The latest insights from your peers on the latest in Enterprise IT, straight to your inbox.
This article is by Featured Blogger Peter High from his Forbes.com column. Republished with the author’s permission.
Vince Campisi joined United Technologies (UTC) as the Senior Vice President of Digital and Chief Information Officer in mid 2016 after most of two decades with General Electric. He spent the last year as the Chief Operating Officer of GE Digital, so he was quite familiar with the ideas behind digital transformation of a large, multi-operating company industrial business.
At United Technologies, he found an environment ripe for change. Digital transformation had begun in pockets in the four operating companies: Pratt & Whitney Aircraft Engines, Otis Elevators, Climate Controls & Security [CCS], and UTC Aerospace Systems. That change had not been coordinated globally in a way that Campisi was used to. He embarked on a journey to foster more collaboration across the operating companies and one of the keys to this has been the development of the United Technologies Digital Accelerator in Brooklyn. The Accelerator is less than a year old, but UTC and Campisi have have found a great group of digital leaders to drive change. The vision is for this to have multiple hundreds of people in the office in the DUMBO section of Brooklyn in the next year. Campisi describes the work of this team, the digital transformation more generally, and the need for digital leaders to play offense, defense, and special teams in order to win in the marketplace.
Peter High: You are the Chief Information Officer and Senior Vice President of Digital at United Technologies. Can you talk about your purview as it relates to those two aspects of your role?
Vince Campisi: There is a lot of discussion around digital. Sometimes, that conversation happens concurrently with IT. For us, we wanted to make a conscious decision that those two things work hand in glove and not two different facets of the organization. Instead, they need to be driven in a way that takes advantage of what classic IT offers a company like us, as well as the aspirations of digital as it relates to how people think about it in the market today.
We see it on two dimensions. One is reinventing IT. For us, that is about how you would streamline critical business processes, improve sales processes, and improve manufacturing processes to improve inventory. It is also about infrastructure services, and how you enable computing at scale and make sure the employees have the resources they need to be productive. The second part is when we think about reinventing IT more effectively around cybersecurity. I would classify those as defensive capabilities. How do you protect the bottom line, drive productivity, and efficiency?
The second dimension which often gets classified as digital is how do you accelerate business growth? That is where Internet of Things for industry comes up, which goes hand in glove with data and analytics, and how you use those insights and software applications to grow value with your customers and help customers achieve new levels of value. That is the offensive dimension of how we use IT and digital to differentiate the company.
High: United Technologies is itself a diverse business. Could you talk about how IT is organized across the various companies of the organization and ultimately, how it reports up to you?
Campisi: We have four iconic franchises: Pratt & Whitney Aircraft Engines, Otis Elevators, our Climate Controls & Security [CCS] business, and our UTC aerospace systems business, which recently announced a partnership with Rockwell Collins. Those are the four major business units. Within them, they have a variety of P&L's and other facets because they are Fortune 200 companies in and of themselves. The way we think about it is they need to be in a position to differentiate and compete in their respective markets.
They each have a digital and an IT strategy that enables them to connect with their customers in a new way and differentiate themselves in the market. We then look for places where there is horizontal scale and horizontal leverage. From a technology architecture perspective, this could mean cloud computing. When we think about talent and the breadth of what the company has to offer, it creates a lot of opportunities for people to find new challenges and new ways of working across industries without having to change pay or benefits.
The third part is things like cybersecurity. The business units might decide on the appropriate platform for them or how they are going to develop a smart factory. We will have a reference architecture, but they will select the MES system that is best for what they need to do. There are places where we might have a stronger point of view for horizontal leverage around network, or email, or security tools. That is the balance between what we do centrally versus de-centrally.
High: There is a fair amount that is unique within each of those organizations, but there is also a lot that is common. How do you think about governance, and how is it shared across the organization?
Campisi: Each business unit has a digital leader as well as a more classic IT leader in the form of a CIO. There is a dual reporting relationship to the president of each respective business unit, as well as to myself as it relates to the digital technology function. There is a balance on understanding key business priorities and making sure there is an agenda that supports that.
We also have councils and other mechanisms that drive alignment. That is done through a collaborative structure that looks for what makes the most sense while avoiding mandating things to the point where it is limiting. The goal is to not miss opportunities to take advantage of what there is to offer across the company.
High: How have your needs for skills changed as the transformation has grown? Obviously, there is digital, but there are also some things that are fundamentally new, especially relative to how IT has traditionally been managed. How do you think about the talent portion of that?
Campisi: I am going to answer in two ways. I alluded to offense and defense earlier. The broad way is that defense wins championships. We can never lose sight of the fact that the classic role that IT played is as important, if not more important, to how we play the game going forward. That said, it is an uninteresting game if you do not put points on the board and you do not use it to play offense.
There are lots of sports analogies that you can make, and I would say the one that we find ourselves living in is most like football. You fill the defense. There is a finite number of players and they are very specialized in certain skills and roles. They form a formation, run plays, and then, there is a transition which happens. Now, you bring out the offense. In that analogy, I would offer cyber as the special teams unit. It can play both ways.
