Shannon Gath, CIO at Teradyne, joins host Maryfran Johnson for this CIO Leadership Live interview. They discuss strong IT governance, GenAI explorations, robotics in IT, evolving cyber threats, balancing productivity and risk, and more.
00:00 [This transcript was auto-generated.]Maryfran Johnson 0:05Hi, good afternoon. Welcome to CIO Leadership Live. I'm Maryfran Johnson, your host for the program today and CEO of Maryfran Johnson Media. Twice a month we produce this video show and podcast with the generous support of my email@example.com and the CIO Executive Council. We're streaming live to right now on LinkedIn and our CIO channel on YouTube. And we encourage any of our viewers who are with us for today's program to join in the conversation with some questions of your own. Our editors are watching the chat on both LinkedIn and YouTube. And we'll pass along those questions directly to my esteemed guest today, who is Shannon Gath, the CIO of Teradyne. Shannon joined Teradyne in April of 2001, charged with leading the company's IT organization, including all of its customer facing digital systems, internal technologies, and information security. Based in North Reading Massachusetts. Teradyne is a $3.7 billion company employing 6500 worldwide. It's a fortune 1000 firm that provides advanced testing equipment technologies for market innovators, such as those producing smart devices, semiconductors, medical equipment and data storage systems. Tara dines robotics division provides collaborative and mobile robots to the manufacturing sector as well. Shannon got to Teradyne with more than 25 years of IT leadership experience in public and privately held companies across technology life sciences and financial service industries. Before her current role, she was the CIO and M mag pharmaceuticals. And before that a VP and Chief of Staff for enterprise technologies at Fidelity Investments. Shannon is very well known and admired in the Boston area CIO community and beyond. This year, she was named Boston CIO of the Year by the in the enterprise category of the Orby awards. And most recently, just a few weeks ago, she was named mid cap CIO of the Year by HMG strategy. In her board work outside of Teradyne. Shannon serves on the board for women's money matters, a nonprofit that's dedicated to helping low income women and girls build financial literacy and security. And most recently, she joined the board for sustainable it.org, which is another nonprofit and committed to advancing global sustainability through technology leadership. Like like myself, Shannon is a very big believer in all the good work you can do as an IT leader. Shannon, thanks for joining me today in our studio. It's great to have you here.Shannon Gath 2:59Thank you, Mary. Fran, I'm thrilled to be here.Maryfran Johnson 3:01Good. Good. We love having people come in. Tell us about let's start out talking about Teradyne business, because it's a very, it's a big and relatively complex business. And it's different customer segments. How how the business has been doing it and how the customers are adapting to these less challenging few years we've all been going through.Shannon Gath 3:24Yeah, so Teradyne has two major divisions. One is automated testing for electronics, the other is industrial automation. So things like collaborative robots and automated mobile robots. With the pandemic over the last few years, Teradyne has become even more relevant. The fact that we found ourselves in a position where we were dependent on manual labor, to be able to embrace these automated technologies will really help companies become more resilient. So Teradyne, as a whole of the last few years has done really, really well, because there's just a huge tailwind pushing in that direction.Maryfran Johnson 4:04Great. Well, and I know that you've been with the company now for two and a half years. Yeah. And but when you arrived there, was there already a strategy for technology across the enterprise? Or was that part of your marching orders coming in?Shannon Gath 4:18Yeah, there wasn't a defined enterprise technology strategy. When I first joined, they're at the point in time they were looking to hire a CIO, I would say there was a shift in the executive team, where they wanted to really think differently about it, I wouldn't have joined Teradyne had there not been that opening because the leadership team really understood that technology should be a strategic enabler for the company and not just a service provider. And I think historically, it has been more of a service provider. So with me coming in, I brought that experience with me. And they really embraced me as part of the leadership team to really drive in a new direction and with the leader worship team, we were able to build a multi year enterprise tech strategy based on all the different business areas underneath the Teradyne umbrella. So that we knew for every dollar we had to spend on technology, we were fully aligned on, what's the best way to get there.Maryfran Johnson 5:14Now, was that the sort of strategy that you were already already underway at AMAG Pharmaceuticals? Oh, IShannon Gath 5:21mean, business to business. They're so different. So aren't they? Yeah, because it really isn't about technology. It's a it's about the business. So what we did, you know, I personally interviewed over 100 different leaders at Teradyne, and dove deeply into where they were, what their growth aspirations were, what capabilities were going to be required in order to get to those growth aspirations. And then we aligned on the technology investments that would build to those capabilities. Okay, so it's so unique and different company to company, there's really not the same.Maryfran Johnson 5:51We sat like a first 90 days strategy, if you can remember all the way back to April of 21. Interviewing 100 People takes a while I happen to know that.Shannon Gath 6:01So I would say it's two separate efforts, I think my first 90 days was really focused on what's the strategy for the IT organization. And in the first 90 days working with the the leadership team, we built like a three year transformation of the IT team itself, in order for the IT team to become strategic enablers, we had to restructure the team, we had to put in IT governance, we had a lot of different things from a people process and technology perspective that we would need to move towards over the next three years, separately, was an investment to really do an enterprise tech strategy, once we kind of understood who the IT organization was where we're gonna go and put the right leaders in place to be able to drive that type of comprehensive enterprise technology strategy.Maryfran Johnson 6:47Well, and I know we're gonna dive deeper into that restructure and the what the team is like, and all, but when you think about kind of then and now, what are the kinds of capabilities the tech organization has become most known for? On the business side of Teradyne?Shannon Gath 7:05Yeah, I think the biggest change is that technology leaders now have a seat at the table. And they've been embraced into the various leadership teams for each of the business units. So that to me is the big, and there's a lot to it. There's a reason they're they're welcomed at the table. And part of it is how do you collaborate with those business areas to help be part of the business strategy development? Yeah,Maryfran Johnson 7:28well, and we're not just talking about one table our way? That's right. A lot of times when people say the seat at the table, they're