insigniam quarterly winter 2014 - transformational technology

VO L U M E 2 , I S S U E 4 | W i n t e r 2 015

TECHNOLOGY TRANSFORMING CORPORATE CULTURE

BRIDGING THE GAP Intel’s Cheng Gang Bian spurred a turnaround by tapping into the Generation Y workforce.

Q&A WITH ROBERT WISEMANThe former Angie’s List CTO addresses the future of technology transformations.

IS YOUR COMPANY POSITIONED FOR THE CUTTING EDGE?

™

EMBRACING TECHNOLOGY

Dell Services President Suresh Vaswani preaches

technology-led transformations.

We live in an era where we have the unique opportunity to transform the world

of business and the practice of management and leadership, unleashing the power of

inspired human performance while catalyzing breakthrough results and remarkable value.

— NATHAN ROSENBERG AND SHIDEH SEDGH BINA

FOUNDING PARTNERS, INSIGNIAM

LETTER

INSIGNIAM QUARTERLY 1

OTHE POWER OF TECHNOLOGY TO TRANSFORM Our mission at Insigniam is to transform the world of business and the

practice of management and leadership, unleashing the power of inspired human

performance while catalyzing breakthrough results and remarkable value. The methods

we utilize include breakthrough performance, cultural change, transformational

leadership, and innovation within organizations — one way to do this swiftly and

effectively can be by the adoption of well-conceived technology strategies. It’s also

true that the ability to leverage these emerging technologies can be vitally dependent

on how they are embraced by an organization’s culture.

With rapidly evolving technologies providing a new climate for potent organizational

change, this issue of Insigniam Quarterly focuses on methods to meet these challenges and

fundamentally alter the way business is done. The power of technology to transform

can be realized in a number of areas that directly impact key organizational goals.

• Change brought about through technology requires you to think and behave

differently, resulting in a big impact on a company’s manner of operating.

• Strong leadership is a prerequisite for a technology-driven transformation.

• Updates and changes in technology are essential for maintaining an

organization’s effectiveness.

• Disruptive leadership can give way to transformative technology initiatives, but

if not implemented properly, they can become disruptive in the wrong way.

• Relating back to the power of words and how people communicate, companies

often overestimate technologies while underestimating the network of

conversations and relationships in their enterprises.

In this issue, we share stories of success and innovative thinking, starting with our

cover story on Suresh Vaswani and his efforts as president of Dell Services to drive

technology-led transformations both for clients and within Dell. Hint: It’s all about

merging the leadership of business strategy and corporate technology. The former

CTO at growing online marketplace Angie’s List, Robert Wiseman provides industry-

leading insights on how businesses either evolve or die from technology strategies.

Articles on Health 2.0 and the rapid implementation of mobile health care

technology reveal opportunities for massive growth in that space. And on the subject

of transformative change, we discuss the role of leaders in shaping the conversation

around change so that employees can view it as a powerful opportunity.

While seizing this opportunity for transformation is frequently necessary to survive

and thrive, not every emerging technology will prove to be a game changer. The key

is continuing to look ahead — falling behind isn’t an option.

WINTER 2015

Shideh Sedgh Bina

Founding Partner, Insigniam

WINTER 20152 INSIGNIAM QUARTERLY

18MIT’S ENERGY INITIATIVE INTENDS TO CHANGE THE WORLDGeoff Williams

The efforts of the MITEI program and its wide array

of energy-related business partners are aimed at

transforming the earth’s energy systems.

32Q&A WITH ROBERT WISEMAN Scott Beckett, Insigniam

Entering a technology transformation? The former

CTO of Angie’s List talks about challenges,

strategies, and the effect it can have on your

company’s culture.

46THE HEALTH 2.0 REVOLUTION Chris Warren

Harnessing the power of web-based technologies

is the next step to engaging and improving health

care for both patients and practitioners.

54BUSINESS RESULTS DEPEND ON MANAGING THE NETWORK OF CONVERSATIONSKaterin Le Folcalvez, Christine Flouton, and

Shideh Sedgh Bina

How can you create a business environment and

a corporate culture primed for success? It’s time

to talk.

FEATURES

TECHNOLOGY TRANSFORMATION EQUALS CULTURAL CHANGEJoe Guinto

As president of Dell

Services, Suresh Vaswani

has seen the ability of

technology to drive a top-

to-bottom transformation

both internally and for

their customers.

COVER STORY38

TABLE OF CONTENTS

WINTER 2015 INSIGNIAM QUARTERLY 3

EDITOR-IN-CHIEF Shideh Sedgh Bina

[email protected]

EXECUTIVE EDITOR Nathan O. Rosenberg

[email protected]

CHIEF FINANCIAL OFFICER Ralph Gotto

DIRECTOR OF WORLDWIDE Karen Turner

CLIENT SERVICES [email protected]

DIRECTOR OF SPECIAL PROJECTS Alexes Fath

GENERAL MANAGER Jas Robertson

PRESIDENT Paul Buckley

EDITORIAL DIRECTOR Amy Robinson

[email protected]

MANAGING EDITOR Brian Keagy

CREATIVE DIRECTOR Kyle Phelps

[email protected]

ASSISTANT ART DIRECTOR Emily Slack

PRODUCTION MANAGER Pedro Armstrong

IMAGING SPECIALIST John Gay

ACCOUNT DIRECTOR Cory Davies

EDITORIAL QUERIES

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Insigniam Quarterly is published by D Custom, 750 Saint Paul Street, Ste. 2100, Dallas, Texas 75201. Copyright 2014 by Insigniam. All rights reserved. Letters to the editors may be sent to Insigniam Quarterly c/o D Custom, 750 Saint Paul Street, Ste. 2100, Dallas, Texas 75201. No part of this publication may be reproduced in any form or by any means without prior written permission of the publisher and Insigniam. Printed in the U.S.A. Magazine patents pending. For subscriptions, please visit www.insigniamquarterly.com.

QUART E R LY

VOLUME 2, ISSUE 4 | WINTER 2014

“Transformation efforts are driven by the need to survive in

a world where old models no longer endure.”

— SURESH VASWANI, DELL SERVICES

THE TICKERInnovation, engagement, and data deployment.

TOP LINETechnology by the numbers.

BLOOD, SWEAT & TEARSEmbracing the culture of a Generation Y workforce

produces breakthrough results.

FROM THE BOARDROOM Is your company adequately prepared to defend itself

against cyber crimes?

IQ BOOSTBreaking through can mean starting from the future.

040810

14

68

22

28

52

60

DEPARTMENTS

On the coverDell Services PresidentSuresh Vaswani

VO L U M E 2 , I S S U E 4 | W i n t e r 2 015

TECHNOLOGY TRANSFORMING CORPORATE CULTURE

BRIDGING THE GAP Intel’s Cheng Gang Bian spurred a turnaround by tapping into the Generation Y workforce.

Q&A WITH ROBERT WISEMANThe former Angie’s List CTO addresses the future of technology transformations.

IS YOUR COMPANY POSITIONED FOR THE CUTTING EDGE?

™

EMBRACING TECHNOLOGY

Dell Services President Suresh Vaswani preaches

technology-led transformations.

Insigniam and its publisher, D Custom, distribute this editorial magazine to share the opinions and insights of companies and their leaders on impactful global business issues. Insigniam Quarterly’s inclusion of a company or individual does not indicate that they are a client of Insigniam. Remuneration is not provided for editorial coverage. Individuals appearing in Insigniam Quarterly have done so with direct consent, or provided consent by a designated authorized agent in addition to being disclosed on the magazine’s audience and purpose.

MINI-FEATURES

™

THE MOVEMENT TO MOBILEThe future of health care is being shaped by advances

in mobile technology.

TAKING BREAKTHROUGH PERFORMANCE TO HEART Teamwork, innovation, and breakthrough thinking drove

AstraZeneca’s rollout of a massive clinical trial.

COMMUNICATION TRANSFORMATION Cone Health is leading the charge to provide better

care for patients through the integration of powerful

medical records systems.

THE FOUR WAYS OF BEING THAT CREATE THE FOUNDATION FOR GREAT LEADERSHIP, A GREAT ORGANIZATION & A GREAT PERSONAL LIFE


THE TICKER

The world has an unquenchable thirst for energy, which

is the primary reason why Coca-Cola has plunged in with

both feet. Late last summer, the soft drink giant announced it

would soak up a 16.7 percent stake in Monster Beverage Corp.

for a net cash payment of $2.15 billion. As part of the deal,

Coke is transferring its energy drinks NOS and Burn over to

Monster, which is kicking its non-energy beverages over to

Coke, including its popular Hansen’s Natural Sodas.

What makes Monster such a hot capture in the hyper-

competitive, $27 billion global energy drinks market?

Innovation, say observers. They’re constantly recalibrating their

energy portfolio to put pressure on rivals. They’ve introduced

high-protein Muscle Monster energy shakes (chocolate, coffee,

even peanut butter cup flavors), zero calorie drinks, and Monster

Energy Ultra — a power beverage that’s lighter and less sweet.

That innovation might explain why competitors like Rockstar,

Full Throttle, NOS, and 5-hour are treading water. In the wake

of the Coca-Cola deal, Monster announced on November 6

that third-quarter sales had increased 7.7 percent to $636 million.

MONSTER POWERBY MARK STEURTZ


Even with the most established brands,

disruption is frequently business as usual. In

October, Proctor & Gamble announced it

would shed its Duracell battery business to

Warren Buffett’s Berkshire Hathaway for

$4.7 billion in Proctor & Gamble stock.

Duracell goes all the way back to the 1920s,

when scientist Samuel Ruben teamed up

with businessman Philip Rogers Mallory to

form the company.

The private equity firm Kohlberg Kravis

Roberts picked up Duracell in 1988 for $1.8

billion before it was passed on to Gillette in

1996 for a whopping $7 billion. And why

not? Duracell batteries are used in all sorts of

popular gadgets, from toys and personal CD

players to digital recorders and cameras. As

recently as 2008, the “CopperTop” battery

was ranked 88th on Bloomberg Businessweek’s

top 100 brands with a valuation of $3.68

billion. That put it ahead of Smirnoff and

powerhouse luxury automaker Lexus.

But growth stalled, necessitating the spin-

off. Duracell was felled by smartphones, of

all things. iPhones and Android phones have

three of those gadgets that Duracell powers

right on board — four if you count games

and apps that operate remote control toys.

And perhaps more importantly, smartphones

don’t need replacement batteries.

Disruption came out of left field for the

CopperTop. True, Duracell has forged a pact

with Powermat, an Israeli firm that markets

wireless charging and backup batteries for

smartphones and tablets. Regardless, it’s

still a steep value crest to scale in order to

reach that ’90s value high. Which proves

a point: If you don’t negotiate the tricky

balance of disrupting your own business

while simultaneously nurturing your core,

someone else will surely perform the

disruption part for you.

According to the 2014 Insigniam Executive Sentiment

Survey, a full 80 percent of executives lose sleep over people-

related issues, including engagement. Enter gamification, or

driving engagement by transforming work functions into games.

Not long ago, the thinking was this secret sauce would “game

change” everything from recruitment and talent retention to

employee training and customer engagement.

The research firm Gartner, Inc., even predicted that by

2014, 70 percent of Global 2000 organizations would have

implemented at least one gamified app. Alas, that didn’t happen.

It turns out that using games to successfully drive problem

solving and engagement takes well-grounded, clearly defined

business objectives. Compelling game design doesn’t hurt either.

Secret sauce? Not yet.

PERCENTAGE OF EXECUTIVES WHO LOSE SLEEP OVER PEOPLE-

RELATED ISSUES.

PERCENTAGE OF EXECUTIVES WHO DO

NOT LOSE SLEEP OVER PEOPLE-RELATED ISSUES.

NOT INCLUDED

$3.68BILLION

The amount of Duracell’s

brand evaluation

$4.7BILLIONBerkshire Hathaway’s

purchase price in P&G stock

READY FOR PLAY?


THE TICKER

It appears the Industrial Internet — the convergence

of Big Data analytics with the Internet of Things — is poised

to drive the next industrial revolution. How potent will

this revolution be? According to Gartner, Inc., a technology

research firm, the Industrial Internet will have 26 billion

interconnected devices driving $1.9 trillion in global

economic value-add by 2020.

A network of physical objects that can sense and interact,

the Industrial Internet includes devices such as diagnostic

equipment, medical devices, jet engines, turbines, robotics, and

vehicle sensors. This massive network excludes smartphones,

tablets, and PCs.

The most valuable opportunities in this coming revolution

reside in health care, oil and gas, aviation, insurance, power

generation, and distribution. Why? Because data generated

by industrial equipment holds far more potential business

value than information from social media and consumer

Internet sources. GE recently announced that its Predictivity

information services platform will realize $1 billion in

revenues in 2014. That’s after the company committed in

2013 to invest $2 billion in health care information solutions

over the next five years.

Still, many firms may struggle to align their organizations

to capitalize on these coming opportunities. To effectively

harness the Industrial Internet, the enterprise must overcome

internal system barriers between departments, and cultural

hurdles that thwart the collection and correlation of data.

That’s in addition to talent gaps in critical areas such as

data analysis, the gathering and consolidating of disparate

information streams, and managers capable of using Big

Data analyses to make sound decisions. Success in this new

world always comes back to people — and the organizational

culture within which they function.

DATA HULK

While breakthrough success is often paved by the rapid

adoption of cutting-edge technology, sometimes it simply pays

to hang back and exploit opportunities ignored in the rush.

Fort Worth, Texas-based Athlon Energy applied a similar

strategy in the Permian Basin, the West Texas shale play and

top-petroleum-producing region in the U.S. While oil and gas

companies were rapidly adopting expensive new technologies

such as hydraulic fracturing and horizontal drilling, Athlon was

quietly picking up Permian acreage thought unsuitable for these

new technologies for pennies on the dollar. It then scooped up

traditional vertical drilling rigs at discount prices. Net result: a

deep inventory of some 3,900 vertical drilling sites and more

than 10 years of drilling inventory.

The assembled value was so attractive that Calgary-based

Encana Corporation snatched up Athlon for $7.1 billion

in a “transformational acquisition” finalized in November.

Innovation sometimes means seeing the conventional with

fresh eyes.

INNOVATING BEHIND THE CURVE

Since 1995, the FORTUNE Global Forum has convened world leaders and the heads of global business on the dynamic frontiers of international commerce. In 2015, we will bring CEOs from the FORTUNE Global 500 together with innovators, builders, and technologists from emerging companies to focus on disruptive innovation and explore the implications of technology trends for the 21st-century corporation.

For more information: www.FortuneGlobalForum.com

San FranciSco, caNovember 2-4, 2015

All photos from the 2013 FORTUNE Global Forum (Photos: Stuart Isett)

Attendance at the FORTUNE Global Forum is by invitation only and subject to approval. FORTUNE and FORTUNE Global Forum are trademarks of Time Inc., registered in the U.S. and other countries.

8 INSIGNIAM QUARTERLY WINTER 2015

TOP LINE

“ON THE TECHNOLOGY SIDE, YOU CAN AFFORD A

LITTLE MORE INNOVATION, A LITTLE MORE RISK,

SO TO SPEAK. BECAUSE YOU’RE CONSTANTLY

INNOVATING, YOU’RE CONSTANTLY PUSHING THE

ENVELOPE AND TESTING PRODUCTS AND TESTING

YOURSELF AGAINST THOSE LIMITS.”

— Bill Miller, CIO, Broadcom Corp

“I’m an optimist about the power of technology to transform lives for the better.”— Julius Genachowski, former FCC chairman (2009-2013)

BY THE NUMBERSCOMPILED BY GEOFF WILLIAMS

The money saved in power costs and operations licenses after AMD transitioned its data center from Austin, Texas to Atlanta, Georgia. Jake Dominguez, CIO, is credited for recognizing the need to update the center.

$8.5 million a year

INSIGNIAM QUARTERLY 9WINTER 2015

APPROXIMATELY $1 BILLIONAmount of money UPS spends annually on technology to improve its operations.

