episode 6

Alan Kohler explores how boards can deepen innovative capability over time. He speaks with Diane Smith-Gander, AO FAICD, chair, ZipCo Limited; non-executive director, AGL Energy, HBF Health, Keystart Home Loan and Safe Work Australia, Wendy Stops GAICD, non-executive director Coles Group, Blackmores and NFP Fitted for Work and Omar Abbosh  Microsoft vice president, Cross-Industry Solutions, in Episode 6 of Directors on Digital, brought to you by Microsoft and Company Director, the member magazine of the AICD

Guest 1: Diane Smith-Gander AO FAICD, chair ZipCo, non-executive director AGL Energy, HBF Health, and Safe Work Australia.  

Guest 2: Wendy Stops GAICD, non-executive director Coles Group, Blackmores and NFP Fitted for Work.

Guest 3 Omar Abbosh, Corporate Vice President, Industry Solutions at Microsoft and non-executive board member Zuora.

 

Listen and subscribe: Apple Podcasts | Spotify


Transcript

Alan Kohler: This podcast was recorded on the lands of the Whadjuk Noongar people and the Boonerwrung and Wurundjeri clans of the Kulin nation and we’d like to pay respects to Elders past, present and emerging.

Hello and welcome back to Directors on Digital, the podcast from Microsoft and Company Director magazine, where we sit down with Australia’s leading company directors who share their experiences and insights in driving digital transformation on their boards. 

Through the past five episodes we’ve seen how digital transformation is an ongoing journey a process that weaves through every part of an organisation.

With this in mind, the challenge for boards is to develop their digital roadmap for the future, by combining the essential elements. Defining business goals, where efforts are best directed, and how the process is managed and reviewed, so that innovation becomes part of an organisation’s DNA.

In this episode I sit down with Diane Smith-Gander, chair of ZipCo Limited; non-executive director of AGL Energy, HBF Health, and chair of Safe Work Australia.

Diane Smith-Gander: ‘If you’ve got a roadmap with a set of tools that you’re going to deploy, then you’ve got a path to innovation’

Alan Kohler: And Wendy Stops, non-executive director at the Coles Group, Blackmores Limited and the not-for-profit organisation Fitted For Work. 

Wendy Stops: ‘There’s no point coming up with the world’s greatest app if no one wants to use it and they all think it’s crap. The thinking has to be about what the customer wants and what the customer needs.’

Alan Kohler: Later in the episode, Omar Abbosh ‒ corporate vice president of Cross-Industry Solutions at Microsoft ‒ drops in to share his thoughts. 

Omar Abbosh: ‘Today we’re probably about 20 per cent of businesses' technologies are in the cloud today and we’re probably going to go to 80 per cent in a five-year period, which is a drastic increase of uptake.’ 

Alan Kohler: In early 2021, Diane Smith-Gander joined the board of buy-now pay-later company ZipCo. I wanted to find out the differences she’s noticed between how scale-ups like ZipCo handle innovation and technology versus more traditional companies.

Diane Smith-Gander: Walking into ZipCo on day one was a very different experience to walking into the offices of any other board that I’ve ever been on because Zip started its life out as a digital disruptor. And that’s what it’s continued to do. It hasn’t built any legacy around itself. So it’s a very flat organisation structure. The offices are what you would expect from a tech startup. It’s completely agile. People communicate very differently and no one has a monopoly on good ideas. It’s not hierarchical at all.

There are a lot of parallels that are quite similar between ZipCo and the way it operates and Catch. So innovation at Zip is just the way business is done. It happens every day. It happens because the company expects it to happen and the customers expect it to happen.

Alan Kohler: Was part of the reason for taking over Catch at Wesfarmers to try to infect Wesfarmers with that innovation culture?