thinking C suite and all the CIOs and C, you know, the C suite colleagues, but you actually ended up putting these leaders at tables in all the different business units. Yes. Oh, yes, absolutely.Shannon Gath 7:46Because they're just so different. Their growth, aspirations are different. They need different technologies in order to be successful.Maryfran Johnson 7:52Okay. Let's see. I mentioned earlier said something about your marching orders coming in the UN, obviously, you've had it underway now for two plus years. But was there something very specific that the leadership wanted to see out of it, it's great to have an enabled strategic thinking tech organization. But that sounds almost esoteric when you think about the day to day ways that business runs? Yeah,Shannon Gath 8:21you know, I, I think there was a understanding that technology can drive competitive advantage. And then I think they were looking for a leader that came with that experience to help build that and in parallel with the rest of the team. Okay. Yeah.Maryfran Johnson 8:40Let me ask you about NOC digital transformation. Because as you know, when we talked earlier, you pointed out that that has become such a hackneyed phrase. But I have taken to asking CIOs, what does digital business mean, in your particular industry? I mean, we're all online and everybody's using various digital products. But is there anything amazingly different now about the way digital businesses running at Teradyne? Or a direction that you're heading in? Yeah, IShannon Gath 9:10just think, for the most part, we are looking for robust, scalable, flexible solutions that are going to scale with the company and unlock, you know, revenue for growth, address risk across the board. And all of that becomes a digital transformation at the end of the day, but it's very specific. And, you know, early benefits driven.Maryfran Johnson 9:33Okay, can you give me an example of something that very specifically brought about a benefit?Shannon Gath 9:40Well, so I would say our journey moving towards sort of a global one, cloud ERP is going to be the biggest one that I you know, I'm gonna see in my tenure, I can't imagine anything much bigger than that, because you can think about the financial, the operations groups, all of their business practices processes are grounded in a single platform. Yeah, that will be probably our biggest trend. information,Maryfran Johnson 10:00how many platforms? Are you going to have to meld together on this?Shannon Gath 10:05There are four.Maryfran Johnson 10:07You're lucky. I've actually talked with some who said, Well, let me see we have 14 different ERP systems. Because Teradyne is big. You've got 6500 people around the world, you could end up with a whole lot of small divisions running their own financial systems on a different platform and that sort of thing. Yeah. Do you feel lucky that it's only four? or Yes, yes, no.Shannon Gath 10:32I'm not bored.Maryfran Johnson 10:33No, no, I imagine not. I imagine not. Now, do you a point like, how do you let's talk about how you approach finding and arriving at a global ERP platform. You're in the early stages of it now. So you're basically kind of sussing out what you need to do.Shannon Gath 10:50Yeah. But I would say it started with the enterprise technology strategy, because it was very comprehensive. And we looked at everything, including current state assessment, like where did we have risk and in all the capabilities across the company in the underlying platforms, and then figuring out what are the highest priority risk areas? And then putting investment towards that in our our midterm planning? Okay. Yeah.Maryfran Johnson 11:13All right. Excellent. To you, do you get out in the industry? A good deal? I mean, even even in during the times of the pandemic, you've been on panels, you've done a lot of zoom meetings, that sort of thing. What would you say are some of the common problems that you run into that other your CIO peers are solving or or are highest on their priority list? And it could be in your own industry, but it's more likely to be a mix of industries? Yeah,Shannon Gath 11:44I mean, I think we all have the challenges of getting to or modern technology. But those are kind of table stakes for CIOs, I would say the most relevant one right now is generative AI. You know, I recently went to the root Institute, which is, you know, part of northeastern really doing deep dives with, I think it was 30 Different CIOs from the Boston area just trying to understand generative AI. Yes. And you know, as part of that engagement, they asked, you know, all the CIOs like, Would you like to be on a panel? And yeah, I think all of us said, No, because all of us are still in learning mode. We're trying to understand it. So I think the biggest challenge people are faced with, there's huge upside around productivity gains, by leveraging that technology, but it comes with balancing the risk to the organization, and some of these technologies are still not mature yet. So really, understanding that is is key right now. Because you want the your organization and your company to benefit as much as possible from that go for competitive advantage, but certainly not at the risk of you know, hurting the company in some way. Well, yeah.Maryfran Johnson 12:49And then that's the thing about, I don't, I can't remember the last time we saw this much positive buzz around a big new phenomenon like Gen AI. I'd love to say it was maybe blockchain, but I can remember trying to get CIOs to be from financial industries, especially to come and be on a panel and talk about blockchain. And nobody would do it. You know, it was all like no, or playing with it in the lab, but it's a technology looking for a reason to be and and when you and I talked about this earlier, you said you thought that the one of the reasons behind this big huge buzz was the natural language capabilities of these AI systems. Right? What has what came out of the ruins stitute discussion that you had with the other CIOs? I know, everybody's in learning mode. But were there any aha moments around that where you thought, yes, that could be useful to us? Well,Shannon Gath 13:43I'll start by saying, you know, I've certainly been in organizations where we're looking at blockchain and things like that. But there's a limited amount of people that benefit from that. And certainly more in some industries benefit from it more than anything. Yeah, but generative AI everybody benefits from but I think the big takeaway for me from the RU Institute, was more that generative AI is not magic. Magic, that's probably a problem. But but it really it's just software at the end of the day. And sure it's a little more complicated in the architecture. So let's it's having some early challenges. But you know, my my take on it is your vendors that learn how to leverage generative AI in meaningful ways for their customers, and protect them are going to be the ones that win and I think what CIOs should be doing right now is, you know, when you make product decisions right now, it should be also evaluating that vendor and whether or not they're in it for the long term and whether or not they're going to have that level of engagement and openness with you to help them help them communicate to you like how do they air gap your company from having some sort of risk associated with you know, data or anything else that you know, could hurt the company?Maryfran Johnson 14:54That's a great point. That is a great point the how are you approaching and