“What we are experiencing today, I truly don’t believe we’ve ever had anything quite like it. There aren’t that many people who really understand the individual technologies; to manage to have them integrated is extremely complicated.”— Jerry Luftman, former CIO, professor emeritus of the Stevens Institute of Technology, managing director of the Global Institute for IT Management

How much Walmart’s technology budget has climbed from fiscal year 2009 through fiscal year 2014, according to Charles Holley, Walmart’s executive vice president and chief financial officer, who told his shareholders: “Technology is our fastest growing area for capital expenditures.”70%

2009 Tech Budget 2014 Tech Budget

“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you

get it.” — Steve Jobs (1955-2011), CEO

of Apple


BLOOD, SWEAT & TEARS

A disciplined environment like Intel can be a culture

shock for many workers. Incorporating the much-maligned

Generation Y worker — commonly portrayed as being

overly ambitious, impatient, and lacking loyalty or obedience,

making them unproductive and difficult to manage in many

working environments — presents yet another potential

stumbling block.

As vice president of the Intel

Technology and Manufacturing Group

and general manager for Intel Products

(Chengdu) Ltd. in Chengdu, Sichuan

province, China, Cheng Gang Bian

has faced up to even greater workforce

challenges. China’s one-child policy,

though relaxed over the last year, has

led to primarily single-children families

in China for the last several decades. This has created a group

of Gen Y workers in China as well as Chengdu who were

brought up, in Bian’s words, as “princes or princesses” that

typically haven’t worked in a collaborative environment.

During Bian’s five years at the Intel Chengdu facility, the

solution has been to foster a collaborative environment geared

to engage the participation of each and every person at his

Intel executive Cheng Gang Bian has tapped into China’s Generation Y workforce to achieve breakthrough results.

BY PHIL BRITT

BRIDGING THE GAP

A Gen Y employee of Intel Chengdu made a sweet lifetime memory by taking her wedding photo at the company.


site. His story of leadership and commitment has resulted in

unprecedented breakthroughs.

FACING UP TO CULTURE SHOCK

Bian was no stranger to the issue of culture shock when

he first joined Intel. Though born in China, he spent several

years studying computer science in Norway, where a typical

workday starts at 9:00 a.m. or so, prolonged chats with

coworkers and one- or two-hour lunches are commonplace,

and leaving early is accepted — far from the discipline-

driven culture of Intel, an environment that Bian says he is

still learning.

That culture reinforces the understanding that talking a

good game without results will place your job in jeopardy.

A colleague shared with Bian that he thought the cultural

differences would end with Bian leaving the company within

six months. But he continues to thrive there 16 years later

as a driving force behind the company’s

powerhouse manufacturing facility.

Bian initially joined Intel as the

Pudong/Shanghai site IT/automation

manager in 1998 after leaving Norway

to pursue a career in technology

management in his hometown. He

eventually moved on to Intel’s flash

operations, which were eventually spun

off as a joint venture in 2007, and joined

the Intel Chengdu facility as general

manager in 2009.

During that time, Bian has found

that Generation Y workers can belie

their reputation and be molded into

a productive, dynamic workforce. He

relies primarily on a group of workers at Chengdu, with an

average age of 29 as of 2014, that comprise 90 percent of the

facility’s workforce.

The critical element is to understand the Generation

Y value system, he says. These workers want someone to

understand them and respect their valuation of diversity.

Though they are all of the same generation and do have

some commonalities, these workers also want management

to recognize their individuality. Accordingly, Bian has

orchestrated and overseen the redesign of the facility to

recognize that individuality. Many of the changes have come

as the result of employee suggestions. “Bian demonstrated a

key aspect of transformational leadership. That is to create an

environment where each and every person can give of their

best and flourish. Doing this often requires giving up a point

of view or a firmly held belief about how people should

think and act,” says Felicity McRobb, Insigniam consultant

based in Asia.

In addition, an outside visitor would never know that Intel

Chengdu is a factory, which could typically be marked by

dirty floors, machines, and overall uniformity. “We changed

all of that,” Bian says.

The facility’s cafeteria used to feature only one size of

table, with the philosophy of spurring small groups to sit

together and promote camaraderie. Bian realized that not

all people are comfortable in the same size groups. Now

employees can sit at tables suited for two, four, or other small

groupings. Similarly, halls no longer feature uniform colors.

During free time, workers can choose from an indoor 5-star

gym, badminton, basketball, and table tennis; outdoor tennis,

soccer and other physical activities; gardens; and a coffee area.

While some companies discourage fraternization among

workers, the Intel Chengdu facility

celebrates employee marriages. Pictures

of romantic proposals along with brides

and grooms are included in some of

the company’s internal slide show

presentations.

Recognizing the individuality and

personal lives of employees goes hand

in hand with fostering a strong work

ethic. “If you care about their lives and

their careers, they will find a workplace

that they love and want to contribute,”

Bian says. “Gen X leadership needs to

change for being able to lead/manage

Gen Y, not the other way around,” Bian

adds. “But, principles need to be instilled

for shaping the Gen Y productivity.”

Those important elements include communication,

passion, persistence, patience, and details. “In our experience

the most productive work environments are ones in which

people can connect their work to their core values, then the

workplace becomes a place of contribution and satisfaction,

as well as a place to earn a living,” says McRobb.

Bian communicates regularly with employees through

newsletters, meet-the-people sessions, and an anonymous

online suggestion box that goes directly to him. He encourages

them to make suggestions and ask him questions, all of which

he answers no later than two weeks from receipt, despite the

complexities that could arise from some of those questions.

Employees are also urged to pay attention to details as a means

of producing extraordinary results. At a place like Intel, career

RECOGNIZING THE INDIVIDUALITY AND PERSONAL LIVES OF EMPLOYEES GOES HAND IN HAND WITH FOSTERING A STRONG WORK ETHIC.


BLOOD, SWEAT & TEARS

development can depend on paying attention to small details

that differentiate the normal from the extraordinary.

Details also help connect the dots to understand each

worker’s contributions, he says. When the site’s current

“Chengdu Can Do 3.0” campaign was developed, Bian and

other executives realized that they wanted more than just a plan

of action, but rather a “big family picture” that would connect

all employees. The master plan focused on communicating

details that cover all strategies, programs, and actions so that

employees could understand how their contributions would

aid the facility’s success. The plan included what Bian termed

as audacious goals that eventually proved reachable for 2012,

when the plant was awarded with Intel’s Quality Award, the

most prestigious award doled out by the CEO to a select few

qualified organizations across the globe each year.

Workers have responded strongly to Bian’s leadership

philosophy and style in both good times and bad. By working

together efficiently, Intel Chengdu workers have transformed

their workplace into the company’s top facility of its type,

producing seven to nine units per second in an operation

that runs 24 hours a day and seven days a week. In fact, the

facility produces more than half of the world’s mobile chips.

Intel Chengdu has had technical challenges to overcome as

well. When a design flaw was discovered in a chipset product

at the end of 2010, employees were called back on the first

day of Chinese New Year in 2011, which Bian likened to

U.S. workers being called back into work on Christmas. Yet

employees reported for work and quickly dove into the task

of correcting the flaw so that replacement chips could be sent

out quickly, before even OEMs could have realized it. Failing

to do so in the first quarter of the year could have resulted in

$1 billion in losses to Intel, according to Bian. The workers

discovered and corrected the flaw, allowing replacements to

be shipped within six weeks — versus an ordinary plan of at

least a quarter-plus — an unheard-of turnaround.

Loyalty is another byproduct of this leadership style. Despite

their relatively young age, Chengdu’s average worker has been

with the facility for about seven years, in strong contrast to

the national average. According to Bian’s observations of

China’s market norms, six in 10 Gen Y workers leave their

companies in under two years. “It is real work to have people

fully engaged in the company’s success, owning successes

and failures as their own,” adds McRobb. “Bian’s brand of

transformational leadership is clearly paying off, positioning

Intel as a workplace of choice and delivering real business

value and results. It’s been a pleasure to work with him.”

On another front, Bian is a major advocate of Corporate

Social Responsibilities (CSR) into local communities, and

“IT IS REAL WORK TO HAVE PEOPLE FULLY ENGAGED IN THE COMPANY’S SUCCESS, OWNING SUCCESSES AND FAILURES AS THEIR OWN.” — FELICITY MCROBB, INSIGNIAM CONSULTANT, ASIA


his philosophy is one minute of volunteer

work equals the same value in hours and days

to people in need. Intel Chengdu facility

performs an average of 25,000 volunteer hours

each year to go along with about a 70 percent

participation rate, and they have been honored

as the No.1 CSR Company in Sichuan, China,

since 2009.

“Our average volunteer hours per employee each year are

above 16 hours, while the second awardee in China is at about

20 minutes,” says Bian. “And we never had a goal and gift for

volunteers, but a fashionable volunteer t-shirt that a group of

Gen Y employees design with colorful ideas every year.” The

volunteer spirit is a big part of their culture, as evidenced by

the vision statement, “Intel Chengdu – A Source of Pride for

Intel, Our Communities, and Our Families.”

EARLY SETBACK

Prior to his success at Chengdu, Bian’s role as the managing

director for Intel’s flash operations in Shanghai included

overseeing some 1,200 employees. A few years after the 2007

spin-off, the market for flash drives started getting soft and

Intel made a strategic corporate decision to exit the business.

He needed to inform the employees that they were losing

their jobs and yet work through the closure of

the facility.

“It was very painful and problematic,” he

recalls. “I sat at home for three days with a beer

in my hand. I thought about it and digested if I

were CEO of the company, I would have come

to the same decision. It was the right strategy

for a sun-setting business.”

So Bian designed a volunteer separation program in which

everyone affected listed their preferred timeline for leaving

the facility. He chose the last day so that he could try to help

other employees find work — if not in other areas within

Intel, then attractive jobs outside of the company.

“We wanted a smooth shutdown … ‘Exit with Pride;’ we

treated the workers with respect and dignity,” he says. It went

so smoothly that workers left with a sense of camaraderie

— they still have gatherings to reflect on their times at the

flash facility — and Bian was subsequently named general

manager of the Intel Chengdu facility.

While Bian’s hope is to have no more such setbacks, he

expects to be able to respond quickly if needed. The factory’s

motto suggests the future success that Chengdu’s workers

and managers continue to pursue: “Connected hearts for the

future; Chengdu can do.”

One of 22 volunteer programs implemented by Intel Chengdu showing a company effort to aid a local wetland protection program.


Fill-in-the-blank Corp. confirmed today that hackers/criminals/foreign agents/unauthorized users have accessed

sensitive payment information/email addresses/business

intelligence that may impact customers … Millions of cards

affected … Working with law enforcement … Have enhanced

our security protocols … Costs may

adversely affect financial results …

The repetitive headlines and press

releases remind directors that overseeing

cyber security is one of the most pressing,

and complicated, board responsibilities

facing them today.

The cost of a data breach to a company can range from

$9.3 million to $16 million, according to the 2014 Cost of

Cyber Crime Study: United States, the fifth annual study of U.S.

companies conducted by the Poneman Institute. According

to another Poneman Institute report, 2014 Cost of Data Breach

Study: United States, the average cost of each compromised

Strong IT governance by the Board is a vital line of defense against cyber crime.

BY STACEY CLOSSER

FILLING THE BREACH

THE BOARDROOM


record caused by a data breach increased from $188 to $201

over the last year. Most of that money is spent on detection and

recovery activities, followed by investigation and containment.

Consequently, the longer it takes to resolve the breach, the

more expensive it is.

It’s a well-known issue — more than 65 percent of directors

surveyed indicated that cyber security risks were at a high

level or had increased, according to the

Institute of Internal Auditors survey,

“Pulse of the Profession 2014” — yet

how to best provide oversight leaves

some boards at a loss.

“It challenges each of us in our

respective companies to have best

practices,” says Kneeland Youngblood,

founding partner of Pharos Capital

Group, who currently serves on the

board of Mallinckrodt Pharmaceuticals

and has also served on the boards of

Burger King Corp., Gap Inc., and

Starwood Hotels and Lodging, among

others.

A BOARD’S RESPONSIBILITY

As part of their fiduciary

responsibility, directors are charged

with understanding the cyber risks

against the organization as well as the

legal implications. Boards ensure that

the standards and processes followed by

IT are rigorous and prudent, as outlined

by external experts and measured

against industry peers.

Once up to speed, the board should

be performing an intensive review of the company’s security

policies annually, although those updates should occur more

frequently during times of technological change or industry

security upsets.

Youngblood outlines the first two lines of defense against

cyber crime — having the right experience in the boardroom,

and having the right experience in the management suite.

The most important thing the board of directors can and

must do is to select the best CEO, says Youngblood. “All roads

lead from there — if you get that right, many of these other

things will be addressed.”

The chief information officer is another important role

that is best filled by looking at the marketplace, as opposed

to an internal hire. The CIO position has evolved and now

requires as much business acumen as technical know-how. This

position won’t be adequately filled by a tech genius lacking

in social skills.

“The best CIO/CTOs can relate to boards and management.

They know their business impact. They are not isolated, they

don’t talk in gibberish,” says Tom Hudson, CEO of Municipal

Parking Services and a serial entrepreneur who has served

as a board member for numerous

technology-related public and private

companies. “They know the value that

they are creating for the organization

and the impact of a miss in money or

time.”

Robert Clyde, international

vice president of ISACA (formerly

Information Systems Audit and Control

Association) and CEO of Adaptive

Computing, underscores that sentiment

regarding the CIO: “It’s not enough to

be a strong tech leader — you have to

be a strong business leader.” If the board

determines the company CIO is the

former, it might make sense to have

the chief information security officer

(CISO) report directly to the CEO or

even the chief compliance officer “so

you get a cross check on the security

side,” he says.

Providing the CISO access to the

board is integral in keeping the lines of

communication open. The board should

expect to be made aware of attempted

security breaches, not just the successful

ones. Meetings with the CISO should

reveal not only the appropriate strategy and possible roadblocks,

but also the general risks facing the company’s industry.

AREAS TO CONSIDER

Even seemingly non-IT business initiatives can be rife

with security concerns. For example, outsourcing business

processes such as accounting or human resources can provide

an opportunity for cost savings, but it also introduces new

cyber risk.

Third-party service providers’ security practices quickly

become your security practices. Boards should ensure that

agreements with third-party providers address the provider’s

role in safeguarding critical data and require notification of any

data breaches, while also applying those same requirements to

“IT IS IMPERATIVE THAT COMPANIES AND BOARDS BE VERY VIGILANT IN THEIR PEOPLE, IN THEIR PROCESSES, IN THEIR ASSESSMENT OF THINGS,” SAYS YOUNGBLOOD. “TAKING THEIR EGO OUT AND ALWAYS STRIVING TO IMPROVE.”


other third-party providers downstream.

The proliferation of “bring your own device” is changing

the risk profile for organizations, says Clyde. Like it or not,

employees will want to connect their devices to the network,

and no amount of security awareness training will eliminate

that behavior. The BYOD trend offers a “great competitive

advantage, but you have to be sure to take care of the risks

associated with that scenario,” says Clyde.

QUESTIONS YOU WON’T THINK TO ASK

Board members don’t need deep technical expertise to

oversee cyber security, just the ability to read people and ask

the right questions while staying out of the weeds of IT jargon.

Stick to the basics: What, why, how, the results expected, and

the process/investment required. Some other questions that

may be off your radar include:

6Does management have established relationships with

national and local authorities such as the FBI that

respond to cyber crime? How can that relationship

inform the company on security trends and new

threats?

6How has the CEO communicated the importance of

organizational security to all employees? Is there a

security-awareness training program in place?

6Are we using a security framework such as NIST

(www.nist.gov) or COBIT (www.isaca.org/cobit)

THE BOARDROOM


and is it up to date?

6How do our security measures stack up to our peers

in our industry? What relationships can we leverage

to find out?

6Big data offers opportunities to create very detailed

customer profiles. How are we making sure that both

the raw data and also those profiles are secure?

6Does internal audit have a direct line to the board’s

audit committee? “Most boards have those on the

financial side, but there should be a similar avenue

on IT controls,” advises Clyde.

WHEN IT HAPPENS

All industries fall victim to cyber crime, albeit to different

degrees. High-profile security breaches occur with such

regularity that consumers have already registered data breach

fatigue — more than one-third of consumers did nothing

after being notified of a breach, according to research from

Poneman Institute. But that doesn’t mean organizations can,

or should, be complacent.

Consider home security as an analogy: There are prudent,

appropriate measures that should be taken — door and

window locks, a security system, a dog, for example — but if

a criminal is intent on getting in, there are ways to do it. That

doesn’t mean you give up and leave all the doors wide open,

and it doesn’t mean you go out and buy steel window covers

that remain permanently closed.

Clyde encourages directors to ask: What are the right

controls to have in place, given the assets we have and the

likelihood of things occurring? What is the standard of due

care for my industry?

