Back
Shobie Ramakrishnan
Chief Digital and Technology Officer, GSK

Building Resilience Through Technology with Tech Execs from GSK and Gates Corp | Technovation 854

🎥 Mar 14, 2024 📺 Metis Strategy ⏱ 27m 👁 242 views
The pandemic has caused executives from across industries to think through how to best prepare their organizations for times of uncertainty and develop a digital strategy that fosters resilience. In a panel discussion moderated by Metis Strategy Partner and West Coast Lead Chris Davis, Shobie Ramakrishnan, CDTO of GSK, and Diego Silva, CIO of Gates Corporation, discuss building resilience through technology amid disruption. Shobie, hailing from a long-standing science and pharmaceutical company, emphasizes the importance of innovation and the dual approach of playing offense and defense in dig...
Watch on YouTube
Transcript (17 segments)
D
Diego Silva0:00
I mean no matter how good you are and how protected you are there are zero day vulnerabilities. There's always going to be some door that somebody can utilize to get into your company, so your ability to restore as fast as you can is critical.
P
Peter Hi0:14
Welcome to Technovation, I'm your host Peter Hi. Our broadcast today comes from our most recent Metastrategy Digital Symposium and the topic was building resilience through technology. The panelists who spoke on it were Diego Silva, the Chief Information Officer of Gates Corporation, and Shobie Ramakrishnan, the Chief Digital and Technology Officer of GSK. The gentleman who led the conversation was Metastrategy partner and West Coast lead Chris Davis. I hope you enjoy the conversation.
C
Chris Davis0:43
So I'm joined on the stage by Shobie Ramakrishnan, the Chief Digital and Technology Officer of GSK, and Diego Silva, the Chief Information Officer of Gates Corporation. Shobie and Diego, welcome.
S
Shobie Ramakrishnan1:00
Thanks Chris, thanks for having us.
C
Chris Davis1:02
Absolutely. So just by way of introduction, everyone probably knows these two organizations but there's a really interesting common thread. With GSK being a 30 billion British pound company that makes vaccines for things like malaria, specialty medicines, general medicines for cancer, asthma, antibiotics, and Gates Corporation, also a global manufacturer but focusing on power transmission and fluid power hosing. The common thread that stitches these two panelists together is they lead extremely complex global manufacturing organizations that operate in over 100 countries. The legacy of each of the companies—GSK, depending on how far you go back through the mergers and acquisitions, 200 years old, Gates over 100 years old—both organizations make massive investments in R&D and are constantly pushing the boundaries of science, whether it's medical nature or material science. And so when you think about the nature of these two organizations, innovation is at the core. They are creating something fundamentally new that doesn't exist, and at the same time are required to manage the cyclicality of the uncertain world that we live in. And I know it might seem cliché to highlight that there's always something more disruptive, the times now are more disruptive than they've ever been before, yet it still feels true. So our panel discussion today is how we build organizational resilience in times of disruption. And Shobie, I want to bring it to you first. In our prep call you echoed actually what Jen from Dell and Peter talked about in an earlier session of playing offense and defense, and not just looking at disruption and uncertainty as something to always be on our heels, but sometimes we also need to be on our toes. So I'd love for you to maybe expand on how you think about your framework, Shobie, for addressing building organizational resilience at GSK.
