Hi everyone. Today, we're really excited to have with us a colleague of mine, Graham Waller. Graham is a research vice president in the digital business leadership research team. He is a leading authority on the role of CIOs, CEOs and digital business leaders with an emphasis on contemporary leadership and realizing business advantage from technology. Graham is a co-author of two books. The first is Digital to the Core: Remastering Leadership for your industry, your enterprise, and yourself. The CIO Edge: seven leadership skills you need to drive results. So, we're very excited to have Graham with us. Welcome Graham. It's great to be with you Doug. Great to meet everyone on the call as well. Thanks. I guess let's start with telling us a little bit about yourself, your career and how you ended up at Gartner and a little bit about the kind of research that you're doing and we'll get into some of the advice that you give your clients a bit later. Yes, thanks Doug. Well, as I look back at my career, it's been quite bearing, and I think that's a good thing. I think about it a little bit like a Venn diagram. One half of the Venn diagram is technology and the other half is business results, so driving value, and in the center is leadership. I feel like isolated on both sides of that Venn diagram. I started in high-tech sales roles, and although I realized that sales wasn't the thing for me, that has been a valuable skill that I love and I use every day. No doubt. I would totally agree. Yeah. Yeah. I worked for a while in a startup tech company at Teradata, it was called at the time in big data before we called it that. That big data warehousing very early in the development and I really got into the, what was the value, how do we drive value from those systems. Went on to there to more of a general leadership role both within technology and business roles within a large retailer, the driving e-commerce and customer information analytics, those sorts of things. That led me to Gartner, they came from my company I was working with at that time it was called Metal Group, which is a company that Gartner acquired. I was working with them as one of my key partners and I was ready for a move and join them and I've been at Gartner now for nearly 15 years. Oh, great. So you refocused on digital business. So it's one of those words that sounds like we know what it means but, I think you just start to peel it back. There's some specific aspects to it. So what does digital business and why has it become so important and does it take different forms, and what do those different forms look like? Yeah, absolutely Doug. Actually the names digital, digital business, etc cause a lot of confusion when we talk to our clients. So at Gartner some years ago, we took a position to try and define digital business. At its simplest form, we think about it like the fusion between the analog world, traditional warehouses, people, building etc and the new digital world. How do you combine those things in a creative ways to drive new customer experiences, new value, new economics of our underlying business and even new business models themselves? That's important, that distinction. So often, our clients will think about digital as something separate. Let's let the CIO or another leader look after it. When the value is when it's an integrated component. Now, the second part you asked about was why is it so important? Well, we believe we're at a time in the evolution of digital business when it's absolutely going to the core of how an enterprise creates value. In the early days, you could think about it like a channel as example of social media, or e-commerce as a channeling retail. Well, I don't want to diminish how important that has been. Today, it's going right to the very product or service whether I'm a bank a retailer, a manufacturing company, a government agency. It's disrupting just about every industry. Once again, about five years ago, we came up with a research position that every industry will be digitally remastered. Initially, certain leaders in many industries couldn't see it. They pulled back and they said, "Okay, we can see it in music or retail but not our industry." But as the years have gone by, now we are really seeing it in every industry. Obviously, most dramatically in an industry like retail where Amazon is decimating in many ways, many traditional retail sectors such as department stores etc. If you think about that it's not that Amazon has the best website. Although they do have a good website, they're also investing billions of dollars in physical distribution. Right? So that bringing back together with the digital capabilities to offer new levels of customer convenience. Same basic idea is happening in taxes with Uber. So when you talk about remastering and using someone like Amazon as an example that can be quite intimidating to a company and disruptive to its culture. How did they deal with that? Yeah, absolutely Doug. It's interesting you mentioned culture. When we do our surveys and at Gartner we do many surveys of CIOs, CEOs, CFOs all sorts of leaders. The number one barrier to sucess in digital businesses is always some form of the human aspect. We like to say sometimes the secret of digit is analog and by that we mean people. So culture, leadership, having access to the right talent is always number one. You say we can't get out of our own way? Well, I think sometimes I really focus a lot on the notion of mindsets. So often, the way that we have trained people in the past, all the way from the NBA like the people here through to how many people have been promoted have been measured, etc, has been on an industrial era. That all management disciplines I'm thinking, very linear, very control, command and control orientated. Very much of the incremental improvement orientated as opposed to transforming. So that doesn't set up many organizations or it creates this barrier, why organizations find it hard to reinvent themselves, so these new ways of working. Other than the common examples, we all know about Amazon, and so forth, are there other favorite examples of yours of companies that have remastered themselves in a way to become more digitalized or offer digital services and products? Yeah. Maybe a couple I can say, Doug. Deliberately picking one that's business to consumer, among the small business-to-business [inaudible]. In the book Digital to the Core that you mentioned there, we started it with a company called Babelo, which is originally, they made violins back in the 1800s, and they emitted their business to tennis. The