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CarMax, which started life as a conventional used car store more than 25 years ago, has undergone significant transformation in more recent years. The goal, CIO and CTO Shamim Mohammad said, has been to make the dealership digital so that it can innovate more rapidly.
"[This] was important because our customers were changing fast and were expecting to do a lot more on their terms," Mohammad said during the 2020 MIT Sloan CIO Digital Learning Series. "We have to make sure that we're able to meet where the customers wanted us to meet and give them the [proper] tools and capabilities so they are in the driver's seat."
CIOs today are continuing to go through digital transformation initiatives to gain a competitive edge and ensure they survive the effects of the COVID-19 pandemic. However, to successfully drive business value, CIOs must also ensure they are building a digital-ready culture that aligns with the technology they are implementing -- specifically, one that creates an environment with innovation in mind.
What makes a digital-ready culture?
While there's a big focus on choosing the right technologies to optimize business processes, IT leaders often forget that the organization and its employees are the biggest drivers of business value. For many traditional organizations -- as opposed to digital-born companies like Amazon or Google -- establishing that culture change has become a part of their digital transformation initiatives.
Mohammad said there were three major components to CarMax's digital transformation that helped create a more digital-ready culture: "taking the existing qualities the company had -- the elements of the culture -- and infuse them with more of the digital attributes; moving away from a project-based organization to a more product-centered organization; and building some of the core digital capabilities and technologies that would enable [the company] to scale and innovate faster," he said.
For Cynthia Stoddard, CIO at Adobe, creating more of a digital identity within the company has been one of her most important initiatives. She talked at the digital conference about how a few years back the organization started to stray away from traditional IT organizational principles by challenging its teams to look at applications and think about how they could work more closely with business users to further drive innovation.
"What do we want to be? Our rally cry has been that we want to have cloudlike characteristics in our DNA -- and not necessarily the cloud as a place to run although that is part of it. Really, thinking about the cloud and [how it can transform the business]," she said.
How to encourage digital culture change
Adobe also created what it calls an "IT Identity Award," which, according to Stoddard, has driven a tremendous culture change within the organization.
"People will take small projects [and] experiment, put them on display and show off what they have -- and many of their ideas have turned into some great things we use in our production environment," she said.
In addition, Adobe has created what the company refers to as a "self-healing framework" that looks for patterns or any errors that can be self-corrected when certain jobs or services are running. This frees up employees to think more innovatively, when previously a large portion of their days would have been spent on routine maintenance activities that don't add as much value.
"I give [employees] the time to innovate, think and experiment and let them fail a little bit and come back with those ideas and be able to present and have the ideas recognized. It becomes a major culture change within the organization," Stoddard said.
Silver lining of the pandemic
The culture at Adobe has always been people-focused, Stoddard said, and after going through these unprecedented times, the company has only reinforced that message with its employees.
"When I look at the last eight or nine months, I think that COVID has made our culture stronger," she said. "Things that were behind a wall before have opened. There's a little bit more of the family environment that has been brought into the workplace."
Productivity has also remained strong within the organization, which some might not expect during times of crises. Employees are using it to their advantage to be more creative with the tools Stoddard and other executives have given them, which in turn is helping to further achieve that digital-ready culture.
"[Employees] have realized that they can work differently. What I see in [the] organization is what would've taken six to nine months to get done with an evaluation and multiple PoCs and reviews, we've done in weeks and we've done them quite successfully and brought them live," Stoddard said. "This has sparked a new level of innovation and a new way of working with the different teams within Adobe."
Mohammad said he and his team have been laser focused on ensuring that the culture that makes up CarMax remains strong in a remote environment.
"Because we have this empowered mindset where we give teams goals and we tell them what to do and they figure out how to get it done, I'm finding that they're a lot more effective in the 100% remote environment," he said. "The intensity and the focus that I've seen in the last six months, I've never seen that before. I was definitely surprised with how creative teams are able to be."
He said trusting people to figure out the best ways to get their work done is one important factor in creating a digital-ready culture in the current remote work environment. It frees up people to find their own answers and allows them to develop approaches that a more top-down structure may not have been able to come up with.
"The fact that we don't tell them how to get most of the things done -- they often surprise us with their level of creativity because they can come up with ideas that we as a leadership team [wouldn't come up with]. That's how we're able to maintain the focus on innovation and how we're able to speed [it] up."
Challenges of creating digital-ready culture
One of the most significant challenges of instituting cultural change is getting everyone on board and ensuring they share the same set of values and practices, Mohammed said.
"[We had] to make sure that our [25,000] associates believe that we're serious about the change. Getting our senior leadership team aligned and walking the talk and standing behind this change -- that was the first thing we had to do," Mohammad said. "Culture is very much intentional -- it's the operating system around the company. For us, we were serious about this and it showed up in every part of the organization."
For Stoddard, it's about creating a level of trust with employees across all departments, which can be especially difficult while working in a remote environment.
"People need to develop a sense of trust and you do that by living the walk, walking the talk [and] setting the example," she said.
"When people develop and bring ideas forward, showcase and use them, the worst thing to happen is to say we're going to do all these wonderful things and then they go on the shelf and are never used," she said. "That would be demoralizing. You have to work and build a sense of trust with your organization. Share and talk and have an open door and the culture comes around."
But it begs the question: Why should employees listen to CIOs about digital culture?
As organizations rely more heavily on the IT department's ability to support business functions, CIOs have found themselves in a more strategic role that draws on their leadership skills. Stoddard said CIOs are in a unique position because they have a horizontal view across the organization and can see what's working and what's not.
"We can see the processes, how people behave, what the roadblocks are, and we can help break [them]," she said. "What I've found in those situations is you go work with the leaders one on one [and] bring them on board. It takes a lot of relationship building and a lot of discussion, but we can do it," she said.
Mohammad echoed the statement that it's not just up to CIOs to change the culture -- it's everybody's job.
"This cultural change has to be a joint effort by the CIO, [their] colleagues and all the way up to the board of directors," he said. "[You have to measure] the change along the way -- make sure that it's resonating with your team and [that] they're trusting the change you're taking them through."