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In this time of uncertainty, business leaders are searching for ways to adapt. How can the CIO drive this change thoughtfully? Gamiel Gran discussed this topic with Dr. Stuart Evans and Patrick Naef for Mayfield’s “CXO of the Future” podcast. Patrick and Stuart are friends as well as colleagues and have worked together on a variety of projects over the past twenty years. Here, they talk about teaching innovation and entrepreneurship, lending their insights into the need to leverage intelligence to drive innovation. They also tap into the CIO’s role and how it is changing, and why now is the best time to seize bold ideas.
Stuart is a Distinguished Service Professor at Carnegie Mellon Silicon Valley, where he teaches innovation & entrepreneurship. He is a board member, educator, and author, focused on dynamic high-tech ventures. Stuart is also the Director of the CMU-Emirates iLab, a partnership between the Integrated Innovations Institute at CMU and Emirates Airlines for innovative education and research focused on the airline industry.
Patrick Naef is Managing Partner at Boyden Executive Search and a non-executive director on the board of Franke Group, a USD 2bn globally acting manufacturing company headquartered in Switzerland. He is also a member of the board of directors of several start-ups, lectures at several universities, and sits on the advisory boards of technology companies and venture capital firms based in Silicon Valley.
From 2006 to June 2018, he was CIO at Emirates Airline & Group in Dubai and, at the same time, a non-executive director on the board of SITA, a global telecommunications and IT company focused on the airline industry. Patrick Naef was also CEO of mercator, a subsidiary of Emirates Group, from 2006 to 2014.
Teaching Innovation and Entrepreneurship
Stuart’s professional career spans across many areas of entrepreneurship, featuring extensive experience within the tech ecosystem of Silicon Valley. He has conducted research for SRI International and Stanford Graduate School of Business, consulted with Bain and Company, invested for Sand Hill Venture Group, and served as executive management for Shugart Corporation, a Xerox subsidiary. Prior to his time in Silicon Valley, he taught at Cambridge Judge Business School.
Stuart has been widely published on topics related to innovation and adaptability in business. His book, Super-Flexibility for Knowledge Enterprises, puts forward a practical toolkit for dynamic adaptation in high-tech ecosystems. The book is based on 28+ years of collective field research and practical experience in Silicon Valley – provided by both Stuart and his co-author Homa Bahrami, a professor at the University of California at Berkeley’s Haas School of Business.
Digital Transformation 1.0
Stuart developed a passion for IT and the many ways it could solve business problems when he did operations research at the University of Birmingham.
“When we started learning programming languages like COBOL, we had to go to the computer center and use decks of cards to run the program. I joined the Operations Research Society that ran a business game every year. Each week they’d show us a printout of how we were doing in the game. That allowed me to see how computers can be used more broadly than just solving scientific or engineering problems.”
Stuart ended up working in a group that was putting minicomputers into old smokestack industries, which gave him insight into how businesses transitioned from manual ledgers/payroll/systems inventory to using computers.
When he started his doctoral research, one of his projects centered around how to plan when things change—a simple problem statement that is particularly relevant today. He came to California in the 80s and set up a new venture lab for a large communications company, while simultaneously going out to meet with venture capitalists and entrepreneurs. These experiences were valuable in helping him learn how different management teams and business worked in Silicon Valley.
“It was really a clean sheet environment driven by engineers as opposed to business people.”
How to Adapt to Uncertainty
How does Stuart predict what will come out of this moment in time?
“Don’t try and predict with too much accuracy, because it’s probably going to be wrong. Be robust enough to take the hits that you’re going to have to take in a downturn and be resilient enough to bounce back if you make mistakes.”
He cited the example of a CIO for a resort company. Tourism vaporized with the COVID crisis, but his resorts are full on weekends because people from within the region want to take a mini vacation. There are silver linings in every dark cloud, but you must adapt to that notion.
“To be flexible in the enterprise you need a common shared framework that everybody works towards. Try to cut back costs by eliminating things that are not useful. Try to correct as much as you can to remain viable in the current environment and be opportunistic when you can – take advantage of situations.”
“I’ve worked with Stuart for more than 20 years and we’ve become really close friends…It’s so much more fun to work with friends that are also colleagues. High performing teams aren’t just about skills and experience, but also the mindset and chemistry of how everyone works together. A company in today’s fast paced market requires innovation power to create innovation. To be competitive, you need to open up and leverage the ecosystems of university startups, tech companies, VCs…the whole Silicon Valley ecosystem.”
Patrick doesn’t believe in secret labs that companies create to keep everything for themselves, for fear of stolen IP. He believes that in today’s world you need to leverage the intelligence of the crowd creating innovation.
“The airline industry, for example, is experiencing very difficult times. We don’t know if the same volume of passengers, or business travelers in particular, will come back. The industry has many overhead inefficiencies and costs. We could help the industry drive efficiency and technology– that’s the hidden benefit in this current crisis. Now is the best time to innovate. You can get things done that you couldn’t do before.”
Stuart told the story of how Ian Law, the CIO and Deputy Chief Operating Officer of SFO, implemented a new Wi-Fi system in the terminal in 14 days. Their previous plan was on a 90-day rollout.
“There are things you can do in the current crisis that are actually very positive.”
What Is the Role of the CIO in this Moment?
Stuart: Leaders need to step up to the plate right now and work together cohesively. We’re all online now. Everybody is participating, so there’s a unique opportunity to unleash the talent of the entire enterprise. CIOs have gotten a much more elevated status on account of provisioning work from home, and people are listening. The CIO is involved not only in engineering but in operations and sales as well.
Patrick: I also agree that the crisis can be a huge opportunity. As a board member for Franke, I am seeing how we can suddenly move things forward that otherwise would have taken a long, long time. So, the crisis is a catalyst to speed up things that we were already pursuing.
