Spotlighting Technology Through the Curious CIO with Patrick Steele

Introduction

In this episode, I’m joined by Patrick Steele. Patrick has served as CIO for Delta Dental and Albertsons. He is currently the Chair of the CIO Advisory Board at Blumberg Capital and serves on the boards of both Dignity Health and Saucey.

In this episode, we talk about the challenges between the CIO role, the board of directors and how Patrick’s curiosity played a role in his journey.

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Speaker Profiles

Patrick Steele LinkedIn: https://www.linkedin.com/in/patrick-steele-4b49685/

Blumberg Capital: https://www.blumbergcapital.com

Dignity Health: https://www.dignityhealth.org

Saucey: http://www.saucey.com/

Delta Dental: https://www.deltadental.com

Albertsons: https://www.albertsons.com/

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Audio File

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Featured Hashtags

#CIO #Board #CEO #DigitalTransformation #CIOitk

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Podcast Transcript

Tim Crawford 0:04
Tim, hello, and welcome to the CIO in the Know podcast, where I take a provocative but pragmatic look at the intersection of business and technology. I’m your host, Tim Crawford, a CIO analyst and strategic advisor at Avoa. This week, I’m joined by Patrick Steele. Patrick serves on the board of directors for two companies and is the CIO Council Chair for Blumberg Capital. Patrick is also the former CIO of two different companies. In this episode, we talk about Patrick’s journey to the CIO role, joining a board of directors, and how his curiosity played a key role in bringing a spotlight to technology. I’m joined by Patrick Steele, who is a board member for Dignity Health and Saucy. He’s also the CIO Council Chair for Blumberg Capital and the former CIO for Delta Dental and Albertsons. Patrick, thanks again for taking the time, and welcome to the program.

Patrick Steele 1:02
Thank you.

Tim Crawford 1:04
So, let’s, let’s kind of jump right into this. You’ve had the fortunate opportunity to work with a number of great companies as a CIO, and bringing that CIO perspective. How did, how did you get started in this space, and what’s different about the CIO role today.

Patrick Steele 1:23
Cam, that’s a good question. The interesting thing about kind of how I got started, I actually was working in grocery stores when I was in high school and college, and when I graduated, the gentleman that was running it for Albertsons, actually it was data processing at the time was looking for someone with grocery experience to bring into the department because he was smart enough to realize that a technician could not relate to grocery people in a pretty basic industry, so I was fortunate enough to go over interview through, and they were doing a management training program, and he brought me on board and I was able to then grow up in the IT department, but also grow up in a corporation that when I started was doing about 200 million, when I ended we were doing 40 billion, so it’s kind of an on, you know, on site MBA program as you’re kind of going through it, but what this guy taught me, and what I was able to experience, and then the people that I work with in the organization was the power of using it, or using information, basically to improve your business. So we did things to give our store directors better information way back, way before we had scanning in the front ends of the stores about where the profit was, and well, where the sales were in each aspect of the store. So, I was a retailer who also took over and was trained in, and became, you know, responsible for all it in the organization at that time. Most CIO roles were the technical, you know, expert in the organization. You made sure that the things ran and your payroll worked, and you know, you paid your bills and all that type of stuff, but, but because of this insight of this gentleman that mentored me, we were able to be what I consider what a CIO IO role should be. Today is you’re part of the business, and you’re bringing expertise to the business that they don’t have, and if you’re trying to provide, you know, in today’s world, you know, artificial intelligence, automation, robotics, or whatever, the IT person can bring that, but they also have to understand what they’re bringing it to, you’re bringing it to a business, and how does the business relate to it? How can the business use it? And I think, what.. go ahead. Yes.

Tim Crawford 3:48
Well, I was just going to jump in there. I guess one of the.. this is always a kind of sticking point in many of these conversations, which is, if you’re an IT leader that has come up through the rank and file, where do you get that experience? I mean, you’ve had the opportunity of having a mentor that saw the future and saw the opportunity in you to expose you to different areas. How does an IT leader or CIO that maybe doesn’t have that exposure, how do they get that exposure?