 

Diane Smith-Gander: The board had already done a little bit of that, if you will. I shouldn’t call Paul Bassett an infection [laughs], but there’d been a very logical conversation around the board table around what were the skills that we had, the expertise, and where was the gap? And Paul, as an entrepreneur and someone in the digital disruption space with Seek, was clearly someone who was very different to the people that sat around the Wesfarmers board table. He did two terms, so six years in total on the board, and he certainly changed the sort of conversations we had, the sort of metrics we were looking at, and the way we were thinking about the retail businesses.

 

 There were a lot of other things that were being used to elevate the digital muscle in Wesfarmers, not the least of which the Flybuys business, which Wendy will know a great deal about, given that’s a partnership between Coles ‒ where she’s on the board ‒ and Wesfarmers. Definitely, Catch was absolutely part of building that muscle, but when Wesfarmers decides it’s going to do something, it does do it fairly quickly and you can see the adoption of digital and the great moves that Bunnings made very, very rapidly.  A lot of that innovative DNA was already there, even in the industrial businesses. There’s a very big digital business in the Fertiliser CSBP business, enabling farmers to have a much better understanding of how to improve the efficiency of their agricultural enterprises.

Alan Kohler: Wendy, you had a similar experience to Diane at Altium four years ago when you joined the board there, and unfortunately you couldn't stick around because of the board meetings in San Francisco all the time, but did you notice a difference between the traditional boards that you’ve been on and when you joined Altium and could you describe that for us?

Wendy Stops: Altium wasn’t a pure startup, it had actually been around for quite a while, but it had been on a go-slow journey. And then I think with some change in leadership and so on, it really started to renew its focus on what it was going to do and how it was going to do it. And innovation was absolutely at the forefront. Everything that they were doing was about how do we leap-frog? How do we really become the number one printed circuit board provider in the globe? And so they were quite fast movers with some of that. 

Alan Kohler: And did you learn things at Altium that you were able to apply in your work at Coles and Commonwealth Bank?

Wendy Stops: I think I did. Altium, as a tech company, is very much about how we can move fast, how we can look at acquisitions and plug holes and do things and really just piece together things bit by bit. And I was used to coming from an environment where you thought big, you always thought, ‘Well, if we’re going to acquire someone, it has to be something big and it has to be something that really makes a massive difference to what we’re doing.’ So this approach of piecing it together like a jigsaw puzzle was really something that I thought you could take into some of the larger corporate worlds and be a little bit more nimble.

Alan Kohler: Diane, obviously ZipCo is a totally different business to say AGL. I just wonder whether there are lessons in ZipCo in the way they operate at the earlier end of the technology maturity curve that could apply to companies like AGL?

Diane Smith-Gander: Alan, I think what Wendy has just said about this notion of acquiring pieces for your jigsaw puzzle and being able to do that elegantly is a really important difference between companies like Zip and companies like AGL. And AGL is working very hard to actually try to mirror that sort of behaviour. You can see it from the executives that are being bought into the company. John Chambers, who was at Telstra, and is very skilled at identifying new acquisitions, partnering, bringing in these sorts of muscles, because AGL needs to fill in a jigsaw puzzle that moves more to behind the meter, to distributed energy offerings, to electric vehicles. And it means the board’s got to have a different set of muscles. In the Zip boardroom, well, we go through exactly the same process of identifying the areas where we would be prepared to consider playing and then contemplating what's the best way to do that by organic growth, by acquiring a set of assets or acquiring an entire company, or maybe by partnering.

And then we go through the process of meeting potential partners, meeting people that are in the market doing similar things to us. The other different thing is that you have, as a director, way more contact with people throughout the organisation. When I go into Zip and I sit down at a hot desk, just like anybody else, people come and have a chat with me because they don’t really have a sense of how the chairman role fits in. And the way that someone in a Wesfarmers organisation has the sense of a way the chairman’s role fits in. And probably wouldn’t be going up and just asking Mike Chaney what he did on the weekend. I’m not saying that either is right or wrong, they’re just really different ways of operating. And I’ve got to say, I'm actually quite energised by the Zip way of operating.

