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I want to welcome Ganesh air who is the CEO of emphasis and IT services company and also Jerry wind who is a Wharton
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marketing Professor thank you both for joining us uh for this discussion about uh how CEOs and other top leaders can
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nurture a digital culture in their organization and the first thing I wanted to ask you about that is as
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leadership CEOs in particular become more digitally transformed themselves then the one of the next things that
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they have to look at is how do you move this down the organization so what does Smart leadership look like as it tries
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to move the uh digital transformation down through the organization and and KES maybe will start with
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you see the um any transformation uh the physical transformation is an easier bit because
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you draw up a new chart new reporting lines new incentive scheme so that's the
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physical transformation The Challenge lies in chemical transformation of the company
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how do you rewire the people how how do you equip them with new skill sets which
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are required in the new world how do you actually walk the talk because for example uh when a company which is in
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analog business also aspires to get into digital business cannibalization is inevitable and as a CEO do you uh go and
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say you do something different and say something different so authenticity of leadership becomes import important so
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in my company uh the Mantra which we have adopted make customer central to our transformation and revolve around
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customer strategy to be successful so one of the things which we have started measuring is are we becoming more
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relevant to our customers everybody talks about the fact that this customer is relevant to me is is that important
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from business perspective what is more important is are you relevant to the customer because
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that gives you sustainability and Longevity and it actually defines whether you delivering value so that's
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how we are keeping customer central theme to our transformation we are focusing more and more on chemical
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transformation and um earlier Jerry and I were discussing where is our operational headquarter one of the
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things which we are working on is making benches as our headquarters so where the
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customer is you just go there and and action around those things so those are the elements which I would Define as
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Elements which we are working on for transformation and you need to be ruthless with corporate
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antibodies because in any transformation you face corporate antibodies you one needs to be just ruthless about it Jerry
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what's your view on uh uh what thises smart leadership look like once the leadership has transformed themselves to
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think digitally and now they want to make their company's culture more Innovative well I fully agree with your
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comments I thought I thought were right on target uh let me take them a little kind of one step further in the
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following sense one the it's absolutely critical that the leaders understand the
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digital world and practice it but it's not enough that's a necessary but not
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sufficient condition I think the sufficient condition is to move back to the next step and basically
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saying but what are the implication to our mental mods what are the implication to our business models uh and basically
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willing to make the tough decision have the courage to make the tough decisions uh which require basically we have to to
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face the new reality of digital world and um uh we finished a study which uh I think you're familiar with which was
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basically showed that there four type of business models there are basically asset Builders there are service
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providers there are technology makers and there are network orchestrators network orchestrator will be the Uber
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the Airbnb the Visa Mastercard uh the market return market value on these four business models very
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dramatically so if you look at the market value as a multiple of Revenue you find out that for manufacturer asset
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Builder 1 to2 for service providers 2 to three three technology maker is about four if you're a network company it's
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about eight plus to become a network company with the enormous benefits there like zero marginal cost that you have
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associated with this ability to scale infinitely and the like you need a different type of mindset you basically
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have to have as a leader you have to change basically your mental model you have to change the business model move
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more toward the network and you have basically to start realizing that it's no longer the command and control type
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leadership basically you have to basically become much more a co-creator and we look at the leadership required
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for Network orchestrator to be co-creator of the customers and and others you know think about what Apple
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has done with the the ecosystem of of Apple there is no way they could have had the hundreds of thousands of app
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they out there internally they had to basically create it and you have to have a culture of a win-win and being willing
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to share with the customer so I will take it one step further in term of your comment on the customer it's not only
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how important you are the customers but change the relationship as opposed to just looking me and the customer how can
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we create now a new entity which is how do we co-create together what is the role of the customer in
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co-creating and if you really move to the co-creation and everyone organization start getting the culture
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of co-creation and a truly win-win I think then you are on the way toward win winning in this transformation
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absolutely brilliant point in fact you know you I'm glad you mentioned it we
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set up a lab called Next Labs because in emphasis the logo is unleash the next so
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we thought next Labs would be a good name for our labs and the fundamental principle of that lab is
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co-creation if you are creating something on your own that is less acceptable to us as an investment it is
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more acceptable to us when you are co-creating it with the customer we are willing to make more investment in that
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area than then you have one bright idea and I'm going to try it out so I it's
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such a great point you have made I completely acknowledge uh which is a good lead in
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from both of you to the next question which is how do how does leadership starting with the CEO Embrace this idea
