Nov 18, 2020
| 3 min read
Conversation with Guido Jouret
In this week’s podcast, we interview Guido Jouret, the recent Chief Digital Officer at ABB. In this candid conversation Guido discusses his experience and lessons learned serving as a Chief Digital Officer.
Guido has over 25 years of Digital Industry leadership experience, including serving as Chief Technology Officer at Nokia and President of Digital Platforms for Envision Energy, a wind turbine manufacturer. He had his start at Cisco Systems for over a decade serving as General Manager of their Emerging Technologies group and later General Manager for their Internet of Things Business Unit.
Additional discussion points during this interview are:
What do you see as the key role of Chief Digital Officer, especially in a traditional industrial technology company?
To what sectors should an industrial look for best practices or inspiration, and to what degree should they benchmark themselves?
How do you know if a business is truly ready to take on a digital transformation?
And more….so make sure to tune in….
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View Transcript
Good day and welcome to a special edition of our Digital Industry Leadership Series. Today I’m pleased to welcome back Guido Jouret, the recent Chief Digital Officer at ABB. Guido has over 25 years of digital industry leadership experience, including serving as Chief Technology Officer at Nokia, and President of Digital Platforms for Envision Energy, a wind turbine manufacturer. He had a start at Cisco Systems for over a decade serving as General Manager there, merging technologies group, and later General Manager for their Internet of Things Business Unit. Guido holds a Bachelor of Science in Electrical Engineering from Worchester Polytech Institute, and a PhD in Computing from Imperial College. We’re going to discuss his insights and experiences at the forefront of digital industry transformation, looking at best practices and opportunities.
Guido, welcome back to our Digital Industry Leadership podcast, for a record third time after our podcast number 23 in 2018, and number 43 in 2019.
1:37
Well thank you very much Ken, glad to be back.
1:37
And it’s great to have you back. I’d like to start with a broad question which I remember Ed asked in one of the earlier podcasts, so this will compare in contrast in some sense, but what does digital transformation mean to you?
2:07
I think it really starts Ken with the interactions with customers, how do we digitize that, so that’s essentially e-commerce, digital marketing, transitioning towards the digitization of the products and services, and that’s not necessarily the same as dematerialization, so we’re not necessarily saying hardware bad – software good; in fact I would argue and we can get into this perhaps a bit later, that at least in some markets it’s the combination of hardware and connected sort of services that is actually very compelling. But the product and services become digitally changed as well. Then the transformation of business models, and then some areas that you might not expect but I feel these are really important in my experience that ABB has only just confirmed this; culture, clock-speed, skillsets, so there’s a whole element of this that is about changing the way a company works and thinks about opportunities, markets, and customers, which is sort of thrown under the guise of digital transformation, but it’s actually just the business transformation or the adaptation of a modern enterprise taking to account the impact of rapid change, driven by technology of course.
3:03
We always like to say its change management catalyzed by technology, or digital technology in this case, and it’s interesting the way that you’ve categorized that. When we think of the Chief Digital Officer many times, even though they have the word digital in it it’s much more about that type of, as you say, rapid change management, in that regard. So, especially coming out of your most recent experience, what do you see is the key role of Chief Digital Officer, and especially in a traditional industrial technology company?
3:36
I think one of the things, it’s interesting to compare notes Ken with other Chief Digital Officers, and I’ve done that over the years and it’s always fun, especially as they’re just appointed in their role, and I had an opportunity to do that several times over the last couple of years; the thing that we all had in common I think is there was a phrase that came up time and time again, which is ‘Change agent.’ In some ways if your business doesn’t need to change then I don’t think you necessarily want to be hiring a Chief Digital Officer either. But the Chief Digital Officer role is in some sense the manifestation or the point of focus, where a lot of aspirations and frustrations are channeled. Typically, and we might get into this a little bit later, I think one of the key catalyzing moments as to why a Chief Digital Officer is appointed is that the status quo is no longer sufficient, either the company sees a great opportunity, or its fallen behind or something, but there is a change required. And so this incarnation of that change is this Chief Digital Officer, and they have different degrees of responsibility, some Chief Digital Officer have no teams, some Chief Digital Officers have everything I’ve described just earlier which is they have IT, they’ve got e-commerce, and they’ve got the common technology platform that these connected products would be built on, and it varies. In my role at ABB I didn’t have IT and I was not in charge of e-commerce.
