by Martha Heller

How Johnson Controls is going ‘digital to the core’

Sep 22, 2021
Cloud ComputingDigital TransformationDiversity and Inclusion

As the multinational conglomerate transforms to bring cutting-edge digital products and services to customers, CIO Diane Schwarz ensures that it is digital on the inside as well.

Diane Schwarz, CIO, Johnson Controls
Credit: Johnson Controls

As Johnson Controls expands its focus from manufacturing HVAC, fire detection, and building controls products to providing predictive analytics and smart facilities, Johnson’s end-to-end processes, says CIO Diane Schwarz, must be “digital to the core.”

“Historically, we manufactured, installed, and serviced items,” says Schwarz, who has been CIO of the $22 billion global company since 2020. “But we are making the transition to subscription services to support the products we sell. The shift from a one-time sale to a subscription focus changes all of the dynamics of the company.”

“Johnson Controls is digital in the marketplace, so we need to be digital in every aspect of how we behave internally,” she says. “If customers see a shiny, red, ripe apple, from the outside, then the inside of the apple has to be just as good, all the way to the core.”

Leveraging the cloud and self-service IT

To deliver the analytics to support the business’s new predictive maintenance and IoT-based services line, CTO Vijay Sankaran is driving the shift to a platform architecture with a common set of APIs. For Schwarz and her team, the focus is on providing the entire process ecosystem, including sales, billing, and customer support to the changing business. “We are re-envisioning everything we do internally to support a customer from contract to cash,” she says. To that end, Schwarz and her team are moving ERP and other critical systems to the cloud and are putting in as many self-service capabilities as possible.

But as important as modernized systems are to making Johnson Controls digital to the core, Schwarz sees culture and behaviors as the more critical change. “The biggest transformation challenge is human,” she says. “We are encouraging our leaders to embrace self-serve technologies. We want them to try out low code and RPA development models and a fail-fast culture. We are changing from a culture of analyzing a new technology so that it will never break the enterprise to a proof-of-concept approach, so that we can anticipate a constantly changing marketplace.”

For example, one of Johnson Controls’ regional business centers uses hundreds of small bots to automate financial processes. “I find pockets, like this group, that are already using self-service technologies, and I shine a light on them. When a new group sees the advantages of RPA, and shows an interest, I ask my IT team to help them set up the tools.”

Schwarz goes one step further to highlight those business units that are using self-service technologies by inviting them onto her monthly interview program. “I bring guests onto the show, which we then post to our intranet, so anyone can watch,” she says. “I did an interview with both the RPA automation lead in one of our businesses and her IT partner on my team. I put them together to demonstrate how powerful self-service technologies can be.”

Customer-centric IT

An enterprise that is digital to the core requires IT to adopt a customer-centric culture—starting at the top. “Our CEO [George Oliver] wants all of his leaders to be commercially minded, so he has asked us to be executive sponsors of our top customers,” Schwarz says. “In addition to being executive sponsor, I reach out to build relationships with our customer company CIOs.” 

It doesn’t stop there.

“The culture we are building in IT is commercially minded,” says Schwarz, “which means understanding what the customer wants, and how we, as a business, make money.” To drive this customer focus into her own organizations, Schwarz asks her senior leaders to be executive sponsors, as well. “When IT leaders have direct accountability for the success of our customers, they tend to take a 360-degree view of supplier management systems and analytics,” she says.

DEI beyond recruiting

Taking a 360-degree view starts with fostering a culture that is diverse and inclusive. To that end, Johnson Controls has set a goal to double the representation of women globally, and minorities in the US, in leadership positions by 2025. This aggressive goal means that Schwarz and her peer executives must be intentional about baking diversity into every aspect of their hiring, including ensuring a diverse interview panel for every hire. “But diversity hiring only increases our chance of bringing diverse people in the door,” she says. “We also need to look at what are we doing to develop and promote diverse employees.”

To maximize the creativity and innovation that can result from a diversity of thought and backgrounds, Schwarz sees Johnson Controls’ current hybrid video-enabled working environment as an advantage. “We use the mantra, ‘see faces, hear voices, camera on’ for our video meetings,” says Schwarz. “When people are in a room together, physical movements and postures can create a dynamic that does not always encourage everyone to have a voice.  In a video meeting, the CEO’s thumbnail picture is the same size as everyone else’s. Remote meetings can level the playing field.”