When leaders consider how technology has enabled the transformation of business models over the past several years, few would disagree that the world has changed dramatically. Retail, entertainment, music, and banking have largely moved online. It’s a familiar story: Netflix beat Blockbuster; Amazon beat Borders. More recently, Tesla has transformed the experience of buying, owning, and driving a car.

Tesla, Uber, and many other stories of business innovation have this in common: Their business models have technology at their cores. They’re in the software business, and they compete on user experience. They recognize that innovative use of technology is enabling new business models with competition-crushing advantages built right in.

This is why innovation programs have become so critical to sustaining the success of enterprises. Yet, many leaders have not accepted that their organizations need to change at the same pace as the rest of the world. They haven’t examined the explicit and implicit organizational values that could be holding them back from innovation. In addition, they may have yet to embrace and incubate innovation as an essential function of their businesses.

It’s essential that organizations foster innovation to keep moving ahead, implementing meaningful changes to help incubate innovation. We often suggest an innovation portfolio framework, outlined below, to accelerate technology-powered transformation.

Why incubating technology-focused innovation is important

Securing and maintaining competitive advantage now requires organizations to accelerate technology-powered transformation. Whether they use custom-built software or software as a service, organizations’ processes are orchestrated and supported by the software they deploy. The technologies they buy and build to support transformation are vital to their continued success. Businesses must remain ever-ready to innovate as an aspect of their routine operations.

Building the capabilities to refine and innovate new business models is critical. Two stories of innovation and competition illustrate this point:

Netscape founder Mark Andreesen has famously said: “software is eating the world.” He should know. In 1994, his open-source Netscape Navigator browser transformed the difficult-to-navigate world wide web with a user-friendly point-and-click interface. Soon after, Netscape achieved 80% of the browser market. In 1995, Microsoft launched Internet Explorer and, by bundling it with its winning Windows 95 product, swiftly eclipsed Navigator as the leading browser. Then in 2016, Google beat Internet Explorer with its Chrome browser, attaining this success on the strength of Google’s superior search technology.

Consider Domino’s, which redefined itself nearly a decade ago by transforming into a technology company. This iterative transformation started in 2015 when Domino’s redefined ordering pizza delivery via Twitter. Customers could tweet “#EasyOrder” or a pizza slice emoji to @Domino’s, and within 30 minutes, their pizza would be at their door. Behind the scenes, the company linked their customers’ Domino’s and Twitter profiles to enable this innovation. Domino’s knew each customer’s favorite order and preferred payment method. Does it sound like a lot could go wrong with this service? It did. Even so, Domino’s celebrates the experience as one of their early opportunities to become the technology company they are today. They’ve since added the next iteration, a chatbot, Order with Dom. They made the decision to be innovative, to be tech-first – and to change their culture.  It’s paid off, because through innovations like this one, they routinely top the list of quick-serve restaurants in the United States.

How to get into the software business

What does it take for an organization to shift from its current business-as-usual mindset and get into the software business? It takes incubating a winning innovation program, and that starts with knowing the customer and shifting the organization’s values. It takes adopting an innovation framework that accelerates the organization’s capacity for transformation.

Knowing the customer. Successful innovation takes presenting new value propositions directly to customers. Businesses can explore the journey their customers want to go on versus the journey they’re taking today. What they learn through such explorations leads to identifying tech-enabled ways to make customers’ lives easier and more convenient. As Jeff Bezos put it, speaking about Amazon’s development of the Kindle: “We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.”

Shifting organizational values. Innovation programs spur change – even to an organization’s own values. In particular: “failure is okay” is an essential value in innovative organizations. Without failure, organizations won’t change, because folks who should be fostering and pursuing innovation will be too busy playing it safe. It’s admittedly difficult to begin this shift as it requires change to organizational culture, values, and reward systems. But remember Domino’s? Their Twitter feature failed many times, but the company still counts the experience among its innovation successes, because they learned a lot through delivering and operating a revolutionary new service.

Establishing a framework for innovation

Leaders are starting to understand that innovation is a macro trend. When leaders reach that realization, they’ll want to bring all their authority to bear to incubate a strong and empowered innovation program.