5:00
On the other hand the building and briding of a common platform for the 22 business units inside of the company was the main part of my focus, and it was interesting to try and then of course explain to people what was the need of such a team and such a role, where does the responsibility of the business unit stop, where does that central teams responsibility then take over, and how does that become an effective partnership so you’re not competing, but you’re definitely able to accelerate what the company can do, and would be able to do without having a Chief Digital Officer. So that’s I know sort of defining it in a fairly fuzzy way, but I think ultimately the Chief Digital Officer role is the manifestation of a business transformation, a strategy transformation that the company has thought about for a while.
5:50
When I think about traditional industrials, and I guess ABB could be comparable against GE and GE Digital in that time, one of the common strategies is as you said to have a strategy in place and/or build a burning platform in some sense, whether it’s based on a platform, i.e. Bill Ruh in Predix, or whether it’s based on the need to move as you say to product as a service, or service as a product, the change in your place in the value chain. When you think about industrials particularly, you mentioned that you get inspiration from talking with the Chief Digital Officers, to what sectors should and industrial themselves look for best practice as an inspiration, and to what degree should they benchmark themselves?
6:38
I think for myself Ken, what I’ve always been intrigued by is usually if you benchmark against the same traditional competitors you’ve had forever, the history of disruption shows most of the time that the disruption doesn’t come from companies that look exactly like you. The reason for that is of course companies tend to hire from, and have people go to competitors that are sort of in the same line of business. So over time there’s sort of a cross-pollination; ABB recruits from Siemens, Siemens recruits from GE, Ge recruits from… so, essentially you’re tapping into the same gene pool. If you want to see something different, and if you want to see where potential disruptions would come from, one example or one thing I think is always very fruitful is to look at the boundary of consumer and prosumer, and that’s especially because the industrials tend to be for the most part – I know I’m generalizing here – but most industrial companies tend to be B2B companies; they’re focused on enterprise large customer bases, they’re not directly selling to consumers most of the time.
7:49
But looking at that interface, and I’ll give an example, if you think about smart buildings, so a number of industrial companies sell HVAC building management systems, these things that are essentially the backbone of the Smart building; do you benchmark yourself against other HVAC BMS-type companies, or do you start looking to see what consumers are starting to do with things like Amazon Alexa, and the integration that is possible there with your Echo speaker being a Zigbee hub in your home, able to control a variety of devices with simple rules and triggers. The reason I think it’s important to see that is not so much that Amazon is a threat to the BMS market, but that the expectations of consumers, and let’s not forget, employees are all consumers at the heart, we’ve seen this in IT where companies adopt the iPad as a user interface, they start redesigning the interfaces of their applications to be more consumer-like. So, the user experience expectations for apps are firmly set by consumers, whether or not you’re building a B2B app or not. So, therefore I think one source of innovation is to look at that interface, what is the prosumer side of your business where you see things that are innovating quickly, where people are tinkering, and I’ll dwell on that second theme for just a moment if I may, I think one of the best ways to detect early signs of innovation is to look for evidence of tinkering, and that tinkering may happen in your industry, it may happen in your segment, but quite often it’s sort of a little bit on the edge, it’s on the boundary of your market. Tinkering is an example of where a customer is trying to push a square peg into a round hole, they’re using one of your products, they’re using one of your technologies, but they’re asking questions or trying to make this thing do something that it wasn’t designed to do. I think the reason why that’s so rich with insight is that it indicates that there’s a real problem or real opportunity. The customer has looked for a variety of solutions to solve this problem, or to address this opportunity, and the fact that they’ve chosen what is essentially an inferior approach indicates that there is perhaps a market gap, meaning there is nothing in the market that is really addressing that customers need.