S
Shobie Ramakrishnan3:07
Thanks. First, thanks for having me, Chris, and Peter. It's really good to be here and some amazing panelists and super interesting discussions as well. I think as you said, GSK is a 300-year-old company. We've always had to innovate in science, in life sciences. It's either innovate or die, or worse, you become mediocre if you don't innovate. So scientific innovation is an underpinning of everything we do. And for that, you know, some of the conversations—I've been with the company for about five years—and some of the conversations that we've had as we transform our pipeline and bring new medicines and transformational medicines and vaccines, and our ambition is to reach 2.5 billion people on the planet and positively impact their health, you can't just sort of do that by playing not to lose. You've got to play to win. And so we use the language around playing not to lose versus playing to win, which means taking smart risks and all of that quite a bit in our culture and in our company. And as part of that, this concept of playing offense versus defense sort of came from that. And we have sort of put technology at the core of our company strategy by saying our purpose as a company—why we exist as a company—is to unite science, technology, and talent to get ahead of disease together. And for that, we know that we need to really be playing to win in certain elements, and that's what we call the concept of playing offense with technology and digital and data and all of that. And then the part about playing defense comes from ensuring that we are doing AI responsibly, thinking about the cybersecurity implications of some of this, the risk to working in a highly regulated industry where patient safety is critical. Like I like to say, you don't want to move fast and break things in this industry. You want to move fast but not break things, because the consequences are very, very real in our industry. So just the importance of playing defense in service of the offense becomes very important. And we think about organizational resilience, the capability building that Neo and Barry talked about earlier, all in the context of what do we need to play offense and what do we need to play defense. And for me, that phrase came up when I was going to the audit committee and the board and updating them on cybersecurity and really making sure that we are having as robust a plan as we can. And then the chairman called me and said, 'I know Shobie, that you're really under a lot of pressure to ensure that we are playing defense, but please don't forget to play offense in service of the science and the innovation and patients.' And that's sort of the genesis of the word for me, and I shared it with you in our conversation. But that's the framework we use to talk about what we do.
C
Chris Davis6:03
I love that. And I also love how you highlighted that the support is clearly coming from the highest levels of the company—the chairman of the board—connecting science and technology through the mission statement of the organization. That creates that fertile ground to do the balance, so that it's not always just one outweighing the other. And Diego, at Gates, in our prep conversations you shared a lot about how you've changed the culture since joining. Like traditionally, especially manufacturing organizations where in your business model you sell a lot through original equipment manufacturers and distributors for replacement parts globally, and so you may not always have the full pulse of everyone who's buying everything at the retail outlet or at the end of the value chain. So that cyclicality can sort of whip companies back and forth, back and forth, invest and not invest. But you've taken a bit of a counterintuitive approach and created a culture that allows the company to invest in down cycles. And I wonder, Diego, if you can talk about how you're building organizational resilience through that method.
D
Diego Silva7:08
Sure, thanks Chris. So as you said before, Gates has been here for more than a hundred years, started here in Colorado in Denver. And now we are in more than 30 countries, more than 15,000 people across the world. It's not easy for a company to continue to be at the tip of the arrow, leading edge and market leader for such a long period of time. In 1917, Gates started by patenting a belt that went into every car at the time for decades and into the industry. Right now we're producing Carbon Drive belts, which are carbon fiber belts that drive e-mobility. They go into high-power, high-torque electric bikes, and you will see our products pretty much everywhere in the market. So just to stay ahead of that is not easy. And one of the things that I observe is how technology has changed, particularly in the last 10 to 20 years. So when we think about manufacturing, one of the things I learned early in my career was that it's never a good time to invest in it. So when you are in a down cycle, everybody wants to pull back on capex investments, let's slow down, let's wait for the storm to go away and then we ramp up again. But then you find that in the good cycles also people don't want to invest in it because you're running your operations 24/7, you're running them on the weekends, and the message is please don't touch the machine right now because we are printing money. So in fact people will come to you and try to negotiate those maintenance windows on the weekend and say, 'Can we keep running? You're not allowed to reboot the server.' So there's never a good time. And in the last few years this became a much more critical situation because of three reasons. One is technology now is moving faster than it has ever been. So now you blink and you get behind, it's very difficult to catch up. So you cannot afford those pauses. The second one is that slowing down and ramping up again—there is an incredible hidden cost for the organization that sometimes we don't calculate, we don't estimate. If we think right now about trying to get new talent into the organization, trying to develop people, trying to get them to learn about how we operate, our processes and our technology—I mean, slowing down and ramping up has a massive cost for the organization that we need to be very mindful about. And the third one, which is a little bit counterintuitive, it's much more beneficial to invest in the down term than in the up cycle. And the reason for that is because in the down cycle you're going to have a lot of people in the organization that have capacity to be able to drive change and drive projects. Projects that you're going to find people at other times in the cycle, you're going to find in the down cycle that you can apply those skills. They can come to the table and help you drive change. They're also going to be more willing to drive change because they can put their skills into practice and help you move the company forward. So they will accept change easily, but it also gives you the opportunity to prepare for the up cycle. What you don't want to do is get into the up cycle and you're again running all your machines and your factories at 120%. So this is the opportunity to drive productivity, get ready for the next cycle. So investing in the down is critically important. What I try to do is actually balance this through all the cycles to make sure that at the end of the day we have a continuous effort, a continuous improvement effort, and at the end we're able to capitalize when the wave comes back. We are ahead of everybody else and we have a great opportunity.
