CIOs take different paths to cultivating culture

A workplace without WiFi is unimaginable at a time when consumers can tap or swipe a touchscreen to order everything from food to mattresses.

Yet that’s exactly what Lookman Fazal encountered in early 2019 when he became CIO of NJ Transit, New Jersey’s $4 billion public transportation system. Employees worked from desktops hard-wired to the internet, an impediment to working outside the office.

“We were 40 years behind from a technology perspective,” Fazal tells CIO.com. “IT was preventing collaboration and mobility.”

Fazal is hardly the only CIO to encounter legacy encumbrances, even if he’s among the few who will share the gory details. And while every digital overhaul has its technical hurdles, transforming an organization’s culture is more challenging. Thirty-three percent of 2,135 global executives polled by McKinsey cite cultural and behavioral challenges as the top barriers to digital transformation, followed by a lack of understanding digital trends (25 percent) and a lack of digital talent (24 percent).

“Culture sets the tone for organizational structures, types of technology, management techniques, and processes,” wrote Forrester Research analysts Dan Bieler and Ash Mukerjee in a research report, adding that culture can amplify business transformation if properly aligned with changes to technology.

The bumpy road to culture change

This very mission is what Fazal has been on to galvanize NJ Transit’s culture, whose growth has been stunted by bureaucracy. Applying a tech startup’s approach, Fazal hired a new leadership team comprising five direct reports, including a chief innovation officer to hunt for emerging technologies in transportation. Together, they reduced tech procurement processes from several months to 30 days, outfitted the office with WiFi and implemented cloud productivity and collaboration tools.

The new team also moved quickly to boost customer service. A refreshed NJ Transit mobile app lets riders purchase transit tickets and check bus and train schedules and status, among other information. Fazal is also beefing up a loyalty program by allowing transit riders to earn mile points that can be redeemed at Exxon gas stations, 7-11 and Dunkin’ Donuts, as well as for Netflix subscriptions. NJ Transit has also installed Amazon.com lockers at train stations and bus stops to allow riders to pick up packages, and it has added Uber and Lyft signage to make it easier for guests to hail rides. The gains have moved NJ Transit ahead by 7 years, Fazal estimates.

Some staff were resistant to the wholesale changes Fazal needed to make, forcing hard choices all around. “Some people left voluntarily because they couldn’t keep up with the speed,” Fazal says. “Others I had to replace because they were preventing innovation and tech transformation.”

Incentivizing a data-driven culture

Invariably, tech transformations hinge on culture change in the business ranks, according to McKinsey partner Satya Rao. In one example of a firm seeking to transform its sales force, Rao and his team huddled with the business to understand its challenges and requirements. Within a few months, Rao’s team built analytics tools and dashboards that helped the sales staff sniff out new leads and make better decisions in the field.

One of the critical steps Rao took in this new business process was tying performance incentives to the use of the tool. When only 40 percent of the sales team used the software after a few months, Rao installed a performance management application to motivate staff to use the sales analytics tool. To prompt greater accountability, Rao looped in every executive vice president and senior vice president. Staff were fully aware that their use of the tool was a factor in their performance reviews.

Such data-driven management served as a rubric to help the client company understand adoption and results, Rao says. Over 18 months, the tool helped the sales org boost revenues and reduce costs while also generating feedback from the field to help improve performance.

A credit to the culture

Sometimes — and you won’t often hear CIOs say this — culture is so sound that it merits extension and acceleration rather than wholesale organizational change.

Such was the scenario for Abhi Dhar when he joined credit reporting firm TransUnion a year ago after running an ecommerce startup. Dhar took over an IT department that was already well along the path of agile and DevSecOps to build software that provides better credit reporting services for 75,000 business customers. He executed some organizational realignment, but nothing too drastic. “I feel lucky to have ended up in an extraordinary company with a great culture,” Dhar says.

The organization is also taking several steps to improve the employee experience to better attract and retain employees. This includes improvements to everything from HR systems to end user computing, a broad effort overseen by a dedicated leader. “We want the best minds to want to come work here and stay here,” Dhar says, so “we have to look at what is the experience we’re putting in front of them.”

On the customer-facing front, Dhar is focused on improving operational technology so that TransUnion can answer credit inquiries in sub-second response time, which could require a delicate balance of edge computing and analytics capabilities that help parse 65 petabytes of data. He’s also exploring machine learning for core credit services but acknowledges this is a delicate task, given the challenge of proving the logic that machine learning uses to make decisions is valid.

“The focus for me is making sure I don’t break anything,” Dhar says. “It’s about how we can accelerate our tech transformation to create more value.”

Tips for establishing culture

Rao and Dhar shared lessons learned in their culture-building efforts.

Hire key leaders. The right talent is critical, so start at the top. At NJ Transit, Fazal hired five top-notch leaders, who each hired five key people. All have a passion for the transformation mission. Performance and service gains have been tremendous in the past year, Fazal says.

Benchmark for success. To accelerate TransUnion’s current culture, Dhar benchmarks around such questions as: “What does great look like in 24 months?” “How do we continuously improve upon that?” “What might be the highest-level measure to see progress?”

Don’t cheat change management. Rao says many organizations treat change management as a communications exercise, but true change agents exercise holistic change management, spanning communications to active performance management that leans into ensuring compliance through monitoring and metrics. “We stayed on top of it to monitor the impact of our program,” Rao says.

Business buy-in is critical. The hardest part for the CIO is making sure the business buys in, Rao says. Even better is looping in a CEO to ensure that all parties are invested. In the industrial company scenario, Rao met monthly with the CEO and leadership team to conduct gap analysis and check progress. “Culture change is important, but a lot of organizations fail at it when they don’t involve the business,” Rao says.