Elizabeth Hackenson has been a CIO since 2004, and when she took on that role for the first time, it was as traditional CIO. As she describes it, “The CIO was still focused on systems, ERPs, services across the enterprise, and outsourcing to low-cost countries.” That was as the CIO of MCI. She would become CIO of both Alcatel Lucent and at AES for a decade following her tenure at MCI. With each stop, she took on greater levels of responsibility and contributing more strategic value to the enterprises she was a part of. For example, at AES, she would take on the Senior Vice President of Technology and Services role along with her CIO role. It as during her tenure there that she was inducted into CIO.com’s CIO Hall of Fame.
About a year and a half ago, she became the CIO of Schneider Electric. Having served in the energy sector previously at AES, it was a return to an industry that she knew, but it was a chance to go to the demand side from the supply side. He challenge in her current role has been managing a global team, with executive team members in Paris, Hong Kong, and Boston. She also has worked with her predecessor as CIO, Herve Coureil, who is now the chief digital officer of the company, in digitizing the business operations and enhancing digital experience for customers. She describes all of the above and more in this interview.
Peter High: You are the Chief Information Officer of Schneider Electric, a role you are familiar with. You previously held the position at MCI, Alcatel Lucent, and most recently AES, so you are no stranger to large global businesses with a great deal of complexity. What drew you to the opportunity at Schneider Electric specifically?
Elizabeth Hackenson: As the Global CIO for the company, my responsibilities include providing all of the IT services and collaboration tools while managing the enterprise systems for the entire company. We operate in over 100 countries, and we serve 144,000 employees in addition to our customers. As a result, we have a massive IT organization, which is one of the largest that I have managed. I had several reasons for joining.
- In the interview process, I quickly learned that Schneider is a people-centric organization working in a collaborative style and culture. Moreover, the company is focused on making a difference in the world through technology and by solving business problems, especially around energy. I previously spent nine years at a global energy company, so there was a natural fit;
- The company has a bold vision and its strong heritage in innovation and technology. Schneider rallies around the idea that life is on everywhere, for everyone, and at every moment, which is crucial;
- The increase in urbanization, industrialization, and climate change, which we believe can be achieved through innovation, especially digital;
- The future of electricity. I spent nine years at AES studying climate change, decentralization of power, and decarbonization, and I became convinced that digitization was going to help us. Not only did I believe that it would support the urbanization taking place and the next industrial revolution, but that Schneider was the leader in technologies and investments related to these trends.
High: Could you provide a bit of context around the digitization of electricity. What form does that take, what is the vision of the organization, and what is your team’s role in that?
Hackenson: When we think about the products and services that we sell to our customers, we view them as being consumers in their homes, hospitals, factories, and office buildings. Our company has products and services to help move that electricity through whatever facility they are in. As we are connecting more of those physical products, whether they be thermostats, uninterruptible power supplies, or high medium voltage, we are connecting those products to the Internet of Things. We are able to help our customers have analytics around that information. As a digital-first company, we have to have the same vision and principles within enterprise IT around how to use our digital technologies to build products and services for our customers. Likewise, we have to think about how we use these products and services internally. This involves leveraging machine learning and artificial intelligence [ML/AI], the cloud, and application programming interfaces [APIs]. We are mirroring many of the technologies that our product people are using to build products for our customers.
High: You recently celebrated your one-year anniversary with the company. I assume the past year has been exciting given the pace of change and some of the strategic points you have focused on. Being experienced in the industry certainly helped you, but could you talk about how you structured your first 100 days in order to understand the company, its culture, the team you were inheriting, and some of the areas to focus on?
Hackenson: I was on the supply side with my previous company, and joining Schneider put me on the demand side, which was something I was interested in. It was helpful to have a background in energy, so I had a bit of a leg up in that regard. Within my first 30 days, our [Chief Digital Officer] Herve Coureil was ready to launch his organization structure for Schneider Digital. He wanted me to take my time, but within my first 30 days, I realized there is anxiety when someone new comes in and there is a big organizational change taking place. In fact, I implemented the IT organization at the same time as the rest of my peers. As a result, there was a great deal of work to do within the first 30 days just to get that organization in place. I thought it was important to settle everyone down, and I knew that the organization would be an evolution throughout the year as I learned more through talking to business peers, customers, and visiting employees.
