Scott Koegler - June 13, 2019

Stephen Arndt on Successful Digital Transformation

Stephen Arndt
Silver Linings Technology

Stephen Arndt, CEO, and CIO of Silver Linings Technology talks to Emerge about trends and recommendations for companies involved in digital transformation. Stephen has focused on the healthcare industry for more than 15 years, helping companies implement technology changes.
Tell me about your experience with digital transformation

It seems like there's a lot of different definitions, but to some extent, I would view most of my career involved in digital transformation. So in my mind, it's trying to position technology and get organizations to transform what they're doing and fully utilize all of the technology, not necessarily a single technology. Sometimes that means changing what they're doing.

The whole movement towards mobile apps and certainly IoT are are different paths. But on a more fundamental perspective, some of it comes down to leveraging existing technology and transforming themselves.

I feel like most of my career I’ve done that because I've been more of a process and business person than a pure technologist.
Some would say that the term ‘digital transformation’ has been overused and at this point is just standard business practice. What’s your take on that?

I would say it is, but then it’s about how we are using technology to optimize. You can say transform, but anything within the context of changes to produce better business results. That means more revenue or less expense, better compliance. Those are probably the three major categories. Interestingly enough, the technology is only half the battle.

I think where good IT leaders differentiate from the bad ones is in the cultural component because so many technology failures may not be about the technology, but the implementation.
What do you see as the most critical factors a CIO needs to come to grips with when considering digital transformation?

It depends on how much you know or don't know. Right? So part of it is how honest are they with themselves, and sometimes it's better to walk away from some of those projects because the leadership may not know really what the heck they're doing or where they're going. I've always tried to position this as a focus on what the end objective is.

Everyone needs to agree on what success looks like, and so many projects don't have that. Which is strange, right?
Not every transformation is successful. How would you counsel IT leaders to track progress and what are the signs that things aren’t working?

So that's kind of different for two different scenarios. And the more common situation is we're doing something that somebody's done before, So if you've got a clear goal of the outcome, then in most regards, measuring your path to get there is is a project management exercise. Most of that ends up with good communication, but still, things can go off track. But if they're well communicated, and everybody understands what’s gone wrong, you should be able to get back on track.

Where it gets a little bit difficult is when you're doing something that nobody's done before. But if you know this is new territory, it's probably going to be a lot harder to predict about budgets, and upcoming issues because of some of its exploratory. So I think as an organization, you have to certainly plan for a worst case scenario as much as possible and understand that, but also have a tolerance to ask if the progress is in alignment with what we're doing.

I think some companies may not have a choice but to transform themselves somehow. If the current business isn't working well, then they may decide to do something different to become something else. They may agree that they don't know what that is. But agree to try an experiment. That's where project management is so important for tracking incremental results. We're testing the market with this new product.
So that needs to involve a lot of the stakeholders and keep a lot of eyes on it.
If they notice catastrophic issues with the plan, how do you advise they react? Should they reboot or shut down?

So, that’s an interesting question. And you know, I think it depends on the situation. So did it go off the rails even though everybody did the right thing and it's just the wrong direction? Again, we're experimenting. We're trying something new, then maybe your course of action is "what's an alternative?" What's the plan D or something that we didn't choose to do? Because we thought this was a better one. So maybe we do shut that down and go a different route. Or did it go off the rails because you got the wrong team, the wrong people, or the wrong culture? And then really, the question is, what do we do to fix that and then can rebound?
Have you run up against that kind of a scenario that you've had to deal with?

That, that's probably more common than anything else. Again, technologies can fail, or there can be poorly designed technologies and can be the cause of things. But for most of my career, it's been the culture or the individuals that that tend to be the issue.
So have you found any ways to maneuver around that?

That you know the wrong person in the wrong place? You know, maybe that person is at the top of the pyramid. But is it just a lost cause in terms of the project or the effort? How salvageable depends upon what that role is in the organization. If it's the CEO, and they're getting in the way of things, and it permeates the culture no matter what you do, there's going to be some failures, and I've been in a couple of companies like that.

It’s about the culture, one in which you can communicate, and I find the best communication is not about individuals, but about the goals and the directions and what issues they are running into. Usually, that kind of language in that kind of positioning can align people to the right path.
On a more personal level, what has been the most challenging digital transformation effort you’ve undertaken?

We were looking to transform a warehouse, into a scanning environment so that basically everything has barcodes. But in that particular environment, it was a cold storage warehouse. And the unanticipated issues was about the equipment operating in that extreme temperature. And to me, that was fascinating because it's just not top of mind, and you know about the issue, but you don't know it until you get in there and have to troubleshoot and figure it out. Ultimately, we did solve it with new equipment that worked. That journey was fascinating.

There are also non-technological challenges. I encountered this quite a bit with health care and trying to get everything into the correct electronic healthcare records (EHR) system and getting people on board. That's typically fairly painful because, in many healthcare organizations, there's lots of ego. There are lots of different perceptions about how things work and what the priorities are. And people almost always cling to what they know. So, that seems to be a new challenge that's ongoing. That's a classic non-technology piece.
Where do you find the starting points? Is it usually in upper management, in the C-suite, or does it come from the very top? How do these projects generally get initiated?

I think the answer is all of the above. I have to say that there are some outstanding IT leaders, but I also think that some tend to think they are just running a department.

I think typically the executive leadership talks about digital transformation more and then pushes that back down. I'd love to see it the other way because I think it ought to be driven from the one organization within a company is that's dedicated to change, which is IT.

But I think it takes a special leader and it doesn't have to be any one of those that can bring that to it. But fundamentally, this kind of change requires having a culture that can listen and ask the questions, “is this viable? Does this make any sense? Maybe we should look at this more so that.” So it’s about the culture, and almost always that's driven somewhere from the CEO or Executive Leadership, which is a shame, right?
What are your plans for pursuing technology? You specialize in digital transformation at the moment but do you see changes in the technology and/or in your career path?

Though I did not see myself in it when I was first starting my career, I wanted to be a journalist. I look at the difference as a left brain, right brain issue. But what, what I landed in, and really what my passion is, is transformation. So I look now at how can we make a difference? How can create better processes, and sometimes the answer is not an IT solution. It's something else. Fortunately, technology's got so many different things that are evolving that usually there are some technical elements as well, which aligns with the titles that I have.
Thanks, Stephen, for your comments and perspectives. I know you talked early on about your wanting to be a journalist. Does that still intrigue you concerning digital transformation and technology in general?

I do think that we could benefit by dragging a lot more science fiction writers into technology, which is an interesting aside because it seems like what was science fiction 50 years ago becomes reality. I think they're a pretty good predictor. I use that to inform a lot of things that I think about what may happen or where we may be able to go with technologies.

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