“It is imperative that companies and boards be very vigilant

in their people, in their processes, in their assessment of things,”

says Youngblood. “Taking their ego out and always striving to

improve.”

Industry experts agree that planning for a security breach

is the best approach. It’s not a matter of if, but when. “Any

company can be hacked, it’s really just a question of time and

money of the attackers and how far they’re willing to go,”

says Clyde.

When that happens, it’s time to pull the trigger on the

organization’s detailed recovery plan.

“Be open and candid about the problem both internally

and externally and put the right level of executive in charge

of communicating about the crisis,” says Hudson. “It probably

did not get broken in a day and will take more than that to

fix — plan for that.”

DATA BREACHES: BY THE NUMBERS

$188

$201

AVERAGE COST OF EACH COMPROMISED RECORD CAUSED BY A DATA BREACH INCREASED FROM $188 TO $201 OVER THE LAST YEAR.— 2014 COST OF CYBERCRIME STUDY: UNITED STATES

$9.3 MILLION

$16 MILLION— 2014 COST OF CYBERCRIME STUDY: UNITED STATES

COST OF A DATA BREACH TO A COMPANY CAN RANGE FROM

TO

MORE THAN SIXTY-FIVE PERCENT OF DIRECTORS SURVEYED INDICATED THAT CYBER SECURITY RISKS WERE AT A HIGH LEVEL OR HAD INCREASED.— INSTITUTE OF INTERNAL AUDITORS SURVEY “PULSE OF THE PROFESSION 2014”

65%

Every business should reconsider its energy plan,

according to Robert Armstrong.

As director of the MIT Energy Initiative (MITEI),

Armstrong possesses an advanced perspective on this topic

gleaned through pursuing only one mission for the last nine

years — researching a comprehensive

energy transformation that will help

steer the world to clean energy usage.

The MITEI program was launched in

2006 to create a platform for research,

education, and outreach programs while

partnering with companies across a

wide array of energy-related businesses.

In the course of that mission, MITEI

has garnered an impressive membership,

including BP, ExxonMobil, Shell, Saudi

Aramco, Bosch, Edison International, and

Lockheed Martin Corporation. All in all, 71 member enterprises

make up the collaboration, with room for many more. They are

all working with MITEI faculty, staff, and students on various

projects to transform the earth’s energy systems and move the

products of this alliance into the energy marketplace.


Cutting-edge research and development of cleaner energy systems is proving to be a valuable investment.

BY GEOFF WILLIAMS

MIT’S ENERGY INITIATIVE INTENDS TO CHANGE THE WORLD


The brains behind MITEI are academics working in the

proverbial ivory halls across the Massachusetts Institute of

Technology campus. The theory is that you can’t expect to

transform the earth’s energy systems without engaging the

world, and MITEI is looking at energy problems from all angles

— economic, environmental, and security concerns.

STRATEGIC ALLIANCES

While it might seem like a no-brainer for energy companies

like Duke Energy Corporation to work with an energy initiative,

MITEI also has active members that aren’t readily associated with

fossil fuels, such as Rockport Capital Partners and BlackRock,

Inc. Walmart is currently working with MITEI on its long-

term goal of being supplied by 100 percent renewable energy.

In addition, Walmart and MITEI are making great progress on

the company’s goal to produce or procure 7 billion kilowatt

hours of renewable energy globally by 2020. Armstrong views

these partnerships essentially as logical byproducts of common

corporate initiatives.

“Every company is an energy company,” according to

Armstrong. “Companies either produce energy, generate it,

distribute it, or they use it. Okay, so we bring all of those aspects

to the table in our meetings and discussions, and I think that’s a

very valuable part of MITEI, to get the discussion going between

the ones using energy and the ones producing it, and I think

they learn a lot from each other.”

Armstrong makes it clear that MITEI is not simply a forum

for getting together to exchange business cards and share energy

ideas. Since it was launched in 2006, the MITEI Seed Fund

Program has offered funding of approximately $15.8 million to

129 promising early-stage research proposals. In addition to its

funding efforts, MITEI provides brainpower as well. “It’s a very

engaged process, so we work very closely with the members in

designing and executing the process,” Armstrong says.


In 2014, more than $1.6 million was awarded to 11 projects,

including one that would allow methane gas to be converted

into liquid methanol at remote recovery sites, which would make

it cheaper to store, transport, and use the fuel. Other projects

include work on dual-mode lithium-bromine seawater batteries

and nanostructured high-performance electrostatic capacitors.

POWERFUL BREAKTHROUGHS

Although these types of cutting-edge projects are immensely

complex, Armstrong, a professor of

chemical engineering, affably shares

his enthusiasm about their potential

applications in layman’s terms. For

instance, it’s easy to understand how

one can get excited about energy

transformation when he discusses the

work that’s being conducted with

MITEI member Ferrovial, S.A. The

Spanish multinational company owns,

or partially owns, everything from

airports to toll roads, within which

they’re working to make drive-by

energy audits.

According to Armstrong, the

technology Ferrovial is developing

will someday afford city employees the

capability of driving through at night

and taking rapid infrared images of buildings — all while using

the already-existing cameras that are so prevalent on city streets.

And what’s so useful about that? Armstrong forecasts that

this technology could save cities thousands, perhaps millions,

of dollars, while making millions more for companies like

Ferrovial. “You’ll be able to much more easily find leaks in

windows and uninsulated attics, along with parts of the buildings

that are energy losers,” Armstrong says. “And by doing that, it

can help put less pressure on the grid and reduce the need for

new power generation.”

Another MITEI project is built around a partnership with

Eni, an energy company with a footprint in 70 countries that

employs approximately 79,000 people. The Eni-MIT Solar

Frontiers Center is working on developing the next generation

of solar technology.

“The center has been focused on

active solar technology,” Armstrong says.

The problem with utilizing today’s solar

panels is that they’re “heavy, made of

glass, and you need a bunch of people

to carry and install them,” Armstrong

says. He adds that they’re also expensive

to manufacture.

But if the future follows the path

that Solar Frontier Centers has laid out,

implementation of solar technology is

going to be much less expensive to

manufacture and far easier to install.

“Think about the photographic

business, and how Eastman Kodak’s

film with multiple coatings allowed you

to develop high-quality photographs”

Armstrong explains. “I want us to do the same thing with

photovoltaic material, where you can roll it out over the roof

and plug it in, and you’re up and running. We’ll have to be able

to deploy this on a large scale for the price requirements to come

down, but to me, that’s the future.”

“EVERY COMPANY IS AN ENERGY COMPANY. COMPANIES EITHER PRODUCE ENERGY, GENERATE IT, DISTRIBUTE IT, OR THEY USE IT.”— ROBERT ARMSTRONG

MITEI BY THE NUMBERS

71 MEMBER ENTERPRISES MAKE UP THE MITEI COLLABORATION

YEAR MITEI WAS LAUNCHED TO CREATE A PLATFORM FOR RESEARCH, EDUCATION, AND OUTREACH PROGRAMS WHILE PARTNERING WITH COMPANIES ACROSS A WIDE ARRAY OF ENERGY-RELATED BUSINESSES

2006WALMART AND MITEI ARE MAKING GREAT PROGRESS ON THE COMPANY’S GOAL TO PRODUCE OR PROCURE 7 BILLION KILOWATT HOURS OF RENEWABLE ENERGY GLOBALLY BY 2020


INVESTMENT IN TRANSFORMATION

The assumed CEO viewpoint may be that if tried-and-true

energy systems are still working, he or she wouldn’t particularly

be interested in working on using microorganisms from the

ocean to make biofuels, or harvesting energy from water waves

and vibrations on a sidewalk and turning it into electricity.

But the reception from business leaders has been extremely

positive. “I haven’t heard anyone say that this is a waste of money,”

Armstrong says.

“Having the top leadership buy into transforming an energy

system is important,” Armstrong says. “I think the leaders we’ve

worked with are all very forward thinking. That’s definitely

a common trait of the top executives who invest in new

technologies.”

It also helps when companies have forward-thinking board

of directors, Armstrong adds. In fact, Ferrovial started its own

in-house corporate research group after aligning itself with MIT.

“They’re looking for new ways to improve their business’s

bottom line,” Armstrong says. He adds that, along with

identifying energy leaks in buildings, Ferrovial also is working on

technology that eventually will allow them to scan infrastructure

such as buried pipeline so that leaks or potential problems can

be identified.

“If I can do that and know where to find pipe that need

repairs, then I can provide the same services to other cities,”

Armstrong says, offering a glimpse into how technology can be

a game changer for companies and communities in the future.

Everybody wins — the businesses and cities that save money

on energy costs and the companies that can help them find

those savings.

IN 2014, MORE THAN $1.6 MILLION WAS AWARDED TO 11 PROJECTS, INCLUDING ONE THAT WOULD ALLOW METHANE GAS TO BE CONVERTED INTO LIQUID METHANOL AT REMOTE RECOVERY SITES

WALMART IS CURRENTLY WORKING WITH MITEI ON ITS LONG-TERM GOAL OF BEING SUPPLIED BY 100 PERCENT RENEWABLE ENERGY

SINCE IT WAS LAUNCHED IN 2006, THE MITEI SEED FUND PROGRAM HAS OFFERED FUNDING OF APPROXIMATELY $15.8 MILLION TO 129 PROMISING EARLY-STAGE RESEARCH PROPOSALS

100% 11$15.8 MILLION


Health care has seen many transformative moments

throughout history. The creation of penicillin. The development

of the polio vaccine. The use of gene therapy to treat a variety

of illnesses, including cancer. The evolution of minimally

invasive surgery. All have substantially transformed the well

being of humanity. Perhaps the biggest transformation within

the past decade is the movement to mobile — the drive to

place critical information in the hands of

the consumer, physicians, and other health-

related professionals when and where they

need it.

Mobile leverages best practices from the

past by taking health care out of the doctor’s

office or hospital and placing it back in the

patient’s home or other care setting. It also

places information on best practices in the

hands of practitioners when they are bedside or with the patient

and family, helping them make informed decisions to improve

the care they deliver.

OUR WORLD WILL NEVER BE THE SAME

The integration of mobile technology with smartphones,

tablets, and other devices is a global phenomenon that promises

How smartphone and handheld devices are changing health care

BY TOM PECK

THE MOVEMENT TO MOBILE


to change the very fabric of our businesses and our everyday

lives. Health care delivery is an excellent case study in how

mobile technology is transforming and improving the health of

billions of people. Mobile health, otherwise known as mHealth,

has turned heads in the C-suite because of its mammoth revenue

potential — some estimates place it at $20 billion by 2018. Today,

more than 100,000 health apps are available for download to

smartphones and handheld devices. In fact, almost every person

in the U.S. — 247 million — currently has a health care app on

his or her personal device.

The true magnitude of the mobile health tsunami is apparent

when you glance at the agenda of the recently held 2014

mHealth Summit. Many Fortune 500 companies — IBM,

Samsung, Pfizer, Sprint, and Verizon — as well as leading

health care organizations that included the National Institutes

of Health, Kaiser Permanente, Partners HealthCare, and

Walgreen’s came together at a meeting designed to focus on

real-world applications and innovations being integrated into

care delivery today. Their impact includes increased patient-

provider communication, greater access to care for populations

around the world, and empowered individuals who have tools

to better manage their own health and wellness.

mHEALTH EXPANSION AND SMARTPHONE

ADOPTION

So, why are mHealth apps so popular and who is behind

the development and rollout of this technology? In its recently

published fourth annual study on mHealth app publishing,

research2guidance, a global market research company focused

on the world’s app economy, predicted the main market drivers

for the next five years are the increasing penetration of capable

devices and user/patient demand. In today’s “I want it right


now” society, individuals are eager to use mobile technology

that could lead to improved health while using apps that will

help them monitor their blood pressure, measure their blood

sugar, keep up on daily pollen counts, sleep better, eat healthier,

manage medications, get and stay fit, and much more — when

and where they need it.

According to the study’s authors, fitness apps, which today

constitute the category that offers the highest business potential

for mHealth app publishers, will diminish in their relative

importance, slipping to fifth position within five years. The app

categories that have the highest expected market potential in the

near future are remote monitoring and consultation.

INNOVATION AND ENTERPRISE DRIVING THE

FUTURE

The power of mobile health to connect people in some of the

most remote regions of the globe with researchers and physicians

is being driven by universities and academic medical centers.

Johns Hopkins University and the University of California, San

Francisco, are two prime examples of mHealth innovation hubs.

The work being done by Alain Bernard Labrique, PhD,

exemplifies the advances mHealth has made in the academic realm.

He currently serves as an associate professor in the Department

of International Health, Department of Epidemiology at Johns

Hopkins University in Baltimore, Md., and director of the Johns

Hopkins University Global mHealth Initiative (JHU-GmI).

“I’m an infectious disease epidemiologist, trained in molecular

biology, but an innovator at heart,” says Labrique. “I’ve lived and

worked in rural south Asia and Sub-Saharan Africa for more than

20 years, and I’ve seen how information and communications

technologies have not only emerged out of thin air as a consumer

phenomenon, but also as a transformative force in how global

health programs are being implemented.”

Labrique’s work through JHU-GmI includes partnering


with the Ministry of Health in Bangladesh and social enterprise

company mPower Health to develop and test an integrated

mobile phone pregnancy surveillance system. He has also been

instrumental in perfecting Momconnect, a project aimed at

using mHealth messaging services to create awareness among

pregnant women about available health services in the Republic

of South Africa.

“mHealth strategies stand to democratize health and accelerate

our achievement of universal health coverage by empowering

citizens with information where and when they need it, by

extending the arm of providers to reach citizens, no matter how

remote they may be, and by filling long-

standing information gaps that have led

to inefficiencies and dysfunction,” says

Labrique.

Leading health care enterprises

such as Partners HealthCare, affiliated

with Harvard University, have realized

mHealth’s potential for embellishing

their brand and expanding their patient

base to global proportions. Joseph C.

Kvedar, MD, founder and director of

the Center for Connected Health at

Partners HealthCare, has developed

a technology platform that leverages

cellphones, computers, networked

devices, and remote health monitoring

tools to improve care delivery. He

also established the first physician-to-

physician online consultation service

in an academic setting, linking patients

from around the world with specialists

at Harvard-affiliated teaching hospitals.

The Federal Communications

Commission (FCC) has jumped into the mHealth fray by

adopting rules that enable Medical Body Area Networks

(MBAN), low-power wideband networks consisting of multiple

body-worn sensors that transmit a variety of patient data to a

control device. Investors see the potential in MBAN, offering

venture funding in the first quarter of 2013 that has supplied

$42 million to companies developing products in the remote

monitoring space.

David Muntz, senior vice president and chief information

officer for GetWellNetwork and former principal deputy in

the Office of the National Coordinator for Health Information

Technology in the Department of Health and Human Services,

sees MBAN as a sign of things to come for mobile health.

“One of the biggest advantages of mobile health technology

is that it has closed the digital divide between those lacking

resources and those flush with resources,” Muntz says. “People

around the globe own mobile phones because they are generally

affordable. This helps researchers and clinicians reach and treat

traditionally underserved populations who experience costly

chronic illnesses.”

IMPACT ON NON-CLINICAL DECISION-MAKING

Novation, a health care services company that develops

and manages contracts with more than 700 suppliers for the

members and affiliates of VHA, Inc. and UHC, has developed

VHA LYNX™, a suite of mobile

analytics solutions tailored for

various components of the hospital

supply chain. “By giving members

access to the right information in

the right place at the right time via

their smartphones or tablets, we help

them improve their productivity and

save money,” says Hari Subramanian,

Novation’s director of product

management. “Our members have

found the mobile solutions to be

especially helpful when they are

sitting across the table from a supplier,

negotiating a contract.”

CAUTIOUS OPTIMISM FOR

A BOLD NEW FUTURE

A recent Becker’s Hospital Review

article points to increasing adoption

and acceptance of mHealth by

consumers. By 2016, a majority

of consumers expect mHealth to

significantly change their health care experience by helping

them access information, manage their health, and communicate

with their physicians and other caregivers. They also think that

mHealth will make care more convenient, improve quality, and

reduce costs.

What factors could cloud this rosy picture for mHealth?

Industry experts warn that data security could present barriers

to progress. Regulation and red tape imposed by government

oversight, accompanied by a lack of clarity, could also be a threat

to the burgeoning sector.

Challenges aside, it’s clear that mHealth is no longer a fad —

the movement has become firmly embedded in global health

care diagnosis and delivery. What’s the future prognosis? Rapid

improvement and continual innovation.

