Executive Interview Series | Jim Zallie, President & CEO - Ingredion

Ally, first of all, thank you very much for the invitation to speak to you today. We're very pleased with the relationship we have with your company and the potential that it affords us. A little bit about myself: I'm celebrating this year 40 years in the food ingredient industry. Over the course of that lengthy period, I've seen a lot of change, and digital transformation in our industry is one of the things that has obviously accelerated a lot of change, certainly within the last 10 to 20 years, and it's only accelerating right now. I have been with this company in one way, shape, or form for my entire career, so it's a rarity today to have been with a company with the kind of tenure that I have. But it says something about who Ingredion is and the opportunities that it affords people and the things that can inspire people to do good in the world and also do good in the industry for which we service. That's just a little bit about me. It's 40 years, but I still feel incredibly energized every day I come to work.

I came from a family that worked in the food industry, but it was more in the grocery industry, and that led me to obtain a degree in food science and technology, and then I got an advanced degree in that. So food and food ingredients have been in my DNA. I was just very fortunate to have gotten a job with National Starch, which was acquired by Corn Products in 2010 and led to the rebranding to becoming Ingredion in 2012, way back in 1983. So that's a little bit about my history and kind of love affair with food and food ingredients.

I think that Ingredion has been embracing digital transformation in a significant way as an organization. We set it up as a big goal when I became CEO in 2018 to establish a goal to stand up what we described as more than 200 use cases that could create greater than a hundred million dollars of value, and we have overlaid that with actual finance support to give it internal credibility and to track how we look at returns on investment for digital investments, just knowing the inherent potential that it was going to afford us to drive a customer-centric growth culture. So we're very focused on customers being easy to do business with and embedding and driving a people-centric growth culture, and we see digital engagement as more and more important to that imperative for us. When it comes to making things easier for customers to access our information about our products, our formulations, our recommendations, our capabilities, and the solutions we offer, one of the things we also like to promote is the fact that we co-create with customers in our idea labs. Doing that more in a virtual medium, being able to connect multiple stakeholders from multiple locations at the same time, has really reinvented the way that we provide technical service and support and partnership and co-creation with customers. So we've embraced the digital aspects of customer engagement and customer reach very holistically. We've outfitted our labs and culinary kitchens to make them culinary studios. The whole aspect of putting the customer at the center of everything we do... An interesting fact that's maybe unique with our company is that in every meeting room at Ingredion globally, there is a red chair. The red chair is meant to represent a customer. It's there to allow us to catch ourselves if ever we're in a conversation to stop and ask ourselves, 'What would a customer say or think if they heard this discussion right now?' I think that is a little bit about the culture that exists. Thinking about the potential of how digital capabilities can help us with enhancing our customer-facing opportunities, we view the experience that we want to provide recognizing that we don't live in a 9-to-5 world anymore but a 24/7 world. Customers want to be able to do their work and connect with companies like Ingredion that could help them do their jobs wherever they are, whenever they would like. So it's less now about customer service, and we refer to it as customer indulgence. Being able to be well represented in our marketplaces, have our offerings there, and provide the self-service aspects are really top of mind for us. We don't come at these things from a cost-effective standpoint primarily; we come at it from the experience we want to offer and allow the customer to indulge in all that we offer to them.