you don't have to name names on the vendors. But how are you approaching these kinds of discussions? Is it? Is it essentially an extended discussion about the advanced data enterprise enterprise data strategy? Or is it always like a separate box for the Gen AI stuff?Shannon Gath 15:16Well, I would say, there, there's a huge appetite by all groups across our company around generative AI and what it can do for their team. So we actually have organically built a cross functional team of people that are, you know, basically the steering committee of that making sure we have strong policies in place. And then also making sure we're sharing learnings from other areas, something that worked really well in one space, sharing it with another area of the company, that they could embrace it in a similar fashion. So there's a lot of community sharing across the groups, which I think is very, very helpful. And, you know, I think the the mindset that we have is not shutting it all down until we figure it out. It's, you know, how do you take some level of risk with precaution to allow some level of the productivity games with with managing the risks. But, you know, one of the companies that branded Microsoft branded copilot, and what I like about that branding is, it's not meant to not have a human involved with it, right? It shouldn't be just something that runs off on its own. All of the genitive AI requires, like human collaboration, verification, you know, a lot of these companies are getting smarter about watermarking sources, so that, you know, the mystery of it, so to speak, and demystify that magic that, you know, some people fall,Maryfran Johnson 16:38it's magic to somebody, it's evil magic to others. I mean, it can look to entire groups of either I've seen, you know, notes in like, some of the places where I've had conversations with people where they say, Well, nobody's going to need editors anymore. And you know, you get this clutching feeling in your throat thinking, Well, you know, it's like saying nobody needs libraries anymore.Shannon Gath 16:59Well, why would say if I'm sitting in the CIO seat, one of the things that we always deal with in terms of cyber risk is phishing campaigns. Yeah, that's a big risk to every organization. And now, the capabilities of chat GBT, where it used to be, you could see an email was misspelled. And it didn't seem right. That it was clearly phishing. Yeah, it's becoming harder and harder to detect that.Maryfran Johnson 17:20Oh, do you find? It sounds like do you have? Do you have products that are actually in production in use in people's hands right now at Teradyne? Or is this still pretty much in the kicking tires in committees kind of fit? Yeah,Shannon Gath 17:35we've we've launched a few different capabilities, we're highlighting a ton of different things. Because there's so many different technologies out there with different benefits, we're trying everything and then the things that are going to be successful we'll we'll run with as best we can. The group really, you know, the whole company, I feel like collaborates really well across the board. And they're very giving and generous and sharing with each other so that the whole company can succeed. SoMaryfran Johnson 17:58well. And that actually makes me want to pivot into talking about the company culture Teradyne, because I know that's one of the the big deciding factors for you when you joined, what is what is so great, and what is so different about the company culture you're experiencing? At Teradyne? Because you've worked in financial services you've been in in pharma, those are tough, regulated industries. And this is it seems like you're having more fun.Shannon Gath 18:24Yeah, I definitely find it to be the the perfect culture for me personally, and I'm very drawn to Teradyne. I'm very fortunate that this position was open. For me, you know, I'm an engineering background. So my BA degree degrees in mechanical engineering area, and you're very much a data decision making company, which plays very well to an engineer. There's not all the politics and now that we're have like highly functioning data decision making, that's where I thrive. And I think a lot of other people do, I've seen different environments that have a level of toxicity that just gets in their own way of doing things. And as long as we have the right data to support a good business case, we move forward. So you know, I think it's a easy environment for people to thrive in. And I mean, I've never seen such tenures in my life. I have somebody on my team with 46 years in the company. Yeah. AndMaryfran Johnson 19:14the company was only set up in 1916. Yeah. So it's, what 65 yearsShannon Gath 19:19old? Yeah, yeah. So it's, it's amazing. People don't leave Teradyne. They just really enjoy the culture, the people and my husband actually worked for Teradyne, a long time ago. And I knew a lot of the people from Teradyne back in those days. Oh, and they're still there. So I also knew that, you know, part of what makes your job enjoyable is the people around you and the Teradyne family is a great place to be.Maryfran Johnson 19:45That's wonderful. That's wonderful. Let's pivot back over and talk about business and tech priorities. Thinking ahead to 24 and beyond since you're going to stay forever. What do you find? Now that you've accomplished the things you've accomplished in the last two and a half years and gotten you to where you are now, what is next for the tech organization? And how and I know, it'll be partnered with the business priorities? So what's high on the priority list?Shannon Gath 20:13Yeah, I mean, every CIO is gonna keep cyber on the top of the list. Yeah, I think we have a lot of work that we're doing in terms of growing the organizations on the robotic sides, it's a high growth market. So there's a lot of things in sort of the the CRM space and trying to unlock revenue through the service organization and whatnot. So there's a lot of work going on in that space, we are dealing with some of the operational risk on some of the legacy platforms. So modernizing that I mentioned, cloud ERP is probably going to be one of the biggest transformations that we undergo in the coming years. Yeah. And beyond that, I would say, just learning how to best leverage and innovate AI to really getMaryfran Johnson 20:58that really is very high on the priority list. That's cool. We've been saying that a lot in there's there's article, I think there's a couple of articles every day on cio.com, talking about different things about Gen AI, and what CIOs need to be doing. And it sounds like, despite all the buzz and the hype around it, it is very real. It's veryShannon Gath 21:18real. So that to me, Blockchain wasn't as real in the sense of not many people would touch it. Right. But general AI, everyone's touching almost on a daily basis, I think. And, you know, one of the things that came up at the ruins stitute, as they were saying, Jennifer AI is not going to replace humans, humans that leverage genitive AI are going to replace humans that don't embrace made a lot of sense to me, itMaryfran Johnson 21:41was it was kind of this is the bandwagon and you want to get on it somewhere. Right? Oh, and so it's becoming hopefully a bigger and bigger, making people more effective in their jobs. Yeah, I know. And replacing editors, I keep hearing somebody else you'd be talking to someone on Gen AI would be doing this conversation, right? You'd mentioned legacy platforms. As a company that was established in 1960, you've