Another focus of my first 100 days was trying to speak to as many employees as I could. I made multiple trips to Paris, I was in India, and I visited many locations in the US 45 days into the position, an individual who was reporting to me in North America left the company. As a result, I was essentially holding two roles, which were as Global CIO and the Head of IT for North America. While at the time, it appeared to be a bit overwhelming, it was a great experience because it allowed me to get involved in one of the largest operations in the company. In doing so, I got to learn the leaders from that region of the world. If I was not forced into this dual position, I likely would not have met them so quickly, and I do not believe that I would have gotten as immersed into some of the challenges that our operations have. While I was doing double duty over my first 100 days, it was a great way for me to learn about the company’s leaders, challenges, and opportunities that we had in IT.
High: You mentioned that Herve Coureil, your predecessor as CIO, has remained on as the CDO. Can you talk about the advantages of having the predecessor still present in an important role?
Hackenson: It is been a great opportunity for both of us and knowing each other coming in certainly helped. I took advantage of his experience as the company’s CIO. When I needed him, I reached upward, and he was always helpful. You always want to make sure that you are headed in the right direction, so it was great to have him there to help guide me along the way. We have a strong relationship, I feel comfortable with him, and if I am in doubt of something, it is an easy conversation to have because we speak the same language. By nature, I am careful to be respectful of the decisions that he and the team made because people have stepped into my role as CIO in other companies. We all make decisions based on what is in front of us and the challenges that we are dealing with at the time, and as time goes on, change occurs. I do not believe that CIOs make bad decisions, but we do what we believe is best given the environment that we are in. Herve has been incredibly supportive of the changes that I have made, especially organizationally with people, and he helps me think through many of those decisions.
High: Just over a year into your role, many of the changes around people, process, and tools that were necessary have been put in place. While these changes will continue to be made, now that you are a year in, what are your priorities?
Hackenson: We have a number of priorities.
- We are continuing to accelerate the adoption of many digital technologies, such as the cloud, APIs, and mobile-first. While these technologies were underway when I arrived, we are now in a massive acceleration of pushing them forward. Specifically, we are making a mind shift change to Agile and DevOps methodologies, which is somewhat new to the organization. We are investing in training, we are working more in teams at the same physical location so that we have more of a product mindset, and we are continuing to strengthen our cybersecurity posture. Moreover, when I arrived last year, we worked hard to implement many collaboration tools, such as Skype, Yammer, and Office 365. There was an initial adoption rate, but as we faced some networking challenges and the shine of the new object wore off, we lost a bit of the adoption. We are proud of the number of people who are using these collaboration tools. These people are working differently, but it is never enough because we want more adoption and proficiency. We are also making a big push on digitizing processes using Robotic Process Automation.
- We have a great deal of legacy technology, which we refer to as technical debt. Unfortunately, this technology is likely our biggest source of low employee experience scores. Because of this, we are going to put a huge emphasis on going after that technical debt this year. This involves decommissioning older applications, applications that cannot move to the cloud, or applications that cannot support single sign-on. Even in my previous roles, nobody wants to work on decommissioning applications. This is not viewed as the sexy stuff, but we are at a point where we see it as a debt and not a dividend.
- We are supporting innovation within the IT organization. I am a big believer in learning every day, so I try to support organizational training any place I can. This training may involve self-learning, bringing people in to train, or sending people to classes. The only way to innovate using digital technologies is for our people to understand what these tools do and how they are used. At the end of the day, everything we do in enterprise IT has a direct correlation to benefiting our customers through our employees and the tools that they use.
High: The longer you wait to solve the technical debt problem, the more it racks up. How do you prioritize this? Are there factors that make certain technologies the first to modernize or retire?
Hackenson: We have categorized these applications into tiers. Our tier three and four applications, for example, have to go. These technologies are either too old, they cannot support moving to the cloud or single sign-on, they present security challenges for us, they are expensive to maintain, or they have horrible employee experiences. As you continue to unpack some of the legacy technologies, you find that you have few users. In fact, we have identified some technologies that only have five users. You have to scratch your head and say, “What is this application doing?” We have to make some tough choices. In some cases, we are just going to shut the applications off, sometimes we may look to transfer the data to an existing application that we believe has a future, or sometimes we may need to rebuild something.
We are currently in the process of going after the low hanging fruit. We are going to start shutting off applications with low usage, and we are going to attack the more gnarly applications after that. When we ask people to do this as part of their day job, it does not get done, so we selected an individual who has been with the firm a long time to dedicate her time to this. She has been in IT for over 30 years, so she is quite familiar with the challenges of decommissioning legacy systems. We have surrounded her with a group of people who are likewise dedicated to this task.
