A very warm welcome to this CEO Digital Agenda webinar where we're going to be talking about the ways to win in the digital first world. My name is Phil Carter. I lead IDC's C-Suite Tech Agenda research and I am thrilled to welcome two very exciting guests. First of all, Parker Harris, the co-founder and CTO of Salesforce, and Nigel Voss, who's the CEO of Publicis Sapient, but also a Wall Street Journal bestselling author. So welcome to the two of you. First of all, to you, Parker, how are you today?
I'm great, Phil. I'm here in my home office in San Francisco, my digital headquarters, and just a pleasure to be with you today.
Thank you. Very good. I love it. Digital headquarters. So West Coast, early morning, is it?
It's early morning. It's 8 a.m. here. So I think we're operating around the globe on this call. So it's great.
Excellent. Yeah, I think Nigel, you're in Paris, the Champs-Élysées, correct?
That's right. It's my first time in Paris since the pandemic. So great to be with both of you. I'm looking forward to our chat.
Excellent. Me too. So is the sun out in Paris by any chance, Nigel? Can you see it?
It's a beautiful day. I actually was on our roof terrace, which overlooks the Arc de Triomphe, and I was stunned again by how beautiful Paris is when the weather is good, and I guess just generally. But having not been here for over two and a bit years, it was great to be back.
I'm sure. I'm sure. I also haven't been for two and a half years, so I look forward to seeing the sun in Paris as well. I'm in Munich today, and the sun is also out in Munich. So I seem to be in for a sunny session today. Really happy to have you guys as part of the discussion and also the audience. Welcome to all of you. This is going to be an interactive session. I'm going to be posing some questions to both Parker and Nigel, but I'm also going to be sharing some latest and greatest IDC research based on our latest CEO survey, which will be the content to drive a lot of the conversation. But we would welcome your questions as we go along. So pop your questions into the chat. We'll take those during the session if we can, but we've definitely got 15 minutes or so towards the end to take all of those questions as well. So lots to get through, a lot to cover, and I'm looking forward to an exciting conversation. Let me kick it off by setting the context here in terms of what we're seeing in the market. So this is a framework that IDC has put together to highlight how CEOs are shifting in terms of the focus, and this kind of fits into the theme around ways to win in the digital-first world. We do think we've accelerated into the digital-first world, but the focus has moved from transformation towards running a digital business. And so you can see here IDC's spending data relating to digital technologies and services over the course of a number of years, past, present, and future, and you can see a few things. First of all, digital continues to accelerate to the extent that over the next four years, we predict that $9 trillion, more than $9 trillion will be spent on digital, but the focus is shifting. So the first chapter of digital transformation was around experimentation and innovation. So we created those speedboats that were shooting off from the tanker in the early stages of this digital journey. It didn't always deliver the value, didn't always deliver the outcomes, and that's why the second chapter was all about delivering the ROI from digital, so closing the value gap, as we called it. But now we're into the next phase, which is all about the digital business era. So I was speaking to a C-suite executive of a large global retailer who highlighted how two years ago, a third of their business was coming from digital channels, but now it's two-thirds, and so that means that it's sizable enough for them to rethink their metrics, their organizational structure, and their roadmap to drive the next phase of the journey. So the new dimensions for the digital business model need to be reframed, and by industry, by domain, it's going to cause a lot of investments in new technologies. Now, Nigel, I know that this was a big focus for your bestselling book, which I've got here, The Digital Business Transformation, and I saw there was a long chapter on the characteristics of a digital business. So I know that this is a topic that's near and dear to your heart. Any thoughts on how you see this playing out with your customers and also within your organization?
