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.
Patrick Steele LinkedIn: https://www.linkedin.com/in/patrick-steele-4b49685/
Blumberg Capital: https://www.blumbergcapital.com
Dignity Health: https://www.dignityhealth.org
Delta Dental: https://www.deltadental.com
Tim Crawford: Hello, and welcome to the CIO In The Know podcast, where I take the provocative, but pragmatic look at the intersection of business and technology. I’m your host Tim Crawford, the CIO, analyst and strategic advisor at AVOA.
Tim Crawford: This week I’m joined by Patrick Steele. Patrick serves on the Board of Directors for two companies, and is the CIO Counsel 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.
Tim Crawford: I’m joined by Patrick Steele, who is a Board Member for Dignity Health and Saucey. He’s also the CIO Counsel 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: Thank you.
Tim Crawford: So 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 you get started in this space and what’s different about the CIO role today?
Patrick Steele: Tim, that’s a good question. The interesting thing about kind of how I got started, I actually was working in a grocery store, so I was in high school, in 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 and 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 at 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 onsite NBA program as you’re kind of going through it.
Patrick Steele: But, what this guy taught me, and what I was able to experience, and then the people that I worked 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 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 responsible for all IT in the organization.
Patrick Steele: At that time, most CIO roles were the technical expert in the organization. You made sure that the things ran, and your payroll worked, and you paid your bills and all that type of stuff. But, because of this insight of this gentleman that mentored me, we were able to be what I consider what a CIO role should be today, is your part of the business and you’re bringing the expertise to the business that they don’t have. And if you’re trying to provide, in today’s world, artificial intelligence, automation, robotics, or whatever, the IT person can bring that, but they also have to understand what they’re bringing it to, they’re bringing it to a business, and how does the business relate to it, how can the business use it.
Tim Crawford: Now-
Patrick Steele: And I think what- Go ahead.
Tim Crawford: 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: 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 is another aspect I’ll get into in a minute about what a CIO should do from a technology standpoint, 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 in California, I went from retail to Dental Insurance. And I told the head hunter 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.
Patrick Steele: So, when I came aboard, and this goes to some other points of what the role of the CIO should be today, the CEO said to me, “I want to be in the 21st 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 the lesson to other CIO’s in your organization, you’ve 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 then I did with other departments.
Patrick Steele: 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.
Patrick Steele: So, again, I came into an organization … So, it’s like the CIO that’s never been part of the business, you’ve just been in technology, you’ve got to then have a feel for it, and understanding for it, 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 … It’s very simplified, but that’s how you’ve got to do it.
Patrick Steele: Now, if in an organization they don’t want you, then my standard line is, go find a new organization because if it’s not going to happen, it’s not going to happen.
Tim Crawford: But, I think one of the pieces that you’re really highlighting here is, within the individual of the CIO there has to be that curiosity–
Patrick Steele: Yes.
Tim Crawford: — there has to be that internal drive. It can’t be someone externally pushing you, but rather 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 an opportunity for the CIO to start asking, “Okay, so how does the CEO think, or how does the COO think, or the CMO think?” How does the CIO relate to 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 is?
Patrick Steele: Well, it’s … We’ve had the age old long debate about, 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 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, “You need to understand something, we’re staff, we’re not [inaudible 00:08:10], we have zero authority, so we have to win them over. We can’t tell them what to do, we’ve got to win them over.” So, it’s all about relationships.
Patrick Steele: So, we worked very hard at being part of understanding, and playing in their playground not ours. And back then we didn’t even use any words around technology, because nobody understood it, that’s how I am. And they … But it worked. 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.
Patrick Steele: The second thing is, the work that Jim Champey and others did on strategy, kind of from an offshoot from Peter Dreker and everything is, is it’s not just people, 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 support from the CEO down through the organization. The C-suite has be on the same page. I’ve always said that the strategies of the organization cross all boundaries, and there’s departments and functions to support those strategies.
Patrick Steele: Let’s take HR, it’s not a … it supports the strategies of the organizations, it’s not a entity all into itself. IT shouldn’t be either, it supports the strategies of the organization. So if a CEO has a C-suite, then it doesn’t really matter where the CIO reports in that C-suit, but a 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, if a CIO is going to be the enabler of technology in an organization, which means you are adding technology or providing the solutions that make the strategies happen, and of course all that we’re hearing about today is digitalization and customer centric and everything else, that does take technology, but again, it’s got to be from a strategic stand point.
Patrick Steele: 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 make bad technology investments, because they’re not going to get the return on the because nobody’s supporting.