First, they’ll want to consider where the function will reside within the organization, who will own it, and how it will be supported. They’ll want to ensure the owner of the innovation program has real power to make decisions and drive change throughout the enterprise. (Many organizations already have what they call an innovation program. It may be funded, and it may be operational, but if it lacks power to affect change, it won’t achieve transformational success. As mentioned above, leaders must be willing to tolerate failure to move forward.)

Once ownership and support are established, innovation leaders will want to take a portfolio approach to explore several innovations in parallel and balance investments across those innovations. The portfolio approach conveys this advantage: if the program is exploring ten or twelve new ideas, having one idea that results in significant transformation is a solid success for the whole innovation program. “It’s okay to fail” means only a few new ideas may flourish. If no innovations grow into significant transformation, it may mean the ideas are too wild or neglectful of customer desires. If all experiments grow into operationalized changes, then the team might be playing it too safely.

Ideally, it’s not just okay to fail. It’s great to fail fast to build momentum, maximize learning and manage risk. Failing fast means thinking big but starting small by pursuing time-boxed innovations. When the time’s expired, teams can review results and then scale up successful experiments. They can learn from failures by completing retrospectives in the agile way: exploring what worked and what didn’t while identifying underlying causes.

Innovation: an essential business function

It’s technology that drives transformation of business models today. Innovative business models have technology at their cores. Every organization that means to keep ahead of its competition must be in the software business, and that’s why incubating innovation programs has become essential to sustaining success and remaining competitive. Leaders can incubate innovation by acquiring deep knowledge of customers’ needs, adopting “it’s okay to fail” as a core value, and establishing a framework to pursue a portfolio of innovations swiftly. If an enterprise has not been changing at the same pace as the rest of the world, it isn’t too late to embrace and incubate innovation as an essential function of any business.

Learn more about Protiviti’s Innovation vs. Technical Debt Tug of War survey results.

Connect with the Authors

Christine Livingston
Managing Director, Emerging Technology

Chris Daniel
Managing Director, Cloud Solutions

Nathan Hanks
Managing Director, Emerging Technology

Digital Transformation

How do you become data-driven? It’s a question that seemingly has infinite answers. That’s why many companies flounder in the ambiguity of data-driven initiatives absent of concrete, actionable focus areas. Forward-thinking leaders are strategically focused on a particular data-driven initiative — self-service data access and governance.

But even for companies who’ve succeeded in pinpointing the core data-driven initiative of self-service data sharing, creating a plan and implementing it is exponentially easier said than done. Why? The dual mandate. It’s about much more than just collecting, storing, and processing data. IT, security, and privacy teams need to provide fast, agile data access to reduce time to insights while maintaining compliance and regulatory requirements. So, how do architects achieve and maintain the right balance of security and speed? How do they empower analytic and data science teams with safe and timely access to insights? Swing the pendulum too far to one side — opening the data floodgates to give teams data as fast as possible — or too far to the other side — locking data down with overly stringent policies — leads to severe business, security, and compliance consequences. What’s the key to the speed-security balance?

Balancing data democratization with security, privacy, and compliance

The key to successfully meeting the dual mandate of agile and secure data access is comprehensive, enterprise-wide data governance. 

Escalating privacy regulations plus evolving consumer preferences, on top of internal security requirements, leave little room for error in an organization’s responsible data usage. In the face of increasingly tough compliance regulations, the default approach for IT and security teams has been a tight lockdown of data to ensure compliance and security. Without an enterprise-wide, centralized system of accountability, privacy and security teams often deny access to personally identifiable information (PII) and other sensitive data. This lack of analytical agility is a major blocker to becoming data-driven and a significant, growing source of friction between teams since business users, data scientists, and analysts demand rapid access to a wide swath of data.

Then there’s the challenge of the expanding, diverse, and hybrid multi-service and multi-cloud data estate requiring management and data access policies. 

Unified data security and access governance

Savvy organizations have had an epiphany. They realize data access governance must be one of the top disciplines they need to master for compliant data at scale. Most enterprises have some form of data access governance in action, and those with automated execution have separated themselves from the pack. From onboarding new data or new users to a 1,000-fold reduction in the number of policies, enterprises that automate reap massive cost savings and operational efficiencies.

