WEBVTT NOTE This file was generated by Descript 00:00:00.000 --> 00:00:04.059 Mickey McManus: Thanks for joining we wanna talk today about why is it so 00:00:04.059 --> 00:00:09.314 hard to get velocity in transformations and, what does it mean from a leadership 00:00:09.314 --> 00:00:12.824 standpoint to do this and what is a transformation and what does it really 00:00:12.824 --> 00:00:16.344 mean, internally for the company and how it can make a difference. 00:00:17.604 --> 00:00:18.444 Who do we have today? 00:00:18.444 --> 00:00:20.904 Sigal, could you, could you introduce yourself and Brad, 00:00:21.024 --> 00:00:22.534 then you introduce yourself. 00:00:24.414 --> 00:00:30.474 Sigal Zarmi: Hi, uh, Sigal Zarmi I'm a senior advisor for almost 18 months 00:00:30.474 --> 00:00:38.694 now to BCG and before that I have 35 years of technology and operations 00:00:38.694 --> 00:00:41.064 experience, mainly in financial services. 00:00:41.454 --> 00:00:46.334 My last role I was head of transformation and international CIO for Morgan Stanley. 00:00:47.504 --> 00:00:50.470 Mickey McManus: So Sigal, just on that little note, I mean, you were in, you 00:00:50.470 --> 00:00:53.049 were inducted into the CIO Hall of Fame. 00:00:53.709 --> 00:00:55.869 How did that all happen, just outta curiosity? 00:00:55.869 --> 00:00:58.810 Sigal Zarmi: I've, I've been a CIO for a very long time. 00:00:59.660 --> 00:01:03.709 Was a CIO of a few of the GE capital divisions. 00:01:04.079 --> 00:01:11.280 Then I was CIO for PWC both Global CIO and US CIO, and then, like I 00:01:11.280 --> 00:01:13.590 said, CIO, with Morgan Stanley. 00:01:13.590 --> 00:01:18.250 So I've had, a long time in senior leadership positions. 00:01:18.850 --> 00:01:24.370 Running huge organizations, large budgets, global programs, 00:01:24.370 --> 00:01:25.990 people all over the world. 00:01:26.530 --> 00:01:32.270 So I think part of the criteria was really somebody who had, not 00:01:32.270 --> 00:01:37.550 just the title, but also the, span scope and how broad the role is. 00:01:38.350 --> 00:01:38.590 Mickey McManus: Okay. 00:01:38.590 --> 00:01:39.850 Brad, who are you? 00:01:40.915 --> 00:01:41.335 Bradley Strock: All right. 00:01:41.335 --> 00:01:43.665 Well, hey, Brad Strock , really happy to be here today. 00:01:43.715 --> 00:01:50.345 So I also have, spent 35 some years in, technology as well 00:01:50.345 --> 00:01:52.295 as, more financial oriented roles. 00:01:52.315 --> 00:01:56.330 So I, I'm, a little bit of a mix of, I guess, a CIO and a CFO. 00:01:56.700 --> 00:02:00.330 It's a little bit, uh, unusual, but has, I guess, served me well over the years. 00:02:00.330 --> 00:02:03.870 So my last full-time role was global CIO at PayPal. 00:02:05.085 --> 00:02:09.925 I was at PayPal from 2011 to 2019, and then prior to that, bank of 00:02:09.925 --> 00:02:13.645 America at JP Morgan Chase and, and a few other companies prior to that. 00:02:14.385 --> 00:02:16.905 Mickey McManus: Tell us from your perspective what it really takes to 00:02:16.905 --> 00:02:19.275 get to velocity when you're going through these transformations. 00:02:19.275 --> 00:02:23.255 Bradley Strock: We tend to focus on one part of the whole puzzle. 00:02:23.255 --> 00:02:27.570 To really be successful and really drive a business outcome. 00:02:28.005 --> 00:02:34.064 Such as velocity of change, you really need to address all the pieces and, I've 00:02:34.064 --> 00:02:39.464 seen it at times, companies not do that and so they may, maybe they do an agile 00:02:39.469 --> 00:02:43.334 transformation and they get some value out of that, but they don't necessarily 00:02:43.334 --> 00:02:49.249 see the step function increase in speed of change that they expected, and so 00:02:49.249 --> 00:02:50.869 then they move on to another piece. 