With disruption accelerating across every industry, IT leaders are pressed constantly by the question: How can we leverage emerging technologies to ensure our organization thrives in the years ahead?
CIO.com’s Maryfran Johnson sat down with John Marcante, global CIO and managing director at Vanguard, to discuss just that.
A 28-year veteran of the investment management firm, Marcante has held executive roles across many of Vanguard’s businesses, including its high net worth business, asset management, and financial advice, giving him a unique, cross-functional perspective on organizational innovation, which he brings to bear on his role as a member of Vanguard’s Innovation Board and as a founding member of its Innovation Studio.
Following are edited excerpts of Marcante’s conversation with Johnson on how to help your organization think like a startup as part of CIO.com’s Leadership Live series. Watch the full video of Marcante’s interview below.
On business and technology becoming deeply integrated:
Marcante: Today, technology and corporate strategy are really interwoven. They’re the same. I mean technology is the disrupter of our time. Technology leaders have to be passionate about the business and business leaders have to be passionate about technology and understand what technology can enable. For years, you had boards and senior teams not really talking API, the API economy, cloud, microservices. That’s just not true today, which is incredible.
On establishing a startup mentality at Vanguard:
Marcante: I remember a time where Bill McNabb was our Chairman. I was reporting to Bill and so was [current Vanguard Chairman] Tim Buckley as the chief investment officer. And Bill, I don’t know, I mean this must have been almost a decade ago, ended up taking us all offsite … to the West Coast. We spent time with venture capitalists, we spent time with startups, and we spent time with people in leading tech companies. And one of the things back then that we were enamored with, which was how people worked, and the speed by which they were getting things done.
We came back after that and we were convinced that we needed to adopt and really go through what we now call, all of us in the industry, digital transformation. We needed to adopt agile, we needed to adopt cloud computing, we needed to empower — not just the technical pieces, we needed to empower cross-functional teams, we needed to move from project orientation to product and journey orientation. And then that kind of accelerated for us when we implemented lean in our largest retail operations group, which we had this tremendous impact on productivity. But I think more importantly, more important than productivity, [was the] huge impact both the agile and lean movement [had] at Vanguard early on, on employee engagement.
Today, that’s an agenda across the company. It’s something we call ‘new ways of working,’ and if you went anywhere today, if you went to marketing, marketing is now organized in agile pods and focused on outcomes.
On innovating with a ‘greenfield approach’:
Marcante: I’m often on panels or calls with other CIOs. And inevitably, the conversation goes to — well, how do you build the case? … How do you build the case for AI? How do you build the case for cloud computing? … I really believe that the role of technology is to integrate and deliver the strategy of the company. The company has a mission and a strategy. And technology’s mission isn’t any different other than it is the key enabler of that.
So … the place to start [in building the case] is in a greenfield opportunity. Can you build something that’s really important to the business, and you can build it in a way that’s cloud native, and you can take advantage of all the things that come with cloud native technologies. But you’re delivering on a key piece for the business. Let them feel it. And once they feel it, you don’t need to make the case. The case gets accelerated for you. … No CFO, CEO, CIO will give up the benefit of actually seeing something live and seeing how fast you can react to clients, how fast you can make change, how much you scale and how cheap it actually is to launch in a new market once you do it correctly.
On inducing cultural change:
Marcante: The worst thing you want to do is have an idea and then go Big Bang. The reality is Big Bang doesn’t work. You need to iterate your way. No CEO, CIO can say, ‘We’ll be agile in six months.’ … That’s top down. It doesn’t work. What works is people actually believing it and then let the people who go through the change tell the story. It’s more powerful for someone who’s gone through the change than me to tell their story, for them to say, ‘This is what my world was like before this and this is what my world looks like now.’
On what differentiates phenomenal leaders from good leaders:
Marcante: The reality is there are two competencies. One is humility. … If you’re going to be a good leader, you need to know you don’t know everything. That the good part of this is about listening and putting together teams and allowing the front lines to make the decisions that they’re closest to and trusting people along the way. So that’s one.
The second one, which I love, is grit. Because yeah, you can get knocked off your horse many times, and if you’re in IT or you’re a CIO or you’re a developer, you know this. That we fail a lot and we fall down a lot, and we get back up and get back up and get back up.
On the value of rotating from technology to business leadership roles and then back:
Marcante: Now, rotations, you can bring a lot of things back. I’ll tell you now that if you can convince your organization around rotations, especially for technology individuals to get out of technology into the business or business individuals to get into technology, it gives you a broader view. Where else besides technology and corporate strategy, actually, and in the business, do you get to see this broad view for a global experience? Or meeting with clients face to face. Do you really want to get feedback? This is phenomenal. Go out and go on sales calls, go on prospect calls, go on client calls. Those things matter. P&L, management matters, and good general management and operations matter.
So I think the biggest thing that I took back … was empathy and an ability to see both sides of the same coin.