Developing a digital culture at U. S. Steel

At one of the world’s largest steel companies, digital success springs from solid business cases, a culture of innovation, and diligent change management, says CIO Steve Bugajski.

Steve Bugajski, CIO, U.S. Steel
U.S. Steel

After a long career in the healthcare industry, including 10 years as divisional CIO at United Health Group, Steve Bugajski made an industry switch, joining U.S. Steel in 2008 as a global IT executive. He became CIO in 2019 and assumed responsibility for the $10 billion steel producer’s entire global IT organization, including delivery of its overall digital strategy.

I spoke with Bugajski about the many digital initiatives underway at U.S. Steel and the organizational model and culture that enables success. What follows is an edited version of our interview.

Martha Heller: What does “digital” mean to U.S. Steel?

Steve Bugajski: We define digital as automation, smart manufacturing, mobility, and advanced analytics. We are using technologies within each of these areas to gain better efficiencies and insights into operations, quality, and our customers. Digital also involves upskilling talent, developing new capabilities, and defining new operating models.

Our strategy is to use an agile approach but to ground our initiatives in solid business cases. We recognize and correct failures quickly, but we also want to avoid pilot purgatory, a continuous cycle of pilot programs. We look for business cases that are foundational enough that they will accelerate use cases across the entire global organization. When we see something working in Europe, for example, we are always asking, “Can we use it in the US?”

What are a few examples of digital initiatives?

One is our big data lake. Early on, we were able to create a strong business case that enabled us to implement a data lake that could be scaled across the organization globally. We started with a single use case, and once it went live, we saw the number of new use cases—from scrap utilization to predictive maintenance—explode. We’ve delivered about 25 projects already, and we have more than 100 in the queue now.

That implementation of the data lake, and the use cases that resulted from it, set the stage for establishing our advanced analytics group. Traditionally, we did some operational and customized reporting. Today, our data scientists and engineers are cranking out machine learning and IT models.

So, the journey was from a data lake with one use case, to multiple use cases, to a core analytics team, to pulling our business partners into these projects. In this way, the core team became a catalyst for talent upskilling in our business units. For example, we’ve been providing advanced analytics training to U. S. Steel’s research team. We even have a certification process that we take them through so that, over time, a greater percentage of our employees will have analytics expertise.

What advice do you have for CIOs who want to get an advanced analytics program off the ground?

Look for use cases that are right in front of you. Like most manufacturers, we’ve always collected a tremendous amount of data, but we didn't do much with it because we did not have the technology. My advice to CIOs is to work with the data that you already have, where you can dust it off and, by putting in a data lake, deliver something that your business partners have already asked for.

I would also suggest you start in an area where you have good foundational technology. In some cases, we found that while the data was there, the network in that particular area wasn't designed to handle the edge computing that the analytics would require. So, we did not select those projects as our initial use cases.

You mentioned that automation is a subset of “digital.” Can you discuss an example?

In our automotive group, we started with robotic process automation (RPA). The process of changing a supply chain partner—something that happened pretty much on a quarterly basis—required a lot of hands-on work by our sales team. So, we developed an RPA solution that eliminated the need for the sales team to perform the manual work and completed the process in days instead of months.

To introduce the solution to our operations group, we drew up these little cartoons to describe how RPA works. We would take these vignettes to each department and show them videos of how to use RPA. We started out with just one RPA use case, which then evolved into a mature RPA center of excellence—our “bot wranglers”—who have developed solutions that are now performing 40,000 hours of work. We are also running advanced analytics on top of our RPA, so we can see which new solutions will yield the highest value.

What is the culture at U. S. Steel to support your digital strategy?

We are building an inclusive and innovative culture. We do not want anything we do to be an IT initiative. We don't want to pull our operations groups into automation projects; we want to be pulled in.

To achieve this, we work in cross-functional teams with IT, operations technology (OT), our partners, and even universities. We also hold monthly innovation sessions where I invite in trusted partners. I tell them that this is not a sales pitch; it’s the opportunity to talk to hundreds of people about smart manufacturing, 5G, drones, or advanced analytics.

We also very recently kicked off a digital awareness training program for our operations leaders who have not yet been involved in a digital project. Maybe they don’t realize we can use a drone to capture plant information as opposed to guessing what is there, or that we can use predictive analytics to allow them to think further ahead, or that a bot can save them time.

The key to increasing digital awareness is visibility. We created a website where we define the four areas of digital—automation, smart manufacturing, mobility, and advanced analytics—to ground our use case conversations. The more common our understanding of digital, the faster our journey.

How are you changing the culture inside of the IT organization?

We started by simplifying the IT message so that it is only ever about three things: run, protect, innovate. We’ll say, “We're going to have a run conversation," and everybody immediately knows the conversation is about maintaining services. If we say “We’re going to talk about protect,” then the conversation may be about improving our cybersecurity posture. When we say, “This is an innovate conversation," we can expect to discuss a new mobile solution, for example.

We also created what we call a digital studio that can spin up—and down—innovative projects quickly. It’s an agile group with fewer than 10 people, from architecture, project management, finance, change management, development, operations, and sometimes, our university partners. The digital studio has been an important piece of creating a customer-centric IT organization.

How are IT and operations technology (OT) converging at U. S. Steel?

Traditionally, IT has been servers and PCs and OT has been process control and automation. But for us, the line is blurring. Right now, the OT group is piloting and executing projects such as pump house automation, which involves the IT work of networking, loading data into the data lake, and getting the analytics out. The work takes a stronger partnership between IT and OT than ever. That’s why we are pulling OT people into all of the innovation sessions we are doing in IT; they are also an integral part of our digital studio.

With all of this transformation, what have you learned about change management?

In my career, I’ve seen excellent, poor, and non-existent change management, but most projects depend on it. That’s why we make sure change management people are a consistent presence in our digital studio.

Good change management relies on communicating the simplest message: What are we doing? Why are we doing it? What does it mean to you? Get a consistent message out to your user base, and make sure your senior executives are communicating the same message. Focus on getting just one project done, and when you’ve delivered it, celebrate the success. That’s when innovation becomes contagious.

Copyright © 2021 IDG Communications, Inc.

Download CIO's Roadmap Report: Data and analytics at scale