You know, I think, Philip, as you started the conversation about the shift from transformation to running a digital business, for me, I think the fundamentals are kind of what I think is really important here, right? So the two axes of first, where to play, so how you think about, you know, the markets that you're serving today and the audiences that you're serving today to the markets and the audiences you want to serve tomorrow and the markets and the audiences you want to create, because so much of running a digital business is creating that new white space. And then the second axis, which is how to win in the context of those, right? So what are the best practices? And I think depending on how you think about the where to play and how to win, you would find parts of your business which you're going to say, look, we're going to defend here. So this is simply about protecting what we've already created. In other areas, we're going to really differentiate relative to our competition. But then most importantly, in some areas, we are fundamentally going to disrupt not just ourselves, but potentially the market or the industry. And when you start to think about the world in the context of that frame of defend, you know, differentiate and disrupt, right, you start to make some choices that I think allow you to start to then operate in a way that so many businesses have not done in the first couple of eras of the transformation wave. So much of that was based on, well, we've got to do something. So we've got to move forward in a particular area. And, you know, what intended were intended to be speedboats as areas of experimentation became essentially anchors that perhaps slowed your growth down. And, you know, as the world became more digital, right, and there's plenty of examples of lots of businesses we can look at that were digital themselves that are constantly needing to disrupt themselves, whether it's the Netflix from mail order to streaming to then creating, you know, their own content. And you see that constant disruption. So for me, a big part of the framing of this next year is going to be important. Like, where are you defending? Where are you differentiating? And where are you really trying to disrupt and being thoughtful about those choices? And then the second part of your question was the characteristics. And for us, it's the speed capabilities. You know, it's the being clear about your strategy and the value pools you're trying to unlock, bringing a product mindset to that conversation so that you're not beginning a digital transformation project and ending it. You're thinking about your business as a product, constantly evolving. And Parker can talk a lot more about that, given Salesforce's incredible success themselves as a company that has evolved products over the years. The experience, how are you creating an incredible experience for your employees and for your customers? The engineering orientation, so not thinking about IT as being about risk and about cost, but really being about something that allows you to create differentiation. And lastly, data and AI. So not thinking about data and AI as a retrospective look back into your business's performance, but something that's constantly iterating on a real-time basis, you know, really delivering on that ability to pivot. So I think if you think about the framing of are you trying to differentiate or disrupt or indeed defend, and then if you think about the speed capabilities, I think you have a recipe for what starts to make for a successful business in this next era that you talked about.
Yeah, I really like that, Nigel. I think that, you know, it's almost like a two by two. I can see it forming in my head. And, you know, coming back to that retailer that I talked about, they might defend on their e-commerce platform, but they might differentiate based on the new customer journey that they start to build across digital and physical touch points. And then they might differentiate by selling NFTs in the metaverse, right? So that kind of highlights how organizations might rethink their digital journey based on those new channels or the combination of the channels that they need to interact with customers on. And also, by the way, the key thing here is that digital transformation doesn't stop as you focus on the digital business. It's, you know, the transformation continues, which is to your point around speed as the primary differentiator for organizations as they move towards the digital business era. But as a CEO, you're less focusing on the transformation, but you're focusing on the outcomes from that digital business and running the digital business along those lines. Parker, any thoughts from your side?
Well, you know, I think that we're in a totally different world now, you know, with this pandemic. But, you know, we've got a lot of issues happening in the world. And yet our customers, you know, as a CEO, your customers aren't cutting you a break. And so, you know, it's about listening to those customers. And I think speed, you know, I'll just reflect on that point specifically. You know, we have to figure out how to go faster and try more things more quickly because the customers are moving at the speed of digital. They're, you know, they're looking for new ways to connect to you. They're expecting that, you know, we're not allor digital or whatever word you want to take, and you're not thinking about the outcomes. You know, like when the pandemic hit, you know, Dell, one of our customers, took their call center all to people's homes. You know, Sonos was able to shift to selling online and actually grew their business direct to consumer. So, you know, it's the outcomes of, you know, customer satisfaction, you know, increased revenue, and, you know, just make sure you don't pivot to technology, pivot to your customer and think about technology as the tool. And it may not always be perfect, you know, and so make sure you have that agility, back to the earlier point. Mistakes are going to happen and how do you go quickly and correct them and have the metrics to know that you're headed in the right direction.
