Today, we are talking about innovation, and
we're going to focus on customer experience
and what's the relation between innovation
and providing the right type of experience
for your customers.
It's a very important topic.
I'm Michael Krigsman.
I'm an industry analyst, and the host of CXOTalk,
and you're watching Episode #297.
Now, before I introduce our guest, I want
you to please, please, please tell your friends,
tell your family; subscribe on YouTube.
Tell them to watch and tell them to subscribe.
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I'm just thrilled to introduce our guest today
who is Jeff Wong.
Jeff is the global chief innovation officer
at one of the largest professional services
organizations in the world, which is EY.
Hey, Jeff, how are you?
It's great to see you here.
Thanks for taking the time to be here with
us.
Thank you for having me, Michael.
It's a pleasure to be here.
Jeff, please tell us about EY, and tell us
about your role there.
EY is a large professional services organization.
We have about 260,000 people around the world.
We're in every major country, pretty much
every major city.
We have tax advisory services.
We have transaction advisory and, of course,
our assurance business, which is our largest
business.
We're $30 billion to $33 billion plus a little
bit there in revenue.
My job here as Chief Innovation Officer is
to create new things for EY.
When you say, "Create new things," please
elaborate on that for us.
Really, it's about thinking about innovation.
For us, innovation is about what I call creating
new, so that's new services that we want to
be in.
It's new ways of looking at old services.
It's new ways of delivering the things we've
done for many, many years.
It's all about creation of new.
Now, why does a company like EY have to have
a chief innovation officer?
Michael, that's a very good question.
Change has been a constant in business throughout
history.
Our history goes back over 100 years.
We've had to evolve through many different
shifts and disruptions throughout that time.
What's different now than what was happening
before is really the pace of change.
I think it's been well documented and written
about quite a bit.
Really, the pace of change has gotten to a
tempo where the systems and processes that
large, long-standing companies that have been
successful navigating disruption in the past,
those systems and processes aren't built for
today's pace.
Really, that's why I'm here and that's why
we created this new role a few years ago because
we need to make sure that we match that pace
of change for ourselves and, frankly, to watch
the world around us and match the pace of
change in business around us.
Jeff, how do you link that notion of responding
to the pace of change with accurately responding,
at the same time, to what your clients or
what the market is expecting and wants from
you?
Yeah.
[Laughter] You know that's what makes it a
lot harder today than it used to be.
I have a good friend who has been a CEO for
the last 20 years of several large organizations.
He and I were chatting once.
I don't want to reveal him because it's his
thought and I want to let him have his own
voice on this.
But, he said, you know, "Jeff, it's hard to
rely on my last 20 years of experience to
make decisions about where the company," that
he's leading now, "should head."
He's like, "Right now, I just have to react
to the environment in front of me."
I think this is why it's so important now
for companies to really be focused on the
theme of the show: customer experience.
Really, it's linking together the fact that
we have to create new things, but we have
to do it in a way that really, really addresses
how customers want to receive the new products
and services we're delivering.
It's really that marriage, that coming together
that makes creating new things powerful.
Now, that's an interesting question, the notion
of customer service and the intersection with
innovation.
Most people, I don't think, consider these
two as being married tightly.
Maybe you can share with us your thoughts
on that.
Yeah.
[Laughter] It's funny, Michael.
I grew up, actually, in the Internet world,
so I spent almost ten years at eBay.
I worked in venture capital.
I worked in growth equity investing.
I didn't actually grow up in the professional
services firm.
What I saw out there in the Internet world
is, you could look at a lot of websites, and
you could start to see the organizational
chart in the website.
You could see where the category manager was
and made that decision, and the product manager
made a different decision.
The engineer maybe took a shortcut, or the
business development group made a deal that
the product people didn't like.
It's all revealed out there on the webpage.
What happens is, as companies get bigger,
things become more about the organization
and sort of the internal negotiations of the
organization rather than about the customer.
Really, when we look at what it means to revitalize
something, revitalize a company, or look at
something new, I think everybody has to return
to that first principle, which is: what does
a customer want; how do you address their
need; and how do you make them happy with
you?
When we look at innovation here, when we think
about these new services we're delivering,
when we think about how we deliver the services
we've been doing for 100 years, we're taking
a fresh look, looking at our customers, and
saying, "Well, what are they really trying
to address?
What is the problem we're really solving for
them?