9:55
Now, if this customer is a one-off and no-one else has this need, then that’s fruitless, but sometimes what you see is the beginning of a trend, people want to solve a certain problem, and these are just the early adopters. If you can track them and get close to them and say ‘Tell me more about why you want to solve this problem, and why you think the square peg is a good solution to your round hole. Or why haven’t you found a round peg for your round hole? That’s really rich with insight. But that doesn’t often happen in the heart of your industry in the core of your business, it’s usually at the edge.
10:28
That’s brilliant. I was involved with an AG-tech company, one of the largest actually several years ago, and traditional business was the crops and crop management tools, ultimately they brought on effectively a prosumer and consumer line very specifically to look at digital innovation, the future, the farm could also be modeled in some sense in the future food and the future of even plant care. The level of insights they got from gardeners versus large farmers, it was a NetFlow up if you will of insights versus the other way around. So, I think especially when you talk about as you say HVAC BMS, looking at Nest as an example would probably be more disruptive than certainly looking at the next generation of variable speed drivers for industrial HVAC.
11:28
Yes, exactly. Perhaps hotels would say, ‘Look, our guests already know how to use a Nest thermostat, let’s put a whole bunch of Nest thermostats into this hotel,’ and before you know it you now have a question where it’s like, Honeywell or somebody who traditionally sells thermostats, you would say is this an aberration, or is this the beginning of a potential trend where this boundary of consumer to prosumer is manifesting itself. And we have to take our own devices to become more Nest-like in terms of ease of use and simplicity, and all the rest, because otherwise we will see this as a potential threat, or at least an opportunity for somebody who does address that need and say, ‘Ah, that’s what the market is expecting now.’
12:09
I want to go back to something you said a little bit earlier, talking about centralization and trying to best align an organization in terms of where digital fits. Obviously GE set in some sense a pattern in the way that they set-up digital as a central organization, and I think originally you started that at ABB as well, although we’ve seen some organizations go and fully decentralize that and have the equivalent of BU level Chief Digital Officers all guided by one. Is there an ideal model in your mind since you’ve certainly experienced a cross-section of these?
12:49
Well there’s essentially three models you can pursue, so you could go for a completely decentralized look -
A) you’ve got a company made up of fairly autonomous business units, you essentially set the broad direction but you let the business unit solve it however they want.
B) Then you have what I would call a hybrid model where there’s a central team, and there’s a certain amount of responsibility for digitalization, also in the BUs, that’s essentially the model that ABB had.
C) Or you go for a completely centralized model where the businesses keep doing what they traditionally were doing, and you’re creating sort of Newco in a central place, where they say, ‘Okay, this is the entity that will develop the new products, the new services, the new platform, and all that will be done in the central team.
13:33
Now, I think of those three models – and they’re not static, because I think you could argue that sometimes you want to be starting out in a more centralized way, with maybe a decentralization at some point. Part of this is the perpetual pendulum going back and forth between conglomerates are in favor – out of favor, in favor – out of favor. The industrial landscape right now, to be completely transparent, the investment climate, the activist investors are encouraging large distributed conglomerates to become more focused, and that’s why you see companies like GE, Siemens, ABB, selling off what they would consider to be perhaps less core assets, whether it’s the healthcare part of GE, or aviation part of GE, or it’s the utility side of for example ABB. So, there’s always a little bit of oscillation of the corporate model, centralized – decentralized, centralized – decentralized, that always happens and it happens over many years. But I think the argument for doing it somewhat centrally initially I think is strong.
14:37
The reason I believe that is because if you feel as the incoming CEO that your company is lagging in terms of the adoption of cloud, AI, big data, and all of those technology disruptions, and your organization is currently quite decentralized with a lot of empowerment, digital people inside of your business units, but I would contend that if you’re not a leader right now whatever you were doing isn’t working for you. So essentially something else is required, and one of the ways to do something else is to run it more centrally, more focused, more visible to the very top and to the board, which gives it a specific focus.