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of being more collaborative um this egalitarian environment that we're talking about where you get immediate
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customer feedback so you know what they're thinking really fast you have to respond fast um and how do corporate
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cultures change to accommodate that Ganesh um actually quite a thought-provoking
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question it is uh it goes back to uh the fact that you have to come to terms with
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the fact that CEO doesn't have Monopoly on all the great ideas in fact probably
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he's the worst person to have great ideas and um a new person who is serving
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the client youngster who has just joined the company may have a great idea so you
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really need to um move from being a large boat or a large ship to thousand canoes where they are governed and they
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are empowered to make choices and that change is not easy I mean these concepts are easy to describe
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we are in the midst of trying to do it even when you go to someone and says you are empowered to make the decision
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suddenly they have been demanding that empowerment and the moment you give it they are at a loss how to use it they go
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back to the old habit of saying that let me check with my boss before I make a decision so these Concepts will take
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time to be ingrained in the company one needs to be patient it cannot be a um a twoin noodle uh kind of an approach it
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is it is something which you have to be staying with it I need to get comfortable with it
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because in my last 30 years there are lots of things which are within my muscle memory which are based on command
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and control hierarchy uh the ego of being a CEO the glamour of being a CEO you have to be
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prepared to take the Shine off yourself and and reach out to to people who can bring these ideas so those are
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all the cultural changes uh Authority changes uh model changes that we are making we are also making incentive
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changes we are redefining the incentive as if we have multiple CEOs in the company so it becomes
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self-governing uh motivated team some of the ideas are here um I wouldn't say
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that we have reached um the destination or we have arrived we have made progress
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we have still some ways to go Jerry this idea about flattening the organization that was being talked about here how how
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what's your advice to companies on on how they should change their culture to
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uh as he says one thing to say it another thing to to live it first of all congratulations what you're doing I
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think the absolutely right track I'll give you know there's a lot of thing we
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can talk about I'll give you two things I'll give you one a change in M Mal and
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one I'll give you something very practical that every company should do then we can elaborate more the change in
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malal is the concept of control most companies believe that they have control the reality is that uh let's take for
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example positioning of a brand the reality is that the position of a brand is determined by the consumers not by
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the company so as long as you as a company as a leader believe that I have control I decide on the positioning you
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in reality have zero control if you change the m m to a collaborative co-creating Mal you realize from day one
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that the control is shared between you and the customer and therefore you're
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not under this illusion that that you're doing something but the market of reality is really totally different so I
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think it's absolutely the the change to a co-creation mod is absolutely critical
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here now in term of pragmatics in term of how do we make it happen I am a great believer in
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experimentation and I think if a company will adapt the philosophy adaptive experimentation they'll be able to
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achieve basically a lot of things because the advantage of experimentation it's the only way of determining causal
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relationship it is the only way that forces you actually to measure you know exactly what's happening what is the
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result of whatever you're doing the most important thing it encourages you to
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take basically more uh Innovative initiative as opposed to just me too or a little smic Improvement in what you're
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doing and fundamentally what's happening the minute you adopt a philosophy of
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experimentation throughout the company you as the CEO send a message to the company is okay to fail because everyone
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knows not every experiment will succeed the minute you send a message it's okay
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to fail you're overcoming this kind of the natural inclin to be risk averse the minute you send
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this then you have to link it was what you were talking about which is the incentive system and the reward system
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so you want to celebrate lessons from failure so you're not celebrating only
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the successes but what if we learn from something that did not work and if you are then adapting basically the Adaptive
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experimentation which says there is no fixed strategy basically everything we do is experimentation we finish
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experiment one the question is okay what have we learned from here we move into experiment two Experiment three four
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it's a it's a culture of experimentation is the new basically mental model for
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running a business which is ideal for a distributed type organization because they're not centralizing it the only
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thing centralization you want to do is perhaps in terms of creating meta analysis of the many many experiments
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providing like Master designs en encouraging and if you're moving into areas such as cognitive Computing with
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Watson or you're moving into what Google is doing with primarily with ual mind in
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term of the AI and you have an AI or cognitive Computing Master System out there that basically will take all the
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results of the experiments plus all the other data out there now you're basically a GameChanger but every unit
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in the organization feel empowered because they're providing you the key ingredient for the decision that you can
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then make based on all of these together it's interesting uh what you said about
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uh you have to sort of erase that fear of failure it just reminds me of an an OG example recall the Japanese uh
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remaking manufacturing during the 80s and 90s and one of the things they they would say is that when when when a part
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went wrong on the line or something went wrong that was to them that was a jewel
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it was like it was a treasure because they could look at that and and figure out not just what went wrong for that