And, how can we do it better?"
I really think that's the core of innovation
is looking at customer problems and saying,
"How can we do this better?"
That's what we're doing here.
Why is this so hard?
I'm being facetious but, on the surface, you
say, "Okay, I want to be more responsive to
what the customer needs, and so let's go out.
We'll have a beer.
The customer will tell me what they want,
and I'll just go do it."
But, it's not that easy, so why is customer
experience so, so hard?
You know, I think customer experience is hard
because large, successful organizations become
wedded to their systems and processes and
the way that they think things ought to be
run.
Then what they lose sight of sometimes is
the fact that they're no longer thinking about
the customer as much as they're thinking about
their own systems and processes.
I think breaking through that organizational
chart, those systems and processes that exist,
re-asking the question, "Well, why do they
exist?
Why do these hypotheses about what we should
be doing and not doing exist?"
Being able to challenge them, that's really
the marriage of where companies sometimes
get stuck and needing to break through with
thinking about it in a new way, which is where
innovation comes into play.
When we come into an organization, when I
come into an organization, I have the benefit
of looking at something new, looking at it
in a new way, to look directly at the customer
and say, "What does the customer want?"
That's what my team is able to do.
We're able to look at our existing businesses
and simply ask the question, "Well, what would
the customer want today if we built this service
today?
How would the customer want it delivered?
What would we build?
What tools would we use to build it?
What technologies would we bring to bear?"
That's really how we're thinking about the
world in a new way for us.
Jeff, innovation is fundamentally about change.
Is that what we're talking about then with
customer experience is changing how we operate,
changing how we listen?
Is it all about change in a very similar way
that innovation is about change?
Yeah, Michael, you're right.
Innovation is about change.
I think it's also about change along all dimensions
of a company.
We're talking about customer experience, customer
service.
Obviously, I think, when people think about
innovation, they think a lot about technology
and technology being sort of the only driver
of change.
What I'll tell you is this: We don't think
about it that way at EY.
We don't think about innovation as just about
technology.
Technology is clearly important.
It's clearly something we focus on.
It's clearly something we know about and we
know how to apply.
But, really, it's about changing all aspects
of the organization.
For us, for example, we think about talent
very differently than we did before.
When we go out and recruit now, we think about
how we can be as good at recruiting STEM graduates
as we are with the business school students.
We're excellent at the business school students.
We want to be as good at recruiting STEM graduates.
Why is that?
Because we think we need a diverse set of
critical thinking skills, and we want to expand
on the great skills we have here by bringing
in new mindsets in greater percentages.
We also are rethinking how we train them,
so our learning and development organization.
I'll tell you one example is that we have
a leadership development program now here
at Stanford University, which is just across
the street, which is about the School of Engineering,
the School of Design, and the School of Business
versus the traditional corporate training
programs, which tend to focus on the schools
of business around the world, because we think
that's the new mindsets that we need to have.
We think about how we promote them differently.
Right?
It's not just technology.
It's also talent.
For us, it's also business models, so we're
expanding on our business models.
We, historically, have been an hourly rate
times hours business.
Right?
Very traditional.
It's lasted for 100 years.
It's worked extraordinarily well.
It will continue to work extraordinarily well,
but we want to add on different ways that
we can create value for our customers and
that our customers can pay for and, frankly,
the ways they want to pay for it.
We're thinking about our business from multiple
perspectives.
When we talk about change, it's not just technology,
not just thinking about the customer experience;
it's also talent, business model, how we govern
ourselves, the pace of which we make decisions.
It's sort of all aspects of the firm.
Now, going back, Jeff, to customer experience,
if we want to apply this kind of innovation
thinking to customer experience, do you have
a framework or a way that we can approach
thinking about this?
Michael, there's a lot of writing out there
about how to think about customers and how
to talk to them, et cetera.
You know what I honestly think it boils down
to?
It boils down to having smart people go out
and really listening to customers, being willing
to talk to them face-to-face, to meet with
them in their environment, to look at how
they interact with whatever product that you're
competing against or service you want to enter
and asking smart and good questions about
it.
There are lots of different ways.
People talk about different polls, and I've
seen lots of polling in different customer
segmentation and all the different studies
around the world.
They're all valuable, but I think nothing
really can beat looking a customer in the
eye, asking them good questions, watching
them do their work, watching them do what
they do because sometimes the customer can't
articulate what they really want or what would
be really helpful.