C
Chris Davis11:22
Yeah, I love that. And I can sort of visualize the portfolio management that you're doing with that answer, Diego, of how you balance the investments proportionally whether it's continuous improvement, running, scaling, or growing, no matter what the time of the business cycle might be. And Shobie, you already mentioned the engagement with the board, and you yourself are also a director at Deliveroo. And I wonder if you have any advice when chief information, digital, technology executives are engaging with their boards on topics that are so new and uncertain. At the essence, the job of a board is to govern and to make sure that the operators are minding the risk of the company. But when there's something—whether it's AI or supply chain risk or COVID or anything else—there's always going to be this underpinning uncertainty. And so you don't want to overpromise, but you also want to look like you're doing well. And you've had this unique ability to sit on both sides of those conversations. And I'm curious, how do executives engage with their boards, especially when there's so much uncertainty on any given topic?
S
Shobie Ramakrishnan12:28
Yeah, I think this is super important, super important. I did want to say one thing as I heard Diego talk about the downturn bit, and this is so poignant. I think this is really, as he said, counterintuitive. But I had an airline CIO who I really admire tell me she never had a moment to fix her systems when a plane's not in the air ever. But during COVID, when the planes were all grounded, she said, 'I could not think of a better time to go invest in technology.' And then when they came back—and I can assure you I'm a frequent traveler on this airline—they were a much stronger digital enterprise than when they went into COVID, and that sort of set people apart in a dramatic way. So I think, Diego, it really, really resonated with me what you said. So your question about the board and how to engage the board—I think the luckiest situation is if the board gets it right. In our case, as I said, the chairman gets it, they're passionate about it, they understand it, the audit committee understands their responsibility but understand that there's also a responsibility as part of the main board. The one thing we can say is after COVID, which forced a level of digital adoption, and then the AI pivots that have happened, this is a boardroom conversation almost in most companies now. So we don't have to do the level of pushing that we had to do. So in some way, both COVID and GenAI have been more effective chief digital officers than some of us have been able to do ourselves. That said, I think we have an enormous responsibility to frame these things, and I use that lens of offense and defense. But actually, if you think about it, one of the responsibilities that I have as a board member in my case is to make sure that we are playing to win. By not adopting technology at a time when it's such a differentiator—whether it's productivity or new services or creativity or better customer service or whatever it is—that is such a big amplifier and accelerator. Not adopting it at pace is actually a risk from an overall perspective if you really understand your role as a member of the board. So I think helping frame the conversation in terms that help them do their roles well and effectively is a really important skill to continue to practice. You don't have to be perfect at all. You just have to understand that it's your responsibility to have those conversations, and it's equally important for us to have those conversations in a way in which we are able to be honest about where we are and where we need to go, and where we are ahead and where we are behind, and keep it real as much as possible. Because one of the—many times some of these board members outlive CIOs, so they see through like three CIOs and how is your story different than your predecessor's story or your successor's story? So keeping it as real as possible to the current context of what is important right now has been another source of really valuable engagement and getting more board engagement as well and excitement. Because in our case, for example, many of our non-executive directors are UK-based, but many of them are scientists. So how do you have this conversation in the realm of science and patient care and things like that that they deeply care about and understand? I think bringing a level of empathy that you would bring to any stakeholder at your executive table—bringing that is important. So that's sort of how I think about it. And I also, when I sit at the table as a non-executive director, really try to have both conversations. When I'm in the audit committee I try to have the conversation around governance, but when I'm in the main board I try to have the more balanced conversation about strategy, people, talent—all those things.
