Ep 7: Being a Customer-Facing CIO with Former Workday CIO Diana McKenzie

Saam: Hi there and welcome to Enterprise Software Innovators, a show where top technology executives share how they innovate at scale. Each episode covers unique insights and stories that will help you succeed as a technology leader. I’m Saam Motamedi, a general partner at Greylock Partners.

Evan: And I’m Evan Reiser, the CEO and Founder of Abnormal Security.

Saam: Today on the show, we’re bringing you a conversation with Diana McKenzie. Diana was previously Workday’s first ever Chief Information Officer, and before that, she was CIO at Amgen, where she worked for 12 years. Today, she serves on the boards of a number of important enterprises, including Vertex Pharmaceuticals, MetLife, Change Healthcare, and Paradox. 

Evan: In this conversation, Diana shares the benefits of being a customer-facing CIO, tips for navigating both sides of the boardroom table, and the technologies driving real innovation in life sciences.

Evan: Diana, you were Workday’s first ever CIO. Can you talk a little bit about what was unique about that role?

Diana: At Workday being a customer facing CIO, my responsibility was to help develop the ecosystem of CIOs who would advocate for Workday.

And at the time CIOs were embracing cloud, not at the pace they are today. And so a big part of that responsibility was dispelling the myths that, you know, you can't put your HR data in the cloud, but in doing so, it gave me a huge opportunity to get to know other CIOs. It gave me a great opportunity to meet the executives that would come to our, you know, our executive briefing center.

And it also, you know, gave me an opportunity to understand what they were seeing with our competition, where our products might not be matching up and how to go back and then advocate once again to make sure that we were doing everything in our power to compete effectively in the marketplace.

Saam: So Diana, I’m curious, when you think about your network of CIO peers, what differences have you noticed in terms of those who end up adopting new technologies like cloud more quickly?

Diana: You know, I think a big part of it was dependent upon how they were incented by the leadership in their company. If you had a CIO that was engaged in this conversation about moving to the cloud, it was typically because they had a seat at the table, if you will.

And they truly understood what the outcomes were that the organization was trying to deliver. And when you understand the why of where a company is trying to go and what those outcomes are, it's a whole lot easier to tell the story about why moving to the cloud or leveraging a new technology is going to help the company grow faster.

If you're more distant from that conversation, for whatever reason, it could be a reporting line. And sometimes it's just a nature of the individual themselves. They may be more focused on technology than they are on understanding the business and being a student of the industry and focused on outcomes, they're going to be less likely to be in a position to influence the company, the leadership, that moving to the cloud is the right thing to do.

When we found a group of CIOs who were willing to embrace some of these newer concepts and back when this was the case, it was, you know, 2015, 2016, you tend to cluster together and you tend to develop relationships. And then what happens is somebody in the group comes to the dinner and says, oh my gosh, we're trying this.

We're trying Snowflake, or we're trying that. And then everybody wants to jump on board because it's a cool thing, you know, to be engaged with, but, but never just for the technology, always because you're trying to derive an outcome that's better for the business. 

Evan: Diana, are there things that you did earlier in your career that helped you become a better student of the industry, and ultimately drive innovation?

Diana: You know, I came out of a program that was an application-based program at Purdue, where it was really all focused on systems analysis and design, back before systems and analysis and design was really thing.

And the goal was to get at the heart of what it was the business was trying to accomplish, what problems they were trying to solve. So I was trained that way before I ever went into the workplace. And when I went into the workplace, I mean I'm sitting across the table from physicians and PhD scientists, and they're talking in this language. And they're asking me for things and I have really no idea what they're asking me for. And, you know, before I know it, I'm responsible for developing a series of solutions that will ultimately determine whether we can keep products on the market or not, because it's all about tracking adverse events for patients. 

And in order to be able to do that well, it meant I had to understand the regulation. I had to read it. I had to talk to the lawyers. I mean, I really had to know what the rules were before we could ever sit down and write that first line of code. And I think being in an industry where science is always evolving every day, you come to work and you think, gosh, I thought I understood everything I needed to know yesterday.

And now I got all this new, you know, information I need to learn about where science is going. It kind of keeps you on your toes and keeps you focused on what is the outcome we're trying to drive. I think the other thing is there's this element of the customer. And as a CIO, the entire time I was a CIO, I never ever called the people that I worked with inside the company my customers.

My belief has always been the person that we are selling our product or service to is the customer. And that's the one we have to all be looking at in the same way. And inside the company, we all have to be working together to make sure we're achieving that end.