So I'm wondering whether you'd check my notes that I put together before the session, because that's the next focus for technology is the outcomes, Parker. Absolutely bang on. You go use case first, business first, and then the technology follows that. So I couldn't agree with you more. And it's that tech to compete, tech to drive that next phase of differentiation or disruption to your earlier matrix, Nigel, that you described. But what's really interesting linked to that is it's no longer just the top and bottom line outcomes that you talked about. It's the green line as well. It's the ESG line, which is a key outcome that CEOs need to deliver on. It comes back to that complexity, comes back to the checkers to chess discussion that we had earlier. So you see across the board here, all the stats reflecting CEOs' willingness to invest in ESG, the sentiment around the importance of this to the board, particularly in Europe and Canada, top of the list of objectives from a business spend standpoint. So the spending is going in this direction. But the example that I've picked here is IKEA primarily linked to that outcomes discussion, Parker, because they have got this business model. The focus for them is to create a circular business model by 2030. And so they've given 47 million products a second life, 38 million products resold through their as-in speciality shop, 9 million products repacked and returned to the shelf. So they're really focusing on that circular business model producing 100% circular products as well. But what was really interesting in parallel to that is that as a result of what we talked about earlier, they had a five times growth in e-commerce. So they started to understand customer buying habits completely in real time and use that as a way to drive their supply chain reconfiguration to the extent that they could avoid building 15 new distribution centers and have those fulfillment centers actually as part of the retail stores. And so it wasn't just the environmental, but also the cost-saving outcomes associated with that combination of ESG plus digital technologies to deliver those sort of outcomes. So our view is that 81% of all CEOs are gonna be significantly impacted by the skills gap over the next three years, resulting in billions of dollars of a business, it's a real business impact, meaning that they're gonna have to redefine the future of work, coming back to Parker, your point around this new hybrid reality. And this is that quote that I highlighted in terms of the offices becoming collaboration hubs, which I think is worthwhile reflecting on. But I think for this conversation, I do wanna zone in on leadership. You are very successful leaders in your own organizations, and I'm sure you're seeing this in terms of the focus on people leadership, the focus on putting people first as part of this new employee experience that you're putting in place across the organizations. Behind digital know-how, people leadership was number two on the list of skills that CEOs are looking to focus on as most critical for their success over the next three years. So I think there's a shift in the use of employee experience to get that dynamic feedback from the systems, from the setup in place, so to make sure that it's not just that once a year employee survey, it's a real dynamic set of feedback that you can ensure that you are aware of what's expected in terms of the culture, in terms of the workspace, and in terms of the workforce, as you can see in terms of the three pillars of the future of work. Now, I know, Parker, this is a big topic for you, so let's get your feedback on this. Does this make sense to you?
Yeah, absolutely. You know, at Salesforce, over the two years of the pandemic, about 47% of our employees started. So, you know, they'd never been in an office. They have not been, you know, to the in-person events that we've had, although we're bringing those back. So, you know, it's so important, definitely if you're digital, to connect with your employees. We bought Slack, and that's a great way that we're using to connect everyone virtually. But we're also leaning in, and we're doing some really interesting things. We've leased some property, we call it Trailblazer Ranch. We're going to have one on the West Coast here. We're going to have one probably on the East Coast, and we're going to put our employees physically through these facilities, similar if you were, you know, Accenture or PWC, you know, and all the people they hire, and they bring them to physical locations and onboard them. We have these facilities, and they're focused on leadership. It's not, you know, an off-site location to just plan the business. It's go there and really, you know, inculcate our employees in what is Salesforce, you know, who are the leaders we expect them to be, have them be together physically in an amazing environment. And we're probably, you know, I think the one we have out here in California trying to put through this year around 10,000 employees through that facility. It's not enough, you know. We probably need one in Europe as well. So it's kind of interesting, you know, we're moving to the digital HQ, we're working from anywhere, but we're also saying we've got to get people back, and just going into the office, you know, if I go into the office, it's not necessarily a guarantee that the people I work with are going to be there. Recently, I've had what we call on-sites. You know, we used to do off-sites and, you know, pay for hotels and, you know, travel and expense and the food and beverage and all that, and we realized, hey, we've got a lot of real estate. Come to one of our towers, you know, here in San Francisco or New York and bring people together and, you know, and have meetings. So I did a couple last week. I did one up in Seattle just yesterday. So how do you think about that digital HQ, but also the physical getting back together and be really conscious of leadership? You know, it's so important, and, you know, that's how you're going to not only create future leaders, but keep them in your company because they'll feel part of your mission, part of your vision, and help you build the future that you all need.
Yeah, so I was going to say that those leadership off-sites or on-sites, I really like that shift from off-site to on-site as part of the new hybrid. I think that that's going to stick. But I'm sure it's not just the leadership, it's the values, it's the purpose. You reconnect those individuals with those critical cornerstones of the Salesforce culture in order to make sure that they have that sense of belonging to that culture. And then obviously the advocacy and retention goes up in the background. Is that right, Parker?