Unified data access governance grants a singular experience for creating, managing, enforcing, and executing policies. This unified approach is essential to modernizing data architectures, meeting increasingly stringent regulations, enhancing operational efficiency, and keeping data flowing with secure agility. 

So, what are the critical elements of a unified data security platform?

Universal data coverage: Create policies centrally. Consistently and natively enforce those policies to reduce complexity across hybrid cloud multi-service data estates. Build once, deploy everywhere.Transparent to end users: No impact to query performance and no need to make changes to end-user queries when leveraging native integration and enforcement of policies across diverse data services.Automated: Policies are automatically translated into data service-specific commands. Built-in approval workflows automate access requests and new policy creation.Based on open standards: Leverages the proven Apache Ranger architecture to provide the broadest range of pre-built integrations with structured and semi-structured data sources as well as identity management solutions.Future-proof: Easy to add new data sources. Built-in support for industry compliance and regulations.

Where to start your unified data security journey

Privacera is a Unified Data Security Platform founded by the creators of Apache Ranger and Apache Atlas. With build once, deploy anywhere capabilities, Privacera empowers enterprise users to holistically secure and protect data with consistent and native enforcement across hybrid cloud data estates. Privacera supports the entire lifecycle of data access and security governance with an automated solution that provides sensitive data discovery, fine-grained access control, distributed native policy enforcement, and extensive auditing and reporting. All delivered through a single pane of glass.

See for yourself why Fortune 100 enterprises trust Privacera’s unified data access governance — request a demo today.

Data and Information Security

A transformer, teambuilder, and trailblazer, Michelle McKenna founded her executive advisory firm, The Michelle McKenna Collaborative, after spending 10 seasons as the National Football League’s first-ever CIO and its first female C-level executive. Those are just two of the many “firsts” McKenna has accomplished over the course of her career, which has also included executive leadership roles at Disney and Universal Orlando Resort. While at the NFL, she drove digital transformation, launched new businesses, and, among other feats, pulled off the virtual 2020 NFL Draft at the height of the COVID pandemic — in just three weeks.

A 2022 CIO Hall of Fame inductee, McKenna knows what it takes to think differently about the possibilities of technology and how to forge a powerful legacy of digital leadership. On a recent episode of the Tech Whisperers podcast, we unpacked some of the unique moments from her career, the challenges and lessons learned, and why she believes CIOs need to focus on developing the human side of technology to accomplish big, bold things. Afterwards, we spent some time talking about a few keys to her success. What follows is that conversation, edited for clarity and length.

Dan Roberts: You’re known for your grit. How do you define grit?

Michelle McKenna: I have heard grit described many ways. When I apply it to myself, I think about how hard I am willing to work. No job is too small or beneath me. I also never forget where I came from, a small town in Alabama. It takes a certain amount of grit to get from where I started. But I also think it’s about knowing when it’s time to go and conquer new things and give someone else a turn. That doesn’t make you a quitter; that makes you smart and resilient so that you are built for the long haul.

How do you know when to keep charging down the field and when it’s time to throw in the towel?

A good example is my experience at Disney. I grew up thinking I wanted to work at Disney, and eventually, I got to work there — a dream come true — and I was blessed to be one of the top talent who were given the opportunity to work in many different roles in the company. When I joined, I had just begun to think about my MBA and was seriously considering leaving the workforce and taking on the debt to go to Harvard Business School.   

At the time, a very influential person in my life, Al Weiss, the former president of worldwide operations for Disney Parks and Resorts, told me that staying at Disney and being a part of this management rotation would be better than a Harvard MBA. I will never know if he was right, but I do know I have managed to have a successful career, beyond my wildest hopes and dreams. The Disney alum crew looks out for each other, and I am so happy to have had that experience.  In the end, Disney paid for my MBA at Crummer Graduate School of Business in Orlando. So I didn’t get to go to Harvard, but something better came along — this amazing career shift that took me into technology.

