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Podcast Transcript

Tania: As organizations are increasingly operating in a digital landscape, corporate boards are beginning to see tech savvy directors and leaders as a powerful asset.

The ability to guide organizations through tech-driven initiatives and opportunities and bring in new technical viewpoints to discussions can reduce risk and create a sustainable competitive advantage.

Welcome to Pragmatism in Practice, a podcast from ������, where we share stories of practical approaches to becoming a modern digital business. I'm Tania Salarvand, and I'm here today with former Goldman Sachs partner and ������ board member, Jane Chwick, to discuss why and how we need to bridge the gap between technology and the boardroom.

Tania: Welcome, Jane. Thank you so much for joining me.

Jane: It's my pleasure. Thank you for having me.

Tania: Absolutely. Why don't we start off with you telling us a little bit about yourself, your background, and how you've kind of navigated your career.

Jane: Sure. My background is very simple. I was at Goldman Sachs for 30 years, always as a technologist. I had a six-month stint at EDS before then, where I learned how to be a programmer. Back then, we called them programmers and not coders. And then I spent the next 30 years starting out as a junior programmer, building trading technology systems, all the way till when I retired seven years ago, where I was the co-head of the technology division, which is about an 8,000 person organization across many countries.

In my time at Goldman, when I started there, I was as Cobalt programmer working on a Wang computer system, which was considered state of the art at the time. And then through the years, a few years later, this is in the late ‘80s, we started bringing in PCs and building trading systems for traders on PC platforms. First, on things like dBase, then moving on to UNIX platforms and C and SQL Sybase. Obviously, as technology has evolved over time, Goldman Sachs invested in me and us, the board of technology organization moved us along to the point where when I left, I had been exposed to many and newer and all different types of technology.

When I left Goldman, I knew that I didn't want to have that type of position again, that type of stress, although I loved Goldman. I was ready to use all of my experience to do the next phase in my career. And I had a three-part plan and part one was sitting on corporate boards and using my technology experience and my finance experience to add value to various companies. And I've been very lucky with that because just after I retired, there started to be this need and this awareness of placing technologists on boards.

Tania: That is fantastic, and I really appreciate you sharing that. It really does lead me to ask my first question, which is about what the traditional role of the board has been. And as you've mentioned, you've seen that shift, what is changing? And probably more importantly, what's going to continue to change as we come out of the current COVID-19 impact?

Jane: Well, so let's start with the traditional role of boards. The traditional role of boards and one of the most important things that a board does is they hire and fire the CEO. And what that really means is they ensure that there is a succession plan for the CEO that is there. They ensure that the CEO has a set of objectives and that those objectives are made. They give their performance evaluation to a CEO, and all that is about the CEO. And in that, the board helps set the strategy and the board also, and this has become more and more important over the years, puts in the governance to ensure that the controls across the spectrum of issues are in place.

The role has expanded a lot over the last 10 years. Regulatory issues have become much more important. Dealing with activism has become much more important. Dealing with cyber has become incredibly important and dealing with technology has become very important. And so the role of the director and the board overall keeps changing. We keep hearing about ESG issues becoming more important. And what directors are responsible for continues to evolve over time.

Tania: That's really important to note because as we continue to evolve and I was alluding to the COVID-19 impact, and we see the digital landscape changing and the need shifting to more digital and or technical needs from a customer perspective, how do you see that shaping and/ or forming the direction of board might take?

Jane: That's a great question. COVID has had two really important impacts on companies and on boards. One part of it is the client impact. And the other part of it is ... And actually there's a third one as well. There's a client impact, there's an employee impact, and then there's a whole kind of capital strategy impact. And all three of those have to come into play and have gotten a lot of focus by directors. I think most boards are having many, many meetings off cycle to handle all of these issues. Let's start with this, boards don't manage, they govern, they provide oversight, they help set strategy. There's a fine line here. So all the governance around disaster recovery that have happened. So now I'm talking about the employees and somewhat the client's ability to access the services.

All of that conversation, all of the preparation around working from remote sites or home, all that practice came into play during COVID and it was very helpful and useful. And those companies that took it seriously, and those boards that provided the oversight to make sure that was happening. All those companies transitioned seamlessly. And those that didn't, had a much harder time transitioning.

