Digital transformation requires vision, leadership, process change, and technology. But as important as any of that, says Arthur Hu, CIO of Lenovo, is changing the \u201chearts and minds\u201d of every employee in the company. I caught up with Hu to learn how he uses everyday innovation, identity, and teamwork to challenge long-held ideas about technology operations at the $43 billion global high-tech company.\n[ Be sure to learn the secrets of highly effective digital transformations \u2014 and beware the 7 myths of digital transformation. | Get the latest on digital transformation by signing up for our CIO Leader newsletters. ]\n----------------------------------------\nMartha Heller: What does \u201cdigital\u201d mean to Lenovo?\nArthur Hu: For Lenovo, digital covers a wide spectrum. It ranges from basic process optimization, to using technology to unlock new business models, to creating new products, and delivering more empowering customer experiences. As a company, we believe in the increasing importance of artificial intelligence (AI) for businesses going forward. Therefore, we have been using the term \u201cIntelligent Transformation\u201d \u2014 applying technology, especially AI, in all of the areas of the business to tap into the exploding amounts of data that are becoming more available throughout the enterprise and ecosystem.\n Lenovo\n\nArthur Hu, CIO of Lenovo\n\n\nWith process optimization, for example, we are using a SaaS tool to improve our quoting capabilities and to give customers better self-service. With customer experience, we are using machine learning and artificial intelligence to reduce friction. We are ramping up AI in our call centers so that we know the intent of a customer when they contact us. We can tell what they\u2019ve purchased, which drivers they\u2019ve downloaded, and what questions they\u2019ve been asking of the user base. Those are the everyday innovations that are just as much a part of being digital as creating new products and services.\nOn the business model side, we are offering device as a service where we provide usability tips to help users manage their devices. And we are creating a smart Internet of Things (IoT) consumer device ecosystem in China with smart screens and sensors. For that strategy, we are using new development models to allow our partners to participate in innovation. This kind of change requires a completely new way of understanding PCs.\nWho is driving your Intelligent Transformation? \nIntelligent Transformation is about reimaging the company and bringing it to a new level, so it has to be a CEO-led effort.\nOur CEO, Yuanqing Yang, known as \u201cYY\u201d in the company, has made it clear to the entire company that every employee has a role to play in our Intelligent Transformation. There is a real expectation that every Lenovo employee will focus their individual roles on improving the experience of our customers.\nThere is a real expectation that every Lenovo employee will focus their individual roles on improving the experience of our customers.\nIn realizing the vision within BT\/IT at Lenovo, we have taken inspiration from YY\u2019s strong support and challenged ourselves to get every team involved in a practical way. \u201cEverybody is a first-class citizen\u201d is something that I share with my teams, and the teams have responded by finding ways to apply technology and artificial intelligence in the service of improved experience, stronger employee engagement, and more efficient processes in every level of the organization.\nThat means not only the business teams, but from our command center leveraging chatbot technology to raise satisfaction and handling more user tickets, to our infrastructure and networking teams migrating towards the software-defined data center of the future, to our test teams improving automation. We are truly driving the transformation to all levels of the team. This is critical in showing other teams what is possible and that there is abundant opportunity to unlock new opportunities and new value aligning ourselves with the direction of transformation.\nHow are you working differently now? \nThe composition of our teams looks very different from the past. We\u2019ve moved away from the traditional back-office IT mindset \u2014 that we are a service offered to the business. Instead, we\u2019re shifting more to a business partner model of working together to define how business ideas and technology can meet in new and exciting ways.\nFor example, we decided to automate core reporting, so we had to standardize the way we managed financial data globally. In the past, we might have said it\u2019s the CFO\u2019s job to figure out that change. But today, we recognize that behaviors need to change in multiple departments, including sales operations, which inputs pipeline data. We put together a cross-functional team, which included sales, finance and user design experts, to create not only more standard and automated reports, but to shift the working model from \u201cIT as the reports factory\u201d into an \u201ceverybody is an analyst\u201d model based on self-service on visualization and analysis for the most common use cases.\nIn Intelligent Transformation, the problems tend to be more cross-functional, since we are trying to connect previously unconnected silos. With nimble cross-functional teams, you get more perspectives that result in better answers.\nHow have you changed the culture in IT to drive digital transformation?\nWe\u2019ve changed our identity from information technology to business transformation and even created a logo that ties with our corporate culture to emphasize the shift (see below). Team members wear the logo on T-shirts, and we embed it in our documents and presentations. It\u2019s a tangible reminder that we have to think and operate differently if we are going to truly enable a digital transformation.\n Lenovo\nWe\u2019ve also changed the way we think about our work; we now task teams with developing capabilities rather than delivering projects. I can talk about Intelligent Transformation until I\u2019m blue in the face, but what really wins hearts and minds is when people see small, integrated teams delivering great results fast.\nWe also understand that what got us here won\u2019t get us there. To challenge legacy thinking in IT, we talk about The Four M's: money, managers, manpower, and monopoly. When we see that we are engaging in old habits, we use the 4 M's to speak up.\nCan you explain the 4 M's? \n\nMoney: In the past, we would fund big ERP programs for three to five years. We have to shift out of this massive program paradigm and deliver value much faster. We all need to recognize that there is not a bottomless fund for new investments.\nManagers: Today, managers are no longer there simply to allocate tasks. Today\u2019s managers have deep knowledge of their domains, develop their people, and position their teams to win. We need to de-emphasize management as individual power and redirect it toward empowering teams.\nManpower: Think of start-ups with small teams that are changing the world. We don\u2019t need a lot of people to have a major impact. We need to change the habit of thinking that more people means better results when in fact, more people can create complexity and dependencies that can jeopardize delivery.\nMonopoly: In the past, our business partners sometimes felt like they had to beg IT to do work for them. Since we were the only IT provider available to them, we did not focus on quality. We have to get out of that monopoly mindset and start to act like a service provider in a competitive market.\n\nWhat advice do you have for CEOs whose companies are embarking on digital transformation? \n\nIf you don\u2019t set a clear vision for intelligent transformation, your executive leadership will never have a chance to get on board. If you do set that vision and they are not willing to change, you need to find people who are.\nInject energy into digital transformation by making it fun. Don\u2019t make it a slog. Last April, we challenged more than 1,000 BT\/IT employees to set up 520 laptops and break a Guinness World Record for \u201cmost laptops toppled in a domino fashion.\u201d We did it to show how teamwork allows us to challenge ourselves to do something that has never been done.\nDon\u2019t underestimate the amount of time it will take to build consensus about digital change. People often support a vision theoretically, but they don\u2019t know how to get moving. Make sure you are not stuck at the level of a slogan; provide paths for the current team members who have the skills and will to make the transition to succeed together.\n\nAbout Arthur Hu\nArthur Hu is senior vice president and global CIO for Lenovo and has overall responsibility for the global IT team, tasked with delivering information services, business transformation and digitalization for the firm. He joined the firm nearly 10 years ago and was previously with McKinsey & Company. Hu holds both a BS in computer science and a MS in computer science from Stanford University.