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but they could figure out ways to do lots of other things better so it's a interesting parallel uh I wanted to just
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dig into the customer centricity idea a little bit because um it makes sense put
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the C customer at the center uh and uh and you'll be okay but I'd like to hear
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from each of you what does that look like what does customer centricity look like in a company how do you nurture it
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how do you how do you encourage it and and what does it mean is it you have to understand exactly what they're thinking
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tell me tell me what customer centricity looks like so um in our case when you look back at offsh show
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players we were focusing on it Services which meant you were calling on the Chief Information
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officer and procurement side majority of the time as the world transforms to digital the decision around digital will
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get made in the business side of things so if you want to be relev I mean relevant in the context or customer
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centricity in the digital world you need to spend time understanding customer's customer and
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not just the customer and that's the journey that we have been tracking for the last 18
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months as a company how do we understand deeper in customers customer now many of
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our customers are both in B2B and b2c and you would see digital playing a big bigger in
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b2c so even making that distinction when you think of a customer as one comp company logo it's not true they are made
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up of multiple businesses uh their competition is different challenges are different opportunities are different as
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you get deeper and as you become a trusted adviser to business that results in centricity we have some cultural
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challenges I let me bring up those cultural challenges as well by Nature people don't ask questions they
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don't challenge so you have to uh uh kind of ensure that people challenge people add value they ask questions
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because it's not just doing what they ask you to do it is also about bringing
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best practices based on your knowledge and experience and challenging status qu so it's not just about serving what they
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want but focusing on what they need and that distance is truly the distance that
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we are trying to cover so our customer centricity is being defined by I made some changes and we are transforming
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around 16 customers right now because I'm not big enough to lead Market transformation I don't have the
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wherewithal to lead Market transformation so my transformation is linked to my customers
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transformation and uh hence I take responsibility for select customers every I saw some of the experiment which
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people do where they go to retail shop and the CEO serves there to understand the customer I'm not in that kind b2c
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business but uh I spend time as I mentioned earlier in trenches to understand what's going on how can I add
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value so those are the uh so the best way to define customer centricity uh is understand customer
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customer Jerry uh well first I fully agree basically since you're in the B2B
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World basically you have to develop dual strategy you for every one of your B2B customers you to develop strategy for
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their btc's so help them so basically you cannot if you're in the B2B game you
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cannot just limit yourself to the B2B space you have to understand the the b2c aspect but let me give you kind of three
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criteria that I will bring for the customer centricity one of them uh relate to the
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fact that you realize that the customer is becoming now the active participant in the system So Co manufacturing think
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about build a bearer the customer builds the product not the factory uh think about um uh Facebook co-creation all the
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Facebook provided a platform all the content that Facebook has created by customers um think about uh pricing
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priceline.com the customer decides what is the price think about distribution why do I have to have my sales people
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earlier think about uh diapers.com where primarily because of the incentive they
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provide Ed for every customer to bring other customers and benefits for both of them the customers became the
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salespeople for the company so stop thinking about you are doing thing as a company create a platform to allow your
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customers to do things so that's number one if you're doing this you're really
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way way ahead in becoming really customer Centric second you realize the fact that if you work especially in the
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B2B World also but through also the b2c if you work together as a co-creation with a customer you really understand
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the needs of the customer it's the typically when we talk about understanding customer cons the typical
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company will say okay we'll do marketing research marketing research gives you
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almost in most cases wrong information because first you get tons of people are not responding to this of a hug non
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response bias typically you're running typically in terms of structured internet panels which most people are
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kind of basically not really responding and the structured questions tons of problems with marketing research there
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are some good marketing research project and we've been using them but primarily
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you'll get B far more reliable and valid data if you get it through the interaction of co-creating with the
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customer and three I think you should change the measures you should start thinking about not market share but
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think about share of wallet what is my share of the total requirement of this customer so if you look at infosis they
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should look at this basically uh in ter of what share they have of the total Computing uh expenses of their clients
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as a measure think about lifetime value of a customer start thinking about different measures that focus on the
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customer because most of the measures today are not customer Centric in reality the tragedy is in term of
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financial accounting customers are not even Financial Accounting don't don't
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count anything actually because of the financial accounting the chair on which you're sitting is worth more than you
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because you're not even accounting but the chair is there is an asset so change the measures how does it
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make you feel small I feel very small right now change Financial Accounting okay the next Revolution
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thanks for joining us both of you apprciate thank you thank you thank you [Music]