probably got quite a bit of those. And you've got four different ERP systems. Now, how do you approach tech technology debt? I think that's a nicer way than talking about legacy systems. But tech debt is always it's often right up there with cybersecurity and talent issues. For CIOs, IShannon Gath 22:25would just say technical debt is tied to cybersecurity. So I think some of the investments that we've made in the last couple of years, because there's a lot of peer companies that got hit with ransomware, and other things, the threat is real. Making sure we have a good handle on our operating environment is is critical. So understanding where we have vulnerabilities, making sure we have a task team going after them on, you know, the right timely manner. That's all part of it. And there's new platforms and systems that we've embraced to help us to see the cyber assets that we have in our environment, what level of vulnerability, and then we've mobilized ourselves to be able to, you know, continue to have a level of resiliency that we need. Okay. Okay,Maryfran Johnson 23:04we have a question from our alert watch audience. And I think we've talked about a bit of this already about the big challenges you foresee with Gen AI, but it also mentions hiring talented people. Does that have an effect? Are you starting to look for deeper data management experience or anything related to Gen AI in your hiring efforts? Yeah,Shannon Gath 23:28we actually just posted a role and in that space, did you because it's going to be critical for our company's success is to learn how to embrace that in the most thoughtful way possible. Yeah.Maryfran Johnson 23:38Does that mean more data scientists? Or is there now anotherShannon Gath 23:42machine learning? It's a collection of skill sets that we are trying to build into the team? I would say, and that's part of our tech strategy, understanding where you have those skill gaps, and then how do you you know, build the team going forward, and then developing up so you know, you got a team of people that are not stagnant and whatever technology they know, they want to learn, they want to grow. And, you know, getting access to them to the technology, the new technologies, trying it out, we do a lot with cloud and other things. So there's a huge appetite from the team itself, just to to understand them and like learn how to use them on a normal basis.Maryfran Johnson 24:15And how to use supply that appetite. What do you do to make sure that that kind of lifelong learning is taken, I do have a Teradyne and it university which broach there.Shannon Gath 24:26So we have a couple things. So I would say it would give certainly access to resources, like learning development platforms and whatnot that the team can use as many you know, or as few training opportunities that they want to in their niche areas. The other thing that we institutionalize as part of our IoT journey is career development planning. So everyone on the IT team has a formalized career development plan where we talk about like what type of work you find fulfilling, what don't you find fulfilling because those are equally important conversations to have with your manager. Where are your strengths where your development areas, what are your sort of short term mid term and long term goals who this key stakeholders around you. And I think always making sure and it's not about a document so much. But it's about a dialogue with your manager, because what I found is, the more of those discussions that come up when opportunities, you know, come up and say there's this new project in the site, security space, you can connect it to somebody on the team that really has articulated a desire to be so you're you're getting better engagement across the team, you're connecting opportunities with people that really want to grow in that space. So career development has been a big win for us. Yes.Maryfran Johnson 25:33Well, and this is not necessarily new for you. I mean, you have done a lot of team career development throughout your tenure and other CIO roles. For instance, I don't know our regular watchers of the show may remember that you were on the show back in January of 2019. At AMI pharmaceuticals, and I'm sure we talked about talent at the time as well. What is the what is it about the the way you're approaching it? Now? How do you make sure that all of your senior leaders who report directly to you are doing the right things?Shannon Gath 26:12Mmm, hmm. That's a kind of a broad question. Think about it. So I guess, down. You know, one of the things I feel responsible for is, as the leader of IT leadership team is to create a culture where we challenge each other. And I can give you an example, I feel that if I put an idea out there, I want my I need my team to challenge my idea. Because I think when we put all of our collective experiences together, we're seeing the problem from different angles. And we're solutioning. And from all different levels of experience, yeah, we make better decisions as a as a team. So I try to set that precedence. When I take a new role six months into it, I usually have HR come in and facilitate a conversation where I, it's tough day for me, I leave the room, and they talk about you know, Shannon's leadership style, because every team is different. Yeah. And it's like, what would you start, stop or continue with her style, so that I understand what the team needs. And I can tell you, I've been in two different organizations. One was saying we need more informal time together. And one was saying, okay, too much informal. It is very different, you know, bowling parties in the pizza, right? Like I got a family to go to. So we have very different in each team feel support in different ways. They feel support. So understanding how they what type of support they need from me. And my role is really important. So I have to show that I'm listening and open into feedback as much as I expect them to be open to feedback.Maryfran Johnson 27:40Yeah, I talked with another CIO, a couple of shows ago, and he had the surprising discovery from one of those CIO out of the room kind of conversations, that everybody felt that somehow that they needed to support his idea in some way so that he didn't actually realize they were supporting it, you know, I mean, it was, it was almost like a remote sucking up problem that he was running in with, like, you know, like, great idea boss came under that. So that can be really difficult. Yeah. Because he said he would put his ideas out there. And, you know, and ask the team to shoot them down, and they weren't using real bullets. So it's hard to do that. Yeah. Because you're essentially in the in the bubble with everybody watching, but you have actually promoted or you have brought along when you left a mag, I think you mentioned three or four of the people that reported to you are CIOs now that other companiesShannon Gath 28:36are. And I think part of that is I feel like one of my most important priorities as a CIO is to build the team to be ready to take my job in a heartbeat succession plan. Yeah, succession planning is big. And part of the way I get there is by restructuring the team to have almost sort of mini CIO roles good, where they have both the strategic responsibility for strategic direction of that business area, but also the execution responsibility. So the operational so they would have the structure itself would be they're responsible for sitting on the leadership team of that business unit, with a seat at the table, helping to build