Patrick Steele 4:19
Well, you have to, I’ve always described it. You have to have a strong curiosity for new and different. You have to have, which, which is another aspect I’ll get into in a minute, of what a CIO should do from a technology standpoint, and you know, and willing to learn, and everything else. A good example is when I left retail, and then did some things for a couple of years, and then I got recruited to come to Delta Dental of California. I went from retail to dental insurance, and I told the headhunter at the time that I don’t think I’m the right fit, and he said, “No, you’re the perfect fit, because you’ve done business transformation, and that’s what they need. So, when I came aboard the. And this goes to some other points of what the role of CIO should be today. The CEO said to me, “I want to be in the 20-first century technology wise. We haven’t done anything around here for 50 years. You’re the first outsider we’re going to bring in. Can you get us there? And I said, “I think so, but I don’t know. So, what I did is I, and this is this is a lesson to other CIOs in your organization. You got to learn the business. So I traveled with the sales, I went out to operations. I spent less time in my department the first 30 to 60 days than I did, you know, with other departments. Then I gathered business leaders together and said, what’s the problem we’re trying to solve? We want a new claims engine, but we need to change business processes. Can we do this as an organization? And so I had a VP from every part of the organization, and they went out and came back to me in 45 days and said, yes, we can do this, and we should buy a package, not build it. So we created a business IT team to then drive that automation, so again I came into an organization, so it’s like the CIO that’s never been part of the business, you know, he’s just been in technology, you’ve got to then have a feel for and understanding for and get involved in the business, and as you do that, then how does technology play that role, and that’s kind of how we, you know, that’s it’s very simplified, but that’s how you got to do it now. If in an organization they don’t want you, and then my standard line is, go find a new organization, because if it’s not going to happen, it’s not going to happen, you know.

Tim Crawford 6:37
But I think one of the pieces that you’re really highlighting here is within the within the individual of the CIO, there has to be that curiosity, there has to be that that internal drive. It can’t be someone externally pushing you, but rather it needs you need to have that internal drive to be curious about how does the company work, and this kind of shifts a little bit to my next question for you, which kind of talks about the rest of the C suite and the role that the CIO plays with the C suite, and is this really a, an opportunity for the CIO to start asking, okay, so how does the CIO, or I’m sorry, the CEO think, or how does the COO think, or the CMO think? How did.. how does the CIO relate to the rest of the C suite, and where does it today? Can you maybe compare and contrast of where you think it should be versus where you see it

Patrick Steele 7:37
is? Well, it’s, you know, we’ve had this long, this age-old, long-aged old debate about, you know, should the CIO report to the CEO, the COO, the CFO. That’s not what you’re asking, and that’s not kind of what I’m going to answer. It’s, it’s how, how they relate. I think two things come to mind as you were asking that question, when going way back in my past again. The guy that mentored me, he said something. We’re staff, we’re not lying, we have zero authority, so we have to win them over. We can’t tell them what to do, we got to win them over. So it’s all about relationships. So we worked very hard on being part of understanding and playing in their, you know, in their playground, not ours. And back then we didn’t even use any words around technology, because nobody understood it, that’s how old I am, and they, but it worked, and I, and if you take that forward and understand it’s in their area, not in your area, that’s going to make that stuff work. The second thing is the work that Jim Champy and others did on strategy, you know, kind of from an offshoot from Peter Drucker, and everything is, is it’s not just people, you know, time and technology, or people, money and technology, whatever that saying is, it’s about strategy and all the pieces of strategy, and one of which is that you have to have support from the CEO down through the organization. The whole C-suite has to be on the same page. I’ve always said that the strategies of the organization cross all boundaries, and then there’s departments and functions to support those strategies. You know, we let’s take HR – it’s not a, you know, it supports the strategies of the organization. It’s not an entity all into itself. It shouldn’t be either. It supports the strategies of the organization. So, if a CEO has a C suite, and it doesn’t really matter where the CIO reports in that C suite, but they’re part of that C suite, they’re all working towards the same goal, and the departments are interchanging and working together, and everything else, and I think it’s very important for if a CIO is going to be the enabler of technology in an organization, which means you are, you know, adding technology or providing the solutions that make this. Strategies happen, and of course, all that we’re hearing today is about digital digitization and customer, you know, centric and everything else that does take technology, but again, it’s got to be from a strategic standpoint, and in some organizations I see it really nicely, in other organizations it just isn’t happening, and when it doesn’t happen, you’re just going to beat your head against the wall, and the company is actually going to make bad technology investments, because they’re not going to get the return on them, because nobody’s supporting

Tim Crawford 10:31
this. Is you know, this kind of leads back to some prior conversations around transparency for it to the rest of the C suite, you know, kind of questions around, so I’m spending millions of dollars in it. What am I getting for that? And how do you, how do you start to create that transparency in ways that the CEO and the rest of the C suite really understand?