I think that's why it's so important to just
see the customer in their environment.
There are lots of different ways to do that,
but I think nothing is better than that.
My team has practiced this religiously.
Right?
Whenever we think about entering a new service
or a new business, the first question I always
ask is, "Well, go talk to five customers."
They come back, and we talk about the conclusions,
talk about what the problem might be, and
they said, "Okay, let's go talk to 10, 50,
or 100 more."
That's the first three or four steps for us.
Really, we don't use any specific framework.
We know all the frameworks.
We use different ones, as they apply differently.
But, the soulfulness boils down to that, being
able to look a customer eye-to-eye and asking
good questions.
Jeff, we have an interesting question from
Twitter.
Arsalan Khan asks, "What does innovation mean
in the context of professional services?"
Because we're talking about customer experience,
I will ask you to address that but, also,
weave in innovation and professional services.
Weave customer experience in as part of that.
Within professional services, like I said
at the top of the webcast here, it's about
all aspects of creating new.
For us, we need to be in new services.
You know what's really interesting that I
didn't know this before I came here is, our
world is constantly evolving.
The rules that govern how companies operate
are constantly evolving.
The latest and greatest thinking around supply
chain management, pricing, how we audit, what
we need to be auditing, or what's being taxed,
it's constantly changing.
For us, we need to be constantly thinking
about what's new, what's coming up next, what's
the way the legislation is going, how do we
address it in the best and most meaningful
way?
But we also look at our existing services
and ask, "How can we do it better?"
For us, one thing that we're doing that's
really interesting is in our audit business,
actually.
Our audit business has been around for over
100 years.
Most people around the world look at it like,
"Boy, audit.
That's very traditional, done in a very traditional
way, business."
In many respects, there are a lot of things
we do very consistently because it's the ethics
and professionalism of our team here.
But, what we also realized is, how do we help
our customer understand, our clients understand,
what we're doing better, understanding the
process and the pathway better, and connect
to us in a more meaningful way?
We actually launched a client portal within
our audit practice so, as we go about the
audit, it doesn't just become, "Hey, we're
doing the audit.
Give us a bunch of information.
We're going to walk away, do a bunch of processing,
and come back to you with the answer.
Then we'll sign the document and you sign
the document."
What we've done is, we've created a client
portal where the CFO and the finance team
can watch the process along the way.
We can communicate back and forth in real
time.
They can see where we are in different processes.
We can ask relevant and important questions.
It's a much more seamless experience.
Look at that.
We took a very traditional business, 100-plus-year
business, done very similarly for many years,
and we said, "How can we do better for the
client?
How can we do better for the customer?"
I have to tell you.
The customers that are using it, it's early
days in this launch.
They love it.
They love that ability to use technology to
have a much better connectivity to their teams
and, frankly, it helps us deliver a better
answer for them at the end of the day.
Again, if you think about the kind of challenges
that are involved, this is a very end-to-end
process that involves listening to the customer,
going cross-functional, it sounds like, inside
the organization--this would be true whether
it's EY or any other organization, or whether
it's professional services or not--sharing
information.
There are a lot of changes that are required,
so where do the obstacle points or the choke
points with this kind of innovation tend to
arise?
Well, the challenge with any large and successful
organization is that they're large and successful,
and that the systems, processes, and methods
that have been in place for years have been
working extraordinarily well, and that's why
the company is successful.
I've had the benefit of, in my role, going
around the world talking to C-suites and boards
around the world.
I think the consistent refrain I use with
them and I think is really resonating is that
these systems and processes that have made
you so successful over the last ten years
probably aren't going to work for the next
five.
You know what you said about what are the
roadblocks and choke points?
That's really easy to agree with.
It's really hard to implement because people
within the organization have been really successful,
and they're really, really good at their jobs.
They really are experts in what they do, but
it's hard for anybody to go through change.
It's hard for anybody to have something different.
You know, Michael, it's funny.
I have this phrase I like to use internally,
which is, "When I wake up in the morning,
half the company hates me; half the company
loves me.
When I wake up, I don't know which half is
which.
It's different every day," because everybody
likes it when you come in and you say, "We
need to change."
Everybody agrees with that.
When you go and ask them, it's like, "Yeah,
that group over there needs to change.
That group over there."
They say, "Oh, yeah, that group over there
needs to change," but so do you.