15:17
The other problem you have with an initially decentralized approach is, you might end up in an environment where everything is kind of sub-scale. You don’t have 20 data scientists – you’ve got one, you don’t have 20 cloud experts – you’ve got one, and at some point just having a small number of these things isn’t enough, it’s not linear, it’s like, ‘Oh well with one fifth of the resources we get one fifth of the result,’ at some point with one fifth of the resources you get no result. So, by pooling those or by putting more of the resources in a central bucket, I do think you get the conditions whereby critical capabilities can start. So, in the case of for example my own experience at ABB, we started with a centralized model, I created a central team to build a common platform. The reason I call it hybrid is because the business units remained responsible for building what we call the solution, so this would be the applications that use the platforms, I was like an internal software company if you will for the rest of ABB.
16:25
One key manifestation of what I would call building capability, and I’ll just point to this datapoint, over the four years that I was at ABB, the businesses, the business units increased their spending on digitalization by 38 percent per year. So what you saw was, once they saw that these capabilities were interesting, valuable and they could build upon them, the rationale for pushing more investment to increase their own capabilities grew, so they would hire more data scientists, more cloud experts, more developers themselves, diverting some of the R&D away from perhaps the traditional areas to these new areas, building up more of that capability. So after about four years if you made the case to say why don’t we now push some of the central capabilities back into the business units, I think that case is different than essentially seeing that as, ‘Oh, that’s just going back to what you had before.’ No, the difference being that in the meantime the businesses that built up a lot of additional digital capability in terms of size of team, know-how, and attracting the right talent.
17:30
I do think that most companies will go for a bit of a hybrid, and within that they will oscillate between somewhat more decentralized, somewhat more centralized, somewhat more decentralized, and that oscillation I think to some extent is a normal ebb and flow of, ‘We need these skills but we need them closer to customer, or the other tendency, ‘We have a lot of these skills but they’re all spread out in sub-scale, lets but them together in a common team and get more bang for our buck,’ so those two opposing forces, customer intimacy versus scale, essentially explain why I think there’s this natural oscillation.
17:58
You mention oscillation, but you also certainly you talked about it being kind of lifecycle spectrum starting off potentially as looking at this thing as dramatic and change-agent driven in terms of Newco and then moving down to be more hybrid. Does this mean that the Chief Digital Officer as a role is primarily a transitory change agent one, or do you see it long-term i.e. jumping from one chain cycle to the next?
18:28
I do think that it’s somewhat transient, however that period of transience might be quite long, it’s not months. I think in many cases you could imagine that you hire a Chief Digital Officer, they determine along with the leadership of the company that the initial priority might be to create some common software platform to do big data analytics, blah-blah-blah. Then you discover that your customer interactions e-commerce, the disruptions coming with the e-commerce players like Amazon, Alibaba are significant, then the company needs a response to that, so maybe the focus shifts there. Once you do that you realize a big dependency on your ERP systems, as well as your customer care systems, and therefore you start looking at your IT. So, none of this is extremely speedy, all of these things require some time, so you could be looking at a decade or more to just simply starting to affect all of those changes.
19:20
In fact I’ve come to believe Ken, that any kind of culture change effort between five and seven years I think is probably a minimum required to effect durable cultural change inside of a company, so all of those things even if they’re transient, they’re transient over years or even potentially decades. I do think that a Chief Digital Officer role could be an assignment for someone that essentially somebody moves into that role and thereafter becomes a Chief Operating Officer, or potentially, and this is one area that I think is really promising, one thing I think the Chief Digital Officer could also engender inside of a company is the creation of new all-digital business units. So, let me explain.
20:04
Most businesses especially in industrial sort of come from a physical manifestation of a physical product that then gets some digital capability added to it. In the course of digitalization, you may discover that there are new opportunities, new adjacencies, new markets, and the Chief Digital Officer could be, and I think ideally would be, an early proponent of the company getting into these adjacencies. Then of course when the leadership of the company looks around and says, ‘Okay, you’ve convinced us, this sounds really promising. Who should we appoint to lead this? I think many eyes in the room will turn to the Chief Digital Officer because having made the case they will say ‘Well, since you seem to care so much, and you seem to be so passionate, maybe you should go and lead this.’ So, then you could imagine if that becomes successful that the CDO becomes the BU Manager, Managing Director, Division President, whatever you call them in your company, of this new entity, and then eventually, potentially CEO.