Patrick Steele 10:57
Well, you have to, when you have to be open, you have to be honest, you know, and you can’t try to hide the ball. It does cost money. I know when I was at Delta, and we did the major transformation. This thing cost more dollars than I ever thought it would cost, but we didn’t, you know, say it’s going to cost x, and then we come in with 5x We say it’s going to cost 5x This is what it’s going to take, and this is why, because you haven’t done anything for 50 years, and blah blah blah, and you do that type of stuff, and if you’re honest about it, and then you create a, you have to have a discipline in your organization around project management. I mean, we have to get back to the basics once in a while, but project management, the way I’ve always dealt with it is, is it’s the, again, it’s not an IT project management, it’s a C-suite project management. You know, you can have project managers and people and a project head and everything, and I really doesn’t matter to me if they report to IT to finance fact. I kind of like them to report to finance, but that drives the process, and so we’re going to do this project. It’s going to cost $20 million What’s the commitment from business to this 20 million? Not who’s going to pay for it, but how many people are you going to put in this thing? What’s the commitment from it? What’s the technology going to cost? How long is this going to take? And then on a weekly, monthly, whatever basis you track that, and I got to the point where it became very easy to manage projects in it, because if the business didn’t put people into the project to do whatever the project was, then we wouldn’t, we wouldn’t do the project in it, because if we did it by ourselves, then we’re back to the old method of it being an island unto itself, doing stuff for the corporation instead of the corporation as a team working on strategies and tactics to make those strategies work, as one going across the organization, and that’s an important point that people kind of miss a lot, that that you got to make sure you have business and IT resources on every project now. If you’re gonna, you know, replace your servers, that’s an IT project. I understand that, but all the other stuff isn’t, and we tend to let it wallow in that stuff instead of having the business, which includes it, manage it and make it happen. It’s simple stuff, but I see it all the time, and I think you see it too, and you know, because of the work you do with other organizations.

Tim Crawford 13:29
Yeah, I think you know, I think it’s something that I definitely want to underscore, is that many of the things that you, that you’re talking about are not necessarily new conversations, and I think this is part of the problem, right, is that these, some of these things, some of these fundamental components are not new. These are things that we were doing 1015, 20 years ago, but we’re still talking about it, and I feel like it’s, it’s like beating your head against the wall of, okay, so the way we’re doing it is not working, so we need to, we need to either change the conversation or figure a different approach, you know, and not fulfill the definition of insanity.

Patrick Steele 14:11
I agree, I think there’s too much experience in life for all of us, especially for younger people, of it’s quick and it’s easy, and it’s me too, and I want it now. And by push a button, it’s there. I understand all that, and we’ve automated a heck of a lot of things in business, and a lot of things in it, and the life, and everything else. But there’s fundamentals of organizational process structure and fundamentals of business that if you don’t pay attention to the fundamentals, and sometimes you can do them quicker, faster than we used to, but if you, if you skip those fundamentals, then you’re not going to get the results you want out of the other end,

Tim Crawford 14:53
so for, if we’re talking about some of the same things over and over again, there seems to be this, this other extreme and. And I’m sure you’ve seen the uptick in conversations about CIOs serving on boards, on public boards, on private boards, startups on advisory boards. It seems like there, there’s a gap here, you know. We’re still struggling to do some of the fundamental pieces as CIOs. We’re struggling to to build solid relationships with the rest of the C suite, and yet we’re looking at it being on boards. How do you, how do you make sense of all of this?

Patrick Steele 15:33
Well, I think good business leaders should serve on boards, good good business people should serve on boards that add value to what a board needs. Now, there’s a lot of technology coming into organizations. We’re not going to go down the deep, dark hole of security, because that’s that’s a big issue. Also, but let me relate to how I got on a board, or why I got on a board, or whatever, but it may help a little bit. I can tell you, go ahead,

Tim Crawford 16:05
and I just want to interject there, Pat, you know it’s for the audience. This is something that’s very unique, and I want to underscore something first, before you, before you delve into that, because you’ve had this unique perspective of serving on a couple of boards, one of which is a publicly traded company, Dignity Health, which is a very prominent healthcare firm, as well as a startup, and so that’s that’s a very unique position, even if you look beyond just the kind of title of serving on a board, right, and so I want to make sure that that that comes into play because healthcare is not, is not a trivial industry to play in.

Patrick Steele 16:47
No,

Tim Crawford 16:47
and so I think that adds another level of complexity that I’d love to get your thoughts on.