Yeah, and you have to really be conscious and really push this. It's not a natural motion. You know, we used to kick off our fiscal year, which starts in February, with a meeting of about 500 of our top employees. This year in New York, we took Javits Center and had 5,000 of our employees. And we said, you're all going to come back. We did a lot of COVID testing. You know, we used the Q devices, which I don't have it here, but little Q device, it synced up to our cloud. You got a QR code, you go into Javits, you're good. So it was kind of a safe bubble at the time because Omicron was spiking. But it meant so much to have all of those employees who, some of them have never been in an office. Some of them had never seen each other in person. You know, that feeling that you're like, wait, Phil, have I seen you in person? I don't remember. Have I, you know? How do you look like compared to your Zoom profile? You know, what's funny is like, everyone says you're taller, you're shorter, you know, it's that feeling of like, you know, I feel like I've been working with you for quite a while and yet we finally are connecting. And so that's just so important. And, you know, you have to be a conscious, you know, we're thinking of taking our office spaces and programming them more like we program our marketing events, you know? And not just like, here's a cubicle for you, come to the office, but what's happening at the office today, come in and reconnect.
Yeah, absolutely. And it's not just the office environments, it's obviously the shops for retailers, it's the bank branches for banks. It's, you know, all of factories for manufacturers, supply chains, all of this is the physical reconfiguration that needs to take place, which requires that real-time data connection, the AI to drive the new journeys, customer journey, partner journey, employee journey. There's a lot of work that needs to be done to reconfigure digital, physical, based on these new digital experiences. So we won't have time to go through all of this, but I think the one thing that we are seeing is that the role of the methistorically have between work and our lives and the division that we used to create between them. Actually, there is a lot more fluidity in those. And if you think about the priorities that you have in your personal life as important as priorities you have in your work life, that perhaps makes for a lot healthier way of living, right? And just on a personal level for me, that was a big aha because I had a very different orientation to kind of prioritizing pre-pandemic and kind of post-pandemic. On the aspect of leadership, right, one of the biggest things I've seen just in how, therefore, if I go back to that personal learning, of the awareness and the focus on how people construct their lives with work being one part and the connections and the relationship being another. For me, really thinking about not people fitting into how we want to work, but the work fitting into people's lives. And I think for me, it really forced me to make that switch. So not thinking about how we're going to design our work environment and how people were going to fit into that, flipping the dynamic to say, how are we going to design a company that best enables what our people's priorities are and still find a way to build that culture, that connection, that camaraderie, and deliver work. And I think it was a real fundamental switch driven by just my own experience where I was reflecting on the fact that I used to be on a plane four or five days a week and cover God knows how much of the planet in a year. Versus thinking about the volume, thinking about the quality of those interactions and where I could spend deeper, more connected time with a smaller group of people, but perhaps less frequently. And then think about the more transactional things that could be delivered through other mediums, right? I think that kind of orientation of the personal influencing the business is probably how I'd answer that question.
Yeah, so moving from quantity to quality as part of interactions.
Yeah, and moving from designing work and having people's lives fit into it, thinking about how work fits into their lives and enables them to do what they want to do. I think also being genuine and open about those challenges as a leader, I think has been an important learning for me, but I think generally for leaders across the world. I don't know, Parker, if you felt that pressure to say, okay, tell us how you really feel at the moment.
Well, I think that work's become more personal. That's kind of what Nigel was saying. And I think we can be more conscious of when do we need to travel versus connect. And what I think is amazing is we've been connecting in people's homes and I'm talking to CEOs and they're inviting us into their home and talking to them. That's pretty amazing. It's a very personal relationship that didn't happen before. You would have to go to their office building and there's the armor of the clothes everyone's wearing and the security and getting through. And it's just a much more personal world. And to Nigel's point, we have to be conscious of that and use it appropriately.
Agreed, agreed. Cool, so there's more questions coming in. I'm going to go to you for this one, Nigel. So with so many global CEOs surveyed, citing technology as the kind of word of the year, and it's been obviously picked up on, do either of you have any examples of where technology first approach to digital change has been a success? So it might be a bit of a counterpoint to your focus on outcomes, but maybe there is an opportunity to look at technology first, maybe for digital native organizations, Nigel. I don't know if you've got any thoughts.