Alan Kohler: I must say, I think this is terribly important because both of you have mentioned the flat structure as being a notable feature of the businesses that you’re in, Altium and ZipCo. And I just wonder whether that’s either desirable or even possible at big corporates.

Diane Smith-Gander: The idea that only the C-suite, the CEO, and maybe a select few executives can pull the information together in a way that’s going to be meaningful for the board seems fundamentally flawed to me, because I’ve certainly learned a great deal from interacting with people that are directly in touch with the customers. One of the other things that I do in my portfolio is I sit on the board of Keystart Home Loans, which is a state government owned mortgage lender, lends 2 per cent deposit loans with no mortgage insurance to people with lower incomes in Western Australia.

There are 140 people in the company. So I can actually walk around there and talk directly to pretty much anyone in the company. And that gives me such greater insight. Large organisations need to find ways of bringing those insights and those direct experiences into the board table without polluting the board’s hindsighting oversight and governance role.

Alan Kohler: Wendy, I imagine there are a few more hierarchical organisations in Coles and CBA, for that matter. What’s your reflection on the need for a flat structure versus hierarchy?

Wendy Stops: I think in the larger organisations, a flat structure is very difficult, because you’re talking about thousands and thousands of people, so you do need some level of structure in the organisation. It’s always a challenge for boards, is how do you get beyond the top two layers in the organisation? How do you really get down in amongst the weeds and the people and the customers and the product development people to really see what’s going on. And so I think in all of my large boards, there’s been a conscious effort to get the directors closer to the business.

Alan Kohler: Wendy, you started at Accenture, what became Accenture, in the mid-eighties. You’ve had such a long look at how companies have dealt with technology, because in those days there were no mobile phones. And so technology was just beginning. And so how did you see companies deal with the beginnings of technology and having to adapt themselves to what was going on around them?

Wendy Stops:

When I joined Arthur Anderson and not long after Anderson Consulting, it was all about large scale, big systems, and most of it was custom development. So it was roll your sleeves up programming. And a project to put in a customer relationship system, or whatever, would take three years to put in, minimum, because of the time that it took to get through all of the phases of work and build it and test it and all of that sort of thing. And so over time, what you saw then is it moved into software. All of a sudden this thing called software came along and you could actually buy some solutions and that enabled you to get there maybe instead of three or four years, you got there in two years, maybe. And then of course, as time went on, we got into the digital world, that’s what’s so fascinating now is because everything now is fast.

 

If someone says to me, we’re going to put in a new App, so we’re going to put a new app for our customers and it’s going to take us a year and a half to develop it. The board’s saying, ‘Why? Why can’t that start to roll out in two months or one month?’ So I think that again, the larger organisations are learning that they can't have this massive complex process, what we used to call the waterfall approach to doing things. It has to be much more agile. It has been much more about fail fast. Try it, test it, fail, if it doesn’t work, then try something else, and get it out there.

 

Wendy Stops: In most cases now, directors are getting impatient. COVID was a classic example of how organisations who said, ‘Well, it will take us six months because of this or this and this and that,’ all of a sudden found out, ‘Well, actually we can do it in a month because we have to, because all of a sudden, We need to increase our online, for example.’

 

So, Coles is a good example. Within four weeks, they completely rewrote their whole online system and rolled it out there in four weeks, because they had to. So when companies really need to move fast, they can.

Alan Kohler: Non-execs seem to have a dual role in a way, you’ve got to push management to take risks, to grow the business and so on. But you’ve also got a role to assess risk, in particular data privacy, cyber security, and so on. How do you juggle that?

Diane?

Diane Smith-Gander: Yes. You hear the board's role described as approving the strategic direction of the company, making sure there’s alignment there, and managing CEO succession. Setting risk appetite is equally up there in the top roles that a board needs to have and take responsibility for. And it’s not just saying, ‘We don’t like risk.’ It is actually setting the appetite for risk and making that appetite explicit, so that management understands what it actually means.