Where we need to transition to is a much more agile form of how we work – maybe more akin to a basketball or soccer style of play than Football. They may have a defensive dimension to them, but they are on the field all the time and there are lots of transitions happening through the course of the game. Organizationally, that is what we aspire to get to. When you hear "agile" or "DevOps", that is the transformation we are looking for.
To successfully manage talent in a way that balances offense and defense, we classified it as three disciplines. Business Systems, which is any three-letter IT acronym: CRM, ELM, ERP, etc. Infrastructure Services, which is things like networking, end-user services, and data center operations. The third is cybersecurity. There are four that we have since declared as additional dimensions, focused on creating value for ourselves as well as for our customers.
The first of the four we added is Product Management, which often has an ambiguous definition. To us, it is about understanding the customer pain points. If we solve those pain points, what value can it create for us? How does that get solved in the form of a technical solution? Product management is the one that brings those three rings together.
The second discipline is around user experience design. Design thinking focuses on shaping a problem differently, as well as UI.
The third one is around software development. It highlights the fact that there are people who are good at living in a command line every day. That is welcome here. We cherish that, and we want more of that. Many companies who have overly outsourced have lost some of that. We are trying to bring that back.
Lastly, we focus on data analytics and data science. How do we make sure we are thoughtful about this? How do we manage data at scale, reason over it, and build analytics and algorithms that make us run better and make our customers run better? Those are the four disciplines we have added, resulting in the seven disciplines of the digital technology organization.
High: So much of what you described is new. How do you think about the ecosystem that you are putting together, whether it is partners who you are bringing on, contractors, or others who can bring skills rapidly to the company?
Campisi: In each of those seven disciplines, we have someone on the staff who is appointed to be the community leader for that discipline. They build a point of view on how much we want to have on staff versus how much we want to leverage partners for. Each will have its own balance of what is right. Secondarily, it is now a world where partnerships can have multiple dimensions to them. They can be customers of ours, or we can be a customer of theirs.
We could potentially go to joint customers together. We have formed a role on my staff purely focused on partnerships and alliances because it is such an important dimension of our supply chain from an IT organization perspective regarding how we deliver value. Additionally, when you want to play offense, that partner network can be a vehicle to reconnect with the existing customer base and potentially new ones.
High: United Technologies has had a traditional R&D function. How do you balance these traditional functions with the newer innovation programs that you have in place?
Campisi: As we think about United Technologies going forward, there are two propulsion engines for growth across the company. One is United Technologies Digital, which is the organization I lead. The second is the United Technologies Research Center, and Paul Eremenko just joined us in January from Airbus to lead that. Paul leads Engineering, Research & Innovation, and he oversees 25,000 engineers and 1,000 Research Center employees.
We are very excited because these two organizations have a ton of innovation capability between them. There is a lot of innovation that happens through the research organization in how we innovate products that apply the laws of physics. When you think about aircraft engines or some of the equipment we make and what it is expected to do in the world, software and analytics are becoming such an important dimension for those going forward. When you think about IoT for industry, we are moving towards connected products. The collaboration will never be more important than it is today.
We are fortunate to have a large central research group. Many companies do not have that luxury, and it is one of the powers of United Technologies Corporation. We make sure we are doing our part on the digital side to be ready to help them take advantage of their innovation and get it in the hands of our entire workforce. We also think about how we can use that innovation to have our products create more value for the world.
High: We are speaking today in Brooklyn at United Technologies’ Digital Accelerator, an innovation lab of sorts. Could you describe the intent of this lab?
Campisi: We are still early in the journey. In recent months, we opened our first phase at the site in Dumbo, Brooklyn, and we will open the second phase this quarter. The rationale was that those four skills I referenced earlier were not skills that we were commonly staffing for, at least not to the level required.
We went through an exercise and realized that there is terrific content across United Technologies Corporation. If each business unit were recruiting for these skills, we have a high chance that we will find the right people to join us. However, we have an extraordinary opportunity to bring the breadth of the company together and approach a talent-rich market like New York. This is a chance to approach a market that has an abundance of this type of talent with the breadth and purpose that United Technologies has, and there are few companies doing that here. That is what drove us to create this accelerator as a hub to recruit talent.
It was also a conscious decision to keep it separate from the Mothership. We do not want to have the accelerator get burdened with bureaucracy, because we want to give it a chance to experiment and incubate new ways of working but with the intent that has to lead back to where the rest of the company sits. Whether that is in Farmington or Hartford Connecticut; Charlotte, North Carolina; Paris, France; Singapore; Palm Beach, Florida.
Wherever we have groups doing this type of work, the expectation is the methods and the tools that we are experimenting with here in Brooklyn will lead back into the rest of the company. I would say there is no project that has been executed in Brooklyn that does not require deep domain experts that are sitting somewhere in the company. There is a ton of interaction that happens, and people are visiting, which was part of why we chose it. New York has three terrific airports that allow for global accessibility, and employees here can easily go out and spend time in factories or with customers to better understand how we can create new and innovative digital offerings.