Tim Crawford: This is … This kind of leads back to some prior conversations around transparency for IT to the rest of the C-suite, kind of questions around, “So I’m spending millions of dollars in IT, what am I getting for that?” How do you start to create that transparency in ways that the CEO and the rest of the C-suite really understand?
Patrick Steele: Well, you have to be open, you have to be honest, 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 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 we do that type of stuff.
Patrick Steele: 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 they 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 can have project managers, and people, and a project head and everything, and I really … it doesn’t matter to me if they report to IT, to finance. In fact, I kind of like them to report to finance, but that drives the process.
Patrick Steele: 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 whose 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 do the project in IT because if we did it by ourselves, then we’re back to 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 you’ve got to make sure you have business and IT resources on every project.
Patrick Steele: Now, if you’re going to 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 to make it happen. It’s simple stuff, but I see it all the time, and I think you see it too because of the work you do with other organizations.
Tim Crawford: Yeah. I think it’s something that I definitely want to underscore is that, many of the things that you’re talking about, are not necessarily new conversations and I think this is part of the problem, right–
Patrick Steele: Right.
Tim Crawford: — is that, some of these things, some of these fundamental components are not new. These are things that we were doing 10, 15, 20 years ago, but we’re still talking about it. And I feel like 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 either change the conversation or figure a different approach, and not fulfill the definition of insanity.”
Patrick Steele: I agree. I think there’s too much experience in life for all of us, especially for younger people, of its quick, and it’s easy, and it’s neat too, and I want it now, and if I 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 in 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 skip those fundamentals then you’re not going to get the results you want out of the other end.
Tim Crawford: So if we’re talking about some of the same things over and over again, there seems to be this other extreme, and I’m sure you’ve seen the uptake in conversations about CIO’s serving on boards, on public boards, on private board startups, on advisory boards. It seems like there’s a gap here. We’re struggling to do some of the fundamental pieces as CIO’s, we’re struggling to build solid relationships with the rest of the C-suite, and yet we’re looking at being on boards. How do you make sense of all of this?
Patrick Steele: Well, I think good business leaders should serve on boards. Good business people should serve on boards that add value to what a board needs. Now, there’s a lot of technology coming in organizations, we’re not going to go down the deep dark whole of security because 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.
Patrick Steele: I can tell you–
Tim Crawford: I just want to interject there Pat, it’s for the audience. This is something that’s very unique, and I want to underscore something first before you delve into that,–
Patrick Steele: Okay.
Tim Crawford: — because you’ve had this unique perspective of serving on a couple of boards, one of which is a publicly trading company, Dignity Health, which is a very prominent healthcare firm, as well as a startup. And so, 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 comes into play, because healthcare is not a trivial industry to play in–
Patrick Steele: No.
Tim Crawford: — and so I think that adds another level of complexity that I’d love to get your thoughts on.
Patrick Steele: Okay. So going back, when I became the CIO at Albertsons back in the late ’80s or early ’90s, from that point forward I attended every board meeting in the organization. The executive team sat through the board meetings, which 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 watched boards operate. Again, with a curiosity of learning the business, that helped me also to get more business acumen as I went through my career. So that’s number one.
Patrick Steele: 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 involved in civic type things. I could get involved in American Diabetes Associations, a lot of … all the different organizations, sit on boards, chair boards. I actually sat on the board of a hospital and chaired that board, and I was doing it to get experience as a business person. Not with the idea that someday I was going to be on a board of a major company, but just getting more business experience and learning different things.
Patrick Steele: So, when I had the opportunity to join Dignity Health, they were actually looking for a IT executive and a finance person to complement their small board. They had 10 members who voted … 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.
Patrick Steele: But, just to show you … So, it’s a business … I mean, I brought IT to the table. I sit on the Audit and Compliance Committee, I made sure that 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, and we’re now going to be the … We’re going to serve 25% of the population of United States when we get this merger done. I’m on that new board, I’m chairing the HR and Comp Committee, I’m not chairing the Technology Committee because they feel that, that’s … And 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 chairing it.
Patrick Steele: So, again, its business acumen. It’s understanding business, it’s understanding … And taking me out of the equation, it’s people that have the ability to lead others, and not lead others because you’re the pounding the table boss and you’ve got the big badge on, you can lead others because, 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 bring things to the table. So, that’s carried through.
Patrick Steele: So, I guess my answer to this whole thing is, just because you’re a CIO and you represent technology, doesn’t mean you should sit on a board. 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. All in the fashion industry, Gucci, you name every label he’s run it. He is one of the best business people, leadership people, management people I have ever … and he’s a Westpoint Graduate, but he chairs the Audit and Compliance Committee because that’s his strongest expertise, but he brings a lot more.