the strategy, but then also overseeing the resources that are executing on it. And you know, that builds exactly all the right skill sets for that they would need in the CIO role. It just happens to be covered more portfolio, more portfolio. Right.Maryfran Johnson 29:33Well, good. And that actually leads me very naturally to our next question. Let's talk a little bit more specifically about the size and scope of the tech team and how it is structured today. To make all this this actual magic happen.Shannon Gath 29:49All right, IT team is about 350 people strong. Were all over the globe. So our biggest presence are in places like the US Costa Rica, Denmark and In the Philippines, we are structured in a way. So we're centralized IT organizations supporting every area of the business. The IT leadership team has three different business relationship managers to cover off in the different types of businesses at Teradyne. So we have one that's focused on all things. automated test are in the semi space, we have one that's all on industrial automation and robotics. And then another one that's focused on the corporate functions that are the service organizations to the rest of the business usuals. And then next to that, we would have the Enterprise Architecture group. So the group really responsible for the technology decisions, building a city map of what of the technology is going to help us grow and scale the company, and all moving towards that city map together and thoughtful decisions along the way. Good. And then we have infrastructure and operations group, those are all things sort of the IT operations, so your URL SaaS, your global account, management, etc. We have a very strong what we call it Business Management Office, which is sort of the glue of the it operating model. So it's all things IT governance, strategy planning. It has our practitioners for project management, its portfolio project and program management, financial manage is all the things of the operating model, basically, what group remote security. So in the weeds of security, that sometimes I forget it. So yeah, having a information security group that's not only responsible for enterprise security, but also helping with product security,Maryfran Johnson 31:33security. That's right. And all that reports to you all of information security, do you have a like a sock a security operation center?Shannon Gath 31:40We do. Okay,Maryfran Johnson 31:41did you have to create it? Or was it in place when you got there? Um, we'veShannon Gath 31:44had a hybrid model. And we just recently made a couple of switches within that, to just strengthen it. But it's a hybrid model. I feel like that's the right thing for us.Maryfran Johnson 31:53Good, because you can hire the outside the really deep expertise. Yep. That might be difficult to get and grow and scale as as needed. Right. Okay, good, good, good. The word governance came up a few times, and we haven't really delved into that very much. And I know you are, you've been interviewed about that about your belief and strong IT governance and how it is so connected, interconnected into everything that successful CIOs do. Talk about how you have approached that at Teradyne. What the, if a CIO was asking you for how do we really get started with governance that everybody's going to like or respect, right? Because a lot of times, you're talking about governance, and we used to try to do cover stories and CIO magazine about it. And everybody around the table, there's a bunch of editors and writers and their eyes would be crossing, they'd be like, no good stories with governance. But there areShannon Gath 32:46aren't there? Yeah. Well, I would just say no one likes the word governance. And in fact, I remember as brainstorming going, is there something else we could call it? At the end of the day? It actually is, it actually is becauseMaryfran Johnson 32:57it sounds like bossiness or politics or something like that. Yeah. But you know,Shannon Gath 33:01seeing it well executed, you have a very, very much appreciation, you can get past the word governance. Yes. But for me, what governance is all about is cross functional governance around all of the investments in the execution of the portfolio of work, but all things people process and technology. Yeah, so it's, it's the leadership of not only the business units in terms of commercial resources, but it's like finance, sitting at the table it understanding that technology, all working together to really prioritize the different investments and projects going on across the board. Yeah. Our IT governance has literally stack ranked one to end all of the projects. With the idea being it's always crystal clear what the priorities are of the leadership team. And if you're somebody that may be working, QA, and you work across projects, in any moment where you're getting pulled in two different directions, you know exactly where to prioritize your time because the leadership team has made it crystal clear. So for me, it's always important to make sure you have that level of stack ranking. It's not always easy to get there, to have that. But just having that in place, helps us to make trade off decisions a lot easier. When times get tough in your finances go well, okay, what's most important, and then things above and below the line are just easier decisions to be made. So you can make decisions quicker, faster.Maryfran Johnson 34:17What are some of the key questions that when you're stack ranking, what are the questions you're answering as you're considering different projects? Yeah,Shannon Gath 34:26so I think it's all about quantified benefits. And we try to always have an apples to apples comparison. Another tough one, quantifying, it is hard. What we do is make sure each one of those investments have a name, business sponsor. You know, going to own what those quantified benefits are and the job of like a PMO or a business management office is to not only frame those up to do the comparison, but on the other side of that once it's executed go back and measure did you actually deliver on those benefits or not? And with the name sponsor responsible for for you know, delivering on it That model seems to work pretty well in terms of transparency and accountability. And we focus on, you know, basically whether or not it's a growth oriented project efficiency or a risk project. That's usually our big categories.Maryfran Johnson 35:13How do you handle it as the CIO? Because at some point, governance always gets a little politicized, where somebody in the company wants their project higher on the stack. So I'm sure you have a way to deal with that. How do you approach that? Well,Shannon Gath 35:29I guess that's why I love the turret and culture so well, because I know how important it is, for me to be successful in this role is to have effective governance. And when you are a data decision making company, things like that becomes a lot easier, right? And you can get there faster. So I do think our culture in our environment plays very well to having, you know, effective governance in place.Maryfran Johnson 35:49That's nice. Well, you must you probably have a lot of scientists, and a lot of scientists, lot of engineers, and they are very logical and data driven.Shannon Gath 35:57So you're like speak my language?Maryfran Johnson 36:00Don't say I know the mechanical engineering language. Yeah. Let me see. We have some questions from our audience. And this one, you know, this is up to you. But could you be more specific about one Gen