21:01
It’s almost like a venture studio approach in some sense, right? Create new businesses, launch them, run them, get them level of maturity in, rinse and repeat in some sense.
21:15
Yeah, in particular there’s I think new models emerging, where I think in the past you would have said, ‘Well you either go and buy a company (so acquisition) or you do a spinout like you’ve got a bunch of people got some good ideas, but we can’t nurture them here.’ Companies have also tried to do internal incubation, that’s what I was doing at Cisco for about 10 years; but I think there’s a new model emerging which you see with General Motors and Cruise, and Alibaba with Ant Financials, and Illumina with Grail, where you do a partial spinout. So you start this inside, but then you sell off some of the equity to either a private equity or VCs, with a goal to create a semi-permeable barrier between Newco and the rest of the company, so you transfer in some people, you transfer in some knowhow, but you also attract some from the outside and you attract some outside investment to give you the runway required for that five to ten year run, to prove that this can now be successful.
22:11
We have seen examples of this model, you’ve mentioned some good ones in there as well, and its somewhere between as you say, PE and traditional VC in this regard, and there are a number of companies setting up to really help create these ventures and run these venture studios. We actually did that work for Cisco a while back, if you remember the chill project that they did, the hyper-innovation living laboratories!
Yes.
22:39
And so again I think Cisco in many ways was a very early leader in a lot of these efforts. So, let’s go back to your leadership and when you first came in to ABB or other positions you’ve had in the past. How do you asses the teams readiness for digital change, and how do you build that right leadership and overall operational team?
23:02
I think in general if you want to assess the company’s appetite for change I think it’s driven by two things, it’s fear or greed, both work! But essentially it’s a question of is it fear, like we’re falling behind, our traditional competitors are beating us, and we have new entrants coming in, and we need a different strategy, person, team, whatever to help us. Or it could be greed, which is probably better expressed as we see opportunity, we think we can grow, we have adjacencies we’re not currently addressing, we need someone to come in with some new approaches and new thinking. Both are good, I think if you don’t see either one I would question whether there’s enough commitment to the role of a Chief Digital Officer. So, I think if you have a desire and a hunger for change, that’s a good requirement,
23:50
I think the second, especially for CDOs whose mandate and span of control can be somewhat ambiguous and fuzzy, you need a strong sponsor. So, whether it’s the CEO who brings in the CDO, or it’s the leadership team in general around the CDO, without a strong buy-in that says, ‘Yes, we have hired this individual. This is an important role, we need to give them the runway, the mandate to go and effect some change,’ if you are trying to sell that to the leadership team as you come in, that’s a tough slog. So ideally the CEO would have laid the terrain, would have prepared the ground to say, ‘Look, I’m going to bring on board a CDO and this is why.’ In the case of ABB, I had very strong support from both the CDO and the board, and that was very helpful as well because the board said, ‘Look, digital is one of the top priorities of the company, we want to hear about it on a regular basis.
24:43
So, that helps because you have carrot and stick, on the one hand a Chief Digital Officer can offer the carrot of, ‘I’ve got all these people that understand these new technologies, would you like some help?’ But there’s also a stick which occasionally is acquired which is, ‘Hey, listen I really need you to do something, and even if you’re not entirely convinced I do have this stick and I occasionally would want to use that, if that’s what it takes.’ So, I think those are the imperatives that help in terms of a successful digital transformation.
25:11
How did you measure your progress, setting goals and objectives that were aligned in the organization, and especially when you think about trying to avoid getting too far ahead of the organization, or in some sense you’re not moving fast enough?
25:27
You know that’s great, and of course the ultimate proof in the pudding for any company would be like, we want to see profitable growth, and then you could argue about how much of that profitable growth is due to the digital contributions and the digital elements, especially if you’re not setting up a Newco but it’s a more hybrid model where you have digitalization being pursued in existing business units. John F Kennedy said, ‘Success has a thousand parents, but failure is an orphan,’ so if you are successful then everyone will explain that they were part of that success. So, trying to demonstrate that that’s due to the digital contribution can be somewhat challenging.
