Innovation Across BordersBy Karen Lojeski | Posted 12-11-2006
Innovation Across Borders
IT can play a critical part in the innovation process in any organization. But at many companies, the links between IT and innovation often prove elusive. Not so in the case of Credit Suisse and its CIO, Tom Sanzone.
Sanzone joined the company in 2005. He came to Credit Suisse from Citigroup, where he was CIO for the corporate and investment banking and private client business, as well as the global transaction services business. In this role he headed CIB Tech Services, responsible for the strategy, development and implementation of all application technology. He was also responsible for the area's technical infrastructure.
Sanzone is a true believer in the benefits of IT in supporting innovation. Contributing Editor Karen Sobel-Lojeski recently sat down with Sanzone to learn how, by driving innovation through Credit Suisse and beyond, he is succeeding and outperforming the competition.
CIO Insight: What is your vision for driving innovation and transforming IT organizations?
Sanzone:IT plays a key role in the innovation space from a number of perspectives. We work in partnership with the [Credit Suisse] businesses that we support, providing products, software and services that can be used to drive business. So when we're working with traders, we're developing innovative trading platforms and analytical models and capabilities that can give them a competitive advantage in the marketplace versus the competition.
Technology can also drive innovation in the way we work, even in our operating models. Technology innovation is really enabling the virtual workforce, changing the traditional models of how people work and interact as part of a team. Today, teams often span continents, working on the same project or on the same deliverable. Professionals from multiple countries and cultures are brought together for a project, and the glue that binds them and makes them efficient in their collaboration is technology.
So IT can bring that dimension to the business, and we continue to evolve and create more and more opportunity. For example, I have desktop video in my office, which has really improved my ability to manage over great distances. I have direct reports who are in Asia and Europe, and, frankly, being able to see each other on the screen and talk and read body language versus just being on the phone makes a huge difference in our communication and in our ability to build our relationship.
Technology also innovates in transforming traditional operating models, and not only within IT, but in the businesses as well. It changes the way businesses deploy resources around the globe. We're seeing pretty significant shifts in traditional operating models, and over the next few years, some of them will be completely reinvented. Could you give an example?
Take IT. Up until a few years back, we had a model where a team supported a business. That business was located in one of the major financial centers, whether it was New York, Zurich or London. And that team was all together.
But now we're starting to deconstruct a project into its different components, and each component has a place where it's best implemented or built. If you take software for example, the team may now look like the following: The designers and analysts are in New York working with the traders; the coding may be done in India; the testing could be done out of a Center of Excellence in Singapore. So the project is now broken down into distinct parts. You have to ask: "Where and how will we achieve the best value for this piece of work?" Now, instead of using a generalized, front-to-back approach, we're looking to disassemble these projects and put each stage in the right location where we have the right skills.
That has taken us from a physical team to a virtual team. In addition, we're starting to make better decisions from a value-chain perspective about where things should be done, and why. Now when you deconstruct that project and create that virtual team, what pulls it all together is the technology, because these various units and teams around the world have to feel like they're part of one unified team. They have to have efficient communication and adapt to change quickly. What makes that possible is the technology that connects them globally.
What are the challenges with the distributed model?
Given all these new opportunities, what are some of the challenges with the distributed model?
Well, a consistently significant challenge facing all change programs is managing people getting the organization ready for change, thinking through how you're going to implement the change, at what pace, what effect does that have on the people currently implementing the function or the process. And then in terms of the model you're evolving toward, how do you make sure the people involved work well together, that the people systems are appropriate for that model. In short, is it efficient?
You're extending what we're normally used to in the workplace, just like the two of us sitting here, building a relationship. Relationships now are different because they're more virtualized. People aren't enjoying as much face-to-face interaction in the same physical location. That's a dynamic change. You have to figure out how you're going to build the same kind of strong and trusting relationships while working across great distances you might only be in the same physical location a few times a year, if ever. So that's a dynamic change. I think it works, but you can't trivialize its importance. You have to think about it in a different way.
We're looking at new videoconference technologies that are amazing. They're high-definition, zero-latency interactions, where you go into a room, sit down and you really feel like you're sitting around a table. The image of the person who is communicating through a flat panel is life-size it's as if they were sitting there.
So the challenge is really about people and change. It's not an everyday, "plain vanilla" change-management issue. Can you expound on that? I have people working all over the world, and the approach to even basic things, how to develop software, for example, is vastly different depending on the country and culture. In the U.S., for example, there's a pretty entrepreneurial mentality. It's aggressive and, from a process perspective, less formal than some other cultures. Conversely, in some other regions and cultures, the precision around project management is extremely important dotting the I's, crossing the T's, thinking everything through in advance. We are currently in a situation where our teams are being integrated, so we are confronting these differences. It takes a lot of work and time to figure out a way to capture the best of both cultures and processes, and come up with something that's a hybrid. This will take some adapting by all groups involved, but it is something that we can aspire to.