Patrick Steele: So, you’ve got to bring more than your title, and your immediate responsibility to a board, and I think that’s what the CIO’s are missing when the industry says, “We’ve got to get more CIOs on the board, because we’re trying to elevate the position and make everybody look important, or feel important, or be important.” But, it’s about, “Do you have the business chops to sit on a board?” And you’ve got to be a very supportive, very understanding, it’s team work, nobody pounds the 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: Yeah. I think there are a couple of 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.
Patrick Steele: Right.
Tim Crawford: Especially if you’ve come up through the rank and file of the IT organization, you’ve got your work cut out for you-
Patrick Steele: Right.
Tim Crawford: — to figure out how to build those relationships and then eventually understand how your business works. 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 customers.”
Patrick Steele: Yes.
Tim Crawford: And it’s amazing how many IT leaders lack either the ability to get out with customers, and in some cases for good reason and some cases for not so good reasons.
Patrick Steele: Right.
Tim Crawford: 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.
Patrick Steele: Right.
Tim Crawford: Right?
Patrick Steele: Right.
Tim Crawford: And so when you get to the board [inaudible 00:23:01], you’re really taking this to a whole nother strata–
Patrick Steele: Absolutely.
Tim Crawford: — and there’s a lot more at stake.
Patrick Steele: You know Tim, you just reminded me of something. Years ago, and I might have told you this before, but years ago the Institute of the Future out at Stanford, a guy by the name of Bob Johhanson ran this, they had a series of meetings that I attended and one of which was sponsored by PNG. So PNG and 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.
Patrick Steele: And we spend 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’ve got to act the role before you become the role. Not that you’re acting like a CEO, but you’re getting yourself actively involved, and you’re building good relationships with the management team, that if you were the CEO, you’d have to work with, and if you’re part of that management team, you’d have to work with.
Patrick Steele: And I think that’s what people miss. They just want an appointment, or an anointment, and then they’re there.
Tim Crawford: 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–
Patrick Steele: Right, yes.
Tim Crawford: — been a term–
Patrick Steele: Yes.
Tim Crawford: — that’s been thrown around amongst CIOs of late.
Patrick Steele: I couldn’t agree more.
Tim Crawford: Okay. So, let’s kind of maybe wrap this up.
Patrick Steele: Sure.
Tim Crawford: We’re getting toward the end of our time. But there’s one question that, with your experience from a business standpoint and serving on these boards, as well as your experience in technology 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 it, if it does?
Patrick Steele: Well, I definitely technology fits into it, but not like it used to. It’s not that you are the best programmer and then you figured out how to 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 you do things that others can’t do.
Patrick Steele: So, when 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 96% of them are automated.” The COO didn’t think that was very funny, but I was truthful on that.
Patrick Steele: So, there’s so much … there’s so many great things that technology can bring into organizations. We’re looking robotics, and artificial intelligence, and machine learning, and 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 on [inaudible 00:27:06] 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 have brought when we were doing these things, they just have to get themselves locked in, in the right part of the organization and trusted.
Patrick Steele: 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 G-Wizz, whatever it was, and I’d take 20 minutes and teach it to the board. Things like, you can now store data on sales reversing from digitization to DNA because … And–
Tim Crawford: It’s more dense.
Patrick Steele: Yeah. And they would go, “Well is that going to happen?” I said, “Maybe in 10 years, maybe not, but how cool is this?” Again, just to … And I think, if that stuff happens, I would love to be in my 30s and being a CIO right now, because there’s that we can do in business and you’re seeing stuff in new startups and everything else. It’s changing the world, and what more exciting thing than that is there?
Tim Crawford: I think there are so many different paths we could take this conversation and continue it.
Patrick Steele: Right.
Tim Crawford: I mean, we could talk about innovation in healthcare, disruption in healthcare–
Patrick Steele: Right.
Tim Crawford: — 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 go deeper into. And I hope you’ll come back, and we’ll do another episode at some point.
Patrick Steele: I would love to sometime Tim, and thank you very much and I enjoyed this immensely.
Tim Crawford: Great. Patrick Steele, thank you again.
Patrick Steele: Take care.
Tim Crawford: For more information on the CIO In The Know podcast series, visit us online at CIOitk.com, or you can find us on iTunes, Google Play, Stitcher, and Sound Cloud. Don’t forget to subscribe, and thank you for listening.