Insights on Transformation feat. Bernard Tyson – 2019 AT&T Business Summit

Insights on Transformation feat. Bernard Tyson – 2019 AT&T Business Summit

[MUSIC PLAYING] Thanks, Sam, very much. It is great to be back in
the AT&T Business Summit. One of the most
rewarding parts of my job is getting to sit
down with people who are impacting our world
in incredibly positive ways. This is really true of the
transformational leaders that you’re about
to meet right now. I want to introduce
Vivek Sankaran. During his tenure at
PepsiCo North America, Vivek was able to translate
the evolving tastes of snack consumers into industry-leading
growth for Frito-Lay. He’s bringing that same focus
on innovation and technology to his new role as President
and CEO of Albertsons. Companies, please
welcome Vivek Sankaran. Great to have you. Thank you. [APPLAUSE] My next guest is the
first woman in history to have led a top 20 US bank. She was named the number one
most powerful woman in banking for three consecutive years. I believe now, then she was
moved into the Hall of Fame, so it’s permanent. As the Chairman
and CEO of KeyCorp, she initiated the
digital transformation of really one of the
nation’s largest bank-based financial services company. Please welcome Beth Mooney. [APPLAUSE] And our final panelist
is on a mission to transform health
care in America and lead the nation in
a movement to improve health and health care for all. His pioneering work in the area
of total health– mind, body, spirit– is helping the nearly
13 million Kaiser Permanente members thrive both
physically and mentally, making him one of the
most influential people in health care today. Please welcome Chief Executive
Officer of Kaiser Permanente, Bernard Tyson. [APPLAUSE] Thank you. Welcome. I thought we’d just start
by talking about technology. I mean, all of you in
all of your industries, you’re pushing the
way, you’re innovating. And Vivek, if you will just talk
a little bit about what areas of technology in Albertsons
interests you the most and kind of where you’re pushing it. Yeah. Anderson, when I think
about technology, it’s making the
unlearn everything I’ve learned in business
school and for many, many years in business. And I put it this way. We would talk in
business school, and you learn that you
want to simplify things, and you want to find
a way to offer– at least in our business– a lot of consumers stuff
that is good to most of them. That doesn’t work
in today’s world. If you like grass-fed beef,
you want grass-fed beef, and that’s what
you’re going to buy. And so technology
today is allowing us to embrace complexity in
ways that we never imagined. So we know that
in certain stores we need to carry more
grass-fed beef than not, and you can’t have a
store director do that, but we put technology in
there to help them think about the right
order quantities, the right inventories
to hold in a store. And so that’s in the
back end of the business. Then we use the same
technology to make sure that when you open
your Safeway app, you get a promotion or an
innovation on grass-fed items. Maybe now we’ve
introduced grass-fed milk, and you get that. And somebody else doesn’t
see that because they don’t care about grass-fed products. So technology in
my mind today is allowing us to embrace
complexity, not be scared of it, really
embrace it, and solve it in the back end in the business
and solve it for the customer. You’ve made big
inroads on e-commerce. Yes. But the entire
experience of going to one of your retail outlets
around the country– and I don’t know if
everybody knows this. You have 270,000 employees. You’re one of the biggest
retail employers in America, I think one of the top three
privately held companies. Talk about e-commerce and how
important that has become, and where the innovation
is moving forward. It’s such a significant change. I think consumers today
don’t necessarily always want to go into a grocery store. They go in there to
pick up the produce. They want to pick up the
meat and the seafood. But there’s also times when
she just wants to drive up. She’s busy. She’s got the kid in the car. She wants the groceries
put in the car and move on. And so we’re having to adapt our
model to serve these customers, and technology plays a role. So today we have, in
most of our stores, if you order a what we
call Drive Up and Go, we have somebody walking
around the store picking up the product. We have two stores
now in California where we’ve put robots at
the back of a store that picks the products for
us, creates the basket, so that we don’t have
to have someone walking around the store doing it. And when you come in, we
bring the product out to you. So technology is
playing a role there to get the costs down and then
let more and more applications, so that you can
order what you want, and when you go on next
time it’s the same order that you had last time, change