C
Chris Davis16:30
Perfect. And I love that both you and Diego highlighted that there's a risk in not doing anything, and that again is sometimes counterintuitive for certain organizations, especially manufacturing where the mindset might have been you create a big capital asset, you invest in that, you depreciate it over time and you print money off of the back end. And now it's—you can't do that with your organizational capabilities in the same way. And so we always need to be investing even in times of good and bad. I'd love to pull up the results of the poll. We asked about supply chain as one big area of resilience, and identified—no surprise here—that data and analytics is a key area of addressing supply chain resilience specifically, so that we can start to get greater visibility into our organizations. But whether it's supply chain or cyber, Diego, I want to go to you and then Shobie, have you add on as well. When you think about this balance of offense-defense, investing in supply chain for organizational resilience so that you can adapt to whatever uncertainty—whether it's shipping pathways being disrupted or heaven forbid something akin to COVID or cyber events that may come upon us at any given time, as the cyber capabilities get more sophisticated that threat is only growing. So Diego, I'm curious, as you think about maybe a bit on defense, where are your areas of emphasis? Whether it's supply chain, whether it's cyber, whether it's simplifying your portfolio, where are some of the areas that you're focusing to make sure that Gates can be responsive to whatever comes your way?
D
Diego Silva18:09
Yeah, so unfortunately it's all of the above. As we said before, we need to play in all these scenarios—offensive, defensive, and all across. On the supply chain, something that's critically important for us is demand forecasting. We have a very big and complex portfolio, and our ability to anticipate what our customer is going to need and when they're going to need that particular item—that belt, that hose for that particular model—it's critically important for us. We want to make sure that we don't build up the wrong inventory, we want to make sure we reduce our working capital, generate free cash flow. And for that, data analytics as it came in the survey is critically important. It's important for us to sense from the market, get indicators from our customers, incorporate all this into a model that then we can forecast our demand, and then we can execute on the production planning and execution. So this is an area that we have continuous focus on. We continue to invest not just in the technology but also on the people side to make sure that we are as efficient as we can be. We saw it during COVID, we saw how disruptive this process can become if we're not efficient or we cannot be as precise as we can be. So definitely for us lots of investments in this area. Also thinking about manufacturing flexibility—the ability to produce in the right country, in the right region for the region, be able to deal with geopolitical situations. Even on the product development side, for example in COVID when there were material shortages, can we produce the same product with a different combination of materials? So investment in technology to be resilient for those events is critical. And let me quickly touch base on the cyber piece. And cyber, I think there are two big-picture aspects to keep in mind. One is the defense piece—how do you prepare the company, how do you defend against attacks, make sure you have the right tools. I mean, using AI, using machine learning to identify patterns in your logs, for example, to be able to detect and prevent the incident. But the second piece of that is the recovery. I mean, no matter how good you are and how protected you are, there are zero-day vulnerabilities. There's always going to be some door that somebody can utilize to get into your company. So your ability to restore as fast as you can is critical. And every company has backups, but how good are your backups? Are you still using backup tapes or are you using state-of-the-art, ransomware-resistant backups, maybe in the cloud that you can restore in a very short period of time? So this is where technology investment is important, because yes we all have backups, but can you restore in a reasonable amount of time? Is it going to take you a few days, a week, or a month? And this is why unfortunately you don't use that until you need it. So you need to think in advance and make sure you're ready. Goes back to the readiness message that I've been trying to point out here. And that's the defense piece—getting ready for the unpredictable. You don't know what's going to happen next. You need to create that resiliency in the organization, that flexibility, that agility also on the organization when we think about people and the ability to respond, so you can take whatever comes in the future.
C
Chris Davis22:06
Yeah, I love that. And Shobie, curious—what's keeping you up at night when you think about organizational resilience and especially defense?