I steadily grew at Disney and was put in charge of many new things, including, at the time, the largest technology transformation the company had ever done. I wanted to continue growing and applied for the top role — and didn’t get it.  It went to an external hire, someone who had been a CIO for many years. I understood their rationale, but I knew that was my cue to go where someone would give me a shot at the top job. So I think grit is also knowing when to go. Resilience — and how to build resilience for yourself is a big part it — knowing when to stop pushing something that isn’t moving and accept that this is how it is and then pivot or maneuver to get what you want another way. There are so many ways to go up the corporate ladder and it’s rarely a straight path.

When we collaborated on the Leadership Development track of the CIO100 Awards event, you shared four pillars from your leadership playbook. No. 1 is ‘Be Your Own Quarterback.’ What does that mean?

Any book I write will be full of football analogies, as I have learned so much from the game.  Being your own quarterback means knowing yourself well. I think the best leaders in the world have strong self-awareness. They know themselves and what motivates them. They know their value system and when it’s being challenged, and they know how they’re going to feel. How can you lead someone else if you don’t hold yourself accountable and lead yourself? You won’t always make the right decision, but if you are following and trust your gut and know yourself, if it’s an informed decision from deep inside you, how could that be wrong? This takes a lot of internal work, including being vulnerable enough to hear things you may not like hearing.

That naturally leads into No. 2: ‘Know Your Team.’

The working title of the leadership book I’m working on is Beyond X’s and O’s, because the best coaches are those who go beyond the x’s and o’s and really know the players and how to put together a winning team. So this is about knowing what your people enjoy doing, what gets them excited about work every day, and what they are best at. If you give a person the chance to do what they’re best at on a regular basis, they’ll be so much more fulfilled, and they’ll do some things that they’re not great at because you’ve given them enough time to do what they’re best at. If you put someone in a job where they’re constantly struggling, they’re going to show up if they have to, but just for a paycheck. You don’t win big if you’re only showing up for a paycheck.

It’s your responsibility as a leader to get to know them. If you’re in tune with a person and you’ve taken the time to build a relationship, you’ll know when they need tough love or when they just need encouragement because they’ve had a bad day. If you’re the CIO of a large team, it can be impossible for you to know this for everyone, but by being vulnerable yourself and showing your true self at work, you will learn what people care about.

No. 3 is ‘Know the Whole Self.’ What’s the distinction there?

People bring their whole self to work whether you see it or not. In every job I’ve had, I am a mother, wife, daughter, sister, friend. Whatever’s going on in all of those selves is happening at work too. It’s just a matter of, can I compartmentalize it enough to get my work done? We all need a leader who will let you bring those other selves to work and give you permission to say, ‘I’m having a hard time right now.’ I’m sure we can all recall a coach, teacher, boss, or mentor you wanted to give your best effort for because they really saw you.

The pandemic shined a light on the whole self in a real way because we started seeing into people’s physical spaces. We might have known they were a mom, but we didn’t know they were a mom of three kids under five. We didn’t know they were caring for an elderly parent until you saw them walk by in the background. I think we have a real moment in time to change the way we approach people at work and take those lessons with us as people return to the office. Let them bring their whole self to work and acknowledge that. It will help you retention-wise and recruitment-wise.

I think the younger generation has lost a lot of institutional trust, but what they can still have is individual trust. If you build individual trust, it’s actually stronger than institutional trust, because if you can get them to trust you as their leader, they will stay with you. And this generation just won’t accept anything less than that. Authentic real leadership is what I hope we take out of COVID.

Tell us about your fourth pillar, ‘Make Sure You Always Have a “Hail Mary” Play.’

In football, Hail Mary is the last chance, last hope, when all is stacked against you and there’s no time on the clock. If you’re a great leader, not only do you have a play ready in those circumstances, but you’ve practiced it. I use that metaphor because Hail Mary plays work. Some of the best sports highlights in the world are Hail Mary plays, and some of the most significant personal triumphs end up being Hail Mary moments. If you’ve prepared for those Hail Mary moments, you’re not scared when they arrive. For me, doing the [NFL] virtual draft was scary because no one had done anything like it before. But my team had been through a lot of Hail Marys. We knew that we had laid the foundation for the Hail Mary play to work. Being a leader is about laying a foundation where a last-second effort can help you win.