a AI app or back to Gen AI, that is in production in either generating revenue, or offering proven efficiencies, maybe answering some of those stack questions on the way governance is done? Is there anything? And if you have to pass on it understood? No, IShannon Gath 36:31would say I could answer a couple. So the ones that are most beneficial to me right now are buried in our security products that are keeping our company safe right now, that's very good, then, you know, doing threat intelligence, and things like that are all built into our operating model, because our vendors that we rely on for our security controls have built it into their products. So that is very, very relevant for me, personally. And when I think about the broader organization, there are offerings like being enterprise, which is probably at this stage not as mature as a chat GBT. But it's air gapped. So you know, employees can use that on a day to day basis without worrying about, you know, you know, major risk for IP or anything like that. Okay.Maryfran Johnson 37:13So that sort of so it may not be actually generating revenue, but it's avoiding damage. Yes, yes. Yes. It'll be a lot more important. Right. ButShannon Gath 37:21it you know, the, it's tapping into the brains and the productivity of our team members yesterday. Yeah.Maryfran Johnson 37:28Are you finding when you have those conversations now, with your different vendors? Are there new or different questions, you're asking them to make sure that they're on top of all of this? I mean, I know that vendor management is a huge part of being a very effective CIO.Shannon Gath 37:45Yeah. I mean, I think our our list of security questions has grown. Okay. I would say that's probably the biggest change. Outside of that, I would say, understanding their product roadmaps and understanding how they plan to leverage that and also protect us. So I think those are the two areas where I dive a little more deeply with the vendors.Maryfran Johnson 38:05And are you able to share your product roadmap where things are going? And are you able to be as open with the vendors as you're asking for?Shannon Gath 38:15Yeah, I mean, we're all fine. Any NDAs and whatnot. So I think I look at our vendors as strategic partners across the board. So we only both benefit by having an open dialogue.Maryfran Johnson 38:25Yes. Another question. And this is a bigger, broader one as well. And at least it's not Gen AI. So we'll take a break from that. How is the economy and capital constraints affecting your technology project priorities? Or is it affecting it? Cuz I know the company's doing really well. So that may not be as much a front and center concern.Shannon Gath 38:50I mean, in terms of our revenue projections of the company, it is, you know, dependent on the semi industry and consumer like so half of the electronics out there has been tested by a turndown tester. So as that market grows, so, so does Teradyne. So I think that's great. I think there's also on the robotic side, it depends on the level of investment on the different applications. So we use a lot of collaborative robots and different applications like that. Humans don't want to be as close to anymore like welding. So as more and more companies embrace automation, and we make it easier for them to do that, you know, we've see high growth on the other side of that, okay,Maryfran Johnson 39:29so you have not seen any kind of a dampening factor on any of the projects. That's why I think I always ask about priority lists and what things are moving up or down on the list? It sounds like a lot of smooth down on you're not aShannon Gath 39:43lot but I mean, you were very the you know, our leadership team, are great financial stewards of the company, and we know how to be very conservative and not overspend. You know, we're not a company that has had to release a number of employees because we over you know, build a team because you share so many technologies companies have done that we're much more Conservative we, you know, try to play the long game and make sure that we're very thoughtful and conservative financially. So okay,Maryfran Johnson 40:06all right, good, good answer. Let's pivot over and talk about the priorities at the C suite in the board level two of them that you and I talked about were the ESG, environmental, societal and governance policies. And then diversity and inclusion issues, which I know are have always been very close to your own heart. So let's start with the in the DEI space first. I just I never like to drag out the numbers about you know, I mean, when you look at the numbers of like science graduates, I mean, women are always losing those numbers. So. So when you think about that, and approach it, what is the what are you doing at Teradyne? How is the company addressing it? And what gives you optimism and hope for a future where we don't have to have conversations about you know, getting more women into it, right.Shannon Gath 41:01And I would say one of the things that drew me to Teradyne, is their numbers weren't where they wanted them to be in terms of gender. And they were saying so and it's a priority for them. So you know, they've taken a lot of really intelligent decisions to drive better representation across the company. One of the things they did is bring in McKinsey, to educate the leadership team, I think we had over 100 people go through a three month program, and really understanding the problem that exists that systematic and preventing women from being more representative in different levels of the job architecture, it's quite a commitment with three motors a huge commitment. You know, I think what, what I appreciated, especially on the other side of it was that you have all these engineers, they now understand the problem. And now you got a huge workforce all aimed at solutioning for it, which is incredible. And you know, I was one of the people that was on a task force to say, okay, based on all the things that we've learned and what the problems are, if you look at mentorship and sponsorship, how can we use that to help grow our representation retain the talent that we do have, etcetera, and grow those and grow our female population and beyond? You know, underrepresented groups. And, you know, our task force did internal research asking all the different internal research on, like, what worked well, or what people think. And then we did external research. So I actually was part of the team that went out and interviewed some of the companies in the Boston area that are leading the charge in Dei. And one of the companies had this fantastic idea. They had been doing this for five years, but it was mentorship circles. And it was like a lightbulb went off for us when we had this conversation, because I've done mentorship like formal programs. I had such a bad experience. And I'm sure it's different program to program, too. But yeah, one on one matchup wasn't right for us. And then you're like, Oh, I gotta go through this for six months. And I'm fine. No, no, IMaryfran Johnson 43:05can't speak up and say, Please give me another mentor. I don't like this one. Yeah, exactly. What are you gonna do? Yeah. SoShannon Gath 43:12what I liked about this one, and they also talked about sponsorship, and sponsorship is great, but it only hurt. It only helps a very small population of women. Yeah. Whereas mentorship, you can hit more women, but it doesn't always hit the mark. So what I liked about this was mentorship circles was it took two mentors for a subject area and paired