LEADING HEALTH CARE ENTERPRISES SUCH AS PARTNERS HEALTHCARE, AFFILIATED WITH HARVARD UNIVERSITY, HAVE REALIZED mHEALTH’S POTENTIAL FOR EMBELLISHING THEIR BRAND AND EXPANDING THEIR PATIENT BASE TO GLOBAL PROPORTIONS


THE METEORIC RISE OF THE MOBILE REVOLUTION

With millions of users migrating to mobile technology, rapid adaptation could mean the difference

between your organization’s successful future or eminent extinction.

of Americans say their phone is the first and last thing they look at

every day

of Americans use only mobile devices to access

the Internet

30 MILLION consumers watch TV content on their phones

= 100,000 consumers

of adults have their mobile phones within

arm’s reach 24/7

29% 91% 25% BY 2015, MOBILES WILL OVERTAKE PCS AS THE MOST COMMON WEB ACCESS DEVICE WORLDWIDE

INFOGRAPHIC


of web users say they expect a site to load on their mobile phone in three seconds or less

of users prefer mobile because it’s easy to use and constantly with them

TODAY’S AVERAGE MOBILE PHONE IS MORE POWERFUL THAN THE PCS THAT SENT TWO ASTRONAUTS TO THE MOON IN 1969

of mobile shoppers abandon a transaction if the experience is not optimized for mobile

DATA IS PROJECTED TO GROW 66% EACH YEAR THROUGH 2017 TO 11.2 EXABYTES PER MONTH

of mobile searches lead to action within one hour (It takes a month for the same percentage of desktop users to catch up)

AS MANY CELLPHONES IN THE WORLD AS THERE ARE PCS

5X2013

20142015

20162017

7.1 BILLION PEOPLE ON THE PLANET

4 BILLION USE A MOBILE PHONE

1.5 BILLION ARE SMARTPHONES

3.5 BILLION USE A TOOTHBRUSH

47%

30%

60%

70%

In 2009, the management team at AstraZeneca

embarked upon an unprecedented and, in hindsight, wholly

unrealistic goal. The multinational biopharmaceutical giant had

set out to deliver an initial submission for approval of the lifesaving

drug, Brilinta (known in scientific circles as ticagrelor) within a

timeline of just 60 days. Brimming from their excitement over

the positive findings from a comprehensive, three-year study

demonstrating that Brilinta was more effective than Plavix in

preventing heart attacks and death, they were more than eager

to complete the new drug application (NDA) process. The

hope was that a quick approval in the U.S. and Europe would

accelerate the drug’s time-to-market

and broad availability.

The excitement swelling around

Brilinta was justifiably palatable,

according to Sandy Fitt, who was

leading the clinical development

team at the time. Results from a mega,

international, head-to-head Phase III

trial titled PLATO (a study of PLATelet

inhibition and patient Outcomes) had

conclusively demonstrated Brilinta’s

positive impact on survival for acute coronary syndromes

(ACS), which includes a group of symptoms for any condition

(such as unstable angina or heart attack) that could result from

reduced blood flow to the heart. Brilinta, an oral antiplatelet

treatment, works by preventing the formation of new blood

clots, thus maintaining blood flow in the body to help reduce

the risk of another cardiovascular event.

To this day, PLATO, which recruited 18,624 patients in more

than 43 countries to analyze the efficacy, safety, and tolerability

of the drug, is considered one of the most comprehensive

worldwide clinical trials ever conducted. Only six percent of


AstraZeneca mobilized a cross-cultural team to roll out one of the world’s largest clinical trials for a new drug application.

BY LIZ WILLDING

TAKING BREAKTHROUGH PERFORMANCE TO HEART

“To achieve great things, two things are needed: a plan, and not quite enough time.” — Leonard Bernstein


clinical trials are conducted on a worldwide scale, typically with

smaller populations. Armed with extensive, promising data from

the PLATO study, which was initiated in October 2006 and

completed by March 2009, the AstraZeneca management team

elevated Brilinta to the top of its development list. Convinced

it would save the lives of many patients when approved, they

launched a cross-cultural project with an extended team of 45

members to fast-track the submission of the findings to health

authorities in record time.

The herculean efforts of Fitt and her team were rewarded

with approval for the drug from the European Commission in

2009, marketing it under the names Brilique and Possia. The

FDA requested additional analysis of the PLATO data before

approving Brilinta in 2011. Currently, the drug is approved in

more than 100 countries. The story of how Fitt and the team,

working with Insigniam, led the rollout of dual applications to

bring Brilinta to market is a study in breakthrough thinking,

innovation, teamwork, and persistence.

BUILDING COMMITMENTThe AstraZeneca team issued its initial 60-day challenge to

deliver the new drug applications to the U.S. and Europe by

working with an internal Lean Six Sigma expert. The team

responsible for execution decided that an 85-day target was

more reasonable, but they were highly skeptical that the revised

timeline would be met, says Fitt. “Authentic alignment and

commitment were not there, even at 85 days,” she explained,

“but no one would speak up and be honest with the senior

leadership. It was a very passive aggressive culture.” Making

matters worse, the team had a notable lack of experience with

conducting submissions.

Given the prodigious scale of the task, Fitt’s strategy involved

coordinating with Insigniam to conduct its Breakthrough

Project process, which focuses on revealing and disengaging

from the hidden beliefs, assumptions, and presuppositions from

the past that prohibit unprecedented performance in the future.

“We had an exercise where team members were able to say what

they needed,” she said. “When we gave them permission to be

authentic, they felt their voices were listened to for the first time,

and they started believing in the possibility of being successful.”

In her role as the team leader, Fitt’s next step was to stand

up for her team with senior leadership, framing it as a high-

performing team that could work together and commit to an

achievable breakthrough goal. To do so, Fitt had to establish

a perspective for the team that would create a new work

environment or context for the project. “All work happens in a

non-physical environment of beliefs, opinions, assumptions and,

most importantly, views of what is possible in the future,” says

Insigniam partner Jennifer Zimmer. “That environment sets a

context that is decisive in determining the range of results that

are possible.”

Through the process, Fitt had to “unhook” key issues that set a


context that would prohibit success. The prevailing environment

emerged from several issues and could be summed up as “The

Blame Game.” Among these issues were:

2 Threads of a passive-aggressive culture

2 A mood of being victims of an overly aggressive, unrealistic

target set by leadership

2 Trust issues between team members (such as between

the physicians and the medical writers charged with

developing the product documentation)

2 A silo mentality characterized by finger-pointing and

shifting blame when something went wrong

2 An “Us” versus “Them” mentality, particularly cross

culturally

2 Unclear roles and responsibilities throughout the global

team

After clearing the air of the issues that were holding back

breakthrough thinking, the process steered the team to invention

and implementation achieved through an intensive, two-day

period of discussion. Thanks in large part to Fitt’s guidance

through much productive debate, the team built a new context.

Instead of focusing on “who’s right and who’s wrong and why

it can’t be done,” they rallied around the theme, “With patients

at heart: be brilliant, be bright, be best.” Inspired by their new

sense of purpose and now accepting full accountability for the

success of the project, they adopted the theme as their motto,

encouraging each other to keep the patient imperative at the

forefront of their efforts. Alignment also was formed by replacing

the 85-day timeframe with a final, realistic breakthrough goal for

the Brilinta submission of 106 days, based on clear, achievable

milestones that the team could truly commit to moving forward.

GETTING TO THE GOALThe next challenge centered around bringing the new

context to life and engaging the work team on the still highly

aggressive timeline. Inspiring them to believe in the goal was the

first hurdle. Once again, Fitt led the team through the process

of creating an innovative pathway for strategic breakthrough

outcomes aimed at achieving the 106-day goal. By seeing the

possibility of delivering in the 106-day window, she reports

that they felt inspired to “roll up their shirt sleeves and make

it happen.”

An “A team” or steering committee was established to create

accountability within the project. Each leader on the team was

accountable for a piece of the deliverables. Guided by Fitt, they

met three times per week during the delivery phase to review

progress, discuss issues, and mitigate risk. Through a roles and

responsibilities exercise, they mapped out 16 work streams

and clarified the downstream roles and responsibilities for the

45 team members who would ultimately be accountable for

delivering the work.

Along with Fitt, the team also included five project managers

responsible for overseeing multiple contacts in the work streams

to ensure successful implementation of the highly complex

plan. In particular, timelines were tweaked constantly due to

conflicting priorities or issue management. “I made sure the

team was aligned on the interim milestones,” she explains, “and

as we met them, I made sure this was communicated broadly to

demonstrate that we were working according to plan. We even

had a chart displaying progress for everyone to see.”

Delivering on the milestones created trust with executives

and bonding among the teams. “You could see everyone truly

BY THE NUMBERS: BRILINTA’S APPROVAL

18,624 PEOPLE

43 COUNTRIES

The Phase III trial titled PLATO recruited

The trial was conducted from October 2006 to

March 2009

Only 6% of clinical trials are conducted

on a worldwide scale

and is considered one of the most comprehensive worldwide clinical trials

ever conducted

Convinced Brilinta would be wildly successful when approved and launched

in the U.S. and Europe, management commenced a cross-cultural project

with an extended team of 45 people to ensure the new application process

would happen in record timein more than

6%


working together, helping each other, having each other’s back.

They would do anything for each other.”

CHANGING MINDSETS AND PROVIDING INSPIRATION

Sustaining momentum became the clear challenge as the

project progressed and became more grueling. A huge part of

Fitt’s responsibility was remaining bold and decisive, continually

inspiring the team to unrelentingly pursue its goal and stay

connected to the purpose that the team invented. Encouraging

collaboration and holding

everyone accountable

motivated the team to stay

focused and work hard,

while strengthening their

drive and dedication. She

continually reminded them

that their efforts were all

about making a difference

for patients. “The faster we

could get Brilinta into the

hands of the people who

needed it, the more lives

would be saved,” she says. “We had to do our very best to get

it out the door.”

Engaging top leaders to maintain their motivation was

also a necessity while managing barriers and roadblocks that

inevitably cropped up. Fitt called on the Insigniam Breakdown

Methodology and Toolkit to manage and resolve every issue

as they arose during the process. One particularly challenging

breakdown centered on the sheer size of the submission; the

study report was over a million pages and taxed the limits of the

computer systems and software. “On a regular day, it was overly

complicated to reach the computer support desk,” Fitt explains.

“Because we knew about prior breakdowns, we sought the

support of management and created a task force for swift issue

management, establishing a ‘white glove service’ for technical

support 24-7.”

Predictably, multiple technical breakdowns occurred while

preparing the new drug applications for the U.S. Food and Drug

Administration (FDA) and

the Marketing Authorized

Application (MAA),

which is used in Europe.

“Because we had a backup

plan, we were not delayed

significantly,” Fitt says. “We

sent 12,772 files for a total of

54.3 gigabytes of data.”

Ultimately, Fitt and her

team successfully delivered

the findings of this large

drug development program

on time and on schedule. “The approval of Brilinta ensures

ACS patients worldwide have access to this important medicine,

ultimately saving lives,” she says. “None of us who worked on

this project were the same people after it was complete. We met

the goals and everyone grew a lot as a result of the experience. It

was a personal achievement and it resulted in a lot of professional

development for everyone who touched it.”

2009

2011

12,772 FILES

54.3 GIGABYTES OF DATA

Year Brilinta was approved by the

European Commission

Year Brilinta received FDA approval

The final, realistic breakthrough goal for the Brilinta submission based on

clear, achievable milestones to which the AstraZeneca team could truly commit

Currently, Brilinta is approved by the European Commission and the FDA in

more than 100 countries worldwide

106 DAYS

100 COUNTRIESAmount of material sent to the FDA and

the Marketing Authorized Application

(MAA), which is used in Europe

A HUGE PART OF FITT’S RESPONSIBILITY WAS REMAINING BOLD AND DECISIVE, CONTINUALLY INSPIRING THE TEAM TO UNRELENTINGLY PURSUE ITS GOAL AND STAY CONNECTED TO THE PURPOSE THE TEAM INVENTED.

ROBERT WISEMAN

Q&A WITH

The former CTO of Angie’s List on how he overcame the challenges of technology transformation with one of North America’s fastest-growing online marketplaces.

BY SCOTT BECKETT


Robert Wiseman preaches the ability of technology to impact a company’s culture during a large-scale transformation.


The questions are many: How do CIOs, CTOs, and their peers

better work together to ensure momentum and success? How does

technology change impact a company, and what is on the list of things

companies often do not think about once the trigger is pulled on

large-scale tech investments? And with transformational technologies

also changing customer and market expectations, how do companies

resolve the dilemma of what to invest in?

To answer these highly complex questions, we spoke with Robert

Wiseman, who most recently served as CTO of U.S.-based Angie’s

List, a paid-subscription website containing crowd-sourced reviews

of local businesses to help facilitate transactions with nearly 3 mil-

lion consumers nationwide. He shared his thoughts on these and

numerous other technology-related transformation challenges that

can ultimately lead to a company’s success or failure.

Insigniam Quarterly: Tell us a

little about your background

and key accountabilities.

Robert Wiseman: I have

spent most of my career driving

technical innovation in the travel

industry, holding CIO/CTO/

SVP IT equivalent roles since

2000. I consider myself a Business

IT partner who has led IT trans-

formations and technology strat-

egy at several major companies

resulting in hundreds of millions

of dollars in cost savings, greater

efficiencies through standardiza-

tion, and enablement of product

and business differentiation.

My most recent position was

acting as CTO at Angie’s List

reporting to the CEO. I ran all

technology from operations to

development to architecture and

led a technology transformation

effort migrating from a legacy

.Net platform to a new contain-

erized, cloud-based, fully open-

source solution built on Scala and

Ubuntu Linux.

I.Q.: Considering your

extensive CTO background

working with enterprise

technology, what are

your thoughts on the dilemma that

big companies face today in making

technology decisions?

R.W.: They are very likely building tomor-

row’s headache today. As the ever-increasing

rate at which technology — and also tech-

nology providers — comes and goes, al-

most every technology solution around

today will very quickly become tomor-

row’s legacy system and need to be replaced.

Good CTOs get this. They ensure that sys-

tems are designed with obsolescence in mind

with clean abstraction layers, and they resist the

temptation to tightly couple themselves to any

IN ORDER FOR COMPANIES TO COMPETE, GROW, AND REACH THEIR STRATEGIC HORIZONS, TECHNOLOGY MUST PLAY A LARGE ROLE IN HOW THEY EVOLVE. WHILE TECHNOLOGY CAN TRANSFORM AN ENTERPRISE IN MANY WAYS, IT CAN ALSO STALL AND HANDICAP COMPANIES ENGAGED IN THE EXECUTION PHASE OF COMPLEX ENTERPRISE TECHNOLOGY TRANSFORMATION STRATEGIES.

“


particular technical feature or vendor that might increase the diffi-

culty of switching at a later date. Future competition will inherently

be built on newer technology. If that newer technology provides

them with a competitive advantage that you are unable to leverage

because you didn’t design this way, you may well be putting your

company’s future at risk.

I.Q.: Describe how the CTO and technology team at Angie’s

List previously worked with other C-suite leaders to position

for either ongoing transformation with technology or big

knife-edge decisions?

R.W.: As I mentioned earlier, Angie’s List embarked on a major effort

to replace its legacy Microsoft stack with a containerized, cloud-based,

open-source Linux stack. Similar to a doctor’s Hippocratic Oath (“do

no harm”), our first goal was to make sure that the new platform was

at least as good as the system it is replacing — in addition to ensuring

we delivered on certain Non-Functional Requirements (NFRs) that

guarantee to make it better. Those include faster response times, greater

scalability and resiliency, ease of maintenance, faster time to market, etc.

I.Q.: What are five things that companies underestimate

when it comes to implementing new technology across

the enterprise?

R.W.:1 Complexity. It’s human nature to think that something will

be much easier than it inevitably is. It’s important to solve the

difficult problems first.

2 User acceptance. Getting buy-in from the end users early on

is key.

3 Safety nets. Assume everything will fail and have a good plan

for what to do when that happens.

4 Bubble cost. This is the cost of supporting both the old and

new technology. Understand the size and duration of these costs

and make sure you have a supported plan

to make it through the bubble.

5 Nothing beats experience. Everyone

thinks they can do it better than the next

person, but the one most likely to do it

better is the one that has already done it.

They know where the mines are

and what mistakes not to make

again.