However, it is really not a process issue. It's a cultural issue, a values issue. As you create these virtual teams and workforces, you have to deal with these differences at a much higher level. There could be any number of variations that an organization has to deal with. The challenge for management and leadership is how to bring them together, to take the best practices from those different cultures and processes and make it all work. I don't think it happens overnight. It's something that happens gradually over time.
In the initial stages of integrating processes and cultures, it is important to bring the people physically together, which may seem counter to the virtual concept. Let's face it, spending time together in the same location is critical and always will be, because that's human nature. So you need to get the people together, they do need to spend time with one another, and then they can move out to the various locations as part of a virtual team.
It's like creating a strategy together on the back of a napkin, and it turns out to be a great idea that happened because of the natural rhythm and flow of informal, face-to-face conversation.
That's so true. You can be in a meeting all day and you're interacting and you're getting results, but then when you go out to dinner and you're in that environment for an hour, you notice the conversation is much better than it was during the day. The openness, the sharing of ideas, and the more candid interaction
The Process of Building Trust
You seem to be describing the process of building trust.
Actually, in our vision statement, one of the aspects of our desire to become the premier IT organization in the industry is to be what we call a "trusted advisor." If we're able to become trusted advisors not only to our key clients, customers and business partners within IT, but also to our peers across IT, that will be a critical step in becoming a premier IT organization. Building those relationships is something that we are focusing on, and will always focus on.
I was just thinking about what I did when I joined Credit Suisse last year. I was a new guy who came in and I put a relatively new team together some executives that I had worked with in the past, others who were brand new. One of the first things I did was develop a code of conduct, which described the behaviors of the people on the team: what I expect of them, what they expect of me, and what we expect of each other.
Has your thinking changed over time?
I think what you need to create in business is commonality: a common operating model or a common set of rules of engagement. I'm not sure what you call it. It's not culture per se, because in reality our cultures are still our actual cultures. We bring that to the table every day. I'm never going to be the same as someone who was brought up in a totally different region and from a different background. Regardless of how we label it, what we need to do is work effectively together, and to do that we need a common set of values and a common framework for conducting business.
When I sit around the table with an American, British, Swiss or Japanese colleague, it's clear that we don't have the same cultural perspectives. Those differences, however, are tremendously enriching and constructive. To be effective as a cross-cultural team, we need a common set of operating principles, in terms of how we're going to work together. That's the key to getting the best out of all these different perspectives and values and approaches, and putting them together into something we can all work toward.
How would you describe the ideal leader for this new virtual model?
You need to be globally experienced and a global thinker. When you go to Europe or Asia, you get a feeling for the differences and how people perceive one another, and what's going on. It isn't necessarily obvious that you need to spend time on the ground in the various regions that you cover. But you do have to get a feeling for the areas you are responsible for, and that takes time. So here again it seems to contradict the virtual model. It's counterintuitive, but it's true: You need to spend time in global locations, working to understand people, cultures and approaches in order to then fully take advantage of the virtual model.
What about leaders who may be a few degrees away from you: on-site people, or leaders who travel. How do you translate that interactive leader to workers who might never meet each other? Well, you'll have one or two layers of leaders who do the traveling and face-to-face communication with the people in the various locations. These are your touch points for the organization, and they syndicate the message and the strategy around it. As [virtual meetings] technologies evolve, it's exciting that people can walk into different rooms around the world and feel like they're all together. Eventually, it will be available more broadly across the organization and we'll get more performance out of it. But right now it's generally available to a limited group.
Circling back to how IT drives innovation, you probably understand these issues better than most because you're on the IT side. It seems that CIOs can truly shine in this transition to innovation because they have long been sitting at the crux of these issues.
One of the things that's been a real blessing for me is, because of the nature of my role, I've been able to support the entire business. There are very few people at companies who actually get to see the entire business. I support all front-office areas. I also support the whole back office, the infrastructure everyone's my client. We're able to see the business holistically, and IT is probably unique from that perspective because the systems work across every function.
How would you advise other CIOs who want to implement some of your ideas at their companies?
I would tell them: You have to create a culture that supports innovation in your world, company, or division, and there are some very specific things you need to do to accomplish that. Certainly, the senior IT executives need to publicly and consistently support innovation in the organization, to promote success stories and make them part of the organization's agenda and culture.
From the perspective of corporate culture, you need to support it because innovation by nature involves a certain degree of risk-taking. So you have to promote a culture in which people feel comfortable about innovating, and where innovation is not only rewarded, but failure on the road to innovation is viewed as part of the process. Supporting innovation means not only supporting the successes but also realizing that when we make mistakes or things don't pan out, you shake the dust off and go at it again.