We have developed a dividend and tax approach with our business peers that we plan on rolling out this year. If we are able to decommission applications that support their operations, they work with us quickly, and there are cost savings, we give them a dividend. This dividend could involve shared cost savings or us reinvesting the money we save for some of their needs. While we want to incentivize our peers, we additionally have to play the tough love card. We are currently working on a plan that requires those who pushback on decommissioning legacy applications and are a risk to us to pay a premium for them.
High: You mentioned that your organization has 144,000 employees and does business in 100 countries. In fact, your leadership team is widely distributed. There are leaders in Paris, Hong Kong, and you are based in Boston. How do you make sure that people remain productive and in touch? You used collaboration tools as an example, but how can IT ensure that there is a cohesive culture within an organization, especially within a leadership team that is so distributed?
Hackenson: To me, the collaboration tools that we provide are immensely critical because as you mentioned, we have three hubs. Instead of having one corporate office, we have major offices in Boston, Paris, and Hong Kong, the latter of which is where our CEO is based. We rely on our ability to have instantaneous conference calls. We have tens of thousands of employees who use Skype each day, which amounts to roughly two million minutes per day. Furthermore, we have large boardrooms for those hubs where we are sharing video content and voice. There is a bit of pressure on us because the audio and video quality always have to be on.
We are active users on Yammer as we have 40,000 people using it daily. We are trying to move off of email and talk to each other more. We are not only in 100 countries, but we connect to over 1,000 different locations worldwide. When people travel around, they want that seamless experience, and we have done a great job in that area. I can be in Boston one day and Paris the next, and my device works without calling an IT person to get connected to a local domain. Before I [joined the company], a great deal of focus was put on providing a base for these collaboration tools. However, the pressure is now on us every day because, given what we do, these are tools that people want access to all day long.
High: You have been a CIO for nearly 15 years, many of which were spent at various large organizations. Can you talk about how the role has changed since you first took the position? Further, given that change, where do you see it going?
Hackenson: I became CIO in 2004, and at the time, the CIO was still focused on systems, ERPs, services across the enterprise, and outsourcing to low-cost countries. Once 2008 hit, I believed the world-wide economic turn-down affected the investments that many companies wanted to make in IT. I believe we were in a bit of a lull, but once we started to see improvements in 2013, more and more enterprises became comfortable with the cloud. We have a tremendous opportunity as CIOs because of where we are with all of the digital technologies that are giving us the chance to transform our business. This involves offering digital products and services to our customers, rather than just digitizing processes. I believe we have just scratched the surface, and many of these technologies give us much more flexibility. Back in the days of the mainframe and data centers, for example, we could not move quickly, it took a while to provision, and it was extremely expressive. We now have more processing power and more storage, which is helping to push ML/AI because of the volumes of data that you need.
There is a great deal of activity going on, and as a result, applications that we build today may not be viable in five years. Because of this, CIOs have to be comfortable with the fact that even if they build a technology quickly for the right price, it may be obsolete within a few years. Moreover, CIOs have to be comfortable with the increasing popularity of the CDO role. Instead of being threatened by it, we have to see it as an opportunity for them to look across the business.
Overall, there is a great deal of opportunity for CIOs. To maximize this opportunity, CIOs have to be willing to learn and make quick decisions because we do not have six to eight months to make sourcing decisions. Instead, we have to pilot, implement, and course correct along the way. While perfection was the norm in the past, it is not realistic going forward, and CIOs have to accept that.
High: You talked about some rising trends that you are surfing, specifically those associated with digital transformation efforts. As you look to the future, are there any additional trends that come to mind?
Hackenson: I’m excited about digitization because there is so much that we can do with it. We have barely scratched the surface on technologies such as virtual assistants, which I am trying to bring in so we can get off of email. When I need help from the IT help desk, I want to be able to use a nearby virtual assistant instead of having to type out an email. We would love to do the same for our customers for ordering or finding out their order status. Further, it would be great if our finance team could simply ask questions to a virtual assistant around how much we are spending on a specific vendor. My other focus is on innovation and the notion of co-innovation. Our product teams are creating connected products, and they are co-innovating with third parties. Further, they are opening up our R&D labs, and we are co-creating with many entities, something I believe is unique to Schneider Electric. I want to take this same approach within enterprise IT because we have traditionally been closed. While we may have partners or contractors that we hire, we still keep much of that innovation closed. By modeling what our R&D and product teams are doing inside of IT, we can get more comfortable with co-creation. Whether this is through leveraging people in the gig economy or through one of our technical vendors, it is an area that I am excited about.
Date: April 03, 2019