That's when everyone goes, "No, no, not me.
Not me.
Somebody else needs to change."
[Laughter]
What I've really appreciated about my time
at EY, which, coming from the internet, I
was very happily surprised by, is the willingness
of everybody to not just engage in this conversation
about how we need to be different, but also
to start to take action around it.
It doesn't mean it's easy, and it doesn't
mean that there's not the stickiness to the
way we've done things before.
Frankly, sometimes that stickiness is a good
thing.
It's protecting what we've been able to build
and create.
The willingness of our organization to think
in new ways, to run experiments, to now take
risks around things that maybe work and maybe
won't work, but if it works it's a big impact
to the firm, that's been a really, really
remarkable, eye-opening thing for me.
One wouldn't think a 100-plus-year-old company
that's been this successful would have this
much ability and flexibility to think about
change and really start implementing it.
I know somebody who was--and the keyword here
is "was"--head of innovation at a major retailer,
major brands that we all know.
There was a tension between her role as innovator
and the company's desire to basically drive
profit through, drive revenue through, e-commerce.
This became a real issue and, thus, the operative
word "was."
It became a real issue because she felt her
role was to drive investment in future opportunities.
But, despite the company saying, "Well, we
innovate; we want to innovate," what they
really wanted was to figure out ways of optimizing
and being more efficient with retail e-commerce.
How can a company bridge this gap between
the present and the future, as you were just
describing?
There are a lot of rules of thumb about how
you should think about investing out there.
I think the most popular is the 70/20/10 rule,
right?
You should be 70% investment in your core,
20% in your adjacent, and 10% in your disruptive,
and really holding yourself to that discipline,
as close as you can get to that discipline
as possible.
That really allows you to think about your
portfolios of effort differently.
E-commerce and the efficiency, in your example,
sounds like it probably should have been in
that 20%; figuring out an adjacent business
to the core business and making it more efficient.
But, the leadership should have really reserved
that 10% for something new; what your friend
was trying to work on.
That actually makes me reflect on something
that I think is critically important about
innovation.
That's about who really leads innovation within
an organization.
For me, the CEO, our CEO and chairman, the
head of our client managing partner, Mark
Weinberger and Carmine Di Sibio, are incredible
sponsors, advocates, leaders of innovation.
They really brought me in to help sort of
implement their soulful passion around the
fact that we need to evolve.
For me, that's really where it starts.
You have to have a CEO, a leadership team
with the courage to think about the world
in a different way, to realize that there
will be some people who like the messages
they're delivering and some people who are
saying, "No, things are going great now.
Let's not rock the boat here.
Just keep it going for a little while longer."
They really had the vision and the foresight
and, again, the courage to say, "Hey, you
know what?
We're doing great.
In fact, we're probably at a lot of our all-time
highs across a lot of different metrics.
We've got an incremental amount of momentum."
What was really wonderful for me when I joined
the firm was to watch a team, a leadership
team, and it really does extend beyond them
to the leadership team, to say, "Wow, we have
this incredible momentum.
We're hitting on all cylinders right now.
You know what?
We need to be thinking about the future as
much as we're thinking about delivering excellence
in the present."
I think that that's really where it all starts.
For your friend and for people out there who
are looking for organizations which are transforming
and want to transform, I really would look
at the leadership team.
Are they bought in?
Do they have the courage and the ability to
really back the idea that we need to balance
thinking about the present and the future?
We're fortunate to have it here.
When you look around the world, when I look
around the world, and when I look at different
companies that are innovating around the world
and doing new things in their industries,
redefining themselves, frankly, redefining
their industries, that's the commonality that
I see.
It tends to be the CEO.
It starts there, but a leadership team that's
bought into the idea that they want to take
advantage of the opportunity to define their
industry because that's really what this disruption
affords us.
A lot of people think about it as a challenge,
and they think about it as you hear the world
telling you that this is something that's
negative, something that's hard.
We need to fend off disruption.
We need to defend ourselves against change.
We don't look at it that way here.
Leading companies around the world that I've
talked to don't look at it that way there.
They want to take advantage of it.
They want to take advantage of this opportunity
to redefine themselves in the eyes of their
customer, to become something bigger, greater,
more meaningful, more impactful, to change
their part of the world.
A long answer versus your friend's challenge,
but I think it all starts with the leadership
of the company.
It's a very good point.