I think that again, we have been talking about digital transformation and making sure that it's well understood and well defined what it means and how it differs from simple digitization, for example, for a number of years now. I talk about the importance of bringing value from digital use cases at every one of my CEO webcasts. In fact, Ingredion has an award that we give out every year. It's a CEO award as part of our annual CEO Awards, and we give an award out for digital transformation, the progress or the use case that's been best operationalized and has created the most value or is having the biggest impact in the company. Typically, there's a customer requirement that needs to be met from a standpoint of impact for that digital investment that we may have made that could help us to differentiate ourselves and engage with customers differently. So we're all in, I guess you could say, in relationship to this discipline and what it means. Of course, right now we're embracing artificial intelligence and what it can mean as the next chapter from a standpoint of generative AI and how that can enable us to engage with customers much more efficiently, such that when we do want to have, and the customer wants to have, the human interaction overlay to all of the foundational work that they can do on their own to understand our offerings and the potential to work with Ingredion, we view it as an accelerator or an enhancement. I heard a great expression very recently in relationship to the either threat or opportunity of artificial intelligence, depending on how you want to view it. We've done a survey recently here in our company to ask employees directly, 'Do you view it as more of an opportunity for you, or do you view it as more of a threat?' I would say that the majority of our employees, based on the way we're positioning it, are viewing it more as an opportunity, but there are those that are surely concerned about what it means potentially to their role and their jobs going forward. The expression that I've used with them, which is a wonderful expression, is: people are discussing the impact of artificial intelligence in the medical field, for example, in the future, and questions have been posed as to whether or not artificial intelligence will replace doctors. What I've said, which I really subscribe to, is the question isn't whether artificial intelligence will replace doctors, but will those doctors that don't embrace AI be replaced by doctors that do? So if our employees are embracing the potential for digital capabilities and artificial intelligence to enhance their own effectiveness to do their jobs and to be impactful, and we have a value, one of our values is being preferred, and that has a triple meaning: one is that we enable consumer preference innovation for our customers who are food companies; one is that we want them to be preferred as having Ingredion be preferred as a supplier; but also individually, if you're a salesperson, you should want to be the preferred salesperson that's calling on that account. We think individuals that are leveraging technology and digital capabilities to be more impactful and time-efficient will help them be preferred and give us a competitive advantage as well. So that's how we're thinking about it and infusing that throughout our organization. We do use social media to engage with customers, for example, in group conversations and project work. Believe it or not, we are experimenting with the metaverse to build custom events for customers where we can drive innovations regardless of where anyone may be based, and again connecting our idea labs with customers around the world because the food industry, as you know, is a very local business built on local tastes. Customizing formulations and getting foods to taste great based on how we influence texture, and doing that on a local level but leveraging our global capabilities and bringing that all to a venue, is something that digital can help us with and is helping us with a lot right now.

I think that what's most important in times of uncertainty or challenge and economic headwinds is that companies always stay committed and focused to what their strategy is and how they are aspiring to develop competitive advantage, and being very clear about what their winning aspiration is. For us, we have refreshed our strategy. We've leveraged a strategic framework called 'Play to Win' which has enabled us to clearly define what our winning aspiration is. With that clarity, you need to stay committed to the long-term intent of creating shareholder value and differentiating yourselves in the marketplace and pursuing competitive advantage. Digital today has to be part of that equation. That all being said, you have to be very thoughtful and very mindful of the investments, both in capital as well as ongoing structural operating cost that you will add to your organization. That's why it's extremely important that you set up a financial framework and hold sponsors and individuals in your organization for these technologies and investments to track and report with post-project reviews in a requisite amount of time how the returns are being manifested, and asking some tough questions to make sure that people are leveraging the inherent potential of these systems and ideas. The one thing we have found where you can fall down is you don't resource sufficiently the investment in the system from a data governance standpoint. People want to get to the very attractive output and see how an example ideally could work, but before you can get there, you have to have data integrity, and you have to have that being made to be good data and overseen from a data governance standpoint so that the information you're generating is current and meaningful. Oftentimes, what we have found, and in some cases we have neglected to upfront define the data governance requirements to support a new software investment, and then we don't maximize the potential. So you have to be very realistic and very choiceful, but you have to do the blocking and tackling if you're going to ultimately get the significant potential disruptive change that you're looking for. Oftentimes, companies miss that, and it's something that I know we're very mindful of, and we ask those extremely tough questions in peer reviews when we approve our IT capital budgets. That would be just one piece of advice that I would provide for our audience.

I'm hoping that whatever I say is not new news to them because again, I do address the topic of digital transformation in each and every one of my quarterly employee global webcasts. We talk about a lot of things: we talk about the importance of cybersecurity and the education that we've brought there, and now we're spending a lot of time talking about artificial intelligence and the potential, and not to fear it but to embrace it, the training that we're going to be providing to employees to have them be more effective in their jobs and to be current so that they don't have their skills erode and become obsolete. We have a responsibility to our employees to invest in them, to train them, and make some of the training easy. We are very committed to having technology enable our employees to work more efficiently and help manage their stress level, but also give them a lot of excitement and enthusiasm for how digital technology and digital transformation can transform the work they do in support of the customer and in support of us delivering competitive advantage. It makes their jobs fun. I know my Chief Digital Transformation Officer and Chief Information Officer and I are very aligned on that mission. Our employees can expect Ingredion to continue to invest, but in a very responsible and accountable way to deliver shareholder value, because that's what we're all responsible for doing, but we want to do it through and with our employees and do it in a fun and purpose-driven way.

Thank you, Ally. Take care.