I mentioned customers. Customers are now accessing services in a very different way, depending on what kind of company you are. Banks, for example, are seeing much more online access from populations that never would have done it before. So elder people who weren't willing to do it online, now are only willing to do that online. And so now they're accessing their online banking systems in ways that they never were willing to do before.

And then the third, and this is not a technology issue per se, but what the future holds for companies has become much more worrisome. All companies are looking at their balance sheets. They're all looking at how their revenues will be impacted, either positively or negatively over time because of COVID. And also looking at the impacts that the companies that they themselves are dealing with might have on them, that they weren't planning. And so everything has changed. Now, is this a new normal? Yes, because even if this lasts a year and a half or two years from now, there are many things that we are doing differently that we're going to say we like, and we are going to keep doing.

Tania: And that makes sense. There has to be some level of learning obviously, that comes through this. And as everyone in the world is going through it together at the same time, it really is exactly as you mentioned, how people prepare the readiness and the ability to shift quickly and be agile enough to be able to make those changes, which I do think is critical and clearly a big part of the role of the board.

As you are doing your job, what information is necessary for you to feel successful, feel that you can do a good job and you can make the right decisions or give the right direction?

Jane: I think I would say the most important thing is to have open lines of communication with senior management, and it's not just the CEO. And so I would say that's number one. And so, if there is an issue, if there's an enormous incident, knowing that I will get a phone call to notify me is really important. And so that means you just step back from that in advance of all of this, you have to have a policy around when it is that communication should happen versus not. It can't just be left solely to judgment. And so communication is very important. Data, besides that, is very important, but not data dumps. So this is again an important concept.

As directors, we govern, we don't manage. As directors, we are not in the weeds of what a company does. And so when data is given to us, it needs to be analyzed and processed and have a thesis that management has from having viewed the data. And then we should look at the answer and have enough access to the underlying data, to be able to get a sense of whether we agree with it or not, to give an ability to push back enough information, to push back and question, and give them other ideas and thoughts about where they think things are going. I'm sure there are probably many other things, but communication and data are the two most important things that I like as a board director.

Tania: And you mentioned this a little bit, but there is obviously a large amount of data. I can only imagine that depending on the organization and the leadership and how they consume their own data, what they share might be too much, might not be enough or could be overwhelming. Given the amount of data that's probably available and the content that's likely given to you today and any day with the access that we have, how do you digest all that information to make those decisions and how do you avoid being overwhelmed with information?

Jane: Well, when I feel like the data is overwhelming, in other words, I can't get to the answer. That's my definition of overwhelming. I can't see whether things are okay or not okay. I don't know how management feels about it and I also don't know if I agree with management, then I go back to management and say, help me here. And I'll ask my questions, and then they have to reform their answers or their data or the materials that they give us in a way where I can get to my answer. And it's not a one-time thing, it evolves over time.

One of the big things I do is I help the CISOs put together the information that they give to the board. I don't put together the information in any type of way, but they will come to me with numbers and pages and pages of data around how their cyber posture is. And over time, I work with them to get that to a level that is digestible for the board, that is useful for the board. And I think it's important that the CISO step back, that the technologists step back and say, what do they want to make sure that the board understands? And then take a look at it and say, does this information provide that comfort level or lack thereof? Because sometimes it is a bad story and you need to be able to tell it, right? Along with, and here's what we're going to do about it.

Tania: And that does bring up another really great point around telling a good story. Not that it needs to be exaggerated, but how we tell the right story for both what's happening today, the decision that needs to be made. And to your point, trusting that the management is well-informed and is going in the right direction is obviously quite critical. Maybe put that aligned to a business strategy. So having a good strategy, a good vision. More and more today, we're hearing about technology strategy and maybe how technology strategy is equivalent to, more important than, to what a business strategy might be. What's your opinion on that? Do you actually believe that business strategy is now largely taken over by tech strategy in organizations?

Jane: I want to back up a second, because I think the business strategy or the strategy of the organization, the goal, the purpose, the vision for the organization, what they're looking to accomplish is not technology per se, it's 'something', whatever that is. Technology makes that possible in ways that we never thought before. And I think that's where technology strategy is critically important. But we have to remember technology, it may be that technology is 100% of what the organization does, but there is a goal. The goal is not technology.