I think, in that particular case, the company
wanted to innovate, but the short-term demand
of generating as much revenue as possible.
Let me put it another way; senior managers
were compensated on the basis of short-term
revenue and that, therefore, outstripped any
sort of abstract goal for innovation.
Michael, I see this too much, I think, around
the world.
It's actually something I'm fairly concerned
about for large, longstanding, successful
companies.
The pressure on these leadership teams to,
what I like to say, squeeze another penny
into their margins, squeeze one more penny.
The shareholders who just demand that from
that short-term nature of it, it's too often
that that pressure prevents this long-term
investment.
It's sort of a penny-wise, pound-foolish,
right?
You might squeeze another penny out of earnings
or two pennies out of earnings, but you're
not making the investments that will get you
a transformative, new, industry-defining company
where the gains are extraordinary and astronomical
if you're looking at it from a purely shareholder
perspective.
You need to give your leadership teams the
ability and the space to enable their courage
to do something differently to think about
the long-term while they're thinking about
delivering in the short-term.
This goes broader than innovation and customer
experience.
Here, we're really thinking about what we
call inclusive capitalism, what I think the
world is calling inclusive capitalism.
A lot of this is around, how do you measure
companies in different ways?
We do a lot of measurement.
We're auditors, and we're very, very good
at it.
We have a large, large audit practice.
We're very, very good at it.
We measure revenues, margins, and all the
other numbers, the financial metrics that
one ought to measure.
We're challenging ourselves, asking the question,
is that everything we should be measuring?
Does that truly reflect what a company is
and does?
Does it reflect the impact on their employees?
Are they training them?
Are the employees developing skills, and are
they leaving behind greatly skilled employees
that are improving the communities they exist
in and the world around them?
What's their impact on the environment?
How are they balancing the short-term versus
long-term investment?
Are they really thinking about competition,
strategy, and the pace of change in the right
way that really reflects the opportunities
and challenges to their business?
And, how do we measure that?
That's a really hard question.
Fortunately, we have a really, really incredible
team working, a large team working on it and
trying to think about that question because
that's what it really means.
I think that for us to innovate, for companies
out there to innovate, they really need everyone
to understand that it's really a balance between
short- and long-term.
It's really about not just your impact on
revenues and margins.
It's about your impact on your employees,
your community, [and] the environment.
That adds up to a company, a whole that is
far greater than simple metrics that we use
today, or another penny of earnings next quarter
can really tell us.
What I'm happy to say is that we see a lot
of the financial leaders around the world
starting to pick up this theme and theory.
We're trying to do our part to help lead this
effort.
I want to remind everybody that we are speaking
with Jeff Wong, who is the global chief innovation
officer at EY, which is a professional services
firm with 260,000 employees.
They're a really big company.
Right now, there is a tweet chat taking place
using the hashtag #CXOTalk.
Please, jump in and ask your questions.
Now, we have a couple of questions from Twitter
and, actually, a really interesting one from
Gus Bekdash who asks, "Do you have to convince
your clients of the benefits of innovation?"
How do you get your clients to get on board
with this?
That's what he's asking.
Yeah, so clients and being really focused
on clients is, I think, the theme of what
we're talking about.
You're right.
Sometimes they're not ready for parts of our
journey, and so what we definitely try to
do is to be very straightforward, very honest,
very open about everything we're doing.
When we do something with technology that's
new, we show them everything about it.
In fact, oftentimes, they get down into the
details.
We bring in our engineers and technology experts
to come in and describe exactly what's going
on and how it's going on.
In particular, in this day and age of sensitivity
around data and privacy, maybe appropriate
sensitivity around data and privacy, we are
extraordinarily careful about it and we're
extraordinarily careful to talk about how
we're extraordinarily careful about it.
I think really open and honest communication
with our clients is important.
There are some clients that pause and say,
"Well, things are going well.
Maybe we should think about continuing how
we're doing it today."
What's been really interesting is, when people
think about innovation, they tend to think
about, "Oh, the technology industry, the Internet.
Those folks are just newly innovating, or
the financial services industry, they're really
innovating."
What we are finding is, companies around the
world of every size in every sector are eager
to participate in the change, wanting it and,
frankly, from my perspective and, I think,
from the perspective of our clients, demanding
it from us.
That's really what's unique and different
in the messaging than we've seen in some of
the popular press, Michael.