Patrick Steele 16:53
Okay, so going back when I became the CIO at Albertsons back in the late 80s, early 90s. From that point forward, I attended every board meeting in the organization. The executive team sat through the board meetings, which was was good for all of us. We all made presentations on different things. When I came to Delta, because we were going to do this major transformation again, I sat through every board meeting, made presentations, and everything, so I would, I watched, you know, boards operate again with a curiosity of learning the business and being involved in the business that helped me also to, to get more business acumen as I, as I, as I went through my career, so that’s number one. When I was in Idaho working for Albertsons, I had the opportunity being a staff person, so I didn’t have to be out in the field all the time managing grocery stores, that I could get involved in civic type things, I could get involved in American Diabetes Association, you know, lotted on, you know, all the different organizations sit on boards, chair boards. I was actually on the board of a hospital and chaired that board, and I was doing it to get experience as a business person, you know, not with the idea that someday I was going to be on the board of a major company, but, but you know, just getting more business experience and learning different things. So when I had the opportunity to join Dignity Health, they were actually looking for an IT executive and a finance person to complement their small board. We, they have 10 members, they’re going to go to.. no, we had about nine, we’re going to go to add two more. And so they interviewed four people, two IT people and two finance people, they selected the two IT people, because both of us, quoting the CEO, had more business acumen and understood business much better than the finance people. Now that’s they just probably had the wrong finance people, because I know a lot of finance people that know business a lot better than IT people, but just to show you, so it’s a business. It’s, I mean, I brought it to the table. I, I sit on the audit and compliance committee. I made sure that we’re, we’re paying attention to cyber security and all those type of things. But we’re doing a merger right now with Catholic Health Institute. We’re now going to be the, you know, we’re going to serve 25% of the population of the United States. When we get to this merger done, I’m on that new board. I’m chairing the HR in comp committee. I’m not chairing the technology committee, because they feel that that’s because we’re going to have to down the road hire a new CEO, and everything they said that’s where they want me to serve, versus I’m on the technology committee, but I’m not sharing it, so again, it’s business acumen, it’s understanding business, it’s understanding and taking me out of the equation. It’s people that have the ability to to lead others and not lead others because you’re the pound in the table boss, you know, and you’ve got the big badge on, you can lead others because. Is, as I told you before, when I was way young in my career, I was taught we have to convince people to work with us, because we have no authority, no power, we just have, you know, we just bring things to the table. So that’s carried through. So, my, I guess, my answer to this whole thing is just because you’re at CIO and you represent technology doesn’t mean you should sit on a board, you know, the boards need technology expertise, but they need people that can contribute more than one level of expertise to the board.

The guy that chairs the audit and compliance committee for Dignity Health is a guy that was a turnaround artist and has run 30 companies in his career, you know, at all in the fashion industry, Gucci, you name every label, he’s running, he is one of the best business people, leadership people, management people I have ever, and he’s a West Point graduate, but he chairs the audit compliance committee, because that’s his strongest expertise, but he brings a lot more, so you’ve got to bring more than your title and your, you know, immediate responsibility to a board, and I think that’s what the CIOs are missing when, when the industry says we got to get more CIOs on the board, and you know, because we’re trying to elevate the position and make everybody look important or feel important and be important, but it’s about, you know, do you have the business chops to sit on a board, and you got to be a very supportive, very understanding, it’s teamwork, you know, nobody pounds a table when you’re on a board, if you do, you’re not on a board for very long, so I hope that helps a little bit,

Tim Crawford 21:38
yeah, you know, and I think there there are a couple things that come to mind, as part of that is that not every CIO is going to be cut out for board service, and not every CIO is well prepared to even build relationships with the C suite, you know, especially if you’ve come up through the rank and file of the IT organization,

Patrick Steele 22:02
right.

Tim Crawford 22:03
You’ve got your work cut out for you to figure out how to build those relationships, and then eventually understand how your business works. You know, I’ve often said it’s important to understand how your business makes money and spends money, and understand what your customer looks like, and not just from a piece of paper that you read, but rather getting out in the field and meeting with, yes,

meeting with customers, and it’s amazing how many IT leaders lack either the ability to get out with customers, and in some cases for good reason, in some cases for not so good reasons, but then the other piece is they lack the understanding of how their business makes money and spends money beyond what the average consumer might know, right?

Patrick Steele 22:54
Right.