it with anywhere from like four to seven women that all wanted to grow in a certain space. And it not only gave you a better shot of a good match with a mentor, because you know, you have two people to match with, but long after this program, and you have a community of support networks, so to speak of like, you know, five to six other women that you can carry with you for the rest of their career. Because when you connect in your day to day job on something outside of your day to day job, yes, you're passionate about you create these meaningful connections that last and serve you well in the in the future. So I love the idea turned on was all on board. They did a six month pilot last year, it was fantastic, huge positive results on the other side, and we are kicking off the next version of it right now.Maryfran Johnson 44:13That is great advance, you know, the meant the mentorship circles, what it reminds me of is the way people that get a chance to go to business school for their MBA, they form one of those networks where they've got multiple company connections and all that outside. But once you're deep in your career, and maybe not necessarily going probably not a lot of engineers are interested in MBA programs, right? That's just it's a great way to do that at work. I've heard it also ERGs like the employee resource groups do versions of that, right. I thinkShannon Gath 44:47a lot of the ERG members that people that are very passionate about are helping be the core team that drives that program. Okay, with sponsorship from everybody, but uh, you know, I think it's also a great way for mentors so you have your executive team numbers being exposed to women they might not run into in their day to day job. And when an opportunity comes up, they now can say, hey, maybe this individual would be good for that new job or new opportunity. So I think it helps women in many ways. Yeah.Maryfran Johnson 45:14And when you say sponsorship, talk about what, what is different between a sponsorship and a mentorship to your mind and your experience? Yeah, soShannon Gath 45:23mentorship is almost like coaching and more situational leadership, coaching and whatnot. I would say, sponsorship is more like opening doors for people saying, you know, I'm gonna put my name and reputation on helping I don't know, Susan, you know, connect to this person that I know in my network and kind of opening doors,Maryfran Johnson 45:43very specifically helping them in their career by putting their name and I vouch for this person that sponsorship. And that should be what comes out of mentorship relationships, surely does. Yeah. In the end of it. Let me see the McKinsey program that you went through the three months. Is there a follow on on that? Or is the ball in your court now? Well, I think are doneShannon Gath 46:08in true Teradyne style, we are using the data and the metrics to help see what kind of progress were making. So I think, as we look at the numbers and look at the growth, I know my team specifically has grown significantly underrepresented groups just in the last year. So I think educating people with the metrics are really important. And I'll also say that I had the opportunity to meet with the diversity, equity and inclusion officer of ServiceNow recently, and they talked about also doing like campaigns around self identification, because I think there's a lot of people that have been turned on for like, decades, right? self identifying wasn't a big deal back in those years. No, true. So you know, having people understand how that drives better metrics, and better understood accuracy. And your dei numbers also is a big win for the company too. So I'd like to see more companies do that.Maryfran Johnson 46:56That's great. Yeah. Well, and outside this, some of your your board work, you're involved in diversity and equity and inclusion. What has that been like, tell us about your board position with the it's theShannon Gath 47:08women's money matters? Yes. Yeah. So it's a fantastic organization. And it really is serving so many women. And, you know, Danielle, who's the executive director is amazing, and driving so much change, and so much more reach to women. But you know, the idea being helping women become financially empowered, you know, it's like teaching someone to fish. Right. So it's meant to be long term, it's really meant for people to get their feet underneath them. And they're just from, you know, it almost three years at this point. It is almost doubled in size. I mean, it's it's crazy growth, and I just feel like they have such a bright future in front of them. And they're just helping so many women. Yeah.Maryfran Johnson 47:52Are they Boston based? How did they find you? SoShannon Gath 47:54I think the reach is growing beyond Boston, but it is mostly Greater Boston area was where it started. But with remote access, and things like that the reach has gone beyond that. Yeah,Maryfran Johnson 48:05that changed. I'm actually surprised you're not being recruited yet for public board companies. Now do you have you don't serve on one right now? I'mShannon Gath 48:13pretty busy right now. Boards and a full time job.Maryfran Johnson 48:16I know, I know. But only just one, just one fortune 500 board we should add to it. I feel like you'd have so much to contribute. Let's talk about sustainable it.org. That's another board a nonprofit board that you serve on. And that is that's a little more esoteric, that's about technology leaders in what they can do for sustainable it. So tell me about what drew you to that. And what you would like to see that organization accomplish? Yeah, IShannon Gath 48:46think, you know, ESG is important, not only for the planet, right? But for company success, your customer success. It's really important. And at the heart of all of that is trying to figure out how you're making progress against it. And it all comes down to data. And the CIO is that HubSpot, looking across the whole company. So I think there's a natural fit for CIOs to be drawn into the ESG. World and sustainable it.org is has been fantastic in terms of developing standards, so people can actually do effective and accurate reporting on ESG progress through the company. So I think it's a collection of of CIOs are all weighing in, you know, CIOs naturally have a, you know, data centers and things like that, that draw power and things that you want to better manage going forward. So they play a role in that space. But I think at the end of the day, they're most involved now, because they're driving the data that's going to help drive sustainable success.Maryfran Johnson 49:44Yes, yes. I was thinking there was a very practical side, where, you know, with the UN, you're working on that already in technical debt, reducing that but I, one of the members of that I talked with was saying that it's not a lot of time. As people may think that oh, well, we have, we use someone else's data center, we've outsourced the problem there. But that's actually also generating a lot of carbon footprint. But youShannon Gath 50:10now incorporating that into your vendor management, your vendor selection process is that those become questions you start asking now that youMaryfran Johnson 50:17may have interesting, interesting. You know, I wanted to we do have another question from our alert audience. If you don't mind circling back to AI again. Talk, you had mentioned that one of the areas where you're seeing real success and are optimistic about in cyber with AI and Gen AI built in, but were beyond the cybersecurity