The CIO that doesn’t manage to get out of the back-office and into driving product innovation, while strategically improving the way the company operates, will lose out and will end up being the chief legacy officer.
I see more and more companies abandoning the separation of roles because they realize it doesn’t work. It’s one role. It’s driving innovation in the company with the use of digital technology and whether you call it the CIO, CDO, or CTO doesn’t matter.
The role of the CIO is increasingly about becoming more of a coach—leveraging networks and helping the business drive innovation using technology.
A Fresh Perspective
Stuart: “A number of software engineers to come to CMU for my 18-month master’s program with the idea that ‘We are going to do a startup!’ And they spend nine months putting things together, building prototypes and seeking investors – but it doesn’t happen, and they wonder why. They typically go off and get lucrative job offers at Google and Facebook. They pay off their college fees and later return to the startup world in five years or so.
Doing startups in the enterprise space requires very specific skills. Exposure to that world helps my students work collaboratively on projects. From the CIO’s perspective, working with bright young students gives you a fresh set of eyes to look at a problem. The idea of having a team who understands a problem because they worked on it first is paramount to developing a new business idea.
For example, Patrick and I met with Eric Yuan at Zoom, three or four years ago. Patrick asked Eric “Why does the world need another video conferencing tool?” As we now know, Eric had worked on video conferencing tools two or three times and understood what problems he could solve with his new tool.
“The role of startups is to listen to what the business problem is and try to solve it imaginatively. The role of venture capitalists as coaches is really key. And the role of the board is pivotal in the evolution of many startups. In the early days, most of the board members are investors and the experience of those investors is really key.”
Teaching in the Current Crisis
“I’ve been very resolute in one of my pursuits which was how to build out a global classroom…I have a lovely campus at Moffett Field, but I also have a class in Pittsburgh. We broadcast at the same time so that the students in Pittsburgh won’t feel left out because they weren’t here in Silicon Valley meeting with venture capitalists like Gamiel and CIOs like Patrick. So on our campus we’re already accustomed to remote teaching. Sometimes it’s better when everybody is remote. Then students feel like they’re participating equally and are therefore more willing to get involved and share things.”
Ultimately however, the learning experience is just a small part of the total lifestyle experience students get—making friends, being together, and having social events. It’s going to be a while before that comes back. I think you’ll see a consortium of universities with great teachers syndicating their classes across several universities. The nature of the university is going to shift dramatically.
5 Key Takeaways:
- Venture capital firms are underrated. It’s not about the funding – it’s about providing advice on how to scale and introducing you to the right people
- Be robust enough to take the hits that you’re going to have to take in a downturn, and be resilient enough to bounce back if you make mistakes
- It’s so much more fun to work with friends that are also colleagues. High performing teams aren’t just about skills and experience, but also the mindset and chemistry of how everyone works together.
- The role of startups is to listen to what the business problem is and try to solve it imaginatively
- More and more companies are abandoning the separation of roles (CIO, CDO & CTO) because they realize it doesn’t work. The CIO is one role. It’s driving innovation in the company with use of the digital technology.
About Stuart Evans
Dr. Stuart Evans is a board member, educator, author, and expert on dynamic high-tech ventures. As a Distinguished Service Professor, he shares his expertise by teaching related coursework for our degree programs in Silicon Valley, M.S. in Software Management and M.S. Technology Ventures. Additionally, Stuart is the Director of the CMU-Emirates iLab, a partnership between III and Emirates Airlines for innovative education and research specialized for the airline industry.
Stuart’s professional career spans across many areas of entrepreneurship, featuring extensive experience within the tech ecosystem of Silicon Valley. He has conducted research for SRI International and Stanford Graduate School of Business; consulted with Bain and Company; worked in investing for Sand Hill Venture Group; and served as executive management for Shugart Corporation, a Xerox subsidiary. Prior to his time in Silicon Valley, he taught at The Cambridge University’s Judge Business School.
In addition to his experience in academia and industry, Stuart has published widely on high-tech ventures. His latest book, Super-Flexibility for Knowledge Enterprises, puts forward a practical toolkit for dynamic adaptation in high-tech ecosystems. The book is based on 28+ years of collective field research and practical experience in Silicon Valley of both Stuart and his co-author Homa Bahrami, a professor of the University of California at Berkeley’s Haas School of Business.
About Patrick Naef
Patrick Naef is Managing Partner at Boyden Executive Search and non-executive director on the board of Franke Group, a USD 2bn globally acting manufacturing company headquartered in Switzerland.
He is also founder and CEO of ITvisor GmbH, a boutique consulting firm specialized on advising organizations in their digitalization journey and on coaching of IT executives and is Senior Advisor to McKinsey & Company.
He is a member of the board of directors of several start-ups, lectures at several universities and sits on advisory boards of technology companies and venture capital firms based in Silicon Valley. In the late 1990s he was a founding member and CTO of a start-up himself, the first European OTA. From 2006 to June 2018, he was CIO at Emirates Airline & Group in Dubai and, at the same time, a non-executive director on the board of SITA, a global telecommunications and IT company focused on the airline industry. Patrick Naef was also CEO of mercator, a subsidiary of Emirates Group, from 2006 to 2014. Other professional positions include CIO at SIG and Swissair as well as senior positions at Zurich Insurance, HP and Bank Julius Baer. In 2011 the German “CIO Magazin” and IDG honored him with the prestigious “CIO of the decade” award.
Patrick Naef holds a Master’s Degree in Computer Science from the Swiss Federal Institute of Technology (ETH) Zurich, Switzerland, and an Executive MBA from the University of St. Gallen, Switzerland.