As Dow’s chief digital and information officer, Melanie Kalmar drives the global strategy for information technology and digital capabilities to the chemical manufacturer’s growth and business strategies. She’s also a member of the executive leadership team, which sets the company’s strategic direction, defines priorities, and is accountable for delivering enterprise-level results.
Throughout her career at Dow, Melanie has been involved in driving key transformational efforts and working at the epicenter of the company’s merger & acquisition IT projects, including leading the largest and most complex SAP implementation in the world at Sadara, Dow’s joint venture with Saudi Aramco.
In short, she knows a thing or two about being bold and seizing the big opportunities. When I spoke with Melanie for the CIO Whisperers podcast, we kept coming back to this theme of courage. As she points out, willingness to take on the tough challenges can lead you to exciting new places. In her case, it took her to Saudi Arabia, where she had the opportunity to influence business strategy and drive real business value through IT.
After the show, Melanie shared some more thoughts on what’s needed to tackle the enormous changes ahead of us and how Dow is galvanizing the intellectual strength of its 36,000 employees to embrace digital, leverage technology in new ways, and keep a 125-year-old company innovative. What follows is that off-air conversation, lightly edited for length and clarity.
Dan Roberts: Do you think people understand the magnitude of change we need to embark upon?
Melanie Kalmar: I don’t think anyone really understands the magnitude of digital transformation and the fundamental changes you have to drive in every aspect of your business. It is not only ambiguous but different for each company. There is no single playbook!
As a leader, you have to ask yourself, what does it really mean to move beyond delivering capabilities and rethink and change how we work? That forces you to look at how work gets done and why it gets done that way. Do we need lots of reports and backward-looking views? Are there parts of organizations that could focus on higher value work?
This is critical, because becoming a digital company is table stakes in today’s world. When Dow made a commitment to using digital as a key piece of our company’s transformation, it was because we recognized the many benefits digital would bring to our customers and employees—like a 24/7 online buying experience so customers can interact and transact when they want and shipment visibility so our customer service reps can be proactive instead of firefighting.
What are some of the fundamentals that have been key to the success of your efforts?
We had a vision from the top and arranged the funding to implement. We set aside resources for training and upskilling employees. And we invested in change management to help them embrace digital to change how they work—that’s really the hard part.
There’s also a mindset issue. The biggest challenge is helping the enterprise understand that digital isn’t just an IT thing but a crucial corporate function. It requires CIOs to speak in terms of value and business impact and not in terms of technology. The more we’ve linked digital to outcomes in business terms and what’s in it for the employee, the more we’ve been able to get the company excited about playing a role in our digital acceleration.
To drive this, I’ve embedded members of my leadership team into functional and business teams. They’ve taken on new, hybrid roles where they become fluent in business drivers and can translate those into digital strategies, and they each drive a core part of our IT services. This model keeps everyone grounded in the possibilities and the realities of what we can deliver. It is also to not only deliver the right capabilities but also get the right engagement to deliver successfully.
What are your goals with the Dow Data Science Challenge, and how does that work?
We bring data scientists from around the Dow world together into virtual teams and challenge them to develop proposals that can positively impact the company’s financials and improve the employee or customer experience.
The teams are cross-disciplinary. We have data scientists in many different areas of the company, and they come together to work on their ideas and then pitch and defend their proposal to the “shark tank” panel of judges consisting of a variety of business and functional leaders. We pick the winners and award them the funds to implement their ideas.
The first year, partnering with our CFO, we wanted ideas that could add $100MM to Dow’s EBITA. The most recent challenge was to improve working capital. In addition to being a lot of fun, it’s quite amazing to unleash this talent in unique ways.
Some of the ideas that came from our Data Science Challenges are already being implemented and making an impact. This includes several around data aggregation and AI, such as a program that alerts our customer service reps when shipments might be at risk due to supply chain disruptions and provides recommendations and a new capability providing faster material science innovation using AI-enabled product selection guides and formulation modeling.
How have IT and OT converged at Dow?
The IT organization and its services are a natural connector within a company. Five years ago, our VP Operations and I set out on a journey to further connect the activities within our respective organizations, which continues today.
When we first started on this journey, we were both playing an important role towards a digital Dow. There were two strategies underway: one for Operations and one for the rest of the company. As a result, Dow’s manufacturing organization had solid digital knowledge and expertise. Of course, so did the IT organization. We recognized this and agreed to work together to be more effective at solving the business and operational problems with digital capabilities.
This led to the launch of our Digital Operations Center (DOC), the first of its kind partnership between Operations and IT. The DOC was designed to understand the digital needs of manufacturing and pilot capabilities. It became the roof under which multi-functional experts worked, operating and aligning as a team.
A few examples of the solutions developed at the Dow Digital Operations Center include the use of drones, robots, and crawlers in confined or elevated spaces, making Dow safer and improving the quality of inspection work. Now robots are performing other work tasks as well. We’ve created virtual collaboration capabilities that put our experts in the field using cameras on work helmets to interact in real-time from anywhere in the world to help advise and solve local problems. And we are using tracking capabilities to monitor equipment and personnel for safety and productivity.
Without this IT/OT cooperation, we would have missed opportunities and been more exposed to cyber risk. We’ve also been able to extend our digital thread, improve overall reliability and accelerate end user testing. The roles of IT and OT are now crossing over, becoming more hybrid, and will continue to evolve with an influx of new skills.
Can you share the strategy behind your AI Competency Center (AICC)?
The overarching mandate of our AICC is to democratize AI at Dow. We’re taking a collective intelligence/crowdsourced approach to how we tackle AI at Dow. It doesn’t matter whether you are a summer intern, a new hire in Thailand, an experienced hire in India, or a data scientist in R&D in China, you’ll have a forum to share your ideas and best practices with like-minded, intellectually curious people. And if we already had something in progress, such as chatbot, you can join in. We did not want AI to be the domain of a select few.
I think intellectual curiosity is extremely important today. There is so much changing in our world and in tech that we can’t become stagnant in our thinking. The mantra of continuous learning is real, but don’t think you can read yourself through this. We all need to build strong networks where we can learn from each other and share success or learnings. We all need to really listen—and I mean listen like you are wrong—so you hear what those around you are saying.