High: How do you create the strategy or the purview of this group versus others? A lot of what they are doing is fundamentally new, but how do they choose the direction, or how do you push them in a certain direction regarding the area of exploration?
Campisi: This was designed to be a vehicle for our business units to get access to this type of talent. Fundamentally, we are in an early state now where we have hired about 60 people since introducing this in May [of 2017]. We aspire to grow this to about 250 people, but they will all be committed to one of those business units and ultimately be a member of the staff of one of those business units.
Their priorities and focus areas are directly attributed to the objectives their business unit is trying to accomplish. That is how the interaction model works and how directions and priorities get set. That being said, we are finding patterns where there is leverage ability and cross-sharing that comes to life, such as smart factories.
There are a lot of opportunities to innovate around how factories get work done. We are translating what we learn in one business unit to others, and that is why we call it an accelerator. It is accelerating our ability to go faster with the type of skills required, and with some of the solutions that can be repurposed for their own needs.
High: To what extent are there different kinds of processes or methods that one has access to in a place like the accelerator? As you mentioned before, perhaps these are the testing grounds to then use those more broadly across the organization.
Campisi: I would first pay respect to the fact that United Technologies has an operating system of its own called ACE, which is synonymous with Lean Six Sigma. The lean principles are relatable to agile software development. We are working hard to take some of the methods we are using to do design thinking and test, learn, and iterate to launch minimally viable products. These are some of the concepts you would expect the software group to be embarking on, but they translate back into the operating system for the company.
As projects that are more digital in nature go through our ACE process, they will have all the attributes of DevOps and agile development. We are trying to make sure that experiments here lead back to the organization, with the goal being a change in how the rest of the company runs. To do that, you must get it burned into how the other operating system for the company runs. That is part of the mission and what is expected of the accelerator
High: You have worked for several iconic organizations, having come to United Technologies from General Electric. There is a perspective that digital natives have an advantage over digital immigrant organizations because they have no legacy systems and can set up modern processes and technologies from the beginning. I am curious as to your perspective on the advantages of long-standing organizations with strong cultures and established customer bases. Are they able to effectively layer in digital innovations and replicate some of the advantages of digital natives? How do you reflect upon this having been in multiple organizations that have gone through significant digital transformations at scale?
Campisi: One of the greatest strengths of United Technologies and companies like us is that what we do matters. At the end of the day, there are few people who do not interact with some piece of United Technologies’ products or services through the course of their day.
We have been very fortunate in the recruiting efforts to staff this place, especially since we have been competing with digital natives for some of the same talent. When we talk to them about the types of challenges we are trying to solve, such as how you leverage data to fix an elevator or how you leverage data to put a new security solution in to better protect people and give them comfort, it often resonates with them.
There are other positive attributes such as a deep install base of two million elevators or 20,000 engines in commercial aviation fleets. That install base is a terrific opportunity to figure out how to harness data and analytics to deliver big results. Some of those results could be an incremental change in fuel efficiency in aviation, which would be $2 billion a year for the industry. By having that install base, if we can use data and analytics to create a small incremental improvement, the numbers are phenomenal.
We have strong relationships with our customers in deep domains. I can go through a long list of the positive attributes, but we need to hustle. We need to move quickly with velocity and urgency on how we harness some of these modern technologies at scale to change how the heartbeat of the company runs. That is where I believe digital natives have a significant advantage in the sense that they are already networked. As people join, or as people are operating there and are contributing to the company, they can contribute at a faster pace because they are so networked and have so much connectivity. They are already organized to leverage data.
It will be interesting to see if large, multinational industrials can innovate at a similar speed. I love the hand we have here, that is why I am here. I love our mission, and I think you will find the same with a lot of people across United Technologies. That is what brings them to work every day.
High: You mentioned the traditional defense and now the new offense that IT is playing. You talked about the special teams as cybersecurity. Understandably, you focused on the great opportunity that is the Internet of Things and the opportunity to gather data across the different channels to inform decision making. It also expands the digital footprint dramatically with each of these new endpoints that represent the means of harnessing the data via IoT.
How do you push fast and furiously towards the innovation represented by something like IoT while also calculating the risk associated with doing so from a security perspective?
Campisi: We are putting a significant amount of attention on cybersecurity in several dimensions. One as it relates to protecting innovation. You want to be in a position where you can effectively manage all the energy you have invested. As products become more connected in the world, it is critical to customer operations that those work in a way that is thoughtful and safe. There is the offense-defense discussion regarding how we think about IT classically, and you now have to think about it from a security perspective as well.
The second is that we have businesses that are in different industries, and so they have different risk profiles. We are also very conscious of being thoughtful to manage risk appropriately with profiles in the industry so that you do not put one business at a disadvantage for being associated with an aerospace company. If we are effective at it and we do it well, it can put them in an advantageous position compared to their competitors because we can raise the watermark of security at an attractive price point and a level of efficiency.
That is why I equated it to special teams, because if you are not doing it well, people can absolutely score on you. However, if you are doing it well, it can help you put points on the board in the form of creating trust with the customers and helping serve their interests.