realm is our AI capabilities most important for Teradyne? And for your tech strategy? Yeah, IShannon Gath 50:51would say that the space where it's low risk, early benefit is probably on the service organization. So you know, whether you have products out in the field, the service organization can build in AI capabilities for search, in a natural language type of fashion, fairly easily with almost no risk to it. I'd say the standing that up is short term kind of goals for I would think most companies.Maryfran Johnson 51:18All right, good, good. And I know when we were talking about talent, and we you mentioned it, and then we skated forward with some other questions. But it was about the skills that you're seeking most of now, what are your biggest needs and talent? And if we if they happen to be some incredibly talented folks in that realm, listening to us now, what sort of what kind of skill sets? And what sort of levels are you looking for right now to hire?Shannon Gath 51:44Well, I would say I've always looked at talent in terms of hiring athletes. So I want someone because technology moves so fast, I want somebody that can adapt change, a Constant Learner, but specifically skill gaps in data science, space, and AI and machine learning. All of those are very relevant, and building those into the team are going to set the team up for success.Maryfran Johnson 52:06And when you say athletes, you don't mean engineers who take part in, you know, 5k races, I don't necessarily mean engineering athletes.Shannon Gath 52:15Yeah, no, I definitely do not. I mean, that helps with leadership capabilities. Great, but, but just, you know, people that can flex and adjust and you know, no matter what situation, you depth, they can adapt to it and take the like solid leadership skills and apply it to whatever situation they're in, or whatever role they're in. Okay,Maryfran Johnson 52:34good. Good. Final question. And Didn't I tell you this hour would fly by? What have you learned about your own leadership style in these last few years coming into a company, a new industry for you, and as the pandemic was still pretty much bubbling along, at a high boil, even back then there probably were things you had to change or adjust or expand? And just curious what those are,Shannon Gath 53:01I would say, probably three things. I would say the first thing originally started with somebody give me some really bad advice in my career. And you know, they're like, for you to be successful, you need to act like a man Karpin compartmentalized, I can never say that word, your personal life, and you don't have pictures of your kids. Because they won't, they don't want to see you as a mom, they need to see you as a leader and whatnot. So I would say that was probably the worst advice I ever had. What that led me toMaryfran Johnson 53:33a great quote, I'm going to add that to my question was from now on. worst advice you ever got? Yeah.Shannon Gath 53:38And that was like, take up room in a conference room? And like, that's not me. Yeah, you know, I'll pass on that. But what I would say is, for me, it was, you know, learning to show up as your authentic self, you know, say what you mean mean, what you say and do what you say you're gonna do. And there's a level of credibility that comes with that. And there's a level of trust that you build pretty easily with people if that's how you operate. And I feel like trust accelerates success. And that's critical. I would say the second thing is a continuous learner. Technology moves fast, you can't be successful in this role. If you're stuck back in a decade ago, you really have to learn and grow as a person just as you expect the rest of the team to do the same. And then the third thing I'm going to mention is something that actually came from our CEO, Greg Smith. At one point, he recommended a book to me it was Machiavelli for women. And you know, it was one of those books you just couldn't put down. But it also talked about the unique challenges that women face in the workforce. And it's something that I continue to, you know, sort of broadcast to other women did and I found it very helpful in my own life, whether it's women almost need to negotiate a little differently and why I think it was kind of taking a realistic look at the world and how to be successful. So you know, I love that book. And if others are out there, men women, I highly recommend reading it.Maryfran Johnson 54:56Well, especially for male leaders who would like to get The women leaders on their team to step up more. Send everybody a Kindle version of Emerson. Right? Wow. Well, I have I, how long ago? Has it been? How long has it been around? I've never heard of this one. No, no. I remember, years ago, when I was taking on my very first management jobs and publishing companies, there's not really any training or anything, you just get thrown into a role. And I remember reading a book called swim with the dolphins. And it was more about women's leadership in terms of collaborating and kind of taking advantage of the natural abilities or tendencies women have to just get everybody getting along and that sort of thing. But that is not something I would have associated with Machiavelli. Yeah, it fascinating, repetitive. It's absolutely going to be on my list coming up next. And I'll do one more check. There is another question. All right. What advice oh, what advice would you offer to aspiring CIOs in how you see the CIO role evolving in the years ahead? That's an excellent question. Thanks to our audience.Shannon Gath 56:07Yeah, I would say for me, you know, it used to be that is awful term of like, Shadow IT. If you're really invested in your company being successful, you need technologists in the business. You know, everyone, all of us need to be tech savvy and embracing that finding where we have really strong talent that can drive positive change and working very collaboratively, collaboratively,Maryfran Johnson 56:31collaboratively, clarity that's making a nice good workShannon Gath 56:34together to really achieve a positive outcome.Maryfran Johnson 56:37Yeah, excellent. Very good question and really very good answer. Thank you so much. Yeah, for having me Yes. For coming into our offices here in Needham. It's been wonderful having it's such a different energy I think when you have you know that that back and forth right in person, so really appreciate you making the time. If you joined us late today, do not despair. You can see the full episode of my conversation with Shannon here on LinkedIn throughout the day, but also on cio.com. And on CIOs YouTube channel, cio leadership live is also available as an audio podcast wherever you find your podcasts. And I hope you enjoyed today's conversation with CIO Shannon Gath of Teradyne as much as I did, we'll be back again in two weeks on Wednesday, October 11, at noon, Eastern when I'll be talking with Matt les manis, who is the Chief Technology and Innovation Officer at Sage therapeutics, a brain health biotech company. I know personally, I expect to find out all kinds of useful information in that conversation. Thanks so much for tuning in today. And a special thanks to our half a dozen very active audience members who helped us in the conversation by sending along some great questions of your own. Do take a moment to subscribe to CIOs YouTube channel, which is called CIOs YouTube channel and where you can find all 100 Plus previous episodes of CIO leadership live. Take care out there and we'll see you back here in two weeks. Thanks