reason it's such an interesting story, as they were one of the first companies to bring out the connected racket. Within the handle of the tennis racket, there's a gyroscope, the accelerometer, the Bluetooth connection, etc. We can stream the data from that racket and produce useful analytics that can change the business model. Right. So it's not a digital racket per se. It's what you talked about the intersection of digital and traditional products in a traditional racket. That's pretty cool. Yeah. Yeah, and exactly, Doug. As I said, this is an example of the product itself, the tennis racket going digital. One of the advice points we have to organizations is don't do radio on TV. By that, we mean the temptation, once again, we see this in our survey. These organizations will tend to automate the way that they currently done business. Right. Whilst there's a place for that, if that's all we do, we typically don't get the benefits, the breakthrough opportunities that digital creates. So in Babelo's case, one simple example of the power of these new digital business models is, in many cases before they had the connected racket, they didn't know who their customer was. So think about buying a racket in a regular store. The manufacturer doesn't know the customer. But by engaging the customer, you download the app, you can see that they're on your game. How close to the sweet spot am I hitting the ball? Where am I losing power in my serve? Maybe I'm a high school player trying to make the varsity team or a professional. If my phone beats my first service percentage drops, I can start seeing what I'm doing differently. Not only now knows who their customers are, they know how often they're playing at their rate of improvement, are they hobbyist just playing for fun or are they trying to play competitively. They can change the whole way that they interact and connect to that player. That's an example, Doug, from the business to consumer side. So I contrast that with one from business to business? Please. Yeah, great. So this is one of my favorite ones because it's a company that started off as about as undigital as you can. The company is called NCC. They're actually based in Sweden, in Europe. Their core business is around heavy construction materials. Think about ash boulders in the roads, cement that you may be using to build a highway or a factory or a school. As they looked at that business strategy, they were finding it hard to find the revenue growth, the profit growth. So a very innovative leader, Anders Torell, who was CIO at the time, came up with this notion of what is the platform business opportunity in our industry. Now, the Airbnb, if you will or the Uber of our industry. They created something called Loop Rocks. So the idea here is imagine a building being torn down in one part of town, all of that waste material, that rubble has to go somewhere, and if it goes to a landfill, has to be transported and paid, or it can go possibly to another construction site where they can use it in the foundation, and hence, you have a market. What NCC look to do was to create a platform that could match people with waste material, with people that had landfills, people that had transportation companies, people that could use it on a platform. They've gone ahead and done that. The business is called Loop Rocks. You can Google it and look it up. It's a fabulous example of a very, very analog company taking advantage of a digital business platform, business model opportunity. By platform, you mean a way to connect buyers and sellers and users and everybody within the ecosystem, right? Absolutely. That brings me back to one of the central points I started on all the way back to my fascination in my career, which is the key question for NCC in that world or anyone else looking at these digital business opportunities in a commercial sector at least is how do we make money. So absolutely. That is that platform opportunity. But NCC took advantage of some leading digital practices, if you will, which is how do I create a minimal viable product. In that case, they did it in one city in Sweden. We build enough of that platform business to begin to understand how we create liquidity in the market, how we can make money through different technique to monetize such a platform. They did that. They tried several options, and then ultimately, honed in on one that they thought was a sustainable business model, and since then they've been expanding. So it sounds like data and analytics play a big part in any digital offering. How do organizations get started, and what role does data analytics typically play throughout that process, and the offering itself? Yeah. It's a great question, Doug. As we look as analysts across all industries and government as well, because these things can equally apply in governments, one of the common patterns is that data is at the epicenter of just about every one of these business models. Indeed, in the research we did for the book, Digital to the Core, one of the big macro trends that we identified was something we called resolution revolution. If you think about that, what that means really is that as time goes by, we can see the world in more and more granular levels of detail. We just think about my tennis example earlier. Not even knowing who my customer was and knowing them by name, but also knowing in great detail, if their service is getting better, how many times they're heading lower, how close is that racket soon needing replacements, etc. So data is at the epicenter of just about every one of these business models. Whether it's retailer or sports or Uber or that business-to-business platform we described. The key thing that we find with data is if we're not careful, it can be overwhelming. It can be overwhelming to traditional uses, to traditional ways of thinking. So the key, I believe, and I'll be interested in how this compares with what you're seeing, Doug, is how do we turn data to action, and how do we then monetize it, or if we're in government or non for profit, how do we turn data into our mission fulfillment. That's exactly what my research has been focused on. There are a lot of people probably involved in this. You talk to executives a lot of time, and certainly they'll set the tone and tenor for these initiatives and maybe even mandate them, but there are other people involved. Who are some of the key players involved in creating a digital offering or a digital platform? Yeah. It's a great question, Doug. I think about that a little bit in terms of maturity or a journey as organizations get