And by keeping myself and my team focused on the end customer, I think we're better at sort of deciphering what we needed to do internally and how to go about what we needed to do internally so that it was more of an outcomes focus than a technology focus. 

Saam: That's super interesting. I mean, I think that framing is not one we've heard on the show before, but it's really powerful, especially because so many organizations are trying to be more customer-centric. I'm curious if you could expand on that and what else you did or, or put into place to maintain that high customer orientation? 

Diana: Whenever we would have an all hands, we would always start with a business update. We just always made sure that they understood: has the strategy of the company changed?

If it has, why is it changing? Simon Sinek, you know, “always start with why” is a very powerful mechanism for helping a team feel connected to whatever it is you're asking them to do. Quite frankly, we would even do this with our outsource service providers, we'd go to our outsource service providers and we would tell them stories about our patients and help them feel connected to the products.

We would do the same thing at Workday. We would try to make sure we always were coming back to the organization to help them understand the why. 

One of the things that we did that was very simple, as a technologist, there's a way to frame how I've just accomplished something. And it would be, I deployed X in order to do Y. And we said, all you need to do is just flip it. In order to do Y, we deployed X, and what you do is you train yourself and you train the person who's listening to you to recognize that you're focused on the outcome first. And then if they're interested in the fact that you did X or Y with technology, they'll listen to the second half of your sentence. If they're not, they won't, and you can just move on. We reinforced that - that approach to every status report that anybody wrote, any presentation they put together.

And I think it really helped people, quite frankly, be happier about the work they were doing, because they got the why so much better.

Evan: So both Workday and Amgen are well known for innovative technology driving their products. Could you give an example from one of those companies about a surprising way that IT was driving innovation inside the organization?

Diana: At Amgen, especially when you're in that early phase discovery research and translational sciences stage of the company you're dealing with scientists who've dedicated their entire lives to disease states or a certain type of research.

So, I just didn't take any Sally or John, right, and say, you're going to go be the person who's gonna work with this scientific community to make sure you're solving all of their IT needs. Because I'll tell you what, they wouldn't last 10 minutes in a conversation. So what I had to do was to recruit scientists, I had to recruit PhD scientists, or at least master's degree level scientists. 

So whoever I brought in not only had to have the science background, but they had to be wicked smart when it came to computer technology.

And when we got that marriage right, the opportunity to innovate in partnership with them at Amgen accelerated. 

And I'll give you a for instance, talking about places where you standardize your data across a discovery research, you know, organization is the least interesting and exciting proposition you want to have.

On the other hand, if you can get them to create a data gateway. And labs can now start to benefit from experience happening in other labs where historically that's not necessarily how scientists are rewarded. All of a sudden you don't duplicate experiments. All of a sudden you're able to take the base data you have and build on that base data and really start to do something exciting with your data.

And we got to a point where we're working with a number of startup vendors, focused on the discovery research space. And because we were so good at our data and sharing our data across our research labs, we were actually able to work with them to actually couple their software together.

We did some of our own coding. We were able to help our scientists track where a certain molecule on a protein was to the - such degree of specificity, that experiment, one, would not be recreated. And two, we could use it to extend the patent protection. 

Evan: Wow, that’s really interesting. I know you're still very involved in various life sciences companies. What are the new technologies that are really driving innovation that space?

Diana: Yeah. I mean, so everyone's talking about machine learning and artificial intelligence today, but I would say, you know, the life sciences industry has really put that to work.

You probably have heard of the CRISPR CAS9 technology. Which is just a variety of really strong technologies all together that make it possible to edit a gene. And there's no way you're going to edit a gene, unwind it, take out a section and put a section in and then, you know, create multiple copies of it inside a human body without all different kinds of technology.

Vertex, one of the companies that I serve on the board of right now, is using the CRISPR CAS9 technology. And I'm sure you're also familiar with the disease sickle cell anemia. It is in a population that has really struggled to find any kind of treatment for what is just a really horrible disease.

And so we are working in partnership with the CRISPR company to develop a product called CTX001. And right now it's showing enormous  promise in clinical trials for patients suffering from sickle cell anemia. And it is all about editing their DNA so that it will produce this fetal hemoglobin that ultimately becomes a mature adult hemoglobin in the amounts that are needed.

So that these patients no longer have sickle cell anemia. So we're talking about a cure. You simply don't get to that without the application of technology. 

So that's just one example. Another one would be application of same types of data on the commercial side. So as you're getting back to this outcomes conversation, we were having not too long ago, and you're working with a payer organization who's, you know, saying, hey, why should I pay you this price for this very high price drug?

