GE’s Jim Fowler on the CIO role in the digital industrial economy

Eventually, IT will no longer be a function — it will just be the way you work. It’s a copout for CIOs to require a functional executive to lead every project. To stay relevant, IT executives need to be seen as catalysts and not speed bumps, all according to GE CIO Jim Fowler.

Martha Heller: What are the greatest challenges facing CIOs as a profession right now?

Jim Fowler: CIOs have to find a way to establish and maintain relevance in their organizations, which will happen in two ways. From 1990 to 2010, industrial companies saw an average annual productivity increase of 4 percent, but since then, that number has diminished to 1 percent. The decrease is the result of all of the work we’ve been doing over the last several decades, to digitize core processes. The next wave of productivity will come in our ability to connect the digital world of IT with the physical world of machines. To remain relevant, CIOs will have to figure out, for their businesses, how to connect a physical asset to enterprise systems.

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Also, we are seeing an emerging workforce of “self-helpers.” Regardless of their discipline, college graduates are coming into our companies and creating models, spreadsheets and even advanced analytical tools; they come in with the assumption that they don’t need an IT organization. They can figure out how to digitize their work themselves.

How do CIOs stay relevant in this world of self-helpers? They need to figure out how to architect data so that it is readily available for these workers. Providing the right platforms and guardrails needs to be seen as a catalyst and not a speed bump.

How do you conceptualize the CIO’s role in this new environment?

When I am in business meetings, I hear people talk about digital as a function or a role. It is not. Digital is a capability that needs to exist in every job. Twenty years ago, we broke ecommerce out into its own organization, and today ecommerce is just a part of the way we work. That’s where digital and IT are headed; IT will be no longer be a distinct function, it will just be the way we work.

I see three models for the CIO in this new world:

1. Back-office. In this model, the CIO controls infrastructure, the network, storage, and makes the PCs run. The CIOs who choose to play that role will not be relevant for long. People are quickly realizing that they can procure IT services for themselves much more efficiently than CIOs can provide them from a centralized IT organization.
2. Operator. CIOs have wing-to-wing exposure to process. They understand how each silo fits together and how information flows across functions. CIOs have the opportunity to transform themselves into COOs who design and guide the most lean and digital way to run a process. As digital just becomes the way we work, CIOs will no longer be leaders of an IT function; they will lead almost all of a company’s shared services.
3. Commercial leader. This is where the CIO is really a CTO who shows the company’s leaders how digital products and services will enhance whatever they made and sold before; they will help to manage digital disruption. To stay relevant, CIOs need to be operating leaders or commercial leaders, or a hybrid of both.

How can CIOs who grew up in the back office change their thinking to adopt these two new models?

First, stop talking about upgrades, obsolescence, networks, and application performance. Start talking about how your technology strategy will help your company and your customers make more money. That sounds simple, but I cannot tell you how many times I’ve asked an IT leader about their business model, and they can’t articulate it.

Second, be willing to take really uncomfortable risks. It’s easy to commit to finishing a project this year or overhauling a component of infrastructure. It’s harder to include on your goals and objectives, “Drive X percent revenue growth,” or “Enable Y percent variable cost productivity,” or “Deliver Z dollars of cash generation.” If you are willing to map your own objectives to business goals, you’ll be better able to adapt.

How can CIOs get business partners to think differently about the importance of IT?

Most business leaders don’t know what’s possible with technology. They don’t know that their processes are inefficient. My approach to educating business leaders on the art of the possible is to take them to see other companies who are doing things better than we are. Introducing them to their peers in other companies who are using technology to drive efficiency does more in one meeting than I can do in a month of discussions.

Second, business leaders have to understand that your interests are tied together with theirs. When they see that their goals and objectives are mirrored to yours, and that you are raising your hand and promising to commit to a portion of their goals and objectives, all of the sudden you are having a different conversation. They have to see that you have skin in the game — that you are sharing the risk — for them to work with you in a different way.

How do we raise future CIOs who are willing to take risks when we insist that IT must always have a business sponsor willing to take accountability for a project’s business outcome?

Where you have a functional sponsor, life is always easier. I’m running a project inside the company right now in supply chain, and I have a functional sponsor who understands how technology and lean process go together. In cases like this, I am willing to take the backseat and let the sponsor drive, because he has the commitment, voice and credibility. I’ll be at every meeting, and I’ll sign up for everything he signs up for, but he is the public face of the project.

While that model works, I do not think that IT needs to bring in a functional leader every time. If CIOs are truly business leaders, and we believe what we say about our ability to understand business processes, customers, and markets, then it’s a copout to say that we need a functional executive to lead every project.

Take the CFO. The CFO has the power of money and has tremendous reach in an organization. CFOs can affect supply chain, marketing and sales. CFOs get into the details and the underlying process. They have broad influence because they have the rights to the dollars. They don’t need someone else to lead for them.

As CIOs, we have the rights to the technology, and we need to come in with that level of swagger. Up until now, technology has been a “how.” In the next five years, we’re going to see a massive transformation as we move from a world where people tell machines what to do, to a world where machines tell people what to do. As CIO, my job is to show everyone that technology is moving from a “how” to a “what.” Technology is becoming part of everything we produce, whether that’s a gas turbine, an aircraft engine or a locomotive.

