At the same time we are creating new programs, we are removing historical training that is no longer necessary or relevant to where we are or where we are going,” Kalmar explains. “And this is something we will do continually to keep pace with our evolving workforce.”

3. Does your organization understand and rally around the desired business outcome?

It doesn’t matter how much digital acumen you have if you don’t understand the business outcomes.

You need to be part of the dialogue to integrate technology strategy with business strategy, all working towards the same outcome. Accelerating outcomes is the most important goal. “We’re here for outcomes. If we don’t understand the outcomes and make them the highest priority, the tech doesn’t matter, the acumen doesn’t matter,” says Swanson.

[ Also read: Digital transformation: 4 common beliefs to reconsider. ]

What does that look like? At J&J, Swanson explains, “[the IT organization supports our] R&D colleagues who are driving data science with us and use data to actually reimagine some of the capabilities like clinical trial processes, commercialization or following the patient for adherence.” You have to think about how to bring digital to corporate functions like finance, HR, procurement, etc. in innovative ways – to actually add value beyond just operational capabilities.

“By bringing all those together, you can actually reimagine what your company can be and how it can perform,” Swanson adds.

4. Is your C-suite modeling change management and cross-functional work?

The heart of transformation is really the culture, and that requires commitment from the entire leadership team. In 2016, CarMax began a significant transformation effort.

“We wanted to make sure that our organization – not just technology, our entire organization – was ready for this change. And that required a significant commitment not only from me, but also from the CEO. The two other partners I worked closely with were the chief marketing officer and the chief operations officer. So between the leadership team support, we were able to demonstrate and articulate to the whole company that this is a change for the entire company, not just a technology initiative,” says Mohammad.

“We put cross-functional teams together to show that we’re serious about this change and we do have to transform ourselves to this digital way of working,” he says. "It is difficult to change the fabric and core operating system of an organization, so the leadership team needs to be there all the way. It is a journey that never ends, so the support cannot subside. The support has to be there all the time.

“My number-one responsibility as a technology leader is positioning the company for rapid change,” Mohammad adds.

[ These and other CXOs are being featured on the CIO Whisperers Podcast. Tune in to learn more about the digital transformation journeys that today's CIOs are driving: The CIO Whisperers on Apple Podcasts. ]

Dan Roberts
Dan Roberts is CEO of Ouellette & Associates Consulting. In this role, Dan leads the firm that has been known since 1984 for “Developing the Human Side of Technology.” His team has helped more than 3,500 IT organizations build a world class culture, a high-performing workforce and a differentiated talent brand.