a few things, and you’re done. Beth, talk a little bit about
how technology has sort of changed the way you operate. In our business, it’s
true that when we started in the technology journey–
and I think Ann did a nice job of kind of level-setting us
where we were just 10 years ago– it was about trying
to figure out how to be convenient,
yet differentiate. And what I’ve seen is a real
convergence that the technology that’s available today– the ability to bank through
your phone and transfer money and all of the things
that we couldn’t have done 10 years ago– the convenience and the
simplicity of those platforms are key to the experience. But that’s also where
the differentiation is. So they’ve really,
really converged, and I see a world where
personalization and making sure you meet people’s
needs is really going to be embedded in the data. For at least the
near term, I think that’s going to be a huge
part of the differentiator, that you can get to this
level of personalization because of how people
interact with you in a digital and mobile world. You know more and
more about them. And you can help them more. And I know this will
resonate with Bernard, that their financial wellness,
and you can help prompt them about how to think about their
own wellness, their goals, and make a really
integrated customer experience around this. So I will tell you
that it’s transforming how we do business. And perhaps the place
where it’s most prevalent is in the payments
world, because you see people making payments
through their phones, and they expect the
ability to transfer money to pay a friend
for sharing a meal, to how they pay for an
Uber or a Lyft experience. So we have found
that in that space, companies have to get
smart about what your core competency is, and in a
world where technology and its application changes the
way you deliver your services and people experience
you, I call it, you’ve got to figure out
what you should build, where you should partner,
and what you should buy, because nimbleness,
speed to market, shelf life of that
which you’re building, expertise, all enter into,
is it core to your mission to do those things, or do you have to get smart
about the ecosystem of who provides these things and
bring them into your world in a way that makes you more
responsive than on strategy with your customers? Bernard, I mean,
there’s so much talk about technology in health care
and the future of health care. It’s a tremendous change
in the health care industry and specifically in
Kaiser Permanente. And I look at it both from
the standpoint of what we call onstage, our
members and our patients, and then behind the curtain. So onstage, I mean, 10 years
ago, we were still pretty much seeing most of our patients
through face-to-face visits. It’s completely opposite now. So now with technology, you can
talk directly to your physician through secure
messaging, you can text, you can set up
video conferencing. It’s a whole
different mindset now that defines when I need to
be face-to-face for the touch, versus what I can
do it via high tech. Behind the curtain,
in terms of what it has done to our work
processes, et cetera, is it helped us to be more
efficient in moving our members and patients through the system. It has helped to redesign
the fundamental practice of medicine in many areas. We have a goal now– and we’re almost there– 60% to 70% of our joint
replacement surgeries are now same-day surgeries. You come in that morning, and
you’re going home that evening with a set of resources
and the technology to follow you to monitor
you in a remote setting. And so it is helping
with the healing process. You’re back in your own
comfortable environment, and yet you feel the
health systems surrounding you every step of the way. In terms of– I mean, there’s
obviously a lot of uncertainty on trade and the
economy, obviously, the political future as well– I’m wondering just
for all of you, do you have a quick read
on sort of the state of the global economy,
the national economy? I would start– being a banker,
maybe I think about that just a little bit, not
that we all don’t. But I would tell
you that I think part of what’s
interesting right now is if you look at the fundamentals
of our economy right now, the economy is solid. It may be slowing,
but slowing does not mean it is lapsing
into a recession. We are in what I
call a period where I call some of the indicators
around markets, global trade tension, global slowing,
some of these things– our issues with China– are starting to invade our
business consciousness in a way that I think this caution is
really starting to intersect with the business fundamentals
and the economic fundamentals that are still quite strong. So I would tell you the
consumer is very healthy, businesses are
still very strong– third-quarter earnings, I think,
have been indicative of that– but I see this caution,
or people holding back trying to figure
