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Digital Transformations: What It Takes to Overhaul Established Organizations

Fortune Brainstorm Tech 2018Fortune Brainstorm Tech 2018
038 Tuesday, July 17th, 2018 Fortune Brainstorm Tech 2:15 PM AFTERNOON ROUNDTABLES THE TRIUMPHS AND TRIBULATIONS OF TECH TRANSFORMATION Overhaul the way an entire organization operates? Easier said than done. Leaders including top chief information, technology, and digital officers share tales from the trenches—from skills gaps to process problems to operational overhauls—and discuss what they wish they had known about embracing new technologies. Speakers: Marc Leibowitz, Johnson & Johnson Jeremy King, CTO, Walmart Labs Christine Landry, Group Chief Executive, Consumer and Industrials, Conduent Cathy Polinsky, CTO, Stitch Fix Lt. General Nadja Y. West, Surgeon General, U.S. Army Moderator: Ellen McGirt, Senior Editor, Fortune Photograph by Fortune Brainstorm TechStuart Isett Stuart Isett

Change is hard, especially if it involves the digital overhaul of a sprawling organization. That was a point on which five digital transformation experts from diverse backgrounds—including health care, retail and the U.S military—all agreed during a Fortune Brainstorm Tech panel led by senior editor Ellen McGirt in Aspen, Colo. on Tuesday.

Asked to describe, in a word, what it takes to pull off a successful digital transformation, each expert cited a different attribute: transparency, empathy, open-mindedness, leadership and adaptability. But all concurred the task was daunting.

Jeremy King, chief technology officer at Walmart Labs, said he chose “adaptability” because, in his experience, the survival rate for senior leaders in big companies committed to digital transformation is “shockingly low,” often lower than 30%.

According to Marc Leibowitz, patience also is another key virtue. Leibowitz, who joined Johnson & Johnson as global head of digital after stints at Google and DropBox, recalled that he began with a Silicon Valley-style transformation plan that called for measurable performance deliverables within six months. His boss, J&J’s worldwide chairman Sandra Peterson, counseled him to “think of this as a 5 to 7 year journey,” said Leibowtiz.

“I have been surprised at how challenging it is to take a very large company and get it to think about the needs of the end-user,” he added.

Lt. General Nadja West, surgeon general of the U.S. Army, described the challenges she faced creating a single, digital system that could document the health needs of millions of U.S. military personal. The solution, which needed to span service branches and work in 180 different countries, had to be secure, interoperable and “longitudinal,” meaning that it followed beneficiaries from moment they joined the military through deployment, treatment and beyond.

Transforming the military’s digital system meant changing the work flow, and even shaking up its culture. And for West, a key part of the solution was getting doctors to think of themselves as leaders and change agents, not just physicians.

At Walmart, transformation required a corporate reorganization. For years, the retail giant had separate digital teams for stores and e-commerce, a distinction that meant nothing to customers and became increasingly unwieldy as Walmart decided to make e-commerce a priority. The solution was a reshuffle that created one team to focus on internal IT systems, and another, led by King, to focus on the customer on the retail side.

King stressed the importance of getting everyone to use the same technology tools. “All of our stuff needs to be on GitHub and Slack,” he said. “Click of a button—here’s what these ten guys are working on… It made a huge difference for the culture of company.”

Cathy Polinsky, chief technology officer at online fashion retailer Stitch Fix, urged hiring for diversity from the beginning. Stitch Fix has doubled the size of its digital team in just one year. “When you are scaling that fast you need to start on diversity at an early stage.”