better and better at these digital business concepts. Very often in the early days, it's individual pockets of activity. Certainly, the Chief Information Officer, sometimes a digital officer or another line of business leader will be the catalyst. Then they will have a vision or that particular part of a business maybe is under pressure due to these market shifts. So very often, it starts with small pockets of activity, sometimes we call it digital dabbling, and it's a useful and good place to start. That's a way to get learning and build some momentum and confidence. It's just kind of an R&D function around your business itself, right? Yeah. Certainly, there's a very important R&D component to it, Doug. But say for some of the new capabilities that are coming out, whether that be artificial intelligence or blockchain has a big data component, etc. So that's a piece. Very often, it's quaint. Opportunities may be to create a new digital service, or to build more productivity or efficiency into an existing process. So very much it starts there, but the key, and this links back to the point you mentioned earlier about culture dug, the key when we really need to do this seriously, i.e scale the digital business opportunity to monetize it, which is where most organizations struggle. If it moves from being small pockets of activity to more of a holistic enterprise capability. This digital business will blow our boundaries often and we need the whole organizations to come along. So one of the hardest, maybe milestones in this journey, is to turn it into a full enterprise level capability and for the most part that needs the CEO, to be bought in, to be sponsoring it and really orchestrating, along with other leaders, it has a team sport or an enterprise capability where everyone has to play. We need us see head of HR, should be helping us transform talent and culture as we discussed. We need our risk leaders, should be looking at the new risk implications of this and looking at them in a way that we can mitigate those risks and move forward, not just stop and hide behind the difficulties to do this because we're in a regulated industry, those things. It's about certainly taking those things very seriously but embracing new mindsets to move forward. That's really insightful Graham. Thanks. Are there any new roles or new organizational structures that you've seen to enable digital business? Yeah. Absolutely Doug, there's many. To cite one example. Many organizations that are getting more mature with digital products and services is a key role of a product owner. That product owner is often working in a multi-disciplinary team with agile ways of working. But the product owner is responsible for the core value proposition of that product area. That continual innovation and developing new features, new capabilities, new customer value. So product owner would be one. But certainly, an area you're very familiar with Doug, data science in all of the different components gets dramatically elevated in terms of the value of the discipline, treating it as a core competency. As artificial intelligence just to take one for an on-chip VAT, but a very, very critical [inaudible] for the future. All of the roles that surround that, including how do we get good data sets to train the artificial intelligence? How do we avoid bias in those data sets or in multiple outcomes? How do we factor in these very tough ethical and risk-type issues? All of these and many, many other roles on new and critical roles that have to be developed and nurtured and built, and of course the skill sets for those roles are very, very in demand and scarce at this point. Let's finish up with a couple of challenging questions. What does the future hold for digitalization? Obviously, you're in a taught leadership well. So what stage predictions you have for the future and the future of digital companies and maybe dare I ask what, is there room for companies that don't go digital in tomorrow's business world? Yeah. Great point. Well, a man's way, the simplest way I think about that is, the future of business is more and more digital. Every iteration, every turn of the crank. As that happens, the level of innovation, the speed of change, the potential for disruption becomes bigger and bigger and bigger. So a critical area for organizations is to, everyone can't be the Amazon or the Google of this world. But what everyone needs to do is to, be aware of those changes and those trends and say, how do I reinvent myself to still be relevant? To still add value in my organization. So you'll ask the question though is there a room for companies that Dante did so well I think that becomes a smaller and smaller segment. I mean it becomes, we're not moving and keeping pace with these market shares. We do run a very serious danger of ultimately falling prey being irrelevant from the consumer point of view and you only have to look at many of the industries like retail we've talked about there earlier, to look at the perils of not keeping up and not reinventing yourself to stay relevant. The predictions that you can share with us, the future of digital business? Well, I think the future Doug, will be more and more around the organizations that can master this new set of disciplines. So an example of these new sets of disciplines will be that rapidly innovation of new products and services. The ability to harness the power of data and turn it into useful powerful customer value and ultimately to monetize it. One way to think about what will define the winners or losers in this market, is around the pace of change. The winners, we believe, we'll be able to have the pace of change internally, at least match or anticipate [inaudible] the pace of change externally, and to do that that brings us full circle back to a point we had earlier which is around leadership talent culture. Those people type orientated competencies, which are the hardest one. In a world moving at breakneck speed, often the slowest thing to change just leaves the space between our two ears. That's what we're trying to solve through this class. Listen, I mean well, really appreciate your time and insights today. I imagine these are things that will be bouncing around in our heads. As we are progressing in our careers. We can say one day Graham told us so. Well, thank you Doug and best of luck to all of you that are listening in, it's a fabulously exciting time and the people with the skill sets are going to be tremendously valuable and in demand. So best of luck to you all. Thank you. Thank you again Graham. Cheers. Bye-bye.