out what will be the confluence of these
events and the impact on the trajectory
of the domestic, as well as the global economy,
in a way that is contributing to this slowing and a
little bit of concern tending towards
pessimism stepping in. And I would tell you I think
our most important thing to do is remember that the
fundamentals are strong, and this economy and this
economic expansion can– albeit at a slower pace–
can and should continue. But just from a retail
standpoint, what do you see? I’m seeing a strong
consumer without a question. We watch carefully whether
they’re trading down on brands or price points
or they’re trading up, and I would tell you that most
people continue to trade up. So prepared foods– and people
seem to be more in a hurry. They’re looking for
convenience and are willing to pay for it, whether
it’s delivery or prepared foods and better brands. So we see a strong consumer. You’re also making a lot of
inroads and growing customers with specialty products– Own store products? Is that what– Own Brands. Own Brand, Own Brands. Right. But also sort of plant-based
foods, very high-quality foods. High-quality foods. And we see, those are
the fastest growing parts of our business– Really? Organics. We have a brand called
Open Nature, which is free from antibiotics and such. Fastest growing parts
of our business. And they’re a premium product. That’s why I come
back to, I feel we have a strong
consumer in the market. And are those new customers
coming in for that, or is that the customers
you’ve had who are sort of changing their life? It’s a little bit of both. You know, what we
find– again, go back to this point on
technology and data. It’s so hard to characterize
people into any one bucket. So there are people
who might say, I’ll eat organic on
produce, but I don’t care for organic in other things. And so there’s people– our current customers
shifting habits. And then we do get the
new customer who says, hey, that’s a place I can
go and be confident I’ll get those products. And so we do a
little bit of both, but it’s a lot of shift within
the current customer base. And you talked about– backstage a little bit– about
diversity in the workforce and in all of your companies. It’s obviously a major
issue for everybody to encourage it and
benefit from it. What are your thoughts? I would tell you
that, as a CEO, I think part of your
leadership journey should have a diversity and
inclusion imperative in it. I know when I got
the job at KeyBank– and you mentioned I was the
first female CEO of a top 20 US bank– I made it one of our top
five strategic priorities to have a diverse, inclusive,
and engaged workforce. But as in all things, how you
both promote that, measure it, and make sure it fits
to business strategy, and have rigor, so you
really do move the needle on your diversity
representation is critical. I think more important, as a
CEO, is the tone at the top, and I think it’s a real
competitive differentiation in today’s highly
coveted talent war for how we attract
people is that you stand for something more, that
you do have, I call it, diversity is who we are. Inclusion is who
we choose to be. And how do you make a workforce
where people feel respected, valued, that they can be
authentic, and create those, like I said, hard parts of the
metrics and what you measure and how you make sure you’re
really making progress, and marry it with a
cultural imperative to be inclusive and really
untap the value of the diversity that you’ve built. And I would tell
you, all of us– and particularly as diverse
leaders– but all of us are sitting where we are in
life because somebody gave us a chance, and we
can never lose sight of the fact we are
the stewards of chance for the next generation
and for diverse populations in our business. What are the
biggest challenges– I mean, just as CEOs, what are
the biggest challenges in terms of moving forward on diversity? Well, you know, I think
that word “inclusiveness,” I want to pick up on,
and I want to go back to your previous
question, because I think that’s where it fits
for me in terms of even that question we just answered. There are two tales here about
the state of the economy. I get the feel the other half of
it, which are the Americans who do not feel that they’ve been
full participants in the wealth has been created
in this country. It’s why health care is the
number-one topic right now being discussed, because many
Americans can’t afford the care that is obviously
state-of-the-art, and there’s a lot of frustration
with a feeling that there hasn’t been fair participation
in the wealth created in this great country. In our organizations
today, I would argue strongly the
whole topic of diversity is being taken out of
context, and it creates the wrong kind of tension. What I’m after is bringing the
most diverse population inside of my organization and tapping
into their brilliant mind that comes from a universe