Yeah, the way I interpret that question, Philip, is when folks are talking about technology first, I think it was just building on the language and the research that you did of the frame where this is top of mind, right? And I interpret this as being a digitally first organization. So to Parker's point, it may not be to the exclusion of outcomes. It may just be that this digital first principle, and for me, a good example, and actually it's a client that both Salesforce and Publicis Sabian and Publicis Group share, is Disney. I think Disney have done just such a wonderful job of showing how a company that you think about from a legacy perspective as perhaps being further behind the likes of a Netflix and perhaps even an Amazon, which launched Prime, focused on its kind of core fundamentals of being an incredibly content-rich company with amazing catalogs, but then makes the decision to actually switch from Netflix, who was one of its biggest sources of revenue, to creating its own platform in Disney+, and then goes on to acquire 100 million customers, which took Netflix 20 years to do in its first couple of years of operation, which is just an incredible example of, I think, a company basically saying, we have all the assets and we have all of the value to consumers, but unless we fundamentally reimagine ourselves for a world that is extraordinarily digital, we're not gonna be successful over the next 100 years. I think it takes a kind of a bold level of leadership that that team demonstrated through the decision of creating Disney+, but then now they have a relationship with millions and millions and millions of people whose touchpoint and whose entry point into Disney is a few dollars, as opposed to historically where the entry point might've been to go to a theme park or to go to a retail store or to go to a cruise. You've now got millions and millions of people telling you on a daily basis what are your properties that they're engaging with that starts to then create a flywheel effect across the rest, right? And that doesn't mean that the desire for them to continually reinvent themselves is gonna go away, just like we saw with Netflix, right? You can still be challenged despite reinventing yourself three or four times already, but it demonstrates, I think, the viability of a quote-unquote traditional organization thinking about life in a digital-first world and being very successful.
Agreed. I mean, I was watching how their share price was directly correlated to the Disney Plus performance, right? So that became the primary measure for the share price in the early stages, not so much now, but I think, and then to your earlier point, now they need to think about what do they defend, where do they differentiate, and where do they disrupt? Same sort of reframing of all of those priorities for the digital-first world. Parker, any thoughts on that in terms of examples that you've come across?
Well, I just like to add, it's not just Disney Plus, it's that they're thinking about that consumer who's watching shows on Disney Plus, and then when they go to the theme park or they're going on a cruise, they're thinking about that consumer and all the touch points and not just, we have Disney Plus, let's go to Disney Plus, what are people watching, and treat it as an isolated part of their brand. It's just one of the touch points. And so back to that digital and physical, they really have a grand vision of blending that all. And if I'm a customer of Disney, it's great if I have certain preferences of shows I'm watching, and then they give me a more personalized experience when I go to the theme park with my children, and they have characters that they love because we were watching some shows on Disney Plus. That's pretty amazing, as opposed to my having to say to the theme park brand, let me tell you what I like at the theme park, and then to the Disney Plus brand, here's what I like to watch. And don't put it back on the consumer, make that consumer experience seamless so that they feel like they know you wherever you are in the Disney experience.
Exactly. Yeah, sorry, go ahead.
Right, it just irrigates and builds, as Parker was saying it, the Disney Plus is the entrance into that ecosystem, but the more you create connections, you can start to imagine the physical and the virtual experiences, like to Parker's kids, you might get a game that you actually can experience virtually before you go to the theme park, or if a ride around a particular show that you love is just launching, you might get a special, I mean, there's so many possibilities when you think about the re-imagination, right? But think back to when Disney began this journey, they were effectively the equivalent of a manufacturing company for content, they had no connection with their customers, right? Like so many manufacturing businesses that went direct to consumer in the pandemic did, right? They didn't necessarily know who was watching what, all of that data sat on Netflix to the extent that, or with the operators of the cinemas where their movies released, right? And so I think this is like the power of that model.
Absolutely, the adjacent revenue streams that pop up as a result of those investments.
Yeah, the Mickey Mouse NFT, that would be one to keep an eye on out for.
Okay, so we're heading towards the end of the session and I really wanna just wrap it up with some parting comments and some final recommendations. Just to summarize the conversation, because we've gone through all sorts of different topics, we've introduced that notion of the digital business, but I do think based on what we've discussed, it has become clear that digital business is the basis to navigate the storms of disruption. These new experiences need to be redefined for the hybrid reality that Parker talked about. And then that tech to compete becomes the mantra to deliver those outcomes, not just top line, but also bottom line and then the green line or the ESG line. So that's been fascinating for me because it's given us so much color to the survey that we provided and those insights off the back of that. But I also do wanna ask you gentlemen, well, thank you gentlemen, first of all, but then I'll ask you to give us a parting comment, a parting one sentence recommendation to our audience based on all that we've covered to set them up for the rest of the year. So