S
Shobie Ramakrishnan22:12
I think on the—cybersecurity, it would be ridiculous for any company not to be prioritizing that. And you know, as I look at any enterprise risk assessment that comes up, whether you're on a board or you're looking at it as a company, it goes to the right and increasing. That's just the nature of it. I think the principle that we try to follow is really thinking about what does cyber defense mean for us. What are the threat vectors that we are most worried about? We have probably some common threat vectors like everybody else—the human vector, the ransomware, et cetera—which everybody in the world is going to be impacted by. And then there are probably things that are unique to, for example, Diego's industry and mine. For us, operating technology resilience is super important, versus probably not so much for a software technology company or somebody who doesn't have that. So I think just being really thoughtful about what are the threat vectors that you care about, and holding yourself accountable to improve not just the maturity—but one of the easy distractions is 'oh I'm here on NIST and I'm going here on NIST'—but really the controls effectiveness. So you've deployed all these controls, how effective are they truly? And then having the courage to constantly red team yourself and test. Not just talk about it, but really test to see where your strengths are. I really do want to be careful about getting too confident on this. This is really hard stuff, and none of us can be absolutely sure that we've done everything right. But being very thoughtful and intentional about the cool stuff but also the traditional things like good BCPs and good backups, like the things that Diego just talked about, is really important. And we are again back to our principles about keeping it real. We spend a lot of time thinking about it, we invest responsibly, hold ourselves accountable with external measurements, and then really make sure also that we're building the capabilities up internally and in our partners to be ready for what's coming, not just what's here already. And one of the wonderful things about cybersecurity is you're not alone. There's so many places to go for collective defense and learning from each other. And I like to tell my team when the Uber incident happened or the Microsoft incident happened, just use them to test our defenses—it's the same attack patterns that we have to defend against. So really the ability to learn from the collective consciousness is super important, because that's the only way we can take on the adversaries. In terms of other defense mechanisms, I think everyone does this as well, but thinking about AI very responsibly. We've done AI for a while, especially using AI in drug discovery including generative AI, large—we have custom large language models, et cetera—because we've invested in scientific innovation for quite a bit. But all along we've had AI policy. We established an AI policy and ethics organization five years ago, and we really, once we decided that we are scaling AI across the company, we have put an AI policy in place, we've set up an AI governance council. And probably the interesting thing that I've come to realize as I set up the AI governance council for us is to recognize how important it is to not have AI become its own thing in the company. Whether it's defense or offense or whatever, it needs to feed into existing risk mechanisms, risk tracking mechanisms, go to existing risk boards. So thereby you ensure that all your risk management frameworks are thinking about this additional risk. If you think about patient safety, what is the additional patient safety risk from adoption of AI? If you're already thinking about procurement risk, what's the additional risk? So I think leveraging the existing defense of the company and recruiting it to protect yourself against this new technology we're adopting has been a very interesting learning, and it would not have been intuitive, because everybody wants to set up a separate council and publish papers and all of that. Like we are really activating the defenses of the company, but where we need we also put expertise in. So those would be the two things I'll share. I think supply chain—Diego talked about quite a bit of it.
C
Chris Davis26:28
Awesome. Well, Diego and Shobie, I think we just wrote everyone else's next board deck. It vividly came to life for me of there's a narrative around offense and defense. On offense, we're tying the investments that we're making into the things that differentiate the company. For your two organizations, a lot of that is R&D, it's commercial motions, it's uncovering the new. And then it's making sure that we're building a culture—literally our portfolio of investments—so that we balance those things. We're building the capabilities. And really what came out is you're both creating a culture within your teams where it's okay to be humble and to be more of a learn-it-all, and to say, 'Look, this is unknown. That's okay. You don't have to fake it, you don't have to pump your chest and make yourself seem more capable than you are.' Because if you can get real, you actually win more credibility as you solve those problems versus writing a check that you can't cash. So Shobie and Diego, thank you so much, this has been a fantastic conversation. I hope everyone else took away as much of it as I did.
S
Shobie Ramakrishnan27:38
Thank you.
D
Diego Silva27:38
Thanks, Chris.