I think a lot of the popular press likes to
talk about the fear aspects of this.
How is it impacting jobs, the numbers of jobs,
where are they going, and all of these things?
The way we approach technology here is, we
use technology to make our people superheroes
in that technology is really about people.
It's really about giving our people, you know,
Wonder Woman's lasso or Batman's utility belt.
Who doesn't want that?
What we're finding inside of our groups is
that they don't just want it.
They love it.
They don't just love it.
If we didn't do it, they would demand it from
us.
They're smart, passionate, motivated people.
They want to do and be as powerful, as useful,
and as strong with our clients as they can
possibly be.
While sometimes it takes some convincing with
the clients, and I think that the convincing
usually is around being very clear about how
much we've thought about security, privacy,
data protection, how carefully we're treating
the process, how we're really, really thoughtful
about how this impacts our regulatory requirements
alongside thinking about new things, and we're
melding those two together.
I think, for the most part, our clients have
asked for this from us, demand it from us,
and the leading companies around the world
really are picking us because we're doing
it.
That's been a really great and fun thing to
see.
Okay.
Fair enough.
We have another question from Twitter on the
subject of every company facing potential
disruptive innovations from outside.
In professional services, where do you see
the disruptive innovations, potential disruptive
innovations?
Oh, yeah.
We're part of what I think people have colloquially
named "The Big Four."
We're part of that.
Clearly, there's the other three of The Big
Four who are also thinking about their investments
and thinking about how they do things differently.
We watch them, and we think about what they're
doing.
Because I come from the technology world and
the Internet world, I actually look outside
quite a bit.
When I think about who else might be doing
things, I look at the large software vendors
out there who oftentimes we're partnered with.
I ask the question, "What are they doing that
they could do differently that might impact
our business?"
You know what's been fun is, more often than
not, we get into a conversation.
We say, "Hey, wait.
You know what?
Let's bring our two strengths together.
Let's work together and figure this out to
answer our clients' questions in more meaningful
and beneficial ways to them."
I look at large technology companies, in general,
who are doing investments in things like artificial
intelligence and blockchain.
I own the global labs in artificial intelligence
and blockchain here at EY.
We're doing really, really interesting things
with regards to those technologies and the
enterprise.
But, we also have to look at what are other
people doing along these lines, particularly
the large R&D labs from the larger companies.
What are they putting out?
How are they evolving?
How are they thinking differently?
We spend a lot of time with startups, too,
because I love them, it's fun, and it's great
to support them and what they're trying to
do.
They're trying to change the world, and we
want to support them as much as we possibly
can.
Frankly, they have a lot of good ideas and
think about the world differently.
It's sort of mind-expanding to think about
their world from their perspective.
They just bring such insight in terms of how
they think about not just the technology they're
bringing to bear, but the business models
that they're bringing to bear.
Then, finally -- well, not finally.
There are two groups we always talk to.
We're embedded in academia.
For example, I'm involved with and I'm on
the advisory board of the Oxford Foundry,
which is bringing all the students of Oxford
University out in the U.K. into this entrepreneurship
world.
It's important for us to have conversations
there with the students and what ideas they're
coming up with.
How are they thinking about the world differently?
Then, of course, government and regulators,
what might be fascinating for people to hear
about is that I had the good benefit of sitting
in front of a group of global regulators at
their global regulatory meeting.
I was invited in by the chairman of that group
to talk about technology, to talk about change,
to talk about how things might be different
or are different even today.
What's really, really interesting is how open
the regulators are to that conversation, how
open governments are to that conversation.
We're talking to not just regulators, but
government officials around the world.
We really look at it.
I think the best way to talk about it is we
really look at it as an ecosystem.
We have an innovation ecosystem around us.
It's important for us to talk to all different
parties of this ecosystem to understand where
they're coming from.
I know the question was phrased as, "Where
is the new competition coming from?
Where is the threat coming from?"
That's clearly something we pay attention
to, that perspective.
I think, more importantly, we look at it as,
how can we come together as an ecosystem and
create the win/win/win situations where we're
bringing together ourselves with members of
the ecosystem to address and answer harder
and better questions?
I think that's really something that sort
of speaks to a theme for us, which is, we
look at this as an opportunity, not risk,
not competition, not something to be defended
against.
When you start looking at things as opportunity,
well, you start really looking at places you
can do things together with other people.
