Keith Block is the co-CEO of Salesforce, but he’s got a name change in mind for his counterparts at other companies - CTO, as in Chief Transformation Officer.
Ruminating on the broad theme of digital transformation, perhaps the most commonly used (abused?) phrase at tech industry gatherings in 2019, Block observes that it’s a term open to multiple interpretations depending on who you’re talking to. That being the case, and in order to have a common foundation from which a conversation might evolve, he offers up his own version of what is entailed beyond the marketing buzzword.
It’s a three pronged description, beginning with technology transformation, the aspect of digital transformation that perhaps captures most of the popular mindset. Block argues:
We live in this world of the Fourth Industrial Revolution, where we're seeing kind of a perfect storm with all these technologies coming together, whether it's cloud, mobile, social, Artificial Intelligence, Machine Learning, 3D printing, blockchain etc. Companies are trying to understand, organizations are trying to understand exactly how do you absorb that technology? I think at its elementary level, it’s essentially a refresh of workloads.Think about a lot of movement from the private cloud to the public cloud, like Google Cloud or AWS or Microsoft Azure. That is a technology shift.
Next up is a business model transformation, says Block:
No industry is immune from these transformations. It could be the government, it could be financial services, it could be healthcare, it could be manufacturing - they're all facing the situation where they have to evaluate, take a step back and understand what that business transformation, that business model change, will be, because it is a world of disrupt or be disrupted. You really have no choice and that is why the CEOs in all these companies have to become the Chief Transformation Officer.
In fact, when I meet with CEOs, this is the first piece of advice that I give them - that you have to become the Chief Transformation Officer, you have to lead from the top and embrace the three legs of transformation. So, this business model transformation is very, very real.
Finally the third transformation is a cultural one. Block lists a series of questions that need to be asked:
How do you absorb technology from a cultural perspective into your organization? What will be the impact on your workforce? What will this mean for re-skilling?What does this mean for the ethical use of technology? What does it mean for the impact on the community that you live in, or that your workers live? All of these things strategically have to be considered.
To illustrate his thesis in practice, Block cites US insurance giant State Farm, one of the most prominent ‘Trailblazers’ at Dreamforce this week. (Check out Phil Wainewright’s article here for more on that.) For his part, Block recounts a conversation that he had with State Farm CEO Michael Tipsord:
This is a company that has been around for 75 years or more and they have grown organizationally as all corporations do, as all organizations do over time, with silos - cultural silos, business process silos, technology silos data silos. In this day and age of the Fourth Industrial Revolution, State Farm, like any company in insurance or healthcare, had to embrace change. A piece of that was the elementary change of moving to the public cloud. They were going through a transition and a transformation, of taking their workloads from legacy, old technology and moving them to the public cloud to embrace all the benefits of that sort of transition of workload.
The 21st century dependency on mobile technology also comes into play:
Everybody today is running around with their mobile device...we live there, this is our own computer. They understand that when they are meeting with their customers or engaging with their customers, they have to provide a modern experience that is very consistent with the experience that any of us would have on a mobile device. And to do that, they have to have relevant information on a timely basis, that is consistent, that gives a total view a complete view of their customers so that their agents who act on their behalf have a productivity tool to engage with those customers.
Now if you think about the old State Farm, they would have to gather information that may be inconsistent. Your name, Stuart, could be spelled 12 times, they don't know how to pronounce Lauchlan. They could have you in multiple locations. The data could be very inconsistent. It could reside in multiple systems. To assemble that information and cleanse that information so that you can have a clean view of the customer was very, very difficult. That's what we're helping them do - we're providing them with a desktop experience for their agents, who can become more productive and who can engage consistently and productively with the end consumer who will be buying insurance. So not only are they giving the end customer a great experience, but their agents are having a great experience, which builds loyalty with their agents. We're providing them with our 360 degree view. We're also using Einstein with the Artificial Intelligence to suggest new products and experiences for the end consumer. So, that is the power of the business model transformation, and a different way of doing business for stage one.
And then the last part is the cultural piece, which is understanding that as you modernize your organizations and you think about your companies, you have to realize that technology will have an impact on the workforce, and that's important because this is your community, your employees....that's why we partnered with State Farm to be skilled their workers, because we want to make sure that they have modern skills.
Return of the 'big ticket' SIs?
All of this makes perfect sense in theory, but in some quarters it may sound like somewhat of a daunting ‘to do’ list and maybe even suspiciously like the kind of ‘big ticket’ project that the pantheon of systems integrators got so rich on in previous decades. Block demurs on this:
Nothing is ever as simple as it seems. These are complex organizations that have grown up, over, over the years that are steeped in legacy technology, legacy business processes, legacy culture. And it's a different world now. It is far more complicated than it's ever been. Companies have to be more responsive, they have to be more connected with our customers. That requires an ecosystem.
According to IDC, there will be 4.2 million jobs created by 2025 in the Salesforce economy. That ecosystem is very necessary and that means that the Accentures and the Capgeminis and the PWCs of the world will have to play a part, a meaningful part. I was recently asked to address a conference of our partners. I talked about the importance of digital transformation and the three legs of the triangle and I really tried to focus a lot on the cultural piece.
We have an obligation as technology companies to not just do the tech refresh, to not just do the business model, but to work with companies, like we're doing with State Farm, and to say, 'OK, there's a third piece of this and we understand that this is going to impact your organization, what can we do to help?’. And I think that's important and I think that would benefit the Accentures of the world. I know Julie Sweet, [Accenture’s] new CEO is lined up behind that.
At the end of the day, this is a very consistent conversation that we're having with other executives about the three legs of digital transformation. That is not just the technology refresh, that's not just the business model refresh, but there's an obligation culturally around the community to take care of people who are working for your company and all your stakeholders.
In part 2 of this conversation with Keith Block, attention shifts to privacy, ethics and conference keynote protestors….