Today, every plant around the world brings forecasting, inventory, and production information together in their ERP to help managers meet a demand cycle. With machine learning and AI, we will be connecting the machines in the plant to that ERP, and our ability to determine how, when and where to produce parts to meet a demand forecast will improve dramatically. That is what makes my job as CIO so important. If I don’t help people understand what happens when IT meets operational technology, then we’ll be sitting here five years from now less efficient than every other manufacturing company in the world.

The “what” of technology, then, is not your ability to bring ERP and artificial intelligence together, the “what” is the new business model that results from that convergence. This means that companies will start selling business outcomes to their customers rather than products. That business model change requires a cultural shift in your sales organization, among other places. How do you drive that change?

That’s why we created a new division called GE Digital, which sits outside of all of our industrial businesses. We’ve brought in a commercial leader who is driving the retraining of our sales staff globally. She is taking them from being people who sell hardware to people who understanding a customer’s problem and provide a solution.

Selling light bulbs is not a high margin business nor is it a strategic direction for the company. So, the lighting team has reinvented itself into a new company called “Current.” The sales team at Current is no longer solely focused on big box retailers and how to get more light bulbs onto their shelves.

The leadership team at Current said, “Let’s think about what our customers really care about.” They care about their energy costs. This business that used to sell industrial hardware now sells lighting solutions that combine solar, power production, LED technology and software. That commercial change required a sales team that was focused on SKUs and units sold to become focused on solutions and outcomes.

How are you getting IT to deliver faster at GE?

First, we’ve moved to a flatter organizational model with “teams of teams” who are focused on outcomes. These are colocated groups of people who own a small, minimal viable product deliverable that they can produce in 90 days. The team focuses on one piece of work that they will own through its complete lifecycle.

Second, we are igniting the workforce, which means that our workforce has to be GE employees. Today, I have 5,000 IT professionals who work for GE and 14,000 contractors. Those 14,000 contractors are great people, but they are just not as invested in the success of the company as the 5,000 employees.

So, to ignite the workforce, I am insourcing. Over the next two years, I will hire 2,000 people into one of five global technology centers around the world, which are organized by the teams-of-teams mentality. We are bringing the knowledge content, intellectual property, and the real know-how back inside the company.

The third part is retraining. I’ve got people who are still writing deep code in COBOL. That is not the agile workforce that I need for the future. One of the ways we are retraining is by re-platforming most of our applications to run in the cloud. We are doing that through ninja teams, ten people from different areas of technology who leave their day jobs to go to our west coast technology center and spend three weeks porting one application to run in the cloud. They train with our developers out there, and when they return, they own that re-platformed application.

This year, we’ll retrain over 600 workers through that process. That’s how I’m driving an agile mentality that values technology ownership, and we are keeping the intellectual property in-house.

What is the biggest obstacle that technologists face in working in a more agile and outcomes based model?

Changing to an outcomes based model means willing to be an environment where you don’t know everything about everything that you’re working on. For people who are very risk averse, that’s an uncomfortable place to be.

Another piece of it, which we never really talk about, is the tendency for organizations to pit function against function. Whether we are in IT, HR or engineering, we care about whether our function wins. We may not ever say that out loud, but we demonstrate that attitude through our actions. That’s a thought process that we have to change. I may not want to change the way I work, but if that’s the right thing for the organization, I’ll do it. When you are organized in silos, you tend to look after your own. But when you work more horizontally, you think about the greater good.

What in the world of technology are you most excited about?

I am excited about the way IT is coming together with operations technology in the physical world. Inside GE, we refer to this as the digital thread, where you take the data that flows from the moment the first part of a piece of equipment was designed through its entire life cycle of operations. That includes the operational data, the sensing data that comes off the factory floor when the equipment was produced, and the data that comes off the asset when it’s being used by our customers. All of that data allows us to work in ways that we’ve never seen before.

What advice do you have for up and coming CIOs?

Take the role that no one else wants. At least four times in my career, I’ve taken a job that everybody else thought was too hard, weird, or different, and that strategy has paid off for me in spades. When you take the job that no one else wants, you learn to take risks. When you know that you are likely to fail, you learn that failure allows you to learn more than success.

The tough jobs also teach you the importance and power of influence. When you take a job that no one wants, you will probably have to get a lot of people to do something that they don’t really want to do. The ability to influence is the one skill that I use every day, and it’s the top skill that I look for in my leaders.

Take the job that no one else wants; you will get so much out of it.

About Jim Fowler

Jim Fowler drives GE’s global IT strategy, services, and operations, and delivers innovative and transformational solutions for GE, its customers and employees. Fowler brings 15 years experience as an IT leader at GE Capital, Aviation, Intelligent Platforms, Power Generation Services, and Power & Water. Prior to joining GE, he served in IT roles with NCR and Accenture. Fowler holds a Bachelor of Science degree in management information systems and marketing from Miami University and an MBA from Xavier University.