So the strategy is something, and then technology enables it in ways that was never possible before. And technology, by the way, doesn't just enable the organization's overall goal or business strategy, if you want to call it, it also enables all the divisions within a company. Technology enables the operations of that organization to do their job more effectively. Technology enables the recruiters to recruit in a much more effective way. Technology allows technologists to code more effectively, to test more effectively, to build things in a more resilient fashion. So technology is part of everything, but the business strategy is the overall of what you're trying to accomplish.

Tania: I like that differentiation because I think it's important not to confuse the two, especially for organizations that are not technology led or centric yet to your point, technology enables their goal, whatever that goal might be.

Given that technology is a strategic imperative, it's something that clearly is an enabler. It empowers maybe others in the organization and the business strategy, to what extent does the board need to keep abreast of digital trends, emerging technologies, any information that will help them guide the organization successfully?

Jane: I have two parts to that answer. First of all, I think the overall board, everybody on a board has responsibility of staying abreast of trends in general. When COVID hit, I believe when COVID hit Asia, I believe it was a director's responsibility to pay attention to the news, to know what was going on in Asia, and to think about, and reach out to their CEOs to see what the companies were doing or not doing to prepare for the pandemic. And that's not a technology thing, that's a 'something'. And so if there's a major cyber issue and it's in the papers, I think a board member should ask himself or herself, how does that impact the boards I'm on?

The same question should happen in general for anything that you read about, but here's the but, and I said it's a two part answer. A board is made up ... What I think are the best boards are made up of diverse people with diverse skill sets, and diverse is race, gender, sexual preference. That's all diversity because you bring different mindsets, but diverse is also skills and experiences. If you have a 10-person board and they're all technologists, that's not good. If you have a 10-person board and they're all investment banking backgrounds, that's not good. Same thing if they're all from the same industry, if they're all markets, you know, from ... We're all chief marketing officers, none of that is good, but what makes a really great board is one that has one or two people that brings each of these skillsets into the room.

And so I don't expect the person who's there because they're such experts in finance and audit to be as knowledgeable and able to push back on the technology strategy as well as I do. And by the same token, I don't expect me to be as up to date on all the new accounting trends and things that have to happen differently in the regulatory world as I would expect them to. And so it's the collection of it all.

So boards need to be tech savvy because technology is so important, but they don't need to be tech deep. They don't need to understand it all. They hear about the cloud, they should ask about the cloud, but they shouldn't understand really in depth of one technology over another. Are we going to use Google or are we going to use Amazon as our stack? The directors don't need to understand that to that level.

Tania: I like the way that you phrased that tech savvy, but not tech deep, enough to be able to give direction and guide and ask the right questions to help the narrative versus not knowing enough to be able to provide that feedback. On the flip side of that, what are the risks of not bringing technology into the boardroom? Have you seen that in any organizations or heard of it in other organizations? Can you give us some ideas as to what's not worked in those environments?

Jane: I can't tell you at boardroom level of not bringing technology because I am, by definition, when I'm in a boardroom, there's technology in the boardroom. And it sends a really important message to the organization that technology matters and technology strategy matters.

Actually I'm going to stray a little bit from your question about just telling you a story of when I first joined one of my boards, they did not talk about technology in the boardroom at all. Not at all, not for a minute. After the second board meeting, I went up to the CEO and I said, “I don't quite understand, you know, I'm here, but we have no technology conversations.” And he said, “Be patient. I promise you we'll get there.” And within two more board meetings, we had technology as at least a third of the board meeting conversation and we have a technology committee, which I chair.

And the company is doing very well in its technology strategy and its execution of its vision for technology and so forth. And so it has really, I saw the morphing of it because it wasn't at the forefront. The technology was never in the boardroom. The CIO or the person who kind of oversaw our technology and operations, didn't focus on it in the same way. It wasn't as important. It was an afterthought. And now it's not, now it is the thing that is going to enable the vision for the company.

I think companies that don't take technology seriously and examples are, and these are old examples, but look at Blockbuster versus Netflix. Blockbuster did not take technology seriously. I'm sure they did not have a technologist in their boardroom, and Netflix ate them up because they were all about technology.

Tania: Since you mentioned a few organizations, where do you see, especially today, organizations are doing this well?

Jane: I think more and more organizations are doing this well. Again, by definition, my sample size of five, is by definition doing it very well because they've put a technologist on the board. Some have two, some are about to put, or looking to put a second one on, which I think is fantastic. It shows the understanding that there was so much to technology, that there's technology from a digital platform point of view, there's transformation, there's data and artificial intelligence, there's virtual reality. There are so many different facets to technology, to understanding, that one person in the boardroom can’t attack it all. And I didn't even mention all the risk management aspects to technology.