I.Q.: Talk about your build-

for-failure philosophy. Is that

a difficult topic within most

companies to discuss?

R.W.: Ironically, I think that IT

people seem most surprised by

this. I can’t count how many times

I’ve asked an engineer, “What

happens when this fails?” and been

met by an incredulous blank stare.

Technology fails. It always has and always will.

This is more true now than ever as most com-

panies start to migrate their operations to cloud

providers that are financially motivated to offer

lower-cost and therefore probably lower-quali-

ty technologies (hardware, OS etc.). Build your

system right — organic, self-healing, highly re-

dundant, distributed computing, designed for

the inevitability of constant failure that is ob-

vious to IT operations and transparent to end

users — and this shouldn’t be an issue.

I.Q.: Oftentimes the right questions do

not get asked when “the boardroom”

is making broad, sweeping technology

investment decisions. What are some

questions that often do not get asked,

which you recommend every CEO and

their board should answer before a go/

no-go decision?

R.W.: 3 What would you ask if you were in my

shoes?

3 What is the impact to the business and to

our users of stopping the project before it

fully completes?

3 How long and severe is the bubble cost

Technology has a huge impact on the culture of a company, and the human factor is one of the most important aspects to consider — either when making changes or as a reason to make changes.

“

(the cost of running both the new and old systems simultane-

ously) and what is the customer impact?

3 What are the worst-case scenarios and what are we doing to

mitigate them?

3 What is the likelihood that this project will surpass the time and

cost estimates, and what can we do to avoid that if it seems likely?

3 How did you pick this technology? Why is it the best for us?

I.Q.: When a CIO talks with his/her CEO, how do you bridge

tech speak and get buy-in to drive the right decisions?

R.W.: Be able to sell your ideas in each direction. Technical teams will

want to know how this will enrich their careers and/or make them

more productive; your peers will want to know that at a minimum,

they won’t be negatively impacted by this if it fails and, if it’s a success,

they get to share in the upside and glory; but your CEO will mostly

want to know how it will improve the bottom line.

I.Q.: What are some lessons learned? What would you

advise another CIO/CTO on when it comes to leadership,

people, creating change, and being innovative?

R.W.: 3 Lead your teams — don’t try to manage them. Set clear goals

for your leaders to hit and empower them to do so.

3 Be available to your people at all times. If you aren’t, you

become a bottleneck.

3 Success is often the point just short of failure — the trick

is to get as close as you can without crossing that line.

If you’ve just taken over a project, you have a rare honeymoon.


Cherish it and use that time to understand all

the problems you have adopted and come up

with a plan to resolve them. After six months,

you own any problem you haven’t flagged. Get

independent third parties to help deliver objec-

tive expertise.

At the start of any new project, make sure you

have organization-wide support up, down, and

sideways. Each direction will probably require

a different selling point — understand how to

express that clearly and concisely. Respect the

opinions of others. There can be lots of winners

and only one loser, so it’s okay to share.

Make sure you have support to get to at least

a logical stopping point. Stopping halfway may

be worse than not starting.

I.Q.: What are some new, transformational

technologies that companies should

keep their eyes on?

R.W.: An important point to consider is the

trend which existing technologies are follow-

ing in terms of price per com-

putational unit and how — to

quote hockey legend Wayne

Gretzky — we need to go to

where the puck is going, not

where it is. I’ve begun numer-

ous successful projects without

having the end-state technol-

ogy available, as I was confident

that by the time we were ready,

it would be available or I could

build it myself. Examples in-

clude Cloud Computing, Auto-Scaling, Cloud

Brokering, and Off-Loading Air Shopping

from Mainframe to Linux Servers. It’s impor-

tant to view the cost-per-performance trends

of foundational computing technologies like

Five things that companies underestimate

Lead your teams — don’t try to manage them. Set clear goals for your leaders to hit and empower them to do so.

01 COMPLEXITY

02USER

ACCEPTANCE

03SAFETY NETS

04BUBBLE COST

05NOTHING BEATS

EXPERIENCE


hardware, memory, and network bandwidth. In doing so, we see

that historically each has made huge gains and still show little signs

of slowing down.

Based on what we are paying today versus what we will be paying

for the same horsepower, throughput, etc., computing will appear

to be free. We shouldn’t limit ourselves by what something will cost

because cost is a rapidly shrinking barrier.

I.Q.: How does technology impact culture at a company,

and do you feel that companies could do a better job at

evaluating the human factor of technology changes? If so,

what might be some examples of where this has worked

well in your opinion?

R.W.: Technology has a huge impact on the culture of a company,

and the human factor is one of the most important aspects to consider

— either when making changes or as a reason to make changes. Most

people just want to do a good job. They want to feel that what they

do is important and valued as such. Inadequate tools and technologies

can gut an organization and kill its morale.

I’ve had hugely rewarding responses by:

3 Automating mundane manual processes

3 Giving people the right tools, laptops, tab-

lets, software, etc., to do their jobs right

3 Creating on-demand test systems to re-

move forward blockers

3 Upgrading infrastructure to give faster

response times

3 Providing better problem diagnostic tools

3 Establishing rules engines for nearly in-

stant time-to-market changes

3 Allowing people to bring in their own

devices and choose their own tools where

it makes sense

It’s important, therefore, to get continual feed-

back from your teams. Understand what’s stop-

ping them from being great. Fix it and you’ll not

only improve productivity, you’ll put a spring in

the steps of your teams.

BY JOE GUINTO

TECHNOLOGY TRANSFORMATION EQUALS CULTURAL CHANGE As president of Dell Services, Suresh Vaswani has seen the ability of technology to drive a top-to-bottom transformation both internally and for their customers.



uresh Vaswani knows a way businesses can use technology

to help outperform their competitors by a 2-1 margin. It’s

a method employed by some of the top companies in the

U.S. in order to beat their rivals. But as Vaswani, the president

of Dell Services, the global IT services business unit of the

Austin-based company, will tell you, this method is not exactly

a closely guarded corporate secret.

Actually, it’s quite simple: Just invite the chief information

officer to strategy sessions. That was one conclusion of a

report that Dell commissioned the Economist Intelligence

Unit to conduct. The report surveyed more than 500 C-suite

executives from FedEx, Zappos, Verizon, and other leading

companies. It found that companies involving CIOs in setting

business strategy — with CIOs and CEOs meeting jointly —

outperform their peers by that 2-1 margin.

“It’s no secret IT is changing faster than ever before,

and companies and CIOs that take advantage of the latest

technologies to improve business results can have a huge

competitive advantage,” Vaswani says.

Indeed, technology change today can itself be a catalyst for

enterprise transformation — for large-scale shifts in the way in

which workers interact with each other within an organization,

in addition to the way a company and its customers, partners,

and other stakeholders interact. That’s especially true of digital

transformation, which can transform the business models of

companies through mobile platforms, social media, cloud-

based systems, and advanced analytics.

Those kinds of digital transformations may be exciting for

companies and their workers because they come with the

promise of putting an organization on the cutting edge. But

beware. “It’s easy to get caught up in the hype of the ‘new

and emerging,’” Vaswani says. “Successful transformations are

clearly tied to business strategy and are supported by the entire

senior leadership team, not just the CIO.” Leaders don’t have

to understand all the nuts and bolts of new technologies being

adopted, but they do have to know how new technologies will

help them achieve their desired business outcomes.

Vaswani has first-hand experience with this. Not only

has his division aided numerous customers in technology-

led transformations, but he’s also witnessed Dell’s own

S


transformation during his time there. Vaswani joined Dell in

April 2011, initially overseeing global applications and business

process outsourcing services and serving as chairman for

Dell India. In recent years Dell has evolved from a computer

hardware company into the world’s fastest-growing integrated

technology company, providing customers with end-to-

end solutions to meet their business and IT needs. “Our

entrepreneurial culture is one that encourages innovation, so

technology-led transformation comes naturally to us,” Vaswani

says. “We apply the experience we’ve gained from evolving

our own organization to what we deliver for our customers.”

So how do Vaswani and Dell recommend organizations go about technology transformations? Focus on four key areas.

CHANGE THE WAY YOU PERCEIVE THE

IT DEPARTMENT

Let’s start with a definition. Technology transformation,

to Vaswani, means, “To migrate our customers to modern

technology environments so they can react faster, reduce

costs, and serve their customers better. This could involve

moving off a mainframe system to an environment that is

more agile and scalable or helping organizations embrace

the cloud and its many benefits.”

In other words, technology-led transformations are, at their

core, change processes that leverage new technology to make

organizations more nimble. “Transformation efforts are driven

by the need to survive in a world where old models no longer

endure,” Vaswani says. “New business models, new operating

models, and new organizational models are all needed — and

the role of technology is to enable that. But the objective is

not just to lift and shift to faster, better, cheaper technology.

WE APPLY THE EXPERIENCE WE’VE GAINED FROM EVOLVING OUR OWN ORGANIZATION TO WHAT WE DELIVER FOR OUR CUSTOMERS

01


It is to invent and innovate whole new ways to do business.”

That innovation process toward a new way of doing business

can start, appropriately, right in the IT division of a company.

The old way of doing business called for IT divisions to install

and analyze systems. Or, as Vaswani puts it, “keeping the lights

on.” But the new way of doing business requires IT divisions

to be involved with the strategic direction of the company,

and to work across the organization to develop new tools

and systems to better engage with customers. And Vaswani

says that it is imperative that companies now integrate their

IT divisions more into their strategic thinking. IT divisions,

he says, must work across organizational boundaries.

In its aforementioned report, the Economist Intelligence

Unit found that only 46 percent of CEOs think their CIO

understands the business. Given how much more successful

companies who involve their CIO in strategy seem to be, that

represents a staggering disconnect — and a great opportunity.

GET ON THE ROAD TO DIGITAL

Here’s something else that’s not a secret: A number

of companies today are dealing with legacy applications

running on old hardware that costs more and more each

year to maintain. This reality illustrates just one of the reasons

companies embark on digital transformations.

Often, that transformation begins with companies “re-

hosting” their technology applications on more modern

platforms that can handle the increased demands that, say,

starting a social media conversation with tens of thousands

of customers would have placed on older systems. This

kind of shift can also save money. For instance, Deutsche

Rentenversicherung (DRV), a German federal pension

provider, adopted Dell’s mainframe re-hosting technology

after the German parliament required it to cut operational

costs. Dell has also worked with federal agencies in the U.S.

to achieve similar cost savings through re-hosting.

Sometimes, though, it’s speed that matters most. Zurich

Insurance U.K., one of Dell’s customers, recently made a

change from outdated hardware and applications to a new,

social media-driven web system and mobile platform. The

result was dramatic: New product development cycles were

cut from 12 months to just eight weeks. “Digital,” Vaswani

says, “is completely changing development cycles.”

Whatever the reason for the change, when companies

adopt new technology, that technology has to be more

effective than the old technology and fit into the corporate

strategy. It’s not about investing in the best technology in the

world, it’s about investing in the technology that will deliver

the kind of solutions that are right for a given organization.

“Today, all roads lead to digital,” Vaswani says. “From business

strategy to execution, digital is a part of everything we do. The

truth is, however, that instead of striving to simply transform

with this technology, the best companies combine digital

activity with strong leadership to create innovative business

models, processes, products, and services.”

In that way, technology transformation is like any other

kind of business transformation. The change needs to be

embraced from the top of an organization down through the

ranks, even if that requires a change in mindset. “Getting team

02


member and frontline leader buy-in with technology-led

transformations is critical,” Vaswani says. “Whenever possible,

it helps to have team member engagement and involvement

from start to finish. It is hard to ask people to take a journey

with a business transformation or adopt new technologies

into their working environment without inviting them

to participate in the process. This is especially true with

processes and technologies that directly impact how team

members may do their work day-to-day or how they then

engage with customers.”

Take the recent U.S. healthcare reform. When the U.S.

Congress passed the Affordable Care Act (ACA) in 2010,

the health insurance industry knew the status quo would

eventually change — dramatically. What wasn’t known was

how much or exactly what the “new normal” would be.

One clear seismic shift, however, was that by 2014 the ACA

would require a big expansion of a retail market for millions

of consumers wanting to buy coverage directly from health

insurers, instead of the long-standing U.S. tradition of getting

it through their employers.

DELL HAS SHIFTED FROM MAINLY A COMPUTER HARDWARE SUPPLIER TO AN INTEGRATED TECHNOLOGY COMPANY THAT DELIVERS END-TO-END SOLUTIONS.


Health Care Service Corporation (HCSC), the largest

customer-owned health insurance firm in the U.S. with 14

million members, worked with Dell to better engage and

educate consumers and expand its social media outreach.

HCSC needed to use social media to become a social business.

Lynde O’Brien, Director of Electronic Media Strategy,

HCSC, said, “I wanted to work with Dell’s social media

experts who had actually built what we were looking to

build, not an agency that hasn’t actually been in the trenches

and done this.”

Dell’s solution aligned HCSC’s social and business

objectives while improving its social community and content

strategies — expanding reach, increasing retail leads by almost

383 percent over the prior year, boosting video views by 963

percent and website traffic from those views up by 21 percent

in a year, and improving social media analytics and reporting

to better gauge business impact.

According to O’Brien, “It was exactly what we needed

to push forward in our evolution from communicating via

social channels to becoming a social business.”

FIND YOUR TYPE

The Early Adopters. The Mainstream. The

Cautious. Those are the three types of organizations Dell

finds itself working with today.

The Early Adopters are companies who are excited to

bring the newest technology into their business — if they

see the future potential in that technology. The Mainstream

prefers to wait until the bugs in new technologies have been

worked out and their peer companies are using it effectively.

The Cautious worry that adopting new technologies might

disrupt their current business, meaning they’ll lose more

than they’ll gain from change. To effectively partner with

all three of those types, especially in the newer area of

cloud services, Dell has focused on providing a consultative

approach that helps companies know what their actual return

on investment will be.

But they also discuss in detail how any organization’s

business strategy might be affected and improved by

implementing cloud-based technologies. “For the greatest

project success,” Vaswani says, “IT leaders consider cloud

not just as a technology but as an enabler to better business

outcomes. Cloud creates an opportunity for IT leaders to

co-innovate and co-invest with the business, and shift from

being an infrastructure-centric to a service-centric provider.

To do so is as much a financial and cultural discussion as a

technical one.”

Vaswani says it doesn’t matter if top executives understand

the technical intricacies of how cloud technology works.

It’s more important, he says, that they know the strategic

intent of moving business to the cloud and the capabilities

implementing cloud services can have on helping a

company achieve the successful business outcomes it wants.

“If a company is on a transformational journey, leaders need

to understand the strategic themes of that journey and

how technology (among many other things) will address

those themes,” Vaswani says. “Leaders must know — or be

mentored by the CIO on — sufficient information on

what they are trying to accomplish, and the role technology

can and should play in making it happen. Knowing that,

then they also know the potential challenge and disruption

these same technology capabilities can and will be to the

status quo.”

A potential pitfall of technology transformation is

when companies adopt new technologies that end users

don’t understand well enough to leverage all the potential

capabilities. “Or even worse,” Vaswani says, “is when a

technology solution is simply not utilized because of poor/

ineffective change management during implementation.”

AVOID COMMON MISSTEPS

Vaswani says there are several ways leaders can

avoid some common missteps when undertaking large-

scale technology transformations. Here are four enablers

for success:

03

04

A POTENTIAL PITFALL OF TECHNOLOGY TRANSFORMATION IS WHEN COMPANIES ADOPT NEW TECHNOLOGIES THAT END USERS DON’T UNDERSTAND WELL ENOUGH TO LEVERAGE ALL THE POTENTIAL CAPABILITIES


01

02

03

04

Know and clearly define your

business objectives.

Figure out how technology

change will affect your people

and your customers.

Outline any new processes

or policies that need to be

adopted along with new

technologies.

Technology transformation

is not a one-time deal.

THREE: Outline any new processes or policies that need to be adopted along with new technologies.

“Organizations that move a system or business process to

the cloud, for example, need to examine security protocols

for transferring and protecting sensitive information,” Vas-

wani says. “Companies that implement new social media

tools need to ensure employees know what the usage poli-

cy is and how to handle negative or inappropriate dialogue

before it happens. Every major technology disruption,

no matter how positive, has a resulting impact on process

which needs to be carefully planned for.”

FOUR: Technology transformation is not a one-time deal. “Given the current pace of change, organizations need

to continuously evaluate their IT capabilities, look at new

technologies that might help them better serve customers,

and institutionalize an ongoing process to do so,” Vaswani

says. “This is the hallmark of an open, innovative culture

that gets ahead by constantly pushing the envelope in terms

of what might be possible.”