You can in essence, run a trial around the outcomes where you’re both looking at the data and understanding if the data and the outcomes the patients are having with your product are actually achieving the goals that you contract. It's called contracting at risk. Then you can come back a year later and you can true up on the cost of the drug based on the benefits to the patients from that data, and absent having those kinds of technologies, it's not possible. 

Saam: Diana, it's so interesting to me, like you built these teams at companies like Amgen and Workday from the inside, and now you're contributing to companies at the board level. And I'm curious, like, as you flipped roles, how do you engage with CIO and technology teams from a board level? What's some advice you have for CIOs around how to engage with the board?

Diana: I'll start here with a couple of myths that maybe were more true when I was a CIO back at Amgen, but, but it really has changed. And the first of those is that, you know, boards don't want to interact with the head of technology in a company.

And that is, that is just not true. It's definitely not true after the pandemic. And I think the second thing is there's a belief that board members don't understand and aren't interested in technology, maybe aren't tech savvy.

And so I would say for starters, for any head of tech, one of the first things they should do is really get to know their audience, understand what their backgrounds are.

And understand what other companies these individuals serve on the boards of, because once you do that, what you start to see is, wow, this person who's coming to my board sits on the board of AT&T, you know, what might they be hearing from the tech leader at AT&T that is going to cause me to up my game when I go talk to them about what we're doing here.

The second thing is if they do have a tech savvy member of the board or a couple of them, there's no reason why they can't go to their CEO, their corporate secretary, and say I'd love to have an opportunity to just to chat a bit with this person, to get their perspective on what the board wants to hear from us when we report on technology-related subjects. 

There's no question they'll get an earful on cybersecurity. I think the last thing would be that head of tech needs to have great relationships with the executive team. So when any other member of the executive team, whether that be the CFO, the chief accounting officer, the head of a business unit, comes to speak to the board about anything business related, when the conversation moves to technology, that individual has to be speaking about that head of tech like they are a valued partner, and if they're not doing that, then the board is going to start to wonder if that head of tech is being as effective inside the company as they need to be in driving the transformation.

Evan: That makes sense. So Diana, now we’re going to kick off our lightning round of questions. To start: for CIOs joining a new company, what should be their number one priority?

Diana: Team.

Saam: What's the biggest mistake you see CIOs make?

Diana: Team. Getting the team right at the outset is so critically important. Being surrounded by people that you can rely on and trust and that your business partners trust, there's just, there's nothing more important than getting on that in your, your first 90 days.

I would say, number two is learning the business. Get out and meet with your internal clients. Meet with the members of the executive team, understand what's working, understand what's not working. And you know the two questions I've always learned the most from starting with is, tell me what you - what you hope I'll do and tell me what you hope I won’t do. It's a great way to start building some guard rails for where you focus your time in your first year as a CIO. 

Evan: That's great feedback. What’s a book that’s had a big impact on your personal leadership?

Diana: Not a Good Day to Die and it's the truth about Operation Anaconda and it's, it's basically about a mission of a Delta force special ops commander whose name was Pete Blaber in 2003. If I go back and think about all of the mistakes I ever made or all the successes I feel like I had, to a lesson they're outlined in that book.

So if you're looking for a really complicated read, but it's - it just shows what can happen when you're in a leadership position and some days you have support and some days you don't, that would be a good one. 

Saam: What new technology or product are you personally most excited about?

Diana: Quantum computing. I can't help but think that there's going to be some tremendous power in it, especially in the space we were talking about earlier with life sciences and genetic sequencing. And I just can't wait to see how it unfolds and how we can start to put it to practical use.

Saam: Yeah, absolutely. Diana, this has been awesome and such a privilege to have you on. Thanks for doing this. 

Diana: Oh, my pleasure, Saam and Evan, thank you so much for the invitation. It was really an honor to be asked and I've, I've enjoyed every second of the, of the discussion today. 

Evan: Thank you so much. Looking forward to talking again soon.

Evan: That was Diana McKenzie, former CIO at Workday and Amgen. Thanks for listening to the Enterprise Software Innovators podcast. I’m Evan Reiser, the Founder and CEO of Abnormal Security.

Saam: And I’m Saam Motamedi, a general partner at Greylock Partners. Be sure to subscribe, so you never miss an episode! You can find more great lessons from technology leaders and enterprise software experts at enterprisesoftware.blog.

Evan: Enterprise Software Innovators is produced by Luke Reiser and Emily Shaw, and is mixed by Veronica Simonetti. See you next time!