Two years of pandemic uncertainty and escalating business risk have sharpened the focus of corporate boards on a technology trend once dismissed as just another IT buzzword.
“Digital transformation work has been greatly accelerated by the pandemic,” says Paul Martin, who wrapped up a decade as CIO of Baxter International in October 2020 and now serves on four public company boards: Unisys, Ping Identity, Owens Corning, and Steris. These days, he adds, “CIOs don’t retire. We go to work on boards!”
That’s increasingly true today, with 43% of board directors at S&P 500 companies reporting technology backgrounds in their public disclosure, according to the National Association of Corporate Directors (NACD). And investment in digital transformation “has increased by more than 10%” during the past two years, according to Deloitte. One recent Deloitte report analyzed the boards of the top 100 companies (by market cap) and found the 31 companies with “tech-savvy” boards performed better overall financially.
“A few years ago, digital transformation was talked about in isolation—more of a buzzword for IT people. That’s all changed,” says Martin, who was recently honored as one of the Savoy Magazine’s 2021 Most Influential Black Corporate Directors. He sees firsthand the value that his expertise in IT, digital business, and cybersecurity brings to the board.
On two of his boards, he is the only director with a technology background. “I bring the tech and cyber expertise to those boards, and also the digital piece,” adds Martin, a member of the CIO Hall of Fame since 2017. “It actually makes me work harder. My fellow board members look to me to make sure we’re doing the right things in our digital strategy.”
I caught up with Martin recently to get an insider’s view from the other side of the boardroom table.
Maryfran Johnson: No matter the industry, digital transformation work is such a strategic focus for the C-suite and board members now. What changes have you noticed in the way your fellow directors view these efforts?
Paul Martin: We’ve all seen organizations pivoting to work remotely and introducing digital enablement into their workforce. It’s giving companies an opportunity to rethink how they interact with customers, connect with supply chains, and drive internal operational efficiencies. With all the focus today on this transformation work, boards must ensure that no organization falls behind on the business benefits to be gained by leveraging technologies in data science, AI, machine learning, blockchain, etc.
What’s great in what I see today is how much digital transformation is embedded into the fabric of the business strategy. It’s part of everything you hear about—the use of data, automation and robotics—helping to drive the operational strategy and new ways to improve efficiencies or reduce waste.
How do you stay well informed about the most critical issues affecting the other industries you cover now as a board member?
Staying current on the digital transformation opportunities, viability, and feasibility are equally as important as other board responsibilities today.One way I do that is to follow the industry analysts. I’ll read their research notes, and I’ll listen in on competitor earnings calls when I can. It’s really key to stay on top of what’s happening and understand what competitors are doing. One trend I’m following in the roofing industry, for example, is the amazing digital thinking around drone use and the way they’re used to do roofing estimates without endangering anyone climbing up there.
It’s really fascinating to see how companies can leverage digital transformation in different ways in today’s connected world. It’s also important for boards to engage guest speakers and outside experts.
As an experienced tech leader on the board, what questions do you bring to the table in assessing a digital transformation strategy?
I look for key ways the company is fitting this work into its strategy. As a board member, your duty is to consider it from a fiduciary standpoint. Is the company doing the best thing for its stakeholders? Some of the questions I often ask include:
- Are we leveraging these digital technologies to connect customers, supply chains, and employees?
- Are we creating an enhanced or winning experience for customers? Driving a new customer experience?
- Are we finding new ways of working for our employees?
- Are we connecting our supply chains more efficiently?
- Are we leveraging the tech to do what we couldn’t before?
What other areas in these tech transformations are critical for boards to delve into?
The heart of any digital transformation is the data. We do this work because of those data benefits: the ability to apply AI or machine learning in ways that drive greater business insights. That’s very key, using this work to improve decision-making with better data visibility.
Another area to look at is how you’re leveraging robotics in digital services, to drive automation across your operations. Are you driving efficiencies on the factory floor? With your employees through RPA (robotic process automation)? And, of course, the cybersecurity aspects around all this work are always critical.
You joined your first public board in 2017, while still working fulltime as CIO at Baxter International. How did that opportunity come about?
I joined Baxter as CIO in 2011, and in 2016 I was presented with the opportunity to join my first public company board. An executive recruiter recommended me to the Unisys board, and with the approval of Baxter’s CEO, CFO, and head of legal, I was able to join. They said it would be good for my executive development and that I’d bring business insights back to Baxter, which I did. I would tell other CIOs who want to serve on boards to start looking now, in their current roles, if they have the opportunity.