00:02:50.869 --> 00:02:55.289 And so you, you really need to have all the components from, what I like 00:02:55.289 --> 00:03:00.239 to call, moving from projects and programs as your paradigm for change to 00:03:00.239 --> 00:03:03.689 one of defined products and platforms. 00:03:04.109 --> 00:03:05.579 You need to have that piece. 00:03:05.579 --> 00:03:08.909 You need, you obviously need to have an agile paradigm for how you 00:03:08.909 --> 00:03:12.359 do development and then all the way through your development process. 00:03:13.179 --> 00:03:18.289 And the operational, changes that, you need to make to be able to introduce 00:03:18.529 --> 00:03:23.989 rapid change and then that sets you up to successfully be able to move to the cloud. 00:03:24.439 --> 00:03:28.079 Sigal Zarmi: I, I, I think if you really wanna get velocity, we need 00:03:28.079 --> 00:03:30.269 to break it into smaller pieces. 00:03:30.629 --> 00:03:36.359 And the easiest thing to break something into smaller pieces, although complicated, 00:03:36.479 --> 00:03:39.509 is to set up your front to back, right? 00:03:39.509 --> 00:03:46.349 When you think about a P&L, when you think about, the processes that starts from 00:03:46.349 --> 00:03:51.354 the customer all the way to the books and records, And say, okay, what are all 00:03:51.354 --> 00:03:56.604 the steps that, in the customer journey, all the way to the journal entry, right? 00:03:56.604 --> 00:04:00.144 That's, that's I think Brad, that's what you're talking about when you call a 00:04:00.144 --> 00:04:05.034 platform, when you, when you set it all up and you, and you have one person that 00:04:05.034 --> 00:04:11.184 is responsible for the velocity of that, the process, the customer experience, 00:04:11.184 --> 00:04:13.884 the technology, the operations. 00:04:15.264 --> 00:04:20.484 And you get all the people involved at the table and make decisions, 00:04:20.484 --> 00:04:21.744 they'll make it much faster. 00:04:22.374 --> 00:04:27.054 The way a lot of organizations are organized today, it's in silos. 00:04:27.564 --> 00:04:32.155 You have the front office for each line of business in one place, the 00:04:32.155 --> 00:04:34.434 back office in a different place. 00:04:34.794 --> 00:04:39.594 Many times they're handing things over the wall and things breaks. 00:04:41.259 --> 00:04:43.799 Mickey McManus: I'd love to dig in deeper on, this comment, Brad, you 00:04:43.799 --> 00:04:47.459 made about the move from, projects and programs to products and platforms. 00:04:47.459 --> 00:04:48.209 What do you mean by that? 00:04:48.269 --> 00:04:50.654 Bradley Strock: Let me give the example that we experienced at PayPal, when 00:04:50.654 --> 00:04:54.404 I got there in 2011, our development processes really looked like a banks. 00:04:54.404 --> 00:04:57.404 It was very familiar to me coming from Bank of America, other 00:04:57.404 --> 00:04:58.634 than we didn't have mainframes. 00:04:58.934 --> 00:05:05.059 And so, the transformation journey over the years, started with moving to Agile. 00:05:05.699 --> 00:05:11.139 We got a, we got benefit out of that, but we didn't really unlock the 00:05:11.139 --> 00:05:16.269 kind of step function, increase in, in velocity that, that we would expect. 00:05:16.269 --> 00:05:19.869 And so that really led us then to start focusing on this idea of how 00:05:19.869 --> 00:05:23.749 we define our products and how we define our platforms and for us that, 00:05:23.749 --> 00:05:28.854 was our products are customer facing so either merchants or consumers. 00:05:28.854 --> 00:05:30.324 It's a two-sided payment network. 00:05:30.774 --> 00:05:34.584 And then importantly on the platform side, we have our technical definition 00:05:34.584 --> 00:05:38.514 of a platform of microservices, you know, strung together and orchestrated. 