ONE: Know and clearly define your business objectives. “People sometimes get excited about new technology with-

out fully considering how their organizations are going to real-

ize long-term business value from it, what the extent of the

value will be, or how it will be measured,” says Vaswani. “These

are foundational issues that need to be addressed up front.”

TWO: Figure out how technology change will affect your people and your customers.

“Employees may need to be re-trained to adapt to and

leverage the new technology,” Vaswani says. “In other cases,

new employees with unique skill sets may need to be hired.

The trick is planning for this need before the transforma-

tion is underway so you can derive value immediately.

Similarly, leaders need to develop a clear plan for ensuring

that any changes to the customer experience are positive

and seamless. How many times have we heard about a new

service, application, or feature that was poorly received be-

cause customers were not properly considered or commu-

nicated to as part of the rollout?”

FOUR ENABLERS FOR TECHNOLOGY TRANSFORMATION


THE HEALTH 2.0 REVOLUTION

Rapid advances in technology are upending traditional health care models.

BY CHRIS WARREN


It’s not unusual in the least to hear people in Silicon Valley

cheerlead the upending of even the biggest of industries.

From banking to real estate to retail, disruption fueled by

innovation and technology is at the core of the valley’s

ethos. But what made this call for disruption in health care

so notable was the person who made it. Far from being a

scrappy entrepreneur, Tyson is the chairman and CEO of

Kaiser Permanente, the health care consortium with $50

billion in annual revenue and a network of 19,000 physicians

serving nearly 10 million patients in eight states and the

District of Columbia.

Nor is Tyson the only health care executive who has

mounted the Health 2.0 stage to cheer on tech disrupters.

At an earlier conference, Mark Bertolini, chairman, CEO

and president of health insurer Aetna, cheekily prefaced his

presentation by stating, “I’ll show you some pretty cool new

technology that we’re using to empower health systems to

put insurers out of business.”

To put it mildly, the CEOs of

Aetna and Kaiser Permanente

were not the sort of speakers who

addressed the first Health 2.0

conferences in 2007. Launched

with the mission to identify

and harness so-called Web 2.0

technologies — think cloud-based,

user-friendly software platforms

like Facebook that enable social

sharing — to engage and improve

health care for practitioners and

patients alike, Health 2.0 originally

attracted mostly tech companies

such as Google, Microsoft Health,

and WebMD. “It wasn’t the health

care establishment paying attention

at all,” says Indu Subaiya, co-chair

and CEO of Health 2.0, which

today hosts a series of worldwide

conferences that bring together

health care and tech leaders and runs an intelligence service

that tracks thousands of new health technology companies.

“Slowly, over the years they learned if they weren’t paying

attention to this, they realized their business would

fundamentally change for the worse.”

Obviously, much has changed since those first conferences.

There are already countless examples of technology altering

and improving the patient experience and health care

he scene would have been unimaginable as little as a

decade ago. At this past fall’s Health 2.0 conference in Silicon

Valley, Bernard Tyson stood on the stage and exhorted audience

members to fundamentally upend an industry. His industry.

“Many of you are hoping to innovate and disrupt the health care

industry. And I am actually looking forward to your great success

in totally turning the health care industry upside down,” Tyson

told the attendees, a mixture of big and small tech players as well

as representatives of a cross-section of health care companies.


The charge to integrate Health

2.0 is driven by a desire to improve communication, information, and ultimately quality of care, between

doctors and patients who are tapping into the

latest technologies.

delivery. In many ways, says Subaiya, the technology that

is making an impact follows the classic disintermediation

model that, in the past, has allowed people to make their own

plane reservations without a travel agent and manage their

savings and investments without a banker.

“There are a whole number of companies that call

themselves the Uber of health care, helping make a connection

to a doctor faster and easier,” she says. She cites the example

of Doctor on Demand, which enables consumers willing to

pay a small fee to have a 15-minute virtual consultation with

one of the thousands of physicians in the company’s network.

“That concept of having immediate access to a doctor is

going to be radical in terms of changing things.”

Subaiya believes patient empowerment via technology

will only grow in the future and, in many instances, will

be key in helping health care providers improve care. For

instance, patients with sensor-enabled smart phones will do

everything from monitor their heart rate and blood pressure

to administer a high-quality EKG or eye examination.

“Companies like Ginger.io use the phone to track whether

you are at risk of depression or suicide because it knows if

you left your house over a period of days,” she says. When

all of this patient data being generated is shared with doctors

and nurses, it can be acted upon to alter and improve care on

a day-to-day basis. Technology then instantly makes patients

an integral partner in their own care.

But individual data generated by patients represents a

single aspect of technology’s promise for improving health

care delivery and the patient experience. Kaiser Permanente

is just one of many providers to use data analytics to examine

and alter its approach to what’s broadly known as population

health management. “Whether it’s a hospital administrator or

doctor or health plan or executive, it’s impossible to look at

data from thousands of people to find patterns and say, gosh,

of all the patients I have with diabetes, 40 percent aren’t where

they need to be. What can I do?” says Subaiya. “Or, if you’re

a health plan you can see that doctors in your network are

prescribing services that are costing a lot of money but aren’t

delivering results. Tools that allow mass data examination

and data visualization will become increasingly important.”

The examples go on and on — witness the Mayo Clinic’s

use of iPads to monitor their heart patients as they make the

transition from the hospital to their homes, or clothing that

tracks people’s heart rates, breathing, and calories burned.

While exciting in many ways, the advent of so much

technology poses real challenges to health care leaders charged


with identifying and implementing tools that will provide

genuine benefits. “Executives face information overload,” says

Subaiya. “They know there’s a lot of innovation out there,

but they just don’t know where to begin.”

One place to start, she says, is with some rigorous self-

examination. What exactly do you

want technology to accomplish?

What problems can it solve? How

does it help doctors and nurses

provide the kind of care they want

to deliver? “A huge piece of advice

is to look for inefficiencies in your

system that frustrate employees

and consumers,” she says. At MD

Anderson in Houston, notes

Subaiya, there is a small department

of innovation whose mission is to

observe how the business runs and

identify hurdles and irritants that

could be addressed with technology.

“Before you rush out to buy the

latest new technology, study your

own culture and create a department

that doesn’t necessarily need to be

part of the traditional org chart and

that reports very high up in the

organization,” she says.

Actually pinpointing technologies

that can be helpful is also a challenge

leaders face. Fortunately, there are

plenty of avenues to search out

what is new. Subaiya recommends

executives take a close look at what

early-stage investors are supporting

as well as the kinds of companies that

are working with digital health incubators, including Rock

Health and Healthbox. Subaiya says it can also be helpful to

keep an eye on the grants the federal government awards to

innovative health technology startups. But don’t be limited

by geography. “Tomorrow’s innovative startup might come

out of Bangalore, India, not Silicon Valley,” she says. “Educate

yourself and be open to innovation and don’t expect it to

come to you.”

Wherever the technology idea comes from, though, Subaiya

believes executives need to be clear that there’s something

more substantial there than just an idea. “You have to examine

technologies carefully for data. Have they been tested in

situations that resemble your own environment?” she says.

Companies, including Health 2.0, offer vetting services so

that leaders can be sure that technologies have gone through

the appropriate validation steps and been tested with actual

patients. When a promising technology is identified, Subaiya

suggests experimenting with it in your company. “Executives

and leaders need to be willing to

experiment in small ways. You don’t

have to go crazy, you don’t have

to make a big splash. You can try

something in small groups and share

what you learn.”

There are two other major

temptations Subaiya says are

important for leaders to resist

when evaluating and implementing

technologies. One is the notion that

your operations are so unique that

only a custom-made solution will

get the job done. “Nothing frustrates

entrepreneurs more than having a

good product and going into a

hospital or insurance company and

having them make it completely

their own in a way that doesn’t allow

you to share data and connect with

the rest of the health care system,

which is so important in health,” she

says. “When making a decision about

implementing a solution, really ask

yourself if you have looked out there

to see if there is something that is

close enough that exists? We see so

much reinvention of the wheel, it’s

staggering.”

In a more general sense, Subaiya

insists that executives considering health care technologies

need to embrace a big-picture perspective. “Don’t make

shortsighted decisions around technology that promise

you market share at the risk of compromising quality,” she

says. For instance, Subaiya would warn against embracing a

technology that would limit doctors to referring patients

only to specialists within their network. “While that is a tool

that can help an executive technically claim they kept dollars

within their system, it may not be a tool that helps patients

get the best care,” she says. Instead, promoting the greatest

levels of transparency and choice should guide executives.

“Because at the end of the day, that will drive better outcomes

and allow you to have the reputation you want to have.”

“THERE ARE A WHOLE NUMBER OF COMPANIES THAT CALL THEMSELVES THE UBER OF HEALTH CARE, HELPING MAKE A CONNECTION TO A DOCTOR FASTER AND EASIER. THAT CONCEPT OF HAVING IMMEDIATE ACCESS TO A DOCTOR IS GOING TO BE RADICAL IN TERMS OF CHANGING THINGS.”— INDU SUBAIYA


Cone Health’s integration of a powerful electronic medical records system is bringing true transformational change.

BY LIZ WILLDING

COMMUNICATION TRANSFORMATION

The administrators at Cone Health knew they were in need of transformational change. A large North Carolina

network with six hospitals, a plethora of outpatient centers,

and more than 75 physician practices, Cone recognized the

necessity of a technology-driven solution to address the reality

all providers on the frontline of health care have always known

— the strong, vital correlation between access to lifesaving

information and quality of care. Tapping into this information

to understand the nuances of a patient’s condition can make all

the difference, particularly in an emergency situation.

Understanding the shortcomings of the current systems

and taking action on resolving them wasn’t nearly enough.

While it’s true that broader use of IT holds the potential to

help clinicians connect the dots and make better decisions,

effectively harnessing today’s sophisticated electronic medical

record (EMR) systems — and the people behind them — is

an outcome that doesn’t come about without difficulty. Where

technology leaves off, the human condition picks up and raises

a number of challenges, from crafting well-mapped workflows

to training physicians and other users to flex

the system to its highest potential.

Steve Horsley, Cone Health’s Chief

Information Officer, understood these

potential impasses early on and has smartly

taken the long view regarding successful IT

integration on its new EMR system. From

the outset, he says, “We knew we were

dealing with much more than an IT project.”

Horsley notes that progress has happened “in

stages over time,” crediting the considerably

evolved state of their current EMR system

to “an organizational initiative for transformational change.

Organizations that just make this an IT project will fail.”

LETTING LEADERS TAKE CHARGE

Cone Health decided early on to put the responsibility for

technology-enabled transformational change in its rightful place

— with site presidents and their management teams. “We already

had done culture work with Insigniam in our organization that

helped create strong accountability and better teaming between

work groups,” says Horsley. “That coincided with our next-

generation EMR development and implementation. We had a

foundation for transformation that we were able to build upon.”

The employees and leaders of Cone Health knew that, while

they may have had mixed feelings about the new technology,

delivering exceptional, leading-edge care depended on them

embracing change at all levels. “The right kind of culture is

critical and essential for this kind of transformation,” says Shideh

Sedgh Bina, Insigniam’s co-founder. “Unless the culture has

very strongly aligned leadership that has in turn mobilized the


workforce to build a bold, inspiring future, established deep tracks

for cross-functional collaboration, and instituted clear structures

for accountability and execution, the implementation of a game-

changing technology like an EMR system is doomed.”

Putting structure and form to the foundation began by

creating Site Planning and Adoption Councils (SPACs) to drive

organizational leadership and change management. Horsley says

it was the initial work through these cross-functional councils

that drove the agenda, leading to a true change management

strategy. “We realized that we had to help everyone understand

what would be different if the strategy was to be successful,”

Horsley states. “We also knew that the organizations had to own

their part of it and celebrate their wins.”

BRINGING PHYSICIANS INTO THE FOLD

A key variable to make the strategy work was winning

physician support. The changing workflows were dramatically

different for them, and it was clear that their questions and

concerns had to be addressed. The biggest changes were in the

areas of order entry and documentation, where “it’s quicker to

scribble on a piece of paper or give a verbal order, versus taking

the time to enter it online,” Horsley explains. “When you are

trying to get information in a structured way, it changes the

burden. Training is a huge part of proactively answering these

questions that arise.”

However, from the first “go-lives,” it became clear that to get

more physician engagement they needed to reduce physician

time in the classroom. For a practicing physician, time in a

classroom not only means a reduction of their incomes, but

more significantly, it means being unavailable for urgent patient

needs. To accommodate the physician schedules, they increased

what Horsley calls “training at the elbow,” coaching physicians

as they go about caring for patients. Meeting these demands

called for a new team of health informatics professionals, which

Cone calls Informaticists. Essentially tech-savvy clinicians, they

provide hands-on training, while also optimizing workflows

and managing system redesigns. Two operational hurdles that

immediately landed on their radar involved changes in the way

appointments were scheduled for surgeons and more structured

systems for increased data input that utilized system-wide voice

dictation software. The Informaticists stressed the integrated

nature of the EMR system while helping the physicians feel

comfortable with an organized, logical process flow to view

and enter information. Just as importantly, ongoing training

to reinforce these changes and compensate for workflow

improvements has eased the real-time implementation of

processes during the transition.

Cone’s intensive effort to help its physician population

become more efficient on the EMR is working. In a recent

survey, 33.14 percent of responding physicians indicated that

they are “doing fine” using the new system, with another 43.02

percent responding that they are “comfortable, but need to

improve their speed.” Another 20.35 percent say they “have the

basics down, but need help,” while only 3.49 percent indicated

they are “struggling with the basics.”

For the approximately 25 percent who still need more help,

Horsley says Cone has already launched what it is calling an

“optimization project.” This involves more “at the elbow

support” to assist providers in becoming more comfortable with

the system and looking for ways to streamline their workflows.

THE PAYOFF FOR THE PATIENT

The hospital began seeing the payoff of improved patient

care almost immediately upon launching its broader EMR

implementation. “From day one of launching the EMR system,

we were preventing medical errors,” he explains, citing an example

where the system alerted a nurse to a patient’s medication allergy,

despite it being missed by other means. “Fortunately, the bar-

coding system flagged the error, prompting the nurse to contact

the physician and receive new orders.”

Similarly, the health information exchange component

available in the new EMR system also has proved particularly

helpful in Cone Health’s emergency departments (ED). “We

are able to get records from other health care organizations

when a patient presents in our ED, which helps us make better

decisions,” he explains.

CONTINUING THE JOURNEY

While Horsley says it is gratifying to see the strides that his

hospital system has made through the broader use of IT, he has a

clear picture of the challenges that lie ahead, in particular around

revenue cycle management. “We need to change old processes to

optimize the new system,” he explains. “You can’t lay technology

over poor processes and expect to get good results. They need

to be overhauled.”

The irony, he adds, is that revenue cycle, while not directly

connected to patient care, “does impact how patients feel

about us.” This impression isn’t always positive given poor cost

estimating and multiple bills for services. “We are consolidating

where we can, but it is a lofty problem,” he says. “Billing systems

for a lot of the services are separate.”

As the health care industry continues to rapidly evolve, Cone

Health has built a sturdy foundation based on IT integration

— with the understanding that the process is still in its infancy.

“This is just the beginning of more transformation to come,”

Horsley states. “This is not the end game. This is the beginning.”


Are you serious about creating a business environment and corporate culture that are positioned for success? Let’s talk.

BY KATERIN LE FOLCALVEZ, CHRISTINE FLOUTON, AND SHIDEH SEDGH BINA

BUSINESS RESULTS DEPEND ON MANAGING THE NETWORK OF CONVERSATIONS


What is a company? By definition, it’s

a bunch of people working

in a bunch of buildings who

make a product or offer a service.

Right? Wrong…

British Airways, for example, is a company that comprises

numerous facilities, thousands of airplanes, and tens of thousands

of people, all of whom offer you the opportunity, for a price, to

go from Point A to Point B. But Southwest Airlines does the same

thing. Like British Airways, Southwest has planes and hangars

and office buildings and gate agents and baggage handlers and

flight attendants and pilots working to get you somewhere in

exchange for your money. Both British Airways and Southwest

are in the same business of air transportation. But they’re not

the same.

No two companies, organizations, or enterprises are the same,

no matter how similar their operations. And the differences are

both bigger and more subtle than having different work uniforms,

or the color of the company logo, or even the key operational

strategies. The big — and small — differences between

organizations come down to its network of conversations.