And so I think boards are doing a very good job of putting and understanding and putting a technologist on their board. I think that over time, they're going to need more, a second one. Again, not the same skill set within the technologist, but more diverse backgrounds in that space. I think the other thing that they're doing very well is bringing the CIO into the room and having the CIO hear the business strategy, be part of the business strategy, reporting to the CEO. I'm seeing that more and more, and that used to not be the case.

Tania: I'd love to ask you just what you've seen in the last three to six months, well, not six months, three months, and what you anticipate having to be done differently moving forward, because of what we're going through now? I'd be curious to see from a board's lens, what are the things that are really now top of mind that maybe weren't six months ago?

Jane: That's a great question. I think where people work is one of the biggest questions that remains to be solved. There's a bit of a pendulum swing going on in terms of, there are companies out there saying, we're going to go 80% work from home, whereas before it was tiny amounts of working from home. And they're talking about it even post pandemic. I think that finding that right balance of people working from home, not having to deal with the commute, being able to have meals with their family, it helps enormously with work-life balance. There are huge positives that will have come out of this.

There are negatives that come out of it as well, because there's no delineation between working and being home. And so psychologically, it's very difficult. Getting out of bed and going to your desk doesn't give you that unwind time that you've had in the past so that when you face your partner or whoever it is you live with at home, that you're still stressed. And so that dynamic is difficult. Dealing with childcare is very difficult. Now, once things go back to the new normal and daycares are open and childcare is open again, that part will get solved.

But I think one of the reasons that the work from home was so successful is because it happened so quickly. And you went from working with people that you work with every day that for the most part you really, I hope, enjoy working with, all the people that you get to see every day and you've built a rapport or trust. And even if you don't, you understand where you should trust somebody, where you shouldn't, what kind of rapport, and you can picture somebody's face as you talk to them, you can see their body language as you talk to them on the phone, because you've seen it for so long. When you upped and changed that in one cell shot, you can continue that. Over time, the players are going to change. New people are going to be hired and you won't have been with them in person to develop that rapport. And that's what I worry about over time with working from home, how will that rapport happen? What will it be replaced with, or does it become a hybrid where one or two days a week you come into work versus not?

I also think some jobs are really great work from home jobs. I think coders are probably more effective at home. But again, lose out on that whole networking and that whole development part of their own self beings. And how do you become a manager, how do you become a good manager when you're not there looking at someone, talking to them, seeing their body language and trying to understand how they feel about things? So I worry about all that. And I think the reality is, what it will look like will occur somewhere in the middle and depending on the types of roles.

But again, I started with this as this whole client side there, this was a big kick to people doing things in ways they had not done before. I am a very digital person. I've been using the last three months to digitize all of my pictures and all my videos. And so I like technology. I am an online technology person for so many things. But up to now, until COVID, I would go to Costco to do my shopping, I'd go to whole foods to do my shopping, my food shopping. I have not set foot in a store since March 15th. I order everything either from Costco, Instacart, and Baldor. Those are my three go-tos, and I have it down to a science now.

I'm going to continue to do this as long as there's this risk out there. But when things go back to normal, it's nice to go out a little, but I will continue to use my foundation and then go out food shopping or to supplement the things that aren't on my regular rotation. And so if I look at my example, I think the same thing's going to happen with everybody. I think everybody's going to look at what they like that is new and different and apply that, continue to apply it and then change what they want to change when they have the ability to make that decision as opposed to now, it's hard.

Tania: You mentioned something which I think is important, that during this time you've either learned or relearned your digital experience and what you're comfortable with and you said, have it down to a science. And when you go back, essentially, these are your foundations. So the foundations have now become your norm, which is really that digital landscape. And I think to your point, a lot of organizations are going to start seeing that as their go-to in foundation as well, so that technology strategy we talked about earlier, or the fact that it's an enabler will become a stronger enabler now more than ever. Which I think is quite important for all organizations to think about, if they haven't been already as to how that's foundationally going to shift the way that they go to market.

Jane: That's perfectly well said. Thank you.

Tania: Thank you so much, Jane. It's been a pleasure having you on the podcast. Thank you so much for joining us. To hear more conversations like this, please go to thoughtworks.com/podcasts.