of experiences that are very different depending
on how you were brought up, your community,
your neighborhood, how you solved problems
throughout history. Those are the kind of
thinkers I’d want at my table. And so inclusiveness is
very important to me, which means that when I step
into the room– and yes, I may be different from
everybody at the table, but I don’t have to fit in. I get the company
and to be who I am, and I create a
different organism, as I call it, inside of
that group dynamic for us to take performance
to the next level. That’s what I’m after, versus
I’m walking in the room and I have to gauge the room
and figure out how people will accept me in the
room, so I’m spending all my energy trying
to be accepted to then make a contribution. No, I want you to
make the contribution. My job is to figure
out how to continue to fine-tune the culture. So obviously there is a
fit here to create synergy, but you get the
leave every night feeling good that I brought my
total self into the environment and I was appreciated
for what I contributed. I think that’s a good point. [APPLAUSE] I just want to
double-down on that. Because I think when
we started our careers, fitting in was probably
job one of how to– you always had to bring
your best self to work, but you couldn’t bring your
authentic self to work, because you were trying to
find a way to fit at the table, sit down and hope no one– And you felt that from your– Felt that very definitely. And so when I talk about
it with our employees– I couldn’t agree with you more– we want your best thinking. We want the diversity of
backgrounds, opinions. The intentionality of
building the what of diversity is only as good as our
power to unleash it in the inclusive piece. And I tell people,
I want your best, and I want your authentic self,
because if you can’t bring your authentic self,
we are not getting the benefit of, like you say,
these talented people who work for us. I want to hear
from Vivek on this. But just out of
curiosity, was there a moment when you were in
a place where you felt, oh, I don’t have to fit in. I am actually being
accepted for the uniqueness of my ideas and my perspective. Well, I think you
get to a point where you make a choice of how
important is it to be accepted, which is part of that
mindset, versus, am I working to be my best. At the end of the day,
I get paid for results. And obviously I need to
get along with people. And I do that pretty well. I think I got to a point where
I sort of released myself from having to
prove myself to you, and it sets up the
wrong kind of dynamic, versus, we’re all
part of a team here. That’s clear. Let’s each contribute
in our unique ways and in our collective
ways, and we’ll probably end up with better performance. But what’s most
important to me now is that my team goes
home every night like me and feel like I showed up
as Bernard today at work, not I showed up the way the
company wanted me to show up. I showed up the way
I needed to show up. Then I can critique myself
to be a better performer, as opposed to, I’m trying to
figure out what you’re looking for for tomorrow, and you
create a different dynamic in the organization. And that’s part of what
I’m working on now. I got 220,000 brilliant
minds at Kaiser Permanente. I want everybody excelling
at their highest performance, and I can’t get that if you’re
walking into the environment and you’re trying
to figure out, how do I say good morning
to you in the right way so you don’t bark
at me this morning. That creates
non-productive energy, and most importantly,
it affects the mind. And mental health in
our work environment is the most important and
critical issues we are all facing in the 21st century. And Anderson, I’ll
tell you a story. So in 2016, I became
CEO of Frito-Lay, and in 2016, if you recall,
the first half of 2016, there were a lot of
police shootings, and then there was a
shooting here in Dallas, and there was
shooting in Orlando. And I was absorbing the
news and going to work, and while it was heavy on me,
but I just focused on work. And some colleagues
tapped me on the shoulder and said, what are you doing? Do you realize the weight that
our African American colleagues are carrying
walking around here? I mean, it was
tremendous weight in. And so I brought
them together, and I realized– that was
the day I realized that my job as a leader is
to have massive empathy. I need to understand what
people are going through. These events that
happened outside affect us in different ways. And so we started
this notion called courageous conversations. And so we would just
bring people together. Bring your lunch, sit down,
and let’s talk about anything. You can tell me, and we’ll talk
about any issue on your mind. And it just unleashed
us at Frito. It just became part
of this conversation. So any issue, anything on