What’s some of the best advice you’ve given or received?

I tell people when storms are in their way and they feel themselves wavering to imagine yourself as a tree. Stand tall like a tree with deep roots, but let your branches flow in the wind. You may even lose a branch or two, but if you’re firmly rooted in yourself, you will get through whatever storms may come. I remember my dad telling me that, but more in the context of, don’t forget your roots. You’re going to go and do all these great things, but don’t forget where you came from.

That gets back to how you show up as a leader. It’s always mattered, but never have we had a generation like this one holding us accountable to it. What you say and do matters, and you need to be conscious about bringing your best self every day. And when you can’t, know how to make use of self-care and take some time away until you can bring your best self back on the field.

For more from McKenna’s leadership playbook, including how she galvanized her team to pull of the historic virtual 2020 NFL Draft, tune into the Tech Whisperers podcast.

IT Leadership

Like any other retailer, grocery stores want to build trust with their customers and keep them coming back. But the average bill and already slender margins in grocery can make it challenging to create a loyalty program that provides sufficiently compelling rewards.

Nevertheless, it’s worth the effort, given that loyalty programs are a powerful incentive for grocery shoppers. In the US, for example, more than 60% of grocery store loyalty program members say that the financial incentives (such as discounts and promotions) influence where they shop and how much they spend.1

The first challenge is persuading customers to sign up for a loyalty account. Stores with a digital presence tend to roll loyalty programs into their online accounts. However, stores entering the digital space report that almost 57% of their online customers prefer to check out as a guest, rather than register for an account and the associated loyalty rewards.2 How can stores persuade customers to sign up and keep them coming back for more? Follow these tips:

1. Know your customers and what matters to them

Know who your customers are and make sure the rewards you offer reflect their wants and needs. This involves making a genuine effort to understand your most loyal customers and what will entice them to keep shopping with you. Initially, you’ll probably need to gather insights from surveys, customer service data and customer interviews. Once you have a body of customers signed up as account and program members, you’ll be able to gather data about their shopping behaviors directly, enabling you to further refine and personalize your loyalty program and offers.

2. Make it easy (and rewarding) to sign up

Make the enrollment process as straightforward as you can, while ensuring you capture all the relevant customer information. Consider offering an incentive to new joiners, such as a ‘welcome’ promo code or discount off their first shop.

3. Make rewards about more than just shopping

Think about offering bonus points or other incentives to program members who refer friends and family members to the program. And give people a reason to keep coming back, such as a reward for opening your mobile app every day for seven days, or for visiting the physical store twice in a week.

4. Deliver seamless transactions at the point of sale

Give loyalty program members a smoother checkout experience instore with reserved tills, or the ability to pay using a barcode, QR code or the app itself (with additional rewards for doing so).

5. Provide genuine value to your customers

If your loyalty program is mostly focused on benefiting your business, customers will likely see through that. Instead, make sure that customers feel like they’re getting something in return for all that loyalty they’re showing you. One approach could be to offer different tiers of rewards or exclusive offers based on spending thresholds.

What technology can help optimize the loyal customer experience?

Optimizing the experience for loyal customers means recognizing them regardless of how they interact with your brand, so you can offer them the privileges, promotions and personal touch that will help them feel valued.  

With Cybersource’s sophisticated Token Management Service, you can recognize your customers regardless of the global payment types, brands, methods, channels, or devices they use. Token Management Service creates one, unified, proprietary token identifier, which centralizes and orchestrates management of all tokens to provide a 360-degree view of the customer. That enables you to support the development of omnichannel experiences and incentives that help to further increase customer engagement, satisfaction, and loyalty.

The ongoing shift to digital grocery shopping means that the competition is often only a tap away. A well designed and well executed loyalty program can play an important role in strengthening customers’ loyalty to your brand.

For more about building customer loyalty in grocery and additional insights, download Cybersource’s “Food Experiences” guide.

IT Leadership