26:06
But I think you can have some early indications of success. So, for example, we would look at measuring for example the availability of our internal digital platform. Now you can make a platform from an available and if nobody uses it, it doesn’t matter much. So, we would say, ‘Well in order to be able to use it, it first has to exist. So, let’s build that platform,’ and we chose to build on top of Microsoft Azure, so once we had plugged in what we perceived are some holes or some gaps in that platform, that’s what we released as the ABB ability platform.
26:33
The other metric I held out for my team was, ‘I want as many of ABBs Business Units to sign-up and use this,’ in the end we got all 22 after a while, since we sold some of the businesses, 18 business units all went and signed up to use it which I thought was fantastic. Then the next metric is, how many solutions are they building on top of this platform? Then the next metric is how are those solutions faring in the marketplace. But you have to have momentum before you can have the final proof in the pudding of profitable growth, and you have to break it down into these intermediate metrics, because the problem is this profitable growth could perhaps take 5-7 years to materialize in a significant way.
27:17
Let’s go back to something you mentioned earlier, we were talking a little bit about this concept of Venture. How did you leverage the innovation ecosystem both inside and outside ABB while you were there?
27:31
One of the things that I think was an opportunity, although industrial companies tend to buy and sell from each other, it’s an industry where no customer is greenfield everything is brownfield, so it is quite common for your biggest competitors to also be your biggest customers. What was not pervasive was a spirit of partnering, and in particular one of our earliest decisions was to partner with Microsoft as the foundation of our platform, so already leveraging a lot of those software innovations from Microsoft. Then after a while we added many other partnerships as well, so Hewlett Packard Enterprises, we also partnered with small companies such as Create and others. So, once you open the doors and you say between customer and supplier there is this other thing called partner and partnership, it’s really more of a two-way street, it’s not like you buy from me and they buy from you, so at the end of the day you want to have this ability to have an open door, and that takes sponsorship, because of course those companies want to know, ‘Listen, this is a big company, you guys have 148,000 employees. Who is my advocate on the inside? Who can I go to? Who can tell me what to try and what to do next? So, establishing this reputation for, ‘I’ll be that person for you guys, I will be the sounding board, or I can advise you if you’re looking to do business, or approach mutual customers,’ and things like that.
28:56
The other part is… and again one of the reasons why even though ABB is a company that’s global, a lot of its leadership team is sitting in Zurich. Myself in the part of my team we stayed here in Silicon Valley, and one of the reason for that is there’s 30,000 start-ups here in Silicon Valley. There’s all kinds of innovations going on, on a daily basis, and our networks, cumulative networks of contacts led to a lot of people reaching out saying, ‘Hey, glad to know you’re working for ABB, would ABB be interested in x, y, z? So, we got to hear and see a lot of different things just being accessible here in the valley, and I think that helped a lot as well.
29:35
I think the other part is you have to have a really good quality reputation, meaning if you’re the kind of company that listens to all these start-ups but then essentially just takes their ideas and runs with them, people won’t come and knock on your door a second time. So I think having a reputation for integrity, respect, and recognizing that for these start-ups in particular, their time is valuable, they run out of cash… if they’re talking to you, you’ve got to make it worth their while, and if you’re not going to do anything you should tell them that. If you are going to do something you should definitely do that. So, I think that reputation as an honest broker is particularly important, and it’s something which I don’t think you can just parachute into the valley, you can’t just send somebody from Head Office, you have to have I think people that have roots here in the valley as well, because they’re known, and they’re known from their previous jobs.
30:22
Yes, I give you kudos on two fronts. I think you did Silicon Valley-ise if there is such a word, ABB, and I’ll contrast some of the other industrial players that I think are trying the same, you’ve made a lot more progress, similar to what Bill did at GE. The other thing is, I appreciate the plug for Create, Create of course is one of our portfolio companies, and I tell you every conversation I had with their leadership team relative to their experiences with ABB was extremely positive; so the integrity, not wasting their time, and all the things you mentioned are things I would hear from them as well. So, kudos on both of those fronts.