diversity, put it on the table. Let’s not try to be– let’s not try to hide it. Talk about it. And we’ll all walk out of there
with a deeper understanding. I think there’s
probably a lot of folks in the room who would think
that sounds like a cool idea. The actual– I mean, it
could also lead to arguments. It could lead to
misunderstandings. Yes. Our experience was every
time we walked out of there with a deeper
understanding of each other and what the issues were. We didn’t have that
alternative experience. And that’s the
risk, which is why we called it courageous
conversations, because go in there
and be yourself, and what it does is
it builds empathy, so, in fact, I can go
and be myself at work. I did that when Michael
Brown was killed. And I had been
internalizing a lot of stuff and hearing a lot of
stuff being discussed. And one day I decided
to just begin to write, and I wrote about race
relations in America, and I told the story about this
person named Bernard Tyson who happens to be African
American, and he runs a at the time $61
billion dollar company. And I painted a picture
of the differences in how I’m treated in what I
call the C-suite versus when I put on a pair of jeans
and I go on the street. And what I was doing was, number
one, validating the experience is real. It’s night and day
how I’m treated in my office versus I
could put a hoodie on right now and walk on the
streets of America, and I’m treated in a
very different way. Or, I could just be walking
in different environments and things would happen. And I would tell different
stories in this article about just what happened
over the last six months, where somebody they thought
they needed to teach me how to give a tip before seating
me for a restaurant, right? So those kind of things. It seemed unbelievable
to a lot of people. I got something like over
half a million responses from that article, and
it was all over the map. It was all over the
map from, thank you for speaking up and giving
us an example of what it’s really like, to shut
up and go to work right? So it was all over the map. But the point was what it did
was created an environment where people began to feel
like it’s OK to talk about some of these issues. Right. Now, it has also created a
challenge in the 21st century at Kaiser Permanente, because
now every issue on earth that’s going on, somebody wants
us to speak up or speak out on it, and so there’s another
side to your question, which is how to manage the fact
that these issues are real to everyone and they’re
very big, complex issues. There’s also such polarization
in the country that– do you see that reflected in
any of these conversations or just in– does that become a
management issue? I would tell you, I think some
piece of this conversation is getting back to what I call– that our companies are
becoming the long pole of the tent in this country
now, because I think people– and it doesn’t mean
that there aren’t varying and different
points of view and how you make sure it’s
respectful and courageous and authentic– but I think people
in the workplace are so gratified that
we create these venues and these dialogues and that
we, as corporate America and as companies, are trying
to reach out and make sure that people do feel
valued, safe, respected, free to open up
their points of view that I think within
the workplace is one of the parts of America where
the bridging is starting to happen. And I think how we as leaders
conduct ourselves and extend ourselves and create
these environments is part of bridging that divide,
and I think all of us have a role in that. But we have a long way to go. The bottom line: we are
in our early innings of a many, many inning game,
and we have a long way to go. You’re also– I
mean, all of you are dealing with issues in different
states, different communities. I mean, you have stores
all over the place. Yes. Yeah, and we manage it. The nice thing about
that is we understand our local communities,
and we try to reflect that
community in all aspects, not only the products we carry,
but the services we provide, the community work that we do,
and it helps us on that front. But if I’m just stepping
back as corporate America, we’ve got a long way
to go on this topic. Are there– I mean,
what are the issues that as CEOs that keep
you up at night? What are the top things
that are constantly in the voice in your head? I’ll say that as a
CEO, I tell people there’s no business problem
that keeps me up at night. It’s always people,
and making sure that you’ve got
the right people, that you’ve done the right
things by your people, and that our
obligation to create this environment
for our employees and be leaders in
a way that helps create fulfilling careers. I call it the dinner table
test, that when people go home, they feel good about
what they’ve done. They feel good about being
part of your company, that you’re giving them
meaningful opportunities, their record. It’s the human element. Is that the hardest part? It’s the hardest and