Tim Crawford 22:56
And so, when you get to the board level, you’re really taking this to a whole nother strata. Absolutely, and there’s a lot more at stake,

Patrick Steele 23:04
you know, Tim, you just reminded me of something years ago, and I might have told you this before, but years ago, the the Institute of the Future out of Stanford, a guy by the name of Bob Johansen ran this, they had a series of meetings that I attended, and one of which was sponsored by P and G, so P and G, and their top, their CIO, and I can’t remember the name at the time, invited Albertsons and Shell Oil and Walmart and Standard Oil, and a whole bunch, about 10 really big companies to this meeting to talk about what’s the role of the CIO and where’s it going, and we spent two days doing this, and it was very provocative and very interesting. What came out of it was, and it really stuck with me, was the CIO should be the person that closest resembles the activities of the CEO in an organization, because if you’re a good CIO, you’re involved in all aspects of the business, and if you’re involved in all aspects of the business, then you should have a good relationship with the rest of the C suite. So I always acted, and I always liked that, because at one time I wanted to be a CEO of a company, so I always thought, okay, I’m on the right track here, but you got to act a role before you become enrolled, not that you’re acting like a CEO, but you’re getting yourself actively involved, and you’re building good relationships with a management team that, if you were the CEO, you’d have to work with, and if you’re a part of that management team, you have to work with, and I think that’s what people miss, they just want an appointment or an anointment, and then they’re there,

Tim Crawford 24:39
and just to be clear, Pat, you’re really saying that they should be thinking like the CEO, not being the CEO of technology, because that’s been a term that’s been thrown around, you know, among CIOs of late.

Patrick Steele 24:54
I couldn’t agree more.

Tim Crawford 24:55
Okay, so let’s kind of maybe wrap this up, we’re getting. Toward the end of our time, but there’s one question that you know, with your experience from a business standpoint and serving on these boards, as well as your experience in technology over over the last period of time, and then your exposure to all of this new innovation at your work with Blumberg Capital, what excites you most about the role of the CIO today, and where does technology fit into

Patrick Steele 25:28
it? If it does, well, I, well, I definitely think technology fits into it, but not like it used to. It’s not that you know that you were the best programmer, and then you figured out how to, you know, configure the servers and all that kind of stuff. It’s about how you use tools to create a point of differentiation for your organization against the competition. How do you do things that others can’t do? So, what I.. so I think what excites me about the role of CIO today, is it’s getting a bigger spotlight than it ever had. All organizations are technology organizations. Let’s just get that out on the table, because I don’t know very few businesses that can run without technology driving the process of the business. I mean, I kiddingly told the CFO at Delta, when I retired, I said, “You guys don’t need a chief operating officer, because we’ve automated so much. The computer’s your chief operating officer, they’re running, because all you do is process claims, and it was 96% of them were automated. The CIO didn’t think that was very funny, but I was kind of, you know, truthful in that. So, there’s so much, there’s so many great things that technology can bring to organizations, we’re looking at, you know, robotics and artificial, you know, intelligence and machine learning, and then the whole biotech thing on improving for healthcare and everything else. This is the greatest time we’ve ever been involved in, and then the speed of technology, and you know, Moore’s Law, and all that kind of stuff, so all that stuff is there, and I think that the CIOs have such an opportunity, and they can bring so much more to the organization that we could, could have brought when we were doing these things, they just have to get themselves, you know, locked in in the right part of the organization and trusted. I mean, one of the things I did at the board was once a year we’d have an annual meeting, and at that annual meeting, I wouldn’t talk about anything to do with what we were doing at Delta. I would take the latest technology, gee whiz, whatever it was, and I take 20 minutes and teach it to the board, you know, things like you can now store data on cells reversing from digits, you know, digitization to DNA, because you know, and you know

Tim Crawford 27:53
it’s more dense,

Patrick Steele 27:54
yeah, and they would go, well, is that gonna happen? I said, maybe in 10 years, maybe not, but how cool is this, you know, and that again, just to, and I think, is that stuff happens. I, you know, I would love to be in my 30s and be in a CIO right now, because there’s things that we can do in business, and you’re seeing stuff in these startups, and everything else. It’s just, it’s changing the world, and that’s what, what more exciting thing than that is, there?

Tim Crawford 28:20
You know, I think there, there are so many different paths we could take this conversation and continue it. I mean, we could talk about innovation and healthcare disruption, healthcare disruption across a number of industries. Patrick, thank you so much. This has been a great conversation. I think we’ve covered a number of different areas that are just fascinating, and we can go deeper into, and I hope, hope you’ll come back, and we’ll do another episode at some point.

Patrick Steele 28:50
I would love, I would love to sometime, Tim. And thank you very much. And I enjoyed this immensely.

Tim Crawford 28:55
Great, Patrick Steele. Thank you again.

Patrick Steele 28:58
Take care.

Tim Crawford 28:59
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