A premise of our work at Insigniam is that any company is

constituted by a network of conversations. All day long people

are speaking and listening to others. They’re answering emails.

They’re talking in the hallways. They’re writing and reading

reports. They’re having executive meetings. They’re meeting

with clients. They’re sharing and receiving information. All of

that, whether it is face-to-face or written, is part of the network

of conversations within that organization.

Business gets done through these conversations — when

they’re effectively led and managed, the business performance is

remarkable. Business grinds to a halt through these conversations

when they’re ineffective. Either way, the very manner in

which organizations exist and move emerges as this network

of conversations develops. Culture also emerges from these

conversations.

And there are cultural consequences for failing to manage

the network. Tony Hsieh, the CEO of Zappos, says that when

LinkExchange, one of his earliest start-up companies, began to

grow rapidly, he lost track of the network of conversations the

larger staff was having, and in so doing, lost control of the culture.

“One of the things that we didn’t know to pay attention to at the

time was the company culture,” Hsieh told CNBC. “So as the

company got bigger and bigger the culture kind of deteriorated,

and that’s actually why we ended up selling the company.”

As Hsieh’s example shows, it is essential for leaders to pay

attention to the network. We believe that leaders are accountable

for managing the network of conversations in their organizations.

That doesn’t mean trying to exercise some kind of Orwellian

control over what’s being talked about in your company. It also

doesn’t mean simply taking an active interest in “corporate

communications” — the formal messaging composed in the

C-suite and disseminated through the ranks. And it doesn’t mean


simply being a great communicator as a leader. The network

of conversations is about more than what leaders say. It’s about,

at all levels, what is being said in an organization, what is not

being said that probably should be said, and most importantly,

what is being heard.

In a large organization, it’s a challenge to manage that entire

network of conversations. But leaders should spend time

developing a sense for it and helping to foster an effective

network. A well-managed network of conversations will clearly

communicate messages about the organization’s shared values, its

expectations, its principles, its mission, its strategies, and a clear

picture of the future for which everyone ought to be striving.

Talk is not cheap. And whether that talk is written or verbal,

internal or external — brand management is an example of the

function of the external network of communications — leaders

need to make a serious time investment in managing it. Like

an actor who has greater power in their craft when they can

play a range of diverse roles, we find that the most powerful

organizations feature a diverse range of conversations that leaders

are effectively managing. We have identified the five types of

conversations we believe must be present in any organization.

CONVERSATIONS THAT BUILD RELATIONSHIPSConversations that build relationships give people an

opportunity to get to the heart of what matters to them and to

understand commitments and concerns of the people they’re

working with.

One way executives often do this is by having “coffee talks”

with small or large groups of randomly selected employees.

The talks are a chance for workers to tell leaders whatever they

want to discuss, and for leaders to share some general insight

into where the people in the company stand.

In the 2012 book, Talk, Inc., the authors say James Rogers,

when he was CEO of Cinergy before it became a part of

Charlotte-based Duke Energy, began a series of discussions

modeled on the “coffee talk” concept. He held his “listening

sessions” with as many as 100 participants from different parts

of the company. At one such session, a worker told him about

an issue with uneven compensation in one division, something

Rogers could fix but that he thought might otherwise have

taken forever “to bubble up in the organization.”

THE TAKEAWAY//All results are built on a foundation

of relationships. The bigger the foundation, the bigger

the opportunity for results.

CONVERSATIONS THAT GENERATE NEW POSSIBILITIES OR NEW INSIGHT

People talk to each other sometimes not because they have

any specific agenda, but just because they enjoy conversation.

Organizations should seek to foster those same kinds of

discussions.

Recently, the C-suite leaders at one of our clients met to


talk about a change in direction. Although their bottom line

numbers were good, they believed their industry was moving

in a new direction, a new normal so to speak, and that in time

— perhaps five years or so — they would be left behind if

they stuck to business-as-usual. As one of them put it to us,

“We saw a freight train coming our way.” So for months the

executives discussed and speculated on different ideas about what

might be the boldest, most inspiring future they could pursue.

They brought in non-executives to measure the appetite for

change within the organization. They engaged representatives

from different categories of their workforce to talk about what

would be possible. They paid for new market research reports and

poured over the resulting data. In other words, they talked among

themselves, to others, in person, by email, in reports, by phone,

et cetera. They explored possibilities without driving to an

immediate commitment. As they engaged in these various and,

at times, divergent ideas, a common view of a very bold, game-

changing future direction naturally emerged. This common

platform became the basis of a powerful new strategy that took

them off the tracks of being run over by the freight train to

driving the train in a new direction — and thrust them ahead

of competitors in a relatively short time frame. In the months

after they launched the new strategy, they saw an immediate and

significant uptick in their financial measures.

THE TAKEAWAY// All conversations about the

business don’t need to end in a commitment to action.

Some conversations that deal with possibilities tackle

huge challenges. Others deal with smaller changes

— perhaps signing a new client, or making a minor

adjustment to a product or service. Whichever it is, the

key is to be sure and have conversations that create

and explore new possibilities to help people see the

world and their business differently. This will smooth the

path to new and more effective actions.

CONVERSATIONS THAT DEAL WITH OPPORTUNITIES

These kinds of conversations take something that is aspirational

and try to make it feasible. They take speculation and create a

pathway to make it actionable.

At one of the companies we worked with, employees told

us that executives were so focused on present results and on an

aggressive stock buyback program that they were not investing

in the future. Since the employees wanted to commit to a long-

term relationship with the company, they worried whether

leadership was not prepared to commit to them in the same

way. When we surveyed employees and found out that this was

the conversation that was going on, leadership was shocked.

The truth was that the stock buyback program was intended to

solidify the company’s future and that other types of investments

in the future hadn’t changed at all — in fact, they had increased!

In need of a solution, the CEO and his direct reports then

took the responsibility to manage the network of conversations

going on about the future. They more clearly communicated

the investments the company was making and brought a larger

number of workers in to share in the development of those

investments so that conversation could more easily spread

throughout the company.

THE TAKEAWAY// We see the world in how it is

framed for us or how we frame it for ourselves. We

make assumptions. And bad assumptions can clog

up a company’s network of conversations. To gain

commitment to new aspirations, the people you lead

must also see clear pathways to accomplishing those

aspirations.

CONVERSATIONS THAT GENERATE ACTIONThis kind of conversation asks something like, “Who is doing

what and by when will it be done?” It’s self-explanatory in

a sense. You’re talking with a very specific purpose — to get

something done or to ensure that something has gotten done.

But this conversation also provides a good example of how

the network of conversations builds on itself. Every leader has

to ask these kinds of questions of people. But suppose you spin

that question to this: “Who was tasked to do this and when was

it scheduled to be done?” Then suppose you haven’t had effective

conversations about relationships (you don’t know what values

are shared among your group), possibilities (you never explore

different ways of thinking or talk just to talk), or opportunities

(your organization is all about today’s tasks and never about

making other ideas into reality). What happens when you get

to an action-based conversation and the action didn’t happen?

What happens when someone failed to perform? That resulting

conversation — if you don’t know each other, trust each other,

and share some bigger vision of the future — devolves into a

blame game. “It’s his fault.” “She messed up.”

THE TAKEAWAY// To avoid blame that causes

bottlenecks, conversations that generate action must

be held in the context of conversations that have built

relationships and explored and attempted to create

new possibilities and opportunities. Don’t assume

accurate and fair things are being said to people all the

time. Actively manage the network of conversations


to learn what is being said and what is being heard

and to keep the dialogue flowing as accurately and

cooperatively as possible.

CONVERSATIONS THAT UNCOVER BREAKDOWNS AND RESOLVE THEM

Every organization has problems, challenges, and failures. In

too many companies, when things go poorly, people hide. They

deflect blame. They give up altogether.

But we have a saying: breakthroughs are really just a series

of well-met breakdowns. Look at what happened at GM. The

300-page report that details the company’s ignition switch

failures shows that there were no conversations taking place

about breakdowns. Culturally, this was simply not part of GM’s

network of conversations. The report repeatedly states that

cultural issues convinced employees to remain silent about safety

issues and then prevented managers from taking responsibility

for those issues once they occurred. In GM’s case, failing to

foster that kind of conversation was a life-and-death issue. In

most companies it won’t be. But it’s still serious. And leaders are

the ones most responsible for embracing and even beginning

the conversations that uncover why something went wrong and

how it can be corrected.

THE TAKEAWAY// As with conversations that generate

action, conversations that uncover and resolve

breakdowns can only be effective when a larger, open,

and honest corporate dialogue has been established.

Make it popular to illuminate breakdowns and frame

them as milestones along the way to aspirations, not

problems that are obstacles. Otherwise, it’ll be all about

blame and not about resolution.

BRINGING IT ALL TOGETHEROne of our clients, a highly unionized firm that paid its workers

the best wages in their region, called us in when trouble was

brewing between management and workers. In spite of the good

level of financial compensation throughout the organization,

workers and leaders were not getting along. At its core, the issue

was about loyalty. The workers believed leaders were not loyal to

them. When a new pay-for-performance system was rolled out,

a worker had asked the former CEO in a meeting with union

workers, “What about loyalty?” The story quickly circulated

that the former CEO had responded to that loyalty criticism by

saying, “If you want loyalty, buy a dog.” The workers then often

complained about being considered in the same class as dogs.

The company addressed these tensions in many ways, one

of which was to start simple dialogue that asked leaders and

workers what they valued. In doing so, they were having

the very first kind of conversation that we’ve discussed, a

conversation about building relationships — a conversation

that’s fundamental to the other things going on in the broader

network of conversations. These discussions brought to light that

the workers were putting up with some

undesirable work practices for the great

pay because of a strong commitment

to providing well for their families. The

undesirable work practices were ways of

handling overtime, holiday scheduling,

and environmental stressors that ended

up actually diminishing their quality

of family life. During these discussions,

the managers realized that they shared a

common commitment to family with

the workers.

That awareness led to discussions around “creating a workplace

where families thrived.” To realize that possibility, employees and

management together established a set of opportunities that

included an annual family picnic. They also set up an annual

awards ceremony to acknowledge and recognize outstanding

job performance — an event they hoped would communicate

the company’s loyalty to its workers. A few simple adjustments

to their practices for scheduling eliminated the factors in the

environment that were triggering stress.

In the end, both of these events cleared a path for more honest

conversations between the formerly fractured parties. And here’s

our favorite single example of how that happened. At the first

of the award ceremonies, one of the workers went up to the

CEO and said, “I was at that meeting where the story came

from about (the former CEO) telling us to buy a dog. I don’t

know where that rumor came from. He never said that about

us — he used that phrase about another topic.”

TALK IS NOT CHEAP. AND WHETHER THAT TALK IS WRITTEN OR VERBAL, INTERNAL OR EXTERNAL — BRAND MANAGEMENT IS AN EXAMPLE OF THE FUNCTION OF THE EXTERNAL NETWORK OF COMMUNICATIONS — LEADERS NEED TO MAKE A SERIOUS TIME INVESTMENT IN MANAGING IT.

GREAT LEADERSHIP, A GREAT ORGANIZATION & A GREAT PERSONAL LIFE

The four ways of being that create the foundation for

BY WERNER H. ERHARD AND MICHAEL C. JENSEN

LEADERSHIP

REVIS

ITED:

ONE OF T

HE MOST W

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INSIGNIAMQUARTERLY.

COM’S HISTORY IS

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TO IM

PACT Y

OUR APPROACH TO

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SHIP AND LIFE

.

In this paper we argue that the four ways of being we identify as

constituting the foundation for being a leader and the effective

exercise of leadership are also the the foundation for an

extraordinary organization and the foundation of an extraordinary

personal life.

We start with a brief overview of each of these four foundations

before going into an expanded discussion of each.


AN OVERVIEW

è Being Authentic

Being authentic is being and acting consistent with who you

hold yourself out to be for others, and who you hold yourself

to be for yourself. When leading, being authentic leaves you

grounded and able to be straight with others without the use

of force.

è Being Cause In the Matter of Everything In Your

Life

Being Cause in the Matter is a stand you take on yourself and

your life. A stand is a declaration you make, not a statement of

fact. Being Cause in the Matter is viewing life from and acting

from the stand that “I am cause in the matter of everything in

my life.” Being willing to view life from this perspective leaves

you with power. You are never for yourself a victim.

è Being Committed to Something Bigger than

Oneself

Being committed to something bigger than oneself is the

source of the serene passion (charisma) required to lead and to

develop others as leaders and the source of persistence (joy in

the labor of) when the path gets tough.

è Being A Person or an Organization of Integrity

In our model, integrity for anything is the state of being

whole, complete, unbroken, sound, in perfect condition1. For

a person and any human organization, integrity is a matter of

that person’s word or that organization’s word being whole

and complete — nothing more and nothing less. Integrity is

required to create the maximum opportunity for performance

and quickly generate trust.

A WORD ABOUT VALUES

In our discussion here we are not concerned with values

— that is, we are not concerned with what is considered good

as opposed to bad, or right as opposed to wrong. We advocate

these four principles not because they are “right,” but simply

because they are in each individual’s personal self-interest and

in each organization’s self-interest. These insights into the actual

nature and function of the four aspects of the foundation for

great leadership, great organizations, and a great personal life

create workability, trust, peace, joy, and private and social value.

They provide a path for individuals, organizations, and societies

to realize much of what people generally think ethics and

morality produce. And, if we look at the state of the world

around us, obviously that latter path has not worked.


Dr. Michael C. Jensen is the Jesse Isidor Straus Professor of Business Administration, Emeritus at Harvard Business School. He has played an important role in the academic discussion of the capital asset pricing model, stock options policy, and corporate governance.

Werner H. Erhard is recognized worldwide as a business, management, and humanitarian leader. He has consulted for numerous corporations and charitable and governmental agencies.

FOUNDATION ONE: BEING AUTHENTICBeing authentic is being and acting consistent with who you

hold yourself out to be for others, and who you hold yourself

to be for yourself.

Surprisingly, there is nothing authentic about any attempt

to be authentic. Any attempt to be authentic on top of our

inauthenticities is like putting cake frosting on cow dung,

thinking that will make the cow dung go down well. In any

case, the attempt to be authentic is a put on and therefore

inauthentic.

One cannot pretend to be authentic. That, by definition, is

inauthentic. Remarkably, the only path to being authentic is

being authentic about one’s inauthenticities. Being authentic

is being willing to discover, confront, and tell the truth about

your inauthenticities — where you are not being genuine,

real, or authentic. Specifically, being authentic is being willing

to discover, confront, and tell the truth about where in your

life you are not being or acting consistent with who you hold

yourself out to be for others, or not being or acting consistent

with who you hold yourself to be for yourself.

Most of us think of ourselves as being authentic; however,

each of us in certain situations, and each of us in certain ways,

is consistently inauthentic.

SOME EXAMPLES OF OUR INAUTHENTICITIES

We as persons and in our organizations desperately want to

be admired. For many, admiration is the most valuable coin

of the realm. Almost none of us is willing to confront just

how much we want to be admired, and how readily we will

fudge on being straightforward and completely honest in a

situation where we perceive doing so threatens us with a loss

of admiration. We will do almost anything to avoid the loss of

admiration — stretch the truth, manipulate the facts, hide what

might be embarrassing or unpleasant or even awkward and,

where required, outright lie.

We also all want to be seen by our colleagues as being loyal,

protesting that loyalty is a virtue even in situations where

the truth is that we are acting “loyal” solely to avoid the loss



EDITOR’S NOTE: The following article is excerpted by the authors from an academic paper on which they are working. While different in style and length from our typical IQ article, you can be sure that it is worth your time to read, and even study, this article. Erhard and Jensen are making a significant contribution to the field of leadership development and the effective exercise of leadership. Moreover, their work reinforces, illuminates, and expands the principles and practices that Insigniam’s clients have found so valuable:

è At the core of Insigniam’s leadership development work is the notion that leadership starts with taking a stand — the access to which is your word. In particular, Jensen and Erhard’s seminal work to define integrity as “working as your word” elevates that notion and extends it in multiple dimensions.

è One highly effective supply chain executive who has worked with Insigniam for a decade says that his most impactful learning is that, if he touches or sees it, he is responsible (a leader is responsible); that discovery is harmonic with the authors’ foundation of being cause in the matter of everything in your life.