 

So if you think about any retailer, like Wesfarmers, they’ll probably have a risk somewhere on their matrix that goes along the lines of, ‘If we don’t get the offer right to the customer, then it will lack resonance and we’ll lose market share.’ And you think about that risk and think about what would happen if you didn't have constant innovation in your retail offer, and you didn’t have a digital footprint that’s omni-channel and ever innovating. You’re probably likely to find that, that risk of you’re often not resonating with the customer, is going to turn up pretty rapidly.

 

So just think about a Kmart and what you can buy in Kmart today versus what you could buy in Kmart two-to-three years ago, and what the experience was. So to mitigate the risk that the offer wouldn’t resonate with the customer, Kmart needs to have a really demonstrable digital evolution roadmap. It needs to have really good skills to listen to its customer, and understanding the way their desires are moving. It’s got to have super product development, product management capability and a strong supply chain that’s actually defensible, because there’s no sense innovating if you can’t execute and have at least a period of competitive advantage. 

So the way the board supports the mitigation of that risk that our offer doesn’t resonate with the customer, is a very important part of the board setting the direction and approving the strategy.

 

Alan Kohler: With Diane emphasising the all-important customer focus, I wondered if there was a link between the importance that a board places on customers, and being a more agile and innovative organisation. Bunnings sprung to mind.

Diane Smith-Gander: Bunnings is a fascinating case example because for a long time you couldn’t buy anything online at Bunnings. There really wasn’t so much a digital offer. They listened to the customer and knew that what was incredibly important to the customer was when you walked in the door, you actually were able to get all the things you needed to complete your project. Because for a tradesman, that time is money.

That had driven a very solid approach to having a lot of inventory, you know big warehouses so that the stock was always there and a good solid price matching. So that you could make that justification that low prices were just the beginning at Bunnings. But that didn’t mean that online fulfilment was a part of that customer journey.

It was really when Amazon started poking the bear, if you will, with Bunnings that it became clear that more attention needed to be paid to it. And so it was then an explicit focus around where is the customer going to evolve? Perhaps a little ahead of the customer’s ability to tell you that, that’s the direction that they were going in.

 

But without that strong customer proposition that was already there for Bunnings, it would have been very hard to springboard their digital offering as fast as Leah Balter and her team at Bunnings have been able to.

Alan Kohler: Wendy, do you think that that solution to dealing with customers and innovation and so on should and might have to be a common idea?

Wendy Stops: They have to be front-of-mind when you come to innovation and what you’re doing. Because there’s no point coming up with the world’s greatest app if no one wants to use it and they all think it’s crap.

The thinking has to be about what the customer wants and what the customer needs. And so having that customer-first approach, I think really enables the organisation to be much more switched on. So testing things with customers, talking to your customers, listening to what is going to make a difference to them.

 

Last year became all about listening to the customer because the customers were out there, they were hurting, they couldn’t get their products, they couldn’t get their toilet paper, or whatever the case may be. And so there really had to be a lot of thought and innovation put into how do we really service the customer? How do we enable them to get what they need quicker, faster? Those organisations, I think, that do put the customer first and think about how they can innovate to really serve those customers are the ones that are really going to go far. 

Alan Kohler: Diane, do you think that that sort of virtualisation that’s had to occur during the pandemic has accelerated an innovation culture in companies, or has the lack of physical presence held it back?

Diane Smith-Gander: I think that your ability to virtualise is in some ways a bit of a proxy for what your maturity is around digital. What it certainly has done is, is it’s forced some innovation and some change and movement along that maturity of digital adoption for a lot of other companies.

 

And it’s been a wake-up call in lots of strange ways. One small example, one company that I’m involved with is patting itself on the back because everyone has a laptop and you can work at home and everyone’s got a softphone, and isn't all of that great? And then it turned out that there was a quick lockdown called in WA where I am on Whadjuk Noongar Boodjar, and people had their laptops in the office. And why was that? It was because it was called on a Friday and Thursday night has become the night-out for social activity and work drinks. It used to be Friday in the days of old fossils like me, but now apparently it’s Thursday.