00:05:38.934 --> 00:05:42.884 But importantly we said if you're on a platform team who historically I'd say 00:05:43.124 --> 00:05:47.819 tend to get kind of feel like second class citizens a little bit, the methodology 00:05:47.819 --> 00:05:51.059 you're gonna use as a platform team is exactly the same as the product teams. 00:05:51.059 --> 00:05:53.219 You're gonna deeply understand your customer needs. 00:05:53.219 --> 00:05:57.684 You're gonna, you're gonna develop roadmaps, the litmus test for success 00:05:57.684 --> 00:05:59.274 is the next new product we build? 00:05:59.484 --> 00:06:03.974 We shouldn't be behind in changing the platform, which means, that, 00:06:04.274 --> 00:06:08.449 you had to really focus on flexible APIs, and importantly, you had to 00:06:08.449 --> 00:06:11.809 recognize who is my customer on a, if I'm on a platform team, my customer 00:06:11.809 --> 00:06:12.949 is actually that product team. 00:06:13.489 --> 00:06:17.959 And so deeply embedding yourself in that product team and understanding the roadmap 00:06:17.959 --> 00:06:22.879 and where they're going so that our platforms are ready and, and that sounds 00:06:22.879 --> 00:06:28.539 really simple, but that expectation of how these platform teams need to be thinking, 00:06:28.899 --> 00:06:31.329 I would argue, is actually fairly unique. 00:06:31.839 --> 00:06:38.599 And if you get that right, it does allow you then to, to significantly increase 00:06:38.604 --> 00:06:42.129 the speed of new products and the speed of change, the velocity of change. 00:06:42.399 --> 00:06:45.099 And we saw that in a number of products that we launched. 00:06:45.429 --> 00:06:49.429 You also, to Sigal's point you need to also have. 00:06:49.479 --> 00:06:53.899 your, you know, your development processes set and your cloud processes 00:06:53.919 --> 00:06:55.599 set that you can take advantage of it. 00:06:55.599 --> 00:06:57.909 You need to have all those components. 00:06:58.569 --> 00:07:02.889 That was the paradigm change for us, and it led to organizational changes. 00:07:02.889 --> 00:07:07.269 It led to a lot more focus on design thinking and how our product 00:07:07.269 --> 00:07:08.859 team spent time with the customer. 00:07:08.909 --> 00:07:10.139 It's easy to talk about. 00:07:10.139 --> 00:07:14.399 I think it's difficult to do in practice because it involves changing so many, 00:07:14.699 --> 00:07:17.639 even how you do your financial accounting. 00:07:18.149 --> 00:07:22.799 You know, so many companies are still in a mode of we capitalize projects. 00:07:22.799 --> 00:07:28.679 Well, that becomes a barrier often to, to how you want to, how you really 00:07:28.679 --> 00:07:30.059 should be doing your product development. 00:07:30.429 --> 00:07:34.479 Don't underestimate the amount of change that it takes to be successful there. 00:07:35.049 --> 00:07:35.739 Sigal Zarmi: Well, Brad, how. 00:07:36.909 --> 00:07:38.499 How did you drive that change? 00:07:38.499 --> 00:07:39.759 What was the motivation? 00:07:39.759 --> 00:07:43.189 Was that, was that a crisis that you, everybody got 00:07:43.209 --> 00:07:45.249 galvanize around that change? 00:07:45.589 --> 00:07:48.189 Because what I found very difficult. 00:07:48.829 --> 00:07:53.929 Is to have everybody on the same page when you try to drive such a major change 00:07:54.139 --> 00:07:54.289 Bradley Strock: Yeah. 00:07:54.289 --> 00:07:57.679 Sigal Zarmi: From projects to product or platform. 00:07:57.679 --> 00:08:01.164 Bradley Strock: In our case, when we IPO'd our stock really didn't 00:08:01.164 --> 00:08:05.784 go anywhere and we were viewed by the street as not, you kind of 00:08:05.784 --> 00:08:07.374 passed our prime, not innovative. 