That's really how we're looking; that's the
primary, first, second, and third thoughts
in our minds are really around, "Wow, there's
a way to work together to do something different."
That's really how we look at it and focus
on it.
But, as you can see, we talk and think about
the entire ecosystem.
The ecosystem dimension of innovation seems
crucially important to you.
Oh, absolutely.
We started with talking about how fast the
world is moving, and it's moving ever faster.
It used to be, back in the day, I'll call
it 1980s or '70s, when you could do the nice
chart of who your competitors were, you could
look at it and say, "This is the world that
exists around me."
You kind of could fit it onto a PowerPoint
page.
The world is moving so quickly, and it's so
dynamic, I don't know how any single individual
just keeps it in their head.
I don't know how any single individual can
just know and understand the landscape in
their head.
I mean we all certainly try to.
But, the fact is, it's moving so quickly,
it's so dynamic, and it's changing so rapidly
that it's hard to do that.
It's hard to see and understand all the opportunities
coming from you because the world isn't that
2x2 matrix that you can draw and say, "This
is how we stand versus our industry."
We have to have the ecosystem, and we use
the ecosystem, like we said, to work together
with them, but also as listening posts.
I spend a lot of time with students out there
at Oxford, at Tsing Hua University in the
Schwarzman Scholar program out in China.
We have teams of people who spent time with
students at MIT.
We have AI4ALL, which is this phenomenal nonprofit
encouraging diversity and ethical AI, and
we interact with those students.
Why?
Because we want to know what they're thinking
about.
What are you thinking about?
How do you see the world changing?
What are you going to be working on?
I have to tell you.
They are some of the best people in the world.
These students, college students, sometimes
even the later stages of high school students
who are working on these amazing things, they're
really telling us where the world is going.
Without interacting with this ecosystem in
a very meaningful way, I don't know how anybody
understands, even has a complete mental model
in their head about where the world is going.
For us, the ecosystem is a heavy investment
of our time and effort because we really want
to be a part of that community.
The second part I'd say, Michael, is that
we don't just want to be a part of that community
to take things from it.
We don't just do this because, hey, we want
to take the best ideas and run with them ourselves.
We want to be part of this community because
we want to participate in it, because it's
the right thing to do because it's part of
our mission and our effort.
We say we want to build a better working world.
That's our tagline.
That's our motto.
That's our credo.
What's been fun for me is I've been with companies
before that have had similar mottos and credos.
How much we authentically live it, how we
invest in it, how we focus on it, and how
we care about it is really different.
That's why we're part of this community and
part of contributing to this community is
because we want to build a better working
world.
The only way to do that is to contribute to
the ecosystem.
Jeff, we're at the point in the show where
I have about 20 things remaining that I want
to ask you and we have maybe 5 minutes left.
[Laughter]
Let me ask you some questions.
I'll ask you to keep your answers really,
really short.
Great.
To begin with, are there common characteristics
of companies that do innovation well?
Again, just keep it really short because we're
almost out of time.
CEOs, leadership teams with courage, and a
board that backs them.
Okay.
Fair enough.
Are there industries that, as a whole, you
see doing innovation well?
Everybody knows about things that are happening
in the technology industry, the Internet industry.
Financial services is always a leading industry
in terms of new things.
What people will be surprised by is, there
are innovative companies in every sector,
in every region, in places that you wouldn't
guess: manufacturing, healthcare services,
things that people go, "Really?
They're really innovative?"
There are great companies around the world
doing new things, and it actually correlates
with your first question.
It's CEOs, leadership teams, and a board that
backs them.
Okay.
Then we have another question from Twitter.
I'll ask you, again, just really quick.
As you look over your clients, are there areas
with respect to innovation in customer experience
that are kind of common concerns, common things
they're most concerned with?
Yeah, the common thing is that they have started
to think too much about their organization.
The organization thinks too much about itself
and not enough about the customer.
It tries to be one step removed from the customer
and isn't willing to engage directly.
I talked at length before about it, so I won't
emphasize it, but looking the customer in
the eye, being one-on-one with them, and seeing
what they actually do, that's critically important.
I think a lot of larger companies, a lot of
successful companies who need to change have
sort of lost that feel.
Okay.
In the spirit of just asking you complex questions
and needing really fast answers, what are
the characteristics of a really successful
organizational innovation change agent?
Do you mean a person, Michael?