 

People will not take their laptops to work, drinks, and to the pub with them because they’re concerned about cybersecurity. So even putting it in a locked car or in the boot of a locked car doesn’t work. So when the lockdown got called everyone was separated from their laptop and all of these arrangements had to be put in for people to file in and be able to get their laptops. So we’ve learnt lots of very interesting lessons during this period.

Alan Kohler: You could never really have expected that one, I guess.

Diane smith-gander: No. [laughs]

Alan Kohler: And speaking of fossils ‒ how can you avoid getting stuck between layers of out of date business sediment? Boards need to be acutely aware of how they go about upskilling the workforce of today for tomorrow. Wendy Stops explains. 

Wendy Stops: Staff need to be up-skilled continuously. There’s not enough, for example, cybersecurity experts out there in the world that you can hire into your organisations. Companies are having to find ways to introduce those skills into their organisation or partner with organisations that have those particular skills, so it is a constant challenge, I think. And it’s not just the employees, the board, I think, is another kettle of fish as well.

Everyone on the board has to have some level of digital knowledge, some level of tech knowledge. And, yes, just like you’ve got the finance expert and whatever, you might have the tech expert who knows a deeper level of understanding, but everybody has to do that. And it’s up to the individual directors to keep on top of that but it's also I think up to the organisation to help those directors become more literate as well.

 

Alan Kohler: Diane, what do you think are these essential elements for a non-executive director focusing on innovation at a board? Where do you start that journey?

Diane Smith-Gander: Well, the non-executive director is focusing on trying to make their company as innovative as it can be, and particularly to have a digital playbook, I think really needs to make sure that the company has got a very good assessment of what the current state actually looks like. And you need to be able to get comfortable that it’s an absolutely no holds barred assessment of where you are, because innovation today does mean digital in many ways. And this is not just for business to consumer, it's also for business to business.

 

So you’ll have a set of human assets, data assets. You’ve got your hardware and software technology assets, a bunch of systems and processes that drag it all together. You’ve got capabilities like the ability to partner with others and change readiness. And so you need to be able to assess where you’re at on all of those things. At the same time, management and the board have to come together in strategy, and the strategy should have a defined future vision and be quite granular, really understand what it means for the journeys that the customers will go on with your company.

 

That then comes together to build a roadmap. And I think if you’ve got a roadmap, with a set of tools that you're going to deploy, then you've got a path to innovation and a digital playbook that you can execute against.

Alan Kohler: Wendy, did you have anything to add to that?

Wendy Stops: The whole thing has to start with the strategy. What is the vision of the organisation? What is the strategy? And then you have to keep an open mind on the art of the possible, right? And I think in a digital world, you definitely have to do that because you can’t be thinking about what happens today. You have to be thinking about what could we do ‒ in three years’ time or five years’ time or whatever. And so that’s really important.

And then I think, there are still organisations out there that treat the technology and the innovation side as like something you kind of put in a corner, and it’s this little special little unit over here that does it. And when we want something done, we go to that little unit and we say, ‘Oh, we’d really like to do this. Can you find some way to do that?’

For it to really be successful, the whole technology and innovation has got to be elevated right up the organisation. It’s got to be something that’s not siloed and put in the corner. It’s got to be something that’s front and centre. The way you structure that in your organisation, the way you encourage innovation right throughout the organisation is fundamental.

Alan Kohler: And how do you deal with fear in the company? Fear of change and fear of the unknown?

Wendy Stops: Look, it still exists. I saw it right throughout my whole career, when you deal with organisations where there was always that fear of change. I used to work with Accenture, and one of the CEO's many years ago used to have this sort of mantra that said, ‘basically we have to be not afraid to change ourselves’. 

