Waste Management dumps legacy processes, drives digital change
Digital technology is changing how Waste Management does business. By applying three levers of digital transformation, the $15 billion logistics company is infusing technology into the business model to drive growth.
With 43,700 employees, 20 million customers, 17,500 collection trucks, and the industry’s largest landfills network, Waste Management has some serious operations to manage. How does the leadership team develop and execute a digital transformation for a company with so many moving parts? By breaking the strategy into three primary levers and infusing technology into every one of them, says their chief digital officer, Nikolaj Sjoqvist.
Martha Heller: How do you define “digital” at Waste Management?
Nikolaj Sjoqvist: As we currently define digital, we are talking about fundamentally changing the way we do business by infusing technology into the business model to drive growth. We are changing not only what we are doing, but how we are doing it, and we have defined three big levers to guide us:
Risk mitigation and business enablement: Strengthening our technology foundation to support a level of accelerated innovation
Operational improvements: Leveraging technology for process excellence and cost reduction
Customer experience: Providing digital channels to delight customers and drive growth
And central to all of this is employee enablement; we are making a material investment in enabling our people in every one of these levers.
What are you doing to drive change in each of those levers?
For risk mitigation and business enablement, we’ve defined three buckets:
Infrastructure foundation: We are making material investments in upgrading our networks to support cloud-based capabilities, transitioning our data centers to the cloud, and upgrading our infrastructure and applications monitoring.
Cybersecurity: We’ve increased our investment in cyber and will probably do that in perpetuity.
We are investing in modernizing our ERP environment to allow our employees to have a modern experience when they walk in the door.
Operational improvements: Our operations are logistics – we move trash and recycled products around. We are investing in a solution called M100, which increases collection efficiency by giving a remote manager the ability to see whether trucks are following an ideal route and pinpoint inaccuracies.
We are also rolling out a Future Fleet initiative, a set of predictive maintenance tools that reduce costs. And we are investing in connected landfills, a huge [internet of things] IoT effort that allows remotely located employees to monitor landfills and identify and resolve issues without going out to the physical location with a clip board.
In the customer experience lever, we are focused on new solutions that will create a stickier customer experience, reduce churn, and extend customer tenure, all of which creates value for us. In our call centers, for example, we take more than 12 million calls a year, which cost us about $8 a call. Forty percent of those callers ask the same basic questions around billing and truck pickup schedules. We are giving customers apps and texting capabilities get answers to their questions themselves, and [we’re] reserving the call centers for more complex questions.
Another example in customer experience is in our residential market. We have spent some time in our customers’ homes, learning how customers think about the buying experience. Late last year, we built a prototype for an involved buying experience for that customer segment. We deployed it in three months through agile two-week sprints, built in collaboration with customers.
We saw a spike of over 70% points for our new monthly bill-pay option. In the past, we’ve said that monthly billing is not convenient for us, but our customers told us that’s what they want. When we gave it to them, they rewarded us with an auto bill-pay rate that spiked, which is important because autopay is a leading indicator of how long a customer will stay with us. We saw a 40% jump in ecommerce revenue almost overnight. We are now levering those learnings in our commercial markets.
What organizational changes have you made to accelerate your business’s shift into the digital economy?
We have changed the name of our organization from “IT” to “Digital,” and that organization is made up of six subgroups:
Enterprise applications and infrastructure
Enterprise analytics and data management
Digital transformation and impact office
The old IT organization managed infrastructure and powered the business day to day. The new digital organization drives business value. We’ve evolved from a siloed black box operation that did its own thing to a collaborative thought partner that is not just shaping the solution but also shaping the opportunity. We don’t not want to hear our business partners say, “By the way, we are going to run a remote-control dozer. IT, can you figure out how to create a secure private network?” We want to be involved in those conversations up front.
That shift requires my team to approach our business partners in a new way. Take cybersecurity, for example. IT needs to talk less about NIST frameworks and log analyses and more about the business risk and brand damage associated with a loss of customer data. Rather than talking about an SD-WAN, we should be talking about network speed’s impact on the user experience.
How do you get your team to adopt a business-first mindset?
I come from a business background, not a technology background, so I have surrounded myself with people who are stronger, technically, than I am. I spend a lot of time working with my team to translate “bits language” into “human language.”
Our “gallery walks” have been particularly effective in helping our technologists develop “business speak.” Here is how it works: On the 17th floor of our Houston headquarters, we’ve set up three stations that correspond to our three levers. In each of those stations, we have a poster that explains the lever, and two people – one a technologist and the other a business partner – present a relevant solution together. The technologist could be one of my senior leaders or a front-line developer. We go through a bunch of rehearsals, and they present to people who come through the gallery walk.
Recently, in the customer experience section, we had two people give a three-minute demonstration of our new digital self-service products, and senior leaders asked questions. The idea was to bring the solution to life rather than deliver death by PowerPoint. It was great to see how well received the walk was. Several people called it “inspirational,” and our CEO said, “we need to digitize this experience,” so we are now creating a digital version of the gallery walk.
What leadership lessons have you learned from your role as CDO?
I have come to understand that transparency is essential to success. After my first six months, I posted the IT budget on Yammer so that everyone in the company could see it. This is the first time the entire company saw what IT was spending. That was transparent!
Transparency means sharing success, but also sharing what’s not going well.
Last year, we were developing a solution for our customer service reps in Phoenix. We were working in agile sprints and doing all of the right things on paper. But when we rolled out the product, it wasn’t what our reps were looking for. I was dazed and confused. We were working every month in agile sprints! How could we have missed the mark?
We came to understand that we were working with the customer service managers, not the reps themselves. We learned that to truly be agile, we need to work with the end user directly, not through well-intentioned managers who are protecting their team’s time.
The chief customer officer and I shared the story with our CEO, and he asked us to tell that story to the board. As a result of that transparency, the entire company is learning that it is important to fail, as long as you fail fast.
About Nikolaj H. Sjoqvist
As senior vice president and chief digital officer for Waste Management, Nikolaj H. Sjoqvist is responsible for all digital and technology functions for the Company. This includes ecommerce and online self-service (wm.com), information technology, and advanced analytics and data management. He is a member of the company’s senior leadership team and reports to Waste Management president and CEO Jim Fish.
Sjoqvist joined the company in 2012 and was previously vice president of revenue management with responsibility for pricing, disciplined growth planning, marketing and advanced revenue analytics. Prior to joining Waste Management, Sjoqvist was a consultant with McKinsey & Company’s marketing & sales practice. Sjoqvist earned a bachelor’s in business studies from Oxford Brookes University in the U.K., and an MBA from Kellogg School of Management at Northwestern University.
Martha Heller is CEO of Heller Search Associates, an IT executive recruiting firm specializing in CIO, CTO, CISO and senior technology roles in all industries. She is the author The CIO Paradox: Battling the Contradictions of IT Leadership and Be the Business: CIOs in the New Era of IT. To join the IT career conversation, subscribe to The Heller Report.