00:08:07.794 --> 00:08:12.084 And so there was a push to say we need to make some strategic bets. 00:08:12.089 --> 00:08:13.044 That was part of it. 00:08:13.314 --> 00:08:18.324 But then also, you know, from the CEO on down a push to say, we must change how 00:08:18.324 --> 00:08:24.584 we think about customers and products and how we, how we go to market and that 00:08:25.174 --> 00:08:28.909 was an important forcing function for us to, to make those changes and then 00:08:29.239 --> 00:08:32.659 had to model those changes as a leader because there were things that each 00:08:32.659 --> 00:08:34.489 of us were doing that had to change. 00:08:34.489 --> 00:08:37.249 And so I had to make changes to how I showed up. 00:08:37.579 --> 00:08:41.749 And, maybe there was a team that needed to be somewhere else in the organization 00:08:41.749 --> 00:08:45.739 so I had to be willing to give things up as well as do things differently. 00:08:46.019 --> 00:08:48.929 You know, as a leader, people watch that kind of stuff. 00:08:48.934 --> 00:08:50.759 So there's definitely a modeling element. 00:08:51.149 --> 00:08:55.259 Uh, but it helps for sure to have some forcing function, even if you have 00:08:55.264 --> 00:08:57.869 to create that crisis a little bit. 00:08:58.169 --> 00:09:01.244 Sigal Zarmi: Yeah, I was gonna ask if the incentive program changed. 00:09:01.334 --> 00:09:05.309 So Six Sigma is, is a big thing that happened at GE in the late 90's, early 00:09:05.309 --> 00:09:11.459 2000's and in order to make sure that everybody bought in, the incentive 00:09:11.464 --> 00:09:16.439 plan changed and you got rewarded if you were actively involved in the Six 00:09:16.444 --> 00:09:22.709 Sigma initiative, was there anything that changed in the incentive programs 00:09:22.709 --> 00:09:24.759 to make sure that leaders do buy in? 00:09:25.539 --> 00:09:28.289 And are acting and behaving the way you... 00:09:29.259 --> 00:09:34.179 Bradley Strock: I would say probably one of the biggest ones was to shift 00:09:34.179 --> 00:09:38.459 the focus from activity, measuring and rewarding activity, which I think 00:09:38.464 --> 00:09:43.019 is technologists we tend to gravitate towards all sorts of activity metrics 00:09:43.024 --> 00:09:48.359 and there's value in that but really shifting to focus on business outcomes. 00:09:48.869 --> 00:09:55.929 And so a product team, defining, their key success metrics and rewarding, 00:09:56.239 --> 00:09:59.414 those OKRs as business outcomes. 00:09:59.774 --> 00:10:03.704 Again, it sounds simple, but it's actually somewhat difficult to get 00:10:03.704 --> 00:10:07.364 people to start thinking in terms of what are the business outcomes that we're 00:10:07.364 --> 00:10:08.684 trying to achieve with this product? 00:10:08.684 --> 00:10:09.419 How are we gonna measure them? 00:10:10.184 --> 00:10:12.684 And then incorporating those into rewards that would be 00:10:13.204 --> 00:10:14.834 I'd say one of the big things 00:10:14.884 --> 00:10:18.484 so, the levers that I saw that were successful is not 00:10:18.484 --> 00:10:20.554 necessarily monetary levers. 00:10:20.944 --> 00:10:25.324 There were also around career track, opportunities. 00:10:25.444 --> 00:10:27.064 Who do you get promoted? 00:10:27.424 --> 00:10:33.244 So do you get, do you promote the people that exemplify what you want the 00:10:33.249 --> 00:10:38.314 organization to be, or do you promote the people that all they do is track 00:10:38.554 --> 00:10:42.449 activities and not really outcomes. 00:10:42.809 --> 00:10:46.079 So I think the, it's the measurement system is what you 00:10:46.079 --> 00:10:51.779 measure and the career path and the incentives that, that you show.