31:06
It’s been a great conversation, I’d really like to wrap it up as the learnings you’ve now absorbed during the 10 year at ABB. If you could go back and reset the clock again, what would you do differently if you were to retake a position like that again?
31:27
One of the things I was working on towards the end of my tenure at ABB was this phase of the internal new digital business creation, it kind of takes time because at some point you have to start with credibility, building a platform, everybody wanted a platform, they didn’t want to talk necessarily about creating new businesses from scratch. But I wonder whether or not I could have done that a little bit more in parallel, because these new businesses starting up a new BU for example takes time, and I’m not sure that there were that many dependencies between one part of my job and this part, because that would have been identifying markets, opportunities, strategizing, so I wish to some extent that I could have tried to perhaps start those conversations earlier, we could have potentially advanced those efforts by at least I think about a year, or maybe 18 months or more. So, I think that’s one thing which I would definitely want to look at.
32:22
I’m actually personally really attracted to that space, because I think it’s a new model for corporate innovation that companies I think are dabbling with now, and it’s different than the let’s sell this, or let’s buy this, or let’s just do purely organic internal which has run into all kinds of problems on its own, because typically with the change in leadership, or misfortunes in the core business, these internal tender shoots of new incubated teams tend to struggle after a couple of years, and that’s sort of been unfortunately my experience, is that while initially things are great, in year 3 or 4 that’s typically when tough times set in with either a change in leadership, or perhaps some competitive threats causing the company to want to divert resources to defend the core.
33:15
So I think I’m personally registered in trying to experiment with new models of corporate innovation because I think it’s sorely needed, otherwise the Fortune 500, or the biggest companies in the world have no choice but to either acquire or to divest, and I think that’s a fairly brute force approach to innovation, and I’d like to think that there’s a more nuanced approach, that could be very successful.
33:31
I fully agree, and certainly to the plethora of scouting operations in the Bay area from very diverse industrial companies, some more successful than others, we’ve kind of tended to start to think about this as buy, build, borrow, right? Buy and build obviously the traditional way, but borrow – participate in the ecosystem, leverage partners in that whether it’s taking on external investment as you said for a potential start-up or spin out, and/or working in already established ecosystems as you mentioned, Microsoft and Azure several times. I fully agree, I think there is a new model emerging in there that sits as a hybrid between the traditional. And so, I guess the final question of course, I think you’ve already hinted toward it, and I’m sure everybody’s thinking about it right now is what is your next step, what are you going to be doing next?
34:30
Yes, so thank you for that. I’ve gotten some enquiries from other industrial companies looking for Chief Digital Officers, or Chief Technology Officers. But I’m actually much more tempted, and I’ve also had some enquiries from smaller companies that I guess calling them start-ups is probably not quite right, they’ve been founded about 5 or 6 years ago, they have about 200 employees, they may be doing tens of millions in revenue, but they’re making this key transition from selling projects to trying to sell products, meaning the first couple of successes were done by sending a lot of smart people to try and solve whatever problem the customer had. But now the time comes, especially to try to scale to the next level, that they should distill their learnings into repeatable package-able offerings that don’t require extensive customization, so they need to sell to enterprise customers, they need to figure out how to crack that code, they need to do marketing. A number of these companies in that stage have recently approached me and asked for some either part-time or advisory role capacity to help these companies through these stages, and I find that super-interesting, and these are in some very-very exciting domains like AI, IoT, and other areas. So, I’m quite tempted to potentially do that Ken.
35:41
Opportunities, especially because you’re cast in a pretty wide net when you look at traditional industrials, and of course these later stage start-ups if you will, and so I think it’s absolutely great that you’re considering that. Guido, thank you for providing this insightful interview.
35:46 You’re welcome Ken.
35:50
So this has been Guido Jouret, recent Chief Digital Officer of ABB, and longtime digital industry leader, and I guess if I could phrase it, a lifelong tinker as well given your comments earlier!
Yes.
Thank you for listening and please join us next week for the next episode of our digital industry leadership series.
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