1See Erhard, Jensen, and Zaffron (2009), “Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics and Legality.” Harvard Business School NOM Working Paper No. 06-11. Available at SSRN: http://ssrn.com/abstract=920625

2George, Bill. 2003, p.11. “Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value”. San Francisco: Jossey-Bass.

of admiration. And, in such situations, how ready we are to

sacrifice authenticity to maintain the pretense of being loyal,

when the truth is that we are “being loyal” only because we

fear losing the admiration of our close colleagues, subordinates,

or bosses.

In addition, most of us have a pathetic need for looking

good (and in certain situations this shows up as wanting to be

liked), and almost none of us is willing to confront just how

much we care about looking good — even to the extent of

the silliness of pretending to have followed and understood

something when we haven’t.

Each of us is inauthentic in certain ways. While this may

sound like a description of this or that person you know, it

actually describes each of us — including you the reader and

each of us authors. We are all guilty of being small in these ways

— it comes with being human.

If you cannot find the courage to be authentic about your

inauthenticities, you can forget about being a great leader or

having a great personal life. And an organization that cannot

be authentic about it’s inauthenticities will experience great

conflicts, costs, and inevitably loss of reputation.

Great leaders, great organizations, and those who lead great

personal lives are noteworthy in having come to grips with

these foibles of being human, not eliminating them, but being

the master of these weaknesses.

IS BEING AUTHENTIC IMPORTANT TO BEING A LEADER?

Quoting former Medtronics CEO and now Harvard

Business School Professor of Leadership Bill George: “After

years of studying leaders and their traits, I believe that

leadership begins and ends with authenticity.”2

To be a leader and to have a great organization and to have

a truly great personal life, you and your organization must be

big enough to be authentic about your inauthenticities and

your organization’s inauthenticities. This kind of bigness is a

sign of power, and is so interpreted by others. Being a leader

requires that you be absolutely authentic, and true authenticity

begins with being authentic about your inauthenticities; and

almost no one does this.

THE ACTIONABLE ACCESS TO AUTHENTICITY

As we have said, the only path to authenticity is being

authentic about your inauthenticities. In order to achieve this

you must find in yourself, that “self” that leaves you free to

be authentic about your inauthenticities. That “self,” the one

required to be authentic about your inauthenticities, is who

you authentically are.

And you will know when this process is complete when you

are free to be publicly authentic about your inauthenticities,

and have experienced the freedom, courage, and peace of

mind that comes from doing so. And this is especially so when

you are authentic with those around you for whom those

inauthenticities matter (and who are likely to be aware of them

in any case).


FOUNDATION TWO: BEING CAUSE IN THE MATTER

By “Being Cause in the Matter” we mean being cause

in the matter of everything in your life as a stand you take

for yourself and life, and acting from that stand. To take

the stand that you are cause in the matter contrasts with it

being your fault, or that you failed, or that you are to blame,

or even that you did it.

It is not true that you are the cause of everything in

your life. That you are the cause of everything in your life

is a place to stand from which to view and deal with life,

a place that exists solely as a matter of your choice. The

stand that one is cause in the matter is a declaration, not an

assertion of fact. It simply says: “You can count on me (and,

I can count on me) to look at and deal with life from the

perspective of my being cause in the matter.”

BEING CAUSE IN THE MATTER MEANS YOU GIVE UP THE RIGHT TO

BE A VICTIM

When you have taken the stand (declared) that you are

cause in the matter of your life, it means that you give up

the right to assign cause to the circumstances or to others.

That is you give up the right to be a victim. At the same

time, taking this stand does not prevent you from holding

others responsible.

As we said, it is not true that you are the cause of

everything in your life. Being cause in the matter does not

mean that you are taking on the burden of or being blamed

for or praised for anything in the matter. And, taking the

stand that you are cause in the matter does not mean that

you won’t fail.

However, when you have mastered this aspect of the

foundation required for being a leader and exercising

leadership effectively, you will experience a state change in

effectiveness and power in dealing with the challenges of

leadership and living a great personal life (not to mention

the challenges of creating a great organization).

In taking the stand that you are the cause of everything

in your life, you give up the right to blame others or the

environment. In fact, you give up the right to blame the

circumstances for anything that is going on with you or

your organization.

FOUNDATION THREE: BEING COMMITTED TO SOMETHING BIGGER THAN ONESELF

What we mean by “being committed to something bigger

than oneself” is being committed in a way that shapes one’s

being and actions so that your ways of being and acting are

in the service of realizing something beyond your personal

concerns for yourself — beyond a direct personal payoff. As

they are acted on, such commitments create something to

which others can also be committed and have the sense that

their lives are about something bigger than themselves. This is

an important aspect of a great personal life, great leadership, and

a great organization.

BEING COMMITTED TO SOMETHING BIGGER THAN ONESELF IS

THE SOURCE OF PASSION

Without the passion that comes from being committed

to something bigger than yourself,

you are unlikely to persevere in the

valley of tears that is an inevitable

experience in the lives of all true

leaders. Times when nothing goes

right, there is no way, no help is

available, nothing there except

what you can do to find something

in yourself — the strength to

persevere in the face of impossible,

insurmountable hurdles and barriers.

And, by the way, every great personal life includes having to

come to grips with one or more of these profound challenges.

When you are committed to something bigger than yourself

and you reach down inside you will find the strength to

continue (joy in the labor of).

IF YOU CANNOT FIND THE COURAGE TO BE AUTHENTIC ABOUT YOUR

INAUTHENTICITIES, YOU CAN FORGET ABOUT BEING A GREAT LEADER OR HAVING A GREAT PERSONAL LIFE.


EXAMPLE OF A VALLEY OF TEARS THAT ALMOST EVERYONE

EXPERIENCES: THE MID-LIFE CRISIS

At some point in life we all stop measuring time from the

beginning and start measuring it from the end. It shifts from

how far have I come to how much time and opportunity

do I have left?

No matter how good you look, no matter how good

you’ve gotten your family to look, and no matter how

much wealth, fame, power, and position you have amassed,

you will experience a profound lack of fulfillment — the

incompleteness, emptiness, and pain expressed by the common

question: Is this all there is?

Let us be clear: There is nothing inherently wrong with

wealth, good looks, fame, power, or

position, but, contrary to almost universal

belief, they will never be enough. And

facing up to that leaves people and

organizations disoriented, disturbed, and

lost. No matter how good you look or

how much you have personally amassed,

it will never be enough to avoid this crisis.

Dealing with the crisis of “Is this all there

is?” lies in having a commitment to the

realization of a future (a cause) that leaves

you with a passion for living.

This principle, being committed to

something bigger than oneself, applies to

corporate entities as well as to human beings. Value creation for

both is the scorecard for success. Value creation is not the source

of corporate or personal passion and energy. Being committed

to something bigger than oneself is the source of that passion

and energy. Every individual and every organization has the

power to choose that commitment — there is no “right

answer.” It is creating what lights up you and your organization.

FOUNDATION FOUR: INTEGRITY — A POSITIVE MODEL

Definition: We use the first two definitions of integrity from

Webster’s New World Dictionary: 1. the quality or state of

being complete; unbroken condition; wholeness; entirety 2.

the quality or state of being unimpaired; perfect condition;

soundness.

We use the phrase “whole and complete” to represent

our definition of integrity. Defined this way, integrity is

a positive phenomena, not a virtue. There is nothing

inherently good or bad about it, it is just the way the world

is. (We show how morality and ethics are related to our

definition of integrity below.)

An object has integrity when it is whole and complete.

Any diminution in whole and complete results in a

diminution in workability. Think of a wheel with missing

spokes, it is not whole and complete. It will become out-

of-round, work less well, and eventually stop working

entirely. Likewise, a system has integrity when it is whole

and complete.

The Law of Integrity states: As integrity (whole and complete)

declines, workability declines, and as workability declines, value

(or more generally, the opportunity for performance) declines.

Thus, the maximization of whatever performance measure you

choose requires integrity.

Attempting to violate the Law of Integrity generates

painful consequences just as surely as attempting to violate

the law of gravity. Put simply (and somewhat overstated):

“Without integrity nothing works.” Think of this as a

heuristic: If you or your organization operate in life as though

this heuristic is true, performance will increase dramatically.

And the impact on performance is huge: easily in the range

of 100% to 500%.

INTEGRITY FOR A PERSON (OR AN ORGANIZATION)

In this positive model, integrity for a person is a matter of a

person’s word, nothing more and nothing less. You are a man or

VALUE CREATION IS NOT THE SOURCE OF CORPORATE OR PERSONAL PASSION AND ENERGY. BEING COMMITTED TO SOMETHING BIGGER THAN ONESELF IS THE SOURCE OF THAT PASSION AND ENERGY.


The Social Moral Standards, the Group Ethical Standards

and the Governmental Legal Standards of right and wrong,

good and bad behavior in the society, groups and state in

which I enjoy the benefits of membership are also my word

(what I am expected to do) …unless I have explicitly and

publicly expressed my intention to not keep one or more of

those standards, and I am willing to bear the costs of refusing

to conform to these standards (the rules of the game I am in).

NOTE: These six categories define one’s Word, they do not

define integrity.

THE BAD NEWS

We can say with great confidence that no one (including

us authors) is a person or organization completely in

integrity. That self-satisfied view is one of the causes of

the universal lack of integrity in the world. To repeat:

the common belief that we have made it as people and

organizations of integrity is one of the major factors

contributing to the systemic worldwide lack of integrity.

The fact is integrity is a “mountain with no top,” so we

had better get used to (and grow to like) climbing. Even

when people (and other human entities, such as banks,

corporations, partnerships, and other organizations) have

some general awareness of the damaging effects of out-

of-integrity behavior, for the most part they fail to notice

their own out-of-integrity behavior. As a result, they end

up attributing the damage from their out-of-integrity

behavior to other causes. They systematically believe that

they are in integrity, or if by chance they are at the moment

aware of being out of integrity, they believe that they will

soon get back into integrity.

However, the combination of 1) generally not seeing

our own out-of-integrity behavior, 2) believing that we are

persons of integrity, and 3) even when we get a glimpse of

our own out-of-integrity behavior, assuaging ourselves with

the notion that we will soon restore ourselves to being a

person of integrity keeps us from seeing that in fact integrity

woman of integrity, and enjoy the benefits thereof, when your

word is whole and complete. Your word includes the speaking

of your actions as in “actions speak louder than words.”

HONORING YOUR WORD

While keeping your word is fundamentally important in life,

you will not be able to always keep your word (unless you are

playing a small game in life). However, you can always honor

your word. Honoring your word is:

1. Keeping your word, OR

2. Whenever you will not be keeping your word, just as

soon as you become aware that you will not be keeping your

word (including not keeping your word on time) saying to

everyone impacted:

i. That you will not be keeping your word, and

ii. That you will keep that word in the future and by when, or

that you won’t be keeping that word at all, and

iii. What you will do to deal with the impact on others of the

failure to keep your word (or to keep it on time).

YOUR WORD DEFINED

WORD 1 – WHAT YOU SAID: Whatever you said you

will do, or will not do (and in the case of do, doing it on

time).

WORD 2 – WHAT YOU KNOW: Whatever you know to

do, or know not to do, and if it is do, doing it as you know it

is meant to be done (and doing it on time), unless you have

explicitly said to the contrary.

WORD 3 – WHAT IS EXPECTED: Whatever you are

expected to do or not do (unexpressed requests) and in the

case of do, doing it on time, unless you have explicitly said

to the contrary.

WORD 4 – WHAT YOU SAY IS SO: Whenever you

have given your word to others as to the existence of some

thing or some state of the world, your word includes being

willing to be held accountable that the others would find

your evidence makes what you have asserted valid for

themselves.

WORD 5 – WHAT YOU STAND FOR: Whether

expressed in the form of a declaration made to one or more

people, or to yourself, as well as what you hold yourself out

to others as standing for (formally declared or not).

WORD 6 – MORALITY, ETHICS, AND LEGALITY:

WITHOUT INTEGRITY NOTHING WORKS.

3Erhard, Werner and Jensen, Michael C., 2013. “Four Ways of Being that Create the Foundations of A Great Personal Life, Great Leadership and A Great Organization — PDF File of Powerpoint Slides” (September 12). Harvard Business School NOM Unit Working Paper No. 13-078. Available at SSRN: http://ssrn.com/abstract=2207782


integrity in our life with all sorts of unworkability fallout.

And this is true of all our associations with persons or

entities that are out of integrity. The effects are huge, but

generally attributed to something other than the lack of

integrity.

In the Appendix to Erhard and Jensen (2013)3 we apply

these principles to the Goldman Sachs’ experience with

its Abacus Mortgage Backed Securities Scandal in which

Goldman violated 7 of its 13 Goldman Business Principles

(their word to their clients, employees, and the world).

Goldman employee Fabrice Tourre was found guilty of

defrauding investors. See Alloway and Scannell (2013)4. In

addition, Goldman paid a $550 million fine to the SEC

for its actions surrounding its Abacus mortgage-backed

securities, a record at that time. Applying the principles laid

out in this paper to Goldman’s actions, we conclude that

Goldman was: 1. Out of integrity because it did not honor

its word: violating in part or in whole, 7 of its 13 “Goldman

Sachs Principles.” 2. Inauthentic because it was not true

to what it holds itself out to be for itself, its employees, its

clients, and the public and 3. Not committed to something

bigger than itself. (We could find nothing in the Goldman

literature indicating that it was committed to anything

bigger than itself.)

is a mountain with no top. To be a person of integrity (or

bank or other organization of integrity) requires that we

recognize this and “learn to enjoy climbing.” Knowing

that integrity is a mountain with no top, and being joyfully

engaged in the climb, leaves us as individuals with power,

and leaves us known by others as authentic, and as men or

women of integrity (or organizations of integrity). While

counterintuitive, owning up to any out-of-integrity behavior

and dealing with it with “honor” actually leaves one showing

up for others as a person of integrity. Recognizing that we

will never “get there” also opens us up to tolerance of (and

an ability to see and deal productively with) our own out-of-

integrity behavior as well as that of others.

THE COSTS OF DEALING WITH AN OBJECT, PERSON, GROUP,

OR ENTITY THAT IS OUT OF INTEGRITY

Consider the experience of dealing with an object that

lacks integrity. Say a car or bicycle. When it is not whole and

complete and unbroken (that is a component is missing or

malfunctioning) it becomes unreliable, unpredictable, and

it creates those characteristics in our lives. The car fails in

traffic, we create a traffic jam, we are late for appointments,

fail to perform, disappoint our partners, associates, and

firms. In effect, the out-of-integrity car creates a lack of

4Alloway, Tracy and Kara Scannell (2013). “Jury finds Tourre Defrauded Investors”, Financial Times, August 1. http://www.ft.com/cms/s/0/18098490-f86a-11e2-b4c4-00144feabdc0.html#axzz2f5BKytNd

Copyright 2014. Werner Erhard, Michael C. Jensen, Landmark Worldwide. All rights reserved.

IQ BOOST

LEAD WITH THE FUTURE — LEAVE THE PAST BEHINDBY BRUCE ZIMMER

In a new era of technology and innovation, companies

seeking change requires fully engaging breakthrough

thinking for breakthrough results. When the paradigm

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change is the focus, that ability to create a new future

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What can have a dramatically negative impact on

this transformation? As in life, the answer may be basic

human nature. We’re wired to watch out for our own

survival. Changes that threaten our environment can

lead to a fear of the process and holding on to past

behaviors that have been successful. This survival

mechanism can perpetuate itself, unnoticed by all.

A vital step of effective change management starts

with identifying the behavior that results in business

as usual, leading to minor, predictable improvements.

At Insigniam, we refer to this as “the drift.” The “drift”

is the ever-present flow that determines the constant

direction of an enterprise. It won’t take you to a new

future, it just gives you more of the past.

Consider an alternate path to a breakthrough with

the Merlin process: creating a bridge from the desired

future to the present reality by working backwards.

Start with painting a picture that captures the essence

of winning in the future. Then build a path backward

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question, “What outcomes did we produce that were

precursors to this future? It’s a brain twister, but the

outcomes will be very different than the drift.

Executive leadership should point toward a bold

future while realigning the corporate culture to remove

obstacles from traditional modes of thinking. Address

the source of people’s behaviors and actions and

implement change that they embrace, rather than

avoid. Learning from the future instead of the past

creates a lasting platform for transformation.

Bruce Zimmer is an Insigniam partner. He is driven

by a passion to help clients achieve dramatically

improved results and help companies accomplish

that which might typically be seen as impossible.

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