the most important. Yeah, I share that. I worry a lot about the pace of
change, the impact on people, and how to make sure that
people feel empowered against that inevitable
change is inevitable. But if you feel like
you’re a victim of it, that you’re not participating
in adjusting to the changes, obviously it brings
additional stress. So we have fully
embraced technology, and I’ve been clear that
the technology strategy is to augment the people
strategy, that I do not have a working strategy,
that technology is here to wipe out all these jobs. It is to make you
better at what you need to do because health care
will always be high-touch. But at the same time, if
you’re watching and seeing all this change happening and
you’re not participating in it, it adds to the stress level. The second thing is, the
brand of Kaiser Permanente is only delivered through the
people of Kaiser Permanente. And so the pressure
points to the people to deliver on what our
organizations are requiring. Whatever growing
demands by our members and our customers,
rightfully so, brings additional stress
into the environment. And so I worry
about how relevant are my H.R. policies today? What’s a day off now
in the 21st century? How do I give you downtime? What does that really
mean in an organization when you’re work follows you? If you find out, by the
way, please let me know. Well, I’m still working on it. [LAUGHS] I’m still working on it. And it’s those kind of
issues that, to your point, keeps me up at night. Although I sleep every
night, I want you to know. I may wake up three or four
times during the night, but. But it’s those kind of
things that you worry about, that we want our
people to thrive. The worst thing you can
have is to have, in my case, a caregiver caring for
the sick and the healthy, but keeping them healthy,
and they themselves are as miserable as it gets
and/or under so much stress and pressure that they’re
at their breaking point. So how do you create
the right environment where there’s a win-win
going on as opposed to I’m on the losing end while
the company is winning? The same thing. The pace of change. And the scary
thing about that is that there is no finish line. There’s no good time to start
something, start something now. And I used to tell
people it’s a marathon. Actually, no, it’s
a marathon where you’re going to be sprinting
and you’re sprinting faster. And it’s easy for me
to absorb that and get my intellectual–
intellectually for all of us to get the notion
of change, but I’ve got 270,000 people who
have to change how they’re doing things, and
they’re not coming to work every morning
saying, I want to change. No, they want to
get something done, serve the customer well, and
go home and watch football, or whatever they want to do. Not everyone wants
to run a marathon. Right. Exactly. And it’s the human element
of this pace of change that keeps adjusting. And there’s no easy answer. We work through it. Just in the final
seconds, do you have advice for the
folks who are here? I mean, it’s the first day. If you were attending
this, what would you be wanting to get out of it? I would say, I think
it’s easy for you to get enamored with
all the amazing tech. By the way, I’ve never seen
a conference like this. Pretty cool. All the technology. It’s not so cool to see yourself
in profile on the giant thing and notice your waddle. [LAUGHTER] You see the– [LAUGHTER] I don’t know what you
said because that’s all I’ve been paying attention to. [LAUGHTER] It’s magnified. I gradually wanted to– [LAUGHTER] Yeah. I would encourage you to
walk in the next two days with a problem or
two you’re trying to solve for your
business, and then look at how technology can help you. Otherwise, you’ll be
drowned in technology. A wonderful person made
me up this morning, and I saw myself on there. When she finished, I
said, am I still alive? Now I look pretty good. I’ll have to do that every day. I have not looked. I would tell you that I think
the theme of the coming decade, because like I said,
I listened to Ann, and I was so struck about
where we were 10 years ago, and we talked about
pace of change, and it’s the type
of change I think we’re about to go in this
era of the type of change is going to be very different. And I think this is
going to give you insights and tools and
perspectives that will make us all better leaders. And I guess my last piece is,
with all this great everything and it’s wonderful, keep
the person in the center, because there’s always a
direct or indirect impact on the human touch
and the human. So I would be looking
at the intersection of all of this against the
most important thing, which is the human. Well, Bernard, Beth, and
Vivek, thank you so much. It was fascinating. Thank you. Appreciate it. Thank you. [APPLAUSE] [MUSIC PLAYING] Thank you so much.

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