A person, yes.
Well, hopefully they have creativity and good
ideas, but I think, also, is a willingness
to be wrong, a willingness to try things and
to take risks, a willingness to wake up in
the morning and have half the organization
hate you and half of the organization love
you, and not know which half is which, but
know you're doing the right thing for the
company overall.
Okay.
You touched on this a little bit but, again,
very quickly, are there metrics that companies
can use to evaluate their innovation efforts?
Yep.
We do pretty much every metric out there that's
sort of the normal metric, which is, 70/20/10
in terms of investment.
What percentage of our revenue comes from
things that didn't exist in the previous,
you know, insert the correct timeframe.
We measure all of our projects individually
across a number of different metrics.
I think those are the common ones.
What I actually really like to look at and
is not a metric, but is some of the qualitative,
is here at EY; the conversation has changed
around innovation.
We are talking about ourselves and the world
differently.
You can feel that in the hallways and in the
conversations that you have.
It's not a metric, but it's a feel, and it's
really wonderful to sense when it happens.
Okay.
Then as we finish up, I have two last questions.
These are really hard questions, and you're
doing an amazing job summarizing in no time
at all.
What advice do you have for people working
inside large companies who want to change,
who want to innovate, and they're just thwarted
at every turn?
They can't do it.
Yeah.
Everybody likes innovation when it's at the
idea phase and when they launch their thing.
They think that's the day that's the victory.
You have to love the grind.
You have to love the day-to-day.
Change doesn't happen overnight.
The fight, the working through hard issues,
that's what it is.
That's the job, and you've got to love it.
I guess it's easy for me because I love it.
I love that day-to-day.
At what point do they just say, "It's not
going to work," and they should quit?
Well, I think that most organizations that
I've interacted with, most of the leading
organizations around the world, I think the
gumption, the courage, the grit, that mentality
will be rewarded over time.
I guess, if you're not working at a company
you see as a leading company, a company that
has some desire to change, go find something
that fits your passion and fits what you want
to do, and that has a team there that's willing
to just give it a shot.
Okay.
The last question: What advice do you have
for senior managers and executives who are
behind innovation, they're investing, they're
pushing it, middle management does not want
to change and, as a senior executive, they
just can't get the organization to do things
differently; it's just not happening?
This is actually a complex question.
I'll try to do it very quickly.
As a senior leader at the company, it's your
job to lead from the front, but it's also
your job to put people in place who think
expansively about who you are, what you can
be, and who you want to be in the future.
And so, as a senior leader, I would say, over
time--and this is loving the grind again--you've
got to love the grind, you've got to love
the push, and you've got to put people in
the organization and raise up people in the
organization who are thinking differently,
who are thinking expansively.
It takes time.
It takes time.
It takes effort.
It takes putting people into place that aren't
perhaps the traditional profiles or backgrounds
that you've selected before.
That takes courage.
I think that it's all those things: it's courage;
it's patience; it's loving the grind; it's
knowing that you're doing the right thing
for the company for the long-term future of
the company.
I think it all pays off in the end.
Then I have to ask you one last, final question.
For senior managers of public companies who
want to do this and, yet, at the same time,
they have quarterly results that they have
to meet and there is no flexibility in that.
I've had a lot of private conversations with
CEOs in different areas around the globe about
this very challenge.
I think that it's important for them to start
this conversation with their board, to have
these individual conversations, and to take
the time it takes to start convincing them
step-by-step.
I've seen too many companies adhere to the
siren song of the penny of earnings and I'm
a hero, and too many CEOs who look at that
and have been able to execute on it and know
that they're trading off a big, long-term
gain for a minor, short-term win.
They know it.
They know what to do.
They know what they do differently, and they
need the courage to go and start having those
very different conversations with their board
and their leadership team and build the momentum
around it.
Okay.
Great answers.
Whoo!
We are out of time.
What a fast conversation it's been, too.
We have been speaking with Jeff Wong, who
is the global chief innovation officer at
EY.
Jeff, thank you so much for being here.
I hope you'll come back and do this again
another time.
Absolutely.
It was a lot of fun.
Thanks for having me.
Everybody, you've been watching Episode #297
of CXOTalk.
Tell your friends, and right now is a good
time to subscribe on YouTube.
Have a great day, everybody.
We have amazing shows coming up, so check
out CXOTalk.com.
Bye-bye.