There’s going to be some parts of the organisation that may feel they're going to lose their jobs, or they’re going to be sort of made insignificant, and how do you actually encourage them? And how do you actually reassure them that technology is not something to be afraid of, it’s actually part of our DNA now and our whole life, and it's everywhere, and it’s in everything we do, and so we have to be able to embrace it and find ways to move forward.

Alan Kohler: According to Diane Smith-Gander there’s another essential element directors need to tackle ‒ ensuring the organisation’s accounting practices are keeping pace with the new assets they’re building. 

Diane Smith-Gander: There’s another interesting fear factor that the non-executive directors really do need to be responsible for addressing head on; and that’s the fear factor that comes with our past accounting practices. Because the way you think about the life of the intangible assets that you’re building around these digital ecosystems are going to be very, very different to assets that we've built in the past.

And if we’re not careful about the way we capitalise those assets as we build them, we’re not careful about the useful lives we apply to them in our modelling, we’re going to find that we’ll have some real blockers because we will have an organisation that’s accounting is structured in a particular way, and it's operational needs look quite different. So it’s blockers like that, that the board needs to be alert enough to identify, remove those, make sure they're not going to get in the way.

 

And then I do think the themes that we’ve talked about in terms of lifelong learning and making the board a learning entity itself, making the organisation a learning entity and having people in the company feel that the organisation is going to take some responsibility for retooling, upskilling, whatever language you want to use. And that will make the employer be seen to be very much an employer of choice. And I think having that direct engagement with people about what the future looks like is going to be very important.

Alan Kohler: That’s it for my chat with Wendy Stops and Diane Smith-Gander… but don’t go anywhere, because I also caught up with Microsoft’s corporate vice president of Cross-Industry Solutions ‒ Omar Abbosh ‒ who shared the line with me from London. 

Omar worked for Accenture for more than 30 years before he moved to Microsoft in 2020. He’s also a director of subscription business Zuora. 

I opened our conversation by asking about Accenture’s journey of digital transformation and his recent experience at Microsoft… 

Omar Abbosh: It’s so important to be extraordinarily clear with the organisation about what you’re measuring that counts and be incredibly repetitive about it. So at Accenture, we had this concept of rotation to the new, it was essentially a set of metrics to ensure that Accenture was pivoting from older technologies to modern digital technologies and we were incessantly repetitive about that in all of our management structures.

If you don’t repeat, then the new folks don’t know what the gig is, and so being amazingly consistent on the message and clear and simple turned out to be really important to get people on board and move the business.

In many organisations, people see leadership come and go and they sometimes are skeptical and they’re like, ‘heard it before’ or they are saying some nice talk, but are they really going to back it with investment, are they going to back it with real change.  I think in any transformation of any company, it does take leadership conviction and real follow through to make sure that hearts and minds come along with them.

Alan Kohler: Could you give us a sense of some of the organisations you’re involved with now and what’s going on with them? What sort of issues you’re being confronted with?

Omar Abbosh: Yes. Microsoft operates basically in 200 countries [with] tens of thousands of customers, so for me, personally, I’m much more focused on the Fortune 1000 companies and if I had to pick a couple of zones where there’s a lot of activity at the moment. Automotive is one, the automotive industry's amazingly fixated right now on electrification, on autonomy and connectivity so if you connect all these vehicles to the internet, what happens and what can you do with it? Another area is around consumer products, companies, who are shifting to a world where the pandemic has shown them that they cannot always rely on going through retailers to get to customers so they’re talking a lot more about going direct to consumer so that’s a strong area.

Alan Kohler: One of the concepts we’ve been talking about in this podcast series is the maturity curve. Do you know what I mean by that and do you come across it when you deal with companies and do you have to confront the client's own maturity?

Omar Abbosh: There are many models out there. But in the way I think about it today, I would suggest a couple of things. One is in the past, people talked about best practices, but they were typically looking at measures of performance within an industry. In the modern world of digital technology, the best practices are not necessarily coming from within your own industry. So looking across industry becomes a thing that is important. So, make sure your maturity model, if you're using it, is not one that’s limiting more than it should be by looking through a narrow set of industries.

But there are other lenses I think that are worth looking at. So you can look through a customer lens and say, ‘In terms of my customer operations, what am I doing on customer experiences? Am I improving the way I service, the way I market, the way I bill?’ Those customer interaction points are very important. How mature am I in my approaches there?

In core operations, manufacturing and supply chain, again, what level of maturity am I bringing in terms of using, for example, artificial intelligence to do what I mentioned earlier around traceability and visibility in my supply chain?

In terms of my workforce, how am I using technology to improve collaboration and velocity of decision-making and speed of execution? How am I informing my management around the mental health and well-being of the people?

Alan Kohler: And what about the ever present challenges of budgeting and investing for digital transformation, I asked him where’s the best place to start?

Omar Abbosh: So, I think beginning with the customer and working back from there is the way to do digital change in a meaningful way.

To create the budgets that you do need to invest in this technology, you also need to invest in the current horizon to reduce costs and create investment capacity. The way in which I always explain it to customers is say, ‘If you think about the three horizons of the here and now, next 18 months, horizon two out to three years and then horizon three beyond that, the investments we make today need to create an investment capacity in the short-term while pivoting meaningful budgets to create growth in the medium-to-long-term.’ So yes on budgets. On processes, again, digital affords the ability to simplify processes. So it’s all about simplification and speed. The trick is to use digital techniques to make them much better, simpler and faster.

The most successful companies always begin with this concept of human-centric or customer-centric or employee-centric logic. If you start there and think about how you communicate, therefore, why you’re doing things, then you win people’s hearts and minds.  When we talk about the why with our employees, with our customers, then we can win them over, and we’re less technocratic and much more human oriented. And that for sure is the way that the most successful digital companies actually operate. 

 

Alan Kohler: What are the other basics that leaders have to get right in a digital transformation?  

Omar Abbosh: There are so many aspects of this which boil down to leadership. Leadership conviction, clarity of purpose. This topic of the why is a critical part of it, but it’s of course not sufficient. It’s necessary, but not sufficient. So skills are a critical element as well.

And that means having people on board in the company who understand cybersecurity, who understand data, who understand modern cloud computing and how to get the most of those things. What we sometimes find is a lot of companies have all the right ideas about digital transformation. They’ve all been to Silicon Valley on a Silicon Valley tour to learn about the technology, but the execution muscle, the culture around execution, the urgency and the pace that comes from the culture, those things are missing. And again, leaders have to lean into that and drive forward to get the right results.

Things that I’ve seen many NEDs do that work really well is, I mean, one is to just be amazingly open to learning. In Carol Dweck’s book on mindset [Mindset The New Psychology of Success], the growth mindset, Satya Nadella has embraced that heavily and shoved it into the Microsoft culture in a very big way. It’s this idea that says, look, you're never too old to stop learning. 

 And the sorts of shifts that I've seen happen with boards is where instead of being fearful, for example, about cybersecurity, they’ll say, hey, we will review our cyber posture every quarter at the audit committee, the chief information security officer will come into the audit committee and we’ll be super transparent about where are we at. It’s not a list of things I can tick off. It’s an in-depth understanding of our vulnerabilities and our cyber posture and how we evolve. And when you see companies do things like elevate their metrics, for example, in cyber to the same level as their financial metrics, you see that they’re beginning to get it. They understand what is required in this new era. And there are lots and lots of great examples out there of companies who do indeed get it.

Alan Kohler: Microsoft’s corporate vice president of Industry Solutions Omar Abbosh, wrapping up this season of Directors on Digital with an invitation. If you haven’t already ‒ it’s time to lean right on in. 

I’m Alan Kohler ‒ Thanks for listening to Directors on Digital, a partnership between Company Director, the member magazine of the Australian Institute of Company Directors, and Microsoft. To continue your digital transformation journey, get the latest updates and articles at aicd.com.au/directorsondigital

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